Exhibit 99.1
INDEX
Unaudited interim condensed consolidated financial statements as of December 31, 2022, June 30, 2022 and for the three and six month periods ended December 31, 2022 and 2021. | |
F-3 | |
F-5 | |
F-7 | |
F-9 | |
Notes to the unaudited interim condensed consolidated financial statements | F-12 |
F-2
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2022, and June 30, 2022
(Amounts in US Dollars)
| Notes |
| 12/31/2022 |
| 06/30/2022 | |
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
| 7.1 |
| 68,550,022 |
| 33,475,266 |
Other financial assets |
| 7.2 |
| 18,882,388 |
| 5,401,133 |
Trade receivables |
| 7.3 |
| 178,231,597 |
| 111,752,310 |
Other receivables |
| 7.4 |
| 25,653,798 |
| 19,327,584 |
Income and minimum presumed recoverable income taxes |
| 1,674,314 |
| 1,647,398 | ||
Inventories |
| 7.5 |
| 157,647,583 |
| 126,044,122 |
Biological assets | 7.6 | 581,100 | 57,313 | |||
Total current assets |
|
| 451,220,802 |
| 297,705,126 | |
|
|
|
| |||
NON-CURRENT ASSETS |
|
|
|
|
| |
Other financial assets |
| 7.2 |
| 1,104,718 |
| 619,841 |
Trade receivables | 7.3 | — | 200,412 | |||
Other receivables |
| 7.4 |
| 3,173,261 |
| 2,254,199 |
Income and minimum presumed recoverable income taxes |
| 18,465 |
| 44,412 | ||
Deferred tax assets | 9 |
| 4,619,247 |
| 4,011,374 | |
Investments in joint ventures and associates |
| 13 |
| 38,810,692 |
| 38,554,092 |
Property, plant and equipment |
| 7.7 |
| 63,794,675 |
| 49,908,325 |
Intangible assets |
| 7.8 |
| 174,412,251 |
| 76,704,869 |
Goodwill |
| 7.9 |
| 122,532,487 |
| 36,073,685 |
Right of use asset | 19 | 13,164,994 | 12,144,026 | |||
Total non-current assets |
|
|
| 421,630,790 |
| 220,515,235 |
Total assets |
|
|
| 872,851,592 |
| 518,220,361 |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties’ balances and transactions are disclosed in Note 16.
F-3
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of December 31, 2022, and June 30, 2022
(Amounts in US Dollars)
| Notes |
| 12/31/2022 |
| 06/30/2022 | |
LIABILITIES |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
| |||
Trade and other payables |
| 7.10 |
| 165,096,567 |
| 125,849,620 |
Borrowings |
| 7.11 |
| 105,462,623 |
| 71,301,468 |
Employee benefits and social security |
| 7.13 |
| 9,867,633 |
| 7,619,121 |
Deferred revenue and advances from customers | 7.14 |
| 44,136,726 |
| 5,895,313 | |
Income tax payable |
|
| 1,079,857 |
| 7,538,764 | |
Consideration for acquisition | 1,943,216 | 3,048,562 | ||||
Lease liabilities | 19 |
| 3,007,806 |
| 1,412,904 | |
Total current liabilities |
| 330,594,428 | 222,665,752 | |||
|
|
|
|
|
| |
NON-CURRENT LIABILITIES | ||||||
Trade and other payables | 7.10 | 810,921 | — | |||
Borrowings | 7.11 | 79,109,119 | 74,177,169 | |||
Deferred revenue and advances from customers | 7.14 | 17,096,542 | — | |||
Joint ventures and associates | 13 |
| 122,059 |
| 717,948 | |
Deferred tax liabilities |
| 9 |
| 46,130,828 |
| 29,005,943 |
Provisions |
|
| 464,564 |
| 603,022 | |
Consideration for acquisition | 8,467,428 | 9,854,228 | ||||
Secured notes | 7.12 | 72,558,213 | 12,559,071 | |||
Lease liabilities | 19 | 10,880,795 | 10,338,380 | |||
Total non-current liabilities |
| 235,640,469 |
| 137,255,761 | ||
Total liabilities |
|
|
| 566,234,897 |
| 359,921,513 |
|
| |||||
EQUITY |
|
|
|
|
|
|
Equity attributable to owners of the parent |
|
|
| 272,648,077 |
| 127,358,573 |
Non-controlling interest |
|
|
| 33,968,618 |
| 30,940,275 |
Total equity |
|
|
| 306,616,695 |
| 158,298,848 |
Total equity and liabilities |
|
|
| 872,851,592 |
| 518,220,361 |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties’ balances and transactions are disclosed in Note 16.
F-4
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three and six-month periods ended December 31, 2022 and 2021
(Amounts in US Dollars)
Three-month period ended | Six-month period ended | |||||||||
| Notes |
| 12/31/2022 |
| 12/31/2021 |
| 12/31/2022 |
| 12/31/2021 | |
Revenues from contracts with customers |
| 8.1 |
| 94,548,714 |
| 92,313,776 |
| 221,391,962 |
| 158,667,650 |
Government grants |
| — | 337 | — | 805 | |||||
Initial recognition and changes in the fair value of biological assets at the point of harvest |
|
|
| (138,529) |
| 1,590,925 |
| 351,477 |
| 2,142,828 |
Changes in the net realizable value of agricultural products after harvest | (1,509,023) | (1,242,185) | (1,736,959) | (1,242,185) | ||||||
Total | 92,901,162 | 92,662,853 | 220,006,480 | 159,569,098 | ||||||
Cost of sales |
| 8.2 |
| (59,141,259) |
| (55,332,989) |
| (134,817,137) |
| (93,215,442) |
Research and development expenses |
| 8.3 |
| (3,457,892) |
| (1,384,032) |
| (7,309,906) |
| (2,815,574) |
Selling, general and administrative expenses |
| 8.4 |
| (28,413,577) |
| (18,814,561) |
| (60,318,488) |
| (34,997,761) |
Share of profit or loss of joint ventures and associates |
| 13 |
| 40,048 |
| 1,141,323 |
| 882,288 |
| 919,087 |
Other income or expenses, net | 8.5 |
| 290,487 |
| (571,365) |
| 768,528 |
| (1,717,982) | |
Operating profit |
|
| 2,218,969 |
| 17,701,229 |
| 19,211,765 |
| 27,741,426 | |
|
|
|
|
|
|
|
|
|
|
|
Net financial cost | 8.6 |
| (9,960,342) |
| (8,221,621) |
| (18,028,495) |
| (13,401,289) | |
(Loss) Profit before income tax |
|
| (7,741,373) |
| 9,479,608 |
| 1,183,270 |
| 14,340,137 | |
|
|
|
|
| ||||||
Income tax | 9 | (684,906) | (4,141,102) | (5,697,549) | (6,736,415) | |||||
(Loss) profit for the period |
|
| (8,426,279) |
| 5,338,506 |
| (4,514,279) |
| 7,603,722 | |
(Loss) profit for the period attributable to: |
|
|
|
|
|
|
|
| ||
Equity holders of the parent |
| (8,156,746) |
| 3,427,093 |
| (7,658,449) |
| 4,301,230 | ||
Non-controlling interests |
| (269,533) |
| 1,911,413 |
| 3,144,170 |
| 3,302,492 | ||
| (8,426,279) |
| 5,338,506 |
| (4,514,279) |
| 7,603,722 | |||
(Loss) profit per share | ||||||||||
Basic (loss) profit attributable to ordinary equity holders of the parent | 10 | (0.1323) | 0.0834 | (0.1242) | 0.1046 | |||||
Diluted (loss) profit attributable to ordinary equity holders of the parent | 10 | (0.1323) | 0.0808 | (0.1242) | 0.1014 | |||||
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties’ balances and transactions are disclosed in Note 16.
F-5
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
For the three and six-month periods ended December 31, 2022 and 2021
(Amounts in US Dollars)
Three-month period ended | Six-month period ended | |||||||
| 12/31/2022 |
| 12/31/2021 |
| 12/31/2022 |
| 12/31/2021 | |
(Loss) profit for the period | (8,426,279) | 5,338,506 | (4,514,279) | 7,603,722 | ||||
Other comprehensive income (loss) | 585,882 | 7,893,351 | 616,907 | 13,622,488 | ||||
Items that may be subsequently reclassified to profit and loss |
| 585,882 |
| 9,331,728 |
| 616,907 |
| 16,449,749 |
Foreign exchange differences on translation of foreign operations from joint ventures | (136,762) | 1,887,130 | (21,946) | 3,504,622 | ||||
Foreign exchange differences on translation of foreign operations |
| 722,644 |
| 7,444,598 |
| 638,853 |
| 12,945,127 |
Items that will not be subsequently reclassified to loss and profit | — | (1,438,377) | — | (2,827,261) | ||||
Revaluation of property, plant and equipment, net of tax, of joint ventures and associates 1 |
| — |
| (189,996) |
| — |
| (363,848) |
Revaluation of property, plant and equipment, net of tax 2 |
| — |
| (1,248,381) |
| — |
| (2,463,413) |
Total comprehensive (loss) profit |
| (7,840,397) |
| 13,231,857 |
| (3,897,372) |
| 21,226,210 |
|
|
|
|
|
|
| ||
Total comprehensive (loss) profit attributable to: |
|
|
|
|
|
|
|
|
Equity holders of the parent |
| (7,779,559) |
| 10,074,002 |
| (7,377,844) |
| 15,796,061 |
Non-controlling interests | (60,838) | 3,157,855 | 3,480,472 | 5,430,149 | ||||
(7,840,397) | 13,231,857 | (3,897,372) | 21,226,210 | |||||
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties’ balances and transactions are disclosed in Note 16.
