XML 59 R12.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Note 6 - Long-Term Debt | 12 Months Ended
--- | ---
Dec. 31, 2013
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] | NOTE 6 – LONG-TERM DEBT At December 31, 2013 and 2012, the carrying amount of the Company’s outstanding debt is summarized as follows (dollars in thousands):
|  | December 31, |
|  | 2013 |  |  | 2012 |
Zero coupon secured convertible term loan |  | $ | - |  |  | $ | 65,262 |
Senior secured debt due March 5, 2016 Interest accrues at 8% per annum |  |  | 32,055 |  |  |  | - |
Senior secured debt due June 30, 2017 Interest accrues at 8% per annum |  |  | 10,138 |  |  |  |  |
Convertible note instrument due March 5, 2018 Interest accrues at 7% per annum |  |  | 56,638 |  |  |  | - |
Other loans |  |  | 39 |  |  |  | 50 |
Debt discount, net of accumulated accretion |  |  | (2,442 | ) |  |  | (2,051 | )
|  |  | 96,428 |  |  |  | 63,261 |
Less current portion |  |  | 11 |  |  |  | 11 |
|  | $ | 96,417 |  |  | $ | 63,250 |
The carrying value of the Company’s debt, before discount, approximates fair value. The fair value of the Company’s debt (Level 2) is determined based on an estimation of discounted future cash flows of the debt at rates currently quoted or offered to the Company for similar debt instruments of comparable maturities by its lenders. Pursuant to the Company’s loan agreements, annual maturities of long-term debt outstanding on December 31, 2013, are as follows:
Year Ending December 31 |  | ($ in thousands) |
2014 |  | $ | 11 |
2015 |  |  | 11 |
2016 |  |  | 32,066 |
2017 |  |  | 10,144 |
2018 |  |  | 56,638 |
|  | $ | 98,870 |
In June 2006, the Company raised $36.4 million through the private placement of a five-year zero coupon convertible term loan with Peloton, as administrative agent, and an affiliate of Peloton and another investor, as lenders (the “Term Loan”). In April 2008, the Company was advised that Peloton’s interest in the Term Loan had been assigned to an affiliate of Lampe Conway and Company LLC, and Lampe Conway subsequently replaced Peloton as administrative agent of the loan. In June 2009, the Company completed arrangements to amend the Term Loan and extend its maturity to June 2013. This facility was further modified as to certain of its conversion features in October 2010, in connection with a new $10 million working capital facility with the existing lenders. In October 2012, the Company increased the capacity of its existing Term Loan facility with an additional $5 million facility. As a result of this transaction, the Company issued warrants to lenders to purchase shares of common stock. The value of the warrants totaled approximately $533 thousand and was recorded as additional debt discount with a corresponding amount recorded as additional paid-in capital. On March 5, 2013, the Company completed arrangements with its senior lenders to refinance the Company’s existing $66 million corporate term debt. The new arrangements established two separate debt instruments, a $30 million senior secured mortgage loan due in three years, and a new $53.5 million in new convertible notes due in five years, with no principal or interest payments due on either instrument until maturity. The new debt instruments replaced all existing term debt as of March 5, 2013, and provided $17.5 million in new working capital to fund the Company’s current operations, including pre-construction activities related to the Project. The major components of the refinancing included:
| ● | A $30 million senior term loan secured by the underlying assets of the Company, including landholdings and infrastructure (the “Senior Secured Debt”). The instrument accrues interest at 8% per annum and requires no principal or interest payments before maturity on March 5, 2016. Prepayment would be mandatory following any asset sale or voluntarily at the Company’s option, subject to a premium. The Senior Secured Debt has a senior position to any other Company debt instrument.
| ● | A $53.5 million in convertible notes (the “Convertible Notes”). The Convertible Notes provide for convertibility into the Company’s common stock at a price of $8.05 per share. Interest accrues at 7% per annum, with no principal or interest payments required before maturity on March 5, 2018. This instrument has a junior position to the Senior Secured Debt.
| ● | $17.5 million in new working capital provided as part of the Convertible Notes issuance to fund Company operations.
The March 2013 credit facility does not constitute a troubled debt restructuring and was accounted for as a debt extinguishment under ASC 470-50. The fair value of the new credit facility was recorded at face value. The Company recorded a loss on extinguishment of debt in the amount of $1.06 million which consisted of the write-off of unamortized debt discount, unamortized debt issuance costs and fees paid to the lenders. The Company incurred $1.2 million of legal expenses and placement agent fees related to the negotiation and documentation of the refinancing which was capitalized and is being amortized over the life of the Convertible Notes. In July 2013, the majority interest of the Senior Secured Debt was acquired in a private transaction by MSD Credit Opportunity Master Fund, L.P. (“MSD Credit”). On October 30, 2013, the Company entered into an agreement (“Credit Agreement”) with its new majority senior lender, MSD Credit Opportunity Master Fund, L.P. (“MSD Credit”), to increase its existing $30 million senior secured mortgage loan by $10 million to fund additional working capital. MSD Credit previously acquired the majority interest of the $30 million portion of the debt in a private transaction. The new $10 million tranche accrues interest at 8% and requires no principal or interest payments prior to maturity on June 30, 2017. The new $10 million and the original $30 million are both secured by the underlying assets of the Company, including all landholdings and infrastructure. The Credit Agreement also now provides that in the case of certain asset sales unrelated to the Water Project, the Company would retain for working capital purposes up to 50% of the first $10 million of sales, with the remainder requiring mandatory prepayment of the Senior Secured Debt. In addition, as part of this transaction, the Company issued 700,000 shares of Cadiz Inc. common stock to MSD Credit subject to certain restrictions on resale. The fair value of the shares of common stock issued totaled approximately $2.4 million, which was recorded as additional debt discount with a corresponding amount recorded as additional paid-in capital. Such debt discount is accreted to the redemption value of the instrument over the remaining term of the loan as additional interest expense. In addition, the Company incurred $110,000 of lender fees which was recorded as additional debt discount and is being amortized over the remaining term of the loan. Both the Senior Secured Debt and the Convertible Notes contain representations, warranties and covenants that are typical for agreements of this type, including restrictions that would limit the Company’s ability to incur additional indebtedness, incur liens, pay dividends or make restricted payments, dispose of assets, make investments and merge or consolidate with another person. However, while there are affirmative covenants, there are no financial maintenance covenants and no restrictions on the Company’s ability to issue additional common stock to fund future working capital needs. The debt covenants were negotiated by the parties with a view towards the Company’s operating and financial condition as it existed at the time the agreements were executed. At December 31, 2013, the Company was in compliance with its debt covenants.

X
- Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration