Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-61097
SUPPLEMENT TO AGRIBIOTECH, INC.
PROSPECTUS DATED AUGUST 14, 1998
AS PREVIOUSLY SUPPLEMENTED ON SEPTEMBER 4, 1998,
DECEMBER 29, 1998, JANUARY 22, 1999, FEBRUARY 5, 1999,
JUNE 29, 1999 AND SEPTEMBER 24, 1999
___________________________________
The offering:
Shares of common stock offered...... On October 25, 1999, AgriBioTech, Inc.
("ABT") issued 200,000 of ABT common stock
to Thomas K. Hodges and Halina K. Hodges
as additional consideration in
connection with ABT's acquisition of
HybriGene, LLC from the Hodges.
Price of common stock............... On October 25, 1999, the closing sale
price of ABT common stock on the Nasdaq
National Market was $3 3/32 per share.
Nasdaq National Market symbol....... ABTX
___________________________________
The shares offered hereby involve a high degree of risk. See "Risk Factors"
beginning on page 4.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
___________________________________
October 25, 1999
<PAGE>
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is part of a registration statement on Form S-4
we filed with the SEC on August 14, 1998. The prospectus that we filed included
a general description of the securities that we may offer at any time for two
years from that date. This supplement contains information included in the
August 14, 1998 prospectus and updated information and specific information
about the securities being offered under this prospectus supplement.
This prospectus supplement relates to 200,000 shares of our common stock
that we are issuing to Thomas K. Hodges and Halina K. Hodges, as additional
consideration in connection with ABT's acquisition of HybriGene, LLC from the
Hodges. The shares of common stock are referred to in this prospectus supplement
as the "shares" and were registered as an original equity issuance as part of
this registration statement.
To fully understand this offering, you should read this prospectus
supplement and the additional information described under the heading "Where You
Can Find More Information."
TABLE OF CONTENTS
<TABLE>
<S> <C>
PROSPECTUS SUMMARY.............................................. -3-
RISK FACTORS.................................................... -4-
WHERE YOU CAN FIND MORE INFORMATION............................. -9-
USE OF PROCEEDS................................................. -10-
DIVIDEND POLICY................................................. -11-
PRICE RANGE OF COMMON STOCK..................................... -11-
DESCRIPTION OF CAPITAL STOCK.................................... -12-
PLAN OF DISTRIBUTION............................................ -13-
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES............................. -13-
LEGAL MATTERS................................................... -13-
EXPERTS......................................................... -14-
</TABLE>
-2-
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information from this prospectus
supplement and may not contain all the information that is important to you. To
understand the circumstances and terms of the offering and for complete
information about ABT, you should read this entire document and the information
incorporated by reference, including the financial statements and the notes to
the financial statements. Unless otherwise stated, all references to fiscal
years are to a June 30 year end.
THE COMPANY
ABT is a vertically integrated developer, producer, marketer, and
distributor of forage and cool-season turfgrass seed, whose operations include a
research and development program to develop improved varieties through
traditional breeding programs, seed processing plants to clean, condition and
package seed grown under contract for ABT, and national and international sales
and distribution networks. In order to offer its customers a broad array of
products, ABT also distributes seeds for warm-season turfgrasses, wildflowers,
and native grasses, and seeds for other crops such as corn, soybeans, sorghum,
wheat, and vegetables. ABT's Specialty Distribution operations, which operate in
certain geographical areas, also sell pesticides, wetting agents, water and soil
conditioning products, and lawn, garden and golf course supplies. ABT's
headquarters are located at 120 Corporate Park Drive, Henderson, NV 89014;
telephone (702) 566-2440.
THE OFFERING
On January 22, 1999, ABT completed the acquisition of 100% of the issued
and outstanding share capital of HybriGene, LLC, an Indiana limited liability
company, from Thomas K. Hodges, Halina K. Hodges, individuals, and Bill L. Rose,
L.L.C., an Oregon limited liability company, under a stock purchase agreement
dated January 22, 1999. HybriGene, LLC has been engaged in research and
development concerning the use of genetic technology in the farming industry.
