<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 1999
REGISTRATION NO. 333-76759
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
BIONOVA HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2632242
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
6701 SAN PABLO AVENUE ARTHUR H. FINNEL
OAKLAND, CALIFORNIA 94608 BIONOVA HOLDING CORPORATION
(510) 547-2395 6701 SAN PABLO AVENUE
(Address, including zip OAKLAND, CALIFORNIA 94608
code, (510) 547-2395
and telephone number, (Name, address, including
including zip code,
area code, of and telephone number,
Registrant's including
principal executive area code, of agent for
offices) service)
</TABLE>
------------------------
COPY TO:
MICHAEL C. TITENS
THOMPSON & KNIGHT L.L.P.
1700 PACIFIC AVENUE
SUITE 3300
DALLAS, TEXAS 75201
(214) 969-1700
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after effectiveness of the Registration Statement.
--------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 23, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL, AND IT IS NOT SOLICITING AN OFFER TO BUY, THESE SECURITIES IN ANY STATE
WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
PROSPECTUS
8,560,589 SHARES
[LOGO]
BIONOVA HOLDING CORPORATION
COMMON STOCK
$5.75 PER SHARE
------------------
We are distributing transferable rights to holders of our common stock. If
the holders exercise all of the rights issued to them in this rights offering,
except for rights to purchase 9,130,435 shares of common stock which Bionova
International, Inc. has agreed to surrender back to us at no cost, we will issue
up to 8,560,589 shares of common stock. The rights will expire on May 31, 2000.
Our common stock is listed for trading on the American Stock Exchange under
the symbol "BVA." On , 1999, the closing price of the common stock on
the American Stock Exchange was $ per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 TO READ ABOUT RISKS THAT YOU SHOULD
CONSIDER BEFORE EXERCISING THE RIGHTS ISSUED IN THIS RIGHTS OFFERING.
---------------------
<TABLE>
<CAPTION>
PER SHARE TOTAL
------------------- -------------------
<S> <C> <C>
Rights price.............................................. $5.75 $49,223,386
Proceeds, before expenses, to us.......................... $5.75 $49,223,386
</TABLE>
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
PROSPECTUS SUMMARY.......................................... 1
RISK FACTORS................................................ 6
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS............. 10
THE RIGHTS OFFERING......................................... 11
USE OF PROCEEDS............................................. 15
PLAN OF DISTRIBUTION........................................ 16
FEDERAL INCOME TAX CONSEQUENCES............................. 16
TAXATION OF U.S. STOCKHOLDERS............................... 16
TAXATION OF NON-U.S. STOCKHOLDERS........................... 18
TAXATION OF BIONOVA HOLDING CORPORATION..................... 19
DESCRIPTION OF CAPITAL STOCK................................ 19
PRICE RANGE OF COMMON STOCK................................. 20
LEGAL MATTERS............................................... 20
EXPERTS..................................................... 20
IF YOU WOULD LIKE ADDITIONAL INFORMATION.................... 21
</TABLE>
i
<PAGE>
PROSPECTUS SUMMARY
THIS SECTION ANSWERS IN SUMMARY FORM SOME QUESTIONS YOU MAY HAVE ABOUT
BIONOVA HOLDING CORPORATION AND THIS RIGHTS OFFERING. YOU SHOULD READ THE ENTIRE
PROSPECTUS CAREFULLY, INCLUDING THE RISKS DISCUSSED UNDER "RISK FACTORS," BEFORE
EXERCISING YOUR RIGHTS. IN THIS PROSPECTUS, WHEN WE USE THE TERMS "BIONOVA,"
"WE," "US," AND "OUR," THESE TERMS REFER TO BIONOVA HOLDING CORPORATION AND OUR
SUBSIDIARIES, UNLESS THE CONTEXT OTHERWISE REQUIRES. WHEN WE USE THE TERM
"BIONOVA INTERNATIONAL," WE ARE REFERRING TO BIONOVA INTERNATIONAL, INC., A
DELAWARE CORPORATION THAT OWNS APPROXIMATELY 76.6% OF OUR COMPANY.
QUESTIONS AND ANSWERS ABOUT BIONOVA HOLDING CORPORATION
WHAT IS BIONOVA HOLDING CORPORATION?
- - Bionova Holding Corporation is a holding company for:
- Agrobionova, S.A. de C.V., a Mexican corporation, of which Bionova owns
80%;
- International Produce Holding Company, a Delaware corporation, of which
Bionova owns 100%;
- DNA Plant Technology Corporation, a Delaware corporation, of which Bionova
owns 100%; and
- VPP Corporation, a Delaware corporation, of which Bionova owns 100%.
- Please see page 2 for a chart illustrating our corporate structure.
WHAT DO WE DO?
- - Through our subsidiaries, we grow, market and distribute fresh fruits and
vegetables, and we conduct research and development relating to plants,
particularly fruits and vegetables. Our research focuses on improving plants
by altering their genetic composition.
- Agrobionova grows fresh fruits and vegetables, primarily tomatoes and
peppers, in Mexico and exports fresh produce to the United States.
Agrobionova owns 50.01% of Interfruver de Mexico, S.A. de C.V., a Mexican
corporation, which markets and distributes fresh produce in Mexico,
including fruits and vegetables supplied by Agrobionova. Agrobionova also
owns 98% of Siembra Cultivo y Cosecha del Noreste, S.A. de C.V., a Mexican
corporation, which provides labor and administrative services to
Agrobionova.
- International Produce is a holding company whose subsidiaries market and
distribute fresh produce in the United States and Canada, including fruits
and vegetables supplied by Agrobionova.
- DNA Plant Technology conducts research and development relating to plants,
and develops and markets premium, differentiated, fresh and processed,
branded fruits and vegetables. DNA Plant Technology also licenses its
technology to other agricultural companies and participates in joint
ventures with other technology companies.
- VPP conducts research and development relating to plants that are grown
from starter plants rather than from seeds.
1
<PAGE>
WHAT IS OUR CORPORATE STRUCTURE?
[(CORPORATE STRUCTURE CHART)]
WHERE ARE WE LOCATED?
Our corporate headquarters are located at:
Bionova Holding Corporation
6701 San Pablo Avenue
Oakland, California 94608
(510) 547-2395
2
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING
WHAT IS A RIGHT?
A right entitles you to purchase one share of common stock for $5.75. We
will distribute to you, at no charge, three rights for every four shares of our
common stock that you own on , 2000. We will not distribute any
fractional rights, but will round the number of rights you are entitled to
receive up to the nearest whole number. Each right will expire on May 31, 2000.
When you "exercise" a right, that means that you choose to purchase the common
stock that the right entitles you to purchase. You may exercise any number of
your rights, or you may choose not to exercise any rights.
WILL EVERY STOCKHOLDER RECEIVE RIGHTS IN PROPORTION TO THEIR CURRENT HOLDINGS?
Yes, except Bionova International will surrender back to us at no cost
9,130,435 rights it acquires in the rights offering and will retain 4,427,195
rights. Bionova International has agreed to surrender these rights because it
purchased a total of 5,217,391 shares of our common stock for $30 million on
October 1, 1998. Bionova International completed the purchase of common stock
before the rights offering to provide us with additional capital more quickly
than would have been possible through the rights offering. By surrendering these
rights, Bionova International is put back where it would be if it invested its
$30 million in this rights offering.
WHY ARE WE ENGAGING IN A RIGHTS OFFERING?
The rights offering is part of a recapitalization program adopted by our
Board of Directors in October 1998.
The recapitalization program has two parts:
- Investment by Bionova International--In October 1998, Bionova
International invested $30 million in our company to purchase 5,217,391
shares of our common stock at $5.75 per share. We used a portion of the
proceeds from Bionova International's investment to repay approximately
$13 million of outstanding indebtedness to Bionova International and its
affiliates.
