<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange
Act of 1934
Date of Report: December 8, 2000
(Date of earliest event reported)
EXELIXIS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-30235 04-3257395
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
170 Harbor Way
P.O. Box 511
South San Francisco, CA 94083
(Address of principal executive offices, including zip code)
(650) 837-7000
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) Effective December 8, 2000, Athens Acquisition Corp., a Delaware corporation
("Merger Sub") and a wholly-owned subsidiary of Exelixis, Inc., a Delaware
corporation ("Exelixis" or the "Company"), was merged with and into (the
"Merger") Agritope, Inc., a Delaware corporation ("Agritope"). The Merger was
accomplished pursuant to an Agreement and Plan of Merger and Reorganization,
dated as of September 7, 2000, among Exelixis, Agritope and Merger Sub (the
"Merger Agreement"). The Merger occurred following the approval of the Merger
Agreement by the stockholders of Agritope at a special meeting of stockholders
held on December 8, 2000 and satisfaction of certain other closing conditions.
Pursuant to the Merger Agreement, each then-outstanding share of Agritope
capital stock was converted into the right to receive 0.35 of a share of
Exelixis common stock (the "Exchange Ratio"), with Agritope surviving as a
wholly-owned subsidiary of Exelixis and renamed Exelixis Plant Sciences, Inc.
Approximately 2.6 million shares of Exelixis common stock will be issued to
former Agritope stockholders and holders of rights exercisable for shares of
stock of Agritope in exchange for the acquisition by Exelixis of all outstanding
Agritope capital stock. Holders of outstanding Agritope common stock and Series
A preferred stock will receive approximately 1.7 million shares of Exelixis
common stock. Unexpired and unexercised options and warrants to purchase shares
of Agritope capital stock will be assumed by Exelixis pursuant to the Merger and
converted into fully vested options and warrants to purchase approximately
890,000 shares of Exelixis common stock. Pursuant to the Merger Agreement, the
Exchange Ratio was calculated by dividing $14.00 by the average closing price of
Exelixis common stock for the 20 trading days ending on, and including, the
fifth trading day prior to the closing of the Merger, subject to the issuance of
a minimum of 0.28 of a share and a maximum of 0.35 of a share of Exelixis common
stock for each outstanding share of Agritope capital stock. The Exchange Ratio
was determined in arms' length negotiations and took account of several factors
concerning the relative valuations of Agritope and Exelixis. The Agritope board
of directors received an opinion from its financial advisor that the merger
consideration to be received by holders of Agritope common stock pursuant to the
Merger Agreement was fair to the holders of Agritope common stock from a
financial point of view. The Merger is intended to qualify as a tax-free
reorganization under the Internal Revenue Code of 1986, as amended, and will be
accounted for using the purchase method of accounting.
The shares issued to Agritope stockholders were registered pursuant to a
Registration Statement on Form S-4 (No. 333-47710), as amended, pursuant to the
Securities Act of 1933, as amended, which was declared effective by the
Securities Exchange Commission ("SEC") on October 31, 2000 (the "Form S-4").
The description contained in this Item 2 of the transactions consummated
pursuant to the terms and conditions of the Merger Agreement is qualified in its
entirety by reference to the full text of the Merger Agreement, a copy of which
is attached as Appendix A to the Form S-4. The press release issued by the
Registrant on December 8, 2000 concerning the closing of this acquisition was
filed with the SEC on December 8, 2000 on Form 425 and is incorporated herein by
reference. For a more detailed description of the Merger and the Merger
Agreement, reference is made to the Form S-4.
(b) Agritope is an agricultural biotechnology company that develops improved
plant products and provides technology to the agricultural industry. Agritope is
comprised of two business segments: Agritope Research and Development and a
majority-owned subsidiary, Vinifera, Inc., which propagates and markets
grapevines to the U.S. premium wine grape production industry.
2
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AGRITOPE, INC. AND SUBSIDIARIES
<TABLE>
<S> <C>
Reports of Independent Accountants........................................................................... 3
Consolidated Balance Sheets.................................................................................. 4
Consolidated Statements of Operations........................................................................ 5
Consolidated Statements of Changes in Stockholders' Equity................................................... 6
Consolidated Statements of Cash Flows........................................................................ 7
Notes to Consolidated Financial Statements.................................................................... 8
</TABLE>
AGRITOPE, INC. AND SUBSIDIARIES
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Agritope, Inc.
We have audited the accompanying consolidated balance sheets of Agritope, Inc.
(a Delaware corporation) and subsidiaries as of September 30, 2000 and 1999, and
the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the three years in the period ended September
30, 2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Agritope, Inc. and subsidiaries as of September 30, 2000 and 1999, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended September 30, 2000 in conformity with accounting
principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
Portland, Oregon
December 19, 2000
3
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 2000 1999
ASSETS
<S> <C> <C>
Current assets
Cash and cash equivalents....................................... $1,373,333 $4,203,937
Trade accounts receivable, net.................................. 713,001 355,187
Other accounts receivable....................................... 151,599 165,480
Due from affiliate.............................................. -- 119,088
Inventories..................................................... 4,439,836 5,053,888
Prepaid expenses................................................ 111,138 73,440
----------- -----------
Total current assets............................................ 6,788,907 9,971,020
Property and equipment, net..................................... 2,881,909 3,511,824
Patents and proprietary technology, net......................... 2,051,041 1,945,586
Other assets and deposits ...................................... 42,752 42,752
----------- -----------
$11,764,609 $15,471,182
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable................................................ $807,837 $642,178
Due to affiliate, net........................................... 123,860 --
Revolving line of credit........................................ 1,484,000 1,463,000
Advances from minority shareholders of subsidiary............... 868,062 180,616
Current portion of installment notes payable.................... 4,576 4,576
Current portion of lease liability.............................. 3,000 140,935
Deposits on customer orders..................................... 554,295 1,173,303
Salaries, benefits and other accrued liabilities................ 1,542,091 580,028
----------- -----------
Total current liabilities....................................... 5,387,721 4,184,636
Long-term portion of installment notes payable.................. 1,378 5,465
Minority interest............................................... 1,534,361 1,958,538
Commitments and contingencies
Stockholders' equity
Preferred stock, par value $.01
10,000,000 shares authorized; 714,285 shares
issued and outstanding........................................ 7,143 7,143
Common stock, par value $.01
30,000,000 shares authorized; 4,151,999 shares and 4,070,612
issued and outstanding........................................ 41,520 40,706
Additional paid-in capital...................................... 60,930,554 60,369,181
Accumulated deficit............................................. (56,138,068) (51,094,487)
----------- -----------
4,841,149 9,322,543
$11,764,609 $15,471,182
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30, 2000 1999 1998
<S> <C> <C> <C>
Revenues
Product sales .................................. $ 4,250,268 $ 2,503,377 $ 2,574,976
Government research grants ..................... 423,254 313,876 224,688
Research projects with strategic partners ...... 360,323 497,800 --
Research projects with affiliate ............... 2,305,754 236,416 --
------------ ------------ ------------
7,339,599 3,551,469 2,799,664
Costs and expenses
Product costs .................................. 4,498,832 2,333,673 3,414,293
Research and development expenses .............. 4,397,649 3,105,183 2,471,374
Selling, general and administrative expenses ... 3,735,319 3,685,291 3,138,437
------------ ------------ ------------
12,631,800 9,124,147 9,024,104
Loss from operations ........................... (5,292,201) (5,572,678) (6,224,440)
Other income (expense), net
Interest income ................................ 120,994 102,742 224,350
Interest expense ............................... (205,561) (21,446) (1,248)
Gain on sale of stock of subsidiary ............ -- 289,603 --
Gain on sale of investment in affiliated company 124,670 -- --
Merger related costs ........................... (503,488) -- --
Other, net ..................................... 42,611 166,365 (125,052)
------------ ------------ ------------
(420,774) 537,264 98,050
Minority interest in subsidiary net loss ....... 669,394 360,008 882,423
------------ ------------ ------------
Net loss ....................................... $ (5,043,581) $ (4,675,406) $ (5,243,967)
Net loss per share (basic and diluted) ......... $ (1.23) $ (1.15) $ (1.42)
Weighted number of shares outstanding used
