<PAGE>
United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB/A NO. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------ --------------------
Commission file number 0-19352
--------------------------
AGRIBIOTECH, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 85-0325742
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Quail Park West, 2700 Sunset Road, Suite C-25, Las Vegas, Nevada 89120
(Address of principal executive offices)
(702) 798-1969
(Issuer's telephone number)
Indicate by check mark whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES X NO .
----- -----
As of February 9, 1995, the Registrant had 7,567,200 shares of Common
Stock, par value $.001 per share, issued and outstanding.
<PAGE>
AGRIBIOTECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
------------ -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $663,871 1,422,943
Notes receivable from sale of stock 161,023 1,083,027
Accounts receivable 1,884,045 953,251
Inventories 5,260,942 1,819,159
Other 304,771 46,703
----------- ---------
Total current assets 8,274,652 5,325,083
----------- ---------
Property, Plant and Equipment:
Land 794,500 244,500
Building 3,193,796 1,250,770
Equipment 2,289,775 669,158
----------- ---------
6,278,071 2,164,428
Less accumulated depreciation 260,133 72,163
----------- ---------
Total property, plant and equipment 6,017,938 2,092,265
----------- ---------
Intangible assets, net of accumulated amortization
of $639,466 at December 31, 1995 and $572,951 at 472,281 164,874
June 30, 1995.
Notes receivable from sale of stock -- 350,140
Other assets 86,951 81,640
----------- ---------
Total Assets $14,851,822 8,014,002
=========== =========
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
AGRIBIOTECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
------------ ----------
<S> <C> <C>
Current liabilities:
Short-term debt $ 2,576,914 564,291
Current installments of long-term debt 701,133 123,057
Accounts payable 2,686,091 702,576
Accrued liabilities 884,490 143,386
----------- ----------
Total current liabilities 6,848,628 1,533,310
Long-term debt, excluding current installments 1,497,549 148,057
----------- ----------
Total liabilities 8,346,177 1,681,367
----------- ----------
Stockholders' equity:
Preferred stock, $.01 par value. Authorized
10,000,000 shares; none issued. -- --
Common stock, $.001 par value. Authorized
30,000,000 shares; issued and outstanding
7,567,200 at December 31, 1995 and
7,145,200 shares at June 30, 1995 7,567 7,145
Capital in excess of par value 14,883,164 13,742,327
Accumulated (deficit) (8,096,986) (6,387,184)
----------- ----------
6,793,745 7,362,288
Deferred compensation (276,560) (358,640)
Notes receivable from sale of stock (11,540) (671,013)
----------- ----------
Total stockholders' equity 6,505,645 6,332,635
----------- ----------
Total Liabilities and Stockholder's Equity $14,851,822 8,014,002
=========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
AGRIBIOTECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Month Period Ended Six Month Period Ended
----------------------------- -----------------------------
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $4,463,644 472,353 6,932,674 469,282
Cost of sales 3,388,669 269,788 5,239,454 265,147
---------- --------- ---------- ---------
Gross profit 1,074,975 202,565 1,693,220 204,135
---------- --------- ---------- ---------
Operating expenses:
Regulatory expenses 4,369 100,107 61,386 196,748
Amortization expense 34,210 22,659 65,815 45,076
Research and development 10,001 10,803 15,105 74,065
Warehouse and distribution 401,228 -- 801,546 --
Selling and marketing 384,530 40,185 769,807 130,764
General and administrative 1,109,211 66,133 1,627,064 201,155
---------- --------- ---------- ---------
Total operating expenses 1,943,549 239,887 3,340,723 647,808
---------- --------- ---------- ---------
(Loss) from operations (868,574) (37,322) (1,647,503) (443,673)
---------- --------- ---------- ---------
Other income (expense):
Interest expense (41,156) (4,256) (54,249) (8,723)
Interest income 6,495 9,524 20,771 22,821
Other (31,952) -- (28,821) --
---------- --------- ---------- ---------
Total other income (expense) (66,613) 5,268 (62,299) 14,098
---------- --------- ---------- ---------
Net (loss) ($935,187) (32,054) (1,709,802) (429,575)
========== ========= ========== =========
Shares of common stock used in
computing loss per share 7,326,057 4,240,000 7,235,134 4,223,478
========== ========= ========== =========
Net (loss) per share ($0.13) (0.01) (0.24) (0.10)
========== ========= ========== =========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
AGRIBIOTECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Capital in Notes
