<PAGE>
UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 9, 1998
-----------------------
AgriBioTech, Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 1-1935 85-0325742
- --------------------------------------------------------------------------------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
2700 Sunset Rd., Suite C-25, Las Vegas, Nevada (89120)
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 798-1969
--------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 on Form 8-K/A to the Current Report on Form 8-K ("Form
8-K") for January 9, 1998 of AgriBioTech, Inc., a Nevada corporation ("the
Company") is submitted in order to provide the Financial Statements and pro
forma financial information called for under Item 7 of Form 8-K. Therefore, the
Company hereby amends its Form 8-K in accordance with Rule 12b-15 under the
Securities Exchange Act of 1934.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Seed Corporation of America, Inc.
and Green Seed Company Limited Partnership:
We have audited the accompanying combined balance sheets of Seed Corporation of
America, Inc. and Green Seed Company Limited Partnership as of December 31, 1997
and 1996, and the related combined statements of operations, capital funds
(deficit) and cash flows for the years then ended. These financial statements
are the responsibility of the Companies' management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of Seed Corporation of
America, Inc. and Green Seed Company Limited Partnership as of December 31, 1997
and 1996, and the combined results of operations and cash flows for the years
then ended, in conformity with generally accepted accounting principles.
Baltimore, Maryland KPMG Peat Marwick LLP
January 30, 1998
<PAGE>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Combined Balance Sheets
December 31, 1997 and 1996
<TABLE>
<CAPTION>
==============================================================================================================
1997 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,906 79,492
Accounts receivable, net of allowance for doubtful accounts of $510,000
in 1997 and $245,940 in 1996 1,885,750 1,956,955
Inventories (note 3) 6,186,885 6,130,866
Prepaid expenses and other current assets 729,169 203,224
- --------------------------------------------------------------------------------------------------------------
Total current assets 8,811,710 8,370,537
Property and equipment, net (note 4) 230,903 136,607
Other assets 59,840 66,121
- --------------------------------------------------------------------------------------------------------------
Total assets $ 9,102,453 8,573,265
==============================================================================================================
LIABILITIES AND CAPITAL FUNDS (DEFICIT)
Current liabilities:
Checks drawn in excess of amounts on deposit $ 1,086,474 --
Short-term borrowings (note 5) 4,490,179 4,204,997
Current maturities of long-term debt (note 6) 254,895 7,705
Subordinated debt (note 7) 120,925 --
Current portion of capital lease obligation (note 8) 17,327 8,331
Accounts payable and accrued expenses 1,582,252 1,584,881
- --------------------------------------------------------------------------------------------------------------
Total current liabilities 7,552,052 5,805,914
Long-term debt, less current maturities (note 6) 318,014 60,408
Capital lease obligation, less current portion (note 8) 32,852 11,274
Subordinated debt (note 7) -- 969,399
- --------------------------------------------------------------------------------------------------------------
Total liabilities 7,902,918 6,846,995
- --------------------------------------------------------------------------------------------------------------
Fair value of net current assets in excess of purchase price of
acquired company 2,005,037 2,291,470
- --------------------------------------------------------------------------------------------------------------
Capital funds (deficit):
Common stock, $1 par value, authorized 100,000 shares, issued
and outstanding 25,000 shares in 1997 and 50,000 in 1996 25,000 50,000
Partners' capital contributions 25,500 50,000
Accumulated deficit (856,002) (665,200)
- --------------------------------------------------------------------------------------------------------------
Net capital deficit (805,502) (565,200)
Commitments (note 8)
- --------------------------------------------------------------------------------------------------------------
Total liabilities and net capital deficit $ 9,102,453 8,573,265
==============================================================================================================
</TABLE>
See accompanying notes to combined financial statements.
2
<PAGE>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Combined Statements of Operations
Years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
================================================================================
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Net sales $39,764,228 35,794,067
Cost of goods sold 31,262,842 28,795,083
- --------------------------------------------------------------------------------
Gross profit 8,501,386 6,998,984
Selling, general and administrative expenses 6,860,351 6,697,102
- --------------------------------------------------------------------------------
Operating income 1,641,035 301,882
- --------------------------------------------------------------------------------
Other income (expense), net:
Interest expense, net (681,597) (365,499)
Other income, net 126,772 28,512
- --------------------------------------------------------------------------------
(554,825) (336,987)
- --------------------------------------------------------------------------------
Net income (loss) $ 1,086,210 (35,105)
================================================================================
</TABLE>
See accompanying notes to combined financial statements.
