<PAGE>
As filed with the Securities and Exchange Commission on August 14, 1998
Registration No. 333-61097
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
Amendment No. 1 to
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AGRIBIOTECH, INC.
--------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada 85-0325742
- ----------------------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
120 Corporate Park Drive
Henderson, Nevada 89014
(702) 566-2440
- --------------------------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
Dr. Johnny R. Thomas, Chairman of the Board
AgriBioTech, Inc.
120 Corporate Park Drive
Henderson, Nevada 89014
(702) 566-2440
-------------------------------------------------------
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
Copies to:
Elliot H. Lutzker, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158
Tel: (212) 687-3860 Fax: (212) 949-7052
Approximate date of commencement of proposed sale to the public: from time
to time after the Registration Statement becomes effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
<PAGE>
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Proposed Proposed
Title of Each Maximum Maximum
Class of Offering Aggregate
Securities to Amount to be Price Offering Amount of
be Registered Registered Per Share (1) Price(1) Registration Fee
------------- ---------- ------------- -------- ----------------
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 3,000,000 Shs.(2) $15.5625 $46,687,500 $13,772.81
- -------------------------------------------------------------------------------------------
Total Registration fee $13,772.81
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended,
based upon the reported closing sale price of the Common Stock of the
Registrant on the Nasdaq National Market of $15.5625 per share on August
4, 1998.
(2) Issuable as part or all of the consideration to be paid in connection with
future direct or indirect acquisitions of other businesses, properties,
assets, or securities in business combination transactions in accordance
with Rule 415(a)(1)(viii) of Regulation C under the Securities Act of
1933, as amended (the "Securities Act"), or otherwise permitted under the
Securities Act.
-ii-
<PAGE>
AGRIBIOTECH, INC.
CROSS REFERENCE SHEET PURSUANT TO ITEM 501(b) OF REGULATION SK
SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY ITEMS OF FORM S-4
<TABLE>
<CAPTION>
ITEM NUMBER FORM S-4 CAPTION LOCATION IN PROSPECTUS
- ----------- ---------------- ----------------------
<S> <C> <C>
A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement and Facing Page; Outside Front
Outside Front Cover Page of Prospectus. Cover Page of Prospectus;
Available Information.
2. Inside Front Cover and Outside Back Cover Inside Front of Outside Back
Pages of Prospectus; Cover Page of Prospectus.
3. Risk Factors; Ratio of Earnings to Fixed Outside Front Cover Page of
Charges and Other Information. Prospectus; The Company;
Acquisitions, Description of
Other Indebtedness, Recent
Developments and Web Site
Disclosures; Risk Factors.
4. Terms of the Transaction. Not Applicable.*
5. Pro Forma Financial Information. Not Applicable.*
6. Material Contacts with the Company Being Not Applicable.*
Acquired.
7. Additional Information Required for Not Applicable.*
Reoffering by Persons and Parties Deemed
to be Underwriters.
8. Interests of Named Experts and Counsel. Legal Matters.
9. Disclosure of Commission Position on Commission Position on
Indemnification for Securities Act Indemnification for Securities
Liabilities. Act Liabilities.
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3 Registrants. Outside Front Cover of
Prospectus; The Company;
Risk Factors; Acquisitions,
Description of Other Indebtedness,
Recent Developments and
Web Site Disclosures; Information
Incorporated by Reference
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
ITEM NUMBER FORM S-4 CAPTION LOCATION IN PROSPECTUS
- ----------- ---------------- ----------------------
<S> <C> <C>
11. Incorporation of Certain Information by Information Incorporated
Reference. by Reference.
12. Information with Respect to S-2 or S-3 Not Applicable.
Registrants.
13. Incorporation of Certain Information by Not Applicable.
Reference.
14. Information with Respect to Registrants Not Applicable.
Other than S-3 or S-2 Registrants.
C. INFORMATION ABOUT THE COMPANY BEING
ACQUIRED
15. Information with Respect to S-3 Companies. Not Applicable.
16. Information with Respect to S-3 or S-2 Not Applicable.
Companies.
17. Information with Respect to Companies Not Applicable.
Other than S-3 or S-2 Companies.
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents or Not Applicable.
Authorizations are to be Solicited.
19. Information if Proxies, Consents or Not Applicable.
Authorizations are not to be Solicited or in
an Exchange Offer.
</TABLE>
_________________________
* Not applicable in connection with the filing of this Registration Statement.
Information, however, may be included in subsequent post-effective amendments
filed under certain circumstances pursuant to General Instruction H of Form
S-4 or in one or more prospectus supplements filed pursuant to Rule 424(b)(2)
under the Securities Act of 1933, as amended, or otherwise incorporated by
reference from documents subsequently filed by the Company under the
Securities Exchange Act of 1934, as amended.
-iv-
<PAGE>
SUBJECT TO COMPLETION, AUGUST 14, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE
PROSPECTUS
AGRIBIOTECH, INC.
3,000,000 Shares of Common Stock
This Prospectus pertains to 3,000,000 shares (the "Shares") of common stock,
$.001 par value per share (the "Common Stock"), of AgriBioTech, Inc., a Nevada
corporation ("ABT" or the "Company"). The Company expects that the Shares will
be offered and issued by the Company from time to time as all or part of the
consideration paid in connection with future direct or indirect acquisitions
(the "Acquisitions") of other businesses, properties, assets, or securities in
business combination transactions in accordance with Rule 415(a)(1)(viii) of
Regulation C under the Securities Act of 1933, as amended (the "Securities
Act"), or otherwise permitted under the Securities Act.
The terms upon which the Company will issue the Shares in the Acquisitions
will be determined through negotiations with the security holders or principal
owners of the businesses whose securities or assets are to be acquired. The
Shares that are issued will be valued at prices reasonably related to market
prices for the Common Stock prevailing either at the time an acquisition
agreement is negotiated, executed or consummated.
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 17.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST 14, 1998
<PAGE>
This Prospectus, as amended or supplemented if appropriate, also relates to
the offer for sale or other distribution of Shares by persons (the "Selling
Stockholders") who will acquire such Shares in the Acquisitions. Such Shares may
be sold or distributed from time to time by or for the account of the Selling
Stockholders through underwriters or dealers, through brokers or other agents,
or directly to one or more purchasers on the Nasdaq National Market ("Nasdaq"),
in privately negotiated transactions or in any combination thereof, at the
market price prevailing at the time of the sale, at a price related to such
prevailing market price or at a negotiated price. This Prospectus also may be
used, with the Company's prior consent, by donees of the Selling Stockholders,
or by other persons acquiring the Shares who wish to offer and sell such Shares
under circumstances requiring or making desirable its use.
The Company will receive no portion of the proceeds from sales of the Shares
by the Selling Stockholders. The Company will bear all expenses incident to the
Registration of the Shares. The Selling Stockholders will pay all selling
expenses incurred by them in connection with their sales of the Shares. See
"Selling Stockholders" and "Plan of Distribution."
The Common Stock is traded on the Nasdaq National Market under the symbol
"ABTX." On August 13, 1998, the closing sale price of the Common Stock as
reported on the Nasdaq National Market was $17.50 per share.
Commencing on the effective date of this Prospectus, the Company may from
time to time, make original equity issuances of the Shares to the Selling
Stockholders and, subject to the terms of any lock-up agreements between the
Company and the Selling Stockholders, the Selling Stockholders may, from time to
time, sell transfer or pledge the Shares directly to purchasers, transferees or
pledgees, or may offer the shares through agents, brokers, dealers or
underwriters, who may receive compensation in the form of commissions or
discounts from the Selling Stockholders or purchasers of the Shares. The
Selling Shareholders may sell the Shares on the Nasdaq National Market, in
privately negotiated transactions or in any combination thereof, at the market
price prevailing at the time of sale, a price related to such prevailing market
price or at a negotiated price.
Any of the Selling Stockholders or any person who is an affiliate of the
Selling Stockholders who publicly offers or sells securities of the Company
acquired in an Acquisition may be deemed to be an underwriter pursuant to Rule
145(c) under and Section 2(11) of the Securities Act. Accordingly, the Selling
Stockholders must satisfy the prospectus delivery and other requirements of the
Securities Act prior to making any sales of the Shares, unless such sales are
made in accordance with the provisions of Rule 144, or the Selling Stockholder
does not become an affiliate of the Company and either holds the shares for one
year, provided that the Company is in compliance with the public information
requirements of Rule 144(c), or holds the Shares for two years.
Any brokers, dealers or agents that participate in sales of the Shares by
the Selling Stockholders may be deemed to be underwriters under Section 2(11) of
the Securities Act, and
-2-
<PAGE>
any commissions, discounts and/or other compensation received by them on the
sale or resale of such Shares may be deemed to be underwriting compensation
under the Securities Act.
The Company has not authorized any person to give any information or to make
any representations in connection with original equity issuances made by the
Company in connection with the Acquisitions or in connection with sales of the
shares by the Selling Stockholders other than those contained in this
Prospectus. You should not rely on any information or representations in
connection with such sales other than the information or representations in this
Prospectus. The information in this Prospectus is correct as of the date of
this Prospectus. You should not assume that there has been no change in the
affairs of the Company since the date of this Prospectus or that the information
contained in this Prospectus is correct as of any time after its date. This
Prospectus is not an offer to sell or a solicitation of an offer to buy the
Shares in any circumstances in which such an offer or solicitation is unlawful.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the
Exchange Act, the Company files reports and other information with the
Securities and Exchange Commission (the "Commission"). You may inspect and copy
reports, proxy statements and other information filed by the Company at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional offices located at
the Northeast Regional Office, Seven World Trade Center, New York, New York
10048, and at the Midwest Regional Office, 500 West Madison Street, Chicago,
Illinois 60611-2511. You may also obtain copies of such material at prescribed
rates, by writing to the Commission, Public Reference Room, 450 Fifth Street,
N.W., Washington, D.C. 20549 or on the Commission's Worldwide Web site at
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-4 (the "Registration Statement") under the Securities Act with respect to the
Shares offered hereby. This Prospectus, filed as part of the Registration
Statement, does not contain all the information set forth in the Registration
Statement and the exhibits thereto, certain portions of which have been omitted
as permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Shares, you should refer to the
Registration Statement and the exhibits thereto or incorporated by reference
therein. Additional information concerning the Company may be found on the
Company's Worldwide Web site at http://www.agribiotech.com. You may inspect the
Registration Statement, including such exhibits, without charge at the public
reference facilities maintained by the Commission, at the Commission's regional
offices at the addresses stated above and on the Commission's Web site. You may
also obtain copies of these documents, at prescribed rates, by writing to the
Commission's Public Reference Room at the address set forth above.
-3-
<PAGE>
INFORMATION INCORPORATED BY REFERENCE
The Company has filed the following documents with the Commission, all of
which are incorporated by reference into and made a part of this Prospectus:
(i) the Company's Annual Report on Form 10-KSB (as amended on October
24, 1997, February 17, 1998 and August 11, 1998) for the fiscal
year ended June 30, 1997 ("Form 10-KSB");
(ii) the Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1996 (as amended on July 12, 1996),
September 30, 1997 (as amended on February 17,1998 and August 11,
1998), December 31, 1997 (as amended on February 17,1998 and
August 11, 1998) and March 31, 1998 (as amended on August 10,
1998) ("Forms 10-Q");
(iii) the Company's Current Reports on Form 8-K for October 30, 1996 (as
amended on January 13, 1997, February 17, 1998 and August 11,
1998), May 15, 1997 (as amended on July 29, 1997, February 17,
1998 and August 11, 1998), June 18, 1997, August 22, 1997 (as
amended on September 26, 1997, February 17, 1998 and August 11,
1998), October 22, 1997, December 1, 1997, January 6, 1998 (as
amended on March 10, 1998, March 30, 1998 and August 11, 1998),
January 9, 1998 (as amended on March 10, 1998, March 30, 1998 and
August 11, 1998), January 26, 1998, (as amended on March 30, 1998
and August 11, 1998), March 31, 1998, April 8, 1998, May 22, 1998,
June 23, 1998 and August 11, 1998 ("Forms 8-K");
(iv) the description of the Company's Common Stock, $.001 par value,
contained in the Company's Registration Statement on Form 8-A
(File No. 0-19352), filed July 11, 1995, pursuant to Section 12(g)
of the Exchange Act including any amendment or report filed for
the purpose of updating such information;
(v) the Company's Proxy Statement dated January 20, 1998 for its
Annual Meeting held on February 23, 1998; and
(vi) all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to the filing of a post-effective amendment
that indicates that all the securities offered hereby have been
sold or that deregisters all the securities remaining unsold.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein may be modified or superseded for purposes of
this Prospectus by a statement contained in this Prospectus or in any other
document that is filed after the date of this
-4-
<PAGE>
Prospectus that also is or is deemed to be incorporated by reference herein.
Any statement that is so modified or superseded shall not be deemed to
constitute a part of this Prospectus, except as modified or superseded.
The making of a modifying or superseding statement shall not be deemed an
admission that the modified or superseded statement, when made, constituted a
misrepresentation, an untrue statement of a material fact or an omission to
state a material fact that is required to be stated or that is necessary to make
any statement not misleading in light of the circumstances in which it was made.
