ribt20210331

10-Q 1 ribt20210331_10q.htm FORM 10-Q ribt20210331_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, 2021

☐	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.)

1330 Lake Robbins Drive, Suite 250

The Woodlands, TX

(Address of Principal Executive Offices)

77380

(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 April 28, 2021, there were 45,451,966 shares of common stock outstanding.

PART I. FINANCIAL INFORMATION			Page
	Item 1.	Financial Statements (Unaudited)	3
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020	3
		Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2020	4
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	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
	Item 1.	Legal Proceedings	17
	Item 1A.	Risk Factors	17
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
	Item 3.	Defaults Upon Senior Securities	17
	Item 4.	Mine Safety Disclosures	17
	Item 5.	Other Information	17
	Item 6.	Exhibits	18
Signatures			19

	Three Months Ended March 31,
	2021			2020

Revenues	$	8,605		$	8,330
Cost of goods sold		7,933			8,735
Gross profit (loss)		672			(405	)
Selling, general and administrative expenses		1,741			2,550
Loss on disposition of property and equipment		7			-
Operating loss		(1,076	)		(2,955	)
Interest income		1			11
Interest expense		(112	)		(49	)
Gain on extinguishment of PPP loan		1,792			-
Other expense		(13	)		(45	)
Other income		-			5
Income (loss) before income taxes		592			(3,033	)
Income tax benefit		(1	)		-
Net income (loss)	$	591		$	(3,033	)

Earnings (loss) per common share:
Basic	$	0.01		$	(0.08	)
Diluted	$	0.01		$	(0.08	)

Weighted average number of shares outstanding:
Basic		45,635,185			39,963,155
Diluted		46,556,247			39,963,155

	March 31,			December 31,
	2021			2020
ASSETS
Current assets:
Cash and cash equivalents	$	5,418		$	5,263
Accounts receivable, net of allowance for doubtful accounts of $3 and $9		3,627			2,819
Inventories		1,494			1,878
Other current assets		1,722			1,380
Total current assets		12,261			11,340
Property and equipment, net		15,860			16,367
Operating lease right-of-use assets		2,372			2,452
Goodwill		3,915			3,915
Intangible assets		670			722
Total assets	$	35,078		$	34,796

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,076		$	955
Commodities payable		1,381			825
Accrued salary, wages and benefits		774			601
Accrued expenses		499			536
Operating lease liabilities, current portion		353			344
Due under insurance premium finance agreements		248			126
Due under factoring agreement		2,334			1,785
Finance lease liabilities, current portion		89			82
Long-term debt, current portion		596			572
Total current liabilities		7,350			5,826
Operating lease liabilities, less current portion		2,190			2,330
Finance lease liabilities, less current portion		123			113
Long-term debt, less current portion		1,154			3,107
Total liabilities		10,817			11,376
Commitments and contingencies
Shareholders' equity:
Preferred stock, 20,000,000 shares authorized: Series G, convertible, 3,000 shares authorized, stated value $225, 225 shares, issued and outstanding		112			112
Common stock, no par value, 150,000,000 shares authorized, 45,274,030 shares and 45,238,087 shares, issued and outstanding		322,468			322,218
Accumulated deficit		(298,319	)		(298,910	)
Total shareholders' equity		24,261			23,420
Total liabilities and shareholders' equity	$	35,078		$	34,796

	Customer
	A			B
% of revenue, three months ended March 31, 2021		7	%		10	%
% of revenue, three months ended March 31, 2020		8	%		17	%

% of accounts receivable, as of March 31, 2021		10	%		10	%
% of accounts receivable, as of December 31, 2020		17	%		1	%

	March 31,		December 31
	2021		2020		Estimated Useful Lives
Land	$	730	$	730
Furniture and fixtures		276		276	5-10 years
Plant		9,377		9,377	20-40 years, or life of lease
Computer and software		1,060		1,060	3-5 years
Leasehold improvements		1,880		1,880	4-15 years, or life of lease
Machinery and equipment		16,504		16,402	5-15 years
Property and equipment, cost		29,827		29,725
Less accumulated depreciation		13,967		13,358
Property and equipment, net	$	15,860	$	16,367

	Operating Leases				Finance Leases
Remaining leases terms (in years)	2.6	-	11.9		0.7	-	3.3
Weighted average remaining lease terms (in years)			6.7				2.5
Discount rates	6.3%	-	9.0	%	4.3%	-	6.0	%
Weighted average discount rate			7.7	%			5.3	%

	Operating			Finance
	Leases			Leases
2021 (nine months ended December 31, 2021)	$	355		$	102
2022		548			83
2023		528			52
2024		429			13
2025		439			-
Thereafter		1,029			-
Total lease payments		3,328			250
Amounts representing interest		(785	)		(38	)
Present value of lease obligations	$	2,543		$	212

