- 59 -
acres purportedly allocated to it. Others had interests in the
large areas farmed by HJI in Hyder, so Gross' computation of the
valuation for JDP was simply contrary to fact. Moreover, even
Eberhardt states that the results of the nutrient studies were
site specific. Therefore, petitioners' argument that the jojoba
industry saved millions of dollars as a result of HJI's putative
research or experimentation is outlandish.
In addition, we view with much skepticism testimony that the
parties to these agreements anticipated that JDP would recoup the
cost of the R & D contract fee from the increased production of
the jojoba plants on Turtleback I resulting from a successful
research program. The record reveals that no one made any
projections before the agreements were executed, or afterward,
relating to the profit potential of a 60-acre jojoba plantation.
The profit projections in the offering were based on a jojoba
plantation's containing a low of 160 acres and a high of 464
acres. The offering, furthermore, cautioned that JDP would face
higher risks should only the projected minimum 160 acres be
planted. Yet, nowhere is any attempt made to show that the
results of operations on the 60 acres purportedly allocated to
JDP could support the anticipated 5-year research and
experimentation project to which the parties seemingly bound
themselves in the R & D Agreement. Indeed, Gross admitted in his
report that "It is not customary to conduct expensive research
and experimentation on a pilot model, and then expect the pilot
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