- Rights offering--We are issuing to all of our stockholders of record as of
, 2000, three transferable rights for every four shares of
common stock you own on that date. Our Board approved this rights offering
to give you the right to invest in our company on the same terms as
Bionova International and share in any benefits resulting from Bionova
International's $30 million investment, and to allow you to maintain or
increase your current equity interest in Bionova. The proceeds from the
rights offering, if any, will be used to repay our outstanding
indebtedness and to fund our working capital needs.
HOW DID WE ARRIVE AT THE $5.75 PER SHARE PRICE?
We arrived at the $5.75 per share price through negotiations with Bionova
International in connection with its purchase of 5,217,391 shares of our common
stock in October 1998. We appointed a Special Committee of our Board of
Directors to negotiate with Bionova International. Only directors with no
affiliation to Bionova International served on this committee. The committee
hired Piper Jaffray Inc., an independent investment banking firm, to assist the
committee in its negotiations with Bionova International. At the conclusion of
the negotiations, Piper Jaffray Inc. issued its opinion that the $5.75 per share
price paid by Bionova International was fair to our stockholders.
The Special Committee recommended that we give all of our stockholders the
same opportunity to purchase shares of our common stock as was afforded Bionova
International. Through this rights
3
<PAGE>
offering, we are offering you the opportunity to purchase additional shares in
an amount proportional to your existing interest in our common stock at the same
price per share as was paid by Bionova International in October 1998. As of the
date of this prospectus, our common stock trades at a price below $5.75 per
share. Our common stock has not traded at or above $5.75 for over two years.
HOW DO I EXERCISE MY RIGHTS?
To exercise your rights, you must complete the enclosed rights certificate
and forward it to The Bank of New York Company, Inc. on or before May 31, 2000.
The address for The Bank of New York Company, Inc. is on page 14. Your rights
certificate must be accompanied by proper payment for each share that you wish
to purchase. If your shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee, you will need to contact the
nominee to exercise your rights. See "The Rights Offering--Exercise of Rights"
and "Method of Payment" for more information on how to exercise your rights.
AFTER I EXERCISE MY RIGHTS, CAN I CHANGE MY MIND?
No. Once you send in your rights certificate and payment, you cannot revoke
the exercise of your rights.
IS EXERCISING MY RIGHTS RISKY?
The exercise of your rights involves a degree of risk. You should carefully
consider the "Risk Factors" described in this prospectus, beginning on page 6.
WHAT HAPPENS IF I CHOOSE NOT TO EXERCISE MY RIGHTS?
You will retain your current number of shares of common stock. If you do not
exercise your rights, your current percentage ownership in Bionova could be
diluted if other stockholders, including Bionova International, decide to
exercise their rights. See "Risk Factors--Dilution" for more information
regarding the dilution of your interest if you do not exercise your rights.
CAN I SELL MY RIGHTS?
Yes, the rights are transferable, but there is currently no active trading
market for the rights. We do not intend to apply for a listing or quotation for
the rights on any stock exchange or stock market. Therefore, you may not be able
to sell your rights at all or at a price that is satisfactory to you. See "Risk
Factors--Because no prior market for the rights exists, you may be unable to
sell or transfer the rights" for more information on your ability to transfer
the rights.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF EXERCISING MY RIGHTS?
The receipt and exercise of your rights are intended to be nontaxable.
Stockholders who sell their rights may be taxed on all or a portion of the
proceeds from that sale. See "Federal Income Tax Considerations" for more
information regarding the taxation of the rights.
WHEN WILL I RECEIVE MY NEW SHARES?
If you purchase shares of common stock through the rights offering, our
transfer agent will send you certificates representing those shares promptly
after you exercise your rights.
4
<PAGE>
HOW MUCH MONEY WILL BIONOVA RECEIVE FROM THE RIGHTS OFFERING?
Our gross proceeds from the rights offering depend on the number of rights
that are exercised. If all of our stockholders exercise all the rights, other
than the 9,130,435 rights Bionova International will surrender to us at no cost,
we will receive proceeds of approximately $49.2 million.
HOW WILL WE USE THE PROCEEDS FROM THE RIGHTS OFFERING?
We intend to use the proceeds from the rights offering to repay a portion of
our outstanding debt and for additional working capital. See "Use of Proceeds"
for additional information on our use of the proceeds from this offering.
HOW MANY SHARES WILL BE OUTSTANDING AFTER THE RIGHTS OFFERING?
The number of shares of common stock outstanding after the rights offering
depends on the number of rights that are exercised. If our stockholders exercise
all of their rights, other than the rights Bionova International will surrender
to us, then we will issue a total of 8,560,589 new shares of common stock. We
will then have approximately 32,148,620 shares of common stock issued and
outstanding.
ARE THERE DIFFERENCES BETWEEN EXERCISING THE RIGHTS IN THIS RIGHTS OFFERING
AND BUYING SHARES OF BIONOVA'S COMMON STOCK IN THE OPEN MARKET?
Yes. Some of the differences are:
- Price--It will cost you $5.75 to purchase one share of common stock in the
rights offering. The price per share of common stock purchased on the open
market may be higher or lower than the $5.75 per share price. On
, 2000, the closing price of the common stock on the
American Stock Exchange was $ per share. See "Price Range of Common
Stock" for more information on historical prices of our common stock.
- Limit on number of shares--In the rights offering you are only entitled to
purchase an additional three shares for every four shares you owned on
, 2000. If you want to significantly increase your ownership
interest in Bionova, you may be able to acquire more shares of common
stock on the open market.
- Dilutive effect--A purchase on the open market will increase your
ownership interest in Bionova slightly more than exercising the same
number of rights because of the dilution that results from issuances of
additional shares by Bionova.
WHO CAN I TALK TO IF I HAVE MORE QUESTIONS?
If you have more questions about the rights offering, please contact:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072
(877) 460-2558
5
<PAGE>
RISK FACTORS
In deciding whether to exercise your rights, and when you evaluate our
performance and the forward-looking statements in this prospectus, you should
carefully consider the following risk factors, as well as the other information
contained in this prospectus.
RISKS RELATING TO THE RIGHTS OFFERING
THE $5.75 EXERCISE PRICE MAY BE ABOVE THE FAIR VALUE OF OUR STOCK
The $5.75 per share exercise price is not an indication of the actual value
of Bionova or of our common stock. We arrived at the $5.75 per share price
through negotiation with Bionova International in connection with its purchase
of 5,217,391 shares of our common stock on October 1, 1998. In those
negotiations, we sought a high purchase price because a high purchase price
would result in greater proceeds to Bionova. The rights offering is only an
opportunity for you to purchase additional shares at the same price per share as
was paid by Bionova International. If you exercise your rights, you may not be
able to sell the shares of common stock that you receive at a price equal to or
greater than $5.75 per share. The market price of our common stock fluctuates
and has been below $5.75 per share for over two years.
IF YOU DO NOT EXERCISE YOUR RIGHTS, YOUR OWNERSHIP INTEREST MAY BE DILUTED
If you do not exercise all of your rights, you may experience dilution of
your percentage ownership in our common stock relative to stockholders who
exercise their rights. For example, if Bionova International exercises the
4,427,195 rights it will retain and no other stockholder exercises any rights,
then Bionova International's percentage ownership will increase to 80.3% and the
other stockholders' proportionate interest in Bionova will decrease by
approximately 3.7%. The chart below illustrates the potential dilution that
could result if a stockholder who owns 100,000 shares of common stock fails to
exercise its rights and all of the other stockholders exercise all their rights.