in net loss per share ....................... 4,115,916 4,061,474 3,705,490
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
PREFERRED COMMON ADDITIONAL ACCUMULATED
STOCK STOCK PAID-IN CAPITAL DEFICIT
<S> <C> <C> <C> <C>
Balances at September 30, 1997 ............. $ -- $ 26,908 $ 45,910,932 $(41,175,114)
Compensation expense for
Stock option grants ....................... -- -- 390,420 --
Common stock issued as compensation-
15,670 shares ............................ -- 157 40,345 --
Common stock issued in private placement-
1,343,704 shares ......................... -- 13,437 10,322,333 --
Preferred stock issued in private placement-
214,285 shares ........................... 2,143 -- 1,497,852 --
Equity issuance costs ...................... -- -- (2,023,347) --
Cash contribution from Epitope, Inc. ....... -- -- 1,248,140 --
Net loss for the year ...................... -- -- -- (5,243,967)
------------ ------------ ------------ ------------
Balances at September 30, 1998 ............. 2,143 40,502 57,386,675 (46,419,081)
Compensation expense for
Stock option grants ...................... -- -- 457,861 --
Common stock issued as compensation-
20,462 shares ............................ -- 204 40,953 --
Preferred stock issued in private placement-
500,000 shares ........................... 5,000 -- 2,615,000 --
Equity issuance costs ...................... -- -- (131,308) --
Net loss for the year ...................... -- -- -- (4,675,406)
------------ ------------ ------------ ------------
Balances at September 30, 1999 ............. 7,143 40,706 60,369,181 (51,094,487)
Common stock issued as compensation -
71,242 shares ............................. -- 713 119,731 --
Compensation expense for stock option grants -- -- 420,378 --
Common stock issued upon exercise of stock
Options - 10,145 shares ................... -- 101 31,564 --
Equity issuance costs ...................... -- -- (10,300) --
Net loss for the year ...................... -- -- -- (5,043,581)
------------ ------------ ------------ ------------
Balances at September 30, 2000 ............. $ 7,143 $ 41,520 $ 60,930,554 $(56,138,068)
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
AGRITOPE, INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30, 2000 1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss............................................................. $(5,043,581) $(4,675,406) $(5,243,967)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization ....................................... 1,329,086 1,307,937 951,209
Loss on sale of property............................................. -- 3,637 54
Gain on sale of equity in subsidiary................................. -- (289,603) --
Gain on sale of investment in affiliated company..................... (124,670) -- --
Compensation expense for stock awards................................ 120,444 41,157 40,502
Compensation expense for stock option grants of subsidiary........... 47,717 119,103 --
Compensation expense for stock option grants......................... 420,378 457,861 390,420
Minority interest in subsidiary net loss............................. (669,394) (360,008) (882,423)
Imputed interest expense on minority shareholders' advances.......... 60,000 -- --
(Increase) decrease in accounts receivable and other receivables..... (343,933) 637,883 (535,637)
(Increase) in due from/to affiliate.................................. 242,948 (119,088) --
(Increase) decrease in inventories................................... 614,052 (1,764,716) (1,207,877)
(Increase) decrease in prepaid expenses.............................. (37,698) 98,756 104,028
(Increase) decrease in other assets and deposits..................... -- (14,233) (1,722)
Increase in accounts payable and accrued liabilities................. 1,127,722 545,955 86,966
Increase (decrease) in deposits on customer orders................... (619,008) 573,359 210,013
Other................................................................ -- -- 162,647
------------ ----------------- -----------
Net cash used in operating activities................................ (2,875,937) (3,437,406) (5,925,787)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment.................................. (374,567) (446,730) (2,126,906)
Proceeds from sale of property....................................... -- 900 11,033
Proceeds from sale of equity of subsidiary........................... 137,500 873,836 --
Proceeds from sale of investment in affiliated company............... 124,670 -- --
Investment in affiliated companies................................... -- -- 70,000
Expenditures for patents and proprietary technology.................. (430,059) (485,352) (646,712)
------------ ----------------- -----------
Net cash used in investing activities................................ (542,456) (57,346) (2,692,585)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt................................. (4,087) (4,452) (4,331)
Payments on long-term lease liability................................ (137,935) (333,254) (317,920)
Net proceeds from revolving line-of-credit........................... 21,000 1,463,000 --
Advances from minority shareholders of subsidiary.................... 687,446 180,616 --
Proceeds from issuance of stock, net................................. 21,365 2,488,692 9,812,418
Minority interest investment in subsidiary........................... -- -- 1,779,768
Cash from Epitope, Inc............................................... -- -- 1,248,140
------------ ----------------- -----------
Net cash provided by financing activities............................ 587,789 3,794,602 12,518,075
Net (decrease) increase in cash and cash equivalents................. (2,830,604) 299,850 3,899,703
Cash and cash equivalents at beginning of period..................... 4,203,937 3,904,087 4,384
------------ ----------------- -----------
Cash and cash equivalents at end of period........................... $1,373,333 $4,203,937 $3,904,087
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 THE COMPANY
Agritope, Inc. (the "Company" or "Agritope") is an Oregon-based agricultural
biotechnology company that develops improved plant products and provides
technology to the agricultural industry. Its 57% owned subsidiary, Vinifera,
Inc. ("Vinifera"), offers superior grapevine plants to the premium wine industry
together with disease testing and elimination services. Agrinomics LLC
("Agrinomics") is a 50% owned subsidiary that conducts a gene discovery program.
Superior Tomato Associates, LLC ("Superior Tomato") is a 66-2/3% owned
subsidiary formed to develop and market longer-lasting tomatoes. Prior to
December 30, 1997, Agritope was a wholly-owned subsidiary of Epitope, Inc.
("Epitope"), an Oregon corporation engaged in the development and marketing of
medical diagnostic products.
On September 7, 2000, the Company entered into an agreement under which the
Company would merge with and into a subsidiary of Exelixis, Inc. On December 8,
2000, the stockholders of the Company approved the transaction, and the Company
became a wholly-owned subsidiary of Exelixis, Inc., renamed Exelixis Plant
Sciences, Inc. Stockholders of the Company will receive 0.35 of a share of
common stock of Exelixis, Inc. for each share of capital stock of the Company
held on December 8, 2000. In connection with the merger, the Company incurred
prior to September 30, 2000, $503,488 of merger related costs which were
expensed and included in "Other income (expense), net" in the accompanying
statements of operations.
BASIS OF PRESENTATION. The accompanying consolidated financial statements
include the assets, liabilities, revenues and expenses of Agritope and its
majority owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation. The Agrinomics subsidiary is
accounted for using the equity method.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS. For purposes of the consolidated balance sheets and
statements of cash flows, all highly liquid investments with maturities at time
of purchase of three months or less are considered to be cash equivalents.
INVENTORIES. Inventories, consisting principally of growing grapevine plants at
Vinifera, are recorded at the lower of average cost or market. Average cost
includes all direct and indirect costs attributable to the growing grapevine
plants. Inventory is summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 2000 1999
<S> <C> <C>
Operating supplies ....................................... $185,657 $ 143,757
Work-in-process .......................................... 3,052,009 1,437,617
Finished goods ........................................... 1,202,170 3,472,514
--------- ---------
$4,439,836 $ 5,053,888
</TABLE>
DEPRECIATION AND CAPITALIZATION POLICIES. Property and equipment are stated at
cost less accumulated depreciation. Expenditures for repairs and maintenance are
charged to operating expense as incurred. Expenditures for renewals and
betterments are capitalized. Depreciation and amortization of property and
equipment are calculated primarily under the straight-line method over the
estimated useful lives of the related assets (three to seven years). Leasehold
improvements are amortized over the shorter of estimated useful lives or the
terms of the related leases. When assets are sold or otherwise disposed of, cost
and related accumulated depreciation or amortization are removed from the
accounts and any resulting gain or loss is included in results of operations.
8
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
ACCOUNTING FOR LONG-LIVED ASSETS. The Company reviews its long-lived assets for
impairment periodically or as events or circumstances indicate that the carrying
amount of long-lived assets may not be recoverable. If the estimated net cash
flows are less than the carrying amount of the long-lived assets, the Company
recognizes an impairment loss in an amount necessary to write down long-lived
assets to fair value as determined from expected discounted future cash flows.
This accounting policy is consistent with Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of."
