ECOSCIENCE CORP/DE, S-1, 1999-05-06

ECOSCIENCE CORP/DE
S-1, 1999-05-06
AGRICULTURAL CHEMICALS

Previous: INTERNET BUSINESS INTERNATIONAL INC, 8-K, 1999-05-06

Next: SMITH BARNEY INTERMEDIATE MUNICIPAL FUND INC, 497, 1999-05-06

As Filed with the Securities and Exchange Commission on May 6, 1999
Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

-----------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

---------------------------------------

ECOSCIENCE CORPORATION
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
Delaware 0182 04-2912632
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

10 Alvin Court
East Brunswick, New Jersey 08816
(732) 432-8200
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

------------------------------

Michael A. DeGiglio
President and Chief Executive Officer
EcoScience Corporation
10 Alvin Court
East Brunswick, New Jersey 08816
(732) 432-8200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)

------------------------------

Copies of all communications to:
Philip D. Forlenza, Esq.
Giordano, Halleran & Ciesla, P.C.
125 Half Mile Road, P.O. Box 190
Middletown, New Jersey 07748
(732) 741-3900

------------------------------

Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as the Selling
Stockholders may decide.

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, check the following box. [X]

<PAGE>

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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

<TABLE>
<CAPTION>
Calculation of Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of each Class of Amounts to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Share (1) Offering Price(1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value
per share 1,633,273 Shares $1.6875 $2,756,149 $767
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

- ----------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933 based on the
average of the high and low sales prices of the Common Stock of the
Registrant on May 3, 1999 as reported by Nasdaq.

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, as amended, or until this Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

<PAGE>
- --------------------------------------------------------------------------------

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 these securities, and it is not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated May 6, 1999

PROSPECTUS

1,633,273 SHARES

ECOSCIENCE CORPORATION

COMMON STOCK

The selling stockholders identified in this prospectus are offering
1,633,273 shares of EcoScience Corporation's Common Stock. EcoScience's Common
Stock is traded on the Nasdaq SmallCap Market under the symbol "ECSCE." The last
reported sale price for the common stock on the Nasdaq SmallCap Market on May 4,
1999 was $1-5/8 per share. EcoScience will not receive any of the proceeds from
the sale of shares by the selling stockholders and is not offering any shares
for sale under this prospectus. See "Plan of Distribution" for a description of
sales of the shares by the selling stockholders.

--------------------

INVESTING IN THE COMMON STOCK INVOLVES RISKS.

SEE "RISK FACTORS" BEGINNING ON PAGE 6.

--------------------

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFSENSE.

The date of this Prospectus is May __, 1999.

- --------------------------------------------------------------------------------

<PAGE>

- --------------------------------------------------------------------------------

TABLE OF CONTENTS

Page
----

Prospectus Summary.......................................................... 3
Risk Factors................................................................ 6
Market for Common Stock and Dividend Policy................................. 14
Selected Financial Data..................................................... 14
Management's Discussion and Analysis of Financial Condition and
Result of Operations.................................................. 16
Pro forma Condensed Consolidated Financial Information...................... 31
Business.................................................................... 36
Management.................................................................. 51
Principal and Selling Stockholders.......................................... 56
Certain Relationships and Related Transactions.............................. 57
Plan of Distribution........................................................ 58
Description of Securities................................................... 59
Shares Eligible for Future Sale............................................. 60
Legal Matters............................................................... 61
Experts..................................................................... 61
Available Information....................................................... 61
Index to Consolidated Financial Statements.................................. F-1

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM
THAT CONTAINED IN THIS PROSPECTUS. THE SELLING STOCKHOLDERS ARE OFFERING TO
SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON STOCK ONLY IN JURISDICTIONS
WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE
TIME OF DELIVERY OF THIS PROSPECTUS OR OF ANY SALE OF THE COMMON STOCK. IN THIS
PROSPECTUS, REFERENCES TO "ECOSCIENCE," "WE," "US" AND "OUR" REFER TO ECOSCIENCE
CORPORATION AND ITS SUBSIDIARIES.

FORWARD LOOKING STATEMENTS

This Prospectus contains forward looking statements that have been made
pursuant to the provisions of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements are not historical facts but rather are
based on current expectations, estimates and projections about our industry, our
beliefs, and assumptions. Words such as "anticipates," "expects," "intends,"
"plans," "believes," "seeks," "estimates" and variations of such words and
similar expressions are intended to identify such forward-looking statements.
These statements are not guarantees of future performance and are subject to
certain risks, uncertainties and other factors, some of which are beyond our
control, that are difficult to predict and could cause actual results to differ
materially from those expressed or forecasted in such forward-looking
statements. Such risks and uncertainties include those described in "Risk
Factors" and elsewhere in this Prospectus. Readers are cautioned not to place
undue reliance on these forward-looking statements, which reflect our
management's view only as of the date of this Prospectus. We undertake no
obligation to update such statements or publicly release the result of any
revisions to these forward-looking statements that we may make to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

<PAGE>

Because this is only a summary, it does not contain all the information
that may be important to you. You should read the entire Prospectus, especially
"Risk Factors" and the Consolidated Financial Statements and Notes, before
deciding to invest in EcoScience Common Stock. Unless this Prospectus indicates
otherwise (i) all historical financial information contained in the Prospectus
has been restated to account for our acquisition of Agro Power Development, Inc.
pursuant to a merger transaction that was completed on September 30, 1998 and
accounted for as a pooling of interests, (ii) all historical share information
contained in this Prospectus has been adjusted to reflect a one-for-five reverse
split of our Common Stock which occurred on September 30, 1998, (iii) references
to the period ended January 3, 1999 mean the period beginning on July 1, 1998
and ending on January 3, 1999 and (iv) dollar amounts contained in this
Prospectus are presented in thousands (except per share data).

PROSPECTUS SUMMARY

The Company

We are primarily engaged in the production, marketing and sale of branded
premium grade tomatoes grown in intensive greenhouse facilities. In addition, we
market, sell, develop and commercialize products for the agricultural and
biological insect and disease control industries. Our products include:

o Premium greenhouse grown tomatoes which we produce at large scale
greenhouse facilities that we develop and operate, as well as fresh
tomatoes produced by other greenhouse growers;

o sophisticated growing systems that we sell to participants in the
intensive farming, horticultural and nursery industries;

o coatings and disease control products used to protect fruits and
vegetables in storage and transit; and

o termite control products which we sell to marketers for resale to
household and industrial consumers.

We currently generate a majority of our revenues from the sale of
greenhouse grown vegetables. We entered into this business in September 1998
through a merger transaction with Agro Power Development, Inc. As a result of
the merger transaction, Agro Power Development, Inc. is now our wholly owned
subsidiary. In terms of total acreage controlled by one company, Agro Power
Development, Inc. is the largest producer of greenhouse grown tomatoes in the
United States.

Through Agro Power Development, Inc., we operate seven greenhouses in
Texas, Virginia, Pennsylvania and New York. Until recently, Cogentrix Delaware
Holdings, Inc. was a 50% partner in four of the greenhouses that we operate. In
December 1998, we acquired Cogentrix's interest in these four greenhouses for a
purchase price that consisted of a $20,600 secured note and 1,000,000 shares of
our Common Stock. On March 12, 1999, Cogentrix agreed to extend the maturity
date of the note from March 15, 1999 to June 30, 1999. In connection with the
extension, we issued Cogentrix an additional note in the principal amount of
$1,000 that also becomes due on June 30, 1999. Cogentrix is offering the
1,000,000 shares of Common Stock issued to it for sale by this Prospectus. We
are currently attempting to raise the money necessary to pay Cogentrix the
$21,600 plus accrued interest that becomes due under the notes on June 30, 1999
through a private offering of equity and/or debt securities. If we cannot raise
the funds needed to pay Cogentrix under the notes, Cogentrix could choose to
exercise its rights against us, including taking control of or selling the stock
of Agro Power Development, Inc.

Our executive officers are located at 10 Alvin Court, East Brunswick, New
Jersey. Our phone number is (732) 432-8200.

- --------------------------------------------------------------------------------

<PAGE>

- --------------------------------------------------------------------------------

The Offering

Common Stock offered by
the Selling Stockholders....... 1,633,273 shares.

Use of Proceeds.................. We will not receive any proceeds from the
sales of the Common Stock by the selling
stockholders.

Nasdaq Small Cap Market Symbol... ECSCE.

Risk Factors..................... The Common Stock offered hereby involves a
high degree of risk. These risks are
described in the section of this Prospectus
captioned "Risk Factors."

Summary Consolidated Historical and Pro Forma Financial Information
(Amounts in thousands, except per share data)

<TABLE>
<CAPTION>
Historical (1) Pro Forma (2)
-------------------------------------------------------- -------------------------
Transition Transition
Year Ended Year Ended Six Months Ended Period Ended Year Ended Period Ended
June 30, June 30, December 31, January 3, June 30, January 3,
1997 1998 1997 1999 1998 1999
---------- ---------- ---------------- ------------ ---------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net revenue .............................. $ 39,862 $ 46,177 $ 17,835 $ 26,194 $ 46,177 $ 26,194
Gross profit ............................. 7,583 4,330 3,160 957 3,863 724
Operating (loss) income .................. 573 (6,471) (1,029) (7,589) (7,541) (8,123)
Interest and other expense, net .......... (1,911) (3,404) (941) (3,086) (5,905) (4,336)
Loss before income taxes
and minority interest .................. (1,338) (9,875) (1,970) (10,675) (13,446) (12,459)
Net (loss) income ........................ 520 (4,237) (680) (8,487) (13,467) (12,526)
Earnings (loss) per share:
Basic .................................. .05 (0.36) (0.06) (0.73) (1.07) (0.99)
Diluted ................................ .05 (0.36) (0.06) (0.73) (1.07) (0.99)
</TABLE>

<TABLE>
<CAPTION>
Historical(1)
As of January 3,
----------------
1999
----------------
<S> <C>
Selected Balance Sheet Data:
Cash equivalents, and short-term investments......................... $ 1,222
Property, plant and equipment, net................................... 65,200
Intangible assets including goodwill, net............................ 13,550
Total assets......................................................... 101,864
Debt and capital leases.............................................. 85,797
Stockholders' equity (deficit)....................................... (5,094)
</TABLE>

- --------------------------------------------------------------------------------

<PAGE>

- --------------------------------------------------------------------------------

(1) The summary historical consolidated financial information reflects the
acquisition of Agro Power Development, Inc. pursuant to a merger
transaction which was completed on September 30, 1998 and accounted for as
a pooling of interests. The information is presented as if such transaction
had occurred at the beginning of the earliest period presented above. In
addition, the summary historical consolidated financial information has
been restated to give effect to the one-for-five reverse split of Common
Stock which occurred on September 30, 1998.

(2) The unaudited pro forma consolidated summary financial information gives
effect to (i) the issuance of 1,000,000 shares of our Common Stock and a
$20,600 promissory note bearing interest at 11.25% per annum which is due
and payable on June 30, 1999 and (ii) a $1,000 promissory note which
becomes due on the same date and has terms similar to the $20,600 note. We
issued the Common Stock and the $20,600 note to Cogentrix in exchange for
all of the outstanding stock of certain corporations that are partners with
certain of our subsidiaries in limited partnerships that conduct four of
our greenhouse operations. We issued the $1,000 note in connection with
Cogentrix's agreement to extend the due date of the $20,600 note from March
15, 1999 to June 30, 1999. This transaction has been accounted for using
the purchase method of accounting and reflects the consolidation of 100% of
the results of operations of the four limited partnerships as if the
transaction with Cogentrix had occurred on July 1, 1997 for the summary pro
forma consolidated statement of operations data. In addition, the summary
pro forma consolidated financial information gives effect to the allocation
of the purchase price to the acquired investment in the net assets of the
four limited partnerships based upon their estimated fair values. The
summary pro forma consolidated financial information does not purport to be
indicative of the results of operations or financial position that would
have been reported had these transactions occurred on the dates indicated
above, nor which will be reported in the future. The summary pro forma
consolidated financial information should be read in conjunction with the
"Pro Forma Condensed Consolidated Financial Information" and the Company's
"Consolidated Financial Statements" included elsewhere in this Prospectus.

- --------------------------------------------------------------------------------

<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered by the Prospectus is
very risky. You should carefully consider the following risk factors before
purchasing the Common Stock.

We Have a History of Losses

We have incurred net losses in recent periods, including net losses of
$8,487 in the transition period ended January 3, 1999 and $4,237 in the fiscal
year ended June 30, 1998. At the end of fiscal 1995, we began to implement a
restructuring program which was designed to shift the corporate focus from
research and development to commercial operations. The purpose of the
restructuring program was to reduce operating losses and conserve cash
resources. We cannot, however, assure investors that we will become profitable
in the future.

The Recent Merger with APD Presents Integration Issues

We are continuing to integrate the operations of Agro Power Development,
Inc. into our operations, including financial reporting, information systems and
administrative functions. The integration of these functions requires
expenditures of funds and management time.

We Will Require Additional Financing

Our future capital requirements will depend on many factors, including cash
flow from operations, competing technological and market developments and our
ability to market our products successfully. We plan to finance our cash needs
with existing cash reserves, revenues from product sales, bank loans and private
offerings of debt and equity securities. We need to raise additional capital in
order to support our operations during the fiscal year ending January 2, 2000.
Additional financing may not be available to us on acceptable terms, if at all.

We Have Substantial Debt and are in Default Under Certain Loan Agreements

We have a substantial amount of indebtedness. As of January 3, 1999, we had
borrowings of $85,797 outstanding. We had total cash and cash equivalents, and
short-term investments of $1,222 as of January 3, 1999. The high level of
indebtedness could have important consequences to holders of the Common Stock
including, but not limited to, the following: (i) our ability to obtain
additional financing in the future for working capital, capital expenditures,
acquisitions or general corporate or other purposes may be limited; (ii) a
substantial portion of our cash flow from operations will be dedicated to the
payment of the principal of , and interest on, our indebtedness; (iii) the
agreements governing our long-term indebtedness contain certain restrictive
financial and operating covenants that could limit our ability to compete and
expand; and (iv) our substantial leverage may make us more vulnerable to
economic downturns, limit our ability to withstand competitive pressures and
reduce our flexibility in responding to changing business and economic
conditions.

We are experiencing a significant liquidity problem as a result of the
startup and crop cycle of our four new greenhouse operations. As a result, we
have delayed payments to significant vendors and suppliers of goods that are
vital to our business activities. In addition, due to cash flow constraints, we
were unable to make, on a timely basis, certain principal and

<PAGE>

interest payments due under a $60,000 credit facility which is secured by
substantially all of the assets of Agro Power Development, Inc. Although we
subsequently made these payments, we are also in default of certain financial
covenants contained in our loan agreements. As a result of these defaults, our
lenders have the right to accelerate our obligation to repay an aggregate of
approximately $62,500 of indebtedness and approximately $2,253 owed under a
revolving credit agreement is past due. Furthermore, the $21,600 owed to
Cogentrix becomes due on June 30, 1999 and we will need to raise funds prior to
that date in order to make the payment to Cogentrix. We can give no assurance
that we will be able to raise the funds necessary to repay the Cogentrix notes
or that our lenders will not demand payment of the amounts owed to them and
attempt to enforce their legal remedies. These uncertainties raise substantial
doubts about our ability to continue as a going concern.

The Markets In Which We Operate are Highly Competitive

We face competition from both domestic and foreign producers in the sale of
greenhouse tomatoes to retail supermarkets and distributors. A few large
companies and several smaller companies compete with the Company in the sale of
growing systems to greenhouses and nurseries in North America. Competition in
the fruit and vegetable coatings market is similarly intense. Fruit and
vegetable coating products are developed and marketed primarily by several large
corporations which are better established in the industry, have substantial
technical and financial resources and offer a full range of products, including
products which compete directly with our Bio-Save PostHarvest BioProtectant
products. In addition, several corporations which are smaller in size than us
offer a limited range of fruit and vegetable coating products which compete with
our products.

Competition in the pesticide industry also is intense. We compete with
large manufacturers of synthetic chemical pesticides and other biopesticide
companies. The pesticide industry is dominated by large chemical companies
located in the United States, Japan and Europe. These companies have substantial
financial and technical resources, extensive sales and distribution
capabilities, varied product registration experience and the ability to
manufacture products efficiently. We believe that the commercial success of our
biological pest control products will depend upon the development of cost
effective products which compete with synthetic chemical pesticides on the basis
of effectiveness, safety and ecological benefit. In addition, product line
profitability will depend upon cost effective production and strong sales and
distribution networks for our products.

<PAGE>

Our Share Price May Be Volatile

The market price of our Common Stock (as reported by the Nasdaq Stock
Market and adjusted to reflect the one-for-five reverse stock split which became
effective on September 30, 1998) has during the past two years ranged from a low
of $1-5/8 per share to a high of $9-11/16 per share. Factors such as
announcements of technological innovations or new products by us or our
competitors, government regulatory action, public concern as to the safety of
products developed by us or our competitors, patent or proprietary rights
developments and market conditions in general could have a significant impact on
the future market price of the Common Stock.

Our Business is Subject to Extensive Government Regulation

The manufacture, processing, packaging, storage, distribution and labeling
of food products are subject to extensive federal, state and foreign laws and
regulations. In the United States, our business is subject to regulation by the
Food and Drug Administration, the United States Department of Agriculture and
various state and local agricultural and public health authorities. The FDA and
USDA regulators charged with enforcing these laws and regulations have broad
powers to protect public health, including the power to inspect produce and our
facilities, to order the shut down of a facility or the suspension of delivery
of our produce, as well as the power to impose substantial fines. We are also
subject to various federal and state regulations relating to workplace safety
and worker health, including the Fair Labor Standards Act, Occupational Safety
and Health Act and laws and regulations governing such matters as minimum wages,
overtime and working conditions. We are subject to various federal, state and
local environmental regulations.

Certain of our products and products under development are classified as
pesticides and must meet rigorous testing and registration requirements of the
U.S. Environmental Protection Agency, state regulatory authorities and other
domestic regulatory agencies. The pesticide registration process in many
developed countries is as complex and detailed as it is in the United States.
Most developed countries conduct their own evaluation of data, may require
registration of pesticides before sales are allowed, and may require data
different from or in addition to that required in the United States. The fact
that a particular pesticide product is already registered in the United States
may not result in more rapid approval for that product in another country.
Compliance with regulatory procedures is expensive and can be lengthy. We
estimate that the period between submission of applications for EPA registration
and approval is two years, although that period can extend for a longer time and
there can be no assurance that such registrations or approvals will be obtained.
Failure to obtain such approvals could adversely impact our business.

We may become subject to additional laws or regulations administered by the
FDA, the USDA or other federal, state, foreign or local regulatory authorities,
the repeal of laws or regulations or more stringent interpretations of current
laws or regulations. We cannot predict the nature of any new laws, regulations
or interpretations, or what effect they might have on its business. Changes in
these laws could require the reconfiguration of our production, processing and
transportation methods or increased compliance costs, and could require us to
make significant capital expenditures or incur higher operating costs. Any
failure by us to comply with

<PAGE>

applicable laws and regulations could subject us to civil penalties, including
fines, injunctions, greenhouse or pack house closings, recalls or seizures, as
well as potential criminal sanctions, any of which could have a material adverse
effect on us.

Our Patent Position is Uncertain and Our Success Depends on Our Proprietary
Rights

We own or have rights to certain proprietary information, including patents
and patent applications, which relate to our technology and products. We believe
that patents and trade secret protection for certain of our biological and
agricultural products is important to the ultimate success of certain aspects of
our business. We cannot assure that our pending patent applications, or any
defense of any challenged patents, will be successful. Furthermore, we cannot
assure that we will be able to maintain the secrecy of any of our proprietary
technology or trade secrets or that other companies will not develop
independently substantially equivalent or better information and technologies.
In addition, issued patents may not provide adequate protection for the
technology to which they relate and patents may be infringed upon by others.
Defense and prosecution of patent infringement claims can be expensive and time
consuming, even if the outcome is favorable to us.

We Face Manufacturing Risks

We attempt to maintain flexibility in deciding whether to manufacture
products internally or contract with third party manufacturers. The primary
factors that we consider in making this determination include the availability
and cost of third party sources, the anticipated manufacturing volume and our
ability to manufacture profitably. We manufacture our fruit and vegetable
coatings internally at our Orlando, Florida facility. We have entered into
manufacturing agreements with third party manufacturers for the manufacture of
our BioSave postharvest disease control products and the active ingredient in
our BioBlast termiticide product. There can be no assurance that any
manufacturing done by us can be achieved on a cost-effective basis. Furthermore,
delays in locating third party manufacturing sources, or inadequate performance
by any third party manufacturer could have a material adverse impact on certain
aspects of our business.

We Depend on Key Personnel

Our future success is dependent, in part, on the efforts of our senior
management. The loss of the services of one or more of these individuals may
have a material adverse effect upon us. We do not have employment agreements or
non-competition agreements with any of our executive officers for a specific
term. The recruitment and retention of skilled management personnel is important
to our success and competition for such personnel is intense. There can be no
assurance that we will be able to continue to attract and retain such personnel.

Because of the nature of our greenhouse tomato business, we will be
dependent upon our ability to attract and retain qualified personnel to operate
our various greenhouse operations, including growers/managers. There is
significant competition for such qualified personnel, and there is no assurance
that we will be successful in recruiting and retaining such personnel. An
inability to attract and retain qualified personnel, and in the event of labor
unrest, an inability to find qualified replacement personnel rapidly, could
adversely affect the production of our existing greenhouses and our plans to
expand our greenhouse operations.

<PAGE>

We Face Potential Delisting by the Nasdaq Stock Market

The Nasdaq Stock Market has notified us that we do not currently meet its
continued listing standards and that due to the merger transaction with APD, we
are required to meet the requirements for a new listing. As a result, the Nasdaq
Stock Market has advised us that it intends to delist our Common Stock. We have
requested a hearing with Nasdaq representatives to appeal the delisting
decision. Although delisting has been stayed pending the appeal, we can give no
assurance that our appeal will be successful.

We Face Uncertainty with Year 2000 Compliance

We have initiated an in-house assessment of our Year 2000 issues as they
relate to our information technology and non-information technology systems. We
have completed an assessment of all of our computer hardware. We have determined
that approximately 95% of our hardware is currently free of Year 2000 problems.
Our assessment of software applications relating to communities with our
business partners is 50% complete. We have sent a questionnaire to all of our
critical vendors and customers to determine their Year 2000 compliance. We have
received questionnaires from approximately 15% of these vendors and customers.
Our primary risks relating to Year 2000 compliance are our dependence on
computer hardware and software, our highly computerized greenhouse facilities
and our dependence upon various transportation vendors to move our products to
market. The potential risks to us related to computerized greenhouse operations
are extensive. Our greenhouse facilities use computers to control water,
sunlight, carbon dioxide and temperature. We are currently working with the
vendors of these systems to assess and correct any Year 2000 problems. We expect
that all Year 2000 issues will be addressed by the end of the second quarter of
1999; however, we cannot assure that the Year 2000 issue will not have a
material adverse impact on us. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Year 2000."

We May Face Product Liability Claims

Our business exposes us to potential product liability risks associated
with the testing, manufacturing, sale and distribution of our technology and
products. We maintain product liability insurance, but we cannot assure that we
will be able to maintain such insurance on acceptable terms, that the insurance
will provide adequate coverage, or that we will otherwise be able to avoid
significant liability exposure.

<PAGE>

Our Charter Contains Anti-Takeover Provisions

Our charter provides for staggered terms for the members of the Board of
Directors and certain provisions of the by-laws may be amended only with an 80%
stockholder vote. These charter and by-law provisions may discourage
transactions involving an actual or potential change in control which might be
beneficial to us or our stockholders.

We May Issue Preferred Stock

We may issue shares of our Preferred Stock in the future without
stockholder approval and upon such terms as the Board of Directors may
determine. The rights of holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any Preferred Stock that may
be issued in the future. The issuance of Preferred Stock by us, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of discouraging a person from
acquiring a majority of our outstanding Common Stock. We have no present plans
to issue any shares of Preferred Stock.

We Do Not Intend to Pay Dividends

We have never paid any cash dividends on our Common Stock (although our
financial statements reflect the payment of dividends by Agro Power Development
to its shareholders in periods prior to the merger transaction which took place
on September 30, 1998). Our Board of Directors anticipates that for the
foreseeable future our earnings, if any, will be retained for use in our
business and that no cash dividends will be paid on the Common Stock.

Our Operating Results May Fluctuate Significantly

The timing of our operating revenues may vary as a result of the seasonal
nature of our business. In particular, price fluctuations and tomato market
supply have a direct effect on our financial results. Tomato prices, as well as
prices for produce in general, are influenced by changes in supply and demand as
well as general economic conditions and tend to fluctuate significantly
throughout the year. Typically, in the winter months, the reduced supply of
tomatoes, due primarily to the lack of field grown tomatoes, results in higher
market prices. Through the spring and summer months, the supply of field grown
tomatoes increases, resulting in lower market prices. In addition, the nature of
the cycle from crop planting to harvesting creates a period where no revenues
are generated by a particular greenhouse. As a result of these factors, we
expect that our profitability will continue to be subject to significant
seasonal variations, and the results for any particular quarter are not
necessarily indicative of results for subsequent quarters or the full year.

We May be Affected by Crop Disease and Pestilence; We Sell Perishable Goods

Crop disease and pestilence can be unpredictable and can have a devastating
effect on crops, and can result in the loss of all or a major portion of the
crop expected at a particular greenhouse or group of greenhouses for that
harvest season. Even when only a portion of the crop is damaged, the profits we
could have made on the crop will be severely diminished because the full costs
to plant and cultivate the entire crop will have been incurred although only

<PAGE>

a portion of it can be sold. While some crop diseases and pestilence are
preventable or treatable, the costs of prevention or treatment may be high which
can result in reduced profitability.

Our greenhouse vegetables are subject to all the risks of any perishable
food, including spoilage. Delays in shipments could result in the loss of the
shipment due to spoilage.

Weather and Other Events Could Affect our Production

Although we grow our produce in protected, climate controlled environments,
the size and level of production of each of our greenhouses can be affected by
low sun light levels. In addition, other weather related events, such as hail,
severe storms, tornadoes and earthquakes could damage greenhouse structures and
adversely affect our production.

In June 1998, a tornado damaged approximately 10% of our greenhouse located
in Mt. Carmel, Pennsylvania, resulting in significant structural damages.
Although damage to the structure was covered by insurance, we were not insured
for the related crop damage. We have terminated operations at the Mt. Carmel
greenhouse and are currently in negotiations to sell the facility.

We are Sensitive to Price Increases in Raw Materials

Increases in the cost of raw materials essential to our operations,
particularly tomato plant seedlings, bees, rockwool, carbon dioxide, fertilizer,
insecticides and packaging materials, would increase our costs of production,
which we may be unable to recoup through higher sales prices. A scarcity of
these raw materials could require us to curtail production, which also would
have a material adverse effect on our results of operations. We generally do not
enter into agreements for the supply of any raw materials for longer than one
year.

We Lease Some of Our Greenhouse Facilities

We lease three of our greenhouse facilities which collectively represent
34% of our greenhouse acreage. These leases expire in 2003, 2007 and 2008,
respectively. We cannot assure that these leases can be renewed at rents or upon
other terms that are as favorable as the existing terms. If we were not able to
renew the leases, or if we were to renew the leases on less favorable terms, we
could be adversely impacted.

We Depend on Certain Corporate Relationships

We enjoy relationships with other companies which have contributed, and in
some cases continue to contribute, to our success. Our future success will
depend, in part, on developing new relationships and continuing the existing
relationships with these companies. None of our customers is required under
contract or other arrangements to continue to purchase products from us. During
the transition period ended January 3, 1999, approximately 68% of our net
revenues was derived from tomato sales to our ten largest customers. If any of
such customers elected to terminate its relationship with us, such termination
could have a material adverse effect on us.

<PAGE>

We have entered into a distribution agreement with Grodania A/S, a Danish
company, pursuant to which we have obtained exclusive rights to distribute in
the United States, Canada, Mexico and the Caribbean, the Grodan(R) brand of
Stonewool, an inert growing medium, manufactured by Grodania. The term of the
agreement expires on December 31, 2000, at which time the agreement will
automatically extended for successive one year terms, unless either party shall
terminate the agreement in accordance with the termination provisions thereof.
Termination of this agreement could have a material adverse effect on our
business, financial condition and results of operations.

Our Growth Strategy Presents Risks

We have experienced substantial growth in our production capabilities over
the past two years, which has placed greater demands on our operating,
administrative and financial resources. Our future growth will depend on a
number of factors, including the timely construction of additional greenhouses,
our ability to control production costs and market our products effectively, our
ability to maintain the quality of our produce and the recruitment and retention
of qualified personnel. Sustaining profitable growth will also require the
implementation of fully integrated enterprise systems and will require
additional management, operating and financial personnel. We cannot assure that
we will be able to manage our expanding operations effectively or that we will
be able to implement our growth plan, and any failure to do so is likely to have
a materially adverse effect on our business, results of operations and financial
condition.

Our Directors and Executive Officers Own a Significant Percentage of Our Capital
Stock

Our directors and executive officers own, in the aggregate, approximately
73% of our outstanding Common Stock. These stockholders, if acting together,
will be able to control the vote of substantially all matters requiring approval
by our stockholders. Such matters include the election of directors and the
approval of mergers or other business combination transactions. We may be
adversely impacted by the control that such stockholders will have with respect
to matters affecting us.

Substantial Sales of Shares May Impact the Market Price of Our Common Stock

If our stockholders sell substantial amounts of our Common Stock, including
shares issued upon the exercise of outstanding options and warrants, the market
prices of our Common Stock may fall. Such sales also might make it more
difficult for us to sell equity or equity-related securities in the future at a
time and price that we deem appropriate.

Certain holders of our Common Stock are entitled to certain demand and
piggyback registration rights with respect to registration of their shares under
the Securities Act. If such holders, exercising their registration rights, cause
a large number of securities to be registered and sold in the public market,
such sales may have an adverse effect on the market price of our stock. If we
were to initiate a registration and include shares held by these holders
pursuant to the exercise of their piggyback registration rights, such sales may
have an adverse effect on our ability to raise capital.

<PAGE>

Market for Common Stock; Dividend Policy

Our Common Stock trades on The Nasdaq Stock Market under the symbol
"ECSCE". As of May 1, 1999, there were approximately 269 holders of record of
the Company's Common Stock. We effectuated a one-for-five reverse stock split
effective at the close of business on September 30, 1998. On May 3, 1999, the
reported closing price of the Common Stock was $1-5/8 per share.

The table below sets forth, for the fiscal quarters indicated, the reported
high and low closing sales prices (reflecting the reverse split at September 30,
1998) of our Common Stock as reported by the Nasdaq Stock Market based on
published financial sources.

High Low
---- ---
1999
----
Fiscal Quarter ending June 30, 1999 (through May 3, 1999) $ 2-5/8 $1-5/8
Fiscal Quarter ending March 31, 1999 4-5/8 2-5/8

1997
----
Fiscal Quarter ended January 3, 1999 9-1/16 5
Fiscal Quarter ended September 30, 1998 9-11/16 6-3/32
Fiscal Quarter ended June 30, 1998 9-1/16 5
Fiscal Quarter ended March 31, 1998 9-11/16 6-3/32

1997
----
Fiscal Quarter ended December 31, 1997 10 5
Fiscal Quarter ended September 30, 1997 7-3/16 5-5/16
Fiscal Quarter ended June 30, 1997 8-3/4 4-7/32
Fiscal Quarter ended March 31, 1997 12-1/2 5

We have not paid any dividends on our Common Stock and we do not anticipate
doing so in the foreseeable future. Certain provisions of our loan agreements
prohibit the payment of dividends.

