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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 20-F

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(Mark One)

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Date of event requiring this shell company report:                

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Commission file number: 001-38405

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Bioceres Crop Solutions Corp.

(Exact name of Registrant as specified in its charter)

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Cayman Islands

(Jurisdiction of incorporation)

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Ocampo 210 bis, Predio CCT, Rosario

Province of Santa Fe, Argentina

(Address of principal executive offices)

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Gloria Montaron

Executive Director

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)

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Copies to:

Conrado Tenaglia, Esq.

Matthew S. Poulter, Esq.

Linklaters LLP

1290 Avenue of the Americas

New York, NY 10104

Phone: (212) 903-9000

Fax: (212) 903-9100

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

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

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None

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

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Ordinary Shares

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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.

41,104,087 ordinary shares were issued and outstanding as of June 30, 2021.

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

◻ Yes ⌧ No

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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.

◻ Yes ⌧ No

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

⌧ Yes ◻ No

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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).

⌧ Yes ◻ No

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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.

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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. ☐

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

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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.

◻ Item 17 ◻ Item 18

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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).

◻ Yes ⌧ No

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The adoption of these amendments did not have a material impact on the Group.

Amendments to Financial Disclosures about Acquired and Disposed Businesses

On May 20, 2020, the SEC adopted amendments to financial disclosures regarding acquired and disposed businesses which assist registrants in making more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant and improve the disclosure requirements for financial statements relating to acquisitions and dispositions of businesses, including real estate operations and investment companies. The changes are intended to improve access to financial information about acquired or disposed businesses for investors, facilitate more timely access to capital, and reduce the complexity and costs to prepare the disclosure.

Rule 1-02(w) is used to determine whether a tested entity is deemed significant for the purposes of various SEC rules and form requirements, including the Rule 3-05 and 3-09 of Regulation S-X. The significance tests set forth in Rule 1-02(w) are commonly referred to as the investment test, the asset test, and the income test.

The new rules amend the investment and income tests and are intended to result in more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant. No change was made to the asset test.

Registrants will be required to apply the new rules no later than the beginning of the registrant’s fiscal year beginning after December 31, 2020 (the mandatory compliance date). However, voluntary early compliance is permitted provided that the new rules are applied in their entirety from the date of early compliance. We have decided to apply the new amended rules early.

Amendments to Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information

In November 2020, the SEC amended Regulation S-K to modernize, simplify, and enhance Management’s Discussion and Analysis (MD&A), streamline supplementary financial information, and eliminate the requirement to provide certain selected financial data.

Key changes include:

Registrants will be required to apply the new rules in the first fiscal year that ends on or after August 9, 2021. However, voluntary early compliance is permitted provided that the new rules are applied in their entirety from the date of early compliance. We have decided to apply the new amended rules early.

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:

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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.

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. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report or to conform these statements to actual results or to changes in our expectations.

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Risks Related to Our Intellectual Property

Risks Related to Rizobacter’s Acquisition

Risks Related to Operating in Latin America

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Risks Related to Our Securities

Risks Related to our Business

We may not be successful in developing marketable or commercial technologies.

Our success depends in part on our ability to identify and develop high-value crop productivity technologies for use in commercial products. Through our technology sourcing and product development collaborations we commit substantial efforts and other resources to accomplish this. It may take several years, if at all, before many of our products complete the development process and become available for production and commercialization.

As of the date of this report, many of our products have been commercialized by Rizobacter and Bioceres Semillas. There can be no assurance that our future crop productivity technologies will be viable for commercial use, or that we will be able to generate revenues from those technologies, in a significant manner or at all. If seeds or other products that contain our licensed seed traits or technology are unsuccessful in achieving their desired effect or otherwise fail to be commercialized, we will not receive revenues from our customers or royalty payments from the commercialization of the licensed seed traits and technologies we develop or license, which could materially and adversely affect our business, financial condition, results of operations and growth strategy.

Seeds containing the seed traits or biological treatments that we develop may be unsuccessful or fail to achieve commercialization for any of the following reasons:

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Our business and the commercialization of our products currently in development are subject to various government regulations and we or our collaborators may be unable to obtain, or may face delays in obtaining, necessary regulatory approvals.

Our business is generally subject to two types of regulations: (i) those that apply to our operations and (ii) those that apply to products containing or based on our technology. We are responsible for applying for and maintaining the regulatory approvals necessary for our operations, particularly those covering our field trials, bio-safety evaluations and feed and food tests. Under the terms of our joint venture agreements, we and our joint venture partners are jointly responsible for obtaining and maintaining the regulatory approvals necessary for the commercialization of products that contain our licensed seed traits and other technologies in the various relevant markets. Regulatory and legislative requirements affect the development, production and sale of our products, including the testing, commercialization and planting of seeds containing our biotechnology licensed seed traits. Failure to receive such approvals or non-compliance with the applicable regulatory regime could adversely impact our operations and business strategy. Additionally, we may face difficulties in obtaining regulatory approvals in jurisdictions in which we have not previously operated or in which we have limited experience.

In most of our key target markets, including the United States, regulatory approvals must be received prior to the importation and commercialization of transgenic products. Regulatory regimes in some of our key target markets may be more onerous. For example, in Argentina, the Argentine government’s regulation of agricultural biotechnology is handled primarily by two agencies, the Argentine National Advisory Commission on Agricultural Biotechnology (Comisión Nacional Asesora de Biotecnología Agropecuaria) (“CONABIA”), which regulates activity related to biosafety, and the National Food Safety and Quality Service (Servicio Nacional de Sanidad y Calidad Agroalimentaria), or SENASA, which regulates activity related to food and feed safety. Additionally, the National Market Regulator (Dirección Nacional de Mercados) must conduct an economic evaluation.

When products containing our licensed seed traits or other technology reach large-scale field trials, bio-safety evaluations and commercial approval stages, if we, our joint ventures or other collaborators are unable to obtain the requisite regulatory approvals or if there is a delay in obtaining such approvals as a result of negative market perception, consumer groups´ legal actions against GMOs, heightened regulatory standards or unfamiliarity with the applicable regulatory regime, such products will not be commercialized, which would negatively impact our business and results of operations.

Our HB4 Seed business is dependent predominantly on the success of a technology that we license and that remains subject to receipt of regulatory approval.

Most of our biotechnology licensed seed products currently under development incorporates HB4 technology (a yield improvement technology). We expect that the sale of biotech seeds that contain HB4 technology, our HB4 Seed business, will comprise an increasing portion of our future revenues. As a result, our future growth and financial performance will be influenced by our ability to receive or maintain regulatory approval for and to commercialize our licensed HB4 technology, and if this effort is unsuccessful our business could be materially and adversely affected.

We also depend on our continued exclusive use of the HB4 technology pursuant to the terms of licensing agreements with Parent, the National Scientific and Technical Research Council of Argentina (Consejo Nacional de Investigaciones Científicas y Técnicas)

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(“CONICET”) and the National University of the Litoral. The Parent holds an exclusive license for HB4, which terminates on the expiration date of the last of the HB4 patents in 2040, unless terminated before such date in accordance with its terms. If this licensing agreement is declared unenforceable or invalid, we could lose access to one of our principal technologies and could become involved in a costly or time-consuming legal dispute.

The Parent is party to funding agreements pursuant to which certain investors have a right to the majority of the payments we may receive in connection with the commercialization of our technologies in certain crops.

Between 2005 and 2007, the Parent entered into agreements with various investors to obtain funding in the aggregate amount of US$1.0 million for research and early-stage development of technology relating to a specific sunflower gene, Hahb 4, that is intended to promote drought tolerance in crops. The funding agreements grant the investors, in the aggregate, the right to receive 52.8% of the rights and royalties payable to us from the successful commercialization of the resulting technology with respect to soybean, wheat and corn. As of the date hereof, the promoter element of the technology developed in connection with our research and development of Hahb 4 is being incorporated into a leading soybean product that Verdeca is developing, which also incorporates our HB4 technology. In addition, the licenses of Parent’s HB4 technology that Parent has granted to other developers and our joint ventures with respect to certain crops include the Hahb 4 promoter element. Accordingly, we may have to pay third parties royalties otherwise due to us in the absence of these agreements and we may not receive the full economic benefit of the commercialization of certain of our technologies. In addition, the investors party to these funding arrangements may claim to be entitled to payments and to royalties, which we believe are within the scope of such agreements. The investors may also dispute the allocation of revenue as it relates to the relative importance of our various technologies incorporated into a given product. We cannot be certain how a court would interpret any ambiguities regarding the scope of these funding agreements or other claims that may be raised by one or more investors pursuant to these funding agreements. Any dispute regarding these agreements could be costly and divert management’s attention from our operations, and if the investors are deemed to have rights to payments in excess of those we believe are applicable, our business, results of operations, cash flows and prospects would be materially and adversely affected. See “Item 5. Operating and Financial Review and Prospects—F. Tabular Disclosure of Contractual Obligations” and “Item 4. Information on the Company—B. Business Overview—Early-Stage Technology Development Agreements.”

There are a limited number of prospective collaborators in the markets in which we operate.

Our Research and Development (“R&D”) and commercialization activities are costly, time-intensive and require significant infrastructure and resources. Therefore, our business strategy involves entering into collaboration and joint venture arrangements with global agricultural firms to leverage their resources, know-how and distribution channels and into collaborations with research institutions and governmental agencies to facilitate our low-cost approach to R&D. The crop productivity market is highly consolidated and dominated by a relatively small number of large companies. Additionally, there are a limited number of researchers and research institutions focused on the technologies that we seek to develop and competition for entry into collaboration arrangements with them can be challenging. Due to the small number of companies in our markets and the small number of potential collaborators, there are limited opportunities for us to pursue additional joint ventures and collaborations with new partners and collaborators. We may cease to be attractive to prospective collaborators if our technology platform or track record is not perceived to be sufficiently developed or successful or if, in the case of prospective joint venture partners, such prospective partners view us as a competitor and choose not to collaborate with us. In addition, if we fail to develop or maintain our relationships with any of our existing collaborators, we could lose our opportunity to work with that collaborator and suffer a reputational risk that could impact our relationships with other collaborators in what is a relatively small industry community. If we are unable to enter into new joint venture agreements or collaborations, we may face higher development costs than anticipated, greater difficulties in achieving commercialization, challenges in expanding our portfolio of technologies and distribution networks and commercial products, or other adverse impacts, which could have a material adverse effect on our business prospects.

The licenses that our Parent grants to certain of the joint ventures in which we participate and to certain third parties are exclusive with respect to certain territories and/or crops, limiting our ability to use the licensed technology and future technologies either independently or with another partner.

The license our Parent granted to Trigall Genetics is exclusive with respect to HB4 wheat technology in Argentina, Brazil, Paraguay and Uruguay. Pursuant to the terms of the licenses in Trigall joint ventures, we reserve the rights to use such technologies for research and non-commercial purposes. We are prohibited from independently using the technology our Parent licensed to Trigall Genetics with respect to wheat within their exclusive field and territories. As a result, we are, to a certain extent, dependent on the efforts of our joint ventures and licensees that hold or will hold exclusive licenses to commercialize our technologies in those fields and territories. These licenses are valid so long as the respective joint venture operates and can be recuperated by us upon joint venture dissolution. The restrictions imposed by this license limit our flexibility to commercialize our technology and expand our business in such territories, which could adversely affect our business, results of operations and prospects.

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Our product development cycle is lengthy and uncertain, and we may never generate revenues or earn royalties on the sale of our products currently in development.

R&D in the crop productivity industry is expensive, complex, prolonged, and uncertain. We may spend many years and dedicate significant financial and other resources developing products that may never generate revenues or come to market. Our process of developing and commercializing technologies involves several phases and can take several years from discovery to commercialization of a product. On average, it takes between five and 12 years to develop a product for our crop productivity products. Some products will never reach the final stages of development.

Development of new or improved agricultural products involves risks of failure inherent in the development of products based on innovative and complex technologies. These risks include the possibility that:

We intend to continue to invest in R&D including additional and expanded field testing to validate potential products in real world conditions. Because of the long product development cycle and the complexities and uncertainties associated with biotech technologies, there can be no assurance that we will ever generate significant revenues from the technologies or products that we are currently developing without significant delay, without the incurrence of unanticipated costs or at all.

We or our collaborators may fail to perform our respective contractual obligations and we may have disputes with our collaborators.

Pursuant to our joint venture agreements, other agreements with our joint venture partners and collaboration arrangements, we are required to provide R&D services over a particular period of time and meet other contractual obligations. If we fail to perform our obligations under these agreements, our collaborators’ obligations to us may be reduced and, in other cases, our collaborators may seek to dissolve the corresponding joint venture or terminate their agreements with us and, as a result, our anticipated revenues may decrease. In addition, the failure of any of our collaborators to perform their contractual obligations, due to financial hardship, disagreement under the relevant agreement or for any other reason, may hinder our research collaboration, development and commercialization activities, increase our costs and materially and adversely affect our results of operations. Because some of our intellectual property has been licensed to various joint ventures for use in several different fields, the interests of each of our partners in these joint ventures may not always be aligned. As a result, it is possible that potential disputes may arise between us and our partners.

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Our ability to generate value from our joint ventures and research collaborations will depend on, among other things, our ability to work cooperatively with our collaborators for the discovery, development and commercialization of our technology and products and we may be unable to do so. We cannot be sure that the division of labor will be successful in aiding the commercialization of our products. Furthermore, the agreements governing our partnership and collaborations are complex and cover a range of future activities. The occurrence of any negative event with respect to the above matters or a dispute between us and our partners or collaborators could delay our development and commercialization efforts, and lead to the dissolution of the partnership or collaboration. If disagreements with a collaborator arise, any such dispute could be costly, time-consuming to resolve and distracting to our management. Such a dispute may also negatively affect our relationship with one or more of our other collaborators and may hinder our ability to enter into future collaboration agreements. Any of these occurrences could negatively impact our business and results of operations.

Our joint venture agreements or any partnerships that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our product candidates.

We may seek partnerships or joint venture arrangements with third parties for the development or commercialization of our product candidates depending on the merits of retaining commercialization rights for ourselves as compared to entering into partnerships or joint venture arrangements. We will face, to the extent that we decide to enter into partnerships or joint venture agreements, significant competition in seeking appropriate partners. Moreover, partnerships or joint venture arrangements are complex and time-consuming to negotiate document implement and maintain. We may not be successful in our efforts to establish and implement partnerships, joint ventures, or other alternative arrangements should we so chose to enter into such arrangements and any future partnerships or joint ventures that we enter into may not be successful. Furthermore, the terms of any partnerships, joint ventures, or other arrangements that we may establish may not be favorable to us.

The success of our R&D partnerships or joint venture arrangements will depend heavily on the efforts and activities of our partners. Our joint venture arrangements may present financial, managerial, and operational challenges, including potential disputes, liabilities, or contingencies and may involve risks not otherwise present when operating independently including:

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The risks described above or the failure to continue any joint venture or joint development arrangement or to resolve disagreements with our current or future joint venture partners could materially and adversely affect our ability to transact the business that is the subject of such joint venture, which would in turn negatively affect our financial condition and results of operations.

We may experience difficulties in collecting payments or royalties to which we believe we are entitled.

We sell certain of our products to distributors through Rizobacter and Bioceres Semillas, our proprietary commercial channels for crop productivity technologies. We also often license the use of certain technology to collaborators and licensees who use or will use the intellectual property to develop and commercialize seeds with improved seed traits. Additionally, we may be entitled under applicable intellectual property laws in the countries in which we operate to the payment of royalties from end users who subsequently multiply and use our seed technology. In each case, we may not actually receive the payments or royalties to which we are entitled, due to failure or refusal of the responsible parties to pay the amounts due. Failure to receive amounts owed to us could have an adverse impact on our business.

In the case of royalty payments from licensees, we rely on the good faith of the licensees to report to us the sales they earn from these products and to accurately calculate the royalties, to which we are entitled, processes that may involve complicated and difficult calculations. Under existing agreements, we have the right to inspect the inventory and accounts of multipliers of our seeds and licensees of our technologies; however, we must also rely on the good faith of end users to accurately report to us the multiplication of our seeds and remit royalty payments due in respect of the same, which may be respected to varying degrees in different jurisdictions given the absence of contractual privity and prevailing market practice.

Additionally, a licensee, collaborator or third party may use our intellectual property without our permission, dispute our ownership of certain intellectual property rights or argue that our intellectual property does not cover the joint venture’s marketed product.

We seek to address these concerns in our contractual agreements; however, we may not have contractual arrangements with the party in question and/or such provisions may not be effective. If these provisions prove to be ineffective, we may not be able to achieve our objectives of generating significant revenues from crop productivity products sales and royalties from our seed technologies. Furthermore, regardless of any resort to legal action, a dispute with an end-customer, a licensee or collaborator over intellectual property rights may damage our relationship with that licensee or collaborator and may also harm our reputation in the industry.

We depend on our key personnel and research collaborators, and we may be adversely affected if we are unable to attract and retain qualified scientific and business personnel.

Our business is dependent on our ability to recruit and maintain highly skilled and educated individuals through direct employment or collaboration arrangements, with expertise in a range of disciplines, including biology, chemistry, plant genetics, agronomics, mathematics programming and other subjects relevant to our business. Our ability to recruit such a work force depends in part on our ability to maintain our market leadership in agricultural biotech industry in Argentina and Latin America. Maintaining our ability to attract highly-skilled workers and leading scientific institutions depends in part on our ability to maintain a strong technology platform and state-of-the-art facilities, as well as our ability to consistently and successfully commercialize our technology. There can be no assurance that we will be able to maintain leading scientific capabilities or continue to successfully maintain advanced technology in the market.

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Our success is also dependent to a significant degree upon the technical skills and continued service of certain members of our management team, in particular those of our CEO, Dr. Federico Trucco. Dr. Trucco has occupied several positions at Bioceres since 2005 and has vast experience and knowledge of our business, strategy and technologies. Furthermore, he has developed and maintained strong relationships with our original shareholders. The cessation of Dr. Trucco’s employment for any reason could have a material and negative impact on us. In addition, the number of qualified and highly educated personnel in Argentina, where most of our operations are located, is limited and competition for the services of such persons may be intense. Our inability to secure, retain or find replacements for key management and technical personnel could adversely affect our business and could have a material adverse effect on our business, operating results, financial condition and growth prospects.

We do not enter into non-compete agreements with our employees, and therefore we may be unable to prevent our competitors from benefiting from the expertise of our former employees.

We do not enter into non-compete agreements with our employees, which prevents us from limiting our key employees from joining our competitors or competing directly against us. As a result, we may be unable to prevent our competitors from benefiting from the expertise of such employees. Direct competition by a former employee could materially adversely affect our business, results of operations and ability to capitalize on our proprietary information.

We may be adversely affected by global economic conditions.

Our ability to continue to develop and grow our business, build proprietary distribution channels and generate revenues from product sales and royalty payments may be adversely affected by global economic conditions in the future, including instability in credit markets, declining consumer and business confidence, fluctuating commodity prices and interest rates, volatile exchange rates and other challenges that could affect the global economy such as the changing financial regulatory environment. For example, our customers and licensees may experience deterioration of their businesses, cash flow shortages or difficulties obtaining financing, which could adversely affect the demand for our technologies, products and services. In addition, our earnings may be adversely affected by fluctuations in the price of certain commodities, such as grains, milk, meat, biofuels and biomaterials. If commodity prices are negatively impacted, the value of our products could be directly and negatively impacted. Additionally, growers’ incomes have historically been negatively affected by commodity prices. As a result, fluctuations in commodity prices could have an impact on growers’ purchasing decisions and negatively affect their ability and decisions to purchase our seeds or products that incorporate our proprietary technology. We cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions.

We plan to selectively partner, in-license or acquire key enabling technologies and businesses across our value chain that we believe will keep us on the cutting edge of our industry. We may not be able to identify appropriate targets or make acquisitions under satisfactory conditions, in particular, satisfactory price conditions. In addition, we may be unable to obtain the financing for these acquisitions under other purposes in the context of existing operations. If we acquire businesses with promising markets or technologies, we may not be able to realize the benefit of acquiring such businesses if we are unable to successfully integrate them with our existing operations and company culture. We may encounter numerous difficulties in developing manufacturing and marketing any new products resulting from a strategic alliance or acquisition that delay or prevent us from realizing their expected benefits or enhancing our business. We cannot assure that, following any such acquisition, we will achieve the expected synergies to justify the transaction, which could have a material adverse effect on our business, financial conditions, earnings and prospects.

The effects of COVID-19 and certain measures adopted by governments to mitigate the effects of the pandemic may negatively affect us, and we cannot accurately predict its ultimate impact on our results and operations.

In December 2019, a new disease was discovered from the coronavirus strain (SARS-COV-2) in the city of Wuhan in China, which causes a severe acute respiratory syndrome, and which was globally given the name COVID-19. Since then, COVID-19 has spread throughout the world. On March 11, 2020, the World Health Organization declared the existence of a global pandemic.

In response to the effects of the pandemic, several countries have taken extraordinary measures to contain the spread of the virus, including imposing restrictions on travel and closing borders, closing businesses deemed non-essential, instructing residents to practice isolation and/or social distancing, mandatory quarantines, and similar actions. The ongoing pandemic and these extraordinary government measures are affecting global economic activity.

The Argentine government has taken multiple measures in response to the spread of COVID-19 in Argentina, including a mandatory nationwide preventative social isolation that began on March 19, 2020 and has been extended several times. The Argentine government also required the mandatory closure of non-essential businesses. As of the date of this report, the Argentine government has gradually

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relaxed certain measures previously adopted, and it has indicated that it will continue to relax the restrictions and expand the number of authorized activities during the period of October 1, 2021 to December 31, 2021. For example, now employees are allowed to attend the workplace in person, and occupancy restrictions for economic, industrial, and commercial activities in closed spaces, among others, are eliminated. However, these activities must be carried out in compliance with protocols approved by the relevant health authority. There are some local governments that have not yet implemented the measures established by the Argentine government and others that have begun to relax such restrictions. In order to mitigate the economic impact of COVID-19 and of the mandatory closure of non-essential businesses, the Argentine government adopted social, monetary, and fiscal aid measures, including financial aid for the payment of salaries to workers affected by the mandatory isolation; social security contribution exemptions for sectors critically affected by COVID-19; setting maximum prices for essential products; and payment of a stimulus income to vulnerable families from March to August 2020. Similarly, the Central Bank of the Argentine Republic (the “Argentine Central Bank”) took a series of measures in order to mitigate the impact on the economy, including incentives for the extension of working capital credit lines by financial institutions to small and medium enterprises. These measures have not prevented an economic recession in Argentina, which could be extended or deepened, particularly if current conditions extend over time and if Argentina’s main trading partners are simultaneously facing an economic recession. Additionally, to the extent that the Argentine government had limited resources to support Argentina’s economy since the pandemic has hit Argentina at a time when it was already struggling to emerge from a recession and foreign exchange crisis, all such financial aid extended by the Argentine government has been financed through expansion of the monetary base, which has resulted in additional inflation and devaluation of the Argentine peso. In addition to the stay-at-home orders and closure of business and premises considerer non-essential, some other measures adopted by the Argentine government could negatively affect the demand for our products, including the prohibition on layoffs without cause and employee suspensions, and the price fixing, among others. Our operations, which involve agricultural production and commercialization activities, have been exempted from the order. Nonetheless, we cannot predict whether our operations will continue to be exempted.

In Brazil, the federal, state and municipal governments and other authorities have enacted a number of rules to address the potential impacts of the COVID-19 outbreak. Considering the possible outcomes thereof, we may be exposed to additional risks, which include:

(ii)in March 2020, the Brazilian government created a Crisis Committee to Monitor the Impacts of COVID-19 in Brazil. Since then, it has announced several measures (tax or otherwise) to address the effects of COVID-19 in Brazil. Likewise, the Brazilian Congress is currently discussing several measures to increase the Brazilian government’s revenues, such as imposing new taxes, revoking tax benefits and increasing the rates of current taxes; and

These new rules, if approved, may have a material adverse impact on our results of operations. It is also possible that our commercial contracts, could be affected by adverse impacts derived from the COVID-19 pandemic, since the parties thereto may not comply with their contractual obligations. As the COVID-19 pandemic will most likely be considered as an act of God or force majeure event by Brazilian courts, parties may justify their nonperformance and request (i) termination without penalties; (ii) adjustment and/or release of contractual obligations; (iii) adjustment and/or release of the effects of arrears; and/or (iv) adjustment and/or release of penalties for breach of contract, which, in any case, may cause a negative impact on our results of operations. Additionally, our operations may be adversely affected by the wider macroeconomic effect of the ongoing COVID-19 pandemic. Currently, it is expected there be a recession or diminishing growth in several countries, including Brazil, due to the freeze of the economic activities. Any negative effect on the economy, particularly in the countries that we operate, may decrease incomes and the demand for our products. Moreover, Brazil is experiencing political disagreements among governments and other authorities in connection with the measures that have been adopted and the ones that might be implemented. In March 2021, after a second wave of the pandemic, Brazil has become the country with the current highest daily death toll in the world. The Brazilian government cannot confirm if the vaccination will be concluded in 2021 and when and whether the pandemic will be under control. Therefore, these institutional conflicts since the beginning of COVID-19 as well as the potential adoption of measures against WHO’s recommendations may lead to political turmoil and, ultimately, civil riots and impeachment process, which all may potentially negatively impact our businesses and operations in Brazil.

While it is not possible to predict the future impact of COVID-19 and the effect the measures adopted by governments on the global economy, COVID-19 has already significantly affected global economic conditions and is likely to continue to do so for the remainder of 2021 and beyond. Both COVID-19 and governments’ response may affect our financial position and results of operations.

We are constantly monitoring the impact of COVID-19 on us. The ultimate impact of COVID-19 on our business, results of operations, and financial position remains highly uncertain and will depend on future events beyond our control, including the intensity and duration of COVID-19, and government measures taken to contain the virus or mitigate the economic impact.

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Our crop productivity business is highly seasonal and affected by factors beyond our control, which may cause our sales and operating results to fluctuate significantly.

The sale of our products is dependent upon planting and growing seasons, which vary from year to year, and are expected to result in both highly seasonal patterns and substantial fluctuations in quarterly sales and profitability. Weather conditions and natural disasters, such as heavy rains, hail, floods, freezing conditions, windstorms, drought or fire, also affect decisions by our distributors, direct customers and end users about the types and amounts of products to use and the timing of harvesting and planting. According to the Buenos Aires Grain Exchange, the average national yields of soybean and corn as of April 18, 2018 had registered decreases as a result of the drought. From December 2017 to March 2018, Argentina experienced a significant drought, which impacted crop yields. During 2020, Argentina suffered one of the worst droughts of the last century. As a result, fires have affected more than 120.000 hectares in 11 provinces which include some of the most productive central and northern regions of Argentina.

As we increase our sales in our current markets and expand into new markets in different geographies, it is possible that we may experience different seasonality patterns in our business. Disruptions may lead to delays in harvesting or planting by growers which can result in pushing orders to a future quarter, which could negatively affect results for the quarter in question and cause fluctuations in our operating results. Seasonal variations may be especially pronounced because our product lines are mainly sold in the Southern Hemisphere. Our seeds, biologicals and other crop input products sales tend to be comparatively low during the third and fourth quarters of our fiscal year, as summer crops related sales peak in the second quarter. However, planting and growing seasons, climatic conditions and other variables on which sales of our products are dependent vary from year to year and quarter to quarter. As a result, we may experience substantial fluctuations in quarterly sales.

The overall level of seasonality in our business is difficult to evaluate as a result of our relatively early stage of development, our limited number of commercialized products, our expansion into new geographical territories, the introduction of new products and the timing of introductions of new products. It is possible that our business may be more seasonal or experience seasonality in different periods than anticipated. Other factors may also contribute to the unpredictability of our operating results, including the size and timing of significant distributor transactions, the delay or deferral of use of our commercial technology or products and the fiscal or quarterly budget cycles of our direct customers, distributors, licensees and end users. Customers may purchase large quantities of our products in a particular quarter to store and use over long periods of time or time their purchases to manage their inventories, which may cause significant fluctuations in our operating results for a particular quarter or year.

Our results of operations from our crop productivity products may vary significantly from period to period due to circumstances beyond our control.

The crop productivity market is affected by various factors that make their operations relatively unpredictable from period to period. The development of our products may be adversely affected by circumstances beyond our control. For our crop productivity products, factors beyond our control include weather and climatic variations, such as droughts or heat stress, or other factors we are unable to identify. For example, if there were a prolonged or permanent disruption to the electricity, climate control or water supply operating systems in our greenhouses or laboratories, the plants on which we are testing our licensed seed traits and the samples we store in freezers, both of which are essential to our development activities, would be severely damaged or destroyed, adversely affecting our development activities and thereby our business and results of operations. We have experienced crop failures in the past for various reasons, which have resulted in re-start field trials and delays in achieving expected results.

