<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

|X|  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the quarterly period ended March 31, 1997

                                       or

|_|  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 For the transition period from ________ to _________

                         Commission File Number: 0-12177

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

             Delaware                                          75-2632242
   (State or other jurisdiction                             (I.R.S. Employer
       of incorporation or                                 Identification No.)
          organization)

6701 San Pablo Avenue
Oakland, California                                               94608
(Address of principal executive offices)                        (Zip Code)

                                 (510) 547-2395
              (Registrant's telephone number, including area code)

      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 x/ No

      As of May 12, 1997, 18,370,640 shares of common stock, par value $0.01 per
share, of DNAP Holding Corporation were outstanding.
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                            DNAP HOLDING CORPORATION

                           CONSOLIDATED BALANCE SHEET
                            Thousands of U.S. Dollars

                                                        March 31,  December 31,
                                                          1997        1996
                                                        ---------   ---------
                                                       (unaudited)
ASSETS
Current assets:
Cash and cash equivalents                               $   8,369   $  10,735
Accounts receivable                                        37,449      30,941
Advances to growers                                         7,020       6,188
Inventories                                                12,606      20,139
Other current assets                                          857       1,158
                                                        ---------   ---------
     Total current assets                                  66,301      69,161
                                                        ---------   ---------
Property, plant and equipment, net                         34,685      34,784
Patents and trademarks, net                                14,184      14,492
Goodwill, net                                              19,042      19,323
Deferred income taxes                                       2,851       2,850
Other assets                                                2,441       1,545
                                                        ---------   ---------
     Total assets                                       $ 139,504   $ 142,155
                                                        =========   =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank loans                                   $  32,194   $  32,110
Current portion of long-term debt                           8,895       9,104
Accounts payable and accrued expenses                      29,851      30,773
Accounts due to related parties                             2,466       5,458
Deferred income taxes                                       4,051       3,592
                                                        ---------   ---------
     Total current liabilities                             77,457      81,037
Long-term debt                                              2,760       2,423
                                                        ---------   ---------
     Total liabilities                                     80,217      83,460
                                                        ---------   ---------
Minority interest                                          11,201       9,545
                                                        ---------   ---------
Stockholders' equity:
Preferred stock, $.01 par value, 5,000 shares
  authorized, no shares issued and outstanding               --          --
Common stock, $.01 par value, 25,000,000 shares
  authorized, 18,370,640 shares issued and outstanding        184         184
Additional paid-in capital                                 78,535      78,535
Accumulated deficit                                       (30,562)    (29,468)
Cumulative translation adjustment                             (71)       (101)
                                                        ---------   ---------
Total stockholders' equity                                 48,086      49,150
                                                        ---------   ---------
     Total liabilities and stockholders' equity         $ 139,504   $ 142,155
                                                        =========   =========

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


                                       -2-
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                            DNAP HOLDING CORPORATION

                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                            Thousands of U.S. Dollars
                           (except per share amounts)

                                                    Three Months Ended March 31,
                                                    ---------------------------
                                                         1997         1996
                                                       --------     --------

Total revenues                                         $ 77,123     $ 51,359
                                                       --------     --------

Cost of sales                                           (68,364)     (44,466)
Selling and administrative expenses                      (5,578)      (3,059)
Research and development expenses                          (566)        --
Amortization of goodwill, patents and trademarks           (895)        (135)
                                                       --------     --------
                                                        (75,403)     (47,660)
                                                       --------     --------

Operating income (loss)                                   1,720        3,699
                                                       --------     --------

Interest expenses                                        (1,108)      (1,658)
Interest income                                             215          510
Exchange gain (loss), net                                   121       (1,268)
Other non-operating income                                  810         --
                                                       --------     --------
                                                             38       (2,416)
                                                       --------     --------

Income (loss) before income tax                           1,758        1,283

Income tax benefit (expense)                             (1,009)      (1,093)
                                                       --------     --------

Net income (loss) before minority interest                  749          190

Minority interest in net loss (income) of
 subsidiaries                                             1,845         (154)
                                                       --------     --------

Net income (loss)                                      $ (1,096)    $     36
                                                       ========     ========

