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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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Form 10-Q

|ý  | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2002
|-- | -----------------------------------------------------------------------------------------------------------------------------------------
|or
|o  | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from
 to              

Commission File Number: 0-12177

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

|Delaware(State or other jurisdiction of incorporation or organization) |  | 75-2632242(I.R.S. Employer Identification No.)
|---------------------------------------------------------------------- |  | ----------------------------------------------
|9255 Customhouse Plaza, Suite I
San Diego, California,                 |  | 91909                                         
|(Address of principal executive offices)                               |  | (Zip Code)                                    
|(609) 744-8105(Registrant's telephone number, including area code)    
|6701 San Pablo Avenue
Oakland, California                              |  | 94608                                         
|(Former address, if changed since last report)                         |  | (Zip Code)                                    
|                                                                       |  |                                               

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

As
of November 18, 2002, 23,480,408 shares of common stock, par value $0.01 per share, of Bionova Holding Corporation were outstanding.

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PART IFINANCIAL INFORMATION

Item 1. Financial Statements

BIONOVA HOLDING CORPORATION  UNAUDITED CONSOLIDATED BALANCE SHEET  Thousands of U.S. Dollars  (except share and per share amounts)

|                                                                |                                                                                                                                                                                       | September 30,
2002 |        | December 31,
2001 |  
|--------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | ------ | ----------------- | -
|ASSETS                                                          |                                                                                                                                                                                       |                    |        |                   |  
|Current assets:                                                 |                                                                                                                                                                                       |                    |        |                   |  
|                                                                | Cash and cash equivalents                                                                                                                                                             |                    | $      | 1,330             |  
|                                                                | Accounts receivable, net                                                                                                                                                              |                    |        | 10,071            |  
|                                                                | Advances to growers, net                                                                                                                                                              |                    |        | 5,281             |  
|                                                                | Net assets of discontinued operations                                                                                                                                                 |                    |        | 1,542             |  
|                                                                | Inventories, net                                                                                                                                                                      |                    |        | 9,926             |  
|                                                                | Assets held for sale (see Note 5)                                                                                                                                                     |                    |        | 4,080             |  
|                                                                | Other current assets                                                                                                                                                                  |                    |        | 1,381             |  
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|                                                                | Total current assets                                                                                                                                                                  |                    |        | 33,611            |  
|Property, plant and equipment, net                              |                                                                                                                                                                                       |                    | 32,433 |                   |  
|Other assets                                                    |                                                                                                                                                                                       |                    | 10,751 |                   |  
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|Total assets                                                    |                                                                                                                                                                                       | $                  | 76,795 |                   | $
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|LIABILITIES, MINORITY INTEREST, AND STOCKHOLDERS' DEFICIT       |                                                                                                                                                                                       |                    |        |                   |  
|Current liabilities:                                            |                                                                                                                                                                                       |                    |        |                   |  
|                                                                | Accounts payable and accrued expenses                                                                                                                                                 |                    | $      | 16,144            |  
|                                                                | Accounts due to related parties                                                                                                                                                       |                    |        | 95,194            |  
|                                                                | Short-term bank loans                                                                                                                                                                 |                    |        | 1,416             |  
|                                                                | Current portion of long-term bank debt                                                                                                                                                |                    |        | 161               |  
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|                                                                | Total current liabilities                                                                                                                                                             |                    |        | 112,915           |  
|Long-term bank debt                                             |                                                                                                                                                                                       |                    | 479    |                   |  
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|                                                                | Total liabilities                                                                                                                                                                     |                    |        | 113,394           |  
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|Minority interest                                               |                                                                                                                                                                                       |                    | 284    |                   |  
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|Contingencies (see Note 9)                                      |                                                                                                                                                                                       |                    |        |                   |  
|Stockholders' deficit:                                          |                                                                                                                                                                                       |                    |        |                   |  
|                                                                | Preferred stock, $0.01 par value, 5,000 shares authorized, 200 shares issued and outstanding at both September 30, 2002 and December 31, 2001, liquidation value of $10,000 per share |                    |        |                  |  
|                                                                | Common stock, $0.01 par value, 50,000,000 shares authorized, 23,480,408 and 23,588,031 shares issued and outstanding on September 30, 2002 and December 31, 2001, respectively        |                    |        | 236               |  
|                                                                | Additional paid-in capital                                                                                                                                                            |                    |        | 171,597           |  
|                                                                | Accumulated deficit                                                                                                                                                                   |                    |        | (208,530          | )
|                                                                | Accumulated other comprehensive income (loss)                                                                                                                                         |                    |        | (186              | )
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|                                                                | Total stockholders' deficit                                                                                                                                                           |                    |        | (36,883           | )
|                                                                |                                                                                                                                                                                       |                    |        |                   |  
|Total liabilities, minority interest, and stockholders' deficit |                                                                                                                                                                                       | $                  | 76,795 |                   | $
|                                                                |                                                                                                                                                                                       |                    |        |                   |  

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

2

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BIONOVA HOLDING CORPORATION  UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS  AND COMPREHENSIVE INCOME AND LOSS  Thousands of U.S. Dollars  (except per share amounts)

|                                                                  |                                         | Three Months Ended
September 30, |            | Nine Months Ended
September 30, |  
|----------------------------------------------------------------- | --------------------------------------- | -------------------------------- | ---------- | ------------------------------- | -
|
|Total revenues                                                    |                                         | $                                | 17,697     |                                 | $
|                                                                  |                                         |                                  |            |                                 |  
|Cost of sales                                                     |                                         |                                  | 18,205     |                                 |  
|Selling and administrative expenses                               |                                         |                                  | 3,777      |                                 |  
|Amortization of goodwill, patents and trademarks                  |                                         |                                  |           |                                 |  
|                                                                  |                                         |                                  |            |                                 |  
|                                                                  |                                         |                                  | 21,982     |                                 |  
|                                                                  |                                         |                                  |            |                                 |  
|Operating loss                                                    |                                         |                                  | (4,285     | )                               |  
|                                                                  |                                         |                                  |            |                                 |  
|Interest expense                                                  |                                         |                                  | (2,314     | )                               |  
|Interest income                                                   |                                         |                                  | 382        |                                 |  
|Exchange gain (loss), net                                         |                                         |                                  | (1,097     | )                               |  
|Shareholder litigation expense                                    |                                         |                                  |            |                                 |  
|Other non-operating income, net                                   |                                         |                                  | 211        |                                 |  
|                                                                  |                                         |                                  |            |                                 |  
|                                                                  |                                         |                                  | (2,818     | )                               |  
|                                                                  |                                         |                                  |            |                                 |  
|Loss from continuing operations before discontinued operations    |                                         |                                  | (7,103     | )                               |  
|Discontinued operations (see Note 8):                             |                                         |                                  |            |                                 |  
|Loss from operations of research and development business segment |                                         |                                  | (1,185     | )                               |  
|                                                                  |                                         |                                  |            |                                 |  
|Loss before income taxes                                          |                                         |                                  | (8,288     | )                               |  
|Income tax expense                                                |                                         |                                  | (57        | )                               |  
|                                                                  |                                         |                                  |            |                                 |  
|Loss before minority interest                                     |                                         |                                  | (8,231     | )                               |  
|Minority interest in net loss (profit) of subsidiaries, net.      |                                         |                                  | 35         |                                 |  
|                                                                  |                                         |                                  |            |                                 |  
|Net loss                                                          |                                         |                                  | (8,196     | )                               |  
|Other comprehensive income (expense) net of tax:                  |                                         |                                  |            |                                 |  
|                                                                  | Foreign currency translation adjustment |                                  |            | (28                             | )
|                                                                  |                                         |                                  |            |                                 |  
|Comprehensive income                                              |                                         | $                                | (8,224     | )                               | $
|                                                                  |                                         |                                  |            |                                 |  
|Basic and diluted loss per common share                           |                                         | $                                | (0.35      | )                               | $
|                                                                  |                                         |                                  |            |                                 |  
|Weighted average number of common shares outstanding              |                                         |                                  | 23,480,408 |                                 |  

