Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
|
|
¨
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
Item
1.01 Entry
into a Material Definitive Agreement.
Private
Placement
On
September 28, 2005, NutraCea (“NutraCea or the “Company”) entered into a
Securities Purchase Agreement (the “Purchase Agreement”) and a Registration
Rights Agreement (the “Registration Rights Agreement”) in connection with a
private placement of its securities to certain investors for aggregate gross
proceeds of approximately $7.85 million (approximately $7.3 million after
estimated offering expenses). Upon closing of the transaction on October
4,
2005, the investors purchased an aggregate of 7,850 shares of Series B
Convertible Preferred Stock of the Company (the “Preferred Shares”) at a price
of $1,000.00 per share pursuant to the Purchase Agreement. The Preferred
Shares
can be converted to shares of NutraCea common stock at a conversion rate
of
2,000 shares of common stock for each Preferred Share issued in the transaction.
The Preferred Shares are subject to the terms and conditions of the Certificate
of Determination, Preferences and Rights filed herewith as Exhibit 3.1.
Additionally, pursuant to the Purchase Agreement, the investors were issued
warrants (the “Warrants”) to purchase an aggregate of 7,850,000 shares of
NutraCea common stock at an exercise price of $0.70 per share. The Warrants
have
a term of five years and are immediately exercisable.
Pursuant
to the Registration Rights Agreement, the Company is obligated to file a
registration statement with the Securities and Exchange Commission within
45
days of the closing of the transaction covering the possible resale from
time to
time in the future of the shares of common stock underlying the Preferred
Shares
and the Warrants. The Registration Rights Agreement provides for certain
payments by the Company to the investors if the registration statement is
not
filed or does not become effective before dates specified in that agreement.
Each of the Company and the investors has agreed to indemnify the other party
and certain affiliates against certain liability related to the registration
statement.
Halpern
Capital, Inc. acted as advisor and placement agent for the financing and
received a customary fee based on aggregate gross proceeds received from
the
investors and a warrant to purchase 1,099,000 shares of the Company’s common
stock at an exercise price per share of $0.50.
The
foregoing summary of the terms and conditions of the Purchase Agreement,
the
Registration Rights Agreement and the Warrants does not purport to be complete
and is qualified in its entirety by reference to the full text of each of
the
aforementioned documents attached as Exhibits hereto, and which are hereby
incorporated herein by reference.
Employment
Agreements
In
connection with the merger involving The RiceX Company (“RiceX”), NutraCea and
RiceX entered into employment agreement amendments dated September 30, 2005
with
each of Todd C. Crow and Ike E. Lynch for executive officer positions. These
employment agreement amendments were contingent upon the closing of the merger
involving NutraCea and the RiceX and became effective upon such closing on
October 4, 2005. Pursuant to the terms of the employment agreement amendments,
NutraCea assumed the employment agreements that Messrs. Crow and Lynch had
entered into with RiceX.
Title
and Salary.
Mr.
Crow has the title of Chief Financial Officer of NutraCea and will receive
an
annual base salary of $150,000. Mr. Lynch has the title of Chief Operating
Officer of NutraCea and will receive an annual base salary of $150,000.
Term.
Each of
Mr. Crow’s and Mr. Lynch’s employment agreements, as amended have a term of
three years, beginning on October 4, 2005.
Severance
Benefits.
If the
employment of Mr. Crow or Mr. Lynch is terminated by NutraCea without “cause”
(as defined in the employment agreements, as amended), then such executive
will
be entitled to receive an amount equal to the greater of (i) the monthly
base
salary multiplied by the number of months remaining on the term of the
employment agreement, and (ii) one year of base salary. If Mr. Crow is
terminated as a result of a “change of control” (as defined in his employment
agreement, as amended) and Mr. Crow is not employed in the same capacity
or
being paid the same base salary by the new entity, then Mr. Crow shall be
entitled to receive a severance payment equal to two (2) years of base salary,
or the balance remaining to be paid under the terms of the employment agreement,
whichever is greater. If Mr. Lynch is terminated as a result of a “change of
control” (as defined in his employment agreement amendment, as amended) and Mr.