Copies of all documents that are incorporated by reference herein (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents or into this Prospectus) will be
provided without charge to each person, including any beneficial owner, to whom
this Prospectus is delivered, upon a written or oral request to AgriBioTech,
Inc., Attention: Secretary, 120 Corporate Park Drive, Henderson, NV 89014;
telephone number (702) 566-2440.
-5-
<PAGE>
THE COMPANY
ABT is the largest agricultural seed company in the United States that
specializes in developing, processing, packaging and distributing varieties of
forage and cool season turfgrass seeds. Since January 1, 1995, the Company has
completed 29 acquisitions and has executed letters of intent to acquire two
additional companies (the "Pending Acquisitions"). The Company has grown from
net sales of $29,000 in fiscal 1994 to pro forma net sales of approximately $407
million for the 12 month period June 30, 1997, including the completed
acquisitions and the Pending Acquisitions. The Company's vertically integrated
forage and turfgrass seed operations include traditional genetic breeding and
research and development programs, seed processing plants that clean, condition
and package seed grown under contract for ABT and national and international
distribution and sales networks. The Company's principal executive offices are
located at 120 Corporate Park Drive, Henderson, Nevada 89014, and its telephone
number is (702) 566-2440.
-6-
<PAGE>
ACQUISITIONS, DESCRIPTION OF OTHER INDEBTEDNESS,
RECENT DEVELOPMENTS AND WEB SITE DISCLOSURES
ACQUISITIONS
Since the Company commenced its acquisition program in January 1995, it has
acquired all or part of 29 seed companies and has signed agreements to acquire
two aditional seed businesses, all as described in the tables below.
<TABLE>
<CAPTION>
APPROXIMATE
REVENUE FOR
LAST YEAR APPROXIMATE
PRIOR TO PURCHASE
AGRIBIOTECH EFFECTIVE ACQUISITION PRICE
ACQUISITIONS(1) DATE (IN MILLIONS) (IN MILLIONS) DESCRIPTION OF BUSINESS
--------------- --------- ------------- ------------- ------------------------
<C> <C> <C> <C> <S>
Seed Resource............... Jan 95 $ 1.6 $ 1.1 Distribution, production
and research in Texas of
proprietary sorghum,
sudan grass, ryes &
millets in the U.S.,
Mexico and Europe.
Scott Seed Company.......... Mar 95 $ 5.5 $ 1.5 Distribution of
proprietary alfalfa
varieties, clover
varieties, pasture
mixes, turfgrass
varieties and corn
hybrids in Kentucky and
Southern Indiana.
Hobart Seed Company......... Apr 95 $ 3.3 $ 1.7 Distribution of alfalfa,
field seeds and lawn and
garden supplies in Okla-
homa, Texas and Kansas.
Sphar Seed Company.......... July 95 $ 2.1 $ 0.3 Markets proprietary al-
falfa varieties, clover
varieties, pasture mix-
es, turfgrass varieties
and corn hybrids
throughout Kentucky and
Southern Indiana.
Halsey Seed Company......... July 95 $ 1.2 $ 1.1 Distribution of alfalfa,
field seeds and turf
seeds in New York and
New England.
Arnold Thomas Seed Service.. Oct 95 $ 2.3 $ 0.9 Production and seed
cleaning facilities in
Washington with access
to grass, clover and
alfalfa seed production
areas in the Northwest.
Clark Seeds................. Oct 95 $ 4.1 $ 2.2 Distribution, production
and seed cleaning facil-
ities in Idaho and Ore-
gon.
Doug Conlee Seed............ Jan 96 $ 1.0 $ 0.6 Distribution of forages,
proprietary sorghum and
sudan grass germplasm
from Texas.
Beachley-Hardy Seed......... Feb 96 $ 9.7 $ 4.1 Distribution of proprie-
tary forage and
turfgrass products,
Roundup-ready soybeans
and high-oil corn in the
Northeast.
Michigan Hybrid Seed........ Jun 96 Nil Nil Distribution of proprie-
tary alfalfa varieties
and hybrid seed corn in
Michigan.
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
REVENUE FOR
LAST YEAR APPROXIMATE
PRIOR TO PURCHASE
AGRIBIOTECH EFFECTIVE ACQUISITION PRICE
ACQUISITIONS(1) DATE (IN MILLIONS) (IN MILLIONS) DESCRIPTION OF BUSINESS
--------------- --------- ------------- ------------- ------------------------
<C> <C> <C> <C> <S>
W-L Research and Germain's... Sept 96 $22.2 $16.2 W-L is a leading alfalfa
research company. See
"Description of
Business--Research and
Development" in the Form
10-KSB. This company has
a strong base of
franchised distributors
in the U.S. and several
foreign countries.
Germain's is one of the
oldest, best recognized
regional seed companies
in the Western U.S. with
more people serving more
Western States than any
other forage or
turfgrass seed company.
The 127-year-old company
markets hybrid corn,
alfalfa, turfgrass,
clover, pasture grass
and clover crop seed in
the Western U.S. &
Mexico.
E.F. Burlingham & Sons(2).... Apr 97 $35.6 $ 9.6 Distribution, production
and research in Oregon
of turfgrass seed with
many varieties scoring
as leading performers in
official national turf
evaluation tests.
Sexauer Seed................. Apr 97 $10.3 $ 3.2 Distribution and produc-
tion of forages in South
Dakota with 106 years of
history.
Olsen Fennell Seeds.......... Jun 97 $28.6 $15.2 Distribution and
production in Oregon
with good germplasm in
turf seeds and non-
alfalfa forages.
LaCrosse Seed................ Jul 97 $ 9.4 $ 7.0 Distribution of alfalfa,
field seeds and
turfgrass seeds in the
upper Midwest.
Lofts Seed(3)................ Jan 98 $74.7 $33.1 Distribution, production
and research company,
based in North Carolina.
Lofts Seed is a premier
turfgrass seed company
with national and
international sales.
Seed Corporation of America.. Jan 98 $39.8 $ 9.2 Distribution of forage
and turfgrass seed
nationwide.
Discount Farm Center......... Feb 98 $ 5.9 $ 3.1 Distribution of forage
small grains, other for-
ages and birdseed in the
Midwest.
Kinder Seed.................. Feb 98 $ 3.1 $ 3.5 Distribution of forages
and turfgrasses in the
Northeast.
Las Vegas Fertilizer......... Jan 98 $16.0 $12.4 Distribution of
turfgrass to golf
courses and lawn and
garden products to home
improvement centers,
mass merchandisers and
nurseries in Nevada,
California, Utah, Idaho
and Wyoming.
Ohio Seed Company............ Mar 98 $ 9.3 $ 3.8 Distribution of forages
and turfgrasses in Ohio
and Michigan.
Van Dyke Seed................ Jan 98 $10.5 $ 8.2 Distribution and produc-
tion of forage crops in
Oregon.
Zajac Performance Seed....... Jan 98 $ 8.5 $ 6.6 Distribution and
production of private
label proprietary
turfgrass varieties to
independent wholesale
distributors in New
Jersey and Oregon.
</TABLE>
-8-
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
REVENUE FOR
LAST YEAR APPROXIMATE
PRIOR TO PURCHASE
AGRIBIOTECH EFFECTIVE ACQUISITION PRICE
ACQUISITIONS(1) DATE (IN MILLIONS) (IN MILLIONS) DESCRIPTION OF BUSINESS
--------------- --------- ------------- ------------- ------------------------
<C> <C> <C> <C> <S>
Peterson Seed Company...... May 98 $11.8 $ 6.3 Distribution of alfalfa,
clovers, turf mixes and
other forages.
W-D Seed Growers Idaho..... June 98 $14.2 $12.1 Production and seed
cleaning facilities in
Idaho and Nevada.
Fine Lawn Research......... July 98 $ 5.1 $ 2.7 A leading production
company; owns several
proprietary turf
varieties that exhibit
outstanding performance.
Distribution of
proprietary rye grass
and turf type tall
fescue to professional
users.
Geo. W. Hill of Indiana.... July 98 $ 4.9 $ 1.5 Distribution of alfalfa,
clovers and turf mixes
to farmers, homeowners
and landscapers; will
significantly strengthen
ABT's midwest
distribution base.
Geo. W. Hill & Co.......... July 98 $20.8 $ 6.3 Distribution of turf
mixes, perennial rye
grass, turf type tall
fescue to homeowners and
landscapers; also lawn
and garden supplies,
fertilizers and
chemicals to retail
stores and nurseries.
Arrowhead Enterprises, Inc.
(d/b/a J&M Seed Company).. August 98 $ 9.2 $ 3.4 Distribution of alfalfa,
clovers, turf mixes,
other forages, and
reclamation seed
products. The Company
believes this to be an
excellent complement to
the existing
distribution base in
Kentucky and West
Virginia.
</TABLE>
- --------
(1) Other than as described in notes (2) and (3) below, during the last five
years none of the Company's significant acquisitions has been involved in
a significant corporate transaction including, but not limited to (a) any
bankruptcy, receivership or similar proceedings or (b) any material
reclassification, merger, consolidation, or purchase or sale of a
significant amount of assets not in the ordinary course of business.
(2) In May 1994, Douglas Pope and Greg McCarthy, the principal shareholders of
E.F. Burlingham, who sold such company to ABT, purchased the Company from
George Burlingham.
(3) Includes Lofts Seed Inc. and Budd Seed, Inc., which are companies under
common control. The stockholders of Budd Seed, Inc. acquired Lofts Seed
Inc. on June 28, 1996.
-9-
<PAGE>
The following two seed business acquisitions are pending, and are both
expected to be completed in August 1998.
<TABLE>
<CAPTION>
APPROXIMATE
REVENUE FOR
LAST YEAR APPROXIMATE
ANTICIPATED PRIOR TO PURCHASE
AGRIBIOTECH EFFECTIVE ACQUISITION PRICE
ACQUISITIONS DATE (IN MILLIONS) (IN MILLIONS) DESCRIPTION OF BUSINESS
------------ ----------- ------------- ------------- ------------------------
<C> <C> <C> <C> <S>
Willamette Seed Company.. August 98 $41.8 $13.6(1) Production and
distribution of
turfgrass seed to
wholesale distributors
in the U.S. and
internationally; also
distribution of
fertilizer to farmers.
Oseco.................... August 98 $ 9.4 $ 4.5(1) Distribution of alfalfa,
turf mixes, bluegrass,
ryegrass, forage grasses
and clovers to farmer
dealers, elevators,
nurseries and
landscapers. Also owns a
production facility for
cleaning, processing of
alfalfa and a seed
coating plant.
</TABLE>
- --------
(1) Estimated based on signed agreements.
DESCRIPTION OF OTHER INDEBTEDNESS
Revolving Credit Facility
The Company entered into a Revolving Credit Facility (the "Revolving Credit
Facility") pursuant to a Loan and Security Agreement dated as of June 23,
1998, with BankAmerica Business Credit, Inc. ("BABC"), as agent, and Deutsche
Financial Services Corporation ("DFSC") as administrative agent and certain
financial institutions, as lenders, including BABC and DFSC. Under the
Revolving Credit Facility, the Company has a maximum borrowing availability of
up to $100 million (subject to a borrowing base computation and compliance
with certain financial covenants), and may borrow, repay and reborrow
revolving loans and request BABC as agent to cause letters of credit to be
issued for the account of the Company. The Revolving Credit Facility expires
on June 23, 2001. As of August 13, 1998, the Company had borrowed
approximately $53 million. The proceeds of the Revolving Credit Facility are
used for working capital and other general corporate purposes.
The Company may elect to borrow revolving loans under the Revolving Credit
Facility as "LIBOR Loans" or "Base Rate Loans." Base Rate Loans are loans that
bear interest at a variable rate equal to the "reference rate" of Bank of
America National Trust and Savings and Association (the "Bank") plus 1.125%
and LIBOR Loans bear interest at a variable rate of interest equal to the
applicable "London Interbank Offered Rate" of the Bank plus 2.375% for a one,
two or three month interest period, as selected by the Company. The variable
rate of interest averaged 8.4% per annum at August 13, 1998.
The Revolving Credit Facility is secured by collateral consisting of
substantially all the assets (excluding fixed assets and real property) of the
Company and its subsidiaries whether now owned or existing or hereafter
acquired in which a security interest may lawfully be granted, including,
without limitation, accounts receivable, inventory, intellectual property, the
proceeds therefrom and all of the capital stock of the Company's subsidiaries.
Each of the Company's domestic subsidiaries is a co-borrower under the
Revolving Credit Facility and new acquisitions are required to become co-
borrowers by signing a joinder agreement. The terms of the Revolving Credit
Facility contain operating and financial covenants, including, without
limitation, requirements to maintain minimum ratios of cash flow to debt
service and a maximum ratio of total debt to equity. Standard & Poor's
assigned its single "B" rating to the Revolving Credit Facility and a single
"B" corporate credit rating to the Company.
Bridge Facility
The Company has entered into a bridge loan facility (the "Bridge Facility")
pursuant to a Bridge Loan Agreement dated as of July 3, 1998 with Deutsche
Bank AG, New York Branch, which provided the Company
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with $15 million of unsecured bridge financing in connection with certain
pending acquisitions. The Bridge Facility matures on January 4, 1999 and
consists of Base Rate Loans and Euro-Dollar Rate Loans. The interest rate is
3.5% above the Base Rate or the Euro-Dollar Rate prior to September 7, 1998,
5.5% per annum above such rates from then to November 7, 1998 and 7.5% above
such rates thereafter, and currently bears interest at a variable rate equal to
9.125% per annum.
