UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
Commission File Number: 0-12177
DNA PLANT TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-2395856
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
6701 San Pablo Avenue, Oakland, California 94608
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 547-2395
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding as of
Class March 31, 1996
Common Stock, $.01 par value 42,882,577
<PAGE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Consolidated Balance Sheets as of March
31, 1996 and December 31, 1995
(b) Consolidated Statements of Operations for
the Three Months Ended March 31, 1996 and
1995
(c) Consolidated Statements of Cash Flows for
the Three Months Ended March 31, 1996 and
1995
(d) Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K
</PAGE>
<PAGE>
<TABLE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<CAPTION>
March 31, December 31,
1996 1995
___________ ____________
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,629 $ 1,742
Accounts receivable, net of allowance for bad debts
of $63 in 1996 and $106 in 1995 2,191 1,922
Inventory 287 380
Other current assets 412 425
Assets held for sale 120 1,038
Total current assets 6,639 5,507
Fixed assets, net of accumulated depreciation of $6,657
in 1996 and $6,612 in 1995 2,252 2,345
Patents and other assets, net of accumulated
amortization of $380 in 1996 and $354 in 1995 500 503
Non-marketable equity investment 1,946 1,946
Excess of purchase price over net assets acquired, net
of amortization of $428 in 1996 and $380 in 1995 1,472 1,520
Total assets $12,809 $11,821
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 708 1,384
Accrued liabilities 1,167 1,539
Accrued compensation 433 361
Dividend payable 1,553 776
Amount payable to DuPont 712 983
Current portion of note payable 209 204
Total current liabilities 4,782 5,247
Deferred revenue 445 584
Deferred compensation 232 232
Note payable less current portion 5,654 709
Total long-term liabilities 6,331 1,525
Stockholders' equity:
Preferred stock, par value $.01 per share;
authorized 5,000 shares; $2.25 convertible
preferred stock; issued and outstanding - 1,380
shares in 1996 and 1995 (aggregate liquidation
preference of $34,500) 14 14
Series A convertible preferred stock par value $.01
per share; authorized 3 shares; issued - and
outstanding 3 shares in 1996, and 1995 (aggregate
liquidation preference of $16,500) -- --
Series B convertible preferred stock, par value $.01
per share; authorized 1 share; issued and
outstanding no shares in 1996 and 1995 -- --
Series C convertible preferred stock, par value $.01
per share; authorized 1 share; issued and
outstanding no shares in 1996 and 1995 -- --
Common stock, par value $.01 per share; authorized
60,000 shares; issued 42,883 shares in 1996 and
42,829 shares in 1995 429 420
Additional paid in capital 159,698 160,405
Accumulated deficit (158,445) (155,798)
Total stockholders' equity 1,696 5,049
Total liabilities and stockholders' equity $12,809 $11,821
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
______________________
1996 1995
<C> <C> <C>
Revenues:
Produce sales $3,509 $3,071
Product development agreements 495 340
Investment and royalty income 254 1,479
Total revenues 4,258 4,890
Operating expenses:
Cost of produce sales 3,614 3,619
Exit carrot processing -- 380
Research and product development 1,344 1,636
Selling, general and administrative 2,011 1,390
Total operating expenses 6,969 7,025
Loss from operations (2,711) (2,135)
Gain on sale of assets 64 24
Net loss (2,647) (2,111)
Preferred stock dividend (776) (776)
Net loss applicable to common stockholders $(3,423) $(2,887)
Net loss per common share $(.08) $(.09)
Weighted average common shares outstanding 42,847 30,793
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
______________________
1996 1995
__________ __________
<S> <C> <C>
Cash flows from operating activities:
Net loss $(2,647) $(2,111)
Reconciliation of net loss to net
cash used in operating activities:
Depreciation and amortization 164 120
Provision for uncollectible accounts (43) (161)
Compensation and expenses paid in common stock 70 54
Net (gain) loss from disposal of fixed assets (64) 32
Net changes in:
Accounts receivable (225) 270
Inventory 93 (268)
Other current assets 13 (318)
Other assets (23) (12)
Accounts payable and accrued liabilities (970) (181)
Deferred revenue and compensation (139) (21)
Net cash used in operating activities (3,771) (2,596)
Cash flows from investing activities:
Capital expenditures -- (6)
Sales and maturities of temporary investments -- 2,505
Proceeds from sale of assets 713 24
Net cash provided by investing activities 713 2,523
Cash flows from financing activities:
Proceeds from issuance of note payable 5,000 --
Preferred stock dividends -- (776)
Payment of principle on notes payable (55) --
Net cash provided by (used in) financing activities 4,945 (776)
Net increase (decrease) in cash and cash equivalents 1,887 (849)
Cash and cash equivalents, beginning of period 1,742 1,202
Cash and cash equivalents, end of period $3,629 $ 353
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
DNA PLANT TECHNOLOGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1996
(Unaudited)
Note 1 - BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's 1995 Annual Report on
Form 10-K.
