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As filed with the Securities and Exchange Commission on March 14, 2019

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 20-F

 

(Mark One)

 

 

Date of event requiring this shell company report: March 14 , 2019

 

Commission file number          

 

Bioceres Crop Solutions Corp.

(Exact name of Registrant as specified in its charter)

Cayman Islands

(Jurisdiction of incorporation)

Ocampo 210 bis, Predio CCT, Rosario Province of Santa Fe, Argentina

(Address of principal executive offices)

Gloria Montaron General Counsel Ocampo 210 bis, Predio CCT, Rosario Province of Santa Fe, Argentina Phone: 54-341-4861122 Email: gloria.montaron@biocerescrops.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

 

Copies to:

Conrado Tenaglia, Esq.

Matthew S. Poulter, Esq.

Linklaters LLP

1345 Avenue of the Americas

New York, NY 10105

Phone: (212) 903-9000

Fax: (212) 903-9100

 

Securities registered or to be registered pursuant to Section 12(b) of the Act:

 

None

 

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

 

None

 

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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

 

Ordinary Shares

Warrants

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of business covered by the annual report.

N/A

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes   x No

 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

x Yes   o No

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes   o No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes   o No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. o

 

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

 

If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.

o Item 17   o Item 18

 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes   o No

 

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PART I
INTRODUCTORY NOTE AND PRESENTATION OF FINANCIAL AND OTHER INFORMATION			1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS		4
A.	Directors and Senior Management		4
B.	Advisers		4
C.	Auditors		5
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE		6
A.	Offer Statistics		6
B.	Method and Expected Timetable		6
ITEM 3.	KEY INFORMATION		7
A.	Selected Financial Data		7
B.	Capitalization and Indebtedness		16
C.	Reasons for the Offer and Use of Proceeds		17
D.	Risk Factors		17
ITEM 4.	INFORMATION ON THE COMPANY		60
A.	History and Development of the Company		60
B.	Business Overview		62
C.	Organizational Structure		95
D.	Property, Plant and Equipment		96
ITEM 4A.	UNRESOLVED STAFF COMMENTS		97
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS		98
A.	Operating Results		98
B.	Liquidity and Capital Resources		117
C.	Research and Development, Patents and Licenses, etc.		120
D.	Trend Information		121
E.	Off-Balance Sheet Arrangements		121
F.	Tabular Disclosure of Contractual Obligations		121
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		122
A.	Directors and Senior Management		122
B.	Compensation		124
C.	Board Practices		127
D.	Employees		129
E.	Share Ownership		129
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		131

 

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A.	Major Shareholders		131
B.	Related Party Transactions		131
C.	Interests of Experts and Counsel		136
ITEM 8.	FINANCIAL INFORMATION		137
A.	Consolidated Statements and Other Financial Information		137
B.	Significant Changes		137
ITEM 9.	THE OFFER AND LISTING		138
A.	Offer and Listing Details		138
B.	Plan of Distribution		138
C.	Markets		138
D.	Selling Shareholders		138
E.	Dilution		138
F.	Expenses of the Issue		138
ITEM 10.	ADDITIONAL INFORMATION		139
A.	Share Capital		139
B.	Memorandum and Articles of Association		139
C.	Material Contracts		141
D.	Exchange Controls		144
E.	Taxation		144
F.	Dividends and Paying Agents		149
G.	Statement by Experts		150
H.	Documents on Display		150
I.	Subsidiary Information		150
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT RISK		151
A.	Quantitative and Qualitative Disclosure about Market Risk		151
B.	Currency risk		151
C.	Interest rate risk		151
D.	Credit risk		152
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		154
A.	Debt Securities		154
B.	Warrants and Rights		154
C.	Other Securities		154
D.	American Depositary Shares		154
PART II
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		155
A.	Defaults		155
B.	Arrears and Delinquencies		155
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		156

 

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ITEM 15.	CONTROLS AND PROCEDURES		157
ITEM 16.
A.	Audit Committee Financial Expert		158
B.	Code of Ethics		159
C.	Principal Accountant Fees and Services		160
D.	Exemptions from the Listing Standards for Audit Committees		161
E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		162
F.	Change in Registrant’s Certifying Accountant		163
G.	Corporate Governance		164
H.	Mine Safety Disclosure		165
PART III
ITEM 17.	FINANCIAL STATEMENTS		166
ITEM 18.	FINANCIAL STATEMENTS		167
ITEM 19.	EXHIBITS		168

 

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PART I

 

INTRODUCTORY NOTE AND PRESENTATION OF FINANCIAL AND OTHER INFORMATION

 

Introductory Note

 

On March 14, 2019, Union Acquisition Corp. (“Union” or “UAC”), whose name changed to Bioceres Crop Solutions Corp., consummated the previously announced business combination pursuant to a share exchange agreement, dated as of November 8, 2018 (as amended, the “Exchange Agreement”), by and among UAC and Bioceres, Inc., a company incorporated under the laws of Delaware, which converted into Bioceres LLC pursuant to the Reorganization (as defined below) on February 28, 2019.

