CSR allows a company to reorganize under protection of the US Bankruptcy Code and emerge as a stronger company.

NutraCea voluntarily filed for a CSR in order to avail itself of the restructuring opportunities afforded all companies that file for protection under the US Bankruptcy Code. The CSR will allow NutraCea to execute a more focused business plan that exploits the company’s core assets.

NutraCea filed for CSR on November 10, 2009.

NutraCea explored several alternatives to filing before deciding to seek court protection. However, after reviewing its alternatives with its legal counsel and financial advisors, it concluded that a court supervised restructuring was a better alternative than an out-of-court restructuring process.

NutraCea is not going out of business. NutraCea intends to continue operations in its core businesses and, consistent with its previously announced revised business strategy, exit non-core activities.

NutraCea does not anticipate seeking court protection for its subsidiaries.

NutraCea’s management intends to emerge from CSR as soon as possible. There is no fixed time for a reorganization proceeding.

NutraCea has obtained Debtor in Possession (DIP) financing from Wells Fargo Bank. The new financing package includes a new DIP financing of $6.75 million.

NutraCea does not anticipate moving its headquarters outside of the Phoenix area.

As reflected in the Company’s recent 2008 10-K filing, NutraCea’s assets are significantly greater than its liabilities. In addition to significant tangible assets, NutraCea owns extensive proprietary technologies. Management believes that these assets, deployed correctly in combination with a renewed and focused business strategy, will facilitate a timely exit from CSR.

All pre-petition creditors are subject to the "automatic stay." This means they can’t sue NutraCea or take other collection actions unless the court authorizes them to do so. The amount that will ultimately be paid on these claims will be determined by NutraCea’s reorganization plan, which creditors will have the right to vote on.

The CSR will allow us to return to normal business operations based on the liquidity provided by our debtor-in-possession (DIP) financing.

NutraCea expects business operations, which have been impaired by tight liquidity, to return to more normal operations based on the DIP financing provided by Wells Fargo Bank, N.A. The company does not need court authority to pay “post petition” suppliers and vendors (those who provide goods and services after the date of the CSR).

Any post-petition obligations are considered administrative claims, which have payment priority over pre-petition claims.

Yes.

It is impossible to predict at this time what the ultimate effect of the Chapter 11 will be on shareholders. Under the Bankruptcy Code, equity security holders (shareholders along with holders of warrants, options and the like) are assigned the lowest priority of any party in interest. Ordinarily, equity security holders may retain their interests only if all senior classes are to be paid in full. A plan of reorganization may cancel, dilute or impair the interests of equity security holders or leave those interests unimpaired.