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<SEC-DOCUMENT>0000727273-07-000014.txt : 20070510
<SEC-HEADER>0000727273-07-000014.hdr.sgml : 20070510
<ACCEPTANCE-DATETIME>20070510172108
ACCESSION NUMBER:		0000727273-07-000014
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20070331
FILED AS OF DATE:		20070510
DATE AS OF CHANGE:		20070510

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CADIZ INC
		CENTRAL INDEX KEY:			0000727273
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				770313235
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12114
		FILM NUMBER:		07839145

	BUSINESS ADDRESS:	
		STREET 1:		777 SOUTH FIGUEROA STREET
		STREET 2:		SUITE 4250
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90017
		BUSINESS PHONE:		213-271-1600

	MAIL ADDRESS:	
		STREET 1:		777 SOUTH FIGUEROA STREET
		STREET 2:		SUITE 4250
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90017

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CADIZ LAND CO INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PACIFIC AGRICULTURAL HOLDINGS INC
		DATE OF NAME CHANGE:	19920602

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ARIDTECH INC
		DATE OF NAME CHANGE:	19880523
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>form10q_3-07.htm
<DESCRIPTION>FORM 10Q FOR QUARTER ENDED 3-31-07
<TEXT>
<html>
  <head>
    <title>
      Form 10Q for quarter ended 3-31-07
</title>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">United
      States</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">Securities
      and</font><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">Exchange</font><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">Commission</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Washington,
      D. C. 20549</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>FORM
      10-Q</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Mark
      One)</font></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[&#8730;]
        </font>Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">for
        the
        quarterly period ended March 31, 2007</font></div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">OR</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">
      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[&#160;&#160;
        ]&#160; </font>Transition Report Pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934</div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">for
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
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      File Number 0-12114</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">Cadiz</font><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman">Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exact
      name of registrant specified in its charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>DELAWARE
      77-0313235</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
      or
      other jurisdiction of (I.R.S. Employer</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">incorporation
      or organization) Identification No.)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="LINE-HEIGHT: 1.15" align="center">
      <table bgcolor="white" cellpadding="0" cellspacing="0" width="100%">

          <tr bgcolor="white" style="line-height: 1.15;">
            <td width="50%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center">&#160;<strong><font size="2">777
                S. Figueroa Street, Suite
                4250</font></strong></div>
            </td>
            <td width="50%">&#160;</td>
          </tr>
          <tr bgcolor="white">
            <td width="50%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center">&#160;<strong><font size="2">Los
                Angeles,
                California</font></strong></div>
            </td>
            <td width="50%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><strong><font size="2">90017</font></strong></div>
            </td>
          </tr>
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            <td width="50%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center">&#160;<font size="2">(Address
                of principal executive
                offices)</font></div>
            </td>
            <td width="50%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Zip
                Code)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registrant&#8217;s
      telephone number, including area code: </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(213)
      271-1600</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yes&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>&#8730;
      </u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;&#160;
      No&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>&#160;&#160;&#160;&#160;&#160;&#160;
      </u></font></strong></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
      by check mark whether the Registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer (as defined in Exchange Act Rule
      12b-2).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Large
      accelerated filer ___ Accelerated filer&#160;<u>&#160;</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>&#8730;&#160;
      </u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      Non-accelerated filer ___</font></strong></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indicate
      by check mark whether the Registrant is a shell company (as defined in Exchange
      Act Rule 12b-2). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><strong><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yes___&#160;&#160;
      No &#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>&#8730;
      &#160;</u></font></u></font></strong></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of
      April 20, 2007, the Registrant had 11,886,322 shares of common stock, par value
      $0.01 per share, outstanding.</font></div>
    <div id="PN" style="PAGE-BREAK-AFTER: always">
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            <tr>
              <td align="left" valign="top" width="72%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>For
                  the Three Months ended March 31, 2007</em></strong></font></div>
              </td>
              <td width="2%">&#160;</td>
              <td width="10%" style="border-bottom: black thin solid;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;<strong><em><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page</font></em></strong></div>
              </td>
              <td width="10%" style="border-bottom: #ffffff solid;">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">&#160;</td>
              <td width="2%">&#160;</td>
              <td width="10%">&#160;</td>
              <td width="10%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PART
                  I - FINANCIAL INFORMATION</strong></font></div>
              </td>
              <td width="2%">&#160;</td>
              <td width="10%">&#160;</td>
              <td width="10%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">&#160;</td>
              <td width="2%">&#160;</td>
              <td width="10%">&#160;</td>
              <td width="10%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                  1.&#160;&#160; Financial Statements</strong></font></div>
              </td>
              <td width="2%">&#160;</td>
              <td width="10%">&#160;</td>
              <td width="10%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">&#160;</td>
              <td width="2%">&#160;</td>
              <td width="10%">&#160;</td>
              <td width="10%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Cadiz
                  Inc. Consolidated Financial Statements</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
              </td>
              <td width="2%">
                <div>&#160;</div>
              </td>
              <td width="10%">
                <div>&#160;</div>
              </td>
              <td width="10%">
                <div>&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div>&#160;</div>
              </td>
              <td width="2%">
                <div>&#160;</div>
              </td>
              <td width="10%">
                <div>&#160;</div>
              </td>
              <td width="10%">
                <div>&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a href="#CSOperations">Unaudited
                  Statements of Operations for the three
                  months ended March 31, 2007 and 2006</a></font></div>
              </td>
              <td width="2%">
                <div>&#160;</div>
              </td>
              <td width="10%">
                <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; MARGIN-RIGHT: 0pt" align="center">&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
              </td>
              <td width="10%">
                <div>&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div>&#160;</div>
              </td>
              <td width="2%">
                <div>&#160;</div>
              </td>
              <td width="10%">
                <div>&#160;</div>
              </td>
              <td width="10%">
                <div>&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a href="#ConsolidatedBalanceSheet">Unaudited
                  Balance Sheets as of March 31,
                  2007 and December 31, 2006</a></font></div>
              </td>
              <td width="2%">
                <div>&#160;</div>
              </td>
              <td width="10%">
                <div style="MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;2</font></div>
              </td>
              <td width="10%">
                <div>&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
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              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <tr>
              <td align="left" valign="top" width="72%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
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            <tr>
              <td align="left" valign="top" width="72%">
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              <td width="10%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;4</font></div>
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              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: -18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a href="#NotesToConsolFinancialState">Unaudited
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              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;5</font></div>
              </td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="#Item2">ITEM
                  2.&#160;&#160; Management&#8217;s Discussion and Analysis of
                  Financial Condition and Results of Operations</a></strong></font></div>
              </td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;15</font></div>
              </td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="#Item3">ITEM
                  3.&#160;&#160; Quantitative and Qualitative Disclosures
                  about Market Risk</a></strong></font></div>
              </td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;23</font></div>
              </td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="#Item4">ITEM
                  4.&#160;&#160; Controls and
                  Procedures</a></strong></font></div>
              </td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;23</font></div>
              </td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="72%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a href="#PartII">PART
                  II&#160; - OTHER
                  INFORMATION</a></strong></font></div>
              </td>
              <td width="2%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></td>
              <td width="10%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;24</font></div>
              </td>
              <td width="10%">&#160;</td>
            </tr>

        </table>
      </div>
    </div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">ii</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><a name="CSOperations">CONSOLIDATED
        STATEMENTS OF OPERATIONS
        (UNAUDITED)</a></em></strong></font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="right" valign="top" width="57%">&#160;</td>
            <td colspan="8" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>For
                the Three Months</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="right" valign="top" width="57%">&#160;</td>
            <td colspan="8" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Ended
                March 31,</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>($
                in thousands except per share data)</em></strong></font></div>
            </td>
            <td colspan="4" valign="top" width="13%" style="border-bottom: black thin solid;">
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              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="right" valign="top" width="57%">&#160;</td>
            <td align="right" colspan="4" valign="top" width="13%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="10%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Revenues</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">352</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">252</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Costs
                and expenses:</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cost
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            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">348</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">211</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">General
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            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,775</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,096</font></div>
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          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
                and amortization</font></div>
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            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">40</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                costs and expenses</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,160</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2,347</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
                loss</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1,808)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,095)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
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            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
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            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(763)</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(481)</font></div>
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          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                income</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">350</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
                (expense), net</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(763)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(131)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loss
                before income taxes</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,571)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,226)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Income
                tax provision</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                loss</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,576)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,226)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                loss applicable to common stock</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,576)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,226)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                and diluted net loss per common share</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(0.22)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(0.20)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="57%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
                and diluted weighted average shares outstanding</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11,680</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" colspan="2" valign="top" width="3%" style="border-bottom: black double;">&#160;</td>
            <td align="right" colspan="3" valign="top" width="8%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11,330</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="7" valign="top" width="78%">&#160;</td>
          </tr>

      </table>
    </div>
    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
      accompanying notes to the consolidated financial statements.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">1</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR"><strong><em><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a name="ConsolidatedBalanceSheet">CONSOLIDATED
        BALANCE SHEET
</a>(UNAUDITED)</font></em></strong></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">&#160;</td>
            <td colspan="2" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                31,</strong></font></div>
            </td>
            <td colspan="3" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>December
                31,</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="3" valign="top" width="55%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>($
                in thousands)</em></strong></font></div>
            </td>
            <td colspan="2" valign="top" width="13%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
            </td>
            <td colspan="3" valign="top" width="15%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
            </td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="13%">&#160;</td>
            <td align="left" colspan="3" valign="top" width="15%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ASSETS</strong></font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="13%">&#160;</td>
            <td align="left" colspan="3" valign="top" width="15%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                assets:</font></div>
            </td>
            <td align="left" colspan="2" valign="top" width="13%">&#160;</td>
            <td align="left" colspan="3" valign="top" width="15%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                and cash equivalents</font></div>
            </td>
            <td align="right" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5,632</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10,397</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Marketable
                Securities</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">
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            <td align="right" valign="top" width="3%">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">390</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">243</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10,941</font></div>
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            <td align="left" colspan="3" valign="top" width="55%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property,
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">
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            <td align="left" colspan="3" valign="top" width="55%">
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3,813</font></div>
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            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
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            </td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">368</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">382</font></div>
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
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            </td>
            <td align="right" valign="top" width="3%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="top" width="10%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">53,942</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">50,326</font></div>
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          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LIABILITIES
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            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
                liabilities:</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accounts
                payable</font></div>
            </td>
            <td align="right" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">381</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">444</font></div>
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          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accrued
                liabilities</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">524</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">380</font></div>
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
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            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
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          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
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            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">914</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">833
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          <tr style="line-height: 1.14;">
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long-term
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            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26,756</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25,881</font></div>
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
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            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27,670</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26,714</font></div>
            </td>
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          <tr style="line-height: 1.14;">
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Commitments
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
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          <tr style="line-height: 1.14;">
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
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          <tr style="line-height: 1.14;">
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stockholders&#8217;
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            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Series
                F convertible preferred stock - $.01 par value:</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
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            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">100,000
                shares authorized; shares issued and outstanding - 1,000 at March
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            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="justify" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Common
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                and
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additional
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            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">250,439</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">245,206</font></div>
