gvfsinc.com

Revenue: 20,500,000 Size: 36GB | GREEN VALLEY: SELF-LEASE SCHEME How a California agricultural distributor pays rent to companies controlled by its own co-owners --- PROLOGUE The following documents are in our possession: Financial statements: audited consolidated financial statements of Green Valley Farm Supply, Inc., Pinnacle Application, Inc., and Kennedy Farm Services, Inc. for the fiscal year ended October 31, 2025 (prepared by Van Ruler & Company LLP, dated February 5, 2026); audited consolidated financial statements for the prior fiscal year; trial balances broken down by location (Gonzales CA, Yuma AZ, Hollister CA, Watsonville CA); internal income and expense tables with monthly detail; fixed asset depreciation schedules; monthly accounting summaries for multiple years. Bank documents: account statements from Wells Fargo, Bank of America, 1st Capital Bank, Pacific Valley Bank, BMO Bank, Rabobank—covering the period 2017–2026. PPP federal support program documents: application, calculation, loan agreement. Tax documents: Schedule K-1 forms (Form 568 and Form 1065) for all members of two LLCs—106 Alpine, LLC and 159 GRR, LLC; tax workpapers; property tax returns (BOE-571-D) for 2023–2026; member income distribution summaries. Contracts and agreements: operating agreements for 106 Alpine, LLC and 159 GRR, LLC; original lease agreements for all properties—Hollister, Gonzales, 159 Gonzales River Road, Yuma, Watsonville; promissory notes for $660,000 (GVFS loan to 106 Alpine) and for $983,650, $80,525, and $22,988 (GVFS loans to employee Wiegand); stock purchase plan; loan amortization schedules. Internal documents: QuickBooks exports with rent invoices; internal construction financing spreadsheets; shareholder registers with transaction history (updated as of May 27, 2026); dividend calculations; fixed asset registers with notations on related-party transactions; captive insurance documents (Terra Captive, Pioneer Health Insurance Captive, ARU Captive). Other: county tax authority filings with agent information; client reconciliation records; vendor rebate documents (BASF, Dow, Alion, and other suppliers). HR documents: mandatory annual training logs (MAT Annuals) for 2026—with employee signatures; topics: workplace safety, drugs and alcohol, sexual harassment, Good Agricultural Practices, pesticide handling. Documents cover personnel across four affiliated companies: GVFS, Pinnacle Application Inc., Kennedy Farm Services Inc., and Mantis AG Technology—under a single trainer, Tadeo Hernandez. In this article, you will be able to review only a portion of the data we have chosen to disclose. Everything else you will be able to download and review on your own after the full archive is published. --- PART I: THE ENTERPRISE Green Valley Farm Supply, Inc. (EIN: 77-0499953) is a California distributor of agricultural chemicals and fertilizers. From the audited financial statements prepared in 2026: > "California corporation engaged in the retail and wholesale sale of agricultural chemicals and fertilizers. Sales are made primarily to agricultural producers located in California and Arizona." The group consists of three legal entities: - Green Valley Farm Supply, Inc. — chemical and fertilizer trading; net revenue 2025: $95,831,190 - Pinnacle Application, Inc. (EIN: 77-0499950) — pesticide and fertilizer application; net revenue 2025: $10,943,896 - Kennedy Farm Services, Inc. — agronomic consulting; net revenue 2025: $2,277,842 The fiscal years of the three companies end on different dates (October 31, September 30, and December 31, respectively), but are aligned to October 31, 2025, for consolidation purposes. Consolidated results for the fiscal years ended October 31: | Metric | 2025 | 2024 | |---|---|---| | Revenue | $96,648,291 | $103,351,468 | | Cost of Goods Sold | $58,755,304 | $67,771,771 | | Gross Profit | $37,892,987 | $35,579,697 | | Operating Expenses | $36,192,147 | $33,363,431 | | Operating Income | $1,700,840 | $2,216,266 | | Other Income/(Expense) | $501,589 | ($366,745) | | Pre-Tax Income | $2,202,429 | $1,849,521 | | Income Tax Expense | $415,567 | $404,015 | | Net Income | $1,786,862 | $1,445,506 | | Equity | $27,545,985 | $26,140,912 | President of the group is Michael E. Kennedy (P.O. Box 950, Gonzales, CA 93926). CFO is Mike James (MJAMES@GVFSINC.COM). Financial statements prepared by Van Ruler & Company LLP, Salinas, CA. Preparation date: February 5, 2026 . --- PART II: GVFS FINANCED THE CONSTRUCTION OF ITS OWN LANDLORD GVFS does not simply lease property from affiliated companies—it first financed their construction and then began paying rent on it. An internal calculation document records the scheme: > "2900000 Estimated cost of construction and land / 2055000 Construction LOC due PVB / 845000 GVFS Equity" > "2030000.0 Amount Borrowed from American Ag Credit (may differ with appraisal)" > "American Ag Credit has 1st deed / GVFS has 2nd deed / GVFS rent covers both debt payments / monthly debt payments made to both AAC and GVFS" GVFS invested $845,000–$870,000 of its own funds into the construction of a property owned by 106 Alpine LLC, and simultaneously provided 106 Alpine LLC with a direct loan, taking a second deed of trust. Loan terms: > "106 ALPINE, LLC, a California limited liability company ('Maker') promises to pay to GREEN VALLEY FARM SUPPLY, INC., a California corporation or order ('Holder')... the sum of Six Hundred Sixty Thousand Dollars ($660,000.00) with interest from the Note Date until paid at the rate of Four and 50/100ths percent (4.50%) per annum payable in equal monthly installments of principal and interest in the amount of Four Thousand Five Hundred Eighty-Nine and 96/100 Dollars ($4,589.96) due and payable on the first day of each month... with the outstanding balance of principal and interest all due and payable fifteen (15) years after the Note Date." Note E to the 2025 audited financial statements discloses the current balance of this loan—line item "106 Alpine Drive, LLC—monthly payments $8,672 at 3.5% through June 2030": | Date | Loan Balance | |---|---| | 12/31/2022 | $685,233.75 | | 12/31/2023 | $603,924.76 | | 10/31/2024 | $124,310 | | 10/31/2025 | $91,390 | Simultaneously with this loan, GVFS pays 106 Alpine $29,500 per month in rent. The monthly loan payment is $8,672. The difference ($29,500 − $8,672 = $20,828 per month) flows to the LLC's insider members. In the 2025 audited financial statements, GVFS directly acknowledges the conflict structure: > "In fiscal year 2018, the Company adopted FASB ASU 2014-07... Green Valley has guaranteed debt of entities with common ownership and has operating lease agreements with them to rent real estate." --- PART III: TWO LANDLORDS Green Valley Farm Supply leases operating facilities from two affiliated LLCs. Data from the lease schedule workpaper included in the 2025 audited financial statements. 106 Alpine, LLC (EIN: 82-3277251). Two properties, both on month-to-month terms with no fixed end date: | Property | Rate | Lease Start | |---|---|---| | 106 Alpine Drive, Gonzales, CA | $29,500/mo. | 04/01/2018 | | 2790 Buena Vista Road, Hollister, CA | $20,500/mo. | 12/22/2017 | | Total Annual | $600,000 | | Both leases have no fixed end date ("Month-to-Month"), with no annual escalation. The lease schedule classifies both properties as "short-term" (less than 12 months)—allowing them to be excluded from the balance sheet as ROU assets. Total short-term lease expense: $641,301. 