--------------------- Excess of Accumulated Deferred Receivable From
Shares Amount Par Value (Deficit) Compensation Sale of Stock Total
--------- ------ ---------- ----------- ------------ --------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1995 7,145,200 $7,145 13,742,327 (6,387,184) (358,640) (671,013) 6,332,635
Common stock issued for:
Services 10,000 10 31,490 -- -- -- 31,500
Notes 412,000 412 1,297,388 -- -- (1,297,800) --
Reduction of notes for:
Services -- -- -- -- -- 28,959 28,959
Cash -- -- -- -- -- 580,603 580,603
Acquisitions -- -- (343,777) -- -- 1,503,447 1,159,670
Increase in repayment amount of
notes receivable -- -- 155,736 -- -- (155,736) --
Deferred compensation earned -- -- -- -- 82,080 -- 82,080
Net (loss) -- -- -- (1,709,802) -- -- (1,709,802)
--------- ------ ---------- ---------- -------- ---------- ----------
Balance at December 31, 1995 7,567,200 $7,567 14,883,164 (8,096,986) (276,560) (11,540) 6,505,645
========= ====== ========== ========== ======== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE>
AGRIBIOTECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Month Period Ended
-------------------------------------
December 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $(1,709,802) (429,575)
Adjustments to reconcile net (loss) to net cash
flows from operating activities:
Amortization 66,515 45,076
Depreciation 187,970 2,335
Common stock for services 142,539 40,409
Changes in assets and liabilities excluding
effects of acquisitions:
Accounts receivable (52,522) (472,380)
Inventories (2,515,747) 17,069
Other assets (153,006) 18,973
Accounts payable 1,786,821 60,595
Accrued liabilities 682,667 (1,605)
----------- ---------
Net cash flows from operating activities (1,564,565) (719,103)
----------- ---------
Cash flows from investing activities:
Additions to property, plant and equipment (361,781) (27,398)
Additions to intangible assets (373,922) (10,217)
Acquisitions (1,434,732) --
----------- ---------
Net cash flows from investing activities (2,170,435) (37,615)
----------- ---------
Cash flows from financing activities:
Net proceeds of short-term debt 1,592,709 --
Repayments of long-term debt (119,388) (106,389)
Proceeds from exercise of warrants -- 140,000
Payments received on notes receivable from
sale of stock 1,502,607 323,927
----------- ---------
Net cash flows from financing activities 2,975,928 357,538
----------- ---------
Net decrease in cash and cash equivalents (759,072) (399,180)
Cash and cash equivalents at beginning of period 1,422,943 580,003
----------- ---------
Cash and cash equivalents at end of period $ 663,871 180,823
=========== =========
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE>
AGRIBIOTECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Month Peried Ended
------------------------------------
December 31 December 31
1995 1994
----------- -----------
<S> <C> <C>
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid $ 27,904 59,578
========== ======
Non cash investing and financing activities:
Debt issued in connection with acquisitions $1,250,000 --
Increase in warrant exercise price 155,736 --
Receivable from exercise of warrants 1,297,800 --
Reduction of notes receivable for acquisitions 1,853,587 --
Notes receivable from sale of stock 161,023 85,000
Discount on notes receivable from sale of stock 343,777 --
========== ======
Summary of assets and liabilities acquired through acquisitions:
Cash $ 5,641 --
Accounts receivable 878,272 --
Inventories 926,036 --
Property, plant and equipment 3,751,862 --
Other assets 110,373 --
Accounts payable and accrued expenses 255,131 --
Long-term and short-term debt 1,216,870 --
---------- ------
Net assets acquired $4,200,183 --
========== ======
</TABLE>
See accompanying notes to consolidated financial statements
7
<PAGE>
AGRIBIOTECH, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
===============================================================================
(1) PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS
----------------------------------------------
The unaudited financial statements have been prepared in accordance
with the rules of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows, in conformity with
generally accepted accounting principles. The information furnished, in the
opinion of management reflects all adjustments (consisting primarily of normal
recurring accruals) necessary to present fairly the financial position, results
of operations and cash flows for the three-month and six month periods ended
December 31, 1995 and 1994, respectively. The results of operations are not
necessarily indicative of results which may be expected for any other interim
period or for the year as a whole.
