- 16 -
the growth of the jojoba plants. Each letter included
photographs of the jojoba plants.
By 1986, Almand had learned that the cold night weather in
Yuma prevented the growth of the jojoba beans and that wind
machines were needed to prevent the frost damage. Almand could
not raise the additional capital from the investors in Cactus
Wren to purchase the wind machines. Almand conceded that he was
not able to raise the additional capital due to the recent
passage of the 1986 Tax Reform Act which eliminated taxpayers'
interest in "investments" structured like the partnerships here
in issue. Cactus Wren abandoned development of plantation II in
1987.
a. The Private Placement Memorandum
The private placement memorandum (the offering) for Cactus
Wren, dated April 3, 1983, provided for a maximum capitalization
of $343,000 consisting of 140 limited partnership units, at
$2,450 per unit. The purchase price was payable in cash upon
execution of the subscription agreement. The Cactus Wren
partnership ultimately was capitalized at $196,000, all cash,
consisting of 80 units at $2,450 per unit. Cactus Wren was
funded totally with cash because the purchase of rooted cuttings
required a large initial capital outlay. According to the
offering, Cactus Wren was to "engage in research and development
and, thereafter, participate in the marketing of the products of
the jojoba plant including, but not limited to, the beans, liquid
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011