---

SECURITIES AND EXCHANGE
COMMISSIONWashington, D.C. 20549

_________________

FORM 10-QSB

(Mark one)[x]    
          QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
          1934

For the quarterly period ended
June 30, 2004

[   ]    TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

# For the transition
period from____________________to___________________

# Commission File Number
0-24285

_________________

# THE
RICEX COMPANY
(Name of Small Business
Issuer in Its Charter)

| | Delaware                                                      |  | 68-0412200                           | 
| | ------------------------------------------------------------- |  | ------------------------------------ | 
| | (State or other jurisdiction ofincorporation or organization) |  | (I.R.S. Employer Identification No.) | 
|
| | (Address of Principal Executive Offices)                      |  | (Zip Code)                           | 

# Issuers
telephone number, including area code: (916) 933-3000

Not Applicable
                 (Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)

_________________

Check
whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
______

# APPLICABLE ONLY TO
CORPORATE ISSUERS

State
the number of shares outstanding of each of the issuers classes of common equity,
as of the latest practicable date: 36,713,274 as of July 25, 2004.

Transitional
Small Business Disclosure Format (check one):  Yes _____   NoX

---



# FORM 10-QSB

Index

|PART I.    | FINANCIAL INFORMATION                                                                    |   
|---------- | ---------------------------------------------------------------------------------------- | --
|          
|Item 1.    |                                                                                          |   
|          
|           | (a)  Consolidated Balance Sheet at June 30, 2004                                         | 4 
|          
|           | (b)  Consolidated Statements of Operations for the quarters ended June 30, 2004 and 2003 | 5 
|          
|           | (c)  Consolidated Statements of Cash Flow for the quarters ended June 30, 2004 and 2003  | 6 
|          
|           | (d)  Notes to financial statements                                                       | 7 
|          
|Item 2.    | Management's Discussion and Analysis or Plan of Operation                                | 10
|          
|Item 3.    | Controls and Procedures                                                                  | 13
|          
|
|          
|Item 1.    | Legal Proceedings                                                                        | 14
|          
|Item 2.    | Changes In Securities                                                                    | 14
|          
|Item 3.    | Defaults Upon Senior Securities                                                          | 14
|          
|Item 4.    | Submission of Matters to a Vote of Security Holders                                      | 15
|          
|Item 5.    | Other Information                                                                        | 15
|          
|Item 6.    | Exhibits and Reports on Form 8-K                                                         |   
|          
|           | (a) Exhibits                                                                             | 15
|          
|           | (b) Reports on Form 8-K                                                                  | 15
|          
|Signatures |                                                                                          | 16

2



# FORWARD-LOOKING
STATEMENTS

This
document contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements other than statements of
historical fact are forward-looking statements for purposes of federal and
state securities laws, including, but not limited to, any projections of earnings, revenue
or other financial items; any statements of the plans, strategies and objectives of
management for future operations; any statements concerning proposed new services or
developments; any statements regarding future economic conditions or performance; any
statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking
statements may include the words may, could, will,
estimate, intend, continue, believe,
expect or anticipate or other similar words. These forward-looking
statements present our estimates and assumptions only as of the date of this report.
Except for our ongoing obligation to disclose material information as required by the
federal securities laws, we do not intend, and undertake no obligation, to update any
forward-looking statement.

Although
we believe that the expectations reflected in any of our forward-looking statements are
reasonable, actual results could differ materially from those projected or assumed in any
of our forward-looking statements. Our future financial condition and results of
operations, as well as any forward-looking statements, are subject to change and inherent
risks and uncertainties. The factors impacting these risks and uncertainties include, but
are not limited to:

| | increased
competitive pressures from existing competitors and new entrants;
|- | ---------------------------------------------------------------------------

| | increases
in interest rates or our cost of borrowing or a default under any material debt
agreements;
|- | -----------------------------------------------------------------------------------------------------

| | deterioration
in general or regional economic conditions;
|- | ---------------------------------------------------------

| | adverse
state or federal legislation or regulation that increases the costs of compliance, or
adverse findings by a          regulator with respect to existing operations;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | loss
of customers or sales weakness;
|- | ------------------------------------

| | inability
to achieve future sales levels or other operating results;
|- | --------------------------------------------------------------------

| | the
unavailability of funds for capital expenditures; and
|- | ---------------------------------------------------------

| | operational
inefficiencies in distribution or other systems.
|- | ------------------------------------------------------------

For
a detailed description of these and other factors that could cause actual results to
differ materially from those expressed in any forward-looking statement, please see
Risk Factors in our Annual Report on Form 10-KSB for the year ended December
31, 2003.

