Filed Pursuant to Rule 424(b)(5)

Registration No. 333-214318

Registration No. 333-223938

 

PROSPECTUS SUPPLEMENT
(to the prospectus dated November 14, 2016)

 

 

 

Cadiz Inc.

 

$15,000,000

Common Stock

 

We have entered into an At Market Issuance Sales Agreement with B. Riley FBR, Inc., or the Agent, relating to shares of our common stock offered by this prospectus. In accordance with the terms of the sales agreement, we may offer and sell shares of our common stock having an aggregate offering price of up to $15.0 million from time to time through the Agent.

 

Our common stock is listed on the Nasdaq Global Market under the symbol “CDZI.” On March 26, 2018, the closing sale price of our common stock was $13.75 per share.

 

Sales of our common stock, if any, under this prospectus may be made in sales deemed to be “at the market equity offerings” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, or the Securities Act. The Agent will act as a sales agent on a best efforts basis using commercially reasonable efforts consistent with its normal trading and sales practices, on mutually agreed terms between the Agent and us. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.

 

The compensation to the Agent for sales of common stock sold pursuant to the sales agreement is up to 3.0% of the gross proceeds of the sales price per share. In connection with the sale of the common stock on our behalf, the Agent will be deemed to be an “underwriter” within the meaning of the Securities Act, as amended, and the compensation of the Agent will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to the Agent with respect to certain liabilities, including liabilities under the Securities Act.

 

An investment in our common stock involves a high degree of risk. See “Risk Factors” on page S-4 of this prospectus supplement for more information on these risks.

 

Neither the SEC nor any state securities commission has approved or disapproved of these securities, or passed upon the adequacy or accuracy of this prospectus supplement. Any representation to the contrary is a criminal offense.

 

   

B. Riley FBR, Inc.

 

The date of this prospectus supplement is March 27, 2018.

  

  

TABLE OF CONTENTS

 

PROSPECTUS SUPPLEMENT

 

ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS	S-1
SUMMARY	S-2
THE OFFERING	S-3
RISK FACTORS	S-4
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	S-5
USE OF PROCEEDS	S-5
MARKET PRICE OF OUR COMMON STOCK	S-6
DILUTION	S-7
PLAN OF DISTRIBUTION	S-8
LEGAL MATTERS	S-8
EXPERTS	S-8
WHERE YOU CAN FIND MORE INFORMATION	S-9

 

PROSPECTUS

 

About This Prospectus	ii
Special Note Regarding Forward-Looking Statements	ii
Available Information	iii
Information Incorporated by Reference	iii
The Company	1
Risk Factors	3
Use of Proceeds	3
Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends	3
Description of Debt Securities	4
Description of Capital Stock	10
Description of Offered Preferred Stock	12
Description of Warrants	13
Description of Subscription Rights	14
Description of Units	15
Plan of Distribution	15
Legal Matters	18
Experts	18

  

 

RISK FACTORS

 

Our business is subject to significant risks. Before you invest in our common stock, you should carefully consider, among other matters, the risks and uncertainties described below, as well as the other information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus, including our consolidated financial statements and accompanying notes and the information under the heading “Risk Factors” in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q. See “Information Incorporated by Reference.” If any of the risks and uncertainties described in this prospectus supplement or the accompanying prospectus or the documents incorporated by reference herein actually occur, our business, financial condition, or results of operations could be adversely affected in a material way. This could cause the trading price of our common stock to decline, perhaps significantly, and you may lose part or all of your investment. Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business, financial condition and operations.

 

Risks Related to the Offering

 

You will experience immediate dilution in the book value per share of the common stock you purchase in this offering.

 

Because the price per share of our common stock being offered is substantially higher than the book value per share of our common stock, you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on the assumed public offering price of $13.80 per share (the closing sale price of our common stock on the Nasdaq Global Market on March 23, 2018) and assuming that we sell all $15,000,000 of shares of common stock under this prospectus supplement, if you purchase shares of common stock in this offering, you will suffer immediate and substantial dilution of $16.59 per share in the net tangible book value of the common stock. See the section titled “Dilution” below for a more detailed discussion of the dilution you will incur if you purchase common stock in this offering.

 

Our management will have broad discretion over the use of the net proceeds from this offering.

 

We currently intend to use the net proceeds from the sale of our common stock under the Sales Agreement for the development of the Cadiz Water Project, which may include funding a portion of the $20 million payment required if we elect to exercise our option to acquire an additional 124-mile extension of our Northern Pipeline, business development activities, capital expenditures, working capital and corporate purposes. We have not reserved or allocated specific amounts for any of these purposes and we cannot specify with certainty how we will use the net proceeds. Accordingly, our management will have considerable discretion in the application of the net proceeds and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. The net proceeds may also be used for corporate purposes that do not increase our operating results or market value. Until the net proceeds are used, they may be placed in investments that do not produce income or that lose value.

 

The proceeds from this offering will not be sufficient to exercise the option to acquire the Northern Pipeline extension and we may not be able to obtain additional financing.

 

We may use the net proceeds from the sale of our common stock under the Sales Agreement to fund a portion of the $20 million payment required if we elect to exercise our option to acquire an additional 124-mile extension of our Northern Pipeline. The proceeds, if any, from this offering will not be sufficient to make the $20 million payment. We have engaged an investment banker to pursue alternatives that will provide the additional resources to fund the payment, although we cannot assure you that we will be able to obtain such financing. If we are unable to exercise this option, then our Northern Pipeline opportunities will be limited to the 96-mile segment we currently own.

 

It is not possible to predict the aggregate proceeds resulting from sales made under the sales agreement.

 

Subject to certain limitations in the sales agreement and compliance with applicable law, we have the discretion to deliver a placement notice to B. Riley FBR at any time throughout the term of the sales agreement. The number of shares that are sold through B. Riley FBR after delivering a placement notice will fluctuate based on a number of factors, including the market price of our common stock during the sales period, the limits we set with B. Riley FBR in any applicable placement notice, and the demand for our common stock during the sales period. Because the price per share of each share sold will fluctuate during the sales period, it is not currently possible to predict the aggregate proceeds to be raised in connection with those sales.

 

The common stock offered hereby will be sold in “at the market offerings,” and investors who buy shares at different times will likely pay different prices.

 

Investors who purchase shares in this offering at different times will likely pay different prices, and so may experience different levels of dilution and different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and number of shares sold in this offering. In addition, subject to the final determination by our board of directors, there is no minimum or maximum sales price for shares to be sold in this offering. Investors may experience a decline in the value of the shares they purchase in this offering as a result of sales made at prices lower than the prices they paid.

 

Future sales of our common stock could lower our stock price and dilute existing stockholders.

 

We may, in the future, sell additional shares of common stock in subsequent public or private offerings. We cannot predict the size of future issuances of our common stock or the effect, if any, that future sales and issuances of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued upon the exercise of stock options and warrants and conversion of convertible promissory notes), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock. In addition, these sales may be dilutive to existing stockholders.

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

All statements in this prospectus supplement and the documents incorporated by reference herein that are not historical facts should be considered “Forward Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Some of the forward-looking statements can be identified by the use words such as “believe,” “expect,” “may,” “will,” “should,” “seek,” “approximately,” “intend,” “plan,” “estimate,” “project,” “continue” or “anticipates” or similar expressions or words, or the negatives of those expressions or words. These forward-looking statements include, among others, our ability to maximize value from our Cadiz, California land and water resources and our ability to obtain new financings as needed to meet our ongoing working capital needs. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved.

 

Some of the important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” and elsewhere in this prospectus supplement and the accompanying prospectus. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Additional risks, uncertainties and other factors are incorporated herein by reference to our most recent Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q, as updated by our subsequent filings under the Exchange Act. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or any other reason, after the date of this prospectus supplement.

