<PAGE>
As filed with the Securities and Exchange Commission on October 26, 1998
Registration No. 333-_______
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
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: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
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]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please 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(c) 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
________________________________________________________________________________
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Offering Price Aggregate Amount of
Per Share (1) Offering Price(1) Registration Fee
------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 886,410(2) $12.00 $10,636,920 $2,957.06
</TABLE>
____________________
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933, as
amended.
(2) Represents shares issuable upon exercise of Common Stock Purchase Warrants
at $12.00 per share.
_____________________
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
_____________
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<PAGE>
SUBJECT TO COMPLETION, OCTOBER 26, 1998
The information in this Prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
AGRIBIOTECH, INC.
_________________________
The Offering:
Shares of Common Stock offered
by Selling Stockholders.......... 886,410
Offering price........................ The Selling Stockholders (as defined
below) may offer the shares for sale on
the Nasdaq National Market at the market
price at the time of the sale. The
Selling Stockholders may also offer the
shares in privately negotiated
transactions either at the market price
at the time of the sale, at a price
related to the market price or at a
negotiated price. On October 22, 1998,
the closing sale price of AgriBioTech
common stock ("Common Stock") on the
Nasdaq National Market was $11.25 per
share.
Nasdaq National Market Symbol........ ABTX
_________________________
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 12.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_________________________
___________, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
WHERE YOU CAN FIND MORE INFORMATION............................. -3-
PROSPECTUS SUMMARY.............................................. -4-
WEB SITE DISCLOSURES............................................ -5-
RISK FACTORS.................................................... -12-
USE OF PROCEEDS................................................. -19-
PRICE RANGE OF COMMON STOCK..................................... -20-
DIVIDEND POLICY................................................. -20-
SELLING STOCKHOLDERS............................................ -21-
DESCRIPTION OF CAPITAL STOCK.................................... -23-
PLAN OF DISTRIBUTION............................................ -25-
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES............................. -27-
LEGAL MATTERS................................................... -27-
EXPERTS......................................................... -28-
</TABLE>
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<PAGE>
Unless the context indicates otherwise, the terms the "Company" and
"ABT," or references to "we," "us," and "our" in this Prospectus refer to
AgriBioTech, Inc. and its subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
ABT is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act"). In accordance with the Exchange Act,
we file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
inspect and copy any document we file at the SEC's public reference rooms in
Washington, D.C. at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
SEC's Northeast Regional Office at Seven World Trade Center, New York, New York
10048, and at the Midwest Regional Office at 500 West Madison Street, Chicago,
Illinois 60611-2511. You may also purchase copies of our SEC filings, by writing
to the SEC, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C.
20549 or on the SEC's Worldwide Web site at http://www.sec.gov. You may find
additional information about ABT at our Web site at http://www.agribiotech.com.
This Prospectus is part of a registration statement on Form S-3 that we
have filed with the SEC. The SEC allows us to "incorporate by reference"
information that we file with them. This means that we can disclose important
information to you by referring you to other documents that we have filed with
the SEC. The information that is incorporated by reference is considered part of
this Prospectus, and information that we file later will automatically update
and may supersede this information. For further information about ABT and the
securities being offered, you should refer to the registration statement and the
following documents that are incorporated by reference. Prospectus:
(i) Our Annual Report on Form 10-K for the fiscal year ended June 30,
1998 ("Form 10-K");
(ii) Our Quarterly Report on Form 10-QSB for the fiscal quarter ended
March 31, 1996 (as amended on July 12, 1996);
(iii) Our Current Reports on Form 8-K for October 30, 1996 (as amended on
January 13, 1997, February 17, 1998 and August 11, 1998), 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), June 30, 1998, and August 28, 1998 (Forms "8-
K");
(iv) The description of our Common Stock, $.001 par value, in our
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;
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<PAGE>
(v) Our Proxy Statement dated January 20, 1998 for our Annual Meeting held
on February 23, 1998; and
(vi) All documents we file 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.
You may request a copy of all documents that are incorporated by reference
in this Prospectus by writing or telephoning us at the following address:
AgriBioTech, Inc., Attention: Secretary, 120 Corporate Park Drive, Henderson, NV
89014; telephone number (702) 566-2440. We will provide copies of all documents
requested (not including the exhibits to those documents, unless the exhibits
are specifically incorporated by reference into those documents or this
Prospectus) without charge.
ABT has not authorized any person to give any information or to make any
representations 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 ABT 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 shares in any circumstances in which such an
offer or solicitation is unlawful.
PROSPECTUS SUMMARY
This summary highlights selected information from this Prospectus and may
not contain all the information that is important to you. To understand the
circumstances and terms of the offering and for complete information about ABT,
you should read this entire document and the information incorporated by
reference, including the financial statements and the notes to the financial
statements.
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, we have completed
33 acquisitions and, including net sales from the businesses we have acquired,
we have grown from net sales of $29,000 in fiscal 1994 to pro forma net sales of
approximately $429 million for the fiscal year ended June 30, 1998. Our
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 us, and national
and international sales and distribution networks. ABT's headquarters are
located at 120 Corporate Park Drive, Henderson, NV 89014; telephone (702) 566-
2440.
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THE OFFERING
We are registering 886,410 shares of our Common Stock for issuance to and
resale by certain investors that purchased Common Stock purchase warrants (the
"Warrants") from us in private transactions that were exempt from the
registration requirements of the Securities Act of 1933 (the "Securities Act").
The Warrants give those investors the right to purchase shares of our Common
Stock at $12.00 per share at any time for three years from the date they were
issued. The investors are collectively referred to as the "Selling Stockholders"
and the shares issuable to them are referred to as the "Selling Stockholder
Shares."
We are registering the Selling Stockholder Shares pursuant to our
agreements with the Selling Stockholders. We also agreed to pay the expenses of
this registration, which we estimate will be approximately $25,000. Each of the
Selling Stockholders will pay the cost of all brokerage commissions and
discounts, and all expenses incurred by them in connection with sales of their
Selling Stockholder Shares.
