Cadiz Inc – ‘10-KT’ for 12/31/96

As of:  Monday, 4/14/97   ·   For:  12/31/96   ·   Accession #:  727273-97-10   ·   File #:  0-12114

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Annual-Transition Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-KT       Annual-Transition Report                              72±   307K 
 2: EX-10       Material Contract                                     10±    47K 
 3: EX-10       Material Contract                                     10±    49K 
 4: EX-21       Subsidiaries of the Registrant                         1      4K 
 5: EX-27       Financial Data Schedule (Pre-XBRL)                     1      6K 

10-KT   —   Annual-Transition Report
Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION                    
Washington, D.C. 20549                  

FORM 10-K                   

MARK ONE [1]                                                              
[  ] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE                 
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]    

For the fiscal year ended ....                

OR                

[ X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)                    
OF THE  SECURITIES EXCHANGE ACT OF 1934 [NO FEE                 
REQUIRED]                                                       

For the transition period from April 1, 1996 to December 31, 1996               
-----------------------------------------------------------------               
Commission File Number 0-12114                

CADIZ LAND COMPANY, INC.                
(Exact name of registrant specified in its charter)                 

DELAWARE                        77-0313235        
(State or other jurisdiction of         (I.R.S. Employer              
incorporation or organization)         Identification No.)            

10535 Foothill Boulevard, Suite 150                                   
Rancho Cucamonga, California                  91730             
(Address of principal executive offices)        (Zip Code)                

Registrant's telephone number, including area code: (909) 980-2738      

Securities registered pursuant to Section 12(b) of the Act:  None       

Title of each class          Name of each exchange on which registered  
-------------------          ----------------------------------------   
None                                   None                 

Securities registered pursuant to Section 12(g) of the Act:       
Common Stock      
(Title of Class)      

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.                               

Yes  X         No             
---           ---     

Indicate by check mark if disclosure of delinquent filers pursuant to           
Item 405 of regulation S-K (Section 220.405 of this chapter) is not contained   
herein, and will not be contained to the best of registrant's knowledge,        
in definitive proxy or information statements incorporated by reference         
in Part III of this Form 10-K or any amendment to this Form 10-K.               

-----               

As of April 4, 1997, the registrant had 24,163,300 shares of Common Stock       
outstanding.  The aggregate market value of the Common Stock held by            
nonaffiliates as of April 4, 1997, was approximately $119,191,000 based on      
the average of the closing bid and asked prices on that date.                   

Documents Incorporated by Reference                   
NONE                  

PART I                  

ITEM 1.      BUSINESS                                                           

The long-term strategy of Cadiz Land Company, Inc. (the               
"Company") is to acquire and develop water-related land and                     
agricultural assets.  The Company has created an integrated and                 
complimentary portfolio of landholdings, water resources, and                   
agricultural operations located within central and southern                     
California which either possess sizable assured supplies of                     
water or can, in future years, utilize water supplied from other                
Company properties.  Management believes that, with both the                    
increasing scarcity of water supplies in California and the                     
increasing demand for water, the Company's access to water will                 
provide it with a competitive advantage both as a major                         
agricultural concern and as a supplier of water which will lead                 
to continued appreciation in the value of the Company's                         
portfolio.                                                                      

In 1996, the Company significantly enhanced this portfolio              
through its acquisition of Sun World International, Inc. ("Sun                  
World").  The Sun World acquisition has made the Company one of                 
the largest fully integrated agricultural companies in                          
California.  The Sun World acquisition added to the Company's                   
portfolio more than 17,000 acres of prime agricultural land,                    
packing facilities, marketing expertise, proprietary agricultural               
products and the highly regarded Sun World brand name.                          

Sun World ships approximately 75 varieties of fresh produce           
to all 50 states in the United States and exports fresh fruits                  
and vegetables to over 30 foreign countries.  Produce grown or                  
distributed by Sun World reaches more than 600 accounts                         
including supermarket retailers, food service entities,                         
warehouse clubs and international trading companies throughout                  
North America, Europe and Pacific Rim countries.  For the twelve                
months ended December 31, 1996, Sun World recorded revenues of                  
$100.4 million.                                                                 

The acquisition of Sun World also added valuable water                
rights to the Company's existing water resource development                     
operations.  In addition to its Sun World properties, the                       
Company holds more than 39,000 acres of land in eastern San                     
Bernardino County.  These landholdings are underlain by                         
excellent groundwater resources and are located adjacent to the                 
major aqueduct systems of central and southern California, and                  
in close proximity to the Colorado River.  The Company expects                  
to utilize these resources to participate in a broad variety of                 
water transfer and storage projects, including the transfer of                  
surplus water to public agencies which require supplemental                     
sources of water.                                                               

The Company continually seeks to develop and manage its               
land, water and agricultural resources for their highest and                    
best use.  Agricultural development will enable the Company to                  
maximize the value of its landholdings while generating cash                    
flow.  The Company will continue to pursue opportunities for use                
of its water resources, both for internal operations and to                     
relieve water shortages in other portions of Southern                           
California.                                                                     

(a)  General Development of Business                                            
-------------------------------                                       

As part of its current business plan, the Company's land              
acquisition, development activities and agricultural                            
operations are conducted for the purpose of enhancing the                       
long-term appreciation of its properties.  See "Narrative                       
Description of Business," below.                                                

On September 13, 1996, the Company acquired all of the                
stock of a reorganized Sun World pursuant to a consensual plan                  
of reorganization (Debtors' Modified Fourth Amended                             
Consolidated Plan of Reorganization dated June 3, 1996                          
(Modified)) which was confirmed by the U.S. Bankruptcy Court                    
at a hearing on July 12, 1996 (the "Plan of Reorganization")                    
for a net purchase price of approximately $178 million (the                     
"Sun World Acquisition").  Sun World and certain subsidiaries                   
of Sun World had filed voluntary petitions for relief under                     
Chapter 11 of the Bankruptcy Code on October 3, 1994 after                      
debt restructuring negotiations with its existing lenders failed.               

The net purchase price of approximately $178 million                  
consisted of the following:  (i) assumption of $156 million of                  
restructured debt with Sun World's existing lenders (of which                   
a principal reduction in the amount of $5.5 million was made                    
by Cadiz concurrent with the acquisition); (ii) $12 million to                  
pay claims of Sun World's unsecured creditors as determined                     
during the reorganization process; (iii) $7 million in cash                     
and stock delivered both to previous holders of the stock of                    
Sun World upon transfer of stock to Cadiz and to existing                       
unsecured creditors in satisfaction of claims; and (iv) $3                      
million of acquisition fees and costs.                                          

Subsequent to the Sun World Acquisition, the Company                  
changed its fiscal year end from March 31 to December 31 in                     
order to align the Company's year end with that of Sun World.                   

In addition to Sun World, over the past 13 years the                  
Company has acquired more than 39,000 acres in various                          
portions of eastern San Bernardino County, California.                          
Although located in desert terrain, these landholdings are                      
underlain by groundwater resources having active recharge of                    
high quality.  In addition, management believes the Company's                   
landholdings have excellent potential for agricultural                          
development and other uses, including municipal, recreational,                  
and industrial applications.                                                    

Pursuant to its business strategy, the Company has                    
utilized its working capital primarily for  development                         
purposes; that is, for purposes designed to increase the long-                  
term value of its properties.  A portion of these expenditures                  
has related to the planned Cadiz Valley and Piute Valley                        
groundwater transfer and storage projects.  See "Narrative                      
Description of Business - Water Resource Development," below.                   
In addition, agricultural development and operations continue                   
to be an integral part of the Company's ongoing business                        
strategy, maximizing the value of its landholdings while                        
generating cash flow.  See "Narrative Description of Business                   
- Agricultural Operations" below.                                               

The Company's Sun World Acquisition is an integral part                 
of this strategy.  Sun World has added to the Company's                         
portfolio approximately 17,300 acres of prime agricultural                      
land in the San Joaquin and Coachella Valleys, increasing the                   
Company's total landholdings to approximately 57,000 acres.                     
See Item 2, "Properties."                                                       

In May 1992, the Company's shareholders approved the                  
reincorporation of the Company into Delaware under the name                     
Cadiz Land Company, Inc.  As a part of the reincorporation,                     
the Company's common stock was reverse split on a one-for-five                  
basis, giving each shareholder of the Company one share of                      
Cadiz Land Company, Inc. stock for every five shares of                         
Pacific Agricultural Holdings, Inc. ("PAH") stock held at the                   
time of the reincorporation.                                                    

(b)  Financial Information About Industry Segments                              
----------------------------------------------                        
During its nine months ended December 31, 1996, the                   
Company operated in one industry segment:  resource development.                
See Consolidated Financial Statements.  Also, see Item 7,                       
"Management's Discussion and Analysis".                                         

(c)  Narrative Description of Business                                          
----------------------------------                                    
Pursuant to its business strategy, the Company                        
continually seeks to develop and manage its portfolio of land,                  
water and agricultural resources for their highest and best                     
use.  The development and management activities of the Company                  
are currently focused on agricultural operations (primarily                     
through its wholly-owned Sun World subsidiary) and water                        
resource development.  Agricultural development will enable                     
the Company to maximize the use of its landholdings while                       
generating cash flow.  The Company will continue to pursue                      
opportunities for the use of its water resources, both for                      
internal operations and to relieve water shortages in other                     
portions of Southern California.                                                

AGRICULTURAL OPERATIONS                                                         

With the Sun World Acquisition, the Company has become                
one of California's largest  vertically integrated                              
agricultural companies which combines an extensive research                     
and development program, year round sourcing, farming and                       
packing activities and strong marketing capabilities.  For the                  
twelve months ended December 31, 1996, Sun World recorded                       
revenues of $100.4 million.                                                     

PRODUCT LINE.  Sun World ships 75 different varieties of              
fresh fruits and vegetables to all 50 States and to more than                   
30 foreign countries.  Sun World is a leading grower and marketer               
of table grapes, seedless watermelons, colored sweet peppers,                   
plums, peaches, nectarines, apricots and lemons.  It is also                    
one of California's largest independent marketers of grapefruit,                
tangerines, mandarins, and dates.                                               

The breadth and diversity of the product line helps to                
minimize the impact of individual crop earnings fluctuations.                   
Further, the breadth and diversity of its product offering                      
provides Sun World with greater presence and influence with                     
its grocery and food service customers.                                         

Although many fruits and vegetables are fungible                      
commodities, Sun World has adopted a strategy of developing or                  
acquiring specialty produce varieties with unique                               
characteristics which differentiate them from commodity                         
produce varieties.  Most of these varieties are harvested                       
during favorable marketing windows when available supply from                   
competitors is limited.  These specialty varieties typically                    
command a price premium and are less subject to the same price                  
volatility than the commodity varieties.  They also provide                     
Sun World with a dominant position in a number of product                       
categories.  Examples of the branded produce grown and                          
marketed by Sun World include Superior Seedless  table grapes,                  
Black Diamond  plums, Sun World Seedless  watermelons, Star                     
Sweet  super red grapefruit, Honeycot  apricots, Amber Crest                    
peaches and Sun World sweet colored peppers.  These products                    
evolved through a combination of internal development and                       
acquisition.  Sun World's research and development center is                    
dedicated to developing additional high value proprietary                       
varieties.  See "Proprietary Product Development," below.                       

FARMING OPERATIONS.  Sun World's farming operations                   
produce approximately 7 million units of fruits and vegetables                  
annually.  Its principal agricultural lands are located in the                  
San Joaquin and Coachella valleys of California.  See Item 2,                   
"Properties."                                                                   

Sun World properties are primarily dedicated to producing             
permanent commercial crops and, to a lesser extent, annual (or                  
row) crops.  Additionally, over 1,300 acres are currently                       
utilized for developing crops (e.g. vines and trees that have                   
not yet reached a commercial maturity).  Subsequent to the Sun                  
World acquisition, the Company developed a crop plan that                       
provided for the removal of certain under-performing permanent                  
crops and the continued development of certain proprietary                      
varieties of grapes and tree fruit.  Given the Company's                        
current crop allocation plan, it is now redeploying marginally                  
productive acreage to produce more varieties of crops which                     
are available for delivery at peak pricing windows throughout                   
the year.                                                                       

Under an agricultural lease entered into concurrently                 
with the Sun World Acquisition, Sun World also operates the                     
Company's 1,600 acres of developed agricultural property at                     
Cadiz.  The Company believes that its Cadiz Valley                              
agricultural operations will benefit by virtue of the ability                   
of the Company to grow, pack and market the Cadiz produce                       
under the Sun World label and to market it to Sun World's                       
worldwide customer base.                                                        

PACKING AND MARKETING OPERATIONS.  In addition to                     
merchandising its own products, Sun World provides marketing                    
and packing services to third party growers.  For third party                   
growers, Sun World provides three key benefits:  (i) Sun                        
World's brand name, proprietary products and reputation with                    
wholesalers resulting in a significant pull through effect;                     
(ii) a full complement of services that include packing,                        
marketing and sales; and (iii) a dedicated sales force                          
servicing over 600 customers throughout the world.                              

Sun World's packing facilities handle approximately 10                
million units of produce annually.  These facilities provide                    
harvesting, packing, cooling and shipping services for Sun                      
World production, as well as for other commercial clients.                      
Currently, Sun World owns four facilities, three of which are                   
located in the Coachella Valley and one of which is located                     
in the San Joaquin Valley.  See Item 2,  "Properties."                          

Sun World's vertically integrated operations enable it to             
offer the market a continuous stream of new, specialty                          
products which receive a market premium coupled with a large                    
basket of other produce staples.  As a significant grower, Sun                  
World is able to manage the quality of its own product line,                    
and as a significant packer/marketer, Sun World works with                      
other growers to ensure product quality through packing and                     
distribution.  As a result, on average, the Company sells 12                    
to 13 million units annually with an average wholesale value                    
of approximately $120 million.                                                  

Sun World's sourcing, both external and internal, is                  
diversified geographically.  Sun World's owned and leased                       
farming operations are located throughout California from the                   
Coachella Valley in the south to central California's San                       
Joaquin Valley as well as operations near the coast.  Sun                       
World sources externally produced product from throughout                       
California, from other areas of the United States, and from                     
international sources.  This geographic diversification not                     
only reduces the impact that unfavorable weather conditions                     
and infestations could have on Sun World's packing and                          
marketing operations but also provides Sun World with a longer                  
selling season for many crops since the harvests occur at                       
different times.  In addition, geographic diversification also                  
allows Sun World the ability to provide the quality and                         
breadth of product throughout the year which is being demanded                  
by retailers.                                                                   

Sun World's customer base consists of more than 600                   
accounts including supermarket retailers, food service                          
entities, warehouse clubs, and international trading companies                  
located in approximately 30 countries.  Domestic customers                      
include national retailers such as Safeway Stores and American                  
Stores; club stores, including PriceCostco and Sam's; and food                  
service distributors, including Sysco and Alliant.                              
Approximately 10% of Sun World's products are marketed outside                  
of the United States in Europe, Australia, Japan, Hong Kong,                    
Singapore, Malaysia and Taiwan.  Only one national retailer                     
(representing approximately 15% of calendar year 1996 gross                     
sales made by Sun World) accounts for more than 10% of Sun                      
World's revenues.                                                               

PROPRIETARY PRODUCT DEVELOPMENT.  Sun World has a long                
history of product innovation, and its research and                             
development center maintains a fruit breeding program that has                  
introduced dozens of proprietary fruit varieties in the last                    
five years.  Recent product successes include the Black                         
Diamond  plum, the Amber Crest  peach and the Honeycot  apricot.                
There are several other promising grape and tree fruit varieties                
which are scheduled for commercial planting and production in the               
near future.                                                                    

Sun World utilizes approximately 235 acres for its research and       
development center and crop experimentation.  The research and development      
center facility houses tissue culture rooms, growth rooms, four greenhouses,    
and over 200 acres of experimental growing crops.                               

As a result of over 20 years of research and development, Sun         
World holds rights to more than 600 patents and trademarks around the           
world.  The patent registrations exist in most major fruit producing            
countries and the trademarks are held in both fruit producing and               
consuming regions.  Sun World's patents have varying expiration dates;          
however, the expiration of any individual patent will not have a material       
effect upon Sun World's operations.                                             

Additionally, Sun World has a 50% ownership interest in American      
Sunmelon, a partnership engaged in the proprietary development, production      
and marketing of seedless watermelon seed.  American Sunmelon generated         
net income of approximately $3.5 million for calendar year 1996.                

WATER RESOURCE DEVELOPMENT                                                      

The increasing scarcity of water supplies in California will          
lead to increasing dependence on water transfer and storage projects            
within the state.  The Company's portfolio of water resources, located          
in close proximity to the major aqueduct systems of central and                 
southern California such as the State Water Project, the Colorado               
River Aqueduct, and the Colorado River, provides the Company with the           
opportunity to participate in a variety of water banking, exchange and          
transfer and storage projects in partnership with regional public               
water agencies.                                                                 

CADIZ WATER TRANSFER AND STORAGE PROJECT.  The Company's 27,400       
acres in the Cadiz and Fenner Valleys of eastern California (the "Cadiz         
Property") are underlain by a substantial high quality groundwater basin.       
This groundwater is recharged by rain and snowfall within a catchment           
area of nearly 1,300 square miles.  Average annual recharge is estimated        
by independent experts to be in the range of 20,000 to 30,000 acre-feet.        
See Item 2,  "Properties - The Cadiz Property."                                 

Pursuant to an Environmental Impact Report ("EIR") and land use       
approvals by San Bernardino County, the Company is authorized to pump           
approximately 30,000 acre-feet of groundwater per year for irrigation           
of its Cadiz Valley property.  An acre-foot is 326,000 gallons, or              
enough for approximately two families for one year.  The Company                
currently uses approximately 6,000 acre-feet per year to irrigate               
its Cadiz Valley agricultural development and planned near-term                 
development will likely require no more than 10,000 acre-feet per               
year.  As a result, the Company has the ability to transfer groundwater         
- surplus to its present and near-term needs - to public agencies               
which require supplemental sources of water.  Additionally, independent         
geotechnical and engineering studies confirm that the Company's Cadiz           
Valley properties are well suited for temporary storage of water which          
could be imported from the Colorado River during periods of excess supply.      

The Cadiz Water Transfer and Storage Project will require further     
regulatory approval.  The Company began technical and environmental             
investigations in 1994, and is pleased with the process made to date.           
The Company is in discussions regarding transfer and storage agreements         
with several public water agencies.  These agreements, when complete, will      
determine pricing formulas, financing and ownership of the facilities           
constructed to deliver and store the water.                                     

PIUTE AND OTHER TRANSFER AND STORAGE PROJECTS.  The Company           
has also commenced water development operations at its 7,300 acre Piute         
property, which is located in eastern San Bernardino County approximately       
15 miles from the resort community of Laughlin, Nevada and about 12 miles       
from the Colorado River town of Needles, California.  Hydrological studies      
and testing of a full scale production well have demonstrated that this         
landholding is underlain by groundwater of excellent quality.  Average          
annual recharge is estimated by independent experts to be in the range          
of 10,000 to 20,000 acre-feet.  See Item 2, "Properties - The Piute             
Property."                                                                      

Additional technical and environmental investigations are currently   
underway for a water development project (the "Piute Project") anticipated      
to transfer approximately 10,000 to 15,000 acre feet per year.  The             
Company is currently undertaking discussions with prospective purchasers        
of water from the Piute Project, although no formal agreements have been        
executed.                                                                       

Exploratory drilling is scheduled during 1997 to test the potential   
for groundwater development, transfer, and underground storage at other         
properties held by the Company in southeastern California.                      