The aggregate purchase price was $11.5 million, paid as follows: Thomas and
Halina Hodges - $9.5 million in the form of 515,000 shares of ABT's common
stock; Bill L. Rose, L.L.C. - $100,000 in cash and $1.9 million in the form of
103,012 shares of ABT's common stock.
The issuances of the shares of common stock were registered as described in
the prospectus supplement dated February 5, 1999 and may be resold subject to
the terms of lock-up agreements between the recipients of ABT common stock and
ABT. You will find additional information including financial information,
concerning HybriGene, LLC in our Current Report on Form 8-K dated January 22,
1999, and filed on February 5, 1999, which is incorporated by reference into
this prospectus supplement.
In the above transaction, ABT guaranteed the recipients of ABT common stock
that the amount they would receive upon sale of the ABT shares would equal the
agreed-upon value of those shares, provided the shares were sold in accordance
with the terms of the lock-up agreements. In addition, ABT is to receive any
proceeds that exceed the agreed-upon value of the shares. ABT may satisfy
obligations with respect to the guarantees by issuing additional shares of ABT
common stock or by making cash payments, at ABT's option. Due to declines in the
price of ABT's common stock since these arrangements were agreed to, proceeds of
sales of shares have not been sufficient to satisfy the guarantees. The
recipients agreed to suspend sales of ABT common stock from April 1, 1999
through June 30, 1999 and ABT agreed to make cash payments aggregating $1.3
million to certain of these recipients. These payments have been made and
credited against the guaranteed proceeds. In addition, ABT granted these
recipients options to buy an aggregate of 95,000 shares of ABT common stock at
$5.00 per share, which equaled the market price at the time of grant.
ABT agreed with these recipients to issue an additional 1,000,000 shares of
ABT common stock to them on June 29, 1999, the proceeds from the sale of which
will be credited against the guaranteed proceeds. On September 24, 1999, ABT
issued an additional 480,000 shares to the Hodges and Rose. ABT is now issuing
an additional 200,000 shares of common stock to the Hodges. If the net proceeds
realized from the sale of the shares is not sufficient to satisfy all amounts
due under the guarantees, ABT has the option of paying cash or issuing
additional shares of common stock to satisfy the shortfall, in certain
circumstances.
-3-
<PAGE>
RISK FACTORS
Before you invest in our securities, you should be aware that there are
various risks, including those described below, that may affect our business,
financial condition and results of operations. We caution you, however, that
this list of risk factors may not be all inclusive.
Ability to Effectively and Profitably Integrate Our 34 Acquisitions: Our
future success depends upon our ability to combine or integrate the operations
of the businesses we have acquired into a vertically integrated operation,
combining research, production, distribution, marketing and sales. We must also
realize efficiencies and cost savings without losing sales and margins. These
will consist mainly of headcount reductions, the closing of certain facilities
and reduction in brands and seed inventory. If we cannot successfully and
efficiently 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.
Lack of Historical Profitability; Accumulated Deficit of Approximately $62
Million as of June 30, 1999: Over the life of ABT, we have not shown consistent
profitability. We have reported only four profitable quarters since becoming a
publicly owned company in September 1993 and Fiscal 1998 has been our only
profitable year. We had an accumulated deficit of $61,798,147 through June 30,
1999 which includes a net loss of $49,760,307 for Fiscal 1999. This affects and
lead to the financial factors discussed below.
Possible Inability to Obtain Additional Capital or Short and Long Term
Financing: Our capital requirements have been and are expected to remain
significant. We will need additional capital and/or financing to fund operations
until we achieve and sustain profitability. Our capital requirements depend on
many factors. These factors include the timing and cost of future acquisitions,
if any, the time and cost involved in integrating our acquired companies, recent
weaknesses in the agricultural economy and our success at expanding existing
operations. We may need to seek additional capital and/or an increase in or an
alternative to the revolving credit facility and/or other financings to finance
increased operating or integration needs, or a cutback in operations resulting
from, among other things, unexpected changes in seasonality or weather patterns,
or if our integration plans are more costly than anticipated.
We are currently exploring financing alternatives, including leveraging
real estate assets that are not now encumbered, to supplement, our current
revolving credit facilities. It is also possible we may issue additional equity.
