<PAGE>
                                          
                           SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549

                                     FORM 10-K/A  
                                   AMENDMENT NO. 1

        /X/      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE SECURITIES EXCHANGE ACT OF 1934 (Fee required)

                    FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

        / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934 (No fee required)

               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 of incorporation)         (I.R.S. Employer Identification No.) 

         6701 SAN PABLO AVENUE            
          OAKLAND, CALIFORNIA                           94608   
(Address of principal executive offices)             (Zip Code) 

         REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (510) 547-2395

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE 

             SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                        COMMON STOCK, PAR VALUE $.01 PER SHARE
                                 (Title of class)

     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  / / 

     Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be contained, 
to the best of Registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K.  Yes  / /   No  /X/ 

     Aggregate market value of Common Stock held by nonaffiliates as of March 
18, 1997:  $26,178,162

     Number of shares of Common Stock outstanding as of March 18, 1997: 
18,370,640
                                         
                       DOCUMENTS INCORPORATED BY REFERENCE

     Part III incorporates information by reference from the Registrant's 
definitive proxy statement to be filed for its 1997 annual meeting of 
stockholders.

<PAGE>

     DNAP Holding Corporation (referred to herein as "DNAP Holding" or "the 
Company") has recently reviewed the application of accounting practices 
employed by its majority-owned subsidiary, Agricola Batiz, S.A. de C.V. 
("ABSA").  In the case of ABSA's joint venture farming activities that carry 
over from one calendar year to the next, estimates of total crop production 
costs and crop yields are required to be made to determine expected average 
unit costs.  Expected average unit costs are used to recognize cost of sales 
on a crop that has been partially harvested and sold as of the end of an 
accounting period.  In July 1997, the Company determined that cost of sales 
for two joint ventures for the year ended December 31, 1995 were understated 
by $0.8 million because ABSA had failed to update estimates of cost of sales 
when actual results of operations became known prior to the issuance of the 
1995 financial statements.  The Company further determined that this 
warranted a restatement of its 1995 results of operations and corresponding 
changes to its 1996 financial statements, which are presented in this Form 
10-K/A and more fully described in Note 2 to the Company's consolidated 
financial statements.

















                                     -2- 
<PAGE>

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data set forth below for each of the 
years in the four year period ended December 31, 1996 are derived from the 
consolidated financial statements of DNAP Holding. The consolidated financial 
statements and related notes as of December 31, 1996 and 1995 and the three 
years in the period ended December 31, 1996 are included elsewhere in this 
Form 10-K/A, and the selected consolidated financial information set forth 
below should be read in conjunction with such financial statements and notes. 
The selected consolidated financial data of DNAP Holding include financial 
data for ABSA, International Produce Holding Company, Interfruver de Mexico, 
S.A. de C.V., DNA Plant Technology Corporation and Royal Van Namen as from 
their respective dates of acquisition.

<TABLE>
                                      (THOUSANDS OF DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
                                                     YEARS ENDED DECEMBER 31,                
                                      -------------------------------------------------------
                                                       (RESTATED-
                                                         NOTE 2)
                                              1996        1995        1994         1993    
                                           ---------   ----------   --------     -------   
<S>                                        <C>         <C>          <C>          <C>       
STATEMENT OF OPERATIONS DATA:
  Total revenues. . . . . . . . . . . . .  $ 192,985    $197,586    $ 64,112     $   164   
  Gross profit. . . . . . . . . . . . . .     16,632      19,703      (1,648)     (3,638)  
  Selling and administrative. . . . . . .    (16,195)    (14,608)     (9,509)       (915)  
  Write-off of purchased research and                                                      
   development. . . . . . . . . . . . . .    (12,900)          -           -           -   
  Research and development expenses . . .     (1,244)          -           -           -   
  Amortization of goodwill, patents                                                        
   and trademarks . . . . . . . . . . . .     (1,008)       (538)       (404)       (404)  
  Operating income (loss) . . . . . . . .    (14,715)      4,557     (11,561)     (4,957)  
  Interest expense, net . . . . . . . . .     (3,482)     (5,031)     (1,254)        404   
  Exchange gain (loss), net . . . . . . .        569      (4,748)     (1,473)         (7)  
  Other non-operating income. . . . . . .      2,058           -           -           -   
  Loss before income taxes. . . . . . . .    (15,570)     (5,222)    (14,288)     (4,560)  
  (Provision) benefit for income taxes. .     (2,738)     (2,132)      1,842         513   
  Minority interests. . . . . . . . . . .      1,274       3,510       5,673       1,770   
  Net loss. . . . . . . . . . . . . . . .    (17,034)     (3,844)     (6,773)     (2,227)  
  Net loss per common share (1) . . . . .     ($1.19) 
  Weighted average number of common 
   shares outstanding (1) . . . . . . . . 14,286,318  


                                                         AT DECEMBER 31,            
                                           ---------------------------------------- 
                                           (RESTATED-  (RESTATED-                   
                                             NOTE 2)     NOTE 2)                    
                                              1996        1995      1994     1993   
                                           ----------  ----------  -------  ------- 
BALANCE SHEET DATA:
  Cash and cash equivalents . . . . . .     $ 10,735    $ 1,580    $ 2,540  $ 4,079  
  Accounts and notes receivable, net. .       36,322     32,526     22,649    3,246  
  Inventories . . . . . . . . . . . . .       20,139     14,730     10,450   10,758  
  Total current assets. . . . . . . . .       68,354     48,978     35,761   18,661  
  Total assets. . . . . . . . . . . . .      141,137     88,108     71,682   45,428  
  Bank loans and current portion of 
    long-term debt. . . . . . . . . . .       41,214     33,103     27,977    3,590  
  Total current liabilities . . . . . .       80,939     54,725     40,992    7,371  
  Long-term debt and  payables. . . . .        2,423     10,515      2,223    1,485  
  Stockholders' equity. . . . . . . . .       48,690     14,725     17,839   22,083  
</TABLE>

------------------------------------------------------------------------------ 
(1) Comparative share and per share data for 1995, 1994, 1993 is not presented 
    because the information is not meaningful.

                                     -3- 
<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
          RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with the selected 
financial information of DNAP Holding and the financial statements and related 
notes of DNAP Holding included elsewhere in this Form 10-K/A.

OVERVIEW

     DNAP Holding engages in the production, distribution, and sale of fresh 
produce to wholesalers and retailers in Mexico, the United States, Canada, 
Europe, the Middle East, and the Far East.  Since 1993, the business strategy 
of the Company and its predecessors has been (i) vertical integration within 
the produce/agronomics industry, (ii) growth by acquisition of complementary 
businesses and (iii) aggressive growth of the businesses acquired.  While 
these continue to be important components of the business strategy, DNAP 
Holding wanted to improve its access to basic technology to separate itself 
from others in the produce business by completing the Merger with DNAP.

     DNAP, which was incorporated in Delaware in 1981, is an agribusiness 
biotechnology company focused on the development and application of genetic 
engineering and transformation technologies in plants, as well as development 
and marketing of premium, differentiated, fresh and processed, branded fruits 
and vegetables. DNAP uses advanced breeding, genetic engineering, and other 
biotechniques to achieve improvements in the taste, texture, product form, 
color, and shelf life of produce and to improve production characteristics, 
such as disease resistance and production or processing yields.

     DNAP Holding expects to capitalize on the combination of production, 
distribution, and technology strengths by focusing its longer-term business 
strategy on the development and commercialization of value-added, proprietary 
differentiated products.

     DNAP Holding is seeking to exercise greater control over its production 
and distribution operations to facilitate and strengthen its ability to 
commercialize new products that are developed with DNAP's technology.  DNAP 
Holding's recently-announced agreement to acquire the minority interests in 
IPHC and ABSA is part of this strategy.  The price for acquiring these 
interests has been renegotiated downward by the parties to $19.0 million.  With
respect to ABSA, due to a provision in Mexican law that restricts foreign 
ownership of companies that own agricultural land in Mexico, the parent 
company of DNAP Holding, Bionova, S.A. de C.V. ("Bionova Mexico"), will 
purchase a 20.5% interest and DNAP Holding will own the other 79.5%.  
Accordingly, Bionova Mexico will pay $4.3 million of the total purchase price 
and DNAP Holding will pay $14.7 million.  DNAP Holding is seeking bank debt 
to finance its portion of the acquisition.

     DNAP Holding has recently reviewed the application of accounting 
practices employed by ABSA.  In the case of ABSA's joint venture farming 
activities that carry over from one calendar year to the next, estimates of 
total crop production costs and crop yields are required to be made to 
determine expected average unit costs. Expected average unit costs are used 
to recognize cost of sales on a crop that has been partially harvested and 
sold as of the end of an accounting period.  In July 1997, the Company 
determined that cost of sales for two joint ventures for the year ended 
December 31, 1995 were understated by $0.8 million because ABSA had failed to 
update estimates of cost of sales when actual results of operations became 
known prior to the issuance of the 1995 financial statements.  The Company 
further determined that this warranted a restatement of its 1995 results of 
operations and corresponding changes to its 1996 financial statements, which 
are presented in this Form 10-K/A and more fully described in Note 2 to the 
Company's consolidated financial statements.

RESULTS OF OPERATIONS

YEAR-ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

     DNAP Holding's total revenues declined from $197.6 million in 1995 to 
$193.0 million in 1996.  The primary components of this change were a $5.6 
million decline in other service income, a $16.1 million decrease in IPHC's 
U.S. and Canadian sales, partially offset by a $6.3 million increase in the 
sales of Interfruver in Mexico, and the 


                                     -4-

<PAGE>

inclusion of $8.2 million in sales generated from the partial year results of 
DNAP and Royal Van Namen following their acquisition and merger into DNAP 
Holding.  ABSA's revenues in 1996 and 1995 were $67.4 million and $61.7 
million, respectively, of which $67.0 million and $57.8 million were 
intercompany sales (eliminated in consolidation).  The decline in U.S. and 
Canadian sales reflected the effect of lower average realized prices of fresh 
produce sold during the first six months of the year and a reduction in 
ABSA's production for the U.S. market during the third quarter.  This 
reduction in ABSA's production was a direct result of the Company's decision 
to terminate relationships with some of its growers in 1996 to improve 
product quality, build more stable relationships with its growers, and reduce 
credit losses. Interfruver's sales volume increased from 1995 to 1996 due to 
the addition of new commodities to the products sold by Interfruver, slightly 
higher prices due to improved brand name recognition and quality, and 
additional sales to a major Mexican retailer.  Other service income from the 
sale of materials (seeds, fertilizer, etc.) to contract growers, net of 
costs, included in total revenues declined from 1995 to 1996 as a direct 
consequence of ABSA's decision to terminate relationships with some of its 
growers in 1996, to whom such materials are sold.

