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Table of Contents


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

         


FORM 10-Q

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2022

 

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

 

For the transition period from                      to                     

 

Commission File Number 001-36245

RiceBran Technologies

(Exact Name of Registrant as Specified in its Charter)

 

California

(State or other jurisdiction of

incorporation or organization)

87-0673375

(I.R.S. Employer Identification No.)

25420 Kuykendahl Rd., Suite B300

Tomball, TX

 (Address of Principal Executive Offices) 

77375

(Zip Code)

(281) 675-2421

(Registrant’s telephone number, including area code)

 

None

(Former name, former address and former fiscal year, if changed since last report

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading symbol

 

Name of each exchange on which registered

Common Stock, no par value per share

 

RIBT

 

The NASDAQ Capital Market

 

Indicate by check mark 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 ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐Accelerated filer ☐Non-accelerated filer ☒Smaller reporting company ☒
   Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule l2b-2 of the Exchange Act).  Yes ☐ No ☒

 

As of August 11, 2022, there were 52,310,304 shares of common stock outstanding.

 

 

 

RiceBran Technologies

Index

Form 10-Q

 

PART I. FINANCIAL INFORMATION Page

 

Item 1.

Financial Statements (Unaudited)

3

 

 

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021

3
   

Condensed Consolidated Balance Sheets as of June 30, 2022, and December 31, 2021

4
   

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

5
   

Notes to Unaudited Condensed Consolidated Financial Statements

6

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

17

 

Item 4.

Controls and Procedures

18

PART II. OTHER INFORMATION  

 

Item 1.

Legal Proceedings

          18

 

Item 1A.

Risk Factors

18

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

18

 

Item 3.

Defaults Upon Senior Securities

18

 

Item 4.

Mine Safety Disclosures

18

 

Item 5.

Other Information

18

 

Item 6.

Exhibits

19

Signatures 20

 

Cautionary Note about Forward-Looking Statements

 

This quarterly report on Form 10-Q contains “forward-looking statements.” 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, liquidity or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services, products 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. The forward-looking statements contained herein reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Actual results may differ materially from those projected in such forward-looking statements due to a number of factors, risks and uncertainties, including the factors that may affect future results set forth in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2021. We disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this quarterly report.

 

Unless the context requires otherwise, references to “we,” “us,” “our” and “the Company” refer to RiceBran Technologies and its consolidated subsidiaries.

 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

RiceBran Technologies

Condensed Consolidated Statements of Operations

(Unaudited) (in thousands, except share and per share amounts)

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2022

  

2021

  

2022

  

2021

 
                 

Revenues

 $10,190  $7,574  $20,749  $16,179 

Cost of goods sold

  10,667   7,421   20,724   15,354 

Gross profit (loss)

  (477)  153   25   825 

Selling, general and administrative expenses

  1,708   1,933   3,400   3,674 

Loss (gain) on involuntary conversion of property and equipment

  (147)  (1)  (147)  6 

Operating loss

  (2,038)  (1,779)  (3,228)  (2,855)

Interest income

  1   -   2   1 

Interest expense

  (118)  (120)  (244)  (232)

Change in fair value of derivative warrant liability

  (417)  -   (588)  - 

Gain on extinguishment of PPP loan

  -   -   -   1,792 

Other expense

  (38)  (24)  (72)  (37)

Other income

  1   -   5   - 

Loss before income taxes

  (2,609)  (1,923)  (4,125)  (1,331)

Income tax expense

  (12)  -   (12)  (1)

Net loss

 $(2,621) $(1,923) $(4,137) $(1,332)
                 

Loss per common share:

                

Basic

 $(0.05) $(0.04) $(0.08) $(0.03)

Diluted

 $(0.05) $(0.04) $(0.08) $(0.03)
                 

Weighted average number of shares outstanding:

                

Basic

  52,861,638   45,864,385   52,696,717   45,749,785 

Diluted

  52,861,638   45,864,385   52,696,717   45,749,785 

 

See Notes to Unaudited Condensed Consolidated Financial Statements

 

 

 

RiceBran Technologies

Condensed Consolidated Balance Sheets

(Unaudited) (in thousands, except share amounts)

 

   

June 30,

  

December 31,

 
   

2022

  

2021

 

ASSETS

        

Current assets:

        

Cash and cash equivalents

 $5,124  $5,825 

Accounts receivable, net of allowance for doubtful accounts of $136 and $18

  4,038   4,136 

Inventories

  2,312   2,444 

Other current assets

  1,227   810 
Total current assets  12,701   13,215 

Property and equipment, net

  14,815   15,444 

Operating lease right-of-use assets

  1,956   2,127 

Intangible assets

  446   527 
Total assets $29,918  $31,313 
         

LIABILITIES AND SHAREHOLDERS' EQUITY

        

Current liabilities:

        

Accounts payable

 $1,368  $826 

Commodities payable

  1,712   1,702 

Accrued salary, wages and benefits

  743   787 

Accrued expenses

  737   683 

Operating lease liabilities, current portion

  407   382 

Due under bank line of credit

  1,800   - 

Due under factoring agreement

  3,165   3,379 

Due under insurance premium finance agreements

  530   128 

Finance lease liabilities, current portion

  86   86 

Long-term debt, current portion

  1,251   1,183 
Total current liabilities  11,799   9,156 

Operating lease liabilities, less current portion

  1,705   1,948 

Finance lease liabilities, less current portion

  109   100 

Long-term debt, less current portion

  708   1,356 

Derivative warrant liability

  846   258 
Total liabilities  15,167   12,818 

Commitments and contingencies

          

Shareholders' equity:

        
Preferred stock, 20,000,000 shares authorized: Series G, convertible, 3,000 shares authorized, stated value $150, 150 shares, issued and outstanding  75   75 

Common stock, no par value, 150,000,000 shares authorized, 52,310,304 shares and 51,589,674 shares, issued and outstanding