There is no assurance that such financing will be finalized.
Possible Inability to Fund Debt Service Costs of Approximately $12 Million
Per Year on Substantial Indebtedness; Effects of Financial Leverage: We have
indebtedness that is substantial in relation to our stockholders' equity, and
interest and debt service requirements that are significant compared to our cash
flow from operations. Our cash flow from operations, to date, has not been
sufficient to meet our debt service obligations without additional equity and
debt financings. We have a revolving credit facility with financial institutions
under which we may incur up to $90 million of indebtedness subject to a
borrowing base computation and compliance with financial covenants. Through June
30, 1999, ABT has not been in compliance with the debt service covenant.
Subsequent to June 30, 1999, this covenant has been amended to reflect ABT's
current operational structure and forecasted results of operation. As of October
20, 1999, we had borrowed approximately $64 million under the revolving credit
facility and approximately $18 million was available on that date to be
borrowed. In addition, we have approximately $18 million of other long-term
obligations.
The annual debt service requirements, including scheduled debt repayments
and interest, on this debt total approximately $12 million, reflecting
anticipated average borrowings under our revolving credit facility. Weaknesses
in the agricultural economy and the bankruptcy of a major customer (Hechinger
Co.) have negatively impacted availability under our revolving credit facility.
It is possible we may not have sufficient funds in the future to meet our
obligations under the revolving credit facility and other indebtedness.
-4-
<PAGE>
The extent of our debt could have important consequences. 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;
- - 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 debt and to satisfy our other obligations
depends upon our future financial and operating performance. 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.
Risk of Foreclosure Due to Possible Violations of Restrictions Imposed on
ABT by Terms of Lender Indebtedness: Our revolving credit facility or additional
lending agreements with our lenders contain or may contain restrictions that
limit us in many ways. A breach of any of these covenants could constitute an
event of default under such agreements. These restrictions may significantly
limit or prohibit us from incurring additional indebtedness, making prepayments
of indebtedness, paying dividends, making investments or acquisitions, engaging
in transactions with affiliates, creating liens, selling assets and/or engaging
in mergers and corporate consolidations. The revolving credit facility also
requires us to maintain specified financial ratios and to satisfy various
financial condition tests. If there were an event of default under this
agreement, the lenders could declare the total amount outstanding, together with
accrued interest, immediately due and payable. If we were unable to repay those
amounts, the lender could proceed to foreclose their security interest in the
collateral securing the indebtedness.
Operating Results May Fluctuate Due To Cyclical Nature of Agricultural
Products and Weather: Most agricultural products, including much forage and
turfgrass seed, are commodities, whose wholesale price and quantity are subject
to wide fluctuations based on supply and demand. This could result in large
fluctuations in our results of operations. In addition, weather (rain, drought,
wind, hail, frost) pests, disease and other natural forces can affect the
quantity, quality and timing of the production of seed, and the demand for seed,
and this affects availability and price of seed.
Demand is Subject to a Variety of Factors: Demand for turfgrass depends
upon the initial seeding and subsequent reseeding of lawns in a variety of user
markets such as home lawns, office landscaping, athletic fields, golf courses,
landscapers and sod growers, which demand depends upon general economic
conditions, population and income growth, housing starts, golf course and
recreational facilities development and office construction. Demand for forage
crops depend upon demand for beef, sheep and milk and other dairy products, as
well as the economic attraction of alternate crops such as corn and soybeans,
which, in turn, depends upon grain prices for such crops and the agricultural
economy in general.
Fluctuations of Quarterly Results: Our sales are subject to wide seasonal
fluctuations that reflect the typical purchasing and growing patterns for forage
crops and turfgrass. 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.
-5-
<PAGE>
Ability to Implement and Utilize Management Information Systems and the
Year 2000 Risks: As of August 1, 1999, ABT believes that all of its domestic
information systems were Year 2000 ready. Domestic operations constitute
approximately 96.4% of the Company's annual revenue. This was in large part
accomplished by migrating approximately 86.5% of domestic operations to an
Oracle based Enterprise Resource Planning ("ERP") information system and the
remaining 13.5% will continue on an existing system that is believed to be Year
2000 ready. ABT is in the process of integrating its Canadian operations into
its ERP information system and has contracted for software, hardware and
consulting services to complete this integration by the end of October 1999.
