<PAGE>
 
               United States Securities and Exchange Commission
                            Washington, D.C.  20549


                                   FORM 10-Q
                                        

     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                 For the quarterly period ended March 31, 1998



              Commission file number         0-19352
                                    ------------------------



                               AGRIBIOTECH, INC.
             (Exact name of registrant as specified in its charter)

                  Nevada                                  85-0325742
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                     Identification No.)


               120 Corporate Park Drive, Henderson, Nevada 89014
                    (Address of principal executive offices)

                                 (702) 566-2440
              (Registrant's telephone number, including area code)

                   2700 Sunset Road, Las Vegas, Nevada 89120
                 (Former address if changed since last report)

     Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES  X      NO     .
                                             -----      -----

     As of May 13, 1998, the Registrant had 35,760,627 shares of Common Stock,
par value $.001 per share, issued and outstanding.
<PAGE>
 
                        PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS



                      AGRIBIOTECH, INC. AND SUBSIDIARIES

                          Consolidated Balance Sheets

                                  (Unaudited)


                                    ASSETS


<TABLE> 
<CAPTION> 

                                                                        March 31,           June 30,
                                                                          1998                1997
                                                                     --------------       ------------

<S>                                                                  <C>                  <C>  
Current assets:                                                      

    Cash and cash equivalents                                         $   2,966,830          2,553,634
    Accounts receivable, less allowance for doubtful accounts            
     of $2,698,601 at March 31, 1998 and $729,352 at June 30, 1997       51,680,818         17,474,887
    Inventories                                                          66,845,197         23,328,961
    Notes receivable from sale of common stock                                    -          9,990,000
    Other                                                                 2,216,406            646,508
                                                                     --------------       ------------
            Total current assets                                        123,709,251         53,993,990

Property, plant and equipment, net                                       36,257,048         17,864,052

Intangible assets, net of accumulated amortization                       95,540,148         22,544,539

Investment in associated entity                                             934,576            567,235

Deferred income taxes                                                     1,845,955                  -

Other assets                                                                483,241            143,209
                                                                     --------------       ------------
            Total assets                                             $  258,770,219         95,113,025
                                                                     ==============       ============
</TABLE> 

         See accompanying notes to consolidated financial statements.

                                       2

<PAGE>
 
                      AGRIBIOTECH, INC. AND SUBSIDIARIES

                          Consolidated Balance Sheets

                                  (Unaudited)


                     LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE> 
<CAPTION> 


                                                                             March 31,          June 30,
                                                                               1998               1997
                                                                           -------------     -------------

<S>                                                                        <C>               <C>  
Current liabilities: 
    Short-term debt                                                        $  48,589,412        24,203,431
    Current installments of long-term obligations                              1,705,288         1,056,770
    Accounts payable                                                          26,348,501        10,601,813
    Accrued liabilities                                                        5,452,918         3,277,051
    Amount due in connection with acquisition                                 17,350,000         7,300,000
                                                                           -------------     -------------
             Total current liabilities                                        99,446,119        46,439,065

Long-term obligations, excluding current installments                          8,433,383         2,667,609

Deferred income taxes                                                                  -         1,018,369
                                                                           -------------     -------------
             Total liabilities                                               107,879,502        50,125,043
                                                                           -------------     -------------

Stockholders' equity:
    Preferred stock, $.001 par value; authorized 10,000,000 shares;
      issued and outstanding 1,100 shares at March 31, 1998
      (aggregate liquidation preference of $1,321,238) and 1,100 shares
      at June 30, 1997 (aggregate liquidation preference of $1,221,666)                1                 1
    Common stock, $.001 par value; authorized 50,000,000
      shares; issued and outstanding 33,680,768 shares at
      March 31, 1998 and 23,743,385 shares at June 30, 1997                       33,681            23,743
    Capital in excess of par value                                           144,349,482        49,439,319 
    Common stock to be issued in acquisition                                  14,615,000         7,950,000
    Accumulated (deficit)                                                     (8,107,447)      (12,425,081)
                                                                           -------------     -------------
              Total stockholders' equity                                     150,890,717        44,987,982
                                                                           -------------     -------------
Commitments, contingencies and subsequent events (notes B and C)

              Total liabilities and stockholders' equity                   $ 258,770,219        95,113,025
                                                                           =============     =============
</TABLE> 

See accompanying notes to consolidated financial statements.

                                       3
<PAGE>
 
                      AGRIBIOTECH, INC. AND SUBSIDIARIES

                     Consolidated Statements of Operations

                                  (Unaudited)

<TABLE> 
<CAPTION> 
                                                                        Nine-month period                Three-month period
                                                                         ended March 31,                   ended March 31,
                                                                         ---------------                   ---------------
                                                                     1998               1997             1998             1997
                                                                     ----               ----             ----             ----
<S>                                                             <C>                 <C>              <C>              <C> 
Net sales                                                       $ 139,695,295        41,164,828       75,880,434       20,223,487
Cost of sales                                                     109,209,431        31,005,534       57,623,388       14,831,018
                                                                -------------       -----------      -----------      -----------
          Gross Profit                                             30,485,864        10,159,294       18,257,046        5,392,469
Operating expenses                                                 27,441,877        10,814,219       14,762,934        3,981,431
                                                                -------------       -----------      -----------      -----------
          Earnings (loss) from operations                           3,043,987          (654,925)       3,494,112        1,411,038
                                                                -------------       -----------      -----------      -----------

Other income (expense):
  Interest expense                                                 (2,904,358)       (1,002,773)      (1,794,287)        (381,647)
  Interest income                                                     177,262           197,333           26,587           23,423
  Other                                                             1,093,243           271,439          292,202          232,230
                                                                -------------       -----------      -----------      -----------   
          Total other income (expense)                             (1,633,853)         (534,001)      (1,475,498)        (125,994)
                                                                -------------       -----------      -----------      -----------
          Earnings (loss) before income taxes                       1,410,134        (1,188,926)       2,018,614        1,285,044

