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Registration Statement No. 333-47637
Filed Pursuant to Rule 424(a)
SUBJECT TO COMPLETION, MAY 26, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFF TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
PROSPECTUS
AGRIBIOTECH, INC.
7,000,000 Shares of Common Stock
This Prospectus pertains to 7,000,000 shares of Common Stock (the
"Shares"), $.001 par value per share, of AgriBioTech, Inc., a Nevada corporation
("ABT" or the "Company"). The Company is registering an aggregate of 6,623,072
Shares (the "Selling Stockholder Shares") for resale by the selling stockholders
(the "Selling Stockholders") who are either (a) qualified institutional buyers
("QIBs"), institutional accredited investors or other accredited investors (the
"Investors") who purchased their Shares in private sales (the "Private
Placements"), or (b) the former owners of companies acquired by the Company; or
their assignees, transferees, pledgees or other successors for their own account
and not for the account of the Company. The Selling Stockholders received the
Shares in private transactions that were exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
under Section 4(2) of the Securities Act. The Company is also registering an
aggregate of 376,928 shares for original equity issuances to Investors.
The Common Stock is traded on the Nasdaq under the symbol "ABTX." On May
22, 1998, the closing sale price of the Common Stock as reported on the Nasdaq
National Market was $17.69 per share.
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 9.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS PROSPECTUS ALSO AMENDS THE COMPANY'S PROSPECTUS DATED DECEMBER 17,
1997, AS SUPPLEMENTED.
THE DATE OF THIS PROSPECTUS IS _____________, 1998
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The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders. The Company is registering the Selling Stockholder
Shares offered by this Prospectus pursuant to the terms and conditions of
registration rights granted to the Selling Stockholders in the Private
Placements. The Company also agreed that it would pay the expenses of this
registration, which it estimates will be $60,000. Each of the Selling
Stockholders will pay the cost of all brokerage commissions and discounts, and
all legal expenses incurred by them in connection with sales of their Shares.
Commencing on the effective date of this Prospectus, the Shares may be sold
as original equity issuances to Investors and/or the Selling Stockholders may,
from time to time, sell, transfer or pledge the Shares directly to purchasers,
transferees or pledgees or may offer the Shares through agents, brokers,
dealers or underwriters who may receive compensation in the form of commissions
or discounts from the Selling Stockholders or from purchasers of the Shares.
The Company anticipates that the Selling Stockholders will offer shares of
Common Stock for resale on the Nasdaq National Market ("Nasdaq"), in privately
negotiated transactions, or in any combination thereof at the market price
prevailing at the time of sale, a price related to such prevailing market price
or at a negotiated price. Prior to selling Shares the Selling Stockholders must
satisfy the prospectus delivery and other requirements of the Securities Act.
See "Plan of Distribution."
The Company has not authorized any person to give any information or to
make any representations in connection with sales of the Shares by the Company
or the Selling Stockholders other than those contained in this Prospectus. You
should not rely on any information or representations in connection with such
sales other than the information or representations in this Prospectus. The
information in this Prospectus is correct as of the date of this Prospectus.
You should not assume that there has been no change in the affairs of the
Company since the date of this Prospectus or that the information contained in
this Prospectus is correct as of any time after its date. This Prospectus is
not an offer to sell or a solicitation of an offer to buy the Shares in any
circumstances in which such an offer or solicitation is unlawful.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance with the
Exchange Act, the Company files reports and other information with the
Securities and Exchange Commission (the "Commission"). You may inspect and copy
reports, proxy statements and other information filed by the Company at the
public reference facilities maintained by the Commission at 450 Fifth
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Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices
located at the Northeast Regional Office, Seven World Trade Center, New York,
New York 10048, and at the Midwest Regional Office, 500 West Madison Street,
Chicago, Illinois 60611-2511. You may also obtain copies of such material at
prescribed rates, by writing to the Commission, Public Reference Section, 450
Fifth Street, N.W., Washington, D.C. 20549 or on the Commission's Worldwide Web
site at http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act with respect to the
Shares offered hereby. This Prospectus, filed as part of the Registration
Statement, does not contain all the information set forth in the Registration
Statement and the exhibits thereto, certain portions of which have been omitted
as permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the Shares, you should refer to the
Registration Statement and the exhibits thereto or incorporated by reference
therein. Information concerning the Company may be found on the Company's Web
site at HTTP://WWW.AGRIBIOTECH.COM. You may inspect the Registration Statement,
---------------------------
including such exhibits, without charge at the public reference facilities
maintained by the Commission, at the Commission's regional offices at the
addresses stated above and on the Commission's Web site. You may also obtain
copies of these documents, at prescribed rates, by writing to the Commission's
Public Reference Section at the address set forth above.
INFORMATION INCORPORATED BY REFERENCE
The Company has filed the following documents with the Commission, all of
which are incorporated by reference into and made a part of this Prospectus:
(i) the Company's Annual Report on Form 10-KSB (as amended on
October 24, 1997 and February 17, 1998) for the fiscal year
ended June 30, 1997 ("Form 10-KSB");
(ii) the Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended September 30, 1997 (as amended on February
17,1998), December 31, 1997 (as amended on February 17,1998) and
March 31, 1998 ("Forms 10-Q");
(iii) the Company's Current Reports on Form 8-K for October 30, 1996
(as amended on January 13, 1997 and February 17, 1998), May 15,
1997 (as amended on July 29, 1997 and February 17, 1998), June
18, 1997, August 22, 1997 (as amended on September 26, 1997 and
February 17, 1998), October 22, 1997, December 1, 1997, January
6, 1998 (as amended on March 10, 1998 and March 30, 1998),
January 9, 1998 (as amended on March 10, 1998 and March 30,
1998), January 26, 1998 (as amended on March 30, 1998), March
31, 1998 and April 8, 1998 ("Forms 8-K");
(iv) the description of the Company's Common Stock, $.001 par value,
contained in the Company's Registration Statement on Form 8-A
(File No. 0-19352), filed July 11, 1995, pursuant to Section
12(g) of the Exchange
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Act including any amendment or report filed for the purpose of
updating such information;
(v) the Company's Proxy Statement dated January 20, 1998 for its
Annual Meeting held on February 23, 1998; and
(vi) all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this
Prospectus and prior to the filing of a post-effective amendment
that indicates that all the securities offered hereby have been
sold or that deregisters all the securities remaining unsold.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein may be modified or superseded for purposes of
this Prospectus by a statement contained in this Prospectus or in any other
document that is filed after the date of this Prospectus that also is or is
deemed to be incorporated by reference herein. Any statement that is so modified
or superseded shall not be deemed to constitute a part of this Prospectus,
except as modified or superseded.
