ribt20230331

ribt20230331_10q.htm

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 March 31, 2023

☐	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 May 11, 2023, there were 6,392,434 shares of common stock outstanding.

PART I. FINANCIAL INFORMATION			Page
	Item 1.	Financial Statements (Unaudited)	2
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022	3
		Condensed Consolidated Balance Sheets as of March 31, 2023, and December 31, 2022	4
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022	5
		Notes to Unaudited Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
	Item 4.	Controls and Procedures	16
PART II. OTHER INFORMATION			16
	Item 1.	Legal Proceedings	16
	Item 1A.	Risk Factors	16
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
	Item 3.	Defaults Upon Senior Securities	16
	Item 4.	Mine Safety Disclosures	16
	Item 5.	Other Information	16
	Item 6.	Exhibits	17
Signatures			18

	Three Months Ended March 31,
	2023			2022

Revenues	$	9,269		$	10,559
Cost of goods sold		9,551			10,057
Gross profit (loss)		(282	)		502
Selling, general and administrative expenses		1,731			1,692
Operating loss		(2,013	)		(1,190	)
Other income (expense):
Interest income		19			1
Interest expense		(196	)		(126	)
Change in fair value of derivative warrant liability		(28	)		(171	)
Other expense		(60	)		(34	)
Other income		256			4
Loss before income taxes		(2,022	)		(1,516	)
Income tax expense		(6	)		-
Net loss	$	(2,028	)	$	(1,516	)

Loss per common share:
Basic	$	(0.31	)	$	(0.29	)
Diluted	$	(0.31	)	$	(0.29	)

Weighted average number of shares outstanding:
Basic		6,567,978			5,252,996
Diluted		6,567,978			5,252,996

	March 31,			December 31,
	2023			2022

Current assets:
Cash and cash equivalents	$	3,412		$	3,941
Accounts receivable, net of allowance for credit losses of $8 and $27		3,337			3,703
Inventories		2,562			2,378
Other current assets		989			1,046
Total current assets		10,300			11,068
Property and equipment, net		14,214			14,207
Operating lease right-of-use assets		1,686			1,778
Intangible assets		351			380
Total assets	$	26,551		$	27,433

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,869		$	1,232
Commodities payable		1,818			1,546
Accrued salary, wages and benefits		926			696
Accrued legal		625			595
Accrued expenses		333			529
Operating lease liabilities, current portion		364			391
Due under bank line of credit		1,868			1,832
Due under factoring agreement		2,801			3,150
Due under insurance premium finance agreements		207			185
Finance lease liabilities, current portion		160			125
Long-term debt, current portion		1,192			996
Total current liabilities		12,163			11,277
Operating lease liabilities, less current portion		1,430			1,557
Finance lease liabilities, less current portion		504			325
Long-term debt, less current portion		1,152			1,296
Derivative warrant liability		97			69
Total liabilities		15,346			14,524
Commitments and contingencies
Shareholders' equity:
Preferred stock, 20,000,000 shares authorized:
Series G, convertible, 3,000 shares authorized, stated value $150,		75			75
150 shares, issued and outstanding
Common stock, no par value, 15,000,000 shares authorized,
6,384,934 shares and 6,309,509 shares, issued and outstanding		328,875			328,551
Accumulated deficit		(317,745	)		(315,717	)
Total shareholders' equity		11,205			12,909
Total liabilities and shareholders' equity	$	26,551		$	27,433

	Customer
	A			B			C			D			E
% of revenue, three months ended March 31, 2023		17	%		10	%		7	%		3	%		2	%
% of revenue, three months ended March 31, 2022		-	%		11	%		5	%		2	%		11	%

% of accounts receivable, as of March 31, 2023		-	%		22	%		10	%		12	%		1	%
% of accounts receivable, as of December 31, 2022		19	%		12	%		4	%		9	%		-	%

	Operating Leases			Finance Leases
Remaining leases terms (in years)	0.6	-	9.9	0.1	-	4.8
Weighted average remaining lease terms (in years)		5.3			4.3
Discount rates	6.3%	-	9.0%	2.8%	-	11.6%
Weighted average discount rate		7.8%			9.3	%

	Operating			Finance
	Leases			Leases
2023 (nine months ended December 31, 2023)	$	337		$	180
2024		429			182
2025		439			167
2026		451			164
2027		232			125
Thereafter		346			3
Total lease payments		2,234			821
Amounts representing interest		(440	)		(157	)
Present value of lease obligations	$	1,794		$	664

2023 (nine months ended December 31, 2023)	$	886
2024		1,346
2025		124
Principal maturities		2,356
Debt issuance costs		(12	)
Total long term debt, net	$	2,344

	Shares
	Preferred				Preferred		Common		Accumulated
	Series G		Common		Stock		Stock		Deficit			Equity
Balance, December 31, 2022		150		6,309,509	$	75	$	328,551	$	(315,717	)	$	12,909
Common stock awards under equity incentive plans		-		68,693		-		300		-			300
Stock units issued to vendor		-		6,132		-		23		-			23
Common stock issued to vendor		-		600		-		1		-			1
Net loss		-		-		-		-		(2,028	)		(2,028	)
Balance, March 31, 2023		150		6,384,934	$	75	$	328,875	$	(317,745	)	$	11,205