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

3

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BIONOVA HOLDING CORPORATION  UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS  Thousands of U.S. Dollars

|                                                                                  |                                                  | Nine Months Ended September 30, |        
|--------------------------------------------------------------------------------- | ------------------------------------------------ | ------------------------------- | -------
|
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |                                                  |                                 |        
|Net loss                                                                          |                                                  | $                               | (15,031
|Adjustments to reconcile net income to net cash provided by operating activities: |                                                  |                                 |        
|                                                                                  | Minority interest                                |                                 |        
|                                                                                  | Depreciation                                     |                                 |        
|                                                                                  | Amortization of goodwill, patents and trademarks |                                 |        
|                                                                                  | Gain on sale of land                             |                                 |        
|                                                                                  | Loss on sale of subsidiaries                     |                                 |        
|                                                                                  | Other non-cash items                             |                                 |        
|Net changes (exclusive of subsidiaries acquired or divested) in:                  |                                                  |                                 |        
|                                                                                  | Accounts receivable and advances to growers, net |                                 |        
|                                                                                  | Inventories                                      |                                 |        
|                                                                                  | Net assets of discontinued operations            |                                 |        
|                                                                                  | Deferred income taxes                            |                                 |        
|                                                                                  | Other assets                                     |                                 |        
|                                                                                  | Accounts payable and accrued expenses            |                                 |        
|                                                                                  |                                                  |                                 |        
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                               |                                                  |                                 | 2,347  
|                                                                                  |                                                  |                                 |        
|CASH FLOWS USED IN INVESTING ACTIVITIES                                           |                                                  |                                 |        
|Purchases of property, plant and equipment                                        |                                                  |                                 | (1,564 
|Proceeds from sale of property, plant and equipment                               |                                                  |                                 | 412    
|                                                                                  |                                                  |                                 |        
|NET CASH USED IN INVESTING ACTIVITIES                                             |                                                  |                                 | (1,152 
|                                                                                  |                                                  |                                 |        
|CASH FLOWS FROM FINANCING ACTIVITIES                                              |                                                  |                                 |        
|Proceeds from short-term borrowings                                               |                                                  |                                 | 141    
|Repayments of short-term debt                                                     |                                                  |                                 | (8,114 
|Proceeds from long-term borrowings                                                |                                                  |                                 |       
|Repayments of long-term debt                                                      |                                                  |                                 | (79    
|Accounts due to related parties                                                   |                                                  |                                 | 6,010  
|                                                                                  |                                                  |                                 |        
|NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                               |                                                  |                                 | (2,042 
|                                                                                  |                                                  |                                 |        
|Net increase (decrease) in cash and cash equivalents                              |                                                  |                                 | (847   
|Cash at beginning of period                                                       |                                                  |                                 | 2,177  
|                                                                                  |                                                  |                                 |        
|Cash at end of period                                                             |                                                  | $                               | 1,330  
|                                                                                  |                                                  |                                 |        

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

4

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BIONOVA HOLDING CORPORATION        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS  September 30, 2002

Note 1Basis of Presentation

For operating and financial reporting purposes, Bionova Holding Corporation (together with its subsidiaries, unless the context requires otherwise, "Bionova
Holding" or the "Company") historically has classified its business into three fundamental areas: (1)Farming, which consists principally of
interests in 100% Company-owned fresh produce production facilities and joint ventures or contract growing arrangements with other growers in Mexico;
(2)Distribution,consisting principally of interests in sales and distribution companies in the United States, and
Canada; and (3)Research and Development (or Technology),which until its shut down in June 2002 consisted of business units focused on
the development of fruits and vegetables and intellectual properties associated with these development efforts.

In
management's opinion, the accompanying unaudited consolidated financial statements for Bionova Holding for the three and nine month periods ended September 30, 2002 and 2001
have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and include all adjustments (consisting only of normal
recurring accruals) that the Company considers necessary for a fair presentation of its financial position, results of operations, and cash flows for such periods. However, the accompanying unaudited
consolidated financial statements do not contain all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited
consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto presented in its 2001 10-K for the fiscal year ended
December 31, 2001. Footnotes which would substantially duplicate disclosures in the Company's audited consolidated financial statements for the fiscal year ended December 31, 2001
contained in the 2001 10-K report have been omitted. The interim consolidated financial information contained herein is not necessarily indicative of the results to be expected for any other interim
period or the full fiscal year ending December 31, 2002.

Going Concern

The Company incurred a net loss of $56.6 million and an operating cash flow deficiency of $3.5 million for the year ended December 31, 2001.
The Company also sustained significant operating losses and operating cash flow deficiencies from 1997 through 2000. At September 30, 2002 the Company had a negative working capital position of
$79.3 million and has incurred a net loss of $15.0 million for the nine months ended September 30, 2002.

Management
has been and is continuing to address the Company's financial condition by postponing the sale of its fresh produce business, selling non-core assets of the fresh produce
business, and selling and licensing its intellectual property. The Company also decided during the first week of May 2002 to close down its research and development operations to eliminate the
ongoing expense involved in this segment of the business (see Note 8). The Company still must find a solution to the $95.2 million of debt plus additional interest accruing from
September 30, 2002 that is due to Savia and its subsidiaries during 2002. Further, Bionova Produce, Inc., one of the Company's fresh produce subsidiary companies,
must secure its new lending facilities to support growing and harvesting activities for the current crop season (see Note 2). There can be no assurance that these actions will result in
sufficient working capital to significantly improve the Company's current financial position or its results of operations nor can there be any assurance the Company will be able to meet its
obligations in 2002 nor secure or generate the funds to take it beyond the 2002 calendar year. This raises substantial doubt about the Company's ability to continue as a going concern.

5

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The
unaudited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2Bank Debt

There currently are two components to this debt, both of which are guaranteed by Savia. All of this debt is associated with Bionova Produce, Inc., which is
a distribution subsidiary located in Nogales, Arizona. The first component of the debt is a five-year loan secured by real property and is due August 30, 2006. The second component of the bank
debt is a $6 million revolving line of credit.

As
of July 31, 2002 Bionova Produce was in default on certain covenants relating to its revolving line of credit. Bionova Produce was able to cure this default and came back into
compliance with the covenants of this loan facility in August. The principal on this $6 million revolving line (on which $1.4 million was outstanding on September 30, 2002)
originally was due in full on September 30, but was extended to November 14, 2002, to permit Bionova Produce to complete a new set of financing facilities with its bank. While Bionova
Produce is working with the bank on a further extension, since November 14th has now passed, this facility is past due, though the bank has not yet declared an event of default.

Bionova
Produce has been in negotiations with the bank to secure new credit facilities with an aggregate limit of $10.5 million, including a new revolving line of credit. Though
the bank has approved the loan facilities on a preliminary basis, certain terms are still being negotiated, and the facilities have not yet been secured.

Note 3Net Loss per Common Share

The weighted average number of common shares outstanding during the three and nine month periods ended September 30, 2002 and 2001 was 23,480,408 and
23,588,031, respectively. On a diluted basis, assuming Savia were to convert the 200 shares of preferred stock it currently holds into common, the
weighted average number of common shares outstanding during the three and nine month periods ended September 30, 2002 and 2001 would have been 46,636,524 and 46,744,147, respectively.

In
addition, the following table sets forth the potential shares of common stock related to stock options that are not included in the diluted net income or loss per share attributable
to common stockholders because to do so would be anti-dilutive for the periods indicated:

|                               |                           | September 30
|------------------------------ | ------------------------- | ------------
|
|
|Effect of dilutive securities: |                           |             
|                               | Stock options outstanding |             

6

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Note 4Inventories

Inventories were comprised of the following:

|                                    |  | September 30,
2002 |        | December 31,
2001 |  
|----------------------------------- |  | ------------------ | ------ | ----------------- | -
|
|Finished produce                    |  | $                  | 400    |                   | $
|Growing crops                       |  |                    | 4,148  |                   |  
|Advances to suppliers               |  |                    | 1,566  |                   |  
|Spare parts and materials           |  |                    | 2,461  |                   |  
|Merchandise in transit and other    |  |                    | 1,448  |                   |  
|                                    |  |                    |        |                   |  
|                                    |  |                    | 10,023 |                   |  
|Allowance for slow moving inventory |  |                    | (97    | )                 |  
|                                    |  |                    |        |                   |  
|                                    |  | $                  | 9,926  |                   | $
|                                    |  |                    |        |                   |  

Note 5Assets Held for Sale

Assets held for sale were comprised of the following:

|                                                        |  | September 30,
2002 |       | December 31,
2001
|------------------------------------------------------- |  | ------------------ | ----- | -----------------
|
|Agricultural land in Sinaloa, Mexico                    |  | $                  | 3,255 |                  
|Agricultural land in Guerrero, Mexico                   |  |                    | 825   |                  
|Land and greenhouse facilities in Brentwood, California |  |                    |      |                  
|                                                        |  |                    |       |                  
|                                                        |  | $                  | 4,080 |                  
|                                                        |  |                    |       |                  

In
July 2002, the land and greenhouse facilities in Brentwood, California were sold for $0.4 million (net of commission). The Company recorded a gain of $0.2 million
in the third quarter of 2002 associated with the sale of this land.

Note 6Goodwill and Intangible Assets

The Company conducted a comprehensive impairment review at the end of 2001. Based on the review significant impairment charges were recorded in the fourth quarter
of 2001, which reduced the Company's goodwill to zero and the net value of its patents and trademarks to $3.0 million at December 31, 2001. The patents and trademarks are included in net
assets of discontinued operations.

