8-K
CADIZ INC (CDZI)
United
States
Securities
and Exchange Commission
Washington,
D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 21, 2024
CadizInc.
(Exact Name of Registrant as Specified in itsCharter)
| Delaware | 001-40579 | 77-0313235 |
|---|---|---|
| (State or Other Jurisdiction<br><br> <br>of Incorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 550 S. Hope Street, Suite 2850<br><br> <br>Los Angeles, California | 90071 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’
s telephone number,
including area code: (213) 271-1600
| Not Applicable |
|---|
| (Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | CDZI | The NASDAQ Global Market |
| Depositary Shares (each representing a 1/1000th fractional interest in share of 8.875% Series A Cumulative Perpetual Preferred Stock, par value $0.01 per share) | CDZIP | The NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure
On November 25, 2024, Cadiz Inc. (“Cadiz” or the “Company”) issued a press release regarding its entry into the LOI as described under Item 8.01 below, which is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as expressly set forth in such filing.
Item 8.01 Other Events.
On November 21, 2024, Cadiz entered into a letter of intent (the “LOI”) with Lytton Rancheria of California, a federally recognized Native American Tribe in California (“Lytton”) that outlines a prospective investment by Lytton of up to $50 million in a new corporate entity, to be established by Cadiz, to support construction, joint ownership and operation of Cadiz’s groundwater banking project in the Mojave Desert (the “Mojave Groundwater Bank”). The new corporate entity, which is anticipated to be a limited liability company (“Newco”), is anticipated to raise total equity capital of $401 million toward the construction of the project and for Newco to acquire certain assets including pipelines and a majority interest in groundwater banking operations. Cadiz entered into a similar Letter of Intent with a non-profit investment fund (the “Non-Profit Fund”) for a prospective investment of up to $150 million previously described in its current report on Form 8-K filed on October 31, 2024 (the “Prior 8-K”). With a prospective investment of $50 million by Lytton and a prospective investment of $150 million by the Non-Profit Fund, Cadiz has entered LOIs with potential investors in Newco for up to $200 million of the $401 million of equity capital target amount. The Company is currently in diligence with other prospective investors, including other Native American Tribes (“Tribes”), for additional equity investments in the Newco.
Under the terms of the LOI, Cadiz will be responsible for project development activities, with Lytton, the Non-Profit Fund and other qualified investors expected to provide up to an aggregate of $401 million of equity capital to Newco in order for Newco to acquire assets and fund the construction of facilities for the Mojave Groundwater Bank. Total construction costs for facilities related to the operation of the Mojave Groundwater Bank are presently estimated at $800 million. Cadiz and Newco investors are expected to coordinate to seek available grant funding for remaining construction costs.
Under the terms of the LOI, upon execution of definitive agreements, establishment of Newco and securing sufficient equity capital commitments for construction of the project, Cadiz is expected to transfer and contribute assets to Newco, including (i) 100% of its ownership of the Northern Pipeline, (ii) the Southern Pipeline right of way, and (iii) 51% of its water storage rights in the Mojave Groundwater Bank. In consideration of such transfer of assets, upon closing of the transaction, Newco will pay Cadiz approximately $51 million, among other considerations set forth in the LOI. Cadiz will retain 49% of the water storage rights and all net revenue from the sale of water supply, including purchase contracts entered into among Cadiz and public water systems.
Cadiz will serve as the managing member of Newco. The distribution of 98% of net revenues anticipated to be received by Newco once the Mojave Groundwater Bank is operational will prioritize the Newco investors such as Lytton and the Non-Profit Fund until they achieve an annual yield on invested capital of 7.5%, with a portion of amounts in excess of such annual yield anticipated to be distributed to non-investing Tribes and community benefit programs for low-income and disadvantaged communities (LIDACs) as determined by the investors of Newco.
