As filed with the Securities and Exchange Commission on February 13, 2002
Registration No. 333-75006
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CADIZ INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0313235
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Wilshire Boulevard
Suite 1600
Santa Monica, California 90401-1111
(310) 899-4700
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Jennifer Hankes Painter
Vice President and General Counsel
100 Wilshire Boulevard
Suite 1600
Santa Monica, California 90401-1111
(310) 899-4700
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies of communications to:
HOWARD J. UNTERBERGER, ESQ.
CHRISTINA LYCOYANNIS, ESQ.
Miller & Holguin
1801 Century Park East, Seventh Floor
Los Angeles, California 90067
(310) 556-1990
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration
Statement
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box: _____
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. X
----
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. ____
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering. ____
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. ____
=================================================================
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO
SAID SECTION 8(A), MAY DETERMINE.
=================================================================
PROSPECTUS
DATED February 13, 2002 SUBJECT TO COMPLETION
CADIZ INC.
WARRANTS FOR THE PURCHASE OF 215,000 SHARES OF COMMON STOCK AND
COMMON STOCK UNDERLYING WARRANTS, 1,368,184 SHARES OF COMMON STOCK
UNDERLYING PREFERRED STOCK AND 40,000 ADDITIONAL SHARES OF COMMON STOCK
The selling securityholders are offering and selling:
* warrants to purchase 215,000 shares of common stock and
215,000 shares of common stock issuable upon the
exercise of these warrants;
* 1,368,184 shares of common stock issuable upon
conversion of, or as payment of stock dividends on,
Cadiz' Series E-1 and Series E-2 Convertible Preferred
Stock; and
* an additional 40,000 shares of common stock.
We issued the Series E-1 and Series E-2 Convertible Preferred
Stock to the selling securityholders on October 22, 2001 and
November 28, 2001, respectively, in private transactions exempt
from the registration requirements of the Securities Act of 1933.
We issued the 215,000 warrants and 40,000 shares of common stock
to the selling securityholders in connection with the convertible
preferred stock transactions. We do not know when or how the
selling securityholders intend to sell their shares or warrants or
what the price, terms or conditions of any sales will be. The
selling securityholders may sell the shares or warrants directly
or through underwriters, dealers or agents, who may receive
compensation. The selling securityholders may sell the shares or
warrants in privately negotiated transactions and may also sell
the shares in market transactions. Cadiz will not receive any
proceeds from the sale of the shares or warrants by the selling
securityholders. However, Cadiz will receive the exercise price
of the warrants if and when they are exercised, unless the
warrants are exercised pursuant to a "cashless exercise"
provision. The warrants entitle the holders to purchase common
stock at an initial exercise price per share of $7.50.
Cadiz' common stock is traded on the Nasdaq National Stock
Market System under the symbol "CLCI." On February 12, 2002, the
last reported sale price of our common stock on Nasdaq was $7.95.
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AN INVESTMENT IN THESE SECURITIES IS RISKY. YOU SHOULD
PURCHASE THESE SECURITIES IF YOU CAN AFFORD TO LOSE YOUR ENTIRE
INVESTMENT. PLEASE SEE THE RISK FACTORS BEGINNING ON PAGE 3 TO
READ ABOUT CERTAIN FACTORS YOU SHOULD CONSIDER BEFORE BUYING
SHARES OF COMMON STOCK OR WARRANTS TO PURCHASE COMMON STOCK.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is__________, 2002.
TABLE OF CONTENTS
Page
Notice About Forward Looking Statements. . . . . . . . . . . .1
About Cadiz and Sun World. . . . . . . . . . . . . . . . . . .1
Recent Developments. . . . . . . . . . . . . . . . . . . . . .1
Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . 3
Description of Securities. . . . . . . . . . . . . . . . . . .8
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 10
Sales by Selling Securityholders. . . . . . . . . . . . . . .10
Plan of Distribution. . . . . . . . . . . . . . . . . . . . .13
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . 14
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Where You Can Find More Information. . . . . . . . . . . . . 15
PAGE i
NOTICE ABOUT FORWARD-LOOKING STATEMENTS
Information presented in this prospectus, and in other
documents which are incorporated by reference in this prospectus
under the section of this prospectus entitled "Where You Can Find
More Information," that discusses financial projections,
information or expectations about our business plans, results of
operations, products or markets, or otherwise makes statements
about future events, are forward-looking statements. Forward-
looking statements can be identified by the use of words such as
"intends," "anticipates," "believes," "estimates," "projects,"
"forecasts," "expects," "plans," and "proposes." Although we
believe that the expectations reflected in these forward-looking
statements are based on reasonable assumptions, there are a number
of risks and uncertainties that could cause actual results to
differ materially from these forward-looking statements. These
include, among others, the cautionary statements in the "Risk
Factors" section of this prospectus beginning on page 3. These
cautionary statements identify important factors that could cause
actual results to differ materially from those described in the
forward-looking statements. When considering forward-looking
statements in this prospectus, you should keep in mind the
cautionary statements in the "Risk Factors" section and other
sections of this prospectus, and other cautionary statements in
documents which are incorporated by reference in this prospectus
and listed in "Where You Can Find More Information" on page 16.
ABOUT CADIZ AND SUN WORLD
Cadiz' primary businesses consist of water resource
management and agricultural operations on both a domestic and
international scope. Our assets encompass landholdings with high-
quality groundwater resources, agricultural properties
located throughout central and southern California valuable
water rights. We believe that our access to water provides
us with a competitive edge both as a major agricultural concern
and as a supplier of water.
Our wholly-owned subsidiary, Sun World International, Inc.,
is one of the largest developers, growers, packers and marketers
of proprietary fruits and vegetables in California. Sun World
also adds valuable water rights to our existing water resource
management operations. We also hold properties that are underlain
by high-quality groundwater resources with potential for water
storage and supply programs, and agricultural, municipal,
recreational and industrial development. We expect to utilize our
resources to participate in a broad variety of water storage and
supply, transfer, exchange and conservation programs with public
agencies and other parties.
We continually seek to develop and manage our water and
agricultural resources for their highest and best uses. We also
continue to evaluate acquisition opportunities which are
complementary to our current portfolio of water and agricultural
resources.
Our principal executive offices are located at 100 Wilshire
Boulevard, Suite 1600, Santa Monica, California 90401-1111 and our
telephone number is (310) 899-4700.
RECENT DEVELOPMENTS
On October 22, 2001 and November 28, 2001, we issued Series
E-1 Convertible Preferred Stock and Series E-2 Convertible
Preferred Stock, respectively, for cash payments totaling
$7,500,000. Cadiz is using the proceeds of these financing
transactions for general corporate and working capital purposes.
We issued the Series E-1 and Series E-2 Convertible Preferred
Stock to two investment funds, OZ Master Fund, Ltd. and OZF
Credit Opportunities Master Fund, Ltd., which are indirectly
affiliated with each other. In order to induce the two funds to
purchase the Series E-1 and Series E-2 Convertible Preferred
Stock, we issued to them a total of 40,000 shares of common stock
and warrants to purchase 215,000 shares of common stock. All
215,000 warrants have an initial exercise price of $7.50. 70,000
of these warrants are exercisable immediately and expire on
PAGE 1
October 22, 2004. An additional 70,000 of these warrants are
exercisable immediately and expire on November 28, 2004.
The remaining 75,000 warrants may become exercisable, if at
all, if Cadiz elects to convert the Series E-1 or Series E-2
Convertible Preferred Stock to common stock and other
conditions as set forth in the terms governing the Series E-1
and Series E-2 Convertible Preferred Stock are met. We
describe the terms of all warrants in greater detail in the
section of this prospectus called "Description of Securities"
on page 8.
The shares of Series E-1 and Series E-2 Convertible
Preferred Stock, having a total liquidation value of $7,500,000,
plus any accrued and unpaid dividends, are convertible into
shares of Cadiz common stock at an initial conversion price of
$7.50. The closing price of Cadiz' common stock as of October
22, 2001, the date the Series E-1 Preferred Stock was issued, was
$8.28. The closing price of Cadiz' common stock as of November
28, 2001, the date the Series E-2 Preferred Stock was issued, was
$7.70. The conversion price of both the Series E-1 Convertible
Preferred Stock and the Series E-2 Convertible Preferred Stock is
subject to "anti-dilution" adjustments as described in this
prospectus on page 8 under the caption "Description of
Securities."