Long-Term Debt
The Company currently has approximately $10.6 million of long-term debt
secured by real estate and equipment. Such debt is repayable over periods of
up to 10 years and bears interest at rates ranging from 7.3% to 10.0% per
annum.
RECENT DEVELOPMENTS
Biotechnology Alliances
The Company's first biotechnology alliance, announced in March 1998, is its
agreement to fund research by the Samuel Roberts Noble Foundation ("Noble") to
use transformed plants to develop alfalfa with improved digestibility
utilizing genes developed by Noble, a not-for-profit research institute
located in Oklahoma. Digestibility is one of the major measures of hay quality
and an important determinant of the price per ton.
On July 24, 1998, the Company announced it had signed a letter of intent
with Global Agro, Inc. ("Global Agro") to enter into a biotechnology license
agreement and an equity stake agreement. As an equity owner in Global Agro,
the Company will have worldwide rights, exclusive in certain crops, to
technology at Global Agro, including rights to technology from The Salk
Institute for Biological Studies. Global Agro has an agreement with The Salk
Institute which will permit the Company to commercialize and license specific
proprietary technologies developed by The Salk Institute's Plant Biology
Laboratory. The Salk Institute is an equity owner of Global Agro. The
Company's worldwide exclusive technology rights are for all turfgrass species
and for all forage grasses and certain legumes.
On July 27, 1998, the Company announced that it had signed a letter of
intent with FFR Cooperative ("FFR") to form a long-term, worldwide research
alliance to develop and commercialize improved proprietary seed products. FFR
was founded approximately 40 years ago by several regional farmer owned
cooperatives to breed genetically improved varieties of a number of crop
species. FFR has a well established breeding program and germplasm base in a
number of important forage species, including orchard grass, red clover, tall
fescue and timothy and has breeding programs in alfalfa, corn, soybeans, and
wheat. Under the agreement, the Company will market under private label new
genetically improved varieties of orchard grass, red clover, tall fescue and
timothy developed by FFR through the Company's worldwide distribution system.
FFR members and affiliates will be the only other distributors of FFR
varieties in those species. The agreement also provides for the Company to
introduce genes into the forage germplasm using biotechnology tools and to
market such improved products through the distribution system of the regional
cooperative owners of FFR. See "Web Site Disclosures" below.
WEB SITE DISCLOSURES
In the following paragraphs, the Company is disclosing information discussed
in the Company's Web Site, including forward-looking information, that is not
otherwise set forth in this Prospectus or incorporated by reference herein.
Forward-looking and other statements in this section, as well as elsewhere in
this Prospectus, reflect the good faith judgment of the Company's management,
and were solely based on facts and factors known by the Company at the time
such statements were made. Except where otherwise indicated, the following
statements in this section have not been updated since they were made.
Forward-looking statements are inherently subject to risks and uncertainties,
and actual results and outcomes may differ materially from the results and
outcomes discussed in the forward-looking statements. The risks and
uncertainties that could cause or contribute to such differences in results
and outcome include without limitation, the Company's historical lack of
profitability, need to manage its growth, intense competition in the seed
industry, seasonality of quarterly results, as well as those factors discussed
under "Risk Factors" and elsewhere in this Prospectus and in any documents
that are incorporated into this Prospectus by reference.
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AgriBioTech Mission Statement. "To become the premier forage and turfgrass
seed company in the world, while also providing a full service seed product
line. AgriBioTech, Inc. is committed to providing superior, value added seed
varieties and superior service. The ultimate goal is to achieve a 45% market
share in forage and turf seed by the year 2000 with annual revenues exceeding
$500 million."
Chairman's Update--March 4, 1998. "Building "Franchise Value' will continue
to be management's primary focus for the foreseeable future. The AgriBioTech
vision has been to build a strong platform consisting of industry leading
germplasm, industrial leading market share through an established distribution
base, all managed by world-class experienced personnel who excel in developing
and marketing value-added propriety products. I have always believed that the
successful assembly of such a platform would make AgriBioTech the partner of
choice for biotechnology developers wishing to participate in the forage and
turfgrass seed sector. I am pleased to report that our platform is
exceptionally strong and it appears we will achieve all the goals we had set
for December 31, 2000 by December 31, 1998--two years ahead of schedule!"
"Recent appreciation in the share prices and resulting market capitalization
of DEKALB and Delta Pine within our peer group are due, in my opinion, to the
"scarcity' of seed companies with large seed revenues, distribution base and
exceptional germplasm. There are only a few companies that have these
characteristics and we are one of them. Our revenues are substantially larger
than the revenues of Delta Pine and almost equal to DEKALB's. Our germplasm
base is exceptional! Consequently, I believe that AgriBioTech is grossly
under-valued. Based on the market prices of AgriBioTech in relation to our
peer group, compared to my current perception of the relative "Franchise
Value' of AgriBioTech and our peer group, as CEO, I will not authorize
AgriBioTech to file an underwritten public offering of its Common Stock while
our share price is below $20 per share."
"We expect to have several biotechnology agreements by June 30, 1998. Each
of which will contribute to "Franchise Value' and maximizing shareholder
value." This quote was subsequently qualified in the Chairman's Update dated
June 22, 1998, as follows--"Biotechnology/Gene Access: ABT continues to
negotiate with a large number of parties for gene access. Negotiations are
proceeding well. As you know, I have indicated to shareholders that we
expected to enter into a second agreement before June 30. This remains a
possibility, but we will not hasten the process simply to meet my June 30
prognostication. Shareholders can rest assured that ABT is the "partner of
choice' for a number of genes, from a variety of sources." As disclosed under
"Recent Developments" above, and as set forth under "Company News" in the
Company's Web Site, on July 27, 1998, the Company announced that it had signed
a letter of intent with FFR Cooperative to form a long-term worldwide research
alliance to develop and commercialize improved proprietary seed products. In
its July 27, 1998 press release the Company stated that: "AgriBioTech
management estimates that AgriBioTech's forage grass market share coupled with
those who distribute FFR's products exceeds 55% in the United States."
A graph from the Company's 1996 Annual Report to Shareholders was reproduced
in response to shareholder questions on the time frame for gross margin
increase through product shifts and implementation of classic consolidation
efficiencies. The graph showed nominal profitability during the first two
years with the curve starting to increase in year three, further increasing in
year four, and then significantly increasing in year five.
Furthermore, it was pointed out that significant integration could not begin
until the Company achieved a minimum critical mass, first achieved in calendar
1998, as illustrated in the chart below. The following chart illustrated the
Company's growth based on dates relative to the Company's annual meeting dates
using estimates and approximations of ABT's relative size from acquisitions
(completed and pending) to those dates:
<TABLE>
<CAPTION>
PROJECTED
1/1/95 2/2/95 2/2/96 2/2/97 2/2/98 2/2/99
------ ------ ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
NUMBER OF COMPANIES (Acquired or
Pending)........................ 0 2 8 11 24 Approximately
equal to 30
NUMBER OF EMPLOYEES.............. 5 50 165 200 730 Approximately
equal to 900
ANNUALIZED REVENUE $(MILLION).... 0 10 31 64 372 Greater than 500
STOCK PRICE $.................... 0 2.50 2.48 3.18 14.50 ?
</TABLE>
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April 1, 1998 Chairman's Update. Following the Company's entering into its
first biotechnology alliance in March 1998 with the Samuel Roberts Noble
Foundation ("Noble") to use transformed plants to develop alfalfa with
improved digestibility utilizing genes developed by Noble, the following two
statements were made under the subheading "Biotechnology/Gene Access":
"Shareholders should evaluate each of our biotechnology agreements
(including specific genes) on their contribution to our Franchise Value. Each
gene and agreement contributes to our Franchise Value in two ways: the amount
of potential increase in profit to our end user customers and the Company due
to value created in the market (e.g., additional profit per acre X number of
acres); and, cost to the Company to gain access to a gene or technology, as
measured by development expense and royalties owed during marketing."...
"Digestibility is one of the major measures of hay quality and an important
determinant of price per ton. Small increases in digestibility result in large
increases in the value of the hay crop. A 1% increase in digestibility would
significantly increase the value of hay as a feed for milk or meat production.
Such an increase applied to the entire hay crop in the U.S. would translate
into a $500 million increase in the value of hay harvested at the end user
level. Given the four year harvest life of varieties, this translates into
$2.0 billion of extra hay value." [See "Recent Developments" above.]
"Negotiations for additional acquisitions continue as we seek to reach an
annualized revenue base of $500 million by December 31, 1998, two full years
ahead of our original schedule."
The following statement was made under the subheading "Equity Funding"--"The
$30.5 million equity placement helped us achieve the following important
goals: . . . Broadened our shareholder base with quality investors who
understand the seed industry and consequently are likely to be long-term
holders of seed stocks."
June 22, 1998 Chairman's Update. Monsanto (MTC) Acquisition of DEKALB (DKB)
and Delta & Pine Land (DLP). "The May 11, 1998 announcement of the acquisition
of DEKALB Genetics Corporation and Delta & Pine Land by Monsanto at a purchase
price of over 7 times revenues was an excellent validation of AgriBioTech's
management strategy. Our "Franchise Value' focus is to make ABT a mirror image
of Pioneer and Delta & Pine Land (industry leading market share, industry
leading germplasm and research, and world class value added/operations
personnel). These two acquisitions, coupled with previous investments by
Dupont (DD) in Pioneer (PHB) and Dow (DOW) in Mycogen (MYCO) are certainly
positive developments for AgriBioTech. Shareholders should recognize that ABT
management has achieved only a portion of our "Franchise Value' goals.
Consequently, shareholders should not expect a valuation today of 7 times
revenue. However, it is reasonable to expect valuation multiples greater than
today's 2.5 times revenue multiple. The "Franchise Value' tasks which need to
be accomplished in the short term can best be accomplished by current
management. Consequently, it is most likely that an initial equity investment
(if any) by one of the larger life science companies would be a minority
ownership investment at this time."
Monsanto/Research Seeds Alfalfa Agreement--"Roundup Ready(R) alfalfa will be
an important value added trait, but there are a number of other genes which
will contribute more value to the end user, such as ABT's digestibility work
with The Noble Foundation. ABT is focusing initial resource commitments on
traits with maximum economic value and for which we can negotiate 'freedom to
operate' through commercialization, not just 'freedom to operate' through
research and development."
Financial Information. Human Assets. The Company announced that on January
1, 1998 two key positions were filled, that of President and Chief Operating
Officer and Vice President, Director of Research. The respective biographies
of Kent Schulze, President, and Dr. Thomas B. Rice, Vice President, appear in
the Company's Proxy Statement dated January 20, 1998. See "Information
Incorporated by Reference."
This section includes the following biographies of various other employees
which also appear in the Company's 1997 Annual Report to Shareholders, none of
whom, except Dr. Rice, are executive officers of the Company.
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<PAGE>
"Dr. Thomas B. Rice, Vice President, Director of Research, who will join the
Company January 1, 1998 was formerly with DEKALB Genetics Corporation, where
he served 10 years as Director of Research and subsequently as President and
Chief Operating Officer of DEKALB Plant Genetics, a subsidiary. Tom was the
architect of DEKALB'S highly successful biotechnology effort, starting at
Pfizer in 1976 where he initiated, managed and directed the plant
biotechnology effort. This program later became DEKALB's highly productive
effort as a result of a joint venture with Pfizer. Tom's program developed the
first genetically engineered corn and received the first product patents for
corn, covering insect resistance (Bt), herbicide tolerance and improved
nutritional quality. During his seed industry career, Tom has had direct
management experience in the areas of international subsidiaries, strategic
alliances, breeding and biotechnology R&D, intellectual property rights,
strategic planning and technology transfer. He will lead ABT's R&D and
biotechnology efforts to optimize the Company's planning and investments in
this critical area and in exploring the possibilities associated with
licensing in and/or collaborating in the development of biotechnology traits,
products and processes. Tom received a Ph.D. in genetics from Yale University
in 1973, and was a Post-Doctoral fellow of Brookhaven National Laboratory and
a Research Associate at Michigan State University before joining Pfizer.
Keith Sandberg, National Sales Director, was formerly Area Manager for the
Central and Southern Regions of Cargill Hybrid Seeds, a division of Cargill,
Inc., the largest privately owned company in the U.S. Keith was responsible
for the sales and commercial development activities to support Cargill's corn,
alfalfa and sorghum product lines. From 1987 to 1993, Keith was responsible
for Sales, Sales Administration and Technical Services, Central and Southern
Regions, for Cargill, based in Aurora, Illinois. Keith managed all sales and
agronomy activities for Cargill's seed products in the Central and Southern
regions, and had primary responsibilities for managing the integration of the
seed brands PAG, Paymaster and Cargill. From 1981 to 1987, Keith managed North
American Sales for the Paymaster Brand and had product line responsibility for
Cargill's corn business in Canada.
Bruce J. Ceranske, General Manager of W-L Research, was formally a District
Sales Manager for all or parts of Wisconsin, Minnesota, Michigan and Iowa, for
Cargill Hybrid Seeds based in Waupaca, Wisconsin since 1989. In addition,
Bruce was selected to Cargill Hybrid Seeds Corn Business Management Team and
Forage Management Team, which selected corn and alfalfa germplasm for
production, and commercialization. Currently, Bruce is managing W-L Research,
based in Evansville, Wisconsin. W-L Research is a world leading alfalfa
research company with varieties marketed globally.