SUN WORLD WATER RESOURCES.  The Sun World Acquisition brought to the  
Company valuable water rights in various parts of central and southern          
California. The Company believes with increasing water shortages in             
California, land with prime water rights will increase substantially in         
value.                                                                          

As irrigation technology continues to improve, Sun World's water      
resources may be in excess of actual demands.  Such excess supplies may         
be available for further agricultural development, or for possible water        
transfers, exchanges or banking.                                                

Sun World's landholdings and associated water resources are located   
adjacent to the major aqueduct systems of central and southern California,    
and in close proximity to the Colorado River.  These holdings complement        
the Company's other groundwater resources, and will enhance the Company's       
opportunities to participate in a broad variety of water transfer, storage      
exchange or banking projects.                                                   

SEASONALITY                                                                     

Sun World's agricultural operations are impacted by the               
general seasonal trends that are characteristic of the                          
agricultural industry.  Sun World has historically received                     
the majority of its net income during the second and third                      
calendar quarters following the harvest and sale of its table                   
grape and tree fruit crops.  Due to this concentrated                           
activity, the Company has, therefore, historically incurred a                   
loss with respect to its agricultural operations in the first                   
and fourth calendar quarters.                                                   

In connection with the water resource development                     
activities of the Company, revenues are not expected to be                      
seasonal in nature.  The Company does not expect that                           
contracts entered into for the transfer or storage of water                     
will provide for revenue payments varying significantly from                    
season to season.                                                               

COMPETITION                                                                     

The agricultural business is highly competitive.  Sun                 
World's competitors include a limited number of large                           
international food companies, as well as a large number of                      
smaller independent growers and grower cooperatives.  No                        
single competitor has a dominant market share in this industry                  
due to the regionalized nature of these businesses.  Sun World                  
utilizes brand recognition, product quality, harvesting in                      
favorable product windows, effective customer service and                       
consumer marketing programs to enhance its position within the                  
highly competitive fresh food industry. Consumer and                            
institutional recognition of the Sun World trademark and                        
related brands and the association of these brands with high                    
quality food products contribute significantly to Sun World's                   
ability to compete in the market for fresh fruit and                            
vegetables.                                                                     

The Company faces competition for the acquisition,                    
development and sale of its properties from a number of                         
competitors, some of which have significantly greater                           
resources than the Company.  The Company may also face                          
competition in the development of water resources associated                    
with its properties.  Since California has scarce water                         
resources and an increasing demand for available water, the                     
Company believes that price and reliability of delivery are                     
the principal competitive factors affecting transfers of water                  
in California.                                                                  

EMPLOYEES                                                                       

As of December 31, 1996, the Company employed a total of              
985 full-time employees.  Sun World from time to time engages                   
various part time and seasonal employees, with a seasonal high                  
of approximately 2,500 part time employees. Approximately 119 of                
the Company's employees are represented by a labor union pursuant               
to a contract that expires in 1999.  Generally, the Company believes            
that its employee relations are good.                                           

REGULATION                                                                      

Certain areas of the Company's operations are subject to              
varying degrees of federal, state and local laws and                            
regulations.  The Company's agricultural operations are                         
subject to a broad range of evolving environmental laws and                     
regulations.  These laws and regulations include the Clean Air                  
Act, the Clean Water Act, the Resource Conservation and                         
Recovery Act, the Federal  Insecticide, Fungicide and                           
Rodenticide Act and the Comprehensive Environmental Response,                   
Compensation and Liability Act.  Compliance with these foreign                  
and domestic laws and related regulations is an ongoing                         
process which is not currently expected to have a material                      
effect on the Company's capital expenditures, earnings or                       
competitive position.  Environmental concerns are, however,                     
inherent in most major agricultural operations, including                       
those conducted by the Company, and there can be no assurance                   
that the cost of compliance with environmental laws and                         
regulations in the future will not be material.                                 

The Company's food operations are also subject to                     
regulations enforced by, among others, the U.S. Food and Drug                   
Administration and state, local  and foreign equivalents and                    
to inspection by the U.S. Department of Agriculture and other                   
federal, state, local and foreign environmental and health                      
authorities. Among other things, the U.S. Food and Drug                         
Administration enforces statutory standards regarding the                       
safety of food products, establishes ingredients and                            
manufacturing procedures for certain foods, establishes                         
standards of identity for foods and determines the safety of                    
food substances in the United States.  Similar functions are                    
performed by state, local and foreign governmental entities                     
with respect to food products produced or distributed in their                  
respective jurisdictions.  Existing environmental regulations                   
have not, in the past, had a materially adverse effect upon                     
the operations of the Company, and the Company believes that                    
existing environmental regulations will not, in the future,                     
have a materially adverse effect upon its operations.  There                    
can be no assurances, however, as to the effect of any                          
environmental regulations which may be adopted in the future.                   

As the Company proceeds with the development of its                   
properties, including related infrastructure, the Company will                  
be required to satisfy various regulatory authorities that it                   
is in compliance with the laws, regulations and policies                        
enforced by such authorities.  Groundwater development, and                     
the export of surplus groundwater for sale to single entities                   
such as public water agencies, are not subject to regulation                    
by existing statutes, other than general environmental                          
statutes applicable to all development projects.  Although                      
applicable laws, regulations and policies have not had a                        
materially adverse effect upon the ability of the Company to                    
develop its Cadiz or other properties to date, management                       
cannot predict with certainty what requirements, if any, may                    
be imposed by regulators upon future development.  In                           
addition, the time and costs associated with obtaining                          
regulatory approvals for resource development are significant,                  
and there can be no assurance that the Company will receive                     
desired approvals for future development plans.                                 

ITEM 2.  PROPERTIES                                                             

The Company currently leases its executive offices in Rancho          
Cucamonga, California; however, it expects to relocate these offices            
to Los Angeles County within the next several months.  The Company              
also maintains a development office in San Bernardino, California.              
Sun World owns its main packing facilities and administrative offices           
in Bakersfield, California and owns 3 packing facilities and leases             
its sales offices in Coachella, California.  The Company and each of            
its subsidiaries believe that their property and equipment are                  
generally well maintained, in good operating condition and                      
adequate for their present needs.                                               

The following is a description of the Company's                       
significant properties.                                                         

THE CADIZ PROPERTY                                                              

In 1984, the Company conducted an investigation of the                
feasibility of the agricultural development of land located in                  
the Mojave desert near Cadiz, California, and confirmed the                     
availability of prime quality water in commercial quantities                    
appropriate for agricultural development.  Since 1985, the                      
Company has acquired over 27,000 acres in the Cadiz vicinity.                   

The Company has determined that the groundwater basin                 
which underlies the Cadiz property contains more water than is                  
needed for both the present and projected agricultural                          
development requirements of the property.  The Company                          
therefore intends to develop a water banking and transfer                       
program in connection with this property.  See Item 1,                          
"Business - Narrative Description of Business - Water Resource                  
Development."                                                                   

In November 1993, the San Bernardino County Board of                  
Supervisors unanimously approved a General Plan Amendment                       
establishing an agricultural land use designation for 9,600                     
acres at Cadiz for which 1,600 acres have been developed and                    
are leased to Sun World.  This Board action represented the                     
largest land use approval on behalf of a single property                        
holder in the County's known history.  This action also                         
approved permits to construct infrastructure and facilities to                  
house as many as 1,150 seasonal workers and 170 permanent                       
residents (employees and their families) and allows for the                     
withdrawal of more than 1,000,000 acre-feet of groundwater                      
from the Company's underground water basin.                                     

Substantially all Cadiz acreage is held in fee directly by the Company          
or through its wholly-owned subsidiary, Cadiz Valley                            
Development Corporation ("CVDC").                                               

SUN WORLD PROPERTIES                                                            

FARM PROPERTIES.  Sun World owns approximately 17,300               
acres and leases approximately 2,100 acres of improved land in                  
central and southern California.  The majority of this land is                  
used for the cultivation of permanent and annual crops and                      
support activities, including packing facilities.                               

Sun World owned farming property is divided between five            
distinct geographic regions: Madera, Bakersfield and Arvin                      
(located within the San Joaquin Valley), Coachella (located in                  
the state's southeastern corner near Palm Springs) and Blythe                   
(located approximately 100 miles east of the Coachella Valley                   
adjoining the Colorado River).                                                  

PACKING AND HANDLING FACILITIES.  Sun World owns four               
packing and handling facilities, three of which are located in                  
the Coachella Valley and one of which is located in the San                     
Joaquin Valley at Kimberlina, near Bakersfield.                                 

The Kimberlina facility, located on an 83 acre parcel               
owned by Sun World, consists of 95,000 square feet of cold                      
storage areas and 50,000 square feet for tree fruit packing                     
(including two highly automated tree fruit production lines).                   
An additional 14,300 square feet is devoted to office space.                    

Sun World's primary Coachella Valley facility consists of           
two independent buildings located on 22 acres of industrial                     
commercial zoned land in Coachella, California, two miles                       
south of Indio.  The 22 acres consists of 5 acres of buildings                  
and improvements, 6 acres of packing, and 11 acres of open                      
land.  One building is used primarily for the packing of                        
citrus, for receiving table grapes, for cold storage and for                    
office space.  The other building is used primarily for                         
receiving, cooling and storing table grapes.                                    

Sun World's other operating facility in Coachella                 
consists of one building on 4 acres of land and is used                         
primarily for packing watermelons and citrus and for storage.                   
Currently, the third Coachella facility is not being used for                   
operations and is held for sale.                                                

All of the Sun World properties are subject to                    
encumbrances in favor of Sun World's two primary lenders as                     
security for loans with outstanding balances aggregating                        
approximately $130 million as of December 31, 1996.  See Item                   
7, "Management's Discussion and Analysis of Financial                           
Condition and Results of Operations - Liquidity and Capital                     
Resources - Current Financing Arrangements."                                    

THE PIUTE PROPERTY                                                              

The Piute property consists of approximately 7,300 acres              
and is located approximately 60 miles east of Cadiz and                         
approximately 15 miles west of the Colorado River and                           
Laughlin, Nevada, a small, fast growing town with hotels,                       
casinos and water recreation facilities.  The Piute property                    
was identified for acquisition by the Company by a combination                  
of the satellite imaging and geological techniques which were                   
used by the Company to identify water at Cadiz.                                 

The Piute acreage adjoins Highway 95, which is a direct               
route to Las Vegas, approximately 60 miles north.  The Santa                    
Fe Railroad passes through the land and Interstate 40 is                        
approximately 12 miles to the south.  The property is held by                   
the Company in fee title as to approximately 3,600 acres, with                  
the remaining acreage under option.                                             

The Company has commenced the development of the water                
resources of this property.  See Item 1,  "Business -                           
Narrative Description of Business - Water Resource                              
Development."                                                                   

OTHER PROPERTIES                                                                

In addition to the Cadiz and Piute properties, the                    
Company owns approximately 4,200 additional acres in the                        
Mojave Desert as to which development has not yet commenced.                    
The Company will continue to seek to acquire additional                         
properties both in Southern California desert regions and                       
elsewhere which are believed to be suitable for development.                    

All of the Company's non-Sun World fee property is                  
subject to encumbrances in favor of the Company's two primary                   
lenders as security for loans with outstanding balances                         
aggregating approximately $18.5 million as of December 31,                      
1996.  See Item 7, "Management's Discussion and Analysis of                     
Financial Condition and Results of Operations - Liquidity and                   
Capital Resources - Current Financing Arrangements."                            

ITEM 3. LEGAL PROCEEDINGS                                                       

In November 1995, the San Bernardino County Board of            
Supervisors certified an Environmental Impact                                   
Report/Environmental Impact Statement ("EIR/EIS"), and                          
approved a Conditional Use Permit for the proposed                              
construction and operation of a substantial landfill on the                     
shore of Bristol Lake near Amboy, California (the "Rail Cycle"                  
Project).  The general partner of Rail Cycle is controlled by                   
WMX Technologies, Inc. (formerly Waste Management, Inc.). The                   
Rail Cycle Project would be located within a few miles of land                  
owned by the Company at Cadiz, California, which the County of                  
San Bernardino has designated for agricultural use in its                       
General Plan.                                                                   

The Company has vigorously opposed the Rail Cycle Project       
on a number of grounds.  In December 1995, an action styled                     
Cadiz Land Company, Inc. vs. County of San Bernardino, et. al.                  
Case No. BCV 02341 was filed by the Company in Superior Court                   
in San Bernardino County.  The action challenges the various                    
decisions by the County of San Bernardino relative to the                       
Rail Cycle Project.  Named in this action, in addition to the                   
County of San Bernardino, were the Board of Supervisors of the                  
County of San Bernardino, three individual members of the                       
Board of Supervisors, an employee of the County, and                            
Rail Cycle.  On February 1, 1996, Rail Cycle and the County                     
removed the case to Federal District Court for the Central                      
District of California (Case No. CV-96-740-JGD [BQRS]).                         
However, the case has subsequently been remanded back to the                    
San Bernardino Superior Court.  The Company alleges that the                    
actions of the County of San Bernardino did not comply with                     
the guidelines prescribed by the California Environmental                       
Quality Act and violated state planning and zoning laws.  The                   
action seeks to set aside the county certification of the                       
EIR/EIS and approval of the proposed Rail Cycle Project.  The                   
Company continues to believe the proposed Rail Cycle Project,                   
if constructed and operated as currently designed, poses                        
environmental risks both to the Company's agricultural                          
operations at Cadiz and to the groundwater basin underlying                     
the Cadiz property.  Accordingly, the Company intends to                        
pursue a claim for damages against the County of San                            
Bernardino and Rail Cycle and the action seeks compensatory                     
damages in excess of $75 million.  The action is currently in                   
the discovery phase.  The court has set July 11, 1997 to                        
commence a hearing on the Company's land use and regulatory                     
claims.  A trial on the issue of the Company's monetary                         
damages will be scheduled at a later date.  The Company                         
intends to continue vigorously prosecuting its claims.                          

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

The Company is involved in other legal and administrative         
proceedings and claims.  In the opinion of management, the                      
ultimate outcome of each proceeding or all such proceedings                     
combined will not have a material adverse impact on the                         
financial position of the Company.                                              

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     

The results of the Company's Annual Meeting of                  
Stockholders held November 8, 1996 were reported in the                         
Company's Quarterly Report on Form 10-Q for the quarterly                       
period ended September 30, 1996.                                                

PART II                   

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED                       
STOCKHOLDER MATTERS                                             

The Company's common stock is traded on the Nasdaq              
National Stock Market under the symbol "CLCI".  Since July                      
1994, the Company's common stock has been traded as a National                  
Market System security.  The following table reflects, for                      
periods up until the period ended June 30, 1994, inter-dealer                   
quotations, without retail markup, markdown or commission, and                  
may not necessarily represent actual transactions.  For the                     
periods ended September 30, 1994 and thereafter, the table                      
reflects actual sales transactions.  The high and low range of                  
the common stock and bid prices, where applicable, for the                      
dates indicated have been provided by Nasdaq.                                   

Quarter Ended          Bid Prices        Asked Prices                     
--------------          -----------       ------------                      
  High        Low      High        Low
  ----        ----     ----        ---
1994:                                                                   
March 31         $   6.125 $   4.375 $   6.500 $   4.625                
June 30          $   6.000 $   3.750 $   6.250 $   4.125                

        High               Low
          Sales Price        Sales Price
           -----------        ------------

September 30             $  5.250              $ 3.75                   
December 31              $  5.250              $ 4.25                   

1995:                                                                       
March 31                 $  5.438              $ 4.125                  
June 30                  $  4.875              $ 4.000                  
September 30             $  5.500              $ 3.688                  
December 31              $  6.250              $ 4.063                  

1996:                                                                       
March 31                 $  6.375              $ 5.250                  
June 30                  $  6.500              $ 5.219                  
September 30             $  6.000              $ 3.875                  
December 31              $  5.625              $ 3.875                  

1997:                                                                       
March 31                 $  6.063              $ 4.838                  

On April 10, 1997, the high, low and last sales prices for          
the shares, as reported by Nasdaq, were $5.25, $5.1563, and                     
$5.1563, respectively.                                                          

The Company also has an authorized class of 100,000                 
shares of preferred stock ("Preferred Stock").  To date the                     
Board of Directors has designated three series of Preferred                     
Stock for issuance, including (i) up to 60,000 shares of                        
Series A Preferred, of which 27,631 shares have been issued                     
and 27,431 shares remain outstanding; (ii) up to 1,000 shares                   
of Series B Preferred, of which 1,000 shares have been issued                   
and 80 shares remain outstanding; and (iii) up to 365 shares                    
of Series C Preferred, of which 300 shares have been issued                     
and no shares remain outstanding.  The Board of Directors has                   
no present plans or arrangements for the issuance of                            
additional shares of Preferred Stock.                                           

The estimated number of beneficial owners of the                    
Company's Common Stock is approximately 1,500, and the number                   
of stockholders of record on March 31, 1997, was 254.                           

