Has anyone read the 10Q for Q2-2012 ?
On page 6, they state the following:
" The Company had working capital of $1.3 million at June 30, 2012, and used cash in operations of $6.1 million for the six months ended June 30, 2012, and $2.8 million for the six months ended June 30, 2011. "
Then, on page 3, they indicate a shareholder deficit of well over $ 10 million on a tangible asset basis, good will does not count.
Also, on page 3, they list total current liabilities of well over $ 4.4 million. Looks like suppliers are not being paid judging from the high accounts payable and accrued liabilities.
Then, on top of page 27, they state this:
" Based upon our current and anticipated usage of cash resources, in connection with pre-construction activities following approval of the Final Environmental Impact Report, we will require additional working capital commencing during the fourth quarter of fiscal 2012 to meet our cash resource needs from that point forward and to continue to finance our operations until such time as our asset development programs produce revenues. To meet working capital requirements, we will need to seek additional debt or equity financing in the capital markets. Furthermore, to the extent the Term Loan is not converted into common stock by the lenders prior to the final maturity date, we will be required to refinance, extend or otherwise restructure the Term Loan. "
So, what can Brackpool and Shaheen do ? They got the following situation:
1. Shareholder deficit of well over $ 10 million based on tangible assets.
2. Running out of cash.
3. Have not paid many of their suppliers / vendors / consultants
4. The $ 55 million and growing secured zero coupon term loan is due June 2013.
5. Two major lawsuits still open from the Sierra Club and Tetra
6. The senior senator Feinstein is opposed to the water project and has filed a letter of opposition to the Interior department
Bottom line; they are in one hell of a pickle - how will they get out of this mess ?
Sentiment: Strong Sell
I started, but it's really not worth it. You know less about finance than you do about Cadiz. Aside from the fact that your a cynical little toad who asks phony rhetorical questions, there seems little point to correcting your typically filthy little post. Oh crap, guess I have to...
1. your first point about shareholder's deficits and tangible assets are serious gibberish.
2. Cadiz has financed working capital almost every year since 2000 through secondary equity issues, and has been including financing disclaimers like the ones you reprinted (great forensic accounting work though) every quarter in living memory. This year has seen the company make the most significant progress in 12 years. Do you honestly believe, even in furtive little mind, that after supporting this company year after year, that long-suffering shareholders are going to balk at backing a piddly 15mm bucks when the company is on now within sight of full-scale project? As for the larger credit facility (it is not a zero coupon bond, by the way), next's years maturity has again been well-flagged and, unfortunately for your disaster scenario, likewise has seen a dramatic increase in re-financing options with the EIR approval. The bond holder is also a substantial shareholder and likewise supported the company fully to date, before the major breakthroughs of the past 6 months, They has zero interest in seeing any kind of bond event occurring that would handicap the company when they're on the cusp of a project. Truly, your comments are 2 years too late.
3. Cadiz has not missed any vendor, consultant or any other payment, you libelous fantasist.
4. Not only has the Senator been sending the same, basic letter since 2000, but there is a very strong case that with the approval last Friday by the SB board, the Senator lost her last, best chance to interfere with the project. Read the comments released by the board connected with their approval. Never want to count the wicked witch out, but she's certainly proved more toothless than anyone could reasonably imagined a year ago.
How 'do they get out of this pickle?' By continuing to score victories in court, among water agencies and in the capital markets on the way to first water in 2014 while rolling over smarmy twits like you, that's how,
Sentiment: Strong Buy
You clearly work for Cadiz. No sane investor would be in favor a company that did $6K in revenue last quarter. When I easy surpassed the company in gross income, that company shouldn't be in business.
Sentiment: Strong Sell
Hi Deb. This is not really related to the current message thread but I found it interesting that you pointed out (in an earlier post) that "Cadiz water is significantly within state and federal guidelines on everything, including Chromium6". Stating this, you reiterated a typical Cadiz Inc. corporate talking point. This is a correct, albeit not very forward looking statement! Chromium-6 is currently regulated under the 50-micrograms per liter (µg/L) MCL for total chromium, and Cadiz Inc's water is well below this limit. Now, one thing you should realize is that Chromium-1 is actually used as a nutritional supplement. Chromium-6 is used in the production of stainless steel, textile dyes, wood preservation, leather tanning, and as anti-corrosion and conversion coatings. Or, to put it in a different way, Chromium-6 is the highly cancer-causing variant of Chromium. California is the first state in the nation to introduce a PHG (public health goal) specifically for Chromium-6. The PHG was set at 0.02 micrograms per liter (µg/L) which is several orders of magnitude below the 16 (µg/L) in Cadiz Inc.'s water. California is expected to establish an enforceable MCL between July of 2014 and July 2015 (see California Public Department of Health website). Most likely, this MCL will be considerably below the Chromium-6 levels in Cadiz Inc.'s water. What does that mean to the Cadiz Water Project? Do you really think that the MWD will just ignore this serious future risk? The MWD will require costly full treatment of Cadiz Inc's water. This full treatment will cost (based on Cadiz Inc's own estimates) around $250/aft.