Keith Flynn, Forage Business Unit Director, holds a BS degree in Plant
Breeding & Genetics from the University of Reading, England. Keith was
formerly Vice President of Alfalfa, Wheat and International (1994 to 1997) for
Agripro Seeds, a wholly owned subsidiary of Helena Chemical Co. Keith directed
three profitable business units with research, production, sales and marketing
as direct reporting functions. From 1972 to 1994, Agripro Seeds and its
predecessors were owned by Shell Oil and The Royal Dutch Shell Group. Keith
held increasingly important positions in sales, marketing, product management
and general management. He has extensive knowledge of both national and
international seed business and brings 25 years of broad seed experience to
ABT.
Doug Elkins, Western Regional Sales Manager joined Germain's Seeds in 1978
as a Washington State Sales Representative. He was promoted to Sales Manager
in 1980, to Division Manager in 1987 and to Chief Executive Officer in 1992.
Prior to joining Germain's, Doug was employed at Ferry Morse Seed Company and
Helena Chemical. He has 24 year of experience in the seed business and served
as President of the Pacific Seed Association and currently serves as President
of the California Seed Association and holds a position on the California Seed
Advisory Board. As the Western Regional Sales Manager he has the primary
responsibility and oversight of sales and marketing for the western region of
ABT which includes Germain's Seeds and Hobart Seed Co.
Greg S. Fennell started in the seed business as a shipping coordinator in
1979, became active in seed sales in 1980 and in 1986 co-founded Olsen Fennell
Seeds, Inc. with James E. Olsen. They developed Olsen Fennell into an industry
leading turf and forage seed company with revenues in excess of $35 million.
Greg's primary
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<PAGE>
responsibility at Olsen Fennell is income production where he dedicates most
of his time to distributor sales and the creation and implementation of
marketing plans for proprietary turf and forage grasses. He is responsible for
international sales, and concentrates much of his domestic marketing efforts
in the Midwestern and Southern states. Greg graduated from the University of
Oregon with a major in Business Management.
Greg McCarthy's career in the seed business began in 1976 as an agronomist
and field representative for E.F. Burlingham & Sons. Greg is experienced in
various aspects of seed management procurement and international sales. Greg
and Doug Pope purchased Burlingham in 1994 and have guided the company into
becoming an industry leading turf and grass seed research, production and
distribution company with net sales in excess of $36 million. Greg is
responsible for directing Burlingham's research and development department. He
also is responsible for the procurement and purchasing of seed, including the
program for production of proprietary seed varieties and maintaining
relationships with seed growers. Greg graduated from Oregon State University
with a major in Agronomic Crop Science.
James E. Olsen started in the seed business in 1983 as a sales trainee at DM
Combs, Co., and in 1986, co-founded Olsen Fennell Seeds, Inc. with Greg
Fennell. They developed Olsen Fennell into an industry leading turfgrass and
forage seed company with revenues in excess of $35 million. James is
responsible for oversight of all production contracts, grower relations and
breeding work for Olsen Fennell Seeds. He also has responsibilities for
domestic sales on proprietary products for both turfgrass and forage seeds. He
graduated from Willamette University with a major in Philosophy.
Michael Peterson, Ph.D., Director of Research, W-L Research, Inc., joined W-
L Research, Inc. in 1982. His responsibilities include the coordination of all
alfalfa breeding and product development activities at the four W-L alfalfa
research stations. He is also responsible for technical product support for
the W-L Research franchise and private label sales as well as coordination of
all W-L contract and joint venture projects. He attended the University of
California at Davis where he received a Bachelor of Science degree in Agronomy
in 1978. Mike also attended the University of Minnesota where he received his
Masters of Science and a Doctoral degree in Plant Breeding in 1982.
Doug Pope started in the seed business in 1983 when he joined E. F.
Burlingham & Sons. Prior to that he was an Account Executive for the Bell
Telephone System. Doug and Greg McCarthy purchased Burlingham in 1994 and led
it into becoming an industry leading turf and grass seed research, production
and distribution company with revenues in excess of $36 million. Doug is the
Chief Operating Officer of Burlingham and is responsible for domestic sales
which includes program and product development for Burlingham's customer base.
Doug oversee's the daily functioning of Burlingham including shipping and
warehousing. Doug graduated from Penn State University with a major in
finance.
1997 Annual Report to Shareholders
Dear Fellow Shareholders Letter
"In 1995, we set out to consolidate two important seed sectors and gain 45
percent market share by the year 2000; we are 12 to 18 months ahead of our
target schedule for achieving this goal. The annualized revenues from our
completed acquisitions mean that today we are approximately double the size in
market share of the second leading company. When pending acquisitions are
closed, the Company's market share position will be roughly 3.5 times that of
the largest competitive forage and cool season turfgrass seed company."
"To date, the Company has maintained historical revenues while increasing
same store sales by roughly 7 percent as a result of our consolidation
strategy."
"In Fiscal 1998, we expect to achieve full-year profitability because our
Company now has a strong platform of research and development through
traditional genetic breeding programs, seed processing plants, and national
and international distribution and sales networks for most forage and cool-
season turfgrass species."
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<PAGE>
"We have strong management. We are number one in market share, and we have
an industry-leading germplasm position. We expect continued growth in sales,
assets and equity in 1998."
"Respected and knowledgeable analysts predict that the agricultural
biotechnology market will grow to $12 to $14 billion a year within seven to
eight years."
Industry And Strategy Review
"Recently, however, margins in the industry have begun to expand as
increasingly larger and more sophisticated farmers and other users have moved
away from public varieties toward higher yielding proprietary varieties.
Proprietary varieties have desirable attributes such as improved nutritional
quality and disease and insect resistance. Additionally, protection of
intellectual property in the seed industry (variety rights) has recently been
firmly established by federal legislation (1994) and an important and
favorable U.S. Supreme Court ruling for seed companies (1995).
Prior to the launch of ABT's acquisition plan in 1995, no seed company
achieved the necessary size and scope of operations in the forage and
turfgrass seed sectors to develop higher yielding and better performing
proprietary varieties for national markets. The leading U.S. and global seed
companies and industry players--Pioneer Hi-Bred International, Inc., DEKALB
Genetics Corporation, Novartis AG, Delta and Pine Land Company, Monsanto Co.,
and The Dow Chemical Company--have focused on and invested in other important
seed sectors like corn, cotton and vegetables. The leaders in these sectors
have used investment in traditional seed breeding R&D and vertical integration
to generate annual returns on equity in the 20 percent range, and because of
their leadership positions are now realizing sizable additional returns and
profits due to the commercialization of higher-value biotechnology-based seed
products."
Biotechnology and Biotechnology Access
"The impact of biotechnology on the value of agricultural crops can be
great. The soybean crop in the U.S. is a present day example of what can
happen when value-added, biotechnology produced seeds are developed and
marketed. Prior to the introduction of Roundup Ready(R) soybean seed in the
U.S. (seed genetically engineered to be tolerant to a specific, efficacious
and cost-effective herbicide) farmers spent between $800 and $900 million on
soybean seed in the U.S. In 1998, 20-25 percent, of all U.S. soybean acres are
expected to be planted with these seeds generating increased value for seed
companies and the technology's owner of $200 to 250 million."
Functional Planning, Vertical Integration and Efficiencies
"Market share at the acquired companies has been maintained. In fact, sales
and revenues growth have been realized at certain, key combined operations.
Improved customer service and a superior product offering, among other things,
accounts for this and is indicative of what the Company intends to achieve and
improve upon with other acquired businesses.
Management believes that these planning, integration and optimization
efforts are typical of others to come as the Company grows and builds upon its
acquisition program success. Operationally, Management's plans are to increase
the profitability of both the Company and its customers by implementing the
[following strategies]."
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RISK FACTORS
This Prospectus ( including without limitation the following Risk Factors)
contains forward-looking statements (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act) regarding the Company and
its business, financial condition, results of operations and prospects. Words
such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," and similar expressions or variations of such words are intended to
identify forward-looking statements, but are not the exclusive means of
identifying forward-looking statements in the Prospectus.
Although forward-looking statements in this Prospectus reflect the good
faith judgment of the Company's management, such statements can only be based on
facts and factors currently known by the Company. Consequently, forward-looking
statements are inherently subject to risks and uncertainties, and actual results
and outcomes may differ materially from the results and outcomes discussed in
the forward-looking statements. Factors that could cause or contribute to such
differences in results and outcomes include with limitation those discussed
below as well as those discussed elsewhere in this Prospectus and in any
documents that are incorporated into this Prospectus by reference. Readers are
urged not to place undue reliance on these forward-looking statements, which
speak only as of the date of this Prospectus. The Company undertakes no
obligation to revise or update any forward-looking statements in order to
reflect any event or circumstance that may arise after the date of this
Prospectus. Readers are urged to carefully review and consider the various
disclosures made by the Company in this Prospectus, the Company's Annual Report
on Form 10-KSB for the year ended June 30, 1997, as amended, as well as the
various other documents listed under the heading "Information Incorporated By
Reference," all of which have been filed with the Commission, and attempt to
advise interested parties of the risks and factors that may affect the Company's
business, financial condition and results of operations and prospects.
Recent Rapid Growth; Ability to Manage Growth. The Company has acquired all
---------------------------------------------
or part of 29 companies in the forage and turfgrass seed sector since January 1,
1995, has signed agreements to acquire two additional seed companies, and
intends to expand current levels of operations. The Company has experienced
significant revenue growth and has expanded the number of its employees and the
geographic scope of its operations. These factors have resulted in increased
responsibilities for management personnel. This rapid growth has placed and may
continue to place significant demands on the Company's management, technical,
financial and other resources. In addition, successful expansion of the
Company's operations will depend on, among other things, the Company's ability
to attract, hire and retain skilled management and other personnel, secure
adequate sources of seed on commercially reasonable terms and successfully
manage growth, none of which can be assured. To manage growth effectively, the
Company will need to improve operational, financial and management information
systems, procedures and controls. There can be no assurance that the Company
will be able to manage its future growth effectively, and failure to do so could
have a material adverse effect on the
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<PAGE>
Company's business, financial condition and/or operating results. See
"Management's Discussion and Analysis or Plan of Operations" in the Form 10-KSB
and Management's Discussion and Analysis of Financial Condition and Results of
Operation" in the Forms 10-Q (collectively, "MD&A"), and "Description of
Business - Acquisition Program" in the Form 10-KSB.
Integration of Acquisitions. The Company is in the process of integrating
---------------------------
its recent acquisitions, and intends to expand current levels of operations
through additional acquisitions. The Company's future success depends upon its
ability to combine the operations of its acquired subsidiaries into a vertically
integrated company. The Company's acquired subsidiaries, many of which are
geographically disparate, represent the full spectrum of the forage and
turfgrass seed production, processing, sales and distribution process. The
Company's prospects must therefore be evaluated in light of the problems,
expenses, delays and complications associated with operating, managing and
integrating a large group of businesses and/or subsidiaries. There can be no
assurance that the Company will be able to effectively integrate the acquired
subsidiaries, and failure to do so could have a material adverse effect on the
Company's business, financial condition and/or operating results. See "MD&A"
and "Description of Business - Acquisition Program" in the Form 10-KSB.
No Assurance of Future Acquisitions. The Company has experienced
-----------------------------------
significant growth in net sales, from approximately $26 million in the fiscal
year ended June 30, 1996 ("Fiscal 1996") to $66 million in the fiscal year ended
June 30, 1997 ("Fiscal 1997"), and to pro forma net sales of approximately $407
million for Fiscal 1997 reflecting completed acquisitions and the Pending
Acquisitions. This growth is attributed primarily to the Company's
acquisitions. The Company's future growth will depend upon its ability to
continue to make acquisitions, as well as increase sales from existing
operations, neither of which can be assured.
While the Company has been able to complete 29 acquisitions during the last
three and one half years, the Company may not make as many acquisitions in the
future as a result of, among other things, its achieving its leading market
position. The Company generally intends to seek to acquire companies that
specialize in research and development, processing, and distribution. The
Company is unable to predict whether and when any prospective acquisition
candidate will become available or the likelihood that any acquisition will be
completed. The Company may, in certain circumstances, compete for acquisition
candidates with entities that have substantially greater resources than the
Company.
Potential Liabilities Associated with Acquisitions. The businesses acquired
--------------------------------------------------
by the Company may have liabilities that the Company did not discover or may
have been unable to discover during its pre-acquisition investigation, including
liabilities arising from environmental contamination or non-compliance by prior
owners with environmental laws or regulatory requirements, the provisions of
which may change in the future with retroactive effect, for which the Company,
as a successor owner, may be responsible. Any indemnities or warranties may not
fully cover such liabilities due to their limited scope, amount or duration, the
financial limitations
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<PAGE>
of the indemnitor or warrantor, or for other reasons. Therefore, in the event
the Company is held responsible for the foregoing liabilities, the Company's
operations may be materially adversely affected.
Development of New Products. The Company continues to develop new,
---------------------------
genetically superior forage and turfgrass varieties. The Company believes that
the development and marketing of such elite varieties will play a key role in
the Company's success. There can be no assurance that the Company will develop
such genetically superior strains either on its own or with industry partners.
