<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-K

                    Annual Report under Section 13 or 15(d)

                     Of the Securities Exchange Act of 1934

                 For the Fiscal Year Ended: September 30, 1999
                          Commission File No. 0-18222

                                RICA FOODS, INC.

             (Exact Name of Registrant as specified in its charter)

                 Nevada                                     87-0432572

(State or other jurisdiction of incorporation)     (IRS Employer File Number)

                           95 Merrick Way, Suite 507
          Coral Gables, Florida                              33134

  (Address of principal executive offices)                (Zip code)

                         (305) 476-1757, (305) 476-1760

       (Registrant's telephone and facsimile number, including area code)

        Securities Registered Pursuant to Section 12(b) of the Act: None

          Securities Registered Pursuant to Section 12(g) of the Act:

                          Common Stock $.001 par value

                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or

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for, such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

                                    Yes X No

Check if there is no disclosure  of delinquent  files in response to Item 405 of
Regulation S-K is contained in this form and no disclosure  will 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. ()

Issuer's revenues for its most recent fiscal year $118,549,625.

The  aggregate  market  value  of the  voting  stock of the  Registrant  held by
non-affiliates as of January 5, 2000 was approximately  $51,386,802.  A total of
4,194,841 shares were owned by non-affiliates as of December 29, 1999.

The number of shares  outstanding of the  Registrant's  common stock,  as of the
                        latest practicable date, January 5, 2000 was 12,847,921.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the 1999 Annual Report to Shareholders        Parts I, II  and IV

Portions of the Proxy Statement for the 1998 Annual
  Meeting of Shareholders                                 Parts I, III and IV


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                                RICA FOODS, INC.

                               TABLE OF CONTENTS

                                                                           Page

                                     PART I

Item 1.  Description of Business..........................................   1
Item 2.  Properties.......................................................  11
Item 3.  Legal Proceedings................................................  12
Item 4.  Submission of Matters to a Vote of Security Holders .............  13

PART II

Item 5.  Market for the Registrant's Common Stock and Related
           Stockholders Matters...........................................  15
Item 6.  Selected Financial Data..........................................  16
Item 7.  Management's  Discussion and Analysis of Financial
           Condition and Results of Operations............................  17
Item 7.A.Quantitative and Qualitative Disclosures about Market Risk.......  29
Item 8.  Financial Statements and Supplementary Data......................  31
Item 9.  Changes in or Disagreements with Accountants on Accounting
           and Financial Disclosures......................................  31

                                    PART III

Item 10. Directors and Executive Officers, Promotors and Control
           Persons........................................................  32
Item 11. Executive Compensation...........................................  36
Item 12. Security Ownership of Certain Beneficial Owners and
           Management.....................................................  36
Item 13. Certain Relationships and Related Transactions...................  38

                                    PART IV

Item 14. Exhibits, Financial Statements Schedules and Reports on Form
           8-K............................................................  39


<PAGE>

PART 1
------

ITEM 1.  DESCRIPTION OF BUSINESS

BACKGROUND

RICA FOODS, INC.,  formerly Costa Rica  International,  Inc. (the "Company") was
incorporated  under the laws of the state of Utah on  February 6, 1986 under the
name CCR,  Inc. The Company  undertook a public  offering of its  securities  in
1987. In 1994, the Company changed its name to Quantum  Learning  Systems,  Inc.
and its state of incorporation to Nevada. On August 5, 1996, the Company changed
its name to Costa Rica  International,  Inc.,  and on May 29, 1998,  the Company
changed its name to RICA FOODS, INC., to better reflect its core business.

In April, 1996,  Corporacion Pipasa, S.A. and Subsidiaries  ("Pipasa"),  a Costa
Rican  corporation,  entered into an agreement and plan of  reorganization  (the
"First  Pipasa  Agreement")  with the  Company,  pursuant  to which the  Company
acquired  59.56% of the common  stock of Pipasa in exchange  for the issuance of
5,191,190  (15,573,571  pre-split)  shares of the Company's  common stock to the
stockholders  of Pipasa.  The First Pipasa  Agreement  provided that the Company
could  acquire the  remaining  40.44% of the common stock of Pipasa on or before
September 30, 1997.  The  additional  purchase of the common stock of Pipasa did
not occur by that date.

The consolidated  financial  statements of the Company reflect the September 30,
1996 acquisition of Pipasa as a reverse acquisition,  whereby Pipasa was treated
as the accounting acquiror and the Company as the legal acquiror.

In July 1998, an independent committee comprised of minority shareholders of the
Registrant  and  Management  of  Pipasa  resumed   discussions   concerning  the
acquisition by the Company of the remaining  40.44% of Pipasa's common stock. On
September 28, 1998, the Company and Inversiones La Ribera,  S.A.  ("Ribera"),  a
Costa Rican corporation  controlled by Calixto Chaves, the Company's  President,
Chief Executive Officer and principal shareholder entered into an agreement (the
"Final  Pipasa   Agreement")   providing  for  the  purchase  of  the  remaining
outstanding  common  stock of Pipasa  held by Ribera in exchange  for  3,683.595
(11,050,784  pre-split)  shares of the Company's  common stock. The Final Pipasa
Agreement  was amended on November 9, 1998, to provide that the  transaction  be
subject  to (I) the  receipt  of an opinion  from an  independent  firm that the
transaction   was  fair  from  a  financial  point  of  view  to  the  Company's
stockholders  and (II) approval of the  transaction  by holders of a majority of
the issued and  outstanding  common stock of the Company.  In December 1998, the
Company  received  approval of the  transaction  by holders of a majority of the
issued and outstanding common stock of the Company. In January 1999, the Company
received a fairness opinion from an independent  consultant  confirming that the
transaction   is  fair  from  a  financial   point  of  view  to  the  Company's
stockholders.

On February 26, 1998, the Company consummated an agreement with Comercial Angui,
S.A.,  a  Costa  Rican  corporation  ("Comercial  Angui")  (the  "Original  Oros
Agreement") to purchase 56.38% of the outstanding common stock of Corporacion As
de Oros, S.A., and Subsidiaries, a

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Costa  Rican   corporation  ("As  de  Oros"),   held  by  Comercial  Angui,  for
consideration  consisting of (I) a promissory  note with a stated amount of $2.4
million due in January,  2000, and (II) 815,686 (2,447,058  pre-split) shares of
the Company's common stock,  having a then current market value of approximately
$2.6 million.  Soon  thereafter,  an independent  committee of stockholders  and
Management of the Company  commenced  discussions  with Comercial  Angui and its
sole shareholder,  Antonio Echeverria,  concerning the possibility of purchasing
the remaining outstanding shares of As de Oros held by Comercial Angui.

The purpose of this  proposed  transaction,  as in the case of the  agreement to
purchase  the  remaining  minority  interest  in Pipasa,  was to  eliminate  the
minority  ownership of As de Oros and to consolidate both the operations and the
financial  results  of  Pipasa  and As de Oros  and  Pipasa  (collectively,  the
"Subsidiaries")  in  the  Company's  financial  statements.   Subsequently,   on
September 28, 1998,  the Company and  Comercial  Angui entered into an agreement
(the "Final Oros  Agreement") to purchase  Comercial  Angui's  remaining  43.62%
interest  in As de  Oros  for  1,670,921  (5,012,762  pre-split)  shares  of the
Company's  common stock.  On November 9, 1998,  the Company and Comercial  Angui
entered  into an  amendment  to the Final Oros  Agreement,  which  mirrored  the
amendment to the Final Pipasa  Agreement,  that  provided  that the  transaction
would not be  consummated  until (I) the holders of a majority of the  Company's
common stock approved the transaction,  and (II) the Company received a fairness
opinion  that the  transaction  was fair to the  Company's  stockholders,  which
approval and receipt were  acknowledged  on  December,  1998 and January,  1999,
respectively.

REVERSE STOCK SPLIT

On December 15, 1998,  the Board of Directors  declared a 1 for 3 reverse  stock
split (the  "Split") of the  Company's  common stock to be effective on December
29, 1998. In connection with the Split, new  certificates  were issued and those
stockholders  owning more than five shares of common  stock,  on the Split date,
received  one full  share for each  fraction  of a share to which  they would be
entitled.  Each  shareholder  holding less than 5 shares of common stock, on the
effective date, received a payment in cash for the fractional share held by them
based on the mean of the bid and ask price on the  effective  date of the Split.
All shares amounts have been restated to reflect the reverse stock split.

SUBSEQUENT EVENTS - ACQUISITIONS

On November 22, 1999, the Company  consummated  the acquisition of the remaining
43.62% or 654,300  shares of common stock of As de Oros in  accordance  with the
terms and conditions in the Final Oros  Agreement.  In exchange for the purchase
of 100% of As de Oros,  the  Company has issued to Angui,  a total of  2,486,407
shares of Company  common  stock.  With the November 22, 1999  acquisition,  the
Company  has  increased  the  ownership  interest  in As de  Oros  to  100%,  in
comparison to a 56.38% majority interest reflected as of September 30, 1999.

On December 7, 1999, the Company  consummated  the  acquisition of the remaining
the 40.44% or 1,840,000 shares of common stock of Pipasa,  pursuant to the Final
Pipasa  Agreement,  in exchange for a total of 3,683,595 shares of the Company's
common stock. With the transfer of

                                      -2-
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the shares,  the Company has increased the ownership interest in Pipasa to 100%,
in comparison to a 59.56% majority interest, reflected as of September 30, 1999.

FINANCING

In February  1998,  the Company  consummated  the  refinancing  of a part of its
Subsidiaries'  debt  through the  issuance of an aggregate of $20 million of the
Company's  11.71% Series A Senior Notes and Series B Senior Notes (the "Notes").
Principal  payments on both Notes will be made from  January  15,  2001  through
January 15, 2005 in five annual  installments  of  $4,000,000.  These Notes were
placed through  Citicorp  Securities,  Inc. Through the proceeds of these Notes,
the Company  repaid $8 million and $12  million of the  indebtedness  of its two
subsidiaries, Pipasa and As de Oros, respectively.

BUSINESS OF THE COMPANY

The Company's  operations are largely  conducted  through Pipasa and As de Oros,
its two largest  subsidiaries.  Pipasa,  founded in 1969, is the largest poultry
company in Costa Rica with a market  share of  approximately  50% of the chicken
meat market in Costa Rica.  The main  activities of Pipasa entail the production
and sale of fresh and frozen poultry,  processed  chicken  products,  commercial
eggs and concentrate for livestock and domestic animals.  Pipasa has been in the
poultry business for more than 30 years with more than 14 years of experience in
exports.

As de Oros,  founded in 1954, is Costa Rica's second largest  poultry  producer,
comprising  approximately  20% of the country's poultry market and is one of the
leaders  in  the  Costa  Rican  animal  feed  market  with  a  market  share  of
approximately 27%. As de Oros also owns and operates a chain of 33 fried chicken
quick service  restaurants in Costa Rica called  "Restaurantes  As de Oros". The
Company's  Subsidiaries  own a total of 60 urban  and rural  outlets  throughout
Costa Rica, three modern processing plants and three animal feed plants.  Due to
similar business activities,  the combined operations of the Subsidiaries permit
the Company to achieve operational efficiencies.

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,  Subway,
Kentucky  Fried  Chicken and Pizza Hut  franchises,  Price Smart,  Taco Bell and
Gerber Products companies.  In addition, the Company,  through its Subsidiaries,
was selected by the McDonald's  Corporation  to be one of its poultry  suppliers
for  all  of  Central   America.   During  fiscal  1999,  the  Company  invested
approximately  $5 million in productive  assets in its  Subsidiaries,  which has
increased efficiency and output.

The  Company's  Subsidiaries  do not depend on the sales of only one product but
rather a  diversity  of lines of  products  available  at a range of prices  and
presentations,   which  represent  an  important   strategic   strength  of  the
Subsidiaries.  The Company produces over 500 different products to meet consumer
demands.


                                      -3-
<PAGE>

SEGMENTS

Information  regarding the Company's segments for the last three fiscal years is
set  forth  in  the  Company's  Fiscal  1999  Annual  Report,  note  15  to  the
consolidated   financial   statements.   Such  information  is  incorporated  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. The per
capita  consumption of poultry in Costa Rica has increased from 18.5 kilos (40.7
lbs.) in 1998 to 20.25 (44.6 lbs.) in 1999, a 9.5% increase  during that period.
Poultry is  consumed  by all  social  levels  and is not  defined by  geographic
markets.  The popularity of poultry in Costa Rica extends beyond broiler chicken
and includes chicken by-products,  such as sausages and cold cuts. The Company's
main brand  names for broiler  chicken,  chicken  parts,  mixed cuts and chicken
breasts are Pipasa(TM) and As de Oros(TM).  Broiler chicken is a generic product
that is directed to customers of all social and  economic  levels.  Recent polls
and consumer  information indicate that Costa Ricans eat chicken at least once a
week. Chicken is sold to institutional clients, schools, hospitals,  restaurants
and small grocery stores. In Costa Rica, Pipasa currently  supplies Burger King,
Subway, Kentucky Fried Chicken and Pizza Hut franchises,  Price Smart, Taco Bell
and  Gerber  Products  companies.   It  was  also  selected  by  the  McDonald's
Corporation to be one of its poultry suppliers for all of Central America.

Chicken By-Products
-------------------

Chicken by-products include sausages, bologna, chicken nuggets, chicken patties,
frankfurters, salami and pate. Chicken by-products are a very profitable segment
of the business,  with gross margins as a percent of total  by-products sales of
approximately 44.24% for fiscal 1999. The Company's chicken by-products are sold
through the Kimby(TM), Chulitas(TM), 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.

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 and
domestic  pets.  The  Company's  animal  feed  products  are  sold  through  the
Ascan(TM),  Aguilar y Solis(TM),  Kanin(TM),  Mimados(TM) 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),  Kanin(TM) and Ascan(TM) brand
names are targeted  towards  veterinarians,  pet stores and supermarkets and are
sold typically to consumers with medium to higher income levels.  The Company is
currently the leader in the animal feed market in Costa Rica,  with a 27% market
share.


                                      -4-
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Restaurants
-----------

Restaurantes As de Oros operates 33 restaurants located in rural and urban areas
through out Costa Rica,  including express delivery service in some restaurants.
Restaurantes  As  de  Oros  is  a  quick  service  restaurant,  which  offers  a
diversified menu of chicken meals.  Restaurantes As de Oros distinguishes itself
from  other  quick  service  chains by  offering  dishes and using  recipes  and
ingredients  which  appeal  to the  taste of Costa  Ricans.  The  quick  service
restaurant  business is highly  competitive  in Costa  Rica.  During  1999,  and
continuing  into the next fiscal year, the Company will invest in remodeling the
facilities  of its  restaurants,  new cooking  equipment  and  establishing  new
marketing  strategies  to  emphasize  differentiation  from other quick  service
restaurants.

Exports
-------

Subsidiaries  of the Company  export  different  products to other  countries in
Central  America and the Caribbean.  The Company  exports mainly the Pipasa(TM),
Mimados(TM) and Kimby(TM) brand names.

Other
-----

This segment includes sales of commercial eggs,  non-recurrent  sales of fertile
eggs and raw material sales among others.  "Other" sales mainly include sales of
baby chicks and animal feed to integrated  producers,  who are local farmers who
raise and feed  poultry on behalf of the Company.  For fiscal 1999,  the Company
changed  its  method  of  accounting  for sales and  purchases  with  integrated
producers.  Beginning  on October 1, 1998,  baby  chicks,  animal feed and other
materials  transferred  to  integrated  producers  are  reflected  as In Process
Inventory,  as opposed to sales at cost,  as was  recorded  for fiscal  1998 and
1997. Sales to Other,  excluding integrated  producers,  make up less than 3% of
total sales for fiscal year 1999.

DISTRIBUTION NETWORK

The Company has a distribution  fleet consisting of  approximately  230 delivery
trucks specially designed to deliver poultry products. These 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  has  delivery  trucks  for animal  feed and also uses  independent
distributors  to  deliver  larger  quantities  of  this  product  to some of its
customers.

The Company's products are sold through supermarkets,  independent distributors,
the delivery  trucks that it owns or leases,  and urban and rural retail outlets
throughout  Costa Rica. 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  leased by the  Company.  Through  its
outlets,  the Company is able to  distribute  its products to customers in urban
and rural areas who may not have easy access to


                                       -5-
<PAGE>

supermarkets.  Prices of products sold in these retail  outlets are identical to
prices quoted in  supermarkets.  The  Company's  products are sold fresh as most
retail outlets are typically situated near the Company's processing  facilities,
which enable  trucks to make  deliveries  on a daily basis.  The products may be
sold by the unit or  wholesale.  Rural  outlets are  strategically  located near
major roadways and most are equipped with refrigeration  chambers that allow for
storage of chicken.  The Company plans to continue  investing in increasing  the
capacity  of cold room  storage of some  strategic  facilities  in order to meet
increased  sales plans  (specifically  for chicken  by-products).  The increased
capacity will enable distribution trucks to make more deliveries,  as trucks can
simply return to the nearest agency to reload,  as opposed to the main plant. In
total,  through its  distribution  fleet and outlets,  the Company sells to over
32,000 customers.

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 first and second quarters of the fiscal period.  This variation is primarily
the  result of  holiday  celebrations  during  this time of year 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

The primary raw material and main component for the Company's  products consists
primarily of corn and soybean meal.  Corn and soybean meal  purchases  represent
approximately  35% of total  cost of goods sold and 70% of raw  material  costs.
Historically,  the Company has been able to obtain satisfactory supply for 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.  The price of corn and soybean
meal, like most grain  commodities,  is fairly volatile and requires  consistent
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 gross profit margin.

The Company purchases its soybean meal through Industrias  Oleaginosas,  S.A., a
Costa Rican  corporation  ("INOLASA"),  in which the Company  holds a 10% equity
ownership.  In Costa Rica, there is a 5% tax for soybean meal imports,  which is
not  levied if  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 go directly to
the CBOT to purchase soybean meal.


                                      -6-
<PAGE>

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 loss
of any single customer would not have a material adverse effect on the Company's
business.

BACKLOG OF ORDERS

At September 30, 1999, the Company had no backlog of sales orders.

FOREIGN COMPETITION

The Company does not have any  significant  domestic  competition at the present
time. The Company's local market share, however, could potentially be threatened
by foreign competition.  The Company believes that the likelihood of this is low
for several reasons.  First,  the Company has a strong  reputation for producing
high quality products at a reasonable  price.  Costa Ricans prefer fresh chicken
to frozen  chicken.  Due to  transportation  constraints  and distance,  foreign
competitors  would have to sell frozen  chicken if they were to sell  chicken in
Costa Rica.

The Agriculture Ministry in Costa Rica monitors all chicken entering the country
to prevent the spread of Newcastle Disease in Costa Rica. The Costa Rican market
is also compensated by tariff agreements at the present time.  Chicken importers
must pay  duties as  dictated  by the  General  Agreement  on Trade and  Tariffs
("GATT").  These  agreements  were  reached  at the  Uruguay  Round  of the GATT
negotiations and are due to expire in 2004.  These  agreements  provide that for
fiscal year 1999,  only 1,000  metric tons ("MT") of poultry  meat and 117 MT of
poultry  by-products  of whole  chicken  parts  or  chicken  derivatives  can be
imported to Costa Rica from  countries  outside of the Central  American  Common
Market. This quota is taxed at a rate of 34% and amounts in excess of this quota
are subject to a 166% tariff, except for whole chicken and breast cut, which are
subject to a 40% tariff.  For the fiscal year 2000 tariffs have been  negotiated
to reach a 158% tariff. These tariff rates were based on the average sales price
of poultry  meat in Costa Rica  compared to the  average  sales price of poultry
meat in the United States of America.

PRICING

In Costa Rica,  there are no laws against  monopolies;  however,  there are laws
against monopolistic practices.  Companies which 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.  Given these  guidelines,  the
Company's  pricing  strategies  are  influenced  by two main  factors:  industry
conditions and currency devaluation. The Company will use its financial model to
increase prices in order to mitigate the effect of the devaluation of the colon,
the functional  currency of Costa Rica.  During the last 10 years, the colon has
devalued at an annual average rate of 13.11%, which the Company has mitigated by
increasing prices.  During the year ended September 30, 1999, the colon devalued
10.81% and the  Company  mitigated  this  devaluation  by  increasing  prices on
average by 11.19% for its chicken, meat by-products and animal feed segments.