Commencing on the effective date of this Prospectus, the Selling
Stockholders may, from time to time, sell, transfer or pledge their Selling
Stockholder Shares directly to purchasers, transferees or pledgees. The Selling
Stockholders may also offer their Selling Stockholder Shares through agents,
brokers, dealers or underwriters who may receive compensation in the form of
commissions or discounts. We anticipate that the Selling Stockholders will offer
the Selling Stockholder Shares either on the Nasdaq National Market or in
privately negotiated transactions or by both methods. We expect the price for
the Selling Stockholder Shares to be the market price prevailing at the time of
sale, a price related to the prevailing market price or a negotiated price.
Prior to selling any of their shares, the Selling Stockholders must satisfy the
Prospectus delivery and other requirements of the Securities Act. See "Plan of
Distribution."
USE OF PROCEEDS
ABT will not receive any proceeds from the sale of the Selling Stockholder
Shares by the Selling Stockholders. We will receive gross proceeds of up to
$10,636,920 from the exercise of the Warrants, which we will use to fund the
cash portion of acquisitions and/or for working capital purposes.
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 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
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<PAGE>
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, weather conditions,
volatility of common stock prices, 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.
The Company has made certain other forward-looking and other statements
(the "Prior Statements") in prior versions of its Web Site which were included
in registration statements filed previously with the Commission. The Prior
Statements include: (a) Chairman's Update dated March 7, 1998; (b) Chairman's
Update dated April 1, 1998; (c) Chairman's Update dated June 22, 1998; and (d)
Chairman's Update dated September 1, 1998.
The Company has deleted each of the Prior Statements in its entirety from
its Web Site. As a result, the Prior Statements are deemed not incorporated by
reference into this document and shall be deemed to be superseded for purposes
of this registration statement, in accordance with the terms of Rule 412
promulgated under the Securities Act. The Company may make other Statements that
are "forward-looking statements" as defined in Section 27A of the Securities Act
and Section 21E of the Exchange Act.
CHAIRMAN'S UPDATE
The Company's Chairman of the Board and Chief Executive Officer, Johnny R.
Thomas, from time to time informs the public as to current events concerning the
Company by posting on the Company's Web Site what the Company calls a
"Chairman's Update". The current Chairman's Update, which superseded all prior
ones, is dated October 9, 1998, and is reprinted in its entirety as follows:
Dear AgriBioTech Shareholders:
Yesterday, your Company made the following announcement. "ABT has retained
Merrill Lynch & Co. as its investment banker, primarily to explore alternatives
to maximize shareholder value. In light of the dramatic and recent acceleration
in consolidation of the seed industry, the ABT Board of Directors has determined
that this is the appropriate time to evaluate strategic alternatives."
Why, did we take this step at this time? Answer, we believe it will
maximize shareholder value. Two parameters have changed over the past two
months.
(1) There are more large companies seeking to invest in the
biotechnology/seed arena today, than there was a few months ago. Recent
transactions, such as AgrEvo's purchase of Cargill's U.S. seed business and
Dow's purchase of Mycogen, during a time when public stock markets were
turbulent, were particularly enlightening.
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<PAGE>
(2) Your Company's stock is greatly undervalued relative to other seed
company valuations due to external forces independent of the Company and its
actions. Consequently, the cost of capital in public markets is significantly
higher today than it was two months ago.
Management is confident that potential capital raised through private
equity from life science companies will be significantly less than today's cost
in the public arena. Future Chairman's updates are not likely while this process
is being formulated and actioned. As always, I appreciate your past and
continued support.
Sincerely yours,
Johnny R. Thomas
Chairman/CEO
1997 ANNUAL REPORT TO SHAREHOLDERS
The following section consists of statements from the Company's 1997 Annual
Report to Shareholders, which is not a document incorporated by reference in
this Registration Statement.
(a) 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.
(b) Chief Executive Officer's Letter.
--------------------------------
Dear Fellow Shareholders:
"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."
(c) Industry and Strategy Review.
----------------------------
Industry Overview. "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 herb icide) 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."
(d) Business Strategy and Operations.
--------------------------------
Management and Leadership. 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,
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<PAGE>
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.
"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.
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<PAGE>
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 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
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$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.
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
Before you invest in our Common Stock, you should be aware that there are
various risks, including those described below, that may affect our business,
financial condition and results of operations. We caution you, however, that
this list of risk factors may not be exhaustive, particularly with respect to
future filings.
You should also be aware that this Prospectus contains forward-looking
statements. Forward looking statements discuss future expectations, contain
projections of results of operations or financial condition, and general
business prospects. Words such as "expects," "may," "will," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," and similar expressions
identify forward-looking statements. The forward-looking statements in this
Prospectus reflect the good faith judgment of the Company's management. However,
forward-looking statements can only be based on facts and factors currently
known. Consequently, actual results and outcomes may differ materially from the
results and outcomes discussed in the forward-looking statements. You should
carefully consider the risk factors described below together with all of the
other information included or incorporated by reference in this Prospectus
before you decide to purchase shares of our Common Stock.
Recent Rapid Growth; Ability to Manage Growth. We have acquired all or
---------------------------------------------
part of 33 businesses in the forage and turfgrass seed sector since January 1,
1995 and currently intend to further expand current levels of operations. As a
result of these acquisitions, we have experienced significant revenue growth and
expanded the number of our employees and the geographic scope of our operations.
These factors have resulted in increased responsibilities for management
personnel. This rapid growth has placed and may continue to place significant
demands on our management, technical, financial and other resources. In
addition, successful expansion of our operations will depend on, among other
things, our ability to attract, hire and retain skilled management and other
personnel, secure adequate sources of seed on commercially reasonable terms and
successfully manage growth. To manage growth effectively, we will need to
improve operational, financial and management information systems, procedures
and controls. We may not be able to manage future growth effectively, and
failure to do so could have a material adverse effect on our business, financial
condition and/or operating results. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in the Form 10-K ("MD&A"), and
"Description of Business - Acquisition Program" in the Form 10-K.