Income tax expense (benefit)                                       (2,907,500)                -       (2,907,500)               -
                                                                -------------       -----------      -----------      -----------
          Net earnings (loss)                                       4,317,634        (1,188,926)       4,926,114        1,285,044

Discount and imputed dividends on preferred stock                      80,154         3,203,045           26,718          225,359
                                                                -------------       -----------      -----------      -----------
          Net earnings (loss) attributable to common stock      $   4,237,480        (4,391,971)       4,899,396        1,059,685
                                                                =============       ===========      ===========      ===========

Shares of common stock used in computing earnings
  (loss) per common share:
     Basic                                                         28,044,125        13,301,201       32,416,606       18,396,888
     Diluted                                                       32,373,638        13,301,201       36,982,290       19,216,017
                                                                =============       ===========      ===========      ===========

          Net earnings (loss) per common share:
               Basic                                            $        0.15             (0.33)            0.15             0.06
               Diluted                                                   0.13             (0.33)            0.13             0.06
                                                                =============       ===========      ===========      ===========

</TABLE> 

See accompanying notes to consolidated financial statements.

                                       4

<PAGE>
 
                      AGRIBIOTECH, INC. AND SUBSIDIARIES

           Consolidated Statement of Changes in Stockholders' Equity

                                  (Unaudited)

<TABLE> 
<CAPTION> 

                                       Preferred stock          Common stock        Capital in    Common stock
                                       ----------------    ---------------------    excess of     to be issued   Accumulated
                                       Shares    Amount      Shares       Amount    par value    in acquisition   (deficit)
                                       ------    ------    ----------    -------   -----------   --------------  -----------
<S>                                     <C>         <C>    <C>           <C>       <C>            <C>            <C> 
Balance at June 30, 1997                1,100        $1    23,743,385    $23,743    49,439,319      7,950,000    (12,425,081)  

Common stock issued for:
           Cash                             -         -     3,718,182      3,718    48,121,284              -              - 
           Exercise of options              -         -       727,801        728     2,305,464              -              - 
           Exercise of warrants             -         -     2,185,625      2,186    15,554,689              -              - 
           Acquisitions                     -         -     3,275,666      3,276    30,134,319      6,665,000              - 
           Reduction of indebtedness        -         -        30,109         30       447,841              -              - 
Expenses of stock issuances                 -         -             -          -    (1,653,434)             -              - 
Net earnings                                -         -             -          -             -              -      4,317,634  
                                        -----        --    ----------    -------   -----------     ----------    -----------
Balance at March 31, 1998               1,100        $1    33,680,768    $33,681   144,349,482     14,615,000    150,890,717  
                                        =====        ==    ==========    =======   ===========     ==========    ===========

<CAPTION> 
                                          Total
                                       ----------- 
<S>                                    <C> 
Balance at June 30, 1997                44,987,982

Common stock issued for:
           Cash                         48,125,002
           Exercise of options           2,306,192
           Exercise of warrants         15,556,875
           Acquisitions                 36,802,595
           Reduction of indebtedness       447,871
Expenses of stock issuances             (1,653,434)
Net earnings                             4,317,634
                                       ----------- 
Balance at March 31, 1998              150,890,717
                                       =========== 
</TABLE> 

See accompanying notes to consolidated financial statements.

                                       5

<PAGE>
 
                        AGRIBIOTECH, INC AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                                  (Unaudited)

<TABLE> 
<CAPTION> 

                                                                                     Nine-month period
                                                                                      ended March 31,
                                                                                   ---------------------
                                                                              1998                    1997
                                                                        -----------------       -----------------
<S>                                                                       <C>                     <C> 
Cash flows from operating activities:
             Net earnings (loss)                                              $ 4,317,634             (1,188,926)
             Adjustments to reconcile net earnings (loss) to net cash
                 flows from operating activities:
                         Amortization                                           1,514,164                140,647
                         Depreciation                                           1,298,251                634,550
                         Equity in earnings of associated entity                 (924,842)              (282,937)
                         Deferred income taxes                                 (2,957,824)                     -
                         Common stock for services                                      -                 72,690
                         Changes in assets and liabilities excluding
                            effects of acquisitions:
                                 Accounts receivable                          (21,703,445)            (8,773,148)
                                 Inventories                                  (13,781,556)            (4,056,188)
                                 Other assets                                    (336,122)               (18,926)
                                 Payables                                       4,981,239              5,393,341
                                 Accrued liabilities                           (1,956,038)              (611,580)
                                                                        ----------------------- -----------------------
                            Net cash flows from operating activities          (29,548,539)            (8,690,477)
                                                                        ----------------------- -----------------------
Cash flows from investing activities:
             Additions to property, plant and equipment                        (2,820,736)              (853,481)
             Additions to intangible assets                                       (81,081)                (8,375)
             Distributions from associated entity                                 557,501                181,000
             Acquisitions                                                     (38,294,819)           (15,997,034)
                                                                        ----------------------- -----------------------
                            Net cash flows from investing activities          (40,639,135)           (16,677,890)
                                                                        ----------------------- -----------------------
Cash flows from financing activities:
             Net proceeds (repayments) of short-term debt                         261,720              9,958,509
             Additions to long-term debt                                        5,000,000                974,916
             Repayments of long-term debt                                       3,785,485                272,901
             Payments on amount due in connection with acquisition             (5,200,000)                     -
             Sale of preferred stock                                                    -             10,000,000
             Sale of common stock                                              48,125,002                      -
             Exercise of options                                                2,306,192              3,802,117
             Exercise of warrants                                              15,556,875              2,924,960
             Redemption of preferred stock                                              -             (2,507,137)
             Expenses of stock issuance                                        (1,653,434)            (1,389,995)
             Payments received on notes receivable from sale of stock           9,990,000                      -
                                                                        ----------------------- -----------------------
                           Net cash flows from financing activities            70,600,870             23,490,469
                                                                        ----------------------- -----------------------
Net increase (decrease) in cash and cash equivalents                              413,196             (1,877,898)
Cash and cash equivalents at beginning of period                                2,553,634              2,522,309
                                                                        ----------------------- -----------------------
Cash and cash equivalents at end of period                                    $ 2,966,830                644,411
                                                                             =============       ===============
</TABLE> 

See accompanying notes to consolidated financial statements.