In the opinion of the Company's management, the accompanying unaudited,
consolidated financial statements contain adjustments, all of which are of a
normal recurring nature, necessary to present fairly the Company's financial
position as of March 31, 1996 and the results of its operations and its cash
flows for the three months ended March 31, 1996.
Certain reclassifications have been made to prior period amounts to be
consistent with the current period presentation.
Interim results are not necessarily indicative of results for the full
fiscal year.
Note 2 - AGREEMENT AND PLAN OF MERGER
On January 26, 1996, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Empresas La Moderna, S.A. de C.V., a
corporation under the laws of the United Mexican States ("ELM"), Bionova, S.A.
de C.V., a Corporation organized under the laws of the United Mexican States
("Bionova"), Bionova U.S. Inc., a Delaware corporation ("Bionova U.S."), and
Bionova Acquisition, Inc., a Delaware corporation ("Merger Sub"), pursuant to
which, among other things: (i) Merger Sub will be merged with and into the
Company (the "Merger"); (ii) the Company will become a wholly-owned subsidiary
of Bionova U.S.; (iii) each share of common stock, par value $.01 per share
("Common Stock") of the Company issued and outstanding at the time of the
Merger (the "Effective Time") will be converted into and represent the right
to receive one share of Bionova U.S.'s common stock, each share of the
Company's $2.25 Convertible Exchangeable Preferred Stock, par value $.01
("$2.25 Convertible Preferred Stock"), issued and outstanding at the Effective
Time will be assumed by Bionova U.S. and will become a corresponding right to
receive 6.8375 shares of Bionova U.S.'s common stock, and each share of the
Company's Series A Preferred Stock ("Series A Preferred Stock"), par value
$.01 issued and outstanding at the Effective Time will be converted into and
represent the right to receive 1,000 shares of Bionova U.S.'s common stock,
except for any shares of the Company's securities held in the treasury of the
Company or held by any subsidiary of the Company, which will be cancelled and
(iv) each option or warrant to purchase shares of Common Stock outstanding at
the Effective Time will be converted into a corresponding right to acquire
shares of Bionova U.S.'s common stock. Assuming no exercise of dissenter's
rights of appraisal in connection with the Merger, the holders of the
Company's capital stock, as a group, will own approximately 30% of the
outstanding shares of Bionova U.S.'s common stock after the Merger. It is
expected that Bionova U.S. will change its name to DNAP Holding Corporation as
of the Effective Time. For additional information regarding the agreement and
plan of merger see the Company's 1995 Form 10-K.
