<PAGE>
As filed with the Securities and Exchange Commission on January 29, 1999
Registration No. 333-
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AGRIBIOTECH, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada 85-0325742
- ----------------------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
120 Corporate Park Drive
Henderson Nevada 89014
(702) 566-2440
-------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
Dr. Johnny R. Thomas, Chairman of the Board
AgriBioTech, Inc.
120 Corporate Park Drive
Henderson Nevada 89014
(702)566-2440
-------------------------------------------------
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, of Agent for Service)
Copies to:
Elliot H. Lutzker, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158
Tel: (212) 687-3860 Fax: (212) 949-7052
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
<PAGE>
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
________________________________________________________________________________
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Offering Price Aggregate Amount of
Per Share (1) Offering Price(1) Registration Fee
------------- ----------------- ----------------
<S> <C> <C> <C> <C>
Common Stock,
$.001 par value 330,000(2)(3) $12.00 $3,960,000 $1,100.88
$.001 par value 600,000(3)(4) $15.00 $9,000,000 $2,502.00
$.001 par value 122,150(3)(5) $17.50(6) $2,137,625 $594.26
---------
Total: $4,197.14(7)
</TABLE>
____________________
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933, as
amended.
(2) Represents shares issuable upon exercise of Common Stock Purchase Warrants
at $12.00 per share.
(3) This Registration Statement also covers such indeterminable additional
shares as may become issuable pursuant to Rule 416 as a result of anti-
dilution adjustments.
(4) Represents shares issuable upon exercise of Common Stock Purchase Warrants
at $15.00 per share.
(5) These shares were issued in a private placement in connection with the
Company's September 18, 1998 acquisition of Garden West Distributors,
Inc.
(6) Calculated solely for purposes of determining the registration fee pursuant
to Rule 457(c) based upon the closing sale price of the Common Stock of the
Registrant on January 25, 1999 on the Nasdaq National Market of $8 15/16
per share.
(7) Of this amount, the fee of $1,100.88 for 330,000 shares of Common Stock was
paid upon the filing on October 26, 1998 of Registration Statement No. 333-
66145 and the remaining $3,096.26 is being paid with this new Registration
Statement.
_____________________
Pursuant to Rule 429 under the Securities Act, the Prospectus included as a
part of this Registration Statement shall be deemed to replace the Registrant's
Registration Statement (File Number 333-66145). Such earlier registration
statement registered 886,410 shares of Common Stock issuable upon exercise of
warrants, of which 330,000 shares and the $1,100.88 filing fee associated with
such securities are being carried forward. Upon effectiveness of this
Registration Statement, the remaining 556,410 shares shall be deemed to be
withdrawn from such earlier Registration Statement. This Registration Statement
and the Registration Statement being replaced hereby are collectively referred
to herein as the "Registration Statement."
_____________
-ii-
<PAGE>
SUBJECT TO COMPLETION, JANUARY 29, 1999
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
PROSPECTUS
AGRIBIOTECH, INC.
_________________________
The Offering:
Shares of common stock offered
by Selling Stockholders.......... 1,052,150
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 January 28,
1999, the closing sale price of ABT
common stock on the Nasdaq National
Market was $ 8 9/16 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.
Pursuant to Rule 429 under the Securities Act this prospectus replaces
our preliminary prospectus dated October 26, 1998.
_________________________
__,1999
<PAGE>
This prospectus incorporates important business and financial information
about AgriBioTech that is not included in or delivered with this prospectus. 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.
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............................................ -19-
DESCRIPTION OF CAPITAL STOCK.................................... -21-
PLAN OF DISTRIBUTION............................................ -23-
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES............................. -25-
LEGAL MATTERS................................................... -25-
EXPERTS......................................................... -26-
</TABLE>
-2-
<PAGE>
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 comsumption)
and cool-season turfgrass seeds (seed used in home-lawns, golf courses, parks,
cemetaries 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 intergrated business. ABT's headquarters are located at 120 Corporate
Park Drive, Henderson, NV 89014; telephone (702) 566-2440.
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-3 that we
have filed with the SEC. The SEC allows us to "incorporate by reference"
information that we file with them. This means that we can disclose important
information to you by referring you to other documents that we have filed with
the SEC. The information that is incorporated by reference is considered part of
this prospectus, and information that we file later will automatically update
and may supersede this information. For further information about ABT and the
securities being offered, you should refer to the registration statement and the
following documents that are incorporated by reference.
-3-
<PAGE>
(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
(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.
-4-
<PAGE>
THE OFFERING
We are registering 1,052,150 shares of our common stock for resale by
certain selling stockholders. This incudes an aggregate of 930,000 shares
issuable to investors that purchased common stock purchase warrants from us in
private transactions that were exempt from the registration requirements of the
Securities Act of 1933. The warrants give those investors the right to purchase
330,000 shares of our common stock at $12.00 per share and 600,000 shares of our
common stock at $15.00 per share, at any time for three years from the date they
were issued. An additional 122,150 shares were issued in connection with our
acquisition of Garden West Distributors and are being registered for resale by
the former owners of that business. The warrants are collectively referred to as
the "warrants", the investors are collectively referred to as the "selling
stockholders" and the shares issued and/or issuable to them are referred to as
the "selling stockholder shares."
We are registering the selling stockholder shares pursuant to our
agreements with the selling stockholders. We also agreed to pay the expenses of
this registration, which we estimate will be approximately $40,000. Each of the
selling stockholders will pay the cost of all brokerage commissions and
discounts, and all expenses incurred by them in connection with sales of their
selling stockholder shares. See "Plan of Distribution."
Commencing on the effective date of this prospectus, the selling
stockholders may, from time to time, sell, transfer or pledge their selling
stockholder shares directly to purchasers, transferees or pledgees. The selling
stockholders may also offer their selling stockholder shares through agents,
brokers, dealers or underwriters who may receive compensation in the form of
commissions or discounts. We anticipate that the selling stockholders will offer
the selling stockholder shares either on the Nasdaq National Market or in
privately negotiated transactions or by both methods. We expect the price for
the selling stockholder shares to be the market price prevailing at the time of
sale, a price related to the prevailing market price or a negotiated price.
Prior to selling any of their shares, the selling stockholders must satisfy the
prospectus delivery and other requirements of the Securities Act.
USE OF PROCEEDS
ABT will not receive any proceeds from the sale of the selling stockholder
shares by the selling stockholders. We will receive gross proceeds of up to
$12,960,000 from the exercise of the 930,000 Warrants, which we will use to fund
the cash portion of acquisitions and/or for working capital purposes.
-5-
<PAGE>
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.
