Filed
Pursuant to Rule 424(b)(5)
Registration Statement No. 333-228433
PROSPECTUS
SUPPLEMENT
(to
Prospectus dated November 26, 2018)
$30,000,000
Cadiz Inc.
COMMON
STOCK
We
have entered into an At Market Issuance Sales Agreement, or the “sales agreement,” with B. Riley Securities, Inc.,
or the “Agent,” relating to our common stock offered by this prospectus supplement. In accordance with the terms of
the sales agreement, we may offer and sell our common stock, having an aggregate offering price of up to $30,000,000 from time
to time through the Agent.
Our common stock is listed on the Nasdaq Global Market under
the symbol “CDZI.” On July 31, 2020, the closing price of our common stock as reported by the Nasdaq Global Market
was $10.62 per share.
Sales of our common stock, if any, under this prospectus supplement
and the accompanying prospectus may be made in sales deemed to be an “at the market offering” as defined in Rule 415
promulgated under the Securities Act of 1933, as amended, or the “Securities Act”, through or to the Agent as
agent or/and principal. 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 from
the sales. 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 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” beginning on page S-4 of this
prospectus supplement, and under similar headings in other documents that are filed after the date hereof and incorporated by
reference into this prospectus supplement, for more information on these risks.
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
SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
B.
Riley FBR
Prospectus
Supplement dated July 31, 2020
TABLE
OF CONTENTS
About
This Prospectus Supplement AND THE ACCOMPANYING PROSPECTUS
This
document consists of two parts and is part of a registration statement on Form S-3 that we filed with the Securities and Exchange
Commission (the “SEC” or the “Commission”) utilizing a “shelf” registration process. The first
part is this prospectus supplement, which describes the specific terms of this offering and also adds to and updates the information
contained in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying
prospectus. The second part, the accompanying prospectus, gives more general information, some of which may not apply to this
offering. If there is a difference between the information contained in this prospectus supplement, on the one hand, and the information
contained in the accompanying prospectus or any document incorporated by reference, on the other hand, you should rely on the
information in this prospectus supplement. Generally, when we refer to the prospectus, we are referring to this prospectus supplement
and the accompanying prospectus combined.
Before
you invest in shares of our common stock, you should read this prospectus supplement and the accompanying prospectus and any related
issuer free writing prospectus, as well as the additional information incorporated by reference in this prospectus supplement
described below under “Where You Can Find More Information” and “Information Incorporated by Reference”
or in any related issuer free writing prospectus.
This
prospectus supplement contains summaries of certain provisions contained in some of the documents described herein, but reference
is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual
documents. Copies of the documents referred to herein have been filed, or will be filed or incorporated by reference as
exhibits to the registration statement of which this prospectus supplement is a part, and you may obtain copies of those documents
as described below under “Where You Can Find More Information.”
Neither
the delivery of this prospectus supplement, the accompanying prospectus or any free writing prospectus prepared by us, nor any
sale made under this prospectus supplement, the accompanying prospectus or any free writing prospectus prepared by us, implies
that there has been no change in our affairs or that the information therein is correct as of any date after the date of such
document. You should not assume that the information in this prospectus supplement or the accompanying prospectus, including
any information incorporated in this prospectus supplement or the accompanying prospectus by reference, or any free writing prospectus
prepared by us, is accurate as of any date other than the date on the front of those documents. Our business, financial condition,
results of operations and prospects may have changed since that date.
Any
statement made in this prospectus supplement or in a document incorporated or deemed to be incorporated by reference therein will
be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained in
this prospectus supplement or in any other subsequently filed document that is also incorporated or deemed to be incorporated
by reference in this prospectus supplement modifies or supersedes that 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.
We
are responsible for the information contained in or incorporated by reference in this prospectus supplement, the accompanying
prospectus and any related issuer free writing prospectus we have authorized for use in connection with this offering. This prospectus
supplement may be used only for the purpose for which it has been prepared. You may rely only on the information contained or
incorporated by reference in this prospectus supplement. Neither we nor any other person has authorized anyone to provide
information different from the information contained in this prospectus supplement, the accompanying prospectus and any related
issuer free writing prospectus and the documents incorporated by reference herein and therein.
You
should not consider any information included or incorporated by reference in this prospectus supplement or the accompanying prospectus
to be legal, tax or investment advice. You should consult your own counsel, accountant and other advisors for legal, tax, business,
financial and related advice regarding any purchase of the notes. Neither we nor the Agent makes any representation regarding
the legality of an investment in our common stock by any person under applicable investment or similar laws.
We
are not making an offer to sell our common stock in any jurisdiction where the offer or sale is not permitted. This prospectus
supplement does not constitute an offer or an invitation to subscribe for and purchase any of our securities, and may not be used
for or in connection with an offer or solicitation by any person, in any jurisdiction in which such an offer or solicitation is
not authorized or to any person to whom it is unlawful to make such an offer or solicitation. This prospectus supplement does
not contain all of the information included in the registration statement. For a more complete understanding of the offering of
the securities, you should refer to the registration statement, including its exhibits.
Summary
This
summary highlights selected information included elsewhere in or incorporated by reference in this prospectus and does not contain
all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully,
especially “Risk Factors” and the financial statements and related notes and other information incorporated by reference
into this prospectus, before deciding whether to participate in the offering described in this prospectus. In this prospectus,
unless expressly noted or the content indicates otherwise, the words “we,” “us,” “our,” “Cadiz,”
“company” and similar references mean Cadiz Inc. and it subsidiaries.
About
Cadiz
We
are a natural resources development company dedicated to creating sustainable water and agricultural opportunities in California.
We own approximately 45,000 acres of land with high-quality, naturally recharging groundwater resources in three areas of Southern
California’s Mojave Desert. These properties are located in eastern San Bernardino County situated in close proximity to
major highway, rail, energy and water infrastructure, including the Colorado River Aqueduct, which is the primary transportation
route for water imported into Southern California from the Colorado River.
Our
properties offer opportunities for a wide array of sustainable activities including water supply projects, groundwater storage,
large-scale agricultural development and land conservation and stewardship programs. In addition to our land and water assets,
we also own pipeline and well infrastructure able to irrigate existing agriculture and to convey water to and from other communities
and agricultural ventures that may be short of supply and/or storage.
Our
main objective is to realize the highest and best use of our land, water and infrastructure assets in an environmentally responsible
way. We believe that the highest and best use of our assets will be realized through the development of a combination of water
supply, water storage and agricultural projects in accordance with a holistic land management strategy. Our present activities
are focused on developing our assets in ways that meet growing long-term demand for access to sustainable water supplies and agricultural
products.
Upon
our founding in 1983 as Cadiz Land Company, we began an agricultural development on a portion of our primary property in Cadiz,
California, which is a 35,000-acre property at the base of the Fenner and Orange Blossom Wash watersheds in eastern San Bernardino
County, or the “Cadiz/Fenner Property.” These watersheds span an area of more than 1,300 square miles and have 17
to 34 million acre-feet of fresh, high-quality groundwater in storage, an amount comparable to Lake Mead, America’s
largest surface reservoir.
We
have sustainably farmed portions of the Cadiz/Fenner Property since the late 1980s in accordance with permits from the County
of San Bernardino, the public agency responsible for groundwater use at the Cadiz/Fenner Property. The permits authorize the development
of up to 9,600 acres of the Cadiz/Fenner Property for farming and the associated use of underlying groundwater for irrigation.
The
Cadiz/Fenner Property is well-suited for various permanent and seasonal crops, and we have successfully grown citrus, organic
table grapes and raisins, and seasonal vegetables, such as melons, squash and asparagus. Today, we are engaged in agricultural
joint ventures at the Cadiz/Fenner Property and are the largest private agricultural operation in San Bernardino County. Presently,
the property has 2,100 acres leased to third parties for cultivation of citrus and 242 acres leased to our joint venture, SoCal
Hemp JV LLC, for the cultivation of industrial hemp.
In
addition to our agricultural ventures, we are presently developing the Cadiz Valley Water Conservation, Recovery and Storage Project,
or the “Water Project,” which is approved to capture and conserve millions of acre-feet of native groundwater currently
being lost to evaporation from the aquifer system beneath our Cadiz/Fenner Property, and provide on average 50,000 acre-feet of
water per year, enough water for 400,000 people, to water providers throughout Southern California. A second phase of the Water
Project would offer storage in the aquifer system for up to one million acre-feet of imported water. Following a multi-year California
Environmental Quality Act review and permitting process, the Water Project received permits that allow the capture and conservation
of 2.5 million acre-feet of groundwater over 50 years in accordance with the terms of a groundwater management plan approved by
San Bernardino County. We believe that the ultimate implementation of the Water Project would provide a significant return on
our investment and future cash flow.
By
making new water supply and storage available in Southern California, we believe we can be part of the solution to the State’s
persistent water challenge. Available water supply in Southern California is constrained every year by regulatory restrictions
on each of the State’s three main water sources: (1) the Colorado River Aqueduct; (2) the State Water Project, which provides
water supplies from Northern California to the central and southern parts of the state; and (3) the Los Angeles Aqueduct, which
delivers water from the eastern Sierra Nevada mountains to Los Angeles. Southern California’s water providers and farmers
rely on imports from these systems to meet demand, but deliveries from all three into the region are consistently below capacity,
even in wet years.
Further,
the availability of supplies in California differs greatly from year to year due to natural hydrological variability. Over the
last decade, California experienced an historic drought featuring record-low winter precipitation, followed by record wet years.
The 2018-2019 winter was a wet year, with snowpack and rainfall well above average through the summer of 2019. However, 2020 is
on track to be another dry year, with snowpack at 37% of the May average. The rapid swings between wet and dry years challenges
California’s traditional supply system and supports the need for reliable storage and local supply.
Given
the variety of challenges and limitations presented by the State’s existing infrastructure, Southern California water providers
and farmers are presently pursuing investments in storage, supply and infrastructure to meet long-term demand and pursuing sustainable
water and agriculture sources. We have a record of sustainable agricultural development and groundwater management to support
our continued integration into California’s water and agriculture portfolio.
Our current working capital requirements relate largely to
the final development activities associated with the Water Project and those activities consistent with the Water Project related
to further development of our land and agricultural assets. We currently own a 96-mile long, 30-inch wide existing idle natural
gas pipeline, which we refer to as our Northern Pipeline, that extends northwest from the Cadiz/Fenner Property terminating in
Barstow, California, and have entered into a purchase agreement for a further 124-mile segment connecting this line from Barstow
to Wheeler Ridge, California. The completion of the acquisition of the 124-mile segment is contingent on certain conditions, including
the payment of up to $19.0 million. We do not currently have the cash resources on hand to satisfy this deferred payment, and
we intend to use the proceeds from this offering to fund all of the deferred payment. If we do not complete the purchase of the
additional 124-mile pipeline, then our Northern Pipeline opportunities will be limited to the 96-mile segment that we own.
While
we continue to believe that the ultimate implementation of the Water Project will provide a significant source of future cash
flow, we also believe there is substantial value in our underlying agricultural assets and our current agricultural ventures and
lease arrangements.
We
also continue to explore additional sustainable beneficial uses of our land and water resource assets, including the marketing
of our approved desert tortoise land conservation bank, which is located on our properties outside the Water Project area, and
other long-term legacy uses of our properties, such as land stewardship and conservation programs.
Corporate
Information
We
are a Delaware corporation with our principal executive offices located at 550 South Hope Street, Suite 2850, Los Angeles, California
90071. Our telephone number is (213) 271-1600. We maintain a corporate website at www.cadizinc.com. Our
website address provided in this prospectus is not intended to function as a hyperlink and the information on our website is not,
nor should it be considered, part of this prospectus or incorporated by reference into this prospectus.