The crop productivity market is also vulnerable to crop disease and to pests, which may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied, climatic conditions and the risks associated with ongoing global climate change. The costs to control disease and other infestations vary depending on the severity of the damage and the extent of the plantings affected. Moreover, there can be no assurance that available technologies to control such infestations will continue to be effective. These infestations can also increase costs, decrease revenues and lead to additional charges to earnings, which may have a material adverse effect on our business, financial position and results of operations.

Any development or product failure we may experience or any inability to economically source necessary materials could result in increased cost of development of our crop productivity products, which may negatively impact our business and results of operations.

Certain estimates of market opportunity included in this report are based on assumptions that are inherently uncertain and subject to risks and uncertainties that could have a material adverse effect on our business, operating results, and financial condition.

The information regarding our market opportunities, including for HB4 Soy and HB4 Wheat, has been prepared by management and our assumptions underlying our statements about these market opportunities are inherently uncertain and are subject to significant business, economic, regulatory and competitive risks and other uncertainties that could cause actual results to differ materially from those set forth in the market opportunity. No independent third party has compiled, examined, or performed any procedures with respect

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to our potential market opportunities, nor has any third party expressed any opinion or any other form of assurance on the information or its achievability by us, and no independent third party has assumed responsibility for, or claimed any association with, the information we have included herein regarding such potential market opportunities. The information regarding market opportunities is not fact and should not be relied upon as being indicative of future results. For example, we extrapolated from publicly available data for the past ten years to estimate soy and wheat production area in order to in turn estimate the size of HB4 Soy and HB4 Wheat-related market opportunities. Changes in economic, climate, regulatory and other factors could significantly reduce the target area and our market opportunity. We also made assumptions regarding the number of bags of soybeans and wheat seeds needed to plant one hectare as well as other information, which in each case may prove to be materially incorrect. Furthermore, we may not be able to take advantage of these market opportunities even if they are available. Our failure to take advantage of market opportunities or to correctly size our market opportunity could have a material adverse effect on our ability to take advantage of our investments in licensed technologies, including for HB4 Soy and HB4 Wheat, and therefore on our business, operating results and financial condition.

Consumer and government resistance to GM crops may negatively affect our public image and reduce sales of seeds or other products containing our licensed seed traits.

We are active in the field of biotech development of seeds, including GM seeds, and the successful commercialization of our products depends, in part, on public acceptance of genetically engineered agricultural products. Some consumers may reject foods made from GM seeds and production of certain GM crops is prohibited in certain countries due to food safety and environmental concerns. Any increase in negative perceptions of GM crops, or more restrictive government regulations in response thereto, could have a negative effect on our business and may delay or impair the development and commercialization of some of our products.

The commercial success of our products may be adversely affected by claims that biotechnology plant products are unsafe for consumption or use, pose risks of damage to the environment, or create legal, social and ethical dilemmas.

The high public profile of biotechnology in food production and food products and public attitudes about the safety and environmental hazards of, and ethical concerns over, genetic research and biotechnology plant products could negatively affect our public image and results of operations.

The prohibition of the production of certain GM crops in select countries and the current resistance from consumer groups to GM crops not only limits our access to such markets but also has the potential of spreading to and influencing the acceptance of products developed through biotechnology in other regions of the world and may also influence regulators in other countries to limit or ban production of GM crops, which could limit the commercial opportunities to exploit biotechnology. For example, in the United States, no product may be labelled as “organic” if it contains any genetically modified organisms (“GMO”). Additionally, some states in the United States are considering, and one state has passed a law relating to, mandatory labelling of GMO foods, which may carry a negative connotation for consumers and which could make it difficult and expensive for companies to use ingredients from GM crops and distribute products in compliance with the labelling requirements, each of which could in turn have an adverse impact on the sale of our licensed GM seeds. In Argentina, a class action suit has been initiated against the national government and certain biotechnology companies that are the owners of regulatory approvals of GMO, including the Parent, requesting, among other changes, the mandatory labelling of GM foods and environmental protection of land use. As of the date of this report, the plaintiffs’ request for an injunction against GMO approvals was rejected by the Federal Court of Appeals and an extraordinary appeal at the Argentine Supreme Court was filed, the practicable chances of success of which are low.

GM crops are grown principally in the United States, Brazil and Argentina, where there are fewer restrictions on the production of GM crops. If these or other countries where GM crops are grown or where we engage in business activities enact laws or regulations that ban the production of such crops or make regulations more stringent, we could experience a longer product development cycle for our products and may be forced to abandon projects related to certain crops or geographies, both of which would negatively affect our business and results of operations. Public attitudes towards ownership of genetic material and potential changes to laws regulating such ownership could weaken our intellectual property rights with respect to our genetic material and discourage R&D partners from supporting, developing or commercializing our products and technologies. Furthermore, any future labeling requirements could heighten these concerns and make consumers less likely to purchase food products containing gene-edited ingredients.

Competition in crop productivity products is intense and requires continuous technological development.

We currently face significant direct and indirect competition in the markets in which we operate. The markets for crop productivity products are intensely competitive and rapidly changing. Many companies engage in the development of crop productivity products, and speed in commercializing a new product can be a significant competitive advantage.

As an example, some of our competitors engage in research associated with discovery and therefore have R&D budgets allocated for crop productivity products that are more significant than our own R&D budget and that cover more activities than those in which we

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engage. In addition, former collaborators, by virtue of having had access to our proprietary technology, may utilize this insight for their own development efforts.

In most segments of the crop productivity markets, the number of products available to end-consumers is steadily increasing as new products are introduced. We may be unable to compete successfully against our current and future competitors, which may result in price reductions, reduced margins and the inability to achieve market acceptance for products containing our licensed seed traits and technology. In addition, many of our competitors have substantially greater financial, marketing, sales, distribution and technical resources than us and some of our competitors have more experience in R&D, regulatory matters, manufacturing and marketing. We anticipate increased competition in the future as new companies enter the market and new technologies become available. Programs to improve genetics and crop protection chemicals are generally concentrated within a relatively small number of large companies, while non-genetic approaches are underway with broader set of companies. Mergers and acquisitions in the plant science, specialty food ingredient and agricultural biotechnology seed and chemical industries may result in even more resources being concentrated among a smaller number of our competitors.

Our Parent’s technology may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our competitors, which will prevent or limit our ability to generate revenues from the commercialization of our licensed seed traits and technology. At the same time, the expiration of patents covering existing products reduces the barriers to entry for competitors. Our ability to compete effectively and to achieve commercial success depends, in part, on our ability to control manufacturing and marketing costs; effectively price and market our products, successfully develop an effective marketing program and an efficient supply chain, develop new products with properties attractive to food manufacturers or growers and commercialize our products quickly without incurring major regulatory costs. We may not be successful in achieving these factors and any such failure may adversely affect our business, results of operations and financial condition.

We register and market soybean varieties with glyphosate tolerance technology, meaning those that have been genetically modified to tolerate herbicides based on glyphosate.

Changes in laws and regulations to which we are subject, or to which we may become subject in the future, may materially increase our costs of operation, decrease our operating revenues and disrupt our business.

Laws and regulatory standards and procedures that impact our business are continuously changing. Responding to these changes and meeting existing and new requirements may be costly and burdensome. Changes in laws and regulations may occur that could:

Any of these events could have a material adverse effect on our business, results of operations and financial condition. We believe we currently are in compliance with regulations related to growing GM crops in Argentina and other countries; however, if these regulations change, our validation trials and compliance efforts may become costly and burdensome.

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Any changes in regulation in countries where GM crops are grown or exported into could result in our collaborators, other third parties or us being unable or unwilling to develop, commercialize or sell products that incorporate our licensed seed traits or technology. In addition, we rely on various forms of intellectual property protection. Legislation and jurisprudence on intellectual property in the key markets where we seek protection, such as the United States, Brazil and Argentina, is evolving and changes in laws could affect our ability to obtain or maintain intellectual property protection for our products. Any changes to these existing laws and regulations may materially increase our costs, decrease our revenues and disrupt our business.

Our indebtedness could adversely affect our financial condition.

As of June 30, 2021, our total indebtedness was US$173.4 million, of which US$76.8 million matures in the fiscal year ending June 30, 2022. We may incur additional indebtedness in the future. Our indebtedness could have important adverse consequences, including:

The occurrence of any of the above may negatively impact our business and results of operations. If any of our indebtedness gets accelerated as a result of our failure to meet certain covenants, the risks described above could intensify. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources —Indebtedness”.

In addition, our Argentine subsidiaries are temporarily subject to certain restrictions on payments of foreign indebtedness through the FX Market. Therefore, our Argentine subsidiaries may be impeded from making payments under foreign indebtedness or the costs of performing such payments could be substantially higher, all of which could have an adverse effect on our business and results of operations. See “Argentina—Argentine exchange controls and restrictions limit access to the foreign exchange market (the “FX Market”) to make payments and distributions from our Argentine subsidiaries and receive the proceeds of any sale of our assets in Argentina.”

Price increases and shortages of raw materials could adversely affect our results of operations.

Our results of operations may be affected by the availability and pricing of raw materials, principally materials needed to design our technologies, such as raw glycerin. Factors such as changes in the global or regional levels of supply and demand, weather conditions, seasonal fluctuations, shortages or interruptions, changes in global climates and government regulations could substantially impact the price of raw materials. To the extent we are unable to pass on increases in raw materials and energy prices to our customers, a substantial increase in raw material prices or a continued interruption in supply could have a material adverse effect on our business, financial condition and results of operations.

The overall agricultural industry is susceptible to commodity price changes and we, along with our food manufacturing customers and grower customers, are exposed to market risks from changes in commodity prices.

Changes in the prices of certain commodity products could result in higher overall cost along the agricultural supply chain, which may negatively affect our ability to commercialize our products. We will be susceptible to changes in costs in the agricultural industry as a result of factors beyond our control, such as general economic conditions, seasonal fluctuations, weather conditions, demand, food safety concerns, product recalls and government regulations. As a result, we may not be able to anticipate or react to changing costs by adjusting our practices, which could cause our operating results to deteriorate.

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We may be required to pay substantial damages as a result of product liability claims for which we do not have insurance.

Product liability claims are a commercial risk for our business, particularly as we are involved in the sale of commercial technology and the supply of biotechnological products, some of which may be shown in the future to be harmful to humans and the environment. We may be held liable if any product we develop is found unsuitable during marketing, sale or consumption. We do not currently have insurance coverage for such claims. Courts have levied substantial damages in the United States and elsewhere against a number of companies in the agriculture industry in past years based upon claims for injuries allegedly caused by the use of their products.

In addition, we may face product liability and similar claims involving cross-pollination of crops, which recently has affected other companies in our industry operating in the United States, and cross-contamination of GMO and non-GMO ingredients. In Argentina, there are no precedents for product liability cases in the agricultural industry related to transgenic or biotechnology products; however, there has been at least one product liability case related to the use of pesticides.

There is a possibility that a product liability case could be filed against us in Argentina, in which case damages may be substantial albeit potentially smaller than those typically awarded in the United States. Product liability claims against us, our joint ventures or third-party licensees selling products that contain our licensed seed traits or technology or allegations of product liability relating to seeds or other products containing seed traits or technology developed by us could damage our reputation, harm our relationships with our collaborators and other business counterparties and materially and adversely affect our business, results of operations, financial condition and prospects.

Our operations are subject to various health and environmental risks associated with our use, handling and disposal of potentially toxic materials.

We are subject to numerous federal, state, local and foreign environmental, health and safety laws and regulations, including those governing laboratory procedures, the handling, use, storage, treatment, manufacture and disposal of hazardous materials and wastes, discharge of pollutants into the environment and human health and safety matters. As part of our technology sourcing and product development activities, we develop GMOs by inserting new genes into the genomes of certain plants and bacteria. Though we introduce these genes in order to improve plant traits, we cannot always predict the effect that these genes may have on the organism. In some cases, the genes may render the organism poisonous or toxic, or they may cause the organism to develop other dangerous characteristics that could harm the organism’s surrounding environment. Furthermore, there is a risk that, when testing GMOs, the seeds or strains of these organisms may escape the laboratory, greenhouse, industrial facility or field in which they are being tested and contaminate nearby areas. Poisonous or toxic organisms may therefore be inadvertently introduced into the environment or possibly enter the food production system, harming the people and animals who come in contact with them. Our crop protection products, which include Rizoderma, adjutants, therapies, herbicides, fungicides and insecticides, among others, bear similar risks in the development stage.

We cannot eliminate the risk of contamination or discharge and any resultant injury from these materials. If these risks were to materialize, we could be subject to fines, liability, reputational harm or otherwise adverse effects on our business. We may be sued for any injury or contamination that results from our use or the use by third parties of these materials, or may otherwise be required to remedy the contamination, and our liability may exceed any insurance coverage and our total assets. Furthermore, compliance with environmental, health and safety laws and regulations may be expensive and may impair our R&D efforts. If we fail to comply with these requirements, we could incur substantial costs and liabilities, including civil or criminal fines and penalties, clean-up costs or capital expenditures for control equipment or operational changes necessary to achieve and maintain compliance In addition, we cannot predict the impact on our business of new or amended environmental, health and safety laws or regulations or any changes in the way existing and future laws and regulations are interpreted and enforced. These current or future laws and regulations may impair our research, development or production efforts.

The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business.

We are required to comply with various regulatory and reporting requirements, including those required by the SEC. Complying with these reporting and regulatory requirements will be time consuming, resulting in increased costs to us or other adverse consequences.

As a public company, we are subject to the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act. These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. We expect to implement additional procedures and processes for the purpose of addressing the applicable standards and

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requirements for public companies. These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

As an “emerging growth company,” as defined in the JOBS Act, we may take advantage of certain temporary exemptions from various reporting requirements including, but not limited to, an exemption from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the rules and regulations of the SEC thereunder. These exemptions will cease to apply by no later than the last day of our fiscal year following the fifth anniversary of the completion of Union’s initial public offering (the “IPO”)  (or under certain other circumstances) and we expect to incur additional expenses and devote increased management effort toward ensuring compliance with the additional reporting requirements that will apply when we cease to be an “emerging growth company.” We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs

We may require additional financing in the future and may not be able to obtain such financing on favorable terms, if at all, which could force us to delay, reduce or terminate some of our activities.

The process of developing and commercializing products is expensive, lengthy and risky and we expect to continue investing in our R&D services to identify new potential products for development. We may require additional capital to fund our technology sourcing and product development projects and to provide working capital to fund other aspects of our business, including changes in our business strategy or the occurrence of unanticipated events.

We may seek to issue additional equity securities, which could result in dilution to our existing shareholders, or raise additional debt financing, which could subject us to restrictive covenants that limit our operating flexibility and require us to comply with certain financial ratios. Alternatively, we may not be able to raise sufficient additional funds on terms that are favorable to us, if at all. If we fail to raise the funds we require, our ability to fund our operations, take advantage of strategic opportunities, develop and commercialize products or technologies, or otherwise respond to competitive pressures could be significantly limited. In such an event, we may be forced to delay or terminate our development initiatives or the commercialization of our technology and products, curtail operations or grant licenses to our technology on terms that are not favorable to us. If adequate funds are not available, we may not be able to successfully execute our business strategy or continue our business.

Development and commercialization of our products may incur scrutiny under the Convention on Biological Diversity Treaty.

The Convention is an international treaty that was adopted at the Earth Summit in Rio de Janeiro, Brazil in 1992. The treaty provides that if a company uses genetic resources, such as an indigenous plant, from a participating country to develop a product, then such company must obtain the prior informed consent of the participating country and owes fair and equitable compensation to the participating country. Although the United States is not a participating country, most countries where we currently obtain or may obtain genetic resources in the future, including Argentina, have ratified the treaty and are currently participants in the Convention. We may fall under scrutiny of the Convention with respect to the development or commercialization of any of our products derived from genetic resources originating from any of the countries that are participants in the Convention. There can be no assurance that the government of a participating country will not assert that it is entitled to fair and equitable compensation from us. Such compensation, if demanded, may make commercialization of our products impracticable.

Our business strategy may change, and the successful implementation of our business plan is uncertain.

We currently generate a significant portion of our revenue from the sale of crop protection and nutrition products. We expect that, following regulatory approval and successful commercialization of our licensed technologies, including HB4, an increasing portion of our revenues will be generated by sales of seed and integrated products through our proprietary commercial channels and third-party licensees, with incremental income expected to be generated by the joint ventures in which we participate. We face numerous challenges to completing the various steps necessary for the commercialization of our products and there can be no guarantee that we will be able to successfully commercialize our licensed technologies. As a result of our continuous analyses of our crop productivity solutions, we may decide to make substantial changes in our business plan and operations. Changes to our business plan could result in material delays to the commercialization of our products.

Our failure to accurately forecast and manage inventory could result in an unexpected shortfall or surplus of products which could harm our business.

We are required to produce inventories of certain of our products (mainly seeds and biologicals) and we monitor our inventory levels based on our own projections of future demand. Because of the significant time it takes to produce commercial quantities of seeds, production decisions must be made well in advance of sales. An inaccurate forecast of demand for any seed variety can result in the unavailability of seeds in high demand. Such unavailability may depress sales volumes and adversely affect customer relationships.

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Conversely, an inaccurate forecast could also result in an over-supply of seeds which may increase costs, negatively impact cash flow, reduce the quality of inventory and ultimately create write-offs of inventory, which could have a material adverse effect on our business, results of operations and financial condition.

Disruption to our IT and operating system could adversely affect our reputation and have a material adverse effect on our business and results of operations.

Disruption or failure of our IT system due to technical reasons, natural disaster or other unanticipated catastrophic events, including power interruptions, storms, fires, floods, earthquakes, terrorist attacks and wars could significantly impair our ability to deliver data related to our projects to our collaborators on schedule and materially and adversely affect our relationships with our collaborators, our business and our results of operations. If our existing or future IT system does not function properly, or if the IT system proves incompatible with our new technologies, we could experience interruptions in data transmissions and slow response times, preventing us from completing routine research and business activities. Furthermore, we can provide no assurance that our current IT system is fully protected against third-party intrusions, viruses, hacker attacks, information or data theft or other similar threats.

Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cyber-security.

Despite the continuous implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism war telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber-intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, damage to our reputation, and the further development of our product candidates could be delayed.

Labor unions can request, and have requested, the unionization of some of our employees.

In December 2016 and March 2017, the Argentine Trade Union of Truck Drivers (Sindicato de Choferes de Camiones) (“SCC”) and the Argentine Union of Rural Workers and Stevedores (Unión Argentina de Trabajadores Rurales y Estibadores) (“UATRE”), respectively requested the unionization of some employees of Rizobacter. With respect to the former, the SCC requested to unionize employees involved in logistics and operation of forklifts. UATRE requested to unionize workers engaged in the handling and storage of grain related to our seed treatment process undertaken seasonally. After negotiations, both SCC and UATRE came to an agreement with Rizobacter wherein Rizobacter agreed to hire companies to carry out the operations covered by each union. Each company agreed to indemnify Rizobacter in relation to any subsequent claims by the workers registered with the SCC or the UATRE, as the case may be, without direct cause to Rizobacter.

If new union disputes arise, they may be time consuming and distracting to management. The occurrence of a union dispute could have a material and adverse effect on our costs and business, results of operations and financial condition.

We rely on third parties to grow our seeds. If these parties do not grow our seeds at a satisfactory quality, in a timely manner, in sufficient quantities or at an acceptable cost, our commercialization efforts could be delayed or otherwise negatively impacted.

We rely on affiliated and unaffiliated growers to grow the majority of our proprietary seed and to sell it to us at negotiated prices each year. Our current dependence upon others for the production of our seeds may adversely affect our ability to commercialize any products on a timely and competitive basis. If our growers decline to a significant degree to plant the acreage on which we rely, and if we cannot find other growers to plant the lost acreage, our inventory of seed could be insufficient to satisfy the needs of our customers. Furthermore, growers may refuse to grow our seeds for any reason, including deterioration in our business relationship or the existence of more favorable terms with other companies. For example, if a particular crop is paying a materially higher price than has been paid in the past, growers may decide to not grow our seeds in favor of receiving a higher return from an alternative crop planted on the same acreage. If third-party growers decline to grow our seeds or if they are unable to grow our seeds at acceptable quality levels, our business, results of operations and financial condition could materially decline.

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We are subject to anti-corruption and anti-money laundering laws with respect to both our domestic and international operations, and non-compliance with such laws can subject us to criminal and civil liability and harm our business.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. domestic bribery statute contained in 18 U.S.C.§201, the U.S. Travel Act, the USA PATRIOT Act, Argentine Law No. 27,401, as amended, and possibly other anti-bribery and anti-money laundering laws in countries in which we conduct activities. Anti-corruption laws are interpreted broadly and prohibit us and our collaborators from authorizing, offering, or directly or indirectly providing improper payments or benefits to recipients in the public or private sector.

We or our collaborators may have direct and indirect interactions with government agencies and state-affiliated entities and universities in the course of our business. We may also have certain matters come before public international organizations such as the United Nations. We use third-party collaborators, joint venture and strategic partners, law firms, and other representatives for regulatory compliance, patent registration, lobbying, deregulation advocacy, field testing, and other purposes in a variety of countries, including those that are known to present a high corruption risk such as India, China, and Latin American countries. We can be held liable for the corrupt or other illegal activities of these third-party collaborators, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities. In addition, although we have implemented policies and procedures to ensure compliance with anti-corruption and related laws, there can be no assurance that all of our employees, representatives, contractors, partners, or agents will comply with these laws at all times.

Noncompliance with these laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other or injunctions, suspension and debarment from contracting with certain governments or other persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences. If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, results of operations, and financial condition could be materially harmed. In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. Enforcement actions and sanctions could further harm our business, results of operations, and financial condition.

Risks Related to Our Intellectual Property

Agreements with our collaborators and third parties may not adequately prevent disclosure of trade secrets, know-how and other proprietary information, which could materially adversely affect our technology and harm our business.

We rely on a combination of intellectual property laws and other agreements with our collaborators and third parties to protect and otherwise seek to control access to, and distribution of, our proprietary information. These measures may not prevent disclosure, infringement or misappropriation of our confidential information. Our confidentiality and nondisclosure agreements or covenants may not be enforceable under applicable law and, even if they are enforceable, may be breached, and we may not have adequate remedies for such a breach that would effectively prevent the further dissemination of our confidential information or direct competition with us by a joint venture partner. We also have limited control over the protection of trade secrets used by our collaborators and could lose future trade secret protection if any unauthorized disclosure of such information occurs. Enforcement of any claim that a party illegally disclosed confidential information or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, others may independently discover our trade secrets and proprietary information, and in such cases, we could not assert any trade secret rights against such parties. Laws regarding trade secret rights in certain markets where we operate may afford little or no protection of our trade secrets. If any of our trade secrets were to be disclosed to or independently developed by a competitor, or if we otherwise were to lose protection for our trade secrets or proprietary know-how, the value of this information may be greatly reduced and our business and competitive position could be harmed. Moreover, our collaborators may allege that we have disclosed their trade secrets or confidential information.

We may not be able to adequately protect our intellectual property rights throughout the world.

Our commercial success depends in part on our ability to obtain intellectual property protection and/or trade secrets protection for the technologies we develop and use. Competitors may use our technologies in jurisdictions where we have not obtained intellectual property protection to develop their own products, and we may be unable to prevent such competitors from importing those infringing products into territories where we have intellectual property protection but enforcement is not as strong due to the exhaustion of rights. These products may compete with our product candidates and our licensed patents and other intellectual property rights may not be effective or sufficient to prevent them from competing in those jurisdictions. In addition, competitors could use our licensed patent disclosures and/or reverse engineer our trade-secret-protected products in order to produce competing products. Moreover, growers or others in the chain of commerce may raise legal challenges against our intellectual property rights or may infringe upon our intellectual property rights, including through means that may be difficult to prevent or detect.

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In Argentina, legislation in respect of breeders’ rights includes a concept of a “farmer’s privilege,” which allows growers to use seeds obtained from their own harvests to be replanted on their own farm. According to the National Seed Institute of Argentina (Instituto Nacional de Semillas), the reserves of seeds kept for personal use has grown significantly in recent years, which may increase the likelihood that growers illegally claiming the privilege may use and/or sell GM seeds into the market without paying royalties owed to us.

The legal systems of certain countries, including China, where we have sublicensed patent applications, have not historically favored the enforcement of patents or other intellectual property rights, which could hinder us from preventing the infringement of our licensed patents or other intellectual property rights and result in substantial risks to us. Proceedings to enforce our licensed patent rights in the United States or foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our licensed patents at risk of being invalidated or interpreted narrowly and our sublicensed patent applications at risk of not issuing and could provoke third parties to assert patent infringement or other claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license from third parties.

Changes in Argentine and U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.

As is the case with other biotech companies, our success is heavily dependent on intellectual property, including patents. Obtaining and enforcing biotech patents involves technological and legal complexity, and is costly, time consuming, and inherently uncertain. In this regard, the Argentine Patent Office (Instituto Nacional de Propiedad Intelectual) issued Regulation 283/15 with new guidelines for examining biotech inventions. These guidelines seriously restrict the patentability of several categories of inventions in the agricultural field. This restriction is already being followed in the practice of the Argentine Patent Office.

In September 2016, the Argentine Patent Office issued Argentine Regulation 56/16, under which the Argentine Patent Office will deem that any patent application whose examination had not begun by October 15, 2016 satisfies the substantive requirements of patentability (novelty, non-obviousness and industrial application); provided that a patent has been granted abroad for the same invention by a foreign patent office carrying out substantive examination in a country whose patent law has the same substantive requirements as Argentine law. This can result in prosecution times that are substantially shorter, and similar to those of the fastest jurisdictions. In particular, the patent office has applied this regulation to biotech cases as long as they are directed to matter that is not affected by the guidelines.

In addition, the U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. In a recent ruling (in re “Monsanto Technology LLC c/ Instituto Nacional de la Propiedad Industrial s/ Denegatoria de Patente”, case number CCF 8044/2007), Tribunal III of the Civil and Commercial Federal Court of Appeals of the City of Buenos Aires confirmed, by revoking a decision of a lower court, the rejection of a biotechnological patent application by the Argentine Patent Office, with the understanding that the invention should be protected as a plant variety protection (“PVP”) and not under a patent (the patent application was for a recombinant DNA molecule and a cell transformed by such molecule). Lack of inventive activity and non-patentable matters are also mentioned as grounds in this precedent. The Court of Appeal’s decision was appealed to the court of last resort, but the Argentine Supreme Court refused to resolve the case based on the grounds that the issue was moot as the statutory term of the patent under consideration in the case had already expired. The decision of the Court of Appeals has, therefore, become a negative precedent that may adversely affect patentability of the technologies we develop in the future. Depending on decisions by the Argentine and U.S. Congresses, the federal courts in each country, the U.S. Patent and Trademark Office and the Argentine Patent Office, as well as the relevant authorities in other countries in which we hold licensed patents, the laws and regulations governing patents could change in unpredictable ways that may weaken or undermine our ability to obtain new patents or to enforce our existing licensed patents and patents we might obtain in the future. During recent years, certain sectors of the Argentine agricultural industry have been requesting that the Argentine PVP Law No. 20,247 (the “Argentine PVP Law”) is amended.

If we or one of our collaborators or licensees are sued for infringing the intellectual property rights of a third party, such litigation could be costly and time consuming and could prevent us or our collaborators or licensees from developing or commercializing products that incorporate our technology.

Our ability to generate significant revenues from our products depends on our joint ventures’ and licensees’ ability to develop, market and sell products and utilize our proprietary technologies without infringing the intellectual property and other rights of any third parties.

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As the agricultural biotech industry continues to develop, we, our collaborators or licensees may become party to, or threatened with, litigation or other adverse proceedings regarding intellectual property or proprietary rights in our technology, processes, developed seed traits or seed treatments. Third parties may assert claims based on existing or future intellectual property rights and the outcome of any proceedings is subject to uncertainties that cannot be adequately quantified in advance. Any litigation proceedings could be costly and time consuming. A negative outcome from an intellectual property infringement suit could result in liability for monetary damages, require us to indemnify our licensees for damages arising from warranties we have made about the intellectual property we have licensed, which claims might not be subject to a cap, or treble damages and attorneys’ fees if we are found to have willfully infringed a patent. There is also no guarantee that we, our collaborators or licensees would be able to obtain a license under such infringed intellectual property on commercially reasonable terms or at all. A finding of infringement could prevent us, our collaborators or our licensees from developing, marketing or selling a product or force us to cease some or all of our business operations. Even if we are successful in these proceedings, we may incur substantial costs and the time and attention of our management and scientific personnel may be diverted as a result of these proceedings, which could have a material adverse effect on our operations. In some cases, our agreements with our collaborators or licensees might oblige us to pay for the enforcement of our licensed intellectual property rights, even though our collaborators or licensees may be responsible for commercializing the potentially infringing products. Claims that we have misappropriated the confidential information or trade secrets of third parties could similarly have a negative impact on our business.