Net income (loss) per share                            $  (0.06)
                                                       ========

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


                                       -3-
<PAGE>

                            DNAP HOLDING CORPORATION

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

                                                    Three Months Ended March 31,
                                                    ---------------------------
                                                        1997         1996
                                                      --------     --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                     $ (1,094)    $    36
Items not affecting cash:
  Minority interest                                      1,845         154
  Depreciation                                             770         701
  Amortization of goodwill, patents and trademarks         588         135
  Deferred income taxes                                    459       1,093
  Gain from sale of property, plant and equipment         (326)       --
Net changes (exclusive of subsidiaries acquired)
  in:
  Accounts receivable and advances to growers, net      (8,157)     (6,944)
  Inventories                                            7,453       3,901
  Other current assets                                     301         322
  Accounts payable and accrued expenses                     (2)      5,131
  Other assets                                            (933)     (1,282)
                                                      --------     -------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES                                                 904       3,247
                                                      --------     -------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment              (1,555)       --
Proceeds from sale of property, plant and equipment        906          80
                                                      --------     -------

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES       (649)         80
                                                      --------     -------

CASH FLOWS FROM FINANCING ACTIVITIES
Net change in short-term borrowings                        422        (247)
Repayments of long-term debt                              (209)       --
Accounts due to related parties                         (2,834)     (1,332)
                                                      --------     -------

NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES                                              (2,621)     (1,579)
                                                      --------     -------

Net increase (decrease) in cash and cash equivalents    (2,366)      1,748
Cash at beginning of year                               10,735       1,580
                                                      --------     -------
Cash at end of period                                 $  8,369     $ 3,328
                                                      ========     =======

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


                                       -4-
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                            DNAP HOLDING CORPORATION

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 1997

Note 1 - Basis of presentation

DNAP Holding Corporation (together with its subsidiaries, the "Company"), a
subsidiary of Bionova, S.A. de C.V., a Mexican corporation ("Bionova Mexico"),
was formed on January 12, 1996 and originally named Bionova U.S. Inc., to be the
holding company of a consolidated group, which includes certain former
subsidiaries of Bionova Mexico (the "Bionova Subsidiaries") and, after
consummation of a merger effective September 26, 1996, DNA Plant Technology
Corporation, a Delaware corporation ("DNAP"), and its subsidiaries. The Bionova
Subsidiaries consist of majority interests in Agricola Batiz, S.A. de C.V., a
Mexican corporation ("ABSA"), International Produce Holding Company, a Delaware
corporation ("IPHC"), and their respective subsidiaries.

Note 2 - Net loss per common share

The weighted average number of common shares outstanding during the first
quarter of 1997 was 18,370,640.

Note 3 - Inventories

Inventories consist of the following:

                                                March 31,    December 31,
                                                  1997          1996
                                                ---------    -----------
                                                Thousands     Thousands

        Finished produce                         $  1,394     $  2,047
        Growing crops                               4,555       11,317
        Advances to suppliers                       1,185        1,274
        Spare parts and materials                   5,294        5,301
        Merchandise in transit and other              595          752
                                                 --------     --------
                                                   13,023       20,691
        Allowance for slow moving inventories        (417)        (552)
                                                 --------     --------
                                                 $ 12,606     $ 20,139
                                                 ========     ========

Note 4 - Potential Acquisitions and Financing

The Company recently signed a letter of intent with United Agricorp, Inc., a 
Delaware corporation ("UAC"), evidencing DNAP Holding's intent to acquire all 
of UAC's current intellectual property assets, including all of UAC's rights 
to and under technology, issued patents, pending patents, trademarks, trade 
secrets, know-how and all similar rights. DNAP has been performing work under 
a research agreement with UAC since 1995 in the area of genetic modification 
of strawberries to improve various traits. UAC and DNAP also each received 
equity participation in the other company under a separate set of agreements 
signed in 1995. The agreed purchase price for UAC's technology assets is $2.4 
million. As UAC has an outstanding payable for research due to DNAP in excess 
of $600,000, the payment at closing by the Company will be reduced by the 
amount of this payable. As part of the transaction, DNAP will surrender to 
UAC all of its UAC shares and the agreement between UAC and DNAP dated 
September 28, 1995, concerning future stock issuances of DNAP stock to UAC if 
the DNAP share price failed to meet a certain level, shall be terminated. 
Also, in consideration for certain non-competition and indemnification 
commitments to be made by UAC's major stockholder, the Company will issue to 
him at the closing options to purchase 50,000 shares of the Company's common 
stock and, on the first anniversary of the Closing, options to purchase an 
additional 50,000 shares of the Company's common stock. The exercise price of 
each option will be the market price of the common stock on the date of 
issuance of that option. The transaction is expected to close during the 
second quarter of 1997. 

