2025 Limoneira Annual Meeting

okay I think this is it let's get started I'm gonna dispense with the pleasantries and get straight to the formalities we have two meetings within a meeting and I think for those of you who've done this before you understand the first is literally a script which I'm going to read we're gonna get through this part of it and then we'll open it up to a what I hope would be a very informative second meeting after the close of the the formal meeting so So to begin with, I'm Scott Slater, I have the privilege of being the current chairperson, and from this point on, it's a straight up script. So Amy Fukutomi, our Vice President of Compliance and Corporate Secretary, will serve as secretary of the meeting and record the proceedings. She will now certify that the notice of the meeting was properly given, that the related proxies were in proper form and the number of stockholders present in person and represented by proxy.

Thank you, Scott. Bear with me. I've got some long numbers to read. So Mr. Chairman, I will certify that proper notice of this meeting was given by mailing in conformity with Article 2, Section 2.2 of the Bylaws of Lehman Air Company. I have also examined the proxies and will certify they are in proper form to confer with the requisite authority upon the holder thereof there are present in person and represented by proxy stockholders of the company holding 14 million seven hundred and seventy two thousand seven hundred and twelve point five seven shares of voting stock out of eighteen million two hundred and two thousand three hundred and sixty nine outstanding shares of voting stock which also includes shares of our B series convertible preferred stock and ninety 300 shares of our series B2 convertible stock. So this represents a majority of the total shares outstanding and entitled to vote. We have a quorum of 81.16%.

Thank you, Amy. Audrey Matheny of ComputerShare has been appointed to serve as the inspector of election for this meeting. Is there any person present holding a proxy that has not yet submitted it to vote? please raise your hand. The inspector will pick up the proxies at this time. Anyone? Seeing none, Ms. Fukutomi, secretary of the meeting, has advised us that a quorum is present at the meeting, so I declare the meeting duly and lawfully convened. The meeting is now open and ready for business. Before us we have proposal one, election of directors. Proposal number one is the election of three class two directors of Lehman Air Company. The three directors who are elected today and the remaining four directors whose terms will expire at the 2026 and 2027 annual meetings of the stockholders will be the directors of Lehman Air Company until their successors have been duly elected and qualified. Barbara Carboni, Gordon Kimball, and myself, Scott Slater, have been nominated for re-election as class two directors each to serve for a three-year term or until their successors have been elected and qualified the board of directors of the company recommends that the stockholders vote for each of miss carboni mr kimball and mr slater is there a motion thank you name is there a second Bob Weiss I think that turn since we have a motion in the second we'll turn to Greg ham they're good okay proposal number two is a proposal to approve on an advisory basis the compensation of our named executive officers which we refer to as quote say on pay unquote the board of directors of the company recommends that the stockholders vote for this proposal is there a motion thank you we have a motion made by Edgar Terry do I have a second anyone I have Betsy chess making the second the motion has been made and duly seconded we now have proposal 3 advisory vote vote on the frequency of say on pay votes proposal 3 is a proposal to ratify the appointment of Deloitte and Touche LLP to serve as the independent registered public accounting firm for the company for the fiscal year ending October 31 2025 the board of directors the company recommends that the stockholders vote for this proposal do I have a motion Kelly Lindell makes the motion do I have a second mr. Weiss will second thank you this motion has been made and seconded So, having presented all matters to be voted on by the stockholders, I declare the polls now open for voting for the proposals. The votes on these proposals will be conducted by written ballot. It is important that all votes be cast. Ballots for stockholders who have yet to vote and wish to vote by ballot were provided at check-in. If you didn't receive a ballot at check-in and wish for one to be provided, please raise your hand. However, it is not necessary for you to vote by ballot if you have previously returned a proxy card or voted online or by phone, unless you wish to change your vote. Has every stockholder present who wishes to vote delivered an executed ballot or proxy to the inspector? If not, please signify by raising your hand. Seeing no one. The ballot is now complete. I declare that the polls are now closed. I would again like to express my sincere appreciation to the stockholders who were present at this meeting as well as those who submitted their proxies but were unable to attend in person. There will now be a short pause in the meeting while the inspector tabulates the votes.

Good morning. I've examined the ballots and the proxies voted with respect to the proposals being voted upon, and I find that Ms. Carboni received 11,015,813.57 votes for election as Class II Director. Mr. Kimball received 10,309,858.57 votes for election as Class II Director. Mr. Slater received 9,918,999.57 votes for election as Class II Director. No other candidates for election as class 2 director received any votes. 59.35% of the shares of common stock and preferred stock of the company voting together as a single class present in person or represented by proxy voted in favor of proposal number 99.79% of the shares of common stock and preferred stock of the company voting together as a single class present in person or represented by proxy voted in favor of proposal number three.

Thank you. I am pleased to announce that Miss Carboni, Mr. Kimball, and Mr. Slater have each received a plurality of the votes cast. Accordingly, Miss Carboni, Mr. Kimball, and Mr. Slater have been duly elected as class two directors each to serve a three-year term or until their successor has been elected and qualified since the number of votes in favor of approval of proposals 2 and 3 represent a majority of shares present in person or represented by proxy and entitled to vote voting together as a single class I am pleased to announce that proposal numbers 2 and 3 have been approved this results in a journal adjournment of the formal portion of the meeting and concludes the formal matters to be acted upon at this annual meeting since there is no further business to come before the meeting it would be in order to adjourn the meeting do I have a motion miss Fukutomi makes the motion do I have a second and who is that Phil it has been moved and seconded that the meeting meeting adjourned. All in favor, say aye. All opposed, say nay. The motion is carried and the meeting is adjourned. Thank you. Okay, so let me begin with a welcome to all of you for taking the time and coming today. I have the good fortune and honor to serve as the chairman of the board of directors and for a company that i'm frequently reminded was founded in 1893. i mean how many things that were started in 1893 are still up and operating and had gone through so many changes which is it's great to be a part of it's great to understand the legacy I'm joined today by our board of directors and I'd so I'd like to start with Harold if you'd please stand Harold Edwards Peter Nolan Edgar Terry Gordon Kimball a great and pleasure to be a part of a strong and functioning board also with us today we have former director board member Betsy Chess and it's the only one I see I would also so I lost a bet also I do want to acknowledge the the passing of our former board member John Blanchard who passed in 2024 I had the great pleasure to serve with John while I was on the board and it was a very sad day for us all to to lose him last year so which brings me to the job of framing our discussion for today I'm going to be followed by a series of speakers some some video presentations but I'd like to begin with a an acknowledgement and with with some pride that given that the company has been around since 1893 we as a board took up a challenge to do some self-assessment to be open to new information new opportunities and to allow ourselves to continue to evolve in an effort to be better in the best interests of our shareholders the process that began in 2023 was continued through 2024 and until very recently on march 17th which we announced a conclusion to that process along the way we hired an investment banking firm to work with us to evaluate strategic options mergers, acquisitions, buys, the full suite of anything that a company would do when it was trying to be better and to have an open mind about how exactly to do that. We received a substantial amount of interest in various elements and functions that Lehman era undertakes and provides. Management was tasked by the board to work with our investment bankers to flesh out opportunities, possibilities, again scored against the touchstone of what is in the best interest of the shareholders, not compelled to make a deal or to pursue a specific transaction, but to vet them and to attempt to understand whether they were in comparison to what we might otherwise do were in the best interest of our shareholders in that process we learned about ourselves what our strengths and weaknesses were what others thought of us which was important data important important information, which enabled the management and the board to react to that. And through that process, although we have announced a conclusion to the process, we've done so with the notion that there are strategic value directions, directives that we can pursue that will enhance value to the shareholders, improve the company, and make us better as we move forward and for Lehman era the future is now and for a variety of reasons which carry on the momentum that was started at the last board meeting when we discussed the the implementation of the strategic plan and one of the strategic drivers that we see and have committed to is of course avocados somebody who's very familiar with the avocado business listen to what our plan was to plant more avocados to be to get acquire more land and put them in avocados said you would be stupid not to do that and and we agreed and we have made exert we exerted ourselves to try to carry out the vision of planting suitable acreage in avocados and in this last year we had the most the single most productive year in our history on delivering on avocado production and so we're very excited about that but we're not done that process continues and as has as harold and other presenters will underscore we expect to continue that in 2025 and beyond secondly an underappreciated but very important to companies that are in the business of farming is our water assets and we have through intention and best practices been able to generate conserved water as we become more efficient in our farming practices as we require less water to meet our land use needs in transition we are generating conserved water, and that conserved water can lead to transactions which benefit the local community. As we move forward in 2025, we expect to engage in local, local, emphasize local, water transfers where our conserved water can move from an existing use to another beneficial use and create monetization important opportunities for us and returns, and we would expect that as we have continued or as we continued our strong stewardship practices for land and water, we'll have the opportunity to move more of that conserved water for the benefit of our shareholders and the community. The third strategic driver that we think is maybe obvious to everybody, but it has become one of those things that is voices louder in the community have acknowledged the housing crisis that we have in this country, in the state of California, and more specifically, locally. It has been evaluated and brought home to us not only by the conversations in the coffeehouses and community meetings of various types, but when an economist identifies Ventura County as having the worst housing shortage in the United States, not the county, not the state, I mean the country we have to we have to pay attention to that and Lehman era whose values, stewardships, ethics have led it to do things like the harvest development because the community of Santa Paula wanted it and needed it now leads us to try to determine whether Lehman era can play its part in helping the county solve this problem we think we have the land and the water and a historical commitment to sustainability that will enable us to move cooperatively with local government and the people in this community to consider and seek approval of land use entitlements on Lehman era property as Harold and other speakers today will describe and I think we are committed at a board level to listen to our community listen to the stakeholders and do this the right way in a manner that Lehman era has shown that it can do so with that I think this is a very nice segue for me to conclude my remarks and I think we have a video queued up and then we'll have Harold and other presenters follow at the conclusion of which we'll all stand and answer any questions that you may have but again I appreciate your being here and your belief in ownership in our company. Thank you.