PATENTS AND PROPRIETARY TECHNOLOGY. Direct costs associated with patent
submissions and acquired technology are capitalized and amortized over their
minimum estimated economic useful lives, generally five years. Amortization and
accumulated amortization are summarized as follows:
<TABLE>
<CAPTION>
2000 1999 1998
<S> <C> <C> <C>
Amortization for the year............... $324,604 $276,764 $ 186,406
Accumulated amortization................ 1,020,796 696,192 419,428
</TABLE>
FAIR VALUE OF
FINANCIAL INSTRUMENTS. The carrying amounts for cash equivalents,
accounts receivable, accounts payable and revolving line of credit approximate
fair value because of the immediate or short-term maturity of these financial
instruments. The carrying amount for installment notes payable approximates fair
value because the related interest rates are comparable to rates currently
available to the Company for debt with similar terms and maturities. The Company
does not have any derivative financial instruments.
REVENUE RECOGNITION. Product sales are recognized when the related products are
shipped and title passes. Grant and contract revenues include funds received
under research and development agreements with various entities. These grants
and contracts generally provide for progress payments as expenses are incurred
and certain research milestones are achieved. Revenue related to such grants and
contracts is recognized as research milestones are achieved. Accounts receivable
are stated net of an allowance for doubtful accounts of $25,105 as of September
30, 2000 and $24,054 as of September 30, 1999.
MAJOR CUSTOMER. No single customer accounted for more than 5% of revenue during
the years ended September 30, 2000 and 1999. For the year ended September 30,
1998, one customer purchased $829,578 of grapevine plants from Vinifera,
representing 32.2% of Vinifera's revenue. See also Note 8 for revenues with
strategic partners and an affiliate.
RESEARCH AND DEVELOPMENT. Research and development expenditures are comprised of
those costs associated with Agritope's ongoing research and development
activities to develop superior new plants. Expenditures for research and
development also include costs incurred under contracts to develop certain
products, including those contracts resulting in grant and contract revenues.
All research and development costs are expensed as incurred.
INCOME TAXES. The Company accounts for certain revenue and expense items
differently for income tax purposes than for financial reporting purposes. These
differences arise principally from methods used in accounting for stock options
and depreciation rates. Deferred tax assets and liabilities are recognized based
on temporary differences between the financial statement and the tax bases of
assets and liabilities using enacted tax rates in effect for the year in which
the temporary differences are expected to reverse.
9
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
STOCK-BASED COMPENSATION. In October 1995, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"). SFAS 123 allows companies which have
stock-based compensation arrangements with employees to adopt a fair-value basis
of accounting for stock options and other equity instruments or to continue to
apply the existing accounting rules under Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), but with
additional financial statement disclosure. The Company has elected to apply the
existing accounting rules under APB 25 to its stock-based compensation plans.
See Note 6.
NET LOSS PER SHARE. Basic earnings per share ("EPS") and diluted EPS are
computed using the methods prescribed by Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS 128"). Basic EPS is calculated
using the weighted-average number of common shares outstanding for the period
and diluted EPS is computed using the weighted-average number of common shares
and dilutive common equivalent shares outstanding. Basic and diluted EPS are the
same for all periods presented since the Company was in a loss position in all
periods. The following potentially dilutive securities are excluded from net
loss per share calculations as their effect would have been antidilutive:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30 2000 1999 1998
<S> <C> <C> <C>
Options to purchase common stock........ 1,837,843 1,708,103 1,255,264
Warrants to purchase common stock....... 708,333 708,333 583,333
Preferred stock convertible into common stock... 714,285 714,285 214,285
---------- --------- ---------
3,260,461 3,130,721 2,052,882
</TABLE>
SUPPLEMENTAL CASH FLOW INFORMATION.
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30 2000 1999 1998
<S> <C> <C> <C>
Cash paid for interest ............. $145,561 $ 21,446 $ 1,248
Non-cash financing activity:
Fair value of warrants issued in
connection with private placements -- 120,000 929,842
</TABLE>
MANAGEMENT ESTIMATES. The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates relating to assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could vary from these estimates.
RECLASSIFICATIONS. Reclassifications have been made to prior year amounts to
conform to current year presentation.
NOTE 3 INVESTMENT IN AFFILIATED COMPANIES
In June 2000, Agritope received $124,670 from the sale of its interest in UAF,
LP, resulting in a gain of $124,670 which is included under the caption "Other
income (expense), net" in the accompanying consolidated statements of operations
for 2000.
In June 1998, Vinifera accepted an offer to sell its minority interest in
Vinifera Sudamericana, S.A. to the majority shareholder for $70,000. The
resultant non-cash loss on disposition of $130,000 is included in "Other, net"
under the caption "Other income (expense), net" in the accompanying consolidated
statements of operations for 1998.
10
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 PROPERTY AND EQUIPMENT
Property and equipment are summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 2000 1999
<S> <C> <C>
Land........................................................ $ 30,020 $ 30,020
Grapevine propagation blocks................................ 1,800,491 1,723,317
Production equipment........................................ 121,400 120,031
Buildings and improvements.................................. 2,486,994 2,483,556
Research and development laboratory equipment............... 896,271 840,259
Office furniture and equipment.............................. 918,644 795,553
Leasehold improvements...................................... 285,165 317,016
Construction in progress.................................... 275,318 136,589
----------- ----------
6,814,303 6,446,341
Less accumulated depreciation and amortization.............. (3,932,394) (2,934,517)
----------- ----------
$2,881,909 $ 3,511,824
</TABLE>
NOTE 5 BORROWING ARRANGEMENTS
ADVANCES TO VINIFERA FROM MINORITY SHAREHOLDERS. In September 1999, certain
minority shareholders of Vinifera agreed to advance $519,000, interest-free, to
Vinifera. The amounts to be advanced are equal to the second installment payable
by the shareholders to Agritope under certain stock purchase agreements. They
are to be repaid to the shareholders on or before the due date for the second
installment, which Agritope has agreed to extend to February 1, 2001. The
advances are included in current liabilities in the accompanying financial
statements. The first advances, totaling $180,616 were made in 1999. The
remaining advances were made in October 1999 of fiscal year 2000. See Note 6 for
further details with respect to the stock purchase agreements.
In 2000, two minority shareholders, including the chief executive officer of
Vinifera, agreed to advance up to $600,000, interest-free, to Vinifera, to be
repaid from proceeds of any future equity financing. As of September 30, 2000,
$349,062 has been advanced related to these agreements.
As of September 30, 2000, $868,062 of advances from minority shareholders were
outstanding and are reflected as current liabilities in the accompanying balance
sheet. During 2000, the Company recorded imputed interest expense of $60,000
related to advances from minority shareholders.
REVOLVING LINE OF CREDIT. In June 1999, Vinifera borrowed $1.1 million from a
commercial bank under a revolving line of credit. The proceeds were used to
finance inventory production and repay a $1 million line of credit advanced by
Agritope. The line provides for borrowings of up to $1.5 million, of which
$1,484,000 and $1,463,000 was outstanding as of September 30, 2000 and 1999,
respectively. It is secured by Vinifera's inventories and accounts receivable
and is guaranteed by one of Vinifera's minority shareholders. The line bears
interest at the prime rate (9.5% as of September 30, 2000). It expires on
February 1, 2001.
11
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 STOCKHOLDERS' EQUITY
VINIFERA COMMON STOCK. In January 2000, Vinifera entered into a stock purchase
agreement with a certain minority shareholder. Under the terms of the agreement,
50,000 shares of Vinifera stock were issued and sold to the purchaser for
$137,500. The transaction did not materially change Agritope's percentage
ownership of 57%.
In June 1999, Agritope entered into stock purchase agreements with certain
minority shareholders of Vinifera pursuant to which minority ownership of
Vinifera will increase from 36% to approximately 50% over a three-year period.
In a related transaction, also in June 1999, Vinifera repaid the $1 million
balance on its working capital line of credit to Agritope and replaced the line
with a $1.5 million revolving bank line of credit that is guaranteed by a
minority shareholder. In July 1999, the minority shareholders made the first
purchases under the stock purchase agreements. Agritope received proceeds
totaling $873,836 and its ownership interest in Vinifera was reduced from 64% to
57%. The gain on the first purchases amounted to $289,603 and is included in
Other income (expense).
In June 1998, Vinifera sold 898,269 shares of common stock to certain minority
shareholders for $1.8 million. In connection with the terms of the related stock
purchase agreements, Agritope canceled $4 million of working capital loans to
Vinifera in exchange for 2 million shares of common stock of Vinifera. The
transactions increased Agritope's percentage ownership from 61% to 64%.
