UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b -25
NOTIFICATION OF LATE FILING
Check One:
|X| Form 10-K |_| Form 20-F |_| Form 11-K |_| Form 10-Q |_| Form N-SAR
|_| Form N-CSR
For Period Ended: December 31, 2008
|_| Transition Report on Form 10-K
|_| Transition Report on Form 20-F
|_| Transition Report on Form 11-K
|_| Transition Report on Form 10-Q
|_| Transition Report on Form N-SAR
For the Transition Period Ended: __________________________
If the notification relates to a portion of the filing check above, identify the
Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
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NutraCea
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Full Name of Registrant
N/A
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Former Name if Applicable
5090 N. 40th Street, Suite 400
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Address of Principal Executive Office (Street and Number)
Phoenix, Arizona 85018
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City, State and Zip Code
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PART II -- RULES 12b - 25(b) and (c)
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If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b - 25(b), the following
should be completed. (Check box if appropriate.)
(a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort
expense;
(b) The subject annual report, semi-annual report, transition
report on Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form
N-CSR, or a portion thereof will be filed on or before the
|X| fifteenth calendar day following the prescribed due date; or
the subject quarterly report or transition report on Form
10-Q, or subject distribution report on Form 10-D, or a
portion thereof, will be filed on or before the fifth calendar
day following the prescribed due date; and
(c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
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PART III - NARRATIVE
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State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, N-CSR, or the transition report or portion thereof could not be filed
within the prescribed time period. (Attach extra sheets if needed.)
As previously disclosed, NutraCea's Audit Committee is conducting an
independent review of certain matters with respect to the Company's accounting
and reporting practices, including the appropriateness and/or timing of
recognition of revenues from certain transactions in 2007, and the adequacy of
internal control over financial reporting and disclosure controls and
procedures.
Based on the preliminary finding of that independent review, in its
Current Report on Form 8-K filed on February 23, 2009, NutraCea disclosed that
the Board of Directors, based upon the recommendation of the Audit Committee,
determined that NutraCea should restate its financial statements for the year
ended December 31, 2007, including the associated second, third and fourth
fiscal quarters in 2007 and all of the quarters in 2008, and that those
financial statements should not be relied upon.
NutraCea is working diligently to complete the restatement, complete
the preparation of its financial statements for the year ended December 31,
2008, and complete its assessment of the effectiveness of its internal control
over financial reporting at December 31, 2008. However, NutraCea is unable to
complete this and file its 2008 Form 10-K on or before the prescribed due date
of March 16, 2009.
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PART IV - OTHER INFORMATION
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(1) Name and telephone number of person to contact in regard to this
notification.
Olga Hernandez-Longan (602) 522-3000
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under section 13 or 15(d) of
the Securities Exchange Act of 1934 or section 30 of the Investment
Company Act of 1940 during the preceding 12 months or for such shorter
period that the registrant was required to file such report(s) been
filed? If the answer is no, identify report(s).
|X| Yes |_| No
(3) Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject
report or portion thereof?
|X| Yes |_| No
During December 2008, the Audit Committee (the "Audit Committee") of
the Board of Directors of NutraCea (the "Company") commenced an internal review
of certain matters with respect to the Company's accounting and reporting
practices, including the appropriateness and/or timing of recognition of
revenues from certain transactions in 2007, and the adequacy of internal control
over financial reporting and disclosure controls and procedures. The Audit
Committee retained independent outside counsel and forensic accounting
consultants to assist in the investigation.
As a result of the preliminary findings of the investigation, the Board
of Directors of the Company has determined, based on the recommendation of the
Audit Committee, that the Company should restate its financial statements for
the year ended December 31, 2007, including the associated second, third and
fourth fiscal quarters in 2007 and all of the quarters in 2008. Accordingly, on
February 17, 2009, the Board of Directors determined, based on the
recommendation of the Audit Committee, that the Company's previously issued
financial statements included in filings with the Securities and Exchange
Commission for these periods should no longer be relied upon. Similarly, related
press releases, reports and shareholder communications describing the Company's
financial statements for these periods should no longer be relied upon.
Based on its review to date, the Audit Committee has determined that
the Company improperly recognized revenue on two transactions in 2007 with
entities that are not currently customers of the Company.
The Company recognized revenue in the second quarter of 2007 on a $2.6
million sale of its Dr. Vetz PetFlex brand product with respect to which the
applicable criteria for revenue recognition were not met. Based upon facts
discovered during the Audit Committee investigation, the Company has now
concluded that a $1.0 million down payment received by the Company in that
transaction was provided to the purchaser through a loan from a person who at
the time was a consultant to and a former officer of NutraCea, and that the
evidence originally relied upon to determine and support the purchaser's ability
to pay the remaining $1.6 million receivable balance was subsequently determined
to be inaccurate.
The Company also determined that a $2.0 million sale of its RiceNShine
product in December 2007 did not meet accounting requirements for recognition of
revenue in bill and hold transactions and that the transaction should not have
been recognized as revenue in the Company's 2007 results. However, the Company
expects that the transaction and revenues from the transaction will be
recognized in the Company's results for 2008 and possibly 2009.
Based on the findings of the Audit Committee's investigation to date,
the Company currently estimates that $4.6 million of the approximately $22.2
million of previously reported revenue for 2007 is expected to be affected by
the restatement. With respect to the transaction in the second quarter of 2007,
approximately $2.6 million of the adjustment is not expected to be recorded as
revenue. However, with respect to the Company's reported results for the 2007
year, when the purchaser did not pay the $1.6 million receivable balance, the
Company established an $800,000 reserve against the receivable balance in the
third quarter of 2007 and an additional reserve of $800,000 in the fourth
quarter of 2007. That reserve is expected to be reversed, which would reduce the
Company's reported expense for 2007 by $1.6 million.
With respect to the December 2007 transaction, the Company expects that
approximately $2.0 million of the adjustment for 2007 will be reversed and will
be recorded as revenue during 2008 and potentially in 2009, when the criteria
for the recognition of revenue was ultimately met, resulting in an increase in
reported revenue for those quarters compared to previously reported results. The
Company is still evaluating the amounts that will be recorded in those quarters.
The Company preliminarily estimates that the adjustments will also (i)
increase the net loss in 2007 by approximately $1.1 million, (ii) decrease the
net loss in the reported periods of 2008 and 2009 by an amount that the Company
has not yet determined, and (iii) reflect a deferred liability of $1.0 million
pending resolution of certain issues relating to the $1.0 million down payment
provided in connection with the Dr. Vetz PetFlex transaction in the second
quarter of 2007 for which the Company has determined no revenue should have been
recognized. However, as the Audit Committee's review is ongoing, this
information is subject to change based upon the final findings of the
investigation and completion of the audit and review of the Company's restated
financial statements by its independent registered public accounting firm, and
the cumulative effect of the adjustments could change in such restated financial
statements.
The Company and the Audit Committee are continuing to review and assess
the preliminary findings of the investigation and are also assessing the effect
of the restatement on the Company's internal control over financial reporting
and its disclosure controls and procedures. Further investigation and assessment
may result in additional matters that require restatement for the periods
referenced above or for additional fiscal periods. The Company will not reach a
final conclusion on the restatement's effect on internal controls and disclosure
controls and procedures until completion of the review and restatement process.
The Company expects to implement remediation steps in connection with the
ultimate conclusion of the investigation.
The Company is working diligently to complete the restatement of its
prior period financial statements. The Company can give no assurance as to the
ultimate findings of its ongoing review or the impact of these matters on the
Company's results of operations or financial condition as reported for prior
periods or as expected to be reported for its recently completed fiscal year.
NutraCea received a letter from the Securities and Exchange Commission
(the "Commission") in mid-January 2009 indicating that it has opened an informal
inquiry, and also received a subsequent request for documents in February 2009
requesting that NutraCea voluntarily produce documents relating to a number of
transactions, including the transactions mentioned above. NutraCea is in the
process of responding to the request for documents. NutraCea voluntarily
reported to the Securities and Exchange Commission that the Audit Committee was
conducting an internal review of certain matters.
The Company has not completed its analysis of the expected changes in
results of operations for the fiscal year ended December 31, 2008 as compared to
the previous fiscal year and is unable to provide a narrative and quantitative
explanation of these changes at this time. A narrative explanation of the
anticipated changes will be set forth in the Company's annual report on Form
10-K for fiscal 2008.
Safe Harbor for Forward Looking Statements
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This notification includes "forward looking statements" that involve
uncertainties and risks. There can be no assurance that actual results will not
differ from the Company's expectations or any results expressed or implied by
such forward looking statements. Factors which could cause materially different
results include, among others, the risk that the final conclusion of the Audit
Committee's investigation could result in a determination that the effect of the
issues under review are materially greater or lesser than the Company currently
believes to be the case; the risk that the investigation could take longer than
expected because of unanticipated issues; the risk that these matters could
adversely affect the Company's ability to remain current in its filings with the
Commission; additional issues that may arise in connection with the Audit
Committee's ongoing investigation or the audit by the Company's independent
public accounting firm; risks of damage to the Company's business and reputation
arising from these matters; risks arising from the Commission's investigation or
other possible litigation or regulatory action; and other risks and
uncertainties discussed more fully in the Company's SEC filings, including those
discussed under Item 1A, "Risk Factors," in the Company's annual report on Form
10-K for the year ended December 31, 2007, and in subsequent quarterly reports
on Form 10-Q. The Company disclaims any obligation to update or correct any
forward-looking statements made herein due to the occurrence of events after the
issuance of this report, except as required under federal securities laws.
NutraCea
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(Name of Registrant as specified in its charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: March 16, 2009 By: /s/ Olga Hernandez-Longan
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Olga Hernandez-Longan,
Chief Financial Officer