<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-K

                       Annual Report pursuant to Section

                                  13 or 15(d)

                     of the Securities Exchange Act of 1934

                 For the fiscal year ended: September 30, 2000

            Transition Report pursuant to Section 13 of 15(d) of the
                        Securities Exchange Act of 1943

            For the Transition Period from __________ to ___________

                          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)                   (I.R.S. Employer File No.)

           8550 N.W. 17th Street, Suite 100
                  Miami, Florida                                 33126

      (Address of principal executive offices)                 (Zip code)


                         (305) 477-1408, (305) 477-1409

       (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, par value per share $.001

                                (Title of Class)


<PAGE>


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for,  such shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes  X    No
                                        ---      ---

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

Issuer's revenues for its most recent fiscal year $ 123,628,327

The  aggregate  market  value  of the  voting  stock of the  Registrant  held by
non-affiliates as of January 3, 2001 was approximately  $23,958,934.  A total of
4,457,476 shares were owned by non-affiliates as of December 29, 2000.

The number of shares  outstanding of the  Registrant's  common stock,  as of the
latest practicable date, January 3, 2001 was 12,854,321.

<PAGE>

                                RICA FOODS, INC.

                               TABLE OF CONTENTS




                                                                            Page
                                                                            ----
                                     PART I
                                     ------

Item 1.   Description of Business...........................................   1
Item 2.   Properties........................................................  12
Item 3.   Legal Proceedings.................................................  14
Item 4.   Submission of Matters to a Vote of Security Holders ..............  15

                                     PART II
                                     -------

Item 5.   Market for the Registrant's Common Stock and Related
            Stockholders Matters............................................  17
Item 6.   Selected Financial Data...........................................  19
Item 7.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations.............................  19
Item 7.A. Quantitative and Qualitative Disclosures about
            Market Risk.....................................................  29
Item 8.   Financial Statements and Supplementary Data.......................  30
Item 9.   Changes in or Disagreements with Accountants on
            Accounting and Financial Disclosures............................  30

                                    PART III
                                    --------

Item 10.  Directors and Executive Officers, Promoters and
            Control Persons.................................................  31
Item 11.  Executive Compensation............................................  35
Item 12.  Security Ownership of Certain Beneficial Owners and
            Management......................................................  36
Item 13.  Certain Relationships and Related Transactions....................  37

                                    PART IV
                                    -------

Item 14.  Exhibits, Financial Statements Schedules and Reports on
            Form 8-K........................................................  38


<PAGE>


PART I

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 shares of the Company's common stock to the shareholders of Pipasa. On
September 28,  1998,  the  Company  and  the  minority  shareholder  of  Pipasa,
Inversiones La Ribera, S.A. ("La 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 La Ribera in  exchange  for  3,683,595  shares of the  Company's  common
stock.  In  January  1999,  the  Company  received a  fairness  opinion  from an
independent consultant confirming that the transaction was fair from a financial
point of view to the Company's  shareholders.  On December 7, 1999,  the Company
consummated  the  acquisition  of the  40.44%  remaining  minority  interest  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 February 26, 1998,  the Company  consummated an agreement (the "Original Oros
Agreement") with Comercial  Angui,  S.A.,  ("Comercial  Angui") a corporation in
Costa Rica to purchase 56.38% of the outstanding  common stock of Corporacion As
de Oros, S.A. and subsidiaries  ("As de Oros"), a corporation in Costa Rica held
by Comercial  Angui,  for  consideration  consisting of a promissory note with a
stated amount of $2.4 million due in January,  2000,  and 815,686  shares of the
Company's common stock, having a then current market value of approximately $2.6
million.  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  shares of the  Company's  common
stock.  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.

<PAGE>

Acquisitions
------------

During October 1999,  Pipasa merged with Karpatos,  S.A.  ("Karpatos"),  a Costa
Rican  corporation,  which is in the business of converting  waste material from
chicken  farms into  fertilizers.  The  transaction  was accounted for under the
purchase  method of accounting.  The Company  recorded assets with a fair market
value of  approximately  $700,000  and  assumed  liabilities  for an  equivalent
amount. The Company did not issue any shares of Company stock or cash as part of
this transaction.

In October  2000,  the Company  entered  into a Stock  Purchase  Agreement  (the
"Indavinsa   Acquisition")   with  Industrias   Avicolas   Nicaraguenses,   S.A.
("Indavinsa"),  a Nicaraguan  company engaged in the production and distribution
of poultry and animal feed  concentrate  products.  According  to the  Indavinsa
Acquisition  agreement,  the Company  will  acquire 80%  interest  ownership  of
Indavinsa  for a total of 100,000  shares of common  shares and $300,000 in cash
payable at the closing of the  transaction.  The  Company  expects to close this
transaction during the second quarter of fiscal year 2001.

During  July 2000,  the Company  announced  its intent to acquire an interest in
Poultryfirst.com.  Poultryfirst.com  is a virtual  business-to-business  poultry
market  place which  provides  leading  business  tools and market  data,  using
formats of auctions for fresh products and catalogs for value-added products for
the sale  and  commercialization  of  poultry  and  poultry  by-products  on the
Internet.  Poultryfirst.com  is owned by Jose Pablo Chaves,  the Company's Chief
Operating  Officer  and a Director of the Company who is also the son of Calixto
Chaves,  a major  stockholder  and Chief Executive  Officer of the Company.  The
Company  is  currently  evaluating  the terms and  conditions  of any  potential
acquisition.

In December 2000,  the Company  announced its intent to acquire a majority stake
of the  outstanding  common  stock of Core Etuba,  SRL.,  a  Brazilian  company
engaged in the production and distribution of poultry products.  Final terms and
conditions of this acquisition are under negotiation.

Other Recent Events
-------------------

During  October  2000,  the Company  announced it had reached an agreement  with
Stock Management International, a British Virgin Islands corporation, to sell an
81% controlling interest in the subsidiaries of As de Oros, Planeta Dorado, S.A.
and  Corasa  Estudiantes,  S.A.  (the  "Restaurants"),  in  exchange  for a note
receivable.  Pursuant to the terms and conditions of the agreement,  the Company
will receive $4.05 million over a five year period, with an annual interest rate
of 10.06% payable every six months.  Stock Management  International will have a
grace period of one year and will subsequently make annual principal payments to
the Company  amounting to $1,012,500 each. As part of the agreement,  As de Oros
will continue to supply poultry  products to the  Restaurants for a period of 12
years. The Company is in the process of closing this transaction.

                                      -2-

<PAGE>

In October 2000, the Company purchased from Granja Zaragoza, S.A., a Costa Rican
company,  the brand name  "Zaragoza" for a total of $600,000 in a combination of
cash and extinguishment of debt. Granja Zaragoza, S.A. distributes processed and
packaged beef,  pork and poultry  products.  The purchase of the brand name will
grant the Company the right to produce and market  Zaragoza  products.  Prior to
the purchase,  the Company  manufactured the Zaragoza products in its facilities
and subsequently sold the products to Zaragoza for its  distribution.  According
to the terms of the agreement,  the $600,000  originating from the purchase will
be paid by crediting amounts due from Zaragoza in the amount of $200,000 and the
remaining  $400,000  will be paid to Zaragoza in monthly  payments  amounting to
$10,000  over a period of 40 months.  The Company  will  amortize  the  Zaragoza
trademark over a period of ten years.

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 share amounts have been restated to reflect the Split.

Financing
---------

In February 1998,  the Company  consummated  the  refinancing of a part of As de
Oros'  and  Pipasa's  (the  "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. With
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.

Public Offering of Preferred Shares
-----------------------------------

As de Oros was  authorized  by the  "Superintendencia  General de Valores" - the
official  market and  securities  regulator  in Costa Rica,  to offer  1,000,000
preferred  shares with a par value of $20 million  (the  "Preferred  Shares") in
Costa Rica  during  fiscal  year  2001.  The  Company  plans to invest the funds
received  from the sale of the Preferred  Shares issued in capital  expenditures
primarily  in the  production  area to enable  future  growth  in  international
markets.  The Company  cannot assure that all Preferred  Shares from this public
offering will be sold in the market,  and  therefore  will not depend upon funds
from this public offering to continue its normal operations.


                                      -3-
<PAGE>

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,  according to information provided by the Costa Rican
Chamber of Poultry  Producers,  "Camara  Nacional de  Avicultores de Costa Rica"
("CANAVI") 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 15 years of experience in exports.

As de Oros,  founded in 1954, is Costa Rica's second largest  poultry  producer,
comprising  approximately 20% according to information provided by CANAVI of the
country's  poultry  market and  according  to Company's  surveys,  is one of the
leaders  in  the  Costa  Rican  animal  feed  market  with  a  market  share  of
approximately  28%. As de Oros  subsidiaries'  also  operate a chain of 30 fried
chicken quick service  restaurants in Costa Rica called  "Restaurantes  As", and
"Don Amado".  During fiscal 2000, some of the Restaurantes As were remodeled and
changed their name to "Golden  Wings".  In October 2000,  the Company  agreed to
sell an 81% ownership  interest in its subsidiary  that owns the restaurants and
is in the process of closing this transaction.

The Company's  subsidiaries own a total of 69 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  2000,  the  Company  invested
approximately  $17 million in productive  assets in its  subsidiaries,  which is
expected to increase efficiency and output.

The  Company's  subsidiaries  do not depend on the sales of only one product but
rather a diversity of products available at a range of prices and presentations,
which represent an important strategic strength of the subsidiaries. The Company
produces and markets over 600 different products to meet consumer demands.


                                      -4-
<PAGE>


Segments
--------

Information  regarding the Company's segments for the last three fiscal years is
set  forth  in  the  Company's  Fiscal  2000  Audited  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,  according  to  information  provided  by the Junta de Fomento
Avicola,  a Costa Rican gubermental  institution.  The per capita consumption of
poultry in Costa Rica has increased from 20.25  kilograms (44.6 lbs.) in 1999 to
21.05 kilograms (46.4 lbs.) in 2000, a 4% increase during the 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.  Polls and consumer
information  gathered by the Company  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 is
one of the most  profitable  segments  of the  Company.  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.  During  October 2000, the Company  purchased the brand name  Zaragoza(TM)
from a company in Costa  Rica,  and will begin to produce  and  distribute  this
product under the Zaragoza brand name during the next fiscal year.

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 28% market
share.


                                      -5-
<PAGE>


QUICK   SERVICE:    Corporacion    Planeta   Dorado,   S.A.   and   Subsidiaries
("Restaurantes") operate 30 restaurants located in rural and urban areas through
out Costa Rica,  including  express delivery service in some  restaurants.  This
segment is comprised of quick  service  restaurants,  which offer a  diversified
menu of chicken  meals.  Restaurantes  distinguishes  itself  from  other  quick
service chains by offering dishes and using recipes and ingredients which appeal
to the taste of consumers in Costa Rica. The quick service  restaurant  business
is highly  competitive  in Costa Rica,  as several  other quick  service  chains
operate in Costa Rica.

In October  2000,  the  Company  agreed to sell an interest of 81% of the common
stock of Planeta  Dorado,  S.A.  The Company is in the  process of closing  this
transaction.

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

OTHER:  This segment includes sales of commercial eggs,  non-recurrent  sales of
fertile  eggs and sales of  recycling  material  and raw  material  sales  among
others. "Other" sales make up less than 3% of total sales for fiscal year 2000.

Distribution Network
--------------------

The Company has a distribution  fleet  consisting of  approximately  260 product
distribution  trucks  and  supervision  vehicles.  Poultry  delivery  trucks are
especially  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 used  independent  distributors  to deliver
larger quantities of animal feed to some of its customers during fiscal 2000.

The Company's  products are sold throughout Costa Rica,  through owned or leased
delivery  trucks,  urban  and  rural  retail  outlets  that may also be owned or
leased, supermarket chains and independent distributors. A majority of the total
distribution of the Company's  products is conducted through the Company's urban
retail  outlets  and  delivery  trucks,  with a smaller  portion  through  rural
outlets. The remaining distribution is serviced through the Company's processing
plants.  The retail  outlets,  mostly  located in urban areas,  are  exclusively
dedicated to the sale of the  Company's  products and most of these  outlets are
leased by the Company. In total, through its distribution fleet and outlets, the
Company sells to over 44,000 customers.


                                      -6-
<PAGE>


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 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.



                                      -7-
<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, 2000, 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.  Consumers in Costa Rica 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 market in Costa
Rica  is also  assisted  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 2000,  only 1,056  metric tons ("MT") of poultry  meat and 124 MT of
poultry  by-products  of whole  chicken  parts or  chicken  by  products  can be
imported to Costa Rica from  countries  outside of the Central  American  Common
Market. This quota is taxed at a rate of 34% and amounts in excess of this quota
are subject to a 158% tariff, except for whole chicken and breast cut, which are
subject to a 40% tariff and by products which is subject to a 19% 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 13.06%, which the Company has mitigated by
increasing  prices.  During the year ended September 30, 2000 the colon devalued
7.06% and the Company mitigated this devaluation by increasing prices on average
by 9.90% for its  chicken,  by-products  and animal feed  segments.  In terms of
consumer  reaction to price increases within the chicken broiler segment,  there
is little  differentiation  for customers  between one  competitor  and another.


                                      -8-
<PAGE>

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 14 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.  Other  marketing  techniques  used by the
Company, include packaging  presentations,  promotions and sponsoring of special
national events.

Research and Development
------------------------

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

Employees Compensation and Incentives
-------------------------------------

As of November 2000 the Company employed approximately 3,500 persons.

The Company believes it has good relations with its employees. Private companies
in Costa Rica  typically  support  their own  workers'  associations  instead of
organized unions which offer various benefits for the employees associated.  The
success of the  worker's  association,  Asociacion  Solidarista  de Empleados de
Pipasa,  As y Afines  ("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.

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`s policy is to increase the salaries of all employees every
six months to offset  the effect of  inflation.  Under the  existing  labor laws
prior to and for fiscal year 2000,  companies in Costa Rica are required to make
a payment equivalent to 8.33% of an employee's yearly gross salary for a maximum
of 8 years of employment,  as a severance pay to be paid upon the termination of
an employee  without just cause.  The Company offers its employees the option to
deposit 5% of this  required  severance  pay into  ASERICA.  The  employee  then
matches  the  5%  payment  by  the  Company.  ASERICA  invests  these  funds  in
certificates  of deposits which bear annual rates that range from 18% to 21% For


                                      -9-
<PAGE>



the remaining 3.33%, the Company offers the option to the employee to deposit it
into a pension  fund,  for which the  employee  must also  match any  percentage
deposited  into a pension  fund by the  Company.  In February of each year,  the
Company  makes a payment  equal to 1.33% of the  employee's  total  yearly gross
salary,  as part of this severance  payment.  Any remaining portion not invested
into a pension fund or paid to the employee  during  February must be settled by
the Company when the employee terminates employment. The Company has a provision
to settle severance pay when an employee  terminates  employment and believes it
is reasonable  based on past  experience.  As of September 30, 2000, the Company
has a provision for severance pay in the amount of approximately $260,000, which
is considered to be adequate.

Beginning in March 2001,  labor laws will require all companies in Costa Rica to
deposit 3% of the 8.33% into a pension fund. Of the remaining 5.33%, the Company
will continue to deposit 4% into ASERICA,  as part of a savings  program,  which
the employee  must match,  and will  continue to pay each February the remaining
1.33%.  The new labor law will not affect the results of operations or financial
position of the Company.

