Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-61097
SUPPLEMENT TO AGRIBIOTECH, INC.
PROSPECTUS DATED AUGUST 14, 1998
AS PREVIOUSLY SUPPLEMENTED ON
SEPTEMBER 4, 1998, DECEMBER 29, 1998, JANUARY 22, 1999 AND FEBRUARY 5, 1999
___________________________________
The offering:
Shares of common stock offered...... 1,070,000 shares issued to Thomas K.
Hodges and Halina K. Hodges (800,000
shares), Bill L. Rose, L.L.C. (200,000
shares) and Kimeragen, Inc. (70,000 shares)
as additional consideration in connection
with ABT's acquisition of HybriGene, LLC
from the Hodges and Rose and ABT's
license of technology from and investment
in Kimeragen, Inc.
Price of common stock............... On June 29, 1999, the closing sale price of
ABT common stock on the Nasdaq National
Market was $6 3/8 per share.
Nasdaq National Market Symbol....... ABTX
___________________________________
The shares offered hereby involve a high degree of risk. See "Risk Factors"
beginning on page 4.
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.
___________________________________
June 29, 1999
<PAGE>
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is part of a registration statement on Form S-4
we filed with the SEC on August 14, 1998. The prospectus that we filed included
a general description of the securities that we may offer at any time for two
years from that date. This supplement contains information included in the
August 14, 1998 prospectus and updated information and specific information
about the securities being offered under this prospectus supplement.
This prospectus supplement relates to 1,070,000 shares of our common stock
that we are issuing to Thomas K. Hodges, Halina K. Hodges, Bill L. Rose, L.L.C.,
and Kimeragen, Inc. as additional consideration in connection with ABT's
acquisition of HybriGene, LLC from the Hodges and Rose and ABT's license of
technology from and investment in Kimeragen, Inc. The shares of common stock are
referred to in this prospectus supplement as the "shares" and were registered as
an original equity issuances as part of this registration statement.
To fully understand this offering, you should read this prospectus
supplement and the additional information described under the heading "Where You
Can Find More Information."
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUMMARY.............................................. -3-
RISK FACTORS.................................................... -4-
WHERE YOU CAN FIND MORE INFORMATION............................. -11-
USE OF PROCEEDS................................................. -12-
DIVIDEND POLICY................................................. -13-
PRICE RANGE OF COMMON STOCK..................................... -13-
RECENT DEVELOPMENTS............................................. -14-
DESCRIPTION OF CAPITAL STOCK.................................... -15-
PLAN OF DISTRIBUTION............................................ -16-
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES............................. -16-
LEGAL MATTERS................................................... -16-
EXPERTS......................................................... -17-
</TABLE>
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<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus
supplement 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. Unless otherwise stated, all references to fiscal
years are to a June 30 year end.
THE COMPANY
ABT is the largest agricultural seed company in the United States that
specializes in developing, processing, packaging and distributing varieties of
forage crops, in which the entire plant is harvested for livestock consumption,
and cool-season turfgrass seeds, seed used in home-lawns, golf courses, parks,
cemeteries and roadway medians. Since January 1, 1995, we have completed 34
acquisitions and, including net sales from the businesses we have acquired, we
have grown from net sales of $29,000 in fiscal 1994 to pro forma net sales of
approximately $409 million for fiscal 1998. We own all elements of our forage
and turfgrass seed operations including traditional genetic breeding, by
breeding varieties with desirable traits together to form a new variety, and
research and development programs, seed processing plants that clean, condition
and package seed grown under contract for us, and national and international
sales and distribution networks. This means that we are a vertically integrated
business. ABT's headquarters are located at 120 Corporate Park Drive, Henderson,
NV 89014; telephone (702) 566-2440.
THE OFFERING
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 15% 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 January 22, 1999, ABT completed the acquisition of 100% of the issued
and outstanding share capital of HybriGene, LLC, an Indiana limited liability
company, from Thomas K. Hodges, Halina K. Hodges, individuals, and Bill L. Rose,
L.L.C., an Oregon limited liability company, under a stock purchase agreement
dated January 22, 1999. HybriGene, LLC has been engaged in research and
development concerning the use of genetic technology in the farming industry.
