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CADIZ INC. (NASDAQ: CDZI)

CADIZ INC. (NASDAQ: CDZI). B. Riley & Co. 15 th Annual Investor Conference May 2014. May 2014

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CADIZ INC. (NASDAQ: CDZI)

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  1. CADIZ INC. (NASDAQ: CDZI) B. Riley & Co. 15th Annual Investor Conference May 2014

  2. May 2014 This presentation contains forward-looking statements that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Cadiz Inc. Safe Harbor Agreement

  3. Cadiz Inc. • California company founded in 1983. • Land and water rights at 3 locations in San Bernardino County. • 20-year organic farming operation. • Developing water supply and groundwater storage projects. PIUTE CADIZ DANBY CRA

  4. 1,300 sq. mile watershed in eastern San Bernardino County. 34,000 acres of private land. Approximately 20 million acre-feet (AF) of water in storage in the alluvial aquifers. Water being lost to evaporation at highly saline dry lakes. 66 Bristol Dry Lake Cadiz Dry 5 Miles Lake Cadiz Valley Water Resource New York Mountains Providence Mountains Fenner Valley Granite Mountains Orange Blossom Wash

  5. Cadiz Valley Operations • 20 yr. Ongoing Farming Operation – • 9,600 Acres zoned for agricultural development. • 1,600 Acres currently developed;grapes, lemons and seasonal vegetables. • Network of 8 production wells and 10 monitoring wells. • Housing and equipment for workforce of over 300. • Annual use of 3 - 5,000 AF/year, with static groundwater levels and no impacts. • Water Project – • Site of Cadiz Valley Water Conservation, Recovery and Storage Project: Approved for 50,000 AF/Y of water deliveries.

  6. Other Assets • PIUTE PROPERTY (9,000 acres) • Undeveloped with groundwater resources • Suitable for grazing, agriculture, solar • Site of Land Conservation Bank • DANBY PROPERTY (2,000 acres) • Undeveloped with groundwater resources • Suitable for agriculture and Water Project facilities • EPNG PIPELINE • 96-mile 30” steel pipeline, water delivery capacity 20 – 30,000 AF/year • Cadiz Property NW to Barstow, CA.

  7. Key Drivers of Development Strategy • Rising Price of Water in California - • Rates have historically increased approx. 6% per year. • Institutional Limits on Traditional Water Supplies - • 3 primary So. Cal import systems not delivering at capacity. • Lack of Cost-Effective Alternatives - • SF/SJ Bay Delta “Fix” (NoCal to SoCal) cost estimated $25 billion & only nominally increases annual deliveries. • New water supplies cost $1000+ AF/year. • Identified surface storage alternatives estimated between $2 -$3 billion dollars to construct.

  8. Cadiz Valley Water Conservation, Recovery & Storage Project

  9. Phase 1 - Project Design • Intercept and conserve groundwater before it reaches dry lakes. • Put conserved water to beneficial use in So. California water system. • Without intervention, billions of gallons of water lost

  10. Expand the existing agricultural well field by approximately 12 new wells. Construct 43-mile buried pipeline to Colorado River Aqueduct (“CRA”) within Arizona & California Railroad right-of-way. Natural gas power source for the well field and ancillary facilities. Capital cost projected at $200-$250 million. O & M from site to CRA estimated at $75 AF. Phase 1 – Facilities

  11. Phase 1 - Permitting Process • Public CEQA review process conducted in 2011 – 2012. Final EIR responds to every public comment and summarizes that Project operations will avoid any significant impacts to desert resources • July 31, 2012: Final EIRcertified by Santa Margarita Water District. • October 1, 2012: San Bernardino County Board of Supervisors approved Groundwater Management, Mitigation and Monitoring Plan and the withdrawal of 50,000 AF/yr.

  12. Phase 1 - Litigation Phase • Litigation filed in Q4 2012 by Project opponents challenging approvals and related permits. • 2 petitioners dismissedin 2013 (Labor and Ratepayer groups); • 2 petitioners went to trial 2013-2014 (Mining and Environmental groups) in 6 separate cases. Cases coordinated before one Judge in OC Superior Court. • May 2014: Judge issued ruling denying all 6 claims and upholding environmental approvals. • Cases could be subject to appeal by end of Q2 2014.

  13. Phase 1- Participants • 10% of Project capacity under sales agreement; • 70% under option agreement. • Arizona & California Railroad will receive water and power for critical railroad purposes. • Complete buyer group by Q4 2014 - Option agreements to be converted to sales agreement and new participants to enter project.

  14. Project Pricing Structure • Option Agreement currently provides for: • Water Supply Component • $775* AF delivered to Colorado River Aqueduct (“CRA”) • 5% cap on average annual escalation • Storage Component • Carry-over storage up to $1,500* AF • Annual storage administrative fee $20* AF *2010Dollars

  15. Comps - Water Supply Alternatives

  16. Phase 1 – Return on Investment • Company has invested over $200m to develop the assets to implement the Project. • Projected cash flows would cover upfront capital investment and provide single digit rate of return consistent with other public/private water development projects.   • After operating costs and cap-ex fees, cash flows are estimated to be approximately $500-$600/AF (plus 5% inflator).(1) • Phase One NPV of $500-$750 million (discount rates from 7-9%).(2) • (1) Estimated inflator is based on the historic trend of CA water price increases. • (2) Estimated discount rate should revert to lower end when 50 year contracts in place with typically AA rated water providers.

  17. Import water when available for storage in the aquifer system at Project area, return to agencies when needed in dry years. Facilities – existing 96-mile pipeline, new recharge basins, new pump station Capital costs – $30 - $40 million, plus costs to convert the 96-mile pipeline. Capacity – 1 million acre-feet of storage Value – Central Valley banks charge water agencies approx. $1,500/AF to reserve storage capacity, plus annual storage fees. Phase 2 – Imported Water Storage

  18. Map – So Cal Water System • Phase 1 & 2 would link Cadiz to main water transportation routes in California.

  19. Timeline /Next Steps • 2014 - 2015 • Resolve DOI certification. • Advance sales agreements with current option holders and new participants • Advance CRA tie-in and exchange terms with Metropolitan Water District. • Project financing, final design and start construction of Phase 1 facilities.

  20. Corporate Details

  21. Financial (@3/31/14) • CASH - $7.5 million • Working capital through Q1 2015. • Cash focused on litigation expense and certain asset development • DEBT - $98.4 million outstanding. • $40 million Senior Secured Mortgage, 8% Interest PIK, Maturity March 2016. • $54 million Convertible Bond at $8.05/share, 7% Interest PIK, Maturity March 2018.

  22. Capitalization

  23. For more information, visit www.cadizinc.comemail:ir@cadizinc.com

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