                                      -7-
<PAGE>


In terms of consumer  reaction  to price  increases  within the chicken  broiler
segment,  there is little  differentiation  for customers between one competitor
and another.  Instead,  prices are set by the leader, which in Costa Rica is the
Company's  subsidiary,  Pipasa.  Given the consistent increase in chicken prices
over the past 13 years,  the Company  believes it has excellent data on consumer
reactions to price increases.  According to past experience, a significant price
increase  leads to a temporary  decrease in sales that lasts  approximately  two
months.

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.  There  are  more  marketing  techniques
available for use by the Company,  such as packaging  presentations,  promotions
and sponsoring 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 its 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.

EMPLOYEES COMPENSATION AND INCENTIVES

As of December 29, 1999, the Company employed  approximately 3,700 persons.  The
senior  management  level  at the  Company  has on  average  almost  15 years of
experience  with the Company  which has enabled the  Company,  through  creating
efficient operations,  making strategic  acquisitions and producing high quality
products,  to achieve a market share of approximately  70% of the poultry market
in Costa Rica.

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  provide certain services such as credit,
recreational  facilities,  subsidized  housing,  and  healthcare  benefits.  The
success of the Employee's Solidarity Association  ("ASERICA") at the Company 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 recreational  facilities,  healthcare and
pension benefits as well as financial services to the Company's employees.  This
association  is located on land  donated by Mr.  Chaves and is among the largest
solidarity  associations  in Costa Rica.  The  association  has a swimming pool,
soccer field, outdoor sports, sauna and a 1,000-seat gymnasium facility.


                                      -8-
<PAGE>

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.  The Company has the policy to increase  the  salaries of all  employees
every six months to offset the effect of inflation. By law, each year, companies
are required to make a provision  equivalent  to 8.33% of an  employee's  yearly
gross  salary  as  severance,  which  must be paid  upon the  termination  of an
employee  without  just cause to a maximum  of eight  years of  employment.  The
employee  has the  option to have 5% of the 8.33%  paid to  ASERICA as part of a
savings incentive  program for as long as they work for the Company,  not just 8
years.  Few other  companies  in Costa  Rica  offer  this  option.  The  savings
incentive program works as follows:  The Company pays to ASERICA an amount equal
to 5% of the employee's  wages.  The employee then matches the 5% payment by the
Company.  In February of each year, the Company makes the final payment equal to
3.33% of the employee's total yearly gross salary.  Employees currently have the
option to, but are not required to,  deposit the remaining  3.33% into a pension
fund,  Operadora  de  Fondos  ("Complementarias"),   a  privately  held  company
administrated  by one of the country's  private banks.  ASERICA  manages all the
cash  generated  by the  savings  incentive  program  and  invests  in low  risk
financial  instruments  like  certificates  of deposit and other highly rated or
better investment financial instruments. Employees can borrow against the amount
in their  savings at a local  interest  rate of 18% to 30% and, once an employee
leaves the Company,  the employee is entitled to the total amount accumulated in
his/her severance and savings incentive account.

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.  All
companies  in Costa  Rica  must  pay the CCSS and the INS 21% and  1.74% of each
employee's  monthly  salary,  respectively.  The CCSS pays 70% 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, and 1% to the "Banco Popular" into an obligatory savings account.

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 budgeted  levels,  that entity will distribute a percentage of its net
income to its employees.  This incentive is calculated  monthly and  distributed
every two months.  The Company  encourages its employees to make a career at the
Company,  and accordingly,  in conjunction with a local university,  the Company
offers a business administration program for its employees. The main goal of the
program is directed toward  developing the Company's future  management team. In
addition,  the Human Resources  Department  offers in-house and outside training
for its employees in various fields, in order to assure quality in all areas.

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,  par value $.001
per share,  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, 1999, no shares had been issued under this plan.


                                      -9-
<PAGE>

POULTRY RAISING PROCESS

The poultry  raising  process  starts with the import of one-day old parent hens
from the United  States of  America.  Once these  hens  reach  their  egg-laying
period,  which takes about 20 weeks,  they produce fertile eggs,  which are then
incubated in order to produce baby  chicks.  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  independent  integrated
producers  who raise the chicken to full size  (typically a seven week  process)
and provide basic  elements such as vitamins,  formula and a balanced  ration of
feed.

The  integrated  producers are a group of 181 farmers who own their own land and
facilities.  The producers  have a long-term  contract with the Company to raise
the baby chicks to adult  birds with an average  weight of  1.87-kilograms  (4.1
1bs.). During fiscal 1999,  integrated  producers supplied  approximately 47% of
the total number of chickens  needed by the Company.  These  producers  are paid
according to the weight and quality of the chicken  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 raises the chickens or integrated producers do, the chickens
are regularly  inspected  for immune  deficiencies,  vitamin  levels and general
diseases. By working in conjunction with these integrated producers, 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.   The  Company's   processing  houses  are  among  the  most
sophisticated  and largest in the  country.  The plants'  capacity of process is
approximately 65 million  kilograms  annually.  The processing  plants are where
chickens  are  slaughtered  and the meat  packaged or  processed to make chicken
by-products.

Because Costa Rica has been declared free of Newcastle  Disease,  the Animal and
Plant Health Inspection Service ("APHIS"),  a U.S. governmental agency,  surveys
the  Company's  facilities  to ensure  that Costa Rica  continues  to be free of
Newcastle Disease.  The Company recently adopted the guidelines of the Hazardous
Analysis and Critical Control Points  ("HACCP"),  which are expected to be fully
implemented in the near future.  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.  For
example,  the temperature  must be carefully  controlled as microbial  growth is
encouraged  between 4-60 degrees  Celsius or 40-160  degrees  Fahrenheit.  HACCP
encourages employees to gain an in-depth understanding of total food production.
Employees  thus take an active role in  ensuring  food  quality  and safety.  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.


                                      -10-
<PAGE>

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.  A government  health  inspector is at the plant 24 hours a
day. Government  representatives  inspect every step of the processing cycle and
send meat samples to government laboratories for analysis for bacteria and other
organisms.  In addition to government inspectors,  the Company has its own staff
of inspectors  that take samples of meat at each step of the  production  cycle,
which is analyzed in the Company's laboratories. The Company has strict sanitary
processes  in order to provide  consumers  with  product  integrity,  safety and
quality.

The Company's cost of compliance  with laws and regulations is not considered to
be a burden on the Company nor does it have a material effect upon the Company's
capital  expenditures,  earnings or competitive  position.  The Company does not
anticipate that the costs of compliance  with laws and  regulations  will have a
material adverse effect in the future.

ENVIRONMENTAL COMPLIANCE

The Company has been and is practicing  sustainable  environmental policies such
as  reforesting,  processing  and  recycling  of its  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 the next fiscal  year,  the
Company  intends  to invest  approximately  $580,000  in  improving  its  sewage
treatment and rendering plants.

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.

ITEM 2.  PROPERTIES

The Company  conducts  its  operations  through its  production  facilities  and
executive offices, which are all located in Costa Rica. All facilities are owned
by the Company's  Subsidiaries:  Pipasa and As de Oros.  The following  contains
descriptions of the principal facilities:

PRODUCTION AREA

The production  area  has  the following  divisions:  Reproduction,  Incubation,
Animal Feed, Broiler, Process and Further Processing. The production figures are
presented below:


                                      -11-
<PAGE>

The Reproduction division facilities consist of 36 galleys which have a capacity
to produce  approximately  50 million fertile eggs annually.

The Incubation  division consists of two incubation plants,  which are among the
most modern in Central America. 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 40 million chicks annually.

The Company owns three  processing  plants for its Animal Feed  division.  These
plants  perform  activities,  which include  grinding  grains,  mixing flour and
packing  different  types of animal feed  products.  The  facilities  produce an
aggregate of approximately 310,000 tons of animal feed annually.

One day after birth, chicks are transferred to the Broiler division. During this
stage, the chicks receive three types of diet, according to growth requirements.
The growth stage lasts  approximately 43 days. The Company owns 46 farms and 181
farms are under  contract as integrated  producers.  The  facilities  production
capacity is  approximately  35 million  chickens  annually,  which  includes the
production from the integrated producers.

The Process division is divided into slaughter and pluck, coolers and retailers,
packing and cuts and  sub-products  processes.  The facilities have a production
capacity of 46 million kilograms annually.

The Further  Processing  division is divided into sausage,  formed,  packing and
oven and cooking areas.  The facilities have a production  capacity of 5 million
kilograms annually.

DISTRIBUTION

Distribution is conducted  through retail outlets in Costa Rica, the majority of
which are  rented.  Restaurantes  As de Oros  consists  of 33  restaurants,  the
majority of which are also rented.

ADMINISTRATIVE AREA

Staff,  administrative,  and financial headquarters of Pipasa and As de Oros are
located in La Ribera de Belen, Heredia, Costa Rica.

ITEM 3.  LEGAL PROCEEDINGS

The income tax returns for Pipasa for fiscal 1995 and 1994 were  examined by the
tax authorities in Costa Rica and the Company was assessed  $62,795 and $107,068
respectively, as a result of the disallowance by the Costa Rican tax authorities
of approximately 26% in the aggregate of the deductions taken by Pipasa for 1995
and 1994. Management believes these assessments are without merit and intends to
vigorously  contest these claims.  Management  does not believe that the Company
will incur a loss as a result of these assessments. No accrual has been made for
any losses that may result from the resolution of this uncertainty.



                                      -12-
<PAGE>


The income tax returns of As de Oros for fiscal  year 1995 were  examined by the
Costa Rican tax  authorities  and was  assessed  $130,000 of  additional  income
taxes.  Tax  authorities  have  contested  depreciation  expense  and income tax
withholdings  of  employees.  As de Oros has appealed this decision and does not
expect that the final  outcome will result in a material  adverse  effect on the
operations  or the financial  position of the Company.  No accrual has been made
for any losses that may result from the resolution of this uncertainty.

Pipasa is a defendant in a lawsuit  brought in Costa Rica in which,  as a result
of this lawsuit in which the  plaintiff  seeks $3.6  million,  Pipasa was served
with  prejudgment  liens for $1.5 million.  These liens were on some of Pipasa's
cash accounts and were  substituted by land owned by Pipasa with the approval of
a Costa Rican court.  Such approval was  subsequently  appealed by the plaintiff
and the Superior Court ratified such  substitution of collateral on November 11,
1999.  The  prejudgment  liens on cash have been released and Pipasa  expects to
receive all of the funds  originally  attached in  January,  2000.  For the same
reasons  and by the same  plaintiff,  Pipasa  was sued in the  United  States of
America, in the State of California and the State of Florida,  respectively. The
California  lawsuit has been  suspended  awaiting the ruling of the court of the
State of Florida on a lack of personal  jurisdiction  motioned raised by Pipasa.
While Pipasa still has time to answer the  complaints,  it cannot  ascertain the
basis of the claim or the relief  sought,  but believes the lawsuits are without
merit and intends to assert a vigorous defense. At the present time, neither the
Company nor Pipasa can  evaluate  the  potential  impact of this  lawsuit on the
financial results of the Company.

No  legal  proceedings  of a  material  nature,  to  which  the  Company  or the
Subsidiaries  are a party,  exist or were  pending  during the fiscal year ended
September  30, 1999.  The Company  knows of no 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  management,  the  ultimate
disposition  of these  matters  will not have  material  adverse  effect  on the
Company's consolidated financial position, results of operations or liquidity.

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

The following  matters were submitted to a vote of the  stockholders  during the
fiscal year 1999:

PROPOSED ACTION BY WRITTEN CONSENT DATED DECEMBER 4, 1998:

1.   To consider and vote on the  approval of a Stock  Purchase  Agreement  that
     provides  for the Company to acquire the  remaining  outstanding  shares of
     common stock of Corporacion  Pipasa,  S.A. ("Pipasa") from  Inversiones La
     Ribera,  S.A.  in  exchange  for  the  issuance  of  3,683,595  (11,050,784
     pre-split  shares)  shares of the  Company's  common  stock for the  40.44%
     ownership that was being included as a "minority interest" in the financial
     statements of the Company as of September 30, 1999.

                                      -13-
<PAGE>


2.   To consider and vote on the approval of a second Stock  Purchase  Agreement
     that provides for the Company to acquire the remaining  outstanding  shares
     of  common  stock of  Corporacion  As de Oros,  S.A.  ("As de  Oros")  from
     Comercial Angui, S.A. in exchange for the issuance of 1,670,921  (5,012,762
     pre-split  shares)  shares of Company stock for 43.62%  ownership  that was
     being included as a "minority interest" in the financial  statements of the
     Company as of September 30, 1999.

Only consents  received  prior to the close of business on the date (the "Action
Date")  which  was the  earlier  to occur of i) the  date on which  the  Company
received  approval and/or  disapproval of both the proposals by the holders of a
majority of the issued and outstanding  shares of common stock of the Company or
ii)  December  28, 1998  (unless  extended  by the Company  pursuant to a notice
mailed to the stockholders), will be counted towards the vote on the proposals.

The Board of  Directors  of the Company  received  approval of a majority of the
stockholders of the issued and outstanding shares of common stock of the Company
by December 28, 1998,  and concluded the As de Oros  acquisition on November 22,
1999, and the Pipasa acquisition on December 7, 1999.

STOCKHOLDERS MEETING FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1998

The Annual  Meeting  of  Stockholders  (the  "Annual  Meeting")  was held at the
Sheraton Biscayne Bay Hotel, Miami,  Florida, at 10:00 a.m., local time, on June
18, 1999, for the following purposes:

1.   To elect seven members of the  Company's  Board of Directors to hold office
     until the Company's  Annual Meeting of  Stockholders  for the year 2000, or
     until their successors were duly elected and qualified;

2.   To  consider  and vote upon a proposal  to ratify the  selection  of Arthur
     Andersen  LLP as the  Company's  independent  auditors  for the fiscal year
     ended September 30, 1998; and

3.   To  transact  such other  business as may  properly  come before the Annual
     Meeting or any adjournments or postponements thereof.

The Shareholders Meeting voted for the proposals as follows:

         Proposal number 1:    For Director number 1:        6,867,764 votes
                               For Director number 2:        6,867,764 votes
                               For Director number 3:        6,867,764 votes
                               For Director number 4:        6,867,764 votes
                               For Director number 5:        6,867,764 votes
                               For Director number 6:        6,867,764 votes
                               For Director number 7:        6,867,764 votes



                                      -14-
<PAGE>

                               Against Director number 1:          404 votes
                               Against Director number 2:          404 votes
                               Against Director number 3:          404 votes
                               Against Director number 4:          404 votes
                               Against Director number 5:          404 votes
                               Against Director number 6:          404 votes
                               Against Director number 7:          404 votes

         Proposal number 2:    6,868,062 votes For
                               102 votes Against
                               4 votes to Abstain

Relating to item number  three of the  purposes  of the Annual  Meeting,  Arthur
Andersen LLP was appointed as the Company's  independent auditors for the fiscal
year ended September 30, 1999.

PART II
-------

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

The  Company's  common  stock  started  trading on the American  Stock  Exchange
("AMEX")  under the symbol RCF on May 14,  1999 and prior to the date  traded on
the NASDAQ National Market under the symbol RICA. The following tables set forth
the market  price range of the Common  Stock for each  quarter  during the years
ended September 30, 1999 and 1998, based on the high and low closing sale prices
as reported on the American  Stock  Exchange and NASDAQ prior to the transfer to
AMEX. Such high and low sales prices reflect  interdealer  prices without retail
markup,  markdown  or  commission  and  may  not  necessarily  represent  actual
transactions.

                                                   Market Price Range (1)
                                              --------------------------------

                                                   High               Low
                                                   ----               ---
Fiscal 1999
-----------
First Fiscal Quarter (10/1/98 to 12/31/98)       $ 8.000             $4.125
Second Fiscal Quarter (1/1/99 to  3/31/99)         9.500              6.000
Third Fiscal Quarter  (4/1/99 to  6/30/99)        11.875              8.625
Fourth Fiscal Quarter (7/1/99 to  9/30/99)        11.875             10.688

Fiscal 1998
-----------
First Fiscal Quarter (10/1/97 to 12/31/97)        $6.750            $6.375
Second Fiscal Quarter (1/1/98 to  3/31/98)         4.875             4.500
Third Fiscal Quarter  (4/1/98 to  6/30/98)         4.914             4.500
Fourth Fiscal Quarter (7/1/98 to  9/30/98)         4.500             4.125

-------------

(1)  Prices  have been  adjusted  to  reflect  the 1 for 3 reverse  stock  split
     effective on December 29, 1998.



                                      -15-
<PAGE>



As of  January  5, 2000 the  Company  had  12,847,921  shares  of  common  stock
outstanding  and  approximately  1,500  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 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.

During the year ended  September 30, 1999,  Pipasa  distributed  510,565  series
"TCA" of preferred stock as dividends to its common stockholders,  in the amount
of  $1,929,766.  During the year ended  September 30, 1998,  Pipasa  distributed
282,958  series  "TCA"  shares of  preferred  stock as  dividends  to its common
stockholders, in the amount of $1,103,666.

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, 1999 and 1998 and for the fiscal  years of 1999,  1998 and
1997,  respectively,   are  derived  from  the  Company's  audited  consolidated
financial  statements  included  elsewhere in this Form 10-K.  The balance sheet
data as of September  30, 1997 and 1996 and for fiscal year 1996 is derived from
audited statements not included in this Form 10-K.


                                      -16-
<PAGE>


<TABLE>
<CAPTION>

                                          (In thousands, except per share data)
<S>                                                  <C>                <C>                <C>              <C>

                                                          1999               1998              1997             1996
                                                          ----               -----             ----             ----

Net sales                                             $   118,550        $    98,794        $   64,658       $   56.819
Cost of sales                                              77,275             71,464            47,847           40,730
Income from operations                                     12,427              6,155             3,962            5,167
Income before income taxes and minority
    interest                                                8,174              3,641             2,382            3,016
Net income after minority interest                          3,279              1,357               926            1,650
Diluted earnings per common share                            0.42               0.16              0.11                -
Pro forma earnings per common share                             -                  -                 -             0.28
Total assets                                               70,323             63,005            36,554           37,103
Long-term debt, net of current portion                     21,444             22,559             5,252            3,593
Cash dividends per common share                                 -                  -                 -                -
Diluted weighted average number of common
    shares outstanding                                  7,269,769          7,113,265         6,639,075                -
Pro forma  weighted average number of common                                                                  5,191,190
    shares outstanding                                          -                  -                 -

</TABLE>



<TABLE>
<CAPTION>

<S>                                                  <C>                <C>                <C>              <C>

                                                          1999               1998              1997             1996
                                                          ----               -----             ----             ----

Ratio of earnings to fixed charges                           1.87               1.46              1.37             1.61
Ratio of earnings to fixed charges and
    preferred dividends                                      1.71               1.38              1.28             1.50

</TABLE>

Sales and cost of sales for fiscal years 1998, 1997 and 1996, have been restated
to reflect the change in the method of  accounting  for sales and  purchases  to
integrated producers.  The effect of this restatement is a decrease in sales and
cost of sales in the amount of $4.89  million,  $5.36  million and $4.72 million
for fiscal 1998, 1997 and 1996, respectively.

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  judgements,  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  Company's  authorization  and are  properly  recorded  and reported in the
consolidated financial statements, and that assets are adequately safeguarded.


                                      -17-
<PAGE>


The  Company's  operations  are  largely  conducted  through  its  subsidiaries,
Corporacion Pipasa, S.A. and Subsidiaries ("Pipasa") and Corporacion As de Oros,
S.A. and Subsidiaries  ("As de Oros").  The Company,  through its  subsidiaries,
represents  the  largest  poultry  company in Costa Rica with a market  share of
approximately  70% of the chicken meat market in Costa Rica.  The  subsidiaries'
primary  business is derived from the production and sales of broiler  chickens,
processed  chicken   by-products,   commercial  eggs,  and  pre-mixed  feed  and
concentrate for livestock and domestic animals.  Pipasa, founded in 1969, is the
largest poultry  company in Costa Rica with  approximately a 50% market share of
the  chicken  meat market in Costa  Rica.  As de Oros,  founded in 954, is Costa
Rica's second largest  poultry  producer,  comprising  approximately  20% of the
country's  poultry  market and is one of the leaders in the Costa  Rican  animal
feed market with a 27% market  share.  As de Oros also owns and operates a chain
of 33 fried chicken quick service restaurants in Costa Rica called "Restaurantes
As de Oros."