<TABLE>
<CAPTION>
AFTER THE RIGHTS OFFERING
AFTER THE RIGHTS OFFERING ASSUMING ALL STOCKHOLDERS
BEFORE THE ASSUMING ALL STOCKHOLDERS OTHER THAN THIS STOCKHOLDER
RIGHTS OFFERING EXERCISE ALL RIGHTS EXERCISE THEIR RIGHTS
--------------- ------------------------- ---------------------------
<S> <C> <C> <C>
Shares owned by stockholder........ 100,000 175,000 100,000
Total number of common shares
outstanding...................... 23,588,031 32,148,620 32,073,620
Stockholder's percentage
ownership........................ 0.42% 0.54% 0.31%
Book Value per Share
(as of September 30, 1999)....... $0.75 $0.96 $0.55
</TABLE>
BECAUSE NO PRIOR MARKET FOR THE RIGHTS EXISTS, YOU MAY NOT BE ABLE TO SELL OR
TRANSFER THE RIGHTS
You are permitted to sell or transfer your rights, but we cannot assure you
that such a sale will be practicable or profitable. There is currently no active
trading market for the rights and we do not intend to apply for a listing or
quotation for the rights on any stock exchange or stock market. Therefore, we
cannot assure you that you will be able to sell your rights at all or at a
satisfactory price.
THE SALE OF A SUBSTANTIAL AMOUNT OF COMMON STOCK MAY AFFECT THE MARKET PRICE
If substantial amounts of common stock are sold in the public market
following the rights offering, the market price of the common stock could be
adversely affected. If the rights offering is fully subscribed, we will have
approximately 32,148,620 shares of common stock outstanding. Of those shares,
approximately 22,504,034 shares or 70% percent will be held by Bionova
International. Bionova International is an "affiliate" of Bionova under
Rule 144 of the Securities Act of 1933 and therefore
6
<PAGE>
the shares of common stock owned by Bionova International will be subject to the
volume limitations of Rule 144 and other resale restrictions. The sale of a
substantial number of these shares at any time or over time could adversely
affect the market price of our common stock. We cannot predict the effect that
the availability and future sales of common stock could have on the market
price.
RISKS RELATING TO OUR FINANCIAL CONDITION
WE MAY CONTINUE TO SUSTAIN LOSSES AND ACCUMULATE DEFICITS IN THE FUTURE
We have sustained losses in 1996, 1997 and 1998. As of September 30, 1999
our accumulated deficit was $90.3 million. For the nine months ended
September 30, 1999, we had a net loss of $24.5 million. The factors that caused
these losses, including factors described in this section, may continue to limit
our ability to make a profit in the future.
EVEN AFTER THE RIGHTS OFFERING, WE MAY NEED ADDITIONAL FINANCING TO ACHIEVE OUR
GROWTH AND TECHNOLOGY OBJECTIVES, WHICH COULD HURT OUR FINANCIAL CONDITION
The recapitalization program is intended to allow us to repay a portion of
our outstanding debt and raise additional working capital. Even after the
completion of the recapitalization program we may need additional capital to
meet our growth objectives and working capital requirements, and to fund the
purchase and development of new technologies. Our projected cash flows from
operations and existing capital resources, including our existing credit lines,
may not be sufficient. Therefore, our ability to pursue these acquisitions may
depend on our ability to obtain additional capital, which could cause us to
incur additional debt or issue additional equity securities. We cannot assure
you that additional capital will be available on satisfactory terms, if at all,
and, as a result, we may be restricted in our pursuit of future growth and
technology strategies.
OUR LEVERAGED POSITION COULD CAUSE US TO BE UNABLE TO MEET OUR CAPITAL NEEDS,
WHICH COULD HURT OUR FINANCIAL CONDITION
At September 30, 1999 we had $122.4 million of indebtedness and stockholders
equity of $17.6 million. This level of indebtedness may pose substantial risks
to our company and to our stockholders, including the possibility that we may
not generate sufficient cash flow to pay our outstanding debts. Our level of
indebtedness may also adversely affect our ability to incur additional
indebtedness and finance our future operations and capital needs, and may limit
our ability to pursue other business opportunities.
RISKS RELATING TO OUR FARMING AND DISTRIBUTION BUSINESS
BAD WEATHER AND CROP DISEASE CAN AFFECT THE AMOUNT OF PRODUCE WE CAN GROW, WHICH
CAN DECREASE OUR REVENUES AND PROFITABILITY
Weather conditions greatly affect the amount of fresh produce we bring to
market, and, accordingly, the prices we receive for our produce. Storms, frosts,
droughts, and particularly floods, can destroy a crop and less severe weather
conditions, such as excess precipitation, cold weather and heat, can kill or
damage significant portions of a crop. Crop disease and pestilence can be
unpredictable and can have a devastating effect on our crops, rendering them
unsalable and resulting in the loss of all or a portion of the crop for that
harvest season. Even when only a portion of our crops are damaged, the profits
we could have made on the crop will be severely affected because the costs to
plant and cultivate the entire crop will have been incurred although we may
experience low yields or may only be able to sell a portion of our crop.
7
<PAGE>
LABOR SHORTAGES AND UNION ACTIVITY CAN AFFECT OUR ABILITY TO HIRE WORKERS TO
HARVEST AND DISTRIBUTE OUR CROPS WHICH CAN HURT OUR FINANCIAL CONDITION
The production of fresh produce is heavily dependent upon the availability
of a large labor force to harvest crops. The turnover rate among the labor force
is high due to the strenuous work, long hours, necessary relocation and
relatively low pay. If it becomes necessary to pay more to attract labor to farm
work, our labor costs will increase.
The Mexican farm work force retained by Agrobionova is unionized. If the
union attempts to disrupt production and is successful on a large scale, labor
costs will likely increase and work stoppages may be encountered, which would be
particularly damaging in our industry where harvesting crops at peak times and
getting them to market on a timely basis is critical. The majority of fresh
produce is shipped by truck. In the United States and in Mexico, the trucking
industry is largely unionized and therefore susceptible to labor disturbances.
As a result, delivery delays caused by labor disturbances in the trucking
industry or any other reason could limit our ability to get fresh produce to
market before it spoils.
AGROBIONOVA'S RELIANCE ON LEASES AND PRODUCTION ASSOCIATIONS COULD RESULT IN
INCREASED COSTS WHICH COULD ADVERSELY AFFECT OUR FINANCIAL RESULTS
Agrobionova relies on agricultural land leased from others and production
associations with other growers for a large part of its supply. The average term
of these land leases is two years and we expect to renew 100% of these land
leases as they expire. If the other parties to these leases and other
arrangements were to choose not to renew their agreements with Agrobionova,
Agrobionova would be required to locate alternate sources of supply and/or land
or, in some cases, to pay increased rents for land. In addition to increased
rental rates, increases in land costs could result from increases in water
charges, property taxes and related expenses.
RISKS RELATING TO OUR SCIENTIFIC RESEARCH AND DEVELOPMENT BUSINESS
GOVERNMENT REGULATION CAN CAUSE DELAYS AND INCREASED COSTS WHICH DECREASE OUR
REVENUES AND PROFITABILITY
Our subsidiaries' activities in the United States are extensively regulated
by the Food and Drug Administration, the United States Department of
Agriculture, the Environmental Protection Agency, and other federal and state
regulatory agencies in the United States. Similarly, our subsidiaries'
activities in Mexico are extensively regulated by the Secretaria de Agricultura,
Ganaderia y Desarrollo Rural, the Secretaria de Salud, and other federal and
state regulatory agencies in Mexico. Also, our products may require regulatory
approval or notification in the United States or in other countries in which
they are tested, used or sold. The regulatory process may delay research,
development, production, or marketing and require more costly and time-consuming
procedures, and there can be no assurance that requisite regulatory approvals or
registration of our current or future genetically engineered products will be
granted on a timely basis.
IF THE PRODUCTS WE DEVELOP AND MARKET ARE NOT COMMERCIAL SUCCESSES, WE WILL NOT
RECOUP OUR DEVELOPMENT AND PRODUCTION COSTS WHICH WILL HURT OUR FINANCIAL
CONDITION
We are currently in the early stages of marketing several of our new
products, and there can be no assurance that any of these products will be
successful or will produce significant revenues or profits. In addition, a
number of our product development projects are in the early stages, and these
projects may not be successful. The success of these and future products depends
on many variables, including the ability to produce and make available to the
market consistent, premium quality fruits and vegetables on a year-round basis,
consumers' willingness to pay higher prices for premium quality fruits and
vegetables, and retailers' willingness to carry such fruits and vegetables.
