10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2013

o        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from               to

Commission File Number 0-32565

RiceBran Technologies

(Exact name of registrant as specified in its Charter)

California	87-0673375
(State of Incorporation)	(I.R.S. Employer Identification No.)
6720 N. Scottsdale Road, Suite # 390 Scottsdale, AZ	85253
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (602) 522-3000

Securities registered under Section 12(b) of the Exchange Act:

NONE

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, no par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o No x

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).  Yes x No o

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

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

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended).  YES o NO x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes x No o

As of June 30, 2013, the aggregate market value of our common stock held by non-affiliates was $13,826,116.

As of March 25, 2014, there were 2,869,274 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrant’s Definitive Proxy Statement for its annual meeting of shareholders, which Definitive Proxy Statement will be filed with the Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2013, are incorporated by reference into Part III of this Annual Report on Form 10-K.

FORM 10-K

INDEX

PART I			Page
	Item 1.	Business	4
	Item 1A.	Risk Factors	14
	Item 1B.	Unresolved Staff Comments	22
	Item 2.	Properties	22
	Item 3.	Legal Proceedings	23
	Item 4.	Mine Safety Disclosures	24
PART II
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
	Item 6.	Selected Financial Data	26
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	35
	Item 8.	Financial Statements and Supplementary Data	35
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	69
	Item 9A.	Controls and Procedures	69
	Item 9B.	Other Information	69
PART III
	Item 10.	Directors, Executive Officers and Corporate Governance	70
	Item 11.	Executive Compensation	70
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	70
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	70
	Item 14.	Principal Accountant Fees and Services	70
PART IV
	Item 15.	Exhibits and Financial Statement Schedules	70

2

FORWARD-LOOKING STATEMENTS

This Annual Report includes forward-looking statements that involve substantial risks and uncertainties.  These forward-looking statements are not historical facts, but are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions.  Words such as “believes,” “anticipates,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.  These forward-looking statements are not guarantees of future performance and concern matters that could subsequently differ materially from those described in the forward-looking statements.  Actual events or results may also differ materially from those discussed in this Annual Report.  These risks and uncertainties include those described in “Risk Factors” and elsewhere in this Annual Report.  Except as required by law, we undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this Annual Report.

3

PART I

ITEM 1. BUSINESS

Overview

History and Our Corporate Structure

We are a human food ingredient, nutritional supplement and animal nutrition company focused on value-added processing and marketing of healthy, natural and nutrient dense products derived from raw rice bran (RRB), an underutilized by-product of the rice milling industry.

Using our bio-refining business model, we apply our proprietary and patented technologies and intellectual properties to convert RRB into numerous high value products including stabilized rice bran (SRB), rice bran oil (RBO), defatted rice bran (DRB), RiBalance (a complete rice bran nutritional package derived from further processing of SRB), RiSolubles (a highly nutritious, carbohydrate and lipid rich fraction of SRB), RiFiber (a fiber rich derivative of SRB), ProRyza rice bran protein-based products and a variety of other valuable derivatives extracted from these core products.

Our target markets are natural food, functional food, nutraceutical supplement, cosmetic and animal nutrition manufacturers, wholesalers and retailers, both domestically and internationally.

In February 2008, through our Delaware subsidiary Nutra S.A., we acquired 100% ownership of Industria Riograndens De Oleos Vegetais Ltda. (Irgovel), our rice bran oil processing plant in Pelotas, Brazil.  During 2011, we sold a minority interest in Nutra SA, to AF Bran Holdings-NL LLC and AF Bran Holding LLC.

We have two reportable operating segments in 2013: (i) USA segment, which manufactures and distributes SRB in various granulations along with Stage II products and derivatives and (ii) Brazil segment, which extracts crude RBO and DRB from rice bran, which are then further processed into fully refined rice bran oil for sale internationally and in Brazil, compounded animal nutrition products for horses, cows, swine, sheep and poultry and a number of valuable human food and animal nutrition products derivatives and co-products. In addition we incur corporate and other expenses not directly attributable to operating segments, which include costs related to our corporate staff, general and administrative expenses including public company expenses, intellectual property, professional fees, and other expenses.  No Corporate allocations, including interests, are made to the operating segments.

The combined operations of our USA and Brazil segments encompass our bio-refining approach to processing RRB into various high quality, value-added constituents and finished products.  Over the past decade, we have developed and optimized our proprietary bio-refining processes to support the production of healthy, natural, hypoallergenic, gluten free, and non-genetically modified ingredients and supplements for use in human meats, baked goods, cereals, coatings, health foods, nutritional supplements, nutraceuticals and high-end animal nutrition and health products.

On January 2, 2014, we acquired H&N Distribution Inc., an Irving, Texas based company (H&N) which has a blending and co-packaging facility in Irving, Texas, where it manufactures products for the human nutrition market.  See Note 19 to the consolidated financial statements for further discussion of the terms of the acquisition.

We incorporated under the laws of the State of California on March 18, 1998.  From July 2003 until October 2012, our corporate name was “NutraCea.”  Our common stock is currently trading on NASDAQ Capital Market under the symbol “RIBT.”  Certain of our warrants are currently trading on the same exchange under the symbol “RIBTW”.

In November 2009, we filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.  The bankruptcy proceeding did not include any of our subsidiaries.  We managed our assets and operated our business as debtor-in-possession under the jurisdiction of the bankruptcy court from November 2009 until we successfully exited Chapter 11 proceedings in November 2010, under an amended plan of reorganization.  In January 2012, we made the final payments to our unsecured creditors under the amended plan of reorganization.  All creditors under the amended plan were paid all amounts due to them, including interest.

USA

In 2013, the USA segment produced SRB inside two supplier rice mills in California and one owned facility in Louisiana.  A facility located in Lake Charles, Louisiana has been idle since May 2009 and the operating equipment from that plant has been sold.  The USA segment also includes our Dillon, Montana Stage II facility which produces our Stage II products RiSolubles (a highly nutritious, carbohydrate and lipid rich fraction of SRB), RiFiber (a fiber rich derivative of SRB), RiBalance (a complete rice bran nutritional package derived from further processing SRB) and ProRyza (protein based products).  Stage II refers to the proprietary processes run at our Dillon, Montana facility and includes products produced at that facility using our patented processes.  The manufacturing facilities included in our USA segment have proprietary processing equipment and patented technology for the stabilization and further processing of rice bran into finished products.  In 2013, approximately 55% of USA segment revenue is from sales of human food products and approximately 45% is from sales of animal nutrition products.  We lease a 28,000 square foot facility in West Sacramento, California that houses a laboratory, warehouse and production facilities.  Two rice bran stabilization facilities are co-located within supplier rice mills in Arbuckle and West Sacramento, California.

4

Brazil Segment

The Brazil segment consists of the consolidated operations of Nutra SA, whose only operating subsidiary is Irgovel, located in Pelotas, Brazil.  Irgovel manufactures RBO and DRB products for both the human ingredient and animal nutrition markets in Brazil and internationally.  In refining RBO to an edible grade, several co-products are obtained.  One such product is distilled fatty acids, a valuable raw material for the detergent industry.  Irgovel also produces rice lecithin, which has application in human nutrition, animal nutrition and industrial applications.  DRB is compounded with a number of other ingredients to produce complex animal nutrition products which are packaged and sold under Irgovel brands in the Brazilian market, sold as a raw material for further processing into human food ingredients or sold in bulk into the animal nutrition markets in Brazil and neighboring countries.  In 2013, approximately 45% of Brazil segment product revenue is from sales of RBO products and 55% is from sales of DRB products.

Our Irgovel subsidiary is comprised of several facilities on approximately 19 acres in Pelotas, Brazil.  These facilities include a plant for extraction of RBO from raw rice bran, RBO refining processes, compounded animal nutrition manufacturing, consumer RBO bottling, distilled fatty acid manufacture, lecithin manufacture, and support systems including steam generation, maintenance, administrative offices and a quality assurance laboratory.

Ownership Interest in Nutra SA

In December 2010, we entered into a membership interest purchase agreement with AF Bran Holdings-NL LLC and AF Bran Holdings LLC (collectively, the Investors) and sold a minority interest in Nutra SA to the Investors.  The Investors initially purchased a 35.6% interest in Nutra SA.  The Investors ownership percentage in Nutra SA averaged 49.0% in 2013 and 2012.  Following the closing of the underwritten public offering in December 2013 and completion of the private placement offering in March 2014, we invested an additional $4.9 million in Nutra SA.  As of March 25, 2014, we own 56.7% of Nutra SA with the remaining 43.3% held by the Investors.

The Investors have the right to force the sale of all Nutra SA assets on or after January 1, 2015, or upon the failure to process a certain level of rice bran in the second and third quarters of 2014.  The right terminates upon the occurrence of certain events (a $50.0 million Nutra SA initial public offering or a change of control, as defined).  We may elect to exercise a right of first refusal to purchase the Investors’ interest instead of proceeding to a sale.

Under the limited liability company agreement for Nutra SA (LLC agreement), as amended, any units held by the Investors beginning January 1, 2014, accrue a yield at 4% (the Yield).  Commencing with the first quarter of 2014, Nutra SA must make distributions to the Investors quarterly in the amount equal to the previously accrued and unpaid Yield plus any additional distributions owed to the Investors, to the extent there is distributable cash, as defined in the LLC agreement.

Following the payment of the Yield, Nutra SA must distribute all distributable cash (as defined in the LLC Agreement) to the members on March 31 of each year as follows: (i) first, to the Investors in an amount equal to a multiplier (Preference Multiple) times the Investors’ capital contributions, less the aggregate amount of distributions paid to the Investors, (ii) second, to us in an amount equal to two times the capital contributions made by us, less the aggregate amount of distributions paid to us; and (iii) third, to us and the Investors in proportion to our respective membership interests.  The Preference Multiple is currently 2.3.

Under an October 2013 amendment, in November 2013, the Investors contributed an additional $0.9 million for units in Nutra SA. We agreed to pay to Nutra SA ninety percent of any funds received from the escrow account in excess of the sum of (i) $1.0 million and (ii) our contributions to Nutra SA made after March 25, 2014, with no resulting change in our Nutra SA voting rights (see Note 14 to the consolidated financial statements.). In the second and third quarters of 2013, we transferred $0.7 million and $0.1 million in cash to Nutra SA.  In exchange, title was returned to us for certain equipment contributed to Nutra SA in December 2012 with an historical cost of $0.2 million.

Under the LLC agreement, the business of Nutra SA is to be conducted by the manager, currently our CEO, subject to the oversight of the management committee.  The management committee is comprised of three of our representatives and two Investor representatives.  Upon an event of default or a qualifying event, we will no longer control the management committee and the management committee will include three Investor representatives and two of our representatives.  In addition, following an event of default or a qualifying event, a majority of the members of the management committee may replace the manager of Nutra SA.

5

Background

Consistent with our mission to convert feed to food, our greatest opportunities are in the functional food, nutritional supplement, nutraceutical and human food ingredient markets.

Functional Foods, Nutritional Supplements and Nutraceuticals

The US nutraceutical and functional foods market is projected to reach $75.3 billion in 2017 and grow at a compounded annual growth rate of nearly 6% between 2013 and 2017.  Premium ingredient manufacturers are in high demand and we are strategically positioned to take advantage of this growing and sustainable market opportunity as discussed below in “Our Growth Strategy”.

Nutraceuticals covers a range of products including botanical extracts, dietary supplements, isolated nutrients and medical foods.  Our products can be used as functional ingredients in nutraceutical products to provide certain specific nutrients or food components (including antioxidants, oryzanols, vitamin E, vitamin B, and fiber) and general nutritional supplementation.  Our ingredient products are primarily sold to consumer nutrition and healthcare companies, nutritional supplement retailers, and multi-level personal product marketers.  In August 2013, we entered into a multi-year agreement to sell certain of our Stage II products to a rapidly growing direct marketing company.  Pursuant to that agreement, that company will purchase a minimum of $7.7 million in products during the term of the agreement which expires in December 2016.  We will seek additional long-term supply agreements with similar companies in the future.  As part of this strategy, we have been working with co-packaging and fulfillment companies to expand our presence in these markets.

Human Food Ingredients

Our SRB, DRB, RBO and derivatives are nutritional, economical and beneficial food products that contain a unique combination of oil, protein, carbohydrates, vitamins, minerals, fibers, and antioxidants that enhance the nutritional value of popular consumer products.  Foods that are ideally suited for the addition of our SRB and DRB to their products include processed meats, cereals, baked goods, breading and batters.  The inclusion of DRB in breading and batters can result in a reduction in oil uptake, higher moisture retention, improved nutritional profiles, and reduced costs.

In 2008, we received USDA/FSIS approval to market rice bran as an ingredient to be used as a filler in comminuted meat products, such as meat and poultry sausages that contain binders, nugget-shaped patties, meatballs, meatloaf, and meat and poultry patties.  Our products replace functional ingredients like soy protein isolate, soy protein concentrate, modified food starch, pea protein and mustard flour at a significantly reduced cost.  With strong application benefits such as reduced cost per unit, increased product yield, and reduced purge, our SRB has a strong marketing position in the US meat market and an even stronger position outside the US where non-meat ingredients make up a larger percentage of meat products.

Animal Nutrition

Our SRB and DRB are marketed as feed ingredients in the US and international animal nutrition markets.  We will continue to pursue high margin sales opportunities in those markets.  Our SRB and DRB are used as equine feed ingredients and have been shown to provide health benefits.  Show and performance horses represent the premium end of the equine market and are a key target for our animal nutrition products.  In our Brazil segment, we also blend DRB with other ingredients to produce a variety of feed formulations targeted to animal species such as horses, beef cattle, dairy cows, pigs, sheep and poultry.

About Rice Bran

Rice is the staple food for over half of the world’s population and is the staple food source for several of the world’s most populous countries.  Asia accounts for roughly 90% of global rice production and China is the world’s number one rice producer.  Globally, Brazil and the United States rank about 9th and 10th, respectively, in production of rice at approximately 11 million metric tons annually.

When harvested from the field, individual rice kernels are stored in common receiving locations such as farm silos for future delivery to grain dryers or area rice mills.  At this stage, large quantities of individual rice kernels are collectively called “paddy rice,” or “rough” rice.  In this form, the rice kernel is fully enveloped by the rice hull, which serves as a protective cover, shielding the inner rice kernel from damage.

6

After storage and drying, if necessary, paddy rice is cleaned of foreign material (scalping, de-stoning and aspiration) just before it enters the first stage of milling, or paddy husking.  In the paddy husker, the hull is removed from rough rice by differential speed rubber rollers.  Loosened hulls are carried off by aspiration.  After husking, a paddy separator uses a reciprocating motion to separate normal brown rice kernels (caryopsis) from unhusked kernels which are returned to the paddy husker.

In the second stage of milling, the outer brown layers of bran are removed from the inner white starch endosperm by an abrasive or frictional milling process which produces a milled, white rice kernel.  After milling, white rice is typically sorted by size to remove broken pieces of rice kernels from whole kernels, as well as color sorting to remove discolored kernels.  Additional stages may be required (per customer specifications) to polish the white rice to a smooth surface.

Raw rice bran collected from the milling process is composed of rice germ and several sub-layers (pericarp, testa, nucellus and aleurone) surrounding the white starchy endosperm.  Commercial rice bran makes up approximately 10% of rough rice by weight.  Rice germ, an especially nutrient rich material, makes up approximately 10% of commercial rice bran by weight.

As brown rice is milled into white rice, the oils present in raw rice bran come into contact with native lipase enzymes that are naturally present in the rice kernel.  These lipase enzymes initiate a rapid enzymatic hydrolysis of the oil, converting oils (triglycerides) into monoglycerides, diglycerides and free fatty acids (FFA).  As the FFA content builds in raw rice bran, the bran becomes unpalatable and off flavors (rancidity) develop.  If left unchecked, enzymatic degradation at normal room temperatures can increase the FFA levels to 5-8% within 24 hours and can continue at a rate of approximately 4-5% per day thereafter.  Enzymatic degradation is the most serious form of degradation of raw rice bran. Rice bran stabilization is the process of carefully deactivating native enzymes to prevent the increase of FFA otherwise caused by lipase enzyme activity. Proper stabilization is critical in the preservation of the nutritional value of the bran, an important nutrient source that is largely used as animal feed or otherwise wasted.

Historically there have been a number of attempts to develop rice bran stabilization techniques, including the use of chemicals, microwave heating, or variations of existing extrusion technology.  Many of these approaches have had limited success in part because they have produced rice bran with limited shelf life or with significant degradation of nutrients.

Our Technologies

Our Proprietary Rice Bran Stabilization Technology

Our stabilization process uses proprietary innovations to create a combination of temperature, pressure and other conditions necessary to thoroughly deactivate enzymes without significantly damaging the structure or nutrient content of raw rice bran.  This means that higher value compounds in bran, such as oils, proteins and phytonutrients are left undamaged and are available for utilization.  Our process does not use chemicals to stabilize raw rice bran.

Our stabilizers are designed to be installed adjacent to, on the premises of or in near proximity to any conventional rice mill so that freshly milled raw rice bran can be quickly delivered to our proprietary stabilizers.  Process logic controllers maintain exact process conditions within the prescribed pressure/temperature regime.  In case of power failure or interruption of the flow of fresh bran into the system, the electronic control system is designed to purge the equipment of materials in process and resume production only after proper operating conditions are re-established.

SRB leaving our system is then discharged onto cooling units specifically designed to control air pressure and humidity.  Cooled SRB can be loaded into bulk hopper trucks for large volume customers or sent by pneumatic conveyor to a bagging unit for packaging into 50 pound or 2,000 pound sacks.

Each stabilization module can process approximately 2,000 pounds of bran per hour and has a capacity of over 7,200 tons per year.  Stabilization production capacity can be doubled, tripled or further multiplied by installing additional units sharing a common conveyor and stage system, which we believe can handle the output of the world’s largest rice mills.  We have also developed and tested a smaller production unit, with a maximum production capacity of 840 tons per year, for installation in countries or locations where rice mills are substantially smaller than those in the United States.

Additional patented and proprietary processes involve enzyme treatment of SRB or DRB to produce fractions enriched in one or more macronutrients, including proteins, fibers, lipids and micronutrients such as vitamins, minerals and phytosterols, among others.  In these processes SRB or DRB, in an aqueous slurry, is treated with one or more enzymes, centrifugally separated and the fractions dried on drum driers.

7

Our Bio-Refining Process

Rice bran is hypoallergenic and a valuable source of protein with a balanced amino acid profile for human nutrition and is rich in healthy oil, vitamins, antioxidants, dietary fiber and other nutrients.  The approximate composition and caloric content of our SRB is as follows:

Fat (oil)	18-23%
Protein	12-16%
Total Dietary Fiber	20-30%
Moisture	4-8%
Ash	6-14%
Calories	3.2 kcal/gram

Rice bran contains approximately 18-23% oil, which has a favorable fatty acid composition and excellent heat stability.  Rice bran oil contains essential fatty acids and a broad range of nutraceutical compounds that have been demonstrated to have therapeutic properties.

In the bio-refining process, raw rice bran is obtained from a number of rice mills and transported to a facility within which it is first stabilized via extrusion and then solvent extracted to produce crude RBO and DRB.  Crude RBO is subsequently processed in a number of steps designed to sequentially capture constituents of value and to remove and discard impurities.  The final outcome of these steps is a highly refined, edible RBO that has superior flavor and functional properties.  In addition, the various co-products of crude RBO processing, distilled fatty acids for example, are refined and sold as products in their own right.  DRB is finely ground and packaged for use as a versatile food ingredient in many applications.  DRB may also be compounded with other ingredients such as a vegetable proteins, carbohydrates, vitamin premixes and minerals to produce an array of nutritionally targeted animal feeds for various species.  The DRB can also be further processed to extract and concentrate protein and dietary fiber.  Our bio-refining process and related technologies are being continuously improved and optimized as we examine the technical and commercial feasibility of producing additional products derived from both RBO and DRB.

DRB contains many of the same nutritional and functional benefits as SRB, except that the oil has been removed.  This is important for several ingredient applications where SRB’s oil content could present food formulation challenges.  By removing oil from SRB, nutritionists have greater options to formulate DRB into breakfast bars, low-calorie foods, low-fat baking applications and batter and breading for frying applications.  Additionally, DRB is ideally suited for downstream enzymatic processing, transforming DRB into an ideal feedstock for protein concentrates and fiber concentrates.

RBO as extracted from stabilized rice bran can be utilized in a variety of edible and industrial oil applications.  With proper processing, RBO becomes high quality cooking oil possessing beneficial high temperature frying characteristics.  RBO has a unique fatty acid content that imparts improved oxidative stability as compared to other vegetable oils such as soy or cottonseed giving it advantages when used in food applications.  The RBO extraction process utilized at our Brazilian facility uses a conventional solvent extraction process to separate oil from raw bran, resulting in crude RBO available for sale to industrial markets or other processors.  Additional refining processes done in Brazil can involve degumming, neutralization, bleaching, de-waxing and deodorizing.  A bio-refining process approach results in numerous marketable co-products in addition to the actual end product.

Our Growth Strategy

With the proceeds from our recent financing efforts, we are positioned to capitalize on specific market conditions that we believe will increase market acceptance of our products and lead to increased growth and profitability.  These market conditions are:

1. Increasing global demand for vegetable oil – Our Brazil segment currently sells all of the rice bran oil it can produce in our oil extraction and refining plant in Pelotas, Brazil.  Following the capital expansion project at this plant, we expect raw rice bran processing capacity to increase by approximately 50% in early 2014.

2. Increasing demand for new protein sources – We have co-developed proprietary technologies with DSM Innovation Center, a subsidiary of Royal DSM N.V., that enables the extraction of protein from DRB and SRB feed-stocks that we produce in both of our Brazil and USA segments.  We recently launched new protein products from our US operations based on these technologies and plan to produce protein from DRB in our Brazil segment in the future.  In addition, we have entered into a series of agreements with various affiliates of Wilmar International Limited (collectively, Wilmar) to develop and commercialize rice bran products, including protein, for the China market.  Wilmar currently operates 12 large rice mills in China and is a leading producer of raw rice bran that is available for further processing into higher value products such as protein and fiber.

8

3. Demand for “clean” labels on food products – The market for healthy and nutritious foods is rapidly expanding in the US, Europe and other global markets with increasing demand for healthy, natural and minimally processed ingredients that are hypoallergenic, non-genetically modified, and produced in a sustainable fashion.  The regulatory need to add front-of-label warnings on food items is driving food companies to replace standard food ingredients like soy and wheat with “cleaner” ingredients such as rice bran which is non-allergenic, non-genetically modified, natural and minimally processed.  Incorporation of our food ingredients by major global food companies into meats, baked goods and cereals has steadily increased in the past year helping drive sales.  We expect this growth to continue as more food companies adopt rice bran as a standard food ingredient.  This trend is not limited to human foods as we are finding a similar transition to “clean” ingredients among high-end animal nutrition companies.

4. The value of proprietary, evidence-based functional ingredients for nutraceuticals and functional foods – With increasing medical costs associated with doctor visits and medications, consumers are becoming more proactive in adopting and maintaining healthier lifestyles through exercise, balanced nutrition and increased consumption of functional foods and nutraceuticals.  Associated with this trend is higher demand by marketers of nutraceuticals and functional foods for novel functional ingredients and particularly for proprietary and patented ingredients that provide barriers to competition in the marketplace, therefore commanding higher premiums.  We currently develop and commercialize proprietary rice bran ingredients and derivatives from our Stage II facility in the USA segment.

Expand Our Nutraceutical and Functional Foods (NFF) Business

The US nutraceutical and functional foods market is projected to reach $75.3 billion in 2017 and grow at compound annual growth rate of nearly 6% between 2013 and 2017.  We have invested significant resources on research and development of rice bran extracts with health-related applications.  Functionalities for a subset of these products were validated through scientific studies and human clinical studies.  Our portfolio of functional ingredients includes rice bran extracts that demonstrate beneficial properties in areas of cardiovascular health, weight management, glucose balance, inflammatory response and gastrointestinal health.  Premium ingredient manufacturers are in high demand and we are strategically positioned to take advantage of this growing and sustainable market opportunity.  We believe our proprietary technology and patents represent valuable assets for achieving strategic leverage in this industry segment particularly in the nutraceuticals, functional foods and functional beverages sectors.

In late 2009, we ceased further development of our NFF business as we repositioned our overall business.  We are now well positioned to expand our NFF business by adopting the following strategy:

Direct marketing to formulators and co-packers.  We believe that marketing our active ingredients directly to formulators and co-packers who manufacture turnkey finished products for direct to consumer marketing companies (i.e. multi-level marketing (MLM), web, radio, retail) and to active ingredient distributors will reduce new product development cycles and drive sales of our functional ingredients.  Co-packers and distributors of healthy and natural products have established credibility with multiple marketing companies who rely on these businesses to develop and manufacture new turnkey products.  In our experience, working with formulators and co-packers to sell finished products to marketing and distribution companies can shorten the product development cycle and increases sales quickly.

In December 2010, we began working with H&N, a company specializing in filling and packaging healthy and natural products for NFF markets to develop turnkey products for a MLM company.  This resulted in sales of approximately $0.1 million of certain Stage II products in 2011.  Sales in 2012 increased to approximately $0.3 million and through August 2013 were approximately $0.6 million.  In August 2013, we entered into a multi-year agreement to sell one of our Stage II products to a rapidly growing direct marketing company.  Pursuant to the agreement, that company will purchase a minimum of $7.7 million in products during the term of the agreement which expires in December 2016.  In January 2014, we purchased H&N.

In September 2013, we entered into an agreement with a Taiwanese marketing and distribution company to supply them with another of our Stage II products for exclusive distribution in Taiwan.  The agreement is renewable based on annual minimum purchases.  In 2014, we entered in an additional agreement with the Taiwanese company to supply Stage II products for Malaysia.

We believe that focusing our marketing efforts on distributors, formulators and co-packaging companies will increase sales of our Stage II products in both the short- and long-term as new functional ingredients are added to our portfolio of products.

Acquisition of formulating and packaging company that serves the NFF.  In January 2014, we acquired H&N.  By incorporating H&N’s formulating and packaging capabilities into our business model, we expect to drive sales of our Stage II products into multiple NFF channels allowing us to capture not only single ingredient sales but also sales of blended finished products consisting predominantly of our ingredients blended with other products and sold as a finished product on a business to business basis.

9

Increase production capacity of our Stage II products.  Production of certain Stage II products at our Dillon, Montana facility is projected to grow by over 400% by 2016, as compared to current production levels.  The Dillon plant can accommodate the growth in production through early 2015 but will require additional production capacity during 2015.  As part of our growth strategy, we plan to use part of the proceeds from our recent fund raising efforts to double production capacity at our Dillon plant.  Expansion efforts are projected to begin in the second quarter of 2014 with completion targeted for the end of 2014.

Develop novel proprietary functional ingredients.  As part of our long-term strategy to grow the NFF business, we will continue to develop functional ingredients and packaged, compounded finished products from rice bran and to validate their functionality through evidence-based scientific studies and human clinical trials.

Increase Global Distribution Network

Our growth strategy includes increasing sales of our products in overseas markets.  As part of this strategy, in July 2013 we amended our exclusive distribution agreement with Beneo-Remy, a 100% owned subsidiary of Sudzucker AG, a German public company, under which Beneo-Remy will exclusively distribute our SRB product and non-exclusively distribute our other products to more than 40 countries in Europe, Middle East, Africa and other geographies.  As previously described above, in September 2013, we also entered into an exclusive distribution agreement with a Taiwanese company to market our rice bran derivatives in Taiwan.  We plan to add additional distributors to our network in Canada, Mexico, Central/South America, Asia and other global markets.

Complete Expansion of our Rice Bran Bio-Refinery in Brazil

Our Irgovel facility is in the final stages of a major expansion that is expected to be completed at the end of the first quarter of 2014, and fully operational by the end of the second quarter of 2014.  This expansion should increase RRB processing approximately 50% from current capacity of 6,000 metric tons per month to approximately 9,000 metric tons per month of processed RRB resulting in higher revenues and profitability.

Co-Research and Development and Investment in New Wilmar Businesses

We will continue to collaborate with Wilmar’s research and development and commercialization groups to develop and market rice bran derived products in China.  Under the agreements, we obtained the right to purchase 45% of the capital stock of any entity Wilmar establishes to develop new products relating to rice bran or its derivative, as defined in the agreement, using the intellectual property licensed to Wilmar.  If we decline the right to purchase 45% of the capital stock of any such new entity, we have the option to purchase 25% of the entity within two years of the entity’s formation.  The exercise price for this option will equal 25% of the capital investment made in the entity, plus interest, as defined in the agreement.  We believe this strategic partnership represents a significant opportunity for us to participate in the Asia food market and to increase the overall value of our business.

Continue to Generate Evidence-Based Functionality of Our Proprietary Ingredients

A 57-subject clinical trial conducted by Advanced Medical Research, with our funding, suggested that consumption of our RiSolubles nutritional supplements may lower blood glucose levels of type 1 and type 2 diabetes mellitus patients and may be beneficial in reducing high blood cholesterol and high blood lipid levels.  If warranted, we may develop products which address the use of SRB products as medical foods for, and to potentially make health benefit claims relating to, the effects of dietary rice bran on overall health and well-being and as it may relate to maintaining balanced sugar and lipid levels.

We have maintained relationships with several medical institutions and practicing physicians who may continue to conduct clinical trials and beta work for our products.  Some of these previous clinical trials are reviewed in an article entitled “Effects of Stabilized Rice Bran, its Soluble and Fiber Fractions on Blood Glucose Levels and Serum Lipid Parameters in Humans with Diabetes Mellitus Types I and II” published in the Journal of Nutritional Biochemistry (March 2002, 175-187).  The trial produced positive results by showing that the levels of blood lipids and glycosylated hemoglobin were reduced.  Subsequently, three domestic and six international patents were issued to us on the strength of this clinical trial.

In December 2007, we formed Rice Science, LLC (Rice Science), a Delaware limited liability company, with Herbal Science Singapore Pte. Ltd. (Herbal Science) to develop nutraceutical extracts and pharmaceutical chemistries from our SRB.  Herbal Science utilized sophisticated methodologies in the identification and isolation of specific biologically active compounds that have been tested for effectiveness against specific disease conditions.  In March 2011, our partnership with Herbal Science ended with us acquiring the membership interest formerly owned by Herbal Science, leaving Rice Science as our wholly owned subsidiary.  We are hopeful that the research performed by Herbal Science will result in biologically active SRB extracts for use in the nutraceutical and functional food industry.

10

In 2008, Rice Science conducted research regarding the development of extracts from SRB that would be effective in addressing inflammation and pain. A number of SRB extracts have been tested with two identified as having significant in vitro activities. A blend of these two extracts was created to produce a third extract that exhibits a high level of in vitro inhibition of Cox 1, Cox 2 and Lox 5 enzymes (Journal of Medicinal Food (2009) 12, 615-623).  This extract was used in a pharmacokinetic study to determine uptake kinetics of key bioactives into human serum.  Results indicated that the bioactive compounds were rapidly assimilated.  The next step would be to conduct a human clinical trial if funds were available.  A number of active compounds were identified and modeled.

Late in 2007, the Cancer Biomarkers Group in the Department of Cancer Studies and Molecular Medicine, University of Leicester in Leicester, UK published a research paper evaluating the effect of our SRB in ApcMin mice (British Journal of Cancer (2007) 96, 248-254).  The mice were genetically modified to serve as models for mammary, prostate and intestinal carcinogenesis.  They reported that consumption of SRB (30% in the diet) reduced the numbers of intestinal adenomas in these mice by 51% compared to the same mice on a control diet.

Intellectual Property

From 2011 to March 2013, we engaged in a joint research project with DSM Innovation Center, a subsidiary of Royal DSM N.V., to develop methods for extracting and concentrating high quality vegetable protein from rice bran.  Combined spending on research and development related to that project totaled $3.0 million.  In March 2013, we announced the development of an improved fiber protein product and a separate water soluble rice bran protein product which have been commercialized under the ProRyza mark.  We will continue to support internal as well as external R&D efforts that improve on existing technologies or lead to the development of new technologies relating to rice bran processing and applications.

We hold eight U.S. patents relating to the production or use of rice bran and rice bran derivatives.  In addition to the issued U.S. patents, we have been issued fourteen additional foreign patents covering the subject areas.  We intend to apply for additional patents in the future as new products, treatments and uses are developed.

Our bio-refining and related stabilization activities are an adaptation and refinement of standard food processing technology applied to rice bran.  We have chosen to treat certain of our methods and processes as a trade secret and not to pursue process or process equipment patents on the original processes.  However, as we develop improvements we intend to periodically review whether we should seek patent protection for them.  We believe that certain unique products, and their biological effects, resulting from our SRB may be patentable in the future.  We also hold a number of U.S. registered trademarks and trade names and have applied for additional marks.

Government Regulations

In both our United States and foreign markets, we are affected by extensive laws, governmental regulations, administrative determinations, court decisions and similar constraints.  Such laws, regulations and other constraints exist at the federal, state or local levels in the United States, and at all levels of government in foreign jurisdictions, including regulations pertaining to the formulation, manufacturing, packaging, labeling, distribution, sale and storage of our products.  In addition, we are subject to regulations regarding product claims and advertising.

USA Segment

The formulation, manufacturing, packaging, labeling, advertising, distribution and sale of our products are subject to regulation by one or more federal agencies, primarily the FDA, the FTC, and the USDA.  Our activities are also regulated by various governmental agencies for the states and localities in which our products are manufactured and sold, as well as by governmental agencies in certain countries outside the United States, such as Brazil as discussed below, in which our products are manufactured and sold.  Among other matters, regulation by the FDA and FTC is concerned with product safety and claims made with respect to a product's ability to provide health-related benefits.  Specifically, the FDA, under the Federal Food, Drug, and Cosmetic Act (FDCA), regulates the formulation, manufacturing, packaging, labeling, distribution and sale of food including dietary supplements.  The FTC regulates the advertising of these products.

Federal agencies, primarily the FDA and the FTC, have a variety of procedures and enforcement remedies available to them, including initiating investigations, issuing warning letters and cease-and-desist orders, requiring corrective labeling or advertising, requiring consumer redress such as requiring that a company offer to repurchase products previously sold, seeking injunctive relief or product seizures, imposing civil penalties or commencing criminal prosecution.  In addition, certain state agencies have similar authority.  These federal and state agencies have in the past used these remedies in regulating participants in the food and dietary supplement industries, including the imposition of civil penalties.

11

The Dietary Supplement Health and Education Act (DSHEA) was enacted in 1994, amending the FDCA.  DSHEA establishes a statutory class of "dietary supplements," which includes vitamins, minerals, herbs or other botanicals, amino acids and other dietary ingredients for human use to supplement the diet.  Dietary ingredients marketed in the United States before October 15, 1994, may be marketed without the submission of a "new dietary ingredient" (NDI) premarket notification to the FDA.  Dietary ingredients marketed in the United States after October 15, 1994, may require the submission, at least 75 days before marketing, of an NDI notification containing information establishing that the ingredient is reasonably expected to be safe for its intended use.  Among other things, DSHEA prevents the FDA from regulating dietary ingredients in dietary supplements as "food additives" and allows the use of statements of nutritional support on product labels and in labeling.  The FDA has issued final regulations under DSHEA and has issued draft guidance on NDI notification requirements.  Further guidance and regulations are expected.

The FDA issued a final rule on current good manufacturing practices (CGMPs) for dietary supplements on June 25, 2007.  The CGMPs cover manufacturers and holders of finished dietary supplement products, including dietary supplement products manufactured outside the United States that are imported for sale into the United States.  Among other things, the new CGMPs require identity testing on all incoming dietary ingredients; call for a "scientifically valid system" for ensuring finished products meet all specifications; include requirements related to process controls, including statistical sampling of finished batches for testing and requirements for written procedures; and require extensive recordkeeping.

On December 22, 2006, Congress passed the Dietary Supplement and Nonprescription Drug Consumer Protection Act, which went into effect on December 22, 2007.  The law requires, among other things, that companies that manufacture or distribute nonprescription drugs or dietary supplements report serious adverse events allegedly associated with their products to the FDA and institute recordkeeping requirements for all adverse events.

The FDA Food Safety Modernization Act (FSMA), enacted January 4, 2011, amended the FDCA to significantly enhance FDA's authority over various aspects of food regulation including dietary supplements.  The FSMA granted FDA mandatory recall authority when the FDA determines there is a reasonable probability that a food is adulterated or misbranded and that the use of, or exposure to, the food will cause serious adverse health consequences or death to humans or animals.  One of the FSMA's more significant changes is the requirement of hazard analysis and risk-based preventive controls (HARBPC) for all food facilities required to register with the FDA, except dietary supplement facilities in compliance with both CGMPs and the serious adverse event reporting requirements.  Failure to comply with both CGMPs and the serious adverse event reporting requirements may subject dietary supplement manufacturers to the HARBPC requirements.

As required by Section 113(b) of the FSMA, the FDA published in July 2011 a draft guidance document clarifying when the FDA believes a dietary ingredient is an NDI, when a manufacturer or distributor must submit an NDI premarket notification to the FDA, the evidence necessary to document the safety of an NDI and the methods for establishing the identity of an NDI.  The draft guidance, if implemented as proposed, could have a material impact on our operations.  It is possible that the FDA will begin taking enforcement actions consistent with the interpretations in the draft guidance before issuing a final version.

The new FSMA requirements, as well as the FDA enforcement of the NDI guidance as written, could require us to incur additional expenses, which could be significant, and negatively impact our business in several ways, including, but not limited to, the injunction of manufacturing of any dietary ingredients or dietary supplements until the FDA determines that such ingredients or products are in compliance and the potential imposition of fees for reinspection of noncompliant facilities.  Each of these events could increase our liability and could have a material adverse effect on our financial condition, results of operations or cash flows.

In general, before any substance can be added to food, its safety must be assessed in a stringent approval process.  When an additive is proposed for use in a meat, its safety, technical function, and conditions of use must also be evaluated by the USDA.  Because the USDA retains jurisdiction over meat products and food ingredients intended for use in meats, the use of our SRB and DRB meat enhancers is regulated by this agency.  Both SRB and DRB have USDA approval for use in meat products.

Brazil Segment

The Brazilian Ministry of Agriculture, Livestock and Food Supply (MAPA), one of the Federal administrative bodies, is the primary regulator of agricultural products in Brazil, which main activity is the management of public policies to encourage agriculture, the promotion of agribusiness and the regulation and standardization of services related to the sector.  Amongst other activities, MAPA is responsible for the regulation and control of pharmaceuticals, biological products and medicated feed additives for animal use.  MAPA is organized into departments, each one responsible for different sectors of the nation’s agribusiness.  Amongst these departments, the Secretary of Agricultural Defense (SDA) is responsible for implementing the actions of the State which aims at the prevention, control and eradication of animal diseases and plant pests.  The SDA also contributes to the formulation of the national agricultural policy by planning, regulating, coordinating and supervising the activities of agricultural defense throughout the country, being responsible for the coordination of the Department of Inspection of Livestock Products.  In order to fulfill its mission, the SDA provides central management and regulatory bodies as well as projections within the states for the implementation and coordination of those activities for which it is responsible.  Furthermore, ANVISA, a regulatory agency which operates in all those sectors related to products and services that affect the health of the population, and with expertise that covers both sanitary regulation and the economic regulation of the market, contributes to the enforcement of most of the regulations regarding processed food products, including vegetable oils, fats and vegetable creams.

12

In addition to the foregoing, our operations will be subject to federal, foreign, state, and local government laws and regulations, including those relating to zoning, workplace safety, and accommodations for the disabled, and our relationship with our employees are subject to regulations, including minimum wage requirements, anti-discrimination laws, overtime and working conditions, and citizenship requirements.

Sales and Marketing

Both of our USA and Brazil segments use internal sales staff, outside independent sales representatives and third party distributors to market our portfolio of products domestically and internationally. In 2013, three customers accounted for 38% of USA segment revenues. In our Brazil segment, three customers accounted for 35% of segment revenues. In 2012, three customers accounted for approximately 40% of USA segment revenues and in our Brazil segment, three customers accounted for approximately 38% of segment revenues. We continue to diversify our customer base in an attempt to mitigate the concentration of customers. We have recently signed multi-year contracts with two customers who we expect to grow significantly. In addition, we have recently initiated new ingredient sales to large international consumer products companies that we expect to further diversify our portfolio risk.

Our Strategic Alliances

In 2011, we entered into an agreement with DSM Innovation Center, a subsidiary of Royal DSM N.V., with the goal of developing technology to extract and concentrate protein from rice bran. In March 2013, the agreement was mutually terminated under terms whereby we each received (i) the right to separately develop, modify and improve the jointly developed technology owned by the partner and (ii) a nonexclusive, royalty free, perpetual license to that technology.

RBT PRO, LLC (RBT PRO) was a wholly owned subsidiary whose only asset was the license acquired in March 2013. In April 2013, we entered into a series of agreements with Wilmar.  In connection therewith, we sold a 50% membership interest in RBT PRO to Wilmar for $1.2 million. RBT PRO granted an exclusive, royalty free, perpetual sublicense of the license to Wilmar for use throughout China and to us for use worldwide, excluding China.

We also entered into a cross license agreement with Wilmar.  We agreed to license to Wilmar all of our intellectual property with respect to processing of rice bran and its derivatives for use in China.  Wilmar agreed to license to us (i) its intellectual property with respect to processing of rice bran, and its derivatives, based on the intellectual property licensed to Wilmar under the license for use worldwide, excluding China and (ii) its other intellectual property with respect to processing of rice bran, and its derivatives, for use worldwide, excluding certain countries in Asia.

Under the agreements, we obtained the right to purchase 45% of the capital stock of any entity Wilmar establishes to develop new products relating to rice bran or its derivative, as defined in the agreement, using the intellectual property licensed to Wilmar.  If we decline the right to purchase 45% of the capital stock of any such new entity, we have the option to purchase 25% of the entity within two years of the entity’s formation.  The exercise price for this option will equal 25% of the capital investment made in the entity, plus interest, as defined in the agreement.

Our Competition

There are a number of companies that have invested significant resources to develop stabilizing technologies for stabilizing and further processing rice bran and who market rice bran products with varying levels of stabilization into multiple markets around the world.  We believe that we have best of breed technologies for stabilizing rice bran and, as such, have developed significant brand recognition in the animal feed and human food ingredient sectors both domestically and internationally.  Together with our decades of application technology know-how and patented processing methods, we believe that we have a first-to-market advantage over the competition with respect to our SRB products

We are aware of several new producers of rice based animal nutrition and food ingredient products in the US, Europe and Asia.  We believe that our major nutritional supplement competitors include producers of isolated soy protein, wheat bran and oat bran, particularly in the functional food ingredients market segment.

13

We compete with other companies that offer products incorporating SRB as well as companies that offer other food ingredients and nutritional supplements.  We also face competition from companies providing products that use oat bran and wheat bran as nutritional supplements as well as for health and beauty aids.  Many consumers may consider such products to be a replacement for the products we manufacture and distribute.

Beginning in 2008 with the purchase of Irgovel, we also began to compete in the world's edible oil market.  Our competition for exports of rice bran oil resides primarily in Southeast Asia.  Our branded rice bran oil “Carreteiro” competes with other bottled oils such as soy, palm, canola, peanut and others in the Brazilian market.  In addition, our exported rice bran oil competes with those same oils from other grains, seeds and plants in markets around the world.

Our Employees

As of December 31, 2013, the USA and Corporate segments had 40 employees located in the U.S.  The Brazil segment had 220 employees.  Our employee count may change periodically.  From year to year we experience normal variable labor fluctuation at our production facilities.  We believe relations with our employees are good.  None of our U.S. based employees are covered by collective bargaining agreements.  All of the employees at our Irgovel facility in Brazil are represented by a labor union and are covered by a collective bargaining agreement.

Securities and Exchange Commission Reports

We maintain an Internet website at the following address: www.ricebrantech.com.  We make available on or through our Internet website certain reports and amendments to those reports that we file with the Securities and Exchange Commission (SEC) in accordance with the Securities Exchange Act of 1934 (Exchange Act).  These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K.  We make this information available on our website free of charge as soon as reasonably practicable after we electronically file the information with, or furnish it to, the SEC.  The contents of our website are not incorporated by reference in this report on Form 10-K and shall not be deemed “filed” under the Securities Exchange Act of 1934.  The public may also read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  You may obtain information about the Public Reference Room by contacting the SEC at 1-800-SEC-0330.  Reports filed with the SEC are also made available on the SEC website (www.sec.gov).

ITEM 1A. RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties, including those described below, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock.  Investors or potential investors in our stock should carefully consider the risks described below.

RISK FACTORS

Risks Relating to Our Business

We have not yet achieved positive cash flows.

Our net cash used in operating activities was $5.2 million in 2013 and $4.8 million in 2012.  We may not be able to achieve revenue growth, profitability or positive cash flow, on either a quarterly or annual basis, and that profitability, if achieved, may not be sustained.  If we are unable to achieve or sustain profitability, we may not be financially viable in the future and may have to curtail, suspend, or cease operations, restructure existing operations to attempt to ensure future viability, or pursue other alternatives such as re-filing for bankruptcy, pursuing dissolution and liquidation, seeking to merge with another company, selling all or substantially all of our assets or raising additional capital through equity or debt financings.  Because of our recurring losses and negative cash flows from operations, the audit report of our independent registered public accountants on our consolidated financial statements contains an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

We have generated significant losses since our inception in 2000, and losses in the future could cause the trading price of our stock to decline or have a material adverse effect on our financial condition, our ability to pay our debts as they become due and on our cash flows.

Since we began operations in February 2000, we have incurred an accumulated deficit in excess of $200 million.  We may not be able to achieve or maintain profitable operations if achieved.  If our losses continue, our liquidity may continue to be severely impaired, our stock price may fall and our shareholders may lose all or a significant portion of their investment.  If we are not able to attain profitability in the near future our financial condition could deteriorate further which could have a material adverse impact on our business and prospects and result in a significant or complete loss of your investment.  Further, we may be unable to pay our debt obligations as they become due, which include obligations to secured creditors.

14

We may need to raise additional funds through debt or equity financings in the future to achieve our business objectives and to satisfy our cash obligations, which would dilute the ownership of our existing shareholders and possibly subordinate certain of their rights to the rights of new investors.

We may need to raise additional funds through debt or equity financings in order to complete our ultimate business objectives.  We also may choose to raise additional funds in debt or equity financings if they are available to us on reasonable terms to increase our working capital, strengthen our financial position or to make acquisitions.  Our board of directors (the Board) has the ability, without seeking shareholder approval, to issue convertible debt and additional shares of common stock or preferred stock that is convertible into common stock for such consideration as the board of directors may consider sufficient, which may be at a discount to the market price.  Any sales of additional equity or convertible debt securities would result in dilution of the equity interests of our existing shareholders, which could be substantial.  Additionally, if we issue shares of preferred stock or convertible debt to raise funds, the holders of those securities might be entitled to various preferential rights over the holders of our common stock, including repayment of their investment, and possibly additional amounts, before any payments could be made to holders of our common stock in connection with an acquisition of us.  Such preferred shares, if authorized, might be granted rights and preferences that would be senior to, or otherwise adversely affect, the rights and the value of our common stock.  Also, new investors may require that we and certain of our shareholders enter into voting arrangements that give them additional voting control or representation on our board of directors.

Any material weaknesses in our internal control over financing reporting in the future could adversely affect investor confidence, impair the value of our common stock and increase our cost of raising capital.

Any future failure to remedy deficiencies in our internal control over financial reporting that may be discovered or our failure to implement new or improved controls, or difficulties encountered in the implementation of such controls, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements.  Any such failure could, in turn, affect the future ability of our management to certify that internal control over our financial reporting is effective.  Inferior internal control over financial reporting could also subject us to the scrutiny of the SEC and other regulatory bodies which could cause investors to lose confidence in our reported financial information and could subject us to civil or criminal penalties or shareholder litigation, which could have an adverse effect on our results of operations and the trading price of our common stock.

In addition, if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in our financial statements and harm our share price.  Furthermore, deficiencies could result in future non-compliance with Section 404 of the Sarbanes-Oxley Act of 2002.  Such non-compliance could subject us to a variety of administrative sanctions, including review by the SEC or other regulatory authorities.

There are significant market risks associated with our business.

We have formulated our business plan and strategies based on certain assumptions regarding the size of the rice bran market, our anticipated share of this market, the estimated price and acceptance of our products and other factors.  These assumptions are based on our best estimates, however our assessments may not prove to be correct.  Any future success may depend upon factors including changes in the dietary supplement industry, governmental regulation, increased levels of competition, including the entry of additional competitors and increased success by existing competitors, changes in general economic conditions, increases in operating costs including costs of rice bran, production, supplies, personnel, equipment, and reduced margins caused by competitive pressures.  Many of these factors are beyond our control.

We may face difficulties integrating businesses we acquire.

As part of our strategy, we expect to review opportunities to buy other businesses or technologies, such as the acquisition of H&N that was completed on January 2, 2014, that would complement our current products, expand the breadth of our markets or enhance technical capabilities, or that may otherwise offer growth opportunities.  The H&N acquisition and other acquisitions involve numerous risks, including:

• problems combining the purchased operations, technologies or products;

• unanticipated costs;

• diversion of management’s attention from our core business;

• adverse effects on existing business relationships with suppliers and customers;

• risks associated with entering markets in which we have no or limited prior experience;

15

• potential loss of key employees of purchased organizations;

• problems combining the purchased operations, technologies or products;

• unanticipated costs;

• diversion of management’s attention from our core business;

• adverse effects on existing business relationships with suppliers and customers;

• risks associated with entering markets in which we have no or limited prior experience; and

• potential loss of key employees of purchased organizations.

We have significant foreign operations and there are inherent risks in operating overseas.

An important component of our business strategy is to build rice bran stabilization and rice bran oil facilities in foreign countries and to market and sell our products internationally.  For example, we have an operation in Brazil which manufactures rice bran oil.  There are risks in operating facilities in foreign countries because, among other reasons, we may be unable to attract sufficient qualified personnel, intellectual property rights may not be enforced as we expect, and legal rights may not be available as contemplated.  Should any of these risks occur, our ability to expand our foreign operations may be materially limited and we may be unable to maximize the output from these facilities and our financial results may decrease from our anticipated levels.  The inherent risks of international operations could materially adversely affect our business, financial condition and results of operations.  The types of risks faced in connection with international operations and sales include, among others:

• cultural differences in the conduct of business;

• fluctuations in foreign exchange rates;

• greater difficulty in accounts receivable collection and longer collection periods;

• challenges in obtaining and maintaining financing;

• impact of recessions in economies outside of the United States;

• reduced or obtainable protection for intellectual property rights in some countries;

• unexpected changes in regulatory requirements;

• tariffs and other trade barriers;

• political conditions in each country;

• management and operation of an enterprise spread over various countries;

• the burden and administrative costs of complying with a wide variety of foreign laws; and

• currency restrictions.

Brazilian economic, political and other conditions, and Brazilian government policies or actions in response to these conditions, may negatively affect our business and results of operations.