 

Prior to the consummation of the business combination on March 14, 2019, the following steps took place among Bioceres, Inc. and certain of its affiliates (collectively the “Reorganization”).

 

On February 13, 2019 Bioceres, Inc. formed a new subsidiary, BCS Holding Inc. (“BCS Holding”), and contributed its crop business net assets to BCS Holding in exchange for 100% equity interest in BCS Holding On February 28, 2019, Bioceres, Inc. converted into Bioceres LLC, and on March 1, 2019, Bioceres S.A., a company organized under the laws of Argentina and our ultimate parent company (“Parent”) contributed all of its equity interest in Bioceres Semillas S.A. (“Bioceres Semillas”) (its direct majority owned subsidiary) to Bioceres LLC in exchange for additional equity interests in Bioceres LLC.

 

In addition, concurrently with the consummation of the business combination on March 14, 2019, the Rizobacter Call Option (as defined below) was exercised, pursuant to which the total indirect ownership of BCS Holding in Rizobacter increased to 80.00% of all outstanding stock of Rizobacter. On October 22, 2018, Parent, RASA Holding LLC, a Delaware limited liability company and a wholly owned subsidiary of Bioceres, Inc., now a wholly-owned subsidiary of BCS Holding (“RASA Holding”), and Pedro Enrique Mac Mullen, María Marta Mac Mullen and International Property Services Corp., as sellers (collectively, the “Grantors”) entered into an amended and restated option agreement (as may be amended from time to time, the “Rizobacter Call Option Agreement”), pursuant to which the Parent, RASA Holding or any of their nominated affiliates (including BCS Holding and its subsidiaries, collectively the “Beneficiaries”) would have the option (the “Rizobacter Call Option”) to purchase from the Grantors all of their 11,916,000 shares of common stock (par value AR$1 each and 5 votes per share, the “Rizobacter Stock”) of Rizobacter Argentina S.A., an Argentine corporation and a subsidiary of RASA Holding (“Rizobacter”), representing 29.99% of all outstanding common stock of Rizobacter. Consideration for the Rizobacter Call Option was in the form of UAC shares (the “In-Kind Consideration”). As a result of the business combination and the other transactions contemplated by the Exchange Agreement, as well as the Reorganization and exercise of the Rizobacter Call Option, Union became the holding company of BCS Holding, its subsidiaries and Bioceres Semillas. Upon the consummation of the business combination, Union changed its name to Bioceres Crop Solutions Corp.

 

Unless the context otherwise requires, “we,” “us,” “our,” “the Company,” “BIOX,” “Bioceres” and “Bioceres Crop Solutions” will refer to Bioceres Crop Solutions Corp. and its subsidiaries.

 

Financial statement information

 

In December 2016, Bioceres S.A. approved a change in our fiscal year end from December 31 to June 30. Following the six-month period ended June 30, 2017 (the “Transition Period”), our fiscal year end is June 30 of each year. In connection with the business combination, the shareholders of Union passed resolutions to change its fiscal year to June 30, to be effective upon closing of the business combination, during an extraordinary general meeting held on February 27, 2019.

 

The combined statements of comprehensive income data for Bioceres for the three-month periods ended September 30, 2018 and 2017 and the combined statements of financial position data as of September 30, 2018 are derived from our unaudited interim condensed combined financial statements appearing elsewhere in this report. The combined statements of comprehensive income data for Bioceres for the year ended June 30, 2018,

 

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for the Transition Period and for the years ended December 31, 2016 and 2015 and the combined statements of financial position data as of June 30, 2018, 2017 and as of December 31, 2016 are derived from our audited combined financial statements appearing elsewhere in this report.

 

This report also includes (i) the unaudited pro forma condensed combined statement of income of Bioceres for the year ended June 30, 2018 and for the three months ended September 30, 2019, and (ii) the unaudited pro forma combined statement of financial position as of September 30, 2018, both of which give effect to the business combination, matters related thereto and exercise of the Rizobacter Call Option.