The
Offering
Issuer
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Cadiz
Inc.
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Common stock offered
by us in this offering
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Shares of our
common stock having an aggregate offering price of up to $30,000,000.
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Manner of offering
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“At the
market offering” that may be made from time to time through our Agent, B. Riley Securities, Inc., as agent or principal,
pursuant to an At Market Issuance Sales Agreement, or “sales agreement”. See “Plan of Distribution”
on page S-10.
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Use of proceeds
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We currently
intend to use the net proceeds from this offering for the acceleration of
our water and agricultural development programs, including payment of up to $19 million for the acquisition of an additional 124
mile extension of our Northern Pipeline, continued expansion of our agricultural projects, working capital and general corporate
purposes. See “Use of Proceeds” beginning on page S-8.
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Risk factors
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Investing in our
common stock involves a high degree of risk. See “Risk Factors” beginning on page S-4 of this
prospectus supplement and the risk factors described in the documents incorporated by reference in this prospectus for a
discussion of factors you should carefully consider before deciding to invest in our common stock.
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Nasdaq Global Market
symbol
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CDZI
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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,
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”
beginning on page S-12. If any of the risks and uncertainties described in this prospectus or the documents incorporated by reference
herein actually occur, our business, financial condition, or results of operations could be materially adversely affected. This
could cause the market or 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
Relating to this 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 $10.57 per share (the
closing sale price of our common stock on the Nasdaq Global Market on July 29, 2020) and assuming that we sell all $30,000,000
of shares of common stock under this prospectus, and after deducting commissions and estimated aggregate offering expenses payable
by us, if you purchase shares of common stock in this offering, you will suffer immediate and substantial dilution of $10.43 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 proceeds from this offering and might not apply the proceeds of this
offering in ways that increase the value of your investment.
We currently intend to use the net proceeds from this offering
for the acceleration of our water and agricultural development programs, including payment of up to $19 million for the acquisition
of an additional 124 mile extension of our Northern Pipeline, continued expansion of our agricultural projects, working capital
and general corporate purposes. See “Use of Proceeds” of this prospectus supplement. However, our management will
have broad discretion over the use of the net proceeds from this offering, and you will be relying on the judgment of our management
regarding the application of these proceeds. They might not apply the net proceeds of this offering in ways that increase the value
of your investment. The amounts and timing of our actual expenditures will depend on numerous factors, including the factors described
under “Risk Factors” in this prospectus supplement 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.
The
proceeds from this offering may not be sufficient to exercise the option to acquire our 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 all, or a portion, of the deferred payment of up to $19 million 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 may
not be sufficient to make the deferred payment. We are pursuing alternatives that will provide additional resources to fund the
payment, but we cannot assure you that we will be able to obtain such financing or that such financing is sufficient. If we are
unable to exercise this option, then our Northern Pipeline opportunities will be limited to the 96-mile segment we currently own,
which may have an adverse effect on our business operations and stock price.
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 the Agent at any time throughout the term of the sales agreement. The number of shares that are sold through
the Agent 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 the Agent 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 or equity-linked securities in the public market could lower the market price of our common stock.
In
the future, we may sell additional shares of our common stock or equity-linked securities to raise capital. In addition, a substantial
number of shares of our common stock are reserved for issuance upon the exercise or vesting, as applicable, of equity incentive
awards and warrants and for issuance upon conversion of our Series 1 Preferred Stock. We cannot predict the size of future issuances
or the effect, if any, that they may have on the market price of our common stock. The issuance and sale of substantial amounts
of common stock or equity-linked securities, or the perception that such issuances and sales may occur, could adversely affect
the market price of our common stock and impair our ability to raise capital through the sale of additional equity or equity-linked
securities.
The
sale of a substantial amount of our common stock in the market and the issuance of shares upon conversion of convertible instruments,
including the shares of our Series 1 Preferred Stock, could adversely affect the prevailing market price of our common stock.
As of June 30, 2020, we had 34,797,062 shares of common
stock issued and outstanding and the closing sale price of our common stock on July 31, 2020 was $10.62.
We
may engage in transactions to issue preferred stock, convertible debt and warrants to purchase common stock, as we have in the
past, which transactions may include registration rights. The registration of such additional securities and the potential for
high volume trades of our common stock in connection with these financings may have a downward effect on our market price. Future
issuance of our common stock upon the conversion or exercise of these shares of preferred stock, convertible debt, or warrants
may have a further negative impact on our stock price.
Further,
we have reserved for issuance, but not yet issued, a substantial amount of additional shares of our common stock, including
the shares of our common stock issuable upon conversion of our Series 1 Preferred Stock. The issuance of additional shares of
our common stock may increase dilution of existing investors and further depress the market price of our common stock, which
may negatively affect our stockholders’ equity and our ability to raise capital on terms acceptable to us in the
future.
The
volatility of our stock price could adversely affect current and future stockholders.
The
market price of our common stock is volatile and fluctuates in response to various factors which are beyond our control. Such
fluctuations are particularly common in companies such as ours, which have not generated significant revenues. The
following factors, in addition to other risk factors described in this section, could cause the market price of our common stock
to fluctuate substantially:
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Developments involving the execution of our
business plan;
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Disclosure of any adverse results in litigation;
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Regulatory developments affecting our ability
to develop our properties;
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Disruptions to the market and industry as a
result of the global COVID-19 pandemic and related events;
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The dilutive effect or perceived dilutive effect
of additional debt or equity financings;
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Perceptions in the marketplace of our company
and the industry in which we operate; and
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General economic, political and market conditions.
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In
addition, the stock markets, from time to time, experience extreme price and volume fluctuations that may be unrelated or disproportionate
to the operating performance of companies. These broad fluctuations may adversely affect the market price of our common stock.
Price volatility could be worse if the trading volume of our common stock is low.
We
do not anticipate paying dividends on our common stock.