All employees in Costa Rica are protected by obligatory  insurance with the Caja
Costarricense  de Seguro Social  ("CCSS") and the Instituto  Nacional de Seguros
("INS")  which are the  government's  social  security and  insurance  programs,
respectively.  All companies in Costa Rica must pay the CCSS and the INS 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.


                                      -10-
<PAGE>


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, 2000, 6,400 shares have been issued under this plan.

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 24 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 179 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 2.052  kilograms
(approximately  4.5 lbs.).  During fiscal 2000,  integrated  producers  supplied
approximately  57% 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 or the integrated producers raise the
chickens, 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. At the processing plants, the where chickens are slaughtered
and the meat  packaged or processed to make chicken  by-products.  The Company's
processing  facilities  are  among the most  sophisticated  and  largest  in the
country.  The plants' processing  capacity is approximately 98 million kilograms
annually. Costa Rica has been declared free of Newcastle Disease, the Animal and
Plant Health  Inspection  Service  ("APHIS"),  and a U.S.  governmental  agency,
continues  to surveys the  Company's  facilities  to ensure  that the  Company's
facilities  remain 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.  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.


                                      -11-
<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.  The  Company  has strict  sanitary  processes  in order to
provide  consumers  with  product  integrity,  safety  and  quality  and  is  in
compliance with all health regulations.

Environmental Compliance
------------------------

The Company has been and is practicing  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 fiscal year ended  September
30, 2000,  the Company  invested  approximately  $1.65  million in improving its
waste treatment  facilities.  For the next fiscal period, the Company intends to
invest approximately $1 million in improving its sewage treatment in the further
processing plant.

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:

                                      -12-
<PAGE>

Production Area
---------------

The production area includes the following  divisions:  Animal Feed  Production,
Reproduction,  Incubation,  Growing Stage, Broiler, and By-products  processing.
The production capacities are described below:

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.

The Reproduction division facilities utilizes an average of 25 galleys annually,
which have a capacity to produce approximately 55 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  44  million  chicks  annually.

One day after  birth,  chicks are  transferred  to the Growing  Stage  division.
During this stage,  the chicks receive three types of diet,  according to growth
requirements.  The growth  stage  lasts  approximately  from 43 to 45 days.  The
Company owns 34 farms and 179 farms are under contract as integrated  producers.
The  facilities   production  capacity  is  approximately  43  million  chickens
annually,  which includes integrated producers.

The Broiler division is divided into slaughter and pluck, coolers and retailers,
packing and cuts and  sub-products  processes.  The facilities have a production
capacity of approximately 98 million kilograms annually, working two shifts.

The By-products processing division is divided into sausage, formed,  packaging,
oven  and  cooking  areas.   The  facilities  have  a  production   capacity  of
approximately 9 million kilograms annually.



                                      -13-
<PAGE>


Distribution
------------

Distribution is conducted  through retail outlets in Costa Rica, the majority of
which are leased.  Restaurantes  has a total of 30 restaurants,  the majority of
which are also leased.  During  October 2000,  the Company agreed to sell 81% of
the  restaurant  segment.  The  Company  is  in  the  process  of  closing  this
transaction.

Administrative Area
-------------------

Administrative  offices of the  Company are  located in Miami,  Florida.  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 of As de Oros for fiscal  year 1995 were  examined by the
Costa Rican tax authorities  and As de Oros was assessed  $130,000 of additional
income taxes.  Tax authorities have contested  depreciation  expenses 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,  cash flows 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 substituted by land
owned by Pipasa  with the  approval  of the  court in Costa  Rica  (Juzgado  6to
Civil).  Such  substitution  of  collateral  was  subsequently  ratified  by the
Superior Court on November 11, 1999. The prejudgment liens on assets and on cash
have been released and Pipasa received all of the funds originally attached. 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.
The Florida  lawsuit is still active and Pipasa's  defense is based on a lack of
personal  jurisdiction  in the State of  Florida.  Interrogatories,  Request  to
Produce Documents and Request of Admissions have been answered 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,  or assess the
likelihood of an unfavorable outcome.




                                      -14-
<PAGE>


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, 2000.  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 or her capacity.

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.

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 ended September 30, 2000:

Stockholders Meeting for the Fiscal Year ended September 30, 1999:

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
August 25, 2000, for the following purposes:

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

     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, 2000; and

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

                                      -15-
<PAGE>


The Shareholders Meeting voted for the proposals as follows:

     Proposal number 1:     For Director number 1:              11,020,591 votes
                            For Director number 2:              11,020,578 votes
                            For Director number 3:              11,020,591 votes
                            For Director number 4:              11,020,579 votes
                            For Director number 5:              11,020,578 votes
                            For Director number 6:              11,020,591 votes
                            For Director number 7:              11,020,591 votes
                            For Director number 8:              11,020,591 votes
                            For Director number 9:              11,020,591 votes

                            Against Director number 1:                   0 votes
                            Against Director number 2:                   0 votes
                            Against Director number 3:                   0 votes
                            Against Director number 4:                   0 votes
                            Against Director number 5:                   0 votes
                            Against Director number 6:                   0 votes
                            Against Director number 7:                   0 votes

                            Withhold Director number 1:                703 votes
                            Withhold Director number 2:                716 votes
                            Withhold Director number 3:                703 votes
                            Withhold Director number 4:                715 votes
                            Withhold Director number 5:                716 votes
                            Withhold Director number 6:                703 votes
                            Withhold Director number 7:                703 votes
                            Withhold Director number 8:                703 votes
                            Withhold Director number 9:                703 votes


     Proposal number 2:     FOR                                  1,021,090 votes
                            AGAINST                                      0 votes
                            ABSTAIN                                    204 votes


Relating to item number three, no other business was transacted.


                                      -16-
<PAGE>

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 that date traded on
the NASDAQ  National Market under the symbol RICA. The following table presented
below sets forth the market  price  range of the Common  Stock for each  quarter
during the years ended  September  30, 2000 and 1999,  based on the high and low
closing  sale prices as reported on the AMEX 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
                                            -----------------------------------
                                                     High            Low
Fiscal 2000
-----------
First Fiscal Quarter (10/1/99 to 12/31/99)         $12.000         $10.875
Second Fiscal Quarter (1/1/00 to 3/31/00)           25.500          12.250
Third Fiscal Quarter (4/1/00 to 6/30/00)            28.125          20.250
Fourth Fiscal Quarter (7/1/00 to 9/30/00)           23.938          11.625

Fiscal 1999
-----------
First Fiscal Quarter (10/1/98 to 12/31/98) (1)     $ 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
_________________

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

As of  January  3, 2001,  the  Company  had  12,854,321  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



                                      -17-
<PAGE>


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.

On December  23, 1999,  the Board of Directors of Pipasa  declared a dividend of
637,000 series "TCA" shares of preferred stock of Pipasa,  valued at $2,143,626,
to common  stockholders of record as of September 30, 1999.  Pipasa  distributed
379,398  shares to the  Company and 257,602 to  Inversiones  La Ribera,  S.A. in
accordance with the ownership of Pipasa's common stock as of September 30, 1999.
The dividends distributed  corresponded to earnings pertaining to the year ended
September 30, 1999.

Immediately after the issuance of the 637,000 shares of preferred stock,  Pipasa
repurchased  such  stock  for an amount  equal to the value of such  repurchased
stock,  $2,143,626,  from  the  stockholders.  The  stockholders  then  used the
proceeds of the  repurchase  to cancel  certain  outstanding  debts with Pipasa.
Accordingly,  outstanding debts from Inversiones La Ribera, S.A. and the Company
amounting to $1,276,743 and $866,882, respectively, were cancelled.

On December 23, 1999,  the Board of Directors of As de Oros  declared a dividend
of  590,000  series  "TCA"  shares of  preferred  stock of As de Oros  valued at
$1,983,327 to common stockholders of record as of September 30, 1999. As de Oros
distributed 332,642 shares to the Company and 257,358 shares to Comercial Angui,
S.A. in  accordance  with As de Oros'  ownership of common stock as of September
30, 1999. The dividends  distributed  corresponded to earnings pertaining to the
year ended September 30, 1999.

Immediately after the issuance of such preferred stock, As de Oros repurchased a
portion of the preferred stock issuance for an amount equal to the value of such
repurchased  stock,  $881,273 from the  stockholders.  The stockholders used the
proceeds of the purchase to cancel outstanding debts with As de Oros. As de Oros
cancelled  outstanding  debts from  Inversiones La Ribera,  S.A. and the Company
amounting to $537,896 and $343,377, respectively.

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.


                                      -18-
<PAGE>

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, 2000 and 1999 and for the fiscal  years of 2000,  1999 and
1998, respectively are derived from the Company's audited consolidated financial
statements  included  elsewhere in this Form 10-K.  The data as of September 30,
1998,  1997 and 1996 and for the fiscal years ended  September 30, 1997 and 1996
is derived from audited statements not included in this Form 10-K.

<TABLE>
<CAPTION>

                                                                   (In thousands, except share and per share data)

<S>                                                   <C>           <C>           <C>           <C>           <C>
                                                              2000          1999          1998          1997          1996
                                                              ----          ----          ----          ----          ----

Sales .........................................        $   123,628   $   118,550   $    98,794   $    64,658   $    56,819
Cost of sales .................................             83,757        77,275        71,464        47,847        40,730
Income from operations ........................              6,385        12,427         6,155         3,962         5,167
Income before income taxes and minority
    interest ..................................              3,725         8,174         3,641         2,382         3,016
Net income applicable to stockholders .........              2,889         3,041         1,130           754         1,650
Diluted earnings per common share .............               0.24          0.42          0.16          0.11          --
Pro forma earnings per common share ...........               --            --            --            --            0.28
Total assets ..................................             88,182        70,323        63,005        36,554        37,103
Long-term debt, net of current portion ........             21,821        21,444        22,559         5,252         3,593
Diluted weighted average number of common
    shares outstanding ........................         11,878,474     7,269,769     7,113,265     6,639,075          --
Pro forma weighted average number of common
    shares outstanding ........................               --            --            --            --       5,191,190
Ratio of earnings to fixed charges ............               1.80          1.87          1.46          1.37          1.61
Ratio of earnings to fixed charges and
    preferred dividends .......................               1.68          1.71          1.38          1.28          1.50

</TABLE>

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  statement
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.


                                      -19-
<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 "subsidiaries"). 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,  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 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 28% market  share.  As de Oros also owns a  subsidiary  which
operates a chain of 30 fried chicken quick service restaurants in Costa Rica. In
October  2000,  the As de Oros  agreed to sell 81%  controlling  interest of the
restaurant subsidiary.

The Company's  subsidiaries own a total of three modern processing plants, three
animal feed plants and 69 urban and rural retail outlets  throughout Costa Rica.
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  consumers in
Costa Rica 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  Costa  Rican  environmental  laws  and  regulations
relating to the discharge of material into the environment or otherwise relating
to the  protection  of the  environment  has not had a  material  effect  on the
Company's  financial  position and results of operations.  For fiscal year ended
September 30, 2000, the Company invested  approximately  $1.65 million.  For the
next fiscal period,  the Company intends to invest  approximately  $1 million in
improving its sewage treatment in the further processing plant.

                                      -20-
<PAGE>


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

As described in the Annual Report on Form 10-K for the year ended  September 30,
1999, the Company had developed plans to address the possible  exposures related
to the impact on its computer  systems of the Year 2000. Since entering the Year
2000, the Company has not experienced any major  disruptions to its business nor
is it aware of any  significant  Year 2000  related  disruptions  impacting  its
customers or suppliers. Furthermore, the Company did not experience any material
impact on  inventories  as of September  30, 2000.  The Company will continue to
monitor  its  critical  systems  over  the  next  several  months  but  does not
anticipate any  significant  impact due to Year 2000 exposures from its internal
systems as well as from the  activities of its suppliers  and  customers.  Costs
incurred to achieve  Year 2000  readiness,  which  include  contractor  costs to
modify existing systems and costs of internal  resources  dedicated to achieving
Year 2000 compliance,  were charged to expense as incurred.  The Company has not
experienced any material change in total costs related to Year 2000  remediation
efforts since entering the Year 2000.

Fiscal 2000 Compared to Fiscal 1999
-----------------------------------

The Company's net income applicable to common stockholders was $2.89 million and
$3.04 million for fiscal years ended September 30, 2000 and 1999,  respectively.
Diluted  earnings  per share was $0.24 for fiscal  year 2000,  compared to $0.42
during  fiscal year 1999.  The  decrease in the  diluted  earnings  per share is
mainly due to the November  and  December  1999,  acquisition  of the  remaining
minority  interests of Pipasa and As de Oros through an issuance of an aggregate
of  5,354,516 of the  Company's  common  shares and a decrease in the  Company's
income for fiscal 2000.

The Company uses segment profit margin to analyze segment performance,  which is
defined as the percentage over sales of the gross profit less selling  expenses.
The  following  table  presents  sales and  profitability  per segment,  for the
periods under analysis (in millions of dollars):

<TABLE>
<CAPTION>

<S>                     <C>          <C>          <C>         <C>          <C>         <C>          <C>          <C>
                                                                                                        Segment profit
                                          Sales                                Segment profit               margin
                                          -----                                --------------           --------------
Segments                    2000        1999       Change      % Change        2000       1999        2000         1999
--------                    ----        ----       ------      --------        ----       ----        ----         ----

Broiler                    $73.48       $72.13      $1.35         1.9%       $15.03     $ 17.22       20.5%        23.9%
Animal Feed                 22.42        20.61       1.81         8.8%         2.45        3.02       11.0%        14.7%
By-products                 11.69         9.66       2.03        21.1%         2.70        2.21       23.1%        22.9%
Quick Service                8.03         9.39      (1.36)      -14.5%         0.33        0.50        4.1%         5.3%
Exports                      4.56         3.38       1.18        35.0%         0.02        0.45        0.4%        13.3%
Others                       3.45         3.38       0.07         2.1%         0.39        0.84       11.3%        24.9%
                         --------     --------      -----       -----       -------     -------      -----        -----
Total                    $ 123.63     $ 118.55      $5.08         4.3%      $ 20.92     $ 24.24       17.0%        20.5%
                         ========     ========      =====       =====       =======     =======      =====        =====

</TABLE>


                                      -21-
<PAGE>

BROILER:  Sales of broiler  chicken  increased by 1.9% for fiscal the year ended
September 30, 2000, compared to fiscal 1999. This increase is primarily due to a
1.2%  increase in tonnage and an increase in average  sales  prices  offset by a
stronger market competition in this segment and a decrease in the consumption of
chicken  by the  general  consumer  whose  income has been  affected  by adverse
economic  factors in Costa Rica. In addition,  during  fiscal 2000,  the Company
temporarily  reduced  sales  prices for some brands in order to increase  sales.
Segment  profit margin  decreased by 3.4% mainly due to increases in the cost of
raw material,  broad fluctuations in the sales mix less profitable  products and
increases in plant maintenance costs.

ANIMAL FEED: Sales for commercial  animal feed for fiscal year 2000 increased by
8.8% when compared to fiscal year 1999. This increase is due to a 23.0% increase
in tonnage as a result of new  distribution  outlets,  new clients and increased
sales of pet food products, offset by the Company's policy not to increase sales
prices for some  products in this  segment,  due to strong  market  competition.
Segment  profit  margin  decreased  by 3.7%  mainly due to these  factors and to
increases in the cost of raw materials.

BY-PRODUCTS:  Total sales for this  segment for fiscal 2000  increased by 21.1%,
when  compared  to fiscal  1999,  mainly  due to an 18.4%  increase  in  tonnage
resulting  from an increase in average sales prices and  increased  sales due to
the introduction of new distribution routes.  Segment profit margin did not have
significant variations.