3



PART 1.       FINANCIAL
INFORMATION

Item 1.       
          UNAUDITED FINANCIAL INFORMATION

# THE RICEX COMPANY
                                                      CONSOLIDATED BALANCE SHEETJune 30, 2004
                                                              (unaudited)

|ASSETS                                                                      
|----------------------------------------------------------------------------
|                                                                            
|CURRENT ASSETS:                                                             
|Cash and cash equivalents                                                   
|Trade accounts receivable                                                   
|Inventories                                                                 
|Deposits and other current assets                                           
|                                                                            
|Total current assets                                                        
|                                                                            
|PROPERTY AND EQUIPMENT, net                                                 
|                                                                            
|OTHER ASSETS                                                                
|                                                                            
|                                                                            
|                                                                            
|
|                                                                            
|CURRENT LIABILITIES:                                                        
|Accounts payable and accrued liabilities                                    
|Unrecognized revenue                                                        
|                                                                            
|Total current liabilities                                                   
|                                                                            
|Total liabilities                                                           
|                                                                            
|COMMITMENTS AND CONTINGENCIES                                               
|                                                                            
|SHAREHOLDERS' EQUITY (DEFICIT)                                              
|Preferred stock, par value $.00l per share, 10,000,000 shares authorized, no
|shares issued and outstanding                                               
|Common stock, par value $.001 per share, 100,000,000 shares authorized,     
|38,281,864 shares issued and outstanding                                    
|Additional paid-in capital                                                  
|Accumulated deficit                                                         
|Total shareholders' equity                                                  
|                                                                            
|                                                                            

The accompanying notes
are an integral part of these consolidated financial statements.

4



# THE RICEX COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

|                                              | Quarters ended |  | Six months ended |           
|--------------------------------------------- | -------------- |  | ---------------- | ----------
|
|Revenues                                      |                |  |                  |           
|Sales                                         |                |  | $                | 1,106,953 
|                                              |               
|                                              |                |  |                  | 1,106,953 
|                                             
|Cost of sales                                 |                |  |                  | 416,260   
|                                              |               
|                                              |                |  |                  | 690,693   
|                                             
|Research and development expenses             |                |  |                  | 51,285    
|Selling, general and administrative expenses  |                |  |                  | 497,046   
|Professional fees                             |                |  |                  | 126,875   
|Investor relations                            |                |  |                  | 39,948    
|                                              |               
|Income (loss) from operations                 |                |  |                  | (24,461   
|                                             
|Other income (expense):                       |                | 
|Interest and other income                     |                |  |                  | 14,394    
|Interest and other expense                    |                |  |                  | --        
|                                              |               
|Income (loss) before income taxes             |                |  |                  | (10,067   
|                                             
|Provision for income taxes                    |                |  |                  | (1,589    
|                                              |               
|Net income (loss)                             |                |  | $                | (11,656   
|                                             
|Basic and diluted earnings per share:         |                | 
|Net income (loss) per share                   |                |  | $                | (0.00     
|Weighted average number of shares outstanding |                |  |                  | 36,758,173
|                                              |                |  |                  |           

The accompanying notes
are an integral part of these consolidated financial statements.

