SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              --------------------

                                    FORM 10-K

(Mark One)

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

                     For the fiscal year ended June 30, 1998

                                       OR

|_|  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934

              For the transition period from _________ to ________

                         Commission file number: 0-19746

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

                DELAWARE                                 04-2912632
        (State of incorporation)            (I.R.S. Employer Identification No.)

             10 ALVIN COURT                                 08816
       EAST BRUNSWICK, NEW JERSEY                        (Zip Code)
(Address of principal executive offices)

                                  732-432-8200
              (Registrant's telephone number, including area code).

           Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $0.01 par value
                                (Title of class)

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 of 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  the  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 [_].

As of October 2, 1998, there were outstanding 11,619,278 shares of Common Stock,
$0.01 par value per share.  The aggregate market value of shares of Common Stock
held by  non-affiliates  of the registrant,  based upon the last sales price for
such stock on that date as reported by NASDAQ, was approximately $8,411,000.

                       DOCUMENTS INCORPORATED BY REFERENCE
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                  Number of Pages: 95 Exhibit Index on Page: 72


<PAGE>

                                     PART I
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Item 1.  Business
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General

     EcoScience   Corporation   ("EcoScience")   is  engaged  in  the  technical
marketing, sales, development and commercialization of products and services for
the following major markets: (i) specialty agriculture;  (ii) postharvest fruits
and vegetables;  and (iii) biological insect control for consumer and industrial
applications.   The  Company  provides  (i)  sophisticated  growing  systems  to
greenhouse operators, (ii) technologically advanced sorting, grading and packing
systems to produce  packers,  (iii)  equipment,  coatings  and  disease  control
products,  including natural  biologicals for protecting fruits,  vegetables and
ornamentals in storage and transit to market,  and (iv)  biological pest control
products to consumers and industry.

     The Company serves the specialty  agriculture  and  postharvest  fruits and
vegetables markets through its three subsidiaries:  Agro Dynamics, Inc. and Agro
Dynamics Canada Inc. (collectively, "AGRO") and EcoScience Produce Systems Corp.
("EPSC") which are hereinafter  referred to collectively  with EcoScience as the
"Company." EcoScience was incorporated under the laws of the State of Florida on
August 27,  1982,  and was  reincorporated  in the State of Delaware on June 29,
1988. On November 18, 1992,  EcoScience  acquired all of the outstanding capital
stock of AGRO,  an East  Brunswick,  New Jersey based  company  that  engineers,
designs,  markets  and  distributes  advanced  technologies,  products,  growing
systems and services for the North  American  intensive  farming,  horticulture,
nursery and produce packing  industries.  On May 24, 1994, the Company  acquired
certain assets and liabilities of American  Machinery  Corporation  ("AMC"),  an
Orlando,  Florida based business that provided  postharvest coating products and
services to the fresh fruit and vegetable markets  throughout the United States,
the  Caribbean,   Central  America  and  South  America.   Concurrent  with  the
acquisition of certain assets and liabilities of AMC, the Company formed EPSC to
combine the AMC product  line and  operating  unit with the  Company's  existing
activities in those markets.  The Company sells termite control products for use
in consumer and industrial  applications through a marketing  collaboration with
Terminix International Company L.P. ("Terminix").  Additionally, the Company has
initiated an extensive  testing,  development and marketing  program with Maruwa
Biochemical  Co., Ltd.  ("Maruwa  Biochemical")  for termite control products in
Japan (see "Collaborative Agreements").

     The Company's  primary  products are (i) advanced  growing systems based on
Stonewool(R),  manufactured by Grodania A/S, (ii) sophisticated sorting, grading
and  packing  systems   manufactured   by  Aweta,   B.V.,   (iii)   computerized
environmental  and irrigation  control systems  manufactured  by H.  Hoogendoorn
Automation B.V., (iv) PacRite(R) and Indian River Gold(TM) coatings manufactured
by EPSC, (v)  Bio-Save(R)  PostHarvest  BioProtectant  line of products and (vi)
Bio-Blast(R) Biological Termiticide ("Bio-Blast") manufactured by EcoScience. In
addition,  the Company  distributes a broad array of specialty  products used in
greenhouses and in fruit, vegetable and ornamental packing.

     The Company operates from its  headquarters in East Brunswick,  New Jersey,
where it maintains sales, marketing and warehousing operations, and its Orlando,
Florida  facility  which contains the Company's  major coatings and  biologicals
production  facility.  The Company also maintains sales and/or customer  service
offices in Visalia, California; Ventura, California;  Littleton, Colorado; Union
Gap,  Washington;  and Milton,  Ontario,  Canada;  and  Mexico;  and a technical
product sourcing office in the Netherlands.



                                       2

<PAGE>

     The Company's  technology  encompasses  the  development and application of
natural microbial pest control agents.  The Company's  technology  enables it to
provide  products  and  technical  support for consumer  and  industrial  insect
control  applications,  and growers and packers of specialty  crops. The Company
also conducts research on the use of microbial agents to control plant diseases,
postharvest  diseases on fruits and vegetables,  and insect pests, as well as on
new applications  for natural coatings to sustain  nutrition and overall quality
in fresh fruits and vegetables.

     In fiscal year ended June 30, 1998,  the Company (i) expanded  marketing of
its Bio-Save line of products for the control of postharvest fruit diseases in a
wide range of commercial applications,  and (ii) began research on a USDA funded
Phase 2 Small Business Innovation Research ("SBIR") program on the prevention of
postharvest  diseases of bananas,  which will continue through fiscal year 2000.
In  addition,  the  Company  expects  to  conduct  tests to extend  the range of
performance and applicability for both its Bio-Save line of products and for its
Bio-Blast insect control product.


Merger

     Effective  September  30, 1998,  Agro Power  Development,  Inc., a New York
corporation ("APD") became a wholly owned subsidiary of EcoScience pursuant to a
Merger  Agreement  dated April 28, 1998 and amended and  restated as of July 31,
1998. Details of the merger are contained in the Company's Proxy Statement dated
August 10, 1998, which was filed with the Securities and Exchange Commission.

     APD is,  in terms of  total  acreage  controlled  by a single  entity,  the
largest  producer of premium  quality,  greenhouse  grown tomatoes in the United
States.  APD develops,  constructs and operates  highly  intensive  agricultural
greenhouse  projects  and markets and sells the  vegetable  production  of these
facilities,  as well as fresh vegetables  produced by other greenhouse  growers,
under its Village Farms(R) brandname as a consumer product,  primarily to retail
supermarkets  and dedicated  wholesale  distribution  companies  throughout  the
United States.

     APD currently  operates eight  greenhouse  facilities in the United States,
including  one  facility   which  is  currently   under   construction   and  is
approximately  sixty  percent (60%)  complete.  If the  construction  of the new
facility is  completed  according  to plan,  APD's  greenhouse  facilities  will
represent  approximately  217 acres (9,387,180  square feet) of growing capacity
and  four  of  these  facilities,  each  of  which  has or is  expected  to have
approximately  forty-one  (41)  acres of  growing  capacity,  will be among  the
largest  greenhouses in North America. By producing,  harvesting,  packaging and
directly marketing all of its products,  APD eliminates numerous  intermediaries
(i.e.  repackers,   brokers  and  wholesalers)  utilized  by  traditional  field
producers of fresh vegetables.  In order to develop additional sources of supply
and revenue, APD has entered into agreements to market and sell fresh vegetables
produced by two other greenhouse  operations which currently comprise a total of
approximately 26 acres.

     In addition to produce sales,  APD generates  revenues from  management and
marketing  fees paid to APD by the owners of greenhouse  facilities  operated by
APD. In certain  instances,  additional  revenues are generated by designing and
managing the construction of these facilities for the greenhouse owner.

     On the effective date of the Merger, Michael DeGiglio,  Thomas Montanti and
Albert  Vanzeyst,  each of whom is a director and  shareholder of APD, sold, and
Agro Acquisition Corporation (the Company's wholly owned acquisition subsidiary)
purchased,  the entire 50%  ownership  interest of such  individuals  in Village
Farms of Morocco, S.A., a Moroccan company ("VF Morocco"),  for 99,000 shares of
the Company's Common Stock.



                                       3

<PAGE>

     VF  Morocco  was  established  in 1994 by  APD's  directors  and a group of
investors  based in Morocco to export tomatoes grown in Morocco to Canada during
the winter. In 1997, VF Morocco began to export  clementines from Morocco to the
United States.  VF Morocco plans to export  tomatoes and other fresh  vegetables
and fruits from Morocco and Spain to the United States and Europe;  however, the
United  States had  previously  banned all tomato  imports  from  Morocco due to
concerns  over the  Mediterranean  fruit  fly.  The  Company  has  learned  that
recently,  the United States approved the  importation of the previously  banned
products  including  tomatoes and other fresh vegetables and fruits from certain
regions of Morocco.  Although the  acquisition  of VF Morocco is not expected to
have a material effect on APD's financial  condition and operating results going
forward,  APD believes that efforts made by VF Morocco and its  shareholders  to
promote  additional  business  activities in Morocco and Europe could facilitate
APD's expansion plans.

Products

     The Company's focus is on development and commercialization of products for
the following major markets: (i) specialty agriculture;  (ii) postharvest fruits
and vegetables;  and (iii) biological insect control for consumer and industrial
applications.

     Specialty Agriculture

     The Company,  through AGRO,  engineers,  designs,  markets and  distributes
commercial  products and provides  services to the greenhouse,  horticulture and
nursery markets in the United States, Canada and Mexico.

     Commercial Products


     Growing  Systems.  The Company is the exclusive  distributor  in the United
States, Canada, Mexico and the Caribbean of the Grodan(R) brand of stonewool, an
inert  growing  medium  supplied by Grodania  A/S, a Denmark  based wholly owned
subsidiary  of Rockwool  International  A/S.  Stonewool is made by melting rock,
processing it to a fibrous material which can be flocculent or formed into solid
structures.  It is both solid and porous, and designed to support the hydroponic
growth of high value  crops and to improve  plant  root  distribution  and plant
yields through more efficient use of oxygen, water and fertilizer.  Stonewool is
used  worldwide for  cultivation  of a variety of plants in  controlled  growing
environments such as greenhouses. The distribution agreement expires on December
31, 2000.  The sale of products under the  distribution  agreement with Grodania
A/S  accounted  for 40%, 42% and 45% of the  Company's  total  product  sales in
fiscal 1998,  1997 and 1996,  respectively.  The Company  believes that revenues
under  this  distribution  agreement  will  account  for  more  than  10% of the
Company's consolidated product sales in fiscal 1999.

     Automated Irrigation and Environmental Control Systems. The Company through
its ISYS(R) Division engineers,  designs, fabricates,  assembles and distributes
greenhouse  irrigation and  fertilization  systems,  computerized  environmental
control systems and  application  products.  In addition,  to these products and
systems, the Company provides customers with technical support, product service,
turnkey installation,  product marketing and other supplementary  services.  The
Company is the exclusive  distributor in the United States, Canada and Mexico of
computerized  environmental  control  systems  and  accessories  produced  by H.
Hoogendoorn Automation B.V, a Netherlands based company.

     The Company also  distributes  various  accessories and other product lines
for use in the intensive  farming,  horticulture  and nursery  industries in the
North American market on both an exclusive and non-exclusive basis.


                                       4

<PAGE>

     PostHarvest Fruits and Vegetables

     The fruit and vegetable production industry requires specialized  services,
equipment and products for the harvesting, processing and storage of produce.

     Through AGRO and EPSC, the Company provides equipment, coatings and disease
control products to the fruit, vegetable and ornamental packing markets.

     Commercial Products


     Sorting,  Grading and  Packing.  Once  harvested,  produce  must be sorted,
graded and  packaged for  shipment  and  storage.  The Company is the  exclusive
distributor  in  the  United  States,   Canada,  Mexico  and  the  Caribbean  of
computerized  color,  weight and size  sorting,  grading and  packing  automated
systems  produced by Aweta,  B.V., a Netherlands  based  company,  and ancillary
equipment.  The sale of products  under the  distribution  agreement with Aweta,
B.V.  accounted  for 21%, 26% and 20% of the  Company's  total  product sales in
fiscal  years  1998,  1997 and 1996,  respectively.  The Company  believes  that
revenues under this distribution agreement will account for more than 10% of the
Company's consolidated product sales in fiscal 1999.

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

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


                                       5

<PAGE>

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


     Biological Insect Control


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


     Commercial Products


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


Sales and Distribution


     Specialty Agriculture.  The Company sells directly into this market through
AGRO.  AGRO  has  a  force  of  23  people  involved  in  sales,  marketing  and
distribution, engineering and design, and system installation and service at its
distribution and service centers in East Brunswick, New Jersey; Milton, Ontario,
Canada;  and  Ventura,  California,  and in its  sales  and  service  office  in
Littleton, Colorado.

     PostHarvest  Fruits  and  Vegetables.  The  Company  uses its AGRO and EPSC
direct  sales  operations  to market and sell its  sorting,  grading and packing
equipment, and its traditional coatings and Bio-Save BioProtectants to fruit and
vegetable  growers,  packers and processors in the United States, the Caribbean,
Central  America  and  South  America.  EPSC has a sales and  technical  support
services force of eight people located in its  distribution  and service centers
in Orlando, Florida and Visalia,  California.  AGRO has a force of eleven people
involved in sales and marketing, engineering and design, and system installation
and  service  in this  market at its sales and  service  centers  in Union  Gap,
Washington;  Milton, Ontario,  Canada; East Brunswick, New Jersey and Littleton,
Colorado.


     Biological Insect Control. In June 1992, the Company entered into a product
development  and  license  agreement  with  Terminix  for  collaboration  on the
development and marketing of termite  control  products in the United States and
Canada (see "Collaborative  Agreements").  In fiscal 1996, the Company initiated
sales to  Terminix  for its  Bio-Blast  termiticide  product  and in fiscal 1997
initiated  the U.S.  commercial  launch of the  product  in  collaboration  with
Terminix.



                                       6

<PAGE>

     International Sales. The Company expects to market products internationally
primarily through local and regional distributors and partners.  The Company has
a  development   and   distribution   agreement  with  Maruwa   Biochemical  for
distribution  of its initial  biological  insect  control  product and is in the
process of extending this agreement to its Bio-Blast  Biological  Termiticide in
Japan upon registration there (see "Collaborative Agreements").

     Financial  information  segregated by major  geographic area (United States
and  Canada)  is set  forth in Note 9 to the  Company's  Consolidated  Financial
Statements, incorporated herewith.

Manufacturing

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

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

Collaborative Agreements

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


     Maruwa  Biochemical  Co.,  Ltd. In June 1993,  the Company  entered  into a
Development  and  Distribution  Agreement with Maruwa  Biochemical  (the "Maruwa
Agreement") to commercialize  the Company's  initial  biological  insect control
product in Japan. In addition, the Company has shipped product to and is working
with Maruwa on  commercialization  of its Bio-Blast product in Japan.  Under the
Maruwa  Agreement and a proposed  extension  thereto,  Maruwa  Biochemical  will
pursue  at  its  own  expense  the  registration  and  commercialization  of the
Company's biological termite control product in Japan,  including the initiation
of field trials and, if required,  the  commencement of toxicology  studies.  At
this  time  emphasis  has  shifted  to the  Bio-Blast  product  and the  Company
anticipates  entering  into a formal  agreement  with  Maruwa for the  Bio-Blast
product.


     The Terminix  International Company, L.P. In June 1992, the Company entered
into a Product  Development  and License  Agreement with Terminix (the "Terminix
Agreement")  for  collaboration  on the  development  and  marketing  of termite
control products. Under the Terminix Agreement, Terminix provided funding to the
Company for the development of biological  termite control products and received
exclusive  rights to use and  distribute  any  resulting  products in the United
States and Canada.  



                                       7

<PAGE>

The Company has  retained all rights  elsewhere.  The Company  manufactures  and
sells products to Terminix at an agreed markup over the Company's  manufacturing
cost.  The Company will share in any profit  realized by Terminix over specified
levels. The Terminix Agreement extends until expiration of the last to expire of
any patents which may issue covering the Company's  biological  termite  control
technology,  subject to Terminix's right to terminate the agreement at any time.
The Company received EPA product registration for the termite control product in
October  1994,  and  subsequently  received  approval for  registration  from 48
states. In October 1996, the Company and Terminix initiated the U.S.  commercial
launch of Bio-Blast.

Technology


     The Company's  technology  has  application  in three broad areas:  (i) the
development of natural microbial biological pesticides;  (ii) the development of
fresh fruit and vegetable coatings; and (iii) providing assistance and advice to
customers on technical production methods for high value and specialty crops and
ornamentals, and the proper handling and packing of produce after harvest.


     Microbial Pest Control


     Microbial pesticide products are based on microorganisms  isolated from the
environment,  formulated  and  delivered  to a target pest so that they kill the
pest,   or  control  or  inhibit  its   proliferation   on  the  target.   These
microorganisms   are  packaged   alive  and  perform  their   function   through
proliferation  in the pest  environment.  Much of the  formulation  and delivery
technology  developed for synthetic  chemical  pesticides is  inappropriate  for
microbial  products  which  employ and  preserve  living  organisms.  EcoScience
microbial  technology  uses live  microorganisms  which either attack and kill a
target pest (e.g.  Bio-Blast) or through natural growth inhibit the ability of a
target pest to proliferate (e.g. Bio-Save).


     The  following  list  describes the Company's  proprietary  microbial  pest
control  technologies  including  methods to (i)  identify  and  isolate  active
microbial  agents,  (ii)  manufacture  commercial  quantities of those microbial
agents,   (iii)  formulate  and  package  them  as  products  with  commercially
acceptable  stability  and shelf life and (iv)  deliver  them to the target pest
(see "Patents and Trade Secrets").

     Identification of Active Ingredients. The Company has developed proprietary
assays for the  screening  and  identification  of  microbial  agents  which are
effective in the  prevention  of certain  plant  diseases or which are lethal to
certain pests.  The Company has been awarded a patent for the use of a microbial
agent identified through these proprietary assays and may file additional patent
applications.

     Development  of  Manufacturing  Methods.  The  Company has access to or has
developed  a  variety  of  proprietary  methods  for  growing,   processing  and
harvesting  microbial agents which it believes can be used to produce commercial
quantities of active ingredients for the Company's products.


     Development  of  Formulation  Systems.  The  Company  has  access to or has
developed proprietary  processing systems to stabilize and extend the shelf life
of fungal and  bacterial  agents,  and ensure  their  stability,  longevity  and
activity in use. These systems lead to formulations which allow living fungi and
bacteria to remain viable in dry, aqueous or oil based  formulations  until use.
This technology is the basis for the Bio-Save and Bio-Blast products. EcoScience
has been awarded U.S.  patents which cover certain of its advances in this area.
Additionally,  it  serves as the basis  for the  contract  formulation  business
EcoScience is developing.


                                       8

<PAGE>

     Development of Packaging  Systems.  The Company believes to be commercially
successful,   biopesticide   products   must  remain   viable  in   conventional
distribution  channels  and have a minimum  shelf life of 18 to 24  months.  The
Company has  developed and patented  certain  proprietary  packaging  systems to
extend the shelf life of microbial agents during storage and  transportation for
such a shelf life period.

     Development  of Delivery  Systems.  The Company has  developed  proprietary
delivery systems including insect infection  chambers,  sprays,  dusts and gels,
that optimize performance of microbial agents by facilitating  accurate delivery
of  concentrated  doses.  EcoScience  has been awarded U.S.  patents which cover
certain of its advances in this area.

     Fresh Fruit Coatings


     The Company's coating technology utilizes FDA food grade and/or GRAS listed
products to improve the  appearance  of and maintain the quality of fruits after
harvest,  and during storage and transit to market.  The  technology  focuses on
controlling respiration (oxygen transport) and water loss of fruit.  Restricting
respiration and reducing water loss improves delivery of fresher products to the
consumer. The key to the Company's approach is to design the appropriate coating
for each type of fruit,  since different  types of fruit respond  differently to
respiration  and  water  loss.  In May  1994,  the  Company  acquired  a line of
traditional coating products from AMC, all of which utilize conventional shellac
and carnauba as their main ingredients  that have been used  successfully in the
citrus and pome (primarily apples and pears) fruit markets.


Technical Advice and Service


The  Company,  as an  adjunct  to its sales and  service  efforts,  advises  its
customers  on  improved  technical  growing  methods  and  systems,  and packing
techniques and systems. To successfully service its customers requires knowledge
of the customers' challenges and problems,  and technical solutions available to
solve  those  problems.  Customers  frequently  depend on the  Company  for such
service and advice.


Research and Development

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


     The Company's operating costs and expenses to date have, to a large extent,
related to the research  and  development  of products  and product  systems for
future  commercialization.  Expenses  incurred by the Company  under third party
funded research and development programs totaled approximately  $53,000,  $7,000
and $0 in fiscal 1998,  1997 and 1996,  respectively.  Expenses  incurred  under
Company funded research and development programs totaled approximately $412,000,
$501,000 and $1,018,000 in fiscal 1998, 1997 and 1996, respectively.


                                       9

<PAGE>

Technology Licensing

     United  States  Department  of  Agriculture  ("USDA").  The  Company has an
agreement  with the USDA granting the Company  exclusive  rights to the use of a
microbial strain  developed at the USDA for the control of postharvest  diseases
of pome fruits.  This organism is the basis for one of the Bio-Save products and
is the subject of a pending U.S.  patent  application  by the USDA.  The license
agreement  provides  for a royalty to the USDA based on sales by the  Company of
products  incorporating  the  licensed  microbial  strain.  The Company has also
licensed the worldwide rights to develop and commercialize additional biological
disease  control  organisms  recently  patented by the USDA.  The  organisms are
naturally  occurring  yeasts which  effectively  control the development of Blue
Mold (Penicillium  expansum),  Gray Mold (Botrytis cinerea) and Mucor Rot (Mucor
pyriformis) on apples and pears.

Competition

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


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

     In the pesticide industry, the Company competes with large manufacturers of
synthetic  chemical  pesticides  and  established  biopesticide  companies.  The
pesticide  industry is  dominated  by large  chemical  companies  located in the
United States, Japan and Europe. These companies have substantial  financial and
technical  resources,  extensive  sales and  distribution  capabilities,  varied
product  registration   experience  and  the  ability  to  manufacture  products
efficiently.  The Company believes that its commercial  success in the pesticide
market will depend upon the continuing  development  of cost effective  products
which compete with synthetic chemical  pesticides on the basis of effectiveness,
safety and  ecological  benefit,  as well as  establishment  of strong sales and
distribution networks for the Company's products.


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

Government Regulation and Product Registration

     In most countries  throughout the world,  governmental  authorities require
registration of pesticides before sales are allowed.  In the United States,  the
EPA  regulates   pesticides  under  the  Federal   Insecticide,   Fungicide  and
Rodenticide  Act  ("FIFRA").  Pesticides  are also  regulated by the  individual
states.  Some states,  such as California,  Florida and New York, have their own
extensive



                                       10

<PAGE>

registration  requirements.  In order to  market  products  outside  the  United
States,  the Company must receive  regulatory  approval from the  authorities of
each applicable jurisdiction. In addition, the FDA administers the Federal Food,
Drug and Cosmetic Act ("FFDCA") and establishes standards for pesticide residues
in food to protect public health.

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


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


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


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


Patents and Trade Secrets

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



                                       11

<PAGE>

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


     The  Company has been issued  patents and has pending  patent  applications
that  address  its core  technological  strengths,  with  emphasis on fungal and
bacterial  formulation,  and  storage  technologies.  These  patents  and patent
applications  have  been  principally  pursued  in the  U.S.  and in some  cases
internationally.   The   technology   described  in  these  patents  and  patent
applications  is  useful  in the  development  of fungal  and  bacterial  active
ingredient microbial  pesticides.  The following U.S. patents have been allowed:
(i) Method and Device for the Biological Control of Cockroaches, (ii) Method and
Device  for the  Biological  Control  of  Insects,  (iii)  Insect  Contamination
Chamber,  (iv) Method and Device for the Biological  Control of Flying  Insects,
(v) Device for Biological  Control of Cockroaches,  the further  development and
sale of which the  Company has  suspended,  (vi)  Device  Containing  Fungus for
Biological Control of Insects,  (vii) Maintenance and Long Term Stabilization of
Fungal Conidia Using  Surfactants  and (viii)  Packaged Fungal Culture Stable to
Long-Term Storage.


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

     The Company has been issued two additional U.S. Patents which relate to the
use of  bacteria,  chiefly as  biofungicides  in the  treatment  of plant fungal
disease:  (i)  Pseudomonas  Syringae  ATCC 55389 and Use Thereof for  Inhibiting
Microbial Decay on Fruit covering a microorganism  that is the active ingredient
in Bio-Save  10, 100 and 1000,  and (ii) Method and  Composition  for  Producing
Stable Bacteria and Bacterial Formulations.