We
do not anticipate declaring or paying cash dividends on our common stock for the foreseeable future. We expect to use future earnings,
if any, to fund business growth. Therefore, stockholders may not receive any funds absent a sale of their shares of common stock.
If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock
price appreciates. We cannot assure stockholders that our stock price will appreciate or that they will receive a positive return
on their investment if and when they sell their shares.
Special
Note Regarding Forward-Looking Statements
Information
presented in this prospectus supplement, the accompanying prospectus and any free writing prospectus prepared by or on behalf
of us or to which we have referred you, and in other documents which are incorporated by reference in this prospectus supplement
under the sections of this prospectus supplement entitled “Where You Can Find More Information” and “Information
Incorporated by Reference,” that discusses financial projections, information or expectations about our business plans,
results of operations, products or markets, or otherwise makes statements about future events, are forward-looking statements.
Forward-looking statements can be identified by the use of words such as “intends,” “anticipates,” “believes,”
“estimates,” “projects,” “forecasts,” “expects,” “plans,” and “proposes.”
Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there
are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements.
These include, among others, the cautionary statements in the “Risk Factors” section of this prospectus supplement
beginning on page S-4. These cautionary statements identify important factors that could cause actual results to differ materially
from those described in the forward-looking statements. When considering forward-looking statements in this prospectus supplement,
you should keep in mind the cautionary statements in the “Risk Factors” section and other sections of this prospectus
supplement and other cautionary statements in the accompanying prospectus and any free writing prospectus prepared by or on behalf
of us or to which we have referred you and any documents which are incorporated by reference in this prospectus supplement and
listed in “Where You Can Find More Information” and “Information Incorporated by Reference” beginning
on pages S-11 and S-12, respectively.
Certain
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, along with the other information contained in this prospectus supplement, as updated
by our subsequent filings under the Securities Exchange Act of 1934, as amended, or 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 $30,000,000 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 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 $28.9
million after deducting the Agent’s commission and estimated offering expenses payable by us, assuming we sell the maximum
amount under the sales agreement.
We currently intend to use the net proceeds from this offering
for the acceleration of our water and agricultural development programs, including payment of up to $19 million for the acquisition
of an additional 124 mile extension of our Northern Pipeline, continued expansion of our agricultural projects, working capital
and general corporate purposes. Pending application of the net proceeds as described above, we may invest the net proceeds in
interest-bearing investment grade securities.
The
amounts and timing of our actual expenditures will depend on numerous factors, including the factors described under “Risk
Factors” in this 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.
Dividend
Policy
We
do not anticipate paying any cash dividends on shares of our common stock in the foreseeable future. We currently intend to retain
all of our future earnings, if any, to finance our business strategy. Any future determination relating to our dividend policy
will be made at the discretion of our Board of Directors and will depend on a number of factors, including future earnings, capital
requirements, financial conditions, future prospects, contractual restrictions and covenants and other factors that our Board
of Directors may deem relevant.
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 March 31, 2020 was approximately
$(23.5) million, or $(0.68) per share. After giving effect to the sale by us of 2,838,221 shares of common stock offered hereby
at the assumed public offering price of $10.57 per share (the closing sale price of our common stock on the Nasdaq Global Market
on July 29, 2020) 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 March 31, 2020 would have been approximately $5.4 million, or $0.14 per share. This
represents an immediate increase in as adjusted net tangible book value of $0.82 per share to existing stockholders and an immediate
dilution of $10.43 per share to new investors purchasing our common stock in this offering. The following table illustrates the
per share dilution to investors purchasing shares of common stock in this offering:
Assumed public offering price
of common stock
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$
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10.57
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Net tangible book value per share as of March
31, 2020
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$
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(0.68
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Increase per share in net tangible book value
after this offering
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$
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0.82
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As adjusted net tangible book value per share
as of March 31, 2020, after giving effect to this offering
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$
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0.14
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Dilution per share to new investors
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$
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10.43
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The table above assumes for illustrative purposes that an aggregate
of 2,838,221 shares of our common stock are sold during the term of the sales agreement at a price of $10.57 per share
(the closing sale price of our common stock on the Nasdaq Global Market on July 29, 2020) for aggregate gross proceeds of approximately
$30,000,000. 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 each sale under the sales agreement.
The
above table is based on 34,772,030 shares of common stock issued and outstanding as of March 31, 2020, and does not include, as
of March 31, 2020:
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115,000 shares of our common stock issuable pursuant to unexercised and outstanding options to purchase shares issued under our 2009 Equity Incentive Plan;
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962,880 shares of our common stock reserved for issuance and available for future grant or sale under our 2019 Equity Incentive Plan;
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362,500 shares of our common stock issuable upon the exercise of outstanding warrants; and
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4,050,500 shares of our common stock issuable upon conversion of outstanding shares of our Series 1 Preferred Stock, at a conversion rate of 405.05 shares of common stock per share of our Series 1 Preferred Stock.
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To the extent that the outstanding options or warrants are
exercised, or shares are issued upon conversion of shares of our Series 1 Preferred Stock, you will experience further
dilution. To the extent that the above issued options and warrants are exercised, and all 4,050,500 shares of common stock
reserved for issuance upon conversion of the outstanding shares of our Series 1 Preferred Stock are issued, the pro forma net
tangible book value per share of our common stock after giving effect to this offering would be $0.13 per share, and the
dilution in net tangible book value per share to purchasers in this offering would be $10.44 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 Securities, Inc., or the “Agent,” under which we may issue and
sell our common stock, through or to the Agent as agent or/and principal, having an aggregate gross sales price of up to $30,000,000
from time to time through the Agent. Sales of our common stock, if any, under this 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
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 Agent may suspend the offering of common stock upon notice and subject to other conditions.
The
Agent will offer our common stock subject to the terms and conditions of the sales agreement as agreed upon by us and the Agent.