SELECTED FINANCIAL DATA

The selected financial data presented below has been derived from (i) the
Company's audited consolidated financial statements for the transition period
ended January 3, 1999 and for each year in the five year period ended June 30,
1998 and (ii) the Company's unaudited consolidated financial statements for the
six months ended December 31, 1997. The information below should be read in
conjunction with Management's Discussion and Analysis of Financial Condition and
Results of Operations and the Consolidated Financial Statements and related
notes which appear elsewhere in this Prospectus.

<PAGE>

<TABLE>
<CAPTION>
Consolidated Statements of Operations Data Transition Six Months
(in thousands, except per share amounts) Period Ended Ended Years Ended June 30,
January 3, December 31, --------------------------------------------------------
1999 1997 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenues ................................... $ 26,194 $ 17,835 $ 46,177 $ 39,862 $ 24,668 $ 20,251 $ 15,535
Cost of revenues ............................... 25,237 14,675 41,847 32,279 18,603 16,617 12,639
-------- -------- -------- -------- -------- -------- --------
Gross profit ................................... 957 3,160 4,330 7,583 6,065 3,634 2,896
-------- -------- -------- -------- -------- -------- --------
Operating expenses:
Selling, general and administrative ......... 8,307 3,987 10,336 6,879 6,394 7,317 7,302
Research and development .................... 239 202 465 508 1,018 4,483 8,156
Asset valuation and restructuring
(reversal) charges ....................... -- -- -- (377) (1,550) 6,000 5,800
-------- -------- -------- -------- -------- -------- --------
Total operating expenses .................... 8,546 4,189 10,801 7,010 5,862 17,800 21,258
-------- -------- -------- -------- -------- -------- --------
Operating (loss) income ........................ (7,589) (1,029) (6,471) 573 203 (14,166) (18,362)
-------- -------- -------- -------- -------- -------- --------
Other (expense) income:
Interest, net ............................... (2,928) (841) (3,289) (1,923) (611) (682) 599
Other, net .................................. (158) (100) (115) 12 136 158 796
-------- -------- -------- -------- -------- -------- --------
Total other (expense) income ........... (3,086) (941) (3,404) (1,911) (475) (524) 1,395
-------- -------- -------- -------- -------- -------- --------

Loss before taxes, minority
interest and extraordinary item
Minority interest ........................... (10,675) (1,970) (9,875) (1,338) (272) (14,690) (16,967)
Provision for income taxes ..................... 67 21 21 78 116 91 48
-------- -------- -------- -------- -------- -------- --------
Loss before minority interest and
extraordinary item .......................... (10,742) (1,991) (9,896) (1,416) (388) (14,781) (17,015)
Minority interest .............................. 2,255 1,311 5,659 1,936 274 -- --
-------- -------- -------- -------- -------- -------- --------
(Loss) income before extraordinary item ........ (8,487) (680) (4,237) 520 (114) (14,781) (17,015)
Extraordinary item ............................. -- -- -- -- 241 -- --
-------- -------- -------- -------- -------- -------- --------
Net (loss) income .............................. ($ 8,487) ($ 680) ($ 4,237) $ 520 $ 127 ($14,781) ($17,015)
======== ======== ======== ======== ======== ======== ========

(Loss) earnings per share:

Basic

Income (loss) before extraordinary item ........ ($ 0.73) ($ 0.06) ($ 0.36) $ 0.05 ($ 0.01) ($ 1.31) ($ 1.54)
Extraordinary item ............................. -- -- -- -- 0.02 -- --
-------- -------- -------- -------- -------- -------- --------
Net (loss) income .............................. ($ 0.73) ($ 0.06) ($ 0.36) $ 0.05 $ 0.01 ($ 1.31) ($ 1.54)
======== ======== ======== ======== ======== ======== ========
Weighted average basic shares
outstanding ................................. 11,641 11,605 11,619 11,548 11,334 11,288 11,070
======== ======== ======== ======== ======== ======== ========

Diluted

Income (loss) before extraordinary item ..... ($ 0.73) ($ 0.06) ($ 0.36) $ 0.05 ($ 0.01) ($ 1.31) ($ 1.54)
Extraordinary item .......................... -- -- -- -- 0.02 -- --
-------- -------- -------- -------- -------- -------- --------
Net (loss) income ........................... ($ 0.73) ($ 0.06) ($ 0.36) $ 0.05 $ 0.01 ($ 1.31) ($ 1.54)
======== ======== ======== ======== ======== ======== ========
Weighted average diluted shares
outstanding ............................. 11,641 11,605 11,619 11,583 11,381 11,288 11,070
======== ======== ======== ======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
Consolidated Balance Sheet (in thousands) January 3, June 30,
---------- -------------------------------------------------------
1999 1998 1997 1996 1995 1994
---------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Unrestricted and restricted cash, cash equivalents,
short-term investments and marketable
securities ............................................ $1,222 $4,222 $6,787 $6,151 $8,036 $20,542
Total assets ............................................. 101,864 79,508 70,592 36,249 20,465 35,251
Debt and capital leases .................................. 85,797 55,274 43,483 19,460 8,580 8,287
Stockholder's equity (deficit) ........................... ($5,094) ($118) $4,046 $3,010 $2,625 $17,974
</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

EcoScience Corporation ("EcoScience" or the "Company") and its wholly owned
subsidiaries are primarily engaged in the production, marketing and sale of
branded premium grade tomatoes. In addition, the Company markets, sells,
develops and commercializes products for the agricultural and biological insect
and disease control industries. As used herein, the term "Company" refers to
EcoScience and its subsidiaries, unless the context indicates otherwise.

References contained herein to "the period ended January 3, 1999" mean the
period commencing July 1, 1998 and ending January 3, 1999.

The Company's two reportable segments are comprised of (i) greenhouse
tomatoes and (ii) biological and agricultural products.

The Company experienced significant and unprecedented growth during the
first six months of calendar year 1998, particularly in the greenhouse tomato
segment represented by Agro Power Development, Inc. ("APD"). See "Merger with
Agro Power Development, Inc." below. During this period, APD completed
construction and started up approximately 101 additional acres of greenhouse
production in beefsteak (42 acres) and cluster on-the-vine (59 acres) tomatoes.
This increase in acreage represented an approximate 135% increase in production
capacity over the 75 acres of production capacity for calendar year 1997. In
addition, APD began construction on an additional 41 acre greenhouse to grow and
sell colored bell peppers (the "Presidio Phase I Project"). The first 26 acres
of this greenhouse went into operation in October 1998, thereby increasing
production capacity by approximately 169% for calendar 1998 as compared to
calendar 1997. To accommodate this growth, the Company also expanded its sales
and marketing organization and its financial and greenhouse management
operations. Increases in sales and revenues and the achievement of economies of
scale generally lag increases in production capacity, but expenses for startup,
infrastructure and personnel occur in advance of revenues. The operating results
for the period ended January 3, 1999 reflect a significant portion of these
expenses in advance of anticipated revenues from the three new greenhouse
projects.

As described below under "Results of Operations," operating results for the
period ended January 3, 1999 were adversely affected by abbreviated growing
cycles and delays in crop planting at certain of the Company's greenhouse
facilities. In addition, in April 1999, management determined that in view of
unfavorable pricing trends in the pepper market, it would convert the Presidio
Phase I Project from peppers to tomatoes, thereby shortening the harvest period
for the then current pepper crop by approximately three months. As a result,
certain significant expenditures made by the Company to plant the pepper crop
will not be recoverable and were charged to earnings in the three month period
ending January 3, 1999. The Company believes that, with the exception of the
Presidio facility, its greenhouse operations are now approaching their optimal
production schedules for the first time in its history, compared with results in
calendar 1998 when three of seven operations (101 of the 176 acres in operation)
were out of the harvest cycle necessary to achieve optimal production and
pricing due to start-up factors. The Company has begun to realize the benefits
of the increased production capacity

<PAGE>

added during 1998, through its increased production and sales, in the quarter
ended January 3, 1999 and expects this trend to continue during 1999.

During the period ended January 3, 1999, the Company incurred non-recurring
expenses of approximately $1,500 as a result of the merger transaction with APD.

Change of Fiscal Year

The Company has amended its by-laws to change its fiscal year from the
twelve month period ended June 30 to a 52-53 week fiscal year ending on the
Sunday nearest December 31 of each year. For the transition period, the fiscal
year end date will be January 3, 1999.

Merger with Agro Power Development, Inc.

On September 30, 1998, the Company issued 9,421,487 shares of Common Stock
to the holders of the common stock of Agro Power Development, Inc., a privately
held New York corporation ("APDNY") pursuant to the Merger Agreement, which
provided for the merger of APDNY with and into a newly formed, wholly owned
subsidiary of the Company which, at the effective time of the merger, changed
its name to Agro Power Development, Inc. The Merger was structured as a tax free
reorganization under Section 368(a) of the Internal Revenue Code. Pursuant to
the Merger Agreement, the stockholders of APDNY received 30,619.067 shares of
the Company's Common Stock for each outstanding share of common stock of APDNY.
In addition, on September 30, 1998, the Company issued 99,000 shares of Common
Stock to certain stockholders of APDNY for their entire 50% interest in Village
Farms of Morocco, S.A., a Moroccan company, as provided for in the Merger
Agreement. The shares of Common Stock issued to the stockholders of APDNY
pursuant to the Merger Agreement represented approximately 80% of the
outstanding shares of the Company, on a fully diluted basis, at the effective
time of the Merger. The Merger has been accounted for as a pooling of interests
and accordingly, the historical consolidated financial statements have been
restated to reflect the business combination as if it had occurred at the
beginning of the earliest period presented.

Acquisition

On December 30, 1998, the Company acquired from Cogentrix all of the
outstanding capital stock of each of Cogentrix Greenhouse Investments, Inc.;
Cogentrix of Fort Davis I, Inc.; Cogentrix of Pocono, Inc.; Cogentrix of Marfa,
Inc. and Cogentrix of Buffalo, Inc. (collectively the "Acquired Companies")
which were 50% partners with the Company in limited partnerships that operate
four of the Company's greenhouse operations. The purchase price of the Acquired
Companies consisted of 1,000,000 shares of EcoScience common stock and a $20,600
note bearing interest at a rate of 11.25% per annum, which was originally due
and payable on March 15, 1999. On March 12, 1999, Cogentrix agreed to extend the
maturity date of the note to June 30, 1999. In connection with the extension,
the Company issued Cogentrix an additional note in the principal amount of
$1,000 which has terms similar to the original note and becomes due on June 30,
1999. The notes are secured by all of the outstanding capital stock of APD and
the Acquired Companies. EcoScience is currently seeking additional debt and
equity financing to fulfill this obligation. If the Company is not successful in
refinancing the $21,600 aggregate principal amount of notes, it will seek an
extension of the due date or a restructuring of the notes. There can be no
assurances that EcoScience will be successful in these efforts.

17
<PAGE>

As a condition to the acquisition, EcoScience agreed to register the
1,000,000 shares of common stock for public sale. In the event the stock is not
registered by June 15, 1999, EcoScience may be required, at the election of
Cogentrix, to repurchase the 1,000,000 shares from Cogentrix at a price equal to
the greater of $4.00 or the market price on the day prior to the repurchase
demand, as provided.

Additional consideration given in the transaction is as follows: (i)
termination of an option agreement with Cogentrix, pursuant to which APD granted
to Cogentrix certain rights to participate in future projects involving the
development, acquisition, owning of or operating by APD of any greenhouse
facility at which fruit or vegetables are to be grown, as defined; (ii)
Cogentrix assigned and contributed its note receivable of $643 along with
accrued interest ($65), due from APD to Cogentrix Greenhouse Investment, Inc.
and (iii) one of the greenhouse limited partnerships cancelled its note
receivable due from Cogentrix in the amount of $1,838, along with accrued
interest ($191). Following the cancellation and the acquisition of the Acquired
Companies by EcoScience, Cogentrix Greenhouse Investment, Inc. issued a
promissory note payable to that greenhouse limited partnership in the same
amount.

Sale of Postharvest Equipment Division

On February 1, 1999, the Company's postharvest equipment division of its
wholly owned subsidiary Agro Dynamics, Inc., which was the exclusive distributor
in North America for Aweta B.V.'s sorting and grading equipment, was sold to
Autoline, Inc. Autoline Inc. and Aweta B.V. are both wholly owned subsidiaries
of FPS Food Processing Systems of Holland.

Sales of this division were $3,532 in the period ended January 3, 1999 and
$3,557, $4,967 and $2,830 in the fiscal years ended June 30, 1998, 1997 and
1996, respectively. The Company concluded that the long term outlook of the
postharvest equipment distribution business was no longer consistent with its
future strategic direction. This transaction will not result in a material gain
or loss and will not have a material impact on the Company's financial position
or results of operations.

Results of Operations

Transition Ended January 3, 1999 vs.
Six Months Ended December 31, 1997

The Company's net revenues increased by $8,359 or 47% to $26,194 for the
period ended January 3, 1999 from $17,835 for the same period in 1997. This
increase was primarily due to the increases in product sales in the greenhouse
tomato market of $6,797, and the biological and agricultural products market of
$1,562.

<PAGE>

The following table sets forth the Company's net revenues by market for the
period ended January 3, 1999 and the six months ended December 31, 1997:

January 3, December 31,
1999 1997 Increase
------- ------- --------
Tomatoes ................................. $15,453 $8,656 $6,797
Biological and Agricultural Products ..... 10,741 9,179 1,562
------- ------- ------
Consolidated ............................. $26,194 $17,835 $8,359
======= ======= ======

Net revenues increases for the greenhouse tomato market were primarily due
to increased capacity. The Company's Buffalo, New York, Virginia and Marfa,
Texas facilities (representing 101 acres) became operational in the first half
of 1998 and recorded product sales in the period ended January 3, 1999. The
Company's Presidio facility (representing 26 acres) became operational in the
six month period ended January 3, 1999.

Net revenues increases for the biological and agricultural products market
were primarily due to approximately $1,236 in Postharvest equipment sold in the
period ended January 3, 1999 that was delayed from the first half of 1998 due to
a fire damage sustained at the manufacturer's facility. The remaining increases
related to increased selling efforts.

Cost of revenues increased $10,562 or 72% to $25,237 for the period ended
January 3, 1999 from $14,675 for the same period in 1997, primarily due to net
revenues increases. For tomatoes, cost of revenues sold increased $9,067 or 116%
to $16,903 for the period ended January 3, 1999 from $7,836 for the same period
in 1997, primarily due to the significant growth in production (169%) during
1998 associated with the three new facilities in Virginia, Marfa, Texas and
Buffalo, New York, which combined for substantially all of the increase in cost
of revenues.

Gross profit on net revenues decreased $2,203 to $957 for the period ended
January 3, 1999 from a gross profit of $3,160 for the same period in 1997, while
gross profit percentage on net revenues decreased to 4% for the period ended
January 3, 1999 from 18% for the same period in 1997. Gross profit on net
revenues decreased $2,270 for the tomato greenhouse market to a gross loss of
$1,450 from a gross profit of $820 for the period ended January 3, 1999, while
gross profit percentage decreased to (9%) from 9% in the same period. The
decrease was primarily due to start-up costs and delays at the Company's
Buffalo, New York and Virginia greenhouse facilities and the poor results of its
pepper crop at the Presidio greenhouse facility.

The facilities in Buffalo, New York and Virginia recorded $2,285 in gross
losses because the timing of the construction completion and startup did not
coincide with the optimal cropping cycle (seed, plant, grow, harvest) of these
facilities during the first year of operations. The costs incurred at these
facilities were naturally spread across lower production and sales due to the
abbreviated growing cycle and, therefore, significantly lowered gross profits of
these facilities.

<PAGE>

abbreviated crop cycle or harvest period. In addition, the crop cycle of the
Company's 42 acre Virginia greenhouse was adversely impacted by the delay of the
lessor of the facility in obtaining the approval of its lenders required for the
conversion and expansion of the facility. As a result, the Company was not able
to begin planting in the Virginia greenhouse until late in the growing cycle
which delayed tomato production beyond the favorable spring pricing period. As a
result, this facility was unable to produce sufficient yield to cover costs. In
addition, the Company subsequently determined that light levels in Virginia were
sufficient to produce tomatoes in the winter and thus elected to cut short the
already abbreviated growing cycle at the Virginia greenhouse and begin a new
crop that would come into initial harvest in December 1998 when the higher
winter pricing is available in the marketplace. Also, the Buffalo, New York
greenhouse had construction delays and was late in installing infrastructure and
required systems, thereby delaying the start of the normal crop cycle and
further impacting operating performance. These delays increased operating costs
during the period ended January 3, 1999.

The Company's Presidio facility in Texas began pepper production in the
second half of 1998. Management decided, subsequent to January 3,1999, to end
the crop prematurely in April 1999 due to unfavorable market prices. This
resulted in a write down of inventory resulting in $1,784 of negative gross
margin. The Company is currently converting the facility for tomato production
and plans to begin harvesting these tomatoes in June 1999.

Selling, general and administrative expenses increased $4,320 or 108% to
$8,307 for the period ended January 3, 1999 from $3,987 for the same period in
1997, primarily due to non-recurring merger costs of $1,500, increased expenses
attributable to the Company's four new greenhouse facilities, the expansion of
the Company's sales, marketing, finance and greenhouse management operations,
and post-merger transaction costs, including severance compensation to former
officers and professional fees.

Research and development expenses increased $37 or 18% to $239 for the
period ended January 3, 1999 from $202 for the same period in 1997, due
primarily to increases in personnel and related costs.

Operating loss increased $6,560 to $7,589 for the period ended January 3,
1999 compared to a $1,029 operating loss for the same period in 1997. The
increase in operating loss resulted primarily from a $2,203 decrease in gross
profit for the period ended January 3, 1999 compared to the same period in 1997,
and a $4,357 increase in operating expenses.

Other expenses increased by $2,145 to $3,086 for the period ended January
3, 1999, compared to $941 for the same period in 1997, primarily due to
increased interest expenses attributable to indebtedness incurred in connection
with the development of the new greenhouse facilities. Interest expense, net,
increased by $2,087 reflecting the higher level of debt outstanding during the
period ended January 3, 1999 compared to the same period in 1997.

The Company's net loss increased $7,807 or $0.67 per diluted share to
$8,487 or $0.73 per diluted share for the period ended January 3, 1999 compared
to a net loss of $680 or $0.06 per diluted share for the same period in 1997.

<PAGE>

Year Ended June 30, 1998 vs.
Year Ended June 30, 1997

The Company's net revenues increased $6,315 or 16% to $46,177 in 1998 from
$39,862 in 1997 primarily due to increases in tomatoes product sales of $6,908,
partially offset by a decrease in biological and agricultural product sales of
$593. The following table sets forth the Company's net revenues by market for
1998 and 1997:

Years Ended
June 30, Increase
1998 1997 (Decrease)
------- ------- ----------
Tomatoes .................................. $28,871 $21,963 $6,908
Biological and Agricultural Products ...... 17,306 17,899 (593)
------- ------- ------
Consolidated .............................. $46,177 $39,862 $6,315
======= ======= ======

Net revenues increases for the greenhouse tomato market were primarily due
to increased capacity. The Company's Buffalo, Virginia and Marfa, Texas
facilities (representing 101 acres) became operational in the first half of 1998
and recorded net revenues in 1998.

Net revenues decreases for the biological and agricultural products market
were primarily due to the delayed shipment and installation of equipment orders
as a result of fire damage sustained at the manufacturer's facility. This
decrease was partially offset by increases in the sales of other product lines.
The result of the postponement of shipments caused by the fire had an adverse
effect on the Company's operating results for the fourth quarter of fiscal 1998.

Cost of revenues increased $9,568 or 30% to $41,847 in 1998 from $32,279 in
1997, primarily due to product sales increases. For tomatoes, cost of revenues
increased $9,705, or 50% to $29,015 in 1998 from $19,310 in 1997, primarily due
to the growth in production during 1998 associated with the three new facilities
in Buffalo, Virginia and Marfa, Texas.

Gross profit on net revenues decreased $3,253 or 43% to $4,330 in 1998 from
$7,583 in 1997, while gross margin percentage on product sales decreased to 9%
in 1998 from 19% in 1997. For tomatoes, gross profit decreased $2,797 to a gross
loss of $144 in 1998 from a gross profit of $2,653 in 1997, while gross margin
percentage decreased to 0% in 1998 from 12% in 1997 due to the abbreviated crop
cycles, resulting in production costs being spread over lower sales, in the
Buffalo and Virginia facilities and growing system problems at the Company's
Fort Davis, Texas facility which have subsequently been corrected. For
biological and agricultural products, gross profit decreased $456 or to $4,474
in 1998 from $4,930 in 1997, while gross margin percentage decreased to 26% in
1998 from 28% in 1997, due to decreased sales and a shift in product mix towards
certain typically lower margin product lines.

The facilities in Buffalo, New York and Virginia recorded $1,567 in
combined gross losses because the timing of the construction completion and
startup did not coincide with the optimal cropping cycle (seed, plant, grow,
harvest) of these facilities during the first year of operations. The costs
incurred at these facilities were naturally spread across lower production

<PAGE>

and sales due to the abbreviated growing cycle and, therefore, significantly
lowered gross profits of these facilities.

The timing of the 101 additional acres that started up between January and
April of 1998 came at a time when market prices were on a seasonal decline going
into the summer season and the crop cycle was coming to an end (to ready
greenhouses for the next and normal starting cycle), thereby preventing the
Company from recovering the up front crop expenditures in an abbreviated crop
cycle or harvest period. In addition, the crop cycle of the Company's 42 acre
Virginia greenhouse was adversely impacted by the delay of lessor of the
facility in obtaining the approval of its lenders required for the conversion
and expansion of the facility. As a result, the Company was not able to begin
planting in the Virginia greenhouse until late in the growing cycle which
delayed tomato production beyond the favorable spring pricing period. As a
result, this facility was unable to produce sufficient yield to cover costs. In
addition, the Company subsequently determined that light levels in Virginia were
sufficient to produce tomatoes in the winter and thus elected to cut short the
already abbreviated growing cycle at the Virginia greenhouse and begin a new
crop that would come into initial harvest in December 1998 when the higher
winter pricing is available in the marketplace. Also, the Buffalo, New York
greenhouse had construction delays and was late in installing infrastructure and
required systems, thereby delaying the start of the normal crop cycle and
further impacting operating performance. These delays increased operating costs
during the quarter ended June 30, 1998.

The facility at Fort Davis, Texas experienced significant production
problems, resulting in lower production, thereby raising costs relative to
sales. This resulted in the recording of $558 in negative gross profit.

Selling, general and administrative expenses increased $3,457 or 50% to
$10,336 in 1998 from $6,879 in 1997, primarily due to start-up costs
attributable to the Company's three new greenhouse facilities and the expansion
of the Company's sales, marketing, finance and greenhouse management operations.

Research and development expenses decreased $43 or 8% to $465 in 1998 from
$508 in 1997, primarily due to reductions in personnel and related costs.

In June 1997, the Company reversed $300 of accrued restructuring costs no
longer deemed necessary for facilities consolidation and relocation, which
relate to accrued restructuring costs originally recorded in 1995. In August
1996, the Company and a finance company reached a lease settlement agreement
under which the Company paid $880 to satisfy the remaining lease obligation of
approximately $1,248 of principal and $17 of accrued interest, and returned
certain leased equipment with a net book value of $308 to the finance company,
which resulted in a reversal of a restructuring charge of $77 in 1997. The
Company charged costs and expenses totaling $109 and $273 against the
restructuring accruals during 1998 and 1997, respectively.

Operating income decreased $7,044 to an operating loss of $6,471 for 1998
compared to operating income of $573 for 1997. The decrease in operating income
resulted from a $3,791 increase of total operating expenses in 1998 compared to
1997, in addition to a $3,253 decrease in gross profit. The operating loss for
1998 was $6,471, a decrease in operating income of $6,667, compared to operating
income of $196 for 1997, when the $377 in restructuring

<PAGE>

reversals are excluded. Operating expenses increased $3,414 or 46% to $10,801
for 1998 compared to $7,387 for 1997 when the restructuring reversals are
excluded.

Other income (expense) increased $1,493 or 78% to $3,404 net expense in
1998 compared to $1,911 net expense in 1997. The increase in other, net was
primarily attributable to increased interest expense. Interest expense increased
by $1,366 reflecting the higher level of debt incurred in connection with the
development of the new greenhouse facilities.

The Company's net loss increased $4,757 or $0.41 per share basic and
diluted to a net loss of $4,237 or $0.36 per share basic and diluted for 1998
compared to net income of $520 or $0.05 per share basic and diluted for 1997.
Excluding the $377 reversal of restructuring charges in 1997, the net income for
1997 was $143 or $0.01 per share basic and diluted.

Year Ended June 30, 1997
Compared to Year Ended June 30, 1996

The Company's net revenues increased $15,194 or 62% to $39,862 in 1997 from
$24,668 in 1996 primarily due to increases in tomato sales of $10,873, and
biological and agricultural product sales of $4,321. The following table sets
forth the Company's net revenues by market for 1997 and 1996:

Years Ended
June 30
1997 1996 Increase
------- ------- -------
Tomatoes ............................... $21,963 $11,090 $10,873
Biological and agricultural products ... 17,899 13,578 4,321
------- ------- -------
Consolidated ........................... $39,862 $24,668 $15,194
------- ------- -------

Net revenues increases for the greenhouse tomato market were primarily due
to increased capacity. The Company's Fort Davis, Texas and Pocono, Pennsylvania
facilities (representing 53 acres) became operational in 1997 and recorded
product sales in 1997.

Net revenues increases for the biological and agricultural products market
were primarily due to increased selling efforts and market penetration for its
substrate, postharvest equipment and irrigation systems product lines.

Cost of revenues increased $13,676 or 74% to $32,279 in 1997 from $18,603
in 1996, primarily due to product sales increases. For tomatoes, cost of
revenues increased $10,548 or 120% to $19,310 in 1997 from $8,762 in 1996,
primarily due to the growth in production during 1997 associated with the two
new facilities in Fort Davis, Texas and Pocono, Pennsylvania.

Gross profit on net revenues increased $1,518 or 25% to $7,583 in 1997 from
$6,065 in 1996, while gross margin percentage on product sales decreased to 19%
in 1997 from 25% in 1996. Gross margin percentage decrease was primarily due to
startup costs in the greenhouse tomatoes segment and a shift in product mix
towards typically lower margin equipment product sales in the biological and
agricultural products market, partially offset by increased sales of typically
higher margin Biologicals, Bio-Blast and Bio-Save.

<PAGE>

Selling, general and administrative expenses increased $485 or 8% to $6,879
in 1997 from $6,394 in 1996, primarily due to increases in personnel and related
costs.

Research and development expenses decreased $510 or 50% to $508 in 1997
from $1,018 in 1996, primarily due to reductions in personnel and related costs
and certain professional fees.

In June 1997, the Company reversed $300 of accrued restructuring costs no
longer deemed necessary for facilities consolidation and relocation, which
relate to accrued restructuring costs originally recorded in 1995. In August
1996, the Company and a finance company reached a lease settlement agreement
under which the Company paid $880 to satisfy the remaining lease obligation of
approximately $1,248 of principal and $17 of accrued interest, and returned
certain leased equipment with a net book value of $308 to the finance company,
which resulted in a reversal of a restructuring charge of $77 in 1997. In 1996,
the Company reversed $1,550 of accrued restructuring costs that related to a
termination of a lease for its Worcester corporate headquarters and research and
development facility.

Operating income increased $370 to $573 for 1997 compared to an operating
profit of $203 for 1996. The increase in operating income resulted from a $1,518
increase in gross profit, partially offset by an increase of $1,148 in total
operating expenses in 1997 compared to 1996. Operating income for 1997 was $196,
an increase of $1,543, compared to an operating loss of $1,347 for 1996, when
the restructuring reversals are excluded. Operating expenses decreased $25 to
$7,387 for 1997 compared to $7,412 for 1996 when the restructuring reversals are
excluded.

Other income (expense) increased $1,436 or 302% to $1,911 net expenses in
1997 compared to $475 net expense in 1996. The increase was primarily
attributable to an increase in interest expense of $1,312 or 215%, resulting
primarily from the higher average levels of long-term debt and capital lease
obligations outstanding during 1997 compared to 1996.

In 1996, the Company realized an extraordinary gain on the early
extinguishment of debt of $241 or $0.02 per share basic and diluted with no
related income tax effect.

The Company's net income increased $393 or $0.04 per share basic and
diluted to net income of $520 or $0.05 per share basic and diluted for 1997
compared to net income of $127 or $0.01 per share basic and diluted for 1996.
Excluding amounts for the reversals of accrued restructuring costs and
extraordinary gain, net income for 1997 was $143 or $0.01 per share basic and
diluted, a $1,807 or $0.16 per share basic and diluted improvement, compared to
the net loss of $1,664 or $0.15 per share basic and diluted for 1996. The
excluded amounts for the reversals and extraordinary gain of accrued
restructuring costs are: (i) for 1997: the $377 reversals of restructuring
charges; and (ii) for 1996: (a) the $1,550 reversal of accrued restructuring
costs, and (b) the $241 extraordinary gain on early extinguishment of debt.

Liquidity And Capital Resources

The Company's operations have been funded through revenues from product
sales, public and private placements of its equity securities, bank loans and
lease financings, licensing, collaborative research and development
arrangements, and investment income.

<PAGE>

The Company is experiencing a significant liquidity shortfall primarily due
to (i) the production start-up issues encountered at and crop cycle adjustments
of the approximate 127 acres of additional greenhouse production capacity in its
greenhouse tomato segment during 1998, discussed above, and (ii) the need to
refinance its $21,600 aggregate principal amount of promissory notes issued to
Cogentrix that becomes due on June 30, 1999 and its $3,000 line of credit, the
extended due date of which was April 28, 1999. In addition, the Company did not
make certain interest and principal payments due to its primary lender beginning
on October 20, 1998, which constituted default, and is in default of financial
covenants with its lenders. In February 1999, the Company cured its payment
defaults with its primary lender. The Company has also delayed payments to
vendors; however, the Company has structured extended terms with certain vendors
and has substantially paid most other vendors whose payments were delayed.

Production and sales, and correspondingly, cash flow has improved in the
first quarter of calendar 1999 and the Company expects these improvements to
generally continue through 1999. The Company's management has been in close
contact with major suppliers and its lenders, and the parties are working
cooperatively together to manage this cash flow shortfall. Although the
Company's liquidity position is currently manageable, the cash shortfall will
remain until additional capital is raised. The Company is, as well, actively
seeking the refinancing of its $21,600 aggregate principal amount of promissory
notes and its $3,000 revolving line of credit related to its agricultural and
biological products division. If the Company is not successful in refinancing
the notes, it will seek a further extension of the due date or a restructuring
of the terms of the notes. The Company has received a term sheet from a
financial institution in the amount of $4,000 to replace its expiring revolving
line of credit. The Company believes that it will finalize the replacement
financing arrangement in May 1999. No assurance can be given that the Company
will be able to complete the refinancings, obtain an extension or restructuring
of the notes or that the Company's creditors will not attempt to enforce legal
remedies available to them.

Village Farms International Finance Association ("VFIFA") is a non-profit
cooperative formed by APD to obtain and provide construction, term and working
capital financing for its members. VFIFA has entered into each of a line of
credit agreement (the "Line of Credit Agreement"), a term loan agreement (the
"Term Loan Agreement") and a construction loan agreement (the "Construction Loan
Agreement") with CoBank, ACB ("CoBank"), as lender and as agent for other
lenders which may become a party to such agreements (collectively, the "VFIFA
Loan Agreements"). The VFIFA Loan Agreements collectively provide up to $60
million aggregate amount of borrowings availability to VFIFA. The proceeds of
borrowings under the Loan Agreements are loaned by VFIFA to its members and
eligible affiliates of APD (such loans to be referred to herein as "Underlying
Loans" and the recipients of such loans to be referred to herein as "Underlying
Borrowers").