Copies of all documents that are incorporated by reference herein (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents or into this Prospectus) will be
provided without charge to each person, including any beneficial owner, to whom
this Prospectus is delivered, upon a written or oral request to AgriBioTech,
Inc., Attention: Secretary, 120 Corporate Park Drive, Henderson, NV 89014;
telephone number (702) 566-2440.
THE COMPANY
AgriBioTech, Inc. (the "Company" or "ABT") is the largest agricultural seed
company in the United States that specializes in developing, processing,
packaging and distributing varieties of forage and cool season turfgrass seeds.
Since January 1, 1995, the Company has completed 23 acquisitions and has
executed letters of intent to acquire seven additional companies (the "Pending
Acquisitions"). The Company has grown from net sales of $29,000 in fiscal 1994
to annualized net sales of approximately $425 million, including completed
acquisition and the Pending Acquisitions. The Company's vertically integrated
forage and turfgrass seed operations include traditional genetic breeding and
research and development programs for most forage and cool season turfgrass
species, seed processing plants that clean, condition and package ABT's
products, and national and international distribution and sales networks in 48
states and 51 countries.
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The Company was incorporated in the State of Colorado on December 31, 1987
under the name Sussex Ventures, Ltd. ("Sussex"). The Company was an inactive
development stage company until September 30, 1993 when it acquired all of the
outstanding stock of AgriBioTech, Inc., a Nevada corporation ("ABT"). ABT was
treated as the acquiring corporation in the transaction, which was accounted for
as a reverse purchase. In June 1994, the Company merged with and into ABT, then
a wholly-owned subsidiary of the Company, and changed its name to AgriBioTech,
Inc. and became a Nevada corporation. The Company had limited revenues until
1995, when it commenced its acquisition program.
THE OFFERING
<TABLE>
<S> <C>
Shares of Common Stock to be offered
By the Company........................................... 376,928 (1)
By the Selling Stockholders.............................. 6,623,072 (2)
Shares of Common Stock issued and outstanding
before the offering...................................... 35,961,627 (3)
</TABLE>
_______________
(1) Consists of shares offered by the Company to Investors, from time to time,
in original equity issuances.
(2) Consists of outstanding shares of restricted stock and/or shares issuable
upon issuance of outstanding warrants that were purchased by Investors in
the Private Placements and by the former owners of companies acquired by
the Company (collectively, "Selling Stockholders").
(3) Based on 35,961,627 shares outstanding as of May 15, 1998, but does not
give effect to (i) 6,254,916 shares of Common Stock (as of February 23,
1998) reserved for issuance upon exercise of stock options currently
outstanding and an additional 2,076,850 shares of Common Stock issuable
upon exercise of options available for future grants under the 1994 Plan
and; (ii) 400,000 shares of Common Stock reserved for issuances upon
grant of shares under the Bonus Plan; (iii) 65,518 shares of Common Stock
issuable as of May 15, 1998, upon conversion of Preferred Stock which was
subsequently converted.
Use of
Proceeds: The Company will not receive any proceeds from the sale of the Shares
- -------- by the Selling Stockholders. Any proceeds received by the Company
from original equity issuances to Investors will be used to fund the
cash portion of potential acquisitions and for working capital
purposes.
Risk
Factors: Investment in the Shares offered hereby involves certain risks
- ------- discussed under "Risk Factors" that should be considered by
Prospective investors.
RECENT DEVELOPMENTS
Since the Company commenced its acquisition program in January 1995, it has
acquired
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all or part of 23 seed companies and has signed letters of intent to acquire
seven additional seed businesses.
The following seven seed business acquisitions are pending, each is
expected to be effective before the end of the fiscal year ending June 30, 1998.
Since each acquisition is subject to conditions and events which may, not
necessarily occur, no assurance can be given that any of these transactions will
be completed.
<TABLE>
<CAPTION>
APPROXIMATE
REVENUE FOR
LAST YEAR APPROXIMATE
PRIOR TO PURCHASE
AGRIBIOTECH EFFECTIVE ACQUISITION PRICE
ACQUISITIONS DATE (IN MILLIONS) (IN MILLIONS) DESCRIPTION OF BUSINESS
- ------------ --------- ------------- ------------- -----------------------
<S> <C> <C> <C> <C>
Willamette Seed Company Apr 98 $41.8 $13.6(1) Production and distribution of turfgrass
seed to wholesale distributors in the U.S.
and internationally; also distribution of
fertilizer to farmers.
Fine Lawn
Research, Inc. Apr 98 5.9 $ 2.7(1) Distribution of proprietary rye grass and
turf type tall fescue to professional
users.
Geo. W. Hill
of Indiana. Apr 98 4.9 $ 1.7(1) Distribution of alfalfa, clovers and turf
mixes to farmers, homeowners and
landscapers.
</TABLE>
6
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<TABLE>
<S> <C> <C> <C> <C>
Geo. W. Hill & Co. Apr 98 20.8 $ 6.5(1) Distribution of turf mixes,
perennial rye grass, turf
type tall fescue to
homeowners and landscapers; also
lawn and garden supplies,
fertilizers and chemicals to
retail stores and nurseries
Peterson Seed Apr 98 11.8 $ 6.3(1) Distribution of alfalfa, clovers,
Company, Inc. turf mixes, and other forages
Oseco, Inc. Apr 98 9.4 $ 5.3(1) Distribution of alfalfa, turf mixes,
bluegrass, ryegrass, forage grasses
and clovers to farmer dealers,
elevators, nurseries and landscapers.
Also owns a production facility for
cleaning, processing of alfalfa and a
seed coating plant.
Arrowhead Enterprises,
Inc. (d/b/a J&M Seed
Company) Apr 98 8.9 $ 3.7(1) Distribution of alfalfa, clovers,
turf mixes, other forages, and
reclamation seed and products
</TABLE>
______________________________
(1) Estimated based on signed letters of intent.