3
<PAGE>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Combined Statements of Capital Funds (Deficit)
Years ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Partners' Retained Net Capital
Common Capital Earnings Funds
Stock Contributions (Deficit) (Deficit)
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $ 50,000 50,000 82,952 182,952
Net loss -- -- (35,105) (35,105)
Distributions to Group owners -- -- (713,047) (713,047)
- ---------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1996 50,000 50,000 (665,200) (565,200)
Net income -- -- 1,086,210 1,086,210
Distributions to Group owners -- -- (428,719) (428,719)
Redemption of common stock and a partner's
capital contribution (25,000) (24,500) (848,293) (897,793)
- ---------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997 $ 25,000 25,500 (856,002) (805,502)
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to combined financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Combined Statements of Cash Flows
Years ended December 31, 1997 and 1996
=======================================================================================================================
1997 1996
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,086,210 (35,105)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 71,037 57,911
Amortization of fair value of net current assets in excess
of purchase price of acquired company (286,433) (286,434)
Gain on disposal of property and equipment (12,300) (21,464)
Change in operating assets and liabilities:
Accounts receivable 71,205 (408,506)
Inventories (56,019) (270,932)
Prepaid expenses and other current assets (525,945) 145,214
Other assets 6,281 26,972
Accounts payable and accrued expenses (2,629) (888,782)
- -----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities 351,407 (1,681,126)
- -----------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of property and equipment (119,571) (58,458)
Proceeds from sale of property and equipment 12,300 56,021
- -----------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (107,271) (2,437)
- -----------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Short-term borrowings, net 285,182 1,789,194
Increase in checks drawn in excess of amounts on deposit 1,086,474 --
Borrowings of long-term debt 750,000 --
Repayments of long-term debt (245,204) (9,286)
Repayments of capital lease obligation (15,188) (61,220)
Repayments of subordinated debt (848,474) --
Distributions to Group owners (428,719) (713,047)
Redemption of common stock and a partner's capital contributions (897,793) --
- -----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (313,722) 1,005,641
- -----------------------------------------------------------------------------------------------------------------------
Net change in cash (69,586) (677,922)
Cash and cash equivalents, beginning of year 79,492 757,414
- -----------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 9,906 79,492
=======================================================================================================================
Supplemental information - cash paid for interest $ 738,916 573,387
=======================================================================================================================
</TABLE>
See accompanying notes to combined financial statements.
5
<PAGE>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Notes to Combined Financial Statements
December 31, 1997
- --------------------------------------------------------------------------------
(1) BUSINESS AND BASIS OF PRESENTATION
The combined financial statements include the accounts of Seed Corporation
of America, Inc. (SeedCo) and Green Seed Company Limited Partnership
(GreenCo) as of and for the years ended December 31, 1997 and 1996. SeedCo
and GreenCo are hereinafter referred to as the Group. Effective May 28,
1997, the Group acquired one of the owners' interest in SeedCo and
substantially all of his interest in GreenCo for $897,793 in cash. As of
December 31, 1997, SeedCo was wholly owned and GreenCo was 98% owned by one
individual. All significant intercompany accounts and transactions have
been eliminated.
The Group is engaged in the marketing and distribution of grass seed,
garden seed and lawn and garden products to retailers, wholesalers and
industrial users.
Effective January 1, 1998, the Group was acquired by AgriBioTech, Inc.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
The Group values inventories at the lower of cost or market. SeedCo
determines cost using the specific identification method on a FIFO basis.
GreenCo determines cost using the specific identification method on a LIFO
basis.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives of the respective
assets of three to five years. Maintenance repairs and minor improvements
are expensed as incurred.
FAIR VALUE OF NET CURRENT ASSETS IN EXCESS OF PURCHASE PRICE OF ACQUIRED
COMPANY
The fair value of net current assets in excess of purchase price of
acquired company (negative goodwill) is the result of an acquisition by
GreenCo during 1995. The negative goodwill is being amortized using the
straight-line method over 10 years.