-----------------------------------------------------------------
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.
-----------------------------------------------------------------
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.
-----------------------------------------------------------------------
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 may not make as many acquisitions in the future. Our future growth
depends upon our ability to continue to make acquisitions, and to increase sales
from existing operations. We may not be successful in doing either.
-6-
<PAGE>
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
-7-
<PAGE>
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.
-8-
<PAGE>
Lack of Historical Profitability; Accumulated Deficit.
------------------------------------------------------
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
------------------------------------------------------------------
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 January 27, 1999, we had borrowed approximately $78 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
-9-
<PAGE>
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.
------------------------------------------------------------
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
-10-
<PAGE>
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.
-11-
<PAGE>
Adverse Effect of Potential Future Sales of Common Stock.
--------------------------------------------------------
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.
-12-
<PAGE>
Management Information Systems and the Year 2000 Risks.
------------------------------------------------------
Because of the large number of businesses we have acquired, we have several
different data processing systems in use. These systems are substantially the
same systems that were in use by the acquired companies prior to their
acquisition by ABT. 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
We will not receive any proceeds from the sale of the selling stockholder
shares by the selling stockholders. Any proceeds received by us from the
exercise of the 930,000 warrants by the selling stockholders in an amount of up
to $12,960,000 of gross proceeds will be used to fund the cash part of pending
acquisitions an/or for working capital purposes. In the event that we have not
repaid any short-term indebtedness which is then due, we reserve the right to
reallocate proceeds of this offering for such purpose.
-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, 1998-Janauray 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.
Helena has 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 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. The lawsuit alleges that ABT
misrepresented or failed to disclose material information about strategies
concerning its pursuit of pending and additional acquisitons 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.
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
In the following paragraphs, ABT is disclosing information discussed in
ABT's Web Site, including forward-looking information, that is not otherwise
set forth in this prospectus. Forward-looking and other statements in this
section, as well as elsewhere in this prospectus, 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. The information
included in this section is intended to apprise you of information concerning
ABT which does not appear in our reports filed with the Commission and of which
you may be unaware. Except where otherwise indicated, the following statements
in this section have not been updated since they were made. Because these
statements and other 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 these statements 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 other forward-looking and other statements
(the "Prior Statements") in prior versions of its Web Site which were included
in registration statements filed previously with the Commission. The Prior
Statements include: (a) Chairman's Update dated March 4, 1998; (b) Chairman's
Update dated April 1, 1998; (c) Chairman's Update dated June 22, 1998; and (d)
Chairman's Update dated September 1, 1998.
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.
CHAIRMAN'S UPDATE
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 current
Chairman's Update, which superseded all prior ones, is dated October 9, 1998,
and is reprinted in its entirety as follows:
Dear AgriBioTech Shareholders:
Yesterday, your Company made the following announcement. "ABT has retained
Merrill Lynch & Co. as its investment banker, primarily to explore alternatives
to maximize shareholder value. In light of the dramatic and recent acceleration
in consolidation of the seed industry, the ABT Board of Directors has determined
that this is the appropriate time to evaluate strategic alternatives."
Why, did we take this step at this time? Answer, we believe it will
maximize shareholder value. Two parameters have changed over the past two
months.
(1) There are more large companies seeking to invest in the
biotechnology/seed arena today, than there was a few months ago. Recent
transactions, such as AgrEvo's purchase of Cargill's U.S. seed business and
Dow's purchase of Mycogen, during a time when public stock markets were
turbulent, were particularly enlightening.
(2) Your Company's stock is greatly undervalued relative to other seed
company valuations due to external forces independent of the Company and its
actions. Consequently, the cost of capital in public markets is significantly
higher today than it was two months ago.
Management is confident that potential capital raised through private
equity from life science companies will be significantly less than today's cost
in the public arena. Future Chairman's updates are not likely while this process
is being formulated and actioned. As always, I appreciate your past and
continued support.
Sincerely yours,
Johnny R. Thomas
Chairman/CEO
-15-
<PAGE>
1997 ANNUAL REPORT TO SHAREHOLDERS
The following section consists of statements from the Company's 1997 Annual
Report to Shareholders, which is not a document incorporated by reference in
this Registration Statement.
(a) Agribiotech Mission Statement. "To become the premier forage and
-----------------------------
turfgrass seed company in the world, while also providing a full service seed
product line. AgriBioTech, Inc. is committed to providing superior, value added
seed varieties and superior service. The ultimate goal is to achieve a 45%
market share in forage and turf seed by the year 2000 with annual revenues
exceeding $500 million.
(b) Chief Executive Officer's Letter.
--------------------------------
Dear Fellow Shareholders:
"In 1995, we set out to consolidate two important seed sectors and gain 45
percent market share by the year 2000; we are 12 to 18 months ahead of our
target schedule for achieving this goal. The annualized revenues from our
completed acquisitions mean that today we are approximately double the size in
market share of the second leading company. When pending acquisitions are
closed, the Company's market share position will be roughly 3.5 times that of
the largest competitive forage and cool season turfgrass seed company."
"To date, the Company has maintained historical revenues while increasing
same store sales by roughly 7 percent as a result of our consolidation
strategy."
"In Fiscal 1998, we expect to achieve full-year profitability because our
Company now has a strong platform of research and development through
traditional genetic breeding programs, seed processing plants, and national and
international distribution and sales networks for most forage and cool-season
turfgrass species."
"We have strong management. We are number one in market share, and we have
an industry-leading germplasm position. We expect continued growth in sales,
assets and equity in 1998."
"Respected and knowledgeable analysts predict that the agricultural
biotechnology market will grow to $12 to $14 billion a year within seven to
eight years."
(c) Industry and Strategy Review.
----------------------------
Industry Overview. "Recently, however, margins in the industry have begun
-----------------
to expand as increasingly larger and more sophisticated farmers and other users
have moved away from public varieties toward higher yielding proprietary
varieties. Proprietary varieties have desirable attributes such as improved
nutritional quality and disease and insect resistance. Additionally, protection
of intellectual property in the seed industry (variety rights) has recently been
firmly established by federal legislation (1994) and an important and favorable
U.S. Supreme Court ruling for seed companies (1995).
Prior to the launch of ABT's acquisition plan in 1995, no seed company
achieved the necessary size and scope of operations in the forage and turfgrass
seed sectors to develop higher yielding and better performing proprietary
varieties for national markets. The leading U.S. and global seed companies and
industry players--Pioneer Hi-Bred International, Inc., DEKALB Genetics
Corporation, Novartis AG, Delta and Pine Land Company, Monsanto Co., and The Dow
Chemical Company--have focused on and invested in other important seed sectors
like corn, cotton and vegetables. The leaders in these sectors have used
investment in traditional seed breeding R&D and vertical integration to generate
annual returns on equity in the 20 percent range, and because of their
leadership positions, are now realizing sizable additional returns and profits
due to the commercialization of higher-value biotechnology-based seed products."