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RISK FACTORS
In addition to considering the other information set forth in, or
incorporated by reference into, this Prospectus, prospective investors should
carefully consider the following factors in evaluating an investment in the
Company. This Prospectus, including the documents incorporated by reference
herein, contains forward-looking statements within the meaning of Section 27A of
the Securities Act. Also, documents subsequently filed by the Company with the
Securities and Exchange Commission (the "Commission") and incorporated herein by
reference will contain forward-looking statements. Actual results could differ
materially from those projected in the forward-looking statements as a result of
the risk factors set forth below and the matters set forth or incorporated in
this Prospectus generally. The Company cautions the reader, however, that this
list of factors may not be exhaustive, particularly with respect to future
filings. In analyzing an investment in the securities offered hereby,
prospective investors should carefully consider, along with the other matters
referred to herein, the risk factors described below.
Ability to Manage Growth. The Company has acquired all or part of 23 seed
------------------------
companies since January 1, 1995, has signed letters of intent to acquire seven
additional seed companies, and intends to expand current levels of operations.
The Company's rapid growth since January 1995 has placed and may continue to
place significant demands on the Company's management, technical, financial and
other resources. In addition, successful expansion of the Company's operations
will depend on, among other things, its ability to attract, hire and retain
skilled management and other personnel, secure adequate sources of seed on
commercially reasonable terms and successfully manage growth, none of which can
be assured. To manage growth effectively, the Company will need to improve
operational, financial and management information systems, procedures and
controls. There can be no assurance that the Company will be able to manage its
future growth effectively, and failure to do so could have a material adverse
effect on the Company's business, financial condition and/or operating results.
See "Management's Discussion and Analysis or Plan of Operations" in the Form 10-
KSB and Management's Discussion and Analysis of Financial Condition and Results
of Operation" in the Forms 10-Q (collectively, "MD&A"), and "Business -
Acquisition Program" in the Form 10-KSB.
Integration of Acquisitions. The Company is in the process of integrating
---------------------------
its recent acquisitions, and intends to expand current levels of operations
through additional acquisitions. The Company's future success depends upon its
ability to combine the operations of its acquired subsidiaries into a vertically
integrated company. The Company's acquired subsidiaries, many of which are
geographically disparate, represent the full spectrum of the forage and
turfgrass seed production, processing, sales and distribution process. The
Company's prospects must therefore be evaluated in light of the problems,
expenses, delays and complications associated with operating, managing and
integrating a large group of businesses and/or subsidiaries. There can be no
assurance that the Company will be able to effectively integrate the acquired
subsidiaries, and failure to do so could have a material adverse effect on the
Company's business, financial condition and/or operating results. See MD&A and
"Business - Acquisition Program" in the Form 10-KSB.
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No Assurance of Success of Acquisition Strategy. The Company has
-----------------------------------------------
experienced significant growth in net sales, from $29,000 in fiscal 1994 to $66
million in the fiscal year ended June 30, 1997 ("Fiscal 1997") and to pro forma
net sales of approximately $277 million for Fiscal 1997 reflecting only the
completed acquisitions of Lofts Seed, Inc. and Budd Seed, Inc., Seed
Corporation of America, Green SCA Corp. and Green Seed Company Limited
Partnership and the pending acquisition of Williamette Seed Company, but no
other completed or pending acquisition since June 30, 1997. Although a portion
of such growth is attributed to year-over-year sales growth of companies
acquired more than one year ago, a significant amount of such growth has
resulted from the Company's acquisitions. The Company's future growth will
depend upon its ability to continue to make acquisitions, as well as increase
sales from existing operations, neither of which can be assured.
The Company is unable to predict whether and when any prospective
acquisition candidate will become available or the likelihood that any
acquisition will be completed. The Company competes for acquisition candidates
with many entities that have substantially greater resources than the Company.
While the Company has been able to complete 23 acquisitions during the last
three years, the Company expects to face intensified competition as the
Company's acquisition program has become well known in the seed industry. There
can be no assurance that the Company will be able to successfully identify
suitable acquisition candidates, complete acquisitions and integrate and expand
acquired companies into its operations. Once integrated, there can be no
assurance that acquired businesses will achieve comparable levels of sales,
profitability, or productivity as existed prior to their acquisition. There
have been previous unsuccessful attempts by others to consolidate the forage
and/or turfgrass seed sectors. To the Company's knowledge, however, each of
these attempts preceded the developments concerning the Plant Variety Protection
Act (the "PVPA"), discussed under "Business--Proprietary Rights" in the Form 10-
KSB. Nevertheless, in view of the fact that no other company has successfully
vertically integrated and consolidated the forage and turfgrass seed sectors,
there can be no assurance the Company will be successful in its efforts.
Potential Liabilities Associated with Acquisitions. The businesses
--------------------------------------------------
acquired by the Company may have liabilities that the Company did not discover
or may have been unable to discover during its pre-acquisition investigation,
including liabilities arising from environmental contamination or non-compliance
by prior owners with environmental laws or regulatory requirements, the
provisions of which may change in the future with retroactive effect, for which
the Company, as a successor owner, may be responsible. Any indemnities or
warranties may not fully cover such liabilities due to their limited scope,
amount or duration, the financial limitations of the indemnitor or warrantor, or
for other reasons. Therefore, in the event the Company is held responsible for
the foregoing liabilities, the Company's operations may be materially adversely
affected.
Development of New Products. The Company continues to develop new,
---------------------------
genetically superior forage and turfgrass varieties. The Company believes that
the development and marketing of such elite varieties will play a key role in
the Company's success. There can be no assurance that the Company will develop
such genetically superior strains either on its own or with industry partners.
If the Company is unable to develop and successfully market new
9
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product lines, this could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--Research
and Development" in the Form 10-KSB.
Market Acceptance. Potential investors should be aware that even if the
-----------------
Company is successful in developing genetically superior strains as stated
above, there can be no assurance that there will be a market for such products;
or, if such a market develops that the Company will be able to recoup the costs
associated with the development of these products. If the Company is unable to
effectively market products it has developed, at prices sufficient to (i) cover
the Company's costs and (ii) generate adequate return on the Company's capital,
the Company's business, financial condition and results of operations may be
materially adversely affected.