7

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Annual
amortization expense on the Company's patents and trademarks is expected to be approximately $0.5 million in 2002. Pro forma net income and pro forma net income per share,
excluding amortization, were the following:

|                                                  |  | September 30,
2002 |        | September 30,
2001 |  
|------------------------------------------------- |  | ------------------ | ------ | ------------------ | -
|
|Net loss, as reported                             |  | $                  | (8,196 | )                  | $
|Add back: goodwill amortization                   |  |                    |       |                    |  
|                                                  |  |                    |        |                    |  
|Pro forma net loss                                |  | $                  | (8,196 | )                  | $
|                                                  |  |                    |        |                    |  
|Basic and diluted net loss per share, as reported |  | $                  | (0.64  | )                  | $
|Add back: goodwill amortization per share         |  |                    |       |                    |  
|                                                  |  |                    |        |                    |  
|Pro forma basic and diluted net loss per share    |  | $                  | (0.64  | )                  | $
|                                                  |  |                    |        |                    |  

DNAP
completed a major transaction in June 2002 in which it provided a non-exclusive license for its Transwitch technology and sold one of its patents. In return, DNAP received
$1 million in cash. Since these patents were a significant component of the value of DNAP's patents and trademarks, DNAP recorded a $1 million reduction to this asset account to
recognize the sale and value remaining in these assets.

Note 7Segment Reporting

For operating and financial reporting purposes, Bionova Holding Corporation (together with its subsidiaries, unless the context requires otherwise, "Bionova
Holding" or the "Company") historically has classified its business into three fundamental areas: (1)Farming, which consists principally of
interests in 100% Company-owned fresh produce production facilities and joint ventures or contract growing arrangements with other growers in Mexico;
(2)Distribution,consisting principally of interests in sales and distribution companies in the United States, and
Canada; and (3)Research and Development (or Technology),which until its shut down in June 2002 consisted of business units focused on
the development of fruits and vegetables and intellectual properties associated with these development efforts.

Information
pertaining to the operations of these different business segments is set forth below. The Company evaluates performance based on several factors. The most significant
financial measure used to evaluate business performance is business segment operating income. Inter-segment sales are accounted for at fair value as if the sales were to third parties. Segment
information includes the allocation of corporate overhead to the various segments. All acquired goodwill prior to December 31, 2001 was pushed down to the companies and segments that had made
the acquisitions. At

8

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December 31, 2001 Bionova Holding determined its goodwill had become impaired and a charge was recorded to write off all of the goodwill of the Company as of that date.

|                                     |  | Farming |         | Distribution |   | Research and Development (Discontinued Operations) |  | Total of Reportable Segments |       
|------------------------------------ |  | ------- | ------- | ------------ | - | -------------------------------------------------- |  | ---------------------------- | ------
|
|January 1-September 30, 2002         |  |         |         |              |   |                                                    |  |                              |       
|Revenues from unaffiliated customers |  | $       | 11,147  |              | $ | 94,884                                             |  | $                            | 1,920 
|Inter-segment revenues               |  |         | 35,161  |              |   |                                                   |  |                              |      
|                                     |  |         |         |              |   |                                                    |  |                              |       
|Total revenues                       |  |         | 46,308  |              |   | 94,884                                             |  |                              | 1,920 
|                                     |  |         |         |              |   |                                                    |  |                              |       
|Operating profit (loss)              |  |         | (5,619  | )            |   | 1,524                                              |  |                              | (1,972
|                                     |  |         |         |              |   |                                                    |  |                              |       
|Depreciation and amortization        |  |         | 1,852   |              |   | 270                                                |  |                              | 4     
|Identifiable assets(1)               |  |         | 63,975  |              |   | 24,217                                             |  |                              | 1,542 
|Acquisition of long-lived assets     |  |         | 1,447   |              |   | 117                                                |  |                              |      
|January 1-September 30, 2001         |  |         |         |              |   |                                                    |  |                              |       
|Revenues from unaffiliated customers |  | $       | 2,485   |              | $ | 166,159                                            |  | $                            | 1,742 
|Inter-segment revenues               |  |         | 45,095  |              |   |                                                   |  |                              |      
|                                     |  |         |         |              |   |                                                    |  |                              |       
|Total revenues                       |  |         | 47,580  |              |   | 166,159                                            |  |                              | 1,742 
|                                     |  |         |         |              |   |                                                    |  |                              |       
|Operating profit (loss)              |  |         | (4,081  | )            |   | 4,413                                              |  |                              | (6,667
|                                     |  |         |         |              |   |                                                    |  |                              |       
|Depreciation and amortization        |  |         | 1,554   |              |   | 228                                                |  |                              | 1,242 
|Identifiable assets(1)               |  |         | 108,444 |              |   | 25,413                                             |  |                              | 21,808
|Acquisition of long-lived assets     |  |         | 2,348   |              |   | 1,464                                              |  |                              | 92    

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9

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Reconciliation
of the segments to total consolidated amounts is set forth below:

|                                                         |  | January 31-September 30 |        
|-------------------------------------------------------- |  | ----------------------- | -------
|
|
|Revenues                                                 |  |                         |        
|Revenues from unaffiliated customers                     |  | $                       | 143,112
|Inter-segment revenues                                   |  |                         | (35,161
|Revenues from discontinued operations                    |  |                         | (1,920 
|                                                         |  |                         |        
|Total revenues                                           |  |                         | 106,031
|                                                         |  |                         |        
|Loss before taxes                                        |  |                         |        
|Total operating loss from reportable segments            |  |                         | (6,067 
|Total operating loss from Bionova Holding Corporation(1) |  |                         | (1,624 
|Interest, net                                            |  |                         | (6,004 
|Exchange gain (loss), net                                |  |                         | (756   
|Shareholder litigation expense                           |  |                         |       
|Other non-operating (expense) income, net                |  |                         | 164    
|                                                         |  |                         |        
|Consolidated loss before taxes                           |  |                         | (14,287
|                                                         |  |                         |        
|Assets                                                   |  |                         |        
|Total segment identifiable assets                        |  |                         | 89,734 
|Unallocated and corporate assets(2)                      |  |                         | 1,556  
|Eliminations(3)                                          |  |                         | (14,495
|                                                         |  |                         |        
|Consolidated assets                                      |  |                         | 76,795 
|                                                         |  |                         |        

Notes:

10

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Revenue
from external customers by product/service category is set forth below:

|                                  |  | Farming |       | Distribution |   | Research and Development (Discontinued Operations) |  | Total of Reportable Segments
|--------------------------------- |  | ------- | ----- | ------------ | - | -------------------------------------------------- |  | ----------------------------
|
|January 1-September 30, 2002      |  |         |       |              |   |                                                    |  |                             
|Core vegetables(1)                |  | $       | 7,827 |              | $ | 47,682                                             |  |                             
|Fruits and other fresh produce(2) |  |         | 3,320 |              |   | 47,202                                             |  |                             
|Contracted R&D revenue            |  |         |       |              |   |                                                    |  | $                           
|Licensed technology and royalties |  |         |       |              |   |                                                    |  |                             
|January 1-September 30, 2001      |  |         |       |              |   |                                                    |  |                             
|Core vegetables(1)                |  |         |       |              |   | 80,407                                             |  |                             
|Fruits and other fresh produce(2) |  |         | 1,736 |              |   | 86,501                                             |  |                             
|Contracted R&D revenue            |  |         |       |              |   |                                                    |  |                             
|Licensed technology and royalties |  |         |       |              |   |                                                    |  |                             

Notes:

Note 8Closing of Research and Development Operations (Discontinued Operations)

On May 13, 2002 Bionova Holding announced it had begun closing down its research and development operations, including all of the activities carried out
through its wholly owned DNAP and VPP subsidiary companies. The focus of DNAP's research during the past year had been the production of transgenic plants which provide improved disease resistance for
fruit and vegetable crops. Concerns about public acceptance of transgenic products in these markets made producers reluctant to invest in the development of transgenic fruits and vegetables. Further,
the agricultural industry has suffered from low prices for its products over the past few years, leading growers, food companies and other providers to delay new research and development investment.
Despite an intensive search, these factors made it difficult for DNAP to develop new customers; and, with the absence of a customer base, DNAP was not able to obtain venture capital or other financing
sufficient to continue operations. Accordingly, the research and development operations were closed down during May and June, including the Oakland facility, and all personnel were laid off. DNAP
shifted its focus to the licensing and sale of its intellectual property. The shutdown of operations was completed on June 30, 2002.

In
conjunction with the closing of the Company's research and development operations, DNAP and Seminis Vegetable Seeds agreed to terminate their long-term funded research agreement,
which was entered into in January 1997. Seminis made a cash payment as part of the termination agreement, and
DNAP acquired certain technology rights which bring value to its technology licensing and sale activities.