QUICK SERVICE: Sales for the Quick Service segment decreased by 14.5% for fiscal
2000,  when  compared  to fiscal  1999.  The  decrease in sales is the result of
strong market competition in this segment together with the temporary closing of
some  restaurants  due  to  remodeling.  Segment  profit  margin  did  not  have
significant variations.

During  October 2000,  the Company  reached an agreement  with Stock  Management
Corporation  to sell 81% of the stock of the  restaurant  subsidiary  for a note
receivable  amounting to $4.05  million.  This amount will be received  over a 5
year period,  and the Company will charge a 10.06% annual  interest rate payable
every six months. Stock Management International will have a grace period of one
year and  will  subsequently  make  annual  principal  payments  to the  Company
amounting  to  $1,012,500  each.  The Company is in the process of closing  this
transaction.

EXPORTS: The Company's sales for this segment for fiscal 2000 increased by 35.0%
when  compared to fiscal 1999.  The increase is primarily  due to an increase in
sales by Pipasa's  subsidiary  in Honduras  and an overall  increase in pet food
products,   broiler  chicken  and  recycling  material.  Segment  profit  margin
decreased by 13%,  mainly due to variations in the sales mix to less  profitable
products.  For the next fiscal period,  the Company expects to increase sales of
concentrate feed, resulting from the investment made in the concentrate plants.


                                      -22-
<PAGE>

OTHERS:  Sales of Other for fiscal  2000  increased  by 2.1%  compared to fiscal
1999. This increase is mainly due to the sale of recyclable material,  which the
Company began to market during this fiscal year.  The low  profitability  of the
recyclable  material  resulted in a decrease in this segment's  profit margin of
13.6%.  Sales of other  products  represented  2.8% and 2.9% of total  sales for
fiscal years 2000 and 1999, respectively.

OPERATING EXPENSES

Operating  expenses for fiscal 2000  increased by 16.1% when  compared to fiscal
1999. The increase is primarily  attributable to payroll expenses to prepare the
executive  organizational  structure  of the Company  for further  international
expansion,  in addition to a general  increase in employee payroll in accordance
with the Company's policy to make two annual salary  increases.  There were also
increases  in  vehicle  fleet  leasing  costs,  as a result  of  leasing  of new
vehicles,  and in the  amortization  of cost in  excess of net  assets  acquired
(goodwill)  and  excess  of fair  value  over book  value of assets of  acquired
businesses  allocated  to  property,  plant  and  equipment,  as a result of the
purchase of the remaining minority interest of As de Oros. Also, the Company has
incurred in  additional  expenses  related to  research  in other  international
markets aimed at future growth of the Company's  operations in other  countries.
As a percentage  of sales,  operating  expenses  represented  27.1% and 24.3% of
sales for fiscal 2000 and 1999, respectively.

OTHER EXPENSES (INCOME):

Other  expenses  (income) for fiscal 2000  decreased by 38.9%,  when compared to
fiscal  1999.  The  decrease is mainly due to an  increase  in  interest  income
resulting from increases in notes receivable,  dividends received from long term
investments  in stocks,  and gains from sales of vehicles,  properties and other
assets.  As a percentage of sales,  other expenses  represented 2.1% and 3.6% of
sales for fiscal 2000 and 1999, respectively.



                                      -23-
<PAGE>


PROVISION FOR INCOME TAXES:

Provision for income taxes for fiscal 2000 decreased by 89.5%,  primarily due to
a decrease in taxable income and an increase in  amortization of deferred income
tax,  resulting from the acquisition of the remaining minority interest in As de
Oros.

FISCAL 1999 COMPARED TO FISCAL 1998

The Company's net income applicable to common stockholders was $3.04 million and
$1.13 million for fiscal years ended September 30, 1999 and 1998,  respectively.
Diluted  earnings  per share were $0.42 for fiscal year 1999,  compared to $0.16
for fiscal year 1998.

The following table shows sales and profitability  per segment,  for the periods
under analysis (in millions of dollars):

<TABLE>
<CAPTION>

<S>                     <C>          <C>          <C>         <C>          <C>         <C>          <C>          <C>
                                                                                                        Segment profit
                                      Net Sales                                Segment profit               margin
                                      ---------                                --------------           --------------
Segments                    1999        1998       Change      % Change        1999       1998        1999         1998
--------                    ----        ----       ------      --------        ----       ----        ----         ----

Broiler                    $73.48       $72.13      $1.35         1.9%       $15.03     $ 17.22       20.5%        23.9%


Broiler                    $72.13       $60.06     $ 12.07       20.1%      $ 17.22       $8.70       23.9%        14.5%
Animal Feed                 20.61        17.85        2.76       15.5%         3.02        2.80       14.7%        15.7%
By-products                  9.66         9.40        0.26        2.8%         2.21        2.31       22.9%        24.6%
Quick Service                9.39         5.11        4.28       83.8%         0.50        0.34        5.3%         6.7%
Exports                      3.38         2.71        0.67       24.7%         0.45        0.51       13.3%        18.9%
Others                       3.38         3.66       (0.28)      -7.7%         0.84        0.49       24.9%        13.4%
                         --------     --------      -----       -----       -------     -------      -----        -----
Total                    $ 118.55       $98.79     $ 19.76       20.0%      $ 24.24     $ 15.15       20.5%        15.4%
                         ========     ========      =====       =====       =======     =======      =====        =====

</TABLE>


Prior and subsequent to the acquisition of As de Oros in March 1998,  there were
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 year 1998, have been restated to reflect the
change  in the  method of  accounting  for sales  and  purchases  to  integrated
producers.  Integrated producers are local farmers 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 for fiscal 1998.


                                      -24-
<PAGE>



BROILER:  Sales of broiler  chicken  increased  by 20.1% for  fiscal  year ended
September 30, 1999, compared to fiscal 1998. This increase is primarily due to a
19.5% increase 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. Segment profit
margin increased by 9.4% mainly due to lower costs of raw materials.

ANIMAL FEED:  Sales of animal feed for fiscal year 1999  increased by 15.5% when
compared  to fiscal  year 1998.  This  increase  is due to a 33.3%  increase  in
tonnage 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 the sales mix of different types of products of which units and
sales prices have increased.  Segment profit margin decreased by 1.0% mainly due
to  increases  in  selling  expenses  and  variations  in sales  mix,  offset by
decreases in raw material.

BY-PRODUCTS:  Sales of  by-products  increased  by 2.8% for  fiscal  1999,  when
compared to fiscal 1998,  which is mainly due to an increase in tonnage of 18.1%
offset by variations  in sales mix to lower priced  products.  During 1999,  the
Company  lowered the sales  prices for certain  key  products to maintain  sales
volume due to strong market  competition.  Segment  profit  margin  decreased by
1.7%, which is mainly due to an increase in sales prices,  offset by lower costs
of raw materials.

QUICK  SERVICE:  This  segment  increased  sales  by  83.8%,  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.  Segment
profit margin decreased by 1.4% due to higher operating costs.

EXPORTS:  Sales for this segment for fiscal 1999 increased by 24.78%, mainly due
to a 12.4%  increase  in  tonnage,  in addition to an increase in sales of Other
Products.  During 1998,  the Company  began to export pet food 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  priced  products 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.  Segment profit margin decreased by 5.5%
mainly due to sales mix changes to lower profit margin products.



                                      -25-
<PAGE>


OTHERS:  Sales of Other Products,  which include  commercial eggs, raw materials
and baby  chicks,  decreased  by 7.7%.  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.  Segment
profit margin increased by 11. 5% mainly due to lower costs of raw materials.

OPERATING EXPENSES

Operating expenses increased from $21.17 million to $28.85 million,  an increase
of $7.67 million or 36.28% 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.

OTHER EXPENSES (INCOME):

Other  expenses  (income)  increased from $2.51 million for fiscal 1999 to $4.25
million for fiscal 2000,  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.

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.

PROVISION FOR INCOME TAXES

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.

LIQUIDITY AND CAPITAL RESOURCES

OPERATING ACTIVITIES:  As of September 30, 2000, the Company had $4.3 million in
cash and cash  equivalents.  The working  capital deficit was $8.2 million as of
September 30, 2000,  compared to a positive  working  capital of $6.2 million at
the end of fiscal year 1999.  The Company plans to  restructure  its  short-term
debt to long-term debt to address the deficit.  This decrease in working capital
is primarily  due to an increase in  short-term  liabilities,  which include the
reclassification to current liabilities of the first amortization of the private
placement debt for a total of $4 million.  The current ratios were 0.79 and 1.25
as of September 30, 2000 and 1999, respectively.


                                      -26-
<PAGE>



Cash  provided by operating  activities  was $9.7 million and $14.0  million for
fiscal years 2000 and 1999, respectively.  The decrease in fiscal 2000 is mainly
due to a lower income before minority income,  and increases in commercial notes
and accounts receivable.  Notes and accounts receivable increased as a result of
new  clients  added and  important  payments  made in  advance to  suppliers  of
materials used for capital  expenditures.  The Company entered into an agreement
to supply a customer in Honduras with broiler  chicken  during the first quarter
of  fiscal  2001,  with  broiler  chicken  for a total  value  of  approximately
$630,000.

INVESTING  ACTIVITIES:  Funds used for investing  activities during fiscal 2000,
totaled $17.4  million,  compared to $8.9 million  invested  during fiscal 1999.
Investing cash flows reflect capital  expenditures,  which are primarily related
to purchases and  improvements  in  production  equipment  and  facilities.  The
Company is investing in the  expansion of the  by-products  processing  plant to
increase  production  and also in the  animal  feed  plants  to  lower  costs of
production and to increase  production  for internal  consumption as a result of
increased projected sales. The expansion of the animal feed plants will position
the Company as a leader in "pellet" animal feed  production in Central  America.
In addition,  the Company is remodeling  the waste and recycling  facilities and
has also installed a communication  network between  different  locations of the
Company's  facilities,  has acquired an enterprise  resource planning system and
has  remodeled  some  restaurants.  The Company  anticipates  that it will spend
approximately $6 million during the next fiscal period for capital  expenditures
mostly related to the production area, and expects to finance such  expenditures
primarily with long-term  financing or through the issuance of a public offering
of preferred shares by As de Oros in Costa Rica.

FINANCING ACTIVITIES:  As of September 30, 2000, the Company had lines of credit
agreements with banks and raw material  suppliers for a maximum aggregate amount
of $27 million, of which $16.7 million had been used.  Agreements may be renewed
annually  and bear  interest  at annual  rates  ranging  from  8.00% to  11.75%.
Property and other collateral secure those agreements.

During fiscal 2000, net cash provided by financing  activities was $7.2 million,
compared to $5.2  million  used in  financing  activities  during  fiscal  1999.
Long-term debt funds were used mainly to finance  capital  expenditures  and for
debt restructuring  from short-term to long-term in the Company's  subsidiaries.
Cash  provided  by  short-term  debt  was  primarily  used as a  bridge  loan to
temporarily  finance  capital  expenditures.  The  Company is in the  process of
completing long-term loans to restructure the short-term debt.

As de Oros was  authorized  for the next  fiscal  year by the  "Superintendencia
General de Valores" - the  official  market and  securities  regulator  in Costa
Rica, to offer 1,000,000  preferred  shares with a par value of $20 million (the
"Preferred  Shares")  in Costa Rica during  fiscal  year 2001.  This $20 million
offering will pay a 9.5% annual dividend payable every three months. The Company
plans to invest the funds received from the sale of Preferred Shares issued,  in
capital expenditures primarily in the production area to enable future growth in
international  markets. The Company cannot assure that all Preferred Shares from
this public  offering will be sold in the market,  and therefore will not depend
upon funds from this public offering to continue its normal operations.

Management  expects to continue 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 rest of the 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


                                      -27-
<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.

                                      -28-
<PAGE>

ITEM 7A.     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  profit  margin.  The  Company  purchased
approximately  $l.3 million of corn monthly  through the Chicago  Board of Trade
("CBOT") during fiscal 2000. 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.

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 a Hedging  Committee,
which consists of members of the Company's  Management and 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 8.12% above its budgeted prices for the
year ended September 30, 2000.

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  average  monthly  soybean meal purchase was  approximately  $1.08
million for fiscal 2000.  The hedging  strategies for soybean meal purchases are
identical  to that of corn  purchases,  except  that the Company  purchases  its
soybean  meal  through a company in Costa  Rica,  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. The prices paid by the Company for
soybean meal were 2.21% below budgeted  prices for the year ended  September 30,
2000.



                                      -29-
<PAGE>



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  most  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, 2000, 1999 and 1998, the
national  devaluation  rates were  7.06%,  10.81% and 10.6%,  respectively,  and
correspondingly,  the Company  increased  its prices  9.90%,  11.19% and 13.03%,
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, 2000, exports increased 34.8%,  compared
to exports for the same period in 1998 and represented 4% of total sales.

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  Report  included  on page F-2 and from the  consolidated
financial  statements and  supplementary  data on pages F-3 through F-33 on this
Form 10-K.

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

Not applicable

                                      -30-
<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, 2000, are as follows:

NAME                                  AGE            POSITION HELD

Calixto Chaves                         54            Chairman, Chief Executive
                                                     Officer,President and
                                                     Director

Jose Pablo Chaves                      28            Director, Chief
                                                     Operating Officer

Dr. Federico Vargas                    67            Director,Chairman Audit
                                                     Committee since fiscal
                                                     1999.

Jorge M. Quesada                       51            Treasurer and Director
                                                     Member Audit Commmitte

Luis J. Lauredo                        51            Director (until 1/7/00)
                                                     Chairman Audit
                                                     Committee (Until 1/7/00)

Alfred E. Smith, IV                    49            Director

Monica Chaves                          29            Secretary, Director

The Honorable Ambassador
   Luis Guinot, Jr.                    65            Director

Randall Piedra                         34            Chief Financial Officer

Mauricio Marenco                       36            Chief Investor Officer
                                                     and Assistant Secretary

Trond S. Jensen                        47            Director (since 9/1/00)

Jack Peeples                           70            Director (since 9/1/00)


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, Chief 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.


                                      -31-
<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 Ministry of Industry, Energy and
Mines of Costa Rica and became  Minister of Natural  Resources  of Costa Rica in
1986.  From 1982 to 1986,  Mr.  Chaves was a member of the Board of Directors of
MINASA,  a mining  company in Costa  Rica.  Mr.  Chaves  was the  founder of the
Chamber of  Industries  in the  province of Heredia in Costa Rica.  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  Assembly of Costa  Rica.  From
1993  to  1994,  he was  Chairman  of the  Legislative  Section  of the  Partido
Liberacion  Nacional of 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 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,
and is presently its Executive  President.  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.

                                      -32-
<PAGE>


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,  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 of the Export-Import Bank of the United States of America. He has
represented the President of the United States as special U.S. Ambassador to the
inaugurations of the Presidents of Colombia,  Venezuela, Brazil, and Costa Rica.
He also served as a founding Director of the Hispanic Council on Foreign Affairs
(Washington,  D.C.). Mr. Lauredo  received his B.A. from Columbia  University in
New York City and has attended the  University of Madrid in Spain and Georgetown
University  Law Center in  Washington,  D.C. Mr.  Lauredo was  appointed  United
States Ambassador to the Organization of American States,  and resigned from the
Board of  Directors  of the  Company on  January  7th , 2000 as a result of this
significant appointment.

