<PAGE>
As filed with the Securities and Exchange Commission on March 30, 1999
Registration No. 333-71477
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
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
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(Address, Including Zip Code, and Telephone Number, Including Area
Code, of Registrant's Principal Executive Offices)
Mr. Randy Ingram, Chief Financial Officer
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. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------
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 3,796,890(2)(3) $8.57(4) $32,539,347 $9,045.94
</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 1,703,000 shares issuable upon conversion of 5% convertible
debentures due December 30, 2001, at $13.68 per share, 390,890 shares
issuable upon payment of interest in shares of Common Stock and 1,703,000
shares issuable upon exercise of common stock purchase warrants at $15.00
per share, all of which have been registered for resale.
(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) 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 28, 1999 on the Nasdaq National Market of $8
9/16 per share.
--------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
_____________
<PAGE>
SUBJECT TO COMPLETION, MARCH 30, 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............ 3,796,890
Offering price....................... On March 29, 1999, the closing sale
price of ABT common stock on the
Nasdaq National Market was $ 5 3/4
per share. The selling stockholders
may offer the shares for sale either
at the market price at the time of
the sale, at a price related to the
market price or at a negotiated
price.
Nasdaq National Market Symbol........ ABTX
---------------------------------------
The shares offered hereby involve a high degree of risk. See "Risk
Factors" beginning on page 5.
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.
----------------------------------------
March 30, 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.................................................... -5-
WHERE YOU CAN FIND MORE INFORMATION............................. -12-
USE OF PROCEEDS................................................. -12-
DIVIDEND POLICY................................................. -13-
PRICE RANGE OF COMMON STOCK..................................... -13-
RECENT DEVELOPMENTS AND WEB SITE DISCLOSURES.................... -13-
SELLING STOCKHOLDERS............................................ -15-
DESCRIPTION OF CAPITAL STOCK.................................... -16-
DESCRIPTION OF CONVERTIBLE DEBENTURES........................... -17-
PLAN OF DISTRIBUTION............................................ -18-
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES............................. -19-
LEGAL MATTERS................................................... -19-
EXPERTS......................................................... -20-
</TABLE>
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<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. 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 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 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 intergrated
business. ABT's headquarters are located at 120 Corporate Park Drive, Henderson,
NV 89014; telephone (702) 566-2440.
-3-
<PAGE>
THE OFFERING
We are registering 3,796,890 shares of our common stock for issuance to and
resale by investors that purchased our 5% convertible debentures and
common stock purchase warrants from us in private transactions that were exempt
from the registration requirements of the Securities Act of 1933. The
convertible debentures give those investors the right to convert their
convertible debentures into 1,703,000 shares of our common stock at $13.68 per
share, subject to adjustment, at any time between the date the debentures were
sold and December 30, 2001. The warrants give those investors the right to
purchase 1,703,000 shares of our common stock at $15.00 per share at any time
for three years from the date they were issued. We have also registered 390,890
shares of common stock issuable upon payment of interest on the convertible
debentures by ABT.
Use of Proceeds
ABT will not receive any proceeds from the sale of the shares by the
selling stockholders. We will receive up to $25,545,000 from the exercise of the
warrants, which we will use to repay indebtedness and/or for working capital
purposes. The conversion of the convertible debentures would increase ABT's
stockholders' equity but not result in any increase in cash to ABT.
-4-
<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 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
--------------------------------------------------------------------------
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 and intend to further expand our business. 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 and an Office of the President with four Co-Presidents. These changes
were put into effect in February 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 December 31, 1998 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
-----------------------------------------------------------------------
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, but not including pending acquisitions. 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.
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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
-----------------------------------------------------------------------
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
-6-
<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 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.
Possible Inability to be Competitive Against Large Agricultural Seed
---------------------------------------------------------------------
Companies Who May Decide to Compete Against ABT as Well as Numerous Large
-------------------------------------------------------------------------
Regional Seed Companies and Numerous Small Family Seed Businesses.
------------------------------------------------------------------
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.
-7-
<PAGE>
Lack of Historical Profitability; Accumulated Deficit of Approximately $22
--------------------------------------------------------------------------
Million as of December 31, 1998.
--------------------------------
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 $21,986,451 through December 31, 1998 which includes
a net loss of $10,281,837 for the quarter ended December 31, 1998.
Possible Inability to Fund Debt Service Costs of Approximately $13 Million
--------------------------------------------------------------------------
Per Year on Substantial Indebtedness of Approximately $135 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 $100 million of indebtedness subject
to a borrowing base computation and compliance with financial covenants. As of
March 24, 1999, we had borrowed approximately $95 million under the revolving
credit facility and approximately $5 million was available to be borrowed. In
addition, we have outstanding $23.3 million of 5% subordinated convertible
debentures and approximately $17 million of other long-term obligations. The
annual debt service requirements, including scheduled debt repayments and
interest, on this debt total approximately $13 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.