In
October 2001, the FASB issued Statement of Financial Accounting Standards No. 144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of Long-Lived
Assets," which is effective for fiscal years beginning after December 15, 2001 and interim periods within those fiscal periods. This Statement supersedes FASB Statement No. 121 and APB
30, however, this Statement retains the requirement of Opinion 30 to report discontinued operations separately from continuing operations and extends that reporting to a component of an entity that
either has been disposed of (by sale, by

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abandonment, or in a distribution to owners) or is classified as held for sale. Management has been working on the plan and structure to enable the transfer of the remaining patents and trademarks of
DNAP and VPP to Bionova Holding and/or its other subsidiaries.

Revenues
and losses of the Company's research and development operations for the quarter and nine months ended September 30, 2002 (in thousands of dollars) were as follows:

|                                       |  | Quarter Ended September 30 |        | Nine Months Ended September 30 |  
|-------------------------------------- |  | -------------------------- | ------ | ------------------------------ | -
|Revenues                               |  | $                          | 0      |                                | $
|Loss before provision for income taxes |  |                            | (1,185 | )                              |  
|Income tax expense                     |  |                            |       |                                |  
|Net loss                               |  |                            | (1,185 | )                              |  

Summary
data relating to the assets and liabilities of the Company's research and development operations (in thousands of dollars) at September 30, 2002 is shown below.

|Current assets                         |  | $ | 0    
|-------------------------------------- |  | - | -----
|Total assets                           |  |   | 1,626
|Current liabilities                    |  |   | 84   
|Total liabilities                      |  |   | 84   
|Net assets of Research and Development |  |   | 1,542

The
Company has been, and continues to work on the licensing and sale of its patents and trademarks. During the first nine months of 2002 the Company received more than $1 million
in revenue associated with these activities.

Note 9Legal Actions and Contingencies

The Company, DNAP, and former directors of DNAP are defendants in one remaining shareholder litigation styledGordon K. Aaron et al. v.
Empresas la Moderna, S.A. de C.V., et al.This action was filed in the U.S. federal district court for the Northern District of California action and stemmed from the 1996
merger of DNAP and the fresh produce business of Bionova Holding. A substantially identical class action lawsuit styledRobert Kaczak v. Empresas la Moderna, S.A. de C.V., et
al.was filed in the U.S. federal district court for the Northern District of California, and these two cases were then consolidated. The trial court dismissed all of the
plaintiffs' claims, but the Court of Appeals for the Ninth Circuit reinstated some of the claims against Bionova Holding and the individuals who were named as defendants. Bionova Holding denies any
wrongdoing and liability in these matters and intends to vigorously contest these lawsuits.

ABSA
owns one hundred hectares (approximately 247 acres) of rural land in the State of Sinaloa, Mexico, which is the subject of a judicial proceeding pending in Mexico initiated by a
group of campesinos. The petitioners asserted that a previous owner of the subject land, Miguel Angel Suárez, owned rural land in excess of the maximum that was then allowed by law and
that therefore the land rightfully belonged to them. On September 25, 1996, the court upheld the petition and ordered the land turned over to the petitioners. The court also ruled that the
transfer of the property to Olga Elena Batiz Esquer on June 2, 1990 was null and void, which would mean that the transfer of the land by Ms. Batiz to ABSA in 1993 was ineffective. On
October 23, 1996, Ms. Batiz, who was a party to the

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trial court proceeding, filed a challenge to the judicial determination based on alleged violations of her constitutional rights and procedural and substantive errors in the trial court proceedings.
If ABSA is
ultimately required to transfer the subject land, which constitutes approximately 7.7% of the total agricultural land owned by ABSA, Mexican law gives ABSA limited indemnification rights against the
State of Sinaloa and Ms. Batiz.

On
June 16, 2000, a lawsuit styledSanta Cruz Empacadora, S. de R.L. de C.V., v. R.B. Packing of California, Inc.was filed
in the United States District Court for the Southern District of California. R.B. Packing of California, Inc., a subsidiary of Bionova Holding, had been the United States distributor of fresh
produce sold by the plaintiff. The plaintiff alleges that R.B. Packing of California, Inc. sold Santa Cruz produce to related companies at below market prices and thereby engaged in unfair
conduct, fraud and breach of statutory and fiduciary duties. The plaintiff seeks an unspecified amount of compensatory and punitive damages. R.B. Packing of California, Inc. denies any
wrongdoing or liability in this matter and intends to vigorously contest this lawsuit.

On
December 30, 1998, Bionova Holding, through its subsidiary, VPP, acquired Monsanto Company's strawberry development program. The original purchase price was
$5.0 million. The purchase contract stipulated that if Monsanto was able to satisfy certain conditions to grant certain additional licenses, VPP would be obligated to make additional payments.
In 2000 VPP paid Monsanto an additional $3.0 million when Monsanto was able to grant one of these licenses. If Monsanto is able to fulfill the conditions to grant the additional licenses, VPP
would be obligated to make additional payments in an amount as great as $4.0 million in the future. The granting of these additional licenses is contingent on the resolution of a patent
interference case involving Monsanto and several other companies. The Company does not believe this case is likely to be decided for at least two to three years, and it is not possible to predict with
any certainty whether Monsanto will win or lose the case.

Please
see the Company's Form 10-K for the year ended December 31, 2001 that was filed on April 12, 2002 for further discussion on the Company's pending
litigation and contingencies.

Note 10Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. Further, the unaudited consolidated financial statements for
Bionova Holding presented for the three and nine month periods ended September 30, 2002 and 2001 were prepared in accordance with FASB 144 to reflect the effects of the discontinued operations
of the research and development business and the continuing operations of the Company's fresh produce farming and distribution business.

Note 11New Accounting Pronouncements

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS No. 146"). SFAS
No. 146 addresses significant issues regarding the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including
restructuring activities that are currently accounted for under EITF No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." The scope of SFAS No. 146 also includes costs related to terminating a contract that is not a capital lease and termination benefits that
employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation
contract. SFAS No. 146 will be effective for exit or disposal activities that are initiated after December 31, 2002 and early application is

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encouraged. The Company will adopt SFAS No. 146 during the first quarter of 2003. The provisions of EITF No. 94-3 shall continue to apply for an exit activity initiated
under an exit plan that met the criteria of EITF No. 94-3 prior to the adoption of SFAS No. 146. The effect on adoption of SFAS No. 146 will change on a prospective
basis the timing of when restructuring charges are recorded from a commitment date approach to when the liability is incurred; however, the Company does not expect the adoption of SFAS No. 146
will have a material impact on the Company's financial position and results of operations.

Note 12Related Party Transactions

Beginning in the third quarter of 2002, and continuing into the fourth quarter, four of the Company's senior managers deferred receipt of their salary
compensation because of the Company's tight cash situation. At September 30, 2002 this deferred salary compensation amounted to $0.1 million. In addition, the president of the Company's
fresh produce business loaned the Company $0.2 million in the month of August 2002.

In
the third quarter of 2002 DNAP executed a transaction with Seminis Vegetables Seeds, Inc., a majority owned subsidiary of Savia. This transaction provided Seminis with a
non-exclusive right to produce on a worldwide basis, and an exclusive right to sell in Europe and Asia DNAP's patented bell peppers. DNAP received an advance cash payment of $2 million against
future royalty payments. The agreement provides that after two years Seminis has the right to terminate the agreement and that DNAP would be required to reimburse Seminis for any unearned portion of
the royalty advance. Accordingly, DNAP recorded this advance on royalties as Accounts due to Related Parties.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The Company

Bionova Holding Corporation, a Delaware corporation (together with its subsidiaries, unless the context requires otherwise, "Bionova Holding" or the "Company"),
was formed in January 1996, and acts as a holding company for (i) Agrobionova, S.A. de C.V., a corporation organized under the laws of the United Mexican States, of which the Company
owns 98.6% ("ABSA"), (ii) International Produce Holding Company, a Delaware corporation, of which the Company owns 100% ("IPHC"), (iii) DNA Plant Technology Corporation, a Delaware
corporation, of which the Company owns 100% ("DNAP"), and (iv) VPP Corporation, a Delaware corporation, of which the Company owns 100% ("VPP"). Approximately 77% of the outstanding common stock
of the Company is indirectly owned by Savia, S.A. de C.V.

For
operating and financial reporting purposes, Bionova Holding Corporation (together with its subsidiaries, unless the context requires otherwise, "Bionova Holding" or the "Company")
historically has classified its business into three fundamental areas: (1)Farming, which consists principally of interests in 100% Company-owned
fresh produce production facilities and joint ventures or contract growing arrangements with other growers in Mexico;
(2)Distribution,consisting principally of interests in sales and distribution companies in the United States, and
Canada; and (3)Research and Development (or Technology),which until its shut down in June 2002 consisted of business units focused on
the development of fruits and vegetables and intellectual properties associated with these development efforts.

