Transactions Raise over $10 Million in Working Capital and Extend Maturity of Sr. Debt
December 6, 2016
(LOS ANGELES, CA GlobeNewswire) – Cadiz Inc. (NASDAQ: CDZI) (“Cadiz” or the “Company”) is pleased to report that it has closed a public offering and debt refinancing in two separate transactions that will enable the Company to fully execute its 2017 business plan, which includes final design and implementation of the Cadiz Valley Water Conservation, Recovery and Storage Project (“Cadiz Water Project”), a Southern California water supply project approved to deliver much-needed supplies to 400,000 people.
In an underwritten public offering of 1,000,0000 shares of the Company’s common stock, together with the exercise of an option by the underwriter to purchase an additional 150,000 shares, the Company raised gross proceeds of approximately $11.2 million (before the deduction of underwriting discounts and commissions). The successful offering and option exercise by the underwriter, which both closed today, resulted in net proceeds of approximately $10.6 million. Proceeds will be utilized for working capital, business development activities, capital expenditures related to the implementation of the Cadiz Water Project, and general and administrative expenses. The Company filed a Form 8-K on December 1, 2016 with full detail about the offering.
Separately, in a debt refinancing package completed last week with its senior lenders, the Company extended its $43 million senior secured debt for two additional years from September 28, 2017 to September 28, 2019, which allows the Company to execute its 2017 business plans without a pending maturity milestone. As an additional benefit, the credit agreement also now provides for new interest payment options and the reduction of future fee obligations if the Company moves forward with Cadiz Water Project construction or other infrastructure financing alternatives within the next six months. The Company filed a Form 8-K also on December 1, 2016 with further details about the new Senior Debt agreement.
“We are very optimistic about our ability to achieve our remaining milestones in 2017 and ready the Water Project for construction,” said Scott Slater, Cadiz CEO & President. “The new working capital received as a result of the public offering coupled with our recent debt extension will enable us to turn our complete attention to finalizing the project.”
The Cadiz Water Project is designed to provide a new, reliable water supply for approximately 400,000 people in Southern California without causing harm to the environment. After a multi-year public review, it was approved in 2012 in accordance with the California Environmental Quality Act, the nation’s toughest environmental law. Planned exclusively for private land and a disturbed, existing railroad corridor, the public-private partnership is expected to generate a $1 billion dollar economic stimulus and create and support nearly 6,000 jobs. The nearly-shovel ready Project is widely supported by bi-partisan elected leaders, labor, agriculture and business communities and has been upheld against six separate challenges in California’s Courts, including the California Court of Appeal in May 2016.
Founded in 1983, Cadiz Inc. is a publicly-held renewable resources company that owns 70 square miles of property with significant water resources in Southern California. We maintain an organic agricultural development in the Cadiz Valley of eastern San Bernardino County, California and are partnering with public water agencies to implement the Cadiz Water Project. We abide by a wide-ranging “Green Compact” focused on environmental conservation and sustainable practices to manage its land, water and agricultural resources. For more information about Cadiz, visit http://www.cadizinc.com/.
Safe Harbor Statement
All statements in this press release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended While management has based any forward-looking statements included in this press release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control, which could cause actual results to materially differ from such statements. Such risks, uncertainties and other factors include, but are not limited to, our ability to maximize value from our Cadiz, California land and water resources, our ability to meet our ongoing working capital needs, the fluctuation of global economic conditions, the performance of management and our employees, our ability to obtain financing, competition, general economic conditions and other factors that are to be detailed in our periodic and current reports available for review at www.sec.gov. Furthermore, we operate in a competitive environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward-looking statements to reflect events or circumstances that subsequently occur or of which we hereafter become aware.