  326,672   326,279 

Accumulated deficit

  (311,996)  (307,859)
Total shareholders' equity  14,751   18,495 

Total liabilities and shareholders' equity

 $29,918  $31,313 

 

See Notes to Unaudited Condensed Consolidated Financial Statements

 

 

 

RiceBran Technologies

Condensed Consolidated Statements of Cash Flows

(Unaudited) (in thousands)

 

  

Six Months Ended June 30,

 
  

2022

  

2021

 

Cash flow from operating activities:

        

Net loss

 $(4,137) $(1,332)

Adjustments to reconcile net loss to net cash used in operating activities

        

Depreciation

  1,046   1,219 

Amortization

  81   102 

Stock and share-based compensation

  393   548 

Change in fair value derivative warrant liability

  588   - 

Loss (gain) on involuntary conversion of property and equipment

  (147)  6 

Gain on extinguishment of PPP loan

  -   (1,792)

Provision for bad debts

  118   - 

Other

  (32)  15 

Changes in operating assets and liabilities:

        

Accounts receivable

  (20)  262 

Inventories

  132   42 

Accounts payable and accrued expenses

  647   197 

Commodities payable

  10   44 

Other

  (417)  (727)

Net cash used in operating activities

  (1,738)  (1,416)

Cash flows from investing activities:

        

Purchases of property and equipment

  (421)  (540)

Proceeds from insurance on involuntary conversion

  109   263 

Net cash used in investing activities

  (312)  (277)

Cash flows from financing activities:

        

Advances on factoring agreement

  18,173   15,660 

Payments on factoring agreement

  (18,387)  (15,685)

Advances on bank line of credit

  1,800   - 

Advances on insurance premium finance agreements

  794   962 

Payments on insurance premium finance agreements

  (392)  (332)

Payments on long-term debt and finance lease liabilities

  (639)  (336)

Proceeds from common stock warrant exercises

  -   171 

Net cash provided by financing activities

  1,349   440 

Net change in cash and cash equivalents

 $(701) $(1,253)
         

Cash and cash equivalents, beginning of period

 $5,825  $5,263 

Cash and cash equivalents, end of period

  5,124   4,010 

Net change in cash and cash equivalents

 $(701) $(1,253)
         

Supplemental disclosures:

        

Cash paid for interest

 $229  $179 

Cash paid for income taxes

 $19  $16 

 

See Notes to Unaudited Condensed Consolidated Financial Statements

 

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

NOTE 1. BASIS OF PRESENTATION

 

In the opinion of management, the accompanying unaudited condensed consolidated financial statements (interim financial statements) of RiceBran Technologies and its subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the rules and regulations of the Securities and Exchange Commission (the SEC) for reporting on Form 10-Q; therefore, they do not include all of the information and notes required by GAAP for complete financial statements. The interim financial statements contain all adjustments necessary to present fairly the interim results of operations, financial position and cash flows for the periods presented of a normal and recurring nature necessary to present fairly the interim results of operations, financial position and cash flows for the periods presented.

 

These interim financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2021, which included all disclosures required by generally accepted accounting principles.

 

The results reported in these interim financial statements are not necessarily indicative of the results to be expected for the full fiscal year, or any other future period, and have been prepared based on the realization of assets and the satisfaction of liabilities in the normal course of business. 

 

 

NOTE 2. BUSINESS

 

We are a specialty ingredient company focused on the development, production, and marketing of products derived from traditional and ancient small grains. We create and produce products utilizing proprietary processes to deliver improved nutrition, ease of use, and extended shelf-life, while addressing consumer demand for all natural, non-GMO and organic products. We believe our products can become valuable alternatives to traditional food ingredients.

 

Notably, we apply our proprietary technologies to convert raw rice bran into stabilized rice bran (SRB), and high value-added derivative products including: RiBalance, a rice bran nutritional package derived from SRB; RiSolubles, a nutritious, carbohydrate and lipid rich fraction of RiBalance; RiFiber, a fiber rich insoluble derivative of RiBalance and ProRyza, a rice bran protein-based product; and a variety of other valuable derivatives extracted from these core products.

 

In granular form, SRB is a food additive used in products for human and animal consumption. We believe SRB has certain qualities that make it more attractive than additives based on the by-products of other agricultural commodities, such as corn, soybeans, wheat, and yeast. Our SRB products and SRB derivatives support the production of healthy, natural, hypoallergenic, gluten free, and non-genetically modified ingredients and supplements for use in meats, baked goods, cereals, coatings, health foods, and high-end animal nutrition. Our target customers are food and animal nutrition manufacturers, wholesalers and retailers, both domestically and internationally.

 

We manufacture and distribute SRB from four locations: two facilities located within supplier-owned rice mills in Arbuckle and West Sacramento, California; one company-owned facility in Mermentau, Louisiana; and our own rice mill in Wynne, Arkansas. At our Dillon, Montana facility, we produce SRB-based products and derivatives through proprietary processes. Our rice mill in Wynne, Arkansas (Golden Ridge) supplies grades U.S. No. 1 and No. 2 premium long and medium white rice, and our grain processing facility in East Grand Forks, Minnesota (MGI) mills a variety of traditional, and ancient, small grains. Given the integrated nature of these facilities, we have one reporting unit and one operating segment, specialty ingredients.

 

 

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Recent accounting standards not yet adopted

 

The following discusses the accounting standard(s) not yet adopted that will, or are expected to, result in a significant change in practice and/or have a significant financial impact on our financial position, results of operations or cash flows.

 

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

In June 2016, the Financial Accounting Standards Board (FASB) issued guidance ASU No. 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments which changes the accounting for credit losses for certain instruments, including trade receivables, from an incurred loss method to a current expected loss method. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. The guidance, and subsequent guidance related to the topic, is effective for our annual and interim periods beginning in 2023 and must be adopted on a modified retrospective approach through cumulative-effect adjustment to retained earnings as of January 1, 2023. Based on the nature of our current receivables and our credit loss history, we do not expect the adoption of the guidance to have a significant impact on our results of operations, financial position, or cash flows.