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
-8-
<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."
Risk of Foreclosure Due to Possible Violations of Restrictions Imposed on
-------------------------------------------------------------------------
ABT by Terms of Bank Indebtedness and Convertible Debentures.
------------------------------------------------------------
Our revolving credit facility with our leaders and the convertible
debentures which we issued in December 1998 contain restrictions that limit us
in many ways. A breach of any of these covenants could constitute an event of
default under these agreements. 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 either of these agreements, 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 and the debentureholders could convert their
debentures into shares of common stock based on the then current market price
which is currently substantially less than the conversion price of $13.68 per
share. 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 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, 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 June 30, 1999 for acquisitions completed through March 11,
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 elected in February 1999, consisting
of a Chief Executive Officer and Office of the 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
-9-
<PAGE>
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.
Costs of Complying with Department of Agriculture, Food and Drug,
-----------------------------------------------------------------
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.
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<PAGE>
Adverse Effect of Potential Future Sales of Common Stock.
--------------------------------------------------------
As of March 9, 1999, we had 42,077,347 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
9.0 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.
The selling stockholders 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.
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.
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<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,
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 system. This 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 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 enterprise 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.
The Company has identified and sent surveys to approximately 80% of its
significant customer and supplier base. It is expected that the remaining 20%
will be sent surveys by March 31, 1999. Of the surveyed companies, 20% have
replied confirming their Year 2000 compliance. The Company is currently in the
process of calling all significant customers and suppliers that have not
responded to determine their level of compliance. 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 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.
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.
. 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
. 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
. 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 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 sales by selling
stockholders 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.
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 warrants by the selling stockholders in an amount of up
to $25,545,000 will be used to repay indebtedness and/or for working capital
purposes. The conversion of the convertible debentures would increase ABT's
stockholders' equity, but not result in any increases in cash to ABT.
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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-March 19, 1999......... $16 11/16 $ 3 3/4
</TABLE>
As of March 18, 1999, the Company had 509 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
SUSPENSION OF STRATEGIC ALTERNATIVE PROCESS
On October 8, 1998, ABT announced that it "had retained Merrill Lynch & Co.
as its investment banker, primarily to explore alternatives to maximize share-
holder 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."
On January 22, 1999, ABT announced that due to market conditions, ABT had
decided to remain independent in order to maximize shareholder value and
suspended its previously announced efforts to find a strategic equity partner.
Dr. Thomas, then Chief Executive Officer, stated that "the purpose of the
strategic alternative process was to evaluate with outside professional guidance
all alternative courses of actions to maximize shareholder value. This process
has led Company management and the Board of Directors to the conclusion that the
best course is to focus its complete attention on continuing to build franchise
value as measured by market share, germplasm leadership, world class seed
personnel and biotechnology."
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, Vice President and Chief
Financial Officer of the Company, and Thomas B. Rice, Vice President, Director
of Research of the Company, as directors and both were re-elected directors at
the February 22, 1999 annual meeting. The biographical data on each person is
contained in the section "Executive Officers" on page six of the proxy statement
which has been incorporated herein by reference. ABT has launched a search to
add additional outside members to the Board of Directors, which will create a
new, nine-person Board with a majority consisting of outside Directors.
Following the February 22, 1999 Annual Shareholders Meeting and a Board of
Directors meeting that same day ABT announced a reorganization of ABT's senior
management. As of February 26, 1999, Richard P. Budd assumed the position of
Chairman of the Board and Chief Executive Officer and Kent Schulze continued as
Co-President and Chief Operating Officer. In addition, the Office of President
has been created which includes four Co-Presidents: Randy Ingram, Co-President,
Chief Financial Officer and Director of Business Development, Dr. Thomas B.
Rice, Co-President and Director of Research, Kathy Gillepsie, Co-President,
Mergers, Divestitures and Acquisitions, and a fourth Co-President, subsequently
filled by Drew Kinder, Co-President, Director of the Retail Team. On
March 24, 1999, ABT announced that Kent Schulze resigned his position. The four
Co-Presidents previously announced continue in their positions.
Dr. Johnny R. Thomas, 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. Dr. Thomas conceived ABT's acquisition
strategy which led to ABT achieving a leadership position in the forage and
turfgrass seed industry. ABT's needs have shifted to a focus on integration and
operations. Dr. Thomas stated that ABT's operational needs during the
integration and consolidation phase of ABT's development can best be served
through the leadership team described above.
On March 16, 1999, ABT announced that James W. Johnston had been elected to
and joined the Company's Board of Directors as an outside director. As
previously announced, ABT is continuing its search for three, new and additional
outside directors to add to its Board. 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.