F-6
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the six-month periods ended December 31, 2022 and 2021
(Amounts in US Dollars)
Attributable to the equity holders of the parent | ||||||||||||||||||||||||||
Revaluation | Equity / | |||||||||||||||||||||||||
Changes in | Stock | Foreign | of PP&E | (deficit) | ||||||||||||||||||||||
non- | Own shares | options and | currency | and effect | attributable | Non- | ||||||||||||||||||||
Issued | Share | controlling | trading | share based | Convertible | Cost of own | Retained | translation | of tax rate | to owners of | controlling | Total | ||||||||||||||
Description |
| capital |
| premium |
| interests |
| premium |
| incentives |
| instruments |
| shares held |
| deficit |
| reserve |
| change |
| the parent |
| Interests |
| equity |
06/30/2021 | 4,158 | 120,662,386 | — | (916,202) | 3,672,768 | 702,981 | (3,530,926) | (25,483,275) | (32,622,808) | 5,254,160 | 67,743,242 | 22,547,062 |
| 90,290,304 | ||||||||||||
Share-based incentives | — | 20,205 | — | — | 853,204 | — | — | — | — | — | 873,409 | — | 873,409 | |||||||||||||
Changes in non-controlling interests | — | — | (255,893) | — | — | — | — | — | — | — | (255,893) | (724,429) | (980,322) | |||||||||||||
Profit for the period | — | — | — | — | — | — | — | 4,301,230 | — | — | 4,301,230 | 3,302,492 | 7,603,722 | |||||||||||||
Other comprehensive income or (loss) | — | — | — | — | — | — | — | — | 13,756,640 | (2,261,809) | 11,494,831 | 2,127,657 | 13,622,488 | |||||||||||||
12/31/2021 |
| 4,158 |
| 120,682,591 |
| (255,893) |
| (916,202) |
| 4,525,972 |
| 702,981 |
| (3,530,926) |
| (21,182,045) | (18,866,168) |
| 2,992,351 | 84,156,819 | 27,252,782 | 111,409,601 | ||||
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties’ balances and transactions are disclosed in Note 16.
F-7
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the six-month periods ended December 31, 2022 and 2021
(Amounts in US Dollars)
Attributable to the equity holders of the parent | ||||||||||||||||||||||||||
Equity / | ||||||||||||||||||||||||||
|
|
|
| Stock |
|
|
| Revaluation | (deficit) | |||||||||||||||||
Changes in | Own |
| options |
|
| Cost of | Foreign | of PP&E | attributable | |||||||||||||||||
non- | shares |
| and share |
|
| own | currency | and effect | to owners | Non- | ||||||||||||||||
Issued | Share | controlling | trading | based | Convertible |
| shares | Retained | translation | of tax rate | of the | controlling | Total | |||||||||||||
Description |
| capital |
| premium |
| interests |
| premium |
| incentives |
| instruments |
| held |
| deficit |
| reserve |
| change |
| parent |
| Interests | equity | |
06/30/2022 | 4,637 | 158,819,506 | (255,893) | (916,202) | 3,767,925 | 175,745 | (3,530,926) | (32,682,893) | 969,402 | 1,007,272 | 127,358,573 | 30,940,275 |
| 158,298,848 | ||||||||||||
Share-based incentives | 5 | 631,778 | — | 135,361 | 1,806,100 | — | — | — | — | — | 2,573,244 | — | 2,573,244 | |||||||||||||
Business combination (Note 6) | 1,640 | 153,357,564 | — | — | 1,620,140 | — | — | — | — | — | 154,979,344 | — | 154,979,344 | |||||||||||||
Capitalization of convertible notes (Note 7.12) | 153 | 12,211,485 | — | — | — | — | — | — | — | — | 12,211,638 | — | 12,211,638 | |||||||||||||
Purchase of own shares | — | — | — | — | — | — | (26,206,394) | — | — | — | (26,206,394) | — | (26,206,394) | |||||||||||||
Issuance of convertible notes (Note 7.12) | — | — | — | — | — | 9,109,516 | — | — | — | — | 9,109,516 | — | 9,109,516 | |||||||||||||
Distribution of dividends by subsidiary | — | — | — | — | — | — | — | — | — | — | — | (452,129) | (452,129) | |||||||||||||
(Loss) profit for the period | — | — | — | — | — | — | — | (7,658,449) | — | — | (7,658,449) | 3,144,170 | (4,514,279) | |||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | — | — | — | 280,605 | — | 280,605 | 336,302 | 616,907 | |||||||||||||
12/31/2022 |
| 6,435 |
| 325,020,333 |
| (255,893) |
| (780,841) |
| 7,194,165 |
| 9,285,261 |
| (29,737,320) |
| (40,341,342) | 1,250,007 |
| 1,007,272 | 272,648,077 | 33,968,618 | 306,616,695 | ||||
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties’ balances and transactions are disclosed in Note 16.
F-8
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six-month periods ended December 31, 2022 and 2021
(Amounts in US Dollars)
| Notes |
| 12/31/2022 |
| 12/31/2021 | |
OPERATING ACTIVITIES |
|
|
|
|
|
|
(Loss) profit for the period |
|
|
| (4,514,279) |
| 7,603,722 |
|
| |||||
Adjustments to reconcile profit to net cash flows |
|
|
|
|
| |
Income tax |
|
|
| 5,697,549 |
| 6,736,415 |
Financial results |
|
|
| 18,028,495 |
| 13,401,289 |
Depreciation of property, plant and equipment |
| 7.7 |
| 2,960,156 |
| 1,668,788 |
Amortization of intangible assets |
| 7.8 |
| 5,191,521 |
| 1,375,998 |
Depreciation of leased assets |
| 19 |
| 1,837,532 | 501,232 | |
Transactional expenses | 3,634,992 | — | ||||
Share-based incentive and stock options |
|
|
| 2,062,345 |
| 873,407 |
Share of profit or loss of joint ventures and associates |
| 13 |
| (882,288) |
| (919,087) |
Loss of participation in joint ventures and associates | 7,853 | — | ||||
Provisions for contingencies |
|
| 39,847 |
| 65,598 | |
Allowance for impairment of trade debtors |
|
|
| 468,992 |
| 815,929 |
Allowance for obsolescence |
|
|
| 481,332 |
| 740,264 |
Initial recognition and changes in the fair value of biological assets |
|
|
| (351,477) |
| (2,142,828) |
Changes in the net realizable value of agricultural products after harvest | 1,736,959 | 1,242,185 | ||||
Gain or loss on sale of equipment and intangible assets |
|
|
| (111,728) |
| (133,586) |
|
|
|
| |||
Working capital adjustments |
|
|
|
|
|
|
Trade receivables |
|
|
| (63,042,799) |
| (34,516,244) |
Other receivables |
|
|
| (5,986,718) |
| (4,827,685) |
Income and minimum presumed income taxes payable |
|
|
| (3,869,723) |
| 6,742,149 |
Inventories and biological assets |
|
|
| (23,455,328) |
| (35,202,949) |
Trade and other payables |
|
|
| 12,216,345 |
| 31,932,303 |
Employee benefits and social security |
|
|
| 2,185,006 |
| 1,604,112 |
Deferred revenue and advances from customers |
| 6 |
| 53,775,013 |
| 745,423 |
Income taxes paid | (2,772,608) | (3,041,629) | ||||
Government grants |
|
|
| — |
| (784) |
Interest collected |
|
|
| 3,493,607 |
| 1,866,722 |
Inflation effects on working capital adjustments |
|
|
| — |
| (16,998,252) |
Net cash flows generated (used) by operating activities |
|
|
| 8,830,596 |
| (19,867,508) |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties’ balances and transactions are disclosed in Note 16.
F-9
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six-month periods ended December 31, 2022 and 2021
(Amounts in US Dollars)
| Notes |
| 12/31/2022 |
| 12/31/2021 | |
INVESTMENT ACTIVITIES |
|
|
|
|
|
|
Proceeds from sale of property, plant and equipment |
| 118,914 |
| 319,587 | ||
Net cash received from business combination | 6 | 4,373,265 | — | |||
Proceeds from financial assets | — | 8,657,999 | ||||
Investment in financial assets | (13,813,944) | (482,849) | ||||
Purchase of property, plant and equipment |
| 7.7 |
| (3,824,078) |
| (1,756,346) |
Capitalized development expenditures |
| 7.8 |
| (5,926,539) |
| (2,425,244) |
Purchase of intangible assets |
| 7.8 |
| (148,075) |
| (346,268) |
Net cash flows (used) generated by investing activities |
| (19,220,457) |
| 3,966,879 | ||
FINANCING ACTIVITIES |
|
|
|
| ||
Proceeds from borrowings |
| 136,880,982 |
| 79,923,730 | ||
Repayment of borrowings, financed payments and interest payments |
| (88,650,542) |
| (58,787,312) | ||
Decrease in bank overdrafts and other short-term borrowings |
| — |
| (32,838) | ||
Other financial proceeds or payments, net |
| (3,588,240) |
| (2,107,971) | ||
Acquisition of non-controlling interest in subsidiaries | — | (724,429) | ||||
Purchase of own shares | (2,291,365) | — | ||||
Leased assets payments | (1,553,958) | (493,453) | ||||
Cash dividend distributed by subsidiary | (452,129) | — | ||||
Net cash flows generated by financing activities |
|
| 40,344,748 |
| 17,777,727 | |
|
|
|
| |||
Net increase in cash and cash equivalents |
|
| 29,954,887 |
| 1,877,098 | |
|
|
|
| |||
Inflation effects on cash and cash equivalents |
| — | (3,592,117) | |||
|
|
|
| |||
Cash and cash equivalents as of beginning of the period |
| 7.1 |
| 33,475,266 |
| 36,046,113 |
Effect of exchange rate changes on cash and equivalents |
|
| 5,119,869 |
| 2,035,037 | |
Cash and cash equivalents as of the end of the period |
| 7.1 |
| 68,550,022 |
| 36,366,131 |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties’ balances and transactions are disclosed in Note 16.
F-10
Index
1. | General information |
2. | Accounting standards and basis of preparation |
3. | New standards, amendments and interpretations issued by the IASB |
4. | Impact of COVID-19 |
5. | Seasonality |
6. | Acquisitions and other significant transactions |
7. | Information about components of unaudited interim condensed consolidated statements of financial position |
8. | Information about components of unaudited interim condensed consolidated statement of comprehensive income |
9. | Taxation |
10. | Earnings per share |
11. | Information about unaudited condensed consolidated components of equity |
12. | Cash flow information |
13. | Joint ventures and associates |
14. | Segment information |
15. | Financial instruments – Risk management |
16. | Shareholders and other related parties’ balances and transactions |
17. | Key management personnel compensation |
18. | Share-based payments |
19. | Leases |
20. | Contingencies, commitments, and restrictions on the distribution of profits |
21. | Events occurring after the reporting period |
F-11
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
1. GENERAL INFORMATION
Bioceres Crop Solutions Corp. (NASDAQ: BIOX) is a fully integrated provider of crop productivity technologies designed to enable the transition of agriculture towards carbon neutrality. To do this, Bioceres’ products create economic incentives for farmers and other stakeholders to adopt environmentally friendly production practices. Bioceres has a unique biotech platform with high impact, patented technologies for seeds and microbial ag inputs, as well as next generation crop nutrition and protection solutions.
