Note 12 - Commitments And Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 12 – COMMITMENTS AND CONTINGENCIES

The Company leases equipment and office facilities under operating leases that expire through January 2016. Aggregate rental expense under all operating leases was approximately $219,000, $343,000 and $338,000 in the years ended December 31, 2013, 2012 and 2011, respectively. At December 31, 2013, the future minimum rental commitments under existing non-cancelable operating leases are as follows:

Year Ending December 31	($ in thousands)
2014	$	186
2015		176
	$	362

In the normal course of its agricultural operations, the Company handles, stores, transports and dispenses products identified as hazardous materials. Regulatory agencies periodically conduct inspections and, currently, there are no pending claims with respect to hazardous materials.

The Company entered into a Services and Exclusivity Agreement with Layne Christensen Company (“Layne”) on November 2, 2009. The agreement provides that the Company will contract exclusively with Layne for certain water related services, including drilling of boreholes, drilling of monitoring wells, completion of test wells, completion of production wells, and completion of aquifer, storage and recovery wells. In exchange for the Services and Exclusivity Agreement, Layne has agreed to forego $923,000 for work performed. This amount continues to be recorded as an other long-term liability as of December 31, 2013, and will be credited toward future work performed during the construction phase of the Water Project.

Pursuant to cost sharing agreements that have been entered into by participants in the Company’s Water Project, $750,000 in funds have offset costs incurred in the environmental analysis of the Water Project. These funds may either be reimbursed or credited to participants participation in the Water Project and, accordingly, are fully reflected as deferred revenue as of December 31, 2013.

In California, third parties have the ability to file litigation challenging the approval of a water project. As a result, the Company is and expects to continue to be party to various legal proceedings arising in the general course of its business, including, in particular, the development of the Water Project. 

The Company is currently named as a real party in interest in six (6) lawsuits related to the Water Project approvals granted last year by the Santa Margarita Water District and County of San Bernardino in accordance with the California Environmental Quality Act (“CEQA”). The six lawsuits have been brought by two plaintiffs and have been coordinated in Orange County Superior Court. The cases seek various forms of relief, but are primarily focused on causing a reconsideration of the environmental documents and limitation of the Project approvals. Administrative trial for the six cases began in December 2013 and was carried over until later January 2014. Final arguments in the cases concluded on February 5, 2014. Rulings on all six cases are expected in the second quarter of 2014. The Company cannot predict the outcome of any of the proceedings. Three (3) additional cases filed last year have been dismissed and are no longer pending, including one case dismissed in October 2013.

There are no other material legal proceedings pending to which the Company is a party or of which any of the Company’s property is the subject.