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          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accumulated
                deficit</font></div>
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            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(224,286)</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(221,710)</font></div>
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          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                stockholders&#8217; equity</font></div>
            </td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26,272</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23,612</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" colspan="3" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Total
                Liabilities and Stockholders&#8217; equity</font></div>
            </td>
            <td align="right" valign="top" width="3%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="10%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: -0.9pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">53,942</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.14; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">50,326</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.14;">
            <td align="left" valign="top" width="36%">&#160;</td>
            <td align="left" valign="top" width="12%">&#160;</td>
            <td align="left" colspan="7" valign="top" width="35%">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="LINE-HEIGHT: 1.14"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
      accompanying notes to the consolidated financial statements.</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR" style="LINE-HEIGHT: 1.14">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">2</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR"><strong><em><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSOLIDATED<a name="ConsolidatedStatementOfCashFlows">
        STATEMENT OF CASH FLOWS
        (UNAUDITED)</a></font></em></strong><br></div>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="right" valign="top" width="58%">&#160;</td>
            <td colspan="5" valign="top" width="21%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>For
                the Three Months</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="right" valign="top" width="58%">&#160;</td>
            <td colspan="5" valign="top" width="21%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Ended
                March 31,</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>($
                in thousands except per share data)</em></strong></font></div>
            </td>
            <td colspan="2" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2007</strong></font></div>
            </td>
            <td valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td colspan="2" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>2006</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">&#160;</td>
            <td colspan="2" valign="top" width="9%">&#160;</td>
            <td valign="top" width="3%">&#160;</td>
            <td colspan="2" valign="top" width="9%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                flows from operating activities:</font></div>
            </td>
            <td colspan="2" valign="top" width="9%">&#160;</td>
            <td valign="top" width="3%">&#160;</td>
            <td colspan="2" valign="top" width="9%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                loss</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Adjustments
                to reconcile net loss to</font></div>
            </td>
            <td align="right" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,576)</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,226)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">net
                cash used for operating activities:</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">40</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amortization
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            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">435</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                expense added to loan principal</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">456</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">522</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
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            <td align="left" valign="top" width="58%">
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            <td align="right" valign="top" width="7%">
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            <td align="left" valign="top" width="58%">
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            <td align="right" valign="top" width="8%">
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            <td align="right" valign="top" width="3%">&#160;</td>
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            <td align="right" valign="top" width="7%">
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          <tr>
            <td align="left" valign="top" width="58%">
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            <td align="right" valign="top" width="8%">
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            <td align="right" valign="top" width="3%">&#160;</td>
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            <td align="right" valign="top" width="7%">
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          <tr>
            <td align="left" valign="top" width="58%">
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            <td align="right" valign="top" width="8%">
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            <td align="right" valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(33)</font></div>
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          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Increase
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            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">144</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">56</font></div>
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          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                cash used for operating activities</font></div>
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            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1,393)</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(887)</font></div>
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          <tr>
            <td align="left" valign="top" width="58%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                flows from investing activities:</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(8,540)</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additions
                to property, plant and equipment</font></div>
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            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(18)</font></div>
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          </tr>
          <tr>
            <td align="left" valign="top" width="58%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                cash used by investing activities</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(8,541)</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(18)</font></div>
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          </tr>
          <tr>
            <td align="left" valign="top" width="58%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                flows from financing activities:</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                proceeds from exercise of stock options</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">140</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5,031</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Principal
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            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
            </td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font id="TAB1" style="MARGIN-LEFT: 9pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                cash provided by (used by) financing activities</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5,169</font></div>
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            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Net
                decrease in cash and cash equivalents</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
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            <td align="right" valign="top" width="2%">&#160;</td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(907)</font></div>
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          <tr>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
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          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
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            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5,302</font></div>
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          <tr>
            <td align="left" valign="top" width="58%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cash
                and cash equivalents, end of period</font></div>
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            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="top" width="8%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5,632</font></div>
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            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="top" width="7%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4,395</font></div>
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          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
      accompanying notes to the consolidated financial statements.</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR"><strong><em><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CONSOLIDATED
        <a name="ConStateOfStockholdersEquity">STATEMENT
        OF STOCKHOLDERS' EQUITY
</a>(UNAUDITED)</font></em></strong><br></div>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" colspan="19" valign="top" width="83%">&#160;</td>
          </tr>
          <tr>
            <td align="left" colspan="19" valign="top" width="83%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>For
                the Three months ended March 31, 2007</em></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="19" valign="top" width="83%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>($
                in thousands)</em></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" colspan="19" valign="top" width="83%">&#160;</td>
          </tr>
          <tr>
            <td colspan="10" valign="top" width="50%">&#160;</td>
            <td colspan="3" valign="top" width="11%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Additional</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="11%">&#160;</td>
            <td colspan="3" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Total</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="17%">&#160;</td>
            <td colspan="4" valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Preferred
                Stock</u></strong></font></div>
            </td>
            <td colspan="5" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Common
                Stock</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="11%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Paid-in</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="11%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Accumulated</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="10%">
              <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Stockholders&#8217;</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="17%">&#160;</td>
            <td valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Shares</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="7%">
              <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Amount</u></strong></font></div>
            </td>
            <td colspan="2" valign="top" width="11%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Shares</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="9%">
              <div align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Amount</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="11%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Capital</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="11%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Deficit</u></strong></font></div>
            </td>
            <td colspan="3" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Equity</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="17%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balance
                as of </font></div>
            </td>
            <td align="right" valign="top" width="6%">&#160;</td>
            <td align="left" colspan="3" valign="top" width="7%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="11%">&#160;</td>
            <td align="left" colspan="3" valign="top" width="9%">&#160;</td>
            <td colspan="3" valign="top" width="11%">&#160;</td>
            <td colspan="3" valign="top" width="11%">&#160;</td>
            <td colspan="3" valign="top" width="10%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="17%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">December
                31, 2006</font></div>
            </td>
            <td align="right" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,000</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="4%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -1.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11,536,597&#160;
                </font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -2.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">116&#160;
                </font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="7%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">245,206</font></div>
            </td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="7%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(221,710)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="6%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23,612&#160;
                </font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="17%">&#160;</td>
            <td align="right" valign="top" width="6%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="4%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="4%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="6%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="17%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Warrants
                exercised</font></div>
            </td>
            <td align="right" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="4%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -1.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">335,440&#160;
                </font></div>
            </td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="4%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3&#160;
                </font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5,028</font></div>
            </td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="6%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5,031&#160;
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            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="17%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Stock
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            </td>
            <td align="right" valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="4%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -1.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14,285
                &#160;</font></div>
            </td>
            <td align="left" valign="top" width="2%">&#160;&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="4%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-&#160;
                </font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">140</font></div>
            </td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="6%">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">140&#160;
                </font></div>
            </td>
          </tr>
          <tr>
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            <td align="right" valign="top" width="4%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font>&#160;
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              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="right" valign="top" width="6%">
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="4%">&#160;</td>
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            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="4%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
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            <td align="left" valign="top" width="2%">&#160;</td>
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            <td align="right" valign="top" width="6%" style="border-bottom: black thin solid;">
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            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="4%" style="border-bottom: black thin solid;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -1.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-&#160;
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            <td align="right" valign="top" width="4%" style="border-bottom: black thin solid;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right">-</div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="right" valign="top" width="7%" style="border-bottom: black thin solid;">
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            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="6%" style="border-bottom: black thin solid;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,576)&#160;
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            <td align="left" valign="top" width="17%">&#160;</td>
            <td align="right" valign="top" width="6%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="4%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="4%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="7%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="6%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="17%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Balance
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            </td>
            <td align="right" valign="top" width="6%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,000</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="4%" style="border-bottom: black double;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -1.8pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11,886,322&#160;
                </font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="4%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -2.6pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">119&#160;
                </font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="7%" style="border-bottom: black double;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">250,439</font></div>
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            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="7%" style="border-bottom: black double;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(224,286)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="6%" style="border-bottom: black double;">
              <div align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26,272&#160;
                </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
      accompanying notes to the consolidated financial statements.</font><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR"><strong><em><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><a name="NotesToConsolFinancialState">NOTES
        TO THE CONSOLIDATED FINANCIAL
        STATEMENTS</a></font></em></strong></div>
      <div>&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>NOTE
      1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
      </u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Description
      of Business </em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Consolidated Financial Statements have been prepared by Cadiz Inc., sometimes
      referred to as &#8220;Cadiz&#8221; or &#8220;the Company&#8221;, without audit and should be read in
      conjunction with the Consolidated Financial Statements and notes thereto
      included in the Company&#8217;s Form 10-K for the year ended December 31, 2006.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      foregoing Consolidated Financial Statements include the accounts of the Company
      and contain all adjustments, consisting only of normal recurring adjustments,
      which the Company considers necessary for a fair presentation of the Company&#8217;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. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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. This quarterly report on Form 10-Q
      should be read in conjunction with the Company&#8217;s Form 10-K for the year ended
      December&#160;31, 2006. The results of operations for the three months ended
      March 31, 2007 are not necessarily indicative of results for the entire fiscal
      year ended December&#160;31, 2007. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Basis
      of Presentation</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      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 $2.6 million for the three months ended March 31, 2007 and
      $2.2 million for the three months ended March 31, 2006. The Company had working
      capital of $13.7 million at March 31, 2007 and used cash in operations of $1.4
      million for the three months ended March 31, 2007 and $0.9 million for the
      three
      months ended March 31, 2006. Currently, the Company's sole focus is the
      development of its land and water assets.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      2006,
      the Company refinanced its long term debt with a new $36.4 million zero coupon
      senior secured convertible term loan that matures on June 29, 2011. The new
      loan
      provided $9.3 million of additional funds after repayment of the Company&#8217;s prior
      credit facility and certain transaction fees. The Company also received $1.1
      million in 2006 when certain holders of warrants issued in 2004 exercised their
      right to purchase 70,000 common shares at $15.00 per share. In 2007, the Company
      exercised its right to terminate the remaining warrants on March 2, 2007,
      subject to a 30 day notice period. In response, the remaining warrant holders
      exercised their right to purchase 335,440 shares of the Company&#8217;s common stock
      during the notice period, and the Company received an additional $5.0 million
      from the sale of these shares. Following this exercise, no Warrants remain
      outstanding.</font></div>
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      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
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      Based on current forecasts, the Company believes it has sufficient resources
      to
      fund operations for more than one year. The Company&#8217;s current resources do not
      provide the capital necessary to fund a water or real estate development project
      should the Company be required to do so. There is no assurance that additional
      financing (public or private) will be available on acceptable terms or at all.
