10-K 1 d22730e10vk.txt FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003, OR [ ] 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 0-26096 Registrant, State of Incorporation, Address and Telephone Number ---------------------------------------------------------------- THE UNIMARK GROUP, INC. (A Texas Corporation) 1425 GREENWAY DRIVE, SUITE 160 IRVING, TEXAS 75038 (972) 518-1155 IRS Employer Identification Number 75-2436543 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, $0.01 PAR VALUE 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] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [ ] No [X] As of February 18, 2005, the aggregate market value of the Registrant's Common Stock held by non-affiliates of the Registrant was $4,500,466 based on the closing price of the Registrant's Common Stock on the Pink Sheets. The number of shares of the Registrant's Common Stock, par value $0.01 per share outstanding on February 23, 2005 was 21,044,828. DOCUMENTS INCORPORATED BY REFERENCE: Part III of this Form 10-K incorporates certain information by reference from the Registrant's definitive proxy statement to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS The discussion in this Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical facts contained in this report, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties. The actual results could differ significantly and adversely from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors" and "Business," as well as those discussed elsewhere in this report. Statements contained in this report that are not historical facts are forward-looking statements that are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. A number of important factors could cause the actual results for 2004 and beyond to differ materially from those expressed in any forward-looking statements made by us, or on our behalf. These factors include risks relating to our agricultural conditions, our profitability uncertainty, general business risks, our Mexican operations, our financial condition and our common stock. Risks relating to our agricultural risks include the fact that we are dependent upon fruit growing conditions and access and availability of water; that we experience fixed costs and revenue fluctuations and uncertainty of profitability and our business is seasonal. General business risks include the fact that we are subject to risks associated in implementation of our new business strategy; that we face strong competition; that we are subject to governmental and environmental regulations; that we are dependent upon our senior management team; that we had a change in controlling shareholders during 2004 that has substantial control over our company and can affect virtually all decisions made by our shareholders and directors; and we are subject to recent legislative actions and potential new accounting pronouncements. Risks relating to our Mexican operations include the fact that we are subject to the risk of fluctuating foreign currency exchange rates and inflation; that we are subject to governmental laws that relate to ownership of rural lands in Mexico; that labor shortages and union activity could affect our ability to hire and we are dependent on the Mexican labor market; that we are subject to statutory employee profit sharing in Mexico; and that we are subject to volatile interest rates in Mexico which could increase our capital costs. Risks relating to our financial condition include the fact that we may continue to sustain losses and accumulated deficits in the future; that we may lose our net operating loss carryforwards, which could prevent us from offsetting future taxable income in the United States; that we have been unable to file our Form 10-Q quarterly reports for our first, second and third quarters of 2004 with the Securities and Exchange Commission ("SEC"), that the internal control system at one of our Mexican subsidiaries is ineffective and failure to comply with Section 404 of the Sarbanes-Oxley Act of 2002 in a timely fashion may have a negative impact on investor confidence and material information concerning our current operating results and financial condition is therefore unavailable; that if the conditions or assumptions differ from the judgments, assumptions or estimates used in our critical accounting policies, the accuracy of our financial statements and related disclosures could be affected. Risks relating to our common stock include the delisting from the Over-the-Counter Bulletin Board has further reduced the liquidity and marketability of our common stock and may further depress the market price of our common stock; that "Penny Stock" regulations may impose restrictions on marketability of our stock; that our common stock price has been and may continue to be highly volatile and we face legislative actions and potential deregistration. 2 PART I ITEM 1. BUSINESS RECENT DEVELOPMENTS SALE OF OUR JUICE AND OIL BUSINESS SEGMENT Due to the continued unfavorable and volatile worldwide market prices of frozen concentrate orange juice ("FCOJ") that existed over the past several years and negative long-term prospects for the FCOJ market, we explored various strategic alternatives for our juice and oil business segment. In March 2003, we received formal offers from The Coca-Cola Export Corporation, Mexico Branch ("Coca-Cola") to purchase our Victoria juice and oil plant and rescind certain contract rights for the growing and processing of lemons for aggregate cash payments from Coca-Cola of $16.0 million ("the Coca-Cola transaction"). In April 2003, we consummated the portion of the Coca-Cola transaction pertaining to the rescission of all contract rights and obligations for the growing and processing of lemons for an aggregate cash payment of $12.5 million, plus value added taxes. Effective November 2003, we closed the sale of our Victoria juice and oil plant, for a cash payment of $3.5 million, plus value added taxes. In this regard, we retained the approximately 7,100 acres of lemon groves, which included all the land, irrigation systems and related agricultural equipment. As part of the sale agreement we are contractually restricted from industrial processing our lemons and are limited in marketing our lemons solely as fresh fruit until July 30, 2007. In June 2003, we sold our Poza Rica juice plant to an unaffiliated third party for $1.0 million plus value added taxes of $120,000. As a result of divestiture of all of our juice and oil processing facilities and related equipment, we no longer have a juice and oil business segment. Our new agricultural business segment consists of our lemon groves. SALE OF OUR PACKAGED FRUIT BUSINESS SEGMENT On August 31, 2000, we sold to Del Monte Foods Company ("Del Monte") all of our interests in our worldwide rights to the Sunfresh(R), Fruits of Four Seasons(R) and Flavor Fresh(TM) brands, our McAllen, Texas distribution facility, including certain inventory associated with our retail and wholesale club business, and other property and equipment. Separately, we entered into a 5-year supply agreement with Del Monte under which we were contracted to produce chilled and canned citrus products for Del Monte's retail and wholesale club markets. Under the terms of the agreement, Del Monte agreed to purchase minimum quantities of our citrus products at agreed upon prices for sale in the United States. We retained the rights to our foodservice, industrial and Japanese business. Also, we were granted by Del Monte a 5-year license for the rights to the Sunfresh(R), Fruits of Four Seasons(R) and Flavor Fresh(TM) brands for specific areas, including Europe, Asia, the Pacific Rim and Mexico. On August 30, 2004, we sold our packaged fruit business segment to Del Monte in a transaction valued at approximately $11.0 million. The transaction included the sale of all outstanding shares of our Mexican subsidiary, Industrias Citricolas de Montemorelos, S.A. de C.V. ("ICMOSA"). In connection with the transaction, we received at closing, cash of approximately $350,000 and an additional $600,000, less recording expenses of approximately $50,000, in November 2004. As part of the transaction, approximately $7.0 million of defaulted ICMOSA bank debt was transferred and retired, $3.0 million of other liabilities were transferred and the 5-year supply contract and trademark license agreements were terminated. OUR NEW FRESH FRUIT AGRICULTURAL BUSINESS SEGMENT After exploring strategic alternatives, including the sale of the lemon groves, in May 2004, we adopted a new business strategy that includes the growing and marketing of fresh lemons. As such, our current business consists of the growing and marketing of our high quality branded fresh lemons. 3 GENERAL Our company, The UniMark Group, Inc., a Texas corporation, is a producer and marketer of high quality branded fruit with substantially all of its operations in Mexico. The UniMark Group, Inc. was organized in 1992 to combine the packaged fruit operations of a Mexican citrus and tropical fruit grower and processor, which commenced operations in 1974, with UniMark Foods, Inc., a company that marketed and distributed products in the United States. Historically, we have, for operating and financial reporting purposes classified our business into two distinct business segments: packaged fruit and juice and oil. With the sales of our juice and oil division's assets and our packaged fruit business segment, our business for operating and financial reporting purposes now consists solely of our fresh lemon business (agricultural business segment). We now conduct substantially all of our operations through our Mexican operating subsidiary, Grupo Industrial Santa Engracia, S.A. de C.V. ("GISE") and our newly-formed Delaware subsidiary, Sierra Foods, Inc. ("Sierra Foods"). Within our packaged fruit business segment, we focused on niche citrus and tropical fruit products including chilled, frozen and canned cut fruits and other specialty food ingredients. The packaged fruit business segment processed and packaged our products at three processing plants in Mexico, which were located in major fruit growing regions. We utilized independent food brokers to sell our foodservice and industrial products in the United States. Sales to our Japanese consumers were facilitated through Japanese trading companies. PACKAGED FRUIT BUSINESS SEGMENT Recent Development. On August 30, 2004, we sold our packaged fruit business segment to Del Monte in a transaction valued at approximately $11.0 million. The transaction included the sale of all outstanding shares of our Mexican subsidiary, ICMOSA. In connection with the transaction, we received at closing cash of approximately $350,000 and an additional $600,000, less recording expenses of approximately $50,000, in November 2004. As part of the transaction, approximately $7.0 million of defaulted ICMOSA bank debt was transferred and retired and the 5-year supply contract and trademark license agreements were terminated. The following discusses our previous operations, relationship with Del Monte and our business strategies regarding our packaged fruit business segment. General. In our packaged fruit business segment, we focused on niche citrus and tropical fruit products including chilled, frozen and canned cut fruits and other specialty food ingredients. Our packaged fruit operations produced an array of products that included refrigerated cut fruits for retail as well as foodservice sales, individually quick frozen fruits ("IQF") primarily for industrial sales in the United States as well as Japan and pasteurized canned fruits. As discussed below, our retail and wholesale club products in the United States were sold directly to Del Monte pursuant to our 5-year supply agreement and our foodservice and industrial products were typically sold through brokers or distributors. We processed and packaged our products in three plants, which were located in major fruit growing regions in Mexico. Our previous relationship with Del Monte. On August 31, 2000, we sold to Del Monte all of our interests in the Sunfresh(R), Fruits of Four Seasons(R) and Flavor Fresh(TM) brands, as well as related inventory in the United States and our warehouse facility in McAllen, Texas. In connection with this sale, we agreed not to sell any of our products in the United States retail and wholesale club markets distribution channel. Separately, we entered into a 5-year supply agreement in which, Del Monte agreed to purchase minimum quantities of products at agreed upon prices for sale in the United States retail and wholesale club markets. Our sales to Del Monte represented 58.6%, 63.9% and 79.5%, respectively, of our 2001, 2002 and 2003 consolidated net sales. On August 30, 2004, we sold our packaged fruit business segment to Del Monte, which included the sale of all outstanding shares of our Mexican subsidiary, ICMOSA. 4 Previous products. Previously, our principal products were derived from citrus and tropical fruits. We focused on applying our knowledge and expertise of fruit growing and processing capabilities to develop two key product categories: cut fruits and specialty food ingredients. Cut Fruits. Previously, our cut fruit product offerings included: - Chilled fruit. The chilled fruit line included mango slices, red and white grapefruit sections and slices, orange slices, pineapple chunks and a variety of fruit salads. These products were packed for retail, wholesale club and foodservice customers in a variety of presentations. As of September 1, 2000, the retail and wholesale club items are marketed and sold by Del Monte in the United States under the Sunfresh(R) brand. We sold this product line in Mexico under our own brand name, Sunfruit. In early 2003, we began production of a new eight-ounce cup of fresh red grapefruit for Del Monte, which is sold under their Fruit Naturals(R) trade name. - Canned fruit. The canned fruit line included orange and grapefruit segments, as well as citrus and tropical salads packed primarily for retail and wholesale club customers. These products were marketed and sold by Del Monte in the United States retail and wholesale club markets under the Sunfresh(R) brand. - IQF fruit. The frozen line of fruit included melon, mango, orange, grapefruit, papaya, pineapple and various combinations of products are packed for foodservice and industrial customers. Specialty food ingredients. Previously, our specialty food ingredients included: - Citrus segments. We marketed citrus sections packaged in industrial sizes to food and soft drink producers in Japan to enhance the flavor and texture of fruit juices and desserts. - Citrus cell-sacs. We developed a unique processing method that separates cold-peeled citrus fruit into individual juice-containing cell-sacs. These cell-sac products were sold to food and soft drink producers in Japan to enhance the flavor and texture of fruit juices and desserts. SALES AND DISTRIBUTION Prior to the August 30, 2004 sale to Del Monte, our sales and distribution activities were conducted as follows: United States Sales. As of September 1, 2000, we discontinued selling and distributing our retail and wholesale club line of products in the United States with these product lines marketed, distributed and sold exclusively by Del Monte in the United States. Under the terms of the supply agreement with Del Monte, we agreed to produce these canned and chilled citrus products for Del Monte, who agreed to purchase a minimum volume of these products at predetermined prices. The supply agreement had an initial 5-year term. At the expiration of the initial term both parties could agree to renew the agreement. Del Monte is the largest producer and distributor of processed vegetables and fruit products in the United States. Del Monte's products are sold by most retail grocers, supercenters, wholesale club stores and mass merchandisers throughout the United States. Foodservice and Industrial Sales. Foodservice and industrial sales, which were channels excluded from the Del Monte transaction, were managed by a small sales team based in the Dallas, Texas area. Sales to fast food chains, restaurants, hospitals and other foodservice customers were made either directly by us to end-users or through several foodservice brokers and distributors. Industrial sales consisted primarily of IQF sales to industrial users in the United States for re-packing or further processing. We utilized several independent industrial food brokers to sell our products to industrial users in the United States. 5 Japanese Sales. We exported a line of pasteurized citrus products to Japan for use in the food and beverage industries. Although sales to industrial customers in Japan were facilitated through Japanese trading companies, we maintained direct relationships with our major industrial customers. An export sales manager located in Mexico City, who deals primarily with Japanese trading companies, conducted our Japanese exports. European Sales. Previously, we conducted a limited amount of business in Europe. As a result of recent changes in the Eurodollar in relation to the U.S. dollar and Mexican peso, which could have resulted in potential new opportunities, we looked to expand our European business in our cut fruits and specialty food ingredients product offerings. Mexican Sales. As part of the sale to Del Monte in August 2000, Del Monte granted us, under a 5-year license, the rights to sell the Sunfresh(R) brand in specific countries, including Mexico. Initially sales to our Mexico retail and wholesale club customers were made directly to the customer using the Sunfruit brand name. Sales to our customers in Mexico during 2003 were $276,000. The following table shows the amount and percentage of net sales contributed by the various distribution channels for our packaged fruit products during the previous three years:

YEARS ENDED DECEMBER 31, ------------------------------------------------------~~----------~~ ~~2000~~ 2001 2002 2003 ----------------~~----~~ ----------------~~----~~ -----------------~~---~~ NET NET NET SALES PERCENT SALES PERCENT SALES PERCENT -----~~----~~ ------- -----~~----~~ ------- -----~~----~~ ------- (DOLLARS IN THOUSANDS) Packaged Fruit: Retail .......................... $ ~~16,348~~138 500.25% $ ~~138~~158 0.56% $ ~~158~~276 01.60% Del Monte ....................... ~~4,392 13.5~~ 15,860 58.7 16,021 63.9 22,511 80.2 Japan ........................... ~~4,695 14.4~~ 7,339 27.1 5,705 22.8 ~~Wholesale club .................. 2~~3,~~810~~019 810.68 ~~-- -- -- --~~ Foodservice ..................... 2,~~667 8.2 2,~~135 7.9 1,846 7.4 2,069 7.4 Industrial and other ............ 1,~~650 5.1 1,~~560 5.8 1,339 5.3 183 0.6 --------- ------ --------- ------ --------- ------ Total .................. $ 3227,~~562~~032 100.0% $ 2725,~~032~~069 100.0% $ 2528,~~069~~058 100.0% ========= ====== ========= ====== ========= ======

Retail sales. Prior to the Del Monte transaction in 2000, we marketed our products to over 200 regional and national supermarket chains and wholesalers throughout the United States. In conjunction with our own national sales force, we utilized over 50 independent food brokers and distributors to sell our products. Effective September 1, 2000, as part of the Del Monte transaction, we entered into a 5-year supply agreement pursuant to which we produced and sold to Del Monte, for the retail and wholesale club markets, chilled and canned citrus products. Average selling prices under the Del Monte supply agreement were significantly less than those previously charged to the national supermarket chains. This was the result of our elimination of substantially all our United States costs from future periods that were associated with sales and marketing, distribution, accounting functions, interest expense and headcount. Japanese sales. We exported a line of frozen and pasteurized citrus products and juice-containing citrus cell-sac products to Japan for use in the food and beverage industries. Although sales to industrial customers in Japan were facilitated through Japanese trading companies, we maintained direct relationships with our industrial customers. Foodservice sales. Our sales to national restaurant chains, restaurants, hospitals and other foodservice customers were made either directly to or through a limited number of foodservice distributors or by our foodservice sales force. On August 30, 2004, we sold our packaged fruit business segment to Del Monte in a transaction valued at approximately $11.0 million. The transaction included the sale of all outstanding shares of our Mexican subsidiary, ICMOSA. 6 Industrial and other sales. Industrial and other sales consist primarily of IQF sales to industrial users in the United States for re-packing or further processing. We utilized several independent industrial food brokers to sell our products to industrial users in the United States. Distribution. We operated our own trucking fleet to transport finished packaged fruit products from our Mexican manufacturing facilities to Del Monte's distribution center and other cold storage facilities in McAllen, Texas. Products exported to Europe and Japan were shipped directly from Mexico. PROCUREMENT Previously, substantial quantities of the fruit we processed were purchased from third parties. However, our Mexico grapefruit growing operations previously supplied a significant amount of our grapefruit requirements. In addition, we previously purchased grapefruit from growers in the Texas Rio Grande Valley for processing at our former Mexican facilities. Substantially all of the mangos, oranges and melons used in our operations were purchased from third-party growers throughout Mexico. PROCESSING Upon arrival at our Mexico processing plants, fruit was inspected and washed. On the production line, the fruit was peeled and cut into various presentations (slices, sections, chunks and balls). Following this process, some fruits were further processed into juice-containing cell-sacs. In addition, some processed fruits were frozen utilizing our IQF process. Other processed fruits were transferred directly into bulk storage or final product packaging (jars and cans). After further processing, the juice-containing cell-sacs were canned while the frozen products were packaged into plastic bags or trays. Our ICMOSA plant was our primary plant and served as the hub for our other two Mexican processing plants. All of our products were labeled and packaged for final shipment at each of our plants. DISCONTINUED JUICE AND OIL BUSINESS SEGMENT Recent Developments. Due to the continued unfavorable and volatile worldwide market prices of FCOJ that existed over the past several years and negative long-term prospects for the FCOJ market, we explored various strategic alternatives for our juice and oil business segment. In March 2003, we received formal offers from Coca-Cola to purchase our Victoria juice and oil plant and rescind certain contract rights for the growing and processing of lemons for aggregate cash payments from Coca-Cola of $16.0 million. In April 2003, we consummated the portion of the Coca-Cola transaction pertaining to the rescission of all contract rights and obligations for the growing and processing of lemons for an aggregate cash payment of $12.5 million. Effective November 2003, we closed the sale of our Victoria juice and oil plant, for a cash payment of $3.5 million, plus value added taxes. In this regard, we retained the approximately 7,100 acres of lemon groves, which included all the land, irrigation systems and related agricultural equipment. As part of the sale agreement we are contractually restricted from industrial processing our lemons and are limited in marketing our lemons solely as fresh fruit until July 30, 2007. In June 2003, we sold our Poza Rica juice plant to an unaffiliated third party for $1.0 million plus value added taxes of $120,000. As a result of divestiture of all of our juice and oil processing facilities and related equipment, our juice and oil business segment has been discontinued. In August 2004, we began marketing our lemons in the fresh markets of the United States. OUR NEW AGRICULTURAL BUSINESS SEGMENT BACKGROUND In 1998, we entered into a twenty-year Supply Agreement with an affiliate of The Coca-Cola Company ("Coca-Cola") for the development of an 8,650 acre lemon project. Pursuant to the terms of this agreement, Coca-Cola was obligated to purchase all of the production from the project at pre-determined prices and provide us, free of charge, with the necessary lemon seedlings. 7 Our planting program began in November 1996. Our groves were initially planted with approximately 800,000 lemon trees. Pursuant to the terms of the supply contract, Coca-Cola provided us, free of charge with approximately 765,000 lemon tree seedlings that were used for planting approximately 6,023 acres. Also, we operate our own nursery where young seedlings are prepared for planting, which provided us with the remaining 35,000 trees, as well as acting as a source of replanting for damaged trees. In March 2003, we received formal offers from Coca-Cola to purchase our Victoria juice and oil plant and rescind the contract rights pertaining to the lemon project for aggregate cash payments from Coca-Cola to us of $16.0 million. In connection with the Coca-Cola transaction, we elected to cease active cultivation of recently planted lemon tree seedlings and used some for replanting of damaged trees. In October 2004, we commenced actively cultivating the plantings that were abandoned in 2003. In April 2003, we consummated the portion of the Coca-Cola transaction pertaining to the rescission of all contract rights and obligations for the growing and processing of lemons for an aggregate cash payment of $12.5 million. In this regard, we retained our lemon groves, which included all the land, irrigation systems and related agricultural equipment. As part of the sale agreement we are contractually restricted from industrial processing our lemons and are limited in marketing our lemons solely as fresh fruit until July 30, 2007. OUR GROVES Our two lemon groves, "El Cielo" and "Flor de Maria," are nestled in the foothills of the Sierra Madre Oriental Mountains in northeast Mexico. The locations of the groves were determined based upon the favorable climatic and citriculture considerations of the region. The groves span approximately 7,100 acres. STRATEGY We believe that Mexico's favorable climate and soil conditions, coupled with competitive labor and land costs, offer significant opportunities to grow high quality fresh fruit in a cost-effective manner. In this regard, our strategic objective is to become a significant multi-national grower and marketer of high quality branded fresh fruit. To achieve these objectives, the key elements of our growth and operating strategies are as follows: - Quality and consistency of our products through vertical integration and scientific farming practices. We intend to continually investigate and experiment to develop enhanced citricultural practices in order to improve the yields of our groves and the quality of fruit it produces. - Growth through leveraging our lemon platform into complimentary product lines. Once we have established a proven distribution channel for our fresh lemons, we intend to procure and market complimentary fresh produce. - Develop a brand to allow for the recognition of our quality products and services by the major grocery chains and food service distributors; and - Develop a global sourcing and logistics network to provide customers high quality fresh produce. Grove Production Cycle. Our grove production cycle begins each year in December, after completion of the harvest. From December through June our trees will be pruned and cultivated. Irrigation systems and other grove components will be repaired or refurbished. Herbicides are applied as needed until harvest. Necessary applications of pesticides begin in the winter and continue until harvest. Our fertilization program is tailored to meet the specific demands of each particular lot in each of the groves. Grafting and planting also generally take place in the first four months of the year. Depending on the rate at which fruit ripens, next year's harvest is anticipated to begin in early July and should be completed by the end of December. 8 Picking and Pre-Selection. In 2004, we commenced picking our lemons for the fresh market in late July. Fruit is selected for picking by size and color, harvested by hand, and placed into field containers. The full containers are then transported to the drenching area at the groves to be washed, cleaned and run through a custom designed water-drenching system. Packing. Presently, we outsource our packing operations. We entered into a one-year agreement with Heald's Valley Farms of Edinburg, Texas to pack our lemons in compliance with high quality control and food safety standards. At the packinghouse the lemons are de-greened, re-washed, cleaned, waxed and dried for final packing. The fruit is separated into grades by color and blemish grade. Final check graders monitor the accuracy of the separations before the fruit is sized, packed and palletized for sale. Sales and Marketing. Our lemon sales are made either directly to or through a limited number of produce brokers and distributors. EMPLOYEES As of January 1, 2005, we employed approximately 50 permanent and 90 seasonal farm workers in our lemon groves. In addition, during the harvest season we employ up to 500 seasonal farm workers. All Mexican companies, including ours, are required to pay their permanent employees, in addition to their agreed compensation benefits, statutory profit sharing in an aggregate amount equal to 10% of taxable income, as adjusted to eliminate most of the effects of Mexican inflation, calculated for employee profit sharing purposes, of the individual corporation employing such employees. As a result of losses for income tax purposes at our Mexican subsidiaries over the past several years, we have not had to pay any statutory profit sharing. None of our employees are represented by labor unions. Our corporate office is located in the Dallas, Texas area and consists of seven full time employees. ITEM 2. PROPERTIES PACKAGED FRUIT BUSINESS SEGMENT GROVES To ensure the availability of the highest quality raw materials, we owned or operated several citrus groves in Mexico. We believed that Mexico's favorable climate and soil conditions, coupled with competitive labor and land costs, offered significant opportunities to grow high quality fruits in a cost-effective manner. Previously, a large portion of our raw materials were provided by growers under various arrangements, including operating agreements and individual fixed price contracts. The following table sets forth the various agricultural groves associated with the packaged fruit operations prior to the sale to Del Monte on August 30, 2004:

~~2000~~PROPERTY ~~2001~~NAME ~~2002~~LOCATION ACREAGE CROP INTEREST ---- -------- ------- ~~Metric~~---- ~~tons~~-------- 96Loma 3Bonita Grove........... Loma Bonita,~~800~~ 3Oaxaca,~~348~~ ~~Billed~~Mexico ~~revenue~~190 $acres 13White grapefruit Leased Villa Azueta I Grove........ Villa Azueta,~~000~~ $Veracruz, ~~560~~Mexico 84 acres None Leased Villa Azueta II Grove....... Villa Azueta,~~000~~ $Veracruz, ~~475~~Mexico 216 acres None Owned Azteca Grove................ Montemorelos,~~000~~ White and rio red Nuevo Leon, Mexico 144 acres grapefruit Leased Las Tunas Grove............. Isla, White and pink Veracruz, Mexico 120 acres grapefruit Leased

9 PACKAGED FRUIT BUSINESS SEGMENT FACILITIES The following table sets forth the principal processing facilities that were associated with our packaged fruit business segment prior to the sale to Del Monte on August 30, 2004:

~~PROPERTY~~APPROXIMATE ~~NAME~~SQUARE ~~LOCATION~~PLANT ~~HECTARES~~PLANT ~~ACREAGE~~LOCATION ~~CROP~~FOOTAGE INTEREST ----- -------- -------- ------- ---- -------- ~~Gomez~~ICMOSA ~~Farias, (A) Tamaulipas, El Cielo Grove~~ Plant................. ~~Mexico 725 1~~Montemorelos,~~791~~ ~~Italian~~Nuevo ~~lemons Owned Cd. Valles~~Leon, ~~San Luis Potosi~~80,000 ~~Flor~~Owned deMexico ~~Maria~~IHMSA ~~Grove~~Plant.................. ~~Mexico~~Montemorelos, 2Nuevo Leon,~~146~~ 540,~~301~~000 ~~Italian lemons~~ Leased ~~------~~Mexico ~~-----~~Puebla ~~Total~~Plant................. 2Tlatlauquipec,~~871~~ 7Puebla,~~092~~ ~~======~~Mexico ~~=====~~50,000 Owned

LEMON GROVES As of December 31, 2003, our lemon groves consisted of the following:

~~PROPERTY~~GROVE ~~NAME~~GROVE LOCATION HECTARES (1) ACREAGE ~~CROP~~(1) INTEREST ----- -------------- ------------ ----------- -------- PACKAGED FRUIT GROVES Loma Bonita Grove........... Loma Bonita, Oaxaca, Mexico 190 acres White grapefruit Leased Las Varas Grove(1) (2)...... Loma Bonita, Oaxaca, Mexico 642 acres Pineapple Leased Villa Azueta I Grove (1) Villa Azueta, (3) ...................... Veracruz, Mexico 84 acres Pineapple Leased Villa Azueta II Grove (1) Villa Azueta, (4)....................... Veracruz, Mexico 610 acres Pineapple Owned Azteca Grove (5)............ Montemorelos, White and rio red Nuevo Leon, Mexico 144 acres grapefruit Leased Las Tunas Grove............. Isla, White and pink Veracruz, Mexico 120 acres grapefruit Leased LEMON GROVES El Cielo Grove ............. Gomez Farias, Tamaulipas, Mexico 725 1,791 ~~acres Italian lemons~~ Owned Flor de Maria Grove......... Cd. Valles, San Luis Potosi, Mexico 2,146 5,301 ~~acres Italian lemons~~ Leased (2)

(1) One hectare equals approximately 2.47 acres. (2) The Flor de Maria grove lease is a 30-year land lease. The property rights associated with the lease were acquired in 1999 from a group of local Mexican landowners, whom acquired the land under the "Ejido" system of land ownership. The lease and purchase price of approximately $1.9 million were prepaid. In late 2001, we formally entered into the 30-year lease agreement with the landowners. Although we are currently in the process of transitioning the lease into a land purchase, we are amortizing the cost over the remaining life of the lease. In connection with transfer of this land, we have received a request from the "Ejido" for the payment of an additional $1.2 million ($12.6 million Mexican pesos). ITEM 3. LEGAL PROCEEDINGS As a result of the decline in the worldwide market prices of FCOJ, during 2000 we decided to discontinue operating a juice processing facility in Mexico that had been leased from Frutalamo under the terms of deposit, operating and stock purchase agreements entered into in December 1996. As we were unsuccessful in negotiating a settlement with Frutalamo to terminate such agreements, we wrote off a previously recorded non-refundable deposit of $1.5 million and recorded a cancellation fee of $1.0 million, both of which were non-cash charges, which were associated with our discontinued juice and oil business segment. Subsequent to December 31, 2000, Frutalamo and certain of its shareholders initiated legal proceedings in Mexico naming as defendants certain of our Mexican subsidiaries, certain current and former employees, officers and directors of our company and a former contractor. In September 2002, we settled these claims for $125,000 in cash. We have learned that, notwithstanding such settlement, certain claims asserted against us by the Frutalamo Plaintiffs, prior to September 2002, continue to be under review before the Mexican courts. Management denies any wrongdoing in this matter and intends to vigorously contest these claims. The resolution of this matter is not expected to have a material adverse effect on our consolidated financial condition or results of operations. In addition to the matter described above, from time to time our company is engaged in various other legal proceedings in the normal course of business. The ultimate liability, if any, for the aggregate 10 amounts claimed cannot be determined at this time. However, our company, based on the consultation with legal counsel, is of the opinion that there are no matters pending or threatening which could have a material adverse effect on our consolidated financial position or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCK HOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock was quoted on the Over-the-Counter Pink Sheets under the symbol "UNMG.PK." The following table sets forth, for the periods indicated, the high and low sale prices as reported on The Nasdaq National Market, Over-the-Counter Bulletin Board and Pink Sheets over the past two years.