Reliance on Patents and Proprietary Rights. The Company owns proprietary
------------------------------------------
varieties for a number of forage and turfgrass species that are protected under
the PVPA and is seeking to acquire and/or develop other varieties protected by
the PVPA. The PVPA prohibits others from selling seed of those proprietary
varieties for 20 years, after which such protection expires. The inability to
develop protected varieties could have a material adverse impact on the
Company's business, financial condition and results of operations. There can be
no assurance that any proprietary rights owned by the Company or licensed from
third parties will not be challenged, invalidated, or circumvented, or that the
rights held by the Company will provide any competitive advantage, or that the
Company's competitors will not possess protected varieties that perform better
than those of the Company. The Company could also incur substantial costs in
asserting its proprietary rights against others, including any such rights
obtained from third parties, and/or defending any infringement suits brought
against the Company. See "Business--Proprietary Rights" in the Form 10-KSB.
Access to Biotechnology. Breakthroughs in biotechnology have led to the
-----------------------
introduction of new, improved and specialized seeds in other seed sectors, such
as corn, soybeans and cotton. The Company believes that similar breakthroughs in
biotechnology will also lead to the introduction of enhanced seeds in the forage
and turfgrass sectors. The Company's objective is to become the licensee or
partner of choice for owners of value-added genetic traits in order to
accelerate the introduction of these traits to its customers through
biotechnologically enhanced products. In addition to the risks described above
under "Development of New Products" and "Market Acceptance" there can be no
assurance that the Company will succeed in its efforts to license biotechnology
genes and develop partnerships with such owners. The Company's inability to
develop or market products through biotechnology at prices sufficient to recover
its costs and generate adequate returns on capital could have a material adverse
affect on the Company's future business, financial condition and results of
operations. See "Business--Proprietary Rights" in the Form 10-KSB.
Competition. The seed industry and the field of agricultural technology
-----------
are both highly competitive. The Company competes in the forage and turfgrass
seed sectors primarily on the basis of price, product quality and service. The
major agricultural seed companies in the United States focus their sales around
hybrid seed corn (Pioneer Hi-Bred International, DEKALB Genetics Corporation,
Novartis AG and Mycogen Corporation), cotton seed (Delta and Pine
10
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Land Company) and other crops. In the past, these companies have treated forage
and turfgrass seeds as ancillary crops when they compete in the marketplace.
This is the opposite of the Company's business strategy, which is to treat
forage and turfgrass seed as its primary product. Therefore, the Company's major
competitors in the forage and turfgrass seed sectors currently are large
regional companies and numerous small family seed businesses. However, any of
the major agricultural seed companies may decide to intensify their efforts in
the forage and turfgrass seed sectors. Management believes that as the Company's
acquisition strategy becomes better known in the seed industry, the competition
for acquisitions, sales, facilities and personnel will intensify. The largest
United States alfalfa competitors are Cenex/Land O' Lakes/Research Seed,
Helena/AgriPro, Pioneer and Cal/West Seeds. The largest competitors for other
forages are FFR Research and its farm cooperative members. There are also small
family owned businesses that are strong competitors in small geographic areas.
The largest producers and marketers of turfgrass seed (excluding the Company) in
the United States are Pennington Seed and O.M. Scott.
The Company currently competes with, and in the future expects that it will
continue to compete with, companies with substantially greater financial,
marketing, personnel and research and development resources than those of the
Company. There can be no assurance that the Company will be able to compete
successfully against such companies. These competitive factors could have a
material adverse effect on the Company's business, results of operation and/or
financial condition.
Lack of Historical Profitability; Leverage. The Company has reported
------------------------------------------
only three profitable quarters since becoming a publicly owned company in
September 1993. Potential investors should be aware that over the life of the
Company, the Company has not reported a profitable fiscal year and has failed to
show consistent profitability. There can be no assurance that the Company will
achieve or maintain consistent profitability in the future. The Company had an
accumulated deficit of $8,107,447 through March 31, 1998.
The Company has incurred a substantial amount of indebtedness in connection
with certain of its acquisitions during the course of the last three years. In
the event that the Company incurs substantial indebtedness in the future, the
effect of such leverage may negatively impact the ability of the Company to (i)
obtain additional financing on favorable terms; (ii) service such long-term
indebtedness; and (iii) comply with financial and other covenants and operating
restrictions imposed by such indebtedness.
The ability of the Company to satisfy any such future obligations will
depend primarily upon the future financial and operating performance of its
operating subsidiaries and upon the Company's ability to renew or refinance bank
borrowings and/or to raise additional equity capital. The Company's future
performance is dependent upon financial, business and other economic factors
affecting the Company and the agriculture industry in particular, many of which
are beyond the control of the Company and its subsidiaries. See M D&A and the
financial statements in the Form 10-KSB and Forms 10-Q.
11
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Need for Future Capital. The Company's capital requirements have been
-----------------------
and are expected to continue to be significant. There can be no assurance,
however, that existing sources of capital will be sufficient to fund its future
operations. The Company's future capital requirements will depend on numerous
factors including, but not limited to, the timing and cost of any future
acquisitions and the time and cost involved in integrating the Company's
acquisitions and growing the Company's existing operations. See MD&A and
"Business-Biotechnology Access" in the Form 10-KSB.
Dependence on Key Personnel. The success of the Company is largely
---------------------------
dependent upon the efforts, abilities and expertise of Dr. Johnny R. Thomas,
Chief Executive Officer, as well as each of the Company's six 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.
The Company has obtained a key-man life insurance policy in the amount of
$3,000,000 on the life of Dr. Thomas. The Company's prospects depend upon its
ability to attract and retain qualified marketing, financial, management
information system, and other technical personnel. Competition for such
personnel is intense and there can be no assurance that the Company will be
successful in attracting or retaining such personnel. See "Management" in the
Form 10-KSB.