INCOME TAXES
SeedCo is organized as a S Corporation and GreenCo is organized as a
Limited Partnership. Accordingly, the Group is not subject to income
taxes. The shareholders of SeedCo and the partners of GreenCo are
responsible for the income taxes.
(Continued)
6
<PAGE>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Notes to Combined Financial Statements
- --------------------------------------------------------------------------------
(2) CONTINUED
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingencies at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
(3) INVENTORIES
Inventories at December 31 consist of the following:
<TABLE>
<CAPTION>
1997 1996
---------------------------------------------------------------------------
<S> <C> <C>
Seed $5,076,429 5,134,202
Packaging materials 549,722 392,952
Other 560,734 603,712
---------------------------------------------------------------------------
$6,186,885 6,130,866
---------------------------------------------------------------------------
</TABLE>
If the first-in, first-out (FIFO) method of inventory accounting had been
used by GreenCo, such inventories would have been approximately $294,000
and $348,000 higher than reported at December 31, 1997 and 1996,
respectively. SeedCo had total inventories of approximately $1,834,000 and
$1,996,000 as of December 31, 1997 and 1996, respectively.
The Group purchased approximately 11% of its inventory from one vendor
during the year ended December 31, 1997.
(4) PROPERTY AND EQUIPMENT
Property and equipment at December 31 consists of the following:
<TABLE>
<CAPTION>
1997 1996
---------------------------------------------------------------------------
<S> <C> <C>
Computer hardware and software $142,409 130,408
Furniture and fixtures 115,476 83,239
Manufacturing and distribution equipment 485,089 435,170
Leasehold improvements 55,864 23,450
Automobiles and leased vehicles 130,914 118,267
---------------------------------------------------------------------------
929,752 790,534
Less accumulated depreciation and amortization 698,849 653,927
---------------------------------------------------------------------------
$230,903 $136,607
---------------------------------------------------------------------------
</TABLE>
(Continued)
7
<PAGE>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Notes to Combined Financial Statements
- --------------------------------------------------------------------------------
(5) REVOLVING CREDIT AGREEMENT
The Group has a $15,000,000 revolving credit agreement with Heller
Financial, Inc. that expires on March 1, 2000. Borrowings available under
the agreement are based upon eligible amounts of accounts receivable and
inventory. Outstanding borrowings bear interest at the greater of the prime
rate or the Federal Funds Effective Rate, plus 1.25% (9.75% at December 31,
1997) and are secured by substantially all of the assets of the Group. The
agreement requires the Group to maintain certain financial ratios and
restricts the payment of dividends by SeedCo and partner distributions by
GreenCo. In addition, the agreement provides for an unused line of credit
fee of .25% per annum payable monthly. As of December 31, 1997, the Group
had available borrowings of approximately $5,564,179 under the revolving
credit agreement of which $4,490,179 was outstanding.
(6) LONG-TERM DEBT
Long-term debt at December 31 consists of the following:
<TABLE>
<CAPTION>
1997 1996
--------------------------------------------------------------------------------
<S> <C> <C>
Note payable to Heller Financial, Inc., due in
quarterly installments of $62,500 including
interest at 10% through March 2000;
collateralized by substantially all of the assets
of the Group $562,500 --
Note payable to General Motors Acceptance Corporation,
due in monthly installments of $490 including interest
at 11.95% through December 1999; collateralized by
vehicle 10,409 14,754
Note payable to Betja Rosoff -- 50,000
Note payable to Ford Motor Credit Company; due in monthly
installments of $492 including interest at 7.5% through
July 1997; collateralized by vehicle -- 3,359
--------------------------------------------------------------------------------
572,909 68,113
Less current maturities 254,895 7,705
--------------------------------------------------------------------------------
$318,014 60,408
--------------------------------------------------------------------------------
</TABLE>
The principal portion of the notes payable to Betja Rosoff, while due on
demand, was subordinated to repayments of borrowings under the revolving
credit agreement and therefore was reflected in the combined balance sheet
as a long-term liability (see note 5). Monthly interest payments at 10%
were permitted under the subordination agreement.