To date, the Company has never paid a cash dividend on              
Common Stock.  The Company's ability to pay such dividends is                   
currently restricted by agreements with the Company's lenders;                  
however, upon completion of the Company's proposed refinancing                  
of the debt of Sun World ( See Item 7. "Management's                            
Discussion and Analysis of Financial Condition and Results of                   
Operations - Liquidity and Capital Resources," below), such                     
current restrictions would be replaced by a series of new                       
covenants which would allow for the payment of dividends                        
subject to meeting certain tests and ratios.  The Company                       
retained an investment banking firm to, among other things,                     
advise the Company as to the most tax-efficient means of                        
distributing revenues from the Company's operations to its                      
stockholders.  See Item 1, "Business - Narrative Description                    
of Business - Water Resource Development."                                      

ITEM 6. SELECTED FINANCIAL DATA                                                 

The following selected financial data insofar as it                 
relates to the nine months ended December 31, 1996 and to each                  
of the years ended March 31, 1996, 1995, 1994 and 1993 has                      
been derived from financial statements audited by Price                         
Waterhouse LLP, independent accountants.  The information that                  
follows should be read in conjunction with the audited                          
consolidated financial statements and notes thereto for the                     
nine months ended December 31, 1996 and for the two years                       
ended March 31, 1996 included elsewhere herein.  See also Item                  
7, "Management's Discussion and Analysis".                                      

CADIZ LAND COMPANY, INC.                
Selected Financial Data                 
($ in thousands, except for per share data)                 

Nine Months                     
Ended                       
       December 31,         Year Ended March 31,
                          ----------------------------------
                1996(1)   1996      1995     1994       1993
                  -------  --------  --------- --------  ---------
Statement of                                                                    
Operations Data:                                                            

Revenues              $ 23,780  $  1,441   $    543  $   190   $    -0-     
Loss from                                                                   
continuing                                                                
operations before                                                         
extraordinary items    (5,997)   (8,487)    (4,706)  (4,239)    (4,087)   

Gain from disposal                                                          
of discontinued                                                           
segment(2)               -0-        -0-        -0-      145        -0-    

Extraordinary items       -0-        -0-        115      343        -0-     

Net loss                (5,997)   (8,487)    (4,591)  (3,751)    (4,087)    

Less: Preferred stock                                                       
   dividends         (674)      -0-        -0-      -0-        -0-

Imputed dividend                                                
on preferred                                                
   stock           (2,451)      -0-        -0-      -0-        -0-
                    -------   -------  --------  --------  ---------

Net loss applicable                                                         
to common stock      $ (9,122) $ (8,487)  $ (4,591) $(3,751)  $ (4,087)   
                  ========= =========  ========= ========= =========
Per Share:                                                                      

Net loss from                                                               
continuing                                                                
operations before                                                         
extraordinary items  $  (0.44) $  (0.48)  $  (0.29) $ (0.33)  $ (0.47)    

Net income from                                                             
operations of                                                             
discounted                                                                
segment and disposal                                                      
of discontinued                                                           
segment(2)                -0-       -0-       -0-      0.01       -0-     

Extraordinary items        -0-       -0-      0.01      0.03       -0-      
                  --------  -------- --------  --------   --------
Net loss              $  (0.44)  $ (0.48)  $ (0.28)  $ (0.29)  $ (0.47)     
                 =========  ========  ========  ========= ========
Weighted average                                                                
common shares                                                               
and equivalent          20,500    17,700    16,500    12,800     8,700      
                 =========  ========  ========  ========  ========

Nine Months                         
Ended                           
    December 31,          Year Ended March 31,
                        ----------------------------------
              1996      1996       1995     1994      1993
              ----      -----      ----     ----      ----
Balance Sheet Data:                                                             

Total assets         $ 230,790  $  38,663   $ 34,888  $ 34,058  $  27,635     
Long-term debt       $ 149,111  $      68   $ 16,827  $ 13,833  $  15,979     
Redeemable                                                                    
preferred stock    $  27,431  $     -0-   $    -0-  $    -0-  $     -0-   
Preferred stock,                                                              
common stock                                                              
and additional                                                            
paid-in-capital    $  88,808  $  73,149   $ 62,857  $ 60,044  $  45,199   
Accumulated deficit  $ (61,067) $ (54,396)  $(45,909) $(41,318) $ (37,567)    
--------------------------                                                      
(1)  Subsequent to the Company's September 13, 1996 acquisition of Sun World,   
 the Company changed its fiscal year end from March 31 to December 31 in
order to align the Company's year end with that of Sun World.         
Additionally, as a result of the Sun World Acquisition, the operations
for the nine months ended December 31, 1996 include the results of    
operations of Sun World for the period September 14, 1996 through     
December 31, 1996.                                                    

(2)  In December 1990, the Company committed to a plan to eliminate all         
agribusiness operations acquired as part of its 1988 merger with      
Pacific Agricultural Services, Inc.                                   

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION             
AND RESULTS OF OPERATIONS                                       

GENERAL                                                                         

On September 13, 1996, the Company acquired all of the              
outstanding capital stock of Sun World  (the "Sun World                         
Acquisition").  The Sun World Acquisition was accounted for                     
using the purchase method of accounting. The Company's                          
consolidated financial statements include Sun World from the                    
date of acquisition.  In addition, the Company has changed its                  
fiscal year end from March 31 to December 31 in order to align                  
the Company's year end with that of Sun World.  The financial                   
statements set forth herein for the nine months ending December                 
31, 1996 are the first year end financial statements of the                     
Company to reflect the Sun World Acquisition.  The operations of                
Sun World have, and will continue to have, a significant impact                 
upon the Company's financial statements.                                        

Following the Sun World Acquisition, management implemented         
the following five-point strategy:  (i) producing more varieties                
of crops which are available for delivery at peak pricing                       
windows throughout the year; (ii) expanding third party                         
marketing and packing businesses to increase the Company's                      
ability to absorb the primarily fixed costs of its vertically                   
integrated operations; (iii) improving administrative efficiency                
through both headcount reductions and a new comprehensive                       
management information system; (iv) commercializing Sun World's                 
extensive proprietary product portfolio consisting of over 600                  
world wide patents and trademarks; and (v) reducing leverage to                 
lower financial risk and improve operating flexibility.                         

As a result of this strategic plan, Sun World has:  (i)             
entered into new agreements to market fruit and vegetables from                 
Chile and Mexico; (ii) added equipment to its San Joaquin Valley                
packing facility to pack citrus; (iii) relocated its                            
administrative offices to existing space at its San Joaquin                     
Valley packing facility; (iv) entered into licensing agreements                 
for certain of Sun World's proprietary products in Spain, Chile                 
and South Africa; and (v) completed asset sales of more than                    
$12.4 million of fallow land, with the proceeds applied to                      
reduce Sun World's leverage.                                                    

Prior to the Sun World Acquisition, Cadiz had utilized an           
unclassified balance sheet (eliminating the distinction between                 
current assets and long-term assets and current liabilities and                 
long-term liabilities).  The financial statements set forth                     
herein utilize a classified balance sheet, thus requiring                       
certain reclassifications to be made to the prior period                        
balances to conform with the December 31, 1996 presentation.                    

RESULTS OF OPERATIONS                                                           

The following is management's discussion of certain factors         
which have affected the Company's financial condition and                       
results of operations for the nine months ended December 31,                    
1996 and the fiscal years ended March 31, 1996 and 1995 as                      
compared to prior periods.                                                      

The Company's results of operations for the nine months             
ended December 31, 1996 include the results of operations of Sun                
World for the period September 14, 1996 through December 31,                    
1996.  The results of operations of Sun World prior to September                
14, 1996 have not been consolidated with those of the Company.                  
As a result of the foregoing, and as a result of the change of                  
the Company's fiscal year end from March 31 to December 31,                     
direct comparisons of the Company's consolidated results of                     
operations for the nine months ended December 31, 1996 with                     
results for the fiscal year ended March 31, 1996 will not, in                   
the view of management of the Company, prove meaningful.                        
Instead, a summary of the Sun World elements, which management                  
of the Company believes essential to an analysis of the results                 
of operations for such periods is presented below.  For purposes                
of this summary, the term Sun World will be used, when the                      
context so requires, with respect to the operations and                         
activities of the Company's Sun World subsidiary, and the term                  
Cadiz will be used, when context so requires, with respect to                   
those operations and activities of Cadiz not involving Sun                      
World.                                                                          

The following discussion contains trend analysis and other          
forward-looking statements within the meaning of Section 27A of                 
the Securities Act of 1933, as amended, and Section 21E of the                  
Securities Exchange Act of 1934, as amended.  Actual results                    
could differ materially from those projected in the forward-looking             
statements throughout this document.                                            

NINE MONTHS ENDED DECEMBER 31, 1996 COMPARED TO FISCAL YEAR                     
ENDED MARCH 31, 1996                                                            

During the nine months ended December 31, 1996, the Company         
incurred a net loss of $6.0  million compared to a loss of $8.5                 
million during the fiscal year ended March 31, 1996.  The                       
following table summarizes the net loss for both periods                        
(dollars in thousands):                                                         

             Nine Months Fiscal Year
             Ended       Ended
             December 31,  March 31,
             1996         1996
             ------       ------
Revenues                      $   23,780   $   1,441                  
            ----------   ---------
Costs and expenses:                                                   
Cost of sales                   17,725       1,649                
Resource development             1,133       1,680                
Landfill prevention                                               
activities                       394       1,919              
General and administrative       4,924       1,826                
Depreciation                       864         833                
Amortization                       175         234                
Interest expense, net            5,203       1,787                
Income tax benefit                (641)        -0-                
            ----------   ---------
Net loss                      $   (5,997)  $  (8,487)                 
             ==========   ==========

The operations of Sun World for the period September 14               
through December 31, 1996 are included above; however, due to                   
the seasonality of the operations of the Company, this is not                   
indicative of the results of operations should a full fiscal                    
year of activity be included.                                                   

The Company's net income or loss in future fiscal periods             
will be largely reflective of the operations of Sun World. Sun                  
World conducts its operations through four operating divisions:                 
farming, packing, marketing, and proprietary product                            
development.  Net profits from farming operations vary from year                
to year primarily due to yield and pricing fluctuations which                   
can be significantly influenced by weather conditions, and are,                 
therefore, generally subject to greater annual variation than                   
Sun World's other divisions.  However, the geographic                           
distribution of Sun World's farming operations and the diversity                
of its crop mix makes it unlikely that adverse weather                          
conditions will affect all of Sun World's properties or all of                  
its crops in any single year.  Nevertheless, as net profit from                 
Sun World's packing, marketing operations and proprietary                       
product development tend to be more consistent from year to year                
than net profit from Sun World's farming operations, Sun World                  
is seeking to expand volume in the packing and marketing areas                  
by increasing the number of growers with which Sun World                        
maintains packing and marketing arrangements.  Sun World is also                
actively exploring various domestic and international                           
opportunities to license selected proprietary fruit varieties.                  

REVENUES.  During the nine months ended December 31, 1996,            
the Company recorded revenues of $23.8 million, of which $22.5                  
million resulted from Sun World operations, all of which were                   
recognized from September 14, 1996 (the date subsequent to the                  
Sun World Acquisition) through December 31, 1996. The balance of                
the Company's revenues were recognized from the development                     
activities of Cadiz, consisting primarily of gross crop proceeds                
from the Cadiz ranch.                                                           

COST OF SALES.  Cost of sales for the nine months ended               
December 31, 1996 consisted of all direct costs and an                          
allocation of indirect costs related to revenue generated by the                
Company, $16.4 million of which related to Sun World activities,                
for the period September 14, 1996 through December 31, 1996 as                  
compared to $1.7 million during the fiscal year end March 31,                   
1996.                                                                           

RESOURCE DEVELOPMENT.  Expenses recorded in this category             
consist of costs incurred in the land and water resource                        
development of the Company's landholdings. These costs include                  
the operating costs associated with the Company's continual                     
evaluation of additional potential land acquisition sites, such                 
as overhead, legal and travel, as well as the costs associated                  
with the development and transfer of surplus water from the                     
Company's Cadiz and Piute properties.  See Item 1, "Business -                  
Narrative Description of Business".  In relation to the Cadiz                   
water transfer project, Cadiz expects completion of the required                
EIS/EIR process within 18 months and completion of the necessary                
delivery systems within several months thereafter, although no                  
assurances can be made.                                                         

Resource development expenses, which consist of costs                 
incurred in the land and water development of the Company's                     
landholdings, totaled $1.1 million for the nine months ended                    
December 31, 1996 as compared to $1.7 million for the fiscal                    
year ending March 31, 1996.  The difference is primarily                        
attributable to the difference in the length of the periods                     
reported (nine months versus twelve months).                                    

LANDFILL PREVENTION ACTIVITIES.  The Company is engaged in            
opposition to the proposed construction and operation of a landfill             
proposed to be located adjacent to its Cadiz Valley property, and               
has filed a lawsuit seeking, among other things, to set aside                   
regulatory approvals for the landfill project. See Item 3, "Legal               
Proceedings."  During the nine months ended December 31, 1996,                  
expenses incurred in connection with activities in opposition to                
the project, such as litigation costs and professional fees and                 
expenses totalled $0.4 million as compared to $1.9 million during               
the fiscal year ending March 31, 1996.  The decrease is due to the              
fact that the lawsuit is in the discovery phase; however, management            
believes expenses in the future will increase since the Company plans           
to vigorously oppose the proposed project.                                      

GENERAL AND ADMINISTRATIVE.  General and administrative               
expenses during both the nine months ended December 31, 1996 and                
the fiscal year ended March 31, 1996 consisted primarily of                     
corporate operating expenses, professional fees and salaries.                   
These expenses increased by $3.1 million during the nine months                 
ended December 31, 1996 as compared to the fiscal year ending                   
March 31, 1996 primarily as a result of the Sun World                           
Acquisition and the addition of corporate and administrative                    
costs related to Sun World in the amount of $2.5 million for the                
period September 14, 1996 through December 31, 1996.  During the                
period ended December 31, 1996, Cadiz was awarded and received                  
approximately $0.4 million as final payment toward full                         
reimbursement of its legal fees and costs incurred in defending                 
a legal action which was netted against the related legal fees                  
incurred.                                                                       

DEPRECIATION.  Depreciation totaled $0.9 million for the              
nine months ended December 31, 1996 as compared to $0.8 million                 
for the fiscal year ended March 31, 1996.  The increase is                      
primarily attributable to depreciation for the three and one                    
half month period from September 14, 1996 to December 31, 1996                  
related to the assets of Sun World which were acquired.                         

INTEREST EXPENSE.  Net interest expense totaled $5.2                  
million during the nine months ended December 31, 1996 as                       
compared to $1.8 million during the fiscal year ended March 31,                 
1996.  The following table summarizes the components of net                     
interest expense for the nine months ended December 31, 1996 and                
the fiscal year ended March 31, 1996 (dollars in thousands):                    

                  Nine Months  Fiscal Year
                  Ended        Ended
                 December 31,  March 31,
                  1996        1996
                  ------      ------
Interest expense on                                             
outstanding debt            $   5,193   $   1,000           
Amortization of                                                 
financing costs                   746         841           
Interest income                    (736)        (54)            
                 ---------   ---------
                 $   5,203   $   1,787
                 =========   =========

The increase in interest expense on outstanding debt                  
during the period ended December 31, 1996 is attributable to                    
the long-term debt acquired as part of the Sun World                            
Acquisition.  Interest income increased due to the average                      
Sun World cash balance of over $30 million maintained during the                
fourth calendar quarter of 1996.                                                

INCOME TAX BENEFIT.  An income tax benefit of $0.6                    
million arose during the nine months ended December 31, 1996                    
as a result of utilization of net operating loss                                
carryforwards.                                                                  

YEAR ENDED MARCH 31, 1996 COMPARED TO YEAR ENDED MARCH 31, 1995                 

During the year ended March 31, 1996, Cadiz incurred a                
net loss of $8.5 million as compared to a net loss of $4.6                      
million during the previous year.  The following table                          
summarizes the net loss for both periods (in thousands):                        

                      March 31,    March 31,
                     1996         1995
                     ------       ------

Revenues                           $   1,441    $     543             
                      ---------    ---------
Costs and expenses:                                                   
Cost of sales                        1,649          506           
Resource development                 1,680        1,039           
Landfill prevention activities       1,919          -0-           
General and administrative           1,826        1,525           
Depreciation                           833          737           
Amortization                           234          234           
Interest expense, net                1,787        1,208           
Gain on debt settlement                -0-         (115)          
                      ---------    ---------
Net Loss                           $   8,487    $   4,591             
                      =========    =========

REVENUES.  Revenues were recognized from the Cadiz'                   
resource development as a result of the Cadiz' entering into                    
joint venture or leasing arrangements with third party growers                  
for the farming of crops on its properties.  A combination of                   
gross crop proceeds from the citrus orchard and both rent and                   
percentage of gross crop proceeds from the vineyard totaled                     
$0.6 million and $0.5 million for the years ended March 31,                     
1996 and 1995, respectively.  Gross crop proceeds from the                      
additional acreage developed to row crops in the latter part                    
of fiscal year 1995 totaled $0.8 million for the year end                       
March 31, 1996, primarily from the harvest of honeydew melons                   
and seedless watermelon.  Revenue from the produce brokerage                    
operation which commenced in May 1995 totalled $82,000 during                   
the 1996 fiscal year.                                                           

COST OF SALES.  Cost of sales increased by $1.1 million               
during the year ended March 31, 1996 from the prior year                        
primarily due to Cadiz' share of joint venture production                       
costs associated with the development of an additional 240                      
acres to row crops at the beginning of the 1996 fiscal year.                    

RESOURCE DEVELOPMENT.  Resource development expenses                  
totaled $1.7 million for the year ended March 31, 1996 as                       
compared to $1.0 million for the year ended March 31, 1995.                     
As activities were taking place on multiple water projects                      
during the 1996 fiscal year, costs associated with development                  
increased as compared to the prior year when Cadiz was                          
involved in only the Cadiz water transfer project.  In                          
addition, with the development of an additional 240 acres to                    
row crops at the beginning of the 1996 fiscal year whereby                      
Cadiz was able to attract third party growers.  Cadiz incurred                  
an increase in costs associated with management of the Cadiz                    
ranch with respect to this additional acreage.  Also included                   
in resource development are costs associated with evaluation                    
of the potential acquisition of additional sites.                               

LANDFILL PREVENTION ACTIVITIES.   During the year ended               
March 31, 1996, expenses incurred in connection with                            
activities in opposition to the Rail-Cycle project totaled                      
$1.9 million, including litigation costs, professional fees                     
and expenses, and contributions in support of a local                           
coalition which actively opposed the Rail-Cycle Project.                        

GENERAL AND ADMINISTRATIVE.  General and administrative               
expenses during both periods consisted primarily of corporate                   
operating expenses, professional fees and salaries.  These                      
expenses increased by $0.3 million during the year ended March                  
31, 1996 as compared to the prior year.                                         

During the 1996 fiscal year Cadiz was engaged in, among               
other things, the Sun World Acquisition; negotiations and/or                    
discussions with prospective purchasers regarding several of                    
Cadiz' water transfer projects; management of Cadiz' permanent                  
crops; and production of additional acreage to row crops in                     
its farming operation.  In the prior year, by contrast,                         
activities pertained to evaluation of only one water transfer                   
project and management of Cadiz' permanent crops.  As a result                  
of this increased level of activity, Cadiz has incurred a                       
corresponding increase in costs related to overhead,                            
professional fees, salaries and travel, among others.                           

DEPRECIATION.  Depreciation totalled $0.8 million for the             
year ended March 31, 1996 as compared to $0.7 million for the                   
prior year.  The increase of $96,000 was primarily due to a                     
full year of depreciation on infrastructure improvements at                     
the Cadiz property, including the development of additional                     
irrigation wells which were completed during the fourth                         
quarter of fiscal 1995.                                                         

INTEREST EXPENSE.  Net interest expense totalled $1.8                 
million during the year ended March 31, 1996 as compared to                     
$1.2 million during the same period in 1995.  The following                     
table summarizes the components of net interest expense for                     
the years ended March 31, 1996 and 1995 (in thousands):                         

                              March 31,  March 31,
                             1996       1995
                              ------     -------

Interest expense on outstanding debt   $   1,000   $    842           
Amortization of financing costs              841        479           
Interest income                              (54)      (113)          
                            ---------   --------

Net interest expense                $   1,787   $  1,208        
                            =========   ========

Interest expense on outstanding debt increased during the             
year as a result of an increased level of borrowing and due to                  
slightly higher interest rates.  Amortization of financing                      
costs increased as a result of debt issue costs incurred in                     
connection with Cadiz' March 1995 loan facility.  Such costs                    
are amortized over the life of the debt arrangement, which                      
matures on January 31, 1997.                                                    

GAIN ON DEBT SETTLEMENT.  In June 1994, Cadiz retired a               
note payable in the amount of $0.3 million to an individual at                  
a discounted amount resulting in an extraordinary gain on                       
settlement of debt of $0.1 million.  The note, which                            
originated in 1985, was scheduled to be retired with a balloon                  
payment in December 1996.                                                       

LIQUIDITY AND CAPITAL RESOURCES                                                 

GENERAL DISCUSSION OF LIQUIDITY AND CAPITAL RESOURCES.                
Pursuant to its business strategy, Cadiz has utilized its working               
capital primarily for development purposes; that is, for purposes               
designed to increase the long-term value of its properties.  As Cadiz           
has not received significant revenues from its development operations           
to date, Cadiz has been required to obtain financing to bridge the gap          
between the time development expenses are incurred and the time that a          
revenue stream will commence. Accordingly, Cadiz has looked to outside          
funding sources to address its liquidity and working capital needs.             
Historically, Cadiz has addressed these needs primarily through secured         
debt financing arrangements with its lenders, private equity placements         
and the exercise of outstanding stock options.  However, following the          
completion of an offering by Sun World of $115.0 million in secured notes       
as further discussed below, the Company believes it will be able to             
meet its working capital needs without looking to outside funding               
sources, although no assurances can be made. See "Current Financing             
Arrangements" and "Equity Placements," below.                                   