                                       -5-
<PAGE>

The Company also is continuing to pursue the acquisition of the minority
interests held by the Batiz family in ABSA and IPHC. The purchase price of
$23.75 million is subject to adjustment based on the results of the due
diligence review currently ongoing. The Company is in discussions with banks to
obtain the necessary financing to complete this transaction.

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

The Company

     DNAP Holding Corporation (together with its consolidated subsidiaries,
unless the context requires otherwise, "DNAP Holding" or the "Company") was
formed in January 1996 and acts as a holding company for (i) Agricola Batiz,
S.A. de C.V., a corporation organized under the laws of the United Mexican
States, of which the Company owns 50.004% ("ABSA"), (ii) International Produce
Holding Company, a Delaware corporation, of which the Company owns 57.7%
("IPHC"), and (iii) DNA Plant Technology Corporation, a Delaware corporation
("DNAP"). The Company acquired its majority interests in ABSA and IPHC on July
1, 1996, by means of a capital contribution from Bionova, S.A. de C.V. ("Bionova
Mexico"). DNAP became a wholly-owned subsidiary of the Company on September 26,
1996, as a result of the merger (the "Merger") of Bionova Acquisition, Inc., a
Delaware corporation that was a wholly-owned subsidiary of the Company, with and
into DNAP. Approximately 70% of the outstanding common stock of the Company is
owned by Empresas La Moderna, S.A. de C.V. ("ELM").

     ABSA engages in the business of growing fresh fruits and vegetables,
primarily tomatoes and peppers, in Mexico and exporting fresh produce to the
United States and other markets. ABSA owns a 50.01% interest in Interfruver de
Mexico, S.A. de C.V., a corporation organized under the laws of the United
Mexican States ("Interfruver"), which engages in the business of marketing and
distributing fresh produce in Mexico, including fruits and vegetables produced
by ABSA. IPHC is a holding company whose subsidiaries are in the business of
marketing and distributing fresh produce in the United States, Canada, Europe,
the Middle East and the Far East, including fruits and vegetables produced by
ABSA. DNAP is an agribusiness biotechnology company focused on the development
and application of genetic engineering and transformation technologies in plants
and, together with its subsidiaries (including FreshWorld Farms, Inc.), the
development and marketing of premium, differentiated, fresh and processed,
branded fruits and vegetables.

Results of Operations

Three Months ended March 31, 1997 Compared to Three Months ended March 31, 1996

     Revenues increased from $51.4 million in the first quarter of 1996 to $77.1
in the first quarter of 1997. Contributing most significantly to these changes
were a $5.7 million increase in the sales of Interfruver and the inclusion of
$21.9 million in revenues generated by DNAP and Royal Van Namen ("RVN"), a
Holland-based fresh produce distributor that exports throughout Europe, the
Middle East, the Far East and North America and in which IPHC acquired a
majority interest in November 1996. Neither of these companies' results were
included in DNAP Holding's results of operations during the first three quarters
of 1996. Interfruver's sales were up by 61% in the


                                       -6-
<PAGE>

first quarter of 1997 versus the same quarter in 1996 due to the addition of new
commodities to its product line and higher selling prices. ABSA's revenues, most
of which were intercompany sales and eliminated in consolidation, were up 47% to
$32.4 million in the first quarter of 1997 as compared with the same quarter in
1996. The increase in ABSA's revenues was attributable to an 18% increase in
production and the higher selling prices that prevailed in the Mexican, U.S.,
and Canadian markets during much of the quarter due to the effect of the Florida
freeze on tomato supply.