Biotechnology and Biotechnology Access. "The impact of biotechnology on the
--------------------------------------
value of agricultural crops can be great. The soybean crop in the U.S. is a
present day example of what can happen when value-added, biotechnology produced
seeds [new seeds with traits that increase the value of the plants grown from
the seed that have been developed through biotechnology or genetic engineering]
are developed and marketed. Prior to the introduction of Roundup Ready(R)
soybean seed in the U.S. (seed genetically engineered to be tolerant to a
specific, efficacious and cost-effective herbicide) farmers spent between $800
and $900 million on soybean seed in the U.S. In 1998, 20-25 percent, of all U.S.
soybean acres are expected to be planted with these seeds generating increased
value for seed companies and the technology's owner of $200 to 250 million."
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<PAGE>
(d) Business Strategy and Operations.
--------------------------------
Management and Leadership. The Company announced that on January 1, 1998
-------------------------
two key positions were filled, that of President and Chief Operating Officer and
Vice President, Director of Research. The respective biographies of Kent
Schulze, President, and Dr. Thomas B. Rice, Vice President, appear in the
company's Proxy Statement dated January 20, 1998. See "Prospectus Summary --
Where You Can Find More Information." This section includes the following
biographies of various other employees which also appear in the Company's 1997
Annual Report to Shareholders, none of whom, except Dr. Rice, are executive
officers of the Company.
"Dr. Thomas B. Rice, Vice President, Director of Research, who will join
the Company January 1, 1998 was formerly with DEKALB Genetics Corporation, where
he served 10 years as Directors of Research and subsequently as President and
Chief Operating Officer of DEKALB Plant Genetics, a subsidiary. Tom was the
architect of DEKALB'S highly successful biotechnology effort, starting at Pfizer
in 1976 where he initiated, managed and directed the plant biotechnology effort.
This program later because DEKALB's highly productive effort as a result of a
joint venture with Pfizer. Tom's program developed the first genetically
engineered corn and received the first product patents for corn, covering insect
resistance (BT), herbicide tolerance and improved nutritional quality.
[Genetic engineering involves the directed alteration of genetic material by
intervention in genetic processes, for example, gene splicing.] During his seed
industry career, Tom has had direct management experience in the areas of
international subsidiaries, strategic alliances, breeding and biotechnology R&D,
intellectual property rights, strategic planning and technology transfer. He
will lead ABT's R&D biotechnology efforts to maximize the impact of the
Company's planning and investments in this critical area and in exploring the
possibilities associated with licensing in and/or collaborating in the
development of biotechnology traits, products and processes. Tom received a PH.D
in genetics from Yale University in l973, and was a Post-Doctoral fellow of
Brookhaven National Laboratory and a Research Associate at Michigan State
University before joining Pfizer.
Keith Sandberg, National Sales Director, was formerly Area Manager for the
Central and Southern Regions of Cargil Hybrid Seeds, a division of Cargill,
Inc., the largest privately owned company in the U.S. Keith was responsible for
the sales and commerical development activities to support Cargill's corn,
alfalfa and sorghum product lines. From 1987 to 1993, Keith was responsible for
Sales, Sales Administration and Technical Services, Central and Southern
Regions, for Crgill, based in Aurora, Illinois. Keith managed all sales and
agronomy activities for Cargill's seed products in the Central and Southern
regions, and had primary responsibilities for managing the integration
[consolidation] of the seed brands PAG, Paymaster and Cargill. From 1981 to
1987, Keith managed North American Sales for the Paymaster Brand and had profit
and loss responsibility for Cargill's corn business in Canada.
Bruce J. Ceranske, General Manager of W-L Research, was formally a District
Sales Manager for all or parts of Wisconsin, Minnesota, Michigan and Iowa, for
Cargill Hybrid Seeds based in Waupaca, Wisconsin since 1989. In addition, Bruce
was selected to Cargill Hybrid Seeds Corn Business Management Team and Forage
Management Team, which selected corn and alfalfa germplasm for production, and
commercialization [introduction into the market as new products]. Currently,
Bruce is managing W-L Research, based in Evansville, Wisconsin. W-L Research is
a world leading alfalfa research company with varieties marketed globally.
Keith Flynn, Forage Business Unit Director, holds a BS degree in Plant
Breeding & Genetics from the University of Reading, England. Keith was formerly
Vice President of Alfalfa, Wheat and International (1994 to 1997) for Agripro
Seeds, a wholly owned subsidiary of Helena Chemical Co. Keith directed three
profitable business units with research, production, sales and marketing as
direct reporting functions. From 1972 to 1994, Agripro Seeds and its
predecessors were owned by Shell Oil and The Royal Dutch Shell Group. Keith held
increasingly important positions in sales, marketing, product management and
general management. He has extensive knowledge of both national and
international seed business and brings 25 years of broad seed experience to ABT.
Doug Elkins, Western Regional Sales Manager joined Germain's Seeds in 1978
as a Washington State Sales Representative. He was promoted to Sales Manager in
1980, to Division Manager in 1987 and to Chief Executive Officer in 1992. Prior
to joining Germain's, Doug was employed at Ferry Morse Seed Company and Helena
Chemical. He has 24 year of experience in the seed business and served as
President of the Pacific Seed Association and currently serves as President of
the California Seed Association and holds a position on the California Seed
Advisory Board. As the Western Regional Sales Manager he has the primary
responsibility and oversight of sales and marketing for the western region of
ABT which includes Germain's Seeds and Hobart Seed Co.
-17-
<PAGE>
Greg S. Fennell started in the seed business as a shipping coordinator in
1979, became active in seed sales in 1980 and in 1986 co-founded Olsen Fennell
Seeds, Inc. with James E. Olsen. They developed Olsen Fennell into an industry
leading turf and forage seed company with revenues in excess of $35 million.
Greg's primary responsibility at Olsen Fennell is income production [increasing
sales revenues] where he dedicates most of his time to distributor sales and the
creation and implementation of marketing plans for proprietary turf and forage
grasses. He is responsible for international sales, and concentrates much of his
domestic marketing efforts in the Midwestern and Southern states. Greg graduated
from the University of Oregon with a major in Business Management.
