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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended September 30, 2004

OR

For the transition period from              to             

Commission file number: 0-18222

RICA FOODS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Registrant’s telephone number, including area code: (305) 858-9480

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001 per share

Indicate by check mark whether the registrant (i) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

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

Indicate by checkmark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes  ¨    No  x

The aggregate market value of the voting and nonvoting common equity held by non-affiliates of the Registrant, as of March 31, 2004, the last business day of the registrant’s most recently completed second fiscal quarter, computed by reference to the price at which the common equity was last sold on the American Stock Exchange on such date ($6.20) was $17,959,125.

The number of shares outstanding of the Registrant’s common stock, par value $0.001 per share (the Common Stock), as of the latest practicable date, December 22, 2004, was 12,864,321.

DOCUMENTS INCORPORATED BY REFERENCE

None.

RICA FOODS, INC.

TABLE OF CONTENTS

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PART I

ITEM 1. BUSINESS

Background

Rica Foods, Inc. (the “Company”) was incorporated under the laws of the State of Utah on February 6, 1986 and undertook a public offering of its securities in 1987. In April 1994, the Company changed its state of incorporation from Utah to Nevada.

Business of the Company

During the fiscal year ended September 30, 2004, the Company’s operations were principally conducted through two, wholly owned Costa Rican corporations, Corporacion Pipasa, S.A. (“Pipasa”) and Corporacion As de Oros, S.A. (“As de Oros”) and their respective subsidiaries. Effective October 1, 2004, As de Oros merged with and into Pipasa (the “Merger”). Pursuant to the Merger and in accordance with Costa Rican law, all assets, liabilities, rights and obligations of As de Oros were transferred to and assumed by Pipasa.

Prior to the Merger, Pipasa and As de Oros, founded in 1969 and 1954, respectively, were the largest poultry companies in Costa Rica. Subsequent to the Merger, Pipasa is the largest poultry company in Costa Rica. According to information provided by the Costa Rican Chamber of Poultry Producers, Camara Nacional de Avicultores de Costa Rica (“CANAVI”), during the fiscal year ended September 30, 2004, Pipasa and As de Oros collectively comprised approximately 55% of the poultry market in Costa Rica, and based upon a poll conducted by the Company in August 2004, Pipasa and As de Oros collectively comprised approximately 37% of the animal feed market in Costa Rica. During the 2004 fiscal year, the main activities of Pipasa and As de Oros included the production and sale of fresh and frozen poultry, processed chicken products, commercial eggs and concentrate for livestock and domestic animals. All such activities continue to be carried out by Pipasa subsequent to the Merger. Both Pipasa and As de Oros have been in the poultry business for more than 30 years with more than 15 years of experience in exports. Planeta Dorado, S.A., a Costa Rican corporation wholly owned by As de Oros prior to the Merger and currently wholly owned by Pipasa, also operates a chain of 28 fried chicken quick service restaurants in Costa Rica called “Restaurantes As” and “Kokoroko”.

The Company’s subsidiaries own a total of 80 urban and rural outlets throughout Costa Rica, three modern processing plants and four animal feed plants. Due to similar business activities, the combined operations of the subsidiaries have traditionally permitted the Company to achieve operational efficiencies. The Company expects that the Merger will increase the Company’s branding, operating, administrative and marketing efficiency.

The Company promotes its brand names through advertisements and marketing events and considers its subsidiaries to be among the most recognized Central American chicken producers, supplying chicken in Costa Rica to Burger King, McDonalds, Quizno’s, Church’s Chicken, Denny’s, Tony Roma’s, Hardee’s, Kentucky Fried Chicken, Pizza Hut franchises, Price Smart, Taco Bell, Price Smart and Gerber Products companies.

The Company’s subsidiaries do not depend on the sale of any one product but rather offer a variety of products available at a range of prices and presentations. The Company produces and markets over 1,000 different products to meet consumer demands, which the Company believes represents an important strategic advantage.

Segments

Information regarding the Company’s segments for the last three fiscal years is set forth in Note 16 to the Company’s consolidated financial statements for fiscal year 2004, 2003 and 2002. Such information is incorporated herein by reference. The following is a brief description of the main business segments of the Company:

Broiler Chicken: Poultry is a popular food item in Costa Rica because of its easy preparation, nutritional value and low price when compared to other available meats, according to information provided by the Junta de Fomento Avicola, a Costa Rican governmental institution. Poultry is a generic product, consumed at all social levels and is not defined by geographic markets. The Company’s brand name for broiler chicken, chicken parts, mixed cuts and chicken breasts is Pipasa(TM). Polls and consumer information gathered by the Company indicate that the majority of Costa Ricans eat chicken at least one to three times a week. Chicken is sold to institutional customers, schools, hospitals, hotels, supermarkets, restaurants and small grocery stores.

Animal Feed: Animal feed is made with imported raw materials, such as corn and soybean meal, along with the unused portions of chicken and other vitamins and minerals. Animal feed is marketed for consumption by cows, pigs, birds, horses, shrimp and domestic pets. The Company’s animal feed products are sold through the Ascan(TM), Aguilar y Solis(TM), Mimados(TM), Kan Kan (TM), Dog Pro^™, Salvaganado^™, Astrocan^™ and Nutribel(TM) brand names. Customers for the commercial animal feed brands are mainly large wholesalers and high scale breeders. This customer group focuses on quality and price. Products marketed through the Mimados(TM), Dog Pro(TM), Kan Kan (TM), Astrocan^™ and Ascan(TM) brand names are targeted towards veterinarians, pet stores and supermarkets and are sold typically to consumers with medium to high income levels.

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By-products: By-products include sausages, bologna, chicken nuggets, chicken patties, frankfurters, salami and pate. The Zaragoza (TM) brand name includes chicken, beef and pork by-products. The Company’s chicken by-products are sold through the Kimby(TM), Tiquicia(TM), Chulitas(TM), Zaragoza(TM), Rocadinos^™ and As de Oros(TM) brand names and are sold to all social and economic levels. These products are sold mainly in supermarkets, and sales are predominantly driven by price. The Kimby(TM) brand name is the leading seller of chicken by-products in Costa Rica.

Exports: Subsidiaries of the Company export different products to all countries in Central America, Colombia and the Dominican Republic and make occasional exports to Hong Kong. The Company exports the majority of its products, including broiler chicken, by-products, animal feed and pet foods.

Quick Service: Corporacion Planeta Dorado, S.A. operates 25 restaurants (the “Restaurants”) located in rural and urban areas throughout Costa Rica, including express delivery service in some restaurants. This segment is comprised of quick service restaurants, which offer a diversified menu of chicken meals. The Restaurants distinguish themselves from other quick service chains by offering dishes and using recipes and ingredients that appeal to the taste of consumers in Costa Rica. The quick service restaurant business is highly competitive in Costa Rica, as several other quick service chains operate in Costa Rica.

Corporate Segment: Corporate is responsible for the treasury, tax and legal operations of the Company’s businesses and maintains and/or incurs certain assets, liabilities, income, expenses, gains and losses related to the overall management of the Company which are not allocated to the other reportable segments. These items include general and administrative expenses and the Company’s amortization of goodwill. This segment does not generate any revenue for the Company. See Note 16 of the Notes to Consolidated Financial Statements for corporate segment information.

Other: This segment includes sales of commercial eggs, non-recurring sales of fertile eggs, fertilizers and raw material, among others.

Distribution Network

The Company has a distribution fleet consisting of approximately 230 product distribution trucks and supervision vehicles. Poultry delivery trucks are equipped with refrigeration chambers to ensure delivery of fresh products daily, thus maintaining the Company’s reputation for fresh quality products. In addition, the Company uses independent distributors to deliver larger quantities of animal feed to some of its customers.

The Company’s products are sold throughout Costa Rica, through owned or leased delivery trucks, urban and rural retail outlets that may also be owned or leased, supermarket chains and independent distributors. A majority of the total distribution of the Company’s products is conducted through the Company’s urban retail outlets and delivery trucks, with a smaller portion through rural outlets. The remaining distribution is serviced through the Company’s processing plants. The retail outlets, mostly located in urban areas, are exclusively dedicated to the sale of the Company’s products and most of these outlets are rented by the Company. As of September 30, 2004, the Company had a customer database of approximately 23,000 customers who purchase products on a regular and occasional basis.

Seasonality

The Company’s subsidiaries have historically experienced and have come to expect seasonal fluctuations in net sales and results of operations. The Company’s subsidiaries have generally experienced higher sales and operating results in the months from October to January, which fall in the first and second quarters of each fiscal year. This variation is primarily due to holiday celebrations that occur during these periods in which Costa Ricans prepare traditional meals, which include dishes with chicken as the main ingredient. The Company expects this seasonal trend to continue for the foreseeable future.

Raw Materials

Corn and soybean meal are the primary raw materials used as components for the Company’s products. Corn and soybean meal purchases for fiscal year 2004 represented approximately 45% of the total cost of goods sold and approximately 70% of raw material costs. Historically, the Company has been able to obtain a satisfactory supply of these materials.

The Company imports all of its corn from the United States of America through the Chicago Board of Trade (“CBOT”) and uses commodity futures and forward purchasing for hedging purposes to reduce the effect of changing commodity prices on a portion of its commodity purchases. See Item 7 for a more detailed discussion of the Company’s forward purchasing contracts for raw materials. The price of corn and soybean meal, like most grain commodities, is fairly volatile and requires constant and daily hedging in order to minimize the effect of price increases on the Company’s profit margin. Changes in the price of corn can significantly affect the Company’s profit margin.

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The Company purchases its soybean meal from Industrias Oleaginosas, S.A. (“INOLASA”), a Costa Rican corporation, in which the Company holds a 10% equity interest. In Costa Rica, there is an applicable 5% tax for soybean meal imports, which is not levied if such imports are purchased through INOLASA. If for any reason INOLASA cannot deliver the soybean meal to the Company, the Company can buy its soybean meal directly from suppliers located in the United States or South America. Thus far, the Company has never had to purchase soybean meal directly from suppliers other than INOLASA.

Customer Relations

The majority of the Company’s customers are located in Costa Rica. No single customer accounted for more than 10% of total consolidated sales, and the Company believes that the loss of any single customer would not have a material adverse effect on the Company’s business.

Backlog of Orders

As of September 30, 2004, the Company had no material backlog of sales orders.

Competition

Although the Company is significantly larger and better established than any one of its domestic competitors, the Company believes it does face competitive pressures. The Company’s principal competitors are other vertically integrated chicken companies domiciled in Costa Rica, who the Company believes have a market share of approximately 45% of the broiler market. The Company believes that its experience, economies of scale, and brand recognition are the primary barriers to entry for other domestic competitors. The Company’s local market share also could potentially be threatened by foreign competition. The Company believes that the likelihood of a threat by foreign competitors is low for several reasons. First, the Company has a strong reputation for producing high quality products at a reasonable price. Additionally, consumers in Costa Rica prefer fresh chicken to frozen chicken. Due to transportation constraints and distance, the Company believes foreign competitors would have to sell frozen chicken if they were to sell chicken in Costa Rica.

The Agriculture Ministry in Costa Rica together with the private industry sector of Costa Rica monitors all chicken entering the country to prevent the spread of Newcastle Disease in Costa Rica. The market in Costa Rica is also assisted by tariff agreements at the present time. Chicken importers must pay duties as dictated by the World Trade Organization (“WTO”) (Formerly, General Agreement on Trade and Tariffs, (the “GATT”)). These agreements were reached at the Uruguay Round of the GATT negotiations, which are scheduled to end in 2004. Unless all of the WTO participants agree otherwise, the quotas and tariffs established for 2004 will continue to apply in subsequent years. The agreements provide for quotas and scaled tariffs, and permit only a limited quota for certain broiler chicken cuts to enter the Costa Rican market at a preferential duty. These agreements provide that for fiscal year 2004, only 1,285 metric tons (“MT”) of poultry meat and 150 MT of poultry by-products can be imported to Costa Rica from countries outside of the Central American Common Market. This quota is taxed at a rate of 34% for poultry, 29% for poultry sausages and 19% for poultry patties. Amounts in excess of these quotas are subject to a 150% tariff, except for whole chicken, patties and breast cuts, which are subject to a 40% tariff. Unless all of the WTO participants agree otherwise, the quotas and tariffs established for 2004 will continue to apply in subsequent years.

The United States is currently in negotiations with the Dominican Republic and five Central American countries, including Costa Rica, Guatemala, Honduras, Nicaragua and El Salvador, to establish a Central American Free Trade Agreement (“CAFTA”), which among other things, addresses the reduction of restrictions on the export of broiler meat by the United States to these Central American countries. The Costa Rican poultry industry has been actively participating in the CAFTA negotiations with respect to the establishment of quotas for chicken imports to Costa Rica. As of the date of this report, no agreement has been reached between Costa Rica and the CAFTA participants. All of the other CAFTA participants have reached an agreement with respect to quotas for poultry imports. Pursuant to such agreement, quotas for poultry imports will gradually increase over a period from approximately twelve to seventeen years.

Pricing

In Costa Rica, there are no laws against monopolies; however, there are laws against monopolistic practices. Companies that have a dominant market share in Costa Rica cannot arbitrarily increase prices in order to take advantage of market position. Companies also are forbidden to work in conjunction with their competitors in order to create price collusion. The Company’s pricing strategies have been influenced by the devaluation of the Costa Rican colon, economic conditions and the supply and demand of the product in the market. Historically, the Company has consistently increased its sales prices in order to help mitigate the effect of the devaluation of the colon. The Company believes it has reliable historical data on consumer reactions with respect to price increases and uses this information in its strategy to counteract the devaluation of the colon.

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Marketing

The Company has a division dedicated to marketing. The marketing department’s responsibility is to advertise the Company’s various products and brand names. In addition to television and radio advertisements, the Company’s distribution centers promote the Company’s brand names by distributing posters, T-shirts and hats with the Company’s logo. In Costa Rica, the Company’s brand names commonly appear on billboards and bus stops. Other marketing techniques used by the Company include packaging presentations, promotions and sponsoring of special national events.

Research and Development

The Company conducts continuous research and development activities to improve the quality of the diet fed to poultry during their growing stage. The annual cost of such research and development programs is less than one percent of total consolidated annual sales and is expensed as incurred.

Employee Compensation and Incentives

As of October 30, 2004, the Company employed approximately 3,300 persons.

The Company believes it has good relations with its employees. Private companies in Costa Rica typically support their own workers’ associations instead of organized unions. These associations offer various benefits for their employees. The Company believes that the success of the worker’s association, Asociacion Solidarista de Empleados de Rica Foods (“ASERICA”), and the fact that there has never been a strike at the Company’s facilities, reflects the quality of the management team and its ability to keep the Company’s employees satisfied. ASERICA provides certain recreational facilities, healthcare and pension benefits as well as financial services to the Company’s employees. This association is among the largest workers’ associations in Costa Rica.

Salaries in Costa Rica are increased twice a year as dictated by the government in order to counterbalance the effect of inflation and increases in the cost of living.

At the present time, labor laws in Costa Rica require all companies to make a severance payment under certain conditions. Pursuant to such laws upon an employee’s termination without cause death or retirement all companies in Costa Rica must make a payment equivalent to 5.6% of such employee’s yearly gross salary for every year of his employment up to 8 years of labor as part of a severance payment. An employee who resigns voluntarily or is terminated for cause forfeits his right to any severance benefit. Since 1991, the Company has waived the 8-year limit dictated by the labor law, and pays severance based on the total number of years of service. The Company is also required by Costa Rican law to deposit an additional 3% of each employee’s yearly gross salary into a pension fund.

The Company deposits every month in ASERICA 5.33% of each employee’s yearly gross salary as part of severance pay, and the employees are required to make a monthly deposit equivalent to 4% of their monthly salary as part of a savings program. In February of each year, ASERICA pays each employee 1.33% of the 5.33% deposited by the Company for such year. Amounts paid or transferred to ASERICA may not completely cover the severance payment at the time the employee leaves, since the severance payment calculation is based on the average of the last 6 months’ salary. Any remaining amount owed by the Company must be settled when the employee leaves the Company. As of September 30, 2004, the Company has recorded an accrual in the amount of approximately $211,861 for future severance payments, which has been included in accrued expenses. The Company believes this amount is adequate based on past experience.

All employees in Costa Rica are protected by obligatory insurance with the Caja Costarricense de Seguro Social (“CCSS”) and the Instituto Nacional de Seguros (“INS”), which are the government’s social security and insurance programs, respectively. All companies in Costa Rica must pay the CCSS and the INS 25% and 1.1% of each employee’s monthly salary, respectively. The CCSS pays 60% of the employee’s normal salary during the periods in which the employee is unable to work. In addition to these benefits, employees must pay a total of 8% of their monthly salary to the CCSS in order to receive healthcare, pension and maternity care benefits.

Employees of the Company are provided with a profit sharing program. If either one of the Company’s subsidiaries has a successful year and generates profits in excess of certain budgeted levels, such entity will distribute a percentage of its net income to its employees (the “Incentive”). This Incentive is calculated monthly and distributed every two months. The Company encourages its employees to develop a career with the Company, and accordingly, in conjunction with a local university, the Company offers preferential rates for its employees. The main goal of the program is developing the Company’s future management team. In addition, the Company’s human resources department offers in-house and outside training for its employees in various fields, in order to assure quality in all areas. The Company did not distribute any Incentives to its employees during the fiscal years ended September 30, 2004 and 2003, pursuant to the profit sharing program.

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On May 29, 1998, the Company adopted the 1998 Stock Option Plan (the “Plan”). Under the Plan, 200,000 shares of the Company’s Common Stock are reserved for issuance upon the exercise of options. The plan is designed to serve as an incentive for retaining and attracting persons and/or entities that provide services to the Company and its subsidiaries. As of September 30, 2004, there were no options outstanding under this Plan.

