Cadiz Inc. Sells Energy Project Stake for $15M

TL;DR

Cadiz selling its energy project stake for $15M, focusing on water.

AI Summary

Cadiz Inc. announced on October 30, 2024, that it has entered into a binding agreement to sell its 45% interest in the Cadiz Energy Project to an affiliate of the project's majority owner, Cadiz Development Company, LLC. The sale is expected to close by the end of 2024 and will result in Cadiz Inc. receiving $15 million in cash.

Why It Matters

This divestiture allows Cadiz Inc. to focus on its core water supply business and provides capital for future development, potentially impacting its financial strategy and operational focus.

Risk Assessment

Risk Level: medium — The sale of a significant asset and the reliance on future water projects introduce financial and operational risks.

Key Numbers

• $15 million — Sale Proceeds (Cash to be received by Cadiz Inc. from the sale of its energy project stake.)
• 45% — Ownership Stake (Percentage of the Cadiz Energy Project being sold by Cadiz Inc.)

Key Players & Entities

• Cadiz Inc. (company) — Registrant
• Cadiz Energy Project (company) — Asset being sold
• Cadiz Development Company, LLC (company) — Majority owner and buyer's affiliate
• $15 million (dollar_amount) — Sale price
• October 30, 2024 (date) — Announcement date
• end of 2024 (date) — Expected closing date

FAQ

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share CDZI The NASDAQ Global Ma
• $150 million — pective investment by the Fund of up to $150 million to support the establishment of a new e
• $401 million — her qualified investors providing up to $401 million of equity capital to Newco in order for
• $800 million — k, presently estimated in the amount of $800 million. The parties will coordinate to seek av
• $51 million — ets, Newco will pay Cadiz approximately $51 million among other consideration and will reta

Filing Documents

• ea021951501-8k_cadiz.htm (8-K) — 33KB
• 0001213900-24-092923.txt ( ) — 252KB
• cdzi-20241030.xsd (EX-101.SCH) — 4KB
• cdzi-20241030_def.xml (EX-101.DEF) — 26KB
• cdzi-20241030_lab.xml (EX-101.LAB) — 36KB
• cdzi-20241030_pre.xml (EX-101.PRE) — 25KB
• ea021951501-8k_cadiz_htm.xml (XML) — 6KB

01 Other Events

Item 8.01 Other Events. On October 30, 2024, Cadiz Inc. ("Cadiz") entered into a letter of intent (the "LOI") with a non-profit investment fund dedicated to financing sustainable infrastructure projects (the "Fund"). The Fund is a beneficiary of a federal grant award. The LOI outlines a prospective investment by the Fund of up to $150 million to support the establishment of a new entity, which is anticipated to be a limited partnership or limited liability company ("Newco"). Newco is expected to be established and managed by Cadiz or a subsidiary of Cadiz, with the participation of the Fund and other potential investors, to mobilize capital for the construction, ownership, and operation of Cadiz's groundwater banking project in the Mojave Desert (the "Mojave Groundwater Bank") and related projects. Under the terms of the LOI, Cadiz will be responsible for project development activities; with non-profit or public sector investors such as the Fund, federally recognized Native American Tribes ("Tribes"), and other qualified investors providing up to $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, presently estimated in the amount of $800 million. The parties will coordinate to seek available grant funding for any remaining construction costs. Under the terms of the LOI, Cadiz will 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 the water storage rights in the Mojave Groundwater Bank. In consideration of such transfer of assets, Newco will pay Cadiz approximately $51 million among other consideration and will retain 49% of the water storage rights. Water supply purchase contracts entered into among Cadiz and public water providers will not be contributed to Newco. Cadiz will serve as the general partner or managing member of Newco. The distribution of pr

SIGNATURES

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: October 31, 2024

View Full Filing

View this 8-K filing on SEC EDGAR