Effective June 30, 1995, the Company changed its fiscal year end from
September 30 to June 30 since that date better reflects the natural business
year of the seed business.
As described below, the Company acquired Clark Seeds, Inc. (Clark
Seed), whose results of operations were first included with those of the Company
in its Form 10-QSB for the quarter ended December 31, 1995. During the
preparation of the Company's March 31, 1996 Form 10-QSB, several errors were
discovered in the manner in which Clark Seed's results of operations had been
reported by the Company in the quarter ended December 31, 1995. These errors,
which were primarily related to the manner in which Clark Seed reported
inventory purchases and the related cost of sales, are corrected herein. The
effect on the Company's results of operations is an increase in the Company's
net loss of $465,183, or $0.07 per share, for both the three-month period and
six-month period ended December 31, 1995. In addition, several items relating to
Clark Seed were misclassified in the December 31, 1995 balance sheet which have
been corrected by reclassifying such items herein.
(2) ACQUISITIONS
------------
The Company purchased substantially all of the assets of Halsey Seed
Company ("Halsey") effective July 1, 1995. The transaction was recorded using
the purchase method of accounting. The purchase price of $1,122,793 includes
inventory, accounts receivable, prepaid assets, and fixed assets, net of
accounts payable and certain assumed liabilities. The purchase price was paid
through cash of $772,653 and 87,535 shares of the Company's common stock valued
at $350,140. The Company's common stock is subject to a "lock-up agreement"
through March 1996.
The Company purchased substantially all of the assets of Arnold-Thomas
Seed Service, Inc. (Arnold-Thomas) effective October 1, 1995. The transaction
was recorded using the purchase method of accounting. The purchase price of
$927,389 includes inventory, accounts receivable, prepaid assets and fixed
assets, net of accounts payable and certain assumed liabilities. The purchase
price was paid through cash of $666,524 and 105,450 shares of the Company's
common stock valued at $259,671. The Company's common stock is subject to a
"lock-up agreement" through December 1997.
The Company purchased all of the capital stock of Clark Seed effective
October 1, 1995. The transaction was recorded using the purchase method of
accounting. The purchase price of $2,150,000 was paid through 400,000 shares of
ABT common stock valued at $900,000 and promissory notes of $1,250,000. The
Company's common stock is subject to a "lock-up agreement" through December
1997.
During the nine month period ended June 30, 1995, the Company
consummated acquisitions of Scott Seed Company, Seed Resource, Inc., and Hobart
Seed Company. Unaudited pro-forma results of operations assuming these and the
above acquisitions had occurred at the beginning of the period presented is as
follows:
<TABLE>
<CAPTION>
Three Month Period Ended Six Month Period Ended
------------------------ -----------------------
December 31, 1994 December 31, 1995 December 31, 1994
----------------- ----------------- -----------------
<S> <C> <C> <C>
Revenue $3,828,738 $ 7,731,235 $ 7,897,777
Net earnings(loss) $ (291,436) $(1,547,308) $(1,224,851)
Net earnings(loss) per share $ (0.05) $ (0.20) $ (0.20)
</TABLE>
In connection with the acquisitions, the former owners of these entities
received common stock of the Company that is subject to "lock-up agreements"
which limit the amount of common stock that the former owners of these
entities can sell within specified time periods. In addition, the Company has
guaranteed the net proceeds to be received by certain of the former owners of
these entities from the sale
8
<PAGE>
AGRIBIOTECH, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
===============================================================================
of the common stock during the lock up periods. At December 31, 1995, the
remaining amounts on such guarantees are as follows:
<TABLE>
<CAPTION>
End of
"Lock-up
Guaranteed Agreement"
Shares net, proceeds period
------ ------------- ----------
<S> <C> <C> <C>
Scott Seed Company 63,500 $ 92,159 January 1996
Seed Resource, Inc. 108,335 409,256 May 1996
Hobart Seed Company 147,451 470,000 August 1998
</TABLE>
Any difference between the guaranteed net proceeds and the net proceeds received
by the previous owners of the above entities will be paid in cash by the
Company. The closing price for the Company's common stock on February 9, 1996
was $2.375 per share and the range of closing prices have been as follows:
<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
July 1, 1995 - September 30, 1995 $5.4375 $3.0625
October 1, 1995 - December 31, 1995 $3.75 $1.688
January 1, 1996 - February 9, 1996 $2.75 $1.8125
</TABLE>
Substantially all of the fixed assets of the Company's respective subsidiaries
secure the above guaranteed net proceeds.