  

USE OF PROCEEDS

 

We may issue and sell shares of our common stock having aggregate sales proceeds of up to $15.0 million from time to time. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. There can be no assurance that we will sell any shares under or fully utilize the sales agreement with B. Riley FBR as a source of financing. We estimate that the net proceeds from the sale of the shares of common stock that we are offering may be up to approximately $14,450,000 after deducting the Sales Agent’s commission and estimated offering expenses payable by us.

 

We currently intend to use the net proceeds from the sale of our common stock under the Sales Agreement for the development of the Cadiz Water Project, which may include funding a portion of the $20 million payment required if we elect to exercise our option to acquire an additional 124-mile extension of our Northern Pipeline, business development activities, capital expenditures, working capital and general and corporate purposes.

 

Pending such uses, we may temporarily invest the net proceeds in short-term investments.

 

The amounts and timing of our actual expenditures will depend on numerous factors, including the factors described under “Risk Factors” in this prospectus supplement, the accompanying prospectus and in the documents incorporated by reference herein, as well as the amount of cash used in our operations. We may find it necessary or advisable to use the net proceeds for other purposes, and our management will have significant flexibility in applying the net proceeds of this offering.

 

 

MARKET PRICE OF OUR COMMON STOCK

 

Our common stock is listed on the Nasdaq Global Market under the symbol “CDZI”.

 

The following table sets forth the quarterly range of high and low sale prices of our common stock since January 1, 2016 as reported by the Nasdaq Global Market. As of March 26, 2018, we had 23,216,535 shares of common stock outstanding and approximately 72 stockholders of record.

 

		High				Low
Quarter Ended		Sales Price				Sales Price
2016:
March 31		$	5.43			$	5.03
June 30		$	5.93			$	5.64
September 30		$	7.63			$	7.04
December 31		$	12.65			$	12.05
2017:
March 31		$	15.30			$	14.35
June 30		$	13.79			$	13.25
September 30		$	12.80			$	12.50
December 31		$	14.35			$	14.00
2018
Through March 23, 2018			14.75				11.95

 

To date, we have not paid a cash dividend on our common stock and do not anticipate paying any dividends in the foreseeable future. Our senior secured term loan has covenants that prohibit the payment of dividends without the consent of the lenders.

 

 

DILUTION

 

If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the public offering price per share and our pro forma net tangible book value per share after this offering. We calculate net tangible book value per share by dividing our net tangible book value, which is tangible assets less total liabilities, by the number of outstanding shares of our common stock.

 

Our net tangible book value as of December 31, 2017 was approximately $(82.5) million, or $(3.59) per share. After giving effect to the sale by us of 1,086,956 shares of common stock offered hereby at the assumed public offering price of $13.80 per share (the closing sale price of our common stock on the Nasdaq Global Market on March 23, 2018 and after deducting the sales agent commission and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of December 31, 2017 would have been approximately $(67.8) million, or $(2.79) per share. This represents an immediate increase in as adjusted net tangible book value of $0.80 per share to existing stockholders and an immediate dilution of $16.59 per share to new investors purchasing our common stock in this offering. The following table illustrates the per share dilution to investors purchasing shares of common stock in this offering:

 

Assumed public offering price of common stock						$	13.80
Net tangible book value per share as of December 31, 2017		$	(3.59	)
Increase per share in net tangible book value after this offering		$	0.80
As adjusted net tangible book value per share as of December 31, 2017, after giving effect to this offering						$	(2.79	)
Dilution per share to new investors						$	16.59

 

The table above assumes for illustrative purposes that an aggregate of 1,086,956 shares of our common stock are sold during the term of the sales agreement at a price of $13.80 per share (the closing sale price of our common stock on the Nasdaq Global Market on March 23, 2018) for aggregate gross proceeds of approximately $15.0 million. The shares sold in this offering, if any, will be sold from time to time at various prices.

 

The information discussed above is illustrative only and will adjust based on the actual public offering price and other terms of this offering determined at pricing.

 

The above table is based on 22,987,434 shares of common stock issued and outstanding as of December 31, 2017 and does not include, as of March 26, 2018:

 

	●	507,500 shares of common stock issuable upon the exercise of outstanding stock options, issued pursuant to the 2009 Equity Incentive Plan, with a weighted-average exercise price of $11.66;
	●	63,774 shares of common stock available for future grants of stock or options under the 2014 Equity Incentive Plan;
	●	362,500 shares of common stock issuable upon exercise of outstanding warrants having an exercise price of $14.94 per share; or;
	●	10,462,629 shares of common stock issuable upon conversion of outstanding convertible promissory notes at a conversion price of $6.75.

 

To the extent that the outstanding options or warrants are exercised, or shares are issued upon conversion of the convertible promissory notes, you will experience further dilution. To the extent that the above issued options and warrants are exercised, and all 10,462,629 shares of common stock reserved for issuance upon conversion of the promissory notes are issued, the pro forma net tangible book value per share of our common stock after giving effect to this offering would be $(1.90) per share, and the dilution in net tangible book value per share to purchasers in this offering would be $15.70 per share. In addition, we may choose to raise additional capital due to market conditions or strategic considerations. To the extent that additional capital is raised through the sale of securities, the issuance of those securities could result in further dilution to our stockholders.

 

 

PLAN OF DISTRIBUTION

 

We have entered into the sales agreement with B. Riley FBR, Inc., the sales agent, under which we may issue and sell our common stock from time to time through the sales agent. Sales of shares of our common stock, if any, under this prospectus supplement and the accompanying prospectus may be made by any method that is deemed an “at the market offering” as defined in Rule 415 promulgated under the Securities Act. We may instruct the sales agent not to sell common stock if the sales cannot be effected at or above the price designated by us from time to time. We or the sales agent may suspend the offering of common stock upon notice and subject to other conditions.

 

The sales agent will offer our common stock subject to the terms and conditions of the sales agreement as agreed upon by us and the sales agent. Each time we wish to issue and sell common stock under the sales agreement, we will notify the sales agent of the number or dollar value of shares to be issued, the time period during which such sales are requested to be made, any limitation on the number of shares that may be sold in one day, any minimum price below which sales may not be made and other sales parameters as we deem appropriate. Once we have so instructed the sales agent, unless the sales agent declines to accept the terms of the notice, the sales agent has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such shares up to the amount specified on such terms. The obligations of the sales agent under the sales agreement to sell our common stock are subject to a number of conditions that we must meet.

 

We will pay the sales agent commissions for its services in acting as agent in the sale of common stock at a commission rate of up to 3.0% of the gross sales price per share sold. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time.  We have also agreed to reimburse the sales agent for certain specified expenses, including the fees and disbursements of its legal counsel in an amount not to exceed $35,000, plus $1,500 per quarter that the sales agreement is effective. We estimate that the total expenses for the offering, excluding commissions and reimbursements payable to the sales agent under the terms of the sales agreement, will be approximately $250,000.

 

Settlement for sales of common stock will generally occur on the second business day following the date on which any sales are made, or on some other date that is agreed upon by us and the sales agent in connection with a particular transaction, in return for payment of the net proceeds to us. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.

 

In connection with the sale of the common stock on our behalf, the sales agent will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of the sales agent will be deemed to be underwriting commissions or discounts. We have agreed to provide indemnification and contribution to the sales agent against certain civil liabilities, including liabilities under the Securities Act.

 

The offering of our common stock pursuant to the sales agreement will terminate upon the earlier of (i) the sale of all of our common stock subject to the sales agreement, or (ii) termination of the sales agreement as provided therein.

 

The sales agent and its affiliates may in the future provide various investment banking and other financial services for us and our affiliates, for which services they may in the future receive customary fees.

 

LEGAL MATTERS

 

The validity of the securities offered hereby will be passed upon for us by Greenberg Traurig LLP, Los Angeles, California. B. Riley FBR is being represented in connection with this offering by Morgan, Lewis & Bockius LLP, Palo Alto, California.