The value of our intellectual property could diminish due to technological developments or challenges by competitors, making our products less competitive.

Our intellectual property rights are important to the operation of our business and the commercialization of our crop productivity products. We rely on a combination of licensed patents, PVP, trademarks, trade secret laws, confidentiality provisions and licensing arrangements to establish and protect our intellectual property. However, the importance of technology development and intellectual property protection in the crop productivity industry increases the risk that technological advances by others could render our products less competitive. Our business could be negatively affected by any of the following:

We may be required to pay royalties to employees who develop inventions that have been or will be commercialized by us, even if the rights to such inventions have been assigned to us, exclusive licenses have been granted to us and the employees have waived their rights to royalties or other additional compensation.

Under Argentine Patent and Utility Models Law No. 24,481 and Argentine Labor Law No. 20,744, which provide the legal framework related to ownership of inventions developed during an employer-employee relationship, the employer is awarded ownership of inventions when the employee was hired for the purpose of engaging in inventive discovery or when such invention otherwise derives from the knowledge acquired by virtue of the employee’s working for the employer. Depending on the nature and the scope of an employee’s contribution to an invention and the nature of his or her hiring, he or she may be entitled to additional compensation by the employer; however, the employer will still retain ownership rights on the conditions mentioned above. If an employee was hired for a purpose other than to engage in inventive discovery and he or she creates an invention that is not related to the employer’s processes, methods or business, the employee shall be the owner of the invention.

A significant portion of our employees are dedicated to activities that may be considered inventive. As a result, a significant portion of our employees execute confidentiality and ownership rights agreements upon commencement of employment whereby they agree to classify all work undertaken by them as engagement in inventive discovery, which grants us all ownership rights in inventions created while such employees are employed by us. If these assignments or exclusive licenses were deemed invalid or unenforceable, we could be required to pay royalties to our employees who have invented intellectual property that we have commercialized, which in turn may have a material adverse effect on our results of operations. In addition, if these assignments or exclusive licenses were deemed invalid or unenforceable, it is possible that our employees could assign or license to third parties their rights in any inventions created while employed by us. This could have a material adverse effect on our results of operations.

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Risks Related to Rizobacter’s Acquisition

Certain of the Rizobacter shares are subject to a judicial injunction.

Concurrently with the closing of business combination, the Rizobacter Call Option was exercised and we currently own 80.00% of Rizobacter’s capital stock through our subsidiary RASA Holding, 29% of which are subject to a precautionary measure issued pursuant to an injunction that affects 44% of the total share capital of Rizobacter. In addition, the precautionary measure also covers 30% of the dividends distributed on such shares, directing such percentage of dividends into a judicially created escrow account. Simultaneously with the exercise of the Rizobacter Call Option, 1,330,156 of BIOX shares representing 10% of Rizobacter shares subject to the precautionary measures were pledged to Bioceres S.A. The precautionary measure relates to litigation among historical shareholders of Rizobacter arising from a disputed transfer of shares that occurred in 1995. Although the Argentine Supreme Court ruled against certain of the litigating historical shareholders, such shareholders subsequently pursued other legal recourse—including the precautionary measure and non-innovative (medida de no innovar)—to further dispute the original transfer of shares. The non-innovative measure (medida de no innovar) was overturned by an Argentine court of appeals on April 17, 2018.

We purchased our controlling stake in Rizobacter subject to the precautionary measure and associated ongoing litigation. Should such contingencies be lifted, the Parent may be obligated to pay a contingent purchase price of US$17.3 million to certain selling shareholders of Rizobacter. Conversely, should the court rule against the free transferability of the affected shares, we would be obligated to return certain shares, thereby reducing our equity participation in Rizobacter, and the Parent would not be obligated to pay the abovementioned contingent purchase price. Given the Argentine Supreme Court’s finding that the 1995 share transfer was valid, it is likely or probable that the Parent may be obligated to pay the contingent purchase price of US$17.3 million. Moreover, pursuant to certain financial agreements entered into by the Company, RASA Holding pledged 41.3% of its shares in Rizobacter as collateral. Therefore, in an event of default with respect to our debt obligations, we would be obligated to sell certain shares, thereby reducing our equity participation in Rizobacter. For further information, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Convertible Notes”.

Risks Related to Operating in Latin America

A major portion of our operations and/or development activities are based in Latin America. As of June 30, 2021, approximately 95% of our consolidated sales of goods and services were attributable to our Latin American operations. In particular, fluctuations in the economy of Latin America and actions adopted by the governments of Latin American countries have had and may continue to have a significant impact on our subsidiaries operating in those countries.

Latin America has experienced, and may continue to experience, adverse economic or political conditions that may impact our business, financial condition and results of operations.

Latin American countries have historically experienced uneven periods of economic growth, recessions, periods of high inflation and economic instability. Recently, the economic growth rates of the economies of many Latin American countries have slowed and some have entered recessions. Additionally, economic and political developments in Latin America, including future economic changes or crises (such as inflation, currency devaluation or recession), government deadlock, political instability, civil strife, changes in laws and regulations, restrictions on the repatriation of dividends or profits, expropriation or nationalization of property, restrictions on currency convertibility, volatility of the foreign exchange market and exchange controls could impact our operations and/or the market value of the ordinary shares and have a material adverse effect on our business, financial condition and results of operations.

Latin American governments have exercised, and continue to exercise, significant influence over the economies of the countries in which we operate, which could adversely affect our business, financial condition, results of operations and prospects.

Historically, governments in Latin America have frequently intervened in the economies of their respective countries and have occasionally made significant changes in policy and regulations. Governmental actions to control inflation and other policies and regulations have often involved, among others, price controls, currency devaluations, capital controls and tariffs. Our business, financial condition, results of operations and prospects may be adversely affected by the changes in government policies or regulations of Latin American governments, including:

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Our business, results of operations and financial condition may be adversely affected by fluctuations in currency exchange rates relative to the U.S. dollar in the countries in which we operate.

The majority of our operations are based in Latin America and, accordingly, a significant portion of our costs are incurred in local currencies, while our revenues are primarily denominated in or influenced by U.S. dollars. Currencies in Argentina and Brazil have fluctuated significantly against the U.S. dollar in the past. Accordingly, fluctuations in exchange rates relative to the U.S. dollar could impair the comparability of our results from period to period and have a material adverse effect on our results of operations and financial condition.

The Argentine Peso depreciated 21.86% against the U.S. dollar in 2016, 17.36% in 2017, 102.16% in 2018, 58.86% in 2019 and 40.51% in 2020, based on the official exchange rates published by the Argentine Central Bank. In the past years, the Argentine government imposed restrictions on the purchase of foreign currency  (see “—Argentine exchange controls and restrictions limit access to the foreign exchange market (the “FX Market”) to make payments and distributions from our Argentine subsidiaries and receive the proceeds of any sale of our assets in Argentina”), which measures gave rise to an unofficial market where the U.S. dollar traded at a different market value than reflected in the official Argentine Peso – U.S. Dollar exchange rate. Due to the foreign exchange crisis generated in August 2019 and the continued reduction of the Argentine Central Bank’s foreign currency reserves, since September 1, 2019 the Argentine government reinstated rigid exchange controls and transfer restrictions, substantially limiting the ability to obtain foreign currency or make certain payments or distributions out of Argentina.

The Brazilian currency has historically suffered frequent fluctuations. As a consequence of inflationary pressures, in the past, the Brazilian government has implemented various economic plans and adopted a number of exchange rate policies, including sudden devaluations, periodic mini-devaluations during which the frequency of adjustments has ranged from daily to monthly, floating exchange rate systems, exchange controls and dual exchange rate markets. Formally the value of the Real against foreign currencies is determined under a free-floating exchange rate regime, but in fact the Brazilian government is currently intervening in the market, through currency swaps and trading in the spot market, among other measures, every time the currency exchange rate is above or below the levels that the Brazilian government considers appropriate, taking into account, inflation, growth, the performance of the Real against the U.S dollar in comparison with other currencies and other economic factors. Periodically, there are significant fluctuations in the value of the Real against the U.S. dollar. The Real depreciated 46.2% against the U.S. dollar in 2015 and appreciated 16.8% in 2016. In 2017, 2018 and 2019, the Real depreciated against the U.S. dollar 1.5%, 17.1% and 4.02%, respectively. In 2020 the Real depreciated 28.9% against the U.S. dollar.

Our consolidated financial information included herein is presented in U.S. dollars. Fluctuations in exchange rates relative to the U.S. dollar could impair the comparability of our results from period to period and could have a material adverse effect on our results of operations and financial condition.

We are required to apply inflationary adjustments and tax indexation procedures in our Argentine subsidiaries, which could adversely affect our financial statements, results of operations and financial condition.

Pursuant to the International Accounting Standards (“IAS”) 29 (Financial Reporting in Hyperinflationary Economies), the financial statements of entities whose functional currency is that of a hyperinflationary economy must be adjusted for the effects of changes in a suitable general price index. IAS 29 does not prescribe when hyperinflation arises but includes several characteristics of hyperinflation. The International Accounting Standards Board (“IASB”) does not identify specific hyperinflationary jurisdictions. However, in June 2018, the International Practices Task Force of the Centre for Quality, which monitors “highly inflationary countries” categorized Argentina as a country with projected three-year cumulative inflation rate greater than 100%. Additionally, some of the other qualitative factors of IAS 29 were present, providing prima facie evidence that the Argentine economy is hyperinflationary for purposes of IAS 29. Therefore, Argentine companies using International Financial Reporting Standard as adopted by the IASB (“IFRS”) are required to apply IAS 29 to their financial statements for periods ending on and after July 1, 2018.

Beginning with the period ending on December 31, 2018, Bioceres’ Argentine subsidiaries began preparing financial statements in compliance with IFRS, adopting IAS 29.

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In December 2019, the Argentine Government promulgated Law 27,541. It provided that the tax rate reduction established by Law 27,430 (reduction of the income tax rate from 35% to 30% for fiscal periods beginning on January 1, 2018 until December 31, 2019, and 25% for fiscal periods beginning on or after January 1, 2020, inclusive) be suspended until the fiscal years beginning on or after January 1, 2021. Thus, the tax rate of 30% was maintained. Law 27,541 also provided that, for the first and second financial years starting on or after January 1, 2019, one-sixth of the inflation adjustment (provided by Law 27.420) will be computed in the fiscal year of the adjustment calculation and the remaining five-sixths in equal parts in the five tax periods immediately following.

In June 2021, the Argentine Government approved a corporate income tax reform replacing the 30% fixed rate in force with a progressive tax rate. Depending on the amount of a corporation’s accumulated net taxable income, the reform could result in an increase or decrease in the corporate income tax rate.

Under the progressive corporate income tax, a 25% tax rate will apply on net taxable income for accumulated net taxable income up to AR$5 million. For accumulated net taxable income from AR$5 million to AR$50 million, the progressive scale will apply a 30% tax rate. Finally, for accumulated net taxable income exceeding AR$50 million the progressive scale will apply a 35% tax rate.

The reform also extends the 7% withholding tax on dividends for tax years beginning 1 January 2021 and thereafter.

For the fiscal year ended June 30, 2021, we increased our tax expenses and tax deferred liability by US$1.6 million. This incremental tax expense was allocated in accordance with Argentine Law 27,541, which amended Argentine Law 27,468, and will be payable with one-sixth allocated to the fiscal year ended June 30, 2021 and the remaining five-sixths allocated equally to the fiscal years ending June 30, 2021, 2022, 2023, 2024 and 2025.

We cannot predict the future impact that the application of IAS 29 and the eventual application of the tax indexation procedure and related adjustments will have on our Argentine subsidiaries’ financial statements or the effects on our business, results of operations and financial condition. Also, we cannot predict when the application of IAS 29 and the tax indexation will no longer be mandatory.

Argentine government intervention in the economy could adversely affect the economy and our financial condition and results of operations.

During recent years, the Argentine government increased its direct intervention in the economy, including through the implementation of regulation of market conditions, expropriations or nationalizations and price controls.

Between 2006 and 2012, the Argentine government conducted expropriations including mainly utilities or companies in strategic sectors of public interest, like Aguas y Saneaminentos S.A. in 2006, Aerolíneas Argentinas S.A. in 2008 and YPF S.A. in 2012. In an unprecedented case in 2020, the government unsuccessfully attempted the expropriation of a company fully involved in the private sector with no public interest, like Vicentín S.A., which is the fourth largest grain exporter in Argentina, and, in addition, was undergoing a restructuring under reorganization proceedings. However, the government desisted due to generalized massive spontaneous protests and opposition from opposing political parties and the legal and financial community.

In September 2014, the Argentine Congress enacted Law No. 26,991 which amends the Supply Law No. 20,680 (Ley de Abastecimiento) that enables the Argentine government to intervene in certain markets when it considers that any party to such market is trying to impose prices or supply restrictions in such market. The law grants broad powers to the relevant enforcing agency including to order the sale, production, distribution and/or delivery of basic needs goods throughout the country in case of a shortage of supply.

A significant portion of our assets are located in Argentina. Therefore, we are subject to political uncertainties, including expropriation or nationalization of our business or assets, or subject to renegotiation or annulment of existing contracts and other similar risks. In the future, intervention in the economy by the Argentine government may continue or increase, the occurrence of which may adversely affect Argentina’s economy and, in turn, our business, results of operations and financial condition. We cannot assure investors that these or other measures that may be adopted by the Argentine government in the future, such as nationalizations, forced renegotiations or modifications of existing contracts, new tax policies, price fixing, regulations and reforms affecting foreign trade and investments, will not have a material adverse effect on the Argentine economy and, consequently, will not adversely affect our business, results of operations and financial condition.

Continuing high inflation may have a negative effect on the Argentine economy and on our financial performance.

In the past, inflation has materially undermined the Argentine economy and the government’s ability to foster conditions that would permit stable growth. In recent years, Argentina has confronted inflationary pressures (including the depreciation of the Argentine peso), evidenced by significantly higher fuel, energy, and food prices, among other factors.

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According to data published by the Argentine National Institute of Statistics and Census (Instituto Nacional de Estadística y Censos) (“INDEC”), the Consumer Price Index (“CPI”) increased 24.8% in 2017, 47.6% in 2018, 53.8% in 2019, 36.1% in 2020, and 37% between January and September 2021.

If the primary fiscal deficit is not reduced and the foreign currency exchange rate is not stabilized, inflation rates could continue escalating and end in hyperinflation and a new economic crisis. There is uncertainty regarding the continuing effects of COVID-19 and the effects of the measures that the Argentine government and the Argentine Central Bank have adopted, or may adopt in the future, to reduce the fiscal deficit, re-activate the economy, stabilize foreign currency exchange rate and control inflation. If inflation remains high or continues to rise, Argentina’s economy may be negatively impacted, and our results of operations could be materially adversely affected.

Limited access of the Argentine government and the private sector to the international capital markets could adversely affect our financial condition.

During recent years, the Argentine government and provinces have defaulted in the payment of their debt, which has limited their access as well as that of private companies to the international financial markets, or it has substantially increased their financing costs.

After Argentina’s 2001 sovereign default, Argentina restructured approximately 91% of its defaulted foreign currency eligible debt pursuant to exchange offers in 2005 and 2010. Bondholders that declined to participate in those exchange offers, filed lawsuits against Argentina in several countries, including the United States.

In March 2016, the Argentine government reached settlement agreements with holders of a significant portion of the defaulted bonds and repaid the majority of the holdout creditors with the proceeds from a US$16.5 billion international offering. Although the size of the claims involved decreased significantly, litigation initiated by bondholders that have not accepted Argentina’s settlement offer continues in several jurisdictions.

Pursuant to a report issued by the Secretary of Finance of the Argentine government, as of December 2019, Argentina’s foreign debt amounted to US$311.2 billion, which represents 91.6% of Argentina’s debt-to-gross domestic product (“GDP”). In 2020 and 2021, the Argentine government had payments due of about US$52.0 billion and US$37.1 billion, respectively, on sovereign debt in U.S. dollars and pesos, of which about US$11 billion were due in the first quarter of 2020 and US$26 billion were due in the second quarter of 2020. Because Argentina’s recession was deepened by the effects of COVID-19, the foreign exchange crisis and increasing deficit and inflation, the Argentine government was in an urgent need of restructuring its sovereign debt.

On February 11, 2020, the Argentine government postponed the payment of principal and suspended the accrual of interest under its US$1.6 billion of dual currency bonds maturing in February 2020 until September 30, 2020. On April 6, 2020, by Decree No. 346/2020 the Argentine government deferred payments of interest services and principal repayments of the national public debt instrumented by U.S. dollar-denominated securities issued under the law of the Argentine Republic until December 31, 2020.

On April 21, 2020, the Argentine government launched an offer for the exchange of approximately US$64.8 billion of eligible foreign currency external sovereign bonds. On May 22, 2020, the Argentine government defaulted in the payment of the BIRAD/USD 6.875% due 2021, the BIRAD/USD 7.5% due 2026 and BIRAD/USD 7.625% due 2046 eligible bonds. After several extensions of the expiration of the invitation and the improvement of the initial offer, at the expiration of the last extension of the invitation term on August 28, 2020, the Argentine government obtained consents to exchange and/or restructure 99.01% of the aggregate principal amount of all series of the approximately US$64.8 billion eligible bonds.

In June 2018, the International Monetary Fund (“IMF”) approved a financial support plan for Argentina in the form of a Stand-By Arrangement for US$50 billion, that was extended to US$57.1 billion in September 2018, of which as of the date of this report the IMF disbursed an aggregate of US$44.70 billion. The Argentine government is negotiating an extension with the IMF for payments under the Stand-By Arrangement that mature in 2021 and 2022.

If the negotiations with the IMF fail, the Argentine government defaults again in the payment of its sovereign debt or the measures adopted and to be adopted by the Argentine government to reduce the fiscal deficit, control inflation and stabilize the foreign exchange market are not effective, Argentina’s ability to obtain international or multilateral private financing or direct foreign investment may be limited, which may in turn impair its ability to implement reforms and public policies to foster economic growth, impair the ability of private sector entities to access the international capital markets or make the terms of such financing much less favorable that those accessible by companies in other countries in the region and may accelerate the depreciation of the peso, foster inflation and deepen the economic crisis and recession.

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Lack of access to international or domestic financial markets or increase in the costs of such financing could affect the projected capital expenditures for our operations in Argentina, which, in turn, may have an adverse effect on our financial condition or the results of our operations.

An increase in export and import duties and controls may have an adverse impact on our business.

Since 2002, the Argentine government has imposed duties on the exports of various primary and manufactured products. Most such duties were suspended or subject to progressive reduction after the Macri administration took office in December 2015. However, in September 2018, general export duties were re-imposed and the progressive reduction of export duties on soybean products stopped. For example, a general additional export duty has been imposed on all exports of goods, levied on the lower of 12% of the good’s FOB value or AR$3 or AR$4 per U.S. dollar, depending on the goods.

On December 4, 2018, the Argentine Congress approved the budget bill for 2019 through Law No. 27,467, which amended the Customs Code to allow for duties to be applied to the exportation of services. In addition, the Argentine government was allowed to impose export duties of up to 30% until December 31, 2020. However, in case of services and goods that were not subject to export duties before September 2, 2018, the maximum rate was 12%. On January 2, 2019, the Argentine government issued Decree No. 1201/2018, which established an export duty on export of services at a rate of 12% with a maximum limit of AR$4 per each U.S. dollar of the amount arising from the invoice or equivalent document. On December 28, 2019, Decree No. 99/2019 extended the application of duties on export of services through December 31, 2021 with a rate of 5% without limit.

On December 21, 2019, the Argentine Congress enacted Law No. 27,541 (Ley de Solidaridad Social y Reactivación Productiva en el Marco de la Emergencia Pública, or the “Solidarity Law”)., that established new maximum export duties of 33% for soybean, 15% for goods that were not subject to the payment of export duties as of September 2, 2018, 5% for agroindustry products of regional economies defined by the Argentine government, and 5% for industry goods and services.

As of February 29, 2020, the following crop exports were subject to the following export duties: soybean and soy products 30%, corn, wheat, barley, sunflower and sorghum 12%, corn and wheat flour 9% and sunflower oil 12%. However, on March 4, 2020, the Argentine government issued Decree No. 230/2020 pursuant to which increased the export duties for soybeans and soy product from 30% to 33%, and reduced export duties for sunflower from 12% to 7%, for corn flour from 9% to 5%, for wheat flour from 9% to 7% and for sunflower oil from 12% to 5%.

In October 2020, the Argentine government adopted a series of measures seeking to promote production, exports and the liquidation of U.S. dollars from exports in the FX Market, including the temporary reduction of export duties for soybean and soybean derived products through Decree No. 790/2020. However, such measures were not expected to have the intended results.

The Argentine government imposed the Import Monitoring System (the “SIMI”) in December 2015. Under this system, importers are required to submit certain information electronically through the SIMI application which, once approved, will be valid for 90 calendar days.

The Argentine government has also enacted an import licensing regime that includes automatic and non-automatic licensing for imports according to the tariff codes of the goods to be imported. Automatic import licensing implies that the importer must only get through the SIMI and any other certification related to the imported goods. Non-automatic licensing implies that the authorities also have a ten-day term to either approve or reasonably reject the import license requested due to its effect on local businesses, aside from the other import requirements that the goods may have (including SIMI and certifications).

We cannot make assurances or predictions that there will not be further increases in the export duties or that other new export duties, taxes, quotas or restrictions will not be imposed. The imposition of new export duties, taxes, quotas or restrictions or a significant increase in existing export duties or the application of export quotas or the imposition of regimes that aim to restrict or control imports and exports could adversely affect our financial condition or results of operations.

A decline in the global prices of Latin America’s main commodity exports could have an adverse effect on Latin America’s economic growth.

High commodity prices have contributed significantly to the increase in Latin American exports as well as in governmental revenues from export taxes. However, relying on the export of certain commodities has made the Latin American economy more vulnerable to fluctuations in the prices of commodities.

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Recently, prompted by the global crisis caused by the COVID-19 (see “—COVID-19 could have an adverse material effect on our business, financial condition and results of operations”) and the significant decrease in oil prices, international commodity prices decreased. If international commodity decline, the Latin American economy could be adversely affected.

These circumstances would have a negative impact on the levels of government revenues, available foreign exchange and Latin American governments’ ability to service their sovereign debt, and could either generate recessionary or inflationary pressures, depending on Latin American governments’ reaction. Either of these results would adversely impact Latin America’s economic growth and, therefore, our financial condition and results of operations.

Latin America continues to face considerable economic uncertainty.

A major portion of our operations and/or development activities are based in Latin America. Accordingly, our financial condition and results of operations are substantially dependent on economic conditions in Latin America.

In Argentina, the fluctuation in currency exchange rates, the gap between the official and alternative exchange rates, and high inflation, along with the measures attempting to control inflation adopted by the Argentine government, caused a deepening recession (the GDP decreased 6.2% in 2018 and 1.7% in 2019), increasing unemployment and the failure of medium and small companies. In 2020, the Latin American general macroeconomic conditions were worsened with the irruption of COVID-19 (see “The effects of COVID-19 and certain measures adopted by governments to mitigate the effects of the pandemic are negatively affecting us, and we cannot accurately predict its ultimate impact on our results of operations”). In Argentina, the stay-home orders and businesses restrictions, along with the global recession contributed to deepening the recession further. According to INDEC, during the second quarter of 2020 the GDP dropped 19.1% interannual (what represents the highest drop of the GDP in Argentine history) with a peak of 16.2% in the second quarter, and as of July 2020 the economic activity dropped 13.2% interannual. All these circumstances also provoked a deep increase of poverty, which, according to INDEC, as of June 30, 2021 affected more than 40.6% of the population. In order to contain the escalade of the currency exchange rate, the Argentine Central Bank have been selling its reserves, which decreased from US$44.8 billion as of January 1, 2020 to US$ 42.9 billion as of September 30, 2021. In addition, the Argentine government financed all economic assistance in connection with COVID-19 with a heavy issuance of currency, which is also contributing to inflation, demand for U.S. dollars and devaluation of the Argentine peso.

In Brazil, the economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high and variable levels of inflation and currency devaluation. Brazil’s GDP decreased 3.3% in 2016, increased 1.3% in 2017, increased 1.3% in 2018, increased 1.1% in 2019 and decreased 4.1% in 2020 during the ongoing COVID-19 outbreak. Historically, Brazil’s political situation has influenced the performance of the Brazilian economy, and political crisis have affected the confidence of investors and the general public. As a result, Brazil continues to face uncertainty related to the future developments in policies and whether and when such policies and regulations may be implemented.

If the Latin American governments do not adopt the correct measures and address the required structural changes the current economic conditions may be worsened, which could have an adverse effect on our financial condition and results of operations.

The Argentine government may order special protections for employees in the private sector.

Due to high levels of inflation, the Argentine government could order salary increases for employees in the private sector, as occurred in the past. Notwithstanding the above, no mandatory salary increase has been ordered by the Argentine government since January 2020.

On December 13, 2019, the Argentine government issued Decree No. 34/2019, which duplicated the amount of the statutory severance payments for dismissal without cause payable to employees hired before such date; but subject to a cap of AR$ 500,000. Decree No. 34/2019 is in force until December 31, 2021, although it might be extended.

Moreover, in Argentina dismissals without just cause and based on lack or reduction of work and/or force majeure have been forbidden since March 31, 2020 through December 31, 2021 (pursuant to Decree 413/2021). Such prohibition is not applicable to employees hired after December 13, 2019. However, mutual agreements of termination are fully valid (Section 241 Law No. 20,744) and such type of agreements entail no codified severance. Nevertheless, market practice shows that offers to obtain employees’ consent should be equal or better than statutory severance.

As per the current context, the prohibition on dismissals and duplication of severance could have an adverse effect on our costs though only upon a decision to reduce the workforce and/or upon constructive dismissal validated by a court or an agreement.

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The disposition or sale of BIOX shares may be subject to taxation in Argentina.

Under the Argentine Income Tax Law (as amended by the Tax Reform), gains realized from the indirect sale or disposal of assets located in Argentina, including shares or other equity participations in Argentine companies by an entity or individual not resident in Argentina (“Non-Argentine Resident”) are taxable under certain conditions, as if a direct sale took place (the “Tax on Indirect Sales”).

The Tax Reform created a presumption of income from Argentine source on the sale or disposition by Non-Argentine Residents of shares and participations (or rights to receive such shares or participations) in foreign entities whose underlying assets are fully or partially located in Argentina, as long as the following conditions are met:

The securities or rights of the foreign entity being sold or disposed represent, at least, ten percent of the equity of that entity, at the time of their disposal or in any of the 12 previous months. For purposes of this calculation, ownership of related entities, spouses and other relatives must be considered jointly.

In case the Tax on Indirect Sales applies, the Argentine source gain on which the Tax on Indirect Sales will be calculated is a proportion to the value of the Argentine assets held by the foreign entity with respect to the total value of the securities or rights being transferred.

The Tax on Indirect Sales is levied at a 15% rate on the net capital gain (gross sale price less acquisition cost), or at a 13.5% effective rate on the gross sale price, at the option of the seller. However, such rate may be reduced if a Treaty to Avoid Double Taxation applies to the seller. If the Tax on Indirect Sales becomes applicable and the tax is applied on a net basis, pursuant to current income tax rules, the acquisition costs may be adjusted by inflation to calculate the net capital gain.

The mechanism to comply with the payment of the Tax on the Indirect Sales depends on the tax residency of the buyer: (i) if the buyer or acquirer is an Argentine corporate entity (in general, entities organized or incorporated under Argentine law, certain traders and intermediaries, local branches of foreign entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina) (“Argentine Entity”) or an Argentine resident individual (“Argentine Individual”), by the Argentine Entity or Argentine Individual who will act as withholding agent, (ii) if the buyer is not an Argentine Entity or and Argentine Individual, the tax has to be paid by the seller or transferor directly (through an international wire transfer or through its legal representative in Argentina, if any). There are specific rules if the non-Argentine resident is a resident in a non-cooperative jurisdiction or the funds invested proceed from a non-cooperative jurisdiction as defined in the Income Tax Law.

Argentine Income Tax Law sets forth that the Tax on Indirect Sales does not apply to transfers made within the same economic group. Pursuant to the Regulatory Decree of  the Argentine Income Tax Law, transfers within the same economic group would take place when the seller or sellers participate or participates, directly or indirectly, in at least 80% of the transferee’s capital, or vice versa, or when one or more entities participate, directly or indirectly, in at least 80% of the transferor’s and transferee’s capital, and such participations have been held for at least two years prior to the transfer.

The payment of the In-Kind Consideration under the Rizobacter Call Option may be subject to taxation in Argentina.