Lynch is not employed in the same capacity or being paid the same base salary
by
the new entity, then Mr. Lynch shall be entitled to receive a severance payment
equal to one hundred eighty thousand dollars ($180,000).
Item
2.01 Completion
of Acquisition or Disposition of Assets
On
October 4, 2005, NutraCea, through its wholly-owned subsidiary, Red Acquisition
Corporation, a Delaware corporation (“Merger Sub”), consummated its acquisition
of RiceX by merger (the “Merger”) pursuant to the terms of an Agreement and Plan
of Merger and Reorganization, dated April 4, 2005, by and among NutraCea,
Merger
Sub and RiceX (the “Merger Agreement”). At the effective time of the Merger,
Merger Sub merged with and into RiceX, with RiceX surviving the Merger as
a
wholly-owned subsidiary of NutraCea. Pursuant to the Merger Agreement and
as a
result of the Merger, each share of RiceX common stock outstanding immediately
prior to the effective time of the Merger was converted into the right to
receive 0.767995104 shares of NutraCea’s common stock.
In
connection with the Merger, NutraCea issued approximately 28,195,614 shares
of
NutraCea common stock to holders of RiceX common stock. In addition, NutraCea
assumed each outstanding option and warrant to purchase RiceX common stock
and
converted those options and warrants into options and warrants to purchase
an
aggregate of approximately 11,887,386 shares of NutraCea common
stock.
Pursuant
to the terms of the Merger, the number of directors serving on NutraCea’s Board
of directors increased from five to seven.
The
foregoing description of the Merger Agreement does not purport to be complete
and is qualified in its entirety by reference to the Merger Agreement, which
is
incorporated herein by reference.
Item
3.02
Recent Sales of Unregistered Securities
See
Item
1.01 above, which disclosures are incorporated herein by reference. The issuance
of Preferred Shares and Warrants was completed in accordance with the exemption
provided by Rule 506 of Regulation D of the Securities Act of 1933 and/or
Section 4(2) of the Securities Act of 1933, as amended. Each of the investors
represented that it is an accredited investor, as defined in Rule 501 of
Regulation D, and that it was acquiring the securities for its own account,
not
as nominee or agent, and not with a view to the resale or distribution of
any
part thereof in violation of the Securities Act.
See
Item
2.01 above, which disclosures are incorporated herein by reference. The issuance
of NutraCea common stock to holders of RiceX common stock and the assumption
by
NutraCea of options and warrants to purchase RiceX common stock in the Merger
was completed in accordance with the exemption provided by Section 3(a)(10)
of
the Securities Act of 1933, as amended.
Item
5.02 Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers.
(b) Effective
as of the closing of the Merger on October 4, 2005, James W. Kluber resigned
as
Chief Financial Officer of NutraCea and Patricia McPeak resigned as Chief
Executive Officer of NutraCea. Effective as of September 28, 2005, Ernie
Bodai
resigned as a director of NutraCea.
(c) (1) Effective
as of the closing of the Merger on October 4, 2005, Bradley Edson was appointed
as Chief Executive Officer of NutraCea. Mr. Edson has served as President
and
been a member of the Board of Directors of NutraCea since December 2004.
Mr.
Edson was formerly the Chairman and CEO of Vital Living Inc., a company that
primarily developed and marketed nutraceuticals. Prior to Vital Living, Mr.
Edson spent a decade developing a nationwide insurance agency focused on
distribution channels for specialty products for the retail market. Prior
to
that, Mr. Edson was a former principal and officer of a NASD broker/dealer
firm.
(2) Effective
as of the closing of the Merger on October 4, 2005, Todd C. Crow was appointed
as Chief Financial Officer of NutraCea. Mr. Crow has served as Vice President
of
Finance and Chief Financial Officer of RiceX since November 1998, and as
Secretary of RiceX since January 1999. From September 1997 to November 1998,
Mr.
Crow was RiceX’s Controller and from May 1996 to September 1997, he was RiceX’s
Chief Financial Officer. From 1989 until joining RiceX, Mr. Crow held senior
financial positions with the Morning Star Group, an agri-business holding
company, and Harter, Inc., a food-processing manufacturer. Mr. Crow has entered
into an amended employment agreement with NutraCea pursuant to which he was
appointed Chief Financial Officer. The material terms of such employment
agreement amendment are described in Item 1.01 above under the heading
“Employment Agreements.”
(3) Effective
as of the closing of the Merger on October 4, 2005, Ike E. Lynch was appointed
as Chief Operating Officer of NutraCea. Prior to joining NutraCea, Mr. Lynch
currently served as RiceX’s CEO and Vice President of International Business
Development and since January 1997, President and Chief Operating Officer
of
RiceX Nutrients, Inc. From 1966 through 1982, Mr. Lynch was employed by the
H.
J. Heinz Company in various management roles, culminating with the President
and
CEO position of the Hubinger Company, a subsidiary of Heinz. In 1982, Mr.
Lynch
left Heinz to become President and CEO of Dawn Enterprises LLC, specializing
in
Ethanol production and marketing. Mr. Lynch left Dawn Enterprises in 1989
to
form Centennial Foods, Incorporated, where he served as President and Chief
Executive Officer until RiceX’s acquisition of Centennial Foods in 1997. Mr.
Lynch has entered into an amended employment agreement with NutraCea pursuant
to
which he was appointed Chief Operating Officer. The material terms of such
employment agreement amendment are described in Item 1.01 above under the
heading “Employment Agreements.”
(d) Effective
as of the closing of the Merger on October 4, 2005, Steven W. Saunders, James
C.
Lintzenich and Edward L. McMillan, each of whom previously served as a director
of RiceX, were appointed to the board of directors of NutraCea. These
individuals were appointed pursuant to the terms of the Merger Agreement,
which
provides that following the closing of the Merger, the board of directors
of
NutraCea shall consist of three persons designated by NutraCea, three persons
designated by RiceX and one person mutually designated by NutraCea and RiceX.
Members
of NutraCea’s board of directors are eligible to receive 35,000 shares of
NutraCea common stock annually.
Item
9.01 Financial Statements and Exhibits.
(a) Financial
Statements of Businesses Acquired.
The
financial statements required by Item 9.01(a) of this Form 8-K will be filed
by
amendment within 71 calendar days after the date this Current Report on Form
8-K
must be filed.
(b) Pro
Forma Financial Information.
The
pro
forma financial information required by Item 9.01(b) of Form 8-K will be
filed
by amendment within 71 calendar days after the date this Current Report on
Form
8-K must be filed.
(c) Exhibits.
| |
2.1
|
Agreement
and Plan of Merger and Reorganization dated April 4, 2005 among
NutraCea,
The RiceX Company and Red Acquisition Corporation. (incorporated
by
reference to Exhibit 2.1 to NutraCea’s Form 8-K filed on April 4,
2005).
|
| |
|
Certificate
of Determination, Preferences and Rights of Series B Convertible
Preferred
Stock.
|
| |
|
Securities
Purchase Agreement, dated September 28, 2005, by and among NutraCea
and
the investors named therein.
|
| |
|
Registration
Rights Agreement, dated September 28, 2005, by and among NutraCea
and the
investors named therein.
|
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 hereunto
duly authorized.
|
|
|
|
|
|
Date:
October 4, 2005
|
|
NUTRACEA
|
| |
|
|
|
| |
|
By:
|
/s/
Brad Edson
|
| |
|
|
Brad
Edson
|
| |
|
|
Chief
Executive Officer
|
| |
|
|
(Duly
Authorized Officer)
|