     Provided  maintenance  fees are paid, U.S. design patents have a term of 14
years  from the  date of  issue;  and U.S.  utility  patents  that are  based on
applications  filed before June 8, 1995, and that have not expired as of June 8,
1995,  have a term that is the  longer of 20 years from the  earliest  effective
filing date or 17 years from issuance.  In certain instances,  however, the term
may be limited to the term of a related patent claiming similar technology.  The
Company has an additional  pending  patent  application  relating to a method of
extending  microbial shelf life. There can be no assurance that any patents will
issue from any of the Company's patent  applications or that issued patents will
provide adequate protection for the Company.

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

     Much of the  Company's  technology  and many of its processes are dependent
upon the knowledge,  experience  and skills of certain  scientific and technical
personnel.  To protect its rights to its proprietary information and technology,
the Company requires all employees,  consultants,  advisors and collaborators to
enter  into   confidentiality   agreements  which  prohibit  the  disclosure  of
confidential  information to persons  unaffiliated  with the Company,  and which
require  disclosure  of and  assignment  to  the  Company  ideas,  developments,
discoveries and inventions made by such persons.  There can be no assurance that
these  agreements  will  prevent   disclosure  of  the  Company's   confidential
information or will provide meaningful protection for the Company's confidential
information.  Additionally,  in the



                                       12

<PAGE>

absence of patent  protection,  the Company's business may be adversely affected
by competitors who develop substantially equivalent technology.

Personnel

     As of October 2, 1998, the Company had 65 full time  employees.  A total of
two persons are employed full time in manufacturing and production; 32 in sales,
marketing  and  distribution;  two in  engineering  and  design;  ten in  system
installation  and  service;  three  in  research  and  development;  and  16  in
management and administration.  As of October 2, 1998, APD had approximately 992
full time employees,  including 16 in sales, marketing and distribution;  two in
construction  and design  services,  16 in management  and  administration,  and
approximately 958 in greenhouse operations.

     None of the  Company's  employees  is  covered by a  collective  bargaining
agreement. The Company considers its relations with its employees to be good.


Item 2.  Properties
--------------------------------------------------------------------------------

     The  Company's   corporate   headquarters   and  research  and  development
operations,  and AGRO's New Jersey  operations  are located in two facilities in
East Brunswick, New Jersey. These facilities consist of 23,000 and 10,000 square
foot spaces and are under leases that expire in July 1999,  and which provide an
option to renew for an  additional  five year term.  In  addition,  AGRO  leases
10,000 square feet of space for its sales,  service and warehouse center located
in Milton,  Ontario, Canada under a three year lease which expires in June 2001.
AGRO also  leases a 12,000  square  foot  facility  for its sales,  service  and
warehouse center in Ventura, California; as well as a 5,000 square foot facility
for its sales,  service and  warehouse  center in Union Gap,  Washington,  under
various lease terms.

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

     APD's principal properties consist of its greenhouse facilities in Ringgold
and Mount Carmel, Pennsylvania; Buffalo and Wheatfield, New York; Fort Davis and
Marfa,  Texas; and King George,  Virginia.  APD has an ownership interest in the
facilities  located in Buffalo,  New York;  Fort  Davis,  Texas;  Mount  Carmel,
Pennsylvania;  and Marfa,  Texas.  The remaining  facilities,  and the land upon
which the Buffalo and Marfa  facilities  are  located,  are leased.  Each of the
greenhouses  operated by APD has adjacent packing and support facilities ranging
in size from  approximately  11,300  square feet at the  Ringgold,  Pennsylvania
facility  to the  approximately  170,000  square foot  storage and  distribution
center  adjacent  to  the  Virginia  greenhouse  facility.  Collectively,  these
facilities provide an aggregate of approximately  512,778 square feet of packing
and support space to APD. In addition,  APD leases approximately 850 square feet
of office space in Charlotte, North Carolina and 500 square feet of office space
in Naples, Florida.

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


                                       13

<PAGE>

Item 3.  Legal Proceedings
--------------------------------------------------------------------------------

     The Company is not a party to any material legal proceedings.  No Director,
officer, or affiliate of the Company, nor any owner beneficially or of record of
more than 5% of the Common Stock, nor any associate of any of the foregoing,  is
a party to legal proceedings  adverse to the Company or any of its subsidiaries,
nor does any such person have a material interest in any such proceeding.


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

     There were no matters  submitted to a vote of security  holders  during the
fourth quarter of the fiscal year ended June 30, 1998.




                                       14
<PAGE>

                                     PART II
================================================================================

Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters
--------------------------------------------------------------------------------

     The Company's  Common Stock trades on The Nasdaq Stock MarketSM  ("NASDAQ")
under the symbol "ECSC".  As of October 2, 1998,  there were  approximately  277
holders  of record  and  approximately  1,823  total  beneficial  holders of the
Company's  Common  Stock.  The Company  effectuated a one for five reverse stock
split  effective  at the close of business on September  30, 1998.  The reported
closing price of the Common Stock on October 2, 1998 was $3 5/8. The Company has
never  declared  or paid any cash  dividends  on its  Common  Stock and does not
anticipate doing so in the foreseeable future.

     The table below sets forth, for the fiscal quarters indicated, the reported
high and low closing sales prices (pre-reverse stock split prices) of the Common
Stock as reported by NASDAQ based on published financial sources.


          1998                                        High                Low
          -------------                               ----                ---
                Fourth Quarter...............       $ 1 13/16          $ 1
                Third Quarter................         1 15/16            1 7/32
                Second Quarter...............         2                  1 3/16
                First Quarter................         1 9/16             1 1/16

          1997                                        High              Low
          -------------                             ----------        -----
                Fourth Quarter...............       $ 1 3/4            $  27/32
                Third Quarter................         2 1/2              1
                Second Quarter...............         1 3/8                7/8
                First Quarter................         1 5/8              1


                                       15

<PAGE>


Item 6.  Selected Financial Data
--------------------------------------------------------------------------------

     The  selected  financial  data  presented  below has been  derived from the
Company's audited  consolidated  financial  statements for each year in the five
year  period  ended  June 30,  1998.  The  information  below  should be read in
conjunction with Management's Discussion and Analysis of Financial Condition and
Results of Operations  and the  Consolidated  Financial  Statements  and related
notes which appear elsewhere in this document.


<TABLE>
<CAPTION>
                                                                                            Years Ended June 30,
Consolidated Statements of Operations Data:                            ------------------------------------------------------------
(In thousands, except per share amounts)                                 1998         1997         1996         1995         1994
                                                                       --------     --------     --------     --------     --------
<S>                                                                     <C>          <C>          <C>          <C>           <C>   
Product sales .....................................................     $22,317      $20,853      $14,151      $12,335       $9,246
Cost of goods sold ................................................      17,583       15,702       10,394       10,153        7,875
                                                                       --------     --------     --------     --------     --------
Gross profit ......................................................       4,734        5,151        3,757        2,182        1,371
                                                                       --------     --------     --------     --------     --------

Operating expenses:
   Research and development .......................................         465          508        1,018        4,483        8,156
   Selling and marketing ..........................................       2,943        2,463        2,594        3,672        3,043
   General and administrative .....................................       2,263        2,107        2,244        2,631        3,382
   Asset valuation and restructuring (reversal) charges ...........        --           (377)      (1,550)       6,000        5,800
                                                                       --------     --------     --------     --------     --------
      Total operating expenses ....................................       5,671        4,701        4,306       16,786       20,381
                                                                       --------     --------     --------     --------     --------
Operating (loss) income ...........................................        (937)         450         (549)     (14,604)     (19,010)
                                                                       --------     --------     --------     --------     --------

Other income (expense):
   Research, development, licensing
      fees and other income .......................................          53            7          125          155          812
   Investment income ..............................................          65          105          199          590          853
   Interest and other expense .....................................        (148)        (177)        (603)      (1,235)        (208)
                                                                       --------     --------     --------     --------     --------
      Total other (expense) income ................................         (30)         (65)        (279)        (490)       1,457
                                                                       --------     --------     --------     --------     --------
(Loss) income before extraordinary gain ...........................        (967)         385         (828)     (15,094)     (17,553)

Extraordinary gain on early extinguishment of debt ................        --           --            241         --           --
                                                                       --------     --------     --------     --------     --------

Net (loss) income .................................................       ($967)        $385        ($587)    ($15,094)    ($17,553)
                                                                       ========     ========     ========     ========     ========

(Loss) earnings per share
-------------------------

Basic
-----

      (Loss) income before extraordinary gain .....................      ($0.09)       $0.04       ($0.09)      ($1.71)      ($2.27)

      Extraordinary gain ..........................................        --           --           0.03         --           --
                                                                       --------     --------     --------     --------     --------
      Net (loss) income ...........................................      ($0.09)       $0.04       ($0.06)      ($1.71)      ($2.27)
                                                                       ========     ========     ========     ========     ========
      Weighted average common shares outstanding ..................      10,456       10,137        9,070        8,839        7,748
                                                                       ========     ========     ========     ========     ========

Diluted
-------

      (Loss) income before extraordinary gain .....................      ($0.09)       $0.04       ($0.09)      ($1.71)      ($2.27)

      Extraordinary gain ..........................................        --           --           0.03         --           --
                                                                       --------     --------     --------     --------     --------

      Net (loss) income ...........................................      ($0.09)       $0.04       ($0.06)      ($1.71)      ($2.27)
                                                                       ========     ========     ========     ========     ========
      Aggregate diluted shares ....................................      10,456       10,313        9,070        8,839        7,748
                                                                       ========     ========     ========     ========     ========
</TABLE>

                                       16

<PAGE>

Selected Financial Data:  (Continued)

<TABLE>
<CAPTION>
                                                                                            Years Ended June 30,
Consolidated  Balance Sheet Data:                                      ------------------------------------------------------------
(In thousands)                                                           1998         1997         1996         1995         1994
                                                                       --------     --------     --------     --------     --------
<S>                                                                     <C>          <C>          <C>          <C>           <C>   
Unrestricted and restricted cash, cash
      equivalents, short-term investments
      and marketable securities ...................................      $  891       $1,775      $ 2,639      $ 7,831      $20,141
Total assets ......................................................       9,626        8,875       10,111       18,769       33,990
Debt and capital leases ...........................................       1,104           11        2,452        8,290        7,933
Stockholders' investment ..........................................       3,136        4,014        2,473        2,492       18,110
</TABLE>



                                       17


<PAGE>



Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations
--------------------------------------------------------------------------------

RESULTS  OF  OPERATIONS

General

     EcoScience is engaged in the technical  marketing,  sales,  development and
commercialization  of products and services for the following major markets: (i)
specialty  agriculture;  (ii)  postharvest  fruits  and  vegetables;  and  (iii)
biological insect control for consumer and industrial applications.  The Company
provides  (i)  sophisticated  growing  systems  to  greenhouse  operators,  (ii)
technologically  advanced  sorting,  grading  and  packing  systems  to  produce
packers,  (iii)  equipment,  coatings and disease  control  products,  including
natural biologicals for protecting fruits, vegetables and ornamentals in storage
and transit to market,  and (iv) biological  pest control  products to consumers
and industry.

     Specialty Agriculture

     The  Company  engineers,  designs,  markets and  distributes  sophisticated
growing  systems and services to the  greenhouse and plant nursery market in the
United States, Canada and Mexico. The Company's primary products for this market
are: (i) advanced  growing systems based on  Stonewool(R)  inert growing medium,
manufactured by Grodania A/S; (ii)  computerized  environmental,  irrigation and
fertigation control systems manufactured by H. Hoogendoorn  Automation B.V.; and
(iii) multiple greenhouse consumable products.

     PostHarvest Fruits and Vegetables

     The fruit and vegetable production industry requires specialized  services,
equipment and products for the  harvesting,  processing  and storage of produce.
The Company  provides  equipment,  coatings and disease control  products to the
fruit,  vegetable and ornamental packing markets. The Company's primary products
for this market are: (i) technologically  advanced sorting,  grading and packing
systems for produce  packers,  manufactured by Aweta,  B.V.; and (ii) equipment,
coatings  and  disease  control  products  for  the  protection  of  fruits  and
ornamentals  in storage and transit to market  including  PacRite(R)  and Indian
River Gold(TM)  coatings  manufactured  by EPSC, and the BioSave(R)  PostHarvest
BioProtectant line of natural biological products.

     Biological Insect Control

     In the biological insect control market,  the Company,  with  collaborative
partners,   has  been  focused  on   developing   and  selling  cost   effective
bio-insecticide  alternatives  to  synthetic  chemical  insecticides  for use in
specific  applications,  including  sensitive  use  environments  such as homes,
restaurants,  schools and food  processing  facilities.  The  Company's  primary
product  for  this  market  is  Bio-Blast(R)  Biological  Termiticide,  a unique
biological pest control product manufactured by EcoScience.

     The Company sells Bio-Blast for use in consumer and industrial applications
through a marketing  collaboration with Terminix  International  Company L.P. In
fiscal 1997, the Company  initiated the U.S.  commercial  launch of Bio-Blast in
collaboration with Terminix. Additionally, EcoScience has initiated an extensive
testing, development and marketing program with Maruwa



                                       18

<PAGE>

BioChemical Co., Ltd. for biological  products in Japan.  The Company  commenced
shipments of Bio-Blast to Maruwa in fiscal 1997.

     The Company's  technology is used for the  development  and  application of
natural  microbial  pest control agents and coatings to sustain the freshness of
fruits.  The Company's  technology  enables it to provide  technical support for
growers and packers of specialty crops. The Company conducts research on the use
of microbial  agents to control plant  diseases and insect pests,  as well as on
new  applications  for natural  coatings to sustain the  nutritional and overall
qualities in fresh fruit.  The Company expects to conduct tests to determine the
possibility of extending the range of performance and applicability for both its
Bio-Save line of products and its Bio-Blast insect control product.

     The  Company  derives  most of its  revenues  from the sale of: (i) growing
medium  products  to the  North  American  intensive  farming  and  horticulture
industries;  (ii) sorting,  grading and packing  systems to the produce  packing
industry;  and (iii)  postharvest  coating  products to the fresh  fruit  market
throughout the western hemisphere.

     The Company believes inflation and changing prices have not had an material
effect on its operations to date.

     Merger with Agro Power Development, Inc.

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

     The  companies  combined  to form an  integrated  environmentally  focused,
consumer products driven  agri-business,  capitalizing on expertise in naturally
derived food  technologies,  intensive  production  and marketing of high value,
quality  fresh  produce,   innovative  bio-rational  pest  and  disease  control
technologies,  and sophisticated  growing and postharvest  systems and products.
The Company is committed  to  improving  the quality of its products by bridging
nature,   technology  and  the  environment  utilizing  the  highest  standards.
EcoScience  believes APD will provide the combined entity greater  international
presence,  increased marketing  capability,  management depth, and the operating
level needed to accelerate revenue growth and increase shareholder value.










                                       19

<PAGE>

1998 Compared to 1997

     The Company's  product sales  increased  $1,464,000 or 7% to $22,317,000 in
1998  from  $20,853,000  in  1997  primarily  due to an  increase  in  Specialty
Agriculture  sales of $2,705,000,  partially  offset by decreases in PostHarvest
Fruits and Vegetables  product sales of $841,000 and  Biological  Insect Control
product sales of $400,000.  The following table sets forth the Company's product
sales by market for 1998 and 1997:

                                                                       Increase
 (In thousands)                                  1998        1997     (Decrease)
                                                -------     -------     -------

 Specialty Agriculture ....................     $14,573     $11,868      $2,705
 PostHarvest Fruits and Vegetables ........       7,724       8,565        (841)
 Biological Insect Control ................          20         420        (400)
                                                -------     -------     -------

Consolidated ..............................     $22,317     $20,853      $1,464
                                                =======     =======     =======

     The Company is the  exclusive  distributor  in the United  States,  Canada,
Mexico and the  Caribbean of the Grodan  brand of  stonewool,  an inert  growing
medium  supplied by Grodania A/S, a Denmark based company.  The sale of products
under the Distribution  Agreement with Grodania A/S accounted for 40% and 42% of
the Company's total product sales in 1998 and 1997, respectively.  Additionally,
the Company has the exclusive  right to sell Aweta B.V.'s,  a Netherlands  based
company,  sorting,  grading and packing  products  and  equipment  to the fruit,
vegetable  and  flower  markets  in the United  States,  Canada,  Mexico and the
Caribbean. The sale of products under the Distribution Agreement with Aweta B.V.
accounted for 21% and 26% of the Company's total product sales in 1998 and 1997,
respectively.  The Company  believes  that  revenues  under  these  distribution
agreements  will each  account for more than 10% of the  Company's  consolidated
product  sales for the fiscal year ending June 30,  1999.  Although  there are a
limited number of sources of growing medium products,  and sorting,  grading and
packing equipment  manufacturers in the world, the Company's management believes
that  if  the  Company   ceased  to  operate  under  its  current   distribution
arrangements,  the Company  could  arrange  distribution  agreements  with other
manufacturers  or suppliers of such products and equipment on comparable  terms.
Any such  change,  however,  could  cause the  Company  delays in filling  sales
orders,  as well as possible  loss of sales,  which would  adversely  affect the
Company's operating results.

     In April  1998,  Aweta  B.V.  sustained  fire  damage to its  manufacturing
facility and certain contents therein. As a result of the fire, there has been a
delay in the shipment and installation of certain  sorting,  grading and packing
equipment with the primary effect being a shifting of revenue and  corresponding
operating  profits from the quarters ending June 30, 1998 and September 30, 1998
to the quarter ending December 31, 1998 or thereafter. The Company is attempting
to balance the effects of the temporary decrease in Aweta's production  capacity
and the Company's  customers'  installation  and  production  requirements.  The
Company,  however,  cannot be assured that delayed  delivery and installation of
equipment  to the customer  will meet the  customer's  requirements  which could
result in the possible loss of certain customer orders and corresponding loss of
revenue and operating profit. The result of the postponement of shipments caused
by the fire has been an adverse  effect on the Company's  operating  results for
the fourth quarter of fiscal 1998;  however,  in those periods where delivery is
expected to be made, there will be a favorable impact on operating results.

     The  Company  sold  products to APD in the amount of  $5,012,000  or 22% of
product sales in 1998 and $2,954,000 or 14% of product sales in 1997. Management
believes  that prices and fees  charged to APD were  consistent  with those that
would be  changed in arm's  length  translations.  Had the merger not  occurred,
sales to APD were expected to account for more than 10% of the  Company's  total



                                       20

<PAGE>

product  sales for the fiscal year ending June 30,  1999.  See Item 13 - Certain
Relationships and Related Transactions.

     Cost of goods sold increased  $1,881,000 or 12% to $17,583,000 in 1998 from
$15,702,000  in 1997,  primarily due to product sales  increases and a change in
product mix.

     Gross margin on product  sales  decreased  $417,000 or 8% to  $4,734,000 in
1998 from  $5,151,000  in 1997,  while gross margin  percentage on product sales
decreased  to 21% in 1998 from 25% in 1997.  The  decrease  in gross  margin was
primarily  due to  competitive  pressures in the growing  medium  portion of the
Specialty  Agricultural  market,  a reduction in equipment  product sales in the
PostHarvest  Fruits  and  Vegetables  market  due to the  delayed  shipment  and
installation of equipment orders as a result of the fire at Aweta B.V.,  reduced
sales of the  comparatively  higher  margin  Bio-Blast  product  and to a lesser
extent a shift in  product  mix in the  Specialty  Agricultural  market  towards
certain typically lower margin product lines.

     Research and development  expenses  decreased  $43,000 or 8% to $465,000 in
1998 from $508,000 in 1997, primarily due to reductions in personnel and related
costs.  The  Company  has and  will  continue  to  incur  ongoing  research  and
development  expenses for its  Bio-Save,  Bio-Blast  and other  select  programs
during fiscal 1999.

     Selling and marketing  expenses  increased $480,000 or 19% to $2,943,000 in
1998  from   $2,463,000  in  1997,   primarily  due  to  additional   personnel,
promotional,  customer  site and  related  costs to support  efforts to increase
market  penetration  and the  marketing  of expanded  product  lines in multiple
markets,  partially offset by the completion of the amortization of the value of
the contract with  Grodania A/S in December  1997,  the value of which  resulted
from the acquisition of AGRO.

     General and administrative  expenses increased $156,000 or 7% to $2,263,000
in 1998 from  $2,107,000  in 1997,  primarily  due to increases in personnel and
related costs,  foreign currency losses,  and certain credit risks incurred from
expansion into new markets and increased sales,  partially offset by a reduction
in certain insurance costs.

     In June 1997, the Company reversed $300,000 of accrued  restructuring costs
no longer deemed necessary for facilities  consolidation  and relocation,  which
relate to accrued restructuring costs originally recorded in 1995.

     In  August  1996,  the  Company  and a  finance  company  reached  a  lease
settlement  agreement  under  which the  Company  paid  $880,000  to satisfy the
remaining lease obligation of approximately  $1,248,000 of principal and $17,000
of accrued interest, and returned certain leased equipment with a net book value
of  $308,000  to  the  finance  company,  which  resulted  in  a  reversal  of a
restructuring charge of $77,000 in 1997.

     The Company  charged  costs and  expenses  totaling  $109,000  and $273,000
against the restructuring accruals during 1998 and 1997, respectively.

     Operating  income  decreased  $1,387,000 to a loss of  ($937,000)  for 1998
compared to  operating  income of $450,000  for 1997.  The decrease in operating
income  resulted from a $970,000  increase of total  operating  expenses in 1998
compared  to 1997,  in  addition to a $417,000  decrease  in gross  profit.  The
operating loss for 1998 was  ($937,000),  a decrease of $1,010,000,  compared to
operating  income  of  $73,000  for 1997,  when the  $377,000  in  restructuring
reversals  are  excluded.  Operating  expenses  increased  $593,000  or  12%  to
$5,671,000  for 1998  compared  to  $5,078,000  for 1997 when the  restructuring
reversals are excluded.



                                       21

<PAGE>

     Other income / (expense)  decreased $35,000 or 54% to ($30,000) net expense
in 1998  compared to ($65,000)  net expense in 1997.  The decrease was primarily
attributable  to an increase of $46,000 in research and  development  fee income
due primarily to the start of the Company's Phase 2 SBIR program in January 1998
and a reduction in interest and other expense of $29,000 or 16% primarily due to
the  decrease in interest  expense  resulting  from the lower  average  level of
long-term debt and capital lease obligations outstanding during 1998 compared to
1997,  partially offset by a decrease in investment  income of $40,000 resulting
from a decline in the average funds available for investment in 1998 as compared
to 1997.

     The Company's net income decreased  $1,352,000 or $0.13 per share basic and
diluted to a net loss of  ($967,000)  or ($0.09) per share basic and diluted for
1998 compared to net income of $385,000 or $0.04 per share basic and diluted for
1997. Excluding the non-recurring  $377,000 reversal of restructuring charges in
1997,  the net loss for 1998 was  ($967,000)  or  ($0.09)  per  share  basic and
diluted,  a $975,000  decrease compared to the net income of $8,000 or $0.00 per
share basic and diluted for 1997.

1997 Compared to 1996

     The Company's  product sales increased  $6,702,000 or 47% to $20,853,000 in
1997  from   $14,151,000  in  1996  primarily  due  to  increases  in  Specialty
Agriculture sales of $3,557,000, PostHarvest Fruits and Vegetables product sales
of $2,900,000  and  Biological  Insect  Control  product sales of $245,000.  The
following  table sets forth the  Company's  product sales by market for 1997 and
1996:

                                                                       Increase
 (In thousands)                                1997         1996      (Decrease)
                                              -------      -------      -------
 Specialty Agriculture ..................     $11,868      $ 8,311      $ 3,557
 PostHarvest Fruits and Vegetables ......       8,565        5,665        2,900
 Biological Insect Control ..............         420          175          245
                                              -------      -------      -------

Consolidated ............................     $20,853      $14,151      $ 6,702
                                              =======      =======      =======

     The sale of products  under the  Distribution  Agreement  with Grodania A/S
accounted for 42% and 45% of the Company's total product sales in 1997 and 1996,
respectively.  The sale of products under the Distribution  Agreement with Aweta
B.V.  accounted for 26% and 20% of the Company's total product sales in 1997 and
1996, respectively.

     The  Company  sold  products to APD in the amount of  $2,954,000  or 14% of
product  sales in 1997 and $573,000 or 4% of product  sales in 1996.  Management
believes  that prices and fees  charged to APD were  consistent  with those that
would  be  changed  in  arm's  length  translations.   See  Item  13  -  Certain
Relationships and Related Transactions.