     Gross profit (sales less cost of sales) declined from $19.7 million in 
1995 to $16.6 million in 1996.  The negative effects of the lower average 
selling prices ($8.6 million) in the U.S. and Canada and the decline in 
service income ($5.6 million) in Mexico were offset to some extent by the 
incremental margin contribution by DNAP and Royal Van Namen ($1.3 million and 
$.7 million, respectively) and lower cost of sales ($9.1 million).  Included 
in the change in cost of sales is a reduction in the expense recorded in 1996 
versus 1995 associated with the provisions for uncollectible grower and 
customer receivables ($2.0 million and $5.0 million in 1996 and 1995, 
respectively).

     Selling and administrative expenses increased from $14.6 million in 1995 
to $16.2 million in 1996.  This increase was primarily associated with 
expenses incurred by DNAP and Royal Van Namen during the fourth quarter of 
1996 after the Merger and acquisition, respectively, and their incorporation 
into DNAP Holding.  

     Research and product development expenses appeared in DNAP Holding's 
results of operations for the first time in the fourth quarter of 1996.  This 
$1.2 million expense item reflects DNAP's research and product development 
overhead recorded in the fourth quarter.

     In 1996, the Company wrote off $12.9 million of purchased research and 
development resulting from the Merger.  This one-time charge reflects the 
value of in-process research and development programs ongoing at DNAP at the 
time of the Merger, as estimated by an independent appraiser, which was part 
of the purchase price in the transaction.  These product programs were 
considered in-process since the products being developed were in various 
stages of development, have not been commercially introduced, and require 
additional research and development before such products can be produced and 
introduced to the marketplace.  Accordingly, consistent with generally 
accepted accounting principles, purchased research and development must be 
charged off immediately to current income.

     The non-cash charge for amortization of goodwill, patents and trademarks 
increased in 1996 due to the first quarter of amortization charges (recorded 
in the fourth quarter of 1996) emanating from the DNAP Merger and Royal Van 
Namen acquisition, respectively.

     Interest expense decreased by $2.9 million in 1996, or 34%, versus 1995. 
This decrease was due to a decline in the average interest rate that DNAP 
Holding paid on its short term debt during the year.

     Interest income declined from $3.5 million in 1995 to $2.2 million in 
1996.  This decline 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 
on which ABSA collected interest in 1996 versus 1995. 

     In 1996, DNAP Holding experienced a net foreign exchange gain of $.6 
million as compared to a loss of $4.7 million in 1995.  During 1996 the 
peso/dollar exchange rate remained relatively stable throughout the year.  At 
the end of 1994 a significant devaluation of the Mexican peso took place with 
further declines experienced throughout 1995.  As a consequence, large 
exchange losses were experienced in 1995 by ABSA, whose functional currency 
is the U.S. dollar, due to its net peso monetary position.

                                     -5- 
<PAGE>

     Income tax expense increased from $2.1 million in 1995 to $2.7 million 
in 1996.  This increase in expense was attributable to the recognition of a 
deferred tax liability for ABSA arising from Mexican tax law which requires 
expensing of inventory acquisition costs in the year of purchase.  Because 
ABSA had no income in 1996 against which to apply these expenses, the 
deductions resulted in an increase in ABSA's net operating loss carryforward. 
Since realization of such net operating loss carryforwards in their entirety 
is not believed to be sufficiently assured, an increase in the valuation 
allowance against deferred income tax assets was recorded commensurate with 
the increase in deferred income tax assets.

     Other non-operating income in 1996 included a gain on the sale of 
property, plant and equipment of $.3 million and a subsidy of $1.7 million in 
connection with a special incentive program sponsored by various Mexican 
government and banking institutions for companies in the agriculture, fishing 
and forestry industries.

     During 1996 the share of losses allocable to minority interests was $1.3 
million as compared with $3.5 million in 1995.  The 1996 and 1995 allocations 
of losses are consistent with the minority positions held across the operating 
subsidiaries of the Company.

YEAR-ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

     Total revenues during 1995 increased 201% to $197.6 million from $64.1 
million in 1994.  The increase reflects the effect of the start-up of Premier 
(1995 sales of $15.9 million), the acquisition of R.B. Packing by IPHC (1995 
sales of $90.8 million) in December 1994, the acquisition of Interfruver by 
ABSA in January 1995 (1995 sales of $48.8 million), the growth of TDI (1995 
sales of $32.3 million), and service income, net of costs ($5.9 million).  
ABSA's sales in 1995 amounted to $61.7 million, of which $57.8 million 
represented intercompany sales (and were eliminated in consolidation).  In 
1994 ABSA's sales amounted to $27.0 million, including $20.9 million of sales 
to R.B. Packing prior to its acquisition by IPHC.  The balance of the sales 
in 1994 was generated by IPHC after its acquisition in December, 1994.

     Gross profit was negative in 1994.  In 1995, gross profit was 10.0% of 
total revenues, reflecting the effects of higher average sales prices, sales 
volumes and harvest yields versus those in 1994.

     Selling and administrative expenses increased 53.7% to $14.6 million 
from $9.5 million, but decreased as a percentage of sales from 14.8% in 1994 
to 7.4% in 1995 reflecting higher sales volumes in 1995.   

     The non-cash charge for amortization of goodwill increased in 1995 due 
to the acquisition of IPHC in December 1994 and Interfruver in January 1995.

     Interest expense increased from $2.2 million in 1994 to $8.5 million in 
1995 reflecting the higher average levels of borrowing outstanding during the 
year and the higher average cost of borrowing during 1995 (16.4%) as compared 
to 1994 (12.1%).  The increased borrowings were required to fund the higher 
working capital requirements associated with the greatly expanding sales 
activities, and advances provided to growers.  Interest income increased from 
$.9 million in 1994 to $3.5 million in 1995 reflecting the increased level of 
financing provided to growers and higher interest rates in Mexico during 
1995.  Exchange losses relate primarily to the significant effects of the 
devaluation of the Mexican peso on the net peso monetary position of ABSA, 
whose functional currency is the U.S. dollar.

     Income tax expense increased to $2.1 million in 1995 from a benefit of 
$1.8 million in 1994 due to income tax payable by IPHC's subsidiaries and the 
effects of the devaluation of the Mexican peso, which reduced the effect of 
future tax benefits from net operating loss carry-forwards in the Mexican 
subsidiaries.

CAPITAL EXPENDITURES

     During 1996 the Company made capital investments of $7.1 million in 
property, plant, and equipment.  The majority of these investments were made 
to expand ABSA's farming activities in Mexico, in particular, the new farming 
operation in Baja California which became one of the sources of produce sold 
by the Company beginning 

                                     -6- 
<PAGE>

in the second quarter of 1996.  ABSA also made a major investment in 
temperature controlled storage space and equipment which it believes will 
reduce spoilage and shrinkage and enhance the overall quality of its products.

     Capital expenditures during 1995 and 1994 were $4.2 million and $6.1 
million, respectively, reflecting primarily the investment levels required to 
acquire and develop ABSA's owned and leased acreage in Mexico.

LIQUIDITY AND CAPITAL RESOURCES

     As of December 31, 1995, the Company had a working capital deficit 
position of $5.7 million.  The deficit position increased to $12.6 million at 
December 31, 1996.  The primary reason for this increase is certain long-term 
debt which is scheduled to mature in May 1997 and was therefore reclassified 
to current liabilities. The Company is beginning the process of negotiating 
long-term financing arrangements.  Cash provided by Bionova Mexico was 
predominantly used to make acquisitions and acquire property, plant and 
equipment.

     For the year ended December 31, 1996 the Company generated $5.8 million 
in cash from operations, which was due primarily to changes in certain working
capital components.  After adjusting for the impact of consolidating DNAP and 
Royal Van Namen at the time of the Merger and acquisition, respectively, 
accounts receivable reflected a decline due to lower sales in December of 
1996 as compared with 1995, and advances to growers also declined due to the 
Company's decision to discontinue relationships with some of its growers in 
1996.  After adjusting for the consolidation of DNAP and Royal Van Namen, 
accounts payable and accrued expenses increased $5.6 million during 1996.  A 
primary driver of this was ABSA ($3.5 million), which invested heavily in 
property, plant and equipment and its growing operations during the last few 
months of 1996, resulting in a higher level of payables at December 31, 1996 
as compared with December 31, 1995.  The second major contributor to the 
increase in accounts payable was FreshWorld Farms, which ramped up its sourcing
of products at the end of 1996.  Partially offsetting these two positive impacts
on cash flows was a $5.0 million increase in inventories, which derived entirely
from the increase in ABSA's growing operations at the end of 1996.

     In addition to the capital expenditures discussed above, investment 
requirements reflected in the cash flows include the Merger with DNAP and the 
acquisition of Royal Van Namen.  The Company made a net investment of $6.7 
million in DNAP prior to the Merger.  The Company advanced DNAP $10.5 million,
and DNAP provided $3.8 million of cash at September 26, 1996, the date of the 
Merger. The Company made a net investment of $1.2 million in Van Namen. The 
Company paid $1.5 million for the Van Namen acquisition, and Van Namen provided
$.3 million of cash on November 30, the date of acquisition.

     Cash provided by financing activities during 1996 was $17.8 million.  The
great majority of this cash was received in the form of a capital contribution
by Bionova Mexico in connection with the Merger.

     The Company's Board of Directors has authorized management to pursue the 
acquisition of the 49.99% interest in ABSA and the 42.3% interest in IPHC 
currently held by the Batiz family.  The original purchase price of $23.75 
million has been adjusted downward to $19.0 million based on the results of the
due diligence review, ABSA's performance, and other factors.  As explained 
above, Bionova Mexico will purchase a minority interest in ABSA to comply 
with Mexican laws regarding foreign ownership of companies that own 
agricultural land in Mexico.  Accordingly, the Company's portion of the 
purchase price is $14.7 million.  The Company is currently seeking bank debt 
to obtain the necessary financing to complete this transaction and to 
continue the Company's aggressive development and growth of its farming, 
distribution, and research activities in the future.

DISCLOSURES REGARDING FORWARD LOOKING STATEMENTS

     This report on Form 10-K/A 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-K/A, 
including without limitation statements contained in this "Management's 
Discussion and Analysis of Financial Condition and Results of Operations" and 
under "Notes to the 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 

                                     -7- 
<PAGE>

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 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 dilative 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 

                                     -8- 
<PAGE>

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:

     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.

                                     -9- 
<PAGE>

     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.

     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.