 

 

NOTE 4. CASH AND CASH EQUIVALENTS

 

As of June 30, 2022, we have $2.7 million of cash and cash equivalents invested in a money market fund with net assets invested in U.S. Dollar denominated money market securities of domestic and foreign issuers, U.S. Government securities and repurchase agreements. We consider all liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

 

We have cash on deposit in excess of federally insured limits at a bank. We do not believe that maintaining substantially all such assets with the bank or investing in a liquid mutual fund represent material risks.

 

 

NOTE 5. ACCOUNTS RECEIVABLE AND REVENUES

 

Amounts billed and due from our customers are classified as accounts receivable on our consolidated balance sheets and require payment on a short-term basis. Invoices are generally issued at the point control transfers and substantially all of our invoices are due within 30 days or less, however certain customers have terms of up to 120 days. For substantially all of our contracts, control of the ordered product(s) transfers at our location. Periodically, we require payment prior to the point in time we recognize revenue. Amounts received from customers prior to revenue recognition on a contract are contract liabilities, are classified as customer prepayments liability on our consolidated balance sheets and are typically applied to an invoice within 30 days of the prepayment. Revenues in the three and six months ended June 30, 2022 and 2021, include $0.1 million, or less, in unearned revenue as of the end of the prior year.

 

Our accounts receivable potentially subject us to significant concentrations of credit risk. Revenues and accounts receivable from significant customers (customers with revenue or accounts receivable in excess of 10% of consolidated totals) are stated below as a percent of consolidated totals.

 

  

Customer

 
  

A

  

B

  

C

 

% of revenues, three months ended June 30, 2022

  13%  10%  1%

% of revenues, three months ended June 30, 2021

  6%  15%  15%
             

% of revenues, six months ended June 30, 2022

  12%  10%  3%

% of revenues, six months ended June 30, 2021

  6%  12%  11%
             

% of accounts receivable, as of June 30, 2022

  8%  9%  1%

% of accounts receivable, as of December 31, 2021

  15%  8%  9%

 

 

The following table presents revenues by geographic area shipped to (in thousands).

 

  

Three Months Ended June 30

  

Six Months Ended June 30

 
  

2022

  

2021

  

2022

  

2021

 

United States

 $9,912  $7,221  $20,158  $15,417 

Other countries

  278   353   591   762 

Revenues

 $10,190  $7,574  $20,749  $16,179 

 

7

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

NOTE 6. PROPERTY AND EQUIPMENT

 

The following table details the components of property and equipment (amounts in thousands).

 

  

June 30,

  

December 31

     
  

2022

  

2021

 

Estimated Useful Lives

 

Land

 $730  $730     

Furniture and fixtures

  259   265 

5

-10 years 

Plant

  10,082   10,457 

20

-40 years, or life of lease 

Computer and software

  450   452 

3

-5 years 

Leasehold improvements

  1,838   1,828 

4

-15 years, or life of lease 

Machinery and equipment

  15,266   15,115 

5

-15 years 

Property and equipment, cost

  28,625   28,847     

Less accumulated depreciation

  13,810   13,403     

Property and equipment, net

 $14,815  $15,444     

 

Amounts payable for property and equipment included in accounts payable totaled $0.1 million at June 30, 2022, and $0.2 million at December 31, 2021. Assets which had not yet been placed in service, included in property and equipment, totaled $0.8 million at June 30, 2022, and $0.9 million at December 31, 2021.

 

 

NOTE 7. LEASES

 

The components of lease expense and cash flows from leases (in thousands) follow.

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2022

  

2021

  

2022

  

2021

 

Finance lease cost:

                

Amortization of right-of use assets, included in cost of goods sold

 $19  $22  $39  $43 

Interest on lease liabilities

  3   3   5   6 

Operating lease cost, included in selling, general and administrative expenses:

                

Fixed leases cost

  129   128   258   257 

Variable lease cost

  40   37   86   75 

Short-term lease cost

  14   -   21   - 

Total lease cost

 $205  $190  $409  $381 
                 

Cash paid for amounts included in the measurement of lease liabilities:

                

Operating cash flows from finance leases

 $3  $3  $5  $6 

Operating cash flows from operating leases

 $129  $128  $258  $257 

Financing cash flows from finance leases

 $22  $24  $46  $50 

 

As of June 30, 2022, variable lease payments do not depend on a rate or index. As of June 30, 2022, and December 31, 2021, property and equipment, net, includes $0.3 million and $0.2 million of finance lease right-of-use-assets, with an original cost of $0.5 million. During the three months and six months ended June 30, 2022, we financed the purchase of $0.1 million of property and equipment in noncash finance lease transactions. During the three months and six months ended June 30, 2021, we financed the purchase of less than $0.1 million of property and equipment in noncash finance lease transactions.

 

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

As of June 30, 2022, we do not believe it is certain that we will exercise any renewal options. The remaining terms of our leases and the discount rates used in the calculation of our lease liabilities as of June 30, 2022, follows.

 

  

Operating
Leases

  

Finance
Leases

 

Remaining leases terms (in years)

 1.3-10.7  0.3-4.9 

Weighted average remaining lease terms (in years)

   5.8    3.0 

Discount rates

 6.3%-9.0%  2.8%-9.0% 

Weighted average discount rate

   7.8%    5.9% 

 

Maturities of lease liabilities as of June 30, 2022, follows (in thousands).

 

  

Operating

  

Finance

 
  

Leases

  

Leases

 

2022 (six months ended December 31, 2022)

 $244  $74 

2023

  528   79 

2024

  429   38 

2025

  439   23 

2026

  451   20 

Thereafter

  578   5 

Total lease payments

  2,669   239 

Amounts representing interest

  (557)  (44)

Present value of lease obligations

 $2,112  $195 

 

 

NOTE 8. DEBT

 

We finance certain amounts owed for annual insurance premiums under financing agreements. As of June 30, 2022, amounts due under insurance premium financing agreements are due in monthly installments of principal and interest through March 2023, at interest rates of 3.5% to 3.9% per year.