If the Company is unable to develop and successfully market new product lines,
this could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Acquisitions, Description of Other
Indebtedness, Recent Developments and Web Site Disclosures" and "Description of
Business--Research and Development" in the Form 10-KSB.
Market Acceptance. Potential investors should be aware that even if the
-----------------
Company is successful in developing genetically superior strains as stated
above, there can be no assurance that there will be a market for such products;
or, if such a market develops that the Company will be able to recoup the costs
associated with the development of these products. If the Company is unable to
effectively market products it has developed at prices sufficient to (i) cover
the Company's costs and (ii) generate adequate return on the Company's capital,
the Company's business, financial condition and results of operations may be
materially adversely affected.
Reliance on Patents and Proprietary Rights. The Company owns proprietary
------------------------------------------
varieties for a number of forage and turfgrass species that are protected under
the Plant Variety Protection Act ("PVPA") and is seeking to acquire and/or
develop other varieties protected by the PVPA. The PVPA prohibits others from
selling seed of those proprietary varieties for 20 years, after which such
protection expires. The inability to develop protected varieties could have a
material adverse impact on the Company's business, financial condition and
results of operations. There can be no assurance that any proprietary rights
owned by the Company or licensed from third parties will not be challenged,
invalidated, or circumvented, or that the rights held by the Company will
provide any competitive advantage, or that the Company's competitors will not
possess protected varieties that perform better than those of the Company. The
Company could also incur substantial costs in asserting its proprietary rights
against others, including any such rights obtained from third parties, and/or
defending any infringement suits brought against the Company. See
"Acquisitions, Description of Other Indebtedness, Recent Developments and Web
Site Disclosures" and "Description of Business--Proprietary Rights" in the Form
10-KSB.
Access to Biotechnology. Breakthroughs in biotechnology have led to the
-----------------------
introduction of new, improved and specialized seeds in other seed sectors, such
as corn, soybeans and cotton. The Company believes that similar breakthroughs
in biotechnology will also lead to the introduction of enhanced seeds in the
forage and turfgrass sectors. The Company's objective is to become the licensee
or partner of choice for owners of value-added genetic traits in order to
accelerate the introduction of these traits to its customers through
biotechnologically enhanced
-19-
<PAGE>
products. In addition to the risks described above under "Development of New
Products" and "Market Acceptance" there can be no assurance that the Company
will succeed in its efforts to license biotechnology genes and develop
commercial products from such licenses. The Company's inability to develop or
market products through biotechnology at prices sufficient to recover its costs
and generate adequate returns on capital could have a material adverse affect on
the Company's future business, financial condition and results of operations.
See "Acquisitions, Description of Other Indebtedness, Recent Developments and
Web Site Disclosures" and "Description of Business--Proprietary Rights" in the
Form 10-KSB.
Competition. The seed industry and the field of agricultural technology are
-----------
both highly competitive. The Company competes in the forage and turfgrass seed
sectors primarily on the basis of price, product quality and service. The major
agricultural seed companies in the United States focus their sales around hybrid
seed corn (Pioneer Hi-Bred International, DEKALB Genetics Corporation, Novartis
AG and Mycogen Corporation), cotton seed (Delta and Pine Land Company) and other
grain crops. Each of these competitors has national brand name acceptance. In
the past, these companies have treated forage and turfgrass seeds as ancillary
crops when they compete in the marketplace. This is the opposite of the
Company's business strategy, which is to treat forage and turfgrass seed as its
primary product. Therefore, the Company's major competitors in the forage and
turfgrass seed sectors currently are large regional companies and numerous small
family seed businesses. However, any of the major agricultural seed companies
may decide to intensify their efforts in the forage and turfgrass seed sector.
Management believes that as the Company's acquisition strategy becomes better
known in the seed industry, the competition for acquisitions, sales, facilities
and personnel will intensify.
In the alfalfa seed industry, the largest United States competitors are
Cenex/Land O'Lakes/Research Seed, Helena/AgriPro, Pioneer and Cal/West Seeds,
each of which has annual alfalfa seed sales estimated to be between $20 and $60
million. The Company's largest competitors for forages other than alfalfa are
FFR Research (see "Acquisitions, Description of Other Indebtedness, Recent
Developments and Web Site Disclosures") and its farm cooperative members. There
are also small family owned businesses that are strong competitors in small
geographic areas. The Company has a number of competitors for cool-season
turfgrass seed that have annual sales of between $20 and $80 million. Most of
these companies are regional companies with only Pennington Seed and O.M. Scott
having national brand name acceptance.
The Company currently competes with, and in the future expects that it will
continue to compete with, companies with substantially greater financial,
marketing, personnel and research and development resources than those of the
Company. There can be no assurance that the Company will be able to compete
successfully against such companies. These competitive factors could have a
material adverse effect on the Company's business, results of operation and/or
financial condition. See "Description of Business--Competition" in the Form
10-SKB.
Lack of Historical Profitability; Accumulated Deficit . The Company has
------------------------------------------------------
reported only three profitable quarters since becoming a publicly owned company
in September 1993.
-20-
<PAGE>
Potential investors should be aware that over the life of the Company, the
Company has not reported a profitable fiscal year and has failed to show
consistent profitability. The Company had an accumulated deficit of $8,107,447
at March 31, 1998.
Substantial Indebtedness; Effects of Financial Leverage. The Company has
-------------------------------------------------------
indebtedness that is substantial in relation to its stockholders' equity, as
well as interest and debt service requirements that are significant compared to
its cash flow from operations. As of March 31, 1998, on a pro forma basis
reflecting acquisitions completed after March 31, 1998 and the Pending
Acquisitions, including related financing of such acquisitions, the Company had
approximately $126.7 million of short-term debt and long-term obligations
outstanding. The Company is permitted to incur up to $100 million (subject to a
borrowing base computation and compliance with certain financial covenants) of
indebtedness under its Revolving Credit Facility. As of August 13, 1998, the
Company had borrowed approximately $53 million under the Revolving Credit
Facility. See "Acquisitions, Description of Other Indebtedness, Recent
Developments and Web Site Disclosures."
The degree to which the Company is leveraged could have important
consequences to holders of its securities including, but not limited to the
following: (i) the Company's level of indebtedness could make it more difficult
for the Company to satisfy its obligations with regard to indebtedness ; (ii)
the Company's level of indebtedness could increase its vulnerability to general
adverse economic and industry conditions; (iii) a substantial portion of the
Company's cash flow from operations must be dedicated to debt service and will
not be available for operations and other purposes; (iv) the Company's ability
to obtain additional financing in the future for working capital, capital
expenditures, acquisitions, research and development, or general corporate
purposes may be impaired; (v) the Company's leverage position and covenants
contained in the Revolving Credit Facility could limit the Company's ability to
expand, compete and make capital improvements; and (vi) the Company's
borrowings under the Revolving Credit Facility are and will continue to be at
variable rates of interest, which exposes the Company to the risk of increased
interest rates.
The Company's ability to pay interest on the Revolving Credit Facility and
to satisfy its other obligations will depend upon the Company's future financial
and operating performance, which, in turn, will be affected by prevailing
economic conditions and financial, business, competitive, regulatory and other
factors, many of which are beyond the Company's control. The Company's cash
flow from operations has not been sufficient to meet its debt service
obligations in the past, without equity and debt financings. There can be no
assurance that the Company will have sufficient funds in the future to meet its
obligations under the Revolving Credit Facility and any other indebtedness that
the Company may incur. This is particularly true as the Company continues to
expand its operations. If the Company is unable to service its indebtedness, it
will be forced to adopt an alternative strategy that may include actions such as
reducing or delaying capital expenditures, scaling back the Company's expansion
efforts, selling assets, restructuring or refinancing its indebtedness or
seeking additional equity capital. There can be no assurance
-21-
<PAGE>
that any of these strategies could be effected on terms acceptable to the
Company, if at all. See "MD&A".
Restrictions Imposed by Terms of Certain Indebtedness. The Revolving
-----------------------------------------------------
Credit Facility contains certain restrictive covenants that will affect, and in
many respects significantly limit or prohibit among other things, the ability of
the Company to incur indebtedness, make prepayments of certain indebtedness, pay
dividends, make investments, engage in certain transactions with affiliates,
create liens, sell assets and engage in mergers and consolidation. The
collateral securing borrowings under the Revolving Credit Facility consists of
substantially all the assets of the Company except fixed assets and real estate.
The Revolving Credit Facility also requires the Company to maintain specified
financial ratios and to satisfy certain financial condition tests. The
Company's ability to meet those financial ratios and financial condition tests
can be affected by events beyond its control, and there can be no assurance
that the Company will meet those tests. A breach of any of these covenants
could constitute an event of default under the Revolving Credit Facility. Upon
the occurrence of an event of default under the Revolving Credit Facility, the
lenders thereunder could elect to declare all amounts outstanding thereunder,
together with accrued interests, to be immediately due and payable. If the
indebtedness under the Revolving Credit Facility were to be accelerated, there
can be no assurance that the assets of the Company would be sufficient to repay
such indebtedness and other indebtedness of the Company. If ABT were unable to
repay those amounts, the lenders under the Revolving Credit Facility could
proceed to foreclose their security interest in the collateral securing the
indebtedness thereunder. The ability of the Company to comply with the
restrictions and covenants in the Revolving Credit Facility, will be dependent
upon the Company's future performance and various other factors, certain of
which (e.g. the general economy and the weather) are beyond its control. See
"Acquisitions, Description of Other Indebtedness, Recent Developments and Web
Site Disclosures."
Need for Future Capital. The Company's capital requirements have been and
-----------------------
are expected to continue to be significant. The Company currently believes that
it will need additional funding, both debt and equity, together with available
borrowings under the Revolving Credit Facility to enable the Company to fund its
current operations and the consummation of anticipated acquisitions during the
next 12 months. The Company's future capital requirements will depend on
numerous factors including, but not limited to, the timing and cost of any
future acquisitions and the time and cost involved in integrating the Company's
acquisitions and growing the Company's existing operations. In the event that
the Company's plans or assumptions change or prove to be innacurate, and the
funds available to the Company prove to be insufficient to fund the Company's
growth and operations, then some or all of the Company's development and
expansion plans could be delayed or abandoned, or the Company could be required
to seek additional funds earlier then currently anticipated. See "MD&A."
Dependence on Key Personnel. The success of the Company is largely
---------------------------
dependent upon the efforts, abilities and expertise of Dr. Johnny R. Thomas,
Chief Executive Officer, as well as each of the Company's five other executive
officers. The loss of any of these key personnel could
-22-
<PAGE>
have a material adverse effect on the Company's business, financial condition
and results of operations. The Company has obtained a key-man life insurance
policy in the amount of $3 million on the life of Dr. Thomas. The Company's
prospects depend upon its ability to attract and retain qualified marketing,
financial, management information system, and other technical personnel.
Competition for such personnel is intense and there can be no assurance that the
Company will be successful in attracting or retaining such personnel. See
"Management" in the Form 10-KSB.
Cyclical Nature of Agricultural Products. Most agricultural products,
----------------------------------------
including forage and turfgrass seed, are commodities that are subject to wide
fluctuations in price based on supply of the products and demand for, in this
case, the raw or processed seed. Furthermore, the demand for seed is dependent
on the demand of farmers, which is influenced by the general farm economy. The
production of seed is subject to a variety of nature's adversities including
drought, wind, hail, disease, insects, early frost and numerous other forces
that could adversely affect the growing of seed in any growing season, resulting
in larger fluctuations in results of operations between quarters. See
"Management's Discussion and Analysis or Plan of Operations--Seasonality of
Business and Quarterly Comparisons" in the Form 10-KSB.
Seasonality of Quarterly Results. The Company's seed business is subject to
--------------------------------
wide seasonal fluctuations that reflect the typical purchasing and growing
patterns for forage and turfgrass crops. In addition, weather affects commodity
prices, seed yields and planting decisions by farmers. Results of operations
from quarter to quarter will not necessarily reflect the results for the entire
year and are not necessarily indicative of results that may be expected for any
other interim period. Management believes that quarterly sales will continue to
fluctuate significantly depending on, among other things, the breakdown of the
Company's sales between the forage and cool-season turfgrass sectors for any
specific period of time. See "Management's Discussion and Analysis or Plan of
Operations--Seasonality of Business and Quarterly Comparisons" in the Form 10-
KSB.
Government Regulation. The Company's operations are directly and indirectly
----------------------
subject to various Federal and state environmental controls and regulations.
Management believes that the Company is in substantial compliance with existing
environmental regulations, but can give no assurance that it can maintain such
compliance without incurring substantial cost and expense if additional laws and
regulations are enacted or promulgated.
While not affecting the Company's operations, certain government regulations
may have an effect on the demand for the Company's products. For example, from
time to time the federal government has imposed restrictions on the sale of
certain commodities to certain countries, including commodities the seed for
which are produced by the Company. In addition, United States government
agricultural policies are designed to maintain a balanced supply and demand for
certain commodities by regulating planted acreage through set-asides in certain
crops. Adherence to set-asides is the basis for farmers' eligibility for
government subsidy payments and
-23-
<PAGE>
other benefits. An increase in the set-aside for a crop generally reduces farmer
demand for seed for that crop, and a decrease in the set-aside generally
increases demand for that seed. In addition, other government policies, such as
subsidizing export sales of certain commodities, ultimately affect seed sales.
