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Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-61097
SUPPLEMENT TO AGRIBIOTECH, INC.
PROSPECTUS DATED AUGUST 14, 1998
AS PREVIOUSLY SUPPLEMENTED ON
SEPTEMBER 4, 1998, DECEMBER 29, 1998 AND JANUARY 22, 1999
___________________________________
The Offering:
Shares of Common Stock offered
by Thomas K.Hodges, Halina K.
Hodges and Bill L. Rose, L.L.C.
(the "selling stockholders")...... 618,012
Offering price...................... The selling stockholders 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 February 4, 1999, the closing sale
price of AgriBioTech common stock on the
Nasdaq National Market was $7 per
share.
Nasdaq National Market Symbol....... ABTX
___________________________________
The shares offered hereby involve a high degree of risk. See "Risk
Factors" beginning on page 6.
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.
___________________________________
February 5, 1999
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This prospectus supplement incorporates important business and financial
information about AgriBioTech that is not included in or delivered with this
prospectus supplement. You may request a copy of all documents that are
incorporated by reference in this prospectus supplement 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 supplement) without charge.
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUMMARY.............................................. -3-
RISK FACTORS.................................................... -6-
USE OF PROCEEDS................................................. -13-
DIVIDEND POLICY................................................. -14-
PRICE RANGE OF COMMON STOCK..................................... -14-
RECENT DEVELOPMENTS AND WEB SITE DISCLOSURES.................... -14-
SELLING STOCKHOLDERS............................................ -16-
DESCRIPTION OF CAPITAL STOCK.................................... -17-
PLAN OF DISTRIBUTION............................................ -19-
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES............................. -21-
LEGAL MATTERS................................................... -21-
</TABLE>
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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 (crops in which the entire plant is harvested for livestock consumption)
and cool-season turfgrass seeds (seed used in home-lawns, golf courses, parks,
cemeteries and roadway medians). Since January 1, 1995, we have completed 34
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 $409 million for the fiscal year ended June 30, 1998. We own all
elements of our forage and turfgrass seed operations including traditional
genetic breeding (by breeding varieties with desirable traits together to form a
new variety) 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. This means that we are a
vertically integrated business. ABT's headquarters are located at 120 Corporate
Park Drive, Henderson, NV 89014; telephone (702) 566-2440.
On January 22, 1999, ABT completed the acquisition of 100% of the issued
and outstanding share capital of HybriGene, LLC, an Indiana limited liability
company, from Thomas K. Hodges, Halina K. Hodges, individuals, and Bill L. Rose,
L.L.C., an Oregon limited liability company, pursuant to the terms of a stock
purchase agreement dated January 22, 1999. HybriGene, LLC has been engaged in
research and development concerning the use of genetic technology in the farming
industry. The aggregate purchase price was $11.5 million, paid as follows:
Thomas and Halina Hodges - $9.5 million in the form of 515,000 shares of ABT's
common stock; Bill L. Rose, L.L.C. - $100,000 in cash and $1.9 million in the
form of 103,012 shares of ABT's common stock. The shares of common stock were
registered for resale as part of this registration statement and may be resold,
subject to the terms of a lock-up agreement between the selling shareholders and
ABT, under the prospectus being supplemented hereby. See "Recent Developments
and Web Site Disclosures."
You will find additional information including financial information,
concerning HybriGene, LLC in our current report on Form 8-K dated January 22,
1999, and filed on February 5, 1999, which is incorporated by reference into
this prospectus supplement.
The selling stockholders may offer the ABT shares for sale on the Nasdaq
National Market at the market price at the time of the sale. The selling
stockholders Inc. may also offer the ABT 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.
WHERE YOU CAN FIND MORE INFORMATION
ABT is subject to the information requirements of the Securities
Exchange Act of 1934. In accordance with the Securities Exchange Act, we file
annual, quarterly and special reports, proxy statements and other information
with the Securities and Exchange Commission. 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-4 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.