Integration of Acquisitions. Our future success depends upon our ability
---------------------------
to combine the operations of the businesses we have acquired and businesses we
may acquire in the future into a vertically integrated company. This process is
made more difficult by the fact that our subsidiaries are geographically
disparate and represent the full spectrum of the forage and turfgrass seed
production, processing, sales and distribution process, rather than just one
component of this process. You should therefore evaluate our prospects in light
of the problems, expenses, delays and complications associated with operating,
managing and integrating a large
-12-
<PAGE>
group of diverse businesses. We may not be able to effectively integrate all of
the businesses we have acquired or that we acquire in the future. If we cannot
successfully integrate these businesses, our business, financial condition
and/or operating results may be materially adversely affected. See "MD&A" and
"Description of Business - Acquisition Program" in the Form 10-K.
No Assurance of Future Acquisitions. We have 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"), $205 million in the fiscal year ended June 30, 1998
("Fiscal 1998") and pro forma net sales of approximately $429 million for Fiscal
1998. This growth was primarily a result of the businesses that we have
acquired. Our future growth depends upon our ability to continue to make
acquisitions, and to increase sales from existing operations. We may not be
successful in doing either.
While we have been able to acquire 33 businesses since January 1995, we may
not make as many acquisitions in the future. We are unable to predict whether
and when any prospective business will become available or the likelihood that
any acquisition will be completed. We also may, in certain circumstances,
compete for businesses with entities that have substantially greater resources
than we do.
Potential Liabilities Associated with Acquisitions. The businesses that we
--------------------------------------------------
have acquired may have existing liabilities that we did not discover or may have
been unable to discover during our pre-acquisition investigation. These
liabilities may arise from environmental contamination or non-compliance by
prior owners with environmental laws or regulatory requirements. In addition,
environmental laws or regulatory requirements may change in the future with
retroactive effect. If that were to happen, we could have liabilities that
result from the conduct of prior owners of the property. Any indemnities or
warranties that we receive from prior owners may not fully cover such
liabilities due to their limited scope, amount or duration, the financial
limitations of the indemnitor or warrantor, or for other reasons. If we are
held responsible for liabilities from acquired businesses, our operations may be
materially adversely affected.
Development of New Products. We are developing new, genetically superior
---------------------------
forage and turfgrass varieties. We believe that the development and marketing
of these elite varieties will play a key role in our success. There can be no
assurance that we will successfully develop genetically superior strains either
through our own efforts or with industry partners. If we are not able to
develop and successfully market new product lines, our business, financial
condition and results of operations may be materially adversely affected. See
"Description of Business--Research and Development" in the Form 10-K.
Market Acceptance. Even if we are successful in developing genetically
-----------------
superior forage and turfgrass varieties, there can be no assurance that there
will be a market for such products. Even if a market for these products
develops, there can be no assurance that we will recoup the
-13-
<PAGE>
costs associated with developing and marketing them. If we cannot effectively
market new products we develop at prices sufficient to cover costs and generate
adequate return on capital, our business, financial condition and results of
operations may be materially adversely affected.
Reliance on Patents and Proprietary Rights. We own the proprietary rights
------------------------------------------
to a number of forage and turfgrass species that are protected under the Plant
Variety Protection Act ("PVPA") and are seeking to acquire and/or develop other
PVPA protected varieties. The PVPA prohibits others from selling seed of
proprietary varieties for 20 years. However, these proprietary rights may be
challenged, invalidated or circumvented. In addition, others could claim that
products that we develop violate their proprietary rights. We may incur
substantial costs in asserting our proprietary rights against others, and/or
defending any infringement suits brought against us by others. The proprietary
rights we own may not provide us with a competitive advantage. It is also
possible that our competitors possess protected varieties that perform better
than ours. See "Description of Business--Proprietary Rights" in the Form 10-K.
Access to Biotechnology. Breakthroughs in biotechnology have led to the
-----------------------
introduction of new, improved and specialized seeds in the corn, soybean and
cotton seed sectors. By introducing specialized seeds developed through
biotechnology, companies in these seed sectors have improved margins and
increased profitability. We believe that similar biotechnology breakthroughs
will also lead to the introduction of enhanced seeds in the forage and turfgrass
seed sector. This in turn will allow improved margins and greater profitability
for forage and turfgrass seed companies. Our objective is to become the
licensee or partner of choice in our seed sector for owners of value-added
genetic traits developed through biotechnology. If we cannot license value-
added genetic traits, or if we cannot develop and market commercially viable
products from such licenses at prices sufficient to cover costs and generate
adequate return on capital, our business, financial condition and results of
operations may be materially adversely affected. See "Description of Business--
Proprietary Rights" in the Form 10-K.
Competition. The seed industry and the field of agricultural technology
-----------
are both highly competitive. 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.
This is the opposite of our business strategy, which is to treat forage and
turfgrass seed as our primary product. Therefore, our major competitors in the
forage and turfgrass seed sector 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.
Our largest United States competitors in the alfalfa seed industry are
Cenex/Land O'Lakes/Research Seed, Helena/AgriPro, Pioneer and Cal/West Seeds,
each of which we estimate has annual alfalfa seed sales of between $20 and $60
million. Our largest competitors for forages other than alfalfa are FFR
Research and its farm cooperative members. We also
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<PAGE>
compete with small family owned businesses that are strong competitors in small
geographic areas. In the cool-season turfgrass seed industry we compete with a
number of companies 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.
Although many of our competitors are small family owned businesses and
regional companies, any of the major agricultural seed companies may decide to
intensify their efforts in the forage and turfgrass seed sector. Accordingly we
compete with, and expect to continue to compete with, companies with
substantially greater financial, marketing, personnel and research and
development resources. We may not 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-K.