OH - WOW, where do I start ? So, I'll take a few of your major points at a time.
" 1. your first point about shareholder's deficits and tangible assets are serious gibberish "
Looks to me that you cannot read a balance statement. Your heroes of Brackpool and Shaheen have taken a net tangible asset shareholder equity for EOY 2009 of $ 7.4 million, changed that in 2010 to a deficit of $ 2.867 million, then reduced that deficit in 2011 to $ 1.883 million - but as of the end of Q2-2012, that net tangible deficit has mushroomed up to $ 10.704 million.
Sorry, you might consider these horrendous numbers as " serious gibberish " but most intelligent folks do not. On second thought, your approach fits in well with so many people in our government who don't see anything wrong with our $ 16 Trillion debt.
" Do you honestly believe, even in furtive little mind, that after supporting this company year after year, that long-suffering shareholders are going to balk at backing a piddly 15mm bucks when the company is on now within sight of full-scale project? "
Judging from you prior posts, I would say that you consider yourself as a " long-suffering shareholder ". Since you consider the $ 15 million as a " piddly " amount, then let me suggest that you open your check book and send Brackpool and Shaheen a check for the $ 15 million - problem solved. - Wait a minute - it just dawned on me - you're just blowing smoke and hot air.
" 3. Cadiz has not missed any vendor, consultant or any other payment, you libelous fantasist."
Clearly, you cannot read a balance statement. The various 10Q's filed by the company tell a different story. Second, if your statement were correct - the only way you would be able to know is if you were one of the key Cadiz employees, who handle the finances - which pretty much tells us all why you are so hard to rebut the critical points made by some us. IOW, you look like the Enron people trying to make the enterprise look better than it is.
" 4. Not only has the Senator been sending the same, basic letter since 2000, but there is a very strong case that with the approval last Friday by the SB board, the Senator lost her last, best chance to interfere with the project. Read the comments released by the board connected with their approval. Never want to count the wicked witch out, but she's certainly proved more toothless than anyone could reasonably imagined a year ago. "
So, let me get this straight - You engage in childish name calling by referring to the senior US Senator Feinstein a " wicked witch ". Wow, that is truly inspiring. Allow me to point out - if indeed Sen Feinstein did oppose this project since 2000 as you state - well guess what - it is working. Your heroes are still not pumping water.
Gotta go now - and stop laughing.
Sentiment: Strong Sell
Still not ready to share that secret math of yours, huh deb? You know, where you can show why the stock is cheap based on actual numbers? I say you don't because you can't - so just make cryptic references and say that others don't understand the financials that you refuse to elaborate on. So why not enlighten us? Why not refute the math we have put forward? Change the mind of a short and he covers, thus pushing up the price. No offense but your post are full of puff. Time to back it up.
Sentiment: Strong Sell
my guess is they will be able to get interim financing - purchasers can prob. resell into mkt, esp. if they can purchase shares at discount to mkt -
the 2013 zero was pushed back to No 2013 (I believe)
anyone know how to follow progress on the two lawsuits mentioned? I'm not sure Sierra has a strong case if it's based on SMWD not being the correct agency to submit the EIR - although the objection of SB water agency members might help -
Tetra might have slightly stronger case, but I'm pretty sure they just want to get a settlement
Bigger hurdles IMO are MWD issues, high cost, and BLM rail right of way issues
They have 70 million shares as being authorized. With a bit over 15 million shares outstanding, seems like they could sell 3 million shares via a secondary at $ 5 and they have the $ 15 million that they are looking for. That would create only about a 20% increase in dilution to the share count.
The one major cost item that has not been addressed here yet is the cost of electricity to pump the water to the CRA.
The EIR states on page 4.3-13 that they expect to consume in excess of 50 million kW-hrs. At a nominal 10c/kW-hr, it will mean that they will spend about $ 5 million per year just to pump the water.
Speaking of electricity for the pumps, if they get the power from the grid, then they will have to pay SCE to run a transmission line from the nearest existing line and that is the 230 kV line that runs about 25 miles to the east of the project. That, however, will cost about $ 50 million or so. OTOH, they could pursue building a small power plant with gas engine generators as it is described in the EIR in tab 4.3 but they will run into lots of hurdles in getting an air permit for those engines. They will have to buy carbon monoxide as well as greenhouse gas credits.
Speaking of air permits, it will take them a minimum 15 to 18 months to get a permit from CEC. Next, no bank will finance this project until they have a solid construction contract with an EPC contractor and until the project has the required permits.
Any way you shake it, financial closure for this project will not occur for another 18 months at a minimum. It would appear that Brackpool and pals recognized this as they are now pursuing the $ 15 million to do just that - get all the permits and battle it out in the courts against Sierra Club and Tetra. If they are lucky, they'll have these legal things sorted out when they get all of their permits.
Sentiment: Strong Sell