WARRANTS TO PURCHASE COMMON STOCK. As of September 30, 2000, the following
warrants to purchase common stock were outstanding:
<TABLE>
<CAPTION>
DATE OF ISSUANCE SHARES EXERCISE PRICE EXPIRATION DATE
<S> <C> <C> <C>
September 24, 1999......... 125,000 $ 7.00 September 30, 2004
April 30, 1998............. 83,333 $ 7.34 December 30, 2000
December 30, 1997.......... 500,000 $ 7.00 December 30, 2000
-------
708,333
</TABLE>
SERIES A PREFERRED STOCK. Agritope's board of directors has designated 1 million
shares of Agritope preferred stock, par value $.01 per share, as Series A
Preferred Stock ("Series A Preferred"). The Series A Preferred has preemptive
rights and the right to elect a director, but otherwise has rights substantially
equivalent to Agritope common stock and is convertible at any time into shares
of Agritope common stock on a share-for-share basis, subject to adjustment upon
the occurrence of certain events. In connection with a research agreement,
Vilmorin Clause & Cie ("Vilmorin") purchased 214,285 shares of Series A
Preferred in 1998 at a price of $7 per share. See Note 8.
In September 1999, the Company completed a $2.5 million private placement of
500,000 shares of Series A Preferred Stock at a price of $5 per share. Vilmorin
purchased the shares. For every four shares of Series A Stock purchased in the
private placement, Vilmorin also received a warrant to purchase one additional
share of Series A Stock at a price of $7 per share at any time over the next
five years. The fair value of such warrants, $120,000, is included in "Preferred
stock issued in private placement" with a corresponding charge to "Equity
issuance costs" in the accompanying statement of stockholders equity. Each share
of Series A Stock is convertible into one share of Agritope Common Stock.
Vilmorin subsequently sold 150,000 shares of Series A Stock together with the
related warrants to an Israeli seed company, Hazera Quality Seeds
Ltd.("Hazera"), for $750,000. After completion of the sales, Vilmorin owned
564,285 shares of Series A Stock, or 11.8% of the outstanding capital stock of
Agritope. Hazera's holdings amounted to 3.1% of Agritope's outstanding capital
stock.
12
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 STOCKHOLDERS' EQUITY, CONTINUED
STOCK AWARD PLAN. In November 1997, the Agritope, Inc. 1997 Stock Award Plan
(the "Award Plan") was adopted by Agritope's board of directors and approved by
Epitope as Agritope's sole stockholder. The Award Plan provides for stock-based
awards to employees, outside directors, members of scientific advisory boards
and consultants. Awards that may be granted under the Award Plan include
incentive stock options, nonqualified stock options, stock appreciation rights,
restricted awards, performance awards and other stock-based awards. The Award
Plan provides for the issuance of a total of up to 2,000,000 shares of Agritope
common stock, subject to adjustment for changes in capitalization. Options for
162,157 shares were available for future grants under the Award Plan as of
September 30, 2000.
The following tables summarizes Award Plan activity (shares and weighted average
prices):
<TABLE>
<CAPTION>
2000 1999 1998
SHARES PRICE SHARES PRICE SHARES PRICE
<S> <C> <C> <C> <C> <C>
Outstanding, beginning of period ... 1,708,103 $4.70 1,255,264 $ 5.54 -- $ --
Granted ............................ 250,525 4.64 509,439 2.80 1,422,664 5.51
Exercised .......................... (10,145) 3.12 -- -- -- --
Canceled ........................... (110,640) 5.18 (56,600) 5.91 (167,400) 5.31
---------- ---------- ----------
Outstanding, end of period ......... 1,837,843 4.67 1,708,103 4.70 1,255,264 5.54
Exercisable......................... 738,302 5.06 369,445 5.38 65,000 5.07
Weighted average fair value of
options granted................... 1.78 0.90 3.68
</TABLE>
The amounts granted above include options granted to consultants in 1999 and
1998 covering 10,000 and 65,000 shares, respectively, at average exercise prices
of $2.00 and $5.07, respectively. In accordance with SFAS 123, Agritope
recognized compensation expense for these awards in 1999 and 1998 totaling
$7,500 and $81,000, respectively, based on the fair value of the options as
determined using the Black-Scholes method of valuation. With respect to options
granted in 1999 and 1998 to participants other than consultants, Agritope will
recognize compensation expense of $22,500 and $1,902,065, respectively,
representing discounts from market prices on date of grant, which will be
amortized over the vesting period of the options, in accordance with APB 25. No
options granted in 2000 were granted below fair market value at the date of the
grant. Amortization in 2000, 1999 and 1998 amounted to $420,378, $450,361 and
$309,420, respectively.
The following table summarizes information about stock options outstanding as of
September 30, 2000:
<TABLE>
<CAPTION>
REMAINING WEIGHTED WEIGHTED
SHARES CONTRACT LIFE AVERAGE SHARES AVERAGE
EXERCISE PRICE OUTSTANDING (YEARS) EXERCISE PRICE EXERCISABLE EXERCISE PRICE
<S> <C> <C> <C> <C> <C>
$2.00 to $3.23.... 457,079 8.34 $ 2.16 81,589 $ 2.03
$5.00 to $5.70.... 1,159,164 7.00 5.24 580,234 5.23
$6.58 to $7.00.... 221,600 8.15 6.88 76,479 7.00
---------- --------
1,837,843 7.47 4.67 738,302 5.06
</TABLE>
EMPLOYEE STOCK PURCHASE PLAN. Also in November 1997, Agritope's board of
directors and Epitope, as Agritope's sole stockholder, approved the Agritope,
Inc. 1997 Employee Stock Purchase Plan (the "Purchase Plan"), covering up to
250,000 shares of Agritope common stock which Agritope employees may subscribe
to purchase during offering periods to be established from time to time. The
Compensation Committee of Agritope's board of directors was granted authority to
determine the number of offering periods, the number of shares offered and the
length of each period. No more than three offering periods (other than Special
Offering Subscriptions as defined in the Purchase Plan) may be set during each
fiscal year. The purchase price for stock purchased under the Purchase Plan is
the lesser of 85% of the fair market value of a share on the last trading day
before the offering date established for the offering period and 85% of the fair
market value of a share on the date the purchase period ends (or any earlier
purchase
13
<PAGE>
date provided for in the Purchase Plan). As of September 30, 1999, employees had
subscribed to purchase 43,053 shares over a 24-month period at an initial price
of $0.93 per share. During the year ended September 30, 1999, 754 shares, with a
weighted-average fair market value of $2.93 per share, were issued at a price of
$0.93 per share. No offerings were made in the year ended September 30, 2000. As
of September 30, 2000, employees had subscribed to purchase 27,586 shares over a
24-month period at an initial price of $0.93 per share. During the year ended
September 30, 2000, 11,107 shares, with a weighted-average fair market value of
$7.12 per share, were issued at a price of $0.93 per share and subscriptions
equal to 4,360 shares were cancelled due to employee terminations.
VINIFERA STOCK AWARD PLAN. In 1993, Vinifera adopted a stock award plan, which
was approved by Agritope as the sole shareholder of Vinifera. The plan provided
for issuance of options to purchase up to 2,000,000 shares of Vinifera common
stock. In 1993, Vinifera granted options to purchase 100,000 shares for $1.00
per share, a price equal to the market value as determined by Vinifera's board
of directors. No options were granted from 1994 until 1999. In 1999, Vinifera
granted options to purchase 525,000 shares for $1.50 per share, representing a
discount of $0.50 from the market price as determined by the board of directors.
In 2000, Vinifera granted options to purchase 50,000 shares for $1.53 per share,
representing a discount of $0.53 from the market price as determined by the
board of directors. Also during 2000, Vinifera granted options to purchase
50,000 shares for $2.00 per share, which was deemed to be the fair market value
at the date of grant. During 2000, 162,500 options, at a weighted average price
of $1.50, were cancelled due to employee terminations. As of September 30, 2000,
options were outstanding to purchase 562,500 shares at a weighted average
exercise price of $1.46, for which options on 302,500 shares were exercisable,
at a weighted-average price of $1.34. In accordance with APB 25, Vinifera will
recognize compensation expense of $281,000 over a four-year period. Amortization
of such expense was $47,717, $119,103 and $0, in 2000, 1999 and 1998
respectively.