APD has guaranteed all of VFIFA's obligations under the VFIFA Loan
Agreements. Advances under the VFIFA Loan Documents are secured by a first lien
and security interest in all of the assets of VFIFA (including the agreements
and instruments which evidence the Underlying Loans) and APD. APD is in default
of a covenant contained in the VFIFA Loan Documents which requires it to
maintain a 25% ratio of equity to long term debt. As a result of this default
and the payment defaults that were subsequently cured, CoBank has notified the

<PAGE>

Company that until the default is cured, it will not advance funds under the
VFIFA Loan Agreements.

Under the terms of the Line of Credit Agreement, CoBank has agreed to lend
VFIFA up to $13,319 on a revolving basis. Subject to CoBank's right to
accelerate due to the existing default, borrowings under the Line of Credit
Agreement become due on September 30, 1999; provided, however, that such date
will be automatically extended for successive 12 month periods unless on or
before July 31, either CoBank or VFIFA elects to terminate the agreement as of
the following September 30.

CoBank has agreed to loan VFIFA up to $46,681 under the Term Loan
Agreement; provided, however, that CoBank's commitment under the Term Loan
Agreement is effectively reduced by the amount of borrowings outstanding under
the Construction Loan Agreement. Subject to CoBank's right to accelerate due to
the existing default, all borrowings under the Term Loan Agreement become due on
July 31, 2010.

CoBank has agreed to make up to $30 million of loans to VFIFA under the
Construction Loan Agreement. Subject to CoBank's right to accelerate due to the
existing default, each advance made under the Construction Loan Agreement with
respect to an Underlying Loan becomes due within 16 months from the date of the
first advance made with respect to such Underlying Loan; provided, however, that
the due date may be extended for a period of approximately 10 years if a
commitment to issue permanent financing with respect to the Underlying Loan is
issued under the Term Loan Agreement but the lenders under the Term Loan
Agreement refuse to provide such refinancing.

In the absence of a default, interest on amounts advanced under the Line of
Credit Agreement accrues at a rate based upon the prime rate. Interest on
amounts advanced under the Term Loan Agreement and the Construction Loan
Agreement accrues at a rate based upon the prime rate unless VFIFA chooses a
"Fixed Rate Option" (which is based upon a LIBOR rate) or a "Quoted Rate Option"
(which is based upon a rated quoted by CoBank). Interest is payable monthly
under all of the Loan Agreements. Due to the existing defaults under the VFIFA
Loan Agreements, CoBank has imposed a default rate of interest which is equal to
4% above the base rate and notified VFIFA that the option to select an
alternative interest rate is not currently available.

The VFIFA Loan Agreements and the documents evidencing the Underlying Loans
made by VFIFA contain covenants, including, among others, covenants which limit
the ability of VFIFA, APD and the Underlying Borrowers to incur other
indebtedness, pay dividends, make distributions, sell assets and participate in
mergers and other acquisition transactions.

As of January 3, 1999, $13,226 of borrowings were outstanding under the
Line of Credit Facility, $42,798 of borrowings were outstanding under the Term
Loan Agreement and $3,421 was outstanding under the Construction Loan Agreement.

In April 1997, the Company and a lender entered into a $3,000 revolving
line of credit agreement (the "Revolving Credit Agreement") for its biological
and agricultural products division. In the absence of a default, funds borrowed
under the Revolving Agreement bear interest at a rate of prime (7.75% at January
3, 1999) plus 2% and are secured by all the assets of

<PAGE>

the Company and all of the outstanding common stock of AGRO owned by the
Company. The Revolving Credit Agreement imposes a financial covenant on the
Company that requires a minimum tangible net worth of $750, as defined. The
Company is currently not in compliance with this covenant. On November 24, 1998,
the lender notified the Company of its intention to terminate the Revolving
Credit Agreement on December 28, 1998. The Company and the lender have agreed to
four extensions which extend the maturity date to April 28, 1999. The Company
and the lender have agreed to certain other modifications of the Revolving
Credit Agreement, including a reduction of the $1,200 inventory based borrowing
limit by $40 each week which commenced on January 28, 1999 and an increase in
the interest rate to prime plus 5%. As of January 3, 1999, approximately $2,253
of borrowings were outstanding under the Revolving Credit Agreement.

In January 1999, the Company received a term sheet from an institutional
lender for a $4,000 revolving line of credit which the Company intends to
utilize to replace the Revolving Credit Agreement. The term sheet provides that
(i) the lender's obligation to advance funds will be subject to certain formulas
based upon accounts receivable and inventory, (ii) interest will accrue at a
rate per annum equal to the prime rate plus 2.75%, (iii) advances will be
secured by all of the assets of EcoScience and (iv) the facility will have a two
year term. The lender's obligation to provide the facility is subject to various
conditions, including a satisfactory examination of the Company and the
collateral, the approval of its credit committee and the absence of any material
change in the condition of the Company. No assurance can be given that the
Company and the lender will be able to finalize the proposed loan facility.

A limited partnership owned by the Company owes a lender $804 plus accrued
interest under a loan agreement entered into in connection with the acquisition
and improvement of a greenhouse facility in Pennsylvania. This loan is secured
by a mortgage on the greenhouse property and a first lien on all assets,
excluding certain inventory and accounts receivable, of the limited partnership.
The limited partnership is in default of a net worth covenant contained in the
loan agreement. As a result, the lender has the right to accelerate the limited
partnership's obligation to repay the outstanding indebtedness which is
otherwise required to be repaid in quarterly installments during a 15 year
period ending in June 2012. With the cooperation of the lender, the Company is
currently in negotiations to sell the greenhouse (which is currently
inoperative) and plans to use a portion of the proceeds to satisfy the loan made
to the limited partnership.

In March 1997, APD borrowed $1,375 from Cogentrix. The note representing
this loan becomes due on June 2, 2000 and provides for quarterly interest and
principal payments of $69. Borrowings under the note bear interest at the rate
of 6% per annum.

Cash and cash equivalents were $1,095 at January 3, 1999 compared to $1,189
at June 30, 1998. Cash used in operating activities totaled $6,015 for the
period ended January 3, 1999 and principally consisted of a net loss of $8,487,
minority interest in the net loss of the consolidated limited partnerships of
$2,255 and an increase in inventory of $4,159; partially offset by an increase
in accounts payable and accrued expenses of $6,094, and depreciation and
amortization of $2,146. Cash provided by financing activities totaled $10,037
for the period ended January 3, 1999, which consisted principally of net
borrowings under lines of credit of $8,332, proceeds from long-term debt of
$3,602 and minority interest contributions of $1,000

<PAGE>

partially offset by payments of long-term debt of $2,312, and S Corporation
stockholder distributions of $400 (prior to the merger, APD was taxed as a S
Corporation, which required this distribution for payment of related taxes by
the APD shareholders). Cash used in investment activities for the period ended
January 3, 1999 totaled $4,026, which consisted principally of purchases of
property and equipment of $4,632, associated with the construction of an
additional 26 acre greenhouse facility, and a decrease in non-current
liabilities of $2,548; partially offset by a release of restricted cash of
$2,500, which partially paid down debt in the amount of $1,500. The Company's
current liabilities exceeded its current assets by $82,661 (which includes
$44,756 of senior debt classified as current, which otherwise would have been
classified as long-term had the Company not had certain technical defaults under
the VFIFA Loan Documents) and its current ratio was 0.20 to 1, at January 3,
1999 compared to 0.91 to 1, respectively, at June 30, 1998.

Debt and capital leases increased by $30,523 to $85,797 at January 3, 1999
compared to $55,274 at June 30, 1998. The increase was attributable to
borrowings under the Company's lines of credit, construction loans and the
$21,600 of indebtedness in connection with the acquisition transaction with
Cogentrix.

The Company believes that its $1,095 of cash and cash equivalents and $127
of short-term investments as of January 3, 1999, along with revenues from
product sales, will be sufficient to fund the Company's working capital needs,
planned capital expenditures, and to service its indebtedness through January 4,
2000, provided that the Company can resolve its short term cash flow shortfall
by raising additional capital and refinance its $21,600 aggregate principal
amount of promissory notes due on June 30, 1999 and its $3,000 Revolving Credit
Agreement due April 28, 1999. The Company has engaged a financial advisor to
assist it in raising additional funds to finance its ongoing operations in 1999,
current debt obligations and expected growth after January 4, 2000. The Company
is currently attempting to raise debt and/or equity financing. In addition, the
Company will attempt to restructure the VFIFA loan arrangement. If the Company
is not successful in refinancing the $21,600 of notes, it will seek an extension
of the due date or a restructuring of the terms of the notes. No assurance can
be given that the Company will be able to complete the refinancings, restructure
the VFIFA loan facility, obtain an extension or restructuring of the notes, or
that the Company's creditors will not attempt to enforce legal remedies
available to them.

Seasonality

The timing of the Company's operating revenues may vary as a result of the
seasonal nature of its businesses. In addition, operating revenues may be
affected by the timing of new product launches, acquisitions, sales orders,
sales product mix, addition of growing capacity, cropping cycles, crop
production and other economic factors. Accordingly, quarterly or other interim
results should not be considered indicative of results to be expected for any
other quarter or for the full fiscal year.

Year 2000

The Company has initiated an in-house assessment of Year 2000 ("Y2K")
issues as they relate to the Company's information technology ("IT") and non-IT
systems. The Company has completed its assessment of all computer hardware. The
Company has determined that 95% of

<PAGE>

the Company's hardware is free of Year 2000 problems. The Company estimates that
the replacement cost of non-compliant computer hardware will be approximately
$10, which amount is budgeted for the second quarter of 1999. The Company
expects that all computer hardware will be fully compliant by September 1, 1999.

The Company has identified six software applications critical to the
Company's operations. All such packages were purchased from third-party vendors.
Four software applications constitute the Company's accounting applications. The
software vendors for two of those applications have certified the packages to be
Y2K compliant. The other two applications shall be Y2K compliant by the end of
the second quarter of 1999. The Company is in the process of creating test plans
for all accounting applications. The Company expects to complete such compliance
testing by July 31, 1999.

The Company's assessment of software applications relating to
communications with business partners is 50% complete. All such applications
assessed to date are Y2K compliant. The Company expects to complete its
assessment of such applications by the end of the second quarter 1999. The
Company's remaining critical software applications relate to the operations of
the Company's greenhouse facilities. The Company is awaiting a Y2K assessment
and certification from the third-party vendors who maintain such software. Such
assessment and the resulting certification or maintenance is scheduled for
completion by the end of the second quarter of 1999.

In addition to the above-referenced IT systems, the Company is currently
assessing its non-IT systems including its telecommunications and security
systems. This assessment of non-IT systems is 85% complete. To date, the Company
has discovered no Y2K problems. The Company expects that all non-IT systems
shall be Y2K compliant by the end of the second quarter of 1999. The Company has
contacted all of its critical vendors and customers, and has provided each such
vendor and customer with a questionnaire relating to its respective Y2K
compliance. To date, the Company has received completed questionnaires relating
to approximately 15% of such vendors and customers. Vendors or customers that
have not returned a completed questionnaire will be pursued for a response. Upon
its receipt of the remaining questionnaires, the Company, with appropriate
participation by each of its divisions, shall create a Y2K contingency plan
which will provide for vendor supply and customer base adaptations necessitated
by Y2K non-compliance by such parties.

To date, the only anticipated Y2K costs to the Company will relate to the
replacement of non-compliant computer hardware and upgrades of software. The
cost of upgrading current software to become Y2K compliant is expected to be
less than $10. The Company does not expect to incur Y2K assessment and
compliance costs, as such assessments and compliance are performed by Company
personnel.

The Company's primary risks relating to Y2K non-compliance consist of its
dependence upon computer hardware and software, its highly computerized
greenhouse facilities, and its dependence upon various transportation vendors to
move the Company's products to market. As discussed previously, the Company
believes that the risks associated with computer hardware and software will be
minimal. The Company's potential risks associated with its computerized

<PAGE>

greenhouse operations are extensive. The greenhouse facilities utilize computers
to control water, sunlight, carbon dioxide and temperature. The costs of
non-compliant control systems would be considerable. The Company is currently
working with the vendors of such control systems to assess and correct any
possible Y2K related problems. The Company expects that the costs to the Company
of such assessment and correction will be minimal, as the Company's vendors are
expected to provide any necessary Y2K corrections at minimal cost to the
Company. Finally, the Company's trucking contractors are among those surveyed
for Y2K compliance. The Company will assess the risks associated with
noncompliance among those contractors and will provide for the use of
alternative transportation sources in its Y2K contingency plan as necessary.

<PAGE>

PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION

(UNAUDITED)

The following Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the Fiscal Year Ended June 30, 1998 and for the Period Ended
January 3, 1999, have been prepared to give effect to (i) the acquisition by the
Company from Cogentrix Delaware Holdings, Inc. ("Cogentrix") of all of the
outstanding common stock of certain corporations that are partners with the
Company in limited partnerships (the "Greenhouse Partnerships") that operate
four of the Company's greenhouse operations (the "Cogentrix Acquisition"), (ii)
the issuance to Cogentrix of 1,000,000 shares of the Company's Common Stock and
$21,600,000 aggregate principal amount of promissory notes bearing interest at
11.25% per annum, (iii) the forgiveness of a note receivable of $1,838,000
bearing interest at 6% per annum, together with accrued interest thereon of
$191,000, due from an affiliate of Cogentrix to one of the Greenhouse
Partnerships, (iv) the forgiveness of a $643,000 note payable bearing interest
at 6% per annum, together with accrued interest thereon of $65,000, due to an
affiliate of Cogentrix from one of the Greenhouse Partnerships and (v)
termination of an Option Agreement with Cogentrix, in which APD granted to
Cogentrix certain rights to participate in future projects involving the
development, acquisition, owning of or operating by APD of any greenhouse
facility at which fruit or vegetables are to be grown, as defined; as if such
transactions had occurred on July 1, 1997.

The pro forma condensed consolidated financial information has been
prepared using the purchase method of accounting for the Cogentrix Acquisition.
Under this method of accounting, an allocation of the purchase price
consideration given plus related acquisition costs incurred by the Company in
connection with these transactions has been made based upon a preliminary
estimate of the fair value of the investment in the net assets acquired from
Cogentrix. The fair value of the 1,000,000 shares of Common Stock which was
issued on December 30, 1998, has been estimated at $4.00 per share using the
average of the closing market prices for the seven trading days between November
27, 1998 and December 7, 1998, the date on which the Stock Purchase Agreement
was executed. The actual purchase accounting adjustments to reflect the fair
value of the investment in the net assets acquired from Cogentrix will be based
upon an independent appraisal, and accordingly, the pro forma adjustments that
have been used in the pro forma condensed consolidated financial information are
subject to change pending final allocation of the purchase price and are based
on preliminary assumptions regarding purchase accounting adjustments.

The pro forma condensed consolidated statements of operations have been
prepared to reflect the Company's purchase of Cogentrix's minority interests in
the four Greenhouse Partnerships after giving effect to the pro forma
adjustments for depreciation expense, goodwill amortization expense, interest
income, and interest expense related to the transactions described above. The
pro forma condensed consolidated financial information does not purport to be
indicative of the Company's consolidated results of operations or financial
position that would have been reported had these transactions occurred on the
dates indicated above, nor which may occur in the future.

<PAGE>

ECOSCIENCE CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE TRANSITION PERIOD ENDED JANUARY 3, 1999
(In thousands, except per share data)

<TABLE>
<CAPTION>
Pro Forma
-----------------------------------
Historical Transaction
Company Adjustments(1) Consolidated
---------- -------------- ------------
<S> <C> <C> <C>
Net revenue ......................................... $26,194 $ $26,194
Cost of revenue ..................................... 25,237 $233(2) 25,470
------- ------- -------
Gross profit (loss) ................................. 957 (233) 724

Operating expenses:
Selling, general and administrative .............. 8,307 301(3) 8,608
Research and development ......................... 239 239
------- ------- -------
Total operating expenses .................... 8,546 301 8,847
------- ------- -------
Operating loss ...................................... (7,589) (534) (8,123)

Other income (expenses):
Interest, net .................................... (2,928) (1,250)(4) (4,178)
Other, net ....................................... (158) (158)
------- ------- -------
Total other expense, net .................... (3,086) (1,250) (4,336)
------- ------- -------
Income before income taxes and minority interest .... (10,675) (1,784) (12,459)
Provision for (benefit from) income taxes ........... 67 0(6) 67
------- ------- -------
Loss before minority interest ....................... (10,742) (1,784) (12,526)
Minority interest in net loss of consolidated limited
partnerships ..................................... 2,255 (2,255)(5) 0

Net loss ............................................ ($8,487) ($4,039) ($12,526)
======= ======= =======
Loss per share:
Basic
Net loss ...................................... ($0.73) ($0.99)
======= =======
Weighted average basic shares outstanding ..... 11,641 1,000(1) 12,641
======= ======= =======
Diluted
Net loss ...................................... ($0.73) ($0.99)
======= =======
Weighted average diluted shares outstanding ... 11,641 1,000(1) 12,641
======= ======= =======
</TABLE>

See accompanying notes to pro forma condensed financial information.

32
<PAGE>

ECOSCIENCE CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE FISCAL YEAR ENDED JUNE 30, 1998
(In thousands, except per share data)

<TABLE>
<CAPTION>
Pro Forma
----------------------------------
Historical Transaction
Company Adjustments(1) Consolidated
---------- -------------- ------------
<S> <C> <C> <C>
Net revenue ......................................... $ 46,177 $ 46,177
Cost of revenue ..................................... 41,847 $ 467(2) 42,314
-------- -------- --------
Gross profit ........................................ 4,330 (467) 3,863
Operating expenses:
Selling, general and administrative .............. 10,336 603(3) 10,939
Research and development ......................... 465 465
-------- -------- --------
Total operating expenses .................... 10,801 603 11,404
-------- -------- --------
Operating loss ...................................... (6,471) (1,070) (7,541)
-------- -------- --------
Other income (expenses):
Interest, net .................................... (3,289) (2,501)(4) (5,790)
Other, net ....................................... (115) (115)
-------- -------- --------
Total other expense, net .................... (3,404) (2,501) (5,905)
-------- -------- --------
Income before income taxes and minority interest .... (9,875) (3,571) (13,446)
Provision for income taxes (benefit) ................ 21 0(6) 21
-------- -------- --------
Income before minority interest ..................... (9,896) (3,571) (13,467)
Minority interest in net loss of consolidated limited
partnerships ..................................... 5,659 (5,659)(5) 0
-------- -------- --------
Net loss ............................................ ($ 4,237) ($ 9,230) ($13,467)
======== ======== ========
Loss per share:
Basic
Net loss ......................................... (0.36) (1.07)
======== ========
Weighted average basic shares outstanding ........ 11,619 1,000(1) 12,619
======== ======== ========
Diluted
Net loss ......................................... (0.36) (1.07)
======== ========
Weighted average diluted shares outstanding ...... 11,619 1,000(1) 12,619
======== ======== ========
</TABLE>

See accompanying notes to pro forma condensed financial information.

<PAGE>

ECOSCIENCE CORPORATION AND SUBSIDIARIES

NOTES TO PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL INFORMATION

(UNAUDITED)

(1) Pursuant to the Stock Purchase Agreement by and between Cogentrix and the
Company, the closing and effective date of which was December 30, 1998, the
Company issued 1,000,000 shares of its Common Stock with a par value of
$0.01 per share and a $20,600 promissory note bearing interest at 11.25%
per annum, which was originally due and payable on March 15, 1999, in
exchange for all of the outstanding stock of certain corporations that were
partners with the Company in limited partnerships that operate four
greenhouses. On March 12, 1999, Cogentrix agreed to extend the maturity
date of the note to June 30, 1999 for $1,000.

In addition, pursuant to the Stock Purchase Agreement, the Company has
forgiven the amount due from Cogentrix of $1,838 under a promissory note
bearing interest at a rate of 6% per annum, together with accrued interest
thereon of $191, and Cogentrix has forgiven the amount due from the Company
of $643 under a promissory note bearing interest at a rate of 6% per annum,
together with the accrued interest thereon of $65.

The accompanying pro forma condensed consolidated financial information
does not contain a pro forma balance sheet as of January 3, 1999 as the
effects of the above acquisition have been reflected in the historical
January 3 1999 financial statements of the Company contained herein.

The estimated goodwill asset which has resulted from these transactions is
as follows:

(amounts in thousands, except per share and percentage data):

<TABLE>
<S> <C>
Fair value of Common Stock issued based upon an average of the closing
market prices as reported between November 27, 1998 and December 7,
1998 ($4.00 per share)...................................................................... $ 4,000
Issuance of 11.25% promissory notes payable to Cogentrix on June 30, 1999...................... 21,600
Forgiveness of 6% promissory note due from Cogentrix........................................... 1,838
Forgiveness of 6% promissory note due to Cogentrix............................................. (643)
Forgiveness of accrued interest receivable for 6% promissory note due from Cogentrix........... 191
Forgiveness of accrued interest payable for 6% promissory note due to Cogentrix................ (65)
Estimated accrued transaction costs............................................................ 325
Total purchase price consideration given by the Company..................................... 27,246
-------
Estimated fair value of the net assets of the four greenhouses acquired
from Cogentrix, including $5,848 in minority interest....................................... 15,188
-------
Estimated excess of purchase price over net assets acquired (goodwill)...................... $12,058
=======
</TABLE>

(2) To adjust depreciation expense on property and equipment using the
straight-line method, as follows:

(amounts in thousands, except useful life and time factor data):

<TABLE>
<S> <C>
Amount of step-up in basis of property and equipment for the interests
in four greenhouses acquired to estimated fair value........................................ $ 9,340
Estimated useful life in years................................................................. 20
-------
Pro forma depreciation expense adjustment for fiscal year ended June 30, 1998............... $ 467
Factor to divide annual pro forma depreciation expense to determine pro
forma adjustment for transition period...................................................... 2
-------
Pro forma depreciation expense adjustment for the transition period
ended January 3, 1999....................................................................... $ 233
=======
</TABLE>

34
<PAGE>

(3) To reflect goodwill amortization expense which resulted from the Company's
purchase of the acquired entities using the straight-line method as
follows:

(amounts in thousands, except useful life data):

<TABLE>
<S> <C>
Amount of goodwill related to the purchase of the acquired entities
in four greenhouses estimated above $12,058
Estimated useful life in years................................................................. 20
-------
Pro forma goodwill amortization expense adjustment for fiscal year ended June 30, 1998..... $ 603
Factor to divide annual pro forma goodwill amortization expense to determine
pro forma adjustment for transition period.................................................. 2
-------
Pro forma goodwill amortization expense for the transition period
ended January 3, 1999....................................................................... $ 301
=======
</TABLE>

(4) To adjust interest income and interest expense to reflect the issuance of
the $21,600 aggregate principal amount of promissory notes bearing interest
at 11.25% per annum, the forgiveness of the $1,838 promissory note bearing
interest at 6% per annum due from Cogentrix, and the forgiveness of the
$643 promissory note bearing interest at 6% per annum due to Cogentrix as
if such transactions had occurred at the beginning of periods presented as
follows:

(amounts in thousands, except percentage and time factor data):

<TABLE>
<S> <C>
Record interest expense on 11.25% $21,600 notes payable to Cogentrix........................... ($2,430)
Eliminate interest expense on 6% $643 note payable to Cogentrix................................ 39
Eliminate interest income on 6% 1,838 note receivable from Cogentrix........................... (110)
-------
Pro forma interest expense, net of interest income adjustment for the
fiscal year ended June 30, 1998........................................................... ($2,501)
Factor to divide annual pro forma interest expense, net to determine pro
forma adjustments for transition period..................................................... 2
-------
Pro forma interest expense, net of interest income adjustment for the
transition period ended January 3, 1999................................................... ($1,250)
=======
</TABLE>

(5) To eliminate minority interest in net losses from the limited partnerships.

(6) Since the Company has incurred significant historical operating losses for
both financial and income tax reporting purposes for the periods presented
and due to the uncertainty of the realization of the benefit of any related
deferred tax assets, the pro forma adjustments do not reflect any income
tax benefit.

<PAGE>

BUSINESS

General

The Company is primarily engaged in the production, marketing and sale of
branded premium grade tomatoes grown in intensive greenhouse facilities. In
addition, the Company markets, sells, develops and commercializes products for
the agricultural and biological insect and disease control industries.

The Company is, in terms of total acreage controlled by a single entity,
the largest producer and marketer of premium quality, greenhouse grown tomatoes
in the United States. The Company conducts its greenhouse operations through
APD, a wholly owned subsidiary which was acquired by the Company pursuant to a
merger transaction which became effective on September 30, 1998. APD develops,
constructs and operates sophisticated, highly intensive agricultural greenhouse
projects and markets and sells the premium tomatoes produced at these
facilities, as well as tomatoes produced by other greenhouse growers, under its
Village Farms(R) and Home Choice(TM) brand names as a consumer product,
primarily to retail supermarkets and dedicated fresh food distribution
companies. In 1998, APD sold approximately 47.8 million pounds of tomatoes grown
at APD greenhouses, and sold an additional 4.3 million pounds of tomatoes under
APD's Village Farms(R) and Home Choice(TM) brand names pursuant to marketing
arrangements with third party producers.

The Company serves the biological and agricultural product markets
primarily through three subsidiaries: Agro Dynamics, Inc. and Agro Dynamics
Canada Inc. (collectively, "AGRO") and EcoScience Produce Systems Corp.
("EPSC").

EcoScience was incorporated under the laws of the State of Florida on
August 27, 1982, and was reincorporated in the State of Delaware on June 29,
1988. On November 18, 1992, EcoScience acquired all of the outstanding capital
stock of AGRO, an East Brunswick, New Jersey based company that engineers,
designs, markets and distributes advanced technologies, products, growing
systems and services for the North American intensive farming, horticulture,
nursery and produce packing industries. On May 24, 1994, the Company acquired
certain assets and liabilities of American Machinery Corporation ("AMC"), an
Orlando, Florida based business that provided postharvest coating products and
services to the fresh fruit and vegetable markets throughout the United States,
the Caribbean, Central America and South America. Concurrent with the
acquisition of certain assets and liabilities of AMC, the Company formed EPSC to
combine the AMC product line and operating unit with the Company's existing
activities in those markets.

In February 1999, the Company sold its postharvest equipment distribution
business, which engaged primarily in the sale of sorting, grading and packing
systems manufactured by Aweta, B.V., to Autoline, Inc.

The Company's primary products are (i) premium greenhouse grown tomatoes
which it sells to retail supermarkets and dedicated fresh food distribution
companies, (ii) advanced growing systems based on Stonewool(R), manufactured by
Grodania A/S, (iii) computerized environmental and irrigation control systems
manufactured by H. Hoogendoorn Automation

<PAGE>

B.V., (iv) PacRite(R) and Indian River Gold(TM) coatings manufactured by EPSC,
(v) Bio-Save(R) PostHarvest BioProtectant line of products and (vi) Bio-Blast(R)
Biological Termiticide manufactured by EcoScience. In addition, the Company
distributes a broad array of specialty products used in greenhouses and in
fruit, vegetable and ornamental packing.

Financial information for each of the Company's business segments is set
forth in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Note 15 to the Company's Consolidated Financial
Statements. Financial information segregated by major geographic area (United
States and Canada) is set forth in Note 15 to the Company's Consolidated
Financial Statements.

Greenhouse Tomatoes

General

Through APD, the Company currently operates seven greenhouse facilities in
the United States, representing approximately 190 acres of growing capacity.
Three of these facilities, each of which has approximately forty-one (41) acres
of growing capacity, are among the largest greenhouses in the United States. By
producing, harvesting, packaging and directly marketing all of its products, APD
eliminates numerous intermediaries (i.e. repackers, brokers and wholesalers)
utilized by traditional field producers of fresh vegetables. In order to develop
additional sources of supply, APD has entered into agreements to market and sell
fresh tomatoes produced, under Village Farms(R) specifications, by two other
greenhouse operations, which currently comprise a total of approximately 30
acres. If these marketing arrangements remain in effect, APD will control the
marketing of approximately 216 acres of greenhouse vegetable production.

The Greenhouse Vegetable Industry

Approximately $7 billion at the retail level, or over 5 billion pounds, of
fresh tomatoes were sold in the United States in 1998. According to industry
estimates, greenhouse grown tomatoes currently represent only approximately 10%
to 12% of the fresh tomatoes sold in the United States. Although the United
States greenhouses vegetable industry is growing rapidly (as evidenced by an
increase in greenhouse tomato acreage from 1996 to 1997 of approximately 30%
according to Dr. Richard Snyder, Vegetable Specialist at Mississippi State
University), the Company estimates that there are only 700 to 900 acres devoted
to greenhouse vegetable production in the United States and approximately 55% of
the greenhouse grown tomatoes sold in the United States are imported from other
countries. The Company believes that a significant opportunity exists for
greenhouse growers to capture a sizable share of the market for certain fresh
vegetables, including tomatoes.

The ability to control climatic conditions within a greenhouse enables
greenhouse growers to produce varieties of tomatoes that are superior to field
grown tomatoes in terms of taste, color, appearance and shelf life. This is
particularly notable during periods when local production is not available. In
many markets, the only fresh tomatoes that are consistently available during
"off season periods" are picked while green and treated with ethylene gas during
shipment from California, Florida or Mexico to turn the tomatoes red. The
Company believes that due to inferior flavor, many consumers avoid tomatoes
during off season periods and

37
<PAGE>

generally consume only tomatoes grown in their gardens or purchased from nearby
farm stands during a limited period of seasonal availability. When greenhouse
grown tomatoes are available, consumers have demonstrated a willingness to pay a
premium price for superior quality and taste. A 1996 study conducted by
Information Resources, Inc., an independent research firm, at APD's request
indicated that in certain areas of the United States (western New York; Denver,
Colorado; Detroit, Michigan; and New England), where local production has been
available to certain retail chains from nearby greenhouses with consistent
quality and volume, the percentage of greenhouse grown tomatoes sold by the
retail chains has averaged 40% to 70% of total fresh tomato sales by the
retailers. According to information provided to APD by two of these retail
chains which are currently APD customers, in 1990 sales of greenhouse grown
tomatoes did not exceed 15% of fresh tomato sales.

Greenhouse vegetable production has been a thriving industry in Europe,
particularly the Netherlands, since the 1940s. The acreage devoted to greenhouse
vegetable production in Europe is substantially greater than greenhouse acreage
in the United States. Imported greenhouse grown tomatoes from Europe, Israel and
Canada are available at certain times of the year in major United States markets
but, with the exception of Canadian tomatoes, are rarely distributed throughout
the United States due to the additional freight, distribution costs and
distribution channels necessary to reach central and western markets. Due to
insufficient domestic greenhouse production, imports currently represent the
only option for many large volume United States supermarkets. The supply of
imported tomatoes is, however, limited and often erratic because foreign market
exporters generally sell first to their domestic markets to avoid the increased
distribution costs associated with distributing tomatoes in the United States.

The Company believes that the market for greenhouse grown produce has
significant growth potential due to: (i) the superior quality and flavor of
greenhouse grown vegetables; (ii) an increase in the demand for fresh fruit and
vegetables, including greenhouse grown tomatoes and other vegetables; (iii) the
health and food safety benefits of U.S. produced greenhouse grown produce and
(iv) a growing but limited supply of greenhouse grown produce. The successful
production of greenhouse vegetables on a large scale basis, however, requires
specialized operating skills, know-how, technology, complex logistics support,
market knowledge and capital. As the developer and operator of three of the
largest tomato greenhouses in the United States, the Company believes that the
experience it has gained, the technological innovations it has made and the
success it has achieved to date as an industry leader makes it uniquely and
strategically positioned and qualified to take advantage of promising market
opportunities.