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(i) Our 1998 Form 10-K for the fiscal year ended June 30, 1998 as amended
on January 29, 1999;
(ii) Our Quarterly Report on Form 10-QSB for the fiscal quarter ended
March 31, 1996 (as amended on July 12, 1996) and Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 1998;
(iii) Our Current Reports on Form 8-K that we filed since July 1, 1998:
- Dated October 30, 1996 and amended on January 13, 1997, February
17, 1998 and August 11, 1998
- Dated May 22, 1998 and filed August 11, 1998
- Dated June 23, 1998 and filed on July 8, 1998 and amended on
August 28, 1998
- Dated August 28, 1998 and filed September 11, 1998 and amended on
November 12, 1998 and January 29, 1999
- Dated June 30, 1998 and filed October 26, 1998
- Amendment filed August 11, 1998 to report dated May 15, 1997
- Amendments filed August 11, 1998 and August 27, 1998 to report
dated August 22, 1997
- Amendment filed August 11, 1998 to report dated January 6, 1998
- Amendment filed August 11, 1998 to report dated January 9, 1998
- Amendments filed August 11, 1998 and September 4, 1998 to report
dated January 26, 1998
- Amendments filed August 28, 1998 to report dated October 22,
1997;
- Dated December 30, 1998 and filed on January 11, 1999
- Dated January 22, 1999 and filed on January 27, 1999
- Dated January 22, 1999 and filed on February 5, 1999
(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;
(v) Our Proxy Statement dated January 11, 1999 for our Annual Meeting to
be held on February 22, 1999; 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.
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THE OFFERING
We are registering 618,012 shares of our common stock for resale by Thomas
K. and Halina K. Hodges and Bill L. Rose, L.L.C., who are sometimes referred to
as the "selling stockholders."
We are registering shares pursuant to our agreement with the selling
stockholders. The selling stockholders will pay the cost of all brokerage
commissions and discounts, and all expenses incurred by them in connection with
sales of the shares. See "Plan of Distribution."
Commencing on the effective date of this prospectus supplement, the selling
stockholders may, from time to time, sell, transfer or pledge their shares
directly to purchasers, transferees or pledgees. The selling stockholders may
also offer their 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 shares either on the Nasdaq National
Market or in privately negotiated transactions or by both methods. We expect the
price for the 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.
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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.
Recent Rapid Growth and Potential Difficulties in Managing Growth.
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We have acquired all or part of 34 businesses in the forage and turfgrass
seed sector since January 1, 1995 and 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. This rapid growth has placed and may continue to place
significant demands on our management, technical, financial and other resources.
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 1998 Form 10-K and the September 30, 1998 Form 10-Q
(collectively, the "MD&A"), and "Description of Business - Acquisition Program"
in the 1998 Form 10-K.
Adverse Effects of Possible Failure to Integrate Our Acquisitions.
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Our future success depends upon our ability to combine or integrate the
operations of the businesses we have acquired and businesses we may acquire in
the future into a vertically integrated company which represents the full
spectrum of the forage and turfgrass seed production, processing, research and
development, sales and distribution process, rather than just one component of
this process. If we cannot successfully integrate all of the businesses we have
acquired or that we acquire in the future, our business, financial condition
and/or operating results may be materially adversely affected. As part of the
process of integrating the businesses acquired we initially announced that we
expected to record a non-recurring expense of between $5 million and $15 million
during Fiscal 1999. We subsequently announced that we expected the charge to be
at the upper end of the range or possibly higher. This will consist mainly of
severance and employment related costs and the closing of certain facilities.
You should therefore evaluate our prospects in light of the problems, expenses,
delays and complications associated with operating, managing and integrating a
large group of diverse businesses. See "MD&A" and "Description of Business -
Acquisition Program" in the 1998 Form 10-K.
No Assurance of Ability to Continue to Complete Additional Acquisitions.
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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 $409 million for Fiscal 1998 reflecting the disposition of the
fertilizer division of Willamette Seed Company, but not including pending
acquisitions. While we have been able to acquire 34 businesses since January
1995, we do not expect to make as many acquisitions in the future. Our future
growth depends upon our ability to continue to make acquisitions and/or to
increase sales from existing operations. We may not be successful in doing
either.
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Potential Undiscovered 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. If such liabilities exist, we could have liabilities that result
from the conduct of prior owners of the businesses and our operations may be
materially adversely affected. These liabilities may arise from environmental
contamination or non-compliance by prior owners with environmental laws or
regulatory requirements. 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.
Possible Inability to Develop New Products.
------------------------------------------
We are developing new, genetically superior forage and turfgrass varieties
which we believe will play a key role in our success. If we are not able to
develop and successfully market genetically superior strains either through our
own efforts or with industry partners, our business, financial condition and
results of operations may be materially adversely affected. See "Description of
Business--Research and Development" in the 1998 Form 10-K.
Possible Inability to Obtain 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 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 varieties
that are protected under the Plant Variety Protection Act ("PVPA") and are
seeking to acquire and/or develop other PVPA protected varieties. 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. See "Description of Business--Proprietary Rights" in the 1998 Form 10-
K.
Possible Inability to Access Biotechnology.
