Cadiz Inc. (CDZI) Earnings Call Transcript & Summary

Will the meeting please come to order. Good morning. I'm Susan Kennedy, Chair of the Board of Directors of the company. I will be acting as Chair of the meeting. Welcome to the 2022 Annual Meeting of Stockholders. We wish to express our thanks for your attendance today at our virtual meeting. I'd like to introduce the following officers and directors of the company who are attending today's meeting. Board members, Keith Brackpool, Steve Courter, Maria Echaveste, Geoff Grant, Winston Hickox, Kenneth Lombard, Carolyn Webb de Macías, Scott Slater, a Board member and our CEO; and Stan Speer, our CFO. Also attending are Michael Ruble, who is a representative of PricewaterhouseCoopers, the company's auditors and Howard Unterberger, the company's General Legal Counsel. Stan Speer, our CFO, will act as Secretary of the meeting, and I have asked Courtney Degener to act as inspector of the election. As a reminder, validated stockholders in attendance may ask questions via the designated field in the virtual meeting platform. Questions submitted prior to the conclusion of the meeting will be monitored by the company. The company will arrange for all submitted questions to receive a response promptly after the meeting. I'll now ask Inspector of Election to present her quorum report to the meeting.

According to the stockholders list dated May 23, 2022, issued by Continental Stock Transfer & Trust Company, the company's transfer agent, the number of shares of common stock of the company issued and outstanding on May 23, 2022, the record date of said meeting was 50,770,275 with the right to 1 vote per share and the holder of the company's Series 1 preferred stock issued and outstanding on May 23, 2022, have the right to [ 99,351 ] votes, representing an aggregate number of votes equal to 50,869,626. The number of votes cast with respect to shares represented and voting in person and by proxy at said meeting was 31,319,571.

As 25,434,814 voting shares are necessary for a quorum, based on the inspector's report, I declare that a quorum is present and the meeting is properly constituted for the transaction of business. I will now ask our legal counsel, Mr. Unterberger to summarize the legal actions proposed for this meeting and to administer the formal portion of the meeting.

The actions to be taken at today's meeting are as described in the proxy statement, which was made available to stockholders. The company has received the affidavit of mailing from the company's transfer agent, which I will now introduce into the minutes of the meeting. In as much as applicable rules require disclosures to be given to stockholders regarding any proposal to be considered by stockholders and as no other matters were submitted in a manner prescribed for in the company's bylaws and other applicable law, no other matters will be considered during the formal portion of this meeting. The matters to be considered at this meeting are: The election of 9 members to the Board of Directors of the company; the adoption of an amendment to the company's certificate of incorporation to provide additional opportunity for stockholders to call special meetings; the approval of amendment #1 to the Cadiz Inc. 2019 equity incentive plan to increase the total number of shares reserved for issuance under the plan; the ratification of the selection by the Audit Committee of the Board of Directors of PricewaterhouseCoopers as the company's independent auditors for fiscal year 2022; and an advisory vote on executive compensation as disclosed in the proxy materials. Holders of the company's common stock as of May 23, 2022, are entitled to 1 vote per share. Followers of the preferred stock are entitled to that number of votes equal to the number of shares of preferred stock held at the time the shares are voted multiplied by the voting ratio then applicable to preferred stock, which is currently 301.98 votes for each share of preferred stock. Holders of the company's common stock and the company's preferred stock will vote together as a single class on each proposal. Holders of depository shares representing interest in the Series A preferred stock currently have no voting rights. The candidates for director receiving a plurality of the votes of the shares present today or represented by proxy will be elected. As to Proposal 2, an affirmative vote of the majority of the outstanding shares entitled to vote at this annual meeting is required for the passage of the stockholder proposal to adopt an amendment to the company's certificate of incorporation to provide additional opportunity for stockholders to call special meetings. An affirmative vote of a majority of the shares present today or represented by proxy in voting is required for the approval of amendment #1 to the Cadiz Inc. 2019 Equity Incentive Plan, Proposal 3. The ratification of the company's independent registered public accounting firm, Proposal 4, and the passage of the nonbinding advisory resolution approving the compensation of the company's named executive officers, Proposal 5. Because Proposal 2 requires the majority of outstanding shares entitled to vote on the proposal to pass an abstention, because it is not a vote for, will have the effect of a negative vote with respect to that proposal. Because proposals 3, 4 and 5 require a majority of the shares present in person or by proxy at the meeting and entitled to vote on the proposal to pass an abstention because it is not a vote for, we'll have the effect of a negative vote with respect to these proposals. In instances where brokers are prohibited from exercising discretionary authority for beneficial owners who have not returned a proxy, so-called broker non-votes, those shares will be treated as neither a vote for nor a vote against the proposals and therefore, will have no effect on the vote on proposals 1, 3, 4 and 5, but will have the effect of a negative vote with respect to proposal 2. Proxies have been delivered by Scott Slater and Stan Speer, as proxy holders to the Inspector of Election. Any stockholder who has not yet voted or wishes to change their vote, may do so by clicking on the Voting button on the virtual meeting platform and following the instructions there. Stockholders who have already voted and do not want to change their vote, do not need to take any further action. The polls are now closed. We will be reporting preliminary voting results at today's meeting. Final vote results will be reported in a Form 8-K to be filed within 4 business days. The next order of business is the election of directors. The management nominees are Keith Brackpool, Stephen E. Courter, Maria Echaveste, Geoffrey Grant, Winston Hickox, Susan P. Kennedy, Kenneth T. Lombard, Scott S. Slater, and Carolyn Webb de Macías to serve as directors of the company until the 2023 Annual Meeting of Stockholders or until their successors are elected and qualified. Will the Inspector of Election announce the results of the vote for each director.

Each of the nominees for director has received a plurality of the votes cast and are elected.

Thank you. Mr. Brackpool, Mr. Courter, Ms. Echaveste, Mr. Grant, Mr. Hickox, Ms. Kennedy, Mr. Lombard, Mr. Slater and Ms. Webb de Macías are elected as directors of the company. The next order of business is the consideration of the proposal to adopt an amendment to the company's Certificate of Incorporation to provide additional opportunity for stockholders to call special meetings. The amendment will delete the text of Part D of Article 5, governing the calling of special meetings of stockholders thereof in its entirety and replacing same with intentionally omitted. A discussion of this proposal is included in the proxy statement previously made available to all stockholders. Will the Inspector of Election announce the results of the vote to adopt the amendment to the company's certificate of incorporation.

A majority of the outstanding shares entitled to vote at the meeting have voted in favor of the proposal.

Thank you. The proposal is adopted. The next order of business is the consideration of the proposal to approve amendment #1 to the company's 2019 equity incentive plan to increase the total number of shares reserved for issuance under the plan. A discussion of this proposal is included in the proxy statement previously made available to all stockholders. Will the Inspector of Election announce the results of the vote to approve amendment #1 to the Cadiz Inc. 2019 Equity Incentive Plan.