EL DORADO HILLS, Calif., Feb 16, 2007 /PRNewswire-FirstCall via COMTEX/ -- NutraCea (NTRZ) , a leader in research and the production and marketing of stabilized rice bran and its derivatives announced today that they have entered into definitive agreements with institutional and accredited investors with respect to a private placement of 20,000,000 shares of common stock at a purchase price of $2.50 per share, for gross proceeds of $50,000,000, before payment of placement agent commissions and offering expenses. Investors also will receive warrants to purchase 10,000,000 shares of common stock at an exercise price of $3.25 per share expiring in five years. Rodman & Renshaw LLC served as exclusive placement agent for the transaction.
Brad Edson, Chief Executive Officer and President of NutraCea stated, "This financing will strengthen NutraCea's ability to expand its proprietary stabilization plants both domestically and in the international markets, allowing us to bring our technology into regions of the world where large scale rice production can provide the raw materials to manufacture our core products. This opportunity for rapid growth positions us to make stabilized rice bran and rice bran derivatives accessible to global communities as a food ingredient, an economical solution for the reduction of malnutrition and for nutraceutical products that address a variety of health issues."
With its current cash balance and its existing contractual commitments, NutraCea believes that it has successfully secured the necessary capital to strengthen its strategic position in the global food marketplace. As an agricultural and technology driven company with added financial resources, NutraCea can now deliver commercially stable rice bran and value added derivative products on a larger scale to help satisfy the rapidly growing world wide demand. The recent sharp price increase in other grain products such as corn and wheat, make stabilized rice bran an even more attractive economic alternative.
The financing described herein was made only to accredited investors in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The securities issued in this financing have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the "SEC") or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. As part of the transaction, NutraCea has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issued in the offering, including the shares of common stock issuable upon exercise of the warrants. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities discussed herein, nor may there be any sale of the securities in any jurisdiction in which such offering would be unlawful.
NutraCea is a leader in stabilized rice bran nutrient research and dietary supplement development. Through its wholly owned subsidiary RiceX, the company manufacturers as well as distributes products and food ingredients made from Rice Bran through its proprietary technology and processes. The Company has developed intellectual properties to create a range of proprietary product formulations, delivery systems and whole food nutrition products. NutraCea's proprietary technology enables the creation of food and nutrition products from rice bran, normally a wasted by-product of standard rice processing. In addition to its whole foods products, NutraCea develops families of health- promoting "nutraceuticals," including natural arthritic relief and cholesterol-lowering products. More information can be found in the company's filings with the SEC and you can visit the NutraCea web site http://www.NutraCea.com.
Forward Looking Statements
This release contains forward-looking statements, including statements regarding our production capability, revenue growth and profitability. Actual results may differ from those projected due to a number of risks and uncertainties, including, but not limited to the matters specified in the Company's filings with the Securities and Exchange Commission. These statements are made based upon current expectations that are subject to risk and uncertainty. The Company does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in the Company's filings with the Securities and Exchange Commission, including the company's most recent periodic report.