In December 2000, we obtained loans totaling $5 million from
OZ Master Fund, Ltd. and OZF Credit Opportunities Master Fund,
Ltd., the selling securityholders. The two funds together own
5,000 shares of our Series D convertible preferred stock, 3,750
shares of our Series E-1 Convertible Preferred Stock and 3,750
shares of our Series E-2 Convertible Preferred Stock. As of
January 22, 2002, they collectively hold $16,082,000 principal
amount of Sun World's $115 million 11-1/4% First Mortgage Notes
due April 15, 2004.
On January 16, 2002, we announced our agreement in principle
with Kingdom Agricultural Development Company (KADCO), a private
Egyptian company owned by HRH Prince Alwaleed Bin Talal Bin Abdul
Aziz Alsaud, to combine the businesses of Sun World
International, Inc., our wholly-owned agricultural subsidiary,
and KADCO. Following the proposed combination, KADCO's
shareholders will have a 49.75% interest in the combined
business, while Cadiz will retain an ownership interest of
50.25%. KADCO owns, and is currently engaged in, the development
of approximately 100,000 acres of land and associated water
resources forming part of the Tushka Project in Southern Egypt
for which Sun World has been acting as exclusive manager since
1999, and prior to the proposed combination, KADCO expects to
have cash resources of approximately $85 million.
We intend to utilize the cash resources of the combined
business both to recapitalize Sun World and to provide for future
business expansion. The agreement in principal contemplates that,
in the future, KADCO shareholders will have an opportunity to
make an additional equity investment in the combined business.
Should KADCO shareholders make this additional investment, we
can choose to maintain our majority percentage ownership in the
combined business through a proportionate matching investment.
We believe that additional investment will help position the
combined business for its planned future transformation into
a publicly-traded company.
The management of Sun World will continue to manage the
combined business with Keith Brackpool as chairman and Timothy
Shaheen as chief executive officer. The board of the combined
business will consist of seven board members. As Cadiz will
initially hold a majority ownership in the combined business,
four board members will initially be nominated by Cadiz and three
board members will initially be nominated by the shareholders
of KADCO. Should KADCO ever obtain a majority percentage
ownership of the combned business, the shareholders of KADCO
will then have the right to nominate a majority of board members.
The proposed combination is subject to the negotiation and
execution of definitive agreements and a number of other important
conditions, including, among others, procurement of
PAGE 2
governmental, third-party and lender approvals or consents,
as necessary,completion of comfirmatory due diligence by both
parties and KADCO's completion of additional equity financing.
We anticipate that the combination will be consummated by
April 30, 2002. However, we cannot assure you that we will reach
a definitive agreement with KADCO or that the combination will
be consummated. See the discussion under the caption "Risk Factors"
beginning on page 3.
RISK FACTORS
An investment in shares of Cadiz common stock or warrants to
purchase shares of Cadiz common stock involves a high degree of
risk. You should carefully consider the following factors as well
as the other information contained and incorporated by reference
in this prospectus before deciding to invest.
WE HAVE A HISTORY OF OPERATING LOSSES AND MAY NEVER ACHIEVE
AND MAINTAIN PROFITABILITY UNLESS WE SUCCESSFULLY IMPLEMENT OUR
WATER DEVELOPMENT PROGRAMS. Our net losses were $7.5 million for
the year ended December 31, 1998, $8.6 million for the year ended
December 31, 1999 and $22.5 million for the year ended December
31, 2000. We have derived substantially all of our revenues to
date from our agricultural operations as conducted through our
Sun World subsidiary. Until such time, if ever, as we generate
significant revenues from our water development programs, our
consolidated results of operations will be largely dependent upon
the results of our agricultural operations. We may never become
profitable unless we are able to successfully implement our water
development programs. If we do become profitable, we may not be
able to remain profitable.
FACTORS OUTSIDE OF OUR CONTROL CAN AFFECT THE PROFITABILITY
OF OUR AGRICULTURAL OPERATIONS. As a result, we cannot assure
you that our agricultural operations will be commercially
profitable. Numerous factors can affect the price, yield and
marketability of our crops. Crop prices may vary greatly from
year to year as a result of the relationship between production
and market demand. For example, the production of a particular
crop in excess of demand in any particular year will depress
market prices, and inflationary factors and other unforeseeable
economic changes may also, at the same time, increase our
operating costs. Adverse weather conditions, insects, blight or
other diseases, labor boycotts or strikes and shortages of
competent laborers could also affect the profitability of our
agricultural operations, as could changes in governmental
policies and industry production levels.
IF WE DO NOT RECEIVE THE APPROVAL OF GOVERNMENTAL
REGULATORS, WE WILL NOT BE ABLE TO IMPLEMENT OUR WATER
DEVELOPMENT PROGRAMS. Groundwater development, and the export of
surplus groundwater for sale to single entities such as public
water agencies, are not subject to regulation by existing
statutes, other than general environmental statutes applicable to
all development programs. We are in the process of obtaining the
required federal and local regulatory approvals of one of our
water development programs, the Cadiz Groundwater Storage and Dry-
Year Supply Program. Under the proposed terms of this program,
during wet years, the Metropolitan Water District of Southern
California will store surplus Colorado River water in the aquifer
system underlying our property and during dry years, the stored
water, together with indigenous ground water, will be extracted
and delivered by pipeline to Metropolitan's service area. We
cannot assure you that we will be successful in obtaining the
necessary approvals for this program by our target of spring 2002
or at all. Even if we obtain these approvals, we cannot assure
you that the Cadiz Groundwater Storage and Dry-Year Supply
Program will become operational, if at all, by our target of 18-
24 months after we obtain these approvals. Nor can we assure you
that we will be able to receive regulatory approvals for, or
successfully implement, any of our other water development
programs.
PAGE 3
IF WE DO NOT REACH A FINAL AGREEMENT WITH THE METROPOLITAN
WATER DISTRICT OF SOUTHERN CALIFORNIA, WE WILL NOT BE ABLE TO
IMPLEMENT THE CADIZ GROUNDWATER STORAGE AND DRY-YEAR SUPPLY
PROGRAM. In July 1998, Cadiz and Metropolitan approved
"principles", or outline terms, for a 50-year agreement governing
the Cadiz Groundwater Storage and Dry-Year Supply Program.
Following extensive negotiations, Cadiz and Metropolitan further
refined the "principles" to reach agreement on the basic economic
terms of the program and allocate responsibilities under the
program. Metropolitan's board of directors approved these
definitive terms in April 2001. These definitive terms will
serve as the basis for a final agreement to be executed by Cadiz
and Metropolitan. Metropolitan will not enter into a final
agreement with Cadiz until Cadiz receives the required approvals
from federal and state regulators. As discussed in the preceding
paragraph, we cannot assure you that we will be able to obtain
the required approvals. Even if we do obtain the required
approvals, we cannot assure you that we will be able to reach
agreement with Metropolitan on the final terms of the Cadiz
Groundwater Storage and Dry-Year Supply Program.
LITIGATION BY ENVIRONMENTAL GROUPS MAY DELAY OR PREVENT THE
IMPLEMENTATION OF OUR WATER DEVELOPMENT PROGRAMS. If we are
successful in obtaining the necessary approvals from
environmental regulators to implement our water development
programs, including the Cadiz Groundwater Storage and Dry-Year
Supply Program, we may face challenges from environmental groups
and other opponents of our water development programs. If these
groups commence litigation after governmental regulators approve
the Cadiz Groundwater Storage and Dry-Year Supply Program, we may
be delayed or even prevented from implementing our water
development programs.