                                    -10- 
<PAGE>

     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 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.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Report of Independent Accountants, and the consolidated financial 
statements of the Company and the notes thereto appear on the following pages.












                                    -11- 
<PAGE>
                                       
                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
  and Stockholders of
  DNAP Holding Corporation

     In our opinion, the accompanying consolidated balance sheet and the 
related consolidated statements of results of operations, of changes in 
stockholders' equity and of cash flows, after the restatement described in 
Note 2, present fairly, in all material respects, the financial position of 
DNAP Holding Corporation and its subsidiaries at December 31, 1996 and 1995, 
and the results of their operations and their cash flows for each of the 
three years in the period ended December 31, 1996, in conformity with 
generally accepted accounting principles.  These financial statements are the 
responsibility of DNAP Holding Corporation management; our responsibility is 
to express an opinion on these financial statements based on our audits.  We 
conducted our audits of these statements in accordance with generally 
accepted auditing standards which require that we plan and perform the audit 
to obtain reasonable assurance about whether the financial statements are 
free of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements, 
assessing the accounting principles used and significant estimates made by 
management, and evaluating the overall financial statement presentation.  We 
believe that our audits provide a reasonable basis for the opinion expressed 
above.

PRICE WATERHOUSE LLP

San Diego, California
March 27, 1997,
except as to Note 2 which is as of August 4, 1997

                                      12
<PAGE>

                           DNAP HOLDING CORPORATION
                         (formerly Bionova U.S. Inc.)

                          CONSOLIDATED BALANCE SHEET
                          Thousands of U.S. Dollars

                                                         DECEMBER 31,
                                                    ----------------------
                                                    (RESTATED-  (RESTATED-
                                                     NOTE 2)      NOTE 2)
                                                      1996         1995  
                                                    ---------   ---------
                   ASSETS
Current assets:
Cash and cash equivalents .....................     $ 10,735    $  1,580 
Accounts receivable ...........................       30,941      25,444 
Advances to growers ...........................        5,381       7,082 
Inventories ...................................       20,139      14,730 
Other current assets ..........................        1,158         142 
                                                    --------    -------- 
  Total current assets ........................       68,354      48,978 
                                                    --------    -------- 
Property, plant and equipment, net ............       34,573      25,772 
Patents and trademarks, net ...................       14,492         --  
Goodwill, net .................................       19,323       9,319 
Deferred income taxes .........................        2,850       3,281 
Other assets ..................................        1,545         758 
                                                    --------    -------- 
  Total assets ................................     $141,137    $ 88,108 
                                                    ========    ======== 

       LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank loans .........................     $ 32,110    $ 32,493 
Current portion of long-term debt .............        9,104         610 
Accounts payable and accrued expenses .........       30,773      17,038 
Accounts payable to related parties ...........        5,548       2,735 
Deferred income taxes .........................        3,404       1,849 
                                                    --------    -------- 
  Total current liabilities ...................       80,939      54,725 
Long-term debt ................................        2,423      10,222 
Long-term debt to related parties .............         --           293 
                                                    --------    -------- 
  Total liabilities ...........................       83,362      65,240 
                                                    --------    -------- 
Minority interest .............................        9,085       8,143 
                                                    --------    -------- 
Commitments and contingencies
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 issued and 
  outstanding .................................          184         --  
Additional paid-in capital ....................       78,535         --  
Capital contributed by Bionova (see note 1) ...         --        27,848 
Accumulated deficit ...........................      (29,928)    (12,894)
Cumulative translation adjustment .............         (101)       (229)
                                                    --------    -------- 
                                                      48,690      14,725 
                                                    --------    -------- 
  Total liabilities and stockholders' equity        $141,137    $ 88,108 
                                                    ========    ======== 


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

                                      13 
<PAGE>

                         DNAP HOLDING CORPORATION
                       (formerly Bionova U.S. Inc.)

                    CONSOLIDATED RESULTS OF OPERATIONS
                        Thousands of U.S. Dollars
                       (except per share amounts)
<TABLE>
                                                                  YEAR ENDED DECEMBER 31, 
                                                           ------------------------------------- 
                                                                        (RESTATED-
                                                                          NOTE 2) 
                                                             1996          1995           1994   
                                                           ----------   ----------     --------- 
<S>                                                        <C>          <C>            <C>       
Total revenues ..........................................  $ 192,985    $ 197,586      $  64,112 
                                                           ---------    ---------      --------- 

Cost of sales ...........................................   (176,353)    (177,883)       (65,760)
Selling and administrative expenses .....................    (16,195)     (14,608)        (9,509)
Write-off of purchased research and development .........    (12,900)        --             --  
Research and development expenses .......................     (1,244)        --             --  
Amortization of goodwill, patents and trademarks ........     (1,008)        (538)          (404)
                                                           ---------    ---------      --------- 
                                                            (207,700)    (193,029)       (75,673)
                                                           ---------    ---------      --------- 

Operating income (loss) .................................    (14,715)       4,557        (11,561)
                                                           ---------    ---------      --------- 

Interest expense ........................................     (5,651)      (8,521)        (2,160)
Interest income .........................................      2,169        3,490            906 
Exchange gain (loss), net ...............................        569       (4,748)        (1,473)
Other non-operating income ..............................      2,058         --             --   
                                                           ---------    ---------      --------- 

                                                                (855)      (9,779)        (2,727)
                                                           ---------    ---------      --------- 

Income (loss) before income tax .........................    (15,570)      (5,222)       (14,288)

Income tax (expense) benefit ............................     (2,738)      (2,132)         1,842 
                                                           ---------    ---------      --------- 

Net income (loss) before minority interest ...............   (18,308)      (7,354)       (12,446)

Minority interest in net loss (income) of subsidiaries ...     1,274        3,510          5,673 
                                                           ---------    ---------      --------- 

Net loss ................................................. $ (17,034)   $  (3,844)     $  (6,773)
                                                           =========    =========      ========= 

Net loss per share ....................................... $   (1.19)
                                                           ========= 
</TABLE>


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

                                      14 
<PAGE>

                                 DNAP HOLDING CORPORATION
                               (FORMERLY BIONOVA U.S. INC.)

                 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                 THOUSANDS OF U.S. DOLLARS
                           (RESTATED FOR 1995 AND 1996 - NOTE 2)

<TABLE>
                                            COMMON                                   CUMULATIVE
                                            SHARES     COMMON  PAID-IN  CONTRIBUTED  TRANSLATION  ACCUMULATED          
                                          OUTSTANDING   STOCK  CAPITAL    CAPITAL    ADJUSTMENT     DEFICIT     TOTAL  
                                          -----------  ------- -------  -----------  -----------  -----------  ------- 
<S>                                       <C>          <C>     <C>      <C>          <C>          <C>          <C>     
BALANCES AT DECEMBER 31, 1993                                            $ 24,360                   $(2,277)   $22,083 
Investment by Bionova, S.A. de C.V......                                    2,552                                2,552 
Net loss................................                                                             (6,773)    (6,773)
Translation adjustment..................                                                $ (23)                     (23)
                                                                         --------       -----      --------   -------- 
BALANCES AT DECEMBER 31, 1994                                              26,912         (23)       (9,050)    17,839 
Investment by Bionova, S.A. de C.V......                                      936                                  936 
Net loss................................                                                             (3,844)    (3,844)
Translation adjustment..................                                                 (206)                    (206)
                                                                         --------       -----      --------   -------- 
BALANCES AT DECEMBER 31, 1995                                              27,848        (229)      (12,894)    14,725 
Issuance of shares for cash upon the
  formation of Bionova U.S., Inc. ......      25,000           $    25                                              25 
Issuance of shares for cash and
  upon transfer of Bionova S.A.
  de C.V.'s interests in the
  Bionova subsidiaries..................     270,922    $  3    32,845    (27,848)                               5,000
Issuance of shares to Bionova, S.A.
  de C.V. prior to the merger...........      52,800       1     5,279                                           5,280
Shares issued to DNA Plant
  Technology stockholders upon
  consummation of the merger............   5,511,192      55    32,511                                          32,566
Shares issued to Bionova International,
  Inc. in connection with merger and
  capital contribution..................  12,510,726     125     7,875                                           8,000
Net loss................................                                                            (17,034)   (17,034)
Translation adjustment..................                                                  128                      128
                                          ----------    ----   -------   --------       -----      --------   --------
BALANCES AT DECEMBER 31, 1996...........  18,370,640    $184   $78,535       --         $(101)     $(29,928)  $ 48,690
                                          ==========    ====   =======   ========       =====      ========   ========
</TABLE>

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

                                     15 
<PAGE>

                                       DNAP HOLDING CORPORATION
                                     (formerly Bionova U.S. Inc.)

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

<TABLE>
                                                                       Year Ended December 31,
                                                                  -------------------------------- 
                                                                          (Restated-Note 2)
                                                                     1996        1995       1994
                                                                  ----------   --------   -------- 
<S>                                                                <C>         <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $  (17,034)  $ (3,844)  $ (6,773)
Items not affecting cash:
  Minority interest . . . . . . . . . . . . . . . . . . . . . . .     (1,274)    (3,510)    (5,673)
  Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . .      2,244      2,805      2,858 
  Amortization of goodwill, patents and trademarks. . . . . . . .      1,008        538        404 
  Write-off of purchased research and development . . . . . . . .     12,900         --         -- 
  Deferred income taxes . . . . . . . . . . . . . . . . . . . . .      1,986      2,132     (1,842)
  Gain from sale of property, plant and equipment . . . . . . . .       (325)        --         -- 
Net changes (exclusive of changes due to subsidiaries acquired):
  Accounts receivable and advances to growers . . . . . . . . . .      5,675     (9,876)   (11,999)
  Inventories . . . . . . . . . . . . . . . . . . . . . . . . . .     (4,951)    (4,280)       723 
  Other assets. . . . . . . . . . . . . . . . . . . . . . . . . .        (35)      (733)      (109)
  Accounts payable and accrued expenses . . . . . . . . . . . . .      5,627      4,548      2,687 
                                                                  ----------   --------   -------- 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES . . . . . . .      5,821    (12,220)   (19,724)
                                                                  ----------   --------   -------- 
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property, plant and equipment. . . . . . . . . . .     (7,104)    (4,214)    (6,121)
  Advances to DNAP prior to merger, net of cash acquired. . . . .     (6,664)        --         -- 
  Acquisition of subsidiaries, net of cash acquired . . . . . . .     (1,221)    (2,026)      (943)
  Proceeds from sale of property, plant and equipment . . . . . .        535         --         -- 
                                                                  ----------   --------   -------- 
NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . .    (14,454)    (6,240)    (7,064)
                                                                  ----------   --------   -------- 
CASH FLOWS FROM FINANCING ACTIVITIES
  Net change in short-term borrowings . . . . . . . . . . . . . .     (2,142)        --         -- 
  Proceeds from bank loans. . . . . . . . . . . . . . . . . . . .     34,556     13,122     21,932 
  Repayments of long-term debt. . . . . . . . . . . . . . . . . .    (35,451)        --         -- 
  Amounts due to related parties. . . . . . . . . . . . . . . . .      2,520      2,506        392 
  Investment by Bionova, S.A. de C.V. . . . . . . . . . . . . . .     18,305        936      2,552 
  Investment by minority interests. . . . . . . . . . . . . . . .         --        936        372 
                                                                  ----------   --------   -------- 
NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . . . . . . . . .     17,788     17,500     25,248 
                                                                  ----------   --------   -------- 
Net increase (decrease) in cash and cash equivalents. . . . . . .      9,155       (960)    (1,540)
Cash at beginning of period . . . . . . . . . . . . . . . . . . .      1,580      2,540      4,080 
                                                                  ----------   --------   -------- 
Cash at end of period . . . . . . . . . . . . . . . . . . . . . . $   10,735   $  1,580   $  2,540 
                                                                  ==========   ========   ======== 