The Brazilian economy has historically been characterized by interventions by the Brazilian government and unstable economic cycles.  The Brazilian government has often changed monetary, taxation, credit, tariff and other policies to influence the course of Brazil’s economy.  For example, the government’s actions to control inflation have at times involved setting wage and price controls, blocking access to bank accounts, imposing exchange controls and limiting imports into Brazil.  We have no control over, and cannot predict, what policies or actions the Brazilian government may take in the future.

Our Brazilian segment’s business, results of operations, financial condition and prospects may be adversely affected by, among others, the following factors:

• exchange rate movements;

• exchange control policies;

• expansion or contraction of the Brazilian economy, as measured by rates of growth in GDP;

• inflation;

• tax policies;

• other economic political, diplomatic and social developments in or affecting Brazil;

• interest rates;

• energy shortages;

• liquidity of domestic capital and lending markets;

• changes in environmental regulation; and

• social and political instability.

Our interests in Nutra SA are subject to certain drag along rights and we may receive little or no proceeds from such sale.

The Investors in Nutra SA (Investors) have the right to force the sale of all Nutra SA assets after the earlier of January 1, 2015, or upon the failure to process a certain level of rice bran in the second and third quarters of 2014.  Should the Investors desire to sell 100% of Nutra SA to a third party, we are obligated to cooperate in the negotiation and sale of Nutra SA in accordance with the terms of such sale as agreed to thereby.  In the event of a sale, the Investors are entitled to a preferential return of any proceeds received from the sale of Nutra SA in an amount equal to 2.3 times such investors’ unreturned capital which will be distributed first to such investors until the preferential return has been paid in full.  The unreturned capital balance for the Investors as of March 25, 2014, is $14.3 million.  Because of these drag along rights, we will only receive a certain portion of the proceeds if the sales proceeds are greater than the amount of such preferential return, and it is possible that we will receive no or little proceeds from the sale of Nutra SA.

16

The capital expansion project and temporary shut down at our Irgovel facility could adversely affect our business, financial condition or results of operations.

Irgovel is currently in the final stages and near completion of a capital expansion project involving installation of new equipment and improvements to existing infrastructure.  As a result of the project, the Irgovel facility was shut down approximately ten weeks in the first quarter of 2014, while certain new equipment was brought on line.  Where possible, we stockpiled certain inventory for sale during the period the plant was shut down.  However, this inventory was not adequate to timely fulfill all outstanding orders during this period.  Facility shut down and subsequent restart expenses may adversely affect our operating results in the period when these events occur.

The installation of new equipment at the Irgovel facility involves significant uncertainties.  For example, our new equipment may not perform as expected or may differ from design and/or specifications.  If we are required to redesign or modify the equipment to ensure that it performs as expected, we may need to further shut down the facility until the equipment has been redesigned or modified as necessary.  Any of the foregoing risks associated with the capital expansion project could lead to lower revenues or higher costs or otherwise have a negative impact on our future results of operations and financial condition.

Irgovel has certain financial and operating performance obligations which if not met may lead to us losing management control over Irgovel.

Under the limited liability company agreement for Nutra SA, as amended, Irgovel must satisfy certain financial performance requirements in order for us to maintain control over Irgovel.  These financial performance requirements include Irgovel’s satisfaction of revenue, earnings and net debt targets described in the membership interest purchase agreement, as amended.  In addition, Irgovel must meet certain minimum processing targets beginning in the second quarter of 2014 and achieve EBITDA of at least $4.0 million beginning in 2014.  If Irgovel fails to meet these financial requirements, we could lose management control over Irgovel’s operations, and management control would transfer to the other investors in Nutra SA.  Any such change in management control would cause us to no longer consolidate Irgovel’s financial results with our financial results.  Instead, we would be required to account for Irgovel as an equity investment on our balance sheets which may negatively impact our share price.

Our business could be affected adversely by labor disputes, strikes or work stoppages in Brazil.

All of our employees at our Irgovel facility in Brazil are represented by a labor union and are covered by a collective bargaining agreement.  As a result, we are subject to the risk of labor disputes, strikes, work stoppages and other labor-relations matters.  Our collective bargaining agreement in Brazil has a one-year term and requires that we provide wage adjustments each year.  We may be unable to negotiate new collective bargaining agreements on similar or more favorable terms and may experience work stoppages or other labor problems in the future.  We could experience a disruption of our operations or higher ongoing labor costs, which could have a material adverse effect on our operating results and financial condition, potentially resulting in cancelled orders by customers, unanticipated inventory accumulation or shortages and reduced revenues and net income.

Fluctuations in foreign currency exchange could adversely affect our financial results.

We earn revenues, pay expenses, own assets and incur liabilities in countries using currencies other than the U.S. Dollar, including primarily the Brazilian Real.  Currently, a significant portion of our revenues and expenses occur in our Brazilian subsidiary, Irgovel.  Because our consolidated financial statements are presented in U.S. Dollars, we must translate revenues, income and expenses, as well as assets and liabilities, into U.S. Dollars at exchange rates in effect historically, during or at the end of each reporting period.  Therefore, increases or decreases in the value of the U.S. Dollar against the Brazilian Real and any other currency which affects a material amount of our operations, will affect our revenues, cost of sales, gross profit (loss), operating expenses, or other income and expenses and the value of balance sheet items denominated in foreign currencies.  These fluctuations may have a material adverse effect on our financial results.  Disruptions in financial markets may result in significant changes in foreign exchange rates in relatively short periods of time which further increases the risk of an adverse currency effect.  Since we plan to expand our international operations, we will likely increase our exposure to foreign currency risks.  We do not hedge our currency risk, and do not expect to, as currency hedges are expensive and do not necessarily reduce the risk of currency fluctuations over longer periods of time.

17

We depend on a limited number of customers.

In the USA segment, in 2013, three customers accounted for 38% of segment revenues and the top ten customers accounted for 61% of segment revenues.  As of December 31, 2013, the top ten customers in the USA segment accounted for 59% of segment accounts receivable.

In the Brazil segment, three customers accounted for 35% of 2013 segment revenues and our top ten customers accounted for 53% of 2013 segment revenues.  As of December 31, 2013, the top ten customers accounted for 68% of Brazil segment accounts receivable.

We are dependent upon the continued growth, viability and financial stability of our customers. We expect to continue to depend upon a relatively small number of customers for a significant percentage of our revenues.  Consolidation among our customers may further reduce the number of customers that generate a significant percentage of our revenues and expose us to increased risks relating to dependence on a small number of customers.  A significant reduction in sales to any of our customers or a customer could have a material adverse effect on our results of operations.

The inability of our significant customers to meet their obligations to us may adversely affect our financial results.

We currently depend on a limited number of customers.  This results in a concentration of credit risk with respect to our outstanding accounts receivable.  We consider the financial strength of the customer, the remoteness of the possible risk that a default event will occur, the potential benefits to our future growth and development, possible actions to reduce the likelihood of a default event and the benefits from the transaction before entering into a large credit limit for a customer.  Although we analyze these factors, the ultimate collection of the obligation from the customer may not occur.  Although we continue to expand our customer base in an attempt to mitigate the concentration of credit risk, the writing off of an accounts receivable balance could have an adverse effect on our results of operations.  Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash and cash equivalents and trade receivables.  Historically, we have not experienced any loss of our cash and cash equivalents, but we have experienced losses to our trade receivables.

We may encounter difficulties in maintaining relationships with distributors and customers while enforcing our credit policies.

We define credit risk as the risk of loss from obligors or counterparty default.  Our credit risks arise from both distributors and consumers.  Many of these risks and uncertainties are beyond our control.  Our ability to forecast future trends and spot shifts in consumer patterns or behavior even before they occur are vital for success in today’s economy.  In managing risk, our objective is to protect our profitability, but also to protect, to the extent we can, our ongoing relationships with our distributors and customers.  However, as part of our credit risk policies, we occasionally must, among other things, cancel, reduce credit limits and place cash only requirements for certain questionable accounts.  These credit risk policies may negatively impact our relationships with our distributors and customers, which could adversely affect our results of operations.

We rely upon a limited number of product offerings.

The majority of the products that we have sold through December 31, 2013, have been based on SRB produced at our US facilities and RBO extracted at Irgovel.  A decline in the market demand for our SRB and RBO products or the products of other companies utilizing our SRB and RBO products, would have a significant adverse impact on us.

Our ability to generate sales is dependent upon our ability to continue our ongoing marketing efforts to raise awareness of our products and benefits of rice bran products generally.

We are dependent on our ability to market products to animal food producers, food manufacturers, mass merchandisers and health food retailers, and to other companies for use in their products.  We must increase the level of awareness of dietary supplements in general and our products in particular.  We will be required to devote substantial management and financial resources to these marketing and advertising efforts and such efforts may not be successful.

Our ability to adapt to sudden increases in demand of our product is limited by an adequate supply of raw rice bran and our ability to find additional facilities for production.

Many of our current products depend on our proprietary technology using raw rice bran, which is a by-product from milling paddy rice to white rice.  Our ability to manufacture SRB is currently limited to the production capability of our equipment located at our two suppliers’ rice mills in California and our own plant located adjacent to our supplier in Mermentau, Louisiana.  At the facilities and our value-added product plants in Dillon, Montana and our facility in Pelotas, Brazil, we currently are capable of producing enough finished products to meet current demand.  If demand for our products were to increase dramatically in the future, we would need additional production capacity which may take time and may expose us to additional long term operating costs.

We may not be able to continue to secure adequate sources of raw rice bran to meet our future demand.  Since rice bran has a limited shelf life, the supply of rice bran is affected by the amount of rice planted and harvested each year.  If economic or weather conditions adversely affect the amount of rice planted or harvested, the cost of rice bran products that we use may increase.  We are not always able to immediately pass cost increases to our customers and any increase in the cost of SRB products could have an adverse effect on our results of operations.

18

We face competition from other companies that produce bran, grains and other alternative ingredients with similar benefits as our rice brans.

Competition in our targeted industries, including nutraceuticals, functional food ingredients, rice bran oils, animal feed supplements and companion pet food ingredients is vigorous, with a large number of businesses engaged in the various industries.  Many of our competitors have established reputations for successfully developing and marketing their products, including products that incorporate bran from other cereal grains and other alternative ingredients that are widely recognized as providing similar benefits as rice bran.  In addition, many of our competitors have greater financial, managerial, and technical resources than we do.  If we are not successful in competing in these markets, we may not be able to attain our business objectives.

We must comply with our contractual obligations.

We have numerous ongoing contractual obligations under various purchase, sale, supply, production and other agreements which govern our business operations.  We also have contractual obligations which require ongoing payments such as various debt agreements and lease obligations and the agreement of Irgovel to pay tax obligations to the Brazilian government.  While we seek to comply at all times with these obligations, we may not be able to comply with the terms of all contracts during all periods of time, especially if there are significant changes in market conditions or our financial condition.  If we are unable to comply with our material contractual obligations, there likely would be a material adverse effect on our financial condition and results of operations.

We are affected by extensive laws, governmental regulations, administrative determinations, court decisions and similar constraints both domestically and abroad and our failure to comply with these laws, regulations and constraints could lead to the imposition of significant penalties or claims, which could harm our financial condition and operating results.

In both the U.S. and foreign markets, the formulation, manufacturing, packaging, labeling, distribution, sale and storage of our products are affected by extensive laws, governmental regulations, administrative determinations, court decisions and similar constraints.  Such laws, regulations and other constraints may exist at the federal, state or local levels in the United States and at all levels of government in foreign jurisdictions.  The dietary supplement and cosmetic industries are subject to considerable government regulation, both as to efficacy as well as labeling and advertising.  We are subject to regulation by one or more federal agencies including the U.S. Food and Drug Administration (FDA), the U.S. Federal Trade Commission (FTC), and the U.S. Department of Agriculture (USDA), state and local authorities and foreign governmental agencies including the Brazilian National Health Surveillance Agency.  In addition, the adoption of new regulations or changes in the interpretations of existing regulations may result in significant compliance costs or discontinuation of product sales and may negatively impact the marketing of our products, resulting in significant loss of sales revenues.  Our failure to comply with these current and new regulations could lead to the imposition of significant penalties or claims, limit the production or marketing of any non-compliant products or advertising and could negatively impact our business.

We may be subject to product liability claims and product recalls.

We sell food and nutritional products for animal and human consumption, which involves risks such as product contamination or spoilage, product tampering and other adulteration of food products.  We may be subject to liability if the consumption of any of our products causes injury, illness or death.  We maintain a product liability policy for $5.0 million per year in the aggregate.  In addition, we may voluntarily recall products in the event of contamination or damage.  A significant product liability judgment or a widespread product recall may cause a material adverse effect on our financial condition.  Even if a product liability claim is unsuccessful, there may be negative publicity surrounding any assertion that our products caused illness or injury which could adversely affect our reputation with existing and potential customers.

Many of the risks of our business have only limited insurance coverage and many of our business risks are uninsurable.

Our business operations are subject to potential product liability, environmental, fire, employee, manufacturing, shipping and other risks.  Although we have insurance to cover some of these risks, the amount of this insurance is limited and includes numerous exceptions and limitations to coverage.  In the event we were to suffer a significant uninsured claim, our financial condition would be materially and adversely affected.

19

Our success depends in part on our ability to obtain, enforce and protect our patents, licenses and other intellectual property rights for our products and technology.

Our success is dependent upon our ability to protect and enforce the patents, trade secrets and trademarks that we have and to develop and obtain new patents and trademarks for future processes, machinery, compounds and products that we develop.  The process of seeking patent protection may be long and expensive, and patents might not be issued or not be broad enough in scope.  We may not be able to protect our technology adequately, and our competition may be able to develop similar technology that does not infringe or encroach upon any of our rights.

There currently are no claims or lawsuits pending or threatened against us regarding possible infringement claims, but infringement claims by third parties, or claims for indemnification resulting from infringement claims, could be asserted in the future or that such assertions, if proven to be accurate, could have a material adverse effect on our business, financial condition and results of operations.  In the future, litigation may be necessary to enforce our patents, to protect our trade secrets or know-how or to defend against claimed infringement of the rights of others and to determine the scope and validity of the proprietary rights of others.  Any litigation could result in substantial cost and diversion of our efforts and other resources, which could have a material adverse effect on our financial condition and results of operations.  Adverse determinations in any litigation could result in the loss of our proprietary rights, subjecting us to significant liabilities to third parties, require us to seek licenses from third parties or prevent us from manufacturing or selling our systems, any of which could have a material adverse effect on our financial condition and results of operations.  A license under a third party’s intellectual property rights might not be available to us on reasonable terms, if at all.

We are dependent on key employees.

Our success depends upon the efforts of our top management team and certain other key employees, including the efforts of John Short (chief executive officer), Dale Belt (chief financial officer), Mark McKnight (senior vice president of contract manufacturing), and Robert Smith, PhD (senior vice president of sales and business development).  Although we have written employment agreements with our CEO and CFO, such individuals could die, become disabled, or resign.  In addition, our success is dependent upon our ability to attract and retain key management persons for positions relating to the marketing and distribution of our products.  We may not be able to recruit and employ such executives at times and on terms acceptable to us.  Also, volatility, lack of positive performance in our stock price and changes in our overall compensation program, including our equity incentive program, may adversely affect our ability to retain such key employees.

Compliance with corporate governance and public disclosure regulations may result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, and new regulations issued by the SEC, such as Dodd-Frank, are creating uncertainty for companies.  In order to comply with these laws, we may need to invest substantial resources to comply with evolving standards, and this investment would result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Our officers and directors have limited liability and have indemnification rights.

Our articles of incorporation and bylaws provide that we may indemnify our officers and directors against losses sustained or liabilities incurred which arise from any transaction in that officer’s or director’s respective managerial capacity, unless that officer or director violates a duty of loyalty, did not act in good faith, engaged in intentional misconduct or knowingly violated the law, approved an improper dividend, or derived an improper benefit from the transaction.

Risks Relating to Our Stock

Our stock price is volatile.

The market price of our common stock has fluctuated significantly in the past and may continue to fluctuate significantly in the future.  The market price of the common stock may continue to fluctuate in response to a number of factors, including:

• announcements of new products or product enhancements by us or our competitors;

• fluctuations in our quarterly or annual operating results;

• developments in our relationships with customers and suppliers;

• our ability to obtain financing;

20

• the loss of services of one or more of our executive officers or other key employees;

• announcements of technological innovations or new systems or enhancements used by us or our competitors;

• developments in our or our competitors’ intellectual property rights;

• adverse effects to our operating results due to impairment of goodwill;

• failure to meet the expectation of securities analysts’ or the public;

• general economic and market conditions;

• our ability to expand our operations, domestically and internationally;

• the amount and timing of expenditures related to any expansion;

• litigation involving us, our industry or both;

• actual or anticipated changes in expectations by investors or analysts regarding our performance; and

• price and volume fluctuations in the overall stock market from time to time.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company.  Our stock price is volatile and we have been the target of shareholder litigation.  Any shareholder litigation brought against us in the future could result in substantial costs and divert our management’s attention and resources from our business.

We have significant “equity overhang” which could adversely affect the market price of our common stock and impair our ability to raise additional capital through the sale of equity securities.

As of March 25, 2014, we had 3,031,860 shares of common stock outstanding and 4,146,454 shares of our common stock were issuable upon exercise of our outstanding options and warrants.  In addition we may issue common stock in connection with the following:

· In November 2013, certain warrant holders agreed to exchange warrants to purchase 496,060 shares of common stock for 1,554,734 shares of our common stock upon shareholders vote to approve an increase in our authorized shares of common stock;

· In November 2013, an investor purchased an additional $0.5 million of notes, each of which bears 5% interest with a July 2016 maturity date, and will receive 134,250 shares of our common stock upon shareholders vote to approve an increase in our authorized shares of common stock;

· In January 2014, in connection with our acquisition of H&N we entered into promissory notes for $3.3 million which must be settled through the issuance of shares of our common stock in certain circumstances.

· In March 2014, we issued convertible notes in the principal amount of $4.9 million which automatically convert into 933,076 shares of common stock upon shareholders voting to approve an increase in our authorized shares of common stock.

The possibility that substantial amounts of our common stock may be sold by investors or the perception that such sales could occur, often called “equity overhang,” could adversely affect the market price of our common stock and could impair our ability to raise additional capital through the sale of equity securities in the future.  The issuance of the additional shares upon an increase in our authorized shares of common stock would significantly increase the amount of our common stock outstanding and the amount of the equity overhang.

The impacts of antidiluton provisions in certain warrants may dilute current shareholders.

As of March 25, 2014, we had 591,248 shares of common stock issuable upon exercise of outstanding warrants that contain antidilution provisions, with a current exercise price of $5.24.  These antidilution provisions cause the exercise prices and conversion prices of the warrants to decrease automatically if we issue shares of our common stock or securities convertible into shares of our common stock at prices below the exercise price of these warrants.  These adjustments automatically cause the number of shares issuable upon exercise of these warrants to proportionately increase.  Any such adjustment could materially dilute the holders of our common stock.

If we do not obtain shareholder approval to increase the number of our authorized shares of common stock in an amount sufficient to issue shares to certain warrant holders who agreed to exchange their warrants for shares of common stock and to a note holder in consideration for investing in additional notes issued by us, then an event of default would be triggered under those agreements.

On November 13, 2013, certain warrant holders agreed to exchange warrants to purchase 496,060 shares of common stock for the future issuance of 1,554,734 shares of our common stock.  In addition, an investor purchased an additional $0.5 million of notes, each of which bears 5% interest with a July 31, 2016 maturity date, in exchange for the future issuance of 134,250 shares of our common stock.  Pursuant to the above agreements, the shares issuable to the former warrant holders and note holder will not be issued until our shareholders approve an increase in our authorized shares of common stock which increase we have agreed to request by July 1, 2014.  Additionally, the holders of our subordinated convertible notes agreed to amend their notes to reduce the note interest rate to 5% from 10% and to remove the conversion feature and anti-dilutive protections under the note.  If the shareholders do not approve to increase the authorized number of shares of common stock by July 1, 2014, the interest rate on the notes will increase to 10% until such time as sufficient shares of our common stock are authorized to issue such shares.  In the event the issuance of shares under the Exchange constitutes an issuance of 20% or more of our outstanding shares of common stock at a price that is less than the market value of our common stock, we will also be required to obtain shareholder approval of the Exchange in accordance with the current NASDAQ Capital Market listing requirements before issuing all shares under the Exchange. We may, however, issue shares under the Exchange on a pro rata basis up to 19.9% of our outstanding shares prior to seeking shareholder approval on such issuances.

21

The authorization and issuance of preferred stock may have an adverse effect on the rights of holders of our common stock.

Our board of directors, without further action or vote by holders of our common stock, has the right to establish the terms, preference, rights and restrictions and issue shares of preferred stock.  The terms of any series of preferred stock could be issued with terms, rights, preferences and restrictions that could adversely affect the rights of holders of our common stock and thereby reduce the value of our common stock.  The designation and issuance of preferred stock favorable to current management or shareholders could make it more difficult to gain control of our board of directors or remove our current management and may be used to defeat hostile bids for control which might provide shareholders with premiums for their shares.  We have designated and issued five series of preferred stock, no shares of which remain outstanding.  We may issue additional series of preferred stock in the future.

If we fail to comply with the continuing listing standards of The NASDAQ Capital Market, our securities could be delisted.

Our common stock is listed on the NASDAQ Capital Market under the symbol “RIBT”, and we also have outstanding warrants listed on the NASDAQ Capital Market under the symbol “RIBTW”.  For our common stock and warrants to continue to be listed on the NASDAQ Capital Market, we must meet the current NASDAQ Capital Market continued listing requirements.  If we were unable to meet these requirements, including, but not limited to, requirements to obtain shareholder approval of a transaction other than a public offering involving the sale or issuance equal to 20% or more of our common stock at a price that is less than the market value of our common stock, our common stock and warrants could be delisted from the NASDAQ Capital Market.  If our securities were to be delisted from the NASDAQ Capital Market, our securities could continue to trade on the over-the-counter bulletin board following any delisting from the NASDAQ Capital Market, or on the Pink Sheets, as the case may be.  Any such delisting of our securities could have an adverse effect on the market price of, and the efficiency of the trading market for our securities, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and less coverage of us by securities analysts, if any.  Also, if in the future we were to determine that we need to seek additional equity capital, it could have an adverse effect on our ability to raise capital in the public or private equity markets.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

We maintain various facilities that are used for manufacturing, warehousing, research and development, distribution, and administrative functions.  These facilities consist of both owned and leased properties.  The following table summarizes the properties used to conduct our operations as of March 25, 2014:

22

Primary Segment	Location	Status	Primary Use
USA	West Sacramento, California	Leased	Warehousing, and administrative
USA	Mermentau, Louisiana	Owned	Manufacturing
USA	Lake Charles, Louisiana	Building – owned	Manufacturing (idled since May 2009)
		Land - leased
USA	Dillon, Montana	Owned	Manufacturing
USA	Irving, Texas	Leased	Manufacturing, warehousing and distribution
Brazil	Pelotas, Brazil	Owned	Manufacturing, R&D and administrative
Corporate	Scottsdale, Arizona	Leased	Administrative – corporate offices

Our corporate headquarters is located at 6720 N. Scottsdale Road, Suite 390, Scottsdale, AZ  85253.  We lease approximately 9,000 square feet of corporate office space in Scottsdale.

We believe that all facilities are in good operating condition, the machinery and equipment are well-maintained, the facilities are suitable for their intended purposes and they have capacities adequate for current operations.

The properties are covered by insurance but insurance for the properties located in Louisiana is subject to high deductibles and limitations on damages due to tropical storms.

ITEM 3. LEGAL PROCEEDINGS

Various lawsuits, claims, proceedings and investigations are pending involving us as described below in this section.  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.  In addition to the matters described herein, 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, which in our opinion will not have a material adverse effect on our financial condition, cash flows or results of operations.

Irgovel Purchase

On August 28, 2008, former Irgovel stockholder David Resyng filed an indemnification suit against Irgovel, Osmar Brito and the remaining former Irgovel stockholders (Sellers), requesting:  (i) the freezing of the escrow account maintained in connection with the transfer of Irgovel’s corporate control to us and the presentation of all documentation related to the transaction, and (ii) damages in the amount of the difference between (a) the sum received by David Resyng in connection with the judicial settlement agreement executed in the action for the partial dissolution of the limited liability company filed by David Resyng against Irgovel and the Sellers and (b) the amount received by the Sellers in connection with the sale of Irgovel’s corporate control to us, in addition to moral damages as determined in the court’s discretion.  The amount of damage claimed by Mr. Resyng is approximately $3 million.

We believe that the filing of the above lawsuit is a fundamental default of the obligations undertaken by the Sellers under the Quotas Purchase Agreement for the transfer of Irgovel’s corporate control, executed by and among the Sellers and us on January 31, 2008 (Purchase Agreement).  Consequently, we believe that the responsibility for any indemnity, costs and expenses incurred or that may come to be incurred by Irgovel and/or us in connection with the above lawsuit is the sole responsibility of the Sellers.

On February 6, 2009, the Sellers filed a collection lawsuit against us seeking payment of the second installment of the purchase price under the Purchase Agreement, which the Sellers allege is approximately $1.0 million.  We have withheld payment of the second installment pending resolution of the Resyng lawsuit noted above.  Our parent company has not been served with any formal notices in regard to this matter.  To date, only Irgovel has received formal legal notice.  In addition, the Purchase Agreement requires that all disputes between us and the Sellers be adjudicated through arbitration.  As part of the Purchase Agreement, $2.0 million was deposited into an escrow account to cover contingencies with the net remaining funds payable to the Sellers upon resolution of all contingencies.  We believe any payout due to the lawsuit will be made out of the escrow account.  As of December 31 2013 and, 2012, the balance in the escrow account was $1.9 million and is included in restricted cash in our balance sheets.  There is an escrow liability related to the lawsuit in accrued expenses on our balance sheets as of December, 2013 and, 2012, totaling $1.4 million.  When the escrow account was funded, we established an accrued liability equal to the amount of the escrow for contingencies and the net balance due to the Sellers under the terms of the Purchase Agreement.  As of December 31, 2013, $0.7 million of pre-acquisition contingencies have either been paid or specifically identified and accrued, leaving a balance of $1.4 million to settle any remaining contingencies.  We believe that there is no additional material exposure as any amounts determined to be owed as a result of the above noted litigation and contingencies will be covered by the escrow account. We agreed to pay to Nutra SA ninety percent of any funds received from the escrow account in excess of the sum of (i) $1.0 million and (ii) our contributions to Nutra SA made after March 25, 2014, with no resulting change in our Nutra SA voting rights (see Note 14 to the consolidated financial statements.).

23

Diabco Life Sciences, LLC

In January 2012, we filed a complaint in the Superior Court of California, Sacramento County, seeking damages arising out of Diabco Life Sciences, LLC’s (Diabco) breach of a 2008 promissory note in the principal amount of $0.5 million.  At trial in August 2013, Diabco stipulated that total damages through July 2013, including interest and late fees, amounted to $0.9 million.  In September 2013, the court issued its tentative statement of decision indicating that judgment will be entered in our favor in the amount of $0.9 million as of July 2013, plus interest.  In January 2014, the court issued its final judgment in the amount of $1.0 million.  Diabco has filed a notice of appeal with the court challenging the final judgment.  We have no receivable from Diabco recorded in the accompanying financial statements as recovery of the judgment is not reasonably assured.

ITEM 4. MINE SAFETY DISCLOSURES

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Price Range of Common Stock

Our common stock is traded on the NASDAQ Capital Market under the symbol “RIBT.”  Our CUSIP No. is 762831-10-5.  The following table sets forth the range of high and low closing sales prices for our common stock for the periods indicated below.  The quotations below reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not represent actual transactions.  Through December 12, 2013, our common stock was quoted on the OTCQB under the symbol “RIBT.” All share and per share information in the table below reflects the one-for-200 reverse stock split which was effected on November 13, 2013.  Our shares of common stock did not trade on a post-adjusted basis until the opening of the market on November 18, 2013.

	Low		High
2013
Fourth Quarter	$	4.55	$	13.76
Third Quarter		9.60		14.00
Second Quarter		12.40		17.40
First Quarter		10.40		22.00
2012
Fourth Quarter	$	9.80	$	16.00
Third Quarter		7.80		16.60
Second Quarter		11.00		30.40
First Quarter		22.00		29.00

Holders

As of March 25, 2014, there were approximately 280 holders of record and 9,300 beneficial owners of our common stock.

Dividends

We have never declared or paid any cash dividends on our common stock.  We currently anticipate that we will retain all future earnings for the expansion and operation of our business and do not anticipate paying cash dividends in the foreseeable future.  Cash provided by operations in our Brazil segment is generally unavailable for distribution to our Corporate and USA segments pursuant to the terms of the limited liability company agreement for Nutra SA, LLC.  Pursuant to the terms of outstanding senior convertible debentures we may not pay any dividends while the debentures are outstanding.

24

Recent Sales of Unregistered Securities

During the quarter ended December 31, 2013, we issued the securities described below without registration under the Securities Act.  Unless otherwise indicated below, the securities were issued pursuant to the private placement exemption provided by Section 4(2) of the Securities Act of 1933.  All issuances below were made without any public solicitation, to a limited number of persons and were acquired for investment purposes only.

We issued options as described in the table which follows.

Date of Issuance	Recipient	Number of Underlying Shares of Common Stock		Exercise Price		Vesting Period	Expiration	In Connection With
December 11, 2013	Employee		2,500	$	6.00	Three Years	December 11, 2023	Employment

We issued the following shares of common stock under agreements with consultants and vendors as summarized in the table which follows.

Date of Issuance	Shares of Common Stock		Vesting Period
October 1, 2013		4,375	Immediate
October 10, 2013		1,250	Immediate
October 31, 2013		843	Immediate
November 7, 2013		5,000	Immediate

On November 13, 2013, certain warrant holders agreed to exchange warrants to purchase 496,060 shares of common stock for the future issuance of 1,554,734 shares of our common stock.  An investor also purchased a $200,000 note on November 13, 2013 and an additional $300,000 note on November 23, 2013, each of which bears a 5% interest with a July 31, 2016 maturity date, in exchange for the future issuance of 134,250 shares of our common stock.  Pursuant to the above agreements, the shares issuable to the former warrant holders and note holder will not be issued until after our shareholders approve an increase in our authorized shares of common stock which increase we have agreed to request by July 1, 2014.

Three convertible note holders previously elected in lieu of cash interest payments otherwise payable though June 2014 on their existing notes to receive (i) an increase in the number of shares of common stock underlying their notes (ii) a warrant to purchase shares of our common.  As a consequence, on October 31, 2013, we (i) increased the shares of common stock underlying their convertible notes by 1,100 shares and (ii) issued warrants for the purchase of 1,100 shares of common stock, at an exercise price of $16.00 per share and a May 2018 expiration.

Under a revolving credit facility with TCA Global Credit Master Fund, LP (TCA), effective May 24, 2013, as amended July 18, 2013 and October 11, 2013, we may borrow up to $8 million.  The terms of the borrowing are further described in Note 9 to the consolidated financial statements.  On October 11, 2013, we borrowed an additional $800,000 under the TCA revolving note In addition to cash expenses, we issued TCA 6,667 shares of our common stock.  We issued equity warrants to investment bankers for the purchase of 3,429 shares of common stock, exercisable at $16.00 per share, through October 11, 2018.

As a result of our public offering of securities on December 18, 2013, we adjusted the exercise price and increased the number of shares underlying certain existing warrants to purchase common stock, issued to the investors in prior equity financings pursuant to the antidilution provisions contained in the respective warrants.  The changes are described in the tables which follow.  All of the changes were to warrants held by existing warrant holders without additional consideration pursuant to the terms of the respective financings, and no commission or other remuneration was paid or given directly or indirectly to any person in connection therewith.  The changes to the existing warrants, as summarized in the table below, were exempt from registration under Section 3(a)(9) of the Securities Act of 1933.

25

		Before Event				After Event				Increase in
Triggering Events	Financing	Shares Under Warrants		Exercise Price		Shares Under Warrants		Exercise Price		Shares Under Warrants
December 18, 2013	May 7, 2009		61,667	$	14.00		164,759	$	5.24		103,092
	January 17, 2012		53,571		14.00		143,130		5.24		89,559
	July 31, 2012		92,800		16.00		283,359		5.24		190,559

Share Repurchases

We did not repurchase any of our common stock in 2013.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Consolidated Financial Statements and related notes thereto included in Item 8 of this Annual Report on Form 10-K.

This discussion and analysis may contain “forward-looking statements.”  These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements may include, without limitation, statements about our market opportunities, strategies, competition, and expected activities and expenditures and at times may be identified by the use of words such as “may,” “could,” “should,” “would,” “project,” “believe,” “anticipate,” “expect,” “plan,” “estimate,” “forecast,” “potential,” “intend,” “continue” and variations of these words or comparable words.  Forward-looking statements inherently involve risks and uncertainties.  Accordingly, actual results may differ materially from those expressed or implied by these forward-looking statements.  Factors that could cause or contribute to such differences include, but are not limited to, the risks described under “Risk Factors” in Item 1A.  We undertake no obligation to update any forward-looking statements for revisions or changes after the filing date of this Annual Report on Form 10-K.

Basis of Presentation and Going Concern

In 2013, we continued to experience losses and negative cash flows from operations which raises substantial doubt about our ability to continue as a going concern.  We believe that we now have adequate financial resources to operate our business for the next year and we will be able to obtain additional funds to operate our business, should it be necessary, however, there can be no assurances that our efforts will prove successful.  The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

We closed an underwritten public offering in December 2013 and completed a private placement offering in March 2014 which together provided us with net proceeds in excess of $12.0 million, allowing us to make additional investment in our Brazilian operations and provide cash for corporate purposes.  In January 2014, we completed the acquisition of H&N Distribution Inc., the operations of which are expected to be accretive to cash flows.  Our Brazilian subsidiary, Irgovel, shut down operations in the first quarter of 2014 to complete the final stages of a major capital expansion.  The shutdown and capital expenditures have depleted cash.  Operations at Irgovel are expected to normalize during the second quarter of 2014, such that Irgovel will then be operating at its newly increased capacity and begin generating cash from operations,

26

Segments

We have two reportable operating segments in 2013: (i) USA segment, which manufactures and distributes SRB in various granulations along with Stage II products and derivatives and (ii) Brazil segment, which extracts crude RBO and DRB from rice bran, which are then further processed into fully refined rice bran oil for sale internationally and in Brazil, compounded animal nutrition products for horses, cows, swine, sheep and poultry and a number of valuable human food and animal nutrition products derivatives and co-products. In addition we incur corporate expenses not directly attributable to operating segments, which include costs related to our corporate staff, general and administrative expenses including public company expenses, intellectual property, professional fees, and other expenses.  No corporate allocations, including interests, are made to the operating segments.

The combined operations of our USA and Brazil segments encompass our bio-refining approach to processing RRB into various high quality, value-added constituents and finished products.  Over the past decade, we have developed and optimized our proprietary bio-refining processes to support the production of healthy, natural, hypoallergenic, gluten free, and non-genetically modified ingredients and supplements for use in human meats, baked goods, cereals, coatings, health foods, nutritional supplements, nutraceuticals and high-end animal nutrition and health products.

In 2013, the USA segment produced SRB inside two supplier rice mills in California and one owned facility in Louisiana.  A facility located in Lake Charles, Louisiana has been idle since May 2009.  The USA segment also includes our Dillon, Montana Stage II facility which produces our Stage II products RiSolubles (a highly nutritious, carbohydrate and lipid rich fraction of SRB), RiFiber (a fiber rich derivative of SRB), RiBalance (a complete rice bran nutritional package derived from further processing SRB), and ProRyza, a family of protein products.  Stage II refers to the proprietary processes run at our Dillon, Montana facility and includes products produced at that facility using our patented processes.  The manufacturing facilities included in our USA segment have proprietary processing equipment and patented technology for the stabilization and further processing of rice bran into finished products.  In 2013, approximately 55% of USA segment revenue was from sales of human food products and approximately 45% was from sales of animal nutrition products.

The Brazil segment consists of the consolidated operations of Nutra SA, whose only operating subsidiary is Irgovel, located in Pelotas, Brazil.  Irgovel manufactures RBO and DRB products for both the human ingredient and animal nutrition markets in Brazil and internationally.  In refining RBO to an edible grade, several co-products are obtained.  One such product is distilled fatty acids, a valuable raw material for the detergent industry.  Irgovel recently started production of rice lecithin, which has application in human nutrition, animal nutrition and industrial applications.  DRB is compounded with a number of other ingredients to produce complex animal nutrition products which are packaged and sold under Irgovel brands in the Brazilian market, sold as a raw material for further processing into human food ingredients or sold in bulk into the animal nutrition markets in Brazil and neighboring countries.  In 2013, approximately 45% of Brazil segment product revenue was from sales of RBO products and 55% was from sales of DRB products.

Results of Operations

Consolidated net loss attributable to RiceBran Technologies shareholders for 2013 was $15.0 million, or $12.95 per share, compared to $9.5 million, or $9.29 per share in 2012.

27

Revenue and Gross Profit

Revenues (in thousands):

	2013		% of Total Revenues		2012		% of Total Revenues		Change			% Change
USA segment	$	12,023		34.3	$	12,633		33.5	$	(610	)		(4.8	)
Brazil segment		23,028		65.7		25,090		66.5		(2,062	)		(8.2	)
Total revenues	$	35,051		100.0	$	37,723		100.0	$	(2,672	)		(7.1	)

Consolidated revenues were $35.1 million in 2013 compared to $37.7 million in 2012, a decrease of $2.7 million, or 7.1%.

USA segment revenues decreased $0.6 million, or 4.8% in 2013 compared to 2012.  Animal feed product revenues decreased $1.0 million on lower volume while human nutrition product revenues increased $0.4 million.  The decline in animal feed revenue was primarily attributable to reduced sales to two large, but low margin customers. We continue to focus on increasing the higher margin human ingredient product revenue in our mix of revenue.

Brazil segment revenues decreased $2.1 million, or 8.2% in 2013 compared to 2012.  Revenues decreased $2.4 million as a result of the 9.5% decline in the average exchange rate between these periods.  On a local currency basis, prior to translation into US dollars, Brazil segment revenues increased 1.3% year over year.  Offsetting the $2.4 million decline as a result of the decrease in the average exchange rates was the impact of a 4.6 % increase in revenue per ton.  As part of the capital expansion project, we improved our animal feed production capabilities and launched new products which were unavailable for sale in 2012.

Gross profit (in thousands):

	2013		Gross Profit %		2012		Gross Profit %		Change			Change in Gross Profit %
USA segment	$	2,945		24.5	$	3,687		29.2	$	(742	)		(4.7	)
Brazil segment		1,000		4.3		2,385		9.5		(1,385	)		(5.2	)
Total gross profit	$	3,945		11.3	$	6,072		16.1	$	(2,127	)		(4.8	)

Consolidated gross profit in 2013 decreased $2.1 million, or 4.8 percentage points, to $3.9 million in 2013, compared to $6.1 million in 2012.

The USA segment gross profit declined $0.7 million, to $2.9 million in 2013, from $3.7 million in 2012, due to the impact of higher raw bran prices in 2013 compared to 2012. Raw bran and related third party bran processing cost increases impacted margin by 5.3 percentage points.  Continuing competitive pressure for animal nutrition product revenues has limited our ability to pass along these higher costs and we decided to forego unprofitable sales to some large customers. In the human feed ingredient market, pricing is more elastic.

The Brazil segment gross profit declined $1.4 million, or 5.2 percentage points, from 9.5 to 4.3, partially due to increased raw bran prices.  While the amount of raw bran processed was 1.1% higher in 2013 than 2012, plant operational efficiency at Irgovel was affected by the capital expansion project.  Multiple plant shut downs throughout 2013 have occurred as new equipment has been installed in several areas of the plant.  Major areas affected include the animal nutrition plant, the boiler system that feeds steam to the plant, water storage and fire protection systems, power substations, raw bran receiving facilities and raw bran extruders.  The plant was shut down again in January 2014 for expansion of the rice bran oil extractor, the key functional part of the plant, as well as installation of a new desolventizing/toasting system.  Production began again in March 2014 on a limited basis and we expect production capacity to build through the second quarter of 2014 and reach or exceed 150% of raw bran processing capability in the third quarter of 2014.

28

Operating Expenses (in thousands):

	2013
	Corporate			USA		Brazil		Consolidated
Selling, general and administrative	$	5,918		$	2,006	$	4,442	$	12,366
Depreciation and amortization		24			469		756		1,249
Impairment of  property		-			300		-		300
Total operating expenses	$	5,942		$	2,775	$	5,198	$	13,915
	2012
	Corporate			USA		Brazil		Consolidated
Selling, general and administrative	$	4,768		$	2,364	$	4,496	$	11,628
Depreciation and amortization		197			1,006		859		2,062
Intersegment fees		(347	)		-		347		-
Impairment of intangibles and property		-			1,069		-		1,069
Total operating expenses	$	4,618		$	4,439	$	5,702	$	14,759
	Favorable (Unfavorable) Change
	Corporate			USA		Brazil		Consolidated
Selling, general and administrative	$	(1,150	)	$	358	$	54	$	(738	)
Depreciation and amortization		173			537		103		813
Intersegment fees		(347	)		-		347		-
Impairment of intangibles and property		-			769		-		769
Total operating expenses	$	(1,324	)	$	1,664	$	504	$	844

Consolidated operating expenses were $13.9 million in 2013, compared to $14.8 million in 2012, an improvement of $0.8 million.

Corporate segment selling, general and administrative expenses (SG&A) increased $1.2 million between years due to the $1.1 million change in bonus expenses. USA segment SG&A expenses decreased $0.4 million primarily as a result of a $0.3 million change in gain on sale of excess property.  Depreciation expense was lower in 2013 as a result of an impairment charge taken in the second quarter of 2012.

The reduction in USA segment impairment charges between periods contributed $0.8 million to the improvement in consolidated operating expenses.  The impairment charge in 2012, related to the impairment of machinery and equipment not currently in use, which was written down $1.1 million to its estimated fair value in the second quarter of 2012.  In the first quarter of 2013, we reevaluated the machinery and equipment not in use and, based on current market conditions, recorded an additional impairment of $0.3 million.  The estimate of net realizable value is subject to change.

Brazil segment SG&A expense decreased $0.1 million.  The net decrease was attributable to a $0.5 million reduction in expense from the 9.5% change in exchange rates between periods offset by a $0.4 million increase in severance costs associated with 2013 headcount reductions.

The investors in Nutra SA have agreed to waive all investor fees until further notice.  Thus there are no intersegment fees in 2013, comparable to those in 2012.

29

Other Income (Expense) (in thousands):

	2013
	Corporate			USA			Brazil			Consolidated
Interest income	$	-		$	-		$	109		$	109
Interest expense		(1,950	)		-			(1,984	)		(3,934	)
Change in fair value of derivative warrant and conversion liabilities		(1,029	)		-			-			(1,029	)
Loss on extinguishment and financing expense		(3,455	)		-			-			(3,455	)
Foreign currency exchange, net		-			-			(440	)		(440	)
Other		(41	)		-			(319	)		(360	)
Other income (expense)	$	(6,475	)	$	-		$	(2,634	)	$	(9,109	)
	2012
	Corporate			USA			Brazil			Consolidated
Interest income	$	18		$	-		$	56		$	74
Interest expense		(742	)		(17	)		(1,167	)		(1,926	)
Change in fair value of derivative warrant and conversion liabilities		5,420			-			-			5,420
Loss on extinguishment and financing expense		(7,125	)		-			-			(7,125	)
Foreign currency exchange, net		-			-			(617	)		(617	)
Other		-			-			(210	)		(210	)
Other income (expense)	$	(2,429	)	$	(17	)	$	(1,938	)	$	(4,384	)
	Favorable (Unfavorable) Change
	Corporate			USA			Brazil			Consolidated
Interest income	$	(18	)	$	-		$	53		$	35
Interest expense		(1,208	)		17			(817	)		(2,008	)
Change in fair value of derivative warrant and conversion liabilities		(6,449	)		-			-			(6,449	)
Loss on extinguishment and financing expense		3,670			-			-			3,670
Foreign currency exchange, net		-			-			177			177
Other		(41	)		-			(109	)		(150	)
Other income (expense)	$	(4,046	)	$	17		$	(696	)	$	(4,725	)

Consolidated other expense was $9.1 million in 2013, compared to other expense of $4.4 million in 2012.  The $4.7 million increase in other expense was comprised of the following:

· a $2.0 million increase in interest expense, as a result of (i) an increase in average debt and interest bearing payables outstanding in both the Corporate and Brazil segments and (ii) the increase in interest expense in the Corporate segment as a result of amortizing the debt discount on a senior debenture when the principal was paid in 2013;

· a Corporate segment $6.4 million increase in expense from the change in the fair value of derivative warrant and conversion liabilities.  Our liability warrants and conversion liabilities are valued using the lattice model each reporting period and the resulting change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current exercise price of the warrants and make certain other assumptions.  The negative impacts as a result of the changes in our stock price between periods and the unfavorable impacts of the increase in average outstanding derivative contracts contributed to the increase in expense.

These higher expenses were offset by:

· the $2.1 million reduction in Corporate segment loss on extinguishment.  In 2013, the extinguishment losses were related to (i) the modification of convertible notes and the exchange of warrants as described in Note 9 to the consolidated financial statements included herein and (ii) the conversion of $0.3 million of our senior debenture and the prepayment of $0.3 million on those debentures also described in that note.

· the $1.6 million reduction in Corporate segment financing expense.  In 2013, the loss was associated with the issuance of subordinated convertible notes and related warrants and represented the excess of the fair value of the derivative conversion and warrant liabilities, and other consideration, at issuance over the proceeds from issuance, as described in Note 9 to the consolidated financial statements;

· a $0.2 million improvement in foreign exchange, related to the Brazil segments US Dollar denominated debt, as a result of the 9.5% decline in the average exchange rate between periods.

30

Liquidity and Capital Resources

With respect to liquidity and capital resources, we manage the Brazil segment, consisting currently of our plant in Brazil, separately from our U.S. based Corporate and USA segments.  Cash on hand at our Brazil segment is generally unavailable for distribution to our Corporate and USA segments pursuant to the terms of the limited liability company agreement for Nutra SA.  Cash used in operating activities for 2013 and 2012, is presented below by segment (in thousands).

	2013
	Corporate and USA			Brazil			Consolidated
Net loss	$	(12,248	)	$	(5,392	)	$	(17,640	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		1,419			2,629			4,048
Change in fair value of derivative warrant and conversion liabilities		1,029			-			1,029
Loss on extinguishment		2,891			-			2,891
Financing expense		564			-			564
Impairment of property		300			-			300
Other adjustments, net		920			(1,157	)		(237	)
Changes in operating asset and liabilities:		1,486			2,357		$	3,843
Net cash used in operating activities	$	(3,639	)	$	(1,563	)	$	(5,202	)
	2012
	Corporate and USA			Brazil			Consolidated
Net loss	$	(7,816	)	$	(3,320	)	$	(11,136	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation and amortization		2,071			2,541			4,612
Change in fair value of derivative warrant and conversion liabilities		(5,420	)		-			(5,420	)
Financing expense		2,184			-			2,184
Loss on extinguishment		4,941			-			4,941
Impairment of property		1,069			-			1,069
Other adjustments, net		1,333			(931	)		402
Changes in operating asset and liabilities:
Pre-petition liabilities		(1,615	)		-			(1,615	)
Other changes, net		(413	)		554			141
Net cash used in operating activities	$	(3,666	)	$	(1,156	)	$	(4,822	)

Corporate and USA

On a combined basis, the Corporate and USA segments used $3.6 million of cash in operating activities in 2013 compared to $3.7 in 2012.

Cash used in investing activities in 2013 and 2012 included $0.8 million and $0.6 million of proceeds from the sale of USA segment equipment.  Proceeds from the 2013 sales were used for general corporate purposes.  In 2012, cash used in financing activities also included $0.7 million from collections of USA segment notes receivable and $0.2 million of restricted cash released for the payment of pre-petition liabilities.

In 2011, we entered into an agreement with a partner with the goal of developing technology to extract and concentrate protein from rice bran.  In March 2013, the agreement was mutually terminated under terms whereby we each received (i) the right to separately develop, modify and improve the jointly developed technology owned by the partner and (ii) we received a nonexclusive, royalty free, perpetual license to that technology (License).  We agreed to pay the partner $1.2 million as a lump sum in April 2013.  In April 2013, we sold a 50% interest in our subsidiary holding the License and paid this $1.2 million obligation to the partner with the proceeds of the sale.

Cash provided by financing activities in 2013 includes $7.6 million in net proceeds from a public secondary offering of common stock and warrants.  In March of 2014, we completed a private placement of convertible notes and warrants for approximately $4.3 million of net proceeds.

31

In 2013, the holders of subordinated convertible notes in the principal amount of $6.0 million agreed to amend their notes to reduce the interest rate to 5% from 10%, change the maturity of the notes to July 2016 (if there was a different maturity date) and to remove the conversion feature and antidilution protections.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the notes will increase to 10%.  Consequently, as of December 31, 2013, we had no convertible debt outstanding.

Cash provided by financing activities in 2013 and 2012 included $0.6 million and $3.6 million of proceeds, net of costs, which we received from the issuance of subordinated convertible debt, the senior convertible debenture and related warrants (see Note 9 to the consolidated financial statements).  The net proceeds were used to fund the working capital needs of the Corporate and USA segments.

Borrowings under a revolving credit facility with TCA Global Credit Master Fund, LP (TCA), effective May 2013, as amended July 2013 and October 2013, are evidenced by a revolving note which accrues interest at the rate of 12% per year.   In addition, we owe TCA various other fees under the agreement that are expected to average approximately 7% of average borrowings per year.

USA segment accounts receivable collections, exclusive of our newly acquired subsidiary H&N in January 2014, are required to be directed to a TCA owned account.  Collections TCA receives, in excess of amounts due for interest and fees and mandatory minimum cumulative repayments are treated as additional repayments and reduce amounts outstanding.  There are minimum repayments beginning in January 2014 and the note must be repaid in full by October 2014.  Minimum cumulative repayments are $1.1 million as of March 2014, $1.8 million as of June 2014 and $2.7 million as of September 2014.  Until cumulative repayments equal the required minimum, TCA may withhold 20% of collections.  We may request, on a weekly basis, that TCA advance us any amounts collected in excess of amounts (i) due for interest and fees and (ii) required to meet the minimum cumulative repayments.  During 2013, amounts outstanding under the agreement averaged $1.0 million.

During 2013, we borrowed $2.8 million under the TCA revolving note in three tranches.  The proceeds net of cash expenses totaled $2.5 million and were used to (i) pay down $0.4 million of debt, (ii) fund $0.9 million of investments in Nutra SA and (iii) for general corporate purposes.  We do not expect to be able to borrow additional funds under this facility in the near term.

We made final distributions to unsecured creditors in the first quarter of 2012 which reduced pre-petition liabilities by $1.6 million.  Payments of pre-petition liabilities reduced cash flows from operations in the periods paid, but were in payment of obligations incurred prior to our November 2009 filing of the voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.  The funds for the 2012 distributions, included in cash used in operations, were derived from receipts on notes receivable, and proceeds from issuances of the subordinated convertible notes, senior convertible debentures and related warrants in January 2012.