                                       6
<PAGE>
 
                       AGRIBIOTECH, INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows

                                  (Unaudited)

<TABLE> 
<CAPTION> 


                                                                                     Nine-month period
                                                                                      ended March 31,
                                                                                    -------------------
                                                                                 1998                  1997
                                                                             ------------       ---------------
<S>                                                                            <C>                <C> 
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid                                                                $  2,821,988                955,427
                                                                             ============       ================
Non cash investing and financing activities:
   Accrued costs of acquisitions                                                $ 735,000                835,000
   Amount due in connection with acquistions                                   15,250,000             15,997,034
   Common stock issued in acquisitions                                         36,802,595                      -
   Common stock to be issued in acquisitions                                   14,615,000                      -
   Common stock issued in settlement of debt                                      447,871                320,000
                                                                             ============          =============

Summary of assets and liabilities acquired through acquisitions:
   Cash                                                                      $  1,280,985                      -
   Accounts receivable                                                         12,502,486              1,991,765
   Inventories                                                                 29,734,680              8,778,624
   Property, plant and equipment                                               16,870,511              4,693,197
   Intangible assets                                                           73,693,692              1,807,910
   Other assets                                                                 1,573,808                676,111
   Accounts payable and accrued expenses                                      (14,162,354)              (762,401)
   Long-term and short-term debt                                              (29,771,909)              (353,172)
   Deferred income taxes                                                          (93,500)                     -
                                                                             ------------          -------------
         Net assets acquired                                                 $ 91,628,399             16,832,034
                                                                             ============          =============
</TABLE> 

See accompanying notes to consolidated financial statements.

                                       7
<PAGE>
 
                      AGRIBIOTECH, INC., and SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                            March 31, 1998 and 1997
                                  (Unaudited)
================================================================================

(A)  PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS
     ----------------------------------------------
     
AgriBioTech, Inc. ("ABT" or the "Company") is a vertically integrated
agricultural seed company specializing in developing, processing, packaging and
distributing varieties of forage (hay crops) and cool season turfgrass seeds.
The Company also distributes corn, soybean and other seeds as ancillary
products. Since January 1, 1995, the Company has followed a business strategy to
acquire established, regionally based seed companies with proprietary products
and established research, production and distribution channels in their
respective markets in order to consolidate and vertically integrate the forage
and turfgrass sectors of the seed industry.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
effect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

The unaudited financial statements have been prepared in accordance with the
rules of the Securities and Exchange Commission and, therefore, do not include
all information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows, in conformity with generally
accepted accounting principles.  The information furnished, in the opinion of
management reflects all adjustments (consisting primarily of normal recurring
accruals) necessary to present fairly the financial position, results of
operations and cash flows for the three-month and nine-month periods ended March
31, 1998 and 1997.  The Company's business is subject to wide seasonal
fluctuations and, therefore, the results of operations for periods less than one
year are not necessarily indicative of results which may be expected for any
other interim period or for the year as a whole.


(B)  ACQUISITIONS
     ------------

Since July 1, 1997, the Company has completed the following acquisitions:

<TABLE>
<CAPTION>
Company                                     Effective Date      Purchase Price
-------                                     ---------------     --------------
<S>                                         <C>                 <C>
Lacrosse Seed Corporation ("LaCrosse")      July 1, 1997         $ 7,000,000
Lofts Seed, Inc. and affiliates ("Lofts")   January 1, 1998       33,100,000
Seed Corporation of America and affiliates
("SeedCo/Green")                            January 1, 1998        9,700,000
Zajac Peformance Seeds, Inc.                January 1, 1998        6,600,000
Van Dyke Seed Co., Inc.                     January 1, 1998        8,600,000
Las Vegas Fertilizer Co., Inc. ("LVF")      January 1, 1998       10,015,000
Discount Farm Center, Inc.                  January 24, 1998       3,075,000
Kinder Seed, Inc.                           February 1, 1998       3,545,000
Ohio Seed Company                           March 1, 1998          4,000,000
</TABLE>

The net purchase price of these acquisitions was paid through cash of
approximately $48,940,000 and 3,680,667 shares of ABT common stock valued at
approximately $36,695,000 based on the prices when the terms of the agreements
were reached.  Each acquisition was recorded using the purchase method of
accounting.

During the year ended June 30, 1997, the Company consummated the acquisitions
described in note 1 of Notes to Consolidated Financial Statements in the
Company's Form 10-KSB for the year ended June 30, 

                                       8
<PAGE>
 
                      AGRIBIOTECH, INC., and SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                            March 31, 1998 and 1997
                                  (Unaudited)
================================================================================

1997.  Unaudited pro forma results of operations assuming all acquisitions had
occurred at the beginning of the period presented, are as follows:

<TABLE>
<CAPTION>
                                                                                                        
                                                      Nine-month period                Three-month period 
                                                       ended March 31,                   ended March 31,
                                                       --------------                    --------------
                                                 1998                1997           1998               1997
                                                 ----                ----           ----               ----
<S>                                         <C>                 <C>            <C>                 <C>
Net sales                                    $215,801,408        230,522,127     77,174,618         89,255,528             
Net earnings (loss)                            (1,781,566)          (260,125)     1,359,646          2,914,222             
Net earnings (loss) attributable to                                                                                        
 common stock                                  (1,861,720)        (3,463,170)     1,332,928          2,688,863             
                                                                                                                           