Bioceres is a global company with an extensive geographic footprint. The Group’s agricultural inputs are marketed across more than 30 countries, mainly in Argentina, Brazil, United States,Europe and South Africa.
Unless the context otherwise requires, “we”, “us”, “our”, “Bioceres”, “BIOX”, “the Group”, and “Bioceres Crop Solutions” will refer to Bioceres Crop Solutions Corp. and its subsidiaries.
2. ACCOUNTING STANDARDS AND BASIS OF PREPARATION
Statement of compliance with IFRS as issued by IASB
These unaudited interim condensed consolidated financial statements for the six-month period ended December 31, 2022, have been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting.
These unaudited interim condensed consolidated financial statements do not include all notes of the type normally included in an annual financial statement. Accordingly, these unaudited interim condensed consolidated financial statements are to be read in conjunction with the consolidated financial statements as of June 30, 2022.
Authorization for the issue of the unaudited interim condensed consolidated financial statements
These unaudited interim condensed consolidated financial statements of the Group as of December 31, 2022, June 30, 2022 and for the three and six month periods ended December 31, 2022 and 2021 were authorized by the Board of Directors of Bioceres Crop Solutions Corp. on February 27, 2023.
Basis of measurement
The unaudited interim condensed consolidated financial statements of the Group have been prepared using:
Functional currency and presentation currency
a) | Functional currency |
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic market in which the entity operates (i.e., “the functional currency”).
IAS 29 “Financial reporting in hyperinflationary economies” requires that the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy, whether these are based on the historical cost method or the current cost method, be
F-12
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
stated in terms of the measuring unit current at the closing date of the reporting period. For such purpose, the inflation produced since the acquisition date or the revaluation date, as applicable, must be computed in non-monetary items. The standard details a series of factors to be considered for concluding whether an economy is hyperinflationary, including, but not limited to, a cumulative inflation rate over a three-year period that approaches or exceeds 100%. The accumulated inflation in three years, as of June 30, 2018, was over 100%. It was for this reason that, in accordance with IAS 29, the Argentine economy was considered as hyperinflationary since July 1, 2018. Consequently, the Group has applied IAS 29 to these financial statements.
In an inflationary period, any entity that maintains an excess of monetary assets over monetary liabilities, will lose purchasing power, and any entity that maintains an excess of monetary liabilities over monetary assets, will gain purchasing power, provided that such items are not subject to an adjustment mechanism.
Briefly, the restatement mechanism of IAS 29 establishes that monetary assets and liabilities will not be restated because they are already expressed in a current unit of measurement at the end of the reporting period. Assets and liabilities subject to adjustments based on specific agreements, will be adjusted according to those agreements. Non-monetary items measured at their current values at the end of the reporting period, such as the net realizable value or others, do not need to be restated. The remaining non-monetary assets and liabilities will be restated according to a general price index. The loss or gain for the net monetary position will be included in the net result of the reporting period, listed in a separate line item.
From July 1, 2022 the main Argentinian subsidiaries of the Group have changed their functional currency from Argentine Pesos to United States Dollars as a result of changes in events and conditions relevant to their business operations. These include a macroeconomic context with high inflation and depreciation of the Argentine peso, and inorganic growth at the close of the fiscal year ended June 30, 2022, which led to a global unification of management and commercial strategy whereby integration of the businesses was done by business units, regardless of the legal entities.
The effect of the functional currency change was recorded prospectively as of July 1, 2022, in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates. As a result, from July 1,2022 there are no longer effects of inflation adjustments for the above- mentioned subsidiaries.
b) | Presentation currency |
The unaudited interim condensed consolidated financial statements of the Group are presented in US Dollars.
c) | Foreign currency |
Transactions entered into by Group entities in a currency other than their functional currency are recorded at the relevant exchange rates as of the date upon which such transactions occur. Foreign currency monetary assets and liabilities are translated at the prevailing exchanges rates as of the final day of each reporting period. Exchange differences arising from the retranslation of unsettled monetary assets and liabilities are recognized immediately in profit or loss, except for foreign currency borrowings qualifying as a hedge of a net investment in a foreign operation for which exchange differences are recognized in other comprehensive income and accumulated in the foreign exchange reserve along with the exchange differences arising from the retranslation of the foreign operation. Upon the disposal of a foreign operation, the cumulative exchange differences recognized in the foreign exchange reserve relating to such operation up to the date of disposal are transferred to the consolidated statement of profit or loss and other comprehensive income as part of the gain or loss recognized upon such disposal.
Changes in accounting policies
The accounting policies adopted in the preparation of these unaudited interim condensed consolidated financial statements are consistent with those adopted for the preparation of the consolidated financial statements as of June 30, 2022.
F-13
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
3. NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ISSUED BY THE IASB
Annual Improvements to IFRS Standards 2018–2020
The following improvements were finalized in May 2020:
These improvements are not expected to have material impact on the Group.
The new standard is effective for financial years beginning on or after January 1, 2022.
Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before intended use.
The amendment to IAS 16 Property, Plant and Equipment (PP&E) prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it assesses the technical and physical performance of the asset. The financial performance of the asset is not relevant to this assessment.
Entities must disclose separately the amounts of proceeds and costs relating to items produced that are not an output of the entity’s ordinary activities.
The amendments are effective for annual periods beginning on or after January 1, 2022.
These amendments are not expected to have material impact on the Group.
Amendments to IFRS 3 - Reference to the Conceptual Framework.
Minor amendments were made to IFRS 3 Business Combinations to update the references to the Conceptual Framework for Financial Reporting and add an exception for the recognition of liabilities and contingent liabilities within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets and Interpretation 21 Levies. The amendments also confirm that contingent assets should not be recognized at the acquisition date.
The amendments are effective for financial years beginning on or after January 1, 2022.
These amendments are not expected to have material impact on the Group.
F-14
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Amendments to IAS 37 - Onerous Contracts – Cost of Fulfilling a Contract.
The amendment to IAS 37 clarifies that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling contracts. Before recognizing a separate provision for an onerous contract, the entity recognizes any impairment loss that has occurred on assets used in fulfilling the contract.
The amendments are effective for financial years beginning on or after January 1, 2022.
These amendments are not expected to have material impact on the Group.
b) The following new standards are not yet adopted by the Group.
Amendments to IFRS 16- Lease Liability in a Sale and Leaseback.
The amendment requires a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. The new requirements do not prevent a seller-lessee from recognizing in profit or loss any gain or loss relating to the partial or full termination of lease.
These amendments are not expected to have material impact on the Group.
The amendments are effective for financial years beginning on or after January 1, 2024. Earlier application is permitted.
Amendments to IAS1 – Non- current liabilities with covenants.
The amendments modify the requirements introduced by Classification of Liabilities as Current or Non-current on how an entity classifies debt and other financial liabilities as current or non-current in particular circumstances. Only covenants with which an entity is required to comply on or before the reporting date affect the classification of a liability as current or non-current. In addition, an entity must disclose information in the notes that enables users of financial statements to understand the risk that non-current liabilities with covenants could become repayable within twelve months.
These amendments are not expected to have material impact on the Group.
The amendments apply retrospectively for annual reporting periods beginning on or after 1 January 2024, with early application permitted.
Amendment to IAS 12 – deferred tax related to assets and liabilities arising from a single transaction
The amendments introduce an exception to the initial recognition exemption in IAS 12. Applying this exception, an entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences.
The amendments apply to transactions that occur on or after the beginning of the earliest comparative period presented.
The amendments also apply to taxable and deductible temporary differences associated with right-of-use assets and lease liabilities, and decommissioning obligations and corresponding amounts recognized as assets at the beginning of the earliest comparative period presented.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023. Early application of the amendments is permitted.
F-15
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
These amendments are not expected to have material impact on the Group.
4. IMPACT OF COVID-19
The Group’s operations, which involve agricultural production and commercialization activities, have been mostly exempted from the disruptions caused by covid-19. Consequently, our financial condition, liquidity position and results of operations have not been materially impacted as we have been allowed to continue with our operations.
The eventual scope of covid-19 pandemic and its impact on the countries and global economy are unknown, with governments being able to implement stricter containment measures, which are not predictable in this instance. It cannot be reasonably quantified to what extent covid-19 will affect the Group’s business and the results of its operations in the future. The Board of Directors and senior management are closely monitoring the pandemic and taking all necessary measures at their disposal to protect human life and the Group’s operations and financial condition.
5. SEASONALITY
The Group 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 seed and integrated products, crop protection products and crop nutrition products. Given the cyclicality of crop planting and harvesting and South America’s planting and growing seasons, which vary from year to year, our business is highly seasonal. This results in substantial fluctuations in quarterly sales and profitability. Generally, the Group sales are concentrated in the third and fourth quarters of each calendar year, when demand for seed and integrated products, crop protection products and crop nutrition products increases as South American growers begin planting their fields. Regarding the seed and integrated products business, the Group contracts with growers and seed suppliers based upon anticipated market demand that we forecast. Generally, in the 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 crop protection and crop nutrition business following a cycle similar to the seed cycle. The impact of seasonality and the resulting fluctuations in quarterly results may be lessened as we achieve our international expansion plans for the seed and integrated products business in geographies with complementary seasons and climates.
6. ACQUISITIONS AND OTHER SIGNIFICANT TRANSACTIONS
Pro Farm Group, Inc
On July 12, 2022, we announced the closing of the merger (the “Pro Farm Merger”) with Pro Farm Group, Inc. (formerly Marrone Bio Innovations Inc.), pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) dated March 16, 2022, among us, BCS Merger Sub, Inc., a wholly owned subsidiary of Bioceres, and Pro Farm Group, Inc. Upon the closing of the Pro Farm Merger, Pro Farm Group, Inc. became a wholly owned subsidiary of Bioceres and each share of Pro Farm Group, Inc. common stock was exchanged for our ordinary shares at a fixed exchange ratio of 0.088.