On November 29, 2004, the Board of Directors of the Company granted, effective October 15, 2004 (the “Grant Date”), a total of 120,000 options (the “Director Options”) to purchase shares of the Company’s common stock to two of its current directors. In addition, on the same date, as consideration for past services to the Company, the Company granted 10,000 options (collectively with the Director Options, the “Options”) to purchase shares of the Company’s common stock to one of its former directors. The Options vested upon issuance and are exercisable at any time during the period (the “Exercise Period”) commencing on the three month (3rd) anniversary of the Grant Date and terminating on the six month (6th) anniversary of the Grant Date (the “Expiration Date”).

The Options have an exercise price of $4.40 and the closing quoted market price per share on the date of grant was $5.21. The Company accounts for equity-based awards granted to employees and directors under APB No. 25 under which compensation cost is recognized for stock options granted below market value and amortized over the appropriate service period. The 120,000 options granted on October 15, 2004 to the two current directors have a value of $97,200 which will be amortized as compensation expense ratably over the fiscal year ended September 30, 2005. The Options granted to the former director have been accounted for in accordance with SFAS No. 123 using the fair value method of accounting, and accordingly, $12,825 pertaining to the 10,000 options granted to such former director have been accrued for as compensation expense in fiscal year 2004.

Poultry Raising Process

The poultry raising process starts with the import of one-day old breeder hens from the United States. After approximately 24 weeks the breeder hens reach reproductive maturity and begin laying fertile eggs. The hatching period lasts 21 days, which is divided into 19 days in hatching machines and two days in birth chambers. These baby chicks are inoculated to prevent diseases. The chicks are then brought to the Company’s own raising house or to grow-out contract farmers who raise the chicken to full size (for approximately 43 days).

The grow-out contract farmers are a group of 142 farmers who own their own land and facilities. These farmers have a long-term contract with the Company to raise the baby chicks to adult birds. During fiscal year 2004, grow-out contract farmers supplied approximately 70% of the total number of chickens needed by the Company. These farmers are paid according to the weight and quality of the chickens produced and the mortality rate of the chickens raised. The Company provides veterinary services and offers vaccines and chicken feed to the farmers at wholesale prices. Regardless of whether the Company or grow-out contract farmers raise the chickens, they are regularly inspected for immune deficiencies, vitamin levels and general diseases. By working in conjunction with these grow-out contract farmers, the Company has greater flexibility to increase or decrease the number of chickens raised depending on the Company’s growth objectives.

Once the chickens reach the desired weight, they are taken to one of the processing plants. At the processing plants, the chickens are slaughtered and the meat packaged or processed to make chicken by-products. The Company believes that its processing facilities are among the most sophisticated and largest in the country.

Costa Rica has been declared free of Newcastle Disease, and additionally, the Company has been implementing the guidelines of the Hazardous Analysis and Critical Control Points (“HACCP”). HACCP is a prevention-based food safety system used widely throughout the food industry. It is a tool used to assess hazards and to establish controls based on the prevention of food contamination. By identifying critical points in the process flow that could lead to contamination of food products and applying control measures at each point, the likelihood of food borne illness is reduced. All new employees are trained as to the proper procedures required in handling and preparing food.

Regulations

The Company’s poultry hatcheries and processing plants are subject to regulation under Costa Rican law regarding cleanliness and health standards. Exports of the Company’s poultry products are regulated in the countries in which the Company sells its products. The Company has strict sanitary processes in order to provide consumers with product integrity, safety and quality and is in compliance with all health regulations.

Environmental Compliance

The Company has been and is practicing appropriate environmental policies such as reforesting, processing and recycling of waste, producing organic fertilizer, building oxidation lagoons and sewage treatment plants. The Company’s compliance with environmental laws and regulations relating to the discharge of material into the environment or otherwise relating to the protection of the environment has not had a material effect on the Company’s financial position and results of operations. For fiscal year 2004, the Company did not make any significant investment in environmental projects.

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At the present time, the Company is not subject to any material costs for compliance with any environmental laws in any jurisdiction in which it operates. However, in the future, the Company could become subject to material costs to comply with new environmental laws or environmental regulations in jurisdictions in which it might conduct business. At the present time, the Company cannot assess the potential impact of any such potential environmental regulations.

Acquisitions and Potential Acquisitions

On December 27, 2004, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Industrias Avicolas Integradas, S.A (“Indavinsa”), a Nicaraguan corporation, pursuant to which the Company acquired all of the assets related to Indavinsa’s animal feed concentrate segment in exchange for (i) the Company’s cancellation of approximately $5.1 million of receivables owed by Indavinsa, which was the amount due to the Company from Indavinsa as of December 27, 2004, and (ii) an approximate $1.1 million account payable to Indavinsa by the Company. The primary assets acquired include an animal feed plant, including silos for storage of grain, grow-out farms for chickens and feedlot facilities for cattle. None of the acquired assets are encumbered based on background investigations performed on such assets. The Company believes that Indavinsa is the third largest producer of animal feed products in Nicaragua.

As of September 30, 2004, Indavinsa owed the Company an aggregate of approximately $6.6 million. In October 2004, the Company collected $2.0 million from Indavinsa (the “October Payment”). As a result of the October Payment and the cancellation of approximately $5.1 million of receivables owed by Indavinsa, as of December 27, 2004, pursuant to the Asset Purchase Agreement, it is the Company’s belief that the amount due from Indavinsa as of September 30, 2004, is not impaired.

The Company is continuing to explore the acquisition of a majority of the outstanding common stock of Avicola Core Etuba Ltda. (“Core”), a Brazilian corporation engaged in the production and distribution of poultry. If the acquisition is pursued, the Company would acquire the majority of the outstanding stock of Core from the Company’s Chief Executive Officer. The Company continues to closely evaluate the performance of Core to determine if, when and how the Company should integrate its business with Core. The Company has postponed indefinitely the acquisition of Core.

On February 20, 2003, Port Ventures, S.A. (“Port Ventures”) and As de Oros entered into a Stock Purchase Agreement pursuant to which As de Oros agreed to acquire from Port Ventures 2,040 shares of common stock (the “Shares”) of Logistica de Granos, S.A., representing 51% of the issued and outstanding shares of capital stock of Logistica, for a purchase price of US $2,580,000. During fiscal year 2003, As de Oros remitted approximately $1.4 million or 55% of the Purchase Price to Port Ventures (the “Remitted Payment”) in exchange for bills of exchange, recorded as part of other non-current assets on the Company’s balance sheet. The closing of the purchase and sale of the Shares is subject to: (i) the final grant by the Government of Costa Rica of the Concessions and (ii) the execution of definitive agreements between the Government of Costa Rica and each of the Port Companies regarding the construction and operation of Puerto Caldera. Port Ventures has agreed that As de Oros need not make any further payments pursuant to the Stock Purchase Agreement until the Concessions are finally ratified. The Company expects to obtain more information regarding when, and if, the definitive approval of the Government of Costa Rica is expected to be obtained during the second quarter of fiscal year 2005 and to re-evaluate its alternatives at such time.

As with any business acquisition, there can be no assurance that the Company will close these acquisitions and there can be no assurance that these acquisition efforts will prove to be beneficial to the Company even if the Company’s Board of Directors, Audit Committee and management team believe the Company should pursue a development or acquisition opportunity and successfully negotiate the contracts critical to such venture. The Company will continue to evaluate financial performance and giving the necessary collaboration in order to obtain the necessary judging elements to arrive to a definite decision.

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ITEM 2. PROPERTIES

The Company conducts its operations through its production facilities and executive offices, which are all located in Costa Rica. During the fiscal year ended September 30, 2004, all facilities were owned by the Company’s subsidiaries, Pipasa and As de Oros (the “Subsidiaries”). Following the Merger, Pipasa owns all of such facilities. The Company owns seven processing plants, two hatcheries, and various other grow-out farms, retail outlets, and restaurants. Among other things, the Subsidiaries have transferred or pledged substantially all of their real properties and personal assets, including, among other things, its processing plants, hatcheries, grow-out farms, restaurants and retail outlets to the Trust (as defined below) to secure outstanding indebtedness of the Company. The corporate offices of the Subsidiaries and the most important processing plants are located in the central valley of Costa Rica. Grow-out farms are located in urban and rural areas.

On September 22, 2003 the Company entered into a trust agreement (the “Trust Agreement”) pursuant to which it restructured certain of its debt obligations. The Company contributed or pledged substantially all of the assets of the Subsidiaries, except for the assets pledged to other lenders as discussed below, to a trust (the “Trust”), which, as of September 30 2004, secured the Subsidiaries’ obligations with respect to $16.5 million of indebtedness owed to four financial institutions (the “Participating Lenders”). On May 21, 2004, the Company entered into an amendment to the Trust Agreement (the “Modified Trust”). The Modified Trust may secure up to an aggregate amount of US$40.0 million of indebtedness, which indebtedness could take the form of loans, bonds, or other extensions of credit. The assets of the Modified Trust currently include real estate properties and their corresponding mortgages, registered equipment and certain intellectual property (trademarks and brand names) (the “Trust Assets”) of the Subsidiaries. All other types of assets previously in the Trust have been released from the Trust by the Trustee. Under the terms of the Trust Agreement, as amended, the appraised value of the Trust Assets must, at all times, be equal to or greater than 125% of the aggregate amount of the indebtedness secured by the Trust. So long as this 125% threshold is met and subject to certain other conditions set forth in the Modified Trust, the Subsidiaries may solicit the Trustee for the release of some of the Trust Assets. The Trust Agreement, as amended, provides that additional lenders may execute and become subject to the terms of the Trust Agreement if the value of the Trust Assets continues to be equal to or greater than 125% of the aggregate amount of the indebtedness secured by the Trust.

As of September 30, 2004, the Company had also pledged property, plant and equipment valued at approximately $5.3 million to secure the Subsidiaries’ obligations with respect to approximately $3.2 million in indebtedness owed to the Participating Lenders, which indebtedness is not secured by the Modified Trust. In addition, the Company has pledged property, plant and equipment valued at approximately $532,000 as of September 30, 2004 to secure the Subsidiaries’ obligations with respect to approximately $479,000 in indebtedness owed to a lender who was not a signatory to the Modified Trust.

Each of the Company’s business segments utilize most of the Company’s primary properties. The following contains descriptions of the principal facilities:

Production Area

The production area includes the following divisions: Animal Feed Production, Breeder, Hatcheries, Grow-out division, Broiler Processing, and By-products Processing. The production capacities are described below:

The Company owns four processing plants for its Animal Feed division. These plants perform activities that include grinding grains, mixing flour and packing different types of animal feed products. The facilities have a maximum capacity to produce an aggregate of approximately 397,000 tons of animal feed annually. On December 27, 2004, the Company purchased the animal feed concentrate segment of Indavinsa and, in connection with such purchase, acquired Indavinsa’s animal feed production facilities. The Indavinsa animal feed facilities have a maximum capacity to produce an aggregate of approximately 48,000 tons of animal feed annually. The assets acquired from Indavinsa also include 10 silos that have a capacity to store approximately 21,000 tons of grain. The Breeder division facilities are composed of galleys, which have a maximum capacity to produce approximately 58 million fertile eggs annually. The breeder hens are imported from the United States when they are one-day old. The Hatchery division consists of two incubation plants. The plants’ incubation and hatching halls can be expanded to increase production. The Company expects that these plants will fulfill production needs for many years. The incubation facilities produce approximately 43 million chicks annually. One day after birth, chicks are transferred to the Grow-out division. During this stage, the chicks receive three types of diet, according to growth requirements.

The growth stage lasts approximately 43 to 45 days. The Company owns 15 grow-out farms, and leases 142 contracted grow-out farms where owners of these farms provide service needed to grow the chicks. The Company transfers these farmers’ one-day old chicks, animal feed, and provides veterinary services, technical advice and other services. Once chicks reach a target weight, the Company pays the farmers an agreed upon fee for the chickens. The facilities’ production capacity is approximately 35 million chickens annually, which includes grow-out farmers. The Broiler division is divided into slaughter and pluck, coolers and retailers, packing and cuts and sub-products processes. The facilities have a maximum production capacity of approximately 60 million kilograms annually.

The By-products Processing division is divided into sausage, formed, packaging, oven and cooking areas. The facilities production capacity is approximately 11.2 million kilograms annually.

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Distribution

Distribution is conducted through retail outlets in Costa Rica, the majority of which are leased. There are a total of 25 restaurants, the majority of which are also leased.

Administrative Area

Administrative offices of the Company are located in La Ribera de Belen, Heredia, Costa Rica. The staff, administrative, marketing and financial headquarters of the Subsidiaries are located in La Ribera de Belen, Heredia, Costa Rica.

ITEM 3. LEGAL PROCEEDINGS

Pipasa was one of two defendants in a lawsuit brought in Costa Rica, pursuant to which the plaintiff in such action was seeking damages in an amount equal to $3.6 million. The other defendant in the litigation was Aero Costa Rica, S.A. (“Aero”), a corporation that, prior to entering into a receivership, was wholly owned by Mr. Chaves, the Company’s Chief Executive Officer.

In connection with this pending lawsuit, the plaintiff also brought suit against Pipasa in the State of California and the State of Florida. The California lawsuit was dismissed without prejudice.

On December 29, 2003, Pipasa entered into a settlement agreement (the “Settlement Agreement”) with Polaris Holding Company Polaris pursuant to which Mr. Chaves provided Polaris with a one-time payment in the amount of $1,950,000 (the “Settlement Amount”) in exchange for Polaris’ agreement to dismiss any and all litigation instituted against Pipasa and release any and all claims which they have or may have against Pipasa in connection with the litigation, except for any claim that may arise in connection with the Indemnification Obligation (as defined below). In addition, Polaris has agreed to release its security interest in the certain collateral, which is currently valued at approximately $5 million. Mr. Chaves has entered into an agreement with the Company pursuant to which he has acknowledged and agreed that his payment of the Settlement Amount is neither an equity investment in the Company nor a loan to the Company.

Pipasa has attempted to secure the participation of Aero in the settlement but Aero has been relatively unresponsive. As of the date of the Settlement Agreement, Aero had not yet agreed to participate in the settlement.

Because Aero has not agreed to participate in the settlement, as a condition of the Settlement Agreement, Pipasa agreed to enter into an indemnification agreement with Polaris pursuant to which Pipasa has agreed to indemnify Polaris in the event that Aero initiates any claims against Polaris (the “Indemnification Obligation”). The parties have filed the definitive settlement documents with the courts of Costa Rica. On November 3, 2004, the Florida lawsuit was dismissed with prejudice.

In January 2004, the receiver of Aero filed an appeal with the Costa Rican court seeking Aero’s direct participation in the settlement. The Aero receiver’s appeal was denied by the court on February 5, 2004. However, pursuant to Costa Rican law, the Aero receiver exercised its right to appeal the court’s denial of its appeal. After the appeal was again denied, the Aero receiver, pursuant to Costa Rican law, filed an additional appeal in the Costa Rican Ad Quem Court against the court’s denial. This appeal is currently pending with the Ad Quem Court.

Except for the legal proceedings discussed above, no legal proceedings of a material nature, to which the Company or the subsidiaries are a party, exist or were pending as of the date of this report. Except for the legal proceedings disclosed above, the Company knows of no other legal proceedings of a material nature pending or threatened or judgments entered against any director or officer of the Company in his capacity as such.

The Company is involved in various other claims and legal actions arising in the ordinary course of business. In the opinion of the Company’s management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity.

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

None

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock has been listed on the American Stock Exchange (“AMEX”) under the symbol RCF since May 14, 1999 and prior to that date traded on the NASDAQ National market under the symbol RICA.

From January 21, 2003 to October 13, 2003, trading of the Company’s common stock on the AMEX was halted due to, among other things, the Company’s failure to file financial statements with the Securities and Exchange Commission and the AMEX that satisfied the AMEX’s continued listing standards. Following the Company’s submission of the appropriate financial statements and a compliance plan and discussions between the Company and the AMEX, the Company’s common stock resumed trading on the AMEX on October 13, 2003.

The price range per share, reflected in the table below, is the highest and lowest sale price for our stock as reported by the AMEX during each quarter of the last two fiscal years.

As of December 22, 2004, the Company had 12,811,469 shares of Common Stock outstanding and approximately 1,000 holders of record of such stock, and no shares of preferred stock were outstanding as of that date.

Dividends

The Company has never paid any dividends on its common stock. The Company does not anticipate paying cash dividends on its common stock in the foreseeable future based on its expected operating cash flow requirements (see Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources). The Nevada General Corporation Law prohibits the Company from paying dividends or otherwise distributing funds to its stockholders, except out of legally available funds. The declaration and payment of dividends on the Company’s common stock and the amount thereof will be dependent upon the Company’s results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by the Board of Directors. No assurance can be given that the Company will pay any dividends on common stock in the future.

Securities Authorized For Issuance Under Equity Compensation Plans

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On November 29, 2004, the Board of Directors of the Company granted, effective October 15, 2004 (the “Grant Date”), a total of 120,000 options (the “Director Options”) to purchase shares of the Company’s common stock to two of its current directors. In addition, on the same date, as consideration for past services to the Company, the Company granted 10,000 options (collectively with the Director Options, the “Options”) to purchase shares of the Company’s common stock to one of its former directors. The Options vested upon issuance and are exercisable at any time during the period (the “Exercise Period”) commencing on the three month (3^rd) anniversary of the Grant Date and terminating on the six month (6^th) anniversary of the Grant Date (the “Expiration Date”).

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data presented below should be read in conjunction with the consolidated financial statements and related notes, Management’s Discussion and Analysis of Financial Condition and Results of Operations and the other financial information included elsewhere in this Form 10-K. The data as of September 30, 2004 and 2003 and for the fiscal years ended September 30, 2004, 2003 and 2002, are derived from the Company’s audited consolidated financial statements for fiscal years 2004, 2003 and 2002 included elsewhere in this Form 10-K. The data as of September 30, 2002, 2001 and 2000 and for the fiscal years ended September 30, 2001 and 2000 is derived from the Company’s audited financial statements not included in this Form 10-K.

