RiceBran Technologies (RIBT) 8-KEntry into a Material Definitive Agreement

 

 

 

 

 

 

 

 

 

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On June 4, 2024, RiceBran Technologies (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with Funicular Funds, LP, a Delaware limited partnership (“Funicular”), pursuant to which the Company sold and issued, as applicable, (i) a secured promissory note in the principal amount of $500,000, as more fully described under “The Funicular Note” below and (ii) warrants (the “Funicular Warrants”) to purchase 625,000 shares of the Company’s common stock, no par value per share (the “Common Stock”), substantially in the form attached to the Purchase Agreement at the price and upon the terms and conditions set forth in the Funicular Warrants, for an aggregate purchase price of $500,000 (together, the “Private Placement”).

The Funicular Warrants will be exercisable at a price of $0.18 per share, subject to adjustments as provided under the terms of the Funicular Warrants. The Funicular Warrants are exercisable at any time on or after June 4, 2024 until the expiration thereof, provided that the Company has a sufficient number of shares of authorized Common Stock under the Company’s Restated and Amended Articles of Incorporation to permit such exercise. As required under the Purchase Agreement, the Company intends to solicit votes at the 2024 annual meeting of stockholders of the Company to increase the number of authorized shares of Common Stock to an amount that will permit the Company to issue the maximum number of shares of Common Stock issuable upon exercise of the Funicular Warrants. The Funicular Warrants have a term of five years from the date of issuance.

The Private Placement closed on June 4, 2024 (the “Closing Date”). The proceeds raised in the Private Placement were used for general working capital purposes.

In connection with the Private Placement, on June 4, 2024, the Company entered into a Registration Rights Agreement with Funicular (the “Registration Rights Agreement”), pursuant to which the Company agreed to file with the U.S. Securities and Exchange Commission within 180 days after the Closing Date a registration statement registering the resale of the shares of Common Stock underlying the Funicular Warrants (the “Resale Registration Statement”), and the Company agreed to use its reasonable best efforts to have the Resale Registration Statement declared effective as promptly as reasonably possible after the filing thereof. In certain circumstances, Funicular can demand the Company’s assistance with underwritten offerings and block trades, and Funicular will be entitled to certain piggyback registration rights.

On June 4, 2024, the Company entered into a secured promissory note (the “Funicular Note”) in favor of Funicular and guaranteed by its subsidiaries Golden Ridge Rice Mills, Inc., a Delaware corporation (“Golden Ridge”), and MGI Grain Incorporated, a Delaware corporation (“MGI Grain”), evidencing the loan made to the Company by Funicular in the aggregate principal amount of $500,000. The proceeds of the Funicular Note may be used for general working capital needs and other general corporate purposes. The Funicular Note has a stated maturity date of December 4, 2024. Interest accrues at a rate per annum equal to 13.50%. On each interest payment date, the accrued and unpaid interest shall, at the election of the Company in its sole discretion, be either paid in cash or paid in-kind. The obligations under the Funicular Note are guaranteed by Golden Ridge and MGI Grain, and are secured by a security interest in the assets (other than certain excluded assets, the “Collateral”) of the Company, Golden Ridge and MGI Grain, subject to the intercreditor agreement described below. The Funicular Note contains negative and restrictive covenants which limit the ability of the Company, Golden Ridge and MGI to, among other things, transfer or otherwise dispose of the Collateral, incur indebtedness and create, incur, assume or allow liens on the Collateral or any real property owned by the Company, Golden Ridge or MGI Grain.

On June 4, 2024, the Company, Golden Ridge and MGI Grain, as sellers, and Continental Republic Capital, LLC d/b/a Republic Business Credit, a Louisiana limited liability company (“Republic”), as purchaser, entered into a Seventh Amendment, Consent and Waiver to the Agreement for Purchase and Sale (the “Seventh Amendment”) to, among other things, (i) provide for Republic’s consent to the entry into the Funicular Note by the Company, Golden Ridge and MGI Grain and the transactions contemplated thereby and (ii) waive any defaults that may arise or result from the Company, Golden Ridge or MGI Grain’s entry into the Funicular Note and the transactions contemplated thereby. In connection with the Funicular Note and the Seventh Amendment, Republic and Funicular entered into an amendment to the intercreditor agreement (“Intercreditor Agreement Amendment”) between Republic and Funicular on June 4, 2024, which, among other things, subjects the Funicular Note to the terms of such intercreditor agreement.

The foregoing description of the Funicular Warrants, the Purchase Agreement, the Registration Rights Agreement, the Funicular Note and the Seventh Amendment are qualified in their entirety by reference to the full text of the form of the Funicular Warrant, the Purchase Agreement, the Registration Rights Agreement, the Funicular Note and the Seventh Amendment, which are attached as Exhibits 4.1, 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K, and which are incorporated herein in their entirety by reference.

The information contained above under Item 1.01 with respect to the Funicular Note is hereby incorporated by reference in response to this Item 2.03 of Form 8-K.

The information contained above under Item 1.01 is hereby incorporated by reference in response to this Item 3.02 of Form 8-K. The issuance of the Funicular Warrants in the Private Placement have not been registered under the Securities Act, and are instead being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act.

(d)  Exhibits