 

EXPERTS

 

The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this prospectus supplement by reference to our Annual Report on Form 10-K for the year ended December 31, 2017 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

 

 

WHERE YOU CAN FIND MORE INFORMATION

 

We have filed with the Commission a registration statement on Form S-3 under the Securities Act to register with the Commission the securities being offered in this prospectus supplement and the accompanying prospectus. This prospectus supplement and the accompanying prospectus, which constitute a part of the registration statement, do not contain all of the information set forth in the registration statement or the exhibits and schedules filed with the registration statement. For further information about us, and the securities being offered, reference is made to the registration statement and the exhibits and schedules filed with the registration statement. Any statements contained or incorporated by reference in this prospectus supplement regarding the contents of any contract or any other document that is filed as an exhibit to the registration statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the registration statement. We file annual, quarterly and current reports, proxy and registration statements and other information with the Commission. You may read and copy any reports, statements, or other information that we file, including the registration statement of which this prospectus supplement and the accompanying prospectus form a part, and the exhibits and schedules filed with the registration statement, without charge at the public reference room maintained by the Commission, located at 100 F Street, NE, Room 1024, Washington, D.C. 20549, and copies of all or any part of the registration statement may be obtained from the Commission on the payment of the fees prescribed by the Commission. Please call the Commission at 1-800-SEC-0330 for further information about the public reference room. Our filings with the Commission, including the registration statement, are available to you on the Commission’s website at http://www.sec.gov. In addition, documents that we file with the Commission are available on our website at www.cadizinc.com. Unless specifically incorporated by reference into this prospectus supplement or the accompanying prospectus, information contained on our website is not, and should not be interpreted to be, part of this prospectus supplement or the accompanying prospectus.

 

We are “incorporating by reference” into this prospectus supplement and the accompanying prospectus specified documents we file with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, which are filed after the effective date of the registration statement and prior to the termination of the offering of securities offered pursuant to this prospectus supplement and the accompanying prospectus. We are not, however, incorporating, in each case, any documents or information that we “furnish” to, and not file with, the Commission in accordance with its rules and regulations. The information we incorporate by reference into this prospectus supplement is an important part of the prospectus of which this prospectus supplement is a part.

 

We incorporate by reference into this prospectus supplement the information contained in the following documents, which is considered to be a part of this prospectus supplement:

 

●

our Annual Report on Form 10-K for the year ended December 31, 2017, filed on March 14, 2018;

  

●

our definitive Proxy Statement on Schedule 14A filed on April 21, 2017, but only to the extent that such information was incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2016;

 

●

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, 1984, as amended by reports on:

 

o

Form 8-K filed with the SEC on May 26, 1988;

 

o

Form 8-K filed with the SEC on June 2, 1992;

 

o

Form 8-K filed with the SEC on May 18, 1999; and

 

o

Annual Report on Form 10-K for the year ended December 31, 2003, filed on November 2, 2004

 

Any statement contained in a document incorporated or deemed to be incorporated by reference into this prospectus supplement will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus supplement or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus supplement modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement.

 

 

Our filings with the Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and definitive proxy statement, and any amendments to those filings, are available free of charge on our website (www.cadizinc.com) as soon as reasonably practicable after they are filed with, or furnished to, the Commission. Our website and the information contained on that site, or connected to that site, are not incorporated into and are not a part of this prospectus supplement. You may also obtain a copy of these filings at no cost by writing or telephoning us at the following address:

 

Cadiz Inc.

550 S. Hope Street

Suite 2850

Los Angeles, California 90071

Attention: Investor Relations

Telephone: (213) 271-1600

 

We will provide without charge upon written or oral request to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any and all of the documents which are incorporated by reference in this prospectus but not delivered with this prospectus (other than exhibits unless such exhibits are specifically incorporated by reference in such documents). You may request a copy of these documents by writing or telephoning us at the above address.

 

No person has been authorized to give any information or to make any representation not contained in this prospectus supplement, and, if given or made, such information and representation should not be relied upon as having been authorized by us. Neither this prospectus supplement nor the accompanying prospectus constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any jurisdiction or to any person to whom it is unlawful to make such offer or solicitation. Neither the delivery of this prospectus supplement or the accompanying prospectus nor any sale made hereunder will under any circumstances create an implication that there has been no change in the facts set forth in this prospectus supplement or the accompanying prospectus or in our business, financial condition or affairs since the date hereof.

 

 

PROSPECTUS

 

$40,000,000

Cadiz Inc.

 

 

 

DEBT SECURITIES

COMMON STOCK

PREFERRED STOCK

Warrants

SUBSCRIPTION RIGHTS

Units

 

By this prospectus and an accompanying prospectus supplement, we may from time to time offer and sell, in one or more offerings, up to $40,000,000 in any combination of debt securities, common stock, preferred stock, warrants, subscription rights and units.

 

We will provide you with more specific terms of these securities in one or more supplements to this prospectus. You should read this prospectus and the applicable prospectus supplement carefully before you invest.

 

We may offer these securities from time to time in amounts, at prices and on other terms to be determined at the time of the offering. We may offer and sell these securities to or through underwriters, dealers or agents, or directly to investors, on a continuous or delayed basis. The supplements to this prospectus will provide the specific terms of the plan of distribution. The price to the public of such securities and the net proceeds we expect to receive from such sale will also be set forth in the applicable prospectus supplement.

 

Our common stock is listed on the Nasdaq Global Market under the symbol “CDZI”. On October 28, 2016, the closing price of our common stock as reported by the Nasdaq Global Market was $7.40 per share.

 

Investing in these securities involves certain risks. See “Risk Factors” beginning on page 3.

 

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.

 

Prospectus dated November 14, 2016

 

 

TABLE OF CONTENTS

 

About This Prospectus	ii
Special Note Regarding Forward-Looking Statements	ii
Available Information	iii
Information Incorporated by Reference	iii
The Company	1
About Cadiz	1
Corporate Information	2
Risk Factors	3
Use of Proceeds	3
Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends	3
Description of Debt Securities	4
General	4
Subordination	6
Conversion and Exchange	6
Global Securities	7
Restrictive Covenants	7
Defeasance	7
Satisfaction and Discharge	8
Modification of the Indentures	8
Events of Default, Notice and Waiver	9
Consolidation, Merger or Sale of Assets	10
Governing Law	10
Description of Capital Stock	10
General	10
Common Stock	10
Certain Other Provisions of the Certificate	11
Limitations on Directors’ Liability	11
Indemnification of Directors and Officers	11
Exchange Listing	11
Anti-Takeover Effects of Delaware Law	11
Description of Offered Preferred Stock	12
Description of Warrants	13
Exercise of Warrants	14
Description of Subscription Rights	14
Description of Units	15
Plan of Distribution	15
General	16
Underwriters and Agents	16
Dealers	17
Direct Sales	17
Institutional Purchasers	17
Indemnification; Other Relationships	17
Market-Making, Stabilization and Other Transactions	17
Legal Matters	18
Experts	18

 

 

 

 

RISK FACTORS

 

An investment in our securities involves a high degree of risk.  Certain risks relating to us and our business are described under the headings “Business” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Commission on March 14, 2016, which is incorporated by reference into this prospectus and which you should carefully review and consider, along with the other information contained in this prospectus or incorporated by reference herein, as updated by our subsequent filings under the Exchange Act, before making an investment in any of our securities.  Additional risks, as well as updates or changes to the risks described in the documents incorporated by reference herein, may be included in any applicable prospectus supplement.  Our business, financial condition or results of operations could be materially adversely affected by any of these risks.  The market or trading price of our securities could decline due to any of these risks, and you may lose all or part of your investment.  In addition, please read the section of this prospectus captioned “Special Note Regarding Forward-Looking Statements”, in which we describe additional uncertainties associated with our business and the forward-looking statements included or incorporated by reference in this prospectus.  Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business and operations.