~~APPROXIMATE NUMBER OF APPROXIMATE EMPLOYEES SQUARE~~ HIGH(AS1) ~~OF JUNE 30, NAME LOCATION FOOTAGE 2003~~LOW(1) ~~INTEREST~~ ---- ---~~-----~~ ------- ~~---------------~~Year ~~--------~~ended ~~PACKAGED~~December ~~FRUIT~~31, ~~OPERATIONS~~2002: ~~(7)~~First ~~ICMOSA Plant (1)~~Quarter....................................... ~~Montemorelos,~~0.550 ~~Nuevo~~0.340 ~~Leon,~~Second ~~Mexico~~Quarter...................................... ~~80,000~~0.620 ~~729~~0.320 ~~Owned~~Third ~~IHMSA Plant (3)~~Quarter....................................... ~~Montemorelos,~~0.590 ~~Nuevo~~0.330 ~~Leon,~~Fourth ~~Mexico 40,000 389 Leased Puebla Plant~~Quarter...................................... ~~Tlatlauquipec,~~0.550 ~~Puebla,~~0.220 ~~Mexico~~Year ~~50,000~~ended 82December ~~Owned~~31, ~~JUICE~~2003: ~~AND~~First ~~OIL~~Quarter....................................... ~~OPERATIONS~~0.480 ~~Victoria~~0.450 ~~Juice~~Second ~~and~~Quarter...................................... ~~Oil~~0.330 ~~Plant Cd~~0.330 ~~Victoria,~~Third ~~Tamaulipas, (2)(5)~~Quarter....................................... ~~Mexico~~0.160 ~~65,700~~0.160 ~~115~~Fourth ~~(6) Owned Veracruz Juice Plant (4)~~Quarter...................................... ~~Poza Rica, Veracruz, Mexico 22,900 -~~0-.240 ~~Owned~~0.240

(1) The quotations in the tables above reflect inter-dealer prices without retail markups, markdowns or commissions. Effective at the opening of business on March 15, 2001, our common stock began trading on the Over-the-Counter Bulletin Board under the symbol "UNMG.OB." Prior to March 15, 2001 our common stock was traded on The Nasdaq National Market under the symbol "UNMG." On May 29, 2003, our common stock began trading on the Over-the-Counter Bulletin Board Pink Sheets under the symbol "UNMG.PK." On February 18, 2005, the last reported sale price for our common stock was $0.57. As of February 1, 2005 there were approximately 100 shareholders of record of our common stock and approximately 1,000 beneficial shareholders. We have not paid any cash dividends since inception. There can be no assurance that dividends will ever be paid. Any future determination as to payment of dividends will depend upon our financial condition, results of operations and such other factors, as our Board of Directors deems relevant. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources." 11 ITEM 6. SELECTED FINANCIAL DATA The following table sets forth, for the periods and at the dates indicated, our selected historical consolidated financial data. The selected historical consolidated financial data has been derived from the historical consolidated financial statements and in the case of the fiscal years ended December 31, 2001, 2002 and 2003, should be read in conjunction with such financial statements and the notes thereto included elsewhere herein. Our consolidated operations data for all years presented differ from those previously reported due to the classification of our juice and oil business segment as discontinued operations in 2003.

~~HIGH~~AS ~~LOW~~OF AND FOR THE YEARS ENDED DECEMBER 31, -------------------------------------------------- 1999 2000 2001 2002 2003 -------- ~~Year~~-------- ~~ended~~--------- ~~December~~-------- 31-------- (IN THOUSANDS, ~~2001:~~EXCEPT ~~First~~FOR ~~Quarter~~PER SHARE AMOUNTS) CONSOLIDATED OPERATIONS DATA Net sales..................................... $54,070 $32,528 $27,032 $25,069 $28,316 Gross profit.. 0.~~688 0~~.~~500~~.............................. ~~Second~~7,937 ~~Quarter~~2,238 636 556 1,351 Impairment of long-lived assets............... -- -- -- 2,516 5,243 Loss from operations.......................... 0(7,253) (8,756) (3,143) (5,045) (6,018) Loss from continuing operations.~~670~~.............. 0(10,691) (7,026) (2,417) (6,391) (8,303) Loss from discontinued operations.~~370~~............ ~~Third~~(2,305) ~~Quarter~~(4,337) (6,348) (1,551) (1,644) Net loss...................................... (12,996) (11,363) (8,765) (7,942) (9,947) Basic and diluted loss per share: Continuing operations (0.80) (0.~~580~~51) (0.~~380~~14) ~~Fourth~~(0.31) ~~Quarter~~(0.39) Discontinued operations (0.17) (0.31) (0.36) (0.07) (0.08) ------- ------- ------- ------- ------- (0.97) (0.82) (0.50) (0.38) (0.47) ------- ------- ------- ------- ------- Basic and diluted weighted average shares..... 13,462 13,938 17,618 21,045 21,045 CONSOLIDATED BALANCE SHEET DATA Current assets...................... 0.~~730 0~~.~~350~~........ ~~Year~~30,591 ~~ended~~18,964 ~~December~~17,713 318,027 ~~2002:~~17,246 ~~First~~Current ~~Quarter~~liabilities........................... 35,454 27,423 15,547 17,679 13,833 Working capital (deficit)............ 0.~~550~~........ 0(4,863) (8,459) 2,166 (9,652) 3,413 Total assets.~~340~~................................. ~~Second~~82,352 ~~Quarter~~63,202 50,412 42,775 27,481 Short-term and current portion of long-term debt ...................................... 0.~~620 0~~.~~320~~. ~~Third~~17,384 ~~Quarter~~11,114 5,063 128 12 Short and long-term debt in default........... -- -- -- 6,510 6,235 Long-term debt............................ 0.~~590 0~~.~~330~~.. ~~Fourth~~5,309 ~~Quarter~~5,005 6,851 4,622 4,199 Total debt.................................... 22,693 16,119 11,914 11,260 10,446 Accumulated deficit.. 0.~~550~~........................ 0(23,214) (34,577) (43,342) (51,284) (61,231) Total shareholders' equity.~~220~~................... 40,691 29,328 25,539 17,597 7,650

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RECENT DEVELOPMENTS Our business has changed dramatically. We have sold our juice and oil assets as well as our packaged fruit business. See Item 1 - "Recent Developments - Sale of our juice and oil business segment and sale of our packaged fruit business segment and our new fresh fruit business segment." All costs incurred to plant and maintain our lemon orchards were capitalized and deferred through March 31, 2003. As a result of the rescission of all contract rights and obligation for the growing of lemons in April 2003, these deferred and capitalized orchard development costs were reduced by the $12.5 million sale proceeds, and all remaining costs are being depreciated over their estimated useful lives commencing in the second quarter of 2003. In prior periods, it was determined that these deferred costs would be amortized based on the projected year's yield to total estimated yield over the life of the rescinded supply contract. 12 INTRODUCTION The following discussion should be read in conjunction with the consolidated financial statements and notes thereto, the "Selected Financial Data" and the "Risk Factors" included elsewhere in this Item 7. CONVERSION TO U.S. GAAP We conduct substantially all of our operations through our operating Mexican subsidiaries. ICMOSA was a Mexican corporation whose principal activities consisted of operating citrus processing plants and various citrus groves throughout Mexico. GISE is a Mexican corporation whose principal activities were the operation of two citrus juice and oil processing plants, as well as currently managing our lemon groves. ICMOSA and GISE maintain their accounting records in Mexican pesos and in accordance with Mexican generally accepted accounting principles and are subject to Mexican income tax laws. Our Mexican subsidiaries financial statements have been converted to United States generally accepted accounting principles ("U.S. GAAP") and U.S. dollars. On August 30, 2004, the company sold its packaged fruit business segment to Del Monte, which included all of the outstanding shares of ICMOSA. Unless otherwise indicated, all dollar amounts included herein are set forth in U.S. dollars. The functional currency of the company and its subsidiaries is the U.S. dollar. CRITICAL ACCOUNTING POLICIES The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. We base our estimates and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances, which results in forming the basis for making judgments about the carrying values of our assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. The critical accounting policies described herein are those that are most important to the depiction of our condensed consolidated financial condition and results of operations and their application requires management's most subjective judgment in making estimates about the effect of matters that are inherently uncertain. We believe that the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. ALLOWANCE FOR DOUBTFUL ACCOUNTS In the normal course of business, we extend credit to our customers on a short-term basis. Although credit risks associated with our customers is considered minimal, we routinely review our accounts receivable balances and make provisions for probable doubtful accounts. In circumstances where management is aware of a specific customer's inability to meet their financial obligations to us, a specific reserve is provided to reduce the receivable to the amount expected to be collected. Historically, we do not provide a general reserve. IMPAIRMENT OF LONG-LIVED ASSETS Effective January 1, 2002, we adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("FAS No. 144"), which requires our management to review for impairment its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset's carrying 13 value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. Prior to January 1, 2002, management determined whether any long-lived assets had been impaired based on the criteria established in Statement of Financial Accounting Standards No. 121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be disposed of." The carrying amount of a long-lived asset was considered impaired when the estimated undiscounted cash flow from each asset was less than its carrying amount. In that event, we recorded a loss equal to the amount by which the carrying amount exceeds the fair value of the long-lived asset. Changes in our projected cash flows as well as differences in the discount rate used in the calculation could have a material effect on the consolidated financial statements. INCOME TAXES Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. In assessing the realization of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to our historical operating results, management is unable to conclude on a more likely than not basis that all deferred income tax assets generated through operating losses through December 31, 2003 will be realized. Accordingly, we have recognized a valuation allowance equal to the difference between deferred income tax assets and the deferred income tax liabilities. LEGAL PROCEEDINGS AND LOSS CONTINGENCIES Our company is involved in routine legal and administrative matters that arise from the normal conduct of business. Some of these matters are not within our control and are difficult to predict and often are resolved over long periods of time. We maintain insurance, including directors' and officers' and corporate liability insurance, with third parties to mitigate any loss that is related to certain claims. Loss contingencies are recorded as liabilities in the financial statements when it is determined that we have incurred a loss that is probable and the amount of the loss is reasonably estimable, in accordance with SFAS No. 5, "Accounting for Contingencies." RESULTS OF OPERATIONS The following table sets forth certain consolidated financial data expressed as a percentage of net sales for the periods indicated. The financial information and discussion below should be read in conjunction with the accompanying consolidated statements and notes thereto. The discussion following the table is provided separately for continuing and discontinued operations. In November 2003, with the divesture of our Victoria juice and oil plant, the company discontinued any further operating activities related to our juice and oil business segment. Accordingly, our consolidated statements of operations include the results of operations of our juice and oil business segment in discontinued operations for all periods presented. In addition, as a result of the sale of our packaged fruit business segment in August 2004, these operations also qualify as discontinued operations as they result in the entire business of our packaged fruit business segment and will be reclassified as discontinued operations in our third quarter 2004 consolidated financial statements and have been presented on a pro forma basis (unaudited) in Note 14 of the consolidated financial statements. 14

~~AS OF AND FOR THE~~ YEARS ENDED DECEMBER 31, -------------------------~~--------------------------------~~ ~~1998 1999 2000~~ 2001 2002 ~~---------~~2003 ----~~-----~~ -----~~----~~ ----~~-----~~ ~~--------- (IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)~~ Net sales ..................................... ~~$ 72,311 $ 66,233 $ 45,191 $ 34,216 $ 27,162 Gross profit (loss)~~ ....... 100.0% 100.0% 100.~~.................~~0% ~~16,148~~Cost ~~7,630~~of ~~1,038~~products ~~836~~sold ~~(140) Income (loss) from operations~~ ................. ~~1,758 (9,167) (12,330) (8,207) (7,077) Operating results of certain operations disposed of during 1999: Operating income (loss)~~ ............... 97.6 97.8 95...2 ~~122 (127)~~ -- -- -- ~~Loss on disposal of operations .............~~ -- ~~(1,517)~~ --- -- --- ~~Net~~Gross ~~loss~~profit ......................................... (2~~,965)~~.4 ~~(12,996)~~2.2 ~~(11,363) (~~4.8~~,765)~~ (7Selling,~~942)~~ ~~Basic~~general and ~~diluted~~administrative ~~loss~~expenses ~~per share~~ .........~~.....~~ (014.~~29) (~~0~~.97)~~ (012.~~82)~~3 (07.~~50)~~5 ~~(0.38)~~Impairment ~~Basic~~of ~~and~~long-lived ~~diluted weighted average shares ..... 10,131 13,462 13,938 17,618 21,045 Current~~ assets ......................~~..........~~ $-- ~~39,443~~10.0 ~~$ 30,591 $~~ 18~~,398~~.5 $----- ~~17,713~~----- $----- ~~8,027~~Loss ~~Current~~from ~~liabilities~~operations ........................... ~~36,968 35,454 27,703 15,547 17,679 Working capital (deficit)~~ ......~~...............~~ ~~2,475~~ (~~4,863~~11.6) (~~9,305~~20.1) (21.2~~,166~~) Other income (~~9,652~~expense): ~~Total~~Interest ~~assets~~expense ................................... ~~93,513~~(3.4) ~~82,352~~(1.6) ~~63,202~~(3.6) ~~50,412~~Other 42income (expense),~~775~~ ~~Short-term~~net ~~debt~~ ........................ (0.5) 0.6 (1.~~....~~2) ~~22,417~~Gain ~~22,449~~on ~~15,984~~forgiveness ~~7,680~~of ~~8,657 Long-term~~ debt ........................ 10.6 -- -- Foreign currency translation gain (loss) ........... 0.5 (2.3) (1.0) ----- ----- ----- 7~~,833~~.2 ~~6,207~~(3.3) (5~~,005~~.8) ~~6,851~~----- ----- ----- Loss from continuing operations before income taxes .. (4~~,622~~.4) ~~Total~~(23.4) ~~debt~~(27.0) Income tax expense ................................... 4.5 ~~30,250~~2.1 ~~28,656~~2.3 ~~20,989~~----- ~~14,531~~----- ~~13,279~~----- ~~Accumulated~~Loss ~~deficit~~from continuing operations ......................~~.....~~ (~~10,218~~8.9) (~~23,214~~25.5) (3429.3) Loss from discontinued operations,~~577~~ net of income tax.. (23.5) (~~43,342~~6.2) (~~51,284~~5.8) ~~Total~~----- ~~shareholders'~~----- ~~equity~~----- Net loss ............................................. ~~48,712~~(32.4)% ~~40,691~~(31.7)% ~~29,328~~(35.1)% ~~25,539~~===== ~~17,597~~===== =====

YEAR ENDED 2003 COMPARED TO YEAR ENDED 2002 CONTINUING OPERATIONS NET SALES Net sales consist of packaged fruit and lemons. Packaged fruit sales increased $3.0 million from $25.1 million in 2002 to $28.1 million in 2003, or 12.0%. This sales increase was primarily caused by an increase in sales to Del Monte of $6.5 million from $16.0 million in 2002 to $22.5 million in 2003, or 40.6% and was offset by decreases of 47.4 % in our Japanese sales from $5.7 million in 2002 to $3.0 million in 2003 and a decrease of 31.2% in foodservice and industrial sales from $3.2 million in 2002 to $2.2 million in 2003. Retail sales consist primarily of sales to Del Monte, which includes both retail and wholesale club products. The increase in retail sales was attributable to the timing of our production schedule for our citrus products sold to Del Monte, increased demand and the introduction in early 2003 of their new eight ounce cup of fresh red grapefruit, which is sold under their Fruit Naturals(R) trade name. The decrease in our foodservice sales in 2002 was impacted by our decision in 2000 to reduce product line and product offerings and a decrease in our sales of industrial products. The decrease in our sales to Japan was caused by reduced demand in 2003 from the Japanese trading companies that purchase our citrus products compared to the prior year. Lemon sales amounted to $258,000 in 2003 compared to no sales in 2002 and were insignificant. GROSS PROFIT Gross profit on our packaged fruit sales increased from 2.2% in 2002 to 9.5% in 2003. The gross margin increase was impacted on a positive basis through aggressive cost cutting, favorable fruit purchasing and improved plant efficiencies over the 2002 period. The 2002 period was negatively impacted by a non-cash inventory write-down of $1.1 million associated with our pineapple growing operations, which reduced our 2002 gross margin by 4.4%, as a result of competitive conditions and our decision to discontinue these growing operations. Gross loss on our agricultural business segment for 2003 was $1.3 million. Effective April 2003 with the consummation of the Coca-Cola transaction, we started expensing all costs associated with our lemon groves. Accordingly, this loss represents our orchard operating expenses expensed in 2003, offset by minimal sales. 15 Overall, gross profit as a percentage of net sales increased from 2.2% in 2002 to 4.8% in 2003 due to improved margins in our packaged fruit business segment, but offset by expensing our orchard operating expenses commencing in 2003. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses decreased $1.0 million from $3.1 million in 2002 to $2.1 million in 2003, or 32.3%. This reduction consisted primarily in gains of approximately $1.4 million in 2003 as compared to $200,000 in 2002, recognized from the reversal of previously recorded Mexican deferred profit sharing expenses, as required under generally accepted accounting principles. IMPAIRMENT OF LONG-LIVED ASSETS Impairment of long-lived assets charge of $5.2 million in 2003 represented non-cash charges related to our packaged fruit business segment. These charges resulted from the writing down of certain long-lived assets associated with our pineapple growing operations to estimated value and in our company's decision to explore strategic alternatives for our ICMOSA subsidiary that resulted in the write-down in certain of its long-lived assets by approximately $5.0 million in our fourth quarter of 2003. The 2002 impairment charge of $2.5 million resulted from the non-cash write-down of previously recorded goodwill associated with our lemon groves. INTEREST EXPENSE Interest expense increased $635,000 from $393,000 in 2002 to $1.0 million in 2003, or 161.6% due to interest expense on the Bancomext debt recognized at the default rate, which is payable at twice the stated rate associated with the unpaid notes and expensing the accreted interest on the Fondo de Capitalizacion e Inversion del Sector Rural ("FOCIR") debt which had previously been deferred as part of the costs relating to the development of our lemon groves. OTHER INCOME (EXPENSE), NET Other income (expense), net decreased from net income of $146,000 in 2002 to a net expense of $338,000 in 2003. Both years consist primarily of miscellaneous non-operating income and expense items. FOREIGN CURRENCY TRANSLATION LOSS Foreign currency translation loss, which decreased from a net loss of $581,000 in 2002 to a net loss of $269,000 in 2003, results primarily from the re-measurement of our foreign subsidiary's financial statements to U.S. dollars. INCOME TAX EXPENSE Income tax expense increased by $124,000 from $518,000 in 2002 to $650,000 in 2003 and consists entirely of asset tax expense. Under Mexican tax laws, our Mexican subsidiaries are required to pay annually an asset tax, which is an alternative minimum tax if the asset tax calculation is greater than income taxes payable for the year and is calculated at 1.8% of assets, less certain liabilities. LOSS FROM CONTINUING OPERATIONS As a result of the factors noted above, we reported losses from continuing operations of $6.4 million in 2002 and $8.3 million in 2003. 16 LOSS FROM DISCONTINUED OPERATIONS During the fourth quarter of 2003 we discontinued any further operating activities related to our juice and oil business segment, which was no longer considered part of the company's strategic plan for the future. In accordance with SFAS No. 144, we have reported the results of operations of our juice and oil business segment as discontinued operations in our consolidated statements of operations. As a result, we reported losses from discontinued operations of $1.6 million in 2002 and 2003. NET LOSS As a result of the foregoing, we reported net losses of $7.9 million in 2002 and $9.9 million in 2003. YEAR ENDED 2002 COMPARED TO YEAR ENDED 2001 CONTINUING OPERATIONS NET SALES Packaged fruit sales decreased $1.9 million from $27.0 million in 2001 to $25.1 million in 2002, or 7.0%. This sales decrease was primarily caused by a slight increase in sales to Del Monte of $100,000 from $15.9 million in 2001 to $16.0 million in 2002, and was offset by decreases of 13.5% in foodservice and industrial sales from $3.7 million in 2001 to $3.2 million in 2002 and a decrease of 21.9 % in our Japanese sales from $7.3 million in 2001 to $5.7 million in 2002. The decrease in our foodservice sales in 2002 was impacted by our decision in 2000 to reduce product line and product offerings and a decrease in our sales of industrial products. The decrease in our sales to Japan was caused by reduced demand in 2002 from the Japanese trading companies that purchase our citrus products compared to the prior year. GROSS PROFIT Gross profit on packaged fruit sales decreased slightly from 2.4% in 2001 to 2.2% in 2002. The gross margin reduction in the current period was impacted on a positive basis through aggressive cost cutting, favorable fruit purchasing and improved plant efficiencies over the 2001 period, but was negatively impacted by a non-cash inventory write-down of $1.1 million, which reduced gross margin by 4.4%, as a result of our decision to discontinue our pineapple growing operations. In addition, a significant amount of our Mexican operating and manufacturing costs associated with our packaged fruit operations are peso-based. These peso-based costs include labor, energy and utilities and raw materials. Generally, these costs increase in relation to the Mexican inflation rate, which for 2002 has been approximately 5.7%. In addition, over the past several years, the Mexican peso has strengthened slightly against the U.S. dollar. Since our sales to Del Monte and our Japanese customers are based in U.S. dollars, the increases in our manufacturing costs resulting from Mexican inflation and the slight strengthening of the Mexican peso relative to the U.S. dollar have negatively impacted our gross margins. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses decreased $700,000 from $3.8 million in 2001 to $3.1 million in 2002, or 18.4%. This significant improvement was due to reduced selling, general and administrative expenses at our packaged fruit business segment and those associated with being a publicly held company. We anticipate that compliance with the Sarbanes-Oxley Act of 2002 will increase the associated costs with being a publicly held company. IMPAIRMENT OF LONG-LIVED ASSETS Impairment of long-lived assets charge of $2.5 million in 2002 resulted from the non-cash write-down of previously recorded goodwill associated with our lemon groves. 17 INTEREST EXPENSE Interest expense decreased $529,000 from $922,000 in 2001 to $393,000 in 2002, or 57.4%. This decrease was primarily the result of interest expense reductions resulting from the elimination of interest expense associated with the settlement of debt with a Mexican bank in 2001 and the capitalization of interest costs associated with our Lemon Project. As of December 31, 2002 our total outstanding debt was $13.3 million compared to $14.5 million at December 31, 2001. OTHER INCOME (EXPENSE), NET Other income (expense), net increased from a net expense of $129,000 in 2001 to net income of $146,000 in 2002. Both years consist primarily of miscellaneous non-operating income and expense items. GAIN ON FORGIVENESS OF DEBT Gain on forgiveness of debt of $2.9 million in 2001 represents the agreement reached in June 2001, with a Mexican bank on the settlement of approximately $4.7 million of outstanding principal and accrued interest for $1.8 million. FOREIGN CURRENCY TRANSLATION GAIN (LOSS) Foreign currency translation gain (loss), which decreased from a net gain of $140,000 in 2001 to a net loss of $581,000 in 2002, results from the re-measurement of our foreign subsidiary's financial statements to U.S. dollars. INCOME TAX EXPENSE Income tax expense decreased $715,000 from $1.2 million in 2001 to $518,000 in 2002. This decrease is due primarily to permanent differences between book income, or loss, reported in Mexico (as stated in U.S. dollars and in accordance with U.S. GAAP) on the one hand and Mexican taxable income, or loss, calculated in Mexican pesos according to Mexican income tax laws on the other hand. In addition, in accordance with U.S. GAAP, valuation allowances, which have been provided for net operating losses generated in Mexico and in the U.S., are reviewed periodically by management for reasonableness. As a result of this review, these valuation allowances were increased in each year based on expiration dates of our net operating loss and asset tax credit carryforwards in Mexico. LOSS FROM CONTINUING OPERATIONS As a result of the factors noted above, we reported losses from continuing operations of $2.4 million in 2001 and $6.4 million in 2002. LOSS FROM DISCONTINUED OPERATIONS During the fourth quarter of 2003 we discontinued any further operating activities related to our juice and oil business segment, which was no longer considered part of the company's strategic plan for the future. In accordance with SFAS No. 144, we have reported the results of operations of our juice and oil business segment as discontinued operations in our consolidated statements of operations. As a result, we reported losses from discontinued operations of $6.3 million in 2001 and $1.6 million in 2002, which included impairment of long-lived asset charges of $557,000 and $3.2 million, respectively. NET LOSS As a result of the foregoing, we reported net losses of $8.8 million in 2001 and $7.9 million in 2002. 18 LIQUIDITY AND CAPITAL RESOURCES Financial Position: At December 31, 2003, our cash and cash equivalents totaled $10.6 million, an increase of $10.2 million from year-end 2002. During 2003, our operating activities used cash of $1.2 million principally from our net loss of $8.3 million, a reduction in our deferred Mexican statutory profit sharing liability of $1.4 million, offset by non-cash charges associated with depreciation expense, impairment of long-lived assets and disposal of property and equipment aggregating $7.1 million. Investing activities provided $12.6 million, primarily from the proceeds generated from the rescission of all contract rights and obligations for the growing and processing of lemons. Net cash used in financing activities was $814,000, which was the result of net reductions in short and long term debt. Working capital at December 31, 2003 amounted to $3.4 million as compared to a deficit of $9.7 million at December 31, 2002. Recent Transactions: In April 2003, we consummated the portion of the Coca-Cola transaction pertaining to the rescission of all contract rights and obligations for the growing and processing of lemons for an aggregate cash payment of $12.5 million, plus value added taxes. In June 2003, we sold our Poza Rica juice plant to an unaffiliated third party for $1.0 million, plus value added taxes of $120,000. On June 30, 2004, we received payment of $541,500 in full satisfaction of this obligation. Effective November 17, 2003, we closed the sale of our Victoria juice and oil plant to Coca-Cola, for a cash payment of $3.5 million, plus value added taxes. On August 4, 2004, the company and FOCIR entered into a new agreement that restructured its debt into a $47.0 million Mexican peso (approximately U.S. $4.1 million) secured term loan. Under the terms of the restructured agreement, FOCIR agreed to forgive all accreted interest (approximately $2.0 million) and changed the repayment terms to a seven year note payable in increasing amounts with the first annual principal payment due in October 2005 with interest payable quarterly at the rate of 2.5% plus Certificados de la Testorenia de la Federation ("CETES"), the Mexican Treasury Bill rate which was approximately 8.3% at the restructuring date. The FOCIR debt is secured by a first lien on our El Cielo lemon grove. On August 30, 2004, we sold our packaged fruit business segment to Del Monte in a transaction valued at approximately $11.0 million. The transaction included the sale of all outstanding shares of our Mexican subsidiary, ICMOSA. In connection with the transaction, we received at closing cash of approximately $350,000 and an additional $600,000, less recording expenses of approximately $50,000, in November 2004. As part of the transaction, approximately $7.0 million of defaulted ICMOSA bank debt was transferred and retired, $3.1 million of other liabilities were transferred and the 5-year supply contract and trademark license agreements were terminated. Off- Balance Sheet Arrangements: As of December 31, 2003, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of the SEC's Regulation S-K. 19 Contractual Obligations: The following is a summary of our contractual obligations at December 31, 2003 (In thousands):