     Cost of goods sold increased  $5,308,000 or 51% to $15,702,000 in 1997 from
$10,394,000  in 1996,  primarily due to product sales  increases and a change in
product mix.

     Gross margin on product sales increased  $1,394,000 or 37% to $5,151,000 in
1997 from  $3,757,000  in 1996,  while gross margin  percentage on product sales
decreased to 25% in 1997 from 27% in 1996. Gross margin percentage  decrease was
primarily  due to  competitive  pressures in the growing  medium  portion of the
Specialty Agricultural market and a shift in product mix towards



                                       22

<PAGE>

typically lower margin  equipment  product sales in the  PostHarvest  Fruits and
Vegetables  market,  partially  offset by increased  sales of  typically  higher
margin Biologicals, Bio-Blast and Bio-Save.

     Research and development  expenses decreased $510,000 or 50% to $508,000 in
1997 from  $1,018,000  in 1996,  primarily  due to  reductions  in personnel and
related costs and certain professional fees.

     Selling and marketing  expenses  decreased  $131,000 or 5% to $2,463,000 in
1997 from  $2,594,000 in 1996,  primarily  due to reduced  personnel and related
costs, partially offset by promotional and customer site costs.

     General and administrative  expenses decreased $137,000 or 6% to $2,107,000
in 1997 from  $2,244,000  in 1996,  primarily  due to decreases in personnel and
related costs.

     In June 1997, the Company reversed $300,000 of accrued  restructuring costs
no longer deemed necessary for facilities  consolidation  and relocation,  which
relate to accrued restructuring costs originally recorded in 1995.

     In  August  1996,  the  Company  and a  finance  company  reached  a  lease
settlement  agreement  under  which the  Company  paid  $880,000  to satisfy the
remaining lease obligation of approximately  $1,248,000 of principal and $17,000
of accrued interest, and returned certain leased equipment with a net book value
of  $308,000  to  the  finance  company,  which  resulted  in  a  reversal  of a
restructuring charge of $77,000 in 1997.

     In 1996, the Company  reversed  $1,550,000 of accrued  restructuring  costs
that  related  to  a  termination  of  a  lease  for  its  Worcester   corporate
headquarters  and  research  and  development   facility  (see  Note  8  to  the
Consolidated Financial Statements).

     Operating  income  increased  $999,000 to $450,000 for 1997  compared to an
operating loss of ($549,000) for 1996. The increase in operating income resulted
from a $1,394,000  increase in gross profit,  partially offset by an increase of
$395,000 in total  operating  expenses in 1997  compared to 1996.  The operating
income for 1997 was $73,000, an increase of $2,172,000, compared to an operating
loss of ($2,099,000)  for 1996, when the  restructuring  reversals are excluded.
Operating  expenses decreased $778,000 or 13% to $5,078,000 for 1997 compared to
$5,856,000 for 1996 when the restructuring reversals are excluded.

     Other  income  /  (expense)  decreased  $214,000  or 77% to  ($65,000)  net
expenses in 1997  compared to ($279,000)  net expense in 1996.  The decrease was
primarily attributable to a reduction in interest and other expenses of $426,000
or 71%,  primarily due to the decrease in interest  expense  resulting  from the
lower average level of long-term debt and capital lease obligations  outstanding
during 1997 compared to 1996;  partially  offset by (i) a decrease in investment
income of $94,000  resulting  from a decline in the average funds  available for
investment  in 1997 compared to 1996 and (ii) a $74,000 gain on sale of property
and equipment and a $51,000 gain on settlements of accounts  payable recorded in
1996.

     In  1996,  the  Company  realized  an  extraordinary   gain  on  the  early
extinguishment  of debt of $241,000 or $0.03 per share basic and diluted with no
related income tax effect (see Note 3 to the Consolidated Financial Statements).

     The  Company's net income  increased  $972,000 or $0.10 per share basic and
diluted to net income of  $385,000 or $0.04 per share basic and diluted for 1997
compared to a net loss of




                                       23

<PAGE>

($587,000)  or  ($0.06)  per  share  basic  and  diluted  for  1996.   Excluding
non-recurring  amounts,  net income for 1997 was $8,000 or $0.00 per share basic
and  diluted,  a  $2,386,000  or $0.26 per share basic and diluted  improvement,
compared to the net loss of  ($2,378,000) or ($0.26) per share basic and diluted
for 1996.  The excluded  non-recurring  amounts are: (i) for 1997:  the $377,000
reversals  of  restructuring  charges;  and (ii) for  1996:  (a) the  $1,550,000
reversal of accrued restructuring costs, and (b) the $241,000 extraordinary gain
on early extinguishment of debt.

LIQUIDITY  AND  CAPITAL  RESOURCES

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

     Cash and cash  equivalents  were  $358,000  at June 30,  1998  compared  to
$1,247,000 at June 30, 1997. Unrestricted and restricted cash, cash equivalents,
and  short-term  investments  totaled  $891,000  at June 30,  1998,  compared to
$1,775,000  at  June  30,  1997.  Cash  used  in  operating  activities  totaled
$1,685,000 which consisted  primarily of a net loss of $967,000 and increases of
$608,000,  $386,000 and  $657,000 in accounts  receivable,  inventory  and other
current  assets,  respectively,  partially  offset by an  increase  in  accounts
payable and accrued expenses of $640,000.  Cash provided by financing activities
totaled  $1,176,000  in 1998,  which  consisted  principally  of  borrowings  of
$1,091,000  under  the  Company's  line of  credit.  Cash  used  for  investment
activities in 1998 totaled  $380,000 which  consisted  primarily of purchases of
property and equipment of $545,000, partially offset by a decrease in noncurrent
assets of  $146,000.  The  Company's  working  capital  and  current  ratio were
$779,000 and 1.1 to 1, respectively, at June 30, 1998 compared to $1,635,000 and
1.3 to 1, respectively, at June 30, 1997.

     Debt  increased by  $1,093,000  to  $1,104,000 at June 30, 1998 compared to
$11,000 at June 30, 1997. The increase was  attributable to borrowings under the
Company's line of credit.

     In 1998, the Company funded  $109,000 of accrued  restructuring  costs that
had been recorded 1995.  The balance of accrued  restructuring  costs,  $348,000
(total current and noncurrent portions),  as of June 30, 1998, is expected to be
utilized in 1999 and thereafter.

     The  Company  expects to incur  administrative,  business  development  and
commercialization  expenditures  in the future as it advances  the  development,
manufacturing  and marketing of its Bio-Blast and Bio-Save  products,  and other
select development programs in its bio-technology  operations.  In addition, the
Company expects to incur  incremental  costs associated with its plans to expand
product  lines  in  the  Specialty   Agricultural  and  PostHarvest  Fruits  and
Vegetables  markets.  The  Company  may  also use  cash to  acquire  technology,
products or companies that support the strategy of the Company.

     The Company believes its $358,000 of cash and cash equivalents and $533,000
of short-term  investments as of June 30, 1998, along with revenues from product
sales, and funds available under its revolving line of credit,  coupled with the
financial  resources of and funds available to APD and the operating capacity of
APD will be  sufficient to fund the combined  entity's  working  capital  needs,
planned  capital  expenditures,  restructuring  program  initiatives and related
obligations,  and to service its indebtedness through June 30, 1999. The Company
may need to raise additional funds to finance its ongoing  operations after June
30, 1999,  although there can be no assurances that such funds will be available
on terms favorable to the Company.


                                       24

<PAGE>


SEASONALITY


     The timing of the Company's  operating revenues may vary as a result of the
seasonal  nature of its  businesses.  In  addition,  operating  revenues  may be
affected  by the timing of new product  launches,  acquisitions,  sales  orders,
sales  product  mix  and  other  economic  factors.  Operating  revenues  may be
concentrated in the Company's second and third quarters as a result of the North
American growing and harvesting seasons.  Although the Company believes that the
historical trend in quarterly revenues for the second and third quarters of each
year are generally  higher than the first and fourth  quarters;  there can be no
assurance  that this will occur in future  periods.  Accordingly,  quarterly  or
other  interim  results  should not be  considered  indicative  of results to be
expected for any other quarter or for the full fiscal year.


RISK

     Although the Merger did not affect 1998 operating  results,  the Merger may
affect the  following  aspects of the Company's  operations:  (i) changes in the
Company's debt to equity ratio;  (ii) costs  associated with the transaction and
restructuring changes; (iii) market risk; and (iv) credit risk.

     The  Merger  changed  the  Company's  debt to equity  ratio  from  minor to
significant,  which  could  expose the Company to,  among  other  things,  risks
associated  with  interest  rate  fluctuations.  Based on an unaudited pro forma
condensed  combined  balance sheet as of June 30, 1998, the debt to equity ratio
of the Company before  combination was 0.4 to 1; and after combination 89.4 to 1
including minority interest in debt, and 5.8 to 1 including minority interest in
equity.

     The  Company  and APD  expect  to incur  charges  to  operations  currently
estimated to be $750,000 and $500,000, respectively, primarily in the quarter in
which the  Merger was  consummated,  to reflect  non-recurring  costs  resulting
directly  from  the  Merger.  Such  costs  include  investment  banking,  legal,
accounting, printing, and other related charges. These amounts are estimates and
are subject to change.  Additional  and  unanticipated  expenses may be incurred
relating to the integration of the businesses of the Company and APD,  including
sales and marketing, and administrative functions.  Although the Company and APD
expect  that  the  elimination  of  duplicative   expenses,  as  well  as  other
efficiencies  related to the  integration  of their  respective  businesses  may
offset  additional  expenses over time,  there can be no assurance that such net
benefit will be achieved in the near term or at all.

     The  Company  is  subject  to a number of risks  similar  to those of other
companies  in  similar  stages  of  development,  including  dependence  on  key
individuals,  competition  from other products and  companies,  the necessity to
develop,  register and manufacture  commercially usable products, the ability to
achieve profitable operations,  the impact of supply and demand on market prices
for  products  produced  and  sold by  APD,  the  impact  of  crop  disease  and
pestilence,  the impact of the  perishableness  of products produced and sold by
APD,  weather and other events  impacting crop yields and  greenhouse  structure
damage,  the impact of  customer  concentrations,  the need to raise  additional
funds through public or private debt or equity financing,  especially due to the
substantial amount of capital investment required for greenhouse operations, and
the success of the Company to achieve an effective  merged entity and the result
of that entity in terms of effective operations, market acceptance and corporate
position.

     Financial   instruments   which   potentially   subject   the   Company  to
concentrations  of  credit  risk  consist  of  accounts   receivable  and  other
receivables.  The  Company  primarily  invests its  available  funds into United
States Government  securities as well as investments with high quality financial

                                       25

<PAGE>

institutions.  The  Company  performs  ongoing  evaluations  of  its  customers'
financial condition and,  generally,  requires no collateral from its customers.
The Company maintains reserves and allowances for potential credit losses; which
to date,  such credit  losses have been  insignificant  and within  management's
expectations.  The merged  entity is  subject to a higher  level of risk of this
nature  due to the  higher  level of  business  activity  and a higher  level of
customer concentration.

THE MERGER AND FULFILLMENT OF NASDAQ LISTING REQUIREMENTS

     The  National  Association  of  Securities  Dealers,  Inc.,  has  among its
continued listing  requirements three criteria,  fulfillment of any one of which
qualifies an issuer for  continued  listing on the Nasdaq  SmallCap  Market.  An
issuer must have (i) net tangible assets of at least  $2,000,000;  (ii) a market
capitalization of at least $35,000,000; or (iii) net income (for the last fiscal
year or for two of the last three fiscal years) of at least $500,000.

     Results for the period  ended June 30, 1998,  indicate  that the Company no
longer meets the net tangible  assets  test.  In addition,  the Company does not
meet the minimum net income test.  As of October 2, 1998,  11,619,278  shares of
the Company's Common Stock were  outstanding.  The reported closing price of the
Company's  Common  Stock on  October 2, 1998 was $3 5/8,  resulting  in a market
capitalization of approximately $42,120,000. It is possible that the Company may
not be able to  maintain  the  required  level of market  capitalization  due to
possible fluctuations in the market price for its Common Stock, which may result
in Nasdaq's delisting of the Common Stock from the Nasdaq SmallCaps Market.

YEAR  2000

     The Company has completed an initial  assessment of its Year 2000 status. A
plan has been  developed  that is expected to address the Company's  exposure to
the Year 2000 issue. As a part of that plan, the Company will inventory and test
its  information  technology  ("IT") and non-IT  systems.  Major  customers  and
vendors  will be  contacted  in order to  assess  their  status  as to Year 2000
compliance.  The Year 2000 plan is expected to be  implemented  and completed by
approximately  the end of calendar year 1998. While some of the Company's IT and
non-IT  systems will need to be upgraded or replaced,  the  financial  impact of
making  the  required  system  changes is not  expected  to be  material  to the
Company's financial position, results of operations or cash flow.

FORWARD LOOKING STATEMENTS

     This report contains forward looking statements that describe the Company's
business  prospects  including those that relate to the merged companies.  These
statements  involve  risks and  uncertainties  including,  but not  limited  to,
regulatory uncertainty, level of demand for the Company's products and services,
product  acceptance,  industry wide competitive  factors,  seasonality  factors,
timing of completion of major equipment projects,  political,  economic or other
conditions,  and the  results  of the merger in terms of  effective  operations,
market acceptance and corporate position. Furthermore, market trends are subject
to changes which could adversely affect future results.

Item 8.  Financial Statements and Supplementary Data
--------------------------------------------------------------------------------

     The  Company's   consolidated   financial   statements  and   supplementary
consolidated  quarterly  financial data for the years ended June 30, 1998,  1997
and 1996, are set forth on pages 27 through 49.



                                       26

<PAGE>

                     ECOSCIENCE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)

<TABLE>
<CAPTION>
                                                                             June 30,
                                                                       --------------------
                                                                         1998        1997
                                                                       --------    --------
                                     ASSETS
<S>                                                                    <C>         <C>     
Current assets:
    Cash and cash equivalents ......................................   $    358    $  1,247
    Short-term investments .........................................        533         528
    Accounts receivable, less reserves of $292 and $150
       at June 30, 1998 and 1997, respectively .....................      2,396       1,788
    Inventories ....................................................      2,326       1,940
    Other current assets ...........................................      1,499         842
                                                                       --------    --------
       Total current assets ........................................      7,112       6,345
                                                                       --------    --------

Property and equipment, net ........................................        895         562
Intangible assets, net .............................................      1,542       1,745
Other noncurrent assets ............................................         77         223
                                                                       --------    --------
            Total assets ...........................................   $  9,626    $  8,875
                                                                       ========    ========

                    LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities:
    Line of credit .................................................   $  1,091    $   --
    Current maturities of long-term debt ...........................          6          10
    Accounts payable ...............................................      3,223       2,641
    Accrued restructuring costs ....................................        198         307
    Accrued expenses and other current liabilities .................      1,815       1,752
                                                                       --------    --------
       Total current liabilities ...................................      6,333       4,710
                                                                       --------    --------

Noncurrent liabilities:
    Long-term debt, less current maturities ........................          7           1
    Other long-term liabilities ....................................        150         150
                                                                       --------    --------
       Total noncurrent liabilities ................................        157         151
                                                                       --------    --------

Commitments and contingencies

Stockholders' investment:
    Preferred stock, $0.01 par value, 1,000,000 shares authorized;
       none issued and outstanding .................................       --          --
    Common stock, $0.01 par value, 25,000,000 shares authorized;
       10,488,455 and 10,401,177 shares issued and outstanding
       at June 30, 1998 and 1997, respectively .....................        105         104
Additional paid-in capital .........................................     57,304      57,222
Accumulated deficit ................................................    (54,279)    (53,312)
Unrealized gain on short-term investments ..........................          6        --
                                                                       --------    --------
       Total stockholders' investment ..............................      3,136       4,014
                                                                       --------    --------
            Total liabilities and stockholders' investment .........   $  9,626    $  8,875
                                                                       ========    ========
</TABLE>


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



                                       27

<PAGE>

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

<TABLE>
<CAPTION>
                                                           Years Ended June 30,
                                                     --------------------------------
                                                       1998        1997        1996
                                                     --------    --------    --------

<S>                                                  <C>         <C>         <C>     
Product sales ....................................   $ 22,317    $ 20,853    $ 14,151

Cost of goods sold ...............................     17,583      15,702      10,394
                                                     --------    --------    --------

Gross profit .....................................      4,734       5,151       3,757
                                                     --------    --------    --------

Operating expenses:
   Research and development ......................        465         508       1,018
   Selling and marketing .........................      2,943       2,463       2,594
   General and administrative ....................      2,263       2,107       2,244
   Asset valuation and restructuring reversal ....       --          (377)     (1,550)
                                                     --------    --------    --------
           Total operating expenses ..............      5,671       4,701       4,306
                                                     --------    --------    --------
Operating (loss) income ..........................       (937)        450        (549)
                                                     --------    --------    --------

Other income (expense):
   Research, development, licensing
      fees and other income ......................         53           7         125
   Investment income .............................         65         105         199
   Interest and other expense ....................       (148)       (177)       (603)
                                                     --------    --------    --------
           Total other expense ...................        (30)        (65)       (279)
                                                     --------    --------    --------

(Loss) income before extraordinary gain ..........       (967)        385        (828)

Extraordinary gain on early extinguishment of debt       --          --           241
                                                     --------    --------    --------
Net (loss) income ................................   ($   967)   $    385    ($   587)
                                                     ========    ========    ========

(Loss) earnings per share
-------------------------

Basic
-----
      (Loss) income before extraordinary gain ....   ($  0.09)   $   0.04    ($  0.09)

      Extraordinary gain .........................       --          --          0.03
                                                     --------    --------    --------
      Net (loss) income ..........................   ($  0.09)   $   0.04    ($  0.06)
                                                     ========    ========    ========

      Weighted average common shares outstanding .     10,456      10,137       9,070
                                                     ========    ========    ========

Diluted
-------

      (Loss) income before extraordinary gain ....   ($  0.09)   $   0.04    ($  0.09)

      Extraordinary gain .........................       --          --          0.03
                                                     --------    --------    --------
      Net (loss) income ..........................   ($  0.09)   $   0.04    ($  0.06)
                                                     ========    ========    ========

      Aggregate diluted shares ...................     10,456      10,313       9,070
                                                     ========    ========    ========
</TABLE>


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




                                       28

<PAGE>


                     ECOSCIENCE CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
                      (In thousands, except share amounts)



<TABLE>
<CAPTION>
                                                                                                      Unrealized
                                                      Common Stock                                   (Loss) Gain
                                                 -----------------------    Additional                    on           Total
                                                 Number of      $0.01       Paid-in     Accumulated   Short-Term   Stockholders'
                                                   Shares     Par Value     Capital       Deficit    Investments    Investments
                                                 ----------   ----------   ----------   ----------    ----------    ----------
<S>                                               <C>         <C>          <C>          <C>           <C>           <C>       
Balance at June 30, 1995 .....................    8,840,511   $       88   $   55,581   ($  53,110)   ($      67)   $    2,492

Exercise of stock options ....................        1,666         --              1         --            --               1
Issuance of common stock in
   settlement of WBDC lease ..................      500,000            5          495         --            --             500
Unrealized gain on
   short-term investments ....................         --           --           --           --              67            67
Net loss .....................................         --           --           --           (587)         --            (587)
                                                 ----------   ----------   ----------   ----------    ----------    ----------
Balance at June 30, 1996 .....................    9,342,177           93       56,077      (53,697)         --           2,473

Exercise of stock options ....................       19,000         --             17         --            --              17
Issuance of common stock .....................    1,040,000           11        1,128         --            --           1,139
Net income ...................................         --           --           --            385          --             385
                                                 ----------   ----------   ----------   ----------    ----------    ----------
Balance at June 30, 1997 .....................   10,401,177          104       57,222      (53,312)         --           4,014

Exercise of stock options ....................       87,278            1           82         --            --              83
Unrealized gain on
   short-term investments ....................         --           --           --           --               6             6
Net loss .....................................         --           --           --           (967)         --            (967)
                                                 ----------   ----------   ----------   ----------    ----------    ----------
Balance at June 30, 1998 .....................   10,488,455   $      105   $   57,304   ($  54,279)   $        6    $    3,136
                                                 ==========   ==========   ==========   ==========    ==========    ==========
</TABLE>


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


                                       29

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                                           Years Ended June 30,
                                                                                                    -------------------------------
                                                                                                     1998        1997         1996
                                                                                                    -------     -------     -------
<S>                                                                                                 <C>         <C>         <C>     
Cash flows from operating activities:
      Net (loss) income ........................................................................    $  (967)    $   385     ($  587)
      Adjustments to reconcile net (loss) income to net cash
           (used in) provided by operating activities:
             Depreciation and amortization .....................................................        332         402         580
             (Gain) loss on sale of investments ................................................       --            (2)         58
             Gain on sale of property and equipment ............................................         (3)       --           (74)
             Gain on settlement of accounts payable ............................................       --          --           (51)
             Gain on settlement of debt and other liabilities ..................................       --          --          (241)
             Reversal of  restructuring charge .................................................       --          (377)     (1,550)
             Foreign exchange loss (gain) ......................................................         73         (29)        (13)
             Changes in current assets and liabilities:
                     Accounts receivable, net ..................................................       (608)       (236)        409
                     Inventories ...............................................................       (386)         61        (476)
                     Other current assets ......................................................       (657)        (15)       (245)
                     Accounts payable and accrued expenses .....................................        640         267         719
                     Accrued restructuring costs ...............................................       (109)       (273)     (1,174)
                                                                                                    -------     -------     -------
             Net cash (used in) provided by operating activities ...............................     (1,685)        183      (2,645)
                                                                                                    -------     -------     -------

Cash flows from investing activities:
      Purchases of property and equipment ......................................................       (545)        (90)       (127)
      Proceeds from sale of property and equipment .............................................         19        --           368
      Purchases of restricted cash and short-term investments ..................................       --          (503)       (705)
      Proceeds from sale of short-term investments .............................................       --           677       6,159
      Proceeds from release of restricted cash .................................................       --         1,205        --
      Decrease (increase) in other noncurrent assets ...........................................        146         (78)         95
                                                                                                    -------     -------     -------
             Net cash (used in) provided by investing activities ...............................       (380)      1,211       5,790
                                                                                                    -------     -------     -------

Cash flows from financing activities:
      Proceeds from issuance of stock ..........................................................       --         1,139        --
      Proceeds from exercise of stock options ..................................................         83          17           1
      Proceeds from long-term debt .............................................................         17        --             7
      Net borrowings under line of credit ......................................................      1,091        --          --
      Payments on long-term debt and capital leases ............................................        (15)     (2,037)     (2,900)
                                                                                                    -------     -------     -------
             Net cash provided by (used in) financing activities ...............................      1,176        (881)     (2,892)
                                                                                                    -------     -------     -------
(Decrease) increase in cash and cash equivalents ...............................................       (889)        513         253
Cash and cash equivalents at beginning of period ...............................................      1,247         734         481
                                                                                                    -------     -------     -------
Cash and cash equivalents at end of period .....................................................    $   358     $ 1,247     $   734
                                                                                                    =======     =======     =======
Total unrestricted and restricted cash, cash equivalents and short-term
       investments at end of period ............................................................    $   891     $ 1,775     $ 2,639
                                                                                                    =======     =======     =======
</TABLE>


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


                                       30

<PAGE>

                     ECOSCIENCE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 1998


1.    OPERATIONS


     EcoScience  Corporation  ("EcoScience")  and its wholly owned  subsidiaries
(collectively, the "Company"), Agro Dynamics, Inc. and Agro Dynamics Canada Inc.
(collectively, "AGRO") and EcoScience Produce Systems Corp. ("EPSC") are engaged
in the technical marketing, sales, development and commercialization of products
and services for the following major markets:  (i) specialty  agriculture;  (ii)
postharvest  fruits and  vegetables;  and (iii)  biological  insect  control for
consumer and industrial  applications.  The Company  provides (i)  sophisticated
growing systems to greenhouse operators,  (ii) technologically advanced sorting,
grading and packing systems to produce packers,  (iii)  equipment,  coatings and
disease control products,  including natural  biologicals for protecting fruits,
vegetables and ornamentals in storage and transit to market, and (iv) biological
pest  control  products  to  consumers  and  industry.  The  Company  serves the
specialty  agriculture and postharvest fruits and vegetables markets through its
three subsidiaries.


     The  Company  derives  most of its  revenues  from the sale of: (i) growing
medium  products  to the  North  American  intensive  farming  and  horticulture
industries;  (ii) sorting,  grading and packing  systems to the produce  packing
industry;  and (iii)  postharvest  coating  products to the fresh  fruit  market
throughout the western hemisphere.