(3) SHORT-TERM DEBT
---------------
The Company has a $2,000,000 line of credit with a bank. The amount
available under the line of credit is limited to the sum of 80 percent of the
Company's eligible receivable less than 90 days old and 65 percent of the value
of inventory. The Company had $2,000,000 outstanding under this line of credit
at December 31, 1995. The line of credit bears interest at the banks reference
rate plus 1.5 percent and is secured by inventory, receivable, equipment, and
intangibles. The line of credit expires on February 29, 1996. In addition, Clark
Seed has a revolving line of credit for up to $721,000 of which $576,914 was
outstanding at December 31, 1995. This line of credit expires October 1, 1996,
bears interest at a variable rate which was 8.95 percent at December 31, 1995
and is secured by Clark Seed's accounts receivable, inventory and equipment.
(4) LONG TERM DEBT
--------------
In connection with the acquisition of Clark Seed, the Company assumed
long-term debt of $784,711. The debt was for equipment, note payable to a
stockholder and note payable to Farm Credit secured by Clark Seed's land and
buildings. The interest rates on the notes vary from 7.95% to 9.75% and the
terms of the notes vary from one year to twelve years.
Additionally, in connection with the Clark Seed acquisition, ABT
entered into note agreements with the previous owners of Clark Seed for
$1,250,000. The notes bear interest at an average rate of approximately 10
percent, and are due from April 1996 through January 1998.
(5) CAPITAL STOCK
-------------
On October 10, 1995, the Company called all of its 422,000 outstanding
Class A Warrants. The Company paid warrant holders $.01 per warrant for A
Warrants not exercised by November 8, 1995. All of the warrants were then
exercised by "stand-by purchasers" who paid cash, signed promissory notes or
agreed to perform services. The warrants were exercised at $3.50 per share less
a 10% commission.
9
<PAGE>
AGRIBIOTECH, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
===============================================================================
In connection with the acquisitions of Arnold-Thomas and Clark Seed
$1,503,447 of notes receivable for sale of stock were satisfied by note holders
transferring 505,405 shares of stock to the previous owners of Arnold-Thomas and
Clark Seed. To facilitate this transfer the notes receivable for sale of stock
were discounted by $343,777 to reflect the current market price of the stock.
In order to fully implement the Company's acquisition plans, the
Company is attempting to complete additional equity and debt funding. The
Company has signed an Engagement Letter with a major financial institution as
financial advisor and agent concerning a funding of up to $15,000,000 in the
form of mezzanine financing on a "best efforts" basis. Terms and the type of
offering will be mutually negotiated as due diligence on the Company and
possible acquisitions progress. The Company is also negotiating a substantial
increase in its bank line of credit, which the Company expects to receive. The
Company also has B and C Warrants which would generate $28,250,000 if exercised
at current exercise prices, of which there is no assurance.
(5) PENDING ACQUISITIONS
--------------------
The Company is continuing to perform due diligence and negotiate for
the purchase of additional regional companies specializing in the forage and
turf seed business.
The Company has signed a letter of intent, which is currently being
re-negotiated, to purchase the inventory and fixed assets of a seed company with
operations in Arizona, California and Mexico. This acquisition will provide the
Company a forage, turf and vegetable marketing base in the southwestern United
States.
On October 26, 1995, the Company signed a letter of intent to purchase
the inventory, fixed assets and proprietary rights of a regional seed company
located in Texas. This acquisition will give the Company access to proprietary
varieties of sorghum sudan hybrids and pearl millets. Production and marketing
operations will be folded into the Company's wholly owned subsidiary, Seed
Resource, Inc. for efficiency.
The total purchase price of these acquisitions before renegotiations,
is approximately $3,000,000 which will be paid through approximately $2,400,000
of cash and $600,000 of the Company's common stock. The Company's stock is
generally valued based on the average market value for the last five days prior
to the closing date. In addition, the Company's stock issued in connection with
these acquisitions may be subject to a "lock-up agreement".
The Company expects to close on each of the above acquisitions;
however, due diligence continues until a closing is consummated. Therefore,
there is no assurance that each potential acquisition will close. To date, the
Company has closed on seven of nine acquisitions which were at the same stage.