5



# THE RICEX COMPANY  CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited)

|                                                                                  | SIX MONTHS ENDED | 
|--------------------------------------------------------------------------------- | ---------------- | 
|
|Cash flow from operating activities:                                              |                  | 
|Net income (loss)                                                                 |                  | 
|Adjustments to reconcile net income (loss) to net cash from operating activities  |                  | 
|Depreciation and amortization                                                     |                  | 
|Shares, warrants and options issued for                                           |                  | 
|compensation and services                                                         |                  | 
|Deferred revenue recognized                                                       |                  | 
|Amortization of prepaid processing fees                                           |                  | 
|Net changes in operating assets and liabilities                                   |                  | 
|Trade accounts receivable                                                         |                  | 
|Inventories                                                                       |                  | 
|Deposits and other current assets                                                 |                  | 
|Accounts payable and accrued liabilities                                          |                  | 
|                                                                                  |                  | 
|Net cash from operating activities                                                |                  | 
|                                                                                  |                  | 
|Cash flows from investing activities (Purchases) sales of property and equipment, |                  | 
|net                                                                               |                  | 
|                                                                                  |                  | 
|Net cash from investing activities                                                |                  | 
|Cash flows from financing activities                                              |                  | 
|Retirement of common stock                                                        |                  | 
|                                                                                  |                  | 
|Net cash from financing activities                                                |                  | 
|                                                                                  |                  | 
|Net (decrease) increase in cash and cash equivalents                              |                  | 
|Cash and cash equivalents, beginning of period                                    |                  | 
|                                                                                  |                  | 
|Cash and cash equivalents, end of period                                          |                  | 

The accompanying notes
are an integral part of these consolidated financial statements.

6



# THE RICEX COMPANY  NOTES TO UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS

|1. |  | DESCRIPTION
OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
|-- |  | -----------------------------------------------------------

The
RiceX Company (RiceX), formerly Food Extrusion, Inc., was incorporated in
California in 1989 and in 1998 was reincorporated in Delaware and changed its name to The
RiceX Company. We have a wholly owned subsidiary, Food Extrusion Montana, Inc. (FoodEx
Montana). We have filed an application with the State of Montana to change our subsidiary's name,
FoodEx Montana, to RiceX Nutrients, Inc.
The unaudited consolidated financial statements include the accounts of RiceX
and FoodEx Montana, collectively, after the elimination of all inter-company balances and
transactions.

We
are an agribusiness food technology company, which has developed a proprietary process to
stabilize rice bran. We are headquartered in El Dorado Hills, California and have
stabilization equipment located at one rice mill in Northern California. We purchase raw
rice bran from this mill. Mill employees, under our supervision, operate our equipment to
stabilize rice bran. We pay a processing fee to the mill for this service. Under an
agreement with the mill, the mill may use our equipment to stabilize rice bran for its
customers in exchange for the payment of a royalty fee to us under certain production
conditions.

FoodEx
Montana is engaged in the business of custom manufacturing grain-based products for food
ingredient companies at its production facility in Dillon, Montana. The facility has
specialized processing equipment and techniques for the treatment of grain products to
cook, enzyme treat, convert, isolate, dry, and package finished food ingredients. The
soluble and fiber complex form of our rice bran products are produced at the Montana
facility.

There
have been no changes in our significant accounting policies as set forth in the
Companys audited financial statements for the year ended December 31, 2003, which
were included in our Form 10-KSB. These unaudited financial statements for the six months
ended June 30, 2004 have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have been
included. The results of operations for the six months ended June 30, 2004 are not
necessarily indicative of the results expected for the full year.

7



|2. |  | PROPERTY
AND EQUIPMENT
|-- |  | ----------------------

At
June 30, 2004, property and equipment consists of the following:

|Land and buildings                             |  |  | $ | 380,154    |  
|---------------------------------------------- |  |  | - | ---------- | -
|Equipment                                      |  |  |   | 4,596,990  |  
|Leasehold improvements                         |  |  |   | 381,642    |  
|Furniture and fixtures                         |  |  |   | 208,071    |  
|                                               |  | 
|                                               |  |  |   | 5,566,587  |  
|Less accumulated depreciation and amortization |  |  |   | (4,957,980 | )
|                                               |  | 
|                                               |  |  |   | 608,877    |  

|3. |  | ACCOUNTS
PAYABLE AND ACCRUED LIABILITIES
|-- |  | ----------------------------------------

At
June 30, 2004, accounts payable and accrued liabilities consist of the following:

|Trade accounts payable    |  |  | $ | 198,045 | 
|------------------------- |  |  | - | ------- | 
|Other accrued liabilities |  |  |   | 234,600 | 
|Unrecognized revenue      |  |  |   | 62,060  | 
|                          |  | 
|                          |  |  | $ | 494,705 | 

|4. |  | PROVISION
FOR INCOME TAXES
|-- |  | --------------------------

The
Company expects to utilize net operating loss carry-forwards for federal and state tax
purposes for the tax year ending December 31, 2004. The gubernatorial suspension of
applicable net operating losses by the California Franchise Tax Board will expire in 2004.
Californias 2002-03 budget included a suspension of net operating losses for the
2002 and 2003 taxable years. In return for the suspension, business taxpayers get a 100%
(instead of 60%) net operating loss deduction for taxable years beginning on or after
January 1, 2004; and for any carryover of a net operating loss for which a deduction is
denied by reason of the suspension, the carryover period is extended for one year for
losses sustained in taxable years in 2002 and two years for net operating losses sustained
in taxable years beginning before 2002. These tax provisions do not include the effect of
the Alternative Minimum Tax. Net operating loss carry-forwards expire for federal tax
purposes at various dates from 2011 through 2023 and expire for California tax purposes at
various dates from 2003 through 2013, not including the effect of the Alternative Minimum
Tax. Net operating loss carry-forwards expire for Montana tax purposes at various dates
from 2004 through 2010.

|5. |  | NET
INCOME (LOSS) PER SHARE
|-- |  | ---------------------------

Basic
net income (loss) per share is computed by dividing net income (loss) by the weighted
average number of common shares outstanding during all periods presented.  Options
and warrants are excluded from the basic net income (loss) per share calculation because
they are currently anti-dilutive.

8



|6. |  | CONCENTRATION
OF CREDIT RISK
|-- |  | ----------------------------

Financial
instruments that potentially subject us to significant concentrations of credit risk
consist primarily of trade accounts receivable for sales to major customers. We perform
credit evaluations on our customers financial condition and generally do not require
collateral on accounts receivable. We maintain an allowance for doubtful accounts on our
receivables based upon expected collection of all accounts receivable. Uncollected
accounts have not been significant.

For
the six months ended June 30, 2004, three customers accounted for 23%, 14%, and 9% of
sales, respectively. Accounts receivable due from these three customers were 0%, 28%, and
2% respectively, of the total outstanding.

|7. |  | OTHER
INFORMATION
|-- |  | -----------------

Stock
Options. At June 30, 2004, the Company has one stock-based
employee compensation plan. We account for this plan under the recognition and measurement
principles of APB Opinions No. 25, Accounting for Stock Issued to Employees,
and related Interpretations. No stock-based employee compensation cost is reflected in net
income, as all options granted under those plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. The following table illustrates
the effect on net income and earnings per share if we had applied the fair value
recognition provisions of FASB Statement No. 123, Accounting for Stock-Based
Compensation, to stock-based employee compensation.

|                                                     | QUARTERENDEDJUNE 30, |  | QUARTERENDEDJUNE 30, |         | SIX MONTHSENDEDJUNE 30, |   | SIX MONTHSENDEDJUNE 30, |  
|---------------------------------------------------- | -------------------- |  | -------------------- | ------- | ----------------------- | - | ----------------------- | -
|
|Net loss, as reported                                |                      |  | $                    | (11,656 | )                       | $ | (375,385                | )
|Deduct:  Total stock-based employee  compensation    |                      | 
|expense determined under fair value based method for |                      | 
|all awards                                           |                      |  |                      | 48,300  |                         |   | --                      |  
|                                                     |                      | 
|Pro forma net income (loss)                          |                      |  | $                    | (59,956 | )                       | $ | (375,385                | )
|Earnings per share:                                  |                      | 
|Basic and diluted net income per share - as          |                      | 
|reported                                             |                      |  | $                    | (.00    | )                       | $ | (.01                    | )
|Basic and diluted net income per share - pro forma   |                      |  | $                    | (.00    | )                       | $ | (.01                    | )
|Weighted average fair value of options granted to    |                      | 
|employees during the quarter                         |                      |  | $                    | .19     |                         | $ | --                      |  

Common
Stock Purchase.In April 2004, the Board of Directors approved an
agreement authorizing us to purchase 1,346,964 common shares of our own stock and
3,030,669 warrants in a private transaction. This was the only purchase transaction this
year through the period ended June 31, 2004. We paid $270,005 for the shares and warrants
at an average cost of $0.20 per share.