 

We borrow under a factoring agreement with a lender, which provides a $7.0 million credit facility. We may only borrow to the extent we have qualifying accounts receivable as defined in the agreement. The facility had an initial two-year term and automatically renews for successive annual periods, unless proper termination notice is given. The facility term has automatically extended to October 2022. We paid a $0.2 million facility fee upon inception of the agreement which amortized to interest expense on a straight-line basis over the two years ending in October 2021. We incur recurring fees under the agreement, including a funding fee of 0.5% above the prime rate, in no event to be less than 5.5%, on any advances and a service fee on average net funds borrowed. The lender has the right to demand repayment of the advances at any time. The lender has a security interest in personal property assets.

 

Additional information related to our factoring obligation follows.

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2022

  

2021

  

2022

  

2021

 

Average borrowings outstanding (in thousands)

 $3,131  $1,564  $2,977  $1,223 

Amortization of debt issuance costs (in thousands)

 $-  $23  $-  $45 

Interest paid, as a percentage of average outstanding borrowings

  1.5%  1.6%  1.4%  3.4%

Fees paid, as a percentage of average outstanding borrowings

  0.9%  1.5%  1.2%  2.9%

 

As of June 30, 2022, we had $1.8 million outstanding under a line of credit with a bank. The borrowing is secured by our cash on deposit with the bank and bears interest at prime (4.8% at June 30, 2022). There are no stipulated repayment terms for the line as long as we maintain sufficient cash collateral. Our borrowings under the line of credit averaged $0.1 million in the three months ended June 30, 2022, and less than $0.1 million for the six months ended June 30, 2022.

 

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

Long-term debt consists of the following (in thousands).

 

  

June 30,

  

December 31,

 
  

2022

  

2021

 

Mortgage promissory note - Originally dated July 2020 and modified in December 2021. As modified, interest accrues at an annual rate which is the greater of 7.0% above the lender's prime rate and 10.3% (11.8% at June 30, 2022) payable in monthly installments through December 2023. Net of $17 debt issuance costs at June 30, 2022.

 $1,906  $2,469 

Face amount $2.5 million. Interest accrued at the effective discount rate 11.5%. Secured by certain real property in Wynn, Arkansas.

        

Equipment note - Dated May 2021. Original principal $46. Due in monthly installments through June 2025.

        

Interest accrues at the effective discount rate of 3.6% per year.

  28   33 

Equipment note - Dated December 2019. Original principal $40. Due in monthly installments through December 2024.

        

Interest accrues at the effective discount rate of 9.3% per year.

  22   26 

Equipment notes - Initially recorded in November 2018, in an acquisition, at the present value of future payments using a discount rate of 4.8% per year. Due in monthly installments through August 2022.

  3   11 

Total long term debt, net

 $1,959  $2,539 

 

Future principal maturities of long-term debt outstanding as of June 30, 2022, follow (in thousands).

 

2022 (six months ended December 31, 2022)

 $620 

2023

  1,332 

2024

  19 

2025

  5 

Principal maturities

  1,976 

Debt issuance costs

  (17)

Total long term debt, net

 $1,959 

 

 

NOTE 9. EQUITY, SHARE-BASED COMPENSATION AND WARRANTS

 

A summary of equity activity follows (in thousands, except share amounts).

 

  

Shares

                
  

Preferred

      

Preferred

  

Common

  Accumulated     
  

Series G

  

Common

  

Stock

  

Stock

  

Deficit

  

Equity

 

Balance, December 31, 2021

  150   51,589,674  $75  $326,279  $(307,859) $18,495 

Common stock awards under equity incentive plans

  -   224,751   -   241   -   241 

Common stock issued to vendor

  -   6,000   -   5   -   5 

Net income

  -   -   -   -   (1,516)  (1,516)

Balance, March 31, 2022

  150   51,820,425   75   326,525   (309,375)  17,225 

Common stock awards under equity incentive plans

  -   483,879   -   146   -   146 

Common stock issued to vendor

  -   6,000   -   1   -   1 

Net loss

  -   -   -   -   (2,621)  (2,621)

Balance, June 30, 2022

  150   52,310,304  $75  $326,672  $(311,996) $14,751 

 

10

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

  

Shares

          

 

     
  

Preferred

      

Preferred

  

Common

  Accumulated     
  

Series G

  

Common

  

Stock

  

Stock

  

Deficit

  

Equity

 

Balance, December 31, 2020

  225   45,238,087  $112  $322,218  $(298,910) $23,420 

Common stock awards under equity incentive plans

  -   29,943   -   250   -   250 

Common stock issued to vendor

  -   6,000   -   3   -   3 

Other

  -   -   -   (3)  -   (3)

Net income

  -   -   -   -   591   591 

Balance, March 31, 2021

  225   45,274,030   112   322,468   (298,319)  24,261 

Common stock awards under equity incentive plans

  -   29,643   -   290   -   290 

Common stock issued to vendor

  -   6,000   -   5   -   5 

Exercise of common stock warrants

  -   177,936   -   171   -   171 

Other

  -   -   -   3   -   3 

Net loss

  -   -   -   -   (1,923)  (1,923)

Balance, June 30, 2021

  225   45,487,609  $112  $322,937  $(300,242) $22,807 

 

Share-based compensation by type of award follows (in thousands).

 

  

Three Months Ended

 
  

June 30, 2022

  

March 31, 2022

 

Stock options

 $21  $29 

Restricted stock units

  125   212 

Compensation expense related to common stock awards issued under equity incentive plan

 $146  $241 

 

In the three months ended June 30, 2022, holders forfeited options for the purchase of up to 44,547 shares of common stock (average $2.14 per share exercise price, average 6.8 years remaining life). In the three months ended March 31, 2022, holders forfeited options for the purchase of up to 9,703 shares of common stock (average $1.85 per share exercise price, average 7.7 years remaining life).