2021 (nine months ended December 31, 2021)	$	456
2022		1,297
2023		9
2024		9
Principal maturities		1,771
Debt issuance costs		(21	)
Total long term debt, net	$	1,750

	Shares
	Preferred Series G		Common		Preferred Stock		Common Stock			Accumulated 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, vested at issuance and nonvested at issuance	$	28
Stock options		36
Restricted stock units		186
Compensation expense related to common stock awards issued under equity incentive plan	$	250

	Three Months Ended March 31,
	2021			2020
Cash flow from operating activities:
Net income (loss)	$	591		$	(3,033	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		612			579
Amortization		53			59
Stock and share-based compensation		253			312
Gain on extinguishment of PPP loan		(1,792	)		-
Other		(18	)		(79	)
Changes in operating assets and liabilities:
Accounts receivable		(808	)		(1,315	)
Inventories		384			(1,018	)
Accounts payable and accrued expenses		508			231
Commodities payable		556			1,108
Other		(340	)		(178	)
Net cash used in operating activities		(1	)		(3,334	)
Cash flows from investing activities:
Purchases of property and equipment		(325	)		(221	)
Net cash used in investing activities		(325	)		(221	)
Cash flows from financing activities:
Advances on factoring agreement		7,407			7,455
Payments on factoring agreement		(6,883	)		(6,995	)
Advances on insurance premium finance agreements		279			344
Payments on insurance premium finance agreements		(157	)		(144	)
Payments of debt and finance lease liabilities		(165	)		(32	)
Net cash provided by financing activities		481			628
Net change in cash and cash equivalents and restricted cash	$	155		$	(2,927	)

Cash and cash equivalents and restricted cash, beginning of period		5,263			8,444
Cash and cash equivalents and restricted cash, end of period		5,418			5,517
Net change in cash and cash equivalents and restricted cash	$	155		$	(2,927	)

Supplemental disclosures:
Cash paid for interest	$	85		$	26
Cash paid for income taxes	$	1		$	-

	Three Months Ended March 31,
	2021			2020
Average borrowings outstanding (in thousands)	$	879		$	1,152
Amortization of debt issuance costs (in thousands)	$	23		$	23
Fees paid, as a percentage of average oustanding borrowings		1.5	%		3.9	%
Interest paid, as a percentage of average outstanding borrowings		1.8	%		1.7	%

	March 31,		December 31,
	2021		2020
Mortgage promissory note - Dated September 2020. Interest accrues at an annual rate which is the greater of 11.0% above the lender's prime rate and 14.3%. Payable in monthly installments through June 2022. Net of $21 debt issuance costs at March 31, 2021.	$	1,686	$	1,817
Payroll Protection Program note - Dated April 2020. Interest accrued at an annual rate of 1.0%. Forgiven in January 2021.		-		1,792
Equipment notes - Initially recorded in November 2018, in the acquisition of Golden Ridge, at the present value of future payments using a discount rate of 4.8% per year, which we determined approximated the market rate for similar debt with similar maturities as of the date of acquisition. Payable in monthly installments. Expire at dates ranging through 2022.		32		37
Equipment note - Dated December 2019. Due in monthly installments through December 2024. Interest accrues at the effective discount rate of 9.3% per year.		32		33
Total long term debt, net	$	1,750	$	3,679

	RSU Shares Issued to Employees		Unrecognized Stock Compensation (in thousands)			Weighted Average Expense Period (Years)
Nonvested at December 31, 2020		1,495,400	$	730			1.4
Granted		452,400		412			2.0
Expensed		-		(186	)
Nonvested at March 31, 2021		1,947,800	$	956			1.4

	2021			2020
NUMERATOR (in thousands):
Net income (loss)	$	591		$	(3,033	)
Allocation of earnings to participating convertible preferred stock		(3	)		-
Numerator for basic EPS - income (loss) available to common shareholders		588			(3,033	)
Effect of dilutive securities:
Add back - allocation of earnings to participating convertible preferred stock		3			-
Reallocation of earnings to participating convertible preferred stock considering potentially dilutive securities		(3	)		-
Numerator for diluted EPS - adjusted income (loss) available to common shareholders	$	588		$	(3,033	)

DENOMINATOR:
Weighted average number of shares of shares of common stock outstanding		45,248,782			39,963,155
Weighted average number of shares of common stock underlying vested restricted stock units		386,403			-
Denominator for basic EPS - weighted average number of shares outstanding		45,635,185			39,963,155
Effect of dilutive securities:
Nonvested restricted stock units		845,893			-
Stock options		9,626			-
Warrants		65,543			-
Denominator for diluted EPS - adjusted weighted average number of shares outstanding		46,556,247			39,963,155

Dated: April 28, 2021

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

	/s/ Todd T. Mitchell
	Todd T. Mitchell
	Chief Financial Officer

SEC Form 10-Q filed by RiceBran Technologies