Good morning, my name is Matthew Feenup. I'm the Executive Director of the Center for Economic Research and Forecasting at California Lutheran University and I'm here to discuss the economic outlook for Ventura County and to take a real deep dive into data that tells a very revealing picture about the state of the economy and where we're headed. I want to thank the Lehmanera Company and Harold Edwards for inviting me here to address the annual shareholder meeting and really just want to take a moment and just thank Lee Monera for being such an important element of the fabric of this community and a source of resilience for the broader economy. The Center for Economic Research and Forecasting is a nationally recognized forecast center that's been at California Lutheran University for 17 years. Whatever the consensus is usually saying, we're usually well outside of the consensus. And the reality is that for years and years the consensus has been getting it wrong. Our two-year-ahead forecast of U.S. home prices for 2024 was the single most accurate among a hundred largest forecasting houses in the United States. Ventura County finds itself amidst a long period of economic weakness. It's not just that the economy is weak now, we expect that weakness to persist. Ventura County's population peaked in 2016 and has declined in every single year since then. The county's labor force peaked four years earlier in 2012. Total economic activity in Ventura County peaked, shockingly, in 2007. Real GDP has declined in nine of the past 16 years in Ventura County. When we look at neighboring counties like LA County, Orange County, Riverside, San Diego, the story's a very different one. Since 2007, the LA County economy has grown by a total of 20%. The Inland Empire, Orange County, San Diego County, have each grown more than 30%. Policy matters, and there is policy driving the economic weakness in Ventura County. Since 2007, total economic activity in health sciences are down $20 billion. Economic activity in agriculture over the last four years has declined nearly 40%, from $2.5 billion to just a little over $1.5 billion. Jobs data provides further evidence of the economic weakness in Ventura County. There's a net gain in total jobs every single year with the exception of the COVID-19 pandemic. The yellow line in this graph refers to the jobs in the three highest paying sectors. These are jobs that have an average salary of about $125,000 per year. Jobs in these highest paying sectors are in sustained decline since 2007. Education and health services has seen a net increase of 22,000 jobs total over that period. What's amazing is that if we look outside, every other sector together has lost jobs, but we've seen large gains in this one sector. And education and health care has an average salary of just $57,000. How can you have net job gains while the labor force is shrinking? Well, when we're producing in jobs in low-paying sectors like education and health care, there's simply no way for the person taking that job to afford the cost of living in this county and that means each of these net job gains often means one additional person entering the county on the 118 the 126 or the 101 freeway what's amazing is that in the face of that declining population declining labor force declines in total economic activity real wage losses we still see extraordinary growth in home prices. The average across all 12 months of 2024 was $924,000. What we did here is we modeled this after an article that was done in the Wall Street Journal. What they did is starting in 2012, they found homes that sold three different times between 2012 and 2024. And they tried to feature the demographic characteristics of the individuals that bought the home at each point in time. And it turns out across the United States in 2012, it only required a household income of about $50,000 to buy the median home. Over time, it took a wealthier and wealthier individual to buy the same home. We did the same calculation for Ventura County, and the results are really striking. Back in 2012, it only took a household income of $125,000 a year in order to afford the median home in Ventura County. And what we've seen is simply extraordinary price growth, such that now to buy the median home in Ventura County, you have to have a household income of $360,000 a year. That's to say you need two wage earners in the single highest paying sector to buy the median home. If you're a household with two people in public service like a firefighter and a police officer, it means there's just no chance that they can afford to live in the community that they're serving. We're currently the second least affordable major metropolitan area in the entire United States. And when we look at the bottom three, metro Los Angeles, Ventura County, and then metropolitan San Diego, those three are much much less affordable than the fourth most unaffordable metro. Now what sets us apart from those other two, we're in a state of prolonged economic decline. Ventura County's home prices cannot be explained by demand. Incomes are not rising such that demand for housing has increased. Prior to the Great Recession, Ventura County was producing between 2,500 and 3,500 residential units per year. There was a dramatic decline during the financial crisis and then we simply never recovered. Since 2007 we've produced some multifamily housing but we produced almost no single-family housing of any kind. That upward socioeconomic mobility often means leaving the county for somewhere else. That's why we see a decline of $20 billion in economic activity in enterprise management. That's why we see a decline of 26,000 people in the population. Ventura County land use policies are singular among all counties in the United States, as is our economic outcomes. Ventura County's SOAR initiatives, Save Open Space and Agricultural Resources, is a series of ballot measures that coordinates land use across city and the county. Our growth boundaries and our growth restrictions have no consideration for future growth of any kind and any conversion of land to produce new developable land requires a vote of the entire county electorate. We are the only county in the United States that does zoning by ballot box. The purple lines are growth boundaries around each of the cities in Ventura County. Again, I'm a big supporter of urban growth boundaries in their ability to preserve the unique identity of individual cities, and also to strike a balance between development and environmental resources, development and agriculture. But again, what Ventura County did is totally singular. This is looking down Pleasant Valley Road in the city of Camarillo. On the right-hand side, we have a fairly new development from the early 2000s. That land on the right-hand side in this frame, minus improvements, has an average land value of about $2.5 million per acre. Just across the street, there's land that's outside the urban growth boundary, the development right has been stripped from that property and you have an average land value of about $70,000 per acre. You will not find a rental gradient like that anywhere else in the United States. We wanted to step back in time and talk to the people who are here in the late 90s and early 2000s that were part of the SOAR movement. And so one of the people we interviewed is Bill Fulton.

He's a renowned land use planner and is one of the architects of ventura county's land use policies my wife and i were living in la we wanted to buy a house and start a family driving toward ventura was the only direction out of la that i liked as with so many people i think the combination of communities and open space and agriculture is attractive it's just a beautiful place i'm a land use planner by training In 2003, I ran for the city council in Ventura, primarily because I thought we needed to promote and encourage some of the ideas of smart growth that I've been promoting in my professional life. The 80s was really the time when slow growth ballot measures around the state became common. We began to see limits on the amount of development, the number of houses, things like that. We began to see ballot measures seeking not to restrict the numerical amount of growth, but rather the geographical expanse of growth and Ventura County is probably the only county in the country that has voter-created urban growth boundaries. There was in particular a major project proposed in SOMAS that would have been a very large subdivision of one-acre lots. Although the Ventura SOAR came first, the impetus for the countywide SOAR largely came out of that situation in Somis. And the other was the general response to sprawl and especially to the traffic that sprawl created. That led to a significant political response where people in almost every city realized, oh, I like my community and I want to keep that. We don't want to become Orange County. It was never positive. It was all negative. We moved here because it's not the valley. I'll never forget a letter to the editor in the Star one day in the middle of the SOAR debate where the letter writer was furious about the possibility of higher density infill development. And this is a direct quote because I'll never forget it. The letter writer said, the purpose of SOAR is not to generate high density development. The purpose of SOAR is to rid the county of excess people. And I always wondered which people he thought were excess. I think originally the SOAR advocates weren't looking 30 or 50 years ahead. They were looking 10 or 20 years ahead and saying these boundaries will be fine for now. So one of the problems with ballot box zoning or putting land use measures on the ballot is that it's a yes or no. The voters vote for SOAR or they vote against it. Land use doesn't work that way. Land use is subtle, it's nuanced. It requires a lot of trade-offs and compromises. I think we have to stop thinking about land use separately from economic development. One of the interesting sidelights, I think, that doesn't often get talked about is that the SOAR boundaries, especially in some cities, limited the amount of land available for industrial, for warehouse, and for factories. Ventura still struggles today with companies. A lot of people want to be in Ventura. It's viewed as an attractive community, a lot of business owners. If you start a business in Ventura, particularly an industrial business, it's almost impossible to scale it up. We can make headway on the housing problem by increasing densities. We can't solve the factory problem without expanding the boundaries in at least some cities. The difficulty in trying to create an income ladder in Ventura County comes from where is the space inside the boundaries for the jobs that need to be created. We think about tourism and we think about agriculture and we don't think about the upward ladder of mobility and the skilled jobs that are going to create that prosperity. We need to figure out how to create more prosperity and how to make sure that everybody in the county shares in that prosperity.