Greg McCarthy's career in the seed business began in 1976 as an agronomist
and field representative for E.F. Burlingham & Sons. Greg is experienced in
various aspects of seed management procurement [the process of adding effective
management systems to seed companies] and international sales. Greg and Doug
Pope purchased Burlingham in 1994 and have guided the company into becoming an
industry leading turf and grass seed research, production and distribution
company with net sales in excess of $36 million. Greg is responsible for
directing Burlingham's research and development department. He also is
responsible for the procurement and purchasing of seed, including the program
for production of proprietary seed varieties [those for which we either own or
license the rights to use] and maintaining relationships with seed growers. Greg
graduated from Oregon State University with a major in Agronomic Crop Science.
James E. Olsen started in the seed business in 1983 as a sales trainee at
DM Combs, Co., and in 1986, co-founded Olsen Fennell Seeds, Inc. with Greg
Fennell. They developed Olsen Fennell into an industry leading turfgrass and
forage seed company with revenues in excess of $35 million. James is responsible
for oversight of all production contracts, grower relations and breeding work
for Olsen Fennell Seeds. He also has responsibilities for domestic sales on
proprietary products for both turfgrass and forage seeds. He graduated from
Willamette University with a major in Philosophy.
Michael Peterson, Ph.D., Director of Research, W-L Research, Inc., joined
W-L Research, Inc. in 1982. His responsibilities include the coordination of
all alfalfa breeding and product development activities at the four W-L alfalfa
research stations. He is also responsible for technical product support for the
W-L Research franchise and private label sales as well as coordination of all W-
L contract and joint venture projects. He attended the University of California
at Davis where he received a Bachelor of Science degree in Agronomy in 1978.
Mike also attended the University of Minnesota where he received his Masters of
Science and a Doctoral degree in Plant Breeding in 1982.
Doug Pope started in the seed business in 1983 when he joined E. F.
Burlingham & Sons. Prior to that he was an Account Executive for the Bell
Telephone System. Doug and Greg McCarthy purchased Burlingham in 1994 and led
it into becoming an industry leading turf and grass seed research, production
and distribution company with revenues in excess of $36 million. Doug is the
Chief Operating Officer of Burlingham and is responsible for domestic sales
which includes program and product development for Burlingham's customer base
[working with Burlington's customers to develop appropriate sales products and
marketing programs]. Doug oversee's the daily functioning of Burlingham
including shipping and warehousing. Doug graduated from Penn State University
with a major in finance.
Functional Planning, Vertical Integration and Efficiencies. "Market share
----------------------------------------------------------
at the acquired companies has been maintained. In fact, sales and revenues
growth have been realized at certain, key combined operations. Improved
customer service and a superior product offering, among other things, accounts
for this and is indicative of what the Company intends to achieve and improve
upon with other acquired businesses.
Management believes that these planning, integration and optimization
efforts [efforts to maximize operating efficiency and financial results by
assimilating the operations of acquired companies into the larger context of
ABT's operations, including research and development, production and
distribution] are typical of others to come as the Company grows and builds upon
its acquisition program success. Operationally, Management's plans are to
increase the profitability of both the Company and its customers by implementing
the [following strategies]."
LETTER TO SHAREHOLDERS
The following section consists of a letter to the Company's shareholders
from the Company's Chief Executive Officer which appears in its entirety on the
Company's Web Site.
November 10, 1998
Dear AgriBioTech, Inc. Shareholder:
Last Thursday's analyst briefing by OPERATIONS management of ABT was
----------
historic as integration time lines, future cost savings, expected gross margin
improvements and accelerated product development plans were presented. This
landmark transition from a focus on growth through mergers and acquisitions
(phase 1 of ABT's development plans) to integration (phase 2) was possible for
three key reasons.
A) The revenue growth goal from zero to almost $500 million of annualized
revenues was achieved approximately two years ahead of schedule.
B) A first class value-added veteran, professional operations team, rich in
seed experience was recruited from industry leading companies such as Novartis,
DEKALB, Pioneer, Cargill, and Seminis.
C) The veteran operations management has successfully led teams, such as
strategy and culture teams, comprised of members from all levels of the forage
and turfgrass companies acquired by ABT through a protracted planning process
designed to develop plans to integrate 33-36 acquired companies into ABT in a
way that will enable ABT to become the forage and turf equivalent of Pioneer in
corn or Delta and Pine Land in cotton.
Shareholders should recognize that it does no good to build "Franchise
Value" through the acquisition of industry leading market share, industry
leading germplasm (genetic research), world class personnel and development of a
biotechnology program unless a first rate integration plan is implemented and
------
executed on a timely basis. The "team" process employed by ABT may initially
appear to be slow to shareholders, but the plan will achieve exceptional end
results rapidly and efficiently due to accelerated implementation achieved
through "buy in" by all employees.
Analysts, both buy and sell side, received the information quite favorably.
Positive points presented by management and subsequently emphasized by the
respective analysts included the following:
. An integration plan which will mold the 33-36 acquisitions into an
exceptional, customer oriented, world class seed company.
. A research and development program which is currently three times as large
as any competitor and which is projected to triple in size over the
next five years.
. An emerging biotechnology program was unveiled, which is more advanced
than previous perceptions of analysts.
. Revelation of an integration timeline and resulting efficiencies which
will continue to improve profitability.
. Sizeable gross margin improvements are expected through product shifts
prior to biotechnology introduction.
. Acceptance that fiscal 1999 will be an integration year resulting in giant
steps forward, but at the cost of dual operating expenses and a non-
recurring charge of approximately $5 - $l5 million.
. Limited guidance was provided by ABT on Fiscal 1999 EPS estimates of
analysts. The first quarter will be profitable, but less than the
consensus estimate, $0.04 per share. The fiscal year will be
profitable from operations, but may be a loss after the non-recurring
charge, depending upon the size of the charge.
. A further realization that the forage and turfgrass seed markets are very
large, approximately twice the acres of any other seed sector.
. Increased confidence that ABT will attract significant interest from
potential strategic partners.
Shareholders may rightfully ask why did the common share price move
downward on Thursday and Friday, if the information and meeting were so
positive? The answer should be obvious. Critics of ABT (including short
sellers of over 6.8 million shares and their "touts") have seized the moment to
distort a number of issues. The following comments are offered on the distorted
issues raised by critics.
* Non-recurring cost: Virtually all companies which grow rapidly through
acquisitions have non-recurring costs. ABT's $5 - $l5 million expected
restructuring cost is much less than might be expected considering our
rapid and large growth through acquisitions. The non-recurring charge
will likely include some non-cash items and some accrued charges;
therefore the impact on cash flow will be minimal prior to completion of
the strategic investment process.