 

In the three months ended March 31, 2022, warrants for the purchase of up to 6,142,980 shares of common stock ($0.96 per share exercise price) expired.

 

Summaries of nonvested and vested restricted stock unit (RSU) activity follow.

 

  

Number of
RSUs

  

Unrecognized
Stock
Compensation

(in thousands)

  

Weighted
Average
Expense Period
(Years)

 

Nonvested at December 31, 2021

  1,266,033  $(658)  0.9 

Granted

  370,000   (153)  2.0 

Forfeited

  (10,000)  7   0.7 

Vested with Service

  (224,751)  -   0.0 

Expensed

  -   212     

Nonvested at March 31, 2022

  1,401,282   (592)  0.9 

Impact of Modification:

            

Before modification

  (114,680)  125     

After modification

  114,680   (60)    

Forfeited

  (94,535)  55   0.0 

Vested with Service

  (344,040)  -   0.0 

Expensed

  -   125     

Nonvested at June 30, 2022

  962,707  $(347)  0.9 

 

11

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

  

Number of
RSUs

 

Vested at December 31, 2021

  865,052 

Vested with Service

  224,751 

Issued at Vesting

  (224,751)

Vested at March 31, 2022

  865,052 

Vested with Service

  344,040 

Issued at Termination of Service

  (483,879)

Vested at June 30, 2022

  725,213 

 

Each RSU represents a contingent right to receive one share of common stock. The RSUs granted in the first three months of 2022 vest within two years of the grant. As of June 30, 2022, issuance of 725,213 shares of common stock subject to the vested RSUs is deferred to the date the holder is no longer providing service to our company.

 

In April 2022, we modified 114,680 RSUs held by resigning directors such that the awards vested on the date of their termination of service. Prior to the modification, the unvested RSUs would have been forfeited on the date of the resignations. As a result of the modifications, we adjusted cumulative expense on the RSUs to equal the fair value of the awards on the date of the April 28, 2022, modification ($0.52 per unit), in accordance with applicable accounting guidance.

 

In the three months ended June 30, 2022, we issued a total of 483,879 shares of common stock pursuant to the terms of vested RSUs, which included the114,680 modified RSUs discussed in the preceding paragraph. Issuance of the shares of common stock subject to these RSUs was deferred to the date the holder was no longer providing service to our company. In the three months ended March 31, 2022, we issued a total of 224,751 shares of common stock upon the vesting of RSUs.

 

On July 14, 2022, shareholders approved a 6,000,000 share increase in the number of shares of common stock authorized for issuance under our Amended and Restated 2014 Equity Incentive Plan (2014 Plan). On July 14, 2022, we granted RSUs with a total grant date fair value of $1.4 million ($0.38 per unit). The grants are listed below.

 

2,781,498 RSUs, the issuance of which was subject to shareholder approval of the increase in the shares of common stock authorized for issuance under the 2014 Plan. The RSUs vest over an average of forty-nine months from the July 14, 2022, grant date.

 

657,895 RSUs to our directors which vest on July 14, 2023, or one day prior to the next annual meeting of our shareholders.

 

190,024 RSUs to our directors which were immediately vested, in lieu of paying board fees in cash.

 

As of the date of this filing, 2,645,122 shares of common stock remain available for issuance under the 2014 Plan

 

 

NOTE 10. INCOME TAXES

 

Our tax expense for the three and six months ended June 30, 2022 and 2021, differs from the tax expense computed by applying the U.S. statutory tax rate to net loss from continuing operations before income taxes as no tax benefits were recorded for tax losses generated in the U.S. As of June 30, 2022, we had deferred tax assets primarily related to U.S. federal and state tax loss carryforwards. We provided a full valuation allowance against our deferred tax assets as future realization of such assets is not more likely than not to occur.

 

 

NOTE 11. LOSS PER SHARE (EPS)

 

We calculate basic EPS under the two-class method under which all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities based on their respective rights to receive dividends. Our outstanding convertible preferred stock are considered participating securities as the holders may participate in undistributed earnings with holders of common shares and are not obligated to share in our net losses.

 

We calculate diluted EPS by dividing the net income attributable to RiceBran Technologies common shareholders by the weighted average number of common shares outstanding during the period increased by the number of additional common shares that would have been outstanding if the impact of assumed exercises and conversions is dilutive. We calculate the dilutive effects of outstanding options, warrants, and nonvested RSUs that vest solely on the basis of a service condition are calculated using the treasury stock method. We calculate the dilutive effects of the outstanding preferred stock using the if-converted method.

 

12

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

Reconciliations of the numerators and denominators in the EPS computations follow.

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2022

  

2021

  

2022

  

2021

 

NUMERATOR (in thousands):

                

Numerator for basic and diluted EPS - net loss

 $(2,621) $(1,923) $(4,137) $(1,332)
                 

DENOMINATOR:

                

Weighted average number of shares of shares of common stock outstanding

  52,082,641   45,398,791   51,874,930   45,323,786 

Weighted average number of shares of common stock underlying vested RSUs

  778,997   465,594   821,787   425,999 

Denominator for basic and diluted EPS - weighted average number of shares outstanding

  52,861,638   45,864,385   52,696,717   45,749,785 

 

No effects of potentially dilutive securities outstanding were included in the calculation of diluted EPS for the three and six months ended June 30, 2022 and 2021, because to do so would be antidilutive as a result of our net loss. Potentially dilutive securities outstanding during the three and six months ended June 30, 2022 and 2021, included our outstanding convertible preferred stock, options, warrants and nonvested RSUs.