The Company's  subsidiaries own a total of 60 urban and rural outlets throughout
Costa Rica, three modern processing plants and three animal feed plants.  Due to
similar business activities,  the combined operations of the subsidiaries permit
the Company to achieve operational efficiencies.

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 first and second  quarters of the fiscal year.  This  variation is primarily
the result of holiday  celebrations  during this  season,  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.

ENVIRONMENT

The Company has been and is practicing  sustainable  environmental policies such
as  reforesting,   processing  and  recycling  its  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 the next fiscal period,  the
Company  intends  to invest  approximately  $580,000  in  improving  its  sewage
treatment and rendering plants.

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.

YEAR 2000 READINESS

The Year  2000  issue is the  result of  computer  programs  and other  business
systems  being written using two digits rather than four digits to represent the
year.  Many of the time  sensitive

                                      -18-
<PAGE>


applications and business  systems of the Company and its business  partners may
recognize a date using "00" as the year 1900  rather  than the year 2000,  which
could result in system failure or disruption of operations. The Company believes
it has been able to achieve Year 2000  readiness for its internal  systems.  The
Company has also developed a plan of  communication  with  significant  business
partners to obtain appropriate assurances that the Company's operations will not
be disrupted  through  these  relationships  and that Year 2000 issues have been
resolved  by  significant  business  partners  in a timely  manner.  The Company
believes that it has satisfactorily  resolved all significant Year 2000 problems
and that the related costs have not been material.

However,  estimates of Year 2000 related costs at the beginning of the year 2000
are based on numerous assumptions,  including, but not limited to, the continued
availability of certain resources,  the ability to acquire accurate  information
regarding  third  party  suppliers  and the  ability  to  correct  all  relevant
applications and third party modification  plans. There is no guarantee that the
estimates will be achieved and actual costs could differ  materially  from those
anticipated.  Moreover,  the  failure  of a major  vendor's  systems  to operate
properly  with respect to the Year 2000 problem on a timely basis or a Year 2000
conversion that is incompatible with the Company's systems could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

INFORMATION SYSTEMS AND TECHNOLOGY

The Company's  subsidiaries  have undergone  significant  strategic  upgrades in
application  systems  in order to  improve  business  processes.  Merchandising,
production  planning,  and financial systems were selected for improved business
functionality  and are  vendor  certified  as Year  2000  compliant.  The  Human
Resources  and  Financial  Systems  were  implemented   during  1996  and  1999,
respectively.  All  critical  applications  were  tested to  ensure  compliance.
Additionally,   the  hardware  and   communications   infrastructure   has  been
inventoried,   assessed,   and,  where  necessary,   upgraded  and  tested.  The
remediation  phase was  complete  by the end of fiscal  year 1999.  Testing  was
performed  concurrently  with  remediation  activities  and  final  testing  was
substantially complete in the same schedule.

The  Company's  operations  are  dependent on  the Year 2000  readiness of third
parties.  The  Company  relies  on  third-party   suppliers  for  infrastructure
elements,  such as  telephone  services,  electric  power,  water,  and  banking
facilities, as well as merchandise suppliers.

The  vendor  relations  area of the  project  refers  to the  Year  2000  status
evaluation  of key  merchandise  and service  vendors.  As part of the Year 2000
initiative,  merchandise  and service  vendors  have been  surveyed to determine
their readiness and the Company is in the process of obtaining or negotiating to
obtain adequate assurances from such vendors.  In addition,  because the Company
has  a  select  group  of  merchandise  vendors,  the  Company  has  established
contingency  plans to confront any shortage of these products or services in the
event of supplier  delivery delay or failure.  Although the Company has not been
put on notice that any known third  party's  problem will not be  resolved,  the
Company has limited information and no assurance that any additional information
concerning the Year 2000 readiness of third parties will be made available.  The
resulting risks of the Company's business are very difficult to assess; however,
the  inability  to obtain  merchandise  from one or more key vendors on a timely
basis  could  have a  material  adverse  effect  on  the  Company's  results  of
operations.


                                      -19-
<PAGE>



The Company is developing  contingency  plans and identifying what actions would
be required if a critical system,  service or merchandise supplier were not Year
2000  compliant.

To date, the Company has spent approximately  $750,000 to complete the Year 2000
project,  which was funded through operating cash flows and external  financing.
Operating costs related to Year 2000  compliance  projects will be incurred over
several  quarters and will be expensed as costs are incurred.  Costs  associated
with business system solutions for improved business  processes are not included
in these  amounts  since  they will not have a  material  adverse  effect on the
Company's financial condition or operating results. The costs of the project and
the  date on which  the  Company  plans  to  complete  the  work  were  based on
Management's best estimates,  which were derived from numerous assumptions about
future  events,  including  but not  limited  to,  the  availability  of certain
resources and third party compliance information.  Past expenditures in relation
to total  estimated  costs should not be  considered or relied on as a basis for
estimating progress to completion for any element of the Year 2000 project.

The  Company  presently  believes,  that upon the  remediation  of its  business
software  applications,  hardware, and other equipment with embedded technology,
the Year 2000 issue will not present a materially  adverse risk to the Company's
future  consolidated  results of operations,  liquidity,  and capital resources.
However, if such remediation is not completed in a timely manner or the level of
timely  compliance by key suppliers or vendors is not sufficient,  the Year 2000
issue could have a material impact on the Company's operations including but not
limited to, failure to or delays in delivery of merchandise  resulting in a loss
of the Company's business.

RESULTS OF OPERATIONS

The Company's  operations  resulted in $0.42 diluted  earnings per share for the
year ended  September  30, 1999,  compared to $0.16 and $0.11 during fiscal 1998
and 1997, respectively.

The following  table sets forth,  for the periods  indicated,  certain  selected
income statement data expressed as a percentage of net sales:

                                           For the Years Ended September 30,
                                        1999             1998            1997
                                        ----             ----            ----

Sales, net                             100.00%          100.00%         100.00%
Cost of sales                           65.18%           72.34%          74.00%
Gross profit                            34.82%           27.66%          26.00%
Selling                                 14.37%           12.33%          10.52%
Administrative                           9.63%            8.80%           9.36%
Goodwill amortization                    0.34%            0.30%           0.00%
Operating income                        10.48%            6.23%           6.13%
Interest expense                         2.94%            3.15%           3.88%
Income before income taxes and
  minority interests                     6.89%            3.69%           3.68%
Provision for income taxes               0.64%            0.19%           0.45%
Net income                               2.77%            1.37%           1.43%



                                      -20-
<PAGE>



Prior  and  subsequent  to  the  acquisition  of As de  Oros,  there  have  been
transactions  between  Pipasa and As de Oros  consisting  mainly of sales of raw
materials and finished products.  Transactions  subsequent to the acquisition of
this subsidiary have been eliminated in consolidation.

Sales and cost of sales,  for fiscal years 1998 and 1997,  have been restated to
reflect  the  change in the  method of  accounting  for sales and  purchases  to
integrated  producers.  Integrated  producers are local farms who raise and feed
poultry on behalf of the  Company.  For fiscal  1999,  the  Company  changed its
method of accounting to reflect chickens and materials transferred to integrated
producers as in process  inventory,  as opposed to a sale at cost. The effect of
this restatement is a decrease in sales and cost of sales in the amount of $4.89
million and $5.36 million and for fiscal 1998 and 1997, respectively.

FISCAL 1999 COMPARED TO FISCAL 1998

Results by Segments
-------------------

General

Net sales for the year ended September 30, 1999 were $118.55 million compared to
$98.79 million for the year ended September 30, 1998,  increasing $19.76 million
or 20.00%. Cost of sales for fiscal 1999 were $77.28 million, compared to $71.46
million for fiscal 1998,  increasing  $5.82  million or 8.14%.  The gross profit
margin  for fiscal  1999 was 34.81%  compared  to 27.66%  for fiscal  1998.  The
increase in gross profit  margin of 7.15% is primarily due to an increase in net
sales  along with a  decrease  in cost of sales as a result of lower cost of raw
materials and operational  efficiencies.  Sales for fiscal year 1998 consolidate
the results of As de Oros for only seven  months,  compared to twelve months for
1999,  due to the February,  1998  acquisition of this  subsidiary.  Increase in
sales for some segments are partially due to this factor.

The following table shows sales increase and distribution by business segment in
millions, for the years ended September 30, 1999 and 1998:


<TABLE>
<CAPTION>
                                        1999                              1998                         Increase
                                        ----                              ----                         --------
<S>                          <C>           <C>                <C>             <C>              <C>          <C>
                                               Sales                              Sales
                               Amount       Distribution        Amount         distribution       Amount        %
                               ------       ------------        ------         ------------       ------        -

Broiler                       $ 72.13           60.84%         $ 60.06           60.80%         $ 12.07       20.10%
Animal Feed                     20.61           17.39%           17.85           18.07%            2.76       15.46%
By-Products                      9.66            8.15%            9.40            9.52%            0.26        2.77%
Restaurants                      9.39            7.92%            5.11            5.17%            4.28       83.76%
Exports                          3.38            2.85%            2.71            2.74%            0.67       24.72%
Other                            3.38            2.85%            3.66            3.70%           (0.28)      (7.65%)
                              -------          ------          -------          ------          -------      ------
TOTAL                         $118.55          100.00%         $ 98.79          100.00%         $ 19.76       20.00%
                              =======          ======          =======          ======          =======      ======
</TABLE>



                                      -21-
<PAGE>


Broiler Chicken:

Sales of Broiler  chicken were $72.13  million and $60.06  million for the years
ended September 30, 1999 and 1998, respectively.  The increase of $12.07 million
or 20.10% is  primarily  due to an  increase  of  19.53%  in  tonnage,  sales to
significant  new  customers and the inclusion of a full year of operations of As
de Oros.  This increase is offset by promotions of lower priced  products during
1999, which caused  variations in the sales mix creating an increase in sales of
lower priced products.

Cost of sales for Broiler chicken were $46.49 million for fiscal 1999,  compared
to $44.53  million for the fiscal year ended 1998.  Gross profit margin for this
segment  increased  from  25.86% in fiscal  1998 to 35.55% in fiscal  1999.  The
increase  in  gross  profit  is  mainly  due to a  decrease  in the  cost of raw
materials.

Animal Feed:

Sales of animal feed were $20.61  million and $17.85 million for the years ended
September  30, 1999 and 1998,  respectively.  The  increase of $2.76  million or
15.46% is primarily  due to an increase in tonnage of 33.26%,  and the inclusion
of a full year of operations of As de Oros, offset by decreases in sales prices.
Significant  decreases in the cost of raw materials,  an important  component of
this product,  has enabled  other  competitors  to sell similar  products in the
market,  causing the Company to lower sales prices of certain  products in order
to  maintain  its market  share.  The  Company  expects to  maintain  this sales
strategy in the  foreseeable  future.  The decrease is offset by  variations  in
sales mix of  different  types of products of which units and sales  prices have
increased.

Cost of sales for animal feed for fiscal 1999 were  $15.82  million  compared to
$13.98  million  during  fiscal 1998.  The gross profit  margin for this segment
increased  from a 21.68% in fiscal  1998 to 23.24%  in 1999.  This  increase  is
mainly due to a decrease  in sales  prices,  offset by a decrease in cost of raw
materials.

By-Products

Sales of  by-products  were $9.66  million and $9.40 million for the years ended
September 30, 1999 and 1998, respectively.  The increase of $260,000 or 2.77% is
mainly due to an increase in tonnage of 18.10%,  offset by  variations  in sales
mix towards lower priced  products.  During 1999, the Company  lowered the sales
prices for certain key products to maintain  sales  volume due to strong  market
competition.

Cost of sales for this segment were $5.39  million and $5.38  million for fiscal
1999 and 1998, respectively. Gross profit margin increased from 42.77% in fiscal
1998 to 44.20% in fiscal 1999. The increase in gross profit margin is mainly due
to a decrease in cost of sales.



                                      -22-
<PAGE>


Restaurants

The restaurant  segment had sales of $9.39 million for fiscal 1999,  compared to
$5.11 million  during  fiscal 1998,  increasing  $4.28  million or 83.76%.  This
increase is mainly due to the consolidation of As de Oros' operations for twelve
months for fiscal 1999,  compared to seven months for fiscal 1998. During fiscal
1999,  competitors introduced new quick service restaurants in the market, which
have  resulted in a decrease in sales in this  segment.  The Company has begun a
marketing  strategy to increase sales through the opening of new  restaurants in
rural and urban areas,  remodeling  some of its restaurants and investing in new
cooking  equipment  to improve the flavor of the  product.  The Company  expects
that,  through this marketing  strategy,  sales will increase in the foreseeable
future.

Cost of sales for this  segment  were $4.85  million in fiscal 1999  compared to
$2.71 million during fiscal 1998. The increase in cost of sales is mainly due to
the inclusion of As de Oros operations for a full year. Gross profit margins for
fiscal 1999 and 1998 were 48.35% and 46.97%, respectively.

Exports

The  Company's  exports were $3.38 million and $2.71 million for fiscal 1999 and
1998, respectively,  increasing $670,000 or 24.72% during fiscal 1999. Increases
during 1999 are due to a 12.42% increase in tonnage,  in addition to an increase
in sales.  During  1999,  the Company  began pet food  exports to the  Dominican
Republic and other  countries in Central  America.  Also during fiscal 1999, the
Company began supplying  products to new customers such as Pizza Hut,  McDonalds
and Burger King in  countries  in Central  America and made  non-recurring,  low
sales  price  product  mix exports to Hong Kong during the months of October and
November 1998.  During fiscal 1999, Pipasa was the only Central American company
to make  exports to all other  countries in the region.  The Company  expects to
increase its export sales for the next fiscal year,  increasing its market share
in the Central American and Caribbean areas.

The cost of sales of this segment for fiscal 1999 were $2.32 million compared to
$1.80 million during fiscal 1998,  increasing  $520,000 or 28.89%.  Gross profit
margin for this  segment  decreased  from  33.58% in fiscal  1998 to a 31.36% in
fiscal 1999. This decrease is mainly due to variations in sales mix.

Other

Sales of other items,  which  include  commercial  eggs,  raw materials and baby
chicks, were $3.38 million for fiscal 1999, compared to $3.66 million for fiscal
1998,  a decrease of $280,000  or 7.65%.  This  decrease is mainly the result of
eliminations  of  inter-company  sales,  since prior to the acquisition of As de
Oros in February 1998,  there were  transactions  between Pipasa and As de Oros,
consisting mainly of sales of raw materials, included in this segment.

Cost of sales for Other  items for fiscal 1999 were $2.41  million,  compared to
$3.06 million during fiscal 1998.  Gross profit margin  increased from 16.39% in
fiscal 1998 to 28.70% in fiscal  1999.  The increase is mainly due to a decrease
in costs of sales.



                                      -23-

<PAGE>


Operating expenses
------------------

Operating expenses increased from $21.17 million to $28.85 million,  an increase
of $7.68 million or 36.27% during the year ended  September 30, 1999 as compared
with fiscal  1998.  The increase is primarily  due to higher  payroll  expenses,
higher  marketing  expenses  such as  advertising  and  increased  vehicle fleet
leasing costs,  and the start up of new Pipasa  subsidiaries  in El Salvador and
Honduras.  Also, there is an increase in operating expenses due to the full year
inclusion of As de Oros' operations,  acquired in February 1998. As a percentage
of sales,  operating  expenses  were  24.33%  and  21.43%  for the  years  ended
September 30, 1999 and 1998, respectively.

Non-operating expenses
----------------------

Non-operating  expenses  increased  from  $2.51  million  to $4.25  million,  an
increase of $1.74 million or 69.32% during the year ended  September 30, 1999 as
compared  with the same period of fiscal 1998.  The increase is primarily due to
higher  interest and exchange rate  expenses,  which  increased  $770,000.  This
increase reflects the acquisition of As de Oros'  consolidated  debts for twelve
months  during 1999,  as opposed to seven months  during 1998;  there is also an
increase in the purchase of raw materials due to higher levels of production.

In addition, there is a decrease in other income in the amount of $1.03 million,
which is primarily  due to a  non-recurrent  legal  settlement  gain recorded in
fiscal 1998 in the amount of $350,073 and the reclassification of fleet services
income for $596,000 for fiscal 1999 from other income to selling expenses.

Income tax
----------

Income taxes were $762,472 and $188,663 for the fiscal years ended September 30,
1999 and 1998,  respectively.  The lower tax rate in the prior  period  resulted
mainly from the  utilization of additional tax credits and tax shelters in 1998,
and to higher taxable income results in 1999.

FISCAL 1998 COMPARED TO FISCAL 1997

The following table presents  consolidated sales information by business segment
in millions for the years ended September 30, 1998 and 1997, respectively:

<TABLE>
<CAPTION>
                                        1998                              1997                         Increase
                                        ----                              ----                         --------
<S>                          <C>           <C>                <C>             <C>              <C>          <C>
                                               Sales                              Sales
                               Amount       Distribution        Amount         distribution       Amount        %
                               ------       ------------        ------         ------------       ------        -

Broiler                       $ 60.06           60.80%          $44.28           68.48%         $ 15.78       35.64%
Animal Feed                     17.85           18.07%            6.95           10.75%           10.90      156.83%
By Products                      9.40            9.52%            7.92           12.25%            1.48       18.69%
Restaurants                      5.11            5.17%               -                -            5.11      100.00%
Exports                          2.71            2.74%            2.33            3.60%            0.38       16.31%
Others                           3.66            3.70%            3.18            4.92%            0.48       15.09%
                              -------          ------          -------          ------          -------      ------
TOTAL                         $ 98.79          100.00%         $ 64.66          100.00%         $ 34.13       52.78%
                              =======          ======          =======          ======          =======      ======
</TABLE>



                                      -24-
<PAGE>



Results by Segments
-------------------

General

Net sales generated by the Company's operations for the year ended September 30,
1998 were $98.79 million, an increase of $34.13 million or 52.78%, compared with
fiscal year 1997. Cost of sales for the year ended September 30, 1998 was $71.46
million,  compared to $47.85 million for fiscal year 1997, an increase of $23.61
million.  This increase was mainly due to volume increases and the incorporation
of the new  subsidiary,  As de Oros. As a percentage  of net sales,  the cost of
sales  represented  73.64%  during  fiscal year 1998,  compared to 75.99% during
fiscal year 1997.  During the first three quarters of fiscal year 1998, the cost
of sales was slightly  higher than the prior fiscal year,  due to the imports of
fertile egg and chicken parts. These imports, which took place during the months
of January  through June of 1998 were a consequence of the low technical  yields
and high  temperatures that were caused by the El Nino weather  phenomenon.  The
impact of these imports was  significant not only in cost, but also in technical
yields.  During the months of July through September of 1998, the Company ceased
imports  and, as a result,  its  technical  yields and cost of sales  percentage
improved.

During fiscal 1998,  Management  decided to change the breed of its reproduction
hens in order to improve  production  yields.  This  change in  breeders,  which
temporarily  affected the  incubation  rates,  has been  stabilized  into normal
yields  during the fourth  quarter of fiscal 1998,  which has resulted in weight
gain  and  improved  conversion  (amount  of feed  per  Pound  of  grown  meat).

Along  with  the   improvement  of  technical   yields  came  the  reduction  in
international  prices of  grains,  specifically  soy bean  meal and  corn.  This
reduction  contributed  strongly to the cost of sales  reduction  from 74.00% to
72.34% of net sales.

Gross profit for fiscal year 1998 was $27.33 million, compared to $16.81 million
during  fiscal year 1997, a 62.57%  increase.  This  increase is mainly due to a
volume  increase and an  improvement  in the general  cost of sales ratio.  As a
percentage of net sales,  gross profit increased from 26.00% in fiscal year 1997
to 27.66% during fiscal year 1998, due to the issues  discussed above in cost of
sales.

Broiler chicken

Broiler  chicken  sales of $60.06  million for fiscal  1998,  represent a 35.64%
increase  above  broiler  sales for fiscal year 1997.  This increase is due to a
32.78% volume increase and a 2.86% price increase in fiscal 1998.