Each time we wish to issue and sell common stock under the sales agreement, we will notify the 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 Agent, unless the Agent declines to accept the terms of the notice, the 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 Agent under the sales agreement to sell our common stock are subject to a number
of conditions that we must meet. In addition, the Agent may purchase such shares of our common stock on a principal basis under
the sale agreement, at a price and on such terms as are mutually agreed between us and the Agent.
We
will pay the 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 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 Agent under the terms of the sales agreement, will be
approximately $200,000.
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 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 Agent will be deemed to be an “underwriter” within
the meaning of the Securities Act and the compensation of the Agent will be deemed to be underwriting commissions or discounts.
We have agreed to provide indemnification and contribution to the 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
Agent and certain of its affiliates have engaged in, and may in the future engage in, investment banking and other commercial
dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary
fees and expenses for these transactions. In addition, in the ordinary course of their various business activities, the Agent
and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative
securities) and financial instruments (which may include bank loans) for their own account and for the accounts of their customers.
Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The Agent or its
affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities
or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities
and instruments.
Legal
Matters
The
validity of the securities offered hereby will be passed upon for us by Greenberg Traurig, LLP, Los Angeles, California.
B. Riley Securities, Inc. 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 by reference to the Annual Report on Form 10-K for the
year ended December 31, 2019 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
file quarterly and annual reports, proxy statements and other information with the Commission. Our filings with the Commission,
including the registration statement, reports, proxy and information statements, and other information 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. Our website address provided in this prospectus is not intended to function as a hyperlink and
the information on our website is not, nor should it be considered, part of this prospectus or incorporated by reference into
this prospectus.
This
prospectus supplement is part of a registration statement that we have filed with the SEC relating to the securities offered herein.
This prospectus supplement does not contain all of the information we have included in the registration statement and the accompanying
exhibits and schedules in accordance with the rules and regulations of the SEC, and we refer you to the omitted information. The
statements this prospectus supplement makes pertaining to the content of any contract, agreement or other document that is an
exhibit to the registration statement necessarily are summaries of their material provisions and do not describe all exceptions
and qualifications contained in those contracts, agreements or documents. You should read those contracts, agreements or documents
for information that may be important to you. The registration statement, exhibits and schedules are available at the SEC’s
Internet website.
Information
Incorporated By Reference
The
rules of the SEC allow us to incorporate by reference in this prospectus supplement the information in other documents that we
file with it, which means that we can disclose important information to you by referring you to those documents that we have filed
separately with the SEC. You should read the information incorporated by reference because it is an important part of this prospectus
supplement. We hereby incorporate by reference the following information or documents into this prospectus supplement:
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our Annual Report on Form 10-K
for the year ended December 31, 2019, filed on March 13, 2020;
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our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 7, 2020;
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the Current Reports on Form 8-K
filed with the Commission on February
3, 2020, February
20, 2020, March
9, 2020, May 22, 2020, and June 22, 2020;
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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:
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the description of our common stock as set forth
in Exhibit 4.3 to the Annual Report on Form
10-K for the year ended December 31, 2019, filed on March 13, 2020; and
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the description of our Series 1
Preferred as set forth in the Current Report on Form 8-K filed with the Commission on March 9, 2020.
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Any
information in any of the foregoing documents will automatically be deemed to be modified or superseded to the extent that information
in this prospectus or in a later filed document that is incorporated or deemed to be incorporated herein by reference modifies
or replaces such information.
We
also incorporate by reference any future filings (other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K
and exhibits filed on such form that are related to such items) made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act, until the termination of the offering as to which this prospectus supplement relates. Information in such
future filings updates and supplements the information provided in this prospectus supplement and the accompanying prospectus.
Any statements in any such future filings will automatically be deemed to modify and supersede any information in any document
we previously filed with the SEC that is incorporated or deemed to be incorporated herein by reference to the extent that statements
in the later filed document modify or replace such earlier statements.
You
may obtain a copy of these filings, without charge, by writing or calling us at:
Cadiz
Inc.
550 South Hope Street
Suite 2850
Los Angeles, California 90071
Attention: Investor Relations
(213) 271-1600
PROSPECTUS
$100,000,000
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 $100,000,000 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 November 15, 2018, the closing price
of our common stock as reported by the Nasdaq Global Market was $10.92 per share.
Investing
in these securities involves certain risks. See “Risk Factors” beginning on page 2.
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 26, 2018
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement we filed with the Securities and Exchange Commission, or the “Commission”
or the “SEC,” using the “shelf” registration process. Under the shelf registration process, using this
prospectus, together with a prospectus supplement, we may sell from time to time any combination of the securities described in
this prospectus in one or more offerings. This prospectus provides you with a general description of the securities that may be
offered. Each time we sell securities pursuant to this prospectus, we will provide a prospectus supplement that will contain specific
information about the terms of the securities being offered. A prospectus supplement may include a discussion of any risk factors
or other special considerations applicable to those securities or to us. The prospectus supplement may also add to, update or
change information contained in this prospectus and, accordingly, to the extent inconsistent, the information in this prospectus
will be superseded by the information in the prospectus supplement. You should read this prospectus, any applicable prospectus
supplement and the additional information incorporated by reference in this prospectus described below under “Available
Information” and “Information Incorporated by Reference” before making an investment in our securities.
This
prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made
to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents.
Copies of the documents referred to herein have been filed, or will be filed or incorporated by reference as exhibits to the registration
statement of which this prospectus is a part, and you may obtain copies of those documents as described below under “Available
Information.”
Neither
the delivery of this prospectus nor any sale made under it implies that there has been no change in our affairs or that the information
in this prospectus is correct as of any date after the date of this prospectus. You should not assume that the information in
this prospectus, including any information incorporated in this prospectus by reference, the accompanying prospectus supplement
or any free writing prospectus prepared by us, is accurate as of any date other than the date on the front of those documents.
Our business, financial condition, results of operations and prospects may have changed since that date.