Biotechnology
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. Transformation refers to the tools to introduce functional foreign genes
into plant species. The decision to begin research at the university 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 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 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, Co-
President and Director of Research. Dr. Poutre will be responsible for building
and managing ABT's biotechnology program located on the campus of the University
of Rhode Island, 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.
Telephone Conference Calls
In the following paragraphs, ABT is disclosing information discussed in
telephone conference calls with analysts which were made available to the
public, including forward-looking information, that is not otherwise set forth
in this prospectus. These statements are not deemed by ABT to be material.
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 the statements 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, including, but not limited to,"Risk Factors".
On February 16, 1999, ABT held a conference call for the purpose of
announcing second quarter results. During the conference call Kent Schulze
commented on the restructuring of ABT's business units. He expressed his belief
that the number of people employed by ABT will decrease from approximately 1,300
to between 800 and 1,000. Further, he expected the number of ABT locations to
drop from its original total of 88 to between 50 and 60. He expects the number
of brands ABT markets to be between 10 and 15, whereas there are now 34 company
names and scores of brands. He expects business unit staffing to be a two to
three month process. Some units will start in March, others beginning after
the spring selling season winds down. All business units should be complete and
up and running for the fall season.
Randy Ingram discussed ABT's results of operations for the second quarter
ended December 31, 1998 which were reported in our Form 10Q. He noted that for
the six months ended ABT reported on 33 companies that have been acquired
through December 31, 1998. That compares to 15 companies that had been acquired
through December 31, 1997. Mr. Ingram stated it is typical that seed companies
loose money during this time of year. It is a seasonal business. ABT has a
certain relatively fixed level of operating expenses. During this time of year
when sales are lower it's obvious that ABT is not going to cover its operating
costs for those months or quarters. He said that, due to the fact that ABT is a
larger company this year than last year due to the acquisitions, ABT's loss is
larger this quarter. There are also other factors clearly that are impacting the
three month and six month results.
He said that ABT indicated earlier its sales and gross margins have been
unfavorably impacted by a shortage of non dormant alfalfa seeds. Those sales
occur in the U.S. in the fall sale season. It is typical that ABT's export sales
of non dormant alfalfa in this quarter. Some of those sales did not materialize
due to the lack of availability of non dormant alfalfa seeds.
In addition it appears that there is an excess supply of turf seed on a
worldwide basis. It is likely that that excess supply is going to impact ABT for
the remainder of the year and has impacted ABT this quarter as certain typical
export sales that it would make this time of year again, have not
materialized.
Mr. Ingram noted that it's important to realize that ABT is different set
of companies then it was last year. A number of the 33 acquired businesses have
done business with each other. A number of these companies are production
oriented companies. Others are marketing and distribution oriented
companies.
In the past as a production oriented company has sold to a distribution
oriented company, these companies have reported sales. They were third parties
at that point in time. Now that ABT has acquired a number of these companies
that have had inter related business, when a production company sells to a
distribution company, which is a very typical activity for this quarter, ABT is
not recording a sale. There's still obviously certain related operating
expenses to those companies.
Mr. Ingram also noted ABT has had substantially higher interest costs of
$4.5 million due to the acquisition. ABT had higher overhead and operating
expenses of $3.6 million, which primarily relates to the development of overhead
structure primarily in its Henderson, Nevada Corporate Headquarters that did not
previously existed as these companies were stand alone .
On February 24, 1999, the day following its announcement of a reorganization
of its senior management, ABT held a conference call during which a question was
presented concerning the restructuring charge associated with integration of our
acquired companies. Kent Schulze responded by expressing the importance of
comprehending the accounting rules of the restructuring in order to understand
the time frame in which the restructuring will occur. Randy Ingram followed by
reiterating a point he made at ABT's annual meeting on February 22, 1999. He
stated that the accounting rules that establish the timing of recognition of the
restructuring costs state there needs to be a formal plan with associated cost
estimates. He continued by stating that there is not currently a restructuring
plan in place, but ABT is very close to finalizing a plan. Ingram stated that
the plan will be in place by June 30, 1999, the end of ABT's fiscal year. This
will result in almost a complete year of cost savings for fiscal year 2000.
Mr. Ingram responded to a question concerning potential strategic alliance
for financial strength. He said that ABT has previously announced that it has
gone from a formal to an informal process. He said that ABT's real objective is
to build the business. He said that when you build the business and you create
competitive advantage and strategic product leverage, good things happen. He
went on to say when you do those things you build potential alliances and
parties are going to be interested in working with you.
ABT already has a number of relationships, as the biotechnology
announcements from Tom Rice have shown. Mr. Ingram only saw those increasing in
the future.