* Fiscal 1999 EPS: Strategic investors in ABT are not concerned with
Fiscal 1999 EPS. ABT's real value is in harnessing the "Franchise
Value" acquired into a world class seed company poised to efficiently
develop and introduce new value added products with dramatically
improved future profitability.
* Low gross margins: Critics do not appear to be aware of seed industry
gross margin history. All seed sectors once marketed commodity type
products with low gross margins as a result of fragmented ownership
and small investments in research, development and intellectual property
protection. Shareholders should look at soybean seeds as a recent
example of rapid margin changes. The soybean seed sector began to expand
private research and development in l970 due to the passage of the Plant
Variety Protection Act. Significant consolidation of the sector occurred
in the late 1980's through the early 1990's. In l994, the sector had
been consolidated significantly and annual soybean seed sales to farmers
were approximately $700 million with gross margins which were lower than
-----
forage and turfgrass seed margins. In only four short years, annual
soybean seed sales to farmers have increased to approximately $1.7
billion, a billion dollar increase in market size, with gross margins
dramatically improved to about 36% primarily as a result of one product
introduction. Continued gross margin improvement is anticipated as
additional proprietary products are released. ABT is poised to lead the
forage and turfgrass seed sector through a gross margin change
comparable to the past four years for soybeans. There is no reason why
similar improvement in gross margin and growth in the market size of the
forage and turfgrass seed sector will not steadily occur.
* Strategic investor interest: Critics want to convince shareholders that
strategic investors will not be interested in ABT or the forage and
turfgrass seed sector. Critics' apparent desperation is fueled by their
need to cover their reported 6.8 million short share position before the
------
bidding process results in a new share valuation likely to be in the
$25-$50 per share price expectation range of analysts who are current on
ABT fundamentals. ABT management believes that strategic investors will
recognize the importance of the forage and turfgrass sector as the
second largest seed market and recognize in ABT the factors that have
been "drivers" of value for other major seed companies.
* Financial strength: ABT's debt situation is as follows, contrary to
general representations made by critics.
- $100 million revolving line of credit: This is a three year
facility, currently drawn to about $95 million, including the $15
million overadvance which is permitted above borrowing base
calculations (the "BABC Bridge"). The $15 million portion of the
$100 million revolving line will be paid off prior to December 31,
1998 (the due date) or a new due date will be negotiated or a
combination of partial pay down and negotiation of a new due date
for the balance will occur.
- $15 million Deutsche Bank Bridge: This bridge is due December 31,
1998; however, agreement in principle has been reached to extend the
due date to March 31, 1999 or the date the strategic investment is
completed, whichever occurs first.
- $19.8 million other debt: ABT has $12.5 million in long term debt
with financial institutions that have 1 to 10 year maturities and
approximately $7.3 million in other long term obligations such as
covenants not to compete and other amounts due to former owners of
acquired businesses.
- Financing alternatives: The Company has a number of alternatives,
including renegotiation of debt terms, exercise of a portion of the
outstanding options and warrants (the aggregate exercise price of
which is approximately $100 million), term debt using part or all of
the $60 million of unencumbered property, plant and equipment as
collateral, limited private placement of equity or debt.
In summary, ABT has entered into the important integration process led by
an experienced and exceptional professional team of managers. The process of
strategic investment of 20% or more of the Company's stock or a total buyout
process is expected to result in an ABT valuation well above current share
prices. The process is expected to take approximately three months measured
from October 8, 1998 to determine the identity, type and terms of the
investment. Thanksgiving and Christmas holidays may impact the schedule by two
- - three weeks, but the process is proceeding well.
Shareholders should carefully consider the source and motive behind all
information disseminated about ABT. Carefully evaluate information presented by
ABT management, informed analysts with seed industry experience, as well as the
critics and then compare the information against the recent history of other
seed company valuations.
ABT does not plan to hold a press conference when first quarter results are
formally released. Management believes the press release disclosing the
quarterly numbers, coupled with recent guidance given by the Company and
information released on November 5 by ABT provide investors with adequate
information.
I wish each of you well over the next couple of months as you develop your
investment strategy as appropriate. As always, thanks for your past and
continued support.
Sincerely yours,
Johnny R. Thomas
Chairman/CEO
Additional Press Release
On December 11, 1998, ABT announced that ongoing consolidation actions to
date should result in estimated cost savings of approximately $0.75 million per
year. Dr. Johnny R. Thomas, Chairman and CEO, noted "that recent financing
activities are designed to allow ABT to decrease interest expense and operate
its business, independent of the strategic alternative process, which is
continuing as planned.
-18-
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information as of Janaury 25, 1999,
except as noted below, based on information obtained from the selling
stockholders named below with respect to the beneficial ownership of 1,052,150
selling stockholder shares being registered hereunder; the number of shares of
our common stock known to us to be held by each; the number of shares of our
common stock to be sold by each; and the percentage of outstanding shares of
common stock beneficially owned by each before this offering and after this
offering.
<TABLE>
<CAPTION>
Percentage of
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>
Quantum Partners LDC 4,562,882 (3) 270,000 (4) 10.9% 10.2%
FMR Corporation 1,765,600 (5)(6) 60,000 (4) 4.3% 4.1%
LBI Group Inc. 634,700 (7) 300,000 (8) 1.5% * %
Brown Simpson Strategic
Growth Fund, L.P. 219,000 (9) 40,000 (8) * % * %
Brown Simpson Strategic
Growth Fund, Ltd. 660,560 (10) 260,000 (8) 1.6% 1.0%
Lafayette Franklin 20,560 (11) 20,360 (12) * *
Kenneth J. Fox 21,858 (11) 20,358 (12) * *
Philip E. Hemminghaus 20,358 (11) 20,358 (12) * *
William Kunnari 20,358 (11) 20,358 (12) * *
Bradley Geisler 20,358 (11) 20,358 (12) * *
William Peterson 20,358 (11) 20,358 (12) * *
---------
Total . . . . . . . . . . . . . 1,052,150
=========
</TABLE>
- ---------------------
* Less than 1%
(1) Unless otherwise noted, we believe that all persons named in the table
have sole investment power with respect to all shares of common stock
beneficially owned by them. A person is deemed to be the beneficial
owner of securities that can be acquired by such person within 60 days
from the date hereof upon the exercise of warrants or options. Assumes,
for each person, that any exercisable and convertible securities that
are held by such person (but not those held by any other person) and
that are exercisable or convertible within 60 days from the date hereof
have been exercised. None of the selling stockholders has had any
position, office or other material relationship with ABT other than as
a shareholder during the past three years.