Pro Farm Group, Inc. leads the movement to environmentally sustainable farming practices through the discovery, development and sale of innovative biological products for crop protection, crop health and crop nutrition. The company’s commercial products are sold globally and supported by more than 343 patents and patent applications. Pro Farm Group, Inc. develops novel, environmentally sound solutions for agriculture using proprietary technologies to isolate and screen naturally occurring microorganisms and plant extracts.
The combined company has a diverse customer base, product portfolio and geographic reach across a wide range of crops, positioned to serve the massive market opportunity emerging from the bio-reduction and replacement of chemical ag inputs. The merger combines our expertise in bionutrition and seed care products with Pro Farm Group’s leadership in the development of biological crop protection and plant health solutions, creating a global leader in the development and commercialization of sustainable agricultural solutions.
F-16
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
The consideration of payment was measured at fair value, which was calculated as the sum of the acquisition-date fair values of the assets transferred, and the liabilities incurred.
Consideration of payment (amounts in thousands of dollars):
Shares issued |
| 154,795 |
Assumed RSU & Stock options |
| 1,620 |
Cash payment |
| 29 |
Total consideration |
| 156,444 |
Assets acquired and liabilities assumed (amounts in thousands of dollars):
The figures reported above could be subject to changes.
Goodwill is not expected to be deductible for tax purposes.
The amounts of revenue and net loss of the acquiree since the merger date included in the condensed consolidated statement of comprehensive income for the six- month period ended December 31, 2022, were $17.6 million and ($6.0) million, respectively.
The pro-forma revenue and net loss of the combined entity for the six-month period ended December 31, 2022 as though the date for the merger had been as of the beginning of the reporting period amount to $221.7 million and $(6.8) million, respectively.
F-17
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Syngenta Seedcare agreement
On September 12, 2022, we entered into a 10-year agreement with Syngenta Crop Protection AG (“Syngenta”), pursuant to which Syngenta will be the exclusive global distributor of certain of Bioceres’ biological solutions for seed care applications. Products included within the scope of the agreement are the nitrogen-fixing Rhizobia seed treatment solutions (inoculants), and other biological seed and soil treatment solutions currently in the portfolio or pipeline of Rizobacter. The products in the agreement will be sold under the trademarks owned by Bioceres or its affiliates, or any other trademark approved by Bioceres.
Pro Farm’s biological solutions are not included within the scope of the current agreement. Bioceres retains global rights for use of products included in the agreement on HB4® crops and, in the United States, Syngenta rights will be non-exclusive for upstream applications.
The exclusive commercial collaboration is global, except for Argentina where both parties will continue to work under the existing framework. It has an effective date at the beginning of the 2023 calendar year, but implementation will be staggered. Bioceres will continue distributing its products in South Africa, Bolivia, Chile, Colombia, Paraguay and Uruguay during the year 2023. Thus, full implementation will be in 2024, subject to regulatory clearances.
The agreement establishes a joint R&D program to accelerate the development and registration of Bioceres’ pipeline products and new solutions for seed treatment, foliar and other applications, globally. Funding for R&D platform will be shared, with Syngenta contributing up to 70% of the investment.
In consideration for the rights granted under the agreements, Syngenta made an upfront payment of $50 million to Bioceres on October 6th, 2022. As of December 31, 2022, the upfront payment is reported as Deferred revenue and advances from customers. Additionally, for the duration of the agreement, Bioceres will receive 50% to 30% of the profits generated by sales conducted by Syngenta, depending on the geography and the year. The agreement sets global minimum targets for profits to be received by Bioceres, that amount to a total of $230 million for the life of the agreement. If Bioceres fails to receive the minimum profit targets set for any rolling calendar year period, it will have the option to terminate Syngenta’s exclusivity. Syngenta may opt to retain exclusivity by compensating the shortfall in cash or other economic consideration. Syngenta will cover all operating expenses incurred in connection with the marketing and sale in exclusive territory. Bioceres’ subsidiary Rizobacter will act as the exclusive supplier to Syngenta for products under the agreement.
The figures reported as current and non-current in Deferred revenue and advances from customers are based on our best estimation at the time these financial statements are authorized of issuance.
7. INFORMATION ABOUT COMPONENTS OF UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
7.1. Cash and cash equivalents
| 12/31/2022 |
| 06/30/2022 | |
Cash at bank and on hand | 68,550,022 | 32,912,886 | ||
Money market funds | — | 562,380 | ||
| 68,550,022 |
| 33,475,266 |
F-18
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
7.2. Other financial asset
| 12/31/2022 |
| 06/30/2022 | |
Current |
|
|
|
|
Restricted short-term deposits |
| 174,693 |
| 265,123 |
US Treasury bills | 11,160,527 | — | ||
Mutual funds | 6,438,416 | 2,913,519 | ||
Other investments |
| 1,108,752 |
| 2,222,491 |
| 18,882,388 |
| 5,401,133 | |
| 12/31/2022 |
| 06/30/2022 | |
Non-current |
|
|
|
|
Shares of Bioceres S.A. |
| 444,735 |
| 444,870 |
Other investments |
| 659,983 |
| 174,971 |
| 1,104,718 |
| 619,841 |
7.3. Trade receivables
| 12/31/2022 |
| 06/30/2022 | |
Current | ||||
Trade debtors | 176,943,073 | 111,950,965 | ||
Allowance for impairment of trade debtors |
| (6,525,744) |
| (7,142,252) |
Shareholders and other related parties (Note 16) |
| — |
| 640,258 |
Allowance for credit notes to be issued |
| (2,458,939) |
| (1,961,463) |
Trade debtors - Joint ventures and associates (Note 16) |
| 1,211,435 |
| 22,429 |
Deferred checks |
| 9,061,772 |
| 8,242,373 |
178,231,597 |
| 111,752,310 | ||
Non-current | ||||
Trade debtors | — | 200,412 | ||
| — | 200,412 |
F-19
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
7.4. Other receivables
| 12/31/2022 |
| 06/30/2022 | |
Current |
|
|
|
|
Taxes |
| 7,403,475 |
| 9,071,643 |
Receivables for PP&E sales | 978,869 | 1,734,281 | ||
Shareholders and other related parties (Note 16) |
| 2,093,157 |
| 1,182 |
Other receivables - Joint ventures and associates (Note 16) |
| 5,112,378 |
| 2,987,765 |
Prepayments to suppliers |
| 7,916,125 |
| 4,648,164 |
Reimbursements over exports |
| 10,552 |
| 10,549 |
Prepaid expenses and other receivables |
| 1,628,273 |
| 1,110 |
Loans receivables |
| 230,000 |
| 230,000 |
Miscellaneous |
| 280,969 |
| 642,890 |
| 25,653,798 |
| 19,327,584 | |
| 12/31/2022 |
| 06/30/2022 | |
Non-current |
|
| ||
Taxes |
| 775,183 |
| 218,159 |
Reimbursements over exports |
| 2,238,477 |
| 2,036,040 |
Miscellaneous |
| 159,601 |
| — |
| 3,173,261 |
| 2,254,199 |
7.5. Inventories
| 12/31/2022 |
| 06/30/2022 | |
Seeds |
| 737,129 |
| 1,183,915 |
Resale products |
| 60,243,488 |
| 35,080,737 |
Manufactured products |
| 25,807,803 |
| 21,725,042 |
Goods in transit |
| 588,201 |
| 4,340,232 |
Supplies |
| 22,273,707 |
| 17,534,434 |
Agricultural products |
| 50,103,153 |
| 47,284,512 |
Allowance for obsolescence |
| (2,105,898) |
| (1,104,750) |
157,647,583 | 126,044,122 | |||
Net of agricultural products |
| 107,544,430 |
| 78,759,610 |
7.6. Biological assets
Changes in biological assets
| Soybean |
| Corn |
| Wheat |
| Barley |
| Sunflower |
| Total | |
Beginning of the period | — | — | 44,413 | 12,900 | — | 57,313 | ||||||
Initial recognition and changes in the fair value of biological assets at the point of harvest |
| — |
| — |
| 191,481 |
| 159,996 |
| — |
| 351,477 |
Costs incurred during the period |
| 290,667 |
| 263,428 |
| 389,282 |
| 126,293 |
| 27,005 |
| 1,096,675 |
Decrease due to harvest/disposals |
| — |
| — |
| (625,176) |
| (299,189) |
| — |
| (924,365) |
Period ended December 31, 2022 |
| 290,667 |
| 263,428 |
| — |
| — |
| 27,005 |
| 581,100 |
F-20
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
| Soybean |
| Corn |
| Wheat |
| Barley |
| HB4 Soy |
| HB4 Wheat |
| Total | |
Beginning of the period |
| 54,162 | 27,646 | 22,311 | 3,071 | — | 2,208,648 | 2,315,838 | ||||||
Initial recognition and changes in the fair value of biological assets at the point of harvest |
| — |
| — |
| 292,692 |
| 141,899 |
| — |
| 1,708,237 |
| 2,142,828 |
Costs incurred during the period |
| 378,530 |
| 649,680 |
| 172,957 |
| 81,661 |
| 1,099,241 |
| 33,153,682 |
| 35,535,751 |
Exchange differences |
| 6,622 |
| 3,379 |
| 2,726 |
| 4,039 |
| — |
| 58,841 |
| 75,607 |
Decrease due to harvest |
| — |
| — |
| (490,686) |
| (230,670) |
| — |
| (31,205,748) |
| (31,927,104) |
Period ended December 31, 2021 |
| 439,314 |
| 680,705 |
| — |
| — |
| 1,099,241 |
| 5,923,660 |
| 8,142,920 |
7.7. Property, plant and equipment