In response to a question concerning capital formation, Richard Budd noted
that he had a long term relationship with NationsBank which is now part of Bank
of America, ABT's lender. He said he also had a long term relationship with
BB&T. Mr. Budd said that he has had numerous conversations with key parties at
Deutsche Bank, and one of his top priorities will be working on capital
formation. He said that there are a number of people out there that are willing
to help. ABT just has to do it in the most prudent and cost effective
manner.
WEB SITE DISCLOSURES
ABT had previously disclosed information in its Web Site, including
forward-looking information, that is not otherwise set forth in its reports
filed with the SEC. Such forward-looking and other statements reflect the
good faith judgment of ABT's management as to future events, and were solely
based on facts and factors known by ABT at the time such statements were made.
Because forward-looking statements are inherently subject to risks and
uncertainties, and actual results and outcomes may differ materially from the
results and outcomes discussed in the forward-looking statements, you should not
place undue reliance on statements which were not updated prior to their being
deleted from ABT's Web Site but should consider them in light of the other
information discussed in this prospectus. The risks and uncertainties that could
cause or contribute to a different results or outcome include without
limitation, ABT's historical lack of profitability, need to manage its growth,
intense competition in the seed industry, seasonality of quarterly results,
weather conditions, volatility of common stock prices, as well as those factors
discussed under "Risk Factors" and elsewhere in this Prospectus and in any
documents that are incorporated into this Prospectus by reference.
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<PAGE>
ABT has made certain forward-looking and other statements (the "Prior
Statements") in prior versions of its Web Site which were included in
registration statements filed previously with the Commission. ABT's Chairman of
the Board and Chief Executive Officer, Johnny R. Thomas, from time to time
informs the public as to current events concerning ABT by posting on ABT's Web
Site what we call a "Chairman's Update". The Prior Statements include: (a)
Chairman's Update dated March 4, 1998; (b) Chairman's Update dated April 1,
1998; (c) Chairman's Update dated June 22, 1998; (d) Chairman's Update dated
September 1, 1998; (e) Chairman's Update dated October 9, 1998, (f) Letter to
Shareholders dated November 10, 1998, and (g) 1997 Annual Report to
Shareholders.
ABT has deleted each of the Prior Statements in its entirety from its Web
Site. As a result, the Prior Statements are deemed not incorporated by reference
into this document and shall be deemed to be superseded for purposes of this
registration statement, in accordance with the terms of Rule 412 promulgated
under the Securities Act. ABT may make other Statements that are "forward-
looking statements" as defined in Section 27A of the Securities Act and Section
21E of the Exchange Act.
In the following section ABT is disclosing information on the Year 2000
Problem that appears in its Web site that is not otherwise set forth in this
Prospectus or incorporated by reference from our Exchange Act reports.
Year 2000 Readiness Disclosure
As a result of acquisitions completed to date, the Company has several
different data processing systems in use. These systems are substantially the
same systems that were in use prior to their acquisition by the Company. The
preliminary assessment of reaching the Year 2000 is that these systems are
generally not compliant. Some of the non-compliant systems can be easily updated
to be compliant but a number of these systems cannot be updated because of
software and hardware limitations. The following describes AgriBioTech's plans
and Year 2000 status as of October 30, 1998.
Enterprise Resource System
The Company is in the process of integrating its systems into one Company
wide information system and has contracted for software, hardware and consulting
services to implement an enterprise resource planning ("ERP") system to meet its
current information system requirements. The cost of this implementation is not
expected to exceed $6 million, which amount includes internal costs for
personnel, training, supplies, travel and equipment. At September 30, 1998, the
Company had incurred approximately $2.2 million of these costs. The
implementation costs are funded through operations, the Company's existing
credit facilities, and financing provided by one of the vendors.
The Company has completed preliminary testing and design and is beginning
the implementation phase. The initial phase encompasses the implementation of
the system at five operating sites and developing a rapid implementation
methodology that is intended to be used to integrate the remaining operating
entities. The Company plans to integrate these entities whereby the largest
operating units would be integrated first such that all significant operating
units are integrated by June 30, 1999. The ERP system and related network and
hardware systems are designed to be Year 2000 compliant. Local Area Networks
(LAN), desktop hardware, and desktop operating systems in some cases are not
compliant. The Company has determined that the non-compliant desktop and LAN
systems will be converted either through normal attrition or through the ERP
system implementation.
Wide and Local Area Networks
The Company is in the process of installing a Wide Area Network (WAN) to
support both its ERP system and internal communications. Year 2000 compliance
statements for all hardware, software, and service providers associated with
this infrastructure have been obtained and are on file.