 

Investment in any securities offered pursuant to this prospectus involves risks and uncertainties.  If one or more of the events discussed in the risk factors were to occur, our business, financial condition, results of operations or liquidity, as well as the value of an investment in our securities, could be materially adversely affected.

 

You should carefully consider the risk factors as well as the other information contained and incorporated by reference in this prospectus before deciding to invest.

 

USE OF PROCEEDS

 

Unless otherwise provided in the applicable prospectus supplement, the net proceeds from the sale of the securities offered by this prospectus and each prospectus supplement, the “offered securities”, will be used for general corporate purposes, which may include working capital needs, the refinancing or repayment of existing indebtedness, capital expenditures, expansion of the business and acquisitions.  If any of the net proceeds from the offered securities will be used for acquisitions, we will identify the acquisition in the applicable prospectus supplement.  The net proceeds may be invested temporarily in short-term securities or to repay short-term debt until they are used for their stated purpose.

 

RATIOS OF EARNINGS TO FIXED CHARGES AND COMBINED
FIXED CHARGES AND PREFERRED DIVIDENDS

 

The ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividend requirements are set forth below for the periods indicated.

 

Year Ended December 31,

Six months ended June 30, 2016

2015

2014

2013

2012

2011

Ratio of Earnings to Fixed Charges

(a)

(a)

(a)

(a)

(a)

(a)

(a)

Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividend Requirements

(a)

(a)

(a)

(a)

(a)

(a)

(a)

  

(a)

Both (1) fixed charges and (2) combined fixed charges and preferred stock dividend requirements exceeded our earnings (loss) for the six months ended June 30, 2016 by $14.4 million and for the years ended December 31, 2015, 2014, 2013, 2012 and 2011 by $24.0 million, $18.9 million, $22.7 million, $19.9 million, and $16.8 million, respectively.

 

For the purpose of calculating both the ratios of earnings to fixed charges and earnings to combined fixed charges and preferred stock dividend requirements, earnings represent net income from continuing operations before the cumulative effect of change in accounting principles, less undistributed equity earnings, plus applicable income taxes plus fixed charges.  Fixed charges, excluding interest on deposits, include interest expense (other than on deposits) and the proportion deemed representative of the interest factor of rent expense, net of income from subleases.  Fixed charges, including interest on deposits, include all interest expense and the proportion deemed representative of the interest factor of rent expense, net of income from subleases.

 

 

DESCRIPTION OF DEBT SECURITIES

 

This prospectus describes certain general terms and provisions of the debt securities.  The debt securities may constitute either senior or subordinated debt securities, and in either case will be unsecured, and may also include convertible debt securities.  We will issue any debt securities that will be senior debt under an Indenture between us and U.S. Bank National Association, as trustee (the “Senior Indenture”).  We will issue any debt securities that will be subordinated debt under an Indenture between us and U.S. Bank National Association, as trustee (the “Subordinated Indenture”).  We may also issue debt securities under the Indentures between Cadiz Inc., as Issuer, and U.S. Bank National Association, as Trustee, dated as of March 5, 2013 and December 10, 2015 (the “Existing Indentures”).  This prospectus refers to the Senior Indenture and the Subordinated Indenture individually as the “Indenture” and collectively as the “Indentures.” The form of Senior Indenture and the form of Subordinated Indenture are included as exhibits to the registration statement of which this prospectus forms a part while the Existing Indentures are incorporated by reference as exhibits to the registration statement.  The term “trustee” refers to the trustee under each Indenture, as appropriate.

 

The Indentures are subject to and governed by the Trust Indenture Act of 1939, as amended.  The Indentures are substantially identical, except for the provisions relating to subordination, which are included only in the Subordinated Indenture.  The following summary of the material provisions of the Indentures and the debt securities is not complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Indentures, each of which has been filed as an exhibit to the registration statement of which this prospectus is a part.  We urge you to read the Indenture that is applicable to you because it, and not the summary below, defines your rights as a holder of debt securities.  You can obtain copies of the Indentures by following the directions described under the heading “Available Information.”

 

General

 

The senior debt securities will rank equally with all of our other unsecured and unsubordinated debt.  The subordinated debt securities will be subordinated in right of payment to our “Senior Indebtedness”, as defined below in the section titled “Subordination”.  As of June 30, 2016, all of our $118,891,459 aggregate principal amount of existing debt would have ranked senior to the subordinated debt securities and $76,223,279 aggregate principal amount of our debt would have ranked equally with the senior debt securities.  The Indentures do not limit the amount of debt, either secured or unsecured, which may be issued by us under the Indentures or otherwise.  We may limit the maximum total principal amount for the debt securities of any series.  However, any limit under the Indentures may be increased by resolution of our Board of Directors.  We will establish the terms of each series of debt securities under the Indentures in a supplemental Indenture, board resolution or company order.  The debt securities under the Indentures may be issued in one or more series with the same or various maturities and may be sold at par, a premium or an original issue discount.  Debt securities sold at an original issue discount may bear no interest or interest at a rate which is below market rates.

 

The Indentures do not prohibit us or our subsidiaries from incurring debt or agreeing to limitations on our subsidiaries’ ability to pay dividends or make other distributions to us, although the terms of specific debt securities may include such limitations.  The agreements governing our indebtedness, including the Existing Indentures, contain limitations on our ability to incur debt or liens, conduct asset sales and pay dividends.

 

Unless we inform you otherwise in a prospectus supplement, we may issue additional debt securities of a particular series under the Indentures without the consent of the holders of the debt securities of such series outstanding at the time of issuance.  Any such additional debt securities, together with all other outstanding debt securities of that series, will constitute a single series of securities under the applicable Indenture.

 

Unless we inform you otherwise in a prospectus supplement, each series of our senior debt securities will rank equally in right of payment with all of our other unsubordinated debt.  The subordinated debt securities will rank junior in right of payment and be subordinate to all of our unsubordinated debt.

 

We may issue debt securities from time to time in one or more series under the Indentures or under the Existing Indentures.  We will describe the particular terms of each series of debt securities we offer in a supplement to this prospectus or other offering material.  The prospectus supplement and other offering material relating to a series of debt securities will describe the terms of such debt securities being offered, including (to the extent such terms are applicable to such debt securities):

 

	●	the title of the debt securities;
	●	designation, aggregate principal amount, denomination and currency or currency unit;
	●	date of maturity;
	●	the price or prices at which we sell the debt securities and the percentage of the principal amount at which the debt securities will be issued;

 

 

	●	whether the debt securities are senior debt securities or subordinated debt securities and applicable subordination provisions, if any;
	●	any limit on the total principal amount of the debt securities and the ability to issue additional debt securities of the same series;

 

	●	currency or currency units for which such debt securities may be purchased and in which principal of, premium, if any, and any interest will or may be payable;
	●	interest rate or rates (or the manner of calculation thereof), if any;

 

	●	the times at which any such interest will be payable;
	●	the date or dates from which interest will accrue on the debt securities, or the method used for determining those dates;

 

	●	the place or places where the principal and interest, if any, will be payable;
	●	any redemption, sinking fund, satisfaction and discharge, or defeasance provisions;

 

	●	whether such debt securities will be issuable in registered form or bearer form or both and, if issuable in bearer form, restrictions applicable to the exchange of one form for another and to the offer, sale and delivery of certificates in bearer form;
	●	whether and under what circumstances we may from time to time, without the consent of holders of debt securities, issue additional debt securities, having the same ranking and the same interest rate, maturity and other terms as the debt securities being offered, except for the issue price and issue date and, in some cases, the first interest payment date, whereby such additional securities will, together with the then outstanding debt securities, constitute a single class of debt securities under the Indentures, and will vote together on matters under the Senior Indenture;

 

	●	if material, federal income tax consequences;
	●	whether and under what circumstances we will issue the debt securities in whole or in part as Global Securities as described below under “Global Securities”;

 

	●	applicable conversion or exchange privileges;
	●	any defaults and events of defaults applicable to the debt securities to be issued;

 

	●	securities exchange(s) on which the securities will be listed, if any;
	●	whether any underwriter(s) will act as market maker(s) for the securities;

 

	●	extent to which a secondary market for the securities is expected to develop;
	●	provisions relating to covenant defeasance and legal defeasance;

 

	●	provisions relating to satisfaction and discharge of the Indenture;
	●	any covenants or restrictions on us or our subsidiaries; and

 

●

any other specific terms of the offered debt securities, including any terms in lieu of those described in this prospectus and any terms which may be required by or advisable under United States laws or regulations such as those made a part of the applicable Indenture by the Trust Indenture Act of 1939.

