SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 26, 2006
CADIZ INC.
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-12114 77-0313235
(Commission File Number) (IRS Employer Identification No.)
777 South Figueroa Street, Suite 4250, Los Angeles 90017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (213) 271-1600
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On June 26, 2006 the Company (the "Company") entered into a
credit agreement with Peloton Partners LLP ("Peloton") to provide
a new long-term debt facility to the Company. The transactions
contemplated by this Credit Agreement closed on June 29, 2006.
Prior to the closing of this transaction, Peloton held
approximately 9% of the Company's outstanding common shares.
Under the terms of this financing arrangement, Peloton
(through an affiliate) and other participating lenders have
invested $36.375 million in a five year zero coupon secured
convertible loan with an initial interest rate of 5% per annum
After three years, the interest rate will increase to 6% per
annum for the remainder of the term. At the lenders' option, $10
million of principal and accrued interest thereon may be
converted into Cadiz common stock at $18.15 per share, and
$26.375 million of principal and accrued interest thereon may be
converted into Cadiz common stock at $23.10 per share. These
conversion prices are set for the entire term of the loan,
subject only to normal adjustments in the event of stock splits,
stock dividends and other recapitalization events, and subject to
further adjustment in the event of a change in control of the
company (whereupon the conversion price will be adjusted pursuant
to a formula which takes into account the amount of time that the
loan has been outstanding and the value of the Company's stock at
the time of the change of control, but in no event shall the
adjusted conversion price be less than $16.50 per share).
The loan is secured by substantially all of the Company's
assets and provides the lenders with certain demand and piggyback
registration rights. The credit agreement also allows Peloton to
designate one member of the Cadiz board of directors.
The proceeds of the new loan have been used by the Company
retire its existing secured credit facility with ING Capital LLC
(the "ING Loan"), with the remainder to be used to supplement its
working capital.
ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
The information required by this item regarding the
repayment in full of the Company's senior revolving credit
facility with ING is included under Item 1.01 and incorporated by
reference into this Item 1.02.
With the pay off and termination of the ING Loan, the
Company will incur a one-time non-cash charge of approximately
$877,000 for the write-off of certain deferred financing costs
and prepaid interest expense associated with the terminated
credit facility.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN
OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT
OF A REGISTRANT
The information required by this item regarding the creation
of a direct financial obligation is included under Item 1.01 and
incorporated by reference into this Item 2.03.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES
The information required by this item regarding the
unregistered sales of equity securities is included under Item
1.01 and incorporated by reference into this Item 3.02.
The issuance of convertible debt as described in Item 1.01
above was not registered under the Securities Act of 1933, as
amended (the "Securities Act"), but was exempt from the
registration requirements of the Securities Act by virtue of
Section 4(2) of the Securities Act as the transactions did not
involve public offerings, the number of investors was limited,
the investors were provided with information about us, and we
placed restrictions on the resale of the securities.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Cadiz Inc.
By: /s/ O'Donnell Iselin II
-------------------------
O'Donnell Iselin II
Chief Financial Officer
Dated: June 30, 2006