159 GRR, LLC (EIN: 82-3125996). Three properties, both with fixed terms and annual escalation: | Property | Rate as of 11/01/2025 | Term | Prior Rate | |---|---|---|---| | 159 Gonzales River Road, Gonzales, CA | $7,600/mo. | through 10/31/2030 | ~$6,400/mo. | | 2704 E. 14th St., Yuma, AZ | $5,800+/mo. | through 12/31/2029 | $5,800/mo. | | 2684 E. 14th St., Yuma, AZ | $5,800+/mo. | through 12/31/2029 | $5,800/mo. | Upon renewal in November 2025, the rent on the Gonzales property was increased from ~$6,400 to $7,600 per month—a 33% increase. New term: 5 years, through October 31, 2030. This occurred against a backdrop of GVFS revenue declining by $6.7 million in the same year. Total GVFS lease obligations to affiliated LLCs through 2030: $2,028,173 (from Note O, FY2025). Total "rent—related parties" line in GVFS workpapers: $1,132,139 . --- PART IV: NEGOTIATING WITH ONESELF Original lease agreement for the Hollister property (2790 Buena Vista Road). Signed by: On behalf of the landlord (106 Alpine, LLC): Michael E. Kennedy, Manager . On behalf of the tenant (Green Valley Farm Supply, Inc.): Michael E. Kennedy, President . One person signed both sides of the lease agreement under which GVFS pays $18,000–$246,000 annually. Same situation with the Yuma lease (2694 E. 14th Street). Landlord—Green Valley Holdings TIC. Tenant—Green Valley Farm Supply, Inc. Signature on behalf of landlord: Michael E. Kennedy . Signature on behalf of tenant: Michael E. Kennedy, President . Mike James, CFO of GVFS, appears as the agent for 106 Alpine LLC in later documents. San Benito County tax authority filing (2026): > "CFO Mike James / MJAMES@GVFSINC.COM / 106 Alpine LLC / C/O MICHAEL E KENNEDY / 10 GONZALES RIVER ROAD GONZALES, CA 93926" Hollister lease, landlord agent in later correspondence: > "Landlord: 106 ALPINE, LLC c/o Mike James, 10 Gonzales River Road, Gonzales, CA 93926" Same document, tenant: > "Tenant: GREEN VALLEY FARM SUPPLY, INC. c/o Mike Kennedy, 10 Gonzales River Road, Gonzales, CA 93926" Landlord and tenant addresses match. All lease agreements are signed by parties with a direct financial interest in the outcome. No evidence of independent negotiation. --- PART V: $6.35 MILLION IN GUARANTEES—INCLUDING ITS OWN LANDLORD A note to the 2025 audited financial statements discloses GVFS's credit guarantees on debt of five affiliated companies: | Borrower | Lender | Balance 10/31/2025 | Maturity | |---|---|---|---| | 106 Alpine, LLC | American Ag Credit | $2,037,721 | 06/01/2030 | | 11280 Commercial Parkway, LLC | Pacific Valley Bank | $1,614,098 | 06/15/2033 | | Grow Globe, LLC | Pacific Valley Bank | $1,464,181 | 06/15/2030 | | Sayum, LLC | Pacific Valley Bank | $529,681 | 03/05/2031 | | Green Valley Holdings, TIC | American Ag Credit | $705,331 | 06/01/2033 | | Total | | $6,351,012 | | From the disclosure: > "The Company has guaranteed various loans of affiliated companies through common ownership... Examples of events that would require the Company to provide a cash payment pursuant to the guarantee include a loan default, which would result from the affiliates' failure to service its debt when due or noncompliance with financial covenants." 106 Alpine LLC sits at the top of the list with a balance of $2,037,721. This is the same 106 Alpine LLC to which GVFS: - pays $600,000 annually in rent; - made a construction loan ($660,000), balance $91,390; - guaranteed a $2.04 million American Ag Credit loan. GVFS is liable for the debt of its own landlord. --- PART VI: OWNERSHIP MAP The same trusts appear across both landlord LLCs. Operating agreements, internal member tables. Members of 106 Alpine, LLC: - The Michael E. Kennedy & Teresa D. Kennedy Trust UTA Dated 8/7/2001 — 25% - The 2003 Stanley Pura Revocable Trust — ~19.7% - The 2000 Romans Revocable Trust — 14.76% - The 2016 Heffren Revocable Trust — 10% - The Hitchcock Family Trust of 2003 UTA — ~7.4% - 1993 David & Susan Gill Trust — ~7.4% - Leland S. McKinsey and Tamara D. McKinsey (trust split after 2022) Members of 159 GRR, LLC: - The Michael E. Kennedy & Teresa D. Kennedy Trust — 18.75% - The 2003 Pura Revocable Trust — 14.7581% - The 2000 Romans Revocable Trust — 14.7581% - Charles L. Narramore (individual) — 9.0909% - The 2016 Heffren Revocable Trust — 7.5% - The Hitchcock Family Trust of 2003 UTA — 7.3791% - 1993 David & Susan Gill Trust — 7.3791% - Patrick