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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, 1999
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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
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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)
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(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
entered into an agreement that calls for the sale of substantially all of the
assets of its Turf Partners, Inc. subsidiary (the "Asset Sale"). The press
release attached hereto as Exhibit A describes the proposed Asset Sale
transaction. Negotiation and documentation of the Asset Sale transaction 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)
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
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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 1998 and
1999. 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 March 30, 2000 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
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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 ANNOUNCES AGREEMENT TO SELL TURF PARTNERS ASSETS TO J.R. SIMPLOT
COMPANY
RANCHO BERNARDO, Calif.--(BUSINESS WIRE)--March 28, 2000--Eco Soil Systems, Inc.
(Nasdaq:ESSI - NEWS) today announced that it has entered into a definitive
agreement to sell substantially all of the assets of its Turf Partners
subsidiary to the J.R. Simplot Company for a purchase price equal to six times
Turf Partners 2000 EBITDA (earnings before interest, taxes, depreciation and
amortization) from sales of distributed products, subject to certain
adjustments.
Simplot also will assume liabilities associated with existing vendor payables,
contracts and leases. These liabilities include external debt of approximately
$17 million to be assumed at closing.
The transaction is expected to close during July 2000, subject to certain
customary closing conditions, including the approval of Eco Soil shareholders,
the receipt of various third party consents and the expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act.
At the closing, Simplot will make a down payment of $20 million, subject to
adjustment if: (a) Turf Partners' net tangible assets at June 30, 2000 are more
or less than $3 million, (b) if Turf Partners has not generated at least 75% of
the EBITDA it has projected for the first six months of 2000 or (c) if Turf
Partners fails to satisfy other balance sheet tests.
Simplot will pay the balance of the purchase price in March 2001 based on an
audited balance sheet as of June 30, 2000 and statements of operations for the
year ended Dec. 31, 2000.
The final purchase price will be subject to adjustment based on the same balance
sheet factors that apply in July 2000 and to a reduction based on the average
amount outstanding on Turf Partners' working capital line of credit during 2000.
William B. Adams, chairman and CEO, said: "We are very pleased with the terms of
the transaction as we continue to strive for profitability in 2000. There are
many benefits to Eco Soil as the Simplot deal unfolds. With the infusion of cash
and the assumption of Turf Partners' debt, working capital is increased at the
parent level, allowing management to focus on the development and sales of
proprietary microbial products to increase market penetration."
The asset purchase agreement calls for Eco Soil and Simplot to enter into
separate agreements pursuant to which Simplot will sell Eco Soil proprietary
products into turf and agricultural markets and commence field trials of Eco
Soil's proprietary products on its potato fields.
Under the agreement relating to agricultural markets, Eco Soil's proprietary
products would be distributed through Simplot's Soil Builders organization, a
nationwide network of 85 agricultural retail stores.
Adams continued: "We expect that the distribution agreements with Simplot will
enhance our proprietary product sales in both the agriculture and turf markets.
In agriculture, we expect the Simplot agreements will expand our distribution
channels for proprietary products into the sizeable corn, cotton and potato
markets. The proprietary products will include the Company's EPA approved
BioJect(R) system, the FreshPack(R) product line and a new low-cost hybrid of
the BioJect(R) and FreshPack(R) products designed to service the agriculture
market.
"In regards to the turf market, the asset purchase agreement contemplates that
Simplot will agree to a five-year distribution agreement for Eco Soil's
proprietary product sales. During this period, Turf Partners would continue to
be the exclusive distributor of proprietary products and equipment for turf
markets.
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"Overall we are very pleased with the outcome of this long- awaited transaction.
From every angle, Eco Soil stands to benefit through the distribution agreements
with Simplot, new financial freedom and increased market penetration in the turf
and agriculture markets.
"As we have explained in previous press releases, Eco Soil wanted to form a
strategic alliance that would allow entrance into larger agricultural markets
and increase our market share in the turf industry, while not incurring
substantial investment expenses. In terms of the transaction, Eco Soil expects
to successfully accomplish both of these goals."
Eco Soil develops, markets and sells proprietary biological products, and
operates two distribution companies that provide chemical, fertilizer and seed
products for turf and crop maintenance problems in the golf and agricultural
industries.
Its proprietary products are generally made up of biotech discoveries by
research companies and universities and are sold under the
FreshPack-Registered Trademark or the BioJect-Registered Trademark- brands.
These products, along with standard turf maintenance products, are sold to
nearly 40% of America's golf courses through Eco Soil's Turf Partners
subsidiary, and are sold to the agricultural market, along with irrigation
products, through its Agricultural Supply subsidiary. 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
April 7, 1999 and subsequent quarterly filings including Form 10-Q filed Nov.
15, 1999.
CONTACT:
Eco Soil Systems, Rancho Bernardo
William B. Adams or Ann R. Strobel, 858/675-1660
or
The Financial Relations Board
Karen Taylor, 310/442-0599 (general info)
Jill Fukuhara/Rose Anunciacion, 310/442-0599
(analyst contact)
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EXHIBIT B
ECO SOIL SYSTEMS, INC.
ATTACHMENT TO FORM 12b-25
PART IV -- OTHER INFORMATION
ECO SOIL SYSTEMS REPORTS 1999 RESULTS
RANCHO BERNARDO, Calif.--(BUSINESS WIRE)--March 28, 2000--Eco Soil Systems, Inc.
