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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(CHECK ONE): /X/Form 10-K / /Form 20-F / /Form 11-K / /Form 10-Q / /Form N-SAR
For Period Ended: December 31, 1998
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/ / Transition Report on Form 10-K
/ / Transition Report on Form 20-F
/ / Transition Report on Form 11-K
/ / Transition Report on Form 10-Q
/ / Transition Report on Form N-SAR
For the Transition Period Ended:
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READ INSTRUCTION (ON BACK PAGE) BEFORE PREPARING FORM. PLEASE PRINT OR TYPE.
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
ECO SOIL SYSTEMS, INC.
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Full Name of Registrant
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Former Name if Applicable
10740 THORNMINT ROAD, SUITE 200
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Address of Principal Executive Office (Street and Number)
SAN DIEGO, CA 92127
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City, State and Zip Code
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
(b) The subject annual report, semi-annual report, transition report
on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion thereof,
/X/ will be filed on or before the fifteenth calendar day following
the prescribed due date; or the subject quarterly report of
transition report on Form 10-Q, or portion thereof will be filed
on or before the fifth calendar day following the prescribed due
date; and
(c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, or the transition report or portion thereof, could not be filed within
the prescribed time period.
The Annual Report on Form 10-K of Eco Soil Systems, Inc. (the "Company")
could not be filed within the prescribed time period because the Company
recently hired a new Chief Financial Officer ("CFO"). The press release
attached hereto as Exhibit A describes the resignation of the Company's
former CFO and appointment of the Company's new CFO. Although the Company's
former CFO has agreed to assist in the year-end audit process and the
preparation of the Company's Form 10-K, the transition within the Company's
finance and accounting department has diverted management's attention and
caused unforeseen delay. As a result, the Company has been unable to obtain,
without unreasonable effort or expense, all the information necessary to file
within the prescribed time period.
(ATTACH EXTRA SHEETS IF NEEDED)
SEC 1344 (6/94)
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PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
William B. Adams (619) 675-1660
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company
Act of 1940 during the preceding 12 months or for such shorter period
that the registrant was required to file such report(s) been filed? If
answer is no, identify report(s). /X/ Yes / / No
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(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected
by the earnings statements to be included in the subject report or
portion thereof? /X/ Yes / / No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
The Company's results of operations changed significantly between 1997 and
1998. The press release attached hereto as Exhibit B explains both
narratively and quantitatively the magnitude of the changes and the reasons
therefor.
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ECO SOIL SYSTEMS, INC.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date April 1, 1999 By /s/ William B. Adams
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William B. Adams
Chairman of the Board and
Chief Executive Officer
INSTRUCTION: The form may be signed by an executive officer of the registrant
or by any other duly authorized representative. The name and title of the
person signing the form shall be typed or printed beneath the signature. If
the statement is signed on behalf of the registrant by an authorized
representative (other than an executive officer), evidence of the
representative's authority to sign on behalf of the registrant shall be filed
with the form.
____________________________________ATTENTION__________________________________
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL CRIMINAL
VIOLATIONS (SEE 18 U.S.C. 1001).
_______________________________________________________________________________
GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General
Rules and Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule O-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the form will be made a matter of public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities of
the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but need
not restate information that has been correctly furnished. The form shall
be clearly identified as an amended notification.
5. ELECTRONIC FILERS. This form shall not be used by electronic filers unable
to timely file a report solely due to electronic difficulties. Filers unable
to submit a report within the time period prescribed due to difficulties in
electronic filing should comply with either Rule 201 or Rule 202 of
Regulation S-T (Section 232.201 or Section 232.202 of this chapter) or apply
for an adjustment in filing date pursuant to Rule 13(b) of Regulation S-T
(Section 232.13(b) of this chapter).
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EXHIBIT A
ECO SOIL SYSTEMS, INC.
ATTACHMENT TO FORM 12b-25
PART III -- NARRATIVE
ECO SOIL SYSTEMS ANNOUNCES MANAGEMENT CHANGES
RANCHO BERNARDO, CA, MARCH 30, 1999 -- Eco Soil Systems, Inc. (NASDAQ: ESSI)
today announced that L. Jean Dunn, Jr., Chief Financial Officer, has informed
the Company that he will resign as an officer of the Company effective March
31, 1999.
"Jean has played a key roll in Eco Soil's transition to a public company and
its rapid growth to date," said William B. Adams, Chairman and Chief
Executive Officer. "Although his contributions will be missed, we wish him
the very best as he leaves to pursue other business opportunities."