As required by SFAS 123, the Company has computed, for pro forma disclosure
purposes, the value of options granted and amortized over the vesting periods
using the Black-Scholes option pricing model. The assumptions used for stock
option grants were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30 2000 1999 1998
<S> <C> <C> <C>
Risk-free interest rate................. 6% 5% 5%
Expected dividend yield................. - - -
Expected life (years)................... 4 4 4
Expected volatility..................... 123% 80% 55%
</TABLE>
The assumptions used for rights granted under the employee stock purchase plan
in 1999 were a risk-free interest rate of 5%, an expected dividend yield of
zero, an expected volatility of 80% and an expected life of two years. No rights
were granted during fiscal year 2000.
If the Company had accounted for its stock-based compensation plans in
accordance with SFAS 123, the Company's net loss and net loss per share would
have increased as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30 2000 1999 1998
<S> <C> <C> <C>
Net loss:
As reported............................. $ (5,043,581) $ (4,675,406) $ (5,243,967)
Pro forma............................... $ (6,325,957) $ (5,937,886) $ (6,165,274)
Net loss per share:
As reported............................. $ (1.23) $ (1.15) $ (1.42)
Pro forma............................... $ (1.54) $ (1.46) $ (1.66)
</TABLE>
14
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 INCOME TAXES
As of September 30, 2000, Agritope had net operating loss carryforwards of
approximately $45.7 million and $32.9 million to offset federal and Oregon state
taxable income, respectively. These net operating loss carryforwards will expire
if not used by Agritope, as follows:
<TABLE>
<CAPTION>
YEAR OF EXPIRATION FEDERAL OREGON
<C> <C> <C>
2004................................................. $ 111,000 $ 111,000
2005................................................. 317,000 317,000
2006................................................. 941,000 941,000
2007................................................. 2,620,000 2,620,000
2008................................................. 6,733,000 4,847,000
2009................................................. 8,327,000 2,179,000
2010................................................. 8,477,000 3,765,000
2011................................................. 2,249,000 2,168,000
2012................................................. 4,279,000 4,284,000
2018................................................. 2,609,000 2,609,000
2019................................................. 4,319,000 4,319,000
2020................................................. 4,758,000 4,758,000
----------- ----------
Total................................................ $45,740,000 $32,918,000
</TABLE>
Significant components of Agritope's deferred tax assets were as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30 2000 1999
<S> <C> <C>
Net operating loss carryforwards..................... $17,687,000 $ 16,158,000
Deferred compensation................................ -- 784,000
Research and experimentation credit carryforwards.... 659,000 542,000
Capital loss carryforward............................ 219,000 --
Accrued expenses..................................... 194,000 162,000
Other................................................ (833,000) 667,000
------------ ------------
Gross deferred tax assets............................ 17,926,000 18,313,000
Valuation allowance.................................. (17,926,000) (18,313,000)
------------ ------------
Net deferred tax asset............................... $ -- $ --
</TABLE>
No benefit for Agritope's deferred tax assets has been recognized in the
accompanying financial statements as they do not satisfy the recognition
criteria set forth in Statement of Financial Accounting Standards No. 109,
"Accounting For Income Taxes" ("SFAS 109"). The valuation allowance decreased
by $0.4 million in 2000. The research and experimentation tax credit
carryforwards will generally expire from 2004 through 2020 if not used by
Agritope. The issuance of voting stock may result in a change of ownership
under federal tax rules and regulations. Upon occurrence of such a change in
ownership, utilization of existing tax loss and tax credit carryforwards
would be subject to cumulative annual limitations.
The consolidated financial statements include the financial results of Vinifera,
a 57% owned subsidiary (see Note 1). However, the tax disclosures above do not
include the deferred tax assets and related valuation allowance for Vinifera's
carryforwards since Vinifera is not included in the consolidated group for tax
purposes. Vinifera files its tax return separately on a stand-alone basis.
15
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 RESEARCH AND DEVELOPMENT ARRANGEMENTS
REVENUES. Revenues from research and development arrangements are included in
the accompanying consolidated statements of operations. Expenses related to
projects conducted under such arrangements are included under the caption
"Research and development expenses." The activity related to these arrangements
is summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30 2000 1999 1998
<S> <C> <C> <C>
Government research grants................ $ 423,254 $ 313,876 $ 224,688
Research projects with strategic partners. 360,323 497,800 --
Research projects with affiliate.......... 2,305,754 236,416 --
---------- ---------- ----------
$3,089,331 $1,048,092 $ 224,688
Project related expenses.................. $3,493,514 $1,331,356 $ 371,184
</TABLE>
NATIONAL INSTITUTES OF STANDARDS AND TECHNOLOGY. In October 1997, Agritope was
awarded a U.S. Department of Commerce matching grant totaling $990,022 through
the Advanced Technology Program of the National Institute of Standards and
Technology (NIST) and covering a three-year period. Agritope was awarded the
grant for use in the application of its proprietary ripening control technology
to certain tree fruits and bananas. Under terms of the grant, the NIST
reimburses Agritope for 49% of direct costs incurred for the projects. As of
September 30, 2000, $ 98,835 was available for future reimbursement under the
grant.
VILMORIN. On December 5, 1997, Agritope and Vilmorin entered into a research and
development agreement covering certain vegetable and flower crops. Under the
terms of the research agreement, Vilmorin will provide certain proprietary seed
varieties and germplasm for use by Agritope in research and development projects
to be funded by Vilmorin, in which Agritope technology, and possibly Vilmorin
technology, will be applied to the various covered crops. The specific research
projects to be conducted will be determined by agreement of the parties. Unless
otherwise agreed, Vilmorin will pay, on a quarterly basis, all of Agritope's
out-of-pocket expenses, including employee salaries and overhead, for each
selected research project.
Agritope and Vilmorin have agreed to negotiate in good faith the terms of future
commercialization agreements applicable to any commercial-stage products that
arise out of Vilmorin-funded research. If the parties are unable to agree,
commercialization terms will be determined by binding arbitration.
Vilmorin also agreed to provide additional funding totaling $1 million
through the financing of research and development projects over a three-year
period. As of September 30, 2000, Vilmorin had committed $160,000 to fund
specified projects which are planned to be completed by June 2001. Agritope
earned revenues of $360,323 and $497,800 for work completed for the Vilmorin
projects in 2000 and 1999, respectively. No revenues were earned in 1998 with
respect to such projects.
16
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 RESEARCH AND DEVELOPMENT ARRANGEMENTS, CONTINUED
AGRINOMICS LLC. In July 1999, Agritope and Aventis CropScience S.A. ("Aventis
CropScience") formed Agrinomics LLC ("Agrinomics") to conduct a research,
development and commercialization program in the field of agricultural
functional genomics. Agritope owns a 50% interest in Agrinomics and Aventis
CropScience owns the remaining 50% interest. Aventis CropScience has agreed
to make capital contributions in cash totaling $20 million over a five-year
period, of which $4 million and $5 million were contributed in 2000 and 1999,
respectively. Agritope contributed certain technology and a collection of
seed generated using such technology. Agritope and Aventis CropScience will
also perform research work at their respective facilities. In 2000 and 1999,
Agritope earned revenues of $2.3 million and $236,416, respectively, for work
performed for Agrinomics. The technology contributed to Agrinomics by
Agritope had a zero basis for financial reporting purposes. Accordingly,
Agritope has recorded its investment in Agrinomics as zero and will not
include in its consolidated financial statements its proportionate share of
the losses of Agrinomics until such time that Agritope makes capital
contributions to Agrinomics, if ever. There is no requirement for Agritope to
make additional capital contributions. Summarized financial information for
Agrinomics is as follows:
<TABLE>
<CAPTION>
FINANCIAL POSITION 9/30/00 9/30/99
<S> <C> <C>
ASSETS
Current assets
Cash and marketable securities............................ $4,104,356 $4,784,798
Other accounts receivable................................. 36,696 16,404
Due from Agritope......................................... 123,860 --
Prepaid expenses.......................................... 10,000 --
----------- ---------------
4,274,912 4,801,202
Property, plant and equipment, net........................ 2,686,384 142,940
Patents and proprietary technology, net................... 60,200 --
----------- ---------------
Total assets............................................ $7,021,496 $4,944,142
LIABILITIES AND MEMBERS' EQUITY
Current liabilities
Accounts payable.......................................... $ 208,823 $ 61,594
Due to Agritope........................................... -- 119,088
Deferred revenue.......................................... 375,000 --
----------- ---------------
583,823 180,682
Members' equity 6,437,673 4,763,460
----------- ---------------
Total liabilities and members' equity $7,021,496 $4,944,142
OPERATING RESULTS YEAR ENDED INCEPTION TO
9/30/00 9/30/99
Research contract revenues................................ $ 1,125,000 $ --
Operating expenses
Research and development.................................. 3,440,639 242,369
Administration............................................ 263,165 17,037
----------- ---------------
3,703,804 259,406
Interest earned........................................... 253,017 22,866
----------- ---------------
Net loss ................................................. $ (2,325,787) $ (236,540)
</TABLE>
17
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 COMMITMENTS AND CONTINGENCIES
Agritope leases office space and Vinifera leases office and greenhouse
facilities under operating lease agreements, which require minimum annual
payments as follows:
<TABLE>
<CAPTION>
YEAR ENDING SEPTEMBER 30
<C> <C>
2001 ................................................................ $544,936
2002 ................................................................ 560,048
2003 ................................................................ 326,140
2004 ................................................................ 90,500
2005 ................................................................ 25,500
</TABLE>
Rent expense was $602,551, $514,762, and $556,717, for 2000, 1999, and 1998,
respectively.