     The  Company  is  subject  to a number of risks  similar  to those of other
companies  in  similar  stages  of  development,  including  dependence  on  key
individuals,  competition  from other products and  companies,  the necessity to
develop,  register, and manufacture commercially usable products, the ability to
achieve  profitable  operations and the need to raise  additional  funds through
public or private debt or equity financing.

     Effective  September 30, 1998,  the Company  consummated a merger with Agro
Power  Development,  Inc.  ("APD").  The Company  believes  APD will provide the
combined entity greater international presence,  increased marketing capability,
management  depth,  and the operating level needed to accelerate  revenue growth
and increase shareholder value.


     The Company believes its $358,000 of cash and cash equivalents and $533,000
of short-term  investments as of June 30, 1998, along with revenues from product
sales, and funds available under its revolving line of credit,  coupled with the
financial  resources of and funds available to APD and the operating capacity of
APD will be  sufficient to fund the combined  entity's  working  capital  needs,
planned  capital  expenditures,  restructuring  program  initiatives and related
obligations,  and to service its indebtedness through June 30, 1999. The Company
may need to raise additional funds to finance its ongoing  operations after June
30, 1999,  although there can be no assurances that such funds will be available
on terms favorable to the Company.


                                       31

<PAGE>

     See Note 8 for a discussion of the Company's prior restructuring  programs,
and Note 11 and Parts I and II regarding the Merger between the Company and Agro
Power Development, Inc. and the operations of APD.

2.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

(a) Principles of Consolidation

     The consolidated  financial  statements  include the accounts of EcoScience
and its wholly owned  subsidiaries,  AGRO and EPSC.  All  material  intercompany
transactions and balances have been eliminated in consolidation.

(b) Use of Estimates in the Preparation of Financial Statements

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

(c) Cash and Cash Equivalents, and Short-Term Investments


     Cash and cash  equivalents,  and short-term  investments  consist of highly
liquid investments and are stated at the lower of cost or market value. Cash and
cash equivalents consist of investments with original maturities of less than 90
days.  Short-term  investments have original maturities greater than 90 days and
such  securities  are  classified  as  available  for  sale in  accordance  with
Statement of Financial  Accounting  Standards ("SFAS") No. 115,  "Accounting for
Certain  Investments  in Debt  and  Equity  Securities."  The  Company  uses the
specific  identification  method in  determining  the cost  basis of  short-term
investments, and in computing any realized gains or losses from the sale of such
securities.  Net realized gains on short-term  investments were $0 and $2,000 in
fiscal  years 1998 and 1997,  respectively.  Net realized  losses on  short-term
investments were $58,000 in 1996.


     Cash and cash  equivalents  consist of cash and highly  liquid money market
funds,  the balance of which was  $358,000 and  $1,247,000  at June 30, 1998 and
1997,  respectively.  Short-term investments consist of United States government
obligations with an original  maturity date of greater than 90 days, the balance
of which was  $533,000  and  $528,000 at June 30,  1998 and 1997,  respectively.
Aggregate fair value of the Company's  short-term  investments  held at June 30,
1998 amounted to $533,000,  whereas cost was  $527,000,  therefore an unrealized
gain of $6,000 is reflected in the consolidated financial statements.

(d) Concentration of Credit Risk

     Financial   instruments   which   potentially   subject   the   Company  to
concentrations  of  credit  risk  consist  of  accounts   receivable  and  other
receivables.  The  Company  primarily  invests its  available  funds into United
States Government  securities as well as investments with high quality financial
institutions.  The  Company  performs  ongoing  evaluations  of  its  customers'
financial conditions and,



                                       32

<PAGE>

generally,  requires no collateral  from its  customers.  The Company  maintains
reserves and allowances for potential credit losses;  which to date, such credit
losses have been insignificant and within management's expectations.

 (e) Inventories

           Inventories are stated at the lower of first-in,  first-out  ("FIFO")
cost or market and consist of the following:

                                                         (In thousands)
                                                   -------------------------
                                                            June 30,
                                                   -------------------------
                                                    1998               1997
                                                   ------             ------

Raw materials...........................           $   74             $   17
Finished goods..........................            2,252              1,923
                                                   ------             ------
                                                   $2,326             $1,940
                                                   ======             ======

     Finished  goods  inventories  include  material,  labor  and  manufacturing
overhead.

(f) Other Current Assets

     Other current assets consist of the following:

<TABLE>
<CAPTION>
                                                           (In thousands)
                                                               June 30,
                                                   -----------------------------
                                                    1998    
               1997
                                                   ------                 ------
<S>                                                <C>                    <C>   
Prepaid insurance ......................           $   30                 $   35
Prepaid equipment project costs ........              838                    653
Non-trade receivables ..................               59                     46
Merger costs ...........................              501                     --
Other ..................................               71                    108
                                                   ------                 ------
                                                   $1,499                 $  842
                                                   ======                 ======
</TABLE>

     The $501,000 in merger costs, along with other merger costs incurred during
the period July 1, 1998 through the effective  date of the merger and such costs
incurred by APD, will be expensed in the quarter ended  September 30, 1998,  see
Note 11 - Subsequent Events.



                                       33
<PAGE>

(g) Property and Equipment

     Property and equipment is summarized as follows:

                                                          (In thousands)
                                                             June 30,
                                                   -----------------------------
                                                      1998                1997
                                                   ---------             -------
Laboratory equipment....................             $    65             $   65
Furniture, fixtures and equipment.......               1,316                926
Leasehold improvements..................                  62                 62
                                                     -------              -----
                                                       1,443              1,053
                                                   
Less accumulated depreciation and
  amortization..........................                (548)              (491)
                                                     -------             -------
                                                     $   895             $   562
                                                     =======             =======

     The Company provides for depreciation and amortization  using the declining
balance and straight line methods by charges to operations in amounts  estimated
to allocate the cost of these assets over their useful lives as follows:

Classification                                          Estimated Useful Life
--------------                                          ---------------------
Laboratory equipment....................................       5 Years
Furniture, fixtures and equipment.......................      5-7 Years

     Leasehold  improvements  are  amortized  over the term of the  lease or the
useful life of the asset, whichever is shorter.

(h) Intangible Assets

     Intangible assets consist primarily of goodwill and other intangible assets
resulting  from  acquisitions   accounted  for  using  the  purchase  method  of
accounting.  Goodwill is amortized using the straight line method over 20 years.
Other intangible assets relating to acquired  businesses consist  principally of
amounts  attributable to distribution  agreements and other deferred costs.  The
amortization  for  distribution  agreements  and  other  deferred  costs is on a
straight line basis over five years.

     Goodwill, net of accumulated amortization, was $1,542,000 and $1,710,000 at
June 30, 1998 and 1997,  respectively.  The accumulated amortization of goodwill
and other  intangible  assets totaled $459,000 and $823,000 at June 30, 1998 and
1997,  respectively.  Amortization  of  goodwill  and  other  intangible  assets
included in the accompanying consolidated statements of operations was $136,000,
$204,000 and $204,000 in fiscal years 1998, 1997 and 1996, respectively.  During
1998,  the Company  completed the  amortization  of the value of a  distribution
agreement,  the  original  value of which  amounted  to  $500,000;  such  amount
accordingly was retired.




                                       34

<PAGE>

(i) Accrued Expenses and Other Current Liabilities

     Accrued expenses and other current liabilities consist of the following:

                                                              (In thousands)
                                                                 June 30,
                                                          ----------------------
                                                           1998            1997
                                                          ------          ------
Payroll related costs ..........................          $  151          $  136
Professional fees ..............................             173             146
Accrued warranty costs .........................              72              59
Accrued inventory purchases ....................             122              83
Customer deposits ..............................           1,209             971
Other ..........................................              88             357
                                                          ------          ------
                                                          $1,815          $1,752
                                                          ======          ======

(j) Revenue Recognition

     Product   sales   revenue  is   recognized   upon   shipment  or  equipment
installation, as applicable. Certain equipment installation sales are covered by
a warranty  provision.  The resulting warranty cost estimate is accrued when the
sale is recognized.  Warranty costs are charged against accrued warranty cost as
incurred,  and such  accrual is reviewed  periodically  to assure its  adequacy.
Additionally,  certain equipment  installation  sales require customer deposits.
Such deposits are recorded as a liability until the sale is recognized, then the
deposit is applied as an offset against the receivable resulting from such sale.

     The Company recognizes revenue under research and development agreements in
accordance with the terms of the respective  contracts which typically stipulate
as the work is performed and costs are incurred.  The Company recognizes license
fees under sales and license agreements,  as certain milestones are achieved and
related non-refundable license fees are received.

(k) Research and Development Expenses

     The Company  charges  research and  development  expenses to  operations as
incurred.  Expenses incurred by EcoScience under third party funded research and
development  programs totaled  approximately  $53,000,  $7,000, and $0 in fiscal
years 1998, 1997 and 1996, respectively.  Expenses incurred under Company funded
research and development programs totaled approximately  $412,000,  $501,000 and
$1,018,000 in fiscal years 1998, 1997 and 1996, respectively.

(l) Foreign Currency Translation


     Assets and liabilities of the Company's Canadian  subsidiary are translated
into U.S.  dollars at year end  exchange  rates.  Revenue and expense  items are
translated at average rates prevailing during the year.  Cumulative  translation
adjustments have been immaterial.  Transaction  gains and losses are included in
the results of  operations  as  incurred,  and amounted to, on a net (loss) gain
basis,  ($3,000),  $29,000,  and $5,000 for fiscal years 1998,  1997,  and 1996,
respectively.




                                       35
<PAGE>

(m) Earnings Per Share

     During fiscal 1998, the Company adopted  Statement of Financial  Accounting
Standards No. 128,  "Earnings per Share," which  requires  presentation  of both
basic  and  diluted  earnings  per  share  in  the  Consolidated   Statement  of
Operations.  Earnings per common share (basic) as calculated in accordance  with
this  statement  does not  differ  from  earnings  per share  reported  in prior
periods.

     A  reconciliation  of weighted  average  common shares  outstanding  to the
weighted average common shares assuming dilution  follows:

                                                            (In thousands)
                                                         Years ended June 30,
                                                      --------------------------
                                                       1998      1997      1996
                                                      ------    ------    ------
Weighted average common shares outstanding .......    10,456    10,137     9,070
Dilutive effect of common shares issuable (1) ....      --         176      --
                                                      ------    ------    ------
Weighted average common shares outstanding
    assuming dilution ............................    10,456    10,313     9,070
                                                      ======    ======    ======

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

     Common stock purchase warrants and stock options at June 30, 1998, 1997 and
1996 to purchase  1,407,454,  928,366 and  1,294,976  shares,  respectively,  of
common stock were not included in the  computation  of earnings per common share
assuming dilution because their effect would be  anti-dilutive.  See Note 11 for
Subsequent Event.

(n) Fair Value of Financial Instruments

     No class of  financial  instrument  had a material  difference  between its
carrying  value and estimated fair value based on market  quotations,  projected
cash flows or other estimating methods.








                                       36
<PAGE>

(o) Supplemental Cash Flow Information

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

<TABLE>
<CAPTION>
                                                                                                            (In thousands)
                                                                                                         Years Ended June 30,
                                                                                                  ---------------------------------
                                                                                                   1998         1997         1996
                                                                                                  -------      -------      -------
<S>                                                                                               <C>          <C>          <C>    
Cash paid for:
  Interest ..................................................................................     $   135      $   196      $   608
  Income taxes ..............................................................................           5           15           18

Non-cash investing and financing activities:
  Disposition of assets under capital lease .................................................        --            308        2,936
  Termination of capital lease obligation ...................................................        --           (405)      (3,500)
  Termination of operating lease obligation and related reduction of accrued
      restructuring costs ...................................................................        --           --         (2,050)
  Issuance of common stock in exchange for termination of operating lease obligation.........        --           --            500
  Reduction of goodwill for
      purchase price adjustment .............................................................          67         --           --
  Reduction of accrued expenses and other
      current liabilities for purchase price adjustment .....................................         (67)        --           --
</TABLE>

(p) Long Lived Assets

     The Financial  Accounting Standards Board has issued Statement of Financial
Accounting  Standards  ("SFAS") No. 121,  "Accounting for the Impairment of Long
Lived  Assets and for Long Lived  Assets to be Disposed of " ("SFAS  121").  The
Company  was  required  to adopt  this  standard  as of July 1,  1996.  SFAS 121
requires,  among other  things,  that an entity review its long lived assets and
certain related  intangibles for impairment  whenever  changes in  circumstances
indicate that the carrying amount of an asset may not be fully recoverable. As a
result of a review,  the Company does not believe any  impairment  exists in the
recoverability of its long lived assets.

(q) Stock Based Compensation

     The Financial  Accounting Standards Board has issued Statement of Financial
Accounting  Standards No. 123,  "Accounting for Stock Based Compensation" ("SFAS
123"),  which  encourages,  but does not require an entity  account for employee
stock based  compensation  under a fair value based  method.  SFAS 123 allows an
entity to  continue  to  measure  compensation  cost for  employee  stock  based
compensation  plans  using  the  intrinsic  value  based  method  of  accounting
prescribed  by APB Opinion No. 25,  "Accounting  for Stock Issued to  Employees"
("APB  25").  The  Company   continues  to  account  for  employee  stock  based
compensation  using the intrinsic value based method and is required to make pro
forma  disclosures  of net  income and  earnings  per share as if the fair value
based  method of  accounting  under SFAS 123 had been  applied (see Note 4).



                                       37

<PAGE>

(r) Income Taxes

     The Company  accounts  for income taxes under the  provisions  of SFAS 109,
"Accounting  for Income  Taxes".  SFAS 109 utilizes the  liability  method,  and
deferred  taxes are  determined  based on the  estimated  future tax  effects of
differences  between  the  financial  statements  and tax  basis of  assets  and
liabilities at currently enacted tax laws and rates.

(s) Reclassifications

     Certain  amounts  in  the  fiscal  1997  and  1996  consolidated  financial
statements have been reclassified to conform to the current year presentation.

(t) New Accounting Pronouncements

     In June 1997, the FASB issued SFAS 130, "Reporting  Comprehensive  Income,"
which is effective  for fiscal years  beginning  after  December 15, 1997.  This
statement  establishes  standards for reporting and  presenting  information  on
comprehensive income and its components (revenues,  expenses,  gains, losses and
currency  translation  adjustments)  in the financial  statements.  Also in June
1997, the FASB issued SFAS 131, "Disclosures about Segments of an Enterprise and
Related  Information,"  which  is  effective  beginning  in  fiscal  1999.  This
statement  revises  standards  for  public  companies  to report  financial  and
descriptive  information about reportable  operating  segments and certain other
geographic information.  The Company is evaluating methods for adoption of these
statements, if necessary, and currently does not expect these new pronouncements
to have a material impact on its consolidated financial statements.

3. DEBT AND LEASES

(a) Revolving Line of Credit

     Revolving line of credit consists of the following:

                                                   (In thousands)
                                                      June 30,
                                         ----------------------------------
                                          1998                         1997
                                         ------                       ------
Revolving line of credit......           $1,091                       $   --
                                         ======                       =======

     On April 28, 1997, the Company and its lender entered into a revolving line
of credit  agreement,  under  which the  Company  may borrow up to the lesser of
$3,000,000 or the sum of (i) 85% of eligible  account  receivables,  as defined,
and (ii) eligible  inventory at stratified rates from 25% to 50% up to a maximum
of the  lesser  of  $1,200,000  or 66.67% of the  amount  of  eligible  accounts
receivable. Funds borrowed under the revolving line of credit bear interest at a
rate of prime  (8.50% at June 30,  1998)  plus 2.0% and are  secured  by all the
assets of the Company and all of the  outstanding


                                       38

<PAGE>

common stock of AGRO owned by the Company.  Interest on funds borrowed under the
revolving  line of credit  is  payable  monthly  in  arrears  and  repayment  of
principal  was  originally  due on April 27, 1998,  and was subject to automatic
renewal,  as provided.  The Company and its lender entered into a series of four
amendments  to the  loan  documents  that  extended  the  maturity  date  of the
revolving  line of credit to December 28,  1998.  The  revolving  line of credit
imposes a financial covenant on the Company that requires a minimum tangible net
worth of $750,000,  as defined.  As of June 30,  1998,  the Company had $784,000
additional borrowing availability under the revolving line of credit.

(b) Long-Term Debt

     Long-term debt consists of the following:

                                                              (In thousands)
                                                                 June 30,
                                                           --------------------
                                                           1998            1997
                                                           ----            ----
Installment notes ..............................           $ 13            $ 11
Less current maturities ........................             (6)            (10)
                                                           ----            ----
                                                           $  7            $  1
                                                           ====            ====

     As of June  30,  1998,  the  future  maturities  of  long-term  debt are as
follows:

                                                         (In thousands)
                      Years Ending June 30,                  Amount
                      ---------------------                  ------
                           1999.....................          $  6
                           2000.....................             6
                           2001.....................             1


     In  connection  with the  acquisition  of  American  Machinery  Corporation
("AMC") in May 1994,  the  Company  issued a  promissory  note in the  principal
amount of $430,000 to the  shareholder  of AMC.  In February  1996,  the Company
settled  the  remaining  balance of the  promissory  note and other  acquisition
related liabilities totaling $501,000 for $251,000,  excluding $9,000 of related
transaction  expenses,  which  resulted  in an  extraordinary  gain on the early
extinguishment of debt of $241,000 or $0.03 per share,  basic and diluted,  with
no related  income tax effect.  As part of this  settlement,  the  Company  also
issued a warrant to  purchase  50,000  shares of its  common  stock at $2.00 per
share to the shareholder of AMC.




                                       39

<PAGE>

(c) Leases

     Future minimum lease payments under non-cancelable  operating leases are as
follows:

                                                                  (In thousands)
Years ending June 30,                                                 Amount
--------------------                                                 -------
     1999.............................................               $   428
     2000.............................................                   146
     2001.............................................                   107
     2002.............................................                     9
                                                                     -------
Total minimum lease payments..........................               $   690
                                                                     =======

     Rental  expense  included in the  accompanying  consolidated  statements of
operations was $370,000,  $392,000, and $833,000 for fiscal years 1998, 1997 and
1996,  respectively.   Sublease  rental  income  was  ($32,000),   (33,000)  and
($346,000) for fiscal years 1998, 1997 and 1996, respectively.

4. STOCKHOLDERS' INVESTMENT

(a) Private Placement

     In September 1996, the Company sold 1,040,000 unregistered shares of common
stock in a private  placement.  Net proceeds  realized from the equity  offering
totaled $1,139,000 after fees and expenses totaling $161,000. In connection with
the offering,  the Company also issued a warrant to purchase  156,000  shares of
its  common  stock at  $2.00  per  share to the  placement  agent.  The  Company
registered  the shares of the offering and warrant under the  Securities  Act of
1933. The registration was declared effective in April 1997.






                                       40
<PAGE>

(b) Common Stock Purchase Warrants


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


<TABLE>
<CAPTION>
                                                                Number of                   Price Per         Weighted Average
                                                                Warrants                   Share Range         Exercise Price
                                                                ---------                --------------       ----------------
<S>                                                              <C>                     <C>                       <C>   
Outstanding at June 30, 1995 .......................             360,047                 $0.38 - $11.00            $ 6.60
      Granted ......................................             250,000                  1.38 -   3.00              2.15
      Canceled .....................................            (151,087)                 0.38 -   9.55              4.07
                                                                 -------                 --------------            ------
Outstanding at June 30, 1996 .......................             458,960                  1.38 -  11.00              5.01
      Granted ......................................             281,554                  1.00 -   3.75              2.30
      Canceled .....................................             (78,960)                 6.00 -  11.00             10.22
                                                                 -------                 --------------            ------
Outstanding at June 30, 1997 .......................             661,554                  1.00 -   9.75              3.24
      Granted ......................................                --                      -- -     --                --
      Canceled .....................................             (40,000)                 6.88 -   7.00              6.91
                                                                 -------                 --------------            ------
Outstanding at June 30, 1998 .......................             621,554                 $1.00 - $ 9.75            $ 3.00
                                                                 =======                 ==============            ======

Exercisable at June 30, 1998 .......................             621,554                 $1.00 - $ 9.75            $ 3.00
                                                                 =======                 ==============            ======
</TABLE>

(c) Stock Option Plans

     In May 1991, the Board of Directors approved a stock option plan (the "1991
Plan") to grant  options to acquire up to  1,300,000  shares of common  stock to
employees and consultants. Options granted under the 1991 Plan vest over various
periods and expire no later than 10 years from the date of grant.  Options  have
been  granted at the fair  value of the  Company's  common  stock on the date of
grant.

     In November  1996,  the Board of  Directors  approved an  amendment  to the
Company's  1991 Stock  Option  Plan.  The  amendment  provides for the number of
shares of the  Company's  common stock which may be granted under the 1991 Stock
Option Plan shall be increased  from  1,300,000 to 1,800,000  shares.  The Board
authorized this increase to ensure a sufficient number of option shares would be
available for future  grants.  The  stockholders  ratified  this  amendment at a
special stockholders' meeting in September 1998.




                                       41

<PAGE>

     Option  activity for the three years ended June 30, 1998,  is summarized as
follows:

<TABLE>
<CAPTION>
                                                                Number of                  Price Per          Weighted Average
                                                                 Options                  Share Range          Exercise Price
                                                                ---------                --------------       ----------------
<S>                                                              <C>                     <C>                       <C>   
Outstanding at June 30, 1995..................                   461,033                 $0.38 - $11.38            $ 4.48
      Granted.................................                   550,500                  0.56 -   1.63              0.97  
      Exercised...............................                    (1,666)                          0.45              0.45  
      Canceled................................                  (173,851)                 0.60 -  11.38              0.43 
                                                                 -------                 -----   ------             -----
                                              
Outstanding at June 30, 1996..................                   836,016                  0.38 -  11.38              2.17
      Granted.................................                   340,178                  0.94 -   2.50              1.21
      Exercised...............................                   (19,000)                          0.88              0.88
      Canceled................................                  (271,816)                 0.38 -  11.38              3.99
                                                                 -------                 -----   ------             -----

Outstanding at June 30, 1997..................                   885,378                  0.56 -   7.00              1.27
      Granted.................................                    33,400                  0.81 -   1.63              1.30 
      Exercised...............................                   (87,278)                 0.88 -   1.00               .96 
      Canceled................................                   (45,600)                 0.88 -   2.13              1.06  
                                                                 -------                 -----   ------             -----

Outstanding at June 30, 1998..................                   785,900                 $0.56 - $ 7.00             $1.32
                                                                 =======                 =====   ======             =====

Exercisable at June 30, 1998.................                    613,341                 $0.56 - $ 7.00             $1.31
                                                                 =======                 =====   ======             =====
</TABLE>

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

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

<TABLE>
<CAPTION>
                                                                   (In thousands)
                                                                Years Ended June 30,
                                                            ------------------------------
                                                             1998       1997       1996
                                                            ------     -------    ------- 

<S>                                                         <C>        <C>        <C>     
Net loss....................................................($1,192)   ($  106)   ($  738)
                                                            ======     =======    ======= 
Net loss per share, basic and diluted.......................($0.11)    ($ 0.01)   ($ 0.08)
                                                            ======     =======    ======= 
</TABLE>

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

     Under SFAS 123,  the fair value of each stock  option grant is estimated on
the date of grant using the Black-Scholes option pricing model with the weighted
average assumptions in 1998, 1997, and 1996,  respectively as follows:  (i) risk
free  interest rate of 6% for all years;  (ii)  expected  life of  approximately
eight years for all years;  and (iii)  expected  volatility of 67%, 70%, and 70%
for 1998, 1997, and 1996,  respectively.  The weighted average fair value of the
options  granted  during  1998,  1997,  and 1996 was  $0.85,  $0.86,  and $0.69,
respectively.



                                       42

<PAGE>

5. INCOME TAXES

     As of  June  30,  1998,  the  Company  had  available  net  operating  loss
carryforwards  of  approximately  $45,300,000  and research and  development tax
credit  carryforwards of approximately  $900,000 to reduce future federal income
taxes, if any. These carryforwards expire through 2011 and are subject to review
and possible  adjustment by the Internal Revenue Service.  The Tax Reform Act of
1986 limits a Company's  ability to utilize  certain net operating  loss and tax
credit  carryforwards in the event of a cumulative change in ownership in excess
of 50%, as defined. The Company has completed numerous financings and recently a
merger with APD which has resulted in a change in ownership in excess of 50%, as
defined.   Therefore,   utilization   of  net  operating  loss  and  tax  credit
carryforwards will be limited due to ownership changes.