The Company has completed a LAN inventory survey of all of its operating
locations as of September 7, 1998. Results of this survey indicate that the LAN
systems that are in place are generally not compliant. The Company is currently
performing a more in depth inventory assessment and Year 2000 tests on each of
its operations that have LAN's on site. The Company expects to complete this
assessment by March of 1999. The Company plans to either replace or install
software upgrades/patches on all LAN systems to address Year 2000 issues by June
1999.
Desktop Systems and Applications
The Company is in the process of replacing all desktop hardware that cannot
be converted to a Year 2000 compliant state by installing a BIOS patch. In the
course of keeping desktop capability up to date, all desktops systems that are
not Pentium(TM) class computers or above are being replaced prior to June 30,
1999. The Company is also performing a physical inventory of all its desktop
systems through March 1999. Concurrent with this process, all desktop systems
are being tested using a third party Year 2000 software application.
The Company plans to convert all desktop applications to Microsoft(R)
Office 97(TM) by June 1999. Included in this conversion plan is the intent to
move all e-mail communication within the Company to either Microsoft(R) Exchange
or Microsoft Outlook 98(TM) . Currently, the Company is migrating all of its
desktop operating systems to Windows(R) 95 , Revision B. By February 1999, the
Company intends to make a decision to migrate to Windows(R) 2000 or remain on
its existing operating system. Both Windows(R) 95 , Revision B, and Windows(R)
2000 have been stated to be Year 2000 compliant. However, the Company plans to
perform its own independent testing of these operating platforms to verify
compliance. All Company desktop computers are intended to be migrated to one of
these two operating systems by June 1999.
Communication and Power Systems
The Company currently has a contract for long distance services and
wireless communication with a single national service provider. A statement of
Year 2000 compliance has been received from this service provider and is on file
at the Company.
Numerous Local Exchange Carriers provide local exchange services across the
country to the Company's operations. The Company is in the process of gathering
Year 2000 statements from these service providers and intends to have this
process complete by June 1999.
Additionally, the Company is in the process of verifying Year 2000
compliance of all office telephone systems, imbedded systems, local power
systems, outside power systems, and all mail equipment (Federal Express
Computers, UPS Software, Pitney Bowes, etc.). The Company plans to complete the
Year 2000 assessment of these office and manufacturing peripheral systems by
March 1999 and ensure Year 2000 compliance for these systems by June 1999.
Customers and Vendors
The Company is taking steps to confirm that the systems of its significant
suppliers and customers are Year 2000 compliant and to determine whether the
nature of any noncompliance would have a material adverse effect on the
Company's business, financial condition and results of operations. The Company
anticipates this process will be completed no later than June 30, 1999. There
can be no assurance that the failure of the Company or such third parties to
adequately address their respective Year 2000 issues will not have a material
adverse effect on the Company's business, financial condition, cash flows and
results of operations.
Risk Management
The Company believes that it has allocated adequate resources to ensure
that all information systems are Year 2000 compliant. The Company expects its
Year 2000 program to be successfully completed on a timely basis prior to
January 1, 2000. However, there can be no assurance that this will be
accomplished. In the event any operating units remain Year 2000 non-compliant in
late 1999, the Company's contingency plan is twofold. First, where possible, the
Company is in the process of identifying reparation for existing software that
is available as an upgrade, patch, or limited re-coding (data field masks,
editing date related computations, or as a temporary workaround). Secondly, the
Company is in the process of identifying the potential to encapsulate data
information as a temporary measure until the software or systems can be
replaced. Completion of the assessment of these alternatives is anticipated to
be completed by March 31, 1999.
In the worst case scenario, the Company can resort at the operating unit
level to simple desktop accounting packages that are Year 2000 compliant. The
Company estimates that the overall risk to its operations as a result of non-
compliance with Year 2000 for its existing systems in a worst case scenario to
be less than $300,000. However, there can be no assurance that this estimate is
the absolute maximum. The ability of third parties with whom the Company
transacts business to adequately address their Year 2000 issues is outside of
the Company's control.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information as of March 25, 1999, except as
noted below, based on information obtained from the selling stockholders named
below with respect to the beneficial ownership of 3,796,890 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 after this offering assuming all of the shares
offered hereby are sold.
Because the selling stockholders 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 the security that will be held by the
selling stockholders upon termination of any sale. In addition, the selling
stockholders may have sold, transferred or otherwise disposed of all or a
portion of these securities in transactions exempt from the registration
requirements of the Securities Act. The selling stockholders may sell all, part,
or none of the securities listed above.