Results of Operations

Three Months Ended September 30, 2002 Compared to the Three Months Ended September 30, 2001

Consolidated total revenues declined to $17.7 million for the quarter ended September 30, 2002 from $41.5 million in the same quarter of
2001, consolidated gross profit (sales less cost of sales) declined to a loss of $0.5 million for the quarter ended September 30, 2002 from a profit of $3.0 million in the same
quarter of 2001, and the Company's consolidated operating loss declined to $4.3 million for the quarter ended September 30, 2002 from a loss of $4.1 million in the same quarter of
2001.

FARMING
segment revenues, the majority of which are eliminated in consolidation, were down slightly from $3.3 million in the quarter ended September 30, 2002 as compared
with $3.5 million in the same quarter of 2001. While total production volumes were relatively equal across the corresponding quarters, yields were down significantly from the third quarter of
2001 to the third quarter of 2002. This was a consequence of poor market conditions and crop quality associated with grape production in Hermosillo and tomato production in Todo Santos and Obregon in
2002. These poor yields translated directly through to the higher 2002 operating loss in this segment of the business, as the Farming
segment operating loss in the third quarter of 2001 was $1.8 million as compared with a loss of $3.0 million in the same quarter of 2002.

Revenues
of the DISTRIBUTION segment declined by $23.0 million to $16.1 million for the quarter ended September 30, 2002 from $39.1 million in the same
quarter of 2002. This decline was entirely attributable to the divestiture of Interfruver de Mexico, S.A. de C.V. in November 2001, which accounted for $24.8 million of sales in the
third quarter of 2001. (Interfruver still serves as the Company's distributor of fresh produce harvested by ABSA, but sales to Interfruver are now recorded

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as revenues from unaffiliated customers of the Farming segment). Revenues of the U.S. distribution companies decreased by $1.4 million, or 27%, for the quarter ended September 30, 2002
as compared with the same quarter of 2001 due to a 46% decline in production volumes. Partially offsetting the impact of this decline in volumes on gross margin was 36% higher average selling prices
due to a better product mix. (Vine Sweet mini peppers, which sell at significantly higher prices with higher margins represented a much higher percentage of revenues in the third quarter of 2002 than
the same quarter in 2001.) Revenues of Premier Fruits & Vegetables, BBL Inc. in Canada increased by $3.2 million, or 35%. Gross profit of the Distribution Segment decreased by
$1.8 million in the third quarter of 2002 as compared with the third quarter of 2001 due to (i) the impact of the divestiture of Interfruver (gross profit in the third quarter of 2001
was $1.5 million); (ii) a decrease of $0.7 million in the gross profit generated by the U.S. distribution companies; and (iii) offset in part by a $0.4 million increase in
the gross profit of Premier Fruits & Vegetables, BBL Inc. in Canada. Selling and administrative expenses of the Distribution segment decreased by $2.3 million for the quarter
ended September 30, 2002 as compared with the same quarter in 2001. The decrease was a result of (i) the divestiture of Interfruver and (ii) a $0.8 million reduction in
expenses, mainly related to salaries. The combination of these factors contributed to a $0.8 million decrease in the operating loss of the Distribution segment for the quarter ended
September 30, 2002 as compared with the same quarter of 2001 ($1.1 million operating loss in the third quarter of 2001 as compared with a $0.3 million operating loss in the third
quarter of 2002).

Amortization
of goodwill, patents and trademarks, which are expensed in each of the segments, declined from $0.7 million in the third quarter of 2001 to $0.1 in the third quarter
of 2002 ($0.3 million of the 2001 expense and all of the 2002 expense are reflected in the results of discontinued operations). This decline was due to the significant impairment charges
recorded in the fourth quarter of 2001, which reduced the Company's goodwill to zero and the value of its patents and trademarks to $3.0 million at December 31, 2001.

Corporate
administrative expenses declined from $1.6 million in the third quarter of 2001 to $0.7 million in the same period of 2002. This decline was attributable to a
reduction in legal and other administrative expenses.

Interest
expense increased from $1.4 million in the third quarter of 2001 to $2.3 million in the third quarter of 2002.

The
loss from the discontinued operations of the research and development segment declined from $1.9 million in the third quarter of 2001 to $1.2 million in the third
quarter of 2002. This reduction was the result of the shut down of the Company's research and development operations in June 2002 and a reduction in amortization expense associated with
goodwill and patents and trademarks. While the shut down of operations eliminated most of the costs in this business segment, the Company recognized certain costs in the third quarter of 2002 carrying
over from the shut down and to license and sell some of its technology patents.

The
share of the loss in subsidiaries allocable to minority interests was almost zero in the third quarter of 2002 as compared with $0.5 million in the same quarter of 2001. These
allocations of the share of profits and losses were consistent with the minority positions held across the operating subsidiaries of the Company and reflect the impact of the divestiture of
Interfruver on minority interest income in the third quarter of 2001.

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Nine Months Ended September 30, 2002 Compared to the Nine Months Ended September 30, 2001

Consolidated total revenues declined to $106.0 million for the nine month period ended September 30, 2002 from $168.6 million for the same
nine month period of 2001, consolidated gross profit (sales less cost of sales) declined to $5.8 million for the nine month period ended September 30, 2002 from $15.6 million in
the same nine month period of 2001, and the Company's consolidated operating loss totaled $5.7 million for the nine month period ended September 30, 2002 as compared with a $1.7 million
loss in the same nine month period of 2001.

FARMING
segment revenues, the majority of which are eliminated in consolidation, decreased by $1.3 million to $46.3 million for the nine month period ended
September 30, 2002 as compared with $47.6 million for the same nine month period of 2001. Production volumes increased by 3.8% from the nine month period ended September 30, 2001
to the same period in 2002, while the average selling prices for the Company's fresh produce declined by 6.3% between these corresponding nine month periods. The decline in selling prices more than
offset the improvement in production volumes which accounted for a worsening of Farming gross profit (sales less cost of sales) from a loss of $0.8 million in the first nine months of 2001 to a
loss of $2.4 million in the same period of 2002. Selling and administrative expenses of the Farming segment for the first nine months of 2002 declined by 10.7%, or $0.3 million, as
compared with the first nine months of 2001. The consequence of these combined factors caused the Farming operating loss to increase by 38% from $4.1 million for the first nine months of 2001
to $5.6 million for the same period of 2002.

Revenues
of the DISTRIBUTION segment declined by $71.3 million to $94.9 million for the nine month period ended September 30, 2002 from $166.2 million for the
same nine month period of 2001. This decline was entirely attributable to the divestiture of Interfruver de Mexico, S.A. de C.V. in November 2001, which accounted for $71.2 million of
sales for the nine month period ended
September 30, 2001. (Interfruver still serves as the Company's distributor of fresh produce harvested by ABSA, but sales to Interfruver are now recorded as revenues from unaffiliated customers
of the Farming segment). Revenues of the U.S. distribution companies decreased by $6.1 million, or 10%, for the nine month period ended September 30, 2002 as compared with the same nine
month period of 2001, and this decrease was due largely to lower prices. Revenues of Premier Fruits & Vegetables, BBL Inc. in Canada increased by $6.0 million, or 18.2%. Gross
profit relating to the Distribution Segment decreased by $7.5 million, or 47.7% for the nine month period ended September 30, 2002 as compared with the same nine month period of 2001 due
to (i), the impact of the divestiture of Interfruver (gross profit for the nine months of 2001 was $5.6 million); (ii) a decrease of $2.9 million in the gross profit generated by
the U.S. distribution companies; and (iii) offset in part by a $1.0 million increase in the gross profit of Premier Fruits & Vegetables, BBL Inc. in Canada. Selling and
administrative expenses relating to the Distribution segment decreased by $4.4 million for the nine month period ended September 30, 2002 as compared with the same nine month period of
2001. The decrease was a result of (i) the divestiture of Interfruver and (ii) a reduction of $0.5 million in expenses, mainly related to salaries. The combination of these
factors contributed to a $2.9 million decrease in the operating profit of the Distribution segment from $4.4 million for the first nine months of 2002 as compared with
$1.5 million for the same period of 2001. The divestiture of Interfruver accounted for the majority of this decline, as Interfruver generated an operating profit of $1.9 million during
the first nine months of 2001. As a percentage of sales, operating profit decreased to 1.6% for the first nine months of 2002 as compared with 2.7% for the first nine months of 2001.

Amortization
of goodwill, patents and trademarks, which are expensed in each of the segments, declined from $2.3 million in the first nine months of 2001 to $0.4 in the first nine
months of 2002

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($1.4 million of the 2001 expense and all of the 2002 expense are reflected in the results of discontinued operations). This decline was due to the significant impairment charges recorded in
the fourth quarter of 2001, which reduced the Company's goodwill to zero and the value of its patents and trademarks to $3.0 million at December 31, 2001.

Corporate
administrative expenses declined from $2.8 million in the first nine months of 2001 to $1.6 million in the same period of 2002. This decline was attributable to a
reduction in legal and other administrative expenses.

Interest
expense increased from $2.8 million in the first nine months of 2001 to $7.0 million in the first nine months of 2002.