SUPPLEMENTAL CASH FLOW DATA
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . $    4,438   $  4,578   $  1,874 
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . $    1,693   $    996        -- 
NONCASH INVESTING AND FINANCING ACTIVITIES
Contribution of Bionova, S.A. de C.V. investment in
  subsidiaries for common stock . . . . . . . . . . . . . . . . . $   27,848         --         -- 
Patents and trademarks resulting from merger with
  DNA Plant Technology Corporation. . . . . . . . . . . . . . . . $   14,800         --         -- 
</TABLE>

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


                                       16 
<PAGE>
                                  
                     DNAP HOLDING CORPORATION
                   (formerly Bionova U.S. Inc.)

          Notes to the Consolidated Financial Statements
                 December 31, 1996, 1995 and 1994


NOTE 1 - BASIS OF PRESENTATION

DNAP Holding Corporation (together with its subsidiaries, the "Company"), a 
subsidiary of Bionova, S.A. de C.V. (Bionova), a Mexican corporation, 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 (the "Bionova Subsidiaries") and, after consummation 
of the merger discussed below effective September 26, 1996, DNA Plant 
Technology Corporation and its subsidiaries (DNAP).  The Bionova subsidiaries 
consist of majority interests in Agricola Batiz, S.A. de C.V., a Mexican 
company, and subsidiaries (ABSA) and International Produce Holding Company, a 
Delaware corporation, and subsidiaries (IPHC).

THE COMPANY AND THE BIONOVA SUBSIDIARIES

On January 26, 1996, the Company issued 25,000 shares to Bionova in exchange 
for a capital contribution of $25,000 and borrowed $5 million from Bionova 
under a demand note agreement, at a fixed interest rate of 10.25%.

On July 1, 1996 Bionova transferred its interest in the Bionova Subsidiaries 
to the Company and $5 million in cash in exchange for 270,922 common shares 
and acquired an additional 2,800 common shares of the Company for $280,000 on 
August 1, 1996. Additionally, Bionova contributed the $5 million demand note 
in exchange for 50,000 common shares on August 2, 1996.  On August 5, 1996 
Bionova contributed its shares of the Company's common stock to its 
wholly-owned subsidiary, Bionova International, Inc.

The consolidated financial statements included herein have been prepared 
giving retroactive effect to the contribution of the Bionova Subsidiaries in 
a manner similar to a pooling of interest.

DNAP MERGER

On September 26, 1996, the merger of Bionova Acquisition, Inc., a wholly-owned 
subsidiary of the Company, with and into DNAP (the "Merger") was approved by 
DNAP stockholders and was consummated. Upon consummation of the Merger, 
Bionova International, Inc. contributed an additional $8 million to the 
Company for 12,510,726 common shares, and the former DNAP stockholders 
received 5,511,192 common shares.  The name of the Company was changed to 
DNAP Holding Corporation immediately prior to the Merger.

The value of the shares of the Company's common stock issued in connection 
with the Merger was determined based on the number of shares of DNAP's common 
stock and DNAP's $2.25 Convertible Exchangeable Preferred Stock outstanding, 
at the fair value of the securities based on their respective closing prices 
as quoted on the Nasdaq National Market at July 30, 1996, the date of the 
second amendment to the merger agreement.

                                   17 
<PAGE>

                                  Shares          Fair market    Fair market 
                                Outstanding          value          value    
                             (000's of shares)     per share       ($000's)  
                             -----------------    -----------    ----------- 
DNAP common stock. . . . . .      45,676           $ 0.531         $24,254 
DNAP $2.25 Convertible
 Exchangeable Preferred 
 Stock . . . . . . . . . . .       1,380             3.125           4,312 
                                                                   ------- 
                                                                    28,566 
Costs incurred by Bionova
 associated with the 
 Merger. . . . . . . . . . .                                         4,000 
                                                                   ------- 
                                                                   $32,566 
                                                                   ======= 

The purchase price was allocated to the following items based on a valuation 
of the intangibles by an independent appraiser. 

                                                    ($000's) 
                                                    -------- 
Patents and trademarks . . . . . . . . . . . . . .   $14,800 
Research and development . . . . . . . . . . . . .    12,900 
Goodwill . . . . . . . . . . . . . . . . . . . . .    10,528 
Net liabilities of DNAP at fair value. . . . . . .    (5,662)
                                                     ------- 
                                                     $32,566 
                                                     =======  

NOTE 2 - RESTATEMENT OF PRIOR YEAR FINANCIAL STATEMENTS

For joint venture farming activities of ABSA that carry over from one 
calendar year to the next, estimates of total crop production costs and crop 
yields are required to be made to determine expected average unit costs.  
Expected average unit costs are used to recognize cost of sales on a crop 
that has been partially harvested and sold as of the end of an accounting 
period.  In July 1997, the Company determined that cost of sales for two 
joint ventures for the year ended December 31, 1995 were understated by $0.8 
million because ABSA had failed to update estimates of cost of sales when 
actual results of operations became known prior to the issuance of the 1995 
financial statements.  The 1995 financial statements have been restated for 
the foregoing matter as well as certain other minor items as summarized below:

                                                  ($000's)              
                                              December 31, 1995         
                                     ---------------------------------- 
                                     As Originally Reported    Restated 
                                     ----------------------    -------- 

Cost of sales                                 177,076           177,883 
Selling and administrative expenses            14,397            14,608 
Operating income                                5,575             4,557 
Interest expense                                8,430             8,521 
Net loss                                       (3,384)           (3,844)
Accumulated deficit                           (12,434)          (12,894)
Stockholders' equity                           15,185            14,725 

In addition, at December 31, 1996, accumulated deficit and stockholders' equity 
as originally reported were $29.5 million and $49.2 million, respectively.  
Accumulated deficit and stockholders' equity at that date have been restated as 
a result of the adjustments discussed above to $29.9 million and $48.7 million, 
respectively.

                                   18 
<PAGE>

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.   Consolidation

The accompanying financial statements include the accounts of (i)
the Company, (ii) the Bionova Subsidiaries, (iii) effective
September 26, 1996, DNAP, and (iv) effective November 30, 1996,
Royal Van Namen.  All intercompany accounts and transactions are
eliminated in consolidation.

b.   Management's estimates and assumptions

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

c.   Revenue recognition

PRODUCE SALES

The Company sells produce on its own account and on behalf of growers and 
other parties on a commissioned basis.  Revenue from such sales is recognized 
when the produce is shipped, net of an allowance for estimated returns.  
Since the Company bears the risk of loss for collection of sales proceeds for 
sales on behalf of growers and other parties on which commissions are earned, 
the associated sales are recognized at the gross sales amounts, net of an 
allowance for estimated returns or other credits.  In the consolidated 
results of operations, 1996 and 1995 sales recognized on a commissioned basis 
and the related commissions earned were as follows:

                                                       ($000's)        
                                               Year ended December 31, 
                                               ----------------------- 
                                                  1996         1995    
                                                 -------     -------   
Sales. . . . . . . . . . . . . . . . . . . . .   $30,455     $35,080   
Commissions earned . . . . . . . . . . . . . .     3,253       3,189   

There were no commissioned sales in 1994.

PRODUCT DEVELOPMENT ACTIVITIES

Revenue from product development activities is recognized during the period 
the Company performs the development efforts in accordance with the term of 
the agreements and activities undertaken.  The revenue is recognized ratably 
over the term of the agreement, which generally approximates the performance 
effort. Revenue that is related to future performance under such agreements 
is deferred and recognized as revenue when earned.

Research and development costs not associated with product development 
activities are expensed as incurred.

d.   Cash and cash equivalents

Cash equivalents are stated at cost, which approximates the fair value.  The 
Company considers all highly liquid and temporary cash investments with 
original maturities of three months or less to be cash equivalents.  The 
Company's policy is to place its cash and cash equivalents with large 
creditworthy financial institutions and to limit the amount of credit 
exposure.

                                   19 
<PAGE>

e.   Advances to growers

Advances to growers are made for supplies, seed, and other growing and 
harvesting costs.  The advances are interest bearing and repaid from amounts 
withheld from sales proceeds due to growers.

f.   Association agreements

The Company has entered into certain participation agreements with growers 
under which the Company shares in the profits and losses associated with 
growing activities.  Since the Company exercises control over the 
associations, the Company proportionally consolidates the results of 
operations of those growing activities in the results of operations.

g.   Inventories

Inventories are stated at the lower of cost or market.  Cost is determined by 
using the first-in, first-out method for finished produce.  Cost of growing 
crops includes direct material and labor and an allocation of indirect costs 
and are accumulated until the time of the harvest, subject to lower of cost 
or market adjustments.

h.   Property, plant and equipment

Property, plant and equipment are stated at their acquisition cost. Additions 
to property, plant and equipment, including significant improvements and 
renewals, are capitalized.  Maintenance and repair costs are charged to 
expense as incurred.  Depreciation is computed using straight-line methods 
over the estimated useful lives of the assets.

i.   Patents and trademarks

The costs of obtaining patents are expensed as incurred.  Acquired patents 
and trademarks are capitalized and amortized over their estimated useful 
lives.  During 1996, the Company recorded amortization expense of $308,000.

j.   Research and product development costs

All research and product development costs incurred or acquired are expensed.