(Continued)
8
<PAGE>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Notes to Combined Financial Statements
- --------------------------------------------------------------------------------
(6) CONTINUED
Annual maturities of long-term debt for the years ending December 31 are as
follows:
1998 $254,895
1999 255,514
2000 62,500
--------------------------------------------------------------------------
$572,909
--------------------------------------------------------------------------
(7) SUBORDINATED DEBT
At December 31, 1997 and 1996, the Group had borrowings from its owners of
$120,925 and $969,399, respectively. Borrowings under the agreements with
such owners generally bear interest at 2% over prime (10.5% at December 31,
1997). As of December 31, 1997, borrowings under the agreements are
subordinated to repayments of the borrowings under the revolving credit
agreement and the note payable to Heller Financial, Inc. During 1997,
borrowings from one owner were retired in connection with the Group's
purchase of his ownership interest. In connection with the acquisition by
AgriBioTech, Inc., the balance of the subordinated borrowings were settled
in January 1998 with the consent of Heller Financial, Inc.
(8) LEASES
The Group leases its office and manufacturing facility and certain
equipment under operating leases expiring on various dates through
September 1999. The Group is also obligated under capital leases expiring
on various dates through June 2000 for certain delivery vehicles.
Approximate future minimum rentals under capital and operating leases with
initial or remaining terms of one year or more as of December 31, 1997, are
as follows:
<TABLE>
<CAPTION>
Capital Operating
--------------------------------------------------------------------------
<S> <C> <C>
1998 $22,103 640,101
1999 11,323 352,090
2000 10,343 33,276
2001 10,343 18,000
2002 6,725 9,000
--------------------------------------------------------------------------
Total minimum lease payments 60,837 1,052,467
Less portion representing interest 10,658 --
--------------------------------------------------------------------------
$50,179 1,052,467
--------------------------------------------------------------------------
</TABLE>
Rent expense was approximately $608,000 and $573,000 for the years ended
December 31, 1997 and 1996, respectively.
(Continued)
9
<PAGE>
SEED CORPORATION OF AMERICA, INC. AND
GREEN SEED COMPANY LIMITED PARTNERSHIP
Notes to Combined Financial Statements
- --------------------------------------------------------------------------------
(9) PENSION PLAN
The Group has a 401(k) profit sharing plan covering substantially all
employees and matches 25% of each employee's contribution up to 7% of
compensation. The Group's contributions to the plan for the years ended
December 31, 1997 and 1996, were approximately $23,900 and $30,300,
respectively.
(10) SUPPLEMENTAL CASH FLOW INFORMATION
The Group entered into three new capital leases during 1997 in the amount
of $45,762.
- --------------------------------------------------------------------------------
10
<PAGE>
AGRIBIOTECH, INC.
Pro Forma Combined Financial Information
(Unaudited)
The following pro forma combined summary of operations combines the results of
operations of AgriBioTech, Inc. ("ABT"), W-L Research, Inc. and Germain's, Inc.
(collectively "WL/Germain's"), E.F. Burlingham & Sons and Subsidiary
("Burlingham"), Olsen Fennell Seeds, Inc. ("Olsen Fennell"), Lofts Seed, Inc.
and Budd Seed, Inc. (collectively "Lofts"), Seed Corporation of America and
Green Seed Company Limited Partnership (collectively "SeedCo"), and Willamette
Seed Co. ("Willamette") as if all acquisitions occurred at the beginning of the
periods presented. The pro forma combined summary of operations reflects known
changes resulting from the acquisitions but does not reflect impacts of any
changes in operations, anticipated efficiencies and synergies from
consolidation.
The pro forma combined summary balance sheet reflects ABT's consolidated balance
sheet as of December 31, 1997 combined with the balance sheets of Lofts, SeedCo,
and Willamette as of December 31, 1997.
The business of these entities is subject to wide seasonal fluctuations and,
therefore, the results of operations for periods less than twelve months may not
be indicative of annual results. The pro forma adjustments are based on
preliminary estimates, available information, and certain assumptions that
management deems appropriate and may be revised as additional information
becomes available. The pro forma combined financial information does not
purport to represent what ABT's financial position or results of operations
would actually have been if such transactions had in fact occurred on those
dates and are not necessarily representative of ABT's financial position or
results of operation for any future period. The pro forma combined financial
information should be read in conjunction with the historical financial
statements of ABT, WL/Germain's, Burlingham, Olsen Fennell, Lofts, SeedCo, and
Willamette included herein or previously filed with the Securities and Exchange
Commission.