 

 

Material United States federal income tax consequences and special considerations, if any, applicable to any such securities will be described in the applicable prospectus supplement.

 

Debt securities may be presented for exchange, and registered debt securities may be presented for transfer, in the manner, at the places and subject to the restrictions set forth in the debt securities and as summarized in the applicable prospectus supplement.  Such services will be provided without charge, other than any tax or other governmental charge payable in connection with such exchange or transfer, but subject to the limitations provided in the applicable Indenture.  Debt securities in bearer form and the coupons, if any, appertaining to such debt securities will be transferable by delivery.

 

Subordination

 

The indebtedness represented by the subordinated debt securities will be subordinated in right of payment to existing and future “Senior Indebtedness,” as described in the Subordinated Indenture and any accompanying prospectus supplement.  The term “Senior Indebtedness” means:

 

	●	all indebtedness for money borrowed incurred by us, unless the terms of the instrument or instruments by which such indebtedness is incurred or created expressly provide that such indebtedness is subordinate to the subordinated debt securities or that such indebtedness is not superior in right of payment to the subordinated debt securities,
	●	any other indebtedness, obligation or liability incurred by us (including any guaranty, endorsement or other contingent obligation of ours in respect of, or to purchase, or otherwise acquire, any obligation of another), direct or indirect, absolute or contingent, or matured or unmatured, which is specifically designated by us as Senior Indebtedness in the instruments evidencing such indebtedness, obligation or liability at the time of its issuance or incurrence, or

 

●

any deferral, renewal or extension of any of the foregoing.

 

“Senior Indebtedness” does not include:

 

	●	our debt to any of our subsidiaries;
	●	any series of subordinated debt securities issued under the Subordinated Indenture, unless otherwise specified by the terms of any such series;

 

	●	any of our other debt which by the terms of the instrument creating or evidencing it is specifically designated as being subordinated to or pari passu with the subordinated debt securities; and
	●	any trade payables.

 

The Subordinated Indenture does not limit our ability to incur additional indebtedness, including indebtedness that ranks senior in priority of payment to the subordinated debt securities.  A prospectus supplement relating to each series of subordinated debt securities will describe any subordination provisions applicable to such series in addition to or different from those described above.

 

By reason of such subordination, in the event of dissolution, insolvency, bankruptcy or other similar proceedings, upon any distribution of assets, (i) the holders of subordinated debt securities will be required to pay over their share of such distribution in respect of the subordinated debt securities to the holders of Senior Indebtedness until such Senior Indebtedness is paid in full and (ii) creditors of ours who are not holders of Senior Indebtedness may recover less, ratably, than holders of Senior Indebtedness and may recover more, ratably, than holders of subordinated debt securities.

 

Conversion and Exchange

 

The terms, if any, on which debt securities of any series will be convertible into or exchangeable for our common stock, our preferred stock, another series of our debt securities, other securities, property or cash, or a combination of any of the foregoing, will be summarized in the prospectus supplement relating to such series of debt securities.  Such terms may include provisions for conversion or exchange, either on a mandatory basis, at the option of the holder, or at our option, in which the number of shares or amount of our common stock, our preferred stock, another series of our debt securities, other securities, property or cash to be received by the holders of the debt securities would be calculated according to the factors and at such time as summarized in the related prospectus supplement.

 

  

Global Securities

 

The debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified in the prospectus supplement.  Global securities will be issued in registered form and in either temporary or definitive form.  Unless and until it is exchanged in whole or in part for the individual debt securities, a global security may not be transferred except as a whole by the depositary for such global security to a nominee of such depositary or by a nominee of such depositary to such depositary or another nominee of such depositary or by such depositary or any such nominee to a successor of such depositary or a nominee of such successor.  The specific terms of the depositary arrangement with respect to any debt securities of a series and the rights of and limitations upon owners of beneficial interests in a global security will be described in the applicable prospectus supplement.

 

Restrictive Covenants

 

We will describe any restrictive covenants, including restrictions on any subsidiary, for any series of debt securities in a prospectus supplement.

 

Defeasance

 

At our option, either (a) we will be Discharged (as defined below) from any and all obligations in respect of any series of debt securities under the Indenture or (b) we will cease to be under any obligation to comply with the restriction on our ability to merge, consolidate or sell assets set forth in the applicable Indenture, the requirement that we maintain our existence or certain other restrictions, in either case if we deposit irrevocably with the trustee, in trust, specifically for the benefit of the holders of such series, money or U.S. Government Obligations (as defined below) which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient (in the written opinion of a nationally recognized firm of independent public accountants in the case of U.S. Government Obligations or a combination of money and U.S. Government Obligations) to pay all the principal of (including any sinking fund payments or analogous obligations), and interest on, the debt securities of such series on the dates such payments are due in accordance with the terms of such series of debt securities.  To exercise such option, we are required to deliver to the trustee an opinion of tax counsel to the effect that holders of the debt securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and discharge and will be subject to federal income tax in the same amount and in the same manner and at the same times as would have been the case if such deposit and discharge had not occurred.

 

The term “Discharged” is defined to mean that we are deemed to have paid and discharged the entire indebtedness represented by, and obligations under, the debt securities of such series and to have satisfied all the obligations under the Indenture relating to the debt securities of such series, except for

 

	●	the rights of holders of the debt securities of such series to receive, from the trust fund described above, payment of the principal of and the interest on the debt securities of such series when such payments are due;
	●	our obligations with respect to the debt securities of such series with respect to temporary debt securities, registration, transfer, exchange, replacement of mutilated, destroyed, lost and stolen certificates, maintenance of a paying office and holding money in trust; and

 

●

the rights, powers, trusts, duties and immunities of the trustee under the applicable Indenture.

 

  

The term “U.S. Government Obligations” is defined to mean securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of the issuer thereof, and also includes a depositary receipt issued by a bank or trust company, as custodian with respect to any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligations evidenced by such depository receipt.

 

Satisfaction and Discharge

 

In addition, an Indenture will cease to be of further effect with respect to the debt securities of a series issued under that Indenture, subject to certain exceptions generally relating to compensation and indemnity of the trustee, when either:

 

	●	all outstanding debt securities of that series have been delivered to the trustee for cancellation and we have paid all sums payable by us under the Indenture with respect to such series, or
	●	all outstanding debt securities of that series not delivered to the trustee for cancellation either:  (i) have become due and payable, (ii) will become due and payable at their stated maturity within one year, or (iii) are to be called for redemption within one year; and we have deposited irrevocably with the trustee, in trust, specifically for the benefit of the holders of such series, money or U.S. Government Obligations which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount sufficient (in the written opinion of a nationally recognized firm of independent public accountants in the case of U.S. Government Obligations or a combination of money and U.S. Government Obligations) to pay all the principal of (including any sinking fund payments or analogous obligations), and interest on, the debt securities of such series on the dates such payments are due in accordance with the terms of such series of debt securities.