ALFRED E. SMITH,  IV. Mr. Smith has been a director of the Company since June 1,
1994.  Mr. Smith has been 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 has also been 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.


                                      -33-
<PAGE>


HONORABLE  AMBASSADOR MR. LUIS GUINOT,  JR. Ambassador Luis Guinot, Jr. 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 an 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  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,
North American Foreign Trade Agreement  ("NAFTA") and General Agreement on Trade
and Tariffs ("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. Mr. Guinot is currently  practicing law in the Washington,  D.C. office
of Shapiro, Sher & Guinot, P.A. of Baltimore, Maryland.

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., of which the Company
agreed to sell 81% of its shares on October  2000,  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.

TROND SIGURD JENSEN.  Mr. Jensen was born in Oslo,  Norway. Mr. Jensen graduated
from Handels Gymnas in 1973 and in 1983 he received a Bachelor of Arts Degree in
Economics  from the  University  of  California,  San  Diego.  In  1984,  he was
transferred to New York City to manage Banco  Consolidado  New York.  During his
two years in New York City, he  successfully  expanded the bank's  operation and
improved  financial  results while developing  operations in Venezuela.  He also
worked at Latino  Financial  Group,  headquartered  in Venezuela,  to build up a
commodity trading company where he combined his financial and banking experience
with his roots in business and trade.  Mr. Jensen created and headed the Latimar
Trading Company and opened Latimar offices in Miami, Caracas,  Curacao and Oslo.
In 1989,  Mr. Jensen  became an equity  partner in Latimer  Trading  Company and
continued  building  the  venture  until  selling  his  position in 1992 when he
decided to assume the  ownership  and  management  of Sigurd  Jensen a/s,  Oslo,
Norway.  Simultaneously,  he established an affiliated company,  Sigurd Jensen &
Co., based in Miami, Florida. Since 1992, Mr. Jensen has successfully developed,
expanded and diversified the family enterprise first established in 1903. Today,
through strategic  alliances and  affiliations,  Sigurd Jenesen is involved in a
wide range of activities  including cargo and vessel chartering,  the export and
marketing of food  commodities from South America to the Far East and the United
States,  privatization  projects in Central and South America and investments in
food and  maritime-transportation  projects. During his fourteen years in Miami,
Mr. Jensen has been active in numerous  community  organizations,  including the
Beacon  Council,  the Dade County  Committee  for World Trade and the  Homestead
Diversification Project. He is also a director of the Norwegian American Chamber
of Commerce and a member of various corporate boards and civic committees.


                                      -34-
<PAGE>


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

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

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
to the best of its knowledge 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.

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:

                                                      Salary         Other
         Name and Main Position             Years  Compensation  Compensation(1)
         ----------------------             -----  ------------  ---------------

Calixto Chaves - Chief Executive Officer    2000     $136,764       $5,633
Calixto Chaves - Chief Executive Officer    1999     $128,262       $1,953
Calixto Chaves - Chief Executive Officer    1998     $126,780       $1,993

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.

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


                                      -35-
<PAGE>


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. The Company's subsidiaries,  Pipasa and As de Oros have implemented such a
plan that includes all of its employees, management and officers.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the latest practicable date,  December 15,
2000,  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.

<TABLE>
<CAPTION>

<S>                                                <C>                        <C>

                                                     Amount and Nature
Name and Address of Beneficial Owner(1)                of Beneficial           Percentage of Shares
                                                     Ownership (2) (3)               Owned (2)
---------------------------------------------------------------------------------------------------
Calixto Chaves                                        5,548,433 (5)(4)               44.44%
Comercial Angui, S.A.                                 2,318,130 (6)                  19.46%
c/o Bufete Chaverri, Soto & Asociados
      Barrio Escalante de Cine Magaly,
      400 Metros Este
      San Jose, Costa Rica
Jorge M. Quesada                                         45,795 (7)                    *
Monica Chaves                                           133,334 (8)                    *
Luis Guinot, Jr.                                              -                        *
Luis J. Lauredo                                               -                        *
Federico Vargas                                               -                        *
Alfred E. Smith IV                                       33,334                        *
Jose Pablo Chaves                                       279,324 (9)                    *
Jose A. Zamora                                           47,295(10)

</TABLE>

_________________________

* Indicates less than 1% of outstanding shares owned.

(1)  Unless  otherwise  indicated,  the address of each beneficial owner is Rica
     Foods, Inc., 8550 N.W., 17th Street, Suite 100, Miami, Florida 33126.
(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.


                                      -36-
<PAGE>



(4)  Includes  861,315  shares of Common  Stock  owned of record by  Atisbos  de
     Belen, S.A., a corporation in Costa Rica wholly-owned by Mr. Chaves and his
     wife, 704,857 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 company  in Costa  Rica
     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 by Inversiones la Ribera
     S.A., a corporation in Costa Rica owned by Mr. Chaves and his wife.
(6)  Includes  1,670,921  shares of Common Stock  acquired by  Comercial  Angui,
     S.A., a corporation in Costa Rica owned by Mr. Echeverria and his wife.
(7)  Includes  45,795 shares owned by Jorque,  S.A., a  closely-held  company in
     Costa Rica whose principal  shareholders are the wife and sons of Mr. Jorge
     Quesada.
(8)  Owned of record by  Moninternacional,  S.A.,  a  corporation  in Costa Rica
     owned by Monica Chaves.  Mr. Chaves  disclaims any beneficial  ownership of
     these shares.
(9)  Owned of record by Rtrosptva, S.A. a corporation in Costa Rica wholly owned
     Jose Pablo Chaves.  Mr. Chaves disclaims any beneficial  ownership of these
     shares.
(10) Owned of record by  Inversiones  Zamora y Aguilar  S.A., a  corporation  in
     Costa Rica wholly owned by Jose A. Zamora and wife.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Balances and transactions with related parties consist of the following:

                                                   2000            1999
                                                   ----            ----
     Due from stockholders                      $4,900,499      $  644,988
     Due from related parties                       39,618       2,954,579
     Due to stockholders (short-term)               76,657          75,108
     Due to stockholders (long-term)                16,409          16,715

Balances due from  stockholders  for fiscal years 2000 and 1999  originate  from
loans which bear  interest at market rates which range from 10.5% to 12% in U.S.
dollars and 16% in Colones,  made  primarily to the  Company's  Chief  Executive
Officer,  other  stockholders and to Inversiones La Ribera, a company 100% owned
by the Company's Chief Executive Officer. Interest income for fiscal years ended
September 30, 2000,  1999 and 1998  amounted to $$405,040,  $87,535 and $53,200,
respectively.

Current and long-term  balances due to  stockholders  in 2000 and 1999 originate
from  notes  payable  to  the  Company's  Chief  Executive   Officer  and  other
stockholders.

During  fiscal  2000 and 1999,  the Board of  Directors  of  Pipasa  declared  a
dividend  to  common  stockholders  for a total of  637,000  and  510,565  "TCA"
preferred shares of Pipasa,  valued at $2,143,626 and $1,929,766,  respectively.
In accordance with the Company's ownership, Inversiones La Ribera, S.A. received
257,602  shares  during  fiscal year 2000 and 206,472  shares during fiscal year
1999,  valued at $866,882  and  $780,397,  respectively.  Immediately  after the
issuance of such preferred stock,  Inversiones La Ribera, S.A. used of the total
proceeds of the purchase to cancel outstanding debts with Pipasa, during each of
fiscal 2000 and 1999.  The  dividends  distributed  during fiscal years 2000 and
1999,  correspond  to  earnings  pertaining  to  fiscal  periods  1999 and 1998,
respectively.


                                      -37-
<PAGE>



During fiscal 2000,  the Board of Directors of As de Oros declared a dividend of
590,000  series  "TCA"  shares  of  preferred  stock  of As de  Oros  valued  at
$1,983,327 to common stockholders of record as of September 30, 1999. As de Oros
distributed 332,642 shares to the Company and 257,358 shares to Comercial Angui,
S.A. in accordance with the Company's common stock ownership as of September 30,
1999.  The dividends  distributed  correspond  to earnings  pertaining to fiscal
period 1999.

PART IV
-------

ITEM 14.     EXHIBITS, FINANCIAL SATEMENTS 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 beginning on page F-1.

     (1)  See Page No. F-1.

     (2)  Schedules,  other than 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

<TABLE>
<CAPTION>

    <S>             <C>                              <C>

     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.

     (3)   3.1       Articles of Incorporation
           3.2       By-Laws

     (10)            Material contracts

     (21)            Subsidiaries of the Registrant



                                      -38-
<PAGE>


     (27)            Financial Data Schedule   See page 72

</TABLE>

     (b)  Reports  on form 8-K.  During the first  quarter of fiscal  year ended
September  30, 2000,  the Company  filed two reports on Form 8-K on November 29,
1999 and December 16, 1999, two reports on Form 8K/A on February 2, and February
10, 2000,  pertaining to the acquisitions  referenced  above.  These reports and
exhibits thereto 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                                  By:
     -------------------------            --------------------------------------
                                          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                                  By:
     -------------------------            --------------------------------------
                                          Randall Piedra
                                          Chief Financial Officer



Dated                                  By:
     -------------------------            --------------------------------------
                                          Monica Chaves
                                          Secretary



                                      -40-
<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, 2000 and 1999, and
the  related  consolidated  statements  of  income,   stockholders'  equity  and
comprehensive  income (loss),  and cash flows for each of the three years in the
period ended September 30, 2000. 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of RICA FOODS, INC. and
subsidiaries  as of  September  30,  2000 and  1999,  and the  results  of their
operations  and their cash flows for each of the three years in the period ended
September 30, 2000 in conformity with accounting  principles  generally accepted
in the United States.

ARTHUR ANDERSEN LLP



   Miami, Florida,
   December 22, 2000.




                                      F-2
<PAGE>


                       RICA FOODS, INC. AND SUBSIDIARIES
                          Consolidated Balance Sheets
                          September 30, 2000 and 1999

<TABLE>
<CAPTION>

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

                     Assets                                                         2000              1999
                                                                                    ----              ----
    Current assets:
        Cash and cash equivalents                                              $  4,256,636      $  3,913,168
        Short-term investments                                                       86,557            32,747
        Notes and accounts receivable, net                                       11,187,031         9,603,282
        Due from related parties                                                     39,618         2,954,579
        Inventories, net                                                         14,307,768        13,896,517
        Prepaid expenses                                                            557,519           366,221
                                                                               ------------      ------------
                  Total current assets                                           30,435,129        30,766,514

    Property, plant and equipment, net                                           45,425,881        31,923,486
    Long-term receivables-trade                                                     640,222           114,346
    Long-term investments                                                         3,965,385         4,260,663
    Other assets, net                                                             4,010,364         1,875,888
    Cost in excess of net assets of acquired business, net                        3,705,392         1,382,226
                                                                               ------------      ------------
                  Total assets                                                 $ 88,182,373      $ 70,323,123
                                                                               ============      ============

                Liabilities and Stockholders' Equity

    Current liabilities:
        Accounts payable                                                       $ 16,161,076      $ 12,084,992
        Accrued expenses                                                          3,862,659         3,604,397
        Notes payable                                                            12,878,147         7,582,890
        Current portion of long-term debt                                         5,680,190         1,182,184
        Due to stockholders                                                          76,657            75,108
                                                                               ------------      ------------
                  Total current liabilities                                      38,658,729        24,529,571

    Long-term debt,  net of current portion                                      21,820,905        21,443,589
    Due to stockholders                                                              16,409            16,715
    Deferred income tax liability                                                 2,899,511         1,764,735
                                                                               ------------      ------------
                  Total liabilities                                              63,395,554        47,754,610
                                                                               ------------      ------------

    Minority interest in Subsidiary                                               1,336,445         9,468,206
                                                                               ------------      ------------
    Commitments and Contingencies (Note 19)

    Stockholders' equity:
        Common stock                                                                 12,855             7,486
        Preferred stock                                                           2,216,072         2,216,072
        Additional paid-in capital                                               25,760,950        12,137,326
        Accumulated other comprehensive loss                                    (8,758,737)       (6,828,500)
        Retained earnings                                                         9,388,127         6,481,305
                                                                               ------------      ------------
                                                                                 28,619,267        14,013,689
        Less:
        Due from stockholders                                                   (4,900,499)         (644,988)
        Treasury stock, at cost                                                   (268,394)         (268,394)
                                                                               ------------      ------------
                   Total  stockholders' equity                                   23,450,374        13,100,307
                                                                               ------------      ------------

                  Total liabilities and stockholders' equity                   $ 88,182,373      $ 70,323,123
                                                                               ============      ============
</TABLE>

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




                                      F-3
<PAGE>


                       RICA FOODS, INC. AND SUBSIDIARIES
                       Consolidated Statements of Income
                 Years ended September 30, 2000, 1999 and 1998
<TABLE>
<CAPTION>

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

                                                                                 2000               1999               1998
                                                                                 ----               ----               ----

       Net sales                                                            $ 123,628,327      $ 118,549,625       $ 98,793,976
       Cost of sales                                                           83,756,904         77,274,794         71,464,203
                                                                            -------------      -------------       ------------
                 Gross profit                                                  39,871,423         41,274,831         27,329,773
                                                                            -------------      -------------       ------------
       Operating expenses:
           General and administrative                                          13,577,143         11,412,996          8,694,664
           Selling                                                             18,955,061         17,035,717         12,182,757
           Amortization  of cost in  excess of net
              assets of acquired business                                         953,828             398,941           297,206
                                                                            -------------      -------------       ------------
                 Total operating expenses                                      33,486,032         28,847,654         21,174,627
                                                                            -------------      -------------       ------------

                 Income from operations                                         6,385,391         12,427,177          6,155,146
                                                                            -------------      -------------       ------------
       Other expenses (income):
           Interest expense, net of interest capitalized                        3,548,935          3,484,314          3,108,182
           Interest income                                                    (1,660,747)          (677,155)          (614,211)
           Foreign exchange losses, net                                         1,562,549          1,806,311          1,412,971
           Miscellaneous, net                                                   (790,039)          (360,341)        (1,392,732)
                                                                            -------------      -------------       ------------
                Other expenses, net                                             2,660,698          4,253,129          2,514,210
                                                                            -------------      -------------       ------------
                Income before income taxes and minority interest                3,724,693          8,174,048          3,640,936
       Provision for income taxes                                                  80,223            762,472            188,663
                                                                            -------------      -------------       ------------
                Income before minority interest                                3,644,470          7,411,576          3,452,273
       Minority interest                                                        (572,631)        (4,133,011)        (2,094,962)
                                                                            -------------      -------------       ------------
                Net income                                                      3,071,839          3,278,565          1,357,311
       Preferred stock dividends                                                  182,892            237,910            227,357
                                                                            -------------      -------------       ------------
       Net income applicable to common stockholders                         $   2,888,947      $   3,040,655       $  1,129,954
                                                                            =============      =============       ============
       Earnings per share:
             Basic earnings per share                                       $        0.24      $        0.43       $       0.16
                                                                            =============      =============       ============
             Diluted earnings per share                                     $        0.24      $        0.42       $       0.16
                                                                            =============      =============       ============
       Weighted average number of common shares outstanding:
           Basic                                                               11,874,190          7,122,170          7,078,949
                                                                            =============      =============       ============
           Diluted                                                             11,878,474          7,269,769          7,113,265
                                                                            =============      =============       ============
</TABLE>


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




                                      F-4
<PAGE>


                       RICA FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
                 Years ended September 30, 2000, 1999 and 1998


(chart is to be read over the next four pages)