Cyclical Nature of Agricultural Products. Agricultural products,
----------------------------------------
including forage and turfgrass seed, generally follow cyclical business
patterns. Most agricultural products are commodities that are subject to wide
fluctuations in price based on supply of the products and demand for, in this
case, the raw or processed seed. Furthermore, the demand for seed is dependent
on the demand of farmers, which is influenced by the general farm economy. The
production of seed is subject to a variety of nature's adversities including
drought, wind, hail, disease, insects, early frost and numerous other forces
that could adversely affect the growing of seed in any growing season, resulting
in larger fluctuations in results of operations between quarters. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Seasonality of Business and Quarterly Comparisons" in the Form 10-
KSB.
Seasonality of Quarterly Results. The Company's seed business is subject
--------------------------------
to wide seasonal fluctuations that reflect the typical purchasing and growing
patterns for forage and turfgrass crops. In addition, weather affects commodity
prices, seed yields and planting decisions by farmers. Results of operations
from quarter to quarter will not necessarily reflect the results for the entire
year and are not necessarily indicative of results which may be expected for any
other interim period. Management believes that quarterly sales will continue to
fluctuate significantly depending on, among other things, the breakdown of the
Company's sales between the forage and turfgrass sectors for any specific period
of time. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Seasonality of Business and Quarterly Comparisons" in the
Form 10-KSB.
Government Regulation. The Company's operations are directly and
----------------------
indirectly subject to various Federal and state environmental controls and
regulations. Management believes that the Company is in substantial compliance
with existing environmental regulations, but can give no assurance that it can
maintain such compliance without incurring substantial cost and expense if
12
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additional laws and regulations are enacted or promulgated.
While not affecting the Company's operations, certain government
regulations may have an effect on the demand for the Company's products. For
example, from time to time the federal government has imposed restrictions on
the sale of certain commodities to certain countries, including commodities the
seed for which are produced by the Company. In addition, United States
government agricultural policies are designed to maintain a balanced supply and
demand for certain commodities by regulating planted acreage through set-asides
in certain crops. Adherence to set-asides is the basis for farmers' eligibility
for government subsidy payments and other benefits. An increase in the set-
aside for a crop generally reduces farmer demand for seed for that crop, and a
decrease in the set-aside generally increases demand for that seed. In
addition, other government policies, such as subsidizing export sales of certain
commodities, ultimately affect seed sales. Certain of the Company's sales of
seed are subject to demand swings resulting from changes in these programs.
Adoption of regulations regarding the allocation of water in California,
Arizona and other states with limited water supplies could result in a reduction
of the number of acres planted with various crops, reducing the demand for the
Company's products in those states.
The development of seed of genetically altered plants is regulated by the
Environmental Protection Agency (the "EPA"), the U.S. Department of Agriculture
("USDA"), the Food and Drug Administration and various state agencies. The
Federal agencies require permits for field testing and the EPA also regulates
insecticide and herbicide products. The Company is not aware of any pending
legislation that would materially impact either its traditional product
development or commercialization of seed from genetically altered plants. There
can be no assurance that regulatory agencies administering existing or future
regulations or legislation will allow the Company to produce and market
genetically engineered seed, if at all, in a timely manner or under technically
or commercially feasible conditions. The Company's inability to produce such
seed could have a material adverse effect on the Company.
Adverse Effect of Potential Future Sales of Common Stock. Of the Company's
--------------------------------------------------------
35,961,627 issued and outstanding shares of Common Stock as of May 15, 1998,
approximately 8,500,000 shares are "restricted securities" as that term is
defined under Rule 144 under the Securities Act. All but approximately
1,030,000 of these restricted shares have been registered for resale under the
Securities Act. Approximately 7,000,000 additional shares of Common Stock are
issuable without restriction upon exercise of outstanding options and
approximately 65,000 shares of Common Stock upon conversion of outstanding
shares of Convertible Preferred Stock, and are either exempt from registration
or have been registered under the Securities Act. The Company is unable to
predict the effect that sales made under Rule 144, sales made pursuant to
registration statements, or otherwise, may have on the then existing market
price of the Company's securities. The possibility exists that the sale of any
of these Securities, or even the potential for such sales, may be expected to
have a depressive effect on the price of the Company's securities in any public
trading market. Any such depressive effect could impair the Company's ability
to raise additional equity capital.
13
<PAGE>
Public Market Risks; Possible Volatility of Securities Prices. The market
-------------------------------------------------------------
price for the Company's securities has been and may continue to be volatile.
Factors such as the Company's financial results, financing efforts, changes in
earnings estimates by analysts, conditions in the Company's business and various
factors affecting the agriculture industry generally may have a significant
impact on the market price of the Company's securities. Additionally, in the
last several years, the stock market has experienced a high level of price and
volume volatility, and market prices for many companies, particularly small and
emerging growth companies, the common stock of which trades in the over-the-
counter market, have experienced wide price fluctuations and volatility that
have not necessarily been related to the operating performance of such companies
themselves. Any such fluctuations or general economic and market trends could
adversely affect the price of the Company's securities. In view of the
foregoing factors, in some future quarters the Company's operating results may
be below the expectations of public market analysts and investors. In that
event, the price of the Company's securities would likely be materially
adversely affected. See "Market for Common Equity and Related Stockholder
Matters" in the Form 10-KSB.
Immediate Substantial Dilution. The Company's present stockholders
------------------------------
acquired their shares of Common Stock at costs substantially below the offering
price of the Common Stock to be sold by the Selling Stockholders. Therefore,
investors purchasing Common Stock in this offering will incur an immediate and
substantial dilution in pro forma net tangible book value per share. Net
tangible book value per share is equal to the total tangible assets of the
Company less total liabilities divided by the number of shares of Common Stock
outstanding.
14
<PAGE>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The selected financial data in the following table should be read in
conjunction with the Company's Financial Statements and the Notes thereto,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other financial information incorporated by reference herein.
The historical selected financial data presented below under the captions
"Statement of Operations Data" and "Balance Sheet Data" for, and as of the end
of each of the years ended June 30, 1997 and 1996, the nine-month period ended
June 30, 1995, and each of the years ended September 30, 1994 and 1993 are
derived from the consolidated financial statements of ABT and subsidiaries,
which financial statements have been audited by KMPG Peat Marwick LLP,
independent certified public accountants. The consolidated financial statements
as of June 30, 1997 and 1996 and for the years then ended, and the nine-month
period ended June 30, 1995, and the reports thereon, are incorporated by
reference in this Prospectus. The selected financial data presented below for
and as of the end of the nine month period ended March 31, 1998 and 1997 are
derived from the unaudited consolidated financial statements of the Company
incorporated by reference in this Prospectus. In the opinion of the management,
the unaudited consolidated financial statements for the interim periods include
all adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of the results for such periods. The results of operations for the
nine month period ended March 31, 1998 are not necessarily indicative of the
results to be expected for the full year. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations-Seasonality of
Business and Quarterly Comparisons" and "Business-Acquisition Program" in the
Company's Form 10-KSB for information that affects a comparison of the Company's
quarterly results of operations.