The aggregate purchase price was $11.5 million, paid as follows: Thomas and
Halina Hodges - $9.5 million in the form of 515,000 shares of ABT's common
stock; Bill L. Rose, L.L.C. - $100,000 in cash and $1.9 million in the form of
103,012 shares of ABT's common stock.
The issuances of the shares of common stock were registered as described in
the prospectus supplements dated December 29, 1998 and February 5, 1999 and may
be resold subject to the terms of lock-up agreements between the recipients of
ABT common stock and ABT. You will find additional information including
financial information, concerning HybriGene, LLC in our current report on Form
8-K dated January 22, 1999, and filed on February 5, 1999, which is incorporated
by reference into this prospectus supplement.
In each of the above transactions, ABT guaranteed the recipients of ABT
common stock that the amount they would receive upon sale of the ABT shares
would equal the agreed-upon value of those shares, provided the shares were sold
in accordance with the terms of the lock-up agreements. In addition, ABT is to
receive any proceeds that exceed the agreed-upon value of the shares. ABT may
satisfy obligations with respect to the guarantees by issuing additional shares
of ABT common stock or by making cash payments, at ABT's option. Due to declines
in the price of ABT's common stock since these arrangements were agreed to,
proceeds of sales of shares have not been sufficient to satisfy the guarantees.
The recipients agreed to suspend sales of ABT common stock from April 1, 1999
through June 30, 1999 and ABT agreed to make cash payments aggregating $2.8
million to certain of these recipients. These payments have been made and
credited against the guaranteed proceeds. In addition, ABT granted certain of
these recipients options to buy an aggregate of 95,000 shares of ABT common
stock at $5.00 per share, which equaled the market price at the time of grant.
ABT has now agreed with these recipients to issue an additional 1,070,000
shares of ABT common stock to them, the proceeds from the sale of which will be
credited against the guaranteed proceeds. If the shares remaining from the
original issuance and the additional shares are sold realizing average net
proceeds of $6.50 per share, the total received by these recipients will satisfy
all amounts due under the guarantees. If the net proceeds realized from the sale
of the shares averages less than $6.50, ABT has the option of paying cash or
issuing additional shares of common stock to satisfy the shortfall, in certain
circumstances.
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<PAGE>
RISK FACTORS
Before you invest in our securities, 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 all inclusive.
Potential Material Adverse Effects If We Are Unable to Manage Recent Rapid
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Growth from Net Sales of $26 Million in Fiscal 1996 to Pro Forma Net Sales
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of $409 Million for Fiscal 1998.
-------------------------------
We have acquired all or part of 34 businesses in the forage and turfgrass
seed sector since January 1, 1995. 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. We recently reorganized our senior
management. The founders of ABT are no longer members of senior management. We
have a new Chief Executive Officer, a new President/Chief Operating Officer, two
Executive Vice-Presidents and a Senior Vice-President, who have overall
responsibility for managing ABT. These changes were put into effect in February
through June 1999. Therefore, we cannot assure you that our new management will
be able to successfully manage our growth. 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 March 31,
1999 Form 10-Q (collectively, the "MD&A"), and "Description of Business -
Acquisition Program" in the 1998 Form 10-K.
Possible Failure to Effectively and Profitably Integrate Our 34
---------------------------------------------------------------
Acquisitions May Result in Continued Losses.
-------------------------------------------
Our future success depends upon our ability to combine or integrate the
operations of the businesses we have acquired into a vertically integrated
company which represents all aspects of the forage and turfgrass seed
production, research and distribution process. If we cannot successfully
integrate all of the businesses we have acquired, our business, financial
condition and/or operating results may be materially adversely affected and we
would not expect to operate profitably. To successfully integrate the acquired
businesses, we must realize cost efficiencies without losing sales and margins.
As part of the process of integrating the businesses acquired, we initially
announced that we expected to record a one-time 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. In addition, we have recorded a significant amount of
goodwill relating to our acquisitions. Although we believe that goodwill is
recoverable from future operations in our current operating structure, as part
of our restructuring, it is possible that some portion of goodwill will become
impaired and written-down as a non-cash expenditure. Despite these significant
changes, we need to maintain product lines, brands and facilities in order to
keep our customers satisfied. In addition, ABT's integration efforts are being
carried out by a new management team who were hired because of their operating
backgrounds, but have not worked together for very long. See "MD&A" and
"Description of Business - Acquisition Program" in the 1998 Form 10-K.