The BIOX shares delivered to Grantors in connection with the payment of the In-Kind Consideration under the Rizobacter Call Option would be subject to the Tax on Indirect Sales at the level of the Company, levied on the gain resulting from the difference between the BIOX shares’ tax basis (acquisition cost, equal to the redemption price of such shares) and the value received by the Company in connection with the payment of the In-Kind Consideration. Any resulting Tax on Indirect Sales would be calculated on the proportion of the value that the Argentine assets represent with respect to the total value of the BIOX shares delivered and should be paid to the Argentine tax authorities by our legal representative in Argentina. However, to the extent that the value received by the Company in connection with the delivery of the BIOX shares and satisfaction of the In-Kind Consideration equals the redemption price of such shares, and as a result equals the acquisition costs, there would be no tax basis for the Tax on Indirect Sales.

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Argentine exchange controls and restrictions limitg access to the foreign exchange market (the “FX Market”) to make payments and distributions from our Argentine subsidiaries and receive the proceeds of any sale of our assets in Argentina.

The Argentine government has imposed strict exchange controls and transfer restrictions, substantially limiting the ability of legal entities and individuals to obtain foreign currency or make certain payments or distributions out of Argentina. See “—Item10. Additional Information—D. Exchange Controls.”

On September 15, 2020, Communication “A” 7106 of the Argentine Central Bank restricted the access to the FX Market for the payment of principal under foreign financial debt with third parties (other than with international or multilateral credit organizations) in excess of US$1,000,000 per month in the aggregate with maturities between October 15, 2020 and March 31, 2021 (the “Temporal Scope”) to an amount equal to up to 40% of the amount originally due; and provided that the remaining unpaid principal balance is refinanced through a new foreign financial debt with an average life of at least two years (the “Refinancing Plan”).

On February 25, 2021, the Argentine Central Bank issued Communication “A” 7230, which modified certain aspects of Communication “A” 7106 and extended the Temporal Scope through December 31, 2021. The main provisions of Communication “A” 7230 included: (i) the increase in the amount allowed for access to the FX Market without filing a Refinancing Plan from U.S.$1,000,000 to U.S.$2,000,000; and (ii) expressly excluded from the obligation to furnish a Refinancing Plan with respect to debt refinancing closed during 2020 which allowed achieving the parameters established by Communication “A” 7106. For further information, see “—Item10. Additional Information—D. Exchange Controls.”

There is currently no access to the FX Market for the payment of principal under foreign financial debt with related parties until December 31, 2021.

In response to the reinstatement of the foreign exchange restrictions, an unofficial U.S. dollar trading market developed in which the peso-U.S. dollar exchange rate differs substantially from the official peso-U.S. dollar exchange rate, and the use of blue-chip swaps expanded which, are much more expensive than acquiring foreign currency through FX Market at the official exchange rate. See “—Our business, results of operations and financial condition may be adversely affected by fluctuations in currency exchange rates, including between the U.S. dollar and the Argentine peso.” Exchange controls have generally affected the level of international reserves deposited with the Argentine Central Bank, which decreased from US$44.8 billion as of January 1, 2020 to US$ 42.9 billion as of September 30, 2021.

All these measures could lead to political and social tensions and undermine the Argentine government’s public finances, as has occurred in the past, which could adversely affect Argentina’s economy and prospects for economic growth, and could adversely affect our business and results of operations.

In addition, we may be impaired from receiving payments and transfers from our Argentine subsidiaries or such payments and transfers could be subject to substantial additional costs which, in either case, could adversely affect our business and results of operations.

Foreign exchange restrictions have reinstated the mandatory repatriation of export receivables.

Since September 2, 2019, the Argentine government has reinstated the mandatory repatriation into Argentina and the conversion into pesos through the FX Market of the proceeds from the collections of foreign currency outside of Argentina by Argentine residents in connection with exports of goods within certain specific dates. See “—Item10. Additional Information—D. Exchange Controls.”

Regardless of the applicable maximum terms described above, upon collection of the export receivables, the proceeds thereof are subject to the mandatory repatriation within the five consecutive days computed from the date of payment or collection.

In addition, the Argentine government also reinstated the mandatory repatriation into Argentina and the conversion into pesos through the FX Market of the receivables for export of services within five consecutive days computed from the date they are received.

The reinstatement of the repatriation of export of goods and services receivables and the additional restrictions imposed on the access to the FX Market could have a material adverse effect on our business, results of operations and financial condition.

Changes in Argentine tax laws may adversely affect the results of our operations, financial condition and cash flows.

On December 29, 2017, the Argentine government enacted Law No. 27,430 (the “Tax Reform”), which reduced the corporate income tax rate from 35% to 30% for fiscal years beginning on or after January 1, 2018 and 25% for fiscal years beginning on or after

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January 1, 2020. Additionally, the distribution of dividends is subject to income tax withholding of 7% tax rate if the distributed profits derive from the fiscal years beginning on or after January 1, 2018 or 13% tax rate if the distributed profits derive from fiscal years beginning on or after January 1, 2020. The 13% domestic rate may be reduced by application of tax treaties signed by Argentina. However, on December 23, 2019, the Solidarity Law suspended the reduction of the corporate tax rate for Argentine Entities to 25% (with dividends being taxed at 13%) and established that 30% rate (with dividends being taxed at 7%) remains applicable until fiscal years initiated until January 1, 2021. Consequently, the effectiveness of the 25% and 13% tax rates has been delayed until tax years commencing after January 1, 2021.

Law No. 27,630 amends the Argentine Income Tax Law and replaces the fixed rate paid by Argentine companies on their corporate income from 30% to a progressive rate ranging from 25% to 35%. Depending on net incomes, companies will now have to pay a fixed amount and a progressive rate over the surplus of the minimum base rate in their category. Such income amounts will be adjusted once a year starting January 1, 2022. To that effect, the annual variation of the CPI stipulated by the INDEC will be computed.

The applicable rate over dividends paid to shareholders, whether they are individuals or undivided estates residing in Argentina or non-Argentine residents, will continue to be 7% in all cases, regardless of the tax rate paid by the company at the corporate level.

The Solidarity Law also introduced amendments to the excise tax on certain goods, tax on debits and credits in local bank accounts and social security rules. It also established a new tax on certain purchases of foreign currency by Argentine residents, a new tax debt settlement plan for certain taxpayers, and established new rates on exports of goods and services.

Argentine companies are required to pay the personal assets tax corresponding to Argentine resident individuals, foreign individuals and foreign entities for holding equity interests in such companies as of December 31 of each year. The applicable tax rate until 2018 was 0.25% and the tax is levied on the equity stated in the latest financial statements.

Under the Solidarity Law, the tax rate applicable to shares or participations in the capital of companies governed by the Argentine General Companies Law was increased from 0.25% to 0.50% of the pro-rata equity value.

Non-Argentine residents are subject to Argentine personal assets tax for holding shares and other equity participations in Argentine companies as of December 31st of each year at a rate of 0.50%, which is levied on the proportional net worth value (valor patrimonial proporcional) of the shares arising from the last balance sheet. Argentine companies are obliged to pay the tax on behalf of their Non-Argentine resident shareholders, partners or owners and are entitled to seek reimbursement from them.

We cannot assure that the Argentine government or any of its political divisions will not adopt additional changes and reforms in tax matters, nor that these reforms and those that may be adopted in the future will not adversely affect our business, results of operations or financial condition; or our Non-Argentine Residents affiliates or subsidiaries in connection with their holding of shares and equity in Argentine companies.

Risks Related to Our Securities

Our share repurchase program may reduce liquidity.

On May 6, 2020, our Board of Directors approved a program to repurchase our own securities. As described in Item 10 of this report, we may repurchase up to US$5,000,000 to enhance the allocation of capital to certain equity-finance obligations (the “Buy-Back Program”). As of June 30, 2021, we acquired 464,455 ordinary shares under the Buy-Back Program. Future purchases, if any, would be funded from our cash balances and could reduce our financial liquidity and indirectly add to our indebtedness, as well as reduce liquidity of our ordinary shares.

There can be no assurance that we will be able to comply with the continued listing standards of the Nasdaq Global Select Market.

Our ordinary shares are currently listed on the Nasdaq Stock Market LLC (“Nasdaq”). Our continued eligibility for listing may depend on, among other things, the amount of “public float” (equity held by non-affiliates). If Nasdaq delists BIOX shares from trading on its exchange for failure to meet the listing standards, BIOX shareholders could face significant material adverse consequences including:

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The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because our ordinary shares are listed on Nasdaq or another national securities exchange, they are covered securities. If our securities were no longer listed on Nasdaq, they would not be covered securities and we would be subject to regulation in each state in which we offer securities.

As the resale restriction on a significant portion of our ordinary shares following the business combination has expired, such ordinary shares may be sold into the market at any time. This could cause the market price of our ordinary shares to drop significantly, even if our business is doing well.

Sales of a substantial number of shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our ordinary shares.

The initial shareholders of UAC agreed not to transfer, assign or sell any of their shares for certain period following the business combination, which has expired. In addition, in connection with the execution Exchange Agreement, UAC and Bioceres, Inc. entered into certain lock-up agreement, which has also expired. As restrictions on resale ended, the market price of our ordinary shares could decline if the holders thereof  sell them or are perceived by the market as intending to sell them.

Conversion of the Notes would increase the number of ordinary shares and result in dilution to shareholders.

On March 6, 2020, we issued $42.5 million secured convertible notes (the “Notes”) in a private placement led by Boston-based Solel Partners LP. The Notes will mature on March 6, 2023 unless earlier converted or repurchased. The conversion price of the Notes is $8.00 per share (the “Strike Price”). The Notes are convertible into cash, ordinary shares or a combination of cash and shares at the holders’ option upon maturity or the occurrence of a change of control. At any time prior to maturity, we may elect to convert the Notes into ordinary shares through a mandatory conversion, provided that our free float exceeds $100 million and the share price has traded above the Strike Price for 10 consecutive days.

The issuance of a substantial number of additional ordinary shares upon conversion of the Notes will result in dilution to the then existing holders of our ordinary shares and potentially increase the number of ordinary in the public market. Sales of substantial numbers of such ordinary shares in the public market could adversely affect the market price of our ordinary shares.

Servicing the Notes requires a significant amount of cash, and we may not have sufficient cash flow to pay the Notes.

Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness, including the Notes, depends on our future performance, which is subject to many factors, including, economic, financial, competitive and other, beyond our control. We may elect to make interest payments under the Notes in kind, which will be capitalized, but if the Notes are not converted into ordinary shares, we will be required to pay the principal thereof in cash. Our ability to refinance the Notes, which mature in 2023, will depend on the financial markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations and limit our flexibility in planning for and reacting to changes in our business.

Holders of the Notes have the right to require us to repurchase their Notes for cash upon the occurrence of a change of control. We cannot assure you that we will have sufficient financial resources, or will be able to arrange financing, to pay the price in cash with respect to any Notes surrendered by holders for repurchase upon a change of control. In addition, restrictions under our then existing credit facilities or other indebtedness, if any, may not allow us to repurchase the Notes upon a change of control. Our failure to repurchase the Notes upon a change of control when required would result in an event of default with respect to the Notes which could, in turn, constitute a default under the terms of our other indebtedness, if any. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes.

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We are a “controlled company” as defined by of Nasdaq rules and, as a result, qualify for exemptions from certain corporate governance requirements.

Bioceres S.A. controls, directly or indirectly, a majority of the voting power of our outstanding shares. Under Nasdaq rules, a listed company of which more than 50.0% of the voting power for the appointment of directors is held by any person or group of persons acting together is a “controlled company” and may elect not to comply with certain Nasdaq corporate governance requirements, including the requirement (i) that a majority of the board of directors consist of independent directors, as defined under the Nasdaq rules and (ii) to have a compensation committee and a nominating and governance committee, although we have established a compensation committee and a nominating and governance committee, the majority of which consists of independent directors. We have decided to be treated as a “controlled company” and, even though three members of our Board of Directors and a majority of the members of our compensation committee and our nominating and governance committee (that we chose to establish) consists of independent directors, you may not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate governance requirements.

Bioceres S.A. controls us, and its interests may conflict with yours in the future.

Bioceres S.A. currently indirectly owns 57.4% of Bioceres Crop Solutions votes. As a result of this voting control, Bioceres S.A. will effectively be able to determine the outcome of all matters requiring shareholder approval, including, but not limited to, the appointment and removal of directors (subject to any contractual designation rights), as well as other matters of corporate or management policy (such as potential mergers or acquisitions, payment of dividends, asset sales, and amendments to organizational documents). This concentration of ownership may delay or deter possible changes in control and limit the liquidity of the trading market for BIOX shares, which may reduce the value of an investment such shares. This voting control could also deprive shareholders of an opportunity to receive a premium for their shares as part of a potential sale of Bioceres Crop Solutions. So long as Bioceres S.A. and its affiliates continue to own a significant amount of Bioceres Crop Solutions’ voting power, they may continue to be able to strongly influence or effectively control its decisions. The interests of Bioceres S.A. and its affiliates may not coincide with the interests of other holders of BIOX shares.

The price of our securities may fluctuate.

Fluctuations in the price of our securities could contribute to the loss of all or part of your investment. If an active market for our securities develops and continues, the trading price of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline.

Factors affecting the trading price of our securities may include, among others:

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Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general and Nasdaq have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to the Company could depress our share price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources and could also require us to make substantial payments to satisfy judgments or to settle litigation.

If securities or industry analysts do not publish or cease publishing research or reports about BIOX, its business, or its market, or if they change their recommendations regarding BIOX ordinary shares adversely, then the price and trading volume of BIOX ordinary shares could decline.

The trading market for BIOX ordinary shares will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. Securities and industry analysts do not currently, and may never, publish research on us. If no securities or industry analysts commence coverage of BIOX, BIOX’s share price and trading volume would likely be negatively impacted. If any of the analysts who may cover BIOX change their recommendation regarding BIOX’s shares adversely, or provide more favorable relative recommendations about BIOX’s competitors, the price of BIOX ordinary shares would likely decline. If any analyst who may cover the Company were to cease coverage of the Company or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause our ordinary share price or trading volume to decline.

Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited.

The Company is an exempted company incorporated under the laws of the Cayman Islands and a majority of our officers and directors are residents of jurisdictions outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.

Our corporate affairs are governed by our amended and restated memorandum and articles of association (the “Articles”), the Cayman Islands Companies Law (2020 Revision) (as the same may be supplemented or amended from time to time) or the common law of the Cayman Islands. We are also subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to the Company under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from statutes or judicial precedent in some jurisdictions in the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In particular, the Cayman Islands has a different body of securities laws as compared to the United States. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.

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We have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.

We are an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our ordinary shares less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of UAC’s IPO, (b) in which we have total annual gross revenue of at least US$1.07 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our outstanding shares that are held by non-affiliates exceeds US$700 million as of the prior June 30, and (2) the date on which we have issued more than US$1.0 billion in non-convertible debt during the prior three year period. As an emerging growth company, we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and we are exempt from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. We cannot predict if investors will find our securities less attractive because we may rely on these provisions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and our share price may be more volatile.

As a foreign private issuer, we are exempt from certain disclosure requirements under the Exchange Act, which may afford less protection to our shareholders than they would enjoy if we were a domestic U.S. company.

As a foreign private issuer, we are exempt from, among other things, the rules prescribing the furnishing and content of proxy statements under the Exchange Act. In addition, our executive officers, directors and principal shareholders are exempt from the reporting and short swing profit recovery provisions contained in Section 16 of the Exchange Act. We are also not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic U.S. companies with securities registered under the Exchange Act. As a result, our shareholders may be afforded less protection than they would under the Exchange Act rules applicable to domestic U.S. companies.

We do not intend to pay any dividends on our ordinary shares at this time.

We have not paid any cash dividends on our ordinary shares to date. The payment of cash dividends on our ordinary shares in the future will be dependent upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that our Board of Directors and shareholders may deem relevant. Our Board of Directors intends to retain the gain for the fiscal year ended June 30, 2021 and not distribute dividends due to certain financial commitments. Our Board of Directors does not anticipate declaring any dividends on our ordinary shares in the foreseeable future. As a result, any gain you will realize on our ordinary shares will result solely from the appreciation of such shares.

We may issue additional securities in the future, which may result in dilution to our shareholders.

We are not restricted from issuing additional ordinary shares or securities convertible into or exchangeable for ordinary shares. Because we may need to raise additional capital in the future to operate and/or expand our business, we may conduct additional equity offerings. To the extent our outstanding options are exercised, or we conduct additional equity offerings, additional ordinary shares will

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be issued, which may result in dilution to our shareholders. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our ordinary shares.

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On July 27, 2020, we filed a Tender Offer Statement and Schedule 13E-3 Statement on Schedule TO with the SEC, pursuant to which the Company offered to exchange any and all of its 24,200,000 outstanding warrants (the “Warrants”) for either 0.12 ordinary shares or $0.45 in cash, at the election of the holder (the “Offer to Exchange”). A minimum participation of 51% of the Warrants was required as a condition to the Offer to Exchange, in order to amend the Warrant Agreement governing the Warrants to allow BIOX to subsequently redeem all Warrants not tendered or exchanged pursuant to the Offer to Exchange. We successfully and cost-effectively removed all 24.2 million outstanding Warrants from our capital structure, with 90% of holders electing to tender their warrants and 99% of these holders choosing to receive our shares in exchange. Following completion of the Offer to Exchange, BIOX implemented the amendment to the Warrant Agreement and redeemed the remaining Warrants, thereby retiring all of its Warrants.

On November 12, 2020, we acquired from Arcadia Biosciences the remaining HB4 Soy ownership interest in Verdeca LLC, aiming to accelerate the breeding and the go-to market strategies. Complete ownership will enable us to capture more of the underlying economic value generated by this technology. As part of this transaction, we gained full access and control of Verdeca´s vetted soybean library of gene-edited materials used to develop new quality and productivity, as well as exclusive rights to all Arcadia technologies that are applicable to soybean. In addition, through this transaction, we have also acquired rights to Arcadia’s quality wheat traits and the related Good Wheat™ brand for Latin America and other GLA non-core assets. In consideration for the acquisition, we paid Arcadia $5 million in cash and $15 million in equity consisting of 1,875,000 of our common shares, as well as $1 million in reimbursement costs associated with the transaction. In addition, we will pay Arcadia (i) $2 million upon obtaining Chinese import clearance for HB4 Soy or achieving penetration of this technology in a minimum number of planted hectares, and (ii) royalty payments equivalent to (a) 6% of the net HB4 Soy technology revenues realized by Verdeca, capped at $10 million aggregate amount, and (b) 25% of the net wheat technology revenues resulting from the in-licensed materials.

On April 26, 2021, we voluntarily transferred our stock exchange listing from the NYSE American to The Nasdaq Global Select Market. This new listing enhances the company’s visibility as an Ag-Tech company focused on sustainable solutions.

After the fiscal year ended June 30, 2021, following the aforementioned transactions, our outstanding ordinary shares equal 41.1 million.

Taking into consideration our acquisition of Rizobacter, a global leader in biological products and a pioneer in liquid inoculants, high-tech adjuvants and specialty fertilizers, we have a combined experience of 44 years introducing top-tier technologies into the global agriculture market. Our parent company, Bioceres S.A. (the “Parent”), was founded in 2001 by a leading group of growers in Argentina to address the demand for higher crop yield and productivity in a sustainable and environmentally conscious way. Since our founding, we have developed one of the leading fully integrated biotechnology platforms of its kind to source, validate, develop and commercialize agricultural technologies and products. We have developed a unique biotech platform focused on raising crop yields and reducing the carbon footprint of the agriculture industry and have strategically targeted some of the most globally prolific crops, namely soy, wheat, alfalfa and corn, in the largest agricultural geographies on a global scale.

In order to bring our products to market in an efficient and cost-effective manner, we have established multiple joint ventures, formed non-joint venture collaborations and created and acquired multiple companies. Our joint ventures include partnerships with important industry participants, such as Florimond Desprez, De Sangosse and Moolec Science Ltd. Some of our non-joint venture collaborations include those with Corteva, Momentive and Syngenta, Don Mario, TMG, Momentive, among others.

The graph below sets forth our history and track record of innovation through joint ventures and acquisitions:

Note:

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B.Business Overview

Our Operational and Organizational Structure

Our principal executive offices are located in Rosario, Santa Fe, Argentina. Our main manufacturing and distribution facilities are located in Pergamino, Argentina. Our manufacturing facilities include a formulation plant for adjuvants with an annual capacity of approximately 2.1 million-gallon, a production facility of liquid inoculants with an annual capacity of 6.6 million gallons, a formulation plant for insecticides and fungicides with a production capacity of 0.5 million gallons per year, a micro-beaded fertilizer facility with a production capacity of 50,000 tons per year, as well as over 375,000 square feet of warehouse space for packaging and logistics. We test and conduct field trials of our key technologies at our main field station, which also has processing capabilities for foundation seed.

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We also operate facilities in Brazil and have sales offices or representatives in eight countries. We are a light fixed asset company, well invested and with spare capacity to further strengthen our dominant position in Argentina and continue to expand internationally. As of June 30, 2021, we had 497 full-time employees.

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The following table identifies our main subsidiaries and affiliates as of the date of this report:

Note:—

Our Product Development Pipeline

We have structured our pipeline to launch new products into three main phases: Technology Sourcing, Product Development Partnering, and Production and Market Access. See “—Our Business Model.”

Joint Ventures and Key Collaborators

Some of our main projects are conducted through joint ventures and key collaborations. The form of the collaborations depends on the nature and stage of development of the particular product candidate. We participate in joint ventures to develop certain technologies and to maintain a diversified product pipeline. When a joint venture successfully develops a product, we integrate such product into our commercial offering and/or license the technology to third-party channels through a joint-venture vehicle. We engage in non-joint venture collaborations to develop a single or otherwise limited product opportunity. We generate revenue from our non-joint venture collaborations primarily by licensing our technology for inclusion in end-products, or for the use of our technologies in industrial processes. Finally, we have relationships with third parties who have product development capabilities and/or market presence outside of our core geographies or crops, to whom we license our technologies. For our corporate chart, see “—Our Operational and Organizational Structure.”

Joint Ventures and Unconsolidated Entities

Trigall Genetics S.A.

In December 2013, we formed a joint venture in Uruguay with Florimond Desprez. The resulting joint venture, Trigall Genetics, in which we have a 50% equity interest, is engaged in the development and deregulation of conventional and GM wheat varieties in Latin America. The first products in the Trigall Genetics pipeline are conventional wheat varieties that will be sold through Bioceres Semillas, as well as through other Trigall Genetics licensees. Our first biotech trait is our HB4 technology. During the fiscal quarter ended September 30, 2020, Argentina’s Ministry of Agriculture granted approval of the Company’s HB4 wheat technology for growth, feed and food, contingent upon receipt of import approval in Brazil. Regulatory processes for HB4 wheat also continue to advance in the United States, Uruguay, Paraguay, Chile, Colombia, Brazil, Indonesia, Australia, New Zealand and South Africa.

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Synertech Industrias S.A.

Synertech, acquired as part of the Rizobacter Acquisition in 2016, was formed by Rizobacter in partnership with De Sangosse for the production and commercialization of micro-beaded fertilizers. Rizobacter, together with De Sangosse, operates its own production plant for Synertech in Pergamino with a production capacity of 50,000 tons of micro-beaded fertilizers annually.

Moolec Science Ltd.

On March 16, 2021, we acquired a 6% ownership interest in Moolec Science Ltd., a molecular farming company pursuing a hybrid concept between plant and cell-based technologies for the production of animal-free food solutions. In consideration for the acquisition, we transferred to Moolec the license to use and commercialize GLA/ARA safflower patents.

Non-Joint Venture Collaborations

We principally engage in strategic non-joint venture collaborations for product development or with academic entities and internationally recognized research institutions with whom we collaborate in pre-competitive technology sourcing and early-stage research. We pay a percentage of profits to our non-joint venture collaborators according to the stage of development of the technology. In earlier stages, during which our R&D costs are relatively low, we pay a comparatively higher percentage of profits, while in later stages of development, during which our costs are relatively high, we pay a comparatively lower percentage of profits. Our collaborations that focus on product development are primarily driven by our commercial interest in a particular product that we hope to research and develop on a preliminary basis before including it in our product pipeline.

Rizobacter has a strategic alliance with Syngenta, one of the leading global companies in the research, development and marketing and sales of seed treatment products and solutions. Syngenta placed their Seed Care Institute in Rizobacter’s principal facility located in Pergamino for the research, development and marketing of Syngenta’s seed treatment products and solutions in Argentina, including Maxim Integral, Maxim Evolution, Suren Plus, Rizopack® 420 Hc, Ekey Top, Funcion Pack and Cruiser Pack. We also purchase from Syngenta seed treatment products including Maxim XL, Maxim Integral, Maxim Evolution, Suren Plus, Compinche, Compinche SX, Tenacius, Tenacius SX, among others. The synergy of the product portfolio produced by both companies allows us to combine the most advanced technologies with a highly efficient service for agriculture producers around the world.

Rizobacter also engages in a strategic partnership with Momentive for the distribution and commercialization of Momentive’s well-known silicone spray adjuvant, Silwet, in Argentina, Brazil, Bolivia, Uruguay, Mexico and Paraguay. Rizobacter additionally partners with Valent Biosciences, a global leader in developing, registering, manufacturing and commercializing biorational products in the areas of public health, forestry, crop protection, plant health, plant growth regulation and post-harvest treatments, focusing on the development, marketing and distribution of next generation inoculant technologies and products in the United States, Argentina, Canada, Mexico and Brazil. Our strategic relationship with Momentive has allowed us to jointly develop the latest generation of agricultural adjuvants and to learn about technologies that add efficiency to agricultural applications. Rizobacter also has exclusive distribution of the Silwet Adjuvant in Argentina, Paraguay, Uruguay, Bolivia and Brazil.

Following our strategic commercial expansion in 2019 and 2020, Rizobacter entered into material distribution agreements with Microbial Biological Fertilizer International PYD LTD (MBFI) for the distribution of several products within Rizobacter´s portfolio in South Africa, and with De Sangosse for the distribution of Rizobacter RIZOLIQ and SIGNUM products in certain European countries.

In addition, Rizobacter entered into an agreement with BIOWISH for the exclusive distribution of certain BIOWISH´s biostimulant products in Latin America, complementing its Crop Nutrition segment with foliar fertilizers.

Rizobacter also executed significant agreements for the provision of formulation services and production with several companies, among which is Summit Agro Argentina S.A.

On September 1, 2020, Rizobacter Argentina entered into a distribution agreement with the U.S.-based company Marrone Bio Innovations, Inc., an international leader in sustainable bioprotection and plant health solutions, to distribute on an exclusive basis a novel biostimulant technology and foliar fertilizer solution in Argentina, Uruguay, Paraguay and Bolivia.

On February 2, 2021, Bioceres Crop Solutions Corp. and Nature Source Improved Plants (“NSIP”) entered into a research and service agreement to design and establish a fast-paced HB4® soybean breeding program in the United States, utilizing NSIP’s advanced analytics and comprehensive suite of predictive breeding technologies and expertise. NSIP is an advanced optimization analytics company dedicated to the genetic improvement and breeding of high-performing plant materials for agriculture.

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Our Parent’s collaboration agreements that focus on technology sourcing are primarily driven by our ability to accelerate, in a capital-efficient manner, the development of promising technologies discovered by internationally recognized scientific groups or institutions. Examples of our Parent’s most important collaborations of this nature include CONICET and the National University of the Litoral in the creation of seed traits with a focus on transcription factors for the development of drought-tolerant transgenic plants, including the grant to us of partial ownership of the HB4 patent families, and the University of Illinois in accessing herbicide tolerance technology for use in the fields of soybeans and alfalfa.

Third-Party Channels

We license our technologies to third parties which have product development capabilities or a market presence outside of our core geographic areas and with which we have developed and maintain strong relationships. For example, through Verdeca, we entered into a series of agreements with GDM Seeds (Grupo Don Mario) for the licensing of our biotechnology related to soy and have granted various licenses to TMG for our biotechnology related to soy for sale in Brazil, Paraguay and Uruguay.

Additionally, we celebrated various distribution agreements to market and distribute our products, including Breet Young in the United States and Canada, MBFI in South Africa, Serbios in Italy and East Europe, De Sangosse in France, and Syngenta in Russia and Ukraine. We also celebrated various agreements to distribute third party products of key suppliers, including Syngenta, De Sangosse, Citozyme, Summit Agro and Marrone, among others.

