LOS
ANGELES, March 4, 2025 /PRNewswire/ -- Cadiz,
Inc. (NASDAQ: CDZI) (the "Company" or "Cadiz") announced today that
the Company has entered into a Letter of Agreement ("LOA") with a
lead investor to invest up to $175
million in the Mojave Groundwater Storage Company, LLC
("MGSC"), a new entity established by Cadiz for purposes of
construction, ownership, and operation of Cadiz's groundwater
banking project in the Mojave Desert (the "Mojave Groundwater
Bank") and related projects.
Under the terms of the LOA, the investor, a publicly traded
company focused on investing in water infrastructure projects, will
act as lead investor (the "Lead Investor") in the newly formed
MGSC, and will invest up to $175
million in the MGSC. This LOA is separate from and in
addition to previously announced prospective investments by
non-profit or public sector investors, including federally
recognized Native American Tribes ("Tribes") with whom Cadiz has
entered into Letters of Intent. Cadiz expects the Lead Investor,
along with other qualified investors, including the Tribes, to
provide up to $401 million of equity
capital to acquire assets and fund construction of Mojave
Groundwater Bank facilities. The parties will coordinate to seek
available grant funding for any remaining construction costs.
"This is the pivotal milestone we've been working towards," said
Susan Kennedy. "We made tremendous
progress last year and had great momentum coming into 2025, but
having our lead equity investor in place to complete project
financing is the key to getting this project built and operational
on an aggressive schedule."
Under the terms of the LOA, Cadiz will be responsible for
project development activities and, upon completion of certain
funding commitments by MGSC, will transfer and contribute certain
assets to the MGSC, including (i) 100% of its ownership of the
Northern Pipeline, (ii) the Southern Pipeline right of way, and
(iii) 51% of the water storage rights in the Mojave Groundwater
Bank. In consideration of such transfer of assets, MGSC will pay
Cadiz, among other consideration, approximately $51 million and provide up to an additional
$350 million for development and
construction of Mojave Groundwater Bank facilities. Cadiz will
retain 49% of the water storage rights and 100% of water supply
purchase contracts entered into among Cadiz and public water
systems.
Cadiz has established a special purpose entity, the East Mojave
Water Company, LLC ("EMWC"), to serve as the managing member of
MGSC. The distribution of profits from revenues anticipated to be
received by MGSC will prioritize MGSC investors until they achieve
an annual yield of 7.5%, with incremental distributions thereafter
to the investors and Cadiz as the managing member and to low-income
disadvantaged communities and Tribes participating in an advisory
council.
The LOA does not create any binding obligations for the parties
to close the contemplated transactions unless and until definitive
agreements are executed, and the parties intend to negotiate and
finalize the definitive agreements as soon as practicable. Any
definitive agreement will be subject to conditions including the
Lead Investor obtaining shareholder approval of the contemplated
transactions.
For additional details, please refer to the Company's Current
Report on Form 8-K filed with the SEC today, March 4, 2025.
About Cadiz Inc.
Cadiz is a California water
solutions company dedicated to providing access to clean, reliable
and affordable water for people through a unique combination of
water supply, storage, pipeline and treatment solutions. With
45,000 acres of land in California, 2.5 million acre-feet of water
supply, 220 miles of pipeline assets and the most cost-effective
water treatment filtration technology in the industry, Cadiz offers
a full suite of solutions to address the impacts of climate change
on clean water access. For more information, please visit
https://www.cadizinc.com.
###
Forward-Looking Statements
This release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and such
forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the use of words
such as "will," "intends," "anticipates," "believes," "estimates,"
"projects," "forecasts," "expects," "plans," and "proposes." These
forward-looking statements include, without limitation, statements
regarding Cadiz's expectation that the parties to the LOA will
enter into binding definitive agreements and the transactions
contemplated by the LOA will be consummated, that Cadiz will
realize the anticipated benefits from any such binding definitive
agreements with the Lead Investor, and that Cadiz will derive the
anticipated financial benefits of the Mojave Groundwater Bank
project. Although Cadiz believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. Factors
that could cause actual results or events to differ materially from
those reflected in Cadiz's forward-looking statements include the
risk that the parties to the LOA do not enter into binding
definitive agreements or that, if such definitive agreements are
entered into, any approvals by the Lead Investor's shareholders
required to consummate the transactions contemplated by the LOA may
not be obtained and the requisite funding in excess of the amount
committed by the Lead Investor for construction of facilities for
the Mojave Groundwater Bank may not be available on terms
satisfactory to the parties or in sufficient amounts, or the
progress of the Mojave Groundwater Bank project may not proceed as
planned, or the definitive agreements entered into, if any, could
be terminated prior to consummation of the transactions
contemplated thereby, and other factors and considerations detailed
in Cadiz's Securities and Exchange Commission filings including its
annual report on Form 10-K for the year ended December 31, 2023 and subsequent Exchange Act and
Securities Act filings. The Company undertakes no obligation to
publicly update any forward-looking statement, whether written or
oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise, except as
required by law.
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SOURCE Cadiz, Inc.