<TABLE>
<CAPTION>

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

                          Common Stock              Treasury Stock
                           ------------              --------------           Preferred
                         Shares      Amount      Shares         Amount          Stock
                         ------      ------      ------         ------        ---------
 Balance,
  September 30,
  1997                 6,603,132     $ 6,603     188,329     $ (847,967)     $ 2,216,072
Acquisition of
 56.38% of As de
 Oros                    815,686         816           -              -                -
Cash dividends
 on preferred
 stock
 of Pipasa                     -           -           -              -                -
Repurchase of
 common stock                  -           -     276,710     (1,245,197)               -
Stock swapped
 for Pipasa's
 "TCA" preferred
 stock                         -           -    (146,077)       657,344                -
Pipasa's preferred
 "TCA" stock issued
 as dividend to
 common
 stockholders                 -           -           -              -        1,103,666
Repurchase of
 Pipasa's
 preferred
 "TCA" stock                                                                 (1,103,666)
Net income                    -           -           -              -                -
Translation
 adjustment                   -           -           -              -                -
Decrease in Due
 from
 Stockholders                 -           -           -              -                -
Total
 comprehensive
 income                       -           -           -              -                -
                      ---------     -------     -------    -----------      -----------
Balance
 September 30,
 1998                 7,418,818       7,419     318,962     (1,435,820)       2,216,072

Pipasa's "TCA"
 preferred
 stock issued as
 dividend to
 common
 stockholders                 -           -           -              -          826,100
Pipasa's treasury
 Preferred "TCA"
 stock issues as
 dividends of
 common stock                 -           -           -              -        1,103,666
Repurchase of
 Pipasa's "TCA"
 preferred shares             -           -           -              -       (1,929,766)
Cash dividends
 on preferred
 stock of Pipasa              -           -           -              -                -
Repurchase of
 common stock                 -           -       5,500        (77,771)               -
Adjustment to
 outstanding
 common stock,
 result of reverse
 stock split                321           -           -              -                -

</TABLE>

                          F-5A (continued on next page)


<PAGE>

<TABLE>
<CAPTION>

(Chart continued from above)



<S>                 <C>             <C>              <C>              <C>             <C>
                       RICA FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
                 Years ended September 30, 2000, 1999 and 1998


                                                       Accumulated                                       Comprehensive
                     Additional                           Other                            Total             Income
                      Paid-In          Due from       Comprehensive    Retained        Stockholders         For the
                      Capital        Stockholders          Loss        Earnings           Equity             Period
                     ----------      ------------     -------------    --------        ------------      -------------
Balance,
 September 30,
 1997                $ 9,388,209     $  (920,476)     $(4,675,549)     $ 2,122,542     $ 7,289,434                  -
Acquisition of
 56.38% of As de
 Oros                  2,599,184               -                -                -       2,600,000                  -
Cash dividends
 on preferred
 stock
 of Pipasa                     -               -                -         (135,413)       (135,413)                 -
Repurchase of
 common stock                  -               -                -                -      (1,245,197)                 -
Stock swapped
 for Pipasa's
 "TCA" preferred
 stock                         -               -                -                -         657,344                  -
Pipasa's preferred
 "TCA" stock issued
 as dividend to
 common
stockholders                   -               -                -                -       1,103,666                 -
Repurchase of
 Pipasa's
 preferred
 "TCA" stock                                                                            (1,103,666)                -
Net income                                                               1,357,311       1,357,311         1,357,111
Translation
 adjustment                                              (954,486)               -        (954,486)         (954,486)
Decrease in Due
 from
 Stockholders                  -         750,063                -                -         750,063                 -
Total
 comprehensive
 income                        -               -                -                -               -           402,625
                     -----------     -----------      -----------      -----------     -----------       -----------
Balance,
 September 30,
 1998                 11,987,393        (170,413)      (5,630,035)       3,344,440      10,319,056                 -
Pipasa's "TCA"
 preferred
 stock issued as
 dividend to
 common
 stockholders                                                                              826,100
Pipasa's treasury
 Preferred "TCA"
 stock issues as
 dividends of
 common stock                                                                            1,103,666
Repurchase of
 Pipasa's "TCA"
 preferred shares              -               -                -                -      (1,929,766)
Cash dividends
 on preferred
 stock of Pipasa               -               -                -         (141,700)       (141,700)                -
Repurchase of
 common stock                  -               -                -                -         (77,771)                -
Adjustment to
 outstanding
 common stock,
 result of reverse
 stock split                   -               -                -                -               -                 -

</TABLE>

                         F-5B (continued on next page)

<PAGE>



                       RICA FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
                 Years ended September 30, 2000, 1999 and 1998

                                                            (Continued)

<TABLE>
<CAPTION>

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

                          Common Stock              Treasury Stock
                           ------------              --------------           Preferred
                         Shares      Amount      Shares         Amount          Stock
                         ------      ------      ------         ------        ---------
Warrants
 exercised                66,666          67           -              -                -
Issued treasury
 stock                                          (276,710)     1,245,197                -
Net income                     -           -           -              -                -
Translation
 adjustment                    -           -           -              -                -
Increase in Due
 from
 Stockholders                  -           -           -              -                -
Total
 comprehensive
 income                        -           -           -              -                -
                      ----------     -------     -------    -----------      -----------
Balance
 September 30,
 1999                  7,485,805       7,486      47,752       (268,394)       2,216,072
Cash dividends on
 preferred shares              -           -           -              -                -
Acquisition of
 40.44% interest
 in Pipasa and
 43.62% interest
 in As de Oros         5,354,516       5,355           -              -                -
Shares granted to
 employees                 7,600           8           -              -                -
Exercise of
 employees' stock
 options                   6,400           6           -              -                -
Net income                     -           -           -              -                -
Translation
 adjustment                    -           -           -              -                -
Increase in Due
 from
 Stockholders                  -           -           -              -                -
Total
 comprehensive
 income                        -           -           -              -                -
                      ----------     -------     -------    -----------      -----------
Balance
 September 30,
 2000                 12,854,321     $12,855      47,752    $  (268,394)     $ 2,216,072
                      ==========     =======     =======    ===========      ===========



</TABLE>

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

                          F-5C (continued on next page)

<PAGE>

<TABLE>
<CAPTION>
                        RICA FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
                  Years ended September 30, 2000, 1999 and 1998

                                   (Continued)


<S>                 <C>             <C>              <C>              <C>             <C>
                                                        Comprehensive Income
                                                               (Loss)
                                                      -------------------------
                                                       Accumulated                                       Comprehensive
                     Additional                           Other                            Total             Income
                      Paid-In          Due from       Comprehensive    Retained        Stockholders         For the
                      Capital        Stockholders          Loss        Earnings           Equity             Period
                     ----------      ------------     -------------    --------        ------------      -------------
Warrants
 exercised               149,933               -                -                -         150,000                  -
Issued treasury
 stock                                                                                   1,245,197                  -
Net income                     -               -                -        3,278,565       3,278,565          3,278,565
Translation
 adjustment                    -               -       (1,198,465)               -      (1,198,465)        (1,198,465)
Increase in Due
 from
Stockholders                            (474,575)               -                -        (474,575)
Total
 comprehensive
 income                        -               -                -                -               -          2,080,100
                     -----------     -----------      -----------      -----------     -----------        -----------
Balance
 September 30,
 1999                 12,137,326        (644,988)      (6,828,500)       6,481,305      13,100,307                  -
Cash dividends on
 preferred shares                                                         (165,017)       (165,017)                 -
Acquisition of
 40.44% interest
 in Pipasa and
 43.62% interest
 in As de Oros        13,463,640               -                -                -      13,468,995                  -
Shares granted to
 employees                 86,856              -                -                -          86,864                  -
Exercise of
 employees' stock
 options                  73,128               -                -                           73,134                  -
Net income                                                               3,071,839       3,071,839          3,071,839
Translation
 adjustment                    -               -       (1,930,237)               -      (1,930,237)        (1,930,237)
Increase in Due
 from
 Stockholders                  -       (4,255,511)              -                -      (4,255,511)                  -
Total
 comprehensive
 income                        -               -                -                -               -          1,141,602
                     -----------     -----------      -----------      -----------     -----------        -----------
Balance
 September 30,
 2000                $25,760,950     $(4,900,499)     $(8,758,737)     $ 9,388,127     $23,450,374                  -
                     ===========     ===========      ===========      ===========     ===========        ===========
</TABLE>

                                      F-5D

<PAGE>


                       RICA FOODS, INC. AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows
                 Years ended September 30, 2000, 1999 and 1998

<TABLE>
<CAPTION>

<S>                                                                         <C>                  <C>                  <C>
                                                                                2000                 1999                 1998
                                                                                ----                 ----                 ----
Cash flows from operating activities:
     Net income                                                             $ 3,071,839          $ 3,278,565          $ 1,357,311
                                                                            -----------          -----------          -----------
     Adjustments to reconcile net income to
         net cash provided by operating activities:
              Depreciation and amortization                                   4,038,238            3,394,588            2,435,836
              Production poultry                                              2,331,767            1,697,887            1,340,431
              Provision for inventory obsolescence                               33,004               28,740               29,435
              Amortization  of cost in excess  of net  assets
                  of acquired business                                          953,828              398,941              297,206
              Stock options and grants issued to employees                      121,598                    -                    -
              Gain on sales of productive assets                              (509,272)            (214,867)              (3,732)
              Deferred income tax benefit                                     (323,798)            (209,671)            (122,308)
              Provision for doubtful receivables                                352,058              746,599              301,432
              Minority interest in Subsidiary                                   572,631            4,133,011            2,094,962
     Changes in operating assets and liabilities:
              Notes and accounts receivable                                 (1,994,653)          (1,651,518)              952,598
              Inventories                                                   (2,708,186)          (2,674,111)          (1,891,920)
              Prepaid expenses                                                (191,298)             (25,998)              967,717
              Long-term receivables-trade                                     (449,519)              (6,109)               56,116
              Accounts payable                                                4,162,139            4,548,021          (1,920,001)
              Accrued expenses                                                  258,264              568,444              379,910
                                                                            -----------          -----------          -----------
                  Net cash provided by operating
                      activities                                              9,718,640           14,012,522            6,274,993
                                                                            -----------          -----------          -----------

Cash flows from investing activities:
      (Purchases) Sales of short-term investments                               (53,809)              69,145            1,833,749
      Initial cash balance from subsidiary acquired                                  -                     -            1,147,472
      Purchase of property, plant and equipment                             (17,253,793)          (9,419,401)          (5,313,919)
      Purchase of long-term investments                                               -                     -          (2,135,614)
      Proceeds from sales of productive  assets and long-term
         investments                                                          1,850,024               708,629             348,818
      Increase in other assets                                               (1,944,492)             (229,060)           (723,579)
                                                                            -----------          ------------         -----------
                  Net cash used in investing activities                     (17,402,070)           (8,870,687)         (4,843,073)
                                                                            -----------          ------------         -----------

</TABLE>

                                                        (Continued on next page)



                                      F-6
<PAGE>



                        RICA FOODS, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                  Years ended September 30, 2000, 1999 and 1998

                                                    (Continued)

<TABLE>
<CAPTION>

<S>                                                                        <C>                  <C>                 <C>
                                                                                2000                 1999                 1998
                                                                                ----                 ----                 ----

Cash flows from financing activities:
     Increase (decrease) in notes payable                                    4,832,597              (883,332)           2,510,177
     Preferred stock cash dividends                                           (271,296)             (339,570)            (288,219)
Long-term financing:
     Payments                                                               (1,355,247)           (2,249,772)          (2,753,919)
     New loans                                                               6,769,264               445,095            2,344,966
Treasury stock acquired                                                              -               (77,771)                   -
Collections from related parties                                                     -                     -              322,239
Advances to stockholders and related party                                  (2,737,373)           (2,276,236)          (2,414,934)
Proceeds from exercise of warrants                                                   -               150,000                    -
Proceeds from exercise of stock options                                         38,400                     -                    -
                                                                           -----------           -----------          -----------
                  Net cash provided by (used in) financing
                      activities                                             7,276,345            (5,231,586)            (279,690)
                                                                           -----------           -----------          -----------
Effect of exchange rate changes on cash
     and cash equivalents                                                       750,553              712,162             750,237
                                                                            -----------          -----------         -----------
                  Increase in cash and cash equivalents                         343,468              622,411           1,902,467
Cash and cash equivalents at beginning of year                                3,913,168            3,290,757           1,388,290
                                                                            -----------          -----------         -----------
Cash and cash equivalents at end of year                                    $ 4,256,636          $ 3,913,168         $ 3,290,757
                                                                            ===========          ===========         ===========

Supplemental disclosures of cash flow information:
     Cash paid during year for:
       Interest                                                             $ 3,859,677          $ 2,611,202         $ 2,482,826
                                                                            ===========          ===========         ===========
       Income taxes                                                         $   517,903          $   281,191         $   117,935
                                                                            ===========          ===========         ===========

      Supplemental schedule of non-cash investing and
        financing activities
       Acquisition of treasury stock through
          financial agreement                                               $         -          $         -         $ 1,245,197
                                                                            ===========          ===========         ===========
       Issuance of treasury stock through financial agreement               $         -          $ 1,245,197         $         -
                                                                            ===========          ===========         ===========
       Common stock dividends paid as preferred shares:
           From Pipasa                                                      $ 2,143,626          $ 1,929,766         $ 1,103,666
                                                                            ===========          ===========         ===========
           From As de Oros                                                  $ 1,983,327          $         -         $         -
                                                                            ===========          ===========         ===========
       Pipasa's  preferred stock  repurchased in exchange for
            outstanding receivables                                         $ 2,143,626          $ 1,929,766         $ 1,103,666
                                                                            ===========          ===========         ===========
       As de Oros'  preferred  stock  repurchased in exchange
            for outstanding receivables                                     $ 1,983,327          $         -         $         -
                                                                            ===========          ===========         ===========
       Acquisition of As de Oros:
           Fair value of assets acquired                                    $ 4,600,000          $         -         $ 7,709,050
                                                                            ===========          ===========         ===========
           Common stock issued                                              $ 7,880,000          $         -         $ 2,600,000
                                                                            ===========          ===========         ===========
           Loan assumed                                                     $         -          $         -         $ 2,400,000
                                                                            ===========          ===========         ===========
</TABLE>

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


                                      F-7
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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. The Company's  operations are largely conducted through its
100% owned subsidiaries,  Corporacion  Pipasa, S.A. and Subsidiaries  ("Pipasa")
and Corporacion As de Oros, S.A. and Subsidiaries ("As de Oros").  The Company's
subsidiaries'  primary  business  is  derived  from the  production  and sale of
broiler chickens,  processed chicken by-products,  commercial eggs, and premixed
feed  and  concentrate  for  livestock  and  domestic  animals.   The  Company's
subsidiaries own 58 urban and rural outlets  throughout Costa Rica, three modern
processing  plants  and  three  animal  feed  plants.  As de Oros  also owns and
operates  a  chain  of  36  quick  service  restaurants  in  Costa  Rica  called
"Restaurantes As de Oros." Pipasa exports its products to El Salvador, Honduras,
Nicaragua, and Colombia.