Alfred Riley, Jr. — 7.2727% - Caleb Wiegand — 5.4545% - Michael James / Mary James Family Trust — 3.1818% - 2011 Harney Revocable Trust — exited GVFS shareholder register, updated as of May 27, 2026, reveals the full ownership composition and corporate roles: | Shareholder | GVFS Stake | Role at GVFS | |---|---|---| | Kennedy & Teresa D. Kennedy Trust (2001) | 28.57% | President, Director | | Taylor Farming, LLC | 19.05% | — | | The 2016 Heffren Revocable Trust | 14.29% | Director | | The 2003 Stanley J. Pura Revocable Trust | 8.65% | Vice President, Director | | The 2000 Romans Revocable Trust | 8.65% | Director | | Caleb & Laura Wiegand Declaration of Trust | 4.76% | Secretary/Treasurer | | Charles L. Narramore | 4.76% | — | | Hitchcock Family Trust (2003) | 4.32% | — | | David & Susan Gill Family Trust (1993) | 4.32% | — | | Tamara McKinsey | 0.92% | — | | Patrick Riley | 0.92% | — | | 2011 Harney Revocable Trust | 0.79% | — | Of particular note: Stanley Pura holds the position of Vice President and Director of GVFS. Simultaneously, his trust owns ~19.7% of 106 Alpine LLC and 14.76% of 159 GRR LLC—both LLCs to which GVFS pays rent. Pura votes as a director on matters from which he personally receives income as a member of the landlords. The 159 GRR operating agreement designates Kennedy as Class A-1 Manager: > "The Class A-1 Members have initially appointed MICHAEL E. KENNEDY to serve as the Class A-1 Manager" The same agreement directly acknowledges the conflict of interest: > "Each Member further acknowledges that they understand that there is a potential for conflicts of interest to arise in Company Counsel's representation of the Company due to its prior and concurrent representation of GVFS and some of the individuals and/or companies affiliated with the individuals shown on Exhibit A as Class A Members." GVFS employees who participate in 159 GRR LLC lose their stake upon termination: > "the resignation from or termination of employment of the Class B Member with GVFS" triggers dissociation. 159 GRR LLC income distribution for 2025, to be paid in 2026—$127,019.98. Kennedy Trust share (18.75%): $23,816. From the internal table: > "This is amount to pay out in 2026 related to 2025 results" --- PART VII: WIEGAND LOAN Caleb Wiegand is an employee of Kennedy Farm Services. Total compensation: salary $164,230.76 + bonus $60,000 = $224,230.76 per year. Simultaneously—a member of 159 GRR, LLC with a 5.4545% stake. On November 1, 2021, Wiegand purchased shares in the three Kennedy group companies, paying with unsecured promissory notes: | Company | Shares | Price | Amount | |---|---|---|---| | Green Valley Farm Supply, Inc. | 5,000 | $196.73 | $983,650 | | Pinnacle Application, Inc. | 2,500 | $32.21 | $80,525 | | Kennedy Farm Services, Inc. | 150 | — | $22,988 | | Total | | | $1,087,163 | From Note M to the 2025 audited financial statements: > "During 2022, the Company issued 7,650 shares of common stock to an employee in exchange for promissory notes totaling $1,087,163. Equal annual installments of principal and interest in the amount of $240,185 are due annually until maturity on January 1, 2027. Interest on the notes accrue at an annual rate of 3.25%. The notes receivables have been classified as a reduction of stockholders' equity." Wiegand's outstanding balance: | Date | Balance | |---|---| | 11/01/2021 | $1,087,163 | | 10/31/2023 | $887,480 | | 10/31/2024 | $676,138 | | 10/31/2025 | $457,927 | In 2025, a payment of $218,211 was received. Remaining balance before maturity on January 1, 2027: $457,927. Wiegand borrowed $1.09 million from his employer to buy a stake in his employer. At the same time, he owns 5.45% of 159 GRR LLC—the entity to which GVFS pays rent. In the group's 2026 mandatory training documents (MAT Annuals), which cover personnel across all four companies—GVFS, Pinnacle, Kennedy Farm Services, and Mantis AG Technology—the position of General Manager alongside Robert