 

Modification of the Indentures

 

Modifications and amendments of each Indenture may be made by us and the trustee without the consent of the holders of the debt securities or with the consent of the holders of not less than a majority in principal amount of all outstanding debt securities affected by such modification or amendment; provided however, that no such modification or amendment may, without the consent of the holder of each outstanding debt security affected thereby:

 

	●	change the stated maturity of the principal of, or any installment of principal of or interest on, any debt security;
	●	reduce the principal amount of or interest on, or any premium payable upon redemption of, any debt security;

 

	●	change certain other terms related to waiver of past defaults or covenants (such as covenants and provisions of the Indenture that may not be amended without the consent of the holder of each outstanding debt security of the series affected); or
	●	reduce the percentage of the principal amount of the outstanding debt security of any series, the consent of whose holders is required to modify or amend the applicable Indenture or waive compliance with, or consent to certain defaults under, the provisions of such Indenture.

 

Our Board of Directors does not have the power to waive any of the covenants of each Indenture, including those relating to consolidation, merger or sale of assets.

 

  

Events of Default, Notice and Waiver

 

The following will be “Events of Default” with respect to any particular series of the debt securities under the Indentures:

 

	●	default in any payment of interest on such series when due, continued for 30 days;
	●	default in any payment of principal and premium, if any, of, or sinking fund installment on, such series when due;

 

	●	default in the performance, or breach, of any covenant or warranty of ours applicable to such series continued for 60 days after written notice to us by the trustee or the holders of at least 25% in principal amount of such series;
	●	certain events of bankruptcy, insolvency or reorganization; and

 

●

any other event of default we may provide for that series.

 

No Event of Default with respect to a particular series of debt securities necessarily constitutes an Event of Default with respect to any other series of debt securities.

 

The trustee will, within 90 days after the occurrence of any default with respect to any series of the debt securities, give to the holders thereof notice of such default known to the trustee, unless such default has been cured or waived (the term default for this purpose means any event which is, or after notice or lapse of time, or both, would become, an Event of Default); provided that, except in the case of a default in the payment of principal of (or premium, if any) or interest on any of such series of debt securities or in the payment of any sinking fund installments, the trustee will be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice is in the interest of the holders of the debt securities of that series.

 

We will be required to furnish to the trustee each year a statement as to the fulfillment by us of our obligations under the applicable Indenture.

 

The holders of a majority in principal amount of the outstanding debt securities of any series may, in respect of such series, waive certain defaults and may direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee, provided that such direction shall not be in conflict with any rule of law or with the applicable Indenture.  The trustee has the right to decline to follow any such direction if the trustee in good faith determines that the proceeding so directed would be unjustly prejudicial to the holders of debt securities of such series not joining in any such direction or would involve the trustee in personal liability.  Each Indenture provides that in case an Event of Default occurs and is continuing with respect to any series of the debt securities, the trustee will be required to exercise any of its rights and powers under such Indenture with the degree of care and skill such as a prudent man would exercise in the conduct of his own affairs.  Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the applicable Indenture at the direction of any of the holders of such debt securities unless such holders have offered to the trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by the trustee in complying with such direction.

 

If an Event of Default occurs and is continuing with respect to the debt securities of any series, the trustee or the holders of at least 25% in principal amount of such series may declare such series due and payable.

 

Each Indenture provides that no holder of debt securities of any series may institute any action against us under such Indenture (except actions for payment of overdue principal or interest or premium, if any) unless the holders of at least 25% in principal amount of such series have requested the trustee to institute such action and have offered the trustee reasonable indemnity, and the trustee has not instituted such action within 60 days of such request.

 

  

Consolidating, Merger or Sale of Assets

 

We may not consolidate with or merge into any other corporation or sell our assets substantially as an entirety, unless:

 

	●	the corporation formed by such consolidation or into which we are merged or the corporation which acquires our assets is organized in the United States and expressly assumes the due and punctual payment of the principal of (and premium, if any) and interest on all the debt securities, if any, issued under the applicable Indenture and the performance of every covenant of such Indenture to be performed by us; and
	●	immediately after giving effect to such transaction, no Event of Default, and no event which after notice or lapse of time or both would become an Event of Default, has happened and is continuing.

 

Upon any such consolidation, merger or sale, the successor corporation formed by such consolidation, or into which we are merged or to which such sale is made, will succeed to, and be substituted for, us under such Indenture.

 

Other than the covenants described above, or as set forth in any accompanying prospectus supplement, the Indentures and the debt securities do not contain any covenants or other provisions designed to afford holders of the debt securities protection in the event of a takeover, recapitalization or a highly leveraged transaction involving us.

 

Governing Law

 

New York Law will govern the Indentures and the debt securities, without regard to its conflicts of law principles.

 

DESCRIPTION OF CAPITAL STOCK

 

The following statements relating to our capital stock do not purport to be complete, and are subject to, and are qualified in their entirety by reference to, the provisions of the Certificate of Incorporation, as amended (the “Certificate”) and By-Laws, as amended (the “By-Laws”) which are incorporated by reference as exhibits to the registration statement of which this prospectus is a part.

 

General

 

The Certificate authorizes a total of 70,100,000 shares of capital stock, of which 70,000,000 may be shares of common stock and 100,000 may be shares of preferred stock.

 

As of June 30, 2016, 18,677,053 shares of common stock were issued and outstanding and options and warrants to purchase 507,500 shares of common stock issued to directors, employees, consultants and lenders remain outstanding.  As of June 30, 2016, the number of stockholders of record of our common stock was 93.

 

Common Stock

 

Subject to the rights of the holders of any shares of preferred stock that may at the time be outstanding, record holders of common stock are entitled to such dividends as the Board of Directors may declare.  Holders of common stock are entitled to one vote for each share held in their name on all matters submitted to a vote of shareowners and do not have preemptive rights or cumulative voting rights.  Holders of common stock are not subject to further calls or assessments as a result of their holding shares of common stock.

 

If Cadiz is liquidated, the holders of shares of common stock are entitled to share ratably in the distribution remaining after payment of debts and expenses and of the amounts to be paid on liquidation to the holders of shares of preferred stock.

 

The transfer agent for our common stock is Continental Stock Transfer & Trust Company, New York, New York.

 

  

Certain Other Provisions of the Certificate

 

Delaware law permits a corporation to eliminate the personal liability of its directors to the corporation or to any of its shareowners for monetary damages for a breach of fiduciary duty as a director, except (i) for breach of the director’s duty of loyalty, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for certain unlawful dividends and stock repurchases or (iv) for any transaction from which the director derived an improper personal benefit.  The Certificate provides for such limitation of liability.

 

The Certificate does not permit stockholder action by written consent in lieu of a meeting of stockholders.  In addition, special meetings of stockholders may be called only by the Board of Directors, the Chief Executive Officer or the President.

 

Limitations on Directors’ Liability

 

Our Certificate of Incorporation eliminates the personal liability of a director to us and our shareowners for monetary damages for certain breaches of his or her fiduciary duty as a director to the fullest extent permitted under the General Corporation Law of the State of Delaware.

 

This provision offers persons who serve on our Board of Directors protection against awards of monetary damages resulting from certain breaches of their fiduciary duty, including grossly negligent business decisions made in connection with takeover proposals for us, and limits our ability or the ability of one of our shareowners to prosecute an action against a director for a breach of fiduciary duty.

 

Indemnification of Directors and Officers

 

Our By-Laws and Certificate provide that we will indemnify any of our directors, officers or employees to the fullest extent permitted by the General Corporation Law of the State of Delaware against all expenses, liability and loss incurred in connection with any action, suit or proceeding in which any such person may be involved by reason of the fact that he or she is or was our director, officer or employee.  We carry insurance policies in standard form indemnifying our directors and officers against liabilities arising from certain acts performed by them in their capacities as our directors and officers.  These policies also indemnify us for any sums we may be required or permitted to pay by law to our directors and officers as indemnification for expenses they may have incurred.

