Cadiz Inc. (NASDAQ: CDZI) is pleased to announce that it has reached agreement with LC Capital Master Fund, Ltd., the Company’s existing lender (“Lender”), for an additional $10 million working capital facility. This facility, together with existing cash resources, has been designed to see the Company through completion of its Water Conservation & Storage Project’s (“Project”) environmental review and permitting process.
Under the terms of the new $10 million facility, the Company would draw the first $5 million at closing (“First Tranche”) and, at the Company’s option, up to an additional $5 million over the following 12 months (“Second Tranche”). All interest on outstanding balances would accrue at 6%, with no principal or interest payments required before June 2013, consistent with the Company’s existing term debt facility. The First Tranche would be convertible at any time into the Company’s common stock at a price of $13.50 per share and the Second Tranche, if drawn, would be convertible into the Company’s common stock at $12.50 per share.
Further, the existing debt facility, which as of June 30th had $44.96 million outstanding, will be modified at closing as to certain of its conversion features. Approximately $20 million of the existing convertible debt would be changed to allow for up to $2.5 million of this amount to be converted at any time into the company’s common stock at the price of $13.50 per share, with the remaining amount becoming non-convertible. If the Second Tranche is drawn, another $20 million of the existing debt would be changed to allow for up to $5 million of this amount to be converted at any time into the Company’s common stock at $12.50 per share, with the remaining amount becoming non-convertible. The final $4.55 million of the existing debt would continue to be convertible at $7 per share.