Cost of sales for  broiler  chicken  for fiscal  year 1998 was  $44.53  million,
compared to $32.55  million during the same period of fiscal year 1997, a 36.80%
increase.  This increase is due to a 32.78%  increase in dressed pounds sold and
the remaining  increase was due to an increase in unit  production  costs.  As a
percentage  of net sales,  cost of sales was  73.19%  during  fiscal  year 1998,
compared to 73.51% during fiscal year 1997.



                                      -25-
<PAGE>



Animal Feed

Sales of animal feed were $17.85  million  during the year ended  September  30,
1998 as compared to $6.95  million  during the same period for fiscal  1997,  an
increase of 156.83%.  This  increase  in sales was due to the  incorporation  of
sales of As de Oros for the period of March to September  30,  1998,  whose core
business  is animal  feed,  combined  with a volume  increase  in Pipasa.  Sales
increase is mainly due to a 152.04% increase in volume and a variance in product
distribution.

Cost of sales for animal feed was $13.98 million for fiscal year 1998,  compared
to $5.77  million  during  fiscal year 1997,  an  increase  of $8.21  million or
142.29%. This variation is mainly due to the incorporation of As de Oros' sales,
which,  as previously  mentioned,  has its main  business in this segment.  As a
percentage  of net sales,  cost of sales was  78.65%  during  fiscal  year 1998,
compared to 82.86%  during  fiscal year 1997.  The reduction in cost of imported
grains (soy bean meal and corn) contributed  significantly to the improvement in
this ratio.

By-products

Sales of chicken  by-products  increased  18.81% during the year ended September
30, 1998. This increase is due to a 0.33% volume increase  combined with a price
increase and a change in product mix.

Cost of sales for chicken by-products was $5.38 million during fiscal year 1998,
an increase of $510,000 or 10.47% as compared with fiscal 1997.  This  variation
is mainly due to a price  increase,  which  consequently  improved gross margin,
offset by the tonnage  decrease  as a result of  intercompany  elimination  as a
result of the consolidation of As de Oros during fiscal 1998. As a percentage of
net sales, cost of sales was 57.45% during fiscal year 1998,  compared to 60.76%
during fiscal year 1997.

Restaurants

The newly acquired  restaurant  segment,  which consists of  "Restaurantes As de
Oros" had sales of $5.11  million  during the period of seven  months  since its
acquisition.

Exports

Exports increased 17.39% during the year ended September 30, 1998 as compared to
fiscal 1997.  This increase is due to an average 1.53% price  increase  combined
with a 15.86%  volume  increase.  This  increase is mainly due to the  continued
exports to other countries in Central  America,  the introduction of pet food in
the market, and extraordinary exports to Hong Kong. The Company has strengthened
sales to El Salvador  and  Nicaragua,  and  expects to focus on Honduras  during
fiscal 1999.

Cost of sales for exports for fiscal 1998 was $1.80 as million compared to $1.72
million during fiscal year 1997.  This increase is mainly due to a 15.86% volume
increase  combined  with a 0.42%  price  increase.  Volume  increased  mainly in
broiler chicken, by-products,  mechanically deboned meat and pet food, which was
introduced as an export  product at the end of fiscal year




                                      -26-
<PAGE>



1997. As a percentage of net sales,  cost of sales was 66.67% during fiscal year
1998,  compared to 73.91% during fiscal year 1997. This  improvement in the cost
of sales is primarily due to the introduction of new products in general exports
which have a higher gross margin.

Other

Sales of Other products,  which include  commercial eggs, raw materials and baby
chicks to third  parties,  increased  $480,000  or 15.09%  during the year ended
September 30, 1998 compared to the same period of fiscal year 1997.

Cost of sales for "Other" was $3.06 million during fiscal year 1998, compared to
$2.94  million  during  fiscal year 1997, a decrease of $120,000 or 4.08%.  This
decrease  is  primarily  due to a decrease  in sales of  commercial  eggs.  As a
percentage of net sales, cost of sales for "Other" was 83.61% compared to 92.45%
during fiscal year 1997.

Operating Expenses
------------------

General and administrative  expenses were $8.69 million during fiscal year 1998,
compared to $6.05  million  during  fiscal year 1997,  a 43.72%  increase.  This
increase is primarily due to expenses incurred in the acquisition of As de Oros.
As a percentage of sales,  this item decreased from 9.36% during fiscal 1997, to
8.80%  during  fiscal year 1998 mainly due to  improved  sales and  efficiencies
resulting from the As de Oros acquisition.

Selling expenses increased 79.14% during fiscal year 1998,  compared with fiscal
year 1997. As a percentage of net sales, these expenses increased from 10.52% in
1997 to 12.33% during the same period of fiscal year 1998.

The  restaurant  segment  contributed  to the increase in selling  expenses as a
percentage of net sales.  This is due to the nature of the restaurant  business,
which has a high  gross  profit  and high  selling  expenses.  Selling  expenses
amounted to  approximately  14% of total  consolidated  sales for the restaurant
segment.

In connection with the acquisition of As de Oros, the Company  recorded a charge
to administrative expenses relating to the amortization of cost in excess of net
assets acquired ("Goodwill").  The Company also recorded administrative expenses
pertaining to professional  services related to legal fees,  financial printing,
auditing and other related charges.

Non-operating expenses
----------------------

Other expenses (income) increased 59.20% during fiscal year 1998,  compared with
fiscal year 1997.  The  Company's  interest  expense  increased by 23.87% during
fiscal 1998,  compared with fiscal 1997.  Miscellaneous  income increased during
fiscal 1998,  when compared to fiscal 1997 and 1996.  This increase is primarily
due to dividends received from investments made in other companies in the amount
of $153,073 and a legal settlement in the amount of $350,073.  In addition,  the
Company  recorded  gains for  transporting  products to clients in the amount of
$356,645.




                                      -27-
<PAGE>



FINANCIAL CONDITION

Operating Activities:

As of  September  30,  1999,  the  Company  had $3.91  million  in cash and cash
equivalents.  Working capital was $6.23 million  compared to $4.83 at the end of
fiscal year 1998, a $1.40 million increase.

Cash  provided  by  operating  activities  was $12.21  million  for fiscal  1999
compared to $6.39 million in fiscal 1998.  Cash flows from  operations  improved
mainly due to increased operating earnings during fiscal year 1999.  Receivables
and inventory increases associated with higher sales and production levels, were
offset by increases in accounts payable.

Investing Activities:

Cash used for investing activities during fiscal 1999 was $8.87 million compared
to $4.84  million  during  fiscal 1998.  Investing  cash flows  reflect  capital
expenditures,  which are primarily  related to the  acquisition of an enterprise
resource planning system,  vehicle fleet and new production  equipment which the
Company plans to use to increase production capacity.  In addition,  the Company
has  remodeled  some of its quick  service  restaurants  as part of a  marketing
strategy.  The Company  anticipates that it will spend approximately $11 million
for  capital  expenditures  during the next fiscal year  relating  primarily  to
restaurant  remodeling,  investments in production  equipment,  and expansion of
plant facilities.

Financing Activities

As of September 30, 1999, the Company had lines of credit  agreements with banks
for a maximum  aggregate  amount of $26.70 million,  of which $8.66 million have
been used.  Agreements may be renewed annually and bear interest at annual rates
ranging  from  7.87% to  10.25%.  Property  and other  collateral  secure  those
agreements.

For fiscal year ended  September  30, 1999 the  Company  used $3.43  million for
financing  activities compared to $396,000 used during the same period of fiscal
year 1998.  Net cash used in  financing  activities  primarily  consists of cash
outflows for payment of short-term and long-term debt amortization,  compared to
cash  provided by the debt  restructuring,  which took place during  January and
February 1998.

Management  expects to finance  operations  and  capital  expenditures  with its
normal operating  activities and external sources.  Management also expects that
there  will be  sufficient  resources  available  to  meet  the  Company's  cash
requirements through the next fiscal year.

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



                                      -28-
<PAGE>



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 due to rising interest rates;
(iv) changes in regulations and laws, including changes in accounting standards,
environmental laws, occupational,  health and safety, currency fluctuations; and
(v) the effect of, or changes in, general economic conditions.

This  management  discussion and analysis of financial  condition and results of
operations 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  limitations)
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  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 requirement; shifts in customer
demands;  changes in the continued  availability of financial amounts and at the
terms necessary to support the Company's future business.

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

COMMODITY RISK MANAGEMENT

The Company  imports all of its corn,  the primary  ingredient  in chicken feed,
from  the  United  States  of  America.  Fluctuations  in the  price of corn may
significantly  affect the Company's gross profit margin.  The Company  purchases
approximately  $l.3 million of corn monthly  through the Chicago  Board of Trade
("CBOT").  The price of corn and soybean meal, like most grain  commodities,  is
fairly  volatile and requires  consistent and daily hedging in order to minimize
the effect of price increases on the Company's profit margin.



                                      -29-
<PAGE>


The Company has been  actively  hedging its exposure to corn price  fluctuations
since 1991.  The Company  evaluates,  on a daily  basis,  the prices of corn and
soybean meal. All hedging  activities  are supervised by the Hedging  Committee,
whose members are officers and  employees,  which have received  training at the
CBOT  and  attend  regular  seminars  on  commodities  hedging  strategies.  The
committee  consists  of  financial  analysts,  the  Financial  Director  and the
Financial   Vice-President  and  transactions  are  approved  by  the  Executive
President.  The committee  meets at least once a month to evaluate the Company's
exposure to corn and soybean meal price fluctuations.  The Company's strategy is
to hedge  against price  increases in corn and soybean meal,  the Company is not
involved in speculative trading. Contracts range from one month to six months.

The Company  will buy  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  analysis.  The Company bases its
target prices on the worst case price assumptions  (i.e. high corn prices).  The
prices paid by the Company for corn were 7.04% below its budgeted prices for the
year ended September 30, 1999.

The Company has a $500,000 credit line with Futures U.S.A.,  Inc.  ("FIMAT") and
draws upon this credit line to cover its initial  margin  deposit.  The interest
rate  paid on this line of credit  averages  an annual  rate of less than 10% on
drawn  amounts.  The Company is in frequent  contact  with its brokers (at least
three to four times a day) and receives advice from the brokers' corn experts.

The Company's monthly soybean meal purchases average approximately $640,000. The
hedging  strategies  for soybean meal  purchases  are  identical to that of corn
purchases,  except that the Company  purchases  its soybean meal through a Costa
Rican company,  INOLASA,  in which the Company holds a 10% equity ownership.  In
Costa Rica,  there is a 5% tax for soybean meal imports,  which is not levied if
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.

EXCHANGE RATE RISK MANAGEMENT

The Company makes U.S. dollar payments for the majority of its raw materials and
bank  facilities.  This  U.S.  dollar  expense  component  is not  unique to the
Company, as all poultry producers in Central America must rely on U.S. companies
for raw materials such as corn,  soybean meal and reproduction  birds. Given its
U.S. dollar exposure,  the Company  actively manages its currency  exchange rate
risk.  The Company  uses a financial  model to  determine  the best  strategy to
mitigate  against the  devaluation  of the  currency  of Costa Rica,  the Colon,
against the U.S. dollar. The Company  systematically  increases its annual sales
prices by a rate that is consistent with the Colon devaluation  against the U.S.
dollar.  For the fiscal  years ended  September  30,  1999,  1998 and 1997,  the
national  devaluation  rates were  10.81%,  10.6% and

                                      -30-
<PAGE>

11.61%  respectively,  and  correspondingly,  the Company  increased  its prices
11.19%, 13.03% and 12.6%,  respectively.  Management believes that the Company's
strong  market will allow for this type of price  increase  without  sacrificing
long-term  demand and market share.  The Company has  successfully  passed along
such price increases for the last five years.  Management  plans to increase its
export  operations in order to increase its U.S. dollar revenues,  as all export
sales are made in U.S.  dollars.  For the fiscal year ended  September 30, 1999,
exports  increased 24.72%,  of U.S.  $674,000,  compared to exports for the same
period in 1998.

In addition to  fluctuations  in the price of corn and soybean meal, the Company
has exposure to  fluctuations  in exchange rates, as payments for imported corn,
soybean meal,  reproduction  birds and bank facilities are in U.S. dollars.  The
Company's  Finance Division has the  responsibility  of monitoring  economic and
industrial trends that influence foreign exchange levels. This division examines
areas such as poultry gross national  product,  gross national  product ("GNP"),
inflation,  devaluation,  export and import growth rates,  growth in real wages,
unemployment and population rates in Costa Rica.

Raw  material  purchases  have an  average  payment  period of 120  days,  hence
exchange rate risk is for four months.  During this time,  accounts are paid and
costs are  updated  to  reflect  new  exchange  rates.  In the event of a severe
devaluation of the colon, or increases in international  prices, the Company may
be able to increase sales prices to recuperate its foreign exchange  losses.  In
addition,  all of the Company's  exports are  denominated in U.S.  dollars (even
exports  within  Central  America).  Management  expects  that the  strategy  to
increase exports will increase the Company's U.S. dollar  revenues.  The Company
uses a model to determine the maximum  devaluation  possible before  considering
whether or not to incur  additional  U.S.-based  debt.  In effect,  the  Company
borrows in U.S.  dollars  when  economically  proven to be less  expensive  than
borrowing in colones.

Information  required  by this item is also  located in this Form 10-K under the
heading "Foreign Competition."

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information   required  by  this  item  is  incorporated  by  reference  to  the
Independent  Auditor's  Reports found on pages F-2 and F-3 from the consolidated
financial  statements and  supplementary  data on pages F-3 through F-30 on this
report.

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

There were no changes in or disagreements with the Company's  accountants during
the fiscal year ended September 30, 1999.

                                      -31-
<PAGE>


PART III
--------

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The  Directors  and  Executive  Officers of the Company,  their ages and present
positions held in the Company, as of September 30, 1999, are as follows:

         NAME                         AGE             POSITION HELD
         ----                         ---             -------------
         Calixto Chaves               53      Chairman, Chief Executive
                                                Officer, President and Director

         Jose Pablo Chaves            27      Director

         Dr. Federico Vargas          66      Director

         Lic. Jorge M. Quesada        50      Treasurer and Director

         Luis J. Lauredo              50      Director

         Alfred E. Smith, IV          48      Director

         Monica Chaves                28      Secretary

         The Honorable Ambassador
           Luis Guinot, Jr.           64      Director

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.  The officers  serve at the  discretion of the Company's
Directors.  Calixto  Chaves and Monica Chaves are father and  daughter.  Calixto
Chaves  and Jose  Pablo  Chaves  are  father  and son.  Jorge M.  Quesada is the
brother-in-law  of Calixto Chaves,  Mr. Mauricio  Marenco,  Director of Investor
Relations  and  Assistant  Secretary  is married to one of Mr.  Calixto  Chaves'
nieces.  Otherwise,  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.



                                      -32-
<PAGE>


Calixto Chaves.  Mr. Chaves is the founder and President of Corporacion  Pipasa,
S.A. from its inception in 1969 to the present. He is currently on the Boards of
Directors  of  Central  American  Oils  and  Derivatives,   S.A.,  and  American
Oleaginous  Industry.  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.
From 1982 to 1986, he was a member of the Board of Directors of MINASA,  a Costa
Rican mining company. Mr. Chaves was the founder of the Chamber of Industries in
the Costa Rican province of Heredia.  From 1973 to 1974, he was President of the
Board of Directors of Banco Nacional de Belen.

Dr. Federico Vargas. Dr. Vargas is a Board member of Corporacion  Pipasa,  S.A.,
one of the Registrant's subsidiaries.  He has served as a Professor of Economics
and Social  Sciences at the  University  of Costa Rica from 1963 to the present.
Dr. Vargas has been involved  extensively  in political  activities  since 1974.
From 1990 to 1994, he served as a Deputy in the Costa Rican Assembly.  From 1993
to 1994, he was Chairman of the  Legislative  Section of the Partido  Liberacion
Nacional  Costa  Rica.  Prior to 1990,  Dr.  Vargas  held a number of  political
offices,  including  Minister of Finance on two  occasions,  Ambassador of Costa
Rica to the  United  States,  Ambassador  of Costa Rica to the  Organization  of
American  States,  Counselor  to the  President  of Costa  Rica in  Finance  and
External  Debt,  with the rank of  Minister  of  Economics,  and  Advisor to the
President  of Costa  Rica.  His  teaching  activities  included  serving  as the
Chairman of the "Instituto de Investigaciones  Economicas",  University of Costa
Rica and Director of the  Economics  Department  of the School of Economics  and
Social Sciences of the University of Costa Rica. Dr. Vargas serves on the Boards
and advisory bodies of numerous charitable and educational  organizations and is
the author of a number of publications in economic and educational  matters.  He
obtained  his  Bachelors  in Business  Administration  from  Nichols  College in
Massachusetts  in 1954 and his Ph.D. from the University of Colorado in 1967. He
has also attended the Wharton  School of Finance and Commerce at the  University
of  Pennsylvania.  Mr. Vargas graduated from the University of Costa Rica with a
degree in Business Administration.

Lic. Jorge M. Quesada.  Mr. Quesada has held numerous positions with Corporacion
Pipasa, S.A. since 1985, and was its Executive Vice President from 1990 to 1999.
Mr. Quesada was appointed  Executive President of Pipasa and As de Oros on March
1, 1999.  He was a member of the Boards of Directors of Banco  Fomento  Agricola
(k/n/a  BFA)  from  1991 to  1996.  From  1987 to 1991,  he was on the  Board of
Directors of Financiera Belen, S.A. Mr. Quesada has conducted  numerous seminars
regarding  marketing topics. He obtained his Degree in Business  Administration,
with emphasis on Public Accounting, from the University of Costa Rica in 1984.

Luis J. Lauredo.  From 1995 to the present,  Mr.  Lauredo has been  President of
Greenberg Traurig Consulting,  Inc., an affiliate of the international law firm,
Greenberg Traurig Hoffman, Lipoff, Quentel & Rosen, of Miami,  Washington,  D.C.
and New York. 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


                                      -33-
<PAGE>


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.

Alfred E. Smith,  IV. Mr. Smith has been a director of the Company since June 1,
1994.  Mr.  Smith is a  Managing  Director  at the Wall  Street  firm of  Hunter
Specialists,  LLC, New York,  since January 1997. 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,  where he also is
the Dinner  Chairman;  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; and member at the President's  Council,  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,  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.

Monica  Chaves Ms.  Chaves is Secretary of the Board of Directors of Rica Foods,
Inc.  and is also member of the Board of Directors of  Corporacion  Pipasa.  Ms.
Chaves joined  Corporacion  Pipasa as assistant manager in the company's Finance
Division  in  1991,  when  she was in  charge  of  Pipasa's  Special  Investment
Department.  In 1996,  when the Company  went  public,  Ms.  Chaves  assumed the
Company's  Investor  Relations  Department.  Ms.  Chaves was  appointed the Vice
President  of  Administration  of Pipasa  and As de Oros on March 1,  1999.  Ms.
Chaves  received  a  bachelors  degree in  Business  Administration  from  Saint
Michaels College, Vermont.