<TABLE>
<CAPTION>
Percentage of
Amount and Outstanding
Nature of Number of Shares Owned
Beneficial Shares After
Name Ownership(1) Offered Hereby Offering(2)
---- ------------ -------------- -----------
<S> <C> <C> <C>
Brown Simpson Strategic
Growth Fund, L.P. 219,000(3) 189,844 *
Brown Simpson Strategic
Growth Fund, Ltd. 660,560(4) 417,658 *
Brown Simpson - ORD
Investments LLC 476,840(5) 531,565 -0-
LBI Investments LLC, 953,680(6) 1,063,129 -0-
Bay Harbor Investments,
Inc. 953,680(7) 1,063,129 -0-
HFTP Investments LLC 476,840(8) 531,565 -0-
---------
Total 3,796,890
</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. Under the Federal securities laws, a person is
deemed to be the beneficial owner of securities that can be acquired by
that person within 60 days from the date hereof upon the conversion of
convertible securities or the exercise of warrants or options. We have
assumed for each person that any exercisable and convertible securities
that are held by that 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 or converted and that after the offering, all
underlying shares set forth under "Number of Shares Offered Hereby" have
been sold. The "Number of Shares Offered Hereby" includes additional shares
of common stock issuable upon payment of interest on the convertible
debentures, assuming those debentures remain outstanding in full until the
maturity date and all interest payments are made in common stock by ABT.
The number of additional interest shares which are issuable are as follows:
Brown Simpson Strategic Growth Fund, L.P. (19,544 shares); Brown Simpson
Strategic Growth Fund, Ltd. (42,998 shares); Brown Simpson - ORD
Investments LLC (54,725 shares); LBI Investments LLC (109,449 shares); Bay
Harbor Investments, Inc. (109,449 shares); and HFTP Investments LLC (54,725
shares). 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. In addition, the terms of the debentures and warrants
prevent ABT or the holder thereof from converting any or all of the
aggregate principal amount of the debentures (or issuing or receiving
shares of common stock as payment of interest thereon) or exercising
warrants if, as a result of the conversion, payment of interest in shares
of common stock or exercise, the aggregate number of shares of common stock
owned by the holder thereof would exceed 4.99% of the shares of common
stock following such conversion or payment of interest in shares of common
stock or excercise.
(2) Based on 43,077,347 shares of Common Stock issued and outstanding as of
March 9, 1999.
(3) Includes 85,150 shares issuable upon conversion of $1,164,850 of ABT's
convertible debentures due December 30, 2001 at a conversion price of
$13.68 per share (subject to adjustment), plus 85,150 shares issuable upon
exercise of three-year warrants. Also 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. This entity is an investment fund
managed by Brown Simpson Capital LLC its general partner. Does not include
shares issuable to Brown Simpson Strategic Growth Fund, Ltd. discussed in
Note (4) below, nor 238,420 shares of common stock issuable upon conversion
of $3,261,580 of convertible debentures, plus 238,420 shares issuable upon
exercise of three-year warrants issued to Brown-Simpson - ORD Investments
LCC.
(4) Includes 187,330 shares issuable upon conversion of $2,562,670 of
convertible debentures, plus 187,330 shares issuable upon exercise of
three-year warrants. Also 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. This entity is an investment fund managed
by Brown Simpson Asset Managements LLC. Does not include shares issuable to
Brown Simpson Strategic Growth Fund, L.P. discussed in note (3) above, nor
238,420 shares of common stock issuable upon conversion of $3,261,580 of
convertible debentures, plus 238,420 shares issuable upon exercise of
three-year warrants issued to Brown-Simpson - ORD Investments LCC.
(5) Includes 238,420 shares issuable upon conversion of $3,261,580 principal
amount of convertible debentures, and 238,420 shares issuable upon exercise
of common stock purchase warrants issued in a private placement on December
30, 1998 and January 5, 1999.
(6) Includes 476,840 shares issuable upon conversion of $6,523,160 principal
amount of convertible debentures, and 476,840 shares issuable upon exercise
of common stock purchase warrants issued in a private placement on December
30, 1998 and January 5, 1999. LBI Investments is an independent, wholly-
owned subsidiary of Lehman Brothers, Holdings Inc. Does not include 162,200
shares of common stock and 172,500 and 300,000 shares issuable upon
exercise of common stock purchase warrants issued in private placements on
May 4, 1998 and December 4, 1998, respectively, issued to LBI Group, Inc.
an affiliate of LBI Investments LLC.
(7) Includes 476,840 shares issuable upon conversion of $6,523,160 principal
amount of convertible debentures, and 476,840 shares issuable upon exercise
of common stock purchase warrants issued in a private placement on December
30, 1998 and January 5, 1999. Bay Harbor Investments is a British Virgin
Islands corporation.
(8) Includes 238,420 shares issuable upon conversion of $3,261,580 principal
amount of convertible debentures at a conversion price of $13.68 per share,
subject to adjustment, and 238,420 shares issuable upon conversion of
common stock purchase warrants issued in a private placement on January 5,
1999.
