Rica Foods 10Q/A 2003 Q2 Quarterly report (amended)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 0-18222

RICA FOODS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada

87-0432572

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

1840 Coral Way, Suite 101, Miami, Fl		33145
(Address of Registrant’s Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (305) 858-9480 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 ¨ No x

As of August 2, 2003, the number of shares issued and outstanding of the Company’s common stock, par value $0.001 per share was 12,864,321.

INDEX

		Page

PART I – FINANCIAL INFORMATION

ITEM 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2003 (Unaudited) and September 30, 2002	3
	Consolidated Statements of Operations for the three and six months ended March 31, 2003 and 2002 (Unaudited)	4
	Consolidated Statements of Cash Flows for the six months ended March 31, 2003 and 2002 (Unaudited)	5
	Notes to Unaudited Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
ITEM 3.	Quantitative Disclosures About Market Risk	25
ITEM 4.	Controls and Procedures	27

PART II – OTHER INFORMATION

ITEM 1.	Legal Proceedings	27
ITEM 2.	Changes in Securities and use of Proceeds	27
ITEM 3.	Defaults upon Senior Securities	27
ITEM 4.	Submissions of Matters to a Vote of Security Holders	27
ITEM 5.	Other Information	27
ITEM 6.	Exhibits and Reports on Form 8-K	28

ITEM 1.

FINANCIAL SATEMENTS

RICA FOODS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

	March 31, 2003 (Unaudited)			September 30, 2002
Assets
Current assets:
Cash and cash equivalents	$	3,073,107		$	2,728,293
Short-term investments		2,468,022			2,492,266
Notes and accounts receivable		15,935,020			15,925,710
Due from related parties		1,426,048			1,429,847
Inventories		15,349,306			14,145,070
Deferred income taxes		297,050			417,352
Prepaid expenses		1,108,686			782,826

Total current assets		39,657,239			37,921,364
Property, plant and equipment		37,259,432			39,627,144
Long-term receivables-trade		710,003			901,009
Long-term investments		3,949,107			4,109,309
Other assets		7,398,331			6,564,407
Goodwill		1,636,054			1,723,414

Total assets	$	90,610,166		$	90,846,647

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	23,314,553		$	18,975,032
Accrued expenses		2,672,191			3,428,707
Notes payable		19,611,312			17,074,336
Current portion of long-term debt		7,847,068			8,190,702
Due to stockholders		93,566			—

Total current liabilities		53,538,690			47,668,777
Long-term debt, net of current portion		10,942,393			16,018,388
Deferred income tax liability		2,111,444			2,124,450

Total liabilities		66,592,527			65,811,615
Minority interest		1,336,445			1,336,445
Stockholders’ equity:
Common stock		12,865			12,865
Preferred stock		2,216,072			2,216,072
Additional paid-in capital		25,800,939			25,800,940
Accumulated other comprehensive loss		(13,552,863	)		(12,206,661	)
Retained earnings		13,967,899			13,654,202

		28,444,912			29,477,418
Less:
Due from stockholders		(5,480,324	)		(5,495,437	)
Treasury stock, at cost		(283,394	)		(283,394	)

Total stockholders’ equity		22,681,194			23,698,587

Total liabilities and stockholders’ equity	$	90,610,166		$	90,846,647

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

RICA FOODS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)

	Three months ended March 31,						Six months ended March 31,
	2003			2002			2003			2002
Sales	$	30,833,541		$	30,598,961		$	65,992,411		$	65,381,613
Cost of sales		21,966,799			20,074,802			45,665,646			42,432,576

Gross profit		8,866,742			10,524,159			20,326,765			22,949,037
Operating expenses:
Selling		4,743,348			4,672,871			9,800,680			9,732,460
General and administrative		3,361,996			3,564,287			6,712,394			6,956,899

Total operating expenses		8,105,344			8,237,158			16,513,074			16,689,359
Income from operations		761,398			2,287,001			3,813,691			6,259,678
Other expenses (income):
Interest expense		1,072,970			1,119,851			2,226,273			2,426,251
Interest income		(377,819	)		(325,338	)		(799,341	)		(694,437	)
Foreign exchange loss, net		719,474			801,182			1,533,792			1,622,596
Miscellaneous, net		(24,008	)		(93,431	)		(131,902	)		(188,932	)

Other expenses, net		1,390,617			1,502,264			2,828,822			3,165,478
Income (loss) before income taxes and minority interest		(629,219	)		784,737			984,869			3,094,200
Provision for income tax expense		63,798			293,929			567,959			735,362

Income (loss) before minority interest		(693,017	)		490,808			416,910			2,358,838
Minority interest		17,708			19,409			35,846			38,457

Net income (loss)		(710,725	)		471,399			381,064			2,320,381
Preferred stock dividends		31,115			35,129			67,367			70,834

Net income (loss) applicable to common stockholders	$	(741,840	)	$	436,270		$	313,697		$	2,249,547

Basic earnings (loss) per share	$	(0.06	)	$	0.03		$	0.03		$	0.18

Diluted earnings (loss) per share	$	(0.06	)	$	0.03		$	0.03		$	0.18

Basic weighted average number of common shares outstanding		12,811,469			12,864,321			12,811,469			12,854,321

Diluted weighted average number of common shares outstanding		12,811,469			12,864,321			12,811,469			12,854,321

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

RICA FOODS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the six months ended March 31, 2003 and 2002

(Unaudited)

	2003			2002
Cash flows from operating activities:
Net income	$	381,064		$	2,320,381
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,330,497			2,458,715
Production poultry		1,729,348			1,715,051
Allowance for inventory obsolescence		73,861			11,680
Derivative unrealized loss		78,208			—
Gain on sale of productive assets		(22,464	)		(117,318	)
Deferred income tax benefit		90,761			(46,968	)
Provision for doubtful receivables		138,945			289,822
Minority interest		35,846			38,457
Changes in operating assets and liabilities:
Notes and accounts receivable		(165,536	)		(1,853,759	)
Inventories		(3,007,446	)		(2,890,766	)
Prepaid expenses		(298,129	)		269,403
Accounts payable		4,339,521			2,395,593
Accrued expenses		(756,516	)		(361,017	)
Long-term receivables-trade		149,113			59,080

Net cash provided by operating activities		5,097,073			4,288,354

Cash flows from investing activities:
Short-term investments		24,244			(988,447	)
Long-term investments		(49,449	)		(19,101	)
Additions to property, plant and equipment		(2,028,246	)		(1,366,042	)
Proceeds from sales of productive assets		886,076			260,007
Increase in other assets		(1,596,459	)		(2,583,017	)

Net cash used in investing activities		(2,763,834	)		(4,696,600	)

Cash flows from financing activities:
Preferred stock cash dividends		(103,213	)		(109,291	)
Short-term financing:
New loans		11,237,167			12,146,871
Payments		(8,787,477	)		(11,052,227	)

(Continued on next page)

RICA FOODS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the six months ended March 31, 2003 and 2002

(Unaudited)

(Continued)

	2003			2002
Long-term financing:		802,977			2,834,302
New loans		(6,257,412	)		(6,357,486	)
Payments
Amortization of deferred debt costs		116,694			50,584
Treasury stock acquired		—			(15,000	)
Due from stockholders and related party		93,566			925,843

Net cash used in financing activities		(2,897,698	)		(1,576,404	)

Effect of exchange rate changes on cash and cash equivalents		909,273			680,808
Increase in cash and cash equivalents		344,814			(1,303,842	)
Cash and cash equivalents at beginning of period		2,728,293			4,920,870

Cash and cash equivalents at end of period	$	3,073,107		$	3,617,028

Supplemental disclosures of cash flow information:
Cash paid during year for:
Interest	$	2,310,590		$	2,588,546