Honorable  Ambassador Mr. Louis Guinot, Jr. Ambassador Luis Guinot, Jr. was born
in San Juan,  Puerto Rico on April 8, 1935.  He  attended  college in the United
States of America,  where he graduated  from the Catholic  University of America
School of Law in Washington,  D.C. After completing his undergraduate studies at
New York  University,  he was  commissioned and Ensign in the U.S. Navy where he
served in several  billets-both  shore and  afloat,  including a tour of duty as
gunnery  officer of the  destroyer  USS Gearing  (DD710) and Senior Shore Patrol
Officer of the U.S. Sixth Fleet based in Naples,  Italy. After completion of his
military  obligation,  Mr.  Guinot  entered  the  private  practice  of  law  in
Washington,  D.C.  Mr.  Guinot has  served as United


                                      -34-
<PAGE>

States  Ambassador  to the  Republic of Costa  Rica,  as the  Assistant  General
Counsel of the United States  Department of Agriculture and as  Administrator of
the Office of the Commonwealth of Puerto Rico in Washington,  D.C. Additionally,
Mr.  Guinot has also  appeared  as speaker and  lecturer on United  States-Latin
American Trade, NAFTA, and GATT related matters, and he is the author of several
newspaper  articles  on  the  same  subject.  Mr.  Guinot  is a  member  of  the
Commonwealth of Virginia and the District of Columbia Bar  Associations  and has
been admitted to practice before the bars of the U.S. Supreme Court, the 1st and
the 11th  Circuit  Court of Appeals,  the Bars of the  Southern  District of New
York, and the Southern District of Florida,  Eastern Districts of Virginia,  and
the Court of Military  Appeals.  Mr. Guinot is also a fellow of the American Bar
Foundation,  served  in the U.S.  Presidential  Commission  on  Civil  Disorders
(Kerner  Commission)  and former  member of the Board of  Directors of the Legal
Services  Corporation.  Mr.  Guinot  was  awarded  the Grand  Order of Juan Mora
(Silver Plaque) by the Government of Costa Rica. He has been featured speaker on
Conferences on the general subject of hemispheric free trade and served as legal
advisor to U.S.  corporations  doing  business in Latin America as well as legal
advisor to ministries of Central and South  American  Countries.  In addition to
serving  as a member of the Board of  Directors  of Rica  Foods Mr.  Guinot  was
recently appointed to serve in the Board of Directors of Tampa Energy Co. (TECO)
of Tampa, Florida.

Jose Pablo  Chaves.  Mr.  Chaves is a member of the Board of Directors of Pipasa
and As de Oros, as well as Restaurantes As de Oros,  S.A., and is a board member
of the Company and the Company's  Chief  Operating  Officer.  Mr. Chaves studied
Business   Administration   with  emphasis  in  Marketing  at  (Babson  College,
Massachusetts) and in Costa Rica. Mr. Chaves is the founder of three Costa Rican
Companies.

Compliance with Section 16(a) of the Securities Exchange Act of 1924

Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act") requires the
Company's officers and directors and persons owning more than ten percent of the
Company's  Common  Stock to file  initial  reports of  ownership  and changes in
ownership  with the Securities and Exchange  Commission  ("SEC").  Additionally,
Item 405 of Regulation  S-K under the 34 Act requires the Company to identify in
its Form 10-K and Proxy  Statement  those  individuals for whom one of the above
referenced reports was not filed on a timely basis during the most recent fiscal
year or prior fiscal years. Given these  requirements,  the Company reports that
all of the Company's  officers or directors and all persons owning more than ten
percent of its shares have filed the subject  reports on a timely  basis  during
the past fiscal year.



                                      -35-
<PAGE>


ITEM 11. EXECUTIVE COMPENSATION.

The following table sets forth for the summary  compensation  table for the most
highly compensated officers for the last three fiscal years:

<TABLE>

<S>                                          <C>         <C>               <C>
                                                             Salary            Other
         Name and Main Position               Years       Compensation      Compensation
                                                               (1)              (2)
                                                               ---              ---

Calixto Chaves - Chief Executive Officer       1999         $128,262           $1,953
Calixto Chaves - Chief Executive Officer       1998         $126,780           $1,993
Calixto Chaves - Chief Executive Officer       1997         $104,477           $5,093

</TABLE>

(1)  All salary  compensation was paid in Costa Rican colones.  For the purposes
     of this  presentation,  all compensation has been converted to U.S. dollars
     at the then current exchange rate for Costa Rican colones.

(2)  Represents Director's fees payable for action as a Director of Pipasa.

Compensation Committee Interlocks and Insider Participation

The Company has a Compensation Committee consisting of Calixto Chaves,  Chairman
of the Board, President and Chief Executive Officer and Jorge Quesada, Treasurer
and  Director.  This  Committee  makes the  determinations  for  stock  issuance
pursuant to the Company's  compensation  plans.  The Company has no  retirement,
pension or profit sharing plans  covering its officers and  directors,  but does
contemplate implementation of such a plan in the future through Pipasa and As de
Oros.

Item 12.    Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of the latest practicable date,  December 29,
1999,  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,  prior to the  acquisitions  of the remaining  interests in
Pipasa and As de Oros (the "Acquisitions") and after the Acquisitions:


                                      -36-
<PAGE>

<TABLE>
<CAPTION>
<S>                                         <C>                         <C>                 <C>                   <C>

                                                   Post-Split                                    Post-Split
                                                   Amount and                                    Amount and
                                                   Nature of               Percent of            Nature of           Percent of
                                                   Beneficial             Shares Owned           Beneficial         Shares Owned
Name and Address of                            Ownership Prior to           Prior to           Ownership After         After
Beneficial Owner(1)                             Acquisition (2)(3)        Acquisition (2)    Acquisitions (2)(3)   Acquisitions(2)
-----------------------------------------    ------------------------    ----------------    ------------------    ---------------

Calixto Chaves......................               1,993,315(4)              26.87%              5,676,910(5)          44.44%
                                                   3,686,595(9)

Comercial Angui, S.A................                 815,686(10)             10.99%              2,486,607(6)          19.46%
c/o Bufete Chaverri, Soto & Asociados              1,670,921(10)
    Barrio Escalante de Cine Magaly,
    400 Metros Este
    San Jose, Costa Rica

Jorge M. Quesada....................                  48,295 (7)               *                    48,295(7)            *

Monica Chaves.......................                  133,334(8)               *                   133,334(8)            *

Luis Guinot, Jr. ...................                     -                     *                       -                 *

Luis J. Lauredo ....................                     -                     *                       -                 *

Federico Vargas.....................                     -                     *                       -                 *

Alfred E. Smith IV..................                   33,334                  *                    33,334               *

Jose Pablo Chaves...................                  279,324                  *                   279,324               *

</TABLE>
-------------------------
*    Indicates less than 1% of outstanding shares owned.

(1)  Unless  otherwise  indicated,  the address of each beneficial owner is Rica
     Foods, Inc., 95 Merrick Way, Suite 507, Coral Gables, Florida 33134.
(2)  A person is deemed to be the  beneficial  owner of  securities  that can be
     acquired by such person  within 60 days from the date hereof upon  exercise
     of options,  warrants and convertible  securities.  Each beneficial owner's
     percentage  ownership is determined by assuming that options,  warrants and
     convertible  securities that are held by such person (but not those held by
     any other  person)  and that are  exercisable  within 60 days from the date
     hereof  have been  exercised.
(3)  Unless  otherwise noted, the Company believes that all persons named in the
     table have sole voting and  investment  power with respect to all shares of
     Common Stock  beneficially  owned by them.
(4)  Includes  861,315  shares of Common  Stock  owned of record by  Atisbos  de
     Belen,  S.A., a Costa Rican corporation  wholly-owned by Mr. Chaves and his
     wife, 833,334 shares of Common Stock owned of record by Inversiones Leytor,
     S.A., a Costa Rican company  wholly-owned by Mr. Chaves, and 298,667 shares
     of Common  Stock  owned of  record  by OCC,  S.A.,  a Costa  Rican  company
     wholly-owned  by Mr. Chaves and his wife.  Does not include  133,334 shares
     and 279,324 shares owned by his adult daughter and adult son  respectively.
(5)  Includes  3,683,595  shares of Common Stock acquired  pursuant to the Final
     Pipasa Acquisition.
(6)  Includes  1,670,921  shares of Common Stock to be acquired  pursuant to the
     Final As de Oros Acquisition.
(7)  Includes  48,295 shares owned by Jorque,  S.A., a closely-held  Costa Rican
     company  whose  principal  shareholders  are the wife and sons of Mr. Jorge
     Quesada.
(8)  Owned of record by Moninternacional,  S.A., a Costa Rican corporation owned
     by Monica Chaves,  the adult daughter of Mr. Chaves.  Mr. Chaves  disclaims
     any beneficial ownership of these shares.
(9)  Owned of record by Inversiones La Ribera,  S.A., a Costa Rican  corporation
     wholly  owned by Mr. Chaves and his wife.
(10) Owned of record by  Comercial  Angui,  S.A., a Costa  Rican  corporation,
     wholly owned by Mr. Echeverria and his wife.



                                      -37-
<PAGE>

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Balances and transactions with related parties consist of the following:


                                                 1999                   1998
                                                 ----                   ----

       Due from stockholders                  $  644,988             $  170,413
       Due from related parties                2,954,579                656,904
       Due to stockholders                        75,108                 75,671
       Due to stockholders (long-term)            16,715                 18,526

Balances due from  stockholders  for 1999 and 1998 originate  from loans,  which
bear interest at market rates,  made primarily to the Company's  chief executive
officer, other stockholders and to Inversiones La Ribera, S.A., ("Inversiones La
Ribera"), a company 100% owned by the Company's Chief Executive Officer.

Current and long-term  balances due to  stockholders  in 1999 and 1998 originate
from  notes  payable  to  the  Company's  Chief  Executive   Officer  and  other
stockholders.

During  February and September 1999 Pipasa  declared and distributed a preferred
stock dividend to all of its common stockholders,  which included Inversiones La
Ribera,  which has a 40.44% minority ownership interest in Pipasa. The preferred
stock dividend distributed to Inversiones La Ribera amounted to 92,044 preferred
shares in February and 114,428 preferred shares in September,  which had a value
of $334,075  and  $415,317 on the February  and  September  distribution  dates,
respectively.  Immediately  after  the  issuance  of  the  preferred  shares  to
Inversiones  La  Ribera,  Pipasa  repurchased  these  preferred  shares  for  an
equivalent amount using the proceeds to cancel  outstanding debts of Inversiones
La Ribera.

During October 1998, As de Oros  transferred its poultry  incubation and raising
operations  to Pipasa.  As part of this  transfer,  Pipasa  assumed all of As de
Oros' inventory related to its poultry incubation and raising operations,  which
amounted  to  $1.9  million.  As de Oros  has  maintained  ownership  of all the
property and equipment related to its poultry  operations and rents these assets
to Pipasa on a monthly  basis.  The  transfer  and  rental of these  assets  was
approved by the boards of  directors  of both Pipasa and As de Oros.  Any effect
related to this transfer has been eliminated in consolidation.

During October 1998,  Pipasa  transferred the production and marketing of animal
feed to As de Oros. As part of this transfer, As de Oros assumed all of Pipasa's
animal feed inventory and accounts receivable from this segment,  which amounted
to $39,000 and  $265,000,  respectively, on the transfer  date.  The transfer of
these  assets was  approved by the Boards of  Directors of both Pipasa and As de
Oros. Any effect related to this transfer is eliminated in consolidation.


                                      -38-
<PAGE>


ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORMS 8-K.

     14(a)  Documents  filed  for this  item are  filed  as a  separate  section
following the signature page.  Reference is made to the  Consolidated  Financial
Statements on page F-1.

     (1)  See Page No. F-1.

     (2)  Schedules,  other than those listed on Page F-1 are omitted because of
          the absence of conditions under which they are required or because the
          information  required  is  included  in  the  consolidated   financial
          statements and notes thereto.

     (3)  Exhibits

          Number     Description                   Reference
          ----------------------------------------------------------------------
          (2)       Acquisition Plans

              2.1                        Stock Purchase Agreement, dated as of
                                         September 28, 1998, by and between
                                         the Company and Inversiones La
                                         Ribera, S.A. filed as Exhibit 2.1 to
                                         Form 8-K filed on December 7, 1999 is
                                         incorporated by reference herein.

              2.2                        Stock Purchase Agreement, dated as of
                                         September 28, 1998, by and between
                                         the Company and Comercial Angui, S.A.
                                         filed as Exhibit 2.1  to Form 8-K
                                         filed on November 29, 1999  is
                                         incorporated by reference herein.

          (27)    Financial Data Schedule  See page 72.

     (b)  Reports  on form 8-K.  During the first  quarter of fiscal  year ended
September 30, 1999, the Company filed one report on Form 8-K on October 13, 1998
and one report on Form 8K/A on November 18, 1999 pertaining to the  acquisitions
referenced  above.  These reports and exhibits thereto filed on October 13, 1998
and November 18, 1999 are hereby incorporated by reference.

                                      -39-
<PAGE>

                                   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.


                                            RICA FOODS, INC.



Dated January 13, 2000                      By: /s/ Calixto Chaves
                                               -----------------------------
                                               Calixto Chaves
                                               Chief Executive Officer


         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.



Dated January 13, 2000                      By: /s/ Randall Piedra
                                               -----------------------------
                                               Randall Piedra
                                               Chief Financial Officer



Dated January 13, 2000                      By: /s/ Monica Chaves
                                               -----------------------------
                                               Monica Chaves
                                               Secretary




                                      -40-
<PAGE>

                                   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.

                                            RICA FOODS, INC.


Dated January 13, 2000                     By:      /s/Calixto Chaves
                                               --------------------------------
                                               Calixto Chaves
                                               Chairman


Dated January 13, 2000                     By:      /s/Randall Piedra
                                               --------------------------------
                                               Randall Piedra
                                               Chief Financial Officer



Dated January 13, 2000                     By:      /s/Monica Chaves
                                               --------------------------------
                                               Monica Chaves Zamora
                                               Secretary


         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.

                                          PRESIDENT,
                                          CHIEF EXECUTIVE OFFICER
                                          AND CHAIRMAN


Dated January 13, 2000                     By:      /s/Calixto Chaves
                                               --------------------------------
                                               Calixto Chaves
                                               Chairman


                                          CHIEF FINANCIAL OFFICER


Dated January 13, 2000                     By:      /s/Randall Piedra
                                               --------------------------------
                                               Randall Piedra
                                               Chief Financial Officer


                                          SECRETARY


Dated January 13, 2000                     By:      /s/Monica Chaves
                                               --------------------------------
                                               Monica Chaves Zamora
                                               Secretary


                                      -41-
<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10K

                                    EXHIBITS

                                       TO

                                RICA FOODS, INC.







                                       F-1
<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


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, 1999 and 1998,
and the related  consolidated  statements of income,  stockholders'  equity, and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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,  1999  and  1998,  and  the  results  of its
operations and cash flows for the years then ended in conformity  with generally
accepted accounting principles.





Miami, Florida,
December 20, 1999.


                                       F-2
<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



The Board of Directors and Stockholders of,
  RICA FOODS, INC.

We  have   audited  the   accompanying   consolidated   statements   of  income,
stockholders'  equity and cash flows of RICA FOODS,  INC. and  Subsidiary  as of
September  30, 1997 and for the year then ended.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   Management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatements. 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  statements  presentation.  We  believe  that  our  audit  provides  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
Subsidiary as of September  30, 1997,  and the results of their  operations  and
its cash flows for the year ended  September  30,  1997,  in  conformity  with
generally accepted accounting principles.


San Jose, Costa Rica
December 5, 1997.





                                       F-3
<PAGE>


                        RICA FOODS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                           September 30, 1999 and 1998


                 Assets                                 1999            1998
                                                   ------------    ------------
Current assets:
  Cash and cash equivalents                        $  3,913,168    $  3,290,757
  Short-term investments                                 32,747         101,892
  Notes and accounts receivable, net                  9,603,282       8,290,021
  Due from related parties                            2,954,579         656,904
  Inventories, net                                   13,896,517      12,862,456
  Prepaid expenses                                      366,221         648,918
                                                   ------------    ------------
      Total current assets                           30,766,514      25,850,948
                                                   ------------    ------------

Property, plant and equipment, net                   31,923,486      28,494,233
Long-term receivables-trade                             114,346         119,229
Long-term investments                                 4,260,663       4,720,335
Other assets                                          1,875,888       2,039,443
Cost in excess of net assets of acquired
  business, net                                       1,382,226       1,781,147
                                                    ------------    ------------
      Total assets                                 $ 70,323,123    $ 63,005,335
                                                   ============    ============

      Liabilities and Stockholders' Equity

Current liabilities:
  Accounts payable                                 $ 12,084,992    $  7,510,750
  Accrued expenses                                    3,604,397       3,035,951
  Notes payable                                       7,582,890       8,463,052
  Current portion of long-term debt                   1,182,184       1,940,073
  Due to stockholders                                    75,108          75,671
                                                   ------------    ------------
      Total current liabilities                      24,529,571      21,025,497
                                                   ------------    ------------

Long-term debt,  net of current portion              21,443,589      22,559,425
Due to stockholders                                      16,715          18,526
Deferred income tax liability                         1,764,735       1,974,407
                                                   ------------    ------------
      Total liabilities                              47,754,610      45,577,855
                                                   ------------    ------------

Minority interest                                     9,468,206       7,108,424
Stockholders' equity:
  Common stock                                            7,486           7,419
  Preferred stock                                     2,216,072       2,216,072
  Additional paid-in capital                         12,137,326      11,987,393
  Accumulated other comprehensive loss               (6,828,500)     (5,630,035)
  Retained earnings                                   6,481,305       3,344,440
                                                   ------------    ------------
                                                     14,013,689      11,925,289
  Less:
  Due from stockholders                                (644,988)       (170,413)
  Treasury stock, at cost                              (268,394)     (1,435,820)
                                                   ------------    ------------
      Total  stockholders'equity                     13,100,307      10,319,056
                                                   ------------    ------------
      Total liabilities and stockholders' equity   $ 70,323,123    $ 63,005,335
                                                   ============    ============

The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.


                                       F-4
<PAGE>




                        RICA FOODS, INC. AND SUBSIDIARIES
                        Consolidated Statements of Income
                  Years ended September 30, 1999, 1998 and 1997

<TABLE>
<CAPTION>

                                                                    1999                1998              1997
                                                                    ----                ----              ----
<S>                                                          <C>                 <C>                <C>
       Sales                                                  $ 118,549,625       $  98,793,976      $ 64,658,352
       Cost of sales                                             77,274,794          71,464,203        47,846,878
                                                              -------------       -------------      ------------
            Gross profit                                         41,274,831          27,329,773        16,811,474
                                                              -------------       -------------      ------------
       Operating expenses:
         General and administrative                              11,412,996           8,694,664         6,049,338
         Selling                                                 17,035,717          12,182,757         6,800,375
         Amortization  of cost in  excess of net
           assets of acquired business                              398,941             297,206                 -
                                                              -------------       -------------      ------------
                                                                                                                               -
             Total operating expenses                            28,847,654          21,174,627        12,849,713
                                                              -------------       -------------      ------------

             Income from operations                              12,427,177           6,155,146         3,961,761
                                                              -------------       -------------      ------------
       Other expenses (income):
         Interest expense                                         3,484,314           3,108,182         2,509,131
         Interest income                                           (677,155)           (614,211)         (826,870)
         Foreign exchange losses, net                             1,806,311           1,412,971           205,988
         Miscellaneous, net                                        (360,341)         (1,392,732)         (308,993)
                                                              -------------       -------------      ------------
           Other expenses, net                                    4,253,129           2,514,210         1,579,256
                                                              -------------       -------------      ------------
           Income before income taxes and minority interest       8,174,048           3,640,936         2,382,505
                                                              -------------       -------------      ------------
       Provision for income taxes                                   762,472             188,663           291,396
                                                              -------------       -------------      ------------
             Income before minority interest                      7,411,576           3,452,273         2,091,109
       Minority interest                                         (4,133,011)         (2,094,962)       (1,164,877)
                                                              -------------       -------------      ------------
             Net income                                           3,278,565           1,357,311           926,232
       Preferred stock dividends                                    237,910             227,357           172,496
                                                              -------------       -------------      ------------
       Net income applicable to common stockholders              $3,040,655          $1,129,954         $ 753,736
                                                              =============       =============      ============
       Earnings per share:
         Basic earnings per share                             $        0.43       $        0.16      $       0.11
                                                              =============       =============      ============
         Diluted earnings per share                           $        0.42       $        0.16      $       0.11
                                                              =============       =============      ============
       Weighted average number of common shares outstanding:
         Basic                                                    7,122,170          7,078,949          6,592,021
                                                              =============       =============      ============
         Diluted                                                  7,269,769          7,113,265          6,639,075
                                                              =============       =============      ============

</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements


                                       F-5
<PAGE>



                        RICA FOODS INC. AND SUBSIDIARIES
                 Consolidated Statements of Stockholders' Equity
                  Years ended September 30, 1999, 1998 and 1997
<TABLE>
<CAPTION>