Brazil

Irgovel is currently in the process of restarting the plant and debugging equipment as part of the final stages of a capital expansion project involving installation of new equipment and improvements to existing infrastructure noted above.  As a result of the project, the Irgovel facility was shut down approximately ten weeks in the first quarter of 2014, while certain new equipment was brought on line.  Where possible, we stockpiled certain inventory for sale during the period the plant was shut down.  However, this inventory was not adequate to timely fulfill all outstanding orders during this period.  Facility shut down and subsequent restart expenses are expected to adversely affect our operating results in the first half of 2014.  As of December 31, 2013, additional capital expenditures expected on the project totaled R$1.1 million ($0.5 million at the December 31, 2013 exchange rate) and was included in accounts payable.

The Brazil segment used $1.6 million in operating cash in 2013, compared to using $1.2 million of operating cash in 2012.  The reduction in use of cash as a result of increased payables did not compensate for the increase in net loss.  Irgovel negotiated extended payment terms with certain vendors during the second quarter of 2013 and extended payables to conserve cash prior to and during the shut-down.

The minority investors in Nutra SA invested $1.2 million in Nutra SA in 2013.  In 2013, we transferred $4.1 million in cash to Nutra SA.  In exchange, (i) our ownership percentage in Nutra SA increased to 54.1% as of December 31, 2013 from 50.9% as of December 31, 2012, and (ii) title was returned to us for certain equipment contributed to Nutra SA in December 2012 with a historical cost of $0.2 million.  In the period from January 1, 2014 to March 25, 2014, we transferred an additional $1.9 million in cash to Nutra SA.  With this additional capital, we believe Irgovel has the necessary funds to complete the capital expansion project and meet its future working capital requirements.

32

Off-Balance Sheet Arrangements

We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing and liquidity support or market risk or credit support risk to us.

Critical Accounting Policies

Principles of Consolidation – The consolidated financial statements include the accounts of RiceBran Technologies and all subsidiaries in which we have a controlling interest.  All significant inter-company accounts and transactions are eliminated in consolidation.  Noncontrolling interests in our subsidiaries are recorded net of tax as net earnings (loss) attributable to noncontrolling interests.

Accounts Receivable and Allowance for Doubtful Accounts – Accounts receivable represent amounts receivable on trade accounts.  The allowance for doubtful accounts is based on our assessment of the collectability of customer accounts and the aging of accounts receivable.  We analyze the aging of customer accounts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts.  From period to period, differences in judgments or estimates utilized may result in material differences in the amount and timing of the provision for doubtful accounts.  We periodically evaluate our credit policy to ensure that the customers are worthy of terms and support our business plans.

Inventories - Inventories are stated at the lower of cost or market, with cost determined by the first-in, first-out method.  In the USA segment, we employ a full absorption procedure using standard cost techniques.  The standards are customarily reviewed and adjusted annually so that they are materially consistent with actual purchase and production costs.  In the Brazil segment we use actual average purchase and production costs.  Provisions for potentially obsolete or slow moving inventory are made based upon our analysis of inventory levels, historical obsolescence and future sales forecasts.

Long-Lived Assets, Intangible Assets and Goodwill – Long-lived assets, consisting primarily of property, intangible assets, and goodwill, comprise a significant portion of our total assets.  Property is stated at cost less accumulated depreciation.  Depreciation is computed on the straight-line basis over the estimated useful lives.  Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized.  Gains or losses on the sale of property and equipment are reflected in the statements of operations.  Intangible assets are stated at cost less accumulated amortization.

We test goodwill and other indefinite-lived intangible assets for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value.  Our annual qualitative or quantitative assessments involve determining an estimate of the fair value of our reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill and other indefinite-lived intangible assets exists.  A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test.  The first step of a quantitative goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired, and, thus, the second step of the quantitative impairment test is unnecessary.  If the carrying amount of a reporting unit exceeds its fair value, the second step of the quantitative goodwill impairment test is performed to measure the amount of impairment loss, if any.  Fair values are derived based on an evaluation of past and expected future performance of our reporting units.

In assessing the recoverability of goodwill, we make estimates and assumptions about sales, operating margin, terminal growth rates and discount rates based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data.  While our annual impairment testing as of December 31, 2013, supported the carrying amount of goodwill, we may be required to reevaluate the carrying amount in future periods, thus utilizing different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an impairment has occurred.

We review our long-lived assets, which include intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss is recognized when the undiscounted future cash flows estimated to be generated by the asset to be held and used are not sufficient to recover the unamortized balance of the asset.  An impairment loss is recognized based on the difference between the carrying values and estimated fair value.  The estimated fair value is determined based on either the discounted future cash flows or other appropriate fair value methods with the amount of any such deficiency charged to operations in the current year.  Estimates of future cash flows are based on many factors, including current operating results, expected market trends and competitive influences.  We also evaluate the amortization periods assigned to its intangible assets to determine whether events or changes in circumstances warrant revised estimates of useful lives. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value, less estimated costs to sell.

33

Revenue Recognition – We recognize revenue for product sales when title and risk of loss pass to our customers, generally upon shipment for USA segment customers and Brazil segment international customers and upon customer receipt for Brazil segment domestic customers.  Each transaction is evaluated to determine if all of the following four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the selling price is fixed and determinable; and (iv) collectability is reasonably assured.  If any of the above criteria cannot be satisfied then such a transaction is not recorded as revenue, or is recorded as deferred revenue and recognized only when the sales cycle is complete and payment is either received or becomes reasonably assured.  Changes in judgments and estimates regarding the application of the above mentioned four criteria might result in a change in the timing or amount of revenue recognized by such transactions.

We make provisions for estimated returns, discounts and price adjustments when they are reasonably estimable.  Revenues on the statements of operations are net of provisions for estimated returns, routine sales discounts, volume allowances and adjustments.  Revenues on the statements of operations are also net of taxes collected from customers and remitted to governmental authorities.

Amounts billed to a customer in a sale transaction related to shipping costs are reported as revenues and the related costs incurred for shipping are included in cost of goods sold.

Derivative Conversion Liabilities – We had certain convertible debt outstanding that contained antidilution clauses.  Under these clauses, we were required to lower the conversion price on the convertible debt based on certain issuances of our common stock, awards of options to employees, additional issuance of warrants and/or other convertible instruments below certain conversion prices.  We accounted for the conversion liabilities associated with these antidilution clauses as liability instruments, separate from the host debt.  The conversion liabilities were classified as debt on our consolidated balance sheets.  These conversion liabilities were valued using the lattice model each reporting period and the resultant change in fair value was recorded in the statements of operations in other income (expense).

Derivative Warrant Liabilities –We have certain warrant agreements in effect that contain antidilution clauses.  Under these clauses, we may be required to lower the exercise price on these warrants and issue additional warrants based on future issuances of our common stock and awards of options to employees, additional issuance of warrants and/or other convertible instruments below certain exercise prices.  We account for the warrants with these antidilution clauses as liability instruments.  These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations in other income (expense).

Share-Based Compensation – Share-based compensation expense for employees is calculated at the grant date using the Black-Scholes-Merton valuation model based on awards ultimately expected to vest, reduced for estimated forfeitures, and expensed on a straight-line basis over the service period of the grant.  Forfeitures are estimated at the time of grant based on our historical forfeiture experience and are revised in subsequent periods if actual forfeitures differ from those estimates.  The Black-Scholes-Merton option pricing model requires us to estimate key assumptions such as expected life, volatility, risk-free interest rates and dividend yield to determine the fair value of share-based awards, based on both historical information and management’s judgment regarding market factors and trends.  We treat options granted to employees of foreign subsidiaries as equity options.  We will use alternative valuation models if grants have characteristics that cannot be reasonably estimated using the Black-Scholes-Merton model.

We account for share-based compensation awards granted to non-employees and consultants by determining the fair value of the awards granted at either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured.  Generally we value options granted to non-employees and consultants using the Black-Scholes-Merton valuation model.  If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of (i) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.  The expense associated with stock awards issued to consultants or other third parties are recognized over the term of service.  In the event services are terminated early or we require no specific future performance, the entire amount is expensed.  The value is re-measured each reporting period over the requisite service period.

Income Taxes – We account for income taxes by recording a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carryforwards.  Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for financial reporting and tax purposes during the year.

34

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards.  A valuation allowance is established, when necessary, to reduce that deferred tax asset if it is more likely than not that the related tax benefits will not be realized.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Because of the uncertainty inherent in such estimates, actual results could differ from those estimates.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

35

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

RiceBran Technologies

Scottsdale, Arizona

We have audited the accompanying consolidated balance sheets of RiceBran Technologies (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive loss, changes in equity, and cash flows for the years then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2013 and 2012, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As described in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations resulting in an accumulated deficit of $219.0 million at December 31, 2013. This factor among other things, raises substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to this matter are also described in Note 1.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ BDO USA, LLP

Phoenix, Arizona

March 31, 2014

36

RiceBran Technologies

Consolidated Balance Sheets

December 31, 2013 and 2012

(in thousands, except share amounts)

	2013			2012
ASSETS
Current assets:
Cash and cash equivalents	$	5,091		$	1,040
Restricted cash		1,920			1,919
Accounts receivable, net of allowance for doubtful accounts of $501 and $518 (variable interest entity restricted $1,967 and $2,505)		2,673			3,487
Inventories		2,430			1,994
Income and operating taxes recoverable		585			1,167
Deferred tax asset		-			234
Deposits and other current assets		833			975
Total current assets		13,532			10,816
Property, net (variable interest entity restricted $4,969 and $5,757)		24,958			28,457
Goodwill		4,139			4,773
Intangible assets, net		1,417			2,575
Other long-term assets		532			385
Total assets	$	44,578		$	47,006
LIABILITIES, TEMPORARY EQUITY AND EQUITY
Current liabilities:
Accounts payable	$	4,489		$	3,021
Accrued salary, wages and benefits		2,610			1,695
Accrued expenses		3,089			2,814
Mandatorily redeemable common stock (37,260 shares outstanding)		523			-
Current maturities of debt (variable interest entity nonrecourse $6,262 and  $7,013)		8,250			8,003
Total current liabilities		18,961			15,533
Long-term debt, less current portion (variable interest entity nonrecourse $6,658 and  $7,454 )		10,919			11,581
Derivative warrant liabilities		1,685			4,520
Deferred tax liability		-			1,674
Total liabilities		31,565			33,308
Commitments and contingencies
Temporary Equity - Redeemable noncontrolling interest in Nutra SA		7,177			9,262
Equity:
Equity attributable to RiceBran Technologies shareholders:
Preferred stock, 20,000,000 shares authorized and none issued		-			-
Common stock, no par value, 6,000,000 shares and 2,500,000 shares authorized, 2,832,014 and 1,038,080 shares issued and outstanding		227,513			210,396
Accumulated deficit		(219,441	)		(204,420	)
Accumulated other comprehensive loss		(2,236	)		(1,540	)
Total equity attributable to RiceBran Technologies shareholders		5,836			4,436
Total liabilities, temporary equity and equity	$	44,578		$	47,006

See Notes to Consolidated Financial Statements

37

RiceBran Technologies

Consolidated Statements of Operations

Years Ended December 31, 2013 and 2012

(in thousands, except share and per share amounts)

	2013			2012
Revenues	$	35,051		$	37,723
Cost of goods sold		31,106			31,651
Gross profit		3,945			6,072
Operating expenses:
Selling, general and administrative		13,615			13,690
Impairment of property		300			1,069
Total operating expenses		13,915			14,759
Loss from operations		(9,970	)		(8,687	)
Other income (expense):
Interest income		109			74
Interest expense		(3,934	)		(1,926	)
Change in fair value of derivative warrant and conversion liabilities		(1,029	)		5,420
Loss on extinguishment		(2,891	)		(4,941	)
Financing expense		(564	)		(2,184	)
Foreign currency exchange, net		(440	)		(617	)
Other income		13			27
Other expense		(373	)		(237	)
Total other expense		(9,109	)		(4,384	)
Loss before income taxes		(19,079	)		(13,071	)
Income tax benefit		1,439			1,935
Net loss		(17,640	)		(11,136	)
Net loss attributable to noncontrolling interest in Nutra SA		2,619			1,627
Net loss attributable to RiceBran Technologies shareholders	$	(15,021	)	$	(9,509	)
Loss per share attributable to RiceBran Technologies shareholders
Basic	$	(12.95	)	$	(9.29	)
Diluted	$	(12.95	)	$	(9.29	)
Weighted average number of shares outstanding
Basic		1,160,196			1,023,412
Diluted		1,160,196			1,023,412

See Notes to Consolidated Financial Statements

38

RiceBran Technologies

Consolidated Statements of Comprehensive Loss

Years ended December 31, 2013 and 2012

(in thousands)

	2013			2012
Net loss	$	(17,640	)	$	(11,136	)
Other comprehensive loss - foreign currency translation, net of tax		(1,362	)		(1,081	)
Comprehensive loss, net of tax		(19,002	)		(12,217	)
Comprehensive loss attributable to noncontrolling interest, net of tax		3,285			2,156
Total comprehensive loss attributable to RiceBran Technologies shareholders	$	(15,717	)	$	(10,061	)

See Notes to Consolidated Financial Statements

39

RiceBran Technologies

Consolidated Statements of Changes in Equity

Years Ended December 31, 2013 and 2012

(in thousands, except share amounts)

	Common Stock					Accumulated			Accumulated Other Comp-			Total
	Shares		Amount			Deficit			rehensive Loss			Equity
Balance, January 1, 2012		1,006,323	$	209,613		$	(194,911	)	$	(988	)	$	13,714
Share-based compensation, options		-		923			-			-			923
Warrants exercised		7,763		711			-			-			711
Common stock issued for fees and services		8,972		228			-			-			228
Common stock issued in exchange for options		15,022		10			-			-			10
Cancellation of convertible notes and warrant		-		(1,089	)		-			-			(1,089	)
Foreign currency translation		-		-			-			(552	)		(552	)
Net loss		-		-			(9,509	)		-			(9,509	)
Balance, December 31, 2012		1,038,080		210,396			(204,420	)		(1,540	)		4,436
Share-based compensation, options		-		538			-			-			538
Stock and warrant offering proceeds, net		1,714,286		7,617			-			-			7,617
Conversion of senior debenture		28,429		500			-			-			500
Common stock issued for fees and services		48,556		744			-			-			744
Warrants issued for fees and services		-		204			-			-			204
Future shares issuance in the exchange for warrants		-		7,514			-			-			7,514
Reverse split, impact of rounding		2,663		-			-			-			-
Foreign currency translation		-		-			-			(696	)		(696	)
Net loss		-		-			(15,021	)		-			(15,021	)
Balance, December 31, 2013		2,832,014	$	227,513		$	(219,441	)	$	(2,236	)	$	5,836

See Notes to Consolidated Financial Statements

40

RiceBran Technologies

Consolidated Statements of Cash Flows

Years Ended December 31, 2013 and 2012

(in thousands)

	2013			2012
Cash flow from operating activities:
Net loss	$	(17,640	)	$	(11,136	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		3,025			3,430
Amortization		1,023			1,182
Provision for doubtful accounts receivable		226			401
Common stock and share-based compensation, options		765			1,161
Impairment of property		300			1,069
Change in fair value of derivative warrant and conversion liabilities		1,029			(5,420	)
Loss on extinguishment		2,891			4,941
Financing expense		564			2,184
Deferred tax benefit		(1,248	)		(1,935	)
Other		20			775
Changes in operating assets and liabilities:
Accounts receivable		256			(462	)
Inventories		(561	)		201
Accounts payable and accrued expenses		3,383			215
Pre-petition liabilities		-			(1,615	)
Other		765			187
Net cash used in operating activities		(5,202	)		(4,822	)
Cash flows from investing activities:
Purchases of property		(3,119	)		(6,482	)
Proceeds from sales of property		829			576
Payment for license		(1,200	)		-
Receipts on notes receivable		-			700
Other		-			244
Net cash used in investing activities		(3,490	)		(4,962	)
Cash flows from financing activities:
Proceeds from issuance of convertible debt and related warrants		575			3,563
Proceeds from issuance of common stock and warrants, net of costs		7,617			-
Proceeds from obligation to issue shares		408			-
Payments of debt		(18,404	)		(12,610	)
Proceeds from issuance of debt		20,218			15,189
Proceeds from sale of membership interests in Nutra SA, net of costs		1,200			1,500
Proceeds from sale of membership interests in RBT PRO, net of costs		1,200			-
Net cash provided by financing activities		12,814			7,642
Effect of exchange rate changes on cash and cash equivalents		(71	)		(147	)
Net change in cash and cash equivalents		4,051			(2,289	)
Cash and cash equivalents, beginning of year		1,040			3,329
Cash and cash equivalents, end of year	$	5,091		$	1,040
Supplemental disclosures:
Cash paid for interest	$	2,537		$	1,651
Cash paid for income taxes		-			-

See Notes to Consolidated Financial Statements

41

RiceBran Technologies

Notes to Consolidated Financial Statements

NOTE 1. LIQUIDITY, MANAGEMENT PLANS AND GENERAL BUSINESS

Liquidity and Management’s Plans

In 2013, we continued to experience losses and negative cash flows from operations which raises substantial doubt about our ability to continue as a going concern.  We believe that we now have adequate financial resources to operate our business for the next year and we will be able to obtain additional funds to operate our business, should it be necessary, however, there can be no assurances that our efforts will prove successful.  The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

As described further in Note 10, we closed an underwritten public offering in December 2013 and completed a private placement offering in March 2014, which together provided us with net proceeds in excess of $12.0 million, allowing us to make additional investment in our Brazilian operations and provide cash for corporate purposes.  In January 2014, we completed the acquisition of H&N Distribution, Inc., the operations of which are expected to be accretive to cash flows.  Our Brazilian subsidiary, Irgovel, shut down operations in the first quarter of 2014 to complete the final stages of a major capital expansion.  The shutdown has depleted cash.  Operations at Irgovel are expected to normalize during the second quarter of 2014, such that Irgovel will then be operating at its newly increased capacity and begin generating cash from operations.

General Business

We are a human food ingredient, nutritional supplement and animal nutrition company focused on value-added processing and marketing of healthy, natural and nutrient dense products derived from raw rice bran (RRB), an underutilized by-product of the rice milling industry.  Using our bio-refining business model, we apply our proprietary and patented technologies and intellectual properties to convert RRB into numerous high value products including stabilized rice bran (SRB), rice bran oil (RBO), defatted rice bran (DRB), RiBalance (a complete rice bran nutritional package derived from further processing of SRB), RiSolubles (a highly nutritious, carbohydrate and lipid rich fraction of SRB), RiFiber (a fiber rich derivative of SRB), ProRyza rice bran protein products and a variety of other valuable derivatives extracted from these core products.  Our target markets are natural food, functional food, nutraceutical supplement and animal nutrition manufacturers, wholesalers and retailers, both domestically and internationally.

We have two reportable operating segments in 2013: (i) USA segment, which manufactures and distributes SRB in various granulations along with Stage II products and derivatives and (ii) Brazil segment, which extracts crude RBO and DRB from rice bran, which are then further processed into fully refined rice bran oil for sale internationally and in Brazil, compounded animal nutrition products for horses, cows, swine, sheep and poultry and a number of valuable human food and animal nutrition products derivatives and co-products. In addition we incur corporate and other expenses not directly attributable to operating segments, which include costs related to our corporate staff, general and administrative expenses including public company expenses, intellectual property, professional fees, and other expenses.  No Corporate allocations, including interests, are made to the operating segments.

The combined operations of our USA and Brazil segments encompass our bio-refining approach to processing RRB into various high quality, value-added constituents and finished products.  Over the past decade, we have developed and optimized our proprietary bio-refining processes to support the production of healthy, natural, hypoallergenic, gluten free, and non-genetically modified ingredients and supplements for use in human meats, baked goods, cereals, coatings, health foods, nutritional supplements, nutraceuticals and high-end animal nutrition and health products.

In 2013, the USA segment produced SRB inside two supplier rice mills in California and one owned facility in Louisiana.  .  A facility located in Lake Charles, Louisiana has been idle since May 2009.  The USA segment also includes our Dillon, Montana Stage II facility which produces our Stage II products RiSolubles (a highly nutritious, carbohydrate and lipid rich fraction of SRB), RiFiber (a fiber rich derivative of SRB), RiBalance (a complete rice bran nutritional package derived from further processing SRB), and ProRyza, a family of protein products.  Stage II refers to the proprietary processes run at our Dillon, Montana facility and includes products produced at that facility using our patented processes.  The manufacturing facilities included in our USA segment have proprietary processing equipment and patented technology for the stabilization and further processing of rice bran into finished products.  In 2013, approximately 55% of USA segment revenue was from sales of human food products and approximately 45% was from sales of animal nutrition products.

The Brazil segment consists of the consolidated operations of Nutra SA, whose only operating subsidiary is Irgovel, located in Pelotas, Brazil.  Irgovel manufactures RBO and DRB products for both the human ingredient and animal nutrition markets in Brazil and internationally.  In refining RBO to an edible grade, several co-products are obtained.  One such product is distilled fatty acids, a valuable raw material for the detergent industry.  Irgovel recently started production of rice lecithin, which has application in human nutrition, animal nutrition and industrial applications.  DRB is compounded with a number of other ingredients to produce complex animal nutrition products which are packaged and sold under Irgovel brands in the Brazilian market, sold as a raw material for further processing into human food ingredients or sold in bulk into the animal nutrition markets in Brazil and neighboring countries.  In 2013, approximately 45% of Brazil segment product revenue was from sales of RBO products and 55% was from sales of DRB products.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation – The consolidated financial statements include the accounts of RiceBran Technologies and all subsidiaries in which we have a controlling interest.  All significant inter-company accounts and transactions are eliminated in consolidation.  Noncontrolling interests in our subsidiaries are recorded net of tax as net earnings (loss) attributable to noncontrolling interests.

Foreign Currencies - The consolidated financial statements are presented in our reporting currency, U.S. Dollars.  The functional currency for Irgovel is the Brazilian Real.  The balance sheet of Irgovel is translated into U.S. Dollars using the exchange rate in effect at the balance sheet date.  Irgovel’s revenues and expenses are translated using the average exchange rates in effect during the period.  Translation differences are recorded in accumulated other comprehensive income (loss) as foreign currency translation.  Gains or losses on transactions denominated in a currency other than the subsidiaries’ functional currency which arise as a result of changes in foreign exchange rates are recorded as foreign exchange gain or loss in the statements of operations.

42

RiceBran Technologies

Notes to Consolidated Financial Statements

Cash and Cash Equivalents – We consider all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents.  As of December 31, 2013, we maintained our cash, including restricted cash, and cash equivalents, with major banks.  We maintain cash in bank accounts in amounts which at times may exceed federally insured limits.  We have not experienced any losses on such accounts.

Accounts Receivable and Allowance for Doubtful Accounts – Accounts receivable represent amounts receivable on trade accounts.  The allowance for doubtful accounts is based on our assessment of the collectability of customer accounts and the aging of accounts receivable.  We analyze the aging of customer accounts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts.  From period to period, differences in judgments or estimates utilized may result in material differences in the amount and timing of the provision for doubtful accounts.  We periodically evaluate our credit policy to ensure that the customers are worthy of terms and support our business plans.

Inventories - Inventories are stated at the lower of cost or market, with cost determined by the first-in, first-out method.  In the USA segment, we employ a full absorption procedure using standard cost techniques.  The standards are customarily reviewed and adjusted annually so that they are materially consistent with actual purchase and production costs.  In the Brazil segment we use actual average purchase and production costs.  Provisions for potentially obsolete or slow moving inventory are made based upon our analysis of inventory levels, historical obsolescence and future sales forecasts.

Long-Lived Assets, Intangible Assets and Goodwill – Long-lived assets, consisting primarily of property, intangible assets, and goodwill, comprise a significant portion of our total assets.  Property is stated at cost less accumulated depreciation.  Depreciation is computed on the straight-line basis over the estimated useful lives.  Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized.  Gains or losses on the sale of property and equipment are reflected in the statements of operations.  Intangible assets are stated at cost less accumulated amortization.

We test goodwill and other indefinite-lived intangible assets for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value.  Our annual qualitative or quantitative assessments involve determining an estimate of the fair value of our reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill and other indefinite-lived intangible assets exists.  A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test.  The first step of a quantitative goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired, and, thus, the second step of the quantitative impairment test is unnecessary.  If the carrying amount of a reporting unit exceeds its fair value, the second step of the quantitative goodwill impairment test is performed to measure the amount of impairment loss, if any.  Fair values are derived based on an evaluation of past and expected future performance of our reporting units.

In assessing the recoverability of goodwill, we make estimates and assumptions about sales, operating margin, terminal growth rates and discount rates based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data.  While our annual impairment testing as of December 31, 2013, supported the carrying amount of goodwill, we may be required to reevaluate the carrying amount in future periods, thus utilizing different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an impairment has occurred.

We review our long-lived assets, which include intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss is recognized when the undiscounted future cash flows estimated to be generated by the asset to be held and used are not sufficient to recover the unamortized balance of the asset.  An impairment loss is recognized based on the difference between the carrying values and estimated fair value.  The estimated fair value is determined based on either the discounted future cash flows or other appropriate fair value methods with the amount of any such deficiency charged to operations in the current year.  Estimates of future cash flows are based on many factors, including current operating results, expected market trends and competitive influences.  We also evaluate the amortization periods assigned to its intangible assets to determine whether events or changes in circumstances warrant revised estimates of useful lives. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value, less estimated costs to sell.

43

RiceBran Technologies

Notes to Consolidated Financial Statements

Revenue Recognition – We recognize revenue for product sales when title and risk of loss pass to our customers, generally upon shipment for USA segment customers and Brazil segment international customers and upon customer receipt for Brazil segment domestic customers.  Each transaction is evaluated to determine if all of the following four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the selling price is fixed and determinable; and (iv) collectability is reasonably assured.  If any of the above criteria cannot be satisfied then such a transaction is not recorded as revenue, or is recorded as deferred revenue and recognized only when the sales cycle is complete and payment is either received or becomes reasonably assured.  Changes in judgments and estimates regarding the application of the above mentioned four criteria might result in a change in the timing or amount of revenue recognized by such transactions.

We make provisions for estimated returns, discounts and price adjustments when they are reasonably estimable.  Revenues on the statements of operations are net of provisions for estimated returns, routine sales discounts, volume allowances and adjustments.  Revenues on the statements of operations are also net of taxes collected from customers and remitted to governmental authorities.

Amounts billed to a customer in a sale transaction related to shipping costs are reported as revenues and the related costs incurred for shipping are included in cost of goods sold.

Research and Development – Research and development expenses include internal and external costs.  Internal costs include salaries and employment related expenses.  External expenses consist of costs associated with product development.  All such costs are charged to expense in the period they are incurred.

Derivative Conversion Liabilities – We had certain convertible debt outstanding that contained antidilution clauses.  Under these clauses, we were required to lower the conversion price on the convertible debt based on certain issuances of our common stock, awards of options to employees, additional issuance of warrants and/or other convertible instruments below certain conversion prices.  We accounted for the conversion liabilities associated with these antidilution clauses as liability instruments, separate from the host debt.  The conversion liabilities were classified as debt on our consolidated balance sheets.  These conversion liabilities were valued using the lattice model each reporting period and the resultant change in fair value was recorded in the statements of operations in other income (expense).

Derivative Warrant Liabilities –We have certain warrant agreements in effect that contain antidilution clauses.  Under these clauses, we may be required to lower the exercise price on these warrants and issue additional warrants based on future issuances of our common stock and awards of options to employees, additional issuance of warrants and/or other convertible instruments below certain exercise prices.  We account for the warrants with these antidilution clauses as liability instruments.  These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations in other income (expense).

Share-Based Compensation – Share-based compensation expense for employees is calculated at the grant date using the Black-Scholes-Merton valuation model based on awards ultimately expected to vest, reduced for estimated forfeitures, and expensed on a straight-line basis over the service period of the grant.  Forfeitures are estimated at the time of grant based on our historical forfeiture experience and are revised in subsequent periods if actual forfeitures differ from those estimates.  The Black-Scholes-Merton option pricing model requires us to estimate key assumptions such as expected life, volatility, risk-free interest rates and dividend yield to determine the fair value of share-based awards, based on both historical information and management’s judgment regarding market factors and trends.  We treat options granted to employees of foreign subsidiaries as equity options.  We will use alternative valuation models if grants have characteristics that cannot be reasonably estimated using the Black-Scholes-Merton model.

We account for share-based compensation awards granted to non-employees and consultants by determining the fair value of the awards granted at either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured.  Generally we value options granted to non-employees and consultants using the Black-Scholes-Merton valuation model.  If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of (i) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.  The expense associated with stock awards issued to consultants or other third parties are recognized over the term of service.  In the event services are terminated early or we require no specific future performance, the entire amount is expensed.  The value is re-measured each reporting period over the requisite service period.

Income Taxes – We account for income taxes by recording a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carryforwards.  Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for financial reporting and tax purposes during the year.

44

RiceBran Technologies

Notes to Consolidated Financial Statements

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards.  A valuation allowance is established, when necessary, to reduce that deferred tax asset if it is more likely than not that the related tax benefits will not be realized.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Because of the uncertainty inherent in such estimates, actual results could differ from those estimates.

Reclassifications – Certain reclassifications have been made to amounts reported for the prior year to achieve consistent presentation with the current year.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are applicable to us which could potentially have a material impact on our financial statements.

NOTE 3. LOSS PER SHARE (EPS)

Basic EPS is computed by dividing net income (loss) attributable to RiceBran Technologies shareholders by the weighted average number of common shares outstanding during all periods presented.  Shares underlying options, warrants and convertible debt are excluded from the basic EPS calculation but are considered in calculating diluted EPS.

Diluted EPS is computed by dividing the net income (loss) attributable to RiceBran Technologies shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding if the impact of assumed exercises and conversions is dilutive.  The dilutive effect of outstanding options and warrants is calculated using the treasury stock method.  The dilutive effect of outstanding convertible debt is calculated using the if-converted method.

Below are reconciliations of the numerators and denominators in the EPS computations.

	2013			2012
NUMERATOR (in thousands):
Basic and diluted - net loss attributable to RiceBran Technologies shareholders	$	(15,021	)	$	(9,509	)
DENOMINATOR:
Basic EPS - weighted average number of shares outstanding		1,160,196			1,023,412
Effect of dilutive securities outstanding		-			-
Diluted EPS - weighted average number of shares outstanding		1,160,196			1,023,412
Number of shares of common stock which could be purchased with weighted average outstanding securities not included in diluted EPS because effect would be antidilutive-Stock options (average exercise price of $26.90 and $48.00 )		179,493			191,187
Warrants (average exercise price of $17.71 and $62.00)		809,311			736,753
Convertible notes (average conversion price of $14.00 and $16.90)		414,683			334,709

The impacts of potentially dilutive securities outstanding at December 31, 2013 and 2012, were not included in the calculation of diluted EPS in 2013 and 2012 because to do so would be antidilutive.  Those securities listed in the table above which were antidilutive in 2013 and 2012, which remain outstanding, could potentially dilute EPS in the future.

45

RiceBran Technologies

Notes to Consolidated Financial Statements

NOTE 4. REDEEMABLE NONCONTROLLING INTEREST IN NUTRA SA

We hold a variable interest which relates to our equity interest in Nutra SA, LLC (Nutra SA).  We are the primary beneficiary of Nutra SA, and as such, Nutra SA’s assets, liabilities and results of operations are included in our consolidated financial statements.  The other equity holders’ interests are reflected in net loss attributable to noncontrolling interest in Nutra SA, in the consolidated statements of operations, and redeemable noncontrolling interest in Nutra SA, in the consolidated balance sheets.  Our variable interest in Nutra SA is our Brazil segment.  A summary of the carrying amounts of Nutra SA balances included in our consolidated balance sheets follows (in thousands).

	December 31,
	2013		2012
Cash and cash equivalents	$	1,686	$	562
Other current assets (restricted $1,967 and $2,505)		4,546		5,675
Property, net (restricted $4,969 and  $5,757)		17,672		19,690
Goodwill and intangibles, net		4,812		6,215
Other noncurrent assets		27		54
Total assets	$	28,743	$	32,196
Current liabilities	$	6,514	$	5,141
Current portion of long-term debt (nonrecourse)		6,262		7,013
Long-term debt, less current portion (nonrecourse)		6,658		7,454
Other noncurrent liabilities		-		1,871
Total liabilities	$	19,434	$	21,479

Nutra SA’s debt is secured by its accounts receivable and property.  Our parent company and our non-Brazilian subsidiaries do not guarantee any of Nutra SA’s debt.

A summary of changes in redeemable noncontrolling interest in Nutra SA follows (in thousands):

	2013			2012
Redeemable noncontrolling interest in Nutra SA, beginning of period	$	9,262		$	9,918
Investors' interest in net loss of Nutra SA		(2,619	)		(1,627	)
Investors' interest in accumulated other comprehensive income of Nutra SA		(666	)		(529	)
Investors' purchase of additional units		1,200			1,500
Redeemable noncontrolling interest in Nutra SA, end of period	$	7,177		$	9,262

In December 2010, we entered into a membership interest purchase agreement (MIPA) with AF Bran Holdings-NL LLC and AF Bran Holdings LLC (Investors).  The Investors’ interest averaged 49.0% in 2013 and 2012.  As of December 31, 2013, the Investors interest was 45.9%.  Following the closing of the underwritten public offering in December 2013 and completion of the private placement offering in March 2014, we invested an additional $4.9 million in Nutra SA.  As of March 25, 2014, we own 56.7% of Nutra SA with the remaining 43.3% held by the Investors.  The Investors’ share of Nutra SA’s net income (loss) increases (decreases) redeemable noncontrolling interest.  We are restricted from competing with Nutra SA and Irgovel in Brazil as further described in the MIPA.

Redeemable noncontrolling interest in Nutra SA is recorded in temporary equity, above the equity section and after liabilities on our consolidated balance sheets, because the Investors have the drag along rights which provide the Investors the ability to force a sale of Nutra SA assets in the future.  We have assessed the likelihood of the Investors exercising these rights as less than probable at December 31, 2013.  We will continue to evaluate the probability of the Investors exercising their Drag Along Rights each reporting period.  We will begin to accrete the redeemable noncontrolling interest up to fair value if and when it is probable the Investors will exercise these rights.

46

RiceBran Technologies

Notes to Consolidated Financial Statements

Under the limited liability company agreement for Nutra SA (LLC agreement), as amended, any units held by the Investors beginning January 1, 2014, accrue a yield at 4% (the Yield).  Commencing with the first quarter of 2014, Nutra SA must make distributions to the Investors quarterly in the amount equal to the previously accrued and unpaid Yield plus any additional distributions owed to the Investors, to the extent there is distributable cash, as defined in the LLC agreement.

Following the payment of the Yield, Nutra SA must distribute all distributable cash (as defined in the LLC Agreement) to the members on March 31 of each year as follows: (i) first, to the Investors in an amount equal to 2.3 times the Investors’ capital contributions, less the aggregate amount of distributions paid to the Investors, (ii) second, to us in an amount equal to twice the capital contributions made by us, less the aggregate amount of distributions paid to us; and (iii) third, to us and the Investors in proportion to our respective membership interests.

In 2013, we transferred $3.3 million in cash to Nutra SA for additional units.  In 2013, we also transferred $0.8 million in cash to Nutra SA and in exchange, title was returned to us for certain equipment contributed to Nutra SA in December 2012 with an historical cost of $0.2 million.

Under the LLC agreement, the business of Nutra SA is to be conducted by the manager, currently our CEO, subject to the oversight of the management committee.  The management committee is comprised of three of our representatives and two Investor representatives.  Upon an event of default or a qualifying event, we will no longer control the management committee and the management committee will include three Investor representatives and two of our representatives.  In addition, following an event of default or a qualifying event, a majority of the members of the management committee may replace the manager of Nutra SA.

As of December 31, 2013, there have been no events of default.  Events of default, as defined in the MIPA and the October 2013 amendment of investment agreements, are:

· A Nutra SA business plan deviation, defined as the occurrence in 2014 of a 20% unfavorable variation in two out of three of the following: (i) revenue, (ii) earnings before interest, taxes, depreciation and amortization (EBITDA) or (iii) debt,

· A Nutra SA EBITDA default, which is defined as the failure to achieve 85% of planned EBITDA for three consecutive quarters,

· A material problem, which is defined as a material problem in a facility (unrelated to changes in law, weather, etc.) likely to cause a Nutra SA business plan deviation or Nutra SA EBITDA default, which results in damages not at least 80% covered by insurance proceeds,

· Failure of Irgovel to meet minimum quarterly processing targets beginning in the second quarter of 2014, or

· Failure of Irgovel to achieve EBITDA of at least $4.0 million in any year after 2014.

As of December 31, 2013, there have been no qualifying events.  The LLC agreement defines a qualifying event as any event prior to September 16, 2014, which results, or will result, in (i) a person or group of persons exercising the right to appoint members to our board of directors holding one third or more of the votes of all board members, (ii) the sale, exchange, pledge or use as guarantee of one half or more of our ownership interest in Nutra SA to a third party or (iii) the bankruptcy of RiceBran Technologies or Nutra SA.

The Investors have the right to force the sale of all Nutra SA assets after the earlier of January 1, 2015, or upon the failure to process a certain level of rice bran in the second and third quarters of 2014.  The right terminates upon the occurrence of certain events (a $50 million Nutra SA initial public offering or a change of control, as defined).  We may elect to exercise a right of first refusal to purchase the Investors’ interest instead of proceeding to a sale.

In evaluating whether we are the primary beneficiary of Nutra SA, we considered the matters which could be put to a vote of the members.  Until there is an event of default or a qualifying event, the Investors’ rights and abilities, individually or in the aggregate, do not allow them to substantively participate in the operations of Nutra SA.  The Investors do not currently have the ability to dissolve Nutra SA or otherwise force the sale of all its assets.  They do have such rights in the future (Drag Along Rights as described above).  We will continue to evaluate our ability to control Nutra SA each reporting period.

Cash provided by operations in our Brazil segment is generally unavailable for distribution to our Corporate and USA segments pursuant to the terms of the LLC agreement.

47

RiceBran Technologies

Notes to Consolidated Financial Statements

NOTE 5. INVENTORIES

Inventories are composed of the following (in thousands):

	As of December 31,
	2013		2012
Finished goods	$	1,194	$	1,146
Work in process		546		330
Raw materials		441		255
Packaging supplies		249		263
Total inventories	$	2,430	$	1,994

NOTE 6. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of trade accounts receivable.  We perform ongoing credit evaluations on our customers’ financial condition and generally do not require collateral.

One customer accounted for approximately 9% and 10% of our sales in 2013 and 2012 and 10% and 9% of our accounts receivable balances at December 31, 2013 and 2012.  A second customer accounted for approximately 5% and 11% of our sales in 2013 and 2012 and 16% and 30% of our accounts receivable balances at December 31, 2013 and 2012.  A third customer accounted for approximately 9% and 5% of our sales in 2013 and 2012 and 4% and 3% of our accounts receivable balances at December 31, 2013 and 2012.  A fourth customer accounted for approximately 6% and 7% of our sales in 2013 and 2012,  none of our outstanding accounts receivable at December 31, 2013, and 9% of our accounts receivable balances at December 31, 2012.

NOTE 7. PROPERTY

Property consists of the following (in thousands):

	As of December 31,
	2013		2012		Estimated Useful Lives
Land	$	382	$	403
Furniture and fixtures		553		358	5-10 years
Plant		14,582		14,362	25-30 years, or life of lease
Computer and software		1,437		1,407	3-5 years
Leasehold improvements		200		189	3-7 years or life of lease
Machinery and equipment		14,557		15,053	5-10 years
Construction in progress		7,517		9,118
Subtotal		39,228		40,890
Less accumulated depreciation		14,270		12,433
Property, net	$	24,958	$	28,457

Our Lake Charles, Louisiana facility was built at a cost of $3.8 million to process rice bran from a rice milling company adjacent to the facility.  The facility is built on leased land which is owned by the rice milling company.  The facility was idled in May 2009 due to lack of orders.  We recorded a $2.3 million impairment loss on the facility in 2009.  The facility is not classified as held for sale due to potential alternative uses and because we are not aggressively marketing the property.  We evaluated, and continue to evaluate, alternate uses of the facility.  Depreciation on the facility has continued after the facility was idled.  As of December 31, 2013, the net book value of the idled facility included in property, net, was $1.0 million.

We also own equipment purchased in 2009 for use in the Lake Charles, Louisiana facility.  In 2013 and 2012, we recorded impairments of $0.3 million and $1.1 million on the Lake Charles equipment and the net carrying amount of this equipment at December 31, 2013 is $0.4 million.

48

RiceBran Technologies

Notes to Consolidated Financial Statements

NOTE 8. INTANGIBLE ASSETS AND GOODWILL

All changes in goodwill between December 31, 2013 and December 31, 2012, relate to foreign currency translation. Intangible assets consist of the following (in thousands):

	USA Segment									Brazil Segment						Total
	Patents			Trademarks			Customer Lists			Trademarks			Customer Lists			Intangible Assets
December 31, 2013
Cost	$	1,697		$	48		$	2,677		$	2,964		$	1,084		$	8,470
Accumulated amortization		(1,170	)		(41	)		(2,466	)		(2,472	)		(904	)		(7,053	)
Net book value	$	527		$	7		$	211		$	492		$	180		$	1,417
December 31, 2012
Cost	$	1,697		$	48		$	2,677		$	3,418		$	1,250		$	9,090
Accumulated amortization		(1,029	)		(38	)		(2,222	)		(2,362	)		(864	)		(6,515	)
Net book value	$	668		$	10		$	455		$	1,056		$	386		$	2,575
Estimated useful lives	17 years			7 years			7 years			7 years			7 years

We purchased no intangible assets in 2013 or 2012.  All changes in the cost of Brazil segment intangibles are due to foreign currency translation.  Amortization expense is expected to be $0.9 million in 2014, $0.3 million in 2015, $0.1 million in 2016 and $0.1 million in 2017.

NOTE 9. DEBT

The following table summarizes current and long-term portions of debt (in thousands):

	2013		2012
Corporate segment:
Senior revolving note, net	$	1,988	$	-
Senior convertible debentures, net		-		1,048
Subordinated convertible notes, net		-		4,041
Subordinated notes, net		4,262		-
Other		-		28
		6,250		5,117
Brazil segment:
Capital expansion loans		4,795		5,555
Equipment financing		174		201
Working capital lines of credit		3,213		2,227
Advances on export letters of credit		2,386		3,953
Special tax programs		2,351		2,531
		12,919		14,467
Total debt		19,169		19,584
Current portion		8,250		8,003
Long-term portion	$	10,919	$	11,581

49

RiceBran Technologies

Notes to Consolidated Financial Statements

Required future minimum payments on our debt as of December 31, 2013, follow (in thousands).

	Corporate Segment			Brazil Segment		Total
2014	$	1,988		$	6,262	$	8,250
2015		-			1,767		1,767
2016		6,535			1,032		7,567
2017		-			1,005		1,005
2018		-			955		955
Thereafter		-			1,898		1,898
		8,523			12,919		21,442
Discount		(2,273	)		-		(2,273	)
Total debt	$	6,250		$	12,919	$	19,169

As of December 31, 2013, none of the agreements for our outstanding debt contain financial covenants, except for the senior convertible revolving note.  As of December 31, 2013, we were in compliance with those covenants.

Corporate Segment

2013 Senior Revolving Note

Under a 2013 revolving credit facility with TCA Global Credit Master Fund, LP (TCA), as amended, we may borrow up to $8 million, based on the amount of eligible accounts receivable we provide to secure the repayment of the amounts borrowed.  We expect the amount of our eligible receivables will limit our ability to borrow under this facility, such that our outstanding borrowings at any time are less than approximately $2.8 million.  Borrowings under the agreement are evidenced by a revolving note which accrues interest at the rate of 12% per year.  We owe TCA various other fees under the agreement that are expected to average approximately 7% of average borrowings per year.

USA segment accounts receivable, exclusive of our January 2014 acquired subsidiary H&N Distribution, Inc., collections are required to be directed to a TCA owned account.  Collections TCA receives, in excess of amounts due for interest and fees and mandatory minimum cumulative repayments, are treated as additional repayments and reduce amounts outstanding.  There are minimum repayments beginning in January 2014 and the note must be repaid in full by October 2014.  Minimum cumulative repayments are $1.1 million as of March 2014, $1.8 million as of June 2014 and $2.7 million as of September 2014.  Until cumulative repayments equal the required minimum, TCA may withhold 20% of collections.  We may request, generally on a weekly basis, that TCA advance us any amounts collected in excess of amounts (i) due for interest and fees and (ii) required to meet the minimum cumulative repayments.  During 2013, amounts outstanding under the agreement averaged $1.0 million.

During 2013, we borrowed $2.8 million under the TCA revolving note in three tranches.  The proceeds net of cash expenses totaled $2.5 million and were used to (i) pay down $0.4 million of debt, (ii) fund $0.9 million of investments in Nutra SA and (iii) for general corporate purposes.  In addition to cash expenses, we issued TCA 37,260 shares of our common stock with a combined market value of $0.5 million at the dates of issuance.  We also issued warrants to investment bankers with a fair value of $0.5 million at issuance for the purchase of 12,000 shares of common stock, exercisable at prices ranging from $16.00 to $16.80 per share, which expire in 2018.  The total $1.0 million costs incurred with the three tranche closings, consisting of $0.4 million of cash expenses and the $0.6 million fair value of the common stock and warrants were recorded as debt issuance costs in other long-term assets and are being amortized to interest expense over the term of the note.

In the first quarter of 2014, we redeemed $0.4 million of the shares of our common stock issued in connection with the three tranches and are required to redeem the remainder of the shares in the second quarter of 2014.  As of December 2013, the shares of common stock issued to TCA, are recorded as a liability at the $0.5 million redemption value of the shares.

TCA had the right to voluntarily convert upon an event of default, as defined in the agreement, all or any portion of the outstanding principal, interest and other amounts due under the agreement into shares of our common stock.  In December 2013, TCA agreed to remove this right from the agreements for a $0.1 million amendment fee, which was added to the principal of the note.

During the term of the TCA agreement, the Corporate and USA segments may not without TCA’s consent or approval, among other things, (i) incur certain new debt (ii) make any new investments, except capital expenditures less than $0.3 million per year, (iii) issue or redeem stock, (iv) declare or pay dividends or make other distributions to shareholders, and (v) make loans and distributions of assets to any persons, including affiliates.

In connection with the TCA transaction, our factoring agreement was Cancelled and we paid the $0.1 million outstanding balance on the agreement in the second quarter of 2013.

50

RiceBran Technologies

Notes to Consolidated Financial Statements

2013 Senior Convertible Debentures

In the first and second quarter of 2013, the holder of the debentures converted $0.1 million and $0.3 million of the outstanding principal into 7,000 shares and 21,429 shares of our common stock, at a conversion price of $14.00 per share.  We recognized, for each conversion, a loss on extinguishment of $0.1 million, representing the difference between the market values of the shares of common stock issued and the $0.1 million and $0.4 million carrying amounts of the debt (including the related derivative conversion liability), on the date of conversion.

Under a May 2013 amendment to the senior convertible debenture, we agreed to (i) prepay $0.3 million of the of the outstanding principal and (ii) issue 18,571 shares of common stock to the holder, and the holder agreed to share its  senior interest in its collateral pari passu with TCA.  The remaining $0.2 million principal was payable in equal monthly installments from July 2013 through December 2013.  Prior to the amendment, principal was due in equal monthly installments from June 2013 to January 2014.  We expensed the $0.3 million fair value of the shares issued in connection with the amendment and the $0.01 million cash amendment fees as loss on extinguishment.

2013 Subordinated Notes and Subordinated Convertible Notes

In 2013, the holders of our subordinated convertible notes agreed to amend their notes to reduce the interest rate to 5% from 10%, change the maturity of the notes to July 2016 (if there was a different maturity date) and to remove the conversion feature and antidilution protections upon the closing of an equity raise in excess of $7.0 million (Modification).  The notes remain secured by a junior interest in substantially all of our assets, excluding our interest in Nutra SA and RBT PRO, LLC.  Concurrently, certain warrant holders agreed to exchange warrants to purchase 496,060 shares of common stock for the future issuance of 1,554,734 shares of our common stock (Exchange).  Most of the warrants impacted (warrants to purchase 441,395 shares) were warrants issued to the note holders when their notes were originally issued and had contained antidilution protections which caused them to be carried at fair value on our balances sheets.  The former warrant holders committed to exchange their warrants, which were cancelled upon closing an equity raise of at least $7.0 million; however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the notes will increase to 10%.

We accounted for the issuance of the new notes and related obligation to issue stock as a significant modification upon the December 18, 2013 closing of an equity raise in excess of $7.0 million.  We recognized a $2.3 million loss on extinguishment for the difference between the fair values of the new subordinated notes and related obligation to issue stock and the total of (i) the fair values of the conversion features embedded in the old notes, (ii) the fair value of the old warrants and (iii) the carrying amount of the old notes and debt issuance costs.

In November 2013, an investor purchased subordinated notes in the principal amount of $0.5 million.  The notes mature July 2016 and bear interest payable quarterly at the rate of 5%.  We also agreed to issue 134,250 shares of common stock to this investor, however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the notes will increase to 10%.  The proceeds of $0.5 million were allocated between the debt ($0.1 million) and equity ($0.4 million) based on the relative fair value of the debt and the obligation to issue stock.  We recognized no income or expense upon the issuance of the debt.  As a result, we are recognizing interest expense on the debt at an effective interest rate of 81.1%.

In the second quarter of 2013, we issued subordinated convertible notes and related warrants, which are described in the chart below.

Issuance	Principal Amount of Notes (in thousands)		Creditor's Debt Conversion Right	Stated Annual Interest Rate on Debt			Maturity Date of Debt	Number of Shares Under Warrant		Exercise Price of Warrant	Expiration Date of Warrant
Subordinated Convertible Notes and Warrants	$	538	Convertible immediately at $14.00 per share		10	%	July 2015 or July 2016		38,400	Exercisable immediately at $16.00 per share	July 2017 or May 2018

51

RiceBran Technologies

Notes to Consolidated Financial Statements

The total of (i) the $0.5 million fair value of the conversion features issued, (ii) the $0.5 million fair value of the liability warrants issued and (iii) the $0.1 million fair value of our common stock issued, exceeded the $0.5 million proceeds from these issuances, therefore we recorded financing costs of $0.6 million in the second quarter of 2013.  The initial debt discounts recorded for the convertible notes equaled the principal amount of the notes at issuance, because the fair value at issuance of the conversion features and warrants exceeded the proceeds from these issuances.  The notes and related warrants were impacted by the Modification and Exchange described previously.  The $0.5 million of proceeds from issuance of the convertible notes and related warrants was used for repayment of debt and for general corporate purposes.