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

                                                          (In thousands)
                                                             June 30,
                                                   ----------------------------
                                                     1998                1997
                                                   -------              ------- 
Deferred tax assets........................        $16,500              $16,000
Valuation allowance........................        (16,500)             (16,000)
                                                   -------              ------- 
                                                   $    --              $    --
                                                   =======              =======

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

                                                          (In thousands)
                                                             June 30,
                                                   ----------------------------
                                                     1998                1997
                                                   -------              ------- 
Net operating losses.......................        $15,400              $15,000
Other temporary differences................            200                  100
Research and development credits...........            900                  900
                                                   -------              -------
                                                   $16,500              $16,000
                                                   =======              =======


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


                                       43

<PAGE>

     Income tax expense  (benefit)  differs from the amount computed by applying
the U.S. statutory federal income tax rate for fiscal years 1998, 1997 and 1996.
A  reconciliation  of the provision  for (benefit  from) income taxes for fiscal
years 1998, 1997 and 1996 with the applicable federal income tax rate follows:

                                                           (In thousands)
                                                        Years Ended June 30,
                                                     -------------------------
                                                      1998      1997      1996
                                                     -----     -----     -----
(Benefit) provision at nominal rate ..............   (34.0%)    34.0%    (34.0%)
Increases (reductions) in taxes resulting from:
    Net operating loss carry forward .............    --       (34.0)     --
    Valuation allowance ..........................    34.0      --        34.0
    Foreign income taxes .........................    --        10.8       4.6
    State income taxes ...........................     0.2       0.5       0.4
                                                     -----     -----     -----

Provision for (benefit from) income taxes - % ....     0.2%     11.3%      5.0%
                                                     =====     =====     =====
Provision for (benefit from) income taxes - $ ....   $   2     $  49     $  28
                                                     =====     =====     =====

     For fiscal years 1998, 1997, and 1996 income tax expense has been reflected
in general and administrative expenses, due to its immateriality.

     The provision for (benefit  from) income taxes for fiscal years 1998,  1997
and 1996 is primarily composed of foreign and state income taxes.

6. TRANSACTIONS WITH AFFILIATES

     The  Company  sold  product  to APD in the amount of  $5,012,000  or 22% of
product  sales in 1998,  $2,954,000 or 14% of product sales in 1997 and $573,000
or 4% of product  sales in 1996. An officer of the Company is also an officer of
APD.  Net amount due from APD was  $696,000  and  $348,000  at June 30, 1998 and
1997,  respectively.  APD also pays a monthly fee to the Company for  facilities
and other costs amounting to $42,000,  $39,000,  and $55,000 for 1998, 1997, and
1996, respectively. Management believes that prices and fees charged to APD were
consistent  with those that would be charged in arm's length  transactions.  Had
the merger not occurred, sales to APD were expected to account for more than 10%
of the  Company's  total product sales for the fiscal year ending June 30, 1999.
See Note 11 Subsequent Events.

7. SALES, LICENSE AND DEVELOPMENT AGREEMENTS


     AGRO has a distribution  agreement with an unrelated  company for a term of
three years ending in December 2000, with automatic  one-year  extensions unless
either party elects to terminate the  agreement.  The agreement  grants AGRO the
exclusive  right to sell the unrelated  company's  product in the United States,
Canada,  Mexico,  and the  Caribbean.  The  agreement  requires AGRO to maintain
minimum  annual sales which,  if not met,  would allow the unrelated  company to
modify  the  exclusivity  of the  agreement.  The sale of  products  under  this
agreement  accounted for 40%, 42% and 45% of the  Company's  total product sales
for the fiscal years ended June 30, 1998, 1997 and



                                       44

<PAGE>

1996,  respectively.  Although  there are a limited  number  of  sources  of the
particular  growing  medium  products  that are  sold  under  this  distribution
agreement,  the Company's management believes that other suppliers could provide
similar  products on comparable  terms.  A change in suppliers,  however,  could
cause a delay in filling orders as well as a possible loss of sales, which would
affect operating results adversely.

     In  August  1995,  AGRO  entered  into a  distribution  agreement  with  an
unrelated  company for an initial  term of three years for the fruit,  vegetable
and flower markets in the United States and Canada ending in September 1999, and
in the fruit, vegetable and flower markets in the Caribbean and Mexico ending in
August 1997,  which has been extended to August 1999.  These  agreements will be
automatically  extended for each of the respective  terms set forth above unless
either party elects to terminate  the  agreement  upon ninety days prior written
notice. The Company is currently operating under such automatic extensions.  The
agreement  grants  AGRO the  exclusive  right to sell  the  unrelated  company's
sorting,  grading and  packing  products  and  equipment  in the United  States,
Canada, Mexico and the Caribbean. The agreement requires AGRO to secure annually
certain minimum market share  percentage of the market for sorting,  grading and
packing machines.  The sale of products under this agreement  accounted for 21%,
26% and 20% of total  product  sales for the fiscal  years ended June 30,  1998,
1997 and 1996,  respectively.  Although  there are a limited  number of sorting,
grading  and  packing  equipment  manufacturers  in  the  world,  the  Company's
management  believes that other  suppliers  could provide  similar  equipment on
comparable terms. A change in supplier,  however, could cause a delay in filling
orders,  as well as a  possible  loss of sales,  which  would  affect  operating
results adversely.

     In  September  1995,  AGRO entered into a  distribution  agreement  with an
unrelated  company for a term  commencing on July 1, 1995 and ending on June 30,
1997, with automatic one year extensions unless either party elects to terminate
the agreement with three months  advanced  notice in writing.  The agreement has
been extended to June 30, 1999. The agreement grants AGRO the exclusive right to
sell the unrelated company's  environmental  control products and accessories in
the United States, Canada and Mexico.


     In June 1992, the Company  entered into a Product  Development  and License
Agreement  with Terminix (the "Terminix  Agreement")  for  collaboration  on the
development  and  marketing  of termite  control  products.  Under the  Terminix
Agreement,  Terminix  provided  funding to the  Company for the  development  of
biological  termite control  products and received  exclusive  rights to use and
distribute any resulting  products in the United States and Canada.  The Company
has retained all rights  elsewhere.  The Company  managed  product  development,
manufactures  and  sells  products  to  Terminix  at an agreed  markup  over the
Company's manufacturing cost. The Company will also share in any profit realized
by  Terminix  over  specified  levels.  The  Terminix  Agreement  extends  until
expiration  of the last to expire of any patents  which may issue  covering  the
Company's biological termite control technology,  subject to Terminix's right to
terminate the agreement at any time.

     In June 1993, the Company  entered into a Sales and License  Agreement (the
"Maruwa  Agreement")  with  Maruwa  BioChemical  Co.,  Ltd.  to license  certain
biopesticide technology for control of cockroaches.  Under the agreement, Maruwa
Biochemical   will   pursue   at  its   own   expense   the   registration   and
commercialization  of the Company's  cockroach and termite  control  products in
Japan.  At this time  emphasis  has  shifted to the  Bio-Blast  product  and the
Company  anticipates  entering  into a


                                       45

<PAGE>

formal agreement with Maruwa for the Bio-Blast product.  The Company will retain
manufacturing rights and will receive royalties on sales of Bio-Blast.

8. ASSET VALUATION AND RESTRUCTURING CHARGES

     The  Company's  consolidated  statement of  operations  for 1995 included a
$6,000,000 or $0.68 per share, basic and diluted, charge to write down the value
of certain  assets and to provide for the costs  associated  with the closure of
the Company's  facilities  located in Worcester,  Northborough,  and Shrewsbury,
Massachusetts,  and for reductions in the  Massachusetts  based work force.  The
Company completed a major portion of its 1995  restructuring  program activities
in  fiscal  1996,  1997,  and  1998,  and the  remaining  restructuring  program
initiatives are expected to be completed in fiscal 1999 and thereafter.

     At the close of fiscal 1995,  the Company began the  implementation  of the
restructuring  program  which was  designed  to shift the  corporate  focus from
research  and  development  to  commercial  operations,  in an  effort to reduce
operating  losses and  conserve  cash  resources.  As part of the  restructuring
program,  the Company  eliminated  substantially all of its Massachusetts  based
work force (33  positions),  closed the  Worcester  facility  and all  remaining
functions were moved to the Northborough facility in the first quarter of fiscal
1996.  During the second  quarter of fiscal  1996,  the  Company  relocated  its
Massachusetts based operations  including corporate  headquarters to AGRO's East
Brunswick, New Jersey facility.


     In May 1993, the Company entered into a 15 year capital lease agreement for
a manufacturing  facility in Northborough,  Massachusetts.  The present value of
the minimum lease payments under this capital lease obligation was $3,525,000 at
September 29, 1995. On September  29, 1995,  the Company and the lessor  entered
into a lease  termination  agreement  under which the Company paid the lessor on
October 31, 1995 approximately  $195,000;  released to the lessor  approximately
$305,000 held in an escrow account;  and agreed to make an advance lease payment
for the period October 1995 through  December 1995 to the lessor in exchange for
an early termination and release from the remaining lease obligations  effective
December  31, 1995.  The effect of this lease  termination  on the  consolidated
financial  statements  during  fiscal 1996 was to reduce  assets  under  capital
leases by  $2,936,000  and  capital  lease  obligations  by  $3,500,000,  and to
increase accrued restructuring costs by $73,000.


     On January  11,  1996,  the  Company  and its  landlord  for its  Worcester
corporate  headquarters  and research and  development  facility  entered into a
lease termination agreement,  under which the Company paid the landlord $125,000
on January 18, 1996 and issued 500,000 shares of the Company's common stock with
a market  value of $500,000 on January 22,  1996,  in exchange  for an immediate
termination  of the lease.  Additionally,  the  Company  incurred  approximately
$25,000  for  expenses  related  to the  completion  of the  transaction.  After
accounting for these settlement  provisions which totaled $650,000,  the Company
reversed  $1,550,000  of  accrued  restructuring  costs in the third  quarter of
fiscal 1996 that related to accrued  restructuring  costs which were  originally
recorded in fiscal 1995  ($2,000,000)  and the remaining  accrued  restructuring
costs which were originally recorded in fiscal 1994 ($200,000).



                                       46

<PAGE>

     In  August  1996,  the  Company  and a  finance  company  reached  a  lease
settlement  agreement  under  which the  Company  paid  $880,000  to satisfy the
remaining lease obligation of approximately  $1,248,000 of principal and $17,000
of accrued  interest,  and return certain leased equipment with a net book value
for  $308,000  to  the  finance  company,  which  resulted  in a  reversal  of a
restructuring  charge  of  $77,000  in 1997  from  accrued  restructuring  costs
originally recorded in fiscal 1995 and 1994.

     In June 1997, the Company reversed $300,000 of accrued  restructuring costs
no longer deemed necessary for facilities  consolidations and relocation,  which
relate to accrued restructuring costs originally recorded in 1995.


     During fiscal 1998, the Company paid and charged  $109,000 of restructuring
related costs of which $39,000 related to employee severance  benefits,  $57,000
related  to other  contracted  liabilities,  and  $13,000  related  to  facility
consolidations.  As of June 30, 1998,  accrued  restructuring  costs of $348,000
(total  current and  noncurrent  portions)  consisted  of $237,000  for facility
consolidations  and lease  settlements,  $98,000 for employee severance benefits
and $13,000 for other contractual liabilities.

9. GEOGRAPHIC SEGMENT INFORMATION

     Financial information  segregated by major geographic area is summarized as
follows:

                                                     (In thousands)

                                                   Years Ended June 30,
                                           ------------------------------------
                                             1998          1997          1996
                                           --------      --------      --------
Product sales:
      United States ..................     $ 15,383      $ 15,210      $  9,730
      Canada .........................        6,934         5,643         4,421
                                           --------      --------      --------
           Consolidated ..............     $ 22,317      $ 20,853      $ 14,151
                                           ========      ========      ========

Net (loss) income:
      United States ..................     ($   790)     $    309      ($   587)
      Canada .........................         (177)           76          --
                                           --------      --------      --------
           Consolidated ..............     ($   967)     $    385      ($   587)
                                           ========      ========      ========

                                                  June 30,
                                           ----------------------
                                             1998          1997
                                           --------      --------
Identifiable assets:
      United States ..................     $  8,998      $  7,829
      Canada .........................        1,379         1,226
      Intercompany eliminations ......         (751)         (180)
                                           --------      --------
           Consolidated ..............     $  9,626      $  8,875
                                           ========      ========




                                       47

<PAGE>

10. QUARTERLY FINANCIAL DATA (UNAUDITED)

     The  following  is  an  analysis  of  certain  items  in  the  consolidated
statements of operations by quarter for fiscal 1998 and 1997:

<TABLE>
<CAPTION>
Consolidated Statements of
Operations Data:                                                                (In thousands, except per share amounts)
                                                                                                   1998
                                                                  ------------------------------------------------------------------
                                                                  First Quarter    Second Quarter    Third Quarter    Fourth Quarter
                                                                  -------------    --------------    -------------    --------------
<S>                                                                  <C>               <C>              <C>               <C>    
Revenues ....................................................        $ 3,993           $ 7,859          $ 6,371           $ 4,094
Cost of goods sold ..........................................          3,088             6,248            4,949             3,298
                                                                     -------           -------          -------           -------
Gross profit ................................................            905             1,611            1,422               796

Research and development ....................................            100               102              105               158
Selling, general, administrative and other ..................          1,280             1,444            1,234             1,278
                                                                     -------           -------          -------           -------

Net (loss) income ...........................................        ($  475)          $    65          $    83           ($  640)
                                                                     =======           =======          =======           =======
Net (loss) income  per share,
      basic and diluted .....................................        ($ 0.05)          $  0.01          $  0.01           ($ 0.06)
                                                                     =======           =======          =======           =======

<CAPTION>
                                                                                                   1997
                                                                  ------------------------------------------------------------------
                                                                  First Quarter    Second Quarter    Third Quarter    Fourth Quarter
                                                                  -------------    --------------    -------------    --------------
<S>                                                                  <C>               <C>              <C>               <C>    
Revenues ....................................................        $ 4,508           $ 7,753          $ 3,633           $ 4,959
Cost of goods sold ..........................................          3,405             6,049            2,608             3,640
                                                                     -------           -------          -------           -------
Gross profit ................................................          1,103             1,704            1,025             1,319

Research and development ....................................            128               153              128                99
Asset valuation and restructuring reversal ..................            (77)             --               --                (300)
Selling, general, administrative and other ..................          1,173             1,180            1,208             1,074
                                                                     -------           -------          -------           -------
Net (loss) income ...........................................        ($  121)          $   371          ($  311)          $   446
                                                                     =======           =======          =======           =======
Net (loss) income per share,
      basic and diluted .....................................        ($ 0.01)          $  0.04          ($ 0.03)          $  0.04
                                                                     =======           =======          =======           =======
</TABLE>

11. SUBSEQUENT EVENTS

(a)  Merger

     On September 30, 1998, the Company issued  9,421,487 shares of common stock
to the holders of the common stock of Agro Power  Development,  Inc., a New York
corporation, pursuant to an Agreement and Plan of Merger in which APD was merged
into Agro Acquisition  Corporation,  a Delaware  corporation and a newly formed,
wholly  owned  subsidiary  of the  Company.  The  stockholders  of APD  received
30,619.067  shares of the Company's common stock for each



                                       48

<PAGE>

outstanding  share of common stock of APD. In addition,  on September  30, 1998,
the Company issued 99,000 shares of common stock to certain  shareholders of APD
for their  entire 50%  interest in Village  Farms of Morocco,  S.A.,  a Moroccan
company, as provided for in the Agreement and Plan of Merger.  After the merger,
the stockholders of APD own approximately  80% of the outstanding  shares of the
Company on a fully diluted basis.

     The merger will be accounted for under the pooling of interests  method and
accordingly,  historical  financial  data in future  reports will be restated to
include APD amounts.  The  following  unaudited  pro forma data  summarizes  the
combined  results of  operations of the Company and APD as though the merger had
occurred at the beginning of fiscal 1996.


<TABLE>
<CAPTION>
(In thousands, except per share amounts)                            Years Ended June 30,
                                                         -------------------------------------
(Unaudited pro forma)                                       1998          1997         1996
                                                         ----------    ----------   ----------
<S>                                                      <C>           <C>          <C>       
Net revenues .........................................   $   45,832    $   36,495   $   24,668

Pro forma net (loss) income from continuing operations       (2,023)          534         (363)

Net (loss) income per common share:
   Basic .............................................        (0.17)         0.05        (0.03)
   Diluted ...........................................        (0.17)         0.05        (0.03)
</TABLE>

(b)  Amendment of Certificate of Incorporation

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






                                       49

<PAGE>

                               ARTHUR ANDERSEN LLP


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

Board of Directors and Stockholders of EcoScience Corporation:

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

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

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


                                                    Arthur Andersen LLP

Roseland,  New   Jersey
August 26, 1998 (except
with  respect   to  the
matters   discussed  in
Note  11,  as  to which
the  date  is  September
30, 1998)



Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosures
--------------------------------------------------------------------------------

     Not applicable.




                                       50

<PAGE>

                                    PART III

================================================================================

Item 10.  Directors and Executive Officers of the Registrant
--------------------------------------------------------------------------------

Directors

     Directors Continuing in Office Until the 1998 Annual Meeting

     Thomas Montanti

     Mr.  Montanti,  age 74,  has  served as a  Director  of the  Company  since
September 1998, when he was elected to serve as a Director by the Board pursuant
to certain  covenants  related to the Merger  between the  Company and APD.  Mr.
Montanti,  a co-founder  of APD, has been  Chairman of the Board and Director of
APD since its inception in 1990. Mr. Montanti co-founded Agro Dynamics,  Inc. in
1984.  Currently,  Mr. Montanti is President of NYPCO Industries,  Inc., and New
York Protective  Coverings Industry,  Inc., each of which is located in New York
and  distributes   building   products  and  provides   specialized   insulation
contracting to the marine and power generating industries.

     Larry M. Nouvel (1) (2) (Resigned)

     Mr.  Nouvel,  age 54, has served as a Director of the  Company  since March
1993.  In  September  1998,  Mr.  Nouvel  resigned  as a Director of the Company
pursuant to certain covenants related to the Merger between the Company and APD.
Mr.  Nouvel is currently  President of Speer  Products,  Inc., a company that is
primarily engaged in the development, manufacturing and marketing of insecticide
products to the  non-agricultural  markets.  From January  1986 to May 1992,  he
served as President of Roussel  BioCorporation,  a company that manufactures and
markets insecticide products to the non-agricultural  markets.  Previously,  Mr.
Nouvel  held  several  senior  marketing  and sales  positions,  including  Vice
President of Marketing and Sales,  for Zoecon  Industries,  Inc., a manufacturer
and marketer of insecticide  products to the professional  pest control markets.
Mr. Nouvel holds a B.A.  degree in Chemistry  from the University of Texas at El
Paso.

     Directors Continuing in Office Until the 1999 Annual Meeting

     Kenneth S. Boger (3) (Resigned)

     Mr. Boger, age 51, has served as a Director of the Company since July 1993.
In September  1998, Mr. Boger resigned as a Director of the Company  pursuant to
certain  covenants  related to the Merger between the Company and APD. Mr. Boger
is  currently  a partner in the Boston law firm of Warner & Stackpole  LLP,  the
Company's general counsel,  where he has practiced corporate law since 1976. Mr.
Boger holds an A.B.  from Duke  University,  an M.B.A.  from the  University  of
Chicago and a J.D. from Boston College Law School.


                                       51

<PAGE>


     E. Andrews Grinstead, III (2) (3) (Resigned)

     Mr.  Grinstead,  age 52, has served as a Director of the Company  since May
1991. In September  1998,  Mr.  Grinstead  resigned as a Director of the Company
pursuant to certain covenants related to the Merger between the Company and APD.
Mr.  Grinstead is currently  Chairman and Chief  Executive  Officer of Hybridon,
Inc., a pharmaceutical company, and serves as a director of Pharmos Corporation,
Meridien Medical Technologies and BioCapital. From October 1990 to June 1991, he
acted as a consultant and financial  advisor to emerging growth companies in the
medical field,  particularly  bio-pharmaceutical  companies.  From February 1984
through  September  1990,  he was a Managing  Director  and head of  PaineWebber
Incorporated's  Healthcare/Life  Sciences Group,  Managing  Director of the Life
Sciences Group at Drexel Burnham  Lambert  Incorporated  and a Vice President of
Kidder,  Peabody & Co., where he developed the Life Sciences  Corporate  Finance
Specialty Group. Mr. Grinstead graduated from Harvard University, the University
of Virginia School of Law and Harvard Business School.

     Albert Vanzeyst

     Mr.  Vanzeyst,  age 53,  has  served as a  Director  of the  Company  since
September  1998,  when he was elected to serve as a Director and Executive  Vice
President  by the Board  pursuant  to  certain  covenants  related to the Merger
between the Company and APD. Mr.  Vanzeyst,  a co-founder of APD, has been Chief
Operating Officer and a Director of APD since its inception in 1990. In January,
1997, he also assumed the role of President of APD. Mr. Vanzeyst has 30 years of
greenhouse  design,  engineering and  construction  experience  spanning several
countries,  crops and climates throughout the world.  Between 1984 and 1990, Mr.
Vanzeyst was President of Dace U.S.A., Inc., a subsidiary of Dace International,
Inc., an international turn-key greenhouse  construction company. Prior thereto,
he  participated  in  the  development,  design  and  construction  of  numerous
greenhouse  operations in several  countries  throughout the world. Mr. Vanzeyst
holds a degree in Foreign  Trade and  International  Commerce  from  Handelavond
College in the Netherlands.

     Heinz K. Wehner (1) (2)

     Mr.  Wehner,  age 67, has served as a Director of the  Company  since March
1993.  From March 1976 to June 1992,  Mr.  Wehner  served in several  management
positions with Chemagro Corporation and Mobay Corporation,  both subsidiaries of
Bayer A.G. in Germany and, most recently, Bayer Corporation,  where he served as
President of the Agricultural,  Animal Health and Consumer  Products  Divisions.
Previously, he held several management positions with Bayer Quimicas Unidas S.A.
in Peru,  including  Vice  President of the  Agricultural  Chemicals  and Animal
Health Division,  and with Bayer de Mexico S.A., including Vice President of the
Crop  Protection  and  Consumer  Products  Division.  Mr.  Wehner is an advisory
director for the Commerce  Bank of Kansas City,  N.A. in Kansas City,  Missouri.
Mr.  Wehner  attended  Escuelas  Americanas  in Peru where he  studied  business
administration.


                                       52

<PAGE>


     Directors Continuing in Office Until the 2000 Annual Meeting

     Michael A. DeGiglio

     Mr.  DeGiglio,  age 44,  has  served as a  Director  of the  Company  since
November  1996,  when he was  elected to serve as a Director  by the Board.  Mr.
DeGiglio joined the Company upon its  acquisition of Agro Dynamics,  Inc. ("AGRO
Dynamics") in November 1992, and has served as Chief  Executive  Officer of AGRO
Dynamics  since that time.  In July 1995,  Mr.  DeGiglio  assumed the offices of
President and Chief  Executive  Officer of the Company.  From 1984 until joining
the Company,  Mr.  DeGiglio was  employed by AGRO  Dynamics,  where he served as
Chief  Executive  Officer.  Prior to  co-founding  AGRO,  Mr.  DeGiglio was Vice
President of  International  Sales for NYPCO  International  Inc.  Mr.  DeGiglio
served on active  duty in the United  States  Navy as an Officer and Jet Aviator
from July 1976 through  January  1983,  and the Naval Air Reserves  from 1983 to
present,  currently  holding the rank of Captain  with the United  States  Naval
Reserve.  Throughout  his Naval  career,  he has held  various  department  head
positions,  completed a tour as Commanding  Officer of a Jet Aviation  Squadron,
performed  multiple tours overseas,  and has completed  numerous Senior Advanced
Management  courses.  Mr.  DeGiglio also serves as Chief  Executive  Officer and
Director  of APD.  Mr.  DeGiglio  received a B.S.  in  Aeronautical  Science and
Aviation Management from Embry Riddle Aeronautical University.

     David J. Ryan (1) (2) (3)

     Mr. Ryan, age 43, has served as a Director of the Company since 1988. Since
1983,  Mr.  Ryan has been a General  Partner  of  Copley  Venture  Partners,  an
affiliate of Copley Partners 2, L.P., a venture capital  investor in EcoScience.
Mr. Ryan has also been a Managing Partner of Mission Ventures,  L.P. since 1997.
Prior to his  involvement  in venture  capital,  Mr.  Ryan spent five years with
Medusa  Corporation,  a Midwest based  manufacturer  of industrial  and building
products, in several financial and operating capacities. Mr. Ryan also serves as
a director of Mulberry Child Care Centers and other private companies.  Mr. Ryan
holds a B.S.  from  Northeastern  University  and an M.B.A.  from  Case  Western
Reserve University.