 

Our presentation currency is U.S. dollars. We account for our 50% equity interests in our joint ventures as equity method investments in our combined financial statements.

 

We have applied the following standards and amendments for the first time for our annual reporting period commencing July 1, 2018:

 

· IFRS 9 — Financial Instruments (version 2014).

 

· IFRS 15 — Revenue from Contracts with Customers.

 

· Amendments to IFRS 2 — Classification and measurement of share-based payment transactions.

 

· IFRIC 22 — Foreign currency transactions and advance consideration.

 

· Amendments to IAS 40 — Transfers of investment.

 

The adoption of these amendments did not have a material impact on the amounts recognized in prior periods.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

We make forward-looking statements in this report that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, results of operations, liquidity, anticipated growth strategies, anticipated trends in our industry, our potential growth opportunities, plans and objectives. In some cases, you can identify forward-looking statements by terminology such as “believe,” “may,” “might,” “will,” “consider,” “estimate,” “continue,” “anticipate,” “intend,” “target,” “project,” “contemplate,” “should,” “plan,” “expect,” “predict,” “potential,” or the negative of these terms or other similar terms or expressions. The statements we make regarding the following matters are forward-looking by their nature:

 

·                        our ability to develop and commercialize biotechnology products;

 

·                        our ability to maintain our joint venture agreements with our current partners;

 

·                        the success of the HB4 technology that we license and that remains subject to receipt of regulatory approval;

 

·                        our or our collaborators’ ability to develop commercial products that incorporate our seed traits and complete the regulatory approval process for such products;

 

·                        our expectations regarding the commercial value of our key products in yield and abiotic stress and biotic stress;

 

·                        our expectations regarding regulatory approval of products developed by us, our joint ventures and third-party collaborators;

 

·                        our ability to adapt to continuous technological change in our industry;

 

·                        our expectations that products containing our seed traits will be commercialized and we will earn royalties from the sales of such products;

 

·                        our expectations regarding the future growth of the global agricultural, agricultural biotechnology, biological-based chemical and agro-industrial biotechnology markets;

 

·                        our ability to develop and exploit a proprietary channel for the sale of our biotechnology products;

 

·                        our compliance with laws and regulations that impact our business and changes to such laws and regulations;

 

·                        our ability to assemble, store, integrate and analyze significant amounts of public and proprietary data;

 

·                        our ability to protect our intellectual property through patents, PVP, trademarks, trade secret laws, confidentiality provisions, and licensing arrangements for the genes that we identify; and

 

·                        various other factors, including without limitation those described under “Item 3. Key Information—D. Risk Factors.”

 

The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements.

 

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You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur.

 

ITEM 1.                                                 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

 

A.                  Directors and Senior Management

 

Directors

 

The following table sets forth the names and positions of the members of our Board of Directors and executive officers as of the date of this report. The business addresses of the members of our Board of our Directors are as follows:

 

·                   The business address of Messrs. Trucco and Lopez Lecube is Ocampo 210bis, Predio CCT, Rosario, Province of Santa Fe, Argentina;

 

·                   The business address of Mr. Camargo de Colón is Alameda Uruguay 60, Helvetia Country, Indaituba, San Pablo, 13337-570, Brazil;

 

·                   The business address of Mrs. Zang is Paseo de la Castellana 93, PISO 9, 28046, Madrid, Spain;

 

·                   The business address of Mr. Freisinger is 2001 McAllister St., Apt 104, San Francisco, California 94118, USA; and

 

·                   The business address of Mr. Bransfield is 444 Madison Avenue, Fl 34, New York, New York 10022.

 

Name		Position
Federico Trucco, Ph.D.		Chief Executive Officer and Executive Director
Enrique Lopez Lecube		Chief Financial Officer and Executive Director
Ricardo Yapur		Managing Director of Rizobacter Argentina S.A.
Gloria Montaron Estrada		General Counsel and Executive Director
Gerónimo Watson		Chief Technology Officer
Jorge Wagner		Chief Operating Officer
Carlos Camargo de Colón		Non-Executive Director
Natalia Zang		Non-Executive Director
Ari Freisinger		Non-Executive Director
Kyle P. Bransfield		Non-Executive Director

 

For more information about our Board of Directors and executive officers, see “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management.”