ABT's operations in Mexico will be converted to an independent Year 2000 ready
platform by November 1999. The conversion of these international operations will
complete our internal Year 2000-information systems readiness project. However,
there can be no assurance that this will be accomplished.
The ability of third parties with which ABT transacts business to
adequately address their Year 2000 issues is outside of ABT's control. ABT has
taken steps to confirm that the systems of its major suppliers and customers are
Year 2000 compliant and to determine whether the nature of any noncompliance
would have a material adverse effect on ABT's business, financial condition and
results of operations.
There can be no assurance that the failure of ABT or such third parties to
adequately address their respective Year 2000 issues will not have a material
adverse effect on ABT's business, financial condition, cash flows and results of
operations.
Additionally, the Oracle ERP system is important to ABT's ability to obtain
accurate and timely company wide data, which is needed for management decision
making and financial reporting. Migration to and full use of, the ERP system has
caused and will continue to cause changes in business processes and practices.
These changes will continue. Full utilization of the system requires continual
improvement in the system, changes to business practices and training of
employees. There is no assurance that this will be optimal.
Potential Material Adverse Effects If We Are Unable to Manage Recent Rapid
Growth from Net Sales of $26 Million in Fiscal 1996 to Net Sales of $370 Million
for Fiscal 1999: We have acquired all or part of 34 businesses in the forage and
turfgrass seed sector since January 1, 1995. As a result of these acquisitions,
we have experienced significant revenue growth and expanded the number of our
employees and the geographic scope of our operations. Additionally, 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. Additionally, we recently
reorganized our senior management. The founders of ABT are no longer members of
senior management. We have a new Chief Executive Officer, a new President/Chief
Operating Officer, two Executive Vice-Presidents and a Senior Vice-President,
who have overall responsibility for managing ABT. These changes were put into
effect in February through June 1999. There can be no assurance that management
will be able to successfully manage our growth. 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.
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 $26 million in Fiscal
1996 to $66 million in Fiscal 1997, $205 million in Fiscal 1998 and to $370
million in Fiscal 1999. Although we have achieved this growth through
acquisitions, we do not intend to make many acquisitions in the future and may
even 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.
-6-
<PAGE>
Possible Inability of ABT to Develop New Genetically Superior Products: We
are attempting to develop new, genetically superior forage and turfgrass
varieties. 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.
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, or our competitors
could develop and market better products or products with greater market
acceptance. 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 U.S.
patent laws, and/or 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 developed 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.
Possible Inability to Obtain Third Parties' Biotechnology or Lack of Market
Acceptance May Adversely Affect Profit Margins: Biotechnology tools and assets
have led to the introduction of new, improved and specialized corn, soybeans and
cotton. We believe that biotechnology will also lead to the introduction of
improved seeds in the forage and turfgrass seed sector. If we cannot develop or
obtain a license to biotechnology tools and bioengineered genetic traits, or if
we cannot develop and market products with these traits 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.
Furthermore, there has been consumer resistance to genetically modified food
grains, which could affect market acceptance in the United States for all
genetically modified plants. ABT's focus is on forage and turfgrass seed, not on
seed for food crops. A significant lack of market acceptance for these seeds
could have a material negative impact on ABT's anticipated future profit
margins.
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.
Our largest United States competitors for alfalfa seed 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. For cool- season turfgrass seed,
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.
The major agricultural seed companies in the United States focus their
sales around corn, and soybean seed, including Dupont/Pioneer Hi-Bred
International, Monsanto/DEKALB/Holden/Asgrow, Novartis AG and Dow/Mycogen
Corporation, and cottonseed, including Delta and Pine Land Company. In the past,
these companies have treated forage and turfgrass seeds as secondary crops.
-7-
<PAGE>
Although many of our competitors are small family owned businesses and
regional companies, many are not. Additionally, other forage and/or turfgrass
competitors might consolidate. Further 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
ABT's business, results of operation and/or financial condition.