      If the Company issues additional equity securities to raise funds, the ownership
      percentage of the Company&#8217;s existing stockholders would be reduced. New
      investors may demand rights, preferences or privileges senior to those of
      existing holders of common stock. If the Company cannot raise needed funds,
      it
      might be forced to make further 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. These financial
      statements do not include any adjustments that might result from these
      uncertainties.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subsequent
      to the effective date of the Chapter 11 reorganization plan of Sun World, the
      Company&#8217;s primary activities are limited to the development of its water
      resources and related assets. From the effective date of the plan through March
      31, 2007, the Company has incurred losses of approximately $21.7 million and
      used cash in operations of $7.9 million.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Principles
      of Consolidation</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      December 2003, the Company transferred substantially all of its assets with
      the
      exception of its office sublease, certain office furniture and equipment and
      the
      investment in Sun World International Inc.(&#8220;Sun World&#8221;) to Cadiz Real Estate
      LLC, a Delaware limited liability company (&#8220;Cadiz Real Estate&#8221;). The Company
      holds 100% of the equity interests of Cadiz Real Estate, and therefore continues
      to hold 100% beneficial ownership of the properties that it transferred to
      Cadiz
      Real Estate. Because the transfer of the Company&#8217;s properties to Cadiz Real
      Estate has no effect on its ultimate beneficial ownership of these properties,
      the properties owned of record either by Cadiz Real Estate or by the Company
      are
      treated as belonging to the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Marketable
      Securities</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company considers all highly liquid instruments with a maturity of three months
      or less when purchased to be cash and cash equivalents. Marketable securities
      consist of auction rate securities. Auction rate securities are long-term
      municipal bonds and preferred stock with interest rates that reset periodically
      through an auction process, which occurs in 7-, 28-, 35-, or 90-day periods.
      There are no cumulative gross unrealized holding gains or losses associated
      with
      these investments and all income is recorded as interest income.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Goodwill</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has $3.8 million of goodwill which resulted from a merger in May 1988
      between two companies, which eventually became known as Cadiz Inc. Goodwill
      is
      not amortized but is tested for impairment annually in the first quarter, or
      earlier if events occur which require an impairment analysis be performed.
      The
      Company performed an impairment test of its goodwill at December 31, 2006 and
      determined that its goodwill was not impaired.</font><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">6</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Intangible
      and Other Long-Lived Assets </em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property,
      plant and equipment, intangible and certain other long-lived assets are
      amortized over their useful lives. Useful lives are based on management&#8217;s
      estimates of the period that the assets will generate revenue. Long-lived assets
      are reviewed for impairment whenever events or changes in circumstances indicate
      that the carrying amount of an asset may not be recoverable. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Recent
      Accounting Pronouncements</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      June
      2006, the FASB issued FSP FIN 48 which clarifies</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      accounting for uncertainty in income taxes recognized in an</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">enterprise&#8217;s
      financial statements in accordance with FASB Statement No.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">109,
      &#8220;Accounting for Income Taxes.&#8221; This Interpretation prescribes a</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">recognition
      threshold and measurement attribute for the financial statement</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">recognition
      and measurement of a tax position taken or expected to be taken</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">on
      a tax
      return. This Interpretation also provides guidance on</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">derecognition,
      classification, interest, penalties, accounting in interim</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">periods,
      disclosure and transition. The evaluation of a tax position in</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">accordance
      with this Interpretation is a two-step process. The first</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">step
      is
      to determine if it is more likely than not that a tax position will</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">be
      sustained upon examination and should therefore be recognized. The</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">second
      step is to measure a tax position that meets the more likely than
      not</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">recognition
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      financial statements. Effective January 1, 2007, the Company&#8217;s financial
      statements reflect FSP FIN 48. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      adoption of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FSP
      FIN
      48</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      did not
      have a material impact on the Company&#8217;s financial statements.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
      Note
      2 to the Consolidated Financial Statements included in the Company&#8217;s Form 10-K
      for further discussion of the Company&#8217;s accounting policies.</font><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">7</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>NOTE
      2 - PROPERTY, PLANT, EQUIPMENT AND WATER PROGRAMS</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Property,
      plant, equipment and water programs consist of the following (in
      thousands):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="LINE-HEIGHT: 1.15">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">&#160;</td>
            <td colspan="2" valign="top" width="12%">
              <div style="LINE-HEIGHT: 1.15" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
                31,</strong></font></div>
            </td>
            <td valign="top" width="2%">&#160;</td>
            <td colspan="2" valign="top" width="11%">
              <div style="LINE-HEIGHT: 1.15" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>December
                31,</strong></font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">&#160;</td>
            <td colspan="2" valign="top" width="12%">
              <div style="LINE-HEIGHT: 1.15" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>2007</u></strong></font></div>
            </td>
            <td valign="top" width="2%">&#160;</td>
            <td colspan="2" valign="top" width="11%">
              <div style="LINE-HEIGHT: 1.15" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>2006</u></strong></font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="12%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="11%">&#160;</td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Land
                and land improvements</font></div>
            </td>
            <td align="right" valign="top" width="2%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21,9866</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="8%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21,986</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Water
                programs</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14,274</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14,274</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Buildings</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,191</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1,191</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Machinery
                and equipment</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">727</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">726</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">38,178</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">38,177</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 72pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less
                accumulated depreciation</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(3,024)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(2,987)</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="52%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="10%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35,1545</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="3%" style="border-bottom: black double;">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="8%" style="border-bottom: black double;">
              <div style="LINE-HEIGHT: 1.15" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35,190</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
      expense totaled $37 thousand and $40 thousand during the three months ended
      March 31, 2007 and 2006, respectively.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>NOTE
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      March
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      debt is summarized as follows (dollars in thousands): </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="LINE-HEIGHT: 1.15">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="54%">&#160;</td>
            <td colspan="2" valign="top" width="12%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>March
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>December
                31,</strong></font></div>
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          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="54%">&#160;</td>
            <td colspan="2" valign="top" width="12%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>2007</u></strong></font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td colspan="2" valign="top" width="12%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>2006</u></strong></font></div>
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            <td align="left" valign="top" width="54%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="12%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="12%">&#160;</td>
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            <td align="left" valign="top" width="54%">
              <div style="DISPLAY: block; MARGIN-LEFT: 81pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Zero
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            </td>
            <td align="right" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37,772</font></div>
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            <td align="left" valign="top" width="2%">
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37,316</font></div>
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            <td align="left" valign="top" width="54%">
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            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">
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            <td align="right" valign="top" width="2%">&#160;</td>
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            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="54%">
              <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Debt
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            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(11,457)</font></div>
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            <td align="left" valign="top" width="54%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26,765</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25,890</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="54%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="54%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Less
                current portion</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="10%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
            </td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="54%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="10%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
          </tr>
          <tr style="line-height: 1.15;">
            <td align="left" valign="top" width="54%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="10%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26,756</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25,881</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.15; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      June
      2006, the Company entered into a $36.4 million five year zero coupon convertible
      term loan with Peloton Partners LLP, as administrative agent for the loan,
      and
      with an affiliate of Peloton and another investor, as lenders. Certain terms
      of
      the loan were subsequently amended pursuant to Amendment #1 to the Credit
      Agreement, which was effective September 29, 2006. Under the terms of the loan,
      interest accrues at a 5% annual rate for the first 3 years and 6% thereafter,
      calculated on the basis of a 360-day year and actual days elapsed. The entire
      amount of accrued interest is due at the final maturity of the loan in June,
      2011. The term loan is secured by substantially all the assets of the Company
      and contains representations, warranties and covenants that are typical for
      agreements of this type,</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">8</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">including
        restrictions that would limit the Company&#8217;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,
        there are no financial maintenance covenants and no restrictions on the
        Company&#8217;s ability to issue additional common stock to fund future working
        capital needs.</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      the
      lender&#8217;s option, principal plus accrued interest is convertible into the
      Company&#8217;s $0.01 par value common stock. The loan is divided into two tranches:
      the $10 million Tranche A is convertible at $18.15 per share, and the $26.4
      million Tranche B is convertible at $23.10 per share. A maximum of 2,221,909
      shares are issuable pursuant to these conversion rights, with this maximum
      number applicable if the loan is converted on the final maturity date. The
      Company has more than sufficient authorized common shares available for this
      purpose and has filed a registration statement on Form S-3 covering the resale
      of all the securities issuable upon conversion of the loan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      the
      event of a change in control, the conversion prices are adjusted downward by
      a
      discount that declines over time such that, under a change in control scenario,
      both the Tranche A and Tranche B conversion prices were initially $16.50 per
      share and increase in a linear manner over time to the full $18.15 Tranche
      A
      conversion price and $23.10 Tranche B conversion price on the final maturity
      date. In no event does the maximum number of shares issuable to lenders pursuant
      to these revised conversion formulas exceed the 2,221,909 shares that would
      be
      issued to lenders pursuant to a conversion in full on the final maturity date
      in
      the absence of a change in control. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      of
      the loan tranches can be prepaid if the price of the Company&#8217;s stock on the
      NASDAQ Global Market exceeds the conversion price of the tranche by 40% for
      20
      consecutive trading days in a 30 trading day period or if the Company obtains
      a
      certified environmental impact report for the Cadiz groundwater storage and
      dry
      year supply program, a pipeline right-of-way and permits for pipeline
      construction and financing commitments sufficient to construct the project.