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

General

Management is responsible for preparing the Company’s consolidated financial statements and related information that appears in this Form 10-K. Management believes that the consolidated financial statements fairly reflect the form and substance of transactions and reasonably present the Company’s consolidated financial condition and results of operations in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Management has included in the Company’s consolidated financial statements amounts that are based on estimates and judgments, which it believes are reasonable under the circumstances. The Company maintains a system of internal accounting policies, procedures and controls intended to provide reasonable assurance, at the appropriate cost, that transactions are executed in accordance with the Company’s authorization and are properly recorded and reported in the consolidated financial statements, and that assets are adequately safeguarded.

During the fiscal year ended September 30, 2004, the Company’s operations were principally conducted through two, wholly owned Costa Rican corporations, Pipasa and As de Oros and their respective subsidiaries. Effective October 1, 2004, As de Oros merged with and into Pipasa (the “Merger”). Pursuant to the Merger and in accordance with Costa Rican law, all assets, liabilities, rights and obligations of As de Oros were transferred to and assumed by Pipasa. The Merger was accounted for as entities under common control, whereby Pipasa recognized the assets and liabilities of As de Oros that were merged at their book value as of the date of the Merger (i.e., there has been no step up in basis). In addition, the Company will continue to include at the consolidated level, the remaining goodwill that resulted from the Company’s initial acquisition of As de Oros, which acquisition was accounted for under the purchase method of accounting. Accordingly, the Merger will not have any effect on the consolidated financial statements of the Company. As of the date of the Merger, all of As de Oros’ issued preferred shares had been repurchased, and there was no minority interest outstanding in As de Oros.

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The Company is the largest poultry company in Costa Rica, and is among the largest producer and distributor of animal feed in Costa Rica. The Company, through its subsidiaries, also owns and operates a chain of quick service restaurants in Costa Rica operated under the name “Restaurantes As” and “Kokoroko”.

Seasonality

The Company has historically experienced and has come to expect seasonal fluctuations in net sales and results of operations. The Company has generally experienced higher sales and operating results in the months from October to January, which fall in the first and second quarters of each fiscal year. This variation is primarily due to holiday celebrations that occur during these periods in which Costa Ricans prepare traditional meals that include dishes with chicken as the main ingredient. The Company expects this seasonal trend to continue for the foreseeable future.

Fiscal Year 2004 compared to Fiscal Year 2003

For the year ended September 30, 2004, the Company generated a net loss applicable to common stockholders of $3,473,935 ($0.27 losses per share) compared to a net loss applicable to common stockholders of $930,396 ($0.07 losses per share) for the year ended September 30, 2003.

For the year ended September 30, 2004, Sales and Cost of Sales increased by 8.29% and 14.54%, respectively. During the 2004 fiscal year, the Company realized an increase in sales in each operating segment, especially sales in the animal feed, by-products, exports and other segments. The Company believes the overall increase in sales is primarily attributable to increased marketing efforts, higher sales prices and an improvement in distribution logistics. Although sales increased in each segment in fiscal year 2004, Management cannot assure that this trend will continue in the future.

The increase in the Cost of Sales was primarily the result of:

For fiscal year 2004, the cost of corn and soybean meal increased by approximately 17.60% and 46.42%, respectively, when compared to the cost of such products for fiscal year 2003. Cost of Sales as a percentage of Sales was higher in fiscal 2004 (75.62%) than fiscal 2003 primarily due to the increased cost of imported raw material.

In July 2004, the Company entered into forward contracts with certain of its corn suppliers for the purchase of approximately $6.9 million of corn. Deliveries under such corn forwards contracts commenced in November 2004. The Company estimates that this supply of corn will satisfy the Company’s needs for approximately four months. Pursuant to these corn forwards contracts, the Company is generally required to make payments under the contract fifteen days prior to the date of shipment. The Company expects to make such payment with funds from operations or short-term financing.

In addition, in July 2004, the Company entered into forward contracts with INOLASA for the purchase of approximately $5.24 million of soybean meal. Deliveries under such soybean meal forwards contracts commenced in November 2004. The Company estimates that this supply of soybean meal will satisfy the Company’s needs for approximately four months. Payments under these soybean meal forward contracts are due 22 days after receipt of the soybean meal. The Company expects to pay outstanding invoices with funds from operations or short-term financing.

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The following describes the performance by segment (in millions of U.S. dollars) for following fiscal years ending September 30, 2004, 2003 and 2002:

The Company uses segment profit (loss) margin information to analyze segment performance, which is defined as the ratio between the income or loss from operations associated with a segment and the net sales associated with the subject segment.

Broiler sales increased by 0.5% for fiscal year 2004 when compared to fiscal year 2003, primarily due to an increase in the volume of broiler sales by approximately 2.3%. The profit margin for this segment decreased from 20.7% in fiscal year 2003 to 12.7% in fiscal year 2004, primarily due to an increase in the cost of imported raw material. During the third and fourth quarter of fiscal year 2004, the volume of broiler sales increased by 4.4% and 12.0%, respectively, as compared to the comparable quarters of fiscal year 2003. Management believes that the increase in the volume of broiler sales during the most recent two quarters is mainly attributable to an improvement in distribution logistics, including, but not limited to, variation in the routes of delivery trucks to increase efficiency, decreased frequency of customer visits and consolidation of the clientele of Pipasa and As de Oros in addition to marketing efforts emphasizing the Pipasa^™ brand name.

Animal feed sales increased by 10.7% for fiscal year 2004 when compared to fiscal year 2003, primarily due to an increase in sales prices and an increase in the percentage of sales of higher priced products. Sales volume did not vary significantly, increasing by 0.30%. However, during the third and fourth quarter of fiscal year 2004, the volume of animal feed sales increased by 5.6% and 18.1%, respectively, as compared to the comparable quarters of fiscal year 2003. The profit margin for this segment decreased from 8.6% in fiscal year 2003 to 6.5% in fiscal year 2004, primarily due to an increase in the cost of imported raw material, which was partially offset by an increase in sales prices and variations in the sales mix to more profitable products.

By-products sales increased by 9.5% for fiscal year 2004 when compared with fiscal year 2003, mainly due to a 12.3% increase in the volume of by-products sales. The increase in the volume of by-products sales is mainly attributable to an improvement in distributions logistics. During the second, third and fourth quarter of fiscal year 2004, the volume of by-product sales increased by 15.8%, 30.0% and 48.1%, respectively, as compared to the comparable quarters of fiscal year 2003.

The profit margin for the by-products segment increased from 7.5% in fiscal year 2003 to 12.4% in fiscal year 2004, mainly due to an increase in the sale of products with higher profit margins and the elimination of rental costs for by-product processing facilities following the successful reconstruction of the Company’s by-product processing plant following a fire in February 2003, partially offset by an increase in the cost of imported raw material.

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Export sales increased by 39.7% for fiscal year 2004 when compared to fiscal year 2003, mainly due to an increase in the volume of sales of pet food products in the countries to which such products are exported. In addition, in November 2003, the government of Honduras lifted its restriction on the import of poultry-related products which had been in place since March 2002 and the Company again initiated exporting poultry-related products to Honduras. During the first, second, third and fourth quarter of fiscal year 2004, export sales increased by 20.0%, 80.2%, 58.2% and 11.4%, respectively, as compared to the comparable quarters of fiscal year 2003. Profit margin in the export segment decreased from 18.6% for fiscal year 2003 to 16.0% for fiscal year 2004, mainly due to an increase in the cost of imported raw material.

Quick service sales increased by 3.3% for fiscal year 2004 when compared to fiscal year 2003 mainly due to increases in sales prices and an expansion of the Company’s marketing efforts for this segment. In addition, the Company closed certain restaurants with negative profit margins and relocated certain of its quick service restaurants to larger, more populated areas. During the first, second and fourth quarter of fiscal year 2004, quick service sales increased by 0.1%, 16.5%, and 2.8%, respectively, as compared to the comparable quarters of fiscal year 2003. This segment’s profit margin increased from 2.4% for fiscal year 2003 to 7.0% for fiscal year 2004, primarily as a result of increases in the sales prices for quick service products and variations in the sales mix to more profitable products.

Sales for the other products segment increased by 27.4% for fiscal year 2004 when compared to fiscal year 2003, mainly due to an increase in the sale of commercial eggs. During the second, third and fourth quarter of fiscal year 2004, sales of other products increased by 7.9%, 12.4%, and 19.9%, respectively, as compared to the comparable quarters of fiscal year 2003. This segment’s profit increased from –0.8% to 4.4%, primarily due to an increase in sales prices, partially offset by an increase in the cost of imported raw material.

Operating expenses decreased by 3.8% or $1.16 million for fiscal year 2004 when compared to fiscal year 2003. Operating expenses represented 22.2% and 25.0% of net sales for fiscal year 2004 and 2003, respectively.

For fiscal year 2004, selling expenses increased by 1.3% or $250,438 when compared to fiscal year 2003. This increase is mainly due to an increase in payroll and payroll related charges and an increase in advertising expenses. The increase in such expenses was offset by a reduction in the Company’s vehicle leasing expenditures as a result of the company’s purchase of distribution trucks and a decrease in expenditures related to the renting of frozen storage containers as a result of a decrease in the Company’s broiler inventory levels.

For fiscal year 2004, general and administrative expenses decreased by 14.8% or $1,907,935 when compared to fiscal year 2003. This decrease in general and administrative expenses is primarily due to a reduction in the Company’s rental expenses, a decrease in payroll and payroll related charges and a decrease in depreciation and amortization expenses.

As part of payroll related charges to the government of Costa Rica, the subsidiaries of the Company, are required to pay to the Instituto Nacional de Aprendizaje (“INA”), a Costa Rican Government institution, a monthly charge (the “INA Charge”) which is calculated by multiplying the subsidiaries’ total payroll by a percentage determined based upon the classification given to the Company’s operational activities (the “Percentage”). Since 1993, pursuant to a law enacted by the Costa Rican Congress, the Ministry of Agriculture has classified the Company’s operational activities as agricultural in nature. However, in December 2003, the Company received an administrative petition from the INA (the “INA Petition”), indicating that, in accordance with article 19 of an administrative decree of the INA (the “Administrative Decree”), for purposes of determining the Percentage, the INA believes the Company’s operational activities should be classified as industrial in nature rather than agricultural in nature, and accordingly, the Company should have been applying the Percentage applicable to industrial companies when calculating the INA Charge, instead of the Percentage applicable to agricultural companies. The applicable Percentage for agricultural companies is 0.5% while the applicable Percentage for industrial companies is 1.5% (2.0% before March 2001).

The Company has objected to the INA Petition and is currently considering filing a claim with the Costa Rican Constitutional Supreme Court (the “Court”) challenging the constitutionality of the article 19 of the Administrative Decree. As there can be no assurances regarding the outcome of any claim the Company may file with the Court, during the three months ended March 31, 2004, the Company recorded a provision in the amount of $416,380 which the Company believed to be a reasonable estimate of the amount the Company would be required to pay in the event it was required to comply with the INA Petition based on an analysis of the subsidiaries’ payroll. As of September 30, 2004, the Company reassessed the provision for the INA Charge and increased such provision to $496,366. However, the Company believes that the outcome of the objection to the INA Petition may range from no requirement to pay the INA Charge to a requirement to pay the INA up to $1 million in the event of an unfavorable outcome. In addition to the provision, the Company also recorded a deferred tax benefit in the amount of $154,319 related to the INA Charge.

15

Other expenses increased by 17.5% for fiscal year 2004, when compared to fiscal year 2003, primarily as a result of a decrease in interest income. In addition, during the 2003 fiscal year, the Company received approximately $450,000 of cash dividends, included in net miscellaneous income, from its 10% ownership interest in INOLASA, the only supplier of soybean meal in Costa Rica. The Company did not receive any dividends from its investment in INOLASA in the 2004 fiscal year.

The Company’s income tax benefit was $132,644 for fiscal year 2004, compared to an expense of $206,475 for fiscal year 2003. The tax benefit for fiscal year 2004 is primarily the result of an increase in deferred income tax benefit related to the provision recorded for the INA Charge ($154,319) and, the decrease in the deferred tax liability, resulting from differences in the book and tax basis on certain property, plant and equipment derived from the acquisition of As de Oros in 1998 ($154,525), offset by an income tax expense of subsidiaries of the Company ($179,268). Effective tax rates for fiscal year 2004 and 2003 were 4.20% and 39.44%, respectively.

Fiscal Year 2003 compared to Fiscal Year 2002

For the year ended September 30, 2003 the Company generated a net loss applicable to common stockholders of $930,396 ($0.07 losses per share) compared to the generation of net income applicable to common stockholders of $2,917,291 ($0.23 earnings per share) for the year ended September 30, 2002. For fiscal year 2003, Sales decreased by 2.1%, when compared to fiscal year 2002, mainly due to decreases in the sales of products in the broiler, by-products and exports segments, which was partly offset by an increase in sales of products in the animal feed and quick service segments. Cost of Sales increased by 4.5%, mainly due to an increase in the cost of imported raw material, such as corn and soybean meal, and the increased costs associated with the renting of facilities to permit continued production of by-products following the fire to the Company’s by-product processing plant in February 2003.

Broiler sales decreased by 16.5%, mainly due to a 13.3% decrease in volume. The Company believes this decrease is mainly due to an increase in domestic competition. The profit margin of this segment decreased from 24.9% to a 21.2%, mainly due to an increase in the cost of imported raw material.

Animal feed sales increased by 21.2% for fiscal year 2003 when compared to fiscal year 2002, which reflects a relative increase in volume of 20.9%. The Company believes that the increase in volume is mainly attributable to an increase in the number of commercial animal feed customers and an increase in the sales of aquaculture and live-stock feed. In addition, the Company’s sale of pet food products increased as a result of intensified marketing efforts and the addition of new distribution channels. Segment profit decreased from 13.1% for fiscal year 2002 to 8.6% for fiscal year 2003, mainly due to an increase in the costs of imported raw material and variations in the sales mix.

By-product sales decreased by 1.1% for fiscal year 2003 when compared to fiscal year 2002, mainly due to a relative decrease in production volume of 0.2% and a decrease in the sales of higher priced products. The increased costs associated with the renting of three by-product production facilities when the Company’s by-products processing plant was being reconstructed following a fire in February 2003, and the increase in the costs of imported raw material a decrease in the segment’s profit margin from 18.1% for fiscal year 2002 to 5.0% for fiscal year 2003.

Export sales decreased by 6.2% for fiscal year 2003 when compared to fiscal year 2002, mainly due to the discontinuation of broiler exports to Honduras as a result of the Honduran government’s restriction as of March 2002 of the import of poultry related products, a decrease in the export of by-products as a result of the fire in the Company’s by-product processing plant and a decrease in the number of aquaculture feed customers. This decrease was partially offset by an increase in the sale of pet foods. However, in November 2003, the Honduras government lifted its restriction on the import of poultry-related products. Accordingly, the Company has once again initiated exporting poultry-related products to Honduras. Profit margin increased from 10.1% for fiscal year 2002 to 18.6% for fiscal year 2003, mainly due to a variation in the product mix to more profitable products.

Quick service sales increased by 33.2% for fiscal year 2003 when compared to fiscal year 2002, mainly due to the Company’s sales price campaign. Profit margin increased from 1.1% to 2.4%, primarily due to the adoption of cost efficiency measures.

Sales for the other products segment did not vary significantly, decreasing by 1.8% for fiscal year 2003 when compared to fiscal year 2002. The profit margin in this segment decreased from 1.5% for fiscal year 2002 to -0.8% for fiscal year 2003, mainly due to an increase in the cost of raw materials.

For fiscal 2003, general and administrative expenses decreased by $1.20 million or 8.53% when compared to fiscal year 2002 mainly due to Company’s effort to improve efficiencies and adopt cost measures. For fiscal year 2003, selling expenses did not vary significantly, decreasing by $121,025 or 0.63% when compared to fiscal year 2002. Operating expenses represented 24.98% and 25.46% of net sales for fiscal years 2003 and 2002, respectively.

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For fiscal year 2003, other expenses decreased by 6.97%. This decrease was primarily the result of a decrease in interest expenses and foreign exchange loss, mainly attributable to a decrease in the Company’s average indebtedness and a decrease in the related average interest rate. The Company also recognized as an extraordinary item a gain in the amount of $304,760, which gain is the result of the Company’s receipt of insurance proceeds in excess of the book value of equipment and building facilities damaged in the by-product plant fire.

The Company’s income tax expense was $206,475 for fiscal year 2003, compared to $1,041,596 for fiscal year 2002. Effective rates for fiscal years 2003 and 2002 were 39.44% and 24.92%, respectively. The decrease is mainly due to a decrease in taxable income.

Financial Condition

As of September 30, 2004, the Company had approximately $1.6 million in cash and cash equivalents. As of September 30, 2004 and September 30, 2003, the Company had a working capital surplus of approximately $5.6 million and a working capital deficit of approximately $21.0 million, respectively. The current ratios were 1.23 and 0.66 as of September 30, 2004 and 2003, respectively.

Cash used by operating activities for fiscal year 2004 amounted to approximately $6.2 million compared to cash provided by operating activities of approximately $484,377 in fiscal year 2003. The increase in cash used by operating activities is primarily the result of:

Cash used for Inventory amounted to $4.7 million and $3.5 million for fiscal years 2004 and 2003, respectively. The increase in the use of cash for Inventory for fiscal year 2004 compared to fiscal year 2003 was primarily due to an increase in the level of in-transit raw material ($1.1 million), an increase in the purchase of live poultry ($4.1 million) and an increase in in-process material ($786,000), which increases were partially offset by decreases in the level of finished products ($547,000) and raw materials ($760,000). The reduction in accounts payable was primarily the result of targeted efforts by management of the Company to reduce the Company’s short-term liabilities.