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
Nine
Nine Months Ended Months
----------------- Ended
March 31, Years Ended June 30, June 30, Year Ended June 30,
--------- -------------------- -------- -------------------
(In thousands, except per share amounts)
1998 1997 1997 1996 1995 (1) 1994 1993
---- ---- ---- ---- -------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales $139,695 $41,165 $65,904 $25,962 $ 4,754 $ 29 $ 12
Cost of sales 109,209 31,006 49,527 19,236 3,398 12 3
-------- ------- ------- ------- -------- ------ ------
Gross profit 30,486 10,159 16,377 6,726 1,356 17 9
Operating expenses 27,442 10,814 17,972 9,637 2,779 915 171
-------- ------- ------- ------- -------- ------ ------
Earnings (loss) from
operations 3,044 (655) (1,595) (2,911) (1,423) (898) (162)
Total other income (expense) (1,634) (534) 1,119 (413) (16) (8) (30)
-------- ------- ------- ------- -------- ------ ------
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Nine
Nine Months Ended Months
----------------- Ended
March 31, Years Ended June 30, June 30, Year Ended June 30,
--------- -------------------- -------- ------------------
(In thousands, except per share amounts)
1998 1997 1997 1996 1995 (1) 1994 1993
---- ---- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net earnings (loss) before
income taxes 1,410 (1,189) (2,714) (3,324) (1,407) (890) (192)
Income tax expense (benefit) (2,907) - - - - - -
------ ------ ------ ------ ------ ----- -------
Net earnings (loss) 4,317 (1,189) (2,714) (3,324) (1,407) (890) (192)
Discount and imputed
dividends on preferred
stock 80 3,203 3,233 2,318 - - -
------ ------- ------ ------- ------ ------ ------
Net earnings (loss)
attributable to common
stock $4,237 $(4,392) $(5,947) $(5,642) $(1,407) $ (890) $ (192)
====== ======= ======= ======= ======= ====== ======
Net (loss) per common share:
Basic $0.15 $(0.33) $ (0.38) $ (0.76) $ (0.26) $(0.23) $(0.16)
Diluted $0.13 $(0.33) $ (0.38) $ (0.76) $ (0.26) $(0.23) $(0.16)
Shares of common stock used
in computing (loss) per
common share:
Basic 28,044 13,301 15,549 7,459 5,485 3,911 1,205
Diluted 32,374 13,301 15,549 7,459 5,485 3,911 1,205
</TABLE>
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
March 31, June 30, September 30,
--------- ----------------------------- -------------
1998 1997 1996 1995(1) 1994 1993
--------- ------- ------- --------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 2,967 $ 2,554 $ 2,522 $1,423 $ 441 $ 14
Total assets 258,770 96,113 25,184 8,014 765 309
Long-term obligations 8,433 2,667 1,055 148 106 213
Total liabilities 107,880 50,125 12,161 1,681 261 384
Working capital 24,263 7,555 6,461 3,792 375 (157)
Stockholders' equity 150,891 44,988 14,022 6,333 504 (75)
</TABLE>
___________________________
1. The Company changed its fiscal year end to June 30th effective in 1995.
16
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information as of May 13, 1998, based on
information obtained from the Selling Stockholders named below with respect to
the beneficial ownership of 6,598,072 Selling Stockholder Shares being
registered hereunder; the number of Shares known to the Company to be held by
each; the number of Shares to be sold by each; and the percentage of outstanding
shares of Common Stock beneficially owned by each before this offering and
assuming that no Shares will be owned after this offering.
<TABLE>
<CAPTION>
Percentage of
Amount and Nature of Outstanding Shares
Beneficial Number of Shares Owned Before
Name Ownership(1) to be Sold Offering (2)
---- -------------------- ---------------- ------------------
<S> <C> <C> <C>
Quantum Partners LDC 2,852,882 (3) 2,852,882 7.9%
Ardsley Partners I, L.P. 100,000 (4) 100,000 *
Ardsley Partners II, L.P. 100,000 (4) 100,000 *
Ardsley Offshore Fund, Ltd. 200,000 (4) 200,000 *
Brown Simpson Strategic Growth 106,200 (5) 106,200 *
Fund, Ltd.
Brown Simpson Strategic Growth 35,600 (5) 35,600 *
Fund, L.P.
Southbrook International Investments, 215,000 (5) 215,000 *
Ltd.