Greenhouse Operations

The Company currently owns four of the seven greenhouse facilities
currently in operation. The other three facilities are leased. The Company uses
inert media culture systems to grow tomatoes in these glass paneled greenhouse
structures which currently range from 10 to 42 acres. Using these sophisticated
systems, tomatoes are grown not in soil but in "rockwool," a porous, artificial
substrate made out of volcanic based rock. Through drip irrigation, each plant
is fed nutrients directly from a computer-controlled irrigation system. Hot
water is circulated through pipes running next to the plants to keep the plants
at optimal temperature, which varies throughout each 24 hour period and crop
lifecycle. The water is heated by cogeneration sources and/or natural gas
boilers which capture carbon dioxide that is recycled back to the greenhouse

<PAGE>

for plant consumption. The Company's computer systems enable it to regulate
substantially all environmental and climate parameters to optimize growing
conditions. The Company believes that greenhouses generally yield approximately
10 to 20 times the yield of comparable outdoor farm acreage, depending on the
crop. The Company's production methods incorporate technology and growing
systems substantially similar to those used throughout the well established
European greenhouse growing industry.

The Company's tomatoes are naturally pollinated by bumblebees released into
the greenhouse. Integrated pest management practices such as predator insects
are used to control pests such as white fly.

Three of the greenhouse facilities operated by the Company were developed
in conjunction with electric cogeneration plants. Federal laws enacted in the
1970s encouraged the establishment of cogeneration plants and the use of their
waste steam to provide heat for other industries, including greenhouse vegetable
production. The use of this waste steam enables the Company to heat greenhouses
located near cogeneration plants. Cogentrix is a developer and operator of two
cogeneration energy facilities with which the Company has associated greenhouse
operations.

The Company forms separate operating companies to own and/or lease and
manage each of the greenhouse facilities it operates. The following table
provides information with respect to the Company's greenhouse facilities:

<TABLE>
<CAPTION>
Date
Operations
Greenhouse Facility Commenced Acreage Location Leased/ Owned
------------------- --------- ------- -------- -------------
<S> <C> <C> <C> <C>
Keystone Village Farms 3/1/94 10 Ringgold, PA Leased(1)
Village Farms of Wheatfield 3/1/94 12 Wheatfield, NY Leased(2)
Village Farms of Texas 12/1/96 41 Fort Davis, TX Owned
Village Farms of Marfa 12/1/97 41 Marfa, TX Owned
Village Farms of Buffalo 4/1/98 18 Buffalo, NY Owned
Village Farms of Virginia 4/1/98 42 King George Cty, VA Leased(3)
Village Farms of Presidio 10/1/98 26 Marfa, TX Owned(4)
--
Total Acreage 190
</TABLE>

- ----------

(1) This facility is leased pursuant to a ten year lease agreement with
Cogentrix which expires in 2003 and requires the Company to pay a fixed
monthly lease payment and an annual supplemental lease payment based on a
specified percentage of Cash Flow (as defined) of the facility.

(2) This facility is leased pursuant to a 15 year operating and lease agreement
which expires in 2008 and requires the Company to pay a fixed monthly lease
payment and an annual supplemental lease payment based upon a percentage of
the net operating income (as defined) of the facility.

(3) This facility is leased pursuant to a ten year lease and operating
agreement which expires in 2007 and requires a fixed quarterly rental
payment and an annual supplemental payment equal to a specified percentage
of the Cash Flow (as defined) of the facility.

<PAGE>

(4) The Company has an 85.25% limited partnership interest and a 1% general
partnership interest in the limited partnership which owns this facility.
Third party investors own a 12.75% limited partnership interest and a 1%
general partnership interest in the limited partnership.

In addition to the greenhouse facilities identified above, the Company owns
a 12 acre facility in Mt. Carmel, Pennsylvania which is currently inoperative
and held for sale.

In January 1998, Village Farms of Colorado, Inc. ("VFC"), a wholly owned
subsidiary of the Company, entered into an agreement with Ripe Touch
Greenhouses, Inc. ("Ripe Touch") of Castlerock, Colorado to lease a 20 acre
greenhouse to be built and located in Calhan, Colorado. The Company plans to
produce beefsteak tomatoes during the winter pricing period at this greenhouse
and to establish a distribution center adjacent to the facility. The term of the
lease will commence 30 days after substantial completion of the construction of
the facility and will continue for ten years. The terms of the lease require the
Company to pay a fixed monthly lease payment and an annual supplemental lease
payment equal to a specified percentage of Cash Flow (as defined in the lease)
of the facility. Ripetouch has not obtained financing for the construction of
this facility and no assurance can be given that this facility will be
completed.

Greenhouse Products

The Company's current product line consists of beefsteak tomatoes and
cluster or "on-the-vine" tomatoes. These products are distinguished by their
consistently superior taste and appearance over field grown tomatoes. The
Company believes that by growing in modern greenhouses using state of the art
technology in various locations in the United States it can produce high quality
produce on a year round basis. The Company's premium tomatoes are sold in high
quality packaging designed to protect the product as well as allow the retail
supermarket to readily display and replenish the product.

The Company's premium beefsteak tomatoes are packed into single layer 15
pound boxes with inserts. Hand picked tomatoes are transported by water flume
and then sorted and weighed using advanced color sorting and grading equipment
coupled with a skilled worker to assure each package is packed to the highest
quality standards. Village Farms(R) premium beefsteak tomatoes are packed in
five sizes, Jumbo, Extra Large, Large, Medium and Small with 18-52 tomatoes per
flat depending on the size. Each tomato is labeled with a Price Look Up sticker
(PLU) which has the company name and logo as well as the industry standard
product code number.

The Company's Home Choice(TM) tomatoes are packed in the same manner as the
Village Farms(R) Premium tomatoes but do not meet the Company's standards for
premium tomatoes. Tomatoes which do not meet Village Farms(R) or Home Choice(TM)
quality standards but grade a US#2 are packed into boxes with a net weight of 20
or 25 pounds and marketed to local customers which include restaurants, produce
distributors and farm stands.

Cluster or "on-the-vine" tomatoes are packed into 11 pound boxes loose with
stem tags, or with each tomato labeled with a PLU or in mesh bags. Each cluster
contains between 3 to 5 blemish free tomatoes attached to vine.

Prepacked tomatoes are marketed in three package sizes. Village Farms(R)
premium tomatoes are packed 3 tomatoes into a plastic tray with a net weight of
14 oz or into a 4 cell

<PAGE>

clamshell container with a net weight of 16 or 20 oz. The later product is
marketed under the label Village Farms Baby Beefstm . High quality tomatoes
without calyxes which have dislodged from the cluster tomatoes are packed into 4
count clamshell containers with a net weight of 16 or 20 oz and marketed under
the Red Splendortm label.

The Company is engaged in ongoing testing of new technologies and systems
and various varieties of tomatoes to determine if they could improve the
Company's production yields. The Company tests these tomato varieties for their
maturation period, resistance to disease, the size and quality of the tomatoes
and the tomatoes' shelf life, taste and adaptability to seasonal changes in
light. The Company's growers conduct these tests initially as varietal trials,
where a few plants of several different varieties are placed throughout a
greenhouse and observed. If a new variety shows promising characteristics, the
Company conducts a commercial trial where the new variety is planted on a larger
scale, with performance results compared to the Company's existing tomato
varieties. To date, the Company has selected two of these new varieties of
tomatoes for regular production on a seasonal basis, a Grace variety for winter
production and an as yet unnamed variety for summer production. All tomato
varieties tested and grown are of Dutch origin.

Marketing Arrangements with Others

Through marketing arrangements, APD markets and distributes fresh tomatoes
produced by other greenhouse operators under the Village Farms(R) trademark.
Under the terms of these arrangements, APD is generally entitled to a commission
based on a percentage of product revenues and a fixed amount for each box of
produce sold. APD currently participates in marketing arrangements with the
following growers: Fosters Farms, Inc., a wholly owned subsidiary of Foster
Wheeler Corporation which operates a 10 acre greenhouse located in Marion
Heights, Pennsylvania; and Agros, S.A. which operates a 20 acre greenhouse in
Queretaro, Mexico. The Foster Farms facility produces beefsteak tomatoes from
March through November. Agros, S.A. produces beefsteak tomatoes from October to
May. APD generated approximately $3,053 and $3,154 of revenues from various
marketing arrangements in calendar 1998 and 1997, respectively.

In May 1998, APD entered into an agreement with SunBlush Technologies Corp.
("SunBlush"), a publicly traded corporation, which creates a strategic alliance
for the development of technology for the packaging of fresh cut tomatoes.
SunBlush, a Canadian company, owns rights to certain technologies which
purportedly extend the shelf life of fresh produce and flowers. Under the terms
of the agreement (the "SunBlush Agreement"), APD has agreed to provide up to $50
of funding to SunBlush to develop the application of the SunBlush technology to
greenhouse tomatoes. If such technology can be successfully developed, it is
anticipated that it would be used so that salad products containing fresh cut
tomatoes could be prepackaged for sale to consumers. APD has agreed to supply
the greenhouse tomatoes required for the SunBlush development project and has
been granted the right to supply tomatoes for inclusion in any product
successfully developed by SunBlush pursuant to the SunBlush Agreement that is
subsequently marketed in the United States or Mexico. Test marketing of a salad
containing fresh cut tomatoes is expected to commence in Boston, Massachusetts
in May 1999.

<PAGE>

Sales and Distribution of Tomato Products

APD currently sells approximately 90% of its Village Farms(R), Home
Choice(TM) brand products to retail supermarket chains and dedicated
wholesalers. The remainder is sold to distributors and food service clients. APD
has no formal agreements with its customers. At the beginning of each year, APD
generally negotiates approximate volume and price levels for the upcoming year
with its customers. These arrangements provide APD with the flexibility to
account for significant changes in market conditions and quality/price
competition. APD currently employs 12 sales, marketing and quality assurance
personnel who are responsible for developing and servicing APD customers,
developing and maintaining industry and consumer awareness of Village Farms(R)
brand consumer products and building national recognition of the Village
Farms(R) brandname. The Company's supermarket and fresh food distribution
customers in 1998 were concentrated in the Northeastern United States and Texas.
The Company has recently initiated a plan to expand its customer base to the
midwestern, western and southeastern regions of the United States due to the
increased production capacity added in 1998.

Biological and Agricultural Products Business

Biological and Agricultural Products

The Company's biological and agricultural products include (i)
sophisticated growing systems which it sells to greenhouse operators; (ii)
automated irrigation and environmental control systems for greenhouses; (iii)
coatings and disease control products, including natural biologicals for
protecting fruits and vegetables in storage and transit to market and (iv) a
unique biological pest control product which it sells for use in consumer and
industrial applications. These products are described below.

Growing Systems. The Company is the exclusive distributor in the United
States, Canada, Mexico and the Caribbean of the Grodan(R) brand of stonewool, an
inert growing medium supplied by Grodania A/S, a Denmark based wholly owned
subsidiary of Rockwood International A/S. Stonewool is made by melting rock,
processing it to a fibrous material which can be flocculent or formed into solid
structures. It is both solid and porous, and designed to support the hydroponic
growth of high value crops and to improve plant root distribution and plant
yields through more efficient use of oxygen, water and fertilizer. Stonewool is
used worldwide for cultivation of a variety of plants in controlled growing
environments such as greenhouses. The distribution agreement with Grodania A/S
expires on December 31, 2000. The sale of products under the distribution
agreement accounted for 18%, 17%, 20% and 25% of the Company's total product
sales in the period ended January 3, 1999 and the fiscal years ended June 30,
1998, 1997 and 1996, respectively. The Company believes that revenues under this
distribution agreement will account for more than 10% of the Company's
consolidated product sales during the year ending January 2, 2000.

Automated Irrigation and Environmental Control Systems. The Company through
its ISYS(R) Division engineers, designs, fabricates, assembles and distributes
greenhouse irrigation and fertilization systems, computerized environmental
control systems and application products. In addition to these products and
systems, the Company provides customers with technical support, product service,
turnkey installation, product marketing and other supplementary

<PAGE>

services. The Company is the exclusive distributor in the United States, Canada
and Mexico of computerized environmental control systems and accessories
produced by H. Hoogendoorn Automation B.V., a Netherlands based company.

Coatings and Disease Control Products. The fruits and vegetable production
industry requires specialized services, equipment and products for the
harvesting, processing and storage of produce. Through AGRO and EPSC, the
Company provides coatings and disease control products to the fruit, vegetable
and ornamental packing markets. The Company's coating and disease control
products consist of traditional coating products and its BioSave(R) Post Harvest
BioProtectant line of Products.

Prior to shipping or storage, fruits and vegetables are typically treated
with a variety of processing and storage aids. These are designed to enhance the
appearance and preserve the quality of stored produce. The Company manufactures,
markets and provides a broad spectrum of postharvest coating and cleaning
products and services. Its traditional protective coating and storage products
include Indian River Gold, Pacrite, SEALBRITE(R) and DURA-FRESH(R). These
products were originally acquired in May 1994 with the asset purchase of AMC.
These traditional coating products are conventional shellac and carnauba based
coatings which have been used successfully in the citrus and pome fruit markets.
These traditional coating products, together with the Company's Bio-Save coating
products, maintain the quality and extend the shelf life of produce by (i)
providing a barrier to free gas exchange, (ii) providing a barrier against
abrasion, scuffing, bruising and other injuries, (iii) providing a carrier for
decay preventing agents, (iv) providing a glossy appearance that is
aesthetically appealing to consumers, (v) reducing shrinkage caused by water
loss and (vi) maintaining firmness of the fruit or vegetable. The Company's
traditional coating products contain materials that are U.S. Food and Drug
Administration ("FDA") approved additives or have been listed by the FDA as
"Generally Recognized As Safe" ("GRAS") and accordingly, these coatings do not
require FDA approval or registration. PacRite, SEALBRITE, and Indian River Gold
currently are sold by the Company in the United States, the Caribbean, Central
America and South America.

The Company's Bio-Save line of biological disease inhibitors are based on
the Company's microbial technology which uses live organisms that, through
natural growth, inhibit the ability of a target disease to proliferate. The
Bio-Save line of biological disease inhibitors are sold through EPSC to the
pear, apple and citrus markets. Postharvest diseases and damage during storage
and shipment can account for losses ranging from 10% to 25% of total annual
production of fruits and vegetables, depending on the crop and climate. The
Company has developed and registered with the U.S. Environmental Protection
Agency ("EPA") biological products for sale using the naturally occurring
microorganism, Pseudomonas syringae, which can control the development of Blue
Mold (Penicillium expansum), Gray Mold (Botrytis cinerea) and Mucor Rot (Mucor
pyriformis) on apples and pears, and Blue Mold (P. italium), Green Mold (P.
digitatum) and Sour Rot (Geotrichum candidum) on citrus fruit. The Company has
conducted successful field trials over the last five years utilizing these
microbial disease inhibiting agents in Florida, California, Oregon, West
Virginia, Massachusetts, Michigan and Washington; and in Chile. The Company
initiated commercial product launch of its Bio-Save products in fiscal 1997 and
plans for continued expansion of product marketing and development in fiscal
1999. In 1997, the Company received EPA registration for the use of Bio-Save on

<PAGE>

cherries and continues to investigate the application of Bio-Save to control
other postharvest diseases on fruits and vegetables, such as on potatoes.

Biological Insect Control Products. In the biological insect control
market, the Company, with collaborative partners, has been focused on developing
and selling cost effective bioinsecticide alternatives to synthetic chemical
insecticides for use in specific applications, including sensitive use
environments such as homes, restaurants, schools and food processing facilities.

The Company, together with its collaborator, Terminix International Company
L.P. ("Terminix"), has developed a natural fungal product to control termites,
the Bio-Blast Biological Termiticide. This product contains a fungus selected
for its ability to infect and kill termites, which has been formulated for
application utilizing conventional equipment in a termite infested structure.
The product is a dry wettable powder, packaged and portioned for ease of storage
and use; and used as a water suspension. Through commercial trials, the Company
has demonstrated that Bio-Blast is an effective method for the control of
termite infestations. The Company has demonstrated that termites exposed to the
fungus in the product can spread the fungus by contact to nest mates that have
not directly contacted the fungal agent, thereby infecting and killing other
termites through the Horizontal Transfer(R) effect. The Company received EPA
product registration for the termiticide in October 1994, and subsequently
received approval for registration from 48 states. In fiscal 1996, the Company
made its initial sales to both Terminix and Maruwa Biochemical. In fiscal 1997,
the Company initiated the U.S. commercial launch of Bio-Blast in collaboration
with Terminix.

Sales and Distribution of Biological and Agricultural Products

Growing and Control Systems. The Company sells its growing systems and
automated irrigation and environmental control systems directly through AGRO.
AGRO has a force of approximately 27 people involved in sales, marketing and
distribution, engineering and design, and system installation and service at its
distribution and service centers in East Brunswick, New Jersey; Milton, Ontario,
Canada; and Ventura, California.

Coating Products. The Company uses its AGRO and EPSC direct sales
operations to market and sell its traditional coatings and Bio-Save
BioProtectants to fruit and vegetable growers, packers and processors in the
United States, the Caribbean, Central America and South America. EPSC has a
sales and technical support services force of eight people located in its
distribution and service centers in Orlando, Florida and Visalia, California.

Biological Insect Control. In February 1999, the Company entered into a
Marketing and Distribution Agreement with Terminix pursuant to which Terminix
was appointed as a non-exclusive distributor of Bio-Blast in the United States,
its territories and Canada. Pursuant to this agreement, the Company has agreed
to manufacture and sell Bio-Blast to Terminix at a specified price. Terminix has
certain rights to return certain product previously purchased; however, the
Company's maximum repurchase obligation is approximately $278. This agreement,
which expires in August 2000 (subject to extension for successive one year
periods by mutual agreement of the parties) replaces the Product Development and
License Agreement between the parties which granted Terminix exclusive rights to
use and distribute Bio-Blast in the United States.

<PAGE>

In March 1999, the Company entered into an agreement with Prentiss
Incorporated pursuant to which Prentiss Incorporated ("Prentiss") was appointed
as a non-exclusive distributor of Bio-Blast Biological Termiticide in the United
States and Puerto Rico. Under this agreement, Prentiss has agreed to purchase a
specified quantity of Bio-Blast at a specified price. The agreement expires on
December 31, 1999, subject to earlier termination by either party upon 60 days
written notice. If EcoScience terminates the agreement, it will be obliged to
repurchase all of Prentiss' unsold inventory.

The Company expects to market its Bio-Blast Biological Termiticide
internationally primarily through local and regional distributors and partners.
The Company has entered into a marketing and distribution agreement with Maruwa
Biochemical Co. Ltd. ("Maruwa") pursuant to which it has appointed Maruwa as the
exclusive distributor of Bio-Blast in Japan. Pursuant to this agreement, the
Company has agreed to manufacture and sell Bio-Blast to Maruwa at a specified
price. The agreement, which replaces a prior Development and Distribution
Agreement between the parties, expires on September 30, 1999 and may be renewed
for successive one year periods by mutual agreement of the parties.

Manufacturing

The Company has established supply arrangements for the production of
fungal conidia, the active ingredient in the Bio-Blast product. Upon receipt of
the raw active ingredient, the Company processes, formulates and packages this
material using proprietary processes to produce the Bio-Blast product in its
Orlando, Florida manufacturing facility.

Traditional coating products are manufactured at the EPSC facility in
Orlando, Florida. Production of the Company's biological postharvest fruit
disease control product, Bio-Save, requires large scale fermentation and
formulation capacity. Currently, a single sub-contractor manufactures the
Bio-Save products for the Company. However, the Company believes other entities
would be capable of manufacturing these products. Although, to date, the Company
has been able to acquire a sufficient supply of the Bio-Save product for its
commercial sales; the inability of the sub-contractor to meet the Company's
needs for the Bio-Save products or a change in supplier could cause a delay in
filling orders, as well as a possible loss of sales, which would affect
operating results adversely. Research and Development

The Company's technology for the postharvest and pest control
industries has applicability to a variety of potential products and product
systems. These include various insect spray and chamber products, plant and root
fungal disease control systems, and preharvest and postharvest coatings and
disease control systems which are currently in varying stages of development. As
part of the Company's prior restructuring program, and current cost control
programs, certain research and product development programs, and the funding
thereof, have been suspended, curtailed or deferred. Future development and
funding of these and other select research and product development programs will
depend on a number of factors, including market conditions, availability of
financial, technical and other resources, joint ventures, alliances,
technological advancements, manufacturing capabilities, commercial potential of
resultant end products, governmental regulations, and other relevant matters
which may confront the Company in the future.

<PAGE>

Lyme disease has become, in recent years, a disease of significant public
and medical concern throughout the U.S., particularly in the Northeast. The
disease is spread to people through the bite of several species of ticks. The
Company has signed a Material Transfer Agreement with the United States
Department of Agriculture's Agricultural Research Service ("ARS"), whereby the
Company provides formulated Metarhizium anisopliae to the ARS to support their
field trials against tick larvae. Laboratory trials conducted with this fungus
indicated good killing activity towards the tick larvae. Should these trials be
successful, the Company will consider further commercial development of a
product for the control of ticks capable of spreading Lyme disease.

The Company's operating costs and expenses to date for the biological and
agricultural products segment have, to a large extent, related to the research
and development of products and product systems for future commercialization.
Expenses incurred by the Company under third party funded research and
development programs totaled approximately $43 in the period ended January 3,
1999 and $53, $7 and $0 in the fiscal years ended June 30, 1998, 1997 and 1996,
respectively. Expenses incurred under Company funded research and development
programs totaled approximately $196 in the period ended January 3, 1999 and
$412, $501 and $1,018 in the fiscal years ended June 30, 1998, 1997 and 1996,
respectively.

Competition

The tomato market in which the Company competes is highly competitive. In
addition to other greenhouse producers, the Company must compete with U.S.
producers of field grown tomatoes, which generally have prices substantially
below those of greenhouse tomatoes. In addition, due to increased environmental
compliance costs in the United States, competition from producers in Mexico has
increased due to the North American Free Trade Agreement. Certain of the
producers of field tomatoes may have greater resources than APD. APD's
greenhouse competitors are located primarily in the United States, Canada,
Israel, Spain and Holland.

The Company faces substantial competition from a few large companies and
several smaller companies in the sale of certain products and growing systems to
greenhouses and nurseries in North America. The Company believes that its range
of products and services, and product quality, will allow it to compete
effectively in North America.

Competition in the fruit coatings market is also intense. Fruit coating
products are developed and marketed primarily by several large companies which
offer a full range of products. In addition, several smaller companies offer a
limited range of fruit coating products. The Company believes that it can
compete effectively in this market with its Bio-Save PostHarvest BioProtectant
and traditional coating products based on the cost effectiveness and the quality
of its coating formulations and services.

In the pesticide industry, the Company competes with large manufacturers of
synthetic chemical pesticides and established biopesticide companies. The
pesticide industry is dominated by large chemical companies located in the
United States, Japan and Europe. These companies have substantial financial and
technical resources, extensive sales and distribution capabilities, varied
product registration experience and the ability to manufacture products
efficiently.

<PAGE>

Environmental and Regulatory Matters

The Company's operations are subject to numerous environmental laws and
regulations, including the Food Quality Protection Act of 1996, the Clean Air
Act, the Clean Water Act, the Resource Conservation and Recovery Act, the
Federal Insecticide, Fungicide and Rodenticide Act ("FIFRA"), the Toxic
Substances Control Act and the Comprehensive Environmental Response,
Compensation and Liability Act. Compliance with these laws and regulations is an
ongoing process which is not currently expected to have a material effect on the
Company's capital expenditures, earnings or competitive position. Environmental
concerns are, however, inherent in most major agricultural operations, including
those conducted by the Company, and there can be no assurance that the cost of
compliance with environmental laws and regulations will not be material in the
future. The environmental laws which have the greatest impact on the Company's
operations are those that govern the handling of fertilizers and pesticides. To
help ensure compliance with environmental laws and regulations, all Company
personnel who handle fertilizers and pesticides must first be trained by a
licensed private applicator on the Company's staff certified to provide training
in the handling of hazardous materials. In addition, the Company has adopted
certain written policies and procedures which are designed to prevent accidents
and set forth the appropriate course of action in the event that a spill or
other accident occurs. The Company has also contracted with third parties to
assist in cleanup efforts in the event that an accident having environmental
implications occurs at certain of its facilities.

The Company's greenhouse operations are subject to regulations enforced by,
among others, the FDA and the USDA. The FDA enforces statutory standards
regarding the branding and safety of food products and determines the safety of
food substances in the United States.

The USDA sets standards for raw produce and governs its inspection and
certification. Under the Perishable Agricultural and Commodities Act ("PACA"),
the USDA exercises broad control over the marketing of produce in domestic and
foreign commerce, sets standards of fair conduct as to representations, sales,
delivery, shipment and payment for goods, and regulates the licensing of produce
merchants and brokers. The Company's growing operations are also subject to
oversight by the EPA regarding the use of fertilizers and pesticides protection.

Through its extensive use of labor in its growing operations, the Company
is subject to supervision by the United States Department of Labor, under both
the Fair Labor Standards Act and the Occupational Safety and Health Act; and the
prevalence of foreign workers in this sector of the Company's work force
necessarily involves oversight by the Immigration and Naturalization Service.

Almost every aspect of federal regulation is accompanied by regulation on
the state level, in each jurisdiction where the Company conducts greenhouse
operations.

In most countries throughout the world, governmental authorities require
registration of pesticides before sales are allowed. In the United States, the
EPA regulates pesticides under FIFRA. Pesticides are also regulated by the
individual states. Some states, such as California, Florida and New York, have
their own extensive registration requirements. In order to market products
outside the United States, the company must receive regulatory approval from the
authorities of each applicable jurisdiction. In addition, the FDA administers
the Federal Food,

<PAGE>

Drug and Cosmetic Act ("FFDCA") and establishes standards for pesticide residues
in food to protect public health.

Detailed and complex procedures must be followed in order to obtain
approvals under FIFRA to commercialize a pesticide product. A registration
application must be submitted to the EPA for each product and must list each
pest for which the product will be used. Evaluation data for registration
includes, but may not be limited to, non-target organism testing, environmental
data, product analysis and residue studies, product performance, and toxicology
(hazards to human beings and domestic animals).

The EPA has established specific testing requirements for the registration
of microbial pesticides, which are set out in Subdivision M of the EPA's
Pesticide Assessment Guidelines. Chemical pesticides are currently subject to a
three tier toxicology testing procedure, and a four tier environmental
evaluation process. A microbial pesticide product which satisfactorily completes
both the toxicology Tier 1 tests and environmental evaluation is not required to
go through the increasingly difficult testing requirements of subsequent tiers.
Additional tests may be required, however, in response to any questions which
may arise during Tier 1 testing. The Company's product development cycle
typically anticipates two to three years of field evaluation and up to two years
for product registration, which can run concurrently with the last year of field
trials.

In October 1994, the Company received EPA registration for its Bio-Blast
termiticide. The Company subsequently received registration from 48 states. In
March 1995, the Company received EPA registration for Bio-Save 10 and Bio-Save
11 biofungicides in all states requested. In March 1996, the Company received
EPA registration for Bio-Save 1000, Bio-Save 100 and Bio-Save 110. These
registrations are for new formulations of the original Bio-Save 10 and 11
products. In addition, in May 1997, the Company received approval from the EPA
for a label extension for the use of Bio-Save 1000 on cherries.

Certain of the Company's activities, including the operation of its
laboratories, manufacturing facilities and greenhouse facilities, have been, or
maybe, subject to regulation under various other state and federal laws and
regulations including the Occupational Safety and Health Act, the National
Environmental Policy Act, the Emergency Planning and Community Right-To-Know
Act, the Food Quality Protection Act of 1996, the Resource Conservation and
Recovery Act, and other state and federal statutes regulating environmental
quality. From time to time, governmental authorities review the need for
additional laws and regulations that could, if adopted, apply to the business of
the Company. The Company is unable to predict whether any such new regulations
will be adopted or whether, if adopted, they will adversely affect its business.
Historically, compliance with applicable federal, state and local provisions
which have been enacted or adopted regulating the discharge of materials into
the environment by the Company's greenhouse, manufacturing or laboratory
operations has had an immaterial effect upon the Company's capital expenditures,
results of operations and competitive position.

Patents, Proprietary Rights and Trade Secrets

The Company owns or has rights to certain proprietary information,
including patents and patent applications, which relate to its technology and
products. The Company actively seeks protection, when appropriate, for its
products and proprietary information by means of United

<PAGE>

States and foreign patents. In addition, the Company may rely upon
confidentiality agreements and other contractual arrangements to protect certain
proprietary information.

The Company has been issued patents and has pending patent applications
that address its core technological strengths, with emphasis on fungal and
bacterial formulation, and storage technologies. These patents and patent
applications have been principally pursued in the U.S. and in some cases
internationally. The technology described in these patents and patent
applications is useful in the development of fungal and bacterial active
ingredient microbial pesticides. Microbial pesticide products are based on
microorganisms isolated from the environment, formulated and delivered to a
target pest so that they kill the pest, or control or inhibit its proliferation
on the target. These microorganisms are packaged alive and perform their
function through proliferation in the pest environment. Much of the formulation
and delivery technology developed for synthetic chemical pesticides is
inappropriate for microbial products which employ and preserve living organisms.
EcoScience microbial technology uses live microorganisms which either attack and
kill a target pest (e.g. Bio-Blast) or through natural growth inhibit the
ability of a target pest to proliferate (e.g. Bio-Save).

Together, the Company's patents describe a set of technologies applicable
to the use of fungi for the control of insect pests, and are central to the
Bio-Path(R) chamber technology which covers cockroaches, the further development
and sale of which the Company has suspended; however, this technology can be
extended to any other insect that can be controlled via a chamber system. An
additional patent describing further fungal formulation technology is pending.

The Company has been issued two additional U.S. Patents which relate to the
use of bacteria, chiefly as biofungicides in the treatment of plant fungal
disease.

Provided maintenance fees are paid, U.S. design patents have a term of 14
years from the date of issue; and U.S. utility patents that are based on
applications filed before June 8, 1995, and that have not expired as of June 8,
1995, have a term that is the longer of 20 years from the earliest effective
filing date or 17 years from issuance. In certain instances, however, the term
may be limited to the term of a related patent claiming similar technology. The
Company has an additional pending patent application relating to a method of
extending microbial shelf life. None of the Company's current patents expire
prior to 2006. There can be no assurance that any patents will issue from any of
the Company's patent applications or that issued patents will provide adequate
protection for the Company.

In addition to its own active ingredients, the Company has acquired the
exclusive rights to the use of microbial strains developed by the USDA for the
control of postharvest diseases of pome fruits. The USDA has been granted one
patent covering this technology and has filed a patent application covering
additional postharvest disease control agents.

Much of the Company's technology and many of its processes are dependent
upon the knowledge, experience and skills of certain scientific and technical
personnel. To protect its rights to its proprietary information and technology,
the Company requires certain employees, consultants, advisors and collaborators
to enter into confidentiality agreements which prohibit the disclosure of
confidential information to persons unaffiliated with the Company, and which
require disclosure of and assignment to the Company ideas, developments,
discoveries and

<PAGE>

inventions made by such persons. There can be no assurance that these agreements
will prevent disclosure of the Company's confidential information or will
provide meaningful protection for the Company's confidential information.
Additionally, in the absence of patent protection, the Company's biological and
agricultural business may be adversely affected by competitors who develop
substantially equivalent technology.

Employees

As of April 1, 1999 the Company had approximately 950 employees. The
majority of these workers are employed in the Company's greenhouse operations.
None of the Company's employees is covered by a collective bargaining agreement.
The Company considers its relations with employees to be good.

Properties

The Company's corporate headquarters and research and development
operations, and AGRO's New Jersey operations are currently located in two
facilities in East Brunswick, New Jersey. These facilities consist of 23,000 and
10,000 square foot spaces and are under leases that expire in July 1999. The
Company recently entered into a ten year lease agreement with respect to 20,000
square feet of office/warehouse space in Eatontown, New Jersey and expects to
move its corporate headquarters and research and development operations to this
location in September 1999.