In May 2013, we entered into agreements to allow each holder of existing subordinated convertible notes and warrants to invest in additional notes and related warrants and which provided that each holder making an additional investment (i) receive 0.0125 shares of our common stock for each dollar invested and (ii) agree to extend the maturity date for all of their notes to July 2016.  Further, each holder of outstanding convertible notes could elect (PIK Election), in lieu of receiving cash interest payments otherwise payable though June 2014 on their existing convertible notes to receive (i) an increase in the number of shares of common stock underlying their notes (ii) an equity warrant to purchase shares of our common stock and (ii) 0.0125 shares of our common stock for each dollar of interest otherwise payable through June 2014.  Holders making an additional investment were deemed under the agreement to have made a PIK Election.

One holder made an additional investment in a subordinated convertible note and related warrant of $0.4 million in May 2013 (included in the issuances discussed two paragraphs above), and, as a result, (i) the maturity date on the holder’s outstanding convertible notes in the principal amount of $1.1 million was extended from July 2015 to July 2016 and (ii) we issued 5,000 shares of common stock to the holder.  No gain or loss was recognized as a result of the extension of the maturity date of the existing notes as the terms were not substantially different.

Other holders of convertible notes in the principal amount of $0.3 million made the PIK Election, without making an additional investment.

As a consequence of the PIK Elections, in 2013, we issued 3,026 shares of common stock with a fair value of $0.2 million.  In lieu of paying certain interest, we (i) increased the shares of common stock underlying the holders’ convertible notes and (ii) issued the holders warrants (PIK warrants) at an exercise price of $16.00 per share, and a May 2018 expiration.  In 2013, through the date of the Modification and Exchange we had increased note principal by $0.1 million, increased the shares of common stock underlying PIK warrants by 8,709 shares and increased the shares of common stock underlying the notes by 8,709 shares.

We recognized a loss on extinguishment for the difference between the fair value of the consideration issued and the accrued interest as of the date of the PIK election.  Changes in fair value from increases in the shares of common stock underlying the PIK warrants and underlying the related convertible notes, related to the PIK Elections were recorded as interest expense until the Modification and Exchange occurred.

2012 Senior Convertible Debenture and Subordinated Convertible Notes

In January 2012, we issued a senior convertible debenture and related warrant for $0.8 million, a $0.1 million discount from the debenture’s stated principal amount.  We received cash proceeds of $0.6 million, net of cash financing costs.  In the third quarter of 2012, this January 2012 debenture was exchanged for a July 2012 debenture with a stated principal amount of $1.0 million, representing the original principal amount plus interest which will accrue through the replacement debenture’s January 2014 maturity.  In July 2012, we also issued a new senior convertible debenture and related warrant and received $0.2 million in proceeds, net of financing costs.

The January and May 2012 subordinated convertible notes with a face amount of $4.4 million, and the related warrants, were issued in exchange for $1.8 million cash, net of issuance costs, and surrender of then outstanding convertible notes with original principal totaling $2.3 million and a related warrant (old notes and old warrant).  Interest was payable monthly at an annual rate of 10%.  The old notes and old warrant were held by Baruch Halpern, who became a director concurrent with the January 2012 transaction.  In exchange for surrendering the old notes and old warrant and an additional $0.1 million cash investment, we issued a $2.5 million subordinated convertible note and related warrant to a trust beneficially owned by Mr. Halpern (the Halpern Trust).

The July and August 2012 subordinated convertible notes with a face amount of $1.0 million, and the related warrants, were issued in exchange for $0.9 million cash, net of issuance costs.  The notes and warrants were issued to four investors who had purchased January and May 2012 subordinated convertible notes and warrants.  We issued a $0.1 million subordinated convertible note and related warrant to an entity beneficially owned by Mr. Halpern (together with the Halpern Trust referred to as the Halpern Entities).

52

RiceBran Technologies

Notes to Consolidated Financial Statements

We accounted for the July 2012 issuance of the replacement senior convertible debenture in the principal amount of $1.0 million and related warrant as a significant modification to the January 2012 debenture and related warrant.  We recognized a loss on extinguishment for the difference between the fair value of the senior convertible debenture and warrant issued and the total of (i) the fair values of the conversion features embedded in the January 2012 debenture (ii) the carrying amount of the old debenture (zero) and (iii) the proceeds received, net of issue costs.

We accounted for the January 2012 issuance of the $2.5 million subordinated convertible note and related warrant to the Halpern Trust as a significant modification to the old notes and warrant held by Mr. Halpern.  We recognized a loss on extinguishment for the difference between the fair value of the subordinated convertible note and warrant issued, and the total of (i) the fair values of the conversion features embedded in the old notes, (ii) the fair value of the old warrant, (iii) the carrying amount of the old notes and (iv) the proceeds received, net of issue costs.  The old notes’ embedded conversion features and the old warrant did not qualify as separate derivative liabilities and, therefore, we reduced equity by the January 2012 fair value of the embedded conversion features and warrant.

The other 2012 issuances of senior convertible debentures, subordinated convertible notes and related warrants were not accounted for as significant modifications and the $3.6 million proceeds from those issuances were allocated to convertible debt and warrants.  In each case, the fair value of the warrants and embedded conversion features exceeded the proceeds received, which resulted in the recognition of financing expense on the date of issuance.

The discount recorded on the subordinated convertible note held by the Halpern Trust and the replacement senior convertible debenture, and the related deferred finance costs were amortized to interest expense under the effective interest method.  As a result we were recognizing interest expense on the Halpern Trust subordinated convertible note at an effective interest rate of 20.9% and on the replacement senior convertible debenture at an effective interest rate of 25.1%.

The debt discounts on the other senior convertible debentures and subordinated convertible notes were also being amortized to interest expense under the effective interest method.  However, because the fair value at issuance of the conversion features and warrants exceeded the proceeds from these issuances, in each case, under the effective interest method, this will result in the debt discount being expensed when the principal of the convertible debt matures or is redeemed, in proportion to the principal reduction.  Deferred finance costs were also being amortized to interest expense under the effective interest method, in a similar fashion.

Changes in the fair value of the derivative conversion and warrant liabilities subsequent to issuance were recognized in change in fair value of derivative warrant and conversion liabilities in the statement of operations.  The changes in fair value of derivative liabilities as a result of the July 2012 amendment to the January 2012 and May 2012 subordinated convertible notes and related warrants, were also included in change in fair value of derivative warrant and conversion liabilities in the statement of operations.  As a result of a July 2012 amendment, the exercise price on the warrants related to the January 2012 and May 2012 subordinated convertible notes decreased from $24.00 per share to $16.00 per share and the number of underlying shares was increased proportionately.  In addition the terms of all of the subordinated convertible notes outstanding, were modified such that the maturity date was extended from January and May 2015 to July 2015.

The $2.4 million of the $3.6 million in proceeds from the 2012 issuances of convertible debt and related warrants were used to make the final distributions to the unsecured creditors in January 2012 and the remainder was used for general corporate purposes.

Brazil Segment

All Brazil segment debt is denominated in the Brazilian Real (R$), except advances on export letters of credit which are denominated in U.S. Dollars.

Capital Expansion Loans

In December 2011, Irgovel entered into agreements with the Bank of Brazil.  Under the agreements, Irgovel may borrow up to R$9.5 million (a total of $4.0 million based on the December 31, 2013, exchange rate).  The annual interest rate on the loans is 6.5%.  Interest is payable quarterly on the amounts outstanding and the maturity date of the loans is December 2021.  Irgovel must make monthly principal payments under each of the loans with the first payment due on January 2014.  Irgovel used R$1.5 million of the proceeds for working capital purposes and the remainder for the purchase of equipment and machinery.

53

RiceBran Technologies

Notes to Consolidated Financial Statements

In July 2012, Irgovel entered into a third agreement with the bank under which it borrowed R$1.7 million ($0.7 million based on the December 31, 2013, exchange rate) for the purchase of certain equipment at an annual interest rate of 5.5%.  Interest is payable quarterly on the amounts outstanding and the maturity date of the loans is July 2019.  Irgovel must make monthly principal payments under the loan with the first payment due August 2015.  The loan is secured by the related equipment.

Equipment Financing

Irgovel has entered into certain equipment financing arrangements with annual interest rates that range from 13.5% to 17.8%, and average 15.0%.  Interest and principal on this debt is payable monthly and payments extend through March 2017.  This debt is secured by the related equipment.

Working Capital Lines of Credit

Irgovel has working capital lines of credit secured by accounts receivable.  The total amount of borrowing cannot exceed 30%-110% of the collateral, depending on the agreement.  The annual interest rates on this debt range from 10.4% to 60.0%, and average 21.7%.  Principal maturities of amounts outstanding at December 31, 2013, extend through December 2015.

Advances on Export Letters of Credit

Irgovel obtains advances against certain accounts receivable backed by export letters of credit.  The annual interest rates on these advances range from 3.9% to 6.0%, and average 5.5%.  Principal maturities of amounts outstanding at December 31, 2013, extend through May 2014.

Special Tax Programs

Irgovel has unsecured notes payable for Brazilian federal and social security taxes under a special Brazilian government tax program.  Amounts due under the special tax program are part of an amnesty program relative to unpaid taxes that existed prior to our acquisition of Irgovel in 2008.  Principal and interest payments are due monthly through 2022.  Interest on the notes is payable monthly at the Brazilian SELIC target rate, which was 9.0% at December 31, 2013.

NOTE 10. EQUITY AND SHARE-BASED COMPENSATION

On October 28, 2013, our board of directors approved a 1 for 200 reverse split of our common stock.  We began trading on a post-split basis on November 18, 2013.  All share and per share information has been retrospectively adjusted for all prior periods presented giving retroactive effect to the reverse stock split.  Such adjustments include calculations of our weighted averages number of shares outstanding and loss per share, as well as disclosures regarding our share-based compensation and convertible debt.

We have never declared or paid dividends on our common stock and have no plans to pay dividends in the foreseeable future.  Pursuant to the terms of the senior convertible debentures, we may not pay any dividends while a debenture is outstanding.  Cash provided by operations in our Brazil segment is generally unavailable for distribution to our Corporate and USA segments pursuant to the terms of the limited liability company agreement for Nutra SA.

In June 2013, our shareholders approved an increase in the number of our authorized shares of common stock from 2,500,000 to 6,000,000.

In December 2013, we completed a secondary public offering in which we issued and sold 1,714,286 shares of common stock for $5.24 per share and publicly traded warrants to purchase 1,714,286 shares of common stock for $0.01 per underlying share.  The net proceeds from the offering were $7.6 million after deducting underwriting discounts and commissions of $0.7 million and other offering expenses of approximately $1.4 million.  The publicly traded warrants have an exercise price of $6.55 per share and expire in December 2018.  The underwriter on the offering also received a warrant for the purchase of 85,715 shares, at an exercise price of $6.55 per share, which expires in December 2018.

In January 2014, the underwriters exercised their overallotment rights and we issued and sold an additional 162,586 shares of common stock for $5.24 per share and additional publicly traded warrants to purchase 162,586 shares of common stock for $0.01 per underlying share. In connection with the overallotment exercise, the underwriters on the offering also received a warrant for the purchase of 8,130 shares, at an exercise price of $6.55 per share, which expires in December 2018.

54

RiceBran Technologies

Notes to Consolidated Financial Statements

In March 2014, we completed a private placement offering.  We issued convertible notes in the principal amount of $4.9 million and warrants for the purchase of up to 1,399,614 shares of common stock.  The notes are due in July 2016, bear interest at 5% interest and automatically convert at a conversion price of $5.25, upon shareholders voting to approve an increase in our authorized shares of common stock.  The warrants have an exercise price of $5.25 per share and expire in March 2019.  We contributed $1.0 million of the $4.6 million gross proceeds to Nutra SA, and intend to use the remainder of the proceeds for capital project in the United States and for general corporate purposes.

A summary of stock option and warrant activity for 2013 and 2012 follows.

	Options								Equity and Liability Warrants
	Shares Under Options				Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Shares Under Warrants				Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding, January 1, 2012		192,944			$	54.00		6.3		233,947			$	208.00		1.7
Granted		29,060				30.00				423,782				20.00
Impact of anti-dilution clauses		-		NA						518,720		NA
Impact of amendment		-		NA						78,215		NA
Exercised		-		NA						(25,015	)			20.00
Forfeited, expired or cancelled		(52,750	)			68.00				(422,880	)			86.00
Outstanding, December 31, 2012		169,254				32.00		6.3		806,769				24.00		3.5
Granted or issued		40,000				15.38				1,859,111				6.85
Impact of anti-dilution clauses		-		NA						385,292		NA
Impact of amendment		-		NA						(496,061	)	NA
Exercised		-		NA						-				-
Forfeited, expired or cancelled		(29,817	)			50.58				(148,829	)			66.92
Outstanding, December 31, 2013		179,437			$	24.28		6.2		2,406,282			$	6.33		4.5
Exercisable, December 31, 2013		157,012			$	25.23		5.9		2,320,567			$	6.32		4.4

Options

Our board of directors adopted our 2010 Equity Incentive Plan (2010 Plan) in February 2010.  A total of 125,000 shares of common stock were initially reserved for issuance under the 2010 Plan.  The amount reserved increases annually each January 1st by 5% of the outstanding shares as of the prior December 31st.  Additionally, in 2011 the board approved a 40,000 increase in the number of shares of common stock reserved under the plan.  In 2013, the board froze the plan and there are no longer any shares reserved for future issuance under the 2010 Plan.

Under the terms of the 2010 Plan, we could grant options to purchase common stock and shares of common stock to officers, directors, employees or consultants providing services on such terms as are determined by the board of directors.  Our board of directors administered the 2010 Plan, determined vesting schedules on plan awards and could accelerate the vesting schedules for award recipients.  The options granted under the 2010 Plan have terms of up to 10 years.  There are no longer any shares reserved for future issuance under the 2010 Plan.

Our board of directors adopted the 2005 Equity Incentive Plan (2005 Plan) in May 2005 and our shareholders approved the 2005 Plan in September 2005.  Under the terms of the 2005 Plan, we could grant options to purchase common stock and shares of common stock to officers, directors, employees or consultants providing services on such terms as are determined by the board of directors.  Options granted under the 2005 Plan have terms of up to 10 years.  There are no longer any shares reserved for future issuance under the 2005 Plan.

We have outstanding a total of 17,384 options awarded to current and former directors, employees and consultants at various times beginning in 2004 through 2009 that do not fall under the plans described above.  Expiration periods, typically ten years, and other terms of these non-plan specific options are not materially different from those issued under the 2010 Plan and 2005 Plan.

55

RiceBran Technologies

Notes to Consolidated Financial Statements

Share-based compensation expenses related to options are included in selling, general and administrative expenses in the statements of operations, and consisted of the following (in thousands):

	2013		2012
Consultants	$	16	$	42
Directors		262		285
Employees		127		152
Executive officers		133		444
Total share-based compensation expense, options	$	538	$	923

The following table summarizes option activity during 2013 and 2012:

	Employees and Directors					Consultants
				Weighted					Weighted		Total
	Shares			Average		Shares			Average		Shares
	Underlying			Exercise		Underlying			Exercise		Underlying
	Options			Price		Options			Price		Options
Outstanding,  January 1, 2012		180,494		$	48.00		12,450		$	152.00		192,944
Granted		28,060			26.00		1,000			16.00		29,060
Forfeited, expired or cancelled		(50,250	)		58.00		(2,500	)		266.00		(52,750	)
Exercised		-		NA			-		NA			-
Outstanding, December 31, 2012		158,304			26.00		10,950			106.00		169,254
Granted		38,750			15.36		1,250			16.00		40,000
Forfeited, expired or cancelled		(27,317	)		27.75		(2,500	)		300.00		(29,817	)
Exercised		-		NA			-		NA			-
Outstanding, December 31, 2013		169,737		$	23.13		9,700		$	44.45		179,437
Exercisable, December 31, 2013		148,698		$	24.31		8,314		$	41.72		157,012

As of December 31, 2013, our outstanding options have no intrinsic value. The average fair value of options granted was $11.18 per share in 2013 and $20.00 per share in 2012.  The following are the assumptions used in valuing stock options:

	2013	2012
Assumed volatility	119.2%-122.3%	104.4%-113.3%
	(121.1% weighted average)	(109.2% weighted average)
Assumed risk free interest rate	0.7%-1.4%	0.2%-1.0%
	(0.9% weighted average)	(0.9% weighted average)
Average expected life of options (in years)	6.2	6.1
Expected dividends	-	-
Forfeiture rate	5%	5%

56

RiceBran Technologies

Notes to Consolidated Financial Statements

The following table summarizes information related to outstanding and exercisable options:

		As of December 31, 2013
		Outstanding						Exercisable
Range of Exercise Prices		Shares Underlying Options		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Underlying Options		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	6.00 to $16.00		135,989		7.0	$	15.82		114,636		6.8	$	16.00
	28.00		1,457		7.2		28.00		1,457		8.2		28.00
	40.00		23,991		4.8		40.00		23,991		4.8		40.00
	60.00		15,000		1.0		60.00		15,000		1.0		60.00
	74.00		2,500		7.2		74.00		1,428		7.2		74.00
	242.00		500		2.0		242.00		500		2.0		242.00
	16.00 to $242.00		179,437		6.2	$	24.28		157,012		5.9	$	25.23

In April 2013, our board increased the number of shares of common stock that each non-employee director automatically receives annually each January 1 under our 2010 Equity Incentive Plan from 1,250 to 5,000 shares.  In connection with the increase in the automatic director grant, in April 2013, our board granted each of our five non-employee directors a stock option to purchase up to 3,750 shares of common stock.  Each option has an exercise price of $16.00 per share, vests in nine equal monthly installments ending December 31, 2013, and expires in April 2023.  In January 2013, we issued each of those five non-employee directors an option for the purchase of up to 1,250 shares of common stock under the non-employee director automatic grant provision.  Each option has an exercise price of $16.00 per share, vests in twelve equal monthly installments ending December 2013, and expires in January 2023.

In April 2013, the Board granted each of the two directors serving on the strategic committee and consulting special counsel each a stock option to purchase up to 1,250 shares of common stock.  Each option has an exercise price of $16.00 per share, vests in twelve equal monthly installments ending in March 2014 and expires in April 2018.

In 2012, we issued 15,022 shares of common stock to retiring directors in exchange for the surrender of vested stock options exercisable for 23,710 shares of common stock.  The fair value of the options surrendered on the date of the stock issuances was $0.3 million and fair value of the stock at issuances was $0.3 million.

For 2012, our non-employee directors agreed to accept stock options in lieu of cash representing one half of the board retainer fees to which they otherwise would have been entitled.  As a result, we issued options for the purchase of 6,090 shares of common stock in 2012, at an exercise price of $28.00 per share.  The stock options vested in installments during 2012.  The $0.2 million grant date fair value of the options equaled the cash fees to which the directors were otherwise entitled.

In 2012, our three executive officers agreed to accept stock options in lieu of receiving their full salary in cash.  Our three executive officers received cash equal to either 83.3% or 90.0% of their stated contract salary, as detailed in their employment agreements, and these officers were collectively issued stock options for the purchase of up to 4,263 shares of common stock at an exercise price equal to $24.00 per share.  The options vested in installments during 2012.  The $0.1 million grant date fair value of the options equaled the officers’ salary forbearance.

In 2012, we lowered the exercise price on outstanding options held by certain employees for the purchase of up to 108,588 shares of common stock to $16.00 per share from an average exercise price of $38.00 per share.  The stock price on the date of the re-pricing was $14.00 per share.  No other terms of the options were modified.  We recorded expense of less than $0.1 million in 2012, representing the difference between the fair value of the options before and after the modification.  Total unrecognized compensation increased less than $0.1 million as a result of the modification.

57

RiceBran Technologies

Notes to Consolidated Financial Statements

Warrants

We have outstanding warrants classified as equity (equity warrants) and others classified as derivative warrant liability (liability warrants).  We have certain warrant agreements in effect for outstanding liability warrants that contain antidilution clauses.  Under the antidilution clauses, in the event of equity issuances, we may be required to lower the exercise price on liability warrants and increase the number of shares underlying liability warrants.  Equity issuances may include issuances of our common stock, certain awards of options to employees, and issuances of warrants and/or other convertible instruments below a certain exercise price.

Certain equity issuance in 2013 and 2012 triggered the antidilution clauses in certain liability warrants and, as a result, we were required to lower the exercise price and increase the number of shares underlying certain liability warrants.  In addition, certain amendments required us to lower the exercise price and increase the numbers of shares underlying certain warrants.

	Equity Warrants							Liability Warrants
	Shares Underlying			Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Underlying			Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
Balance, January 1, 2011		17,372			3.5	$	60.00		216,575			1.5	$	220.00
Granted		-					-		423,782					20.00
Impact of antidilution clauses		-					-		518,720				NA
Impact of amendment		-					-		78,215				NA
Exercised		-					-		(25,015	)				20.00
Forfeited, expired or cancelled		(11,616	)				44.00		(411,264	)				88.00
Outstanding, December 31, 2012		5,756			2.4		90.00		801,013			3.5		24.00
Granted		1,820,711					6.66		38,400					16.00
Impact of antidilution clauses		-					-		385,292				NA
Impact of amendment		(8,711	)				-		(487,350	)			NA
Exercised		-					-		-				NA
Forfeited, expired or cancelled		(2,722	)				137.60		(146,107	)				65.60
Outstanding, December 31, 2013		1,815,034			5.0	$	6.69		591,248			2.9	$	5.24
Exercisable, December 31, 2013		1,729,319			5.0	$	6.69		591,248			2.9	$	5.24

During the first quarter of 2012, the holder of a liability warrant to purchase 25,016 shares of common stock exercised the warrant on a cashless basis and, as a result, we issued the holder 7,764 shares of our common stock.  We transferred the $0.7 million fair value of the liability warrant as of the date of exercise into equity.

The following table summarizes information related to outstanding and exercisable warrants:

			Outstanding						Exercisable
Range of Exercise Prices		Type of Warrant	Shares Under Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Under Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	5.24	Liability		591,248		2.9	$	5.24		591,248		2.9	$	5.24
	6.55	Equity		1,800,001		5.0		6.55		1,714,286		5.0		6.55
	16.00 to $16.80	Equity		12,004		4.5		16.40		12,004		4.5		16.40
	46.80	Equity		3,029		2.9		46.80		3,029		2.9		46.80
				2,406,282		4.5	$	6.33		2,320,567		4.4	$	6.32

58

RiceBran Technologies

Notes to Consolidated Financial Statements

NOTE 11. EQUITY METHOD INVESTMENT

In 2011, we entered into an agreement with a partner with the goal of developing technology to extract and concentrate protein from rice bran.  In March 2013, the agreement was mutually terminated under terms whereby we each received (i) the right to separately develop, modify and improve the jointly developed technology owned by the partner and (ii) a nonexclusive, royalty free, perpetual license to that technology (License).  We paid the partner $1.2 million as a lump sum in April 2013.

RBT PRO, LLC (RBT PRO) was a wholly owned subsidiary whose only asset was the License acquired in March 2013.  In April 2013, we entered into a series of agreements with various affiliates of Wilmar International Limited (collectively Wilmar).  In connection therewith, we sold a 50% membership interest in RBT PRO to Wilmar for $1.2 million.  RBT PRO granted an exclusive, royalty free, perpetual sublicense of the License to Wilmar for use throughout China and to us for use worldwide, excluding China.

We also entered into a cross license agreement with Wilmar.  We agreed to license to Wilmar all of our intellectual property with respect to processing of rice bran and its derivatives for use in China.  Wilmar agreed to license to us (i) its intellectual property with respect to processing of rice bran, and its derivatives, based on the intellectual property licensed to Wilmar under the License for use worldwide, excluding China and (ii) its other intellectual property with respect to processing of rice bran, and its derivatives, for use worldwide, excluding certain countries in Asia.

Under the agreements, we obtained the right to purchase 45% of the capital stock of any entity Wilmar establishes to develop new products relating to rice bran or its derivative, as defined in the agreement, using the intellectual property licensed to Wilmar.  If we decline the right to purchase 45% of the capital stock of any such new entity, we have the option to purchase 25% of the entity within two years of the entity’s formation.  The exercise price for the option will equal 25% of the capital investment made in the entity, plus interest, as defined in the agreement.

There was no gain or loss recognized on these transactions because we entered the agreement with the partner in contemplation of the agreements with Wilmar.  We account for our investment in RBT PRO under the equity method.  Our investment in RBT PRO is zero as of December 31, 2013, and RBT PRO has had no net income or loss since inception.

NOTE 12. PRE-PETITION LIABILITIES

On November 10, 2009, we filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.  None of our subsidiaries were included in the bankruptcy filing.  In January 2012, we made our final $1.6 million distribution to the general unsecured creditors.

59

RiceBran Technologies

Notes to Consolidated Financial Statements

NOTE 13. INCOME TAXES

Deferred tax assets (liabilities) are comprised of the following (in thousands):

	As of December 31,
	2013			2012
United States
Net operating loss carryforwards	$	43,328		$	41,374
Gain on sale of membership interests in Nutra SA		403			374
Stock options and warrants		1,199			1,144
Intangible assets		1,194			960
Property		6,832			5,651
Capitalized expenses		652			715
Convertible debt		(112	)		(399	)
Other		451			86
Deferred tax assets		53,947			49,905
Less: Valuation allowance		(53,947	)		(49,905	)
		-			-
Brazil
Intangible assets		(228	)		(490	)
Property		(1,555	)		(2,165	)
Net operating loss carryforwards		2,381			960
Other		285			255
Net deferred tax asset (liability)		883			(1,440	)
Less-valuation allowance		(883	)		-
	$	-		$	(1,440	)
Deferred tax asset - current	$	-		$	234
Deferred tax liability - long-term		-			(1,674	)
	$	-		$	(1,440	)

Deferred taxes arise from temporary differences in the recognition of certain expenses for tax and financial reporting purposes.  We have determined it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Accordingly we have provided a valuation allowance for deferred tax assets.  Our valuation allowance is on U.S. and Brazil deferred tax assets.  The change in valuation allowance of $4.9 million in 2013 is due to (i) $3.9 million in net operating loss and (ii) $0.7 million from the impact of state rate changes, and (ii) $0.9 million for the establishment of a valuation allowance against Brazil deferred tax assets, offset by (i) the $0.4 million impact of expiring net operating losses and (ii) $0.2 million of other deferred items.  The change in valuation allowance of $1.9 million in 2012 is due to (i) $1.7 million in net operating loss and other deferred changes from 2012 operations, offset by (ii) the $1.5 million impact of expiring net operating losses and (iii) the $2.1 million impact of adjustments to capitalized expenses and stock option compensation.

As of December 31, 2013, net operating loss carryforwards for U.S. federal tax purposes totaled $116.2 million and expire at various dates from 2018 through 2033.  Net operating loss carryforwards for state tax purposes totaled $68.4 million as of December 31, 2013, and expire at various dates from 2014 through 2033.  As of December 31, 2013, net operating loss carryforwards for Brazil tax purposes totaled $7.0 million and do not expire but may be subject to substantial annual limitations (generally 30% of taxable income in any year.).

Utilization of net operating loss carryforwards may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986, as amended and similar state regulations.  The annual limitation may result in the expiration of substantial net operating loss carryforwards before utilization.

We are subject to taxation in the U.S. and various states.  We record liabilities for income tax contingencies based on our best estimate of the underlying exposures.  We are open for audit by the IRS for years after 2010 and, generally, by U.S. state tax jurisdictions after 2009.  We are open for audit by the Brazilian tax authorities for years after 2009.

60

RiceBran Technologies

Notes to Consolidated Financial Statements

Loss before income taxes is comprised of the following (in thousands):

	2013			2012
Foreign	$	(6,832	)	$	(5,051	)
Domestic		(12,247	)		(8,020	)
Loss before income taxes	$	(19,079	)	$	(13,071	)

Foreign earnings are assumed to be permanently reinvested.  U.S. federal income taxes have not been provided on undistributed earnings of our foreign subsidiary.

The income tax benefit of $1.4 million in 2013 and $1.9 million in 2012 is all foreign deferred tax benefit.  We have no U.S. tax provision or benefit in 2013 or 2012.

Reconciliations between the amount computed by applying the U.S. federal statutory tax rate (34%) to loss before income taxes, and income tax benefit follows (in thousands):

	2013			2012
Income tax benefit at federal statutory rate	$	(6,487	)	$	(4,444	)
Increase (decrease) resulting from:
State tax benefit, net of federal tax effect		(653	)		(251	)
Change in valuation allowance		4,927			(1,926	)
Adjustment to capitalized costs deferred balances		-			443
Adjustment to stock option compensation deferred balances		-			1,602
Reduction in deferred balances for forfeited, expired or cancelled options		255			602
Expiration of U.S. net operating losses		415			1,460
Nontaxable fair value adjustment		350			(1,843	)
Nondeductible convertible debt issuance expenses		521			2,285
Impact of state rate changes		(677	)		-
Nondeductible expenses		6			10
Foreign taxes		-			6
Adjustments to Brazil deferred balances		-			(222	)
Adjustments to U.S. deferred balances		(96	)		343
Income tax benefit	$	(1,439	)	$	(1,935	)

We have not identified any uncertain tax positions requiring a reserve as of December 31, 2013 or 2012.

NOTE 14. COMMITMENTS AND CONTINGENCIES

Employment Contracts

We have entered into employment and other agreements with certain executives and other employees that provide for compensation and certain other benefits.  These agreements provide for severance payments under certain circumstances.

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.

61

RiceBran Technologies

Notes to Consolidated Financial Statements

Leases

We lease certain properties under various operating lease arrangements that expire over the next twenty one years.  These leases generally provide us with the option to renew the lease at the end of the lease term.  Future minimum payments under these commitments as of December 31, 2013, are as follows: $0.3 million for 2014; $0.3 million in 2015; $0.3 million in 2016, $0.1 million in 2017, $0.1 million in 2018 and $1.1 million thereafter.  We incurred lease expense of $0.5 million in 2013 and $0.4 million in 2012.

Litigation

In addition to the matters discussed below, from time to time we are involved in litigation incidental to the conduct of our business.  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.

Defense costs are expensed as incurred and are included in professional fees.

Irgovel Purchase

On August 28, 2008, former Irgovel stockholder David Resyng filed an indemnification suit against Irgovel, Osmar Brito and the remaining former Irgovel stockholders (Sellers), requesting:  (i) the freezing of the escrow account maintained in connection with the transfer of Irgovel’s corporate control to us and the presentation of all documentation related to the transaction, and (ii) damages in the amount of the difference between (a) the sum received by David Resyng in connection with the judicial settlement agreement executed in the action for the partial dissolution of the limited liability company filed by David Resyng against Irgovel and the Sellers and (b) the amount received by the Sellers in connection with the sale of Irgovel’s corporate control to us, in addition to moral damages as determined in the court’s discretion.  The amount of damage claimed by Mr. Resyng is approximately $3 million.

We believe that the filing of the above lawsuit is a fundamental default of the obligations undertaken by the Sellers under the Quotas Purchase Agreement for the transfer of Irgovel’s corporate control, executed by and among the Sellers and us on January 31, 2008 (Purchase Agreement).  Consequently, we believe that the responsibility for any indemnity, costs and expenses incurred or that may come to be incurred by Irgovel and/or us in connection with the above lawsuit is the sole responsibility of the Sellers.

On February 6, 2009, the Sellers filed a collection lawsuit against us seeking payment of the second installment of the purchase price under the Purchase Agreement, which the Sellers allege is approximately $1.0 million.  We have withheld payment of the second installment pending resolution of the Resyng lawsuit noted above.  Our parent company has not been served with any formal notices in regard to this matter.  To date, only Irgovel has received formal legal notice.  In addition, the Purchase Agreement requires that all disputes between us and the Sellers be adjudicated through arbitration.  As part of the Purchase Agreement, $2.0 million was deposited into an escrow account to cover contingencies with the net remaining funds payable to the Sellers upon resolution of all contingencies.  We believe any payout due to the lawsuit will be made out of the escrow account.  As of December 31 2013 and, 2012, the balance in the escrow account was $1.9 million and is included in restricted cash in our balance sheets.  There is an escrow liability related to the lawsuit in accrued expenses on our balance sheets as of December, 2013 and, 2012, totaling $1.4 million. When the escrow account was funded, we established an accrued liability equal to the amount of the escrow for contingencies and the net balance due to the Sellers under the terms of the Purchase Agreement.  As of December 31, 2013, $0.7 million of pre-acquisition contingencies have either been paid or specifically identified and accrued, leaving a balance of $1.4 million to settle any remaining contingencies.  We believe that there is no additional material exposure as any amounts determined to be owed as a result of the above noted litigation and contingencies will be covered by the escrow account. We agreed to pay to Nutra SA ninety percent of any funds received from the escrow account in excess of the sum of (i) $1.0 million and (ii) our contributions to Nutra SA made after March 25, 2014, with no resulting change in our Nutra SA voting rights.

Diabco Life Sciences, LLC

In January 2012, we filed a complaint in the Superior Court of California, Sacramento County, seeking damages arising out of Diabco Life Sciences, LLC’s (Diabco) breach of a 2008 promissory note in the principal amount of $0.5 million.  At trial August 2013, Diabco stipulated that total damages through July 2013, including interest and late fees, amounted to $0.9 million.  In September 2013, the court issued its tentative statement of decision indicating that judgment will be entered in our favor in the amount of $0.9 million as of July 2013, plus interest.  In January 2014, the court issued its final judgment in the amount of $1.0 million.  Diabco has filed a notice of appeal with the court challenging the final judgment.  We have no receivable from Diabco recorded in the accompanying financial statements as recovery of the judgment is not reasonably assured.

62

RiceBran Technologies

Notes to Consolidated Financial Statements

NOTE 15. EMPLOYEE BONUS PLAN

In 2010, our board of directors approved a cash incentive bonus plan.  As of December 31, 2013, the plan, as amended, provided for payment of $0.7 million to employees, still employed at the time of payments, when (i) we are cash flow positive, defined by our board as earnings before interest, taxes, depreciation, amortization and certain non-cash charges, and (ii) cash was available for the payments as determined by our board at its sole discretion.  In December 2013, our board approved payment of these bonuses and as of December 31, 2013, $0.6 million is accrued and unpaid.

In 2013, our board of directors approved an executive bonus plan which provided for payments of $0.3 million to employees, still employed at the time of payments, when cash was available for the payments as determined by our board at its sole discretion.  In 2013, our board approved payment of these bonuses and as of December 31, 2013, $0.2 million is accrued and unpaid.

NOTE 16. RELATED PARTY TRANSACTIONS

Transactions with Director Baruch Halpern

In January 2012, Baruch Halpern became a member of our board of directors.  Mr. Halpern is the principal in Halpern Capital, Inc. (HC).  Under a February 2011 financial advisor agreement we are obligated to pay HC success fees ranging from 2.5% to 5.0% of the consideration received from certain equity, convertible securities or debt transactions.  We must also issue warrants to purchase shares of common stock that equal from 2.5% to 5.0% of the consideration received in those transactions, divided by either the market price of the common stock or the conversion price of the securities issued in the transaction.  This agreement terminated April 1, 2012, however, we remain obligated to pay HC success fees and issue HC warrants on any transaction with an investor introduced by HC occurring though March 31, 2013.

In connection with the issuance of convertible debt in 2012 we issued the transactional warrants listed below under the terms of our financial advisor agreement with HC.

Date of Warrants	Number of Shares Under Warrants	Exercise Price of Warrant	Expiration Date of Warrant
		(1)
January 2012	1,250	Exercisable immediately at $30.00 per share (2)	January 2017
January 2012	5,563	Exercisable immediately at $20.00 per share (2)	January 2017
May 2012	63	Exercisable immediately at $20.00 per share (2)	May 2017
July 2012	711	Exercisable immediately at $14.00 per share	July 2017
August 2012	268	Exercisable immediately at $14.00 per share	August 2017

(1) As a result of the July 31, 2012, issuances of convertible debt and related warrants, the exercise prices on these transactional warrants were reduced under the full ratchet antidilution provisions included in the transactional warrants, to $14.00 per share and the number of underlying shares increased to equal the number of original underlying shares times the initial exercise price divided by $14.00 per share.

(2) In 2013, in connection with the Exchange, these warrants were cancelled in exchange for 75,377 shares of our common stock (with a fair value of $0.3 million at time of the Exchange), however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the replacement notes will increase from 5% to 10%.

63

RiceBran Technologies

Notes to Consolidated Financial Statements

Other transactions with Mr. Halpern, HC and Halpern Entities are summarized below (in thousands):

	2013		2012
Success fees earned by HC under financial advisor agreement payable in cash	$	-	$	164
Interest earned on convertible debt		306		243
Interest paid on convertible debt		288		242
Payments to HC relevant to HC's class 6 general unsecured creditor claim		-		256

As of December 31, 2013 and 2012, there was less than $0.1 million in accounts payable or accrued expenses due to Mr. Halpern, HC or the Halpern Entities.

In January 2012, we agreed to extend the expiration dates on certain liability warrants held by Mr. Halpern and others, for the purchase of 25,833 shares of common stock at an exercise price of $20.00 per share from July 2014 to January 2017.  The resulting $0.1 million change in the fair value of the warrants was expensed in other income (expense).

As a result of the amendment discussed in the Debt note to these financial statements, the terms of Mr. Halpern’s January 2012 subordinated convertible note were modified such that the maturity date was extended from January to July 2015, the exercise price on the related warrant was reduced from $24.00 per share to $16.00 per share and the number of underlying shares on those warrants was increased from 125,000 to 178,572.  Had the warrant not been amended, the exercise price would have reduced to $14.00 per share under the antidilution provisions in the warrant.

As a result of the Modification, the terms of the subordinated convertible notes beneficially owned by Mr. Halpern in the principal amount of $2.6 million were replaced with subordinated notes under the terms of the Modification.  As a result of the Exchange, the warrants for the purchase of up to 185,714 shares of common stock ($14.00 per share exercise price with a July 31, 2017 expiration), related to the subordinated convertible notes beneficially owned by Mr. Halpern, were cancelled in exchange for 634,679 shares of our common stock (with a fair value of $2.9 million at time of the Exchange), however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the replacement notes will increase from 5% to 10%.  Mr. Halpern received consideration in the Modification and Exchange consistent with other subordinated convertible note and warrant holders.  We recognized a gain on extinguishment of $0.4 million on the Modification and Exchange transactions with Mr. Halpern.

Transactions with Other Directors

In April 2012, Henk Hoogenkamp became a member of our board of directors.  Effective January 1, 2012, under a one-year independent contractor consulting agreement, we issued Mr. Hoogenkamp 5,000 shares of our common stock, which were to vest in twelve equal monthly installments during 2012.  In April 2012, in connection with Mr. Hoogenkamp’s appointment to the Board of Directors, we terminated the independent contractor agreement and agreed to immediately vest all of the 5,000 shares of common stock previously granted.  During 2013 and 2012, we paid and expensed less than $0.1 million for cash fees owed under the independent contractor agreements.  We expensed $0.1 million in both 2013 and 2012 for common stock issued under the independent contractor agreements.

W. John Short (CEO and director), Zanesville Partners Fund, LLC, which is beneficially owned by James C. Lintzenich (former director), and the Edward L. McMillan Revocable Trust, which is beneficially owned by Edward L. McMillan (former director), collectively invested $0.1 million in the January 2012 subordinated convertible notes and related warrants issuance.  During 2013 and 2012, we paid and expensed less than $0.1 million for interest on these three subordinated convertible notes.  Their notes were modified in the Modification and the related warrants were cancelled in the Exchange.

W. John Short, CEO and director, invested $50 thousand in the January 2012 subordinated convertible notes and related warrants and $25 thousand in the April 2013 subordinated convertible notes and related warrants.  During 2013 and 2012, we paid less than $1 thousand of interest on the convertible notes.  In June 2013, Mr. Short made a PIK Election for interest accruing under the notes from February 2013 through June 2014.  In connection with the election, we issued to Mr. Short 82 shares of common stock and a PIK warrant, currently with 234 underlying shares of common stock, and we increased the shares underlying Mr. Short’s convertible notes by 234 shares as payment for interest accruing under the convertible notes from February 2013 through October 2013

64

RiceBran Technologies

Notes to Consolidated Financial Statements

NOTE 17. SEGMENT INFORMATION

We have two reportable operating segments in 2013: (i) USA segment, which manufactures and distributes SRB in various granulations along with Stage II products and derivatives and (ii) Brazil segment, which extracts crude RBO and DRB from rice bran, which are then further processed into fully refined rice bran oil for sale internationally and in Brazil, compounded animal nutrition products for horses, cows, swine, sheep and poultry and a number of valuable human food and animal nutrition products derivatives and co-products. In addition we incur corporate and other expenses not directly attributable to operating segments, which include costs related to our corporate staff, general and administrative expenses including public company expenses, intellectual property, professional fees, and other expenses.  No Corporate allocations, including interests, are made to the operating segments.

The table below presents segment information for the years identified and provides a reconciliation of segment information to total consolidated information (in thousands).

	2013
	Corporate			USA			Brazil			Consolidated
Revenues	$	-		$	12,023		$	23,028		$	35,051
Cost of goods sold		-			9,078			22,028			31,106
Gross profit		-			2,945			1,000			3,945
Depreciation and amortization (in selling, general and administrative)		(24	)		(469	)		(756	)		(1,249	)
Impairment of property		-			(300	)		-			(300	)
Other operating expenses		(5,918	)		(2,006	)		(4,442	)		(12,366	)
Income (loss) from operations	$	(5,942	)	$	170		$	(4,198	)	$	(9,970	)
Net income (loss) attributable to RiceBran Technologies shareholders	$	(12,418	)	$	170		$	(2,773	)	$	(15,021	)
Interest expense		(1,950	)		-			(1,984	)		(3,934	)
Depreciation (in cost of goods sold)		-			(926	)		(1,873	)		(2,799	)
Purchases of property		21			191			2,907			3,119
Property, net, end of period		55			7,231			17,672			24,958
Goodwill, end of period		-			-			4,139			4,139
Intangible assets, net, end of period		-			745			672			1,417
Total assets, end of period		6,039			9,796			28,743			44,578

	2012
	Corporate			USA			Brazil			Consolidated
Revenues	$	-		$	12,633		$	25,090		$	37,723
Cost of goods sold		-			8,946			22,705			31,651
Gross profit		-			3,687			2,385			6,072
Intersegment fees		347			-			(347	)		-
Depreciation and amortization (in selling, general and administrative)		(197	)		(1,006	)		(859	)		(2,062	)
Impairment of property		-			(1,069	)		-			(1,069	)
Other operating expenses		(4,768	)		(2,364	)		(4,496	)		(11,628	)
Loss from operations	$	(4,618	)	$	(752	)	$	(3,317	)	$	(8,687	)
Net loss attributable to RiceBran Technologies shareholders	$	(7,046	)	$	(770	)	$	(1,693	)	$	(9,509	)
Interest expense		(743	)		(17	)		(1,166	)		(1,926	)
Depreciation (in cost of goods sold)		-			(899	)		(1,651	)		(2,550	)
Purchases of property		1			150			6,331			6,482
Property, net, end of period		36			8,731			19,690			28,457
Goodwill, end of period		-			-			4,773			4,773
Intangible assets, net, end of period		-			1,133			1,442			2,575
Total assets, end of period		3,201			11,609			32,196			47,006

All changes in goodwill between December 31, 2013 and December 31, 2012, relate to foreign currency translation.

65

RiceBran Technologies

Notes to Consolidated Financial Statements

The following table presents revenues data by geographic area (in thousands):

	2013		2012
United States	$	12,869	$	16,177
Brazil		17,861		18,266
Other international		4,321		3,280
Total revenues	$	35,051	$	37,723

NOTE 18. FAIR VALUE MEASUREMENT

The fair value of cash and cash equivalents, accounts and other receivables and accounts payable approximates their carrying value due to their shorter maturities.  As of December 31 2013, the fair value of our USA segment debt (Level 3 measurement) is approximately $0.3 million higher than the $6.2 million carrying value of that debt, based on current market rates for similar debt with similar maturities.  The fair value of our Brazil segment debt (Level 3 measurement) approximates the carrying value of that debt based on the current market rates for similar debt with similar maturities.

Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Certain assets and liabilities are presented in the financial statements at fair value.  Assets and liabilities measured at fair value on a recurring basis include derivative warrant and conversion liabilities.  Assets and liabilities measured at fair value on a non-recurring basis may include property.

We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market:

● Level 1 – inputs include quoted prices for identical instruments and are the most observable.

● Level 2 – inputs include quoted prices for similar assets and observable inputs such as interest rates, currency exchange rates and yield curves.

● Level 3 – inputs are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability.

For instruments measured using Level 3 inputs, a reconciliation of the beginning and ending balances is disclosed.

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
December 31, 2013
Derivative warrant liabilities	(1)	$	-	$	-	$	(1,685	)	$	(1,685	)
Total liabilities at fair value		$	-	$	-	$	(1,685	)	$	(1,685	)
December 31, 2012
Derivative warrant liabilities	(1)	$	-	$	-	$	(4,520	)	$	(4,520	)
Derivative conversion liabilities	(2)		-		-		(2,199	)		(2,199	)
Total liabilities at fair value		$	-	$	-	$	(6,719	)	$	(6,719	)

(1) These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current exercise price of the warrants.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the warrant.  Additional assumptions that were used to calculate fair value follow.

66

RiceBran Technologies

Notes to Consolidated Financial Statements

	December 31, 2013		December 31, 2012
Risk-free interest rate		0.1% - 0.6%		0.1% - 0.7%
	(0.5% weighted average)		(0.6% weighted average)
Expected volatility		107%		93%

(2) These conversion liabilities were valued using a lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current conversion price of the debt.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the underlying debt.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2012
Risk-free interest rate		0.2%-0.3%
	(0.3% weighted average)
Expected volatility		93%

The following tables summarize the changes in level 3 items measured at fair value on a recurring basis (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
2013					(1	)
Derivative warrant liability	$	(4,520	)	$	(950	)	$	(575	)	$	4,360	(2)	$	(1,685	)	$	(372	)
Derivative conversion liability		(2,199	)		(80	)		(598	)		2,877	(3)		-		NA
Total Level 3 fair value	$	(6,719	)	$	(1,030	)	$	(1,173	)	$	7,237		$	(1,685	)	$	(372	)
2012
Derivative warrant liability	$	(1,296	)	$	3,048		$	(6,983	)	$	711	(4)	$	(4,520	)	$	3,320
Derivative conversion liability		-			2,372			(4,466	)		(105	) (5)		(2,199	)		2,372
Total Level 3 fair value	$	(1,296	)	$	5,420		$	(11,449	)	$	606		$	(6,719	)	$	5,692

(1) Included in change in fair value of derivative warrant and conversion liabilities in our consolidated statements of operations.

(2) Represents fair value of warrants cancelled in connection with the Exchange.

(3) Represents $2.8 million fair value of conversion liabilities when eliminated in connection with the Modification and $0.1 million as a result of conversions of debt.

(4) Represents transfers to equity as a result of a holder exercising a warrant.

(5) Represents an adjustment to loss on extinguishment as a result of issuing a replacement senior convertible debenture.

67

RiceBran Technologies

Notes to Consolidated Financial Statements

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

		As of December 31, 2013								2013 Impairment
		Level 1		Level 2		Level 3		Total		Losses
										(1)
Property, net	(1)	$	-	$	-	$	394	$	394	$	300
Property, net		$	-	$	-	$	394	$	394	$	300

		As of December 31, 2012								2012 Impairment
		Level 1		Level 2		Level 3		Total		Losses
										(1)
Property, net	(1)	$	-	$	-	$	1,058	$	1,058	$	1,069
Property, net		$	-	$	-	$	1,058	$	1,058	$	1,069

(1) Machinery and equipment not currently in use was evaluated for impairment and as a result was written down to estimated fair value in the first quarter of 2013 and the second quarter of 2012. Fair value is an estimate of net realizable value comprised of an estimate of proceeds from sale, based on an internal evaluation of market conditions, less estimated costs to sell. The estimate of net realizable value is subject to change.

NOTE 19.  H&N ACQUISITION

In January 2014, we purchased all of the outstanding shares of H&N Distribution, Inc. (H&N) for $2.0 million in cash plus promissory notes for $3.3 million with an annual interest rate of 1%.  We have the option to pay principal and accrued interest under the notes in either cash or in our common stock, however, if we issue shares to our former warrants holders upon an increase in authorized shares, under the terms of the Exchange, then we must settle any outstanding balance on the notes at that time through the issuance of shares of our common stock.  In the event we elect to pay the notes in our common stock, payment must be made by January 2015.  The number of shares issued to the former H&N shareholders under the notes will be based on the volume weighted average price of our common stock for the thirty trading days ending on the second business day immediately before our election to pay the note in shares of our common stock, but in no event shall such price be lower than $6.00 or higher than $12.00.  If we elect to pay the note in cash, we agree to make equal quarterly payments commencing on March 31, 2015 and ending on December 31, 2018.  During this payment period, the annual interest rate under the notes will increase from 1% to 5% and shall further increase to 10% after January 2016.  We also entered into a five-year employment agreement with H&N’s former chief executive officer and founder, Mark McKnight.

We have not yet finalized the fair value allocation of assets and liabilities acquired from H&N.

68

PART II

(continued)

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934 (Exchange Act) was performed as of December 31, 2013, under the supervision and with the participation of our current management, including our current Chief Executive Officer and Chief Financial Officer.  Our disclosure controls and procedures have been designed to ensure that information we are required to disclose in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2013.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act and for the assessment of the effectiveness of internal control over financial reporting.  The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.  The Company’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii) provide reasonable assurance regarding prevention, or timely detection, of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of current management, including our current Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013.  In making this assessment, management used the criteria set forth in the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) entitled “Internal Control-Integrated Framework (1992).”

Our management concluded that as of December 31, 2013, we maintained effective internal control over financial reporting based on the criteria established in the Internal Control – Integrated Framework (1992), issued by COSO.

ITEM 9B. OTHER INFORMATION

None.

69

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 of Part III is incorporated by reference to our definitive proxy statement, to be filed within 120 days of our fiscal year end, or will be included in an amendment to this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 of Part III is incorporated by reference to our definitive proxy statement, to be filed within 120 days of our fiscal year end, or will be included in an amendment to this Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required by Item 12 of Part III is incorporated by reference to our definitive proxy statement, to be filed within 120 days of our fiscal year end, or will be included in an amendment to this Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by Item 13 of Part III is incorporated by reference to our definitive proxy statement, to be filed within 120 days of our fiscal year end, or will be included in an amendment to this Form 10-K.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 of Part III is incorporated by reference to our definitive proxy statement, to be filed within 120 days of our fiscal year end, or will be included in an amendment to this Form 10-K.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

See Exhibit Index attached hereto.

The Financial Statements are included under Item 8.