<PAGE>
AgriBioTech, Inc.
Pro Forma Combined Summary of Operations
Year ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Olsen
ABT (A) WL/Germain's (A) Burlingham (A) Fennell (A) Lofts (A) SeedCo (A)
----------- ---------------- -------------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net sales $65,904,058 2,671,772 31,040,752 28,566,907 74,696,000 39,130,541
Cost of sales 49,527,150 1,816,236 25,439,688 25,214,881 53,802,000 31,108,155
----------- --------- ---------- ---------- ---------- ----------
Gross profit 16,376,908 855,536 5,601,064 3,352,026 20,894,000 8,022,386
Operating expenses 17,971,813 1,014,557 3,383,987 3,444,793 16,291,530 7,813,290
----------- --------- ---------- ---------- ---------- ----------
Income (loss) from operations (1,594,905) (159,021) 2,217,077 (92,767) 4,602,470 209,096
Other income (expense) (1,118,860) 57,045 (7,314) (24,940) (1,514,000) (150,603)
----------- --------- ---------- ---------- ---------- ----------
Net earnings (loss) (2,713,765) (101,976) 2,209,763 (117,707) 3,088,470 58,493
========= ========== ========== ========== ==========
Discount and imputed dividends
on preferred stock 3,233,426
-----------
Net earnings (loss) attributable
to common stock $(5,947,191)
===========
Shares of common stock used in
computing earnings (loss) per
share:
Basic 15,549,184
Diluted 15,549,184
===========
Net earnings (loss) per common
share:
Basic $ (0.38)
Diluted (0.38)
===========
</TABLE>
<TABLE>
<CAPTION>
Pro forma
Willamette (A) Adjustments combined
-------------- ------------ ------------
<S> <C> <C> <C>
Net sales 41,813,972 (11,430,339) (F) 272,393,613
Cost of sales 33,965,669 (11,430,339) (F) 209,030,439
(413,001) (K)
---------- ----------- -----------
Gross profit 7,848,253 413,001 63,363,174
Operating expenses 7,493,665 3,069,758 (C) 57,554,150
(2,895,243) (J)
(34,000) (L)
---------- ----------- -----------
Income (loss) from operations 354,588 272,486 5,809,024
Other income (expense) 13,372 (4,832,423) (D) (7,577,723)
---------- ----------- -----------
Net earnings (loss) 367,960 (4,559,937) (1,768,699)
========== ===========
Discount and imputed dividends
on preferred stock 3,233,426
-----------
Net earnings (loss) attributable
to common stock (5,002,125)
Shares of common stock used in
computing earnings (loss) per
share:
Basic 2,942,593 (E) 18,491,777
Diluted 2,942,593 (E) 18,491,777
=========== ===========
Net earnings (loss) per common
share:
Basic (0.27)
Diluted (0.27)
===========
</TABLE>
See accompanying notes to pro forma combined financial information.
<PAGE>
AGRIBIOTECH, INC.