      The
      Company has filed a registration statement on Form S-3 covering the resale
      of
      all the securities issuable upon conversion of the loan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has analyzed all of the above provisions of the convertible loan and
      related agreements for embedded derivatives under FASB Statement No. 133,
      Accounting for Derivative Instruments and Hedging Activities and related
      Emerging Issues Task Force (EITF) interpretations and SEC rules. The Company
      concluded that certain provisions of the convertible loan agreement, which
      were
      in effect prior to the first amendment date, may be deemed to be derivatives
      for
      purposes of the application of FASB Statement No. 133 and EITF 00-19: Accounting
      for Derivative Financial Instruments to, and Potentially Settled in, a Company&#8217;s
      Own Stock. Therefore, in accordance with FASB Statement No. 133, these embedded
      instruments were bifurcated from the host debt instrument and classified as
      a
      liability in the Company&#8217;s financial statements. The Company prepared valuations
      for each of the deemed derivatives using a Black-Scholes option pricing model
      and recorded a liability of approximately $12.2 million on the June 30 loan
      funding date, with an offsetting discount to the convertible term
      loan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      June
      30, 2006, the derivative liability was classified and recorded as part of long
      term debt in the balance sheet. The debt discount will be amortized to interest
      expense over the life</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">9</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
        the
        loan using the interest amortization method. The principal valuation assumptions
        are as follows:</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="8%">&#160;</td>
            <td align="left" valign="top" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Loan
                balance available for conversion:</font></div>
            </td>
            <td align="justify" valign="top" width="34%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$36.4
                million</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="8%">&#160;</td>
            <td align="left" valign="top" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Expected
                term:</font></div>
            </td>
            <td align="justify" valign="top" width="34%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5
                years</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="8%">&#160;</td>
            <td align="left" valign="top" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cadiz
                common share price:</font></div>
            </td>
            <td align="justify" valign="top" width="34%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$17.01</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="8%">&#160;</td>
            <td align="left" valign="top" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Volatility:</font></div>
            </td>
            <td align="justify" valign="top" width="34%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="8%">&#160;</td>
            <td align="left" valign="top" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Risk-free
                Interest Rate:</font></div>
            </td>
            <td align="justify" valign="top" width="34%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.18%</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="8%">&#160;</td>
            <td align="left" valign="top" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Change
                in control probability:</font></div>
            </td>
            <td align="justify" valign="top" width="34%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10%</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      September 29, 2006 the terms of the loan were amended to modify the repayment
      and conversion options available to lenders upon a change in control of the
      Company, to clarify that the conversion feature was an unsecured obligation
      of
      the Company and to specifically limit the maximum number of shares to be issued
      upon conversion of the loan. With these modifications, it was determined that
      the requirement for bifurcation under SFAS 133 was no longer met and that the
      carrying value of the embedded derivatives should be reclassified to
      stockholder&#8217;s equity under EITF 06-7. The derivative liability was adjusted to
      fair value on the amendment date, and the $2,919,000 increase in fair value
      was
      recorded as an &#8220;Other Expense&#8221; item in the Consolidated Statement of Operations.
      The $15.2 million fair value of the derivative liability was then transferred
      to
      the Additional Paid-in Capital component of Stockholder&#8217;s Equity </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company incurred $408,000 of outside legal expenses related to the negotiation
      and documentation of the loan, which will be amortized over the life of the
      loan
      using the interest amortization method.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      proceeds of the Peloton Loan were applied to repay in full the Company&#8217;s term
      loan facility with ING described below. As a result, ING retained the $762,000
      remaining balance of the prepaid interest credit account described below, and
      the write-off of this asset was reflected in the &#8220;Other Expense&#8221; caption of the
      Statement of Operations in the fiscal quarter ended June 30, 2006. The write-off
      of $106,000 of unamortized debt issuance costs related to the ING loan was
      also
      reflected under &#8220;Other Expense&#8221; in the same fiscal period.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      November 30, 2004 the Company entered into an amendment of its senior term
      loan
      agreement with ING whereby it repaid in full the senior term loan portion of
      the
      facility with ING of $10 million and reduced to $25 million the outstanding
      principal balance under the existing revolving portion of the loan. The terms
      and conditions of the loan facility with ING were amended in order to extend
      the
      maturity date of the debt until March 31, 2010, with a $10 million mandatory
      principal repayment due on or before March 31, 2008, and an interest rate
      through March 31, 2008 of 4% cash plus 4% paid in kind (&#8220;PIK&#8221;) increasing to 4%
      cash plus 6% PIK for interest periods commencing on and after April 1, 2008.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
      balance was outstanding after the ING loan repayment in June 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      March
      31, 2007 the Company was in compliance with its debt covenants under the Peloton
      Loan.</font></div>
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        </div>
      </div>
      <div id="HDR">
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>NOTE
      4 - STOCK-BASED COMPENSATION PLANS AND WARRANTS</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has issued options and has granted stock awards pursuant to its 2003
      Management Equity Incentive Plan. The Company also has granted stock awards
      pursuant to its Outside Director Compensation Plan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Stock
      Options Issued under the 2003 Management Equity Incentive
      Plan</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      2003
      Management Equity Incentive Plan provides for the granting of options for the
      purchase of 377,339 shares of common stock. Options issued under the Management
      Equity Incentive Plan were granted during 2005 and 2006. The options have a
      ten
      year term with vesting periods ranging from issuance date to three years.
      Certain of these options had strike prices that were below the fair market
      value
      of the Company&#8217;s common stock on the date of grant. All options have been issued
      to officers, employees and consultants of the Company. 365,000 options were
      granted under the plan during 2005, and the remaining 12,339 options were
      granted in 2006. Options to purchase 367,339 shares were unexercised and
      outstanding on March 31, 2007.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company recognized stock option related compensation costs of $38,000 and
      $221,000 in the three months ended March 31, 2007 and March 31, 2006,
      respectively. On March 31, 2007, the unamortized compensation expense related
      to
      these options amounted to $106,000 and is expected to be recognized in 2007
      and
      2008. Options to purchase 10,000 shares of stock for $13.95 per share were
      exercised during the three months ended March 31, 2007.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Stock
      Awards to Directors, Officer, Consultants and
      Employees</em></strong></font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company has also granted stock awards pursuant to its Management Equity
      Incentive Plan and Outside Director Compensation Plan. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
      of
      the shares issuable under the 2003 Management Equity Incentive Plan were awarded
      in May 2005. On March 31, 2007, there were no additional shares issuable under
      the 2003 Management Equity Incentive Plan.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      initial Outside Director Compensation Plan award was made on November 14, 2006
      and included 10,416 shares for service rendered during the 12 month service
      period ended June 30, 2004 and 2005, and 4,285 shares for services rendered
      during the 12 month service period ended June 30, 2006. The 10,416 shares for
      services rendered were issued immediately upon shareholder approval in November
      2006. The 4,285 shares awarded for the 12 month service period ended June 30,
      2006 were issued on January 31, 2007.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      accompanying consolidated financial statements include $27,000 and $308,000
      of
      stock based compensation expense related to stock awards in the three months
      ended March 31, 2007 and March 31, 2006, respectively. There was no stock award
      activity under the plans during the quarter ended March 31, 2007, and there
      was
      no unamortized compensation expense relating to stock awards in prior periods
      on
      March 31, 2007.</font></div>
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        </div>
      </div>
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Stock
      Purchase Warrants Issued to Non-Employees</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company accounts for equity securities issued to non-employees in accordance
      with the provisions of SFAS 123 and Emerging Issues Task Force 96-18. On
      November 30, 2004 the Company completed a private placement of 400,000 units,
      each Unit consisting of five (5) shares of the Company&#8217;s common stock and one
      (1) common stock purchase warrant. Each of the 400,000 warrants entitle the
      holder to purchase one (1) share of common stock at an exercise price of $15.00
      per share. An additional 5,440 warrants were issued to an individual who
      assisted the company in identifying participants in the November 30, 2004
      private placement and elected to receive a commission for the services in stock
      rather than cash. Each Warrant has a term of three (3) years and was callable
      at
      the Company&#8217;s option. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
      2006, certain warrant holders exercised their rights to purchase 70,000 shares,
      and the Company received $1,050,000 from the sale of that common stock. In
      2007,
      the Company exercised a right to terminate the remaining warrants on March
      2,
      2007, subject to a 30-day notice period. In response, the remaining warrant
      holders exercised their rights to purchase 335,440 shares of the Company&#8217;s
      common stock during the notice period, and the Company received $5.0 million
      from the sale of these shares. Following this exercise, no Warrants remain
      outstanding.<br><br><br></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>NOTE
      5 - INCOME TAXES</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of
      March 31, 2007, the Company had net operating loss (NOL) carryforwards of
      approximately $72.2 million for federal income tax purposes and $22.8 million
      for California state income tax purposes. Such carryforwards expire in varying
      amounts through the year 2026. These amounts reflect the effective reduction
      of
      the NOL carryforwards as a result of ownership change annual limitation
      amounts.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      August
      26, 2005, a Settlement Agreement between Cadiz, on the one hand, and Sun World
      and three of Sun World&#8217;s subsidiaries, on the other hand, was approved by the
      U.S. Bankruptcy Court, concurrently with the Court&#8217;s confirmation of the amended
      Plan. The Settlement Agreement provides that following the September 6, 2005
      effective date of Sun World&#8217;s plan of reorganization, Cadiz will retain the
      right to utilize the Sun World net operating loss carryovers (NOLs). Sun World
      Federal NOLs are estimated to be approximately $57.8 million. If, in any year
      from calendar year 2005 through calendar year 2011, the utilization of such
      NOLs
      results in a reduction of Cadiz&#8217; tax liability for such year, then Cadiz will
      pay to the Sun World bankruptcy estate 25% of the amount of such reduction,
      and
      shall retain the remaining 75% for its own benefit. There is no requirement
      that
      Cadiz utilize these NOLs during this reimbursement period, or provide any
      reimbursement to the Sun World bankruptcy estate for any NOLs used by Cadiz
      after this reimbursement period expires.&#160; The Company has not recognized
      any tax benefits related to these NOLs.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Section
      382 of the Internal Revenue Code imposes an annual limitation on the utilization
      of net operating loss carryforwards based on a statutory rate of return (usually
      the &#8220;applicable federal funds rate&#8221;, as defined in the Internal Revenue Code)
      and the value of the corporation at the time of a &#8220;change of ownership&#8221; as
      defined by Section 382. Due to past equity issuances and equity issuances in
      2005, and due to the Chapter 11 filing by Sun World, the Company&#8217;s </font></div>
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      <div id="HDR">
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        </div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ability
        to utilize net operating loss carryforwards is limited to approximately $6.6
        million annually, potentially adjusted by built-in gain items.