------------------------------------------
Breakthroughs in biotechnology have led to the introduction of new,
improved and
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specialized seeds in the corn, soybean and cotton seed sectors. We believe that
similar biotechnology breakthroughs will also lead to the introduction of
enhanced seeds in the forage and turfgrass seed sector. However, if we are
unable to access such biotechnology we may not be able to improve our margins
and profitability as was accomplished in these other seed sectors. Our objective
is to become the licensee or partner of choice in our seed sector for owners of
new genetic traits in plants for crops that were developed through
biotechnology, or genetic engineering. These genetic traits, which increase the
value of the crop grown from the seed, are known as value-added genetic traits.
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 1998 Form 10-K.
Possible Inability to be Competitive.
------------------------------------
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. 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.
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 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 and compete
against us. 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 1998 Form 10-K.
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Lack of Historical Profitability; Accumulated Deficit.
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Over the life of the Company, we have not shown consistent profitability.
We have reported only four 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 $11,704,613 through September 30, 1998.
Possible Inability to Service Substantial Indebtedness; Effects of
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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. Our cash flow from operations, to date, has
not been sufficient to meet our debt service obligations without additional
equity and debt financings. We 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 January 14, 1999, we have repaid both the $15 million
overadvance facility under the Revolving Credit Facility and our $15 million
bridge loan. As of February 2, 1999, we had borrowed approximately $81 million
under the Revolving Credit Facility and approximately $7 million was available
to be borrowed. As of September 30, 1998, we had short-term debt and long-term
obligations outstanding aggregating approximately $124 million, including the
Revolving Credit facility, the $15 million overadvance facility under it, and a
$15 million bridge loan. It is possible 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.
The degree to which we are leveraged could have important consequences to
you. For example:
. our level of indebtedness could make it more difficult to satisfy our
debt repayment obligations;
. our level of indebtedness could increase our vulnerability to general
adverse economic and industry conditions;
. 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;
. 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;
. our leverage position and covenants contained in the Revolving Credit
Facility could limit our ability to expand, compete and make capital
improvements; and
. 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
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operating performance may be affected by prevailing economic conditions and
financial, business, competitive, regulatory and other factors that are beyond
our control. 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 On ABT by Terms of Certain Indebtedness.
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The Revolving Credit Facility contains certain restrictive covenants that
limit us in many ways. A breach of any of these covenants could constitute an
event of default under the Revolving Credit Facility. 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. 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 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."
Current Need for Additional Capital.
-----------------------------------
Our capital requirements have been and are expected to remain significant.
We will need the proceeds from the exercise of warrants and other capital to
fund acquisitions. If we are unable to obtain additional capital, we will be
unable to fund additional acquisitions. 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. We believe that we have funds available under the
Revolving Credit Facility to substantially fund operations through June 30, 1999
for acquisitions completed through December 31, 1998. However, we may need to
seek an increase in or an alternative to the Revolving Credit facility to
finance increased operating needs or cutback operations resulting from, among
other things, unexpected changes in seasonality or weather patterns, or if
acquisitions are completed more rapidly than anticipated. See "MD&A."
Dependence on CEO and 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
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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 1998 Form 10-K.
Fluctuations Due To 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. This could result in large fluctuations in our results of operations
between quarters. 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. See "MD&A--Seasonality of Business and Quarterly Comparisons" in the
1998 Form 10-K.
Seasonal Fluctuations of Quarterly Results.
------------------------------------------
Our sales are subject to wide seasonal fluctuations that reflect the
typical purchasing and growing patterns for forage and turfgrass crops. Results
of operations from quarter to quarter do not necessarily reflect the results
that may be expected for any other interim period, or for the entire year.
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. See "MD&A--Seasonality of Business and Quarterly Comparisons" in
the 1998 Form 10-K.
Costs of Government Regulation.
-------------------------------
Our operations are directly and indirectly subject to various Federal and
state environmental controls and regulations. If existing environmental
regulations are changed, or additional laws or regulations are promulgated, the
cost of complying with those laws may be substantial. 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.
The United States Department of Agriculture, the Food and Drug
Administration, the Environmental Protection Agency, 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 1998 Form 10-K.
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Adverse Effect of Potential Future Sales of Common Stock.
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As of Janaury 25, 1999, we had 41,328,891 shares of common stock issued
and outstanding. Of these shares, approximately 6,640,000 shares are "restricted
securities" as that term is defined in Rule 144 under the Securities Act. It is
possible that the sale of these restricted 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 our ability to
raise additional equity capital. All but approximately 1,000,000 of these
restricted shares (which are currently available for resale pursuant to
Rule 144) have been registered for resale under the Securities Act. We also have
approximately 8.8 million shares of common stock available for issuance without
restriction upon exercise of outstanding options and 3,219,500 shares of common
stock available for issuance without restriction upon exercise of outstanding
warrants. We cannot predict what effect sales of these shares may have on the
existing market price of our common stock.