k.   Stock based compensation

As a result of the Merger, DNA Plant Technology Corporation's existing stock 
option plans were assumed by the Company.  In October, 1995, the Financial 
Accounting Standards Board issued Statement No. 123, Accounting for 
Stock-Based Compensation. Statement No. 123 applies to all transactions in 
which an entity acquires goods or services by issuing equity instruments such 
as common stock, except for employee stock ownership plans.  Statement No. 
123 establishes a new method of accounting for stock-based compensation 
arrangements with employees which is fair value based. The statement 
encourages (but does not require) employers to adopt the new method in place 
of the provisions of Accounting Principles Board Opinion (APB) No. 25, 
Accounting for Stock Issued to Employees.  Companies may continue to apply 
the accounting provisions of APB No. 25 in determining net income, however, 
they must apply the disclosure requirements of Statement No. 123.  If the 
Company adopts the fair value based method of Statement No. 123, a higher 
compensation cost would result for fixed option plans and a different 
compensation cost will result for the Company's contingent and variable stock 
option plans.  The recognition provisions and disclosure requirements of 
Statement No. 123 are effective January 1, 1996.  The Company plans to use 
the accounting practice under APB No. 25 previously followed by DNAP.

l.   Concentration of credit risks

Financial instruments which potentially subject the Company to concentrations 
of credit risk consist principally of trade receivables and advances to growers.
Credit risk associated with trade receivables is limited due to the large 

                                   20 
<PAGE>

number of customers comprising the Company's customer base.  Concentration of 
credit risk associated with advances to growers is limited due to the 
geographic dispersion of the growers.  However, there can be no assurance 
that an event outside the Company's control will not occur and cause these 
advances to be at risk.  The Company performs ongoing credit evaluations of 
its customers' and growers' financial condition to determine the need for an 
allowance for uncollectible accounts.

m.   Acquisitions

The underlying assets and liabilities of acquired companies are recorded at 
fair market values and the excess purchase price is recorded as goodwill.  
The Company periodically evaluates the recoverability of the recorded 
goodwill based upon projected operating income of the related subsidiary.  
Goodwill is amortized over twenty years.  Goodwill amortization amounted to 
$0.700 million, $0.538 million and $0.404 million in 1996, 1995 and 1994, 
respectively.

n.   Impairment of long-lived assets

Management periodically reviews for impairment the long-lived assets and 
certain identifiable intangibles to be held and used by the Company whenever 
events or changes in circumstances indicate that the carrying amount of an 
asset may not be recoverable.  An impairment loss is recognized whenever it 
is determined that recoverability is impaired.  Measurement of an impairment 
loss for long-lived assets and identifiable intangibles that management 
expects to hold and use is based on the fair value of the asset.

o.   Income taxes

An income tax provision is made using the assets and liability approach.  
Under this approach, deferred taxes are provided for the differences between 
the financial statement and tax basis of assets and liabilities.  Deferred 
income tax expense (benefit) is the net change during the year in the 
deferred income tax asset or liability.  Current income tax expense is the 
amount of income taxes expected to be payable for the current year.  
Valuation allowances are established when necessary to reduce deferred tax 
assets to the amounts expected to be realized.

p.   Fair value of financial instruments

The carrying value of the Company's financial instruments, including cash and 
cash equivalents, trade receivables and payables, and advances to growers, 
approximate their fair market value due to their short-term maturities.  The 
carrying value of the Company's long-term debt is estimated to approximate 
its fair value.

q.   Translation of financial statements

The financial statements for subsidiaries whose functional currency is not 
the U.S. dollar are translated in the following manner: assets and 
liabilities at the year end rates; stockholders' equity at historical rates 
and results of operations at the monthly average exchange rates.  The effects 
of exchange rate changes are reflected as a separate component of 
stockholders' equity.

For subsidiaries whose activities are recorded in currencies which are not 
their functional currency, the components of the financial statements are 
translated as follows:

BALANCE SHEET:
Current assets, except inventories             year-end
Inventories                                    historical 
Liabilities                                    year-end
Property, plant and equipment                  historical
Stockholders' equity                           historical

                                   21 
<PAGE>

RESULTS OF OPERATIONS:
Sales                                          historical
Cost of sales                                  historical
Depreciation and amortization                  historical
Interest                                       monthly average
Other expenses and income                      monthly average
Income taxes                                   monthly average

Gains and losses in remeasurement arise mainly from the effect of exchange 
rate fluctuations on net monetary items denominated in pesos and are included 
in results of operations.

Effective January 1, 1997, Mexico will be considered a hyperinflationary 
environment since the cumulative inflation over the last three years has 
exceeded 100%.  As a result of this, subsidiaries whose functional currency 
is the Mexican peso will be required to translate their financial statements 
in a manner similar to that utilized by subsidiaries whose activities are 
recorded in currencies which are not their functional currencies.

r.   Net loss per common share

The weighted average number of common shares outstanding for 1996, giving 
retroactive effect to the common shares issued to Bionova upon the 
contribution of its interests in the Bionova subsidiaries and shares issued 
in connection with the merger, was 14,286,318.

s.   Employee benefit plan

DNAP has a savings and retirement plan and trust (the  "401(k) Plan") 
available to all eligible employees of DNAP.  An eligible employee may elect 
to defer, in the form of contributions to the 401(k) Plan, between 1% and 15% 
(in 1% increments) of the total compensation that would otherwise be paid to 
the employee, subject to annual contribution limitations.  An employee's 
contributions are invested at the direction of the employee in various 
investment options and are fully vested and nonforfeitable immediately upon 
contribution.  The 401(k) Plan provides for DNAP contributions in the form of 
common stock or cash, not to exceed 3% of elective salary deferral 
contributions.  During the last quarter of 1996 DNAP's cash contributions to 
the 401(k) Plan were approximately $17,000.

t.   Reclassification of costs

Certain financial statement items have been reclassified to conform to the 
current year's format.  The most significant of these items was the 
reclassification of distribution costs from selling, general and 
administrative expenses to cost of sales.  Management believes that this 
reclassification is a more accurate reflection of the nature of these 
expenses in the operations of the business than the manner in which they had 
been classified previously. During the years ended December 31, 1996, 1995, 
and 1994 distribution costs amounted to $12.3 million, $14.8 million, and 
$6.7 million, respectively.

NOTE 4 - ACQUISITIONS AND MERGERS

During the years ended December 31, 1996, 1995 and 1994, Bionova and the 
Company acquired control of the following subsidiaries:

-    During 1994, Bionova made a capital contribution toward the formation of 
     Premier Fruits & Vegetables BBL, Inc. (Premier) in the amount of $161,000
     in cash, representing an 80% share of the capital stock.  This investment
     was contributed to IPHC in December, 1994.

-    During December 1994, Bionova acquired 51% of IPHC for $2.2 million in 
     cash.  This U.S. company distributes fresh produce in the United States
     and Canada through its subsidiaries, R.B. Packing, Inc., R.B. 

                                   22 
<PAGE>

     Packing of California, Inc., R.B. Packing of Texas, Inc. (all 100% owned), 
     Tanimura Distributing, Inc. (75% owned), Premier (80% owned), and in 
     Europe, the Middle East, and the Far East through its recent acquisition 
     of Royal Van Namen (discussed below).  The goodwill resulting from this 
     1994 acquisition amounted to $675,000.

-    In January 1995, ABSA acquired a 50.01% stake in Interfruver de Mexico, 
     S.A. de C.V. (Interfruver), a Mexican distributor of fresh produce, for 
     $2.055 million in cash, resulting in the recognition of goodwill of $1.94
     million.  The agreement to acquire Interfruver established that, in 
     addition to the purchase price mentioned above, a contingent payout of 
     $2.0 million could be due to the sellers (the minority stockholders) on an
     earn out basis over a four-year period beginning in 1995.  This contingent
     payment, if any, will result in an adjustment of the original purchase 
     price and a corresponding increase in goodwill and related amortization in
     the future.  No amounts were due or paid in 1995 under this agreement.  The
     amount for 1996 has not yet been determined by the Company.

The following table summarizes the net investment by Bionova in the subsidiaries
acquired through December 31, 1995, which were contributed to the Company in 
1996.

                                                         ($000'S)        
                                                       DECEMBER 31,      
                                                   --------------------  
                                                    1995         1994    
                                                   -------      -------  
COMPANY ACQUIRED
ABSA . . . . . . . . . . . . . . . . . . . . . .   $25,296      $24,360  
Tanimura . . . . . . . . . . . . . . . . . . . .       191          191  
IPHC . . . . . . . . . . . . . . . . . . . . . .     2,200        2,200  
Premier. . . . . . . . . . . . . . . . . . . . .       161          161  
                                                   -------      -------  
                                                   $27,848      $26,912  
                                                   =======      =======  

These acquisitions were accounted for under the purchase method. The companies 
are included in the consolidated financial statements since the date of their 
acquisition.  Tanimura and Premier had no operations prior to their formation 
with Bionova as the controlling stockholder.

-    In November 1996, IPHC acquired a 51% stake in Royal Van Namen (Van Namen),
     a distributor of fresh produce located in The Netherlands, for $1.475 
     million in cash, resulting in the recognition of minimal goodwill.  Under 
     the terms of the purchase agreement, a contingent pay out of as much as 
     $1.945 million could be due to the sellers (the minority stockholders) on 
     an earn out basis over a four-year period beginning in 1997 (based on prior
     year earnings before interest and taxes from the results of operations).  
     This contingent payment, if any, will result in an adjustment of the 
     original purchase price and a corresponding increase in goodwill and 
     related amortization in the future.  The amount for 1996 has not yet been 
     determined by the Company.

The following unaudited pro forma financial information assumes that the Merger 
and Van Namen acquisition occurred at the beginning of 1996 and 1995 and gives 
effect to certain adjustments, including depreciation and amortization of the 
assets acquired, amortization of goodwill, and related income tax effects.

                                   23 
<PAGE>

                                                ($000'S)         
                                                PRO FORMA        
                                               (UNAUDITED)       
                                         YEAR ENDED DECEMBER 31  
                                        ------------------------ 
                                           1996          1995    
                                        ----------    ---------- 

Net sales. . . . . . . . . . . . . .      $257,895      $254,416 
Net loss (1) . . . . . . . . . . . .       (11,045)      (18,224)
Loss per common share (in dollars) .         (0.60)        (0.99)
Pro forma weighted average common 
  shares outstanding . . . . . . . .    18,370,640    18,370,640 

(1)  does not include the $12.9 million write-off of purchased research and 
     development.