</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company is required to include certain financial statement disclosures with
      the
      interim period report for the quarter in which FSP FIN 48 is adopted. These
      disclosures reflect specific Company policies and amounts related to its
      accounting for uncertain tax positions. The Company's policy on the
      classification of income tax related interest and penalties is disclosed in
      Note
      1 to these financial statements.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of the
      January 1, 2007, adoption of FSP FIN 48, the Company possessed unrecognized
      tax
      benefits totaling approximately $3.3 million. None of these, if recognized,
      would affect the Company's effective tax rate because the Company has recorded
      a
      full valuation allowance against these assets. Additionally, as of that date
      the
      company had accrued a total of $200,000 for state taxes, interest and penalties
      related to income tax positions in prior returns.&#160; In connection with the
      adoption of FIN 48, the Company elected to classify income tax penalties and
      interest as general and administrative expenses. For the three months ended
      March 31, 2007, general and administrative expenses included approximately
      $40,000 of income tax penalties and interest.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company does not expect that the unrecognized tax benefits will significantly
      increase or decrease in the next 12 months. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company's tax years 2003 through 2006 remain subject to examination by the
      Internal Revenue Service, and tax years 2002 through 2006 remain subject to
      examination by California tax jurisdictions. In addition, the Company's loss
      carryforward amounts are generally subject to examination and adjustment for
      a
      period of three years for federal tax purposes and four years for California
      purposes, beginning when such carryovers are utilized to reduce taxes in a
      future tax year.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Because
      it is more likely than not that the Company will not realize its net deferred
      tax assets, it has recorded a full valuation allowance against these assets.
      Accordingly, no deferred tax asset has been recorded in the accompanying balance
      sheet.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br><br><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>NOTE
      6 - NET LOSS PER COMMON SHARE</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Basic
      earnings per share (EPS) is computed by dividing the net loss, after deduction
      for preferred dividends either accrued or imputed, if any, by the
      weighted-average common shares outstanding. Options, deferred stock units,
      warrants, convertible debt, and preferred stock that are convertible into shares
      of the Company&#8217;s common stock were not considered in the computation of diluted
      EPS because their inclusion would have been antidilutive. Had these instruments
      been included, the fully diluted weighted average shares outstanding would
      have
      increased by approximately 2,121,000 and 908,000 shares for the three months
      ended March 31, 2007 and 2006, respectively.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="Item2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      2.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Management&#8217;s
      Discussion and Analysis of Financial Condition and Results of
      Operations</strong></font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>In
      connection with the "safe harbor" provisions of the Private Securities
      Litigation Reform Act of 1995, the following discussion contains trend analysis
      and other forward-looking statements. Forward-looking statements can be
      identified by the use of words such as "intends", "anticipates", "believes",
      "estimates", "projects", "forecasts", "expects", "plans" and "proposes".
      Although we believe that the expectations reflected in these forward-looking
      statements are based on reasonable assumptions, there are a number of risks
      and
      uncertainties that could cause actual results to differ materially from these
      forward-looking statements. These include, among others, our ability to maximize
      value from our Cadiz, California land and water resources; and our ability
      to
      obtain new financings as needed to meet our ongoing working capital needs.
      See
      additional discussion under the heading "Certain Trends and Uncertainties"
      in
      Item 7 of our Annual Report on Form 10-K for the year ended December 31,
      2006.</em></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Overview</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s primary assets are 45,000 acres of land in three areas of eastern San
      Bernardino County, California. Virtually all of this land is underlain by
      high-quality groundwater resources with demonstrated potential for recreational,
      residential, and agricultural development. The properties are also located
      in
      proximity to the Colorado River and the Colorado River Aqueduct, the major
      source of imported water for southern California. The aquifer systems underlying
      the properties contain large amounts of water and are suitable for water storage
      and supply programs.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      value
      of these assets derives from a combination of projected population increases
      and
      limited water supplies throughout southern California. In addition, most of
      the
      major population centers in southern California are not located where
      significant precipitation occurs, requiring the importation of water from other
      parts of the state. The Company therefore believes that a competitive advantage
      exists for companies that can provide high quality, reliable, and affordable
      water to major population centers.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      1993
      the Company secured permits for up to 9,600 acres of agricultural development
      in
      the Cadiz Valley and the withdrawal of more than 1 million acre-feet of ground
      water from the aquifer system underlying the property. In 1997, the Company
      entered into the first of a series of agreements with the Metropolitan Water
      District of Southern California (&#8220;Metropolitan&#8221;) to jointly design, permit and
      build an aquifer storage and supply program on the Company&#8217;s land in the Cadiz
      and Fenner Valleys (the &#8220;Cadiz Project&#8221; or the &#8220;Project&#8221;). Under the Cadiz
      Project, surplus water from the Colorado River would be stored in the aquifer
      system underlying our land during wet years. When needed, the stored water
      and
      temporary withdrawals of indigenous groundwater, could be distributed through
      the Colorado River Aqueduct to Metropolitan's member agencies throughout six
      southern California counties.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Between
      1997 and 2002, Metropolitan and the Company received substantially all of the
      various state and federal approvals required for permits to construct and
      operate the project and received a federal </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>Record
      of Decision (&#8220;ROD&#8221;)</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>&#160;</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">from
      the
      U.S. Department of the Interior, which endorsed the Cadiz Project and offered
      a
      right of way grant for the construction of project facilities. The federal
      government also approved a Final Environmental Impact Statement (&#8220;FEIS&#8221;) in
      compliance with the National Environmental Policy Act (&#8220;NEPA&#8221;). </font></div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">14</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Despite
      the significant progress made in the federal environmental review process,
      in
      October 2002 Metropolitan&#8217;s Board voted not to accept the right of way grant
      offered by the U.S. Department of the Interior and refused to consider whether
      or not to certify the Final Environmental Impact Report (&#8220;FEIR&#8221;), which was a
      necessary action to authorize implementation of the Cadiz Project in accordance
      with the California Environmental Quality Act (&#8220;CEQA&#8221;). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">When
      Metropolitan&#8217;s Board declined to proceed with the Cadiz Project, the FEIR was
      complete and awaiting certification at a hearing scheduled for late October
      2002. It is the Company&#8217;s position that these actions by Metropolitan breached
      various contractual and fiduciary obligations to the Company, and interfered
      with the economic advantage it would have obtained from the Cadiz Project.
      In
      April 2003 the Company filed a claim against Metropolitan seeking compensatory
      damages. When settlement negotiations failed to produce a resolution, the
      Company filed a lawsuit against Metropolitan in Los Angeles Superior Court
      on
      November 17, 2005. The claims for </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">breach
      of
      fiduciary duty, breach of express contract, promissory estoppel, breach of
      implied contract and specific performance have all been allowed by the Court
      and
      are scheduled for trial in late 2007.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Meanwhile,
      the need for water storage and supply programs has not abated. Moreover, the
      advantages of underground water storage facilities are increasingly evident.
      These include minimal surface environmental impacts, lower capital investment,
      protection from airborne contaminants and minimal evaporative water loss.
      Therefore the Company continues to pursue the completion of the environmental
      review process for the Cadiz Project.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      address the concerns expressed during the initial environmental review process
      for the Project, certain elements of the Project have been restructured. These
      operational changes concentrate on public concerns regarding the potential
      transfer and sale of indigenous groundwater and the potential replenishment
      of
      temporary withdrawals of indigenous groundwater. No changes are proposed to
      any
      of the physical facilities required to implement and operate the Cadiz
      Project.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">To
      that
      end, the County of San Bernardino has agreed to serve as the CEQA lead agency
      for the completion of the environmental review of the Cadiz Project and issue
      any permits required under California law once the review is completed. The
      Company is also working with the U.S. Department of the Interior to have the
      permits that were approved during the federal environmental review process,
      including the right of way granted in the ROD, issued directly to the Company
      for the benefit of any participating public agency.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additionally,
      the Company is in discussions with several other public agencies regarding
      their
      interest in participating in the Cadiz Project. These agencies have access
      to
      sources of water that can be stored in the Cadiz Project.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition to agriculture and water development, the rapid growth of nearby desert
      communities in southern California, Nevada and Arizona indicates that the
      Company&#8217;s land holdings may be suitable for other types of development. To this
      end, the Company has conducted a detailed analysis of the Company&#8217;s land assets
      to assess the opportunities for these properties. Based on this analysis, the
      Company believes that its properties have significant long-term potential for
      residential and commercial development. The Company is continuing to explore
      alternative land uses to maximize the value of its properties.</font></div>
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        </div>
      </div>
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      2006,
      the Company refinanced its long term debt with a new $36.4 million zero coupon
      senior secured convertible term loan that matures on June 29, 2011. The Company
      also received $1.1 million in 2006 when certain holders of warrants issued
      in
      2004 exercised their right to purchase 70,000 common shares at $15.00 per share.
      In 2007, the Company exercised its right to terminate the remaining warrants
      on
      March 2, 2007, subject to a 30 day notice period. In response, the remaining
      warrant holders exercised their right to purchase 335,440 shares of the
      Company&#8217;s common stock during the notice period, and the Company received an
      additional $5.0 million from the sale of these shares. Following this exercise,
      no Warrants remain outstanding.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Company remains committed to its land and water assets and continues to explore
      all opportunities for development of these assets. The Company cannot predict
      with certainty which of these various opportunities will ultimately be
      utilized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>Results
      of Operations</em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Three
      Months Ended March 31, 2007 Compared to Three Months Ended March 31,
      2006</u></em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      have
      not received significant revenues from our water resource activity to date.