8
<PAGE>
IF THE PUBLIC IS UNWILLING TO ACCEPT GENETICALLY ENGINEERED PRODUCTS WE WILL NOT
RECOUP OUR DEVELOPMENT AND PRODUCTION COSTS WHICH WILL HURT OUR FINANCIAL
CONDITION
Some of our products are being developed through the use of genetic
engineering. The commercial success of these products will depend in part on
public acceptance of the cultivation and consumption of genetically engineered
products. We cannot assure you that these products will gain sufficient public
acceptance to be profitable, even if these products obtain the required
regulatory approvals.
WE MAY NOT BE SUCCESSFUL IN OBTAINING PATENTS, PROTECTING OUR TRADE SECRETS AND
CONDUCTING OUR BUSINESS WITHOUT INFRINGING ON THE RIGHTS OF OTHERS, WHICH
COULD ADVERSELY AFFECT OUR BUSINESS
Our success depends, in part, on our ability to obtain and enforce patents,
maintain trade secret protection, and conduct our business without infringing
the proprietary rights of others. If others develop competing technologies and
market competing products, our sales could be adversely affected. If we are not
able to maintain our trade secrets or to enforce our patents, our competitive
position could be adversely affected. In addition, we license technology from
third parties. If we cannot maintain these licenses, or if we cannot obtain
licenses to other useful technology on commercially reasonable terms, our
research efforts could be adversely affected.
RISKS RELATING TO OUR INTERNATIONAL OPERATIONS
LEGAL LIMITATIONS COULD AFFECT OUR OWNERSHIP OF RURAL LAND IN MEXICO, WHICH
COULD DECREASE OUR SUPPLY OF PRODUCE CAUSING A DECREASE IN OUR REVENUES AND
PROFITABILITY
Agrobionova owns a substantial amount of rural land in Mexico which it uses
to grow fresh fruits and vegetables. Historically, the ownership of rural land
in Mexico has been subject to legal limitations and claims by residents of rural
communities, which in some cases could lead to the owner being forced to
surrender its land. Agrobionova has been, and continues to be, involved in land
dispute proceedings as part of its ordinary course of business. If Agrobionova
is required to surrender any of its land, the volume of fresh fruits and
vegetables it produces would decline and adversely affect our profitability.
There are currently pending in Mexico two lawsuits challenging the ownership
rights of Agrobionova to rural land it owns in Mexico. If both of these lawsuits
were decided against Agrobionova, Agrobionova could lose a total of 30% of all
the rural land it owns in Mexico.
CURRENCY FLUCTUATIONS AND INFLATION CAN INCREASE THE COST OF OUR PRODUCTS IN THE
UNITED STATES AND ABROAD WHICH DECREASES OUR REVENUES AND PROFITABILITY
The currency exchange rates in Mexico have historically been volatile. For
example, in December 1994, the Mexican government announced its intention to
float the Mexican peso against the United States dollar and, as a result, the
peso devalued over 40% relative to the dollar during that month. Since
January 1995, the value of the peso has decreased approximately 90%. These
exchange rate fluctuations impact our subsidiaries' business. If the value of
the peso decreases relative to the value of the dollar, then:
(a) imports of produce into Mexico for distribution by our subsidiaries
become more expensive in peso terms and therefore more difficult to sell
in the Mexican market; and
(b) inflation that generally accompanies reductions in the value of the peso
reduces the purchasing power of Mexican consumers, which reduces the
demand for all products including produce and in particular, imported,
branded or other premium-quality produce.
Conversely, if the value of the peso increases relative to the value of the
dollar, Mexican production costs increase in dollar terms, which results in
lower margins or higher prices with respect to produce grown in Mexico and sold
in the United States and Canada.
9
<PAGE>
VOLATILE INTEREST RATES IN MEXICO CAN INCREASE OUR CAPITAL COSTS
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 dollars. Costs of
operations for our Mexican subsidiaries are higher as a result.
TRADE DISPUTES BETWEEN THE UNITED STATES AND MEXICO CAN RESULT IN TARIFFS,
QUOTAS AND BANS ON IMPORTS, INCLUDING OUR PRODUCTS, WHICH CAN HURT OUR
FINANCIAL CONDITION
Despite the enactment of the North American Free Trade Agreement, Mexico and
the United States from time to time are involved in trade disputes. The United
States has, on occasion, imposed tariffs, quotas, and importation bans on
products produced in Mexico. U.S. tomato growers have brought dumping claims
against Mexican tomato growers and may do so again. Because some of our
subsidiaries produce products in Mexico which we sell in the United States, such
actions, if taken, could adversely affect our business.
GENERAL BUSINESS RISKS
BIONOVA INTERNATIONAL HAS SUBSTANTIAL CONTROL OVER OUR COMPANY AND CAN AFFECT
VIRTUALLY ALL DECISIONS MADE BY OUR STOCKHOLDERS
Bionova International beneficially owns 18,076,839 shares of our common
stock accounting for 76.6% of all issued and outstanding shares. As a result,
Bionova International has the requisite voting power to significantly affect
virtually all decisions made by Bionova and our stockholders, including the
power to elect all of our directors and to block corporate actions such as an
amendment to most provisions of our certificate of incorporation. This ownership
and management structure will inhibit the taking of any action by Bionova which
is not acceptable to Bionova International.
WE MAY NOT BE ABLE TO ADAPT OUR MANAGEMENT INFORMATION SYSTEMS AND CONTROLS OR
HIRE AND RETAIN QUALIFIED MANAGEMENT TO KEEP PACE WITH OUR RAPID GROWTH, WHICH
COULD HURT OUR FINANCIAL CONDITION
Our business has undergone rapid growth through acquisition of complementary
businesses. In 1996, we acquired DNA Plant Technology and its subsidiaries. In
1997, we created VPP Corporation to acquire most of the assets of United
Agricorp, Inc. In 1998, we acquired full ownership of Agrobionova and
International Produce Holding Company, and their subsidiaries. As a result of
these acquisitions, significant strains have been placed on the management,
operations and financial resources of our subsidiaries. The realization of our
business strategy depends on, among other things, our ability to adapt
management information systems and controls and to hire, train and retain
qualified employees to allow these operations to be effectively managed. The
geographic separation of our subsidiaries' operations exacerbates these issues.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934. All statements other than statements of historical facts
included in this prospectus, including statements regarding our financial
position, business strategy, prospects, plans and objectives of our management
for future operations, and industry conditions, are forward-looking statements.
Although we believe that the expectations reflected in these forward-looking
statements are reasonable, we can give you no assurance that these expectations
will prove to be correct. In addition to important factors described elsewhere
in this prospectus, the factors set forth under "Risk Factors" sometimes have
affected, and in the future
10
<PAGE>
could affect, our actual results and could cause these results during 1999, and
beyond, to differ materially from those expressed in any forward-looking
statements made by us or on our behalf.
THE RIGHTS OFFERING
THE RIGHTS
We are distributing transferable rights to holders of our common stock on
, 2000, at no cost to the stockholders. We will give you three
rights for every four shares of common stock that you owned on ,
2000. You will not receive fractional rights during the rights offering, but
instead we will round your number of rights up to the nearest whole number. Each
right will entitle you to purchase one share of common stock for $5.75.
EXPIRATION DATE
The rights will expire at 5:00 p.m., New York City Time, on May 31, 2000,
unless we decide to extend the rights offering. We currently do not intend to
extend the rights offering. If you do not exercise your rights prior to May 31,
2000, your rights will be null and void. We will not be required to issue shares
of common stock to you if our rights agent receives your rights certificate or
your payment after that date, regardless of when you sent the rights certificate
and payment, unless you send the documents in compliance with the guaranteed
delivery procedures described below.