On September 13, 1996, Cadiz acquired all of the stock of             
Sun World.  The net purchase price of approximately $178                        
million consisted of the following:  (i) assumption of $156                     
million of restructured debt with Sun World's existing lenders                  
(of which a principal reduction in the amount of $5.5 million                   
was made by Cadiz concurrent with the acquisition); (ii) $12                    
million to pay claims of Sun World's unsecured creditors as                     
determined during the reorganization process; (iii) $7 million                  
in cash and stock delivered both to previous holders of the                     
stock of Sun World upon transfer of stock to Cadiz and to                       
existing unsecured creditors in satisfaction of claims; and                     
(iv) $3 million of acquisition fees and costs.                                  

On April 11, 1997 Sun World entered into an agreement                 
with a major New York investment banking firm whereby the                       
firm, as initial purchaser, agreed to purchase, effective April 16,             
1997, $115.0 million in secured notes (the "Sun World Notes").                  
The Sun World Notes, which will mature on April 15, 2004, will accrue           
interest at the rate of 11-1/4% per annum and interest only will be             
payable semi-annually on April 15 and October 15 of each year,                  
commencing October 15, 1997.  The proceeds from the issuance of                 
the Sun World Notes, when combined with Sun World's existing                    
cash and cash made available under a $30 million Revolving Credit               
Facility to be entered into by Sun World concurrently with the                  
issuance of the Sun World Notes, will be used to retire Sun World's             
existing indebtedness to John Hancock Mutual Life Insurance Company             
("John Hancock") and Caisse Nationale de Credit Agricole, acting                
through its Grand Cayman branch ("Credit Agricole") (collectively,              
the "Sun World Lenders"), as well as Cadiz' existing indebtedness to            
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.                            
("Rabobank").  The Sun World Notes will be secured by a first                   
lien on substantially all of the assets of Sun World and its                    
subsidiaries, other than the growing crops, crop inventories,                   
accounts receivable and proceeds thereof which will secure the                  
Revolving Credit Facility.  The Sun World Notes will also be                    
secured by the guarantee of Cadiz.                                              

Under Sun World's historical working capital cycle,                   
working capital is required primarily to finance the costs of                   
growing and harvesting crops, which occurs from January                         
through August with a peak need in June.  Sun World harvests                    
and sells the majority of its crops during the period from May                  
through September, when it receives the majority of its                         
revenues.  In order to bridge the gap between incurrence of                     
expenditures and receipt of revenues, large cash outlays are                    
required each year.  Under its current debt structure, Sun                      
World's cash balance is sufficient to provide for these                         
seasonal working capital requirements without the need for                      
additional outside funding.  However, a substantial portion of                  
Sun World's cash on hand is to be used upon issuance of the Sun                 
World Notes to fund debt repayments.  Therefore, following                      
the issuance of the Sun World Notes, Sun World will depend upon                 
the Revolving Credit Facility to meet its seasonal working capital              
needs in 1997.                                                                  

After giving effect to the issuance of the Sun World                  
Notes and the application of the net proceeds therefrom,                        
Sun World will have $120.0 million of indebtedness outstanding                  
and $30.0 million of borrowing availability under the                           
Revolving Credit Facility. Cadiz will have approximately $10.0                  
million of indebtedness outstanding.  See  "Cadiz                               
Obligations," below.  Management believes that the terms of                     
the Company's debt facilities following the issuance of the Sun                 
World Notes will be more favorable to the Company.                              

CURRENT FINANCING ARRANGEMENTS.                                       

SUN WORLD OBLIGATIONS                                                 

As of December 31, 1996, Sun World's obligations to John              
Hancock and Credit Agricole totaled approximately $130.4                        
million and mature in September 2006.  The obligations to John                  
Hancock is due in variable installments with interest at                        
10.6%.  The obligation to Credit Agricole bears interest at a                   
variable rate based upon prime or LIBOR with interest payable                   
monthly and principal due in variable installments.                             
Substantially all of the assets of Sun World are encumbered in                  
favor of one or both of the Sun World lenders.  Sun World's                     
financing arrangements require, among other terms, minimum                      
amounts, as defined, of working capital and tangible net worth                  
and minimum ratios of current assets to current liabilities                     
and indebtedness to net worth.  Upon issuance of the Sun World                  
Notes, the obligations of Sun World to John Hancock and                         
Credit Agricole will be repaid in full.                                         

CADIZ OBLIGATIONS                                                     

Cadiz' two primary current lenders are Rabobank and ING               
Baring (U.S.) Capital Corporation ("ING").  On March 31, 1997                   
ING purchased Cadiz' previously outstanding obligations to                      
Henry Ansbacher & Co., Ltd. ("Ansbacher") of approximately                      
$9.7 million.  As Cadiz intends to keep the ING facility in                     
place following the issuance of the Sun World Notes, concurrently               
with such purchase, the maturity date of the ING obligations                    
was extended to April 30, 1998, (with the interest rate of such                 
obligations to be adjusted as of May 1, 1997 to LIBOR plus 200                  
basis points, payable at LIBOR only semi-annually, with the remaining           
accrued interest added to principal), and Cadiz issued to ING                   
warrants to purchase 75,000 shares of Cadiz common stock,                       
exercisable May 1, 1997 at an exercise price equal to the                       
market price of Cadiz common stock at the time such warrants                    
become exercisable.  ING has also granted to Cadiz the right                    
to obtain two additional one-year extensions.  Upon exercise                    
of the first and second extension, Cadiz would be required to                   
issue certain additional warrants to ING and the interest rate would            
be further adjusted.                                                            

The Rabobank facility of approximately $9.1 million                   
matures April 30, 1997.  Rabobank has granted to the Company                    
the right to obtain two one-year extensions of this maturity                    
date, provided the total debt outstanding to Rabobank at the                    
time the first extension becomes effective does not exceed                      
$8.5 million.  Upon exercise of the first and second                            
extension, Cadiz would be required to pay Rabobank certain                      
fees. The interest rate in effect during each extension period                  
would be at Rabobank's cost of funds plus 1-1/4% with this                      
interest rate given retroactive effect to February 1, 1997.                     
Upon issuance of the Sun World Notes, the Rabobank facility will                
be repaid in full, and such extensions will not be required.                    

Currently, ING and Rabobank hold senior and subordinated              
deeds of trust, respectively, on substantially all of Cadiz'                    
non-Sun World related property.                                                 

As the Company continues to aggressively pursue its                   
business strategy, additional financing specifically in                         
connection with the Company's water projects will be required.                  
The nature of such additional financing for the water transfer                  
and/or storage projects will depend upon how the development                    
and ownership of each project is ultimately structured, and                     
how much of each project's funding will be the Company's                        
responsibility.  Should the Company determine that it will be                   
able to maximize its profit potential through construction and                  
ownership of the water delivery and/or storage systems used in                  
the project, the Company will be required to obtain long-term                   
project financing.  Based upon the results of analyses                          
performed by an investment banking firm retained by the                         
Company, management believes that several alternative                           
long-term financing arrangements are available to the Company                   
which will be further evaluated once funding responsibility                     
and ownership alternatives are determined.                                      

EQUITY PLACEMENTS.  During the nine months ended December             
31, 1996, Cadiz utilized equity placements to fund its Sun                      
World Acquisition.  The total cash requirements of Cadiz                        
related to the Sun World Acquisition were funded from: (i) the                  
issuance by Cadiz of $27.6 million of newly authorized Series                   
A Preferred; (ii) the issuance by Cadiz of $7.6 million of                      
newly authorized Series B Preferred; (iii) the issuance by                      
Cadiz $2.6 million of newly authorized Series C Preferred; and                  
(iv) $1.0 million previously deposited by Cadiz from its                        
working capital in trust with the Official Committee Holding                    
Unsecured Claims in the Sun World bankruptcy case.  Of such                     
funds, approximately $35.0 million was applied to cash                          
disbursements required at closing under the Sun World Plan of                   
Reorganization, including the $15.0 million capital                             
contribution and approximately $5.5 million of principal                        
reduction to secured lenders.  The remainder has been utilized                  
by Cadiz substantially for the payment of expenses relating to                  
the Sun World Acquisition, as well as for the capital and                       
operating requirements of Cadiz.                                                

Under the terms of the Plan of Reorganization in the Sun              
World bankruptcy case, as originally approved, the total cash                   
requirements of the Company in order to close the Sun World                     
Acquisition would have been approximately $39.0 million, with                   
$15.0 million of this amount to be deposited by the Company at                  
closing into the trusteed unsecured claims reserve account.                     
However, in order to protect against stockholder dilution,                      
shortly before completion of the Sun World Acquisition the                      
Company was able to successfully negotiate a reduction in this                  
required initial cash deposit to $11.0 million, thereby                         
effectively reducing cash requirements at closing to $35.0                      
million.  As a condition to this reduction in the amount of                     
the initial deposit, the Company agreed to deposit an                           
additional amount into the unsecured claims reserve account                     
subsequent to the closing, when the final claims amounts could                  
more readily be determined.  In order to fund the remaining                     
amounts necessary to complete its requirements in this regard,                  
on November 26, 1996, the Company issued 240 shares of its                      
Series B Preferred and 40 shares of its Series C Preferred for                  
total aggregate consideration of $2.8 million, or $10,000 per                   
share.  The amount of shares so issued by the Company was less                  
than the additional amount which the Company would otherwise                    
have needed to issue prior to the Sun World Acquisition if the                  
amount of the initial cash deposit had not been reduced.                        

During the nine months ended December 31, 1996, Cadiz                 
received gross proceeds of $942,000 through the exercise of                     
previously outstanding stock options.                                           

The Series A Preferred was not convertible when issued,               
but became convertible into shares of common stock at the                       
option of the holder, on November 12, 1996 upon the filing by                   
the Company of an Amendment to its Certificate of                               
Incorporation ("Amendment") increasing the Company's                            
authorized common stock from 24 million to 45 million shares,                   
thereby allowing the Company to reserve sufficient shares of                    
common stock for issuance upon conversion.  Concurrently with                   
the filing of the Amendment, the conversion price ("Series A                    
Conversion Price") was $3.75.  Holders are entitled to                          
cumulative dividends payable semi-annually in cash or common                    
stock at a rate of 6% per annum.  The Series A Preferred is                     
also mandatorily convertible in full at the option of the                       
Company at any time prior to six months following the filing                    
of the Amendment at the Series A Conversion Price provided                      
that, as a condition to such conversion, the Company shall pay                  
to holders one full year's worth of dividends (less the amount                  
of any dividends theretofore paid).  The Company has delivered                  
notice of exercise of this conversion right, effective May 7,                   
1997 to all holders of Series A Preferred.  The Series A                        
Preferred ranks senior and prior to the Company's common stock                  
and on a parity with any other class or series of preferred                     
stock.  Except as provided by law, holders are not entitled to                  
vote upon any matter submitted to a vote of the Company's                       
stockholders.                                                                   

The Series B and C Preferred were immediately convertible             
upon issuance into shares of common stock, at the option of                     
the holder, at a price equal to the lower of (a) $5.8125 per                    
share or (b) 85% of the average closing bid price over the                      
ten-trading day period ending on the day prior to the                           
submission of any conversion notice ("Series B/C Conversion                     
Price").  Holders are entitled to cumulative dividends payable                  
upon conversion or maturity in cash or common stock at a rate                   
of 6% per annum.  The Company reserves the right to redeem any                  
shares of Series B or Series C Preferred for $11,765 per share                  
in cash by giving holders five days notice.  Any Series B or                    
Series C Preferred shares outstanding one year following                        
issuance are mandatorily converted into common stock at the                     
Series B/C Conversion Price.  Holders are entitled to a                         
liquidation preference equal to the initial purchase price of                   
$10,000 per share.  As of March 31, 1997, 100 shares of Series                  
B Preferred and no shares of Series C Preferred remain                          
outstanding.  The Series B and C Preferred rank senior and                      
prior to Cadiz' common stock and on a parity with any other                     
class or series of preferred stock.  Except as provided by                      
law, holders are not entitled to vote upon any matter                           
submitted to a vote of Cadiz' stockholders.                                     

WORKING CAPITAL RESOURCES.  As noted above, subsequent to             
the Sun World Acquisition, the Company adopted a classified                     
balance sheet thereby requiring the distinction between                         
current assets and long-term assets and current liabilities                     
and long-term liabilities.  As a result, on a consolidated                      
basis, the Company had, at December 31, 1996, working capital                   
of $44.8 million, cash of $33.3 and a current ratio of                          
approximately 3.5 to 1.0.                                                       

The following table summarizes the Company's cash                     
position for the periods indicated (amounts in thousands):                      

          Nine
                     months       Year
                      ended        ended
                       December 31,  March 31,
                        1996        1996
                        ------      ------
Net cash used for continuing                                              
operating activities               $    (66)  $  (5,736)            

Net cash provided by (used for)                                         
investing activitie                   6,656      (2,357)            

Net cash provided by                                                    
financing activities                 21,564      10,792             
                       ---------   ---------

Net increase in cash                   28,154       2,699               

Cash and cash equivalents,                                              
beginning of period                   5,153       2,454             
                       ---------   ---------
Cash and cash equivalents,                                              
end of period                     $  33,307   $   5,153             
                     =========   =========

CASH USED FOR OPERATING ACTIVITIES.  Cash used for              
operating activities totalled $66,000 for the nine months                       
ended December 31, 1996 as compared to cash used for                            
continuing operating activities of $5.7 million for the fiscal                  
year ended March 31, 1996.  The decrease in cash used for                       
operating activities primarily resulted from the decrease in                    
accounts receivable and inventories of $12.4 million                            
attributable to the seasonality of Sun World's agricultural                     
operations offset by the decrease in accounts payable of $7.2                   
million (which includes $11.6 million paid to satisfy certain                   
of Sun World's unsecured creditors pursuant to Sun World's                      
Plan of Reorganization).  The balance of the net cash used for                  
operating activities resulted from the increased activity                       
level of Cadiz during the nine months ended December 31, 1996.                  

The Company currently pays no income taxes.  As of    
December 31, 1996, the Company has a net operating loss (NOL)                   
carryforward of approximately $60.8 million for federal and                     
$35.5 million for state income tax purposes.  Such                              
carryforwards expire in varying amounts through the year 2012.                  
In accordance with the Tax Reform Act of 1986, NOL utilization                  
may be subject to an annual limitation.  As a result at                         
December 31, 1996, approximately $15.4 million of the federal                   
NOL is currently available to offset federal taxable income in                  
any future years, while the balance is available subject to                     
annual limitations.  No annual limitations apply to the state                   
NOL carryforward.                                                               

CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES.  Cash         
provided by investing activities totalled $6.7 million during                   
the nine months ended December 31, 1996 as compared to cash                     
used for investing activities of $2.4 million during the                        
fiscal year ended March 31, 1996.  Although Cadiz invested                      
$1.4 million in the purchase of land, property, plant and                       
equipment and in furtherance of its water transfer and storage                  
projects, Sun World also received proceeds of $12.4 million                     
from the disposal of underproducing assets through an asset                     
disposal program.  In addition, the net cash used in                            
connection with the Sun World Acquisition was $4.5 million.                     

CASH PROVIDED BY FINANCING ACTIVITIES.  Financing               
activities provided $21.6 million for the nine months ended                     
December 31, 1996 as compared to $10.8 million during the                       
fiscal year ended March 31, 1996.  Net proceeds from the                        
issuance of common stock, preferred stock and the exercise of                   
previously outstanding stock options totaled $37.8 million                      
during the nine months ended December 21, 1996 while dividends                  
paid on the preferred stock totaled $99,000.  Principal                         
payments on short and long-term debt totaled $17,000 and $16.4                  
million, respectively, for the nine months ended December 31,                   
1996.                                                                           

OUTLOOK                                                                         

With the issuance of the Sun World Notes, the Company           
believes that, based upon current levels of operations and anticipated          
growth, Sun World can adequately service its indebtedness and                   
meet its seasonal working capital needs utilizing available                     
internal cash and the Revolving Credit Facility.                                

Concurrently with the Sun World Acquisition, Cadiz              
entered into agreements with both of its existing lenders and                   
with Sun World's principal secured lenders which restrict the                   
amount of cash that can flow from Cadiz to Sun World and vice                   
versa.                                                                          

In the short-term, Cadiz expects to meet its ordinary           
working capital needs through a combination of quarterly                        
management fee payments from Sun World, payments from Sun                       
World under an agricultural lease whereby Sun World now                         
operates the Company's 1,600 acres of developed agricultural                    
property at Cadiz, California, and the possible exercise of                     
outstanding stock options.  In addition, there are provisions                   
in the Sun World Note Indenture allowing for certain additional                 
payments to be made from Sun World to Cadiz, subject to Sun                     
World meeting specific tests and ratios.                                        

As the Company is actively pursuing the development of          
its water resources, it is seeking the finalization of the                      
regulatory approvals needed to commence construction of a                       
water delivery and/or storage project at Cadiz.  Once the                       
lengthy regulatory review process is finalized and                              
construction of the necessary delivery and/or storage system                    
has commenced, the Company anticipates generating a revenue                     
stream within less than a year thereafter which will be                         
sufficient to meet the then existing operating requirements of                  
the Company, although no assurances can be given.                               
Concurrently with the regulatory review process, the Company                    
is also negotiating the terms of water delivery and/or storage                  
arrangements with various California water agencies, which                      
include issues such as financing, pricing concepts and                          
formulas and ownership of the pipeline and the delivery and/or                  
storage system.                                                                 

In addition to the development of its water resources,          
the Company is actively involved in further agricultural                        
development and reinvestment in its landholdings.  Such                         
development will be systematic and in furtherance of the                        
Company's business strategy to provide for maximization of the                  
value of its assets.                                                            

Annual maturities of long-term debt outstanding excluding       
$124,000 representing the unamortized portion of warrants at                    
December 31, 1996 are as follows: 1997   $4,877,000; 1998                       
$24,253,000; 1999 - $9,374,000; 2000 - $11,398,000; 2001 -                      
$11,410,000, and 2002 and thereafter - $92,676,000.  With the                   
issuance of the Sun World Notes, annual maturities of long-term                 
debt outstanding will be as follows: 1997 - $1,397,000; 1998 -                  
10,125,000; 1999 - $386,000; 2000 - $433,000; 2001 - $445,000;                  
and 2002 and thereafter - $116,602,000.                                         

Since the Company's inception, inflation has not had a          
material impact either on the costs of materials required in                    
the development of property and/or in labor costs.  Similarly,                  
the value of the Company's real property has not been                           
materially impacted by inflation. In the event the rate of                      
inflation should accelerate in the future, the Company                          
believes the increase in the value of its real property will                    
exceed any increases in costs attributable to inflation.                        