Income taxes	$	534,013		$	120,485

Supplemental Schedule of non-cash activities:
Benefits to Chief Executive Officer	$	136,863		$	—

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

RICA FOODS, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

NOTE 1 – GENERAL

Management is responsible for the preparation of the financial statements and related information of Rica Foods, Inc. and its subsidiaries: Corporacion Pipasa, S.A. and Subsidiaries (“Pipasa”) and Corporacion As de Oros, S.A. and Subsidiaries (“As de Oros”) (collectively the “Company”) that appear in this Quarterly Report on Form 10-Q/A. Rica Foods, Inc. owns 100% of the outstanding common stock of Pipasa and As de Oros. Management believes that the financial statements fairly reflect the form and substance of transactions and reasonably present the Company’s financial condition and results of operations in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying unaudited consolidated interim financial statements have been prepared in accordance with the instructions to the Quarterly Report on Form 10-Q/A and, therefore, omit or condense certain footnotes and other information normally included in the financial statements prepared in conformity with U.S. GAAP. The accounting policies followed for interim financial reporting are the same as those disclosed in Note 1 of the Notes to Consolidated Financial Statements included in the Company’s audited consolidated financial statements for the fiscal year ended September 30, 2002, which are included in Amendment No.2 to the Company’s Annual Report on Form 10-K/A. Management has included in the Company’s financial statements figures that are based on estimates and judgments, which management believes are reasonable under the circumstances. In the opinion of management, all adjustments necessary for the fair presentation of the financial information for the interim periods reported have been made. Results for the three and six months ended March 31, 2003 are not necessarily indicative of the results to be expected for the entire fiscal year ending September 30, 2003. The Company maintains a system of internal accounting policies, procedures and controls intended to provide reasonable assurance, at an appropriate cost, that transactions are executed in accordance with management’s authorization and are properly recorded and reported in the financial statements, and that assets are adequately safeguarded.

Although management believes that the disclosures are adequate to make the information presented not misleading, these unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Amendment No.2 to the Company’s Annual Report on Form 10K/A for the fiscal year ended September 30, 2002.

NOTE 2 – RECLASSIFICATIONS

Certain reclassifications in the statement of cash flows have been made to the prior period to conform to current presentation.

NOTE 3 – INVENTORIES AND PRODUCTION POULTRY

Inventories consist of the following:

	March 31, 2003		September 30, 2002
	(Unaudited)
Finished products	$	3,338,749	$	4,258,619
In-process		2,982,706		2,939,820
Live poultry – net		3,069,554		3,007,081
Materials and supplies		1,817,164		1,798,148
Raw materials		2,269,316		1,880,515
Other		21,217		—
In transit and others		1,850,600		260,887

	$	15,349,306	$	14,145,070

RICA FOODS, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

Inventories are stated at the lower of cost or market. Cost is determined using the weight-average method, except for inventories in transit, which are valued at specific cost. Live poultry inventory represents chicks in grow-out stage, breeders and layer hens. Breeder and layer hen costs are accumulated up to the production stage (approximately 20 weeks) and are amortized over the estimated production lives (approximately 65 weeks for breeder and approximately 80 weeks for layer hens) based on a percentage calculated according to the estimated production cycle of the hen, including a residual value. After approximately 43 days, chicks in grow-out stage are transferred to the processing plants. Accumulated costs consist primarily of animal feed and labor costs. Production poultry represents the accumulated amortization of breeder and layer hens in their productive stage.

NOTE 4 – IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure (SFAS 148). SFAS 148 amends FASB Statement No. 123, “Accounting for Stock-Based Compensation” (SFAS 123), providing alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. It also amends the disclosure provisions of FASB 123 and Accounting Principles Board Opinion No. 28 “Interim Financial Reporting” (APB 28) to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. Amendments to SFAS 123 related to the transition and annual disclosures are effective for fiscal year ending after December 15, 2002. Amendments to disclosure requirements of Opinion No.28 are effective for interim periods beginning after December 15, 2002. The Company does not expect the adoption of SFAS 148 will have a material impact on its financial position, results of operations or cash flows.

In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” (“FIN 45”). FIN 45 requires that the guarantor recognize, at the inception of certain guarantees, a liability for the fair value of the obligation undertaken in issuing such guarantee. FIN 45 also requires additional disclosure requirements about the guarantor’s obligations under certain guarantees that it has issued. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002 and the disclosure requirements are effective for financial statement periods ending after December 15, 2002. The Company does not expect the adoption of FIN 45 will have a material impact on its financial position, results of operations or cash flows.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” Interpretation 46 changes the criteria by which one company includes another entity in its consolidated financial statements. Previously, the criteria were based on control through voting interest. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. A company that consolidates a variable interest entity is called the primary beneficiary of that entity. The consolidation requirements of Interpretation 46 apply immediately to variable interest entities created after January 31, 2003. The consolidation requirements apply to older entities in the first fiscal year or interim period beginning after June 15, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The Company does not expect the adoption to have a material impact to the Company’s financial position or results of operations

RICA FOODS, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This Statement amends Statement 133 for decisions made (1) as part of the Derivatives Implementation Group process that effectively required amendments to Statement 133, (2) in connection with other Board projects dealing with financial instruments, and (3) in connection with implementation issues raised in relation to the application of the definition of a derivative, in particular, the meaning of an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors, the meaning of underlying, and the characteristics of a derivative that contains financing components. The Company does not anticipate that the adoption of this pronouncement will have a material effect on the financial statements

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. Some of the provisions of this Statement are consistent with the current definition of liabilities in FASB Concepts Statement No. 6, Elements of Financial Statements. The remaining provisions of this Statement are consistent with the Board’s proposal to revise that definition to encompass certain obligations that a reporting entity can or must settle by issuing its own equity shares, depending on the nature of the relationship established between the holder and the issuer. While the Board still plans to revise that definition through an amendment to Concepts Statement 6, the Board decided to defer issuing that amendment until it has concluded its deliberations on the next phase of this project. That next phase will deal with certain compound financial instruments including puttable shares, convertible bonds, and dual-indexed financial instruments. The Company does not anticipate that the adoption of this pronouncement will have a material effect on the financial statements.

NOTE 5 – SEGMENT INFORMATION (unaudited):

The following describes the performance by segment (in millions of U.S. dollars)

	Three months ended March 31,						Six months ended March 31,
Segments	2003			2002			2003			2002
Sales, net:
Broiler	$	14.89		$	16.71		$	30.96		$	35.60
Animal feed		7.60			5.80			15.86			12.27
By-products		3.41			3.53			8.13			7.41
Exports		1.44			1.83			3.18			4.04
Quick service		1.56			1.32			3.77			3.10
Other		1.93			1.41			4.09			2.96

Total net sales		30.83			30.6			65.99			65.38

Broiler		3.06			4.32			7.01			9.46
Animal feed		0.61			0.80			1.48			1.80
By-products		0.29			0.55			1.09			1.23
Exports		0.22			0.12			0.49			0.38
Quick service		0.03			0.09			0.21			0.27
Other		(0.09	)		(0.03	)		0.24			0.07
Corporate		(3.36	)		(3.56	)		(6.71	)		(6.96	)

Operating income		0.76			2.29			3.81			6.25
Other expenses (income)		1.39			1.50			2.83			3.16

Income (loss) before income taxes and minority interest	$	(0.63	)	$	0.79		$	0.98		$	3.08

RICA FOODS, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

The Company use segment profit margin information to analyze segment performance, which is defined as the ratio between the income or loss from operations associated with a segment and the Sales, net associated with the subject segment. The basis for determining the Company’s operating segments is the means in which management uses financial information in its operations. Management operates and organizes the financial information according to the types of products offered to its customers. The Company operates in seven business segments:

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

Animal Feed: Animal feed is made with imported raw materials, such as corn and soybean meal, along with the unused portions of chicken and other vitamins and minerals. Animal feed is marketed for consumption by cows, pigs, birds, horses, shrimp and domestic pets. The Company’s animal feed products are sold through the Ascan^™, Aguilar y Solis^™, Dogpro^™, Mimados^™ Kan Kan^™, and Nutribel^™ 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^™, Dogpro^™ Kan Kan^™, and Ascan^™ 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 an approximate 28% market share.

