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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
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SEC
FILE NUMBER
0-32565
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FORM
12b –25
NOTIFICATION
OF LATE FILING
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CUSIP
NUMBER
67060N204
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(a)
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The
reasons described in reasonable detail in Part III of this form could not
be eliminated without unreasonable effort
expense;
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(b)
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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 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
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(c)
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The
accountant’s statement or other exhibit required by Rule 12b-25(c) has
been attached if applicable.
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(1)
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Name
and telephone number of person to contact in regard to this
notification.
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Olga
Hernandez-Longan
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(602)
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522-3000
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(Name)
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(Area
Code)
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(Telephone
Number)
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(2)
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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).
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(3)
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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?
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·
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The
Company recorded revenue of $1.6 million in the fourth quarter of 2006
from the December 2006 sale of Dr. Vetz Pet Flex product to an infomercial
customer. The Company recorded an $800,000 reserve for this
receivable in the second quarter of 2007. In the third quarter
of 2007 the customer returned the product and the Company recorded a sales
return of $1.6 million and reversed the reserve it had recorded in the
second quarter of 2007. The Company has now determined
that it will reverse this sale in 2006 instead of in 2007 because (i) the
Company does not have adequate evidence to conclude that the receivable
relating to this sale was collectable in the quarter it was recognized and
(ii) the Company did not have sufficient experience in the infomercial
market to adequately understand the distribution channel, the fluctuating
nature of sales into this channel or the potential for product
return. The effect of the reversal will be to (1) reduce total
revenue by $1.6M in 2006, (2) reduce cost of sales by $268K in 2006, (3)
reduce net income by $1.4M in 2006 and (4) increase net income by $1.4M in
2007.
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·
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In
June 2007 the Company granted to Pacific Holdings Advisors Limited
(“PAHL”) perpetual and exclusive license and distribution rights (the
“License”) for the production and sale of stabilized rice bran and
stabilized rice bran derivative products in certain countries in Southeast
Asia. PAHL agreed to pay the Company a $5 million one-time
license fee (“Licence Fee”), which was due and payable on the fifth
anniversary of the commencement of stabilized rice bran production at a
facility established by PAHL or a joint venture of PAHL and the
Company. The Company recorded this $5 million License Fee in
the second quarter of 2007. Contemporaneous with the grant of
the License, the Company and PAHL jointly formed Grain Enhancements, LLC
(“GE”). Pursuant to GE’s limited liability company agreement,
PAHL sublicensed its rights under the License to
GE.
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·
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On
March 2008, Medan, LLC, a wholly-owned subsidiary of the Company,
purchased (“First Purchase”) from Fortune Finance Overseas LTD (“FFOL”)
for $8.175 million 9,700 outstanding shares of capital stock of PT
Panganmas Int Nusantara, an Indonesian company (“PIN”). In June
2008, Medan purchased directly from PIN 3,050 additional shares of PIN
capital stock for $2.5 million. Following these purchases,
Medan and FFOL own 51% and 49%, respectively, of PIN’s outstanding capital
stock. The capital contributions that the Company made to Medan
funded the purchase of the PIN
shares.
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·
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In
March 2008, PAHL paid to the Company $5 million for its License Fee
described above. A principal shareholder of FFOL is also a
principal shareholder of PAHL, and the Company’s receipt of payment for
the License Fee was made at the same time the Company decided to make the
First Purchase of the PIN shares. Based in part upon the
related ownership of FFOL and PAHL, the timing of the payments, the
sub-license of PAHL’s rights under the License to GE and the Company’s
current determination of the value of the PIN shares, the Company now
believes the First Purchase of the PIN shares and the payment of the
License Fee should be viewed as a combined event with related parties,
causing the Company to account for the First Purchase of the PIN shares as
a payment of $3.175 million instead of $8.175
million.
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Three
months
ended |
Three
months
ended |
Three
months
ended |
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12/31/06
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12/31/07
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03/31/08
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06/30/08
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9/30/08
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Total
revenue as reported
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$ | 18,090,000 | $ | 22,161,000 | $ | 5,111,000 | $ | 10,314,000 | $ | 11,201,000 | ||||||||||
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Decrease/Increase
in total revenue
- $1.6 million
sale
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(1,551,000 | ) | 1,551,000 | |||||||||||||||||
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Decrease
in total revenue
- $2.6 million
sale
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(2,601,000 | ) | ||||||||||||||||||
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Decrease
in license revenue
- $5.0 million
sale
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(5,000,000 | ) | ||||||||||||||||||
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Decrease
in total revenue
- $2.0 million
sale
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(1,920,000 | ) | ||||||||||||||||||
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Increase
in total revenue
- $2.0 million
sale
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699,000 | 702,000 | 414,000 | |||||||||||||||||
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Total
revenue as restated
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16,539,000 | 14,191,000 | 5,810,000 | 11,016,000 | 11,615,000 | |||||||||||||||
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Cost
of goods sold as reported
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9,130,000 | 9,898,000 | 4,794,000 | 7,277,000 | 8,704,000 | |||||||||||||||
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Decrease/Increase
in cost of goods sold
- $1.6 million
sale
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(268,000 | ) | 268,000 | |||||||||||||||||
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Decrease
in cost of goods sold
- $2.6 million
sale
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(557,000 | ) | ||||||||||||||||||
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Increase
in cost of goods sold
- $2.6 million sale inventory
write-off
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557,000 | |||||||||||||||||||
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Decrease
in cost of goods sold
- $2.0 million
sale
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(1,283,000 | ) | ||||||||||||||||||
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Increase
in cost of goods sold
- $2.0 million
sale
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467,000 | 470,000 | 277,000 | |||||||||||||||||
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Cost
of goods sold as restated
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8,862,000 | 8,883,000 | 5,261,000 | 7,747,000 | 8,981,000 | |||||||||||||||
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Gross
profit as reported
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8,960,000 | 12,263,000 | 317,000 | 3,037,000 | 2,497,000 | |||||||||||||||
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Gross
profit as restated
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7,677,000 | 5,308,000 | 549,000 | 3,269,000 | 2,634,000 | |||||||||||||||
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Operating
expenses as reported
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7,913,000 | 27,393,000 | 7,400,000 | 7,734,000 | 7,053,000 | |||||||||||||||
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Decrease
in bad debt expense
- $2.6 million
sale
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(1,601,000 | ) | ||||||||||||||||||
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Operating
expenses as restated
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7,913,000 | 25,792,000 | 7,400,000 | 7,734,000 | 7,053,000 | |||||||||||||||
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Other
Income (expense) as reported/restated
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538,000 | 3,239,000 | 368,000 | (1,184,000 | ) | 245,000 | ||||||||||||||
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Net
income (loss) before income tax as reported
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$ | 1,585,000 | $ | (11,891,000 | ) | $ | (6,715,000 | ) | $ | (5,881,000 | ) | $ | (4,311,000 | ) | ||||||
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Net
income (loss) before income tax as restated
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$ | 302,000 | $ | (17,245,000 | ) | $ | (6,483,000 | ) | $ | (5,649,000 | ) | $ | (4,174,000 | ) | ||||||
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Date:
May
11, 2009
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By:
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/s/ Olga Hernandez-Longan | |
| Olga Hernandez-Longan, | |||
| Chief Financial Officer | |||