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                             

The information required by this item is submitted in           
response to Part IV hereof.  See the Index to Consolidated                      
Financial Statements.                                                           

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                        
ACCOUNTING AND FINANCIAL DISCLOSURE                             

Not Applicable.                                                 
PART III                  

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                 

The information called for by this item is incorporated         
herein by reference to the definitive proxy statement involving                 
the election of directors which the Company intends to file with                
the Commission pursuant to Regulation 14A under the Securities                  
and Exchange Act of 1934 not later than 120 days after December                 
31, 1996.                                                                       

ITEM 11.     EXECUTIVE COMPENSATION                                             

The information called for by this item is incorporated         
herein by reference to the definitive proxy statement involving                 
the election of directors which the Company intends to file with                
the Commission pursuant to Regulation 14A under the Securities                  
Exchange Act of 1934 not later than 120 days after December 31,                 
1996.                                                                           

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                
MANAGEMENT                                            

The information called for by this item is incorporated         
herein by reference to the definitive proxy statement involving                 
the election of directors which the Company intends to file with                
the Commission pursuant to Regulation 14A under the Securities                  
Exchange Act of 1934 not later than 120 days after December 31,                 
1996.                                                                           

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                     

The information called for by this item is incorporated         
herein by reference to the definitive proxy statement involving                 
the election of directors which the Company intends to file with                
the Commission pursuant to Regulation 14A under the Securities                  
Exchange Act of 1934 not later than 120 days after December 31,                 
1996.                                                                           

PART IV                 

ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON             
FORM 8-K                                              

(a)  1.   FINANCIAL STATEMENTS.  See Index to Consolidated      
Financial Statements.                       

2.   FINANCIAL STATEMENT SCHEDULES.  See Index to     
Consolidated Financial Statements.          

3.   EXHIBITS.                                        

The following exhibits are filed or incorporated by reference   
as part of this Transition Report:                              

2.1        Debtors' Modified Fourth Amended Consolidated Plan     
         of Reorganization dated June 3, 1996 (as modified)(1)

2.2        Plan Implementation Agreement dated July 12, 1996(1)   

2.3        Supplement to Plan Support Agreement dated June 3,     
1996(1)                                     

2.4        Stock Purchase Agreement with Howard Marguleas         
dated September 13, 1996(2)                 

2.5        Form of Stock Purchase Agreement with Minority         
         Stockholders of Sun World dated September 13, 1996(2)

3.1        Certificate of Incorporation of the Company, as        
amended(3)                                  

3.2        Amendment to Certificate of Incorporation dated        
November 8, 1996(4)                         

3.3        Bylaws of the Company, as amended to date(5)           

4.1        Specimen Form of Stock Certificate for the             
Company's registered stock(5)               

4.2        Certificate of Designations of 6% Convertible          
Series A Preferred Stock(2)                 

4.3        Certificate of Designations of 6% Convertible          
Series B Preferred Stock(6)                 

4.4        Certificate of Designations of 6% Convertible          
Series C Preferred Stock(2)                 

10.1        The Company's 1984 Incentive Stock Option Plan(7)       

10.2        Pacific Agricultural Holdings, Inc. 1988                
Nonstatutory Stock Option Plan(8)           

10.3        The Company's 1996 Stock Option Plan(13)                

10.4        Stock Purchase and Fee Agreement dated March 22,        
   1989 between the Company and Mark A. Liggett(7)

10.5        Form of Limited Partnership Agreement of Southwest      
Fruit Growers, L.P.(9)                      

10.6        Farm Management Agreement dated as of March 28,         
1990 between the Company and Southwest Fruit
Growers, L.P.(9)                            

10.7        Promissory Note in the amount of $3,486,868 dated       
  as of March 28, 1990 issued by Southwest Fruit
         Growers, L.P. in favor of the Company (Hyder Note)(9)

10.8        Promissory Note in the amount of $4,934,922 dated       
  as of March 28, 1990 issued by Southwest Fruit
         Growers, L.P. in favor of the Company (Cadiz Note)(9)

10.9        Promissory Note in the amount of $3,141,344 dated       
  as of March 28, 1990 issued by Southwest Fruit
  Growers, L.P. in favor of the Company (Farming
Note)(9)                                    

10.10        Second Amendment and Supplement to Stock Purchase        
      and Fee Agreement, dated December 23, 1992 between
the Company and Mark Liggett(10)            

10.11        Loan Agreement dated March 15, 1995 between the          
Company, CVDC and Ansbacher(11)             

10.12        Fourth Loan Modification Agreement dated March 15,       
   1995 between the Company, CVDC and Rabobank(11)

10.13        Form of Option Agreement dated April 20, 1995            
between the Company and David Peterson(11)  

10.14        Plan Support Agreement dated December 11, 1995(12)       

10.15        Waiver of Certain Provisions of Plan Support             
Agreement dated January 12, 1996(12)        

10.16        Amended and Restated Credit Agreement between Sun        
     World International, Inc. and Caisse Nationale de
Credit Agricole dated September 13, 1996(4) 

10.17        Promissory Note between Sun World International,         
      Inc. and Caisse Nationale de Credit Agricole dated
September 13, 1996(4)                       

10.18        New Hancock Credit Agreement between Sun World           
    International, Inc. and John Hancock Mutual Life
 Insurance Company dated September 13, 1996(4)
10.19        Secured Promissory Note between Sun World                
    International, Inc. and John Hancock Mutual Life
 Insurance Company dated September 13, 1996(4)

10.20        Form of Employment Agreement dated September 13,         
      1996 between Sun World, the Company and Timothy J.
Shaheen.                                    

10.21        Form of Employment Agreement dated September 13,         
       1996  between Sun World, the Company and Stanley E.
Speer                                       

21.1         Subsidiaries of the Registrant                           

23.1         Consent of Independent Accountants (included in Part     
IV of the Form 10-K).                       

27.1         Financial Data Schedule                                  
-------------------                                                             

(1)  Previously filed as Exhibit to the Company's     
  Report on Form 10-Q for the quarter ended June
30, 1996                                    

(2)  Previously filed as Exhibit to the Company's     
Report on Form 8-K dated September 13, 1996 

(3)  Previously filed as Exhibit to the Company's     
Registration Statement on Form S-1          
  (Registration No. 33-75642) declared effective
May 16, 1994                                

(4)  Previously filed as Exhibit to the Company's     
Report on Form 10-Q for the quarter ended   
September 30, 1996                          

(5)  Previously filed as Exhibit to the Company's     
Report on Form 8-K dated May 6, 1992        

(6)  Previously filed as Exhibit to the Company's     
  Annual Report on Form 10-K for the fiscal year
ended March 31, 1996                        

(7)  Previously filed as Exhibit to the Company's     
  Annual Report on Form 10-K for the fiscal year
ended March 31, 1989                        

(8)  Previously filed as Exhibit to the Company's     
  Annual Report on Form 10-K for the fiscal year
ended March 31, 1988                        

(9)  Previously filed as Exhibit to the Company's     
  Annual Report on Form 10-K for the fiscal year
ended March 31, 1990                        

(10) Previously filed as Exhibit to the Company's     
  Annual Report on Form 10-K for the fiscal year
ended March 31, 1993                        
(11) Previously filed as Exhibit to the Company's     
  Annual Report on Form 10-K for the fiscal year
ended March 31, 1995                        

(12) Previously filed as Exhibit to the Company's     
Report on Form 10-Q for the quarter ended   
December 31, 1995                           

(13) Previously filed as Exhibit A to the Company's   
  Proxy Statement relating to the Annual Meeting
of Stockholders held on November 8, 1996    

(b)  REPORTS ON FORM 8-K                                                  

1.   Report on Form 8-K/A (Amendment No. 1 to Report            
on Form 8-K dated September 13, 1996) providing       
(i) audited consolidated financial statements of      
Sun World International, Inc. and Subsidiaries        
for the years ended December 31, 1995 and 1994;       
(ii) audited consolidated financial statements of     
Sun World International, Inc. and subsidiaries        
for the interim period January 1, 1996 through        
September 13, 1996 (the date of acquisition); and     
(iii) Cadiz Land Company, Inc. and Sun World          
International, Inc. unaudited Pro Forma Combined      
Financial Statements; and to report the sale of       
equity securities pursuant to Regulation S.           

2.   Report on Form 8-K dated December 20, 1996,                
reporting the change of the Company's fiscal year     
end from March 31 to December 31.                     

SIGNATURES                

Pursuant to the requirements of Section 13 or 15(d) of the                      
Securities Exchange Act of 1934, the registrant has duly caused                 
this report to be signed on its behalf by the undersigned,                      
thereto duly authorized.                                                        

CADIZ LAND COMPANY, INC.                                                        

By:        /s/  Keith Brackpool             By: /s/  Susan K. Chapman           
-----------------------------              ----------------------       
Keith Brackpool,                      Susan K. Chapman,   
   Chief Executive Officer               Chief Financial Officer
and Director                          and Secretary       

   Date: April 14, 1997                     Date: April 14, 1997

Pursuant to the requirements of the Securities Exchange Act of                  
1934, this report has been signed by the following persons in                   
the capacities and on the dates indicated.                                      

Name and Position                        Date       

   /s/ Dwight Makins                        Date: April 14, 1997
------------------------                                  
Dwight Makins,                                            
Chairman of the Board                                     
and Director                                              

   /s/ Keith Brackpool                      Date: April 14, 1997
-------------------------                                 
Keith Brackpool,                                          
Chief Executive Officer                                   
and Director                                              
(Principal Executive Officer)                             

   /s/ Susan K. Chapman                     Date: April 14, 1997
--------------------------                                
Susan K. Chapman,                                         
Chief Financial Officer                                   
and Secretary (Principal Financial                        
and Accounting Officer)                                   

   /s/ J.F.R. Hammond                       Date: April 14, 1997
---------------------------                               
J.F.R. Hammond, Director                                  

   /s/ Stephen D. Weinress                  Date: April 14, 1997
-----------------------------                             
Stephen D. Weinress, Director                             

CADIZ LAND COMPANY, INC.          
Index to Consolidated Financial Statements    

                                   Pages

FINANCIAL STATEMENTS:                                                           

Report of Independent Accountants. . . . . . . . . 35       

Consolidated Balance Sheet at December 31, 1996             
and March 31, 1996 . . . . . . . . . . . . . . . 36-37  

Consolidated Statement of Cash Flows for the                
nine months ended December 31, 1996 and for               
the two years ended March 31, 1996. . . . .  . . .38      

Consolidated Statement of Operations for the                
nine months ended December 31, 1996 and for               
the two years ended March 31, 1996. . . . .  . . .39      

Consolidated Statement of Redeemable Preferred              
Stock, Preferred Stock, Common Stock and                  
Other Stockholders' Equity for the nine months            
ended December 31, 1996 and for the two years             
ended March 31, 1996. . . . . . . . . . . . . . . 40-41   

Notes to the Consolidated Financial Statements . . 42-62    

FINANCIAL STATEMENT SCHEDULES:                                                  

Schedule I - Condensed Financial Information                
of Registrant for the nine months ended                   
December 31, 1996 . . . . . . . . . . . . . . . . 63-65   

Schedule II  - Valuation and Qualifying                   
Accounts for the nine months ended                      
December 31, 1996 and for the two years                 
ended March 31, 1996. . . . . . . . . . . . . . .66     

(Schedules other than those listed above have been omitted          
since they are either not required, inapplicable, or the          
required information is included on the financial statements      
or notes thereto.)                                                

REPORT OF INDEPENDENT ACCOUNTANTS                   

To the Board of Directors                                                       
and Stockholders of                                                             
Cadiz Land Company, Inc.                                                        

In our opinion, the consolidated financial statements listed in                 
the accompanying index present fairly, in all material respects,                
the financial position of Cadiz Land Company, Inc. and its                      
subsidiaries at December 31, 1996 and March 31, 1996, and the                   
results of their operations and their cash flows for the nine                   
months ended December 31, 1996 and for each of the two years in                 
the period ended March 31, 1996, in conformity with generally                   
accepted accounting principles.  These financial statements are                 
the responsibility of the Company's management; our                             
responsibility is to express an opinion on these financial                      
statements based on our audits.  We conducted our audits of                     
these statements in accordance with generally accepted auditing                 
standards which require that we plan and perform the audit to                   
obtain reasonable assurance about whether the financial                         
statements are free of material misstatement.  An audit includes                
examining, on a test basis, evidence supporting the amounts and                 
disclosures in the financial statements, assessing the                          
accounting principles used and significant estimates made by                    
management, and evaluating the overall financial statement                      
presentation.  We believe that our audits provide a reasonable                  
basis for the opinion expressed above.                                          

/s/ Price Waterhouse LLP                                                        
------------------------------                                                  
PRICE WATERHOUSE LLP                                                            

Los Angeles, California                                                         
March 7, 1997, except for Note 7                                                
which is as of March 31, 1997                                                   

CADIZ LAND COMPANY INC.                                                         

Consolidated Balance Sheet                                                      
($ in thousands)                                                                
                                  December 31               March 31
                                     1996                     1996
                                    ---------                ---------
Assets                                                                          
Current assets:                                                                 
Cash and cash equivalents               $  33,307                 $  5,153    
Accounts receivable, net                    7,533                      443    
Assets held for sale                        6,534                      -0-    
Inventories                                14,121                      266    
Prepaid expenses and other                  1,225                      190    
                                    ----------                --------
Total current assets                        62,720                    6,052     

Investment in partnerships                   6,122                      -0-     

Property, plant and equipment, net         137,897                   11,681     

Land held for development                   12,671                   12,236     

Water rights and transfer and                                                   
storage projects                           4,705                    2,496   

Other assets                                 1,695                    1,043     

Excess purchase price over                                                      
net assets acquired, net                   4,980                    5,155   
                                    ------------              ------------
                                  $   230,790               $   38,663
                                  ===========               ==========

See accompanying notes to the consolidated financial statements.    

CADIZ LAND COMPANY, INC.                                                        

Liabilities, Stock and Other Stockholders' Equity                               
($ in thousands)                                                                
                                  December 31               March 31
                                    1996                    1996
                                     -------                 ---------
Current liabilities:                                                          
Accounts payable                        $  7,435                $   1,772   
Accrued liabilities                        5,172                      521   
Long-term debt, current portion            4,753                   17,617   
Other current liabilities                    591                      -0-   
                                       --------               --------
Total current liabilities                 17,951                   19,910   

Long-term debt                             149,111                      -0-     

Deferred income taxes                        4,347                      -0-     

Other liabilities                            4,209                      -0-     

Commitments and contingencies                                                   

Series A redeemable preferred stock -                                           
$.01 par value ($1,000 liquidation                                          
value); 60,000 shares authorized;                                           
27,431 shares issued and outstanding                                        
at December 31, 1996                      27,431                      -0-   

Preferred stock - $.01 par value                                                
40,000 shares authorized; 340                                               
shares issued and outstanding at                                            
December 31, 1996                            -                        -0-   

Common stock - $.01 par value; 45,000,000                                       
shares authorized; shares issued and                                        
outstanding - 23,445,868 at December 31,                                    
1996 and 19,247,611 at March 31, 1996        234                      192   

Additional paid-in capital                  88,574                   72,957     

Accumulated deficit                        (61,067)                 (54,396)    
                                     ----------                ---------
                                    $ 230,790                 $ 38,663
                                      =========                =========

See accompanying notes to the consolidated financial statements.                

CADIZ LAND COMPANY, INC.                                                        
Consolidated Statement of Cash Flows                                            
($ in thousands)                                                                

                   Nine Months Ended      Year Ended
                      December 31,         March 31,
                             1996          1996         1995
                             ------        ------       ------
Cash flows from operating activities:                                           
Net loss from continuing                                                      
operations                        $ (5,997)     $ (8,487)    $ (4,591)      
Adjustments to reconcile net                                                  
loss from continuing operations                                             
to cash used for continuing                                                 
operating activities:                                                       
Depreciation and amortization       1,654         1,909        1,450      
Extraordinary gain on debt                                                
settlement                           -0-           -0-         (115)    
Interest capitalized to debt          481           474          734      
Share of partnership operations      (838)          -0-          -0-      
Changes in operating assets and                                           
liabilities, net of acquisition                                         
of Sun World:                                                           
Decrease (increase) in accounts                                         
receivable                       11,367          (379)         (198)  
Decrease in inventories            1,000           -0-           -0-    
(Increase) decrease in prepaid                                          
expenses and other                 (428)           13          (158)  
(Decrease) increase in accounts                                         
payable                          (7,208)          734           (12)  
Increase in accrued liabilities      577           -0-            -0-   
(Decrease) in other liabilities     (674)          -0-            -0-   
                                -------        -------      --------
Net cash used for continuing                                            
operating activities                (66)        (5,736)       (2,890) 

Net cash provided by discontinued                                       
operating activities                 -0-           -0-            57  
                                -------        -------       -------
Net cash used for operating                                             
activities                          (66)        (5,736)       (2,833) 
                                 -------        --------      --------
Cash flows from investing activities:                                           
Additions to property, plant                                                  
and equipment                         (405)          (358)       (1,506)    
Proceeds from disposal of property,                                           
plant and equipment                 12,415            -0-           -0-     
Land purchase and development          (490)          (574)         (315)     
Water transfer and storage projects    (343)          (732)       (1,547)     
Additions to developing crops          (187)           -0-           -0-      
Partnership distributions               140            -0-           -0-      
Acquisition of Sun World, net                                                 
of cash acquired                    (4,474)          (693)          -0-     
                                --------      --------      --------
Net cash provided by (used for)                                         
investing activities              6,656         (2,357)       (3,368) 
                                ---------      --------       --------
Cash flows from financing                                                       
activities:                                                                   
Net proceeds from issuance                                                    
of stock                            37,761         10,292         2,307     
Principal payments on long-term                                               
debt                               (16,428)          (177)         (530)    
Proceeds from short-term debt           347            677         2,470      
Principal payments on short-term                                              
debt                                   (17)           -0-           -0-     
Dividends paid on conversion of                                               
preferred stock                        (99)           -0-           -0-     
                               ----------     ----------     -----------
Net cash provided by financing                                          
activities                       21,564         10,792         4,247  

Net increase (decrease) in cash and                                             
cash equivalents                     28,154          2,699        (1,954)     

Cash and cash equivalents,                                                      
beginning of period                  5,153          2,454         4,408     
                              ----------      ----------     ---------
Cash and cash equivalents,                                                      
end of period                    $  33,307       $  5,153      $  2,454     
                             =========        =========     ========

See accompanying notes to the consolidated financial statements.                