     Gross profit (sales less cost of sales) increased from $6.9 million in the
first quarter of 1996 to $8.8 million in the first quarter of 1997. This
increase resulted from the higher selling prices ($5.1 million) in Mexico, the
United States, and Canada and the incremental margin due to the inclusion of
DNAP and RVN ($1.5 million), offset to an extent by a decline in service income
on ABSA's sales of chemicals, fertilizers, and other products to farmers ($1.2
million) and higher cost of sales ($3.5 million). Cost of sales as a 
percentage of sales increased from 86.6% to 88.6% due to unfavorable 
operating results in ABSA's joint farming ventures during the first quarter 
of 1997 because of weather-related effects on their harvest yields and the 
establishment of a reserve by the Company relating to items stemming from the 
due diligence review being performed in connection with the acquisition of 
the minority interests of the Batiz family.

     Selling and administrative expenses increased from $3.1 million in the
first quarter of 1996 to $5.6 million in the first quarter of 1997. This
increase was primarily associated with expenses incurred by DNAP and RVN during
the first quarter of 1997.

     Research and development costs appeared in DNAP Holding's results of
operations for the first time in the fourth quarter of 1996 after the merger
with DNAP. This $0.6 million expense reflects DNAP's research and product
development overhead recorded in the first quarter of 1997.

     The non-cash charge for amortization of goodwill, patents and trademarks
increased by $0.8 million in 1997, emanating from the additional goodwill and
patents relating to the DNAP merger and the RVN acquisition.

     Interest expense decreased by $0.6 million in the first quarter of 1997 as
compared with the same quarter of 1996. This decrease was due to a decline in
the average interest rate that DNAP Holding paid on its debt during the first
quarter.

     Interest income decreased by $0.3 million in the first quarter of 1997 as
compared with the same quarter of 1996. This decrease was due to a lower level
of interest income generated by ABSA on its short-term investments and a lower
level of advances to growers.

     Effective January 1, 1997 Mexico is considered a hyperinflationary
environment since the cumulative inflation during the last three years exceeded
100%. As a result, Interfruver and Comercializadora Premier are translating
their financial statements in a manner similar to that utilized by subsidiaries
whose activities are recorded in currencies which are not their functional
currencies. In the first quarter of 1997 DNAP Holding experienced a net foreign
exchange gain of $0.1 million as compared to a loss of $1.3 million in the first
quarter of 1996 as the peso was significantly more stable during the first
quarter of 1997 than it was during the same quarter in 1996.

     Other non-operating income in the first quarter of 1997 included a gain on
the sale of property, plant and equipment of $0.3 million and a subsidy of $0.4
million received in connection with a special incentive program sponsored by
various Mexican government and banking institutions for companies in the
agriculture, fishing and forestry industries.


                                       -7-
<PAGE>

     While pre-tax income was higher in the first quarter of 1997 as compared 
with the same quarter of 1996, income tax expense decreased from $1.1 million 
in the first quarter of 1996 to $1.0 million in the first quarter 1997. The 
tax provision changed by only $0.1 million because of the lower earnings of 
ABSA, which has a lower tax rate than the other companies in DNAP Holding.

     During the first quarter of 1997, the share of profits allocable to
minority interests was $1.8 million as compared with a loss of $0.2 million in
1996. The 1997 and 1996 allocations of profits and losses are consistent with
the minority positions held across the operating subsidiaries of the Company.

Capital Expenditures

     During the first quarter of 1997, the Company made capital investments of
$1.6 million in property, plant and equipment. The majority of the funds were
spent to complete investment projects that ABSA initiated in 1996 in
temperature-controlled storage space and equipment to reduce spoilage and
shrinkage and enhance the quality of its products.