<S>                  <C>       <C>     <C>        <C>       <C>       <C>           <C>      <C>             <C>          <C>
                                                                                      Due      Accumulated                 Total
                                                                        Additional    from        Other                    Stock-
                        Common Stock     Treasury Stock     Preferred    Paid-In     Stock-  Comprehensive   Retained     holders'
                      Shares    Amount  Shares     Amount      Stock      Capital    holders       Loss       Earnings     Equity
                      ------    ------  ------     ------      -----      -------    -------      ------      --------     ------
Balance, September
  30, 1996           6,519,799 $ 6,520        -   $      -   $2,216,072  $9,363,293 (1,104,990) ($3,596,253) $2,099,278 $ 8,983,920
Issuance of common
  stock                 83,333      83        -          -            -      24,916          -            -           -      24,999
Cash dividends on
  common stock of
  Pipasa                     -       -        -           -           -           -          -            -    (730,472)   (730,472)
Cash dividends  on
  preferred stock
  of Pipasa                  -       -        -           -           -           -          -            -    (172,496)   (172,496)
Purchase of common
  stock                      -       -  188,329    (847,967)          -           -          -            -           -    (847,967)
Comprehensive Income:
  Net income                 -       -        -           -           -           -          -            -     926,232     926,232
  Translation
    adjustment               -       -        -           -           -           -          -   (1,079,296)             (1,079,296)
  Decrease in Due
    from Stockholders        -       -        -           -           -           -    184,514            -           -     184,514
                     --------- -------  -------  ----------  ----------  ---------- ----------  -----------  ---------- -----------
Balance, September
  30, 1997             6,603,132  6,603 188,329    (847,967)  2,216,072  9,388,209    (920,476)  (4,675,549)  2,122,542   7,289,434
Acquisition of As
  de Oros                815,686    816       -           -           -  2,599,184           -            -           -   2,600,000
Cash dividends on
  preferred stock
  of Pipasa                   -       -       -           -           -          -           -            -    (135,413)   (135,413)
Repurchase of
   common stock               -       - 276,710  (1,245,197)          -          -           -            -           -  (1,245,197)
Stock swapped for
  Pipasa's "TCA"
  preferred stock             -       -(146,077)     657,344          -          -           -            -           -     657,344
Pipasa Preferred "TCA"
  stock issued as
  dividend of common
  stock                       -       -       -           -   1,103,666          -           -            -           -  1,103,666
Repurchase of Pipasa's
  TCA stock                   -       -       -           -  (1,103,666)         -           -            -           - (1,103,666)
Comprehensive Income:
  Net income                  -       -       -           -           -          -           -            -   1,357,311   1,357,311
  Translation
    adjustment                -       -       -           -           -          -           -     (954,486)          -    (954,486)
  Decrease in Due
    from Stockholders         -       -       -           -           -          -     750,063            -           -     750,063
                      --------- ------- ------- ------------ ---------- ----------- ----------  -----------  ---------- -----------
Balance, September
   30, 1998           7,418,818  $7,419 318,962 ($1,435,820) $2,216,072 $11,987,393  ($170,413) ($5,630,035) $3,344,440 $10,319,056


</TABLE>

                                                          CONTINUED ON NEXT PAGE


                                      F-6
<PAGE>



<TABLE>
<CAPTION>

<S>                  <C>       <C>     <C>        <C>       <C>       <C>           <C>      <C>             <C>          <C>
                                                                                      Due      Accumulated                 Total
                                                                        Additional    from        Other                    Stock-
                        Common Stock      Treasury Stock     Preferred    Paid-In     Stock-  Comprehensive   Retained     holders'
                      Shares    Amount  Shares     Amount      Stock      Capital    holders       Loss       Earnings     Equity
                      -----     ------  ------     ------      -----      -------    -------      ------      --------     ------

Pipasa's Preferred
  "TCA" stock issued
  as dividends of
  common stock                -       -       -           -     826,100           -           -            -           -    826,100
Pipasa's treasury
  Preferred "TCA"
  stock issued as
  dividends of common
  stock                       -       -       -           -   1,103,666           -           -            -           -  1,103,666
Repurchase of Pipasa's
  "TCA" stock                 -       -       -           -  (1,929,766)          -           -            -           - (1,929,766)
Cash dividends on
  preferred stock
  of Pipasa                   -       -       -           -           -           -          -            -    (141,700)   (141,700)
Repurchase of common
  stock                       -       -   5,500     (77,771)          -           -          -            -           -     (77,771)
Adjustment to
  outstanding
  common stock,
  result of
  reverse stock split       321
Warrants exercised       66,666      67       -           -           -     149,933          -            -           -     150,000
Issued treasury stock         -       -(276,710)  1,245,197           -           -          -            -           -   1,245,197
Comprehensive Income:
  Net income                  -       -       -           -           -           -          -            -   3,278,565   3,278,565
  Translation
    adjustment                -       -       -           -           -           -          -   (1,198,465)          -  (1,198,465)
  Increase in Due
    from Stockkholders        -       -       -           -           -           -   (474,575)           -           -    (474,575)
                      --------- ------- ------- ------------ ---------- ----------- ----------  -----------  ---------- -----------
Balance September 30,
  1999                7,485,805 $ 7,486  47,752 ($  268,394) $2,216,072 $12,137,326  ($644,988) ($6,828,500) $6,481,305 $13,100,307
                      ========= ======= ======= ============ ========== =========== ==========  ============ ========== ===========
</TABLE>


The accompanying notes to the consolidated  financial statements are an integral
part of these statements.



                                       F-7
<PAGE>




                        RICA FOODS, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                  Years ended September 30, 1999, 1998 and 1997

<TABLE>
<CAPTION>


                                                                               1999                 1998                  1997
                                                                               ----                 ----                  ----
<S>                                                                       <C>                  <C>                 <C>
Cash flows from operating activities:
     Net income                                                            $ 3,278,565          $ 1,357,311         $   926,232
                                                                           -----------          -----------         -----------
     Adjustment to reconcile net income to
         net cash provided by operating activities:
              Depreciation and amortization                                  3,197,646            2,313,075           1,384,910
              Production poultry                                             1,697,887            1,340,431             982,823
              Allowance for inventory obsolescence                              28,740               29,435                   -
              Amortization  of cost in excess  of net  assets
                  of acquired business                                         398,941              297,206                   -
              Amortization of software development costs                       196,942              122,761             105,534
              Loss on sale of productive assets                               (214,867)              (3,732)            (76,519)
              Deferred income tax benefit                                     (209,671)            (122,308)                   -
              Provision for doubtful  receivables                              746,599              301,432             213,000
              Minority interest                                              4,133,011            2,094,962           1,164,877
     Changes in operating assets and liabilities:
              Notes and accounts receivable                                 (1,651,518)             952,598          (1,989,098)
              Due from related parties                                      (1,801,661)             116,693             108,143
              Inventories                                                   (2,674,111)          (1,891,920)         (1,722,092)
              Prepaid expenses                                                 (25,998)             967,717              13,479
              Accounts payable                                               4,548,021           (1,920,001)          2,956,628
              Accrued expenses                                                 568,444              379,910             611,497
              Long-term receivable-trade                                        (6,109)              56,116              13,568
                                                                           -----------          -----------         -----------
                  Cash provided by operating
                      activities                                            12,210,861            6,391,686           4,692,982
                                                                           -----------          -----------         -----------
Investing activities:
      Short-term investments                                                    69,145            1,833,749          (1,795,778)
      Initial cash balance from subsidiary acquired                                  -            1,147,472                   -
      Additions to property, plant and equipment                            (9,419,401)          (5,313,919)         (3,973,736)
      Increase in long-term investments                                              -            (2,135,614)         (3,708,805)
      Proceeds from sales of productive  assets and long-term
         investments                                                           708,629              348,818              90,597
      Increase in other assets                                                (229,060)            (723,579)           (232,923)
                                                                           -----------          -----------         -----------

                  Cash used in investing activities                         (8,870,687)          (4,843,073)         (9,620,645)
                                                                           -----------          -----------         -----------
Financing activities:
     Increase (decrease) in notes payable                                     (883,332)            2,510,177           1,783,467
     Preferred stock cash dividends                                           (339,570)             (288,219)           (172,496)
     Common stock cash dividends                                                     -                     -          (1,343,569)



                                                                                                         (Continued on next page)
</TABLE>

                                       F-8
<PAGE>



                        RICA FOODS, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                  Years ended September 30, 1999, 1998 and 1997

                                                              (Continued)
<TABLE>
<CAPTION>


                                                                               1999                 1998                  1997
                                                                               ----                 ----                  ----
<S>                                                                       <C>                  <C>                 <C>
Long-term financing:
    Payments                                                               (2,249,772)          (2,753,919)         (2,134,580)
    New loans                                                                 445,095            2,344,966           3,134,004
    Treasury stock acquired                                                   (77,771)                   -                   -
    Due to related parties                                                          -              205,546              60,424
    Due from stockholders                                                    (474,575)          (2,414,934)             150,265
    Cash proceeds from exercise of warrants                                   150,000                    -              25,000
    Repurchase of common stock                                                      -                    -            (150,589)
                                                                           -----------          -----------         -----------
                  Cash provided by (used in) financing
                      activities                                            (3,429,925)            (396,383)          1,351,926
                                                                           -----------          -----------         -----------
Effect of exchange rate changes on cash
     and cash equivalents                                                      712,162              750.237            (165,285)
                                                                           -----------          -----------         -----------
                  Increase   (decrease)   in  cash  and  cash
                      equivalents                                              622,411            1,902,467          (3,741,022)
Cash and cash equivalents at beginning of year                               3,290,757            1,388,290           5,129,312
                                                                           -----------          -----------          ----------
Cash and cash equivalents at end of year                                   $ 3,913,168         $ 3,290,757           $1,388,290
                                                                            ===========         ============         ==========

Supplemental disclosures of cash flow information:
     Cash paid during year for:
       Interest                                                            $ 2,611,202         $ 2,482,826          $2,493,,716
                                                                           ===========          ===========         ===========
       Income taxes                                                        $   281,191         $   117,935          $    61,030
                                                                           ===========          ===========         ===========

      Supplemental schedule of non-cash investing activities
       Acquisition of  treasury stock through
          financial agreement                                              $                    $ 1,245,197        $          -
                                                                           ===========          ===========        ============
       Issuance of treasury stock through financial agreement              $ 1,245,197          $         -        $          -
                                                                           ===========          ===========        ============
       Dividends paid as preferred shares                                  $ 1,929,766          $ 1,103,666        $          -
                                                                           ===========          ===========        ============
       Pipasa's  preferred stock  repurchased in exchange for
            outstanding receivables                                        $ 1,929,766          $ 1,103,666        $          -
                                                                           ===========          ===========        ============
       Acquisition of business:
           Fair value of assets acquired                                   $         -          $ 7,709,050        $          -
                                                                           ===========          ===========        ============
           Common stock issued                                             $         -          $ 2,600,000        $          -
                                                                           ===========          ===========        ============
           Loan assumed                                                    $         -          $ 2,400,000        $          -
                                                                           ===========          ===========        ============


The accompanying notes to consolidated financial statements are an integral part
of these statements

</TABLE>


                                       F-9
<PAGE>



1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Nature of Operations
     --------------------

RICA FOODS, INC., (the "Company"),  formerly Quantum Learning Systems,  Inc. was
incorporated under the laws of the State of Utah on February 6, 1986 and filed a
public  offering in 1987. In April 1994, the Company  changed its legal domicile
from Utah to Nevada.  In April 1996,  the Company  entered  into an  acquisition
agreement (the "First Pipasa Agreement") to acquire the majority of the stock of
Corporacion Pipasa, S.A. ("Pipasa"),  a Costa Rican entity. This transaction was
approved by the stockholders of the Company on August 5, 1996 and consummated on
September 30, 1996.  Simultaneously  with the acquisition of Pipasa, the Company
divested itself of all other subsidiaries.  Pursuant to the Agreement, and as of
September  30, 1996,  the Company had exchanged  5,191,190  shares of its common
stock for  approximately  59.56% of Pipasa's common shares.  The 40.44% interest
not  acquired  in the merger  transaction  has been  accounted  for as  minority
interest for all years presented.

On February 26, 1998,  the Company  consummated an agreement (the "Original Oros
Agreement")  to purchase  56.38% of the  outstanding  common stock of As de Oros
S.A. ("As de Oros"), a Costa Rican  corporation,  from Comercial Angui,  S.A., a
privately-held  Costa Rican corporation  ("Comercial  Angui"), for consideration
consisting of (I) a promissory  note with a stated amount of $2.4 million due in
January,  2000, and (II) 815,686  (2,447,058  pre-split) shares of the Company's
common stock, having a then current market value of approximately $2.6 million.

Pipasa and As de Oros  produce  and market  poultry  products  and animal  feed,
mainly  in the  Republic  of Costa  Rica.  As de Oros also owns a chain of quick
service fried chicken  restaurants,  which operate in Costa Rica. Pipasa exports
its products to El Salvador, Honduras, Nicaragua, and Colombia.

During 1998, an  independent  committee of  stockholders  and  Management of the
Company  commenced  discussions  with Comercial Angui and its sole  shareholder,
Antonio  Echeverria,  concerning  the  possibility  of purchasing  the remaining
shares of As de Oros from Comercial Angui to eliminate the minority  interest of
Comercial  Angui in As de Oros. On September 28, 1998, the Company and Comercial
Angui  entered  into an  agreement  (the  "Final  Oros  Agreement")  to purchase
Comercial Angui's  remaining  interest in As de Oros for 1,670,921 shares of the
Company's  common stock.  On November 9, 1998,  the Company and Comercial  Angui
entered into an amendment to the Final Oros  Agreement  that  provided  that the
transaction  would  not  be  consummated  until  holders  of a  majority  of the
Company's  common stock approved the transaction and until the Company  received
an opinion that the  transaction was fair to the Company's  stockholders  from a
financial point of view. The  stockholders'  approval and fairness  opinion were
received in December, 1998 and January, 1999, respectively.

On November 22, 1999, the Company  consummated  the acquisition of the remaining
43.62% or 654,300  shares of common stock of As de Oros in  accordance  with the
terms and conditions in the Final Oros Agreement.

On September 28, 1998,  the Company  consummated an agreement (the "Final Pipasa
Agreement")  providing for the purchase of the remaining  common stock of Pipasa
from  Inversiones  La Ribera,  S.A.  ("Inversiones  La  Ribera"),  a Costa Rican
company and minority  holder of Pipasa,  for  3,683,595  shares of the Company's
common stock. On November 9, 1998, the Company and Inversiones La Ribera entered
into an  amendment  to the  Final  Pipasa  Agreement  which  provided  that  the
transaction  would not be  consummated  until




                                       F-10
<PAGE>



(I)  holders  of  a  majority  of  the  Company's   common  stock  approved  the
transaction,  and (II) the Company  received an opinion that the transaction was
fair  to the  Company's  stockholders  from  a  financial  point  of  view.  The
stockholders'  approval and fairness  opinion were received in December 1998 and
January 1999,  respectively.  On December 7, 1999, the Company  consummated  the
acquisition  of the  remaining  40.44% or  1,840,000  shares of common  stock of
Pipasa  pursuant  to the Final  Pipasa  Agreement,  in  exchange  for a total of
3,683,595 shares of the Company's common stock.

On April 14,  1998,  the Board of  Directors  of the Company  adopted a proposal
which changed the Company's name from "Costa Rica International,  Inc." to "RICA
FOODS,  INC." The Board of  Directors  believes  the name  change is in the best
interests of the Company  because it enhances the Company's  corporate  identity
with a name that is more closely  related to the poultry  producing  business of
its principal subsidiaries, Pipasa and As de Oros.

On December 15, 1998,  the Board of Directors  declared a 1 for 3 reverse  stock
split (the  "Split") of the  Company's  common  stock  effective on December 29,
1998. All share amounts have been restated to reflect the Split.


The Company's  fiscal years 1999,  1998 and 1997  encompass  the periods  ending
September 30, 1999, 1998 and 1997, respectively.

     Accounting Principles
     ---------------------

The  consolidated  financial  statements  have been prepared in accordance  with
generally  accepted  accounting  principles  in the  United  States  of  America
("GAAP").  Accounting records of the subsidiaries,  Corporacion Pipasa, S.A. and
Corporacion  As de Oros,  S.A. are  maintained  according to generally  accepted
accounting  principles  in  Costa  Rica  and  have  been  converted  to  GAAP in
consolidation and for financial statement presentation purposes.

     Principles of Consolidation
     ---------------------------

The consolidated  financial statements include the accounts of Rica Foods, Inc.,
and  Subsidiaries  (subsidiaries  include  Pipasa and As de Oros).  The minority
interests held by third parties in Pipasa and As de Oros are stated  separately.
All significant  intercompany  balances and transactions have been eliminated in
consolidation.

The consolidated financial statements as of September 30, 1999 and 1998 reflect
the September 30, 1996 acquisition of Pipasa as a reverse  acquisition,  whereby
Pipasa  was  treated as the  accounting  acquiror  and the  Company as the legal
acquiror.

The  consolidated  financial  statements of the Company as of September 30, 1999
and 1998  reflect the  acquisition  of As de Oros using the purchase  method of
accounting.  The excess of purchase  price over the fair market value of the net
assets acquired is being amortized using the straight-line  method over a period
of five years.

Certain  prior period  balances  have been  reclassified  to conform to the 1999
presentation.

                                       F-11
<PAGE>


     Use of Estimates in the Preparation of Financial Statements
     ------------------------------------------------------------

The  preparation  of  financial  statements  in  conformity  with GAAP  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the date of the financial  statements  and the reported  amounts of revenues and
expenses during the reporting period.  Significant  estimates made by management
include but are not limited to the  realization  of  inventories,  the  possible
outcome  of  outstanding   litigation   and  ultimate   collection  of  customer
receivables. Actual results in subsequent periods could differ from estimates.

     Foreign Currency Translation
     ----------------------------

Most  business  transactions  of the  Company's  subsidiaries  take place in the
Republic  of Costa Rica and are  denominated  in the local  currency,  the colon
((cent)).  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. As of
September 30, 1999, 1998 and 1997, commercial exchange rates were (cent) 292.69,
(cent) 264.07 and (cent) 238.77 for US $1.00, respectively.

The financial statements of Pipasa and As de Oros have been translated into U.S.
dollars  on the basis of the  colon  ((cent))  as the  functional  currency,  as
follows:  assets and  liabilities  denominated  in dollars  have been  stated at
nominal  dollar  amounts;  assets and  liabilities  denominated  in Costa  Rican
colones  have been  translated  at the  commercial  exchange  rates in effect on
September 30, 1999 and 1998;  stockholders' equity accounts have been translated
at  historical  exchange  rates;  income and expenses  have been  translated  at
average exchange rates in effect during the years ended September 30, 1999, 1998
and 1997. The related  translation  adjustments are reflected in the accumulated
other comprehensive loss section of the consolidated statements of stockholders'
equity.

     Cash and Cash Equivalents/Fair Value of Financial Instruments
     -------------------------------------------------------------

The  Company  classifies  as cash  and  cash  equivalents  all  interest-bearing
deposits with original  maturities of three months or less.  The fair value of a
financial  instrument  represents  the amount at which the  instrument  could be
exchanged in a current  transaction  between  willing  parties,  other than in a
forced sale or liquidation. Fair value estimates are made at a specific point in
time, based on relevant market information about the financial instrument. These
estimates  are  subjective  in nature and involve  uncertainties  and matters of
significant  judgment,  and therefore  cannot be determined with precision.  The
assumptions used have a significant effect on the estimated amounts reported.

The carrying value of cash and cash equivalents,  short-term investments,  notes
and  accounts  receivable  due from related  parties,  accounts  payable,  notes
payable and due to stockholders,  are a reasonable  estimate of their fair value
due to the short-term  nature of these  instruments.  The Company estimates that
the carrying value of current  installments of long-term debt and long-term debt
approximates  fair value because  interest rates are adjustable  based on market
interest rates.


                                      F-12
<PAGE>

Futures  contracts  with  original  maturities of less than one year are used to
hedge  fluctuations in corn and soybean meal prices.  The Company does not enter
into  derivative  transactions  for  speculative  purposes.  Gains and losses on
commodity  futures  transactions  are deferred  until the futures  contracts are
liquidated. As of September 30, 1999, the Company has futures contracts in place
to  hedge  purchases  of  commodities  for  $2.7  million  with a fair  value of
approximately the same amount.