We
have not authorized anyone to provide any information other than that contained or incorporated by reference in this prospectus,
a prospectus supplement or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We
take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give
you. We are not making an offer to sell securities in any jurisdiction where the offer or sale of such securities is not permitted.
Unless
the context otherwise requires, the terms “we,” “us,” “our,” “Cadiz,” and “the
Company” refer to Cadiz Inc., a Delaware corporation.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
All
statements in this prospectus and the documents incorporated by reference 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 actual results,
performance or achievements of the Company 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. 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.
Certain
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, along with the other information contained in this prospectus, as updated by our
subsequent filings under the Securities Exchange Act of 1934, as amended, or 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.
AVAILABLE
INFORMATION
We
are subject to the informational requirements of the Exchange Act, and file reports, proxy statements and other information with
the Commission. We have also filed a registration statement on Form S-3 with the Commission. This prospectus, which forms part
of the registration statement, does not have all of the information contained in the registration statement. The Commission also
maintains a website that contains reports, proxy statements and other information, including the registration statement. The website
address is: http://www.sec.gov.
INFORMATION
INCORPORATED BY REFERENCE
The
Commission allows us to “incorporate by reference” into this prospectus the information we file with them. The information
we incorporate by reference into this prospectus is an important part of this prospectus. Any statement in a document we have
filed with the Commission prior to the date of this prospectus and which is incorporated by reference into this prospectus will
be considered to be modified or superseded to the extent a statement contained in the prospectus or any other subsequently filed
document that is incorporated by reference into this prospectus modifies or supersedes that statement. The modified or superseded
statement will not be considered to be a part of this prospectus, except as modified or superseded.
We
incorporate by reference into this prospectus the information contained in the following documents, which is considered to be
a part of this prospectus:
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our Annual Report on Form 10-K for the year ended December 31, 2017, filed on March 14, 2018 and Form 10-K/A for the year ended December 31, 2017 filed
on April 27, 2018;
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our Current Reports on Form 8-K filed on March 27, 2018, May 3, 2018, May 24, 2018, and May 31, 2018;
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our Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2018, June 30, 2018, and September 30, 2018, filed on May 9, 2018, August 6, 2018 and November 8, 2018, respectively;
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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:
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Form 8-K filed with the SEC on May 26, 1988; and
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Form 8-K filed with the SEC on June 2, 1992.
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We
also incorporate by reference all additional documents that we file with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act that are filed after the date of the initial registration statement and prior to the effectiveness of
the registration statement or that are filed after the effective date of the registration statement of which this prospectus is
a part and prior to the termination of the offering of securities offered pursuant to this prospectus. We are not, however, incorporating
in each case, any documents or information that we are deemed to “furnish” and not file in accordance with the Commission
rules.
You
may obtain a copy of these filings, without charge, by writing or calling us at:
Cadiz
Inc.
550 South Hope Street
Suite 2850
Los Angeles, California 90071
Attention: Investor Relations
(213) 271-1600
No
dealer, salesperson, or other person has been authorized to give any information or to make any representation not contained in
this prospectus, and, if given or made, such information and representation should not be relied upon as having been authorized
by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered
by this prospectus in any jurisdiction or to any person to whom it is unlawful to make such offer or solicitation. Neither the
delivery of this prospectus nor any sale made hereunder shall under any circumstances create an implication that there has been
no change in the facts set forth in this prospectus or in our affairs since the date hereof.
THE
COMPANY
About
Cadiz
We
are a land and water resource development company with over 45,000 acres of land in three areas of eastern San Bernardino County,
California. Virtually all of this land is underlain by high-quality, naturally recharging groundwater resources, and is situated
in proximity to the Colorado River and the Colorado River Aqueduct, or the “CRA,” California’s primary mode
of water transportation for imports from the Colorado River into the State. Our properties are suitable for various uses, including
large-scale agricultural development, groundwater storage and water supply projects. Our main objective is to realize the highest
and best use of these land and water resources in an environmentally responsible way.
We
believe that the long-term highest and best use of our land and water assets will be realized through the development of a combination
of water supply and storage projects at our properties. Therefore, we have primarily focused on the development of the Cadiz Valley
Water Conservation, Recovery and Storage Project, or the “Water Project” or “Project,” which will capture
and conserve millions of acre-feet1 of native groundwater currently being lost to evaporation from the aquifer system
beneath our 35,000-acre property in the Cadiz and Fenner valleys of eastern San Bernardino County, or the “Cadiz/Fenner
Property,” and deliver it to water providers throughout Southern California. A second phase of the Water Project would offer
storage of up to one million acre-feet of imported water in the aquifer system. We believe that the ultimate implementation of
this Water Project will provide a significant source of future cash flow.
The
primary factor driving the value of such projects is ongoing pressure on California’s traditional water supplies and the
resulting demand for new, reliable supply solutions that can meet both immediate and long-term water needs. Available water supply
in Southern California is constrained by regulatory restrictions on each of the State’s three main water sources: the CRA,
the State Water Project, which provides water supplies from Northern California to the central and southern parts of the state,
and the Los Angeles Aqueduct, which delivers water from the eastern Sierra Nevada mountains to Los Angeles. Southern California’s
water providers rely on imports from these systems for a majority of their water supplies, but deliveries from all three into
the region are often below capacity, even in wet years.
Further,
the availability of supplies in California differs greatly from year to year due to natural hydrological variability. Over the
last decade, California struggled through a historic drought featuring record-low winter precipitation. Then, following a series
of strong storms that delivered record amounts of rain and snow during the 2016-2017 winter, the State recovered. Yet, the following
winter delivered few precipitation events and, through October 2018, 85% of the State is again abnormally dry with all of Southern
California experiencing drought conditions, according to the US Drought Monitor. Drought, dry conditions and rapid swings between
wet and dry years challenges California’s traditional supply system and supports the need for reliable storage and local
supply.