By-products: By-products include sausages, bologna, chicken nuggets, chicken patties, frankfurters, salami and pate. The Zaragoza^™ brand name includes chicken, beef and pork by-products. The Company’s chicken by-products are sold through the Kimby^™, Tiquicia^™, Chulitas^™, Zaragoza^™, Pimpollo^™ and As de Oros^™ 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^™ brand name is the leading seller of chicken by-products in Costa Rica.

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

Quick Service: Corporacion Planeta Dorado, S.A. and its subsidiary operate 28 restaurants (the “Restaurants”) located in rural and urban areas throughout Costa Rica, including express delivery service in some restaurants. This segment is comprised of quick service restaurants, which offer a diversified menu of chicken meals. The Restaurants distinguish themselves from other quick service chains by offering dishes and using recipes and ingredients that appeal to the taste of consumers in Costa Rica. The quick service restaurant business is highly competitive in Costa Rica, as several other quick service chains operate in Costa Rica.

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

Corporate: This segment is composed of General and Administrative expenses of the Company, which do not generate revenues .

RICA FOODS, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

NOTE 6 – COMPREHENSIVE INCOME (LOSS):

The components of comprehensive income (loss) are as follows (unaudited):

	Three months ended March 31,						Six months ended March 31,
	2003			2002			2003			2002
Net income (loss)	$	(710,725	)		471,399		$	381,064		$	2,320,381
Derivative unrealized gain		117,761			—			98,361			—
Deferred gain (loss) to be recognized in cost of production		122,085			—			(20,153	)		—
Foreign currency translation adjustment		(635,565	)		(769,036	)		(1,424,410	)		(1,379,522	)

Total comprehensive income (loss)	$	(1,106,444	)	$	(297,637	)	$	(965,138	)	$	940,859

The Company uses futures to purchase corn and soy-bean meal, the primary ingredients in the chicken feed. The contracts that effectively meet risk reduction criteria are recorded using hedge accounting. Derivatives that are not hedges are adjusted to fair value through income. No ineffectiveness has been recognized for the six months ended March 31, 2003. The Company expects that gains in the amount of $122,085 recorded as comprehensive income during the three months ended March 31, 2003, will be recognized into costs of production within the next three months.

NOTE 7 – LITIGATION

Pipasa is a defendant in a lawsuit brought in Costa Rica, pursuant to which the plaintiff in such action is seeking damages in an amount equal to $3.6 million. Pipasa was served with prejudgment liens for $1.5 million and, with the approval of the Juzgado Sexto Civil, the court with jurisdiction over the lawsuit, certain parcels of real estate owned by Pipasa have been substituted for such liens. This approval was ratified by the Superior Court on November 11, 1999, and all funds initially attached have been released and returned to Pipasa. Costa Rica law requires the posting of guarantees by a plaintiff seeking prejudgment liens A ruling on these objections is pending. Pipasa has filed several pleadings in opposition to the underlying lawsuit; a ruling on these pleadings also remains pending.

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

In response to the plaintiff’s amended complaint, filed in Miami-Dade Country Circuit Court on May 7, 1999, Pipasa, on July 19, 1999, filed a motion to dismiss for lack of personal jurisdiction. The motion was denied on March 31, 2003. Pipasa has appealed the denial to Florida’s Third District Court of Appeal. No decision is expected for at least until August 2003. Pipasa has also moved in the Circuit Court for a stay of the Circuit Court case pending appeal. The Circuit Court has taken the stay request under advisement. If the court grants a stay, it may also require Pipasa to post a bond, the amount of which would have to be determined.

A separate lawsuit against Pipasa, filed by the same plaintiff in the North District of California and styled Polaris Holding Company v. Corporacion Pipasa, S.A. No. C99-2160 CRB (N.D. Calif.), has been dismissed, without prejudice for plaintiff to refile the action after resolution of the Florida action as well as a similar action, brought by the same plaintiff against Pipasa, that is pending in Costa Rica.

RICA FOODS, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

The Company cannot ascertain the basis of the claim or the relief sought, but believes the lawsuits are without merit and intends to assert an appropriate defense. At the present time, neither the Company nor Pipasa can evaluate the potential impact of this lawsuit on the financial results of the Company, nor can the Company assess the likelihood of an unfavorable outcome.

On January 24, 2003, the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) notified the Company that it was conducting an informal inquiry of the Company. In response to such notification, the Company began providing the Staff information. The Company and the Staff have been in detailed settlement conversations since February 10, 2003.

On August 15, 2003 the Commission filed a settled civil injunctive action against the Company, the Company’s Chief Executive Officer (the “CEO”) and the Company’s Chief Financial Officer (the “CFO”) for violations of the CEO and CFO certification requirements of the Sarbanes-Oxley Act of 2002. The Company, the CEO and the CFO have consented, without admitting or denying the allegations in the Commission’s Complaint, to the entry of a Final Judgment of Permanent Injunction and Other Relief (“Final Judgment”).

According to the Commission’s complaint, on January 13, 2003, the Company filed a Form 10-K annual report with the Commission containing a purported unqualified independent auditor’s report from Deloitte & Touche. The audit report represented that the Company’s consolidated financial statements were presented fairly and in conformity with Generally Accepted Accounting Principles. At the time of the filing, however, Deloitte & Touche had not provided the Company with a signed audit report and, according to the Commission’s complaint, the Company’s financial statements contained material classification errors.

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

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

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

RICA FOODS, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

NOTE 8 – DUE TO STOCKHOLDERS

Since the Company’s inception in 1969 and since 1991, Mr. Chaves and Mr. Quesada, respectively, have personally guaranteed the repayment of the various notes, loans and credit facilities (the “Credit Arrangements”) of the Company and its various operating subsidiaries. As of March 31, 2003, an aggregate of $27.3 million of the Company’s Credit Arrangements were personally guaranteed by Mr. Chaves.

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

For the six months ended March 31, 2003, the Company had paid a Financial Service Fee to Mr. Calixto amounting to $136,863, of which $43,297 Mr. Chaves directed the Company to off-set amounts he owed to the Company. As of March 31, 2003, the Company indebtedness to Mr. Chaves amounted to $93,566, which was originated by the Financial Service Fee.

ITEM 2.

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-Q/A. 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 accounting principles generally accepted in the United States of America (“GAAP”). Management has included in the Company’s consolidated financial statements amounts that are based on estimates and judgments, which it believes are reasonable under the circumstances. The Company maintains a system of internal accounting policies, procedures and controls intended to provide reasonable assurance, at the appropriate cost, that transactions are executed in accordance with the Company’s authorization and are properly recorded and reported in the consolidated financial statements, and that assets are adequately safeguarded.

On March 4, 2003, the Company received notice from the staff of the American Stock Exchange (the “AMEX”) indicating that the Company was not in compliance with Section 1003(d) of the AMEX’s continued listing standards due to having filed a Form 10-K for the period ended September 30, 2002, which did not have a signed Independent Auditor’s Opinion, as well as a Form 10-Q for the period ended December 31, 2002, which was not reviewed by an Independent Auditor. Since such notice, the Company has also filed a Form 10-Q for the period ended March 31, 2003, which was not reviewed by an Independent Auditor.