9



|Item 2. |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|------- |  | ---------------------------------------------------------

The
following is a discussion of the consolidated financial condition of our results of
operations for the quarters ended June 30, 2004 and 2003.

# QUARTERS ENDED JUNE 30,
2004 AND 2003

Consolidated
revenues for the period ended June 30, 2004 of $1,107,000 increased $115,000, or 12%, from the
same period last year. The overall increase in revenue on a comparative basis to the same
time period last year was due primarily to a shipment during the quarter to Central
America.

Gross
margins for the period ended June 30, 2004 were $691,000, or 62%, compared to $445,000, or
45%, during the same period last year. The increase in gross margin dollars of $246,000
was primarily attributed to the increase in revenues of $115,000 combined with a decrease
in cost of goods sold of $131,000, resulting in an increase in gross margin. This increase
was primarily caused by adequate production volume and a decrease in depreciation expense
at our Montana plant charged to cost of goods sold for the second quarter period ended
June 30, 2004.

Research
and development (R&D) expenses reflect a $30,000 decrease for the quarter
ended June 30, 2004 compared to the same period last year. R&D expenditures decreased
from $81,000 for the quarter ended June 30, 2003 to $51,000 for the same period in 2004
due to SG&A directly attributed to research and development activities allocated to
R&D. We expect to continue research and development expenditures to
establish the scientific basis for health claims of existing products.

Selling,
general and administrative (SG&A) expenses were $497,000 and $549,000
through the period ended June 30, 2004 and 2003, respectively, a decrease of $52,000. The
decrease was due partly to a decrease in expenses relating to sales and marketing
functions as well as decreased employee related and liability insurance costs.

Professional
fees decreased to $127,000 for the period ended June 30, 2004 from $149,000 for the same
period in 2003. The decrease of $22,000 is due primarily to decreased legal fees and
related activities compared to this time last year.

Investor
relation fees decreased $4,000 to $40,000 for the quarter ended June 30, 2004 from $44,000
for the quarter ended June 30, 2003. The decrease was associated with lower printing,
filing, and preparation costs to comply with SEC requirements for the annual report,
annual meeting, and proxy statement costs incurred during the second quarter ended June
30, 2004 and 2003, respectively.

We
had a net loss of $12,000 for the quarter ended June 30, 2004, or $0.00 per share,
compared to a net loss of $375,000, or ($0.01) per share, for the quarter ended June 30,
2003, an improvement of $364,000 over the same period last year. The improvement of
$364,000 was primarily due to increased revenues of $115,000, an increase in interest
income of $10,000,

10



combining a decrease in cost of
goods sold of $131,000, and lower overhead expenses of $108,000 through the quarter ended
June 30, 2004.

SIX MONTHS ENDED JUNE 30,
2004 AND 2003

Consolidated
revenues for the six months ended June 30, 2004 were $2,019,000, an increase of $80,000,
or 4% on a comparative basis to six months ended June 30, 2003. Increased consolidated
revenues were attributed to an increase of sales in three of four categories, Stabilized
Rice Bran (SRB) Regular, SRB Fine, and Fiber.

Gross
margins for the six months ended June 30, 2004 were $1,366,000, or 68%, compared to
$905,000, or 47%, during the same period last year. The increase in gross margin dollars
of $460,000 was primarily attributed to the increase in revenues of $80,000 combined with
a decrease in cost of sales of $380,000. The decrease in cost of sales was primarily due
to fully absorbed production costs at our Montana plant including lower depreciation costs
for the production of two product lines for period ended June 30, 2004. Gross margins on
the Companys various products vary widely and the gross margins are impacted from
period to period by sales mix and utilization of production capacity. The Company expects
that gross margins will improve as sales volumes increase.