A
$6.4 million charge was recorded in the second quarter of 2001 for shareholder litigation expense due to a court ruling issued by the California Superior Court in favor of the
Grace Brothers against DNAP. DNAP settled this dispute with the Grace Brothers during the fourth quarter of 2001.

The
loss from the discontinued operations of the research and development segment declined from $7.4 million in the first nine months of 2001 to $2.1 million in the period
of 2002. This reduction was the
result of staffing reductions undertaken during the second quarter of 2001 in an effort to conserve cash, resources, the subsequent shut down of the Company's research and development operations in
June 2002, and a reduction in amortization expense associated with goodwill and patents and trademarks.

The
decline in income tax expense from $1.1 million in the first nine months of 2001 to $0.6 million in the same nine months of 2002 was a consequence of the divestiture of
Interfruver, which recorded income tax of $0.7 million in the first nine months of 2001.

The
share of income in subsidiaries allocable to minority interests was a loss of $0.3 million in the first nine months of 2001 as compared with income of $0.1million in the same
nine months of 2002. These allocations of the share of profits were consistent with the minority positions held across the operating subsidiaries of the Company.

Capital Expenditures

During the first nine months of 2002 the Company made capital investments of $1.6 million. The majority of the funds was spent to purchase stakes used to
grow ABSA's tomato and pepper products and construct growing facilities in Todo Santos.

Liquidity and Capital Resources

Statement of Cash Flows.For the nine months ended September 30, 2002, the Company generated $2.4 million of
cash from operating activities. Net income, minority interests share of profit, the addback of depreciation and other non-cash items accounted for the use of $13.1 million. Accounts receivable
and advances to growers were reduced by $13.6 million, and inventories were reduced by $2.9 million, as the Company collected cash on the carryover of the Todo Santos harvest from
year-end 2001 and had a very low level of grower receivables and inventories at the end of the third quarter of 2002 as compared with December 31, 2001. Accounts payable declined by
$2.4 million. This pattern of decreases in receivables, inventories, and payables is consistent with the typical growing and harvesting periods within the year.

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For
the nine months ended September 30, 2002, the Company used $1.2 million in investing activities. Almost all of the cash used to purchase property, plant and equipment
was spent on the fresh produce business. DNAP received net proceeds (after commission) of $0.4 million on the sale of its Brentwood land.

Net
cash used in financing activities during the first nine months of 2002 totaled $2.0 million. A pay down of the preseason credit facility from U.S. banks of $3.2 million
and a reduction in the Company's use of its revolving line of credit accounted for the reduction of this cash usage, as the fresh produce business reduced its line of credit consistent with its
working capital requirements. Accounts due to related parties increase by $6.0 million due to interest being charged on the related party payables.

Bank Debt.All of the Company's $2.1 million of bank debt at September 30, 2002 ($1.6 million of which
was short-term) was associated with Bionova Produce, Inc., the Company's distribution subsidiary in Nogales, Arizona. There are two components to this debt, both of which are guaranteed by
Savia. The first component of the debt is a five-year loan secured by real property and is due August 30, 2006. The second component of the bank debt is a $6 million revolving line of
credit, the principal of which originally was due in full on September 30, 2002, but was extended to November 14, 2002, to permit Bionova Produce to complete a new set of financing
facilities with its bank. While Bionova Produce is working with the bank on a further extension, since November 14th has now passed, this facility is past due, though the bank has
not yet declared an event of default.

Bionova
Produce has been in negotiations with the bank to secure three new credit facilities with an aggregate limit of $10.5 million. These facilities consist of (i) a
revolving line of credit in an amount up to $7.0 million secured by accounts receivable and inventories of Bionova Produce, (ii) a seasonal pre-harvest credit facility in an amount up to
$1.75 million secured by certain physical assets, and (iii) a term credit facility secured by certain physical assets of Bionova Produce in an amount up to $1.75 million. These
three facilities would also be guaranteed by Savia in an amount up to $10.0 million. Though the bank has approved the loan facilities on a preliminary basis, certain terms are still being
negotiated, and the facilities have not yet been secured.

Bionova
Produce already has scaled back its plan to fund certain third party growers because of delays in completing these negotiations and receiving the funds on which it had been
relying. As a result of these cutbacks, ABSA and Bionova Produce expect their revenues for the fourth quarter of 2002 and the first quarter of 2003 to be lower than comparable periods in prior years.
Furthermore, if Bionova Produce experiences any significant delay in securing its new bank facilities, its operations will be adversely affected and Bionova Produce may not have the funds to advance
to ABSA and the third party growers to which it and ABSA have already committed to harvest crops in December. If ABSA is not able to harvest the crops and Bionova Produce does not receive the produce
it had planned to sell over the winter harvest season, the Company will be not generate all of the cash it had forecast and in all likelihood, may not be able to meet all of its financial obligations.

Debt to Savia.At September 30, 2002 Bionova Holding and its subsidiaries were indebted to Savia and its subsidiaries
(other than Bionova Holding) in a total amount of $95.2 million. Of this total $20.7 million was owed by ABSA and is accruing interest at a rate of approximately 9% per annum. Bionova
Holding had debt of $69.0 million to Savia. The Bionova Holding debt currently is accruing interest at a rate of approximately 12.5% per annum. Other subsidiaries of Bionova Holding had related
party accounts due to Savia and its subsidiaries that accounted for the balance of the $5.5 million. All of the Bionova Holding debt originally was due to be paid by March 23, 2002, but
was

19

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extended by agreement between Bionova Holding and Savia until December 31, 2002. The other related party accounts due to Savia and its subsidiaries have varying maturities, and all are due at
various times in 2002. At this time, Bionova Holding does not know how this indebtedness will be handled.

Going Concern Issues.As a result of the Company's operating losses during the past five years and its current financial
structure, there continues to be substantial doubt about the Company's ability to continue as a going concern. Management has been and is continuing to address the Company's financial condition by
shutting down the operations of its research and development business, selling non-core assets of the fresh produce business, and selling and licensing its intellectual property. (Since the end of the
third quarter, ABSA sold some land in Culiacan for $2.5 million and several licenses have been granted on patents held by DNAP.) The Company still must find a solution to the
$95.2 million of debt plus additional interest accruing from September 30, 2002 that is due to Savia and its subsidiaries during 2002 as well as securing new credit facilities with its
bank. There can be no assurance that these actions will result in sufficient working capital to significantly improve the Company's current financial position or its results of operations nor can
there be any assurance the Company will be able to meet its obligations in 2002 or beyond. This raises substantial doubt about the Company's ability to continue as a going concern.

The
unaudited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Disclosure Regarding Forward-Looking Statements

This report on Form 10-Q includes "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. All statements, including without limitation statements contained in this "Management's Discussion and Analysis of Financial Condition and
Results of Operations" other than statements of historical facts included in this Form 10-Q, including statements regarding our financial position, business strategy, prospects, plans and
objectives of our management for future operations, and industry conditions, are forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are
reasonable, we can give you no assurance that these expectations will prove to be correct. In addition to important factors described elsewhere in this report, the following "Risk Factors," sometimes
have affected, and in the future could affect, our actual results and could cause these results during 2002 and beyond, to differ materially from those expressed in any forward-looking statements made
by us or on our behalf. When we use the terms "Bionova," "we," "us," and "our," these terms refer to the Company and its subsidiaries.

RISKS RELATING TO OUR FINANCIAL CONDITION

We may continue to sustain losses and accumulate deficits in the future

We have sustained losses in every year of our existence from 1996 through 2001. As of September 30, 2002 our accumulated deficit was $208.5 million.
For the year ended December 31, 2001, we had a net loss of $56.6 million. The factors that caused these losses, including factors described in this section, may continue to limit our
ability to make a profit in the future.

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We will need additional financing to achieve our growth objectives, which could hurt our financial condition

We will need additional capital to meet our growth objectives and working capital requirements. Our projected cash flows from operations and existing capital
resources, including our existing credit lines, may not be sufficient. Therefore, our ability to pursue these objectives may depend on our ability to obtain additional capital, which could cause us to
incur additional debt or issue additional equity securities. We cannot assure you that additional capital will be available on satisfactory terms, if at all, and, as a result, we may be restricted in
our pursuit of future growth strategies.

Our leveraged position could cause us to be unable to meet our capital needs, which could hurt our financial condition

At September 30, 2002 we had a working capital deficit of $79.3 million and a stockholders deficit of $36.9 million. We had
$2.1 million of debt with banks and $95.2 million of debt with Savia and Savia's subsidiaries. This level of indebtedness may pose substantial risks to our company and to our
stockholders, including the possibility that we may not generate sufficient cash flow to pay our outstanding debts. Our level of indebtedness may also adversely affect our ability to incur additional
indebtedness and finance our future operations and capital needs, and may limit our ability to pursue other business opportunities.