~~YEARS~~PAYMENTS ~~ENDED~~DUE ~~DECEMBER~~BY ~~31,~~PERIOD ---------------------- LESS THAN BETWEEN BETWEEN AFTER CONTRACTUAL OBLIGATIONS TOTAL 1 YEAR 2-3 YEARS 4-~~------~~5 ~~2000~~YEARS ~~2001~~5 ~~2002~~YEARS ------ ------ ------ ~~Net sales ..................................... 100.0% 100.0% 100.0% Cost of products sold ......................... 97.7 97.6 100.5~~ ------ ------ ------ ~~Gross profit (loss) ........................... 2.3 2.4 (0.5) Selling, general and administrative expenses .. 29.6 17.0 14.2 Impairment of long~~-~~lived assets ...............~~ -- ~~9.5 11.3~~ --------- --------- ------- ~~Loss~~FOCIR ~~from~~long-term ~~operations~~debt ..................~~........~~ ~~(27.3)~~$4,199 ~~(24.1)~~$ ~~(26.0)~~-- ~~Other~~$ ~~income~~630 ~~(expense):~~$1,365 ~~Interest~~$2,204 ~~expense~~Long-term ~~............................~~debt ~~(6.0)~~in ~~(2.8)~~default (1.~~5) Interest income~~ ............~~.................~~ ~~1.8~~2,735 ~~0.4 0.3 Other income (expense)~~2,735 ~~net~~-- ~~.................~~-- -- ~~(2.5)~~Capital ~~0.8~~lease ~~Gain on sale of Sunfresh(R)brand and related assets~~ ......................... ~~6.9~~12 --12 -- ~~Nonrecurring gain from VAT refund ........... 3.7~~ -- -- ~~Gain~~Deferred onMexican ~~forgiveness~~profit ofsharing ~~debt~~ .......~~..........~~ --23 ~~8.4~~ -- ~~Provision~~23 ~~for loss on abandonment of leased facility ............................... (5.5)~~ -- -- ~~Foreign~~Other ~~currency~~long-term ~~translation~~liability ~~loss~~ ........... (1.0). (1~~.5)~~,776 ~~(0.8)~~ -- -- -- 1,776 ------ ------ ~~Loss before income taxes ...................... (27.4) (22.1) (27.2) Income tax expense (benefit) .................. (2.3) 3.5 2.0~~ ------ ------ ------ ~~Net~~Total ~~loss~~contractual cash obligations ....~~..................................~~ ~~(25.~~$8,745 $2,747 $ 653 $1)%,365 ~~(25.6)%~~$3,980 ~~(29.2)%~~====== ====== ====== ====== ======

On August 4, 2004, the company and FOCIR entered into a new agreement that restructured its debt into a $47.0 million Mexican peso (approximately U.S. $4.2 million) secured term loan. Under the terms of the restructured agreement, FOCIR agreed to forgive all accreted interest (Other long-term liability) and changed the repayment terms to a seven year note payable in increasing amounts with the first annual principal payment due in October 2005 with interest payable quarterly at the rate of 2.5% plus Certificados de la Testorenia de la Federation (CETES), the Mexican Treasury Bill rate which was approximately 8.3% at the restructuring date. The above maturity dates have been adjusted to reflect the restructuring. On August 30, 2004, we sold our packaged fruit business segment to Del Monte. As part of the transaction, the long-term debt in default was transferred and retired. NEW ACCOUNTING PRONOUNCEMENTS In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under FASB No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 149 is generally effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. Adoption of this statement has not had any significant impact on our financial accounting and reporting. In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It required that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Through December 31, 2003, we have not issued financial instruments with characteristics of both liabilities and equity. RISK FACTORS If any of the following risks actually occur, our business, financial condition or operating results could be materially adversely affected. In such case, the trading price of our underlying common stock could decline and you may lose part or all of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. As a result, we cannot predict every risk factor, nor can we assess the impact of all of the risk factors on our businesses or to the extent to which any factor, or combination of factors, may impact our financial condition and results of operation. Additional risks and uncertainties not presently known to us or that we currently deem 20 immaterial may also impair our business operations. AGRICULTURAL RISKS WE ARE DEPENDENT UPON FRUIT GROWING CONDITIONS, ACCESS AND AVAILABILITY OF WATER. Lemon production is subject to many risks common to agriculture that can materially and adversely affect the quality and quantity of lemons produced. These hazards include, among other things, adverse weather conditions, such as drought, frost, excessive rain, excessive heat or prolonged periods of cold weather, lack of water and natural disasters, such as hurricanes, floods, droughts, frosts, earthquakes or pestilence. The conditions may affect the supply and could significantly impact the yields of our groves. These conditions can materially and adversely affect the quality and quantity of lemons produced by the company and its profitability. Our orchards are also susceptible to certain diseases, insects and pests, which can increase operating expenses, reduce yields or kill lemon trees. To the extent a lemon producer's properties are geographically concentrated; the effects of local weather can be material. Our two groves spread over a distance of approximately 60 miles in northeast Mexico. Accordingly, adverse weather in the future could affect a substantial portion of the company's groves in any year and have a material adverse effect on the company's business, financial condition and results of operations. Substantially all of our lemon grows are irrigated and a lack of water has not had a materially adverse effect on our growing operations. There can be no assurances that future weather conditions and lack of irrigation water will not have a material adverse effect on the results of our operations and our financial conditions. WE EXPERIENCE FIXED COSTS AND REVENUE FLUCTUATIONS AND UNCERTAINTY OF PROFITABILITY. Our annual farming costs are incurred throughout the year preceding harvest and are relatively fixed. Revenues from lemon sales are not realized until harvest and vary depending upon yields and changing market prices. Grove productivity varies from year to year depending upon a number of factors, and significant variations in annual yields should be expected from time to time. Furthermore, lemon prices have fluctuated significantly in the past and should be expected to continue to fluctuate from year to year and to decrease at times in the future. Because production costs are not significantly adjustable in light of productivity or revenue levels, weak harvests or lower lemon prices cannot be mitigated by cost reductions and should be expected to have significant adverse effects upon profitability. WE HAVE A SEASONAL BUSINESS. We have a seasonal business. We anticipate harvesting and selling our lemons during the summer and fall. Our management believes that our quarterly consolidated operating results will continue to be impacted by this pattern of seasonality. GENERAL BUSINESS RISK WE ARE SUBJECT TO RISKS ASSOCIATED IN IMPLEMENTATION OF OUR NEW BUSINESS STRATEGY. As a company with an unproven business strategy, our limited history of fresh fruit operations makes an evaluation of our business and prospects difficult. We have had a limited operating history for our new fresh fruit business. We may not be able to achieve profitability or revenue growth in the future. WE FACE STRONG COMPETITION. We operate in a highly competitive market. The fresh lemon market, in which we compete, is highly competitive with respect to price and quality. We face direct competition from Sunkist Growers, Inc., ("Sunkist"), a cooperative of United States citrus growers. Sunkist has substantially greater financial, marketing, personnel and other resources than we do. In addition, we face competition from foreign 21 producers particularly from Chile, Spain and other Mexican growers. WE ARE SUBJECT TO GOVERNMENTAL AND ENVIRONMENTAL REGULATIONS. We are subject to numerous domestic and foreign governmental and environmental laws and regulations as a result of our agricultural activities. The Food and Drug Administration ("FDA"), the United States Department of Agriculture ("USDA"), the Environmental Protection Agency and other federal and state regulatory agencies in the United States extensively regulate our activities in the United States. The manufacturing, processing, packing, storage, distribution and labeling of food products are subject to extensive regulations enforced by, among others, the FDA and to inspection by the USDA and other federal, state, local agencies. Applicable statutes and regulations governing food products include "standards of identity" for the content of specific types of foods, nutritional labeling and serving size requirements and under "Good Manufacturing Practices" with respect to production processes. We believe that our products satisfy, and any new products will satisfy all applicable regulations and that all of the ingredients used in our products are "Generally Recognized as Safe" by the FDA for the intended purposes for which they will be used. Failure to comply with applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions, which could have a material adverse effect on our consolidated results of operations and financial condition. WE ARE DEPENDENT UPON OUR SENIOR MANAGEMENT TEAM. We rely on the business, technical expertise and experience of our senior management and certain other key employees. The loss of services of any of these individuals could have a material adverse effect on our results of operations and financial condition. We believe that our future success is also dependent upon our ability to continue to attract and retain qualified personnel in all areas of our business. No senior members of our management team are bound by non-compete agreements, and if such members were to depart and subsequently compete with us, such competition could have a material adverse effect on our consolidated results of operations and financial condition. WE HAD A CHANGE IN CONTROLLING SHAREHOLDERS DURING 2004. SUCH SHAREHOLDER HAS SUBSTANTIAL CONTROL OVER OUR COMPANY AND CAN AFFECT VIRTUALLY ALL DECISIONS MADE BY OUR SHAREHOLDERS AND DIRECTORS. M&M Nominee LLC ("M&M Nominee") owned 13,149,274 shares of our common stock accounting for 62.48% of all issued and outstanding shares. On July 7, 2004, we announced that Cardinal UniMark Investors, LP, ("Cardinal"), purchased 10,519,419 shares of UniMark common stock in a private transaction from Mexico Strategic Investment Fund Ltd., ("MSIF") for $0.40 per share. MSIF was a member of UniMark's controlling shareholder, M&M Nominee. Madera LLC ("Madera"), the other partner in M&M Nominee, retained its 2,629,855 shares of common stock. Cardinal has the contractual right to vote Madera's shares. As a result, Cardinal has the requisite voting power to significantly affect virtually all decisions made by our company and its shareholders, including the power to elect all directors and to block corporate actions such as amendments to most provisions of our articles of incorporation. This ownership and management structure could inhibit initiatives taken by our company that are not acceptable to Cardinal. WE ARE SUBJECT TO RECENT LEGISLATIVE ACTIONS AND POTENTIAL NEW ACCOUNTING PRONOUNCEMENTS. In order to comply with the provisions of the Sarbanes-Oxley Act of 2002 and proposed accounting changes by the SEC, we may be required to increase or modify our internal controls, hire additional personnel and additional outside legal, accounting and advisory services, all of which could cause our general and administrative costs to increase. Proposed changes in accounting rules, including legislative and other proposals to account for employee stock options as compensation expense among others, could potentially increase the expenses we report under United States Generally Accepted Accounting Practices and could adversely affect our operating results. 22 RISKS RELATING TO OUR MEXICAN OPERATIONS WE ARE SUBJECT TO THE RISK OF FLUCTUATING FOREIGN CURRENCY EXCHANGE RATES AND INFLATION. We are subject to market risk associated with adverse changes in foreign currency exchange rates and inflation in our operations in Mexico. We have a $47.0 million Mexican peso (approximately U.S. $4.2 million) secured term loan with FOCIR. Our consolidated results of operations are affected by changes in the valuation of the Mexican peso to the extent that our Mexican subsidiaries have peso denominated net monetary assets or net monetary liabilities. In periods where the peso has been devalued in relation to the U.S. dollar, a gain will be recognized to the extent there are peso denominated net monetary liabilities while a loss will be recognized to the extent there are peso denominated net monetary assets. In periods where the peso has gained value, the converse would be recognized. Our consolidated results of operations are also subject to fluctuations in the value of the peso as they affect the translation to U.S. dollars of our Mexican subsidiaries financial statements. Since the assets and liabilities therein are peso denominated, a falling peso results in a translation loss to the extent there are net peso assets or a translation gain to the extent there are net peso liabilities. WE ARE SUBJECT TO GOVERNMENTAL LAWS THAT RELATE TO OWNERSHIP OF RURAL LANDS IN MEXICO. We own or lease, on a long-term basis, approximately 7,100 acres of rural land in Mexico, which are used primarily for growing our lemons. Historically, the ownership of rural land in Mexico has been subject to legal limitations and claims by residents of rural communities. Although we have not experienced any legal disputes with respect to our land ownership, we are transitioning, pursuant to the terms of an existing agreement with an "Ejido" system of land ownership, approximately 5,300 acres of land from a 30-year lease to a land purchase. In connection with transfer of this land, we have received a request from the "Ejido" for the payment of an additional $1.2 million ($12.6 million Mexican pesos). LABOR SHORTAGES AND UNION ACTIVITY COULD AFFECT OUR ABILITY TO HIRE AND WE ARE DEPENDENT ON THE MEXICAN LABOR MARKET. We are heavily dependent upon the availability of a large labor force to harvest and work our lemon groves. If it becomes necessary to pay more to attract labor, our labor costs will increase. WE ARE SUBJECT TO STATUTORY EMPLOYEE PROFIT SHARING IN MEXICO. All Mexican companies, including ours, are required to pay their employees, in addition to their agreed compensation benefits, profit sharing in an aggregate amount equal to 10% of taxable income, as adjusted to eliminate most of the effects of Mexican inflation, calculated for employee profit sharing purposes, of the individual corporation employing such employees. As a result of losses for income tax purposes at our Mexican subsidiaries over the past several years, we have not been required to pay any profit sharing. Statutory employee profit sharing expense, when paid, is reflected in our cost of goods sold and selling, general and administrative expenses, depending upon the function of the employees to whom profit sharing payments are made. Our net losses as shown in our consolidated statements of operations are not always a meaningful indication of taxable income of our subsidiaries for profit sharing purposes or of the amount of employee profit sharing. WE ARE SUBJECT TO VOLATILE INTEREST RATES IN MEXICO, WHICH COULD INCREASE OUR CAPITAL COSTS. We are subject to volatile interest rates in Mexico. Historically, interest rates in Mexico have been volatile, particularly in times of economic unrest and uncertainty. High interest rates restrict the availability and raise the cost of capital for our Mexican subsidiaries and for growers and other Mexican parties with whom we do business, both for borrowings denominated in pesos and for borrowings denominated in U.S. dollars. As a result, costs of operations in Mexico could be higher. 23 RISKS RELATING TO OUR FINANCIAL CONDITION WE MAY CONTINUE TO SUSTAIN LOSSES AND ACCUMULATED DEFICITS IN THE FUTURE. We have sustained net losses in each of the last seven fiscal years. As of December 31, 2003 our accumulated deficit was $61.2 million. Our ability to achieve profitability in the future will depend on many factors, including our ability to successfully execute our new business strategy to produce and market fresh lemons. Because we were not profitable in each of the last seven years, there can be no assurance that we will achieve a profitable level of operations in fiscal 2004 and beyond, or, if profitability is achieved that it can be sustained. WE MAY LOSE OUR NET OPERATING LOSS CARRYFORWARDS, WHICH COULD PREVENT US FROM OFFSETTING FUTURE TAXABLE INCOME IN THE UNITED STATES. In June 2001, we completed a rights offering wherein M&M Nominee, our largest shareholder, purchased an additional 6,849,315 shares of our common stock increasing their ownership from 45.2% to 62.48%. Accordingly, we experienced an ownership change as defined by Section 382 of the Internal Revenue Code of 1986, as amended, which limits the use of net operating loss carryforwards where changes occur in the stock ownership of a company. As a result, this limitation could allow us to use only a portion of our pre-change net operating loss carryforwards, which amounted to $17.7 million at December 31, 2003, to reduce subsequent taxable income in the United States, if any for federal income tax purposes. Based upon the limitations of Section 382, we were allowed to use approximately $425,000 of such losses each year to reduce taxable income, if any, until such unused losses expire. On July 7, 2004, we announced that Cardinal purchased 10,519,419 shares of UniMark common stock in a private transaction from MSIF. MSIF was a member of UniMark's controlling shareholder, M&M Nominee, which owned 13,149,274 shares of the company's common stock. Madera, the other partner in M&M Nominee, retained its 2,629,855 shares of common stock. As a result of this transaction, additional Section 382 limitations could further reduce the amount of our net operating losses available each year to reduce taxable income. WE HAVE BEEN UNABLE TO FILE OUR FORM 10-Q QUARTERLY REPORTS FOR OUR FIRST, SECOND AND THIRD QUARTERS OF 2004 WITH THE SEC AND MATERIAL INFORMATION CONCERNING OUR CURRENT OPERATING RESULTS AND FINANCIAL CONDITION IS THEREFORE UNAVAILABLE. We have been unable to file our periodic reports with the SEC for our quarters ended March 31, 2004, June 30, 2004 and September 30, 2004 and the information to be contained therein is unavailable at this time. We cannot predict how soon complete financial and operational information relating to our quarterly reports will become available. When it is, it may reflect changes or trends that are material to our business. THE INTERNAL CONTROL SYSTEM AT ONE OF OUR MEXICAN SUBSIDIARIES IS INEFFECTIVE AND FAILURE TO COMPLY WITH SECTION 404 OF THE SARBANES-OXLEY ACT OF 2002 IN A TIMELY FASHION MAY HAVE A NEGATIVE IMPACT ON INVESTOR CONFIDENCE. Management has concluded that we have a material weakness in internal financial reporting at one of our Mexican subsidiaries which is more fully described in Item 9A of this Form 10-K. Section 404 of the Sarbanes-Oxley Act of 2002 ("Sarbanes"), beginning with our Annual Report on Form10-K for our fiscal year ending December 31, 2005, we will be required to assess the effectiveness of our internal controls over financial reporting and report that our internal control over financial reporting is effective. Although we continue to take action to comply with the internal controls, disclosure controls and other requirements of Sarbanes, we have limited qualified personnel to prepare and file our SEC reports and we are not certain that we can complete the documentation of our internal controls as required by Section 404 of Sarbanes and provide our auditors with the required report without assistance of a third party. Resources available in the marketplace and our company's ability to acquire them will affect our ability to complete the required procedures by the filing deadline of our 2005 Annual Report on Form 10-K. 24 If we are unable to satisfy the requirements of Section 404 by the filing deadline, we may be unable to assert that our internal controls over financial reporting are effective, or our auditors may not be able to render the required attestation concerning our assessment and the effectiveness of the internal controls over financial reporting. This may negatively impact investor confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on our stock price. IF CONDITIONS OR ASSUMPTIONS DIFFER FROM THE JUDGMENTS, ASSUMPTIONS OR ESTIMATES USED IN OUR CRITICAL ACCOUNTING POLICIES, THE ACCURACY OF OUR FINANCIAL STATEMENTS AND RELATED DISCLOSURES COULD BE AFFECTED. The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions, and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Our critical accounting policies, which are set forth above, describe the significant accounting policies and methods used in the preparation of our consolidated financial statements. These accounting policies are considered "critical" because they require judgments, assumptions and estimates that materially impact our consolidated financial statements and related disclosures. As a result, if future events differ significantly from the judgments, assumptions, and estimates in our critical accounting policies or different assumptions are used in the future, such events or assumptions could have a material impact on our consolidated financial statements and related disclosures. RISKS RELATING TO OUR COMMON STOCK THE DELISTING FROM THE OVER-THE-COUNTER BULLETIN BOARD HAS FURTHER REDUCED THE LIQUIDITY AND MARKETABILITY OF OUR COMMON STOCK AND MAY FURTHER DEPRESS THE MARKET PRICE OF OUR COMMON STOCK. On March 15, 2001, Nasdaq delisted our common stock from The Nasdaq National Market and moved our common stock to the Over-the-Counter Electronic Bulletin Board ("OTC Bulletin Board") under the symbol "UNMG.OB." On May 29, 2003, our common stock ceased to be quoted for trading on the OTC Bulletin Board, and is presently listed on the "Pink Sheets." Prices for securities traded solely on the Pink Sheets may be difficult to obtain. As such, our stock has very limited liquidity and marketability. This very limited liquidity, marketability, the reduced public access to quotations for our common stock and lack of a regular trading market for our stock have depressed the market price of our stock. Although we intend to take actions necessary to have our stock included in the OTC Bulletin Board, there can be no assurance that we will be successful. Further, the OTC Bulletin Board is an unorganized, inter-dealer, over-the-counter market with significantly less liquidity than other recognized markets such as The Nasdaq Stock Market. "PENNY STOCK" REGULATIONS MAY IMPOSE RESTRICTIONS ON MARKETABILITY OF OUR COMMON STOCK. The SEC has adopted regulations which generally define "penny stock" to be any equity security that is not traded on a national securities exchange or Nasdaq and that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Since our securities that are currently included on the OTC Bulletin Board are trading at less than $5.00 per share at any time, our common stock may become subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors. Accredited investors generally include investors that have assets in excess of $1.0 million or an individual annual income exceeding $200,000, or, together with the investor's spouse, a joint income of $300,000. For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require, among other things, the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the penny stock market and the risks associated therewith. The broker-dealer must also disclose the commission payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market. Finally, 25 monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the penny stock rules may restrict the ability of broker-dealers to sell our securities and may affect the ability of stockholders to sell our securities in the secondary market. OUR COMMON STOCK PRICE HAS BEEN AND MAY CONTINUE TO BE HIGHLY VOLATILE. The price of our common stock has been particularly volatile and will likely continue to fluctuate in the future. Announcements of chronological innovations, regulatory matters or new commercial products by us or our competitors, developments or disputes concerning patent or proprietary rights, publicity regarding actual or potential product results relating to products under development by us or our competitors, regulatory developments in both the United States and foreign countries, public concern as to the safety of pharmaceutical or dietary supplement products, and economic and other external factors, as well as period-to-period fluctuations in financial results, may have a significant impact on the market price of our common stock. In addition, from time to time, the stock market experiences significant price and volume fluctuations that may be unrelated to the operating performance of particular companies or industries. The market price of our common stock, like the stock prices of many publicly traded smaller companies, has been and may continue to be highly volatile. LEGISLATIVE ACTIONS AND POTENTIAL DE-REGISTRATION In order to comply with the provisions of Sarbanes and related SEC rules, the company may be required to increase its internal controls, hire additional personnel, and engage outside legal, accounting and advisory services, all of which could cause the company's general and administrative cost to increase. Because the company has less than 200 record holders of its common stock, should the increased burdens of being a reporting company prove to be too great, the company may elect to de-register its common stock with the SEC and discontinue its periodic reporting obligations. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK INTEREST RATE RISK. Our interest expense is most sensitive to changes in the general level of U.S. interest rates and the Certificados de la Testorenia de la Federation ("CETES") rates. In this regard, changes in these interest rates affect the interest paid on our debt. The following table presents principal cash flows and related weighted-average interest rates by expected maturity dates for our debt obligations, as adjusted to reflect the Del Monte transaction and the FOCIR restructuring discussed below. INTEREST RATE SENSITIVITY Principal Amount by Expected Maturity Average Interest Rate (In thousands, except interest rates)