NOTE 5 - ACCOUNTS RECEIVABLE

Accounts receivable were comprised of the following:

                                                                ($000'S)      
                                                               DECEMBER 31,   
                                                            ----------------- 
                                                             1996      1995   
                                                            -------   ------- 

Trade. . . . . . . . . . . . . . . . . . . . . . . . . . .  $27,192   $24,452 
Recoverable value-added tax. . . . . . . . . . . . . . . .    1,338       980 
Officers and employees . . . . . . . . . . . . . . . . . .      287        32 
Sundry debtors . . . . . . . . . . . . . . . . . . . . . .    4,143        10 
                                                            -------   ------- 
                                                             32,960    25,474 
Allowance for doubtful accounts and returns. . . . . . . .   (2,019)      (30)
                                                            -------   ------- 
                                                            $30,941   $25,444 
                                                            =======   ======= 

The Company sells its produce primarily to retailers and wholesalers in the 
United States, Mexico, Canada and Europe.  No single customer accounted for 
more than 5% of the Company's sales, and there were no significant accounts 
receivable from a single customer at December 31, 1996 or 1995.

NOTE 6 - ADVANCES TO GROWERS

                                                                ($000'S)      
                                                               DECEMBER 31,   
                                                             ---------------- 
                                                              1996      1995  
                                                             ------    ------ 

Advances to growers. . . . . . . . . . . . . . . . . . . .   $5,050    $5,440 
Advances to related parties. . . . . . . . . . . . . . . .      331     1,642 
                                                             ------    ------ 
                                                             $5,381    $7,082 
                                                             ======    ====== 

The Company has agreements with certain produce growers in Mexico and in the 
United States, whereby a significant portion of growing costs are paid in 
advance by the Company.  The growing costs are recorded as advances to 
growers and are recognized as a component of cost of produce sales when the 
produce is sold.  The advances in Mexico ($4.172 million and $4.882 million 
at December 31, 1996 and 1995, respectively) in some cases are secured by 
promissory notes and/or the right to use the acreage of the grower if the 
advances are not repaid.  

                                     24 
<PAGE>

Advances to growers in the United States ($1.209 million and $2.200 million 
at December 31, 1996 and 1995, respectively) are generally not collateralized.

Advances earned interest at 12% per annum.  Interest income from these 
advances amounted to $0.884 million, $0.811 million, and $0.279 million 
during the years ended December 31, 1996, 1995 and 1994, respectively.

NOTE 7 - INVENTORIES

Inventories were comprised of the following:

                                                                ($000'S)      
                                                               DECEMBER 31,   
                                                            ----------------- 
                                                             1996      1995   
                                                            -------   ------- 

Finished produce . . . . . . . . . . . . . . . . . . . . .  $ 2,047   $ 3,357 
Growing crops. . . . . . . . . . . . . . . . . . . . . . .   11,317     8,436 
Advances to suppliers. . . . . . . . . . . . . . . . . . .    1,274       718 
Spare parts and materials. . . . . . . . . . . . . . . . .    5,301     1,932 
Merchandise in transit and other . . . . . . . . . . . . .      752       387 
                                                            -------   ------- 
                                                             20,691    14,830 
Allowance for slow moving inventory. . . . . . . . . . . .     (552)     (100)
                                                            -------   ------- 
                                                            $20,139   $14,730 
                                                            =======   ======= 

NOTE 8 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment was composed of the following:

                                                  ($000'S)      
                                                 DECEMBER 31,   
                                              ------------------   ESTIMATED  
                                                1996      1995    USEFUL LIFE 
                                              --------   -------  ----------- 

Land . . . . . . . . . . . . . . . . . . . .  $ 10,399   $ 8,490   
Buildings. . . . . . . . . . . . . . . . . .     9,570     6,767    25 years 
Machinery and equipment. . . . . . . . . . .    14,798     8,155    15 years 
Office equipment . . . . . . . . . . . . . .     2,214     3,341     4 years 
Transportation equipment . . . . . . . . . .     2,505     2,126    10 years 
Vineyards and agricultural tools . . . . . .     2,268     2,672     3 years 
Land improvements and other. . . . . . . . .     4,935       438    13 years 
                                              --------   ------- 
                                                46,689    31,989 
Accumulated depreciation and amortization. .   (12,116)   (6,217)
                                              --------   ------- 
                                              $ 34,573   $25,772 
                                              ========   ======= 

Equipment amounting to $2.370 million and $5.279 million at December 31, 1996 
and 1995, respectively, has been recorded under capitalized leases and 
included above.  Related accumulated depreciation amounted to $0.594 million 
and $0.951 million at December 31, 1996 and 1995, respectively, and the 
related depreciation expense amounted to $0.126 million, $0.317 million and 
$0.317 million for the years ended December 31, 1996, 1995 and 1994, 
respectively.

                                     25 
<PAGE>

NOTE 9 - BANK LOANS AND LONG-TERM DEBT

SHORT-TERM LOANS

Short-term bank loans consist of amounts due to banks, denominated in U.S. 
dollars, under various lines of credit facilities.  The lines of credit 
contain certain covenants which, among other things, require maintenance of 
certain ratio levels and tangible net worth levels.  The Company is in 
compliance with those covenants.  The lines of credit bear interest at prime 
(8.1% and 8.5% at December 31, 1996 and 1995, respectively).

Various bank credit facilities are available with banks whereby the Company 
may borrow upon such terms as the subsidiaries and banks mutually agree.  At 
December 31, 1996, such bank credit facilities amounted to $42.645 million, 
of which $10.535 million was not used.

The amounts due under bank credit facilities with Mexican banks are generally 
renewable at the discretion of the banks.  The Company has informal 
arrangements with these banks which permit additional borrowings, subject to 
the availability of funds by the banks.

ELM and the minority shareholders of ABSA and IPHC provide certain guarantees 
on both the short-term and long-term bank debt.  At December 31, 1996, ELM 
guaranteed $20 million of this debt, and ELM and the minority shareholders 
guaranteed on a 50/50 basis all otherwise unsecured bank debt.  ELM is 
obligated under the terms of the Merger through September, 1999 to provide 
under certain conditions a guarantee of indebtedness of the Company of up to 
$20 million to a financial institution under a loan or a line of credit.

LONG-TERM LOANS

Consolidated obligations under long-term debt arrangements are denominated in 
U.S. dollars and were comprised of:

                                                                ($000'S)      
                                                               DECEMBER 31,   
                                                            ----------------- 
                                                             1996      1995   
                                                            -------   ------- 
Outstanding revolving bank credit facility (bearing 
interest at 8.25%; principal and interest are payable 
in one installment in May 1997) . . . . . . . . . . . . .   $ 7,946   $ 8,508 

Bank loan bearing interest at a rate equivalent to Libor 
plus 1% at December 31, 1996, secured with first mortgage 
on land and buildings in The Netherlands. . . . . . . . .     1,590 

Capital lease obligations secured by the related 
equipment acquired, bearing interest at variable annual
rates (12% at December 31, 1996 and 1995) . . . . . . . .     1,105     1,222 

Mortgage notes payable to banks secured by the related 
real estate, interest at prime (8.75% and 8.5% at
December 31, 1996 and 1995, respectively) plus 1.5%, 
interest payable monthly and maturing on dates through 
October, 2001 . . . . . . . . . . . . . . . . . . . . . .       614       687 

Other . . . . . . . . . . . . . . . . . . . . . . . . . .       272       415 
                                                            -------   ------- 
                                                             11,527    10,832 
Less current portion. . . . . . . . . . . . . . . . . . .    (9,104)     (610)
                                                            -------   ------- 
Long-term debt. . . . . . . . . . . . . . . . . . . . . .   $ 2,423   $10,222 
                                                            =======   ======= 

                                       26 
<PAGE>

The maturities of the long-term debt at December 31, 1996 were as follows:

For the years ended December 31,         (000's)
--------------------------------         -------
1997..................................   $ 9,104
1998..................................       572
1999..................................       400
2000..................................       263
2001..................................       174
Thereafter............................     1,014
                                         -------
                                         $11,527
                                         =======

NOTE 10 - INCOME TAXES

The (charges) credits for income taxes are summarized as follows:


                                                   ($000's)
                                                   --------
                                           Year ended December 31,
                                         ----------------------------
                                          1996       1995       1994
                                         -------    -------    ------
CURRENT
  United States
    Federal...........................   $  (606)   $  (740)     --
    State.............................      (146)      (256)     --
                                         -------    -------    ------
                                            (752)      (996)     --
                                         -------    -------    ------
DEFERRED
  Mexico - Federal....................    (2,007)      (767)   $1,460
  United States
    Federal...........................        21       (323)      382
    State.............................      --          (46)     --
                                         -------    -------    ------
                                          (1,986)    (1,136)    1,842
                                         -------    -------    ------
INCOME TAX (EXPENSE) BENEFIT..........   $(2,738)   $(2,132)   $1,842
                                         =======    =======    ======

Income tax (expense) benefit differs from the amounts computed by
applying the statutory federal income tax rate (34% in both Mexico
and the United States) to pretax income as a result of the
following:

                                                   ($000's)
                                                   --------
                                           Year ended December 31,
                                         -----------------------------
                                          1996       1995       1994
                                         -------    -------    -------
Tax benefit at statutory rate in the
  United States (34%).................   $ 5,189    $ 1,398    $ 4,857
Effect of lower tax rate of 17% for
  agricultural businesses in Mexico...      (316)      (934)    (1,915)
Write-off of purchased research and
  development.........................    (4,386)      --         --
Change in valuation allowance of
  deferred tax assets.................    (2,384)      --         --
Tax loss carryforwards for which tax
  benefit was lost due to the peso
  devaluation.........................      --       (1,235)      (890)
Inflationary component................      (548)    (1,064)      (188)
Depreciation on inflation-indexed
  value of property, plant and
  equipment...........................       328        252        197
State taxes...........................       (97)      (210)      --
Other permanent differences...........      (524)      (339)      (219)
                                         -------    -------    -------
                                         $(2,738)   $(2,132)   $ 1,842
                                         =======    =======    =======

                                     27
<PAGE>

Significant components of the Company's deferred tax liabilities and assets at
December 31, 1996 and 1995 are shown below:

                                                      ($000's)
                                                      --------
                                                    December 31,
                                                  ------------------
                                                   1996       1995
                                                  --------   -------
DEFERRED TAX ASSETS
  Tax loss carryforwards.......................   $ 13,298   $ 2,403
  Non-deductible provisions....................        420       850
  Other........................................         67        49
                                                  --------   -------
Total deferred tax assets......................     13,785     3,302
Valuation allowance............................    (10,935)      (21)
                                                  --------   -------
Net deferred tax assets........................   $  2,850   $ 3,281
                                                  ========   =======
DEFERRED TAX LIABILITIES
  Inventories..................................     (3,376)   (1,818)
  Other........................................        (28)      (31)
                                                  --------   -------
Total deferred tax liabilities.................     (3,404)   (1,849)
                                                  --------   -------
Net deferred tax assets (liabilities)..........   $   (554)  $ 1,432
                                                  ========   =======

The Mexican asset tax of 1.8% on certain net assets is not applicable in the
first four years of operation.  This tax, once applicable, is due if federal
income taxes are not in excess of the asset tax.  It can be recovered in
future years from taxes on future income in excess of future asset tax.