Property, plant and equipment as of December 31, 2022 and June 30, 2022 included the following:
| 12/31/2022 |
| 06/30/2022 | |
Gross carrying amount |
| 88,295,296 |
| 71,521,454 |
Accumulated depreciation |
| (24,500,621) |
| (21,613,129) |
Net carrying amount |
| 63,794,675 |
| 49,908,325 |
Net carrying amount for each class of assets is as follows:
F-21
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
1. Gross carrying amount as of December 31, 2022 is as follows:
Gross carrying amount | ||||||||||||
As of the | ||||||||||||
beginning | Additions | Foreign | As of the | |||||||||
of the | from business | currency | end of the | |||||||||
Class |
| period |
| Additions |
| combination |
| Disposals |
| translation |
| period |
Office equipment | 908,004 | 305 | — | — | 724 | 909,033 | ||||||
Vehicles | 5,261,979 | 84,209 | — | (59,744) | (3,948) | 5,282,496 | ||||||
Equipment and computer software | 925,349 | 111,226 | 12,469 | — | (32,824) | 1,016,220 | ||||||
Fixtures and fittings | 7,606,389 | 34,256 | 5,379 | — | 12,143 | 7,658,167 | ||||||
Machinery and equipment |
| 13,017,830 | 1,128,712 |
| 7,047,496 |
| (7,186) |
| (14,677) |
| 21,172,175 | |
Land and buildings |
| 40,659,129 | — |
| 4,750,136 |
| — |
| (28,269) |
| 45,380,996 | |
Buildings in progress |
| 3,142,774 | 2,465,370 |
| 1,285,092 |
| — |
| (17,027) |
| 6,876,209 | |
Total |
| 71,521,454 | 3,824,078 |
| 13,100,572 |
| (66,930) |
| (83,878) |
| 88,295,296 | |
2. Accumulated depreciation as of December 31, 2022 is as follows
3. Gross carrying amount as of December 31, 2021, is as follows:
F-22
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
4. Accumulated depreciation as of December 31, 2021, is as follows:
Depreciation | ||||||||||||
Accumulated | ||||||||||||
as of the | Foreign | Accumulated | ||||||||||
beginning of | Of the | currency | as of the end | |||||||||
Class |
| the period |
| Disposals |
| period |
| translation |
| Revaluation |
| of period |
Office equipment | 473,905 | — | 23,583 | 51,063 | — | 548,551 | ||||||
Vehicles | 1,676,583 | (196,985) | 413,229 | 43,972 | — | 1,936,799 | ||||||
Equipment and computer software | 525,021 | (49,631) | 48,637 | 31,979 | — | 556,006 | ||||||
Fixtures and fittings |
| 2,670,512 | — | 327,792 | 315,287 | — | 3,313,591 | |||||
Machinery and equipment |
| 4,862,083 |
| (4,492) |
| 516,171 |
| 552,484 |
| — |
| 5,926,246 |
Land and buildings |
| 5,811,702 |
| — |
| 339,376 |
| 700,325 |
| (692,630) |
| 6,158,773 |
Total |
| 16,019,806 |
| (251,108) |
| 1,668,788 |
| 1,695,110 |
| (692,630) |
| 18,439,966 |
The depreciation charge is included in Notes 8.3 and 8.4
7.8. Intangible assets
Intangible assets as of December 31, 2022 and June 30, 2022 included the following:
| 12/31/2022 |
| 06/30/2022 | |
Gross carrying amount |
| 197,128,192 |
| 94,229,557 |
Accumulated amortization |
| (22,715,941) |
| (17,524,688) |
Net carrying amount |
| 174,412,251 |
| 76,704,869 |
Net carrying amount of each class of intangible assets is as follows:
F-23
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
1. Gross carrying amount as of December 31, 2022 is as follows:
Gross carrying amount | ||||||||||
As of the | Additions from | Foreign | As of the | |||||||
beginning of | business | currency | end of the | |||||||
Class |
| the period |
| Additions |
| combination |
| translation |
| period |
Seed and integrated products | ||||||||||
HB4 soy and breeding program | 31,371,088 | 1,738,631 | — | — | 33,109,719 | |||||
Integrated seed products | 3,181,155 | — | — | 8,296 | 3,189,451 | |||||
Crop nutrition |
| |||||||||
Microbiological products |
| 8,855,421 |
| 4,187,908 | 39,613,280 | (2,279) |
| 52,654,330 | ||
Other intangible assets |
|
| ||||||||
Trademarks and patents |
| 12,183,045 |
| 49,783 | 55,420,441 | — |
| 67,653,269 | ||
Software |
| 5,176,373 |
| 98,292 | — | (954) |
| 5,273,711 | ||
Customer loyalty |
| 28,462,475 |
| — | 1,785,237 | — |
| 30,247,712 | ||
RG/RS/OX Wheat | 5,000,000 | — | — | — | 5,000,000 | |||||
Total |
| 94,229,557 |
| 6,074,614 | 96,818,958 | 5,063 |
| 197,128,192 | ||
2. Accumulated amortization as of December 31, 2022 is as follows:
F-24
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
3. Gross carrying amount as of December 31, 2021 is as follows:
Gross carrying amount | ||||||||||
As of the | ||||||||||
beginning | Transfers / | Foreign currency | As of the end of | |||||||
Class |
| of the period |
| Additions | Disposals |
| translation |
| the period | |
Seed and integrated products |
|
|
|
|
|
| ||||
HB4 soy and breeding program |
| 27,611,142 | 1,840,320 | — | — | 29,451,462 | ||||
Integrated seed products | 2,558,220 | — | — | 290,765 | 2,848,985 | |||||
Crop nutrition |
|
|
| — | ||||||
Microbiological products |
| 6,037,680 | 584,924 | — | 648,526 | 7,271,130 | ||||
Other intangible assets |
|
|
| |||||||
Trademarks and patents |
| 9,824,171 |
| — | — | 1,129,486 |
| 10,953,657 | ||
Software |
| 3,784,593 |
| 346,268 | — | 508,279 |
| 4,639,140 | ||
Customer loyalty |
| 23,203,397 | — | — | 2,540,247 | 25,743,644 | ||||
RG/RS/OX Wheat | 5,000,000 | — | — | — | 5,000,000 | |||||
Total |
| 78,019,203 |
| 2,771,512 | — | 5,117,303 |
| 85,908,018 | ||
4. Accumulated amortization as of December 31, 2021 is as follows:
The amortization charge is included in Notes 8.3 and 8.4.
7.9. Goodwill
Carrying amount of goodwill as of December 31, 2022 and June 30, 2022 is as follows:
There were no indicators of goodwill impairment.
F-25
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
7.10. Trade and other payables
| 12/31/2022 |
| 06/30/2022 | |
Trade creditors |
| 114,286,611 |
| 94,653,017 |
Shareholders and other related parties (Note 16) |
| 56,732 |
| 44,579 |
Trade creditors - Parent company (Note 16) |
| 88,739 |
| 670,730 |
Trade creditors - Joint ventures and associates (Note 16) |
| 46,901,927 |
| 29,082,325 |
Taxes |
| 2,322,285 |
| 1,265,771 |
Miscellaneous |
| 1,440,273 |
| 133,198 |
| 165,096,567 |
| 125,849,620 |
7.11. Borrowing
| 12/31/2022 |
| 06/30/2022 | |
Current | ||||
Bank borrowings |
| 63,502,859 |
| 48,305,535 |
Corporate bonds |
| 29,861,413 |
| 12,845,934 |
Trust debt securities | 8,563,045 | 6,492,733 | ||
Net loans payables- Parents companies and related parties to Parent (Note 16) |
| 3,535,306 |
| 3,657,266 |
|
| 105,462,623 |
| 71,301,468 |
Non-current |
|
| ||
Bank borrowings |
| 28,963,786 |
| 9,912,901 |
Corporate bonds |
| 44,240,319 |
| 61,264,268 |
Net loans payables- Parent companies and related parties to Parent (Note 16) |
| 3,000,000 |
| 3,000,000 |
Trust debt securities | 2,905,014 | — | ||
79,109,119 | 74,177,169 |
The carrying value of some borrowings as of December 31, 2022 measured at amortized cost differs from the fair value of these borrowings. The following measures of fair values are based on discounted cash flows (Level 2), due to the use of unobservable inputs, including own credit risk.
7.12. Secured Notes
Secured Guaranteed Notes
On August 5, 2022 the 25% of the outstanding capital of the convertible note that we had issued in 2020 and which the 75% was already converted into shares on March 16, 2022, were converted into 1.5 million shares. Bioceres has repurchased such shares for $24 million issuing the “The Secured Guaranteed Notes”.
F-26
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
The Secured Guaranteed Notes due 2026 mature 48 months after the issue date and bear interest at 9.0% from the issue date through 24 months after the issue date, 13.0% from 25 through 36 months after the issue date and 14.0% from 37 through 48 months after the issue date. Interest is payable semi-annually. The Secured Guaranteed Notes due 2026 have no conversion rights into our ordinary shares.
The carrying value of the Secured Guaranteed Notes as of December 31, 2022 measured at amortized cost does not differ significantly from their fair value.
Secured Convertible Guaranteed Notes
On August 8, 2022, we issued the Secured Guaranteed Convertible Notes for a total principal amount of $55 million. The notes have a 4- year maturity and accrue interest at an annual interest rate of 9%, of which 5% is payable in cash and 4% in-kind. At any time up to maturity the note holders might opt to convert the outstanding principal amount into common shares of Bioceres at a strike price of $18 per share. The Company can repurchase the notes voluntarily 30 months after the issue date.
At inception, the fair value of the liability component of the Secured Convertible Guaranteed Notes was measured using a discount rate of 13.57%.
The carrying value of Secured Convertible Guaranteed Notes as of December 31, 2022 measured at amortized cost does not differ significantly from their fair value.
Under the terms of the Secured Convertible Guaranteed Notes, the Group is in compliance with covenants.
The Secured Guaranteed Notes and the Secured Convertibles Guaranteed Notes are secured by substantially all of the assets located in the United States of Pro Farm Group, Inc. and its U.S. subsidiaries and are guaranteed by BCS Holding Inc., Bioceres Crops do Brasil Ltda., Bioceres Crops S.A., Bioceres Semillas S.A.U., Verdeca LLC, Rasa Holding LLC, Rizobacter Argentina S.A., Rizobacter del Paraguay S.A., Rizobacter do Brasil Ltda., Rizobacter South Africa, Rizobacter Uruguay, Rizobacter USA, LLC, Pro Farm Group, Inc., Pro Farm Michigan Manufacturing LLC, Pro Farm, Inc., Pro Farm Technologies Comércio de Insumo Agrícolas do Brasil Ltda., Glinatur S.A. and Pro Farm OU.