IF WE CANNOT OBTAIN ADDITIONAL FINANCING TO FUND DESIGN AND
CONSTRUCTION COSTS, WE MAY NOT BE ABLE TO IMPLEMENT OUR WATER
DEVELOPMENT PROGRAMS. As we continue to pursue our business
strategy, we will require additional financing in connection with
our water development programs and construction of those
programs. Under currently negotiated terms, Cadiz and
Metropolitan will equally share the responsibility for funding
the design, construction and implementation costs of the capital
facilities for the Cadiz Groundwater Storage and Dry-Year Supply
Program. We are analyzing alternatives for funding our 50% share
of the estimated $150 million cost of the program capital
facilities. These funding alternatives include long-term
financing arrangements and utilizing monies we expect to receive
from Metropolitan for its initial purchase of indigenous
groundwater or storage rights. If we are unable to obtain
funding for our share of the cost from any of these alternative
sources, then the Cadiz Groundwater Storage and Dry-Year Supply
Program will not go forward. If the Program does not go forward,
then we may never become profitable. We cannot assure you that we
will be able to finance the costs of implementing the Cadiz
Groundwater Storage and Dry-Year Supply Program or any of our
other water development programs.
WE MAY NOT BE ABLE TO MAKE TIMELY PAYMENTS OF PRINCIPAL AND
INTEREST ON OUR INDEBTEDNESS, WHICH MAY RESULT IN A FORECLOSURE
ON OUR ASSETS. If we cannot generate sufficient cash flow to
make timely payments of principal and interest on our
indebtedness, or if we otherwise fail to comply with the terms of
agreements governing our indebtedness, we may default on our
obligations. If we default on our obligations, our lenders may
sell off the assets that we have put up as collateral. This, in
turn, may result in a cessation or sale of the company's
operations.
As of December 31, 2001, Cadiz had total indebtedness
outstanding of $25.1 million and Sun World had total indebtedness
outstanding to third parties of $5 million. This indebtedness is
made up of term loans and borrowings under revolving credit
facilities and first mortgage notes. Sun World has $115 million
of 11-1/4% First Mortgage Notes due April 15, 2004. The assets
of Cadiz and Sun World have been put up as collateral to secure
the payment of the Cadiz and Sun World debt. Cadiz' term loans
and revolving credit facility are secured by its real property
and water rights, except for property and rights owned by Sun
World. The Sun World mortgage notes are secured by
PAGE 4
a first lien on the assets of Sun World and its subsidiaries,
other than growing crops, crop inventories and accounts
receivable, which secure the Sun World revolving credit facility.
The Sun World mortgage notes are also secured by the stock of
Sun World held by Cadiz.
IF OUR EXISTING CREDIT FACILITIES EXPIRE OR ARE INSUFFICIENT
TO MEET OUR NEEDS, WE MAY NOT BE ABLE TO SECURE FINANCING FROM
NEW LENDERS TO FUND OUR DAY-TO-DAY AGRICULTURAL OPERATIONS AND
IMPLEMENT OUR WATER DEVELOPMENT PROGRAMS. Cadiz and Sun World
currently rely on two revolving credit facilities under which
they can borrow, collectively, $45 million to meet their working
capital needs. $15 million was outstanding under these revolving
credit facilities as of December 31, 2001. These revolving
credit facilities and $20.2 million of the two company's term
loans are scheduled to expire or mature at various times from
February 15, 2002 through December 31, 2002. If our current
lenders do not renew our loan facilities, we may not be able to
obtain credit elsewhere. Even if our current lenders renew our
existing loan facilities, we cannot assure you that these lenders
will give us additional credit should we need it.
THE PROPOSED COMBINATION OF OUR SUN WORLD SUBSIDIARY WITH
KADCO MAY NOT OCCUR BY OUR TARGET DATE OF APRIL 30, 2002, OR AT
ALL, IF NUMEROUS CONDITIONS ARE NOT MET. On January 16, 2002, we
announced our agreement in principle with KADCO, a private
Egyptian company owned by HRH Prince Alwaleed Bin Talal Bin Abdul
Aziz Alsaud, to combine the businesses of Sun World and KADCO.
Following the proposed combination, KADCO's shareholders will
have a 49.75% interest in the combined business, while Cadiz will
retain an ownership interest of 50.25%. The proposed combination
is subject to the negotiation and execution of definitive
agreements and a number of other important conditions. These
include obtaining consents of governmental authorities and third
parties with whom we have contracts, including our lenders.
KADCO and Sun World must also complete a "due diligence" review
of the other's operations. Finally, KADCO must obtain additional
equity financing in order to complete the transaction. We cannot
assure you that we will be successful in negotiating the final
agreements with KADCO or that the proposed combination will take
place.
WE MAY NOT BE ABLE TO PRICE OUR WATER ON A COMPETITIVE BASIS
IF WE DO NOT DEVELOP COST-EFFECTIVE METHODS OF CONSTRUCTING AND
MAINTAINING EXTRACTION, MONITORING AND DELIVERY SYSTEMS FOR OUR
SURPLUS WATER. We face competition in the development of water
resources associated with our properties from several
competitors, some of which have significantly greater resources
than we do. Since California has scarce water resources and an
increasing demand for available water, we believe that price and
reliability of delivery are the principal competitive factors
affecting transfers of water in California. We cannot assure you
that we will be successful in developing cost-effective methods
of constructing and maintaining delivery systems for our surplus
water.
IF CURRENT WATER QUALITY STANDARDS CHANGE, OUR COST OF
COMPLYING WITH THESE STANDARDS MAY INCREASE SIGNIFICANTLY AND AS
A RESULT WE MAY NOT BE ABLE TO SELL OUR WATER TO WATER AGENCIES
AT PROFITABLE OR COMPETITIVE PRICES. Both the U.S. Environmental
Protection Agency and the California Department of Health
Services enforce regulations governing water quality standards
and maximum contaminant levels. These regulations affect water
agencies that supply water directly to consumers and that may buy
or lease water from us. If current standards for contaminants
such as arsenic and chromium-6 are revised in the future, our
cost of complying with these standards may increase
significantly, and we may not be able to sell our surplus water
and water rights to these water agencies at profitable or
competitive prices.
FACTORS OUTSIDE OF OUR CONTROL MAY DELAY OR PREVENT THE
IMPLEMENTATION OF OUR WATER DEVELOPMENT PROGRAMS. Factors which
may delay or prevent the implementation of our water development
programs include:
PAGE 5
* Unforeseen technical difficulties and construction delays;
* Cost increases;
* Hydrologic risks of variable water supplies;
* Risks presented by allocations of water under existing
and prospective priorities; and
* Risks of adverse changes to U.S. federal, state and
local laws, regulations and policies.
If any of the events listed above occurs, we cannot assure you
that we will be able to implement our water development programs
on schedule or at all.
IF WE ARE UNABLE TO CREATE SUFFICIENT MARKETPLACE DEMAND FOR
OUR HIGH QUALITY TRADEMARKED BRANDS OF PRODUCE, OUR AGRICULTURAL
BUSINESS MAY BECOME MORE VULNERABLE TO PRICE COMPETITION AND OUR
SALES MAY BE REDUCED. The agricultural business is characterized
by a limited number of large international food companies, as
well as a large number of smaller independent growers and grower
cooperatives, including numerous growers from Mexico. No single
competitor has a dominant market share in the agricultural
industry due to the regionalized nature of these businesses. In
order to compete effectively, we emphasize recognition of our
trademarked brands and association of these brands with high
quality food products. If our marketing efforts and emphasis on
the quality of our trademarked brands do not generate sufficient
demand for our agricultural products, we may have to lower our
prices to be competitive with other producers and our sales could
be reduced.
SEASONAL TRENDS CHARACTERISTIC OF THE AGRICULTURAL INDUSTRY
CAUSE SUN WORLD'S OPERATING RESULTS TO FLUCTUATE FROM QUARTER TO
QUARTER. Sun World has historically received the majority of its
net income during the months of June to October following the
harvest and sale of its table grape and stonefruit crops. Due to
this concentrated activity, Sun World has historically incurred a
loss with respect to its agricultural operations in the other
months during the year.
OUR FAILURE TO COMPLY WITH ENVIRONMENTAL REGULATIONS RELATED
TO AGRICULTURAL OPERATIONS COULD RESULT IN SUBSTANTIAL CLEAN-UP
COSTS AND CAUSE A DECLINE IN THE VALUE OF OUR PROPERTIES. Our
agricultural operations are subject to a broad range of evolving
federal, state and local environmental laws and regulations.
These regulations govern how we handle, store, transport and
dispense products identified as hazardous materials which are
generated in the normal course of our agricultural operations.