The increase in cash used by operating activities was partially offset by a decrease in the rate of satisfying notes and account receivables ($3.8 million).

Depreciation and amortization was a large, non-cash expense for fiscal year 2004 ($4.4 million) and 2003 ($4.5 million). Production poultry for the fiscal years ended 2004 and 2003 amounted to $3.7 million and $3.5 million, respectively, which represent the amortization of the breeder and layer hens costs during their productive life.

Cash provided by investing activities was approximately $5.0 million compared to cash used by investing activities of $6.8 million for fiscal year 2004 and 2003, respectively. The Company’s increase in cash provided by investing activities is primarily due to the repayment by Calixto Chaves, the Chief Executive Officer, of his aggregate outstanding indebtedness to the Company ($6.9 million), offset primarily by the liquidation of certain short term investments ($2.4 million), liquidation of certain long-term insurance investments ($572,000) and a decrease in the rate of acquisition of other assets ($2.3 million). This decreased utilization of cash from investing activities was partially offset by a decrease in the cash provided by sales of assets ($461,000). For fiscal year 2004, the use of cash for property, plant and equipment ($5.2 million) was primarily related to the Company’s purchase of production equipment and delivery vehicle fleet.

In the fiscal year ended September 30, 2003, the Company invested approximately $1.4 million in connection with the potential acquisition from Port Ventures, S.A. (“Port Ventures”) of 51% of the issued and outstanding shares of capital stock of Logistica de Granos, S.A (“Logistica”), a 19% shareholder of Sociedad Portuaria de Caldera, S.A. and Sociedad Portuaria Granelera de Caldera, S.A. (collectively, the “Port Companies”), two port companies that are seeking to acquire concessions (the “Concessions”) being granted by the Government of Costa Rica to refurbish and operate Puerto Caldera, a major seaport located on the Pacific coast of Costa Rica and considered by the Company as strategic to its raw material purchases. If and when the acquisition is consummated, the Company anticipates making an additional investment of approximately $1.1 million.

The Company believes it will need at a minimum funds of approximately $6.0 million for investment activities during the remainder of fiscal year 2004, in addition to $1.1 million of the Company’s remaining projected investment in Logistica.

Cash used by financing activities amounted to approximately $1.3 million and approximately $6.1 million for fiscal years 2004 and 2003, respectively. The cash provided by financing activities was primarily generated by short-term financings ($51.2 million) and long-term financings ($42.1 million). These funds were principally used to refinance short-term financings ($78.3 million), to refinance and repay long-term financings ($16.2 million) and to fund the Company’s operations.

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In addition, during fiscal year 2004, Pipasa and As de Oros repurchased an aggregate of 297,831 and 255,719 of their respective preferred shares for a purchase price of $687,446 and $365,010, respectively. This transaction is presented under the Supplemental schedule of non-cash activities in the Statements of Cash Flows. See Notes 9 and 10 of the Notes to Consolidated Financial Statements for further discussion.

Debt Utilization

The Company’s obligations under short-term and long-term debt and operating leases as of September 30, 2004 are as follows:

The Company projects that it will need to satisfy at least $25.2 million of short-term debt, long-term debt, purchase commitments, consulting agreements and operating lease payments within the fiscal year ended September 30, 2005. The Company also projects that it will seek to acquire an additional $6.0 million of property, plant and equipment within fiscal 2005, the use of which equipment may be secured by purchase or lease.

In July 2004, the Company entered into forward contracts with certain of its corn suppliers for the purchase of approximately $6.9 million of corn at the prevailing market price on the dates the contracts were entered into. Deliveries under such contracts commenced in November 2004. The Company estimates that this supply will satisfy the Company’s needs for approximately four months. Pursuant to these contracts for corn, the Company is generally required to make payments under the contract fifteen days prior to the date of shipment. The Company expects to finance such payment with funds from operations or short-term financing.

In addition, in July 2004, the Company entered into a forward contract with INOLASA for the purchase of approximately $5.24 million of soybean meal at the prevailing market price on the dates the contracts were entered into. Deliveries under such contracts commenced in November 2004. The Company estimates that this supply will satisfy the Company’s needs for approximately four months. Payment under this forward contract is due 22 days after receipt of the soybean meal. The Company expects to finance such payment with funds from operations or short-term financing.

Pursuant to a Consulting Agreement, dated as of June 1, 2003, between Grupo SAMA Consolidado, S.A., a Panamanian corporation (“SAMA”), and the Company (the “Consulting Agreement”), various employees of SAMA began providing the Company with financial and strategic advisory services with respect to a variety of different matters related to the restructuring of the Company’s indebtedness. The Consulting Agreement has a three year term. Pursuant to the Consulting Agreement, the Company shall comensate SAMA at the rate of up to $120,000 (the “Maximum Compensation Rate”) for services provided pursuant to the Consulting Agreement. In July 2004, the Maximum Compensation Rate was reduced to $75,000 per month. For fiscal year ended September 30, 2004, the Company compensated SAMA an aggregate of $864,500 for services provided under the Consulting Agreement. See Item 13 for further discussion on the Consulting Agreement.

Debt Restructure

During fiscal year 2004, the Company restructured a significant portion of its debt obligations, significantly decreasing its outstanding short-term indebtedness and correspondingly increasing its outstanding long-term indebtedness (the “Debt Restructuring”). As of September 30, 2004, the Company had approximately $9.9 million and $36.6 million of short term debt and long term debt (including current portion) respectively, in contrast to approximately $36.5 million of short term debt and $10.7 million of long term debt (including current portion) outstanding as of September 30, 2003.

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As of September 30, 2004, the Company’s aggregate outstanding indebtedness, including debts to related parties, totaled approximately $46.9 million. As of September 30, 2004, approximately $43.0 million (the “Aggregate Participating Lenders’ Indebtedness”) of this $46.9 million is owed to four lenders: Banco Internacional de Costa Rica (“BICSA”), Banco Agricola de Cartago (“Agricola”), Banco de Costa Rica (“BCR”) and Banco Interfin (“Interfin”) (collectively, the “Participating Lenders”) as follows (in millions of US$):

As of September 30, 2004, approximately $16.5 million of the approximately $43.0 million of Aggregate Participating Lenders’ Indebtedness was secured by a trust (the “Trust”) formed by the Company to which the Company contributed or pledged substantially all of the assets of the Company’s wholly-owned subsidiaries (the “Subsidiaries”) in accordance with the terms of a trust agreement entered into by the Company in September 2003 (the “Trust Agreement”). The Trust Agreement was amended on May 21, 2004 (as discussed in greater detail below). Of the approximately $26.5 million of Aggregate Participating Lenders’ Indebtedness that is not secured by the Trust (the “Non-Trust Indebtedness”), (i) approximately $23.3 million of such Non-Trust Indebtedness, owed to BICSA, is unsecured and (ii) approximately $3.2 million of such Non-Trust Indebtedness, owed to BCR and Agricola, is secured by property outside of the Trust, which property had an aggregate market value of approximately $5.3 million as of September 30, 2004.

Of the Company’s aggregate outstanding indebtedness, including debts to related parties, of approximately $46.9 million as of September 30, 2004, approximately $3.9 million was owed to certain of the Company’s lenders who were not signatories to the Trust Agreement (the “Non-Participating Lenders”). In addition, as of September 30, 2004, one of the Non-Participating Lenders, Transamerican Bank, holding liens aggregating to approximately $479,000 was collateralized with property with an estimated fair market value of approximately $532,000.

Outstanding BICSA Indebtedness

As of September 30, 2004, the Company’s outstanding indebtedness to BICSA totaled approximately $26.7 million (the “Aggregate BICSA Indebtedness”). Approximately $8.6 million of the Aggregate BICSA Indebtedness was short-term indebtedness (the “Short-term indebtedness”) payable to BICSA pursuant to fourteen letters of credit, maturing between October 19, 2004 and March 21, 2005. As of September 30, 2004, the Company had also borrowed approximately $18.1 million of long-term debt from BICSA, pursuant to a promissory note that bears interest at a rate of 8.5%, maturing in March 30, 2006 (the “Long-Term BICSA Note”).

As of September 30, 2004, approximately $3.4 million of the Aggregate BICSA Indebtedness was secured by the Trust. Commencing in September 2003, Tendedora, S.A. (“Tenedora”), the parent company of the Company’s majority shareholder, Avicola Campesinos, Inc., and Grupo SAMA, S.A. (“SAMA”) began providing guarantees (the “Tenedora Guarantees” and the “SAMA Guarantees”, respectively) for certain of the indebtedness that the Company obtained from BICSA. As of September 30, 2003, Tenedora and SAMA had guaranteed approximately $1.7 million and $657,000, respectively, of the Company’s outstanding indebtedness to BICSA. Both Tenedora and SAMA continued to provide guarantee services to the Company throughout the 2004 fiscal year. During the 2004 fiscal year, the weighted average amount of the Tenedora Guarantees and the SAMA Guarantees was approximately $6.4 million and $3.6 million, respectively. As of September 30, 2004, the outstanding amount of the Tenedora Guarantees and the SAMA Guarantees was $8.6 million and $6.4 million, respectively. During the 2004 fiscal year, certain of the BICSA indebtedness secured by the Tenedora Guarantees was also secured by the Trust and the SAMA Guarantees and all of the BICSA indebtedness secured by the SAMA Guarantees was also secured by the Trust and the Tendora Guarantees. SAMA ceased providing guarantee services to the Company on September 30, 2004; however, Tenedora has continued to provide guarantee services to the Company during the first quarter of 2005.

Neither Tenedora nor SAMA received any compensation for providing guarantees for the Tenedora Guarantees or the SAMA Guarantees, respectively and neither Tenedora nor SAMA has any contractual obligation to provide guarantee services to the Company in the future. There can be no assurances that Tenedora will continue providing guarantee services to the Company, that Tenedora will continue to provide guarantee services to the Company without compensation, that the Company will be able to locate alternative sources of financing without Tenedora’s provision of guarantees or that the Company will be able to locate another person or entity willing to provide guarantee services with or without compensation.

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On October 14, 2004, the Company entered into an agreement with BICSA to restructure approximately $7.5 million of the Aggregate BICSA Indebtedness (the “Restructured BICSA Indebtedness”). Pursuant to this agreement, (i) the Company refinanced $4.0 million of the Long-Term BICSA Note and such refinanced indebtedness, denominated in U.S. dollars, bears interest at a rate of 7.5%, with interest and principal payable every trimester and the last payment due in April 2009 and (ii) the Company refinanced $3.5 million of the Short-Term Indebtedness with a $3.5 million revolving line of credit, denominated in U.S. dollars and bearing interest of 6.75%. The line of credit will expire on April 30, 2005. Any borrowings made on the line of credit will be payable in six equal monthly installments, with the first payment commencing in the month after the borrowing. As of November 30, 2004, the Company had utilized $3.5 million of the credit facility. The aggregate Restructured BICSA Indebtedness is secured by the Trust.

Outstanding BCR Indebtedness

As of September 30, 2004, the Company’s outstanding indebtedness to BCR totaled approximately $9.1 million (the “Aggregate BCR Indebtedness”). Of the Aggregate BCR Indebtedness, approximately $2.2 million, denominated in colones and bearing interest at the rate of 17.75%, is payable on a trimester basis beginning in June 2005. This $2.2 million of the Aggregate BCR Indebtedness is due in June 2011 and is collateralized with property with an estimated fair market value of $3.3 million.

Of the Aggregate BCR Indebtedness, approximately $5.7 million, denominated in colones and bearing interest at the rate of 18%, is payable on a trimester basis beginning in August 2005. This $5.7 million of the Aggregate BCR Indebtedness is due in August 2011 and is secured by the Trust.

Of the Aggregate BCR Indebtedness, approximately $1.3 million, denominated in colones and bearing interest at the rate of 18.25%, is payable on a trimester basis beginning in September 2004. This $1.3 million of the Aggregate BCR Indebtedness is due in September 2009 and is secured by the Trust.

Outstanding Interfin Indebtedness

As of September 30, 2004, the Company’s outstanding indebtedness to Interfin totaled approximately $5.7 million (the “Aggregate Interfin Indebtedness”). Of the Aggregate Interfin Indebtedness, (i) $2.9 million of such indebtedness, denominated in U.S. dollars, bears interest an annual rate of 6.5% and (ii) $2.8 million of such indebtedness, denominated in Costa Rican colones, bears interest at an annual rate of 17.5%. Interest on the Aggregate Interfin Indebtedness will be payable on a trimester basis. The aggregate principal amount of the Aggregate Interfin Indebtedness plus all accrued interest will be due on May 21, 2009. As of September 30, 2004, the Aggregate Interfin Indebtedness was secured by the Trust.

Outstanding Agricola Indebtedness

As of September 30, 2004, the Company’s outstanding indebtedness to Agricola totaled approximately $1.5 million (the “Aggregate Agricola Indebtedness”). The Aggregate Agricola Indebtedness, denominated in colones, bears interest at the rate of 17.5%.

Interest and principal amount on the Aggregate Agricola Indebtedness is payable on a trimester basis. The final principal amount of the Agricola Indebtedness plus all accrued interest will be due in May 2009. As of September 30, 2004, $1.1 million of the Aggregate Agricola Indebtedness was secured by property valued at $1.9 million and approximately $400,000 was secured by the Trust.

Trust Agreement

As part of the Debt Restructuring, on May 21, 2004, the Company entered into an amendment to the Trust Agreement (the “Trust Agreement Amendment”). The Trust Agreement Amendment modifies the Trust to reflect the current Participating Lenders: BICSA, Interfin, Agricola and BCR. Additionally, the Trust Agreement Amendment modifies certain other provisions of the Trust, some of which are described below. The Trust, as modified by the Trust Agreement Amendment, is hereinafter referred to as the “Modified Trust”.

The Modified Trust may secure up to an aggregate amount of US$40.0 million of indebtedness, which indebtedness could take the form of loans, bonds, or other extensions of credit.

The Trust Agreement Amendment provides for a new Trustee, Banco Improsa, S.A. The Trust Agreement Amendment further modifies the Trust by granting certain rights to, as well as imposing certain obligations upon the Trustee, including granting to the Trustee the same rights as a creditor with regards to any mortgages transferred to the Trust and endorsed to the Trustee.

The assets of the Modified Trust currently include real estate properties and their corresponding mortgages, registered equipment and certain intellectual property (trademarks and brand names) of the Subsidiaries. All other types of assets currently in the Trust have been released from the Trust by the Trustee. However, the Subsidiaries may transfer new assets to the Modified Trust in order to increase the value of the Trust Assets.

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The market value of the Trust Assets was determined by independent appraisers, pursuant to their inclusion in the Trust Agreement. The independent appraisers reported directly to the Participating Lenders and Trustee. The final value assigned to each of the Trust Assets was approved by each of the Participating Lenders and Trustee (the “Trust Assets Value”). The Trust Assets Value is comprised of (i) real estate properties, including building and facilities ($18.7 million); (ii) Trademarks ($10.9 million); (iii) Machinery ($10.3 million); and (iii) Certificate of Deposit ($89,489). The Trust Assets Value was calculated in colones currency.

The Trust Agreement Amendment modifies the Trust to require that the total value of the Trust Assets be, at all times, equal to or greater than 125% of the aggregate amount of the total indebtedness secured by the Trust (which, as mentioned above, cannot exceed the aggregate amount of US$40.0 million). So long as this 125% threshold is met and subject to certain other conditions set forth in the Modified Trust, the Subsidiaries may solicit the Trustee for the release of some of the Trust Assets.

The failure to maintain the 125% threshold, on the other hand, is grounds for the foreclosure and sale of the Trust Assets. Upon such an occurrence or the occurrence of any default of any credit agreement between a Principal Beneficiary and a Subsidiary, the Trustee may dispose of the Trust Assets in accordance with the terms and conditions and following the procedures set forth in the Trust Agreement, as amended by the Trust Agreement Amendment.

Pursuant to the terms of the Modified Trust, each of the Subsidiaries has agreed to certain negative covenants. For instance, without the prior written consent of the Board of Beneficiaries (as defined below), the Subsidiaries have agreed not to (i) distribute any annual dividends to its shareholders unless (A) its total debt to equity ratio is less than 60% and (B) the amount of the annual dividends is, in the aggregate, equal to or less than 50% of its profit for that year; (ii) make any change in its stock ownership; and (iii) make any “insider loans”. The Trust Agreement Amendment does permit the Subsidiaries to make loans of up to $2.5 million annually to the Company upon certain terms and conditions.

The Modified Trust requires that the Subsidiaries, with certain exceptions, (i) maintain an amount of paid-in share capital equal to or greater than its stated share capital and (ii) maintain a current ratio, defined as a ratio of current assets to short term liabilities, equal to or greater than 1.3.

In accordance with the Trust Agreement Amendment, a board of beneficiaries has been established to represent and protect the rights of the Participating Lenders under the Modified Trust (the “Board of Beneficiaries”). The Board of Beneficiaries is comprised of one representative of each of BICSA, Agricola, Interfin, BCR, and, in the event the Company issues certain debt securities, Sama Puesto de Bolsa S.A. The board will have certain rights vis-à-vis the Company and the Trustee including, without limitation, the right to receive and review certain financial information provided by the Subsidiaries; notify the Participating Lenders of a situation that might impair the Trust Assets; appoint a replacement Trustee (from three candidates chosen by the Subsidiaries); instruct the Trustee to cancel certain mortgages and other liens over the Trust Assets or to release certain Trust Assets; and represent the Participating Lenders in certain decisions, in each case in accordance with the conditions of the Modified Trust and applicable law. All decisions of the Board of Beneficiaries will be made upon a majority vote of its members, with the President of the Board of Beneficiaries having a tie-breaking vote.

All provisions of the Trust Agreement and the Trust not modified by the Trust Agreement Amendment are anticipated to remain unchanged.