Given
the variety of challenges and limitations faced by the State’s traditional infrastructure, Southern California water providers
are presently pursuing investments in storage, supply and infrastructure to meet long-term demand. The Water Project is a local
supply option in Southern California that would help address the region’s water supply challenges by providing new reliable
supply and local groundwater storage opportunities in both dry and wet years. Following a multi-year California Environmental
Quality Act, or “CEQA,” review and permitting process, the Water Project received permits that allow the capture and
conservation of 2.5 million acre-feet of groundwater over 50 years in accordance with the terms of a groundwater management plan
approved by San Bernardino County, the public agency responsible for groundwater use at the project area.
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One
acre-foot is equal to approximately 326,000 gallons or the volume of water that will cover an area of one acre to a depth of one-foot.
An acre-foot is generally considered to be enough water to meet the annual water needs of two average California households.
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We
currently own a 96-mile existing idle natural gas 30-inch pipeline that extends from the Cadiz/Fenner Property to Barstow, California
and we intend to convert this pipeline to allow for the transportation of water. The Barstow area serves as a hub for water delivered
from northern and central California to communities in Southern California’s High Desert. In addition, we hold an option
to purchase a further 124-mile segment of this pipeline from Barstow to Wheeler Ridge, California for $20 million. This option
expires in December 2018. We do not currently have the cash resources on hand to exercise this option and may use all, or a portion,
of the net proceeds from the sale of the securities offered by this prospectus and each prospectus supplement to exercise this
option. If we are unable to exercise this option, then our northern pipeline opportunities will be limited to the 96-mile segment
we currently own.
Our
current working capital requirements relate largely to the final development activities associated with the Water Project and
those activities consistent with the Water Project related to further development of our land and agricultural assets. While we
continue to believe that the ultimate implementation of the Water Project will provide the primary source of our future cash flow,
we also believe there is significant additional value in our underlying agricultural assets.
In
addition to our Water Project proposal, we are engaged in agricultural joint ventures at the Cadiz/Fenner Property that put some
of the groundwater currently being lost to evaporation from the underlying aquifer system to immediate beneficial use. We have
farmed portions of the Cadiz/Fenner Property since the late 1980s relying on groundwater from the aquifer system for irrigation
and the site is well suited for various permanent and seasonal crops. Presently, the property has 2,100 acres leased for cultivation
of a variety of crops, including citrus, dried-on-the-vine raisins and seasonal vegetables.
We
also continue to explore additional uses of our land and water resource assets, including renewable energy development, the marketing
of our approved desert tortoise land conservation bank, which is located on our properties outside the Water Project area, and
other long-term legacy uses of our properties, such as habitat conservation and cultural development.
Corporate
Information
We
are a Delaware corporation with our principal executive offices located at 550 South Hope Street, Suite 2850, Los Angeles, California
90071. Our telephone number is (213) 271-1600. We maintain a corporate website at www.cadizinc.com. The information contained
in, or that can be accessed through, our website is not a part of this prospectus and is not incorporated by reference into this
prospectus.
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, 2017, filed with the Commission on March 14, 2018, and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018,
filed with the Commission on August 6, 2018, which are 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
the development of the Water Project, including funding all, or 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, the refinancing or repayment of existing indebtedness and the 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.
Pending
such uses, we may temporarily invest the net proceeds in short-term investments.
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,
or 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, or the “Subordinated Indenture.” 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. 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 September 30, 2018, all of our $138,694,526 aggregate principal amount of existing debt would have ranked senior to the
subordinated debt securities and $72,504,645 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 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. 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):
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the
title of the debt securities;
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designation,
aggregate principal amount, denomination and currency or currency unit;
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date
of maturity;
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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;
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whether
the debt securities are senior debt securities or subordinated debt securities and applicable subordination provisions, if
any;
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any
limit on the total principal amount of the debt securities and the ability to issue additional debt securities of the same
series;
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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;
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interest
rate or rates (or the manner of calculation thereof), if any;
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the
times at which any such interest will be payable;
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the
date or dates from which interest will accrue on the debt securities, or the method used for determining those dates;
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the
place or places where the principal and interest, if any, will be payable;
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any
redemption, sinking fund, satisfaction and discharge, or defeasance provisions;
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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;
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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;
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if
material, United States federal income tax consequences;
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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”;
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applicable
conversion or exchange privileges;
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any
defaults and events of defaults applicable to the debt securities to be issued;
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securities
exchange(s) on which the securities will be listed, if any;
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whether
any underwriter(s) will act as market maker(s) for the securities;
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extent
to which a secondary market for the securities is expected to develop;
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provisions
relating to covenant defeasance and legal defeasance;
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provisions
relating to satisfaction and discharge of the Indenture;
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any
covenants or restrictions on us or our subsidiaries; and
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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.
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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:
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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,
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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
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any deferral, renewal or extension of any of
the foregoing.
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“Senior
Indebtedness” does not include:
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our debt to any of our subsidiaries;
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any series of subordinated debt securities issued
under the Subordinated Indenture, unless otherwise specified by the terms of any such series;
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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
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any trade payables.
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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
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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;
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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
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the rights, powers, trusts, duties and immunities
of the trustee under the applicable Indenture.
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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:
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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
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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.
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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:
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change the stated maturity of the principal
of, or any installment of principal of or interest on, any debt security;
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reduce the principal amount of or interest on,
or any premium payable upon redemption of, any debt security;
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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
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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.
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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:
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default in any payment of interest on such series
when due, continued for 30 days;
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default in any payment of principal and premium,
if any, of, or sinking fund installment on, such series when due;
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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;
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certain events of bankruptcy, insolvency or
reorganization; and
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any other event of default we may provide for
that series.
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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 person would exercise in
the conduct of such person’s 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 the outstanding debt securities 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 the outstanding debt securities 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.
Consolidation,
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:
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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
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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.
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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, or the “Certificate,” and
By-Laws, as amended, or 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 September 30, 2018, 24,453,358 shares of common stock were issued and outstanding and options and warrants to purchase an aggregate
of 870,000 shares of common stock issued to directors, employees, consultants and lenders remained outstanding. As of September
30, 2018, the number of stockholders of record of our common stock was 81.