RISKS RELATING TO OUR FARMING AND DISTRIBUTION BUSINESS

Bad weather and crop disease can affect the amount of produce we can grow, which can decrease our revenues and profitability

Weather conditions greatly affect the amount of fresh produce we bring to market, and, accordingly, the prices we receive for our produce. Storms, frosts,
droughts, and particularly floods, can destroy a crop and less severe weather conditions, such as excess precipitation, cold weather and heat, can kill or damage significant portions of a crop. Crop
disease and pestilence can be unpredictable and can have a devastating effect on our crops, rendering them unsalable and resulting in the loss of all or a portion of the crop for that harvest season.
Even when only a portion of our crops are damaged, the profits we could have made on the crop will be severely affected because the costs to plant and cultivate the entire crop will have been incurred
although we may experience low yields or may only be able to sell a portion of our crop.

Labor shortages and union activity can affect our ability to hire workers to harvest and distribute our crops, which can hurt our financial condition

The production of fresh produce is heavily dependent upon the availability of a large labor force to harvest crops. The turnover rate among the labor force is
high due to the strenuous work, long hours, necessary relocation and relatively low pay. If it becomes necessary to pay more to attract labor to farm work, our labor costs will increase.

The
Mexican farm work force retained by ABSA is unionized. If the union attempts to disrupt production and is successful on a large scale, labor costs will likely increase and work
stoppages may be encountered, which would be particularly damaging in our industry where harvesting crops at peak times and getting them to market on a timely basis is critical. The majority of fresh
produce is shipped by truck. In the United States and in Mexico, the trucking industry is largely unionized and therefore susceptible to labor disturbances. As a result, delivery delays caused by
labor disturbances in the

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trucking industry or any other reason could limit our ability to get fresh produce to market before it spoils.

ABSA's reliance on leases and production associations could result in increased costs, which could adversely affect our financial results

ABSA relies on agricultural land leased from others, production associations with other growers, and contract production with third party growers for a large part
of its supply. The average term of the land leases is two years and we expect to renew most of these land leases as they expire. If the other parties to these leases were to choose not to renew their
agreements with ABSA, ABSA would be required to locate alternate sources of supply and/or land or, in some cases, to pay increased rents for land. In addition to increased rental rates, increases in
land costs could result from increases in water charges, property taxes and related expenses. Production associations and contract production with third party growers are generally arranged three to
six months prior to each growing season. The provisions of the contracts with these growers may change from year to year, which can affect the amount of supply, the prices of the produce, and the cost
and profit sharing arrangements among the parties. If these other growers choose not to renew their contracts, ABSA would be required to locate alternate sources of supply, which may or may not be
available.

RISKS RELATING TO OUR INTERNATIONAL OPERATIONS

Legal limitations could affect our ownership of rural land in Mexico, which could decrease our supply of produce causing a decrease in our revenues and profitability

ABSA owns a substantial amount of rural land in Mexico, which it uses to grow fresh fruits and vegetables. Historically, the ownership of rural land in Mexico has
been subject to legal limitations and claims by residents of rural communities, which in some cases could lead to the owner being forced to surrender its land. ABSA has been, and continues to be,
involved in land dispute proceedings as part of its ordinary course of business. If ABSA is required to surrender any of its land, the volume of fresh fruits and vegetables it produces would decline
and adversely affect our profitability. There is currently pending in Mexico a lawsuit challenging the ownership rights of ABSA to rural land it owns in Mexico. If this lawsuit was to be decided
against ABSA, ABSA could lose a total of 7.7% of all the rural land it owns in Mexico.

Currency fluctuations and inflation can increase the cost of our products in the United States and abroad, which decreases our revenues and profitability

While currency exchange rates in Mexico have been relatively stable over the past three years, previous history has shown that these rates can be highly volatile.
For example, in December 1994, the Mexican government announced its intention to float the Mexican peso against the United States dollar and, as a result, the peso devalued over 40% relative to
the dollar during that month. Exchange rate fluctuations impact our subsidiaries' businesses. If the value of the peso decreases relative to the value
of the dollar, then (i) imports of produce into Mexico for distribution become more expensive in peso terms and therefore more difficult to sell in the Mexican market; and (ii) inflation
that generally accompanies reductions in the value of the peso reduces the purchasing power of Mexican consumers, which reduces the demand for all products including produce and, in particular,
imported, branded or other premium-quality produce. Conversely, if the value of the peso increases relative to the value of the dollar, Mexican production costs increase in dollar terms, which results
in lower margins or higher prices with respect to produce grown in Mexico and sold in the United States and Canada.

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Volatile interest rates in Mexico can increase our capital costs

Historically, interest rates in Mexico have been volatile, particularly in times of economic unrest and uncertainty. High interest rates restrict the availability
and raise the cost of capital for our Mexican subsidiaries and for growers and other Mexican parties with whom we do business, both for borrowings denominated in pesos and for borrowings denominated
in dollars. Costs of operations for our Mexican subsidiaries are higher as a result.

Trade disputes between the United States and Mexico can result in tariffs, quotas and bans on imports, including our products, which can hurt our financial condition

Despite the enactment of the North American Free Trade Agreement, Mexico and the United States from time to time are involved in trade disputes. The United States
has, on occasion, imposed tariffs, quotas, and importation bans on products produced in Mexico. U.S. tomato growers have brought dumping claims against Mexican tomato growers and may do so again.
Because some of our subsidiaries produce products in Mexico, which we sell in the United States, such actions, if taken, could adversely affect our business.

GENERAL BUSINESS RISKS

Savia and Ag-Biotech Capital, LLC have substantial control over the Company and can affect virtually all decisions made by its stockholders and directors

Ag-Biotech Capital, LLC beneficially owns 18,076,839 shares of our common stock accounting for 77.0% of all issued and outstanding shares. As a result, Ag-Biotech
Capital, LLC has the requisite
voting power to significantly affect virtually all decisions made by the Company and its stockholders, including the power to elect all directors and to block corporate actions such as an amendment to
most provisions of the Company's certificate of incorporation. This ownership and management structure will inhibit the taking of any action by the Company that is not acceptable to Ag-Biotech
Capital, LLC.

We may incur significant liability as a result of stockholder lawsuits

The Company and its subsidiary, DNA Plant Technology Corporation, have been sued in several lawsuits relating to the 1996 merger transaction (the "Merger") in
which DNAP became a subsidiary of the Company. In those lawsuits, the former preferred stockholders of DNAP alleged they should have received much more consideration for their shares in the Merger
than they did. One of these cases is still pending. If the Company is ultimately found to be liable in this case, the value of the potential judgment could be far more than the Company could afford to
pay.

We may not be able to adapt our management information systems and controls to keep pace with our future business strategy, which could hurt our financial condition

The realization of our business strategy depends on, among other things, our ability to adapt management information systems and controls and to hire, train and
retain qualified employees to allow these operations to be effectively managed. The geographic separation of our subsidiaries' operations exacerbates these issues.

All
subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary
statements disclosed in this section and otherwise in this report.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

The table below provides information about the Company's derivative financial instruments consisting primarily of debt obligations that are sensitive to changes
in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected (contractual) maturity dates. Notional amounts are used to
calculate the contractual payments to be exchanged under the contracts. Weighted average variable rates are based on implied forward rates in the yield curve on September 30, 2002. The
information is presented in U.S. dollar equivalents, which is the Company's reporting currency. The instrument's actual cash flows are denominated in both U.S. dollars and Mexican pesos, and are
indicated accordingly in the table below.

|                 |                           | Expected maturity date
|---------------- | ------------------------- | ----------------------
|
|
|Short-term debt: |                           |                       
|                 | U.S. dollar variable rate |                       
|                 |                           | Average interest rate 
|Long-term debt:  |                           |                       
|                 | U.S. dollar fixed rate    |                       
|                 |                           | Average interest rate 

The
Company tries to use the most cost-effective means to fund its operating and capital needs. Fixed or variable debt will be borrowed in both U.S. dollars and Mexican pesos. The
Company borrows Mexican pesos to provide for its working capital needs in its Mexican operations. At September 30, 2002 the Company had no debt denominated in Mexican pesos. To minimize
exchange risk associated with the importation of products, the Company will enter into forward exchange contracts where the functional currency to be used in the transaction is dollars.

Exchange Rate Risk

At September 30, 2002 the Company did not hold any financial instruments subject to exchange rate risk.

The
Company is exposed to U.S. dollar-to-Mexican peso currency exchange risk due to revenues and costs denominated in Mexican pesos associated with its Mexican subsidiary, ABSA. The
Company expects it will continue to be exposed to currency exchange risks in the future.