No Assurance of ABT's Ability to Continue to Grow Since We Relied on
--------------------------------------------------------------------
Acquisitions to Grow and Do Not Intend to Make Many Acquisitions in the
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Future
------
We have experienced significant growth in net sales, from approximately $26
million in fiscal 1996 to $66 million in fiscal 1997, $205 million in fiscal
1998 and pro forma net sales of approximately $409 million for fiscal 1998,
reflecting the sale of the fertilizer division of Willamette Seed Company. While
we have achieved this growth through acquisitions, we do not intend to make many
acquisitions in the future and may sell individual or groups of assets as part
of our integration plans. Our future growth depends upon our ability to
integrate our operations, and to increase sales from existing operations. We may
not be successful in expanding existing operations because we operate in a
highly competitive industry, which is highly cyclical due to weather and
consumer demand and is subject to numerous other risks described, in this
prospectus supplement.
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<PAGE>
Potential Undiscovered Liabilities Associated with ABT's 34 Acquisitions.
------------------------------------------------------------------------
The businesses that we have acquired may have existing liabilities that we
may have been unable to discover during our pre-acquisition investigation. If
liabilities are discovered, 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 these liabilities due to their limited scope, amount or
duration, the limited finances of the sellers, or for other reasons.
Possible Inability of ABT to Develop New Genetically Superior
-------------------------------------------------------------
Products.
--------
We are developing new, genetically superior forage and turfgrass varieties
that 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 for Genetically Superior
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Varieties May Adversely Affect Profitability
--------------------------------------------
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
these products. Even if a market for these products develops, there can be no
assurance that we will recover 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.
Dependence on Rights for Forage and Turfgrass Varieties
-------------------------------------------------------
We own the rights to a number of forage and turfgrass varieties that are
protected under the Plant Variety Protection Act and are seeking to acquire
and/or develop other protected varieties. These rights may be challenged,
invalidated or circumvented. In addition, others could claim that products that
we develop violate their rights. We may incur substantial costs in asserting our
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 Obtain Third Parties' Biotechnology May Adversely
----------------------------------------------------------------------
Affect Profit Margins
---------------------
Breakthroughs in biotechnology have led to the introduction of new,
improved and 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 obtain those biotechnology breakthroughs 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, products from these 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.
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<PAGE>
Possible Inability to be Competitive Against Large Agricultural Seed
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Companies, Who May Decide to Compete Against ABT, as Well as Numerous
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Large Regional Seed Companies and Numerous Small Family Seed Businesses.
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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, including Pioneer Hi-Bred International,
DEKALB Genetics Corporation, Novartis AG and Mycogen Corporation, cotton seed,
including Delta and Pine Land Company and other grain crops. In the past, these
companies have treated forage and turfgrass seeds as secondary 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, which is owned by Central Garden
and Pet Company, 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 these 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.
Lack of Historical Profitability; Accumulated Deficit of Approximately $24
--------------------------------------------------------------------------
Million as of March 31, 1999.
--------------------------------
Over the life of ABT, 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 $24,249,486 through March 31, 1999 which includes a net
loss of $12,211,646 for the nine-month period ended March 31, 1999.
Possible Inability to Fund Debt Service Costs of Approximately $12 Million
--------------------------------------------------------------------------
Per Year on Substantial Indebtedness of Approximately $87 Million;
------------------------------------------------------------------
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 with financial
institutions under which we may incur up to $110 ($100 million after June 30,
1999) million of indebtedness subject to a borrowing base computation and
compliance with financial covenants. As of June 29, 1999, we had borrowed
approximately $70 million under the revolving credit facility and approximately
$5 million was available to be borrowed. In addition, we have outstanding
approximately $17 million of other long-term obligations. The annual debt
service requirements, including scheduled debt repayments and interest, on this
debt total approximately $12 million. It is possible we may not have sufficient
funds in the future to meet our obligations under the revolving credit facility
and other indebtedness.
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<PAGE>
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 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 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."
Risk of Foreclosure Due to Possible Violations of Restrictions Imposed on
-------------------------------------------------------------------------
ABT by Terms of Bank Indebtedness.
