21 Mar Cadiz Announces New $12 Million Equity Investment from Registered Direct Offering of Common Stock
Heerema International Group Services SA leading offering with $5 million investment
Offering Priced at-the-Market
LOS ANGELES, March 21, 2022 /PRNewswire/ — Cadiz Inc. (Nasdaq: CDZI/CDZIP) (“Cadiz” or the “Company”), today announced that it has entered into a definitive securities purchase agreement for a registered direct offering (“Offering”) of 6.86 million shares of common stock at a price of $1.75 per share for total proceeds of $12 million. The Offering is led by the Company’s largest equity shareholder Heerema International Group Services SA (“Heerema IGS”), along with Company founder and Board member Keith Brackpool and affiliates of the Company’s senior secured lender, B. Riley Securities.
Proceeds of the Offering will be used for working capital purposes and will support ongoing development activities related to Cadiz’s water supply, storage and conveyance assets in California.
Heerema IGS, a leading international offshore energy and sustainable solutions company, anchored the Offering with an investment of $5 million. In connection with the purchase of shares in this Offering, the Company has agreed to provide Heerema a right to appoint one observer to its Board of Directors or, in lieu of such board observer right, the right to fill one vacancy on its Board. Following the Offering, Heerema IGS will beneficially own 35.4% of the Company’s outstanding common stock.
“Continued drought and water supply issues around the world strengthen our conviction that the Cadiz water supply, conservation and storage project is one of the most critical water infrastructure projects in the Western United States and a model for the rest of the world,” said Victor R. Muller, Advisor to the Board of Heerema IGS. “We support repurposing existing natural gas pipeline assets to transport water as the cornerstone of the Company’s plans, and we are confident that our involvement will greatly help Cadiz execute on its mission. Sustainability is leading our decision-making processes in every aspect of our business, and we always strive to minimalize environmental impact in everything we do. This is why Cadiz fits our investment criteria seamlessly and we support the Company in achieving its objectives.”
Certain Cadiz board members, including Cadiz founder Keith Brackpool, invested $2.5 million in the Offering. Affiliates of the Company’s senior secured lender, B. Riley Securities, also participated in the Offering, investing an additional $3.5 million.
Susan Kennedy, Executive Chair of Cadiz, commented: “We are proud to have the strong support of our institutional investors, including Heerema IGS, our current shareholders and our lenders in delivering on our mission.”
The Offering is expected to close on March 23, 2022, subject to customary closing conditions. Since this Offering is being made without an underwriter or a placement agent, the Company will not be paying any underwriting discounts or commissions in connection with the Offering.
The Offering is made pursuant to a shelf registration statement (File No. 333-257159) that was previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on June 25, 2021. A prospectus supplement, which contains additional information relating to the Offering, will be filed with the SEC and will be available on the SEC’s website at www.sec.gov.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein. There shall not be any offer, solicitation of an offer to buy, or sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.