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 stockholders 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.
Cooperation
Agreement
On
May 1, 2018, Cadiz and Water Asset Management, LLC, or WAM, our largest equity stockholder, entered into a Cooperation Agreement,
pursuant to which we agreed to expand our Board of Directors from nine to eleven members and to add to the Board of Directors
two new members designated by WAM. The two WAM designees, John A. Bohn and Jeffrey J. Brown, were appointed on May 30, 2018.
Subject
to WAM meeting certain applicable ownership thresholds described below, at each annual meeting of our stockholders, we have agreed
to include the WAM designees in our slate of recommended director candidates for election to the Board of Directors. Pursuant
to the Cooperation Agreement, WAM has agreed to cause all shares of common stock beneficially owned, directly or indirectly, by
it, or by any of its affiliates, to be present at each annual or special meeting of our stockholders held during the duration
of the Cooperation Agreement and vote in favor of the election of the slate of directors nominated by the Board of Directors.
Pursuant to the Cooperation Agreement, so long as WAM and its affiliates continue to collectively beneficially own twelve percent
or more of the outstanding shares of our common stock (excluding any convertible notes in the calculation of beneficial ownership),
WAM will have the right to nominate two designees for election to the Board of Directors. If the collective beneficial ownership
of WAM and its affiliates falls below twelve percent but remains five percent or greater, WAM will immediately lose its rights
with respect to one of the designees and such designee must immediately resign from the Board of Directors. If the collective
beneficial ownership of WAM and its affiliates falls below five percent, the Cooperation Agreement will automatically terminate
and WAM will no longer have any right to designate any directors to the Board of Directors and such director(s) designated by
WAM must immediately resign from the Board of Directors.
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 stockholders
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 stockholders 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 stockholders 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
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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;
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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
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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 stockholders
by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.
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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 stockholders 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
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create one or more series of preferred stock,
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issue shares of preferred stock in any series
up to the maximum number of shares of preferred stock authorized, and
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determine the preferences, rights, privileges
and restrictions of any series.
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Our
Board may issue authorized shares of preferred stock, as well as authorized but unissued shares of common stock, without further
stockholder action, unless stockholder 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:
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the number of shares and designation or title
of the shares;
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any liquidation preference per share;
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any date of maturity;
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any redemption, repayment or sinking fund provisions;
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any dividend rate or rates and the dates of
payment (or the method for determining the dividend rates or dates of payment);
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any voting rights;
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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;
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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;
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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;
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the place or places where dividends and other
payments on the preferred stock will be payable; and
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any additional voting, dividend, liquidation,
redemption and other rights, preferences, privileges, limitations and restrictions.
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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
discriminate 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 stockholder 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:
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the title of the warrants;
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the price or prices at which the warrants will
be issued;
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the designation, amount and terms of the securities
for which the warrants are exercisable;
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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;
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the aggregate number of warrants;
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any provisions for adjustment of the number
or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;
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the price or prices at which the securities
purchasable upon exercise of the warrants may be purchased;
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if applicable, the date on and after which the
warrants and the securities purchasable upon exercise of the warrants will be separately transferable;
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a discussion of any material U.S. federal income
tax considerations applicable to the exercise of the warrants;
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the date on which the right to exercise the
warrants will commence, and the date on which the right will expire;
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the maximum or minimum number of warrants that
may be exercised at any time;
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information with respect to book-entry procedures,
if any; and
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any other terms of the warrants, including terms,
procedures and limitations relating to the exchange and exercise of the warrants.
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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:
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the price, if any, for the subscription rights;
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the exercise price payable for each share of
common stock or preferred stock upon the exercise of the subscription rights;
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the number of subscription rights issued to
each stockholder;
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the number and terms of the shares of common
stock or preferred stock which may be purchased per each subscription right;
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the extent to which the subscription rights
are transferable;
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any other terms of the subscription rights,
including the terms, procedures and limitations relating to the exchange and exercise of the subscription rights;
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the date on which the right to exercise the
subscription rights shall commence, and the date on which the subscription rights shall expire;
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the extent to which the subscription rights
may include an over-subscription privilege with respect to unsubscribed securities; and
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if applicable, the material terms of any standby
underwriting or purchase arrangement entered into by us in connection with the offering of subscription rights.
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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:
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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;
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a description of the terms of any unit agreement
governing the units; and
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a description of the provisions for the payment,
settlement, transfer or exchange or the units.
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PLAN
OF DISTRIBUTION
We
may sell the securities offered by this prospectus from time to time in one or more transactions;
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directly to purchasers;
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through agents;
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to or through underwriters or dealers; or
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through a combination of these methods.
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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:
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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;
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purchases by a broker-dealer, as principal,
and resale by the broker-dealer for its account; or
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ordinary brokerage transactions and transactions
in which a broker solicits purchasers.
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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:
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the terms of the offering;
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the name or names of any underwriters or agents
and the amounts of securities underwritten nor purchased by each of them, if any;
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the public offering price or purchase price
of the securities and the net proceeds to be received by us from the sale;
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any delayed delivery arrangements;
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any initial public offering price;
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any underwriting discounts or agency fees and
other items constituting underwriters’ or agents’ compensation;
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any discounts or concessions allowed or reallowed
or paid to dealers; and
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any securities exchange on which the securities
may be listed.
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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:
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at a fixed price or prices, which may be changed;
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in an “at the market” offering within
the meaning of Rule 415(a)(4) of the Securities Act;
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at prices related to the prevailing market prices;
or
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at negotiated prices.
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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, as amended. 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 Greenberg Traurig, 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, 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.
PROSPECTUS
SUPPLEMENT
$30,000,000
Cadiz Inc.
COMMON STOCK
B.
Riley FBR
Prospectus
Supplement dated July 31, 2020
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