On July 7, 2003, the Company announced that it received notice from the AMEX indicating the Company is no longer in compliance with certain continued listing standards and that the staff of the AMEX intends to file an application with the Securities and Exchange Commission to strike the Company’s common stock listing and registration on the AMEX. The Company has exercised its right to appeal the decision and has requested a formal hearing to continue its listing on the AMEX. The hearing date has been set for August 26, 2003.

On July 28, 2003, the Company filed Amendment No. 2 to its Form 10-K, which included audited financial statements. On August 19, 2003, the Company also filed amendments to its Form 10-Q for the quarter ended December 31, 2002 and March 31, 2003, each of which were reviewed by the Company’s independent public accountant.

There can be no assurance that the Company’s request for continued listing will be granted. If the Company is unsuccessful in its appeal, the Company will seek to take steps to enable its shares of common stock to trade on the Over-the-Counter Bulletin Board (“OTCBB”), a regulated quotation service that offers real time quotes and volume information in over-the-counter securities. There can be no assurance that the Company’s shares of common stock will be eligible to trade on the OTCBB since, among other things, the Company has not timely filed all of the reports it is required to file pursuant to the Securities Exchange Act of 1934. The Company’s operations are primarily conducted through its 100% owned subsidiaries: Pipasa and As de Oros and their respective subsidiaries. The Company, through its subsidiaries, is the largest poultry company in Costa Rica. As de Oros also owns and operates a chain of quick service restaurants in Costa Rica called “Restaurantes As”

The following discussion addresses the financial condition and results of operations of the Company. This discussion should be read in conjunction with Amendment No.2 to the Company’s Annual Report on Form 10-K/A for the fiscal year ended September 30, 2002 and with the Company’s unaudited consolidated interim financial statements as of March 31, 2003 and for the three and six-month period ended March 31, 2003 and 2002 contained herein.

Results for any interim periods are not necessarily indicative of results for any full year.

Seasonality

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

Environmental compliance

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

During the six months ended March 31, 2003, the Company did not incur any significant costs related to environmental compliance.

Results of operations for the three months ended March 31, 2003 compared to the three months ended March 31, 2002.

For the three months ended March 31, 2003, the Company generated a net loss applicable to common stockholders of $741,840 ($0.06 losses per share), compared to a net income applicable to common stockholders of $436,270 ($0.03 earnings per share) for the three months ended March 31, 2002. For the three months ended March 31, 2003, net sales increased by 0.77% when compared to the three months ended March 31, 2002 Cost of Sales increased by 9.42% mainly due to increases in the cost of imported raw material.

Broiler sales decreased by 10.89% primarily due to a volume decrease of 8.15%. The Company believes that the decrease is mainly due an increase of domestic competition, and a relative reduction in consumer purchasing power due to economic conditions of Costa Rica The profit margin for the Broiler segment decreased from 25.82% to 20.57%, primarily due to an increase in cost of imported raw material.

Animal feed sales increased by 31.13%, mainly due to a volume increase of 34.59%. The Company believes the increase in volume is mainly attributable to an increase in the number of commercial animal feed customers, an increase in and a higher demand of aquaculture and live-stock feed, due to an increase in the commercial activity in this sector of the economy. In addition, pet food products increased due to an increase in distribution channels and sales coverage in new areas. The profit margin for animal feed decreased from 13.75% to 7.99%, mainly due to an increase costs of imported raw material and variations in the sales mix to less profitable products.

Sales of by-products decreased by 3.31% mainly due to a volume decrease of 3.98%. The Company believes the decrease is mainly due to a decrease in production due to the burning of the Company’s by-product processing plant in February 2003. Due to the partial destruction of the by-product production plant by a fire, the Company has been producing its by-products in three rented different facilities from three different companies. The production is administrated and performed in its entirety by the Company. Notwithstanding the fire and the use of these rented facilities, Company has been able to continue producing products that meet its quality standards.

Production costs for by-products are expected to increase by an estimated 15% to 17% for the remainder of fiscal year 2003 due to the cost of renting production facilities from third parties. The Company believes that the plant will return to its full working condition by the end of September 2003. The profit margin for by-products decreased from 15.69% to 8.58%, mainly due to an increase in the costs of imported raw material and incremental costs of renting other facilities

Export sales decreased by 21.37%, mainly due to the discontinuation of broiler exports to Honduras, due to the Honduran government’s restriction of the import of poultry related products. In addition, the Company decreased sales of animal feed products in the aquaculture sector mainly due to the deteriorating credit rating of customers. Profit margin increased from 8.49% to 15.36%, mainly due to a shift in the sales mix to more profitable products sold.

Sales for the quick service segment increased by 17.83%, mainly as a result of a sales price campaign to increase demand of the product. Profit margin decreased from 6.83% to 2.13%, mainly due to sales price reductions.

Sales for the other products segment increased by 37.20% mainly due to an increase in sales of commercial eggs. Segment profit margin did not vary significantly.

Operating expenses decreased by 1.60% for the three months ended March 31, 2003 when compared to the three months ended March 31, 2002. The decrease was primarily a result of the Company’s effort to adopt cost efficient measures in its General and Administrative expenses. Operating expenses represented 26.29% and 26.92% of net sales for the three months ended March 31, 2003 and March 31, 2002, respectively.

Other expenses decreased by 7.43% for the three months ended March 31, 2003, as compared to the three months ended March 31, 2002, mainly due to a decrease in interest expense and foreign exchange loss. The Company’s average indebtedness and average debt interest rate decreased for the three months ended March 31, 2003, when compared to the three months ended March 31, 2002, which result in a decrease in interest expense and foreign exchange loss.

The provision for income tax expense for the three months ended March 31, 2003 amounted to $63,798 compared to $293,929 for the three months ended March 31, 2002. Effective income tax rates decreases from 37.46% to a –10.14%, mainly due to a decrease in the Company’s taxable income.

In December 2002, the government of Costa Rica enacted temporary changes in the income tax law, applicable for the twelve months beginning in January 2003 through December 2003. Such changes provide a temporary increase in the tax rate from 30% to 36%, as part of Costa Rican government’s the solution to decrease the actual governmental deficit. As a result, the composite tax rate for the Company’s fiscal year 2003 is of 34%.

Results of operations for the six months ended March 31, 2003 compared to the six months ended March 31, 2002.

For the six months ended March 31, 2003, the Company generated net income applicable to common stockholders of $313,697 ($0.03 earnings per share), compared to a net income applicable to common stockholders of $2,249,547 ($0.18 earnings per share) for the six months ended March 31, 2002. For the six months ended March 31, 2003, net sales increased by 0.93% when compared to the six months ended March 31, 2003 and cost of sales increased by 7.62% for the same period. Cost of sales increase is mainly due to increases in the costs of imported raw material.

Broiler sales decreased by 13.01% primarily due to a volume decrease of 9.70%. The Company believes that the decrease is mainly due to a combination of a relative reduction in consumer purchasing power due to economic conditions in Costa Rica, which causes a reduction in the consumption of the product of this particular segment and an increase in domestic competition which resulted in a decrease in the number of broiler customers.

To counteract the effects of a decrease in the demand of broiler, the Company offered temporary sales discounts, which resulted in a lower sales price when compared to the six months ended March 31, 2002. The profit margin for the Broiler segment decreased from 26.57% to 22.65%, primarily due to an increase in the cost of imported raw material and a decrease in the average sales prices of broilers.