Certain of the Company's sales of seed are subject to demand swings resulting
from changes in these programs.
Adoption of regulations regarding the allocation of water in California,
Arizona and other states with limited water supplies could result in a reduction
of the number of acres planted with various crops, reducing the demand for the
Company's products in those states.
The development of seed of genetically altered plants is regulated by the
United States Department of Agriculture, the Food and Drug Administration, the
Environmental Protection Agency (the "EPA"), and various state agencies. These
Federal agencies require permits for field testing; the EPA also regulates
insecticide and herbicide products. The Company is not aware of any pending
legislation that would materially impact either its traditional product
development or commercialization of seed from genetically altered plants. There
can be no assurance that regulatory agencies administering existing or future
regulations or legislation will allow the Company to produce and market
genetically engineered seed, if at all, in a timely manner or under technically
or commercially feasible conditions. The Company's inability to produce such
seed could have a material adverse effect on the Company.
Adverse Effect of Potential Future Sales of Common Stock. Of the Company's
--------------------------------------------------------
37,424,477 issued and outstanding shares of Common Stock as of August 7, 1998,
approximately 7,844,000 shares are "restricted securities" as that term is
defined under Rule 144 under the Securities Act. All but 975,000 of these
restricted shares have been registered for resale under the Securities Act. Such
registration statements include 7,122,291 shares of Common Stock registered
simultaneously with the Registration Statement to be offered and sold solely by
selling stockholders who are either investors in private placements of the
Company or the former owners of companies acquired by the Company. Approximately
7,630,000 additional shares of Common Stock are issuable without restriction
upon exercise of outstanding options as of July 1, 1998 and have been or are
being registered under the Securities Act. The Company is unable to predict the
effect that sales made under Rule 144, sales made pursuant to registration
statements, or otherwise, may have on the then existing market price of the
Company's securities. The possibility exists that the sale of any of these
securities, or even the potential for such sales, may be expected to have a
depressive effect on the price of the Company's securities in any public trading
market. Any such depressive effect could impair the Company's ability to raise
additional equity capital.
Public Market Risks; Possible Volatility of Securities Prices. The market
-------------------------------------------------------------
price for the Company's securities has been and may continue to be volatile.
Factors such as the Company's financial results, financing efforts, changes in
earnings estimates by analysts, conditions in the Company's business and various
factors affecting the agriculture industry generally may have a significant
impact on the market price of the Company's securities. Additionally, in the
last several years, the stock market has experienced a high level of price and
volume volatility, and market prices for many companies, particularly small and
emerging growth companies, the common stock of which trades in the over-the-
counter market, have experienced wide price fluctuations and volatility that
have not necessarily been related to the operating performance of
-24-
<PAGE>
such companies themselves. Any such fluctuations or general economic and market
trends could adversely affect the price of the Company's securities. In view of
the foregoing factors, in some future quarters the Company's operating results
may be below the expectations of public market analysts and investors. In that
event, the price of the Company's securities would likely be materially
adversely affected. See "Price Range of Common Stock."
Any of the Selling Stockholders or any person who is an affiliate of the
Selling Stockholders who publicly offers or sells securities of the Company
acquired in an Acquisition may be deemed to be an underwriter pursuant to Rule
145(c) under and Section 2(11) of the Securities Act. Accordingly, the Selling
Stockholders must satisfy the prospectus delivery and other requirements of the
Securities Act prior to making any sales of the Shares, unless such sales are
made in accordance with the provisions of Rule 144, or the Selling Stockholder
does not become an affiliate of the Company and either holds the shares for one
year, provided that the Company is in compliance with the public information
requirements of Rule 144(c), or holds the Shares for two years.
Immediate Substantial Dilution. The Company's present stockholders acquired
------------------------------
their shares of Common Stock at costs substantially below the offering price of
the Common Stock to be sold by the Selling Stockholders. Therefore, investors
purchasing Common Stock in this offering will incur an immediate and substantial
dilution in pro forma net tangible book value per share. Net tangible book
value per share is equal to the total tangible assets of the Company less total
liabilities divided by the number of shares of Common Stock outstanding.
Management Information Systems and the Year 2000 Risks. As a result of the
------------------------------------------------------
acquisitions completed to date, the Company currently has several different data
processing systems. These systems were implemented by the individual operating
units that were subsequently acquired by the Company. The Company has made a
preliminary assessment of the impact on these systems of reaching the Year 2000.
While some of these systems will accommodate the Year 2000, others will not.
The Company is in the process of integrating these systems into one Company wide
information system and has contracted for software, hardware and consulting
services to implement an enterprise resource planning system ("ERP") to meet all
information system requirements. The cost of this implementation is not
expected to exceed $4 million. The Company believes that it has allocated
adequate resources for this purpose. The ERP system currently being implemented
is designed to be Year 2000 compliant and to ensure the Company's computer
systems and applications will function properly beyond 1999. The Company
expects its Year 2000 program to be successfully completed on a timely basis
prior to January 1, 2000. There can, however, be no assurance that this will be
accomplished.
The ability of third parties with whom the Company transacts business to
adequately address their Year 2000 issues is outside the Company's control. The
Company is taking steps to confirm that the systems of its suppliers and
customers are Year 2000 compliant and to determine whether the nature of any
non-compliance would have a material adverse effect on the
-25-
<PAGE>
Company's business, financial condition and results of operations. There can be
no assurance that the failure of the Company or such third parties to adequately
address their respective Year 2000 issues will not have a material adverse
effect on the Company's business, financial condition, cash flows and results of
operations. See "MD&A."
USE OF PROCEEDS
This Prospectus relates to Shares being offered by the Company from time to
time to acquire one or more businesses in the Acquisitions. This Prospectus
also relates to the offer for sale or other distribution of the Shares by the
Selling Stockholders who will acquire such Shares in the Acquisitions. The
Company will not receive any proceeds from the sale of the Shares by the Selling
Stockholders. The Company will pay all expenses related to the registration of
the Shares, but it will not pay the expenses incurred by the Selling
Shareholders in connection with sales of their Shares. See 'Plan of
Distribution."
PRICE RANGE OF COMMON STOCK
The Company's Common Stock has traded on the Nasdaq National Market since
February 14, 1997, under the symbol "ABTX."
The following table sets forth the high and low closing prices for the
Common Stock for each quarter in Fiscal 1996 and Fiscal 1997, until February 13,
1997 on the Nasdaq SmallCap Market and since February 14, 1997 on the Nasdaq
National Market, and Fiscal 1998.
<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
Fiscal 1996
July 1, 1995-September 30,1995............... $ 5 7/16 $ 3 1/16
October 1, 1995-December 31, 1995............ $ 3 5/8 $ 1 5/8
January 1, 1996-march 31, 1996............... $ 4 1/16 $ 2
April 1, 1996-June 30, 1996.................. $ 4 15/16 $ 3 1/2
Fiscal 1997
July 1, 1996-September 30, 1996.............. $ 4 1/16 $ 2 5/32
October 1, 1996-December 31, 1996............ $ 2 3/16 $ 2 1/32
January 1, 1997-March 31, 1997............... $ 3 3/8 $ 2 1/16
April 1, 1997-June 30, 1997.................. $ 6 15/16 $ 2 15/32
Fiscal 1998
July 1, 1997-September 30, 1997.............. $ 10 1/2 $ 6 1/32
October 1, 1997-December 31, 1997............ $ 17 1/16 $ 9
January 1, 1998-March 31, 1998............... $ 19 3/32 $ 13 7/16
April 1, 1998-June 30, 1998.................. $ 29 $ 13 3/4
</TABLE>
-26-
<PAGE>
As of August 7, 1998, the Company had 412 record holders of its Common
Stock and reasonably believes that there are in excess of 4,000 beneficial
holders of its Common Stock.
DIVIDEND POLICY
The Company has never declared or paid any cash dividends on its Common
Stock. The Company currently anticipates that it will retain all future earnings
for use in its business and does not anticipate paying any cash dividends in the
foreseeable future. The Company's Revolving Credit Facility prohibits the
Company from declaring or paying any cash dividends without the lenders'
approval.
SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The selected financial data in the following table should be read in
conjunction with the Company's Financial Statements and the notes thereto,
MD&A and other financial information incorporated by reference herein.
The historical selected financial data presented below under the captions
"Statement of Operations Data" and "Balance Sheet Data" for, and as of the end
of each of the years ended June 30, 1997 and 1996, the nine-month period ended
June 30, 1995, and each of the years ended September 30, 1994 and 1993 are
derived from the consolidated financial statements of ABT and subsidiaries,
which financial statements have been audited by KMPG Peat Marwick LLP,
independent certified public accountants. The consolidated financial
statements as of June 30, 1997 and 1996 and for the years then ended, and the
nine-month period ended June 30, 1995, and the report thereon, are
incorporated by reference in this Prospectus. The selected financial data
presented below for and as of the end of the nine month periods ended March
31, 1998 and 1997 are derived from the unaudited consolidated financial
statements of the Company incorporated by reference in this Prospectus. In the
opinion of the management, the unaudited consolidated financial statements for
the interim periods include all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the results for such periods.
The results of operations for the nine month period ended March 31, 1998 are
not necessarily indicative of the results to be expected for the full year.
See "Management's Discussion and Analysis or Plan of Operations--Seasonality
of Business and Quarterly Comparisons" and "Description of Business--Acquisition
Program" in the Company's Form 10-KSB for information that affects a comparison
of the Company's quarterly results of operations.
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
NINE
NINE MONTHS YEARS ENDED MONTHS YEAR ENDED
ENDED MARCH 31, JUNE 30, ENDED SEPTEMBER 30,
----------------- ---------------- JUNE 30, --------------
1998 1997 1997 1996 1995(1) 1994 1993
-------- ------- ------- ------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $139,695 $41,165 $65,904 $25,962 $ 4,754 $ 29 $ 12
Cost of sales........... 109,209 31,006 49,527 19,236 3,398 12 3
-------- ------- ------- ------- ------- ------ ------
Gross profit............ 30,486 10,159 16,377 6,726 1,356 17 9
Operating expenses...... 27,442 10,814 17,972 9,637 2,779 915 171
-------- ------- ------- ------- ------- ------ ------
Earnings (loss) from
operations............. 3,044 (655) (1,595) (2,911) (1,423) (898) (162)
Total other income
(expense).............. (1,634) (534) (1,119) (413) 16 8 (30)
-------- ------- ------- ------- ------- ------ ------
Earnings (loss) before
income taxes........... 1,410 (1,189) (2,714) (3,324) (1,407) (890) (192)
Income tax expense
(benefit).............. (2,907) -- -- -- -- -- --
-------- ------- ------- ------- ------- ------ ------
Net earnings (loss)..... 4,317 (1,189) (2,714) (3,324) (1,407) (890) (192)
Discount and imputed
dividends on preferred
stock.................. 80 3,203 3,233 2,318 -- -- --
-------- ------- ------- ------- ------- ------ ------
Net earnings (loss)
attributable to common
stock.................. $ 4,237 $(4,392) $(5,947) $(5,642) $(1,407) $ (890) $ (192)
======== ======= ======= ======= ======= ====== ======
Shares of common stock
used in computing
(loss) per common share
(in thousands):
Basic.................. 28,044 13,301 15,549 7,459 5,485 3,911 1,205
Diluted................ 32,374 13,301 15,549 7,459 5,485 3,911 1,205
======== ======= ======= ======= ======= ====== ======
Net earnings (loss) per
common share:
Basic.................. $ 0.15 $ (0.33) $ (0.38) $ (0.76) $ (0.26) $(0.23) $(0.16)
Diluted................ $ 0.13 $ (0.33) $ (0.38) $ (0.76) $ (0.26) $(0.23) $(0.16)
======== ======= ======= ======= ======= ====== ======
</TABLE>
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
MARCH 31, ----------------------- -------------
1998 1997 1996 1995(1) 1994 1993
--------- ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents.... $ 2,967 $ 2,554 $ 2,522 $1,423 $ 441 $ 14
Total assets................. 258,770 95,113 26,184 8,014 765 309
Long-term obligations,
excluding current
installments................ 8,433 2,668 1,055 148 106 213
Total liabilities............ 107,880 50,125 12,161 1,681 261 384
Working capital.............. 24,263 7,555 6,461 3,792 375 (158)
Stockholders' equity......... 150,891 44,988 14,022 6,333 504 (75)
</TABLE>
- --------
(1) The Company changed its fiscal year end to June 30th effective in 1995.
SELLING STOCKHOLDERS
This Prospectus relates to an aggregate of 3,000,000 Shares that may be
offered by the Company from time to time to acquire one or more businesses in
the Acquisitions. This Prospectus also relates to the offer for sale or other
distribution of the Shares by the Selling Stockholders who will acquire such
Shares in the Acquisitions. The Company will amend or supplement this
Prospectus from time to time to furnish the information necessary for a
particular transaction and the Registration Statement of which this Prospectus
is part will be amended, where appropriate, to supply information concerning an
Acquisition. The Company also will amend or supplement this Prospectus from
time to time to identify the Selling Stockholders, the number of Shares
beneficially owned by such Selling Stockholders, the number of Shares to be
offered for resale by such Selling Stockholders, and any other material
information with respect to the sale of the Shares by the Selling Stockholders.