DETERMINATION OF SHARE PRICE
Our Board of Directors decided to set an exercise price equal to the price
paid by Bionova International to purchase shares of our common stock in
October 1998. That price of $5.75 per share was determined as a result of
arms-length negotiation between our company and Bionova International. The $5.75
per share price should not be considered an indication of the actual value of
our company or our common stock. The market price of our common stock may
increase or decrease during the rights offering. You may not be able to sell
shares of common stock purchased during the rights offering at a price equal to
or greater than $5.75 per share.
The exercise price for the rights and the number of shares of common stock
issuable on exercise of the rights are subject to adjustment in certain
circumstances. These circumstances include the occurrence of a stock dividend,
recapitalization, reorganization, or a merger or consolidation.
TRANSFERABILITY OF RIGHTS
You may transfer the rights evidenced by a single rights certificate in
whole by endorsing the rights certificate for transfer in accordance with the
accompanying instructions. You may transfer a portion of the rights evidenced by
a single rights certificate by delivering to the rights agent a rights
certificate properly endorsed for transfer, with instructions to register a
portion of the rights evidenced by the rights certificate in the name of the
transferee and to issue a new rights certificate to the transferee evidencing
the transferred rights. In such event, a new rights certificate evidencing the
balance of the rights will be issued to you, or, if you so instruct, to an
additional transferee. Under no circumstances will you be allowed to transfer
fractional rights.
We cannot assure you that selling your rights will be practicable or
profitable. There is currently no active trading market for the rights. We do
not intend to apply for a listing or quotation for the rights on any stock
exchange or stock market. We cannot assure you that you will be able to sell
your rights at all or at a satisfactory price.
11
<PAGE>
If you wish to transfer all or a portion of your rights, you should allow a
sufficient amount of time prior to May 31, 2000, for
- the transfer instructions to be received and processed by the rights
agent;
- a new rights certificate to be issued and transmitted to the transferee or
transferees with respect to the transferred rights, and to you with
respect to retained rights; and
- the rights evidenced by the new rights certificates to be exercised by the
recipients.
Neither we nor the rights agent will be liable to a transferee or transferor
of rights if rights certificates are not received in time for exercise prior to
May 31, 2000.
Except for the fees charged by the rights agent, which we will pay, you will
be responsible for paying any commissions, fees and other expenses including
brokerage commissions and transfer taxes incurred in connection with the
purchase, exercise or transfer of the rights. Neither we nor the rights agent
will pay any such commissions, fees or expenses.
EXERCISE OF RIGHTS
You may exercise your rights by delivering to the rights agent on or prior
to May 31, 2000:
- A properly completed and duly executed rights certificate;
- Any required signature guarantees; and
- Payment in full of $5.75 per share of common stock to be purchased through
the exercise of rights.
You should deliver your rights certificate and payment to the address set
forth below under "--Rights Agent."
METHOD OF PAYMENT
Payment for the shares must be made by:
- cashier's check or bank draft drawn upon a United States bank or a postal,
telegraphic or express money order payable to "The Bank of New York
Company, Inc., as Rights Agent"; or
- wire transfer of funds to the account maintained by the rights agent for
such purpose at:
<TABLE>
<S> <C>
The Bank of New York
ABA Number: 021000018
A/C Number: 8900060603
Reference: Bionova Holding Corporation &
</TABLE>
If you are purchasing an aggregate number of shares of common stock totaling
$500,000 or more, we may agree to an alternative payment method. If you use an
alternative payment method, the rights agent must receive the full amount of
your payment in currently available funds within one American Stock Exchange
trading day prior to May 31, 2000.
Payment will be deemed to have been received by the rights agent only upon:
- clearance of any uncertified check;
- receipt by the rights agent of any certified check or bank draft drawn
upon a U.S. bank or of any postal, telegraphic or express money order; or
- receipt of funds by the rights agent through an alternative payment
method.
12
<PAGE>
PLEASE NOTE THAT FUNDS PAID BY UNCERTIFIED PERSONAL CHECK MAY TAKE AT LEAST
FIVE BUSINESS DAYS TO CLEAR. ACCORDINGLY, IF YOU WISH TO PAY BY MEANS OF AN
UNCERTIFIED PERSONAL CHECK, WE URGE YOU TO MAKE PAYMENT SUFFICIENTLY IN ADVANCE
OF MAY 31, 2000, TO ENSURE THAT THE PAYMENT IS RECEIVED AND CLEARS BEFORE THAT
DATE. WE ALSO URGE YOU TO CONSIDER PAYMENT BY MEANS OF CERTIFIED OR CASHIER'S
CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
GUARANTEED DELIVERY PROCEDURES
If you want to exercise your rights, but time will not permit your rights
certificate to reach the rights agent on or prior to May 31, 2000, you may
exercise your rights if you satisfy the following guaranteed delivery
procedures:
- You send, and the rights agent receives, payment in full for each share of
common stock being purchased through the rights on or prior to May 31,
2000;
- You send, and the rights agent receives, on or prior to May 31, 2000, a
notice of guaranteed delivery, substantially in the form provided with the
attached instructions, from a member firm of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States. The notice of guaranteed delivery must
state your name, the number of rights that you hold, and the number of
shares of common stock that you wish to purchase. The notice of guaranteed
delivery must guarantee the delivery of your rights certificate to the
rights agent within three American Stock Exchange trading days following
the date of the notice of guaranteed delivery; and
- You send, and the rights agent receives, your properly completed and duly
executed rights certificate, including any required signature guarantees,
within three American Stock Exchange trading days following the date of
your notice of guaranteed delivery. The notice of guaranteed delivery may
be delivered to the rights agent in the same manner as your rights
certificate at the addresses set forth below, or may be transmitted to the
rights agent by facsimile transmission, to facsimile number
(212) 815-6213. You can obtain additional copies of the form of notice of
guaranteed delivery by requesting it from the rights agent at the address
set forth below under "--Rights Agent."
SIGNATURE GUARANTEES
Signatures on the rights certificate must be guaranteed by an eligible
guarantor institution, as defined in Rule 17Ad-15 of the Exchange Act, subject
to the standards and procedures adopted by the rights agent. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securities
exchanges and savings associations.
Signatures on the rights certificate do not need to be guaranteed if:
- the rights certificate provides that the shares of common stock to be
purchased are to be delivered directly to you, the record owner of such
rights; or
- the rights certificate is submitted for the account of a member firm of a
registered national securities exchange or a member of the National
Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States.
SHARES HELD FOR OTHERS
If you hold shares of common stock for the account of others, such as a
broker, a trustee or a depository for securities, you should notify the
respective beneficial owners of such shares as soon as possible to obtain
instructions with respect to the rights beneficially owned by them.
13
<PAGE>
If you are a beneficial owner of common stock held by a holder of record,
such as a broker, trustee or a depository for securities, you should contact the
holder and ask him to effect transactions in accordance with your instructions.
FOREIGN STOCKHOLDERS
If your address is outside of the United States or is an APO or FPO address,
we will not mail your rights to you, but the rights agent will hold the rights
for your account. To exercise your rights you must notify the rights agent by
completing an international rights form, which will be mailed to you instead of
a rights certificate. You should mail or telecopy the international rights form
to the rights agent's address and telecopy number, set forth on page 14.
AMBIGUITIES IN EXERCISE OF THE RIGHTS
If you do not specify the number of rights being exercised on your rights
certificate, or if your payment is not sufficient to pay the total purchase
price for all of the shares that you indicated you wished to purchase, you will
be deemed to have exercised the maximum number of rights that could be exercised
for the amount of the payment that the rights agent receives from you.
Any excess payment will be returned to you as soon as practicable by mail,
without interest or deduction.
PLEASE CAREFULLY READ THE INSTRUCTIONS ACCOMPANYING THE RIGHTS CERTIFICATE
AND FOLLOW THOSE INSTRUCTIONS IN DETAIL.
DO NOT SEND RIGHTS CERTIFICATES TO US.