Lehman Brothers, Inc. 517,500 (6) 517,500
Fred and Janice Clark 134,887 (7)(8) 16,560 *
Brent Clark 66,691 (7)(8) 4,516 *
Steven Jensen 48,398 (7)(9) 3,844 *
Gary Parker 8,021 (10)(11) 2,205 *
Ruth Lytle 6,892 (10)(12) 1,492 *
Curt Croshaw 11,892 (11)(8) 1,492 *
Richard P. Budd (13) 711,368 (14)(15)(18) 350,684 2.0%
Joseph R. Budd 263,756 (14)(18) 131,878 *
John D. Budd 378,871 (14)(18) 189,435 1.1%
Theodore P. Budd 263,756 (14)(18) 131,878 *
Lee Ann Chrisco 41,168 (14)(16)(18) 41,168 *
Kenneth R. Budd 195,235 (14)(17)(18) 85,118 *
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Amount and Nature of Outstanding Shares
Beneficial Number of Shares Owned Before
Name Ownership(1) to be Sold Offering (2)
---- -------------------- ---------------- ------------------
<S> <C> <C> <C>
Kenneth R. Budd, NCUTMA 13,188 (14)(18) 6,594 *
Custodian for Ryan Budd
Kenneth R. Budd, NCUTMA 13,188 (14)(18) 6,594 *
Custodian for Elizabeth Budd
Richard P. Budd Irrevocable Living 63,302 (14)(18) 31,651 *
Trust
Womble Carlyle Sandridge & Rice 50,000 (14)(18) 50,000 *
held in trust pursuant to an Escrow
Agreement dated January 6, 1998
Vern J. Luken 71,942 (18)(19) 71,942 *
Michael V. Luken 25,583 (18)(19) 25,583 *
Paul A. Luken 4,359 (18)(19) 4,359 *
Audrey Luken 397 (18)(19) 397 *
Drew D. Kinder 93,500 (18)(20) 83,500 *
John J. Zajac 261,000 (18)(21) 249,000 *
Ellen M. Zajac 30,000 (18)(22) 30,000 *
Sandra P. Zajac-Pepin 33,000 (18)(23) 21,000 *
Van Dyke Seed Company, Inc. 460,000 (18)(24) 460,000 1.3
Harry W. Keckley 100,000 (18)(25) 100,000 *
Kevin W. Keckley 110,000 (18)(26) 100,000 *
Jaramillo Family Trust 192,059 (18)(27) 192,059 *
Paul R. Jaramillo 132,941 (18)(28) 102,941 *
---------
Total 6,623,072
=========
</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. Except as noted below, none of the Selling Stockholders has had
any position or relationship with the Company other than as a shareholder
during the past three years.
2. Based on 35,961,627 shares of Common Stock issued and outstanding as of May
15, 1998.
18
<PAGE>
3. These shares were issued in private offerings pursuant to securities
purchase agreements dated March 31, 1998 and May 12, 1998, and includes
344,900 shares issuable upon conversion of warrants granted on May 13,
1998. Soros Fund Management LLC ("SFM LLC") serves as principal investment
manager to Quantum 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 were issued in a private offering pursuant to securities
purchase agreements dated March 31, 1998.
5. These shares were issued in private offerings pursuant to securities
purchase agreements dated April 2, 1998 and May 4, 1998, and in the case of
Brown Simpson Strategic Growth Fund Ltd and Brown Simpson Strategic Growth
Fund L.P., includes 25,900 and 8,700 shares issuable upon conversion of
warrants granted on May 4, 1998, respectively.
6. The shares were issued in a private offering pursuant to a securities
purchase agreement dated May 4, 1998 and includes 172,500 shares issuable
upon conversion of warrants granted on May 4, 1998.
7. These shares were issued in lieu of a cash payment due on January 1, 1998
to the former owners of Clark Seeds, Inc.
8. Excludes 1,400 shares, 11,000 shares and 40,000 shares issuable to Fred and
Janice Clark, Brent Clark and Curt Croshaw, respectively, issuable upon
exercise of options not currently exercisable.
9. Includes 1,900 shares issuable upon exercise of currently exercisable
options, but excludes 2,000 shares issuable upon exercise of options not
currently exercisable.
10. These shares were issued to authorized "stand-by" purchasers of Common
Stock not taken by the former owners of Clark Seeds, Inc.
11. Includes 1,200 shares issuable upon exercise of currently exercisable
options, but excludes 600 shares issuable upon exercise of options not
currently exercisable.
12. Includes 5,400 shares issuable upon exercise of currently exercisable
options, but excludes 25,100 shares issuable upon exercise of options not
currently exercisable.
13. Mr. Budd is an independent Director of the Company.
14. These Shares were issued in connection with the Company's January 6, 1998
acquisition of Lofts Seed, Inc. and Budd Seed, Inc. (collectively "Lofts
Seed") and are the subject of individual lock-up agreements .
15. Includes 10,000 shares issuable upon exercise of options granted on January
6, 1998, when Mr. Budd became a director of the Company, but excludes
10,000 shares issuable upon exercise of options not currently exercisable.
16. These Shares originally were issued to Gerald Chrisco in connection with
the Company's January 6, 1998 acquisition of Lofts Seed, and were
transferred by Mr. Chrisco to his wife Lee Ann Chrisco. Excludes an
additional 41,168 shares owned by Mr. Chrisco, over which shares Mrs.
Chrisco disclaims beneficial ownership.
17. Includes 25,000 shares issuable upon exercise of options granted on January
6, 1998, pursuant to the terms of an Employment Agreement between Mr. Budd
and the Company, but excludes 125,000 shares issuable upon exercise of
options not currently exercisable.
19
<PAGE>
18. The Shares offered hereby are the subject of individual lock-up agreements.
19. These Shares were issued in connection with the Company's March 12, 1998
acquisition of Discount Farm Center Inc.
20. These Shares were issued in connection with the Company's March 24, 1998
acquisition of Kinder Seed, Inc. Includes 10,000 shares issuable upon
exercise of options granted on March 24, 1998 , pursuant to the terms of an
Employment Agreement between Mr. Kinder and the Company, but excludes
40,000 shares issuable upon exercise of options not currently exercisable.
21. These Shares were issued in connection with the Company's April 8, 1998
acquisition of Zajac Performance Seeds Inc. and Zajac Performance Seeds
Oregon LLC (collectively "Zajac"). Includes 12,000 shares issuable upon
exercise of options granted on April 8, 1998, pursuant to the terms of an
Employment Agreement between Mr. Zajac and the Company, but excludes 36,000
shares issuable upon exercise of options not currently exercisable.
22. These Shares were issued in connection with the Company's April 8, 1998
acquisition of Zajac.
23. These Shares were issued in connection with the Company's April 8, 1998
acquisition of Zajac. Includes 12,000 shares issuable upon exercise of
options granted on April 8, 1998, pursuant to the terms of an Employment
Agreement between Ms. Zajac-Pepin and the Company, but excludes 36,000
shares issuable upon exercise of options not currently exercisable.
24. These Shares were issued in connection with the Company's April 23, 1998
acquisition of certain tangible and intangible assets of Van Dyke Seed
Company, Inc.
25. These Shares were issued in connection with the Company's April 27, 1998
acquisition of Ohio Seed Company.
26. These Shares were issued in connection with the Company's April 27, 1998
acquisition of Ohio Seed Company. Includes 10,000 shares issuable upon
exercise of options granted on April 27, 1998 , pursuant to the terms of an
Employment Agreement between Mr. Keckley and the Company, but excludes
40,000 shares issuable upon exercise of options not currently exercisable.