 

B.                  Advisers

 

Our external legal advisers are Linklaters LLP and Marval, O’Farrell & Mairal.

 

Linklaters LLP’s address is 1345 Avenue of the Americas, New York, NY 10105, U.S.A.

 

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Marval, O’Farrell & Mairal’s address is Av. Leandro N. Alem 882, C1001AAQ, Ciudad de Buenos Aires, Argentina.

 

C.                  Auditors

 

Our auditors are Price Waterhouse & Co. S.R.L. (“PwC”), with registered office at Bouchard 557 — Floor 8, C1106ABG. PwC is an independent registered public accounting firm, registered with the Public Company Accounting Oversight Board (United States).

 

Pursuant to the resolutions adopted by our Board of Directors on March 14, 2019 and in connection with the consummation of the business combination, Marcum LLP, Union’s auditors, was dismissed.

 

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ITEM 2.                                                 OFFER STATISTICS AND EXPECTED TIMETABLE

 

A.                  Offer Statistics

 

Not applicable.

 

B.                  Method and Expected Timetable

 

Not applicable.

 

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ITEM 3.                                                 KEY INFORMATION

 

A.                  Selected Financial Data

 

The following tables present our selected combined financial data for the periods indicated. In December 2016, Bioceres S.A. approved a change in our fiscal year end from December 31 to June 30. Following the six-month period ended June 30, 2017 (the “Transition Period”), our fiscal year end is June 30 of each year. The selected combined statement of comprehensive income data for the year ended June 30, 2018, for the Transition Period and for the years ended December 31, 2016 and 2015 and the selected combined statements of financial position data as of June 30, 2018, June 30, 2017 and December 31, 2016 are derived from the audited combined financial statements of Bioceres appearing elsewhere in this report. The selected combined statement of comprehensive income data for Bioceres for the three-month period ended September 30, 2018 and 2017 and the selected combined statements of financial position data as of September 30, 2018 are derived from the unaudited interim condensed combined financial statements appearing elsewhere in this report, which in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the unaudited interim periods. We have not included financial information as of and for the years ended December 31, 2014 and 2013, as such information is not available on a basis that is consistent with the combined financial information included in this report without unreasonable effort or expense. Bioceres’ combined financial statements have been prepared in accordance with International Financial Reporting Standards, which we refer to as IFRS, as issued by the International Accounting Standards Board.

 

The information in this section is not intended to replace the audited and unaudited financial statements appearing elsewhere in this report. Bioceres’ historical results are not necessarily indicative of the results that should be expected in the future, and the results for the three months ended September 30, 2018 are not necessarily indicative of the results that should be expected for the full year ending June 30, 2019, or any other interim periods or any future year or period. Actual future results are likely to be different from the amounts presented, and such differences may be significant.

 

You should read this selected financial data together with “Item 5. Operating and Financial Review and Prospects” and the financial statements and accompanying notes included in this report. The historical results are not necessarily indicative of Bioceres’ future results of operations or financial condition.

 

Selected Combined Statement of Comprehensive Income of Bioceres

 

		Three-Month Period Ended September 30,				Year Ended June 30,		Six-Month Transition Period Ended June 30,		Year Ended December 31,
		2018		2017		2018		2017		2016(1)		2015(2)
		(unaudited)
		(US$)
Total revenue		29,612,224		33,874,161		133,542,704		46,885,310		41,169,249		5,206,091
Cost of Sales		(14,499,010	)	(20,011,633	)	(77,094,551	)	(29,613,158	)	(30,598,956	)	(3,837,242	)
Research and development expenses		(1,048,492	)	(938,374	)	(3,950,100	)	(1,990,268	)	(853,854	)	(302,774	)
Selling, general and administrative expenses		(6,080,485	)	(8,395,208	)	(35,263,688	)	(15,689,598	)	(8,827,121	)	(1,401,037	)
Share of profit or loss of joint ventures and associates		80,156		55,117		(2,136,801	)	(649,075	)	(707,042	)	(858,158	)
Other income or loss		101,611		(56,878	)	613,389		54,252		24,765		12
Operating income/(loss)		8,166,004		4,527,185		15,710,953		(1,002,537	)	207,041		(1,193,108	)
Finance income		12,464,317		1,326,714		26,982,795		1,762,484		156,468		1,569,592

 