Estimated There- Fair Value ~~2003~~ 2004 2005 2006 2007 2008 after Total 12/31/0203 ----- ---- ---- ---- ---- ------- ------- ---------- Long-term debt, including current portion Fixed rate $ ~~490~~12 $ 12- $ -- $ -- $ -- $ -- $ ~~502~~12 $ ~~502~~12 Average interest rate ~~17.8%~~ 6.9% Variable rate $ ~~446~~- $ ~~300~~210 $~~400~~ 420 $~~700~~ 630 $~~1,260~~ 735 $4 2,~~611~~204 $7 4,~~717~~199 $7 4,~~717~~199 Average interest rate 710.98% 710.38% 710.38% 710.38% 710.38% ~~11.4%~~

26 At December 31, 2003, U.S. dollar denominated long-term debt amounted to $12,000 as compared to Mexican peso denominated long-term debt of $4.2 million. In August 2004, our Mexican peso denominated debt was restructured into a secured term loan. The repayment terms were changed to a seven-year note payable in increasing amounts with the first annual principal payment due in October 2005 with interest payable quarterly at the rate of 2.5% plus CETES, the Mexican Treasury Bill rate which was approximately 8.3% at the restructuring date. On August 30, 2004, the company sold its packaged fruit business segment to Del Monte, which included all of the outstanding shares of ICMOSA. As part of the transaction, substantially all the U.S. denominated debt was retired and transferred to Del Monte. 27 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS

PAGE ---- Report of Independent Auditors.....................................................~~..........~~ 3229 Consolidated Balance Sheets as of December 31, ~~2001~~2002 and ~~2002~~2003.......................~~..........~~ 3330 Consolidated Statements of Operations for the Years Ended December 31, ~~2000~~2001, ~~2001~~2002 and ~~2002~~2003.................................................~~........~~ 3431 Consolidated Statements of Shareholders' Equity for the Years Ended December 31, ~~2000~~2001, ~~2001~~2002 and ~~2002~~2003.................................................~~........~~ 3532 Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2000~~2001, ~~2001~~2002 and ~~2002~~2003.................................................~~........~~ 3633 Notes to Consolidated Financial Statements.........................................~~..........~~ 3734 Financial Statement Schedule Schedule II - Valuation and Qualifying Accounts..................................~~........~~ 56

28 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders The UniMark Group, Inc. We have audited the accompanying consolidated balance sheets of The UniMark Group, Inc. (the Company) as of December 31, 2002 and 2003, and the related consolidated statements of operations, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in the index at Item 15 (a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of The UniMark Group, Inc. at December 31, 2002 and 2003, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. Mancera, S.C., Member Practice of Ernst & Young Global Mexico City, Mexico November 15, 2004 29 THE UNIMARK GROUP, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE AMOUNTS)

DECEMBER 31, -------------------- ~~2001~~ 2002 2003 -------- -------- ASSETS Current assets: Cash and cash equivalents ...................................~~.....~~ $ ~~1,135~~397 $10,552 ~~406~~ Accounts receivable - trade, net of allowance of $~~1,317~~616 in ~~2001~~2002 and $~~1,118~~69 in ~~2002~~2003 ............................................ ~~2,311~~515 ~~736~~981 Accounts receivable - other .................................~~.....~~ ~~219~~245 ~~246~~196 Notes receivable ............................................~~.....~~ ~~340~~ 310 - Income and value added taxes receivable .....................~~.....~~ ~~537~~482 ~~909~~448 Inventories .................................................~~.....~~ 74,~~560~~978 54,~~221~~319 Prepaid expenses ............................................~~.....~~ ~~239~~148 ~~199~~152 ~~Property~~Current ~~held~~assets ~~for~~of ~~sale~~discontinued operations ...................~~........................~~ ~~5,372~~952 --598 -------- -------- Total current assets ................................~~.....~~ ~~17,713~~ 8,027 17,246 Property, plant and equipment, net ............................~~.....~~ 2726,~~459~~089 328,~~486~~270 ~~Goodwill,~~Land ~~net~~lease ...................................................... 21,~~516~~897 --1,848 Deposit on plant facility .....................................~~.....~~ 2,~~262 2,~~044 ~~Notes~~- ~~receivable,~~Other ~~less~~assets ~~current portion~~............................. ~~259 -- Other assets~~..................... 212 117 Long-term assets of discontinued operations ...................~~...............~~ ~~203~~4,506 ~~218~~- -------- -------- Total assets ........................................~~.....~~ $ 5042,~~412~~775 $ 4227,~~775~~481 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debt to related party ............................~~......................~~ $ ~~3,550~~100 $ ~~100~~- Short and long-term debt in default .........................~~.....~~ 26,~~617~~510 86,~~529~~235 Current portion of long-term debt ...........................~~.....~~ ~~1,513~~ 28 12 Accounts payable - trade ....................................~~.....~~ 3,~~845~~176 42,~~401~~676 Accrued liabilities, including amounts due to related party of $350 in 2002 and $363 in 2003............................ 3,789 4,910 Current liabilities of discontinued operations ..............~~....~~ 4,~~022~~076 ~~4,621~~- -------- -------- Total current liabilities ...........................~~.....~~ ~~15,547~~ 17,679 13,833 Long-term debt, less current portion ..........................~~.....~~ 64,~~851~~622 4,~~622~~199 Deferred Mexican statutory profit sharing ~~and income taxes~~..................... 1,~~730 1,~~443 23 Other long-term liability ..................................... 1,434 1,776 -------- ------- Total liabilities ................................... ~~745~~25,178 119,~~434~~831 -------- ------- Commitments and contingencies Shareholders' equity: Common stock, $0.01 par value: Authorized shares - 40,000,000 in ~~2001~~2002 and ~~2002~~2003 Issued and outstanding shares - 21,044,828 in ~~2001~~2002 and ~~2002~~2003 ................................................... 210 210 Additional paid-in capital .................................~~......~~ 68,671 68,671 Accumulated deficit .........................................~~.....~~ (4351,~~342~~284) (5161,~~284~~231) -------- -------- Total shareholders' equity ..........................~~.....~~ ~~25,539~~ 17,597 7,650 -------- -------- Total liabilities and shareholders' equity ..........~~.....~~ $ 5042,~~412~~775 $ 4227,~~775~~481 ======== ========

See accompanying notes. 30 THE UNIMARK GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

YEARS ENDED DECEMBER 31, ~~2000~~-------------------------------- 2001 2002 2003 -------- -------- -------- Net sales ............................................ $ 4527,~~191~~032 $ 3425,~~216~~069 $ 2728,~~162~~316 Cost of products sold ................................ 4426,~~153~~396 3324,~~380~~513 2726,~~302~~965 -------- -------- -------- Gross profit ~~(loss)~~ ......................................... 636 556 1,~~038~~351 ~~836 (140)~~ Selling, general and administrative expenses ......... 133,~~368~~779 53,~~798~~085 32,~~864~~126 Impairment of long-lived assets ...................... -- 32,~~245~~516 35,~~073~~243 -------- -------- -------- Loss from operations ................................. (123,~~330~~143) (85,~~207~~045) (76,~~077~~018) Other income (expense): Interest expense ................................... (~~2,714~~922) (~~942~~393) (~~407~~1,028) ~~Interest~~Other income (expense), net ........................~~....~~ ~~802 151 75 Other income~~ (~~expense~~129), ~~net~~146 ~~................ --~~ (~~922~~338) ~~217~~ Gain on ~~sale~~forgiveness of ~~Sunfresh(R)~~debt ~~brand and related assets~~ ........................~~...~~ 32,~~089~~870 -- -- ~~Nonrecurring~~Foreign ~~gain~~currency ~~from~~translation ~~VAT~~gain ~~refund~~(loss) ........... ~~1,685~~140 (581) (269) -------- -------- ~~Gain~~-------- on1,959 ~~forgiveness~~(828) of(1,635) ~~debt~~-------- ~~................~~ -------- ~~2,870~~ -------- ~~Provision~~Loss ~~for~~from ~~losses~~continuing onoperations ~~abandonment~~before ofincome ~~leased~~taxes ~~facility~~.. (1,184) (5,873) (7,653) Income tax expense ....................... ~~(2,490) -- -- Foreign currency translation loss~~ ............ ~~(452)~~1,233 ~~(505)~~518 ~~(210)~~650 -------- -------- -------- ~~(80) 652 (325) -------- -------- --------~~ Loss ~~before~~from ~~income~~continuing ~~taxes~~operations ...................... (122,~~410~~417) (76,~~555~~391) (78,~~402~~303) ~~Income~~Loss ~~tax~~from ~~expense~~discontinued operations, net of income taxes (benefit) of $(23) in 2001, $22 in 2002 and $14 in 2003 ................................................. (6,348) (1,~~047~~551) (1,~~210~~644) ~~540~~ -------- -------- -------- Net loss ............................................. $ (118,~~363~~765) $ (87,~~765~~942) $ (79,~~942~~947) ======== ======== ======== Basic and diluted net loss per share: Continuing operations .............................. $ (0.8214) $ (0.31) $ (0.39) Discontinued operations ............................ (0.36) (0.07) (0.08) -------- -------- -------- Basic and diluted net loss per share ............... $ (0.50) $ (0.38) $ (0.47) ======== ======== ========

See accompanying notes. 31 THE UNIMARK GROUP, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (IN THOUSANDS, EXCEPT FOR SHARE AMOUNTS)

ADDITIONAL COMMON PAID-IN ACCUMULATED SHARES STOCK CAPITAL DEFICIT TOTAL ---------- ------ ---------- ----------- -------- Balance as of December 31, ~~1999~~2000 .......... 13,938,326 $ 139 $ 63,766 $ (2334,~~214~~577) 40$ 29,~~691~~328 Shares issued for cash in public rights offering, net of offering expenses ... 7,106,502 71 4,905 - 4,976 Net loss .............................. -- -- -- (118,~~363~~765) (118,~~363~~765) ---------- ------~~----~~ ---------- ----------- ---------- Balance as of December 31, ~~2000~~2001 .......... 1321,~~938~~044,~~326~~828 ~~139~~210 6368,~~766~~671 (3443,~~577~~342) 2925,~~328~~539 ~~Shares issued for cash in public rights offering, net of offering expenses ... 7,106,502 71 4,905 -- 4,976~~ Net loss .............................. -- -- -- (87,~~765~~942) (87,~~765~~942) ---------- ------~~----~~ ---------- ----------- ---------- Balance as of December 31, ~~2001~~2002 .......... 21,044,828 210 68,671 (4351,~~342~~284) 2517,~~539~~597 Net loss .............................. -- -- -- (79,~~942~~947) (79,~~942~~947) ---------- ------~~----~~ ---------- ----------- ---------- Balance as of December 31, ~~2002~~2003 .......... 21,044,828 $ 210 $ 68,671 $ (5161,~~284~~231) $ 177,~~597~~650 ========== ======~~====~~ ========== =========== ==========

See accompanying notes. 32 THE UNIMARK GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)

YEARS ENDED DECEMBER 31, ~~2000~~ 2001 2002 2003 -------- -------- -------- OPERATING ACTIVITIES ~~Net~~OF ~~loss~~CONTINUING OPERATIONS Loss from continuing operations ................................................~~......~~ $(112,~~363~~417) $ (86,~~765~~391) $ (78,~~942~~303) Adjustments to reconcile ~~net~~ loss from continuing operations to net cash provided by (used in) operating activities: ~~Gain~~from oncontinuing ~~sale~~operations: ofDepreciation ~~Sunfresh(R) brand~~ and ~~related~~amortization ~~assets~~ ...... ~~(3,089) -- -- Provision for doubtful accounts~~ ........................................ 1,~~055~~394 ~~224~~1,053 1,396 Impairment of long--lived ~~Depreciation~~assets .............................................. ~~2,169~~- 2,~~180~~516 15,~~536~~243 ~~Amortization~~Gain ofon ~~intangible~~forgiveness ~~assets~~of debt ......................... ~~133 106 -- Impairment of long-lived assets~~ .......................~~....~~ (2,870) - - ~~3,245~~Deferred ~~3,073~~Mexican ~~Gain~~statutory onprofit ~~forgiveness~~sharing ofand ~~debt~~income taxes .................~~..............~~ --564 (2287) (1,~~870~~420) --Loss ~~Provision~~on ~~for~~disposal ~~losses~~or onwrite-off ~~abandonment~~ of ~~leased~~plant ~~facility~~and equipment ....................... ~~1,490~~696 -- --411 ~~Deferred~~Cash ~~Mexican~~provided ~~statutory~~by ~~profit~~(used ~~sharing~~in) ~~and~~operating ~~income~~working ~~taxes~~capital: Receivables ............................................................. (12,~~379)~~486 ~~564~~979 (~~287~~73) ~~Write-down~~Inventories ~~of long-term orchard costs~~ ..................... ~~434 -- -- Loss on disposal or write-off of plant and equipment~~ ........................................ ~~711~~ 1,~~306~~354 ~~-- Changes in operating assets and liabilities~~1,631 ~~net~~659 ofPrepaid ~~effects~~expenses ~~associated with the sale of the Sunfresh(R) brand in 2000: Receivables~~ ............................................ ~~1,884 3,762 1,465 Inventories~~ ............ (82) (72) (4) Accounts payable and accrued liabilities ................................ ~~917~~(868) ~~2,924~~332 ~~2,339~~536 ~~Prepaid~~Other ~~expenses~~long-term liability ............................................... ~~579~~465 ~~104~~689 40342 ~~Accounts~~------- ~~payable~~------- ~~and~~-------- ~~accrued~~Net ~~liabilities~~cash provided by (used in) operating activities from continuing operations ..................................................................... ~~1,456~~722 450 (1,~~912~~213) ~~1,155~~Net ~~Other~~cash ~~long-term~~provided ~~liability~~by (used in) operating activities of discontinued operations ..................................................................... ~~280~~611 ~~465~~1,618 ~~689~~(2,559) -------- -------- -------- Net cash provided by (used in) operating activities ............................ ~~(4,723)~~ 1,333 2,068 (3,772) -------- -------- -------- INVESTING ACTIVITIES OF CONTINUING OPERATIONS Purchases of property, plant and equipment ..................................... (51,~~626~~245) (31,~~150~~580) (~~1,748~~365) ~~Net~~Proceeds ~~proceeds~~ from ~~sale~~the rescission of ~~the~~all ~~Sunfresh(R)~~contract ~~brand~~rights relating to the growing and ~~related~~processing ~~assets~~of lemons ....................................................... ~~13,052~~ -- -- 12,500 Proceeds from the sale of ~~businesses~~property and ~~sale~~equipment of............................... ~~plant~~146 ~~and~~- ~~equipment~~197 Decrease (increase) in deposit on plant facility ............................... (667) 218 172 Decrease (increase) in other assets ............................................ 5 (15) 95 ------- ~~2,646~~------- -------- ~~Decrease~~Net cash provided by (~~increase)~~used in) ~~deposit~~investing onactivities ~~plant~~of ~~facility~~continuing operations ..................................................................... 7(1,761) (~~667~~1,377) ~~218~~12,599 ~~Decrease~~Net cash provided by (~~increase)~~used in) ~~other~~investing ~~assets~~activities of discontinued operations...................................................................... ~~298~~771 ~~181~~ (15168) 4,152 -------- -------- -------- Net cash provided by (used in) investing activities ............................ ~~7,731~~ (990) (1,545) 16,751 -------- -------- -------- FINANCING ACTIVITIES OF CONTINUING OPERATIONS Net proceeds from the issuance of common shares ................................ -- 4,976 - - Proceeds from ~~issuance of~~ short-term promissory ~~note~~notes ...................................... -- 1,800 100 500 Payment of short-term promissory ~~note~~notes ......................................... -- (1,800) -- (600) Net reductions of short-term debt, short and long-term debt in default and current portion of long-term debt ............................................ (81,~~424~~980) (~~5,230~~440) (~~1,329~~291) ~~Proceeds~~Change ~~from~~in long-term debt ....................................................... ~~4,936~~(29) (314) (423) ------- ------- ~~Payments~~-------- Net cash provided by (used in) financing activities of ~~long-term~~continuing ~~debt~~operations ..................................................................... (2,~~513~~967 (654) (29814) Net cash used in financing activities of discontinued operations ............... (233,250) (598) (2,019) -------- -------- -------- Net cash used in financing activities .......................................... (~~6,001) (~~283) (1,252) (2,833) -------- -------- -------- Net increase (decrease) in cash and cash equivalents ........................... ~~(2,993)~~ 60 (729) 10,146 Net change in cash and cash equivalents of discontinued operations ............. 69 56 9 Cash and cash equivalents at beginning of year ................................. ~~4,068~~941 1,~~075~~070 ~~1,135~~397 -------- -------- -------- Cash and cash equivalents at end of year ....................................... $ 1,~~075~~070 $ ~~1,135~~397 $ ~~406~~10,552 ======== ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION Interest paid ................................................................. $ 21,~~907~~565 $ ~~1,676~~329 $ ~~329~~146 ======== ======== ======== Asset tax paid ................................................................ $ ~~312~~535 $ ~~582~~518 $ ~~492~~650 ======== ======== ========

See accompanying notes. 33 THE UNIMARK GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES Description of Business: Our company, The UniMark Group, Inc., a Texas corporation, ("we," "us," "our," and the "company") is a producer and marketer of high quality branded fruit with substantially all of its operations in Mexico. The company was organized in 1992 to combine the packaged fruit operations of a Mexican citrus and tropical fruit processor, which commenced operations in 1974, with UniMark Foods, Inc. ("UniMark Foods") a company that marketed and distributed citrus products in the United States. We conduct substantially all of our operations through our wholly owned operating subsidiaries. In Mexico, our operating subsidiaries include: Industrias Citricolas de Montemorelos, S.A. de C.V. ("ICMOSA") and Grupo Industrial Santa Engracia, S.A. de C.V. ("GISE"). In the United States our subsidiary is UniMark Foods. On August 30, 2004, the company sold its packaged fruit business segment, which included the sale of all outstanding shares of the company's Mexican subsidiary, ICMOSA ("Del Monte sale"). Principles of Consolidation: The consolidated financial statements include our accounts and the accounts of our subsidiaries, all of which are wholly-owned. All significant intercompany accounts and transactions have been eliminated. Revenue Recognition: Revenue is recognized on sales of products when the customer receives title to the goods, generally upon delivery. Cost of Products Sold: Cost of products sold includes the cost of the fruit, packaging materials, labor, depreciation, overhead, transportation and other distribution costs, including handling costs incurred to deliver our products to our customers. Foreign Operations: Substantially all of our growing operations are located in Mexico. In addition, substantially all of our Mexican employees at our ICMOSA subsidiary were affiliated with labor unions which typically were covered by two-year contracts. Use of Estimates: The preparation of our consolidated financial statements in conformity with generally accepted accounting principles requires our management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from those estimates. Our company was vertically integrated for a portion of its raw materials. Such inventory was recorded at the lower of cost or market, which involved significant estimates. Factors such as weather, pestilence, disease or other natural disasters could affect estimated yields causing actual results to differ from those estimated. Cash Equivalents: We consider all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. Concentration of Credit Risk: Prior to the Del Monte sale in August 2004, we processed and sold niche citrus and tropical fruit products and other specialty food ingredients to customers in the foodservice and retail industries in the United States, Mexico, Europe and Japan and performed periodic credit evaluations of our customers' financial condition which generally did not require collateral. Trade receivables were generally due within 30 days. We maintain an allowance for doubtful accounts, which is based on an analysis of past due accounts, which was $616,000 and $69,000 as of December 31, 2002 and 2003, respectively. Historically credit losses have been within management's expectations and have not been significant. Two customers accounted for 85.8%, 86.7% and 90.2% of our net sales in the years ended December 31, 2001, 2002 and 2003, respectively. Commencing in August 2004, we started selling lemons into the fresh produce market and similar customer credit reviews are performed. Comprehensive loss: Comprehensive loss, as defined by SFAS No. 130, is equal to the net loss for all years presented. 34 Inventories: Inventories, which all relate to our packaged fruit business segment, are valued at the lower of cost or market using average cost and consist primarily of processed finished goods, raw materials, supplies and advances to suppliers. Property, Plant and Equipment: Property, plant and equipment are stated at cost. Depreciation is computed primarily by the straight-line method over the following estimated useful lives: ~~Buildings.............................................. 20 years Machinery and equipment................................ 5-12.5 years~~

All costs incurred to plant and maintain our lemon orchards were capitalized and deferred as of December 31, 2002. As a result of the Coca-Cola transaction in April 2003 (see Note 12), which resulted in the rescission of all contract rights and obligation for the growing of lemons, these deferred and capitalized costs were reduced by the sale proceeds. As of April 1, 2003, the remaining asset balances associated with our lemon groves are being depreciated over their estimated useful lives using the straight-line method. Impairment of Long-Lived Assets: Effective January 1, 2002, we adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 superceded SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-lived Assets to be Disposed Of" and the accounting and reporting provisions of Accounting Principles Board Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions," ("APB No. 30") for the disposal of a segment of a business. Consistent with SFAS No. 121, SFAS No. 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. Based on the continued unfavorable and volatile worldwide market prices for frozen concentrate orange juice ("FCOJ"), we suspended our frozen concentrate orange juice operations in early 2002. In accordance with SFAS No. 121, and based on an appraisal from a third party, we recorded a non-cash charge of $3.2 million in 2001 for impairment of these assets in order to value these assets at their estimated fair value. This charge, which included $300,000 of impaired goodwill, is associated with our discontinued juice and oil business segment and is included under the caption "Loss from discontinued operations, net of income taxes" in our 2001 consolidated statement of operations. In early 2003, we received offers to sell our juice processing facilities to two separate parties. As a result of these offers, and in accordance with SFAS No. 144, we recorded in our fourth quarter of 2002, a non-cash charge of $557,000, which is the difference between the offer prices we agreed to sell the plants and the carrying amounts of these assets as of December 31, 2002. This charge is associated with our discontinued juice and oil business segment and is included under the caption "Loss from discontinued operations, net of income taxes" in our 2002 consolidated statement of operations. Subsequently, we entered into sale agreements with these parties and on June 10, 2003 and November 17, 2003, respectively, we finalized the sales of these facilities. Based on the continued losses at our Mexican subsidiary ICMOSA, insufficient cash flows to fund current operations during peak processing periods, inability to obtain additional capital to finance the business, inability to sell assets due to existing bank liens, working capital deficits, continued losses and the existence of a lawsuit by one of its banks, our board of directors, decided in the fourth quarter of 2003 to explore strategic alternatives, including the sale of all or part of ICMOSA. As a result of this decision, and in accordance with SFAS No. 144 all the long-lived assets related to ICMOSA's operations were written down to their estimated fair value, which resulted in the recording of a non-cash charge of approximately $5.0 million in the fourth quarter of 2003. Fair market value was estimated based on recent purchase offers for ICMOSA. On August 30, 2004, the company sold its packaged fruit business segment which included the sale of all outstanding shares of the company's Mexican subsidiary, ICMOSA. The selling price for ICMOSA was consistent with the estimated fair value. During our first quarter of 2003 we recorded a non-cash charge of $232,000 as a result of writing down certain long-lived assets to estimated fair value, which were associated with our pineapple growing operations. There are numerous uncertainties and inherent risks in the citrus industry, such as, but not limited to general economic conditions, actions of competitors, ability to manage growth, actions of regulatory authorities, consumer demand and risk relating to international operations. Adverse effects from these risks may result in adjustments to the carrying value of our assets and liabilities in the future. 35 Goodwill: Prior to January 1, 2002, goodwill had been amortized on a straight-line basis over a period of 40 years. In July 2001, the FASB issued SFAS No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets." Effective January 1, 2002, we adopted SFAS No. 142. Under SFAS No. 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed annually for impairment or more frequently if indicators arise. Separable intangible assets that are not deemed to have indefinite lives will continue to be amortized over their useful lives. As of January 1, 2002, we ceased amortization of goodwill. Transitional impairment tests of our goodwill did not require an adjustment as of January 1, 2002. Outstanding goodwill of $2.5 million at December 31, 2001, was associated with our new agricultural business segment. As a result of the sale of our contract rights for the growing and processing of lemons in April 2003; we again reviewed our remaining goodwill of $2.5 million and determined that it was impaired. As a result, we recorded a non-cash impairment charge of $2.5 million for the year ended December 31, 2002, which is included under the caption "Impairment of long-lived assets" in our 2002 consolidated statement of operations. Goodwill amortization in the year ended December 31, 2001 was $81,600. Foreign Currency Translation: The functional currency of our company and our subsidiaries is the U.S. dollar. Transactions in foreign currency are recorded at the prevailing exchange rate on the day of the related transaction. Inventories, property, plant and equipment and shareholders' equity are translated at the historical exchange rate. Monetary assets and liabilities denominated in foreign currency are remeasured to U.S. dollars at the prevailing exchange rate as of the balance sheet date. Revenues and expenses are translated at the average exchange rates in effect during the reporting period. Revenues and expenses related to non-monetary assets are translated at the historical exchange rates of the related assets. Exchange rate differences are reflected in the current year's operations. Our consolidated results of operations are affected by changes in the valuation of the Mexican peso to the extent that ICMOSA or GISE have peso denominated net monetary assets or net monetary liabilities. In periods where the peso has been devalued in relation to the U.S. dollar, a gain will be recognized to the extent there are peso denominated net monetary liabilities while a loss will be recognized to the extent there are peso denominated net monetary assets. In periods where the peso has gained value, the converse would be recognized. Income Taxes: Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We review the recoverability of deferred taxes and provide valuation allowances to the extent necessary. Stock Options: We account for employee stock options using the intrinsic value method rather than the alternative fair-value accounting method. Under the intrinsic value method, if the exercise price of the employee's stock option equals the market price of the underlying stock at the date of the grant, no compensation expense is recognized. For the year ended December 31, 2001, the last year of stock option grants, no compensation cost associated with stock options was reflected in our results of operations. Pro forma information regarding net loss and net loss per share is required by SFAS No. 148. However, the effect of including such information would be anti-dilutive since it would decrease the actual net loss and net loss per share. Discontinued Operations: In November 2003, with the divesture of our Victoria juice and oil plant, the company discontinued any further operating activities related to our juice and oil business segment. Accordingly, our consolidated statements of operations include the results of operations of our juice and oil business segment in discontinued operations for all period presented. The prior year consolidated balance sheet, consolidated statements of operations and consolidated statements of cash flows have been restated. Recently Adopted Accounting Pronouncements: In August 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset Retirement Obligations," which establishes the accounting standards for the recognition and measurement of obligations associated with the retirement of tangible long-lived assets. Under SFAS No. 143, legal obligations associated with the retirement of long-lived assets will be recorded as a liability when the retirement obligation arises, and the cost capitalized as part of the related long-lived assets and amortized over the life of the assets. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. 36 The adoption of SFAS No. 143 on January 1, 2003 did not have any impact on our consolidated financial position or results of operations. In April 2002, the FASB issued SFAS No. 145, "Rescission of SFAS Nos. 4, 44 and 64, Amendment of SFAS No. 13, and Technical Corrections." This pronouncement, among other things, requires certain gains and losses on the extinguishment of debt previously treated as extraordinary items to be classified as income or loss from continuing operations. SFAS No. 145 is effective for fiscal years beginning after May 15, 2002. We elected to adopt SFAS No. 145 in 2002 related to a previously reported gain from the settlement of certain debt with a Mexican bank, and reclassified the amount previously reported in 2001 as an extraordinary amount to other income. In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This pronouncement addresses the financial accounting and reporting costs associated with an exit activity (including restructuring) or with a disposal of long-lived assets. SFAS No. 146 requires an entity to record a liability for costs associated with an exit or disposal activity when that liability is incurred and can be measured at fair value, and to subsequently adjust the recorded liability for changes in estimated cash flows. SFAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002. The initial adoption of SFAS No. 146 on January 1, 2003 did not have any impact on our consolidated results of operations or financial position. In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others." Interpretation No. 45 supersedes Interpretation No. 34, "Disclosure of Indirect Guarantees of Indebtedness of Others," and provides guidance to guarantors on the recognition and disclosure concerning obligations under certain guarantees in interim and annual financial statements. The initial recognition and measurement provisions of Interpretation No. 45 are effective for guarantees issued or modified after December 31, 2002, and are to be applied prospectively. The disclosure requirements were effective for financial statements for interim or annual periods ending after December 15, 2002. The initial adoption of Interpretation No. 45 on January 1, 2003 did not have any impact on our consolidated results of operations or financial position. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure." SFAS No. 148 amends SFAS No. 123, "Accounting for Stock-Based Compensation," and provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. This Statement also amends the disclosure requirements of SFAS No. 123 to require prominent disclosure in annual and interim financial statements about the effects of stock-based compensation. The transition guidance and annual disclosure provisions of SFAS No. 148 are effective for financial statements issued for fiscal years ending after December 15, 2002. The interim disclosure provisions of this Statement are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. The adoption of SFAS No. 148 during the first quarter of 2003 did not have any impact on our consolidated financial position or results of operations. In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under FASB No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 149 is generally effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The adoption of SFAS No. 149 during the third quarter of 2003 did not have impact on our financial accounting and reporting. In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It required that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Through December 31, 2003 we have not issued financial instruments with characteristics of both liabilities and equity. NOTE 2 - NON-OPERATING GAIN FROM FORGIVENESS OF DEBT In June 2001, our Mexico subsidiary, ICMOSA, entered into a settlement agreement with Bancrecer, S.A., Institucion de Banca Multiple ("Bancrecer") to resolve all outstanding issues between them, including the existing 37 litigation relating to the outstanding $4.0 million term note and accrued interest of approximately $750,000. Under the terms of the settlement agreement, ICMOSA paid $1.8 million to Bancrecer prior to the end of June 2001, as payment in full of all outstanding obligations. The portion of principal and interest forgiven by Bancrecer of approximately $2.9 million, net of professional fees associated with the settlement, is included under the caption "Gain on forgiveness of debt" in other income (expense) in our 2001 consolidated statement of operations. NOTE 3 - LOSS PER SHARE The following table sets forth the computation of our basic and diluted net loss per share:

YEARS ENDED DECEMBER 31, ------------------------------------------- ~~2000~~ 2001 2002 2003 -------- -------- -------- (IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS) NUMERATOR Loss from continuing operations .................... $ (2,417) $ (6,391) $ (8,303) Loss from discontinued operations .................. (6,348) (1,551) (1,644) -------- -------- --------- Net loss ........................................... $ (118,~~363~~765) $ (87,~~765~~942) $ (79,~~942~~947) ========~~===~~ ========~~====~~ ========= DENOMINATOR Denominator for basic and diluted net loss per share - weighted average shares outstanding .............. ~~13,938~~ 17,618 21,045 21,045 ========~~===~~ ========~~====~~ ========= Basic and diluted net loss per share: Continuing operations ........................... $ (0.8214) $ (0.31) $ (0.39) Discontinued operations ......................... (0.36) (0.07) (0.08) -------- -------- ---------- Basic and diluted net loss per share ............ $ (0.50) $ (0.38) $ (0.47) ========~~===~~ ========~~====~~ =========

At December 31, 2001, 2002 and 2003, we had common stock options outstanding of 132,500, 95,000 and 80,000, respectively, which were not included in their respective years per share calculations because their effect would have been anti-dilutive. NOTE 4 - INVENTORIES Inventories consist of the following:

DECEMBER 31, ------------- ~~2001~~ 2002 2003 ----- ----- (IN THOUSANDS) Finished goods - Cut ~~fruits~~fruit ............... $2,~~964~~939 $23,~~939~~063 ~~Juice~~Raw materials and ~~oils~~supplies ........ ~~554 -- ------ ------ 3,518 2,939 Pineapple orchards~~ ....... 1,~~219~~582 ~~-- Raw materials and supplies 2,018~~ 1,~~825~~181 Advances to suppliers .................... ~~805~~ 457 75 ------ ------ Total .......................... $74,~~560~~978 $54,~~221~~319 ====== ======

During 2002, we recorded non-cash inventory write-downs of $1.1 million related to our pineapple orchards as a result of our decision to discontinue the pineapple operations of our packaged fruit business segment. 38 NOTE 5 - PROPERTY, PLANT AND EQUIPMENT AND LAND LEASE Property, plant and equipment, at cost, consist of the following:

DECEMBER 31, -------------------- ~~2001~~ 2002 2003 -------- -------- (IN THOUSANDS) Land - Lemon ......................... $ ~~2,398~~609 $ ~~2,505~~609 Other ......................... ~~437~~436 ~~762~~444 Orchards - Lemon ......................... ~~14,272~~ 15,905 2,338 Buildings and improvements ........ 65,~~219~~954 6,~~559~~005 Machinery and equipment ........... 1311,~~839~~640 169,~~816~~826 -------- -------- 3734,~~165~~544 4219,~~547~~222 Accumulated depreciation .......... (98,~~706~~455) (10,~~061~~952) -------- -------- Total ................... $ 2726,~~459~~089 $ 328,~~486~~270 ======== ========

Due to the continued unfavorable and volatile worldwide market prices of FCOJ that existed over the past several years and negative long-term prospects for the FCOJ market, we explored various strategic alternatives for our juice and oil business segment. In March 2003, the company received formal offers for its juice and oil processing plants. As a result of these offers, and in accordance with SFAS No. 144, we recorded in our fourth quarter of 2002, a non-cash charge of $557,000, which is the difference between the offer prices we at which we agreed to sell the plants and the carrying amounts of these assets as of December 31, 2002. This charge is associated with our discontinued juice and oil business segment and is included under the caption "Loss from discontinued operations, net of income taxes" in our 2002 consolidated statement of operations. Subsequently, we entered in to sale agreements with these parties and on June 10, 2003 and November 17, 2003, respectively, we finalized the sales of these facilities. Based on the continued losses at our Mexican subsidiary ICMOSA, insufficient cash flows to fund current operations during peak processing periods, inability to obtain additional capital to finance the business, inability to sell assets due to existing bank liens, working capital deficits, continued losses and the existence of the lawsuit, our board of directors, decided in the fourth quarter of 2003 to explore strategic alternatives, including the sale of all or part of ICMOSA. As a result of this decision, and in accordance with SFAS No. 144 all the long-lived assets related to ICMOSA's operations were written down to their estimated fair value, which resulted in the recording of a non-cash charge of approximately $5.0 million in the fourth quarter of 2003. Fair market value was estimated based on recent purchase offers for ICMOSA. On August 30, 2004, the company sold its packaged fruit business segment to Del Monte, which included the sale, of all of its outstanding shares in ICMOSA. Our land lease represents a 30-year lease associated with 2,100 hectares (approximately 5,300 acres) of rural land used for the growing of lemons, comprising substantially all the land of our Flor de Maria grove. The land associated with the lease was acquired in 1999 from a group of local Mexican land owners, which acquired the land under the "Ejido" system of land ownership and was prepaid at the then land sales price of $1.9 million. In late 2001, we entered into a formal lease agreement with the landowners. Although we are currently in the process of transitioning the lease into a land purchase, we are amortizing the cost over the remaining life of the lease. This land lease had been previously classified in our lemon land in our consolidated balance sheets. Substantially all of the company's long-lived assets are located in Mexico. 39 NOTE 6 - SHORT-TERM DEBT Short-term debt consists of the following:

DECEMBER 31, ------------------ ~~2001~~ 2002 2003 ------- ------- (IN THOUSANDS) Note payable to Rabobank Nederland under a discretionary uncommitted line of credit which expired January 2, 2002, cross-collateralized amongst all of our subsidiaries and guaranteed by the company..................................... $1,887 $1,461 Notes payable to Bancomext for pre-export financing, interest at various rates from 5.11% to 8.47%, secured by certain receivables of a Mexican subsidiary .................................................................. $ 3,500 $ 3,500 ~~Note~~Promissory note payable to aM&M ~~Mexican credit union~~Nominee, ~~unsecured, 8.0~~10%, due ~~March~~June ~~2002~~2003 ................... 100 - ------- ------- 3,600 3,500 Less - Short-term debt in default ............................................~~.....~~ ~~50 -- Promissory note payable to M&M Nominee~~(3,500) ~~10%~~(3,500) ~~due~~------- ~~June~~------- ~~2003~~Short-term debt .............................................................. --$ 100 ~~------~~$ -~~-----~~ ~~$5,437 $5,061~~ ======= =======

As of December 31, 2002 and 2003, our Mexican subsidiary, ICMOSA, owed $3.5 million under a secured pre-export U.S dollar financing loan agreement with Banco Nacional de Comercio Exterior, S.N.C. ("Bancomext"). The outstanding balance, which consisted of six separate notes that became due in various amounts and dates during 2002, were not renewed by Bancomext, and were in default. As of December 31, 2003, unpaid interest under these notes, computed at the default interest rate, is approximately $625,000. On August 30, 2004, the company sold its packaged fruit business segment to Del Monte, which included all of the outstanding shares of ICMOSA. As part of the transaction, the Bancomext debt was retired. The Bancomext outstanding balance has been included under the caption "Short and long-term debt in default" in our December 31, 2002 and 2003 consolidated balance sheets. The weighted-average interest rate on our short-term borrowings as of December 31, 2002 and 2003 was 7.7% and 11.02%, respectively. The 2003 rate included the default rate on the Bancomext debt. NOTE 7 - LONG-TERM DEBT Long-term debt consists of the following:

DECEMBER 31, ------------------ ~~2001~~ 2002 2003 ------- ------- (IN THOUSANDS) Long-term financing with FOCIR, due between February ~~2009~~2005 and 2011, including ~~accreted~~ interest paid quarterly ...................~~..............................~~ $ 4,~~936~~610 $ 4,~~611~~199 Note payable to a Mexican bank, collateralized by certain plant and equipment in Mexico; principal and interest at 18.5%, payable monthly; unpaid principal and interest due November 2004 .............................................................. 613 462 Note payable to Banorte .....................................~~........~~ 3,~~360 3,~~010 ~~Note payable to a Mexican bank; collateralized by certain plant and equipment in Mexico; principal and interest at Libor plus 8%~~2,735 ~~payable monthly ............................................... 117 96~~ Other notes payable .........................................~~........~~ 68 40 12 ------- ------- 97,~~094~~660 86,~~219~~946 Less ~~current~~- Current portion and long-term portion in default .....~~...........................................~~ (23,~~243~~038) (32,~~946~~747) ------- ------- Long-term debt, excluding current portion ...................~~........~~ $ 64,~~851~~622 $ 4,~~273~~199 ======= =======

During 2002, ICMOSA entered into a restructured U.S dollar loan agreement with Grupo Financiero Banorte ("Banorte") that amortized the outstanding principal balance over a period of five and one-half years. The loan repayment schedule required quarterly payments of principal and interest (Libor plus 3.50%) through December 31, 2007, with $300,000 due over the next twelve months. As of December 31, 2002 and 2003, $3.0 million and $2.7 million, respectively, were outstanding under the restructured loan agreement. The restructured loan agreement was secured by certain assets of ICMOSA, corporate guarantees by the company and certain covenants that, amongst others, restricted future borrowings and contained a cross-default provision. As a result of the default of the Bancomext loan, we were in default of the Banorte loan agreement and the entire loan balance was included under the caption "Short and long-term debt in default" in our consolidated balance sheets at December 31, 2002 and 2003. On August 30, 2004, the company sold its packaged fruit business segment to Del Monte, which included all of the outstanding shares of ICMOSA. As part of the transaction, the Banorte debt was retired. 40 On February 21, 2000, we entered into a $48.0 million Mexican pesos (U.S. $5.1 million at the exchange rate in effect at that time), 9-year term financing agreement with FOCIR. Under the terms of the FOCIR Agreement, FOCIR agreed to provide up to $48.0 million Mexican pesos to fund additional lemon grove costs, which included land preparation, planting, equipment, irrigation systems and grove maintenance. This financing represents the purchase of an equity interest in GISE of approximately 17.6%. Amounts advanced under the FOCIR Agreement are classified outside equity due to a mandatory redemption provision. As of December 31, 2002 and 2003, advances under the FOCIR Agreement were $4.6 million and $4.2 million ($47.0 million Mexican pesos), respectively. The terms of the FOCIR Agreement provided for the calculation and accrual of annual accretion using one of two alternative methods. The first method calculated accretion by multiplying the year's Mexican inflation index rate plus 4.2% by the FOCIR balance. The second method determined annual accretion by multiplying GISE's shareholders equity; using Mexican generally accepted accounting principles, by factors of 1.126 for 2002, and 1.168 for 2003, and then multiplying by the FOCIR equity interest percentage. The calculation that resulted in the greater amount would be the annual accretion amount. Accretion would accumulate over the 9-year period of the prior FOCIR Agreement and would be paid only upon expiration or early termination of the FOCIR Agreement. As of December 31, 2002 and 2003, accreted interest accumulated under the FOCIR Agreement amounted to $1.4 million and $1.8 million, respectively, which is classified as a long-term liability in our consolidated balance sheets as of December 31, 2002 and 2003. As of December 31, 2003, the weighted average accretion rate for all advances under the FOCIR Agreement was approximately 10.6%. The FOCIR Agreement also contained, among other things, certain provisions relating to GISE's future financial performance, the establishment of an irrevocable trust guaranteeing the FOCIR debt, which included transferring to the trust GISE common shares that represented 33.4% of GISE's outstanding shares and the governance of GISE. As of December 31, 2002 and 2003, we were not in compliance with certain of the FOCIR Agreement covenants, and accordingly, we were in default of the agreement. On August 4, 2004, the company and FOCIR entered into a new agreement that restructured its debt into a $47.0 million Mexican peso (approximately U.S. $4.2 million) secured term loan. Under the terms of the restructured agreement, FOCIR agreed to forgive all accreted interest (approximately $2.0 million which will be recognized as income in 2004) and changed the repayment terms to a seven year note payable in increasing amounts with the first annual principal payment due in October 2005 with interest payable quarterly at the rate of 2.5% plus Certificados de la Testorenia de la Federation (CETES), the Mexican Treasury Bill rate which was approximately 8.3% at the restructuring date. The FOCIR debt is secured by a first lien on our El Cielo lemon grove. Prior to the restructuring of the FOCIR debt, the company was in violation of several of the previous agreement covenants. These defaulted covenants have been eliminated from the new agreement. Certain of our Mexico loan contracts establish restrictions and obligations with respect to the application of funds and require maintenance of insurance on the assets and timely presentation of financial information. As of December 31, 2003, approximately $7.0 million of net property, plant and equipment and substantially all receivables were pledged as collateral under short and long-term debt agreements. As of August 30, 2004, in conjunction with the debt retirement associated with the Del Monte and the FOCIR debt restructuring, approximately $600,000 is now collateralized under our debt agreements. At December 31, 2003, U.S. dollar denominated long-term debt, which has been classified in current liabilities due to defaults, amounted to $2.7 million as compared to Mexican peso denominated long-term debt of $4.2 million. During the years ended December 31, 2001, 2002 and 2003, the company incurred interest charges of $2.0 million, $1.4 million and $1.1 million, respectively, of which $1.1 million, $961,000 and $50,000, respectively, was capitalized as a portion of our long-term orchard development costs. 41 Scheduled maturities of long-term debt, as adjusted to reflect the Del Monte transaction and the FOCIR restructuring, are as follows:

PAYMENTS -------- (IN THOUSANDS) ~~2003~~2004.........................~~..................~~ $ ~~936~~-- ~~2004~~2005.........................~~..................~~ ~~312~~210 ~~2005~~2006.........................~~..................~~ ~~400~~420 ~~2006~~2007.........................~~..................~~ ~~700~~630 ~~2007~~2008.........................~~..................~~ ~~1,260~~735 Thereafter...................~~..................~~ 42,~~610~~204 --------- $ 84,~~218~~199 =========

NOTE 8 - RELATED PARTY TRANSACTIONS Effective September 1, 2000, we entered into an agreement with Promecap, S.C. ("Promecap") for the services of Emilio Castillo Olea to become our President and Chief Executive Officer at the annual rate of $150,000. As of December 31, 2003, the company owed Promecap $362,500 in connection with this agreement. Mr. Castillo was also a Director of Promecap, a financial advisory services firm to MSIF, which owned 80% of M&M Nominee. M&M Nominee was our largest shareholder (see discussion below). On January 31, 2003, Mr. Castillo resigned his officer positions with our company, and on May 30, 2003, resigned as a Director. On January 10, 2003, January 24, 2003, February 11, 2003 and March 6, 2003, respectively, we received $125,000, $200,000, $110,000 and $125,000 under the terms of short-term promissory notes, interest at 10%, from our then largest shareholder. These notes, including an additional note under which we received $100,000 on December 18, 2002, were repaid in April 2003, including accrued interest of approximately $16,000. On May 20, 2004, the company's board of directors appointed its then chairman, Jakes Jordaan, to serve as its President and Chief Executive Officer. Mr. Jordaan is a member of the firm Jordaan & Riley, PLLC, which served as the company's legal counsel. Fees paid to Mr. Jordaan's firm for legal services rendered were $242,000, $98,000 and $106,000, for the years ended December 31, 2001, 2002 and 2003, respectively. NOTE 9 - LEASES As of December 31, 2003 we leased under operating leases our corporate office, certain equipment and several citrus groves. As a result of the settlement and termination of our corporate lease and the sale of our ICMOSA subsidiary in August 2004, the company no longer has any material long-term operating leases. Payments made under our operating leases were $275,000, $154,000 and $84,000 for the years ended December 31, 2001, 2002 and 2003, respectively. 42 NOTE 10 - INCOME TAXES AND MEXICAN STATUTORY PROFIT SHARING Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities as of December 31, 2002 and 2003 are as follows:

~~YEAR~~DECEMBER ~~AMOUNT~~31, ---- ------------------ 2002 2003 --------- --------- (IN THOUSANDS) Deferred tax assets: Net operating loss carryforwards................ $ ~~171~~19,178 ~~2004~~$ 14,186 Asset tax credit................................ ~~148~~2,680 ~~2005~~2,923 Reserves for impairment of long-lived assets.... -- 1,035 Inventories..................................... ~~135~~139 ~~2006~~112 Accrued liabilities............................. ~~376~~655 ~~2007~~666 Reserves........................................ 71216 ~~Thereafter~~371 Other........................................... ~~143~~318 161 --------- $-------- Total deferred tax assets......................... 23,186 19,454 Less valuation allowance.......................... (17,457) (18,434) --------- -------- Net deferred tax assets........................... 5,729 1,~~044~~020 --------- -------- Deferred tax liabilities: Depreciation.................................... 1,443 -- Inventories..................................... 4,286 1,020 --------- -------- Deferred tax liabilities.......................... 5,729 1,020 --------- -------- Net deferred tax.................................. $ -- $ -- ========= ========

Loss from continuing operations before income taxes relating to our operations in the United States and Mexico is as follows:

YEARS ENDED DECEMBER 31, ------------ ~~2001 2002~~ ---- ---- (IN THOUSANDS) Deferred tax assets: Net operating loss carryforwards.............. $17,502 $19,178 Inventories................................... 158 139 Asset tax credit.............................. 2,285 2,680 Credit available to offset Mexican taxes...... 165 -- ~~Accrued liabilities........................... 545 655 Reserve for doubtful accounts................. 27 23 Other......................................... (97) 511~~ ---------- 2001 2002 2003 -------- ~~Total deferred tax assets....................... 20,585 23,186 Less valuation allowance........................ (14,060) (17,457)~~ -------- -------- ~~Net~~(IN ~~deferred~~THOUSANDS) ~~tax~~United ~~assets~~States...............~~..........~~ $ 6(1,~~525~~392) $ ~~5,729 ======= ======= Deferred tax liabilities: Depreciation.................................. $~~ (1,~~382~~096) $ ~~1,443~~(329) ~~Inventories~~Mexico......................~~.............~~ ~~5,149~~208 (4,~~286~~777) ~~Other.........................................~~(7,324) -- ------ -------- -------- ~~Deferred~~$ ~~tax~~(1,184) ~~liabilities........................~~ $ 6(5,~~531~~873) $ 5(7,~~729~~653) ======== ======== ========

The components of income tax expense from continuing operations include the following:

YEARS ENDED DECEMBER 31, ------------------------------ ~~2000~~ 2001 2002 2003 ------- -------- -------- (IN THOUSANDS) ~~United~~Foreign ~~States~~- current asset tax.......... $ ~~(2,585)~~605 $ ~~(4,903)~~518 $ ~~(3,613)~~650 ~~Mexico~~Foreign - deferred.......... ~~(9,838) (2,652) (3,789) Other~~........... 13628 -- -- -------- -------- -------- $~~(12~~ 1,~~410)~~233 $ ~~(7,555)~~518 $ ~~(7,402)~~650 ======== ======== ========

The differences between the actual income tax expense and the amount computed by applying the U.S. statutory federal corporate tax rate of 34% to the loss from continuing operations before income taxes are as follows: 43

YEARS ENDED DECEMBER 31, ------------------------------- ~~2000~~ 2001 2002 2003 --------- -------- -------- (IN THOUSANDS) ~~Foreign~~Benefit -computed ~~current~~at ~~asset~~U.S. ~~tax~~federal statutory rate......... $ ~~312~~(403) $ ~~582~~(1,997) $ ~~540~~(2,602) ~~Foreign~~Increase -in ~~deferred~~valuation reserve........................... 4,329 3,397 977 Permanent differences, foreign taxes and other (3,926) (1,~~359~~400) ~~628~~1,625 Asset tax............................................... 1,233 518 650 -- ------- -------- -------- $( 1,~~047)~~233 $ ~~1,210~~518 $ ~~540~~650 ========= ======== ========

For the three years ended December 31, 2003, the company paid only asset taxes. Consequently, our income tax expense was not based on the statutory federal income tax rates in Mexico. The statutory federal income tax rate in Mexico for 2001, 2002 and 2003 was 35%, 35% and 34%, respectively. Beginning in the year 2003, the statutory federal income tax rate in Mexico will decrease annually by 1% until the rate reaches 32% in the year 2005. Statutory income tax rates at our Mexican subsidiary GISE, are at half of the federal income tax rates since they operate in the agricultural industry in Mexico. As of December 31, 2003, we had the following operating loss and asset tax carryforwards available to offset future U.S. and Mexican taxable income and income tax liabilities, respectively:

~~YEARS~~AVAILABLE ~~ENDED~~TAX ~~DECEMBER~~LOSS ~~31,~~CARRYFORWARDS RECOVERABLE ASSET TAX YEAR OF -------------------------------- ~~2000~~--------------------- ~~2001~~EXPIRATION ~~2002~~U.S. MEXICO TOTAL MEXICO ---------- ---- ------ ----- ------ (INIn ~~THOUSANDS~~thousands) ~~Benefit~~2004 ~~computed~~$ at- ~~U.S.~~$ ~~federal~~- ~~statutory~~$ ~~rate..~~- $(4 109 2007 - 1,~~219)~~469 $(1,469 85 2008 - 2,~~644)~~683 $(2,~~517)~~683 ~~Increase~~98 in2009 ~~valuation~~- ~~reserve~~2,476 ~~...................~~2,476 258 2010 - 9,615 9,615 461 2011 - 3,~~140~~143 43,~~329~~143 608 2012 2,887 3,~~397~~558 ~~Permanent~~6,445 ~~differences~~641 ~~and~~2013 ~~foreign~~- ~~taxes~~662 ~~.........~~662 ~~431~~663 ~~(139)~~2018 ~~(544)~~2,915 ~~Other~~- ~~...........................................~~2,915 ~~(399)~~- ~~(336)~~2019 ~~204~~5,773 - 5,773 - 2020 3,543 - 3,543 - 2021 5,454 - 5,454 - 2022 1,104 - 1,104 - 2023 300 - 300 - -------- --------- --------- ------- $(1 21,~~047)~~976 $ 123,~~210~~606 $ ~~540~~45,582 $ 2,923 ======== ========= ========= =======