27. These Shares were issued in connection with the Company's May 6, 1998
acquisition of Las Vegas Fertilizer Co., Inc.
28. These Shares were issued in connection with the Company's May 6, 1998
acquisition of Las Vegas Fertilizer Co., Inc. Includes 30,000 shares
issuable upon exercise of options granted on May 6, 1998, pursuant to the
terms of an Employment Agreement between Mr. Jaramillo and the Company, but
excludes 120,000 shares issuable upon exercise of options not currently
exercisable.
20
<PAGE>
DESCRIPTION OF SECURITIES
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. The following summary description of the Company's capital
stock is qualified in its entirety by reference to the Company's Certificate of
Incorporation and By-Laws, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus is a part.
COMMON STOCK
- ------------
The Company is authorized to issue 75,000,000 shares of Common Stock, $.001
par value per share, of which 35,961,627 shares were issued and outstanding as
of May 15, 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 4,984,975 (13.8%) of the shares outstanding and
7,362,975 shares or 19.2%, after giving full effect to the exercise of their
options exercisable as of May 15, 1998. Therefore, the officers and directors
may be able to control the Company.
PREFERRED STOCK
- ---------------
The Company is authorized to issue 10,000,000 shares of Preferred Stock,
$.001 par value per share. At May 22, 1998, the Company had no shares of
Preferred Stock issued and outstanding.
The Preferred Stock may be divided by the Company's Board of Directors from
time to time into one or more series. The Board of Directors is authorized to
determine the rights, preferences, privileges and restrictions, including the
dividend rights, conversion rights, voting rights, terms of redemption
(including sinking fund provisions, if any) and liquidation preferences, of any
series of Preferred Stock and to fix the number of shares of any such series
without any further vote or action by stockholders. The Company has no present
plans, proposals, commitments or arrangements to issue any additional shares of
Preferred Stock. The Company's Certificate of Incorporation authorizes the
issuance of Preferred Stock with such designations, rights, and preferences as
may be determined from time to time by the Board of Directors. Accordingly, the
Board of Directors is empowered, without shareholder approval, to
21
<PAGE>
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.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Company's Common Stock is
Corporate Stock Transfer, Inc., Denver, Colorado.
PLAN OF DISTRIBUTION
Of the Shares offered hereby 376,928 are issuable by the Company in
original equity issuances to Qualified Institutional Buyers ("QIBs") (as defined
in Rule 144A promulgated under the Securities Act), institutional accredited
investors (as defined in Rule 501(A)(1), (2), (3) or (7) promulgated under the
Securities Act), other accredited investors (collectively "Investors") and
broker/dealers who are members in good standing with the National Association of
Securities Dealers, Inc. or to foreign broker-dealers. These Shares may be
issued from time to time without restrictive legend in original equity issuances
and, subject to any lock-up agreements entered into with the Company, may be
sold without restriction. This Prospectus will be supplemented to set forth the
name of such Investor or broker-dealer who purchases such Shares pursuant to
this Prospectus.
The 6,623,072 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.
None of the Selling Stockholders has held any position or office with, been
employed by or otherwise had a material relationship with the Company or any of
its affiliates during the three years prior to the date of this Prospectus,
except as set forth above under "Selling Stockholders."
The Shares may be sold from time to time directly 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 Shares
through underwriters, dealers or agents. The distribution of the Shares by the
Selling Stockholders may be effected from time to time in one or more
transactions 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
22
<PAGE>
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.
The Selling Stockholders, their transferees, intermediaries, donees,
pledgees or other successors in interest through whom the Shares are sold may be
deemed "underwriters" within the meaning of Section 2(11) of the Securities Act,
with respect to the Shares offered and any profits realized or commissions
received may be deemed to be underwriting compensation. Any broker-dealers that
participate in the distribution of the Shares also may be deemed to be
"underwriters," as defined in the Securities Act, and any commissions,
discounts, concessions or other payments made to them, or any profits realized
by them upon the resale of any shares purchased by them as principals, may be
deemed to be underwriting commissions or discounts under the Securities Act.
Registration of the Shares is being made pursuant to the individual stock
purchase agreements between the Company and each of the Selling Stockholders in
the Private Placements and/or the purchase agreements in acquisitions of
companies completed by the Company. Pursuant to the terms of such agreements,
the Company will pay all expenses incident to the offering and sale of the
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 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 Shares of Common Stock offered by them
hereunder.
The sale of the 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 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 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 Shares of the Company 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
23
<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 Shares by the Selling Stockholders.
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 Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon by Snow
Becker Krauss P.C., 605 Third Avenue, New York, New York 10158. Snow Becker
Krauss P.C. owns 43,823 shares of the Company's Common Stock and individual
members of the firm own additional shares of Common Stock.
EXPERTS
The consolidated financial statements of AgriBioTech, Inc. as of June 30,
1997 and 1996 and for the years then ended and the nine-month period ended June
30, 1995, have been included 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 report of KPMG Peat Marwick LLP refers to the retroactive effect
of a change in accounting for its convertible preferred stock.
The combined financial statements of Germain's Inc. and W-L Research, Inc.
as of September 30, 1995 and 1994 and for the years then ended have been
incorporated by reference herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein and upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements of E.F. Burlingham & Sons as of
December 31, 1996 and for the year then ended, have been incorporated by
reference herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein and
upon the authority of said firm as experts in accounting and auditing.
The financial statements of Olsen Fennell Seeds, Inc. as of December 31,
1996 and for the year then ended have been incorporated by reference herein in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference
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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 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.
The financial statements of Sunbelt Seeds, Inc. as of November 30, 1997 and
January 31, 1997 and 1996 and for the eleven-month period ended November 30,
1997 and the years ended January 31, 1997 and 1996 have been incorporated by
reference herein in reliance upon the report of Blackwell, Poole & Company,
independent certified public accountants, incorporated by reference herein and
upon the authority of said firm as experts in accounting and auditing.
The financial statement of Willamette Seed Co. as of June 30, 1997 and 1996
and for the years then ended have been incorporated by reference herein in
reliance on the report of Price, Koontz & Davies, P.C., independent certified
public accountants, incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
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