Mr. Dunn, who has served as Chief Financial Officer since the summer of 1996,
added: "I have genuinely enjoyed my relationship with Eco Soil over the past
three years, and I will miss my associates at the Company. I am proud of my
accomplishments at Eco Soil, and as I step down as Chief Financial Officer, I
believe that I leave the Company well positioned for the future."
Upon Mr. Dunn's resignation, Mark Buckner will assume the duties of Chief
Financial Officer for the Company.
"Mark has extensive experience in the financial management and financing of
high-growth companies," said Mr. Adams. From 1996 through 1998, Mr. Buckner
served as Corporate Treasurer for NextWave Telecom, Inc. Mr. Buckner also
previously has served as Chief Financial Officer for WORLDxCHANGE
Communications (from 1994 through 1996), U.S. Long Distance Corp (from 1988
through 1993), and The Southwest Venture Partnerships (from 1983 through
1988). Prior to these roles, Mr. Buckner practiced public accounting with
Arthur Andersen and Co. for seven years.
Eco Soil Systems, distributes and supports a proprietary line of biotech
products that are used to treat chronic soil and water quality problems. The
Company's principal proprietary product is the BioJect-R-, which cultures and
dispenses biological products through irrigation systems. The Company
distributes a wide range of turf maintenance products principally through
Turf Partners, Inc. a division of the Company with warehouses in Arizona,
Connecticut, Illinois, Indiana, Michigan, New Hampshire, New York, Ohio,
Pennsylvania, Southern California and Virginia. The Company distributes
irrigation supplies principally through Agricultural Supply Inc., a wholly
owned subsidiary with warehouses in Arizona, New Mexico, Southern California
and Mexico. The Company's internet site address is http://www.ecosoil.com.
The statements contained in this release that are not historical facts are
forward-looking statements that involve risks and uncertainties. Management
wishes to caution the reader that these forward-looking statements are only
predictions; actual events or results may differ materially as a result of
risks facing the Company, including those discussed in the periodic reports
from time to time fled by the Company with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 (and including in
particular those listed under the caption "factors that may affect future
performance" in the Company's Annual report on Form 10-K filed March 31, 1998
and in the Company's Quarterly report on Form 10-Q filed November 9, 1998).
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EXHIBIT B
ECO SOIL SYSTEMS, INC.
ATTACHMENT TO FORM 12b-25
PART IV -- OTHER INFORMATION
ECO SOIL SYSTEMS, INC. (ESSI) TODAY ANNOUNCED RECORD REVENUES
FOR THE YEAR ENDED DECEMBER 31, 1998
RANCHO BERNARDO, CA, MARCH 10, 1999 -- Eco Soil Systems, Inc. (NASDAQ: ESSI)
today announced sales for the twelve months ended December 31, 1998 were a
record $82.4 million, an increase of 120 percent over 1997 sales of $37.5
million. The increase reflects growth across both the agriculture and turf
segments. The Company reported a net loss for 1998 of $10.0 million, or $.61 per
share, compared to a net loss of $1.1 million, or $.10 per share, for 1997.
Fourth quarter sales were a record $17.1 million, an increase of 104% over the
$8.4 million reported in the fourth quarter of 1997. The increase was primarily
attributable to the Company's agricultural segment, which had revenues of $6.6
million in the fourth quarter of 1998, compared to $281,000 in the fourth
quarter of 1997. The Company reported a net loss of $12.2 million, or $.73 per
share, for the fourth quarter of 1998, compared to a net loss of $1.9 million,
or $.15 per share, for the fourth quarter of 1997.
"Fourth quarter results were negatively impacted by $3.9 million of charges
related to the restructuring of our turf business, as well as $857,000 of
interest expense related to the termination of a line of credit," said William
B. Adams, chairman and chief executive officer. "These charges are outlined in
more detail in our press release of February 11, 1999."
The 1998 loss includes over $1.0 million in losses or other expenses related to
the Company's Aspen Consulting, Turf Products, Turfmakers and Direct Products
subsidiaries, which have either been disposed of or substantially restructured
in 1998. In addition, the fourth quarter results also reflect expenses totaling
approximately $2.2 million related to the buyout or cancellation of certain
exclusive distribution agreements. These changes were driven by the contract
signed with the Scotts Company on December 11, 1998. As a result, the Company
hired 25 sales representatives formerly with Scotts, who will now be actively
marketing the Company's proprietary products in geographic territories
previously served by distributors. Adams continued, "We expect that the
expansion of our sales force through the Scotts transaction, and the
streamlining of our turf operations and work force in the fourth quarter, will
help us increase sales and achieve better operating efficiencies in 1999 and
beyond."