---------------------------------
Our revolving credit facility with our lenders contains restrictions that
limit us in many ways. A breach of any of these covenants could constitute an
event of default under this agreement. These restrictions may significantly
limit or prohibit us from incurring indebtedness, making prepayments of
indebtedness, paying dividends, making investments or acquisitions, engaging in
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 various
financial condition tests. If there were an event of default under this
agreement, 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 bank could proceed to foreclose their security interest in the
collateral securing the indebtedness. See "MD&A."
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<PAGE>
Current Need for Additional Capital.
-----------------------------------
Our capital requirements have been and are expected to remain significant.
We will need additional capital to fund operations until we achieve and sustain
profitability. If we are unable to obtain additional capital, we will be unable
to continue to grow. Our capital requirements depend on many factors. These
factors include the timing and cost of future acquisitions, if any, the time and
cost involved in integrating our acquired companies, and our success at
expanding existing operations. We believe that we have funds available under the
revolving credit facility to substantially fund operations through September 30,
1999. However, we may need to seek an increase in or an alternative to the
revolving credit facility to finance increased operating or integration needs,
or cutback operations resulting from, among other things, unexpected changes in
seasonality or weather patterns, or if our integration plans are more costly
than anticipated. See "MD&A."
Dependence on Key Personnel.
---------------------------
Our success depends in large part on the efforts, abilities and expertise
of our executive officers. The founders of ABT are no longer members of senior
management and the new management structure consisting of a Chief Executive
Officer, a President/Chief Operating Officer, two Executive Vice-Presidents, and
a Senior Vice-President is completely responsible for implementing the Company's
integration efforts and restructuring. The loss of any of the Company's key
personnel could have a material adverse effect on the Company's business,
financial condition and results of operations. Along with our integration
efforts, we are hiring qualified marketing, financial, management information
system, and other technical personnel, upon whom our prospects depend.
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.
Operating Results May Fluctuate 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.
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<PAGE>
Costs of Complying with Department of Agriculture, Food and Drug
----------------------------------------------------------------
Administration, Environmental Protection Agency and Various State
-----------------------------------------------------------------
Government Regulations.
----------------------
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 passed, 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 passed 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.
Adverse Effect of Potential Future Sales of Common Stock.
--------------------------------------------------------
As of June 29, 1999, we had 46,417,661 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
these sales, may have a depressive effect on the price of our common stock in
the public trading market. Any 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 under Rule 144, have
been registered for resale under the Securities Act. We also have approximately
9.1 million shares of common stock available for issuance without restriction
upon exercise of outstanding options and 3.2 million 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.
Holders of restricted securities must satisfy the prospectus delivery and
other requirements of the Securities Act prior to making any sales of the
shares, unless the sales are made in accordance with the provisions of Rule 144.
Under Rule 144, if we are in compliance with various 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.
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<PAGE>
Public Market Risks; Volatility of ABT Securities Prices.
--------------------------------------------------------
The market price for our securities has been and may continue to be very
volatile. Factors such as our financial results, financing efforts, changes in
earnings estimates by analysts, litigation, 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.
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,
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 we have
contracted for software, hardware and consulting services to implement an
enterprise resource planning system that will cover approximately 90% of our
revenue base. The remaining 10% will continue on an existing system that is Year
2000 compliant. The enterprise resource planning system and related network and
hardware systems are Year 2000 compliant. All non-compliant desktop and network
systems will be converted either through normal attrition or through the
enterprise resource planning system implementation. We expect the cost of this
implementation to be approximately $7.5 million, including internal costs for
personnel, training, supplies, travel and equipment, implementation of
additional modules of the enterprise resource planning system and costs
associated with design changes required to accommodate changes in our operating
structure. 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
enterprise resource planning 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.
An in-depth survey of all vendors and major customers regarding their Year 2000
compliance is in process. To date, we have Year 2000 readiness certificates on
file for 80% of our major customers and 85% of our major vendors. This process
is expected to be completed by July 31, 1999. A statement of Year 2000
compliance has been received from all critical vendors, including the long
distance and wireless service provider and local exchange carriers. The
responses received have not indicated any instances of noncompliance with Year
2000 that would cause significant problems to ABT.
If we cannot complete the enterprise resource planning 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."