The selling stockholders must satisfy the prospectus delivery and other
requirements of the Securities Act prior to making any sales of the shares,
unless such sales are made in accordance with the provisions of Rule 144. 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; Volatility of ABT 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. If, in some future quarter, our operating
results are below the expectations of analysts, which has occurred in the past,
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. 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. See
"Market for Common Equity and Related Stockholder Matters" in the 1998 Form
10-K.
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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. Many of these systems, as well as many local area networks
("LANs"), desktop hardware, and desktop software are not Year 2000 compliant.
Although 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 have not obtained an
independent verification of our risk and cost estimates. 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."
Forward Looking Statements.
- --------------------------
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 our 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 above 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.
USE OF PROCEEDS
This prospectus supplement relates to shares issued in connection with our
acquisition of HybriGene, LLC We will not receive any proceeds from the sale
of the selling stockholder shares by the selling stockholders.
-13-
<PAGE>
DIVIDEND POLICY
We have never declared or paid any dividends on our common stock. We
currently intend to retain any earnings for use in the operation and expansion
of our business and do not anticipate paying any dividends on the common stock
for the foreseeable future. Our Revolving Credit Facility prohibits the payment
of cash dividends without the lenders' approval.
PRICE RANGE OF COMMON STOCK
Our 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, 1998-December 31, 1998...... $17 13/16 $ 8 15/16
January 1, 1999-January 27, 1999....... $16 11/16 $ 7 15/16
</TABLE>
As of January 26, 1999, the Company had 519 record holders of its Common
Stock and reasonably believes based on information from shareholder mailing
services, that there are in excess of 20,000 beneficial holders of its Common
Stock.
RECENT DEVELOPMENTS AND WEB SITE DISCLOSURES
RECENT DEVELOPMENTS
Acquisitions and Disposition
ABT signed letters of intent in connection with the three proposed
acquisitions described below. Since each pending acquisition is subject to
conditions and events which may not necessarily occur, no assurance can be given
that any of the following acquisitions will be completed.
ABT, in conjunction with Garst Seed Company, a member of Advanta Seeds
Group, agreed to purchase AgriPro Seeds, Inc. ("ABI") from Helena Chemical
Company ("Helena"). ABT agreed to purchase the alfalfa business unit and the
international sorghum business unit, while Garst has purchased the business
units relating to the sales of corn, soybeans, wheat, cotton, sunflowers and
domestic sorghum. Final due diligence on ABI revealed a number of adverse
changes and inconsistent business practices in the business since the initial
due diligence and signing of the letter of intent and caused ABT to request an
adjustment in the purchase price in order to complete the proposed acquisition.
On or about January 7, 1999, Helena sued the Company alleging breach of
contract, libel and violations of the Tennessee Consumer Protection Act and
seeks unspecified and trebled damages. The Company believes the lawsuit is
without merit and it will be defended vigorously. ABT has answered the complaint
and denied the material allegations and counterclaimed against Helena denying
the existence of a contract and alternatively if a contract exists as alleged:
(a) Helena breached the contract and ABT is entitled to damages for breach by
Helena, or (b) ABT is entitled to rescission or reformation of the contract.
ABT also entered into letters of intent to acquire two additional
businesses: Moore Seed Processors and Production Plus+. Moore, located in Grand
Prairie, Alberta, Canada, is a leading handler of creeping red fescue.
Production Plus+ is located in Plainview, Texas. They are a leading producer and
distributor of forage and grain sorghum in the U. S. and Mexico.
On December 22, 1998, ABT sold the assets relating to the chemical and
fertilizer division of Willamette Seed Company to Wilbur-Ellis Company. The
division has approximately $20 million in sales and the purchase price was
approximately $10.5 million for fixed assets, inventory and accounts receivable
with approximately $7.5 paid in cash and the balance paid through the assumption
of trade payables and other selected debt. The chemical and fertilizer division
of Willamette Seed Company specializes in the distribution of chemicals and the
manufacturing and distribution of fertilizer to farmers in the Willamette Valley
of Oregon, many of whom are contract growers for turfgrass seed production.