     Inventories and Production Poultry
     ----------------------------------

Inventories are stated at the lower of cost or market.  Cost is determined using
the weighted-average method, except for inventories in transit, which are valued
at specific cost. Costs pertaining to the growth period of reproductive hens are
capitalized and are subsequently  amortized over the expected  reproductive life
of the hens.

     Property, Plant and Equipment
     -----------------------------

Property,  plant and  equipment  are stated at cost.  Improvements  to property,
plant and equipment which extend their useful lives are  capitalized.  Costs for
maintenance, repairs and minor renewals are charged to expense when incurred.

Depreciation  expense is recorded using the straight-line  method over estimated
useful   lives:    buildings   and    facilities-50    years;    machinery   and
equipment-between 5 and 20 years.

Costs of leasehold  rights on  properties  that are  accounted  for as operating
leases are  capitalized  and amortized over the respective  lease term using the
straight-line method.

     Advertising Costs
     -----------------

Advertising  costs are  expensed  as  incurred.  Advertising  costs  amounted to
$1,356,226, $815,699 and $295,768 for the fiscal years ended September 30, 1999,
1998 and 1997,  respectively.  Advertising  expenses  are  included  in  selling
expenses in the accompanying statements of income.

     Income Taxes
     ------------

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards ("SFAS") No. 109, "Accounting for Income Taxes." Under the
asset and liability method of SFAS No. 109,  deferred tax assets and liabilities
are  recognized  for the future tax  consequences  attributable  to  differences
between  the  financial  statement  carrying  amounts  of  existing  assets  and
liabilities and their respective tax bases.  Deferred tax assets and liabilities
are measured  using  enacted  rates  expected to apply to taxable  income in the
years in which those  temporary  differences  are  expected to be  recovered  or
settled. Under SFAS No.109, the effect on deferred tax assets and liabilities of
a change in tax rates is  recognized  as income in the period that  includes the
enactment date.


                                      F-13
<PAGE>

     Change in Method of Accounting
     ------------------------------

For the fiscal year ended  September 30, 1999, the Company changed its method of
accounting  for  sales  and  purchases  from  integrated  producers.  Integrated
producers are local farmers who raise and feed poultry on behalf of the Company.
The new method  adopted on October 1,  1998,  reflects  chickens  and  materials
transferred  to  integrated  producers  as  inventory.  The  method  used  until
September  30,  1998,  reflected  transfers  of  chicken  and  materials  to the
integrated  producers as sales at cost.  The effect of the change in  accounting
method was a decrease in sales and cost of sales of approximately  $11.5 million
for the year ended  September 30, 1999.  For the years ended  September 30, 1998
and 1997, the Company  recorded sales and cost of sales to integrated  producers
in the amounts of $4.9 million and $5.4 million, respectively. Sales and cost of
sales is included in "Others"  segment.  The statements of income for the fiscal
years ended  September  30, 1998 and 1997 have been  restated to reflect the new
method of accounting.  The effect of this  restatement was to decrease sales and
cost of sales by $4.9  million and $5.4  million for fiscal years ended 1998 and
1997,  respectively.  The  restatement  increased  the gross profit  margin from
26.36% to 27.66% for  fiscal  1998 and from  $24.01% to 26.00% for fiscal  1997.
There was no effect in the net income for the years ended  September  30,  1999,
1998 and 1997.

     New Accounting Pronouncements
     -----------------------------

     Disclosures about Segments of an Enterprise and Related Information

Effective September 30, 1999, the Company adopted the SFAS No. 131, "Disclosures
about  Segments  of  an  Enterprise  and  Related  Information."  SFAS  No.  131
establishes  standards for the way that public  enterprises  report  information
about operating  segments in annual financial  statements and requires that such
enterprises  report  selected  information  about operating  segments  financial
geographic area and major customers. SFAS No. 131 also established standards for
related  disclosures  about  products and services,  geographic  areas and major
customers.  The adoption of SFAS No. 131 did not affect results of operations or
financial position.

     Accounting for Derivative Instruments and for Hedging Activities

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting for Derivative  Instruments and Hedging Activities" for fiscal years
beginning after June 15, 1999. SFAS No.133 establishes  accounting and reporting
standards  requiring  that  every  derivative   instrument,   including  certain
derivative  instruments embedded in other contracts,  and for hedging activities
be  recognized  as either an asset or a liability in the  statement of financial
position and measure  those  instruments  at fair value.  The Company will adopt
SFAS  No.  133 in  fiscal  year  2001.  Management  of the  Company  has not yet
quantified the impact of adopting SFAS No.133.  Application of this statement is
defferred by SFAS No. 137 for one year from June 15, 1999 to June 15, 2000.  The
Company will adopt SFAS No. 131 for fiscal 2001.




                                      F-14


<PAGE>


     Reporting on the Cost of Start-Up Activities

In April 1998, the American Institute of Certified Public Accountants  ("AICPA")
issued Statement of Position  ("SOP") 98-5,  "Reporting on the Costs of Start-Up
Activities".  SOP 98-5 requires  that costs  incurred  during the  organization,
pre-opening  and start up phases of a project be  expensed as  incurred,  unless
they  are   appropriately   capitalizable   under  other   existing   accounting
pronouncements.  The  Company  adopted  SOP 98-5  during the  fiscal  year ended
September  30,  1999  which  did not have a  material  effect  on its  financial
position and results of operations.

     Accounting for software developed for internal use.

In March 1998, the AICPA issued SOP 98-1  "Accounting  for the Costs of Computer
Software  Developed or Obtained for Internal  Use".  SOP 98-1 sets  guidance for
capitalization, amortization and evaluating impairment of software developed for
internal  use.  The  Company  adopted  SOP 98-1  during  the  fiscal  year ended
September  30,  1999,  which did not have a  material  effect  on its  financial
position and results of operations.

2.   NOTES AND ACCOUNTS RECEIVABLE

Notes and accounts receivable consist of the following:

                                                      1999              1998
                                                      ----              ----
     Accounts:
       Trade receivables                          $ 9,003,334       $ 7,771,455
       Other                                        1,142,976         1,214,400
                                                  -----------       -----------
                                                   10,146,310         8,985,855
       Less: allowance for doubtful accounts          675,334           727,005
                                                  -----------       -----------
                                                    9,470,976         8,258,850
       Short-term notes-trade                         132,306            31,171
                                                  -----------       -----------
                                                  $ 9,603,282       $ 8,290,021
                                                  ===========       ===========


3.   ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES

     Balances and transactions with related parties consist of the following:


                                                   1999                 1998
                                                   ----                 ----

       Due from stockholders                    $  644,988           $  170,413
       Due from related parties                  2,954,579              656,904
       Due to stockholders                          75,108               75,671
       Due to stockholders (long-term)              16,715               18,526


                                      F-15

<PAGE>


Balances due from stockholders for 1999 and 1998 originate from loans which bear
interest at market  rates,  made  primarily  to the  Company's  chief  executive
officer, other stockholders and to Inversiones La Ribera, S.A., ("Inversiones La
Ribera"), a company 100% owned by the Company's Chief Executive Officer.

Current and long term balances due to  stockholders  in 1999 and 1998  originate
from  notes  payable  to  the  Company's  Chief  Executive   Officer  and  other
stockholders.

During February and September, 1999, Pipasa declared and distributed a preferred
stock dividend to all of its common stockholders,  which included Inversiones La
Ribera,  which has a 40.44% minority ownership interest in Pipasa. The preferred
stock  dividend  distributed  to  Inversiones  La Ribera  amounted  to 92,044 of
preferred shares in February and 114,428 of preferred shares in September, which
had a value of $334,075 and $415,317 on the February and September  distribution
dates,  respectively.  Immediately after the issuance of the preferred shares to
Inversiones  La  Ribera,  Pipasa  repurchased  these  preferred  shares  for  an
equivalent amount using the proceeds to cancel  outstanding debts of Inversiones
La Ribera.

During October 1998, As de Oros  transferred its poultry  incubation and raising
operations  to Pipasa.  As part of this  transfer,  Pipasa  assumed all of As de
Oros', inventory related to its poultry incubation and raising operations, which
amounted  to $1.9  million  on the  transfer  date.  As de Oros  has  maintained
ownership of all the property and  equipment  related to its poultry  operations
and rents these assets to Pipasa on a monthly basis.  The transfer and rental of
these  assets was  approved by the board of  directors  of both Pipasa and As de
Oros. Any effect related to this transfer has been eliminated in consolidation.

During October 1998,  Pipasa  transferred the production and marketing of animal
feed to As de Oros. As part of this transfer, As de Oros assumed all of Pipasa's
animal feed inventory and accounts receivable from this segment,  which amounted
to $39,000 and  $265,000,  respectively  on the transfer  date.  The transfer of
these  assets was  approved by the board of  directors  of both Pipasa and As de
Oros. Any effect related to this transfer is eliminated in consolidation.


                                      F-16

<PAGE>



4.   INVENTORIES

     Inventories consist of the following:

                                                 1999                1998
                                                 ----                ----
       Finished products                     $ 3,029,269         $ 3,038,319
       Poultry                                 3,035,678           2,713,040
       Production poultry                      3,329,784           3,141,980
       Materials and supplies                  2,165,074           1,710,071
       Raw materials                           1,757,125           2,849,126
       In transit                              1,469,056             204,681
                                             -----------         -----------
                                              14,785,986          13,657,217
       Production poultry                       (836,849)           (766,736)
       Allowance for obsolescence                (52,620)            (28,025)
                                             -----------         -----------
       Inventories, net                      $13,896,517        $ 12,862,456
                                             ===========         ===========


5.   PROPERTY PLANT AND EQUIPMENT

     Property, plant and equipment is summarized as follows:

                                                   1999                 1998
                                                   ----                 ----

     Land                                      $ 3,496,529          $ 7,835,150
     Buildings and facilities                    7,693,768           11,000,373
     Machinery and equipment                    25,972,881           17,426,179
     Machinery in transit                          534,158              126,146
     Construction in process                     4,639,878              719,547
                                               -----------          -----------
                                                42,337,214           37,107,395
        Less: Accumulated depreciation         (10,413,728)          (8,613,162)
                                               -----------           ----------
        Property plant and equipment, net     $ 31,923,486          $28,494,233
                                              ============          ===========


Depreciation  expense  for the years ended  September  30,  1999,  1998 and 1997
amounted to $3,197,646, $2,313,075 and $1,384,910, respectively.

6.  LONG -TERM INVESTMENTS

     Long-term investments consist of the following:

                                                  1999                  1998
                                                  ----                  ----
     Grupo Industrias Oleaginosas S.A.
       ("INOLASA")                             $3,551,625            $3,936,551
     La Condesa, S.A.                             683,317               757,375
     Others (less than 50% ownership)              25,721                26,409
                                               ----------            ----------
                                               $4,260,663            $4,720,335
                                               ==========            ==========

                                      F-17
<PAGE>

INOLASA is the only Costa Rican  supplier of soybean meal. The Company has a 10%
ownership in INOLASA  which is accounted for under the cost method and dividends
are  recorded  in income when they are  declared.  During  fiscal year 1999,  no
dividends  were declared by INOLASA.  During the year ended  September 30, 1998,
the Company  received cash  dividends  from INOLASA  amounting to  approximately
$150,000. These dividends are included in miscellaneous, net on the consolidated
statement of income for 1998.

During  1998,  the Company  invested  $757,375 in local  currency,  colones,  in
200,000,000  preferred  shares of La Condesa  S.A.,  a Costa Rican  corporation.
These shares do not grant ownership interest.  Dividends on the preferred shares
are  payable  annually  at 5.62% in cash or in kind,  after  one year of  having
acquired the shares. La Condesa S.A. is a hotel located in Costa Rica.

7.   NOTES PAYABLE

     Notes payable consists of the following:

                                                1999               1998
                                                ----               ----
     Loans payable                           $5,661,055         $5,648,310
     Bank overdrafts                                  -          1,414,247
     Commercial paper                         1,895,613          1,075,736
     Other                                       26,222            324,759
                                             ----------         ----------
                                             $7,582,890         $8,463,052
                                             ==========         ==========

Loans payable include lines of credit and commitments  with banks for letters of
credit to support commercial operations with suppliers to acquire raw materials.
The Company has a $500,000 line of credit with Fimat, a brokerage firm, which is
used to  finance  purchases  of  corn  and  soybean.  Notes  payable,  including
commercial  paper,  are due  from  October  1999  through  August  2000  and are
collaterized by Notes.

As of September 30, 1999, the Company has line of credit  agreements  with banks
amounting to a maximum of $26.7 million of which $8.60 million have already been
used ($11.6  million  for 1998,  of which $4.8  million had already  been used).
Agreements  may be renewed  annually,  and bear interest at annual rates ranging
from 7.87% to 10.25%  (8% and 10% for 1998).  Those  agreements  are  secured by
properties of the subsidiaries.


                                      F-18
<PAGE>


8.   LONG TERM DEBT

     Long-term debt consists of the following:

                                               1999                  1998
                                               ----                  ----

     Private placement                    $ 20,000,000          $ 20,000,000
     Bank loans                              2,625,773             2,984,250
     Commercial paper-unsecured                      -                42,224
     Other                                           -             1,473,024
                                           -----------          ------------
                                            22,625,773            24,499,498

         Less: current installments          1,182,184             1,940,073
                                           -----------          ------------
                                          $ 21,443,589          $ 22,559,425
                                          ============          ============

As of September  30, 1999,  bank loans  amounting to $887,000 are secured by the
Company's property, equipment and vehicles in the amount of $1.6 million and are
due from April 2002 to May 2007.

During fiscal year 1998, the Company completed a private placement (the "Private
Placement") of $20 million in notes payable  bearing an annual  interest rate of
11.71%,  comprised  of $8 million in Series "A" Senior  Notes and $12 million in
Series "B" Senior  Notes  (collectively  the  "Notes").  The closing date of the
agreement  was on January  23,  1998 for Series "A" and  February  26,  1998 for
series "B" Notes.  Pipasa and As de Oros serve as  guarantors  for this  Private
Placement. The Private Placement includes the following terms, among others:

-    The  Notes  shall  be  payable  annually  in  five  consecutive   principal
     installments  amounting to $4,000,000  each  beginning on January 15, 2001.
     The Notes have a two-year principal payment grace period.

-    The Private  Placement  covenants  state that there will be no  significant
     organizational  changes and that the  Company  will comply with all federal
     and local laws and regulations.

-    Financial  and business  information  for the Company and its  subsidiaries
     will be remitted periodically.

-    The Private Placement includes several financial and operational covenants,
     which  must be met to  prevent  the  existence  of a  default  or  event of
     default.

Interest rates for long-term debt are as follows:

                                              1999                    1998
                                              ----                    ----
       U.S. dollar loans                   5.78%-11.71%            8.5%-11.71%
       Costa Rican colones loans             25%-27%                    -
       Commercial paper-unsecured               -                    24%-24.5%


                                      F-19
<PAGE>


Future payments on long-term debt at September 30, 1999 are as follows:

                  Year                             Amount
                  ----                             ------

                  2000                         $  1,182,184
                  2001                            4,663,256
                  2002                            4,522,063
                  2003                            4,141,197
                  2004                            4,074,615
               Thereafter                         4,042,458
                                               ------------
                                               $ 22,625,773
                                               ============


9.   EARNINGS PER SHARE

Earnings  per share is computed on the basis of the weighted  average  number of
common  shares  outstanding  plus the effect of  outstanding  warrants and stock
options using the treasury stock method  according to SFAS No. 128 "Earnings per
Share".  Earnings per share  pertaining to 1997 results of operations  have been
restated to comply with SFAS No. 128.

Earnings  per share and  weighted  average  amounts  for 1998 and 1997 have been
restated to reflect the reverse stock split effective December 29, 1998.

Following is a reconciliation of the weighted average number of shares currently
outstanding  with the number of shares used in the computations of fully diluted
earnings per share:


<TABLE>
<CAPTION>

                                                       1999            1998            1997
                                                       ----            ----            ----
<S>                                               <C>             <C>             <C>
Numerator:

  Net income applicable to common
    stockholders                                   $ 3,040,655     $ 1,129,954     $   753,736
                                                   ===========     ===========     ===========

Denominator:
  Denominator for basic income per share             7,122,170       7,078,949       6,592,021
  Effect of dilutive securities:
    Options to purchase common stock                   147,599          34,316          47,054
                                                   -----------     -----------     -----------
  Denominator for diluted earnings per
    share                                            7,269,769       7,113,265        6,639,075
                                                    ==========      ==========     ============

Earnings per share from continuing operations:

       Basic                                          $   0.43         $  0.16          $  0.11
                                                      ========         =======          =======
       Diluted                                        $   0.42         $  0.16          $  0.11
                                                      ========         =======          =======
</TABLE>


The Company did not have any antidilutive securities outstanding as of September
30, 1999, 1998 and 1997.


                                      F-20
<PAGE>


10.  EMPLOYEE BENEFIT PLAN

On April 14, 1998, the Company  adopted the 1998 Stock Option Plan (the "Plan").
Under the Plan,  200,000 shares of the Company's  common stock,  par value $.001
per share,  are  reserved  for issuance  upon  exercise of options.  The plan is
designed to serve as an incentive for retaining and attracting qualified persons
and/or entities that provide services to the company.  As of September 30, 1999,
the Company had not issued any options under the Plan.

11.  STOCKHOLDERS' EQUITY

     Common Stock

As of September 30, 1999 and 1998,  20,000,000  shares of common stock at $0.001
par value were authorized.

During November 1997, the Board of Directors  authorized the repurchase of up to
66,667 shares of the Company's common stock. The repurchase  program  authorizes
management,  at  its  discretion,  to  make  purchases  from  time  to  time  as
circumstances  warrant.  As of September 30, 1999,  no stock had been  purchased
under this program.

In August 1999,  Pipasa purchased 5,500 shares of the Company's common stock for
$77,000.  These shares have been included in treasury  stock as of September 30,
1999. The purchase was authorized by the Board of Directors of Pipasa.

     Preferred Stock

On September 30, 1999 and 1998,  1,000,000  preferred shares of the Company were
authorized. No preferred shares had been issued as of September 30, 1999.

     Pipasa

Preferred  shares  issued  consist  of Class  "C"  preferred  shares  and  "TCA"
preferred shares, which refer to "Titulos de Capital" in Costa Rica amounting to
317,831 shares and 510,565 shares, respectively.  As of September 30, 1999 there
were 317,831 shares of class "C" preferred shares  outstanding.  These preferred
shares  are  comprised  of  subcategories  and  receive  dividends  based on the
following:

o         Class "C-A", "C-B" and "C-D" preferred shares, which amount to 186,431
          shares receive a 10% annual dividend payable monthly and adjustable by
          the Board of Directors.

o         Class "C-C" preferred shares, which amount to 131,400 shares receive a
          dividend  equal to the prime  rate set by the Banco  Central  De Costa
          Rica plus two percent, payable monthly.

During fiscal 1999, 1998, and 1997 dividends of $237,411, $227,357 and $172,496,
respectively, were paid on these preferred shares and are reflected as preferred
stock dividends on the consolidated statements of income.

                                      F-21
<PAGE>


During fiscal 1999,  510,565 shares,  amounting to $1,929,766 of "TCA" preferred
shares  were  declared  by the  Board of  Directors  of Pipasa  and  issued as a
dividend to common  shareholders of Pipasa. The 510,565 shares were subsequently
repurchased  and retired by Pipasa for the  issuance  price of  $1,853,097.  The
difference  of $76,669  between the value of the stock  dividend  and the shares
repurchased arises from exchange rate differences.  Proceeds from the repurchase
were used by common  shareholders  of Pipasa to cancel  debts  payable to Pipasa
amounting to $1,853,097.

    As de Oros

As of September 30, 1999,  1,200,000  Class "C"  preferred  shares of As de Oros
were  authorized,  of which 158,374 had been issued for a total of US$1,003,287.
The holders of these preferred shares receive dividends based on the following:

o         Class C Series 1  preferred  shares  which  amount  to  87,600  shares
          receive  a  monthly  dividend  equal  to prime  rate set by the  Banco
          Central de Costa Rica plus two percent.

o         Class C Series 2  preferred  shares  which  amount  to  70,774  shares
          receive a monthly dividend of no less than 10% adjustable  annually by
          the Board of Directors.