 

 

NOTE 12. FAIR VALUE MEASUREMENTS

 

The fair value of cash and cash equivalents, accounts and other receivables, accounts payable and commodities payable approximates their carrying value due to shorter maturities. As of June 30, 2022, the fair values of our operating lease liabilities were approximately $0.4 million higher than their carrying values, based on current market rates for similar debt and leases with similar maturities (Level 3 measurements). As of June 30, 2022, the fair values of our debt and finance lease liabilities approximated their carrying values, based on current market rates for similar debt and leases with similar maturities (Level 3 measurements).

 

The following tables summarize the fair values by input hierarchy of items measured at fair value on a recurring basis on our consolidated balance sheets (in thousands):

 

  

Level 1

  

Level 2

  

Level 3

  

Total

 
                 

Total liabilities at fair value as of June 30, 2022 - Derivative warrant liability

 $-  $-  $846  $846 

Total liabilities at fair value as of December 31, 2021 - Derivative warrant liability

 $-  $-  $258  $258 

 

The following tables summarize the changes in level 3 items measured at fair value on a recurring basis for the three and six months ended June 30, 2022 (in thousands):

 

  

Fair Value
as of
Beginning of
Period

  

Total
Realized
and
Unrealized

Gains
(Losses)

  

Issuance of

New
Instruments

  

Net
Transfers
(Into) Out
of

Level 3

  

Fair Value,
at End of
Period

  

Change in
Unrealized
Gains
(Losses)on
Instruments
Still Held

 

Three months ended June 30, 2022

                        

Total Level 3 fair value - Derivative warrant liability

 $429  $(417) $-  $-  $846  $(417)

Six months ended June 30, 2022:

                        

Total Level 3 fair value - Derivative warrant liability

 $258  $(588) $-  $-  $846  $(588)

 

13

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

The derivative warrant liability relates to a warrant issued in September 2021, for the purchase of up to 2,307,693 shares of common stock (Warrant A), The initial $1.00 per share exercise price of Warrant A is subject to adjustment in September 2022, and again in September 2023, if 110% of the 5-day volume weighted average price of our common stock is less than the then-current exercise price. Warrant A is carried in our consolidated balance sheets as derivative warrant liability because the holder may elect cash settlement of this warrant in the event of a change of control. We estimated the fair value of Warrant A as of June 30, 2022, and December 31, 2021, using the Black-Scholes value of a warrant with an exercise price of $1.00 per share. The changes in the estimated fair value of Warrant A are included in other income (loss) in our consolidated statements of operations. The assumptions used in valuing Warrant follows.

 

  

June 30, 2022

  

December 31, 2021

 

Assumed volatility

  82.9%  69.5%

Assumed risk free interest rate

  2.8%  0.8%

Expected life of options (in years)

  4.2   4.8 

Expected dividends

  -   - 

 

The fair value of Warrant A approximates the cash settlement the holder could elect to be paid in the event of a change in control. At June 30, 2022, a $0.10 increase in our stock price would have resulted in an approximate $0.2 million increase in the Black Scholes fair value of Warrant A.

 

 

NOTE 13. COMMITMENTS AND CONTINGENCIES

 

PPP Audit Contingency

 

In April 2020, we received $1.8 million on a Small Business Administration (SBA) Payroll Protection Program (PPP) loan as provided for in the Coronavirus Aid, Relief and Economic Security Act (CARES), enacted into U.S. law in March 2020. Under certain conditions, the loan and accrued interest were forgivable, if the loan proceeds were used for maintaining workforce levels. The loan proceeds were used for maintaining workforce levels and the entire loan, and related accrued interest, was forgiven, in its entirety in January 2021. The SBA may audit any PPP loan at its discretion through January 2027, six years after the date the SBA forgave the loan. The SBA may review any or all of the following when auditing a PPP loan: whether the borrower qualified for the PPP loan, whether the PPP loan amount was appropriately calculated and the proceeds used for allowable purposes, and whether the loan forgiveness amount was appropriately determined. We could be deemed ineligible for the PPP loan received in 2020 upon audit by the SBA. We believe the SBA’s stated intention is to focus its reviews on borrowers with loans greater than $2 million, thereby mitigating our future risk of an audit. The SBA continues to develop and issue new and updated guidance regarding required borrower certifications and requirements for forgiveness of loans made under the program.

 

Employment Contracts and Severance Payments

 

In the normal course of business, we periodically enter into employment agreements which incorporate indemnification provisions. While the maximum amount to which we may be exposed under such agreements cannot be reasonably estimated, we maintain insurance coverage, which we believe will effectively mitigate our obligations under these indemnification provisions. No amounts have been recorded in our financial statements with respect to any obligations under such agreements.

 

We have employment contracts with certain officers and key management that include provisions for potential severance payments in the event of without-cause terminations or terminations under certain circumstances after a change in control. In addition, vesting of outstanding nonvested equity grants would accelerate following a change in control.

 

Legal Matters

 

From time to time, we are involved in litigation incidental to the conduct of our business. These matters may relate to employment and labor claims, patent and intellectual property claims, claims of alleged non-compliance with contract provisions and claims related to alleged violations of laws and regulations. When applicable, we record accruals for contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. While the outcome of lawsuits and other proceedings against us cannot be predicted with certainty, in the opinion of management, individually or in the aggregate, no such lawsuits are expected to have a material effect on our financial position or results of operations. We expense defense as incurred. Defense costs, when incurred, are included in selling, general and administrative expense.