If we do not properly comply with environmental regulations
governing the handling of our hazardous materials, we may be
subject to liability for the cleanup of these substances. The
costs of cleanup may be substantial. Our failure to comply with
these environmental regulations may also cause a decline in the
value of our properties.
OUR FAILURE TO COMPLY WITH FOOD SAFETY REGULATIONS COULD
REDUCE THE PROFITABILITY OF OUR AGRICULTURAL OPERATIONS. Our
agricultural operations are subject to regulations governing food
safety which are enforced by the U.S. Food and Drug
Administration, the U.S. Department of Agriculture and other
federal, state, local and foreign environmental and health
authorities. If we violate these regulations, we may be
prevented from selling our agricultural products and become
exposed to potential tort liability. These events could
adversely affect the marketing of our agricultural products,
which in turn could reduce the profitability of our agricultural
operations.
WE HAVE IMPLEMENTED ANTI-TAKEOVER PROVISIONS THAT COULD
DISCOURAGE OR PREVENT AN ACQUISITION OF OUR COMPANY, EVEN IF THE
ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS, AND AS A
RESULT OUR MANAGEMENT MAY BECOME ENTRENCHED AND HARD TO REPLACE.
Provisions in
PAGE 6
our certificate of incorporation and bylaws could
make it more difficult for a third party to acquire us, even if
doing so would benefit our stockholders. These provisions
include:
* allowing our board of directors, exclusively, to fix the
number of the company's board of directors;
* allowing our board of directors, exclusively, to fill a
vacancy created by an expansion of the board of
directors, subject only to the rights of preferred
stockholders;
* allowing our board of directors to issue, without
stockholder approval, up to 100,000 shares of preferred
stock with terms set by the board of directors;
* limiting the ability of holders of our outstanding common
stock to call a special meeting of our stockholders; and
* preventing stockholders from taking actions by written
consent and requiring all stockholder actions to be taken
at a meeting of our stockholders.
Each of these provisions, as well as selected provisions of
Delaware law, could discourage potential takeover attempts, could
adversely affect the market price of our common stock and could
cause our management to become entrenched and hard to replace.
In addition, we have adopted a stockholder rights plan that,
along with the provisions of our Certificate of Incorporation and
bylaws, may have the effect of discouraging transactions
involving a change of control of our company.
THE SALE OF SHARES COVERED BY THIS PROSPECTUS AND FUTURE
SALES OF COMMON STOCK COULD REDUCE THE MARKET PRICE OF OUR COMMON
STOCK PRICE AND DILUTE OUR EARNINGS PER SHARE. The registration
for resale of common stock under this prospectus increases the
number of outstanding shares of our common stock eligible for
resale. The sale, or availability for sale, of these shares
could cause decreases in the market price of our common stock,
particularly in the event that a large number of shares were sold
in the public market over a short period of time. Similarly, the
perception that additional shares of our common stock could be
sold in the public market in the future, could cause a reduction
in the trading price of our stock. As of December 31, 2001,
there were 36,070,834 shares of common stock and the following
securities convertible into common stock outstanding:
* 1.8 million employee stock options, the common shares
underlying which have been registered on registration
statements on Form S-8.
* 1,150,000 warrants outstanding, other than the warrants
covered by this prospectus;
* 819,455 deferred stock units;
* our Series D Convertible Preferred Stock convertible into
625,000 shares of common stock; and
* the Series E-1 and Series E-2 Convertible Preferred Stock
covered by this prospectus convertible into one million
shares of common stock.
An additional 636,256 shares of our common stock are available
for grant under our stock option plan.
WE ARE RESTRICTED BY CONTRACT FROM PAYING DIVIDENDS AND WE
DO NOT INTEND TO PAY DIVIDENDS IN THE FORESEEABLE FUTURE. As a
result, any return on investment on our common stock will depend
primarily upon the appreciation in the price of our common stock.
To date, we have never paid a cash dividend on our common stock.
Our ability to receive distributions from Sun
PAGE 7
World's cash flow and to pay dividends in turn to our stockholders
is restricted by a series of covenants in the indenture governing
the Sun World's $115 million of 11-1/4% First Mortgage Notes due
April 15, 2004. These covenants do not allow for the payment of
dividends by us or by Sun World other than out of cumulative net
income. Similar restrictions are contained in the loan documents
governing Sun World's secured $30 million revolving credit facility,
Sun World's $5 million unsecured term loan and Cadiz' $15 million
revolving credit facility. As we have a history of operating
losses, we have been unable to date to pay dividends. Even if we
post a profit in future years, we currently intend to retain all
future earnings for the operation of our business. As a result,
we do not anticipate that we will declare any dividends in the
foreseeable future.
DESCRIPTION OF SECURITIES
The selling securityholders are offering and selling under
this prospectus:
* warrants to purchase 215,000 shares of common stock and
215,000 shares of common stock issuable upon the exercise
of these warrants;
* 1,368,184 shares of common stock issuable upon conversion
of, or as payment of stock dividends on, Cadiz' Series E-1
and Series E-2 Convertible Preferred Stock; and
* an additional 40,000 shares of common stock.
The description of our common stock is contained in our
registration statement filed with the SEC on Form 8-A on May 8,
1984, file number 012114, as amended by reports on:
* Form 8-K filed with the SEC on May 26, 1988, file number
403832;
* Form 8-K filed with the SEC on June 2, 1992, file number
92161827; and
* Form 8-K filed with the SEC on May 18, 1999, file number
000-12114.
Of the 215,000 warrants covered by this prospectus, 143,334
are held by OZ Master Fund, Ltd. and 71,666 are held by OZF Credit
Opportunities Master Fund, Ltd. The basic terms of these warrants
are set forth in the table below:
PAGE 8
WHEN THE
NAME OF NUMBER WARRANTS
SELLING OF EXERCISE CAN BE EXPIRATION
SECURITYHOLDER WARRANTS PRICE EXERCISED DATE
-------------- -------- -------- ---------- ----------------
OZ Master 46,667 $7.50 Immediately October 22,2004
Fund, Ltd.
46,667 $7.50 Immediately November 28, 2004
25,000* $7.50 If Cadiz elects 3 years from the
to convert the the date Cadiz
Series E-1 converts the
Preferred Stock Series E-1
to common stock Preferred Stock
on or prior to to common stock
October 22, 2002
25,000* $7.50 If Cadiz elects 3 years from
to convert the the date Cadiz
Series E-2 converts the
Preferred Stock Series E-2
to common stock Preferred
on or prior to Stock to
October 22, 2002 common stock
OZF Credit 23,333 $7.50 Immediately October 22, 2004
Opportunities
Master Fund,
Ltd.
23,333 $7.50 Immediately November 28, 2004
12,500* $7.50 If Cadiz elects 3 years from
to convert the the date Cadiz
Series E-1 converts the
Preferred Stock Series E-1
to common stock Preferred Stock
on or prior to to common stock
October 22, 2002
12,500* $7.50 If Cadiz elects 3 years from
to convert the the date Cadiz
Series E-2 converts the
Preferred Stock Series E-2
to common stock Preferred Stock
on or prior to to common stock
October 22, 2002
The total of 75,000 warrants in the table marked with an
asterisk cannot be exercised unless we elect to convert the Series
E-1 Convertible Preferred Stock or Series E-2 Convertible
Preferred Stock into Cadiz common stock prior to October 22, 2002.
We cannot make this election unless the conditions for conversion
for these series of preferred stock are satisfied. One of these
conditions is that the closing price for our common stock for any
30 consecutive trading day period ending not more than five
trading days prior to our submission of a notice of conversion has
exceeded $10.50.
The exercise price and number of shares of common stock which
may be purchased upon exercise of any of the warrants held by the
OZ Master Fund, Ltd. and OZF Credit Opportunity Master Fund, Ltd.
and as described in the table above are subject to "anti-dilution"
adjustments in the event of any:
* Common stock dividend or other distribution to holders of
common stock of additional shares of common stock;
* Subdivision, reclassification or combination of common
stock;
* Issuance to all holders of common stock of rights or
warrants to purchase shares of common stock at a price less
than the exercise price of the warrants;
* Declaration of any dividend outside the ordinary course of
business;
* Issuance of common stock at a price less than the exercise
price of the warrants; or
PAGE 9
* Issuance of securities convertible into or exchangeable for
shares of common stock at a price less than the exercise
price of the warrants.