Significant Transactions

In addition to the business combination, we have concluded the following three transactions that are of significance to our business model and growth trajectory:

Rizobacter Acquisition

On October 19, 2016, RASA Holding, our wholly owned subsidiary incorporated in Delaware, acquired 20,004,000 shares of Rizobacter, an Argentine company located in Pergamino, Province of Buenos Aires, representing 50.01% of the outstanding capital stock (the “Rizobacter Acquisition”). The total purchase price was US$57.3 million. In addition, a contingent payment of US$17.3 million may be payable by the Parent to certain of the selling shareholders of Rizobacter subject to precautionary measures and related ongoing litigation. See “Item 8. Financial Information—A. Consolidated Statements and other Financial Information—Legal Proceedings—Contingent Fee Payment of US$17.3 Million Related to Precautionary Measure (Medidas Cautelares) in Connection with the Rizobacter Acquisition.” The acquisition of Rizobacter was approved by the Argentine Antitrust Commission (Comisión Nacional de Defensa de la Competencia or CNDC) on August 25, 2017.

On October 22, 2018, RASA Holdings, our wholly owned subsidiary, entered into the Rizobacter Call Option Agreement. On March 14, 2019, we exercised the Rizobacter Call Option to acquire an additional 29.99% of the capital stock of Rizobacter, thereby becoming owners of 80% of the capital stock of Rizobacter.

With 44 years of history, Rizobacter, which we acquired in 2016, has developed a leading global position in biological products and a leading ag-input channel for high-value products. Prior to the Rizobacter Acquisition, we developed a partnership relationship with Rizobacter through jointly owned Bioceres Crops S.A. (formerly Semya), a product development initiative focused on identifying customized seed treatments for our Integrated Seed products. The Rizobacter Acquisition has allowed us to combine Rizobacter’s experience in microbials with our pre-existing pipeline of germplasm and trait assets and places us in a unique position in biological assets for key row crops, which represent one of the most difficult sets of assets to develop within the ag-input value chain, resulting in one of the highest-value segments within the sector. Rizobacter also provides a unique platform that facilitates the commercial launch of new products and the continued development of our pipeline of innovations.

Monsanto-Led Investment

In April 2016, our Parent entered into a convertible loan agreement with Monsanto (through Monsanto Argentina, S.R.L.) and BAF, as a financial investor, pursuant to which promissory notes were issued granting Monsanto and BAF participation rights to subscribe to a total nominal value of US$17.55 million of our Parent’s shares in a future qualified or non-qualified financing, and received US$15 million net proceeds, after applying a 17% subscription discount. In March 2018, a total of 2,218,710 ordinary shares of our Parent were issued to Monsanto and BAF, which terminated and released all of our debt obligations under the convertible loan agreement, as well as the related promissory notes and participation rights agreements.

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Verdeca acquisition

In February 2012, we signed a joint venture agreement with Arcadia Biosciences. The resulting joint venture, Verdeca, in which we held a 50% equity interest, is engaged in the development and deregulation of soybean traits.

Our joint venture agreement provides for each of the partners the right to license or sublicense their trait technologies to Verdeca for use in soybeans. Accordingly, our Parent has agreed to grant an exclusive, worldwide, sublicensable license to Verdeca for our Parent’s HB4 technologies for use in soybeans. The first product in the Verdeca pipeline is our Parent’s HB4 trait.

In April 2015, Verdeca entered into an agreement with Dow AgroSciences to develop and commercialize innovative soybeans traits.

On November 12, 2020 we acquired from Arcadia Biosciences the remaining ownership interest in Verdeca.

Verdeca also entered into a series of agreements with GDM Seeds (Grupo Don Mario) for the HB4 technology licensing followed by a recent collaboration agreement which expanded to North America with focus on the Dakotas and Minnesota, targeting approximately 10 million hectares highly prone to water deficits. The North America agreement contemplates a joint product development and commercialization program, focusing on maturity groups II and below. This agreement complements on-going collaboration efforts with TMG in Latin America, for maturity groups VI and above, which, together with Bioceres’ on-going programs, provide the full scope of maturities utilized for soy production around the globe. GDM is a global leader on soybean genetics with a growing presence in the United States. TMG is one of Brazil’s leading soybean players.

Our Business Model

Our business model is driven by three key pillars: technology sourcing, product development partnering and production and market access.

Technology Sourcing

The technology sourcing stage of our business model involves identifying and collaborating with leading academic and independent research institutions at the early stages of technology development. We have also developed a well-established R&D team with in-house laboratories and pilot scale capabilities that continuously innovates in the field of biological-based products.

We employ an open-architecture approach to technology origination which involves identifying and accessing promising technologies from third parties and forming strategic and capital-efficient partnerships that leverage each party’s capabilities to quickly bring innovations to market. By leveraging the discovery efforts of leading global research institutions and scientists with whom we have developed and maintained strong relationships, we are able to reduce the risks and expenses associated with biotechnology discovery and development and increase our ability to develop multiple products.

We also entered into R&D services agreement with INDEAR, our Parent co-owner technology sourcing subsidiary and product development subsidiary, for any technology INDEAR develops or sources concerning crop productivity. INDEAR searches for collaborators who are pursuing innovative technological concepts that are consistent with our business strategy and have generated promising preliminary evidence but have yet to be validated for their intended purposes. In these collaborations, INDEAR employs its advanced biotechnology capabilities and specialized expertise to leverage the technology discovery process already undertaken. These technology sourcing activities are financed mainly through public grants and other capital efficient sources meant to limit financial exposure.

Product Development Partnering

The product development partnering stage of our business model involves identifying and collaborating with strategic partners and creating joint ventures to develop and bring products to market. We have created an extensive network of regional and international relationships in the agricultural sector, from which we source partners for our product development initiatives. In selecting a partner, we look for internationally recognized entities that can provide complementary funding, technology, sourcing, product development capabilities, intellectual property and market access. For more detail about the “proof of concept phase,” see “—The Technology Sourcing and Product Development Timeline and Process.”

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Production and Market Access

The production and market access stage of our business model focuses on leveraging our shareholder base and proprietary sales channels to access and establish multiple pathways to markets and maximize market reach, and to develop innovative technologies. Once a technology obtains the required regulatory approvals, we, our joint ventures, or our technology licensees commercialize products that employ such technology and sell them to global end-users through our shareholder base and proprietary sales channels. We also complement our direct sales efforts by licensing our technologies to other companies for inclusion in their products or production systems. This complementary approach seeks to widen the presence of our technologies in the global agriculture market and increase our revenues.

The Technology Sourcing and Product Development Timeline and Process

The technology sourcing and product development process for our products and technology, generally include the following phases: discovery, proof of concept, early development, advanced development, pre-launch and product launch.

The development and integration of technologies into products that can be commercialized is a lengthy process, which varies depending on the complexity of the technology being developed and the type of crop involved. Furthermore, the length of the technology development process impacts the uncertainty of successful product development outcomes. For example, during the technology sourcing and product development process, a technology may fail to address the performance criteria required to advance to later development stages or the development of a certain technology may be affected by changes in the competitive landscape.

The below chart sets forth an annual estimated timeline for the development of biotechnology traits (GM and Non-GM) and biological-based products, based on the phases described above:

The estimated timelines of phase duration are based on our experience and estimates. The phases may overlap during the product development cycle and the total development time for a particular product may be longer or shorter than the duration presented above, depending on a range of factors including the type of crop and trait involved and the resources available or devoted to our development of the product. For example, although the process for developing seed traits or biological seed treatments is relatively similar, the two differ significantly in terms of development timelines. Obtaining regulatory approval for GM seeds is a far more comprehensive and lengthy process than for biological seed treatments.

Discovery

The first phase in the technology development process is discovery, or the identification of candidate genes or genetic systems, metabolites, or microorganisms that are potentially capable of enhancing specified plant characteristics. For the most part, we rely on collaborators, such as leading research institutions or private research groups, to perform this early-stage discovery work, and we then advance the work through our technological platforms and processes. It is at the discovery phase that we generally negotiate our rights with respect to the intellectual property generated by our third-party collaborators, which can include partial ownership and exclusive licenses for commercial development. The discovery phase typically lasts 18 months, although it may range from as few as six months for microbial solutions to as many as 36 months for plant GM traits.

Proof of Concept (Phase I)

Upon successful validation of the technologies in model systems (in vitro or in vivo), promising technologies graduate from discovery and are advanced to a phase referred to as “proof of concept.” In this phase, the technologies are integrated into, or tested in, target organisms to verify their efficacies using greenhouse trials, field trials, or both.

The goal of the proof of concept (PoC) phase is to validate a technology within the targeted organism before moving forward with technology scaling-up activities or extensive field validation, which minimizes the risk of investment in technologies that may not prove

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viable. The PoC phase is typically conducted by us as part of our research collaboration with relevant groups and represents the last phase of our technology sourcing collaborations. We and our Parent generally file for intellectual property protection at this stage. See “—Intellectual Property.” In our experience, the PoC phase typically lasts 36 months, although it may range from as few as six months for a microbial solution to as many as five years for plant GM traits.

Early Development (Phase II)

The goal of the early development phase is to identify the best use of a technology and to define our performance concept. The critical point at this phase are field trials, for both biotechnology traits and microbial-based solutions. Field tests are expanded to evaluate various permutations of the technology in multiple geographies, growing cycles, conditions, application rates and other characteristics that allow us to draft the first MVP (Minimal Viable Product) of the technology.

At the end of the early development phase and before initiating the most capital-intensive stages of product development, we typically identify strategic partners for further development of our technologies. For collaborations involving multiple technologies within a pipeline, we often create new entities or joint ventures with our strategic partners. Examples of such joint ventures are Trigall Genetics and Synertech, dedicated to wheat technologies and micro-beaded fertilizers, respectively. Single or limited product development collaborations are often structured using framework agreements.

Advanced Development (Phase III)

In the advanced development phase, extensive tests are used to demonstrate the effectiveness of the technology for our intended purpose. In the case of GM traits and microbial-based solutions, the process of obtaining regulatory approvals from government authorities is also initiated during this phase, and tests are performed to evaluate the potential environmental impact of the technology. For solutions involving microbial fermentation, industrial-scale runs are conducted. In Argentina and some other countries in South America, we are primarily responsible for undertaking this phase of product development. Similarly, our strategic partners usually lead the advanced development and regulation activities in other markets in connection with the applicable contractual arrangements.

The advanced development phase typically lasts about 24 months, with some projects requiring substantial regulatory data taking from three to five years.

Pre-Launch (Phase IV)

The pre-launch phase involves finalizing the regulatory approval process and preparing for the launch and commercialization of the technology being developed. The range of activities in this phase includes pre-commercial production, seed increases, and product and solution testing with select customers. Usually, a more detailed marketing strategy and preparation of marketing materials occur during this phase. In Argentina and some other countries, we are responsible for this phase of product development, while pre-launch activities in other markets are primarily undertaken by our strategic partners. The pre-launch phase may last up to 24 months.

Product Launch

In general, we, our joint ventures and/or our technology licensees carry out the launch and commercialization of the technology, which is the last phase of the technology sourcing and product development process. When we commercialize technology through collaboration partners or licensees, pursuant to the respective agreements, a successful product launch triggers royalty payments, which are generally calculated as a percentage of the net sales generated by the technology and captured upon commercialization. Typically, in this phase, revenues at launch are limited by our ability to make products available, especially when dealing with seed products that need multiple seasons of multiplication before they can satisfy demand.

Our Segments and Key Products

We divide our business into the following three principal segments: crop protection, seed and integrated products, and crop nutrition.

Crop Protection

Our key crop protection products include high-tech adjuvants and a full range of pest control molecules and biocontrol products.

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Adjuvants

Adjuvants increase application effectiveness and target covering of the pest control molecules. Adjuvants are used in tank mixes to facilitate the application and effectiveness of active ingredients, such as insecticides, leading to better performance, reduced rates and lower residue levels. We distribute Silwet, a well-known high-end silicone-based adjuvant, and are currently developing microbially-enhanced adjuvants in partnership with other companies.

Insecticides and Fungicides

We offer a full range of pest control molecules tailored for specific crops. In partnership with Syngenta, we are in the process of formulating and commercializing new stand-alone seed treatments, including fungicides and insecticides, that reduce disease and pest pressure during crop establishment. Furthermore, we are pursuing the development and commercialization of health and nutrition microorganisms, including biological fungicides formulated as seed treatments that control and restrict the growth of pathogenic agents in wheat and barley.

Seed and Integrated Products

The key products of this segment include seed traits, germplasms and seed treatment packs for healthier and higher yielding crops.

Seed Traits

Our seed trait effort is primarily focused on improving plant yields by increasing plant tolerance to abiotic stress, such as drought or soil salinity. This effort is also enhanced by a secondary focus on crop protection and quality traits. We gain access to these technologies through our Parent’s collaboration with the original developers of the technologies or by co-developing new events with our partners. Our most advanced technology in the seed trait area, HB4, helps increase yields by an average of 10% to 20% for soybean and wheat crops under various growing seasons and conditions, including sporadic drought episodes. HB4 is also able to provide higher yield without adversely impacting yields in optimal growing conditions, which is a distinct and important factor compared to other stress tolerance technologies. HB4 has been approved for use in nearly 85% of the world’s total soybean acreage, including in Argentina, Brazil, Paraguay, the U.S. and Canada, with regulatory submissions currently under review in China, Bolivia, Uruguay, E.U., Malaysia and India. In 2020, Argentina’s Ministry of Agriculture granted approval of the Company’s HB4 wheat technology for growth and consumption, contingent upon receipt of import approval in Brazil, which purchases slightly more than 85% of its wheat from Argentina. Argentina is Latin America’s largest wheat producer and the world’s first country to adopt HB4 drought tolerance technology for this staple crop. Submissions for approval for use of HB4 in wheat production have been initiated in Brazil, Uruguay, Paraguay, Chile, Colombia, Indonesia, Australia, New Zealand, South Africa and the U.S.

The charts below show the results of field trials for HB4 wheat and HB4 soybean across varying yield environments.

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Other Traits

Biotech traits are positioned as core assets in our product development efforts. Our soybean trait portfolio includes abiotic stress tolerance, new crop protection platforms for weeds and insects, improved oil profile and nutrient use efficiency among others. For wheat, besides the HB4 technology, we have developed several traits oriented to consumers’ demand, focused on reducing gluten content, resistant starch varieties with lower glycemic index and flour with increased shelf-life.

Germplasms

We currently breed germplasms for soybean and wheat, and plan to advance our elite germplasms by delivering these technologies using proprietary channels. Our soybean breeding program, operated through Bioceres Semillas, produces varieties that are registered or are in the process of being registered in Argentina, Uruguay, Paraguay, and South Africa. Our wheat breeding program is operated through our joint venture, Trigall Genetics, which has exclusive rights to the breeding program of Florimond Desprez, a global leader in wheat genetics.

Seed Treatment Packs

Seed treatment packs comprise high value-added products, produced and commercialized by our subsidiary Rizobacter in partnership with Syngenta Seedcare, which are our flagship soybean products comprising proprietary inoculants and fungicides. We also offer certain customized variations for peanuts, beans and chickpeas. In addition, we are pursuing the development of next-generation biologicals, particularly for seed treatments tailored for specific germplasms, seed traits and environment combinations.

Crop Nutrition

Our main crop nutrition products include inoculants, biofertilizers and micro-beaded fertilizers.

Inoculants

Inoculants are biological fertilizers, broadly using nitrogen-fixing bacteria, which promote growth of leguminous crops such as soybeans and alfalfa. We hold a leadership position in sales of soybean inoculants, with approximately 23% global market share as of June 30, 2021, based on our internal data. We are currently developing our next generation of inoculants, including Bioinductor 2.0 and Extended-Shelf-Life products for professional seed treatment businesses. Additionally, we are developing new biofertilizers, such as plant-growth promoting rizobacteria, for wheat, corn, chickpeas and peas.

Micro-beaded Fertilizers

We produce and commercialize fertilizers based on formulated micro-beads. As these fertilizers can be applied next to the seed at planting, lower doses (three times less volume) are required than conventional fertilizers, resulting in logistical efficiency and environmental benefits, such as preventing contamination of nearby lakes and streams. Currently, our production is focused on Microstar PZ, a starter fertilizer that provides nitrogen, phosphorus, sulfur and zinc to different crops, by allowing immediate nutrient availability and uptake by plant seedlings.

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The following table sets forth the key products, growth drivers, revenue and gross profit, key markets and selected commercial partners for each of our segments:

Note: Gross margin is calculated as total revenue minus cost of sales, divided by total revenue.

Sales and Marketing

Our business model is based on a multi-channel sales structure of (1) direct sales to distributors and end-users via our proprietary sales channels, and (2) non-exclusive licensing of commercial technology to third parties directly or via our joint ventures for incorporation into non-proprietary products.

Rizobacter

Rizobacter commercializes its products with more than 600 distributors and retailers around the world, including Argentina, Brazil, Paraguay, Uruguay, Bolivia, Colombia, USA (Canada and Mexico), Europe (Austria, France, Germany, Italy, Ukraine, among others) and South Africa (Kenya, Nigeria, Ghana, among others). Rizobacter is positioned as a South American leader for certain products, such as soybean inoculants and packs, adjuvants, and pest baits where it accounts for 28%, 29% and 52% of Argentina’s market for each of these product categories, respectively.

As of June 30, 2021, international sales accounted for 24% of our total sales, as the Company continued to effectively execute its international expansion strategy. In addition to distribution network sales, Rizobacter directly caters to other businesses, particularly large end-users, which include growers or seed companies that use Rizobacter products in professional seed treatment products or for other needs. As of June 30, 2021, sales made directly to large end-users accounted for 17% of our total sales.

Bioceres Semillas

Bioceres Semillas is our proprietary commercial channel for seeds, including leading wheat and soybean varieties, selling to a number of distributors and end-users under the Bioceres Semillas brand. Since 2017, Bioceres Semillas has been operated by Rizobacter. This proprietary channel also serves as a competitive driver for third-party non-exclusive licensees of our technology in order to seek a rapid path to market.

Synertech Industrias

Synertech is focused exclusively on the production of micro-beaded fertilizers where their products are commercialized and distributed mainly by Rizobacter and its distribution channel locally and abroad, taking advantage of their extensive distribution capabilities. Synertech targets different geographies, at a global level, for product commercialization, including but not limited to major Latin American markets.

Third-Party Channels

We also rely on third-party channels for the commercialization of our proprietary technologies and licenses, either directly or through our joint venture companies, among participants in the biotech seed and agro-industrial market. We license such technologies

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to our joint venture partners and large companies active in the biotechnology and agro-industrial space, in each case for incorporation into non-proprietary products and subsequent sale to end-customers. Subsequent sales of any products incorporating our technology generate royalty income.

Third-party channels for commercialization and development of new soybean varieties across the Americas include TMG and GDM seeds.

Customers and Contracts

Below is a description of our principal customers and contracts across our main segments.

Seed and Integrated Products

In the year ended June 30, 2021, we sold our seed and integrated products to customers in Argentina, Uruguay, France and South Africa, among other countries. Our top five customers in our seed and integrated products segment represented 21% of our total revenue in this segment for the twelve-month period ended June 30, 2021.

Crop Protection

In the year ended June 30, 2021, sales from our crop protection segment were made to customers in Argentina, Brazil, Paraguay, among others. Our top five customers in our crop protection segment represented 19% of our total revenue in this segment for the year ended June 30, 2021.

Crop Nutrition

In the year ended June 30, 2021, sales from our crop nutrition segment were made in Argentina, Brazil, Paraguay, Bolivia, United States as well as other international markets. Our top five customers in our crop nutrition segment represented 16% of our total revenue in this segment for the year ended June 30, 2021.

Market Opportunity

Studies have reported that agriculture constitute one quarter of global greenhouse gas (GHG) emissions

However, a recent study by Nature Food reports that food systems contribute roughly one third of global emissions, significantly higher than other studies that put more narrowly agriculture’s emissions at roughly this one quarter of the global total. The study came to this conclusion by defining “food systems” with a broader view of food-related activities, encompassing its production, packaging, distribution, and other activities. Food’s carbon challenge is even bigger than previously realized when defined in this way.

More farmland is needed going forward to feed a growing population at the same time that crop yields are falling on existing farmland, due to climate change

The latest Intergovernmental Panel on Climate Change Report indicates with high confidence that “Climate change, including increases in frequency and intensity of extremes, has adversely impacted food security and terrestrial ecosystems, as well as contributed to the desertification and land degradation in many regions”. Concurrently, land use, including deforestation, agriculture and ruminant livestock, account for one quarter of anthropogenic GHG emissions. While climate change will have an impact on crop yields and nutritional value, decreased agricultural outputs will fail to meet food demand as the world’s population grows in the coming decades. Consequently, agriculture faces a major challenge: to enhance the resilience of global food systems and at the same time move towards carbon neutrality.

Most studies agree that the impact of climate change on crop yields will be negative from 2030 onwards, and nearly half of those predict yield reductions greater than 10% beyond 2050.

According to the World Resource Institute, the unprecedented challenge of preserving our global environment today means we can no longer afford to increase agriculture production at a cost to environmental stability. This scenario leaves humanity with essentially five avenues to reconcile agricultural productivity with environmental sustainability: (1) Reduce growth in demand for food and other

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agriculture products. (2) Increase food production without expanding agricultural land. (3) Increase fish supply. (4) Reduce GHG emissions from agricultural products. (5) Protect and restore natural ecosystems.

Bioceres endeavors to lead the GM4GOOD movement. In the 1990s biotechnology was perceived as enabling chemical companies to sell more of the products they commercialized, glyphosate and glyphosate tolerant GMOs, this being perhaps the most emblematic example within this category. Today, genetic engineering, from genetic transformation to gene editing, can help us avoid the use of chemicals, achieve more climate resilient crops, and improve a number of different quality attributes important for human health and well-being.

Sustainability and Health as Trends in Consumer Behavior

Consumer collective consciousness is taking a key role in driving developments in favor of sustainable foods and can redefine the entire food system back to raw material origination.

According to thinkwithgoogle.com, 75% of the public agree that if we don’t change the way we live in the next 10 years, the state of the planet will put the survival of future generations in jeopardy, with climate change the second most concerning topic after health. During 2020 in the UK, the growth of Google searches showed that consumers have become increasingly more interested in sustainability issues: +92% carbon neutrality, +89% food waste, +60% recycling and plastics and +37% sustainable diets.

Consumer attitudes and behavior are increasingly shifting towards more sustainable lifestyles, with the expectation that brands “do good” also. In 2020, Whole Foods’ number one predicted trend was a focus on regenerative agriculture. Jeanette Mellinger, head of Uber Eats user research, reported that the food delivery service is experiencing an increase in socially conscious and health-conscious dining. The New York Times’ 2020 predictions included an increasing focus on the planet’s health, from vegan food to regenerative agriculture and packaging.

The rise of the eco-friendly food consciousness shows new generations most likely to be thinking about sustainability while shopping. In a recent Forbes report, “The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail,” 62% of Generation Z prefers to buy from sustainable brands, similar to those of Millennials. 54% of Generation Z stated that they are willing to spend an incremental 10% or more on sustainable products, with 50% of Millennials reporting the same. This contrasts with 34% of Generation X and 23% of Baby Boomers. The trend indicates that the desire and willingness to spend on sustainability is increasing with each new generation.

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Research from the New York University Center for Sustainable Business (CSB) reaffirms this generational shift. In a 2019 Fortune article, the CSB found that 50% of sales growth among consumer-packaged goods (CPG), from 2013 to 2018, came from sustainability-marketed products, despite representing under 17% of the market. CSB Director Tensie Whelan told Fortune, "Across virtually every category of consumer-packaged goods, sustainability is where the growth is, which I think tells you something about where consumers are... if you look at our data there is a massive shift in the last five years."

Thought leaders, investors and activists are converging on the agricultural element of climate change. Microsoft co-founder and philanthropist Bill Gates responded to questions about his farmland investments during an ‘Ask Me Anything’ (AMA) session on social media platform Reddit affirming that, “The agriculture sector is important. With more productive seeds we can avoid deforestation and help Africa deal with the climate difficulty they already face. It is unclear how cheap biofuels can be, but if they are cheap it can solve the aviation and truck emissions.” The film “We are ignoring natural climate solutions” from activist Greta Thunberg, a Gen Z influencer with more than 12 million followers on Instagram, emphasized the simple idea that nature must be used to repair a broken climate.

As consumers shift into new consumption habits, companies have speculated whether these changes would be sporadic and temporary, or permanent. According to PwC’s June 2021 Global Consumer Insights Pulse Survey, trends in consumption around sustainability are not only consistent year over year, but they are also increasing. PwC reports 54% of those surveyed buy from companies that are conscious and supportive of protecting the environment, and 55% choose to buy products with a traceable and transparent origin.

Traceability of products from “farm to fork” that reduces information asymmetry is becoming an increasingly important factor for consumers. To rebuild public confidence in the entire food chain as well as deliver high quality, safe, and nutritious foods, whole chain traceability from farm to end-user is a crucial component to the overall food quality assurance system. An increasing interest in shorter food supply chains with more information and direct contact with producers is gaining in importance. This is advancing the need for new and innovative traceability systems and empowering active consumer involvement in the food supply system. Next generation technologies are now being adopted to enable traceability in food supply chains. The use of blockchain technology to trace the entire lifecycle of food products from origin through every point of contact on its journey to the consumer bolsters credibility, efficiency and safety. Several challenges, including the need for internet enabled devices throughout the food supply chain to capture data and transfer the data to the blockchain, are of current focus.

The Rise in Importance of ESG to Food Producers

In addition to consumer demands and with the significant increase in ESG investing, the food industry has made a concerted effort toward adopting ESG standards. Companies are prioritizing ESG initiatives to attract employees, consumers, customers, and investors. These efforts are creating long-term financial opportunity and mitigating companies’ downside exposure to ESG risks including GHG emissions, water scarcity and child labor. ESG policies and programs can also enhance the competitiveness of food companies in a crowded market.

The food industry is taking greater action and ownership over its ESG risks and opportunities than is generally perceived. In fact, the pace at which companies are executing on ESG strategies has accelerated over the past few years. ESG principles including greater ownership of the supply chain, climate control actions, and a shift in portfolio mix toward healthy foods are increasingly being adopted.

In both the United States and Europe, ESG reporting is anticipated to become mandatory for both private and public companies in the near future. Rating agencies are already evaluating ESG risks and portfolio managers must adhere to stringent investment requirements or face greenwashing allegations, putting pressure on companies to report or not be invested in.

In conclusion, regenerative agriculture and new carbon programs are expected to drive changes in production agriculture. Some changes in production practices will be driven by a combination of regulatory, consumer, farmers and capital markets pressures. Regenerative agriculture is increasingly discussed as a solution to environmental challenges. But the solution challenges the efficiency gains made by advances in agricultural practices and genetic and chemical technologies over the past few decades. For many farmers, the reduced yield and efficiency losses make a shift in the near-term not financially viable. However, new business models and technologies are emerging to help solve the economics of regenerative and sustainable practices.

The HB4 Program: Bioceres systemic approach to empower growers and consumers alike

Bioceres is rolling out technology which significantly increases yields under drought conditions and impacts positively the environment through water management and GHG emissions.

HB4 is integrated with top-selling germplasms and other biotechnologies, as well as health and growth promoting microorganisms contained in the Company’s integrated seed products. The standard industry approach follows a bundling approach, whereby traits are

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broadly incorporated into breeding programs, and then seeds, excluding hybrids, are treated by growers or distributors with standard fungicides and insecticides. Our strategy for proprietary products works differently. Instead of bundling products together, we co-develop seeds, germplasm and biological seed treatments for specific regions right from the start.

Events like HB4 can only be launched after a time-consuming breeding process to develop varieties that combine the technology with locally adapted, elite germplasm. We have been developing varieties that specifically target areas identified for maximum trait performance. We have developed a prediction model based on HB4 field data to predict performance in all crop growing areas. The model considers historical yield data in each specific geographic area within each of key targeted countries and predicts the incremental yield of the HB4 technology.

According to the Brazilian Institute of Geography and Statistics and The Ministry of Agroindustry of Argentina, our key markets for HB4 Wheat in the Southern Cone comprises approximately eight million hectares of wheat planted per year, including Argentina, Latin America´s largest wheat producer, and the world’s first country to adopt HB4 drought tolerance technology for this staple crop, Brazil and Uruguay. For HB4 Soy, Argentina, Brazil and the United States represent roughly 80% of the global soybean production footprint.

In order to seize the opportunity ahead, we obtained the official wheat and soybean production statistics in each of the aforementioned countries between 2015 and 2019/2020. We used the average yield data to estimate the yield benefit that HB4 could have produced. We then used the average price of soybean and wheat for the ten-year period to calculate the expected monetary benefit.

Subject to the conventional non-binary biotechnology solutions pricing scheme, where 75% of the value creation remains on-farm and 25% goes off-farm, the maximizing of the price times quantity equation will define the supply and demand equilibrium for the technology. We clearly expect the target area to find higher correlation in the more drought prone areas, highlighted in darker blue in the heat maps below. The breeding program testing network was designed specifically to validate the performance of the HB4 varieties in the target areas.