Lack of Historical Profitability; Accumulated Deficit. Over the life of
------------------------------------------------------
the Company, we have not shown consistent profitability. We have reported only
three profitable quarters since becoming a publicly owned company in September
1993 and Fiscal 1998 was our first profitable year. We had an accumulated
deficit of $12,037,840 through June 30, 1998.
Substantial Indebtedness; Effects of Financial Leverage. We have
-------------------------------------------------------
indebtedness that is substantial in relation to our stockholders' equity, and
interest and debt service requirements that are significant compared to our cash
flow from operations. As of June 30, 1998, we had approximately $65 million of
short-term debt and long-term obligations outstanding. We also have a revolving
credit facility (the "Revolving Credit Facility") under which we may incur up to
$100 million of indebtedness (subject to a borrowing base computation and
compliance with certain financial covenants). As of September 28, 1998, we have
borrowed approximately $86 million under the Revolving Credit Facility and $14
million was available to be borrowed.
The degree to which we are leveraged could have important consequences to
you. For example: (i) our level of indebtedness could make it more difficult to
satisfy our debt repayment obligations; (ii) our level of indebtedness could
increase our vulnerability to general adverse economic and industry conditions;
(iii) a substantial portion of our cash flow from operations must be dedicated
to debt service and is, therefore, not available for operations and other
purposes; (iv) our 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) our leverage position and
covenants contained in the Revolving Credit Facility could limit our ability to
expand, compete and make capital improvements; and (vi) our borrowings under
the Revolving Credit Facility are and will continue to be at variable rates of
interest, which exposes us to the risk of increased interest rates.
Our ability to pay interest on the Revolving Credit Facility and to satisfy
our other obligations depends upon our future financial and operating
performance. Our financial and operating performance may be affected by
prevailing economic conditions and financial,
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<PAGE>
business, competitive, regulatory and other factors that are beyond our control.
Our cash flow from operations has not been sufficient to meet our debt service
obligations without additional equity and debt financings. We may not have
sufficient funds in the future to meet our obligations under the Revolving
Credit Facility and any other indebtedness that we may incur. This is
particularly true as we continue to expand operations. If we are unable to
service our indebtedness, we will be forced to adopt an alternative strategy
that may include reducing or delaying capital expenditures, scaling back
expansion efforts, selling assets, restructuring or refinancing indebtedness or
seeking additional equity capital. We may not be able to implement any of these
strategies on terms acceptable to us. See "MD&A."
Restrictions Imposed by Terms of Certain Indebtedness. The Revolving
-----------------------------------------------------
Credit Facility contains certain restrictive covenants that limit us in many
ways. These restrictive covenants may significantly limit or prohibit us from
incurring indebtedness, making prepayments of certain indebtedness, paying
dividends, making investments, engaging in certain transactions with affiliates,
creating liens, selling assets and engaging in mergers and corporate
consolidations. The Revolving Credit Facility also requires us to maintain
specified financial ratios and to satisfy certain financial condition tests.
Our ability to comply with these restrictions and to meet those financial
ratios and financial condition tests can be affected by events and factors
beyond our control (e.g., the general economy and the weather). A breach of any
of these covenants could constitute an event of default under the Revolving
Credit Facility.
Our obligations under the Revolving Credit Facility are secured by
substantially all of our assets, except fixed assets and real estate. If there
were an event of default under the Revolving Credit Facility, the lenders could
declare the total amount outstanding, together with accrued interest,
immediately due and payable. If this were to happen we might not be able to
repay the amount owed plus our other debt obligations. If we 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. See "MD&A."
Need for Additional Capital. Our capital requirements have been and are
---------------------------
expected to remain significant. Our capital requirements depend on many
factors. These factors include the timing and cost of future acquisitions, the
time and cost involved in integrating completed acquisitions, and our success at
expanding existing operations. However, we may need to seek an increase in or
an alternative to the Revolving Credit facility to finance increased operating
needs resulting from unexpected changes in seasonality or weather patterns, or
if acquisitions are completed more rapidly than anticipated. In addition, we
will need additional capital to fund acquisitions and to repay $30 million
principal amount of interim bridge financings due at the end of 1998. If we are
unable to obtain additional capital, we will be unable to fund additional
acquisitions and expand our operations. In that case, we may have to delay or
abandon certain development and expansion plans. We believe that we will have
funds available under the Revolving Credit Facility to fund operations through
June 30, 1999. See "MD&A."
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<PAGE>
Dependence on Key Personnel. Our success depends in large part on the
---------------------------
efforts, abilities and expertise of Dr. Johnny R. Thomas, Chief Executive
Officer, and the four other executive officers. The loss of any of these key
personnel could have a material adverse effect on the Company's business,
financial condition and results of operations. We have obtained a key-man life
insurance policy in the amount of $3 million on the life of Dr. Thomas. Our
prospects also depend upon our ability to attract and retain qualified
marketing, financial, management information system, and other technical
personnel. Competition for qualified personnel is intense and there can be no
assurance that we will be successful in attracting or retaining such personnel.
See "Management" in the Form 10-K.
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 and demand. Demand for seed by farmers is
determined by the general farm economy. In addition, a variety of nature's
adversities affect the production of seed. For example, drought, wind, hail,
disease, insects, early frost and numerous other forces could adversely affect
the growing of seed in any growing season. This, in turn, could result in large
fluctuations in our results of operations between quarters. See "MD&A--
Seasonality of Business and Quarterly Comparisons" in the Form 10-K.
Seasonality of Quarterly Results. Our sales are subject to wide seasonal
--------------------------------
fluctuations that reflect the typical purchasing and growing patterns for forage
and turfgrass crops. Also, because the purchasing and growing patterns are
different for forage and turfgrass seeds, our sales are affected by the
breakdown of our product mix. In addition, weather affects commodity prices,
seed yields and planting decisions by farmers. Results of operations from
quarter to quarter do not necessarily reflect the results that may be expected
for any other interim period. Quarterly results also do not indicate the
results that may be expected for the entire year. See "MD&A--Seasonality of
Business and Quarterly Comparisons" in the Form 10-K.