CADIZ LAND COMPANY, INC.                                                        

Consolidated Statement of Operations                                            
(In thousands except per share data)                                            

                    Nine Months Ended           Year Ended
                       December 31,              March 31,
                               1996               1996        1995
                               ------             ------      ------
Revenues                           $ 23,780            $  1,441     $  543      
                              --------            --------     -------
Costs and expenses:                                                             
Cost of sales                      17,725               1,649        506    
Resource development                1,133               1,680      1,039    
Landfill prevention activities        394               1,919        -0-    
General and administrative          4,924               1,826      1,525    
Depreciation                          864                 833        737    
Amortization                          175                 234        234    
                              --------             --------   --------
Total costs and expenses           25,215               8,141      4,041    
                              --------             --------   --------
Operating loss                       (1,435)             (6,700)    (3,498)     

Interest expense, net                 5,203               1,787      1,208      
                             --------             --------   -------
Loss before income taxes and                                                    
extraordinary item                 (6,638)             (8,487)    (4,706)   

Income tax benefit                     (641)                -0-        -0-      
                             ---------             --------   --------
Loss before extraordinary item       (5,997)             (8,487)    (4,706)     

Extraordinary item - gain on                                                    
debt settlement                       -0-                 -0-        115    
                              ---------            ---------  --------
Net loss                             (5,997)             (8,487)    (4,591)     

Less:  Preferred stock dividends       (674)                -0-        -0-      

Imputed dividend on                                               
  preferred stock              (2,451)                -0-        -0-
                             -----------           ---------  --------
Net loss applicable to                                                          
common stock                     $ (9,122)           $ (8,487)  $ (4,591)   
                               ========            ========   ========
Net loss per common share:                                                      
Loss before                                                                 
extraordinary item             $    (.44)           $   (.48)    $ (.29)  
Extraordinary item                     -0-                 -0-       .01    
                                -----------        -----------    ----------
Net loss per common share       $    (.44)           $   (.48)    $ (.28)   
                              ==========           =========    ========
Weighted average shares                                                         
outstanding                        20,500              17,700     16,500    
                              ==========           =========    ========

See accompanying notes to the consolidated financial statements.    

CADIZ LAND COMPANY, INC.                                                        

Consolidated Statement of Redeemable Preferred Stock,                           
Preferred Stock, Common Stock and Other Stockholders' Equity              

For the Nine Months Ended December 31, 1996 and the Two Years Ended             
March 31, 1996                                                              

($ in thousands)                                                                
Redeemable                                     Addi-
           Preferred     Preferred         Common        tional    Accumu-
            Stock         Stock            Stock        Paid-in    lated
         Shares Amount  Shares Amount  Shares    Amount  Capital   Deficit
         ------ ------  ------ ------ ---------- -------  -------  -------
Balance                                                                         
as of                                                                         
March 31,                                                                     
1994         -0- $   -0-    -0-  $  -0-  15,430,864  $ 154  $ 59,890 $(41,318)

Issuance                                                                        
of shares                                                                     
for                                                                           
professional                                                                  
services                                    110,000      1       384          

Issuance                                                                        
of stock                                                                      
warrants                                                                      
for                                                                           
services                                                         121          

Exercise                                                                        
of stock                                                                      
options                                                                       
and                                                                           
warrants                                  1,447,590     15     2,292          

Net loss                                                               ( 4,591) 
           ------  -----  -----  ------   ---------- -----    -------  -------
Balance                                                                         
as of                                                                         
March 31,                                                                     
1995          -0-    -0-    -0-     -0-  16,988,454    170    62,687  (45,909)

Issuance                                                                        
of shares                                                                     
in                                                                            
connection                                                                    
with                                                                          
private                                                                       
placements                                2,114,157     21      9,911         

Exercise                                                                        
of stock                                                                      
options                                     145,000      1        359         

Net loss                                                                (8,487) 
           -----  ------  -----  ------ ----------    ----   -------  ------
Balance                                                                         
as of                                                                         
March 31,                                                                     
1996          -0-     -0-    -0-    -0-  19,247,611    192   72,957   (54,396)

Exercise                                                                        
of stock                                                                      
options and                                                                   
warrants                                    335,000      3      939           

Common stock                                                                    
issued for                                                                    
acquisition                                                                   
of Sun World                              1,153,908     12    3,576           

Gross proceeds                                                                  
from private                                                                  
placement of                                                                  
redeemable                                                                    
preferred                                                                     
stock      26,131   26,131                                                    

Preferred                                                                       
shares                                                                        
issued for                                                                    
acquisition                                                                   
fees        1,500    1,500                                                    

Net proceeds                                                                    
from                                                                          
private                                                                       
placements                                                                    
of preferred                                                                  
stock                       1,300                           10,688            

Cash                                                                            
dividends                                                                     
paid on                                                                       
conversion                                                                    
of preferred                                                                  
stock                                                                     (99)

Dividends                                                                       
paid in                                                                       
common                                                                        
stock                                                                         
on                                                                            
conversion                                                                    
of                                                                            
preferred                                                                     
stock                                        28,777             127      (127)

Accrued                                                                         
dividends                                                                     
on                                                                            
preferred                                                                     
stock                                                                    (448)

Conversion                                                                      
of                                                                            
redeemable                                                                    
preferred                                                                     
to common                                                                     
stock         (200)  (200)                   53,332         1   199           

Conversion                                                                      
of                                                                            
preferred                                                                     
stock                                                                         
to common                                                                     
stock                         (960)       2,672,240        26   (26)          

Issuance                                                                        
of stock                                                                      
warrants                                                                      
for                                                                           
services                                                        114           

Net loss                                                                (5,997) 
           ------ -------    ------ ------- --------  -----  -------- --------
Balance                                                                         
as of                                                                         
December                                                                      
31,                                                                           
1996       27,431 $27,431     340   $ -  23,445,868  $  234 $88,574 $ (61,067)
         ======= =======   ======  ==== ==========   ===== ======= =========

      See accompanying notes to the consolidated financial statements.

CADIZ LAND COMPANY, INC.                                                        

NOTES TO THE CONSOIDATED FINANCIAL STATEMENTS                                   

NOTE 1 - DESCRIPTION OF BUSINESS                                                
---------------------------------                                               

The long-term strategy of Cadiz Land Company, Inc. (the               
"Company") is to acquire and develop water-related land and                     
agricultural assets.  The Company has created an integrated                     
and complimentary portfolio of landholdings, water resources,                   
and agricultural operations located within central and                          
southern California which either possess sizable assured                        
supplies of water or can, in future years, utilize water                        
supplied from other Company properties.  Management believes                    
that, with both the increasing scarcity of water supplies in                    
California and the increasing demand for water, the Company's                   
access to water will provide it with a competitive advantage                    
both as a major agricultural concern and as a supplier of                       
water which will lead to continued appreciation in the value                    
of the Company's portfolio.                                                     

On September 13, 1996, the Company acquired all of the                
stock of a reorganized Sun World International, Inc. ("Sun                      
World") pursuant to a consensual plan of reorganization                         
(Debtors' Modified Fourth Amended Consolidated Plan of                          
Reorganization dated June 3, 1996 (Modified)) which was                         
confirmed by the U.S. Bankruptcy Court at a hearing on July                     
12, 1996.  Sun World and certain subsidiaries of Sun World had                  
filed voluntary petitions for relief under Chapter 11 of the                    
Bankruptcy Code on October 3, 1994 after debt restructuring                     
negotiations with Sun World's existing lenders failed.                          

With its acquisition of Sun World, the Company has become             
a vertically integrated agricultural company.  Sun World owns                   
and farms approximately 17,300 acres in two major growing                       
areas of California, the Southern San Joaquin Valley and the                    
Coachella Valley.  Fresh produce, including table grapes, tree                  
fruit, peppers and watermelon are marketed, packed and shipped                  
to food wholesalers and retailers located throughout the                        
United States and to over 30 foreign countries.  As of                          
December 31, 1996, Sun World owned and operated five cold                       
storage and/or packing facilities located in California.                        

In addition, the acquisition of Sun World provided the                
Company valuable water rights throughout the central and                        
southern valleys of California.  The Company's landholdings,                    
which now total approximately 56,300 acres, are located                         
adjacent to the major aqueduct systems of central and southern                  
California, and in close proximity to the Colorado River.  The                  
Company expects to utilize these resources to participate in                    
a broad variety of water transfer and storage projects,                         
including the storage and transfer of surplus water for public                  
agencies which require supplemental sources of water.                           

Although the development and management activities of the             
Company are currently focused on agricultural operations                        
(primarily through its wholly-owned subsidiary, Sun World) and                  
water resource development, the Company will continue to seek                   
to develop and manage its land, water and agricultural                          
resources for their best use.                                                   

NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                              
--------------------------------------------------                              
PRINCIPLES OF CONSOLIDATION                                                     

The consolidated financial statements include the                     
accounts of the Company and its wholly-owned subsidiaries,                      
Sun World (since September 14, 1996), Cadiz Valley Development                  
Corporation, Inc., and Southwest Fruit Growers Limited                          
Partnership, a limited partnership ("SWFG") in which the                        
Company is the general partner and has an approximate 66.3                      
percent partnership interest.  SWFG owns a total of 680 acres                   
of table grape vineyards and 2,560 acres of undeveloped land                    
at Cadiz, California.  Allocable losses incurred through the                    
year ended March 31, 1991 served to eliminate the minority                      
interest in SWFG for accounting purposes.  All material                         
intercompany balances and activity have been eliminated from                    
the consolidated financial statements.                                          

CHANGE IN YEAR END AND RECLASSIFICATIONS                                        

As a result of the Company's acquisition of Sun World,                
the Company changed its fiscal year end from March 31 to                        
December 31 in order to align the Company's year end with that                  
of Sun World.  Prior to the acquisition of Sun World, the                       
Company had utilized an unclassified balance sheet                              
(eliminating the distinction between current assets and long-term               
assets and current liabilities and long-term                                    
liabilities).  The financial statements set forth herein                        
utilize a classified balance sheet, thus requiring certain                      
reclassifications to be made to the prior period balances to                    
conform with the December 31, 1996 presentation.                                

The following unaudited information for the nine months               
ended December 31, 1995, which does not include the operations                  
of Sun World, is presented for informational purposes only                      
(dollars in thousands):                                                         

           Nine months
         ended
           December 31, 1995
           ---------------

Revenues                            $    1,120                        
Net loss                            $   (5,346)                       
Net loss per common share           $    (0.31)                       

USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS                         

The preparation of financial statements in conformity                 
with generally accepted accounting principles requires                          
management to make estimates and assumptions that affect the                    
reported amounts of assets and liabilities and disclosure of                    
contingent assets and liabilities at the date of the financial                  
statements and the reported amounts of revenues and expenses                    
during the reporting period.  Actual results could differ from                  
those estimates.                                                                

PROPERTY, PLANT AND EQUIPMENT                                                   

Property, plant and equipment are stated at cost.                     

The Company capitalizes direct and certain indirect costs             
of planting and developing orchards and vineyards during the                    
development period, which varies by crop and ranges from three                  
to seven years.  Depreciation commences in the year commercial                  
production is achieved.                                                         

Permanent land development costs, such as acquisition                 
costs, clearing, initial leveling costs and other costs                         
required to bring the land into a suitable condition for                        
general agricultural use, are capitalized and not depreciated                   
since, by definition, these costs have an indeterminate useful                  
life.                                                                           

Depreciation is provided using the straight-line method               
over the estimated useful lives of the assets, generally ten                    
to forty-five years for land improvements and buildings, three                  
to twenty-five years for machinery and equipment, and ten to                    
thirty years for permanent crops.                                               

LAND HELD FOR DEVELOPMENT                                                       

Land held for development consists of approximately                   
37,000 acres of undeveloped land in Cadiz, Piute and other                      
desert regions of California.  Land held for development is                     
stated at cost.  Cost includes those that are directly related                  
to the acquisition of the acreage, such as the cost to                          
purchase, commissions, real estate taxes and legal and other                    
professional fees.                                                              

INVESTMENT IN PARTNERSHIPS                                                      

Sun World has investments in various partnerships which               
are accounted for using the equity method.  Sun World's two                     
principal partnerships are American Sunmelon and Sun Date,                      
both of which are 50% owned.  American Sunmelon is engaged in                   
proprietary development, production, and marketing of seedless                  
watermelon seed. Sun Date is engaged in the processing of                       
dates.  In September 1996, Sun Date and Sun World entered into a                
marketing agreement whereby Sun World agreed to sell the dates                  
produced by Sun Date.  During the period September 14, 1996                     
through December 31, 1996, Sun World made payments to Sun Date                  
totaling $869,000, primarily related to date crop proceeds.                     

ASSETS HELD FOR SALE                                                            

Certain Sun World assets were identified as either idle               
facilities, fallow land, or farming operations which have                       
experienced consistently low returns on investment.  As of                      
December 31, 1996, assets totaling $6,534,000 have been                         
identified and are included in the accompanying consolidated                    
balance sheet at the lower of cost or fair value less                           
estimated costs to sell.  The Company reasonably believes                       
these assets can be sold within one year.                                       

SUPPLEMENTAL CASH FLOW INFORMATION                                              

The Company considers all short-term deposits with an                 
original maturity of three months or less to be cash                            
equivalents.  The Company invests its excess cash in deposits                   
with major international banks and, therefore, bears minimal                    
risk.  Such investments are stated at cost, which approximates                  
fair value, and are considered cash equivalents for purposes                    
of reporting cash flows.  At December 31, 1996, cash and cash                   
equivalents totalled $33,307,000, of which $453,000                             
represented the balance remaining in the trust account for the                  
payment of unsecured creditors' claims as determined during                     
the reorganization of Sun World.                                                

Cash paid for interest during the nine months ended                   
December 31, 1996 and the fiscal years ending March 31, 1996,                   
and 1995 was $3,892,000, $455,000 and $6,000, respectively.                     

WATER RIGHTS AND TRANSFER AND STORAGE PROJECTS                                  

All water rights and transfer and storage projects are                
stated at cost.  All costs directly attributable to the                         
development of the water transfer projects are being                            
capitalized by the Company.  These costs, which are expected                    
to be recovered through future revenues, consist of drilling                    
costs, hydrological costs, consulting fees for various                          
engineering, environmental and feasibility studies, and other                   
professional and legal fees.                                                    

INVENTORIES                                                                     

Growing crops, pepper seed, and materials and supplies                
are stated at the lower of cost, on a first-in, first-out                       
(FIFO) basis, or market.  Growing crops inventory includes                      
direct costs and an allocation of indirect costs.                               

REVENUE RECOGNITION                                                             

The Company recognizes crop sale revenue after harvest                
and delivery to customers.  Packing revenues are recognized as                  
units are packed.  Marketing commission revenues are                            
recognized at the time of product shipment.                                     

RESEARCH AND DEVELOPMENT                                                        

Sun World incurs costs to research and develop new                    
varieties of proprietary products.  Research and development                    
costs are expensed as incurred.  Such costs were approximately                  
$120,000 during the period September 14, 1996 through December                  
31, 1996.                                                                       

EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED                               

As a result of a merger in May 1988 between two companies             
which eventually became known as Cadiz Land Company, Inc.,                      
excess of purchase price over net assets acquired in the                        
amount of $7,006,000 was recorded.  This amount is being                        
amortized at the rate of $234,000 annually on a straight-line                   
basis over thirty years.  Accumulated amortization was                          
$2,026,000 and $1,851,000 at December 31, 1996 and March 31,                    
1996, respectively.                                                             

IMPAIRMENT                                                                      

The Company annually evaluates its long-lived assets,                 
including intangibles, for potential impairment.  When                          
circumstances indicate that the carrying amount of the asset                    
may not be recoverable, as demonstrated by estimated future                     
cash flows, an impairment loss would be recorded based on fair                  
value.                                                                          

INCOME TAXES                                                                    

Income taxes are provided for using an asset and                      
liability approach which requires the recognition of deferred                   
tax assets and liabilities for the expected future tax                          
consequences of temporary differences between the financial                     
statement and tax bases of assets and liabilities at the                        
applicable enacted tax rates.  A valuation allowance is                         
provided when it is more likely than not that some portion or                   
all of the deferred tax assets will not be realized.                            

NET LOSS PER COMMON SHARE                                                       

Net loss per common share is computed by dividing the net             
loss, after deduction for preferred dividends either accrued                    
or imputed, if any, by the weighted average shares                              
outstanding.  As described in Note 10, the terms for                            
conversion of the Series B and C preferred stock issued during                  
the nine months ended December 31, 1996 afforded the holders                    
a conversion price lower than the market price of the common                    
stock at the time of issuance, in order to recognize the sales                  
and other market restrictions of the unregistered common stock                  
to be issued upon conversion.  The difference between the                       
conversion price and market price has been  reported as an                      
imputed dividend for purposes of calculating net loss per                       
common share although no assets of the Company will ever be                     
expended.  The imputed dividend of $2,451,000 had the effect                    
of increasing the loss per share for the nine months ended                      
December 31, 1996 by $0.11.  It should be noted that the                        
imputed dividend has been given no other accounting                             
recognition in the financial statements of the Company for                      
that period and there will be no recognition given in the                       
future.                                                                         

NOTE 3 - ACQUISITION OF SUN WORLD INTERNATIONAL, INC.                           
-----------------------------------------------------                           
On September 13, 1996, the Company acquired all of the                
stock of a reorganized Sun World.  The acquisition of Sun                       
World was accounted for under the purchase method of                            
accounting.  Accordingly, the results of operations of Sun                      
World have been included in the consolidated financial                          
statements since the date of acquisition.  The total purchase                   
price consisted of the following:  (i) $179 million of assumed                  
bankruptcy related obligations including $156 million of                        
restructured secured debt with Sun World's existing lenders                     
(of which $5.5 million was paid by Cadiz concurrent with the                    
acquisition), (ii) $11 million of ongoing trade and other                       
accrued liabilities which were assumed by Cadiz, (iii) $3.2                     
million of direct acquisition costs, including 1,500 shares of                  
Redeemable Series A Preferred Stock valued at $1,000 per                        
share; and (iv) cash and stock of approximately $40 million,                    
including a $15 million capital contribution to Sun World                       
which was made with the intent of eliminating the requirement                   
for Sun World to have any additional debt facilities beyond                     
those owed to its existing secured creditors.  The effect of                    
allocating the total purchase price to the net assets acquired                  
based on their estimated fair values is summarized as follows                   
(dollars in thousands):                                                         

Cash                               $   32,113                         
Assets held for sale                   18,049                         
Other current assets                   45,225                         
Investments in partnerships             5,424                         
Property, plant and equipment         129,050                         
Other assets                            3,409                         
             -------
Total assets                        233,270                       
             -------
Prepetition bankruptcy                                                
claims payable                       (13,164)                       
Other current liabilities             (15,870)                        
Long-term debt                       (151,783)                        
Other liabilities                      (9,170)                        
             -------
Total liabilities                   189,987                       
             -------
Net assets acquired                $   43,283                         
             =======

No goodwill was recognized as a result of the acquisition.                      