70

EXHIBIT INDEX

Exhibit Number	Exhibit Description
1.01	Underwriting Agreement dated December 12, 2013, with Maxim Group, LLC, as representative of the several underwriters (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed December 18, 2013)
1.02	Warrant Agreement dated December 18, 2013, with American Stock Transfer & Trust Company. (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed December 18, 2013)
2.01	Quotas Purchase and Sale Agreement, dated January 31, 2008, with Quota Holders of Irgovel - Industria Riograndens De Oleos Begetais Ltda (incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed on August 11, 2008 and on registrant’s annual report on Form 10-K, filed on March 17, 2008)
2.02	First Amended Plan of Reorganization (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on November 2, 2010)
2.03	Second Amendment to Exhibit 1 to First Amended Plan of Reorganization (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on November 2, 2010)
3.01.1	Restated and Amended Articles of Incorporation as filed with the Secretary of State of California on December 13, 2001 (incorporated herein by reference to exhibits previously filed on registrant’s annual report on Form 10-KSB, filed on April 16, 2002)
3.01.2	Certificate of Amendment of Articles of Incorporation as filed with the Secretary of State of California on August 4, 2003 (incorporated herein by reference to exhibits previously filed on registrant’s Registration Statement on Form SB-2, filed on November 18, 2005)
3.01.3	Certificate of Amendment of Articles of Incorporation as filed with the Secretary of State of California on October 31, 2003 (incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-QSB, filed on November 19, 2003)
3.01.4	Certificate of Amendment of Articles of Incorporation as filed with the Secretary of State of California on September 29, 2005 (incorporated herein by reference to exhibits previously filed on registrant’s Registration Statement on Form SB-2, filed on November 18, 2005)
3.01.5	Certificate of Amendment of Articles of Incorporation as filed with the Secretary of State of California on August 20, 2007 (incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed on August 14, 2007)
3.01.6	Certificate of Amendment of Articles of Incorporation as filed with the Secretary of State of California on June 30, 2011 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on July 5, 2011)
3.01.7	Certificate of Amendment of Articles of Incorporation filed with the Secretary of State of California on July 12, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed August 14, 2013)
3.02	Certificate of Designation of the Rights, Preferences, and Privileges of the Series A Preferred Stock as filed with the Secretary of State of California on December 13, 2001 (incorporated herein by reference to exhibits previously filed on registrant’s Registration Statement on Form SB-2, filed on June 4, 2002)
3.03	Certificate of Determination, Preferences and Rights of Series B Convertible Preferred Stock as filed with the Secretary of State of California on October 4, 2005 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on October 4, 2005)
3.04	Certificate of Determination, Preferences and Rights of Series C Convertible Preferred Stock as filed with the Secretary of State of California on May 10, 2006 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 15, 2006)
3.05	Certificate of Determination, Preferences and Rights of the Series D Convertible Preferred Stock, as filed with the Secretary of State of California on October 17, 2008 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on October 20, 2008)
3.06	Certificate of Determination, Preferences and Rights of the Series E Convertible Preferred Stock, as filed with the Secretary of State of California on May 7, 2009 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 8, 2009)
3.07.0	Bylaws (incorporated herein by reference to exhibits previously filed on registrant’s Registration Statement on Form SB-2, filed on June 12, 2006)
3.07.2	Amendment of Bylaws effective June 19, 2007 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on June 25, 2007)
3.07.3	Amendment of Bylaws effective December 4, 2009 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on December 10, 2009)

71

3.08		Certificate of Ownership dated October 3, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on October 10, 2012)
4.05		Common Stock Warrant issued to Hillair Capital Investments L.P. (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
4.06		Form of warrant to purchase shares issued to holders of secured convertible promissory notes (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
4.07		Common Stock Warrant issued to Hillair Capital Investments L.P. (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
4.08*		Warrant Agreement by and between RiceBran Technologies and American Stock Transfer & Trust Company and Form of Warrant Certificate (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on December 18, 2013)
10.01	*	Employment Agreement with W. John Short (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on July 10, 2009)
10.02	*	First Amendment of Employment Agreement with W. John Short (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on July 10, 2009)
10.03	*	Second Amendment of Employment Agreement with W. John Short (incorporated herein by reference to previously filed Form 10-Q, filed on May 11, 2011)
10.04	*	Third Amendment to Employment Agreement with W. John Short dated July 2, 2010 (incorporated herein by reference to exhibit 10.1 previously filed on registrant’s current report on Form 8-K, filed on July 8, 2010)
10.05	*	Fourth Amendment to Employment Agreement with W. John Short dated July 15, 2011 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on July 20, 2011)
10.06	*	Employment Agreement with Jerry Dale Belt dated June 8, 2010 (incorporated herein by reference to exhibit 10.1 previously filed on registrant’s current report on Form 8-K, filed on June 8, 2010)
10.07	*	First Amendment to Employment Agreement with Jerry Dale Belt dated July 15, 2011 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on July 20, 2011)
10.08	*	Second Amendment to Employment Agreement with Jerry Dale Belt dated February 14, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s annual report on Form 10-K, filed on March 30, 2012)
10.09	*	Employment Agreement with Colin Garner dated September 1, 2010 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 5, 2011)
10.10	*	First Amendment to Employment Agreement with Colin Garner dated July 15, 2011 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on July 20, 2011)
10.11	*	2005 Equity Incentive Plan (incorporated herein by reference to exhibits previously filed on Form SB-2, filed on November 18, 2005)
10.12	*	Form of Non-Employee Director Stock Option Agreement under the 2005 Equity Incentive Plan (incorporated herein by reference to exhibits previously filed on registrant’s annual report on Form 10-K, filed on March 17, 2008)
10.13	*	Form of Stock Option Agreement for 2005 Equity Incentive Plan (incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed on May 12, 2008)
10.14	*	Form of Restricted Stock Grant Agreement for 2005 Equity Incentive Plan (incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed on August 11, 2008)
10.15		Asset Purchase Agreement with Kerry Inc. dated February 11, 2010 (incorporated herein by reference to exhibit 10.77 previously filed on registrant’s annual report on Form 10-K, filed on February 24, 2011)
10.16		Stipulation and Agreement of Settlement dated May 17, 2010 (incorporated herein by reference to exhibit 10.1 previously filed on registrant’s current report on Form 8-K, filed on May 18, 2010)
10.17	+	Nutra SA, LLC Membership Interest Purchase Agreement dated December 29, 2010 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K/A, filed on August 10, 2011)
10.18		Form of Investor Rights Agreement (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 5, 2011)
10.19		Form of Amended and Restated Limited Liability Company Agreement for Nutra SA, LLC (incorporated herein by reference to exhibits previously filed on registrant’s annual report on Form 10-K, filed on February 24, 2011)
10.20	*	2010 Equity Incentive Plan (incorporated herein by reference to previously filed Form 10-Q, filed on May 11, 2011)
10.21	*	Form of Non-Employee Director Stock Option Agreement under the 2010 Equity Incentive Plan (incorporated herein by reference to exhibits previously filed on registrant’s annual report on Form 10-K, filed on March 30, 2012)
10.22		Form of Stock Option Agreement for the 2010 Equity Incentive Plan (incorporated herein by reference to exhibits previously filed on registrant’s annual report on Form 10-K, filed on March 30, 2012)
10.23	*	Form of Restricted Stock Grant Agreement for the 2010 Equity Incentive Plan (incorporated herein by reference to exhibits previously filed on registrant’s annual report on Form 10-K, filed on March 30, 2012)
10.24		Form of Indemnification Agreement for officers and directors (incorporated by reference to previously filed Form 10-Q, filed on May 11, 2011)

72

10.25	Loan agreement between Industria Riograndens De Oleos Vegetais Ltd. and Banco do Brasil S.A. in the amount of R$2,784,838, respectively, with a Brazilian bank dated December 15, 2011, English translation from the original Portuguese (incorporated herein by reference to exhibits previously filed on registrant’s annual report on Form 10-K, filed on March 30, 2012)
10.26	Loan agreement between Industria Riograndens De Oleos Vegetais Ltd. and Banco do Brasil S.A. in the amount of R$6,676,012 dated December 15, 2011, English translation from the original Portuguese (incorporated herein by reference to exhibits previously filed on registrant’s Annual Report on Form 10-K, filed on March 30, 2012)
10.27	Securities Purchase Agreement dated January 17, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
10.28	Security Agreement dated January 17, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
10.29	Subsidiary Guarantee dated January 17, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
10.30	Form of Original Issue Discount Senior Secured Convertible Debenture Due July 1, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
10.31	Note and Warrant Purchase Agreement dated January 17, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
10.32	Form of Secured Convertible Promissory Note (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
10.33	Security Agreement dated January 17, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
10.34	Form of Subordination Agreement (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on January 23, 2012)
10.35	Securities Purchase Agreement dated July 31, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
10.36	Security Agreement dated July 31, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
10.37	Subsidiary Guarantee dated July 31, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
10.38	$1,009,200 Original Issue Discount Senior Secured Convertible Debenture Due January 1, 2014 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
10.39	$290,000 Original Issue Discount Senior Secured Convertible Debenture Due January 1, 2014 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
10.40	Securities Exchange Agreement dated July 31, 2012 with Hillair Capital Investments L.P. (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
10.41	Amendment to Loan Documents dated July 31, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
10.42	Subordination Agreement dated July 31, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on August 6, 2012)
10.43	Contribution and Subscription Agreement dated December 24, 2012 regarding Nutra SA, LLC (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on December 31, 2012)
10.44	Second Amended and Restated Limited Liability Agreement for Nutra SA, LLC dated December 24, 2012 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on December 31, 2012)
10.45	License Agreement dated March 14, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on March 20, 2013)
10.46	Membership Interest Purchase Agreement dated April 2, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on April 5, 2013)
10.47	Sublicense Agreement with RBT PRO LLC and Wilmar (Shanghai) Biotechnology Research Development Center Co., Ltd. dated April 2, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on April 5, 2013)
10.48	Sublicense Agreement with RBT PRO LLC dated April 2, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on April 5, 2013)
10.49	Cross License Agreement with Wilmar (Shanghai) Biotechnology Research Development Center Co., Ltd. dated April 2, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on April 5, 2013)
10.50	Amended and Restated Limited Liability Company Agreement for RBT PRO LLC, dated April 2, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on April 5, 2013)

73

10.51		Senior Secured Revolving Credit Facility Agreement with TCA Global Credit Master Fund, LP, dated as of April 30, 2013(incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 30, 2013)
10.52		Promissory Note issued to TCA Global Credit Master Fund, LP, dated as of April 30, 2013(incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 30, 2013)
10.53		Form of Guaranty Agreement by Subsidiary Guarantors in favor of TCA Global Credit Master Fund, LP, dated as of April 30, 2013(incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 30, 2013)
10.54		Security Agreement with TCA Global Credit Master Fund, LP, dated as of April 30, 2013(incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 30, 2013)
10.55		Form of Security Agreement, dated as of April 30, 2013, by Subsidiary Guarantors and TCA Global Credit Master Fund, LP(incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 30, 2013)
10.56		Form of Pledge with TCA Global Credit Master Fund, LP, dated as of April 30, 2013(incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 30, 2013)
10.57		Amendment and Waiver Agreement with Hillair Capital Investments L.P., dated as of May 24, 2013(incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on May 30, 2013)
10.58		Amended and Restated Security Agreement dated as of May 24, 2013(incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed August 14, 2013)
10.59		Amended and Restated Note and Warrant Purchase Agreement dated as of May 24, 2013(incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed August 14, 2013)
10.60		Restated Subordination Agreement dated as of May 24, 2013(incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed August 14, 2013)
10.61		Amendment 1 to Senior Secured Revolving Credit Facility Agreement with TCA Global Credit Master Fund, LP dated July 18, 2013(incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed August 14, 2013)
10.62		Promissory Note issued to TCA Global Credit Master Fund, LP dated July 18, 2013(incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed August 14, 2013)
10.63		Acquisition and Stock Purchase Agreement with the Shareholders of H&N Distribution, Inc. dated September 24, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on September 26, 2013)
10.64		Amendment of Investment Agreements effective as of October 31, 2013(incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on November 8, 2013)
10.65		Amendment No. 2 to Senior Secured Revolving Credit Facility Agreement with TCA Global Credit Master Fund, LP dated October 11, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed November 12, 2013)
10.66		Promissory Note issued to TCA Global Credit Master Fund, LP dated October 11, 2013 (incorporated herein by reference to exhibits previously filed on registrant’s quarterly report on Form 10-Q, filed November 12, 2013)
10.67		Underwriting Agreement dated December 12, 2013, with Maxim Group, LLC, as representative of the several underwriters. (incorporated herein by reference to exhibits previously filed on registrant’s current report on Form 8-K, filed on December 18, 2013)
21.01		List of subsidiaries.
23.1		Consent of Independent Registered Public Accounting Firm.
24.1		Power of Attorney (See signature page).
31.1		Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification by CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	@	XBRL Instance Document
101.SCH	@	XBRL Taxonomy Extension Schema Document
101.CAL	@	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	@	XBRL Taxonomy Extension Calculation Definition Linkbase Document
101.LAB	@	XBRL Taxonomy Extension Calculation Label Linkbase Document
101.PRE	@	XBRL Taxonomy Extension Calculation Presentation Linkbase Document

+ Confidential treatment granted as to certain portions

* Indicates a management contract or compensatory plan, contract or arrangement in which any Director or any Executive Officer participates.

@ 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.

74

EX-21.01

Exhibit 21.01

RiceBran Technologies

Subsidiaries of the Registrant

As of March 25, 2014

Subsidiaries of the Registrant	State or Other Jurisdiction of Incorporation
Grain Enhancement, LLC (2) (6)	Delaware limited liability company
Nutra SA, LLC (3)	Delaware limited liability company
H&N Distribution, Inc. (1)	Nevada
Industria Riograndens De Oleos Vegetais Ltda (4)	Limited liability company organized under the laws of the
	Federative Republic of Brazil
NutraCea, LLC (1)	Delaware limited liability company
RBT PRO, LLC (8)	Delaware limited liability company
Rice Rx, LLC (1)	Delaware limited liability company
Rice Science LLC (1)	Delaware limited liability company
The RiceX Company (1)	Delaware corporation
RiceX Nutrients, Inc. (5)	Montana corporation.
SRB- MERM, LLC (7)	Delaware limited liability company
SRB-LC, LLC (7)	Delaware limited liability company
SRB-MT, LLC (7)	Delaware limited liability company
SRB-WS, LLC (7)	Delaware limited liability company
SRB- IP, LLC (7)	Delaware limited liability company

(1) wholly owned subsidiary of RiceBran Technologies

(2) 47.5% interest

(3) 56.7% interest

(4) wholly owned subsidiary of Nutra SA, LLC

(5) wholly owned subsidiary of The RiceX Company

(6) inactive

(7) wholly owned subsidiary of NutraCea, LLC

(8) 50.0 % interest

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

RiceBran Technologies

Scottsdale, Arizona

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-110585 and 333-135814) of RiceBran Technologies (the “Company”) of our report dated March 31, 2014, relating to the consolidated financial statements which appears in this Form 10-K. Our report contains an explanatory paragraph regarding the Company’s ability to continue as a going concern.

/s/ BDO USA, LLP

Phoenix, Arizona

March 31, 2014

EX-24.1

Exhibit 24.1

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	RICEBRAN TECHNOLOGIES
Date: March 31, 2014	By:	/s/ W. John Short
		W. John Short
		Director and Chief Executive Officer

Power of Attorney

Each person whose signature appears below constitutes and appoints W. John Short, true and lawful attorney-in-fact, with the power of substitution, for him/her in any and all capacities, to sign amendments to this Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.

Signature	Title	Date
Principal Executive Officer:
/s/ W. John Short	Director and Chief Executive Officer	March 31, 2014
W. John Short
Principal Financial Officer and Principal Accounting Officer
/s/ J. Dale Belt	Chief Financial Officer and Secretary	March 31, 2014
Jerry Dale Belt
Additional Directors:
/s/ David Goldman	Director	March 31, 2014
David Goldman
/s/ Baruch Halpern	Director	March 31, 2014
Baruch Halpern
/s/ Henk W. Hoogenkamp	Director	March 31, 2014
Henk W. Hoogenkamp
/s/ Robert S. Kopriva	Director	March 31, 2014
Robert S. Kopriva
/s/ Robert C. Schweitzer	Director and Chairman	March 31, 2014
Robert C. Schweitzer
/s/ Peter A. Woog	Director	March 31, 2014
Peter A. Woog

EX-31.1

Exhibit 31.1

CERTIFICATION

I, W. John Short, Chief Executive Officer of RiceBran Technologies, certify that:

1) I have reviewed this annual report on Form 10-K of RiceBran Technologies, a California corporation;

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(s) 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; and

5) The registrant's other certifying officer(s) 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 functions):

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 internal control over financial reporting.

Dated:  March 31, 2014

/s/ W. John Short

Name: W. John Short

Title: Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Jerry Dale Belt, Chief Financial Officer of RiceBran Technologies, certify that:

1) I have reviewed this annual report on Form 10-K of RiceBran Technologies, a California corporation;

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(s) 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; and

5) The registrant's other certifying officer(s) 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 functions):

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 internal control over financial reporting.

Dated:  March 31, 2014

/s/ J. Dale Belt

Name: Jerry Dale Belt

Title: Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF

TITLE 18, UNITED STATES CODE)

In connection with the Annual Report of RiceBran Technologies (the Company) on Form 10-K for the year ending December 31, 2013, as filed with the Securities and Exchange Commission on the date hereof (the Report), we, W. John Short., Chief Executive Officer of the Company, and Jerry Dale Belt, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

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 the Company.

Dated:  March 31, 2014

By:	/s/ W. John Short
W. John Short
Chief Executive Officer
By:	/s/ J. Dale Belt
Jerry Dale Belt
Chief Financial Officer

XML

LIQUIDITY, MANAGEMENT PLANS AND GENERAL BUSINESS (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013 Segment Location
LIQUIDITY, MANAGEMENT PLANS AND GENERAL BUSINESS [Abstract]
Proceeds from issuance of stock	$ 12.0
Number of reportable segments		2
Number of locations in California		2
Number of locations in Louisiana		1
Number of locations in Lake Charles, Louisiana		1
Revenue from Human Food Products [Member] | USA Segment Revenues [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)		55.00%
Revenue from Animal Nutrition Products [Member] | USA Segment Revenues [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)		45.00%
DRB Products [Member] | Brazil Segment Revenue [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)		55.00%
RBO Products [Member] | Brazil Segment Revenue [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)		45.00%

XML

RELATED PARTY TRANSACTIONS (Details) (USD $)	1 Months Ended	12 Months Ended				3 Months Ended		12 Months Ended										1 Months Ended	12 Months Ended	1 Months Ended		1 Months Ended	12 Months Ended			1 Months Ended	12 Months Ended				1 Months Ended		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Sep. 30, 2013	Dec. 31, 2013 Shareholders non authorization rate [Member]	Jun. 30, 2013 Convertible Subordinated Debt [Member]	Dec. 31, 2013 Convertible Subordinated Debt [Member]	Dec. 31, 2013 Convertible Subordinated Debt [Member] First Issuance 30.00 per share [Member] January 2012 [Member]		Dec. 31, 2013 Convertible Subordinated Debt [Member] Second Issuance at 20.00 per share [Member] January 2012 [Member]		Dec. 31, 2013 Convertible Subordinated Debt [Member] Second Issuance at 20.00 per share [Member] May 2012 [Member]		Dec. 31, 2013 Convertible Subordinated Debt [Member] Third issuance 14.00 per share [Member] July 2012 [Member]		Dec. 31, 2013 Convertible Subordinated Debt [Member] Third issuance 14.00 per share [Member] August 2012 [Member]		Jan. 31, 2012 Director - Baruch Halpern [Member]	Dec. 31, 2013 Director - Baruch Halpern [Member]	Jan. 31, 2012 Director - Baruch Halpern [Member] Convertible Subordinated Debt [Member]	Dec. 31, 2011 Director - Baruch Halpern [Member] Convertible Subordinated Debt [Member]	Jan. 31, 2012 Director - Mr. Hoogenkamp [Member]	Dec. 31, 2013 Director - Mr. Hoogenkamp [Member]	Dec. 31, 2012 Director - Mr. Hoogenkamp [Member]	Apr. 30, 2012 Director - Mr. Hoogenkamp [Member]	Jan. 31, 2012 Other Officers and Directors [Member]	Dec. 31, 2013 Other Officers and Directors [Member] Note	Dec. 31, 2012 Other Officers and Directors [Member]	Dec. 31, 2013 HC and Halpern Entities [Member]	Dec. 31, 2012 HC and Halpern Entities [Member]	Apr. 30, 2013 W. John Short, CEO and director [Member]	Jan. 31, 2012 W. John Short, CEO and director [Member]	Dec. 31, 2013 Minimum [Member] Director - Baruch Halpern [Member]	Dec. 31, 2013 Maximum [Member] Director - Baruch Halpern [Member]
Related Party Transaction [Line Items]
Obligated to pay success fees (in hundredths)																																	2.50%	5.00%
Additional consideration paid on certain transactions (in hundredths)																																	2.50%	5.00%
Summary of transactional warrants listed below under terms of financial advisor agreement with HC [Abstract]
Date of Warrants								Jan. 31, 2012		Jan. 31, 2012		May 31, 2012		Jul. 31, 2012		Aug. 31, 2012
Number of Shares Under Warrants (in shares)	8,709	8,709						1,250		5,563		63		711		268
Exercise Price of Warrant								Exercisable immediately at $30.00 per share	[1],[2]	Exercisable immediately at $20.00 per share	[1],[2]	Exercisable immediately at $20.00 per share	[1],[2]	Exercisable immediately at $14.00 per share	[2]	Exercisable immediately at $14.00 per share	[2]
Share to be issued for cancelled warrants upon Shareholder authorization.	75,377	75,377
Fair value at time of exchange	$ 300,000	$ 300,000																	$ 2,900,000
Stated annual interest rate (in hundredths)	5.00%	5.00%			10.00%
Exercise price per warrant (in dollars per share)								$ 30.00		$ 20.00		$ 20.00		$ 14.00		$ 14.00
Expiration Date of Warrant								Jan. 31, 2017		Jan. 31, 2017		May 31, 2017		Jul. 31, 2017		Aug. 31, 2017
Notice period of warrant conversion		61 days
Minimum percentages of common stock considered as beneficial ownership interest (in hundredths)		4.99%
Exercise price of warrants (in dollars per share)	$ 6.55	$ 6.55					$ 14.00
Summary of other transactions and balances with HC and Halpern Entities [Abstract]
Success fees earned by HC under financial advisor agreement payable in cash																													0	164,000
Proceeds received from Mr. Halpern and Halpern Entities upon issuance of convertible debt and related warrants																													306,000	213,000
Interest earned by Halpern entities on convertible debt																													288,000	302,000
Payments to HC relevant to HC's class 6 general unsecured creditor claim																													0	256,000
Gain on extinguishment of debt						300,000													400,000
Subordinated convertible notes owned				100,000															2,600,000
Warrants canceled during the period																			185,714
Accounts payable or accrued expenses																													100,000	100,000
Warrants issued (in shares)																		25,833									234
Weighted average exercise price per warrant (in dollars per share)																		$ 20.00	$ 24.00	$ 16.00
Warrants granted in period, fair value																		100,000
Number of Securities Called by Warrants (in shares)	1,714,286	1,714,286																		178,572	125,000
Common stock issued for vendor services, (in shares)																						5,000
Consulting service fees																							100,000	100,000
Options vested (in shares)																									5,000
Vesting Period																							Vest in twelve equal monthly installments
Proceeds from issuance of subordinated long-term debt																										100,000					25,000	50,000
Interest paid maximum		$ 2,537,000	$ 1,651,000																								$ 1,000,000	$ 1,000,000
Number of subordinated convertible notes																											3
Issue of shares of common stock (in shares)	1,714,286																		634,679								82

[1] In 2013, in connection with the Exchange, these warrants were cancelled in exchange for 75,377 shares of our common stock (with a fair value of $0.3 million at time of the Exchange), however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock. If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the replacement notes will increase from 5% to 10%.

[2] As a result of the July 31, 2012, issuances of convertible debt and related warrants, the exercise prices on these transactional warrants were reduced under the full ratchet anti-dilution provisions included in the transactional warrants, to $14.00 per share and the number of underlying shares increased to equal the number of original underlying shares times the initial exercise price divided by $14.00 per share.

XML

EQUITY AND SHARE-BASED COMPENSATION, EMPLOYEE COMPENSATION AND PRICE RANGES (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense, options	$ 538	$ 923
Summary of information related to outstanding and exercisable warrants [Abstract]
Shares Under Warrants - Outstanding (in shares)	2,406,282
Weighted Average Remaining Contractual Life (Years) - Outstanding	4 years 6 months
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 6.33
Shares Under Warrants - Exercisable (in shares)	2,320,567
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 6.32
Weighted Average Remaining Contractual Life - Exercisable	4 years 4 months 24 days
Equity Warrant [Member] | $6.55 [Member]
Summary of information related to outstanding and exercisable warrants [Abstract]
Exercise price range, upper range limit (in dollars per share)	$ 6.55
Shares Under Warrants - Outstanding (in shares)	1,800,001
Weighted Average Remaining Contractual Life (Years) - Outstanding	5 years
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 6.55
Shares Under Warrants - Exercisable (in shares)	1,714,286
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 6.55
Weighted Average Remaining Contractual Life - Exercisable	5 years
Equity Warrant [Member] | $ 16.00 to $16.80 [Member]
Summary of information related to outstanding and exercisable warrants [Abstract]
Exercise price range, lower range limit (in dollars per share)	$ 16.00
Exercise price range, upper range limit (in dollars per share)	$ 16.80
Shares Under Warrants - Outstanding (in shares)	12,004
Weighted Average Remaining Contractual Life (Years) - Outstanding	4 years 6 months
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 16.40
Shares Under Warrants - Exercisable (in shares)	12,004
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 16.40
Weighted Average Remaining Contractual Life - Exercisable	4 years 6 months
Equity Warrant [Member] | $46.80 [Member]
Summary of information related to outstanding and exercisable warrants [Abstract]
Exercise price range, upper range limit (in dollars per share)	$ 46.80
Shares Under Warrants - Outstanding (in shares)	3,029
Weighted Average Remaining Contractual Life (Years) - Outstanding	2 years 10 months 24 days
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 46.80
Shares Under Warrants - Exercisable (in shares)	3,029
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 46.80
Weighted Average Remaining Contractual Life - Exercisable	2 years 10 months 24 days
Liability Warrant [Member] | $5.24 [Member]
Summary of information related to outstanding and exercisable warrants [Abstract]
Exercise price range, upper range limit (in dollars per share)	$ 5.24
Shares Under Warrants - Outstanding (in shares)	591,248
Weighted Average Remaining Contractual Life (Years) - Outstanding	2 years 10 months 24 days
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 5.24
Shares Under Warrants - Exercisable (in shares)	591,248
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 5.24
Weighted Average Remaining Contractual Life - Exercisable	2 years 10 months 24 days
$ 6.00-$16.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, lower range limit (in dollars per share)	$ 6.00
Exercise price range, upper range limit (in dollars per share)	$ 16.00
Shares Under Options - Outstanding (in shares)	135,989
Weighted Average Remaining Contractual Life (Years) - Outstanding	7 years
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 15.82
Shares Under Options - Exercisable (in shares)	114,636
Weighted Average Remaining Contractual Life (Years) - Exercisable	6 years 9 months 18 days
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 16.00
$28.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, upper range limit (in dollars per share)	$ 28.00
Shares Under Options - Outstanding (in shares)	1,457
Weighted Average Remaining Contractual Life (Years) - Outstanding	7 years 2 months 12 days
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 28.00
Shares Under Options - Exercisable (in shares)	1,457
Weighted Average Remaining Contractual Life (Years) - Exercisable	8 years 2 months 12 days
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 28.00
$40.00[Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, upper range limit (in dollars per share)	$ 40.00
Shares Under Options - Outstanding (in shares)	23,991
Weighted Average Remaining Contractual Life (Years) - Outstanding	4 years 9 months 18 days
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 40.00
Shares Under Options - Exercisable (in shares)	23,991
Weighted Average Remaining Contractual Life (Years) - Exercisable	4 years 9 months 18 days
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 40.00
$60.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, upper range limit (in dollars per share)	$ 60.00
Shares Under Options - Outstanding (in shares)	15,000
Weighted Average Remaining Contractual Life (Years) - Outstanding	1 year
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 60.00
Shares Under Options - Exercisable (in shares)	15,000
Weighted Average Remaining Contractual Life (Years) - Exercisable	1 year
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 60.00
$74.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, upper range limit (in dollars per share)	$ 74.00
Shares Under Options - Outstanding (in shares)	2,500
Weighted Average Remaining Contractual Life (Years) - Outstanding	7 years 2 months 12 days
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 74.00
Shares Under Options - Exercisable (in shares)	1,428
Weighted Average Remaining Contractual Life (Years) - Exercisable	7 years 2 months 12 days
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 74.00
$242.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, upper range limit (in dollars per share)	$ 242.00
Shares Under Options - Outstanding (in shares)	500
Weighted Average Remaining Contractual Life (Years) - Outstanding	2 years
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 242.00
Shares Under Options - Exercisable (in shares)	500
Weighted Average Remaining Contractual Life (Years) - Exercisable	2 years
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 242.00
$16.00 to $242.00 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price range, lower range limit (in dollars per share)	$ 16.00
Exercise price range, upper range limit (in dollars per share)	$ 242.00
Shares Under Options - Outstanding (in shares)	179,437
Weighted Average Remaining Contractual Life (Years) - Outstanding	6 years 2 months 12 days
Weighted Average Exercise Price - Outstanding (in dollars per share)	$ 24.28
Shares Under Options - Exercisable (in shares)	157,012
Weighted Average Remaining Contractual Life (Years) - Exercisable	5 years 10 months 24 days
Weighted Average Exercise Price - Exercisable (in dollars per share)	$ 25.23
Consultants [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense, options	16	42
Directors [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense, options	262	285
Employees [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense, options	127	152
Executive Officers [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense, options	$ 133	$ 444

XML

SEGMENT INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Segment	Dec. 31, 2012
SEGMENT INFORMATION [Abstract]
Number of reportable segments	2
Segment information identified and reconciliation of segment information to total consolidated information [Abstract]
Revenues	$ 35,051	$ 37,723
Cost of goods sold	31,106	31,651
Gross profit	3,945	6,072
Intersegment fees		0
Depreciation and amortization (in selling, general and administrative)	(1,249)	(2,062)
Impairment of property	(300)	(1,069)
Other operating expense	(12,366)	(11,628)
Loss from operations	(9,970)	(8,687)
Net loss attributable to RiceBran Technologies shareholders	(15,021)	(9,509)
Interest expense	(3,934)	(1,926)
Depreciation (in costs of goods sold)	(2,799)	(2,550)
Purchases of property	3,119	6,482
Segment information for selected balance sheet accounts [Abstract]
Property, net, end of period	24,958	28,457
Goodwill, end of period	4,139	4,773
Intangible assets, net, end of period	1,417	2,575
Total assets, end of period	44,578	47,006
Revenues from External Customers by Geographical Area [Line Items]
Total revenues	35,051	37,723
United States [Member]
Revenues from External Customers by Geographical Area [Line Items]
Total revenues	12,869	16,177
Brazil [Member]
Revenues from External Customers by Geographical Area [Line Items]
Total revenues	17,861	18,266
Other International [Member]
Revenues from External Customers by Geographical Area [Line Items]
Total revenues	4,321	3,280
Corporate [Member]
Segment information identified and reconciliation of segment information to total consolidated information [Abstract]
Revenues	0	0
Cost of goods sold	0	0
Gross profit	0	0
Intersegment fees		347
Depreciation and amortization (in selling, general and administrative)	(24)	(197)
Impairment of property	0	0
Other operating expense	(5,918)	(4,768)
Loss from operations	(5,942)	(4,618)
Net loss attributable to RiceBran Technologies shareholders	(12,418)	(7,046)
Interest expense	(1,950)	(743)
Depreciation (in costs of goods sold)	0	0
Purchases of property	21	1
Segment information for selected balance sheet accounts [Abstract]
Property, net, end of period	55	36
Goodwill, end of period	0	0
Intangible assets, net, end of period	0	0
Total assets, end of period	6,039	3,201
USA [Member]
Segment information identified and reconciliation of segment information to total consolidated information [Abstract]
Revenues	12,023	12,633
Cost of goods sold	9,078	8,946
Gross profit	2,945	3,687
Intersegment fees		0
Depreciation and amortization (in selling, general and administrative)	(469)	(1,006)
Impairment of property	(300)	(1,069)
Other operating expense	(2,006)	(2,364)
Loss from operations	170	(752)
Net loss attributable to RiceBran Technologies shareholders	170	(770)
Interest expense	0	(17)
Depreciation (in costs of goods sold)	(926)	(899)
Purchases of property	191	150
Segment information for selected balance sheet accounts [Abstract]
Property, net, end of period	7,231	8,731
Goodwill, end of period	0	0
Intangible assets, net, end of period	745	1,133
Total assets, end of period	9,796	11,609
Brazil [Member]
Segment information identified and reconciliation of segment information to total consolidated information [Abstract]
Revenues	23,028	25,090
Cost of goods sold	22,028	22,705
Gross profit	1,000	2,385
Intersegment fees		(347)
Depreciation and amortization (in selling, general and administrative)	(756)	(859)
Impairment of property	0	0
Other operating expense	(4,442)	(4,496)
Loss from operations	(4,198)	(3,317)
Net loss attributable to RiceBran Technologies shareholders	(2,773)	(1,693)
Interest expense	(1,984)	(1,166)
Depreciation (in costs of goods sold)	(1,873)	(1,651)
Purchases of property	2,907	6,331
Segment information for selected balance sheet accounts [Abstract]
Property, net, end of period	17,672	19,690
Goodwill, end of period	4,139	4,773
Intangible assets, net, end of period	672	1,442
Total assets, end of period	$ 28,743	$ 32,196

XML

DEBT (Details)	1 Months Ended	12 Months Ended			3 Months Ended	12 Months Ended							3 Months Ended		12 Months Ended							3 Months Ended			3 Months Ended	12 Months Ended		12 Months Ended					12 Months Ended					12 Months Ended								12 Months Ended							3 Months Ended	12 Months Ended				9 Months Ended			12 Months Ended		0 Months Ended	1 Months Ended		12 Months Ended			12 Months Ended				12 Months Ended		12 Months Ended
	Dec. 31, 2013 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Sep. 30, 2013 USD ($)	Mar. 31, 2013 Investor purchased subordinated notes [Member] USD ($)	Dec. 31, 2013 Investor purchased subordinated notes [Member] USD ($)	Nov. 13, 2013 Investor purchased subordinated notes [Member]	Dec. 31, 2013 USA Segment [Member] USD ($)	Dec. 31, 2012 USA Segment [Member] USD ($)	Dec. 31, 2013 Brazil Segment [Member] USD ($)	Dec. 31, 2012 Brazil Segment [Member] USD ($)	Dec. 31, 2011 Brazil Segment [Member] BRL	Jun. 30, 2013 Senior Convertible Debentures [Member] USD ($)	Mar. 31, 2013 Senior Convertible Debentures [Member] USD ($)	Dec. 31, 2013 Senior Convertible Debentures [Member] USD ($)	Dec. 31, 2013 Senior Convertible Debentures [Member] Holder 1 [Member] USD ($)	Dec. 31, 2013 Senior Convertible Debentures [Member] Holder 2 [Member] USD ($)	Dec. 31, 2013 Senior Convertible Debentures [Member] USA Segment [Member] USD ($)	Dec. 31, 2012 Senior Convertible Debentures [Member] USA Segment [Member] USD ($)	Dec. 31, 2013 Subordinated Convertible Notes, Net [Member] USA Segment [Member] USD ($)	Dec. 31, 2012 Subordinated Convertible Notes, Net [Member] USA Segment [Member] USD ($)	Jun. 30, 2013 Factoring Agreement [Member] USD ($)	Dec. 31, 2013 Other [Member] USA Segment [Member] USD ($)	Dec. 31, 2012 Other [Member] USA Segment [Member] USD ($)	Jun. 30, 2013 Senior Revolving Note [Member] USD ($)	Dec. 31, 2013 Senior Revolving Note [Member] USD ($) Installments	Nov. 13, 2013 Senior Revolving Note [Member]	Dec. 31, 2013 Senior Revolving Note [Member] Minimum [Member] USD ($)	Dec. 31, 2013 Senior Revolving Note [Member] Maximum [Member] USD ($)	Dec. 31, 2013 Senior Revolving Note [Member] TCA Global Credit Master Fund [Member] USD ($)	Dec. 31, 2013 Senior Revolving Note [Member] USA Segment [Member] USD ($)	Dec. 31, 2012 Senior Revolving Note [Member] USA Segment [Member] USD ($)	Dec. 31, 2013 Working Capital Lines of Credit [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2012 Working Capital Lines of Credit [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2013 Working Capital Lines of Credit [Member] Brazil Segment [Member] Minimum [Member]	Dec. 31, 2013 Working Capital Lines of Credit [Member] Brazil Segment [Member] Maximum [Member]	Dec. 31, 2013 Working Capital Lines of Credit [Member] Brazil Segment [Member] Average [Member]	Dec. 31, 2013 Capital Expansion Loans [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2013 Capital Expansion Loans [Member] Brazil Segment [Member] BRL	Dec. 31, 2012 Capital Expansion Loans [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2013 Equipment Financing [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2012 Equipment Financing [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2013 Equipment Financing [Member] Brazil Segment [Member] Minimum [Member]	Dec. 31, 2013 Equipment Financing [Member] Brazil Segment [Member] Maximum [Member]	Dec. 31, 2013 Equipment Financing [Member] Brazil Segment [Member] Average [Member]	Dec. 31, 2013 Advances on Export Letter of Credit [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2012 Advances on Export Letter of Credit [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2013 Advances on Export Letter of Credit [Member] Brazil Segment [Member] Minimum [Member]	Dec. 31, 2013 Advances on Export Letter of Credit [Member] Brazil Segment [Member] Maximum [Member]	Dec. 31, 2013 Advances on Export Letter of Credit [Member] Brazil Segment [Member] Average [Member]	Dec. 31, 2013 Special Tax Programs [Member] Brazil Segment [Member] USD ($)	Dec. 31, 2012 Special Tax Programs [Member] Brazil Segment [Member] USD ($)	Jun. 30, 2013 Subordinated Convertible Notes and Warrants [Member] USD ($)	Dec. 31, 2013 Subordinated Convertible Notes and Warrants [Member] USD ($)	Dec. 31, 2013 Subordinated Convertible Notes and Warrants [Member] April 2013 [Member] USD ($)	Dec. 31, 2013 Subordinated Convertible Notes and Warrants [Member] April 2013 [Member] Minimum [Member]	Dec. 31, 2013 Subordinated Convertible Notes and Warrants [Member] April 2013 [Member] Maximum [Member]	Sep. 30, 2013 Subordinated Convertible Notes and Warrants [Member] USA Segment [Member]	Dec. 31, 2013 Subordinated notes, net [Member] USA Segment [Member] USD ($)	Dec. 31, 2012 Subordinated notes, net [Member] USA Segment [Member] USD ($)	Dec. 31, 2013 Third Credit Agreement [Member] Brazil Segment [Member] USD ($)	Jul. 31, 2012 Third Credit Agreement [Member] Brazil Segment [Member] BRL	Nov. 13, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] USD ($)	Jul. 31, 2012 2013 Subordinated Notes and Subordinated Convertible Notes [Member] USD ($)	Jan. 31, 2012 2013 Subordinated Notes and Subordinated Convertible Notes [Member] USD ($)	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] USD ($)	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] July 2012 [Member] USD ($)	Sep. 30, 2012 2013 Subordinated Notes and Subordinated Convertible Notes [Member] July 2012 [Member] USD ($)	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] May 2012 [Member] Amendment in July 2012 [Member]	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] January and May 2012 [Member] USD ($)	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] January and May 2012 [Member] Amendment in July 2012 [Member] USD ($)	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] January and May 2012 [Member] Financial Advisor [Member] USD ($)	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] July and August 2012 [Member] USD ($) Investor	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] July and August 2012 [Member] Financial Advisor [Member] USD ($)	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] Halpern Entities [Member] USD ($)	Dec. 31, 2013 2013 Subordinated Notes and Subordinated Convertible Notes [Member] Halpern Entities [Member] Replacement [Member]
Debt Instrument [Line Items]
Total debt	$ 19,169,000	$ 19,169,000	$ 19,584,000					$ 6,250,000	$ 5,117,000	$ 12,919,000	$ 14,467,000							$ 0	$ 1,048,000	$ 0	$ 4,041,000		$ 0	$ 28,000							$ 1,988,000	$ 0	$ 3,213,000	$ 2,227,000				$ 4,795,000		$ 5,555,000	$ 174,000	$ 201,000				$ 2,386,000	$ 3,953,000				$ 2,351,000	$ 2,531,000							$ 4,262,000	$ 0
Current portion	8,250,000	8,250,000	8,003,000
Long-term portion	10,919,000	10,919,000	11,581,000
Required future minimum payments on debt [Abstract]
2014	8,250,000	8,250,000						1,988,000		6,262,000
2015	1,767,000	1,767,000						0		1,767,000
2016	7,567,000	7,567,000						6,535,000		1,032,000
2017	1,005,000	1,005,000						0		1,005,000
2018	955,000	955,000						0		955,000
Thereafter	1,898,000	1,898,000						0		1,898,000
Discount	(2,273,000)	(2,273,000)						(2,273,000)		0																																																							(100,000)
Total debt	19,169,000	19,169,000						6,250,000		12,919,000					200,000																																								538,000																	2,500,000		100,000
Maximum borrowing capacity												9,500,000													8,000,000													4,000,000
Maximum outstanding borrowings																									2,800,000
Stated annual interest rate (in hundredths)	5.00%	5.00%					5.00%																		12.00%										10.40%	60.00%	21.70%	6.50%	6.50%				13.50%	17.80%	15.00%			3.90%	6.00%	5.50%	9.00%				10.00%						5.50%		5.00%							10.00%
Potential annual interest rate if shareholders do not approve increase in the authorized number of shares outstanding by July 1, 2014 (in hundredths)							10.00%																				10.00%
Fees under agreement (in hundredths)																									7.00%
Minimum cumulative repayments, March 2014																										1,100,000
Minimum cumulative repayments, June 2014																										1,800,000
Minimum cumulative repayments, September 2014																										2,700,000
Withholding to collections (in hundredths)																										20.00%
Average outstanding borrowings																									500,000	1,000,000
Gross proceeds from Lines of Credit																										2,800,000				2,400,000
Amount received																										2,500,000
Repayment of debt													300,000									100,000				400,000
Value of additional unit purchased													400,000			400,000										900,000
Issue of shares of common stock (in shares)	1,714,286																									37,260
Market value of common stock issued		7,617,000															200,000									500,000																											100,000
Number of shares issued under warrant (in shares)	8,709	8,709																												12,000																									38,400
Exercise price per warrant (in dollars per share)																	$ 16.00											$ 16.00	$ 16.80																																									$ 24.00	$ 16.00
Transaction closing costs															300,000											1,000,000																											600,000
Transaction closing costs, cash expenses															10,000											400,000
Transaction closing costs, Amortized to interest expense																										600,000
Guaranteed minimum value of stock issued in connection with the three tranches																										400,000
Number of tranches related to TCA																										3
Value of shares recorded in temporary equity																	100,000									500,000
Maximum amount of capital expenditures allowed per year																										300,000
Outstanding principal amount of debentures converted													300,000	100,000
Number of common stock (in shares)													21,429	7,000		5,000	3,026
Conversion price (in dollars per share)													$ 14.00	$ 14.00
Maximum loss recognized on the transaction		(2,891,000)	(4,941,000)										100,000	100,000																																																	2,300,000
Carrying amount of debt					100,000								400,000	100,000
Subordinated Convertible debt allocated to equity						400,000
Shares issuable on conversion (in shares)															18,571
Principal amount of debt with maturity extension															300,000	1,100,000	300,000
Amount at closing of equity in excess of modification of notes																																																															7,000,000
Warrants to purchase shares of common stock (in shares)	1,714,286	1,714,286																																																													496,060
Warrants issued to note holders for antidilution protection																																																															441,395
Shares exchanged to purchase shares of common stock (in shares)							134,250																																																								1,554,734
Principal Amount of Notes	19,169,000	19,169,000						6,250,000		12,919,000					200,000																																								538,000																	2,500,000		100,000
Creditor's Debt Conversion Right (in dollars per share)																																																							$ 14.00
Stated Annual Interest Rate on Debt (in hundredths)	5.00%	5.00%					5.00%																		12.00%										10.40%	60.00%	21.70%	6.50%	6.50%				13.50%	17.80%	15.00%			3.90%	6.00%	5.50%	9.00%				10.00%						5.50%		5.00%							10.00%
Maturity Date of Debt						Jul. 31, 2016																											Dec. 31, 2015					Dec. 31, 2021	Dec. 31, 2021							May 31, 2014										Jul. 01, 2015	Jul. 01, 2016				Jul. 31, 2019		Jul. 31, 2016						Jul. 31, 2015
Number of Shares Under Warrants (in shares)	8,709	8,709																												12,000																									38,400
Exercisable Price of Warrant																																																							Exercisable immediately at $16.00 per share
Expiration Date of Warrant																																																							May 01, 2018
Fair value of conversion features																																																					500,000
Fair value of liability warrants																	10,000																																				500,000
Proceeds from issuance of the convertible notes and related warrants																																																						500,000										200,000	600,000
Increase in note principle under PIK election		100,000
Increase in shares of common stock underlying notes (in shares)	8,709	8,709
Proceeds from other debt																																																																	800,000	2,400,000				1,800,000			900,000
Debt discounts	2,273,000	2,273,000						2,273,000		0																																																							100,000
Debenture replacement description																																																																	In the third quarter of 2012, this January 2012 debenture was exchanged for a July 2012 debenture with a stated principal amount of $1.0 million, representing the original principal amount plus interest which will accrue through the replacement debenture’s January 2014 maturity. In July 2012, we also issued a new senior convertible debenture and related warrant and received $0.2 million in proceeds, net of financing costs.
Fair value of warrants issued																										500,000
Required number of days notice prior to conversion or exercise																																																										61 days
Minimum beneficial ownership interest to be required to give notice prior to conversion or exercise (in hundredths)																																																										4.99%
Stated principal amount				100,000																																																															1,000,000	1,000,000		4,400,000			1,000,000		2,500,000
Contract value of old notes repaid																																																																						2,300,000
Cash investment exchanged																																																																						100,000
Terms of conversion feature															In May 2013, we entered into agreements to allow each holder of existing subordinated convertible notes and warrants to invest in additional notes and related warrants and which provided that each holder making an additional investment (i) receive 0.0125 shares of our common stock for each dollar invested and (ii) agree to extend the maturity date for all of their notes to July 2016.  Further, each holder of outstanding convertible notes could elect (PIK Election), in lieu of receiving cash interest payments otherwise payable though June 2014 on their existing convertible notes to receive (i) an increase in the number of shares of common stock underlying their notes (ii) an equity warrant to purchase shares of our common stock and (ii) 0.0125 shares of our common stock for each dollar of interest otherwise payable through June 2014.  Holders making an additional investment were deemed under the agreement to have made a PIK Election.
Debt covenant description																										During the term of the TCA agreement, the Corporate and USA segments may not without TCA’s consent or approval, among other things, (i) enter into new debt (ii) make any new investments, except capital expenditures less than $0.3 million per year, (iii) issue or redeem stock, (iv) declare or pay dividends or make other distributions to shareholders, and (v) make loans and distributions of assets to any persons, including affiliates.
Amendment fee removed																										100,000
Number of investors																																																																									4
Available for working capital																																							1,500,000
Proceeds allocated for convertible debt and warrants		3,600,000
Convertible debt effective interest rate (in hundredths)		81.10%																																																																									20.90%	25.10%
Amount borrowed																																																													$ 700,000	1,700,000
Borrowing capacity, percentage of collateral, lower range limit (in hundredths)																																	30.00%
Borrowing capacity, percentage of collateral, upper range limit (in hundredths)																																	110.00%

XML

DEBT (Tables)

12 Months Ended

Dec. 31, 2013

DEBT [Abstract]

Current and long-term debt

The following table summarizes current and long-term portions of debt (in thousands):

	2013		2012
Corporate segment:
Senior revolving note, net	$	1,988	$	-
Senior convertible debentures, net		-		1,048
Subordinated convertible notes, net		-		4,041
Subordinated notes, net		4,262		-
Other		-		28
		6,250		5,117
Brazil segment:
Capital expansion loans		4,795		5,555
Equipment financing		174		201
Working capital lines of credit		3,213		2,227
Advances on export letters of credit		2,386		3,953
Special tax programs		2,351		2,531
		12,919		14,467
Total debt		19,169		19,584
Current portion		8,250		8,003
Long-term portion	$	10,919	$	11,581

Required future minimum payments on debt

Required future minimum payments on our debt as of December 31, 2013, follow (in thousands).

	Corporate Segment			Brazil Segment		Total
2014	$	1,988		$	6,262	$	8,250
2015		-			1,767		1,767
2016		6,535			1,032		7,567
2017		-			1,005		1,005
2018		-			955		955
Thereafter		-			1,898		1,898
		8,523			12,919		21,442
Discount		(2,273	)		-		(2,273	)
Total debt	$	6,250		$	12,919	$	19,169

Convertible notes and debenture information

In the second quarter of 2013, we issued subordinated convertible notes and related warrants, which are described in the chart below.

Issuance	Principal Amount of Notes (in thousands)		Creditor's Debt Conversion Right	Stated Annual Interest Rate on Debt			Maturity Date of Debt	Number of Shares Under Warrant		Exercise Price of Warrant	Expiration Date of Warrant
Subordinated Convertible Notes and Warrants	$	538	Convertible immediately at $14.00 per share		10	%	July 2015 or July 2016		38,400	Exercisable immediately at $16.00 per share	July 2017 or May 2018

XML

FAIR VALUE MEASUREMENT, Unobservable Input Reconciliation (Details) (Recurring [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012
Changes in level 3 items measured at fair value on a recurring basis [Roll Forward]
Fair Value as of Beginning of Period	$ (6,719)		$ (1,296)
Total Realized and Unrealized Gains (Losses)	(1,030)	[1]	5,420	[1]
Issuance of New Instruments	(1,173)		(11,449)
Net Transfers (Into) Out of Level 3	7,237		606
Fair Value, at End of Period	(1,685)		(6,719)
Change in Unrealized Gains (Losses) on Instruments Still Held	(372)		5,692
Derivative warrant liability [Member]
Changes in level 3 items measured at fair value on a recurring basis [Roll Forward]
Fair Value as of Beginning of Period	(4,520)		(1,296)
Total Realized and Unrealized Gains (Losses)	(950)	[1]	3,048	[1]
Issuance of New Instruments	(575)		(6,983)
Net Transfers (Into) Out of Level 3	4,360	[2]	711	[3]
Fair Value, at End of Period	(1,685)		(4,520)
Change in Unrealized Gains (Losses) on Instruments Still Held	(372)		3,320
Derivative conversion liability [Member]
Changes in level 3 items measured at fair value on a recurring basis [Roll Forward]
Fair Value as of Beginning of Period	(2,199)		0
Total Realized and Unrealized Gains (Losses)	(80)	[1]	2,372	[1]
Issuance of New Instruments	(598)		(4,466)
Net Transfers (Into) Out of Level 3	2,877	[4]	(105)	[5]
Fair Value, at End of Period	0		(2,199)
Change in Unrealized Gains (Losses) on Instruments Still Held			$ 2,372

[1] Included in change in fair value of derivative warrant and conversion liabilities in our consolidated statements of operations.