7.13. Employee benefits and social security
| 12/31/2022 |
| 06/30/2022 | |
Current | ||||
Salaries, accrued incentives, vacations and social security |
| 9,531,717 |
| 7,337,774 |
Key management personnel (Note 17) | 335,916 | 281,347 | ||
9,867,633 | 7,619,121 |
7.14. Deferred revenue and advances from customers
| 12/31/2022 |
| 06/30/2022 | |
Current |
|
|
|
|
Advances from customers |
| 11,233,268 |
| 5,895,313 |
Deferred Revenue (Note 6) |
| 32,903,458 |
| — |
| 44,136,726 |
| 5,895,313 | |
Non-current |
|
|
|
|
Deferred Revenue (Note 6) |
| 17,096,542 |
| — |
| 17,096,542 |
| — |
F-27
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
8. INFORMATION ABOUT COMPONENTS OF UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
8.1. Revenues from contracts with customers
| 12/31/2022 |
| 12/31/2021 | |
Sale of goods and services |
| 220,482,895 |
| 157,538,626 |
Royalties |
| 909,067 |
| 1,129,024 |
| 221,391,962 |
| 158,667,650 |
Transactions of sales of goods and services with joint ventures, shareholders and other related parties are reported in Note 16.
8.2. Cost of sales
Item |
| 12/31/2022 |
| 12/31/2021 |
Inventories as of the beginning of the period |
| 78,759,610 |
| 39,052,925 |
Business combination |
| 11,064,908 |
| — |
Purchases of the period |
| 138,186,645 |
| 102,342,174 |
Production costs |
| 14,596,888 |
| 7,581,570 |
Foreign currency translation |
| (246,484) |
| 516,306 |
Subtotal |
| 242,361,567 |
| 149,492,975 |
Inventories as of the end of the period (*) |
| (107,544,430) |
| (56,277,533) |
Cost of sales | 134,817,137 | 93,215,442 |
(*) Net of agricultural products.
F-28
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
8.3. R&D classified by nature
| Research and |
| Research and | |
development | development | |||
| expenses |
| expenses | |
Item |
| 12/31/2022 |
| 12/31/2021 |
Amortization of intangible assets |
| 2,201,938 |
| 604,462 |
Analysis and storage | 27,322 | — | ||
Import and export expenses |
| 850 |
| 1,685 |
Depreciation of property, plant and equipment |
| 287,180 |
| 213,837 |
Freight and haulage | 4,732 | — | ||
Employee benefits and social securities |
| 2,248,105 |
| 685,412 |
Maintenance |
| 303,524 |
| 25,702 |
Energy and fuel |
| 94,870 |
| 24,659 |
Supplies and materials |
| 1,078,197 |
| 726,899 |
Mobility and travel |
| 158,193 |
| 38,564 |
Publicity and advertising | 9,568 | — | ||
Share-based incentives |
| 92,477 |
| 30,099 |
Professional fees and outsourced services |
| 574,614 |
| 137,674 |
Professional fees related parties | 102,701 | 296,967 | ||
Office supplies |
| 43,546 |
| 2,842 |
Information technology expenses | 19,060 | 6,039 | ||
Insurance |
| 25,738 |
| 12,598 |
Depreciation of leased assets | 33,685 | 2,523 | ||
Miscellaneous |
| 3,606 |
| 5,612 |
Total |
| 7,309,906 |
| 2,815,574 |
| 12/31/2022 |
| 12/31/2021 | |
R&D capitalized (Note 7.8) |
| 5,926,539 |
| 2,425,244 |
R&D profit and loss |
| 7,309,906 |
| 2,815,574 |
Total |
| 13,236,445 |
| 5,240,818 |
F-29
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
8.4. Expenses classified by nature and function
|
| Selling, |
| |||
| general and | |||||
Production | administrative | Total | ||||
Item | costs | expenses | 12/31/2022 | |||
Amortization of intangible assets |
| 86,842 | 2,902,741 | 2,989,583 | ||
Analysis and storage |
| 4,460 | 237,341 | 241,801 | ||
Commissions and royalties |
| 109,703 | 1,020,272 | 1,129,975 | ||
Import and export expenses |
| 265,121 | 704,937 | 970,058 | ||
Depreciation of property, plant and equipment |
| 1,666,119 | 1,006,857 | 2,672,976 | ||
Depreciation of leased assets | 230,478 | 1,573,369 | 1,803,847 | |||
Impairment of receivables |
| — | 468,992 | 468,992 | ||
Freight and haulage |
| 1,201,183 | 5,002,384 | 6,203,567 | ||
Employee benefits and social securities |
| 7,177,926 | 20,156,371 | 27,334,297 | ||
Maintenance |
| 722,399 | 1,446,553 | 2,168,952 | ||
Energy and fuel |
| 753,041 | 161,850 | 914,891 | ||
Supplies and materials |
| 512,493 | 627,514 | 1,140,007 | ||
Mobility and travel |
| 39,428 | 1,837,797 | 1,877,225 | ||
Publicity and advertising |
| — | 3,235,737 | 3,235,737 | ||
Contingencies |
| — | 39,847 | 39,847 | ||
Share-based incentives | — | 1,969,868 | 1,969,868 | |||
Professional fees and outsourced services |
| 1,133,009 | 7,122,701 | 8,255,710 | ||
Professional fees related parties |
| — | 29,818 | 29,818 | ||
Office supplies and registrations fees |
| 23,309 | 624,246 | 647,555 | ||
Insurance |
| 74,350 | 1,306,282 | 1,380,632 | ||
Information technology expenses |
| 17,511 | 1,566,952 | 1,584,463 | ||
Obsolescence |
| 481,332 | — | 481,332 | ||
Taxes |
| 96,233 | 6,976,043 | 7,072,276 | ||
Miscellaneous |
| 1,951 | 300,016 | 301,967 | ||
Total |
| 14,596,888 | 60,318,488 | 74,915,376 |
F-30
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
|
| Selling, |
| |||
general and | ||||||
Production | administrative | Total | ||||
Item | costs | expenses | 12/31/2021 | |||
Amortization of intangible assets |
| — | 771,536 | 771,536 | ||
Analysis and storage |
| 26,537 | 69,502 | 96,039 | ||
Commissions and royalties |
| 547,364 | 1,181,465 | 1,728,829 | ||
Import and export expenses |
| 61,209 | 560,934 | 622,143 | ||
Depreciation of property, plant and equipment |
| 655,067 | 799,884 | 1,454,951 | ||
Depreciation of leased assets | 246,942 | 251,767 | 498,709 | |||
Impairment of receivables |
| — | 815,929 | 815,929 | ||
Freight and haulage |
| 311,416 | 4,457,096 | 4,768,512 | ||
Employee benefits and social securities |
| 3,265,750 | 11,033,554 | 14,299,304 | ||
Maintenance |
| 400,778 | 570,294 | 971,072 | ||
Energy and fuel |
| 233,958 | 24,908 | 258,866 | ||
Supplies and materials |
| 351,410 | 570,762 | 922,172 | ||
Mobility and travel |
| 7,361 | 696,370 | 703,731 | ||
Publicity and advertising |
| — | 2,247,729 | 2,247,729 | ||
Contingencies |
| — | 65,598 | 65,598 | ||
Share-based incentives | — | 843,308 | 843,308 | |||
Professional fees and outsourced services |
| 587,370 | 3,075,667 | 3,663,037 | ||
Professional fees related parties |
| — | 48,934 | 48,934 | ||
Office supplies |
| 89,670 | 198,228 | 287,898 | ||
Insurance |
| 36,328 | 556,441 | 592,769 | ||
Information technology expenses |
| — | 817,032 | 817,032 | ||
Obsolescence |
| 740,264 | — | 740,264 | ||
Taxes |
| 19,398 | 5,230,416 | 5,249,814 | ||
Miscellaneous |
| 748 | 110,407 | 111,155 | ||
Total |
| 7,581,570 | 34,997,761 | 42,579,331 |
8.5. Other income or expenses, net
| 12/31/2022 |
| 12/31/2021 | |
Net result from commercialization of agricultural products |
| 144,515 |
| (2,733,693) |
Expenses recovery |
| 232,977 |
| 164,445 |
Other income or expenses, net |
| 391,036 |
| 851,266 |
| 768,528 |
| (1,717,982) |
F-31
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
8.6. Net financial cost
| 12/31/2022 |
| 12/31/2021 | |
Financial costs | ||||
Interest expenses with the Parents (Note 16) |
| (299,468) |
| (415,812) |
Interest expenses |
| (10,722,135) |
| (5,439,593) |
Financial commissions |
| (1,517,729) |
| (907,660) |
| (12,539,332) |
| (6,763,065) | |
Other financial results |
| |||
Exchange differences generated by assets |
| (12,771,727) |
| 6,355,520 |
Exchange differences generated by liabilities | 9,070,404 | (11,682,895) | ||
Changes in fair value of financial assets or liabilities and other financial results | (2,068,923) | (1,652,984) | ||
Net gain of inflation effect on monetary items | 281,083 | 342,135 | ||
(5,489,163) | (6,638,224) | |||
Total net financial cost |
| (18,028,495) |
| (13,401,289) |
9. TAXATION
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
| 12/31/2022 |
| 12/31/2021 | |
Current tax expense |
| (6,467,324) |
| (11,916,178) |
Deferred tax |
| 769,775 |
| 5,179,763 |
Total | (5,697,549) | (6,736,415) |
| 12/31/2022 |
| 12/31/2021 | |
Beginning of the period deferred tax |
| (24,994,569) |
| (22,421,125) |
Additions for business combination | (16,704,771) | — | ||
Charge for the period |
| 769,775 |
| 5,179,763 |
Charge to OCI | — | 1,326,453 | ||
Conversion difference | (582,016) | (2,993,421) | ||
Total net deferred tax |
| (41,511,581) |
| (18,908,330) |
F-32
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:
| 12/31/2022 |
| 12/31/2021 | |
Earnings before income tax-rate |
| 1,183,270 |
| 14,340,137 |
Income tax expense by applying tax rate in force in the respective countries |
| (5,182,386) |
| (7,314,555) |
Share of profit or loss of subsidiaries, joint ventures and associates |
| 225,376 |
| 269,138 |
Stock options charge |
| (298,851) |
| (180,523) |
Non-deductible expenses |
| (543,505) |
| (318,280) |
Untaxed gains | 33,052 | — | ||
Unrecognized tax losses carry-forwards 1 | (995,754) | — | ||
Foreign investment coverage |
| — |
| 140,720 |
Tax inflation adjustment | 3,132,901 | 1,097,315 | ||
Result of inflation effect on monetary items and other finance results | (1,660,369) | (479,093) | ||
Others |
| (408,013) |
| 48,863 |
Income tax expenses |
| (5,697,549) |
| (6,736,415) |
1- Corresponds mainly to Pro Farm Group Inc.