Dependence on Key Personnel: Our success depends in large part on the
efforts, abilities and expertise of our executive officers. The founders of ABT
are no longer members of senior management and the new management structure
consisting of a Chief Executive Officer, a President/Chief Operating Officer,
two Executive Vice-Presidents, and a Senior Vice-President is completely
responsible for implementing ABT's integration efforts and restructuring. The
loss of any of these key personnel could have a material adverse effect on our
business, financial condition and results of operations. Along with our
integration efforts, we are hiring qualified marketing, financial, management
information system, and other technical personnel, upon whom our prospects
depend. Competition for qualified personnel is intense and there can be no
assurance that we will be successful in attracting or retaining such personnel.
Potential Undiscovered Liabilities Associated with ABT's 34 Acquisitions:
The businesses that we have acquired may have existing, but currently unknown,
liabilities that we may have been unable to discover during our pre-acquisition
investigation. If such liabilities are discovered, 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.
Costs of Complying with Department of Agriculture, Food and Drug
Administration, Environmental Protection Agency and Various State Government
Regulations: Our operations are directly and indirectly subject to various
Federal and state environmental controls and regulations. If existing
environmental regulations are changed, or additional laws or regulations are
passed, the cost of complying with those laws may be substantial. We believe
that we are in substantial compliance with existing environmental regulations.
However, these regulations may be changed with retroactive effect and new laws
or regulations may be passed at any time.
The United States Department of Agriculture, the Food and Drug
Administration, the Environmental Protection Agency, and various state agencies
regulate the development of seed of bio-engineered 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.
Adverse Effect of Potential Future Sales of Common Stock: As of October 25,
1999, we had 49,678,281 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. At June 30, 1999 we also have approximately 8.9
million shares of common stock available for issuance without restriction upon
exercise of outstanding options and 3.2 million shares of common stock available
for issuance without restriction upon exercise of outstanding warrants. We
cannot predict what effect sales of these shares may have on the existing market
price of our common stock.
Holders of restricted securities must satisfy the prospectus delivery and
other requirements of the Securities Act prior to making any sales of the
shares, unless the sales are made in accordance with the provisions of Rule 144.
Under Rule 144, if we are in compliance with various public information
requirements, holders of restricted securities that have held those securities
for at least one year may sell limited amounts of those securities. Rule 144
also permits non-affiliates to sell restricted securities free of any volume
limitations if those securities have been held for at least two years.
-8-
<PAGE>
Public Market Risks; Volatility of ABT Securities Prices: The market price
for our securities has been and may continue to be very volatile. Factors such
as our financial results, financing efforts, changes in earnings estimates by
analysts, litigation, conditions in our business and various factors affecting
the agriculture industry generally may have a significant impact on the market
price of our securities. If, in some future quarter, our operating results are
below the expectations of analysts, which has occurred in the past, the price of
our securities may be materially adversely affected. These factors and general
economic and market trends may adversely affect the price of our securities.
Additionally, in the last several years, the stock market has experienced a high
level of price and volume volatility. During this period the market prices for
many companies, particularly small and emerging growth companies like ours, have
experienced wide price fluctuations and volatility that have not necessarily
been related to the operating performance of those companies. Our operating
results are also tracked by professional analysts.
Forward Looking Statements.
--------------------------
You should also be aware that this prospectus supplement contains
forward-looking statements. Forward looking statements discuss future
expectations, contain projections of results of operations or financial
condition, and general business prospects. Words such as "expects," "may,"
"will," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and
similar expressions identify forward-looking statements. The forward-looking
statements in this prospectus supplement reflect the good faith judgment of our
management. However, forward-looking statements can only be based on facts and
factors currently known. Consequently, they are not a guarantee of future
performance and actual results and outcomes may differ materially from the
results and outcomes discussed in the forward-looking statements. The risks and
uncertainties that could cause or contribute to a different result or outcome
include without limitation, total acres of turfgrass and forage planted,
customer purchases, deliveries and payments for ABT products, competitive
pricing, weather, effective management of the integration process and cost
reductions at ABT, ability of ABT to successfully transition to the new
information systems throughout its operations, customer response to the
integration, overall financial condition and asset status of ABT, relationships
with and perceptions of potential lenders and investors, ability to obtain
capital, litigation and other factors as detailed from time to time in ABT's SEC
filings. You should carefully consider the risk factors described above together
with all of the other information included or incorporated by reference in this
prospectus supplement before you decide to purchase shares of our common stock.