Government Regulation. Our operations are directly and indirectly subject
----------------------
to various Federal and state environmental controls and regulations. We believe
that we are in substantial compliance with existing environmental regulations.
However, these regulations may be changed with retroactive effect and new laws
or regulations may be promulgated at any time. If existing environmental
regulations are changed, or additional laws or regulations are promulgated, the
cost of complying with those laws may be substantial.
The United States Department of Agriculture, the Food and Drug
Administration, the Environmental Protection Agency (the "EPA"), and various
state agencies regulate the development of seed of genetically altered plants.
The regulatory agencies that administer existing or future regulations or
legislation may not allow us to produce and market genetically engineered seed.
Even if we are legally permitted to produce and market genetically engineered
seed, existing or future regulations and legislation may prevent us from doing
so in a timely manner or under technically or commercially feasible conditions.
See "Description of Business-Government Regulation" in the Form 10-K.
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<PAGE>
Adverse Effect of Potential Future Sales of Common Stock. As of October
--------------------------------------------------------
14, 1998, we had 39,417,613 shares of Common Stock issued and outstanding. Of
these shares, approximately 6,934,000 shares are "restricted securities" as that
term is defined in Rule 144 under the Securities Act. All but approximately
1,000,000 of these restricted shares have been registered for resale under the
Securities Act. We also have approximately 8.9 million shares of Common Stock
available for issuance without restriction upon exercise of outstanding options.
We cannot predict what effect sales of these shares may have on the existing
market price of our Common Stock. It is possible that the sale of these shares,
or even the potential for such sales, may have a depressive effect on the price
of our Common Stock in the public trading market. Any such depressive effect
could impair the Company's ability to raise additional equity capital.
Any of the Selling Stockholders or any person who is an affiliate of the
Selling Stockholders who publicly offers or sells our securities may be deemed
to be an underwriter pursuant to 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
Selling Stockholder Shares, unless such sales are made in accordance with the
provisions of Rule 144. Under rule 144, if we are in compliance with certain
public information requirements, holders of restricted securities that have held
those securities for at least one year may sell limited amounts of those
securities. Rule 144 also permits non-affiliates to sell restricted securities
free of any volume limitations if those securities have been held for at least
two years.
Public Market Risks; Possible Volatility of Securities Prices. The market
-------------------------------------------------------------
price for our securities has been and may continue to be volatile. Factors such
as our financial results, financing efforts, changes in earnings estimates by
analysts, conditions in our business and various factors affecting the
agriculture industry generally may have a significant impact on the market price
of our securities. Additionally, in the last several years, the stock market
has experienced a high level of price and volume volatility. During this period
the market prices for many companies, particularly small and emerging growth
companies like ours, have experienced wide price fluctuations and volatility
that have not necessarily been related to the operating performance of those
companies. Our operating results are also tracked by professional analysts. If,
in some future quarter, our operating results are below the expectations of
these analysts, the price of our securities may be materially adversely
affected. These factors and general economic and market trends may adversely
affect the price of our securities. See "Market for Common Equity and Related
Stockholder Matters" in the Form 10-K.
Immediate Substantial Dilution. Net tangible book value per share is equal
------------------------------
to the total tangible assets of a company less total liabilities divided by the
number of shares of common stock outstanding. Because our present stockholders
acquired their shares of Common Stock at costs substantially less than the price
that you will pay in this offering, if you purchase Common Stock in this
offering, you will incur an immediate and substantial dilution in pro forma net
tangible book value per share. This means that the net tangible book value per
share of our Common Stock is less than the price you paid.
-18-
<PAGE>
Management Information Systems and the Year 2000 Risks. Because of the
------------------------------------------------------
large number of businesses we have acquired, we have several different data
processing systems in use. These systems are substantially the same systems
that were in use by the acquired companies prior to their acquisition by ABT.
Our preliminary assessment of these systems is that they generally are not Year
2000 compliant. Local area networks (LANs), desktop hardware, and desktop
operating systems in some cases also are not compliant. Although we have
determined that some of the non-compliant systems can be updated to be
compliant, a number of them can not be updated because of software and hardware
limitations.
To address this issue and integrate all our information systems into one
company-wide system, we have contracted for software, hardware and consulting
services to implement an enterprise resource planning ("ERP") system. The ERP
system and related network and hardware systems are Year 2000 compliant. All
non-compliant desktop and LAN systems will be converted either through normal
attrition or through the ERP system implementation. We expect the cost of this
implementation to be approximately $6 million, including internal costs for
personnel, training, supplies, travel and equipment. We believe that we have
allocated adequate resources to ensure that all our information systems are Year
2000 compliant. We expect to complete the ERP system implementation prior to
January 1, 2000.
The ability of third parties with whom we do business to adequately address
their Year 2000 issues is outside of our control. We are taking steps to
confirm that the systems of our suppliers and customers are Year 2000 compliant
and to determine whether any noncompliance would have a material adverse effect
on us. If we cannot complete the ERP system implementation before January 1,
2000, or if a significant portion of our suppliers or customers fail to
adequately address their Year 2000 issues, our business, financial condition,
cash flows and operations may be materially adversely affected. See "MD&A."
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Selling
Stockholder Shares by the Selling Stockholders. Any proceeds received by the
Company from the exercise of the Warrants by the Selling Stockholders in an
amount of up to $10,636,920 of gross proceeds will be used to fund the cash part
of acquisitions and/or for working capital purposes.
-19-
<PAGE>
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 1997 and Fiscal 1998, on the Nasdaq
SmallCap Market until February 13, 1997 and on the Nasdaq National Market
thereafter.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
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
FISCAL 1999
July 1, 1998-September 30, 1998........ $25 3/4 $ 8 1/8
October 1, 1997-October 22, 1998....... $11 1/4 $ 8 15/16
</TABLE>
As of October 14, 1998, the Company had 462 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 dividends on its Common Stock.