[2] Represents fair value of warrants when cancelled in connection with the Exchange.

[3] Represents transfers to equity as a result of a holder exercising a warrant.

[4] Represents $2.8 million fair value of conversion liabilities when eliminated in connection with the Exchange and $0.1 million as a result of conversions of debt.

[5] Represents an adjustment to loss on extinguishment as a result of issuing a replacement senior convertible debenture.

XML

FAIR VALUE MEASUREMENT

12 Months Ended

Dec. 31, 2013

FAIR VALUE MEASUREMENT [Abstract]

FAIR VALUE MEASUREMENT

NOTE 18. FAIR VALUE MEASUREMENT

The fair value of cash and cash equivalents, accounts and other receivables and accounts payable approximates their carrying value due to their shorter maturities.  As of December 31 2013, the fair value of our USA segment debt (Level 3 measurement) is approximately $0.3 million higher than the $6.2 million carrying value of that debt, based on current market rates for similar debt with similar maturities.  The fair value of our Brazil segment debt (Level 3 measurement) approximates the carrying value of that debt based on the current market rates for similar debt with similar maturities.

Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Certain assets and liabilities are presented in the financial statements at fair value.  Assets and liabilities measured at fair value on a recurring basis include derivative warrant and conversion liabilities.  Assets and liabilities measured at fair value on a non-recurring basis may include property.

We assess the inputs used to measure fair value using a three-tier hierarchy based on the extent to which inputs used in measuring fair value are observable in the market:

● Level 1 – inputs include quoted prices for identical instruments and are the most observable.

● Level 2 – inputs include quoted prices for similar assets and observable inputs such as interest rates, currency exchange rates and yield curves.

● Level 3 – inputs are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability.

For instruments measured using Level 3 inputs, a reconciliation of the beginning and ending balances is disclosed.

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
December 31, 2013
Derivative warrant liabilities	(1)	$	-	$	-	$	(1,685	)	$	(1,685	)
Total liabilities at fair value		$	-	$	-	$	(1,685	)	$	(1,685	)
December 31, 2012
Derivative warrant liabilities	(1)	$	-	$	-	$	(4,520	)	$	(4,520	)
Derivative conversion liabilities	(2)		-		-		(2,199	)		(2,199	)
Total liabilities at fair value		$	-	$	-	$	(6,719	)	$	(6,719	)

(1) These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current exercise price of the warrants.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the warrant.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2013		December 31, 2012
Risk-free interest rate		0.1% - 0.6%		0.1% - 0.7%
	(0.5% weighted average)		(0.6% weighted average)
Expected volatility		107%		93%

(2) These conversion liabilities were valued using a lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current conversion price of the debt.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the underlying debt.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2012
Risk-free interest rate		0.2%-0.3%
	(0.3% weighted average)
Expected volatility		93%

The following tables summarize the changes in level 3 items measured at fair value on a recurring basis (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
2013					(1	)
Derivative warrant liability	$	(4,520	)	$	(950	)	$	(575	)	$	4,360	(2)	$	(1,685	)	$	(372	)
Derivative conversion liability		(2,199	)		(80	)		(598	)		2,877	(3)		-		NA
Total Level 3 fair value	$	(6,719	)	$	(1,030	)	$	(1,173	)	$	7,237		$	(1,685	)	$	(372	)
2012
Derivative warrant liability	$	(1,296	)	$	3,048		$	(6,983	)	$	711	(4)	$	(4,520	)	$	3,320
Derivative conversion liability		-			2,372			(4,466	)		(105	) (5)		(2,199	)		2,372
Total Level 3 fair value	$	(1,296	)	$	5,420		$	(11,449	)	$	606		$	(6,719	)	$	5,692

(1) Included in change in fair value of derivative warrant and conversion liabilities in our consolidated statements of operations.

(2) Represents fair value of warrants cancelled in connection with the Exchange.

(3) Represents $2.8 million fair value of conversion liabilities when eliminated in connection with the Modification and $0.1 million as a result of conversions of debt.

(4) Represents transfers to equity as a result of a holder exercising a warrant.

(5) Represents an adjustment to loss on extinguishment as a result of issuing a replacement senior convertible debenture.

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

		As of December 31, 2013								2013 Impairment
		Level 1		Level 2		Level 3		Total		Losses
										(1)
Property, net	(1)	$	-	$	-	$	394	$	394	$	300
Property, net		$	-	$	-	$	394	$	394	$	300

		As of December 31, 2012								2012 Impairment
		Level 1		Level 2		Level 3		Total		Losses
										(1)
Property, net	(1)	$	-	$	-	$	1,058	$	1,058	$	1,069
Property, net		$	-	$	-	$	1,058	$	1,058	$	1,069

(1) Machinery and equipment not currently in use was evaluated for impairment and as a result was written down to estimated fair value in the first quarter of 2013 and the second quarter of 2012. Fair value is an estimate of net realizable value comprised of an estimate of proceeds from sale, based on an internal evaluation of market conditions, less estimated costs to sell. The estimate of net realizable value is subject to change.

XML

PRE-PETITION LIABILITIES (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended
	Jan. 31, 2012
PRE-PETITION LIABILITIES [Abstract]
Bankruptcy claims, amount paid to settle claims	$ 1.6

XML

INVENTORIES (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
INVENTORIES [Abstract]
Finished goods	$ 1,194	$ 1,146
Work in process	546	330
Raw materials	441	255
Packaging supplies	249	263
Total inventories	$ 2,430	$ 1,994

XML

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2013

SEGMENT INFORMATION [Abstract]

Segment information identified and reconciliations of segment information to total consolidated information

The table below presents segment information for the years identified and provides a reconciliation of segment information to total consolidated information (in thousands).

	2013
	Corporate			USA			Brazil			Consolidated
Revenues	$	-		$	12,023		$	23,028		$	35,051
Cost of goods sold		-			9,078			22,028			31,106
Gross profit		-			2,945			1,000			3,945
Depreciation and amortization (in selling, general and administrative)		(24	)		(469	)		(756	)		(1,249	)
Impairment of property		-			(300	)		-			(300	)
Other operating expenses		(5,918	)		(2,006	)		(4,442	)		(12,366	)
Income (loss) from operations	$	(5,942	)	$	170		$	(4,198	)	$	(9,970	)
Net income (loss) attributable to RiceBran Technologies shareholders	$	(12,418	)	$	170		$	(2,773	)	$	(15,021	)
Interest expense		(1,950	)		-			(1,984	)		(3,934	)
Depreciation (in cost of goods sold)		-			(926	)		(1,873	)		(2,799	)
Purchases of property		21			191			2,907			3,119
Property, net, end of period		55			7,231			17,672			24,958
Goodwill, end of period		-			-			4,139			4,139
Intangible assets, net, end of period		-			745			672			1,417
Total assets, end of period		6,039			9,796			28,743			44,578

	2012
	Corporate			USA			Brazil			Consolidated
Revenues	$	-		$	12,633		$	25,090		$	37,723
Cost of goods sold		-			8,946			22,705			31,651
Gross profit		-			3,687			2,385			6,072
Intersegment fees		347			-			(347	)		-
Depreciation and amortization (in selling, general and administrative)		(197	)		(1,006	)		(859	)		(2,062	)
Impairment of property		-			(1,069	)		-			(1,069	)
Other operating expenses		(4,768	)		(2,364	)		(4,496	)		(11,628	)
Loss from operations	$	(4,618	)	$	(752	)	$	(3,317	)	$	(8,687	)
Net loss attributable to RiceBran Technologies shareholders	$	(7,046	)	$	(770	)	$	(1,693	)	$	(9,509	)
Interest expense		(743	)		(17	)		(1,166	)		(1,926	)
Depreciation (in cost of goods sold)		-			(899	)		(1,651	)		(2,550	)
Purchases of property		1			150			6,331			6,482
Property, net, end of period		36			8,731			19,690			28,457
Goodwill, end of period		-			-			4,773			4,773
Intangible assets, net, end of period		-			1,133			1,442			2,575
Total assets, end of period		3,201			11,609			32,196			47,006

Revenues by geographic area

The following table presents revenues data by geographic area (in thousands):

	2013		2012
United States	$	12,869	$	16,177
Brazil		17,861		18,266
Other international		4,321		3,280
Total revenues	$	35,051	$	37,723

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended						1 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Positive Outcome of Litigation [Member]	Dec. 31, 2013 Sellers [Member]	Dec. 31, 2012 Sellers [Member]	Feb. 06, 2009 Sellers [Member]	Jan. 31, 2012 Diabco Life Sciences, LLC [Member]	Jul. 31, 2013 Diabco Life Sciences, LLC [Member]	Dec. 31, 2013 Pending Litigation [Member] Former Irgovel Stockholder David Resyng [Member]
Leases [Abstract]
Remaining term of lease	21 years
Future minimum payments under operating lease commitments [Abstract]
2014	$ 0.3
2015	0.3
2016	0.3
2017	0.1
2018	0.1
Thereafter	1.1
Lease expense	0.5	0.4
Loss Contingencies [Line Items]
Damages sought by plaintiff								0.9	3.0
Amount of second installment on purchase agreement being withheld						1.0
Amount held in escrow				1.9	1.9	2.0
Amount of escrow liability in accrued expenses				1.4	0
Pre-acquisition contingencies				0.7
Escrow balance available to settle remaining contingencies				1.4
Parent Company contribution to Nutra SA (in hundredths)	90.00%
Amount of damages arising as a result of breach of promissory note							0.5
Escrow contingency threshold	1.0
Gain Contingencies [Line Items]
Judgment Amount			$ 1.0

XML

EQUITY AND SHARE-BASED COMPENSATION (Details) (USD $)	1 Months Ended		12 Months Ended		1 Months Ended	3 Months Ended		3 Months Ended	12 Months Ended						1 Months Ended	12 Months Ended						3 Months Ended	12 Months Ended										12 Months Ended		1 Months Ended		12 Months Ended
	Dec. 31, 2013	Oct. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Jan. 31, 2014 Subsequent Event [Member]	Mar. 31, 2014 Convertible Debt [Member] Subsequent Event [Member]	Mar. 25, 2014 Convertible Debt [Member] Subsequent Event [Member]	Mar. 31, 2014 Convertible Debt [Member] Subsequent Event [Member] Nutra SA [Member]	Dec. 31, 2013 Options [Member]	Dec. 31, 2012 Options [Member]	Dec. 31, 2011 Options [Member]	Dec. 31, 2012 Options [Member] Retiring Director [Member]	Dec. 31, 2012 Options [Member] Each Non-employee Directors [Member]	Dec. 31, 2012 Options [Member] Executive Officers [Member] Officer	Apr. 30, 2013 Options [Member] Director Serving on Strategic Committee [Member] Director	Dec. 31, 2013 Options [Member] Employees and Directors [Member]	Dec. 31, 2012 Options [Member] Employees and Directors [Member]	Dec. 31, 2013 Options [Member] Consultants [Member]	Dec. 31, 2012 Options [Member] Consultants [Member]	Dec. 31, 2012 Options [Member] Minimum [Member] Executive Officers [Member]	Dec. 31, 2012 Options [Member] Maximum [Member] Executive Officers [Member]	Mar. 31, 2012 Warrants [Member]	Dec. 31, 2013 Warrants [Member]	Dec. 31, 2012 Warrants [Member]	Dec. 31, 2011 Warrants [Member]	Dec. 31, 2013 Warrants [Member] Equity Warrant [Member]	Dec. 31, 2012 Warrants [Member] Equity Warrant [Member]	Dec. 31, 2011 Warrants [Member] Equity Warrant [Member]	Dec. 31, 2013 Warrants [Member] Liability Warrant [Member]	Dec. 31, 2012 Warrants [Member] Liability Warrant [Member]	Dec. 31, 2011 Warrants [Member] Liability Warrant [Member]	Apr. 30, 2013 2010 Plan [Member] Each Non-employee Directors [Member]	Dec. 31, 2013 2010 Plan [Member] Options [Member]	Dec. 31, 2012 2010 Plan [Member] Options [Member]	Apr. 30, 2013 2010 Plan [Member] Options [Member] Each Non-employee Directors [Member] Director	Jan. 31, 2013 2010 Plan [Member] Options [Member] Each Non-employee Directors [Member] Director	Dec. 31, 2013 2005 Plan [Member] Options [Member]	Dec. 31, 2013 Other Plans [Member] Options [Member]
Schedule of Share-based Compensation Arrangements by Share-based Payment Award [Line Items]
Reverse Stock Split		200 to 1
Common stock, shares authorized (in shares)	6,000,000		6,000,000	2,500,000
Stock issuance price (in dollars per share)	$ 5.24		$ 5.24		$ 5.24					$ 14.00
Number of shares issued under warrant (in shares)	1,714,286		1,714,286		162,586		1,399,614
Value of common stock per underlying share (in dollars per share)	$ 0.01		$ 0.01		$ 0.01
Proceeds from offering	$ 7,600,000					$ 4,600,000		$ 1,000,000
Underwriting discount and commission	700,000
Offering expense	1,400,000
Exercise price of warrants (in dollars per share)	$ 6.55		$ 6.55
Warrants issued fees and services (in shares)	87,815				8,130
Shares Under Options, Outstanding [Roll Forward]
Outstanding at beginning of period (in shares)									169,254	192,944						158,304	180,494	10,950	12,450
Granted or issued (in shares)									40,000	29,060					1,250	38,750	28,060	1,250	1,000																3,750	1,250
Impact of anti-dilution clauses (in shares)									0	0
Impact of amendment (in shares)									0	0
Exercised (in shares)									0	0						0	0	0	0
Forfeited, expired or cancelled (in shares)									(29,817)	(52,750)						(27,317)	(50,250)	(2,500)	(2,500)
Outstanding at end of period (in shares)									179,437	169,254	192,944					169,737	158,304	9,700	10,950
Exercisable at end of period (in shares)									157,012							148,698		8,314
Options, Weighted Average Exercise Price [Roll Forward]
Outstanding at beginning of period (in dollars per share)									$ 32.00	$ 54.00						$ 26.00	$ 48.00	$ 106.00	$ 152.00
Granted or issued (in dollars per share)									$ 15.38	$ 30.00					$ 16.00	$ 15.36	$ 26.00	$ 16.00	$ 16.00																$ 16.00	$ 16.00
Forfeited, expired or cancelled (in dollars per share)									$ 50.58	$ 68.00						$ 27.75	$ 58.00	$ 300.00	$ 266.00
Outstanding at end of period (in dollars per share)									$ 24.28	$ 32.00	$ 54.00					$ 23.13	$ 26.00	$ 44.45	$ 106.00
Exercisable at end of period (in dollars per share)									$ 25.23							$ 24.31		$ 41.72
Options, Additional Disclosures [Abstract]
Outstanding, weighted average remaining contractual life									6 years 2 months 12 days	6 years 3 months 18 days	6 years 3 months 18 days
Exercisable, weighted average remaining contractual life									5 years 10 months 24 days
Shares Under Warrants [Roll Forward]
Outstanding at beginning of period (in shares)																						233,947	806,769	233,947		5,756	17,372		801,013	216,575
Granted or issued (in shares)																							1,859,111	423,782		1,820,711	0		38,400	423,782
Impact of anti-dilution clauses (in shares)																							385,292	518,720		0	0		385,292	518,720
Impact of amendment (in shares)																							(496,061)	78,215		(8,711)	0		(487,350)	78,215
Exercised (in shares)																							0	(25,015)		0	0		0	(25,015)
Forfeited, expired or cancelled (in shares)																							(148,829)	(422,880)		(2,722)	(11,616)		(146,107)	(411,264)
Outstanding at end of period (in shares)																							2,406,282	806,769	233,947	1,815,034	5,756	17,372	591,248	801,013	216,575
Exercisable at end of period (in shares)																							2,320,567			1,729,319			591,254
Equity and Liability Warrants Outstanding, Weighted Average Exercise Price [Roll Forward]
Outstanding at beginning of period (in dollars per share)																						$ 208.00	$ 24.00	$ 208.00		$ 90.00	$ 60.00		$ 24.00	$ 220.00
Granted (in dollars per share)																							$ 6.85	$ 20.00		$ 6.66	$ 0		$ 16.00	$ 20.00
Impact of anti-dilution clauses (in dollars per share)																										$ 0	$ 0
Impact of amendment (in dollars per share)																										$ 0	$ 0
Exercised (in dollars per share)																							$ 0	$ 20.00		$ 0	$ 0			$ 20.00
Forfeited, expired or cancelled (in dollars per share)																							$ 66.92	$ 86.00		$ 137.60	$ 44.00		$ 65.60	$ 88.00
Outstanding at end of period (in dollars per share)																							$ 6.33	$ 24.00	$ 208.00	$ 6.69	$ 90.00	$ 60.00	$ 5.24	$ 24.00	$ 220.00
Exercisable at end of period (in dollars per share)																							$ 6.32			$ 6.69			$ 5.24
Equity and Liability Warrants, Additional Disclosures [Abstract]
Outstanding, weighted average remaining contractual life																							4 years 6 months	3 years 6 months	1 year 8 months 12 days	5 years	2 years 4 months 24 days	3 years 6 months	2 years 10 months 24 days	3 years 6 months	1 year 6 months
Exercisable, weighted average remaining contractual life																							4 years 4 months 24 days			5 years			2 years 10 months 24 days
Initially reserved (in shares)																																1,250	125,000
Number of shares reserved after increment (in shares)																																5,000
Number of non-employee directors																																			5	5
Vesting period (in installments)															12 months																				9 months	12 months
Expiration date															Apr. 30, 2018																				Apr. 30, 2023	Jan. 31, 2023
Number of directors on Strategic Committee															2
Status of Shares Reserved for Issuance [Abstract]
Annual increase in number of reserved shares (in hundredths)									5.00%
Additionally reserved - board action (in shares)																																		40,000
Terms of award, maximum																																	10 years				10 years	10 years
Total outstanding options awarded to current and former directors, employees and consultants										17,384
Weighted-average assumptions used in valuing stock options [Abstract]
Fair value of options granted (in dollars per share)			$ 11.18	$ 20.00
Assumed minimum volatility (in hundredths)			119.20%	104.40%
Assumed maximum volatility (in hundredths)			122.30%	113.30%
Weighted average volatility (in hundredths)			121.10%	109.20%
Assumed risk free interest rate minimum (in hundredths)			0.70%	0.20%
Assumed risk free interest rate maximum (in hundredths)			1.40%	1.00%
Weighted average risk free interest rate (in hundredths)			0.90%	0.90%
Expected life of options (in years)			6 years 2 months 12 days	6 years 1 month 6 days
Expected dividends			0	0
Forfeiture rate (in hundredths)			5.00%	5.00%
Shares issued (in shares)	1,714,286				162,586							15,022	6,090	4,263
Vested shares surrendered for stock issued (in shares)												23,710
Fair value of stock options												300,000
Fair value of stock issued												300,000
Exercised (in dollars per share)													$ 28.00	$ 24.00
Grant date fair value of options equaled cash fees													200,000	100,000
Number of executive officers receiving stock options in lieu of a portion of their compensation														3
Percentage of compensation paid in stock options instead of in cash (in hundredths)																				83.30%	90.00%
Modified stock options (in shares)									108,588
Pre-modification exercise price (in dollars per share)									$ 38.00
Revised exercise price (in dollars per share)									$ 16.00
Difference in fair value of the options before and after the modification									100,000
Difference in unrecognized compensation as a result of the modification, maximum									100,000
Purchase of common stock liability warrants (in shares)																						25,016
Shares issued (in shares)																						7,764
Amount transferred into fair value of the liability warrant				700,000
Convertible notes issued						$ 4,900,000
Warrants to purchase shares of common stock (in shares)	1,714,286		1,714,286		162,586		1,399,614
Stated annual interest rate (in hundredths)	5.00%		5.00%				5.00%

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation – The consolidated financial statements include the accounts of RiceBran Technologies and all subsidiaries in which we have a controlling interest.  All significant inter-company accounts and transactions are eliminated in consolidation.  Noncontrolling interests in our subsidiaries are recorded net of tax as net earnings (loss) attributable to noncontrolling interests.

Foreign Currencies - The consolidated financial statements are presented in our reporting currency, U.S. Dollars.  The functional currency for Irgovel is the Brazilian Real.  The balance sheet of Irgovel is translated into U.S. Dollars using the exchange rate in effect at the balance sheet date.  Irgovel’s revenues and expenses are translated using the average exchange rates in effect during the period.  Translation differences are recorded in accumulated other comprehensive income (loss) as foreign currency translation.  Gains or losses on transactions denominated in a currency other than the subsidiaries’ functional currency which arise as a result of changes in foreign exchange rates are recorded as foreign exchange gain or loss in the statements of operations.

Cash and Cash Equivalents – We consider all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents.  As of December 31, 2013, we maintained our cash, including restricted cash, and cash equivalents, with major banks.  We maintain cash in bank accounts in amounts which at times may exceed federally insured limits.  We have not experienced any losses on such accounts.

Accounts Receivable and Allowance for Doubtful Accounts – Accounts receivable represent amounts receivable on trade accounts.  The allowance for doubtful accounts is based on our assessment of the collectability of customer accounts and the aging of accounts receivable.  We analyze the aging of customer accounts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts.  From period to period, differences in judgments or estimates utilized may result in material differences in the amount and timing of the provision for doubtful accounts.  We periodically evaluate our credit policy to ensure that the customers are worthy of terms and support our business plans.

Inventories - Inventories are stated at the lower of cost or market, with cost determined by the first-in, first-out method.  In the USA segment, we employ a full absorption procedure using standard cost techniques.  The standards are customarily reviewed and adjusted annually so that they are materially consistent with actual purchase and production costs.  In the Brazil segment we use actual average purchase and production costs.  Provisions for potentially obsolete or slow moving inventory are made based upon our analysis of inventory levels, historical obsolescence and future sales forecasts.

Long-Lived Assets, Intangible Assets and Goodwill – Long-lived assets, consisting primarily of property, intangible assets, and goodwill, comprise a significant portion of our total assets.  Property is stated at cost less accumulated depreciation.  Depreciation is computed on the straight-line basis over the estimated useful lives.  Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized.  Gains or losses on the sale of property and equipment are reflected in the statements of operations.  Intangible assets are stated at cost less accumulated amortization.

We test goodwill and other indefinite-lived intangible assets for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value.  Our annual qualitative or quantitative assessments involve determining an estimate of the fair value of our reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill and other indefinite-lived intangible assets exists.  A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test.  The first step of a quantitative goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired, and, thus, the second step of the quantitative impairment test is unnecessary.  If the carrying amount of a reporting unit exceeds its fair value, the second step of the quantitative goodwill impairment test is performed to measure the amount of impairment loss, if any.  Fair values are derived based on an evaluation of past and expected future performance of our reporting units.

In assessing the recoverability of goodwill, we make estimates and assumptions about sales, operating margin, terminal growth rates and discount rates based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data.  While our annual impairment testing as of December 31, 2013, supported the carrying amount of goodwill, we may be required to reevaluate the carrying amount in future periods, thus utilizing different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an impairment has occurred.

We review our long-lived assets, which include intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss is recognized when the undiscounted future cash flows estimated to be generated by the asset to be held and used are not sufficient to recover the unamortized balance of the asset.  An impairment loss is recognized based on the difference between the carrying values and estimated fair value.  The estimated fair value is determined based on either the discounted future cash flows or other appropriate fair value methods with the amount of any such deficiency charged to operations in the current year.  Estimates of future cash flows are based on many factors, including current operating results, expected market trends and competitive influences.  We also evaluate the amortization periods assigned to its intangible assets to determine whether events or changes in circumstances warrant revised estimates of useful lives. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value, less estimated costs to sell.

Revenue Recognition – We recognize revenue for product sales when title and risk of loss pass to our customers, generally upon shipment for USA segment customers and Brazil segment international customers and upon customer receipt for Brazil segment domestic customers.  Each transaction is evaluated to determine if all of the following four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the selling price is fixed and determinable; and (iv) collectability is reasonably assured.  If any of the above criteria cannot be satisfied then such a transaction is not recorded as revenue, or is recorded as deferred revenue and recognized only when the sales cycle is complete and payment is either received or becomes reasonably assured.  Changes in judgments and estimates regarding the application of the above mentioned four criteria might result in a change in the timing or amount of revenue recognized by such transactions.

We make provisions for estimated returns, discounts and price adjustments when they are reasonably estimable.  Revenues on the statements of operations are net of provisions for estimated returns, routine sales discounts, volume allowances and adjustments.  Revenues on the statements of operations are also net of taxes collected from customers and remitted to governmental authorities.

Amounts billed to a customer in a sale transaction related to shipping costs are reported as revenues and the related costs incurred for shipping are included in cost of goods sold.

Research and Development – Research and development expenses include internal and external costs.  Internal costs include salaries and employment related expenses.  External expenses consist of costs associated with product development.  All such costs are charged to expense in the period they are incurred.

Derivative Conversion Liabilities – We had certain convertible debt outstanding that contained antidilution clauses.  Under these clauses, we were required to lower the conversion price on the convertible debt based on certain issuances of our common stock, awards of options to employees, additional issuance of warrants and/or other convertible instruments below certain conversion prices.  We accounted for the conversion liabilities associated with these antidilution clauses as liability instruments, separate from the host debt.  The conversion liabilities were classified as debt on our consolidated balance sheets.  These conversion liabilities were valued using the lattice model each reporting period and the resultant change in fair value was recorded in the statements of operations in other income (expense).

Derivative Warrant Liabilities –We have certain warrant agreements in effect that contain antidilution clauses.  Under these clauses, we may be required to lower the exercise price on these warrants and issue additional warrants based on future issuances of our common stock and awards of options to employees, additional issuance of warrants and/or other convertible instruments below certain exercise prices.  We account for the warrants with these antidilution clauses as liability instruments.  These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations in other income (expense).

Share-Based Compensation – Share-based compensation expense for employees is calculated at the grant date using the Black-Scholes-Merton valuation model based on awards ultimately expected to vest, reduced for estimated forfeitures, and expensed on a straight-line basis over the service period of the grant.  Forfeitures are estimated at the time of grant based on our historical forfeiture experience and are revised in subsequent periods if actual forfeitures differ from those estimates.  The Black-Scholes-Merton option pricing model requires us to estimate key assumptions such as expected life, volatility, risk-free interest rates and dividend yield to determine the fair value of share-based awards, based on both historical information and management’s judgment regarding market factors and trends.  We treat options granted to employees of foreign subsidiaries as equity options.  We will use alternative valuation models if grants have characteristics that cannot be reasonably estimated using the Black-Scholes-Merton model.

We account for share-based compensation awards granted to non-employees and consultants by determining the fair value of the awards granted at either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured.  Generally we value options granted to non-employees and consultants using the Black-Scholes-Merton valuation model.  If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of (i) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.  The expense associated with stock awards issued to consultants or other third parties are recognized over the term of service.  In the event services are terminated early or we require no specific future performance, the entire amount is expensed.  The value is re-measured each reporting period over the requisite service period.

Income Taxes – We account for income taxes by recording a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carryforwards.  Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for financial reporting and tax purposes during the year.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards.  A valuation allowance is established, when necessary, to reduce that deferred tax asset if it is more likely than not that the related tax benefits will not be realized.

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Because of the uncertainty inherent in such estimates, actual results could differ from those estimates.

Reclassifications – Certain reclassifications have been made to amounts reported for the prior year to achieve consistent presentation with the current year.

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are applicable to us which could potentially have a material impact on our financial statements.

XML

CONCENTRATION OF CREDIT RISK (Details) (Customer Concentration Risk [Member])	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
One Customer [Member] | Revenue [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	9.00%	10.00%
One Customer [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	10.00%	9.00%
Second customer [Member] | Revenue [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	5.00%	11.00%
Second customer [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	16.00%	30.00%
Third customer [Member] | Revenue [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	9.00%	5.00%
Third customer [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	4.00%	3.00%
Fourth customer [Member] | Revenue [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	6.00%	7.00%
Fourth customer [Member] | Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration risk, percentage (in hundredths)	0.00%	9.00%

XML

REDEEMABLE NONCONTROLLING INTEREST IN NUTRA SA (Tables)

12 Months Ended

Dec. 31, 2013

REDEEMABLE NONCONTROLLING INTEREST IN NUTRA SA [Abstract]

Summary of the carrying amounts included in consolidated balance sheets

A summary of the carrying amounts of Nutra SA balances included in our consolidated balance sheets follows (in thousands).

	December 31,
	2013		2012
Cash and cash equivalents	$	1,686	$	562
Other current assets (restricted $1,967 and $2,505)		4,546		5,675
Property, net (restricted $4,969 and  $5,757)		17,672		19,690
Goodwill and intangibles, net		4,812		6,215
Other noncurrent assets		27		54
Total assets	$	28,743	$	32,196
Current liabilities	$	6,514	$	5,141
Current portion of long-term debt (nonrecourse)		6,262		7,013
Long-term debt, less current portion (nonrecourse)		6,658		7,454
Other noncurrent liabilities		-		1,871
Total liabilities	$	19,434	$	21,479

Summary of changes in redeemable noncontrolling interest

A summary of changes in redeemable noncontrolling interest in Nutra SA follows (in thousands):

	2013			2012
Redeemable noncontrolling interest in Nutra SA, beginning of period	$	9,262		$	9,918
Investors' interest in net loss of Nutra SA		(2,619	)		(1,627	)
Investors' interest in accumulated other comprehensive income of Nutra SA		(666	)		(529	)
Investors' purchase of additional units		1,200			1,500
Redeemable noncontrolling interest in Nutra SA, end of period	$	7,177		$	9,262

XML

LOSS PER SHARE (EPS) (Tables)

12 Months Ended

Dec. 31, 2013

LOSS PER SHARE (EPS) [Abstract]

Reconciliation of EPS computations

Below are reconciliations of the numerators and denominators in the EPS computations.

	2013			2012
NUMERATOR (in thousands):
Basic and diluted - net loss attributable to RiceBran Technologies shareholders	$	(15,021	)	$	(9,509	)
DENOMINATOR:
Basic EPS - weighted average number of shares outstanding		1,160,196			1,023,412
Effect of dilutive securities outstanding		-			-
Diluted EPS - weighted average number of shares outstanding		1,160,196			1,023,412
Number of shares of common stock which could be purchased with weighted average outstanding securities not included in diluted EPS because effect would be antidilutive-Stock options (average exercise price of $26.90 and $48.00 )		179,493			191,187
Warrants (average exercise price of $17.71 and $62.00)		809,311			736,753
Convertible notes (average conversion price of $14.00 and $16.90)		414,683			334,709

XML

FAIR VALUE MEASUREMENT (Details) (USD $)	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of convertible debt's excess value over carrying value	$ 300,000
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Total liabilities at fair value	6,200,000
Fair values by input hierarchy of items measured at fair value on a nonrecurring basis [Abstract]
Impairment losses	300,000		1,069,000
Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Total liabilities at fair value	(1,685,000)		(6,719,000)
Nonrecurring [Member]
Fair values by input hierarchy of items measured at fair value on a nonrecurring basis [Abstract]
Property, end	394,000	[1]	1,058,000	[1]
Impairment losses	300,000	[1]	1,069,000	[1]
Level 1 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Total liabilities at fair value	0		0
Level 1 [Member] | Nonrecurring [Member]
Fair values by input hierarchy of items measured at fair value on a nonrecurring basis [Abstract]
Property, end	0	[1]	0	[1]
Level 2 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Total liabilities at fair value	0		0
Level 2 [Member] | Nonrecurring [Member]
Fair values by input hierarchy of items measured at fair value on a nonrecurring basis [Abstract]
Property, end	0	[1]	0	[1]
Level 3 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Total liabilities at fair value	(1,685,000)		(6,719,000)
Level 3 [Member] | Nonrecurring [Member]
Fair values by input hierarchy of items measured at fair value on a nonrecurring basis [Abstract]
Property, end	394,000	[1]	1,058,000	[1]
Derivative warrant liability [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Derivative warrant liabilities	(1,685,000)	[2]	(4,520,000)	[2]
Fair value assumptions [Abstract]
Expected volatility (in hundredths)	107.00%		93.00%
Derivative warrant liability [Member] | Recurring [Member] | Minimum [Member]
Fair value assumptions [Abstract]
Risk-free interest rate (in hundredths)	0.10%		0.10%
Derivative warrant liability [Member] | Recurring [Member] | Maximum [Member]
Fair value assumptions [Abstract]
Risk-free interest rate (in hundredths)	0.60%		0.70%
Derivative warrant liability [Member] | Recurring [Member] | Weighted Average [Member]
Fair value assumptions [Abstract]
Risk-free interest rate (in hundredths)	0.50%		0.60%
Derivative warrant liability [Member] | Level 1 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Derivative warrant liabilities	0	[2]	0	[2]
Derivative warrant liability [Member] | Level 2 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Derivative warrant liabilities	0	[2]	0	[2]
Derivative warrant liability [Member] | Level 3 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Derivative warrant liabilities	(1,685,000)	[2]	(4,520,000)	[2]
Derivative conversion liability [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Derivative warrant liabilities			(2,199,000)	[3]
Fair value assumptions [Abstract]
Expected volatility (in hundredths)			93.00%
Derivative conversion liability [Member] | Recurring [Member] | Minimum [Member]
Fair value assumptions [Abstract]
Risk-free interest rate (in hundredths)			0.20%
Derivative conversion liability [Member] | Recurring [Member] | Maximum [Member]
Fair value assumptions [Abstract]
Risk-free interest rate (in hundredths)			0.30%
Derivative conversion liability [Member] | Recurring [Member] | Weighted Average [Member]
Fair value assumptions [Abstract]
Risk-free interest rate (in hundredths)			0.30%
Derivative conversion liability [Member] | Level 1 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Derivative warrant liabilities			0	[3]
Derivative conversion liability [Member] | Level 2 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Derivative warrant liabilities			0	[3]
Derivative conversion liability [Member] | Level 3 [Member] | Recurring [Member]
Fair values by input hierarchy of items measured at fair value on a recurring basis [Abstract]
Derivative warrant liabilities			$ (2,199,000)	[3]

[1] Machinery and equipment not currently in use was evaluated for impairment and as a result was written down to estimated fair value in the first quarter of 2013 and the second quarter of 2012. Fair value is an estimate of net realizable value comprised of an estimate of proceeds from sale, based on an internal evaluation of market conditions, less estimated costs to sell. The estimate of net realizable value is subject to change.

[2] These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations. The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current exercise price of the warrants. The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the warrant. Additional assumptions that were used to calculate fair value follow. December 31, 2013 December 31, 2012 Risk-free interest rate 0.1% - 0.6% 0.1% - 0.7% (0.5% weighted average) (0.6% weighted average) Expected volatility 107% 93%

[3] These conversion liabilities are valued using a lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations. The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current conversion price of the debt. The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the underlying debt. Additional assumptions that were used to calculate fair value follow. December 31, 2012 Risk-free interest rate 0.2-0.3% (0.3% weighted average) Expected volatility 93%

XML

PROPERTY (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2009
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 39,228,000	$ 40,890,000
Less accumulated depreciation	14,270,000	12,433,000
Property, net	24,958,000	28,457,000
Impairment of property, plant and equipment	300,000	1,069,000
Lake Charles Facility [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	3,800,000
Impairment of property, plant and equipment	300,000	1,100,000	2,300,000
Land [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	382,000	403,000
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	553,000	358,000
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Furniture and Fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Plant [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	14,582,000	14,362,000
Plant [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	25 years
Plant [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	30 years
Computer and Software [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	1,437,000	1,407,000
Computer and Software [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Computer and Software [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	200,000	189,000
Leasehold Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Leasehold Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	7 years
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	14,557,000	15,053,000
Machinery and Equipment [Member] | Lake Charles Facility [Member]
Property, Plant and Equipment [Line Items]
Property, net	400,000
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	10 years
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	7,517,000	9,118,000
Idled Facility [Member] | Lake Charles Facility [Member]
Property, Plant and Equipment [Line Items]
Net book value of idled facility	$ 1,000,000

XML

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2013

INVENTORIES [Abstract]

Inventories

Inventories are composed of the following (in thousands):

	As of December 31,
	2013		2012
Finished goods	$	1,194	$	1,146
Work in process		546		330
Raw materials		441		255
Packaging supplies		249		263
Total inventories	$	2,430	$	1,994

XML

PROPERTY (Tables)

12 Months Ended

Dec. 31, 2013

PROPERTY [Abstract]

Property

Property consists of the following (in thousands):

	As of December 31,
	2013		2012		Estimated Useful Lives
Land	$	382	$	403
Furniture and fixtures		553		358	5-10 years
Plant		14,582		14,362	25-30 years, or life of lease
Computer and software		1,437		1,407	3-5 years
Leasehold improvements		200		189	3-7 years or life of lease
Machinery and equipment		14,557		15,053	5-10 years
Construction in progress		7,517		9,118
Subtotal		39,228		40,890
Less accumulated depreciation		14,270		12,433
Property, net	$	24,958	$	28,457

XML

LIQUIDITY, MANAGEMENT PLANS AND GENERAL BUSINESS

12 Months Ended

Dec. 31, 2013

LIQUIDITY, MANAGEMENT PLANS AND GENERAL BUSINESS [Abstract]

LIQUIDITY, MANAGEMENT PLANS AND GENERAL BUSINESS

NOTE 1. LIQUIDITY, MANAGEMENT PLANS AND GENERAL BUSINESS

Liquidity and Management’s Plans

In 2013, we continued to experience losses and negative cash flows from operations which raises substantial doubt about our ability to continue as a going concern.  We believe that we now have adequate financial resources to operate our business for the next year and we will be able to obtain additional funds to operate our business, should it be necessary, however, there can be no assurances that our efforts will prove successful.  The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

As described further in Note 10, we closed an underwritten public offering in December 2013 and completed a private placement offering in March 2014, which together provided us with net proceeds in excess of $12.0 million, allowing us to make additional investment in our Brazilian operations and provide cash for corporate purposes.  In January 2014, we completed the acquisition of H&N Distribution, Inc., the operations of which are expected to be accretive to cash flows.  Our Brazilian subsidiary, Irgovel, shut down operations in the first quarter of 2014 to complete the final stages of a major capital expansion.  The shutdown has depleted cash.  Operations at Irgovel are expected to normalize during the second quarter of 2014, such that Irgovel will then be operating at its newly increased capacity and begin generating cash from operations.

General Business

We are a human food ingredient, nutritional supplement and animal nutrition company focused on value-added processing and marketing of healthy, natural and nutrient dense products derived from raw rice bran (RRB), an underutilized by-product of the rice milling industry.  Using our bio-refining business model, we apply our proprietary and patented technologies and intellectual properties to convert RRB into numerous high value products including stabilized rice bran (SRB), rice bran oil (RBO), defatted rice bran (DRB), RiBalance (a complete rice bran nutritional package derived from further processing of SRB), RiSolubles (a highly nutritious, carbohydrate and lipid rich fraction of SRB), RiFiber (a fiber rich derivative of SRB), ProRyza rice bran protein products and a variety of other valuable derivatives extracted from these core products.  Our target markets are natural food, functional food, nutraceutical supplement and animal nutrition manufacturers, wholesalers and retailers, both domestically and internationally.

We have two reportable operating segments in 2013: (i) USA segment, which manufactures and distributes SRB in various granulations along with Stage II products and derivatives and (ii) Brazil segment, which extracts crude RBO and DRB from rice bran, which are then further processed into fully refined rice bran oil for sale internationally and in Brazil, compounded animal nutrition products for horses, cows, swine, sheep and poultry and a number of valuable human food and animal nutrition products derivatives and co-products. In addition we incur corporate and other expenses not directly attributable to operating segments, which include costs related to our corporate staff, general and administrative expenses including public company expenses, intellectual property, professional fees, and other expenses.  No Corporate allocations, including interests, are made to the operating segments.

The combined operations of our USA and Brazil segments encompass our bio-refining approach to processing RRB into various high quality, value-added constituents and finished products.  Over the past decade, we have developed and optimized our proprietary bio-refining processes to support the production of healthy, natural, hypoallergenic, gluten free, and non-genetically modified ingredients and supplements for use in human meats, baked goods, cereals, coatings, health foods, nutritional supplements, nutraceuticals and high-end animal nutrition and health products.

In 2013, the USA segment produced SRB inside two supplier rice mills in California and one owned facility in Louisiana.  .  A facility located in Lake Charles, Louisiana has been idle since May 2009.  The USA segment also includes our Dillon, Montana Stage II facility which produces our Stage II products RiSolubles (a highly nutritious, carbohydrate and lipid rich fraction of SRB), RiFiber (a fiber rich derivative of SRB), RiBalance (a complete rice bran nutritional package derived from further processing SRB), and ProRyza, a family of protein products.  Stage II refers to the proprietary processes run at our Dillon, Montana facility and includes products produced at that facility using our patented processes.  The manufacturing facilities included in our USA segment have proprietary processing equipment and patented technology for the stabilization and further processing of rice bran into finished products.  In 2013, approximately 55% of USA segment revenue was from sales of human food products and approximately 45% was from sales of animal nutrition products.

The Brazil segment consists of the consolidated operations of Nutra SA, whose only operating subsidiary is Irgovel, located in Pelotas, Brazil.  Irgovel manufactures RBO and DRB products for both the human ingredient and animal nutrition markets in Brazil and internationally.  In refining RBO to an edible grade, several co-products are obtained.  One such product is distilled fatty acids, a valuable raw material for the detergent industry.  Irgovel recently started production of rice lecithin, which has application in human nutrition, animal nutrition and industrial applications.  DRB is compounded with a number of other ingredients to produce complex animal nutrition products which are packaged and sold under Irgovel brands in the Brazilian market, sold as a raw material for further processing into human food ingredients or sold in bulk into the animal nutrition markets in Brazil and neighboring countries.  In 2013, approximately 45% of Brazil segment product revenue was from sales of RBO products and 55% was from sales of DRB products.

XML

INTANGIBLE ASSETS AND GOODWILL (Tables)

12 Months Ended

Dec. 31, 2013

INTANGIBLE ASSETS AND GOODWILL [Abstract]

Intangible assets

All changes in goodwill between December 31, 2013 and December 31, 2012, relate to foreign currency translation. Intangible assets consist of the following (in thousands):

	USA Segment									Brazil Segment						Total
	Patents			Trademarks			Customer Lists			Trademarks			Customer Lists			Intangible Assets
December 31, 2013
Cost	$	1,697		$	48		$	2,677		$	2,964		$	1,084		$	8,470
Accumulated amortization		(1,170	)		(41	)		(2,466	)		(2,472	)		(904	)		(7,053	)
Net book value	$	527		$	7		$	211		$	492		$	180		$	1,417
December 31, 2012
Cost	$	1,697		$	48		$	2,677		$	3,418		$	1,250		$	9,090
Accumulated amortization		(1,029	)		(38	)		(2,222	)		(2,362	)		(864	)		(6,515	)
Net book value	$	668		$	10		$	455		$	1,056		$	386		$	2,575
Estimated useful lives	17 years			7 years			7 years			7 years			7 years

XML

LOSS PER SHARE (EPS) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
NUMERATOR [Abstract]
Basic and diluted - net loss attributable to RiceBran Technologies shareholders	$ (15,021)	$ (9,509)
DENOMINATOR [Abstract]
Basic EPS - weighted average number of shares outstanding (in shares)	1,160,196	1,023,412
Effect of dilutive securities outstanding (in shares)	0	0
Diluted EPS - weighted average number of shares outstanding (in shares)	1,160,196	1,023,412
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares of common stock which could be purchased with weighted average outstanding securities not included in diluted EPS because effect would be antidilutive (in shares)	179,493	191,187
Average exercise price of options (in dollars per share)	$ 26.90	$ 48.00
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares of common stock which could be purchased with weighted average outstanding securities not included in diluted EPS because effect would be antidilutive (in shares)	809,311	736,753
Average exercise price of warrants (in dollars per share)	$ 17.71	$ 62.00
Convertible Notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares of common stock which could be purchased with weighted average outstanding securities not included in diluted EPS because effect would be antidilutive (in shares)	414,683	334,709
Average conversion price of convertible notes (in dollars per share)	$ 14.00	$ 16.90

XML

EMPLOYEE BONUS PLAN (Details) (USD $) In Millions, unless otherwise specified	Dec. 31, 2013
EMPLOYEE BONUS PLAN [Abstract]
Cash incentive bonus plan, amount approved	$ 0.7
Employee bonus accrued	0.6
Approved executive bonus plan	0.3
Approved executive bonus plan, employee bonus accrued	$ 0.2

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 5,091	$ 1,040
Restricted cash	1,920	1,919
Accounts receivable, net of allowance for doubtful accounts of $501 and $518 (variable interest entity restricted $1,967 and $2,505)	2,673	3,487
Inventories	2,430	1,994
Income and operating taxes recoverable	585	1,167
Deferred tax asset	0	234
Deposits and other current assets	833	975
Total current assets	13,532	10,816
Property, net (variable interest entity restricted $4,969 and $5,757)	24,958	28,457
Goodwill	4,139	4,773
Intangible assets, net	1,417	2,575
Other long-term assets	532	385
Total assets	44,578	47,006
Current liabilities:
Accounts payable	4,489	3,021
Accrued salary, wages and benefits	2,610	1,695
Accrued expenses	3,089	2,814
Mandatorily redeemable common stock (37,260 shares outstanding)	523	0
Current maturities of debt (variable interest entity nonrecourse $6,262 and $7,013)	8,250	8,003
Total current liabilities	18,961	15,533
Long-term debt, less current portion (variable interest entity nonrecourse $6,658 and $7,454)	10,919	11,581
Derivative warrant liabilities	1,685	4,520
Deferred tax liability	0	1,674
Total liabilities	31,565	33,308
Commitments and contingencies
Temporary equity:
Redeemable noncontrolling interest in Nutra SA	7,177	9,262
Equity attributable to RiceBran Technologies shareholders:
Preferred stock, 20,000,000 shares authorized and none issued	0	0
Common stock, no par value, 6,000,000 shares and 2,500,000 shares authorized, 2,832,014 and 1,038,080 shares issued and outstanding	227,513	210,396
Accumulated deficit	(219,441)	(204,420)
Accumulated other comprehensive loss	(2,236)	(1,540)
Total equity attributable to RiceBran Technologies shareholders	5,836	4,436
Total liabilities, temporary equity and equity	$ 44,578	$ 47,006

XML

INTANGIBLE ASSETS AND GOODWILL (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Cost	$ 8,470,000	$ 9,090,000
Accumulated amortization	(7,053,000)	(6,515,000)
Net book value	1,417,000	2,575,000
Purchased intangible assets	0	0
Future estimated amortization expense [Abstract]
2014	900,000
2015	300,000
2016	100,000
2017	100,000
Patents [Member] | USA Segment [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	1,697,000	1,697,000
Accumulated amortization	(1,170,000)	(1,029,000)
Net book value	527,000	668,000
Estimated useful life	17 years
Trademarks [Member] | USA Segment [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	48,000	48,000
Accumulated amortization	(41,000)	(38,000)
Net book value	7,000	10,000
Estimated useful life	7 years
Trademarks [Member] | Brazil Segment [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	2,964,000	3,418,000
Accumulated amortization	(2,472,000)	(2,362,000)
Net book value	492,000	1,056,000
Estimated useful life	7 years
Customer Lists [Member] | USA Segment [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	2,677,000	2,677,000
Accumulated amortization	(2,466,000)	(2,222,000)
Net book value	211,000	455,000
Estimated useful life	7 years
Customer Lists [Member] | Brazil Segment [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	1,084,000	1,250,000
Accumulated amortization	(904,000)	(864,000)
Net book value	$ 180,000	$ 386,000
Estimated useful life	7 years

XML

Consolidated Statements of Changes in Equity (USD $) In Thousands, except Share data, unless otherwise specified	Common Stock [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Balance at Dec. 31, 2011	$ 209,613	$ (194,911)	$ (988)	$ 13,714
Balance( in shares) at Dec. 31, 2011	1,006,323
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation, options	923	0	0	923
Warrants exercised	711	0	0	711
Warrants exercised (in shares)	7,763
Common stock issued for fees and services	228	0	0	228
Common stock issued for fees and services (in shares)	8,972
Common stock issued in exchange for options	10	0	0	10
Common stock issued in exchange for options (in shares)	15,022
Cancellation of convertible notes and warrant	(1,089)	0	0	(1,089)
Foreign currency translation	0	0	(552)	(552)
Net loss	0	(9,509)	0	(9,509)
Balance at Dec. 31, 2012	210,396	(204,420)	(1,540)	4,436
Balance( in shares) at Dec. 31, 2012	1,038,080			1,038,080
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation, options	538	0	0	538
Stock and warrant offering proceeds, net	7,617	0	0	7,617
Stock and warrant offering proceeds, net (in shares)	1,714,286
Conversion of senior debenture	500	0	0	500
Conversion of senior debenture (in shares)	28,429
Common stock issued for fees and services	744	0	0	744
Common stock issued for fees and services (in shares)	48,556
Warrants issued for fees and services	204	0	0	204
Warrants issued fees and services (in shares)	0
Future shares issuance in the exchange for warrants	7,514	0	0	7,514
Shares issuable in the Exchange (in shares)	0
Reverse split, impact of rounding	0	0	0	0
Reverse split, impact of rounding (in shares)	2,663
Foreign currency translation	0	0	(696)	(696)
Net loss	0	(15,021)	0	(15,021)
Balance at Dec. 31, 2013	$ 227,513	$ (219,441)	$ (2,236)	$ 5,836
Balance( in shares) at Dec. 31, 2013	2,832,014			2,832,014

XML

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES [Abstract]

Deferred Tax Assets and Liabilities

Deferred tax assets (liabilities) are comprised of the following (in thousands):

	As of December 31,
	2013			2012
United States
Net operating loss carryforwards	$	43,328		$	41,374
Gain on sale of membership interests in Nutra SA		403			374
Stock options and warrants		1,199			1,144
Intangible assets		1,194			960
Property		6,832			5,651
Capitalized expenses		652			715
Convertible debt		(112	)		(399	)
Other		451			86
Deferred tax assets		53,947			49,905
Less: Valuation allowance		(53,947	)		(49,905	)
		-			-
Brazil
Intangible assets		(228	)		(490	)
Property		(1,555	)		(2,165	)
Net operating loss carryforwards		2,381			960
Other		285			255
Net deferred tax asset (liability)		883			(1,440	)
Less-valuation allowance		(883	)		-
	$	-		$	(1,440	)
Deferred tax asset - current	$	-		$	234
Deferred tax liability - long-term		-			(1,674	)
	$	-		$	(1,440	)

Income (Loss) from Continuing Operations before Income Taxes

Loss before income taxes is comprised of the following (in thousands):

	2013			2012
Foreign	$	(6,832	)	$	(5,051	)
Domestic		(12,247	)		(8,020	)
Loss before income taxes	$	(19,079	)	$	(13,071	)

Effective Income Tax Rate Reconciliation

Reconciliations between the amount computed by applying the U.S. federal statutory tax rate (34%) to loss before income taxes, and income tax benefit follows (in thousands):

	2013			2012
Income tax benefit at federal statutory rate	$	(6,487	)	$	(4,444	)
Increase (decrease) resulting from:
State tax benefit, net of federal tax effect		(653	)		(251	)
Change in valuation allowance		4,927			(1,926	)
Adjustment to capitalized costs deferred balances		-			443
Adjustment to stock option compensation deferred balances		-			1,602
Reduction in deferred balances for forfeited, expired or cancelled options		255			602
Expiration of U.S. net operating losses		415			1,460
Nontaxable fair value adjustment		350			(1,843	)
Nondeductible convertible debt issuance expenses		521			2,285
Impact of state rate changes		(677	)		-
Nondeductible expenses		6			10
Foreign taxes		-			6
Adjustments to Brazil deferred balances		-			(222	)
Adjustments to U.S. deferred balances		(96	)		343
Income tax benefit	$	(1,439	)	$	(1,935	)

XML

EMPLOYEE BONUS PLAN

12 Months Ended

Dec. 31, 2013

EMPLOYEE BONUS PLAN [Abstract]

EMPLOYEE BONUS PLAN

NOTE 15. EMPLOYEE BONUS PLAN

In 2010, our board of directors approved a cash incentive bonus plan.  As of December 31, 2013, the plan, as amended, provided for payment of $0.7 million to employees, still employed at the time of payments, when (i) we are cash flow positive, defined by our board as earnings before interest, taxes, depreciation, amortization and certain non-cash charges, and (ii) cash was available for the payments as determined by our board at its sole discretion.  In December 2013, our board approved payment of these bonuses and as of December 31, 2013, $0.6 million is accrued and unpaid.