HB4 Soy has received approval in over 85% of the global soy market, including Argentina, Brazil, the USA and Canada. The commercialization of HB4 Soy in Argentina, where the Company has its more advanced breeding efforts, is subject to the approval by China, as it is the main destination market for soybean production in the Americas. On top of the Argentine breeding efforts, recent collaboration on HB4 Soy with Grupo Don Mario (GDM) expanded these efforts to North America and focus on the Dakotas, Minnesota and southern Canada, targeting approximately 10 million hectares highly prone to water deficits. The North America agreement contemplates a joint product development and commercialization program, focusing on maturity groups II, and below. This agreement complements on-going collaboration efforts with TMG in Latin America, for maturity groups VI and above which, together with Bioceres’ on-going programs, provide the full scope of maturities utilized for soy production around the globe. GDM is a global leader on soybean genetics with a growing presence in the United States. TMG is one of Brazil’s leading soybean players.

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During the first quarter of 2020, Argentina’s Ministry of Agriculture granted approval to the Company’s HB4 wheat technology for growth and consumption, contingent upon receipt of import approval in Brazil, which purchases slightly more than 85% of its wheat from Argentina. Argentina is Latin America’s largest wheat producer and the world’s first country to adopt HB4 drought tolerance technology for this staple crop. Submissions for approval of HB4 use in wheat production have been initiated in Brazil, Uruguay, Paraguay, Chile, Colombia, Indonesia, Australia, New Zealand, South Africa and the U.S.A.

Although approvals are pending, Bioceres has initiated a program, named “HB4®-Program”, initially oriented to multiply HB4 material with select growers. In addition to multiplying seed quantities, the program is designed to further evaluate product performance, determine product positioning, and conduct field days to showcase the HB4 Material products to different stakeholders in the agriculture industry. Under the HB4 Program, additional inputs to HB4 Material are also contributed with other products, from our current portfolio, that further reduce a grower’s carbon footprint under the program. For this purpose, micro-beaded fertilizers that “spoon-feed” crops and reduce by one quarter the use of conventional fertilizers, nitrogen fixing inoculants acting as biological fertilizers or high-tech adjuvants that reduce the need for agro-chemicals, among others, are of great value. In addition to mitigating production losses during drought periods, HB4 technology also facilitates double cropping, which seasonally rotates soy and wheat, an environmentally friendly farming system that is otherwise limited by water availability. When combined with soil regenerative practices, such as no-till farming, a share cropping system made possible by HB4 seeds captures more carbon than conventional growing practices. Substantially higher crop yields with HB4 also reduce the need to expand agriculture’s global footprint, which often entails deforestation, while aiding in the reversion of fragile agricultural land back to native ecosystems characteristics.

Although the complementary technologies surrounding the integrated HB4 program have the potential to target several UN Sustainable Development Goals (SDGs), the HB4 technology stand alone fully address:

(2)ZERO HUNGER

HB4 targets marginal drought-prone areas, increasing yields and empowering regional economies.

(13) CLIMATE ACTION

The increased yield from crops results in a carbon sink which helps to remove carbon from the atmosphere by containing it in a solid medium, reducing CO₂ concentration and associated climate change impacts.

Digital β-platform

The HB4 Program employs robust, closed growing systems that are combined with a high level of traceability via state-of-the-art digital farming technologies and strong stewardship to ensure environmentally friendly farming practices. Growers sowing HB4 seed have access to a satellite-based crop image app, a weather monitor app and a crop scouting app. The purpose of these apps, particularly the crop image app, is to provide a tool to keep track of performance differences between fields planted with the HB4 Material and a control group of neighboring fields without the technology package. At this stage of the product development process, the digital apps are well suited to provide customer support. The platform can facilitate recording field activities and equipment data integration as well as refine our products’ positioning based on field performance. It is expected that the digital interaction will provide traceability for an identity-preservation production system, from farm to fork.

Traceability is a fundamental value for Bioceres. For this reason, we consider it transversally in all the products and stages of our processes, and in the customer experience, making use of different integrated technologies to be able to speak of comprehensive traceability. The HB4 Program, with all its components, allows farmers to experience the benefits of using the latest technologies available in the Ag world. The use of IoT devices integrated with Blockchain provide an unmatched capacity to guarantee the trustworthiness and autonomous collection and subsequent management of data, to be able to act on it, or to train neural networks (AI) to do so. Bioceres is integrating crop monitoring and inventory surveillance tools, including a network of sensors, to its native proprietary platform on blockchain (and also analyzing a suite of possible complementary services and products like silobag lances, environmental sensors, weather stations, cross selling of satellite internet, among others). This should allow (1) growers to track productivity and environmental KPIs for real time decision making and provide consumers with full visibility on low-carbon footprint farming practices and grain processing, and (2) Bioceres to boost big data gathering and analytics to an increased sustainable and nutritional, enriched food portfolio through the delivery of productivity and quality traits developments and biological customized solutions to growers.

The growth of the HB4 Program follows a strategy that contemplates the development of new products and services that will allow Bioceres to further differentiate its products and services when providing a comprehensive technological experience to farmers and consumers.

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Operational Indicators

The identity-preservation production system requires having contracts with growers committed to maintaining the identity of the crop under a full seed production offtake agreement. Under these agreements, Bioceres contributes HB4 integrated seeds and other goods to growers for a pre-agreed price (based on prevailing market prices), which are deducted from the service fees paid to growers at the time of harvest for the seed multiplication services provided. On-farm activities are followed by a selection process, where grain that meets seed quality standards is stored as seed inventory for the next cycle, while the rest is categorized as commodity dry products (grain). The system includes a contract with processors that agree to process the qualifying grain and channel it to a selected market. Managing the production system logistics as well as the contractual requirements with farmers, processors and seed treatment plants will require a dedicated team. In FY21, during the ongoing winter crop season in Argentina, Bioceres planted approximately 55,000 hectares to ramp up seed inventories, in addition to 7,000 hectares planted in the fiscal fourth quarter of 2020. Our ramp-up of HB4 drought-tolerant soybean varieties remain on track, with approximately 23,000 hectares harvested in the Southern Cone, compared to 3,000 hectares during the same period last year. Growers were up 832%, to 373, resulting in a 90% costumer repeat with 225 users digitally onboard with automated contracts through SAP. From a financial perspective the program resulted in a total of 75 tons of grain under management, $8.3 million in goods contributed and $28 million total capital turnover during fiscal year 2021.

The HB4 program will enable food production companies and retailers the opportunity to offer consumers carbon neutral foods, in addition to other environmental benefits they increasingly desire. Most importantly, the value proposition of the technologies we deliver on-farm is such that there is no need to translate sustainability into higher costs for consumers, making sustainable foods widely accessible. For example, during 3Q21 Bioceres signed an agreement with the upscale consumer brand Havanna to develop and rollout HB4 wheat-derived products with improved environmental footprint and farm-to-fork traceability.

The program sets a clear opportunity for Bioceres to further maximize HB4 value creation by potentially developing: (1) Origination agreements with grain traders to offload Inventories, (2) feature raw material origination for processors, and (3) branded goods with reduced ecotoxicology profiles under fully traced grain sourcing, increasing its participation in the total volume of the supply chain and on the way collecting additional margins.

The information above regarding market opportunities for HB4 Soy and Wheat, is not yet realized and should not be relied upon as being indicative of future results. Readers of this report are cautioned not to place undue reliance on the potential market opportunities. No independent third party has compiled, examined, or performed any procedures with respect to the potential market opportunities related to HB4 Soy and/or HB4 Wheat, nor has any third party expressed any opinion or any other form of assurance on such information or its achievability, and no independent third party has assumed responsibility for, or claimed any association with, the potential market opportunities. Inclusion of the potential market opportunities in this report should not be regarded as a representation by any person that the results contained in the potential market opportunities will be achieved. We do not intend to update or otherwise revise the potential market opportunities to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error. Furthermore, we do not intend to update or revise the potential market opportunities to reflect changes in general economic, industry or technological conditions. Additional information relating to the principal assumptions used in preparing the potential market opportunities is set forth below. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Certain estimates of market opportunity included in this report are based on assumptions that are inherently uncertain and subject to risks and uncertainties that could have a material adverse effect on our business, operating results and financial condition,” for a discussion of various factors that could materially affect our financial condition, results of operations, business, prospects and securities.

Competition

The market for agricultural biotechnology products is characterized by intense commercial and technological change and we face significant direct and indirect competition in each of our business segments. The crop productivity sector is highly competitive and includes large companies, such as Bayer, BASF, Corteva, Novozymes, and Syngenta AG. In order to provide customers with the most advanced products, companies in the crop productivity sector must continuously invest substantial resources in the research and development and marketing efforts of biotech products.

Despite Rizobacter’s leading position in the inoculant business, it is a highly competitive market. In 2011, Novozymes acquisition of Nitragin positioned it as the second largest player in the sector, representing a 15% market share according to internal projections. Similarly, Bayer’s acquisition of Biagro in 2014 positioned it as the fourth largest player in the sector, representing a 7% market share according to internal projections. Other important competitors include Nova and Becker Underwood, each of which represents a 11% or less market share according to internal projections

Competition in the seed and integrated products sector extends to each of the components that we provide for our integrated products. We face competition for our seed traits from other companies, such as Evogene Ltd., that engage in R&D and licensing

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technology to customers. We also face competition for our proprietary germplasm from other seed producers who produce their own germplasm, such as Don Mario.

Rizobacter remains a leader in the Argentine adjuvants market with 29% of market share, differentiating itself year after year by introducing new quality products that allow us to gain competitive advantage in a competitive market. Additionally, the Brazilian market is a strong adjuvant market due to the growing crop protection chemicals market along with the strong adoption trend of improved technologies in cultivation crops. Rizobacter captured this opportunity throughout the B2B strategy implemented and the channel coverage strategy followed during the last years. North America, followed by Europe, are the largest markets for agricultural adjuvants at present, and they are expected to account for a significant proportion of the market for Rizobacter in coming years.

Within the fertilizer market in Argentina, Rizobacter’s focus is the phosphorous market. In this market, Rizobacter participates with a specialty and markets a product that is used at substantially lower doses than the rest of the competitor’s products and that has a competitive advantage in terms of storage and logistics. We are leaders in this niche followed by Recuperar, FYO, Red Surcos, among others. In Brazil, farmers are overcoming cultural barriers to adopt new technologies, particularly considering the logistics and storage advantages of our niche fertilizers for countries with large geographic extensions. We also expect a potential synergy with biological products and new integrated launches in the Brazilian market.

We believe that the key competitive drivers in the crop productivity industry are proven performance, customer support and value of the product, which encompasses the price of the seed as well as pre- and post-sale support to secure overall customer satisfaction. We believe that our long track record as a technology provider, as established through the Rizobacter group of brands, our strong relationships with growers in South America, and our reputation for using advanced science and technology in the development of innovative products provide us with a strategic advantage in the markets in which we compete. As a result of the integrated and specialized products and services we offer, our principal competitors are, in many instances, some of our third-party collaborators, joint venture partners and clients. We believe that in order to stay competitive and maintain our leadership position we must continue to offer access to market-ready platforms to our third-party collaborators, joint venture partners and clients in order to achieve R&D goals in mutually beneficial ways.

Intellectual Property

Our success depends mostly on our ability to obtain and maintain intellectual property protection of our products and technologies related to our business, defend and enforce our intellectual property rights (in particular our patent rights, plant variety, trademarks and trade secrets), preserve the confidentiality of our intellectual property and operate without infringing valid and enforceable intellectual property rights of others.

We seek to protect our proprietary products, technology and trade secrets, in part, by entering into confidential disclosure agreements with our employees, consultants and potential and actual third-party collaborators. By protecting our proprietary technologies, we are able to offer our customers and partners unique products that they cannot obtain from our competitors and to limit our competitors from using technologies that we have developed or exclusively or non-exclusively licensed from other parties.

Our licensed and owned patents for the HB4 family expire in 2039 and 2040, respectively, for the Coxc5-1 family in 2025 and for the HB10 family in 2026. We are the exclusive sublicensees and non-exclusive licensees of the following patents: rGRF3 technology patents which expire in 2033; NUE technology patents which expire in 2026; WUE technology patents which expire in 2030; herbicide resistant patents which expire in 2028; LXR®, a delayed senescence technology which expires in 2028; Intacta RR2 PRO technology, which expires in 2022;  ZFP® technology, which expires in 2033; RS (Hexapolid and Tetraploid) technology which expires in 2032; RG (Reduced gluten) technology which expires in 2036; OX technology which expires in 2037; PlantArcBio technology which expires in 2042; and UHC technology ultra-highly concentrated bacterial liquid soybean inoculant technology, which expires in 2040.

In 2003, our Parent entered into an Hahb 4 research and development agreement with CONICET and the National University of the Litoral, under which they became equal owners of the patents derived from their research activity in Hahb 4 gene, which we refer to as the 2003 Hahb 4 patents. Under this agreement, subsequently amended in 2010, our Parent financed the Hahb 4 research activities performed by CONICET and the National University of the Litoral in exchange for an exclusive license to commercially exploit their rights in the 2003 Hahb 4 patents. Other than the commercialization of a promoter element used in connection with our HB4 modified gene trait, we do not expect to commercialize the Hahb 4 technology or 2003 Hahb 4 patents. The Hahb 4 promoter element can be used to initiate expression of the modified HB4 gene.

In 2012, our Parent entered into a separate agreement with CONICET and the National University of the Litoral for the ownership and licensing rights of additional patents for development of our modified HB4 gene trait, which we refer to as the 2012 HB4 patents. Pursuant to this agreement that was subsequently amended in 2020, our Parent owns 40% of the 2012 HB4 patents, and CONICET and the National University of the Litoral each own 30%. In addition, CONICET and the National University of the Litoral granted the

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Parent an exclusive license to commercially exploit their respective rights in the 2012 HB4 patents. The license related to additional patents under the 2012 agreement will remain in force until the expiration of the last 2012 HB4 patent in 2033, unless terminated earlier in accordance with the terms of the agreement.

The main countries in which we seek patent protection are in the United States, Canada, Brazil, Argentina, Bolivia, Paraguay, Uruguay, Mexico, South Africa, Australia, India, China, Ukraine, Russia and certain other countries in Europe.

As of the date of this report, we, in our capacity as sublicensee (either as exclusive or non-exclusive licensee), have 252 patents and patent applications concerning technologies such as improved yield, drought tolerance, increased performance in high saline environments, NUE and WUE technologies and herbicide resistance, Intacta technology, ZFP®, RS, RG and OX technologies, PlantArcBio and UHC technology for use in our products. In some instances, our sublicenses are limited in terms of duration, geography and/or field of use.

We seek additional protection of our seed and germplasm intellectual property through PVP certificates, which preserve a variety owner’s exclusive rights to sell, reproduce, import, and export a plant variety and our seed. The duration of PVP protection varies among jurisdictions and is 20 years from the time of issue in the United States and 20 and 15 years from the time of issue in Argentina and Brazil, respectively. As of the date of this report, we do not have PVP certificates in the United States. In addition, in Argentina, we have received, as owner and/or as licensee, registrations with the RNC (Registro Nacional de Propiedad de Cultivares) for 16 wheat varieties, 14 soybean varieties and two sunflower varieties, all of which are authorized for our marketing in Argentina. We are currently seeking registration with the RNC (Registro Nacional de Propiedad de Cultivares) for 42 soybean varieties. We have also received the registration for 10 soybean varieties and 6 wheat varieties in Uruguay, one soybean variety in South Africa, one soybean variety in Paraguay and one soybean variety in Bolivia. We are currently seeking registration for two additional wheat varieties in Uruguay, two soybean varieties in Bolivia and two soybean varieties in Paraguay.

We seek to protect our non-patent intellectual property, such as know-how and regulatory data, through contracts and confidentiality agreements. Know-how generated by the activities of our companies is protected by specific services agreements or employment agreements. Employment agreements include undertakings regarding confidentiality and assignment of inventions and discoveries. Our regulatory data is protected by standard confidentiality and data protection mechanisms. We have 27 trademarks and 22 trademark applications in Argentina, Brazil, the United States and Uruguay, including Bioceres Semillas, environmentally customized organism, Biosem, BIOX, Bioceres Crop Solutions, Trigall Genetics, HB4, ECOSOJA and ECOTRIGO. Rizobacter has 346 trademarks and applications in Argentina and 302 trademarks and applications abroad, in Brazil, China, the United States, Uruguay, Turkey, Pakistan, Paraguay, Peru, Mexico, Colombia, Chile, Canada, Bolivia, South Africa, India and the EU. These include RIZOBACTER, RIZOSTAR, RIZOOIL and SIGNUM, which is a single-component bio-inducer for soybeans that maximizes their ability to generate nitrogen, RIZOSPRAY Extremo, which is a last generation adjuvant that enhances the effects of the active ingredients to be sprayed on crops, RIZOFOS, which increases the availability of phosphorus in soil and acts favorably on root development, RIZOLIQTop, which is a bacterial inoculant that boosts metabolic and physiological performance of bacteria, RIZOPACK, which includes integrated products that deliver a combination of seed therapies and/or bacterial protectants, and RIZODERMA, a Trichoderma harzianum based fungicide.

We will continue to file and prosecute patent, PVP certificate and trademark applications in the United States and foreign jurisdictions, as well as maintain trade secrets as is consistent with our business plan, in an ongoing effort to protect our intellectual property.

Government Regulation

We are subject to agriculture, health and the environmental regulations in the countries in which we operate. We must obtain and comply with various permits and licenses from government authorities and municipalities in the jurisdictions in which we operate. The laws and regulations we are subject to will continue to evolve as there are advances in biotechnology and our other businesses. In the United States, the FDA and the USDA are primarily responsible for overseeing food regulation and safety, although many other federal agencies also play a role in food regulation. The USDA has jurisdiction over certain genetically engineered crops through the Animal and Plant Health Inspection Services, or APHIS. In January 2017, APHIS proposed significant amendments to its Part 340 regulatory framework that would, among other things, clarify the types of genetically engineered plants subject to regulation thereunder. In November 2017, however, APHIS withdrew its proposed rule and stated that it would “begin a fresh stakeholder engagement aimed at exploring alternative policy approaches.” That process appears to remain ongoing. In Argentina, the National Seed Institute of Argentina (Instituto Nacional de Semillas), as part of the HB4 wheat approval that is subject to approval in Brazil, issued Resolution 535/2021, establishing audit measures for the production of HB4 wheat materials under our HB4 wheat identity preserved production program. In this regard, we will have to provide production and processing information on a regular basis to such authority.

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Our management, administrative and research and development services employees are located mainly in Argentina.

Insurance

We maintain customary insurance policies that we consider to be in line with market practice and adequate for our business. Our principal insurance policies are personal injury (as mandated by Argentine labor law), civil liability, fire, theft, car, transport, credit, work injury risk, and bond insurance entered into in connection with grants received. We do not maintain product liability insurance coverage.

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crop performance while reducing adverse environmental impact. With more than 50 ongoing projects, we develop biotechnology traits, biofungicides, bio-stimulants, inoculants, soybean and wheat varieties and improve the efficiency of adjuvants and microgranulated fertilizers by combining them with biological inputs. Our Integrated Seed projects develop integrated products for soybean and wheat that comprise several technologies and are targeted to specific geographic regions. During the technology sourcing process, our Parent designs and develops an efficient open architecture model that allows the scientific community (public institutions, other companies, entrepreneurs, etc.) to actively and productively interact with it. As of December 2020, our ecosystem had more than 30 collaborations and joint initiatives with various players on a global scale. Our collaboration network includes projects with both public institutions at national and international levels as well as with other companies in the private sector. Furthermore, two of our most valuable products (HB4 and Rizoderma) were incubated through such collaborations.

We have also entered into various collaborative product development and distribution agreements, including with: (a) Corteva, for the development of new seed traits in soybeans; (b) Momentive, for adjuvants; (c) Syngenta, for new seed treatments; and (d) Valent BioSciences, for microbials in the United States.

We manage our product development via various joint ventures and partnerships with leading participants in the global agriculture sector. We focus our efforts on developing products and technologies that address the specific requirements and demands of our global customer base and for some of the most globally prolific crops, such as soy and wheat, among others.

We have access not only to the largest distributors, cooperatives and dealers, but also to end-customers through our well-established subsidiaries, divisions, partnerships and our shareholders. By selling our proven genetics, seeds and seed treatments on a branded basis, we believe we will continue to further strengthen our brand and strengthen our position globally.

Capital-Efficient, Risk Mitigated Development Model

Development and regulatory approval for our products and technologies requires a highly evolved and complicated process that can last 12 to 14 years. Furthermore, capital allocation requirements can be onerous due to the expensive discovery activities usually associated with life sciences research and strict requirements for regulatory approvals.

We believe that we have created a highly competitive and capital efficient, independent platform for developing such products and technologies. We consider our Parent to be the premier partner for advanced validation of promising research leads developed by research institutions in Argentina, most of which do not have the necessary capabilities for this purpose.

Upon technology validation, we enter into joint ventures, partnerships and collaborative agreements with industry participants that agree on the merits of a new technology and pursue the business opportunity jointly with us. Partnering with others in this stage of the R&D process allows us to reduce our capital exposure while retaining a controlling interest in the product or technology under development. By co-funding projects at an average investment ratio of four dollars from partners to one dollar that we invest, we further reduce our financial burden and risk from product development activities while also increasing our ability to develop multiple products.

We enjoy a competitive advantage in commercializing our products, as we are able to leverage our strong industry relationships to bring our products to market faster than our competitors. We also facilitate the use of our technologies through licensing agreements and partnerships with global industry leaders, particularly in new markets with expanded regulatory requirements.

Patented and Well-Established High Impact Technologies and Integrated Products and as a Robust Pipeline of New Products and Technologies at or Close to Commercialization Phase.

We believe that our patent and trademark portfolio for plant-related biologicals is among the most competitive in South America. As of June 30, 2021, we have identified and sought patent protection in our capacity as either title holder or licensee, or as exclusive or non-exclusive licensee, to 252 patents or patent applications. In some instances, our licenses are limited in terms of duration, geography and/or field of use. We usually seek patent protection in the largest global markets for our products and technologies, including, the United States, Brazil, Argentina, China, India, Mexico, Australia and certain other European and South American countries.

We have registrations in Argentina for 16 wheat, 15 soybean, and two sunflower varieties and we are also seeking registration for an additional 41 soybean varieties. Our subsidiary Rizobacter has 346 trademarks and applications in Argentina and 302 trademarks and applications globally.

We also have a robust and innovative portfolio of products and technologies for all stages of crop development. Many of these technologies are at or close to the commercialization phase, such as HB4 Soy and HB4 Wheat. This year we launched a new bio-fungicide for rice seed treatment.

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Unique Ownership by Key Industry Influencers Leading to Early and Broad Adoption of Technologies and Products

As of September 30, 2021, the ownership structure of our Parent is composed of more than 400 shareholders, including some of the largest farm operators, processors, distributors and commercial participants in the Latin American agricultural sector. Our Parent shareholder structure also includes founding members of AAPRESID and leading members of AACREA. These unique relationships not only allow us to quickly bring our products to market and integrate our technologies into the broad market by creating a proprietary distribution and commercialization channel, but also provide us with a highly desired early stage testing platform that allows us to receive direct market feedback in the testing process in order to vet and facilitate faster market penetration.

Highly Accomplished Management Team with a Unique Blend of Technical and Commercialization Experience and the Ability to Identify and Integrate Key Acquisitions

We believe we have a strong management team with a unique blend of executive, managerial, technical, commercialization and acquisition experience. We are able to leverage the experience of our management team not only to efficiently source and develop our technologies and products, but also to leverage their vast experience in commercial production, distribution, navigation of intellectual property requirements, and inorganic acquisitions to strategically grow our business.

Our Growth Strategy

Our long-term growth strategy is based on an open-architecture approach to technology origination, identifying and accessing promising technologies from third parties, as well as forming strategic and capital-efficient partnerships that leverage each party’s strategic strengths and capabilities to bring innovations more quickly to market. Our near-term growth strategy includes the following:

Continue to Lead Development and Commercialization of New Agricultural Biotechnology Products in Existing and New Markets

We intend to build upon our diverse portfolio of crop productivity solutions by consolidating our position in biological assets, including microbial, seed trait and germplasm assets, and continuing to pursue an integrated approach in the development of superior yielding products. We intend to expand upon our direct reach to customers by offering additional high demand technologies, such as digital farming solutions and direct-to-consumer retail, which we believe will facilitate the adoption and subsequent sales of our products as well as achieve efficiencies to create additional value opportunities.

Scale-Up Production of Rizobacter Products to Accelerate Penetration in Crop Nutrition and Protection Markets

We have invested significant capital in the future development of specialty fertilizers and operate a micro-beaded fertilizer facility in Pergamino, Argentina. The facility began operations in January 2017 and increasingly supplies high-demand specialty fertilizers in Argentina and neighboring countries. At fiscal year-end 2021, installed capacity utilization of our micro-beaded fertilizer plant increased to 40% from 30% last year. With a focus on profitability, the Company is proceeding with discipline while calibrating the commercial strategy to widen market acceptance of this technical product.

We have a well invested asset base in Brazil, which includes an adjuvant production facility to sustain the execution of our international expansion plan, in addition to product registrations in place.

Commercial Launch of HB4 Seed Products to Drive Penetration of Seed Market

Given the near-term commercialization opportunity that HB4 and other seed technologies represent, we plan to integrate these solutions into customized seed products that represent a superior value proposition, with an initial focus on Latin America. HB4 Wheat and HB4 Soy seeds integrate the uniqueness of HB4 stress tolerance into locally adapted germplasms, customized with a seed treatment solution prescribed for specific environments. We believe that the product differentiation provided by our unique and varied technologies increase the value of our products for HB4 Seed customers and will drive significant growth. In the medium-term, we expect royalties from HB4 licenses to represent a significant component of our revenues, as this landmark technology is more broadly adopted through strategic partnerships and third-party channels.

Expand our International Business by Accelerating Registration and Sales of Products Through Multiple Subsidiaries

We consider ourselves to be a global leader in the biological market for agriculture inputs and have used this position to establish subsidiaries in Brazil, Paraguay, Bolivia, Uruguay, the United States, South Africa, and more recently, Colombia and France. We believe we can use our international footprint and sales force to continue to define our key brands by bringing our broader portfolio of crop

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productivity solutions to these markets. We expect international growth to be driven initially by continued growth in our traditional biological business, as well as by incorporating high-value adjuvants and crop nutrition solutions.

Pursue Strategic Collaborations and Acquisitions in Key Markets

We intend to continue working with our collaboration partners to bring our products to customers in key markets. We also plan to continue pursuing acquisitions and in-licensing opportunities seeking global expansion and to gain access to validated and important later-stage products and technologies that we believe to be a strategic fit for our business.

Industry Overview

Global Overview

The agricultural industry in the 21st century faces multiple challenges: it has to produce more food and fiber to feed a rapidly growing population with a smaller rural labor force, more feedstock for a potentially large bio-energy market, contribute to the overall development in the many agriculturally dependent developing countries, adopt more efficient and sustainable production methods as well as adapt to climate change.

According to the World Resource Institute, feeding 10 billion people sustainably by 2050 will require closing three gaps: (1) A 56% food gap between crop calories produced in 2010 and those needed in 2050 under “business as usual” growth; (2) A 593 million-hectare land gap (an area nearly twice the size of India) between global agricultural land area in 2010 and expected agricultural expansion by 2050; and (3) An 11-gigaton GHG mitigation gap between expected agricultural emissions in 2050 and the target level needed to hold global warming below 2°C (3.6°F), the level necessary for preventing the worst climate impacts.

Climate change is a global threat to the food and nutritional security of the world. According to FAO, the rising trend in average temperature and rainfall, interannual and seasonal variation will increase. This will result in more frequent and more extreme events, and in greater crop and livestock production losses. Climate variation is already the major cause of year-to-year fluctuations in production in both developed and developing countries, and of food insecurity in developing countries. According to the U.S. Global Change Research Program, climate disruptions to agricultural production have increased during the past 40 years and are projected to increase further over the next 25 years. These impacts will be increasingly negative on most crops and livestock by mid-century and beyond.

Illustrating these disruptions, the charts below set forth freshwater resources per capita between 1962 and 2017, carbon dioxide emissions per capita between 1996 and 2018, and global average temperature anomaly between 1850 and 2019.

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Source: The World Bank

Agriculture places a serious burden on the environment in the process of providing humanity with food and fibers. According to FAO, agriculture is the largest consumer of water and the main source of nitrate pollution of groundwater and surface water, as well as the principal source of ammonia pollution. It is a major contributor to the phosphate pollution of waterways and to the release of the powerful greenhouse gases, methane and nitrous oxide, into the atmosphere.