Cadiz has committed that the water supply, storage and conveyance projects of Newco will aim to benefit LIDACs, and Tribes. Under the LOI, Cadiz will pursue all appropriate channels to advance and protect Native American water rights and assist participating Tribes in protecting and advancing their water rights and developing climate resilient water supplies and clean energy solutions that benefit tribal communities and advance tribal sovereignty. Tribes such as Lytton will have the opportunity to acquire ownership interests in Newco and participate in an advisory council relating to the management of groundwater resources at Cadiz.
The LOI is not binding on the parties and does not create any binding obligations for the parties to close the contemplated transactions. Definitive agreements will be required to formalize any binding commitments by the parties.
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The foregoing description of the LOI does not purport to be complete and is qualified in its entirety by the full text of such document which is filed as Exhibit 99.2 to this Current Report and is incorporated by reference herein.
INFORMATION RELATING TO FORWARD LOOKING STATEMENTS
This current report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “anticipates”, “expect”, “may”, “plan”, or “will”. These forward-looking statements include, but are not limited to, statements regarding Cadiz’s expectation that the proposed transactions pursuant to the LOI will move forward and the parties thereto will enter into binding definitive agreements, and that Cadiz will realize the anticipated benefits from such agreements. Although Cadiz believes that the expectations reflected in our forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Factors that could cause actual results or events to differ materially from those reflected in Cadiz’s forward-looking statements include the risk that the parties do not enter into binding definitive agreements or that, if such definitive agreements are entered into, requisite funding necessary for construction of facilities for the Mojave Groundwater Bank may not be available on terms satisfactory to the parties or in sufficient amounts, or the progress of the project may not proceed as planned, or the definitive agreements entered into, if any, could be terminated prior to the completion of the project, and other factors and considerations detailed in Cadiz’s Securities and Exchange Commission filings including its annual report on Form 10-K for the year ended December 31, 2023 and subsequent filings. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| 99.1 | Press Release issued on November 25, 2024 |
|---|---|
| 99.2 | Letter of Intent, dated November 21, 2024, by and between Lytton Rancheria of California and Cadiz, Inc. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CADIZ INC. | |
|---|---|
| By: | /s/ Stanley E. Speer |
| Stanley E. Speer | |
| Chief Financial Officer |
Date: November 25, 2024
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Exhibit 99.1
PRESS RELEASE
Date: November 25, 2024
Lytton Rancheriaof California Leads Tribal Investment in Cadiz Groundwater Banking Project ****
$50 million investment in Mojave GroundwaterBank would be the largest investment in water infrastructure off tribal-lands by Native American Tribes in U.S. history
LOS ANGELES, CA and WINDSOR, CA 11.25.24 /PRNewswire/ – Cadiz, Inc. (NASDAQ: CDZI) (the “Company” or “Cadiz”) announced today that the Company and the Lytton Rancheria of California (“Lytton”) have signed a Letter of Intent for Lytton to invest up to $50 million in the Company’s groundwater banking project in the Mojave Desert (“Mojave Groundwater Bank”). Lytton’s investment would be the first major investment by a Native American Tribe in large-scale water infrastructure off tribal lands in U.S. history. With 2.5 million acre-feet of new water supply and an estimated 30 million acre-feet of water in storage today, the Mojave Groundwater Bank will be the largest new groundwater bank in the Southwest.
The partnership between Cadiz and Lytton signifies a landmark collaboration in water resource management, with Tribes holding a majority ownership stake in the Mojave Groundwater Bank. This ownership structure empowers Indigenous communities to play a leading role in decision-making and investment in vital water projects.
Lytton Tribal Chairperson Andy Mejia stated, “As a Tribal Government, we take our responsibility to be good stewards of the land and the environment seriously. Working with other Tribal Governments, Cadiz and other responsible environmental investors to develop a sustainable, responsibly managed water source in these shifting times is something we want to be involved in. With Tribal involvement in the direction and operation of this project, we can ensure that all people have a chance to benefit from this critical water resource.”