YOU ARE RESPONSIBLE FOR CHOOSING THE PAYMENT AND DELIVERY METHOD FOR YOUR
RIGHTS CERTIFICATES, AND YOU BEAR THE RISKS ASSOCIATED WITH SUCH DELIVERY. IF
YOU CHOOSE TO DELIVER YOUR RIGHTS CERTIFICATE AND PAYMENT BY MAIL, WE RECOMMEND
THAT YOU USE REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED.
WE ALSO RECOMMEND THAT YOU ALLOW A SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY
TO THE RIGHTS AGENT AND CLEARANCE OF PAYMENT PRIOR TO MAY 31, 2000. BECAUSE
UNCERTIFIED PERSONAL CHECKS MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR, WE
STRONGLY URGE YOU TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR
CASHIER'S CHECK, MONEY ORDER OR WIRE TRANSFER OF FUNDS.
OUR DECISION BINDING
All questions concerning the timeliness, validity, form and eligibility of
any exercise of rights will be determined by us and our determinations will be
final and binding. We may waive any defect or irregularity, or permit a defect
or irregularity to be corrected within an amount of time as we may determine, or
reject the purported exercise of any right by reason of any defect or
irregularity in the exercise. Subscriptions will not be deemed to have been
received or accepted until all irregularities have been waived or cured within
such time as we determine in our sole discretion. Neither we nor the rights
agent will be under any duty to give notification of any defect or irregularity
in connection with the submission of rights certificates or incur any liability
for failure to give such notification.
NO REVOCATION
AFTER YOU HAVE EXERCISED YOUR RIGHTS, YOU MAY NOT REVOKE THAT EXERCISE.
FEES AND EXPENSES
We will pay all fees charged by the rights agent. You are responsible for
paying any other commissions, fees, taxes or other expenses incurred in
connection with the exercise or transfer of the rights. Neither we nor the
rights agent will pay such expenses.
14
<PAGE>
RIGHTS AGENT
We have appointed The Bank of New York Company, Inc. as rights agent for the
rights offering. The rights agent's address for packages sent my mail is:
The Bank of New York
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, New York 10286-1248
or if sent by courier or overnight delivery:
The Bank of New York
Tender & Exchange Department
101 Barclay Street
Receive and Deliver Window
New York, New York 10286
The rights agent's telephone number is (800) 507-9357.
You should deliver your rights certificate, payment of the exercise price
and notice of guaranteed delivery, if any, to the rights agent. Eligible
institutions may deliver the notice of guaranteed delivery by facsimile at
(212) 815-6213.
We will pay the fees and expenses of the rights agent, which we estimate
will total $8,000. We have also agreed to indemnify the rights agent from any
liability which it may incur in connection with the rights offering.
IF YOU HAVE QUESTIONS
If you have questions or need assistance concerning the procedure for
exercising rights, or if you would like additional copies of this prospectus,
the instructions, or the notice of guaranteed delivery, you should contact the
information agent:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072
(877) 460-2558
USE OF PROCEEDS
We will apply the net proceeds from the rights offering first to repay a
portion of our outstanding debt and for additional working capital. At
September 30, we had outstanding debt of $122.4 million at interest rates
ranging from 8.5% to 14.5%. If rights are exercised, we will use the proceeds to
repay a portion of this indebtedness.
The rights offering is part of a recapitalization program, adopted by our
Board of Directors in October 1998. The first phase of the program commenced on
October 1, 1998 when Bionova International, our majority stockholder, purchased
a total of 5,217,391 shares of our common stock at $5.75 per share for an
aggregate purchase price of approximately $30 million. We used a portion of the
proceeds from Bionova International's investment to repay approximately
$13 million of outstanding indebtedness to Bionova International and its
affiliates.
The second phase of the recapitalization program is this rights offering.
Our Board of Directors approved the rights offering to allow our stockholders,
other than Bionova International, the right to invest in our common stock on the
same terms as Bionova International and share in any benefits
15
<PAGE>
resulting from Bionova International's $30 million investment, and to allow you
to purchase additional shares of common stock proportional to your existing
interest in our common stock.
If all of our stockholders, including Bionova International, exercise all of
the rights other than the 9,130,435 rights Bionova International will surrender
to us at no cost, our net proceeds as a result of the exercise will be
approximately $49.2 million. However, it is possible that none of our
stockholders will exercise their rights and that there will not be any proceeds
at all.
PLAN OF DISTRIBUTION
Promptly following the effective date of the registration statement that
contains this prospectus, we will distribute the rights and copies of this
prospectus to individuals who own shares of common stock on , 2000.
If you wish to exercise your rights and purchase shares of common stock, you
should complete the rights certificate and return it, with payment for the
shares, to the rights agent, The Bank of New York Company, Inc., at the address
on page 14. See "The Rights Offering--Exercise of Rights" for more information
concerning the exercise of your rights.
If you have any questions, you should contact our information agent,
Corporate Investor Communications, Inc. at the telephone number and address on
page 5.
FEDERAL INCOME TAX CONSEQUENCES
The following summarizes the material federal income tax consequences of the
rights offering to you and Bionova. This summary is based on current law, which
is subject to change at any time, possibly with retroactive effect. This summary
is not a complete discussion of all federal income tax consequences of the
rights offering, and, in particular, may not address federal income tax
consequences applicable to our stockholders subject to special treatment under
federal income tax law. In addition, this summary does not address the tax
consequences of the rights offering under applicable state, local or foreign tax
laws. This discussion assumes that your shares of common stock and the rights
and shares issued to you during the rights offering constitute capital assets.
Receipt and exercise of the rights distributed as part of the rights
offering is intended to be nontaxable to our stockholders, and the following
summary assumes they will qualify for such nontaxable treatment. If, however,
the rights offering does not qualify as a nontaxable distribution, you would be
treated as receiving a dividend to the extent of our current and accumulated
earnings and profits, equal to the fair market value of the rights on their
distribution date and expiration of the rights would result in a capital loss.
You should consult your tax advisor to determine the tax consequences to you
of the rights offering in light of your particular circumstances, including any
state, local and foreign tax consequences.
TAXATION OF U.S. STOCKHOLDERS
The following summary is a general discussion of the material United States
federal income tax consequences of the rights offering to U.S. stockholders
applicable under current law. For purposes of this offering, the term "U.S.
stockholder" means a stockholder who for United States federal income tax
purposes is:
(a) a citizen or resident of the United States;
(b) a corporation or other entity created or organized under the laws of the
United States or of any political subdivision thereof;
(c) an estate, the income of which is subject to United States federal
income taxation regardless of its source;
16
<PAGE>
(d) a trust whose administration is subject to the primary supervision of a
United States court and that has one or more United States persons who
have the authority to control all substantial decisions of the trust; or
(e) a person whose worldwide income or gain is otherwise subject to United
States federal income tax regardless of source or that is otherwise
subject to United States federal income taxation on a net income basis.
RECEIPT OF A RIGHT
You will not recognize any gain or other income upon receipt of a right.
TAX BASIS AND HOLDING PERIOD OF RIGHTS
Your tax basis in each right will depend on whether you exercise the right,
transfer the right, or allow the right to expire. If you exercise or transfer a
right, your tax basis in the right generally will be determined by allocating
the tax basis of your common stock on which the right is distributed between the
common stock and the right, in proportion to their relative fair market values
on the date of distribution of the right. However, if the fair market value of
your rights is less than 15 percent of the fair market value of your existing
shares of common stock, then the tax basis of each right will be deemed to be
zero, unless you elect to allocate tax basis to your rights by attaching an
election statement to your federal income tax return for 1999.
If you allow a right to expire, it will be treated as having no tax basis.
Your holding period for a right will include your holding period for the
share of common stock upon which the right is issued.
EXPIRATION OF RIGHTS
You will not recognize any gain or loss upon the expiration of a right.
TRANSFER OF RIGHTS
If you sell any of your rights, you will recognize a gain or loss equal to
the difference between the sale proceeds and your basis, if any, in the rights
sold. If your holding period for the rights is more than one year, such gain or
loss generally will be long-term capital gain or loss.