Stock options	$	27
Restricted stock units		273
Compensation expense related to common stock awards issued under equity incentive plan	$	300

	RSUs										SUs
	Number of Units			Unrecognized Compensation (in thousands)			Average Grant Date Fair Value per share		Weighted Average Expense Period (Years)		Numer of Units			Unrecognized Compensation (in thousands)			Average Grant Date Fair Value per share		Weighted Average Expense Period (Years)
Nonvested at December 31, 2022		366,818		$	1,024		$	2.79		2.8		160,000		$	201		$	1.26	$	3
Granted		76,088			70			0.93		-		6,132			5			0.74		-
Forfeited		(646	)		(3	)		4.64		0.6		-			-			-		-
Vested with service		(164,781	)		-					-		(6,132	)		-			-		-
Expensed		-			(274	)	NA			-		-			(24	)		-		-
Nonvested at March 31, 2023		277,479		$	817		$	2.94		2.6		160,000		$	182		$	-		2.5

	Three Months Ended March 31,
	2023			2022
Cash flow from operating activities:
Net loss	$	(2,028	)	$	(1,516	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation		517			516
Amortization		29			43
Stock and share-based compensation		324			246
Change in fair value of derivative warrant liability		28			171
Other		(78	)		(48	)
Changes in operating assets and liabilities:
Accounts receivable		385			(493	)
Inventories		(184	)		(39	)
Accounts payable and accrued liabilities		616			884
Commodities payable		272			589
Other		57			(163	)
Net cash provided by (used in) operating activities		(62	)		190
Cash flows from investing activities:
Purchases of property and equipment		(230	)		(157	)
Proceeds from insurance on involuntary conversion		-			109
Net cash used in investing activities		(230	)		(48	)
Cash flows from financing activities:
Advances on factoring agreement		8,559			8,856
Payments on factoring agreement		(8,908	)		(8,797	)
Advances of bankline of credit		36			-
Advances on insurance premium finance agreements		206			374
Payments on insurance premium finance agreements		(184	)		(219	)
Proceeds from debt, net of issuance costs		2,494			-
Payments of debt and finance lease liabilities		(2,440	)		(313	)
Net cash used in financing activities		(237	)		(99	)
Net change in cash and cash equivalents	$	(529	)	$	43

Cash and cash equivalents, beginning of period		3,941			5,825
Cash and cash equivalents, end of period		3,412			5,868
Net change in cash and cash equivalents	$	(529	)	$	43

Supplemental disclosures:
Cash paid for interest	$	193		$	118
Cash paid for income taxes	$	1		$	-

	March 31,		December 31,
	2023		2022
Finished goods	$	1,937	$	1,737
Raw materials		386		423
Packaging		239		218
Inventories	$	2,562	$	2,378

	March 31,		December 31,
	2023		2022		Estimated Useful Lives (years)
Land	$	730	$	730
Furniture and fixtures		259		259	5-10
Plant		10,095		10,095	20-40, or life of lease
Computer and software		450		450	3-5
Leasehold improvements		1,838		1,838	4-15, or life of lease
Machinery and equipment		16,227		15,703	5-15
Property and equipment, cost		29,599		29,075
Less accumulated depreciation		15,385		14,868
Property and equipment, net	$	14,214	$	14,207

	Three Months Ended March 31,
	2023			2022
Average borrowings outstanding (in thousands)	$	2,771		$	2,822
Amortization of debt issuance costs (in thousands)	$	-		$	23
Fees paid, as a percentage of average oustanding borrowings		2.2	%		1.2	%
Interest paid, as a percentage of average outstanding borrowings		2.2	%		1.5	%

	Number of RSUs
Vested at December 31, 2022		224,725
Vested with service		170,913
Issued at vesting		(74,825	)
Vested at March 31, 2023		320,813

	Level 1		Level 2		Level 3		Total

Total liabilities at fair value as of March 31, 2023 - Derivative warrant liability	$	-	$	-	$	97	$	97
Total liabilities at fair value as of December 31, 2022 - Derivative warrant liability	$	-	$	-	$	69	$	69

	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 March 31, 2023:
Derivative warrant liability	$	69	$	(28	)	$	-	$	-	$	97	$	(28	)
Total Level 3 fair value	$	69	$	(28	)	$	-	$	-	$	97	$	(28	)

Three Months Ended March 31, 2022:
Derivative warrant liability	$	258	$	(171	)	$	-	$	-	$	429	$	(171	)
Total Level 3 fair value	$	258	$	(171	)	$	-	$	-	$	429	$	(171	)

	March 31, 2023			December 31, 2022
Assumed exercise price	$	2.72		$	2.72
Assumed volatility		96.8	%		92.2	%
Assumed risk free interest rate		4.2	%		4.3	%
Expected life of options (in years)		3.5			3.7
Expected dividends		-			-

Dated: May 11, 2023

	/s/ Peter G. Bradley
	Peter G. Bradley
	Director and Executive Chairman


	/s/ William J. Keneally
	William J. Keneally
	Interim Chief Financial Officer

SEC Form 10-Q filed by RiceBran Technologies