One of the things Bill did was talk about practical solutions. We could trade amenities like parks and outdoor recreation sites for expansions of growth boundaries. We could trade permanent preservation of the most valuable environmental assets in Ventura County for expansion of growth boundaries. Montgomery County in Maryland does this very, very effectively. What they actually do is they identify the most valuable agricultural resources and the most valuable environmental resources, and they actually say in order to expand urban areas, you must pay the landowners to retire their development rights in those areas. This is a map of Ventura County, and you see the red land here is very, very valuable land along the Santa Clara River watershed. In fact, the Nature Conservancy is actively buying up ranches to permanently preserve this riparian habitat. We could actually set up a system that would allow expansion of a growth boundary like Camarillo's along Pleasant Valley Road in exchange for permanent preservation of riparian habitat along the Santa Clara River. Bill also discussed the Oregon model requiring every single city in the state of Oregon to impose an urban growth boundary. Now what's different about the Oregon model is that it imposes growth boundaries but then it requires local planners and city council members to actually forecast future growth to evaluate and update growth boundaries and move them every 10 years. The growth boundaries in Oregon are not about whether we grow, they're about where we grow. They're about thoughtfully, sequentially growing out from city centers. The question is, what do we do with all this? We need change in order to secure a brighter future for Ventura County residents.

My name is Matt Levere. I am a native son. I'm actually a second generation Ventura County resident, currently raising my two young daughters here. So my family has deep roots in this community. I think the things that I love most about Ventura County are obviously the natural beauty it's an incredibly beautiful place to live but it's also the people it's a special community and having been born and raised here it's a community i always knew i wanted to come back to i graduated from our local schools i ended up going to college at pepperdine university i graduated in 2000 always wanting to come back to ventura county at that point in my life there There was no opportunities for people like myself, no jobs, and no housing. And so that led me on a journey to Washington, D.C., eventually law school, and getting my law degree, which was kind of my golden ticket back home. I had my first daughter in 2013, and I think anybody who has that first child recognizes how it kind of recalibrates your worldview, and you start thinking about a lot of things up besides just yourself. In those 13 years since I tried to come back and not much had changed. There was still so little opportunity for young people in Ventura County and that's what led me into politics initially was was trying to be a new voice at the elected level thinking about our community 20 years down the line and what we were doing to make sure that there were housing opportunities, workforce opportunities for my daughter and everybody else's daughters, sons and grandchildren. A real challenge of Ventura County, and it's a real concern of mine, is that we're becoming more and more a community of haves and have-nots. I think the obvious challenge is housing. Ever since I've been in elected office, you know, I've had so many conversations with CEOs, with business leaders, and I've heard over and over again the challenges of growing their companies, the challenges of hiring. I don't believe we have lived up to the intentions and the goals of SOAR. I see quite frankly a lot of hypocrisy from people who say they're pro SOAR but they still fight these developments and that's it's frustrating to me. There's this general theme that you hear from some people in the community that they just don't want anything to change. It's the status quo and I'm very clear in talking with these people that the status quo is not an option. If we're going to be an economically viable and economically prosperous community we have to move forward. Nobody wants Ventura County to become the San Fernando Valley. Nobody wants a Ventura County which is completely paved over. But we also in the same sense have to understand that no growth is not an option. Here's how I would define the county economy today, is that I see the potential. And I think that if we start focusing on several of the challenges, the sky's the limit. If there is one challenge I would give to all of the attendees at the event today is we all have a role to play in terms of solving the county's housing crisis. We all have to get engaged. For too long there's been, in my view, a vocal minority controlling the discussion about smart growth in Ventura County. But for all of those who want Ventura County to be economically viable, economically prosperous moving forward, for all of us who want a Ventura County where our kids and our grandkids can thrive, it starts today by getting involved at the local level, attending your City Council meetings, attending the Board of Supervisors meetings, speaking up for the importance of housing. So in 20-30 years when our kids and our grandkids are hoping to come back to Ventura County just like I did, they have those opportunities which so many people in my generation didn't have.

Our call to action to you as shareholders, to every resident of Ventura County is to get engaged, use your voice to speak to the importance of housing, and then let's work together on common sense changes to policy common sense solutions that will ensure a brighter economic future for the region.