NOTE 10 PROFIT SHARING AND SAVINGS PLANS
EMPLOYEE STOCK OWNERSHIP PLAN. Agritope's board of directors adopted the
Agritope, Inc. Employee Stock Ownership Plan ("ESOP") in November 1997. All
employees, except excluded classes, of Agritope and those of its affiliates that
elect to participate, are eligible to participate in the ESOP. The employers'
contribution to the ESOP each year, if any, will be determined by the Agritope
board of directors, and may be made either in Agritope common stock or in cash.
Contributions will be allocated to participants in proportion to their
compensation. Contributions vest based on years of service over the first six
years of employment, or upon the participant's earlier death, disability, or
attainment of age 65. In 2000, the Company made a contribution of $57,583 to the
ESOP. No contributions were made in 1999 or 1998. The ESOP holds 47,271 shares
of Agritope common stock as of September 30, 2000.
401(K) PROFIT SHARING PLAN. Agritope established the Agritope, Inc. 401(k)
Profit Sharing Plan (the "401(k) Plan") in November 1997. All employees
(including officers), other than excluded classes, are eligible to
participate. Participants may contribute up to 17% of their cash compensation
on a before-tax basis, subject to an annual maximum amount that is adjusted
for the cost of living ($10,500 for 2000). The first 5% of a participant's
compensation is eligible for a discretionary, pro-rata employer matching
contribution which will be invested in Agritope common stock. Matching
contributions vest based on years of service over the first six years of
employment, or upon the participant's earlier death, disability, or
attainment of age 65. In 2000, 1999 and 1998, Agritope made contributions of
$52,531, $40,456 and $40,502, respectively, to the 401(k) Plan. The 401(k)
plan holds 59,548 shares of Agritope common stock as of September 30, 2000.
18
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 SEGMENT INFORMATION
In 1999, Agritope adopted Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS
131"). Under SFAS 131, segments are defined as components of an enterprise about
which separate financial information is available that is evaluated regularly by
the chief operating decision maker, or decision-making group, in deciding how to
allocate resources and in assessing performance. Agritope's chief operating
decision-maker is the chief executive officer.
Agritope is organized into two segments: The Research and Development segment
develops improved plant products and provides technology to the agricultural
industry. The Grapevine Propagation segment, operated by Vinifera, propagates,
grows and distributes grapevine plants to the premium wine industry. It also
provides disease testing and elimination services.
The accounting policies of the segments are the same as those described in Note
2, Summary of Significant Accounting Policies. The Company has no revenues
outside the United States. For information as to major customers, see Note 2
"Major Customer". Selected segment information is presented in the tables below:
<TABLE>
<CAPTION>
RESEARCH AND GRAPEVINE
DEVELOPMENT PROPAGATION TOTAL
<S> <C> <C> <C>
YEAR ENDED SEPTEMBER 30, 2000
Revenues from external sources.......... $3,089,331 $4,250,268 $7,339,599
Intersegment revenues................... -- -- --
Operating loss.......................... (3,937,198) (1,355,003) (5,292,201)
Intersegment interest income (expense).. -- --
Interest income......................... 117,696 3,298 120,994
Interest expense........................ -- (205,561) (205,561)
Other income (expense).................. -- 535 535
Segment loss............................ (3,819,502) (1,556,731) (5,376,233)
Depreciation and amortization........... 662,917 666,169 1,329,086
Expenditures for long-lived assets...... 634,522 170,104 804,626
Segment assets.......................... 4,714,662 7,049,947 11,764,609
RESEARCH AND GRAPEVINE
DEVELOPMENT PROPAGATION TOTAL
YEAR ENDED SEPTEMBER 30, 1999
Revenues from external sources.......... $ 1,048,092 $ 2,503,377 $ 3,551,469
Intersegment revenues................... 180,296 (180,296) --
Operating loss.......................... (4,517,213) (1,055,465) (5,572,678)
Intersegment interest income (expense).. 40,288 (40,288) --
Interest income......................... 102,543 199 102,742
Interest expense........................ (27) (21,419) (21,446)
Other income (expense).................. -- 166,365 166,365
Segment loss............................ (4,374,409) (950,608) (5,325,017)
Depreciation and amortization........... 669,672 638,265 1,307,937
Expenditures for long-lived assets...... 600,416 331,666 932,082
Segment assets.......................... 7,529,966 7,941,216 15,471,182
</TABLE>
19
<PAGE>
AGRITOPE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 SEGMENT INFORMATION, CONTINUED
<TABLE>
<CAPTION>
RESEARCH AND GRAPEVINE
DEVELOPMENT PROPAGATION TOTAL
<S> <C> <C> <C>
YEAR ENDED SEPTEMBER 30, 1998
Revenues from external sources.......... $ 224,688 $ 2,574,976 $ 2,799,664
Intersegment revenues................... 70,869 (70,869) --
Operating loss.......................... (4,271,627) (1,952,813) (6,224,440)
Intersegment interest income (expense).. 271,612 (271,612) --
Interest income......................... 224,350 -- 224,350
Interest expense........................ -- (1,248) (1,248)
Other income (expense).................. 6,450 (131,502) (125,052)
Segment loss............................ (3,769,215) (2,357,175) (6,126,390)
Depreciation and amortization........... 442,826 508,383 951,209
Expenditures for long-lived assets...... 1,903,973 869,645 2,773,618
Segment assets.......................... 7,395,950 6,994,376 14,390,326
</TABLE>
RECONCILIATION OF LOSSES. The following table reconciles segment losses to
consolidated net loss:
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30 2000 1999 1998
<S> <C> <C> <C>
Segment losses ..................... $(5,376,233) $(5,325,017) $(6,126,390)
Gain on sale of stock of Vinifera .. -- 289,603 --
Minority interest in Vinifera losses 669,394 360,008 882,423
Merger related costs ............... (503,488) -- --
Gain on sale of investment in
affiliated company ............... 124,670 -- --
OTHER, NET ......................... 42,076 -- --
----------- ----------- -----------
Net loss ........................... $(5,043,581) $(4,675,406) $(5,243,967)
</TABLE>
20
<PAGE>
(b) Pro Forma Financial Information
The following unaudited pro forma condensed combined financial statements give
effect to the Merger of Exelixis and Agritope, and the 1999 acquisition by
Exelixis of substantially all of the assets of MetaXen, LLC ("MetaXen"),
applying the purchase method of accounting. The unaudited pro forma condensed
combined balance sheet gives effect to the Merger of Exelixis and Agritope as if
it had occurred on September 30, 2000. The acquisition of substantially all of
the assets of MetaXen occurred on July 11, 1999; accordingly, the unaudited
balance sheet of Exelixis at September 30, 2000 reflects the acquisition of the
MetaXen assets. The unaudited pro forma condensed combined statements of
operations give effect to the Merger of Exelixis and Agritope and the 1999
acquisition of the MetaXen assets as if they had both occurred on January 1,
1999.