Animal feed sales increased by 29.25%, mainly due to a volume increase of 31.46%. The Company believes the increase in volume is mainly attributable to an increase in the number of commercial animal feed customers. The profit margin for animal feed decreased from 14.71% to 9.31%, mainly due to an increase costs primarily due to increases in costs of imported raw material.

Sales of by-products increased by 9.69% mainly due to a volume increase of 12.76%. The Company believes the increase in volume is primarily due to an improvement in the quality of the product and an increase in distribution channels, offset by a decrease in production levels, due to the partial damage of the Company’s by-product processing plant by a fire in February 2003. The profit margin decreased from 16.65% to a 13.44%, mainly due to higher production costs.

Export sales decreased by 21.34%, mainly due to the discontinuation of broiler exports to Honduras, due to the Honduran government’s restriction of import of poultry related products and a decrease in the number of aquaculture feed customers. In addition, the Company decreased exports of other products to other countries. Profit margin increased from 10.14% to 15.31%, mainly due to a shift in the sales mix to more profitable products sold.

Sales for the quick service segment increased by 21.55%, mainly as a result of a sales price campaign to increase demand of the product. Profit margin decreased from 8.76% to 5.80%, mainly due to sales price reductions.

Sales for the other products segment increased by 38.21% mainly due to an increase in sales of commercial eggs. Segment profit margin increased from 1.27% to 5.80% due to variations in the sales mix.

Operating expenses decreased by 1.06% for the six months ended March 31, 2003 when compared to the six months ended March 31, 2002. The decrease was primarily a result of the Company’s effort to adopt cost efficient measures in its General and Administrative expenses. Operating expenses represented 25.02% and 25.53% of net sales for the six months ended March 31, 2003 and March 31, 2002, respectively.

Other expenses decreased by 10.63% for the six months ended March 31, 2003, when compared to the six months ended March 31, 2002. The Company’s average indebtedness and average debt interest rate decreased for the six months ended March 31, 2003, when compared to the six months ended March 31, 2002, which result in a decrease in interest expense and foreign exchange loss.

The provision for income tax expense decreased from $735,362 for the six months ended March 31, 2002 to $567,959 for the six months ended March 31, 2003, mainly due to a decrease in taxable income of the Company’s subsidiaries. The effective tax rate increased from 23.77% to 57.67%

Financial condition

Operating activities: As of March 31, 2003, the Company had $3.07 million in cash and cash equivalents. The working capital deficit was $13.88 million and $9.75 million as of March 31, 2003 and September 30, 2002, respectively. The current ratio was 0.74 as of March 31, 2003 and 0.79 as of September 30, 2002.

Cash provided by operating activities amounted to approximately $5.10 million and $4.29 million for the six months ended March 31, 2003 and March 31, 2002, respectively. Although the Company’s net income for the six months ended March 31, 2003 was approximately $1.94 million less than the comparable period ended March 31, 2002, the Company recognized an increase in cash provided by operations primarily due to a reduction in the rate of satisfying Notes and accounts receivable ($1.69 million) and an increase in accounts payable ($1.94 million). The increase in cash provided by operations was tempered by an increase in accrued expenses which utilized approximately $395, 000 more cash in the six months ended March 31, 2003 than in the comparable period ended March 31, 2002.

Cash utilized in investing activities was approximately $2.76 million and $4.7 million in the six months ended March 31, 2003 and 2002, respectively. The Company’s lower utilization of cash for investing activities was principally due to a decrease in the amount of cash utilized for short-term investments ($1.01 million), an increase in the sale of productive assets ($.63 million) and a decrease in the amount of other assets acquired ($.99 million), which decrease was tempered by an increased amount of spending related to property, plant and equipment ($.66 million).

Additions to property, plant, and equipment for the six month period ended March 31, 2003 primarily relate to the reconstruction of the fire-damaged, by-product processing plant and the replacement of production equipment damaged in the by-product plant fire. There was also an increase in cash utilized for other assets investments primarily stemming from the Company’s investment in Logistica de Granos, S.A. (as discussed below).

The Company retired production equipment and processing plant facilities with a net book value amounting to approximately $750,000, from the fire damaged by-product processing plant. Currently, the Company is reconstructing plant facilities and purchasing new production equipment. The Company anticipates that approximately 60% of total reconstruction cost will be covered by insurance. As of the day of this report, the Company has received approximately 44% of cash in advance from the insurance company and estimates that the remaining amount will be received by the end of August 2003. The Company believes that it will need funds of approximately $1.4 million to conclude the reconstruction of the by-product processing plant, and anticipates that approximately 57% of the anticipated $1.4 million investment will be covered by insurance and the remaining needed funds will be provided by external financing sources and the Company’s operating cash flow.

On February 20, 2003, Port Ventures, S.A. (“Port Ventures”) and Corporacion As de Oros, S.A. (“As de Oros”), a wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the “Agreement”), pursuant to which As de Oros agreed to acquire from Port Ventures, 2,040 shares of common stock of Logistica de Granos, S.A. (“Logistica”), representing 51% of the issued and outstanding shares of capital stock of Logistica (the “Shares”), for a purchase price of US$2,580,000 (the “Purchase Price”). Logistica is the owner of 19% of the issued and outstanding capital stock of Sociedad Portuaria de Caldera, S.A. (“SPC”) and Sociedad Portuaria Granelera de Caldera, S.A. (“SPGC”) (collectively, the “Port Companies”). The Port Companies are seeking to acquire concessions (the “Concessions”) being granted by the Government of Costa Rica to refurbish and operate Puerto Caldera, a major seaport located on the Pacific coast of Costa Rica and considered by the Company as strategic to its raw material purchases.

Port Ventures is the sole shareholder of Logistica and Port Ventures is directly owned and controlled by Jose Pablo Chaves Zamora (“Mr. JP Chaves”). Mr. JP Chaves is the indirect holder of approximately 2.17% of the outstanding shares of the Company. Mr. JP Chaves is also the son of the Company’s Chief Executive Officer, Mr. Calixto Chaves. Mr. JP Chaves does not hold any positions or titles with the Company or any of its subsidiaries.

The closing of the purchase and sale of the Shares is subject to: (i) the final grant by the Government of Costa Rica of the Concessions and (ii) the execution of definitive agreements between the Government of Costa Rica and each of the Port Companies regarding the construction and operation of Puerto Caldera.

The Agreement provides that Port Ventures may require that As de Oros remit the Purchase Price for the Shares in installments, prior to the fulfillment of the conditions to closing set forth above. Upon such payment, As de Oros will receive a “bill of exchange” for the amount of such Purchase Price and a pro rata amount of shares will be issued and held by a Trust representing all participants in the Port Companies in escrow until the closing. In the event that the transactions contemplated under the Agreement are not closed, Port Ventures must return to As de Oros the pro rata portion of the Purchase Price paid, plus interest, and As de Oros, must return the bills of exchange. If Port Ventures does not return the portion of the Purchase Price paid, As de Oros may, in its discretion, seek to enforce the “bill of exchange”.

As of July 8, 2003, As de Oros has remitted approximately 55% of the Purchase Price to Port Ventures (the “Remitted Payment”) in exchange for bills of exchange. The bills of exchange are not secured by tangible assets or readily marketable collateral. In the event the Concessions are not ratified to the Port Companies, the Company anticipates that As de Oros will have limited ability to recoup its investment in Port Ventures. Port Ventures has agreed for As de Oros not need make any further payments until the Concessions are finally ratified.

The Company expects to close this transaction before calendar year 2003, when the definitive approval of the Government of Costa Rica is expected to be obtained

In addition, the Company believes for the remainder of fiscal year 2003, it will invest in approximately $2.5 million of additional property, plant and equipment, of which approximately $1.4 million is related to reconstruction of the further processing plant.