----------
(1)  Member of the Compensation Committee.
(2)  Member of the Audit Committee.
(3)  Member of the Strategic Alternatives Committee.


Meetings and Committees of the Board of Directors

     The Board held nine  meetings  during the fiscal year ended June 30,  1998.
Each of the Directors  attended at least 75% of the Board  meetings and meetings
of committees of the Board of which he was a member.

     The Audit  Committee  consists of Messrs.  Ryan and Wehner.  During  fiscal
1998,  the full Board  performed  the  functions  of the Audit  Committee  which
included interactions with the Company's  independent  accountants to review the
scope of the annual audit, to discuss the adequacy of internal


                                       53

<PAGE>


accounting  controls  and  procedures,  and to perform  general  oversight  with
respect to the accounting  principles applied in the financial  reporting of the
Company.

     The Compensation  Committee's  functions are to recommend to the full Board
the amount,  character  and method of payment of  compensation  to all executive
officers and certain other key  employees of the Company and to  administer  the
Company's 1991 Stock Option Plan. The Compensation Committee consists of Messrs.
Ryan and Wehner. The Compensation Committee held one meeting during fiscal 1998.

     In fiscal 1995, the Company appointed Messrs. Boger,  Grinstead and Ryan to
serve  on  a  Strategic   Alternatives   Committee  to   investigate   strategic
alternatives  available  to the Company,  including  mergers,  acquisitions  and
technology licensing  opportunities.  The Strategic  Alternatives Committee held
two meetings during fiscal 1998.


Executive Officers

     The  executive  officers  of the  Company  as of October 2, 1998 are listed
below:

<TABLE>
<CAPTION>
                                                                                              Executive 
      Name                  Age                      Position                               Officer Since
      ----                  ---                      --------                               -------------
<S>                         <C>                                                                <C> 
Michael A. DeGiglio         44      President, Chief Executive Officer and Director            1993
J. Kevin Cobb               37      Senior Vice President - Corporate Development              1998
Harold A. Joannidi          47      Treasurer, Corporate Controller and Secretary              1995
David W. Miller             47      Senior Vice President and Chief Technology Officer         1988
David Suchniak              47      Senior Vice President and Chief Financial Officer          1998
Albert Vanzeyst             53      Executive Vice President and Director                      1998
</TABLE>


     Mr.  DeGiglio,  see  description  of Mr.  DeGiglio's  positions held in the
Company and other experience under his description as a Director.

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

     Mr. Joannidi joined the Company in 1995 as Corporate  Controller.  In March
1996, Mr.  Joannidi became  Treasurer and Secretary of the Company.  In 1992 and
from 1994 until joining the Company, Mr.


                                       54

<PAGE>


Joannidi also served as a financial and systems consultant to the Company. Prior
to joining  and in addition to being a  consultant  to the Company in 1992,  Mr.
Joannidi  operated  a  manufacturing  company  from  1992 to 1994,  served  as a
financial and systems  consultant to various  companies  from 1988 to 1992,  and
held financial management positions at Tel Plus International,  Inc./Siemens AG,
Johnson Matthey Jewelry  Corporation  and Refinemet  International  Company from
1980 to 1988. Mr. Joannidi  attained  Certified  Public  Accountant  designation
while  employed  at the  public  accounting  firm of Coopers & Lybrand  LLP.  He
attended Tufts University and Northeastern  University,  receiving a B.S. degree
in Accounting and Economics from Northeastern University.

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

     Mr. Suchniak joined the Company in September 1998, as Senior Vice President
and Chief Financial  Officer pursuant to certain covenants related to the Merger
between the Company and APD. Prior to joining the Company,  Mr.  Suchniak served
as Senior Vice  President  and Chief  Financial  Officer of APD since July 1998.
Prior to joining APD, Mr.  Suchniak served as Senior Vice President and CFO with
AMC  Corporation  from 1995 to 1998, and Vice  President/CFO  with Hanover Foods
Corporation from 1992 to 1995. Mr. Suchniak is a Certified Public Accountant.

     Mr.Vanzeyst,  see  description  of Mr.  Vanzeyst's  positions  held  in the
Company and other experience under his description as a Director.


                                       55

<PAGE>


Item 11.  Executive Compensation
--------------------------------------------------------------------------------

                             EXECUTIVE COMPENSATION

     The  following  table  provides  certain  summary   information   regarding
compensation  paid by the Company  during the fiscal  years ended June 30, 1998,
1997 and 1996 to the Company's Chief Executive  Officer and to each of the other
executive officers of the Company,  whose annual  compensation and bonus for the
fiscal  year ended June 30,  1998  exceeded  $100,000  (together  with the Chief
Executive Officer, the "Named Executive Officers").

                           SUMMARY COMPENSATION TABLE
                                                                                
<TABLE>
<CAPTION>
                                                                               
                                                                                                       Long Term         
                                                                                                  Compensation Awards    
                                                                                           --------------------------------
       Name and                                       Annual Compensation                  Restricted      Number of Shares
  Principal Position                          --------------------------------------         Stock            Underlying   
  ------------------                           Year          Salary           Bonus          Awards          Stock Options
                                              --------------------------------------         ------          -------------
<S>                                           <C>          <C>              <C>                <C>             <C>           
Michael A. DeGiglio (1)                       1998         $150,000         $ 25,000           --                   --
  President and Chief                         1997          140,000           25,000           --              100,000
  Executive Officer                           1996          123,391           25,000           --              200,000
                                                                                                           
Harold A. Joannidi                            1998          102,000            8,000           --                   --
  Treasurer and Secretary                     1997           93,500               --           --               50,000
                                              1996           72,000               --           --               35,000
                                                                                                           
David W. Miller                               1998          114,500            3,500           --                   --
  Senior Vice President and Chief             1997          106,167               --           --               55,000
    Technology Officer                        1996          108,250               --           --               50,000
</TABLE>
                                                                                
(1)  Mr.  DeGiglio  joined the Company in November 1992 as the President of Agro
     Dynamics,  Inc. and was appointed  President and Chief Executive Officer of
     the Company in July 1995.


     Compensation of Directors

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

     Each  non-employee  Director  when first  elected or appointed to the Board
receives a warrant to  purchase  20,000  shares of Common  Stock at an  exercise
price equal to the fair market value on the grant date.  These  warrants vest at
the rate of 20  percent on the grant  date and on the first  anniversary  of the
grant date and 30 percent  on the  second and third  anniversaries  of the grant
date.  Warrants  granted to Directors of the Company expire five years after the
date of grant.


                                       56

<PAGE>


                     OPTIONS GRANTS IN THE LAST FISCAL YEAR

During the fiscal year ended June 30, 1998,  there were no options granted under
the Company's 1991 Stock Option Plan to the Named Executive Officers.

     The following table provides certain information with respect to options to
purchase Common Stock held by the Named Executive Officers at June 30, 1998.

<TABLE>
<CAPTION>
                               AGGREGATE OPTION EXERCISES IN FISCAL YEAR 1998 AND
                                       1998 FISCAL YEAR END OPTION VALUES

 
                                                                  
                              Number of Securities Underlying          Value of Unexercised In the Money 
                          Unexercised Options at Fiscal Year End         Options at Fiscal Year End
                          --------------------------------------       ---------------------------------

      Name                  Exercisable          Unexercisable         Exercisable         Unexercisable
      ----                  -----------          -------------         -----------         -------------

<S>                           <C>                   <C>                 <C>                  <C>    
Michael A. DeGiglio           275,208               44,792              $62,598              $ 6,152
Harold A. Joannidi             74,583               10,417               14,219                   --
David W. Miller                87,500               17,500               25,938                   --
</TABLE>

     No options were  exercised by the Named  Executive  Officers in fiscal year
1998.


                                       57

<PAGE>


Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------------------------

                          SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information  regarding  beneficial ownership
of the  Common  Stock as of  October  2,  1998  by:  (i)  each  person  known to
EcoScience  to be the  beneficial  owner of more than 5% of the Common  Stock on
that date,  (ii) each  Director,  (iii)  each  executive  officer  listed in the
Summary  Compensation  Table above and (iv) all Directors and executive officers
as a group.

<TABLE>
<CAPTION>
                        SUMMARY SECURITY OWNERSHIP TABLE

                                                                         Shares Beneficially         Percentage of
Name and Address                                                            Owned (1) (2)            Total Shares
----------------                                                         -------------------         -------------        

<S>                                                                           <C>                         <C>  
Michael A. DeGiglio (3)..............................................         3,360,643                   28.8%

Albert Vanzeyst (4)..................................................         2,941,811                   25.3%

Thomas Montanti (5)..................................................         2,537,324                   21.8%


David J. Ryan (6)....................................................           172,586                    1.5%
Heinz K. Wehner (7)..................................................             8,000                    *
Harold A. Joannidi (8)...............................................            17,000                    *
David W. Miller (9)..................................................            25,772                    *


All Directors and executive officers as a group
      (9 persons) (10)...............................................         9,298,903                   79.2%
</TABLE>

----------

*Less than 1%.

(1)  Information with respect to beneficial  ownership is based upon information
     furnished to the Company by each stockholder included in this table. Except
     as indicated in the notes to the table,  each  stockholder  included in the
     table has sole voting and investment power with respect to the shares shown
     to be  beneficially  owned by him.  Pursuant to the rules of the Securities
     and  Exchange  Commission,  shares of Common Stock which an  individual  or
     member of a group has a right to acquire  within 60 days of October 2, 1998
     pursuant  to  the  exercise  of  options  or  warrants  are  deemed  to  be
     outstanding  for the purpose of computing the percentage  ownership of such
     individual or group,  but are not deemed to be outstanding  for the purpose
     of  computing  the  percentage  ownership  of any other person shown in the
     table.

(2)  Information  with respect to  beneficial  ownership  reflect a one for five
     reverse  stock split and the issuance of 9,520,487  shares of Common Stock,
     after giving effect to the reverse stock split; both actions were completed
     pursuant to the Merger between  EcoScience and APD, and both were effective
     on September 30, 1998.

(3)  Includes  166,593  shares  held by Mr.  DeGiglio's  wife,  as to which  Mr.
     DeGiglio disclaims beneficial  ownership,  518,900 shares held in trust for
     the benefit of Mr.  DeGeglio's  children that Mr.  DeGiglio has no right to
     vote and as to which he disclaims beneficial  ownership,  and 60,667 shares
     issuable  upon the exercise of stock  options.  Includes  3,287,011  shares
     issued pursuant to the Merger between EcoScience and APD.


                                       58

<PAGE>


(4)  Includes  153,095 shares held in custody for Mr.  Vanzeyst's child that Mr.
     Vanzeyst  has no right to vote  and as to  which  he  disclaims  beneficial
     ownership.  Includes 2,941,811 shares issued pursuant to the Merger between
     EcoScience and APD

(5)  Includes 4,231 shares held by Mr. Montanti's wife, as to which Mr. Montanti
     disclaims beneficial  ownership.  Includes 2,533,093 shares issued pursuant
     to the Merger between EcoScience and APD.

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

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

(8)  Includes  17,000  shares of Common Stock  issuable  upon  exercise of stock
     options.

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

(10) Includes an  aggregate  for 128,000  shares of Common Stock  issuable  upon
     exercise of stock options and warrants.  Share amount includes  151,253 and
     13,333 shares of Common Stock held and issuable upon exercise of a warrant,
     respectively,  by Copley Partners 2, L.P., for a total of 164,586 shares or
     1.4% of total shares of Common Stock  outstanding.  Copley Venture Partners
     L.P., a limited  partnership of which Mr. Ryan is a general  partner,  is a
     general partner of Copley Partners 2, L.P. Includes 8,997,682 shares issued
     pursuant to the Merger between EcoScience and APD.

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


Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
directors, executive officers and persons who are beneficial owners of more than
ten  percent  of the  Company's  Common  Stock to file with the  Securities  and
Exchange  Commission  (the  "Commission")  reports  of  their  ownership  of the
Company's  securities  and of  changes  in  that  ownership.  To  the  Company's
knowledge,  based on a review of copies of reports filed with the Commission and
written  representations  by certain reporting persons that no reports on Form 5
were  required  from those  persons,  all reports that were required to be filed
under Section 16(a) were timely filed.


Item 13. Certain Relationships and Related Transactions

     Certain Transactions

     Kenneth S. Boger,  a Director of the Company  until  September  1998,  is a
partner  in the law firm of  Warner  &  Stackpole  LLP,  which  performed  legal
services  for the Company  during  fiscal  1998 and is expected to perform  such
services in the current  fiscal year.  Legal fees paid to Warner & Stackpole LLP
in fiscal year 1998 totaled $120,000, net of disbursements.


                                       59

<PAGE>


     Prior to the  Merger,  Michael  A.  DeGiglio,  President,  Chief  Executive
Officer  and a director  of the  Company  owned  beneficially  (or may have been
deemed to own beneficially)  366,075 shares of Common Stock representing 3.4% of
the  outstanding  capital  stock of the  Company.  Mr.  DeGiglio  was also Chief
Executive  Officer  and a  Director  of APD;  he served as its  President  until
January, 1997. Prior to the Merger Mr. DeGiglio owned beneficially approximately
106 shares of the Common  Stock of APD,  representing  34.5% of the  outstanding
capital stock  thereof.  As of the effective date of the Merger and after giving
effect to the Reverse Split, Mr. DeGiglio owns beneficially (or may be deemed to
own  beneficially)  approximately  3,360,643  shares of the Common  Stock of the
Company, representing 28.8% of the outstanding Common Stock of the Company.

     Prior to the Merger Albert Vanzeyst, a stockholder,  director and executive
officer of APD owned beneficially approximately 95 shares of the Common Stock of
APD,  representing  30.9% of the  outstanding  capital stock thereof.  As of the
effective date of the Merger,  and after giving effect to the Reverse Split, Mr.
Vanzeyst owns beneficially approximately 2,941,811 shares of the Common Stock of
the Company,  representing 25.3% of the outstanding Common Stock of the Company.
Also as of the effective date of the Merger,  Mr. Vanzeyst became a director and
Executive Vice President of the Company.

     Prior to the Merger, Thomas Montanti, a stockholder,  director and Chairman
of the Board of APD owned  beneficially  approximately  82 shares of the  Common
Stock of APD, representing 26.5% of the outstanding capital stock thereof. As of
the effective date of the Merger,  and giving effect to the Reverse  Split,  Mr.
Montanti owns beneficially approximately 2,537,324 shares of the Common Stock of
the Company,  representing 21.8% of the outstanding Common Stock of the Company.
Also as of the effective date of the Merger,  Mr.  Montanti became a director of
the Company.

     Prior to the Merger, J. Kevin Cobb, a stockholder and Senior Vice President
Corporate  Development  of APD owned  beneficially  7 7/10  shares of the Common
Stock of APD,  representing 2.5% of the outstanding capital stock thereof. As of
the effective date of the Merger,  and after giving effect to the Reverse Split,
Mr. Cobb owns beneficially  approximately  235,767 shares of the Common Stock of
the Company,  representing 2.0% of the outstanding  Common Stock of the Company.
Also as of the  effective  date of the  Merger,  Mr.  Cobb  became  Senior  Vice
President - Corporate Development of the Company.

     The Company sold  products to APD, its largest  customer,  in the amount of
$5,012,000  or 22% of  products  sales for fiscal  year ended June  30,1998  and
$2,954,000 or 14% of products sales for the fiscal year ended June 30, 1997. The
Company  primarily  sold the  following  products to APD during the fiscal years
ended June 30, 1998 and1997:

     1)   Fixed assets - Sorting,  Grading and Packing  systems,  ISYS  systems,
          cart systems and a water transport system.

     2)   Growing  systems based on Grodania  A/S's  Stonewool(R)  inert growing
          medium and seed.

     3)   Multiple greenhouse consumable products, including clips, hooks, twine
          and covering material.


                                       60

<PAGE>


     Product  purchases by APD frequently  occur under standard  purchase orders
issued for each  shipment;  certain  larger  dollar  purchases  of  systems  and
equipment may occur under individual  contract.  Material contracts and purchase
orders between APD and the Company fall into the following categories:

     Irrigation  Systems  Contracts:  Seven  contracts  provide for  delivery of
irrigation systems to the Buffalo,  Fort Davis,  Marfa,  Virginia and Wheatfield
facilities.  Aggregate  consideration  is  approximately  $1,800,000.  Terms  of
payment  generally  provide for a deposit upon signing of the sales contract and
additional installment payments upon completion of certain specified milestones.
Several of the  contracts  also  provide for  training of  personnel on computer
systems related to the irrigation systems.

     Sorting,  Grading & Packing Systems Purchase  Orders:  Five purchase orders
provide for delivery of Sorting,  Grading & Packing systems to the Buffalo, Fort
Davis,  Keystone,  Marfa and Virginia facilities for aggregate  consideration of
approximately $1,500,000. The purchase orders specify payment of a deposit prior
to shipping and additional installment payments upon delivery, installation, and
other specified milestones.

     The Company and APD share certain  facilities and other costs for which the
Company charged APD $42,000 and $39,000 for the fiscal years ended June 30, 1998
and  1997,  respectively.   The  shared  facilities  currently  consist  of  two
facilities the Company  leases in New Jersey.  APD is charged  occupancy  costs,
including   facility   lease,   utilities  and  other  costs,   based  on  their
proportionate  occupancy  and usage.  In  addition,  certain  employees  of each
company  perform shared  duties.  Each of the Company and APD  contributes  that
portion of each such employee's salary that reflects the proportionate amount of
work done for that entity.

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


                                       61

<PAGE>


                                     Part IV
================================================================================

Item 14. Exhibits, Financial Statements and Reports on Form 8-K
     
(a)(1)    The following consolidated financial statements of the Company and its
          subsidiaries  for the years ended June 30,  1998,  1997 and 1996,  are
          included at the pages indicated below:


                                                                            Page

          Consolidated Balance Sheets.........................................27
                  As of June 30, 1998 and 1997

          Consolidated Statements of Operations...............................28
                  For the Years Ended June 30, 1998, 1997 and 1996

          Consolidated Statements of Changes in Stockholders' Investment......29
                  For the Years Ended June 30, 1998, 1997 and 1996

          Consolidated Statements of Cash Flows...............................30
                  For the Years Ended June 30, 1998, 1997 and 1996

          Notes to Consolidated Financial Statements..........................31

          Report of Independent Public Accountants............................50

(a)(2)    There are no consolidated financial statement schedules required to be
          presented herein:

          All other  schedules  for which  provision  is made in the  applicable
          accounting  regulations of the Securities and Exchange  Commission are
          not required under the related instructions or are not applicable, and
          therefore have been omitted.

(a)(3)    The  following  Exhibits  are  included in this Annual  Report on Form
          10-K:

Exhibit                                  Exhibit
Number                                  Description                             
-------   ----------------------------------------------------------------------

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

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


                                       62

<PAGE>


Exhibit                                Exhibit
Number                               Description
------    ----------------------------------------------------------------------

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

3.3       Certificate of Amendment of Restated  Certificate of  Incorporation of
          the Registrant dated September 28, 1998. [filed herewith].

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

4.2       Registration  Rights Agreement between EcoScience  Corporation and the
          Shareholders  identified  on Schedule I thereto  dated  September  30,
          1998. [filed herewith].

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

10.2*     Registrant's  1988 Stock  Option Plan  [incorporated  by  reference to
          Exhibit 10.2 to the Registrant's  Registration  Statement on Form S-1,
          Registration Statement No. 33-44664].

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

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

10.5      8%  Convertible   Preferred  Stock  Purchase   Agreement  between  the
          Registrant and the other parties named  therein,  dated June 29, 1988,
          amended and restated on December 6, 1989, and amended June 7, 1991 and
          July  30,  1991[incorporated  by  reference  to  Exhibit  10.5  to the
          Registrant's   Registration   Statement  on  Form  S-1,   Registration
          Statement No. 33-44664].

10.6      Preferred  Stock  Purchase  Agreement  between the  Registrant and the
          other parties  named  therein,  dated June 7, 1991,  and amended as of
          July 30,  1991  [incorporated  by  reference  to  Exhibit  10.6 to the
          Registrant's   Registration   Statement  on  Form  S-1,   Registration
          Statement No. 33-44664].

*    Indicates  a  management  contract  or  compensatory  plan  or  arrangement
     required to be filed pursuant to Item 14(c) of Form 10-K.


                                       63

<PAGE>



Exhibit                                Exhibit
Number                               Description
-------   ----------------------------------------------------------------------

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

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

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

10.14     Letter  Agreement  between the Registrant and Dr. and Mrs. Meir Broza,
          dated November 4, 1991  [incorporated by reference to Exhibit 10.19 to
          the  Registrant's  Registration  Statement  on Form S-1,  Registration
          Statement No. 33-44664].

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

10.16     Option to Purchase  Common Stock between the  Registrant  and Dr. Meir
          Broza,  dated November 4, 1991  [incorporated  by reference to Exhibit
          10.21  to  the  Registrant's   Registration  Statement  on  Form  S-1,
          Registration Statement No. 33-44664].

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

10.21     Product  Development and License  Agreement between the Registrant and
          The Terminix  International  Company,  L.P., dated as of June 3, 1992,
          with certain confidential  material omitted [incorporated by reference
          to Exhibit  10.38 to the  Registrant's  Annual Report on Form 10-K for
          the fiscal year ended June 30, 1992].

10.22     Agreement  and Plan of  Reorganization  dated as of November 18, 1992,
          among the Registrant, Agro Dynamics, Inc., Eco Acquisition Corporation
          and the  Stockholders  named  therein  [incorporated  by  reference to
          Exhibit 4.1 to the  Registrant's  Registration  Statement on Form S-3,
          Registration Statement No. 33-58540].


                                       64

<PAGE>


Exhibit                                Exhibit
Number                               Description
-------   ----------------------------------------------------------------------

10.23     Sublicense Agreement between the Registrant, J.R. Brooks & Sons., Inc.
          and Seald-Sweet Growers, Inc., dated as of June 23, 1993, with certain
          confidential  material  omitted  [incorporated by reference to Exhibit
          10.34 to the  Registrant's  Annual  Report on Form 10-K for the fiscal
          year ended June 30, 1993].

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

10.25     Lease  between  the  Registrant  and  Worcester  Business  Development
          Corporation,  dated as of May 28, 1993  [incorporated  by reference to
          Exhibit 10.36 to the  Registrant's  Annual Report on Form 10-K for the
          fiscal year ended June 30, 1993].

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

10.28     Asset Purchase Agreement,  dated as of March 2, 1994, by and among the
          Registrant,  American Machinery  Corporation and Aeroglide Corporation
          [incorporated   by  reference  to  Exhibit  4.2  to  the  Registrant's
          Registration   Statement  on  Form  S-3,  Registration  Statement  No.
          33-83184].

10.29     Master  Equipment Lease Agreement,  dated as of June 7, 1994,  between
          the   Registrant  and  Financing  For  Science   International,   Inc.
          [incorporated by reference to Exhibit 10.34 to the Registrant's Annual
          Report on Form 10-K for the fiscal year ended June 30, 1994].

10.30     Loan  Agreement  dated  as of  October  28,  1994  by  and  among  the
          Registrant, Agro Dynamics, Inc., Agro Dynamics Canada Inc. and Silicon
          Valley  Bank  [incorporated  by  reference  to  Exhibit  10.35  to the
          Registrant's Annual Report on Form 10-K for the fiscal year ended June
          30, 1994].

10.31     Sublease   Agreement  dated  as  of  November  1,  1994,  between  the
          Registrant and Hybridon,  Inc.  [incorporated  by reference to Exhibit
          10.32 to the  Registrant's  Annual  Report  on Form  10-K/A-2  for the
          fiscal year ended June 30, 1995].

10.32     Marketing and Distribution  Agreement dated as of May 15, 1995 between
          Registrant and Rhone-Poulenc Agrichimie. [incorporated by reference to
          Exhibit 10.33 to the  Registrant's  Annual Report on Form 10-K/A-2 for
          the fiscal year ended June 30, 1995].

10.33     Distribution  Agreement  dated as of August 1, 1995, by and among Agro
          Dynamics, Inc., Aweta, BV and Autoline.  [incorporated by reference to
          Exhibit 10.34 to the  Registrant's  Annual Report on Form 10-K/A-2 for
          the fiscal year ended June 30, 1995].


                                       65

<PAGE>


Exhibit                                Exhibit
Number                               Description
------    ----------------------------------------------------------------------

10.34     Distributorship Agreement dated as of September 25, 1995, between Agro
          Dynamics,  Inc. and H.  Hoogendoorn  Automation B.V.  [incorporated by
          reference to Exhibit 10.35 to the  Registrant's  Annual Report on Form
          10-K/A-2 for the fiscal year ended June 30, 1995].