These  preferred  shares are included in minority  interest of the  consolidated
balance sheets for the years ended September 30, 1999, and 1998.

As of September 30, 1999, there are no preferred dividends in arrears.

     Treasury Stock

As of  September  30, 1999 and 1998,  47,752 and 318,962  shares of Common Stock
amounting to $268,394 and $1,435,820 respectively, were held as treasury stock.


     Retained Earnings

Costa  Rican  legislation  requires  that 5% of  annual  net  income  (in  local
currency) up to an amount  equivalent to 20% of total capital stock be allocated
to a legal reserve.  As of September 30, 1999 and 1998, the Company has reserved
earnings of $1,374,092 and $911,780,  respectively,  for the creation of a legal
reserve.

12.  OPERATING LEASES

The Company has operating leases for vehicles and cooling equipment.  At the end
of the lease  terms,  the  Company  has the  option of  returning  or buying the
equipment at estimated  market value.  A percentage of the money paid during the
lease terms will be applied to this purchase price.

Rental  expenses  for  operating  leases  amounted  to  $819,106,  $550,627  and
$307,734, for the 1999, 1998 and 1997 fiscal years, respectively.


                                      F-22
<PAGE>



The Company was obligated for the  following  minimum  annual base rentals under
operating leases at September 30, 1999:


       Fiscal Year                                          Amount
                                                            ------
           2000                                         $ 1,042,086
           2001                                             986,936
           2002                                             537,387
           thereafter                                       129,502
                                                        -----------
                                                        $ 2,695,911
                                                        ===========

13.  INCOME TAXES

Income tax expense  attributable  to income from  continuing  operations for the
years ended September 30, 1999, 1998 and 1997 consists of:

                                       FOR THE YEARS ENDED SEPTEMBER 30,
                                       ---------------------------------
                                       1999         1998            1997
                                       ----         ----            ----
             Current                $972,143     $310,971        $291,396
             Deferred               (209,671)    (122,308)              -
                                    --------     --------         -------
             Total                  $762,472     $188,663        $291,396
                                    ========     ========         =======


Costa Rican income tax expense attributable to income from continuing operations
was  $972,143,  $310,971 and $291,396  for the years ended  September  30, 1999,
1998, and 1997, respectively,  and differs from the amounts computed by applying
the Costa  Rican  corporate  tax rate of 30% to pretax  income  from  continuous
operations as a result of the following:


<TABLE>
<CAPTION>

                                                                      1999              1998             1997
                                                                      ----              ----             ----
<S>                                                              <C>               <C>               <C>
Computed statutory income tax expense                             $ 2,452,214       $ 1,092,281       $   714,752
Increase (reduction) in income taxes resulting
    from:
    Non-taxable income, net                                          (484,171)         (281,330)         (145,952)
    Increase (decreases) in provisions                                171,445            41,926           (21,094)
    Tax benefit under Costa Rica Income Tax Law
          Article 8, Section T for Agricultural
          Companies and Article 8, Section F                          (98,695)         (122,667)         (134,775)
    Deduction for reinvestment of prior year earnings in
          machinery and equipment under Costa Rica Income
          Tax Law Article 8, Section T for  Agricultural
          Companies                                                  (544,048)         (276,524)         (265,061)
    Non-deductible depreciation expense                               209,672           122,308           113,725

</TABLE>

                                      F-23
<PAGE>


<TABLE>
<CAPTION>

                                                                      1999              1998             1997
                                                                      ----              ----             ----
<S>                                                              <C>               <C>               <C>
    Deductible investments in tourism related
          companies                                                         -          (399,122)                -
    Depreciation revalued assets                                     (226,483)         (237,755)         (210,689)
    Amortization of cost in excess of net assets
          of acquired business                                        119,682            89,162                 -
    Utilization of loss carryforwards                              (1,198,698)                -                 -
    Non-deductible operating losses                                   614,233           134,317           240,490
    Other items                                                       (43,008)          148,375                 -
                                                                  -----------       -----------       -----------
                                                                      972,143           310,971           291,396
    Deferred tax benefit                                             (209,672)         (122,308)                -
                                                                  -----------       -----------       -----------
                                                                                                                -
                                                                    $ 762,472       $   188,663       $   291,396
                                                                  ===========       ===========       ===========
</TABLE>


      The tax effects of  temporary  differences  that give rise to  significant
portions of the deferred tax assets and  deferred tax  liabilities  at September
30, 1999 and 1998 are presented below:

<TABLE>
<CAPTION>

                                                                1999                  1998
                                                                ----                  ----
<S>                                                        <C>                   <C>
       Deferred tax assets:
       Allowance for doubtful accounts                      $   235,019           $   218,102
       Revaluation of property, plant and equipment
           depreciable for Costa Rican tax purposes           3,238,121             4,979,419
       Loss carry-forwards                                            -             1,266,058
       Vacation accrual                                         148,152                     -
       Provision for social benefits                                  -               109,411
                                                            -----------           -----------
       Total gross deferred tax assets                        3,621,292             6,572,990
       Less valuation allowance                              (3,621,292)           (6,572,990)
                                                            -----------           -----------
                                                            $         -           $         -
                                                            ===========           ===========
       Deferred tax liability:
       Excess fair market value over book value of
           assets acquired                                  $(1,764,735)          $(1,974,407)
                                                            ===========           ===========
</TABLE>


The Company has established a valuation  allowance equal to 100% of its deferred
tax asset for the current year and the prior years.  Under Costa Rica Income Tax
Law, the Company is subject to a 1% asset tax which may be credited  against the
regular income tax liability.  However, if the income tax is less than the asset
tax  liability  in the same tax year,  the asset tax must still be paid in full.
The deferred tax asset results primarily from the revaluation of property, plant
and equipment. The Company has historically reported a slightly higher asset tax
liability  compared to the income tax  liability.  In addition,  the Company has
significant  tax  incentives  available in Costa Rica,  which  potentially  will
reduce future  taxable  income  thereby  reducing the  potential  benefit of the
additional  depreciation  resulting from the tax asset  revaluation.  For fiscal
1999, the Company  applied loss  carry-forwards  in the amount of  approximately
$1.2 million as a credit to the income tax  determined  in As de Oros.  Based on
the above,  the  Company's  management  does not consider  that the deferred tax
asset will be  realized  in the  foreseeable  future and thereby not justify the
recognition of a deferred tax asset in the financial statements.



                                      F-24
<PAGE>



The recorded deferred tax benefit for the year ended September 30, 1999 consists
of  the  amortization  of  the  deferred  tax  liability  resulting  from  basis
differences  on  property,  plant and  equipment  resulting  from the As de Oros
acquisition.  The deferred  tax  liability  is being  amortized  over a ten-year
period,  which is  consistent  with the  amortization  period of the  underlying
property, plant and equipment.

United States of America taxes have not been provided on undistributed  earnings
of foreign  subsidiaries,  as such earnings are being retained  indefinitely  by
such subsidiaries for reinvestment.

In accordance  with Costa Rican income tax  regulations,  the  subsidiaries  are
required to file annual  income tax returns for the  twelve-month  period  ended
September 30 of each year.

According to Costa Rica's laws,  the income tax returns of Pipasa and As de Oros
for the years  ended  September  30,  1999,  1998,  1997 and  1996,  are open to
examination by the Costa Rican tax authorities.

14.  STOCK WARRANTS

On June 1, 1994,  Management of the Company approved the issuance of warrants to
purchase  66,666  shares  of  common  stock at  $2.25  per  share to an  outside
consultant  in exchange for  services to be rendered to the  Company.  The Stock
warrants  were  exercised by the outside  consultant in May, 1999.

15.  SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in the production and marketing of poultry products, animal
feed  and  quick  service  chicken  restaurants.   The  Company's   subsidiaries
distribute these products throughout Costa Rica and export mostly within Central
America and the Caribbean.  The basis for  determining  the Company's  operating
segments is the manner in which  financial  information is used by Management in
its  operations.  Management  operates and organizes  the financial  information
according to the types of products offered to its customers.

The  following  is a brief  description  of the main  business  segments  of the
Company:

BROILER  CHICKEN:  The Company's main brand names for broiler  chicken,  chicken
parts, mixed cuts and chicken breasts are Pipasa(TM) and As de Oros(TM). Broiler
chicken is a generic  product  that is directed to  customers  of all social and
economic levels. Chicken is sold to institutional clients,  schools,  hospitals,
restaurants and small grocery stores.

CHICKEN  BY-PRODUCTS:  Chicken  by-products include sausages,  bologna,  chicken
nuggets, chicken patties,  frankfurters,  salami and pate. The Company's chicken
by-products  are sold through the  Kimby(TM),  Chulitas(TM),  and As de Oros(TM)
brand names and are sold at all social and economic  levels.  These products are
sold mainly in supermarkets and sales are predominately driven by price.


                                      F-25
<PAGE>


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
and  domestic  pets.  The  Company's  animal feed  products are sold through the
Ascan(TM),  Aguilar y Solis(TM),  Kanin(TM),  Mimados(TM) and Nutribel(TM) brand
names.  Customers  for the  commercial  animal  feed  brands  are  mainly  large
wholesalers and high scale breeders.  Products marketed through the Mimados(TM),
Kanin(TM)  and Ascan(TM)  brand names are targeted  towards  veterinarians,  pet
stores and  supermarkets  and are sold  typically  to  consumers  with medium to
higher income levels.

RESTAURANTS:  Restaurantes As operates 33 restaurants located in rural and urban
areas through out Costa Rica.  Restaurantes  As are quick  service  restaurants,
which offer a diversified  menu of chicken meals.  Restaurantes As distinguishes
itself from other quick service chains by offering  dishes and using recipes and
ingredients which appeal to the taste of the Costa Ricans.

EXPORTS: Subsidiaries of the Company make exports of different products to other
countries in Central America and the Caribbean.  The Company  distributes mainly
the Pipasa(TM), Mimados(TM) and Kimby(TM) brand names.

OTHER:  This segment includes sales of commercial eggs,  non-recurrent  sales of
fertile eggs and raw material  sales among others.  For fiscal  periods 1998 and
1997,  other mainly  includes sales of baby chicks and animal feed to integrated
producers.

                                      F-26
<PAGE>


           BUSINESS SEGMENTS
           (In thousands)

<TABLE>
<CAPTION>

                                                             Income from            Depreciation
                                                             ------------           ------------
                                     Net Sales                operation               expense         Assets (2)
                                     ---------                 -------                -------         ----------

<S>                                  <C>                     <C>                    <C>               <C>
1999
    Broiler                           $ 72.13                     $ 9.98               $ 1.61         $27.35
    By Products                          9.66                       2.17                 0.04           0.88
    Animal Feed                         20.61                       0.31                 0.57          12.78
    Exports                              3.38                       0.32                    -           0.42
    Restaurants                          9.39                      (0.20)                0.26           3.00
    Other                                3.38                       0.25                    -           0.03
    Corporate (1)                           -                      (0.40)                0.72          25.86
                                     ---------                 ----------             -------         --------
        Total                         $118.55                     $12.43               $ 3.20         $70.32
                                     =========                 ==========             =======         ========
1998
   Broiler                            $ 60.06                     $ 4.25               $ 1.20         $25.66
   By Products                           9.40                       2.23                 0.04           0.09
   Animal Feed                          17.85                       0.70                 0.49          12.32
   Exports                               2.71                       0.39                 0.00           0.99
   Restaurants                           5.11                       0.14                 0.20           2.63
   Other                                 3.66                      (1.25)                0.00           0.00
   Corporate (1)                            -                      (0.30)                0.38          21.31
                                     ---------                 ----------             -------         --------
      Total                           $ 98.79                     $ 6.16               $ 2.31         $63.00
                                     =========                 ==========             =======         ========
1997
   Broiler                            $ 44.28                     $ 2.33               $ 1.14         $17.22
   By Products                           7.92                       1.24                 0.07           0.94
   Animal Feed                           6.95                       0.02                 0.05           2.29
   Exports                               2.33                       0.12                    -           0.48
   Restaurants                              -                          -                    -              -
   Other                                 3.18                       0.25                    -           0.00
   Corporate (1)                            -                          -                 0.14          15.62
                                     ---------                 ----------             -------         --------
      Total                           $ 64.66                     $ 3.96               $ 1.40         $36.55
                                     =========                 ==========             =======         ========
</TABLE>

(1) Corporate includes  amortization of cost in excess of net assets of acquired
    business.

(2) Assets for Corporate  items  include  long-term  investments,  cash and cash
    equivalents, other assets and other non allocated assets.

                                      F-27
<PAGE>

Geographic Information

The following represents net sales and long-lived assets by geographic location:

                           1999                 1998                  1997
                           ----                 ----                  ----
Net Sales:
  Costa Rica              $115.17             $100.97                $67.69
  Other                      3.38                2.70                  2.33
                          -------               -----                 -----
     Total                $118.55             $103.67                $70.02
                          =======              ======                 =====

Long-lived assets:
  Costa Rica               $31.64             $ 28.43                $14.35
  Other                      0.14                0.06                     -
                          -------               -----                 -----
      Total                $31.78             $ 28.49                $14.35
                          =======              ======                 =====


16.  PURCHASE TRANSACTIONS AND SUBSEQUENT EVENTS

On September  28, 1998,  the Company and Pipasa  entered into an agreement  (the
"Final Pipasa  Agreement")  providing  for the purchase of the remaining  common
stock of Pipasa from  Inversiones  La Ribera,  S.A. for 3,683,595  shares of the
Company's  common stock.  The Final Pipasa  Agreement was amended on November 9,
1998 to provide that the  transaction  would be subject to (i) the receipt of an
opinion from an independent  firm that the transaction was fair from a financial
point of view to the Company's stockholders and (ii) approval of the transaction
by holders of a majority  of the  issued  and  outstanding  common  stock of the
Company.

On September  28, 1998,  the Company and Angui,  entered into an agreement  (the
"Final Oros Agreement") to purchase Angui's remaining  interest in As de Oros in
exchange of  1,670,921  shares of the  Company's  common  stock.  Holders of the
majority of the Company's  common stock approved the transaction and the Company
expects to receive a fairness  opinion and to complete close the purchase of the
remaining stock of As de Oros on or before January 31, 1999.

On November  22, 1999 the Company  consummated  the  acquisition  of 100% of the
total  outstanding  common  stock of As de Oros  from  Angui  for the  43.62% or
654,300  shares of common stock of As de Oros in  accordance  with the terms and
conditions  in the Final Oros  Agreement.  The Company  has issued to Angui,  in
exchange for the Shares,  a total of 1,670,921 shares of Company's common stock.
With the  delivery  of the  Shares,  the Company  has  increased  the  ownership
interest in As de Oros to 100%  ownership,  in comparison  to a 56.38%  majority
interest reflected as of September 30, 1999.

On December 7, 1999,  Company  consummated  the acquisition of 100% of the total
outstanding  common stock of Pipasa from  Inversiones La Ribera by acquiring the
remaining  40.44% or 1,840,000  shares of common stock of Pipasa pursuant to the
Final Pipasa Agreement, in exchange for a total of 3,683,595 shares of Company's
common  stock.  With the transfer of the Shares,  the Company has  increased the
ownership  interest  in  Pipasa  to 100%,  in  comparison  to a 59.56%  majority
interest reflected as of September 30, 1999.


                                      F-28
<PAGE>

17.  CONCENTRATION OF RISK

Financial  instruments that potentially subject the Company to concentrations of
credit risk consist  primarily of cash equivalents,  short-term  investments and
trade  receivables.  The  Company  places its cash  equivalents  and  short-term
investments with high credit quality financial institutions.

The majority of the  Company's  customers  are located in Costa Rica.  No single
customer accounted for more than ten percent of the Company's net sales in 1999,
1998  and  1997,  and  no  account   receivable   from  any  customer   exceeded
approximately  $260,000.  Credit  risk is  mitigated  due to the  fact  that the
Company's  customer base is diverse and is located  throughout  Costa Rica.  The
Company  estimates  an  allowance  for  doubtful  accounts  based on the  credit
worthiness  of  its  customers,   as  well  as  general   economic   conditions.
Consequently,  an adverse  change in these  factors  could affect the  Company's
estimate of the bad debt allowance.

18.  COMMITMENTS AND CONTINGENCIES

     Vehicle self insurance

The Company does not have damage insurance or a specific self-insurance fund for
vehicles  that  are not  under  lease  agreements.  The  Company  has  liability
insurance  to cover  third  parties  through an  umbrella  policy  ranging  from
approximately  $38,000 to a maximum of $947,000.  While the  ultimate  amount of
claims incurred are dependent on future  developments,  in management's  opinion
insurance is adequate to cover any future claims.

      Severance Pay

Under Costa Rican laws,  companies  are  required to pay  employees  8.33% of an
employee's  yearly  gross  salary  as  severance,  upon  termination  of a labor
contract  without  just cause to a maximum  of eight  years of  employment.  The
Company  has a policy  to pay this  8.33%  regardless  of their  seniority.  The
Company annually pays the Employees' Association 5% of this 8.33%. Additionally,
the Company pays its  employees  1.33%  annually.  Employees  have the option to
deposit the remaining  3.33% into a pension fund. The Company has a provision to
settle severance pay when an employee leaves and believes it is reasonable based
on past  performance.  As of September 30, 1999, the Company has a provision for
severance pay in the amount of approximately $500,000.

     Construction Commitments

In the normal  course of  business,  the  Company  enters into  commitments  for
construction  or  renovations  of its  buildings,  plant  facilities  and leased
outlets.  As  of  September  30,  1999,  the  amounts  outstanding  under  these
construction commitments totaled approximately $38,000.



                                      F-29
<PAGE>



     Litigation, claims and assessments

The income  tax  returns  for  Pipasa  for the  fiscal  years 1995 and 1994 were
examined  by the tax  authorities  in Costa Rica and the  Company  was  assessed
$62,795 and $107,068 respectively,  as a result of the disallowance by the Costa
Rican tax  authorities of  approximately  26% in the aggregate of the deductions
taken by Pipasa for 1995 and 1994.  Management  believes these  assessments  are
without merit and intends to vigorously  contest these claims.  Management  does
not believe that the Company will incur a loss as a result of these assessments.
No accrual has been made for any losses that may result from the  resolution  of
this uncertainty.

The income tax returns of As de Oros for fiscal  year 1995 were  examined by the
Costa Rican tax authorities and As de Oros were assessed  $130,000 of additional
income taxes. Tax authorities have contested depreciation expense and income tax
withholdings of As de Oros' employees. As de Oros has appealed this decision and
does not expect that the final outcome will result in a material  adverse effect
on the operations or the financial position of the Company.  No accrual has been
made for any losses that may result from the resolutions of this uncertainty.

Pipasa is a defendant in a lawsuit  brought in Costa Rica in which,  as a result
of this lawsuit in which the  plaintiff  seeks $3.6  million,  Pipasa was served
with  prejudgment  liens for $1.5 million.  These liens were on some of Pipasa's
cash accounts and were  substituted by land owned by Pipasa with the approval of
a Costa Rican court.  Such approval was  subsequently  appealed by the plaintiff
and the Superior Court ratified such  substitution of collateral on November 11,
1999. The prejudgment liens have been released and Pipasa expects to receive all
of the funds originally  attached in January,  2000. For the same reasons and by
the same  plaintiff,  Pipasa was sued in the United  States of  America,  in the
State of  California  and the State of  Florida,  respectively.  The  California
lawsuit  has been  suspended  awaiting  the  ruling of the court of the State of
Florida on a lack of personal jurisdiction motion raised by Pipasa. While Pipasa
still has time to answer the  complaints,  it cannot  ascertain the basis of the
claim or the relief  sought,  but believes  the  lawsuits are without  merit and
intends to assert a vigorous defense.  At the present time,  neither the Company
nor Pipasa can evaluate the  potential  impact of this lawsuit on the  financial
results of the Company.

No  legal  proceedings  of a  material  nature, to  which  the  Company  or  the
Subsidiaries  are a party,  exist or were  pending  during the fiscal year ended
September  30, 1999.  The Company  knows of no 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  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.


                                      F-30
<PAGE>


                                INDEX TO EXHIBITS

Exhibit Number                 Description              Page or Cross Reference

Exhibit 27                     Financial Data Schedule           72







                                      -71-