Liquidity and Capital Resources

     For the three months ended March 31, 1997, the Company generated $.9
million in cash from operations. Cash generated from the results of operations
amounted to $2.2 million (i.e., net income, minority interest, depreciation,
amortization, deferred income taxes, and gain from sale of property, plant, and
equipment). Working capital requirements increased by $1.3 million during the
first quarter of 1997. Two items of working capital showed very large swings and
were affected by the pricing environment that existed at the end of the quarter.
Accounts receivable reflected an increase of $8.2 million in the first quarter
of 1997 because of the abnormally high sales at the end of the first quarter of
1997, as farmers sought to take advantage of the unusually high prices for
tomatoes that prevailed at this time. Inventories reflected a decline of $7.5
million during the first quarter of 1997 due to the high level of harvesting
that took place due to the high product prices.

     Cash used in financing activities during the first quarter of 1997 was $2.6
million due to the payment of almost $3.0 million of an outstanding account
payable to a related party.

     As discussed in the Company's most recent Form 10-K, the Company currently
is pursuing the acquisition of the 49.99% interest in ABSA and the 42.3%
interest in IPHC currently held by the Batiz family. The purchase price of
$23.75 million is subject to adjustment based on the results of the due
diligence review currently being undertaken. The Company is in the process of
discussions with banks to obtain the necessary financing that will permit the
Company to complete this transaction and to continue the Company's aggressive
development and growth of its farming, distribution, and research activities in
the future.

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, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical facts included in this Form 10-Q, including
without limitation statements contained in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and under "Notes to
Unaudited Consolidated Financial Statements" located elsewhere herein regarding
the Company's financial position, business strategy, plans and objectives of
management of the Company for future operations, and industry conditions, are
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct. In addition to
important factors described elsewhere in this report, the following significant
factors, among others, sometimes have affected, and in the future could affect,
the Company's actual results and could cause such results during the remainder
of 1997, and beyond, to differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company:

     MANAGEMENT INFORMATION SYSTEMS AND CONTROLS. The Company's business is
undergoing rapid growth. As a result of this rapid growth, significant strains
have been placed on the management, operations


                                       -8-
<PAGE>

and financial resources of the Company's subsidiaries. The realization of the
business strategy for the Company and its subsidiaries will be dependent upon,
among other things, the ability of the Company to adapt management information
systems and controls and to hire, train and retain qualified employees to allow
the operations thereof to be effectively managed. The geographic separation of
the operations of the Company's subsidiaries and their traditionally
decentralized, family-based management teams exacerbate these issues.

     HISTORICAL LOSSES AND ACCUMULATED DEFICITS. IPHC and ABSA sustained losses
in 1994, 1995 and 1996. DNAP sustained losses in each year since its
incorporation in 1981. There is no assurance that some of the factors that
caused these historical losses will not be present in future periods or that the
Company will be profitable in the future.

     POSSIBLE NEED FOR ADDITIONAL FINANCING. The projected cash flows from
operations and existing capital resources of the Company, including existing
credit lines, may not be sufficient to permit the Company to pursue proposed
business strategies to acquire additional producers, distributors or marketers
and related businesses. Therefore, the ability to pursue such acquisitions may
be dependent upon the Company's ability to obtain additional capital, which
could result in the incurrence of additional debt or potentially dilutive
issuances of additional equity securities. There can be no assurance that the
Company will be successful in obtaining such capital and, as a result, may be
restricted in its pursuit of its future growth and acquisition strategies.

     GOVERNMENTAL AND ECONOMIC RISKS ASSOCIATED WITH FOREIGN OPERATIONS. Nearly
all of the growing and approximately 25% of the Company's sales occur in Mexico.
Foreign operations such as those conducted by the Company, especially in
countries with volatile economies, are subject to political and economic risks,
including political instability, currency controls, currency devaluations,
exchange rate fluctuations, increased credit risks, inflation, foreign tax laws,
changes in import/export or other regulations and tariff and freight rates.
Political and other factors beyond the Company's control, including without
limitation those factors discussed below, could have a materially adverse effect
on the Company's operations.

     Currency Fluctuations and Inflation. The currency exchange rates in Mexico
have historically been volatile. For example, in December 1994, the Mexican
government announced its intention to float the Mexican peso against the United
States dollar and, as a result, the peso devalued over 40% relative to the
dollar during that month. Such exchange rate fluctuations impact the business of
the Company's subsidiaries. If the value of the peso decreases relative to the
value of the dollar, then (i) imports of Chilean and other produce into Mexico
for distribution by the Company's subsidiaries 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.