 

Exchange Listing

 

Our common stock is listed on the Nasdaq Global Market under the symbol “CDZI”.

 

Anti-Takeover Effects of Delaware Law

 

Cadiz is subject to the “business combination” provisions of Section 203 of Delaware law.  In general, such provisions prohibit a publicly held Delaware corporation from engaging in various “business combination” transactions with any interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, unless

 

	●	prior to the date the interested stockholder obtained such status, the Board of Directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
	●	upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced; or

 

●

on or subsequent to such date, the business combination is approved by the Board of Directors of the corporation and authorized at an annual or special meeting of shareowners by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

 

  

A “business combination” is defined to include mergers, asset sales and other transactions resulting in financial benefit to an interested stockholder.  In general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) 15% or more of a corporation’s voting stock.  The statute could prohibit or delay mergers or other takeover or change in control attempts with respect to Cadiz and, accordingly, may discourage attempts to acquire Cadiz even though such a transaction may offer Cadiz’s shareowners the opportunity to sell their stock at a price above the prevailing market price.

 

DESCRIPTION OF OFFERED PREFERRED STOCK

 

This prospectus describes certain general terms and provisions of our preferred stock.  When we offer to sell a particular series of preferred stock, we will describe the specific terms of the securities in a supplement to this prospectus.  The prospectus supplement will also indicate whether the general terms and provisions described in this prospectus apply to the particular series of preferred stock.  The preferred stock will be issued under a certificate of designations relating to each series of preferred stock and is also subject to our Certificate of Incorporation. The certificate of designations will be filed with the SEC in connection with an offering of preferred stock.

 

Under the Certificate of Incorporation, our Board of Directors has the authority to

 

	●	create one or more series of preferred stock,
	●	issue shares of preferred stock in any series up to the maximum number of shares of preferred stock authorized, and

 

●

determine the preferences, rights, privileges and restrictions of any series.

 

Our Board may issue authorized shares of preferred stock, as well as authorized but unissued shares of common stock, without further shareholder action, unless shareholder action is required by applicable law or by the rules of a stock exchange or quotation system on which any series of our stock may be listed or quoted.

 

The prospectus supplement will describe the terms of any preferred stock being offered, including:

 

	●	the number of shares and designation or title of the shares;
	●	any liquidation preference per share;

 

	●	any date of maturity;
	●	any redemption, repayment or sinking fund provisions;

 

	●	any dividend rate or rates and the dates of payment (or the method for determining the dividend rates or dates of payment);
	●	any voting rights;

 

	●	if other than the currency of the United States, the currency or currencies including composite currencies in which the preferred stock is denominated and/or in which payments will or may be payable;
	●	the method by which amounts in respect of the preferred stock may be calculated and any commodities, currencies or indices, or value, rate or price, relevant to such calculation;

 

	●	whether the preferred stock is convertible or exchangeable and, if so, the securities or rights into which the preferred stock is convertible or exchangeable, and the terms and conditions of conversion or exchange;
	●	the place or places where dividends and other payments on the preferred stock will be payable; and

 

●

any additional voting, dividend, liquidation, redemption and other rights, preferences, privileges, limitations and restrictions.

 

 

 

All shares of preferred stock offered will be fully paid and non-assessable.  Any shares of preferred stock that are issued will have priority over the common stock with respect to dividend or liquidation rights or both.

 

Our Board of Directors could create and issue a series of preferred stock with rights, privileges or restrictions which effectively discriminates against an existing or prospective holder of preferred stock as a result of the holder beneficially owning or commencing a tender offer for a substantial amount of common stock.  One of the effects of authorized but unissued and unreserved shares of capital stock may be to make it more difficult or discourage an attempt by a potential acquirer to obtain control of our company by means of a merger, tender offer, proxy contest or otherwise.  This protects the continuity of our management.  The issuance of these shares of capital stock may defer or prevent a change in control of our company without any further shareholder action.

 

The transfer agent for each series of preferred stock will be described in the prospectus supplement.

 

DESCRIPTION OF WARRANTS

 

We may issue warrants for the purchase of common stock, preferred stock or debt securities.  We may issue warrants independently or together with any offered securities.  The warrants may be attached to or separate from those offered securities.  We may issue the warrants under warrant agreements to be entered into between us and a bank or trust company to be named in the applicable prospectus supplement, as warrant agent, all as described in the applicable prospectus supplement.  The warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.  If we offer warrants, we will file the warrant agreement relating to the offered warrants as an exhibit to, or incorporate it by reference in, the registration statement of which this prospectus is a part.

 

The prospectus supplement relating to any warrants that we may offer will contain the specific terms of the warrants.  These terms may include the following:

 

	●	the title of the warrants;
	●	the price or prices at which the warrants will be issued;

 

	●	the designation, amount and terms of the securities for which the warrants are exercisable;
	●	the designation and terms of the other securities, if any, with which the warrants are to be issued and the number of warrants issued with each other security;

 

	●	the aggregate number of warrants;
	●	any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;

 

	●	the price or prices at which the securities purchasable upon exercise of the warrants may be purchased;
	●	if applicable, the date on and after which the warrants and the securities purchasable upon exercise of the warrants will be separately transferable;

 

	●	a discussion of any material U.S. federal income tax considerations applicable to the exercise of the warrants;
	●	the date on which the right to exercise the warrants will commence, and the date on which the right will expire;

 

●

the maximum or minimum number of warrants that may be exercised at any time;

 

	●	information with respect to book-entry procedures, if any; and
	●	any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.

 

  

Exercise of Warrants

 

Each warrant will entitle the holder of warrants to purchase for cash the amount of common stock, preferred stock or debt securities, at the exercise price stated or determinable in the prospectus supplement for the warrants.  Warrants may be exercised at any time up to the close of business on the expiration date shown in the applicable prospectus supplement, unless otherwise specified in such prospectus supplement.  After the close of business on the expiration date, if applicable, unexercised warrants will become void.  Warrants may be exercised as described in the applicable prospectus supplement.  When the warrant holder makes the payment and properly completes and signs the warrant certificate at the corporate trust office of the warrant agent or any other office indicated in the prospectus supplement, we will, as soon as possible, forward the common stock, preferred stock or debt securities that the warrant holder has purchased.  If the warrant holder exercises the warrant for less than all of the warrants represented by the warrant certificate, we will issue a new warrant certificate for the remaining warrants.

 

DESCRIPTION OF SUBSCRIPTION RIGHTS

 

We may issue subscription rights to purchase shares of our common stock or preferred stock.  These subscription rights may be issued independently or together with any other security offered hereby and may or may not be transferable by the stockholder receiving the subscription rights in such offering.  In connection with any offering of subscription rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.

 

The applicable prospectus supplement will describe the specific terms of any offering of subscription rights for which this prospectus is being delivered, including the following:

 

	●	the price, if any, for the subscription rights;
	●	the exercise price payable for each share of common stock or preferred stock upon the exercise of the subscription rights;

 

	●	the number of subscription rights issued to each stockholder;
	●	the number and terms of the shares of common stock or preferred stock which may be purchased per each subscription right;

 

	●	the extent to which the subscription rights are transferable;
	●	any other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise of the subscription rights;

 

	●	the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire;
	●	the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities; and

 

●

if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of subscription rights.

 

  

The description in the applicable prospectus supplement of any subscription rights we offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable subscription rights certificate, which will be filed with the SEC if we offer subscription rights.