B. Thorp lists Jake Wiegand . This is a different individual, not Caleb. --- PART VIII: TAYLOR FARMING—CUSTOMER AND SHAREHOLDER Note C to the 2025 audited financial statements, prepared in 2026: > "One customer (also a 19% stockholder of the Company) accounted for $2,054,470, or 20% and $2,943,447, or 27% of Green Valley's accounts receivable as of October 31, 2025 and 2024, respectively. The same customer accounted for $15,089,387, or 16% and $15,059,724, or 15% of Green Valley's total sales for the years ended October 31, 2025 and 2024, respectively." Note O discloses the name: > "Taylor Farming, LLC — Sales: $15,089,387 — Amounts Due From: $2,054,470 — Relationship: Company Stockholder" Taylor Farming is simultaneously a 19% shareholder of GVFS and its largest customer: $15.1 million in sales (16% of revenue) and $2.1 million in accounts receivable (20% of the total) as of October 31, 2025. --- PART IX: CAPTIVE INSURANCE GVFS participates in three captive insurance programs. Investments as of October 31, 2025: | Structure | 10/31/2025 | 10/31/2024 | |---|---|---| | Terra Captive | $664,068 | $546,089 | | Pioneer Captive | $109,507 | $75,440 | | Paragon Captive | $30,592 | $44,375 | | Captive Insurance Program | $18,874 | $18,874 | | Total | $823,041 | $684,778 | Captive program investments grew by $138,263 over the year. Health insurance (Note R): > "The Company participates in a health insurance group captive program. The Company is liable up to the stop loss threshold of $75,000 per claim... For the year ended October 31, 2025, the Company accrued an estimated liability of $789,000 ." One year earlier, the same figure was $567,000. Health insurance reserve increase over the year: $222,000 (+39%). Workers' compensation (Note Q): > "The Company participates in a workers' compensation insurance group captive program... The Company is liable up to the stop loss threshold of $350,000 per claim... For the year ended October 31, 2025, the Company estimated there was no accrued liability." --- PART X: PPP LOAN AND DIVIDENDS Green Valley Farm Supply received a federal Paycheck Protection Program (PPP) loan: - Lender: Pacific Valley Bank, Salinas, CA - Amount: $2,738,338.68 - SBA Number: 74911970-00 - Date: April 17, 2020 - Rate: 1.000% fixed - Signatory: Michael Kennedy, CEO/President - Funds deposited to Wells Fargo GVFS account 4327990164 In the PPP application, Kennedy listed himself as the sole owner of over 20% (30% stake). In the affiliated structures section, GVFS disclosed common management with: Pinnacle Application Inc., Kennedy Farm Services Inc., 159 GRR LLC, 106 Alpine LLC, and Green Valley Holding TIC. GVFS annually paid at least $600,000 in rent to structures in which Kennedy is manager and beneficiary. Dividend payment history (from calculation tables and audited financial statements): | Fiscal Year | Paid | Kennedy Trust Share | Kennedy Trust Amount | |---|---|---|---| | 2020 (paid 2021) | $680,363.75 | 30% | $204,109 | | 2022 (paid Aug 2022) | $400,000 | 30% | $120,000 | | 2022 (paid 2023) | $400,000 | 28.57% | $114,286 | | 2024 (paid 2025) | $600,000 | 28.57% | ~$171,420 | | 2025 (paid 2026) | $600,000 | 28.57% | ~$171,420 | Total Kennedy Trust dividends for the period 2021–2026: approximately $781,235 . --- DISCLOSED PERSONAL DATA Full identification numbers of individuals appearing as members of 106 Alpine LLC and 159 GRR LLC were found in the documents. Tamara D. McKinsey: SSN: 551-82-9813 Address: 129 Pine Canyon Rd, Salinas, CA 93908 Leland S. McKinsey: SSN: 562-82-5122 Address: PO Box 189, Chualar, CA 93925 The Michael E. Kennedy & Teresa D. Kennedy Trust: TIN: 562-59-4714 (Full TIN shown on 2017 Schedule K-1; partially redacted on later forms) The Hitchcock Family Trust of 2003 UTA: TIN: 570-70-2657 Frank K. & Cheri L. Heffren (GVFS Director, 14.29% shareholder, member of 106 Alpine LLC and 159 GRR LLC): SSN: 569-57-1396 Address: 32144 Chualar Canyon Rd, Chualar, CA 93925