The Company  acquired a 59.56%  ownership  interest in Pipasa on August 5, 1996,
and 56.38% of As de Oros on February 26, 1998. On November 22, 1999 and December
7, 1999, the Company acquired the remaining 43.62% and 40.44% minority  interest
of As de  Oros  and  Pipasa,  respectively,  in  exchange  for the  issuance  of
1,670,921 and 3,683,595  restricted  shares of common stock of the Company.  The
Company  designated  November 30, 1999 as the date of acquisition for accounting
purposes  and as such,  has  consolidated  100% of earnings of the  Subsidiaries
beginning on December 1, 1999.  The  acquisition  of Pipasa was accounted for at
the value of the minority interest as of the acquisition date, on the basis that
the owner of the  minority  interest  of Pipasa  is a major  stockholder  of the
Company.  The  acquisition  of As de Oros was  accounted  for under the purchase
method of accounting.

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 references herein to Fiscal Years 2000, 1999 or 1998 encompass the
years ending September 30, 2000, 1999 and 1998, respectively.



                                      F-8
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)



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

The  consolidated  financial  statements  have been prepared in accordance  with
generally  accepted  accounting  principles  ("GAAP")  in the  United  States of
America  ("U.S."  or  "U.S.A.").   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 the U.S.A. in  consolidation  for financial  statement
presentation purposes.

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

The consolidated  financial  statements include the accounts of Rica Foods, Inc.
and its  subsidiaries,  Pipasa and As de Oros.  The minority  interests  held by
third  parties in Pipasa and As de Oros are stated  separately.  As of September
30,  2000,  minority  interest is composed  of  preferred  shares of As de Oros.
Minority  interest's  share of  earnings  include  dividends  paid to  preferred
shareholders  of As de Oros.  Prior to the  acquisition  of the 40.44%  minority
interest  in Pipasa and  43.62% in As de Oros,  minority  interest  share of net
income was based on their ownership  percentage  during the respective  periods.
All significant  intercompany  balances and transactions have been eliminated in
consolidation.

The  September  30, 1996  acquisition  of Pipasa was  accounted for 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, 2000
and 1999  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.

     Reclassifications
     -----------------

Certain prior period  balances have been  reclassified  to conform to the fiscal
year 2000 presentation.

                                      F-9

<PAGE>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)

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

The  preparation of financial  statements in conformity  with GAAP in the U.S.A.
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 the  ultimate  collection  of
customer  receivables.  Actual  results in subsequent  periods could differ from
estimates.

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

Most of the Company's  transactions take place in Costa Rica and are denominated
in local  currency,  the colon (cent sign).  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, 2000, 1999 and 1998, commercial
exchange rates were (cent  sign)313.35  (cent  sign)292.69 and (cent sign)264.07
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  sign) 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



                                      F-10
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


Rican colones have been translated at the commercial exchange rates in effect on
the balance sheet dates, stockholders' equity have been translated at historical
exchange rates and income and expenses have been translated at average  exchange
rates in effect  during  the fiscal  years.  Foreign  currency  gains and losses
resulting  from  transactions  denominated  in  foreign  currencies,   including
intercompany  gains and losses  resulting  from  transactions,  are  included in
results of operations. The related translation adjustments for each fiscal year,
along with the cumulative amounts as of the balance sheets, are reflected in the
accumulated  other  comprehensive  income  (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.

     Futures Contracts
     -----------------

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, 2000, the Company has futures contracts in place
to hedge  purchases  of  commodities  for  $1.87  million  with a fair  value of
approximately the same amount.



                                      F-11

<PAGE>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


     Inventories
     -----------

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
consisting  primarily of animal feed,  labor costs and cost of imported  chicks,
are capitalized and are  subsequently  amortized over the expected  reproductive
life of the hens which is of approximately 16 months.

     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 the
following 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. Net capitalized  leasehold rights amounted to $680,000 as
of September 30, 2000.

Applicable  interest  charges incurred during the construction of new facilities
are  capitalized  as one of the elements of its cost and are amortized  over the
assets' estimated useful lives. Interest capitalized during fiscal year 2000 was
$680,488.

     Impairment Charges
     ------------------

The  Company  assesses  long-lived  assets for  impairment  whenever  events and
circumstances  indicate  that  the  carrying  value  of  an  asset  may  not  be
recoverable from the estimated future cash flows expected to result from its use
and eventual disposition.  The Company has not recognized an impairment loss for
the years ended September 30, 2000, 1999 or 1998.

     Software Development Costs
     --------------------------

The Company  capitalizes  costs associated with software  developed for internal
use.  Capitalized costs include direct costs of materials,  services consumed in
developing the software,  payroll and payroll-related costs for employee who are
directly  associated  with  and who  devote  time to the  internal-use  software
project,   and  interest   costs   incurred   while   developing  the  software.
Capitalization of such costs ceases when the project is substantially  completed
and ready for its intended use. The carrying  value of software and  development
costs included in other assets in the  consolidated  balance sheets amounting to
$1,527,872  and  $338,641  at  September  30,  2000 and 1999,  respectively,  is
regularly  reviewed by the Company to determine if an impairment  loss should be
recognized.



                                      F-12

<PAGE>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


Capitalized   internal  software  development  costs  are  amortized  using  the
straight-line  method  over a period  of five  years,  which  totaled  $175,957,
$196,942  and $122,761 for the years ended  September  30, 2000,  1999 and 1998,
respectively.

     Comprehensive Income (Loss)
     ---------------------------

The  Company  reports  comprehensive  income  (loss)  in  accordance  with  FASB
Statement No. 130 "Reporting Comprehensive Income" which requires the disclosure
of comprehensive income, which includes, the disclosure of comprehensive income,
which  includes,  in addition to net income,  unrealized  gains and losses which
bypass  the  traditional  income  statement  and are  recorded  directly  into a
separate section of shareholders'  equity on the balance sheet. The component of
other  comprehensive  income (loss) for the Company consist of unrealized losses
relating to the translation of foreign currency financial statements.

     Loan Costs Deferral
     -------------------

The  Company  is  deferring  certain  commitment  fees  and  other  direct  loan
origination  costs.  These charges are being amortized over the contractual life
of the related loan.

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

Advertising  costs are  expensed  as  incurred.  Advertising  costs  amounted to
$829,811, $1,356,226 and $815,699 for the fiscal years ended September 30, 2000,
1999 and 1998,  respectively.  Advertising  expenses  are  included  in  selling
expenses in the accompanying consolidated statements of income.

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

The Company files a tax return for its operations in the United States, which do
not include operations of any of its subsidiaries.  The Company's  subsidiaries,
As de Oros and Pipasa, file a tax return in Costa Rica. The Company accounts for
income  taxes  in  accordance  with the  Financial  Accounting  Standards  Board
("FASB")  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>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


     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. The consolidated  statement of income for
the fiscal year ended  September  30, 1998 has 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, increasing the gross profit margin from 26.36% to
27.66%.  There was no effect on the net income for the years ended September 30,
1999 and 1998. Sales and cost of sales from integrated producers was included in
the "Others" segment for fiscal year ended September 30, 1998.

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

Accounting for Derivative Instruments and for Hedging Activities:

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging  Activities" ("SFAS No. 133") 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.  Application  of this
statement  is  deffered  by SFAS No. 137 for one year from June 15, 1999 to June
15, 2000.  The Company  adopted SFAS No. 137 on October 1, 2000 and its adoption
is not expected to have a material  effect on the  financial  statements  of the
Company.

Revenue Recognition

On December 3, 1999, the staff of the SEC published  Staff  Accounting  Bulletin
101, "Revenue  Recognition," ("SAB 101") to provide guidance on the recognition,
presentation and disclosure of revenue in financial  statements.  Specific items
discussed  in SAB 101  include  bill-and-hold  transactions,  long-term  service
transactions,  refundable  membership fees,  contingent rental income,  up-front
fees when the seller has  significant  continuing  involvement and the amount of
revenue  recognized  when the seller is acting as a sales  agent or in a similar
capacity.  SAB 101 also provides guidance on disclosures that should be made for
revenue recognition policies and the impact of events and trends on revenue. The
Company  adopted SAB 101 effective  October 1, 1999. The adoption of SAB 101 did
not have a material  effect on the financial  statements of the Company,  as the
revenue recognition policies are in conformity with SAB 101.


                                      F-14

<PAGE>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


Accounting for Certain Transactions Involving Stock Compensation

In  March  2000,   the  Financial   Accounting   Standards   Board  issued  FASB
Interpretation No. 44 ("FIN 44"), Accounting for Certain Transactions  Involving
Stock Compensation-An Interpretation of APB Opinion No. 25. FIN 44 clarifies the
application  of APB No. 25 to certain  issues  including:  the  definition of an
employee  for  purposes  of  applying  APB  Opinion  No.  25; the  criteria  for
determining  whether a plan qualifies as a noncompensatory  plan; the accounting
consequences  of various  modifications  to the terms of previously  fixed stock
options or awards;  and the  accounting  for the exchange of stock  compensation
awards in a business combination.  FIN 44 is effective July 1, 2000, but certain
conclusions in FIN 44 are applicable  retroactively to specific events occurring
after either  December 15, 1998 or January 12, 2000. The Company does not expect
the application of FIN 44 to have a material  impact on the Company's  financial
position or results of operations.

2.   NOTES AND ACCOUNTS RECEIVABLE

Notes and accounts receivable consist of the following:

                                                        2000            1999
                                                        ----            ----
     Accounts:
            Trade receivables                       $ 9,020,999     $ 9,003,334
            Other                                     2,856,915       1,142,976
                                                    -----------     -----------
                                                     11,877,914      10,146,310
     Less: allowance for doubtful accounts             (797,611)       (675,334)
                                                    -----------     -----------
                                                     11,080,303       9,470,976
     Short-term notes-trade                             106,728         132,306
                                                    -----------     -----------
                                                    $11,187,031     $ 9,603,282
                                                    ===========     ===========



3.    ACCOUNTS AND TRANSACTIONS WITH RELATED PARTIES

Balances and transactions with related parties consist of the following:

                                                     2000               1999
                                                     ----               ----

       Due from stockholders                      $4,900,499         $  644,988
       Due from related parties                       39,618          2,954,579
       Due to stockholders (short-term)               76,657             75,108
       Due to stockholders (long-term)                16,409             16,715




                                      F-15

<PAGE>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


Balances due from  stockholders  for fiscal 2000 and 1999  originate from loans,
which  bear  interest  at market  rates  which  range  from 10.5% to 12% in U.S.
dollars and 16% in Colones,  made  primarily to the  Company's  Chief  Executive
Officer,  other  stockholders and to Inversiones La Ribera, a company 100% owned
by the Company's Chief Executive Officer. Interest income for fiscal years ended
September  30, 2000,  1999 and 1998  amounted to $405,040,  $87,535 and $53,200,
respectively.

Current and long-term  balances due to  stockholders  in 2000 and 1999 originate
from  notes  payable  to  the  Company's  Chief  Executive   Officer  and  other
stockholders.

During  fiscal  2000 and 1999,  the Board of  Directors  of  Pipasa  declared  a
dividend  to common  stockholders  of Pipasa for a total of 637,000  and 510,565
"TCA"  preferred  shares  of  Pipasa,   valued  at  $2,143,626  and  $1,929,766,
respectively. In accordance with Pipasa's ownership, Inversiones La Ribera, S.A.
received 257,602 shares during fiscal year 2000 and 206,472 shares during fiscal
year 1999, valued at $866,882 and $780,397, respectively.  Immediately after the
issuance of such preferred  stock,  Inversiones  La Ribera,  S.A. used the total
proceeds of the dividends to cancel  outstanding debts with Pipasa,  during each
of fiscal 2000 and 1999. The dividends  distributed during fiscal years 2000 and
1999 correspond to Pipasa's earnings pertaining to fiscal periods 1999 and 1998,
respectively.

During fiscal 2000,  the Board of Directors of As de Oros declared a dividend of
590,000  series  "TCA"  shares  of  preferred  stock  of As de  Oros  valued  at
$1,983,327  to common  stockholders  of record of As de Oros as of September 30,
1999. As de Oros distributed 332,642 shares to the Company and 257,358 shares to
Comercial  Angui,  S.A. in accordance with As de Oros' common stock ownership as
of September  30, 1999.  The  dividends  distributed  correspond  to As de Oros'
earnings pertaining to fiscal period 1999.

4.   INVENTORIES

Inventories consist of the following:

                                                    2000                1999
                                                    ----                ----

        Finished products                       $ 4,049,669         $ 3,029,269
        Poultry                                   3,655,554           3,035,678
        Production poultry                        3,191,343           3,329,784
        Materials and supplies                    1,939,597           2,165,074
        Raw materials                             2,180,936           1,757,125
        In transit                                  391,105           1,469,056
                                                -----------         -----------
                                                 15,408,204          14,785,986
        Production poultry                       (1,025,754)           (836,849)
        Allowance for obsolescence                  (74,682)            (52,620)
                                                -----------         -----------
                                                $14,307,768         $13,896,517
                                                ===========         ===========



                                      F-16
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


5.   PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is summarized as follows:

                                                    2000                1999
                                                    ----                ----

        Land                                    $ 7,608,400         $ 5,676,757
        Buildings and facilities                 13,345,140           9,833,532
        Machinery and equipment                  25,151,983          21,652,888
        Machinery in transit                        350,344             534,158
        Construction in process                   9,917,733           4,639,879
                                                -----------         -----------
                                                 56,373,600          42,337,214
        Less: accumulated depreciation and
                amortization                    (10,947,719)        (10,413,728)
                                                -----------         -----------
                                                $45,425,881         $31,923,486
                                                ===========         ===========

Depreciation  expense  for the years ended  September  30,  2000,  1999 and 1998
amounted to $3,862,281, $3,197,646 and $2,313,075, respectively.

6.   LONG-TERM INVESTMENTS

Long-term  investments,  which are carried at cost,  net of  unrealized  foreign
exchange differences, consist of the following:

                                                     2000               1999
                                                     ----               ----
       Grupo Industrias Oleaginosas S.A.
          ("INOLASA")                            $ 3,317,457        $ 3,551,625
       La Condesa, S.A.                              638,264            683,317
       Others (less than 50% ownership)                9,664             25,721
                                                 -----------        -----------
                                                 $ 3,965,385        $ 4,260,663
                                                 ===========        ===========


INOLASA is the only  supplier of soybean  meal in Costa Rica.  The Company has a
10%  ownership  interest in INOLASA which is accounted for under the cost method
and  dividends  are recorded in income when they are  declared.  During the year
ended  September  30, 2000,  the Company  received cash  dividends  from INOLASA
amounting to approximately $550,000.  During fiscal year 1999, no dividends were
declared or paid by INOLASA.  For fiscal year 1998,  the Company  received  cash
dividends from INOLASA in the amount of $150,000.  These  dividends are included
in miscellaneous, net in the consolidated statements of income.

During 1998, the Company  acquired  200,000,000  preferred shares of La Condesa,
S.A., a hotel located in Costa Rica.  Shares in La Condesa,  S.A., a corporation
in Costa Rica in the hotel business,  does not grant  ownership  interest to the
Company.


                                      F-17
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


7.   NOTES PAYABLE

Notes payable consist of the following:

                                              2000                     1999
                                              ----                     ----

     Loans payable                       $ 12,776,593              $ 5,661,055
     Commercial paper                               -                1,895,613
     Other                                    101,554                   26,222
                                         ------------              -----------
                                         $ 12,878,147              $ 7,582,890
                                         ============              ===========

Loans  payable  include  lines of  credit  and  commitments  with  banks and raw
material  suppliers  to support  operations  of the  Company.  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 are due from October 2000 through
September 2001.