In 2013, our board of directors approved an executive bonus plan which provided for payments of $0.3 million to employees, still employed at the time of payments, when cash was available for the payments as determined by our board at its sole discretion.  In 2013, our board approved payment of these bonuses and as of December 31, 2013, $0.2 million is accrued and unpaid.

XML

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2013

RELATED PARTY TRANSACTIONS [Abstract]

Transactional warrants under the terms of our financial advisor agreement with HC

In connection with the issuance of convertible debt in 2012 we issued the transactional warrants listed below under the terms of our financial advisor agreement with HC.

Date of Warrants	Number of Shares Under Warrants	Exercise Price of Warrant	Expiration Date of Warrant
		(1)
January 2012	1,250	Exercisable immediately at $30.00 per share (2)	January 2017
January 2012	5,563	Exercisable immediately at $20.00 per share (2)	January 2017
May 2012	63	Exercisable immediately at $20.00 per share (2)	May 2017
July 2012	711	Exercisable immediately at $14.00 per share	July 2017
August 2012	268	Exercisable immediately at $14.00 per share	August 2017

Other transactions and balances with HC and Halpern Entities

Other transactions with Mr. Halpern, HC and Halpern Entities are summarized below (in thousands):

	2013		2012
Success fees earned by HC under financial advisor agreement payable in cash	$	-	$	164
Interest earned on convertible debt		306		243
Interest paid on convertible debt		288		242
Payments to HC relevant to HC's class 6 general unsecured creditor claim		-		256

XML

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2013

SEGMENT INFORMATION [Abstract]

SEGMENT INFORMATION

NOTE 17. SEGMENT INFORMATION

We have two reportable operating segments in 2013: (i) USA segment, which manufactures and distributes SRB in various granulations along with Stage II products and derivatives and (ii) Brazil segment, which extracts crude RBO and DRB from rice bran, which are then further processed into fully refined rice bran oil for sale internationally and in Brazil, compounded animal nutrition products for horses, cows, swine, sheep and poultry and a number of valuable human food and animal nutrition products derivatives and co-products. In addition we incur corporate and other expenses not directly attributable to operating segments, which include costs related to our corporate staff, general and administrative expenses including public company expenses, intellectual property, professional fees, and other expenses.  No Corporate allocations, including interests, are made to the operating segments.

The table below presents segment information for the years identified and provides a reconciliation of segment information to total consolidated information (in thousands).

	2013
	Corporate			USA			Brazil			Consolidated
Revenues	$	-		$	12,023		$	23,028		$	35,051
Cost of goods sold		-			9,078			22,028			31,106
Gross profit		-			2,945			1,000			3,945
Depreciation and amortization (in selling, general and administrative)		(24	)		(469	)		(756	)		(1,249	)
Impairment of property		-			(300	)		-			(300	)
Other operating expenses		(5,918	)		(2,006	)		(4,442	)		(12,366	)
Income (loss) from operations	$	(5,942	)	$	170		$	(4,198	)	$	(9,970	)
Net income (loss) attributable to RiceBran Technologies shareholders	$	(12,418	)	$	170		$	(2,773	)	$	(15,021	)
Interest expense		(1,950	)		-			(1,984	)		(3,934	)
Depreciation (in cost of goods sold)		-			(926	)		(1,873	)		(2,799	)
Purchases of property		21			191			2,907			3,119
Property, net, end of period		55			7,231			17,672			24,958
Goodwill, end of period		-			-			4,139			4,139
Intangible assets, net, end of period		-			745			672			1,417
Total assets, end of period		6,039			9,796			28,743			44,578

	2012
	Corporate			USA			Brazil			Consolidated
Revenues	$	-		$	12,633		$	25,090		$	37,723
Cost of goods sold		-			8,946			22,705			31,651
Gross profit		-			3,687			2,385			6,072
Intersegment fees		347			-			(347	)		-
Depreciation and amortization (in selling, general and administrative)		(197	)		(1,006	)		(859	)		(2,062	)
Impairment of property		-			(1,069	)		-			(1,069	)
Other operating expenses		(4,768	)		(2,364	)		(4,496	)		(11,628	)
Loss from operations	$	(4,618	)	$	(752	)	$	(3,317	)	$	(8,687	)
Net loss attributable to RiceBran Technologies shareholders	$	(7,046	)	$	(770	)	$	(1,693	)	$	(9,509	)
Interest expense		(743	)		(17	)		(1,166	)		(1,926	)
Depreciation (in cost of goods sold)		-			(899	)		(1,651	)		(2,550	)
Purchases of property		1			150			6,331			6,482
Property, net, end of period		36			8,731			19,690			28,457
Goodwill, end of period		-			-			4,773			4,773
Intangible assets, net, end of period		-			1,133			1,442			2,575
Total assets, end of period		3,201			11,609			32,196			47,006

All changes in goodwill between December 31, 2013 and December 31, 2012, relate to foreign currency translation.

The following table presents revenues data by geographic area (in thousands):

	2013		2012
United States	$	12,869	$	16,177
Brazil		17,861		18,266
Other international		4,321		3,280
Total revenues	$	35,051	$	37,723

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cash flow from operating activities:
Net loss	$ (17,640)	$ (11,136)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	3,025	3,430
Amortization	1,023	1,182
Provision for doubtful accounts receivable	226	401
Common stock and share-based compensation, options	765	1,161
Impairment of property	300	1,069
Change in fair value of derivative warrant and conversion liabilities	1,029	(5,420)
Loss on extinguishment	2,891	4,941
Financing expense	564	2,184
Deferred tax benefit	(1,248)	(1,935)
Other	20	775
Changes in operating assets and liabilities:
Accounts receivable	256	(462)
Inventories	(561)	201
Accounts payable and accrued expenses	3,383	215
Pre-petition liabilities	0	(1,615)
Other	765	187
Net cash used in operating activities	(5,202)	(4,822)
Cash flows from investing activities:
Purchases of property	(3,119)	(6,482)
Proceeds from sales of property	829	576
Payment for license	(1,200)	0
Receipts on notes receivable	0	700
Other	0	244
Net cash used in investing activities	(3,490)	(4,962)
Cash flows from financing activities:
Proceeds from issuance of convertible debt and related warrants	575	3,563
Proceeds from issuance of common stock and warrants, net of costs	7,617	0
Proceeds from obligation to issue shares	408	0
Payments of debt	(18,404)	(12,610)
Proceeds from issuance of debt	20,218	15,189
Proceeds from sale of membership interests in Nutra SA, net of costs	1,200	1,500
Proceeds from sale of membership interests in RBT PRO, net of costs	1,200	0
Net cash provided by financing activities	12,814	7,642
Effect of exchange rate changes on cash and cash equivalents	(71)	(147)
Net change in cash and cash equivalents	4,051	(2,289)
Cash and cash equivalents, beginning of year	1,040	3,329
Cash and cash equivalents, end of year	5,091	1,040
Supplemental disclosures:
Cash paid for interest	2,537	1,651
Cash paid for income taxes	$ 0	$ 0

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current assets:
Accounts receivable, allowance for doubtful accounts	$ 501	$ 518
Current liabilities:
Redeemable common stock shares outstanding (in shares)	37,620	0
Equity attributable to RiceBran Technologies shareholders:
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized (in shares)	6,000,000	2,500,000
Common stock, shares issued (in shares)	2,832,014	1,038,080
Common stock, shares outstanding (in shares)	2,832,014	1,038,080
Variable Interest Entity [Member]
Current assets:
Accounts receivable, variable interest entity restricted	1,967	2,505
Variable interest entity restricted portion of property, net	4,969	5,757
Current liabilities:
Nonrecourse portion of current maturities of long-term debt (variable interest entity)	6,262	7,013
Long-term liabilities:
Long-term debt, less current portion variable interest entity nonrecourse	$ 6,658	$ 7,454

XML

EQUITY AND SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2013

EQUITY AND SHARE-BASED COMPENSATION [Abstract]

EQUITY AND SHARE-BASED COMPENSATION

NOTE 10. EQUITY AND SHARE-BASED COMPENSATION

On October 28, 2013, our board of directors approved a 1 for 200 reverse split of our common stock.  We began trading on a post-split basis on November 18, 2013.  All share and per share information has been retrospectively adjusted for all prior periods presented giving retroactive effect to the reverse stock split.  Such adjustments include calculations of our weighted averages number of shares outstanding and loss per share, as well as disclosures regarding our share-based compensation and convertible debt.

We have never declared or paid dividends on our common stock and have no plans to pay dividends in the foreseeable future.  Pursuant to the terms of the senior convertible debentures, we may not pay any dividends while a debenture is outstanding.  Cash provided by operations in our Brazil segment is generally unavailable for distribution to our Corporate and USA segments pursuant to the terms of the limited liability company agreement for Nutra SA.

In June 2013, our shareholders approved an increase in the number of our authorized shares of common stock from 2,500,000 to 6,000,000.

In December 2013, we completed a secondary public offering in which we issued and sold 1,714,286 shares of common stock for $5.24 per share and publicly traded warrants to purchase 1,714,286 shares of common stock for $0.01 per underlying share.  The net proceeds from the offering were $7.6 million after deducting underwriting discounts and commissions of $0.7 million and other offering expenses of approximately $1.4 million.  The publicly traded warrants have an exercise price of $6.55 per share and expire in December 2018.  The underwriter on the offering also received a warrant for the purchase of 85,715 shares, at an exercise price of $6.55 per share, which expires in December 2018.

In January 2014, the underwriters exercised their overallotment rights and we issued and sold an additional 162,586 shares of common stock for $5.24 per share and additional publicly traded warrants to purchase 162,586 shares of common stock for $0.01 per underlying share. In connection with the overallotment exercise, the underwriters on the offering also received a warrant for the purchase of 8,130 shares, at an exercise price of $6.55 per share, which expires in December 2018.

In March 2014, we completed a private placement offering.  We issued convertible notes in the principal amount of $4.9 million and warrants for the purchase of up to 1,399,614 shares of common stock.  The notes are due in July 2016, bear interest at 5% interest and automatically convert at a conversion price of $5.25, upon shareholders voting to approve an increase in our authorized shares of common stock.  The warrants have an exercise price of $5.25 per share and expire in March 2019.  We contributed $1.0 million of the $4.6 million gross proceeds to Nutra SA, and intend to use the remainder of the proceeds for capital project in the United States and for general corporate purposes.

A summary of stock option and warrant activity for 2013 and 2012 follows.

	Options								Equity and Liability Warrants
	Shares Under Options				Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Shares Under Warrants				Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding, January 1, 2012		192,944			$	54.00		6.3		233,947			$	208.00		1.7
Granted		29,060				30.00				423,782				20.00
Impact of anti-dilution clauses		-		NA						518,720		NA
Impact of amendment		-		NA						78,215		NA
Exercised		-		NA						(25,015	)			20.00
Forfeited, expired or cancelled		(52,750	)			68.00				(422,880	)			86.00
Outstanding, December 31, 2012		169,254				32.00		6.3		806,769				24.00		3.5
Granted or issued		40,000				15.38				1,859,111				6.85
Impact of anti-dilution clauses		-		NA						385,292		NA
Impact of amendment		-		NA						(496,061	)	NA
Exercised		-		NA						-				-
Forfeited, expired or cancelled		(29,817	)			50.58				(148,829	)			66.92
Outstanding, December 31, 2013		179,437			$	24.28		6.2		2,406,282			$	6.33		4.5
Exercisable, December 31, 2013		157,012			$	25.23		5.9		2,320,567			$	6.32		4.4

Options

Our board of directors adopted our 2010 Equity Incentive Plan (2010 Plan) in February 2010.  A total of 125,000 shares of common stock were initially reserved for issuance under the 2010 Plan.  The amount reserved increases annually each January 1st by 5% of the outstanding shares as of the prior December 31st.  Additionally, in 2011 the board approved a 40,000 increase in the number of shares of common stock reserved under the plan.  In 2013, the board froze the plan and there are no longer any shares reserved for future issuance under the 2010 Plan.

Under the terms of the 2010 Plan, we could grant options to purchase common stock and shares of common stock to officers, directors, employees or consultants providing services on such terms as are determined by the board of directors.  Our board of directors administered the 2010 Plan, determined vesting schedules on plan awards and could accelerate the vesting schedules for award recipients.  The options granted under the 2010 Plan have terms of up to 10 years.  There are no longer any shares reserved for future issuance under the 2010 Plan.

Our board of directors adopted the 2005 Equity Incentive Plan (2005 Plan) in May 2005 and our shareholders approved the 2005 Plan in September 2005.  Under the terms of the 2005 Plan, we could grant options to purchase common stock and shares of common stock to officers, directors, employees or consultants providing services on such terms as are determined by the board of directors.  Options granted under the 2005 Plan have terms of up to 10 years.  There are no longer any shares reserved for future issuance under the 2005 Plan.

We have outstanding a total of 17,384 options awarded to current and former directors, employees and consultants at various times beginning in 2004 through 2009 that do not fall under the plans described above.  Expiration periods, typically ten years, and other terms of these non-plan specific options are not materially different from those issued under the 2010 Plan and 2005 Plan.

Share-based compensation expenses related to options are included in selling, general and administrative expenses in the statements of operations, and consisted of the following (in thousands):

	2013		2012
Consultants	$	16	$	42
Directors		262		285
Employees		127		152
Executive officers		133		444
Total share-based compensation expense, options	$	538	$	923

The following table summarizes option activity during 2013 and 2012:

	Employees and Directors					Consultants
				Weighted					Weighted		Total
	Shares			Average		Shares			Average		Shares
	Underlying			Exercise		Underlying			Exercise		Underlying
	Options			Price		Options			Price		Options
Outstanding,  January 1, 2012		180,494		$	48.00		12,450		$	152.00		192,944
Granted		28,060			26.00		1,000			16.00		29,060
Forfeited, expired or cancelled		(50,250	)		58.00		(2,500	)		266.00		(52,750	)
Exercised		-		NA			-		NA			-
Outstanding, December 31, 2012		158,304			26.00		10,950			106.00		169,254
Granted		38,750			15.36		1,250			16.00		40,000
Forfeited, expired or cancelled		(27,317	)		27.75		(2,500	)		300.00		(29,817	)
Exercised		-		NA			-		NA			-
Outstanding, December 31, 2013		169,737		$	23.13		9,700		$	44.45		179,437
Exercisable, December 31, 2013		148,698		$	24.31		8,314		$	41.72		157,012

As of December 31, 2013, our outstanding options have no intrinsic value. The average fair value of options granted was $11.18 per share in 2013 and $20.00 per share in 2012.  The following are the assumptions used in valuing stock options:

	2013	2012
Assumed volatility	119.2%-122.3%	104.4%-113.3%
	(121.1% weighted average)	(109.2% weighted average)
Assumed risk free interest rate	0.7%-1.4%	0.2%-1.0%
	(0.9% weighted average)	(0.9% weighted average)
Average expected life of options (in years)	6.2	6.1
Expected dividends	-	-
Forfeiture rate	5%	5%

The following table summarizes information related to outstanding and exercisable options:

		As of December 31, 2013
		Outstanding						Exercisable
Range of Exercise Prices		Shares Underlying Options		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Underlying Options		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	6.00 to $16.00		135,989		7.0	$	15.82		114,636		6.8	$	16.00
	28.00		1,457		7.2		28.00		1,457		8.2		28.00
	40.00		23,991		4.8		40.00		23,991		4.8		40.00
	60.00		15,000		1.0		60.00		15,000		1.0		60.00
	74.00		2,500		7.2		74.00		1,428		7.2		74.00
	242.00		500		2.0		242.00		500		2.0		242.00
	16.00 to $242.00		179,437		6.2	$	24.28		157,012		5.9	$	25.23

In April 2013, our board increased the number of shares of common stock that each non-employee director automatically receives annually each January 1 under our 2010 Equity Incentive Plan from 1,250 to 5,000 shares.  In connection with the increase in the automatic director grant, in April 2013, our board granted each of our five non-employee directors a stock option to purchase up to 3,750 shares of common stock.  Each option has an exercise price of $16.00 per share, vests in nine equal monthly installments ending December 31, 2013, and expires in April 2023.  In January 2013, we issued each of those five non-employee directors an option for the purchase of up to 1,250 shares of common stock under the non-employee director automatic grant provision.  Each option has an exercise price of $16.00 per share, vests in twelve equal monthly installments ending December 2013, and expires in January 2023.

In April 2013, the Board granted each of the two directors serving on the strategic committee and consulting special counsel each a stock option to purchase up to 1,250 shares of common stock.  Each option has an exercise price of $16.00 per share, vests in twelve equal monthly installments ending in March 2014 and expires in April 2018.

In 2012, we issued 15,022 shares of common stock to retiring directors in exchange for the surrender of vested stock options exercisable for 23,710 shares of common stock.  The fair value of the options surrendered on the date of the stock issuances was $0.3 million and fair value of the stock at issuances was $0.3 million.

For 2012, our non-employee directors agreed to accept stock options in lieu of cash representing one half of the board retainer fees to which they otherwise would have been entitled.  As a result, we issued options for the purchase of 6,090 shares of common stock in 2012, at an exercise price of $28.00 per share.  The stock options vested in installments during 2012.  The $0.2 million grant date fair value of the options equaled the cash fees to which the directors were otherwise entitled.

In 2012, our three executive officers agreed to accept stock options in lieu of receiving their full salary in cash.  Our three executive officers received cash equal to either 83.3% or 90.0% of their stated contract salary, as detailed in their employment agreements, and these officers were collectively issued stock options for the purchase of up to 4,263 shares of common stock at an exercise price equal to $24.00 per share.  The options vested in installments during 2012.  The $0.1 million grant date fair value of the options equaled the officers’ salary forbearance.

In 2012, we lowered the exercise price on outstanding options held by certain employees for the purchase of up to 108,588 shares of common stock to $16.00 per share from an average exercise price of $38.00 per share.  The stock price on the date of the re-pricing was $14.00 per share.  No other terms of the options were modified.  We recorded expense of less than $0.1 million in 2012, representing the difference between the fair value of the options before and after the modification.  Total unrecognized compensation increased less than $0.1 million as a result of the modification.

Warrants

We have outstanding warrants classified as equity (equity warrants) and others classified as derivative warrant liability (liability warrants).  We have certain warrant agreements in effect for outstanding liability warrants that contain antidilution clauses.  Under the antidilution clauses, in the event of equity issuances, we may be required to lower the exercise price on liability warrants and increase the number of shares underlying liability warrants.  Equity issuances may include issuances of our common stock, certain awards of options to employees, and issuances of warrants and/or other convertible instruments below a certain exercise price.

Certain equity issuance in 2013 and 2012 triggered the antidilution clauses in certain liability warrants and, as a result, we were required to lower the exercise price and increase the number of shares underlying certain liability warrants.  In addition, certain amendments required us to lower the exercise price and increase the numbers of shares underlying certain warrants.

	Equity Warrants							Liability Warrants
	Shares Underlying			Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Underlying			Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
Balance, January 1, 2011		17,372			3.5	$	60.00		216,575			1.5	$	220.00
Granted		-					-		423,782					20.00
Impact of antidilution clauses		-					-		518,720				NA
Impact of amendment		-					-		78,215				NA
Exercised		-					-		(25,015	)				20.00
Forfeited, expired or cancelled		(11,616	)				44.00		(411,264	)				88.00
Outstanding, December 31, 2012		5,756			2.4		90.00		801,013			3.5		24.00
Granted		1,820,711					6.66		38,400					16.00
Impact of antidilution clauses		-					-		385,292				NA
Impact of amendment		(8,711	)				-		(487,350	)			NA
Exercised		-					-		-				NA
Forfeited, expired or cancelled		(2,722	)				137.60		(146,107	)				65.60
Outstanding, December 31, 2013		1,815,034			5.0	$	6.69		591,248			2.9	$	5.24
Exercisable, December 31, 2013		1,729,319			5.0	$	6.69		591,248			2.9	$	5.24

During the first quarter of 2012, the holder of a liability warrant to purchase 25,016 shares of common stock exercised the warrant on a cashless basis and, as a result, we issued the holder 7,764 shares of our common stock.  We transferred the $0.7 million fair value of the liability warrant as of the date of exercise into equity.

The following table summarizes information related to outstanding and exercisable warrants:

			Outstanding						Exercisable
Range of Exercise Prices		Type of Warrant	Shares Under Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Under Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	5.24	Liability		591,248		2.9	$	5.24		591,248		2.9	$	5.24
	6.55	Equity		1,800,001		5.0		6.55		1,714,286		5.0		6.55
	16.00 to $16.80	Equity		12,004		4.5		16.40		12,004		4.5		16.40
	46.80	Equity		3,029		2.9		46.80		3,029		2.9		46.80
				2,406,282		4.5	$	6.33		2,320,567		4.4	$	6.32

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 25, 2014	Jun. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	RiceBran Technologies
Entity Central Index Key	0001063537
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 13,826,116
Entity Common Stock, Shares Outstanding		2,869,274
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013

XML

EQUITY METHOD INVESTMENT

12 Months Ended

Dec. 31, 2013

EQUITY METHOD INVESTMENT [Abstract]

EQUITY METHOD INVESTMENT

NOTE 11. EQUITY METHOD INVESTMENT

In 2011, we entered into an agreement with a partner with the goal of developing technology to extract and concentrate protein from rice bran.  In March 2013, the agreement was mutually terminated under terms whereby we each received (i) the right to separately develop, modify and improve the jointly developed technology owned by the partner and (ii) a nonexclusive, royalty free, perpetual license to that technology (License).  We paid the partner $1.2 million as a lump sum in April 2013.

RBT PRO, LLC (RBT PRO) was a wholly owned subsidiary whose only asset was the License acquired in March 2013.  In April 2013, we entered into a series of agreements with various affiliates of Wilmar International Limited (collectively Wilmar).  In connection therewith, we sold a 50% membership interest in RBT PRO to Wilmar for $1.2 million.  RBT PRO granted an exclusive, royalty free, perpetual sublicense of the License to Wilmar for use throughout China and to us for use worldwide, excluding China.

We also entered into a cross license agreement with Wilmar.  We agreed to license to Wilmar all of our intellectual property with respect to processing of rice bran and its derivatives for use in China.  Wilmar agreed to license to us (i) its intellectual property with respect to processing of rice bran, and its derivatives, based on the intellectual property licensed to Wilmar under the License for use worldwide, excluding China and (ii) its other intellectual property with respect to processing of rice bran, and its derivatives, for use worldwide, excluding certain countries in Asia.

Under the agreements, we obtained the right to purchase 45% of the capital stock of any entity Wilmar establishes to develop new products relating to rice bran or its derivative, as defined in the agreement, using the intellectual property licensed to Wilmar.  If we decline the right to purchase 45% of the capital stock of any such new entity, we have the option to purchase 25% of the entity within two years of the entity’s formation.  The exercise price for the option will equal 25% of the capital investment made in the entity, plus interest, as defined in the agreement.

There was no gain or loss recognized on these transactions because we entered the agreement with the partner in contemplation of the agreements with Wilmar.  We account for our investment in RBT PRO under the equity method.  Our investment in RBT PRO is zero as of December 31, 2013, and RBT PRO has had no net income or loss since inception.

XML

Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements of Operations [Abstract]
Revenues	$ 35,051	$ 37,723
Cost of goods sold	31,106	31,651
Gross profit	3,945	6,072
Operating expenses:
Selling, general and administrative	13,615	13,690
Impairment of property	300	1,069
Total operating expenses	13,915	14,759
Loss from operations	(9,970)	(8,687)
Other income (expense):
Interest income	109	74
Interest expense	(3,934)	(1,926)
Change in fair value of derivative warrant and conversion liabilities	(1,029)	5,420
Loss on extinguishment	(2,891)	(4,941)
Financing expense	(564)	(2,184)
Foreign currency exchange, net	(440)	(617)
Other income	13	27
Other expense	(373)	(237)
Total other expense	(9,109)	(4,384)
Loss before income taxes	(19,079)	(13,071)
Income tax benefit	1,439	1,935
Net loss	(17,640)	(11,136)
Net loss attributable to noncontrolling interest in Nutra SA	2,619	1,627
Net loss attributable to RiceBran Technologies shareholders	$ (15,021)	$ (9,509)
Loss per share attributable to RiceBran Technologies shareholders
Basic (in dollars per share)	$ (12.95)	$ (9.29)
Diluted (in dollars per share)	$ (12.95)	$ (9.29)
Weighted average number of shares outstanding
Basic (in shares)	1,160,196	1,023,412
Diluted (in shares)	1,160,196	1,023,412

XML

INVENTORIES

12 Months Ended

Dec. 31, 2013

INVENTORIES [Abstract]

INVENTORIES

NOTE 5. INVENTORIES

Inventories are composed of the following (in thousands):

	As of December 31,
	2013		2012
Finished goods	$	1,194	$	1,146
Work in process		546		330
Raw materials		441		255
Packaging supplies		249		263
Total inventories	$	2,430	$	1,994

XML

REDEEMABLE NONCONTROLLING INTEREST IN NUTRA SA

12 Months Ended

Dec. 31, 2013

REDEEMABLE NONCONTROLLING INTEREST IN NUTRA SA [Abstract]

REDEEMABLE NONCONTROLLING INTEREST IN NUTRA SA

NOTE 4. REDEEMABLE NONCONTROLLING INTEREST IN NUTRA SA

We hold a variable interest which relates to our equity interest in Nutra SA, LLC (Nutra SA).  We are the primary beneficiary of Nutra SA, and as such, Nutra SA’s assets, liabilities and results of operations are included in our consolidated financial statements.  The other equity holders’ interests are reflected in net loss attributable to noncontrolling interest in Nutra SA, in the consolidated statements of operations, and redeemable noncontrolling interest in Nutra SA, in the consolidated balance sheets.  Our variable interest in Nutra SA is our Brazil segment.  A summary of the carrying amounts of Nutra SA balances included in our consolidated balance sheets follows (in thousands).

	December 31,
	2013		2012
Cash and cash equivalents	$	1,686	$	562
Other current assets (restricted $1,967 and $2,505)		4,546		5,675
Property, net (restricted $4,969 and  $5,757)		17,672		19,690
Goodwill and intangibles, net		4,812		6,215
Other noncurrent assets		27		54
Total assets	$	28,743	$	32,196
Current liabilities	$	6,514	$	5,141
Current portion of long-term debt (nonrecourse)		6,262		7,013
Long-term debt, less current portion (nonrecourse)		6,658		7,454
Other noncurrent liabilities		-		1,871
Total liabilities	$	19,434	$	21,479

Nutra SA’s debt is secured by its accounts receivable and property.  Our parent company and our non-Brazilian subsidiaries do not guarantee any of Nutra SA’s debt.

A summary of changes in redeemable noncontrolling interest in Nutra SA follows (in thousands):

	2013			2012
Redeemable noncontrolling interest in Nutra SA, beginning of period	$	9,262		$	9,918
Investors' interest in net loss of Nutra SA		(2,619	)		(1,627	)
Investors' interest in accumulated other comprehensive income of Nutra SA		(666	)		(529	)
Investors' purchase of additional units		1,200			1,500
Redeemable noncontrolling interest in Nutra SA, end of period	$	7,177		$	9,262

In December 2010, we entered into a membership interest purchase agreement (MIPA) with AF Bran Holdings-NL LLC and AF Bran Holdings LLC (Investors).  The Investors’ interest averaged 49.0% in 2013 and 2012.  As of December 31, 2013, the Investors interest was 45.9%.  Following the closing of the underwritten public offering in December 2013 and completion of the private placement offering in March 2014, we invested an additional $4.9 million in Nutra SA.  As of March 25, 2014, we own 56.7% of Nutra SA with the remaining 43.3% held by the Investors.  The Investors’ share of Nutra SA’s net income (loss) increases (decreases) redeemable noncontrolling interest.  We are restricted from competing with Nutra SA and Irgovel in Brazil as further described in the MIPA.

Redeemable noncontrolling interest in Nutra SA is recorded in temporary equity, above the equity section and after liabilities on our consolidated balance sheets, because the Investors have the drag along rights which provide the Investors the ability to force a sale of Nutra SA assets in the future.  We have assessed the likelihood of the Investors exercising these rights as less than probable at December 31, 2013.  We will continue to evaluate the probability of the Investors exercising their Drag Along Rights each reporting period.  We will begin to accrete the redeemable noncontrolling interest up to fair value if and when it is probable the Investors will exercise these rights.

Under the limited liability company agreement for Nutra SA (LLC agreement), as amended, any units held by the Investors beginning January 1, 2014, accrue a yield at 4% (the Yield).  Commencing with the first quarter of 2014, Nutra SA must make distributions to the Investors quarterly in the amount equal to the previously accrued and unpaid Yield plus any additional distributions owed to the Investors, to the extent there is distributable cash, as defined in the LLC agreement.

Following the payment of the Yield, Nutra SA must distribute all distributable cash (as defined in the LLC Agreement) to the members on March 31 of each year as follows: (i) first, to the Investors in an amount equal to 2.3 times the Investors’ capital contributions, less the aggregate amount of distributions paid to the Investors, (ii) second, to us in an amount equal to twice the capital contributions made by us, less the aggregate amount of distributions paid to us; and (iii) third, to us and the Investors in proportion to our respective membership interests.

In 2013, we transferred $3.3 million in cash to Nutra SA for additional units.  In 2013, we also transferred $0.8 million in cash to Nutra SA and in exchange, title was returned to us for certain equipment contributed to Nutra SA in December 2012 with an historical cost of $0.2 million.

Under the LLC agreement, the business of Nutra SA is to be conducted by the manager, currently our CEO, subject to the oversight of the management committee.  The management committee is comprised of three of our representatives and two Investor representatives.  Upon an event of default or a qualifying event, we will no longer control the management committee and the management committee will include three Investor representatives and two of our representatives.  In addition, following an event of default or a qualifying event, a majority of the members of the management committee may replace the manager of Nutra SA.

As of December 31, 2013, there have been no events of default.  Events of default, as defined in the MIPA and the October 2013 amendment of investment agreements, are:

· A Nutra SA business plan deviation, defined as the occurrence in 2014 of a 20% unfavorable variation in two out of three of the following: (i) revenue, (ii) earnings before interest, taxes, depreciation and amortization (EBITDA) or (iii) debt,

· A Nutra SA EBITDA default, which is defined as the failure to achieve 85% of planned EBITDA for three consecutive quarters,

· A material problem, which is defined as a material problem in a facility (unrelated to changes in law, weather, etc.) likely to cause a Nutra SA business plan deviation or Nutra SA EBITDA default, which results in damages not at least 80% covered by insurance proceeds,

· Failure of Irgovel to meet minimum quarterly processing targets beginning in the second quarter of 2014, or

· Failure of Irgovel to achieve EBITDA of at least $4.0 million in any year after 2014.

As of December 31, 2013, there have been no qualifying events.  The LLC agreement defines a qualifying event as any event prior to September 16, 2014, which results, or will result, in (i) a person or group of persons exercising the right to appoint members to our board of directors holding one third or more of the votes of all board members, (ii) the sale, exchange, pledge or use as guarantee of one half or more of our ownership interest in Nutra SA to a third party or (iii) the bankruptcy of RiceBran Technologies or Nutra SA.

The Investors have the right to force the sale of all Nutra SA assets after the earlier of January 1, 2015, or upon the failure to process a certain level of rice bran in the second and third quarters of 2014.  The right terminates upon the occurrence of certain events (a $50 million Nutra SA initial public offering or a change of control, as defined).  We may elect to exercise a right of first refusal to purchase the Investors’ interest instead of proceeding to a sale.

In evaluating whether we are the primary beneficiary of Nutra SA, we considered the matters which could be put to a vote of the members.  Until there is an event of default or a qualifying event, the Investors’ rights and abilities, individually or in the aggregate, do not allow them to substantively participate in the operations of Nutra SA.  The Investors do not currently have the ability to dissolve Nutra SA or otherwise force the sale of all its assets.  They do have such rights in the future (Drag Along Rights as described above).  We will continue to evaluate our ability to control Nutra SA each reporting period.

Cash provided by operations in our Brazil segment is generally unavailable for distribution to our Corporate and USA segments pursuant to the terms of the LLC agreement.

XML

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2013

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 16. RELATED PARTY TRANSACTIONS

Transactions with Director Baruch Halpern

In January 2012, Baruch Halpern became a member of our board of directors.  Mr. Halpern is the principal in Halpern Capital, Inc. (HC).  Under a February 2011 financial advisor agreement we are obligated to pay HC success fees ranging from 2.5% to 5.0% of the consideration received from certain equity, convertible securities or debt transactions.  We must also issue warrants to purchase shares of common stock that equal from 2.5% to 5.0% of the consideration received in those transactions, divided by either the market price of the common stock or the conversion price of the securities issued in the transaction.  This agreement terminated April 1, 2012, however, we remain obligated to pay HC success fees and issue HC warrants on any transaction with an investor introduced by HC occurring though March 31, 2013.

In connection with the issuance of convertible debt in 2012 we issued the transactional warrants listed below under the terms of our financial advisor agreement with HC.

Date of Warrants	Number of Shares Under Warrants	Exercise Price of Warrant	Expiration Date of Warrant
		(1)
January 2012	1,250	Exercisable immediately at $30.00 per share (2)	January 2017
January 2012	5,563	Exercisable immediately at $20.00 per share (2)	January 2017
May 2012	63	Exercisable immediately at $20.00 per share (2)	May 2017
July 2012	711	Exercisable immediately at $14.00 per share	July 2017
August 2012	268	Exercisable immediately at $14.00 per share	August 2017

(1) As a result of the July 31, 2012, issuances of convertible debt and related warrants, the exercise prices on these transactional warrants were reduced under the full ratchet antidilution provisions included in the transactional warrants, to $14.00 per share and the number of underlying shares increased to equal the number of original underlying shares times the initial exercise price divided by $14.00 per share.

(2) In 2013, in connection with the Exchange, these warrants were cancelled in exchange for 75,377 shares of our common stock (with a fair value of $0.3 million at time of the Exchange), however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the replacement notes will increase from 5% to 10%.

Other transactions with Mr. Halpern, HC and Halpern Entities are summarized below (in thousands):

	2013		2012
Success fees earned by HC under financial advisor agreement payable in cash	$	-	$	164
Interest earned on convertible debt		306		243
Interest paid on convertible debt		288		242
Payments to HC relevant to HC's class 6 general unsecured creditor claim		-		256

As of December 31, 2013 and 2012, there was less than $0.1 million in accounts payable or accrued expenses due to Mr. Halpern, HC or the Halpern Entities.

In January 2012, we agreed to extend the expiration dates on certain liability warrants held by Mr. Halpern and others, for the purchase of 25,833 shares of common stock at an exercise price of $20.00 per share from July 2014 to January 2017.  The resulting $0.1 million change in the fair value of the warrants was expensed in other income (expense).

As a result of the amendment discussed in the Debt note to these financial statements, the terms of Mr. Halpern’s January 2012 subordinated convertible note were modified such that the maturity date was extended from January to July 2015, the exercise price on the related warrant was reduced from $24.00 per share to $16.00 per share and the number of underlying shares on those warrants was increased from 125,000 to 178,572.  Had the warrant not been amended, the exercise price would have reduced to $14.00 per share under the antidilution provisions in the warrant.

As a result of the Modification, the terms of the subordinated convertible notes beneficially owned by Mr. Halpern in the principal amount of $2.6 million were replaced with subordinated notes under the terms of the Modification.  As a result of the Exchange, the warrants for the purchase of up to 185,714 shares of common stock ($14.00 per share exercise price with a July 31, 2017 expiration), related to the subordinated convertible notes beneficially owned by Mr. Halpern, were cancelled in exchange for 634,679 shares of our common stock (with a fair value of $2.9 million at time of the Exchange), however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the replacement notes will increase from 5% to 10%.  Mr. Halpern received consideration in the Modification and Exchange consistent with other subordinated convertible note and warrant holders.  We recognized a gain on extinguishment of $0.4 million on the Modification and Exchange transactions with Mr. Halpern.

Transactions with Other Directors

In April 2012, Henk Hoogenkamp became a member of our board of directors.  Effective January 1, 2012, under a one-year independent contractor consulting agreement, we issued Mr. Hoogenkamp 5,000 shares of our common stock, which were to vest in twelve equal monthly installments during 2012.  In April 2012, in connection with Mr. Hoogenkamp’s appointment to the Board of Directors, we terminated the independent contractor agreement and agreed to immediately vest all of the 5,000 shares of common stock previously granted.  During 2013 and 2012, we paid and expensed less than $0.1 million for cash fees owed under the independent contractor agreements.  We expensed $0.1 million in both 2013 and 2012 for common stock issued under the independent contractor agreements.

W. John Short (CEO and director), Zanesville Partners Fund, LLC, which is beneficially owned by James C. Lintzenich (former director), and the Edward L. McMillan Revocable Trust, which is beneficially owned by Edward L. McMillan (former director), collectively invested $0.1 million in the January 2012 subordinated convertible notes and related warrants issuance.  During 2013 and 2012, we paid and expensed less than $0.1 million for interest on these three subordinated convertible notes.  Their notes were modified in the Modification and the related warrants were cancelled in the Exchange.

W. John Short, CEO and director, invested $50 thousand in the January 2012 subordinated convertible notes and related warrants and $25 thousand in the April 2013 subordinated convertible notes and related warrants.  During 2013 and 2012, we paid less than $1 thousand of interest on the convertible notes.  In June 2013, Mr. Short made a PIK Election for interest accruing under the notes from February 2013 through June 2014.  In connection with the election, we issued to Mr. Short 82 shares of common stock and a PIK warrant, currently with 234 underlying shares of common stock, and we increased the shares underlying Mr. Short’s convertible notes by 234 shares as payment for interest accruing under the convertible notes from February 2013 through October 2013.

XML

PRE-PETITION LIABILITIES

12 Months Ended

Dec. 31, 2013

PRE-PETITION LIABILITIES [Abstract]

PRE-PETITION LIABILITIES

NOTE 12. PRE-PETITION LIABILITIES

On November 10, 2009, we filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.  None of our subsidiaries were included in the bankruptcy filing.  In January 2012, we made our final $1.6 million distribution to the general unsecured creditors.

XML

INTANGIBLE ASSETS AND GOODWILL

12 Months Ended

Dec. 31, 2013

INTANGIBLE ASSETS AND GOODWILL [Abstract]

INTANGIBLE ASSETS AND GOODWILL

NOTE 8. INTANGIBLE ASSETS AND GOODWILL

All changes in goodwill between December 31, 2013 and December 31, 2012, relate to foreign currency translation. Intangible assets consist of the following (in thousands):

	USA Segment									Brazil Segment						Total
	Patents			Trademarks			Customer Lists			Trademarks			Customer Lists			Intangible Assets
December 31, 2013
Cost	$	1,697		$	48		$	2,677		$	2,964		$	1,084		$	8,470
Accumulated amortization		(1,170	)		(41	)		(2,466	)		(2,472	)		(904	)		(7,053	)
Net book value	$	527		$	7		$	211		$	492		$	180		$	1,417
December 31, 2012
Cost	$	1,697		$	48		$	2,677		$	3,418		$	1,250		$	9,090
Accumulated amortization		(1,029	)		(38	)		(2,222	)		(2,362	)		(864	)		(6,515	)
Net book value	$	668		$	10		$	455		$	1,056		$	386		$	2,575
Estimated useful lives	17 years			7 years			7 years			7 years			7 years

We purchased no intangible assets in 2013 or 2012.  All changes in the cost of Brazil segment intangibles are due to foreign currency translation.  Amortization expense is expected to be $0.9 million in 2014, $0.3 million in 2015, $0.1 million in 2016 and $0.1 million in 2017. 

XML

CONCENTRATION OF CREDIT RISK

12 Months Ended

Dec. 31, 2013

CONCENTRATION OF CREDIT RISK [Abstract]

CONCENTRATION OF CREDIT RISK

NOTE 6. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of trade accounts receivable.  We perform ongoing credit evaluations on our customers’ financial condition and generally do not require collateral.

One customer accounted for approximately 9% and 10% of our sales in 2013 and 2012 and 10% and 9% of our accounts receivable balances at December 31, 2013 and 2012.  A second customer accounted for approximately 5% and 11% of our sales in 2013 and 2012 and 16% and 30% of our accounts receivable balances at December 31, 2013 and 2012.  A third customer accounted for approximately 9% and 5% of our sales in 2013 and 2012 and 4% and 3% of our accounts receivable balances at December 31, 2013 and 2012.  A fourth customer accounted for approximately 6% and 7% of our sales in 2013 and 2012,  none of our outstanding accounts receivable at December 31, 2013, and 9% of our accounts receivable balances at December 31, 2012.

XML

PROPERTY

12 Months Ended

Dec. 31, 2013

PROPERTY [Abstract]

PROPERTY

NOTE 7. PROPERTY

Property consists of the following (in thousands):

	As of December 31,
	2013		2012		Estimated Useful Lives
Land	$	382	$	403
Furniture and fixtures		553		358	5-10 years
Plant		14,582		14,362	25-30 years, or life of lease
Computer and software		1,437		1,407	3-5 years
Leasehold improvements		200		189	3-7 years or life of lease
Machinery and equipment		14,557		15,053	5-10 years
Construction in progress		7,517		9,118
Subtotal		39,228		40,890
Less accumulated depreciation		14,270		12,433
Property, net	$	24,958	$	28,457

Our Lake Charles, Louisiana facility was built at a cost of $3.8 million to process rice bran from a rice milling company adjacent to the facility.  The facility is built on leased land which is owned by the rice milling company.  The facility was idled in May 2009 due to lack of orders.  We recorded a $2.3 million impairment loss on the facility in 2009.  The facility is not classified as held for sale due to potential alternative uses and because we are not aggressively marketing the property.  We evaluated, and continue to evaluate, alternate uses of the facility.  Depreciation on the facility has continued after the facility was idled.  As of December 31, 2013, the net book value of the idled facility included in property, net, was $1.0 million.

We also own equipment purchased in 2009 for use in the Lake Charles, Louisiana facility.  In 2013 and 2012, we recorded impairments of $0.3 million and $1.1 million on the Lake Charles equipment and the net carrying amount of this equipment at December 31, 2013 is $0.4 million.

XML

DEBT

12 Months Ended

Dec. 31, 2013

DEBT [Abstract]

DEBT

NOTE 9. DEBT

The following table summarizes current and long-term portions of debt (in thousands):

	2013		2012
Corporate segment:
Senior revolving note, net	$	1,988	$	-
Senior convertible debentures, net		-		1,048
Subordinated convertible notes, net		-		4,041
Subordinated notes, net		4,262		-
Other		-		28
		6,250		5,117
Brazil segment:
Capital expansion loans		4,795		5,555
Equipment financing		174		201
Working capital lines of credit		3,213		2,227
Advances on export letters of credit		2,386		3,953
Special tax programs		2,351		2,531
		12,919		14,467
Total debt		19,169		19,584
Current portion		8,250		8,003
Long-term portion	$	10,919	$	11,581

Required future minimum payments on our debt as of December 31, 2013, follow (in thousands).

	Corporate Segment			Brazil Segment		Total
2014	$	1,988		$	6,262	$	8,250
2015		-			1,767		1,767
2016		6,535			1,032		7,567
2017		-			1,005		1,005
2018		-			955		955
Thereafter		-			1,898		1,898
		8,523			12,919		21,442
Discount		(2,273	)		-		(2,273	)
Total debt	$	6,250		$	12,919	$	19,169

As of December 31, 2013, none of the agreements for our outstanding debt contain financial covenants, except for the senior convertible revolving note.  As of December 31, 2013, we were in compliance with those covenants.

Corporate Segment

2013 Senior Revolving Note

Under a 2013 revolving credit facility with TCA Global Credit Master Fund, LP (TCA), as amended, we may borrow up to $8 million, based on the amount of eligible accounts receivable we provide to secure the repayment of the amounts borrowed.  We expect the amount of our eligible receivables will limit our ability to borrow under this facility, such that our outstanding borrowings at any time are less than approximately $2.8 million.  Borrowings under the agreement are evidenced by a revolving note which accrues interest at the rate of 12% per year.  We owe TCA various other fees under the agreement that are expected to average approximately 7% of average borrowings per year.

USA segment accounts receivable, exclusive of our January 2014 acquired subsidiary H&N Distribution, Inc., collections are required to be directed to a TCA owned account.  Collections TCA receives, in excess of amounts due for interest and fees and mandatory minimum cumulative repayments, are treated as additional repayments and reduce amounts outstanding.  There are minimum repayments beginning in January 2014 and the note must be repaid in full by October 2014.  Minimum cumulative repayments are $1.1 million as of March 2014, $1.8 million as of June 2014 and $2.7 million as of September 2014.  Until cumulative repayments equal the required minimum, TCA may withhold 20% of collections.  We may request, generally on a weekly basis, that TCA advance us any amounts collected in excess of amounts (i) due for interest and fees and (ii) required to meet the minimum cumulative repayments.  During 2013, amounts outstanding under the agreement averaged $1.0 million.

During 2013, we borrowed $2.8 million under the TCA revolving note in three tranches.  The proceeds net of cash expenses totaled $2.5 million and were used to (i) pay down $0.4 million of debt, (ii) fund $0.9 million of investments in Nutra SA and (iii) for general corporate purposes.  In addition to cash expenses, we issued TCA 37,260 shares of our common stock with a combined market value of $0.5 million at the dates of issuance.  We also issued warrants to investment bankers with a fair value of $0.5 million at issuance for the purchase of 12,000 shares of common stock, exercisable at prices ranging from $16.00 to $16.80 per share, which expire in 2018.  The total $1.0 million costs incurred with the three tranche closings, consisting of $0.4 million of cash expenses and the $0.6 million fair value of the common stock and warrants were recorded as debt issuance costs in other long-term assets and are being amortized to interest expense over the term of the note.

In the first quarter of 2014, we redeemed $0.4 million of the shares of our common stock issued in connection with the three tranches and are required to redeem the remainder of the shares in the second quarter of 2014.  As of December 2013, the shares of common stock issued to TCA, are recorded as a liability at the $0.5 million redemption value of the shares.

TCA had the right to voluntarily convert upon an event of default, as defined in the agreement, all or any portion of the outstanding principal, interest and other amounts due under the agreement into shares of our common stock.  In December 2013, TCA agreed to remove this right from the agreements for a $0.1 million amendment fee, which was added to the principal of the note.

During the term of the TCA agreement, the Corporate and USA segments may not without TCA’s consent or approval, among other things, (i) incur certain new debt (ii) make any new investments, except capital expenditures less than $0.3 million per year, (iii) issue or redeem stock, (iv) declare or pay dividends or make other distributions to shareholders, and (v) make loans and distributions of assets to any persons, including affiliates.

In connection with the TCA transaction, our factoring agreement was Cancelled and we paid the $0.1 million outstanding balance on the agreement in the second quarter of 2013.

2013 Senior Convertible Debentures

In the first and second quarter of 2013, the holder of the debentures converted $0.1 million and $0.3 million of the outstanding principal into 7,000 shares and 21,429 shares of our common stock, at a conversion price of $14.00 per share.  We recognized, for each conversion, a loss on extinguishment of $0.1 million, representing the difference between the market values of the shares of common stock issued and the $0.1 million and $0.4 million carrying amounts of the debt (including the related derivative conversion liability), on the date of conversion.

Under a May 2013 amendment to the senior convertible debenture, we agreed to (i) prepay $0.3 million of the of the outstanding principal and (ii) issue 18,571 shares of common stock to the holder, and the holder agreed to share its  senior interest in its collateral pari passu with TCA.  The remaining $0.2 million principal was payable in equal monthly installments from July 2013 through December 2013.  Prior to the amendment, principal was due in equal monthly installments from June 2013 to January 2014.  We expensed the $0.3 million fair value of the shares issued in connection with the amendment and the $0.01 million cash amendment fees as loss on extinguishment.

2013 Subordinated Notes and Subordinated Convertible Notes

In 2013, the holders of our subordinated convertible notes agreed to amend their notes to reduce the interest rate to 5% from 10%, change the maturity of the notes to July 2016 (if there was a different maturity date) and to remove the conversion feature and antidilution protections upon the closing of an equity raise in excess of $7.0 million (Modification).  The notes remain secured by a junior interest in substantially all of our assets, excluding our interest in Nutra SA and RBT PRO, LLC.  Concurrently, certain warrant holders agreed to exchange warrants to purchase 496,060 shares of common stock for the future issuance of 1,554,734 shares of our common stock (Exchange).  Most of the warrants impacted (warrants to purchase 441,395 shares) were warrants issued to the note holders when their notes were originally issued and had contained antidilution protections which caused them to be carried at fair value on our balances sheets.  The former warrant holders committed to exchange their warrants, which were cancelled upon closing an equity raise of at least $7.0 million; however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the notes will increase to 10%.

We accounted for the issuance of the new notes and related obligation to issue stock as a significant modification upon the December 18, 2013 closing of an equity raise in excess of $7.0 million.  We recognized a $2.3 million loss on extinguishment for the difference between the fair values of the new subordinated notes and related obligation to issue stock and the total of (i) the fair values of the conversion features embedded in the old notes, (ii) the fair value of the old warrants and (iii) the carrying amount of the old notes and debt issuance costs.