The pie chart below shows the contribution to Green House Gases Emissions by industry.

Source: IPCC report, 2014

However, agriculture is the main industry dealing with living organisms capable of fixing carbon from the atmosphere in significant amounts, and therefore has a key role as a moderator of climate change via the sequestration of carbon. According to a report of the scientific academy The Royal Society, there is a pressing need for the “sustainable intensification” of global agriculture in which yields can be increased without any adverse environmental impact and without the cultivation of more land.

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Demand for crop yields from agricultural lands are seeing a dramatic increase as a result of global population increase, an expanding middle class, the trend towards urbanization, a decrease in agricultural land per capita, demand for reduced use of environmentally harmful chemicals, and an increase in unfavorable weather patterns for farming. This demand cannot be met by conventional farming alone. Agricultural biotechnology products are the only currently viable venues available to meet this expected higher demand in crop yields.

According to the USDA, global demand for grains increased by more than 57% from 1.4 billion metric tons in 1980 to 2.2 billion metric tons in 2010. Furthermore, according to the UN’s Food and Agriculture Organization (“FAO”), this demand is expected to reach 2.8 billion metric tons in 2030. The increase in demand is primarily driven by population growth in developing countries and an expanding middle class. As household incomes rise, demand for protein-rich diets often increases and this drives additional demand for grains.

According to the International Service for the Acquisition of Agribiotec Applications (“ISAAA”), the shift in the composition of diets towards more meat consumption has led to an increase in demand for feed grains. The transition also increases demand for open land for cattle raising and grazing, making arable land increasingly scarce, and driving the growth in demand for high yielding agriculture products.

Due to the location of the remaining arable land worldwide and its uneven distribution, certain regions have been driven to produce a larger proportion of the required crop supply. As these trends continue, South America will be presented with a unique opportunity to develop and export crops to meet growing demand.

The awareness of the relevance of protecting soil and water (in general terms, the environment) has been increasing rapidly in recent years. As a result, especially conservation-conscious growers have started to reduce tillage operations or moved to no-tillage farming. There are many benefits to the land and the environment from adopting no-till systems. Leaving the soil mostly undisturbed and with high levels of crop residues reduces soil erosion and fuel-intensive work. The utilization of crop residues in no-till farming also increases water infiltration and therefore retention by the soil, meaning less runoff of contaminated water and a reduction in the amount of water needed for a given crop. Furthermore, this practice promotes biodiversity in the soil, making the soil healthy and fertile.

Today, 91% Argentina’s agricultural surface area is farmed under no-tillage. This practice has allowed the country to reduce soil degradation issues by 90-96% and fuel consumption by 66%, constituting a complete solution from an economic and environmental perspective.

Argentina is among the most successful countries in terms of no-till adoption. The data shown in the charts below represent the evolution of no-till surface in Argentina from 1976 to 2017, measured by surface area (hectares) and adoption rate (%).

Source: “Update! Evolution of No-till adoption in Argentina” Santiago Nocelli Pac, Argentine No-till Farmers Association (Aapresid), 2018

According to ISAAA, conventional crop technology alone cannot address the immense demand or feed the world’s growing population. Sustainable approaches using the best of conventional crop technology, such as use of the best adapted germplasms, as well as the best of biotechnology, are required in order to increase crop productivity enough to meet the growing demands associated with the increase in population. The rapid adoption of biotech crops reflects the multiple substantial benefits realized globally in the last

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24 years, with an accumulated 2.7 billion hectares of biotech crops grown commercially. Furthermore, in many countries, the adoption rate for biotech crops has reached over 90% for major products in principal markets in both developing and advanced economies.

Sustainable approaches using top of the line conventional crop technology, such as use of the best adapted germplasms, as well as the best of biotechnology, is required to meet crop productivity demands. The last 24 years of commercialization of biotech crops has confirmed that these have and can deliver substantial agronomic, environmental, health, economic and social benefits, including increased productivity, conservation of biodiversity, ability to be self-sufficient on available arable land, mitigation of negative impacts of climate change, and overall improvement of the economic situation. According to ISAAA, biotech crops were planted in only 29 countries as of 2019, presenting a significant long-term growth opportunity in the sector as demand continues to rise. An additional 42 countries imported biotech crops for food, feed, and processing. Thus, a total of 72 countries have adopted biotech crops.

Approximately 24 of the countries that have planted biotech crops are considered developing markets. In these countries, the estimated yield gaps exceed 50%, presenting a significant opportunity for improvement. Large agricultural companies, as well as smaller independent research firms, have invested billions of dollars to identify and commercialize high-value seed traits to sell to growers. Given the ability of these products to differentiate through yield performance, these markets have demonstrated stronger growth in sales than conventional seed sales.

The table below sets forth the global area of biotech crops in 2019 by country:

Source: ISAAA, 2019

According to ISAAA’s last report corn and soybeans represented, in 2019, a majority of the seed biotechnology market, making up approximately 80% of the global biotech seed market. The United States, Brazil and Argentina were the top planters of biotech seeds, with approximately 150 million hectares under production of biotech crops. As of 2019, the adoption of GM varieties is over 74% for soybean, over 31% for corn and over 79% for cotton.

Until HB4 Wheat’s approval in Argentina, wheat was an orphan crop in the sphere of biotechnology, despite being planted in 200 million hectares globally, the largest of any crop. Argentina is Latin America’s most important wheat producer, accounting for approximately 70% of wheat produced in the region, and 3% of the world’s production. Historically, the Argentine market has been quick to adopt biotechnology as a result of the concentrated nature of farm groups as well as comfort with fast commercialization of

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new GM varieties. Today, drought tolerant HB4 Wheat is the only genetically modified wheat to be approved and on a commercial path to market anywhere in the world, which represents a major milestone in wheat’s global value chain.

The graph below sets forth the global adoption area by crop in 2019:

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Source: IASSA, 2019.

Demand for stacked seed traits continue growing and accounted for 45% of the global biotech crop area in 2019, surpassing the area planted with herbicide tolerant traits and showing farmers’ preference for smart farming with no-tilling and reduced insecticide use. As more stacked traits seed varieties become available, growers will keep shifting toward these to increase profitability. The HB4® technology, a plant resilience non-binary event, is the best example of stacked traits seeds.

The charts below set forth biotechnology crops by trait:

Source: IASSA, 2019.

The aggregate economic benefits of biotech crops from 1996-2018, account for an incremental US$224.9 billion flow of revenues to growers, according to ISAAA, to more than 16 to 17 million farmers, 95% of whom are from developing countries. Based on its economic gain to growers and the agricultural supply chain, biotech crops have been the fastest adopted agricultural technology over the last years, increasing productivity by an aggregate 822 million tons from 1996 to 2018.

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As an example, the Argentine market has swiftly adopted biotechnology as a result of concentrated farm groups as well as comfort with the fast commercialization of new GM varieties. Adoption of GM crops in Argentina began in the mid 1990’s with an herbicide-tolerant soybean. The country is in an early adopter and is considered one of the six Founding Biotech Crop Countries along with countries like the U.S., China and Canada.

The chart below reflects the adoption rates of GM crops in Argentina for the indicated periods:

Source: USDA Foreign Agricultural Service

In the United States, which is the top producer of biotech seeds, 71.5 million hectares were planted using biotech crops in 2019. The United States has an established history of rapid adoption rates of GM crops, typically reaching 65% to more than 90% peak penetration in ten years, driven by overall yield and productivity improvements of specific seed traits as well as ongoing consumer education and resulting acceptance.

The chart below reflects the adoption rates of GM crops in the United States for the indicated periods:

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Source: USDA

Brazil is the second largest planter of biotech seeds worldwide with 52.8 million hectares planted in 2019. The chart below reflects the rapid adoption rates of GM crops in Brazil since they were adopted in 1998:

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Source: ISAAA, 2018

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According to the Council for Information on Biotechnology (CIB Brazil), the profit obtained per hectare from GM soybeans was up to 26% higher than the conventional varieties throughout the period being analyzed in the chart above. For corn, the increase reached 64% in the summer harvest, and 152% in the winter harvest. In the case of cotton, GM seeds had a 12% higher margin than conventional seeds.

Market Trends and Analysis

The Bioceres product suite across crop nutrition, crop protection and seed, and integrated products segments are able to reduce climate consequences by reducing greenhouse gas emissions, water usage and the need for agro-chemical products. Bioceres has a top tier complementary portfolio addressing a global market of ~$100 billion by 2027.

Crop Protection: Adjuvants

According to a study by Fortune Business Insights, the global agricultural adjuvants market size is estimated at US$3.1 billion, in 2020, and is projected to grow at a CAGR of 6.1% and reach a value of US$4.4 billion, by 2026. The increasing need for green adjuvants, improving efficiency, and effectiveness of agrochemicals are some of the factors driving the growth of this market. By crop type, the cereals and pulses segment are projected to be the fastest-growing segment in the agricultural adjuvants market during the forecast period. The herbicides segment is estimated to witness the fastest growth in the agricultural adjuvants market, in terms of value, between 2020 and 2026.

The increasing importance of precision farming and growing demand for crop protection chemicals is the key factor driving the global market for adjuvants. Increased awareness about the implication of excessive usage of pesticides in the environment has received greater attention in recent decades, given that the application of crop protection chemicals has led to the contamination of water bodies across various regions.

The Brazilian market is projected to witness strong adjuvant growth during the projected period of 2019-2026, due to the growing crop protection chemicals market along with the strong adoption trend of improved technologies in cultivation crops. North America, followed by Europe, are the largest markets for agricultural adjuvants at present, and they are expected to account for a significant proportion of the global market in the future.

Crop Nutrition: Specialty Fertilizers

Increasing awareness about farm resource management, affordability of farm inputs, and a focus on agricultural profitability factors have helped to drive the rapid expansion of specialty fertilizers usage, and these currently account for nearly 12-15% share of the global

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market for plant nutrition products. Growers’ increasing knowledge of the technical know-how of fertilizer products and their usage has enabled them to seek better options to fulfill the nutrient requirements of plants with a higher level of nutrient-use efficiency.

According to a study by Fortune Business Insights, the global market for “specialty fertilizers” (those that have some characteristic that distinguishes them from commodities) is expected to reach US$39.4 billion by 2027, growing at a CAGR of 6.8% between 2020 and 2027. Demand for specialty fertilizers has been increasing as an effective alternative to conventional fertilizers, due to their lower impact on the environment.

Crop Nutrition: Agricultural biologicals - Inoculants

The global agricultural biologicals market size was appraised at US$7.2 billion, in 2019. According to a study by MarketsandMarkets, it is projected to grow at a CAGR of 13.6% to reach a value of US$18.9 billion, by 2025. The increasing trend towards sustainable agriculture in the global market, with low residue levels and supportive regulations are the key factors driving the growth of this market.

According to a study by Fortune Business Insights, the inoculants market was US$868 million, in 2019, and is projected to account for US$1,940 million by 2027, with a CAGR of 10.6% throughout the forecast’s period. In South America, countries like Brazil and Argentina are projected to offer high-growth prospects in coming years, given that they are ranked among the largest producers of soybean, at a global level, increasing demand for inoculants in the region. However, the acceptance of agricultural inoculants is very low in most countries such as India and China.

Decades of cultivation practices using synthetic products for aggressive crop yield increases at a global level have led to a massive negative impact on underground water reserves and soil fertility. These factors have led to the increase in the adoption of sustainable farming. The industry’s development is still in its initial stage and the number of product approvals and investment in bio-ingredients is growing rapidly and is expected to lead to intense market competition in the future. Among biological products, biofertilizers are gaining significant traction as they enhance the phosphorus and zinc absorption properties of plants as well as their resistance to pathogen attacks.

Key drivers for agricultural biologicals include stringent regulatory policies discouraging the use of harmful agrochemicals, the development of pest resistance against synthetic chemicals, and a shift towards sustainable agriculture. The major opportunity areas for the agricultural biologicals market include the adoption of agricultural biologicals in emerging markets such as China, Brazil, Argentina, India, Indonesia, and Philippines. Restraints on the market include the lack of awareness between growers, the lack of skilled personnel, the unavailability of high-quality carrier materials, and short shelf life.

Cereals and grains applications dominated the global agricultural biologicals market, with a share of 41.6%, in 2019. This is attributed to growing demand for wheat, rice, corn, barley, and millet across the globe. Also, throughout several developing agricultural economies like Japan, Thailand, India, and Indonesia and multiple Latin American countries, the need for effective technology related to bio-based product development is at its peak. This is mostly to boost the growth of several pulses and oilseeds in the respective regions to keep up with rapidly growing demand for these crops.

Seed and Integrated Products: Biotech traits

Biotechnology tools are seeing significant increase in demand across agricultural applications. These include tissue culture and micropropagation, marker-assisted selection or molecular breeding, genetically modified crops and genetic engineering, molecular diagnostic technologies, and conventional plant breeding.

A rise in the adoption of GM crops globally is expected to drive this market. This is because genetic modification allows the production of feed and food crops with enhanced characteristics, such as high nutritional value, high yield, enhanced food-processing qualities, and resistance to diseases and insects. GM crops have been adopted rapidly in many countries, and the market for stacked seed traits is among the growing sectors of the industry.

The global seed market was estimated at US$53.8 billion in the year 2020, and is projected to reach US$83 billion by 2027, growing at a CAGR of 6.4%. The global genetically modified seeds market size was estimated at US$27.9 billion in the year 2020, and is projected to reach US$45.0 billion by 2027, growing at a CAGR of 7.1%. This increase in the market size of GM seeds underlines the increasing significance and need for agricultural biotechnology. In response, the Company is strategically targeting the GM seed and integrated seed submarket for its high-growth potential.

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We believe that agricultural biotechnology and biologicals will continue to grow as the benefits of these technologies and products become more widely known and growers realize the similar efficacy compared to conventional chemicals, while also addressing other issues such as pest resistance and environmental safety.

Consumer Trends, Food Traceability & Digital Tools

The pandemic is driving increased focus by consumers on their food and health. Many consumers report they will continue to cook more at home, order online, pay for convenience and focus on their health. As the pandemic recedes, consumers will seek new delivery, new formats and new attributes for their foods.

Consumers are driving change in food attributes based on their social and environmental externalities. According to Boston Consulting Group’s “Food for Thought” report, moving to alternative proteins can be a significant contributor to tackling climate change, and the transition is driving demand. In 2020, 574 million metric tons of animal-based protein were consumed worldwide, representing approximately 75 kilograms per person, and consumption continues to increase every year. In conjunction, however, concerns about livestock environmental costs, human health and the "cruelty- and animal-free" trend are rising even faster. Alternative proteins have now evolved from a niche product to an increasingly important one across a wide segment of the population. The transition to alternatives proteins can make a significant contribution to reducing climate change. It is estimated that by 2035, the shift to alternatives will save the equivalent amount of carbon dioxide that Japan emits in a year, conserve enough water to supply the city of London for 40 years, and promote biodiversity and food security. Consumers can now enjoy delicious and flavorful protein alternatives and at the same time tackle climate change and advance several of the UN’s SDGs. According to the report, by 2035, after alternative proteins reach full parity in taste, texture, and price with conventional animal protein, 11% of all the meat, seafood, eggs, and dairy eaten around the globe is projected to become alternative. With regulations and technology advances, that number could reach 22%, in 2035.

Consumers are increasingly concerned about where their products come from and how they were produced, and many may be willing to pay more for goods that offer supply chain traceability. Food brands are responding to consumer concerns with marketing, sustainable sourcing, positive footprint and highly nutritional products. The transparency of traceability allows consumers to verify where a food item comes from and understand the journey from farm to fork. A proposed US Food and Drug Administration (FDA) regulation would require participants in the food value chain to maintain end-to-end traceability records to be made available upon request during a food-borne outbreak or food recall investigation. The regulation would apply to categories that are estimated to account for approximately 20% to 30% of food consumed in the USA.

According to Forbes Magazine, technology investments in food traceability could reach an estimated $19 billion by 2023. This investment will create wide scale changes in the visibility and traceability of the food supply chain. Blockchain represents a key element to secure traceability from farm to fork, as this technology enables highly secured records and digital transactions, creating a secure and transparent system available to all parties within the supply chain. According to Reports and Data, the Blockchain market related to agriculture was valued at USD$52.36 million, in 2018, and expected to reach USD$122.7 million by the year 2028, growing at a CAGR of 45.1%. The world faces huge challenges when it comes to proving food to a growing population and there is an imminent need for innovation in agriculture processes to overcome these challenges.

Agriculture to help other industries meet carbon goals

Every year, the world emits approximately 51 billion tons of GHG into the atmosphere. Limiting global warming to 1.5°C, in line with the Paris Agreement, requires that global GHG emissions are cut by 50% of current levels by 2030 and reduced to net-zero by 2050. Achieving a global net-zero goal is critical for the health of the planet, the stability of ecosystems, and to ensure safe conditions for future generations. The UN-mandated Intergovernmental Panel on Climate Change (IPCC) projected that if current emissions trends continue, global average temperatures would likely rise 3.5°C above preindustrial levels by 2100, with potentially catastrophic impacts, including even more extreme weather events.

Companies and industries must work to decarbonize their production, distribution, and supply chains, and agriculture must help other industries meet carbon goals. Agriculture is the only industry dealing with living organisms capable of fixing carbon from the atmosphere at scale through photosynthesis, and therefore has a key role as a moderator of climate change through the sequestration of carbon. Soil and farming practices hold promise as sources of carbon offsets. A study in Science Advances estimated capturing more carbon in the soil and changing certain farming practices could offset over 20% of US GHG emissions. Ecosystem Services Market Consortium (ESMC) estimates carbon credit demand for US farmland alone at $5.2B.

Carbon markets are an effective instrument and important tool to address climate change and reach net-zero emissions by 2050. Together with other instruments for pricing greenhouse gas emissions, such as CO2 taxes, they provide incentives for climate-friendly investment. As a result, carbon markets can contribute to set more ambitious climate targets. According to Mark Carney, the UN Special

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Envoy on Climate Action and Finance, companies and individuals are expected to pour $100 billion into the carbon offset market by the end of this decade, up from about $300 million in 2018.

Companies are now creating ag-focused carbon markets including Bayer, CIBO Technologies, ESMC, Farmers Business Network (FBN), Indigo Ag, Nori, Nutrien, Soil & Water Outcomes Fund, and TruCarbon. These programs differ in specifics, but generally offer cash payments on a per acre basis, have acre minimums, and have implemented verifiable sustainable farming practices across planting, fertilizer, tillage, harvest, etc.

According to Bloomberg, hundreds of companies will soon begin a buying spree for carbon offsets. Just the 18 oil majors that already have net-zero goals will eventually need to erase 3.3 billion metric tons of annual emissions, according to clean-energy researchers at BloombergNEF, representing nearly 18 times the amount of carbon offsets issued in 2020.

C.Organizational Structure

Bioceres Crop Solutions Corp. is a Cayman Islands exempted company.

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The following diagram depicts our current organizational structure:

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The following table identifies our main subsidiaries as of the date of this report:

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Notes:—

D.Property, Plant and Equipment

Our main manufacturing and distribution facilities are located in Pergamino, Buenos Aires province, Argentina. Our manufacturing facilities include an approximately 2.1 million-gallons adjuvants formulation plant, a production facility of liquid inoculants with an annual capacity of 6.6 million-gallons, a formulation plant of insecticides and fungicides with a production capacity of 0.5 million gallons per year, a micro-beaded fertilizer facility with a production capacity of 50,000 tons per year, as well as over 375,000 square feet of warehouse space for packaging and logistics. In addition, our adjuvants formulation plant located in Londrina, Paraná state, Brazil, has a production capacity of approximately 0.5 million gallons per year.

In June 2016, we inaugurated our new 250,000-square foot fertilizer facility as part of our joint venture with De Sangosse. As of June 30, 2021, there was a 26% increase in production, amounting to 20,000 tons. We test and conduct trial runs of our key technologies at our main field station located in Pergamino, Argentina, which also has processing capabilities for foundation seed.

We also operate commercial offices in eight countries to address the local and regional demand.

In fiscal year 2021, we acquired 7.2 hectares in Londrina, Paraná state, Brazil, where we are planning to build a new high-tech adjuvant facility plant. This facility will demand an investment of approximately US$8 million and will have a production capacity of 2.1 million gallons per year.

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In Argentina, on March 20, 2020, the Argentine government implemented a social, preventive and mandatory isolation regime, prohibiting the circulation of people on routes, roads and public spaces (the “Mandatory Isolation Regime”) which has already changed to a mandatory distancing, instead of isolation.

As of the date of this report, the activities pursued by our Argentine subsidiaries, related to agricultural production, distribution and commercialization, were exempted from the mandatory isolation or distancing regimes, mentioned before, for being considered “essential” activities. Also, our activities in Brazil have no restrictions.

We committed to provide a safe environment for our employees and contractors, and immediately prepared measures and developed safety protocols to mitigate the eventual risk of being affected by the disease, and to prevent an uncontrolled spread of COVID-19 through the operations of our subsidiaries. We are closely monitoring the situation and taking all necessary measures at our disposal to preserve human life and our operations.

Market demand for our products and services

Our sales and profitability are influenced by the demand for our crop productivity products in the particular markets in which we operate. Demand for our seed and integrated products, crop nutrition products and crop protection products are affected by the purchase decisions of our distributors and customers, which are typically driven by fluctuation in agricultural commodities prices, crop profitability and planting decisions, as well as externalities such as general market conditions, grower production decisions and new technology adoption, commodity prices, operating costs and weather conditions.

Seasonality and weather conditions

Our revenues fluctuate depending on the timing of orders from our distributors and customers and on prevailing seed market prices, which influence the purchase decisions of growers, the end users of our seed and integrated products, crop protection products and crop nutrition products. Given the cyclicality of crop planting and harvesting, as well as growing seasons, which vary from year to year, our business is highly seasonal. This results in substantial fluctuations in quarterly sales and profitability. Our portfolio is highly oriented to crop planting. Generally, our sales are concentrated in the third and fourth quarters of each calendar year, when demand for our seed and integrated products, crop protection products and crop nutrition products increases as growers begin planting their summer crops in South America, while winter crop season occurs in the Northern hemisphere. With our seed and integrated products business, we contract with growers and seed suppliers based upon our anticipated market demand. Generally, in our seed and integrated products business we stock the seed during the harvest season and ship from inventory throughout the year, with the objective of selling most of the inventory from the current year’s harvest before the next year’s, with our crop protection and our crop nutrition business following a similar cycle to the seed cycle. Milestone, royalty and license revenues are also likely to fluctuate from period to period given the seasonality of agriculture and time required to progress from one milestone to the next.

Our seed and integrated products, crop protection and crop nutrition businesses are also affected by unpredictable weather conditions such as heavy rains, hail, floods, freezing conditions, windstorms, drought or fire, as well as other hazardous situations beyond our control, which may cause our sales and operating results to fluctuate significantly. In addition, disruptions that cause delays by growers in harvesting or planting can result in the movement of orders to a future quarter, which also causes fluctuations in our quarterly operating results. Finally, some of our customers and distributors order in bulk only one or two times a year, which may further cause our seed product revenues to fluctuate from period to period.

Fluctuations in commodity prices

Our results of operations, particularly the demand and price for our seed and integrated products, crop production products and crop nutrition products, are affected by global agricultural commodities prices, such as grains, milk, meat, biofuels and biomaterials. Global prices of agricultural commodities vary in accordance with domestic and export market prices, which are primarily affected by the local and global demand for, and supply of, those commodities. Prices for agricultural commodities are also significantly influenced by speculative actions and by currency exchange rates, volatility in credit markets and fluctuation in consumer and business confidence. In addition, prices for agricultural commodities are affected by governmental programs and policies regarding agriculture, as well as general trade, fiscal and exchange control policies. Extrinsic factors, such as drought, floods, general weather conditions, disease and natural disasters may also affect agricultural commodities prices. Demand for agricultural commodities, such as wheat and soybeans, both for human consumption and as cattle feed, has generally increased with worldwide economic growth and prosperity.

Macroeconomic conditions in Latin America

We generate a significant portion of our revenue from production in emerging markets. Therefore, our operating results and financial condition are directly impacted by macroeconomic and fiscal developments, including fluctuations in currency exchange rates, inflation

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and interest rate fluctuations, in those markets. The emerging markets where we conduct our business (including mainly Argentina and Brazil) remain subject to such fluctuations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Operating in Latin America—Continuing high inflation may have a negative effect on the Argentine economy and on our financial performance.”

Argentine and Brazilian subsidiaries use local currency as their functional currency. A significant portion of our operating costs in Argentina are denominated in Argentine Pesos and most of our operating costs in Brazil are denominated in Brazilian Reais. For each of our subsidiaries’ statements of income, foreign currency transactions are translated into the local currency, as such subsidiaries’ functional currency, using the exchange rates prevailing as of the dates of the relevant specific transactions. Exchange differences resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of income ("statement of income") under “finance income” or “finance costs,” as applicable. Our Consolidated Financial Statements are presented in U.S. dollars, and foreign exchange differences that arise in the translation process are disclosed in the consolidated statement of comprehensive income.

We have determined that, as of July 1, 2018, the Argentine economy qualifies as a hyperinflationary economy according to the guidelines of the International Accounting Standard 29, Financial Reporting in Hyperinflationary Economies (“IAS 29”), since the total cumulative inflation in Argentina in the 36 months prior to July 1, 2018, as measured by the wholesale price index published by the INDEC, exceeded 100%. Accordingly, IAS 29 guidance is applicable to our financial statements for periods ending after July 1, 2018. IAS 29 requires the financial information of an entity whose functional currency is a currency of a hyperinflationary economy to be adjusted by applying a general price index and expressed in the measuring unit at the end of the reporting period and then such financial information to be translated into the presentation currency at the prevailing exchange rate. See Note 2.4 to our consolidated financial statements included elsewhere in this report. See “Item 3. Key Information—D. Risk Factors—Risks Related to Operating in Latin America—We are required to apply inflationary adjustments to our Argentine subsidiaries’ financial statements, which could adversely affect our financial statements, results of operations and financial condition.”

Effects of export taxes on our products

Since 2002, the Argentine government has imposed duties on the exports of various primary and manufactured products. Most such duties were suspended or subject to progressive reduction after the Macri administration took office in December 2015. However, in September 2018, general export duties were re-imposed and the progressive reduction of export duties on soybean products stopped. For example, a general additional export duty has been imposed on all exports of goods, levied on the lower of 12% of the good’s FOB value or AR$3 or AR$4 per U.S. dollar, depending on the goods.

On December 4, 2018, the Argentine Congress approved the budget bill for 2019 through Law No. 27,467, which amended the Customs Code to allow for duties to be applied to the exportation of services. In addition, the Argentine government was allowed to impose export duties of up to 30% until December 31, 2020. However, in case of services and goods that were not subject to export duties before September 2, 2018, the maximum rate was 12%. On January 2, 2019, the Argentine government issued Decree No. 1201/2018, which established an export duty on export of services at a rate of 12% with a maximum limit of AR$4 per each U.S. dollar of the amount arising from the invoice or equivalent document. On December 28, 2019, Decree No. 99/2019 extended the application of duties on export of services until December 31, 2021 with a rate of 5% without limit.

On December 21, 2019, the Argentine Congress enacted Law No. 27,541 (Ley de Solidaridad Social y Reactivación Productiva en el Marco de la Emergencia Pública, or the “Solidarity Law”)., that established new maximum export duties of 33% for soybean, 15% for goods that were not subject to the payment of export duties as of September 2, 2018, 5% for agroindustry products of regional economies defined by the Argentine government, and 5% for industry goods and services.

As of February 29, 2020, the following crop exports were subject to the following export duties: soybean and soy products 30%, corn, wheat, barley, sunflower and sorghum 12%, corn and wheat flour 9% and sunflower oil 12%. However, on March 4, 2020, the Argentine government issued Decree No. 230/2020 pursuant to which increased the export duties for soybeans and soy product from 30% to 33%, and reduced export duties for sunflower from 12% to 7%, for corn flour from 9% to 5%, for wheat flour from 9% to 7% and for sunflower oil from 12% to 5%.

In October 2020, the Argentine government adopted a series of measures seeking to promote production, exports and the liquidation of U.S. dollars from exports in the FX Market, including the temporary reduction of export duties for soybean and soybean derived products through Decree No. 790/2020. However, such measures were not expected to have the intended results.

The Argentine government imposed the Import Monitoring System (the “SIMI”) in December 2015. Under this system, importers are required to submit certain information electronically through the SIMI application which, once approved, will be valid for 90 calendar days.

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The Argentine government has also enacted an import licensing regime that includes automatic and non-automatic licensing for imports according to the tariff codes of the goods to be imported. Automatic import licensing implies that the importer must only get through the SIMI and any other certification related to the imported goods. Non-automatic licensing implies that the authorities also have a ten-day term to either approve or reasonably reject the import license requested due to its effect on local businesses, aside from the other import requirements that the goods may have (including SIMI and certifications).