The Trust Agreement Amendment provides that the Trust will terminate upon the performance by the Subsidiaries of all of their obligations under the credit agreements between the Participating Lenders and the Subsidiaries, including the repayment of all of the outstanding indebtedness owed to the Participating Lenders.

Short-term debt

As of September 30, 2004 the Company had issued short-term promissory notes with respect to an aggregate of approximately $9.9 million primarily to 2 lenders. These notes payable consist of the following:

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The Company’s notes payable primarily originate from bank loans and are mainly utilized to support operations of the Company. As of September 30, 2004, of the $9.9 million of short-term debt, approximately $8.6 million was owed to BICSA. See the section above entitled “Outstanding BICSA Indebtedness” for more information regarding the BICSA Indebtedness. As of September 30, 2004, of the $9.9 million of short-term debt, approximately $1.1 million of debt was owed to Banco Laffisse, which debt was secured by $1.2 million of the Company’s accounts receivable, and the remaining approximate $200,000 of unsecured debt was owed to seven other lenders. Notes payable are generally due from October 2004 through March 2005 and bear annual interest rates ranging from 5.0% to 5.5% for notes denominated in dollars and from 19.75% to 22.75% for notes denominated in colones. Average interest rates as of September 30, 2004 and 2003 were 6.18% and 7.83% for loans in US dollar, respectively, and 22.58% and 23.24% for loans in Colones, respectively. See the section above entitled “Debt Restructure” for more information regarding the Company’s short-term indebtedness.

Long-term debt

As of September 30, 2004, the Company has incurred long-term debt in the aggregate amount of approximately $34.9 million to 13 lenders. Long-term debt consists of the following:

Long-term debt is due from March 2005 to June 2011. Debt issuance costs are deferred and then amortized over the term of the debt. Interest rates for long-term debt are as follows:

Future payments on long-term debt as of September 30, 2004 are as follows:

$13.2 million of the long-term indebtedness is secured by the Trust and approximately $3.2 million of the long-term indebtedness owed to Participating Lenders is secured by Company’s property not included in the Trust, with an estimated fair market value of $5.3 million. Approximately $479,000 owed to one of the Non-Participating Lenders, Transamerican Bank, was collateralized with property with an estimated fair market value of approximately $532,000. The Company defers debt issuance costs and then amortizes such costs over the term of the debt. See the section above entitled “Debt Restructure” for more information regarding the Company’s long-term indebtedness. The remaining long-term debt amounting to approximately $19.8 is unsecured.

Although the Company has restructured a substantial portion of its short-term indebtedness and entered into the Trust Agreement, the Company has not yet secured an alternative long-term financing source that would insulate it from the risks associated with the inability to satisfy its obligations as they come due or the loss of one of its relatively short-term financing sources. The Company is seeking to address its anticipated short-term funding requirements by various means including, but not limited to, entering into negotiations with the Participating Lenders to extend the maturity date on the short-term indebtedness owed to such Participating Lenders. In addition, the Company is seeking to secure long-term financing through the private or public issuance of debt instruments.

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Although the Company has entered into discussions with a number of potential capital sources, there can be no assurances that the Company will be successful in its efforts to secure long-term financing on terms acceptable to the Company. The Company’s ability to maintain sufficient liquidity to meet its short-term cash needs is highly dependent on achieving these initiatives. There is no assurance that these initiatives will be successful, and failure to successfully complete these initiatives could have a material adverse effect on the Company’s liquidity and operations, and could require the Company to consider alternative measures, including, but not limited to, the deferral of planned capital expenditures and the further reduction of discretionary spending.

In addition, there can be no assurances that Tenedora will continue providing guarantee services to the Company, that Tenedora will continue to provide guarantee services to the Company without compensation, that the Company will be able to locate alternative sources of financing without Tenedora’s provision of guarantees or that the Company will be able to locate another person or entity willing to provide guarantee services with or without compensation.

Acquisitions and Potential Acquisitions

On December 27, 2004, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Industrias Avicolas Integradas, S.A (“Indavinsa”), a Nicaraguan corporation, pursuant to which the Company acquired all of the assets related to Indavinsa’s animal feed concentrate segment in exchange for (i) the Company’s cancellation of approximately $5.1 million of receivables owed by Indavinsa, which was the amount due to the Company from Indavinsa as of December 27, 2004, and (ii) an approximate $1.1 million account payable to Indavinsa by the Company. The primary assets acquired include an animal feed plant, including silos for storage of grain, grow-out farms for chickens and feedlot facilities for cattle. None of the acquired assets are encumbered based on background investigations performed on such assets. The Company believes that Indavinsa is the third largest producer of animal feed products in Nicaragua.

As of September 30, 2004, Indavinsa owed the Company an aggregate of approximately $6.6 million. In October 2004, the Company collected $2.0 million from Indavinsa (the “Octobr Payment”). As a result of the October Payment and the cancellation of approximately $5.1 million of receivables owed by Indavinsa, as of December 27, 2004, pursuant to the Asset Purchase Agreement, it is the Company’s belief that the amount due from Indavinsa as of September 30, 2004 is not impaired.

The Company is continuing to explore the acquisition of a majority of the outstanding common stock of Avicola Core Etuba Ltda. (“Core”), a Brazilian corporation engaged in the production and distribution of poultry. If the acquisition is pursued, the Company would acquire the majority of the outstanding stock of Core from the Company’s Chief Executive Officer. The Company continues to closely evaluate the performance of Core to determine if, when and how the Company should integrate its business with Core. The Company has postponed indefinitely the acquisition of Core.

On February 20, 2003, Port Ventures, S.A. (“Port Ventures”) and As de Oros entered into a Stock Purchase Agreement pursuant to which As de Oros agreed to acquire from Port Ventures 2,040 shares of common stock of Logistica, representing 51% of the issued and outstanding shares of capital stock of Logistica, for a purchase price of US $2,580,000. See Item 1 for further discussion of the potential acquisition of Logistica.

As with any business acquisition, there can be no assurance that the Company will close these acquisitions and there can be no assurance that these acquisition efforts will prove to be beneficial to the Company. Even if the Company’s board of directors, audit committee and management team believe the Company should pursue a development or acquisition opportunity and successfully negotiate the contracts critical to such venture. The Company will continue to evaluate financial performance and giving the necessary collaboration in order to obtain the necessary judging elements to arrive to a definite decision.

Critical Accounting Policies

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require the Company to make estimates and assumptions. The Company believes that of its significant accounting policies (see Note 1 to the Company’s audited consolidated financial statements), the following may involve a higher degree of judgment and complexity.

Impairment of long-lived assets and goodwill: The Company assesses long-lived assets for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. If impairment indicators are present, the Company must measure the fair value of the assets in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144 “Accounting for the Impairment or Disposal of Long-lived Assets” to determine if adjustments are to be recorded. Management must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective asset.

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Although to date the Company’s assessment has not required it to record any impairment of long-lived assets, if the estimates and assumptions used to make such assessment should change in the future, the Company could be required to record impairment charges. On October 1, 2001, the Company adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” and was required to assess its goodwill for impairment issues upon adoption, and then at least annually thereafter. During the years ended September 30, 2004 and 2003, the Company was not required to record any impairment losses related to goodwill and other intangible assets.

Income taxes: The Company accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”. Under SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. SFAS No. 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In assessing a valuation allowance for a deferred tax asset, the Company estimates future taxable income and provides a valuation allowance when it is more likely than not to be recovered. Future taxable income could be materially different than amounts estimated, in which case the valuation allowance would need to be adjusted. As of September 30, 2004 and 2003, the Company had valuation allowances amounting to $2,016,782 and $2,473,943, respectively.

Allowance for doubtful accounts: The allowance for doubtful accounts reflects estimated losses resulting from the inability to collect required payments from our customers. The allowance for doubtful accounts is based on management’s review of the overall condition of accounts receivable balances and review of significant past due accounts. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. For the years ended September 30, 2004 and 2003, the Company recorded a write-off of doubtful receivables amounting to approximately $90,400 and $312,000, respectively.

Inventory: Inventories are stated at the lower of cost or market and their cost is determined using the weighted-average method, except for inventories in transit, which are valued at specific cost. The costs associated with breeder hens during their growth period are capitalized as inventories until they reach their production stage, which is approximately 20 weeks after they hatch. Capitalized costs are amortized over the productive life of the hens based on a percentage calculated according to the estimated production cycle of the hen. The productive life of hens is estimated based on historical data. Finished products, raw materials and other supplies are regularly evaluated to determine that market conditions are correctly reflected in their recorded carrying value.

Financial Instruments: The Company uses futures to purchase corn and soy-bean meal, the primary ingredients in the chicken feed, as a strategy to hedge against price increases in corn and soy-bean meal. The Company is not involved in speculative trading and generally does not hedge anticipated transactions beyond 6 months. The Company accounts for its futures transactions in accordance with the Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”. The Company must asses whether contracts effectively meet risk reduction criteria according to Company’s policy to determine proper accounting for the transaction.

Property, plant and equipment: Property, plant and equipment are recorded at cost. Property plant and equipment acquired through purchase method accounting reflect market value at the date of acquisition. Management must evaluate whether improvements to property, plant and equipment that extend their useful lives are capitalized or expensed. The Company uses the straight-line method over the estimated useful live. Useful lives assigned to depreciable assets are based on guidelines used for manufacturing companies. The Company has reviewed these guidelines and has deemed them appropriate based on assessments made by engineers and past experience.

Contingent liabilities: In the course of its operations, the Company could be subject to lawsuits and other claims which would require to asses the likelihood of any adverse judgments or outcomes, as well as potential ranges of probable losses. The Company accounts for contingent liabilities in accordance with SFAS 5 “ Accounting for Contingencies” (“SFAS 5”) and must asses whether a contingent liability meet the criteria required by SFAS 5, to record a provision. A determination of the amount of provision for these contingencies that would be required, if any, are made after considerable analysis of each individual issue. The provisioned amounts may change in the future due to changes in the Company’s assumptions, the effectiveness of strategies or other factors beyond the Company’s control.

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Impact of Recently Issued Accounting Standards

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” Interpretation 46 changes the criteria by which one company includes another entity in its consolidated financial statements. Previously, the criteria were based on control through voting interest. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. A company that consolidates a variable interest entity is called the primary beneficiary of that entity. During October 2003, the FASB issued Staff Position No. FIN 46 deferring the effective date for applying the provisions of FIN 46 until the end of the first interim or annual period ending after December 31, 2003, if the variable interest was created prior to February 1, 2003 and the public entity has not issued financial statements reporting such variable interest entity in accordance with FIN 46. On December 24, 2003, the FASB issued FASB Interpretation No. 46 (Revised December 2003), Consolidation of Variable Interest Entities, (FIN-46R), primarily to clarify the required accounting for interests in variable interest entities. FIN-46R replaces FIN-46, Consolidation of Variable Interest Entities, that was issued in January 2003.

FIN-46R exempts certain entities from its requirements and provides for special effective dates for entities that have fully or partially applied FIN-46 as of December 24, 2003. In certain situations, entities have the option of applying or continuing to apply FIN-46 for a short period of time before applying FIN-46R. While FIN-46R modifies or clarifies various provisions of FIN-46, it also incorporates many FASB Staff Positions previously issued by the FASB. The adoption of this pronouncement did not have a material effect on the financial statements of the Company.

In December 2003, the FASB issued a revised SFAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits” which replaces the previously issued Statement. The revised Statement increases the existing disclosures for defined benefit pension plans and other defined benefit postretirement plans. However, it does not change the measurement or recognition of those plans as required under SFAS No. 87, “Employers’ Accounting for Pensions,” SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” and SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions.” Specifically, the revised Statement requires companies to provide additional disclosures about pension plan assets, benefit obligations, cash flows, and benefit costs of defined benefit pension plans and other defined benefit postretirement plans. Also, companies are required to provide a breakdown of plan assets by category, such as debt, equity and real estate, and to provide certain expected rates of return and target allocation percentages for these asset categories. The adoption of this pronouncement did not have a material impact to the Company’s financial statements.

In December 2003, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition.” SAB 104 supersedes SAB 101, “Revenue Recognition in Financial Statements.” SAB 104’s primary purpose is to rescind accounting guidance contained in SAB 101 related to multiple element revenue arrangements, superseded as a result of the issuance of EITF 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables.” Additionally, SAB 104 rescinds the SEC’s Revenue Recognition in Financial Statements Frequently Asked Questions and Answers (“the FAQ”) issued with SAB 101 that had been codified in SEC Topic 13, Revenue Recognition. Selected portions of the FAQ have been incorporated into SAB 104. While the wording of SAB 104 has changed to reflect the issuance of EITF 00-21, the revenue recognition principles of SAB 101 remain largely unchanged by the issuance of SAB 104, which was effective upon issuance. The adoption of SAB 104 did not impact the consolidated financial statements.

In March 2004, the FASB approved the consensus reached on the Emerging Issues Task Force (EITF) Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” The objective of this Issue is to provide guidance for identifying impaired investments. EITF 03-1 also provides new disclosure requirements for investments that are deemed to be temporarily impaired. In September 2004, the FASB issued a FASB Staff Position (FSP) EITF 03-1-1 that delays the effective date of the measurement and recognition guidance in EITF 03-1 until after further deliberations by the FASB. The disclosure requirements are effective only for annual periods ending after June 15, 2004. The Company has evaluated the impact of the adoption of the disclosure requirements of EITF 03-1 and does not believe the impact will be significant to the Company’s overall results of operations or financial position. Once the FASB reaches a final decision on the measurement and recognition provisions, the company will evaluate the impact of the adoption of EITF 03-1.

In November 2004, the FASB issued SFAS No. 151 “Inventory Costs, an amendment of ARB No. 43, Chapter 4. The amendments made by Statement 151 clarify that abnormal amounts of idle facility expense, freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and require the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. The guidance is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Earlier application is permitted for inventory costs incurred during fiscal years beginning after November 23, 2004. . The Company is in the process of evaluating whether the adoption of SFAS 151, will have a significant impact on the Company’s overall results of operations or financial position.

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In December 2004, the FASB issued SFAS No.152, “Accounting for Real Estate Time-Sharing Transactions—an amendment of FASB Statements No. 66 and 67” (“SFAS 152) The amendments made by Statement 152 This Statement amends FASB Statement No. 66, Accounting for Sales of Real Estate, to reference the financial accounting and reporting guidance for real estate time-sharing transactions that is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions. This Statement also amends FASB Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, to state that the guidance for (a) incidental operations and (b) costs incurred to sell real estate projects does not apply to real estate time-sharing transactions. The accounting for those operations and costs is subject to the guidance in SOP 04-2. This Statement is effective for financial statements for fiscal years beginning after June 15, 2005. with earlier application encouraged The Company has evaluated the impact of the adoption of SFAS 152, and does not believe the impact will be significant to the Company’s overall results of operations or financial position.

In December 2004, the FASB issued SFAS No.153, “Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions.” The amendments made by Statement 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges of similar productive assets and replace it with a broader exception for exchanges of nonmonetary assets that do not have commercial substance. Previously, Opinion 29 required that the accounting for an exchange of a productive asset for a similar productive asset or an equivalent interest in the same or similar productive asset should be based on the recorded amount of the asset relinquished. Opinion 29 provided an exception to its basic measurement principle (fair value) for exchanges of similar productive assets. The Board believes that exception required that some nonmonetary exchanges, although commercially substantive, be recorded on a carryover basis. By focusing the exception on exchanges that lack commercial substance, the Board believes this Statement produces financial reporting that more faithfully represents the economics of the transactions. The Statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in fiscal periods beginning after the date of issuance. The provisions of this Statement shall be applied prospectively. The Company is in the process of evaluating whether the adoption of SFAS 153 will have a significant impact on the Company’s overall results of operations or financial position.

In December 2004, the FASB issued SFAS No.123 (revised 2004), “Share-Based Payment”. Statement 123(R) will provide investors and other users of financial statements with more complete and neutral financial information by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. Statement 123(R) covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. Statement 123(R) replaces FASB Statement No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. Statement 123, as originally issued in 1995, established as preferable a fair-value-based method of accounting for share-based payment transactions with employees. However, that Statement permitted entities the option of continuing to apply the guidance in Opinion 25, as long as the footnotes to financial statements disclosed what net income would have been had the preferable fair-value-based method been used. Public entities (other than those filing as small business issuers) will be required to apply Statement 123(R) as of the first interim or annual reporting period that begins after June 15, 2005. The Company has evaluated the impact of the adoption of SFAS 123(R), and does not believe the impact will be significant to the Company’s overall results of operations or financial position.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

The Company and its representatives may, from time to time, make written or oral forward-looking statements with respect to their current views and estimates of future economic circumstances, industry conditions, company performance and financial results. These forward-looking statements are subject to a number of factors and uncertainties which could cause the Company’s actual results and experiences to differ materially from the anticipated results and expectations expressed in such forward-looking statements. The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. Among the factors that may affect the operating results of the Company are the following: (i) fluctuations in the cost and availability of raw materials, such as feed grain costs in relation to historical levels; (ii) market conditions for finished products, including the supply and pricing of alternative proteins which may impact the Company’s pricing power; (iii) risks associated with leverage, including cost increases attributable to rising interest rates; (iv) changes in regulations and laws, including changes in accounting standards, environmental laws, occupational and labor laws, health and safety regulations, and currency fluctuations; and (v) the effect of, or changes in, general economic conditions.

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This management discussion and analysis of the financial condition and results of operations of the Company may include certain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, without limitation, statements with respect to anticipated future operations and financial performance, growth and acquisition opportunity and other similar forecasts and statements of expectation. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, should and variations of those words and similar expressions are intended to identify these forward-looking statements. Forward-looking statements made by the Company and its management are based on estimates, projections, beliefs and assumptions of management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligations to update or review any forward-looking statements based on the occurrence of future events, the receipt of new information or otherwise.