EXERCISE OF RIGHTS
You generally will not recognize a gain or loss on the exercise of a right.
The tax basis of any share of common stock that you purchase through the rights
offering will be equal to the sum of your tax basis, if any, in the right
exercised and the price paid for the share. The holding period of the shares of
common stock purchased through the rights offering will begin on the date that
you exercise your rights.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting requirements may apply to dividend
payments on common stock received when you exercise your rights and to payments
on the proceeds of a sale of the rights or common stock. A 31% backup
withholding tax may apply to these payments unless you:
(a) are a corporation or come within other exempt categories and, when
required, demonstrate your exemption; or
17
<PAGE>
(b) provide a correct taxpayer identification number, certify as to no loss
of exemption from backup withholding and otherwise comply with the
requirements of the backup withholding rules.
In addition, if shares of the common stock you acquire when you exercise
your rights are sold to, or through, a "broker," the broker may be required to
withhold 31% of the entire sales price, unless either:
(a) the broker determines that you are a corporation or other exempt
recipient; or
(b) you provide, in the required manner, certain identifying information.
This type of sale must also be reported by the broker to the IRS, unless the
broker determines that you are an exempt recipient. The term "broker" as defined
in Treasury regulations includes all persons who, in the ordinary course of
their business, stand ready to effect sales made by others.
Any amounts withheld under the backup withholding rules from a payment to
you will be allowed as a credit against your United States federal income tax,
provided that the required information is furnished to the IRS.
TAXATION OF NON-U.S. STOCKHOLDERS
The following discussion is limited to the United States federal income tax
consequences that are material to a non-U.S. stockholder.
TRANSFER OF RIGHTS OR COMMON STOCK
You generally will not be subject to United States federal income tax or
withholding tax on gain realized on the sale or exchange of the rights or the
shares of common stock unless:
(a) the gain is effectively connected with the conduct of your U.S. trade or
business;
(b) if you are an individual, you are present in the United States for a
period or periods aggregating 183 days or more during the taxable year of
the transfer and other circumstances are present;
(c) you are subject to tax under Section 877 of the Internal Revenue Code
applicable to U.S. expatriates who lost U.S. citizenship to avoid payment
of taxes; or
(d) the gain is subject to tax under Section 897 of the Internal Revenue
Code regarding "United States real property interests."
We believe the rights and the shares of common stock that you receive when
you exercise your rights should not be "United States real property interests"
within the meaning of Section 897(c) of the Internal Revenue Code. Consequently,
you should not be subject to United States federal income tax or withholding tax
under Section 897 of the Internal Revenue Code on the amount of gain you realize
on the sale or exchange of the rights or the common stock. If you are subject to
United States federal income tax or withholding tax under another exception, you
will be subject to the rules discussed in the section above entitled "Taxation
of U.S. Stockholders," except for specific rules related to dividends and branch
profits tax discussed below.
DIVIDENDS ON COMMON STOCK
Generally, dividends received by you with respect to the common stock you
receive when you exercise your rights will be subject to United States
withholding tax at a rate of 30% of the gross amount of the dividend. This rate
may be reduced by an applicable income tax treaty and compliance with
requirements that you document your entitlement to the benefits of the treaty.
If the dividends are
18
<PAGE>
effectively connected with the conduct of a U.S. trade or business by you, the
dividends will be taxed at the graduated rates applicable to U.S. citizens,
resident aliens, and domestic corporations and would not be subject to United
States withholding tax if you give an appropriate statement to the withholding
agent prior to payment of the dividend. Treasury regulations that will be
effective January 1, 2000, provide alternative methods for establishing
exemptions from or reductions of withholding on payments to foreign persons,
including exemptions for payments through qualified intermediaries.
BRANCH PROFITS TAX
If you are a foreign corporation, you may be subject to an additional branch
profits tax at a rate of 30% or lower treaty rate on dividends or capital gains
that are effectively connected to the conduct of a U.S. trade or business. You
should consult applicable income tax treaties, which may include different
rules, subject to compliance with requirements that you document your
entitlement to treaty benefits.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Backup withholding, which generally is a withholding tax imposed at the rate
of 31% on payments to persons that fail to furnish required information such as
their taxpayer identification number, and information reporting will not apply
to payments of dividends or payments made of the proceeds from the disposition
of rights or common stock to or through the U.S. office of any broker if you
certify to your non-U.S. status under penalties of perjury or otherwise
establish an exemption. This assumes that the payor does not have actual
knowledge that you are a U.S. person or that the conditions of any other
exemption are not, in fact, satisfied.
We must report annually to the IRS and to you any dividends that are subject
to withholding or that are exempt from U.S. withholding tax. Copies of these
information returns may also be made available, under the provisions of a
specific treaty or agreement, to the tax authorities of the country in which you
reside.
Any amounts withheld under the backup withholding rules from a payment to
you generally should be allowed as a refund or a credit against your United
States federal income tax liability, provided that the requisite procedures are
followed.
TAXATION OF BIONOVA HOLDING CORPORATION
We will not recognize any gain, other income or loss upon the issuance of
the rights, the expiration of the rights, or the receipt of payment for shares
of common stock upon exercise of the rights.
DESCRIPTION OF CAPITAL STOCK
Bionova is authorized to issue up to 50 million shares of common stock, par
value $.01 per share. Holders of common stock are entitled to one vote for each
share held on all matters submitted to a vote of the stockholders. Holders of
common stock are also entitled to participate in any dividends declared by our
Board of Directors. However, the payment of any dividends to holders of common
stock will be subject to any preferential dividend rights of any outstanding
preferred stock. Upon our liquidation, dissolution or winding up, our common
stockholders are entitled to receive, subject to the rights of any outstanding
preferred stock, our net assets available after we pay or provide for all of our
debts and other liabilities.
Our Board of Directors is authorized to issue up to 5,000 shares of
preferred stock, par value $.01 per share, in one or more series. Additionally,
the rights and preferences, including voting rights, dividend rights, conversion
rights, redemption privileges and liquidation preferences of each series of
preferred stock we issue will be determined by our Board of Directors. The
rights of the holders of our common stock will be subject to, and may be
adversely affected by, the rights of holders of any
19
<PAGE>
preferred stock that we may issue in the future. No shares of preferred stock
are outstanding and we have no present plans to issue any shares of preferred
stock.
PRICE RANGE OF COMMON STOCK
Our common stock is listed for trading on the American Stock Exchange under
the symbol "BVA". From September 27, 1996 to April 28, 1999, our common stock
traded on the Nasdaq National Market under the symbol "DNAP." From April 29,
1999 to November 3, 1999, our common stock traded on the Nasdaq National Market
under the symbol "BNVA." Since November 4, 1999, our common stock has been
listed for trading on the American Stock Exchange. The following table shows the
quarterly high and low closing sales price per share for our common stock as
reported on the Nasdaq National Market for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
1999
First Quarter............................................. 4 3
Second Quarter............................................ 3 13/16 2 1/2
Third Quarter............................................. 3 1/2 1 15/16
Fourth Quarter (through December 6)....................... 3 1 13/16
1998
First Quarter............................................. 4 1/2 3 7/8
Second Quarter............................................ 4 5/8 3 3/4
Third Quarter............................................. 4 3/8 3 1/8
Fourth Quarter............................................ 3 7/8 3 1/8
1997
First Quarter............................................. 6 3 5/8
Second Quarter............................................ 4 3/4 3 1/2
Third Quarter............................................. 5 3/8 3 5/8
Fourth Quarter............................................ 5 4
</TABLE>
On , 1999, the closing price of the common stock on the
American Stock Exchange was $ per share. As of , 1999 there were
1,546 record holders of the common stock.
We have never paid cash dividends. Our management intends to retain any
future earnings for payment of our outstanding indebtedness and for the
operation and expansion of our business and does not anticipate paying any cash
dividends in the foreseeable future.