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<PAGE>
Forward Looking Statements.
--------------------------
You should also be aware that this prospectus supplement 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 supplement 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. The risks and uncertainties that could cause or contribute to a
different result or outcome include without limitation, total acres of turfgrass
and forage planted, customer purchases, deliveries and payments for ABT
products, competitive pricing, weather, effective management of the integration
process and cost reductions at ABT, ability of ABT to successfully transition to
the new information systems throughout its operations, customer response to the
integration, overall financial condition and asset status of ABT, relationships
with and perceptions of potential lenders and investors, ability to obtain
capital, litigation and other factors as detailed from time to time in ABT's SEC
filings. You should carefully consider the risk factors described above together
with all of the other information included or incorporated by reference in this
prospectus supplement before you decide to purchase shares of our common stock.
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.
This prospectus supplement is part of a registration statement on Form S-4
that we have filed with the SEC. The SEC allows us to "incorporate by reference"
information that we file with them. This means that we can disclose important
information to you by referring you to other documents that we have filed with
the SEC. The information that is incorporated by reference is considered part of
this prospectus supplement, 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.
. Our 1998 Form 10-K for the fiscal year ended June 30, 1998, amended on
January 29, 1999
. Our Quarterly Reports as follows:
- Form 10-QSB for March 31, 1996, amended on July 12, 1996
- Form 10-Q for September 30, 1998
- Form 10-Q for December 31, 1998
- Form 10-Q for March 31, 1999
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<PAGE>
. Our Current Reports on Form 8-K that we filed since July 1, 1998:
- Dated October 30, 1996 and filed on November 12, 1996, and
amended on January 13, 1997, February 17, 1998 and 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 on September 11, 1998, and
amended on November 12, 1998 and January 29, 1999
- Amendment filed August 27, 1998 to report dated August 22, 1997
and filed on September 8, 1997
- Dated January 6, 1998 and filed on January 16, 1998, and amended
on March 10, 1998, March 30, 1998, August 11, 1998 and March 23,
1999
- Dated January 9, 1998 and filed on January 20, 1998, and amended
on March 10, 1998, March 30, 1998 and August 11, 1998
- Dated January 26, 1998 and filed on March 10, 1998, and amended
on March 30, 1998, August 11, 1998 and September 4, 1998
- Amendment filed on August 28, 1998 to report dated October 22,
1997 and filed on November 6, 1997
- Dated June 30, 1998 and filed on October 26, 1998
- Dated December 30, 1998 and filed on January 11, 1999
- Dated January 22, 1999 and filed on January 27, 1999
- Dated January 22, 1999 and filed on February 5, 1999
- Dated May 28, 1999 and filed on June 1, 1999
- Dated June 7, 1999 and filed on June 9, 1999
. 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
. Our Proxy Statement dated January 11, 1999 as amended on February 8,
1999, for our Annual Meeting held on February 22, 1999 and
. 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 supplement 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 supplement by writing or telephoning us at the following
address: AgriBioTech, Inc., Attention: Chief Financial Officer, 120 Corporate
Park Drive, Henderson, NV 89014; telephone number (702) 566-2440. We will
provide copies of all documents requested (not including the exhibits to those
documents, unless the exhibits are specifically incorporated by reference into
those documents or this prospectus supplement) without charge.
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 supplement. You
should not rely on any information or representations in connection with sales
by selling stockholders other than the information or representations in this
prospectus supplement. The information in this prospectus supplement is correct
as of the date of this prospectus supplement. You should not assume that there
has been no change in the affairs of ABT since the date of this prospectus
supplement or that the information contained in this prospectus supplement is
correct as of any time after its date. This prospectus supplement 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.
USE OF PROCEEDS
This prospectus supplement relates to additional shares issued to Thomas K.
Hodges, Halina K. Hodges and Bill L. Rose, L.L.C. in connection with our
acquisition of HybriGene, LLC and to Kimeragen, Inc. in connection with ABT's
license of technology from and investment in Kimeragen, Inc. We will not receive
any additional cash consideration from the issuance of these shares.
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<PAGE>
DIVIDEND POLICY
We have never declared or paid any dividends on our common stock. We
currently intend to retain any earnings for use in the operation and expansion
of our business and do not anticipate paying any dividends on the common stock
for the foreseeable future. Our revolving credit facility prohibits the payment
of cash dividends without the lenders' approval.