10. EARNINGS PER SHARE (EPS)
The numerators and denominators used in the calculation of basic EPS and diluted EPS are presented below:
Three -month period ended | Six -month period ended | |||||||
| 12/31/2022 |
| 12/31/2021 |
| 12/31/2022 |
| 12/31/2021 | |
Numerator |
|
|
| |||||
(Loss) profit for the period (basic EPS) |
| (8,156,746) | 3,427,093 | (7,658,449) |
| 4,301,230 | ||
(Loss) profit for the period (diluted EPS) |
| (8,156,746) | 3,427,093 | (7,658,449) |
| 4,301,230 | ||
Denominator |
|
| ||||||
Weighted average number of shares (basic EPS) |
| 61,657,343 | 41,104,331 | 61,657,343 |
| 41,104,331 | ||
Weighted average number of shares (diluted EPS) |
| 61,657,343 | 42,403,196 | 61,657,343 |
| 42,403,196 | ||
Basic loss (Profit) attributable to ordinary equity holders of the parent | (0.1323) | 0.0834 | (0.1242) | 0.1046 | ||||
Diluted (loss) profit attributable to ordinary equity holders of the parent |
| (0.1323) | 0.0808 | (0.1242) |
| 0.1014 | ||
For the three and six-month period ended December 31, 2022 diluted EPS was equal to basic EPS as the effect of potential ordinary shares would be antidilutive.
For the three and six-month period ended December 31, 2021, diluted earnings per share was calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential shares. The Group had two categories of dilutive potential shares, share-based incentives and Convertible notes.
The stock options were included in the diluted EPS calculation for the period ended December 31, 2021 only for the tranches in which the average market price of ordinary shares during the periods was higher than the assumed proceeds per option.
Convertible notes outstanding were not included in the diluted EPS calculations for the period ended December 31, 2021 because its interest (net of tax and other changes in income or expense) per ordinary share obtainable on conversion exceeds basic earnings per share.
F-33
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
11. INFORMATION ABOUT UNAUDITED INTERIM CONDENSED CONSOLIDATED COMPONENTS OF EQUITY
In consideration of payment of Pro Farm Merger, we have issued 16.4 million shares. See Note 6.
See Note 7.12 in reference to the issuance of 1.5 million shares in connection with the conversion of the convertible note that we had issued in 2020.
The Secured Convertibles Guaranteed Notes mentioned in Note 7.12 were classified as compound instruments, a non-derivative financial instrument that contains both a liability and an equity component. The equity consideration was included in the “Convertible instruments” column.
As of December 31, 2022, we had (i) 100,000,000 ordinary shares ($0.0001 par value) authorized, (ii) 63,329,098 ordinary shares issued and , (iii) 1,000,000 preferred shares ($0.0001 par value) authorized, (iv) no preferred shares issued and , (v) 2,478,123 ordinary shares reserved for our equity compensation plans. Of the total issued shares, we have repurchased 2,144,596 shares of our own.
Holders of the ordinary shares are entitled to one vote for each ordinary share.
12. CASH FLOW INFORMATION
Significant non-cash transactions related to investment and financing activities are as follows:
| 12/31/2022 |
| 12/31/2021 | |
Investment activities | ||||
Net assets acquisition by business combination (Note 6) | 152,070,313 | — | ||
Investment in-kind in other related parties (Note 16) | 1,434,802 | 437,780 | ||
153,505,115 | 437,780 | |||
12/31/2022 |
| 12/31/2021 | ||
Financing activities |
|
|
|
|
Capitalization of convertible notes (Note 7.12) | 12,211,638 | — | ||
Purchase of own shares (Note 7.12) | (23,915,029) | — | ||
Acquisition of non-controlling interest in subsidiaries |
| — |
| 255,893 |
| (11,703,391) |
| 255,893 |
13. JOINT VENTURES AND ASSOCIATES
| 12/31/2022 |
| 06/30/2022 | |
Assets |
|
|
|
|
Synertech Industrias S.A. |
| 35,995,752 |
| 35,646,740 |
Indrasa Biotecnología S.A. |
| — |
| 70,466 |
Alfalfa Technologies S.R.L. |
| 52,881 |
| 74,827 |
Moolec Science Limited | — | 2,759,059 | ||
Moolec Science S.A. |
| 2,762,059 |
| 3,000 |
| 38,810,692 |
| 38,554,092 |
F-34
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
On December 28, 2022, Bioceres has contributed all of its ownership in Moolec Sciente Limited to Moolec Science S.A. (“Moolec Science”) in exchange of 1,560,000 ordinary shares. Our total ownership in Moolec Science as of December 31, 2022 reached 1,860,000 ordinary shares.
| 12/31/2022 |
| 06/30/2022 | |
Liabilities |
|
|
|
|
Trigall Genetics S.A. |
| 122,059 |
| 717,948 |
| 122,059 |
| 717,948 |
Share of profit or loss of joint ventures and associates:
| 12/31/2022 |
| 12/31/2021 | |
Trigall Genetics S.A. |
| 595,889 |
| 662,077 |
Synertech Industrias S.A. | 349,012 | 319,356 | ||
Moolec Science Limited |
| — |
| (114,709) |
Indrasa Biotecnología S.A. | (62,613) | 52,363 | ||
882,288 | 919,087 |
Changes in joint ventures investments
| 12/31/2022 |
| 12/31/2021 | |
As of the beginning of the period |
| 37,836,144 |
| 29,378,923 |
Revaluation of property, plant and equipment |
| — |
| (363,848) |
Loss of participation Indrasa Biotecnología S.A. | (7,853) | — | ||
Foreign currency translation |
| (21,946) |
| 3,504,622 |
Share of profit or loss |
| 882,288 |
| 919,087 |
As of the end of the period |
| 38,688,633 |
| 33,438,784 |
14. SEGMENT INFORMATION
The following tables present information with respect to the Group´s reporting segments:
| Seed and |
|
|
|
| ||||
| integrated |
| Crop |
| Crop | ||||
Period ended December 31, 2022 |
| products | protection | nutrition | Consolidated | ||||
Revenues from contracts with customers | |||||||||
Sale of goods and services |
| 29,226,197 |
| 116,263,527 |
| 74,993,171 |
| 220,482,895 | |
Royalties |
| 909,067 |
| — |
| — |
| 909,067 | |
Others | |||||||||
Initial recognition and changes in the fair value of biological assets at the point of harvest |
| 56,530 |
| 140,620 |
| 154,327 |
| 351,477 | |
Changes in the net realizable value of agricultural products after harvest | (279,365) | (694,929) | (762,665) | (1,736,959) | |||||
Total |
| 29,912,429 |
| 115,709,218 |
| 74,384,833 |
| 220,006,480 | |
Cost of sales |
| (13,606,348) |
| (79,703,474) |
| (41,507,315) |
| (134,817,137) | |
Gross profit per segment |
| 16,306,081 | 36,005,744 |
| 32,877,518 |
| 85,189,343 | ||
% Gross margin | 55 | % | 31 | % | 44 | % | 39 | % |
F-35
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
| Seed and |
|
|
|
| ||||
| integrated |
| Crop |
| Crop | ||||
Period ended December 31, 2021 |
| products | protection | nutrition | Consolidated | ||||
Revenues from contracts with customers | |||||||||
Sale of goods and services |
| 23,767,633 |
| 82,062,604 |
| 51,708,389 |
| 157,538,626 | |
Royalties |
| 1,129,024 |
|
|
| 1,129,024 | |||
Others |
| ||||||||
Government grants |
| 805 | — | — | 805 | ||||
Initial recognition and changes in the fair value of biological assets | 1,033,753 |
| 845,387 |
| 263,688 |
| 2,142,828 | ||
Changes in the net realizable value of agricultural products after harvest | (821,078) | (304,522) | (116,585) | (1,242,185) | |||||
Total |
| 25,110,137 |
| 82,603,469 |
| 51,855,492 |
| 159,569,098 | |
Cost of sales |
| (8,988,420) |
| (57,480,257) |
| (26,746,765) |
| (93,215,442) | |
Gross profit per segment |
| 16,121,717 |
| 25,123,212 |
| 25,108,727 |
| 66,353,656 | |
% Gross margin | 64 | % | 30 | % | 48 | % | 42 | % |
15. FINANCIAL INSTRUMENTS – RISK MANAGEMENT
The following tables show additional information required under IFRS 7 for financial assets and liabilities recorded as of December 31, 2022 and June 30, 2022.
(*) Advances expenses and tax balances are not included.