Actual future performance outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include, without limitation, general industrial and economic conditions; cost of capital and capital requirements; shifts in customer demands; changes in the continued availability of financial amounts and the terms necessary to support the Company’s future business.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

General

Market risks relating to the Company’s operations result primarily from changes in currency exchange rates, interest rates and commodity prices. The sections below describe the Company’s exposure to interest rates, foreign exchange rates and commodities prices. The sensitivity analyses presented below are illustrative and should not be viewed as predictive of future financial performance. Additionally, the Company cannot assure that the Company’s and/or its subsidiaries’ actual results in any particular year will not differ from the amounts indicated below.

Foreign Exchange Risk

The subsidiaries of the Company operate in Costa Rica and are exposed to market risk from changes in U.S. currency exchange rates. Foreign exchange risk derives from the fact that the Company makes its payments in U.S. dollars for the majority of its imported raw materials and bank facilities, and its revenues are mostly denominated in colones. The Company does not currently maintain a trading portfolio and does not utilize derivative financial instruments to manage such risks. To mitigate its exposure to variations in devaluations, the Company periodically increases sales prices of some of its products during the year, varies the product mix to those with higher profit and seeks efficiencies in its costs. In addition, the company seeks to increase its exports sales.

The exchange rate between the colon and the U.S. dollar is determined in a free exchange market, supervised by the Banco Central de Costa Rica (“BCCR”). For the last 20 years, the BCCR has utilized the crawling peg method whereby the colon is devalued daily on a systematic basis.

As of September 30, 2004, the Company had outstanding indebtedness of approximately $31.57 million denominated in U.S. dollars. The potential foreign exchange loss resulting from a hypothetical 10% increase during the year in the devaluation of the colon/dollar exchange rate would be approximately $290,000. This loss would be reflected in the balance sheet as increases in the principal amount of its dollar-denominated indebtedness and in the income statement as an increase in foreign exchange losses, reflecting the increased cost of servicing dollar-denominated indebtedness. This analysis does not take into account the positive effect that the hypothetical increase would have on accounts receivable and other assets denominated in U.S. dollars.

Interest Rate Risk

As of September 30, 2004, the Company had outstanding a total of approximately $46.5 million in loans and other debt which primarily bore variable interest rates based on LIBOR or Prime Rates. A hypothetical, simultaneous and unfavorable change of 10% in the Company’s variable rate in effect as of September 30, 2004 would result in a potential increase in interest expense of $445,000. The sensitivity analysis model may overstate the impact of the Company’s interest rate risk, as uniform increases of all interest rates applicable to its financial liabilities are unlikely to occur simultaneously.

Commodity Risk

The Company imports all of its corn and soybean meal, the primary ingredients in chicken feed, from the United States. Fluctuations in the price of corn may significantly affect the Company’s profit margin. The price of corn and soybean meal, like most grain commodities, is fairly volatile and requires constant and daily hedging in order to minimize the effect of price increases on the Company’s profit margin.

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The Company purchases its corn using commodity futures contract prices dictated by the Chicago Board of Trade (“CBOT”) and has been actively hedging its exposure to corn price fluctuations since 1991. The Company’s strategy is to hedge against price increases in corn and soybean meal, and it is not involved in speculative trading. Contract terms generally range from one month to six months. The Company buys directly from the spot market if market conditions are favorable, but as a general rule, the Company purchases most of its corn through contracts. The Company’s hedging strategy is set in its annual budget, which determines how much corn and soybean meal the Company will need and the price the Company must pay in order to meet budget forecasts. The Company uses an internal pricing model to prepare sensitivity analyses. The Company bases its target prices on the worst case price assumptions (i.e. high prices). The prices paid by the Company for corn and soy bean meal were 21.95% below its budgeted prices, for the year ended September 30, 2004.

The Company purchases its soybean meal through a company in Costa Rica, INOLASA, in which the Company holds a 10% equity interest. In Costa Rica, there is an applicable 5% tax for soybean meal imports, which is not levied if such imports are purchased through INOLASA. If for any reason INOLASA cannot deliver the soybean meal to the Company, the Company can buy its soybean meal directly from the CBOT. Thus far, the Company has never had to purchase soybean meal directly from the CBOT.

In July 2004, the Company entered into forward contracts with certain of its corn suppliers for the purchase of approximately $6.9 million of corn. Deliveries under such corn forwards contracts commenced in November 2004. The Company estimates that this supply of corn will satisfy the Company’s needs for approximately four months. Pursuant to these corn forwards contracts, the Company is generally required to make payments under the contract fifteen days prior to the date of shipment. The Company expects to make such payment with funds from operations or short-term financing.

In addition, in July 2004, the Company entered into forward contracts with INOLASA for the purchase of approximately $5.2 million of soybean meal. Deliveries under such soybean meal forwards contracts commenced in November 2004. The Company estimates that this supply of soybean meal will satisfy the Company’s needs for approximately four months. Payments under these soybean meal forward contracts are due 22 days after receipt of the soybean meal. The Company expects to pay outstanding invoices with funds from operations or short-term financing.

The Company accounts for its futures transactions in accordance with the Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities”. The contracts that effectively meet risk reduction criteria are recorded using hedge accounting.

Derivatives that are not hedges are adjusted to fair value through income. - No ineffectiveness was recognized on cash flow hedges during fiscal 2003. As of September 30, 2004, the Company has recorded no losses or gains in other comprehensive loss related to cash flow hedges, since it has secured its supply of corn for approximately the next 6 months. However, any gains or losses related to cash flow hedges, are generally recognized within the following 3 months.

For the year ended September 30, 2004, a hypothetical 10% increase in the monthly price of corn and soybean meal purchased through hedging would have resulted in an increase in cost of sales of approximately $2.81 million.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information required by this item is incorporated by reference to the independent Auditor’s Report issued by Stonefield Josephson Inc. on December 27, 2004 included on page F-1 and from the consolidated financial statements and supplementary data, on pages F-2 through F-42 on this Form 10-K.

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

None

ITEM 9A. CONTROLS AND PROCEDURES

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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The Company’s management has evaluated, with the participation of the Chief Executive Officer, who is the Company’s principal executive officer, and the Chief Financial Officer, who is the Company’s principal financial officer, the effectiveness of the Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15(d)-15(e) of the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report on Form 10-K. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information it is required to disclose in reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission rules and forms.

There have been no significant changes in the Company’s internal controls over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

As a non-accelerated filer with a fiscal year end of September 30, the Company must first begin to comply with the requirements of Section 404 of the Sarbanes-Oxely Act of 2002 (“Section 404”) for the fiscal year ending September 30, 2005. During fiscal 2005, management will review and evaluate the effectiveness, and where necessary, enhance the Company’s internal controls over financial reporting. The Company anticipates that it may need to engage a third party to assist it with the design of such internal controls over financial reporting. As of the date of this report, the Company has not yet engaged any such third party. This review and any enhancements, if necessary, will likely involve significant time and expense by the Company and its independent auditors. Accordingly, there can be no assurances that the Company will be in compliance with the requirements of Section 404 by September 30, 2005.

ITEM 9B. OTHER INFORMATION

None

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The directors and executive officers of the Company, their ages and present positions held in the Company, as of the date of this report, are as follows:

The Company’s directors will serve in such capacity until the next annual meeting of stockholders of the Company and until their successors have been elected and qualified. There are no family relationships among the Company’s officers and directors, nor are there any arrangements or understandings between any of the directors or officers of the Company or any other person pursuant to which any officer or director was or is to be selected as an officer or director.

Between August 1, 2004 and August 5, 2004, each of Calixto Chaves, Monica Chaves, Jose Vidal, Federico Vargas and Jorge Quesada resigned from the Board of Directors of the Company. Effective August 1, 2004, the Board of Directors appointed each of Victor Oconitrillo, Alfonso Gutierrez, Carlos Ceciliano and Eladio Villalta (collectively, the “New Directors”) to fill four of the vacancies on the Board of Directors created by such resignations.

In addition, as of the same date, Mr. Chaves resigned as President and Chairman of the Board of the Company, Ms. Chaves resigned as Secretary of the Company, Mr. Quesada resigned as Treasurer of the Company and Carlos Zamora resigned as Chief Operating Officer of the Company. None of Mr. Chaves, Ms. Chaves, Mr. Quesada, Mr. Zamora, Mr. Vargas or Mr. Vidal indicated upon resignation, or otherwise, that he or she disagreed with the Company on any matter relating to the Company’s operations, policies or practices. On such date, the Board of Directors appointed Mr. Oconitrillo as President and Chairman of the Board, Mr. Gutierrez as Secretary of the Company and Mr. Villalta as Treasurer of the Company. As discussed further below, each of the New Directors have had experience working and/or consulting with the Company’s wholly owned subsidiaries since at least December of 2003.

Mr. Victor Oconitrillo. Mr. Oconitrillo was appointed President and Chairman of the Board of Directors of the Company in August 2004 and was appointed as President of each of the Company’s Subsidiaries in December 2003. From 1994 until the present, Mr. Oconitrillo has served as the General Manager and as a director of Grupo Consolidado SAMA, S.A. (“SAMA”), a privately held financial advisory corporation, and certain of its privately held affiliated companies, including Inversiones Sama, S.A., Puesto de Bolsa, Sama Internacional (G.S.), S.A. and Sama Valores (G.S.), S.A. Mr. Oconitrillo received his Bachelor’s Degree in Sociology and his Masters in Business Administration with an emphasis in international business from the University of Costa Rica. Since 1982, Mr. Oconitrillo has also been accredited as a stock broker by the Bolsa Nacional de Valores, S.A, the Costa Rican stock exchange.

Mr. Alfonso Gutierrez. Mr. Gutierrez was appointed as a Director and Secretary of the Company in August 2004. He had previously been appointed as Secretary of the Company’s Subsidiaries in August 2003. From 1976 until the present, Mr. Gutierrez has worked as an attorney for a private law firm owned by him. Mr. Guiterrez has also served as President of SAMA’s Board of Directors from November 2002 until the present. Mr. Guiterrez received his Licenciatura in Law from the Universidad de Costa Rica and has engaged in post-graduate study in commercial law from the Instituto de Comercial y Comparado Lorenzo Moss.

Mr. Eladio Villalta. Mr. Villalta was appointed as a Director and Treasurer of the Company in August 2004. He had previously been appointed as the Treasurer of the Company’s Subsidiaries in August 2003. From 1988 until June 1993, Mr. Villalta worked as an Independent Accounting Advisor to Conferencia Episcopal. Mr. Villalta retired in June 1993. Mr. Villalta has served as a member of the Board of Directors of SAMA from April 2003 until the present. Mr. Villalta received his Licenciature in Business Administration with an emphasis in accounting from the Universidad de Costa Rica and has engged in post-graduate study at the University CEARA de Brasil and the University of California in Los Angelas. Mr. Villalta is a Certified Public Accountant.

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Mr. Carlos Ceciliano. Mr. Ceciliano was appointed as a member of the Board of Directors of the Company in August 2004. He had previously been appointed as the Supervisor of the Board of Directors of the Company’s Subsidiaries in December 2003. Prior to such appointment, Mr. Ceciliano served as the Vice President of the Board of Directors of the Company’s Subsidiaries from August 2003 until December 2003. From June 2002 until the present, Mr. Ceciliano has served as the President of Ceciliano Consultores, S.A., a business consulting firm which he owns and operates. From June 1974 until May 2002, Mr. Ceciliano was a partner in Ceciliano y Compania, a Costa Rican privately held accounting firm. Mr. Ceciliano has also served as the Supervisor of the Board of Directors of SAMA from 1976 until the present. Mr. Ceciliano received his Bachelor’s Degree in Economics and Social Science with an emphasis in business administration from the University of Costa Rica.

Honorable Ambassador Luis Lauredo. Mr. Lauredo has served as Director and a member of the Audit Committee of the Company since August 2001. In September 2004, Mr. Lauredo was appointed as Chairman of the Audit Committee. Mr. Lauredo also served as a director of the Company from August 1996 until December 1999, at which time he resigned to serve as the United States Ambassador to the Organization of American States. Mr. Lauredo served as Ambassador until June 2001. Mr. Lauredo previously served as the Chairman of the Audit Committee from August 1996 to July 2000. In July 2001, Mr. Lauredo became President of Hunton & Williams International, LLC, a wholly owned subsidiary of the international law firm of Hunton & Williams LLP. Mr. Lauredo is and has served as a director of Colonial Bank of South Florida since October 2001. From 1995 to 1999, Mr. Lauredo was President of Greenberg Traurig Consulting, Inc., an affiliate of the international law firm, Greenberg Traurig, Hoffman, Lipoff, Rosen & Quentel. From 1994 to 1995, he was Executive Director of the Summit of the Americas. From 1992 to 1994, he was a Commissioner on the Florida Public Service Commission, as well as Chairman of the International Relations Committee of the National Association of Regulatory Utility Commissioners. In his career, Mr. Lauredo has held a number of positions in the banking industry, including Senior Vice President of the Export-Import Bank of the United States of America. He has represented the President of the United States as special U.S. Ambassador to the inaugurations of the Presidents of Colombia, Venezuela, Brazil, and Costa Rica. He also served as a founding Director of the Hispanic Council on Foreign Affairs (Washington, D.C.). Mr. Lauredo received his B.A. from Columbia University in New York City and has attended the University of Madrid in Spain and Georgetown University Law Center in Washington, D.C.

Mr. Grant “Jack” Peeples. Mr. Peeples has served as a Director and a member of the Audit Committee since August 2001. He served in the Korean War as an Airborne Infantry Officer and Rifle Company Commander. He was awarded Combat Infantryman Badge, Bronze Star for Valor and Purple Heart. He graduated from the University of Florida College of Law in 1957 and joined the law firm of former Governor Leroy Collins in Tallahassee, Florida. Mr. Peeples was appointed as Legislative Counsel to Governor Collins in 1958 and appointed to the Governor’s Cabinet as State Beverage Director in 1959. Mr. Peeples returned to the private practice of law in 1961, specializing in legislative and administrative practice in Tallahassee, Florida; and became the founding partner of Peeples, Earl & Blank in 1970, specializing in environmental law and acting as Senior Trial Counsel in numerous landmark environmental and regulatory cases. Mr. Peeples retired from Peeples, Earl & Blank in 1994 and joined White & Case as Of Counsel. He served as Campaign Chairman and Chairman of the Transition Team for Governor Lawton Chiles as well as the Legislative and Senior Counsel to the Governor. Mr. Peeples has also served as the Vice-Chairman of the Governor’s Commission on Governance, the Vice-Chairman of Governor’s Commission on the Homeless, the Chairman of Florida Aviation Commission, the Co-Chairman of the Dade County Homeless Trust, a Board Member of the Florida Independent College Fund, a Member of the Board of Overseers, a member of the board of the University of Florida Medical School, and representative of the Governor and the Cabinet on the Downtown Development Authority. He has also served as General Counsel and as a member of the Board of Directors of Deltona Corporation, a NYSE company, as a member of the Board of Directors and Chairman of the Audit Committee of United Petroleum Group, a Hunt family company, and as Senior Counsel and a member of the Board of Directors of Senior Networks, Inc.

Mr. Alfred E. Smith, IV. Mr. Smith has been a member of the Board of Directors of the Company since June, 1994. Mr. Smith has been the Managing Partner of the Wall Street firm of Bear Wagner since April, 2001 and was the Managing Director of Hunter Specialists, LLC, New York, from January 1997 to April, 2001. From 1979 to 1996, he was with CMJ Partners, a New York Stock Exchange member firm. Mr. Smith is the Chairman of the Government Relations Committee of the New York Stock Exchange, Director and Secretary of the Alfred Emanuel Smith Memorial Foundation, Chairman of the Cardinal’s Committee for the Laity-Wall Street Division since 1985, Founder and Chairman of Hackers for Hope since 1989, Director of the Center for Hope since 1989, a Director at the Catholic Youth Organization until 1997, member of the President’s Council of Memorial Sloan Kettering Hospital since 1986, and a member of the New York City Advisory Board of the Enterprise Foundation. Mr. Smith is also a member of the Board of Trustees of St. Vincent’s Hospital and Medical Center, since 1986, and the Cavalry Hospital since 1998, and was a member of the Board of Trustees of Iona Prep School, Saint Agnes Hospital, and Our Lady of Mercy Medical Center. Mr. Smith is a member of the Association of the Sovereign Military Order of Malta. He has received numerous awards for his charity humanitarian work, including “Wall Street 50” Honoree Humanitarian Award, Terence Cardinal Cooke Center in 1999; Man of the Year Award at Iona Prep in 1986, Club of Champions Gold Medal Award of the Catholic Youth Organization, Ellis Island Medal of Honor,

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the National Brotherhood Award of the National Conference of Christians and Jews, the Graymoor Community Service Award by the Franciscan Friars of the Atonement, the American Cancer Society’s Gold Sword of Hope Award, and the Terence Cardinal Cooke Humanitarian Award by Our Lady of Mercy Medical Center. Mr. Smith was educated at Villanova University.

Mr. Manuel Escobar. Mr. Escobar was appointed as a Director and Audit Committee member on December 9, 2004. He has served, from March 2003 until the present, as the Vice President of Finance of Trimpot Electrónicas Ltda, a privately held company specializing in the manufacture of electronic components for the global markets. Prior to serving as the Vice President of Finance, from January 1980 until March 2003, Mr. Escobar served as the Plant Controller of Trimpot. From 1986 until 1996, Mr. Escobar also taught classes in managerial control, accounting and productions management, cost accounting, finance and general management at the Universidad Latina de Costa Rica and the Universidad UACA - Veritas. Mr. Escobar has received a degree in finance from Escuela Nacional de Comercio - El Salvador, a Licentiate Degree in Business Administration from Universidad Nacional - El Salvador, an MBA from National University - San Diego, California and a Licentiate Degree in Public Accounting from Univerisidad Interamericana - San Jose, Costa Rica.

