The RiceX Company (OTC: RICX) announced today that it has completed an agreement with Intermark Partners, LLC to convert a short-term loan of $2.5 million into equity.

Under the terms of the agreement, Intermark Partners, who in November of 1999, provided an initial bridge loan of $2.5 million, converted the loan to equity at $.70/share. Included in the agreement is the commitment by Intermark Partners to provide an additional $2.5 million of equity financing at $.70/share, contingent upon RiceX achieving an annualized equivalent sales revenue goal of $7.5 million by December of 2000.

Intermark Partners will also earn performance warrants based upon their role in assisting the RiceX senior management team in achieving the company's business development objectives and goals. The first performance target is $12 million annualized sales revenue and the second qualifying level is $25 million in annual sales revenue. In order for Intermark to qualify for the performance warrants, RiceX must achieve these levels during the next 40 months.

Dan McPeak, Sr., Chairman and CEO of The RiceX Company, commented, "We are very excited with the completion of the first phase of the Intermark Partners investment in RiceX and commitment to the company's strategic plan for business development. Bringing this investment to full realization took time and effort by everyone involved, with the result being a solid plan for future growth of the company. The investment will improve the Balance Sheet of RiceX and will significantly improve shareholder equity. Intermark Partners' willingness to provide an additional $2.5 million of equity by year's end, based upon the company achieving mutually agreed sales targets, sets the stage for RiceX to be debt free and provides the needed capital to underwrite our future business development strategies. We are now well on our way to achieving the incremental sales targets which we have defined in our plan."

Glenn H. Sullivan, Ph.D., a Senior Partner of Intermark Partners Strategic Management LLC, commented, "We have completed ten months of due diligence and market analysis and have concluded that The RiceX Company offers the type of investment opportunity that meets Intermark's strategic investment goals. In addition to the investment capital, Intermark brings strategic planning and business development capacity to RiceX. We believe in RiceX and the opportunities for developing a sizable international company and we are committed to that objective."

Dr. Sullivan, continued, "During the next several months, we will be focusing on our business development objectives and concentrating on the uniqueness of RiceX's all natural proprietary products. We at Intermark, have concluded that market timing is now right for highly nutritious, natural food supplements and nutraceuticals in the animal feed and functional food sectors. A primary target market is companion pet foods. Last year companion pet foods accounted for a $11.5 billion market domestically and another $14.5 billion internationally. In addition, the previously announced marketing alliance between RiceX and NutraStar International will become the primary vehicle to drive sales in the human functional and nutraceutical market segments. The U.S. market in 1999 for food supplements was $14.9 billion, with natural food product sales accounting for another $9.3 billion during the same period. It is clear to us that RiceX has multiple opportunities to grow and profit under a highly focused management development strategy."

The RiceX Company manufactures and distributes nutritionally dense foods and food ingredients made from its stabilized rice bran that add significant nutritional benefits to food and consumer products. The Company believes it is the only company in the world that can deliver all natural, nutritionally dense stabilized rice bran products with the shelf life and nutritional profile demanded by most commercial users.

`Safe Harbor' statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission.