NutraCea 8-K 6-19-2007
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 (Date of earliest event reported): June 19, 2007
NUTRACEA
(Exact
Name of Registrant as Specified in Charter)
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California
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0-32565
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87-0673375
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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5090
N. 40th Street, Suite 400
Phoenix,
AZ
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85018
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (602) 522-3000
(Former
name or Former Address, if Changed Since Last Report.)
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):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01 Entry
into a Material Agreement.
On
June
22, 2007, NutraCea entered into an Operating Agreement (“Agreement”) with
Pacific Advisors Holdings Limited (“PAHL”), a company incorporated under the
laws of British Virgin Islands, that has relationships with rice mills in the
Republic
of Indonesia, Vietnam, Thailand, Malaysia, Australia, New Zealand and Singapore.
Pursuant to the Agreement, NutraCea and PAHL formed a Delaware limited liability
company by the name of Grain Enhancement, LLC (the “Joint Entity”). The Joint
Entity was formed to construct and operate multiple
rice bran stabilization facilities (“Facilities”) in the Republic of Indonesia,
Vietnam, Malaysia, Singapore and Thailand and was granted an exclusive license
and distribution rights for the sale of NutraCea’s stabilized rice bran (“SRB”)
and other products throughout these countries, and Australia and New Zealand
(the “Territory”).
Pursuant
to the terms of the Agreement, NutraCea and PAHL each own 47.5% of the
Joint
Entity, and all of the voting rights of the Joint Entity.
Certain
advisors to this transaction own a combined total of 5% of the Joint
Entity,
but have
no voting rights in the Joint
Entity. PAHL is responsible for the day-to-day operations of the Joint Entity,
and a finance committee, comprised of one member appointed by NutraCea and
one
member appointed by PAHL, will control the finances of the Joint Entity. PAHL
has agreed to obtain all appropriate governmental and legal permits relating
to
the operation of the Joint Entity.
NutraCea
and PAHL agreed to contribute an aggregate of $10,000,000 (U.S.) for the initial
funding and operating of the Joint Entity. The $10,000,000 (U.S.) will be
contributed one-half by each party pursuant to an agreed upon schedule over
a
period continuing through August of 2008. On or before June 30, 2007, NutraCea
and PAHL each agree to transfer $1,500,000
(U.S.) for a total of $3,000,000 (U.S.) of initial capital. The Joint Entity
will pay PAHL a management fee for the oversite of the facilities that are
constructed and operating.
Pursuant
to the Agreement, the parties entered into a two year Supply Agreement dated
as
of June 22, 2007 (the “Supply Agreement”) in which NutraCea agreed to supply the
Joint Entity with
SRB
and SRB derivative products as required by the Joint Entity.
The
Agreement also provides that the parties will enter into one or more
Rice
Bran
Stabilization Equipment Leases (“Leases”), in which NutraCea will agree to lease
to the Joint Entity certain equipment necessary for stabilizing SRB (the
“Equipment”) for fifteen year terms. NutraCea will retain all rights, title and
interest in the Equipment and the right (and obligation) to operate, maintain,
and repair the Equipment.
Concurrently
with the Agreement, NutraCea entered into a License and Distribution Agreement
dated June 22, 2007 (“License Agreement”) in which NutraCea granted PAHL a
perpetual and exlusive license and distribution rights for the production and
sale of SRB and SRB derivative products in the Territory (the “License”).
PAHL
agreed
not to distribute or market
any items competitive with NutraCea’s SRB and SRB derivative products outside of
the Territory. For
the
term of the License Agreement and five years therafter, PAHL will not produce
or
attempt to produce any equipment for the stabilization of rice bran, and will
only use rice bran stabilization technologies or equipment manufactured and
supplied by NutraCea. The
rights to produce
and
operate this equipment will remain with NutraCea.
In
exchange for the License, PAHL agreed to pay NutraCea a fee in the amount of
$5,000,000 (U.S.) on five year payment terms, together with
interest.
Also
concurrently with the execution of the Agreement, NutraCea has granted
PAHL
a
warrant to acquire 1,500,000 shares of NutraCea Common Stock at a price per
share of $5.25 (U.S.) (the “Warrant”). NutraCea
has agreed to register the shares underlying the Warrant subject to certain
cutback restrictions set forth in the Warrant.
The
Warrant shall have a term of one
year;
one-fourth of the Warrant will become exercisable as of July 1, 2007 and one
fourth of the Warrant shall vest each quarter thereafter; provided however,
that
PAHL has met certain performance milestones agreed to between the parties.
Item
3.02 Recent
Sales of Unregistered Securities
See
Item
1.01 above, which disclosures are incorporated herein by reference. The issuance
of the Warrant was completed in accordance with the exemption provided by
Section 4(2) of the Securities Act of 1933, as amended.
Item
5.03 Amendment
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
Effective
June 19, 2007, our board of directors voted to amend Article III, Section 2
of
our bylaws setting the current number of directors at seven (7). Prior to the
amendment, our bylaws had set the number of directors at eight (8). A copy
of
the amended section of the by-laws is attached hereto as Exhibit 3.1.
Item
9.01 Financial Statements and Exhibits
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Amended
Bylaws of NutraCea.
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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.
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NUTRACEA
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Date:
June 25, 2007
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By:
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/s/
Brad Edson
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Brad
Edson
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Chief
Executive Officer
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(Duly
Authorized Officer)
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