WHERE YOU CAN FIND MORE INFORMATION
ABT is subject to the information requirements of the Securities Exchange
Act of 1934. In accordance with the Securities Exchange Act, we file annual,
quarterly and special reports, proxy statements and other information with the
Securities and Exchange Commission. You may inspect and copy any document we
file at the SEC's public reference rooms in Washington, D.C. at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's Northeast Regional Office
at Seven World Trade Center, New York, New York 10048, and at the Midwest
Regional Office at 500 West Madison Street, Chicago, Illinois 60611-2511. You
may also purchase copies of our SEC filings, by writing to the SEC, Public
Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549 or on the
SEC's Worldwide Web site at http://www.sec.gov.
This prospectus supplement is part of a registration statement on Form S-4
that we have filed with the SEC. The SEC allows us to "incorporate by reference"
information that we file with them. This means that we can disclose important
information to you by referring you to other documents that we have filed with
the SEC. The information that is incorporated by reference is considered part of
this prospectus supplement, and information that we file later will
automatically update and may supersede this information. For further information
about ABT and the securities being offered, you should refer to the registration
statement and the following documents that are incorporated by reference.
. Our 1998 Form 10-K for the fiscal year ended June 30, 1998, amended on
January 29, 1999 and March 31, 1999
. Our 1999 Form 10-K for the fiscal year ended June 30, 1999
-9-
<PAGE>
. Our Current Report on Form 8-K 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
. The description of our Common Stock, $.001 par value, in our
registration statement on Form 8-A (File No. 0-19352), filed July 11,
1995, pursuant to Section 12(g) of the Exchange Act including any
amendment or report filed for the purpose of updating such information
. Our Proxy Statement dated January 11, 1999 as amended on February 8,
1999, for our Annual Meeting held on February 22, 1999 and
. All documents we file pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Exchange Act after the date of this prospectus supplement and
prior to the filing of a post-effective amendment that indicates that
all the securities offered hereby have been sold or that deregisters
all the securities remaining unsold.
You may request a copy of all documents that are incorporated by reference
in this prospectus supplement by writing or telephoning us at the following
address: AgriBioTech, Inc., Attention: Chief Financial Officer, 120 Corporate
Park Drive, Henderson, NV 89014; telephone number (702) 566-2440. We will
provide copies of all documents requested (not including the exhibits to those
documents, unless the exhibits are specifically incorporated by reference into
those documents or this prospectus supplement) without charge.
ABT has not authorized any person to give any information or to make any
representations in connection with sales of the shares by the selling
stockholders other than those contained in this prospectus supplement. You
should not rely on any information or representations in connection with sales
by selling stockholders other than the information or representations in this
prospectus supplement. The information in this prospectus supplement is correct
as of the date of this prospectus supplement. You should not assume that there
has been no change in the affairs of ABT since the date of this prospectus
supplement or that the information contained in this prospectus supplement is
correct as of any time after its date. This prospectus supplement is not an
offer to sell or a solicitation of an offer to buy shares in any circumstances
in which such an offer or solicitation is unlawful.
USE OF PROCEEDS
This prospectus supplement relates to additional shares issued to Thomas K.
Hodges and Halina K. Hodges in connection with our acquisition of HybriGene,
LLC. We will not receive any additional cash consideration from the issuance of
these shares.
-10-
<PAGE>
DIVIDEND POLICY
We have never declared or paid any dividends on our common stock. We
currently intend to retain any earnings for use in the operation and expansion
of our business and do not anticipate paying any dividends on the common stock
for the foreseeable future. Our revolving credit facility prohibits the payment
of cash dividends without the lenders' approval.
PRICE RANGE OF COMMON STOCK
Our common stock has traded on the Nasdaq National Market since February
14, 1997, under the symbol "ABTX."