Cash used for financing activities for the six months ended March 31, 2003 amounted to $2.90 million compared to cash used for financing activities amounting to $1.57 million during the six months ended March 31, 2002. For the six months ended March 31, 2003, the Company retired $15.04 million of short-term and long-term debt compared to $17.41 million for its comparable period during fiscal year 2002. Included in the amount of cash used by financing activities is the required principal payment of $4.0 million paid by the Company to Pacific Life Insurance Company on January 15, 2003, thereby reducing the outstanding amount to $8 million from an original $20 million.

The Company owns virtually all of the property, plant and equipment it uses in its production facilities and financial headquarters in Costa Rica, of which some assets are pledged as security for the credit facilities aggregating to $7.3 million. In addition, $1.5 million of assets are being pledged as collateral for the Polaris litigation. The Company leases or rents the majority of the assets it uses in its distribution and retail operations. The Company has operating leases for vehicles, equipments and building facilities for its restaurants and retail outlets.

The Company has been reliant and continues to rely upon cash from operations, short-term bank lines of credit, vendor financing, and long-term debt to provide cash to finance its operational, investing and financial activities.

Short-Term Debt

As of March 31, 2003, the Company had arranged 8 short-term lines of credit and commitments (the “Lines of Credit”) with banks and raw material suppliers for a maximum aggregate principal amount of $20 million, of which $17.5 million has been utilized.

As of March 31, 2003, Notes payable amounted to $19.61 million, and were due from April 2003 through November 2003 and bear annual interest at rates ranging from 3.62% to 9.50% in U.S. dollars and from 24.00% to 24.75% in Costa Rican colones. As of March 31, 2003, Lines of Credit with a maximum principal balance of $7 million were secured by property with an estimated market value of approximately $2.14 million. The other Lines of Credit are not secured by assets of the Company.

As of March 31, 2003, $7.2 million of the Lines of Credit with raw material suppliers are included in accounts payable on the Company’s balance sheet.

Long-Term Debt

As of March 31, 2003, long-term debt amounted to $18.79 million which $7.85 million in principal amount was due in the short-term. long-term debt is primarily denominated in U.S. dollars and bears interest at rates that range from 2.78% to 11.96% in U.S. dollars and of 24% in colones. As of March 31, 2003, Part of the long-term debt was secured by property valued at $4.8 million. The Company’s long-term debt are due from April 2003 to October 2008.

As a general practice in Costa Rica, banks require high-ranking executives of the companies to serve as guarantors of loans. Accordingly, Mr. Calixto Chaves and/or Mr. Jorge Quesada personally guaranteed (the “Guarantee Services”) the repayment of Lines of Credit, and the Short and Long-Term Bank Lines. As of March 31, 2003, Mr. Chaves and Mr. Quesada had provided Guarantee Services with respect to bank lines with a maximum principal balance of $27 million and $13 million, respectively. The Company believes that it is, and in the near future will be substantially dependent on Mr. Chaves, Mr. Quesada, or another third party to provide the Guarantee Services in order for the Company to secure financing on terms comparable to the terms provided by the Lines of Credit and Long-Term Bank Lines. Neither Mr. Chaves nor Mr. Quesada have an obligation to provide Guarantee Services to the Company in the future.

During the first quarter of 1998, the Company completed a private placement with Pacific Life Insurance Company (“PacLife”) of $20 million in notes payable bearing an annual interest rate of 11.71%, (11.96% beginning in January 2001) and comprised of $8 million in Series A Senior Notes and $12 million in Series B Senior Notes (collectively, the “Notes”). The Notes are not secured by the Company’s assets. However, Pipasa and As de Oros serve as guarantors of the Notes. The principal amount of the Notes is payable in five consecutive annual installments of $4 million each commencing January 15, 2001. Interest is payable semiannually on the unpaid balance until the principal amount is paid in full.

In connection with the issuance of the Notes, the Company entered into certain negative covenants (the “Negative Covenants”) in favor of PacLife. More specifically, among other things, the Company covenanted to refrain from participating in any material transaction, except transactions in the ordinary course of business with arms-length terms with any person (other than a subsidiary) which directly or indirectly through one or more intermediaries controls, is controlled by, or is in common control with the Company (the “Affiliate Covenant”). The Company further agreed that it would not incur additional debt unless that ratio of the Company’s consolidated total debt to the Company’s consolidated earnings before interest, taxes, depreciation, and amortization (��EBITDA”) was less than 3 to 1. (the “New Debt Covenant”). Likewise, the Company agreed to restrict its subsidiaries from incurring any additional debt unless the sum of (i) the total debt outstanding of all subsidiaries and (ii) debt secured by liens does not exceed .5 times the Company’s EBITDA (the “Subsidiary Debt Covenant”). The Company also covenanted that it would not create or incur any lien securing its consolidated total debt unless the sum of (i) the debt secured by such liens and (ii) the debt incurred by the Company’s subsidiaries pursuant to the Subsidiary Debt Covenant would not exceed 0.5 times the Company’s EBITDA (the “Lien Covenant”). The Notes contain a provision requiring the Company to pay PacLife a fee in the event the Notes are satisfied prior to their scheduled maturity.

The Company has paid PacLife all required principal and interest payments due under the Notes in accordance with the term of the Notes.

As of January 14, 2002, the Company obtained a waiver of certain possible breaches of the Negative Covenants contained in the Amended and Restated Note Purchase Agreement dated December 28, 2001, among Rica, Pipasa, As de Oros, and PacLife (the “Amended Agreement”). The potential breaches did not involve any payment violation. The Company has made all required payments to PacLife, including a payment of $4.96 million of principal and interest in January 2002, a payment of $750,000 of interest in July 2002 and a payment of $4.7 million of principal and interests on January 15, 2003. Thereafter, the principal amount of Notes was being reduced to $8 million.

Pursuant to the terms of the Amended Agreement, the Company is obligated to furnish PacLife, within 120 days after the end of each fiscal year, audited financial statements for the preceding fiscal year and an auditor’s certificate indicating that the auditor is not aware of any events of default under the Amended Agreement (the “Financial Certifications”). The auditing firm must be of recognized “national” standing. The Company was unable to provide the Financial Certifications to PacLife by February 27, 2003.

As of March 31, 2003 the Company was not in compliance with the Lien Covenant, Financial Certification requirement and the Affiliate Covenant. On July 9, 2003, PacLife granted the Company a conditional waiver with respect to the Company’s breach of the Affiliate and Lien Debt Covenants as of March 31, 2003. As a condition of the waiver of the Affiliate Covenant, the Company has agreed that the aggregate amount of loans to affiliates shall not be increased at any time, and, if any of such loans are repaid, neither the Company nor any of its subsidiaries shall make any additional affiliate loans.

On May 5, 2003, Pacific Life granted the Company with a conditional waiver for the provision of the Financial Certifications, which was conditioned upon the Company delivering the Financial Certifications to PacLife no later than July 31, 2003. The Company delivered the Financial Certifications to PacLife prior to the July 31, 2003 deadline. Accordingly, the Company has regained compliance with the Financial Certification provision.

As of June 30, 2003, the Company was not in compliance with Lien Covenant and the Affiliate Covenant of the Amended Agreement. On August 18, 2003, the Company requested from PacLife a waiver with respect to the Company’s breach of the Lien Covenant and the Affiliate Covenant.

PacLife has confirmed that upon the satisfaction of the usual conditions precedent as contained in past waivers of defaults, PacLife agrees to waive an event of default associated with the Lien Covenant and the Affiliate Covenant. The conditions precedent to the effectiveness past waivers of default include: the execution and delivery of the waiver by each party thereto, PacLife’s receipt of various officer certificates, the Company’s payment of PacLife’s reasonable legal fees incurred in connection with the waiver.