Good morning my name is Harold Edwards I'm the CEO of the Lehman Air Company and it is my privilege to be standing before you at our annual meeting. I'd like to walk you through some slides that will frame some of the items that Scott referred to in his introductory remarks but also will hopefully allow you to see some of the renewed focus that the Lehmanera company has today. I think we're how I would describe where the Lehmanera company is today is we're a company that has and is in the process of transforming itself to create the the best opportunities for our stakeholders and our shareholders and we're in the middle innings of unlocking our premium value. Limonair is unlocking significant shareholder value through its transformative land use conversion and water monetization while growing avocado and citrus returns. We've really narrowed our focus down into three key strategic value drivers for the The first is to realize our premium asset value by monetizing our land and water portfolio through strategic development and entitlements. The second, as Scott mentioned, and we're really excited about this one, is to accelerate our California avocado leadership, scaling our position as the country's largest avocado grower. And finally, it's to expand our citrus operations by growing integrated services across growing, packing, marketing, and distribution to drive higher margins for our company and for our shareholders. Let's take inventory on what we have today. Today, we have 10,500 acres of agricultural land, of which 5,300 acres are bearing acres that we farm. of that we have 1,200 acres of maturing avocados today Scott mentioned our water rights today we have over 21,000 acre feet of water rights in the form of owned water rights usage rights pumping rights and strategic California and Arizona locations finally also we have a development portfolio that includes 550 entitled acres. We have 3,000 acres that are potentially developable acres. Today we have a master plan community called the Harvest at Limonera of which we anticipate receiving a hundred and sixty five million dollars of distributable cash coming back to our company in the next six years of which 10 came back yesterday so that's now a hundred and fifty five million dollars and so here's also what we have today we have 50 million dollars of assets that we identified as being non-core to the company and are actively working to monetize and sell those assets we'll get into those in just a minute but we also have 1.3 million dollars of annual revenue from a three-year following program in Yuma, Arizona, with additional opportunities to monetize our water there at significantly higher values for years to come. I mentioned the $165 million that will come back from harvest at Limonera, which is now $155 million because we received $10 million from that distribution yesterday. and just this last year we began to see some of the benefits of monetizing some of our conserved water and we received benefits of 1.7 million dollars in the adjudicated Santa Paula Basin with additional monetization opportunities presenting themselves currently and finally we get to our number one value driver which we mentioned and we heard our call to action earlier, which is to explore land use conversion and entitlement opportunities of lands that might be eligible for future land use conversion from an agriculture use to an urban development use. Going back to the 50 million dollars of identified non-core assets, one of these assets is our vineyard in Paso Robles called Windfall Farms. Windfall Farms is a unique piece of property. It's 724 acres of land, 389 acres of planted vineyards, significant water rights, high quality contracts with high quality winemakers throughout California. But what also makes it very interesting is that it's got a certificated 76 acre 10 acre parcels as part of that property making subdivision not only possible but probable without any process it's ready to subdivide right now because it's already subdivided right now the wine industry is is challenged we're not drinking enough wine so I think we go home and leave this meeting and we'll do our part I'm not sure we can solve that problem single-handedly I know I'm trying but so selling a right now is going to be challenging however selling vineyard estates has a much better shot and chance of success and that's exactly how we're positioning this asset and we've just recently listed this asset with Sotheby's to sell for 33 million dollars most likely for subdivision and development but this will be a big driver of the identified 50 million dollars of monetization of our non-core assets. We're also divesting our South American production assets, specifically our Pandiazucar and San Pablo properties in La Serena, Chile. We're very excited to be very, very close to announcing the successful sale of those ranches. And our good friends David Key and Scott Welcher here today and is it going to get done? It's going to get done. Okay. One of the things that I wanted to point out is one thing that's a little bit deceiving on this is that there's 3,300 acres that these properties are comprised of, but really just a hair over 200 acres are planted. So it's not as big as it seems. However, it is valuable and will bring valuable capital back to the company for deployment in other ways we're also working to monetize our investment in Argentina in our property in Jujuy Argentina and are optimistic that we'll be able to do that in the near term as well the combination of the monetization of those three assets should drive 50 million dollars of cash back to the company now let's look at our second key value driver strategic value driver and that's our acceleration of our California avocado leadership currently we're expanding our plantings by a hundred and fifty percent with a goal of arriving at 2,000 acres of planted avocados all here in Ventura County we expect that upon those assets and that acreage being full bearing that will produce somewhere upwards of 30 million pounds of annual avocado production which we are forecasting will generate somewhere in the neighborhood of 45 million dollars of revenue and somewhere around 34 million dollars of operating profit we're also focused on our third key strategic value driver which is to expand our one world of citrus with our three-pronged approach which includes being a lemon grower with full integration targeting 1,000 acres of lemon production over the next four to five years, being a lemon packer packing marketing and selling services for our own acreage but also for our grower partners, and finally being a citrus marketer and seller providing packing marketing and selling services for other citrus suppliers. This chart is what it's all about and what we're really excited about which if you consider our baseline of EBITDA or roughly the amount of cash flow that our company creates today at about 15 million dollars which by the way is our consensus from our analysts for this fiscal year that will increase our EBITDA from our lemon operations by four million dollars our operating profits from citrus agency growth representing other suppliers by three million dollars, our extremely exciting announcement and growth of our organic recycling business, which Mark will talk about momentarily, and finally you see the largest driver of our future growth, which will be in avocado production, but with a very clear trajectory to get us to 50 million dollars of annual EBITDA by 2030. This doesn't include benefits coming from our farm management services, any water monetization, or any of the rental operations that we have, which will only add additional benefits for our company. Let me get into our number one strategic value driver, which is our asset monetization. One of the issues that we have with our company and our assets is that we're really old. And one of the pieces of being really old is by having assets that are really very old. Typically they come with very low basis in which we first acquired these assets for and if you think about it you go all the way back to 1893 or in our family's case 1880 you can imagine just how low those basis bases were. In fact I still have the original deeds from Orchard Farm, half of that land for $15 an acre and the other half for $5 an acre. They've appreciated significantly since 1880 but what that does is that creates a challenge to monetizing certain assets because of the massive tax bite that would be taken out as a result of monetizing against a low basis so we want to communicate that in the process of our asset monetization we're also doing it through a lens of what the most efficient way we can do that from a tax perspective and what we need to do to structure that appropriately the alpha in our story is future conversion of selected land today we've monetized or actually identified 180 million dollars of identified non-core assets of which in 2022 and 2023 we successfully monetize 130 million dollars worth and use that capital to retire our debt we also have identified as I've spoken about 50 million additional 50 million dollars worth of additional assets which we're working to monetize I mentioned that we have 550 acres of residential and commercial development which is our harvest at Lehman area master plan community development which is was forecast to generate 180 million dollars worth of worth of cash flow back to the company and at the time seven years and of that now we received 25 million dollars back as of yesterday and then if you go all the way back to the beginning of the partnership 45 million dollars when you include the 20 million dollar investment into our partnership with the Lewis group that leaves a hundred and fifty million dollars of benefit coming back to the company in the next five years we believe through the additional development of the harvest of the harvest project we also have the alpha in the entitlement of other properties and we'll show you some of the ones or the next one we believe which has the opportunity to potentially become entitled as it relates to our water we We have 12,000 acre feet of Class III Colorado river rights. As we mentioned earlier, as I mentioned earlier, $1.3 million is coming back to us today through a following program where we followed half of our production in Yuma. We also have a little over 9,000 acre feet of adjudicated annual pumping rights in the Santa Paula Basin. we received 1.3 million dollars from the Yuma following the next 25 year deal on the Colorado River is scheduled to be put in place beginning in 2027 and we believe that the values that they'll be discussing for the next 25 years will be considerably greater than what the following program is today so we'll keep you posted but that will be an exciting development as that plays out over the next year. We also mentioned that we monetized 1.7 million dollars worth of adjudicated pumping rights here in the Santa Paula Basin and we have additional conserved water monetization which we look forward to reporting in the very near term. Finally we have greater opportunities to monetize more water on the Colorado River, as well as more monetization opportunities in the Santa Paula Basin, which again we'll get to very shortly. So let me talk about the next chapter for a second, which I believe is our Limco Del Mar property. So the Limco Del Mar property is a limited partnership that was formed in 1959. In 1959 there was a snapshot taken of the ownership of the Lehman Air Company and overnight the owners of the Lehman Air Company became owners of the Limco Del Mar limited partnership and the Lehman Air Company became the general partner managing the agricultural operations as well as the strategic direction of the highest and best use of this asset today we own 29 percent of this company but we've recently tendered for the shares of this asset that we don't own for several reasons number one we believe that there is an opportunity for this to be entitled and developed but it's a pretty heavy lift it takes a long time it takes a lot of capital and it's risky and if we look at our success at harvest at limonera everybody congratulates me for fast-tracking it and it took 17 years to get that one done so I'm not sure I'm be giving you the report when we break ground if we do but anyways this is an amazing piece of property so just to show it to you so the the limco del mar property is a ranch that consists of 221 acres and it's zoned as agricultural land ventura county land in the center of ventura Today, the property is comprised of 138 to 136.8 acres of lemons, and 71.6 acres of avocados. And due to the age of the lemons and the current challenges that we're experiencing the oversupplied lemon markets today, this May will actually begin the conversion of 105 acres of lemons into avocados on the Limco Del Mar property the good news is that that sets this property up to be contributing significant benefits for the company once those avocados are mature the bad news is is it takes a while for avocados to mature so we'll be waiting for that for a while which which is part of the reason that we tendered for any of the unit holders that were interested in monetizing their investment because they're most likely won't be distributions from Limco Del Mar for the foreseeable future. Eventually there will be but for the next five years the focus will be on those avocados growing and getting the cash flows from that asset to develop. If you took a look at this piece of property though you'll see that it's it's an island in the middle it's basically the doughnut hole in the middle of the city of Ventura. It will be forced to go through a ballot box measure at some point in the entitlement run called the SOAR vote which is the acronym which you heard earlier called save open space and agricultural resources and it will either be a countywide vote of the citizens of Ventura County that will vote on the fate of this property or it will be on the citizens of this of the city of Ventura and that will play out over time based on what the community of ventura wants but also what the county of ventura wants in terms of the fate of that property the gatekeeper in this whole process is an agency called lafco which stands for the local agency formation commission of ventura county which is an independent commission that regulates the boundaries of cities and special districts lafco works to ensure that local governments provide effective public services like water sewer and parks now LAFCO has a stated goal of eliminating islands within urban boundaries and I'll show you this in a minute but you'll see that this pretty much is an island so if we go to space here's where we are and I'll drill down further and the red dots on this map are our current assets throughout Ventura County with the closest to the ocean being the Limco Del Mar property which sits about a mile from the beach and the ocean every inch of the property looking at ocean and islands here it is from a much lower view what's interesting if you drive on Foothill Road from Santa Paula to Ventura it's basically the agricultural property between Kimball Road and Victoria Avenue and then if you go down even further and you look at what it is today again it's it's lemons and avocados very productive we're pulling 105 acres of lemons out and planting a hundred and five acres of new avocados leaving 30 acres of lemons there but here's a view of it what it looks like in relationship to the entire city and here's the overlay of the actual city and you can see on all four sides there's the city of Ventura one of the other interesting things about this property is that the water that serves this this property comes from a an irrigation company that was founded in 1917 where a gravity flow ditch was dug conveying water from east of Santa Paula to this property that's a mile off the ocean. In the 20s they replaced the ditch with an underground pipe and this this company that Limonera is very an integral part of called the Farmers Irrigation Company is in the process now of pressurizing that line to bring greater water use again with the lens towards conservation and stewardship but greater abilities to bring water to each of our agricultural properties, including Limco Del Mar, and the Limco Del Mar entity is an owner of a significant amount of those water rights. If you were able to look at the property below Limco Del Mar, which extends from Telegraph Road down to the 126 freeway, it's a little bit of an eye chart, but if you look right down in the middle, right below the 126 freeway, you see an opening there. And when I first started here at Lehman Air in 2003 there was a bank account that had a million dollars of cash sitting in it that I couldn't I was excited because there's a million dollars what can we do with it and I was told I can't touch that and what that was was that was a million dollars of good-faith money and I don't know when it was put there but put in this account to demonstrate to the city of Ventura that it had the wherewithal to build the overpass over the 126 freeway to connect Foothill to Telegraph all the way to Johnson Drive which would take you directly to the 101 freeway and that's part of the city's vision which is another reason why we believe this project will be interesting for the city of Ventura. Turning now to the cash proceeds that we've generated from land monetization we've received again a hundred and thirty million dollars of which was comprised of an eight million dollar benefit we received from selling 50% of our commercial property in Harvest to our partner, the Lewis Group, $19 million from the sale of our Oxnard lemon packing facility, $2.6 million from the sale of our assets in Santa Maria, and then a transformational divestiture of 3,000 acres in the San Joaquin Valley for 98 million dollars totaling 128 million dollars of benefit we now have 50 million to go comprised of windfall and our southern hemisphere agricultural assets in total creating 180 million 180 million dollars of pipeline of cash coming back to the to the company here's a snapshot of and so this is this slide is really for everybody that lives in new york because they're like Santa Paula, where's that? So basically we sit wedged between two urban centers, Malibu and Santa Barbara, debatably some of the nicest real estate, absolutely the nicest weather on the planet, and you see where Limonera's assets are relative to these urban centers. If we take a look at our master plan community that is that is now in full swing, the Harvest at Limonera project was created through a partnership between the limonera company and the Lewis group that created the limonera loom limonera Lewis community builders LLC as we identified earlier we anticipate 180 million dollars from coming back to the company from this project of which we've we've now received 25 plus 20 plus 20 so 45 million dollars it's comprised of an entitlement to build 2050 homes of which now there's been 1261 closings to date our phase one has completely sold out of 707 units we were very successful and pleased with the sale of the entire second phase of the prop of the property called the foothill foothill neighborhood of 554 units to Lennar last year for 90 93 million dollars that leaves us with phase three which will be comprised of 550 additional units and 300 apartments and mark will get into the the development of these project these properties in these apartments which would be another extremely valuable part of the company's development we were very pleased to attracted the interest and the investment from four primary home builders, Lennar, KB Home, K-Hobnanian, and Richmond American. I won't get into this one because Mark will cover it, but these are the anticipated cash flows that that total 180 million dollars, and if you look at the 2025 estimate of eight million dollars, it's actually ten million dollars based on what we received yesterday. The East Area 1 and 2 properties were entitled after winning a soar boat in 2008 and then getting through LAFCO, forming our partnership with the Lewis Group and then breaking ground in 2017. And one thing to mention in the East Area 1 harvest at Lee Manera residential property, part of the development agreement that we put together with the city of Santa Paula included our contribution of 38 acres given to the city with 15 million dollars to improve it to build a sports park for the benefit of the community any of you that are around on May 3rd it'll be an exciting day we're going to cut the ribbon and hand the assets over to the city it increased the amount of park space in the city by four times and And having grown up in the city, I just want to tell you, there aren't any fields that are nicer than this in Santa Paula today. So this is a really exciting thing for me. And then also then, across the highway is the Harvest Medical Pavilion. And in 2021, we were very pleased to have entered into a partnership, and we have a letter of intent with Pacific Coast Investment Incorporated that will include selling land for the benefit of a new Santa Paula Hospital and an outpatient medical clinic and we're excited to feel that we're very close to being able to announce that sale. Upon making that announcement we'll be excited to also make other announcements that will include bringing a quick serve restaurant to Santa Paula In-N-Out Burger. I think that's probably the most exciting thing we've got going on a hotel more apartments and the potential of assisted living skilled nursing and then another apartment project I want to turn quickly to our water rights as mentioned earlier we have 21,000 acre feet of owned water rights values of that of the water is interesting water is very valuable when it's scarce and water is basically free when it's abundant and we happen to be have water rights that are proximate to areas where water is scarce and have taken on values anywhere from ten thousand dollars an acre-foot to seventy thousand dollars an acre-foot the Southern California water price escalation today is estimated to be almost six percent annually so when you combine that with our very valuable class 3 Colorado River water rights you we understand that we have a very very valuable asset in our water rights that are beginning to monetize so we talked about the following program in Yuma for 1.3 million dollars the next deal on the river as mentioned earlier will be put in place in 2027 that'll be another following program that we can that we think will be considerably more valuable than the one that's in place we also talked about the monetization of conserved rights today in the Santa Paula Basin with additional monetization taking place this fiscal year so what we've done this this recent year in this fiscal year is we've sold 58 acre feet of Santa Paula Basin pumping rights for thirty thousand dollars an acre foot to generate 1.7 million dollars we've talked about the upcoming following program in Yuma and finally we're actively contributing our water assets in the Santa Clara Valley into a water utility to position us to do more monetization in the future. Jumping into our second strategic value driver which is our avocado production. The key market advantage is we're positioned for growth in a thriving avocado market. The U.S. today consumes somewhere between three and three and a half billion pounds of avocados. We have a strategic timing advantage in our production in that California fruit comes to the market right in between the two very large avocado seasons from Mexico. We have a premium position in the marketplace. People in the United States prefer to eat California avocados. We have proximity and a logistical advantage to the market. The highest per capita consumption of avocados in the country is Rocky Mountains West which gives us a significant logistical advantage to those markets. And finally, from a supply context, California accounts for most of the U.S. production, and we currently produce about 350 million pounds, while Mexico produces 4 billion pounds of avocados. Avocado consumption continues to grow annually at double-digit rates and is forecast to be consumption of $26.2 billion by 2028. as we look at our own history in growing avocados from 2019 to 2024 we had our biggest avocado year ever in 2024 as Scott mentioned generating 25 million dollars of revenue for the company on 15 million pounds of production on 750 150 acres of producing acreage as We look at our future we look to extend and expand our production upwards to 2,000 acres of production of our own lands and our forecasting generating 17,000 pounds per acre of production We're very pleased with the progress that our farming team have made in their cultivation and production of avocados, and we're very pleased with the results last year, achieving significantly greater yields than other benchmark producers in California. Also, we're just capitalizing on demand, which continues to grow, but our 2030 targets are to get to 34 million or greater pounds of production, generating $45 million of annual revenue and $34 million of operating profit this chart's interesting if you want to follow the progression so on the bottom here you'll see the chart of the dark orange are our bearing acres and the lighter color on the top are the acres that have been planted but aren't bearing yet and what you'll see is we'll reach 2 000 acres of production by 2027 but we'll will reach full bearing production by 2031. Today, we have 14 acres planted, which represents about 2.2% of the U.S. market. Teeny, but on a production level, the average avocado grower in the United States is growing on about 7 acres. So put that in the context of Lehmanera now producing on 2,000 acres. Here's why we're excited financially and why avocados. We're currently doubling the amount of trees per acre that we're planting the old plantings used to contemplate 90 trees to the acre all of our new plantings are going in at a hundred and eighty trees to the acre much higher density giving us belief and confidence that we'll be able to increase much higher yields per acre in our production if If we achieve the forecasted 17,000 pounds per acre, and we give it a realistic value of $1.50 per pound, which we think is achievable given where we sit in proximity to the Mexican supply chains, that should generate about $25,000 of revenue per acre. It costs us 8,500 acres to farm it, which should generate about $17,000 per acre of operating profit. If you multiply that by the 2,000 acres of production, you see how we get to the $34 million of forecast operating profit. And here's why we're really bullish on California. Besides the market preferring it, besides our logistical advantage to the highest consuming part of the country, If you look at that top line of the blue line on the top, that's the Mexican supply that's coming into the United States from 2022 to 2025. So you can see when it goes and it peaks and then when it drops back down, that orange line there on the bottom is when California comes into the market. And so what's going on right now is the U.S. consumes about 60 million pounds of avocados a week. You can believe that if you think about our production We're talking about being less than one-half of one week of the entire supply in the United States But it'll be a very valuable supply with a great opportunity to hit a window When the market needs our fruit because the Mexican crop isn't available. We believe that's why We'll be sustainable in our avocado production But also in achieving the values that we believe we'll be able to achieve with avocados finally now to go to our third strategic value driver which is our one world of citrus we participate in three different parts of the supply chain in one in the one world of citrus we're we're a fully integrated lemon grower which today represents about 20 percent of our total supply chain we're also a lemon packer and seller which represents 60 percent of our supply chain providing services for our very valuable grower partners and finally we're a citrus marketer and seller for other suppliers but also for our value grower partners which represents 20% of our supply chain today limonera represents about 15% of the US lemon market the lemon market is highly fragmented and unfortunately significantly oversupplied and so there will be consolidation in in the industry coming the limonera company will be part participating in that but today we're very proud of our delivery of high quality products integrated farm to customer supply chains low-cost production and superior product mix that we offer to our food service and retail customers we're also very proud of our farm management service division which takes the know-how of our very skilled and competent farming team and provides these services out to other growers and other farm management's farm managers throughout California but focusing here on Ventura County we provide spraying services tree topping a new one that's pretty cool is we've actually are one of the first to provide aerial spraying using drone technology which is much more effective but also much more efficient than fixed-wing aircraft or helicopters and so if you see drones flying around the orchards just know that's probably a limonera guy doing it and we're just really excited about the promise of this division in our company so to wrap things up what are going to be the catalysts that are really going to drive value for the company we've talked about a lot of different things we're very focused on the three key strategic drivers but first under the land-use conversion opportunity we see the distribution that we got from the harvest at Lehmanera today but you'll also see the build-out of phase three of the harvest at Lehmanera development representing 550 single-family homes as well as the development of a 300 unit multi-family for rent apartment and duplex project you'll also see our Our Limco Del Mar opportunity, which will be our tendering for the shares of that limited partnership that we don't own today. That tender will be complete by the end of June. It will also be the planting of 105 acres of avocados on that property. And finally, the beginning of an entitlement effort on that piece of property. We'll also have our Harvest Medical Pavilion development, which should begin to monetize in the very near future, which will bring an extremely valuable benefit to the community with the relocation of the Santa Paula Hospital down to the valley floor and the development of an outpatient medical clinic as well. We'll also be reporting on our avocado expansion, on our water monetization, and then our success on selling windfall farms, our Chilean assets, and our Argentina assets. I won't dwell on our partnership with Agerman, which we announced yesterday. Mark's going to cover that, but we're extremely excited about the benefits that this is going to provide for our company as well. So in summary, I just want to go back and review the very three focused strategic value drivers for our company. The first is realizing premium asset value through land monetization and entitlement. The second is accelerating our leadership in California avocado growth. and finally to expanding our citrus operations so I want to conclude by recognizing a very dear friend who we lost this last year Mr. Lee Manera John Blanchard John's great-grandfather was the founder of this company and I don't think there was anybody that was ever involved in this company who embodied the spirit of this company better than John did we'll all miss him but we don't feel like we've lost him because we basically continue to live with him every day. I'd like to conclude finally by thanking my team of experts in everything you do. Your tireless efforts are the reason this is such a great company. I'd like to thank our board of directors for your wisdom and guidance. And finally, I'd like to thank all of you, our shareholders. Without you, we wouldn't be here. Thank you very much. Hi.