The unaudited pro forma summary for the nine months ended             
December 31, 1996 and the year ended March 31, 1996 reflect                     
combined results of operations of the Company and Sun World as                  
if the acquisition had occurred as of April 1, 1995.  Since                     
prior to the current fiscal period, the fiscal year ends of                     
the Company and Sun World differed, for pro forma purposes,                     
the Sun World results of operations have been adjusted to                       
conform to the Cadiz reporting periods.  The pro forma                          
adjustments include, among others, decreased interest expense                   
as a result of the refinancing of Sun World's existing secured                  
lenders and increased depreciation as a result of the purchase                  
price allocation. The pro forma adjustments do not reflect the                  
elimination of charges directly attributable to the Chapter 11                  
bankruptcy proceedings which are not expected to recur                          
subsequent to the emergence from bankruptcy effective                           
September 13, 1996.  See footnote (a) for a more detailed                       
explanation of charges directly attributable to Sun World's                     
emergence from bankruptcy.  The following pro forma financial                   
information is presented for informational purposes only and                    
is not necessarily indicative of the results of operations                      
that would have occurred if the acquisition had been                            
consummated as of the beginning of the periods presented, nor                   
is it necessarily indicative of the future operating results                    
of the Company.                                                                 

The unaudited pro forma financial information is as                   
follows (in thousands except per share data):                                   

              Nine months ended             Year ended
                December 31, 1996           March 31, 1996
               ------------------           ------------
                 Actual   Pro Forma      Actual    Pro Forma
                  --------  --------      --------   -----------

Revenue             $  23,780  $ 98,010      $   1,441   $ 118,292      

Net loss              $(5,997) $ (2,158)(a)  $  (8,487)  $ (13,811)(a)  

Less:  Preferred                                                        
stock dividends    $   (674)  $ (1,828)     $     -0-   $ (2,438)     

Imputed dividend                                                    
on preferred                                                    
stock           $ (2,451)  $     -0-     $     -0-   $ (1,959)  
              ---------  ---------     ---------   ---------
Net loss                                                                
applicable to                                                         
common stock      $  (9,122)  $ (3,986)     $  (8,487)  $(18,208)     
             ==========  =========     ==========  =========
Net loss per                                                            
common share      $    (.44)  $   (.18)(a)  $    (.48)  $   (.97)(a)  
              =========== ==========    ==========  ==========
Weighted-average                                                        
shares                                                                
outstanding          20,500     21,600          17,700    18,800      
               =========  =========     ==========  ==========
-----------------------                                                         
     (a)  Includes for the nine months ended December 31, 1996 and the
      year ended March 31, 1996, charges incurred by Sun World
          totaling $4.8 million and $11.3 million, respectively, which
     were directly attributable to the Chapter 11 bankruptcy
        proceedings and are non-recurring in nature.  Exclusion of
          the non-recurring charges would have resulted in a pro forma
         net income (loss) per share of $.04 and ($.37) for the nine
         months ended December 31, 1996 and the year ended March 31,
1996, respectively.                               

NOTE 4 - ACCOUNTS RECEIVABLE                                                    
----------------------------                                                    
Accounts receivable consisted of the following (dollars in  
thousands):                                                                     

December 31,   March 31,  
   1996       1996
 --------    -------
Trade receivables         $ 3,632    $   443                        
Due from unaffiliated                                               
growers                    1,153        -0-                       
Other                       3,228        -0-                        
    ------    --------
    8,013        443

Less allowance                                                      
for doubtful accounts        480        -0-                       
    ------      ------
  $ 7,533    $   443
   =======    ========

Substantially all domestic receivables are from large         
national and regional supermarket chain stores and produce                      
brokers and are unsecured.  Amounts due from unaffiliated                       
growers represent receivables for services (harvest, haul                       
and pack) provided on behalf of growers under agreement with                    
Sun World and are recovered from proceeds of product sales.                     
Other receivables primarily include lemon crop sales,                           
by-product sales and accounts receivable from joint venture                     
partners.                                                                       

Approximately $3.8 million of sales made by Sun World           
from September 14, 1996 through December 31,1996 are                            
attributable to one national retailer.                                          

NOTE 5 - INVENTORIES                                                            
--------------------                                                            
Inventories consisted of the following (dollars in    
thousands):                                                                     

       December 31,  March 31,
        1996        1996
        -------     --------

Growing crops       $ 10,299     $   -0-              
Pepper seed, net       2,018         -0-              
Harvested product        267         -0-              
Materials and                                         
supplies             1,537         266            
      -------      -------

      $ 14,121     $   266
     ========     ======

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT                                          
---------------------------------------                                         
Property, plant and equipment consisted of the        
following (dollars in thousands):                                               

        December 31,   March 31,
           1996     1996
         ---------- ----------
Land                $ 41,358  $  2,364            
Permanent crops       71,966     8,498            
Land improvements      1,839     1,851            
Buildings             19,148       852            
Machinery and                                     
equipment            9,013     1,064          
         --------   --------
         143,324    14,629

Less accumulated                                  
depreciation        (5,427)   (2,948)         
        --------   -------
        $137,897  $ 11,681
        ========  ========

NOTE 7 - LONG-TERM DEBT                                                         
------------------------                                                        
Management estimates that the fair value of its                 
long-term debt approximates the carrying value as the                           
preponderance of the obligations contain variable interest                      
rates or were recently issued at market rates as part of the                    
acquisition of Sun World.  At December 31, 1996 and March                       
31, 1996, the carrying amount of the Company's outstanding                      
debt is summarized as follows (dollars in thousands):                           

                                   December 31,  March 31,
                                   1996           1996
                                  -------        -------
Cadiz obligations:                                                          
Senior term bank loan, interest                                         
payable monthly, variable                                             
interest rate based upon LIBOR                                        
plus 1% (6.34% at                                                     
December 31, 1996)                       $ 9,446         $ 8,630      

Subordinated term bank loan,                                            
interest payable                                                      
monthly, interest at 4.81%                 9,100           9,100      

Other                                          88             105       

Debt discount                                (124)           (218)      
                                    --------        --------
                                    18,510          17,617
Sun World obligations:                                                      
Term insurance company                                                  
loan due in variable                                                  
installments through                                                  
September 13, 2006,                                                   
interest at 10.60%                        77,092             -0-      

Term bank loan, interest                                                
payable monthly with                                                  
principal due in variable                                             
installments through                                                  
September 13, 2006,                                                   
variable interest rate                                                
based upon prime or LIBOR                                             
(8.60% at December 31, 1996)              53,284             -0-      

Note payable to insurance                                               
company, quarterly                                                    
installments of $93                                                   
(including interest),                                                 
due September 13, 2006,                                               
interest at 7.75%                          2,531             -0-      

Note payable to supplier,                                               
monthly installments of                                               
$104 (including interest),                                            
due March 1, 1998,                                                    
interest at 10.00%                         1,458            -0-       

Note payable to finance                                                 
company, monthly                                                      
installments of $18                                                   
(including interest),                                                 
due July 1, 2002,                                                     
interest at 7.50%                            989            -0-       
                                    --------          --------
                                   153,864          17,617
Less current portion                       (4,753)        (17,617)      
                                    ---------        ---------
                                $  149,111        $    -0-
                                   ===========       ===========

Annual maturities of long-term debt outstanding, excluding          
$124,000 representing the unamortized portion of warrants,                      
on December 31, 1996 are as follows:  1997 - $4,877,000;                        
1998 - $24,253,000; 1999 - $9,374,000; 2000 - $11,398,000;                      
2001 - $11,410,000, 2002 and thereafter - $92,676,000.                          

CADIZ OBLIGATIONS                                                               

As of December 31, 1996, the Company's obligations to           
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.                            
("Rabobank") and Henry Ansbacher & Co. Limited ("Ansbacher")                    
were approximately $9.1 million and $9.4 million,                               
respectively, both of which were to mature on January 31,                       
1997.                                                                           

The Company reached an agreement with Rabobank which        
extended the maturity date of the Company's debt facilities                     
with Rabobank to April 30, 1997.  Additionally, the Company                     
reached an agreement with Rabobank which extended the                           
period, to April 30, 1997, in which the Company has the                         
ability to exercise its right to obtain two one-year                            
extensions.  The Company has also reached an agreement with                     
Ansbacher whereby the maturity date of the Company's debt                       
facilities with Ansbacher has been extended to April 30,                        
1997.  ING Baring (U.S.) Capital Corporation ("ING") has                        
purchased the $9.4 million Ansbacher debt obligation                            
effective March 31, 1997.  The maturity date of such                            
obligation has been extended to April 30, 1998 with interest                    
at a rate of LIBOR plus 200 basis points payable at LIBOR                       
only semi-annually, with the remaining accrued interest                         
added to principal.  ING granted to Cadiz the right to                          
obtain two one-year extensions.  In connection with this                        
transaction, ING received warrants to purchase 75,000 shares                    
of Cadiz' common stock at an exercise price equal to the                        
market price at May 1, 1997, the time such warrants become                      
exercisable.  Upon the exercise of the first and second                         
extension, the interest rate will be further adjusted and                       
Cadiz will be required to issue additional warrants to ING.                     

The Company continues to evaluate possible alternative      
means of repayment and/or refinancing of the Rabobank                           
facility.  The determination of which funding mechanism (or                     
combination) the Company will utilize will be evaluated on                      
an ongoing basis by the Company in consultation with an                         
investment banking firm which has been retained by the                          
Company.  Based upon the Company's intent and ability to                        
refinance the Rabobank and Ansbacher debt facilities, as                        
evidenced by the agreements reached with Rabobank and ING,                      
as discussed above, the debt facilities have been classified                    
as long-term as of December 31, 1996.  In addition to                           
repayment of the Rabobank facility, the Company is                              
considering a financing during 1997 which would be used to                      
refinance the existing primary debt facilities of Sun World                     
with terms which management would view as more favorable to                     
the Company and Sun World.                                                      

The terms of the Company's two one-year extension options   
for the Rabobank debt are essentially the same as those                         
agreed upon by the parties in September 1996, except the                        
date required to exercise the first extension has been                          
changed from January 31, 1997 to April 30, 1997.  As before,                    
it is a condition to such extension that the total                              
outstanding debt to Rabobank does not exceed $8,500,000 at                      
the time such extension becomes effective.  Upon exercise of                    
each of the first and second extensions, the Company would                      
be required to pay to Rabobank certain fees.  The interest                      
rate to be in effect during each extension period will be at                    
Rabobank's cost of funds plus one and one quarter percent                       
(1-1/4%).  In September 1996, when Rabobank agreed to extend                    
the maturity date of this debt to April 30,1997, the                            
interest rate was adjusted to Rabobank's cost of funds plus                     
one and one quarter percent (1-1/4%) beginning February 1,                      
1997.  As part of the September 1996 extension, the Company                     
paid an initial commitment fee of $150,000 and issued 30,000                    
new warrants to purchase the Company's common stock at $0.05                    
per share exercisable for five years following the date of                      
issuance and extended the expiration date of the outstanding                    
Rabobank warrants to December 31, 2000.  The total value of                     
the warrants issued in September 1996, $114,000, has been                       
recorded as debt discount which is being amortized over the                     
remaining term of the debt.  Currently, ING and Rabobank                        
hold senior and subordinated deeds of trust, respectively,                      
on substantially all of the Company's non-Sun World related                     
property.                                                                       

Prior to the extensions discussed above, on March 15,       
1995, the Company entered into an agreement whereby                             
Ansbacher provided a loan facility aggregating $3,000,000.                      
Additionally, Ansbacher agreed to accrue and capitalize                         
interest on the outstanding principal amount of these                           
advances through January 1997.  In consideration for this                       
agreement, Ansbacher received 110,000 shares of common stock                    
valued at $3.50 per share.  The Company also issued to                          
Rabobank 35,000 warrants to purchase the Company's common                       
stock at $.05 per share exercisable for three years                             
following the date of issuance.  The total value of these                       
warrants, $121,000, has been recorded as a debt discount and                    
is being amortized over the remaining term of the debt.  In                     
addition, Rabobank agreed to subordinate to Ansbacher's                         
senior security interests.                                                      

Prior to the extensions and the March 1995 arrangement      
discussed above, the Company's outstanding obligations to                       
Rabobank and Ansbacher (collectively, the "Banks") were                         
governed by the January 1994 financing arrangements whereby                     
interest rates on outstanding debt to the Banks were fixed                      
until January 1997.  Interest on the Ansbacher portion was                      
accrued and capitalized through January 31, 1997.  Rabobank                     
interest was paid quarterly subsequent to December 1994,                        
through draw downs against a letter of credit provided by                       
Ansbacher for that purpose.  The amount drawn under the line                    
of credit totalled $816,015 at December 31, 1996.  In                           
addition, as a result of the January 1994 financing                             
arrangements, Rabobank returned and canceled 533,000                            
outstanding warrants in exchange for 175,000 new warrants to                    
purchase the Company's common stock at $0.05 per share                          
exercisable for three years following the date of issuance.                     
The total value of these warrants, $604,000, has been                           
recorded as a debt discount and was amortized over the                          
remaining term of the debt.  In addition, Ansbacher received                    
100,000 shares of common stock as an arrangement fee and                        
50,000 shares of common stock as an advisory fee valued at                      
$3.50 per share.  The Company also agreed to convert                            
$770,000 of debt to Ansbacher into 220,000 shares of common                     
stock.                                                                          

In June 1994, the Company retired a note payable in the     
amount of $249,000 to an individual at a discounted amount,                     
resulting in an extraordinary gain of $115,000.  The note,                      
which originated in 1985, was scheduled to be retired with a                    
balloon payment in December 1996.                                               

SUN WORLD OBLIGATIONS                                                           

Sun World's financing agreements are collateralized by      
substantially all of Sun World's assets.   The term                             
insurance company loan and term bank loan (collectively the                     
"Term Loans") provide for principal payments in variable                        
amounts at the end of March, August and December of each                        
year.  Additionally, the Term Loans provide for interest                        
deferral, at the Company's option, for the Company's peak                       
seasonal need for working capital during the months of April                    
to July, which are payable at the end of August and                             
September.                                                                      

The Company's financing arrangements require, among other   
terms, minimum amounts, as defined, of working capital and                      
tangible net worth and minimum ratios of current assets to                      
current liabilities and indebtedness to net worth.                              
Additionally, the financing arrangements with Sun World's                       
secured lenders include covenants which restrict the                            
Company's ability to receive distributions from Sun World,                      
whose net assets totaled approximately $42,000,000 at                           
December 31, 1996.                                                              

NOTE 8 - INCOME TAXES                                                           
---------------------                                                           
As of December 31, 1996, the Company has a net operating    
loss (NOL) carryforward of approximately $60,808,000 for                        
federal and $35,534,000 for state income tax purposes.  Such                    
carryforwards expire in varying amounts through the year                        
2012.  For financial reporting purposes, the tax benefit                        
resulting from utilization of such NOL carryforward will be                     
applied to reduce the excess of purchase price over net                         
assets acquired.                                                                

In accordance with the Tax Reform Act of 1986, NOL          
utilization may be subject to an annual limitation.  When                       
there is a change in ownership of more than 50 percent (as                      
defined) of a corporation, the use of any NOL existing at                       
the date of the change of ownership is limited annually to                      
an amount defined by law.  Based upon such formula, use of                      
approximately $25,268,000 of the federal NOL is limited to                      
approximately $720,000 per year.  An additional $20,153,000                     
of federal NOL is limited to approximately $4,508,000 per                       
year for an ownership change that occurred in September                         
1993.  The remaining $15,387,000 of federal NOL is currently                    
available to offset federal taxable income in any future                        
years.  No annual limitations apply to the state NOL                            
carryforwards which expire in various amounts through the                       
year 2000.                                                                      

A reconciliation of the provision (benefit) for income      
taxes to the statutory federal income tax rate is as follows                    
(dollars in thousands):                                                         

Nine Months       
               Ended          Year Ended
            December 31,       March 31,
           ------------       ----------
                    1996       1996         1995
                   -----       ----        -----
Expected federal income                                                     
tax benefit at 34%          $  (1,660)   $  (2,886)   $  (1,561)          
Net operating loss                                                          
carryforward for                                                          
financial reporting                                                       
purposes                        1,790        2,405        1,468           
Amortization                        60           80           79            
Utilization of net                                                          
operating losses                 (696)         -0-          -0-           
Other nondeductible                                                         
expenses                         (135)         401           14           
                    ---------    --------      ---------
                 $    (641)    $    -0-      $   -0-
                    ==========    =========     ==========

Deferred taxes are recorded based upon differences between            
the financial statement and tax basis of assets and                             
liabilities and available carryforwards.  Temporary                             
differences and carryforwards which gave rise to a                              
significant portion of deferred tax assets and liabilities                      
as of December 31, 1996 and March 31, 1996 were as follows                      
(in thousands):                                                                 

                 December 31,    March 31,
                      1996        1996
                      ----       -----
Deferred tax liabilities:                                               
Net fixed asset                                                     
basis difference                  $  5,786    $     -0-           
Purchase accounting adjustment          440          -0-            
State taxes                             336          -0-            
Other                                     4          -0-            
                       --------    ---------

Total deferred tax liablities      6,566          -0-         
                       --------    ---------
Deferred tax assets:                                                    
Net operating losses                 23,943       21,136            
Reserve for notes receivable          1,239          -0-            
Capitalized legal fees                  892          -0-            
Basis difference in water rights         99          -0-            
Net basis difference in                                             
partnership investments             (4,734)      (4,337)          
State taxes                           1,478         (407)           
Other                                   237          283            
                         -------     ---------
Total deferred tax assets         23,154       16,675         

Valuation allowance                                                 
for deferred tax asset             (20,935)     (16,675)          
                         --------    ---------
Total deferred tax assets, net     2,219          -0-         
                         --------    ---------
Net deferred tax liability     $   4,347     $    -0-         
                       =========     =========

NOTE 9 - EMPLOYEE BENEFIT PLANS                                                 
-------------------------------                                                 
 In December 1994, the Company established a 401(k) Plan
for all employees of Cadiz.  This plan contains no                              
eligibility requirements and contributions by the Company                       
are at the option of the Company on a year-to-year basis.                       
No contributions by the Company to this plan have been made                     
to-date.                                                                        

Sun World established a 401(k) Plan for its salaried  
employees on January 1, 1996.  Employees must work 1,000                        
hours and have completed one year of service to be eligible                     
to participate in this plan.                                                    

 In addition, Sun World maintains a defined contribution
pension plan covering substantially all of its employees not                    
covered by a collective bargaining agreement, with at least                     
one year of service and who have worked at least 1,000                          
hours.  Contributions are 2% of each covered employee's                         
salary.  There were no contributions made for the period                        
from September 14, 1996 to December 31, 1996.  For those                        
hourly employees covered under a collective bargaining                          
agreement, contributions are made to a multi employer                           
pension plan in accordance with negotiated labor contracts                      
and are generally based on the number of hours worked.                          