AGRO leases 10,000 square feet of space for its sales, service and
warehouse center located in Milton, Ontario, Canada under a three year lease
which expires in June 2001. AGRO also leases a 12,000 square foot facility for
its sales, service and warehouse center in Ventura, California.

APD's principal properties consist of its greenhouse facilities in
Ringgold, Pennsylvania; Buffalo and Wheatfield, New York; Fort Davis and Marfa,
Texas; and King George County, Virginia. APD has an ownership interest in the
facilities located in Buffalo, New York; Fort Davis, Texas; and the two
facilities in Marfa, Texas. The remaining facilities, and the land upon which
the Buffalo and Marfa facilities are located, are leased. Each of the
greenhouses operated by APD has adjacent packing and support facilities ranging
in size from approximately 11,300 square feet at the Ringgold, Pennsylvania
facility to the approximately 170,000 square foot storage and distribution
center adjacent to the Virginia greenhouse facility. Collectively, these
facilities provide an aggregate of approximately 512,778 square feet of packing
and support space to APD. In addition, APD leases a 4,000 square foot
distribution center in Buffalo, New York and approximately 500 square feet of
office space in Naples, Florida.

The Company's wholly owned subsidiary, EPSC, leases approximately 24,000
square feet of space for its headquarters, production and warehouse facilities
located in Orlando, Florida, under a five year lease which expires in May 1999,
and which provides an option to renew for an additional five year term. In
addition, EPSC leases on a month to month basis approximately 4,000 square feet
of space for its sales, service and warehouse center located in Visalia,
California.

The Company believes that its existing facilities are adequate to meet
current requirements and that suitable additional or substitute space will be
available as needed to accommodate any expansion of operations and additional
offices.

<PAGE>

Legal Proceedings

The Company currently is not a party to any material legal proceedings, nor
is it currently aware of any threatened material legal proceedings. From time to
time, the Company may become involved in litigation relating to claims arising
out of its operations in the normal course of its business.

MANAGEMENT

Directors and Executive Officers

The directors and executive officers of the Company are listed in the table
below, and brief summaries of their business experience and certain other
information is set forth in the information which follows the table:

Name Age Position
---- --- --------
Michael A. DeGiglio 44 President, Chief Executive Officer and Director
Albert Vanzeyst 53 Executive Vice President and Director
J. Kevin Cobb 38 Senior Vice President - Corporate Development
and Interim Chief Financial Officer
David W. Miller 47 Senior Vice President and Chief Technology Officer
Kurt Hoffman 38 Secretary and Corporate Controller
Thomas A. Montanti 74 Director
David J. Ryan 43 Director
Heinz K. Wehner 67 Director

Michael A. DeGiglio has served as a Director of the Company since November
1996, when he was elected to serve as a Director by the Board. Mr. DeGiglio
joined the Company upon its acquisition of Agro Dynamics, Inc. ("AGRO Dynamics")
in November 1992, and served as Chief Executive Officer of AGRO Dynamics until
November 1998. In July 1995, Mr. DeGiglio assumed the offices of President and
Chief Executive Officer of the Company. From 1984 until joining the Company, Mr.
DeGiglio was employed by AGRO Dynamics, where he served as Chief Executive
Officer. Prior to co-founding AGRO, Mr. DeGiglio was Vice President of
International Sales for NYPCO International Inc. Mr. DeGiglio served on active
duty in the United States Navy as an Officer and Jet Aviator from July 1976
through January 1983, and the Naval Air Reserves from 1983 to present, currently
holding the rank of Captain with the United States Naval Reserve. Throughout his
Naval career, he has held various department head positions, completed a tour as
Commanding Officer of a Jet Aviation Squadron, performed multiple tours
overseas, and has completed numerous Senior Advanced Management courses. Mr.
DeGiglio is a co-founder of APD and has served as Chief Executive Officer of APD
since its inception in 1990. He served as President of APD until January 1997.
Mr. DeGiglio received a B.S. in Aeronautical Science and Aviation Management
from Embry Riddle Aeronautical University. Mr. DeGiglio's term as a director of
the Company will expire at the 2001 Annual Meeting of Stockholders.

Albert W. Vanzeyst has served as a Director of the Company since September
1998, when he was elected to serve as a Director and Executive Vice President by
the Board pursuant

51
<PAGE>

to certain agreements made in connection with the Merger pursuant to which the
Company acquired APD. Mr. Vanzeyst, a co-founder of APD, has been Chief
Operating Officer and a Director of APD since its inception in 1990. In January,
1997, he also assumed the role of President of APD. Mr. Vanzeyst has 30 years of
greenhouse design, engineering and construction experience spanning several
countries, crops and climates throughout the world. Between 1984 and 1990, Mr.
Vanzeyst was President of Dace U.S.A., Inc., a subsidiary of Dace International,
Inc., an international turn-key greenhouse construction company. Prior thereto,
he participated in the development, design and construction of numerous
greenhouse operations in several countries throughout the world. Mr. Vanzeyst
holds a degree in Foreign Trade and International Commerce from Handelavond
College in the Netherlands. Mr. Vanzeyst's term as a director will expire at the
2000 Annual Meeting of Stockholders.

J. Kevin Cobb joined the Company in September 1998, as Senior Vice
President-Corporate Development pursuant to certain agreements made by the
Company in connection with the Merger pursuant to which the Company acquired
APD. In February 1999, he was named Interim Chief Financial Officer and
Treasurer of the Company. Prior to joining the Company, Mr. Cobb served as
Senior Vice President and Chief Financial Officer of APD from January 1995 until
July 1998, when he was appointed Senior Vice President - Corporate Development
of APD. Mr. Cobb came to APD after five years experience with Cogentrix Energy,
Inc. of Charlotte, North Carolina. While at Cogentrix, he served as Treasurer
and Director of Project Finance. From 1988 to 1990, he served as Vice President
of Finance of The Lexington Group, Inc., a real estate investment and management
firm. Prior thereto, Mr. Cobb was employed as a Certified Public Accountant with
Arthur Andersen, LLP. Mr. Cobb holds a B.S. degree in accounting from the
University of North Carolina - Charlotte.

David W. Miller joined the Company in May 1988 and serves as Senior Vice
President and Chief Technology Officer. Dr. Miller's current responsibilities
include technology development and management, intellectual property oversight
and product development Dr. Miller received a B.S. in Biochemistry from the
University of California, Davis, and a Ph.D. in Biochemistry and Molecular
Biology from Harvard University, where he studied the molecular biology of
insects. Dr. Miller also was a National Institutes of Health post-doctoral
Fellow studying insect viruses at the University of Idaho. Prior to joining the
Company, Dr. Miller was employed from 1983 to 1988 as Staff Scientist and
Project Leader at Genetics Institute, Inc., in Cambridge, Massachusetts.
Throughout his professional career, Dr. Miller has focused on the development
and commercialization of microbial pesticides with involvement from the
discovery stage to product sales.

Kurt Hoffman was appointed Secretary of the Company in April 1999. He was
appointed Corporate Controller in March 1999, having served as Division
Controller from November 1997 through February 1999 and Assistant Controller
from December 1995 through October 1997. From April 1991 through August 1995,
Mr. Hoffman served as an Assistant Controller for Infomed, Inc. He is a
Certified Public Accountant and received a Bachelor of Arts Degree in Accounting
from the University of Maryland.

Thomas A. Montanti has served as a Director of the Company since September
1998, when he was elected to serve as a Director by the Board pursuant to
certain agreements made by the Company in connection with the Merger pursuant to
which the Company acquired APD. Mr. Montanti, a co-founder of APD, served as
Chairman of the Board and Director of APD from its

<PAGE>

inception in 1990 until the completion of the Merger. He is the father-in-law of
Mr. DeGiglio. Mr. Montanti co-founded Agro Dynamics, Inc. in 1984. Currently,
Mr. Montanti is President of NYPCO Industries, Inc., and New York Protective
Coverings Industry, Inc., each of which is located in New York and distributes
building products and provides specialized insulation contracting to the marine
and power generating industries. Mr. Montanti's term as a director will expire
at the 1999 Annual Meeting of Stockholders.

David J. Ryan has served as a Director of the Company since 1988. Since
1983, Mr. Ryan has been a General Partner of Copley Venture Partners, an
affiliate of Copley Partners 2, L.P., a venture capital investor in EcoScience.
Mr. Ryan has also been a Managing Partner of Mission Ventures, L.P. since 1997.
Prior to his involvement in venture capital, Mr. Ryan spent five years with
Medusa Corporation, a Midwest based manufacturer of industrial and building
products, in several financial and operating capacities. Mr. Ryan also serves as
a director of Mulberry Child Care Centers and other private companies. Mr. Ryan
holds a B.S. from Northeastern University and an M.B.A. from Case Western
Reserve University. Mr. Ryan's term as a director will expire at the 2001 Annual
Meeting of Stockholders.

Heinz K. Wehner has served as a Director of the Company since March 1993.
From March 1976 to June 1992, Mr. Wehner served in several management positions
with Chemagro Corporation and Mobay Corporation, both subsidiaries of Bayer A.G.
in Germany and, most recently, Bayer Corporation, where he served as President
of the Agricultural, Animal Health and Consumer Products Divisions. Previously,
he held several management positions with Bayer Quimicas Unidas S.A. in Peru,
including Vice President of the Agricultural Chemicals and Animal Health
Division, and with Bayer de Mexico S.A., including Vice President of the Crop
Protection and Consumer Products Division. Mr. Wehner is an advisory director
for the Commerce Bank of Kansas City, N.A. in Kansas City, Missouri. Mr. Wehner
attended Escuelas Americanas in Peru where he studied business administration.
Mr. Wehner's term as a director will expire at the 2000 Annual Meeting of
Stockholders.

<PAGE>

Executive Compensation

The following table provides certain summary information regarding
compensation paid by the Company during the twelve month period ended January 3,
1999 and the fiscal years ended June 30, 1998 and 1997 to the Company's Chief
Executive Officer and to each of the other executive officers of the Company,
whose annual compensation and bonus for the twelve month period ended January
31, 1999 exceeded $100,000 (together with the Chief Executive Officer, the
"Named Executive Officers").

<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
---------------------------------------------- ----------------
Number of Shares
Twelve Months Underlying Stock
Name and Principal Position Ended (1) Salary($) Bonus($) Options(#)(2)
- ----------------------------------------------- ------------- --------- -------- ----------------
<S> <C> <C> <C> <C>
Michael A. DeGiglio............................ 1/03/99 $168,750(3) -- --
President and Chief Executive Officer and 6/30/98 150,000 75,000 --
Director 6/30/97 140,000 25,000 20,000

Harold A. Joannidi............................. 1/03/99 102,000 8,000 --
Former Treasurer, Corporate Controller and 6/30/98 102,000 8,000 --
Secretary (4) 6/30/97 93,500 -- 10,000

David W. Miller................................ 1/03/99 114,500 3,500 --
Senior Vice President and Chief Technology 6/30/98 114,500 3,500 --
Officer 6/30/97 106,167 -- 11,000
</TABLE>

- ----------
(1) In 1998, the Company changed its fiscal year from the twelve month period
ending June 30 of each year to a fiscal year which ends on the Sunday
nearest December 31 of each year. As a result, the information presented
for the twelve months ended January 3, 1999 and the twelve months ended
June 30, 1998 reflects a six month overlap.

(2) As adjusted to reflect the one-for-five reverse stock split effected
September 30, 1998.

(3) Excludes $56,250 of compensation paid to Mr. DeGiglio by APD during the
nine month period ending September 30, 1998 (the effective date of the
Merger).

(4) Mr. Joannidi's employment with the Company terminated in April 1999.

Compensation of Directors

Each Director who is not an employee of the Company receives an annual
retainer of $5,000 for Board service, plus $750 for each Board meeting attended,
$375 for each telephonic Board meeting which lasts more than one hour and $500
for each Committee meeting attended, plus expenses. Those Directors who are
employees of the Company do not receive any compensation for their services as
Directors.

Each non-employee Director (other than Mr. Montanti who was appointed to
the Board in connection with the Merger) when first elected or appointed to the
Board receives a warrant to purchase 20,000 shares of Common Stock at an
exercise price equal to the fair market

54
<PAGE>

value on the grant date. These warrants vest at the rate of 20 percent on the
grant date and on the first anniversary of the grant date and 30 percent on the
second and third anniversaries of the grant date. Warrants granted to Directors
of the Company expire five years after the date of grant.

Options Grants in the Last Fiscal Year

During the twelve month period ended January 3, 1999, there were no options
granted under the Company's stock option plans to the Named Executive Officers.

Aggregate Option Exercises in Twelve Months Ended January 3, 1999 and Year End
Option Values

The following table provides certain information with respect to options to
purchase Common Stock held by the Named Executive Officers at January 3, 1999.

Number of Securities Underlying Unexercised
Options at January 3, 1999 (#)
-------------------------------------------

Name Exercisable Unexercisable

Michael A. DeGiglio 64,000 --

Harold A. Joannidi 17,000 --

David W. Miller 21,000 --

On December 31, 1998 (the last trading day prior to January 3, 1999), the
exercise price of each of the options listed in the table set forth above
exceeded the closing price of the Common Stock ($4.125 per share) on the Nasdaq
Stock Market. No options were exercised by the Named Executive Officers during
the twelve month period ended January 3, 1999.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee currently consists of two independent directors,
David J. Ryan and Heinz K. Wehner. No such person was an officer or employee of
the Company during the twelve month period ended January 3, 1999 or was formerly
an officer or employee of the Company.

<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding beneficial
ownership of the Common Stock as of May 1, 1999 by: (i) each person known to
EcoScience to be the beneficial owner of more than 5% of the Common Stock on
that date, (ii) the Selling Stockholders, (iii) each Director, (iv) each
executive officer and (v) all Directors and executive officers as a group.

<TABLE>
<CAPTION>
Beneficial Ownership of Common Beneficial Ownership of
Stock Prior to Offering(1) Common Stock After Offering
------------------------------ ----------------------------
Number of
Shares of
Name and Address No. of Percent of Common Stock No. of Percent of
of Beneficial Owners Shares Class Being Offered Shares Class
- ------------------------------------- --------- ---------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Michael A. DeGiglio(2) .............. 3,363,976 26.5% -- 3,363,976 26.5%
Albert Vanzeyst(3) .................. 2,941,811 23.3% -- 2,941,811 23.3%
Thomas Montanti(4) .................. 2,537,324 20.1% 633,273 1,904,051 15.1%
David J. Ryan(5) .................... 172,586 1.4% -- 172,586 1.3%
Heinz K. Wehner(6) .................. 8,000 * -- 8,000 *
David W. Miller(7) .................. 25,772 * -- 25,772 *
J. Kevin Cobb ....................... 235,767 1.9% -- 235,767 1.9%
Kurt Hoffman(8) ..................... 1,300 * -- 1,300 *
Cogentrix Delaware Holdings, Inc. ... 1,000,000 7.9% 1,000,000 -- --
1105 North Market Street, Suite 1108
Wilmington, DE 19801
All directors and executive officers
as a group (9 persons) (9) ....... 9,302,236 73.1 -- 9,302,236 73.1%
</TABLE>

- ----------
*Less than 1%.

(1) Information with respect to beneficial ownership is based upon information
furnished to the Company by each stockholder included in this table. Except
as indicated in the notes to the table, each stockholder included in the
table has sole voting and investment power with respect to the shares shown
to be beneficially owned by him. Pursuant to the rules of the Securities
and Exchange Commission, shares of Common Stock which an individual or
member of a group has a right to acquire within 60 days of April 2, 1999
pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but are not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person shown in the
table.

(2) Includes 166,593 shares held by Mr. DeGiglio's wife, as to which Mr.
DeGiglio disclaims beneficial ownership, 518,900 shares held in trust for
the benefit of Mr. DeGiglio's children that Mr. DeGiglio has no right to
vote and as to which he disclaims beneficial ownership, and 64,000 shares
issuable upon the exercise of stock options.

(3) Includes 153,095 shares held in custody for Mr. Vanzeyst's child that Mr.
Vanzeyst has no right to vote and as to which he disclaims beneficial
ownership.

(4) Includes 4,231 shares held by Mr. Montanti's wife, as to which Mr. Montanti
disclaims beneficial ownership.

(5) Includes 8,000 shares of Common Stock issuable upon exercise of warrants,
and 151,253 and 13,333 shares of Common Stock held and issuable upon
exercise of a warrant, respectively, by Copley Partners 2, L.P. Copley
Venture Partners L.P., a limited partnership of which Mr. Ryan is a general
partner, is a general partner of Copley Partners 2, L.P.

<PAGE>

(6) Consists solely of shares of Common Stock issuable upon exercise of
warrants.

(7) Includes 21,000 shares of Common Stock issuable upon exercise of stock
options.

(8) Includes 1,300 shares of Common Stock issuable upon exercise of stock
options.

(9) Includes an aggregate for 107,633 shares of Common Stock issuable upon
exercise of stock options and warrants. Share amount includes 151,253 and
13,333 shares of Common Stock held and issuable upon exercise of a warrant,
respectively, by Copley Partners 2, L.P., for a total of 164,586 shares or
1.4% of total shares of Common Stock outstanding. Copley Venture Partners
L.P., a limited partnership of which Mr. Ryan is a general partner, is a
general partner of Copley Partners 2, L.P.

The mailing address for each of the stockholders listed above whose address
was not supplied in the table is c/o EcoScience Corporation, 10 Alvin Court,
East Brunswick, New Jersey 08816

Certain Relationships and Related Transactions

On September 30, 1998, the Company issued 9,421,487 shares of the Company's
Common Stock, $0.01 par value, to the holders of the Common Stock of APD,
pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), which
provided for the merger of APD with and into a newly formed, wholly owned
subsidiary of the Company. Pursuant to the Merger Agreement, the stockholders of
APD received 30,619.067 shares of the Company's Common Stock for each
outstanding share of APD. In addition, on September 30, 1998, the Company issued
99,000 shares of Common Stock to certain stockholders of APD for their entire
50% interest in Village Farms of Morocco, S.A., a Moroccan company, as provided
for in the Merger Agreement (the "Morocco Transaction"). The shares of Common
Stock issued to the stockholders of APD pursuant to the Merger Agreement
represented approximately 80% of the outstanding shares of the Company, on a
fully diluted basis, at the effective time of the Merger.

Prior to the Merger, Michael A. DeGiglio, President, Chief Executive
Officer and a director of the Company owned beneficially (or may have been
deemed to own beneficially) 366,075 shares of Common Stock representing 3.4% of
the outstanding capital stock of the Company. Mr. DeGiglio was also Chief
Executive Officer and a Director of APD; he served as its President until
January, 1997. Prior to the Merger Mr. DeGiglio owned beneficially approximately
106 shares of the Common Stock of APD, representing 34.5% of the outstanding
capital stock thereof. Mr. DeGiglio and his wife and children were issued an
aggregate of 3,287,011 shares in connection with the Merger and the Morocco
Transaction.

Prior to the Merger, Albert Vanzeyst, a stockholder, director and executive
officer of APD owned beneficially approximately 95 shares of the Common Stock of
APD, representing 30.9% of the outstanding capital stock thereof. Mr. Vanzeyst
and members of his family were issued 3,061,906 shares in connection with the
Merger and the Morocco Transaction. As of the effective date of the Merger, Mr.
Vanzeyst became a director and Executive Vice President of the Company.

57
<PAGE>

Prior to the Merger, Thomas Montanti, a stockholder, director and Chairman
of the Board of APD owned beneficially approximately 82 shares of the Common
Stock of APD, representing 26.5% of the outstanding capital stock thereof. Mr.
Montanti and members of his family (excluding Mr. DeGiglio and Mr. DeGiglio's
wife and children) were issued 2,902,803 shares in connection wit the Merger and
the Morocco Transaction. As of the effective date of the Merger, Mr. Montanti
became a director of the Company.

Prior to the Merger, J. Kevin Cobb, a stockholder and Senior Vice President
- - Corporate Development of APD owned beneficially 7 7/10 shares of the Common
Stock of APD, representing 2.5% of the outstanding capital stock thereof. Mr.
Cobb was issued 235,767 shares in connection with the Merger. As of the
effective date of the Merger, Mr. Cobb became Senior Vice President - Corporate
Development of the Company.

Prior to the Merger between the Company and APD, the Company, during the
nine month period ended September 30, 1998, sold products to APD in the amount
of $4,216. Product sales to APD were $5,012,000 for the fiscal year ended June
30,1998 and $2,954,000 for the fiscal year ended June 30, 1997.

The Company and APD share certain facilities and other costs for which the
Company, prior to the Merger between the Company and APD, charged APD $31,500
during the nine month period ended September 30, 1998. Charges to APD were
$42,000 and $39,000 for the fiscal years ended June 30, 1998, and 1997,
respectively. APD was charged occupancy costs, including facility lease,
utilities and other costs, based on its proportionate occupancy and usage. In
addition, certain employees of each company performed shared duties. Each of the
Company and APD contributed that portion of each such employee's salary that
reflects the proportionate amount of work done for that entity.

The Company management believes that prices and fees charged to APD for
products, facilities, and costs prior to the Merger were consistent with what
would have been charged in arm's length transactions.

PLAN OF DISTRIBUTION

The sale or distribution of the Common Stock offered pursuant to this
Prospectus may be effected directly to purchasers by the Selling Stockholders as
principals or through one or more underwriters, brokers, dealers or agents from
time to time in one or more transactions (which may involve crosses or block
transactions) (i) on any stock exchange, in the Nasdaq SmallCap Market, or in
the over-the-counter market, (ii) in transactions otherwise than on any stock
exchange or in the over-the-counter market, or (iii) through the writing of
options (whether such options are listed on an options exchange or otherwise)
on, or settlement of short sales of, the Common Stock. Any of such transactions
may be effected at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at varying prices determined at the
time of sale or at negotiated or fixed prices, in each case as determined by the
Selling Stockholder or by agreement between the Selling Stockholder and
underwriters, brokers, dealers, or agents, or purchasers. If the Selling
Stockholders effect such transactions by selling Common Stock to or through
underwriters, brokers, dealers or agents, such underwriters, brokers, dealers or
agents may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders or commissions from purchasers of
Common Stock for whom they may act

58
<PAGE>

as agent (which discounts, concessions or commissions as to particular
underwriters, brokers, dealers or agents may be in excess of those customary in
the types of transactions involved). The Selling Stockholders and any brokers,
dealers or agents that participate in the distribution of the Common Stock may
be deemed to be underwriters, and any profit on the sale of Common Stock by them
and any discounts, concessions or commissions received by any such underwriters,
brokers, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act.

Under the securities laws of certain states, the Common Stock may be sold
in such states only through registered or licensed brokers or dealers.

The Company will not receive any proceeds from the sale of the shares of
Common Stock being offered by the Selling Stockholders. The Company has agreed
to bear all expenses incident to the registration, offering and sale of the
Common Stock to the public by the Selling Stockholders hereunder other than
commissions and discounts of underwriters, brokers, dealers and agents. The
Company has agreed to indemnify the Selling Stockholders and their officers,
directors, employees, agents, partners and controlling persons against certain
liabilities, including liabilities under the Securities Act, arising out of or
incident to registration of the Common Stock.

The Company has informed the Selling Stockholders that the
anti-manipulation provisions of Rules 10b-6 and 10b-7 under the Securities
Exchange Act of 1934 may apply to purchases and sales of the Common Stock by the
Selling Stockholders, and that there are restrictions on market-making
activities by persons engaged in the distribution of the Common Stock. The
Company has also advised the Selling Stockholders that if a particular offer of
Common Stock is to be made on terms constituting a material change from the
information set forth above with respect to the Plan of Distribution, then to
the extent required, a Prospectus Supplement must be distributed setting forth
such terms and related information as required.

DESCRIPTION OF SECURITIES

Common Stock

The Company is authorized to issue 100,000,000 shares of Common Stock, par
value $.01 per share. Each share of Common Stock entitles the holder thereof to
one vote on all matters submitted to the shareholders. Since the Common Stock
does not have cumulative voting rights, holders of more than 50% of the
outstanding shares can elect all of the directors and holders of the remaining
shares could not elect any directors. The shares are not subject to redemption
and there are no preemptive rights. All outstanding shares of Common Stock are
fully paid and non-assessable. Holders of Common Stock are entitled to receive
dividends out of funds legally available therefore when, as and if declared by
the Board of Directors. The payment of cash dividends on the Common Stock is
unlikely for the foreseeable future. See "Market Price and Dividend Policy."
Upon any liquidation, dissolution or winding up of the Company, holders of
Common Stock are entitled to share pro rata in any distribution to the holders
of Common Stock.

As of May 1, 1999, there were 269 record holders of the Company's Common
Stock.

<PAGE>

Preferred Stock

The Company's Restated Certificate of Incorporation authorizes 10,000,000
shares of Preferred Stock, par value $.01 per share, and authorizes the Board of
Directors to issue shares of Preferred Stock in one or more series with such
dividend, liquidation, conversion, redemption and other rights as the Board
establishes at the time. Shareholder approval is not required to issue Preferred
Stock. As of May 1, 1999, there were no shares of Preferred Stock outstanding.
To the extent that the Company issues any shares of Preferred Stock, the
ownership interest and voting power of the Company's shareholders could be
diluted.

The Preferred Stock could be issued in one or more series with such voting,
conversion and other rights as would discourage possible acquirors of the
Company from making a tender offer or other attempt to gain control of the
Company, even if such transaction were generally favorable to the Company's
shareholders. In the event of a proposed merger, tender offer or other attempt
to gain control of the Company which the Board does not approve, it might be
possible for the Board to authorize the issuance of a series of Preferred Stock
with rights and preferences which could impede the completion of such a
transaction. The Board could authorize holders of the Preferred Stock to vote,
either separately as a class or with the holders of Common Stock, on any merger,
sale or exchange of assets by the Company or other extraordinary corporate
transaction. Preferred Stock may be to discourage possible acquirors from making
a tender offer or other attempt to gain control of the Company with a view to
imposing a merger or sale of all or any part of the Company's assets, even
though a majority of shareholders may deem such acquisition attempts to be
desirable.

Transfer Agent and Registrar

The Company's transfer agent is Boston Equiserve, Boston, Massachusetts.

SHARES ELIGIBLE FOR FUTURE SALE

As of May 1, 1999, there were 12,619,264 shares of Common Stock
outstanding, of which approximately 10,525,722 shares (83.4% of the shares to be
outstanding) are held by persons who acquired such shares in transactions which
were not registered under the Securities Act of 1933 (the "Securities Act").
These shares (the "Restricted Shares") may not be sold unless registered under
the Securities Act or sold pursuant to an applicable exemption from
registration, such as Rule 144 under the Securities Act.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including any person who may be deemed to be an
"affiliate" of the Company as that term is defined under the Securities Act, is
entitled to sell within any three-month period a number of shares beneficially
owned for at least two years that does not exceed the greater of (i) 1% of the
then outstanding shares of Common Stock or (ii) the average weekly trading
volume in the Common Stock during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain requirements as to the manner
of sale, notice and the availability of current public information about the
Company. However, a person who is not an affiliate and has beneficially owned
such shares for at least two years is entitled to sell such shares under Rule
144(k) without regard to the volume, manner of sale, notice or public
information requirements.

<PAGE>

As of May 1, 1999, 5,235 of the 10,525,722 Restricted Shares were eligible for
sale in the public market in reliance upon Rule 144.

As of May 1, 1999, there were outstanding warrants to purchase an aggregate
of 124,311 shares (the "Warrant Shares") of the Company's Common Stock and
outstanding options to purchase an aggregate of 134,898 shares (the "Option
Shares") of the Company's Common Stock. The Option Shares have been registered
under the Securities Act.

The Company has granted the holders of the 9,063,578 Restricted Shares
outstanding as of May 1, 1999 certain demand and "piggyback" registration rights
which entitle the holders to have their shares registered for public sale.
Holders of warrants have been granted similar rights with respect to 61,198
Warrant Shares.

No predictions can be made as to the effect, if any that sales of shares or
the availability of shares for sale will have on the market price prevailing
from time to time. Moreover, the Company cannot predict the number of shares of
Common Stock which may be sold in the future pursuant to Rule 144 or otherwise
since such sales will depend upon the market price of the Common Stock, the
individual circumstances of the holders thereof and other factors. Nevertheless,
any sales of substantial amounts of the Common Stock in the public market could
have a significant adverse effect on the market price of the Common Stock.

LEGAL MATTERS

Certain legal matters with respect to the Common Stock being offered hereby
will be passed upon for the Company by Giordano, Halleran & Ciesla, A
Professional Corporation.

EXPERTS

The financial statements included in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports. Reference is made to said report, which includes an explanatory
paragraph with respect to the uncertainty regarding the Company's ability to
continue as a going concern as discussed in Note 1 to the financial statements.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's regional offices at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Seven World Trade
Center, New York, New York 10048. Reports, proxy and information statements and
other information filed electronically by the Company with the Commission are
available at the Commission's World Wide Web Site at http://www.sec.gov. Copies
of such materials can be obtained from the Public Reference Section

<PAGE>

of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Company's Common Stock is quoted on the Nasdaq SmallCap
Market, and such reports, proxy statements and other information can be
inspected at the office of Nasdaq Operations, 1735 K Street, N.W., Washington,
D.C. 20006.

<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Report of Independent Public Accountants........................................ F-2
Consolidated Balance Sheets as of January 3, 1999, June 30, 1998 and 1997....... F-3
Consolidated Statements of Operations for the fiscal years ended June 30,
1998, 1997, 1996 and the transition periods (see Note 2) ended
January 3, 1999 and December 31, 1997 (unaudited)......................... F-4
Consolidated Statements of Stockholders' Equity (Deficit) for the fiscal
years ended June 30, 1998, 1997 and 1996 and the transition period
(see Note 2) ended January 3, 1999......................................... F-5
Consolidated Statements of Cash Flows for the fiscal years ended June 30,
1998, 1997 and 1996 and the transition periods (see Note 2) ended
January 3, 1999 and December 31, 1997 (unaudited)......................... F-6
Notes to Consolidated Financial Statements...................................... F-7
</TABLE>

F-1

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders of EcoScience Corporation:

We have audited the accompanying consolidated balance sheets of EcoScience
Corporation (a Delaware corporation) and subsidiaries as of January 3, 1999,
June 30, 1998 and 1997, and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for the transition period (see
Note 2) ended January 3, 1999 and each of the three years in the period ended
June 30, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of EcoScience Corporation and
subsidiaries as of January 3, 1999, June 30, 1998 and 1997, and the results of
their operations and their cash flows for the transition period (see Note 2)
ended January 3, 1999 and each of the three years in the period ended June 30,
1998, in conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the consolidated financial statements, the Company has suffered recurring
losses from operations, an accumulated deficit, negative working capital and was
in default of certain covenants under its various debt agreements. These factors
raise substantial doubt about the ability of the Company to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Arthur Andersen LLP

Roseland, New Jersey
April 2, 1999

F-2

<PAGE>

ECOSCIENCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

<TABLE>
<CAPTION>
January 3, June 30,
1999 1998 1997
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................................................. $ 1,095 $ 1,189 $ 3,009
Restricted cash ....................................................................... -- 2,500 --
Short-term investments ................................................................ 127 533 528
Accounts receivable, less reserves of $551, $660 and $178 at January 3, 1999, June 30,
1998 and 1997, respectively ......................................................... 7,271 6,809 3,456
Assets held for sale .................................................................. 1,911 1,911 --
Note receivable due from related party ................................................ -- 1,838 1,838
Inventories ........................................................................... 9,209 5,050 6,716
Other current assets .................................................................. 1,212 2,411 1,756
--------- --------- ---------
Total current assets ................................................................ 20,825 22,241 17,303
--------- --------- ---------
Property, plant and equipment, net .................................................... 65,200 53,136 45,225
Restricted cash ....................................................................... -- -- 3,250
Intangible assets, net ................................................................ 13,550 1,542 1,745
Other noncurrent assets ............................................................... 2,289 2,589 3,069
--------- --------- ---------
Total assets ................................................................ $ 101,864 $ 79,508 $ 70,592
========= ========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Short-term borrowings ................................................................. $ 37,080 $ 7,148 $ 3,950
Current maturities of long-term debt .................................................. 47,557 5,043 3,878
Current obligations under capital leases .............................................. 42 55 59
Accounts payable ...................................................................... 11,102 5,080 3,916
Accrued expenses and other current liabilities ........................................ 7,705 7,118 3,719
--------- --------- ---------
Total current liabilities ........................................................... 103,486 24,444 15,522
--------- --------- ---------
Noncurrent liabilities:
Long-term debt, less current maturities ............................................... 780 42,648 35,190
Obligations under capital leases ...................................................... 338 380 406
Other long-term liabilities ........................................................... 1,689 4,387 3,313
Total noncurrent liabilities ........................................................ 2,807 47,415 38,909
Minority interest in limited partnerships ................................................... 665 7,767 12,115
Commitments and contingencies Stockholders' equity (deficit):
Preferred stock, $0.01 par value, 10,000,000 shares authorized; none issued and
outstanding ......................................................................... -- -- --
Common stock, $0.01 par value, 100,000,000 shares authorized; 12,619,278,
11,618,178 and 11,600,722 shares issued and outstanding at January 3, 1999,
June 30, 1998 and 1997, respectively ................................................ 126 116 116
Additional paid-in capital .................................................................. 55,574 57,509 57,426
Accumulated deficit ......................................................................... (60,706) (57,749) (53,496)
Accumulated other comprehensive income (loss) ............................................... (88) 6 --
--------- --------- ---------
Total stockholders' equity (deficit) ................................................ (5,094) (118) 4,046
--------- --------- ---------
Total liabilities and stockholders' equity (deficit) ........................ $ 101,864 $ 79,508 $ 70,592
--------- --------- ---------
</TABLE>

The accompanying notes are an integral part of
these consolidated balance sheets.