The following table sets forth the high and low selling prices for the
common stock for each quarter in Fiscal 1998 and Fiscal 1999, on the Nasdaq
National Market.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
FISCAL 1998
July 1, 1997-September 30, 1997........ $10 11/16 $ 5 3/4
October 1, 1997-December 31, 1997...... $17 3/8 $ 6 3/4
January 1, 1998-March 31, 1998......... $19 6/16 $12 5/8
April 1, 1998-June 30, 1998............ $29 1/2 $13 1/8
FISCAL 1999
July 1, 1998-September 30, 1998........ $27 3/4 $ 7 5/8
October 1, 1998-December 31, 1998...... $17 7/8 $ 7 3/4
January 1, 1999-March 31, 1999......... $17 7/8 $ 3 11/16
April 1, 1999-June 30, 1999............ $ 8 1/4 $ 5
FISCAL 2000
July 1, 1999-September 30, 1999........ $ 6 3/8 $ 3 9/16
October 1, 1999-October 25, 1999....... $ 4 15/32 $ 3
</TABLE>
As of September 30, 1999, the Company had 479 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.
-11-
<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 49,678,281 shares were issued and outstanding as
of October 25, 1999. All of the outstanding shares of our common stock are duly
authorized, validly issued, fully paid and non-assessable. Holders of shares of
our common stock are entitled to one vote for each share held of record on all
matters to be voted on by shareholders. There are no preemptive, subscription,
conversion or redemption rights pertaining to our common stock. Holders of
shares of our common stock are entitled to receive dividends as they are
declared on common stock by the Board of Directors out of funds legally
available therefor and to share ratably in the assets available upon liquidation
subject to rights of creditors and any shares of preferred stock. The holders of
shares of our common stock do not have the right to cumulate their votes in the
election of directors and, accordingly the holders of more than 50% of all the
our common stock outstanding are able to elect all directors.
PREFERRED STOCK
ABT is authorized to issue 10,000,000 shares of preferred stock, $.001 par
value per share. As of the date hereof, we had no shares of preferred stock
issued and outstanding.
The preferred stock may be divided by the Board of Directors from time to
time into one or more series. The Board of Directors is authorized to determine
the rights, preferences, privileges and restrictions, including the dividend
rights, conversion rights, voting rights, terms of redemption (including sinking
fund provisions, if any) and liquidation preferences, of any series of preferred
stock and to fix the number of shares of any series without any further vote or
action by stockholders. At present, we have no plans, proposals, commitments or
arrangements to issue any shares of preferred stock. Our Certificate of
Incorporation authorizes the issuance of preferred stock with designations,
rights, and preferences as may be determined from time to time by the Board of
Directors. Accordingly, the Board of Directors is empowered, without stockholder
approval, to issue preferred stock with dividend, liquidation, conversion,
voting or other rights that could adversely affect the voting power or other
rights of the holders of the common stock. Although the preferred stock may be
used for any lawful purpose, we have agreed not to use it as an anti-takeover
device that could be utilized as a method of discouraging, delaying or
preventing a change in control of the company without the approval of our
stockholders.
WARRANTS
On December 30, 1998 and January 5, 1999, we issued 1,703,000 warrants to
purchase shares of our common stock. These warrants were issued along with our
5% convertible debentures to six qualified institutional buyers and accredited
investors in private placements. These warrants were purchased for $1.00 and are
exercisable at $15.00 per share for three years commencing on their issue dates.
The warrants are subject to mandatory conversion on five prior business days
notice if the closing sale price of our common stock exceeds $25 per share for
20 trading days out of any 30 consecutive trading days ending within l5 days of
our mailing notice of the conversion, provided there is a current prospectus
covering the underlying common stock. The shares of ABT common stock issuable
upon exercise of the warrants have been registered for resale under a separate
registration statement. The holders of the warrants and ABT have agreed not to
exercise warrants if the holder would then own in excess of 4.9% of ABT
outstanding common stock following the exercise of the warrant.