For pro forma purposes, (i) Exelixis' unaudited balance sheet as of September
30, 2000 has been combined with Agritope's audited consolidated balance sheet as
of September 30, 2000 as if the Merger had occurred on September 30, 2000, (ii)
Exelixis' audited statement of operations for the year ended December 31, 1999,
which includes the results of MetaXen subsequent to the acquisition date of July
11, 1999, has been combined with MetaXen's unaudited statement of operations
from the period from January 1, 1999 to July 11, 1999 and (iii) the
Exelixis/MetaXen unaudited pro forma condensed combined statement of operations
for the year ended December 31, 1999, and the Exelixis unaudited statement of
operations for the nine months ended September 30, 2000, have been combined with
Agritope's audited consolidated statement of operations for the year ended
September 30, 1999 and the unaudited consolidated statement of operations for
the nine months ended September 30, 2000, respectively, as if the Merger had
occurred on January 1, 1999. Agritope's revenues and net loss for the quarter
ended December 31, 1999, which have been excluded from the pro forma statements
of operations, were $600,934 and $(1,321,057), respectively.
The unaudited pro forma condensed combined financial information has been
prepared on the basis of assumptions described in the notes thereto and includes
assumptions relating to the allocation of the consideration paid for the assets
and liabilities of Agritope based on management's preliminary estimates of their
fair value. Under the purchase method of accounting, the aggregate consideration
paid is allocated to the tangible and identifiable intangible assets acquired,
and liabilities assumed, on the basis of their respective fair values on the
transaction date. The final allocation of such consideration may differ from
that reflected in the unaudited pro forma condensed combined financial
information after the completion of an independent valuation and other
procedures to be performed after the closing of the Merger. Exelixis does not
expect that the final allocation of the aggregate purchase price for the Merger
will differ materially from the preliminary allocations. In the opinion of
Exelixis, all adjustments necessary to present fairly such unaudited pro forma
condensed combined financial information have been made based on the terms and
structure of the Merger.
The unaudited pro forma information has been prepared in accordance with the
rules and regulations of the Securities and Exchange Commission and is presented
for illustrative purposes only. Such information is not necessarily indicative
of the operating results or financial position that would have occurred if the
Merger had been consummated on January 1, 1999 or September 30, 2000,
respectively, nor is it necessarily indicative of future operating results or
financial position.
These pro forma condensed combined financial statements are qualified in their
entirety by reference to, and should be read in conjunction with, the historical
financial statements and the related notes thereto, "Exelixis Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
"Agritope Management's Discussion and Analysis of Financial Condition and
Results of Operations" included in the Form S-4.
21
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA REFERENCE PRO FORMA
EXELIXIS AGRITOPE ADJUSTMENTS (NOTE 2) COMBINED
----------- ----------- -------------- ----------- ------------
ASSETS
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 39,317 $ 1,373 $ 40,690
Short-term investments 79,601 -- 79,601
Trade accounts receivable,
net -- 713 713
Other receivables 2,299 152 2,451
Inventories -- 4,440 4,440
Other current assets 2,048 111 2,159
----------- ----------- ------------
Total current assets 123,265 6,789 130,054
Property and equipment, net 19,441 2,882 22,323
Related party receivables 393 -- 393
Goodwill and other intangible assets -- 2,051 $55,057 (A) 57,108
Other assets 1,284 43 1,327
----------- ----------- -------------- ------------
Total assets $144,383 $ 11,765 $55,057 $ 211,205
=========== =========== ============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 4,718 $ 2,473 $5,900 (B) $ 13,091
Current portion of capital lease obligations 2,466 3 2,469
Current portion of notes payable 1,634 5 1,639
Revolving line of credit -- 1,484 1,484
Advances from minority shareholders of
subsidiary -- 868 868
Deferred revenue 5,061 555 5,616
----------- ----------- -------------- ------------
Total current liabilities 13,879 5,388 5,900 25,167
Capital lease obligations 3,882 -- 3,882
Notes payable 2,091 1 2,092
Other long-term liability 104 -- 104
Deferred revenue 9,184 -- 9,184
Minority interest -- 1,534 1,534
----------- ----------- -------------- ------------
Total liabilities 29,140 6,923 5,900 41,963
----------- ----------- -------------- ------------
Stockholders' equity:
Convertible preferred stock -- 7 (7) (C) --
Common stock 45 42 (39) (C), (D) 48
Additional paid-in-capital 212,038 60,931 31,183 (C), (D) 304,152
Notes receivable from stockholders (2,057) -- (2,057)
Deferred stock compensation (13,020) -- (13,020)
Accumulated other comprehensive income 223 -- 223
Accumulated deficit (81,986) (56,138) 18,020 (C), (E) (120,104)
----------- ----------- -------------- ------------
Total stockholders' equity 115,243 4,842 49,157 169,242
----------- ----------- -------------- ------------
Total liabilities and stockholders' equity $144,383 $ 11,765 $ 55,057 $ 211,205
=========== =========== ============== ============
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
22
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
EXELIXIS/
METAXEN
PRO FORMA PRO FORMA PRO FORMA
EXELIXIS METAXEN COMBINED AGRITOPE ADJUSTMENTS REFERENCE COMBINED
------------ ----------- ------------- ----------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Product sales $ -- $ -- $ -- $ 2,503 $ 2,503
License 1,046 -- 1,046 -- 1,046
Contract and government grants 9,464 2,297 11,761 812 12,573
Research projects with affiliate -- -- -- 236 236
------------ ----------- ------------- ----------- ------------
Total revenues 10,510 2,297 12,807 3,551 16,358
------------ ----------- ------------- ----------- ------------
Costs and expenses:
Product costs -- -- -- 2,334 2,334
Research and development
21,653 3,328 24,981 3,105 28,086
Selling, general and
administrative 7,624 513 8,137 3,685 11,822
Amortization of purchased
intangibles -- -- -- -- $ 4,123 Note 3 4,123
------------ ----------- ------------- ----------- -------------- ------------
Total operating expenses 29,277 3,841 33,118 9,124 4,123 46,365
------------ ----------- ------------- ----------- -------------- ------------
Loss from operations (18,767) (1,544) (20,311) (5,573) (4,123) (30,007)
Other income (expense), net:
Interest income 571 9 580 103 683
Interest expense (525) (72) (597) (21) (618)
Other, net -- -- -- 455 455
------------ ----------- ------------- ----------- ------------
46 (63) (17) 537 520
------------ ----------- ------------- ----------- ------------
Minority interest in subsidiary net loss -- -- -- 360 360
------------ ----------- ------------- ----------- -------------- ------------
Net loss $ (18,721) $ (1,607) $ (20,328) $(4,676) $ (4,123) $(29,127)
============ =========== ============= =========== ============== ============
Net loss per share, basic and diluted $ (4.60) $ (5.00) $ (1.03)
============ ============= ============
Shares used in computing net loss
per share, basic and diluted 4,068 4,068 Note 5 28,388
============ ============= ============
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
23
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
EXELIXIS AGRITOPE ADJUSTMENTS REFERENCE COMBINED
----------- ------------ ----------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Revenues:
Product sales $ -- $ 4,205 $ 4,205
License 2,771 -- 2,771
Contract and government grants 14,914 592 15,506
Research projects with affiliate -- 1,942 1,942
----------- ------------ --------------
Total revenues 17,685 6,739 24,424
----------- ------------ --------------
Costs and expenses:
Product costs -- 4,459 4,459
Research and development 34,937 3,369 38,306
Selling, general and administrative 13,685 2,761 16,446
Amortization of purchased -- -- $ 3,093 Note 3 3,093
intangibles ----------- ------------ ----------------- --------------
Total operating expenses 48,622 10,589 3,093 62,304
----------- ------------ ----------------- --------------
Loss from operations (30,937) (3,850) (3,093) (37,880)
Other income (expense), net:
Interest income 4,166 75 4,241
Interest expense (488) (164) (652)
Other, net -- (335) (335)
----------- ------------ --------------
3,678 (424) 3,254
----------- ------------ --------------
Minority interest in subsidiary net loss -- 552 552
----------- ------------ ----------------- --------------
Net loss $ (27,259) $ (3,722) $ (3,093) $ (34,074)
=========== ============ ================= ==============
Net loss per share, basic and diluted $ (1.00) $ (0.90)
=========== ==============
Shares used in computing net loss
per share, basic and diluted 27,235 Note 5 37,746
=========== ==============
</TABLE>
See notes to unaudited pro forma condensed combined financial statements.