      As a
      result, we have historically incurred a net loss from operations. We had
      revenues of $352 thousand for the three months ended March 31, 2007 and $252
      thousand for the three months ended March 31, 2006. We incurred a net loss
      of
      $2.6 million in the three months ended March 31, 2007 compared with a $2.2
      million net loss during the three months ended March 31, 2006. The higher loss
      in the 2007 period primarily related to non-recurring other income that was
      received during the first quarter of 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
      primary expenses are our ongoing costs to develop our real estate and water
      assets and to secure the remaining entitlements needed to continue developing
      the Cadiz Program. These costs consist primarily of project management, legal,
      consulting, engineering and administrative expenses, which are characterized
      as
      general and administrative expenses for financial statement reporting purposes.
      We also have expenses related to the limited farming activities that we conduct
      at the Cadiz Ranch. Other costs include interest expense and compensation costs
      resulting from the grant of options under the Cadiz 2003 Management Equity
      Incentive Plan and the Outside Director Compensation Plan. We expect to incur
      additional non-cash expenses in future periods in connection with new management
      and director equity incentive compensation plans.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Revenues</u></em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Cadiz
      had revenues of $352 thousand for the three months ended March 31, 2007 and
      $252
      thousand for the three months ended March 31, 2006. Higher revenues resulted
      primarily from the timing of the sale of citrus crops, as the start of the
      smaller 2006 lemon harvest was delayed into December, and all related revenues
      were recognized during first quarter of 2007. The 2005 lemon harvest started
      in
      October, and $1.1 million of revenues were recognized in December
      2005.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Cost
      of Sales</u></em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Cost of
      Sales totaled $348 thousand during the three months ended March 31, 2007 and
      $211 thousand during the three months ended March 31, 2006. The higher cost
      of
      sales in 2007 reflects the production, harvesting and marketing costs associated
      with higher citrus crop sales during the period.</font></div>
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        </div>
      </div>
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;&#160;&#160;
      <u>General and Administrative Expenses</u></em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>&#160;</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">General
      and administrative expenses during the three months ended March 31, 2007 totaled
      $1.8 million compared to $2.1 million for the three months ended March 31,
      2006.
      Non-cash compensation costs for stock and option awards is included in General
      and Administrative Expenses. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Compensation
      costs from stock and option awards for the three months ended March 31, 2007
      were $65 thousand, compared with $529 thousand for the three months ended March
      31, 2006. The expenses primarily relate to stock and options issued under the
      Cadiz 2003 Management Equity Incentive Plan and the Outside Director
      Compensation Plan described in Note 4 of Notes to the Consolidated Financial
      Statements. The declining expense reflects a lower balance of unvested stock
      and
      option grants in March 31, 2007. There were no stock or option grants under
      these plans during the three months ended March 31, 2007. Shares and options
      issued under the Plans vest over varying periods from the date of issue to
      December 2008. We expect to incur additional non-cash expenses in connection
      with future management and director equity incentive compensation
      plans.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Other
      General and Administrative Expenses, exclusive of stock based compensation
      costs, totaled $1.7 million in the three months ended March 31, 2007, compared
      with $1.6 million for the three months ended March 31, 2006. The increase in
      expenses is primarily due to higher payroll costs.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Depreciation
      and Amortization</u></em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em>&#160;</em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Depreciation
      and amortization expense for the three months ended March 31, 2007 and 2006
      totaled $37 thousand and $40 thousand, respectively.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Interest
      Expense, net</u></em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Net
      interest expense totaled $763 thousand during the three months ended March
      31,
      2007, compared to $481 thousand during the same period in 2006. The following
      table summarizes the components of net interest expense for the two periods
      (in
      thousands):</font></div>
    <div>&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="56%">&#160;</td>
            <td align="left" colspan="5" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Three
                Months Ended</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="56%">&#160;</td>
            <td align="left" colspan="5" valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 45pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>March
                31,</u></strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 293.45pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="56%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="11%">
              <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>2007</u></strong></font></div>
            </td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>2006</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="56%">&#160;</td>
            <td align="left" colspan="2" valign="top" width="11%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="2%">&#160;</td>
            <td align="left" valign="top" width="8%">&#160;</td>
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            <td align="left" valign="top" width="56%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">456</font></div>
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            <td align="right" valign="top" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">518</font></div>
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            <td align="left" valign="top" width="56%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amortization
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            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14</font></div>
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            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7</font></div>
            </td>
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          <tr>
            <td align="left" valign="top" width="56%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Amortization
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            <td align="right" valign="top" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">421</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="56%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 18pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                income</font></div>
            </td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(128)</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="top" width="8%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(44)</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="56%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="9%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="8%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="56%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="9%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">763</font></div>
            </td>
            <td align="right" valign="top" width="2%">&#160;</td>
            <td align="right" valign="top" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="top" width="8%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">481</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      increase in net interest expense is primarily due the amortization of the debt
      discount related to certain derivatives embedded to the new senior secured
      convertible term loan. 2007 interest income increased to $128 thousand from
      $44
      thousand in the prior year, due to higher cash balances and higher short-term
      interest rates. See Notes to the Consolidated Financial Statements: Note 3
      -
      Long-term Debt.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Other
      Income</u></em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      During
      the three month period ended March 31, 2006, one of our stockholders determined
      that it had, at a time when it was the beneficial holder of more
      than</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">17</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10%
      of
      our outstanding equity securities, inadvertently engaged in trades which
      resulted in automatic short swing profit liability to the Company pursuant
      to
      Section 16(b) of the Securities Exchange Act of 1934. After becoming aware
      of
      the situation, the stockholder promptly made payments totaling $350,000 to
      the
      Company to settle the entire short swing profit liability owed as a consequence
      of these trades.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Income
      Taxes</u></em></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Income
      tax expense for the three months ended March 31, 2007 was $5 thousand. No income
      tax expense was recognized in the prior year period. See Note 5 of the Notes
      to
      the Consolidated Financial Statements - Income Taxes. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>LIQUIDITY
      AND CAPITAL RESOURCES </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Current
      Financing Arrangements</u></em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      we
      have not received significant revenues from our water resource and real estate
      activity to date, we have been required to obtain financing to bridge the gap
      between the time water resource and real estate development expenses are
      incurred and the time that revenue will commence. Historically, we have
      addressed these needs primarily through secured debt financing arrangements,
      private equity placements and the exercise of outstanding stock options and
      warrants.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Subsequent
      to the vote of Metropolitan&#8217;s Board in October 2002 to not proceed with the
      Cadiz Project and Sun World&#8217;s January 2003 bankruptcy filing, we have worked
      with our primary secured lenders to structure our debt in a way which allows
      us
      to continue our development of the Cadiz Project and minimize the dilution
      of
      the ownership interests of common stockholders. We entered into a series of
      agreements with ING Capital LLC and then refinanced the ING loan with a new
      $36.4 million five year zero coupon senior secured convertible term loan with
      Peloton Partners LLP (through an affiliate) and another lender (the &#8220;Peloton
      Loan&#8221;) in June 2006. The Peloton loan provided for:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 54pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
                repayment in full of our senior secured term loan with ING;
                </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 54pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
                final maturity date of June 29,
                2011;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 54pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
                zero coupon structure, which requires no cash interest payments prior
                to
                the final maturity date; and</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table cellpadding="0" cellspacing="0" id="list" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td align="right" style="width: 54pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif">&#183;&#160;&#160;</font></td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a
                5% interest rate for the first three (3) years, with a 6% interest
                rate
                thereafter.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      each
      lender&#8217;s option, principal plus accrued interest on each of the two loan
      tranches is convertible into the Company&#8217;s $0.01 par value common stock at a
      fixed conversion price per share. The $10 million Tranche A conversion price
      is
      $18.15 per share, and the $26.4 million Tranche B conversion price is $23.10
      per
      share.&#160; The conversion prices are subject to downward adjustment in the
      event of a change in control.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      or
      after June 29, 2007, principal and interest accrued on each of the two loan
      tranches can be prepaid on 30 days notice either if the Company&#8217;s stock price
      exceeds the tranche&#8217;s conversion price by 40% for 20 consecutive trading days in
      a 30 trading day period or if the Company completes the Cadiz Water Program
      entitlement process, secures a right-of-way for the project pipeline and
      arranges sufficient financing to repay the loan and build the Cadiz Project.
      The
      $10 million Tranche A prepayment option would become available at a share price
      </font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">18</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
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        </div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">above
        $25.41 per share and&#160;the Tranche B prepayment option would become available
        at a share price above $32.34 per share.</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      debt
      covenants associated with the loan were negotiated by the parties with a view
      towards our operating and financial condition as it existed at the time the
      agreements were executed. At March 31, 2007, the Company was in compliance
      with
      its debt covenants.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      addition to allowing us to repay our former credit facility with ING, the
      Peloton Loan provided us with $9.3 million of additional working capital and
      deferred all interest payments until the June 29, 2011 final maturity date.
      Furthermore, the Peloton Loan, unlike the ING facility, permitted us to retain
      the proceeds received from the exercise of warrants issued by us in 2004 as
      part
      of a $24 million private equity placement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      private
      placement completed by the Company in November 30, 2004 included the issuance
      of
      warrants to purchase 405,440 shares of our common stock at an exercise price
      of
      $15.00 per share. During 2006, holders of 70,000 of the warrants exercised
      their
      warrants, resulting in the issuance by us of 70,000 shares of common stock
      with
      net proceeds of $1,050,000. In February 2007, we exercised our right to
      terminate the remaining warrants upon 30 days notice, and holders of all the
      remaining 335,440 warrants exercised their warrants. As a result, we issued
      335,440 shares of our common stock and received net proceeds of $5,031,600
      during February 2007. Following these exercises, no Warrants remain
      outstanding.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
      February 2007, an employee elected to exercise options to purchase 10,000 shares
      of our common stock for $13.95 per share, and we received proceeds of
      $139,500.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      we
      continue to actively pursue our business strategy, additional financing in
      connection with our water programs will be required. See &#8220;Outlook&#8221;, below. The
      covenants in the credit facility do not prohibit our use of additional equity
      financing and allow us to retain 100% of the proceeds of any equity financing.