Note 3 - INVENTORIES
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
___________ ____________
(Unaudited)
<S> <C> <C>
Prepaid grower fees $ 59 $119
Raw materials and seed 154 192
Finished goods 74 69
Total Inventory $287 $380
</TABLE>
Note 4 - SUBSEQUENT EVENT
During the second quarter of 1996, the Chief Operating Officer ("COO")
of the Company resigned from the Company. Pursuant to the terms of the COO's
employment agreement, the Company is obligated to pay to the COO $312,000
over a twelve month period commencing May 11, 1996, and ending April 30, 1997.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
March 31, 1996
GENERAL
The Company is a leading agribusiness biotechnology company focused on the
development and marketing of premium, fresh and processed branded fruits and
vegetables developed through advanced biotechnological breeding, genetic
engineering, and other technologies.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1996 Compared to Three Months Ended March 31,
1995
For the three months ended March 31, 1996, the Company's loss increased to
$2.6 million from $2.1 million in the 1995 period. This $.5 million decrease
in operations was primarily attributable to $.6 million in expenses related to
the pending Merger (see Note 2 to the Company's Consolidated Financial
Statements).
For the three months ended March 31, 1996, produce sales increased fourteen
percent to $3.5 million from $3.1 in 1995. This $.4 million increase is a
result of increased volume and improved pricing for carrots and cherry
tomatoes.
Revenues from product development agreements increased slightly to $.5
million in 1996 from $.3 million in 1994, principally due to new commercial
contracts.
Investment and royalty income decreased to $.3 million in 1996 from $1.5
million in 1995, principally as a result of recording in 1995 $1.1 million of
net revenue from the sale of Frost Technology and recognizing revenue for cash
received on an option to purchase licensed technology.
Cost of produce sales remained unchanged at $3.6 million even though
produce sales increased fourteen percent.
Research and product development expenses decreased eighteen percent to
$1.3 million in 1996 from $1.6 million in 1995, primarily due to the Company's
decision to further sharpen the focus of its research and concentrate its
efforts principally in the area of fruits and vegetables.
Selling, general and administrative expenses increased to $2.0 million in
1996 from $1.4 million in 1995 as a result of $.6 million in expenses related
to the pending Merger (see Note 2 to the Company's Consolidated Financial
Statements).
Liquidity and Capital Resources
At March 31, 1996, the Company had $3.6 million in cash and cash
equivalents, a
$1.9 million net increase from $1.7 million at December 31, 1995. This
increase is primarily the net result of proceeds from the issuance of a note
payable of $5.0 million and the sale of assets for $.7 million offset by the
funding of operating losses of $3.8 million. The $.7 million in proceeds from
the sale of assets was used to satisfy the payable to DuPont in April, 1996.
Based on its current business plans including consummation of the pending
Merger (see Note 2 to the Company's Consolidated Financial Statements for more
details concerning the Merger), the Company believes that its current cash
resources, including the $5.0 million received from Bionova U.S. in January
1996, and $5.0 million to be received on July 1, 1996, if the closing of the
Merger has not been effected by such date, its revenues from prospective and
existing research, product development and licensing arrangements, revenues
from produce sales, accompanied by projected improvements in the gross margin
on such produce sales and reduction of fixed overhead and administrative costs
will be sufficient to fund its cash requirements into 1997, although there can
be no assurance with respect thereto.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) On February 2, 1996, the Company filed a report on Form 8-K to report
that it entered into an Agreement and Plan of Merger with Empressas La
Moderna, S.A. de C.V.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DNA PLANT TECHNOLOGY CORPORATION
Date: May 13, 1996 By: /s/ Robert Serenbetz
Robert Serenbetz, Chairman and
Chief Executive Officer
(Principal Operating Officer)
Date: May 13, 1996 By: /s/ Willem F.O. Spiegel
Willem F.O. Spiegel,
Vice President
& Chief Financial Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-Q and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3629
<SECURITIES> 0
<RECEIVABLES> 2254
<ALLOWANCES> 63
<INVENTORY> 287
<CURRENT-ASSETS> 6639
<PP&E> 8909
<DEPRECIATION> 6657
<TOTAL-ASSETS> 12809
<CURRENT-LIABILITIES> 4782
<BONDS> 0
<COMMON> 429
0
14
<OTHER-SE> 1253
<TOTAL-LIABILITY-AND-EQUITY> 12809
<SALES> 3509
<TOTAL-REVENUES> 4258
<CGS> 3614
<TOTAL-COSTS> 4958
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 90
<INCOME-PRETAX> (2647)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2647)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2647)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