If any of the "dilution" events listed above occurs, the
exercise price of the warrants will be adjusted according to a
"weighted average" formula. That is to say, the adjusted exercise
price of the warrants will be determined by multiplying the
original exercise price by a fraction, the numerator of which will
equal the number of shares of common stock outstanding on the date
the "dilution" event occurs, and the denominator of which will
equal the number of shares of common stock after the "dilution"
event occurs. Whenever the exercise price of the warrants is
adjusted as described above, the number of shares of common stock
purchasable upon exercise of the warrants will be simultaneously
adjusted. This adjustment will be made by multiplying the number
of common shares issuable upon exercise of the warrants
immediately prior to the "dilution" event by the exercise price in
effect immediately prior to the "dilution" event and dividing the
product so obtained by the adjusted exercise price.
In addition, if the registration statement of which this
prospectus forms a part is not declared effective by the SEC on or
prior to March 28, 2002, then Cadiz is obligated to reduce the
exercise price of the 215,000 warrants held by the OZ Master Fund,
Ltd. and OZF Credit Opportunity Master Fund, Ltd. and covered by
this prospectus by twenty-five cents ($0.25) and will be further
obligated to reduce the exercise price by an additional twenty-
five cents ($0.25) for each additional 30-day period during which
the registration statement is not declared effective. However,
the exercise price of the warrants will never be less than zero.
Each of the warrants covered by this prospectus contains a
"cashless exercise" provision. This provision allows the warrant
holder to pay the exercise price of the warrant by accepting a
number of shares of common stock equal to the number of shares of
common stock appearing on the face of the warrant multiplied by a
fraction, the numerator of which is the excess of the current
market price of the common stock over the exercise price of the
warrant, and the denominator of which is the current market price
of the common stock.
USE OF PROCEEDS
We will not receive any proceeds from the sale by the selling
securityholders of our common stock or warrants to purchase common
stock. However, we will receive an amount equal to the exercise
price of the warrants if and when any of these warrants are
exercised, unless a selling securityholder exercises its warrants
pursuant to the "cashless exercise" provision. We intend to use
the net proceeds, if any, from the exercise of the warrants for
working capital and general corporate purposes. Temporarily, we
may invest the net proceeds from the exercise of the warrants, if
any, in high grade short term interest bearing investments.
SALES BY SELLING SECURITYHOLDERS
The selling securityholders are offering warrants to purchase
up to 215,000 shares of Cadiz common stock and the common stock
issuable upon the exercise of these 215,000 warrants, 1,368,184
shares of Cadiz common stock which are issuable upon conversion
of, or as payment of stock dividends on, Cadiz' Series E-1 and
Series E-2 Convertible Preferred Stock, plus an additional 40,000
shares of common stock. The following table sets forth, as of the
date of the prospectus, the name of the selling securityholders,
the number of shares of common stock and warrants to purchase
common stock that the selling securityholders beneficially own as
of December 31, 2001, the number of shares of common stock and
warrants to purchase common stock beneficially owned by the
securityholders that may be offered for sale from time to time by
this prospectus and the number of shares and percentage of common
stock and warrants to purchase common stock to be held by the
PAGE 10
selling securityholders assuming the sale of all the common stock
and warrants to purchase common stock offered by this prospectus.
In December 2000, Sun World borrowed $4,500,000 from OZ
Master Fund, Ltd. and $500,000 from OZF Credit Opportunities
Master Fund, Ltd., the selling securityholders, pursuant to a
credit agreement with each fund. Each loan is unsecured, bears
interest at prevailing Eurodollar rates plus 3% per annum and is
payable in full on December 31, 2002. At the same time that we
borrowed the $5 million from the two funds for an additional $5
million, we issued to them 5,000 shares of our Series D
Convertible Preferred Stock, with an initial liquidation value of
$5 million. The two funds, together, also own 3,750 shares of our
Series E-1 Convertible Preferred Stock, with a liquidation value
of $3,750,000 and 3,750 shares of our Series E-2 Convertible
Preferred Stock, with a liquidation value of $3,750,000. OZ
Master Fund, Ltd. and OZF Credit Opportunities Master Fund, Ltd.
have informed us that, as of January 22, 2002, the funds own
$8,402,000 and $7,685,000, respectively, principal amount of Sun
World's $115 million 11-1/4% First Mortgage Notes due April 15, 2004.
Except as indicated above, none of the selling
securityholders has held any position or office or had a material
relationship with Cadiz or any of its affiliates within the past
three years other than as a result of the ownership of Cadiz
preferred stock and common stock, warrants to purchase Cadiz
common stock and Sun World bonds. Cadiz may amend or supplement
this prospectus from time to time to update the disclosure
contained in this prospectus.
Securities
Beneficially Securities Percentage
Name of Owned Prior Securities Beneficially Ownership
Selling to Offered Owned After After
Securityholder Offering(1) for Sale Offering(2) Offering(3)
-------------- ------------ ------------ ------------ -----------
OZ Master 2,297,122(5) 1,082,122(6) 1,215,000(7) 3.4%
Fund, Ltd.(4)
OZF Credit 676,062(9) 541,062(10) 135,000(11) .004%
Opportunities
Master Fund, Ltd.(8)
(1) Except as otherwise noted in this prospectus, the
number and percentage of shares beneficially owned is
determined in accordance with Rule 13d-3 of the Exchange
Act, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under Rule 13d-
3, beneficial ownership includes any shares as to which the
individual or entity has sole or shared voting power or
investment power and also any shares which the individual or
entity has the right to acquire within 60 days of the date
of this prospectus through the exercise of any stock option
or other right.
(2) Assumes the sale of all shares of common stock offered
under this prospectus.
(3) Based upon 36,070,834 shares of common stock
outstanding as of December 31, 2001.
(4) According to a statement on Schedule 13G dated November
28, 2001 and filed on December 7, 2001, OZ Management, L.L.C.,
a Delaware limited liability company, beneficially owns
1,714,152 shares of Cadiz common stock. Although not identified
as a reporting person in the Schedule 13G, Mr. Daniel S. Och is
the senior managing member of OZ Management, L.L.C. As such, he
may be deemed to control this entity and therefore, indirectly,
the shares reported on the Schedule 13G. The Schedule 13G
further provides that OZ Management, L.L.C. serves as an investment
manager to a number of discretionary accounts and investment
entities for which it has voting and dispositive authority over
its 1,714,152 shares.
(5) The 2,297,122 securities beneficially owned by OZ Master
Fund, Ltd. prior to this offering include the 1,082,122
securities offered for sale by the selling securityholder
pursuant to this prospectus
PAGE 11
and as described in detail in Note 6, plus 1,215,000
additional securities as described in detail in Note 7.
(6) The 1,082,122 securities sold by OZ Master Fund, Ltd.
under this prospectus include common stock and warrants as
described in the following table:
Title Of Number of
Security Securities
Included In Included
This in this When the securities will be
Prospectus Prospectus acquired by Oz Master Fund, Ltd.
----------- ------------- --------------------------------
Common Stock 26,666 shares These shares were issued to OZ
Master Fund, Ltd. prior to the
date of this prospectus.
Common Stock 456,061 shares These shares will be issued upon the
conversion of, and/or payment of
dividends on, 2,500 shares of Series
E-1 Convertible Preferred Stock
issued to OZ Master Fund, Ltd. prior
to the date of this prospectus.
Common Stock 456,061 shares These shares will be issued upon the
conversion of, and/or payment of
dividends on, 2,500 shares of Series
E-2 Convertible Preferred Stock
issued to OZ Master Fund, Ltd. prior
to the date of this prospectus.
Warrants to 143,334 warrants These warrants were issued to OZ
Purchase Master Fund, Ltd. prior to the date
Common Stock of this prospectus.
Common Stock 143,334 shares These shares will be issued to OZ
(underlying Master Fund, Ltd. upon the exercise
the warrants of the 143,334 warrants described
to purchase above. The terms of exercise are
common described in this prospectus under
stock) the caption "Description of
Securities."
TOTAL 1,082,122 shares
(7) These 1,215,000 securities consist of common stock and
warrants for the purchase of common stock and are registered
on a registration statement on Form S-3 filed with the
Securities and Exchange Commission on January 16, 2001.
(8) According to a statement on Schedule 13G dated November
28, 2001 and filed on December 7, 2001, OZF Management, L.P.
a Delaware limited partnership, beneficially owns 515,832 shares
of Cadiz common stock. Although not identified as a reporting
person in the Schedule 13G, Mr. Daniel S. Och is a senior
managing member of OZF Management, L.L.C., the general partner
of OZF Managmenet, L.P. Furthermore, Mr. Stephen C. Freidheim
is also a senior managing member of OZF Management, L.L.C.
As such, both individuals may be deemed to control OZF
Management, L.P., and therefore, indirectly, the shares reported
on the Schedule 13G.
The Schedule 13G further provides that OZF Management, L.P. serves
as an investment manager to a number of discretionary accounts and
investment entities for which it has voting and dispositive
authority over its 515,832 shares.
(9) The 676,062 securities beneficially owned by OZF Credit
Opportunities Master Fund, Ltd. prior to this offering
include the 541,062 securities offered for sale by OZF Credit
Opportunities Master Fund, Ltd. pursuant to this prospectus
and as described in detail in footnote 10, plus 135,000
additional securities as described in detail in footnote 11.
PAGE 12
(10) The 541,062 securities sold by OZF Credit Opportunities
Master Fund, Ltd. under this prospectus include common stock
and warrants as described in the following table:
Title of Number of
Security Securities
Included in Included in When the securities will be
This This acquired by the OZF Credit
Prospectus Prospectus Opportunities Master Fund, Ltd.
----------- -------------- -------------------------------
Common Stock 13,334 shares These shares were issued to OZF
Credit Opportunities Master Fund,
Ltd. prior to the date of this
prospectus.
Common Stock 228,031 shares These shares will be issued upon
the conversion of, and/or payment
of dividends on, 1,250 shares of
Series E-1 Convertible Preferred
Stock issued to OZF Credit
Opportunities Master Fund, Ltd.
prior to the date of this
prospectus.
Common Stock 228,031 shares These shares will be issued upon
the conversion of, and/or payment
of dividends on, 1,250 shares of
Series E-2 Convertible Preferred
Stock issued to OZF Credit
Opportunities Master Fund, Ltd.
prior to the date of this
prospectus.
Warrants to 71,666 warrants These warrants were issued to OZF
Purchase Credit Opportunities Master Fund,
Common Stock Ltd. prior to the date of this
prospectus.
Common Stock 71,666 shares These shares will be issued to
(underlying OZF Credit Opportunities Master
the warrants Fund, Ltd. upon the exercise of
to purchase 71,666 warrants described above.
common The terms of exercise are
stock) described in this prospectus
under the caption "Description of
Securities."
TOTAL 541,062 shares
(11) These 135,000 securities consist of common stock and warrants
and are registered on a registration statement on Form S-3 filed
with the Securities and Exchange Commission on January 16, 2001.
PLAN OF DISTRIBUTION
The shares of common stock and warrants to purchase common
stock offered by this prospectus will be offered and sold by the
selling securityholders named in this prospectus, by their donees
or transferees, or by their other successors in interest. Cadiz
has agreed to bear the expenses of the registration of the shares
and warrants, including legal and accounting fees, other than
fees of counsel, if any, retained individually by the selling
securityholders, and any discounts or commissions payable with
respect to sales of the shares and warrants.
The selling securityholders from time to time may offer and
sell the shares in transactions in the Nasdaq over-the-counter
market at market prices prevailing at the time of sale. The
selling securityholders from time to time may also offer and sell
the shares or warrants in private transactions at negotiated
prices. The selling securityholders may sell their shares and
warrants directly or to or through broker-dealers who may receive
compensation in the form of discounts, concessions or commissions
from the selling securityholders or the purchasers of shares for
whom such broker-dealers may act as agent or to whom they may
sell as principal, or both. Such compensation may be in excess of
customary commissions.
From time to time, the selling securityholders may pledge or
grant a security interest in some or all of the shares or
warrants which they own. If a selling securityholder defaults in
performance of
PAGE 13
its secured obligations, the pledgees or secured
parties may offer and sell the shares or warrants from time to
time by this prospectus (except, in some cases, if the pledgees
or secured parties are broker-dealers or are affiliated with
broker-dealers). The selling securityholders also may transfer
and donate shares or warrants in other circumstances. Transferees
and donees may also offer and sell the shares or warrants from
time to time by this prospectus (except, in some cases, if the
transferees or donees are broker-dealers or are affiliated with
broker-dealers). The number of shares beneficially owned by a
selling securityholder will decrease as and when the selling
securityholder transfers or donates its shares or warrants or
defaults in performing obligations secured by its shares or
warrants. The plan of distribution for the shares and warrants
offered and sold under this prospectus will otherwise remain
unchanged, except that the transferees, donees, pledgees, other
secured parties or other successors in interest will be selling
securityholders for purposes of this prospectus. If we are
notified that a donee, pledgee or other successor in interest of
a selling securityholder intends to sell more than 500 shares of
our common stock, we will file a supplement to this prospectus
which includes all of the information required to be disclosed by
Item 507 of Regulation S-K. Further, Cadiz will file a post-
effective amendment to this registration statement upon any
change in the plan of distribution.
The selling securityholders and any broker-dealers acting in
connection with the sale of the shares or warrants covered by
this prospectus may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933, and any
commissions received by them and any profit realized by them on
the resale of the shares or warrants as principals may be deemed
to be underwriting compensation under the Securities Act of 1933.
Cadiz has agreed to indemnify the selling securityholders
against liabilities they may incur as a result of any untrue
statement or alleged untrue statement of a material fact in the
registration statement of which this prospectus forms a part, or
any omission or alleged omission in this prospectus or the
registration statement to state a material fact necessary in
order to make the statements made not misleading. This
indemnification includes liabilities that the selling
securityholders may incur under the Securities Act of 1933. Cadiz
does not have to give such indemnification if the untrue
statement or omission was made in reliance upon and in conformity
with information furnished in writing to Cadiz by the selling
securityholders for use in this prospectus or the registration
statement.
Cadiz has advised the selling securityholders of the
requirement for delivery of this prospectus in connection with
any sale of the shares. Cadiz has also advised the selling
securityholder of the relevant cooling off period specified by
Regulation M and restrictions upon the selling securityholders'
bidding for or purchasing securities of Cadiz during the
distribution of shares.
TRANSFER AGENT
The transfer agent for our common stock is Continental Stock
Transfer & Trust Company, New York, New York.
LEGAL MATTERS
Certain legal matters in connection with the issuance of the
securities offered under this prospectus will be passed upon for
Cadiz by Miller & Holguin, attorneys at law, Los Angeles,
California.
PAGE 14
EXPERTS
The financial statements of Cadiz incorporated in this
prospectus by reference to the Annual Report on Form 10-K of
Cadiz for the year ended December 31, 2000 have been so
incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of that firm
as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy and
information statements and other information with the Securities
and Exchange Commission. Our SEC filings are available to the
public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we
file at the SEC's public reference rooms located at Room 1024,
Judiciary Plaza, 450 5th Street, N.W., Washington, D.C. 20549 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. You may obtain information on the operation
of the SEC's public reference rooms by calling the SEC at 1-800-
SEC-0330.
The SEC allows us to "incorporate by reference" the
information we file with them. This prospectus incorporates
important business and financial information about Cadiz which is
not included in or delivered with this prospectus. The
information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC
will automatically update and supersede this information.
We incorporate by reference the following documents:
* our Annual Report on Form 10-K for the year ended
December 31, 2000, filed on March 29, 2001, file number
000-12114;
* our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001, filed on May 15, 2001, file number 000-
12114;
* our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2001, filed on August 14, 2001, file number 000-
12114;
* our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2001, filed on November 14, 2001, file
number 000-12114;
* our Proxy Statement dated April 9, 2001, filed on
Schedule 14A on April 10, 2001;
* our Current Report on Form 8-K dated December 29, 2000,
filed on January 3, 2001, file number 000-12114;
* our Current Report on Form 8-K dated January 6, 2001,
filed on January 8, 2001, file number 000-12114;
* our Current Report on Form 8-K dated and filed on January
16, 2001, file number 000-12114;
* our Current Report on Form 8-K dated March 12, 2001,
filed on March 14, 2001, file number 000-12114;
PAGE 15
* our Current Report on Form 8-K dated October 22, 2001,
filed on October 26, 2001, file number 000-12114;
* our Current Report on Form 8-K dated January 16, 2002,
filed on January 16, 2002, file number 000-12114;
* the description of our common stock as set forth in our
registration statement filed on Form 8-A under the Exchange
Act on May 8, file number 012114, as amended by reports on:
* Form 8-K filed with the SEC on May 26, 1988, file number
403832;
* Form 8-K filed with the SEC on June 2, 1992, file number
92161827; and
* Form 8-K filed with the SEC on May 18, 1999, file number
000-12114.
* future filings we make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until all of the shares offered by the selling
stockholders have been sold.
You may obtain a copy of these filings, without charge, by
writing or calling us at:
Cadiz Inc.
100 Wilshire Boulevard, Suite 1600
Santa Monica, California 90401-1111
Attention: Investor Relations
(310) 899-4700
If you would like to request these filings from us, please
do so at least five business days before you have to make an
investment decision.
You should rely only on the information incorporated by
reference or provided in this prospectus. We have not authorized
anyone else to provide you with different information. We are
not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the
information in this prospectus or the documents incorporated by
reference is accurate as of any date other than on the front of
those documents.
PAGE 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant estimates that expenses in connection with
the distribution described in this Registration Statement will be
as shown below. All expenses incurred with respect to the
distribution, except for fees of counsel, if any, retained
individually by the selling securityholders and any discounts or
commissions payable with respect to sales of the shares, will be
paid by Cadiz. See "Plan of Distribution."
SEC registration fee $ 2,971.63
Printing expenses 0.00
Accounting fees and expenses 14,000.00
Legal fees and expenses 40,000.00
Miscellaneous 0.00
-----------
Total $56,971.63
===========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits
Cadiz' Board of Directors to indemnify any person against
expenses, attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with any threatened, pending or completed action, suit or
proceeding in which he is made a party because he serves or
served as a director, officer, employee or agent of Cadiz or of
another entity. The language of Section 145 is sufficiently
broad to permit indemnification in some situations for
liabilities, including reimbursement for expenses incurred,
arising under the Securities Act of 1933, as amended. The statute
provides that indemnification pursuant to its provisions is not
exclusive of other rights of indemnification to which a person
may be entitled under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise.
Our Bylaws provide for mandatory indemnification of
directors and officers of Cadiz, and those serving at the request
of Cadiz as directors, officers, employees, or agents of other
entities, to the maximum extent permitted by law. The Bylaws
provide that this indemnification shall be a contract right
between each of these persons and Cadiz.
The subscription agreements between Cadiz and the purchasers
of the securities registered for resale under this registration
statement provide that Cadiz shall indemnify the purchasers for
liabilities under the Securities Act of 1933 arising out of
untrue statements and omissions of material fact made by Cadiz in
this registration statement. The subscription agreements also
provide that the purchasers similarly shall indemnify Cadiz and
controlling persons of Cadiz for liabilities under the Securities
Act of 1933 arising out of untrue statements and omissions of
material fact made by the purchasers in this registration
statement.
Cadiz' Certificate of Incorporation provides that a director
of the company shall not be personally liable to the company or
its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability:
(1) for any breach of the director's duty of loyalty to Cadiz or
its stockholders;
PAGE II-1
(2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(3) under Section 174 of the Delaware General Corporation Law; OR
(4) for any transaction from which the director derived an
improper personal benefit.
Cadiz' Certificate of Incorporation provides that if the Delaware
General Corporation Law is subsequently amended to authorize the
further elimination or limitation of the liability of a director,
then the liability of a director shall be eliminated or limited
to the fullest extent permitted by the law as amended. Cadiz
also has purchased a liability insurance policy which insures its
directors and officers against certain liabilities, including
liabilities under the Securities Act of 1933.
ITEM 16. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.
The following exhibits are filed or incorporated by
reference as part of this Registration Statement.
4.1 Specimen Form of Stock Certificate for Cadiz common
stock(1)
4.2 Cadiz Certificate of Designations of Series A
Junior Participating Preferred Stock dated May 11,
1999(2)
4.3 Cadiz Certificate of Designations of Series D
Preferred Stock dated December 28, 2000(3)
4.4 Cadiz Certificate of Correction Filed to Correct
the Certificate of Designations of Series D Preferred
Stock dated December 28, 2000(3)
4.5 Cadiz Certificate of Designations of Series E-1
Preferred Stock dated October 22, 2001(4)
4.6 Cadiz Certificate of Designations of Series E-2
Preferred Stock dated November 28, 2001(5)
4.7 Indenture dated as of April 16, 1997 among Sun
World as issuer, Sun World and certain subsidiaries of
Sun World as guarantors, and The Bank of New York,
successor in interest to IBJ Whitehall Bank & Trust
Company, as trustee, for the benefit of holders of 11-
1/4% First Mortgage Notes due 2004 (including as
Exhibit A to the Indenture, the form of the Global Note
and the form of each Guarantee)(6)
4.8 Amendment to Indenture dated as of October 9, 1997(7)
4.9 Amendment to Indenture dated as of January 23, 1998(8)
4.10 Form of Initial Warrant to Purchase Common Stock
of Cadiz issued to each of OZ Master Fund, Ltd. (45,000
shares) and OZF Credit Opportunities Master Fund, Ltd.
(5,000 shares), respectively(9)
4.11 Form of Subsequent Warrant to Purchase Common
Stock of Cadiz issued to each of OZ Master Fund, Ltd.
(45,000 shares) and OZF Credit Opportunities Master
Fund, Ltd. (5,000 shares), respectively(10)
PAGE II-2
4.12 Form of First Warrant to Purchase Common Stock of
Cadiz issued to each of OZ Master Fund, Ltd. (135,000
shares) and OZF Credit Opportunities Master Fund, Ltd.
(15,000 shares), respectively(11)
4.13 Form of Second Warrant to Purchase Common Stock of
Cadiz issued to each of OZ Master Fund, Ltd. (67,500
shares) and OZF Credit Opportunities Master Fund, Ltd.
(7,500 shares), respectively(12)
4.14 Form of Initial Warrant to Purchase Common Stock
of Cadiz issued to each of OZ Master Fund, Ltd. (46,667
shares) and OZF Credit Opportunities Master Fund, Ltd.
(23,333 shares), respectively(5)
4.15 Form of Initial Mandatory Conversion Warrant to
Purchase Common Stock of Cadiz issued to each of OZ
Master Fund, Ltd. (25,000 shares) and OZF Credit
Opportunities Master Fund, Ltd. (12,500 shares),
respectively(5)
4.16 Form of Commitment Exercise Warrant to Purchase
Common Stock of Cadiz issued to each of OZ Master Fund,
Ltd. (46,667 shares) and OZF Credit Opportunities
Master Fund, Ltd. (23,333 shares), respectively(5)
4.17 Form of Commitment Mandatory Conversion Warrant to
Purchase Common Stock of Cadiz issued to each of OZ
Master Fund, Ltd. (25,000 shares) and OZF Credit
Opportunities Master Fund, Ltd. (12,500 shares),
respectively(5)
5.1 Opinion of Miller & Holguin as to the legality of
the securities being registered
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Miller & Holguin (included in its
opinion filed as Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
------------------------
(1) Previously filed as an Exhibit to Cadiz' Quarterly
Report on Form 10-Q for the quarter ended September 30,
1998 filed November 13, 1998.
(2) Previously filed as an Exhibit to Cadiz' Current Report
on Form 8-K dated May 10, 1999 filed on May 18, 1999.
(3) Previously filed as an Exhibit to Cadiz' Current Report
on Form 8-K dated December 29, 2000 filed on January 3,
2001.
(4) Previously filed as an Exhibit to Cadiz' Quarterly
Report on Form 10-Q for the quarter ended September 30,
2001 filed on November 14, 2001.
(5) Previously filed as an Exhibit to Cadiz' Registration
Statement on Form S-3 (Registration Statement No. 333-
75006) filed on December 13, 2001.
(6) Previously filed as an Exhibit to Amendment No. 1 to
Cadiz' Registration Statement on Form S-1 (Registration
Statement No. 333-19109) filed on April 29, 1997.