     Interest Rates. 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 the Company's
subsidiaries that are Mexican companies and for growers and other Mexican
parties with whom they do business, both for borrowings denominated in pesos and
for borrowings denominated in dollars. Costs of operations for these Mexican
entities are higher as a result.

     Trade Sanctions. Notwithstanding the enactment of the North American Free
Trade Agreement, Mexico and the United States from time to time are involved in
trade disputes. On occasion, the United States has imposed tariffs, quotas, and
importation bans on products produced in Mexico. Such actions, if taken, could
subject the Company to an additional financial burden, some or all of which may
not be able to be passed on to consumers.

     AGRIBUSINESS RISKS. A variety of risks are inherent in the agribusiness
industry, including, without limitation, the following:


                                       -9-
<PAGE>

     Supply and Demand. The fresh produce business is particularly sensitive to
fluctuations in supply and demand. When the supply of produce in the market
exceeds the demand for such products, the market price for fresh produce may be
driven down significantly, in some instances below the cost of harvesting and
packing. In such situations it may be uneconomical to harvest a crop, resulting
in a total loss of the costs incurred in growing such crop. Even when market
prices are sufficient to permit recovery of direct harvesting and packing costs,
prices may not be high enough to permit recovery of growing costs and/or
overhead and other indirect costs. In addition, oversupply can affect the prices
obtained for premium quality produce. Oversupply can result from, among other
reasons, an increase in the number of growers, an increase in the acreage
allocated by growers to a particular crop, unusually favorable growing
conditions or increased supply from foreign competitors (which could be caused
by a variety of economic and climatic factors in such competitors' home
countries).

     Limited Barriers to Entry. The relatively low capital requirements for
farming and produce distribution permit relatively easy entrance into the fresh
produce business, which in turn can result in oversupply.

     Weather. Weather conditions greatly affect the amount of fresh produce that
is brought to market, and, accordingly, the prices received for such 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, rendering much of it
unpackable and unsalable. Conversely, unusually favorable weather conditions can
result in oversupply that drives down the prices realized by producers,
including ABSA.

     Crop Disease and Pestilence. Crop disease and pestilence can be
unpredictable and can have a devastating effect on 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 the crop is damaged, the profits a
grower 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 only a
portion of it can be sold.

     Labor Shortages and Union Activity. 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. To the extent it becomes
necessary to pay more to attract labor to farm work, labor costs can be expected
to increase.

     The Mexican farm work force retained by ABSA is unionized. If the union
attempted to disrupt production and were successful on a large scale, labor
costs would likely increase and there could be work stoppages, which would be
particularly damaging in an 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 Mexico, truck
deliveries are sometimes less reliable than in the United States due to, among
other factors, the unreliability of some Mexican trucking companies and drivers
to make deliveries on schedule, poorer quality and maintenance of the trucks
used by Mexican trucking companies and poor road conditions in some areas. In
the United States and in Mexico, the trucking industry is largely unionized and
therefore susceptible to labor disturbances. Delivery delays caused by labor
disturbances in the trucking industry or any other reason limit the ability to
get fresh produce to market before it spoils.

     Availability of Supply. ABSA relies on agricultural land leased from others
and production associations with other growers for a part of its supply. If the
other parties to these leases and other arrangements 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.

     DEPENDENCE ON ONE SUPPLIER. One grower in Baja California, Santa Cruz
Empacadora, S. de R.L. de C.V., accounted in 1996 for approximately 10% of the
consolidated sales of the Company's subsidiaries (excluding DNAP). ABSA has
entered into one-year production association agreements with this grower for
each of the past two years and expects to continue to do so, but there can be no
assurance that the grower will continue to be willing to enter into such
agreements with ABSA on terms satisfactory to ABSA.