If the requested waivers are not secured for any reason, the Company may be deemed to be in technical default of the Amended Agreement and, if so, PacLife will have the right to declare all of the outstanding Notes immediately due and payable and demand immediate payment of the entire unpaid principal amount of the Notes, all accrued and unpaid interest and a yield maintenance amount. The Company could be materially adversely impacted if the payment of the Notes was accelerated by PacLife for any reason.

As of March 31, 2003, the Company’s short term (within one year) payment obligations under short-term and long-term debt and operating leases were as follows:

Short-term debt	$	19,611,312
Long-term debt		7,847,068
Leases		836,128

Total	$	28,294,508

The Company projects that as of March 31, 2003, it will need to satisfy at least $1 million of short-term debt, long-term debt and capital lease payments within the next twelve months. The Company also projects that it will seek to acquire the use of approximately an additional $2.5 million of property, plant and equipment within fiscal 2003, the use of which equipment may be secured by purchase or leased. Aside from cash generated from operations and the financing sources previously described, the Company has not secured financing to satisfy the Company’s projected capital needs.

The Company expects to continue to generate cash from operations and has been seeking to conserve its capital resources by leasing and renting items of property, plant and equipment. The Company has used lines of credit as a means of financing for more than 25 years, and has historically been able to increase limits on its lines of credit when necessary.

Although the Company has been exploring more cost efficient and longer term sources of capital, the Company has not yet secured an alternative long-term financing source that would insulate it from the risks associated with a loss of one of its relatively short-term capital sources. Nevertheless, management expects that there will be sufficient resources available to meet the Company’s cash requirements for the next 12 months.

Potential Acquisitions

The Company is continuing to explore the acquisition of majority of the outstanding common stock of Industrias Avicolas Integradas, S.A. (“Indavinsa”), and Avicola Core Etuba Ltda. (“Core”), both engaged in the production and distribution of poultry. The Company is closely evaluating the performance of these companies to determine if, when and how the Company should integrate its business with the acquisition targets, and has postponed indefinitely investments in these two companies.

The Company expects to close this transaction before calendar year 2003, when the definitive approval of the Government of Costa Rica is expected to be obtained.

As of July 8, 2003, As de Oros has remitted approximately 55% of the Purchase Price to Port Ventures (the “Remitted Payment”) in exchange for bills of exchange. The bills of exchange are not secured by tangible assets or readily marketable collateral. In the event the Concessions are not ratified to the Port Companies, the Company anticipates that As de Oros will have limited ability to recoup its investment in Port Ventures. Port Ventures has agreed for As de Oros not need to make any further payments until the Concessions are finally ratified.

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

Critical Accounting Policies

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

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

Contingent liabilities: We account for contingencies in accordance with SFAS No. 5, “Accounting for Contingencies” which requires that we record an estimated loss from a loss contingency when information available prior to issuance of our financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Management’s judgment is based on a review of all cases brought against it in collaboration with the Company’s internal and external legal counsel to determine the amount of any claims and the likelihood that such claim will be successful. Accounting for contingencies such as environmental and legal matters requires us to use our judgment. The outcome of some of these cases and the monetary or other awards can be very difficult to estimate, so that an error in the estimate can have very significant, but unpredictable effects on the Company.

Provision for severance pay: At the present time, labor laws in Costa Rica require all companies in Costa Rica to make a payment equivalent to 5.6% of an employee’s yearly gross salary for every year of employment, as part of a severance payment upon the termination of an employee. The Company deposits every month 5.33% of each employee gross salary, of which 1.33% is paid every February of each year, and the remaining 4% deposited in ASERICA is paid upon termination. Amounts paid or transferred to ASERICA may not completely cover the severance payment at the time the employee leaves, since the severance payment calculation is based on the average of the last 6 months’ salary. Any remaining amount owed by the Company must be settled when the employee is terminated. The Company must assess the adequacy of the provisioned amount, which is estimated using historical experience and other critical factors. The assumptions used to arrive at provisioned amounts are reviewed regularly by management. However, actual expenses could differ from these estimates and could result in adjustments to be recognized.

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

Allowance for doubtful accounts: The allowance for doubtful accounts reflects estimated losses resulting from the inability to collect required payments from our customers. The allowance for doubtful accounts is based on management’s review of the overall condition of accounts receivable balances and review of significant past due accounts. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

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

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

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

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

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

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

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

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

Foreign Exchange Risk

The subsidiaries of the Company operate in Costa Rica and are exposed to market risk from changes in U.S. currency exchange rates. Foreign exchange risk derives from the fact that the Company makes its payments in U.S. dollars for the majority of its imported raw materials and bank facilities, and its revenues are mostly denominated in colones. The Company does not currently maintain a trading portfolio and does not utilize derivative financial instruments to manage such risks. To mitigate its exposure to variations in devaluations, the Company periodically increases sales prices of some of its products during the year, varies the product mix to those with higher profit and seeks efficiencies in its costs. In addition, the company seeks to increase its exports sales. For the six months ended March 31, 2003, export sales decreased by 21.34% when compared to the six months ended March 31, 2002, which was mainly due to the discontinuation of broiler exports to Honduras, due to the Honduran government restriction of import of poultry related products and a decrease in customer of aquaculture feed.

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

As of March 31, 2003, the Company had outstanding indebtedness of approximately $38.4 million denominated in U.S.dollars. The potential foreign exchange loss resulting from a hypothetical 10% increase for the six months ended March 31, 2003 in the devaluation of the colon/dollar exchange rate would be

approximately $197,600. This loss would be reflected in the balance sheet as increases in the principal amount of its dollar-denominated indebtedness and in the income statement as an increase in foreign exchange losses, reflecting the increased cost of servicing dollar- denominated indebtedness. This analysis does not take into account the positive effect that the hypothetical increase would have on accounts receivable and other assets denominated in U.S. dollars.

Interest Rate Risk

As of March 31, 2003, the Company had outstanding a total of approximately $38.38 million in loans, of which $30.38 million bore variable interest rates, based on LIBOR or Prime Rate. A hypothetical, simultaneous and unfavorable change of 10% in the Company’s variable rate in effect for the six months ended March 31, 2003, would result in a potential increase in interest expense of $161,000. The sensitivity analysis model may overstate the impact of the Company’s interest rate risk, as uniform increases of all interest rates applicable to its financial liabilities are unlikely to occur simultaneously.

Commodity Risk

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

The Company purchases its corn through the Chicago Board of Trade (“CBOT”) and has been actively hedging its exposure to corn price fluctuations since 1991. The Company’s strategy is to hedge against price increases in corn and soybean meal, and it is not involved in speculative trading. Contract terms range from one month to six months. The Company buys directly from the spot market if market conditions are favorable, but as a general rule, the Company purchases most of its corn through contracts. The Company’s hedging strategy is set in its annual budget, which determines how much corn and soybean meal the Company will need and the price the Company must pay in order to meet budget forecasts. The Company uses an internal pricing model to prepare sensitivity analyses. The Company bases its target prices on the worst-case price assumptions (i.e. high prices). The prices paid by the Company for corn and soybean meal were 0.52% and 1.92% above its budgeted prices, respectively, for the six months ended March 31, 2003. The Company purchases its soybean meal through a company in Costa Rica, INOLASA, in which the Company holds a 10% equity interest. In Costa Rica, there is an applicable 5% tax for soybean meal imports, which is not levied if such imports are purchased through INOLASA. If for any reason INOLASA cannot deliver the soybean meal to the Company, the Company can buy its soybean meal directly from the CBOT. Thus far, the Company has never had to purchase soybean meal directly from the CBOT.