(2) Based on 41,328,891 shares of common stock issued and outstanding as of
January 25, 1999.
(3) Includes 344,900 and 270,000 shares issuable upon exercise of warrants
issued in private placements on May 13, 1998 and August 28, 1998,
respectively. Soros Fund Management LLC ("SFM LLC") serves as principal
investment manager to Quantum
-19-
<PAGE>
Partners LDC and as such, has been granted investment discretion over
Quantum Partners' Shares. In such capacity SFM LLC may be deemed to
have voting and dispositive power over such Shares. Mr. George Soros,
as Chairman of SFM LLC, and Mr. Stanley Druckenmiller, as Lead
Portfolio Manager of SFM LLC, may also be deemed to have voting and
dispositive power over such Shares.
(4) These shares are issuable upon exercise of warrants at $12.00 per share
issued in a private placement pursuant to securities purchase
agreements dated August 28, 1998.
(5) Includes 60,000 shares issuable upon exercise of warrants at $12.00 per
share issued in a private placement on August 28, 1998, held in the
nominee name of Mag & Co.
(6) As of December 10, 1998, included 1,374,900 shares beneficially owned
by Fidelity Management and Research Company as a result of acting as
investment advisor to various investment companies registered under
Section 8 of the Investment Company Act of 1940; 131,400 shares
beneficially owned by Fidelity Management Trust Company as a result of
serving as investment manager of certain institutual accounts; 259,300
shares beneficially owned by Fidelity International Limited. Fidelity
Management Research Company and Fidelity Management Trust Company are
both wholly-owned subsidiaries of FMR Corp. Fidelity International
Limited is a related, but independent entity.
(7) Includes 172,500 and 300,000 shares issuable upon exercise of warrants
issued in private placements on May 4, 1998 and December 4, 1998,
respectively. LBI Group, Inc. is an independent wholly-owned subsidiary
of Lehman Brothers Holdings Inc. Does not include 476,840 shares of
Common Stock issuable upon conversion of $6,523,160 of 5% Convertible
Debentures due December 30, 2001 plus 476,840 shares issuable upon
exercise of three-year warrants issued to LBI Investments LLC, an
affiliate of LBI Group, Inc.
(8) These shares are issuable upon exercise of Warrants at $15.00 per share
issued in a private placement on December 4, 1998, pursuant to
securities placement agreements dated December 4, 1998.
(9) Includes 8,700 and 40,000 shares issuable upon exercise of warrants
issued in private placements on May 4, 1998 and December 4, 1998,
respectively. Includes 85,150 shares issuable upon conversion of
$1,164,850 of 5% Convertible Debentures due December 30, 2001, plus
85,150 shares issuable upon exercise of three-year warrants. This
entity is an investment fund whose general partner is Brown Simpson
Capital LLC. Does not include 238,420 shares of Common Stock issuable
upon conversion of $3,261,580 of 5% Convertible Debentures due December
30, 2001, plus 238,420 shares issuable upon exercise of three-year
warrants issued to Brown-Simpson - ORD Investments LCC, another
investment fund managed by Brown Simpson Asset Management LLC.
(10) Includes 25,900 and 260,000 shares issuable upon exercise of warrants
issued in private placements on May 4, 1998 and December 4, 1998,
respectively. Includes 187,330 shares issuable upon conversion of
$2,562,670 of 5% Convertible Debentures due December 30, 2001, plus
187,330 shares issuable upon exercise of three-year warrants. This
entity is an investment fund managed by Brown Simpson Asset Management
LLC. Does not include 238,420 shares of Common Stock issuable upon
conversion of $3,261,580 of 5% Convertible Debentures due December 30,
2001, plus 238,420 shares issuable upon exercise of three-year warrants
issued to Brown-Simpson - ORD Investments LCC, another investment fund
managed by Brown Simpson Asset Management LLC.
(11) Excludes 50,000 shares issuable upon exercise of options not currently
exercisable that were granted on September 18, 1998 pursuant to the
terms of an Employment Agreement between this person and ABT.
(12) These shares were issued in a private placement in connection with our
September 18, 1998 acquisition of Garden West Distributors, Inc.
Because the selling shareholders may offer all or some portion of the
above referenced securities pursuant to this prospectus or otherwise, no
estimate can be given as to the amount or percentage of such security that will
be held by the selling shareholders upon termination of any such sale. In
addition, the selling shareholders may have sold, transferred or otherwise
disposed
-20-
<PAGE>
of all or a portion of such securities since December 10, 1998 in transactions
exempt from the registration requirements of the Securities Act. The selling
shareholders may sell all, part, or none of the securities listed above.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED
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,
-21-
<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 this 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 this 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.
-22-
<PAGE>
PLAN OF DISTRIBUTION
The 1,052,150 selling stockholder shares offered hereby may be sold
from time to time by selling stockholders in one or more transactions in the
over-the-counter market, in negotiated transactions or a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
The selling stockholder shares may be sold from time to time directly
to purchasers by the selling stockholders and/or by their assignees,
transferees, pledgees or other successors for their own accounts and not for the
account of 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 selling stockholders. The selling stockholders also
may sell selling stockholder shares short and deliver the selling stockholder
shares to close out such short positions. The selling stockholders also may
enter into option or other transactions with broker-dealers which require the
delivery to the broker-dealer of the selling stockholder shares, which the
broker-dealer may resell pursuant to this prospectus. The selling stockholders
also may pledge the selling stockholder shares to a broker or dealer and upon a
default, the broker or dealer may effect sales of the pledged selling
stockholder shares pursuant to this prospectus.
The selling stockholders and/or their assignees, transferees,
intermediaries, donees, pledgees or other successors in interest through whom
the selling stockholder shares are sold may be deemed "underwriters" within the
meaning of section 2(11) of the Securities Act, with respect to the selling
stockholder shares offered and any profits realized or commissions received may
be deemed to be underwriting compensation. Any broker-dealers that participate
in the distribution of the selling stockholder shares also may be deemed to be
"underwriters," as defined in the Securities Act, and any commissions,
discounts, concessions or other payments
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<PAGE>
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 their securities, nor is there an underwriter or coordinating broker
acting in connection with the proposed sale of selling stockholder shares by the
selling stockholders.
Under the securities laws of certain states, the selling stockholder
shares may be sold in such states only through registered or licensed brokers or
dealers. In addition, in certain states the selling stockholder shares may not
be sold unless the selling stockholder shares have been registered or qualified
for sale in such state or an exemption from registration or qualification is
available and is complied with.
Registration of the selling stockholder shares is being made pursuant
to the individual securities purchase agreements between us and each of the
selling stockholders. Pursuant to the terms of such agreements, 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 any of the selling stockholders
will sell any or all of the selling stockholder shares offered by them
hereunder.