-12-
<PAGE>
On December 4, 1998, we issued 600,000 warrants to purchase our common
stock to three qualified institutional buyers and accredited investors in
private placements of units. Each unit was sold for $13.50 and consisted of one
share of common stock and one warrant. The warrants are exercisable at a price
of $15.00 per share for three years commencing on their date of issuance. The
warrants are subject to mandatory conversion on five prior business days notice
if the closing sale price of our common stock exceeds $25.00 per share for 20
trading days out of any 30 consecutive trading days ending within 15 days of our
mailing notice of the conversion. The shares of common stock issuable upon
exercise of the warrants have been registered for resale under a separate
registration statement.
On August 28, 1998, we issued 886,410 warrants to purchase our common stock
to five qualified institutional buyers and accredited investors in private
placements. The warrants were sold for $2.00 per Warrant and are exercisable at
$12.00 per share for three years commencing on their date of issuance. The
warrants are subject to redemption at $.01 per warrant on five prior business
days' notice if the closing sale price of the Company's common stock exceeds
$19.50 per share for 20 trading days out of any 30 consecutive trading day
period ending within 15 days of our mailing notice of the conversion and the
holder fails to exercise the warrant. As of the date of this prospectus
supplement, 556,410 of these warrants have been tendered back to us with the
exercise price in exchange for shares of common stock registered as part of our
Universal Shelf Registration Statement (No. 333-61127.) The remaining 330,000
shares of common stock issuable upon exercise of the warrants have been
registered for resale under a separate registration statement.
On May 4, 1998 and May 13, 1998, respectively, we issued 241,600 warrants
and 344,900 redeemable warrants to purchase shares of our common stock. These
warrants were issued to six qualified institutional buyers and accredited
investors in private placements of units. Each unit was sold for $29.00 and
consisted of two shares of common stock and one warrant. These warrants are
exercisable at a price of $17.50 per share for three years commencing on their
respective dates of issuance. The redeemable warrants are subject to redemption
at $.01 per warrant on five prior business days' notice if the closing sale
price of our common stock exceeds $25.00 per share for 15 consecutive trading
days and the Company notifies the holder it intends to force a mandatory
conversion of the warrants and the holder fails to exercise the warrant. The
shares of common stock issuable upon exercise of these warrants have been
registered for resale under a separate registration statement.
We have the right to reduce the exercise price and/or extend the exercise
period at its discretion, and/or make other inducements to warrant holders to
encourage early exercise of warrants.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for our common stock is Corporate Stock
Transfer, Inc., Denver, Colorado.
PLAN OF DISTRIBUTION
All of the shares being offered by this prospectus supplement are being
issued by ABT to Thomas K. Hodges and Halina K. Hodges under a stock purchase
agreement dated January 22, 1999. The shares have been registered on ABT's
Registration Statement on Form S-4 (No. 333-61097) of which this prospectus
supplement forms a part. Pursuant to the terms of the stock purchase agreement,
we will pay all expenses incident to this issuance.
COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the issuer
pursuant to the foregoing provisions or otherwise, we have been advised that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
LEGAL MATTERS
The validity of the shares offered hereby has been passed upon by Snow
Becker Krauss P.C., 605 Third Avenue, New York, New York 10158. Snow Becker
Krauss P.C. owns 43,823 shares of our common stock, and individual members of
the firm own additional shares of common stock.
-13-
<PAGE>
EXPERTS
The consolidated financial statements and schedule of AgriBioTech, Inc. as
of June 30, 1999 and 1998 and for each of the years in the three-year period
ended June 30, 1999 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 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 Budd Seed, Inc. as of November 30, 1997 and
December 31, 1996 and 1995 and for the ten-month period ended November 30, 1997
and the years ended December 31, 1996 and 1995 have been incorporated by
reference herein in reliance upon the report of Cannon & Company, independent
certified public accountants, incorporated by reference herein and upon the
authority of said firm as experts in accounting and auditing.
The financial statements of SeedBiotics, L.L.C., as of December 31, 1998
and for the year then ended are incorporated by reference in reliance on the
report of Ripley Doorn & Company, P.L.L.C. incorporated by reference herein and
upon the authority of said firm as experts in accounting and auditing.
-14-