F-3

<PAGE>

ECOSCIENCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

<TABLE>
<CAPTION>
Transition Period Years Ended
(see Note 2) Ended June 30,
----------------------- ----------------------------------
(Unaudited)
January 3, December
1999 31, 1997 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net revenues ...................................................... $ 26,194 $ 17,835 $ 46,177 $ 39,862 $ 24,668
Cost of revenues .................................................. 25,237 14,675 41,847 32,279 18,603
-------- -------- -------- -------- --------
Gross profit ...................................................... 957 3,160 4,330 7,583 6,065
-------- -------- -------- -------- --------
Operating expenses:
Selling, general and administrative .......................... 8,307 3,987 10,336 6,879 6,394
Research and development ..................................... 239 202 465 508 1,018
Asset valuation and restructuring reversal ................... -- -- -- (377) (1,550)
-------- -------- -------- -------- --------
Total operating expenses .................................. 8,546 4,189 10,801 7,010 5,862
-------- -------- -------- -------- --------
Operating (loss) income ........................................... (7,589) (1,029) (6,471) 573 203
-------- -------- -------- -------- --------
Other income (expense):
Interest, net ................................................ (2,928) (841) (3,289) (1,923) (611)
Other, net ................................................... (158) (100) (115) 12 136
-------- -------- -------- -------- --------
Total other expense ....................................... (3,086) (941) (3,404) (1,911) (475)
-------- -------- -------- -------- --------
Loss before taxes, minority interest and extraordinary item ....... (10,675) (1,970) (9,875) (1,338) (272)
Provision for income taxes ........................................ 67 21 21 78 116
-------- -------- -------- -------- --------
Loss before minority interest and extraordinary item .............. (10,742) (1,991) (9,896) (1,416) (388)
Minority interest ................................................. 2,255 1,311 5,659 1,936 274
-------- -------- -------- -------- --------
(Loss) income before extraordinary item ........................... (8,487) (680) (4,237) 520 (114)
-------- -------- -------- -------- --------
Extraordinary item ................................................ -- -- -- -- 241
-------- -------- -------- -------- --------
Net (loss) income ................................................. ($ 8,487) ($ 680) ($ 4,237) $ 520 $ 127
======== ======== ======== ======== ========
(Loss) earnings per share

Basic
(Loss) income before extraordinary item ...................... ($ 0.73) ($ 0.06) ($ 0.36) $ 0.05 ($ 0.01)
Extraordinary item ........................................... -- -- -- -- 0.02
-------- -------- -------- -------- --------
Net (loss) income ............................................ ($ 0.73) ($ 0.06) ($ 0.36) $ 0.05 $ 0.01
======== ======== ======== ======== ========
Weighted average basic shares outstanding .................... 11,641 11,605 11,619 11,548 11,334
======== ======== ======== ======== ========

Diluted
(Loss) income before extraordinary item ...................... ($ 0.73) ($ 0.06) ($ 0.36) $ 0.05 ($ 0.01)
Extraordinary item ........................................... -- -- -- -- 0.02
-------- -------- -------- -------- --------
Net (loss) income ............................................ ($ 0.73) ($ 0.06) ($ 0.36) $ 0.05 $ 0.01
======== ======== ======== ======== ========
Weighted average diluted shares outstanding .................. 11,641 11,605 11,619 11,583 11,381
======== ======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of
these consolidated financial statements.

F-4

<PAGE>

ECOSCIENCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(In thousands, except share data)

<TABLE>
<CAPTION>
Common Stock
---------------------- Accumulated
Additional Other Total Comprehensive
Number of $0.01 Par Paid-in Accumulated Comprehensive Stockholders' Income
Shares Value Capital Deficit Income (loss) Equity (deficit) (loss)
--------- --------- ---------- ----------- ------------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1995 ........... 11,288,589 $113 $55,768 ($53,189) ($67) $2,625 $--
Exercise of stock options .......... 333 -- 5 -- -- 5 --
Issuance of common stock in
settlement of WBDC lease ........ 100,000 1 499 -- -- 500 --
Unrealized gain on short-term
investments ..................... -- -- -- -- 67 67 67
S Corp Distributions ............... -- -- -- (314) -- (314) --
Net income ......................... -- -- -- 127 -- 127 127
---------- ----- ------- ------- ----- ------- -------
Balance at June 30, 1996 ........... 11,388,922 114 56,272 (53,376) -- 3,010 194
Exercise of stock options .......... 3,800 -- 17 -- -- 17 --
Issuance of common stock ........... 208,000 2 1,137 -- -- 1,139 --
S Corp Distributions ............... -- -- -- (640) -- (640) --
Net income ......................... -- -- -- 520 -- 520 520
---------- ----- ------- ------- ----- ------- -------
Balance at June 30, 1997 ........... 11,600,722 116 57,426 (53,496) -- 4,046 520
Exercise of stock options .......... 17,456 -- 83 -- -- 83 --
Unrealized gain on short-term
investments ..................... -- -- -- -- 6 6 6
Pooling adjustment ................. -- -- -- 314 -- 314 --
S Corp Distributions ............... -- -- -- (330) -- (330) --
Net loss ........................... -- -- -- (4,237) -- (4,237) (4,237)
---------- ----- ------- ------- ----- ------- -------
Balance at June 30, 1998 ........... 11,618,178 116 57,509 (57,749) 6 (118) (4,231)
Exercise of stock options .......... 1,100 -- 5 -- -- 5 --
Unrealized loss on short-term
investments ..................... -- -- -- -- (4) (4) (4)
Cumulative translation
adjustments ..................... -- -- -- -- (90) (90) (90)
S Corp conversion .................. -- -- (5,930) 5,930 -- -- --
S Corp Distributions ............... -- -- -- (400) -- (400) --
Issuance of common stock ........... 1,000,000 10 3,990 -- -- 4,000 --
Net loss ........................... -- -- -- (8,487) -- (8,487) (8,487)
---------- ----- ------- ------- ----- ------- -------
Balance at January 3, 1999 ......... 12,619,278 $126 $55,574 (60,706) ($88) ($5,094) ($8,581)
========== ===== ======= ======= ===== ======= =======
</TABLE>

The accompanying notes are an integral part of
these consolidated financial statements.

F-5

<PAGE>

ECOSCIENCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

<TABLE>
<CAPTION>
Transition Period
See Note 2) Ended Years Ended June 30,
--------------------- --------------------------------
(Unaudited)
January 3, December
1999 31, 1997 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net (loss) income ................................................... ($ 8,487) ($ 680) ($ 4,237) $ 520 $ 127
Adjustments to reconcile net (loss) income to net cash used
in operating activities:
Extraordinary Item ............................................ -- -- -- -- (241)
Depreciation and amortization ................................. 2,146 1,301 3,223 1,906 863
Minority interest in limited partnership ...................... (2,255) (1,311) (5,659) (1,935) (274)
(Gain) loss on sale of investments ............................ (6) -- -- (2) 58
Loss (Gain) on sale of property, plant and equipment .......... 1 (3) (3) -- (74)
Gain on settlement of accounts payable ........................ -- -- -- -- (51)
Reversal of restructuring charge .............................. -- -- -- (377) (1,550)
Changes in current assets and liabilities:
Accounts receivable, net ................................... (462) (917) (2,818) (1,002) (488)
Inventories ................................................ (4,159) (3,704) (1,987) (2,427) (2,216)
Other current assets ....................................... 1,008 (1,015) (1,040) (553) (598)
Other ...................................................... 105 3 73 (30) (7)
Accounts payable and accrued expenses ...................... 6,094 908 5,015 1,081 831
-------- -------- -------- -------- --------
Net cash used in operating activities ............................ (6,015) (5,418) (7,433) (2,819) (3,620)
-------- -------- -------- -------- --------
Cash flows from investing activities:
Purchases of property, plant and equipment .......................... (4,632) (14,306) (26,099) (28,244) (17,499)
Proceeds from sale of property, plant and equipment ................. 2 343 628 50 368
Purchases of short-term investments ................................. -- -- -- (503) --
Proceeds from sale of short-term investments ........................ 409 -- -- 677 6,079
Changes in restricted cash .......................................... 2,500 -- 750 455 (3,205)
Decrease (increase) in other noncurrent assets ...................... 243 (356) (141) (268) (80)
Decrease in other noncurrent liabilities ............................ (2,548) (4,606) (3,532) -- --
Decrease (increase) in loan receivable .............................. -- (643) (643) (1,538) 131
Proceeds from long-term construction liabilities .................... -- -- -- 801 1,645
-------- -------- -------- -------- --------
Net cash used in investing activities ............................ (4,026) (19,568) (29,037) (28,570) (12,561)
-------- -------- -------- -------- --------
Cash flows from financing activities:
Issuance of common stock ............................................ -- -- -- 1,139 4
Proceeds from exercise of stock options ............................. 5 83 83 17 1
Debt issue costs .................................................... (134) (601) (601) (1,507) (1,012)
Minority interest contribution ...................................... 1,000 2,741 2,741 9,667 4,657
Cash dividends ...................................................... (400) (220) (330) (640) (314)
Proceeds from long-term debt ........................................ 3,602 14,306 24,299 28,123 16,239
Net borrowings under line of credit ................................. 8,332 5,394 7,148 2,045 1,905
Payments on capital leases .......................................... (56) (24) (54) (46) (25)
Payments on long-term debt .......................................... (2,312) (3,849) (5,225) (6,146) (4,294)
-------- -------- -------- -------- --------
Net cash provided by financing activities ........................ 10,037 17,830 28,061 32,652 17,161
-------- -------- -------- -------- --------
Effects of exchange rates on cash balances .......................... (90) -- -- -- --
-------- -------- -------- -------- --------
Net change in cash and cash equivalents ................................ (94) (7,156) (8,409) 1,263 980
Cash and cash equivalents at beginning of period ....................... 1,189 $ 9,598 $ 9,598 1,746 766
======== ======== ======== ======== ========
Cash and cash equivalents at end of period ............................. $ 1,095 $ 2,442 $ 1,189 $ 3,009 $ 1,746
======== ======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of
these consolidated financial statements.

F-6

<PAGE>

ECOSCIENCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share data)

1. OPERATIONS

EcoScience Corporation ("EcoScience") and its wholly owned subsidiaries
(collectively, the "Company"), Agro Power Development, Inc. and its subsidiaries
and consolidated limited partnerships (collectively "APD"), Agro Dynamics, Inc.
and Agro Dynamics Canada Inc. (collectively, "AGRO") and EcoScience Produce
Systems Corp. ("EPSC") are primarily engaged in the production, marketing and
sale of premium grade tomatoes grown in intensive greenhouse facilities. In
addition, the Company markets, sells, develops and commercializes products for
the agricultural and biological industries.

The Company derives most of its revenues from the sale of: (i) greenhouse
tomatoes to retail supermarkets and dedicated fresh food distribution companies;
(ii) growing medium products and computerized environmental and irrigation
control systems to the intensive farming and horticulture industries; and (iii)
postharvest coating products to the fresh fruit market throughout the western
hemisphere. Prior to the sale of the Company's postharvest equipment division to
Aweta, B.V., in February 1999 (see Note 14), the Company had also derived
revenues from the sale of sorting, grading and packing systems to the produce
packing industry.

In 1988, EcoScience began full scale research and development operations,
which continued through its fiscal year ended June 30, 1996. The Company
incurred in excess of $30,000 in research and development costs during this
phase of its growth and development. During fiscal 1994 and 1995, the Company
incurred approximately $12,000 in restructuring charges to transition the
Company from research and development to a commercial operation. This was
enhanced through the beginning of greenhouse operations in 1994 by APD and the
acquisitions of AGRO in November 1992 and EPSC in May 1994. In addition, the
Company has also funded the construction and initial start-up operations of
approximately 180 acres of greenhouse production capacity since mid-1996.
EcoScience and APD completed a merger on September 30, 1998 (see Note 3), which
resulted in approximately $1,500 in transaction costs. The above activities have
been principally funded by the Company's initial private capitalization, public
equity offerings in February 1992 and December 1993 and the combined $60,000
credit facility discussed in Note 10.

As a result of the above, the Company has suffered significant recurring
losses resulting in an accumulated deficit of $60,706 as of January 3, 1999. The
Company is in violation of certain covenants under various debt agreements as of
January 3, 1999, which has resulted in approximately $44,756 of debt being
classified as current in the accompanying January 3, 1999 balance sheet which
otherwise would have been classified as long-term. See Note 10 for further
information regarding the Company's various defaults. This along with the note
issued on December 30, 1998, in connection with the acquisition of certain
minority interests in consolidated limited partnerships (see Note 4), has
resulted in significant negative working

F-7

<PAGE>

capital; however, the Company's greenhouse operations are now believed by
management to be approaching their optimal cropping cycles for the first time
since the large 180 acreage expansion that began in mid-1996, with the exception
of Village Farms of Presidio, L.P. ("VFP") (see Note 2a). Management's plan is
focused on improving the gross profit of all greenhouse operations as a result
of greater production volumes, sizing and efficiency through a full cropping
cycle at each greenhouse facility.

The Company believes that its $1,095 of cash and cash equivalents and $127
of short-term investments as of January 3, 1999, along with revenues from
product sales, will be sufficient to fund the Company's working capital needs,
planned capital expenditures, current acquisitions and to service its
indebtedness through January 4, 2000, provided that the Company can resolve its
near term cash flow problems by raising additional capital and refinance its
$21,600 aggregate principal amount of promissory notes issued on December 30,
1998 and March 15, 1999 that are due on June 30, 1999, restructure its $60
million credit facility and refinance its $3,000 line of credit, for which the
due date is April 28, 1999. The Company has engaged a financial advisor, who is
assisting in the raising of additional funds to finance its ongoing operations
during 1999 and expected growth after January 4, 2000. There can be no
assurances that such efforts will be successful or that additional debt or
equity financing can be obtained to meet working capital needs. These factors
raise substantial doubt about the ability of the Company to continue as a going
concern.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, which contemplates
the realization of assets and the liquidation of liabilities in the normal
course of business. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
EcoScience and its wholly owned subsidiaries, APD, AGRO and EPSC.

Through December 30, 1998, the Company consolidated four 50% owned limited
partnerships due to the direction of power and control exerted by the Company's
management in the normal course of business over the daily operations of Village
Farms of Texas, L.P. ("VFT"), Pocono Village Farms, L.P. ("PVF"), Village Farms
of Marfa, L.P. ("VFM") and Village Farms of Buffalo, L.P. ("VFB"). The remaining
minority interests in these four limited partnerships were purchased from
Cogentrix Delaware Holdings, Inc. ("Cogentrix") on December 30, 1998 (see Note
4).

On August 31, 1998, the Company entered into an agreement with two
wholly-owned subsidiaries of Agro Rent B.V. ("Agro Rent") to form a limited
partnership in Presidio County, Texas (the "VFP Agreement"). The purpose of the
VFP Agreement was to develop and operate a 41 acre greenhouse for the purpose of
producing and selling peppers. Due to the inability to attain the desired level
of financing only 26 acres of the greenhouse has been constructed. The VFP
Agreement defined the Company and Agro Rent as approximate 86% and 14% owners,
respectively. Therefore, the 86% interest in VFP is included in the accompanying
consolidated

F-8

<PAGE>

financial statements. All material intercompany transactions and balances have
been eliminated in consolidation.

(b) Fiscal Year-End and Transition Period

The Company has elected to change its fiscal year-end from the twelve month
period ended June 30 to a 52-53 week fiscal year. The year-end date of such
fiscal year shall be on the Sunday nearest December 31 of each year. The audited
transition period financial statements will be as of January 3, 1999 and for the
period from July 1, 1998 through January 3, 1999 (the "transition period").

The unaudited consolidated financial information included herein for the
six months ended December 31, 1997 have been included for comparative purposes
to the audited transition period and have been prepared in accordance with
generally accepted accounting principles for interim financial statements. In
the opinion of the Company, these unaudited consolidated financial statements
reflect all adjustments necessary, consisting of normal recurring adjustments,
for a fair presentation of such data on a basis consistent with that of the
audited data presented herein.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and
disclosures of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

(d) Cash and Cash Equivalents and Short-Term Investments

Cash and cash equivalents and short-term investments consist of highly
liquid investments and are stated at the lower of cost or market value. Cash and
cash equivalents consist of investments with original maturities of less than 90
days. Short-term investments have original maturities greater than 90 days and
such securities are classified as available for sale in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." The Company uses the
specific identification method in determining the cost basis of short-term
investments, and in computing any realized gains or losses from the sale of such
securities.

Cash and cash equivalents consist of cash and highly liquid money market
funds, the balance of which was $1,095, $1,189 and $3,009 at January 3, 1999,
and June 30, 1998 and 1997, respectively. Short-term investments consist of
United States government obligations with an original maturity date of greater
than 90 days, the balance of which was $127, $533 and $528 at January 3, 1999,
and June 30, 1998 and 1997, respectively.

(e) Restricted Cash

F-9

<PAGE>

The Company had restricted cash of $2,500 and $3,250 at June 30, 1998 and
1997, respectively. The amounts were held as collateral for certain outstanding
debt. (See Notes 5 and 10).

(f) Inventories

January 3, June 30,
---------- ------------------------
1999 1998 1997
---------- ------ ------
Raw materials ......... $ 77 $ 74 $ 17
Crop inventory ........ 6,582 2,724 4,776
Finished goods ........ 2,550 2,252 1,923
------ ------ ------
$9,209 $5,050 $6,716
====== ====== ======

Crop inventories represent direct and indirect production costs incurred
before harvesting the annual tomato and growing crops. Growing crops are valued
at the lower of cost or estimated market. Finished goods inventories include
material, labor and overhead. Raw materials and finished goods are stated at the
lower of first-in, first-out ("FIFO") cost or market.

(g) Property, plant and equipment.

Property, plant and equipment are stated at cost. The Company provides for
depreciation and amortization using the straight-line method by charges to
operations in amounts estimated to allocate the cost of these assets over their
useful lives as follows:

Classification Estimated Useful Life
-------------- ---------------------
Land ............................................. --
Land improvements ................................ 5-20 years
Greenhouses ...................................... 20 years
Greenhouse improvements .......................... 10-20 years
Greenhouse equipment ............................. 5-10 years
Computer and office equipment .................... 5-7 years
Laboratory equipment ............................. 5 years

Leasehold improvements and assets held under capital leases are amortized
over the term of the lease or the useful life of the asset, whichever is
shorter.

(h) Intangible Assets

Intangible assets consist primarily of goodwill and other intangible assets
resulting from acquisitions accounted for using the purchase method of
accounting. Goodwill is amortized using the straight-line method over 20 years.
Other intangible assets relating to acquired businesses consist principally of
amounts attributable to distribution agreements. The amortization for
distribution agreements is on a straight line basis over five years. On December
30, 1998, the Company acquired the minority interests in certain limited
partnerships. The goodwill resulting from this transaction was $12,058 (see Note
4).

Goodwill, net of accumulated amortization, was $13,550, $1,542 and $1,745
at January 3, 1999, June 30, 1998 and 1997, respectively. The accumulated
amortization of goodwill and other

F-10

<PAGE>

intangible assets totaled $509, $459, and $823 at January 3, 1999, June 30, 1998
and 1997, respectively. Amortization of goodwill and other intangible assets
included in the accompanying consolidated statements of operations was $50,
$136, $204 and $204 in the transition period ended January 3, 1999 and fiscal
years 1998, 1997 and 1996, respectively.

(i) Revenue Recognition

Revenue from tomato product sales is recognized upon shipment by the
Company. Certain equipment sales are recognized upon installation and include
certain warranty provisions.

(j) Research and Development Expenses

The Company charges research and development expenses to operations as
incurred. Expenses incurred by EcoScience under third party funded research and
development programs totaled approximately $43, $53, $7, and $0 in transition
period ended January 3, 1999 and fiscal years 1998, 1997 and 1996, respectively.
Expenses incurred under Company funded research and development programs totaled
approximately $196, $412, $501 and $1,018 in the transition period ended January
3, 1999 and fiscal years 1998, 1997 and 1996.

(k) Foreign Currency Translation

The assets and liabilities of the Company's Canadian subsidiary are
translated into U.S. dollars at current exchange rates and the related revenue
and expense items are translated at average annual exchange rates. The aggregate
effect of translation losses is reflected as a component of accumulated other
comprehensive loss in the accompanying financial statements until the sale or
liquidation of the underlying foreign investment.

(l) Earnings (Loss) Per Share

The Company has adopted Statement of Financial Accounting Standards No.
128, "Earnings per Share," which requires presentation of both basic and diluted
earnings per share in the Consolidated Statement of Operations. Basic earnings
per share excludes any dilutive effects of options, warrants and convertible
securities. Diluted earnings per share gives effect to all potentially dilutive
common shares that were outstanding during the period.

The following table sets forth a reconciliation of weighted average common
shares outstanding to the weighted average common shares assuming dilution:

Transition
Period
Ended
January 3, Years ended June 30,
---------- ----------------------
1999 1998 1997 1996
---------- ------ ------ ------
Weighted average common shares
outstanding ........................... 11,641 11,619 11,548 11,334
Dilutive effect of common shares
issuable (1) .......................... -- -- 35 47
------ ------ ------ ------
Weighted average common shares
outstanding assuming dilution ......... 11,641 11,619 11,583 11,381
====== ====== ====== ======

F-11

<PAGE>

(1) Issuable under common stock purchase warrants and stock option plans.

Common stock purchase warrants and stock options at January 3, 1999, June
30, 1998, 1997 and 1996 to purchase 259,209, 281,491, 185,673 and 119,829
shares, respectively, of common stock were not included in the computation of
earnings per common share assuming dilution because their effect would be
anti-dilutive.

(m) Fair Value of Financial Instruments

No class of financial instrument had a material difference between its
carrying value and estimated fair value based on market quotations, projected
cash flows or other estimating methods. See Note 10 for the estimated fair value
of certain debt agreements.

(n) Supplemental Cash Flow Information

The Company made certain cash payments and consummated certain non-cash
investing and financing transactions as summarized below:

<TABLE>
<CAPTION>
Transition
Period Ended
January 3, Years ended June 30,
------------ ---------------------------------------------
1999 1998 1997 1996
------------ -------- -------- --------
<S> <C> <C> <C> <C>
Cash paid for:
Interest .................................... $ 1,828 $ 3,320 $ 2,761 $ 1,004
Income taxes ................................ 2 5 175 73

Non-cash investing and financing activities:
Disposition of assets under capital lease ... -- -- 308 2,936
Termination of capital lease obligation ..... -- -- (405) (3,500)
Termination of operating lease obligation and
related reduction of accrued restructuring
costs ..................................... -- -- -- (2,050)
Issuance of common stock in exchange for
termination of operating lease obligation . -- -- -- 500
Assets acquired under capital leases ........ -- 319 451 --
Interest capitalized ........................ 165 384 384 285
Acquisition of minority interests ........... (26,921) -- -- --
Cancellation of notes and related interest,
net ....................................... 1,321 -- -- --
Issuance of acquisition notes payable ....... 21,600 -- -- --
Issuance of common stock .................... 4,000 -- -- --
</TABLE>

(o) Long-Lived Assets

The Company has adopted Financial Accounting Standards Board ("FASB")
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long Lived Assets and for Long Lived Assets to be Disposed of
" ("SFAS 121"). SFAS 121 requires, among other things, that an entity review its
long lived assets and certain related intangibles for impairment from changes in
circumstances that would indicate the carrying amount of an asset

F-12

<PAGE>

may not be fully recoverable. As a result of its review during the transition
period, the Company does not believe any impairment exists in the recoverability
of its long lived assets.

(p) Stock Based Compensation

The Company has adopted Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" ("SFAS 123"), which encourages, but does not require, an entity to
account for employee stock based compensation under a fair value based method.
SFAS 123 allows an entity to continue to measure compensation cost for employee
stock based compensation plans using the intrinsic value based method of
accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"). The Company continues to account for employee stock based
compensation using the intrinsic value based method and is required to make pro
forma disclosures of net income and earnings per share as if the fair value
based method of accounting under SFAS 123 had been applied (see Note 12).

(q) Income Taxes

The Company accounts for income taxes under the provisions of SFAS 109,
"Accounting for Income Taxes". This statement requires the Company to recognize
deferred tax assets and liabilities for the expected future tax consequences of
events that have been recognized in the Company's financial statements or tax
returns. Under this method, deferred tax assets and liabilities are determined
based on the estimated future tax effects of differences between the financial
statements, carrying amounts and the tax basis of assets and liabilities at
currently enacted tax laws and rates. Prior to the merger on September 30, 1998,
APD elected, by consent of their stockholders, to be treated under the
provisions of Subchapter S of the Internal Revenue Code, Section 1372. Under
such provisions, earnings and losses of APD were passed through to the
stockholders in proportion to their ownership interest and reported on their
individual income tax returns. Accordingly, no provision for Federal income
taxes had been made in the APD financial statements. All distributions paid to
stockholders through September 30, 1998 were paid in part to fund Federal and
state income tax obligations of the stockholders arising from the income
generated by APD (see Note 13).

(r) Accumulated Other Comprehensive Income (Loss)

In June 1997, the FASB issued SFAS 130, "Reporting Comprehensive Income,"
which establishes standards for reporting and presenting information on
comprehensive income and its components in annual and interim financial
statements. The Company adopted SFAS 130 as of July 1, 1998. Comprehensive
income (loss) includes net income, unrealized gains on available-for-sale
securities and foreign currency translation adjustments. The Company has
disclosed comprehensive income (loss) in the Consolidated Statement of
Stockholders' Equity (Deficit).

(s) Reclassifications

Certain amounts in the previous years consolidated financial statements
have been reclassified to conform to the transition period presentations.

3. MERGER WITH AGRO POWER DEVELOPMENT, INC.

F-13

<PAGE>

On September 30, 1998, the Company issued 9,421,487 shares of the Company's
common stock, $0.01 par value, to the holders of the common stock of APD, a
privately held corporation, pursuant to an Agreement and Plan of Merger, in
which APD was merged with and into a newly formed, wholly owned subsidiary of
the Company (the "Merger"). The stockholders of APD received 30,619.067 shares
of the Company's common stock for each outstanding share of common stock of APD.
In addition, on September 30, 1998, the Company issued 99,000 shares of common
stock to certain stockholders of APD for their entire 50% interest in Village
Farms of Morocco, S.A., a Moroccan company, as provided for in the Agreement and
Plan of Merger. After the Merger, the stockholders of APD owned approximately
80% of the outstanding shares of the Company, on a fully diluted basis.

The merger has been accounted for as a pooling of interests. Accordingly,
the consolidated financial statements give retroactive effect to the merger with
APD, accounted for as a pooling of interests, as if the merger had occurred at
the beginning of the earliest period presented.

The effective date of the merger, September 30, 1998, was during the
transition period ended on January 3, 1999. The following table summarizes the
results of operations of EcoScience and APD on a separate company basis for the
period (July 1, 1998-September 30, 1998) before the combination was consummated
that is included within the consolidated statement of operations for the
transition period ended January 3, 1999.

(Unaudited)
EcoScience APD
---------- --------
Net revenues.............................. $6,028(1) $4,557
====== ======
Net loss.................................. ($1,088)(1) ($2,593)
======= =======
S Corporation distributions............... N/A $400
=======

(1) The net revenues and net loss amounts for EcoScience above include
transactions with APD during the period that resulted in approximately
$1,877 in net revenues and $211 in gross profit, respectively.

The following sets forth the reconciliations of net revenue and net income
(loss) previously reported by the Company to the combined amounts presented in
the accompanying historical consolidated statements of operations:

<TABLE>
<CAPTION>
Years Ended June 30,
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Net revenues:
EcoScience ............................ $22,317 $20,853 $14,151
APD ................................... 28,871 21,963 11,090
Eliminations ............................. (5,011) (2,954) (573)
------- ------- -------
Total ................................. $46,177 $39,862 $24,668
=============================================================================================

Net (loss) income:
EcoScience ............................ ($967) $385 ($587)
APD ................................... (3,010) 356 734
Eliminations ............................. (260) (221) (20)
------- ------- -------
Total ................................. ($4,237) $520 $127
=============================================================================================
</TABLE>

F-14

<PAGE>

On September 30, 1998, APD's S Corporation tax status was terminated as it
became a wholly-owned subsidiary of a C Corporation. The accumulated deficit of
$5,930 on the merger date was reclassified to additional paid-in-capital in the
accompanying consolidated statement of stockholders' equity (deficit).

The Company incurred approximately $1,500 of transaction costs in
connection with the merger, which were charged to operations during the
transition period.

The financial statements, for periods prior to the September 30, 1998
merger are reported using EcoScience's historical financial reporting periods.
EcoScience's historical financial statements are presented for the years ended
June 30, 1998, 1997 and 1996. In addition, since APD's historical fiscal year,
for periods prior to the September 30, 1998 merger, ended on the Sunday nearest
December 31, the accompanying June 30, 1998 financial statements required APD to
recast its 1998 historical financial statements to conform to and be combined
with EcoScience's fiscal year ended June 30, 1998. The APD financial data
combined into the accompanying financial statements for the years ended June 30,
1997 and 1996 represent the historical financial statements for APD for the 52
week periods ended December 28, 1997 and December 29, 1996, respectively.

Due to the periods being combined, the 26 week period ended December 28,
1997 for APD is included in the combined financial statements for both periods
ended June 30, 1998 and 1997. Revenues for the 26 week period ended December 28,
1997 totaled $8,656 and both loss before extraordinary item, of which there were
none, and net loss amounted to $94. S Corporation distributions of $220, which
occurred during the 26 week period ended December 28, 1997, were included for
both periods ended June 30, 1998 and 1997. Accordingly, the accompanying
consolidated statements of Stockholders' Equity (Deficit) for the year ended
June 30, 1998, reflects a $314 pooling adjustment to the accumulated deficit to
reverse the impact of including this historical activity twice.