In June 2001, we completed a rights offering wherein M&M Nominee, our largest shareholder, at the time purchased an additional 6,849,315 shares of our common stock increasing their ownership from 45.2% to 62.48%. Accordingly, we experienced an ownership change as defined by Section 382 of the Internal Revenue Code of 1986, as amended, which limits the use of net operating loss carryforwards where changes occur in the stock ownership of a company. As a result, this limitation could allow us to use only a portion of our pre-change net operating loss carryforwards, which amounted to $17.7 million at December 31, 2002, to reduce subsequent taxable income in the United States, if any for federal income tax purposes. Based upon the limitations of Section 382, we were allowed to use approximately $425,000 of such losses each year to reduce taxable income, if any, until such unused losses expire. On July 7, 2004, we announced that Cardinal purchased certain shares of UniMark common stock in a private transaction from MSIF. MSIF was a member of UniMark's controlling shareholder, M&M Nominee. As a result of this transaction, additional Section 382 limitations could further reduce the amount of our net operating losses available each year to reduce taxable income. Our Mexican subsidiaries tax loss and asset tax carryforwards have been adjusted for the effects of inflation and are translated at the value of the Mexican peso as of year-end and can be annually inflation-adjusted until the date of their application against future taxable income for tax reporting purposes. 44 Under Mexican tax law, our Mexican subsidiaries are required to pay annually an asset tax, which is an alternative minimum tax, if the asset tax calculation is greater than income taxes payable for the year. Asset taxes are calculated at 1.8% of assets less certain liabilities and can be carriedforward for up to 10 years as credits against future income taxes payable. Before any asset tax carryforwards can be applied, all net operating losses must be first utilized. Income tax expense in 2001 included recoverable asset taxes of $605,000 and in 2002 and 2003 income tax expense related solely to recoverable asset taxes. On August 30, 2004, the company sold its packaged fruit business segment to Del Monte, which included all of the outstanding shares of ICMOSA. As of December 31, 2003, approximately $12.4 million of our available Mexican tax loss carryfowards and $2.5 million of our Mexican recoverable asset taxes were associated with ICMOSA. As required by Mexican law, our Mexican subsidiaries are required to pay employee profit sharing to all its employees in addition to their contractual compensation and benefits. Currently the statutory rate for employee profit sharing is 10% and is based on each year's taxable income for tax reporting purposes, adjusted to eliminate most of the effects of Mexican inflation. As a result of our Mexican subsidiaries reporting losses for income tax purposes over the past several years, current payments have not been required. A liability, however, must be recognized for deferred employee profit sharing purposes based on temporary differences between income for financial reporting purposes and income for purposes of computing the current amount of the employee profit sharing payment. As of December 31, 2002 and 2003, the liability for deferred Mexican employee profit sharing was $1.4 million and $23,000, respectively, and is included under the caption "Deferred Mexican statutory profit sharing" in our consolidated balance sheets. NOTE 11 - STOCK OPTIONS In 1994, we adopted the 1994 Employee Stock Option Plan and an Outside Director Stock Option Plan (the "1994 Plans"). Under the 1994 Plans, our Board of Directors were authorized to grant options to employees and consultants and to our outside directors to purchase up to 820,000 and 100,000 shares respectively, of our common stock which were reserved for such purposes. The terms and vesting period for options granted under the 1994 Plans were fixed by our Board of Directors at the time of grant provided that the exercise period was not greater than 10 years from the date of grant. The exercise price for any options granted under the 1994 Plans for employees and consultants could not be less than 100% and 85% of the fair market value of our common stock on the date of the grant for Incentive and Non-statutory Stock Options, as defined, respectively. The exercise price for options granted under the 1994 Plans for outside directors could not be less than 100% of the fair market value of our common stock on the date of grant. In 1999, we adopted the 1999 Stock Option Plan (the "1999 Plan") under which stock options could be granted to employees, outside directors and consultants to purchase our common stock. The 1999 Plan, which is similar to the 1994 Plan for employees, is for a period of ten years and has reserved 500,000 shares of our common stock for stock option grants. Effective with the adoption of the 1999 Plan, we discontinued granting options under the 1994 Plans. A summary of the status of all of our stock options at December 31, 2001, 2002 and 2003 and the changes during the periods ended are presented in the following tables. 45

~~AVAILABLE~~EMPLOYEE ~~TAX~~STOCK ~~LOSS~~OUTSIDE ~~CARRYFORWARDS~~DIRECTORS ~~RECOVERABLE~~STOCK ~~ASSET~~OPTION ~~TAX~~PLAN ~~YEAR~~OPTION OFPLAN ----------------------- --------- -------------- WEIGHTED- WEIGHTED-~~-----~~ ~~EXPIRATION~~AVERAGE ~~U.S.~~AVERAGE ~~MEXICO~~EXERCISE ~~TOTAL~~EXERCISE ~~MEXICO~~1994 PLANS OPTIONS PRICE OPTIONS PRICE ---------- ------- --------- ------- -------- ~~(In~~Options ~~thousands)~~outstanding, ~~2003~~January $1, --2001 $... ~~742~~133,000 $ ~~742~~7.25 25,000 $ ~~125~~3.28 ~~2004~~Granted ............................ - - ~~1,374~~- 1- Forfeited .......................... (133,~~374~~000) ~~270~~7.25 ~~2005~~(2,500) 6.88 -- -- -- -- ~~2007~~ -- ~~1,731 1,731 90 2008~~ -- ~~2,851 2,851 105 2009~~ --- ~~6,369~~Options 6outstanding,~~369~~ ~~273~~December ~~2010~~31, 2001.. -- ~~10,198~~7.25 1022,~~198~~500 ~~491~~2.88 ~~2011~~Granted ............................ - - ~~3,331~~- ~~3,331~~- ~~646~~Forfeited ~~2012~~.......................... ~~2,887~~- ~~5,990~~- 8(22,~~877~~500) ~~661 2018~~ 2~~,915~~.88 -- ~~2,915~~ -- ~~2019 5,773~~ -- ~~5,773~~ -- ~~2020~~Options 3outstanding,~~543~~ --December 331,~~543~~ 2002.. - - ~~2021~~- ~~5,454~~ -- ~~5,454~~Granted ............................ - - ~~2022~~- ~~1,116~~Forfeited .......................... -- ~~1,116~~ -- -~~--------~~ -~~--------~~ --------- --------- $Options 21outstanding,~~688~~ $December 3231,~~586~~ $2003.. ~~54,274~~- $- ~~2,661~~- ========= ========= ~~=========~~Exercisable ~~=========~~at December 31, 2001 ............................... - - 25,000 3.28 2002 ............................... - - 22,500 2.88 2003 ............................... - - - -

~~1994 PLANS ---------- EMPLOYEE STOCK OUTSIDE DIRECTORS STOCK OPTION PLAN OPTION PLAN --------------------------- ---------------------------~~ WEIGHTED- ~~WEIGHTED-~~ AVERAGE ~~AVERAGE~~ EXERCISE ~~EXERCISE~~1999 ~~OPTIONS~~PLAN ~~PRICE~~ OPTIONS PRICE -------- -~~---------~~ -------- ---------- Options outstanding, January 1, ~~2000~~2001.... ~~243,000 $ 5~~.94......... 3580,000 ~~$ 5~~2.4605 Granted...................................... --30,000 --0.57 ~~-- --~~ Forfeited............................. ~~(110,000) 4~~.36...... ~~(10,000)~~- 102.9451 -------- ~~--------~~ Options ~~outstanding,~~Outstanding December 31, ~~2000~~2001.. ~~133,000 7~~.25.......... 25110,000 31.2865 Granted...................................... -- -- ~~-- --~~ Forfeited.................................... (~~133~~15,000) 71.2537 ~~(2,500) 6.88~~ -------- ~~--------~~ Options ~~outstanding,~~Outstanding December 31, ~~2001~~2002............. ~~-- -- 22~~95,~~500~~000 21.8870 Granted...................................... -- -- ~~-- --~~ Forfeited .................................... ~~-- --~~ (2215,~~500~~000) 21.8898 -------- ~~--------~~ Options outstanding, December 31, ~~2002~~2003............. --80,000 1.64 -- -- --- ~~======== ========~~ Exercisable at December 31, ~~2000~~2001.................................. ~~133,000 7~~.25..... 2565,000 32.2803 ~~2001~~2002........................................ ~~-- -- 22~~65,~~500~~000 21.8870 ~~2002~~2003........................................ --80,000 ~~-- -- --~~1.64

At December 31, 2003 there were no options outstanding under the 1994 Plans for both employees and outside directors. Options outstanding at December 31, 2003 under the 1999 Plan had exercisable prices that ranged from $0.5625 to $2.50 and a weighted-average remaining contractual life of 1.25 years. Under the 1999 Plan, all options granted to outside directors become exercisable on the first anniversary of grant while options granted to employees and consultants vest ratably over four years. The weighted average exercise price of all options granted is the same as the weighted average fair market value as all options were granted at the market price of our common stock on the grant dates. Effective October 1, 2004, the company granted an officer stock options to purchase 2,104,182 shares of company common stock at an initial option price of $0.40 per share, which was the fair market value of the company's common stock at the date of grant. The options vest in accordance with a vesting formula, as provided for in the option agreement. The initial option price is subject to adjustments based on future events. We have elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB No. 25) and related interpretations, in accounting for our employee and outside director stock options because, as discussed below, the alternative fair value accounting provided for under FASB No. 123, 46 "Accounting for Stock-Based Compensation," requires use of option valuation models that were not developed for use in valuing stock options. Because the exercise price of our stock options equals or exceeds the market price of the underlying stock on the date of grant, no compensation expense is recognized under APB No. 25. Pro forma information regarding net loss and net loss per share, as required by FASB No. 123 as if we had accounted for our stock options under the fair value method, has been omitted as the fair value and number of outstanding options is not significant. Additionally, the effect of amortization of the fair value of previously granted options is not considered to be material. NOTE 12 - LEMON GROVES In March 2003, we received formal offers from Coca-Cola to purchase our Victoria juice and oil plant and rescind certain contract rights for the growing and processing of lemons for aggregate cash payments from Coca-Cola of $16.0 million. In April 2003, we consummated the portion of the Coca-Cola transaction pertaining to the rescission of all contract rights and obligations for the growing and processing of lemons for an aggregate cash payment of $12.5 million, plus value added taxes. In this regard, we retained the approximately 7,100 acres of lemon groves, which included all the land, irrigation systems and related agricultural equipment. As part of the sale agreement we are contractually restricted from industrially processing our lemons and are limited in marketing our lemons solely as fresh fruit until July 30, 2007. The proceeds from the rescission of the contract rights were offset against our capitalized orchard development costs during the second quarter of 2003, which were classified in property, plant and equipment in our consolidated balance sheet at December 31, 2002. As of December 31, 2003, our lemon groves consisted of 2,871 hectares (approximately 7,100 acres). This land, which is situated in the northern states of Tamaulipas and San Luis Potosi, consists of two separate groves with different maturity profiles. These groves were initially planted with approximately 800,000 lemon trees. Pursuant to the terms of the now cancelled long-term supply contract, Coca-Cola provided us, free of charge, 765,000 lemon tree seedlings that were used for planting approximately 6,023 acres. We also operate our own nursery where young seedlings are prepared for planting, which provided us with the remaining 35,000 trees, as well as acting as a source of replanting for damaged trees. In connection with the Coca-Cola transaction pertaining to the rescission of all contract rights and obligations for the growing and processing of lemons for an aggregate cash payment of $12.5 million, we elected to cease active cultivation of recently planted lemon tree seedlings and used some for replanting of damaged trees. In October 2004, we commenced actively cultivating the plantings that were abandoned in 2003. As part of the sale agreement we are contractually restricted from industrially processing our lemons and are limited in marketing our lemons solely as fresh fruit until July 30, 2007. All costs incurred to plant and maintain our lemon orchards were capitalized and deferred through March 31, 2003. As a result of the rescission of all contract rights and obligation for the growing of lemons in April 2003, these deferred and capitalized orchard development costs were reduced by the $12.5 million sale proceeds, and all remaining costs are being depreciated over their estimated useful lives commencing in the second quarter of 2003. In prior periods, it was determined that these deferred costs would be amortized based on the projected year's yield to total estimated yield over the life of the rescinded supply contract. As of December 31, 2003, our lemon groves consisted of the following:

~~1999~~GROVE ~~PLAN~~LOCATION HECTARES ACREAGE(A) INTEREST ----- ---- ~~WEIGHTED~~- ~~AVERAGE EXERCISE OPTIONS PRICE~~ -------- ---------- ~~Options outstanding, January 1, 2000.... 250,000 2.53 Granted............................... 30,000 1.17 Forfeited............................. (200,000) 2.51~~ -------- ~~Options Outstanding December 31, 2000 .. 80,000 2.05 Granted............................... 30,000 .57 Forfeited.............................~~ ---------- -------- ~~Options~~Gomez ~~Outstanding December 31~~Farias, ~~2001...~~El ~~110,000~~Cielo ~~1.65~~Grove ~~Granted~~...............~~................~~ ~~-- -- Forfeited............................. (15~~Tamaulipas,~~000)~~ ~~1.37~~Mexico ~~--------~~725 ~~Options outstanding December 31~~1,791 ~~2002~~Owned Cd... 95Valles,~~000~~ ~~1.70~~Flor ~~========~~de ~~Exercisable~~Maria ~~at December 31, 2000~~Grove...........~~......................~~ ~~52,000~~San ~~1.96~~Luis ~~2001................................. 65~~Potosi,~~000~~ Mexico 2~~.03~~,146 ~~2002................................. 65~~5,~~000~~301 ~~1.70~~Leased

(A) One hectare equals approximately 2.47 acres. The Flor de Maria grove lease is a 30-year land lease. The property rights associated with the lease were acquired in 1999 from a group of local Mexican landowners, whom acquired the land under the "Ejido" system of land ownership. The lease and purchase price of approximately $1.9 million were prepaid. In late 2001, we formally entered into the 30-year lease agreement with the landowners. Although we are currently in the process of transitioning the lease into a land purchase, we are amortizing the cost over the remaining life of the lease. In connection with transfer of this land, we have received a request from the "Ejido" for the payment of an additional $1.2 million ($12.6 million Mexican pesos). 47 NOTE 13 - SEGMENT AND GEOGRAPHIC INFORMATION For operating and financial reporting purposes, we have historically classified our business into two distinct business segments: packaged fruit and juice and oil. With the sales of our juice and oil business segments assets and our packaged fruit business segment, our business for operating and financial reporting purposes now consists solely of our fresh lemon business (agricultural business segment). We now conduct substantially all of our operations through our Mexican operating subsidiary, GISE and our newly-formed Delaware subsidiary, Sierra Foods, Inc. Within our packaged fruit business segment, we focused on niche citrus and tropical fruit products including chilled, frozen and canned cut fruits and other specialty food ingredients. The packaged fruit business segment processed and packaged our products at three processing plants in Mexico, which were located in major fruit growing regions. We utilized independent food brokers to sell our foodservice and industrial products in the United States. Sales to our Japanese consumers were facilitated through Japanese trading companies. We evaluate our segment performance and allocate resources based on profit or loss from operations before income taxes and commenced allocating a portion of our corporate general and administrative expenses in 2003. Inter-segment sales and transfers are insignificant. Our reportable segments are each managed separately because they process and distribute distinct products with different production processes. Information pertaining to the operations of our two business segments is set forth below.

PACKAGED FRUIT AGRICULTURAL TOTAL --------- ------------ ---------- YEAR ENDED DECEMBER 31, 2003 Revenues from external customers.................. $ 28,058 $ 258 $ 28,316 Interest expense.................................. 738 290 1,028 Interest revenue.................................. 36 37 73 Asset tax......................................... 535 115 650 Depreciation and amortization expense............. 1,024 372 1,396 Impairment loss................................... 5,243 - 5,243 Segment loss...................................... (6,888) (317) (7,205) Segment assets.................................... 24,915 15,075 39,990 Expenditures for long-~~-----------------------------~~lived ~~2000~~assets................ ~~2001~~87 278 365 YEAR ENDED DECEMBER 31, 2002 Revenues from external customers.................. $ 25,069 $ - $ 25,069 Interest expense.................................. 393 - 393 Interest revenue.................................. 71 - 71 Asset tax......................................... 518 - 518 Depreciation and amortization expense............. 1,053 - 1,053 Impairment loss................................... -~~--------------------------------------------------------~~ ~~Metric~~2,516 ~~tons~~2,516 96Segment 3loss...................................... (2,~~800~~252) 3(2,~~348~~516) (4,768) Segment assets.................................... 31,285 21,940 53,225 Expenditures for long-~~-------------------------------------------------------------~~lived ~~Billed~~assets................ ~~revenue~~127 $1,453 131,~~000~~580 YEAR ENDED DECEMBER 31, 2001 Revenues from external customers.................. $ ~~560~~27,~~000~~032 $ ~~475~~- $ 27,~~000~~032 Interest expense.................................. 922 - 922 Interest revenue.................................. 145 - 145 Asset tax......................................... 535 - 535 Depreciation and amortization expense............. 1,394 - 1,394 Impairment loss................................... - - - Segment income.................................... 213 - 213 Segment assets.................................... 37,829 24,359 62,188 Expenditures for long-~~-----------------------------------------------------~~lived assets................ 562 683 1,245

48 The following are reconciliations of reportable business segment revenues, profit or loss, and assets to our consolidated totals.

~~PROPERTY~~YEARS ~~NAME~~ENDED ~~LOCATION~~DECEMBER ~~HECTARES~~31, ~~ACREAGE~~-------------------------------- ~~CROP~~2001 ~~INTEREST~~2002 2003 ---- ---- -------- -------- REVENUES Total external and consolidated revenues for reportable segments.................................................. $ 27,032 $ 25,069 $ 28,316 ======== ======== ======== PROFIT OR LOSS Total profit or loss for reportable segments.............. $ 213 $ (4,768) $ (7,205) Unallocated corporate general and administrative expenses - General and administrative.......................... (1,397) (1,105) (448) -------- -------- -------- ~~Gomez~~Loss ~~Farias~~before income taxes................................ $ (1,184) $ (A5,873) ~~Tamaulipas~~$ (7,653) El======== ~~Cielo~~======== ~~Grove~~======== ASSETS Total assets for reportable segments...................... ~~Mexico~~$ ~~725~~62,188 1$ 53,~~791~~225 ~~Italian~~$ ~~lemons~~39,990 ~~Owned~~Total Cdassets of discontinued operations................... ~~Valles~~7,691 ~~San~~5,458 ~~Luis~~598 ~~Potosi~~Other assets.............................................. 56,996 ~~Flor~~59,166 de59,166 ~~Maria~~Elimination ~~Grove~~of intercompany profits in inventory.......... ~~Mexico~~(48) 2(48) (48) Elimination of intercompany receivables................... (28,~~146~~229) 5(24,~~301~~807) ~~Italian~~(26,662) ~~lemons~~Allocation ~~Leased~~of acquisition costs of subsidiaries recorded in consolidation........................................... (39,900) (44,585) (44,585) Reclassification of deferred tax assets recorded in consolidation........................................... (8,286) (5,634) (978) -------- -------- -------- Total 2consolidated assets................................. $ 50,~~871~~412 7$ 42,~~092~~775 $ 27,481 ======== ======== ========

The following geographic information attributes our revenues to countries based on the location of our customers.

~~PACKAGED~~YEARS ~~JUICE~~ENDED ~~FRUIT~~DECEMBER ~~AND~~31, ~~OIL TOTAL~~ --------- ------- ------------------- ~~YEAR~~2001 ~~ENDED DECEMBER 31,~~ 2002 ~~Revenues~~2003 ~~from~~--------- ~~external~~--------- customers........... $ 25,069 $ 2,093 $ 27,162 Interest expense........................... 393 14 407 Interest revenue........................... 71 4 75 Asset tax.................................. 518 22 540 Depreciation expense....................... 941 595 1,536 Impairment loss............................ --------- ~~3,073~~REVENUES ~~3,073~~United ~~Segment loss~~States............................... ~~(2,252) (4,045) (6,297) Segment assets~~.~~............................~~ ~~31,285 27,398 58,683 Expenditures for long-lived assets......... 15 1,733 1,748 YEAR ENDED DECEMBER 31, 2001 Revenues from external customers...........~~ $ 2718,~~032~~736 $ 718,~~184~~529 $ 3424,~~216~~586 ~~Interest expense~~Japan........................... ~~922 20 942 Interest revenue~~.............~~..............~~ ~~144~~ 7 ~~151 Asset tax.................................. 535 47 582 Depreciation and amortization expense...... 1~~,~~311~~339 ~~693 2,004 Impairment loss............................ -- 3,245 3,245 Segment income (loss)...................... 214 (6,089) (~~5,~~875)~~705 ~~Segment assets............................. 37,829 32,051 69,880 Expenditures for long-lived assets......... 565 2,585~~ 3,~~150~~019 ~~YEAR ENDED DECEMBER 31, 2000 Revenues from external customers~~Mexico........... ~~$ 32,562 $ 12,629 $ 45,191 Inter-segment revenues~~..................... ~~103 34 137 Interest expense~~.......~~....................~~ ~~2,087~~610 ~~627~~525 ~~2,714~~614 ~~Interest revenue~~Europe........................... ~~414 388 802 Asset tax~~............~~......................~~ ~~199~~347 ~~113~~310 ~~312~~97 ~~Depreciation~~--------- ~~and~~--------- ~~amortization~~--------- ~~expense......~~Consolidated ~~1,603 375 1,978 Segment loss~~total......................~~.........~~ ~~(5,695)~~$ (127,~~889)~~032 ~~(7,584)~~$ ~~Segment assets............................. 62~~25,~~140~~069 ~~36,163~~$ 9828,~~303~~316 ~~Expenditures~~========= ~~for~~========= ~~long-lived assets......... 413 5,213 5,626~~=========

NOTE 14 - PRO FORMA RESULTS OF DISCONTINUED OPERATIONS (UNAUDITED) On August 30, 2004, we sold our packaged fruit business segment to Del Monte in a transaction valued at approximately $11.0 million. The transaction included the sale of all outstanding shares of our Mexican subsidiary, ICMOSA. In connection with the transaction, we received at closing cash, of approximately $350,000 and an additional $600,000, less recording expenses of approximately $50,000, in November 2004. As part of the transaction, approximately $7.0 million of defaulted ICMOSA bank debt and accrued interest was assumed by Del Monte and retired and the 5-year supply contract and trademark license agreement were terminated. Our unaudited pro forma condensed consolidated statements of operations for each of the three years ended December 31, 2003 and the unaudited pro forma condensed consolidated balance sheets as of December 31, 2003 and 2002 have been prepared based on our historical consolidated financial statements and related notes. The pro forma unaudited condensed consolidated statements of operations reflect certain pro forma adjustments to the historical amounts, which reclassify the sale of our packaged fruit business segment as discontinued operations. The pro forma condensed consolidated balance sheets include certain pro forma adjustments that assume the sale transaction occurred as of December 31, 2003 and 2002. All of the pro forma data is explained in the notes that accompany the pro forma financial statements (all amounts in thousands). 49 CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2003 -

~~YEARS~~PRO ~~ENDED~~FORMA ~~DECEMBER~~PRO ~~31,~~FORMA HISTORICAL ADJUSTMENTS CONSOLIDATED ---------- ------------ ------------ ASSETS Current assets: Cash and cash equivalents........................................... $ 10,552 $ (296)(1) $ 10,256 350 (2) (350)(2) Accounts receivable - trade, net.................................... 981 (645)(1) 336 Accounts receivable - other......................................... 196 (162)(1) 34 Income and value added taxes receivable............................. 448 (372)(1) 76 Receivable - Del Monte.............................................. -- 600 (3) 600 Inventories......................................................... 4,319 (4,319)(1) --- ~~2000~~Prepaid ~~2001~~expenses.................................................... ~~2002~~152 (36)(1) 116 Current assets of discontinued operations........................... 598 598 --------- --------- ------------ ~~REVENUES~~ Total ~~external~~current ~~revenues for reportable segments~~assets........................................ $17,246 45(5,~~191~~230) ~~$ 34~~12,~~216~~016 ~~$ 27~~Property,~~162~~ ~~Inter-segment~~plant ~~revenues~~and ~~for~~equipment, ~~reportable segments~~net..................................... ~~137~~8,270 --(5,511)(1) --2,759 ~~Elimination~~Land oflease............................................................. ~~inter-segment~~1,848 ~~revenues~~1,848 Other assets........................................................... 117 (~~137~~105)(1) --12 -- --------- --------- ------------ Total ~~consolidated revenues~~assets................................................ $ 4527,~~191~~481 $ 34(10,~~216~~846) $ 2716,~~162~~635 ========= ========= ============ ~~PROFIT~~LIABILITIES ORAND ~~LOSS~~SHAREHOLDERS' ~~Total~~EQUITY ~~profit~~Current orliabilities: ~~loss~~Short ~~for~~and ~~reportable~~long-term ~~segments~~debt in default................................. $ (76,~~584)~~235 $ (56,~~875~~235) $ (~~6,297~~1) ~~Subsidiary~~$ ~~acquisition~~-- ~~costs~~Current ~~recognized~~portion inof ~~consolidation~~long-term debt...................................~~....~~ ~~(282)~~12 ~~(282)~~12 --Accounts ~~Unallocated~~payable ~~corporate general and administrative expenses~~ - ~~General~~trade ~~and administrative~~........................................... (2,~~054)~~676 (12,~~398~~485) (1~~,105~~) -191 ~~Provision~~Accrued ~~for losses on abandonment of leased facility~~liabilities................................................. 4,910 (2,~~490~~119)(1) --2,791 -- --------- --------- ------------ ~~Loss~~Total ~~before~~current ~~income taxes~~liabilities................................... $13,833 (1210,~~410~~839) $2,994 (7Long-term debt,~~555)~~ $less (7current portion................................... 4,~~402)~~199 ~~=========~~4,199 ~~=========~~Deferred ~~=========~~Mexican ~~ASSETS~~statutory ~~Total~~profit ~~assets~~sharing ~~for~~and ~~reportable~~income ~~segments~~taxes............. 23 (23)(1) -- Other long-term liability.............................................. ~~$ 98~~1,~~303~~776 ~~$ 69~~1,~~880~~776 $--------- ~~58,683~~--------- ~~Other~~------------ ~~assets~~Total liabilities........................................... 7719,~~397~~831 56(10,~~995~~862) 598,~~165~~969 ~~Elimination~~--------- of--------- ~~intercompany~~------------ ~~profits~~Shareholders' inequity: ~~inventory~~Common stock........................................................ ~~(48)~~210 ~~(48)~~210 ~~(48)~~Additional ~~Elimination~~paid-in ~~of intercompany receivables~~capital.......................................... (68,~~153)~~671 ~~(28~~68,~~229)~~671 ~~(24,807)~~Accumulated ~~Allocation of acquisition costs of subsidiaries recorded in consolidation~~deficit................................................. (3561,~~472~~231) 16 (~~39,900~~4) (4461,~~585~~215) ~~Reclassification~~--------- of--------- ~~deferred~~------------ ~~tax~~Total ~~assets~~shareholders' ~~recorded in consolidation~~equity..................................~~.....~~ (87,~~825)~~650 ~~(8,286)~~16 (57,~~633)~~666 --------- --------- ------------ Total ~~consolidated~~liabilities ~~assets~~and shareholders' equity.................. $ 6327,~~202~~481 $ 50(10,~~412~~846) $ 4216,~~775~~635 ========= ========= ============