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		Three-Month Period Ended September 30,				Year Ended June 30,		Six-Month Transition Period Ended June 30,		Year Ended December 31,
		2018		2017		2018		2017		2016(1)		2015(2)
		(unaudited)
		(US$)
Finance costs		(26,199,971	)	(6,766,835	)	(67,933,511	)	(11,955,747	)	(8,406,045	)	(879,769	)
Loss before income tax		(5,569,650	)	(912,936	)	(25,239,763	)	(11,195,800	)	(8,042,536	)	(503,285	)
Income tax benefit/(expense)		1,970,393		289,837		10,928,517		2,817,251		1,860,647		(690,726	)
Loss for the period/year		(3,599,257	)	(623,099	)	(14,311,246	)	(8,378,549	)	(6,181,889	)	(1,194,011	)
Other comprehensive loss(3)		(16,395,253	)	(4,156,488	)	(31,833,554	)	(2,714,241	)	(4,579,700	)	—
Total comprehensive loss		(19,994,510	)	(4,779,587	)	(46,144,800	)	(11,092,790	)	(10,761,589	)	(1,194,011	)
Non-IFRS measures
Adjusted EBITDA (unaudited)(4)		8,991,963		6,868,344		22,370,693		4,133,308		8,775,411		(1,116,215	)

 

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Notes:—

(1)               Combined statements of profit or loss and other comprehensive income for the year ended December 31, 2016 include results of operations of Rizobacter from October 19, 2016 to December 31, 2016 (the period beginning on the date whereupon Bioceres acquired control of Rizobacter).

(2)               Combined statements of profit or loss and other comprehensive income for the year ended December 31, 2015 do not include the consolidated statements of profit or loss and other comprehensive income of Rizobacter, control of which Bioceres acquired on October 19, 2016.

(3)               Includes (i) exchange differences on translation of foreign operations from joint ventures, (ii) exchange differences on translation of foreign operations, (iii) revaluation of property, plant and equipment, net tax from joint ventures and (iv) revaluation of property, plant and equipment, net of tax.

(4)               To provide investors with additional information regarding Bioceres’ financial results, Bioceres monitors and has presented within this report Adjusted EBITDA. Adjusted EBITDA is not a measurement of financial performance under IFRS and should not be considered an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to profit/(loss) as indicators of operating performance or any other measures of performance derived in accordance with IFRS. Bioceres defines Adjusted EBITDA as profit / (loss) exclusive of financial income / (costs), income tax benefit / (expense), depreciation, amortization, share-based compensation and inventory purchase price allocation. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Non-IFRS Financial Measures.”

 

The table below provides a reconciliation of our loss for the periods to Adjusted EBITDA:

 

		Three-Month Period Ended September 30,				Year Ended June 30,		Six-Month Transition Period Ended June 30, 2017		Year Ended December 31,
		2018		2017		2018		2017		2016		2015
		(unaudited)
		(US$)
Reconciliation of Net Loss to Adjusted EBITDA:
Loss for the period/year		(3,599,257	)	(623,099	)	(14,311,246	)	(8,378,549	)	(6,181,889	)	(1,194,011	)
Income tax (benefit)/expense		(1,970,393	)	(289,837	)	(10,928,517	)	(2,817,251	)	(1,860,647	)	690,726
Finance costs		26,199,971		6,766,835		67,933,511		11,955,747		8,406,045		879,769
Finance income		(12,464,317	)	(1,326,714	)	(26,982,795	)	(1,762,484	)	(156,468	)	(1,569,592	)

 

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		Three-Month Period Ended September 30,				Year Ended June 30,		Six-Month Transition Period Ended June 30, 2017		Year Ended December 31,
		2018		2017		2018		2017		2016		2015
		(unaudited)
		(US$)
Depreciation of property, plant and equipment		404,284		634,431		2,230,881		1,254,657		584,293		71,277
Amortization of intangible assets		417,871		577,033		2,141,476		1,418,529		424,179		2,331
Inventory purchase price allocation charge		—		1,119,155		2,257,378		2,436,949		7,516,071		—
Stock-based compensation charges		3,804		10,540		30,005		25,710		43,827		3,285
Adjusted EBITDA (unaudited)		8,991,963		6,868,344		22,370,693		4,133,308		8,775,411		(1,116,215	)

 

Selected Combined Statement of Financial Position of Bioceres

 

		Bioceres
		As of September 30, 2018		As of June 30, 2018		As of June 30, 2017		As of December 31, 2016
		(unaudited)
		(US$)
Cash and cash equivalents		3,255,981		2,215,103		1,679,478		982,897
Total assets		206,140,159		196,638,764		239,871,051		250,522,746
Borrowings		92,939,227		91,017,133		74,990,135		64,687,486
Total liabilities		173,553,055		163,505,108		162,631,985		166,852,003
Total equity		32,587,104		33,133,656		77,239,066		83,670,743

 

The unaudited pro forma combined financial information

 

On March 14, 2019, UAC consummated the previously announced business combination pursuant to the Exchange Agreement, by and among UAC and Bioceres, Inc., a company incorporated under the laws of Delaware, which converted into Bioceres LLC pursuant to the Reorganization on February 28, 2019.