                                      -10-
<PAGE>

     GOVERNMENTAL REGULATION. The U.S. activities of the Company's subsidiaries
are subject to extensive regulation by the Food and Drug Administration, the
United States Department of Agriculture, and other federal and state regulatory
agencies in the United States. Similarly, the Mexican activities of the
Company's subsidiaries are subject to extensive regulation by the Secretaria de
Agricultura, Ganaderia y Desarrollo Rural, the Secretaria de Salud, and other
federal and state regulatory agencies in Mexico. Also, certain of the Company's
products may require regulatory approval or notification in the United States or
in other countries in which they are tested, used or sold. The regulatory
process may delay research, development, production, or marketing and require
more costly and time-consuming procedures, and there can be no assurance that
requisite regulatory approvals or registration of certain of its current or
future genetically engineered products will be granted on a timely basis.

     PRODUCT LIABILITY. Certain of the products being marketed and developed by
the Company entail a risk of product liability. While the Company has taken what
it believes are adequate precautions, there can be no assurance that it will
avoid significant product liability exposure.

     NUMEROUS COMPETITORS. The fresh produce industry in general, and the tomato
industry in particular, are characterized by a large number of competitors at
both the production and distribution levels. In the past some of these
competitors have sought to limit the importation of Mexican-grown tomatoes and
peppers into the United States. DNAP is one of many companies engaged in
research and product development activities based on agricultural biotechnology.
Competitors include specialized biotechnology firms, as well as major
pharmaceutical, food and chemical companies, many of which have substantial
financial, technical and marketing resources.

     MARKETING OF PREMIUM QUALITY PRODUCE. The Company's subsidiaries are
currently producing and distributing premium quality fresh fruits and
vegetables. The success of these and future products depends on many variables,
including the ability to produce and make available to the market consistent,
premium quality fruits and vegetables on a year-round basis, consumers'
willingness to pay higher prices for premium quality fruits and vegetables, and
retailers' willingness to carry such fruits and vegetables.

     NO ASSURANCE OF COMMERCIAL SUCCESS OF PRODUCTS BEING DEVELOPED AND
MARKETED. Marketing of several products currently developed by DNAP is in the
early stages, and there can be no assurance that any of these products will be
successful or will produce significant revenues or profits. In addition, a
number of DNAP's product development projects are in the early stages, and there
can be no assurance that these projects will be successful or that any resulting
products will be commercially successful or profitable. In particular, although
DNAP has produced and sold a limited amount of its products, there can be no
assurance that it will be able to produce or market such products on a larger
scale.

     NO ASSURANCE OF PUBLIC ACCEPTANCE OF GENETICALLY ENGINEERED PRODUCTS.
DNAP's second generation products are being developed through the use of genetic
engineering. The commercial success of these products will depend in part on
public acceptance of the cultivation and consumption of genetically engineered
products. There can be no assurance that such products will gain sufficient
public acceptance to be profitable, even if such products obtain the required
regulatory approvals.

     POSSIBLE DEVELOPMENT OF SUPERIOR TECHNOLOGY BY COMPETITORS. The application
of recombinant DNA and related technologies to plants is complex and subject to
rapid change. A number of companies are engaged in research related to plant
biotechnology, including companies that rely on the use of recombinant DNA as a
principal scientific strategy and companies that rely on other technologies.
Technological advances by others could render the Company's products less
competitive. Some of these companies, as well as competitors that supply
non-genetically-engineered products, have substantial resources.

     PROPRIETARY PROTECTION. The Company's success will depend, in part, on its
ability to obtain patents, maintain trade secret protection, and conduct its
business without infringing the proprietary rights of others. There can be no
assurance that others will not develop competing technologies and market
competing products or that DNAP will be able to enforce the patents which it
currently possesses or will be able otherwise to obtain or


                                      -11-
<PAGE>

enforce any patents for which it has filed an application. DNAP also relies upon
unpatented proprietary and trade secret technology.

     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.