24
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
On December 8, 2000, Exelixis acquired all of the outstanding shares of
Agritope. Pursuant to the terms of the Merger, the unaudited pro forma condensed
combined financial information reflects the issuance of approximately 1.7
million shares of Exelixis common stock in exchange for all of the outstanding
shares of Agritope Series A preferred and common stock. The number of shares of
Exelixis common stock to be issued is based on Agritope's capitalization at
November 30, 2000 and reflects an exchange ratio of 0.35, which was determined
pursuant to a formula set forth in the Merger Agreement. Certain options and
warrants to purchase approximately 2.6 million shares of Agritope Series A
preferred and common stock will be assumed by Exelixis pursuant to the Merger
and converted into fully vested options and warrants to purchase approximately
890,000 shares of Exelixis common stock.
The total estimated consideration for the Merger is approximately $93.4
million, which consists of Exelixis common stock, options and warrants valued
at $92.1 million and estimated Exelixis transaction costs of $1.3 million.
Exelixis transaction costs include financial advisory, legal, accounting and
other fees.
Based upon an independent valuation of the tangible and intangible assets
acquired, Exelixis management has allocated the total cost of the merger to the
assets acquired and liabilities assumed at September 30, 2000 as follows (in
thousands):
<TABLE>
<CAPTION>
<S> <C>
Tangible assets acquired.................................... $9,696
In-process research and development......................... 38,117
Developed technology........................................ 456
Patents/core technology..................................... 3,697
Assembled workforce......................................... 958
Goodwill.................................................... 51,997
Liabilities assumed......................................... (11,506)
---------------
$93,415
===============
</TABLE>
The valuation of the purchased in-process research and development of $38.1
million was based upon the results of an independent valuation using the income
approach for each of the ten projects in-process. The in-process projects relate
primarily to the development of disease and insect resistant fruits and
vegetables and are expected to be completed over approximately the next three to
six years. The income approach estimates the value of each acquired project
in-process based on its expected future cash flows. The valuation analysis
considered the contribution of the core technology as well as the percent
complete of each in-process research and development project. The expected
present value of the cash flows associated with the in-process research and
development projects was computed using a risk adjusted rate of return of 35%
which is considered commensurate with the overall risk and percent complete of
the in-process projects. The purchased technology was not considered to have
reached technological feasibility, and it has no alternative future use,
accordingly, it has been charged to the pro forma combined accumulated deficit
and has not been reflected in the pro forma condensed combined statements of
operations.
The revenues, expenses, cash flows and other assumptions underlying the
estimated value of the purchased in-process research and development involve
significant risks and uncertainties. The risks and uncertainties associated with
completing the acquired in-process projects include obtaining the necessary
regulatory approvals in a timely manner and being able to successfully and
profitably produce, distribute and sell products.
The unaudited pro forma information presented is not necessarily indicative of
future results of operations of Exelixis or the combined results of operations
which would have resulted had the Merger of Exelixis and Agritope
25
<PAGE>
and the 1999 acquisition of the MetaXen assets taken place during the periods
presented. The unaudited pro forma statements reflect the effects of the Merger
of Exelixis and Agritope, and the 1999 acquisition by Exelixis of substantially
all of the assets of MetaXen, applying the purchase method of accounting,
assuming the Merger occurred as of September 30, 2000 for the purposes of the
unaudited pro forma condensed combined balance sheet and as of January 1, 1999
for the purposes of the unaudited pro forma condensed combined statements of
operations.
There were no material differences in the accounting policies of Exelixis,
MetaXen or Agritope for the periods presented.
NOTE 2. UNAUDITED PRO FORMA BALANCE SHEET
The unaudited pro forma condensed combined balance sheet includes the
adjustments necessary to give effect to the Merger of Exelixis and Agritope as
if it had occurred on September 30, 2000 and to reflect the allocation of
purchase price to the fair value of tangible and intangible assets acquired as
noted above, including the charge to accumulated deficit for acquired in-process
research and development and the elimination of the Agritope stockholders'
equity accounts. Adjustments included in the pro forma condensed combined
balance sheet are summarized as follows:
(A) Record goodwill and other intangible assets of $57.1 million and
elimination of intangible assets on the balance sheet of Agritope as of
the acquisition date;
(B) Accrual of transaction related costs of approximately $1.3 million for
Exelixis and $4.6 million for Agritope;
(C) Elimination of the Agritope stockholder equity accounts;
(D) Issuance of Exelixis common stock, $0.001 par value, and options and
warrants to purchase common stock, as discussed above. The value of the
Exelixis common stock is equal to the product of 1,712,290 shares
multiplied by approximately $39.04 per share, while the options and
warrants have been assigned a value of approximately $25.3 million; and
(E) Charge to operations for in-process research and development of
approximately $38.1 million.
NOTE 3. UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
The audited pro forma condensed combined statements of operations include the
adjustments necessary to give effect to the Merger as if it had occurred on
January 1, 1999. Adjustments consist of the amortization of acquired intangible
assets using the following estimated useful lives:
<TABLE>
<CAPTION>
<S> <C>
Developed technology............................................ 5 years
Patents/core technology......................................... 15 years
Assembled workforce............................................. 3 years
Goodwill........................................................ 15 years
</TABLE>
NOTE 4. METAXEN ACQUISITION
On July 11, 1999, Exelixis acquired substantially all the assets of MetaXen. In
addition to paying cash consideration of $870,000, the Company assumed a note
payable relating to certain acquired assets with a principle balance due of $1.1
million. The Company also assumed responsibility for a facility sub-lease
relating to the office and laboratory space occupied by MetaXen. This
transaction was recorded using the purchase method of accounting. The allocation
of the aggregate purchase price to the tangible and identifiable intangible
assets acquired and liabilities assumed in connection with this acquisition was
based on estimated fair values as determined by management. The purchase price
allocation is summarized below (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Laboratory and computer equipment............................... $1,645
Leasehold improvements.......................................... 175
Other tangible assets........................................... 155
Note payable.................................................... (1,105)
--------------
$ 870
==============
</TABLE>
26
<PAGE>
This transaction is already reflected in the historical balance sheet of
Exelixis at December 31, 1999. Pro forma adjustments relating to interest income
and interest expense were not material to the unaudited pro forma combined
financial statement.
NOTE 5. PRO FORMA NET LOSS PER SHARE
Pro forma net loss per share, basic and diluted, are computed as follows:
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, 2000 December 31, 1999
-------------------- -------------------
(In thousands, except per share amounts)
<S> <C> <C>
Net loss $(34,074) $(29,127)
==================== ===================
Shares used in computing net loss per share, basic and diluted 27,235 4,068
Pro forma adjustments:
Weighted effect of assumed conversion of convertible preferred
stock 8,799 22,608
Effect of common stock issued in Agritope Merger 1,712 1,712
-------------------- -------------------
Shares used in computing net loss per share, basic and diluted 37,746 28,388
==================== ===================
Pro forma net loss per share, basic and diluted $ (0.90) $ (1.03)
==================== ===================
</TABLE>
Shares of common stock issuable upon the exercise of Exelixis stock options and
warrants, and shares issuable upon the conversion of preferred stock and notes
payable have been excluded from the computation of basic and diluted net loss
per share as their effect would be antidilutive. Further, options and warrants
to purchase Agritope Series A preferred stock and Agritope common stock, which
have been assumed by Exelixis pursuant to the Merger and converted into options
and warrants to purchase approximately 890,000 shares of Exelixis common stock,
have also been excluded from the computation basic and diluted net loss per
share as their effect would be antidilutive.
-------------------------------------------------------
(c) Exhibits
2.1 Agreement and Plan of Merger and Reorganization, dated as of September
7, 2000, by and among Exelixis, Inc., Athens Acquisition Corp. and
Agritope, Inc. (Incorporated by reference to Annex A of Exelixis'
Registration Statement on Form S-4 (No. 333-47710), as amended).
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
27
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: December 20, 2000
EXELIXIS, INC.
/S/ Glen Y. Sato
------------------
Glen Y. Sato
Chief Financial Officer, Vice President of Legal Affairs
and Secretary
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
28
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
2.1 Agreement and Plan of Merger and Reorganization, dated as of
September 7, 2000, by and among Exelixis, Athens Acquisition Corp.
and Agritope, Inc. (Incorporated by reference to Annex A of Exelixis'
Registration Statement on Form S-4 (No. 333-47710), as amended).
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants.