PRICE RANGE OF COMMON STOCK
Our common stock has traded on the Nasdaq National Market since February
14, 1997, under the symbol "ABTX."
The following table sets forth the high and low closing prices for the
common stock for each quarter in Fiscal 1997 and Fiscal 1998, on the Nasdaq
SmallCap Market until February 13, 1997 and on the Nasdaq National Market
thereafter.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
FISCAL 1997
July 1, 1996-September 30, 1996........ $ 4 1/16 $ 2 5/32
October 1, 1996-December 31, 1996...... $ 2 3/16 $ 2 1/32
January 1, 1997-March 31, 1997......... $ 3 3/8 $ 2 1/16
April 1, 1997-June 30, 1997............ $ 6 15/16 $ 2 15/32
FISCAL 1998
July 1, 1997-September 30, 1997........ $10 1/2 $ 6 1/32
October 1, 1997-December 31, 1997...... $17 1/16 $ 9
January 1, 1998-March 31, 1998......... $19 3/32 $13 7/16
April 1, 1998-June 30, 1998............ $29 $13 3/4
FISCAL 1999
July 1, 1998-September 30, 1998........ $25 3/4 $ 8 1/8
October 1, 1998-December 31, 1998...... $17 13/16 $ 8 15/16
January 1, 1999-March 31, 1999......... $16 11/16 $ 3 3/4
April 1, 1999-June 29, 1999............ $ 7 29/32 $ 5 1/8
</TABLE>
As of June 29, 1999, the Company had 506 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.
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<PAGE>
RECENT DEVELOPMENTS
MANAGEMENT
ABT determined that since it had achieved a leadership position in the
forage and turfgrass seed sector, it was appropriate to change the makeup of its
Board of Directors to reflect the need to shift to a focus on integration and
operations. John C. Francis and Scott J. Loomis, members of the founder
management team, resigned as vice presidents of the Company and from the Board
of Directors effective February 1, 1999. The Board of Directors elected Randy
Ingram and Thomas B. Rice, officers of ABT, as directors and both were
re-elected directors at the February 22, 1999 annual meeting. In addition, Dr.
Johnny R. Thomas, a member of the founding management team and former Chairman
and CEO, resigned as a member of the Board and as an executive officer of ABT,
effective February 26, 1999. On March 24, 1999, ABT announced that Kent Schulze
resigned as a member of the Board and as an executive officer.
On March 16, 1999, James W. Johnston joined ABT's Board of Directors as an
outside director. Mr. Johnston, age 52, is President and Chief Executive Officer
of Stonemaker Enterprises, Inc., a consulting and investment company. He
previously served as Vice Chairman of RJR Nabisco, Inc., a holding company, from
1995 to 1996. From 1989 to 1996, he also served as Chairman of R.J. Reynolds
Tobacco Co., and was Chief Executive Officer of that company until 1995. Mr.
Johnston was named a Director of RJR Nabisco Holdings Corp. in 1992 and Chairman
of R.J. Reynolds Tobacco International Inc. in 1993. He retired from R.J.
Reynolds in July 1996. Mr. Johnston began his business career with Ford Motor
Co. In addition to Ford, he has held senior management positions at various
subsidiaries of Northwest Industries, Inc. and Citibank N.A. Mr. Johnston serves
on various boards, including the Sealy Corporation and various non-profit
organizations.
On June 15, 1999, Mr. L. Glenn Orr, Jr. joined ABT's Board of Directors as
an outside director. Mr. Orr, age 59, is currently Chairman, President & CEO of
Orr Management Company, an investment banking firm located in Winston-Salem, NC.
Earlier in his career, Mr. Orr spent 30 years in the banking industry in the
southeast U.S. He is Chairman Emeritus of BB&T Corporation formerly (Southern
National Corporation), and formerly served BB&T Corporation as Chairman, CEO and
President. Mr. Orr was instrumental in successfully completing the merger of
equals between Southern National Corporation and BB&T. Mr. Orr serves on the
Board of Directors of seven companies, including three other publicly traded
companies, as well as serves on numerous non-profit boards, including service as
a Trustee of Wake Forest University and as a member of the North Carolina
Economic Development Commission.