                          PART II - OTHER INFORMATION

Item 5. Other Information

Potential Acquisition

     The Company recently signed a letter of intent with United Agricorp, 
Inc., a Delaware corporation ("UAC"), evidencing DNAP Holding's intent to 
acquire all of UAC's current intellectual property assets, including all of 
UAC's rights to and under technology, issued patents, pending patents, 
trademarks, trade secrets, know-how and all similar rights. UAC was 
incorporated in 1993 to commercialize a number of genetic engineering 
technologies that, when applied to certain fruits and vegetables, would 
improve their taste and retard the softening and early spoilage otherwise 
inherent in their ripening process. UAC's current technology portfolio is 
focused on the application of technology to the berry industry, and its 
principal technological assets include (1) exclusive rights to genetically 
engineer a number of the University of California's strawberry cultivars, (2) 
rights to technology from the University of California for sweetness and 
shelf-life extension, and (3) rights from the University of Georgia to genes 
for disease resistance. DNAP signed a research agreement with UAC, dated May 
1, 1995, to perform a research program in the area of genetic modification of 
strawberries to improve various traits, and this research program has been 
ongoing since that time. UAC and DNAP also each received equity participation 
in the other company under a separate set of agreements signed in 1995. The 
agreed purchase price for UAC's technology assets is $2.4 million. As UAC has 
an outstanding payable for research due to DNAP in excess of $600,000, the 
payment at closing by DNAP Holding will be reduced by the amount of this 
payable. As part of the transaction, DNAP will surrender to UAC all of its 
UAC shares and the agreement between UAC and DNAP dated September 28, 1995, 
concerning future stock issuances of DNAP stock to UAC if the DNAP share 
price failed to meet a certain level, shall be terminated. Also, in 
consideration for certain non-competition and indemnification commitments to 
be made by UAC's major stockholder, the Company will issue to him at the 
closing options to purchase 50,000 shares of the Company's common stock and, 
on the first anniversary of the Closing, options to purchase an additional 
50,000 shares of the Company's common stock. The exercise price of each 
option will be the market price of the common stock on the date of issuance 
of that option. The transaction is expected to close during the second 
quarter of 1997.

Controlling Stockholder; Conflicts of Interest

     Approximately 70% of the outstanding shares of common stock of the Company
are owned of record by Bionova International, Inc., an indirect, wholly-owned
subsidiary of ELM. Pursuant to a Governance Agreement dated as of September 26,
1996, between ELM and the Company, ELM (together with its affiliates) may
acquire additional shares of common stock of the Company so long as their
aggregate beneficial ownership of the Company's common stock does not exceed
80.1%, subject to applicable law. Also, pursuant to the Governance Agreement,
ELM 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 ELM or companies
related to ELM, 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 ELM 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


                                      -12-
<PAGE>

transactions have involved both related and unrelated parties. The Company
continuously considers, reviews and evaluates, and understands that ELM 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, such as
the Long Term Funded Research Agreement dated September 26, 1996 between ELM and
DNAP. 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 ELM.

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits

     3.1*  Certificate of Incorporation of the Company

     3.2** Certificate of Amendment to the Certificate of Incorporation of the
           Company

     3.3*  Bylaws of the Company

     27.1  Financial Data Schedule

     ----------

     *    Filed as an exhibit to the Company's Registration Statement on Form
          S-4 (No. 333-09975) and incorporated herein by reference.

     **   Filed as an exhibit to the Company's quarterly report on Form 10-Q for
          the quarterly period ended June 30, 1996 and incorporated herein by
          reference.

(b)  Reports on Form 8-K

     On February 21, 1997, the Company filed a report on Form 8-K dated January
21, 1997 relating to the filing of a lawsuit against the Company by certain of
its stockholders.


                                      -13-
<PAGE>

                                   SIGNATURES

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

                                      DNAP HOLDING CORPORATION


Date:  May 15, 1997                 By:  /s/ ARTHUR H. FINNEL
                                          -------------------------------------
                                          Arthur H. Finnel,
                                          Treasurer and Chief Financial Officer


                                      -14-
<PAGE>

                                INDEX TO EXHIBITS

            3.1*  Certificate of Incorporation of the Company

            3.2** Certificate of Amendment to the Certificate of Incorporation
                  of the Company

            3.3*  Bylaws of the Company

            27.1  Financial Data Schedule

            ----------

            *     Filed as an exhibit to the Company's Registration Statement on
                  Form S-4 (No. 333-09975) and incorporated herein by reference.

            **    Filed as an exhibit to the Company's quarterly report on Form
                  10-Q for the quarterly period ended June 30, 1996 and
                  incorporated herein by reference.


                                      -15-