(6) SUBSEQUENT EVENTS
-----------------
On January 5, 1996, the Company entered into a consulting agreement to
assist the Company with investor communications and relations. The term of the
agreement is eighteen months. In consideration of the agreement, the Company has
granted the consultant a five year option to purchase 2,000,000 shares of the
Company's common stock options exercisible at $1.81 which equaled the market
price at that time. In July 1996, 1,500,000 options become exercisable with the
remaining 500,000 options becoming exercisable in July 1997.
-----------------------------------------------
10
<PAGE>
Part 1. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion and analysis should be used in conjunction
with the Unaudited Financial Statements and notes thereto which have been
restated as described in Note 1 of Notes to Consolidated Financial Statements.
The Company is a specialized distributor of forage and turf grass seed. The
Company had limited revenues until January 1, 1995, when it commenced an
acquisition program and acquired all or part of various regional seed companies.
The Company's business strategy is to acquire reputable, regionally based
companies with proprietary products and established production and distribution
channels in their respective markets to enable the Company to be vertically
integrated in the forage and turf grass seed business.
MATERIAL CHANGES IN FINANCIAL CONDITION
The Company had working capital of $1,426,024 at December 31, 1995, as
compared to working capital of $3,791,773 at June 30, 1995. In addition, the
Company had an increase in stockholders' equity of $173,010 during the Six-Month
period ended December 31, 1995 ("Six-Month Period 1996"). The decrease in
working capital is primarily a result of acquisitions made by the Company (see
the notes to the unaudited consolidated financial statements). The increase in
stockholders' equity is primarily a result of payment received on promissory
notes from the exercise of warrants and acquisitions made by the Company (see
the notes to the unaudited consolidated financial statements), offset by a net
loss for the Six-Month Period 1996 of $1,709,802.
During the Six-Month Period 1996, the Company had net deficit cash
flows from operating activities of $1,564,565, as compared to net deficit cash
flows from operating activities of $719,103 during the Six-Month Period ended
December 31, 1994 ("Six-Month Period 1995"). The deficit cash flows from
operating activities during the Six-Month Period 1996 is a result of the
Company's net loss of $1,709,802, changes in current assets and liabilities and
adjustments to reconcile net loss to net deficit cash flows from operating
activities, including amortization and depreciation.
During the Six-Month Period 1996, the Company had net deficit cash
flows from investing activities of $2,170,435. The deficit is the result of
$361,781 in payments for equipment, $373,922 in payments for intangible assets
and $1,434,732 for acquisitions.
During the Six-Month Period 1996, the Company reported net cash flows
from financing activities of $2,975,928 which included $1,592,709 in proceeds
from the lines of credit and $1,502,607 in payments on notes receivable for
stock, net of $119,388 of repayments of debt.
The Company is considering additional equity funding efforts,
including, but not limited to, the exercise of existing warrants. If all
warrants issued by the Company are exercised, of which there is no assurance,
they would generate $28,250,000. In addition, the Company has signed an
Engagement Letter with a major financial institution as financial advisor and
agent concerning a funding of up to $15,000,000 in the form of mezzanine funding
on a "best efforts" basis. Terms and the type of offering will be mutually
negotiated as due diligence on the Company and possible acquisitions progress.
The proceeds on those proposed financing would be used principally for working
capital, inventory and the acquisition of seed companies.
The Company and its subsidiaries have a $2,000,000 line of credit with
Bank of America (Nevada). The amount available under the line of credit as
amended, is limited to a combination of 80% of the balance due on eligible
accounts receivable and 65% of the value of eligible inventory. The Company had
$2,000,000 outstanding under this line of credit at December 31, 1995. The line
of credit bears interest at the bank's reference rate plus 1.5% and is secured
by inventory, accounts receivable, intangibles and equipment of the Company and
certain of its subsidiaries. The line of credit expires February 29, 1996.
11
<PAGE>
The Company is negotiating a substantial increase in its bank line of credit,
which the Company expects to receive. In addition, Clark Seed, Inc. has a
revolving line of credit for up to $721,000 of which $576,914 was outstanding at
December 31, 1995. This line of credit expires October 1, 1996, bears interest
at a variable rate which was 8.95% at December 31, 1995 and is secured by Clark
Seed's accounts receivable, inventory and equipment.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
During the three-month period ended December 31, 1995 ("Second Quarter
1996"), the Company finalized the acquisition of two regionally based production
seed companies, Arnold Thomas Seed Services, Inc. and Clark Seeds, Inc.