Net earnings (loss) per common share:                                                                                      
     Basic                                          (0.07)             (0.26)          0.04               0.15             
     Diluted                                        (0.07)             (0.26)          0.04               0.14             
</TABLE>

The Company has signed letters of intent to acquire substantially all of the
business assets and operations of Willamette Seed Company, Peterson Seed
Company, Inc.; Geo. W. Hill & Co., Inc.; Fine Lawn Research, Inc.; Geo. W. Hill
of Indiana, Inc.; J&M Seed Company and Oseco Inc. The companies are regional
producers and distributors of forage and turfgrass seed in the United States and
Canada with aggregate unaudited total assets of approximately $45 million,
revenues of approximately $104 million and income before income taxes of
approximately $1.7 million for their latest fiscal year.  The Company
anticipates completing these transactions in April through July of 1998. The net
purchase price will be paid through cash of approximately $31.4 million and
412,308 shares of ABT common stock valued at approximately $6.4 million based on
the prices when the terms of the agreements were reached.  These acquisitions
will be recorded using the purchase method of accounting.


(C)  CAPITAL STOCK
     -------------

In December 1997, the Company issued 1,500,000 shares of its registered common
stock for $11.75 per share aggregating $17,625,000. In March 1998, the Company
issued 2,218,182 shares of its restricted common stock for $13.75 per share
aggregating $30,500,002. In April 1998, the Company issued 184,000 shares of
restricted common stock for $13.75 per share aggregating $2,530,000. In May
1998, the Company issued 586,500 units of its securities for $29.00 per unit for
an aggregate of $17,008,500. Each unit consists of two shares of restricted
common stock plus one common stock purchase warrant. Each warrant entitles the
holder to obtain one share of the Company's common stock for $17.50 for three
years after issuance. The warrants must be exercised if the quoted price of
common stock exceeds $25.00 for 15 consecutive trading days.

Between July 1, 1997 and March 31, 1998, all 2,000,000 of the Company's Class C
Warrants were exercised at their stated exercise price of $7.50 and 185,625
other warrants were exercised at their stated exercise price of $3.00 per share.
In addition, options for 727,801 shares of the Company's common stock were
exercised at their stated exercise prices ranging from $1.81 to $8.50.

The Company also issued 30,109 shares of its common stock in lieu of a debt
payment of $447,841 due to the former owners of Clark Seed, Inc.

Between July 1, 1997 and March 31, 1998, the Company increased its outstanding
stock options through grants to new employees, options for all employees
(including former owners) of acquired entities who continued employment with the
Company, and options for the former owners of LaCrosse in connection with their
covenant not to compete.  These grants aggregated 393,400 shares of the
Company's common stock from the Company's Employee Stock Option Plan and
2,732,000 shares outside of this plan.  The 

                                       9
<PAGE>
 
                      AGRIBIOTECH, INC., and SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                            March 31, 1998 and 1997
                                  (Unaudited)
================================================================================

exercise price of all options granted equaled or exceeded the quoted market
price at the date the options were granted.

When the Company issued its Series B Convertible Preferred Stock in April 1996
and its Series C Convertible Preferred Stock in September 1996 (collectively,
the "Preferred Stock"), the Company determined the economic substance of the
Preferred Stock was equivalent to common stock.  This conclusion was reached
because the documents authorizing the Preferred Stock provide that the holders
of the Preferred Stock are not entitled to receive dividends, the Company has no
requirements to make any cash payments with respect to the Preferred Stock, and
the ultimate satisfaction of the Preferred Stock would be through conversion to
common stock, either by the election of the holders or automatically at the
future date provided by the underlying documents.  Accordingly, the Company did
not reflect any accounting consequences of the conversion features of the
Preferred Stock or account for dividends on the Preferred Stock.  In March 1997,
an announcement was made at a meeting of the Financial Accounting Standards
Board's ("FASB") Emerging Issues Task Force (Topic No. D-60) setting forth the
position of the staff of the Securities and Exchange Commission (the "Staff")
regarding securities containing conversion features allowing for conversion into
common stock at a discount from future quoted market prices.  The Staff stated
that an allocation of the proceeds from the issuance of the securities should be
made to the conversion feature and the resulting discount is analogous to a
dividend that should be recognized as a return to the holders of the securities
over the period between issuance and when the securities first become
convertible.  The Staff also stated that affected financial statements should be
restated.  Although the Preferred Stock will ultimately be converted into common
stock, the Company has applied the Staff's position for the three-month and
nine-month periods ended March 31, 1998 and has restated its financial
statements for the three-month and nine-month periods ended March 31, 1997.  The
application of the Staff's position results in discounts of none during the
three-month and nine-month periods ended March 31, 1998 and $140,709 and
$2,718,622 during the three-month and nine-month periods ended March 31, 1997.
In addition, imputed dividends of $26,718 and $80,154 were recorded during the
three-month and nine-month periods ended March 31, 1998 and $84,650 and $484,423
were recorded during the three-month and nine-month periods ended March 31,
1997. Such amounts are reflected in net earnings (loss) attributable to common
stock (on which earnings (loss) per share is computed).  This resulted in the
net earnings (loss) attributable to common stock being decreased by $26,718 to
$4,899,396 and $80,154 to $4,237,480 for the three-month and nine-month periods
ended March 31, 1998 and by $225,359 to $1,059,685 and $3,203,045 to
$(4,391,971) for the three-month and nine-month periods ended March 31, 1997.
It also changed net earnings (loss) per common share from $0.07 to $0.06 for the
three-month period ended March 31, 1997 and from $(0.09) to $(0.33) for the
nine-month period ended March 31, 1997.  The discounts and imputed dividends
were attributed to capital in excess of par value and, therefore, resulted in no
change in stockholders' equity.  Applying the Staff's position and the
restatement of 1997 periods had no impact on the Company's consolidated balance
sheet or the net sales, costs, expenses, and net earnings (loss) shown on the
Company's consolidated statements of operations.