4. ACQUISITION

On December 30, 1998, the Company acquired, through the acquisition of four
entities, the Cogentrix minority interests in certain investments of APD that
operate four of the Company's greenhouse operations. The purchase price of the
minority interests consisted of 1,000,000 shares of EcoScience common stock
valued at $4.00 per share, the market value at the time of the acquisition, and
a $20,600 note bearing interest at a rate of 11.25% per annum, which was
originally due and payable on March 15, 1999. On March 12, 1999, Cogentrix
agreed to extend the maturity date of the note to June 30, 1999. In connection
with the extension, the Company issued Cogentrix an additional note in the
principal amount of $1,000 which has terms similar to the original note and
becomes due on June 30, 1999. The notes are secured by all of the outstanding
capital stock of APD and the Acquired Companies. EcoScience is currently seeking
additional debt and equity financing to fulfill this obligation. If the Company
is not successful in refinancing the $21,600 aggregate principal amount of
notes, it will seek an extension of the due date or a restructuring of the terms
of the notes. There can be no assurances that EcoScience will be successful in
these efforts.

As a condition to the acquisition, EcoScience agreed to register the
1,000,000 shares of common stock for public sale. In the event the stock is not
registered by June 15, 1999,

F-15

<PAGE>

EcoScience may be required, at the election of Cogentrix, to repurchase the
1,000,000 shares from Cogentrix at a price equal to the greater of $4.00 or the
market price the day prior to the repurchase demand, as provided.

Additional consideration given in the transaction is as follows: (i)
termination of an option agreement with Cogentrix, pursuant to which APD granted
to Cogentrix certain rights to participate in future projects involving the
development, acquisition, owning of or operating by APD of any greenhouse
facility at which fruit or vegetables are to be grown, as defined; (ii)
Cogentrix assigned and contributed its note receivable of $643 along with its
accrued interest ($65), due from APD to Cogentrix Greenhouse Investment, Inc.
(one of the entities acquired) and (iii) one of the greenhouse limited
partnerships cancelled its note receivable due from Cogentrix in the amount of
$1,838, along with its accrued interest ($191). Following the cancellation and
the acquisition of the minority interests by EcoScience, Cogentrix Greenhouse
Investment, Inc. issued a promissory note payable to that greenhouse limited
partnership in the same amount. The Company has estimated $325 in transaction
costs will be incurred in connection with this acquisition.

The financial statements reflect the preliminary allocation of the $27,246
purchase price, which includes a $9,340 fair value increase of certain minority
interest assets acquired. The allocation has not been finalized due to ongoing
negotiations relating to the notes issued in connection with this acquisition
and all of the finalized appraisals regarding the fair values of the assets
acquired have not been received by the Company. Accordingly, in 1999 goodwill
associated with the acquisition may change. The excess of the purchase price
over the fair value of the net assets acquired is estimated to be approximately
$12,058 and is being amortized on a straight-line basis over 20 years (see also
Note 2h).

The $1,838 note was previously issued in March 1997 by a subsidiary of APD.
The note was unsecured, interest was payable at 6.0% per annum and principal and
interest were due on demand and it was reflected in the accompanying financial
statements as a note receivable due from related party. See Note 10 for a
description of the note payable from APD to Cogentrix also affected by this
acquisition.

The acquisition of minority interests described above was accounted for by
the purchase method of accounting for business combinations. Accordingly, the
accompanying consolidated statements of operations continued to reflect minority
interests through the December 30, 1998 closing date. The following unaudited
pro forma information presents the results of operations of the Company as if
the acquisition had taken place on July 1, 1997:

Transition period ended Year ended
January 3, 1999 June 30, 1998
----------------------- -------------
Net revenues ................... $26,194 $46,177
Net loss ....................... $(12,526) $(13,467)
Net loss per share ............. $(0.99) $(1.07)

5 ASSETS HELD FOR SALE

The Company is attempting to sell a greenhouse property that was damaged by
a tornado. Estimated costs of approximately $500 to be incurred through the
estimated sale date (May

F-16

<PAGE>

1999) were accrued by the Company. The assets, totaling $1,911, have been
disclosed as held for sale in the accompanying January 3, 1999 and June 30, 1998
Consolidated Balance Sheets.

6. OTHER CURRENT ASSETS

Other current assets consist of the following:

<TABLE>
<CAPTION>
January 3, June 30,
---------- -------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Government grant ............................. $400 $-- $--
Prepaid equipment project costs............... 322 838 653
Non-trade receivables ........................ 237 207 504
Interest receivable .......................... -- 214 93
Merger costs ................................. -- 653 --
Other ........................................ 253 499 506
------ ------ ------
$1,212 $2,411 $1,756
====== ====== ======
</TABLE>

The $653 in merger costs (see Note 3) as of June 30, 1998, along with
other merger costs incurred during the period July 1, 1998 through the effective
date of the merger for a total of approximately $1,500, were expensed in the
transition period.

7 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
January 3, June 30,
---------- --------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
Land ......................................... $973 $986 $1,102
Land improvements ............................ 2,266 1,236 1,326
Greenhouses .................................. 54,062 33,540 35,109
Greenhouse improvements ...................... 239 203 717
Greenhouse equipment ......................... 11,250 9,111 7,908
Computer and office equipment ................ 1,808 1,779 1,154
Laboratory equipment ......................... 65 65 65
Leasehold improvements ....................... 62 62 62
Construction in progress ..................... -- 9,837 --
------- ------- -------
70,725 56,819 47,443
------- ------- -------
Less accumulated depreciation and amortization (5,525) (3,683) (2,218)
------- ------- -------
$65,200 $53,136 $45,225
======= ======= =======
</TABLE>

Included in the amounts above are $435, $547 and $563 in assets held under
capital leases at January 3, 1999, June 30, 1998 and 1997, respectively.

F-17

<PAGE>

OTHER NONCURRENT ASSETS

Other noncurrent assets consist of the following:

January 3, June 30,
---------- -----------------------
1999 1998 1997
------ ------ ------
Debt issuance costs (1) ....... $2,517 $2,558 $2,520
Security deposits ............. 77 65 57
Notes receivable .............. 106 270 229
Other ......................... 28 355 420
------ ------ ------
2,728 3,248 3,226
Less accumulated amortization.. (439) (659) (157)
------ ------ ------
$2,289 $2,589 $3,069
====== ====== ======

(1) Debt issuance costs represent amounts incurred in obtaining financing for
various greenhouse construction facilities. Included in these costs are the
unamortized premiums paid for the purchase of interest rate cap agreements
(see Note 10). The premiums paid are being amortized to interest expense
over the terms of the cap agreements (5 years).

9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

In Thousands
January 3, June 30,
---------- ----------------------
1999 1998 1997
------ ------ ------
Payroll related costs ........... $ 540 $ 622 $ 309
Professional fees ............... 833 187 186
Accrued warranty costs .......... 50 72 59
Accrued inventory purchases...... 546 344 620
Customer deposits ............... 415 1,209 971
Interest ........................ 2,707 1,239 265
Rent ............................ -- 651 --
Third party grower .............. 46 42 398
Insurance ....................... 199 245 174
Utilities ....................... 401 241 33
Restructuring ................... 344 198 307
Severance ....................... 127 -- --
Repairs and maintenance ......... 257 -- --
Sales tax ....................... 201 -- --
Greenhouse costs ................ -- 797 --
Other ........................... 1,039 1,271 397
------ ------ ------
$7,705 $7,118 $3,719
====== ====== ======

F-18

<PAGE>

10. DEBT

(a) Short-term borrowings

Short-term borrowings consists of the following:

<TABLE>
<CAPTION>
January 3, June 30,
--------- ---------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Revolving line of credit(1) ........................... $ 2,254 $ 1,091 $--
VFT revolving line of credit(2) ....................... -- -- 2,000
VFIFA line of credit(3) ............................... 13,226 6,057 1,950
Note payable to Cogentrix(4) .......................... 21,600 -- --
-------- -------- --------
$ 37,080 $ 7,148 $ 3,950
======== ======== ========
</TABLE>

(b) Long-term debt

Long-term debt consists of the following:

<TABLE>
<CAPTION>
January 3, June 30,
--------- ---------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
VFT term loan credit facility(2) ...................... $-- $ 18,181 $ 18,414
VFIFA construction and term loan credit facility (3)... 46,219 26,478 16,486
PVF non-revolving line of credit(5) ................... 804 1,201 2,125
Notes payable to Cogentrix(6) ......................... 1,071 1,743 1,949
Other long-term debt .................................. 243 88 94
-------- -------- --------
48,337 47,691 39,068
-------- -------- --------
Less-current maturities ............................... (47,557) (5,043) (3,878)
-------- -------- --------
$ 780 $ 42,648 $ 35,190
======== ======== ========
</TABLE>

(1) On November 24, 1998, the lender to the biological and agricultural
products segment notified the Company of its intention to terminate the
revolving line of credit on December 24, 1998. The Company and the Bank
have agreed to four extensions to the revolving line of credit, since
November 24, 1998, which make the maturity date April 28, 1999.

The Company and the Bank have also agreed to the following modifications of
the revolving line of credit pursuant to the extensions of the maturity
date and forbearance period; (i) reduction of the $1,200 inventory based
borrowing limit by $40 each week commencing the week of January 28, 1999
and (ii) an increase to the interest rate to prime plus 5.0%. As of January
3, 1999, the Company had $747 of additional borrowing availability under
the revolving line of credit. The Company has received a term sheet from a
financial institution in the amount of $4,000 to replace this existing
revolving line of credit. Although no assurance can be given, the Company
believes that it will finalize the replacement financing arrangement in
April or May 1999.

(2) On August 14, 1998, the VFT revolving line of credit was terminated, the
Debt Service Reserve (restricted cash) was released and applied to
outstanding principal under the Term loan, the Additional Debt Service
Reserve (restricted cash) was released to VFT for

F-19

<PAGE>

working capital purposes and the remaining outstanding principal under the
Term Loan ($16,681) was assigned by the lenders to Village Farms
International Finance Association ("VFIFA"), a wholly-owned subsidiary of
the Company. VFIFA repaid the $16,681 utilizing availability under the
VFIFA construction and term loan credit facility (see below). A new
repayment schedule for the $16,681, to reflect the $1,500 paydown, was
provided to VFIFA by the Lenders. The final quarterly installment is due
and payable on March 31, 2007.

In October 1996, VFT purchased an interest rate cap ("Rate Cap") from a
bank for $307. The Rate Cap protected VFT from increases in interest rates
above 6.5% (excluding the applicable margin) for a period of five years on
$10,000 of outstanding debt. The purchase is reflected in other noncurrent
assets in the accompanying consolidated balance sheets (see Note 8) and is
being amortized to interest expense on a straight-line basis over the life
of the Rate Cap (sixty months).

(3) In June 1997, VFIFA negotiated a $60,000 combined credit facility (the
"VFIFA Facility") with a bank (the "Lender"). The combined VFIFA Facility
consists of a term loan, construction loan ($50,000, with construction
borrowings not to exceed $30,000) and revolving line of credit commitment
($10,000). The proceeds from the borrowings under the VFIFA Facility are
loaned by VFIFA to its members, which are all wholly-owned subsidiaries of
the Company. APD has guaranteed all obligations incurred under the VFIFA
Facility. Advances under the VFIFA Facility are secured by the assets of
APD, VFIFA and any underlying borrower. The maturity date of the VFIFA
Facility is July 31, 2010.

In April 1998, VFIFA completed the final advances under the construction
loans for the VFM and VFB greenhouse facilities and converted the $26,478
in aggregate construction financing into a term loan (the "VFIFA Term
Loan"). The VFIFA Term Loan is being repaid in 40 quarterly installments
which commenced on June 30, 1998. As previously discussed, the VFIFA Term
Loan borrowings were increased by $16,681, when VFIFA purchased the VFT
Term Loan on August 14, 1998. On August 31, 1998 and in connection with the
formation of VFP, the remaining construction loan availability of $3,522
was allocated for financing of the VFP greenhouse facility. On September
29, 1998, the VFIFA Facility was amended to approve APD's merger with
EcoScience and to change the availability under the revolving line of
credit and term loan from $10,000 and $50,000, respectively, to $13,319 and
$46,681, respectively. The aggregate commitment under the VFIFA Facility of
$60,000 remained unchanged.

Prior to December 1, 1998, interest rate options were selected by VFIFA on
all or any portion of the borrowings at a base rate (prime), a fixed
(LIBOR) rate or a quoted rate, as defined in the VFIFA Facility.
Originally, interest was payable monthly at the maturity of an applicable
LIBOR rate election period under all commitments outstanding under the
VFIFA Facility. Each interest rate option has an applicable margin over
such rate in determining the total interest rate associated with each
borrowing. The applicable margin for each interest rate option is based
upon the relationship between annual debt service (principal and interest
payments) and total cash flow, as defined, with cash flow as the numerator
and debt service as the denominator. As the aforementioned relationship
increases, the applicable margin for each interest rate election decreases.
At January 3,

F-20

<PAGE>

1999, the term loan borrowings were at various fixed rate elections, which
combined with the applicable margin and 4% default interest (see below),
resulted in interest rates between 11.75% and 13.23% At January 3, 1999,
the construction loan borrowings were at various fixed rate elections,
which combined with the applicable margin and 4% default interest (see
below), resulted in interest rates between 12.26% and 12.63%. The various
LIBOR rate elections were to be reset periodically during the term of the
construction and term loan borrowings. Interest on the revolving line of
credit is payable at the variable prime rate, as defined, 12.625% at
January 3, 1999.

As of January 3, 1999, $42,798, $3,421 and $13,226 of borrowings were
outstanding under the VFIFA Term Loan, construction loan commitment and
revolving line of credit commitment, respectively. The fair value of the
VFIFA Facility was $59,347 as of January 3, 1999. The value of the VFIFA
Facility at June 30, 1998 and 1997 approximated its book value. On December
1, 1998, the VFIFA Facility lenders informed VFIFA and the "Underlying
Borrowers" (including VFT, PVF, VFM, VFB, VFP and APD) through written
correspondence that they were not in compliance with certain terms and
conditions of the VFIFA Facility. The events of default included (1)
VFIFA's default of certain interest payments due (2) the Underlying
Borrower's principal and interest payment default with VFIFA and (3) APD's
default on the financial covenant contained in the guaranty to the VFIFA
Facility relating to equity to senior long-term debt. The letter of default
referred to interest defaults totaling approximately $1,000. Following the
receipt of the letter, further debt service payment defaults occurred
including additional interest defaults and principal payment defaults on
the December 31, 1998 VFIFA Term Loan installments. In December 1998, VFIFA
began to make debt service payments against the defaults identified in the
December 1, 1998 letter. The final installment of the series of payments,
totaling approximately $2,005 in the aggregate, for approximately $460, was
made on February 12, 1999, which brought VFIFA and the Underlying Borrowers
into full principal and interest compliance under the VFIFA Facility.
However, APD and the Underlying Borrowers still remain in violation of
certain financial covenants. The VFIFA Facility lenders expressly stated in
the December 1, 1998 letter of default that they were not exercising their
right under the VFIFA Facility to accelerate payment of all outstanding
amounts, however, they were reserving their right to do so. As a result,
the entire amount outstanding under the VFIFA Facility, $46,219, has been
reflected in the current portion of long-term debt in the accompanying
balance sheet, which includes $44,756 in debt that would otherwise have
been classified as long-term. The VFIFA Facility lenders have informed
VFIFA and the Underlying Borrowers that no further advances will be made
under the VFIFA Facility and all outstanding VFIFA Facility balances will,
as of December 1, 1998, bear interest at the default rate (4% in addition
to the stated rates), until the violations of the financial covenants are
cured.

APD and VFIFA will be negotiating new terms to the existing VFIFA Facility
in connection with the planned restructuring of the VFIFA Facility and the
Company's capital raising efforts that are intended to bring VFIFA and the
Underlying Borrowers into compliance with all defaults. There can be no
assurance that APD and VFIFA will be able to renegotiate more favorable
terms.

F-21

<PAGE>

In October 1997, VFIFA purchased two interest rate caps ("Rate Caps") from
a bank for $436. The Rate Caps protect VFIFA from increases in interest
rates above 6.5% for a period of five years commencing on December 31, 1997
on up to approximately $26,500 of debt under the VFIFA Facility. The
purchases are reflected in other noncurrent assets in the accompanying
consolidated balance sheets (see Note 8), and are being amortized to
interest expense on a straight-line basis over the life of the Rate Caps
(sixty months).

(4) On December 30, 1998, the Company entered into a promissory note payable to
Cogentrix in the amount of $20,600 bearing an interest rate of 11.25%,
originally payable at maturity on March 15, 1999. The financing was a
result of the acquisition discussed in Note 4. On March 12, 1999, Cogentrix
agreed to extend the maturity date of the note to June 30, 1999 for $1,000.
The notes are secured by all of the outstanding capital stock of APD and
VFM, VFT, VFB and PVF. The Company is currently seeking additional debt and
equity financing to fulfill this obligation, or alternatively will seek to
renegotiate the terms of the notes. There can be no assurance that the
Company will be successful in these efforts.

(5) In March 1997, PVF entered into a $2,200 loan agreement with a bank. As of
January 3, 1999, there were no additional borrowings available under this
loan. The loan was required to be repaid in sixty quarterly installments of
$37 of interest and principal beginning on July 1, 1997, plus a final
installment of any amount necessary to pay the indebtedness in full. The
loan bears interest at a variable rate, as defined 9.25% at January 3,
1999, subject to the lender's applicable interest rate tier. The loan is
secured by a real estate mortgage in the PVF property and a first lien on
all assets, excluding inventory and accounts receivable, as defined. As of
January 3, 1999, PVF was in violation of a financial covenant of the loan
agreement. As such the entire amount outstanding under the loan agreement,
$804 has been reflected in the current portion of long-term debt in the
accompanying January 3, 1999 balance sheet. PVF was also required to
maintain $750 of cash as replacement collateral for the portion of the PVF
greenhouse assets sold to VFB during 1997. This amount was classified as
restricted cash in the accompanying financial statements.

As discussed in Note 5, the assets of PVF are held for sale as of January
3, 1999. The proceeds from the sale will be utilized to repay the remaining
outstanding amounts under this loan agreement. PVF has already prepaid $750
and $425 of the outstanding borrowings with the replacement collateral and
insurance proceeds, respectively.

(6) In March 1997, APD borrowed $643 from Cogentrix. The note was unsecured,
interest was payable at 6.0% per annum and principal and interest were due
on demand. On December 30, 1998, in connection with the acquisition of
certain minority interests (see Note 4) by the Company, this note, and its
accrued interest, of approximately $65, became payable to one of the
entities acquired. Thus the amount is no longer payable to Cogentrix and
all related amounts to this note eliminate in consolidation beginning on
December 30, 1998. In March, 1997, APD borrowed $1,375 from Cogentrix. The
note matures on June 2, 2002 with quarterly principal and interest payments
of $69. Borrowings under the note bear interest at 6.0%.

F-22

<PAGE>

The aggregate maturities of debt as of January 3, 1999 are as follows:

1999 $47,557
2000 321
2001 302
2002 157
-------
$48,337
=======

11. LEASES

(a) Capital Leases

The Company leases certain equipment under capital leases. Future minimum
lease payments are as follows:

1999 $67
2000 64
2001 64
2002 49
2003 30
Thereafter 255
-------
Total minimum lease payments 529
Less amount representing interest (149)
-------
380
Less current maturities (42)
-------
$338
=======

(b) Operating Leases

The future minimum lease payments as of January 3, 1999 are as follows:

1999 $3,986
2000 3,976
2001 3,944
2002 3,911
2003 3,944
Thereafter 15,301
-------
$35,062
=======

The above amounts reflect future minimum lease payments under an agreement
executed on March 23, 1999, for the Company's new corporate office and warehouse
space (approximately 20,000 square feet). The expected commencement date of the
ten year lease is September 1, 1999.

Rent expense under the Company's various lease agreements totaled
approximately $2,114, $4,061, $1,830 and $2,262 for the transition period ended
January 3, 1999 and the years ended June 30, 1998, 1997 and 1996, respectively.

F-23

<PAGE>

Included in noncurrent liabilities in the accompanying consolidated balance
sheet is $876, $868 and $860 at January 3, 1999, June 30, 1998 and June 30,
1997, respectively, related to the effect of accounting for the scheduled rent
increases on a straight-line basis over the applicable lease terms.

12. STOCKHOLDERS' EQUITY (DEFICIT)

(a) Amendment of Certificate of Incorporation for Reverse Stock Split and
Increase in Authorized Capital Stock

On September 30, 1998 the Company's certificate of incorporation was
amended to effect a one for five reverse stock split of the Company's common
stock, to increase the number of authorized shares of the Company's common stock
from 25,000,000 shares to 100,000,000 shares and to increase the number of
authorized preferred stock from 1,000,000 shares to 10,000,000 shares. The
accompanying financial statements give retroactive effect to the one for five
reverse stock split for all periods presented.

(b) Private Placement

In September 1996, the Company sold 208,000 shares of common stock in a
private placement. Net proceeds realized from the equity offering totaled $1,139
after fees and expenses totaling $161. In connection with the offering, the
Company also issued a warrant to purchase 31,200 shares of its common stock at
$10.00 per share to the placement agent.

The Company has issued warrants to purchase shares of its common stock to
certain stockholders, directors and consultants of the Company. Outstanding
warrants expire through 2002. The following table summarizes warrant activity
for the three years ended June 30, 1998 and the transition period ended January
3, 1999:

<TABLE>
<CAPTION>
Weighted Average
Number of Warrants Price Per Share Range Exercise Price
------------------ --------------------- --------------
<S> <C> <C> <C> <C>
Outstanding at June 30, 1995.............. 72,009 $ 1.88 - $55.00 $33.01
Granted................................ 50,000 6.88 - 15.00 10.76
Cancelled.............................. (30,217) 1.88 - 47.75 20.35
------- ------ ------ ------

Outstanding at June 30, 1996.............. 91,792 6.88 - $55.00 25.06
Granted................................ 56,311 5.00 - 18.75 11.51
Cancelled.............................. (15,792) 30.00 - 55.00 51.51
------- ------ ------ ------

Outstanding at June 30, 1997.............. 132,311 5.00 - 48.75 16.18
Granted................................ -- -- - -- --
Cancelled.............................. (8,000) 34.38 - 35.00 34.53
------- ------ ------ ------

Outstanding at June 30, 1998.............. 124,311 5.00 - 48.75 $15.00
======= ====== ====== ======
Outstanding at January 3, 1999............ 124,311 5.00 - 48.75 $15.00
======= ====== ====== ======
Exercisable at January 3, 1999............ 124,311 $ 5.00 - $48.75 $15.00
======= ====== ====== ======
</TABLE>

F-24
<PAGE>

(d) Stock Option Plans

In December 1998, the Board of Directors approved a stock option plan (the
"1999 Plan") to grant options to acquire up to 1,800,000 shares of common stock,
less the number of option shares issued under the Company's 1991 stock option
plan (1991 plan), outstanding to employees and consultants. Options granted
under the 1999 Plan vest over various periods and expire no later than 10 years
from the date of grant. Options are to be granted at the fair value of the
Company's common stock on the date of grant. The Board of Directors has agreed
not to issue future options under the 1991 plan.

Option activity for the three years ended June 30, 1998 and the transition
period ended January 3, 1999, is summarized as follows:

<TABLE>
<CAPTION>
Weighted Average
Number of Options Price Per Share Range Exercise Price
----------------- --------------------- --------------
<S> <C> <C> <C> <C>
Outstanding at June 30, 1995.............. 92,207 $1.88 - $56.88 $22.41
Granted................................ 110,100 2.81 - 8.13 4.87
Exercised.............................. (333) 2.25 2.25
Cancelled.............................. (34,771) 3.00 - 56.88 22.67
------- ----- ------ ------

Outstanding at June 30, 1996.............. 167,203 1.88 - 56.88 10.84
Granted................................ 68,036 4.69 - 12.50 6.07
Exercised.............................. (3,800) 4.38 4.38
Cancelled.............................. (54,363) 1.88 - 56.88 19.93
------- ----- ------ ------

Outstanding at June 30, 1997.............. 177,076 2.81 - 35.00 6.35
Granted................................ 6,680 4.06 - 8.13 6.51
Exercised.............................. (17,456) 4.38 5.00 4.80
Cancelled.............................. (9,120) 4.38 - 10.63 5.30
------- ----- ------ ------

Outstanding at June 30, 1998.............. 157,180 $2.81 - $35.00 6.60
======= ===== ====== ======
Exercised.............................. (1,100) 4.38 - 4.38 4.38
Cancelled.............................. (4,880) 4.38 - 12.50 2.13
------- ----- ------ ------
Outstanding at January 3, 1999............ 151,200 $2.81 - $35.00 $6.57
======= ===== ====== ======
Exercisable at January 3, 1999............ 134,898 $2.81 - $35.00 $6.55
======= ===== ====== ======
</TABLE>

All stock options and warrants granted by the Company were granted at
exercise prices not less than the fair market value of the Company's common
stock on the date of grant.

The Company accounts for its common stock purchase warrants and options
plans based upon the "intrinsic value" method set forth in APB 25. Had
compensation costs for the Company's stock option plans been determined
consistent with SFAS 123, the Company's pro-forma net loss and net loss per
share for the transition period ended January 3, 1999 and the fiscal years ended
June 30, 1998, 1997 and 1996 would have been as follows:

F-25

<PAGE>

<TABLE>
<CAPTION>
Transition
Period Ended
January 3, Years ended June 30,
------------ -----------------------------------------
1999 1998 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net income (loss) .............. (8,574) ($4,462) $29 ($13)
------ ------ ------ ------

Net loss per share, basic and
diluted ..................... ($0.74) ($0.38) ($0.00) ($0.00)
------ ------ ------ ------
</TABLE>

Because SFAS 123 has not been applied to warrants and options granted prior
to July 1, 1995, the resulting pro-forma compensation cost may not be
representative of that to be expected in future periods.

Under SFAS 123, the fair value of each stock option grant is estimated on
the date of grant using the Black-Scholes option pricing model with the weighted
average assumptions for the fiscal years ended June 30, 1998, 1997, and 1996,
respectively as follows: (i) risk free interest rate of 6% for all years; (ii)
expected life of approximately eight years for all years; and (iii) expected
volatility of 67%, 70%, and 70% for the fiscal years ended June 30, 1998, 1997,
and 1996, respectively. The weighted average fair value of the options granted
during the fiscal years ended June 30, 1998, 1997, and 1996 was $0.85, $0.86,
and $0.69, respectively. No options were granted during the transition period
ended January 3, 1999.

13. INCOME TAXES

As of January 3, 1999, the Company had available net operating loss
carryforwards of approximately $10,800 and research and development tax credit
carryforwards of approximately $900 to reduce future federal income taxes, if
any. These carryforwards expire through 2013 and are subject to review and
possible adjustment by the Internal Revenue Service. The Tax Reform Act of 1986
limits a Company's ability to utilize certain net operating loss and tax credit
carryforwards in the event of a cumulative change in ownership in excess of 50%,
as defined. The Company has recently completed a merger with APD which has
resulted in a change in ownership in excess of 50%, as defined. Therefore,
utilization of net operating loss and tax credit carryforwards will be limited
due to ownership changes. As discussed in Note 2, APD was taxed as an S
Corporation prior to the merger on September 30, 1998 and as such no Federal
income taxes were paid by APD. Therefore, APD recorded no deferred tax assets or
liabilities prior to September 30, 1998. State deferred income taxes were not
material.

The components of the net deferred tax amount recognized in the
accompanying consolidated balance sheets are set forth below:

January 3, June 30,
--------- ----------------------
1999 1998 1997
------ ------- -------
Deferred tax assets................ $5,400 $16,500 $16,000
Valuation allowance ............... (5,400) (16,500) (16,000)
------ ------- -------
$ -- $ -- $ --
====== ======= =======

F-26

<PAGE>

The approximate tax effect of each type of temporary difference and
carryforward before allocation of the valuation allowance is summarized as
follows:

January 3, June 30,
--------- --------------------
1999 1998 1997
------ ------- -------
Net operating losses .................... $4,300 $15,400 $15,000
Other temporary differences ............. 200 200 100
Research and development credits......... 900 900 900
------ ------- -------
$5,400 $16,500 $16,000
====== ======= =======

Due to the uncertainty surrounding the timing of realizing the potential
benefits of its favorable tax attributes in future income tax returns, the
Company has recorded a valuation allowance against its otherwise recognizable
deferred tax assets.

A reconciliation of the provision for (benefit from) income taxes for the
transition period ended January 3, 1999 and the fiscal year ended June 30, 1998,
1997 and 1996 with the statutory federal income tax rate follows:

<TABLE>
<CAPTION>
Transition
Period Ended
January 3, Years Ended June 30,
------------ ----------------------------------------
1999 1998 1997 1996
----- ----- ---- -----
<S> <C> <C> <C> <C>
(Benefit) provision at nominal rate ........................... (34.0%) (34.0%) 34.0% (34.0%)
Increases (reductions) in taxes resulting from:
Net operating loss carryforward ......................... -- -- (34.0) --
Valuation allowance ..................................... 34.0 34.0 -- 34.0
Foreign income taxes .................................... -- -- 10.8 22.0
State income taxes ...................................... 0.1 0.1 4.2 69.3
----- ----- ---- -----
Provision for income taxes-% .................................. 0.1% 0.1% 15.0% 91.3%
----- ----- ---- -----
Provision for income taxes-$ .................................. $67 $21 $78 $116
----- ----- ---- -----
</TABLE>

The provision for (benefit from) income taxes for the transition period
ended January 3, 1999 and the fiscal year ended June 30, 1998, 1997 and 1996 is
primarily composed of foreign and state income taxes.

14. SALES, LICENSE AND DEVELOPMENT AGREEMENTS

AGRO has a distribution agreement with an unrelated company for a term of
three years ending in December 2000, with automatic one-year extensions unless
either party elects to terminate the agreement. The agreement grants AGRO the
exclusive right to sell the unrelated company's product in the United States,
Canada, Mexico, and the Caribbean. The agreement requires AGRO to maintain
minimum annual sales which, if not met, would allow the unrelated company to
modify the exclusivity of the agreement. The sale of products under this
agreement accounted for 18%, 17%, 20% and 25% of the Company's total net
revenues for the transition period ended January 3, 1999 and the fiscal years
ended June 30, 1998, 1997 and 1996, respectively. Although there are a limited
number of sources of the particular growing medium products that are sold under
this distribution agreement, the Company's management believes

F-27

<PAGE>

that other suppliers could provide similar products on comparable terms. A
change in suppliers, however, could cause a delay in filling orders as well as a
possible loss of sales, which would affect operating results adversely.

In August 1995, AGRO entered into a distribution agreement with an
unrelated company, which granted AGRO the exclusive right to sell the unrelated
company's sorting, grading and packing products and equipment in the United
States, Canada, Mexico and the Caribbean through September 1999. The sale of
products under this agreement accounted for 14%, 8%, 12% and 11% of total net
revenues for the transition period ended January 3, 1999 and the fiscal years
ended June 30, 1998, 1997 and 1996, respectively.

On February 1, 1999, the Company's postharvest equipment division of Agro
Dynamics, Inc., which was the exclusive distributor in North America for Aweta
B.V.'s sorting and grading equipment, was sold to Autoline, Inc.

15. SEGMENT AND GEOGRAPHIC INFORMATION

The Company has two reportable segments: greenhouse tomatoes and biological
and agricultural products. The greenhouse tomatoes segment operates seven
greenhouse facilities in the United States, representing approximately 190 acres
of growing capacity. Through these facilities, the Company produces, harvests,
packages and distributes premium vine-ripened tomatoes. The tomatoes are
marketed under the Village Farms(R) brandname and sold to retail supermarket
chains, dedicated wholesalers, distributors and food service clients throughout
the United States.