Notes: (1) Reflects the elimination of all assets and assumption of liabilities as of December 31, 2003 associated with our packaged fruit business segment included in the sales transaction. (2) The $350 represents the cash received at closing and the payment of our transaction fees associated with the sale. (3) Represents the amount due from Del Monte as the final payment on the sale transaction. (4) Represents the pro forma gain resulting from the sale. 50 CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2002 -

~~SEGMENT~~PRO ~~CONSOLIDATED~~FORMA ~~TOTALS~~PRO FORMA HISTORICAL ADJUSTMENTS ~~TOTALS~~CONSOLIDATED ---------- ------------ ------------ ~~Year~~ASSETS ~~ended~~Current ~~December~~assets: ~~31,~~Cash ~~2002:~~and ~~Interest~~cash ~~expense~~equivalents.................................................. $ ~~407~~397 $ (186)(5) $ 211 350 (6) (350)(6) Accounts receivable - trade, net........................................... 515 (503)(5) 12 Accounts receivable - $other................................................ ~~407~~245 ~~Depreciation~~(245)(5) ~~expense~~- Notes receivable........................................................... 1310 310 Income and value added taxes receivable.................................... 482 (482)(5) - Receivable - Del Monte..................................................... - 600 (7) 600 Inventories................................................................ 4,~~536~~978 (4,978)(5) - Prepaid expenses........................................................... 148 (32)(5) 116 Current assets of discontinued operations.................................. 952 952 -------- --------- ----------- Total current assets............................................... 8,027 (5,826) 2,201 Property, plant and equipment, net............................................ 26,089 (10,427)(5) 15,662 Land lease.................................................................... 1,~~536~~897 ~~Expenditures~~1,897 ~~for~~Deposit ~~long~~on plant facility..................................................... 2,044 (2,044)(5) -~~lived~~ Other assets.................................................................. 1212 (169)(5) 43 Long-term assets of discontinued operations................................... 4,~~748~~506 4,506 -------- 1--------- ----------- Total assets....................................................... $ 42,~~748~~775 ~~Year~~$ ~~ended~~(18,466) ~~December~~$ 3124,309 ~~2001~~======== ========= =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: ~~Interest~~Short-term ~~expense~~debt............................................................ $ ~~942~~100 $ -- $ ~~942~~100 ~~Depreciation~~Short and ~~amortization~~long-term ~~expense~~debt ~~2,004~~in ~~282~~default........................................ 26,~~286~~510 ~~Expenditures~~(6,510)(5) ~~for~~- Current portion of long-~~lived~~term ~~assets~~debt.......................................... ~~3,150~~28 28 Accounts payable -- trade .................................................. 3,~~150~~176 ~~Year~~(3,114)(5) ~~ended~~62 ~~December~~Accrued 31liabilities........................................................ 3,789 ~~2000:~~(1,485)(5) ~~Interest~~2,304 ~~expense~~Current liabilities of discontinued operations............................. $4,076 24,~~714~~076 $-------- --------- $----------- 2Total current liabilities.......................................... 17,~~714~~679 ~~Depreciation~~(11,109) 6,570 Long-term debt, less current portion.......................................... 4,622 4,622 Deferred Mexican statutory profit sharing and ~~amortization~~income ~~expense~~taxes.................... 1,~~978~~443 ~~324~~(237)(5) 21,~~302~~206 ~~Expenditures~~Other ~~for~~ long-~~lived~~term ~~assets~~liability..................................................... 51,~~626~~434 1,434 -------- 5--------- ----------- Total liabilities.............................................. 25,~~626~~178 (11,346) 13,832 -------- --------- ----------- Shareholders' equity: Common stock............................................................... 210 210 Additional paid-in capital................................................. 68,671 68,671 Accumulated deficit........................................................ (51,284) (7,120)(8) (58,404) -------- --------- ----------- Total shareholders' equity......................................... 17,597 (7,120) 10,477 -------- --------- ----------- Total liabilities and shareholders' equity......................... $ 42,775 $ (18,466) $ 24,309 ======== ========= ===========

Notes: (5) Reflects the elimination of all assets and assumption of liabilities as of December 31, 2002 associated with our packaged fruit business segment included in the sales transaction. (6) The $350 represents the cash received at closing and the payment of our transaction fees associated with the sale. (7) Represents the amount due from Del Monte as the final payment on the sale transaction. (8) Reflects the 2003 pro forma loss from discontinued operations of $(7,077) and the additional loss resulting from the sale. 51 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - YEAR ENDED DECEMBER 31, 2003

~~YEARS~~PRO ~~ENDED~~FORMA ~~DECEMBER~~PRO ~~31,~~FORMA HISTORICAL ADJUSTMENTS CONSOLIDATED ---------- ------------ ------------ Net sales.......................................................... $ 28,316 $ 28,058 (9) $ 258 Cost of products sold.............................................. 26,965 (25,393)(9) 1,572(11) ---------- ~~2000~~--------- ~~2001~~------------ ~~2002~~Gross profit (loss)................................................ 1,351 2,665 (1,314) Selling, general and administrative expenses....................... 2,126 (2,485)(9) (359) Impairment of long-lived assets.................................... 5,243 (5,243)(9) - ---------- --------- ------------ ~~REVENUES~~Income ~~United~~(loss) ~~States~~from operations...................................... $(6,018) 335,~~079~~063 $(955) 21Other income (expense): Interest expense................................................. (1,~~495~~028) $738 18(9) (290) Other income (expense),~~787~~ ~~Japan~~net...................................... 4(338) 375 (9) 37 Foreign currency translation gain (loss)......................... (269) 712 (9) 443 ---------- --------- ------------ (1,~~695~~635) 1,825 190 ---------- --------- ------------ Loss from continuing operations before income taxes................ (7,~~339~~653) 56,~~705~~888 ~~Mexico~~(765) Income tax expense................................................. 3650 (535)(9) 115 ---------- --------- ------------ Loss from continuing operations.................................... (8,~~921~~303) 37,~~842~~423 2(880) Discontinued operations: ---------- --------- ------------ Loss from discontinued operations before income taxes........... (1,~~058~~630) ~~Europe~~(6,888)(10) (8,518) Income tax expense.............................................. ~~3,496~~14 535(10) 549 ---------- --------- ------------ Loss from discontinued operations............................... (1,~~540~~644) ~~612~~(7,423) (9,067) ---------- --------- ------------ ~~Consolidated~~Net ~~total~~loss........................................................... $ 45(9,~~191~~947) $ ~~34,216~~- $ 27(9,~~162~~947) ========== ========= ============ ~~LONG-LIVED~~Basic ~~ASSETS~~and ~~United~~diluted ~~States~~net loss per share: Continuing operations........................................... $ ~~710~~(0.39) $ ~~302~~(0.04) $Discontinued ~~43 Mexico~~operations......................................... ~~44,095~~(0.08) ~~32,396~~(0.43) ~~34,705 ========~~ ---------- ------------ ~~Consolidated~~Basic ~~total~~and diluted net loss per share............................... $ ~~44,805~~(0.47) $ ~~32,698~~(0.47) $========== ~~34,748~~ ============ Weighted average shares outstanding - basic and diluted................................................. 21,045 21,045 ========== ============

Notes: (9) Represents the elimination of all 2003 sales, cost of sales, selling, general and administrative expenses, impairment of long-lived assets, other income (expense) and income tax expense associated with our packaged fruit business segment. (10) Represents the reclassification of the income and expense items eliminated in Note (9) as loss from discontinued operations. (11) Represents orchard operating costs. Effective April 1, 2003, the company started expensing all operating costs associated with its lemon groves. 52 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - YEAR ENDED DECEMBER 31, 2002

~~WEIGHTED~~PRO ~~NET~~FORMA ~~INCOME~~PRO ~~AVERAGE~~FORMA ~~BASIC~~HISTORICAL ADJUSTMENTS CONSOLIDATED ---------- ------------ ------------ Net sales................................................. $ 25,069 $(~~LOSS~~25,069)(12) ~~PER~~$ ~~AND~~-- ~~DILUTED~~Cost ~~NET~~of ~~GROSS~~products ~~PROFIT~~sold..................................... ~~LOSS~~24,513 ~~FROM~~(24,513)(12) ~~NET~~-- ~~INCOME~~---------- ~~SHARE~~-------- ----------- ~~BASIC~~Gross ~~SHARES~~profit.............................................. ~~QUARTER~~556 ~~SALES~~556 ~~(LOSS)~~-- ~~OPERATIONS~~Selling, general and administrative expenses.............. 3,085 (~~LOSS~~1,980)(12) ~~AND~~1,105 ~~DILUTED~~Impairment ~~OUTSTANDING~~of long-lived assets........................... 2,516 2,516 ---------- -------- -- --------- Loss from operations...................................... (5,045) 1,424 (3,621) Other income (expense): Interest expense........................................ (393) 393(12) -- Other income, net....................................... 146 (146)(12) -- Foreign currency translation loss....................... (581) 581(12) -- ---------- -------- ----------- (828) 828 -- ---------- -------- ----------- ~~(IN~~Loss ~~THOUSANDS,~~from ~~EXCEPT~~continuing ~~PER~~operations ~~SHARE~~before ~~AMOUNTS)~~income ~~2002~~taxes....... ~~First~~(5,873) $2,252 7(3,~~140~~621) $Income ~~656~~tax $expense........................................ 518 (~~353~~518) $ (~~367~~12) $-- ~~(0.02)~~---------- ~~21,045~~-------- ~~Second~~----------- ~~(1)~~Loss ~~7,622~~from ~~(420)~~continuing operations........................... (16,~~449~~391) (12,~~652)~~770 (~~0.08~~3,621) ~~21,045~~---------- ~~Third~~-------- ~~(1)~~----------- ~~5,435~~Discontinued ~~(1,101)~~operations: Loss from discontinued operations before income taxes.. (1,~~949~~529) (2,~~299~~252) (~~0.11~~13) 21(3,~~045~~781) ~~Fourth~~Income tax expense..................................... 22 518(213) ~~6,965~~540 ~~725~~---------- -------- ----------- Loss from discontinued operations...................... (31,~~326~~551) (32,~~624~~770) (~~0.17~~4,321) ~~21,045~~---------- ~~2001~~-------- ~~First~~----------- Net loss.................................................. $ 10(7,~~338~~942) $ ~~760~~-- $ (~~562~~7,942) ========== ======== =========== Basic and diluted net loss per share: Continuing operations.................................. $ (~~1,283~~0.31) $ (0.0917) ~~13,938~~Discontinued ~~Second~~operations................................ (30.07) ~~7,865~~ (~~148~~0.21) ~~(1,522)~~---------- ~~1,093~~----------- ~~0.08~~Basic ~~14,333~~and ~~Third~~diluted ~~5,265~~net ~~(533)~~loss ~~(1,951)~~per share...................... $ (~~2,323~~0.38) $ (0.1138) ~~21,045~~========== ~~Fourth~~=========== ~~(4)~~Weighted ~~10,748~~average ~~757~~shares ~~(4,172)~~outstanding ~~(6,252)~~- (0basic and diluted.~~30)~~. 21,045 21,045 ========== ===========

Notes: (12) Represents the elimination of all 2002 sales, cost of sales, selling, general and administrative expenses, other income (expense) and income tax expense associated with our packaged fruit business segment. (13) Represents the reclassification of the income and expense items eliminated in Note (12) as loss from discontinued operations. 53 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - YEAR ENDED DECEMBER 31, 2001

~~BALANCE~~PRO ATFORMA ~~CHARGED~~PRO TOFORMA ~~CHARGED~~HISTORICAL TOADJUSTMENTS ~~BEGINNING~~CONSOLIDATED ~~COST~~---------- ~~AND~~------------ ~~OTHER~~------------ ~~DEDUCTIONS~~Net ~~BALANCE~~sales................................................. AT$ ~~DESCRIPTION~~27,032 OF$(27,032)(14) ~~PERIOD~~$ ~~EXPENSES~~-- ~~ACCOUNTS~~Cost of products sold..................................... 26,396 (126,396)(14) ~~END~~-- OF---------- ~~PERIOD~~-------- ------------ Gross profit.............................................. 636 636 -- Selling, general and administrative expenses.............. 3,779 (2,382)(14) 1,397 ---------- -------- ------------ Loss from operations...................................... (3,143) 1,746 (1,397) Other income (expense): Interest expense........................................ (922) 922(14) -- Other expense, net...................................... (129) 129(14) -- Gain on forgiveness of debt............................. 2,870 (2,870)(14) -- Foreign currency translation gain....................... 140 (140)(14) ---------- -------- ------------ 1,959 (1,959) -- ---------- -------- ------------ ~~Allowance~~Loss ~~for~~from ~~doubtful~~continuing ~~accounts:~~operations ~~Year~~before ~~ended~~income ~~December~~taxes....... 31(1,184) ~~2002~~213 $(1,397) Income tax expense........................................ 1,~~317~~233 ~~126~~(1,233)(14) -- ~~325~~---------- $-------- ------------ Loss from continuing operations........................... (2,417) 1,~~118~~020 ~~Year~~(1,397) ~~ended~~---------- ~~December~~-------- 31------------ Discontinued operations: Loss from discontinued operations before income taxes.. (6,371) ~~2001~~(213)(15) $(6,158) Income tax expense (benefit)........................... (23) 1,~~568~~233 ~~224~~1,210 ---------- ~~475~~-------- $------------ Loss from discontinued operations...................... (6,348) (1,~~317~~020) ~~Year~~(7,368) ~~ended~~---------- ~~December~~-------- ~~31,~~------------ ~~2000~~Net loss.................................................. $ ~~665~~(8,765) 1$ -- $ (8,~~055~~765) ========== ======== ============ Basic and diluted net loss per share: Continuing operations.................................. $ (0.14) $ (0.08) Discontinued operations................................ (0.36) (0.42) ---------- ~~152~~------------ Basic and diluted net loss per share...................... $ 1(0.50) $ (0.50) ========== ============ Weighted average shares outstanding - basic and diluted.. 17,~~568~~618 17,618 ========== ============

Notes: (14) Represents the elimination of all 2001 sales, cost of sales, selling, general and administrative expenses, other income (expense) and income tax expense associated with our packaged fruit business segment. (15) Represents the reclassification of the income and expense items eliminated in Note (14) as loss from discontinued operations. 54 NOTE 15 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) For each quarter during the two fiscal years ended December 31, 2003 (in thousands, except per share data):

~~NUMBER~~2003 ~~EXHIBIT~~QUARTERS ~~EXHIBIT~~FIRST SECOND THIRD FOURTH TOTAL ------- ---------------------------------------------- ~~3.1~~------ ~~Articles~~------- of------- ~~Incorporation~~------- of------- ~~The UniMark Group, Inc., as amended~~ (1) 3.(2) ~~Amended~~(3) ~~and Restated Bylaws of The UniMark Group, Inc.~~ (14) ~~3.3~~Net ~~Articles~~sales of$7,610 ~~Exchange~~$ of6,923 ~~The~~$ ~~UniMark Group~~5,475 ~~Inc.~~$ ~~(1)~~8,308 ~~4.1~~$28,316 ~~Specimen~~Gross ~~Stock~~profit ~~Certificate~~ (1loss) ~~10.~~1 ~~The UniMark Group~~,519 ~~Inc.~~(402) ~~1994 Employee Stock Option Plan~~ (1584) ~~10.2~~818 ~~The UniMark Group~~1,351 ~~Inc.~~Operating ~~1994~~income ~~Stock~~(loss) ~~Option~~529 ~~Plan~~(332) ~~for Directors~~ (1,344) ~~10.3 Stock Exchange Agreement between The UniMark Group~~(4,871) ~~Inc. and the stockholders of Industrias Citricolas de Montemorelos~~(6,018) ~~S.A.~~Income ~~de C.V.~~(1loss) ~~10.4~~from ~~Citrus~~continuing ~~Grove~~operations ~~Lease~~38 ~~Agreement~~(502) (12,900) ~~10.5~~(4,939) ~~Asset Operating Agreement between the Registrant and Industrias Horticolas de Montemorelos~~(8,303) ~~S.A.~~Income ~~de C.V.~~(2loss) ~~10.6~~from ~~Lease~~discontinued ~~agreement~~operations ~~among~~(558) ~~Hector~~(823) ~~Gerardo~~151 ~~Castagne~~(414) ~~Maitret~~(1,644) ~~Carlos~~Net ~~Courturier~~loss ~~Arellano,~~(520) ~~Mauro Alberto Salazar Rangel~~(1,325) ~~Miguel Angel Salazar Rangel~~(2,749) ~~Alejandrina Trevino Garcia~~(5,353) ~~Gerardo Trevino Garcia~~(9,947) ~~Jorge~~Basic ~~Maitret~~ and ~~Industrias~~diluted ~~Citricolas~~net deloss ~~Montemorelos,~~per Sshare (0.A02) (0.06) ~~de C~~(0.V.13) (20.26) 10(0.747) ~~Contract~~Weighted ofaverage ~~Purchase~~basic and ~~Sale~~diluted ~~between~~shares ~~Empacadora~~outstanding ~~Tropifrescos~~21,045 ~~Sociedad~~21,045 ~~Anonima~~21,045 ~~de Capital Variable and Industrias Citricolas de Montemorelos~~21,045 ~~S.A. de C.V.(2)~~21,045

~~SIGNATURE~~2002 ~~TITLE~~QUARTERS ~~DATE~~FIRST SECOND THIRD FOURTH TOTAL --------------------------------- -------------------- ------ -------- ------- -------- ~~/s/ Gustavo Fernandez Cardenas President, Chief Executive Officer August 12, 2003~~ -------~~--------------------------~~ (~~Principal~~5) ~~Executive Officer~~(6) ~~Gustavo~~Net ~~Fernandez~~sales ~~Cardenas~~$6,782 ~~/s/~~$ ~~David~~7,365 E.$ ~~Ziegler~~5,036 ~~Chief~~$ ~~Financial~~5,886 ~~Officer (Principal August 12~~$25,069 ~~2003~~Gross ~~---------------------------------~~profit ~~Financial~~(loss) ~~and~~833 ~~Accounting~~(261) ~~Officer~~(781) ~~David~~765 E.556 ~~Ziegler~~Operating ~~/s/~~income ~~Jakes~~(loss) ~~Jordaan~~51 ~~Director~~(1,123) ~~Chairman~~(1,555) ~~August~~(2,418) 12(5,045) ~~2003~~Income ~~---------------------------------~~(loss) ~~Jakes~~from ~~Jordaan~~continuing ~~/s/~~operations ~~Iain~~72 ~~Aitken~~(1,467) ~~Director~~(2,137) ~~August~~(2,859) 12(6,391) ~~2003~~Loss ~~---------------------------------~~from ~~Iain~~discontinued ~~Aitken~~operations ~~/s/~~(439) ~~Eduardo~~(185) ~~Beruff~~(162) ~~Director~~(765) ~~August 12~~(1,551) ~~2003~~Net ~~---------------------------------~~loss ~~Eduardo~~(367) ~~Beruff~~(1,652) ~~/s/~~(2,299) ~~Federico~~(3,624) ~~Chavez Peon Director August 12~~(7,942) ~~2003~~Basic ~~---------------------------------~~and ~~Federico~~diluted ~~Chavez~~net ~~Peon~~loss ~~/s/~~per ~~Luis~~share A(0.02) ~~Chico~~(0.08) ~~Pardo~~(0.11) ~~Director~~(0.17) ~~August 12, 2003 --------------------------------- Luis A~~(0.38) ~~Chico~~Weighted ~~Pardo~~average ~~/s/~~basic ~~Arturo~~and ~~Herrera~~diluted ~~Barre~~shares ~~Director~~outstanding ~~August~~21,045 1221,045 ~~2003 --------------------------------- Arturo Herrera Barre /s/ C. Jackson Pfeffer Director August 12~~21,045 ~~2003 --------------------------------- C. Jackson Pfeffer /s/ Manuel Morales Camporredondo Director August 12~~21,045 ~~2003 --------------------------------- Manuel Morales Camporredondo~~21,045

Notes to unaudited quarterly results of operations: (1) The first quarter of 2003 was unfavorably impacted by the recording of a non-cash charge of $232,000 resulting from the write-down of long-lived assets associated with our former pineapple growing operations. (2) The second quarter of 2003 was favorably impacted by a non-cash gain of $860,000 from the reversal of previously recorded Mexican deferred profit sharing expense. (3) The third quarter of 2003 was unfavorably impacted by $262,000 as a result of recognizing interest on the Bancomext debt at the default rate. (4) The fourth quarter of 2003 was unfavorably impacted by a non-cash charge of $5.0 million associated with the impairment of long-lived assets associated with our packaged fruit business segment. (5) The second and third quarters of 2002 were negatively impacted by non-cash inventory write-downs of $520,000 and $567,000, respectively, as a result of our decision to discontinue the pineapple growing operations of our packaged fruit business segment. (6) The fourth quarter of 2002 was unfavorably impacted by a non-cash charge of $3.1 million associated with the impairment of long-lived assets associated with our discontinued juice and oil business segment and is included in loss from discontinued operations. NOTE 16 - COMMITMENTS AND CONTINGENCIES Several legal proceedings arising in the normal course of business are pending against us, including certain of our Mexican subsidiaries. As a result of the decline in the worldwide market prices of FCOJ, during 2000 we decided to discontinue operating a juice processing facility in Mexico that had been leased from Frutalamo S.A. de C.V. ("Frutalamo") under the terms of deposit, operating and stock purchase agreements entered into in December 1996. As we were unsuccessful in negotiating a settlement with Frutalamo to terminate such agreements, we wrote off a previously recorded non-refundable deposit of $1.5 million and recorded a cancellation fee of $1.0 million, both of which were non-cash charges, which were associated with our discontinued juice and oil business segment. Subsequent to December 31, 2000, Frutalamo and certain of its shareholders (collectively, the "Frutalamo Plaintiffs") initiated legal proceedings in Mexico naming as defendants certain of our Mexican subsidiaries, certain current and former employees, officers and directors of our company and a former contractor. In September 2002, we settled these claims for $125,000 in cash. We have learned that, notwithstanding such settlement, certain claims 55 asserted against us by the Frutalamo Plaintiffs, prior to September 2002, continue to be under review before the Mexican courts. Management denies any wrongdoing in this matter and intends to vigorously contest these claims. The resolution of this matter is not expected to have a material adverse effect on our condensed consolidated financial condition or results of operations. In addition to the actions described above, from time to time our company is engaged in various other legal proceedings in the normal course of business. The ultimate liability, if any, for the aggregate amounts claimed cannot be determined at this time. However, our company, based on the consultation with legal counsel, is of the opinion that there are no matters pending or threatening, except for Bancomext, which could have a material adverse effect on our consolidated financial position or results of operations. SCHEDULE II THE UNIMARK GROUP, INC. VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001 (IN THOUSANDS)

~~NUMBER~~BALANCE ~~EXHIBIT~~AT ~~EXHIBIT~~CHARGED ~~-------~~TO ~~-------~~CHARGED ~~3.1~~TO ~~Articles~~BEGINNING ofCOST ~~Incorporation~~AND ofOTHER ~~The~~DEDUCTIONS ~~UniMark~~BALANCE ~~Group,~~AT ~~Inc.,~~DESCRIPTION asOF ~~amended~~PERIOD ~~(1)~~EXPENSES ~~3.2~~ACCOUNTS ~~Amended and Restated Bylaws of The UniMark Group, Inc.~~ (1) ~~3.3~~END ~~Articles~~OF ofPERIOD ~~Exchange~~-------------------------------- of---------- ~~The~~---------- ~~UniMark~~---------- ~~Group,~~---------- ~~Inc.(1)~~------------- ~~4.1~~Allowance ~~Specimen Stock Certificate (1) 10.1 The UniMark Group, Inc. 1994 Employee Stock Option Plan (1) 10.2 The UniMark Group, Inc. 1994 Stock Option Plan~~ for ~~Directors~~doubtful ~~(1)~~accounts: ~~10.3~~Year ~~Stock~~ended ~~Exchange~~December ~~Agreement between The UniMark Group~~31, ~~Inc.~~2003 ~~and~~$ ~~the~~616 ~~stockholders~~-- of-- ~~Industrias~~547 ~~Citricolas~~$ de69 ~~Montemorelos,~~Year ~~S.A.~~ended deDecember ~~C.V.(1) 10.4 Citrus Grove Lease Agreement (1) 10.5 Asset Operating Agreement between the Registrant and Industrias Horticolas de Montemorelos~~31, ~~S.A.~~2002 de$ ~~C.V.~~388 ~~(2)~~228 ~~10.6~~-- ~~Lease~~-- ~~agreement~~$ ~~among~~616 ~~Hector~~Year ~~Gerardo~~ended ~~Castagne~~December ~~Maitret~~31, ~~Carlos~~2001 ~~Courturier~~$ ~~Arellano,~~828 ~~Mauro~~-- Alberto Salazar Rangel, Miguel Angel Salazar Rangel, Alejandrina Trevino Garcia, Gerardo Trevino Garcia, Jorge Maitret and Industrias Citricolas de Montemorelos, S.A. de C.V.(2) 10.7 Contract of Purchase and Sale between Empacadora Tropifrescos, Sociedad Anonima de Capital Variable and Industrias Citricolas de Montemorelos, S.A. de C.V. (2) 10.8 Lease Agreement between Industrias Citricolas de Montemorelos, S.A. de C.V. and Valpak, S.A. de C.V. dated July 1, 1995(3) 10.9 Asset Operating Agreement between Industrial Citricolas de Montemorelos, S.A. de C.V. and Empacadora de Naranjas Azteca, S.A. de C.V. dated July 1, 1995(3) 10.10 Contract for Operation, Administration, and Purchase and Sale of Fruit between Industrial Citricolas de Montemorelos, S.A. de C.V. and Mr. Jorge Croda Manica ("Las Tunas") dated July 1, 1995(3) 10.11 Lease Contract between Industrial Citricolas de Montemorelos, S.A. de C.V. and Mr. Mauro Alberto Salazar Rangel and Mr. Miguel Angel Salazar Rangel ("Huerta Loma Bonita") dated 1995(3) 10.12 Unilateral Recognition of Indebtedness and Granting of Revolving Collateral between Industrial Citricolas de Montemorelos, S.A. de C.V. and Rabobank Curacao N.V. dated September 20, 1995(3) 10.13 Amended and Restated Stock Purchase Agreement among The UniMark Group, Inc., 9029-~~4315~~- ~~Quebec~~440 ~~Inc.,~~$ Michel Baribeau and Gestion Michel Baribeau Inc. dated January 3, 1996(4) 10.14 Lease Agreement between Loma Bonita Partners and UniMark Foods, Inc. dated November 28, 1995(3) 10.15 Lease Agreement between The UniMark Group, Inc. and Grosnez Partners dated January 1, 1996(3) 10.16 Rural Property Sublease Agreement between Industrial Citricolas de Montemorelos, S.A. de C.V. and Lorenzo Uruiza Lopez dated October 23, 1995(3) 10.17 Purchase Agreement between Industrial Citricolas de Montemorelos, S.A. de C.V. and Jose Enrique Alfonso Perez Rodriquez dated October 23, 1995(3) 10.18 Stock Purchase Agreement between The UniMark Group, Inc. and the stockholders of Grupo Industrial Santa Engracia dated April 30, 1996(6) 10.19 Stock Purchase Agreement between The UniMark Group, Inc., UniMark Foods, Inc., Sam Perricone Children's Trust 1972, Sam Perricone and Mark Strongin dated May 9, 1996(6) 10.20 Employment Agreement by and between Grupo Industrial Santa Engracia, S.A. de C.V. and Ing Jose Ma. Martinez Brohez dated as of May 9, 1996(7) 10.21 Lease Agreement by and among Ralphs Grocery Company, Simply Fresh Fruit, Inc. and Davalon Sales, Inc. dated as of March 1, 1994(7)388

