Cadiz Inc. (NASDAQ:CDZI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On December 27, 2018, the Company entered into an amendment (the “Amendment”) to its option agreement (“Option Agreement”) with El Paso Natural Gas (“EPNG”) to purchase for $20 million a 120-mile segment of 30″ idle steel pipeline from Barstow to Wheeler Ridge, California. The Option Agreement, as amended, allows the Company to purchase the 120-mile pipeline segment with an initial payment of $2 million prior to December 31, 2018 and a subsequent payment of $18 million (“Deferred Payment”). The Deferred Payment would be due within 30 days of satisfaction of certain conditions precedent by EPNG. Following entry into the Amendment, the Company exercised the option for the initial consideration of $2 million and entered into a purchase agreement for the 120-mile pipeline in substantially the form of Exhibit B to the original Option Agreement attached as Exhibit 10.28 to the Company’s Form 10-K for the fiscal year ended December 31, 2011.
The 120-mile pipeline, which will extend the Company’s existing 30″ steel pipeline ownership to approximately 220-miles, is capable of conveying up to 30,000 acre-feet of water per year within San Bernardino, Los Angeles, and Kern Counties in Southern California.
About Cadiz Inc. (NASDAQ:CDZI)
Cadiz Inc. is a land and water resource development company with approximately 45,000 acres of land in three areas of eastern San Bernardino County, California. The Company’s primary business is to acquire and develop land with water resources for various uses, including groundwater supply, groundwater storage and agriculture. It is focused on the development of the Cadiz Valley Water Conservation, Recovery and Storage Project, which captures and conserves millions of acre-feet of native groundwater being lost to evaporation from the aquifer system beneath its approximately 34,000-acre property in the Cadiz and Fenner valleys of eastern San Bernardino County and deliver it to water providers throughout Southern California. In addition to the Cadiz/Fenner Valley property, it also owns approximately 11,000 additional acres in the eastern Mojave Desert portion of San Bernardino County, California at two separate properties. It owns over 2,000 acres near Danby Dry Lake in Ward Valley.