The following outlines the more significant accomplishments made by the company
in 1998:
1. The Company received approval of its primary product, the BioJect-R-, by
the EPA as a delivery device for biopesticide products. The Company can now
aggressively
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promote the BioJect and significantly increase its marketing efforts in
both agriculture and turf markets.
2. The Company increased the number of agricultural acres using its
proprietary products from 2,000 at the beginning of 1998 to in excess of
25,000 presently.
3. The Company's turf division continues to grow significantly. Revenues for
the Eastern and Western golf regions, where there were no acquisitions
during 1998, increased 47 percent and 79 percent, respectively, from 1997
to 1998. The Company now has in excess of 85 sales people in golf, covering
half of the approximately 16,000 golf courses in the United States. All of
these sales people are being trained on the Company's proprietary products,
and their compensation program provides additional incentives for selling
the Company's proprietary products.
4. Three of the Company's products have been approved by the Organic Materials
Review Institute for use on organic farms, which opens a new market for the
Company's proprietary products in this expanding agricultural sector.
During 1998 the Company had successful results on tomatoes, potatoes,
melons, peppers, avocados, sugar cane and strawberries. Tests will be
conducted in 1999 on cotton and alfalfa.
5. The Company licensed additional products from Mycogen, the USDA, and
Rutgers University in 1998, which will significantly enhance its product
portfolio in 1999. All these new products will be marketed as biopesticide
and delivered through the BioJect as each gets label authorization from the
EPA.
"1998 proved to be a year in which the Company strengthened its sales and
marketing teams, cleared a key regulatory hurdle for our proprietary products,
improved our operating efficiencies for the future and acquired several new
products," said Doug Gloff, president and chief operating officer.
ESSI distributes and supports a proprietary line of biotech products that are
used to treat chronic soil and water quality problems. The Company's principal
proprietary product is the BioJect-R-, which cultures and dispenses biological
products through irrigation systems. The Company distributes a wide range of
turf maintenance products principally through Turf Partners, Inc. a division of
the Company with warehouses in Arizona, Connecticut, Illinois, Indiana,
Michigan, New Hampshire, New York, Ohio, Pennsylvania, Southern California and
Virginia. The Company distributes irrigation supplies principally through
Agricultural Supply Inc., a wholly owned subsidiary with warehouses in Arizona,
New Mexico, Southern California and Mexico. Eco Soil's Internet site address is
http:/www.ecosoil.com.
The statements contained in this release that are not historical facts are
forward-looking statements that involve risks and uncertainties. Management
wishes to caution the reader that these forward-looking statements are only
predictions; actual events or results may differ materially as a result of risks
facing the Company, including those listed under the caption "factors that may
affect future performance" in the Company's Annual Report on Form 10-K filed
March 31, 1998 and in the Company's Quarterly Report on Form 10-Q filed November
9, 1998.
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ECO SOIL SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
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<CAPTION>
Three Months Twelve Months
Ended December 31, Ended December 31,
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1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Revenues:
Turf/Golf $ 10,528 $ 8,103 $ 61,336 $ 36,975
Agriculture 6,561 281 21,035 550
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Total revenues 17,089 8,384 82,371 37,525
Cost of revenues:
Turf/Golf 8,641 6,210 43,698 25,240
Agriculture 4,881 22 14,738 51
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Total cost of revenues 13,522 6,232 58,436 25,291
Gross profit 3,567 2,152 23,935 12,234
Operating expenses:
Selling, general and administrative 9,573 3,305 24,967 11,162
Research and development 271 80 584 269
Special charges 3,875 - 3,875 -
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Income (loss) before interest, depreciation and amortization (10,152) (1,233) (5,491) 803
Depreciation 348 443 1,566 819
Amortization of intangibles 256 179 1,108 580
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Loss from operations (10,756) (1,855) (8,165) (596)
Interest expense 1,715 78 2,494 579
Interest income (301) (26) (654) (97)
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Net loss $(12,170) $ (1,907) $(10,005) $ (1,078)
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Net loss per share, basic and diluted $ (0.73) $ (0.15) $ (0.61) $ (0.10)
Shares used in calculating net loss per share, basic and diluted 16,771 12,706 16,361 11,327
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