Class Action Lawsuits
On or about January 14, 1999, a class action lawsuit was commenced in the
U.S. District Court, District of New Mexico, against KPMG Peat Marwick LLP, ABT
and ABT's officers, Johnny R. Thomas, Henry A. Ingalls, Kathleen L. Gillespie
and John C. Francis. The lawsuit was filed by Milberg Weiss Bershad Hynes &
Lerach LLP on behalf of Ted Edwards and all others similarly situated who
purchased ABT common stock between September 24, 1997 and August 26, 1998. ABT
believes the lawsuit is without merit and will defend the lawsuit vigorously.
The lawsuit alleges that the defendants distributed or approved false financial
statements and documents concerning ABT's then existing business conditions and
that the plaintiffs paid artificially inflated prices for ABT common stock, all
in violation of the anti-fraud provisions of the Federal securities laws.
On or about January 25, 1999, a class action lawsuit was commenced in the
U.S. District Court for the Southern District of New York against ABT and ABT's
Chief Executive Officer, Johnny R. Thomas. The lawsuit was filed by Savett
Frutkin Podell & Ryan, P.C. on behalf of Marc Parker and all others similarly
situated who purchased the common stock of ABT during the period October 8, 1998
through January 22, 1999. ABT believes the lawsuit is without merit and will
defend the lawsuit vigorously. The lawsuit alleges that the defendants
misrepresented or failed to disclose material information about the status of
ABT's efforts to find a buyer for ABT in violation of the anti-fraud provisions
of the Federal securities laws, and that, as a result of those
misrepresentations or omissions, the price of ABT's stock was artificially
inflated.
On or about January 27, 1999, a class action lawsuit was commenced in the
U.S. District Court for the Southern District of New York against ABT and four
of its officers. The lawsuit was filed by Wolf Haldenstein Adler Freeman & Herz
LLP on behalf of persons who purchased the common stock of ABT during the period
October 8, 1998 through January 22, 1999. ABT believes the lawsuit is without
merit and will defend the lawsuit vigorously. The lawsuit alleges that ABT
misrepresented or failed to disclose material information about strategies
concerning its pursuit of pending and additional acquisitions and its plans to
secure and complete a buyout of all or part of ABT.
Recent Financings
On December 8, 1998, ABT announced that it had received aggregate proceeds
of approximately $11 million from successfully completing an equity placement.
ABT sold 250,000 shares of registered common stock at $12.50 per share to the
State of Wisconsin Investment Board, and 600,000 units (1 common share and 1
warrant) to three private investors led by Brown Simpson Asset Management, LLC
for $13.50/unit. The proceeds were designated for payment of short-term debt and
working capital, as were the voluntary warrant exercises of $6.7 million on
November 17, 1998.
On December 8, 1998, ABT also announced it had received a commitment for
long-term debt funding for a minimum of $25,000,000. On January 4 and 8, 1999,
ABT announced that it had received an aggregate of $25 million from the sale of
such long-term convertible debt financing. ABT, issued an aggregate of
$23,297,000 principal amount of 5% Convertible Debentures due December 30, 2001
and 1,703,000 common stock purchase warrants at a purchase price of $1.00 per
warrant, for an aggregate consideration of $25 million to six institutional
investors in private transactions that were exempt from the registration
requirements of the Securities Act of 1933. The convertible debentures give the
investors the right to convert their convertible debentures into shares of ABT
common stock at $13.68 per share at any time between the date the convertible
debentures were sold and December 30, 2001. The warrants give the investors the
right to purchase shares of ABT common stock at $15.00 per share at any time
before December 30, 2001. The terms of the convertible debentures were agreed to
on December 30, 1998, based on the closing price of ABT common stock on December
29, 1998 of $12.44. The proceeds from the long-term debt will be used for short-
term debt retirement, working capital and pending acquisitions. The long-term
debt will lower our interest costs. The shares of Common Stock underlying the
convertible debentures and warrants and the shares of Common Stock issuable in
payment of interst accrued on the convertible debentures have been registered
as part of this registration statement.
Biotechnology
On December 20, 1998, ABT entered into a License Agreement and a Stock
Purchase Agreement with Kimeragen, Inc. The purchase of Kimeragen's common stock
was in conjunction with ABT's acquisition of an exclusive world-wide license to
use Kimeragen's patented technology to develop genetically improved forage and
turfgrass species. In partial consideration of the grant of this license, we
agreed to issue to Kimeragen 56,250 shares of ABT common stock. We also agreed
to acquire shares of Kimeragen's common stock, representing an aggregate of
approximately 10% of Kimeragen's outstanding capital stock, for an aggregate
consideration of $3,000,000, payable in the form of 168,750 shares of ABT's
common stock.