At March 31, 1998, the 1,100 shares of Preferred Stock then outstanding were
convertible into 307,661 shares of common stock. Subsequent to March 31, 1998,
900 shares of Preferred Stock were converted into 243,159 shares of common
stock.


(D)  EARNINGS PER SHARE
     ------------------

The FASB has issued Statement of Financial Accounting Standards ("SFAS") No.
128, Earnings Per Share, which specifies a new accounting standard for the
computation, presentation, and disclosure requirements for earnings per share
and is required to be applied retroactively upon initial adoption.  The Company
is required to make a dual presentation on the face of the income statement of
"basic" earnings per share, based on the average number of common shares
outstanding during each period without any 

                                       10
<PAGE>
 
                      AGRIBIOTECH, INC., and SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                            March 31, 1998 and 1997
                                  (Unaudited)
================================================================================

dilution, and "diluted" earnings per share, reflecting all dilution from
contingently issuable securities.  Due to a loss in the nine-month period ended
March 31, 1997, contingently issuable shares, consisting of options, warrants,
and convertible preferred stock, are anti-dilutive and have been excluded.

The components of shares of common stock used in computing earnings per share
are as follows:

<TABLE>
<CAPTION>
                                                           Nine-month period             Three-month period 
                                                             ended March 31,               ended March 31,
                                                             ---------------               ---------------
                                                           1998           1997           1998           1997
                                                           ----           ----           ----           ----
<S>                                                   <C>            <C>            <C>            <C>
Basic (weighted average shares outstanding)            28,044,125     13,301,201     32,416,606     18,396,888
Options and warrants                                    4,031,214              -      4,261,095        819,129
Convertible preferred stock                               298,299              -        304,589              -
                                                       ----------     ----------     ----------     ----------
     Diluted                                           32,373,638     13,301,201     36,982,290     19,216,017
                                                       ==========     ==========     ==========     ==========
</TABLE>


(E)  SHORT-TERM DEBT
     ---------------

In conjunction with consummating the acquisitions of Lofts and SeedCo/Green, the
Company obtained a $10 million bridge loan from the Bank of America ("BofA").
This loan was paid when due on March 31, 1998. In addition, the Company assumed
the existing credit facilities of Lofts, SeedCo/Green and LVF. These include
revolving lines of credit aggregating $35 million and term debt aggregating $10
million. These facilities expire in June 1998 and March 1999 and bear interest
at 0.5% to 2.0% above the prime rate. The Company is currently working with BofA
to refinance the Company's existing $25 million revolving line of credit that
expires on September 30, 1998 and its $5 million term loan, as well as the
facilities assumed in the Lofts, SeedCo/Green and LVF acquisitions. The Company
anticipates obtaining a syndicated credit facility that would be adequate for
the Company's current revolving line of credit and term credit needs, including
those associated with the pending acquisitions not yet consummated.


(F)  INCOME TAXES
     ------------

At June 30, 1997, the Company had deferred tax assets of approximately $3.6
million, which amount was reduced by a valuation allowance of approximately $3.3
million as required by SFAS No. 109, Accounting for Income Taxes, since the
Company was unable to conclude that it was more likely than not the deferred tax
assets would be realized. Developments within the Company during the three-month
period ended March 31, 1998, including the pre-tax income of $1.4 million for
the nine-month period ended March 31, 1998, have allowed the Company to reach
the conclusion it is more likely than not its deferred tax assets will be
realized and the valuation allowance has been removed resulting in an income tax
benefit of approximately $2.9 million.


                 --------------------------------------------

                                       11
<PAGE>
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION


The following discussion and analysis of financial condition and results of
operation should be read in conjunction with the consolidated financial
statements and notes thereto of the Company included elsewhere herein.  The
Company is a vertically integrated agricultural seed company specializing in
developing, packaging, processing and distributing varieties of forage (hay
crops) and cool season turfgrass seeds.  The Company also distributes corn,
soybean and other seeds as ancillary products.  The Company commenced an
acquisition program (the "Acquisition Program") in January 1995 and has grown
significantly through its business strategy of acquiring reputable, regionally
based seed companies with proprietary products and established research,
production, processing and distribution channels in their respective markets.
These acquisitions, as well as start-up operations, are more fully discussed in
Note 1 of Notes to Consolidated Financial Statements in the June 30, 1997 Form
10-KSB and Note B of Notes to Consolidated Financial Statements herein.  The
results of operations of the acquired companies are included in the Company's
consolidated results beginning with the effective date of the acquisition in
accordance with the purchase method of accounting.  Completed acquisitions that
have effective dates subsequent to July 1, 1996 and therefore impact
comparability of the financial information presented herein are as follows:

<TABLE>
<CAPTION>
                                                                                                 Effective      
                Name                                                                               Date         
                ----                                                                               ----         
                                                                                                                
<S>                                                                                          <C>                
     W-L Research, Inc. and Germain's Inc.                                                   September 1, 1996  
     E.F. Burlingham & Sons                                                                  April 1, 1997      
     The Sexauer Company                                                                     April 1, 1997      
     Olsen Fennell Seeds, Inc.                                                               June 1, 1997       
     LaCrosse Seed Corporation                                                               July 1, 1997       
     Lofts Seed, Inc. and affiliates ("Lofts")                                               January 1, 1998    
     Seed Corporation of America and affiliates ("SeedCo/Green")                             January 1, 1998    
     Zajac Performance Seeds, Inc.                                                           January 1, 1998    
     Van Dyke Seed, Inc.                                                                     January 1, 1998    
     Las Vegas Fertilizer, Inc. ("LVF")                                                      January 1, 1998    
     Discount Farm Center, Inc.                                                              January 24, 1998   
     Kinder Seed, Inc.                                                                       February 1, 1998   
     The Ohio Seed Company, Inc.                                                             March 1, 1998       
</TABLE>

The acquisitions and other operations being included in the Company's
consolidated financial statements beginning with each of their effective or
start-up dates significantly affects the meaningfulness of comparisons drawn
between periods.  Furthermore, the seed business is subject to wide seasonal
fluctuations and, therefore, the results of periods less than twelve months are
not necessarily indicative of results which may be expected for an entire year.
The Company's recent and pending acquisitions have sales that are more
concentrated in turfgrass seeds compared to earlier acquisitions that were more
concentrated in forage seeds.  This change in product mix is expected to reduce
the variability associated with seasonality in that turfgrass seed operations
historically have large selling seasons in the spring and fall whereas the
selling season of forage operations is primarily in the spring.  However,
quarterly operating results will continue to fluctuate depending on the timing
of future acquisitions and the relative magnitude of forage and turfgrass seed
sales.