R&D
expenses decreased $23,000 for the six months ended June 30, 2004, compared to the same
period last year. R&D expenditures decreased from $124,000 for the six months ended
June 30, 2003 to $101,000 for the six months ended June 30, 2004. The change in R&D
expenses is mostly due to a decrease in allocated SG&A expenses attributed to R&D.
The Company expects to continue research and development expenditures to establish the
scientific basis for health claims of our products.

SG&A
expenses were $1,074,000 for the six months ended June 30, 2004, compared to $1,095,000
for the six months ended June 30, 2003, a decrease of $21,000. The decrease was primarily
due to reduced expenses relating to equipment depreciation as well as a decrease in
D&O and property insurance costs in 2004.

Professional
fees decreased $15,000 to $255,000 for the six months ended June 30, 2004 from $270,000
for the prior years period. The decrease is due primarily to decreased legal fees
and related activity associated with general corporate counsel expenses.

Investor
relations fees decreased $6,000 from $53,000 for the six months ended June 30, 2003 to
$47,000 For the six months ended June 30, 2004. The decrease was associated with lower
printing, filing, and preparation costs to comply with SEC requirements for the annual
report, annual meeting, and proxy statements.

For
the six months ended June 30, 2004, we experienced a net loss of $91,000, or $0.00 per
share, compared to a net loss of $630,000, or ($0.02) per share, For the six months ended
June 30, 2003, an improvement of $539,000 compared to the same time period last year. The
improvement is due to increased revenues of $80,000, decreased cost of sales of $380,000,
which include lower production costs due to lower depreciation expense for production
equipment,

11



lower overheads by $65,000, and an
increase in interest and other income of $14,000 through the six months ended June 30,
2004.

We
expect to utilize net operating loss carry-forwards for federal and state tax purposes for
the tax year ending December 31, 2004. The gubernatorial suspension of applicable net
operating losses by the California Franchise Tax Board will expire in 2004.
Californias 2002-03 budget included a suspension of net operating losses for the
2002 and 2003 taxable years. In return for the suspension, business taxpayers get a 100%
(instead of 60%) net operating loss deduction for taxable years beginning on or after
January 1, 2004; and for any carryover of a net operating loss for which a deduction is
denied by reason of the suspension, the carryover period is extended for one year for
losses sustained in taxable years in 2002 and two years for net operating losses sustained
in taxable years beginning before 2002. These tax provisions do not include the effect of
the Alternative Minimum Tax. Net operating loss carry-forwards expire for federal tax
purposes at various dates from 2011 through 2023 and expire for California tax purposes at
various dates from 2003 through 2013, not including the effect of the Alternative Minimum
Tax. Net operating loss carry-forwards expire for Montana tax purposes at various dates
from 2004 through 2010.

LIQUIDITY AND CAPITAL
RESOURCES

For the period ended June 30, 2004,
our cash balance decreased by $574,000 compared to the same period last year. Our cash
balance at June 30, 2004 decreased to $1,521,000, down from $2,095,000 at June 30, 2003.
Our cash position has not required cash from financing activities in order to fund
operations since retiring all of our long term debt in 2000. Management believes our cash
reserve is adequate to meet future operating requirements.

In
April 2004, the Board of Directors approved an agreement authorizing the Company to
purchase 1,346,964 common shares of our own stock and 3,030,669 warrants in a private
transaction. This was the only purchase transaction this year through the period ended
June 31, 2004. We paid $270,005 for the shares and warrants at an average cost of $0.20
per share.

We
continue to execute our existing sound financial business plan to meet our ongoing
liquidity needs for the year ended December 31, 2004 and thereafter. With the advent of
our new Chief Executive Officer, we are currently formulating and addressing new strategic
growth opportunities. We believe that we have positioned ourselves to become the foremost
premium ingredient supplier in the human nutrition and animal nutrition sectors.