As of September 30, 2000, the Company had line of credit  agreements  with banks
and raw material  suppliers for a maximum  aggregate  amount of $27 million,  of
which  $16.7  million had already  been used ($26.7  million for 1999,  of which
$8.60 million had already been used).  As of September 30, 2000, $4.3 million of
these lines of credit are included in accounts  payables.  The credit agreements
may be renewed  annually and bear interest at annual rates ranging from 8.00% to
11.75%.  Property  and  inventory  amounting  to $1.9  million  and $1  million,
respectively,  secure line of credit  agreements  amounting to $6.2 million,  of
which  $5.9 had been  used as of  September  30,  2000.  Other  lines of  credit
agreements and notes payables are unsecured.

The Company was in compliance with all debt covenants as of September 30, 2000.

8.   LONG-TERM DEBT

     Long-term debt consists of the following:

                                                    2000                1999
                                                    ----                ----

        Series A Senior Notes                  $  8,000,000        $  8,000,000
        Series B Senior Notes                    12,000,000          12,000,000
        Bank loans                                7,501,095           2,625,773
                                               ------------        ------------
                                                 27,501,095          22,625,773

           Less: current installments            (5,680,190)         (1,182,184)
                                               ------------        ------------
                                               $ 21,820,905        $ 21,443,589
                                               ============        ============

As of September 30, 2000,  bank loans  amounting to $4.1 million were secured by
Company's  property,  equipment and vehicles in the amount of $5 million.  Other
bank loans  amounting  to $3.5  million are  unsecured.  Bank loans are due from
October 2001 to January 2008.

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:


                                      F-18
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


-    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 Notes 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 to the lenders.
-    The Notes include 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:

                                               2000                    1999
                                               ----                    ----

    Private Placement                         11.71%                  11.71%
    U.S. dollar bank loans                 6.19%-11.75%             5.78%-9.5%
    Costa Rican colones bank loans           24%-25%                 25%-27%

Future payments on long-term debt as of September 30, 2000 are as follows:

                 Fiscal Year                       Amount
                 -----------                       ------

                    2001                        $ 5,680,190
                    2002                          5,644,149
                    2003                          5,131,772
                    2004                          4,837,026
                    2005                          4,717,491
                 Thereafter                       1,490,467
                                                -----------
                                                $ 27,501,095
                                                ============

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".

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:


                                      F-19
<PAGE>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


<TABLE>
<CAPTION>

<S>                                               <C>               <C>               <C>
                                                       2000              1999              1998
                                                       ----              ----              ----

Numerator:
  Net income applicable to common
    Stockholders                                   $ 2,888,947       $ 3,040,655       $ 1,129,954
                                                   ===========       ===========       ===========

Denominator:
  Denominator for basic income per share            11,874,190         7,122,170         7,078,949
  Effect of dilutive securities:
    Options to purchase common stock                     4,284                 -                 -
    Other                                                    -           147,599            34,316
                                                   -----------        ----------        ----------
  Denominator for diluted earnings
    per share                                       11,878,474         7,269,769         7,113,265
                                                   ===========       ===========       ===========

Earnings per share:
       Basic                                       $      0.24       $      0.43       $      0.16
                                                   ===========       ===========       ===========
       Diluted                                     $      0.24       $      0.42       $      0.16
                                                   ===========       ===========       ===========

</TABLE>


The Company had no antidilutive securities outstanding as of September 30, 2000,
1999 and 1998.

10.  PRO FORMA FINANCIAL INFORMATION

Following  is  pro  forma  financial   information  which  presents  results  of
operations,  and weighted average basic and diluted shares,  for the years ended
September 30, 2000 and 1999,  as if the  acquisition  of the remaining  minority
interest in Pipasa and As de Oros, had taken place on October 1, 1998:


                                                 2000                1999
                                                 ----                ----

Net sales                                    $123,628,327        $118,549,625
Net income                                      3,481,205           6,431,992

Pro forma earnings per share:
    Basic                                    $       0.25        $      0.49
                                             ============        ===========
    Diluted                                  $       0.25        $      0.48
                                             ============        ===========

Pro forma Weighted average
  number of common shares
  outstanding
    Basic                                      12,800,537         12,476,686
                                             ============        ===========
    Diluted                                    12,804,822         12,624,285
                                             ============        ===========


                                      F-20
<PAGE>
                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)



11.  EMPLOYEE BENEFIT PLAN

The Company has a Stock Option Plan (the "Plan"), under which certain directors,
officers,  employees  and entities  who provide  services to the Company and its
subsidiaries  are  participants.   In  October  1999,  the  Company  granted  to
seventy-six  (76)  officers and employees  7,600 shares of the Company's  common
stock,  which vested upon issuance.  Officers and employees were restricted from
selling the shares  granted and exercised for a period of one year. In addition,
7,600  options to purchase  shares of common stock of the Company were issued on
the same date to those same  officers  and  employees,  at an exercise  price of
$6.00 which vested upon issuance and had to be exercised  within a period of one
year,  after which,  the officers and employees are restricted from selling such
shares of common stock for one  additional  year.  Market price per share on the
date of the grant and issuance of the stock options was $11.40.  As of September
30, 2000, 64 employees  exercised  their stock options,  which amounted to 6,400
shares of common  stock.  All options  under this plan expired on September  30,
2000. No options were outstanding as of September 30, 2000.

The  Company  applied  Accounting  Principles  Board  ("APB")  Opinion No. 25 in
accounting for its stock options,  and accordingly,  compensation  costs for the
shares  granted and stock  options  issued were  expensed  during  fiscal  2000.
Accordingly, compensation costs amounting to $121,598 for the shares granted and
stock  options  issued have been  expensed  during the year ended  September 30,
2000. Pro forma  information and other  information  required under SFAS No. 123
"Accounting for Stock Based Compensation" are deemed not significant.

A summary of the changes and status of the  Company's  stock based  compensation
plans for the end of fiscal year 2000 is as follows:

                                                       Weighted      Weighted
                                                       Average       Average
                                        Number of      Exercise       Fair
                                         Shares         Price         Value
                                        ---------      --------      --------
Outstanding, beginning of year                   -     $    6.00     $   11.40
Granted                                      7,600             -             -
Exercised                                    6,400          6.00         11.60
Forfeited                                        -             -             -
Expired                                      1,200          6.00             -
                                             -----
Outstanding, end of year                         -             -             -
                                             -----


12.  STOCKHOLDERS' EQUITY

     Common Stock

As of September 30, 2000 and 1999,  20,000,000  shares of common stock at $0.001
par value were authorized.


                                      F-21
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


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, 2000, no shares of common stock had
been repurchased under this program.

In August 1999,  Pipasa purchased 5,500 shares of the Company's common stock for
$77,771.  These shares have been included in treasury  stock as of September 30,
2000 and 1999. The purchase was authorized by the Board of Directors of Pipasa.

     Preferred Stock
     ---------------

On September 30, 2000 and 1999,  1,000,000  preferred shares of the Company were
authorized. No preferred shares had been issued as of September 30, 2000.

     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 637,000 shares, respectively. As of September 30, 2000, there
were 317,831 shares of class "C" preferred  shares  outstanding  which amount to
$2,216,072 in the  accompanying  consolidated  balance  sheets.  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 an
     annual  dividend  equal to the prime rate set by the Banco Central de Costa
     Rica plus two percent,  payable  monthly which as of September 30, 2000 was
     equivalent to 11.5%.

During fiscal 2000, 1999, and 1998 dividends of $182,892,  $237,910 and $227,357
respectively, were paid on these preferred shares and are reflected as preferred
stock dividends in the accompanying consolidated statements of income.

During  fiscal  2000 and 1999,  the Board of  Directors  of  Pipasa  declared  a
dividend  to common  stockholders  of Pipasa for a total of 637,000  and 510,565
"TCA"  preferred  shares  of  Pipasa,   valued  at  $2,143,626  and  $1,929,766,
respectively. In accordance with Pipasa's ownership, Inversiones La Ribera, S.A.
received 257,602 shares during fiscal year 2000 and 206,472 shares during fiscal
year 1999, valued at $866,882 and $780,397, respectively.  Immediately after the
issuance of such preferred  stock,  Inversiones  La Ribera,  S.A. used the total
proceeds of the dividends to cancel  outstanding debts with Pipasa,  during each
of fiscal 2000 and 1999. The dividends  distributed during fiscal years 2000 and
1999,  correspond to Pipasa's  earnings  pertaining  to fiscal  periods 1999 and
1998, respectively.


                                      F-22
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


     As de Oros
     ----------

As of September 30, 2000 and 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 in the  accompanying
consolidated balance sheets as of September 30, 2000, and 1999.

During fiscal 2000,  the Board of Directors of As de Oros declared a dividend of
590,000  series  "TCA"  shares  of  preferred  stock  of As de  Oros  valued  at
$1,983,327  to common  stockholders  of record of As de Oros as of September 30,
1999. As de Oros distributed 332,642 shares to the Company and 257,358 shares to
Comercial  Angui,  S.A. in accordance with As de Oros' common stock ownership as
of September  30, 1999.  The  dividends  distributed  correspond  to As de Oros'
earnings pertaining to fiscal period 1999.

Immediately  after the issuance of such preferred  stock, As de Oros repurchased
from the  stockholders  a portion of the preferred  stock  issuance for $881,273
which equals the value of such  repurchased  stock.  The  stockholders  used the
proceeds of the purchase to repay  outstanding  debts to As de Oros.  As de Oros
cancelled  outstanding  debts from  Inversiones La Ribera,  S.A.

As of September 30, 2000, there are no preferred dividends in arrears.

     Treasury Stock
     --------------

As of September 30, 2000 and 1999,  47,752  shares of Common Stock  amounting to
$268,394 were held as treasury stock.

     Retained Earnings
     -----------------

Current  legislation  in Costa  Rica  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, 2000 and 1999, the Company has
allocated retained earnings of $1,698,916 and $1,374,092,  respectively, for the
creation of a legal reserve.

13.  OPERATING LEASES

The Company has operating  leases for vehicles,  cooling  equipment and building
facilities for its  restaurants  and retail  outlets.  These leasing  agreements
expire  between June 2001 and February  2004. At the end of the lease term,  the
Company has the option of returning  or buying the vehicles or the  equipment at
estimated market value.


                                      F-23
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


Rental  expenses  for  operating  leases  amounted to  $1,585,886,  $819,106 and
$550,627 for the 2000, 1999 and 1998 fiscal years, respectively.

The Company was obligated for the  following  minimum  annual base rentals under
operating leases as of September 30, 2000:

               Fiscal Year                           Amount
               -----------                           ------

                 2001                            $ 1,876,465
                 2002                              1,507,357
                 2003                                882,010
               Thereafter                             76,948
                                                 -----------
                                                 $ 4,342,780
                                                 ===========

14.  INCOME TAXES

Income tax expense  attributable  to income from  continuing  operations for the
years ended September 30, 2000, 1999 and 1998 consists of:

                                  2000            1999            1998
                                  ----            ----            ----

     Current:
        United States          $  12,000       $       -       $       -
        Costa Rica               392,021         972,143         310,971

     Deferred
        United States                  -               -               -
        Costa Rica              (310,551)       (209,671)       (122,308)
                               ---------       ---------       ---------
     Total                     $  80,223       $  62,472       $ 188,663
                               =========       =========       =========

Income tax expense  differs from the amounts  computed by applying the corporate
tax rate in Costa Rica of 30% to pretax income from  continuous  operations as a
result of the following:

<TABLE>
<CAPTION>

<S>                                                       <C>                <C>                <C>
                                                               2000               1999               1998
                                                               ----               ----               ----

Computed statutory income tax
  provision                                                $ 1,117,408        $ 2,452,214        $ 1,092,281
Increase (reduction) in income taxes
  resulting from:
    Non-taxable, income                                       (343,819)          (484,171)          (281,330)
    Increase (decreases) in provisions                         110,080            171,445             41,926
    Tax benefit under Costa Rica
        Income Tax Law Article 8, Section T for
        Agricultural Companies and Article 8,
        Section F

                                                               (72,069)           (98,695)          (122,667)
    Deduction for reinvestment of prior year
          earnings in machinery and equipment
          under Costa Rica Income Tax Law
          Article 8, Section T for Agricultural
          Companies
                                                            (1,215,174)          (544,048)          (276,524)
</TABLE>


                                      F-24
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


<TABLE>
<CAPTION>

<S>                                                       <C>                <C>                <C>
                                                               2000               1999               1998
                                                               ----               ----               ----

    Non-deductible depreciation expense                        347,371            209,672            122,308
    Deductible investments in tourism related
          companies                                                  -                  -           (399,122)
    Depreciation revalued assets                              (246,145)          (226,483)          (237,755)
    Amortization of cost in excess of net assets
          of acquired business                                 286,148            119,682             89,162
    Utilization of loss carryforwards                         (411,494)        (1,198,698)                 -
    Non-deductible operating losses                            244,677            614,233            134,317
    Taxable intercompany loans                                 597,356                  -                  -
    Other items                                                (10,318)           (43,007)           148,375
                                                           -----------        -----------         ----------
                                                               404,021            972,143            310,971
    Amortization of deferred tax benefit                      (323,798)          (209,671)          (122,308)
                                                           -----------        -----------         ----------
                                                           $    80,223        $   762,472         $  188,663
                                                           ===========        ===========         ==========

</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, 2000
and 1999 are presented below:


                                                 2000                  1999
                                                 ----                  ----
    Deferred tax assets:
    -------------------

    Allowance for doubtful accounts            $  239,283          $  235,019
    Revaluation of property, plant and
      equipment depreciable for tax
      purposes in Costa Rica                    3,402,178           3,238,121
    Costa Rican loss carryforwards                 57,991             139,442
    United States loss carryforwards                    -             392,666
    Vacation accrual                              185,495             148,152
                                               ----------          ----------
    Total gross deferred tax assets             3,884,947           4,153,400
    Less valuation allowance                   (3,884,947)         (4,153,400)
                                               ----------          ----------
                                               $        -          $        -
                                               ==========          ==========


The Company has established a valuation  allowance for the depreciation  expense
resulting from  revaluation  of property,  plant and equipment in Costa Rica and
for  certain  provisions.  The  Company  has also  included  the  effect  of net
operating  loss  carryforwards  related to  operations  in the United States and
Costa Rica. As of September 30, 2000 and 1999, the Company's deferred tax assets
are fully offset by a valuation  allowance.  Management of the Company  believes
that it is more likely than not that all of the net deferred tax assets will not
be  realized.  Management  will  continue to assess the  valuation  allowance to
determine if such allowance should be reduced based on changing conditions,  and
to the extent that it is no longer  required,  the tax benefit of the  remaining
net deferred tax assets will be recognized.



                                      F-25
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)



                                                 2000                  1999
                                                 ----                  ----

    Deferred tax liability:
    ----------------------

    Excess fair market value over book
      value of assets acquired                 $2,899,511          $1,764,735


The recorded  deferred tax liability for the years ended  September 30, 2000 and
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 and other capitalizations expensed for tax purposes.

Taxes in the United  States of America have not been  provided on  undistributed
earnings  of  foreign   subsidiaries,   as  such  earnings  are  being  retained
indefinitely by such  subsidiaries for  reinvestment.  For fiscal years 2000 and
1999,  the Company  applied loss  carryforwards  for federal taxes in the United
States of America for $1.1 million and $3.4 million,  respectively,  as a credit
to the taxable income determined for Rica Foods, Inc. in the United States.  For
fiscal years 2000 and 1999, As de Oros applied loss  carryforwards in the amount
of  approximately  $240,000  and $1.2  million  as a credit  to the  income  tax
determined  in Costa  Rica.  As of  September  30,  2000,  the  Company  has net
operating loss  carryforwards  amounting to $193,303 in Costa Rica, which expire
on September 30, 2001.