LEGAL MATTERS
The validity of the issuance of the shares of common stock offered under
this prospectus will be passed upon for us by Thompson & Knight L.L.P., Dallas,
Texas. Our corporate secretary, Joe A. Rudberg, is a shareholder in the firm of
Thompson & Knight L.L.P.
EXPERTS
The financial statements incorporated in this prospectus by reference to the
Annual Report on Form 10-K for the year ended December 31, 1998, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
20
<PAGE>
IF YOU WOULD LIKE ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the U.S. Securities and Exchange Commission. You may read and
copy this information at the SEC's public reference rooms, which are located at:
<TABLE>
<S> <C>
450 Fifth Street, NW 7 World Trade Center, Suite 1300
Washington, DC 20549 New York, NY 10048
</TABLE>
500 West Madison Street, Suite 1400
Chicago, IL 60661-2511
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. This information is also available on-line through the SEC's
Electronic Data Gathering, Analysis, and Retrieval System (EDGAR), located on
the SEC's web site (http://www.sec.gov.).
Also, we will provide you with any of our documents filed with the SEC. To
request your free copies, please call or write:
Julie Huang
Investor Relations
Bionova Holding Corporation
c/o Edelman Financial Worldwide
1500 Broadway
New York, New York 10036-4015
(212) 768-0550
We have filed a registration statement with the SEC on Form S-3 with respect
to the rights offering. This prospectus is a part of the registration statement,
but the prospectus does not repeat important information that you can find in
the registration statement, reports and other documents that we have filed with
the SEC. The SEC allows us to "incorporate by reference" other documents filed
with the SEC, which means that we can disclose important information to you by
referring you to other documents. The documents that are incorporated by
reference are legally considered to be a part of this prospectus. The documents
incorporated by reference are:
(1) Annual Report on Form 10-K for the year ended December 31, 1998 (filed under
our former name, DNAP Holding Corporation);
(2) Quarterly Reports on Form 10-Q for the quarters ended September 30, 1999,
June 30, 1999 and March 31, 1999;
(3) Definitive Proxy Statement relating to our 1999 annual meeting of
stockholders; and
(4) Any filings with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act of 1934 (File No. 333-09975) between the date of this
prospectus and the expiration of the rights offering.
As you read the above documents, you may find some inconsistencies in
information from one document to another. If you find inconsistencies between
the documents, or between a document and this prospectus, you should rely on the
statements made in the most recent document.
You should rely only on the information in this prospectus or incorporated
by reference. We have not authorized anyone to provide you with any different
information.
This prospectus is not an offer to sell nor is it seeking an offer to buy
these securities in any state where the offer or sale is not permitted. This
prospectus is not an offer to sell nor is it seeking an offer to buy securities
other than the shares of common stock to be issued upon exercise of the rights.
The
21
<PAGE>
information contained in this prospectus is correct only as of the date of this
prospectus, regardless of the time of the delivery of this prospectus or any
sale of these securities.
No action is being taken in any jurisdiction outside the United States to
permit a public offering of the common stock or possession or distribution of
this prospectus in any such jurisdiction. Persons who come into possession of
this prospectus in jurisdictions outside the United States are required to
inform themselves about and to observe any restrictions as to this offering and
the distribution of this prospectus applicable in the jurisdiction.
22
<PAGE>
[LOGO]
<TABLE>
<CAPTION>
<S> <C>
RIGHTS AGENT: INFORMATION AGENT:
The Bank of New York Corporate Investor Communications, Inc.
101 Barclay Street 111 Commerce Road
New York, New York 10286 Carlstadt, New Jersey 07072
(800) 507-9357 (877) 460-2558
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses in connection with this
Registration Statement. We will pay all expenses of the rights offering. All
such expenses are estimates, other than the filing fees payable to the
Securities and Exchange Commission and the American Stock Exchange.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $ 13,703.28
AMEX listing fees........................................... 17,500.00
Printing fees and expenses.................................. 25,000.00
Legal fees and expenses..................................... 22,000.00
Information agent fee....................................... 8,000.00
Blue sky fees and expenses.................................. 5,000.00
Rights agent fee............................................ 8,000.00
Miscellaneous............................................... 10,000.00
-----------
Total................................................... $109,203.28
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL") empowers a corporation to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, employee or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no cause to believe his conduct was unlawful. Subsection (b)
of Section 145 of the DGCL empowers a corporation to indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification may be made in respect to any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
that despite the adjudication of liability such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director,
officer, employee or agent of a corporation has been successful in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) or in
the defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith; that indemnification or advancement of expenses
provided for by Section 145 shall not be deemed exclusive of any other rights to
which the indemnified party may be entitled; and empowers the corporation to
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation against any liability asserted against him or incurred
by him in any such capacity or
II-1
<PAGE>
arising out of his status as such whether or not the corporation would have the
power to indemnify him against such liabilities under Section 145.
Article Five of our Certificate of Incorporation and Article VI of our
By-laws provide in effect for our indemnification of each of our directors and
officers to the fullest extent permitted by applicable law.
ITEM 16. EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------------- -----------
<C> <S>
4.1* Form of Rights Agreement by and between Bionova Holding
Corporation and The Bank of New York Company, Inc. as
rights agent (including form of rights certificate)
4.2* Form of Letter to Stockholders
4.3* Form of Rights Certificate
4.4* Form of Instructions for Rights Certificate
4.5* Form of Letter to Brokers
4.6* Form of Letter to Clients
4.7* Form of Notice of Guaranteed Delivery
4.8* Form of Letter to Foreign Stockholders
4.9* Form of Guidelines to Form W-9
5* Opinion of Thompson & Knight, P.C.
23.1* Consent of Thompson & Knight, P.C. (included in Exhibit 5)
23.2* Consent of independent accountants
24* Power of Attorney (included on signature page)
</TABLE>
- ------------------------
* previously filed
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to Item 15, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-2
<PAGE>
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance on Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it is declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be the initial
bona fide offering thereof.
(3) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement.
(4) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Garza Garcia and State of Nuevo Leon, Mexico on
December 23, 1999.
<TABLE>
<S> <C> <C>
BIONOVA HOLDING CORPORATION
By: /s/ BERNARDO JIMENEZ
----------------------------------------------
Bernardo Jimenez
CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on December 23, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ BERNARDO JIMENEZ
---------------------------------- Chief Executive Officer and Chairman of the December 23, 1999
Bernardo Jimenez Board (Principal Executive Officer)
*
---------------------------------- Chief Financial Officer (Principal Financial December 23, 1999
Arthur H. Finnel and Accounting Officer)
*
---------------------------------- Director December 23, 1999
Evelyn Berezin
*
---------------------------------- Director December 23, 1999
Peter Davis
*
---------------------------------- Director December 23, 1999
Carlos Herrera
---------------------------------- Director
Erik C. Jurgensen
---------------------------------- Director
Eugenio Najera
*
---------------------------------- Director December 23, 1999
Gerald Laubach
*
---------------------------------- Director December 23, 1999
Alejandro Perez
*
---------------------------------- Director December 23, 1999
Christopher Somerville
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ BERNARDO JIMENEZ
-----------------------------
Bernardo Jimenez
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1* Form of Rights Agreement by and between Bionova Holding
Corporation and The Bank of New York Company, Inc. as rights
agent (including form of right certificate)
4.2* Form of Letter to Stockholders
4.3* Form of Rights Certificate
4.4* Form of Instructions for Rights Certificate
4.5* Form of Letter to Brokers
4.6* Form of Letter to Clients
4.7* Form of Notice of Guaranteed Delivery
4.8* Form of Letter to Foreign Stockholders
4.9* Form of Guidelines to Form W-9
5* Opinion of Thompson & Knight, P.C.
23.1* Consent of Thompson & Knight, P.C. (included in Exhibit 5)
23.2* Consent of independent accountants
24* Power of Attorney (included on signature page)
</TABLE>
- ------------------------
* previously filed