 

14

 

RiceBran Technologies
Notes to Unaudited Condensed Consolidated Financial Statements

 

NOTE 14. FAILURE TO COMPLY WITH NASDAQ LISTING REQUIREMENTS

 

On September 15, 2021, we received a notification letter from The Nasdaq Stock Market LLC (Nasdaq) indicating that we have failed to comply with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2). Nasdaq Listing Rule 5550(a)(2) requires that companies listed on the Nasdaq Capital Market maintain a minimum bid price of $1.00. To regain compliance with this listing rule, the closing bid price of our common stock has to be at least $1.00 for a period of Nasdaq’s discretion, of at least 10, but not to exceed 20, consecutive business days. As of the date of this filing, we have not regained compliance with the minimum bid price requirement, however, we were eligible for and obtained from Nasdaq an additional 180-day compliance period, which extends through September 12, 2022. We are committed to taking actions that would enable us to regain compliance, including, if necessary, completing a reverse split of our common stock to increase its share price above the $1.00 minimum bid price. On July 14, 2022, our shareholders approved amendments to our articles of incorporation that would effect a reverse stock split, pursuant to which either five, ten, fifteen, twenty, or twenty-five outstanding shares of our common stock would be combined into one share of such stock, and to authorize our board of directors, at its discretion, to select and file one such amendment which would effect the reverse stock split at one of these five reverse split ratios on or before July 14, 2023, if deemed appropriate.

 

15

 
 

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

 

 

Results of Operations - Three Months Ended June 30, 2022, Compared to Three Months Ended June 30, 2021

 

Revenues of $10.2 million in the second quarter of 2022 increased $2.6 million, or 34.5%, compared to the second quarter of 2021. This year-over-year increase was due to higher core-SRB sales and strong growth from our MGI and Golden Ridge milling operations, offset in part by lower value-added SRB derivative product revenues due to continued production issues.

 

Gross loss was $0.5 million in the second quarter of 2022, a $0.6 million decrease in gross profit compared to the second quarter of 2021. The decline in gross profit was attributable to lower sales and significant cost overruns for our value-added SRB derivatives business versus a year ago, with profits from our core-SRB business flat with a year ago and lower losses from Golden Ridge offset by a decline in profitability at MGI due to efforts to work around capital improvements.

 

Selling, general and administrative (SG&A) expenses were $1.7 million in the second quarter of 2022, a 1.6% decline from the second quarter of 2021, as reductions in corporate support headcount and outside professional services were offset in part by higher wage rates and insurance expenses.

 

We recognized a gain on the involuntary conversion of assets of $0.1 million in the second quarter of 2022, when we finalized our insurance claim for hurricane damage that occurred in August 2020 to our Lake Charles, Louisiana property.

 

Due to the decline in gross profits, operating losses were $2.0 million in the second quarter of 2022, up from $1.8 million in the second quarter of 2021. In June of 2022, we recognized a $0.4 million charge for the change in the fair value of a warrant liability. As a result of higher operating losses and this charge, net loss in the second quarter of 2022 was $2.6 million, or $0.05 per share, compared to a net loss of $1.9 million, or $0.04 per share, in the second quarter of 2021.

 

Results of Operations Six Months Ended June 30, 2022, Compared to Six Months Ended June 30, 2021

 

Revenues of $20.7 million in the first half of 2022 increased $4.6 million, or 28.2%, compared to the first half of 2021. This year-over-year increase was due to higher core-SRB sales and strong growth from our MGI and Golden Ridge milling operations, offset in part by lower value-added SRB derivative product revenues due to production issues.

 

The $0.8 million decrease in gross profit in the first half of 2022 compared to the first half of 2021, was primarily attributable to lower gross profits from our value-added SRB derivative products and a modest decline in gross profits from our core-SRB business, offset by lower losses from Golden Ridge and a modest increase in gross profits at MGI.

 

SG&A expenses were $3.4 million in the first half of 2022, a 7.5% decline from the first half of 2021, as reductions in corporate support headcount and outside professional services were offset in part by higher wage rates and insurance expenses.

 

We recognized a gain on the involuntary conversion of assets of $0.1 million in the first half of 2022, when we finalized our insurance claim for hurricane damage that occurred in August 2020 to our Lake Charles, Louisiana property.

 

Operating losses were $3.2 million in the first half of 2022, up from $2.9 million in the first half of 2021, due to lower gross profits. In the first half of 2022, we recognized a $0.6 million charge for the change in the fair value of a warrant liability, and in January 2021, we recognized a $1.8 million gain on extinguishment of our Small Business Administration (SBA) Paycheck Protection Program (PPP) loan (see Note 13 of the Notes to Unaudited Condensed Consolidated Financial Statements for further discussion of the loan). As a result of higher operating losses and these charges, and the nonrecurring gain on the extinguishment of debt in the first half of 2021, net loss in the first half of 2022 was $4.1 million, or $0.08 per share, compared to a net loss of $1.3 million, or $0.03 per share, in the first half of 2021.

 

COVID-19 Assessment

 

The COVID-19 pandemic is a worldwide health crisis that is adversely affecting the business and financial markets of many countries, disrupting global supply chains, and creating volatility in the financial markets. The pandemic could adversely affect the demand for our products, and it poses the risk that we, or our customers, suppliers, and other business partners may be disrupted or prevented from conducting business for an uncertain period of time. The extent to which this would impact our financial results is unknown as it is dependent on future developments, which are highly uncertain and cannot be predicted. As such, it is difficult to estimate the exact magnitude of the COVID-19 pandemic on our business.

 

 

We have not had, and we do not expect, any of our facilities to be closed subject to government-mandated closures, and we have informed our customers that we anticipate operating throughout the COVID-19 outbreak. Disruption in the supply chain of raw materials used to produce our products, as a result of the COVID-19 outbreak, has not caused us to close any of our facilities, and to date, our employees have been reporting to work, either remotely or in-person without any material change in attendance or productivity. However, we cannot ensure that the COVID-19 outbreak will not cause disruptions to our business in the future.

 

Liquidity ,Going Concern and Capital Resources

 

We had $5.1 million in cash and equivalents as of June 30, 2022, a decrease of $0.7 million from $5.8 million on March 31, 2022. During the first half of 2022, we were able to offset higher operating losses and negative working capital management with increased borrowing.