10.35     Partial Lease Termination  Agreement for  Massachusetts  Biotechnology
          Research  Park Space  dated as of  September  19,  1995,  between  the
          Registrant   and   Worcester   Business    Development    Corporation.
          [incorporated by reference to Exhibit 10.36 to the Registrant's Annual
          Report on Form 10-K/A-2 for the fiscal year ended June 30, 1995].

10.36     Lease  Termination  Agreement dated as of September 29, 1995,  between
          the  Registrant  and  Worcester  Business   Development   Corporation.
          [incorporated by reference to Exhibit 10.37 to the Registrant's Annual
          Report on Form 10-K/A-2 for the fiscal year ended June 30, 1995].

10.37     Amendment  of  Sublease  dated as of October  11,  1995,  between  the
          Registrant and Hybridon,  Inc.  [incorporated  by reference to Exhibit
          10.38 to the  Registrant's  Annual  Report  on Form  10-K/A-2  for the
          fiscal year ended June 30, 1995].

10.38     Loan Modification  Agreement dated as of October 5, 1995, by and among
          the  Registrant,  Agro Dynamics,  Inc., Agro Dynamics Canada Inc., and
          Silicon  Valley Bank.  [incorporated  by reference to Exhibit 10.39 to
          the  Registrant's  Annual  Report on Form 10-K/A-2 for the fiscal year
          ended June 30, 1995].

10.39     Agreement dated as of October 11, 1995 modifying the Master  Equipment
          Lease between the Registrant and Financing For Science  International,
          Inc.  [incorporated  by reference to Exhibit 10.40 to the Registrant's
          Annual  Report on Form  10-K/A-2  for the  fiscal  year ended June 30,
          1995].

10.40     Lease  Termination  Agreement dated as of January 11, 1996 between the
          Registrant   and   Worcester    Business    Development    Corporation
          [incorporated  by  reference  to  Exhibit  10.41  to the  Registrant's
          Current Report on Form 8-K dated January 16, 1996].

10.41     Debt Settlement  Agreement dated as of February 20, 1996, by and among
          the   Registrant,   EcoScience   Produce   Systems  Corp.,   Aeroglide
          Corporation  of Florida and  Aeroglide  Corporation  [incorporated  by
          reference to Exhibit 10.42 to the Registrant's  Current Report on Form
          8-K dated March 20, 1996].

10.42     Loan Modification Agreement dated as of July 5, 1996, by and among the
          Registrant,  Agro  Dynamics,  Inc.,  Agro  Dynamics  Canada Inc.,  and
          Silicon  Valley Bank  [Incorporated  by reference to Exhibit  10.42 to
          Registrant's Annual Report on Form 10-K for fiscal year ended June 30,
          1996].


                                       66

<PAGE>


Exhibit                                Exhibit
Number                               Description
------    ----------------------------------------------------------------------

10.43     Loan  Modification  Agreement  dated as of September  5, 1996,  by and
          among the Registrant,  Agro Dynamics, Inc., Agro Dynamics Canada Inc.,
          and Silicon Valley Bank [Incorporated by reference to Exhibit 10.43 to
          Registrant's Annual Report on Form 10-K for fiscal year ended June 30,
          1996].

10.44     Loan Modification  Agreement dated as of October 5, 1996, by and among
          the  Registrant,  Agro Dynamics,  Inc., Agro Dynamics Canada Inc., and
          Silicon  Valley Bank  [Incorporated  by reference to Exhibit  10.44 to
          Registrant's Annual Report on Form 10-K for fiscal year ended June 30,
          1996].

10.45     Private Placement  Memorandum dated September 20, 1996 for Offering of
          Registrant's  Common Stock [Incorporated by reference to Exhibit 10.45
          to Registrant's  Annual Report on Form 10-K for fiscal year ended June
          30, 1996].

10.47     Master  Equipment  Lease  Settlement  Agreement  dated as of August 8,
          1996, between the Registrant and Financing For Science  International,
          Inc.  [Incorporated  by  reference  to Exhibit  10.47 to  Registrant's
          Annual Report on Form 10-K for fiscal year ended June 30, 1996].

10.48     Common Stock Warrant between the Registrant and Aeroglide  Corporation
          [Incorporated  by reference to Exhibit  10.48 to  Registrant's  Annual
          Report on Form 10-K for fiscal year ended June 30, 1996].

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

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

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


                                       67

<PAGE>


Exhibit                                Exhibit
Number                               Description
------    ----------------------------------------------------------------------

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

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

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

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

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

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

10.58     Letter of  Intent to Merge  between  EcoScience  Corporation  and Agro
          Power  Development,  Inc.  dated November 20, 1997.  [incorporated  by
          reference to Exhibit 10.58 to the Registrant's Form 8-K dated November
          20, 1997].

10.59     Amendment to Loan Documents dated September 25, 1998, by and among the
          Registrant,  EcoScience  Produce Systems Corp.,  Agro Dynamics,  Inc.,
          Agro Dynamics Canada Inc. and Silicon Valley Bank. [ filed herewith].

20.1      Press Release dated  November 20, 1997,  announcing  the  Registrant's
          intent to merge with Agro Power  Development,  Inc.  [incorporated  by
          reference to Exhibit 20.1 to the Registrant's  Form 8-K dated November
          20, 1997].


                                       68

<PAGE>


Exhibit                                Exhibit
Number                               Description
------    ----------------------------------------------------------------------

20.2      Press Release dated April 29, 1998, announcing the Registrant and Agro
          Power  Development,   Inc.  signing  a  Definitive  Merger  Agreement.
          [incorporated  by reference to Exhibit 20.2 to the  Registrant's  Form
          8-K dated April 29, 1998].

21        Subsidiaries of the Registrant [filed herewith].

23        Consent of Arthur Andersen LLP [filed herewith].

24        Powers of Attorney of officers and directors of the Company  [included
          in the signature page filed on October 12, 1998].

27        Financial Data Schedule for the Fiscal Year Ended June 30, 1998 [filed
          herewith]


(b)       Reports on Form 8-K
          Report dated April 29, 1998, which  incorporated a press release dated
          April  29,  1998,  announcing  that  the  Registrant  and  Agro  Power
          Development, Inc. signed a Definitive Merger Agreement.


Note:     [None of the Exhibits  listed in the foregoing  index is included with
          this  Annual  Report on Form 10-K for the  fiscal  year ended June 30,
          1998.  A copy of these  Exhibits  may be  obtained  without  charge by
          writing to Harold A. Joannidi, EcoScience Corporation, 10 Alvin Court,
          East Brunswick, NJ 08816.]


                                       69

<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) 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 in the City of East
Brunswick, the State of New Jersey, on October 12, 1998.


                             ECOSCIENCE CORPORATION


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


                                POWER OF ATTORNEY

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears below on this report hereby constitutes and appoints Michael A. DeGiglio
and  Harold A.  Joannidi,  and each of them with full power to act  without  the
other,  his true and  lawful  attorney  in fact and  agent,  with full  power of
substitution  and  resubstitution,  for him and in his name, place and stead, in
any and all  capacities to sign any and all  amendments  to this report,  and to
file the same,  with all exhibits  hereto,  and other  documents  in  connection
herewith,  with the  Securities  and  Exchange  Commission,  granting  unto said
attorneys in fact and agents,  and each of them,  full power and authority to do
and perform each and every act and thing, ratifying and confirming all that said
attorneys  in fact  and  agents  or any of them or their  or his  substitute  or
substitutes, may lawfully do or cause to be done by virtue thereof.

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

Name                                    Title                        Date
----                                    -----                        ----

/s/ Michael A. DeGiglio        President, Chief Executive       October 12, 1998
-----------------------        Officer and Director
Michael A. DeGiglio            


/s/ Harold A. Joannidi         Treasurer, Secretary and         October 12, 1998
-----------------------        Corporate Controller 
Harold A. Joannidi


/s/ Thomas Montanti            Director                         October 12, 1998
----------------------- 
Thomas Montanti


                                       70

<PAGE>

Name                                  Title                           Date
----                                  -----                           ----

/s/ David J. Ryan              Chairman of the Board            October 12, 1998
----------------------- 
David J. Ryan


/s/ Albert Vanzeyst            Executive Vice President and     October 12, 1998
-----------------------        Director 
Albert Vanzeyst


/s/ Heinz K. Wehner            Director                         October 12, 1998
----------------------- 
Heinz K. Wehner


                                       71

<PAGE>


                             ECOSCIENCE CORPORATION

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

Exhibit Number                     Description of Exhibit                           Page Number
--------------                     ----------------------                           -----------

<S>       <C>                                                                           <C>
3.3       Certificate of Amendment of Restated  Certificate of  Incorporation of        73 
               the Registrant dated September 28, 1998.

4.2       Registration Rights Agreement between  EcoScience  Corporation and the        75
               Shareholders identified on Schedule I thereto dated September 30,
               1998.

10.59     Amendment to Loan Documents dated September 25, 1998, by and among the        89 
               Registrant,  EcoScience  Produce  Systems  Corp.,  Agro Dynamics,
               Inc., Agro Dynamics Canada Inc. and Silicon Valley Bank.


21        Subsidiaries of the Registrant as of June 30, 1998                            93

23        Consent of Independent Public Accountants                                     94

27        Financial Data Schedule as of and for the Year 95 Ended June 30, 1998         95
</TABLE>


                                       72

<PAGE>


                             ECOSCIENCE CORPORATION

                                   EXHIBIT 3.3

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

                            CERTIFICATE OF AMENDMENT
                                       OF
                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                             ECOSCIENCE CORPORATION


     EcoScience  Corporation,  a corporation organized and existing under and by
virtue  of  the  General   Corporation   Law  of  the  State  of  Delaware  (the
"Corporation"), DOES HEREBY CERTIFY:

     FIRST:  That, at Special  Meetings of the Board of Directors held on May 4,
1998  and  May  11,  1998,  resolutions  proposing  amendments  to the  Restated
Certificate  of  Incorporation,   as  amended  as  of  the  date  hereof,   (the
"Certificate") of the Corporation  approving a one-for-five reverse split of the
Corporation's  Common  Stock,  $.01 par  value,  and  increasing  the  number of
authorized  shares of  capital  stock,  were duly  adopted  and  declared  to be
advisable.

     SECOND: That, in accordance with Section 228 of the General Corporation Law
of  the  State  of  Delaware,  the  holders  of a  majority  of the  issued  and
outstanding capital stock of the Corporation  required to amend said Certificate
voted at a  Special  Meeting  of the  Stockholders  of the  Corporation  held on
September 10, 1998, to approve such  amendments.  The resolutions  setting forth
the amendment are as follows:

RESOLVED:      That, upon the  filing of a  Certificate  of  Amendment  with the
               Office of the Secretary of State, State of Delaware (a) each five
               (5) shares of the Corporation's outstanding common stock shall be
               combined  into one (1) share of common  stock,  (b) cash shall be
               paid in lieu of fractional  shares to holders of common stock who
               would otherwise be entitled to receive fractional shares, and (c)
               the par value per share shall remain at $.01.

FURTHER
RESOLVED:      That  Section 4.1 of Article IV of the  Restated  Certificate  of
               Incorporation  of the  Corporation  is  amended to provide in its
               entirety as follows:


               "Section 4.1.  Total Number of Shares of Stock.  The total number
               of shares of all classes of stock which the  Corporation  has the
               authority  to  issue is One  Hundred  Ten  Million  (110,000,000)
               shares  consisting of One Hundred Million shares of common stock,
               $.01 par value per share (the


                                       73

<PAGE>


               "Common Stock"), and Ten Million (10,000,000) shares of preferred
               stock, $.01 par value per share (the"Preferred Stock")."

     FOURTH:  That said  amendments  were duly  adopted in  accordance  with the
provisions  of  Section  242 of the  General  Corporation  Law of the  State  of
Delaware.

     IN WITNESS  WHEREOF,  said EcoScience  Corporation has caused its corporate
seal to be  hereunto  affixed  and this  certificate  to be signed by Michael A.
DeGiglio, its President and Harold A. Joannidi, its Secretary,  this 28th day of
September, 1998.

                             ECOSCIENCE CORPORATION



[SEAL]
                                             By:  /s/ Michael A. DeGiglio       
                                                  ------------------------------
                                                  Michael A. DeGiglio, President



                                                  /s/ Harold A. Joannidi        
                                                  ------------------------------
                                                  Harold A. Joannidi, Secretary


                                       74

<PAGE>


                             ECOSCIENCE CORPORATION

                                   EXHIBIT 4.2

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

                          REGISTRATION RIGHTS AGREEMENT

     This Registration  Rights Agreement (the "Agreement") made and entered into
as of  September  30,  1998 by and  among  EcoScience  Corporation,  a  Delaware
corporation  (the  "Company"),  and the  shareholders  identified  on Schedule I
hereto (each a "shareholder" and collectively, the "Stockholders").

     WHEREAS,  pursuant to the Amended and Restated Agreement and Plan of Merger
dated as of July 31, 1998, the Company  issued an aggregate of 8,063,578  shares
of its common stock,  $.01 par value (the "Common  Stock") to the  Stockholders;
and

     WHEREAS,  the parties hereto wish to set forth their agreement with respect
to certain  matters  relating to the  registration of the Common Stock issued to
the Shareholders under federal and state securities laws;

     NOW,  THEREFORE,  in consideration of the mutual promises contained herein,
the parties hereto hereby agree as follows:

1.   Certain  Definitions.  As used herein,  the following  terms shall have the
     following respective meanings:

     (a)  "Commission" shall mean the Securities and Exchange Commission, or any
          other federal agency at the time administering the Securities Act.

     (b)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
          amended,  and the rules and regulations of the Commission  thereunder,
          all as the same shall be in effect at the time.

     (c)  "Person"  means  an  individual,  partnership,  corporation,  business
          trust, joint stock company, trust, unincorporated  association,  joint
          venture, governmental authority or other entity, of whatever nature.


     (d)  "Registrable  Securities" shall mean the shares of Common Stock issued
          to the  Shareholders  pursuant  to  the  Merger  Agreement;  provided,
          however,  that  Registrable  Securities  shall cease to be Registrable
          Securities  upon any sale pursuant to a registration  statement  under
          the  Securities  Act or upon any sale to the public under Rule 144, or
          any successor rule, promulgated by the Commission under the Securities
          Act.

     (e)  "Registration  Expenses"  shall  mean the  expenses  so  described  in
          Section 7 hereof.


                                       75

<PAGE>

     (f)  "Securities  Act" shall mean the  Securities  Act of 1933, as amended,
          and the rules and regulations of the Commission thereunder, all as the
          same shall be in effect at the time.

     (g)  "Selling  Expenses"  shall mean the expenses so described in Section 7
          hereof.

2.   Restricted Legend.  Each certificate  representing  Registrable  Securities
     and, except for certificates  evidencing  Registrable Securities which have
     been  sold  pursuant  to an  effective  registration  statement  under  the
     Securities Act or which may be publicly sold under Rule 144(k)  promulgated
     under  the  Securities  Act,  each  certificate   representing  Registrable
     Securities  issued upon a subsequent  exchange or transfer thereof shall be
     stamped or otherwise imprinted with a legend substantially in the following
     form:

          "THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER ANY STATE SECURITIES
          LAWS OR THE  SECURITIES  ACT OF 1933.  THEY MAY NOT BE  TRANSFERRED OR
          OTHERWISE  DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT
          OR  ANY  APPLICABLE   STATE  SECURITIES  LAWS  OR  AN  EXEMPTION  FROM
          REGISTRATION  IS AVAILABLE.  THESE  SECURITIES ARE ALSO SUBJECT TO THE
          TERMS  AND  PROVISIONS  SET  FORTH IN A  CERTAIN  REGISTRATION  RIGHTS
          AGREEMENT  DATED  SEPTEMBER 30, 1998, A COPY OF WHICH IS AVAILABLE FOR
          INSPECTION AT THE OFFICES OF ECOSCIENCE CORPORATION.

3.   Requested Registration on Form S-3.

     (a)  Request for  Registration.  If the Company  shall receive from holders
          who in the  aggregate  hold not less than twenty  percent (20%) of the
          Registrable  Securities then outstanding (the "Requesting  Holders") a
          written request that the Company effect  registration on Form S-3 with
          respect to all or a part of the  Registrable  Securities,  the Company
          will:

          (i)  promptly give written notice of the requested registration to all
               other holders of the Registrable Securities; and


          (ii) as soon as  practicable,  use its diligent best efforts to effect
               such registration (including,  without limitation,  the execution
               of an undertaking to file post-effective amendments,  appropriate
               qualification   under  a  reasonable   number  of  jurisdictions'
               applicable   blue  sky  or  other  state   securities   laws  and
               appropriate  compliance with applicable  regulations issued under
               the Securities Act) of (a) the Registrable  Securities  which the
               Company has been so registered to include in such registration by
               the Requesting  Holders and (b) all other Registrable  Securities
               which the Company has been requested


                                       76

<PAGE>


               to include in the  registration  by the holders thereof within 15
               days after the giving of such written notice by the Company,  and
               as would permit or facilitate the sale and distribution of all or
               such portion of such  Registrable  Securities as are specified in
               such  requests;  provided that the Company shall not be obligated
               to effect, or to take any action to effect, any such registration
               pursuant to this Section 3:


     (A)  On more than three occasions;  provided,  however, that if the holders
          of  Registrable  Securities  are unable to complete the sale of 75% or
          more of the  Registrable  Securities for which  registration  has been
          requested in an underwritten offering then such requested registration
          shall be deemed not to have been effected.


     (B)  If the Company does not qualify for use of Form S-3 (or any  successor
          to such form); provided, however, that at all times during the term of
          this Agreement,  the Company shall use its best efforts to qualify for
          the use of Form S-3 (or any successor to such form).


     (C)  If the Company,  within ten (10) days of the receipt of the request of
          the  Requesting  Holders,  gives notice of its bona fide  intention to
          effect  the filing of a  registration  statement  with the  Commission
          within  ninety (90) days of receipt of such  request  (other than with
          respect  to  a   registration   statement   relating  to  a  Rule  145
          transaction, an offering solely to employees or any other registration
          which  is  not  appropriate   for  the   registration  of  Registrable
          Securities).


     (D)  During the period starting with the date thirty (30) days prior to the
          Company's  estimated  date of filing  of, and ending on the date three
          (3)  months   immediately   following  the  effective   date  of,  any
          registration  statement  pertaining  to an  underwritten  offering  of
          securities by the Company (other than a registration  of securities in
          a Rule 145  transaction or with respect to an employee  benefit plan),
          provided  that the  Company is  actively  employing  in good faith all
          reasonable  efforts to cause  such  registration  statement  to become
          effective.


     (E)  If the Company shall furnish to the  Requesting  Holders a certificate
          signed by the President of the Company  stating that in the good faith
          judgment  of the Board of  Directors,  the  filing  of a  registration
          statement  by the  Company  in the  near  future  would  substantially
          interfere with a significant  transaction in which the Company is then
          presently engaged or in which the Company proposes to engage, then the


                                       77

<PAGE>


          Company's  obligation  to use its best efforts to file a  registration
          statement  shall be deferred  for a period not to exceed 120 days from
          the  receipt  of  the  request  to  file  such  registration  by  such
          Requesting  Holder  or  Holders,  provided  that the  Company  may not
          exercise this deferral right more than once per twelve month period.


     (F)  With respect to Registrable Securities as to which registration rights
          have not yet become available, as set forth in Section 10 hereof.


     Subject to the foregoing  clauses (A) through (F), the Company shall file a
     registration  statement on Form S-3 covering the Registrable  Securities so
     requested to be  registered  as soon as  practicable  after  receipt of the
     request.


(b)  Underwriting.   If  the   Requesting   Holders  intend  to  distribute  the
     Registrable  Securities covered by its request by means of an underwriting,
     they shall so advise the Company as a part of the request made  pursuant to
     Section 3. In the case of an underwritten  offering to which this Section 3
     shall apply, no securities  other than the Registrable  Securities shall be
     included among the securities  covered by such registration  unless (i) the
     managing  underwriter  of such  offering  shall have advised the Company in
     writing that the  inclusion of such other  securities  would not  adversely
     affect  such  offering  or  (ii)  the  holders  of  more  than  50%  of the
     Registrable Securities for which registration has been requested shall have
     consented in writing to the inclusion of such other securities. The Company
     shall  enter into an  underwriting  agreement  in  customary  form with the
     representative  of  the  underwriter  or  underwriters  selected  for  such
     underwriting by the Registrable Holder.


(c)  Priority in Demand  Registration.  If (i) a  registration  pursuant to this
     Section 3 involves  an  underwritten  offering of the  securities  so being
     registered,  (ii) the managing underwriter(s) of such underwritten offering
     shall  advise the  Requesting  Holders  and/or  the  Company  that,  in its
     opinion,  the number of shares of Common  Stock  proposed to be sold in (or
     during the time of) such  offering  would  adversely  affect the success of
     such offering,  then there shall be included in such registration only such
     number of shares of Common Stock  recommended by such managing  underwriter
     and (iii)  the  number of shares  so  included  shall be  allocated  to the
     holders of Registrable Securities requesting registration in proportion, as
     nearly  as  practicable,  to the total  number  of  shares  of  Registrable
     Securities  held  by  such  holders  at  the  time  of  the  filing  of the
     registration statement.

4.   Incidental Registration.

(a)  Request for  Registration.  If the Company at any time proposes to register
     any of its securities  under the  Securities Act for sale,  whether for its
     own account or for the account of other  security  holders or both  (except
     with


                                       78

<PAGE>

     respect  to (x)  registration  statements  on Form S-8 or Form S-4 or their
     then  equivalent  forms,  or another form not available for registering the
     Registrable  Securities for sale to the public, (y) a registration relating
     solely to employee benefit plans, or (z) a registration  relating solely to
     a Rule 145  transaction),  it will each such time: (i) promptly give to the
     holders  of the  Registrable  Securities  (hereinafter  "holders")  written
     notice  thereof (which shall include a list of the  jurisdictions  in which
     the  Company  intends  to  attempt to  qualify  such  securities  under the
     applicable blue sky or other state  securities  laws);  and (ii) include in
     such  registration  (and any related  qualification  under blue sky laws or
     other  compliance),  and in any  underwriting  involved  therein,  all  the
     Registrable  Securities  specified  in a written  request  made by a holder
     within  fifteen  (15) days after  receipt of the  written  notice  from the
     Company  described  in clause (i) above,  except  that the number of shares
     included  in  such  registration  on  behalf  of a  holder  of  Registrable
     Securities, if any, shall be subject to the provisions set forth in Section
     4(c) below.  Such  written  request may specify all or a part of a holder's
     Registrable Securities.


     The  Company  shall not be  obligated  to effect,  or to take any action to
     effect, any registration of Registrable Securities as to which registration
     rights have not yet become available, as set forth in Section 10 hereof.


(b)  Underwritten  Offerings.  If the  registration  of which the Company  gives
     notice is for an underwritten  offering of Common Stock,  the Company shall
     so advise the holders as a part of the  written  notice  given  pursuant to
     Section  4(a).  In such event,  the right of such  holders to  registration
     pursuant to Section  4(a) above  shall be  conditioned  upon such  holders'
     participation  in such  underwriting.  Each holder shall, if it proposes to
     distribute Registrable Securities through such underwriting, (together with
     the  Company  and  other  parties  distributing   securities  through  such
     underwriting)  enter into an underwriting  agreement in customary form with
     the managing underwriter(s) selected by the Company.


(c)  Priority in Incidental  Registrations.  If (i) a  registration  pursuant to
     this Section 4 involves an underwritten offering of the securities so being
     registered,  whether or not for sale for the  account of the  Company,  and
     (ii) the managing  underwriters of such underwritten  offering shall advise
     the Company in writing that, in its opinion, the number of shares of Common
     Stock (including Registrable  Securities) proposed to be sold in (or during
     the time of) such  offering  would  adversely  affect  the  success of such
     offering,  then the Company  shall include in such  registration  only such
     number  of  shares  of  Common  Stock  (including  Registrable  Securities)
     recommended by such managing  underwriter,  selected in the following order
     or priority:  (i) first, all of the shares of Common Stock that the Company
     proposes  to sell  for its  own  account,  if any,  and  (ii)  second,  the
     Registrable Securities requested to be included in such registration by the
     holders of Registrable Securities (in proportion, as nearly as practicable,
     to the  total  number  of shares  of  Registrable  Securities  held by such
     holders at the time of the filing


                                       79

<PAGE>

     of the registration statement);  provided,  however, that (x) if any equity
     securities  are proposed to be included in such offering for the account of
     any person or persons  other than the Company  pursuant to rights to demand
     registration  the amount of Registrable  Securities to be included  therein
     shall be pro rata with all other equity  securities  that have requested to
     be included by the holder of such demand registration rights and (y) if any
     equity  securities  are  proposed to be included in such  offering  for the
     account of any person or persons other than the Company  pursuant to rights
     of incidental registration similar to those provided in this Section 4, all
     Registrable  Securities to be included  therein shall be included  prior to
     the  inclusion  of  any  other  registrable  equity  securities  that  have
     requested to be included.