Good morning, everybody. Nice to see familiar faces. I've got to put on my wisdom glasses here as CFO. I'm Mark Palomountain, Executive Vice President here at Limonera and your Chief Financial Officer. Today, we're going to highlight two of our exciting new projects that are going to be significant financial drivers for our company here into the future, and then I'll give a brief overview of our financial situation today, and then we'll get to enjoy a nice lunch so hopefully I won't hold you up too long. Okay so as as we saw yesterday we announced a project with Agerman which we're going to form a joint venture let me see if I get there we go with the Agerman company and also Harrison Industries we know is our local waste hauler in Limonera to form a 70 acre compost commercial center and what that means right now we currently sit on a 15-acre piece which is down on orchard farms which provides agronomic mulch but it's it's just for our own private use primarily and we've we spread that compost over all of our 3,000 acres here in Ventura County which gives us tremendous agricultural benefit this 70 acre site was started permit process again a long lead time in 2012 so it's taken us over 13 years to get it here but what it is it's a 50-year permit for 295 almost 300,000 tons of green waste processing and think about the green can that you have you have your blue can and your other can that's trash and your green can and that green can anywhere in Ventura County is most likely going to come to our site to create this commercial compost and agronomic mulch it's really solving Ventura County's green waste landfill diversion requirements. What has really promoted this business over the last 10 years is legislation to get greenhouse gases lowered and reducing and green waste in the landfill, which is a primary driver of those greenhouse gas emissions. The project is going to be a 50-50 equity split, which we'll get into the benefits here in a minute of about a $35 million project cost. It will be $3 million of actual cash investment, 50-50 from Limonera and 50% from the Agramen, which is basically development cost to date since 2012. We were very fortunate to get a $10 million state grant to fund the construction, which will basically be the remainder of the equity in the deal. And it's just a sign of where times are as the state is really trying to focus on reduction of greenhouse gases and and limonair doing our part with this and our other renewable portfolio there'll be a 22 million dollar approximate loan on the project with hopefully some of our fine bankers here today that i see in the crowd and and and more importantly it's it's not necessarily on limonair's balance sheet so this will be project supported it'll be an equity investment meaning the equity method of accounting we will see earnings come across one line and that's that's typically helpful from a public company financial view here's the project site plan basically what it is it's a it's a bunch of wind rows so how how you form compost as you process it you put it through a grinder you mix it with more organic carbon material and it sits for anywhere from 30 to 90 days what's unique about this project and it's amazing the technology that's come over the last 10 years as you think about compost and the potential for odors and smells they've created technology it's called a casp system c-a-s-p which is stands for covered aerated aerated static piles and and those basically are vacuums which pull the air down through the piles and then they're filtered through a biofilter which effectively eliminates the odor so um for all the surrounding areas and neighbors and um you not only you won't see it from the freeway, but you won't smell it, which is a good thing. Next, we're like to play a video of the CEO of Agriman. He couldn't be here today, but he's going to talk about the project and the partnership.