Cadiz CEO and Chairperson of the Board Susan Kennedy also stated, “We are proud and honored to create this groundbreaking partnership with Lytton to develop this important project for the benefit of underserved and indigenous communities. Access to clean water will be the single greatest challenge many communities in California and the Southwest face in the coming decades. We are grateful for the chance to be part of the solution.”
The Mojave Groundwater Bank is a clean water infrastructure project being developed by Cadiz in California’s Mojave Desert. The groundwater bank at Cadiz is located at the base of a 2,000 square mile watershed system fed by rain and snow in the high desert New York and Providence mountains. The underground reservoir holds an estimated 30 - 40 million acre-feet of water in storage today – more water than is presently stored in Lake Mead and Lake Powell, the two largest surface reservoirs in the United States, combined.
The Mojave Groundwater Bank will include more than 300 miles of pipelines that intersect California’s water transportation network to provide new clean water supply and storage resources to underserved, disadvantaged and tribal communities in the Mojave River Basin, the Colorado River Basin and California’s Inland Empire that presently lack access to clean, reliable water.
Cadiz anticipates construction of the Project to begin in 2025 with initial water delivery targeted for as early as 2026.
For additional details regarding the LOI with Lytton Rancheria of California, please refer to the Company’s Current Report on Form 8-K filed with the SEC today, November 25, 2024.
About Cadiz Inc.
Cadiz is a California water solutions company dedicated to providing access to clean, reliable and affordable water for people through a unique combination of water supply, storage, pipeline and treatment solutions. With 45,000 acres of land in California, 2.5 million acre-feet of water supply, 220 miles of pipeline assets and the most cost-effective water treatment filtration technology in the industry, Cadiz offers a full suite of solutions to address the impacts of climate change on clean water access. For more information, please visit https://www.cadizinc.com.
Contact
Cadiz, Inc.
Courtney Degener
cdegener@cadizinc.com
213-271-1603
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Forward-Looking Statements
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “anticipates”, “expect”, “may”, “plan”, or “will”. These forward-looking statements include, but are not limited to, statements regarding Cadiz’s expectation that the proposed transactions pursuant to the LOI will move forward and the parties thereto will enter into binding definitive agreements, and that Cadiz will realize the anticipated benefits from such agreements. Although Cadiz believes that the expectations reflected in our forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Factors that could cause actual results or events to differ materially from those reflected in Cadiz’s forward-looking statements include the risk that the parties do not enter into binding definitive agreements or that, if such definitive agreements are entered into, requisite funding necessary for construction of facilities for the Mojave Groundwater Bank may not be available on terms satisfactory to the parties or in sufficient amounts, or the progress of the project may not proceed as planned, or the definitive agreements entered into, if any, could be terminated prior to the completion of the project, and other factors and considerations detailed in Cadiz’s Securities and Exchange Commission filings including its annual report on Form 10-K for the year ended December 31, 2023 and subsequent filings. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law.
Exhibit 99.2
LETTER OF INTENT
This Letter of Intent (“LOI”) is intended to summarize proposed transactions between the Parties as described herein and as such does not represent nor constitute a binding commitment or agreement by any person or entity named herein.
PARTIES
| I. | LYTTON RANCHERIA of CALIFORNIA (“Lytton Rancheria” or “Tribe”) is a federally recognized<br>Tribe with headquarters at 1500 Falling Oak Way, Windsor, CA 95492. |
|---|---|
| II. | CADIZ INC. (“Cadiz” or “the Company”) is a publicly traded natural resources development<br>company located at 550 South Hope Street, Suite 550, Los Angeles, CA. |
| --- | --- |
Lytton Rancheria and Cadiz, Inc. will be referred to, collectively, as the “Parties”, and each of them, as a “Party”.