Mandatorily measured at fair | ||||||||
Amortized cost | value through profit or loss | |||||||
Financial liability |
| 12/31/2022 |
| 06/30/2022 |
| 12/31/2022 |
| 06/30/2022 |
Trade and other payables |
| 163,585,203 |
| 125,849,620 |
| — |
| — |
Borrowings |
| 184,571,742 | 145,478,637 |
| — |
| — | |
Secured notes | 72,558,213 | 12,559,071 | — | — | ||||
Lease liability | 13,888,601 | 11,751,284 | — | — | ||||
Consideration for acquisition of assets |
| 10,410,644 |
| 12,902,790 |
| — |
| — |
Total |
| 445,014,403 |
| 308,541,402 |
| — |
| — |
F-36
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Financial instruments measured at fair value
Measurement at fair value at 12/31/2022 |
| Level 1 |
| Level 2 |
| Level 3 |
Financial assets at fair value | ||||||
US Treasury bills | 11,160,527 | — | — | |||
Mutual funds | 6,438,416 | — | — | |||
Other investments |
| 1,108,752 |
| — |
| — |
Measurement at fair value at 06/30/2022 |
| Level 1 |
| Level 2 |
| Level 3 |
Financial assets at fair value | ||||||
Money market funds | 562,380 | — | — | |||
Mutual funds | 2,913,519 | — | — | |||
Other investments | 1,490,086 | 732,405 | — |
Estimation of fair value
The fair value of mutual funds and other investments is calculated using the market approach, which use quoted prices in active markets for identical assets. The quoted marked price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
The Group’s financial liabilities and other investments, which were not traded in an active market, were determined using valuation techniques that maximize the use of available market information, and thus rely as little as possible on specific estimates. If all significant inputs required to fair value an instrument are observable, the instruments are included in level 2.
If one or more of the significant inputs is not based on observable market data, the instruments are included in Level 3.
The Group’s policy is to recognize transfers between different categories of the fair value hierarchy at the time they occur or when there are changes in the circumstances that cause the transfer.
There were no transfers between levels of the fair value hierarchy. There were no changes in economic or business circumstances affecting fair value.
Financial instruments not measured at fair value
The financial instruments not measured at fair value include cash and cash equivalents, trade accounts receivable, other accounts receivable, trade payables and other debts, borrowings, financed payments and convertible notes.
The carrying value of financial instruments not measured at fair value does not differ significantly from their fair value, except for borrowings (Note 7.11).
Management estimates that the carrying value of the financial instruments measured at amortized cost approximates their fair value.
Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rate. Currency on foreign exchange risk arises when the Group enters into transactions denominated in a currency other than its functional currency.
F-37
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
The table below sets forth our net exposure to currency risk as of December 31, 2022.
Net foreign currency position |
| 12/31/2022 |
Amount expressed in US$ |
| (2,345,363) |
The main Argentinian subsidiaries of the Group have changed their functional currency from Argentine Pesos to US Dollar (See note 2).
Considering only this net currency exposure as of December 31, 2022 if an US Dollar revaluation or depreciation in relation to other foreign currencies with the remaining variables remaining constant, would have a positive or a negative impact on comprehensive income as a result of foreign exchange gains or losses. We estimate that a devaluation or an appreciation of the US Dollar other currencies of 10% during the period ended December 31, 2022 would have resulted in a net pre-tax loss or gain of approximately $0.2 million.
16. SHAREHOLDERS AND OTHER RELATED PARTIES BALANCES AND TRANSACTIONS
During the periods ended December 31, 2022 and 2021, the transactions between the Group and related parties, and the related balances owed by and to them, are as follows:
The increase in sales and purchases with joint ventures compared to the same period of the previous year is due to an incremental sale of micro-beaded fertilizers due to more competitive prices compared to competing commodity fertilizers.
Amounts receivable from related parties | ||||||
Party |
| Transaction type |
| 12/31/2022 |
| 06/30/2022 |
Shareholders and other related parties |
| Trade debtors |
| — |
| 640,258 |
Shareholders and other related parties |
| Other receivables |
| 2,093,157 |
| 1,182 |
Joint ventures and associates |
| Trade debtors |
| 1,211,435 |
| 22,429 |
Joint ventures and associates |
| Other receivables |
| 5,112,378 |
| 2,987,765 |
Total |
| 8,416,970 |
| 3,651,634 | ||
Amounts payable to related parties | ||||||
Party |
| Transaction type |
| 12/31/2022 |
| 06/30/2022 |
Parent company and related parties to Parent | Trade creditors | (88,739) | (670,730) | |||
Parent company and related parties to Parent | Net loans payables | (6,535,306) | (6,657,266) | |||
Key management personnel |
| Salaries, social security benefits and other benefits |
| (335,916) |
| (281,347) |
Shareholders and other related parties |
| Trade and other payables |
| (56,732) |
| (44,579) |
Joint ventures and associates |
| Trade creditors |
| (46,901,927) |
| (29,082,325) |
Total |
|
| (53,918,620) |
| (36,736,247) | |
F-38
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
17. KEY MANAGEMENT PERSONNEL COMPENSATION
The compensation of directors and other key management members, including social security contributions and other benefits, was as follows for the period ended December 31, 2022 and 2021.
| 12/31/2022 |
| 12/31/2021 | |
Salaries, social security and other benefits |
| 1,201,651 |
| 803,905 |
Share-based incentives | 2,062,345 | 873,407 | ||
Total |
| 3,263,996 |
| 1,677,312 |
18. SHARE-BASED PAYMENTS
As part of the merger described in Note 6, we have assumed the outstanding “2013 Stock Incentive Plan” from Pro Farm Group. On the merger date the total equity awards outstanding was converted consistent with the terms of the merger agreement into an aggregate of 1,191,362 option and or restricted stock units which was fully registered with the Securities and Exchange Commission on July 26, 2022. All equity awards retained their original granted terms. The company has not granted any additional awards under this plan during the period.
Stock Options
The total converted options outstanding on the date of the merger was 1,046,776. The estimated fair value of options on the merger date was $0.5 million. The Company’s fair value of the grants was estimated utilizing a Black Scholes option pricing model based on the following range of assumptions which have determined consistent with the Company’s historical methodology for such assumptions:
| July 12, 2022 |
| ||
Exercise price | $ | 7.16 - 204.66 | ||
Expected life (years) |
| 0.03 - 9.83 | ||
Estimated volatility factor |
| 34.9% - 44.4% | ||
Risk-free interest rate |
| 0.0% | ||
Expected dividend yield |
| — | ||
Annual compensation - Bonus
Bonus in Cash is an annual cash incentive awarded up to an amount that is five times the individual’s monthly salary, which can be increased by $30,000 in value if the recipient decides to receive the base bonus in ordinary shares, to each of the Chief Operating Officer, Sales Director and Marketing Director and Managing Director of Rizobacter. The bonus will be granted upon the meeting by the Company of certain financial and operational objectives. Each year the Board of Directors defines the objectives upon approval of the annual budget.
As well as fiscal year ended June 30, 2021, for the Bonus in Cash 2022, all the beneficiaries decided to receive the bonus in ordinary shares.
F-39
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Bonus in Kind is an annual in-kind incentive awarded in ordinary shares up to an equivalent of $378,000 and $318,000 to the Chief Executive Officer and Chief Financial Officer, respectively, to tie a portion of their compensation to financial and operational objectives. Each year the Board of Directors will define the objectives upon approval of the annual budget. The charge for the six-month period ended December 31, 2022 in consideration of the annual compensation bonus for objectives achieved in the year ended June 30, 2022 amounted to $0.5 million.The number of shares that can be awarded under each bonus will be determined by using a 20-day volume weighted average price (“VWAP”) of the Company’s ordinary shares, starting with the day on which the relevant financial and operational objectives are met by the Company and the bonus is granted. 50% of bonus vests if the financial and operational objectives are achieved as of such date, and the remaining 50% vests in the subsequent -months, upon meeting of the financial and operational objectives.
The charge for the six-month period ended December 31, 2022 in consideration of the annual compensation bonus for objectives achieved in the year ended June 30, 2022 amounted to $0.9 million.
19. LEASE
Right-of-use leased asset |
| 12/31/2022 |
| 06/30/2022 |
Book value at the beginning of the period/year |
| 15,828,032 |
| 3,688,150 |
Additions of the period/year |
| 154,225 |
| 10,429,919 |
Additions from business combination | 3,005,000 | — | ||
Disposals | (646,386) | — | ||
Exchange differences | 287,852 | 1,709,963 | ||
Book value at the end of the period/year |
| 18,628,723 |
| 15,828,032 |
Depreciation |
| 12/31/2022 |
| 06/30/2022 |
Book value at the beginning of the period/year | 3,684,006 | 2,360,490 | ||
Depreciation of the period/year | 1,837,532 | 1,257,538 | ||
Disposals |
| (117,387) |
| — |
Exchange differences |
| 59,578 |
| 65,978 |
Accumulated depreciation at the end of the period/year |
| 5,463,729 |
| 3,684,006 |
Total |
| 13,164,994 |
| 12,144,026 |
Lease liability |
| 12/31/2022 |
| 06/30/2022 |
Book value at the beginning of the period/year |
| 11,751,284 |
| 1,140,717 |
Additions of the period/year |
| 398,658 |
| 9,937,271 |
Additions from business combination | 3,245,812 | — | ||
Interest expenses, exchange differences and inflation effects |
| 46,805 |
| 1,708,060 |
Payments of the period/year |
| (1,553,958) |
| (1,034,764) |
Total |
| 13,888,601 |
| 11,751,284 |
Lease Liabilities |
| 12/31/2022 |
| 06/30/2022 |
Non-current |
| 10,880,795 |
| 10,338,380 |
Current |
| 3,007,806 |
| 1,412,904 |
Total |
| 13,888,601 |
| 11,751,284 |
F-40
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
The recognized right-of-use assets relate to the following types of assets:
| 12/31/2022 |
| 06/30/2022 | |
Machinery and equipment |
| 3,304,776 |
| 828,977 |
Vehicles |
| 1,093,758 |
| 1,115,087 |
Equipment and computer software |
| 891,294 |
| 742,382 |
Land and buildings |
| 13,338,895 |
| 13,141,586 |
| 18,628,723 |
| 15,828,032 |
The incremental borrowing rate used was 2.14%.
20. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS
There were no other significant changes to the contingencies, commitments and restrictions on the distribution of profits from the disclosure made in the Consolidated financial statement as of June 30, 2022 that were not mentioned above.
21. EVENTS OCCURRING AFTER THE REPORTING PERIOD
On February 7, 2023, the company completed a $26.6 million public offering of Series VIII corporate bonds in the Argentine market. The bonds mature in February 2025 and February 2026 and pay an annual nominal interest rate of 1.5% and 3.9% correspondingly. Proceeds will be used in full to extend the maturity of short-term debt.
Subsequent to December 31, 2022, there have been no other situations or circumstances that may require significant adjustments or further disclosure in these unaudited interim condensed consolidated financial statements that were not mentioned above.
F-41