In November 2013, an investor purchased subordinated notes in the principal amount of $0.5 million.  The notes mature July 2016 and bear interest payable quarterly at the rate of 5%.  We also agreed to issue 134,250 shares of common stock to this investor, however the shares will not be issued until after shareholders vote to approve an increase in our authorized shares of common stock.  If shareholders do not approve an increase to the authorized number of shares of common stock by July 1, 2014, the interest rate on the notes will increase to 10%.  The proceeds of $0.5 million were allocated between the debt ($0.1 million) and equity ($0.4 million) based on the relative fair value of the debt and the obligation to issue stock.  We recognized no income or expense upon the issuance of the debt.  As a result, we are recognizing interest expense on the debt at an effective interest rate of 81.1%.

In the second quarter of 2013, we issued subordinated convertible notes and related warrants, which are described in the chart below.

Issuance	Principal Amount of Notes (in thousands)		Creditor's Debt Conversion Right	Stated Annual Interest Rate on Debt			Maturity Date of Debt	Number of Shares Under Warrant		Exercise Price of Warrant	Expiration Date of Warrant
Subordinated Convertible Notes and Warrants	$	538	Convertible immediately at $14.00 per share		10	%	July 2015 or July 2016		38,400	Exercisable immediately at $16.00 per share	July 2017 or May 2018

The total of (i) the $0.5 million fair value of the conversion features issued, (ii) the $0.5 million fair value of the liability warrants issued and (iii) the $0.1 million fair value of our common stock issued, exceeded the $0.5 million proceeds from these issuances, therefore we recorded financing costs of $0.6 million in the second quarter of 2013.  The initial debt discounts recorded for the convertible notes equaled the principal amount of the notes at issuance, because the fair value at issuance of the conversion features and warrants exceeded the proceeds from these issuances.  The notes and related warrants were impacted by the Modification and Exchange described previously.  The $0.5 million of proceeds from issuance of the convertible notes and related warrants was used for repayment of debt and for general corporate purposes.

In May 2013, we entered into agreements to allow each holder of existing subordinated convertible notes and warrants to invest in additional notes and related warrants and which provided that each holder making an additional investment (i) receive 0.0125 shares of our common stock for each dollar invested and (ii) agree to extend the maturity date for all of their notes to July 2016.  Further, each holder of outstanding convertible notes could elect (PIK Election), in lieu of receiving cash interest payments otherwise payable though June 2014 on their existing convertible notes to receive (i) an increase in the number of shares of common stock underlying their notes (ii) an equity warrant to purchase shares of our common stock and (ii) 0.0125 shares of our common stock for each dollar of interest otherwise payable through June 2014.  Holders making an additional investment were deemed under the agreement to have made a PIK Election.

One holder made an additional investment in a subordinated convertible note and related warrant of $0.4 million in May 2013 (included in the issuances discussed two paragraphs above), and, as a result, (i) the maturity date on the holder’s outstanding convertible notes in the principal amount of $1.1 million was extended from July 2015 to July 2016 and (ii) we issued 5,000 shares of common stock to the holder.  No gain or loss was recognized as a result of the extension of the maturity date of the existing notes as the terms were not substantially different.

Other holders of convertible notes in the principal amount of $0.3 million made the PIK Election, without making an additional investment.

As a consequence of the PIK Elections, in 2013, we issued 3,026 shares of common stock with a fair value of $0.2 million.  In lieu of paying certain interest, we (i) increased the shares of common stock underlying the holders’ convertible notes and (ii) issued the holders warrants (PIK warrants) at an exercise price of $16.00 per share, and a May 2018 expiration.  In 2013, through the date of the Modification and Exchange we had increased note principal by $0.1 million, increased the shares of common stock underlying PIK warrants by 8,709 shares and increased the shares of common stock underlying the notes by 8,709 shares.

We recognized a loss on extinguishment for the difference between the fair value of the consideration issued and the accrued interest as of the date of the PIK election.  Changes in fair value from increases in the shares of common stock underlying the PIK warrants and underlying the related convertible notes, related to the PIK Elections were recorded as interest expense until the Modification and Exchange occurred.

2012 Senior Convertible Debenture and Subordinated Convertible Notes

In January 2012, we issued a senior convertible debenture and related warrant for $0.8 million, a $0.1 million discount from the debenture’s stated principal amount.  We received cash proceeds of $0.6 million, net of cash financing costs.  In the third quarter of 2012, this January 2012 debenture was exchanged for a July 2012 debenture with a stated principal amount of $1.0 million, representing the original principal amount plus interest which will accrue through the replacement debenture’s January 2014 maturity.  In July 2012, we also issued a new senior convertible debenture and related warrant and received $0.2 million in proceeds, net of financing costs.

The January and May 2012 subordinated convertible notes with a face amount of $4.4 million, and the related warrants, were issued in exchange for $1.8 million cash, net of issuance costs, and surrender of then outstanding convertible notes with original principal totaling $2.3 million and a related warrant (old notes and old warrant).  Interest was payable monthly at an annual rate of 10%.  The old notes and old warrant were held by Baruch Halpern, who became a director concurrent with the January 2012 transaction.  In exchange for surrendering the old notes and old warrant and an additional $0.1 million cash investment, we issued a $2.5 million subordinated convertible note and related warrant to a trust beneficially owned by Mr. Halpern (the Halpern Trust).

The July and August 2012 subordinated convertible notes with a face amount of $1.0 million, and the related warrants, were issued in exchange for $0.9 million cash, net of issuance costs.  The notes and warrants were issued to four investors who had purchased January and May 2012 subordinated convertible notes and warrants.  We issued a $0.1 million subordinated convertible note and related warrant to an entity beneficially owned by Mr. Halpern (together with the Halpern Trust referred to as the Halpern Entities).

We accounted for the July 2012 issuance of the replacement senior convertible debenture in the principal amount of $1.0 million and related warrant as a significant modification to the January 2012 debenture and related warrant.  We recognized a loss on extinguishment for the difference between the fair value of the senior convertible debenture and warrant issued and the total of (i) the fair values of the conversion features embedded in the January 2012 debenture (ii) the carrying amount of the old debenture (zero) and (iii) the proceeds received, net of issue costs.

We accounted for the January 2012 issuance of the $2.5 million subordinated convertible note and related warrant to the Halpern Trust as a significant modification to the old notes and warrant held by Mr. Halpern.  We recognized a loss on extinguishment for the difference between the fair value of the subordinated convertible note and warrant issued, and the total of (i) the fair values of the conversion features embedded in the old notes, (ii) the fair value of the old warrant, (iii) the carrying amount of the old notes and (iv) the proceeds received, net of issue costs.  The old notes’ embedded conversion features and the old warrant did not qualify as separate derivative liabilities and, therefore, we reduced equity by the January 2012 fair value of the embedded conversion features and warrant.

The other 2012 issuances of senior convertible debentures, subordinated convertible notes and related warrants were not accounted for as significant modifications and the $3.6 million proceeds from those issuances were allocated to convertible debt and warrants.  In each case, the fair value of the warrants and embedded conversion features exceeded the proceeds received, which resulted in the recognition of financing expense on the date of issuance.

The discount recorded on the subordinated convertible note held by the Halpern Trust and the replacement senior convertible debenture, and the related deferred finance costs were amortized to interest expense under the effective interest method.  As a result we were recognizing interest expense on the Halpern Trust subordinated convertible note at an effective interest rate of 20.9% and on the replacement senior convertible debenture at an effective interest rate of 25.1%.

The debt discounts on the other senior convertible debentures and subordinated convertible notes were also being amortized to interest expense under the effective interest method.  However, because the fair value at issuance of the conversion features and warrants exceeded the proceeds from these issuances, in each case, under the effective interest method, this will result in the debt discount being expensed when the principal of the convertible debt matures or is redeemed, in proportion to the principal reduction.  Deferred finance costs were also being amortized to interest expense under the effective interest method, in a similar fashion.

Changes in the fair value of the derivative conversion and warrant liabilities subsequent to issuance were recognized in change in fair value of derivative warrant and conversion liabilities in the statement of operations.  The changes in fair value of derivative liabilities as a result of the July 2012 amendment to the January 2012 and May 2012 subordinated convertible notes and related warrants, were also included in change in fair value of derivative warrant and conversion liabilities in the statement of operations.  As a result of a July 2012 amendment, the exercise price on the warrants related to the January 2012 and May 2012 subordinated convertible notes decreased from $24.00 per share to $16.00 per share and the number of underlying shares was increased proportionately.  In addition the terms of all of the subordinated convertible notes outstanding, were modified such that the maturity date was extended from January and May 2015 to July 2015.

The $2.4 million of the $3.6 million in proceeds from the 2012 issuances of convertible debt and related warrants were used to make the final distributions to the unsecured creditors in January 2012 and the remainder was used for general corporate purposes.

Brazil Segment

All Brazil segment debt is denominated in the Brazilian Real (R$), except advances on export letters of credit which are denominated in U.S. Dollars.

Capital Expansion Loans

In December 2011, Irgovel entered into agreements with the Bank of Brazil.  Under the agreements, Irgovel may borrow up to R$9.5 million (a total of $4.0 million based on the December 31, 2013, exchange rate).  The annual interest rate on the loans is 6.5%.  Interest is payable quarterly on the amounts outstanding and the maturity date of the loans is December 2021.  Irgovel must make monthly principal payments under each of the loans with the first payment due on January 2014.  Irgovel used R$1.5 million of the proceeds for working capital purposes and the remainder for the purchase of equipment and machinery.

In July 2012, Irgovel entered into a third agreement with the bank under which it borrowed R$1.7 million ($0.7 million based on the December 31, 2013, exchange rate) for the purchase of certain equipment at an annual interest rate of 5.5%.  Interest is payable quarterly on the amounts outstanding and the maturity date of the loans is July 2019.  Irgovel must make monthly principal payments under the loan with the first payment due August 2015.  The loan is secured by the related equipment.

Equipment Financing

Irgovel has entered into certain equipment financing arrangements with annual interest rates that range from 13.5% to 17.8%, and average 15.0%.  Interest and principal on this debt is payable monthly and payments extend through March 2017.  This debt is secured by the related equipment.

Working Capital Lines of Credit

Irgovel has working capital lines of credit secured by accounts receivable.  The total amount of borrowing cannot exceed 30%-110% of the collateral, depending on the agreement.  The annual interest rates on this debt range from 10.4% to 60.0%, and average 21.7%.  Principal maturities of amounts outstanding at December 31, 2013, extend through December 2015.

Advances on Export Letters of Credit

Irgovel obtains advances against certain accounts receivable backed by export letters of credit.  The annual interest rates on these advances range from 3.9% to 6.0%, and average 5.5%.  Principal maturities of amounts outstanding at December 31, 2013, extend through May 2014.

Special Tax Programs

Irgovel has unsecured notes payable for Brazilian federal and social security taxes under a special Brazilian government tax program.  Amounts due under the special tax program are part of an amnesty program relative to unpaid taxes that existed prior to our acquisition of Irgovel in 2008.  Principal and interest payments are due monthly through 2022.  Interest on the notes is payable monthly at the Brazilian SELIC target rate, which was 9.0% at December 31, 2013.

XML

EQUITY AND SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2013

EQUITY AND SHARE-BASED COMPENSATION [Abstract]

Summary of stock option and warrant activity

A summary of stock option and warrant activity for 2013 and 2012 follows.

	Options								Equity and Liability Warrants
	Shares Under Options				Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Shares Under Warrants				Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding, January 1, 2012		192,944			$	54.00		6.3		233,947			$	208.00		1.7
Granted		29,060				30.00				423,782				20.00
Impact of anti-dilution clauses		-		NA						518,720		NA
Impact of amendment		-		NA						78,215		NA
Exercised		-		NA						(25,015	)			20.00
Forfeited, expired or cancelled		(52,750	)			68.00				(422,880	)			86.00
Outstanding, December 31, 2012		169,254				32.00		6.3		806,769				24.00		3.5
Granted or issued		40,000				15.38				1,859,111				6.85
Impact of anti-dilution clauses		-		NA						385,292		NA
Impact of amendment		-		NA						(496,061	)	NA
Exercised		-		NA						-				-
Forfeited, expired or cancelled		(29,817	)			50.58				(148,829	)			66.92
Outstanding, December 31, 2013		179,437			$	24.28		6.2		2,406,282			$	6.33		4.5
Exercisable, December 31, 2013		157,012			$	25.23		5.9		2,320,567			$	6.32		4.4

Share-based compensation expenses included in selling, general and administrative expenses

Share-based compensation expenses related to options are included in selling, general and administrative expenses in the statements of operations, and consisted of the following (in thousands):

	2013		2012
Consultants	$	16	$	42
Directors		262		285
Employees		127		152
Executive officers		133		444
Total share-based compensation expense, options	$	538	$	923

Summary of option activity

The following table summarizes option activity during 2013 and 2012:

	Employees and Directors					Consultants
				Weighted					Weighted		Total
	Shares			Average		Shares			Average		Shares
	Underlying			Exercise		Underlying			Exercise		Underlying
	Options			Price		Options			Price		Options
Outstanding,  January 1, 2012		180,494		$	48.00		12,450		$	152.00		192,944
Granted		28,060			26.00		1,000			16.00		29,060
Forfeited, expired or cancelled		(50,250	)		58.00		(2,500	)		266.00		(52,750	)
Exercised		-		NA			-		NA			-
Outstanding, December 31, 2012		158,304			26.00		10,950			106.00		169,254
Granted		38,750			15.36		1,250			16.00		40,000
Forfeited, expired or cancelled		(27,317	)		27.75		(2,500	)		300.00		(29,817	)
Exercised		-		NA			-		NA			-
Outstanding, December 31, 2013		169,737		$	23.13		9,700		$	44.45		179,437
Exercisable, December 31, 2013		148,698		$	24.31		8,314		$	41.72		157,012

Weighted-average assumptions used in valuing stock options

As of December 31, 2013, our outstanding options have no intrinsic value. The average fair value of options granted was $11.18 per share in 2013 and $20.00 per share in 2012.  The following are the assumptions used in valuing stock options:

	2013	2012
Assumed volatility	119.2%-122.3%	104.4%-113.3%
	(121.1% weighted average)	(109.2% weighted average)
Assumed risk free interest rate	0.7%-1.4%	0.2%-1.0%
	(0.9% weighted average)	(0.9% weighted average)
Average expected life of options (in years)	6.2	6.1
Expected dividends	-	-
Forfeiture rate	5%	5%

Summary of information related to outstanding and exercisable options

The following table summarizes information related to outstanding and exercisable options:

		As of December 31, 2013
		Outstanding						Exercisable
Range of Exercise Prices		Shares Underlying Options		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Underlying Options		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	6.00 to $16.00		135,989		7.0	$	15.82		114,636		6.8	$	16.00
	28.00		1,457		7.2		28.00		1,457		8.2		28.00
	40.00		23,991		4.8		40.00		23,991		4.8		40.00
	60.00		15,000		1.0		60.00		15,000		1.0		60.00
	74.00		2,500		7.2		74.00		1,428		7.2		74.00
	242.00		500		2.0		242.00		500		2.0		242.00
	16.00 to $242.00		179,437		6.2	$	24.28		157,012		5.9	$	25.23

Summary of warrant activity

Certain equity issuance in 2013 and 2012 triggered the antidilution clauses in certain liability warrants and, as a result, we were required to lower the exercise price and increase the number of shares underlying certain liability warrants.  In addition, certain amendments required us to lower the exercise price and increase the numbers of shares underlying certain warrants.

	Equity Warrants							Liability Warrants
	Shares Underlying			Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Underlying			Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
Balance, January 1, 2011		17,372			3.5	$	60.00		216,575			1.5	$	220.00
Granted		-					-		423,782					20.00
Impact of antidilution clauses		-					-		518,720				NA
Impact of amendment		-					-		78,215				NA
Exercised		-					-		(25,015	)				20.00
Forfeited, expired or cancelled		(11,616	)				44.00		(411,264	)				88.00
Outstanding, December 31, 2012		5,756			2.4		90.00		801,013			3.5		24.00
Granted		1,820,711					6.66		38,400					16.00
Impact of antidilution clauses		-					-		385,292				NA
Impact of amendment		(8,711	)				-		(487,350	)			NA
Exercised		-					-		-				NA
Forfeited, expired or cancelled		(2,722	)				137.60		(146,107	)				65.60
Outstanding, December 31, 2013		1,815,034			5.0	$	6.69		591,248			2.9	$	5.24
Exercisable, December 31, 2013		1,729,319			5.0	$	6.69		591,248			2.9	$	5.24

Summary of information related to outstanding and exercisable warrants

The following table summarizes information related to outstanding and exercisable warrants:

			Outstanding						Exercisable
Range of Exercise Prices		Type of Warrant	Shares Under Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Shares Under Warrants		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	5.24	Liability		591,248		2.9	$	5.24		591,248		2.9	$	5.24
	6.55	Equity		1,800,001		5.0		6.55		1,714,286		5.0		6.55
	16.00 to $16.80	Equity		12,004		4.5		16.40		12,004		4.5		16.40
	46.80	Equity		3,029		2.9		46.80		3,029		2.9		46.80
				2,406,282		4.5	$	6.33		2,320,567		4.4	$	6.32

XML

INCOME TAXES (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
United States [Abstract]
Net operating loss carryforwards	$ 43,328,000	$ 41,374,000
Gain on sale of membership interests in Nutra SA	403,000	374,000
Stock options and warrants	1,199,000	1,144,000
Intangible assets	1,194,000	960,000
Property	6,832,000	5,651,000
Capitalized expenses	652,000	715,000
Convertible debt	(112,000)	(399,000)
Other	451,000	86,000
Deferred tax assets	53,947,000	49,905,000
Less: Valuation allowance	(53,947,000)	(49,905,000)
Brazil [Abstract]
Intangible assets	(228,000)	(490,000)
Property	(1,555,000)	(2,165,000)
Net operating loss carryforwards	2,381,000	960,000
Other	285,000	255,000
Net deferred tax asset (liability)	883,000	(1,440,000)
Less -valuation allowance	(883,000)	0
Net deferred tax liabilities	0	(1,440,000)
Deferred tax asset - current	0	234,000
Deferred tax liability - long-term	0	(1,674,000)
Change in valuation allowance	4,900,000	1,900,000
Valuation allowance	900,000
Change in net operating loss and other deferred changes	3,900,000	1,700,000
Impact of adjustments to capitalized expenses and stock option compensation	0	2,100,000
Loss before income taxes [Abstract]
Foreign	(6,832,000)	(5,051,000)
Domestic	(12,247,000)	(8,020,000)
Loss before income taxes	(19,079,000)	(13,071,000)
Foreign deferred tax benefit	1,400,000
U.S. tax provision or benefit	0	0
Federal statutory income tax rate (in hundredths)	34.00%	34.00%
Income Tax Reconciliation [Abstract]
Income tax benefit at federal statutory rate	(6,487,000)	(4,444,000)
Increase (decrease) resulting from [Abstract]
State tax benefit, net of federal tax effect	(653,000)	(251,000)
Change in valuation allowance	4,927,000	(1,926,000)
Adjustment to U.S. net operating losses	0	0
Adjustment to capitalized costs deferred balances	0	443,000
Adjustment to stock option compensation deferred balances	0	1,602,000
Reduction in deferred balances for forfeited, expired or cancelled options	255,000	602,000
Expiration of U.S. net operating losses	415,000	1,460,000
Nontaxable fair value adjustment	350,000	(1,843,000)
Nondeductible convertible debt issuance expenses	521,000	2,285,000
Impact of state rate changes	(677,000)	0
Nondeductible expenses	6,000	10,000
Foreign taxes	0	6,000
Adjustments to Brazil deferred balances	0	(222,000)
Adjustments to U.S. deferred balances	(96,000)	343,000
Income tax benefit	(1,439,000)	(1,935,000)
Federal [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	116,200,000
Operating loss carryforwards, expiration dates	from 2018 through 2033
State [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	68,400,000
Operating loss carryforwards, expiration dates	2014 through 2033
Impact of the changes	700,000
Brazil [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards	7,000,000
Expiring net operating losses [Member]
Operating Loss Carryforwards [Line Items]
Impact of the changes	400,000
Other deferred items [Member]
Operating Loss Carryforwards [Line Items]
Impact of the changes	$ 200,000

XML

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2013

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 14. COMMITMENTS AND CONTINGENCIES

Employment Contracts

We have entered into employment and other agreements with certain executives and other employees that provide for compensation and certain other benefits.  These agreements provide for severance payments under certain circumstances.

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.

Leases

We lease certain properties under various operating lease arrangements that expire over the next twenty one years.  These leases generally provide us with the option to renew the lease at the end of the lease term.  Future minimum payments under these commitments as of December 31, 2013, are as follows: $0.3 million for 2014; $0.3 million in 2015; $0.3 million in 2016, $0.1 million in 2017, $0.1 million in 2018 and $1.1 million thereafter.  We incurred lease expense of $0.5 million in 2013 and $0.4 million in 2012.

Litigation

In addition to the matters discussed below, from time to time we are involved in litigation incidental to the conduct of our business.  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.

Defense costs are expensed as incurred and are included in professional fees.

Irgovel Purchase

On August 28, 2008, former Irgovel stockholder David Resyng filed an indemnification suit against Irgovel, Osmar Brito and the remaining former Irgovel stockholders (Sellers), requesting:  (i) the freezing of the escrow account maintained in connection with the transfer of Irgovel’s corporate control to us and the presentation of all documentation related to the transaction, and (ii) damages in the amount of the difference between (a) the sum received by David Resyng in connection with the judicial settlement agreement executed in the action for the partial dissolution of the limited liability company filed by David Resyng against Irgovel and the Sellers and (b) the amount received by the Sellers in connection with the sale of Irgovel’s corporate control to us, in addition to moral damages as determined in the court’s discretion.  The amount of damage claimed by Mr. Resyng is approximately $3 million.

We believe that the filing of the above lawsuit is a fundamental default of the obligations undertaken by the Sellers under the Quotas Purchase Agreement for the transfer of Irgovel’s corporate control, executed by and among the Sellers and us on January 31, 2008 (Purchase Agreement).  Consequently, we believe that the responsibility for any indemnity, costs and expenses incurred or that may come to be incurred by Irgovel and/or us in connection with the above lawsuit is the sole responsibility of the Sellers.

On February 6, 2009, the Sellers filed a collection lawsuit against us seeking payment of the second installment of the purchase price under the Purchase Agreement, which the Sellers allege is approximately $1.0 million.  We have withheld payment of the second installment pending resolution of the Resyng lawsuit noted above.  Our parent company has not been served with any formal notices in regard to this matter.  To date, only Irgovel has received formal legal notice.  In addition, the Purchase Agreement requires that all disputes between us and the Sellers be adjudicated through arbitration.  As part of the Purchase Agreement, $2.0 million was deposited into an escrow account to cover contingencies with the net remaining funds payable to the Sellers upon resolution of all contingencies.  We believe any payout due to the lawsuit will be made out of the escrow account.  As of December 31 2013 and, 2012, the balance in the escrow account was $1.9 million and is included in restricted cash in our balance sheets.  There is an escrow liability related to the lawsuit in accrued expenses on our balance sheets as of December, 2013 and, 2012, totaling $1.4 million. When the escrow account was funded, we established an accrued liability equal to the amount of the escrow for contingencies and the net balance due to the Sellers under the terms of the Purchase Agreement.  As of December 31, 2013, $0.7 million of pre-acquisition contingencies have either been paid or specifically identified and accrued, leaving a balance of $1.4 million to settle any remaining contingencies.  We believe that there is no additional material exposure as any amounts determined to be owed as a result of the above noted litigation and contingencies will be covered by the escrow account. We agreed to pay to Nutra SA ninety percent of any funds received from the escrow account in excess of the sum of (i) $1.0 million and (ii) our contributions to Nutra SA made after March 25, 2014, with no resulting change in our Nutra SA voting rights.

Diabco Life Sciences, LLC

In January 2012, we filed a complaint in the Superior Court of California, Sacramento County, seeking damages arising out of Diabco Life Sciences, LLC’s (Diabco) breach of a 2008 promissory note in the principal amount of $0.5 million.  At trial August 2013, Diabco stipulated that total damages through July 2013, including interest and late fees, amounted to $0.9 million.  In September 2013, the court issued its tentative statement of decision indicating that judgment will be entered in our favor in the amount of $0.9 million as of July 2013, plus interest.  In January 2014, the court issued its final judgment in the amount of $1.0 million.  Diabco has filed a notice of appeal with the court challenging the final judgment.  We have no receivable from Diabco recorded in the accompanying financial statements as recovery of the judgment is not reasonably assured.

XML

H&N ACQUISITION

12 Months Ended

Dec. 31, 2013

H&N ACQUISITION [Abstract]

H&N ACQUISITION

NOTE 19.  H&N ACQUISITION

In January 2014, we purchased all of the outstanding shares of H&N Distribution, Inc. (H&N) for $2.0 million in cash plus promissory notes for $3.3 million with an annual interest rate of 1%.  We have the option to pay principal and accrued interest under the notes in either cash or in our common stock, however, if we issue shares to our former warrants holders upon an increase in authorized shares, under the terms of the Exchange, then we must settle any outstanding balance on the notes at that time through the issuance of shares of our common stock.  In the event we elect to pay the notes in our common stock, payment must be made by January 2015.  The number of shares issued to the former H&N shareholders under the notes will be based on the volume weighted average price of our common stock for the thirty trading days ending on the second business day immediately before our election to pay the note in shares of our common stock, but in no event shall such price be lower than $6.00 or higher than $12.00.  If we elect to pay the note in cash, we agree to make equal quarterly payments commencing on March 31, 2015 and ending on December 31, 2018.  During this payment period, the annual interest rate under the notes will increase from 1% to 5% and shall further increase to 10% after January 2016.  We also entered into a five-year employment agreement with H&N’s former chief executive officer and founder, Mark McKnight.

We have not yet finalized the fair value allocation of assets and liabilities acquired from H&N.

XML

EQUITY METHOD INVESTMENT (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Schedule of Equity Method Investments [Line Items]
Ownership interest sold (in hundredths)	50.00%
Sales proceeds from membership interest	$ 1.2
Period considered for purchase of capital stock in case of decline of right	2 months
Exercise price for option as percentage of capital investment (in hundredths)	25.00%
Option period one percentage [Member]
Schedule of Equity Method Investments [Line Items]
Percentage right to purchase capital stock (in hundredths)	45.00%
Percentage of capital stock to be purchased in case of decline of right (in hundredths)	45.00%
Option period two percentage [Member]
Schedule of Equity Method Investments [Line Items]
Percentage right to purchase capital stock (in hundredths)	25.00%
Percentage of capital stock to be purchased in case of decline of right (in hundredths)	25.00%

XML

REDEEMABLE NONCONTROLLING INTEREST IN NUTRA SA (Details) (USD $)	12 Months Ended			12 Months Ended	3 Months Ended	12 Months Ended			12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Irgovel [Member]	Sep. 30, 2013 Nutra SA [Member]	Dec. 31, 2013 Nutra SA [Member]	Dec. 31, 2012 Nutra SA [Member]	Mar. 25, 2014 Nutra SA [Member] Subsequent Event [Member]	Dec. 31, 2013 Nutra SA [Member] Equipment [Member]	Dec. 31, 2013 NutraCea [Member] Representative	Dec. 31, 2012 NutraCea [Member]	Dec. 31, 2013 Investors [Member] Representative	Dec. 31, 2013 Investors [Member] Nutra SA [Member]	Mar. 25, 2014 Investors [Member] Nutra SA [Member] Subsequent Event [Member]	Dec. 31, 2013 Investors [Member] Nutra SA [Member] Average [Member]	Dec. 31, 2012 Investors [Member] Nutra SA [Member] Average [Member]
Summary of carrying amounts included in consolidated balance sheets [Abstract]
Cash and cash equivalents	$ 5,091,000	$ 1,040,000	$ 3,329,000			$ 1,686,000	$ 562,000
Other current assets (restricted $1,907 and $2,505)	833,000	975,000				4,546,000	5,675,000
Property, net (restricted $4,969 and $5,757)	24,958,000	28,457,000				17,672,000	19,690,000
Goodwill and intangibles, net						4,812,000	6,215,000
Other noncurrent assets	532,000	385,000				27,000	54,000
Total assets	44,578,000	47,006,000				28,743,000	32,196,000
Current liabilities	18,961,000	15,533,000				6,514,000	5,141,000
Current portion of long-term debt (nonrecourse)	8,250,000	8,003,000				6,262,000	7,013,000
Long-term debt, less current portion (nonrecourse)	10,919,000	11,581,000				6,658,000	7,454,000
Other noncurrent liabilities						0	1,871,000
Total liabilities	31,565,000	33,308,000				19,434,000	21,479,000
Restricted portion of other current assets						1,907,000	2,505,000
Variable interest entity restricted portion of property, net						4,969,000	5,757,000
Summary of changes for redeemable noncontrolling interest [Roll Forward]
Redeemable noncontrolling interest in Nutra SA, beginning of period	9,262,000									9,262,000	9,918,000
Investors' interest in net loss of Nutra SA										(2,619,000)	(1,627,000)
Investors' interest in accumulated other comprehensive income of Nutra SA										(666,000)	(529,000)
Investors' purchase of additional units										1,200,000	1,500,000
Redeemable noncontrolling interest in Nutra SA, end of period	7,177,000									7,177,000	9,262,000
Ownership percentage of noncontrolling owner (in hundredths)								56.70%					45.90%	43.30%	49.00%	49.00%
Cash transferred to Nutra SA					100,000	3,300,000			800,000
Historical cost of equipment returned						200,000
Yield earned beginning in January, 2014 (in hundredths)													4.00%
Distributable cash terms	(i) first, to the Investors in an amount equal to a multiplier (Preference Multiple) times the Investors’ capital contributions, less the aggregate amount of distributions paid to the Investors, (ii) second, to us in an amount equal to two times the capital contributions made by us, less the aggregate amount of distributions paid to us; and (iii) third, to us and the Investors in proportion to our respective membership interests.
Number of representatives in management committee										3		2
Number of representatives in management committee upon default										2		3
Terms of default	A Nutra SA business plan deviation, defined as the occurrence in 2014 of a 20% unfavorable variation in two out of three of the following: (i) revenue, (ii) earnings before interest, taxes, depreciation and amortization (EBITDA) or (iii) debt, A Nutra SA EBITDA default, which is defined as the failure to achieve 85% of planned EBITDA for three consecutive quarters, A material problem, which is defined as a material problem in a facility (unrelated to changes in law, weather, etc.) likely to cause a Nutra SA business plan deviation or Nutra SA EBITDA default, which results in damages not at least 80% covered by insurance proceeds, Failure of Irgovel to meet minimum quarterly processing targets beginning in the second quarter of 2014, or Failure of Irgovel to achieve EBITDA of at least $4.0 million in any year after 2014.
Threshold percentage of unfavorable variance for default calculation (in hundredths)						20.00%
Threshold percentage of planned EBITDA for default calculation (in hundredths)						85.00%
Threshold percentage of damages not covered by insurance proceeds for a material problem, minimum (in hundredths)						80.00%
Minimum EBITDA triggering default status				4,000,000
Terms of qualifying event	Any event prior to September 16, 2014, which results, or will result, in (i) a person or group of persons exercising the right to appoint members to our board of directors holding one third or more of the votes of all board members, (ii) the sale, exchange, pledge or use as guarantee of one half or more of our ownership interest in Nutra SA to a third party or (iii) the bankruptcy of RiceBran Technologies or Nutra SA.
Drag Along Right termination amount													$ 50,000,000

XML

Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements of Comprehensive Loss [Abstract]
Net loss	$ (17,640)	$ (11,136)
Other comprehensive loss - foreign currency translation, net of tax	(1,362)	(1,081)
Comprehensive loss, net of tax	(19,002)	(12,217)
Comprehensive loss attributable to noncontrolling interest, net of tax	3,285	2,156
Total comprehensive loss attributable to RiceBran Technologies shareholders	$ (15,717)	$ (10,061)

XML

LOSS PER SHARE (EPS)

12 Months Ended

Dec. 31, 2013

LOSS PER SHARE (EPS) [Abstract]

LOSS PER SHARE (EPS)

NOTE 3. LOSS PER SHARE (EPS)

Basic EPS is computed by dividing net income (loss) attributable to RiceBran Technologies shareholders by the weighted average number of common shares outstanding during all periods presented.  Shares underlying options, warrants and convertible debt are excluded from the basic EPS calculation but are considered in calculating diluted EPS.

Diluted EPS is computed by dividing the net income (loss) attributable to RiceBran Technologies shareholders by the weighted average number of shares outstanding during the period increased by the number of additional shares that would have been outstanding if the impact of assumed exercises and conversions is dilutive.  The dilutive effect of outstanding options and warrants is calculated using the treasury stock method.  The dilutive effect of outstanding convertible debt is calculated using the if-converted method.

Below are reconciliations of the numerators and denominators in the EPS computations.

	2013			2012
NUMERATOR (in thousands):
Basic and diluted - net loss attributable to RiceBran Technologies shareholders	$	(15,021	)	$	(9,509	)
DENOMINATOR:
Basic EPS - weighted average number of shares outstanding		1,160,196			1,023,412
Effect of dilutive securities outstanding		-			-
Diluted EPS - weighted average number of shares outstanding		1,160,196			1,023,412
Number of shares of common stock which could be purchased with weighted average outstanding securities not included in diluted EPS because effect would be antidilutive-Stock options (average exercise price of $26.90 and $48.00 )		179,493			191,187
Warrants (average exercise price of $17.71 and $62.00)		809,311			736,753
Convertible notes (average conversion price of $14.00 and $16.90)		414,683			334,709

The impacts of potentially dilutive securities outstanding at December 31, 2013 and 2012, were not included in the calculation of diluted EPS in 2013 and 2012 because to do so would be antidilutive.  Those securities listed in the table above which were antidilutive in 2013 and 2012, which remain outstanding, could potentially dilute EPS in the future.

XML

H&N ACQUISITION (Details) (H and N [Member], Subsequent Event [Member], USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Business Acquisition [Line Items]
Amount of outstanding shares purchased	$ 2.0
Amount payable through promissory note	$ 3.3
Promissory note expiration date	2015
Number of trading days	30 days
Additional increase in annual interest rate after January 2016	10.00%
Period of employment contract	5 years
Minimum [Member]
Business Acquisition [Line Items]
Annual interest rate	1.00%
Shares of common stock	$ 6.00
Maximum [Member]
Business Acquisition [Line Items]
Annual interest rate	5.00%
Shares of common stock	$ 12.00

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Principles of Consolidation

Principles of Consolidation – The consolidated financial statements include the accounts of RiceBran Technologies and all subsidiaries in which we have a controlling interest.  All significant inter-company accounts and transactions are eliminated in consolidation.  Noncontrolling interests in our subsidiaries are recorded net of tax as net earnings (loss) attributable to noncontrolling interests.

Foreign Currencies

Foreign Currencies - The consolidated financial statements are presented in our reporting currency, U.S. Dollars.  The functional currency for Irgovel is the Brazilian Real.  The balance sheet of Irgovel is translated into U.S. Dollars using the exchange rate in effect at the balance sheet date.  Irgovel’s revenues and expenses are translated using the average exchange rates in effect during the period.  Translation differences are recorded in accumulated other comprehensive income (loss) as foreign currency translation.  Gains or losses on transactions denominated in a currency other than the subsidiaries’ functional currency which arise as a result of changes in foreign exchange rates are recorded as foreign exchange gain or loss in the statements of operations.

Cash and Cash Equivalents

Cash and Cash Equivalents – We consider all highly liquid investments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents.  As of December 31, 2013, we maintained our cash, including restricted cash, and cash equivalents, with major banks.  We maintain cash in bank accounts in amounts which at times may exceed federally insured limits.  We have not experienced any losses on such accounts.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts – Accounts receivable represent amounts receivable on trade accounts.  The allowance for doubtful accounts is based on our assessment of the collectability of customer accounts and the aging of accounts receivable.  We analyze the aging of customer accounts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts.  From period to period, differences in judgments or estimates utilized may result in material differences in the amount and timing of the provision for doubtful accounts.  We periodically evaluate our credit policy to ensure that the customers are worthy of terms and support our business plans.

Inventories

Inventories - Inventories are stated at the lower of cost or market, with cost determined by the first-in, first-out method.  In the USA segment, we employ a full absorption procedure using standard cost techniques.  The standards are customarily reviewed and adjusted annually so that they are materially consistent with actual purchase and production costs.  In the Brazil segment we use actual average purchase and production costs.  Provisions for potentially obsolete or slow moving inventory are made based upon our analysis of inventory levels, historical obsolescence and future sales forecasts.

Long-Lived Assets, Intangible Assets and Goodwill

Long-Lived Assets, Intangible Assets and Goodwill – Long-lived assets, consisting primarily of property, intangible assets, and goodwill, comprise a significant portion of our total assets.  Property is stated at cost less accumulated depreciation.  Depreciation is computed on the straight-line basis over the estimated useful lives.  Expenditures for maintenance and repairs are charged to operations as incurred while renewals and betterments are capitalized.  Gains or losses on the sale of property and equipment are reflected in the statements of operations.  Intangible assets are stated at cost less accumulated amortization.

We test goodwill and other indefinite-lived intangible assets for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value.  Our annual qualitative or quantitative assessments involve determining an estimate of the fair value of our reporting units in order to evaluate whether an impairment of the current carrying amount of goodwill and other indefinite-lived intangible assets exists.  A qualitative assessment evaluates whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step quantitative goodwill impairment test.  The first step of a quantitative goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired, and, thus, the second step of the quantitative impairment test is unnecessary.  If the carrying amount of a reporting unit exceeds its fair value, the second step of the quantitative goodwill impairment test is performed to measure the amount of impairment loss, if any.  Fair values are derived based on an evaluation of past and expected future performance of our reporting units.

In assessing the recoverability of goodwill, we make estimates and assumptions about sales, operating margin, terminal growth rates and discount rates based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data.  While our annual impairment testing as of December 31, 2013, supported the carrying amount of goodwill, we may be required to reevaluate the carrying amount in future periods, thus utilizing different assumptions that reflect the then current market conditions and expectations, and, therefore, we could conclude that an impairment has occurred.

We review our long-lived assets, which include intangible assets subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss is recognized when the undiscounted future cash flows estimated to be generated by the asset to be held and used are not sufficient to recover the unamortized balance of the asset.  An impairment loss is recognized based on the difference between the carrying values and estimated fair value.  The estimated fair value is determined based on either the discounted future cash flows or other appropriate fair value methods with the amount of any such deficiency charged to operations in the current year.  Estimates of future cash flows are based on many factors, including current operating results, expected market trends and competitive influences.  We also evaluate the amortization periods assigned to its intangible assets to determine whether events or changes in circumstances warrant revised estimates of useful lives. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value, less estimated costs to sell.

Revenue Recognition

Revenue Recognition – We recognize revenue for product sales when title and risk of loss pass to our customers, generally upon shipment for USA segment customers and Brazil segment international customers and upon customer receipt for Brazil segment domestic customers.  Each transaction is evaluated to determine if all of the following four criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the selling price is fixed and determinable; and (iv) collectability is reasonably assured.  If any of the above criteria cannot be satisfied then such a transaction is not recorded as revenue, or is recorded as deferred revenue and recognized only when the sales cycle is complete and payment is either received or becomes reasonably assured.  Changes in judgments and estimates regarding the application of the above mentioned four criteria might result in a change in the timing or amount of revenue recognized by such transactions.

We make provisions for estimated returns, discounts and price adjustments when they are reasonably estimable.  Revenues on the statements of operations are net of provisions for estimated returns, routine sales discounts, volume allowances and adjustments.  Revenues on the statements of operations are also net of taxes collected from customers and remitted to governmental authorities.

Amounts billed to a customer in a sale transaction related to shipping costs are reported as revenues and the related costs incurred for shipping are included in cost of goods sold.

Research and Development

Research and Development – Research and development expenses include internal and external costs.  Internal costs include salaries and employment related expenses.  External expenses consist of costs associated with product development.  All such costs are charged to expense in the period they are incurred.

Derivative Conversion Liabilities

Derivative Conversion Liabilities – We had certain convertible debt outstanding that contained antidilution clauses.  Under these clauses, we were required to lower the conversion price on the convertible debt based on certain issuances of our common stock, awards of options to employees, additional issuance of warrants and/or other convertible instruments below certain conversion prices.  We accounted for the conversion liabilities associated with these antidilution clauses as liability instruments, separate from the host debt.  The conversion liabilities were classified as debt on our consolidated balance sheets.  These conversion liabilities were valued using the lattice model each reporting period and the resultant change in fair value was recorded in the statements of operations in other income (expense).

Derivative Warrant Liabilities

Derivative Warrant Liabilities –We have certain warrant agreements in effect that contain antidilution clauses.  Under these clauses, we may be required to lower the exercise price on these warrants and issue additional warrants based on future issuances of our common stock and awards of options to employees, additional issuance of warrants and/or other convertible instruments below certain exercise prices.  We account for the warrants with these antidilution clauses as liability instruments.  These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations in other income (expense).

Share-Based Compensation

Share-Based Compensation – Share-based compensation expense for employees is calculated at the grant date using the Black-Scholes-Merton valuation model based on awards ultimately expected to vest, reduced for estimated forfeitures, and expensed on a straight-line basis over the service period of the grant.  Forfeitures are estimated at the time of grant based on our historical forfeiture experience and are revised in subsequent periods if actual forfeitures differ from those estimates.  The Black-Scholes-Merton option pricing model requires us to estimate key assumptions such as expected life, volatility, risk-free interest rates and dividend yield to determine the fair value of share-based awards, based on both historical information and management’s judgment regarding market factors and trends.  We treat options granted to employees of foreign subsidiaries as equity options.  We will use alternative valuation models if grants have characteristics that cannot be reasonably estimated using the Black-Scholes-Merton model.

We account for share-based compensation awards granted to non-employees and consultants by determining the fair value of the awards granted at either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measured.  Generally we value options granted to non-employees and consultants using the Black-Scholes-Merton valuation model.  If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of (i) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty's performance is complete.  The expense associated with stock awards issued to consultants or other third parties are recognized over the term of service.  In the event services are terminated early or we require no specific future performance, the entire amount is expensed.  The value is re-measured each reporting period over the requisite service period.

Income Taxes

Income Taxes – We account for income taxes by recording a deferred tax asset or liability for the recognition of future deductible or taxable amounts and operating loss and tax credit carryforwards.  Deferred tax expense or benefit is recognized as a result of timing differences between the recognition of assets and liabilities for financial reporting and tax purposes during the year.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards.  A valuation allowance is established, when necessary, to reduce that deferred tax asset if it is more likely than not that the related tax benefits will not be realized.

Use of Estimates

Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.  Because of the uncertainty inherent in such estimates, actual results could differ from those estimates.

Reclassifications

Reclassifications – Certain reclassifications have been made to amounts reported for the prior year to achieve consistent presentation with the current year.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

There are no recent accounting pronouncements that are applicable to us which could potentially have a material impact on our financial statements.

XML

FAIR VALUE MEASUREMENT (Tables)

12 Months Ended

Dec. 31, 2013

FAIR VALUE MEASUREMENT [Abstract]

Fair values by input hierarchy of items measured at fair value on a recurring basis

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
December 31, 2013
Derivative warrant liabilities	(1)	$	-	$	-	$	(1,685	)	$	(1,685	)
Total liabilities at fair value		$	-	$	-	$	(1,685	)	$	(1,685	)
December 31, 2012
Derivative warrant liabilities	(1)	$	-	$	-	$	(4,520	)	$	(4,520	)
Derivative conversion liabilities	(2)		-		-		(2,199	)		(2,199	)
Total liabilities at fair value		$	-	$	-	$	(6,719	)	$	(6,719	)

(1) These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current exercise price of the warrants.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the warrant.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2013		December 31, 2012
Risk-free interest rate		0.1% - 0.6%		0.1% - 0.7%
	(0.5% weighted average)		(0.6% weighted average)
Expected volatility		107%		93%

(2) These conversion liabilities were valued using a lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current conversion price of the debt.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the underlying debt.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2012
Risk-free interest rate		0.2%-0.3%
	(0.3% weighted average)
Expected volatility		93%

Additional assumptions used to calculate fair value

(1) These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current exercise price of the warrants.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the warrant.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2013		December 31, 2012
Risk-free interest rate		0.1% - 0.6%		0.1% - 0.7%
	(0.5% weighted average)		(0.6% weighted average)
Expected volatility		107%		93%

(2) These conversion liabilities were valued using a lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current conversion price of the debt.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the underlying debt.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2012
Risk-free interest rate		0.2%-0.3%
	(0.3% weighted average)
Expected volatility		93%

Changes in level 3 items measured at fair value

The following tables summarize the changes in level 3 items measured at fair value on a recurring basis (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
2013					(1	)
Derivative warrant liability	$	(4,520	)	$	(950	)	$	(575	)	$	4,360	(2)	$	(1,685	)	$	(372	)
Derivative conversion liability		(2,199	)		(80	)		(598	)		2,877	(3)		-		NA
Total Level 3 fair value	$	(6,719	)	$	(1,030	)	$	(1,173	)	$	7,237		$	(1,685	)	$	(372	)
2012
Derivative warrant liability	$	(1,296	)	$	3,048		$	(6,983	)	$	711	(4)	$	(4,520	)	$	3,320
Derivative conversion liability		-			2,372			(4,466	)		(105	) (5)		(2,199	)		2,372
Total Level 3 fair value	$	(1,296	)	$	5,420		$	(11,449	)	$	606		$	(6,719	)	$	5,692

(1) Included in change in fair value of derivative warrant and conversion liabilities in our consolidated statements of operations.

(2) Represents fair value of warrants cancelled in connection with the Exchange.

(3) Represents $2.8 million fair value of conversion liabilities when eliminated in connection with the Modification and $0.1 million as a result of conversions of debt.

(4) Represents transfers to equity as a result of a holder exercising a warrant.

(5) Represents an adjustment to loss on extinguishment as a result of issuing a replacement senior convertible debenture.

Fair values by input hierarchy measured at fair value on a nonrecurring basis

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

		As of December 31, 2013								2013 Impairment
		Level 1		Level 2		Level 3		Total		Losses
										(1)
Property, net	(1)	$	-	$	-	$	394	$	394	$	300
Property, net		$	-	$	-	$	394	$	394	$	300

		As of December 31, 2012								2012 Impairment
		Level 1		Level 2		Level 3		Total		Losses
										(1)
Property, net	(1)	$	-	$	-	$	1,058	$	1,058	$	1,069
Property, net		$	-	$	-	$	1,058	$	1,058	$	1,069

(1) Machinery and equipment not currently in use was evaluated for impairment and as a result was written down to estimated fair value in the first quarter of 2013 and the second quarter of 2012. Fair value is an estimate of net realizable value comprised of an estimate of proceeds from sale, based on an internal evaluation of market conditions, less estimated costs to sell. The estimate of net realizable value is subject to change.

XML

INCOME TAXES

12 Months Ended

Dec. 31, 2013

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 13. INCOME TAXES

Deferred tax assets (liabilities) are comprised of the following (in thousands):

	As of December 31,
	2013			2012
United States
Net operating loss carryforwards	$	43,328		$	41,374
Gain on sale of membership interests in Nutra SA		403			374
Stock options and warrants		1,199			1,144
Intangible assets		1,194			960
Property		6,832			5,651
Capitalized expenses		652			715
Convertible debt		(112	)		(399	)
Other		451			86
Deferred tax assets		53,947			49,905
Less: Valuation allowance		(53,947	)		(49,905	)
		-			-
Brazil
Intangible assets		(228	)		(490	)
Property		(1,555	)		(2,165	)
Net operating loss carryforwards		2,381			960
Other		285			255
Net deferred tax asset (liability)		883			(1,440	)
Less-valuation allowance		(883	)		-
	$	-		$	(1,440	)
Deferred tax asset - current	$	-		$	234
Deferred tax liability - long-term		-			(1,674	)
	$	-		$	(1,440	)

Deferred taxes arise from temporary differences in the recognition of certain expenses for tax and financial reporting purposes.  We have determined it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Accordingly we have provided a valuation allowance for deferred tax assets.  Our valuation allowance is on U.S. and Brazil deferred tax assets.  The change in valuation allowance of $4.9 million in 2013 is due to (i) $3.9 million in net operating loss and (ii) $0.7 million from the impact of state rate changes, and (ii) $0.9 million for the establishment of a valuation allowance against Brazil deferred tax assets, offset by (i) the $0.4 million impact of expiring net operating losses and (ii) $0.2 million of other deferred items.  The change in valuation allowance of $1.9 million in 2012 is due to (i) $1.7 million in net operating loss and other deferred changes from 2012 operations, offset by (ii) the $1.5 million impact of expiring net operating losses and (iii) the $2.1 million impact of adjustments to capitalized expenses and stock option compensation.

As of December 31, 2013, net operating loss carryforwards for U.S. federal tax purposes totaled $116.2 million and expire at various dates from 2018 through 2033.  Net operating loss carryforwards for state tax purposes totaled $68.4 million as of December 31, 2013, and expire at various dates from 2014 through 2033.  As of December 31, 2013, net operating loss carryforwards for Brazil tax purposes totaled $7.0 million and do not expire but may be subject to substantial annual limitations (generally 30% of taxable income in any year.).

Utilization of net operating loss carryforwards may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986, as amended and similar state regulations.  The annual limitation may result in the expiration of substantial net operating loss carryforwards before utilization.

We are subject to taxation in the U.S. and various states.  We record liabilities for income tax contingencies based on our best estimate of the underlying exposures.  We are open for audit by the IRS for years after 2010 and, generally, by U.S. state tax jurisdictions after 2009.  We are open for audit by the Brazilian tax authorities for years after 2009.

Loss before income taxes is comprised of the following (in thousands):

	2013			2012
Foreign	$	(6,832	)	$	(5,051	)
Domestic		(12,247	)		(8,020	)
Loss before income taxes	$	(19,079	)	$	(13,071	)

Foreign earnings are assumed to be permanently reinvested.  U.S. federal income taxes have not been provided on undistributed earnings of our foreign subsidiary.

The income tax benefit of $1.4 million in 2013 and $1.9 million in 2012 is all foreign deferred tax benefit.  We have no U.S. tax provision or benefit in 2013 or 2012.

Reconciliations between the amount computed by applying the U.S. federal statutory tax rate (34%) to loss before income taxes, and income tax benefit follows (in thousands):

	2013			2012
Income tax benefit at federal statutory rate	$	(6,487	)	$	(4,444	)
Increase (decrease) resulting from:
State tax benefit, net of federal tax effect		(653	)		(251	)
Change in valuation allowance		4,927			(1,926	)
Adjustment to capitalized costs deferred balances		-			443
Adjustment to stock option compensation deferred balances		-			1,602
Reduction in deferred balances for forfeited, expired or cancelled options		255			602
Expiration of U.S. net operating losses		415			1,460
Nontaxable fair value adjustment		350			(1,843	)
Nondeductible convertible debt issuance expenses		521			2,285
Impact of state rate changes		(677	)		-
Nondeductible expenses		6			10
Foreign taxes		-			6
Adjustments to Brazil deferred balances		-			(222	)
Adjustments to U.S. deferred balances		(96	)		343
Income tax benefit	$	(1,439	)	$	(1,935	)

We have not identified any uncertain tax positions requiring a reserve as of December 31, 2013 or 2012.