PRO FORMA COMBINED SUMMARY BALANCE SHEET
DECEMBER 31, 1997
(Unaudited)
<TABLE>
<CAPTION> Pro forma
ABT (G) Lofts (G) SeedCo(G) Williamette(G) Adjustments combined
------------ ----------- ------------ ------------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 8,235,871 144,197 9,906 564,248 (8,000,000) (I) 954,222
Accounts receivable 14,241,620 4,931,275 1,885,750 1,679,016 200,000 (I) 22,245,857
691,804) (H)
Inventories 34,167,138 14,991,981 6,186,885 7,636,612 442,844 (I) 63,425,460
Other 774,289 231,119 729,169 290,362 214,507 (I) 2,239,446
------------- ---------- --------- ---------- ---------- -----------
Total current assets 57,418,918 20,298,572 8,811,710 10,170,238 (7,834,453) 88,864,985
Property, plant and
equipment, net 21,713,245 332,749 230,903 4,380,163 13,260,922 (I) 39,907,982
Intangible assets, net of
accumulated amortization 26,018,264 - (2,005,037) 12,500 49,997,961 (I) 74,023,688
Investment in associated
entity, at equity 1,064,616 - - - - 1,064,616
Other 139,498 601,976 59,840 1,411,274 - 2,212,588
------------- ---------- --------- ---------- ---------- -----------
Total Assets $ 106,354,541 21,223,297 7,097,416 15,974,175 55,424,430 206,073,859
============= ========== ========= ========== ========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Short-term debt - 8,512,490 5,576,653 4,483,753 34,220,983 (I) 53,793,879
Current installments of
long-term obligations 1,565,952 - 393,147 149,888 - 2,108,987
Accounts payable 14,597,325 2,272,273 1,582,252 7,332,250 (691,804) (H) 25,092,296
Accrued liabilities 1,701,685 1,131,414 - 61,567 733,000 (I) 3,627,666
Amount due in connection
with acquisition 1,600,000 - - 1,600,000
------------ ---------- ---------- ---------- ----------- -----------
Total current liabilities 19,464,962 11,916,177 7,552,052 12,027,458 34,262,179 85,222,828
Long-term obligation, excluding
current installments 5,274,206 6,347,248 350,866 1,210,231 2,152,607 (I) 15,335,158
Deferred income taxes 1,018,369 - - - 6,900,500 (I) 4,628,045
(3,290,824)(M)
------------ ---------- --------- ---------- ---------- -----------
Total liabilities 25,757,537 18,263,425 7,902,918 13,237,689 40,024,462 105,186,031
------------ ---------- --------- ---------- ---------- -----------
Stockholders' equity:
Preferred stock 1 - - - - 1
Common stock 28,822 922,506 50,500 495,000 (1,538,036)(I) 30,822
2,000
Capital in excess of par value 93,601,742 - - - - (I) 110,599,742
16,998,000 (I)
Accumulated (deficit) (13,033,561) 1,967,366 (856,002) 2,241,486 (3,352,850)(I) (9,742,737)
3,290,824 (M)
------------ ---------- --------- ---------- ---------- -----------
Total stockholders'
equity 80,597,004 2,959,872 (805,502) 2,736,486 15,399,968 100,887,828
------------ ---------- --------- ---------- ---------- -----------
Total liabilities and
stockholders' equity $106,354,541 21,223,297 7,097,416 15,974,175 55,424,430 206,073,859
============ ========== ========= ========== ========== ===========
</TABLE>
See accompanying notes to pro forma combined financial information.
<PAGE>
AGRIBIOTECH, INC.
PRO FORMA COMBINED SUMMARY OF OPERATIONS
SIX-MONTH PERIOD ENDED DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
ABT (B) Lofts (B) SeedCo (B) Willamette (B) Adjustments
------------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Net sales $ 63,814,861 39,022,000 16,401,233 17,662,735 (4,209,846) (F)
Cost of sales 51,586,043 28,063,000 12,693,089 13,980,373 (4,209,846) (F)
26,152 (K)
------------- ----------- ----------- ------------ ----------
Gross profit 12,228,818 10,959,000 3,708,144 3,682,362 (26,152)
Operating expenses 12,678,943 10,152,000 4,048,483 3,278,362 1,327,006 (C)
(1,311,451) (J)
(703,000) (L)
------------- ----------- ----------- ------------ ----------
Income (loss) from operations (450,125) 807,000 (340,339) 404,000 667,292
Other income (expense) (158,355) (845,757) 295,005 - (1,832,753) (D)
------------- ----------- ----------- ------------ ----------
Net earnings (loss) (608,480) (38,757) (45,334) 404,000 (1,165,460)
=========== =========== ============ ==========
Discount and imputed dividends on
preferred stock 53,436
-------------
Net earnings (loss)
attibutable to common stock $ (661,916)
=============
Shares of common stock used in
computing earnings (loss) per share:
Basic 25,905,412 2,000,000 (E)
Diluted 25,905,412 2,000,000 (E)
============= ==========
Net earnings (loss) per common
share:
Basic $ (0.03)
Diluted (0.03)
=============
</TABLE>
<TABLE>
<CAPTION>
Pro forma
combined
-----------
<S> <C>
Net sales 132,690,983
Cost of sales 102,138,811
-----------
Gross profit 30,552,172
Operating expenses 29,631,101
-----------
Income (loss) from operations 921,071
Other income (expense) (2,375,103)
-----------
Net earnings (loss) (1,454,031)
Discount and imputed dividends on
preferred stock 53,436
-----------
Net earnings (loss)
attibutable to common stock (1,507,467)
===========
Shares of common stock used in
computing earnings (loss) per share:
Basic 27,905,412
Diluted 27,905,412
==========
Net earnings (loss) per
common share:
Basic (0.05)
Diluted (0.05)
===========
</TABLE>
See accompanying notes to pro forma combined financial information.