On November 30, 1998, ABT announced that it is opening a molecular biology
and transformation laboratory at and in association with the University of Rhode
Island ("URI"). Transformation refers to the tools to introduce functional
foreign genes into plant species. The decision to begin research at the URI
campus was made to take advantage of synergies that are expected to benefit both
parties, including the university's new Environmental Biotechnology Initiative
that is designed to build capacity for environmental and agricultural
biotechnology in the university and the state through enhanced research
investment, academic programs and links to the business community. Work at the
ABT laboratory at URI will focus on forage and turfgrass seed species.
ABT also announced the hiring of Dr. Albert Kausch, a leading molecular
biologist and plant transformation expert. Dr. Kausch, formerly at a leading
competitive biotechnology program, and most recently at the University of
Connecticut, earned his advanced degrees in molecular, cellular and
developmental biology at the Iowa State University, Ames, IA. He is the author
of important published work in the areas of molecular biology and plant
transformation. He is also the author or co-author of twelve patents in these
areas.
On December 1, 1998, ABT announced it had acquired a license to use
whiskers transformation technology from Garst Seed Company (a member of the
Advanta Group, with whom it has agreed to purchase ABI, as described above).
With this license, ABT has acquired access to a technology which will give it
"freedom to operate" for transformation of all turfgrass and forage species,
ABT's strategic crops. Whiskers is a unique transformation system
developed in-house by Garst and for which Garst holds patent rights. The
agreement is initially a research license for this technology with the right, at
ABT's option, to enter into a commercial license.
On January 22, 1999, ABT announced that it had appointed Dr. Candace G.
Poutre to direct and manage ABT's biotechnology laboratory. Dr. Poutre joins ABT
as Director of Molecular and Cell Biology, reporting to Dr. Tom Rice, Vice
President and Director of Research. Dr. Poutre will be responsible for building
and managing ABT's biotechnology program located on the campus of URI, as
described above. She joins ABT from Mycogen Corporation (now a wholly-owned
subsidiary of The Dow Chemical Company) where, for the past four years, she had
been Director of Molecular Biology and Biochemistry, and held other important
science research and management positions during the past eleven years with
various units of what evolved into Mycogen Corporation. Dr. Poutre is a
recognized industry leader in seed and plant biotechnology research and has had
two important patents issued in the field, as well as numerous publications. She
earned her Ph.D. in molecular genetics from the Department of Genetics and
Development at Cornell University, Ithaca, NY in l986.
On January 25, 1999, ABT announced that it had purchased all the
outstanding shares of HybriGene, LLC, a biotechnology company with an extensive
patent estate involving site specific recombination technology originally
developed at Purdue University. In addition, as part of the transaction, ABT
acquired exclusive, worldwide rights to use the technology in all crops,
species, applications and geographies. Included in the technology acquired are
four promoters, DNA sequences used to "turn on" genes by providing a gene with
instructions regarding when in development and where in the plant they will be
active. One promoter results in constitutive gene expression (activity in most
tissues) at a very high level (believed equal to or better than the CAMV 35S
promoter, which is the current industry standard). The biotechnology that ABT
has acquired through the purchase of HybriGene and the associated exclusive
worldwide licenses for all applications has at minimum two broad applications.
It provides a method for developing male sterility in plants (male sterility
means not capable of reproduction because no viable pollen is produced); these
male sterile plants can be used to create hybrids of any plant species. The
second broad application of the technology provides an alternative way of
regulating gene activity. As part of this agreement, ABT has formed a broad
research alliance with Pure Seed Testing for development of transgenic
bentgrass, bluegrass and other turf species using both parties germplasm. The
exclusive stable of patents when developed will provide male sterile plants,
which will carry genes for herbicide resistance, disease resistance and other
valuable traits to protect plants. Each party will have the ability to
eventually market proprietary varieties that have been transformed with new
traits.
Management
Randy Ingram was elected Chief Financial Officer of ABT on November 2,
1998. Prior thereto, from September 1998, he served as a Vice President of ABT.
From January 1996, until September 1998, Mr. Ingram was Head, Business Planning
and Development at global headquarters of Novartis Seeds AG (Basel,
Switzerland). Prior thereto, from March 1993, he served as Vice President of
Finance and Chief Financial Officer at Northrup King Co., at the time an
operating unit of Sandoz Seeds, Ltd. He is a Certified Public Accountant, with
extensive postgraduate work in executive education at leading U.S. institutions.