 

The unaudited pro forma combined financial information has been derived by the application of pro forma adjustments to the historical combined financial statements of Bioceres, which have been presented to give effect to the business combination which is accounted for as a reverse recapitalization and the exercise of the Rizobacter Call Option (the “events”). UAC’s financial statements, which have been historically prepared under U.S. GAAP, have been adjusted to be presented under IFRS for the purposes of preparing the unaudited pro forma combined financial information.

 

Introduction

 

The unaudited pro forma combined statement of financial position as of September 30, 2018 is based on the historical statement of financial position of Bioceres (presented in accordance with IFRS) and the historical statement of financial position of UAC as of September 30, 2018 (adjusted to be presented in accordance with

 

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IFRS) to reflect the business combination, the accounting effects of the reverse recapitalization and the exercise of the Rizobacter Call Option, as if those events have occurred on September 30, 2018.

 

The unaudited pro forma condensed combined statement of income combines the historical audited results of operations of Bioceres for the year ended June 30, 2018 (presented in accordance with IFRS), with the historical unaudited results of operations of UAC for the period from November 14, 2017 (inception) to June 30, 2018 (adjusted to be presented in accordance with IFRS and to conform to Bioceres’ historical financial reporting periods) and gives pro forma effect to the events as if those had been consummated on July 1, 2017. The unaudited pro forma condensed combined statement of income for the three months ended September 30, 2018 combines the unaudited historical combined statement of income of Bioceres for the three-month period ended September 30, 2018 (presented in accordance with IFRS) with the unaudited historical condensed combined statement of income of UAC for the three-month period ended September 30, 2018 (adjusted to be presented in accordance with IFRS and to conform to Bioceres’ historical financial reporting periods), giving effect to the events as if those had occurred as of the beginning of the earliest period presented.

 

The unaudited pro forma adjustments are based on estimates, available information and certain assumptions that UAC and Bioceres believe are reasonable, factually supportable and directly attributable to the events. The unaudited pro forma adjustments and primary assumptions are described in the accompanying notes. The unaudited pro forma combined statement of income is being provided for illustrative purposes only and does not purport to represent what our results of operations or result for the period would have been if the events had occurred on the dates indicated, and are not intended to project our results of operations or results for any future period. Any of the factors underlying these estimates and assumptions may change or prove to be materially different and the estimates and assumptions may not be representative of facts that exist upon the consummation of the business combination.

 

Description of the business combination

 

On November 8, 2018, UAC entered into the Exchange Agreement, pursuant to which UAC will, among other things, purchase from Bioceres LLC (the “Seller”) the Bioceres stock and all of the Seller’s majority equity interest in Bioceres Semillas. As consideration for the transfer of all of the issued and outstanding shares of Bioceres stock and 87.2739% of the issued and outstanding equity interest in Bioceres Semillas to UAC, UAC will issue 27,116,174 ordinary shares (the “Exchange Shares”) and 7,500,000 warrants to the Seller.

 

In addition, on October 22, 2018, the Parent, RASA Holding and the Grantors entered into the Rizobacter Call Option Agreement, pursuant to which the Beneficiaries would have the option to purchase from the Grantors all of their Rizobacter Stock, representing 29.99% of all outstanding common stock of Rizobacter. Concurrently with the closing of business combination, the Rizobacter Call Option was exercised, pursuant to which the total indirect ownership of BCS Holding in Rizobacter increased to 80.00% of all outstanding stock of Rizobacter. The consideration for the Rizobacter Call Option was US$1,265,000 in cash and US$48,715,000 in UAC shares.