Hi, I'm Bill Camarillo. I'm the CEO of Agriman, and I'm sorry I couldn't be with you in person today. Agriman and Limonera have partnered together to build a 70-acre state-of-the-art commercial compost center right here on Limonera property. This would be the only commercial compost center in Ventura County. We recycle organic waste for cities, not just in Ventura County, but now we recycle organic waste for over 200 cities in California. By taking that material out of the landfills, we're reducing greenhouse gas emissions produced by landfills. The state has mandated this through a Senate bill called 1383, and it's going to mandate that the state divert nearly 17 million more tons of organic waste by 2025 that's this year and to date they've only diverted about five percent we're so ready to go and unique to the state that has become a model for them and they awarded us a 10 million dollar grant to help pay to build this center so the opportunity for growth is tremendous the last i checked we're the only business that gets paid to take the stuff and we get paid to sell it and we have become the largest organics waste recycler and compost producer in california producing high quality products primarily for agriculture as part of a healthy soils initiative here in limonada we really feel we're stewards of the land we've been farming for 130 plus years we have to think about the importance of giving back to our soils.

We believe that organic matter is the base to create the balance of soil in time.

So how do you as a farmer approach a balanced ecosystem is by forming partnerships like the ones we're forming with Agromin where we have the ability to go back and put organic matter into our land and continue to preserve the characteristics of this soils by providing this six inch layer of mulch over the soil we're helping to increase the soil moisture for the root system of the tree as the mulch breaks down over the years it increases the carbon and the organic matter in the soil which also improves the flocculation of the soil which benefits nutrient uptake also what we've seen is that it limits the amount of weeds that will grow through the mulching system so it reduces the amount of herbicides we'll have to apply over the year. By not going through and spraying these synthetic herbicides, we're reducing our labor costs.

With Agriman being involved with Lemanera, we have learned how to use compost and mulch on the ranch to reduce water consumption, pesticide use, chemical fertilization use. We even found out that by using mulch in the rows that we were able to avoid snail populations because they don't like to trek across the uneven material. So a great story for the communities that we are going from the farm to the table, back to the farm, and we couldn't think of a better partner to grow this business with than Limonera Company.