Arnold Thomas had sales of approximately $2.2 million for the fiscal year ended
May 31, 1995 and Clark Seed had sales of approximately $4.4 million for
the fiscal year ended May 31, 1995. During the Second Quarter 1996, the Company
had revenues of $4,463,644 and for the Six-Month Period 1996 had revenues of
$6,932,674 through its wholly owned subsidiaries.
The cost of revenues for the Company's products amounted to $5,239,454
for the Six-Month Period 1996 and $3,388,669 for the Second Quarter 1996, and
included such costs as the cost of product, packaging and shipping. Gross margin
was 24% and 24% respectively. The Second Quarter 1996 revenues were primarily
from the sale of a variety of field seeds, wheat and corn seed.
The company had general and administrative expenses of $1,627,064 for
the Six-Month Period 1996 which is an increase of $1,425,909 over the Six-Month
Period 1995. Of this total, $82,080 is for vesting of employee stock for
employees hired to facilitate acquisitions and the remainder includes investment
banking fees, professional fees, promotional expenses, salaries, warehousing and
rent.
The Company had regulatory expenses of $61,386 and $196,748 during the
Six-Month Period 1996 and Six -Month Period 1995, respectively. These expenses
include salaries and services rendered by consultants. This decrease resulted
from the completion of field trials for FDA approval of the Company's
proprietary product, Bloatenz Plus.
Research and development expenditures decreased by $58,960 during the
Six-Month Period 1996 over the Six-Month Period 1995 and decreased by $802
during the Second Quarter 1996 over the three-month period ended December 31,
1994 ("Second Quarter 1995"). These decreases are primarily a result of expenses
for consultants, design and materials associated with the Company's proprietary
liquid dispensing device, the PDS-1000.
The Company had selling and marketing expenses of $384,530 during the
Second Quarter 1996 and $769,807 for the Six-Month Period 1996 as compared to
$40,185 and $130,764 in corresponding periods. The increase in these expenses
for the Second Quarter 1996 and for the Six-Month Period 1996 is due to the
addition of seed operations, while the expenses for the prior two periods only
included salaries, advertising and marketing material for the Company's Graze N
Hay TM product line.
As a result of the foregoing, the Company incurred a net loss of
$1,709,802 or $.24 loss per share, for the Six-Month Period 1996, as compared to
a net loss of $429,575, or $.10 per share for the Six-Month Period 1995. The
Company incurred a net loss of $935,187 or $.13 per share, for the Second
Quarter 1996 and $32,054 or $.01 per share for the Second Quarter 1995,
respectively. The net loss was primarily due to expenses associated with raising
capital, promotional expenses, salaries and financing of a start up seed company
and vesting of employee stock for key employees at the corporate level hired to
facilitate acquisitions.
Management does not believe that inflation has had a significant
effect on the Company's operations to date, nor is inflation expected to have a
material impact over the next year.
12
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
--------
27 Financial Data Schedule
During the three-month period ended December 31, 1995, the Company
filed a Form 8-K in connection with the acquisition of Arnold Thomas Seed
Services, Inc. on February 1, 1996.
-------------------------------------------------
13
<PAGE>
SIGNATURES
In accordance with the requirement of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized .
AGRIBIOTECH, INC.,
May 14, 1996 By: /s/ Henry A. Ingalls
- - ----------------------- --------------------------------
Date Henry A. Ingalls
Vice-President/Chief
Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 185,518
<SECURITIES> 0
<RECEIVABLES> 7,128,392
<ALLOWANCES> 0
<INVENTORY> 9,875,200
<CURRENT-ASSETS> 17,561,169
<PP&E> 7,945,416
<DEPRECIATION> 385,477
<TOTAL-ASSETS> 26,277,488
<CURRENT-LIABILITIES> 18,284,011
<BONDS> 1,092,911
0
0
<COMMON> 7,567
<OTHER-SE> 6,892,999
<TOTAL-LIABILITY-AND-EQUITY> 26,277,488
<SALES> 16,676,415
<TOTAL-REVENUES> 16,676,415
<CGS> 12,381,752
<TOTAL-COSTS> 12,381,752
<OTHER-EXPENSES> 3,256,095
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 270,174
<INCOME-PRETAX> (1,965,636)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,965,636)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,965,636)
<EPS-PRIMARY> (.27)
<EPS-DILUTED> (.27)
</TABLE>