Mr. Calixto Chaves. Mr. Chaves is the Chief Executive Officer of the Company and has served as such since 1996. Mr. Chaves resigned as President and Chairman of the Board of the Company in August 2004. Mr. Chaves also founded Pipasa in 1969 and served as its Chairman of the Board until September of 2003. He has served on the board of directors of Central American Oils and Derivatives, S.A. and American Oleaginous Industry from 1991 to present. From 1994 to 1996, he was a board member of Cerveceria Americana, a private brewery. In 1994, he served as an advisor to the President of Costa Rica and the Ministry of Economic Business Affairs. From 1983 to 1985, he was a member of the Board of Directors of the Sugar Cane Agricultural League. From 1982 to 1986, he served as Minister of the Costa Rican Ministry of Industry, Energy and Mines and became Minister of Natural Resources in 1986.

Ms. Gina Sequeira. Ms. Sequeira was appointed Chief Financial Officer of the Company on November 2002. She joined the Company in April of 1996 and has served in the financial and accounting divisions of the Company. Ms. Sequeira obtained her degree in accounting from the Universidad Internacional de las Americas in 1994 and has been a member of the Institute of Certified Public Accountants of Costa Rica since 1998. Ms. Sequeira worked in external auditing prior to her employment with the Company.

Mr. Pedro Dobles. Mr. Dobles was appointed as the Vice President of the Company’s Subsidiaries in December 2003. From October 1995 until July 2003, Mr. Dobles served as the General Director of Florida Ice and Farm (Cervecceria Costa Rica), the largest privately held brewery company in Costa Rica. His responsibilities as General Director included, among other things, overseeing all of the company’s operations. Mr. Dobles has also served as a member of the Board of Directors of SAMA from August 2003 until the present. Mr. Dobles received his Bachelor’s Degree in Industrial Engineering from the University of Houston and his Masters in Business Administration from Instituto Centroamericano de Administracion de Empresas. Mr. Dobles also attended strategic marketing management seminars at Harvard Business School in June 1993 and business strategy seminars at Columbia University in 1991.

Legal Proceedings

On August 15, 2003, the Commission filed a settled civil injunctive action against the Company, the Company’s Chief Executive Officer (the “CEO”) and the Company’s Chief Financial Officer (the “CFO”) for violations of the CEO and CFO certification requirements of the Sarbanes-Oxley Act of 2002. The Company, the CEO and the CFO have consented, without admitting or denying the allegations in the Commission’s complaint, to the entry of a Final Judgment of Permanent Injunction and Other Relief (“Final Judgment”). According to the Commission’s complaint, on January 13, 2003, the Company filed a Form 10-K annual report with the Commission containing a purportedly unqualified independent auditor’s report from Deloitte & Touche. The audit report represented that the Company’s consolidated financial statements were presented fairly and in conformity with generally accepted accounting principles. At the time of the filing, however, Deloitte & Touche had not provided the Company with a signed audit report and, according to the Commission’s complaint, the Company’s financial statements contained material classification errors.

The Final Judgment permanently enjoins the Company from violating Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 12b-20 and 13a-1 thereunder, which governs the accuracy of the issuer books and records and financial disclosures. The Final Judgment also permanently enjoins the CEO and CFO from violating Section 13(b)(5) of the Exchange Act and Rule 13a-14 thereunder and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Pursuant to the Final Judgment, the CEO was ordered to pay $25,000 in civil penalties. A penalty was not imposed against the CFO based on the sworn financial statements and other financial information she provided to the Commission.

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Except for the legal proceedings discussed above, the Company is not aware of any pending, material legal proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse the Company.

Code of Ethics

The Company has adopted a code of ethics applicable to all employees of the Company, including the Chief Executive Officer and the Chief Financial Officer.

Audit Committee

The Company’s Audit Committee currently consists of Mr. Lauredo, Mr. Peeples and Mr. Escobar. Mr. Lauredo is currently serving as Chairman of the Audit Committee. The Board of Directors has determined that each member of the Audit Committee is an independent director pursuant to Section 121A of the AMEX Company Guide and Rule 10A-3 promulgated pursuant to the Securities Exchange Act of 1934, as amended (the “1934 Act”). The Board has determined that Mr. Escobar meets the “financial expert” requirements set forth in the rules established pursuant to the Sarbanes-Oxley Act of 2002.

On November 17, 2004, the Company received a warning letter from the staff of AMEX. The letter advised the Company that due to the resignation of Mr. Vargas, the Company was not in compliance with the continued listing standard described in Section 121(B)(2)(a) of the AMEX Company Guide, which requires that an Audit Committee have three members.

On November 23, 2004, the Board of Directors, upon the recommendation of the Governance and Nominating Committee, appointed Silvana I. Carmelino to the Company’s Board of Directors and Audit Committee to fill the vacancy created by the resignation of Federico Vargas. There were no arrangements or understandings pursuant to which Ms. Carmelino was selected as a director.

On December 8, 2004, upon the recommendation of the Governance and Nominating Committee, appointed Mr. Escobar to the Company’s Board of Directors and Audit Committee. There are no arrangements or understandings pursuant to which Mr. Escobar was selected as a director. Also on December 8, 2004, Ms. Carmelino resigned from the Board and the Audit Committee.

Policy Regarding Shareholder Nominations for Director

In September 2004, the Board formed the Governance and Nominating Committee of the Board of Directors. The Board has adopted a written charter for the Governance and Nominating Committee. This Governance and Nominating Committee, currently comprised of Mr. Lauredo, Mr. Peeples and Mr. Smith, considers director candidates based upon a number of qualifications, including, among other things: (i) the appropriate size and the diversity of the Company’s Board, (ii) the needs of the Company with respect to the particular talents and experience of its directors; (iii) the knowledge, skills and experience of nominees, including experience in technology, business, finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board; (iv) familiarity with national and international business matters; (v) experience in political affairs; (vi) experience with accounting rules and practices; (vii) whether such person qualifies as an “audit committee financial expert” pursuant to SEC rules; (viii) appreciation of the relationship of the Company’s business to the changing needs of society; and (ix) the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members.

The Company has not in the past relied upon third-party search firms to identify director candidates, but may employ such firms if so desired. The Governance and Nominating Committee generally relies upon, receives and reviews recommendations from a wide variety of contacts, including current executive officers, directors, community leaders, and shareholders as a source for potential director candidates. The Board retains sole discretion in making nominations for election as a member of the Board.

In accordance with its charter, the Governance and Nominating Committee will consider qualified director candidates recommended by shareholders in compliance with the Company’s procedures. The Governance and Nominating Committee’s evaluation of candidates recommended by shareholders does not differ materially from its evaluation of candidates recommended from other sources.

In order for a shareholder to nominate a candidate for director, under the Company’s Bylaws, timely notice of the nomination must be received by the Company in advance of the meeting. Ordinarily, such notice must be received not less than 90 nor more than 120 days before the first anniversary of the date of the Company’s proxy statement in connection with the last Annual Meeting of Shareholders. The shareholder filing the notice of nomination must include:

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These requirements are separate from and in addition to the requirements a shareholder must meet to have a proposal included in the Company’s proxy statement.

In each case the notice must be given by personal delivery or by United States certified mail, postage prepaid, to Mauricio Marenco, the General Counsel of the Company, whose address is Wachovia Financial Center, 200 South Biscayne Boulevard, Suite 4350, Miami, FL 33131. Any shareholder desiring a copy of the Company’s Bylaws will be furnished one without charge upon written request to the General Counsel. A copy of the Company’s Bylaws is filed as an exhibit to this Form 10-K and is available at the Securities and Exchange Commission Internet website at www.sec.gov.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Sec 16(a) of 1934 Act requires the Company’s directors and executive officers, and persons who own more than ten percent (10%) of the Company’s outstanding Common Stock, to file with the Securities and Exchange Commission (the “SEC”) initial report of ownership and report changes in ownership of Common Stock. Such persons are required by SEC regulations to furnish the Company with copies of all such reports they file.

To our knowledge, based solely on a review of the copies of reports furnished to us and written or oral representations that no other reports were required for such persons, all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent (10%) beneficial owners have been complied with respect to the fiscal years ended September 30, 2004, except for the late filing of a Form 3 filed by Jose Vidal, the late filing of one Form 4 by each of Calixto Chaves, Jorge Quesada, Comercial Angui, Inversiones La Ribera and Antonio Echeverria and the late filing of two Form 4s by each of Pedro Dobles and Eladio Villalta.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth, for the fiscal years ended September 30, 2004, 2003 and 2002 the aggregate compensation awarded to, earned by or paid to Mr. Chaves, the Company’s Chief Executive Officer. No Executive Officer of the Company or its subsidiaries earned compensation in excess of $100,000 during fiscal year ended September 30, 2004. The Company neither granted any restricted stock awards or stock appreciation rights to nor made any long-term incentive plan payouts to any of the Named Executive Officers during the fiscal years ended September 30, 2004, 2003, and 2002.

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Compensation of Directors

The Company reimburses all members of the Board of Directors for their expenses in connection with their activities as Directors of the Company. Directors of the Company receive additional compensation for their services as Directors at a rate of $200 for each Board Meeting that they attend. Members of the Company’s Audit Committee receive additional compensation for their services as Audit Committee members at a rate of $600 for each Audit Committee meeting that they attend.

On November 29, 2004, the Board of Directors of the Company granted, effective October 15, 2004 (the “Grant Date”), a total of 120,000 options (the “Director Options”) to purchase shares of the Company’s common stock to two of its current directors. In addition, on the same date, as consideration for past services to the Company, the Company granted 10,000 options (collectively with the Director Options, the “Options”) to purchase shares of the Company’s common stock to one of its former directors. The Options vested upon issuance and are exercisable at any time during the period (the “Exercise Period”) commencing on the three month (3^rd) anniversary of the Grant Date and terminating on the six month (6^th) anniversary of the Grant Date (the “Expiration Date”).

Employment Agreements and Change in Control Agreements

The Company has no employment agreements and no change in control agreements with any executive officer.

Compensation Committee Interlocks and Insider Participation

The Company has a Compensation Committee currently consisting of the members of the Company’s Audit Committee: Mr. Lauredo, Mr. Peeples and Mr. Escobar. None of the members of the Compensation Committee are or ever have been officers of the Company. This Committee makes the determinations for stock issuances pursuant to the Company’s compensation plans. Except for payments paid upon the severance or termination of an employee as required by Costa Rican law, the Company has no retirement, pension or profit sharing plans covering its officers and directors, but has contemplated the implementation of such a plan in the future.

Board Compensation Committee Report on Executive Compensation

The Compensation Committee is responsible for establishing and administering the policies for the Company’s compensation programs and for approving the compensation levels of the executives and managers of the Company and its subsidiaries, including its Chief Executive Officer. The Committee also reviews with the Chief Executive Officer guidelines for salaries and bonus awards applicable to the Company’s employees other than its executives and managers.

Statement of Philosophy of Executive Compensation

The executive compensation program of the Company is designed to (i) provide base compensation reasonably comparable to that offered by other leading companies to their executives and managers so as to attract and retain talented personnel, (ii) motivate certain executives and managers to achieve the strategic goals set by the Company, and (iii) further align the interests of the executives and managers with the long-term interests of the Shareholders. To implement this philosophy, the Company offers its executives and managers compensation packages that include a mix of salary, the opportunity to receive discretionary incentive bonus awards, and, at times, stock options.

In determining the level and form of executive compensation to be paid or awarded, the Committee relies primarily on the recommendations of the Human Resources Department, which provides the Committee an assessment of the subject executive’s performance and the Company’s performance in light of its strategic objectives. The Committee considered a number of factors in establishing compensation in the fiscal year ended September 30, 2004, none of which was quantified, ranked or assigned relative weight.

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Salary

The base salary of executives and managers is determined initially by analyzing and evaluating the responsibilities of the position and comparing the proposed base salary with that of executives and managers in comparable positions in other companies. Adjustments are determined by objective factors such as the Company’s performance and the individual’s contribution to that performance and subjective considerations such as additional responsibilities taken on by the executive or manager. The Committee awarded increases in base salary to certain of the executive officers and managers of the Company.

Incentive Awards

In addition to paying a base salary, the Company offers certain of its executives and managers an opportunity to earn discretionary incentive bonuses as a component of overall compensation based on the performance of the individual and the individual’s business unit. For the fiscal year ended September 30, 2004, the Committee awarded bonuses to certain of the Company’s executives and managers.

CEO Compensation

As of September 2003 and 2002, the Chief Executive Officer had accrued approximately $450,000 and $405,000 of severance benefits for serving as Chairman of the Board of the Company’s subsidiaries, Pipasa and As de Oros as a result of his approximate over 30 years of employment with the subsidiaries. During fiscal year 2002, the subsidiaries of the Company authorized the Chief Executive Officer to apply approximately $275,000 as an advanced payment with respect to his accrued severance benefits. In September 2003, the Chief Executive Officer resigned as Chairman of the Board of the subsidiaries. In accordance with Costa Rican law, Mr. Chaves was entitled to receive his remaining accrued severance benefits and accordingly was authorized to apply approximately $175,000. Approximately $425,000 of the severance benefits which Mr. Chaves was authorized to receive in 2002 and 2003 were used to satisfy interest expenses on outstanding loans owed to the subsidiaries by the Chief Executive Officer. The remaining $25,000 was set aside in a reserve account for the payment of Mr. Chaves’ future interest obligations and, as of December 31, 2003, had been used by the Company in its entirety towards interest payments owed on Mr. Chaves’ indebtedness during the first quarter of fiscal 2004. No cash was disbursed or paid to the Chief Executive Officer in these transactions. In light of his receipt of these severance benefits, Mr. Chaves was not paid any salary or bonus during fiscal 2004.

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PERFORMANCE GRAPH

The following graph sets forth the cumulative total shareholder return on the Company’s Common Stock over the last six fiscal years, as compared to the total returns of the NASDAQ Stock Market Index and a group of peer companies (the “Peer Group”). The graph assumes $100 was invested on September 30, 1999 and that all dividends were reinvested in the Company’s Common Stock, the NASDAQ Stock Market Index and the Peer Group.

Because trading of the Company’s Common Stock on the AMEX was halted from January 21, 2003 until the end of the fiscal year ended September 30, 2003, the graph has been prepared using the closing price of the Company’s Common Stock as reported by the AMEX on January 21, 2003.

The Peer Group includes the Company, Cagle’s, Inc., Pilgrim’s Pride Corporation (CLA and CLB) Sanderson Farms, Inc., Seaboard Corporation and Tyson Foods, Inc. The Peer Group consists of companies that are engaged in the poultry slaughtering and processing business. Companies included in the Peer Group were weighted by market capitalization from the beginning of each period for which a return is indicated.

ASSUMES $100 INVESTED ON SEPTEMBER 30, 1999

ASSUMES DIVIDEND REINVESTED

FISCAL YEAR ENDING SEPTEMBER 30, 2004

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of December 22,, 2004, the number of shares of Common Stock of the Company which were owned beneficially by (i) each person who is known by the Company to own beneficially more than 5% of its Common Stock, (ii) each director and nominee for director, (iii) certain executive officers of the Company, and (iv) all directors and officers as a group. Unless otherwise indicated, the address of each beneficial owner is Rica Foods, Inc., Wachovia Financial Center, 200 South Biscayne Boulevard, Suite 4530 Miami, FL 33131.

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On December 22, 2003, Calixto Chaves (“Mr. Chaves”), Monica Chaves (“Ms. Chaves’), JP Chaves, Comercial Angui and certain other shareholders (the “Selling Shareholders”), sold (the “Stock Sale”) all 9,933,154 shares of the common stock held by the Selling Shareholders (the “Shares”), representing approximately 77.2% of the Company’s issued and outstanding shares of common stock, to Avicola Campesinos, Inc., a Nevada corporation (“Avicola”), for a cash purchase price of approximately U.S.$12.5 million.

The Company has been informed that Avicola is wholly owned by Tenedora G.S., S.A., a Costa Rican corporation (“Tenedora”).

The Company has also been informed that Mavipel, S.A., a Costa Rican corporation (“Mavipel”), Inversiones Harenaz L III, S.A. (“Harenaz”), a Costa Rican corporation, CYS Asesores de Mercadeo y Finanzas, S.A, a Costa Rican corporation (“CYS”), Sarita Trading, S.A., a Panamanian corporation (“Sarita”), Corporacion Adral, S.A., Costa Rican corporation (“Adral”), Corporacion Aspila, S.A., a Costa Rican corporation (“Aspila”), Hoy por Hoy, S.A., a Costa Rican corporation (“Hoy”), Asociacion Solidarista de Empleados Grupo Sama y Afines, a Costa Rican labor entity (“ASEGSA”) and Quirinal, S.A. (“Quirinal”) are the holders of approximately 39.79%, 11.96%, 10.82%, 13.4%, 8.1%, 9.2%, 2.3%, 1.7%, and 2.8%, respectively of the outstanding common stock of Tenedora. Together, Mavipel, Harenaz, CYS, Sarita, Adral, Aspila, Hoy, ASEGSA and Quirinal may be deemed to control Tenedora.

The Company has also been informed that Elsie Roman, the wife of Victor Oconitrillo, is the holder of 100% of the outstanding common stock of Mavipel. Henry Zamora is the holder of 100% of the outstanding common stock of Harenaz. Rolando Cervantes is the holder of 100% of the outstanding common stock of CYS. Edgar Rodriguez is the holder of 100% of the outstanding common stock of Sarita. Oscar Arias is the holder of 100% of the outstanding common stock of Adral. Robert Aspinall is the holder of 100% of the outstanding common stock of Aspila. Oscar Hernandez is the holder of 100% of the outstanding common stock of Hoy. Alfonso Gutierrez is the holder of 100% of the outstanding common stock of Quirinal.

