Talk about desperation. I guess they couldn't find anyone else. to fund it so had to go back to the "well", pardon the pun. In 6 months mthe money has to be paid back and the share count will be 2% higher on a diluted basis.
How much time does this buy them? 3 months?
Do they have security over all the Chromium-6?
Entry into a Material Definitive Agreement
On October 30, 2012 (the "Closing Date"), Cadiz Inc. (the "Company") amended its existing term debt facility with LC Capital Master Fund, Ltd. and other participating lenders ("the Lenders") to add an additional non-convertible $5 million tranche. The terms of the additional $5 million debt facility are consistent with those of the existing facility. All interest on outstanding balances will continue to accrue at 6%, with no principal or interest payments required before the facility's 2013 maturity date.
In consideration for the additional facility, the Company issued 250,000 Common Stock purchase warrants ("the Warrants") to the Lenders. The Warrants entitle the Lenders to purchase 250,000 shares of Common Stock at an exercise price of $10 per share at any time prior to October 30, 2014.
In August 2012, they announced their pursuit for $ 15 million. Now, they got $ 5 million - OK - better than nothing, which would have meant an immediate ch11 filing but it gives them only a quarter or two of breathing room. Meanwhile, the balance sheet will look even worse - more debt and more shareholder deficits.
Well, this may partially explain why Brackpool et al filed their SEC 14A so late this year. The annual shareholder meeting is now scheduled to occur on Monday, Nov 05, 2012 in their lawyer's offices. One would have to expect that Brackpool would want to have some " good news " in advance of this meeting. First, it is odd why they did not have their ASHM in June this year, as they did in prior years. Regardless, it looks like Brackpool will want to have at least something to placate the shareholders.
It should be noted that Brackpool et al stated in their Q2-2012 10Q, that they were down to $ 1.3 million of working capital as of 06-30-2012. There is no doubt in my mind that they have burned through that $ 1.3 million and then some.
Judging from last year's 10Q filing for Q3-2012, it would appear that they will release their next loss report some time this coming week - most likely AFTER the annual shareholder meeting.
Then, they will have to share with us how much money they burned through this quarter - AND - very importantly - how their accounts payables as increased again. Equally important will be what they will state in the 10Q about their liquidity. In the Q1-2012 10Q, Brackpool et al stated that they will run out of working capital in Q1-2013. Then, in the Q2-2012 they stated that they will run out of working capital in Q4-2012 - sooner than before. Now, let's see what they will have to say about their working capital in this next 10Q.
I was surprised about the recent "material definitive agreement", too. After Cadiz Inc's previous announcement that they would need another $15M to basically get to the point where they would be finally be allowed to go ahead and spent some "real" "three-digit amount of" money (this time for actually building something real, as opposed to just paying themselves outrageously unjustified salaries) I was expecting them to secure the full amount. They also stated that they would generate these $15M in the same way as they had done on many, many occasions before. Apparently this didn't work out this time. Boy, 2013 is gonna be a rough year for this company!
Apparently, LC Capital Master Fund didn't just feed the monkey as they used to do multiple times before, but just gave them a little bit of money, just enough to not kill the whole thing right away (which, I guess, may have potentially destroyed some jobs at LC Capital Master Fund).
It seems to me that "LC Captial Master Fund", which seems to be the guardian and last line of defense of Cadiz Inc right know, is well-versed in "guiding" publicly traded companies that they are invested in "safely and professionally" into bankruptcy, thus losing all of their investor's money.
Here is another example of "LC Capital Master Fund's" recent "accomplishments" regarding a formerly publicly traded company called "Particle Drilling (PDRT)" that they were an investor of :
[In pursuit of developing the system, Particle Drilling has posted cumulative losses of about $45 million since the company’s formation in early 2003. A reverse merger transaction in 2005 took the company public. Particle Drilling CEO Jim Terry says he filed the bankruptcy papers as a last resort after other capital-raising options were exhausted. He says he made his decision after LC Capital Master Fund Ltd., a New York hedge fund, forwarded only $60,000 of a promised $400,000.
Says Terry: “That put us behind the eight ball, so we had to furlough everybody.”]
Does that pattern look familiar? Well, it looks as if "LC Capital Master Fund" knows how to pick a winner! That's the kind of fund company that you would want as an investor.