RECITALS
| I. | WHEREAS, Cadiz is a natural resources and water solutions company with 45,000 acres of land and water<br>rights, hundreds of miles of pipeline and water treatment technology assets in Southern California with permits to develop new water supplies<br>and the largest new groundwater banking project in the Southwestern U.S. (“Mojave Groundwater Bank”) that would benefit underserved<br>communities including Native American Tribes. |
|---|---|
| II. | WHEREAS, Lytton Rancheria wishes to invest in the development and ownership of water and energy assets to advance Tribal sovereignty<br>and enhance climate resiliency. |
| --- | --- |
| III. | WHEREAS, the Parties wish to enter into a strategic partnership whereby Tribal<br>Nations acquire a 51% majority interest in the Mojave Groundwater Bank and provide capital for construction of project infrastructure,<br>including pipelines, conveyance, pumping stations, and power generation facilities. |
| --- | --- |
| IV. | WHEREAS, a Limited Liability Company “LLC”) or similar venture between Tribal Nations and<br>Cadiz would provide the capital to complete construction of infrastructure for the Mojave Groundwater Bank while providing Lytton and<br>other Tribal Nations with the opportunity to acquire water and energy assets and generate new revenue streams to support Tribal needs. |
| --- | --- |
| V. | NOW, THEREFORE, in consideration of the foregoing recitals the Parties wish to enter<br>into this LOI to set forth each Party’s rights and obligations with respect to the proposed business relationship described herein (the<br>“Transactions”) as follows: |
| --- | --- |
| 1. | Lytton Rancheria will commit to invest up to $50 million in<br>a Limited Liability LLC (“LLC”) or similar venture with other Tribal Nations to construct, own and operate the Mojave Groundwater<br>Bank, wherein Lytton Rancheria, or an appropriate entity established by the Tribe, would be a Member of the LLC and contribute equity<br>capital for construction of projects developed by the LLC, while Cadiz, or appropriate entity established by Cadiz, would be the Managing<br>Member responsible for project development activities which will include application for all federal and state government infrastructure<br>funding for which projects developed by the LLC are eligible. |
| --- | --- |
| 2. | The LLC will acquire 51% of the storage rights in the Mojave Groundwater Bank for an initial payment<br>to Cadiz of $51 million and commit to provide $350 million of equity capital (“Total Equity Capital”) to construct and operationalize<br>all necessary infrastructure to complete the Mojave Groundwater Bank. |
| --- | --- |
| 3. | Cadiz, as Managing Member, will be responsible for obtaining any federal, state and /or non-profit<br>funding for which projects developed by the LLC may be eligible. All government funding received shall be applied toward capital and development<br>costs for LLC-financed projects. |
| --- | --- |
| 4. | Tribal-owned entities will contribute a minimum of 51% in Total Equity Capital to the LLC. Lytton Rancheria<br>and Cadiz will work together to identify additional investors including other Native American Tribes to reach the Total Equity Capital. |
| --- | --- |
| 5. | Cadiz will transfer the following assets to the LLC: 100% ownership of the Northern Pipeline, the Southern<br>Pipeline ROW and 51% of the water storage rights in the Mojave Groundwater Bank and will retain all revenue from the sale of water supply<br>and 49% of storage rights. |
| --- | --- |
| 6. | Profit Distribution – 98% of all net revenues to the LLC, including among other things, from the sale<br>of storage rights and wheeling of water supplies will be distributed to the LLC annually until it reaches an annual yield on its invested<br>capital of 7.5% and then shall receive incremental distributions as follows: |
| --- | --- |
| a. | Amounts in excess of 7.5% up to 8.5% Annual Yield will be distributed<br>85% to LLC Members and 15% to the Managing Member. |
| --- | --- |
| b. | Amounts in excess of 8.5% yield will be distributed 75% to LLC<br>Members and 25% to the Managing Member. |
| --- | --- |
| c. | A portion of amounts in excess of annual yield on invested capital<br>will be set aside for distribution to non-investing Tribes and community benefit programs as determined by each Member of the LLC in<br>its complete and sole discretion. |
| --- | --- |
