Note 1 - Basis of Presentation	3 Months Ended
Mar. 31, 2017
Notes to Financial Statements
Significant Accounting Policies [Text Block]	NOTE 1 – BASIS OF PRESENTATION The Condensed Consolidated Financial Statements have been prepared by Cadiz Inc., also referred to as “Cadiz” or “the Company”, without audit and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Form 10 -K for the year ended December 31, 2016. The foregoing Condensed Consolidated Financial Statements include the accounts of the Company and contain all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair statement of the Company’s financial position, the results of its operations and its cash flows for the periods presented and have been prepared in accordance with generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates and such differences may be material to the financial statements. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of results for the entire fiscal year ending December 31, 2017. Liquidity The Condensed Consolidated Financial Statements of the Company have been prepared using accounting principles applicable to a going concern, which assumes realization of assets and settlement of liabilities in the normal course of business. The Company incurred losses of $7.2 million for the three months ended March 31, 2017, and $8.8 million for the three months ended March 31, 2016. The Company had working capital of $7.1 million at March 31, 2017, and used cash for its operations of $2.6 million for the three months ended March 31, 2017. Cash requirements during the three months ended March 31, 2017 primarily reflect certain administrative costs related to the Company’s water project development efforts. Currently, the Company’s sole focus is the development of its land and water assets. On May 1, 2017, the Company entered into a new $60 million credit agreement with funds affiliated with Apollo Global Management, LLC (“Apollo”) that will replace and refinance the Company’s existing $45 million senior secured mortgage debt (“Senior Secured Debt”) and provide $15 million of new senior debt to fund immediate construction related expenditures. The transaction is expected to close within 45 days of the signing date. The Company’s Senior Secured Debt and its 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 associated with the loans 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 March 31, 2017, the Company was in compliance with its debt covenants. The Company’s cash resources, together with the new cash resources to be provided by the Apollo transaction as described above, provide the Company with sufficient funds to meet its working capital needs for a period beyond one year from this quarterly report issuance date. The Company may meet working capital requirements beyond this period through a variety of means, including construction financing to be provided by the Apollo conditional commitment letter which is described below in Note 6 – Subsequent Events, equity or debt placements, through the sale or other disposition of assets or reductions in operating costs. Equity placements may be made using our existing shelf registration. Equity placements, if made, would be undertaken only to the extent necessary, so as to minimize the dilutive effect of any such placements upon the Company’s existing stockholders. Limitations on the Company’s liquidity and ability to raise capital may adversely affect it. Sufficient liquidity is critical to meet the Company’s resource development activities. Although the Company currently expects its sources of capital to be sufficient to meet its near-term liquidity needs, there can be no assurance that its liquidity requirements will continue to be satisfied. If the Company cannot raise needed funds, it might be forced to make substantial reductions in its operating expenses, which could adversely affect its ability to implement its current business plan and ultimately its viability as a company. Supplemental Cash Flow Information The Company is required to pay 50% of all future quarterly interest payments in cash or stock on the Senior Secured Debt, rather than in accretion to principal. No other payments are due on the corporate secured debt or convertible notes prior to their maturities. During the three months ended March 31, 2017, approximately $433 thousand in interest payments on the corporate secured debt was paid in stock. As result, 29,706 shares of common stock were issued to the lenders. During the three months ended March 31, 2017, approximately $1.5 million in convertible notes were converted by certain of the Company’s lenders. As a result, 212,476 shares of common stock were issued to the lenders. Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted In May 2014, the FASB issued an accounting standards update on revenue recognition including enhanced disclosures. Under the new standard, revenue is recognized when (or as) a good or service is transferred to the customer and the customer obtains control of the good or service. On July 9, 2015, the FASB approved a one -year deferral, updating the effective date to January 1, 2018. The Company is currently evaluating this new guidance, and expects this new standard will not have a material impact on the consolidated financial statements. In February 2016, the FASB issued an accounting standards update related to lease accounting including enhanced disclosures. Under the new standard, a lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. Lessees will classify leases with a term of more than one year as either operating or finance leases and will need to recognize a right-of-use asset and a lease liability. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. This guidance is effective January 1, 2019, but early adoption is permitted. The Company is currently evaluating this new guidance and cannot determine the impact of this standard at this time. In August 2016, the FASB issued an accounting standards update which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, but early adoption is permitted. The Company is currently evaluating this new guidance and cannot determine the impact of this standard at this time. In January 2017, the FASB issued an accounting standards update which eliminates Step 2 from the goodwill impairment test. Entities should perform their goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating this new guidance and cannot determine the impact of this standard at this time. In January 2017, the FASB issued an accounting standards update which clarifies the definition of a business and provides guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for annual periods beginning after December 15, 2017, and interim periods within those periods, with early adoption permitted. The Company is currently evaluating this new guidance and cannot determine the impact of this standard at this time. Accounting Guidance Adopted In March 2016, the FASB issued an accounting standards update to simplify the accounting for share-based payments. Under this new guidance, the tax effects related to share based payments are recorded through the income statement. Previously, tax benefits in excess of compensation cost ("windfalls") are recorded in equity, and tax deficiencies ("shortfalls") are recorded in equity to the extent of previous windfalls, and then to the income statement. This guidance is effective January 1, 2017, but early adoption is permitted. The new standard also revised reporting on the statement of cash flows. The Company adopted this guidance on January 1, 2017, and the new standard did not have a material impact on the Company’s condensed consolidated financial statements.

NOTE

– BASIS OF PRESENTATION

The Condensed Consolidated Financial Statements have been prepared by Cadiz Inc., also referred to as “Cadiz” or “the Company”, without audit and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Form

-K for the year ended

December

31,

2016.

The foregoing Condensed Consolidated Financial Statements include the accounts of the Company and contain all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair statement of the Company’s financial position, the results of its operations and its cash flows for the periods presented and have been prepared in accordance with generally accepted accounting principles.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates and such differences

may

be material to the financial statements. The results of operations for the

three

months ended

March

31,

2017

are not necessarily indicative of results for the entire fiscal year ending

December

31,

2017.

Liquidity

The Condensed Consolidated Financial Statements of the Company have been prepared using accounting principles applicable to a going concern, which assumes realization of assets and settlement of liabilities in the normal course of business. The Company incurred losses of

$7.2

million for the

three

months ended

March

31,

2017,

and

$8.8

million for the

three

months ended

March

31,

2016.

The Company had working capital of

$7.1

million at

March

31,

2017,

and used cash for its operations of

$2.6

million for the

three

months ended

March

31,

2017.

Cash requirements during the

three

months ended

March

31,

2017

primarily reflect certain administrative costs related to the Company’s water project development efforts. Currently, the Company’s sole focus is the development of its land and water assets.

May

2017,

the Company entered into a new

$60

million credit agreement with funds affiliated with Apollo Global Management, LLC (“Apollo”) that will replace and refinance the Company’s existing

$45

million senior secured mortgage debt (“Senior Secured Debt”) and provide

$15

million of new senior debt to fund immediate construction related expenditures. The transaction is expected to close within

days of the signing date.

The Company’s Senior Secured Debt and its 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 associated with the loans 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

March

31,

2017,

the Company was in compliance with its debt covenants.

The Company’s cash resources, together with the new cash resources to be provided by the Apollo transaction as described above, provide the Company with sufficient funds to meet its working capital needs for a period beyond

one

year from this quarterly report issuance date. The Company

may

meet working capital requirements beyond this period through a variety of means, including construction financing to be provided by the Apollo conditional commitment letter which is described below in Note

– Subsequent Events, equity or debt placements, through the sale or other disposition of assets or reductions in operating costs. Equity placements

may

be made using our existing shelf registration. Equity placements, if made, would be undertaken only to the extent necessary, so as to minimize the dilutive effect of any such placements upon the Company’s existing stockholders.

Limitations on the Company’s liquidity and ability to raise capital

may

adversely affect it. Sufficient liquidity is critical to meet the Company’s resource development activities. Although the Company currently expects its sources of capital to be sufficient to meet its near-term liquidity needs, there can be no assurance that its liquidity requirements will continue to be satisfied. If the Company cannot raise needed funds, it might be forced to make substantial reductions in its operating expenses, which could adversely affect its ability to implement its current business plan and ultimately its viability as a company.

Supplemental Cash Flow Information

The Company is required to pay

50%

of all future quarterly interest payments in cash or stock on the Senior Secured Debt, rather than in accretion to principal. No other payments are due on the corporate secured debt or convertible notes prior to their maturities. During the

three

months ended

March

31,

2017,

approximately

$433

thousand in interest payments on the corporate secured debt was paid in stock. As result,

29,706

shares of common stock were issued to the lenders.

During the

three

months ended

March

31,

2017,

approximately

$1.5

million in convertible notes were converted by certain of the Company’s lenders. As a result,

212,476

shares of common stock were issued to the lenders.

Recent Accounting Pronouncements

Accounting Guidance Not Yet Adopted

May

2014,

the FASB issued an accounting standards update on revenue recognition including enhanced disclosures. Under the new standard, revenue is recognized when (or as) a good or service is transferred to the customer and the customer obtains control of the good or service. On

July

2015,

the FASB approved a

one

-year deferral, updating the effective date to

January

2018.

The Company is currently evaluating this new guidance, and expects this new standard will not have a material impact on the consolidated financial statements.

February

2016,

the FASB issued an accounting standards update related to lease accounting including enhanced disclosures. Under the new standard, a lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. Lessees will classify leases with a term of more than

one

year as either operating or finance leases and will need to recognize a right-of-use asset and a lease liability. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. This guidance is effective

January

2019,

but early adoption is permitted. The Company is currently evaluating this new guidance and cannot determine the impact of this standard at this time.

August

2016,

the FASB issued an accounting standards update which eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on

eight

specific cash flow issues. This guidance is effective for fiscal years beginning after

December

15,

2017,

and interim periods within those fiscal years, but early adoption is permitted. The Company is currently evaluating this new guidance and cannot determine the impact of this standard at this time.

January

2017,

the FASB issued an accounting standards update which eliminates Step

from the goodwill impairment test. Entities should perform their goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The amendments in this update are effective prospectively during interim and annual periods beginning after

December

15,

2019,

with early adoption permitted. The Company is currently evaluating this new guidance and cannot determine the impact of this standard at this time.

January

2017,

the FASB issued an accounting standards update which clarifies the definition of a business and provides guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for annual periods beginning after

December

15,

2017,

and interim periods within those periods, with early adoption permitted. The Company is currently evaluating this new guidance and cannot determine the impact of this standard at this time.

Accounting Guidance Adopted

March

2016,

the FASB issued an accounting standards update to simplify the accounting for share-based payments. Under this new guidance, the tax effects related to share based payments are recorded through the income statement. Previously, tax benefits in excess of compensation cost ("windfalls") are recorded in equity, and tax deficiencies ("shortfalls") are recorded in equity to the extent of previous windfalls, and then to the income statement. This guidance is effective

January

2017,

but early adoption is permitted. The new standard also revised reporting on the statement of cash flows. The Company adopted this guidance on

January

2017,

and the new standard did not have a material impact on the Company’s condensed consolidated financial statements.