SCOTTSDALE, Arizona,
February 10, 2017 /PRNewswire/ --
- Company to use proceeds to repay
$4.2 million in current debt and for
strategic initiatives to realign its operations, significantly
reduce operating costs, and drive sustainable sales growth
- Financing expected to result in an annual cash
interest savings of approximately $500,000 net of OID and a reduction of the
net effective interest rate from 11.6% to 6.0%
RiceBran Technologies (NASDAQ:
RIBT and RIBTW) (the "Company" or "RIBT"), a global leader in the
production and marketing of value-added products derived from rice
bran, today announced that it has entered into definitive
agreements with a group of accredited investors for the purchase of
$6 million of non-convertible
original issue discount debentures and $2
million of convertible preferred stock.
The Company intends to use net proceeds from the offering to
repay approximately $4.2 million in
debt, including the repayment of all of its outstanding debt with
Great Elm Capital (formerly Full Circle Capital). The remaining
proceeds, net of expenses, will be used as working capital to fuel
the growth of the Company's rice bran ingredient business in both
the food-grade and animal nutrition markets as well as to begin the
implementation of the Company's strategic business realignment to
improve overall operating efficiencies.
Commenting on the financing, Dr. Robert
Smith, CEO of RiceBran Technologies, stated, "The completion
of this capital infusion is an important inflection point in
positioning our Company for future growth in order to build
significant shareholder value. With this capital we now have the
ability to move forward with our aggressive business plans and
streamlining efforts designed to drive future sales growth and
greatly improve our financial performance. We are confident that
the marked reduction in debt service costs coupled with the
operating efficiencies, we believe we can obtain through the
relocation of a majority of our operations to California in the heart of rice country, will
set the stage for us to meet the ingredient needs of large CPG and
specialty food companies. It will also enable us to achieve a
significant improvement in operating cash to fuel future growth.
Our products are perfectly positioned to meet growing consumer
demand for non-GMO foods that contain protein, fiber and are rich
in anti-oxidants. We look forward to using this capital to deliver
positive results for our shareholders in 2017 and beyond."
The $8 million offering (the
"Offering), includes a combination of debt and equity securities,
and is expected to close on February 10,
2017, subject to customary closing conditions. The debt
component of the offering consists of $6
million in non-interest bearing non-convertible original
issue discount senior secured debt maturing on February 10, 2019 and warrants to purchase a
total of 6,875,000 shares of Common Stock at a fixed exercise price
of $0.96 per share. The face value of
this original issue discount senior secured debt is $6.6 million, reflecting an aggregate original
issue discount of $600,000. In
connection with the issuance of the secured debt, the Company will
(i) issue warrants to purchase 6,875,000 shares of the Company's
Common stock, with an exercise price of $0.96 per share and (ii) reduce the per share
exercise prices from $5.87,
$5.27 and $5.25 to $0.96 of
885,010 Company warrants currently held by the purchases of the
secured debt. The equity component consists of $2 million of Series "G" convertible preferred
stock (the "Preferred Stock") convertible into 1,897,983 shares of
the Company's Common Stock, based on a conversion price of
$1.05375 per share. In addition, the
Company will issue warrants to purchase a total of 1,423,488 shares
of Common Stock to the holders of the Preferred Stock at an
exercise price of $0.96 per
share. None of the securities issued in connection with this
offering and debt restructuring contain price-based anti-dilution
provisions. The warrants will be exercisable upon the approval by
the Company's shareholders of the amendment to the Company's
articles of incorporation to increase the number of authorized
shares of Common Stock, and will expire five years from such date.
For a more detailed description of the Offering, please review our
current report on Form 8-K that will be filed with the Securities
and Exchange Commission in connection with this transaction.
The $4.2 million in debt
repayments includes approximately $4.0
million for the retirement of all of its outstanding debt
with Great Elm Capital. The Company also reached an agreement
with the holders of approximately $6.3
million of the Company's current subordinated debt to extend
the maturity of the debt for an additional year to May 10, 2019 and reduce the annual interest rate
from 11.75% to 7% in exchange for new warrants to purchase a total
of 3,484,675 shares of Common Stock at an exercise price of
$0.96 per share, the amendment of
existing warrants to purchase a total of 289,669 shares to reduce
the exercise price from $5.25 per
share to $0.96 per share, and the
payment of approximately $230,000 in
principal and approximately $270,000
in accrued interest. The Offering, debt repayment, and subordinated
debt restructuring will result in an annual cash interest savings
on the subordinated debt of approximately $325,000.
Brent Rosenthal, Chairman of the
Board of Directors of RiceBran Technologies, also commented,
"RiceBran Technologies has been undergoing a major transformation
in the past several months since I became the Chairman and this
financing is a very large step forward in reaching our goal of
generating significant shareholder value. We have significantly
increased the food industry experience of our board and management
team and together we have laid out a comprehensive vision to
monetize the intrinsic value of our intellectual property through
the execution of a strategic plan to target large CPG
opportunities. This financing removes a large overhang of debt
service and provides us with capital to begin the realignment of
our operations and upgrade of our facilities to meet the stringent
food safety standards of large CPG companies while reducing
inefficiencies. Our singular objective is to unlock the significant
value of our proprietary ingredients and products and we look
forward working together to build lasting value in the coming years
for the benefit of our stockholders."
Lake Street Capital Markets is acting as the sole placement
agent for the transaction.
The securities offered in the private placement have not been
registered under the Securities Act, or any state securities law.
Until the shares underlying the preferred stock and shares
underlying the warrants are registered, they may not be offered or
sold in the United States except
pursuant to an exemption from the registration requirements of the
Securities Act and applicable state laws. This press release shall
not constitute an offer to sell or the solicitation of an offer to
buy such common stock or warrants. Pursuant to registration rights
agreement, the company also has an obligation to file a
registration statement for the resale of the shares and shares
issuable pursuant to the warrants on or before April 3, 2017.
About RiceBran Technologies
RiceBran Technologies is a human food ingredient and animal
nutrition company focused on the procurement, bio-refining and
marketing of numerous products derived from rice bran. RiceBran
Technologies has proprietary and patented intellectual property
that allows us to convert rice bran, one of the world's most
underutilized food sources, into a number of highly nutritious
human food ingredient and animal nutrition products. Our target
markets are human food ingredients and animal nutrition
manufacturers and retailers, as well as natural food, functional
food and nutritional supplement manufacturers and retailers, both
domestically and internationally. More information can be found in
the Company's filings with the SEC and by visiting our website at
http://www.ricebrantech.com.
Forward-Looking Statements
This release contains forward-looking statements, including, but
not limited to, statements about RiceBran Technologies'
expectations related to consummating the financing transaction, the
use of proceeds from a financing transaction, implementing
strategic changes and streamlining operations. These statements are
made based upon current expectations that are subject to known and
unknown risks and uncertainties. RiceBran Technologies 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 this press release and in RiceBran
Technologies' filings with the Securities and Exchange
Commission, including its most recent periodic reports.
Investor Contact:
Ascendant Partners, LLC
Fred Sommer
(732) 410-9810
fred@ascendantpartnersllc.com
SOURCE RiceBran Technologies