<PAGE>
AGRIBIOTECH, INC.
Notes to Pro Forma Combined Financial Information
(Unaudited)
(A) The year ended June 30, 1997 for ABT includes the operations of WL/Germain's
for the period from September 1, 1996 through June 30, 1997, the operations
of Burlingham for the period from April 1, 1997 through June 30, 1997, and
the operations of Olsen Fennell for the period from June 1, 1997 through
June 30, 1997. The amounts under the WL/Germain's column are for the two-
month period ended August 31, 1996. The amounts under the Burlingham column
are for the nine-month period ended March 31, 1997. The amounts under the
Olsen Fennell column are for the eleven-month period ended May 31, 1997. The
amounts under the Lofts, SeedCo, and Willamette columns are for the twelve-
month period ended June 30, 1997. Income taxes for individual companies are
not presented as they would be offset by consolidated net operating loss
carryforwards.
(B) The six-month period ended December 31, 1997 for ABT includes the operations
of WL/Germain's, Burlingham, and Olsen Fennell for the entire period. The
amounts under the Lofts, SeedCo, and Willamette columns are for the six-
month period ended December 31, 1997. Income taxes for individual companies
are not presented as they would be offset by consolidated net operating loss
carryforwards.
(C) To reflect depreciation of property, plant and equipment and amortization of
intangible assets based on market value adjustments in connection with
applying purchase accounting. Intangible assets resulting from the
application of purchase accounting and amortization periods include goodwill
of $38.7 million (10 to 40 years, with a weighted average live of 34.9
years), germplasm of $8.5 million (20 to 40 years), trademarks and
tradenames of $1.4 million (15 to 40 years), and covenants not to compete of
$1.4 million (7 to 8 years).
(D) To reflect reduction of interest income earned and additional interest
expense for the cash purchase price of the acquisitions. The pro forma
amounts assume that the Company would use $8 million of its cash balance at
December 31, 1997 for payments required to be made in the acquisitions and
the remainder of payments would be obtained through the Company's existing
or similar short-term credit facilities. Interest expense was computed using
an interest rate of 8.5%.
(E) To reflect shares of ABT common stock issued in connection with the
acquisitions as if they had been outstanding for the entire period.
(F) To eliminate intercompany sales.
<PAGE>
(G) The consolidated balance sheet of ABT as of December 31, 1997 includes the
accounts of WL/Germain's, Burlingham, and Olsen Fennell. The amounts under
the Lofts, SeedCo, and Willamette columns reflect their accounts as of
December 31, 1997.
(H) To eliminate intercompany balances.
(I) To reflect the application of purchase accounting to the Lofts, SeedCo, and
Willamette acquisitions. The total purchase price of $58.2 million is
anticipated to be paid through the issuance of approximately 2,000,000
shares of the Company's common stock valued at approximately $17.0 million
and cash of approximately $41.2 million.
(J) Prospective reductions in compensation of former owners of acquired
entities, employee benefits, management fees, and property rent resulting
from employment agreements, property purchased directly from former owners
and other contractual arrangements entered into in connection with
acquisitions.
(K) Impacts of using the first-in, first-out method of accounting for inventory
accounted for using the last-in, first-out method prior to acquisition.
(L) Amounts associated with items not acquired in acquisition. Also includes
acquisition costs expensed by acquired entities that are not applicable to
ongoing operations.
(M) To eliminate ABT's existing valuation allowance recorded against deferred
tax assets as a result of deferred tax liabilities recognized in purchase
accounting directly attributable to the acquisitions. Such amount is
excluded from the pro forma combined summary of operations but is expected
to be recognized by ABT in its results of operations within the next 12
months.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AgriBioTech, Inc.
(Registrant)
/s/ Henry A. Ingalls
--------------------
Henry A. Ingalls
Date: March 9, 1998