The sale of the selling stockholder shares is subject to the prospectus
delivery and other requirements of the Securities Act. To the extent required,
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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<PAGE>
distribution. In addition, and without limiting the foregoing, the selling
stockholders will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including without limitation, Regulation
M, in connection with transactions in the shares, which provisions may limit the
timing of purchases and sales of selling stockholder shares by the selling
stockholders.
Selling stockholders also may resell all or a portion of the selling
stockholder shares in open market transactions in reliance upon Section 4(1) of
the Securities Act or Rule 144 promulgated thereunder, provided they meet the
criteria and conform to the requirements of such rules.
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.
-25-
<PAGE>
EXPERTS
The consolidated financial statements and schedule of AgriBioTech, Inc.
as of June 30, 1998 and 1997 and for each of the years in the three-year period
ended June 30, 1998 are incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The financial statements of Beachley Hardy Seed Company as of December
31, 1995 and 1994 and for the years then ended have been incorporated by
reference herein in reliance upon the report of KPMG LLP, independent certified
public accountants, incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
The combined financial statements of Germain's Inc. and W-L Research,
Inc. as of September 30, 1995 and 1994 and for the years then ended have been
incorporated by reference herein in reliance upon the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein and
upon the authority of said firm as experts in accounting and auditing.
The combined financial statements of Seed Corporation of America, Inc.
and Green Seed Company Limited Partnership as of December 31, 1997 and 1996 and
for the years then ended have been incorporated by reference herein in reliance
upon the report of KPMG 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 Allied Seed Company, Inc. (a division of
Agway, Inc.) as of June 30, 1998 and 1997 and for the years then ended are
incorporated by reference in reliance on the report of KPMG 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 Oseco Inc. as of June 30, 1998 and for the
year then ended are incorporated by reference in reliance on the report of KPMG
LLP Chartered Accountants incorporated by reference herein and upon the
authority of said firm as experts in accounting and auditing.
-26-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
- ------- -------------------------------------------
The expenses in connection with the issuance and distribution of the
securities being registered shall be borne by the Registrant and are estimated
as follows:
<TABLE>
<S> <C>
SEC Filing Fee $ 4,197.14
Printing and Engraving Expenses .............. 1,000.00
Legal Fees and Expenses....................... 20,000.00
Accounting Fees and Expenses.................. 10,000.00
Miscellaneous................................. 4,802.86
------------
Total:............................ $ 40,000.00
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ------- -----------------------------------------
Except to the extent hereinafter set forth, there is no statute, charter
provision, by-law, contract or other arrangement under which any controlling
person, director or officer of the Registrant is insured or indemnified in any
manner against liability which he may incur in his capacity as such.
The Company maintains insurance protecting its directors and officers
against any liability asserted against or incurred by them in such capacity or
arising out of their status as such.
Article Ninth of the Registrant's Certificate of Incorporation provides for
the indemnification of directors and officers to the fullest extent allowed by
the Nevada General Corporation Law ("GCL"), which provides in relevant part as
follows:
Section 78.751:
Advancement of Expenses
1. Any discretionary indemnification under section 5 of this act, unless
ordered by a court or advanced pursuant to subsection 5, may be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
II-1
<PAGE>
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to the
action, suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.
2. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in or
ordered by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to section 5 of this act or
for the advancement of expenses made pursuant to subsection 2, may not be made
to or on behalf of any director or officer if a final adjudication establishes
that his acts or omissions involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
Indemnification of Officers, Directors, Employees and Agents.
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the
II-2
<PAGE>
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with the action, suit or proceeding if he acted in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, he must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense.
Section 78.752:
Insurance and Other Financial Arrangement Against Liability of Directors,
Officers, Employees and Agents.
1. A corporation may purchase and maintain insurance or make other
financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee
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<PAGE>
or agent of another corporation, partnership, joint venture, trust or other
enterprise for any liability asserted against him and liability and expenses
incurred by him in his capacity as a director, officer, employee or agent, or
arising out of his status as such, whether or not the corporation has the
authority to indemnify him against such liability and expenses.
2. The other financial arrangements made by the corporation pursuant to
subsection 1 may include the following:
(a) The creation of a trust fund.
(b) The establishment of a program of self-insurance.
(c) The securing of its obligation of indemnification by granting a
security interest or other lien on any assets of the corporation.
(d) The establishment of a letter of credit, guaranty or surety.
No financial arrangement made pursuant to this subsection may provide protection
for a person adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable for intentional misconduct, fraud or a
knowing violation of law, except with respect to the advancement of expenses or
indemnification ordered by a court.
3. Any insurance or other financial arrangement made on behalf of a
person pursuant to this section may be provided by the corporation or any other
person approved by the board of directors, even if all or part of the other
person's stock or other securities is owned by the corporation.
4. In the absence of fraud:
(a) The decision of the board of directors as to the propriety of the
terms and conditions of any insurance or other financial arrangement made
pursuant to this section and the choice of the person to provide the insurance
or other financial arrangement is conclusive; and
(b) The insurance or other financial arrangement:
(1) Is not void or voidable; and
(2) Does not subject any director approving it to personal liability
for his action,
even if a director approving the insurance or other financial arrangement is a
beneficiary of the insurance or other financial arrangement.
II-4
<PAGE>
5. A corporation or its subsidiary which provides self-insurance for
itself or for another affiliated corporation pursuant to this section is not
subject to the provisions of Title 57 of the Nevada Revised Statutes.
Article VI of the Registrant's Bylaws provides as follows:
INDEMNIFICATION
---------------
On the terms, to the extent, and subject to the condition prescribed by
statute and by such rules and regulations, not inconsistent with statute, as the
Board of Directors may in its discretion impose in general or particular cases
or classes of cases, (a) the Corporation shall indemnify any person made, or
threatened to be made, a party to an action or proceeding, civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise which any director or officer of the
Corporation served in any capacity at the request of the Corporation, by reason
of the fact that he, his testator or intestate, was a director or officer of the
Corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees, actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, and (b) the Corporation may pay, in advance
of final disposition of any such action or proceeding, expenses incurred by such
person in defending such action or proceeding.
On the terms, to the extent, and subject to the conditions prescribed by
statute and by such rules and regulations, not inconsistent with statute, as the
Board of Directors may in its discretion impose in general or particular cases
or classes of cases, (a) the Corporation shall indemnify any person made a party
to an action by or in the right of the Corporation to procure a judgment in its
favor, by reason of the fact that he, his testator or intestate, is or was a
director or officer of the Corporation, against the reasonable expenses,
including attorneys' fees, actually and necessarily incurred by him in
connection with the defense of such action, or in connection with an appeal
therein, and (b) the Corporation may pay, in advance of final disposition of any
such action, expenses incurred by such person in defending such action or
proceeding.