      We do not expect the loan covenants to materially limit our ability to finance
      our water development activities.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      issued
      100,000 shares of Series F preferred stock to ING as part of our agreements
      in
      December 2003 (the &#8220;ING Preferred Stock&#8221;), of which 1,000 shares remain
      outstanding. The preferred shares are convertible into 17.28955 shares of common
      stock for each share of Series F Preferred Stock converted.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      March
      31, 2007, we have no outstanding credit facilities or preferred stock other
      than
      the Peloton Loan and ING Preferred Stock described in our 10K for the year
      ended
      December 31, 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Cash
      Used for Operating Activities</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Cash
      used for operating activities was $1.4 million for the three months ended March
      31, 2007, as compared to $887 thousand for the three months ended March 31,
      2006. The increased cash usage is primarily due to higher general and
      administrative expenses, which are primarily due to higher legal and consulting
      costs related to the entitlement of the Cadiz Program.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Cash
      Used for Investing activities</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      During
      the three months ended March 31, 2007, net cash flow used for investing
      activities was $8.5 million, reflecting investments in marketable securities
      and
      the acquisition of computing equipment at the Company&#8217;s administrative offices.
</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">19</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
        the three months ended March 31, 2006, net cash flow for investing activities
        was $18 thousand, primarily for the acquisition of plant and equipment at
        the
        Cadiz Ranch.</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Cash
      Provided by (Used for) Financing Activities</u></strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Cash
      provided by financing activities totaled $5.2 million for the three months
      ended
      March 31, 2007, compared with $2 thousand used for certain principal payments
      on
      long-term debt in the three months ended March 31, 2006. The 2007 results
      reflect $5.2 million of net proceeds from the exercise of warrants to purchase
      335,440 shares of our common stock for $15.00 per share and the exercise of
      options to purchase 10,000 shares of our common stock for $13.95 per share
      by an
      employee. There was no material financing activity in 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Outlook</u></em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Short
      Term Outlook</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      The
      proceeds of our new $36.4 million senior secured convertible term loan and
      the
      $6.1 million received upon the sale of common shares in 2007 and 2006 pursuant
      to the exercise of certain warrants issued in November 2004 provide us with
      sufficient funds to meet our expected working capital needs for the next 12
      months. The Company expects to continue its historical practice of structuring
      its financing arrangements to match the anticipated needs of its development
      activities.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      See
      "Long Term Outlook", below. No assurances can be given, however, as to the
      availability or terms of any new financing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Long
      Term Outlook</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>.
      </em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      the
      longer term, we will need to raise additional capital to finance working capital
      needs and any payments due under our senior secured convertible term loan at
      maturity. See &#8220;Current Financing Arrangements&#8221; above. Payments will be due under
      the term loan only to the extent that lenders elect not to exercise equity
      conversion rights prior to the loan&#8217;s final maturity date. Our future working
      capital needs will depend upon the specific measures we pursue in the
      entitlement and development of our real estate and water resources. We will
      evaluate the amount of cash needed, and the manner in which such cash will
      be
      raised, on an ongoing basis. We may meet any future cash requirements through
      a
      variety of means, including equity or debt placements, or through the sale
      or
      other disposition of assets. Equity placements would be undertaken only to
      the
      extent necessary, so as to minimize the dilutive effect of any such placements
      upon our existing stockholders.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Recent
      Accounting Pronouncements</u></em></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      June
      2006, the FASB issued FSP FIN 48 which clarifies</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      accounting for uncertainty in income taxes recognized in an</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">enterprise&#8217;s
      financial statements in accordance with FASB Statement No.</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">109,
      &#8220;Accounting for Income Taxes.&#8221; This Interpretation prescribes a</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">recognition
      threshold and measurement attribute for the financial statement</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">recognition
      and measurement of a tax position taken or expected to be taken</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">on
      a tax
      return. This Interpretation also provides guidance on</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">derecognition,
      classification, interest, penalties, accounting in interim</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">periods,
      disclosure and transition. The evaluation of a tax position in</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">accordance
      with this Interpretation is a two-step process. The first</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">step
      is
      to determine if it is more likely than not that a tax position will</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">be
      sustained upon examination and should therefore be recognized. The</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">second
      step is to measure a tax position that meets the more likely than
      not</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">recognition
      threshold to determine the amount of benefit to recognize in</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
      financial statements. Effective, January 1, 2007, the Company&#8217;s financial
      statements reflect FSP FIN 48. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      adoption of </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">FSP
      FIN
      48</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      did not
      have a material impact on the Company&#8217;s financial statements.</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">20</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><em><u>Certain
        Known Contractual Obligations</u></em></strong></font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td valign="middle" width="22%">&#160;</td>
            <td colspan="14" valign="middle" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Payments
                Due by Period</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="middle" width="22%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Contractual
                Obligations</u></strong></font></div>
            </td>
            <td colspan="2" valign="middle" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Total</u></strong></font></div>
            </td>
            <td valign="middle" width="2%">&#160;</td>
            <td colspan="2" valign="middle" width="11%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -5.4pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>1
                year or less</u></strong></font></div>
            </td>
            <td valign="middle" width="2%">&#160;</td>
            <td colspan="2" valign="middle" width="9%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -5.4pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>2-3
                years</u></strong></font></div>
            </td>
            <td valign="middle" width="2%">&#160;</td>
            <td colspan="2" valign="middle" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -5.4pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>4-5
                years</u></strong></font></div>
            </td>
            <td valign="middle" width="2%">&#160;</td>
            <td colspan="2" valign="middle" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -4.5pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>After
                5 years</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="middle" width="22%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="7%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="4%">&#160;</td>
            <td align="right" valign="middle" width="7%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="7%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="8%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="3%">&#160;</td>
            <td align="right" valign="middle" width="7%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="middle" width="22%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Long
                term debt obligations</font></div>
            </td>
            <td align="right" valign="middle" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="middle" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37,8011</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="middle" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="middle" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="middle" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">37,772</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="3%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
            </td>
            <td align="right" valign="middle" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="middle" width="22%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                Expense</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9,9766</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="4%">&#160;</td>
            <td align="right" valign="middle" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="8%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9,974</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="3%">&#160;</td>
            <td align="right" valign="middle" width="7%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="middle" width="22%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
                leases</font></div>
            </td>
            <td align="right" valign="middle" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="middle" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">699</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="4%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="middle" width="7%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">46</font></div>
            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="middle" width="7%" style="border-bottom: black thin solid;">
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            <td align="right" valign="middle" width="2%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="middle" width="8%" style="border-bottom: black thin solid;">
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            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="3%" style="border-bottom: black thin solid;">&#160;</td>
            <td align="right" valign="middle" width="7%" style="border-bottom: black thin solid;">
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            <td align="right" valign="middle" width="2%" style="border-bottom: black double;">
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            <td align="right" valign="middle" width="7%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: -9pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -5.4pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47,8466</font></div>
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            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="4%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="middle" width="7%" style="border-bottom: black double;">
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            </td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">$</font></div>
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            <td align="right" valign="middle" width="7%" style="border-bottom: black double;">
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            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%" style="border-bottom: black double;">
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            </td>
            <td align="right" valign="middle" width="8%" style="border-bottom: black double;">
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            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="3%" style="border-bottom: black double;">
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            </td>
            <td align="right" valign="middle" width="7%" style="border-bottom: black double;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">-</font></div>
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            <td align="right" valign="middle" width="22%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="7%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="4%">&#160;</td>
            <td align="right" valign="middle" width="7%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="7%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="8%">&#160;</td>
            <td align="right" valign="middle" width="2%">&#160;</td>
            <td align="right" valign="middle" width="3%">&#160;</td>
            <td align="right" valign="middle" width="7%">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">21</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="Item3"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      3.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Quantitative
      and Qualitative Disclosures about Market Risk</strong></font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
      about market risks for the three months ended March 31, 2007 does not differ
      materially from that discussed under Item 7A of Cadiz&#8217; Annual Report on Form
      10-K for the year ended December 31, 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="Item4"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      4.</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Controls
      and Procedures</strong></font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Disclosure
      Controls and Procedures</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
      have
      established disclosure controls and procedures to ensure that material
      information related to the Company, including its consolidated entities, is
      accumulated and communicated to senior management, including the Chairman and
      Chief Executive Officer (the &#8220;Principal Executive Officer&#8221;) and Chief Financial
      Officer (the &#8220;Principal Financial Officer&#8221;) and to our Board of Directors. Based
      on their evaluation as of March 31, 2007, our Principal Executive Officer and
      Principal Financial Officer have concluded that the Company's disclosure
      controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under
      the
      Securities Exchange Act of 1934) are effective to ensure that the information
      required to be disclosed by the Company in the reports that it files or submits
      under the Securities Exchange Act of 1934 is recorded, processed, summarized
      and
      reported within the time periods specified in Securities and Exchange Commission
      rules and forms, and such information is accumulated and communicated to
      management, including the principal executive and principal financial officers
      as appropriate, to allow timely decisions regarding required
      disclosures.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Changes
      in Internal Controls Over Financial Reporting </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the evaluation required by paragraph (d) of Rule 13a-15 under
      the Exchange Act, there was no change identified in the Company's internal
      controls over financial reporting that occurred during the last fiscal quarter
      that has materially affected, or is reasonably likely to materially affect,
      the
      Company's internal controls over financial reporting.</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">22</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><a name="PartII">PART
      II - OTHER INFORMATION</a></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      1.&#160;&#160;&#160;&#160; </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Legal
      Proceedings</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
      &#8220;Legal Proceedings&#8221; included in the Company&#8217;s latest Form 10-K for a complete
      discussion.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      1A.&#160;&#160; </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Risk
      Factors</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">There
      have been no material changes to the factors disclosed in Item 1A. Risk Factors
      in our Annual Report on Form 10-K for the year ended December 31,
      2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      2.&#160;&#160;&#160;&#160; </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Unregistered
      Sales of Equity Securities and Use of Proceeds</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      indicated above under Part 1, Item 2 (Management's Discussion and Analysis
      of
      Financial Condition and Results of Operations), in 2007 the holders of 335,440
      common stock warrants that we had issued in November 30, 2004 as part of a
      previously disclosed private placement exercised their right to purchase a
      like
      number of shares of our common stock at an exercise price of $15 per share.