 

Accounting for the business combination

 

The business combination will be accounted for as a “reverse recapitalization”. Under this method of accounting, UAC will be treated as the “acquired” company for financial reporting purposes. This determination is primarily based on Bioceres’ equity holders expecting to have a majority of the voting rights of the combined company, Bioceres comprising the ongoing operations of the combined company, Bioceres comprising a majority of the governing body of the combined company, and Bioceres’ senior management comprising the majority members of the management of the combined company. Accordingly, for accounting purposes, the business combination will be treated as the equivalent of Bioceres issuing stock for the net assets of UAC, accompanied by a recapitalization. The net assets of UAC will be stated at historical cost, with no goodwill or other intangible assets recorded. It will be assumed that operations prior to the business combination will be those of Bioceres.

 

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Pro Forma Presentation

 

The unaudited pro forma combined financial information has been derived by the application of pro forma adjustments to the historical combined financial statements of Bioceres, which have been presented to give effect to the business combination which is accounted for as a reverse recapitalization and the exercise of the Rizobacter Call Option.

 

The unaudited pro forma combined statement of financial position as of September 30, 2018 is based on the historical statement of financial position of Bioceres presented in accordance with IFRS and the historical statement of financial position of UAC as of September 30, 2018, adjusted in accordance with IFRS to reflect the business combination, the accounting effects of the reverse recapitalization and the exercise of the Rizobacter Call Option, as if those events have occurred on September 30, 2018.

 

The unaudited pro forma condensed combined statement of income combines the historical audited results of operations of Bioceres for the year ended June 30, 2018, with the historical unaudited results of operations of UAC for the period from November 14, 2017 (inception) to June 30, 2018 and gives pro forma effect to the events as if those had been consummated on July 1, 2017. The unaudited pro forma condensed combined statement of income for the three months ended September 30, 2018 combines the unaudited historical combined statement of income of Bioceres for the three-month period ended September 30, 2018 with the unaudited historical condensed combined statement of income of UAC for the three-month period ended September 30, 2018, giving effect to the events as if those had occurred at the beginning of the earliest period presented.

 

You should read the information contained in this section in conjunction with “Item 5. Operating and Financial Review and Prospects,” the historical audited combined financial statements of Bioceres and the accompanying notes included elsewhere in this report. Certain line items of the unaudited pro forma condensed combined financial information of UAC included herein were aligned to Bioceres’ in order to conform to the presentation standards used in Bioceres’ combined financial statements. In addition, UAC’s historical financial reporting periods have been adjusted to conform to Bioceres’ historical financial reporting periods.

 

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Unaudited pro forma combined statement of financial position as of September 30, 2018

 

		I		II			III Pro forma			IV Rizobacter			V Pro forma
		Bioceres		UAC			adjustments			call option			combined
ASSETS
CURRENT ASSETS
Cash and cash equivalents		3,255,981		633,599			1,253,878		B	—			5,143,458
Other financial assets		4,562,725		117,076,074			(117,076,074	)	B C	—			4,562,725
Trade receivables		52,806,907		—			—			—			52,806,907
Other receivables		4,982,346		280,337			—			—			5,262,683
Income and minimum presumed income taxes recoverable		1,476,193		—			—			—			1,476,193
Inventories		25,089,935		—			—			—			25,089,935
Total current assets		92,174,087		117,990,010			(115,822,196	)		—			94,341,901
NON-CURRENT ASSETS
Other financial assets		284,683		—			—			—			284,683
Other receivables		4,899,666		—			—			—			4,899,666
Income and minimum presumed income taxes recoverable		521,037		—			—			—			521,037
Deferred tax assets		597,522		—			—			—			597,522
Investments in joint ventures		22,509,645		—			—			—			22,509,645
Property, plant and equipment		37,441,647		—			—			—			37,441,647
Intangible assets		29,873,603		—			—			—			29,873,603
Goodwill		17,838,269		—			—			—			17,838,269
Total non-current assets		113,966,072		—			—			—			113,966,072
Total assets		206,140,159		117,990,010			(115,822,196	)		—			208,307,973
LIABILITIES
CURRENT LIABILITIES
Trade and other payables		37,881,886		79,468			—			—			37,961,354
Borrowings		71,235,483		—			—			1,265,000		E	72,500,483
Employee benefits and social security		4,210,621		—			—			—			4,210,621
Deferred revenue and advances from customers		2,831,527		—			—			—			2,831,527
Income and minimum presumed income taxes payable		579		—			—			—			579
Government grants		6,257		—			—			—			6,257
Financed payment - Acquisition of business		20,616,463		—			95,798		D	(14,985,000	)	E	5,727,261
Ordinary shares subject to possible redemption		—		112,910,534		A	(112,910,534	)	C	—			—
Total current liabilities		136,782,816		112,990,002			(112,814,736	)		(13,720,000	)		123,238,082
NON-CURRENT LIABILITIES
Borrowings		21,703,744		—			—			—			21,703,744
Government grants		10,871		—			—			—			10,871
Investments in joint ventures		2,086,376		—			—			—			2,086,376
Deferred tax liabilities		9,807,855		—			—			—			9,807,855
Provisions		458,874		—			—			—			458,874
Financed payment - Acquisition of business		2,702,519		—			—			—			2,702,519
Total non-current liabilities		36,770,239		—			—			—			36,770,239
Total liabilities		173,553,055		112,990,002			(112,814,736	)		(13,720,000	)		160,008,321
EQUITY
Equity attributable to owners of the parent		11,116,962		5,000,008			(3,007,459	)	C	24,636,806		F	37,746,317
Non-controlling interests		21,470,142		—			—			(10,916,806	)	F	10,553,336
Total equity		32,587,104		5,000,008			(3,007,459	)		13,720,000			48,299,653
Total equity and liabilities		206,140,159		117,990,010			(115,822,196	)		—			208,307,973