At December 31, 1996 the Company had total tax loss carryforwards of
approximately $50.5 million.  Tax loss carryforwards from the Company's
Mexican subsidiaries can be inflation-indexed in Mexico until the date of
their application against future taxable profits. The tax loss carryforwards
expire from 2004 to 2011.  The tax loss carryforwards are contained in the
Company's Mexican subsidiaries ($23.1 million), U.S. subsidiaries ($26.3
million), and other foreign subsidiaries ($1.1 million).

DNAP had tax loss carryforwards at the date of the merger whose utilization is
limited to $25.1 million.  A full valuation allowance has been provided with
respect to these tax loss carryforwards.

NOTE 11 - STOCK OPTIONS AND WARRANTS

STOCK OPTION PLANS

As a result of the Merger the Company assumed DNAP's existing stock option
plans. The number of shares and option exercise prices were adjusted to give
effect to the exchange ratio stipulated in the merger agreement.  The three
plans are the 1986 Stock Option Plan (the "1986 Plan"), the 1994 Stock Option
Plan (the "1994 Plan"), and the Non-Employee Directors Stock Option Plan (the
"Directors' Plan"), under which a maximum of 160,000, 300,000 and 80,000
shares of common stock, respectively, are available for issuance.
Approximately 52,072 options were outstanding at December 31, 1996 under three
other stock option plans.  It is not anticipated that any further grants will
be awarded under these plans.

The 1986 Plan and the 1994 Plan provided for the granting of incentive stock
options, as defined under the Internal Revenue Code, and non-qualified stock
options, restricted stock and stock appreciation rights to officers and
employees of, and consultants and advisors to DNAP (and now the Company), at
prices which were generally not less than the fair market value of the common
stock on the date of grant and expiring ten years from the date of grant.

                                     28

<PAGE>

The Directors' Plan provided for initial and annual grants of non-qualified
stock options to each non-employee director at prices which were equal to 90%
and 100%, respectively, of the fair market value of DNAP's (and now the
Company's) common stock on the date of grant and expiring ten years from the
date of grant.  An initial director's option became exercisable in five equal
annual installments, beginning one year from the date of grant, and the annual
awards became fully exercisable within one year from the date of grant.

A summary of the activity under all of the Company's stock option plans since
the date of the merger is as follows:

                                                                 DECEMBER 31,
                                                                    1996
                                                                 ------------
Outstanding, at the effective date of the merger:                  134,959
  Granted                                                             --
  Exercised                                                           --
  Expired and canceled.......................................         (191)
                                                                   -------
Outstanding at the end of the year...........................      134,768
                                                                   -------
Available for grant at December 31...........................        1,228
                                                                   -------
Exercisable at December 31...................................       93,275
                                                                   -------
Option prices per share:
  Granted....................................................        none
  Exercised..................................................        none
  Expired or canceled........................................   $8.75 to $201.90
  Outstanding................................................  $13.75 to $128.75

The following table summarizes information about the outstanding stock options
at December 31, 1996.


                                        Weighted
                                        average    Weighted             Weighted
                                       remaining   average     Number   average
                            Options   contractual  exercise  of vested  exercise
Range of exercise prices  outstanding    life       price     options    price
------------------------  ----------- -----------  --------  ---------  --------
$13.75...................      925     8.75 Yrs.    $ 13.75       370   $ 13.75
$20.31 - $29.94..........   33,698     8.13 Yrs.    $ 27.50     4,468   $ 20.98
$30.00 - $38.75..........   35,018     6.99 Yrs.    $ 35.09    27,936   $ 35.37
$41.25 - $50.00..........   37,277     4.28 Yrs.    $ 47.22    35,850   $ 47.21
$51.25 - $76.25..........   22,360     4.80 Yrs.    $ 54.36    19,161   $ 54.46
$100.00 - $128.75........    5,490     0.34 Yrs.    $118.59     5,490   $118.59
                           -------     ---------    -------    ------   -------
  Total..................  134,768     5.90 Yrs.    $ 43.00    93,275   $ 47.96
                           =======     =========    =======    ======   =======

FAIR VALUE DISCLOSURES

Had compensation cost for the Company's option plans been determined based on
the fair value at the grant dates, as prescribed in Statement No. 123, the
Company's net loss and net loss per share would not have been materially
different than the reported amounts.

                           29
<PAGE>

WARRANTS

At December 31, 1996 the Company had the following warrants and options
outstanding, which it assumed in connection with the merger:

  Number of
common shares   Price per share   Expiration date
-------------   ---------------   ---------------
    40,000          $66.50        January, 1999
   407,018           25.00        Third and fourth quarters of 2000
    72,500           17.50        September, 1997
    36,250           17.50        September, 1998 or one year from
                                  the exercise of the unit purchase
                                  options (see below)


During 1995, DNAP issued common stock with warrants that expire during the
third and fourth quarters of 2000, and which entitle the holders to purchase
an additional 407,018 shares of common stock at $25.00 per share.  As part of
the compensation to the consultant who assisted DNAP in placing these
securities, DNAP granted the consultant unit purchase options to purchase
72,500 placement units at $17.50 per unit.  Each placement unit consists of
one share of common stock and a warrant entitling the holder to purchase
during the year following the exercise of the unit purchase options, one half
share of common stock (36,250 in total if all unit purchase options are
exercised) for $17.50 per share.

NOTE 12 - BALANCES AND TRANSACTIONS WITH RELATED PARTIES

ELM CREDIT LINE

The short-term accounts payable to related parties shown in the consolidated
balance sheet bears interest at variable rates comparable to those prevailing
in the market place.  The debt with related parties arose from the long-term
credit line made available to affiliates of ELM and bears interest at variable
rates similar to those prevailing in the market place.  At December 31, 1996,
$2.461 million was outstanding under this arrangement.  During 1996 and 1995,
the Company incurred interest expense of $0.310 million and $0.223 million,
respectively.

INSURANCE AND FACTORING ARRANGEMENTS

The Company contracts for insurance and factoring services with a related
party.  During 1996, 1995 and 1994 the Company incurred insurance expense of
$0.591 million, $0.339 million, and $0, respectively.  Amounts due under
factoring arrangements were $1.2 million at December 31, 1996, and interest
expense incurred in connection with factoring arrangements was $0.123 million
in 1996.

LABOR AND ADMINISTRATIVE SERVICES

ABSA has entered into a contractual arrangement with Copropriedad Agricola
Batiz Hermanos (CABH) pursuant to which CABH provides labor and administrative
services to ABSA, and ABSA pays a fee to CABH based on CABH's costs incurred
in connection with providing such services.  Both Raul Batiz G. and Guillermo
Batiz G. own in excess of 10% of CABH and are deemed, by virtue of their
positions with ABSA, to be executive officers of Bionova.  In 1996, 1995 and
1994, ABSA paid a total of approximately $13.208 million, $7.558 million, and
$12.620 million, respectively to CABH under this arrangement.

                                     30
<PAGE>

ADVANCES TO GROWERS

Advances to growers includes a balance due from a grower who is a relative of
the minority stockholders of ABSA.  The balance with this grower amounted to
$1.642 million at both December 31, 1996 and 1995, and the interest earned on
this balance amounted to $0 and $21,000 during 1996 and 1995, respectively.

ADMINISTRATIVE SERVICES AGREEMENT

An Administrative Services Agreement between the Company and Bionova was
entered into on July 1, 1996.  This agreement provides that Bionova will
render certain administrative and clerical services to the Company and its
direct and indirect subsidiaries in return for payment equivalent to the
compensation, benefits, and other overhead attributable to the employees of
Bionova performing these services, all of which will be performed in Mexico.
The initial term of the agreement was extended to December 31, 1996 and will
continue thereafter for successive one-year terms unless either the Company or
Bionova elects to terminate the agreement. Amounts billed in 1996 by Bionova
under this agreement were $616,000.

LOANS AND CAPITAL CONTRIBUTIONS

In connection with the Merger between Bionova and DNAP, Bionova loaned $5
million to the Company on January 26, 1996 and contributed $5 million to the
capital of the Company on July 1, 1996.  The interest rate on the loan was
10.25% per annum.  The loan was capitalized by Bionova in connection with the
merger on August 2, 1996.  Interest expense for the period that the loan was
outstanding during 1996 amounted to $264,000.  Pursuant to a loan agreement
dated January 26, 1996 between the Company and DNAP, the Company made two
loans to DNAP in equal amounts of $5 million on January 26, 1996 and July 1,
1996.  These loans are secured by the assignment to the Company of DNAP's
right, title, and interest in the patents relating to DNAP's Transwitch gene
suppression technology, and the Company may require additional security under
certain circumstances.  These loans remain outstanding with the balance plus
accrued interest due in full on January 26, 1999.

ABSA CREDIT FACILITY

Beginning in August, 1996, a credit facility was established between a
separate company owned by the Batiz family and ABSA to enable ABSA to fund a
large grower advance and some property, plant and equipment investments.
Loans made under this credit facility were in the form of demand loans bearing
interest at 15.3% per annum.  As of December 31, 1996, the outstanding balance
under this credit facility was $1.479 million.  Interest paid during 1996
under this facility was $89,319.

LICENSE AGREEMENTS

On January 26, 1996, DNAP and DNAP Holding entered into a non-exclusive
license agreement under which DNAP Holding was granted a license to use the
Transwitch patents with certain restrictions and exclusions.  The
non-exclusive license agreement provided for the payment of royalties by DNAP
Holding to DNAP of $250,000 per calendar quarter, except that royalties for
the quarter ended March 31, 1996 were $50,000 and royalties for the quarter
ending June 30, 1996 were $125,000.  During 1996, DNAP Holding accrued
$675,000 in royalty fees relating to this arrangement.

In January, 1996, the Company granted to a related party the option to obtain
a sublicense from the Company to use certain licensed patents in the field of
tobacco products and to make, have made, use and sell certain licensed
products related to the field of tobacco.  The term of this option was for two
months ended March 31, 1996, extendable by the related party for an additional
six months.  In exchange for the option the related party was obligated to pay
$50,000 to the Company for the initial two months and $5,000 per month for
each additional month.  The Company accrued $80,000 during 1996 for this
option.  The option agreement was terminated on September 30, 1996.