The Company and its Board of Directors currently intend to retain any earnings
for use in the operation and expansion of the Company's business and do not
anticipate paying any dividends on the Common stock for the foreseeable future.
The Company's Revolving Credit Facility prohibits the payment of cash dividends
without the lenders' approval.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information as of October 14, 1998,
based on information obtained from the Selling Stockholders named below with
respect to the beneficial ownership of 886,410 Selling Stockholder Shares being
registered hereunder; the number of shares of our Common Stock known to us to be
held by each; the number of shares of our Common Stock to be sold by each; and
the percentage of outstanding shares of Common Stock beneficially owned by each
before this offering and after this offering.
<TABLE>
<CAPTION>
Percentage of
Amount and Outstanding
Nature of Number of Shares Owned
-------------------------
Beneficial Shares Before After
Name Ownership(1) Offered Hereby Offering (2) Offering
---- ------------ -------------- ------------ ----------
<S> <C> <C> <C> <C>
Quantum Partners LDC 4,562,882 (3) 570,000 (4) 11.2% 10.1%
Fidelity Commonwealth
Trust: Fidelity Small Cap
Stock Fund 3,732,000 (5)(6) 60,000 (4) 9.5% 9.3%
Capilla Holdings LLC (7) 256,410 256,410 (4) * *
-------
Total . . . . . . . . . . . . . 886,410
=======
</TABLE>
- ---------------------
* Less than 1%
(1) Unless otherwise noted, the Company believes that all persons named in
the table have sole investment power with respect to all shares of
Common Stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities that can be acquired by such person
within 60 days from the date hereof upon the exercise of warrants or
options. Assumes, for each person, that any exercisable and convertible
securities that are held by such person (but not those held by any
other person) and that are exercisable or convertible within 60 days
from the date hereof have been exercised. None of the Selling
Stockholders has had any position, office or other material
relationship with the Company other than as a shareholder during the
past three years.
(2) Based on 39,417,613 shares of Common Stock issued and outstanding as of
October 14, 1998.
(3) Includes 344,900 and 570,000 shares issuable upon conversion of
warrants issued in private placements on May 13, 1998 and August 28,
1998, respectively. Soros Fund Management LLC ("SFM LLC") serves as
principal investment manager to Quantum
-21-
<PAGE>
Partners LDC and as such, has been granted investment discretion over
Quantum Partners' Shares. In such capacity SFM LLC may be deemed to
have voting and dispositive power over such Shares. Mr. George Soros,
as Chairman of SFM LLC, and Mr. Stanley Druckenmiller, as Lead
Portfolio Manager of SFM LLC, may also be deemed to have voting and
dispositive power over such Shares.
(4) These shares are issuable upon conversion of Warrants issued in a
private offering pursuant to securities purchase agreements dated
August 28, 1998.
(5) Includes 60,000 shares issuable upon conversion of Warrants issued in a
private placement on August 28, 1998 held in the nominee name of Mag &
Co.
(6) FMR Corp., a Massachusetts corporation, has filed with the SEC a
Schedule 13-G dated October 9, 1998, showing an aggregate of 3,732,000
shares of Common Stock of the Company beneficially owned by the
following entities: Fidelity Commonwealth Trust: Fidelity Small Cap
Stock Fund ("Fidelity Small Cap Stock Fund") is either an investment
company or a portfolio of an investment company registered under
Section 8 of the Investment Company Act of 1940, as amended, or a
private investment account advised by Fidelity Management & Research
Company ("FMR Co."). FMR Co. is a Massachusetts corporation and an
investment advisor registered under Section 203 of the Investment
Advisors Act of 1940, and is a wholly-owned subsidiary of FMR Corp. As
of September 30, 1998, FMR Co. was the beneficial owner of 3,580,800
shares of Common Stock of the Company as a result of acting as
investment advisor to Fidelity Small Cap Stock Fund and other
registered investment companies and to certain other funds that are
generally offered to a limited group of investors. In addition,
Fidelity Management Trust Company, a wholly-owned subsidiary of FMR is
the beneficial owner of 41,200 shares of Common Stock of the Company as
a result of its serving as investment manager of institutional
accounts. Fidelity International Limited ("FIL"), a related, but
independent entity, provides investment advisory and management
services to a number of non-U.S. investment companies and certain
institutional investors and, as a result, is the beneficial owner or
110,000 shares of Common Stock of the Company.
(7) The beneficial owner of the shares owned by this entity is Helen
Thomas, the wife of Johnny R. Thomas, the Company's Chairman of the
Board. The Warrants were purchased by this entity as a standby
purchaser when the fund which had initially subscribed for such
Warrants was precluded from purchasing unregistered securities. Mrs.
Thomas has no other relationship with the Company. Dr. Thomas disclaims
beneficial ownership of these shares.
Because the Selling Shareholders may offer all or some portion of the
above referenced securities pursuant to this Prospectus or otherwise, no
estimate can be given as to the amount or percentage of such security that will
be held by the Selling Shareholders upon termination of any such sale. In
addition, the Selling Shareholders may have sold, transferred or otherwise
disposed
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<PAGE>
of all or a portion of such securities since October 14, 1998 in transactions
exempt from the registration requirements of the Securities Act. The Selling
Shareholders may sell all, part, or none of the securities listed above.
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 ("Preferred Stock").
COMMON STOCK
The Company is authorized to issue 75,000,000 shares of Common Stock,
$.001 par value per share, of which 39,417,613 shares were issued and
outstanding as of October 14, 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 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 5,122,975 (13%) of the shares
outstanding and 7,507,975 shares or (18%), after giving full effect to the
exercise of their respective options exercisable within 60 days of October 14,
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,
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<PAGE>
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 "Redeemable Warrants") to purchase
shares of its Common Stock. The Redeemable 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 Redeemable Warrants are exercisable at a price of $17.50 per
share for three years commencing on their respective dates of issuance. The
Redeemable Warrants are subject to redemption at $.01 per Redeemable Warrant on
five prior business days' notice if the closing sale price of the Company's
Common Stock 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
Redeemable Warrants and the Holder fails to exercise the Redeemable Warrant. The
shares of Common Stock issuable upon exercise of the Redeemable Warrants have
been registered with the Commission on a separate registration statement.