 

DESCRIPTION OF UNITS

 

As specified in the applicable prospectus supplement, we may issue units consisting of one or more subscription rights, warrants, debt securities, shares of preferred stock, shares of common stock or any combination of such securities issued by us or by third parties.  The applicable prospectus supplement will describe:

 

	●	the terms of the units and of the subscription rights, warrants, debt securities, preferred stock and common stock comprising the units, including whether and under what circumstances the securities comprising the units may be traded separately;
	●	a description of the terms of any unit agreement governing the units; and

 

●

a description of the provisions for the payment, settlement, transfer or exchange or the units.

 

PLAN OF DISTRIBUTION

 

We may sell the securities offered by this prospectus from time to time in one or more transactions;

 

	●	directly to purchasers;
	●	through agents;

 

	●	to or through underwriters or dealers; or
	●	through a combination of these methods.

 

A distribution of the securities offered by this prospectus may also be effected through the issuance of derivative securities, including without limitation, warrants and subscriptions.

 

In addition, the manner in which we may sell some or all of the securities covered by this prospectus includes, without limitation, through:

 

	●	a block trade in which a broker-dealer will attempt to sell as agent, but may position or resell a portion of the block, as principal, in order to facilitate the transaction;
	●	purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account; or

 

●

ordinary brokerage transactions and transactions in which a broker solicits purchasers.

 

In addition, we may enter into derivative or hedging transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.  In connection with such a transaction, the third parties may sell securities covered by and pursuant to this prospectus and an applicable prospectus supplement or other offering materials, as the case may be.  If so, the third party may use securities borrowed from us or others to settle such sales and may use securities received from us to close out any related short positions.  We may also loan or pledge securities covered by this prospectus and an applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement or other offering materials, as the case may be.

 

  

A prospectus supplement with respect to each series of securities will state the terms of the offering of the securities, including:

 

	●	the terms of the offering;
	●	the name or names of any underwriters or agents and the amounts of securities underwritten or purchased by each of them, if any;

 

	●	the public offering price or purchase price of the securities and the net proceeds to be received by us from the sale;
	●	any delayed delivery arrangements;

 

	●	any initial public offering price;
	●	any underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation;

 

	●	any discounts or concessions allowed or reallowed or paid to dealers; and
	●	any securities exchange on which the securities may be listed.

 

The offer and sale of the securities described in this prospectus by us, the underwriters or the third parties described above may be effected from time to time in one or more transactions, including privately negotiated transactions, either:

 

	●	at a fixed price or prices, which may be changed;
	●	in an “at the market” offering within the meaning of Rule 415(a)(4) of the Securities Act;

 

	●	at prices related to the prevailing market prices; or
	●	at negotiated prices.

 

General

 

Underwriters, dealers, agents and remarketing firms that participate in the distribution of the offered securities may be “underwriters” as defined in the Securities Act of 1933.  Any discounts or commissions they receive from us and any profits they receive on the resale of the offered securities may be treated as underwriting discounts and commissions under the Securities Act.  We will identify any underwriters, agents or dealers and describe their commissions, fees or discounts in the applicable prospectus supplement, as the case may be.

 

Underwriters and Agents

 

If underwriters are used in a sale, they will acquire the offered securities for their own account.  The underwriters may resell the offered securities in one or more transactions, including negotiated transactions.  These sales will be made at a fixed public offering price or at varying prices determined at the time of the sale.  We may offer the securities to the public through an underwriting syndicate or through a single underwriter.  The underwriters in any particular offering will be named in the applicable prospectus supplement or other offering materials, as the case may be.

 

Unless the applicable prospectus supplement states otherwise, the obligations of the underwriters to purchase the offered securities will be subject to certain conditions contained in an underwriting agreement that we will enter into with the underwriters at the time of the sale to them.  The underwriters will be obligated to purchase all of the securities of the series offered if any of the securities are purchased, unless the applicable prospectus supplement says otherwise.  Any initial public offering price and any discounts or concessions allowed, reallowed or paid to dealers may be changed from time to time.

 

 

We may designate agents to sell the offered securities.  Unless the applicable prospectus supplement states otherwise, the agents will agree to use their best efforts to solicit purchases for the period of their appointment.  We may also sell the offered securities to one or more remarketing firms, acting as principals for their own accounts or as agents for us.  These firms will remarket the offered securities upon purchasing them in accordance with a redemption or repayment pursuant to the terms of the offered securities.  A prospectus supplement or other offering materials, as the case may be, will identify any remarketing firm and will describe the terms of its agreement, if any, with us and its compensation.

 

In connection with offerings made through underwriters or agents, we may enter into agreements with such underwriters or agents pursuant to which we receive our outstanding securities in consideration for the securities being offered to the public for cash.  In connection with these arrangements, the underwriters or agents may also sell securities covered by this prospectus to hedge their positions in these outstanding securities, including in short sale transactions.  If so, the underwriters or agents may use the securities received from us under these arrangements to close out any related open borrowings of securities.

 

Dealers

 

We may sell the offered securities to dealers as principals.  The dealer may then resell such securities to the public either at varying prices to be determined by the dealer or at a fixed offering price agreed to with us at the time of resale.

 

Direct Sales

 

We may choose to sell the offered securities directly.  In this case, no underwriters or agents would be involved.

 

Institutional Purchasers

 

We may authorize agents, dealers or underwriters to solicit certain institutional investors to purchase offered securities on a delayed delivery basis pursuant to delayed delivery contracts providing for payment and delivery on a specified future date.  The applicable prospectus supplement or other offering materials, as the case may be, will provide the details of any such arrangement, including the offering price and commissions payable on the solicitations.

 

We will enter into such delayed contracts only with institutional purchasers that we approve.  These institutions may include commercial and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions.

 

Indemnification; Other Relationships

 

We may have agreements with agents, underwriters, dealers and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act.  Agents, underwriters, dealers and remarketing firms, and their affiliates, may engage in transactions with, or perform services for, us in the ordinary course of business.  This includes commercial banking and investment banking transactions.

 

Market-Making, Stabilization and Other Transactions

 

There is currently no market for any of the offered securities, other than our common stock which is traded on the Nasdaq Global Market.  If the offered securities are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar securities and other factors.  While it is possible that an underwriter could inform us that it intends to make a market in the offered securities, any such underwriter would not be obligated to do so, and any such market-making could be discontinued at any time without notice.  Therefore, no assurance can be given as to whether an active trading market will develop for the offered securities.  We have no current plans for listing of the debt securities, preferred stock, warrants or subscription rights on any securities exchange or quotation system.  Any such listing with respect to any particular debt securities, preferred stock, warrants or subscription rights will be described in the applicable prospectus supplement or other offering materials, as the case may be.

 

  

Any underwriter may engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Securities Exchange Act of 1934.  Stabilizing transactions involve bids to purchase the underlying security in the open market for the purpose of pegging, fixing or maintaining the price of the securities.  Syndicate covering transactions involve purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.

 

Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions.  Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would be in the absence of these transactions.  The underwriters may, if they commence these transactions, discontinue them at any time.

 

LEGAL MATTERS

 

Unless otherwise specified in the applicable prospectus supplement, the validity of the securities offered by this prospectus will be passed upon for us by Mitchell Silberberg & Knupp LLP, Los Angeles, California.  If legal matters in connection with offerings made by this prospectus are passed on by counsel for the underwriters, dealers or agents, if any, that counsel will be named in the applicable prospectus supplement.

 

EXPERTS

 

The financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2015 have been so incorporated in reliance on the report (which contains an explanatory paragraph relating to the Company’s ability to continue as a going concern as described in Note 2 to the financial statements) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

  

 

 

 

 

 

 

 

 

$15,000,000

Common Stock

 

 

 

 

PROSPECTUS SUPPLEMENT

 

 

 

 

 

 

 

B. Riley FBR, Inc.

 

The date of this prospectus supplement is March 27, 2018