NOTE 10 - PREFERRED AND COMMON STOCK                                            
------------------------------------                                            
During the fiscal year ended March 31, 1996, the      
Company completed private placements of 2,114,157 shares of                     
its common stock, resulting in gross proceeds of                                
$10,199,000.  During the nine months ended December 31,                         
1996, the Company issued (i) $27.6 million of newly                             
authorized Convertible Series A Redeemable Preferred Stock                      
("Series A Redeemable Preferred"); (ii) $10.0 million of                        
newly authorized 6% Convertible Series B Preferred Stock                        
("Series B Preferred"); and (iii) $3.0 million of newly                         
authorized 6% Convertible Series C Preferred Stock ("Series                     
C Preferred").                                                                  

A description of each series of preferred stock       
follows:                                                                        

SERIES A REDEEMABLE PREFERRED                                                   

Shares of Series A Redeemable Preferred were not          
convertible when issued, but became convertible into shares                     
of common stock, at the option of the holder, on November 12                    
1996 upon the filing by the Company of an Amendment to its                      
Certificate of Incorporation ("Amendment") increasing the                       
Company's authorized common stock from 24,000,000 to                            
45,000,000, thereby allowing the Company to reserve                             
sufficient shares of common stock for issuance upon                             
conversion.  Concurrently with the filing of the Amendment,                     
the conversion price ("Series A Conversion Price") was set                      
at $3.75.  Holders are entitled to cumulative dividends                         
payable semi-annually in cash or common stock at a rate of                      
six percent (6%) per annum.  During the nine months ended                       
December 31, 1996, 200 shares of Series A Redeemable                            
Preferred were converted at the Series A Conversion Price                       
resulting in the issuance of 53,332 common shares.  The                         
Series A Redeemable Preferred is also mandatorily                               
convertible in full at the option of the Company at any time                    
prior to six months following the filing of the Amendment at                    
the Series A Conversion Price provided that, as a condition                     
to such conversion, the Company pay to holders one full                         
year's worth of dividends (less the amount of any dividends                     
theretofore paid).  Holders are entitled to a mandatory                         
liquidation preference equal to the initial purchase price                      
of $1,000 per share if conversion has not occurred prior to                     
September 2001.  The Company will exercise its mandatory                        
conversion right during April 1997 which will result in the                     
issuance of 7,314,920 shares of common stock in May 1997 in                     
replacement of all Series A Redeemable Preferred.  The                          
Series A Redeemable Preferred ranks senior and prior to the                     
Company's common stock and on a parity with any other class                     
or series of preferred stock.  Except as provided by law,                       
holders are not entitled to vote upon any matter submitted                      
to a vote of the Company's stockholders.                                        

SERIES B AND C PREFERRED                                                        

Shares of Series B and C Preferred were immediately   
convertible upon issuance into shares of common stock, at                       
the option of the holder, at a price equal to the lower of                      
(a) $5.8125 per share or (b) eighty-five percent (85%) of                       
the average closing bid price over the ten-trading day                          
period ending on the day prior to the submission of any                         
conversion notice ("Series B/C Conversion Price").  Holders                     
are entitled to cumulative dividends payable upon conversion                    
or maturity in cash or common stock at a rate of six percent                    
(6%) per annum.  The Company reserves the right to redeem                       
any shares of Series B or Series C Preferred for $11,765 per                    
share in cash by giving holders five days notice.  Any                          
Series B or Series C Preferred shares outstanding one year                      
following issuance are mandatorily converted into common                        
stock at the Series B/C Conversion Price.  Holders are                          
entitled to a liquidation preference equal to the initial                       
purchase price of $10,000 per share.  During the nine months                    
ended December 31, 1996, 760 shares of Series B Preferred                       
and 200 shares of Series C Preferred were converted at the                      
Series B/C Conversion Price, resulting in the issuance of                       
2,627,240 common shares.  The Series B and C Preferred rank                     
senior and prior to the Company's common stock and on a                         
parity with any other class or series of preferred stock.                       
Except as provided by law, holders are not entitled to vote                     
upon any matter submitted to a vote of the Company's                            
stockholders.                                                                   

NOTE 11- STOCK-BASED COMPENSATION PLANS AND WARRANTS                            
----------------------------------------------------                            
STOCK OPTIONS AND WARRANTS                                                      

The Company issues options pursuant to a newly adopted          
1996 Stock Option Plan (the "Plan") as well as options which                    
are not pursuant to a plan.  The Plan provides for the                          
granting of up to 3,000,000 shares.  All options, whether                       
under the Plan or not, are granted at a price not less than                     
100% of the fair market value at the date of option, have                       
vesting periods ranging from issuance date to three years,                      
have maximum terms ranging from three to five years and are                     
issued to directors, officers, consultants and employees of                     
the Company.  During the nine months ended December 31,                         
1996, the Board of Directors of the Company granted options                     
to purchase 1,800,000 shares of the Company's common stock                      
at a weighted average fair value of $4.62 per share of which                    
1,350,000 options are conditional based upon terms of                           
employment and certain performance criteria.                                    

Compensation cost for stock options is measured as the              
excess, if any, of the quoted market price of the Company's                     
stock at the date of the grant over the amount an employee                      
must pay to acquire the stock.  Had compensation cost for                       
these plans been determined using fair value, as explained                      
below, rather than the quoted market price, the Company's                       
net loss and loss per common share would have been reduced                      
to the following pro forma amounts (dollars in thousands):                      

            Nine Months     Year
                Ended        Ended
                December 31,   March 31,
                 1996         1996
                -----        -----
Net loss:    As reported  $  (5,997)     $ (8,487)            
 Pro forma    $  (6,655)     $ (8,665)
Net loss                                                      
per common                                                  
share:    As reported  $    (.44)(a)  $   (.48)         
 Pro forma    $    (.48)(a)  $   (.49)

------------------------------------                                            
(a) After adjustment for accrued and imputed preferred      
dividends during the nine months ended December 31, 
1996 of $674 and $2,451, respectively.              

The fair value of each option granted during the periods            
reported was estimated on the date of grant using the                           
Black-Scholes option pricing model with the following weighted-                 
average assumptions used for the grants for the nine months                     
ended December 31, 1996 and the fiscal year ended March 31,                     
1996, respectively:  risk free interest rate of 6.58% and                       
6.15%; expected life of expiration date less one year for                       
both periods; expected volatility of 52.68% and 53.87% and                      
no dividend yield.                                                              

The following table summarizes stock option activity for    
the periods noted.  All options listed below were issued to                     
officers, directors, employees and consultants.                                 

              Options      Weighted-
           Outstanding     Average
                  Number      Exercise Price
                 -----------  --------------
Outstanding at March 31, 1994       1,801,890     $  1.57                       
Granted                           1,872,000     $  4.48                     
Expired or cancelled                 (4,500)    $  4.63                     
Exercised                        (1,333,890)    $  1.49                     
------------

Outstanding at March 31, 1995       2,335,500     $  3.95                       
Granted                             607,500     $  5.19                     
Expired or cancelled                 (7,000)    $  4.89                     
Exercised                          (145,000)    $  2.50                     
----------
Outstanding at March 31, 1996       2,791,000     $  4.29                       
Granted                           1,800,000     $  4.62                     
Expired or cancelled               (400,000)    $  5.50                     
Exercised                          (325,000)    $  2.79                     
 ---------
Outstanding at December 31, 1996    3,866,000(a)  $  4.44                       
             =========     =======
Options exercisable at                                                          
March 31, 1995          1,935,500     $  4.07           
             =========     =======
Options exercisable at                                                          
March 31, 1996          2,116,000     $  4.34           
             =========     =======
Options exercisable at                                                          
December 31, 1996       1,966,000     $  4.30           
             =========     =======
Weighted-average fair                                                           
value of options granted                                                    
during the nine-month                                                       
period  ended                                                               
December 31, 1996                $    4.62                                  
 =========

Weighted-average remaining                                                      
contractual life of options                                                 
outstanding at                                                              
December 31, 1996                 3.2 years                                 
  ==========
-----------------------------                                                   
(a)          Exercise prices vary from $1.25 to $5.50 and expiration            
dates vary from January 1997 to September 2001.       
      Approximately 84% of the options outstanding at December 31,
   1996 had an exercise price between $4.50 and $5.50 with a
   weighted-average remaining contractual life of 3.6 years.

During the nine months ended December 31, 1996 and the                
years ended March 31, 1996 and 1995, the Company issued                         
warrants of 30,000, 10,000 and 35,000 with weighted-average                     
exercise prices of $0.05, $3.55 and $0.05, respectively.                        
During the nine months ended December 31, 1996 and the year                     
ended March 31, 1995, 10,000 warrants with a weighted-average                   
exercise price of $3.55 and 113,700 warrants with a                             
weighted-average exercise price of $2.50 were exercised,                        
respectively.  No warrants expired or were cancelled during                     
any of the three periods discussed.  At December 31, 1996                       
there were 240,000 warrants outstanding all of which are                        
issued to Rabobank at an exercise price of $0.05 per share                      
and expire December 31, 2000.  See Note 7 for further                           
discussion of these warrants.                                                   

RESTRICTED STOCK AWARD                                                          

Following the Sun World acquisition in 1996, the      
Company's Chief Executive Officer was awarded a stock bonus                     
of 125,000 shares of restricted common stock at no cost.                        
The issuance of these shares is dependent, with respect to                      
50,000 shares, upon the achievement of certain performance                      
criteria.  The remaining 75,000 shares are issuable in equal                    
annual installments over a three year period based upon the                     
continued employment of the officer.  Compensation expense,                     
representing the market value at the date of grant, will be                     
recognized as earned over the period of service.                                

NOTE 12 - COMMITMENTS AND CONTINGENCIES                                         
---------------------------------------                                         
In 1995, Sun World entered into an agreement with its 
major corrugated container supplier in connection with a                        
prepetition liability settlement.  The settlement stipulated                    
that the original agreement to purchase containers from the                     
supplier would remain in effect until March 21, 1998 and                        
required the Company to issue a secured note payable to the                     
supplier (see Note 7).  Thereafter, the original agreement                      
will automatically renew unless either party gives written                      
notice ninety days prior to the end of the renewal period.                      

In December 1995, the Company filed an action relative              
to the proposed construction and operation of a landfill to                     
be located adjacent to the Company's Cadiz property (the                        
"Rail-Cycle Project"), with the Superior Court in San                           
Bernardino County, California.  The action challenges the                       
various decisions by the County of San Bernardino relative                      
to the Rail-Cycle Project.  Named in this action, in                            
addition to the County of San Bernardino, were the Board of                     
Supervisors of the County of San Bernardino, three                              
individual members of the Board of Supervisors, an employee                     
of the County and Rail-Cycle, L.P. whose general partner is                     
controlled by WMX Technologies, Inc. (formerly Waste                            
Management, Inc.).  The Company alleges that the actions of                     
the County of San Bernardino did not comply with the                            
guidelines prescribed by the California Environmental                           
Quality Act and violated state planning and zoning laws.                        
The action seeks to set aside the county certification of                       
the EIR/EIS and approval of the proposed Rail-Cycle project.                    
The Company continues to believe the proposed Rail-Cycle                        
project, if constructed and operated as currently designed,                     
poses environmental risks both to the Company's agricultural                    
operations at Cadiz and to the groundwater basin underlying                     
the Cadiz property.  Accordingly, the Company intends to                        
pursue a claim for damages against the County of San                            
Bernardino and Rail-Cycle and, therefore, the action also                       
seeks compensatory damages in excess of $75 million.  The                       
action is currently in the discovery phase.   The court has                     
set July 11, 1997 to commence a hearing on the Company's                        
land use and regulatory claims.  A trial on the issue of the                    
Company's monetary damages will be scheduled at a later                         
date. The Company intends to continue vigorously prosecuting                    
its claims.  The Company incurred $394,000 and $1,919,000                       
during the nine months ended December 31, 1996 and the year                     
ended March 31, 1996, respectively, in connection with this                     
matter.                                                                         

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

The Company is involved in other legal and            
administrative proceedings and claims.  In the opinion of                       
management, the ultimate outcome of each proceeding or all                      
such proceedings combined will not have a material adverse                      
impact on the Company's financial statements.                                   

* * *                 

SCHEDULE I - CONDENSED FINANCIAL INFORMATION of REGISTRANT                      

Consolidated Balance Sheet                                                      
December 31, 1996                                                               
($ in thousands)                                                                
Assets      
------      
Current assets:                                                               
Cash and cash equivalents                $    2,132               
Accounts receivable, net                         31               
Inventories                                       7               
Due from subsidiary                             332               
Prepaid expenses and other                      274               
                          ----------
Total current assets                          2,776               

Investment in subsidiary                            42,460                      
Property, plant and equipment, net                  11,241                      
Land held for development                           12,671                      
Water rights and transfer and                                                   
storage projects                                   2,683                    
Other assets                                           150                      
Excess purchase price over net                                                  
assets acquired, net                               4,981                    
                          ----------
                          $   76,962
                          ==========

Liabilities, Redeemable Preferred Stock, Preferred Stock,                   
Common Stock & Other Stockholders' Equity                 
--------------------------------------------------------                  

Current liabilities:                                                            
Accounts payable                          $    1,332                
Accrued liabilities                            1,513                
Deferred revenue                                 375                
Long-term debt, current portion                  518                
                          ----------
Total current liabilities                      3,738                

Long-term debt                                      17,992                      

Other Liabilities                                       60                      

Commitments and contingencies                                                   

Series A redeemable preferred stock -                                           
$.01 par value; ($1,000 liquidation value);                                 
60,000 shares authorized;                                                   
27,431 shares issued and outstanding at                                     
December 31, 1996                                 27,431                    

Preferred stock - $.01 par value;                                               
40,000 shares authorized,                                                   
340 shares issued and outstanding at                                        
December 31, 1996                                      -                    

Common stock - $.01 par value; 45,000,000                                       
shares authorized; shares issued and                                        
outstanding - 23,445,868 at                                                 
December 31, 1996 and 19,247,611 at                                         
March 31, 1996                                       234                    

Additional paid-in capital                          88,574                      

Accumulated deficit                                (61,067)                     
                              --------
                          $   76,962
                            ==========

See accompanying notes to the consolidated financial statements.                

SCHEDULE I - CONDENSED FINANCIAL INFORMATION of REGRISTRANT (Continued)         

Consolidated Statement of Cash Flows                                            
($ in thousands)                                                                

                         For the Nine Months
                         Ended
                         December 31, 1996
                         -------------------
Cash flows from operating activities:                                           
Net loss                              $  (5,174)              
Adjustments to reconcile net                                  
loss to cash used for                                     
operating activities:                                     
Depreciation and amortization         1,388           
Interest capitalized to debt            481           
Changes in operating assets                           
and liabilities:                                  
Decrease in accounts receivable         411           
Decrease in inventories                 259           
Increase in due from subsidiary        (923)          
Increase in prepaid expenses and other (317)          
Decrease in accounts payable           (441)          
Increase in accrued liabilities         219           
Increase in deferred revenue            375           
                         ---------
Net cash used for operating                             
activities                          (3,722)         
                         ---------
Cash flows from investing activities:                                           
Additions to property, plant                                  
and equipment                              (27)             
Land purchase and development              (490)              
Water transfer and storage projects        (187)              
Acquisition of Sun World                (36,587)              
                        --------
Net cash used for investing                             
activities                         (37,291)         
                        --------
Cash flows from financing activities:                                           
Net proceeds from issuance of stock      37,761               
Proceeds from short-term debt               347               
Principal payments on short-term debt       (17)              
Dividends paid on conversion of                               
preferred stock                           (99)            
                        --------
Net cash provided by                                    
financing activities                37,992          

Net decrease in cash and cash equivalents         (3,021)                       

Cash and cash equivalents, beginning of period     5,153                        
                        --------
Cash and cash equivalents, end of period       $   2,132                        
                       =========

See accompanying notes to the consolidated financial statements.                

SCHEDULE I - CONDENSED FINANCIAL INFORMATION of REGISTRANT (Continued)          

Consolidated Statement of Operations                                            
(In thousands except per share data)                                            

                 For the Nine Months
                 Ended
                 December 31, 1996
                 -----------------
Revenues                                       $  1,278                         
                      --------
Costs and expenses:                                                             
Cost of sales                                  1,329                      
Resource development                           1,133                      
Landfill prevention activities                   394                      
General and administrative                     2,073                      
Depreciation                                     598                      
Amortization                                     175                      
                      --------
Total costs and expenses                       5,702                      
                      --------
Operating loss                                   (4,424)                        
Interest expense, net                             1,391                         
                      --------
Net loss before income taxes                     (5,815)                        

Income tax benefit                                  641                         
                      --------
Net Loss                                         (5,174)                        

Less: Preferred stock dividends                    (674)                        

Imputed dividend on preferred stock        (2,451)                  
                       ---------

Net loss applicable to common stock           $  (8,299)                        
                     =========
Net loss per common share                     $    (.41)                        
                     =========
Weighted average shares outstanding              20,500                         
                     =========

See accompanying notes to the consolidated financial statements.                

SCHEDULE II - VALUATION & QUALIFYING ACCOUNTS                                   

For the nine ended December 31, 1996 and the years ended                        
March 31, 1996 and 1995                                                       
($ in thousands)                                                                

                             Additions
            Balance   Charge   -----------------
                       at        to      Charge            Balance
                Beginning    Costs      to                at
                       of        and      Other    Deduc-   End of
                    Period     Expenses  Accounts  tions    Period
                   -----------  --------  --------  -----   --------
Nine months ended                                                               
December 31, 1996                                                           

Allowance for                                                             
doubtful accounts        $   -0-   $  107   $  373   $  -0-   $   480   

Amortization of excess                                                    
of purchase price over                                                  
net assets acquired        1,851      175      -0-      -0-     2,026   
                     --------   ------   ------    ------   ------
                     $  1,851   $  282   $  373   $  -0-   $ 2,506
                     ========   ======   ======   ======   =======
Fiscal year ended                                                               
March 31, 1996                                                              

Allowance for                                                               
doubtful accounts       $     -0-   $  -0-   $  -0-   $  -0-   $   -0-    

Amortization of excess                                                      
of purchase price over                                                    
net assets acquired        1,617       234      -0-      -0-     1,851    
                    --------    -------  ------    ------   ------
                    $  1,617   $   234   $  -0-    $ -0-   $ 1,851
                    ========   =======   ======    ======  =======

Fiscal year ended                                                               
March 31, 1995                                                              

Allowance for                                                               
doubtful accounts      $    -0-   $   -0-   $   -0-   $  -0-   $   -0-    

Amortization of excess                                                      
of purchase price over                                                    
net assets acquired       1,383       234       -0-       -0-     1,617   
                    --------   -------   -------   -------   -------
                    $  1,383   $   234   $   -0-   $   -0-   $ 1,617
                    ========   =======   =======   =======   =======

CONSENT OF INDEPENDENT ACCOUNTANTS                    

We hereby consent to the incorporation by reference in the                      
Registration Statement on Form S-8 (Nos. 33-73936, 33-83360,                    
33-63065 and 33-63667) of Cadiz Land Company, Inc. of our                       
report dated March 7, 1997, except for Note 7, which is as of                   
March 31, 1997, appearing on page 35 of this Form 10-K.                         

/s/ Price Waterhouse LLP                                                        
-------------------------                                                       
Price Waterhouse LLP                                                            

Los Angeles, California                                                         
April 11, 1997                                                                  

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