 

Cash used in operating activities in the first six months of 2022 was $1.7 million, up from $1.4 million in the first six months of 2021, driven principally by higher net losses. Cash used in investing activities consisted of $0.4 million in capital expenditures, primarily for the purchase and installation of capital equipment at our MGI facility offset by $0.1 million in insurance proceeds. Cash from financing activities was $1.3 million, which included the $1.8 million borrowing on a line of credit, offset in part by $0.2 million in net payments on debt and financing agreements and a $0.2 million reduction in borrowing under our factoring facility.

 

Management believes that despite the multi-year history of operating losses and negative operating cash flows from continuing operations, there is no substantial doubt about our ability to continue as a going concern within one year after the date that these financial statements included in this Quarterly Report are issued. Factors alleviating this concern include the reduction in historical operating losses beginning in 2021, $5.1 million in cash and cash equivalents as of June 30, 2022, and our ability to procure additional capital if needed through a variety of sources.

 

On March 30, 2020, we entered into a sales agreement with respect to an at-the-market (ATM) offering program, under which we may offer and sell shares of our common stock having an aggregate offering price of up to $6.0 million, which we currently have $2.8 million remaining. Under the terms of the securities purchase agreement related to the September 2021 offering, we are prohibited from entering into an agreement to effect any at-the-market issuance until September 13, 2023.

 

Critical Accounting Estimates

 

Our discussion and analysis of our financial condition and results of operations are based upon unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures on the date of the financial statements. On an ongoing basis, we evaluate the estimates, including, but not limited to, those related to revenue recognition, inventory valuation, and long-lived asset impairment. We use authoritative pronouncements, historical experience and other assumptions as the basis for making judgments. Actual results could differ from those estimates.

 

Recent Accounting Pronouncements

 

See Note 3 in the Notes to Unaudited Condensed Consolidated Financial Statements for further discussion.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required by this item.

 

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosures. As of June 30, 2022, there have been no significant changes to our critical accounting policies and related estimates previously disclosed in our 2021 Annual Report on Form 10-K.

 

We evaluated, with the participation of our executive chairman, and chief financial officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our executive chairman and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

 

Changes in Internal Control over Financial Reporting

 

During the most recently completed fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are involved in or subject to, or may become involved in or subject to, routine litigation, claims, disputes, proceedings and investigations in the ordinary course of business. While the outcome of lawsuits and other proceedings against us cannot be predicted with certainty, in the opinion of management, individually or in the aggregate, no such lawsuits are expected to have a material effect on our financial position, results of operations or cash flows. We record accruals for contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated.

 

Item 1A. Risk Factors

 

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition, liquidity or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity or future results.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

During the quarter ended June 30, 2022, we issued the securities described below without registration under the Securities Act. The description below does not include issuances that were disclosed previously on Current Reports on Form 8-K. Unless otherwise indicated below, the securities were issued pursuant to the private placement exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended. All issuances below were made without any public solicitation, to a limited number of sophisticated persons and were acquired for investment purposes only.

 

During the quarter ended June 30, 2022, we issued 6,000 shares of common stock to a service provider, which is not a natural person, as compensation for service provided. The shares were valued at an aggregate of $2,100.

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

None

 

Item 5. Other Information

 

None

 

 

Item 6. Exhibits

 

The following exhibits are attached hereto and filed herewith:

 

       

Incorporated by Reference

   

Exhibit

Number

 

Exhibit Description

 

Form

 

File No.

 

Exhibit

Number

 

Filing/Effective

Date

 

Filed

Here-with

                         

31.1

 

Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

                 

X

31.2

 

Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

                 

X

32.1

 

Certification by Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

                 

X

101.INS (1)

 

Inline XBRL Instance Document

                 

X

101.SCH (1)

 

Inline XBRL Taxonomy Extension Schema Document

                 

X

101.CAL (1)

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document

                 

X

101.DEF (1)

 

Inline XBRL Taxonomy Extension Calculation Definition Linkbase Document

                 

X

101.LAB (1)

 

Inline XBRL Taxonomy Extension Calculation Label Linkbase Document

                 

X

101.PRE (1)

 

Inline XBRL Taxonomy Extension Calculation Presentation Linkbase Document

                 

X

104

 

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

                   

 

 

(1)

XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Dated: August 11, 2022

RiceBran Technologies

     
 

/s/ Peter G. Bradley

 
 

Peter G. Bradley

 

Director and Executive Chairman

 

 

/s/ Todd T. Mitchell

 
 

Todd T. Mitchell

 

Chief Financial Officer and Chief Operating Officer

 

20

Exhibit 31.1

 

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Peter G. Bradley, certify that:

 

1)

I have reviewed this quarterly report on Form 10-Q of RiceBran Technologies;

 

2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report was prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s disclosure internal control over financial reporting.

 

Dated: August 11, 2022

/s/ Peter G. Bradley

 
     
 

Name: Peter G. Bradley

 

Title: Director and Executive Chairman

        (Principal Executive Officer)

 

 

 

Exhibit 31.2

 

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Todd T. Mitchell, certify that:

 

1)

I have reviewed this quarterly report on Form 10-Q of RiceBran Technologies;

 

2)

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3)

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report was prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s disclosure internal control over financial reporting.

 

Dated:  August 11, 2022

/s/ Todd T. Mitchell

 
     
 

Name: Todd T. Mitchell

 

Title: Chief Financial Officer and Chief Operating Officer

         (Principal Financial Officer)

 

 

Exhibit 32.1

 

Certification of Principal Executive Officer and Principal Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the Quarterly Report on Form 10-Q of RiceBran Technologies (the Company) for the period ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the Report), each of the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

 

1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Company.

 

Dated:  August 11, 2022

   
     
 

/s/ Peter G. Bradley

 
 

Peter G. Bradley

 

Director and Executive Chairman

(Principal Executive Officer)

 

 

/s/ Todd T. Mitchell

 
 

Todd T. Mitchell

 

Chief Financial Officer and Chief Operating Officer

(Principal Financial Officer)

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No. 34-47551 and shall not be considered filed as part of the Form 10-Q or as a separate disclosure document.