The statements discussed herein include forward-looking statements that involve
a number of risks and uncertainties.  These include the Company's historical
lack of profitability, need to manage its growth, intense competition in the
seed industry, completion of pending acquisitions, seasonality of quarterly
results, and other risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission.

The above factors may have significant impact on the following discussion and
analysis and should be considered as part of it.

                                       12
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES

The Company had working capital of $24,263,132 at March 31, 1998, as compared to
$7,554,925 at June 30, 1997. To finance acquisitions and ongoing operations, the
Company has raised significant amounts of additional equity capital. During the
nine-months ended March 31, 1998 (the "Fiscal 1998 Nine-Month Period"), the
Company received cash proceeds of $48,125,002 from the sale of 3,718,182 shares
of its common stock and $17,863,067 from the exercise of options and warrants to
acquire the Company's common stock. The Company also received $9,990,000 in
payments on notes receivable at June 30, 1997, from the exercise of options and
warrants prior to June 30, 1997. In April and May 1998, the Company received
cash proceeds of $19,538,500 from the sale of 1,357,500 shares of its common
stock and 586,500 warrants. Since January 1, 1998, the Company has paid cash of
approximately $50 million in consummating the acquisitions of Lofts,
SeedCo/Green, Discount Farm Center, Kinder Seed, Zajac Performance Seeds, Van
Dyke Seed, LVF and Ohio Seed Company.

At June 30, 1997, the Company had a $22 million line of credit with Bank of
America ("BofA"). Borrowings under this line of credit are limited to 70% of
eligible accounts receivable and 50% of eligible inventory. At June 30, 1997,
the Company also had a $4 million term note outstanding. The note was repayable
in July and August 1997 and was repaid when due. In August 1997, the revolving
line of credit was increased to $25 million and the Company received a $5
million term loan from BofA that bears interest at the bank's reference rate
plus 0.5% and is repayable over five years.

In conjunction with consummating the acquisitions of Lofts and SeedCo/Green, the
Company obtained a $10 million bridge loan from the BofA that was repaid when
due on March 31, 1998. In addition, the Company assumed the existing credit
facilities of Lofts, SeedCo/Green and LVF. These include revolving lines of
credit aggregating approximately $35 million and term debt aggregating
approximately $10 million that expire in June 1998 and March 1999. The Company
is currently working with BofA to refinance the Company's existing $25 million
revolving line of credit that expires on September 30, 1998 and its $5 million
term loan, as well as the facilities assumed in the Lofts, SeedCo/Green and LVF
acquisitions. The Company anticipates obtaining a syndicated credit facility
that would be adequate for the Company's current revolving line of credit and
term credit needs, including those associated with pending acquisitions not yet
consummated.

The seed business is subject to wide seasonal fluctuations which result in
significant increases in the level of inventory prior to heavier selling seasons
and related higher levels of accounts receivable following such sales. In
addition, industry practice dictates a significant amount of sales are made with
extended terms. The seed business can also be significantly impacted by the
weather, which can alter the timing of seed sales. Therefore, it is possible
that the Company may need to seek additional financial resources to finance
ongoing operations. The Company believes it has adequate financial resources to
close its pending acquisitions. However, the Company expects that it will need
to obtain additional equity and/or debt financing in order to continue its
Acquisition Program beyond acquisitions that are currently pending.

During the Fiscal 1998 Nine-Month Period, the Company had net negative cash
flows from operating activities of $29,548,539 compared to net negative cash
flows from operating activities of $8,690,477 during the nine-month period ended
March 31, 1997 (the "Fiscal 1997 Nine-Month Period"), primarily due to the
sesonality of the Company's business. The Fiscal 1998 Nine-Month Period reflects
the Company's net earnings of $4,317,634, adjusted for non-cash operating items
and changes in operating assets and liabilities. During the Fiscal 1998 Nine-
Month Period, the Company had net negative cash flows from investing activities
of $40,639,135 compared to net negative cash flows from investing activities of
$16,677,890 in the Fiscal 1997 Nine-Month Period, primarily from acquisitions
and additions to property, plant and equipment. During the Fiscal 1998 Nine-
Month Period, the Company had net cash flows from financing activities of
$70,600,870, primarily due to the financing sources stated above, offset by
repayments of long-term debt of $3,785,485 and reductions in amounts due in
connection with acquisitions of $ 5,200,000. Cash flows from financing
activities of $23,490,469 during the Fiscal 1997 Nine-Month Period resulted
primarily from the issuance of convertible preferred stock, net of redemptions,
proceeds from the exercise of options and increases in short-term debt. These
cash flows resulted in an increase in cash of $413,196 during the Fiscal 1998
Nine-Month Period and a decrease in cash of $1,877,898 during the Fiscal 1997
Nine-Month Period.

                                       13

<PAGE>
 
As a result of the acquisitions completed to date, the Company currently has
several different data processing systems. These systems were implemented by
the individual operating units that were subsequently acquired by the Company.
The Company has made a preliminary assessment of the impacts on these systems of
reaching the year 2000. While some of these systems will accommodate the year
2000, others will not. The Company currently believes, those systems not
currently compliant with the year 2000 could be modified or replaced with
compliant systems of similar capabilities, including compliant systems currently
owned by the Company, for less than $300,000. However, the Company does not
anticipate actually spending money to alter these systems because an assessment
of its data processing needs indicated an enterprise resource planning system
solution was desirable. The Company has contracted for the software, hardware
and consulting services required for the project to be completed before the year
2000. The new system will be year 2000 compliant and will meet all information
systems requirements. The cost of this implementation is not expected to exceed
$4,000,000.

RESULTS OF OPERATION

Selected information concerning the results of operations (dollars in thousands)
is summarized as follows:

<TABLE>
<CAPTION>
                                                 Nine-month period                    Three-month period 
                                                  ended March 31,                       ended March 31,
                                            ---------------------------            -------------------------- 
                                             1998                1997               1998               1997
                                             ----                ----               ----               ----
<S>                                <C>                  <C>                <C>                <C>
Net sales                                   $139,695             41,165             75,880             20,223
Gross profit                                  30,486             10,159             18,257              5,392
Percentage of net sales                         21.8%              24.7%              24.1%              26.7%
Operating expenses                            27,442             10,814             14,763              3,981
Percentage of net sales                         19.6%              26.3%              19.5%              19.7%
</TABLE>

The increases in the dollar amounts of the above items are primarily due to the
Company's Acquisition Program described above which results in certain
operations not being included for the entire time periods listed above.
Furthermore, companies acquired since July 1, 1996 have generally been larger
and more profitable than those acquired prior to that date.

During the Fiscal 1998 Nine-Month Period, the Company's net sales was adversely
impacted by the recent economic conditions in the Pacific Rim countries. Both E.
F. Burlingham & Sons and Olsen Fennell Seeds, Inc. have significant sales to
customers in the Pacific rim. In addition, weather conditions in the areas that
grow a significant amount of alfalfa seed that is sold for planting in very warm
climates resulted in a relatively small crop being harvested in 1997. This
resulted in reduced amounts of seed available for sale in the Fiscal 1998 Nine-
Month Period. Weather in the United States has been significantly impacted by an
"El Nino" weather pattern. Several regions have been particularly hard hit by
significant rainfall and flooding which has reduced the planting acreage for
forage and turf crops. This has negatively impacted the Company's business to
date but it is possible that a portion of sales could recover in the last fiscal
1998 quarter.

The increase in the amount of gross profit is due to the acquisitions as
described above.  The decrease in the gross profit percentage is primarily due
to a significant change in the mix of products sold resulting from recent
acquisitions which have a higher percentage of turfgrass seed sales that have
historically commanded lower margins than forage seeds.  Many turfgrass seed
companies use their suppliers, who are typically large farmers that grow seed,
to also clean, process, package, store, and finance the seed prior to purchase.
This results in lower margins being captured by the turfgrass seed companies.
The Company's goal is to raise gross margins over the next several years as a
result of the Company's attempt to consolidate the forage and turfgrass sectors
of the seed industry, vertically integrate its operations, and shift its product
lines from primarily public varieties (commodities) to proprietary (value added)
products.

To accomplish the Company's business strategy, it has been necessary to build
its operational infrastructure ahead of revenue growth.  As revenue continues to
grow, operating expenses as a percentage of sales is expected to decrease due to
the spreading of the infrastructure costs over a larger sales base.  This ratio
is expected to continue to decline as revenue growth continues to exceed growth
in expenses and operating synergies occur through integration of the acquired
companies into cohesive units.

                                       14
<PAGE>
 
The major components of operating expenses are personnel costs, occupancy
expense, vehicle and shipping expenses, outside services, travel and
advertising, all of which increased substantially in the current year compared
to the prior year. These increases are primarily due to the seed operations of
new acquisitions. After acquisition, the Company has been able to significantly
reduce expenses, as compared to historical operations prior to the effective
date of some acquisitions, as a result of operating efficiencies. For example,
the Company has combined what were historically six separate operations into
three operations. The major components of operating expenses (in thousands) were
as follows:

<TABLE>
<CAPTION>
                                Nine-month period                  Three-month period
                                 ended March 31,                     ended March 31,
                        --------------------------------        ------------------------
                            1998              1997                1998              1997
                           -----              ----                ----              ----
<S>                    <C>               <C>                    <C>              <C>
Personnel costs             $13,503             5,262            6,797              2,114
Occupancy expenses            1,701             2,211            1,039                827
Vehicle and  shipping         4,657               735            2,651                447
Outside services                667               604              208                263
Travel                        1,168               582              664                244
Advertising and promotion     1,469               512              962                239
 
</TABLE>

Research and development expenditures were $542,218 in the three-month period
ended March 31, 1998 (the "Fiscal 1998 Three-Month Period") and $1,461,715 in
the Fiscal 1998 Nine-Month Period compared to $284,861 and $663,695 in the prior
year, substantially all of which were attributable to W-L Research, Inc., E.F.
Burlingham & Sons, Olsen Fennell Seeds, Inc., and Lofts, all of which have major
research and development programs. As the Company transforms its forage and
turfgrass seed businesses to proprietary products with increased gross margins,
the Company expects research and development expenses as a percentage of sales
will continue to increase and to eventually be similar to public companies in
the other proprietary seed sectors.

The Company's interest expense increased to $1,794,287 in the Fiscal 1998 Three-
Month Period and $2,904,358 in the Fiscal 1998 Nine-Month Period compared to
$381,647, and $1,002,773 in the prior year. This was primarily due to increasing
the Company's line of credit plus additional borrowings to finance its growth.
Interest expense also includes imputed interest of $513,369 in the Fiscal 1998
Nine-Month Period compared to $201,824 in the Fiscal 1997 Nine-Month Period to
account for the period of time between the effective and closing dates of the
Company's acquisitions.

Included in other income is earnings of Seedbiotics, L.L.C., an entity owned 
fifty percent by the Company, of $444,961 and $924,842 for the Fiscal 1998 
Three-Month Period and the Fiscal 1999 Nine-Month Period compared to $224,866 
and $282,937 in the prior year.

As discussed in note F of Notes to the Consolidated Financial Statements,
developments within the Company during the three-month period ended March 31,
1998, have allowed the Company to reach the conclusion it is more likely than
not its deferred tax assets will be realized and the valuation allowance
previously provided against them has been removed resulting in an income tax
benefit of approximately $2.9 million.

Net earnings (loss) for the Company was $4,926,114 for the Fiscal 1998 Three-
Month Period and $4,317,634 for the Fiscal 1998 Nine-Month Period compared to
$1,285,044 and $(1,188,926) in the prior year as a result of the items discussed
above. Average common shares outstanding used in computing earnings (loss) per
share increased due to additional shares issued, primarily for cash,
acquisitions, options and warrants.

As discussed in note C of Notes to the Consolidated Financial Statements, the
Company recently became aware of a position taken by the staff of the Securities
and Exchange Commission regarding securities, such as the Company's convertible
preferred stock, containing conversion features allowing for conversion into
common stock at a discount from future quoted market prices. Application of this
position required the Company to restate its financial statements to allocate an
amount to the conversion feature and to account for it as a return to the
holders of the securities, as well as to impute dividends on the convertible
preferred stock. This resulted in the net earnings (loss) attributable to common
stock (on which earnings (loss) per share is computed) being decreased by
$26,718 to $4,899,396 and $80,154 to $4,237,480 for the Fiscal 1998 Three-Month
Period and Fiscal 1998 Nine-Month Period and by $225,359 to $1,059,685 and by
$3,203,045 to $(4,391,971) for the three-month period ended March 31, 1997 (the
"Fiscal 1997 Three-Month Period") and the Fiscal 1997 Nine-Month Period. In
addition, net earnings (loss) per common share changed from $0.07 to $0.06 for
the Fiscal 1997 Three-Month Period and from $(0.09) to $(0.33) for the Fiscal
1997 Nine-Month Period. Applying this position and the restatement of 1997
periods had no impact on the Company's consolidated balance sheet, statements of
cash flows, or the net sales, costs, expenses, and net earnings (loss) shown on
the Company's consolidated statements of operations.

                                       15
<PAGE>
 
Furthermore, as discussed in note D of Notes to Consolidated Financial
Statements, the Company has applied Statement of Financial Accounting Standards
No. 128 that required a retroactive change in the presentation of earnings per
share upon initial adoption. 

INFLATION

Management does not consider that inflation has had a significant effect on the
Company's operations to date.  The cost of seed products is largely affected by
seed yields and alternative crop prices, which have not generally been greatly
impacted by inflation.  However, there has been some upward movement in the cost
of goods sold as a result of worldwide shortages of crops such as corn and
wheat.  The costs which are normally impacted by inflation, such as wages,
transportation and energy, are a relatively small part of the Company's total
operations.  However, the Company remains subject to possible significant
inflation in Mexico, Argentina and other foreign countries.

IMPACTS OF ACCOUNTING STANDARDS NOT YET ADOPTED

The impacts of recently adopted accounting standards is discussed in Note 2 of
Notes to Consolidated Financial Statements in the Company's Form 10-KSB for the
year ended June 30, 1997.

PART II - OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  a.      The annual meeting of stockholders (the "Annual Meeting") was held on 
          February 23, 1998.

  b.      Johnny R. Thomas, Scott J. Loomis, John C. Francis, Kent Schulze, 
          James Hopkins and Richard P. Budd were re-elected to the Board of
          Directors.

  c.      (i) Election of the Board of Directors:
<TABLE> 
<CAPTION> 


                                                   Votes
                                                 Against or      Abstentions
          Nominee                Votes for        Withheld      or Non-Votes
          -------                ---------        --------      ------------
          <S>                   <C>              <C>            <C> 

          Johnny R. Thomas      26,514,492            0             62,010 
        
          Scott J. Loomis       26,514,492            0             62,010 

          John C. Francis       26,514,492            0             62,010 

          Kent Schulze          26,514,492            0             62,010 

          James W. Hopkins      26,514,492            0             62,010 

          Richard P. Budd       26,514,492            0             62,010 
</TABLE> 

          (ii)  Ratification of Amendments to the Company's 1994 Employee Stock 
                Option Plan:

          For 12,727,767        Against 8,591,641       Non-Votes     0
              ----------                ---------                 ---------

          (iii) Adoption of an amendment to the Company's Articles of
                Incorporation increasing the number of authorized shares from
                50,000,000 to 75,000,000:

          For 24,452,457        Against 1,442,202       Non-Votes 94,923
              ----------                ---------                 ---------

          (iv)  Ratification of KPMG Peat Marwick LLP as auditors:

          For 26,322,576        Against 135,413         Non-Votes 118,513
              ----------                ---------                 ---------

                                      16
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

  (a)  EXHIBITS

          27.1 Financial Data Schedule

  (b)  REPORTS ON FORM 8-K

          The Company has filed the following current reports on Form 8-K during
          the quarter for which this Report is filed:

<TABLE> 
<CAPTION> 

               Date                          Event
               ----                          -----
<S>                          <C> 
          January 6, 1998    Acquisition of Lofts Seed, Inc. and affiliates
          January 9, 1998    Acquisition of Seed Corporation of America and 
                             Green Seed Company Limited Partnership
          January 26, 1998   Pending acquisition of Willamette Seed Company
          March 31, 1998     Private placement of common stock
</TABLE> 

                                       17 
<PAGE>
 

                                  SIGNATURES
                                        

     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.



                                    AGRIBIOTECH, INC.,

 
 
May 15, 1998                        By:  /s/ Henry A. Ingalls
------------                             --------------------
Date                                     Henry A. Ingalls,
                                         Vice-President/CFO

                                      18