So Limonera has been working with Agramin since 2004, so a little over 20 years. They've been a great partner to us, not only from the project down on the site, but just helping us with the farm. You saw all the additional benefits that we've got. As we were pulling out lemon trees, we received grants this year to pay for 100% of grinding that and putting it back into our land. So it's really important we think about our healthy soils and managing that going forward. If we look about the benefits, they are significant for limonera. Starting off with our 70 acres, we're going to start at an $8,000 acre per acre annual rent. if you look at rents for vegetable growers in the area which we have some they're anywhere between three and four thousand so almost double that it's a 50-year term with two and a half percent CPI escalators which starts at about five hundred sixty thousand dollars so right away adding benefit as soon as we get underway which should be starting this summer we will also enter into a 90 acre foot water supply agreement that will most likely be a lease and in a form of equity as our participation into that deal which will announce in the near term here as we finalize our our JV agreement with with agerman the contributions will start at about three million dollars for limonera per year which is a combination of the rent and the earnings from the joint venture and over the first 10 years it's forecasted that we'll receive over 40 million dollars of EBITDA from rents and earnings so a significant portion if you look at our earnings this year of 15 million forecasted this is going to be a big beneficial growth driver and we think there will also be other opportunities for us to participate with agerman as we go forward in other projects whether within the county or within the state currently agerman works with over 200 cities in 15 counties in California so they are the largest presence and people are calling them every day to figure out how to how to fix this diversion mandate and become compliant Harold talked about the this slide bit but this is really an intro to my conversation about the project which we call independence in harvest which is the 300 multifamily for rent apartments and we really haven't talked about it a lot it's it's more it's been in the permitting process and now we are within 12 months of breaking ground and it's time to talk about the significant value that this is not only going to create for the community but for the company as well it's 300 for rent multifamily apartments which are combined of two bedrooms three bedrooms and four bread bedrooms a nice mix which was asked about the city of what really was needed from from the community from rents anywhere from $2,800 to $4,000 which is on the lower to middle end of Ventura County you see in Ventura and Oxnard some significant rents above that for smaller square footages our square footages will range from 1,200 to just under 2,300 square feet and again we're to start construction in the summer of 26 an estimated being completed with all 300 units by the end of 28 just depending on how the market goes one note to about our project from the single-family sales we originally pro-forming about one home sale per week we're averaging two to three currently right now so the environment as we've learned for for smart growth is here And so we're here to help, and the company will benefit greatly from that as well. Monetization, meaning could we sell this apartment project in 2030? That's how we're looking at it from a cash flow perspective. We think it will be fully rented up at that point in time. It will most likely have a 10-year note on it. And so there's a couple ways to look at valuing it, valuing it when it's fully rented up and valuing it when it's fully paid off of its debt within 10 years. And that range is significant for Limonera. It's anywhere from $40 million to $100 million just back to us starting in 2030 and if we held it towards 2037. So a lot of optionality there. The expected rental income is about $10 million total, of which we would split 50-50. If we decided to hold that in our portfolio, we have a very lucrative rental portfolio that generates about $2 million of operating income every year. so that'll be a decision we get to make down the road here so I have a number of pictures just to just give you a highlight of what this will look like and you know when I think of apartments I think of four or five six-story units these are really like single-family homes with shared walls they are very attractive we've we've designed them with a lot of amenities all of our Our builders are excited to come and work with us on this. Our partner, Lewis Group of Companies, has built over 10,000 multi-family units. So they're the partner to have. They know every hiccup, and they've got just an incredible team that we've been working Here's some more pictures of what they will look like from the street view. that's that's Santa Paula Street there and really it will also have a lot of separate facilities from harvest so it doesn't burden the single-family homes itself you can see here there's a pool pickleball which is now very in vogue I mean you've got a gymnasium and a number of different amenities that are solely for the independence project within harvest here you can see the potential for some small retail think coffee shop pastry shop postal that kind of thing so you have stuff within the community okay so this is this is where the the rubber meets the road Harold mentioned this chart and really this is what we've laid out over the next five to six years of the cash flow that will be coming back to us we were very excited today that we announced that we received ten million dollars from our partner Lewis as a distribution which exceeded our eight million dollar goal for the year we're hopeful that we can exceed that even more going forward and we're feeling optimistic about this trajectory of a total of a hundred and eighty million dollars of cash distributions which will come back to the company by 2030 okay so let's talk about financial performance I think the first question which I'll address which will probably be asked but I'll start with is what's what will happen with tariffs in limonera and the way we're looking at tariffs is we think it's going to be a positive it's tariffs are obviously challenging the financial markets of the world today you know we hope that those will smooth out over time but for the domestic producer specifically in agriculture and we think that there will be a significant benefit one you know the challenge lemon supply market we oversupplied market we have there'll be less fruit that will come into California during this high peak summertime specifically Argentina and Chile and those will have approximately 10% tariffs and where the lemon price is right now it's already challenged enough for them to make a profit coming in so I think that we'll see a bit better balance and we'll hopefully get our price back up to a more normalized level for our lemon supply this this summer and avocados is our exempt from the tariff at this point in time we have an extremely high price and we're seeing prices anywhere from 220 to two dollars and 65 cents depending on your size right now and it's very exciting and we've got a really good crop estimated at seven to eight million pounds this year and and we're actively starting picking right now we're doing some size picking so you'll see some financial benefit here in the near term okay so if we look at the our historical performance you know we've had pretty significant revenue growth over the last five years really our last two years were our almost most profitable year our most profitable year was in 2018 where we did 23 million dollars of ebitda so 22 million in in 23 and 21 million in 24 and obviously you know you go back and look at covid in 2020 and 2021 where um 70 of lemons were consumed in restaurants and bars and we all know what happened there so a nice recovery you know we've done a lot of work and put a lot a lot of hard effort into and pivoting the company um from going into more retail projects and then also the the large pivot um for decreasing our our lemon acreage and increasing significantly our avocado acreage to become the largest grower in the united states this is the one that lets me sleep at night so i wasn't sleeping from 2019 through 2022 and uh and and at that time 2022 we had that transformational transaction where we sold our northern properties for just shy of a hundred million dollars paid down our debt to about 40 million dollars and then last last early summer when we transacted with Lennar on phase two, our net debt position actually went to $4 million. So if you look at Limonera since its inception, I would say that this is the strongest financial position the company has ever been in, and we look forward to creating a cash position and allocating that back to the shareholders, whether it's buybacks, dividends, and the like in the coming future here. So Harold talked about this slide a little bit. I'm going to talk about it in a little bit of a different lens. You know, we went through a really rigorous process over the last 18 months to talk about the process of strategic alternatives and review what those could look like for the company. Through that process, we went through a third-party review and appraisal of all of our assets, 100% of our assets. We all knew what we had that was significant value, but we no one ever told us from from an outside lens outside of the forest what that was and these numbers came back exactly how we thought they would and we we think there's probably upside the question is is is how do you unlock that value and so you know we we as harold mentioned through the process we saw a lot of interested parties but we didn't think for the shareholder that the right deal was presented in front of us and through our new strategic plan with those three pillars we think there's going to be much greater value created over the next five to ten years than we would have by by taking some of those other ideas so those values here you look where the stock is today you go wow it's it's a 50% discount it's it's you definitely were in a challenging environment but I think in the in the near term as we talk about water monetization we talk about real estate projects at Del Mar and then avocados you're going to see significant earnings growth which will then help drive our share price again this is a slide this is my last slide but i just want to reiterate the path today little limonera is 15 million dollars of ebitda with very little additional new investment we have a clear path to 50 million dollars of ebitda by 2030. thank you for your support and now we'll go to any q a hi thank you for today um i have a question oranges weren't even

mentioned though they're on the slide and i know the focus is really on avocados uh we have a packing facility um i thought it was interesting that you were replacing limco del mar trees the lemon trees with avocados part of me is wondering um any other farmers here that have dilapidated lemon trees that want to stay in the lemon business where you could swap our lemon tree acreage for theirs and grow avocados on their land so I think the simple answers will be opportunistic but if you turn around you'll see a guy