| 7. | Water Resources/ Native American Water Rights – As Managing Member, Cadiz will commit to<br> pursue water supply, storage and infrastructure solutions that advance tribal sovereignty and Native American water rights and will<br> assist Lytton in advancing its interests in development of climate resilient water supplies that benefit the Tribe. |
| --- | --- |
| 8. | The Parties will make good faith efforts to complete the Transactions<br>contemplated herein within 180 days in order to expedite project development and advance federal and state funding opportunities. |
| --- | --- |
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| 9. | Due Diligence: Cadiz will promptly provide Lytton, its representatives<br>or designees access to or copies of all relevant materials respecting the Mojave Groundwater Bank Project for purposes of conducting<br>due diligence on the LLC venture. |
|---|---|
| 10. | Termination - This LOI will automatically terminate and be<br>of no further force and effect upon the earliest of: |
| --- | --- |
| a. | The date on which the Parties execute definitive agreements<br>in connection with the Transactions; and |
| --- | --- |
| b. | The date on which any Party informs the others in writing that<br>it no longer intends to proceed with the agreements contemplated herein. |
| --- | --- |
| 11. | Confidentiality. This LOI, its contents and the information<br>disclosed between the Parties as regards the Transactions are confidential to the Parties and their representatives and, therefore, they<br>may not be disclosed to any non-Party, without the prior written consent of the other Parties; provided, however, that the Parties may<br>disclose information to their actual or prospective investors, lenders, insurers, consultants and/or employees as necessary to further<br>the purposes of this LOI, provided that such parties agree to maintain the confidentiality of proprietary or non-public information.<br>If any Party or any of its affiliates or their respective representatives are compelled to disclose any information by court order or<br>law, such Party shall promptly notify other Parties in writing and shall disclose only that portion of such information which is legally<br>required to be disclosed. |
| --- | --- |
| 12. | No Binding Agreement. This LOI reflects the intention of the<br>Parties. No contract or agreement involving the Transactions shall be deemed to exist between the Parties or any of its affiliates unless<br>and until final definitive agreements have been executed and delivered. |
| --- | --- |
| 13. | Notices. All notices, requests, demands or other communications<br>required under this LOI shall be in writing to the following addresses: |
| --- | --- |
To Lytton Rancheria of California:
Attention to: Frank Riolo
E-mail: frank@theriologroup.com
To Cadiz Inc.:
Attention to: Susan P. Kennedy
E-mail: skennedy@cadizinc.com
Service by email is complete upon hitting “Send” or its equivalent, unless the person making service receives notice or otherwise reasonably should be aware that the email was not successfully transmitted. Any change to the above addresses shall be communicated in writing by the concerned Party to the other Parties.
| 14. | Expenses. None of the Parties (nor any of their respective<br>affiliates) may be considered to be liable for any costs or expenses incurred by any other Party or its advisors in regard to this LOI<br>or the Transactions or as a result of any Party’s decision not to continue the negotiation process and the discussions as regards<br>the Transactions, for any reason whatsoever, in good faith or otherwise. |
|---|---|
| 15. | Governing Law. The terms of this LOI shall be governed by<br>and construed in accordance with the laws of the State of California, without giving effect to the principles of conflicts of laws thereof. |
| --- | --- |
| 16. | Counterpart Signatures. This LOI may be executed in any number<br>of counterpart signatures with the same effect as if the parties had all signed the same document. All counterpart signatures shall be<br>construed together and shall constitute one agreement. |
| --- | --- |
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| Lytton Rancheria of California | Cadiz, Inc. | ||
|---|---|---|---|
| By: | /s/ Andy Mejia | By: | /s/ Susan P. Kennedy |
| Name: | Andy Mejia | Name: | Susan P. Kennedy |
| Title: | Chairperson | Title: | Chairperson |
| Date: | 11/20/2024 | Date: | 11/21/2024 |
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