-15-
<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 42,077,347 shares were issued and
outstanding as of March 9, 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 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,
-16-
<PAGE>
proposals, commitments or arrangements to issue any shares of preferred stock.
Our Certificate of Incorporation authorizes the issuance of preferred stock with
the designations, rights, and preferences that 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 (discussed below) to 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 exercise 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 this 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 such
exercise.
On December 4, 1998, we issued 600,000 warrants to purchase our common
stock to 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 on a separate registration statement.
On August 28, 1998, we issued 886,410 warrants to purchase our common
stock to 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 on 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 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 on 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.
DESCRIPTION OF CONVERTIBLE DEBENTURES
On December 30, 1998 and January 5, 1999, we issued an aggregate of
$23,297,000 principal amount of 5% convertible debentures due December 30, 2001
to certain qualified institutional buyers and accredited investors in private
placements.
Interest
- --------
The convertible debentures bear interest at the rate of 5% per annum which
shall accrue daily from the date of the last interest payment and be payable
semi-annually on January 1 and July 1 of each year commencing on July 1, 1999.
Interest on the convertible debentures may, at our option, be paid in shares of
our common stock valued at the closing bid price per share for ten trading days
prior to the date the interest payment is due, minus the high and low closing
bid price during such ten day period, divided by eight. We may not, however,
issue common stock in payment of interest or principal (at the holder's option):
unless, among other things, the shares are registered with the SEC or exempt
from registration; if an event of default (as defined below) has occurred; an
issuance would result in the recipient owning more than 4.99% of ABT's
outstanding shares; or if in violation of Nasdaq's rules and regulations.
Conversion
- ----------
The convertible debentures give investors the right to convert their
convertible debentures into shares of our common stock at $13.68 per share at
any time between the date the convertible debentures were sold and December 30,
2001. The shares of ABT common stock issuable upon conversion of the convertible
debentures have been registered for resale under this registration statement. If
we issue or sell common stock or securities convertible into common stock at
less than the conversion price, the conversion price shall be reduced for a five
trading day period, to such lower rate and thereafter revert back to the last
conversion price. If we default in any payment to the debentureholder (including
redemptions), the conversion price shall be adjusted to the lower of the
conversion price in effect on the payment date and 80% of the then current fair
market value. ABT and the holders have agreed not to convert the debenture if
the number of shares of common stock issued pursuant to the conversion would
exceed 4.99% of the outstanding shares of common stock.
Events of Default
- -----------------
Events of default are defined under the convertible debentures to include,
among others, default in payment of principal or interest; a default of $500,000
or more of any other debt; an unsatisfied judgment or order of $1 million or
more; bankruptcy proceedings; a change of control (as defined); and the failure
to have this registration statement declared effective on a timely basis.
Optional Redemption
- -------------------
Commencing on June 30, 1999, we have the option to redeem the convertible
debentures, provided no event of default has occurred; an effective registration
statement is in effect and we have sufficient authorized shares of common stock.
We may redeem the convertible debentures, in whole or in part, together with
accrued interest at 120% of the principal amount on June 30, 1999 and increasing
by l5% every six months thereafter until 180% on June 30, 2001. In the event ABT
does not redeem the convertible debentures on each redemption date, the
conversion price shall become, at the option of the holders, an amount equal to
the closing bid price on the last trading date prior to such redemption date
price if that closing bid price is lower than the conversion price then in
effect.
Subordination
- -------------
The payment of principal (and premium, if any) and interest on the
convertible debentures is subordinate in right of payment to our revolving
credit facility. If we default on the senior indebtedness, other than payment of
principal or interest on such debt, the holders of the senior indebtedness can
block payment of cash (not additional common stock or other securities) to the
holder of the convertible debentures for up to l80 days.
-17-
<PAGE>
PLAN OF DISTRIBUTION
ABT is registering the shares of common stock underlying the convertible
debentures and warrants (the "Registrable Securities") on behalf of the holder.
As used herein, the term holder means the holder of the Registrable Securities
and includes donees and pledgees selling Registrable Securities received from a
named holder after the date of this prospectus. All costs, expenses and fees in
connection with the registration of the Registrable Securities offered hereby
will be borne by ABT. Brokerage commissions and similar selling expenses, if
any, attributable to the sale of Registrable Securities will be borne by the
holders. Sales of Registrable Securities may be effected by holders from time to
time in one or more types of transactions (which may include block transactions)
on the Nasdaq, in the over-the-counter market, in negotiated transactions,
through put or call options transactions relating to the Registrable Securities,
through short sales of Registrable Securities, or a combination of these methods
of sale, at market prices prevailing at the time of sale, or at negotiated
prices. These transactions may or may not involve brokers or dealers. The
holders have advised ABT 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 coordinated broker
acting in connection with the proposed sale of Registrable Securities by the
holders.
The holders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions, broker-
dealers or other financial institutions may engage in short sales of the
Registrable Securities or of securities convertible into or exchangeable for the
Registrable Securities in the course of hedging positions they assume with
holders. The holders may also enter into options or other transactions with
broker-dealers or other financial institutions which require the delivery to
broker-dealers or other financial institutions of Registrable Securities
offered by this prospectus, which Registrable Securities such broker-dealer or
other financial institution may resell pursuant to this prospectus (as amended
or supplemented to reflect such transaction).
The holders may effect these transactions by selling Registrable Securities
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from holders and/or the purchasers of
Registrable Securities for whom such broker-dealers may act as agents or to whom
they sell as principal, or both (which compensation as to a particular broker-
dealer might be in excess of customary commissions).
The holders and any broker-dealers that act in connection with the sale of
Registrable Securities might be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act, and any commissions received by the
broker-dealers any profit on the resale of the Registrable Securities sold by
them while acting as principals might be deemed to be underwriting discounts or
commissions under the Securities Act. ABT has agreed to indemnify each holder
against various liabilities, including liabilities arising under the Securities
Act. The holders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the Registrable Securities
against various liabilities, including liabilities arising under the Securities
Act.
The holders will be subject to the prospectus delivery requirements of the
Securities Act. ABT has informed the holders that the anti-manipulative
provisions of Regulation M promulgated under the Exchange Act may apply to their
sales in the market.
Holders also may resell all or a portion of the Registrable Securities in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule
144.
Upon our being notified by a holder that any material arrangement has been
entered into with a broker-dealer for the sale of Registrable Securities through
a block trade, special offering, exchange distribution or secondary distribution
or a purchase by a broker or dealer, a supplement to this prospectus will be
filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing
(i) the name of each holder and of the participating broker-dealer(s), (ii)
the number of Registrable Securities involved, (iii) the initial price at which
the Registrable Securities were sold, (iv) the commissions paid or discounts or
concessions allowed to the broker-dealer(s), where applicable, (v) that the
broker-dealer(s) did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus and (vi) other facts
material to the transactions. In addition, upon ABT being notified by a holder
that a donee or pledgee intends to sell more than 500 Registrable Securities, a
supplement to this Prospectus will be filed.
-18-
<PAGE>
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.
-19-
<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 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 LLP incorporated by reference herein and upon the authority of
said firm as experts in accounting and auditing.
-20-
<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 $ 9,045.94
Printing and Engraving Expenses .............. 1,000.00
Legal Fees and Expenses....................... 15,000.00
Accounting Fees and Expenses.................. 10,000.00
Miscellaneous................................. 9,954.06
------------
Total:............................ $ 45,000.00
</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
II-3
<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.
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<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.
* 23.6 Consent of Huth Thompson LLP.
* 23.7 Consent of Price, Koontz & Davies, P.C.
* 24.1 Power of Attorney (on signature page)
____________________
* Filed with this Amendment No. 1 to the 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 March 30, 1999.
AGRIBIOTECH, INC.
By: /s/ Randy Ingram
---------------------------
Randy Ingram, Co-President
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 March 30, 1999 and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
* Chairman of the Board (Principal
- -------------------------- Executive Officer) Chief Executive Officer and Director
Richard P. Budd
/s/ Randy Ingram Co-President (Principal
- -------------------------- Financial and Accounting Officer)
Randy Ingram Chief Financial Officer and Director
* Co-President, Director of Research
- -------------------------- and Director
Thomas R. Rice
* Director
- --------------------------
James W. Hopkins
*
- -------------------------- Director
James W. Johnston
</TABLE>
- -----------
* The undersigned, by signing his name hereto, does hereby sign this
registration Statement on behalf of the above-indicated officers and directors
of the Registrant pursuant to powers of attorney signed by such officers and
directors.
/s/ Randy Ingram
- ------------------------------
Randy Ingram as Attorney-in-
fact
II-8
<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
March 29, 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 L.L.P.
Winston-Salem, North Carolina
March 25, 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
March 25, 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
March 29, 1999
<PAGE>
Exhibit 23.6
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
AgriBioTech, Inc.
We hereby consent to the use of our report related to the financial
statements of HybriGene, LLC and to the reference to our firm under the
heading "Experts" in the Prospectus.
Huth Thompson LLP
Lafayette, Indiana
March 25, 1999
<PAGE>
Exhibit 23.7
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 Willamette Seed Co. herein and to the reference to our firm under the heading
"Experts" in the Prospectus.
Price, Koontz & Davies, P.C.
Albany, Oregon
March 25, 1999