On August 5, 1998, Randy Ingram entered into an employment agreement with
ABT terminable for cause (as defined) or without cause upon 10 working days'
notice. If the agreement is terminated without cause, Mr. Ingram will receive 12
months salary as severance pay and be vested in the options which would
otherwise have vested on the next anniversary of employment following such
termination. The agreement contains a covenant by Mr. Ingram not to compete
against ABT during the term and for a one-year period thereafter. If Mr. Ingram
voluntarily terminates the agreement, Mr. Ingram would not be entitled to any
compensation and not have any rights to exercise stock options exercisable upon
termination. In the event there is a change in the Chief Executive Officer of
ABT and at any time thereafter Mr. Ingram is either terminated or, in his sole
determination, there is a significant change in his duties, responsibilities, or
compensation, Mr. Ingram shall be vested in full in all stock options granted
pursuant to his employment agreement and shall be entitled to receive his full
compensation, less $1.00, and other employee benefits for two years from the
date of termination or his determining that such a change has occurred. In
addition, for a one-year period following the change of Chief Executive Officer,
Mr. Ingram has the option to terminate the agreement without justification and
be vested in his stock options, which would otherwise become vested on the next
anniversary date of employment and receive his full compensation for one year
following such termination.
Mr. Ingram is currently receiving a salary of $150,000 per annum. Under the
employment agreement, he was granted stock options to purchase 250,000 shares of
Common Stock exercisable at $15.5625 per share and vesting 50,000 shares upon
signing of the employment agreement and 50,000 on each of the four subsequent
anniversary dates.
WEB SITE DISCLOSURES
ABT had previously disclosed information in its Web Site, including
forward-looking information, that is not otherwise set forth in its reports
filed with the Commission. Such forward-looking and other statements reflect the
good faith judgment of ABT's management as to future events, and were solely
based on facts and factors known by ABT at the time such statements were made.
Because forward-looking statements are inherently subject to risks and
uncertainties, and actual results and outcomes may differ materially from the
results and outcomes discussed in the forward-looking statements, you should not
place undue reliance on statements which were not updated prior to their being
deleted from ABT's Web Site but should consider them in light of the other
information discussed in this prospectus. The risks and uncertainties that could
cause or contribute to a different results or outcome include without
limitation, ABT'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.
-14-
<PAGE>
ABT has made certain 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. ABT's Chairman of
the Board and Chief Executive Officer, Johnny R. Thomas, from time to time
informs the public as to current events concerning ABT by posting on ABT's Web
Site what we call a "Chairman's Update". The Prior Statements include: (a)
Chairman's Update dated March 4, 1998; (b) Chairman's Update dated April 1,
1998; (c) Chairman's Update dated June 22, 1998; (d) Chairman's Update dated
September 1, 1998; (e) Chairman's Update dated October 9, 1998; (f) Letter to
Shareholders dated November 10, 1998; and (g) 1997 Annual Report to
Shareholders.
ABT 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. ABT 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.
-15-
<PAGE>
SELLING STOCKHOLDER
The following table sets forth information as of January 25, 1999, based
on information obtained from the selling stockholders named below with respect
to the beneficial ownership of 618,012 ABT shares being registered hereunder;
the number of shares of our common stock known to us to be held by the selling
stockholders; the number of shares of our common stock to be sold; and the
percentage of outstanding shares of common stock beneficially owned before this
offering and after this offering.
<TABLE>
<CAPTION>
Percentage of
Outstanding
Amount and Shares Owned
Nature of Number of --------------------------
Beneficial Shares Before After
Name Ownership(1) Offered Hereby Offering (2) Offering
- ------------------ ------------- -------------- --------------------------
<S> <C> <C> <C> <C>
Thomas K. and Halina
K. Hodges 515,000(3)(4) 515,000 * *
Bill L. Rose, L.L.C. 103,012(3)(4) 103,012 * *
</TABLE>
- ----------------
* Less than 1%
(1) We believe that the persons named in the table have sole investment power
with respect to all shares of common stock beneficially owned by them. The
selling stockholders have not had any position, office or other material
relationship with us during the past three years.
(2) Based on 41,328,891 shares of common stock issued and outstanding as of
January 25, 1999.
(3) These shares were issued in connection with ABT's January 22, 1999
acquisition of HybriGene, LLC Excludes 35,000 shares issuable upon
exercise of options granted to Bill L. Rose, L.L.C., one of the principal
shareholders of HybriGene, LLC.
(4) The shares offered hereby are the subject of a lock-up agreement.
-16-
<PAGE>
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED
ABT's authorized capital stock consists of 75,000,000 shares of common
stock, $.001 par value, and 10,000,000 shares of preferred stock, $.001 par
value.
COMMON STOCK
We are authorized to issue 75,000,000 shares of our common stock, $.001
par value per share, of which 41,328,891 shares were issued and outstanding as
of January 25, 1999. All of the outstanding shares of our 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
our 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 our common stock. Holders of
shares of our 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 company assets available upon
liquidation subject to rights of creditors and any shares of preferred stock.
The holders of shares of our 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 our common stock outstanding are able to elect all
directors. The current executive officers and directors beneficially held
5,160,597 (12.5%) of the shares outstanding and 5,660,597 shares or (13.6%),
after giving full effect to the exercise of their respective options exercisable
within 60 days of January 25, 1999.
PREFERRED STOCK
ABT is authorized to issue 10,000,000 shares of preferred stock, $.001
par value per share. As of the date hereof, we had no shares of preferred stock
issued and outstanding.
The preferred stock may be divided by the 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. At present, we have no
plans,
-17-
<PAGE>
proposals, commitments or arrangements to issue any shares of
preferred stock. Our 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, we have
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 our stockholders.
WARRANTS
On December 30, 1998 and January 5, 1999, respectively, we issued 1,703,000
warrants to purchase shares of our common stock. These warrants were issued
along with our 5% convertible debentures to certain qualified institutional
buyers and accredited investors in private placements. These warrants were
purchased for $1.00 and are exercisable at $15.00 per share for three years
commencing on their issue dates. The warrants are subject to mandatory
conversion on five prior business days notice if the closing sale price of our
common stock exceeds $25 per share for 20 trading days out of any 30 consecutive
trading days ending within l5 days of our mailing notice of the conversion
provided there is a current prospectus covering the underlying common stock. The
shares of ABT common stock issuable upon exercise of the warrants have been
registered for resale under a separate registration statement. The holders of
the warrants and ABT have agreed not to exercise warrants if such holder would
then own in excess of 4.9% of ABT outstanding common stock following such
exercise.
On December 4, 1998, we issued 600,000 warrants to purchase our common
stock to certain qualified interested buyers and accredited investors in private
placements of units. Each unit was sold for $13.50 and consisted of one share of
common stock and one warrant. The warrants are exercisable at a price of $15.00
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 our common stock exceeds $19.50 per share for 20 trading
days out of any 30 consecutive trading days ending within 15 days of our mailing
notice of the conversion. The shares of common stock issuable upon exercise of
the warrants have been registered for resale under a separate registration
statement.
On August 28, 1998, we issued 886,410 warrants to purchase our common
stock to certain qualified institutional buyers and accredited 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 redemption at $.01 per warrant 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 our mailing notice of the conversion
and the holder fails to exercise the warrant. As of the date of this prospectus,
556,410 of these warrants have been tendered back to us with the exercise price
in exchange for shares of common stock registered as part of our Universal Shelf
Registration Statement (No. 333-61127.) The remaining 330,000 shares of common
stock issuable upon exercise of the warrants have been registered for resale
under a separate registration statement.
On May 4, 1998 and May 13, 1998, respectively, we issued 241,600
warrants and 344,900 redeemable warrants to purchase shares of our common stock.
These warrants were issued to certain qualified institutional buyers and
accredited investors in private placements of units. Each unit was sold for
$29.00 and consisted of two shares of common stock and one warrant. These
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 warrant on five prior business days' notice if
the closing sale price of our 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 warrants and the holder fails to exercise the
warrant. The shares of common stock issuable upon exercise of these warrants
have been registered with the Commission for resale under a separate
registration statement.
We have 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 our common stock is Corporate
Stock Transfer, Inc., Denver, Colorado.
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<PAGE>
PLAN OF DISTRIBUTION
The 618,012 selling stockholder shares offered hereby may be sold from
time to time by selling stockholders pursuant to the terms of lock-up agreements
between ABT and the selling stockholders dated January 22, 1999. The shares may
be sold 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 ABT. 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:
. ordinary broker's transactions and transactions in which
the broker solicits purchasers;
. privately negotiated transactions or pledges;
. through sales to one or more broker/dealers for resale of such
shares for their own account as principals, pursuant to this prospectus;
. in a block trade 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
. 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 the selling stockholders. The selling stockholders
also may sell selling stockholder shares short and deliver the selling
stockholders 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 supplement. 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 supplement.
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 us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of its 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 securities purchase agreement between us and the selling stockholders.
Pursuant to the terms of such agreement, we will pay all expenses incident to
the offering and sale of the selling stockholder shares to the public except as
described hereinafter. We 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, we have 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 we or 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,
we will use our 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, and other facts material to the transaction. In addition, upon ABT
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.
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 our common stock during the applicable "cooling off"
period five business days prior to the commencement of such
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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
stockholder.
The 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.
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, we have 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 our common stock and
individual members of the firm own additional shares of common stock.
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