ABT is continuing its search for additional outside directors to add to the
Board.
ABT recently put into place a new senior management structure to lead the
post-integration ABT. This change is appropriate since the integration plan has
been developed and implementation is nearing completion. In addition to Richard
Budd, the senior executives are: Kenneth Budd, President and Chief Operating
Officer (COO); Dr. Thomas B. Rice, Executive Vice President, Director of
Research; Randy Ingram, Executive Vice President, Chief Financial Officer; and
Douglas Fisher, Senior Vice President, General Counsel, Secretary and Director
of Business Services.
LEGAL PROCEEDINGS
On June 7, 1999, ABT and Helena Chemical Company announced that the lawsuit
previously brought by Helena against ABT has been voluntarily dismissed without
prejudice. The lawsuit, filed in Federal District Court in Memphis, Tennessee on
January 7, 1999, arose out of the failure to close the planned purchase by ABT
of that portion of Helena's AgriPro agricultural seed operations that included
alfalfa, clover and sorghum.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED
ABT's authorized capital stock consists of 100,000,000 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 100,000,000 shares of our common stock, $.001
par value per share, of which 46,417,661 shares were issued and outstanding as
of June 29, 1999. All of the outstanding shares of our common stock are 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 dividends as they are
declared on common stock by the Board of Directors out of funds legally
available therefor and to share ratably in the 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.
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 series without any further vote or
action by stockholders. At present, we have no plans, proposals, commitments or
arrangements to issue any shares of preferred stock. Our Certificate of
Incorporation authorizes the issuance of preferred stock with 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, we issued 1,703,000 warrants to
purchase shares of our common stock. These warrants were issued along with our
5% convertible debentures to six 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 the holder would then own in excess of 4.9% of ABT
outstanding common stock following the exercise of the warrant.
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<PAGE>
On December 4, 1998, we issued 600,000 warrants to purchase our common
stock to three qualified institutional 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 $25.00 per share for 20
trading days out of any 30 consecutive trading days ending within 15 days of our
mailing notice of the conversion. The shares of common stock issuable upon
exercise of the warrants have been registered for resale under a separate
registration statement.
On August 28, 1998, we issued 886,410 warrants to purchase our common stock
to five 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
supplement, 556,410 of these warrants have been tendered back to us with the
exercise price in exchange for shares of common stock registered as part of our
Universal Shelf Registration Statement (No. 333-61127.) The remaining 330,000
shares of common stock issuable upon exercise of the warrants have been
registered for resale under a separate registration statement.
On May 4, 1998 and May 13, 1998, respectively, we issued 241,600 warrants
and 344,900 redeemable warrants to purchase shares of our common stock. These
warrants were issued to six 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 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.
PLAN OF DISTRIBUTION
All of the shares being offered by this prospectus supplement are being
issued by ABT to Thomas K. Hodges and Halina K. Hodges under a stock purchase
agreement dated January 22, 1999. The shares have been registered on ABT's
Registration Statement on Form S-4 (No. 333-61097) of which this prospectus
supplement forms a part. Pursuant to the terms of the stock purchase agreement,
we will pay all expenses incident to this issuance.
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 shares offered hereby has been passed upon by Snow
Becker Krauss P.C., 605 Third Avenue, New York, New York 10158. Snow Becker
Krauss P.C. owns 43,823 shares of our common stock, and individual members of
the firm own additional shares of common stock.
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<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 & Mattia, independent certified
public accountants, incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
The financial statements of Budd Seed, Inc. as of November 30, 1997 and
December 31, 1996 and 1995 and for the 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 statement of Willamette Seed Co. as of June 30, 1997 and 1996
and for the years then ended have been incorporated by reference herein in
reliance on the report of Price, Koontz & Davies, P.C., independent certified
public accountants, incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
The financial statements of 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.
The financial Statements of HybriGene LLC, as of December 31, 1998 and for
the year then ended are incorporated by reference in reliance on the report of
Huth Thompson LLC incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
The financial statements of SeedBiotics, L.L.C., as of December 31, 1998
and for the year then ended are incorporated by reference in reliance on the
report of Ripley Doorn & Company, P.L.L.C. incorporated by reference herein and
upon the authority of said firm as experts in accounting and auditing.
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