The biological and agricultural products segment distributes various
products under written distribution agreements and relations with specific
vendors. The Company's biological and agricultural products include (1) growing
medium products and computerized environmental and irrigational control systems;
(2) postharvest coating products and (3) biological pest control products.

The accounting policies of the segments described above are the same as
those described in the summary of significant accounting policies. The Company's
reportable segments are strategic business units that offer different products.
The Company is not dependent on any single customer for its net revenues.

F-28

<PAGE>

<TABLE>
<CAPTION>
Transition
period ended
January 3, Year ended June 30,
------------ -------------------------------------------
Company data by operating segment (1) 1999 1998 1997 1996
- ------------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues
Greenhouse tomatoes ............................... $ 15,453 $ 28,871 $ 21,963 $ 11,090
Biological and agricultural products .............. $ 10,741 $ 17,306 $ 17,899 $ 13,578
-------- -------- -------- --------
Total ............................................. $ 26,194 $ 46,177 $ 39,862 $ 24,668
======== ======== ======== ========
Total Assets
Greenhouse tomatoes ............................... $ 93,539 $ 69,971 $ 62,072 $ 26,279
Biological and agricultural products .............. $ 8,325 $ 9,537 $ 8,520 $ 9,970
-------- -------- -------- --------
Total ............................................. $101,864 $ 79,508 $ 70,592 $ 36,249
======== ======== ======== ========
Capital Expenditures
Greenhouse tomatoes ............................... $ 4,568 $ 25,554 $ 28,154 $ 17,372
Biological and agricultural products .............. 64 545 90 127
-------- -------- -------- --------
Total ............................................. $ 4,632 $ 26,099 $ 28,244 $ 17,499
======== ======== ======== ========
Operating (loss) income
Greenhouse tomatoes ............................... ($ 6,272) ($ 5,276) $ 295 ($ 541)
Biological and agricultural products .............. (1,317) (1,195) 278 744
-------- -------- -------- --------
Total ............................................. ($ 7,589) ($ 6,471) $ 573 $ 203
======== ======== ======== ========
Depreciation and amortization expense
Greenhouse tomatoes ............................... $ 1,979 $ 2,891 $ 1,504 $ 283
Biological and agricultural products .............. 167 332 402 580
-------- -------- -------- --------
Total ............................................. $ 2,146 $ 3,223 $ 1,906 $ 863
======== ======== ======== ========
Company data by geographic segments (2)
Net revenues
United States ................................ $ 23,135 $ 39,243 $ 34,219 $ 20,247
Canada ....................................... 3,059 6,934 5,643 4,421
-------- -------- -------- --------
Total ............................................. $ 26,194 $ 46,177 $ 39,862 $ 24,668
======== ======== ======== ========
</TABLE>

(1) All research and development expenses and restructuring reversals were a
result from operations of the biological and agricultural products segment.

(2) The long-lived assets in Canada are immaterial for all periods presented.

F-29

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the estimated expenses, all of which are being
paid by the Company, in connection with this offering.

Registration fees................................................. $ 767
Legal fees and expenses........................................... 50,000
Accounting fees and expenses...................................... 50,000
Miscellaneous..................................................... 5,000
--------
Total $105,767
========

Item 14. Indemnification of Directors and Officers.

Delaware General Corporation Law, Section 102(b)(7), authorizes a corporation to
eliminate or limit personal liability of members of its board of directors for
violations of a director's fiduciary duty of care. Such elimination or
limitation of personal liability is not permitted, however, where there has been
a breach of the duty of loyalty, failure to act in good faith, intentional
misconduct or knowing violation of law, or payment of a dividend or approval of
a stock repurchase which was deemed illegal or where a director obtains an
improper personal benefit.

The Company's Restated Certificate of Incorporation provides that a director of
the Company shall, to the maximum extent permitted by Section 102(b)(7) or any
successor provision or provisions, have no personal liability to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director.

Delaware General Corporation Law, Section 145, permits a corporation organized
under Delaware law to indemnify directors and officers with respect to any
matter in which the director or officer acted in good faith and in a manner he
reasonably believed to be not opposed to the best interests of the corporation
and, with respect to any criminal action, had no reasonable cause to believe his
conduct was unlawful.

The Company's Restated Certificate of Incorporation provides that any director
or officer of the Company involved in any action, suit or proceeding, the basis
of which is alleged action or inaction by such director or officer while he was
acting in an official capacity as a director or officer of the Company or as a
director, trustee, officer, employee or agent of another entity at the request
of the Company, shall be indemnified and held harmless by the Company to the
fullest extent permitted by Section 145 against all expense, liability and loss
reasonably incurred or suffered by such person in connection therewith. Such
indemnification as to such alleged action or inaction continues as to an
indemnitee who has after such alleged action or inaction ceased to be a director
or officer of the Company or a director, officer, trustee, employee or agent of
such other entity and inures to the benefit of the indemnitee's heirs, executors
and administrators. The Restated Certificate of Incorporation also provides that
the right to

II-1

<PAGE>

indemnification shall be a contract right which shall not be affected adversely
as to any indemnitee by any amendment to the Restated Certificate of
Incorporation with respect to any action or inaction occurring prior to such
amendment and shall include, unless otherwise restricted or prohibited by law or
the Company's By-laws, the right to be paid by the Company for expenses incurred
in defending any such proceeding in advance of its final disposition. The
Company's Board of Directors may also grant these indemnification rights to any
employee or agent of the Company or to any person who is or was a director,
officer, employee or agent of the Company's affiliates, predecessors or
subsidiaries.

The Registration Rights Agreement dated as of December 30, 1998 among the
Company and Cogentrix Delaware Holdings, Inc. ("CDHI") provides that the CDHI
shall indemnify the Company and each of its directors and officers against all
claims, losses, damages and liabilities arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in a
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state a material fact required to be stated or
necessary to make the statements therein not misleading. CDHI shall reimburse
the Company and such directors and officers for any legal or other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action to the extent that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such Registration Statement in reliance upon and in conformity with
written information furnished to the Company by the CDHI. The Registration
Rights Agreement dated as of September 30, 1998 between the Company and Mr.
Montanti contains similar indemnification provisions.

Item 15. Recent Sales of Unregistered Securities.

On September 30, the Company issued an aggregate of 9,520,487 shares of Common
Stock (after giving effect to a one-for-five reverse split of the Common Stock
effective on the same date) to the shareholders of Agro Power Development, Inc.,
a New York corporation ("APDNY"), pursuant to the Amended and Restated Agreement
and Plan of Merger dated as of July 31, 1998, among the Company, Agro
Acquisition Corp., APDNY and certain stockholders of APDNY. The shares were
issued in reliance upon Section 4(2) of the Securities Act of 1933, as amended.

On December 31, 1998, the Company issued 1,000,000 shares of Common Stock to
CDHI pursuant to a Stock Purchase Agreement dated as of December 7, 1998 which
provided for the acquisition by the Company of the outstanding capital stock of
certain entities that are partners with certain subsidiaries of the Company in
limited partnerships formed to operate certain greenhouse operations. The shares
of Common Stock issued to CDHI were issued in reliance upon the exemption
provided by Section 4(2) of the Securities Act of 1933, as amended.

II-2

<PAGE>

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits

Exhibit
Number Exhibit Description
- ------- -----------------------------------------------------------------------
2.1 Amended and Restated Agreement and Plan of Merger dated as of July 31,
1998 among EcoScience Corporation, Agro Acquisition Corporation and
Agro Power Development, Inc. [incorporated herein by reference to the
Registrant's Proxy Statement dated August 10, 1998 - Appendix A].

3.1 Restated Certificate of Incorporation of the Registrant dated June 29,
1988 [incorporated by reference to Exhibit 3.1 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30, 1992].

3.2 By-Laws of the Registrant [incorporated by reference to Exhibit 3.2 to
the Registrant's Registration Statement on Form S-1, Registration
Statement No. 33-44664].

3.3 Certificate of Amendment of Restated Certificate of Incorporation of
the Registrant dated September 28, 1998. [incorporated by reference to
Exhibit 10.60 to the Registrant's September 30, 1998 quarterly report
on form 10-Q].

4.1 Specimen Common Stock Certificate of the Registrant [incorporated by
reference to Exhibit 4.1 to the Registrant's Registration Statement on
Form S-1, Registration Statement No. 33-44664].

4.2 Registration Rights Agreement between EcoScience Corporation and the
Shareholders identified on Schedule I thereto dated September 30, 1998.
[incorporated by reference to Exhibit 10.60 to the Registrant's
September 30, 1998 quarterly report on form 10-Q].

5.1 Opinion of Giordano, Halleran & Ciesla, a Professional Corporation,
including consent of such counsel (filed herewith).

10.1* Registrant's 1991 Stock Option Plan, As Amended [incorporated by
reference to Exhibit 10.1 to the Registrant's Registration Statement on
Form S-1, Registration Statement No. 33-44664].

10.2* Registrant's 1999 Stock Option Plan. [incorporated by reference to
Exhibit 10.2 to the Registrant's Annual Report on Form 10-K for the
transition period ended January 3, 1999.]

10.3* Form of Non-Statutory Stock Option Agreement [incorporated by reference
to Exhibit 10.3 to the Registrant's Registration Statement on Form S-1,
Registration Statement No. 33-44664].

II-3
<PAGE>

10.4 Common Stock Purchase Warrant between the Registrant and Copley
Partners 2, L.P., dated December 6, 1989, as amended [incorporated by
reference to Exhibit 10.8 to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1993].

10.7 Series B Preferred Stock Purchase Agreement between the Registrant and
the other parties named therein, dated July 30, 1991, and amended on
October 31, 1991 [incorporated by reference to Exhibit 10.7 to the
Registrant's Registration Statement on Form S-1, Registration Statement
No. 33-44664].

10.8 Common Stock Warrant between the Registrant and E. Andrews Grinstead
III, dated May 22, 1991, as amended [incorporated by reference to
Exhibit 10.9 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended June 30, 1993].

10.10 Common Stock Purchase Warrant between the Registrant and E. Andrews
Grinstead, III, dated June 7, 1991, as amended [incorporated by
reference to Exhibit 10.11 to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1993].

10.15 Assignment of Patent Rights, dated November 7, 1991 [incorporated by
reference to Exhibit 10.20 to the Registrant's Registration Statement
on Form S-1, Registration Statement No. 33-44664].

10.20 Cooperative Research and Development Agreement between the Registrant
and the United States Department of Agriculture, dated July 10, 1990
[incorporated by reference to Exhibit 10.26 to the Registrant's
Registration Statement on Form S-1, Registration Statement No.
33-44664].

10.24 Agreement between Agro Dynamics, Inc. and Grodania A/S [incorporated by
reference to Exhibit 10.35 to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1993]. **

10.26 Form of Warrant issued to Directors of the Registrant [incorporated by
reference to Exhibit 10.38 to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1993].

10.49 Form of Stock Purchase Agreement dated September 25, 1996, by and among
EcoScience Corporation, Taglich Brothers, D'Amadeo, Wagner & Company,
Incorporated, and other entities [Incorporated by reference to Exhibit
10.49 to Registrant's Annual Report on Form 10-K for fiscal year ended
June 30, 1996].

10.50 Loan and Security Agreement dated as of April 28, 1997 by and among the
Registrant, Agro Dynamics, Inc., Agro Dynamics Canada Inc. and
EcoScience Produce Systems Corp. and Silicon Valley Bank. [incorporated
by reference to Exhibit 10.50 to the Registrant's Quarterly Report on
Form 10-Q for the Quarter Ended March 31, 1997].

II-4

<PAGE>

10.51 Schedule to Loan and Security Agreement dated as of April 28, 1997 by
among the Registrant, Agro Dynamics, Inc., Agro Dynamics Canada Inc.
and EcoScience Produce Systems Corp. and Silicon Valley Bank.
[incorporated by reference to Exhibit 10.51 to the Registrant's
Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1997].

10.52 Continuing Guaranty by each of the Registrant, EcoScience Produce
Systems Corp. and Agro Dynamics, Inc. guaranteeing the obligations of
the Registrant, EcoScience Produce Systems Corp., Agro Dynamics, Inc.
and Agro Dynamics Canada Inc. in favor of Silicon Valley Bank.
[incorporated by reference to Exhibit 10.52 to the Registrant's
Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1997].

10.53 Continuing Guarantee by Agro Dynamics Canada Inc. guaranteeing the
obligations of the Registrant in favor of Silicon Valley Bank.
[incorporated by reference to Exhibit 10.53 to the Registrant's
Quarterly Report on Form 10-Q for the Quarter Ended March 31, 1997].

10.54 Collateral Assignment, Patent Mortgage and Security Agreement by and
between EcoScience Corporation (Assignor) and Silicon Valley Bank
(Assignee). [incorporated by reference to Exhibit 10.54 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended March
31, 1997].

10.55 Collateral Assignment, Patent Mortgage and Security Agreement by and
between EcoScience Produce Systems Corp. (Assignor) and Silicon Valley
Bank (Assignee). [incorporated by reference to Exhibit 10.55 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended March
31, 1997].

10.56 Collateral Assignment, Patent Mortgage and Security Agreement by and
between Agro Dynamics, Inc. (Assignor) and Silicon Valley Bank
(Assignee). [incorporated by reference to Exhibit 10.56 to the
Registrant's Quarterly Report on Form 10-Q for the Quarter Ended March
31, 1997].

10.57 Agreement between Agro Dynamics, Inc. and Grodania A/S, dated September
29, 1997. [incorporated by reference to Exhibit 10.57 to the
Registrant's Form 10-Q for the Quarter Ended September 30, 1997]. **

10.59 Amendment to Loan Documents dated September 25, 1998, by and among the
Registrant, EcoScience Produce Systems Corp., Agro Dynamics, Inc., Agro
Dynamics Canada Inc. and Silicon Valley Bank. [incorporated by
reference to Exhibit 10.59 to the Registrant's Annual Report on Form
10-K for the fiscal year ended June 30, 1998].

10.61 Ground Lease dated September 4, 1997 between the Buffalo Enterprise
Development Corporation and Agro Power Development, Inc. [incorporated
by reference to Exhibit 10.61 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

II-5

<PAGE>

10.62 Commercial Greenhouse Lease and Operating Agreement dated July 22, 1992
between Oxbow Power of North Tonawanda, New York, Inc. and Village
Farms of Wheatfield, Inc. [incorporated by reference to Exhibit 10.62
to the Registrant's September 30, 1998 quarterly report on form 10-Q]

10.63 Operating Agreement dated as of November 14, 1997 between Greenhost,
Inc. and Village Farms of Virginia, Inc for Birchwood, Virginia
greenhouse facility. [incorporated by reference to Exhibit 10.63 to the
Registrant's September 30, 1998 quarterly report on form 10-Q]

10.64 Lease Agreement dated as of September 21, 1993 between Cogentrix of
Pennsylvania, Inc. and Keystone Village Farms, Inc. for Ringgold,
Pennsylvania greenhouse facility. [incorporated by reference to Exhibit
10.64 to the Registrant's September 30, 1998 quarterly report on form
10-Q] **

10.65 Amended Ground Lease effective March 14, 1997 between the Presidio
County Commissioners Court and Agro Power Development, Inc.
[incorporated by reference to Exhibit 10.65 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

10.66 Lease Agreement dated as of January 29, 1998 between Ripe Touch
Greenhouses, Inc., and Village Farms of Colorado, Inc. [incorporated by
reference to Exhibit 10.66 to the Registrant's September 30, 1998
quarterly report on form 10-Q] **

10.71 Agreement of Limited Partnership of Village Farms of Marfa, L.P., dated
as of June 4, 1997. [incorporated by reference to Exhibit 10.71 to the
Registrant's September 30, 1998 quarterly report on form 10-Q] **

10.72 Management, Operating and Maintenance Contract between Village Farms of
Marfa and Village Farms of Delaware, LLC, dated June 4, 1997.
[incorporated by reference to Exhibit 10.72 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

10.73 Marketing and Sales Agreement between Village Farms of Marfa, L.P. and
Village Farms of Delaware dated June 4, 1997. [incorporated by
reference to Exhibit 10.73 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.74 Amended and Restated Agreement of Limited Partnership of Village Farms
of Buffalo, L.P., dated as of September 4, 1997. [incorporated by
reference to Exhibit 10.74 to the Registrant's September 30, 1998
quarterly report on form 10-Q] **

10.75 Management, Operating and Maintenance Contract between Village Farms of
Delaware and Village Farms of Buffalo, dated September 4, 1997 and
amendment thereto dated as of April 17, 1998. [incorporated by
reference to Exhibit 10.75 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

II-6

<PAGE>

10.76 Marketing and Sales Agreement between Village Farms of Delaware and
Village Farms of Buffalo, L.P. dated September 4, 1997. [incorporated
by reference to Exhibit 10.76 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.78 Marketing Agreement by and between Foster Farms, Inc. and Agro Power
Development, Inc. dated January 1, 1995. [incorporated by reference to
Exhibit 10.78 to the Registrant's September 30, 1998 quarterly report
on form 10-Q] **

10.79 Credit Agreement (Line of Credit Facility) by and between CoBank, ACB,
as Agent and as a Syndication Party and Village Farms International
Financing Association dated as of June 24, 1997 [incorporated by
reference to Exhibit 10.79 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.80 Promissory Note (Line of Credit Facility) of Village Farms
International Financing Association dated June 24, 1997 in principal
amount of $10,000,000. [incorporated by reference to Exhibit 10.80 to
the Registrant's September 30, 1998 quarterly report on form 10-Q]

10.81 First Amendment to Credit Agreement (Line of Credit Facility)
[Regarding EcoScience Merger] by and between Village Farms
International Finance Association and CoBank, ACB dated September 29,
1998. [incorporated by reference to Exhibit 10.81 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

10.82 Second Amendment to Credit Agreement (Line of Credit Facility) by and
between CoBank, Village Farms International Finance Association and
Agro Power Development Inc. dated September 29, 1998. [incorporated by
reference to Exhibit 10.82 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.83 Line of Credit Security Agreement by and between Village Farms
International Finance Association, and CoBank, ACB dated June 24, 1997
with a line of credit of $10,000,000. [incorporated by reference to
Exhibit 10.83 to the Registrant's September 30, 1998 quarterly report
on form 10-Q]

10.84 Credit Agreement (Construction Loan Funding) by and between CoBank, ACB
as Agent and Syndicated Party and Village Farms International Financing
Association dated as of June 24, 1997. [incorporated by reference to
Exhibit 10.84 to the Registrant's September 30, 1998 quarterly report
on form 10-Q]

10.85 First Amendment to Credit Agreement (Construction Loan Funding)
[Regarding EcoScience Merger] by and between Village Farms
International Finance Association and CoBank, ACB dated September 29,
1998. [incorporated by reference to Exhibit 10.85 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

II-7

<PAGE>

10.86 Promissory note (Construction Loan Funding) of Village Farms
International Financing Association dated June 24, 1997 in principal
amount of $30,000,000. [incorporated by reference to Exhibit 10.86 to
the Registrant's September 30, 1998 quarterly report on form 10-Q]

10.87 Construction Loan Security Agreement by and between Village Farms
International Finance Association, and CoBank, ACB dated June 24, 1997.
[incorporated by reference to Exhibit 10.87 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

10.88 Credit Agreement (Term Loan Funding) by and between CoBank, ACB as
Agent and Syndication Party and Village Farms International Financing
Association dated as of June 24, 1997. [incorporated by reference to
Exhibit 10.88 to the Registrant's September 30, 1998 quarterly report
on form 10-Q]

10.89 Promissory Note (Term Loan Funding) of Village Farms International
Financing Association dated June 24, 1997 in principal amount of
$50,000,000. [incorporated by reference to Exhibit 10.89 to the
Registrant's September 30, 1998 quarterly report on form 10-Q]

10.90 Guaranty of Agro Power Development, Inc. dated as of June 24, 1997 to
Construction Lenders, Term Lenders and Line of Credit Lenders.
[incorporated by reference to Exhibit 10.90 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

10.91 First Amendment to Credit Agreement (Term Loan Funding) [Regarding
EcoScience Merger] by and between Village Farms International Finance
Association and CoBank, ACB dated September 29, 1998. [incorporated by
reference to Exhibit 10.91 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.92 Second Amendment to Credit Agreement (Term Loan Funding) by and between
CoBank, Village Farms International Finance Association and Agro Power
Development Inc. dated September 29, 1998. [incorporated by reference
to Exhibit 10.92 to the Registrant's September 30, 1998 quarterly
report on form 10-Q]

10.93 Term Loan Security Agreement by and between Village Farms International
Finance Association, and CoBank, ACB dated June 24, 1997. [incorporated
by reference to Exhibit 10.93 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.94 Amendment to Loan Documents by and between CoBank, Village Farms
International Finance Association and Agro Power Development, Inc.
dated September 29, 1998. [incorporated by reference to Exhibit 10.94
to the Registrant's September 30, 1998 quarterly report on form 10-Q]

II-8

<PAGE>

10.95 First Amendment to Guarantor Security and Pledge Agreement [Regarding
EcoScience Merger] by and between Agro Power Development, Inc. and
CoBank, ACB dated September 29, 1998. [incorporated by reference to
Exhibit 10.95 to the Registrant's September 30, 1998 quarterly report
on form 10-Q]

10.96 First Amendment to Guaranty of Agro Power Development, Inc. [Regarding
EcoScience Merger] by and between Agro Power Development, Inc. and The
Lender Group dated September 29, 1998. [incorporated by reference to
Exhibit 10.96 to the Registrant's September 30, 1998 quarterly report
on form 10-Q]

10.99 Agreement of Limited Partnership of Village Farms of Presidio, L.P.
dated as of August 31, 1998. [incorporated by reference to Exhibit
10.99 to the Registrant's September 30, 1998 quarterly report on form
10-Q]

10.100 Commercial Greenhouse Design and Construction Contract between Agro
Power Development and Dalsem Kassenboyw B.V. dated as of August 31,
1998. [incorporated by reference to Exhibit 10.100 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

10.101 Commercial Design and Construction Contract between Village Farms of
Presidio, L.P. and Agro Power Development, Inc. dated as of August 31,
1998. [incorporated by reference to Exhibit 10.101 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

10.102 Commercial Packing House Design and Construction Contract dated July
10, 1998 between Agro Power Development, Inc. and NC Sturgeon, Inc.
[incorporated by reference to Exhibit 10.102 to the Registrant's
September 30, 1998 quarterly report on form 10-Q]

10.103 Marketing and Sales Agreement between Village Farms of Presidio, L.P.
and Village Farms, Inc. dated as of August 31, 1998. [incorporated by
reference to Exhibit 10.103 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.104 Management, Operation and Maintenance Contract dated as of August 31,
1998 among New Amsterdam Joint Venture, L.L.C. and Village Farms of
Presidio, L.P. incorporated by reference to Exhibit 10.104 to the
Registrant's September 30, 1998 quarterly report on form 10-Q]

10.105 $1,375,000 Promissory Note and Security Agreement dated March 10, 1997
among Agro Power Development, Inc., Village Farms of Delaware LLC,
Village Farms LLC and Cogentrix Delaware Holdings, Inc. [incorporated
by reference to Exhibit 10.105 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.106 Loan Agreement by and between Pocono Village and First Pioneer Farm
Credit, ACA, dated March 5, 1997. [incorporated by reference to Exhibit
10.106 to the Registrant's September 30, 1998 quarterly report on form
10-Q]

II-9

<PAGE>

10.107 Installment Promissory Note for $2,200,000.00 from Pocono Village to
First Pioneer Farm Credit, ACA, dated March 10, 1997. [incorporated by
reference to Exhibit 10.107 to the Registrant's September 30, 1998
quarterly report on form 10-Q]

10.108 Construction Loan Agreement between Pocono Village and First Pioneer
Farm Credit, dated March 10, 1997. [incorporated by reference to
Exhibit 10.108 to the Registrant's September 30, 1998 quarterly report
on form 10-Q]

10.109 Security Agreement between Pocono Village and First Pioneer Farm
Credit, ACA, dated March 10, 1997. [incorporated by reference to
Exhibit 10.109 to the Registrant's September 30, 1998 quarterly report
on form 10-Q]

10.112 Stock Purchase Agreement, dated as of December 7, 1998, Stock Pledge
Agreement, dated as of December 30, 1998, and Registration Rights
Agreement, dated as of December 30, 1998 between the Registrant and
Cogentrix Delaware Holdings. Inc. and $20.6 million Promissory Note
dated December 30, 1998 issued by Registrant to Cogentrix Delaware
Holdings, Inc. [incorporated by reference to Exhibit 10.112 to
Registrant's Form 8-K dated December 7, 1998]

10.113 Amendment to Loan Documents dated February 26, 1999 by and among
Registrant, EcoScience Produce Systems Corp., Agro Dynamics, Inc. Agro
Dynamics Canada, Inc. and Silicon Valley Bank.[incorporated by
reference to Exhibit 10.113 to Registrant's September 30, 1998
quarterly report on Form 10-Q]

10.114 First Amendment to Registration Rights Agreement dated as of March 11,
1999 between the Registrant and Cogentrix Delaware Holdings, Inc.
[incorporated by reference to Exhibit 10.114 to Registrant's September
30, 1998 quarterly report on form 10-Q].

10.115 Extension Agreement dated as of March 15, 1999 between Registrant and
Cogentrix Delaware Holdings, Inc. [incorporated by reference to Exhibit
10.115 to the Registrant's Annual Report on Form 10-K for the
transition period ended January 3, 1999]

10.116 Allonge to Promissory Note dated December 30, 1998 of Registrant,
payable to Cogentrix Delaware Holdings, Inc. [incorporated by reference
to Exhibit 10.116 to the Registrant's Annual Report on Form 10-K for
the transition period ended January 3, 1999]

10.117 Promissory Note dated March 15, 1999 issued by Registrant to Cogentrix
Delaware Holdings, Inc. in the amount of $1 million. [incorporated by
reference to Exhibit 10.117 to the Registrant's Annual Report on Form
10-K for the transition period ended January 3, 1999]

II-10

<PAGE>

10.118 Amendment to Stock Pledge Agreement dated as of March 15, 1999 between
Registrant and Cogentrix Delaware Holdings, Inc. [incorporated by
reference to Exhibit 10.118 to the Registrant's Annual Report on Form
10-K for the transition period ended January 3, 1999]

21 Subsidiaries of the Registrant. [filed herewith.]

23.1 Consent of Arthur Andersen LLP. [filed herewith]

23.2 Consent of Giordano, Halleran & Ciesla, P.C. [filed with exhibit 5].

24 Powers of Attorney of officers and directors of the Company [included
in the signature page to this Registration Statement].

27 Financial Data Schedule for the transition period ended January 3,
1999. [incorporated by reference to Exhibit 27 to the Registrant's
Annual Report on Form 10-K for the transition period ended January 3,
1999]

(b) Financial Statement Schedules

All Schedules are omitted because they are not applicable or the required
information is shown in the Consolidated Financial Statements or the notes
thereto.

Item 17. Undertakings.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:

(i) To include any prospectus required by Section 10(a)(3) of the
Act;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement;

(iii) 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.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment 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.

(3) 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-11
<PAGE>

(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing
provisions, 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 Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment of
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
the Registrant is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

II-12

<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-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of East Brunswick, the State of New Jersey, on May 5,
1999.

ECOSCIENCE CORPORATION

By:
-------------------------------------
Michael A. DeGiglio
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below on this Registration Statement hereby constitutes and appoints Michael A.
DeGiglio with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities to sign any
and all amendments to this Registration Statement (including post-effective
amendments and amendments thereto) and any registration statement relating to
the same offering as this Registration Statement that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing, ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the dates indicated.

Name Title Date
- ---- ----- ----
President, Chief Executive May 5 1999
- ----------------------------- Officer (Principal Executive
Michael A. DeGiglio Officer) and Director

Senior Vice President and May 5 1999
- ----------------------------- Interim Chief Financial Officer
J. Kevin Cobb (Principal Financial Officer)

Secretary and Corporate May 5 1999
- ------------------------------ Controller (Principal
Kurt Hoffman Accounting Officer)

II-13

<PAGE>

Executive Vice President and May 5 1999
- ----------------------------- Director
Albert W. Vanzeyst

Director May 5 1999
- -----------------------------
Thomas A. Montanti

Director May 5 1999
- -----------------------------
David J. Ryan

Director May 5 1999
- -----------------------------
Heinz K. Wehner

II-14

Exhibit 5

GIORDANO, HALLERAN & CIESLA

A PROFESSIONAL CORPORATION

ATTORNEYS AT LAW

125 HALF MILE ROAD

POST OFFICE BOX 190

MIDDLETOWN, NEW JERSEY 07748

(732) 741-3900

FAX: (732) 224-6599

441 EAST STATE STREET
TRENTON, NEW JERSEY 08625
(609) 695-3900

PLEASE REPLY TO: MIDDLETOWN

----------

DIRECT DIAL NUMBER DIRECT E-MAIL CLIENT/MATTER NO.
(732) 219-5483 [email protected] 10777/0005

May 6, 1999

EcoScience Corporation
10 Alvin Court
East Brunswick, New Jersey 08816

Gentlemen:

We refer to the Registration Statement on Form S-1 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act"), filed by
EcoScience Corporation, a Delaware corporation (the "Company"), with the
Securities and Exchange Commission for the registration of 1,633,273 shares of
the Company's common stock, $.01 par value (the "Common Stock") which are
proposed to be offered and sold by certain selling stockholders.

We have examined the original, or a photostatic or certified copy, of such
records and certificates of the Company, certificates of officers of the Company
and of public officials and such other documents as we have deemed relevant and
necessary as the basis for the opinion set forth below. In such examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such copies and the correctness of all
statements of fact contained therein.

Based upon our examination mentioned above, subject to the assumptions
stated and relying on statements of act contained in the documents that we have
examined, we are of the opinion that the Common Stock has been duly authorized
and validly issued and is fully paid and non-assessable.

We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to this firm appearing under the caption "Legal
Matters" in the Prospectus that forms a part of the Registration Statement. In
giving this consent, we do not thereby admit that

<PAGE>

GIORDANO, HALLERAN & CIESLA
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW

EcoScience Corporation
May 6, 1999
Page 2

we are within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the General Rules and Regulations
of the Securities and Exchange Commission.

Very truly yours,

GIORDANO, HALLERAN & CIESLA
A Professional Corporation

PDF/db

EXHIBIT 21

SUBSIDIARIES

Company State of Incorporation/Organization
------- -----------------------------------

Agro Dynamics Canada, Inc. Canada
Agro Dynamics, Inc. Delaware
Agro Power Development, Inc. Delaware
Cogentrix Greenhouse Investments, Inc. Delaware
Cogentrix of Buffalo, Inc. Delaware
Cogentrix of Fort Davis I, Inc. Delaware
Cogentrix of Marfa, Inc. Delaware
Cogentrix of Pocono, Inc. Delaware
EcoScience Produce Systems Corp. Delaware
Keystone Village Farms, LLC Delaware
New Amsterdam Joint Venture, LLC Delaware**
New Amsterdam Management, Co. Delaware
Pocono Village Farms, LP Delaware
Village Farms International Finance Association Delaware
Village Farms Mediterranean, Inc. Delaware
Village Farms of Buffalo, LP Delaware
Village Farms of Colorado, Inc. Delaware
Village Farms of Delaware, LLC Delaware
Village Farms of Marfa, LP Delaware
Village Farms of Texas, LP Delaware
Village Farms of Virginia, Inc. Delaware
Village Farms of Wheatfield, LLC Delaware
Village Farms of Presidio, L.P. Delaware*
Village Farms, Inc. Delaware
Village Farms, LLC Delaware
Village Farms of Morocco, S.A. Morocco**

* 86% owned
** 50% owned