We
continue to broaden our presence in the international markets.  Management is
focusing on expanding RiceX Solubles product sales and shipments into Europe, the Middle
East, Africa, Asia, and Japan. Applying our successful proof-of-concept program
developed in Central America in collaboration with the U.S. Department of Agriculture,
the U.S. Overseas Private Investment Corporation (OPIC), and various well-established
multilateral public and private entities, we continue to develop and expand international
market development activities applying the RiceX Sustainable Community Development Model
globally.  The RiceX Model creates local capacity employing RiceX technologies and
systems to meet regional demand for high quality nutritional solutions derived from
stabilized rice bran in both developed and

12



developing economy markets.  In
developed markets, RiceX will address burgeoning demand for functional foods and
nutritional supplements, applying existing exclusive RiceX patents for diabetes and high
cholesterol remediation.  In developing economies, the Model addresses the need for
highly efficacious nutritional solutions to pervasive malnutrition and disease, including
applications complementing HIV/AIDS medical solutions, through collaboration with
multilateral aid agencies, national governments, and key private sector partners, both
local and global.  However, there can be no assurance that we will obtain additional
strategic alliances.

We
also continue to initiate strategic alliance discussions to identify and formulate
potential joint venture opportunities with major domestic premium pet food and equine feed
manufacturers and distributors, including new, creative long-term supply
arrangements.  Domestic markets for these segments currently represent a potential
opportunity of over $250 million annually.  However, there can be no assurance that
we will obtain additional strategic alliances.

We
also have initiated a marketing transition in our domestic functional food business. 
During 2003, we laid significant groundwork and established numerous relationships that we
believe will produce solid business growth during 2004 and beyond.  Our marketing and
product development staff actively cultivates substantial new product development projects
underway with key strategic allies and customers.  Several of these customers are
launching new food and beverage products this year that will include RiceX products. 
The customers include nationally recognized baked goods, beverage, nutritional supplement
and ready to eat food manufacturing companies. These market segments currently
represent multimillion dollar potential market opportunities. However, there can be no
assurance that we will obtain additional strategic alliances.

These
efforts could significantly increase demand for our products beyond our current production
capacity.  While we believe we can increase our production capacity to meet sales
demand, significant additional capital could be required to meet such expansion
requirements.  We have sufficient cash reserves to meet all anticipated short-term
operating requirements.  However, the timing and amount of any long-term capital
requirements cannot be predicted at this time.

|Item 3. |  | CONTROLS AND PROCEDURES
|------- |  | -----------------------

We
established a compliance committee in 2003 to carry out an evaluation of the effectiveness
of our disclosure controls and procedures. As of June 30, 2004, our management, including
our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness
of the design and operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended). Based on
that evaluation, our management, including our Chief Executive Officer and our Chief
Financial Officer, concluded that our disclosure controls and procedures were effective in
timely alerting management, including our Chief Executive Officer and our Chief Financial
Officer, of material information that we are required to include in periodic Securities
and Exchange Commission filings.

There
have been no changes in our internal control over financial reporting that occurred during
the quarter ended June 30, 2004 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

13



|PART 2. |  | OTHER INFORMATION
|------- |  | -----------------

|Item 1. |  | LEGAL
PROCEEDINGS
|------- |  | -----------------

From
time to time we are involved in litigation incidental to the conduct of our business.
While the outcome of lawsuits and other proceedings against us cannot be predicted with
certainty, in the opinion of management, none of the litigation in which we are currently
involved, individually or in the aggregate, is expected to result in a material effect on
our financial position or results of operations.

|Item 2. |  | CHANGES
IN SECURITIES AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
|------- |  | ------------------------------------------------------------------------------

In
April 2004, the Board of Directors approved an agreement authorizing the Company to
purchase 1,346,964 common shares of our own stock and 3,030,669 warrants in a private
transaction. This was the only purchase transaction this year through the period ended
June 31, 2004. We paid $270,005 for the shares and warrants at an average cost of $0.20
per share.