ITEM 16. EXHIBITS LIST AND REPORTS ON FORM 8-K
- ------- -------------------------------------
EXHIBIT NO. DESCRIPTION
- ----------- -----------
* 5.1 Securities opinion of Snow Becker Krauss P.C.
* 23.1 Consent of KPMG LLP
* 23.2 Consent of Cannon & Company
II-5
<PAGE>
* 23.3 Consent of Amper, Politziner & Mattia, P.A.
* 23.4 Consent of KPMG LLP, Chartered Accountants
* 23.5 Consent of Snow Becker Krauss P.C. is included in Exhibit 5.1 to this
Registration Statement.
* 24.1 Power of Attorney (on signature page)
____________________
* Filed with this Registration Statement.
ITEM 17. UNDERTAKINGS
- ------- ------------
The Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus file with Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
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<PAGE>
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed a new registration statement
relating to the securities offered therein, and the offering of such securities
at the that time shall be deemed the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
this offering.
(4) For the purpose of determining any liability under the Securities
Act, each filing of registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the issuer pursuant to the foregoing provisions, or otherwise, the issuer has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the issuer of expenses
incurred or paid by a director, officer or controlling person of the issuer in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the issuer will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(6) For determining any liability under the Securities Act, to treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the issuer under Rule 424(b)(1), or (4) or 497(h) under the
Act as part of this registration statement as of the time the Commission
declared it effective.
(7) For determining any liability under the Act, to treat each post-
effective amendment that contains a form of prospectus as a new registration
statement for the securities offered in the registration statement, and that
offering of the securities at that time as the initial bona fide offering of
those securities.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Henderson, State of Nevada, on January 28, 1999.
AGRIBIOTECH, INC.
By: /s/ Johnny R. Thomas
---------------------------
Johnny R. Thomas
Chairman of the Board
POWER OF ATTORNEY
Each of the undersigned hereby authorizes Johnny R. Thomas as his attorney-
in-fact to execute in the name of each such person and to file such amendments
(including post-effective amendments) to this registration statement as the
Registrant deems appropriate and appoints such person as attorney-in-fact to
sign on his behalf individually and in each capacity stated below and to file
all amendments, exhibits, supplements and post-effective amendments to this
registration statement.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Johnny R. Thomas Chairman of the Board (Principal January 28, 1999
- -------------------------- Executive Officer) and Director
Johnny R. Thomas
/s/ Kent Schulze President and Director January 28, 1999
- --------------------------
Kent Schulze
/s/ Randy Ingram Vice President (Principal January 28, 1999
- -------------------------- Financial and Accounting Officer)
Randy Ingram
/s/ Scott J. Loomis Vice President and Director January 28, 1999
- --------------------------
Scott J. Loomis
/s/ John C. Francis Vice President, Secretary and Director January 28, 1999
- --------------------------
John C. Francis
/s/ James W. Hopkins Director January 28, 1999
- --------------------------
James W. Hopkins
/s/ Richard P. Budd Director January 28, 1999
- --------------------------
Richard P. Budd
</TABLE>
II-8
<PAGE>
Exhibit 5.1
Snow Becker Krauss P.C.
605 Third Avenue
New York, NY 10158
January 28, 1999
AgriBioTech, Inc.
120 Corporate Park Drive
Henderson, Nevada 89014
Re: Registration Statement on Form S-3 Relating to 1,052,150 Shares of
Common Stock, Par Value $.001 Per Share, of AgriBioTech, Inc.
-------------------------------------------------------------
Gentlemen:
We are acting as counsel to AgriBioTech, Inc., a Nevada corporation (the
"Company"), in connection with the filing by the Company with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), of a registration statement on Form S-3 (the "Registration
Statement") relating to 1,052,150 shares of Common Stock (the "Shares"), $.001
par value per share, of the Company for sale by the Selling Stockholders.
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of the Company's Certificate of
Incorporation and amendments thereto and the Company's Amended and Restated By-
Laws, as each is currently in effect, the Registration Statement, and the
proposed registration and issuance of the Shares and such other corporate
documents and records and other certificates, and we have made such
investigations of law as we have deemed necessary or appropriate in order to
render the opinions hereinafter set forth.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions expressed herein which were not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company has been duly organized, is validly existing, and in good
standing under the laws of the State of Nevada.
<PAGE>
2. The Shares have been duly authorized, and upon exercise of the
Warrants, the Shares, when issued, delivered and paid for, will be legally
issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference in the Registration Statement to
this firm under the heading "Interests of Named Experts and Counsel." In giving
this consent, we do not hereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act, or the rules
and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Snow Becker Krauss P.C.
---------------------------
SNOW BECKER KRAUSS P.C.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We consent to the use of our reports related to the consolidated financial
statements and schedule of AgriBioTech, Inc., the financial statements of
Beachley Hardy Seed Company, the combined financial statements of Germain's Inc.
and W-L Research, Inc., combined financial statements of Seed Corporation of
America, Inc. and Green Seed Company Limited Partnership and the financial
statements of Allied Seed Company, Inc. incorporated by references herein and to
the reference to our firm under the heading "Experts" in the Prospectus.
KPMG LLP
Albuquerque, New Mexico
January 28, 1999
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We hereby consent to the use of our reports related to the financial
statements of Lofts Seed, Inc and Budd seed, Inc. and to the reference to our
firm under the heading "Experts" in the Prospectus.
CANNON & COMPANY
Winston-Salem, North Carolina
January 28, 1999
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We consent to the incorporation of our report dated September 26, 1996 on
the financial statements of Lofts Seed, Inc. as of June 30, 1996 and 1995 and
for years ended June 30, 1996 and 1995, which is included in this Registration
Statement of AgriBioTech, Inc. and to the reference to our firm under the
heading "Experts" in the Prospectus.
AMPER, POLITZINER & MATTIA, P.A.
Edison, New Jersey
January 28, 1999
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.:
We consent to the use of our report dated September 4, 1998, with respect to the
consolidated balance sheet of Oseco Inc. as of June 30, 1998 and the related
consolidated statements of income and retained earnings and changes in cash
resources for the year then ended, incorporated by reference herein and to the
reference to our firm under the heading "Experts" in the Prospectus.
KPMG LLP
Chartered Accountants
Mississauga, Canada
January 28, 1999