      In
      our Current Report on Form 8-K dated February 21, 2007, we disclosed that we
      had, as of February 26, 2007, issued 326,440 of these shares, and that we
      expected that the remaining 9,000 warrants would be exercised on or before
      March
      2, 2007. Subsequent to the filing of this Form 8-K, these 9,000 warrants were
      exercised, as a result of which on or before March 2, 2007 we issued an
      additional 9,000 shares of common stock (constituting less than 1% of the
      Company's then outstanding common stock).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      issuance of the common stock underlying these 9,000 warrants was not registered
      under the Securities Act of 1933, as amended (the "Securities Act"), but was
      exempt from the registration requirements of the Securities Act by virtue of
      Section 4(2) of the Securities Act as the transactions (including the issuance
      of the warrants) did not involve public offerings, the number of investors
      was
      limited, the investors were provided with information about us, and we placed
      restrictions on the resale of the securities.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      3.&#160;&#160;&#160;&#160; </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Defaults
      Upon Senior Securities</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
      applicable.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      4.&#160;&#160;&#160;&#160; </strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Submission
      of Matter to a Vote of Security Holders</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 54pt; TEXT-INDENT: -54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
      applicable.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
        5.&#160;&#160;&#160;&#160; Other Information</strong></font></div>
    </div>
    <div>&#160;</div>
    <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;&#160;&#160;
      Not applicable.</font></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">23</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
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        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      6. </strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 63pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibits
      </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      following exhibits are filed or incorporated by reference as part of this
      Quarterly Report on Form 10-Q. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 99pt; TEXT-INDENT: -99pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13.5pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2007
      Management Equity Incentive Plan (1)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13.5pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
      of Keith Brackpool, Chairman and Chief Executive Officer of Cadiz Inc. pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">31.2</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13.5pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
      of O&#8217;Donnell Iselin II, Chief Financial Officer and Secretary of Cadiz Inc.
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</font></div>
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      of Keith Brackpool, Chairman and Chief Executive Officer of Cadiz Inc. pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32.2</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 13.5pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Certification
      of O'Donnell Iselin II, Chief Financial Officer and Secretary of Cadiz Inc.
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">__________________</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 54pt;">&#160;</td>
            <td style="width: 18pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(1)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Previously
                filed as appendix A to our definitive proxy dated April 27, 2007
                as filed
                April 27, 2007.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">24</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURE</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Cadiz
      Inc.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>/s/
      Keith
      Brackpool&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 4.5pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>May
      10, 2007</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: -4.5pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 117pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 45pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Keith
      Brackpool&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
      of the Board and Chief Executive Officer</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Principal
      Executive Officer)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:
      </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>/s/
      O&#8217;Donnell Iselin II&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 4.5pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 0pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>May
      10, 2007 </u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: -4.5pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 117pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 45pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">O&#8217;Donnell
      Iselin II</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 4.5pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Financial Officer and Secretary</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Principal
      Financial Officer)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">25</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
      </div>
      <div id="HDR">&#160;</div>
    </div>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>exh31-1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<html>
  <head>
    <title>
    </title>
<!-- Licensed to: Cadiz Inc-->
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</head>
  <body bgcolor="#ffffff"><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      EXHIBIT
      31.1 </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CERTIFICATION
      PURSUANT TO SECTION 302 OF THE</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SARBANES-OXLEY
      ACT OF 2002</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I,
      Keith
      Brackpool, certify that:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.&#160;&#160;
      I have reviewed this Quarterly Report on Form 10-Q of Cadiz Inc.;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.&#160;&#160;
      Based on my knowledge, this report does not contain any untrue statement of
      a
      material fact or omit to state a material fact necessary to make the statements
      made, in light of the circumstances under which such statements were made,
      not
      misleading with respect to the period covered by this report;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;
      Based on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the financial
      condition, results of operations and cash flows of the registrant as of, and
      for, the periods presented in this report;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.&#160;&#160;
      The registrant's other certifying officer and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act
      Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
      (as
      defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
      have:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a)&#160;
      &#160;Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision, to
      ensure that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this report is being
      prepared;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b)&#160;&#160;
      Designed such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with generally accepted accounting principles.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">c)&#160;&#160;
      Evaluated the effectiveness of the registrant's disclosure controls and
      procedures and presented in this report our conclusions about the effectiveness
      of the disclosure controls and procedures, as of the end of the period covered
      by this report based on such evaluation; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">d)&#160;&#160;
      Disclosed in this report any change in the registrant's internal control over
      financial reporting that occurred during the registrant's most recent fiscal
      quarter (the registrant's fourth fiscal quarter in the case of an annual report)
      that has materially affected, or is reasonable likely to materially affect,
      the
      registrant's internal control over financial reporting; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.&#160;&#160;
      The registrant's other certifying officer and I have disclosed, based on our
      most recent evaluation of internal control over financial reporting, to the
      registrant's auditors and the audit committee of the registrant's board of
      directors (or persons performing the equivalent functions):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a)&#160;
      &#160;All significant deficiencies and material weaknesses in the design or
      operation of internal control over financial reporting which are reasonably
      likely to adversely affect the registrant's ability to record, process,
      summarize and report financial information; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b)&#160;&#160;
      Any fraud, whether or not material, that involves management or other employees
      who have a significant role in the registrant's internal control over financial
      reporting.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated:
      May 10, 2007</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>/s/
      Keith Brackpool</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Keith
      Brackpool<br></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
      and Chief Executive Officer </font></div>
  </body>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>exh31-2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<html>
  <head>
    <title>
      Exhibit 31.2
</title>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EXHIBIT
      31.2 </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CERTIFICATION
      PURSUANT TO SECTION 302 OF THE</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SARBANES-OXLEY
      ACT OF 2002</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I,
      O'Donnell Iselin II, certify that:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.&#160;
      &#160;I have reviewed this Quarterly Report on Form 10-Q of Cadiz
      Inc.;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.&#160;&#160;
      Based on my knowledge, this report does not contain any untrue statement of
      a
      material fact or omit to state a material fact necessary to make the statements
      made, in light of the circumstances under which such statements were made,
      not
      misleading with respect to the period covered by this report;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.&#160;&#160;
      Based on my knowledge, the financial statements, and other financial information
      included in this report, fairly present in all material respects the financial
      condition, results of operations and cash flows of the registrant as of, and
      for, the periods presented in this report;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.&#160;&#160;
      The registrant's other certifying officer and I are responsible for establishing
      and maintaining disclosure controls and procedures (as defined in Exchange
      Act
      Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
      (as
      defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
      have:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 90pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a)&#160;
      &#160;Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision, to
      ensure that material information relating to the registrant, including its
      consolidated subsidiaries, is made known to us by others within those entities,
      particularly during the period in which this report is being
      prepared;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b)&#160;&#160;
      Designed such internal control over financial reporting, or caused such internal
      control over financial reporting to be designed under our supervision, to
      provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with generally accepted accounting principles.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">c)&#160;&#160;
      Evaluated the effectiveness of the registrant's disclosure controls and
      procedures and presented in this report our conclusions about the effectiveness
      of the disclosure controls and procedures, as of the end of the period covered
      by this report based on such evaluation; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">d)&#160;&#160;
      Disclosed in this report any change in the registrant's internal control over
      financial reporting that occurred during the registrant's most recent fiscal
      quarter (the registrant's fourth fiscal quarter in the case of an annual report)
      that has materially affected, or is reasonable likely to materially affect,
      the
      registrant's internal control over financial reporting; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.&#160;&#160;
      The registrant's other certifying officer and I have disclosed, based on our
      most recent evaluation of internal control over financial reporting, to the
      registrant's auditors and the audit committee of the registrant's board of
      directors (or persons performing the equivalent functions):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a)&#160;&#160;
      All significant deficiencies and material weaknesses in the design or operation
      of internal control over financial reporting which are reasonably likely to
      adversely affect the registrant's ability to record, process, summarize and
      report financial information; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 63pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">b)&#160;&#160;
      Any fraud, whether or not material, that involves management or other employees
      who have a significant role in the registrant's internal control over financial
      reporting.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated:
      May 10, 2007</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>/s/
      O'Donnell Iselin II</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">O'Donnell
      Iselin II</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Financial Officer and Secretary </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>exh32-1.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
<html>
  <head>
    <title>
      Exhibit 32.1
</title>
<!-- Licensed to: Cadiz Inc-->
<!-- Document Created using EDGARizer HTML 3.0.4.0 -->
<!-- Copyright 2006 EDGARfilings, Ltd., an IEC company.-->
<!-- All rights reserved EDGARfilings.com -->
</head>
  <body bgcolor="#ffffff"><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EXHIBIT
      32.1</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">STATEMENT
      PURSUANT TO SECTION 906 THE SARBANES-OXLEY ACT OF 2002 BY PRINCIPAL EXECUTIVE
      OFFICER AND PRINCIPAL FINANCIAL OFFICER</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I,
      Keith
      Brackpool, herby certify, to my knowledge, that:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
      the
      accompanying Quarterly Report on Form 10-Q of Cadiz Inc. for the period ended
      March 31, 2007 (the "Report") fully complies with the requirements of Section
      13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934,
      as
      amended; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.
      the
      information contained in the Report fairly presents, in all material respects,
      the financial condition and results of operations of Cadiz Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IN
      WITNESS WHEREOF, the undersigned has executed this Statement as of the date
      first written above.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated:
      May 10, 2007</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>/s/
      Keith Brackpool</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Keith
      Brackpool</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chairman
      and Chief Executive Officer</font></div>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>exh32-2.htm
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
<html>
  <head>
    <title>
      Exhibit 32.2
</title>
<!-- Licensed to: Cadiz Inc-->
<!-- Document Created using EDGARizer HTML 3.0.4.0 -->
<!-- Copyright 2006 EDGARfilings, Ltd., an IEC company.-->
<!-- All rights reserved EDGARfilings.com -->
</head>
  <body bgcolor="#ffffff"><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      EXHIBIT
      32.2</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">STATEMENT
      PURSUANT TO SECTION 906 THE SARBANES-OXLEY ACT OF 2002 BY PRINCIPAL EXECUTIVE
      OFFICER AND PRINCIPAL FINANCIAL OFFICER</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I,
      O'Donnell Iselin II, herby certify, to my knowledge, that:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.
      the
      accompanying Quarterly Report on Form 10-Q of Cadiz Inc. for the period ended
      March 31, 2007 (the "Report") fully complies with the requirements of Section
      13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934,
      as
      amended; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 27pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.
      the
      information contained in the Report fairly presents, in all material respects,
      the financial condition and results of operations of Cadiz Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">IN
      WITNESS WHEREOF, the undersigned has executed this Statement as of the date
      first written above.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dated:
      May 10, 2007</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>/s/
      O'Donnell Iselin II</u></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">O'Donnell
      Iselin II</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Chief
      Financial Officer and Secretary</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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