The Stock Sale was conditioned upon the approval of the board of directors of the Company, which was granted after the board considered a number of factors, including the following:

The Purchasers conditioned the closing of the Stock Sale on the Company’s electing seven affiliates of Avicola to serve on the eight person board of directors of each of the Company’s subsidiaries and elected affiliates of Avicola to serve as the president, vice president, secretary, treasurer and controller of each subsidiary.

The Company has been informed that, in order to fund the purchase of the Shares, on December 15, 2003 (the “Effective Date”), Avicola entered into a financing agreement (the “Financing Agreement”) with Servicios Bursatiles Internacionales Sociedad Anonima (“SBI”), a Panamanian corporation pursuant to which SBI extended a loan to Avicola in the amount of approximately $12.5 million (the “Purchase Loan”). The entire Purchase Loan was used by Avicola to purchase the Shares.

Under the terms of the Financing Agreement, interest on the Purchase Loan will be payable annually, with the first payment due one year from the Effective Date, at the rate of prime plus four. The outstanding principal amount of the Purchase Loan plus any accrued but unpaid interest will be payable on December 15, 2008. As security for the Purchase Loan, Avicola has pledged the Shares to SBI pursuant to the terms of a stock pledge agreement. In addition, Tenedora has extended a guarantee with respect to the Purchase Loan.

Potential Change in Control

As indicated above, as security for the Purchase Loan, Avicola has pledged the 9,933,154 shares of Common Stock purchased in the Stock Sale to SBI pursuant to the terms of the Stock Pledge Agreement. Pursuant to the Stock Pledge Agreement, Avicola has agreed that it shall not sell, assign or otherwise transfer any of the 9,933,154 shares of Common Stock to any person except to SBI.

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The Stock Pledge Agreement contains certain ordinary default provisions. In addition, in the event that, among other things, (i) Avicola or the Company defaults in any payment of principal or interest on any indebtedness, except the Purchase Loan, in excess of $250,000 beyond the grace period, if any or (ii) Avicola or the Company defaults in the observance or performance of any other agreement or condition relating to any indebtedness, except the Purchase Loan, or any other event shall occur, the effect of which default or other event is to cause or permit the holders of such indebtedness to cause such indebtedness to become due prior to its stated maturity, SBI can, among other things, take ownership of or sell any or all of the 9,933,154 shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Party Guarantees

Since the Company’s inception in 1969 and since 1991, Mr. Chaves and Mr. Quesada, respectively, have personally guaranteed the repayment of the various notes, loans and credit facilities (the “Credit Arrangements”) of the Company and its various operating subsidiaries. As of September 30, 2004, none of the Company’s Credit Arrangements were personally guaranteed by either Mr. Chaves or Mr. Quesada.

The Company agreed to compensate Mr. Chaves for the guarantee services described above in an amount equal to 1% per annum of the aggregate loan amount subject to his personal guarantee (the “Financial Service Fee”). In satisfaction of the Financial Service Fee, the Company will, as of the end of each fiscal quarter, make a quarterly payment to Mr. Chaves in an amount equal to .25% of the daily average aggregate loan balance subject to the personal guarantees (the “Quarterly Payment”). If, as of the end of the fiscal quarter, Mr. Chaves is indebted to the company, Mr. Chaves has the option in his sole discretion to either, (i) direct the Company to use the quarterly payment to off-set the amount he owes the Company or (ii) receive the Quarterly Payment in cash. Mr. Quesada does not receive, nor has he ever received, any compensation for providing the guarantee services described above.

For the fiscal years ended September 30, 2004 and 2003, the Company has incurred a Financial Service Fee to Mr. Chaves in the amount of $74,273 and $262,765, respectively, which amount was used to offset indebtedness owed by Mr. Chaves to the Company. The entire Financial Service Fee incurred by the Company during the fiscal year ended September 30, 2004 was incurred by the Company during the first quarter of fiscal 2004. As discussed below, the Company ceased compensating Mr. Chaves for the Guarantee Services effective December 31, 2003.

On December 22, 2003, Mr. Chaves sold all of his shares of the Company’s common stock to Avicola Campesinos, Inc. In connection with such sale, Mr. Chaves entered into an agreement with the Company whereby he has agreed to indemnify the Company from and against any losses or damages caused by his failure within the 2004 calendar year to provide, if requested, his personal guarantee with respect to any loan which he has previously guaranteed and the Company is seeking to defer repayment of. There can be no assurances that Mr. Chaves’ future guarantees will be sought by the Company’s lenders and, if sought, will be procured. Effective December 31, 2003, the Company, with Mr. Chaves agreement, decided to discontinue its practice of compensating Mr. Chaves for the Guarantee Services.

Commencing in September 2003, Tendedora, S.A. (“Tenedora”), the parent company of the Company’s majority shareholder, Avicola Campesinos, Inc., and Grupo SAMA, S.A. (“SAMA”) began providing guarantees (the “Tenedora Guarantees” and the “SAMA Guarantees”, respectively) for certain of the indebtedness that the Company obtained from BICSA. As of September 30, 2003, Tenedora and SAMA had guaranteed approximately $1.7 million and $657,000, respectively, of the Company’s outstanding indebtedness to BICSA. Both Tenedora and SAMA continued to provide guarantee services to the Company throughout the 2004 fiscal year. During 2004 fiscal year, the weighted average amount of the Tenedora Guarantees and the SAMA Guarantees was approximately $6.4 million and $3.6 million, respectively. As of September 30, 2004, the outstanding amount of the Tenedora Guarantees and the SAMA Guarantees was $8.6 million and $6.4 million, respectively. During the 2004 fiscal year, certain of the BICSA indebtedness secured by the Tenedora Guarantees was also secured by the Trust and the SAMA Guarantees and all of the BICSA indebtedness secured by the SAMA Guarantees was also secured by the Trust and the Tendora Guarantees. During the 2004 fiscal year, certain of the indebtedness of BICSA was also guaranteed by the Trust. SAMA ceased providing guarantee services to the Company on September 30, 2004; however, Tenedora has continued to provide guarantee services to the Company during the first quarter of 2005.

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Loans to Related Parties

At various times in the past, Mr. Chaves and companies controlled by him have borrowed money from the Company. Since September 30, 2002, Mr. Chaves’ largest aggregate amount of indebtedness outstanding occurred at September 30, 2001. The loans made to Ribera, Atisbos and O.C.C., all Costa Rican companies owned by Mr. Calixto Chaves and his wife, were evidenced by thirteen promissory notes payable on demand (the “Loans”), nine of which are denominated in U.S. dollars and accrue interest at the rate of 8%, and four of which are denominated in Costa Rican colones and which accrue interest at rates ranging from 16% to 24%.

The amounts outstanding from Core as of September 30, 2003 and 2002 , include a promissory note of $128,628, bearing an interest rate of 11%, and other account receivables that originate mainly from expenses incurred in a due diligence process.

Mr. Chaves had provided collateral for the Loans by the subscription of a guarantee trust contract for the benefit of Pipasa. The guarantee contract contained two assets, two farms, with an aggregate value of approximately $4 million, as estimated by real estate brokers as of May 2002.

Repurchase of Preferred Stock

On September 29, 2004, the Company’s Board of Directors authorized management to repurchase from Inversiones Leytor, S.A., Atisbos de Belen, S.A. and O.C.C., S.A. (the “Controlled Companies”) companies controlled by Calixto Chaves, the Chief Executive Officer, an aggregate of 151,400 shares of preferred stock of Pipasa (the “Preferred Shares”). In exchange for the Preferred Shares, the Company issueed to the Controlled Companies promissory notes (the “Notes”) in the aggregate amount of $341,445, which is the US dollar equivalent of the amount the Controlled Companies paid for the Preferred Shares in colones (the “Preferred Share Cost”). The Preferred Shares entitled the Controlled Companies to an annual dividend ranging from 10% to 14% of the Preferred Share Cost, payable in perpetuity. The Notes, denominated in colones, bear interest at the annual rate of 10% and mature five years from the date of issuance. (See Foot Note 9 of the Financial Statements)

Litigation Settlement

Until December 2003, Pipasa was one of two defendants in a lawsuit brought in Costa Rica, pursuant to which the plaintiff in such action was seeking damages in an amount equal to $3.6 million. The other defendant in the litigation was Aero Costa Rica, S.A. (“Aero”), a corporation that, prior to entering receivership, was wholly owned by Mr. Chaves.

On December 29, 2003, Pipasa entered into a settlement agreement (the “Settlement Agreement”) with Polaris pursuant to which Mr. Chaves provided Polaris with a one-time payment in the amount of $1,950,000 (the “Settlement Amount”) in exchange for Polaris’ agreement to dismiss any and all litigation instituted against Pipasa and release any and all claims which they have or may have against Pipasa in connection with the Litigation, except for any claim that may arise in connection with the Indemnification Obligation (as defined below). Mr. Chaves has entered into an agreement with the Company pursuant to which he has acknowledged and agreed that his payment of the Settlement Amount is neither an equity investment in the Company nor a loan to the Company. See Item 3 for further discussion.

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Indemnification Agreement

In connection with the Stock Sale, the Chief Executive Officer entered into an agreement (the “Indemnification Agreement”) with the Company whereby he has agreed to indemnify the Company from and against any losses or damages caused by his failure within the next year to provide, if requested, his personal guarantee with respect to any loan which he has previously guaranteed and the Company is seeking to defer repayment of. Pursuant to the Indemnification Agreement, the Chief Executive Officer has also agreed to indemnify the Company from and against certain damages or losses that could directly or indirectly result from or in connection with the Stock Sale.

Future Acquisition Agreement

In connection with the Stock Sale, Avicola entered into an agreement with the Company pursuant to which Avicola and its affiliates have agreed to refrain from purchasing any additional shares of the Company’s Common Stock for a one-year period from the date of the Stock Sale unless the per share price paid by Avicola or its affiliates for any additional shares is greater than or equal to the greater of (i) 100% of the purchase price paid for the shares purchased pursuant to the Stock Sale or (ii) the lowest price per share identified by an investment bank as a fair price in a fairness opinion delivered to the Company.

Consulting Agreement

Pursuant to a Consulting Agreement dated as of June 1, 2003 between Grupo SAMA Consolidado, S.A., a Panamanian corporation (“SAMA”), and the Company (the “Consulting Agreement”), various employees of SAMA began providing the Company with financial and strategic advisory services with respect to a variety of different matters related to the restructuring of the Company’s indebtedness, including:

(i) negotiating on behalf of the Company with respect to the prepayment of the PacLife indebtedness, including negotiating with Banco Internacional de Costa Rica (“BICSA”) to assist the Company to secure from BICSA an approximate $8.5 million loan enabling the Company to prepay the PacLife indebtedness;

(ii) negotiating with the Company’s key suppliers of raw materials to assist the Company to maintain its existing lines of credit with such suppliers;

(iii) negotiating with many of the Company’s creditors to assist the Company in restructuring certain of its existing credit lines; and

(iv) negotiating on behalf of the Company with respect to the settlement of the litigation with Polaris. See Item 3 for further discussion of the settlement of the Polaris litigation.

Pursuant to the Consulting Agreement, which has a three year term, the Company has agreed to compensate SAMA for the above-described services in the amount of up to $120,000 per month ($75,000 beginning July 2004). Except for the payments made to SAMA pursuant to the Consulting Agreement, the Company believes that neither the Company nor any third party has made any payments to SAMA with respect to the financial and strategic advisory services SAMA has provided to the Company.

Certain principals of SAMA, including Victor Oconitrillo, Pedro Dobles, Carlos Ceciliano, Alfonso Gutierrez, Eladio Villalta, Henry Zamora and Rolando Cervantes serve as executive officers and/or directors of the Company and Pipasa. Subsidiaries. More specifically, Mr. Oconitrillo serves as President, Chairman of the Board and as a Director of the Company and as President of Pipasa, Mr. Dobles serves as Vice President of Pipasa, Mr. Villalta serves as Treasurer and as a Director of the Company and as Treasurer of Pipasa, Mr. Gutierrez serves as Secretary and as a Director of the Company and as Secretary of Pipasa, and Mr. Ceciliano serves as a Director of the Company and as Supervisor of the Board of Directors of Pipasa. Mr. Zamora and Mr. Cervantes each serve as a director for Pipasa as do Mr. Oconitrillo, Mr. Dobles, Mr. Ceciliano, Mr. Gutierrez and Mr. Villalta. In addition, each of Mr. Oconitrillo, Mr. Gutierrez, Mr. Zamora and Mr. Cervantes wholly own corporations which own shares in Tenedora, the sole shareholder of Avicola, which following the Stock Sale owns a majority of the Company’s Common Stock.

Investments – (Cash Equivalents)

As of September 30, 2004, the Company was indirectly holding approximately $1 million of short-term investment products, including certificates of deposit and investment fund investments (collectively, the “SAMA Investments”), that are directly or indirectly offered by Inversiones SAMA, S.A. (Puesto de Bolsa) and SAMA Sociedad Administradora de Fondos de Inversión, affiliates of SAMA. It is the Company’s understanding that such investment products are generally available to other clients of SAMA. The Company estimates that, during the fiscal year ended September 30, 2004, SAMA and/or its affiliates have received in the aggregate less than $60,000 of fees and/or commissions from the Company and/or its subsidiaries in connection with such SAMA Investments.

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Proposed Transactions

The Company is continuing to explore the development and/or acquisition of strategic business opportunities that it perceives as complementary with its core business. For instance, in December 2000, the Company announced its intent to acquire a majority of the outstanding common stock of Avicola Core Etuba, Ltda. (“Core”), a Brazilian company engaged in the production and distribution of poultry products, from the Company’s Chief Executive Officer. In March 2001, the Company agreed to acquire a 75% stake of Core for $3.5 million, and an option for the remaining 25% stake for $1.7 million. The Company is evaluating closely the performance of Core to determine if, when and how the Company should integrate its business with Core, and has postponed indefinitely its acquisition of Core.

On February 20, 2003, Port Ventures, S.A. (“Port Ventures”) and As de Oros entered into a Stock Purchase Agreement pursuant to which As de Oros agreed to acquire from Port Ventures 2,040 shares of common stock of Logistica de Granos, S.A. (“Logistica”), representing 51% of the issued and outstanding shares of capital stock of Logistica for a purchase price of US$2,580,000.

Port Ventures is the sole shareholder of Logistica and Port Ventures is directly owned and controlled by Jose Pablo Chaves Zamora (“Mr. JP Chaves”). Prior to the Stock Sale on December 22, 2003, Mr. JP Chaves was the indirect holder of approximately 2.17% of the outstanding shares of the Company. Mr. JP Chaves is also the son of the Company’s Chief Executive Officer, Mr. Calixto Chaves. Mr. JP Chaves does not hold any positions or titles with the Company or any of its subsidiaries. Se Item 1 for further discussion of the potential acquisition of Logistica.

There can be no assurance that the Company will close the Core or Logistica transactions or any other transaction and there can be no assurance that the Company’s acquisition efforts will prove to be beneficial to the Company.

ITEM 14. PRINCIPAL ACCOUNTANING FEES AND SERVICES

AUDIT FEES

Stonefield Josephson, Inc. (“Stonefield”) performed the audit of the Company’s annual financial statements for the fiscal years ended September 30, 2003 and September 30, 2004. The aggregate fees billed for professional services rendered by Stonefield for the audit of the Company’s annual financial statements for the fiscal year ended September 30, 2003 and the estimated fees for the audit for the fiscal year ended September 30, 2004 are as follows:

Stonefield reviewed the Company’s financial statements included in the Company’s Form 10-Qs during the fiscal year ended September 30, 2004 and 2003. The aggregate fees billed for professional services rendered by Stonefield for the review of such financial statements during the fiscal year ended September 30, 2004 and 2003 were as follows:

AUDIT RELATED FEES

No audit-related services were rendered by Stonefield in fiscal year 2003 or fiscal year 2004.

TAX FEES

The aggregate fees billed by Stonefield for professional services for tax compliance, tax advice and tax planning for the fiscal years ended September 30, 2003 and 2004 are as follows:

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ALL OTHER FEES

No other services were rendered by Stonefield in fiscal year 2003 or fiscal year 2004.

The Audit Committee has considered whether the provision of the non-audit services listed as “All Other Fees” are compatible with maintaining the independence of the Company’s independent auditors. Our Audit Committee has also pre-approved all services (audit and non-audit) to be provided to us by Stonefield. All of the audit and non-audit services performed by Stonefield in the 2004 and 2003 fiscal years were pre-approved by our Audit Committee.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The financial statements incorporated by reference in Item 8 of this Form 10-K are included beginning on page F-1 as follows:

(A) Independent Auditors’ Report

(B) Consolidated Balance Sheets for September 30, 2004 and 2003.

(C) Consolidated Statements of Income for the years ended September 30, 2004, 2003 and 2002.

(D) Consolidated Statements of Stockholders’ Equity for the years ended September 30, 2004, 2003 and 2002.

(E) Consolidated Statements of Cash Flows for the years ended September 30, 2004, 2003 and 2002.

(F) Notes to Consolidated Financial Statements for fiscal years 2004, 2003 and 2002.

(2) Financial Statement Schedules

The following financial Statement Schedule of Rica Foods, Inc. has been included herein:

All other financial statement schedules have been omitted as the required information is inapplicable or has been included in the Notes to Consolidated Financial Statements.

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(3) Exhibits

The following exhibit is filed with this report.

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SIGNATURES

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

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

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Rica Foods, Inc.

We have audited the accompanying consolidated balance sheets of Rica Foods, Inc. (a Nevada corporation) and subsidiaries as of September 30, 2004 and 2003, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2004. Our audits also included the financial statement schedule listed in Item 15(a)2. These consolidated financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Rica Foods, Inc. and subsidiaries as of September 30, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2004, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the related financial statement schedule when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

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RICA FOODS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

September 30, 2004 and 2003