|                 |  |  |  |           |  |     |             |  |  | Total Number |  |  | Maximum Number | 
|---------------- |  |  |  | --------- |  | --- | ----------- |  |  | ------------ |  |  | -------------- | 
|
|
|
|                
|                
|4/1/04 - 4/30/04 |  |  |  | 1,346,964 |  | (1) | $     0.20  |  |  | none         |  |  | -              | 
|                
|                
|5/1/04 - 5/31/04 |  |  |  | -         |  |     | $         - |  |  | none         |  |  | -              | 
|                
|                
|6/1/04 - 6/30/04 |  |  |  | -         |  |     | $         - |  |  | none         |  |  | -              | 
|                
|                
|Total            |  |  |  | 1,346,964 |  |     | $     0.20  |  |  | none         |  |  | -              | 

(1) On April 1, 2004 the Company
purchased 1,346,964 shares of its common stock, 1,346,964 Class I warrants to purchase
common stock, 673,482 Class II warrants to purchase common stock, and 1,010,223 Class III
warrants to purchase common stock.

|Item 3. |  | DEFAULTS
UPON SENIOR SECURITIES
|------- |  | -------------------------------

| | NONE
| | ----

14



|Item 4. |  | SUBMISSION
OF MATTERS TO A VOTE OF SECURITYHOLDERS
|------- |  | --------------------------------------------------

| | NONE
| | ----

|Item 5. |  | OTHER
INFORMATION
|------- |  | -----------------

| | NONE
| | ----

|Item 6. |  | EXHIBITS
AND REPORTS ON FORM 8-K
|------- |  | --------------------------------

| | (a) |  | INDEX
TO EXHIBITS
| | --- |  | -----------------

| | The
following exhibits are attached hereto and filed herewith:
| | --------------------------------------------------------------

| | ExhibitNumber |  | Description
of Exhibit
| | ------------- |  | ----------------------

| | 4.1 |  | Non-statutory
Stock Option Agreement issued under the 1997 Stock Option Plan between the Company and
James C. Lintzenich dated June 28, 2004.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

| | 4.2 |  | Private
Stock Transfer Agreement between GBV Tri-Power Fund, LLC. and the Company dated
                          April 2, 2004.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------

| | 4.3 |  | Non-statutory
Stock Option Agreement issued under the 1997 Stock Option Plan between the Company and
Terrence Barber dated October 27, 2000.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 |  | Employment
Agreement between Terrence Barber and the Company dated June 14, 2004
| | ---- |  | --------------------------------------------------------------------------------

| | 31.1 |  | Certification
pursuant to Rule 13a-14(a)/15d-14(a)
| | ---- |  | --------------------------------------------------

| | 31.2 |  | Certification
pursuant to Rule 13a-14(a)/15d-14(a)
| | ---- |  | --------------------------------------------------

| | 32.1 |  | Certification
of Chief Executive Officer Pursuant to 18 U.S.C.ss.1350
| | ---- |  | ---------------------------------------------------------------------

| | 32.2 |  | Certification
of Chief Financial Officer Pursuant to 18 U.S.C.ss.1350
| | ---- |  | ---------------------------------------------------------------------

| | (b) |  | Reports
On Form 8-K
| | --- |  | -------------------

| | As
reported on June 16, 2004, RiceX announced Terrence Barbers appointment as Its new
Chief Executive Officer.
| | ---------------------------------------------------------------------------------------------------------------

| | As
reported on June 25, 2004, the Board of Directors unanimously approved an increase in the
size of the Board from five to six directors and appointed the new Chief Executive
Officer, Terrence Barber, to the Board of Directors to fill the new Class II director
vacancy created as a result of the increase in the size of the Board. Mr. Barber will
serve as a director of the Company until the next election of the Companys Class II
directors.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

15



# SIGNATURES

In
accordance with the requirements of the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized:

|                       |                                                                                                                    
|---------------------- | -------------------------------------------------------------------------------------------------------------------
|                       | THE RICEX COMPANY                                                                                                  
|                       |                                                                                                                    
|Date:  August 16, 2004 | By: /s/ Todd C. Crow        Todd C. Crow
        Senior Vice President, Finance
        and Chief Financial Officer

16