On August 28, 1998, the Company issued 886,410 Warrants to purchase its
Common Stock to certain qualified institutional buyers and investors in private
placements. The Warrants were sold for $2.00 per Warrant and are exercisable at
$12.00 per share for three years commencing on their date of issuance. The
Warrants are subject to mandatory conversion on five prior business days' notice
if the closing sale price of the Company's Common Stock exceeds $19.50 per share
for 20 trading days out of any 30 consecutive trading day period ending within
15 days of the Company's mailing of notice of the conversion. The shares of
Common Stock issuable upon exercise of the Warrants have been registered as part
of this Registration statement and shall be issued pursuant to this Prospectus.
The Company has the right to reduce the exercise price and/or extend
the exercise period at its discretion, and/or make other inducements to Warrant
holders to encourage early exercise of Warrants.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Company's Common Stock is
Corporate Stock Transfer, Inc., Denver, Colorado.
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<PAGE>
PLAN OF DISTRIBUTION
The 886,410 Selling Stockholder Shares offered hereby may be sold from
time to time by Selling Stockholders in one or more transactions in the
over-the-counter market, in negotiated transactions or a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
The Selling Stockholder Shares may be sold from time to time directly
to purchasers by the Selling Stockholders and/or by their assignees,
transferees, pledgees or other successors for their own accounts and not for the
account of the Company. Alternatively, the Selling Stockholders may from time to
time offer the Selling Stockholder Shares through underwriters, dealers or
agents. The distribution of the Selling Stockholder Shares by the Selling
Stockholders may be effected from time to time in one or more transactions or a
combination of such methods of sale, that may take place in the over-the-counter
market including (a) ordinary broker's transactions and transactions in which
the broker solicits purchasers; (b) privately negotiated transactions or
pledges; (c) through sales to one or more broker/dealers for resale of such
shares for their own account as principals, pursuant to this Prospectus; (d) in
a block trade (which 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, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. Usual and customary or specifically negotiated
brokerage fees or commissions may be paid by these holders in connection with
such sales.
In connection with distributions of the Selling Stockholder Shares or
otherwise, the Selling Stockholders may enter into hedging transactions with
broker-dealers. In connection with such transactions, broker-dealers may engage
in short sales of the Selling Stockholder Shares in the course of hedging the
positions they assume with Selling Stockholders. The Selling Stockholders also
may sell Selling Stockholder Shares short and deliver the Selling Stockholder
Shares to close out such short positions. The Selling Stockholders also may
enter into option or other transactions with broker-dealers which require the
delivery to the broker-dealer of the Selling Stockholder Shares, which the
broker-dealer may resell pursuant to this Prospectus. The Selling Stockholders
also may pledge the Selling Stockholder Shares to a broker or dealer and upon a
default, the broker or dealer may effect sales of the pledged Selling
Stockholder Shares pursuant to this Prospectus.
The Selling Stockholders and/or their assignees, transferees,
intermediaries, donees, pledgees or other successors in interest through whom
the Selling Stockholder Shares are sold may be deemed "underwriters" within the
meaning of Section 2(11) of the Securities Act, with respect to the Selling
Stockholder 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 Selling Stockholder Shares also may be deemed to be
"underwriters," as defined in the Securities Act, and any commissions,
discounts, concessions or other payments
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made to them, or any profits realized by them upon the resale of any Selling
Stockholder Shares purchased by them as principals, may be deemed to be
underwriting commissions or discounts under the Securities Act. The Selling
Stockholders have advised the Company that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities, nor is there an
underwriter or coordinating broker acting in connection with the proposed sale
of Selling Stockholder Shares by the Selling Stockholders.
Under the securities laws of certain states, the Selling Stockholder
Shares may be sold in such states only through registered or licensed brokers or
dealers. In addition, in certain states the Selling Stockholder Shares may not
be sold unless the Selling Stockholder Shares have been registered or qualified
for sale in such state or an exemption from registration or qualification is
available and is complied with.
Registration of the Selling Stockholder Shares is being made pursuant
to the individual securities purchase agreements between the Company and each of
the Selling Stockholders. Pursuant to the terms of such agreements, the Company
will pay all expenses incident to the offering and sale of the Selling
Stockholder Shares to the public except as described hereinafter. 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 has agreed to indemnify the Selling
Stockholders and may indemnify any broker-dealer that participates in
transactions involving the Sale of Selling Stockholder Shares against certain
liabilities, including liabilities under the Securities Act. See "Commission
Position on Indemnification for Securities Act Liabilities" below.
There can be no assurance that the Company or any of the Selling
Stockholders will sell any or all of the Selling Stockholder Shares offered by
them hereunder.
The sale of the Selling Stockholder Shares is subject to the Prospectus
delivery and other requirements of the Securities Act. To the extent required,
the Company will use its best efforts to file and distribute, during any period
in which offers or sales are being made, one or more amendments or supplements
to this Prospectus or a new registration statement with respect to the Selling
Stockholder Shares to 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 Selling Stockholder 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.
Under the Exchange Act, and the regulations thereunder, any person
engaged in a distribution of the Selling Stockholder Shares offered by this
Prospectus may not simultaneously engage in market-making activities with
respect to the Common Stock of the Company during the applicable "cooling off"
period five business days prior to the commencement of such
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<PAGE>
distribution. In addition, and without limiting the foregoing, the Selling
Stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including without limitation, Regulation
M, in connection with transactions in the shares, which provisions may limit the
timing of purchases and sales of Selling Stockholder Shares by the Selling
Stockholders.
Selling Stockholders also may resell all or a portion of the Selling
Stockholder Shares in open market transactions in reliance upon Section 4(1) of
the Securities Act or Rule 144 promulgated thereunder, provided they meet the
criteria and conform to the requirements of such rules.
Upon the Company being notified by a Selling Stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
Selling Stockholder Shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this Prospectus will be filed, if required, pursuant to rule
424(b) under the Act, disclosing (i) the name of each such Selling Stockholder
and of the participating broker-dealer(s), (ii) the number of shares involved,
(iii) the price at which such shares were sold, (iv) the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable, (v)
that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this Prospectus and (vi)
other facts material to the transaction. In addition, upon the Company being
notified by a Selling Stockholder that a donee or pledgee intends to sell more
than 500 shares, a supplement to this Prospectus will be filed.
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
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 Company has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the Selling Stockholder 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.
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<PAGE>
EXPERTS
The consolidated financial statements and schedule of AgriBioTech, Inc.
as of June 30, 1998 and 1997 and for each of the years in the three-year period
ended June 30, 1998 are incorporated by reference herein and in the Registration
Statement 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 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 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 & Matia, 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 ten-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 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.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
- ------- -------------------------------------------
The expenses in connection with the issuance and distribution of the
securities being registered shall be borne by the Registrant and are estimated
as follows:
<TABLE>
<S> <C>
SEC Filing Fee $ 2,957.06
Printing and Engraving Expenses .............. 1,000.00
Legal Fees and Expenses....................... 12,500.00
Accounting Fees and Expenses.................. 5,000.00
Miscellaneous................................. 3,542.94
------------
Total:............................ $ 25,000.00
</TABLE>
ITEM 15. 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:
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(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 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
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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 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
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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.
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.
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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 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 16. EXHIBITS LIST AND REPORTS ON FORM 8-K
- ------- -------------------------------------
EXHIBIT NO. DESCRIPTION
- ----------- -----------
* 5.1 Securities opinion of Snow Becker Krauss P.C.
* 23.1 Consent of KPMG Peat Marwick LLP
* 23.2 Consent of Cannon & Company
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* 23.3 Consent of Amper, Politziner & Mattia, P.A.
* 23.4 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)
____________________
* Filed with this Registration Statement.
ITEM 17. UNDERTAKINGS
- ------- ------------
The Registrant hereby undertakes:
(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.
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(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 the 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.
(4) For the purpose 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 (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 the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) 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 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
been 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.
(6) For determining any liability under the Securities Act, to treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the issuer under Rule 424(b)(1), or (4) or 497(h) under the
Act as part of this registration statement as of the time the Commission
declared it effective.
(7) For determining any liability under the Act, to treat each post-
effective amendment that contains a form of prospectus as a new registration
statement for the securities offered in the registration statement, and that
offering of the securities at that time as the initial bona fide offering of
those securities.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Henderson, State of Nevada, on October 23, 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 October 23, 1998
- --------------------------
Johnny R. Thomas Executive Officer) and Director
/s/ Kent Schulze President and Director October 23, 1998
- --------------------------
Kent Schulze
/s/ Henry A. Ingalls Vice President and Treasurer (Principal October 23, 1998
- --------------------------
Henry A. Ingalls Financial and Accounting Officer)
/s/ Scott J. Loomis Vice President and Director October 23, 1998
- --------------------------
Scott J. Loomis
/s/ John C. Francis Vice President, Secretary and Director October 23, 1998
- --------------------------
John C. Francis
/s/ James W. Hopkins Director October 23, 1998
- --------------------------
James W. Hopkins
/s/ Richard P. Budd Director October 23, 1998
- --------------------------
Richard P. Budd
</TABLE>
II-8
<PAGE>
Exhibit 5.1
Snow Becker Krauss P.C.
605 Third Avenue
New York, NY 10158
October 23, 1998
AgriBioTech, Inc.
120 Corporate Park Drive
Henderson, Nevada 89014
Re: Registration Statement on Form S-3 Relating to 886,410 Shares of
Common Stock, Par Value $.001 Per Share, of AgriBioTech, Inc.
-------------------------------------------------------------
Gentlemen:
We are acting as counsel to AgriBioTech, Inc., a Nevada corporation (the
"Company"), in connection with the filing by the Company with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), of a registration statement on Form S-3 (the "Registration
Statement") relating to 886,410 shares of Common Stock (the "Shares"), $.001 par
value per share, of the Company for sale by the Selling Stockholders.
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of the Company's Certificate of
Incorporation and amendments thereto and the Company's Amended and Restated By-
Laws, as each is currently in effect, the Registration Statement, and the
proposed registration and issuance of the Shares and such other corporate
documents and records and other certificates, and we have made such
investigations of law as we have deemed necessary or appropriate in order to
render the opinions hereinafter set forth.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions expressed herein which were not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly organized, is validly existing, and in good
standing under the laws of the State of Nevada.
<PAGE>
2. The Shares have been duly authorized, and upon exercise of the
Warrants, the Shares, when issued, delivered and paid for, will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference in the Registration Statement to
this firm under the heading "Interests of Named Experts and Counsel." In giving
this consent, we do not hereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act, or the rules
and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Snow Becker Krauss P.C.
---------------------------
SNOW BECKER KRAUSS P.C.
<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 and schedule of AgriBioTech, Inc., the financial statements of
Beachley Hardy Seed Company, the combined financial statements of Germain's Inc.
and W-L Research, Inc. and the combined financial statements of Seed Corporation
of America, Inc. and Green Seed Company Limited Partnership incorporated by
reference herein and to the reference to our firm under the heading "Experts" in
the Prospectus.
KPMG PEAT MARWICK LLP
Albuquerque, New Mexico
October 23, 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. and to the reference to our
firm under the heading "Experts" in the Prospectus.
CANNON & COMPANY
Winston-Salem, North Carolina
October 23, 1998
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
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 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
heading "Experts" in the Prospectus.
AMPER, POLITZINER & MATTIA, P.A.
Edison, New Jersey
October 23, 1998