(7) Previously filed as an Exhibit to Amendment No. 2 to
Sun World's Registration Statement on Form S-4
(Registration Statement No. 333-31103) filed on October
10, 1997.
PAGE II-3
(8) Previously filed as an Exhibit to Cadiz' Annual Report
on Form 10-K for the fiscal year ended December 31,
1997 filed on March 26, 1998.
(9) Previously filed as Exhibits 4.8 and 4.10 to Cadiz'
Registration Statement on Form S-3 (Registration No.
333-53768) filed on January 16, 2001.
(10) Previously filed as Exhibits 4.9 and 4.11 to
Cadiz' Registration Statement on Form S-3 (Registration
No. 333-53768) filed on January 16, 2001.
(11) Previously filed as Exhibits 4.12 and 4.13 to
Cadiz' Registration Statement on Form S-3 (Registration
No. 333-53768) filed on January 16, 2001.
(12) Previously filed as Exhibits 4.14 and 4.15 to
Cadiz' Registration Statement on Form S-3 (Registration
No. 333-53768) filed on January 16, 2001.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form S-8
or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide
offering thereof; and
PAGE II-4
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) That for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual
report to securityholders that is incorporated by reference
in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3
of Regulation S-X are not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report
that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant
to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
PAGE II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Santa Monica, State of California, on February 13,
2002.
CADIZ INC.
Registrant
By: /s/ Keith Brackpool
----------------------------
Keith Brackpool
Chief Executive Officer
KNOW ALL YE BY THESE PRESENTS, that each individual whose
signature appears below constitutes and appoints Jennifer Hankes
Painter and Stanley E. Speer, and each of them, his true and
lawful attorneys-in-fact and agents with full power of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement and any
subsequent registration statements filed by the Registrant
pursuant to Rule 462(b) of the Securities Act of 1933, which
relates to this Registration Statement, and to file same, with
all exhibits thereto, and all documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
---------------------- ----------------- -----------------
/s/ Keith Brackpool Chief Executive February 13, 2002
____________________ Officer,
Keith Brackpool Chairman of the
Board
(Principal
Executive Officer)
/s/ Stanley E. Speer Chief Financial February 13, 2002
____________________ Officer
Stanley E. Speer (Principal
Financial and
Accounting
Officer)
* Director February 13, 2002
____________________
Dwight W. Makins
* Director February 13, 2002
_____________________
Murray H. Hutchinson
* Director February 13, 2002
_____________________
Mitt Parker
* Director February 13, 2002
____________________
Timothy J. Shaheen
* Director February 13, 2002
_____________________
Anthony L. Coelho
* Executed by Stanley E. Speer as power of attorney.
PAGE II-6
EXHIBITS INDEX
Exhibit No.: Title of Document
------------ --------------------------------------------------
4.1 Specimen Form of Stock Certificate for Cadiz common
stock(1)
4.2 Cadiz Certificate of Designations of Series A
Junior Participating Preferred Stock dated May 11,
1999(2)
4.3 Cadiz Certificate of Designations of Series D
Preferred Stock dated December 28, 2000(3)
4.4 Cadiz Certificate of Correction Filed to Correct
the Certificate of Designations of Series D Preferred
Stock dated December 28, 2000(3)
4.5 Cadiz Certificate of Designations of Series E-1
Preferred Stock dated October 22, 2001(4)
4.6 Cadiz Certificate of Designations of Series E-2
Preferred Stock dated November 28, 2001(5)
4.7 Indenture dated as of April 16, 1997 among Sun
World as issuer, Sun World and certain subsidiaries
of Sun World as guarantors, and The Bank of New York,
successor in interest to IBJ Whitehall Bank & Trust
Company, as trustee, for the benefit of holders of
11-1/4% First Mortgage Notes due 2004 (including as
Exhibit A to the Indenture, the form of the Global
Note and the form of each Guarantee)(6)
4.8 Amendment to Indenture dated as of October 9, 1997(7)
4.9 Amendment to Indenture dated as of January 23, 1998(8)
4.10 Form of Initial Warrant to Purchase Common Stock
of Cadiz issued to each of OZ Master Fund, Ltd.
(45,000 shares) and OZF Credit Opportunities Master
Fund, Ltd. (5,000 shares), respectively(9)
4.11 Form of Subsequent Warrant to Purchase Common
Stock of Cadiz issued to each of OZ Master Fund, Ltd.
(45,000 shares) and OZF Credit Opportunities Master
Fund, Ltd. (5,000 shares), respectively(10)
4.12 Form of First Warrant to Purchase Common Stock
of Cadiz issued to each of OZ Master Fund, Ltd.
(135,000 shares) and OZF Credit Opportunities Master
Fund, Ltd. (15,000 shares), respectively(11)
4.13 Form of Second Warrant to Purchase Common Stock
of Cadiz issued to each of OZ Master Fund, Ltd.
(67,500 shares) and OZF Credit Opportunities Master
Fund, Ltd. (7,500 shares), respectively(12)
4.14 Form of Initial Warrant to Purchase Common Stock
of Cadiz issued to each of OZ Master Fund, Ltd.
(46,667 shares) and OZF Credit Opportunities Master
Fund, Ltd. (23,333 shares), respectively(5)
4.15 Form of Initial Mandatory Conversion Warrant to
Purchase Common Stock of Cadiz issued to each of OZ
Master Fund, Ltd. (25,000 shares) and OZF Credit
Opportunities Master Fund, Ltd. (12,500 shares),
respectively(5)
4.16 Form of Commitment Exercise Warrant to Purchase
Common Stock of Cadiz issued to each of OZ Master
Fund, Ltd. (46,667 shares) and OZF Credit
Opportunities Master Fund, Ltd. (23,333 shares),
respectively(5)
4.17 Form of Commitment Mandatory Conversion Warrant
to Purchase Common Stock of Cadiz issued to each of
OZ Master Fund, Ltd. (25,000 shares) and OZF Credit
Opportunities Master Fund, Ltd. (12,500 shares),
respectively(5)
5.1 Opinion of Miller & Holguin as to the
legality of the securities being registered
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Miller & Holguin (included in its
opinion filed as Exhibit 5.1)
24.1 Power of Attorney (included on signature page)
---------------------------------------
(1) Previously filed as an Exhibit to Cadiz' Quarterly
Report on Form 10-Q for the quarter ended September 30,
1998 filed November 13, 1998.
(2) Previously filed as an Exhibit to Cadiz' Current Report
on Form 8-K dated May 10, 1999 filed on May 18, 1999.
(3) Previously filed as an Exhibit to Cadiz' Current Report
on Form 8-K dated December 29, 2000 filed on January 3,
2001.
(4) Previously filed as an Exhibit to Cadiz' Quarterly Report
on Form 10-Q for the quarter ended September 30, 2001
filed on November 14, 2001.
(5) Previously filed as an Exhibit to Cadiz' Registration
Statement on Form S-3 (Registration Statement No. 333-
75006) filed on December 13, 2001.
(6) Previously filed as an Exhibit to Amendment No. 1 to
Cadiz' Registration Statement on Form S-1 (Registration
Statement No. 333-19109) filed on April 29, 1997.
(7) Previously filed as an Exhibit to Amendment No. 2 to Sun
World's Registration Statement on Form S-4 (Registration
Statement No. 333-31103) filed on October 10, 1997.
(8) Previously filed as an Exhibit to Cadiz' Annual Report on
Form 10-K for the fiscal year ended December 31, 1997
filed on March 26, 1998.
(9) Previously filed as Exhibits 4.8 and 4.10 to Cadiz'
Registration Statement on Form S-3 (Registration No. 333-
53768) filed on January 16, 2001.
(10) Previously filed as Exhibits 4.9 and 4.11 to Cadiz'
Registration Statement on Form S-3 (Registration No. 333-
53768) filed on January 16, 2001.
(11) Previously filed as Exhibits 4.12 and 4.13 to Cadiz'
Registration Statement on Form S-3 (Registration No. 333-
53768) filed on January 16, 2001.
(12) Previously filed as Exhibits 4.14 and 4.15 to Cadiz'
Registration Statement on Form S-3 (Registration No. 333-
53768) filed on January 16, 2001.