The supplemented or amended Prospectus will also disclose whether any Selling
Stockholder has held any position or office with, been employed by or otherwise
had a material relationship with, the Company or any of its affiliates during
the three years prior to the date of the supplemental or amended prospectus.
DESCRIPTION OF CAPITAL STOCK
Authorized
- ----------
The authorized capital stock of the Company consists of 75,000,000 shares
of Common Stock, $.001 par value, and 10,000,000 shares of Preferred Stock,
$.001 par value.
Common Stock
- ------------
The Company is authorized to issue 75,000,000 shares of Common Stock, $.001
par value per share, of which 37,424,477 are issued and outstanding as of August
7, 1998. All of the outstanding shares of Common Stock and those issuable upon
completion of this offering, are and will be, duly authorized, validly issued,
fully paid and non-assessable. Holders of shares of Common Stock are entitled
to one vote for each share held of record on all matters to be voted on
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by shareholders. There are no preemptive, subscription, conversion or redemption
rights pertaining to the Common Stock. Holders of shares of Common Stock are
entitled to receive such dividends as may be declared on Common Stock by the
Board of Directors out of funds legally available therefor and to share ratably
in the assets of the Company available upon liquidation subject to rights of
creditors and any shares of Preferred Stock. The holders of shares of Common
Stock do not have the right to cumulate their votes in the election of directors
and, accordingly the holders of more than 50% of all the Common Stock
outstanding are able to elect all directors. The current officers and directors
beneficially held 5,022,975 (13.4%) of the shares outstanding and 7,412,975
shares or (18.6%), after giving full effect to the exercise of their respective
options exercisable within 60 days of August 7, 1998.
Preferred Stock
- ---------------
The Company is authorized to issue 10,000,000 shares of Preferred Stock,
$.001 par value per share. As of the date hereof, the Company had no shares of
Preferred Stock issued and outstanding.
The Preferred Stock may be divided by the Company's Board of Directors from
time to time into one or more series. The Board of Directors is authorized to
determine the rights, preferences, privileges and restrictions, including the
dividend rights, conversion rights, voting rights, terms of redemption
(including sinking fund provisions, if any) and liquidation preferences, of any
series of Preferred Stock and to fix the number of shares of any such series
without any further vote or action by stockholders. The Company has no present
plans, proposals, commitments or arrangements to issue any additional shares of
Preferred Stock. The Company's Certificate of Incorporation authorizes the
issuance of Preferred Stock with such designations, rights, and preferences as
may be determined from time to time by the Board of Directors. Accordingly, the
Board of Directors is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion, voting or other rights
that could adversely affect the voting power or other rights of the holders of
the Common Stock. Although the Preferred Stock may be used for any lawful
purpose, the Company has agreed not to use it as an anti-takeover device that
could be utilized as a method of discouraging, delaying or preventing a change
in control of the Company without the approval of the Company's stockholders.
Warrants
On May 4, 1998 and May 13, 1998, respectively, the Company issued 241,600
and 344,900 redeemable Warrants (the "Warrants") to purchase shares of its
Common Stock. The Warrants were issued to certain qualified institutional
buyers and investors in private placements of units. Each unit was sold for
$29.00 and consisted of two shares of Common Stock and one Warrant. The
Warrants are exercisable at a price of $17.50 per share for three years
commencing on their respective dates of issuance. The Warrants are subject to
redemption at $.01 per Warrant on five prior business days' notice if the
closing sale price of the Company's Common Stock
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exceeds $25.00 per share for 15 consecutive trading days and the Company
notifies the holder it intends to force a mandatory conversion of the Warrants
and the Holder fails to exercise the Warrant. The shares of Common Stock
issuable upon exercise of the Warrants have been registered with the Commission.
Registrar and Transfer Agent
The Registrar and Transfer Agent for the Company's Common Stock is
Corporate Stock Transfer, Inc., Denver, Colorado.
PLAN OF DISTRIBUTION
This Prospectus relates to 3,000,000 shares of Common Stock that may be
offered and issued by the Company from time to time in connection with future
Acquisitions of other businesses, properties, assets or securities of other
businesses. The Shares covered by this Prospectus may be issued in exchange for
shares of capital stock or other assets representing an interest, direct or
indirect, in other companies or other entities, for assets used in or related to
the business of such entities, or otherwise, pursuant to the agreements
providing for such Acquisitions. The terms of such Acquisitions and of the
issuances of the Shares of Common Stock will be determined by direct
negotiations with the owners or controlling persons of the business or
properties to be acquired or, in the case of entities that are more widely held,
through exchange offers to stockholders or documents soliciting the approval of
statutory mergers, consolidations or sales of assets. The Company expects that
any Shares that are issued in an Acquisition will be valued at a price
reasonably related to the market value of the Common Stock either at the time an
acquisition agreement is negotiated, executed or consummated.
The Shares may be issued without restrictive legend and, subject to any
lock-up agreements entered into with the Company, may be sold without
restriction. Prior to any use of this Prospectus for the resale of the Shares,
the Company will amend or supplement this Prospectus, if necessary, to set forth
the name of the Selling Stockholders, the number of Shares beneficially owned by
such Selling Stockholders, the number of Shares to be offered for resale by such
Selling Stockholders, and any other material information with respect to the
plan of distribution that has not previously been disclosed. The supplemented
or amended Prospectus will also disclose whether any Selling Stockholder has
held any position or office with, been employed by or otherwise had a material
relationship with, the Company or any of its affiliates during the three years
prior to the date of the supplemental or amended prospectus.
The Selling Stockholders and/or their assignees, transferees,
intermediaries, donees, pledgees or other successors may, from time to time,
sell the Shares for their own accounts and not for the account of the Company.
Alternatively, the Selling Stockholders may, from time to time, offer and sell
the Shares through underwriters, dealers, brokers or agents, or directly to one
or more purchasers. Such transactions may be effected by the Selling
Stockholders at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at negotiated prices, or at fixed prices,
which may be changed. The distribution of the Shares by the Selling
Stockholders may be effected from time to time in one or more transactions that
may
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take place in the over-the-counter market on Nasdaq including (a) ordinary
broker's transactions and transactions in which the broker solicits purchasers;
(b) privately negotiated transactions or pledges; (c) sales to one or more
broker/dealers for resale of such shares for their own account as principals,
pursuant to this Prospectus; (d) block trades (that may involve crosses) in
which the broker or dealer so engaged will attempt to sell the securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; or (e) in exchange distributions and/or secondary
distributions. Usual and customary or specifically negotiated brokerage fees or
commissions may be paid by the Selling Stockholders holders in connection with
such sales.
The Selling Stockholders, their assignees, transferees, intermediaries,
donees, pledgees or other successors in interest through whom the Shares are
sold may be deemed "underwriters" within the meaning of Section 2(11) of the
Securities Act, with respect to the Shares offered and any profits realized or
commissions received may be deemed to be underwriting compensation. Any broker-
dealers that participate in the distribution of the Shares also may be deemed to
be "underwriters", as defined in the Securities Act, and any commissions,
discounts, concessions or other payments made to them, or any profits realized
by them upon the resale of any shares purchased by them as principals, may be
deemed to be underwriting commissions or discounts under the Securities Act.
The Company will pay all expenses incident to the registration of the
Shares. The Company will not pay, among other expenses, commissions and
discounts of underwriters, dealers or agents or the fees and expenses of counsel
for the Selling Stockholders. In some cases, the Company may agree to indemnify
the Selling Stockholders and any broker-dealer that participates in transactions
involving the Sale of Shares against certain liabilities, including liabilities
under the Securities Act.
There can be no assurance that any of the Selling Stockholders will sell
any or all of the Shares of Common Stock offered by them hereunder.
This Prospectus also may be used, with the Company's consent, by assignees,
transferees, intermediaries, donees, pledgees or other successors of the Selling
Stockholders or by other persons acquiring the Shares who wish to offer and sell
such Shares under circumstances requiring or making desirable its use. The sale
of the Shares by the Selling Stockholders or any assignees, transferees,
intermediaries, donees, pledgees or other successors of the Selling Stockholders
is subject to the Prospectus delivery and other requirements of the Securities
Act. To the extent required, during any period in which offers or sales are
being made the Company will use its best efforts to file and distribute, one or
more amendments or supplements to this Prospectus or a new registration
statement with respect to the Shares to set forth the names of the Selling
Stockholders and describe any material information with respect to the plan of
distribution not previously disclosed in this Prospectus, including, but not
limited to, the number of shares being offered and the terms of the offering,
including the name or names of any underwriters, dealers or agents, if any, the
purchase price paid by the underwriter for Shares purchased from a Selling
Stockholder, and any discounts, commissions or concessions allowed or reallowed
or paid to dealers and the proposed selling price to the public.
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If Shares are sold in an underwritten offering, the Shares may be acquired
by the underwriters for their own account and may be further resold from time to
time in one or more transactions, including negotiated transactions, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices, or at fixed prices. The names of the
underwriters with respect to any such offering and the terms of the
transactions, including any underwriting discounts, concessions or commissions
and other items constituting compensation of the underwriters and broker-
dealers, if any, will be set forth in a supplement to this Prospectus relating
to such offering. Any public offering price and any discounts, concessions or
commissions allowed or reallowed or paid to broker-dealers may be changed from
time to time. Unless otherwise set forth in a supplement to this Prospectus, the
obligations of the underwriters to purchase the Shares will be subject to
certain conditions precedent and the underwriters will be obligated to purchase
all of the shares specified in such supplement if any such Shares are purchased.
If the Shares are sold in an underwritten offering, the underwriters may
engage in passive market making transactions in the Common Stock in accordance
with Rule 103 of Regulation M under the Exchange Act. In general, a passive
market maker may not bid for, or purchase, the Common Stock at a price that
exceeds the highest independent bid. In addition, the net daily purchases made
by any passive market maker generally may not exceed 30% of its average daily
trading volume in the Common Stock during a specified two month period, or 200
shares, whichever is greater. A passive market maker must identify passive
market making bids as such on the Nasdaq electronic inter-dealer reporting
system. Passive market making may stabilize or maintain the market price of the
Common Stock above independent market levels. Underwriters and dealers are not
required to engage in passive market making and may end passive market making
activities at any time.
In order to comply with certain states' securities laws, if applicable, the
Shares will be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in certain states the Shares may not be sold
unless the Common Stock has been registered or qualified for sale in such state
or an exemption from registration or qualification is available and is complied
with.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon by Snow
Becker Krauss P.C., 605 Third Avenue, New York, New York 10158. Snow Becker
Krauss P.C. owns 43,823 shares of the Company's Common Stock and individual
members of the firm own additional shares of Common Stock.
EXPERTS
The consolidated financial statements of AgriBioTech, Inc. as of June 30,
1997 and 1996 and for the years then ended and the nine-month period ended June
30, 1995, are incorporated by reference herein in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as
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experts in accounting and auditing. The report of KPMG Peat Marwick LLP refers
to the retroactive effect of a change in accounting for convertible preferred
stock.
The financial statements of Beachley Hardy Seed Company as of December 31,
1995 and 1994 and for the years then ended have been incorporated by reference
herein in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated by reference herein and upon the
authority of said firm as experts in accounting and auditing.
The combined financial statements of Germain's Inc. and W-L Research, Inc.
as of September 30, 1995 and 1994 and for the years then ended have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein and upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements of E.F. Burlingham & Sons as of
December 31, 1996 and for the year then ended, have been incorporated by
reference herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein and
upon the authority of said firm as experts in accounting and auditing.
The financial statements of Olsen Fennell Seeds, Inc. as of December 31,
1996 and for the year then ended have been incorporated by reference herein in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein and upon the authority of said
firm as experts in accounting and auditing.
The combined financial statements of Seed Corporation of America, Inc. and
Green Seed Company Limited Partnership as of December 31, 1997 and 1996 and for
the years then ended have been incorporated by reference herein in reliance upon
the report of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein and upon the authority of said firm as experts
in accounting and auditing.
The financial statements of Lofts Seed, Inc. as of November 30, 1997 and
December 31, 1996 and for the eleven-month period ended November 30, 1997 and
the six-month period ended December 31, 1996 have been incorporated by reference
herein in reliance upon the report of Cannon & Company, independent certified
public accountants, incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
The financial statements of Lofts Seeds, Inc. as of June 30, 1996 and 1995
and for the years then ended have been incorporated by reference herein in
reliance upon the report of Amper, Politziner & Mattia, independent certified
public accountants, incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
The financial statements of Budd Seed, Inc. as of November 30, 1997 and
December 31, 1996 and 1995 and for the eleven-month period ended November 30,
1997 and the years ended December 31, 1996 and 1995 have been incorporated by
reference herein in reliance upon the
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report of Cannon & Company, independent certified public accountants,
incorporated by reference herein and upon the authority of said firm as experts
in accounting and auditing.
The financial statement of Willamette Seed Co. as of June 30, 1997 and 1996
and for the years then ended have been incorporated by reference herein in
reliance on the report of Price, Koontz & Davies, P.C., independent certified
public accountants, incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
The financial statements of Van Dyke Seed Company, Inc. as of December 31,
1997 and for the year then ended, have been incorporated by reference herein in
reliance upon the report of Jones & Roth P.C., independent certified public
accountants, incorporated by reference herein and upon the authority of said
firm as experts in accounting and auditing.
