- 5 -
enter into a farming subcontract with its wholly owned
subsidiary, Mesa Plantations, Inc. (Mesa). Hilltop was then to
enter into an “Experimental Agricultural Lease” with Hilltop
Ventures, a general partnership with identical ownership as
Hilltop. This lease was to be assigned to Mesa upon completion
of the research and development. Finally, Hilltop was to enter
into a “Research and Development Management Agreement” with
Agricultural Investments, Inc., which was to be the “manager” of
the project.
Hilltop (as well as Mesa and Hilltop Ventures) was
controlled by four individuals. These individuals were Mr.
Meinke (president, director, and shareholder), Keith A. Damer
(vice president, secretary, director, and shareholder), Marlin G.
Peterson (vice president, treasurer, director, and shareholder),
and Cecil R. Almand (shareholder). The three officer/directors
of Hilltop were all listed as certified public accountants with
expertise in the tax field. The private placement memorandum
listed no experience of any of the officer/directors or
shareholders which is relevant to the farming of jojoba.
The private placement memorandum contained language
specifically alerting investors to the planned deduction of the
“research and development” costs, as well as other tax risks
involved in making an investment in the partnership. The
document also contained an opinion letter stating that the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011