 

Notes to the pro forma combined statement of financial position as of September 30, 2018

 

I.                      This column is derived from the unaudited combined statement of financial position of Bioceres as of September 30, 2018.

 

II.                 This column is derived from the unaudited balance sheet of UAC as of September 30, 2018 that has been adjusted to be presented under IFRS.

 

A.                  This has been classified as current liabilities due to the closing date of the business combination.

 

III.            This column shows the pro forma adjustments regarding:

 

B.                  The reclassification between “Other financial assets” and “Cash and cash equivalents” related to the release of funds held in the trust account;

 

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C.               The payment for the redeemed shares and equity adjustments; and

 

D.                  Financial results accrued on the amount owned for the original Rizobacter purchase option, in light of the exercise of the Rizobacter Call Option.

 

IV.             This column shows the pro forma adjustments in consideration of the exercise of the Rizobacter Call Option. The consideration for the Rizobacter Call Option was US$1,265,000 in cash and US$48,715,000 in UAC shares. The pro forma adjustments for the Rizobacter Call Option are:

 

E.                   Cancellation of financed payment — cancellation of the payment made in connection with the original Rizobacter purchase option, in light of the exercise of the Rizobacter Call Option; and

 

F.                    Equity adjustments for the acquisition of the 29.99% equity interest in Rizobacter in consideration of the Rizobacter Call Option and issuance of UAC shares mentioned above.

 

V.                  This column represents the unaudited pro forma combined statement of financial position as of September 30, 2018 for the business combination under IFRS and reflects all adjustments in columns I to IV above.

 

Unaudited pro forma combined statement of income for the three-month period ended September 30, 2018:

 

		I		II		III			IV
		Historical Bioceres		Historical UAC		Pro forma adjustments			Pro forma combined
Revenue		29,605,745		—		—			29,605,745
Government grants		6,479		—		—			6,479
Total revenue		29,612,224		—		—			29,612,224
Cost of sales		(14,499,010	)	—		—			(14,499,010	)
Research and development expenses		(1,048,492	)	—		—			(1,048,492	)
Selling, general and administrative expenses		(6,080,485	)	(159,688	)	—			(6,240,173	)
Share of loss of joint ventures		80,156		—		—			80,156
Other income or expenses, net		101,611		—		—			101,611
Operating profit or loss		8,166,004		(159,688	)	—			8,006,316
Finance income		12,464,317		507,664		(507,664	)	A	12,464,317
Finance costs		(26,199,971	)	—		(95,798	)	B	(26,295,769	)
Income or loss before income tax		(5,569,650	)	347,976		(603,462	)		(5,825,136	)
Income tax benefit		1,970,393		—		28,739		B	1,999,132
Income or loss for the period		(3,599,257	)	347,976		(574,723	)		(3,826,004	)
Attributable to:
Equity holders of the parent		(2,618,445	)	347,976		(1,065,129	)	C	(3,335,598	)
Non-controlling interest		(980,812	)	—		490,406		C	(490,406	)
		(3,599,257	)	347,976		(574,723	)		(3,826,004	)
Weighted average shares outstanding, basic and diluted		—		2,875,000		32,848,918		D	36,120,517
Basic and diluted net loss per ordinary share		—		(0.04	)	—			(0.09	)

 

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