                                     31
<PAGE>

LONG-TERM FUNDED RESEARCH AGREEMENT

On September 26, 1996, in connection with the merger, DNAP and Empresas La
Moderna, S.A. de C.V. (ELM), the parent company of Bionova, entered into a
long-term funded research agreement, which provided that ELM, directly or
through its affiliates, will use their best efforts to agree on research
projects to be conducted by DNAP for ELM or its affiliates and which will
result in payments to DNAP of $30 million over a 10-year period, with minimum
funding (subject to carryforwards) of $9 million in any three-year period.
Unless otherwise agreed by the parties, payments of at least $625,000 in
respect of ELM's obligation to fund research projects are to be paid at the
beginning of each calendar quarter.  During the fourth quarter of 1996,
Seminis Vegetable Seed, Inc. ("Seminis"), a subsidiary of ELM, commenced a
limited amount of work under this long-term research agreement and paid to
DNAP $625,000.  An additional payment of $625,000 was made by Seminis to DNAP
in January, 1997.  Seminis and DNAP presently are engaged in discussions to
finalize the list of research projects that will be worked upon along with the
terms of their contract under this agreement.  The final contract between
these two parties is expected to be signed in April, 1997.  Several other
affiliates of ELM have entered into discussions with DNAP to identify
additional research projects that might be worked on under the long-term
funded research agreement.

LEGAL REPRESENTATION

The Secretary of the Company is a shareholder in the law firm which provides
legal services to the Company and several subsidiaries. During 1996 the law
firm billed approximately $100,000 to the Company.

NOTE 13 - OTHER

TOTAL REVENUES

Total revenues in 1996 and 1995 included $0.249 million and $3.160 million,
respectively, representing the income that arose from sales of seeds,
agrochemicals, spare parts and other materials to growers.  In addition, in
1996 and 1995 total revenues included $0.527 million and $0.139 million,
respectively, of technical and support services provided to growers.

OTHER NON-OPERATING INCOME

During 1996, the Company recorded a gain upon sale of property, plant and
equipment of $0.325 million and received a subsidy of $1.733 million in
connection with a special incentive program sponsored by the various Mexican
government and banking institutions for companies in the agriculture, fishing,
and forestry industries.  The subsidy received was determined using specified
formulas based on ABSA's debt outstanding as of June 30, 1996 and the
repayments of principal and interest made by ABSA from July 1 through December
31, 1996.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

CONTINGENCIES -

-   R.B. Packing, Inc., a subsidiary of IPHC, was audited by the Internal
    Revenue Service for 1991, 1992, and 1993.  The IRS has asserted that the
    sales commissions charged to ABSA are too low. The company believes that
    the sales commissions charged between related parties are reasonable and
    supportable.  The IRS also has asserted that certain travel and expense
    charges lack substantiation and that insufficient business purpose has
    been put forward for certain advertising and interest expenses.  The
    Company believes that these expenses also are reasonable and supportable.
    The Appeals Division of the IRS recently filed a 30 day notice regarding
    the three years under consideration and recited a proposed deficiency of
    $941,000 in tax and $188,000 in penalties.  This initial IRS proposal
    disallows certain business expenses in full and adjusts commission rates
    to amounts well in excess of market rates.  The Company intends to defend
    its position vigorously, and on

                                     32
<PAGE>

    the belief that any final tax and penalty that might ultimately be
    assessed will be immaterial, no provision has been made to the financial
    statements.

-   On January 21, 1997, a class action lawsuit was filed by Gordon K. Aaron
    and Fay H. Aaron against ELM, Bionova, Alfonso Romo Garza, Bionova
    International, Inc., the Company, Robert Serenbetz, Gerald Laubach, Evelyn
    Berezin, and Douglas Luke, Jr. in the U.S. federal district court for the
    Northern District of California.  The plaintiffs allege that they were
    owners of shares of DNAP's $2.25 convertible Exchangeable Preferred Stock
    (Preferred Stock) prior to the Merger and that they were entitled to
    receive more consideration for their Preferred Stock than was provided to
    them under the Merger Agreement. Specifically, the plaintiffs allege that
    (i) they were denied the rights they allegedly had under the terms of the
    Preferred Stock to vote on the Merger; (ii) defendants Serenbetz, Laubach,
    Luke, and Berezin (the "Individual Defendants"), each of whom was a
    director of DNAP prior to the Merger and currently serves as a director of
    the Company, breached fiduciary duties of loyalty, candor and care
    allegedly owed to DNAP and its stockholders, (iii) all of the defendants
    aided, knew of or recklessly disregarded, and all of the defendants
    substantially assisted, the conduct giving rise to the alleged breaches of
    fiduciary duty by the Individual Defendants; and (iv) each of ELM,
    Bionova, the Registrant and Alfonso Romo Garza had knowledge of the
    alleged contractual duties allegedly owed by DNAP to the plaintiffs and
    each of such defendants intentionally caused DNAP to breach such alleged
    duties.  The plaintiffs claim to have been damaged by the alleged actions
    of the defendants and therefore the plaintiffs seek unspecified actual and
    punitive damages as well as reimbursement of their litigation costs and
    expenses.  The Company believes the claims of the plaintiffs are without
    merit and intends to vigorously defend against these claims.

-   In a complaint dated August 5, 1996 and filed in the Superior Court for
    the County of Los Angeles, California, the County of Los Angeles sued DNAP
    and others, including several cigarette manufacturers, alleging breach of
    express warranty, unlawful, deceptive and unfair business practices, fraud
    and misrepresentation, and conspiracy, in connection with the manufacture,
    promotion, distribution and sale of tobacco products.  DNAP's involvement
    in the suit arises from allegations regarding research it performed for a
    major tobacco company.  The County of Los Angeles is seeking economic
    damages and injunctive relief.  DNAP denies any wrongdoing or liability in
    this matter and intends to vigorously contest this lawsuit.

-   A former executive of FreshWorld Farms, a subsidiary of DNAP, has
    threatened to institute arbitration with respect to the termination of his
    employment.  The Company believes his allegations are without merit and
    intends to vigorously defend itself if such a proceeding is commenced.

-   On September 25, 1996 a court in the state of Sinaloa, Mexico ruled that
    Olga Elena Batiz Esquer did not have legal title to one hundred hectares
    (approximately 247 acres) of land that she purported to transfer to ABSA
    on June 2, 1990.  This decision was made in concert with a ruling from a
    petition originally presented in 1964 that the former owner of the subject
    land owned rural land in excess of the maximum that was then allowed by
    law in 1964, and that therefore the land rightfully belonged to the
    petitioners.  On October 23, 1996 Ms. Batiz filed a challenge to this
    ruling.  If ABSA is ultimately required to transfer the subject land,
    which constitutes approximately 9% of the total land owned by ABSA,
    Mexican law gives ABSA indemnification rights against Ms. Batiz.

COMMITMENTS -

The Company leases certain facilities and land under non-cancelable operating
lease agreements.  The leases expire at various dates through 2002 and provide
that the Company pay the taxes, insurance and maintenance expenses related to
the leased facilities.  The monthly rental payments are subject to periodic
adjustments.  Certain leases contain fixed escalation clauses, and rent under
these leases is charged ratably over the lease term.

                                     33

<PAGE>

The aggregate future minimum lease obligations under capital and operating 
leases are as follows:

                                                     ($000's)       
FOR THE YEAR ENDING                           --------------------- 
DECEMBER 31,                                  CAPITAL     OPERATING 
------------                                  -------     --------- 
1997 . . . . . . . . . . . . . . . . . . .    $  680        $1,125 
1998 . . . . . . . . . . . . . . . . . . .       284         1,138 
1999 . . . . . . . . . . . . . . . . . . .       189           550 
2000 . . . . . . . . . . . . . . . . . . .        44            29 
2001 . . . . . . . . . . . . . . . . . . .        14            29 
Thereafter . . . . . . . . . . . . . . . .         -            25 
                                              ------        ------ 
Total future minimum lease payments. . . .     1,211         2,896 
Amount representing interest . . . . . . .      (106)            - 
                                              ------        ------ 
                                              $1,105        $2,896 
                                              ======        ====== 


Rent expense incurred under the non-cancelable operating leases totaled 
$0.304 million, $0.623 million and $0.606 million during the years ended 
December 31, 1996, 1995 and 1994, respectively.

NOTE 15 - OPERATIONS IN DIFFERENT GEOGRAPHIC AREAS

Information about the Company's operations by geographic area is summarized 
below:

<TABLE>
                                                    ($000's)                            
                         -------------------------------------------------------------- 
                                                         ADJUSTMENTS AND                
                          MEXICO       US       OTHER     ELIMINATIONS     CONSOLIDATED 
                         --------   --------   -------   ---------------   ------------ 
<S>                       <C>       <C>        <C>       <C>               <C>          
1996
Sales to unaffiliated
  customers              $ 56,868   $117,504   $18,613                       $192,985 
Transfers                  65,877     13,083     1,346      $(80,306)               - 
                         --------   --------   -------      --------         -------- 
Total revenue             122,745    130,587    19,959       (80,306)         192,985 
                         ========   ========   =======      ========         ======== 

Operating income (loss)       318    (12,535)   (1,050)       (1,148)         (14,715)
                         ========   ========   =======      ========         ======== 
Identifiable assets        63,185     79,985    13,883       (15,916)         141,137 
                         ========   ========   =======      ========         ======== 

1995
Sales to unaffiliated
  customers                54,735    125,974    16,877                        197,586 
Transfers                  57,972     12,630         -       (70,602)               - 
                         --------   --------   -------      --------         -------- 
Total revenue             112,707    138,604    16,877       (70,602)         197,586 
                         ========   ========   =======      ========         ======== 

Operating income (loss)     1,248      3,966      (330)         (327)           4,557 
                         ========   ========   =======      ========         ======== 
Identifiable assets        69,090     24,052     1,950        (6,984)          88,108 
                         ========   ========   =======      ========         ======== 

1994
Sales to unaffiliated
  customers                38,851     25,261         -             -           64,112 
                         ========   ========   =======      ========         ======== 

Operating income (loss)   (11,101)      (842)        -           382          (11,561)
                         ========   ========   =======      ========         ======== 
Identifiable assets      $ 57,711   $ 14,949     $ 705      $ (1,683)        $ 71,682 
                         ========   ========   =======      ========         ======== 
</TABLE>

                                      34 
<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: August 5, 1997                   By:    /s/  ARTHUR H. FINNEL       
                                          ------------------------------- 
                                          Arthur H. Finnel,
                                          Treasurer and Chief Financial Officer

<PAGE>
                             INDEX TO EXHIBITS

EXHIBIT
NUMBER      DESCRIPTION 
-------     ----------- 

 27.1       Financial Data Schedule