In accordance  with income tax regulations in Costa Rica, 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, 2000,  1999,
1998 and 1997, are open to examination by the tax authorities in Costa Rica.

15.  SEGMENT AND GEOGRAPHIC INFORMATION

The Company has operated 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 PipasaTM  and As de OrosTM.  Broiler
chicken is a generic  product  that is directed to  customers  of all social and
economic  levels.  Chicken is sold mostly to supermarket  chains,  institutional
clients, schools, hospitals, restaurants and small grocery stores.


                                      F-26
<PAGE>

                             RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


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 KimbyTM,  ChulitasTM,  and As de OrosTM 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.  During
October 2000, the Company  purchased the brand name Zaragoza,  from a company in
Costa Rica,  and will begin to produce and  distribute  this product  during the
next fiscal year.

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,
shrimps and domestic pets.  The Company's  animal feed products are sold through
the AscanTM, Aguilar y SolisTM,  KaninTM,  MimadosTM and NutribelTM brand names.
Customers for the commercial animal feed brand, are mainly large wholesalers and
high scale  breeders.  Products  marketed  through  the  MimadosTM,  KaninTM and
AscanTM  brand  names  are  targeted  towards  veterinarians,   pet  stores  and
supermarkets  and are sold  typically to consumers  with medium to higher income
levels.

RESTAURANTS:  Corporacion Planeta Dorado, S.A. and Subsidiaries ("Restaurantes")
operates 30 restaurants located in rural and urban areas through out Costa Rica,
including express delivery service in some restaurants.  Restaurantes is a quick
service   restaurant,   which  offers  a  diversified  menu  of  chicken  meals.
Restaurantes  distinguishes  itself from other quick service  chains by offering
dishes and using recipes and ingredients  which appeal to the taste of consumers
in Costa Ricans. The quick service restaurant  business is highly competitive in
Costa Rica.

In October  2000,  the  Company  reached  an  agreement  with  Stock  Management
International,  a British Virgin Islands corporation, to sell an 81% controlling
interest in Planeta  Dorado,  S.A. and its  subsidiaries,  for $4.05  million in
cash,  to be cancelled  over a five year period with an annual  interest rate of
10.06%.  As part of the negotiation,  As de Oros will continue to supply Planeta
Dorado  with  chicken  for the next 12 years.  The  Company is in the process of
closing this transaction.

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

OTHER:  This segment includes sales of commercial eggs,  non-recurrent  sales of
fertile eggs,  recycling  material in fiscal 2000,  and raw material sales among
others.


                                      F-27

<PAGE>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)



Business Segments
-----------------
(In millions)

<TABLE>
<CAPTION>

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

                                              Animal        By-
                                  Broiler      Feed      Products    Restaurants    Exports     Other   Corporate   Consolidated
                                  -------     ------     --------    -----------    -------     -----   ---------   ------------

2000
----
Net sales                        $ 73.48     $ 22.42      $11.69       $ 8.03       $ 4.56     $ 3.45                 $ 123.63
Gross profit less selling
  expenses                         15.03        2.45        2.70         0.33         0.02       0.39                    20.92
Other operating expenses                                                                                                 14.53
Income from operations                                                                                                    6.39
Depreciation and
  amortization expense              2.57        0.63        0.08         0.22            -          -        0.38         3.88
Assets                             34.85       10.62        4.41         6.66         1.31       0.61       29.72        88.18

1999
----
Net sales                        $ 72.13     $ 20.61      $ 9.66        $ 9.39      $ 3.38     $ 3.38           -     $ 118.55
Gross profit less selling
  expenses                         17.22        3.02        2.21          0.50        0.45       0.84                    24.24

</TABLE>



                                      F-28
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


<TABLE>
<CAPTION>

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

                                              Animal        By-
                                  Broiler      Feed      Products    Restaurants    Exports     Other   Corporate   Consolidated
                                  -------     ------     --------    -----------    -------     -----   ---------   ------------

Other operating expenses                                                                                                 11.80
Income from operations                                                                                                   12.43
Depreciation and
  amortization expense              1.61        0.57        0.04          0.26           -          -        0.72         3.20
Assets                             27.35       12.78        0.88          3.00        0.42       0.03       25.86        70.32

1998
Net sales                        $ 60.06     $ 17.85      $  9.4       $  5.11      $ 2.71     $ 3.66           -     $  98.79
Gross profit less selling
  expenses                           8.7        2.80        2.31          0.34        0.51       0.49                    15.15
Other operating expenses                                                                                                  8.99
Income from operations                                                                                                    6.16
Depreciation and
  amortization expense              1.20        0.49        0.04         10.20           -          -        0.38         2.31
Assets                             25.66       12.32         .09          2.63        0.99          -       21.31        63.00

</TABLE>


     Geographic Information (In millions):
     ------------------------------------

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

                                     2000               1999              1998
                                     ----               ----              ----
Net Sales:
  Costa Rica                       $119.07            $115.17          $  96.08
  Other                               4.56               3.38              2.71
                                   -------            -------           -------
     Total                         $123.63            $118.55          $  98.79
                                   =======            =======          ========

Long-lived assets:
  Costa Rica                       $ 44.30            $ 31.50          $ 28.43
  Other                               1.13               0.42             0.06
                                   -------            -------          -------
      Total                        $ 45.43            $ 31.92          $ 28.49
                                   =======            =======          =======


                                      F-29
<PAGE>

                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


16.  ACQUISTIONS

During October 1999,  Pipasa merged with Karpatos,  S.A.  ("Karpatos"),  a Costa
Rican  corporation,  which is in the business of converting  waste material from
chicken  farms into  fertilizers.  The  transaction  was accounted for under the
purchase  method of accounting.  The Company  recorded assets with a fair market
value of  approximately  $700,000  and  assumed  liabilities  for an  equivalent
amount. The Company did not issue any shares of Company stock or cash as part of
this transaction. The acquisition of Karpatos is not material to these financial
statements.

In October  2000,  the Company  entered  into a Stock  Purchase  Agreement  (the
"Indavinsa   Acquisition")   with  Industrias   Avicolas   Nicaraguenses,   S.A.
("Indavinsa"),  a Nicaraguan  company engaged in the production and distribution
of poultry and animal feed  concentrate  products.  According  to the  Indavinsa
Acquisition  agreement,  the Company  will  acquire 80%  interest  ownership  of
Indavinsa  for a total of 100,000  shares of common  shares and $300,000 in cash
payable at the closing of the  transaction.  The  Company  expects to close this
transaction during the second quarter of fiscal year 2001.

During  July 2000,  the Company  announced  its intent to acquire an interest in
Poultryfirst.com.  Poultryfirst.com  is a virtual  business-to-business  poultry
market  place which  provides  leading  business  tools and market  data,  using
formats of auctions for fresh products and catalogs for value-added products for
the sale  and  commercialization  of  poultry  and  poultry  by-products  on the
Internet.  Poultryfirst.com  is owned by Jose Pablo Chaves,  the Company's Chief
Operating  Officer  and a Director of the Company who is also the son of Calixto
Chaves,  a major  stockholder  and Chief Executive  Officer of the Company.  The
Company  is  currently  evaluating  the terms and  conditions  of any  potential
acquisition.

In December 2000,  the Company  announced its intent to acquire a majority stake
of the  outstanding  common  stock of Core Etuba,  SRL.,  a  Brazilian  company
engaged in the production and distribution of poultry products.  Final terms and
conditions of this acquisition are under negotiation.

17.  QUARTERLY FINANCIAL DATA

Unaudited  summarized  financial  data by quarter for fiscal 2000 and 1999 is as
follows:
<TABLE>
<CAPTION>

<S>                                   <C>            <C>             <C>            <C>             <C>
                                           First          Second          Third         Fourth
                                          Quarter        Quarter         Quarter        Quarter          Total
                                          -------        -------         -------        -------          -----
Fiscal  2000
Net Sales                              $ 33,116,512   $ 30,309,985    $ 29,755,427   $ 30,446,433    $ 123,628,357
Gross profit                             11,990,046      9,882,436       8,707,290      9,291,651       39,871,423
Net income (loss)                         2,156,539        532,404       (310,208)        510,211        2,888,946
Basic earnings (loss) per share                0.24           0.04          (0.02)           0.04             0.24
Diluted earnings (loss) per share              0.24           0.04          (0.02)           0.04             0.24

Fiscal 1999
Net Sales                              $ 31,651,795   $ 29,908,477    $ 27,732,390   $ 29,256,963    $ 118,549,625
Gross profit                             11,644,973     10,544,656       9,057,998     10,027,204       41,274,831
Net income                                1,501,527        979,764         133,065        426,299        3,040,655
Basic earnings per share                       0.20           0.13            0.02           0.06             0.43
Diluted earnings per share                     0.20           0.13            0.02           0.06             0.42

</TABLE>


                                      F-30
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


18.  CONCENTRATION OF CREDIT 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
fiscal 2000, 1999 and 1998, and no account receivable from any customer exceeded
approximately  $430,000.  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, and general economic conditions.  Consequently,  an
adverse  change in these factors could affect the Company's  estimate of the bad
debt allowance.

19.  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
     -------------

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's policy is to increase the salaries of all employees every
six months to offset  the effect of  inflation.  Under the  existing  labor laws
prior to and for fiscal year 2000,  companies in Costa Rica are required to make
a payment equivalent to 8.33% of an employee's yearly gross salary for a maximum
of 8 years of  employment,  as severance to be paid upon the  termination  of an
employee  without just cause.  The Company  offered its  employees the option of
depositing  5% in the  workers`  association:  Asociacion  de  Empleados de Rica
Foods,  Inc.  ("ASERICA").  The  employee  then  matches  the 5%  payment by the
Company.  The remaining  3.33%, the Company offers the option to the employee to
deposit it into a pension  fund,  the  employee  must also match any  percentage
deposited  into a pension  fund by the  Company.  In February of each year,  the
company  makes a payment  equal to 1.33% of the  employee's  total  yearly gross
salary.  Any  remaining  amount  owed by the  Company  must be settled  when the
employee is terminated. The Company has a provision to settle severance pay when
an  employee  is  terminated  and  believes  it  is  reasonable  based  on  past
experience.  As of September 30, 2000, the Company has a provision for severance
pay in the amount of approximately $260,000 included in accrued expenses.



                                      F-31
<PAGE>

                             RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


Beginning on March 2001,  labor laws will require all companies in Costa Rica to
deposit 3% of the 8.33% into a pension fund. Of the remaining 5.33%, the Company
will continue to deposit 4% in ASERICA, as part of a savings program,  which the
employee must match, and will continue to pay each February the remaining 1.33%.
The new  provisions  of the labor  law are not  expected  to have a  significant
effect on the results of  operations,  cash flows or  financial  position of the
Company.

     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,  2000,  the  amounts  outstanding  under  these
construction commitments totaled approximately $270,000.

     Litigation, Claims and Assessments
     ----------------------------------

The income tax returns of As de Oros for fiscal  year 1995 were  examined by the
Costa Rican tax authorities  and As de Oros 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,  cash flows 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 substituted by land
owned by Pipasa  with the  approval  of the  court in Costa  Rica  (Juzgado  6to
Civil).  Such  substitution  of  collateral  was  subsequently  ratified  by the
Superior Court on November 11, 1999. The prejudgment liens on assets and on cash
have been released and Pipasa received all of the funds originally attached. 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.
The Florida  lawsuit is still active and Pipasa's  defense is based on a lack of
personal  jurisdiction  in the State of  Florida.  Interrogatories,  Request  to
Produce Documents and Request of Admissions have been answered 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 or assess the
likelihood of an unfavorable outcome.


                                      F-32
<PAGE>


                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


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, 2000.  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 or her capacity.

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.

20.  SUBSEQUENT EVENTS

During  October  2000,  the Company  announced it had reached an agreement  with
Stock Management International, a British Virgin Islands corporation, to sell an
81% controlling interest in the subsidiaries of As de Oros, Planeta Dorado, S.A.
and  Corasa  Estudiantes,  S.A.  (the  "Restaurants"),  in  exchange  for a note
receivable.  Pursuant to the terms and conditions of the agreement,  the Company
will receive $4.05 million over a five year period, with an annual interest rate
of 10.06%, payable every six months. Stock Management  International will have a
grace period of one year and will subsequently make four annual amortizations to
the Company  amounting to $1,012,500 each. As part of the agreement,  As de Oros
will continue to supply poultry  products to the  Restaurants for a period of 12
years. The Company is in the process of closing this transaction.

In October 2000, the Company purchased from Granja Zaragoza, S.A., a Costa Rican
company,  the brand name  "Zaragoza" for a total of $600,000.  Granja  Zaragoza,
S.A.  distributes  processed and packaged beef, pork and poultry  products.  The
purchase  of the brand name will  grant the  Company  the right to  produce  and
market Zaragoza products.  Prior to the purchase,  the Company  manufactured the
Zaragoza products in its facilities and subsequently sold it to Zaragoza for its
distribution.  According to the terms of the agreement, the $600,000 originating
from the  purchase  will be paid by crediting  amounts due from  Zaragoza in the
amount of  $200,000  and the  remaining  $400,000  will be paid to  Zaragoza  in
monthly  payments  amounting to $10,000 over a period of 40 months.  The Company
will amortize the Zaragoza trademark over a period of 10 years.


                                      F-33
<PAGE>
                                RICA FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (continued)


         REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON SCHEDULE



To the Board of Directors and Stockholders of
    RICA FOODS, INC.:


We have audited in accordance with generally  accepted auditing  standards,  the
financial  statements  included in Rica Foods, Inc.'s Form 10-K, and have issued
our report  thereon dated  December 22, 2000. Our audit was made for the purpose
of  forming  an  opinion on those  statements  taken as a whole.  The  Financial
Statement  Schedule II listed in Item 14 is presented  for purposes of complying
with the Securities and Exchange Commission's rules and is not part of the basic
financial  statements.  This financial  statement schedule has been subjected to
the auditing  procedures applied in the audit of the basic financial  statements
and, in our opinion,  fairly states in all material  respects the financial data
required to be set forth therein in relation to the basic  financial  statements
taken as a whole.

ARTHUR ANDERSEN LLP



   Miami, Florida,
   December 22, 2000.


                                      -73-
<PAGE>



                 SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
             For the years ended September 30, 2000, 1999 and 1998



<TABLE>
<CAPTION>

<S>                                           <C>            <C>            <C>           <C>            <C>           <C>
                                                             Additions                     Non-cash                    Ending
                                              Beginning     Charged to        Cash        Reductions                   Accrual
Description                                    Accrual        Income       Reductions     (Additions)    Reversal      Balance
---------------------------------------------------------------------------------------------------------------------------------

Provision for doubtful receivables
   2000                                       $675,334        352,058           -           229,781          -          797,611
   1999                                        727,005        746,599           -           798,270          -          675,334
   1998                                        380,791        301,432           -           (44,782)         -          727,005

Provision for inventory obsolescence
   2000                                       $ 52,620         33,004           -            10,942          -           74,682
   1999                                         28,025         28,740           -             4,145          -           52,620
   1998                                           -            29,435           -             1,410          -           28,025

</TABLE>





                                      -74-
<PAGE>




                               INDEX TO EXHIBITS

Exhibit Number          Description                     Page or Cross Reference
--------------          -----------                     -----------------------

Exhibit 27              Financial Data Schedule                   76























                                      -75-

<PAGE>