(Nasdaq: ESSI - NEWS) announced revenues for the twelve months ended December
31, 1999 of $123.5 million compared to $82.4 million during the same period in
1998. This revenue was comprised of $97.1 million from the Company's Turf
Partners subsidiary and $26.4 million from the Company's Agricultural Supply
subsidiary. The Company reported a net loss for the year of $18.4 million, or
$1.05 per share, compared to a net loss of $10.0 million, or $.61 per share, for
the same period in 1998, according to William B. Adams, chairman and chief
executive officer.
Adams commented, "We believe the losses are not indicative of the Company's
prospects in the future. Eco Soil announced today, in a separate release, that
it has reached an agreement to sell its turf distribution business to The J.R.
Simplot Company. We are now well positioned to focus on our core technology,
substantially cut our overhead expenses and significantly reduce our long term
debt."
The 1999 loss includes the operating income shortfall related to the Ag Supply
Mexican subsidiary's sale of proprietary products and certain expenses related
to consolidating and preparing to sell the Turf Partner distribution business.
The 1999 loss also included approximately $8.0 million in interest,
depreciation, amortization and administrative expenses that will be eliminated
in 2000 as a result of the sale of Turf Partners and the consolidation of
administrative functions at Ag Supply and the Company's headquarters.
Revenues for the quarter ended December 31, 1999 were $21.8 million compared to
$17.1 million during the same period in 1998. This revenue was comprised of
$16.0 million from the Company's Turf Partners subsidiary and $5.8 million from
the Company's Agricultural Supply subsidiary. The Company reported a net loss
for the quarter of $13.8 million, or $.76 per share, compared to a net loss of
$12.2 million, or $.73 per share, for the same period in 1998.
Eco Soil develops, markets and sells proprietary biological and traditional
chemical products that provide solutions for a wide variety of turf and crop
maintenance problems in the golf and agricultural industries. Its proprietary
products are distributed through the BioJect(R), a patented and EPA-approved
device that cultures and dispenses biological products through irrigation
systems. These products, along with standard turf maintenance products, are sold
to nearly 40% of America's golf courses through Eco Soil's Turf Partners
subsidiary, and are sold to the agricultural market, along with irrigation
products, through its Agricultural Supply subsidiary. 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
April 7, 1999.
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ECO SOIL SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
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<CAPTION>
ASSETS
December 31,
1999 1998
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,228 $ 3,410
Accounts receivable, net
of allowance for doubtful
accounts of $2,204 and $1,261
at December 31, 1999 and 1998,
respectively 21,675 13,523
Finished goods inventory 16,360 10,475
Prepaid expenses and other current assets 4,588 6,288
Total current assets 43,851 33,696
Equipment under construction 5,041 4,731
Property and equipment, net 14,450 11,652
Intangible assets, net 14,374 14,571
Other assets 4,839 2,355
Total assets $82,555 $67,005
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<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $24,438 $ 8,037
Accrued expenses 5,809 7,061
Current portion of long-term obligations 19,276 178
Total current liabilities 49,523 15,276
Long-term obligations, net of current
portion 16,482 22,620
Deferred gain on sale/leaseback of building 523 566
Commitments
Shareholders' equity:
Preferred stock
$.005 par value; 5,000,000 shares
authorized; none issued and outstanding -- --
Common stock
$.005 par value; 50,000,000 shares
authorized at December 31, 1999 and 1998;
18,349,965 and 17,064,576 shares issued
and outstanding at December 31, 1999
and 1998, respectively 92 85
Additional paid-in capital 55,578 51,485
Warrants 2,733 958
Notes receivable from shareholders -- (15)
Accumulated deficit (42,376) (23,970)
Total shareholders' equity 16,027 28,543
Total liabilities and shareholders'
equity $82,555 $ 67,005
</TABLE>
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ECO SOIL SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Twelve Months
Ended December 31, Ended December 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues:
Turf Partners $ 15,999 $ 10,467 $ 97,169 $ 61,336
Agricultural Supply 5,764 6,623 26,363 21,035
Total revenues 21,763 17,090 123,532 82,371
Cost of revenues:
Turf Partners 15,405 8,635 77,599 44,657
Agricultural Supply 5,309 4,888 19,326 14,907
Total cost of revenues 20,714 13,523 96,925 59,564
Gross profit 1,049 3,567 26,607 22,807
Operating expenses:
Selling, general and
administrative 12,575 9,922 38,828 25,405
Research and development 297 271 1,065 584
Amortization of intangibles 291 256 1,155 1,108
Special charges - 3,875 - 3,875
Income (loss) from operations (12,114) (10,757) (14,441) (8,165)
Interest expense 1,659 1,715 4,288 2,494
Interest income 15 302 323 654
Net income (loss) $ (13,758) $ (12,170) $ (18,406) $ (10,005)
Net loss per share, basic and
diluted $ (0.76) $ (0.73) $ (1.05) $ (0.61)
Shares used in calculating net loss
per share, basic and diluted 17,991 16,771 17,550 16,361
</TABLE>
CONTACT:
Eco Soil Systems, Inc., Rancho Bernardo
William B. Adams or Ann R. Strobel, 858/675-1660
or
The Financial Relations Board, 310/442-0599
Karen Taylor, General Information
Jill Fukuhara/Rose Anunciacion, Analyst Contact