who's gonna he started to do that yeah so I I think there's a really interesting thing that's going on demographically here in the county to you know the lemon market is really challenging this is year unless you're producing over 1,500 cartons to the acre you're probably not making money we we have been fortunate and that by focusing in our production here we're able to do that even in this lower priced environment inflation inflationary pressures have put a lot of a lot of pressure on that but you're also seeing a demographic reality where you have lots of sort of generational family farmers who are in their 70s in their 80s they're looking at the future of the lemon markets they're looking at their kids that are all lawyers are living in LA or they're not here and that without an interest really to go into it and there's a few exceptions but I think there's gonna be an opportunity to to expand the the land base here and if we take our expertise in avocados and we apply that and also in lemons and citrus then I think there'll be opportunities it has to do with Mark's last slide how come you guys seem to be the only ones who can recognize the fair market value versus book so it's the same old thing right it's like if you look at orchard farm the basis on orchard farm is $400 an acre and if you looked at the fair market value it's close to a hundred thousand dollars an acre so the first thing is is a buyer that would come in to recognize that value would want to recognize that with with value towards land use conversion probably and given where lemon markets are and then sort of the the new reality and avocados there's probably a good return on capital at fair market value growing avocados and the returns you could get there but it's farming and it's risky and so people aren't lining up to to pay that to pay that value that being said though it's incredibly valuable land and we are very fortunate because we get to operate it there there will be interest and you'll see more and more property one of the issues that we found when we as mark said we went around and appraised all of the assets one of the one of the reasons that the appraisals kind of came in where they did in this part of the valley is you don't see a lot of land turning over and because you don't see that and they benchmark to you know recent sales or whatnot there aren't a lot of really comparable assets to compare ourselves to because there really is nothing like these assets so there are there is that value it's just that's the whole trick is how how do we get it and how do we get it back to the shareholders that's true i think i i don't think this is a secret uh through the process that we completed we we received a lot of interest from people who were in the land

used entitlement home building businesses and they recognize that lehman era is distinct maybe unique in its ability to move forward on an entitlement process because of the credibility it's established with the community being here since 1893 having done the harvest and and that feedback was we might we might pay the fair market value but not have the ability to execute on a strategy that would take it through entitlement which is I think accurate we believe that to be true I I think we're leaning into it today and I think they've been a management has been at conferences discussing it and and I know the board has discussed this for as long as I've been a board member I our board member Edgar Terry said this to me today you have to know when the time is right and the acknowledgement of the housing crisis in Ventura County and this presentation that you heard today is not only going on here it's going on everywhere in Ventura County and we think the time is now any other questions yes Betsy this is a more parochial question and it has to do with

harvest and connecting it more closely with Santa Paula what's the status of a potential bridge across the Santa Clara I mean the Santa Paula Creek I'm the bridge guy yeah so it's actually we're very close the bridge has originally was budgeted to be about 14 million dollars we're just about ready to get under contract that we think about 12 million a couple million dollars of savings we need to get a couple more permits that we get through so we can actually get into the creek bed there and and make sure we're stewards of the environment at the same time so a long and short story is we hope by this time next year we will have a bridge yes thank you my

question has to do with the transaction bonus program has that now expired as the strategic review process has ended and if so and if it has not expired is there an ending date to that program thank you the the plan was put in place it it captured a series of transactions that were eligible and and it expires when those transactions ostensibly are off the board so it's it's the 50 million dollars of assets that we

identified so that the bonus plan is based on the profitability of the disposition of those assets and so while that 50 million looks great there's probably the basis on those investments are pretty high so my guess is they're not gonna there's not gonna be a lot of profit which means there probably won't be a lot of bonus on on that and then it's also on the the profitability of harvest yes to get the stock price to go up I would say we are sticking to our knitting, trying to do exactly what is being described

here and communicate about these strategic important value drivers. The valuation, this is impression and everybody has their opinion on what affects value most, But for the reasons of this discussion going back and forth about the difference between book value and what the fair market value is and people looking at us, understanding the agricultural mission, we're excited about things like Agram and looking at that. But the anticipation that some of this land could be entitled drives a potential value which is at the higher end and for us to significantly increase that I think there needs to be an appreciation my opinion there needs to be an appreciation that there's a plan and a commitment to move forward on that and our number is our plan here is Limco Del Mar because that makes the most absolute sense it's a donut hole as you saw from the map within the city of Ventura it has the water water is the gating issue typically in all land use in Southern California and elsewhere so we have the water in a in a perfect location which makes a lot of sense and their preliminary returns without daylighting individuals and their feedback is that this is going to be warmly received we expect that the community the stakeholders in Ventura County want this type of development there will be benefits and when the market believes that we are capable of executing on some of the entitlement we'd hope to see an improvement and then lastly I mean we have people on our board who are much more aware of external conditions I think we can all

see that the market is tumultuous in the moment for reasons which have nothing to do with tariffs impacts on Lehman era no matter what we communicate but Harold yeah I think that I would just layer onto that that it's we're kind of in the we got to do it the old-fashioned way we have to earn our way out of this which is why we're excited by what we just showed you because we've invested the capital we have confidence in our business plans and if you believe in putting multiples on levels of EBITDA or cash generation, we should earn our way back to a share price that mirrors what our fair market value is. So that's the plan.

I'm sitting here, Peter. I mean, do you have another view? No. So let's – where are we at here? And I'll come back over here.

It was a nice video on the SOAR plan, and I'm wondering, you know, Harold, you said yourself it took 17 years to entitle Harvest what is there any movement at all in Ventura County as to breaking that up and if so can you talk about it yeah so I said it took 17 years to break ground it's different so the the value of the land is accomplished when you win the SOAR vote so in in Harvest we started that in 2004 and in 2008 we got the 83% approval and won the SOAR vote that's when the value appeared so that would be the plan is to give it

everything we got for a period of time which should be anywhere from three to five years get to a ballot box and then know that that value is there because that property should happen fast because LAFCO wants it one of the one of the challenges we had with this one out here is LAFCO made us develop or negotiate a new green belt ordinance between Fillmore and Santa Paula which was a great exercise in herding cats it was really challenging but we did it and we've got a great green belt but that took several years and you remember what the what the the real estate market was like in 2009 going through that so there were a lot of external factors but I think this is a three to five year push

And I'm just going to add, Bob, every year since I've been a board member, part of the strategic planning effort is, what's the fate of Limpkill Del Mar? Is it ready? And the viewpoint has historically been until 24 months ago, there's no chance. It just didn't make any sense to try to pursue it. and that has changed to the point where I'm going to say I've never talked to as many people, seen as much evidence of support on the housing point in the Central Coast and in Ventura County. But sorry, we were over here. Betsy?

We've not heard anything about labor, and that's good news.

But I wonder if you could comment about Lemonera's involvement and I don't know what the word would be, but relationship with the h2a visa program yeah great question thank you so labor is obviously one of our most important assets here we do have over 250 farm worker houses which keeps a captive workforce for us but more importantly we've focused tremendously on guest worker programs h2a and more recently h2b programs we've got anywhere from 50 to 75 workers at a time from three to six months stints and the the most important part there is you have to have housing so having housing is that asset lets us retain those those workers and and most times they're they're you know even more efficient and make the total workforce improve operationally so the difference between h2a and h2b is simply h2a is in the field they're in designated areas whether it's pruning picking general farm labor work and then the H2B is more recently we brought in for the packing house and specifically sanitation and it's been extremely effective and and and cost savings of anywhere from 15 to 20 percent sorry I

think you're a few more here hi lemonade has been around for a while and looks like you guys are posturing for a successful future could you comment on dividend or potential future dividend rates so mark touched on it but in order to pay a dividend we kind of have to generate some cash in order to do that so there'll be a lot of great ways to manage our capital and our cash as it comes in but we could buy stock back we could increase a increase the regular dividend we pay about a 30 cent we pay a 30 cent dividend today and have held that steady as we see that those results coming and we have more consistent cash flow i think there'll be a great opportunity to raise the dividend and there's also because our cash flows are sometimes lumpy because of these these real estate transactions there's always the opportunity to pay a special dividend i've done that before and what i tell you is it's great when you do it but the next year everybody's like well what have you done for me lately so i'm not really sure that we'll do that but ultimately that's what the board will help us think about and and the uh the sources and uses of capital are taken very seriously and And we'll communicate that once we start earning the money.

Always a hot topic of conversation at the board. Further questions? In the back.

The valuations for fair market value, those were done by outside companies, I assume. Were there one or two, or who did the appraisals or valuations?

The answer is yes, and we had land and water, but Mark, you want to?

Yes, so we had a number of different groups, all professional groups, that did our appraisals, anywhere from $50,000 to $80,000 per acre. We've had Farm Credit with our bank do appraisals over the term, and so that's how we had the confidence of those $450 to $550 million of assets.

But specifically, it was CB Richard Ellis that did the land and farming appraisals, And then it was a company called Stratacon that actually did the valuation work on our water assets.

So those were independent, right? Any other questions? Okay. Seeing none, thank you so very much for being here today, for your interest and your ownership of stock in Lehman Air Company. We think it's a great company and a great future ahead. So you may join us for lunch. Thank you.