Stages of development of our products

Our results of operations will vary depending on the stage of development of our products and technologies. Some of our products are currently in the early stages of development and our historical operating results are not indicative of the operating results we expect to experience in later stages of product development. As we are able to advance such technologies and products through the development and regulatory phases to commercial launch, we expect our revenues and cash flows to increase. In particular, we expect our operating results prior to the time we fully launch and commercialize HB4 and related technologies included in our HB4 Seed products to differ significantly from our operating results following such product launch.

Although approvals are pending, we initiated a program named “HB4®-Program”, an identity preserved production system for growing drought-tolerant soy and wheat. This program has multiple objectives, which include expanding our seed inventories, allowing growers to field test our HB4 technology, providing fields for product demonstrations and validating the products’ regional positioning.

HB4 material produced through the program will be commercialized as an integrated product. The seed treatment process to produce the integrated seed product utilizes customized microbial solutions for seed nutrition and protection, including biological fungicides. For HB4 Soy, inoculants are also integrated, including last generation microbiological formulations that ensure greater microorganism survival over the seed, greater nodular dry mass, and better biological fixation of nitrogen.

In addition to providing the integrated seed solution for planting, the HB4 program comprises our next generation crop nutrition and protection technologies for growing both crops. The HB4 program also includes digital apps that give growers access to satellite based images and data for monitoring crop health, soil conditions and weather, information that helps optimize crop yields. On top of generating extensive and detailed datasets from each grower’s HB4 production fields that are monitored via these digital apps, we are applying and leveraging data science and blockchain technology to other areas of agriculture’s value chain, such as crop storage, logistics and processing, in order to guarantee HB4 identity and complete farm-to-fork traceability.

The identity preserved HB4 Program utilizes service contracts with growers who are committed to preserving the identity of the HB4 crop under a full seed production offtake agreement, which includes best environmental farming practices, such as no-till agriculture. Under these agreements, Bioceres contributes the integrated seed solution and the other aforementioned goods (the “Contributed goods”) to growers for a pre-agreed price (based on prevailing market prices), which are deduced from the service fees to be paid to growers at the time of harvest for the seed multiplication services provided.

For the year ended June 30, 2021, the Contributed goods for HB4 Program amounted to $8.3 million with weighted average gross margin of approximately 43% across almost 80,000 total hectares.

As our seed and integrated products, crop protection and crop nutrition businesses continue to develop internationally, we expect to experience an increase in sales of micro-bead fertilizers and inoculants from our crop nutrition solutions, adjuvants and other crop protection solutions and seed and integrated products as well as to generate additional revenues from licensing fees from third parties and our joint venture partners, due to the introduction of our seed trait products to the global market, as these become commercially available, and due to the acquisition of Rizobacter and its extensive distribution network. We expect to continue to generate license fees from payments that we receive from third parties pursuant to license agreements, as well as royalty fees from distributors and growers who save harvested seeds that contain our technology and then use the seeds in subsequent harvests. We also expect to generate additional revenues from distribution fees that our joint venture partners pay to our proprietary distribution channels for selling seed and integrated products that incorporate our technologies.

Our costs are impacted by the stage of development of our products and technologies, requiring, for example, expenditures in the research, development, and regulatory phases of a product without corresponding flows of revenue until the time of commercial launch. Product development expenses may fluctuate from period to period and may also increase if we choose to accelerate certain product development programs or if we elect to take a greater role in the regulatory and commercialization process with respect to one or more of our crop productivity products in development incorporating our crop productivity technologies.

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Regulatory environment

Our results of operations will vary depending on the speed in which we are able to obtain regulatory approvals for our products and the cost and expense associated with gaining such approvals. The degree of regulation to which we are subject varies by activity and country. Our ability to sell our technologies and products depends on our obtaining and maintaining necessary authorizations, permits and regulatory approvals in the markets in which we operate.

Results of operations

We have based the following discussion on our consolidated financial statements included elsewhere in this report. You should read it along with these financial statements, and it is qualified in its entirety by reference to them.

Comparison of the years ended June 30, 2021 and 2020

The table below illustrates our results of operations for the year ended June 30, 2021 and 2020.

Notes:—

Total revenue

Total revenue increased by US$36.4 million, to US$209.5 million for the year ended June 30, 2021 from US$173.1 million for the year ended June 30, 2020. Excluding the impact of IAS 29, revenue increased by US$23.2 million, to US$197.4 million for the year ended June 30, 2021 from US$174.2 million for the year ended June 30, 2020, explained by an increase of (i) US$13.2 million of Crop Protection sales, (ii) US$8.6 million of Crop Nutrition sales, and (iii) US$1.4 million of Seed and Integrated products sales.

Our strong performance during the third and fourth quarters of the year ended June 30, 2021 completely offset softer revenues during the second quarter, which had been negatively impacted by drought in key markets across South America. All three business segments displayed growth in revenues for the full fiscal year, with increased micro-beaded fertilizers sales during the third and fourth quarters, and positive impact from the reorganization of Crop Protection during the fourth quarter.

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Total revenue by business segment

Crop Protection. Total revenue increased by US$19.9 million, to US$114.1 million for the year ended June 30, 2021 compared from US$94.2 million for the year ended June 30, 2020. Excluding the impact of IAS 29, revenue increased by US$13.2 million, to US$108.7 million for the year ended June 30, 2021 from US$95.5 million for the year ended June 30, 2020. The revenue growth was generated by a positive impact from the reorganization of Crop Protection during the fourth quarter and an increase in adjuvant sales driven by volume increase mainly in Brazil and the rest of Latin America.

Crop Nutrition. Total revenue increased by US$11.2 million, to US$60.6 million for the year ended June 30, 2021 compared to US$49.4 million for the year ended June 30, 2020. Excluding the impact of IAS 29, revenue increased by US$8.6 million, to US$57.9 million for the year ended June 30, 2021 from US$49.3 million for the year ended June 30, 2020, explained by an increase of fertilizers sales driven by installed capacity utilization ramp-up in Argentina, partially offset by a decrease in inoculants sales.

Seed and Integrated Products. Total revenue increased by US$5.3 million, to US$34.8 million for the year ended June 30, 2021 compared to US$29.5 million for the year ended June 30, 2020. Excluding the impact of IAS 29, revenue increased by US$1.4 million, to US$30.9 million for the year ended June 30, 2021 from US$29.4 million for the year ended June 30, 2020 driven by an increase in packs sales and seed and royalties sales.

Gross profit

Total gross profit increased by US$11.4 million, to US$90.9 million for the year ended June 30, 2021, from US$79.5 million for the year ended June 30, 2020. Excluding the impact of IAS 29, gross profit increased by US$9.3 million, to US$94.2 million for the year ended June 30, 2021, from US$84.9 million for the year ended June 30, 2020, mainly due to an increase of US$6.9 million and US$2.5 million in the gross profit of Crop Nutrition and Crop Protection, respectively. The drop in gross margin was due to a shift in the product mix as well as unfavorable inflation and FX dynamics that negatively affected cost structures in Argentina, where the main manufacturing facilities are located. Conversely, FX and inflation had represented tailwinds during fiscal year 2020.

Research and development expenses

Research and development expenses include ongoing efforts to maintain and continuously update our existing product portfolio. Research and development expenses increased by US$1.4 million, to US$5.6 million for the year ended June 30, 2021 from US$4.2 million for the year ended June 30, 2020, primarily as a result of increasing expenses related to employee benefits and social securities of US$0.6 million and supplies and material of US$0.5 million. Our investments focused on the development of seeds and traits, including product registrations, our pursuit of regulatory approvals of HB4 technology, and the development of new biofungicides and bio stimulants for seed treatment and foliar applications for wheat and soybean crops, including registrations for these novel products in different geographies.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by US$9.3 million, to US$47.6 million for the year ended June 30, 2021 from US$38.3 million for the year ended June 30, 2020. We had an increase in SG&A particularly during the fourth quarter, as we expanded our baseline business and, as a result, paid higher employee salaries and social security expenses, as well as variable tax and logistics expenses tied to sales. These expenses included an accelerated ramp-up cost of the HB4 Program and the roll-out of the digital platform which mainly increased professional fees and publicity. Also, unfavorable inflation and FX dynamics in Argentina, where most of our administrative functions are located, had a negative impact in expenses compared to the previous period.

Share of profit of joint ventures and associates

The profit resulting from our share in the profit of joint ventures and associates decreased US$1.5 million, to a profit of US$1.0 million for the year ended June 30, 2021 from a profit of US$2.5 million for the year ended June 30, 2020 as a result of lower profit relating to our equity holdings in Synertech of US$1.6 million.

Other income or expenses, net

Other net results remained at US$0.3 million for the year ended June 30, 2021, as a result of miscellaneous losses.

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Finance results

Finance costs: finance costs increased by US$0.4 million, to US$21.2 million for the year ended June 30, 2021 from US$20.9 million for the year ended June 30, 2020, primarily as a result of an increase of financial commission of US$0.8 million, offset by lower interest expenses, which was caused by the Company’s increased cash liquidity primarily driven by more efficient interest rates. Interest expenses does not include a gain from translation effects on Argentine Peso denominated loans of US$6.7 million, compared to US$3.6 million accrued in the previous period.

Other finance results: the charge of other finance results decreased by US$5.2 million to US$6.6 million for the year ended June 30, 2021, compared to a loss of US$11.8 million for the year ended June 30, 2020, mainly as a result of (i) lower net losses from FX charges of US$7.2 million and (ii) higher gain on inflation effect on monetary items of US$2.6 million, offset by higher charges in fair value of financial assets or liabilities and other financial results which are primarily due to a tender offer of our warrants we did in the year ended June 30, 2021.

Income tax

Income tax expense amounted to US$14.4million for the year ended June 30, 2021, compared to US$2.2 million for the year ended June 30, 2020, primarily due to (i) higher profitability in operational subsidiaries, as well as lower depreciation of the Argentine Peso, generating a lower tax shield from FX losses in Argentina, and (ii) $7.0 million in deferred tax liabilities denominated in AR$ accrued during the period mainly explained by the inflation adjustments provided by Law 27,430 and its amendments.

Profit (loss) for the year

As a result of the foregoing, loss for the year ended June 30, 2021 amounted to US$3.8 million compared to a profit of US$4.2 million for the year ended June 30, 2020.

Other comprehensive income (loss)

Other comprehensive income amounted to US$10.1 million for the year ended June 30, 2021 compared to a comprehensive loss of US$9.7 million for the year ended June 30, 2020, primarily as a result a gain in exchange difference expenses on translation of foreign operations.

Total comprehensive income (loss)

As a result of the foregoing, we recorded a total comprehensive income of US$6.2 million for the year ended June 30, 2021 compared to a total comprehensive loss of US$5.4 million for the year ended June 30, 2020.

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Comparison of the years ended June 30, 2020 and 2019

The table below illustrates our results of operations for the year ended June 30, 2020 and 2019.

Notes:—

Total revenue

Total revenue increased by US$12.5 million, to US$173.1 million for the year ended June 30, 2020 from US$160.6 million for the year ended June 30, 2019. Excluding the impact of IAS 29, total revenue increased by US$25.5 million, to US$174.2 million for the year ended June 30, 2020 from US$148.6 million for the year ended June 30, 2019, explained by an increase of (i) US$10.6 million of Crop Protection sales, (ii) US$7.5 million of Crop Nutritions sales, and (iii) US$7.4 million of Seed and Integrated products sales.

Our higher sales across all three business segments were due to deeper penetration of Brazil and Paraguay’s adjuvant markets and higher sales of seed treatment packs, including in South Africa and France. Also contributing to sales growth in 2020 were sales of micro-beaded fertilizers, as market acceptance of this product expanded in Argentina, Paraguay, Uruguay and Bolivia.

Total revenue by business segment

Crop Protection. Total revenue increased by US$4.0 million, to US$94.2 million for the year ended June 30, 2020 compared from US$90.2 million for the year ended June 30, 2019. Excluding the impact of IAS 29, revenue increased by US$10.6 million, to US$94.1 million for the year ended June 30, 2020 from US$83.5 million for the year ended June 30, 2019. The revenue growth was generated by consistent execution of the Company’s adjuvant growth plan in Brazil and Paraguay. Revenue growth in the segment was strongly supported by above-average growth in biofungicides sales and sustained adjuvant growth in Argentina, where the company remains a market leader for the product category, resulting in a 15% increase in total adjuvants volume.

Crop Nutrition. Total revenue increased by US$4.3 million, to US$49.4 million for the year ended June 30, 2020 compared to US$45.1 million for the year ended June 30, 2019. Excluding the impact of IAS 29, revenue increased by US$7.5 million, to US$49.3 million for the year ended June 30, 2020 from US$41.8 million for the year ended June 30, 2019. Fertilizers revenues increased by US$8.2 million mainly due to the sustained ramp-up of installed production capacity of micro-beaded fertilizers, which supplied higher demand in Argentina, as well as Paraguay, Uruguay and Bolivia. Inoculants sales in this segment decreased as a result of being partially

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substituted with seed treatment packs and, consequently, being reported within the Seed and Integrated Products segment. The decline in sales in this product category, which reflects an 11% decrease in doses, was partially offset by higher B2B sales of stand-alone inoculants in Brazil and Paraguay, where we continued to extend our leadership position within the industrial seed treatments markets of these countries.

Seed and Integrated Products. Total revenue increased by US$4.2 million, to US$29.5 million for the year ended June 30, 2020 compared to US$25.3 million for the year ended June 30, 2019. Excluding the impact of IAS 29, revenue increased by US$7.4 million, to US$30.8 million for the year ended June 30, 2020 from US$23.4 million for the year ended June 30, 2019 driven by higher sales of seed treatment packs in Paraguay, Uruguay, Europe and, more recently in South Africa, accounting for a 6% increase in doses. In Argentina, sales in this business segment recovered during the fiscal second, third and fourth quarters of 2020, offsetting an earlier decline in sales of seeds and seed treatment packs that had resulted from uncertainty about weather and macroeconomic conditions that had affected planting decisions earlier in the fiscal year. Seed and integrated product revenues in Argentina amounted to US$25.7 million for the year ended June 30, 2020 compared to US$25.6 million for the previous year.

Gross profit

Total gross profit increased by US$5.9 million, to US$79.5 million for the year ended June 30, 2020, from US$73.6 million for the year ended June 30, 2019. Excluding the impact of IAS 29, gross profit increased by US$9.3 million, to US$94.2 million for the year ended June 30, 2020, from US$84.9 million for the year ended June 30, 2019, slightly below revenue growth. The corresponding margin reduced 177 basis points to 48.7% from 50.5% in the previous period, mainly due to a greater proportion of adjuvants sold in Brazil through B2B channels compared to higher margin B2C sales and higher participation of relatively lower margin micro-beaded fertilizers within the product mix.

Research and development expenses

Research and development expenses include ongoing efforts to maintain and continuously update our existing product portfolio. Research and development expenses increased by US$0.5 million, to US$4.2 million for the year ended June 30, 2020 from US$3.7 million for the year ended June 30, 2019, primarily as a result of increased R&D employee costs of US$0.2 million, higher expenses in professional fees and outsourced services of US$0.5 million partially offset by lower expenses in laboratory supplies and materials of US$0.3 million and lower depreciations and amortizations by US$0.2 million.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased by US$0.9 million, to US$38.3 million for the year ended June 30, 2020 from US$39.2 million for the year ended June 30, 2019. Excluding a total of $3.4 million in non-cash, accrual-share-based incentives incurred during the second, third and fourth quarters of the year, offset by a gain of $0.8 million related to partial recovery of one-time transaction expenses related to Bioceres’ merger with Union Acquisition Corp. (UAC) accrued during the previous fiscal year, SG&A expenses for the year ended June 30, 2020 would have been $35.7 million, $1.2 million higher than the prior year, when excluding one-time transaction expenses of $4.5 million related to Bioceres’ merger with UAC that year. The increase also reflects certain corporate expenses that were not incurred by the Company in the year ended June 30, 2019, prior to its listing in March 2019 through the merger with UAC.

Share of profit of joint ventures and associates

The profit resulting from our share in the profit of joint ventures and associates increased US$1.5 million, to a profit of US$2.5 million for the year ended June 30, 2020 from a profit of US$1.0 million for the year ended June 30, 2019 as a result of higher incomes relating to our equity holdings in Synertech of US$1.3 million and in Trigall Genetics of US$0.2 million.

Other income or expenses, net

Other net results decreased to a loss of US$0.3 million for the year ended June 30, 2020 from a profit of US$0.4 for the year ended June 30, 2019, as a result of more miscellaneous losses.

Finance results

Finance costs: finance costs decreased by US$3.5 million, to US$20.9 million for the year ended June 30, 2020 from US$23.4 million for the year ended June 30, 2019, primarily as a result of lower interest expenses of US$2.4 million, which was caused by the Company’s increased cash liquidity primarily driven by more efficient interest rates.

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Other finance results: the charge of other finance results decreased by US$6.2 million for the year ended June 30, 2020 mainly as a result of null share-based payment cost of listing shares for the year ended June 30, 2020 compared to a loss of US$20.9 million for the year ended June 30, 2019 partially offset by a lower net gain of inflation effect on monetary items to US$9.2 million for the year ended June 30,2020 from US$14.6 million for the year ended June 30, 2019 and a null gain for cancellation of purchase option for the year ended June 30, 2020 compared to a gain of US$6.6 million for the year ended June 30, 2019.

Income tax

Income tax expense amounted to US$2.2 million for the year ended June 30, 2020 compared to an expense of US$7.0 million for the year ended June 30, 2019, primarily due to lower tax expenses recorded by Rizobacter.

Profit (loss) for the year

As a result of the foregoing, profit for the year ended June 30, 2020 amounted to US$4.2 million compared to a loss of US$16.4 million for the year ended June 30, 2019.

Other comprehensive income (loss)

Other comprehensive loss amounted to US$9.7 million for the year ended June 30, 2020 compared to a comprehensive profit of US$3.9 million for the year ended June 30, 2019, primarily as a result of higher exchange difference expenses on translation of foreign operations of US$18.9 million, partially offset by more gains from revaluation of property, plant and equipment, net of tax for US$11.4 million and from tax rate change over revaluation of property, plant and equipment for US$5.3 million.

Total comprehensive loss

As a result of the foregoing, we recorded a total comprehensive loss of US$5.4 million for the year ended June 30, 2020 compared to a total comprehensive loss of US$12.4 million for the year ended June 30, 2019.

Non-IFRS Financial Measures

We supplement the use of IFRS financial measures in this report with non-IFRS financial measures, including Adjusted EBITDA.

These non-IFRS measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS and may be different from non-IFRS measures used by other companies. In addition, these non-IFRS measures are not based on any comprehensive set of accounting rules or principles. Non-IFRS measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with IFRS. These non-IFRS financial measure should only be used to evaluate our results of operations in conjunction with the most comparable IFRS financial measures.

Adjusted EBITDA

We define Adjusted EBITDA as profit/(loss) exclusive of financial income/(costs), income tax benefit/(expense), depreciation, amortization, share-based compensation, inventory purchase allocation and one-time transactional expenses.

We believe that Adjusted EBITDA provide useful supplemental information to investors about us and our results. Adjusted EBITDA is among the measures used by our management team to evaluate our financial and operating performance and make day-to-day financial and operating decisions. In addition, Adjusted EBITDA, similarly titled measures are frequently used by our competitors, rating agencies, securities analysts, investors and other parties to evaluate companies in our industry. We also believe that Adjusted EBITDA is helpful to investors because they provide additional information about trends in our core operating performance prior to considering the impact of capital structure, depreciation, amortization and taxation on our results. Adjusted EBITDA should not be considered in isolation or as a substitute for other measures of financial performance reported in accordance with IFRS. Adjusted EBITDA has limitations as an analytical tool, including:

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We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of our consolidated financial statements in accordance with IFRS and reconciliation of Adjusted EBITDA to the most directly comparable IFRS measure, income/(loss) for the period or year.

The table below provides a reconciliation of our income or loss for the period/year to Adjusted EBITDA:

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We believe that funds from operations, the availability of liquid financial assets and our access to external borrowing through the financial markets will be sufficient to satisfy our working capital needs, to finance our planned capital spending program and to service our debt in the future twelve months and to address short-term changes in business conditions.

Net cash flows provided by (used in) operating activities

Cash used in operating activities for the year ended June 30, 2021 amounted to US$6.2 million. Our loss of US$3.8 million non-cash positive adjustments for income tax expense of US$14.4 million, non-cash positive adjustments relating primarily to financial results of US$27.9 million, depreciation and amortization charges of US$6.3 million and other non-cash adjustments of US$1.9 million were offset by working capital outflows of US$52.7 million.

Cash provided by operating activities for the year ended June 30, 2020 amounted to US$9.3 million. Our profit of US$4.2 million non-cash positive adjustments for income tax expense of US$2.2 million, non-cash positive adjustments relating primarily to financial results of US$32.7 million, depreciation and amortization charges of US$4.7 million were partially offset by working capital outflows of US$37.8 million.

Cash provided by operating activities for the year ended June 30, 2019 amounted to US$29.7 million. Our loss of US$16.4 million and working capital outflows of US$11.7 million were offset by non-cash positive adjustments for income tax expense of US$7 million, non-cash positive adjustments relating primarily to financial results of US$41.5 million, depreciation and amortization charges of US$4.8 million and non-cash transaction expenses of US$4.5 million.

Net cash flows used in investing activities

Cash used in investing activities for the year ended June 30, 2021 amounted to US$8.3 million and was primarily attributable to net investments in property, plant and equipment of US$2.5 million and purchases and capitalized development expenditures relating to intangible assets of US$11.1 million that were partially offset by net proceeds from financial assets of US$5.0 million.

Cash used in investing activities for the year ended June 30, 2020 amounted to US$7.8 million and was primarily attributable to investments in financial assets of US$3.4 million, investments in property, plant and equipment of US$1.6 million and purchases and capitalized development expenditures relating to intangible assets of US$2.8 million.

Cash used in investing activities for the year ended June 30, 2019 amounted to US$3.3 million and was primarily attributable to investments in property, plant and equipment of US$2.1 million and purchases and capitalized development expenditures relating to intangible assets of US$1.4 million.

Net cash flows provided by financing activities

Cash provided by financing activities for the year ended June 30, 2021 amounted to US$7.4 million and consisted mainly of net proceeds from borrowings of US$14.0 million, partially offset by purchases of our own shares of US$3.5 million and payments we did in consideration of the tender offer of warrants of US$1.0 million.

Cash provided by financing activities for the year ended June 30, 2020 amounted to US$33.5 million and consisted mainly of proceeds from borrowings and convertible notes of US$135.3 million, partially offset by payments of US$103.6 million from bank borrowings.

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Cash used in financing activities for the year ended June 30, 2019 amounted to US$26.9 million and consisted of repayments of bank borrowings and other short-term borrowings of US$116.9 million, partially offset by proceeds of US$88.7 million raised from bank borrowings.

Indebtedness

As of June 30, 2021, our total outstanding borrowings, including interest accrued, were US$124.8 million, which consists of US$76.8 million of current borrowings, including US$33.7 million of the short-term portion of long-term loans, US$24.7 million in corporate bonds, US$3.6 million in loans from the Parent and its affiliates and US$48.0 million of non-current borrowings, consisting of long-term loans, corporate bonds and loans received from the Parent, its subsidiaries and their respective related parties. In addition, as of June 30, 2021, we had US$48.7 million debt from the Convertible Notes.

Our borrowings, as of June 30, 2021, denominated in US dollars totaled US$101.7 million, which bear a fixed weighted average interest rate of 7.7%. Our borrowings denominated in Argentine pesos totaled US$ 23.0 million that bear a fixed weighted average interest rate of 36.8%.

Of our total outstanding borrowings as of June 30, 2021, US$113.3 million was unsecured, US$10.5 million was secured by treasury bonds, and US$1.0 million was secured with a first lien mortgage of real estate assets and a pledge on the shares representing 10% of the holding of Rasa Holding LLC in the capital of Rizobacter Argentina S.A.

Parent Loan

On May 7, 2019 we entered into an agreement with the Parent for the restructuring of US$15 million of our outstanding intercompany loans into a facility with a 5-year maturity. Cash interest is payable quarterly at a 9.875% rate. As of June 30, 2021, the principal outstanding debt amounted to US$9.0 million.

Series VI

On August 31, 2021, we completed a $16.1 million public offering of Series VI corporate bonds in the Argentine market. The bonds were issued in two tranches: Class A bonds mature in March 2023 and pay an annual nominal interest rate of 3.75% and Class B bonds mature September 2024 and pay an annual nominal interest rate of 5.25%.

Convertible notes

On March 6, 2020, we issued $42.5 million convertible notes in a private placement. The convertible notes will mature on March 6, 2023 unless earlier converted or repurchased. The conversion price of the convertible notes is $8.00 per share (the “Strike Price”). The convertible notes are convertible into cash, ordinary shares or a combination of cash and shares at the holders’ option upon maturity or the occurrence of a change of control. At any time prior to maturity, we may elect to convert these notes into ordinary shares through a mandatory conversion, provided that our free float exceeds $100 million and the share price has traded above the Strike Price for 10 consecutive days.

The convertible notes accrue interest payable semi-annually beginning on June 15, 2020 at a rate of 11.5% per year payable in cash or in kind at our option. Payments in kind will be capitalized by adding such interest to the outstanding principal amount of the convertible notes on each corresponding interest payment date.

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The Notes are guaranteed by; (a) corporate guarantees; (b) an Intercompany Loan Pledge Agreement; (c) a share pledge granted by RASA Holding LLC of 41.3% of its shares in Rizobacter Argentina S.A., representing 33% of the capital stock of Rizobacter Argentina S.A.; and (d) an account pledge agreement and fiduciary assignment agreement granted by Rizobacter Do Brasil Ltda.

Consideration of payment of acquisitions

Bioceres Crops S.A.

In June 2019, we signed a share purchase agreement (SPA) with Bioceres S.A. for 50% of ownership in Bioceres Crops. In consideration for the SPA, we will pay installments equivalent to 50% of the royalties that Bioceres Crops Solutions will accrue from Bioceres Crops, up to a total amount of $0.7 million.

Verdeca and other intangibles assets

On November 12, 2020, we acquired from Arcadia Biosciences the remaining ownership interest in Verdeca. As part of this transaction, we gained full access and control of Verdeca´s vetted soybean library of gene-edited materials used to develop new quality and productivity, as well as exclusive rights to all Arcadia technologies that are applicable to soybean. In addition, through this transaction, we have also acquired rights to Arcadia’s quality wheat traits and the related Good Wheat™ brand for Latin America. In consideration for the acquisition, we paid Arcadia $5 million in cash and $15 million in equity consisting of 1,875,000 of our common shares, as well as $1 million in reimbursement costs associated with the transaction. In addition, we will pay Arcadia (i) $2 million upon obtaining Chinese import clearance for HB4 Soy or achieving penetration of this technology in a minimum number of planted hectares, and (ii) royalty payments equivalent to (a) 6% of the net HB4 Soy technology revenues realized by Verdeca, capped at $10 million aggregate amount, and (b) 25% of the net wheat technology revenues resulting from the in-licensed materials.

Insuagro

On April 9, 2021, as part of the reorganization process of our crop protection business segment, we acquired a controlling interest in Insuagro, an Argentine public company listed on Bolsas y Mercados Argentinos S.A. (“BYMA”). The interest acquired is represented by a total of 11,022,000 shares, distributed as follows: (i) 2,749,390 ordinary, registered shares of AR$ 0.10 nominal value each and five votes per share, denominated Class A; and (ii) 8,272,610 ordinary, registered shares of Pesos 0.10 nominal value each and one vote per share, denominated Class B, jointly representing 50.1% of equity interest and 55.05% of voting interest.

The consideration for the acquisition was $0.282 per share, totaling an amount of $3.1 million (the “Fixed Price”). At closing, we paid $0.2 million, and the rest is payable in three installment due August 31, 2022, 2023 and 2024 for an amount of $0.9 million, $0.9 million and $1.2 million, respectively. The amount payable will accrue an interest annual rate of 5.5%. Furthermore, the Fixed Price may be increased up to 3.5x Adjusted EBITDA (as defined in the share exchange agreement) per share to be measured in each annual reporting period. As we reached a controlling interest in Insuagro and pursuant to the Argentine Capital Market Law and the National Securities Commission (“CNV”) rules, we submitted a mandatory public offer of acquisition (“POA” or “OPA” the anacronym in Spanish) of the Class B ordinary shares listed at BYMA. As a result of the OPA, we acquired 2,467,990 ordinary shares class B, increasing our shareholding in Insuagro to 61.32% of the equity interest and 61.22% of the voting rights.

Summary of contractual obligations

The following table summarizes our contractual obligations as of June 30, 2021.