(1) Represents uncollectible accounts charged against the allowance for doubtful accounts. ITEM9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures Our company maintains a system of disclosure controls and procedures. The term "disclosure controls and procedures", as defined by regulations of the SEC, means controls and other procedures that are designed to ensure that information required to be disclosed in the reports that our company files or submits to the SEC under the Securities Exchange Act of 1934, as amended (the "Act"), is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits to the SEC under the Act is accumulated and communicated to our company's management, including its principal executive officer and its principal financial officer, as appropriate to allow timely decisions to be made regarding required disclosure. Our company's Chief Executive Officer and our Chief Financial Officer have evaluated our company's disclosure controls and procedures as of a date within 90 days of the filing date of this Annual Report on Form 10-K and have concluded that our company's disclosure controls and procedures indicate that a material weakness exists at one of its Mexican subsidiaries. The company is currently addressing these issues and implementing procedures to eliminate these weaknesses, including the hiring of a bilingual controller. (See Item 4. (b) below.) With the filing of this Annual Report on Form 10-K for the fiscal year ended December 31, 2003, we will be filing over ten months past our extension request to April 14, 2004. This filing delay has been caused by several factors, which are as follows - 56 - The annual audit of our consolidated financial statements for our fiscal year ending December 31, 2002, by our independent public accountants was finalized on July 25, 2003 and we filed our annual report on Form 10-K for our fiscal year ended December 31, 2002 on August 12, 2003. Their quarterly review under SAS 100 of our first quarter 2003 did not commence until shortly after the completion of their audit. Filing of our Form 10-Q for our quarterly periods ended June 30, 2003 and September 30, 2003, were made on March 8, 2004 and August 13, 2004, respectively. - As a result of the finalization of the Coca-Cola transaction for the rescission of certain contract rights for the growing and processing of lemons in Mexico, which was completed in April 2003, a detailed analysis of the impact of this transaction on our December 31, 2002 deferred orchard costs was required to assess impairment of these long-lived assets under current accounting literature, which included an expert third party appraisal of the assets which we obtained in June 2003. - The company has limited qualified personnel to prepare and file its SEC reports. - As part of our company's decision to discontinue the juice division of our juice and oil business segment, we entered into contracts to sell our juice processing plants and related equipment located in Mexico. As a result, additional analysis was required in assessing the impairment of these long-lived assets under current accounting literature. - As a result of discontinuing our juice and oil business segment, the company's historical financial statements had to be restated to reflect this discontinuance as discontinued operations. - The company went through a further change in control in July 2004, which resulted in further management and director changes. - On August 30, 2004, the company sold its packaged fruit business segment, which required the allocation of already limited personnel resources. - The review of certain internal control deficiencies by our company's Audit Committee and independent accountants. - The replacement of several members of our company's Audit Committee with independent directors. - The resignation of certain personnel and their impact on financial statement preparation. (b) Changes in Internal Controls Our company also maintains a system of internal controls. The term "internal controls", as defined by the American Institute of Certified Public Accountants' Codification of Statement on Auditing Standards, AU Section 319, means controls and other procedures designed to provide reasonable assurance regarding the achievement of objectives in the reliability of our company's financial reporting, the effectiveness and efficiency of our company's operations and our company's compliance with applicable laws and regulations. In connection with the preparation of our quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2003, our management identified certain deficiencies in the company's internal control procedures, one of which would be deemed to be a material weakness under standards established by the American Institute of Certified Public Accountants. The nonmaterial internal control deficiencies were investigated by our previous Audit Committee and our independent accountants and did not result in a material misstatement of our condensed consolidated financial statements. The material weakness, which was concurred by our auditors and Audit Committee, was the result of the company's delay in timely filing its SEC Form 10-Q reports for 2004 and its Form 10-K report for December 31, 2003. Our management and its new Audit Committee have adopted corrective measures, and will be adopting others to address and eliminate this material and nonmaterial deficiencies, which should improve our internal and disclosure controls and timely SEC reporting. These corrective measures include: 1) Hiring of a bilingual Vice President of finance. 2) Improved controls relating to the payment of certain expenses at one of our Mexican subsidiaries. 3) The hiring of an additional external accounting firm to assist in the preparation of its monthly and quarterly financial statements. 4) Continued emphasis on the timely receipt of monthly and quarterly financial information from one of our Mexican subsidiaries. 5) Closer monitoring of the preparation of its monthly and quarterly financial information to assure timely receipt in order timely file its SEC reports. ITEM 9B. OTHER INFORMATION None 57 PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by this Item is incorporated by reference from the section "Directors and Executive Officers" in our 2003 Proxy Statement. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated by reference from the sections "Compensation of Executive Officers" and "Compensation of Directors" in our 2003 Proxy Statement. Information in the section and subsection titled "Report of The UniMark Group, Inc. Board of Directors Compensation Committee" and "Performance Graph" is not incorporated by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated by reference from the section "Security Ownership of Principal Shareholders, Directors and Management" in our 2003 Proxy Statement. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this Item is incorporated by reference from the sections "Compensation of Executive Officers," "Compensation of Directors" and "Certain Transactions" in our 2003 Proxy Statement. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item is incorporated by reference from the section "Fees Paid to Auditors" in our 2003 Proxy Statement. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a)(1) FINANCIAL STATEMENTS See Index to Financial Statements (Item 8). (a)(2) FINANCIAL STATEMENT SCHEDULES See Index to Financial Statements (Item 8). (a) REPORTS ON FORM 8-K On September 1, 2004, we filed a Current Report on Form 8-K with the Securities and Exchange Commission announcing the sale of Registrant's packaged fruit business segment. On October 1, 2004, we filed a Current Report on Form 8-K with the Securities and Exchange Commission announcing Director changes. On November 18, 2004, we filed a Current Report on Form 8-K with the Securities and Exchange Commission announcing the appointment of Operating and Financial Officers. 58 (c) EXHIBITS

59 Agromark, S.A. de C.V. "Agromark," and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland" New York Branch dated April 10, 1997. (10) 10.26 Revolving Loan Agreement with Security Interest by and between Grupo Industrial Santa Engracia, S.A. de C.V. "Gise," as borrower, Industrias Citricolas de Montemorelos, S.A. de C.V. "Icmosa," Agromark, S.A. de C.V. "Agromark," and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland" New York Branch dated April 10, 1997. (10) 10.27 First Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated October 7, 1997. (10) 10.28 Second Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated November 12, 1997. (10) 10.29 Third Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated May 22, 1998. (14) 10.30 Fourth Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated December 31, 1998. (14) 10.31 Letter given by Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch to UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Industrias Citricolas de Montemorelos, S.A. de C.V., Grupo Industrial Santa Engracia, S.A. de C.V., and Agromark, S.A. de C.V. regarding the renewal of financing. (14) 10.32 Articles of Association of Gisalamo, S.A. de C.V. (11) 10.33 Deposit, Operation, Exploitation and Stock Purchase Option Agreement by and among The UniMark Group, Inc. and Mr. Francisco Domenech Tarrago and Mr. Francisco Domenech Perusquia dated December 17, 1996 (11) 10.34 Gratuitous Loan Agreement by and among Gisalamo, S.A. de C.V. and Frutalamo, S.A. de C.V. dated December 17, 1996 (11) 10.35 Non-Competition Agreement by and among The UniMark Group, Inc. and Jorn Budde dated February 18, 1998 (12) 10.36 Supply Agreement between the Coca-Cola Export Corporation and Grupo Industrial Santa Engracia, S.A. de C.V. dated April 2, 1998 (13) 10.37 Fifth Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperative Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated May 17, 1999 (14) 10.38 The UniMark Group, Inc. 1999 Stock Option Plan (14) 10.39 Employment Agreement by and among The UniMark Group, Inc. and Charles Horne dated as of March 31, 1999 (14) 10.40 Employment Agreement by and among The UniMark Group, Inc. and Roman Shumny dated as of November 20, 1998 (14) 10.41 Sixth Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc. UniMark International, Inc. Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated January 3, 2000 (15) 10.42 Seventh Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc. UniMark International, Inc. Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated March 1, 2000 (15) 10.43 Standby Funding Commitment by and among The UniMark Group, Inc. and Promecap, S.C. dated April 17, 2000 (15) 10.44 Stock Purchase Agreement dated as of October 11, 1999, by and among The UniMark Group, Inc. and Francois Gravil - Guy Picard in trust for a company to be owned and operated by Francois Gravil and Guy Picard, for all the issued and outstanding capital stock of Les Produits Deli-Bon Inc. (17)

60 10.45 Asset Purchase Agreement dated October 18, 1999 by and among SFFI Company, Inc., Sam Perricone, as guarantor, Sam Perricone Children's Trust - 1972, The UniMark Group, Inc. and Simply Fresh Fruit, Inc. (17) 10.46 Asset Purchase Agreement dated as of August 25, 2000 by and among Del Monte Corporation, UniMark Foods, Inc. and The UniMark Group, Inc. (17) 10.47 Promissory Note for $1,800,000 by and among The UniMark Group, Inc. and M&M Nominee, L.L.C., 12%, due July 31, 2001 (17) 10.48 Fifth Amendment to the Revolving Loan Agreement with Security Interest by and Among Industrial Santa Engracia, S.A. de C.V. as Borrower, Industrias Citricolas de Montemorelos, S.A. de C.V. and AgroMark S.A. de C.V., as Guarantors, The UniMark Group, Inc., as Guarantor and Pledgor, Mr. Rafael Vaquero Bazan and Mr. Jose Maria Brohez, as Pledgors, and Cooperatieve Centrale-Raiffeissen Boerenleenbank B.A. ,as lender, dated as of September 1, 2000 (17) 10.49 Sixth Amendment to the Revolving Loan Agreement with Security Interest by and Among Grupo Industrial Santa Engracia, S.A. de C.V. as Borrower, Industrias Citricolas de Montemorelos, S.A. de C.V. and AgroMark S.A. de C.V., as Guarantors, The UniMark Group, Inc., as Guarantor and Pledgor, Mr. Rafael Vaquero Bazan and Mr. Jose Maria Brohez, as Pledgors, and Cooperatieve Centrale-Raiffeissen Boerenleenbank B.A. ,as lender dated as of January 1, 2001 (17) 10.50 Modifying Agreement to Supply Agreement between The Coca-Cola Export Corporation and Grupo Industrial Santa Engracia, S.A. de C.V. dated as of January 15, 2001 (18) 10.51 Promissory Note for $100,000 by and among The UniMark Group, Inc. and M&M Nominee, LLP,10%, due June 10, 2003 (19) 10.52 Promissory Note for $125,000 by and among The UniMark Group, Inc. and M&M Nominee, LLC,10%, due July 9, 2003(19) 10.53 Guaranty Agreement dated as of January 10, 2003, executed by Grupo Industrial Santa Engracia, S.A. de C.V. in favor of M&M Nominee, LLC (19) 10.54 Promissory Note for $200,000 by and among The UniMark Group, Inc. and M&M Nominee, LLP, 10%, due April 30, 2003 (22) 10.55 Guaranty Agreement dated as of January 24, 2003, executed by Industrias Citricolas de Montemorelos, S.A. de C.V. in favor of M&M Nominee, LLC (22) 10.56 Promissory Note for $110,000 by and among The UniMark Group, Inc. and M&M Nominee, LLP, 10%, due July 9, 2003 (22) 10.57 Guaranty Agreement dated as of February 11, 2003, executed by Grupo Industrial Santa Engracia, S.A. de C.V. in favor of M&M Nominee, LLC (22) 10.58 Promissory Note for $125,000 by and among The UniMark Group, Inc. and M&M Nominee,LLC, 10%, due July 9, 2003 (22) 10.59 Guaranty Agreement dated as of March 6, 2003, executed by Grupo Industrial Santa Engracia, S.A. de C.V. in favor of M&M Nominee, LLC (22) 10.60 Agreement for the Termination of the Supply Agreement and its Corresponding Amendments dated April 11, 2003, by and between Grupo Industrial Santa Engracia, S.A. de C.V. and The Coca-Cola Export Corporation, Mexico Branch (20) 10.61 Agreement for the Termination of the Processing Agreement dated April 11, 2003, by and between Grupo Industrial Santa Engracia, S.A. de C.V. and The Coca-Cola Export Corporation, Mexico Branch (21) 10.62 Rural Property Lease Agreement between Ejido "Laguna del Mante," Municipio de Ciudad Valles, Estado de San Luis Potosi, and "Grupo Industrial Santa Engracia," S.A. de C.V., dated December, 2002 (22) 10.63 Agreement for the Ejido land transfer between Eijdo "Laguna del Mante," Municipio de Ciudad Valles, Estado de San Luis Potosi, and "Grupo Industrial Santa Engracia," S.A. de C.V., dated December, 2002 (22) 10.64 Employment Agreement by and among The UniMark Group, Inc. and Ricardo Arturo Herrera Barre dated as of August 28, 2003 (23) 10.65 Purchase Agreement between The UniMark Group, Inc., UniMark Foods, Inc., Industrias Citricolas de Montemorelos, S.A. de C.V. and Del Monte Corporation dated as of August 30, 2004 (24) 10.66 Stock Purchase, Debt Acknowledgement, Mortgage and Termination Obligations Agreement between National Financiera, S.N.C. in its Capacity as Financial Trust Institution Capitalization and Investment Fund for the Rural Sector, Sierra Ranchos, S.A. De C.V., The UniMark Group, Inc. and Grupo Industrial Santa Engracia, S.A. De C.V. dated as of August 4, 2004 (25)

61 10.67 Stock Option Agreement by and among The UniMark Group, Inc. and Jakes Jordaan dated as of October 1, 2004 , with Notice of Assignment (25) 21 Subsidiaries of the Registrant (11) (16) 23 Consent of Mancera, S.C., Member Practice of Ernst & Young Global (25) 31.1 Certification of Chief Executive Officer Pursuant to Section to Section 302 of the Sarbanes-Oxley Act of 2002 (25) 31.2 Certification of Chief Financial Officer Pursuant to Section to Section 302 of the Sarbanes-Oxley Act of 2002 (25) 31.3 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section to Section 906 of the Sarbanes-Oxley Act of 2002 (25)

---------------- (1) Previously filed as an Exhibit to the Registrant's Registration Statement on Form SB-2, as amended, SEC Registration No. 33-78352-D. (2) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1994. (3) Previously filed as an Exhibit to the Registrant's Quarterly Report on Form 10-QSB for the fiscal quarter ended September 30, 1995. (4) Previously filed as an Exhibit to the Registrant's Current Report on Form 8-K dated January 16, 1995. (5) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1995. (6) Previously filed as an Exhibit to the Registrant's Current Report on Form 8-K dated May 10, 1996. (7) Previously filed as an Exhibit to the Registrant's Registration Statement on Form S-1, as amended, SEC Registration No. 333-3539. (8) Previously filed as an Exhibit to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1996. (9) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1996. (10) Previously filed as an Exhibit to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1997. (11) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1997. (12) Previously filed as an Exhibit to the Registrant's Current Report on Form 8-K dated February 18, 1998. (13) Previously filed as an Exhibit to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998. (14) Previously filed as an Exhibit to the Registrant's Quarterly Report on Form 10Q for the fiscal quarter ended June 30, 1999. (15) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 1999. (16) Previously filed as an Exhibit to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 30, 2000. (17) Previously filed as an Exhibit to the Registrant's Registration Statement on Form S-1, as amended, SEC Registration No. 333-60130 dated May 18, 2001. (18) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2001. (19) Previously filed as an Exhibit to the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002. (20) Previously filed as an Exhibit to the Registrant's Current Report on Form 8-K dated April 16, 2003. (21) Previously filed as an Exhibit to the Registrant's Current Report on Form 8-K dated April 16, 2003. (22) Previously filed as an Exhibit to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2002. (23) Previously filed as an Exhibit to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003. (24) Previously filed as an Exhibit to the Registrant's Current Report on Form 8-K dated September 1, 2004. (25) Filed herewith. 62 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 The UniMark Group, Inc. (Registrant) By: /s/ Jakes Jordaan -------------------------- Jakes Jordaan President and Chief Executive Officer Dated: February 23, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934, this report was signed below by the following persons on behalf of the registrant and in the capacities and on the dates stated:

63 INDEX TO EXHIBITS

10.23 Supply Contract between The Coca-Cola Export Corporation and Grupo Industrial Santa Engracia, S.A. de C.V. dated October 7, 1996. (9) 10.24 Loan Agreement made between Industrias Citricolas de Montemorelos, S.A. de C.V., Grupo Industrial Santa Engracia, S.A. de C.V., Agromark, S.A. de C.V., as borrowers; The UniMark Group, Inc., as guarantor, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland", as lender, dated May 29, 1997. (10) 10.25 Revolving Loan Agreement with Security Interest by and between Industrias Citricolas de Montemorelos, S.A. de C.V., as borrower, Grupo Industrial Santa Engracia, S.A. de C.V. "Gise," Agromark, S.A. de C.V. "Agromark," and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland" New York Branch dated April 10, 1997. (10) 10.26 Revolving Loan Agreement with Security Interest by and between Grupo Industrial Santa Engracia, S.A. de C.V. "Gise," as borrower, Industrias Citricolas de Montemorelos, S.A. de C.V. "Icmosa," Agromark, S.A. de C.V. "Agromark," and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland" New York Branch dated April 10, 1997. (10) 10.27 First Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated October 7, 1997. (10) 10.28 Second Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated November 12, 1997. (10) 10.29 Third Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated May 22, 1998. (14) 10.30 Fourth Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated December 31, 1998. (14) 10.31 Letter given by Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch to UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Industrias Citricolas de Montemorelos, S.A. de C.V., Grupo Industrial Santa Engracia, S.A. de C.V., and Agromark, S.A. de C.V. regarding the renewal of financing. (14) 10.32 Articles of Association of Gisalamo, S.A. de C.V. (11) 10.33 Deposit, Operation, Exploitation and Stock Purchase Option Agreement by and among The UniMark Group, Inc. and Mr. Francisco Domenech Tarrago and Mr. Francisco Domenech Perusquia dated December 17, 1996 (11) 10.34 Gratuitous Loan Agreement by and among Gisalamo, S.A. de C.V. and Frutalamo, S.A. de C.V. dated December 17, 1996 (11) 10.35 Non-Competition Agreement by and among The UniMark Group, Inc. and Jorn Budde dated February 18, 1998 (12) 10.36 Supply Agreement between the Coca-Cola Export Corporation and Grupo Industrial Santa Engracia, S.A. de C.V. dated April 2, 1998 (13) 10.37 Fifth Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc., UniMark International, Inc., Simply Fresh Fruit, Inc., the guarantors, and Cooperative Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated May 17, 1999 (14) 10.38 The UniMark Group, Inc. 1999 Stock Option Plan (14) 10.39 Employment Agreement by and among The UniMark Group, Inc. and Charles Horne dated as of March 31, 1999 (14) 10.40 Employment Agreement by and among The UniMark Group, Inc. and Roman Shumny dated as of November 20, 1998 (14) 10.41 Sixth Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc. UniMark International, Inc. Simply Fresh Fruit, Inc.,

the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated January 3, 2000 (15) 10.42 Seventh Amendment to Revolving Credit Agreement by and among UniMark Foods, Inc., the borrower, and The UniMark Group, Inc. UniMark International, Inc. Simply Fresh Fruit, Inc., the guarantors, and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch dated March 1, 2000 (15) 10.43 Standby Funding Commitment by and among The UniMark Group, Inc. and Promecap, S.C. dated April 17, 2000 (15) 10.44 Stock Purchase Agreement dated as of October 11, 1999, by and among The UniMark Group, Inc. and Francois Gravil - Guy Picard in trust for a company to be owned and operated by Francois Gravil and Guy Picard, for all the issued and outstanding capital stock of Les Produits Deli-Bon Inc. (17) 10.45 Asset Purchase Agreement dated October 18, 1999 by and among SFFI Company, Inc., Sam Perricone, as guarantor, Sam Perricone Children's Trust - 1972, The UniMark Group, Inc. and Simply Fresh Fruit, Inc. (17) 10.46 Asset Purchase Agreement dated as of August 25, 2000 by and among Del Monte Corporation, UniMark Foods, Inc. and The UniMark Group, Inc. (17) 10.47 Promissory Note for $1,800,000 by and among The UniMark Group, Inc. and M&M Nominee, L.L.C., 12%, due July 31, 2001 (17) 10.48 Fifth Amendment to the Revolving Loan Agreement with Security Interest by and Among Industrial Santa Engracia, S.A. de C.V. as Borrower, Industrias Citricolas de Montemorelos, S.A. de C.V. and AgroMark S.A. de C.V., as Guarantors, The UniMark Group, Inc., as Guarantor and Pledgor, Mr. Rafael Vaquero Bazan and Mr. Jose Maria Brohez, as Pledgors, and Cooperatieve Centrale-Raiffeissen Boerenleenbank B.A. ,as lender,dated as of September 1, 2000 (17) 10.49 Sixth Amendment to the Revolving Loan Agreement with Security Interest by and Among Grupo Industrial Santa Engracia, S.A. de C.V. as Borrower, Industrias Citricolas de Montemorelos, S.A. de C.V. and AgroMark S.A. de C.V., as Guarantors, The UniMark Group, Inc., as Guarantor and Pledgor, Mr. Rafael Vaquero Bazan and Mr. Jose Maria Brohez, as Pledgors, and Cooperatieve Centrale-Raiffeissen Boerenleenbank B.A.,as lender dated as of January 1, 2001 (17) 10.50 Modifying Agreement to Supply Agreement between The Coca-Cola Export Corporation and Grupo Industrial Santa Engracia, S.A. de C.V. dated as of January 15, 2001 (18) 10.51 Promissory Note for $100,000 by and among The UniMark Group, Inc. and M&M Nominee, LLP, 10%, due June 10, 2003 (19) 10.52 Promissory Note for $125,000 by and among The UniMark Group, Inc. and M&M Nominee, LLC, 10%, due July 9, 2003 (19) 10.53 Guaranty Agreement dated as of January 10, 2003, executed by Grupo Industrial Santa Engracia, S.A. de C.V. in favor of M&M Nominee, LLC (19) 10.54 Promissory Note for $200,000 by and among The UniMark Group, Inc. and M&M Nominee, LLP, 10%, due April 30, 2003 (22) 10.55 Guaranty Agreement dated as of January 24, 2003, executed by Industrias Citricolas de Montemorelos, S.A. de C.V. in favor of M&M Nominee, LLC (22) 10.56 Promissory Note for $110,000 by and among The UniMark Group, Inc. and M&M Nominee, LLP, 10%, due July 9, 2003 (22) 10.57 Guaranty Agreement dated as of February 11, 2003, executed by Grupo Industrial Santa Engracia, S.A. de C.V. in favor of M&M Nominee, LLC (22) 10.58 Promissory Note for $125,000 by and among The UniMark Group, Inc. and M&M Nominee, LLC, 10%, due July 9, 2003 (22) 10.59 Guaranty Agreement dated as of March 6, 2003, executed by Grupo Industrial Santa Engracia, S.A. de C.V. in favor of M&M Nominee, LLC (22) 10.60 Agreement for the Termination of the Supply Agreement and its Corresponding Amendments dated April 11, 2003, by and between Grupo Industrial Santa Engracia, S.A. de C.V. and The Coca-Cola Export Corporation, Mexico Branch (20) 10.61 Agreement for the Termination of the Processing Agreement dated April 11, 2003, by and between Grupo Industrial Santa Engracia, S.A. de C.V. and The Coca-Cola Export Corporation, Mexico Branch (21)

10.62 Rural Property Lease Agreement between Ejido "Laguna del Mante," Municipio de Ciudad Valles, Estado de San Luis Potosi, and "Grupo Industrial Santa Engracia," S.A. de C.V., dated December, 2002 (22) 10.63 Agreement for the Ejido land transfer between Eijdo "Laguna del Mante," Municipio de Ciudad Valles, Estado de San Luis Potosi, and "Grupo Industrial Santa Engracia," S.A. de C.V., dated December, 2002 (22) 10.64 Employment Agreement by and among The UniMark Group, Inc. and Ricardo Arturo Herrera Barre dated as of August 28, 2003 (23) 10.65 Purchase Agreement between The UniMark Group, Inc., UniMark Foods, Inc., Industrias Citricolas de Montemorelos, S.A. de C.V. and Del Monte Corporation dated as of August 30, 2004 (24) 10.66 Stock Purchase, Debt Acknowledgement, Mortgage and Termination Obligations Agreement Between National Financiera, S.N.C. in its Capacity as Financial Trust Institution Capitalization and Invest Fund for the Rural Sector, Sierra Ranchos, S.A. De C.V., The UniMark Group, Inc. and Grupo Industrial Santa Engracia, S.A. De C.V. dated as of August 4, 2004 (25) 10.67 Stock Option Agreement by and among The UniMark Group, Inc. and Jakes Jordaan dated as of October 1, 2004, with Notice of Assignment (25) 21 Subsidiaries of the Registrant (11) (16) 23 Consent of Mancera, S.C., Member Practice of Ernst & Young Global (25) 31.1 Certification of Chief Executive Officer Pursuant to Section to Section 302 of the Sarbanes-Oxley Act of 2002 (25) 31.2 Certification of Chief Financial Officer Pursuant to Section to Section 302 of the Sarbanes-Oxley Act of 2002 (25) 31.3 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section to Section 906 of the Sarbanes-Oxley Act of 2002 (25)

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