The combined financial statements of Zajac Performance Seeds, Inc. et al.
as of December 31, 1997 and for the year then ended, have been incorporated by
reference herein in reliance upon the report of Ludwig Bulmer Seifert & Lane,
independent certified public accountants, incorporated by reference herein and
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Ramy Commercial Properties, Inc.
and Subsidiary as of June 30, 1997 and 1996, and for the years then ended, have
been incorporated by reference herein in reliance upon the report of Hawkins,
Ash, Baptie & Company, LLP, independent certified public accountants,
incorporated by reference herein and upon the authority of said firm as experts
in accounting and auditing.
The consolidated financial statements of Oseco Inc. as of June 30, 1997
and for the year then ended, have been incorporated by reference herein in
reliance upon the report of KPMG, chartered accountants, incorporated by
reference herein and upon the authority of said firm as experts in accounting
and auditing.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Available Information........................ 3
Information Incorporated by Reference........ 4
The Company.................................. 6
Acquisitions, Description of
Other Indebtedness and Recent Developments. 7
Risk Factors................................. 17
Use of Proceeds.............................. 26
Price Range of Common Stock.................. 26
Dividend Policy.............................. 27
Selected Financial Data...................... 27
Selling Stockholders......................... 27
Description of Capital Stock................. 27
Plan of Distribution......................... 29
Legal Matters................................ 31
Experts...................................... 31
</TABLE>
The Company has not authorized any person to give any information or to
make any representations in connection with original equity issuances by the
Company in connection with the Acquisitions or in connection with sales of the
shares by the Selling Stockholders other than those contained in this
Prospectus. You should not rely on any information or representations in
connection with such sales other than the information or representations in this
Prospectus. The information in this Prospectus is correct as of the date of
this Prospectus. You should not assume that there has been no change in the
affairs of the Company since the date of this Prospectus or that the information
contained in this Prospectus is correct as of any time after its date. This
Prospectus is not an offer to sell or a solicitation of an offer to buy the
Shares in any circumstances in which such an offer or solicitation is unlawful.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
- ------- -----------------------------------------
Except to the extent hereinafter set forth, there is no statute, charter
provision, by-law, contract or other arrangement under which any controlling
person, director or officer of the Registrant is insured or indemnified in any
manner against liability which he may incur in his capacity as such.
The Company maintains insurance protecting its directors and officers
against any liability asserted against or incurred by them in such capacity or
arising out of their status as such.
Article Ninth of the Registrant's Certificate of Incorporation provides for
the indemnification of directors and officers to the fullest extent allowed by
the Nevada General Corporation Law ("GCL"), which provides in relevant part as
follows:
Section 78.751:
Advancement of Expenses
1. Any discretionary indemnification under section 5 of this act, unless
ordered by a court or advanced pursuant to subsection 5, may be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.
2. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions
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of this subsection do not affect any rights to advancement of expenses to which
corporate personnel other than directors or officers may be entitled under any
contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to section 5 of this act or
for the advancement of expenses made pursuant to subsection 2, may not be made
to or on behalf of any director or officer if a final adjudication establishes
that his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
Indemnification of Officers, Directors, Employees and Agents.
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or
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settlement of the action or suit if he acted in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue or matter as
to which such a person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the corporation or
for amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, he must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense.
Section 78.752:
Insurance and Other Financial Arrangement Against Liability of Directors,
Officers, Employees and Agents.
1. A corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise for any
liability asserted against him and liability and expenses incurred by him in his
capacity as a director, officer, employee or agent, or arising out of his status
as such, whether or not the corporation has the authority to indemnify him
against such liability and expenses.
2. The other financial arrangements made by the corporation pursuant to
subsection 1 may include the following:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by granting a
security interest or other lien on any assets of the corporation.
(d) The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this subsection may provide protection
for a person adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable for intentional misconduct, fraud or a
knowing violation of law, except with respect to the advancement of expenses or
indemnification ordered by a court.
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<PAGE>
3. Any insurance or other financial arrangement made on behalf of a
person pursuant to this section may be provided by the corporation or any other
person approved by the board of directors, even if all or part of the other
person's stock or other securities is owned by the corporation.
4. In the absence of fraud:
(a) The decision of the board of directors as to the propriety of the
terms and conditions of any insurance or other financial arrangement made
pursuant to this section and the choice of the person to provide the insurance
or other financial arrangement is conclusive; and
(b) The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to personal liability
for his action, even if a director approving the insurance or other financial
arrangement is a beneficiary of the insurance or other financial arrangement.
5. A corporation or its subsidiary which provides self-insurance for
itself or for another affiliated corporation pursuant to this section is not
subject to the provisions of Title 57 of the Nevada Revised Statutes.
Article VI of the Registrant's Bylaws provides as follows:
Indemnification
---------------
On the terms, to the extent, and subject to the condition prescribed by
statute and by such rules and regulations, not inconsistent with statute, as the
Board of Directors may in its discretion impose in general or particular cases
or classes of cases, (a) the Corporation shall indemnify any person made, or
threatened to be made, a party to an action or proceeding, civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise which any director or officer of the
Corporation served in any capacity at the request of the Corporation, by reason
of the fact that he, his testator or intestate, was a director or officer of the
Corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees, actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, and (b) the Corporation may pay, in advance
of final disposition of any such action or proceeding, expenses incurred by such
person in defending such action or proceeding.
On the terms, to the extent, and subject to the conditions prescribed by
statute and by such rules and regulations, not inconsistent with statute, as the
Board of Directors may in its discretion
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impose in general or particular cases or classes of cases, (a) the Corporation
shall indemnify any person made a party to an action by or in the right of the
Corporation to procure a judgment in its favor, by reason of the fact that he,
his testator or intestate, is or was a director or officer of the Corporation,
against the reasonable expenses, including attorneys' fees, actually and
necessarily incurred by him in connection with the defense of such action, or in
connection with an appeal therein, and (b) the Corporation may pay, in advance
of final disposition of any such action, expenses incurred by such person in
defending such action or proceeding.
Item 21. Exhibits List and Reports on Form 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
5.1 Securities opinion of Snow Becker Krauss P.C.
*23.1 Consent of KPMG Peat Marwick LLP.
*23.2 Consent of Cannon & Company
*23.3 Consent of Price, Koontz & Davies, P.C.
*23.4 Consent of Amper, Politziner & Mattia
*23.5 Consent of KPMG, chartered accountants
*23.6 Consent of Jones & Roth P.C.
*23.7 Consent of Ludwig Bulmer Seifert & Lane
*23.8 Consent of Hawkins, Ash, Baptie & Company, LLP
23.9 Consent of Snow Becker Krauss P.C. is included in Exhibit 5.1 to this
Registration Statement.
*24.1 Power of Attorney (on signature page)
</TABLE>
___________________
* Filed with this Amendment No. 1 to the Registration Statement.
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<PAGE>
Item 22. Undertakings
- ------- ------------
The Registrant hereby undertakes:
(a) (1) To file, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus file with Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment shall be deemed a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
this offering.
(b) For purposes of determining any liability under the Securities Act,
each filing of registrant's annual report pursuant to section 13(a) or 15(d) of
the Securities Exchange Act of 1934
II-6
<PAGE>
(and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein and
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
issuer pursuant to the foregoing provisions, or otherwise, the issuer has been
advised that the in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the issuer of expenses
incurred or paid by a director, officer or controlling person of the issuer in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the issuer will, unless in the opinion of its counsel the matter has
bene settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be new a registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(f) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it became
effective, except where the transaction in which the securities being offered
pursuant to this registration statement would be exempt from registration (but
for the possibility of integration) and which have an immaterial effect on the
registrant.
(g) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is part of this Registration
Statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering
II-7
<PAGE>
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items of
the applicable form.
(h) That every prospectus (i) that is filed pursuant to paragraph (g)
immediately preceding, or (ii) that purports to meet the requirements of Section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be file das a part of an amendment to the
registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement on Form S-4 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Henderson, State of Nevada, on August 13, 1998.
AGRIBIOTECH, INC.
By: /s/ Johnny R. Thomas
---------------------------------
Johnny R. Thomas, Chairman
of the Board
POWER OF ATTORNEY
Each of the undersigned hereby authorizes Johnny R. Thomas or Henry A.
Ingalls as his attorneys-in-fact to execute in the name of each such person and
to file such amendments (including post-effective amendments) to this
registration statement as the Registrant deems appropriate and appoints such
persons as attorneys-in-fact to sign on his behalf individually and in each
capacity stated below and to file all amendments, exhibits, supplements and
post-effective amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Johnny R. Thomas Chairman of the Board (Principal August 13, 1998
- ----------------------- Executive Officer and Director
Johnny R. Thomas
* President and Director August 13, 1998
- -----------------------
Kent Schulze
* Vice President and Treasurer (Principal August 13, 1998
- ----------------------- Financial and Accounting Officer)
Henry A. Ingalls
* Vice President and Director August 13, 1998
- -----------------------
Scott J. Loomis
* Vice President, Secretary and Director August 13, 1998
- -----------------------
John C. Francis
* Director August 13, 1998
- -----------------------
James W. Hopkins
* Director August 13, 1998
- -----------------------
Richard P. Budd
</TABLE>
- --------
* The undersigned, by signing his name hereto, does hereby sign this
Registration Statement on behalf of the above-indicated officers and
directors of the Registrant pursuant to powers of attorney signed by such
officers and directors.
/s/ Johnny R. Thomas
- -----------------------------------
Johnny R. Thomas as Attorney-in-
fact
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Cannon & Company
23.3 Consent of Price, Koontz & Davies, P.C.
23.4 Consent of Amper, Politziner & Mattia
23.5 Consent of KPMG, chartered accountants
23.6 Consent of Jones & Roth P.C.
23.7 Consent of Ludwig Bulmer Seifert & Lane
23.8 Consent of Hawkins, Ash, Baptie & Company, LLP
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors AgriBioTech, Inc.
We consent to the use of our reports related to the consolidated financial
statements of AgriBioTech, Inc., the financial statements of Beachley-Hardy
Seed Company, the combined financial statements of Germain's Inc. and W-L
Research, Inc., the consolidated financial statements of E.F. Burlingham &
Sons, the financial statements of Olsen Fennell Seeds, Inc. and the combined
financial statements of Seed Corporation of America and Green Seed Company
Limited Partnership incorporated by reference herein and to the references to
our firm under the headings, "Selected Financial Data" and "Experts" in the
Prospectus.
Our report on the AgriBioTech, Inc. consolidated financial statements dated
September 26, 1997, except as to note 2(k) and the twelfth paragraph of note
7, which are as of February 10, 1998, refers to the retroactive effect of a
change in accounting for convertible preferred stock.
KPMG Peat Marwick LLP
Albuquerque, New Mexico
August 13, 1998
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We hereby consent to the use of our reports related to the financial
statements of Lofts Seed, Inc. and Budd Seed, Inc. herein and to the reference
to our firm under the heading "Experts" in the prospectus.
Cannon & Company
Winston-Salem, North Carolina
August 13, 1998
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We hereby consent to the use of our reports related to the financial
statements of Williamette Seed Co. herein and to the reference to our firm
under the heading "Experts" in the Prospectus.
Price, Koontz & Davies, P.C.
Albany, Oregon
August 13, 1998
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation of our report dated September 26, 1996 on
the financial statements of Lofts Seed, Inc. as of June 30, 1996 and 1995 and
for the years ended June 30, 1996 and 1995, which is included in this
Registration Statement of AgriBioTech, Inc. and to the reference to our firm
under the caption "Experts" in the Registration Statement.
Amper, Politziner & Mattia, P.A.
Edison, New Jersey
August 13, 1998
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
The Directors of Oseco Inc.
We consent to the incorporation by reference in the registration statement
on Form S-4, of AgriBioTech, Inc. of our report dated September 12, 1997
(except for note 10 which is as of June 12, 1998), with respect to the
consolidated balance sheet of Osceo Inc. as of June 30, 1997 and the
consolidated statements of income and retained earnings and changes in cash
resources for the year then ended, and to the reference to our firm under the
heading "Experts" in the Prospectus.
KPMG, Chartered Accountants
Mississauga, Canada
August 13, 1998
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We hereby consent to the use of our reports related to the December 31, 1997
financial statements of Van Dyke Seed Company, Inc. herein and to the
reference to our firm under the heading "Experts" in the Prospectus.
Jones & Roth, P.C.
Hillsboro, Oregon
August 13, 1998
<PAGE>
EXHIBIT 23.7
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We hereby consent to the use of our reports related to the combined
financial statements of Zajac Performance Seeds, Inc., et al herein and to the
reference to our firm under the heading "Experts" in the Prospectus.
Ludwig Bulmer Seifert & Lane
Hackensack, New Jersey
August 13, 1998
<PAGE>
EXHIBIT 23.8
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We hereby consent to the use of our reports related to the consolidated
financial statements of Ramy Commercial Properties, Inc. and Subsidiary herein
and to the reference to our firm under the heading "Experts" in the
Prospectus.
Hawkins, Ash, Baptie & Company, LLP
LaCrosse, Wisconsin
August 13, 1998