5.   Grant of  Additional  Rights.  The Company may grant  subsequent  investors
     rights of  registration  upon request (such as those provided in Section 3)
     and rights of incidental registration (such as those provided in Section 4)
     provided that (i) such rights are not inconsistent  with the rights granted
     pursuant to this  Agreement,  and (ii) the instrument  granting such rights
     specifically  confirms  the  rights  of  the  holders  of  the  Registrable
     Securities.

6.   Registration  Procedures.  In the case of each registration effected by the
     Company pursuant to Section 3 or 4, the Company will:


     (a)  keep such  registration  effective for a period of two hundred seventy
          (270)  days or until  the  sellers  have  completed  the  distribution
          described in the registration  statement  relating thereto,  whichever
          first occurs;


     (b)  Prepare and file with the Commission  such  amendments and supplements
          to such  registration  statement and the prospectus used in connection
          with such  registration  statement  as may be necessary to comply with
          the provisions of the  Securities Act with respect to the  disposition
          of all securities covered by such registration statement;


     (c)  furnish to each holder of  Registrable  Securities  whose  shares have
          been  included  in the  registration  (each  a  "seller")  and to each
          underwriter  such number of copies of the  registration  statement and
          the  prospectus   included   therein   (including   each   preliminary
          prospectus),  as such  persons  may  reasonably  request  in  order to
          facilitate  the public  sale or other  disposition  of the  securities
          covered by such registration statement;


     (d)  use its best efforts to register or qualify the Registrable Securities
          covered by such  registration  statement  under the securities or blue
          sky laws of such  jurisdictions  as the  sellers or, in the case of an
          underwritten  public  offering,  the  managing  underwriter(s),  shall
          reasonably request provided,  however,  that the Company shall not for
          any such purpose be required to qualify generally to transact business
          as a  foreign  corporation  in  any  jurisdiction  where  it is not so
          qualified,  to amend its  by-laws or to consent to general  service of
          process in any such jurisdiction;


                                       80

<PAGE>


     (e)  immediately notify each seller and each underwriter at any time when a
          prospectus  relating  thereto is  required to be  delivered  under the
          Securities Act, of the happening of any event as a result of which the
          prospectus  contained  in  such  registration  statement,  as  then in
          effect,  includes an untrue  statement of a material  fact or omits to
          state any material fact required to be stated  therein or necessary to
          make  the  statements  therein  not  misleading  in the  light  of the
          circumstances  then  existing,  and at  the  request  of the  sellers,
          prepare and furnish to the sellers a reasonable  number of copies of a
          supplement  to or amendment of such  prospectus as may be necessary so
          that, as thereafter  delivered to the purchasers of such shares,  such
          prospectus shall not include an untrue statement of a material fact or
          omit to  state a  material  fact  required  to be  stated  therein  or
          necessary to make the statements  therein not misleading or incomplete
          in the light of the circumstances then existing;


     (f)  cause all such Registrable  Securities to be listed on each securities
          exchange on which  similar  securities  issued by the Company are then
          listed;


     (g)  make   available   for   inspection   by  sellers,   any   underwriter
          participating  in  any  disposition   pursuant  to  such  registration
          statement, and any attorney, accountant or other agent retained by any
          such seller or any such underwriter,  all financial and other records,
          pertinent corporate documents and properties of the Company, and cause
          the  Company's  officers,   directors  and  employees  to  supply  all
          information  reasonably requested by sellers,  underwriter,  attorney,
          accountant or agent in connection with such registration statement;


     (h)  furnish to sellers a signed counterpart,  addressed to sellers, of (i)
          an opinion of counsel for the Company, dated the effective date of the
          registration  statement,  and (ii)  "comfort"  letters  signed  by the
          Company's   independent  public  accountants  who  have  examined  and
          reported  on  the  Company's  financial  statements  included  in  the
          registration  statement,  to the extent  permitted by the standards of
          the AICPA;


     (i)  furnish  to  sellers  a copy  of all  documents  filed  with  and  all
          correspondence  from or to the Commission in connection  with any such
          offering;


     (j)  otherwise use its best efforts to comply with all applicable rules and
          regulations  of the  Commission,  and make  available  to its security
          holders,  as soon as  reasonably  practicable,  an earnings  statement
          covering  the  period  of at least  twelve  months,  but not more than
          eighteen  months,  beginning  with the first month after the effective
          date of the  registration  statement,  which earnings  statement shall
          satisfy the provisions of Section 11(a) of the Securities Act; and


     (k)  in  connection   with  any   underwritten   offering   pursuant  to  a
          registration statement filed pursuant to Section 3 hereof, the Company
          will enter into any  underwriting  agreement  reasonably  necessary to
          effect the offer and sale of Common Stock,  provided such underwriting
          agreement contains customary


                                       81

<PAGE>


          underwriting provisions including, without limitation, such provisions
          regarding  opinions  of  counsel  for the  Company  as are  reasonably
          satisfactory  to  such  counsel  and  provided  further  that  if  the
          underwriter  so  requests  the  underwriting  agreement  will  contain
          customary contribution provisions.


7.   Expenses.  All expenses incurred by the Company in complying with Section 4
     and 5 hereof,  including  without  limitation all  registration  and filing
     fees, printing expenses,  fees and disbursements of counsel for the Company
     and  independent  public  accountants  for the  Company,  blue sky fees and
     expenses,  fees of the National  Association of Securities  Dealers,  Inc.,
     reasonable fees and  disbursements of one (1) counsel to sellers,  fees and
     expenses of  transfer  agents and  registrars,  but  excluding  any Selling
     Expenses  (as  hereinafter   defined),   are  herein  called  "Registration
     Expenses".  All underwriting  discounts and selling commissions and expense
     allowances payable to an underwriter  applicable to the sale of Registrable
     Securities are herein called "Selling  Expenses".  The Company will pay all
     Registration  Expenses  in  connection  with  each  registration  statement
     pursuant to Section 4 hereof.  All Selling  Expenses in connection with any
     registration  statement  filed  pursuant  to  Section 3 or Section 4 hereof
     shall be borne by the  sellers  (pro  rata,  based on the  number of shares
     included in the registration for the account of the sellers).

8.   Indemnification.

     (a)  The  Company  will   indemnify  each  seller  with  respect  to  which
          registration,  qualification or compliance has been effected  pursuant
          to this Agreement,  and each underwriter,  if any, and each Person who
          controls  any  underwriter,  against all claims,  losses,  damages and
          liabilities  (or  actions,   proceedings  or  settlements  in  respect
          thereof)  arising out of or based on any untrue  statement (or alleged
          untrue  statement)  of a material  fact  contained in any  prospectus,
          offering   circular   or  other   document   (including   any  related
          registration statement, notification or the like) incident to any such
          registration,  qualification  or compliance,  or based on any omission
          (or alleged  omission) to state therein a material fact required to be
          stated  therein  or  necessary  to make  the  statements  therein  not
          misleading,  or any violation by the Company of the  Securities Act or
          the Exchange Act or any rule or  regulation  thereunder  applicable to
          the Company and relating to action or inaction required of the Company
          in connection with any such registration, qualification or compliance,
          and will  reimburse  each seller for any legal and any other  expenses
          reasonably  incurred in connection with investigating and defending or
          settling any such claim, loss, damage,  liability or action,  provided
          that the  Company  will not be liable  in any such case to the  extent
          that any such claim, loss, damage,  liability or expense arises out of
          or is based on any untrue  statement  or omission  based upon  written
          information  furnished to the Company by a seller or  underwriter  and
          stated to be specifically for use therein.


                                       82

<PAGE>


     (b)  Each seller will, if Registrable Securities held by it are included in
          the  securities  as  to  which  such  registration,  qualification  or
          compliance  is being  effected,  indemnify  the  Company,  each of its
          directors, officers and employees and each underwriter, if any, of the
          Company's  securities  covered by such a registration  statement,  and
          each Person who controls the Company or such underwriter,  against all
          claims,  losses,  damages  and  liabilities  (or  actions  in  respect
          thereof)  arising out of or based on any untrue  statement (or alleged
          untrue   statement)  of  a  material   fact   contained  in  any  such
          registration  statement,   prospectus,   offering  circular  or  other
          document,  or any  omission (or alleged  omission) to state  therein a
          material fact  required to be stated  therein or necessary to make the
          statements  therein not  misleading or any violation by such seller of
          the  Securities  Act or the  Exchange  Act or any  rule or  regulation
          thereunder  applicable  to such  seller  and  relating  to  action  in
          inaction required of seller in connection with any such  registration,
          qualification or compliance,  and will reimburse the Company,  each of
          its officers,  directors and  employees,  and each Person who controls
          the Company,  each such  underwriter  and each Person who controls any
          such  underwriter  for any  legal  or any  other  expenses  reasonably
          incurred in  connection  with  investigating  and defending or setting
          such claim,  loss,  damage,  liability or action,  in each case to the
          extent, but only to the extent, that such untrue statement (or alleged
          untrue  statement)  or omission (or alleged  omission) is made in such
          registration  statement,   prospectus,   offering  circular  or  other
          document in reliance upon and in conformity  with written  information
          furnished to the Company by such seller and stated to be  specifically
          for use therein;  provided,  however,  that the  obligations of seller
          hereunder  shall be  limited  to an amount  equal to the  proceeds  to
          seller of securities sold as contemplated herein.


     (c)  Each party  entitled  to  indemnification  under  this  Section 8 (the
          "Indemnified  Party")  shall  give  notice  to the party  required  to
          provide indemnification (the "Indemnifying Party") promptly after such
          Indemnified  Party has actual  knowledge of any such claim as to which
          indemnity may be sought,  and shall permit the  Indemnifying  Party to
          assume  the  defense  of any such  claim or any  litigation  resulting
          therefrom, provided that counsel for the Indemnifying Party, who shall
          conduct  the  defense  of  such  claim  or  any  litigation  resulting
          therefrom,  shall be approved by the Indemnified Party (whose approval
          shall not  unreasonably be withheld),  and the  Indemnified  Party may
          participate  in such  defense at such  party's  expense,  and provided
          further  that the failure of any  Indemnified  Party to give notice as
          provided  herein  shall  not  relieve  the  Indemnifying  Party of its
          obligations  under this Section 8 provided  that such failure does not
          prejudice  the  Indemnifying  Party.  No  Indemnifying  Party,  in the
          defense  of any  such  claim or  litigation,  shall,  except  with the
          consent of each Indemnified Party, consent to entry of any judgment or
          enter into any settlement  which does not include as an  unconditional
          term  thereof  the  giving  by  the  claimant  or  plaintiff  to  such
          Indemnified  Party of a release from all  liability in respect to such
          claim  or  litigation.  Each  Indemnified  Party  shall  furnish  such
          information regarding itself or the claim in question as an


                                       83

<PAGE>


          Indemnifying  Party may  require in  connection  with  defense of such
          claim and litigation resulting therefrom.

     (d)  Contribution.  If  recovery  is  not  available  under  the  foregoing
          indemnification  provisions of Section 8, for any reason other than as
          specified  therein,  the parties  entitled to  indemnification  by the
          terms thereof shall be entitled to  contribution  to  liabilities  and
          expenses.  In  determining  the  amount of  contribution  to which the
          respective  parties  are  entitled,  there  shall  be  considered  the
          relative  benefits  received  by each party from the  offering  of the
          securities  (taking  into  account the portion of the  proceeds of the
          offering realized by each), the parties' relative knowledge and access
          to  information  concerning the matter with respect to which the claim
          was asserted,  the opportunity to correct and prevent any statement or
          omission and any other equitable considerations  appropriate under the
          circumstances.  Notwithstanding  the  provisions of this Section 8, no
          person guilty of fraudulent  misrepresentation  (within the meaning of
          Section  11(f)  of  the   Securities   Act),   shall  be  entitled  to
          contribution  from any  person  who is not  guilty of such  fraudulent
          misrepresentation.

9.   Information  by Sellers.  Each  seller  shall  furnish to the Company  such
     information  regarding  such seller and the  distribution  proposed by such
     seller as the  Company  may  reasonably  request in writing and as shall be
     reasonably  required in connection with any registration,  qualification or
     compliance referred to in this Agreement.

10.  Effectiveness  of Registration  Rights.  Holders of Registrable  Securities
     shall  have the right to  request  registration  of any of the  Registrable
     Securities pursuant to the terms of this Agreement as follows:

     (a)  25% of the  Registrable  Securities  issued to Thomas  Montanti  on or
          after March 30, 1999;

     (b)  25% of the Registrable  Securities  issued to each of the Stockholders
          other than Thomas Montanti on or after September 30, 1999;

     (c)  An additional 25% of the Registrable  Securities issued to each of the
          Stockholders on or after March 30, 2000;

     (d)  All other Registrable Securities on or after September 30, 2000.

11.  Rule 144 Reporting. With a view to making available the benefits of certain
     rules and  regulations of the  Commission  which may permit the sale of the
     Registrable  Securities  to the public  without  registration,  the Company
     agrees to:

     (a)  Make  and  keep  public  information  available  as  those  terms  are
          understood and defined in Rule 144 under the Securities Act;


                                       84

<PAGE>


     (b)  Use its best efforts to file with the  Commission  in a timely  manner
          all reports  and other  documents  required  of the Company  under the
          Securities Act and the Exchange Act; and

     (c)  Furnish  to each  holder  of  Registrable  Securities  forthwith  upon
          request a written  statement by the Company as to its compliance  with
          the reporting  requirements of Rule 144, and of the Securities Act and
          the Exchange Act, a copy of the most recent annual or quarterly report
          of the Company,  and such other reports and documents so filed as such
          holder  may  reasonably  request  in  availing  itself  of any rule or
          regulation  of the  Commission  allowing  such holder to sell any such
          securities without registration.

12.  Changes in Common Stock.  If, and as often as, there are any changes in the
     Common Stock by way of stock split,  combination,  reclassification,  stock
     dividend   or   through   merger,    consolidation,    reorganization    or
     recapitalization,  appropriate  adjustment  shall be made in the provisions
     hereof so that the rights and privileges granted hereby shall continue with
     respect to the Common Stock as so changed.

13.  Transfer or  Assignment  of  Registration  Rights.  The rights to cause the
     Company to  register  securities  granted to  Stockholders  by the  Company
     hereunder  may  be  transferred  or  assigned  by  each  Stockholder  to  a
     transferee or assignee of any Registrable Securities, provided that:

     (a)  The  Company  is  given  written  notice  at the  time of or  within a
          reasonable  time after said transfer or  assignment,  stating the name
          and  address  of said  transferee  or  assignee  and  identifying  the
          securities  with respect to which such  registration  rights are being
          transferred or assigned; and


     (b)  The  transferee or assignee of such rights  assumes,  in writing,  the
          obligations of the assigning Stockholder under this Agreement.

14.  Miscellaneous.

     (a)  All  covenants  and  agreements  contained in this  Agreement by or on
          behalf  of any of the  parties  hereto  shall  bind  and  inure to the
          benefit of the respective successors and assigns of the parties hereto
          whether so expressed or not.  Without  limiting the  generality of the
          foregoing and subject to Section 13 hereof,  the  registration  rights
          conferred herein on the Stockholders shall inure to the benefit of the
          holders from time to time of the Registrable Securities.


     (b)  All notices,  requests,  consents and other  communications  hereunder
          shall be in writing and shall be mailed by first class  registered  or
          certified mail, postage prepaid, or by overnight courier  guaranteeing
          next day delivery and requiring a signature upon  delivery,  addressed
          as follows:

          if to the  Company,  to it at  its  office  at 10  Alvin  Court,  East
          Brunswick, New Jersey 08816;


                                       85

<PAGE>


          if to a Stockholder at his address set forth on Schedule I hereto;

          if to any subsequent holder of Registrable  Securities,  to it at such
          address as may have been  furnished  to the Company in writing by such
          holder;

          or, in any case, at such other address or addresses as shall have been
          furnished  in  writing  to the  Company  (in the case of a  holder  of
          Registrable  Securities) or to the holders of  Registrable  Securities
          (in the case of the Company).

          All such notices, requests, consents and other communications shall be
          deemed to have been delivered (a) in the case of overnight courier, on
          the business day following the date of dispatch and (b) in the case of
          mailing, on the third business day following such mailing.

     (c)  This Agreement  shall be governed by and construed in accordance  with
          the laws of the State of Delaware.

     (d)  This Agreement  constitutes  the entire  agreement of the parties with
          respect  to the  subject  matter  hereof  and may not be  modified  or
          amended  except by an instrument in writing  signed by the Company and
          each holder of Registrable Securities.

     (e)  This  Agreement may be executed in two or more  counterparts,  each of
          which shall be deemed an  original,  but all of which  together  shall
          constitute one and the same instrument.

     (f)  This Agreement  contains the entire  agreement  among the parties with
          respect  to  the  subject  matter  hereof  and  supersedes  all  prior
          arrangements or understandings with respect hereto.

     (g)  The  headings of the  various  sections  of this  Agreement  have been
          inserted for  convenience of reference only and shall not be deemed to
          be a part of this Agreement.

     (h)  It is the desire and intent of the parties that the provisions of this
          Agreement be enforced to the fullest extent  permissible under the law
          and public policies applied in each  jurisdiction in which enforcement
          is sought.  Accordingly,  if any provision of this Agreement  would be
          held in any  jurisdiction to be invalid,  prohibited or  unenforceable
          for any reason,  such  provision,  as to such  jurisdiction,  shall be
          ineffective,  without  invalidating  the remaining  provisions of this
          Agreement  or  affecting  the  validity  or   enforceability  of  such
          provision in any other jurisdiction. Notwithstanding the foregoing, if
          such  provision  could be more narrowly drawn so as not to be invalid,
          prohibited or unenforceable in such jurisdiction, it shall, as to such
          jurisdiction, be so narrowly drawn, without invalidating the remaining
          provisions   of  this   Agreement   or   affecting   the  validity  or
          enforceability of such provision in any other jurisdiction.


                                       86

<PAGE>


     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.


ATTEST:                                   ECOSCIENCE CORPORATION


/s/ Donald T. Aiello                    By: /s/ Harold A. Joannidi 
--------------------                    -------------------------- 
Donald T. Aiello                        Harold A. Joannidi

WITNESS:

/s/ Donald T. Aiello                    /s/ Michael A. DeGiglio    
--------------------                    -------------------------- 
Donald T. Aiello                        Michael A. DeGiglio

/s/ Donald T. Aiello                    /s/ Albert Vanzeyst        
--------------------                    -------------------------- 
Donald T. Aiello                        Albert Vanzeyst

/s/ Donald T. Aiello                    /s/ J. Kevin Cobb          
--------------------                    -------------------------- 
Donald T. Aiello                        J. Kevin Cobb

/s/ Donald T. Aiello                    /s/ Thomas Montanti        
--------------------                    -------------------------- 
Donald T. Aiello                        Thomas Montanti


                                       87

<PAGE>


                                   Schedule I



Michael A. DeGiglio


Thomas Montanti


Albert Vanzeyst


J. Kevin Cobb


                                       88


<PAGE>


                             ECOSCIENCE CORPORATION

                                  EXHIBIT 10.59

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

[GRAPHIC OMITTED]      Silicon Valley Bank
                           Amendment to Loan Documents

Borrower: EcoScience Corporation
          EcoScience Product Systems Corp.
          Agro Dynamics, Inc.
          Agro Dynamics Canada Inc.

Date:     September 25, 1998

     THIS  AMENDMENT TO LOAN  DOCUMENTS is entered into between  SILICON  VALLEY
BANK ("Silicon") and the borrower named above ("Borrower").

     The Parties  agree to amend the Loan and  Security  Agreement  between them
dated  April 28,  1997,  as  amended  from time to time (as  amended,  the "Loan
Agreement"),  as follows,  effective as of the date hereof.  (Capitalized  terms
used but not defined in this Amendment, shall have the meanings set forth in the
Loan Agreement.)

     1. Modification of Section 6.1. Section 6.1 of the Loan Agreement is hereby
amended in its  entirety to read as  follows,  which  amendment  shall be deemed
effective as of the date hereof:

          6.1  Maturity Date.  This Agreement shall continue in effect until the
               maturity  date set forth on the Schedule (the  "Maturity  Date"),
               which as of the date hereof is December 28, 1998;  provided  that
               the  Maturity  Date shall  automatically  be  extended,  and this
               Agreement  shall   automatically  and  continuously   renew,  for
               successive  additional  terms of one year each,  unless one party
               gives  written  notice to the other,  not less than  thirty  days
               prior to the Maturity  Date,  that such party elects to terminate
               this Agreement effective on the Maturity Date.

     2. Modified  Maturity Date.  Section 4 of the Schedule to Loan and Security
Agreement is hereby amended to read as follows:


                                       89

<PAGE>


     "4. MATURITY DATE

     (Section 6.1): December 28, 1998,  subject to automatic renewal as provided
                    in Section 6.1 above,  and early  termination as provided in
                    Section 6.2 above."

     3. Fee.  Borrower  shall pay to Silicon a fee of $4,500 in connection  with
this Amendment, which is in addition to all other amounts payable under the Loan
Agreement and which is not refundable.

     4.  Representations  True. Borrower represents and warrants to Silicon that
all representations  and warranties set forth in the Loan Agreement,  as amended
hereby, are true and correct.

     5.  General  Provisions.  This  Amendment,  the Loan  Agreement,  any prior
written amendments to the Loan Agreement signed by Silicon and Borrower, and the
other written documents and agreements between Silicon and Borrower set forth in
full all of the  representations  and  agreements of the parties with respect to
the subject matter hereof and supersede all prior discussions,  representations,
agreements  and  understandings  between the parties with respect to the subject
hereof.  Except as herein expressly amended,  all of the terms and provisions of
the Loan Agreement,  and all other documents and agreements  between Silicon and
Borrower  shall  continue  in full  force  and  effect  and the same are  hereby
ratified and confirmed.

Borrower:                                                 Silicon:

EcoScience Corporation                              SILICON VALLEY BANK

By  /s/ Michael A. DeGiglio                         By  /s/ Patrick J. O'Donnell
    -----------------------------                       ------------------------
     President or Vice President                    Title  Vice President       
                                                           ---------------------
By  /s/ Harold A. Joannidi          
     ----------------------------          
     Secretary or Ass't Secretary

Borrower:

Eco Science Produce Systems Corp.

By  /s/ Michael A. DeGiglio       
     ----------------------------
     President or Vice President

By  /s/ Harold A. Joannidi          
     ----------------------------
     Secretary or Ass't Secretary


                                       90

<PAGE>


Borrower:

Agro Dynamics, Inc.

By  /s/ Michael A. DeGiglio         
     ----------------------------         
     President or Vice President

By  /s/ Harold A. Joannidi          
     ----------------------------     
     Secretary or Ass't Secretary

Borrower:

Agro Dynamics Canada Inc.

By  /s/ Michael A. DeGiglio         
     ---------------------------- 
     President or Vice President

By  /s/ Harold A. Joannidi          
     ---------------------------- 
     Secretary or Ass't Secretary


                                       91

<PAGE>


                                     CONSENT

     The undersigned acknowledges that his consent to the foregoing Agreement is
not  required,  but the  undersigned  nevertheless  does  hereby  consent to the
foregoing  Agreement and to the documents and agreements referred to therein and
to all future  modifications and amendments hereto, and any termination  hereof,
and to any and all other present and future documents and agreements  between or
among the foregoing  parties.  Nothing  herein shall in any way limit any of the
terms or provisions of the Continuing Guaranty of the undersigned,  all of which
are hereby ratified and affirmed.

EcoScience Corporation                          EcoScience Product Systems Corp.

By  /s/ Michael A. DeGiglio                     By  /s/ Michael A. DeGiglio     
    -----------------------------                   ----------------------------
     President or Vice President                President or Vice President

By  /s/ Harold A. Joannidi                      By  /s/ Michael A. DeGiglio     
    -----------------------------                   ----------------------------
     Secretary or Ass't Secretary               Secretary or Ass't Secretary


Agro Dynamics, Inc.                             Agro Dynamics Canada Inc.

By  /s/ Michael A. DeGiglio                     By  /s/ Michael A. DeGiglio     
    -----------------------------                   ----------------------------
     President or Vice President                President or Vice President

By  /s/ Harold A. Joannidi                      By  /s/ Harold A. Joannidi      
    -----------------------------                   --------------------------- 
     Secretary or Ass't Secretary               Secretary or Ass't Secretary


                                       92