The Company accounts for its futures transactions in accordance with the Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities”. The contracts that effectively meet risk reduction criteria are recorded using hedge accounting. Derivatives that are not hedges are adjusted to fair value through income. No ineffectiveness was recognized on cash flow hedges for the six months ended March 31, 2003. The Company expects that gains in the amount of $122,085 recorded in other comprehensive loss for the three months ended March 31, 2003, related to cash flow hedges, will be recognized within the following 3 months. The Company generally does not hedge anticipated transactions beyond 6 months.

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.

For the six months ended March 31, 2003, a hypothetical 10% increase in the monthly price of corn and soybean meal would have resulted in an increase in cost of sales of approximately $1.33 million.

ITEM 4.

CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Sections 13a-14^© and 15d-14^© of the Securities Exchange Act of 1934, as amended). Based upon that evaluation, the Company’s Chief Executive Officer and its Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

(b) Changes in Internal Controls

There were no significant changes in the Company’s internal controls or other factors that could significantly affect these controls subsequent to the date of their evaluation.

PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Please see Note 7: Litigation of the Notes to Unaudited Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report which text is incorporated herein by reference

ITEM 2.

CHANGES IN SECURITIES AND USE OF PROCEEDS

Not Applicable

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4.

SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable

ITEM 5.

OTHER INFORMATION

Listing on American Stock Exchange

Although the Company’s common stock is listed on the American Stock Exchange (“AMEX”) under the symbol RCF, trading of the Company’s common stock on the AMEX has been halted. The Company has been advised by the AMEX that trading of the Company’s common stock on the AMEX will be halted at least until the Company has filed with Securities and Exchange Commission consolidated financial statements for fiscal 2002 that include a signed audit report and Quarterly Reports for the first two quarters of fiscal year 2003, reviewed by an independent auditor. On March 4, 2003, the Company received notice from the staff of the American Stock Exchange (the “AMEX”) indicating that the Company was not in compliance with Section 1003(d) of the AMEX’s continued listing standards due to having filed a Form 10-K for the period ended September 30, 2002, which did not have a signed Independent Auditor’s Opinion, as well as a Form 10-Q for the period ended December 31, 2002, which was not reviewed by an Independent Auditor. Since such notice, the Company has also filed a Form 10-Q for the period ended March 31, 2003, which was not reviewed by an Independent Auditor.

ITEM 6.

EXHIBITS AND REPORTS ON FORM 8-K

The following exhibits are filed with this report.

Exhibit No.		Exhibit Description

3.1		Amended and Restated Articles of Incorporation (1)

3.2		Amended and Restated Bylaws of the Company (2)

4.1		Amended and Restated Note Purchase Agreement, dated December 28, 2000, by and among the Company, Corporacion Pipasa, S.A., Corporacion As de Oros, and Pacific Life Insurance Company (1)

10.1		Promissory Note, dated March 1, 2002, from Inversiones La Ribera to Corporacion Pipasa, S.A. (1)

10.2		Promissory Note, dated March 1, 2002, from Inversiones La Ribera to Corporacion Pipasa, S.A. (1)

10.3		Promissory Note, dated January 31, 2001, from Inversiones La Ribera to Corporacion Pipasa, S.A. (1)

10.4		Promissory Note, dated May 14, 2002, from Inversiones La Ribera to Corporacion Planeta Dorado (1)

10.5		Promissory Note, dated October 30, 2001, from Inversiones La Ribera to Corporacion Pipasa, S.A. (1)

10.6		Promissory Note, dated October 30, 2001, from Inversiones La Ribera to Corporacion Pipasa, S.A. (1)

10.7		Promissory Note, dated January 31, 2001, from Inversiones La Ribera to Corporacion Pipasa, S.A. (1)

10.8		Promissory Note, dated October 30, 2001, from Inversiones La Ribera to Corporacion Pipasa, S.A. (1)

10.9		Promissory Note, dated May 29, 2001, from Inversiones La Ribera to As de Oros. (1)

10.10		Promissory Note, dated May 29, 2001, from Inversiones La Ribera to As de Oros. (1)

10.11		Promissory Note, dated April 1, 2001, from O.C.C.to Corporacion Pipasa, S.A. (1)

10.12		Promissory Note, dated April 1, 2001, from Atisbos De Belen.to Corporacion Pipasa, S.A. (1)

10.13		Promissory Note, dated April 1, 2001, from Atisbos De Belen.to Corporacion Pipasa, S.A. (1)

10.14		Promissory Note, dated January 31, 2001, from Avicola Core Etuba to Corporacion Pipasa, S.A. (1)

31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

filed herewith

(1)

Incorporated by reference to the Company’s Amendment No. 2 to Form 10-K/A, as filed with the Commission on July 28, 2003.

(2)

Incorporated by reference to the Company’s 10-KSB40, as filed with the Commission on October 13, 1995.

The following is a list of Current Reports on Form 8-K filed during the first, second and third quarters of fiscal 2003:

The Company filed a Current Report on Form 8-K dated November 20, 2002 under Item 5 relating to a press release disclosing the Company’s Fitch rating and the appointment of a new Chief Financial Officer.

The Company filed a Current Report on Form 8-K dated January 13, 2003 under Item 5 relating to the Company’s filing of the Form 10-K for the year ended September 30, 2002 without obtaining a signed audit report from Deloitte & Touche.

The Company filed a Current Report on Form 8-K dated January 23, 2003 under Item 4 relating to the resignation of Deloitte & Touche as the Company’s independent public accountants. The Company subsequently filed Amendment No.1, Amendment No.2 and Amendment No.3 to this Current Report on Form 8-K.

The Company filed a Current Report on Form 8-K dated January 30, 2003 under Item 9 relating to the Chief Executive Officer and the Chief Financial Officer’s inability to make the certifications required by Section 906 of the Sarbanes-Oxley Act in connection with the Company’s filing of Amendment No. 1 to the Form 10-K/A for the year ended September 30, 2002.

The Company filed a Current Report on Form 8-K dated February 19, 2003 under Item 9 relating to the Chief Executive Officer and the Chief Financial Officer’s inability to make the certifications required by Section 906 of the Sarbanes-Oxley Act in connection with the Company’s filing of Form 10-Q for the three months ended December 31, 2002.

The Company filed a Current Report on Form 8-K dated February 21, 2003 under Item 5 relating to the damage of the Company’s by-product plant by a fire.

The Company filed a Current Report on Form 8-K dated April 1, 2003 under Item 4 relating to engagement of services of Stonefield Josephson, Inc as its new independent auditors.

The Company filed a Current Report on Form 8-K dated May 20 2003 under Item 9 relating to the Chief Executive Officer and the Chief Financial Officer’s inability to make the certifications required by Section 906 of the Sarbanes-Oxley Act in connection with the Company’s filing of Form 10-Q for the six months ended March 31, 2003.

The Company filed a Current Report on Form 8-K dated July 7, 2003 under Item 5 relating to the notification from the American Stock Exchange (the “AMEX”) indicating the Company is no longer in compliance with certain listing standards and that the staff of the AMEX intends to file an application with Securities and Exchange Commission to strike the Company’s common stock from listing and registration on the AMEX.

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: August 19, 2003	By:	/s/ CALIXTO CHAVES
		Calixto Chaves Chief Executive Officer

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

Dated: August 19, 2003

/s/ CALIXTO CHAVES

Calixto Chaves

Chief Executive Officer

Dated: August 19, 2003

/s/ GINA SEQUEIRA

Gina Sequeira

Chief Financial Officer

Rica Foods (RCFO) Inactive 10-Q/A2003 Q2 Quarterly report (amended)

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents