Troubled food-ingredient maker RiceBran Technologies (Nasdaq: RBIT) raised about $6.38 million through a private placement to expand into personal-care and cosmetics. 

The Scottsdale, Arizona-based company makes ingredients for food, nutritional supplements and animal-nutrition products. The company's products are derived from raw rice bran and refined to create stabilized rice bran, rice bran oil and defatted rice bran, RiBalance, RiSolubles, RiRiber and ProRyza products. RiceBran has operations in the U.S. and Brazil.

The company issued about 1.81 million shares of common stock to raise the money, it announced in an Oct. 1 filing with the U.S. Securities and Exchange Commission. Maxim Group LLC acted as the placement agent for the financing.

RiceBran plans to use the proceeds to establish personal-care and cosmetics manufacturing facilities in Irving, Texas, to strengthen its raw rice-bran acquisitions supply chain segment, to support the expansion of the Brazilian plant and for general corporate purposes.

"They see a demand for products in that marketplace," says company spokesman Fred Sommer. The company is also fielding requests from other groups that want to use its products in food and other goods. 

The company has continually experienced losses and negative cash flows from operations since it started in 2000, which raises substantial doubt about its ability to continue as a going concern, or without the threat of liquidation, RiceBran said in an Aug. 12 SEC filing. RiceBran brought in about $11.3 million in revenue for the three months ended June 30, compared with $9.4 million for that same period in 2013. The company had an accumulated deficit of more than $219 million as of Aug. 12.

On Aug. 30, the company's plant in Pelotas, Brazil had a structural problem, and the company announced it would be shut down for at least a week. The plant is still operational, and RiceBran has plans to make improvements to allow it to operate at a higher capacity, according to Sommer. 

RiceBran said in the Aug. 12 SEC filing that it had enough money to keep operating for the next year, and that it expected to raise additional funds to stay in business.

Previously, RiceBran closed an underwritten public offering in December, a private placement in March, another private placement in May, and a registered offering in June – bringing in more than $20 million. The capital enabled the company to make an acquisition, pay its secured debt in full and invest in Brazilian operations.

Some of the money raised was used to acquire H&N, an Irving, Texas,-based formulator and co-packer of products for $2 million in January. The company serves the natural products and natural supplement sectors. For the previous edition of Turnaround Tuesday, see Baxano Raises Money for Working Capital. 

For other struggling companies, check out Mergers & Acquisitions Distressed Company Watch List. 

Food and beverage industry