Commodity Price Risk

The table below provides information about the Company's fresh produce growing crops inventory and fixed price contracts that are sensitive to changes in
commodity prices. For inventory, the table presents the carrying amount and fair value at December 31, 2001. For the fixed price contracts, the table presents the notional amounts in Boxes, the
weighted average contract prices, and the total dollar contract amount by expected maturity dates, the latest of which occurs within one year from the

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reporting date. Contract amounts are used to calculate the contractual payments and quantity of fresh produce to be exchanged under futures contracts.

|                                     |                                                            | At December 31, 2001
|------------------------------------ | ---------------------------------------------------------- | --------------------
|
|On-balance sheet commodity position: |                                                            |                     
|                                     | Fresh produce crops in process inventory ($US in millions) |                     
|Fixed price contracts:               |                                                            |                     
|                                     | Contract volumes (3,038,000 boxes)                         |                     
|                                     | Weighted average unit price (per 3,038,000 boxes)          |                     
|                                     | Contract amount ($US in millions)                          |                     

In
order to manage the exposure to commodity price sensitivity associated with fresh produce products, the Company enters into fixed price contracts with certain customers which
guarantee specified volumes for the growing season or the year at a fixed price.

Item 4. Controls and Procedures



Under the supervision and with the participation of our management, including our principal executive officer, we conducted an evaluation of our 'disclosure
controls and procedures' (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) within 90 days of the filing date of this report. Based on this evaluation, our
principal executive officer concluded that our disclosure controls and procedures need improvement. (See Item 4(b) below)



In connection with the preparation of the Company's financial statements as of and for quarter ended September 30, 2002, management in conjunction with our
financial advisors identified certain deficiencies in the Company's internal control procedures that would be deemed to be a material weakness under standards established by the American Institute of
Certified Public Accountants. The deficiencies relate to the Company's accounting and financial reporting infrastructure for collecting, analyzing, and consolidating information to prepare the
financial statements for the consolidated Company. These matters have been discussed with our independent accountants and with the Audit Committee of the Board of Directors of the Company. To address
the weakness, the Company plans to review, and if necessary, develop a new set of consolidating systems and procedures for financial statement preparation prior to year-end 2002.

PART IIOTHER INFORMATION

Item 1. Legal Proceedings

The Company, DNAP, and former directors of DNAP are defendants in one remaining shareholder litigation styledGordon K. Aaron et al. v.
Empresas la Moderna, S.A. de C.V., et al.This action was filed in the U.S. federal district court for the Northern District of California action and

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stemmed from the 1996 merger of DNAP and the fresh produce business of Bionova Holding. A substantially identical class action lawsuit styledRobert Kaczak v. Empresas la
Moderna, S.A. de C.V., et al.was filed in the U.S. federal district court for the Northern District of California, and these two cases were then consolidated. The trial court
dismissed all of the plaintiffs' claims, but the Court of Appeals for the Ninth Circuit reinstated some of the claims against Bionova Holding and the individuals who were named as defendants. Bionova
Holding denies any wrongdoing and liability in these matters and intends to vigorously contest these lawsuits.

Item 4. Submission of Matters to a Vote of Security Holders

The annual meeting of stockholders of the Company was held on August 27, 2002. At the meeting, the stockholders elected five directors of the Company. The
results of the voting were as follows:

|Election of Directors |  | Number of Shares Voted For |  | Number of Shares Withheld
|--------------------- |  | -------------------------- |  | -------------------------
|Bernardo Jiménez      |  | 22,507,474                 |  | 37,464                   
|Adrian Rodriguez      |  | 22,507,647                 |  | 37,291                   
|Alejandro Perez       |  | 22,506,584                 |  | 38,354                   
|Alejandro Sanchez     |  | 22,507,637                 |  | 37,301                   
|Dr. Eli Shlifer       |  | 22,507,357                 |  | 37,581                   

Item 5. Other Information

Continued Listing on the American Stock Exchange

By letter dated, September 9, 2002, Bionova Holding was informed of the intention of the American Stock Exchange ("AMEX") to proceed to file an application
with the Securities and Exchange Commission to strike the Company's common stock from listing and registration on the Exchange. Bionova Holding subsequently requested an oral hearing before a Listing
Qualifications Panel of the AMEX. The Company then proceeded to submit certain information to the AMEX and held some discussions with members of the AMEX staff. On October 31, 2002 Bionova
Holding was advised that based on the information the Company had provided, the Staff was reviewing whether to withdraw its September 9, 2002 determination to remove the Company's common stock
from listing and registration on the Exchange. As a consequence, the oral hearing has been delayed for an indeterminate period.

Related Party Transactions

Beginning in the third quarter of 2002, and continuing into the fourth quarter, four of the Company's senior managers deferred receipt of their salary
compensation because of the Company's tight cash situation. At September 30, 2002 this deferred salary compensation amounted to $0.1 million. In addition, the president of the Company's
fresh produce business loaned the Company $0.2 million in the month of August 2002.

In
the third quarter of 2002 DNAP executed a transaction with Seminis Vegetables Seeds, Inc., a majority owned subsidiary of Savia. This transaction provided Seminis with a
non-exclusive right to produce on a worldwide basis, and an exclusive right to sell in Europe and Asia DNAP's patented bell peppers. DNAP received an advance cash payment of $2 million against
future royalty payments. The

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agreement provides that after two years Seminis has the right to terminate the agreement and that DNAP would be required to reimburse Seminis for any unearned portion of the royalty advance.

Controlling Stockholder; Conflicts of Interest

Approximately 77% of the outstanding shares of common stock of the Company are owned of record by Ag-Biotech Capital LLC, a wholly-owned subsidiary of Savia.
Therefore, Savia has the power to elect a majority of the Company's board of directors and to determine the outcome of any action requiring the approval of the holders of the Company's common stock.
This ownership and management structure will inhibit the taking of any action by the Company which is not acceptable to the controlling stockholder.

Certain
of the Company's directors and executive officers are also currently serving as board members or executive officers of Savia or companies related to Savia, and it is expected
that each will continue to do so. Such management interrelationships and intercorporate relationships may lead to possible conflicts of interest.

The
Company and other entities that may be deemed to be controlled by or affiliated with Savia sometimes engage in (i) intercorporate transactions such as guarantees, management
and expense sharing arrangements, shared fee arrangements, joint ventures, partnerships, loans, options, advances of funds on open account and sales, leases and exchanges of assets, including
securities issued by both related and unrelated parties and (ii) common investment and acquisition strategies, business combinations, reorganizations, recapitalizations, securities repurchases
and purchases and sales (and other acquisitions and dispositions) of subsidiaries, divisions or other business units, which transactions have involved both related and unrelated parties. The Company
continuously considers, reviews and evaluates, and understands that Savia and related entities consider, review and evaluate, transactions of the type described above. Depending upon the business, tax
and other objectives then relevant, it is
possible that the Company might be a party to one or more of such transactions in the future in addition to those currently in force. In connection with these activities the Company might consider
issuing additional equity securities or incurring additional indebtedness. The Company's acquisition activities may in the future include participation in the acquisition or restructuring activities
conducted by other companies that may be deemed to be controlled by Savia.

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Item 6. Exhibits and Reports on Form 8-K





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                        |  | BIONOVA HOLDING CORPORATION
|----------------------- |  | ---------------------------
|Date: November 19, 2002 |  |                            
|                        |  | By:                        

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Certification Pursuant to  Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

I,
Bernardo Jimenez, certify that:

|Date: November 19, 2002 |  |  |  |                                                            
|----------------------- |  |  |  | -----------------------------------------------------------
|                        |  |  |  | /s/BERNARDO JIMENEZBernardo Jiménez Chief Executive Officer

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Certification Pursuant to  Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934

I,
Fernando Menendez, certify that:

|Date: November 19, 2002 |  |  |  |                                                                  
|----------------------- |  |  |  | -----------------------------------------------------------------
|                        |  |  |  | /s/FERNANDO MENENDEZFernando Menendez Principal Financial Officer

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CERTIFICATION PURSUANT TO  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  (18 U.S.C. SECTION 1350)

In connection with the accompanying Quarterly Report of Bionova Holding Corporation (the "Company") on Form 10-Q for the period ended September 30,
2002 (the "Report"), I, Bernardo Jimenez, Chief Executive Officer of the Company, hereby certify that to my knowledge:



|Dated: November 19, 2002 |  |  |  |                                                            
|------------------------ |  |  |  | -----------------------------------------------------------
|                         |  |  |  | /s/BERNARDO JIMENEZBernardo Jiménez Chief Executive Officer

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CERTIFICATION PURSUANT TO  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  (18 U.S.C. SECTION 1350)

In connection with the accompanying Quarterly Report of Bionova Holding Corporation (the "Company") on Form 10-Q for the period ended September 30,
2002 (the "Report"), I, Fernando Menendez, Chief Financial Officer of the Company, hereby certify that to my knowledge:



|Dated: November 19, 2002 |  |  |  |                                                                  
|------------------------ |  |  |  | -----------------------------------------------------------------
|                         |  |  |  | /s/FERNANDO MENENDEZFernando Menendez Principal Financial Officer

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INDEX TO EXHIBITS

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