EX-99.2 4 ex99_2.htm EXHIBIT 99.2
Exhibit 99.2

Unaudited Pro Forma Financial Statements

On November 28, 2018, we, RiceBran Technologies, completed the acquisition of substantially all the assets of Golden Ridge Rice Mills, LLC (Golden Ridge), as previously reported in our current report on Form 8-K filed with the SEC on December 4, 2018.

The unaudited pro forma financial statements have been developed by applying pro forma adjustments to the Company’s historical consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America and give effect to the acquisition of Golden Ridge.  The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2018, and for the year ended December 31, 2017, assume that the acquisition of Golden Ridge occurred January 1, 2017.  The unaudited pro forma condensed consolidated balance sheet as of September 30, 2018, assumes that the acquisition occurred on that date.  The unaudited pro forma condensed consolidated financial statements are presented based on currently available information and are intended for informational purposes only.

These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of what results of operations or financial condition would have been had the acquisition been completed on the dates assumed.  In addition, they are not necessarily indicative future results of operations or financial condition.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with (i) the accompanying notes to the unaudited pro forma condensed consolidated financial statements, (ii) the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Form 10-K for the year ended December 31, 2017, filed with the SEC on March 16, 2018, and (iii) the unaudited condensed consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” included in our Form 10-Q for the three and nine months ended September 30, 2018, filed with the SEC on November 6, 2018.

RiceBran Technologies
Pro Forma Condensed Consolidated Balance Sheet
Unaudited September 30, 2018
(in thousands)

   
Registrant
Historical
    
Golden Ridge
(Acquiree)
Historical
    
Pro Forma
Adjustments
  
Notes
  

Pro Forma
  
ASSETS
                          
Cash and cash equivalents
  
$
10,299
    
$
498
    
$
(2,269
)
(a)
  
$
8,528
  
Restricted cash
    
225
      
-
                
225
  
Accounts receivable, net of allowance for doubftul accounts of $137
    
1,509
      
1,592
                
3,101
  
Notes receivable from Golden Ridge
     565      
-
      
(565
)
(b)
    
-
  
Inventories
    
637
      
321
                
958
  
Deposits and other current assets
    
475
      
61
                
536
  
Property and equipment, net
    
9,300
      
3,058
      
1,890
  
(c)
    
14,248
  
Goodwill
    
-
      
-
      
3,677
  
(d)
    
3,677
  
Other long-term assets, net
    
18
      
-
                
18
  
Total assets
  
$
23,028
    
$
5,530
               
$
31,291
  
                                   
LIABILITIES
                                  
Accounts payable and accruals
  
$
2,302
    
$
2,426
               
$
4,728
  
Purchase price payable to Golden Ridge former owner
     -      
-
      
609
  
(a)
    
609
  
Note payable to Golden Ridge former owner
     -      
859
      
(859
)
(a)
    
-
  
Bank debt
    
-
      
1,831
      
96
  
(e)
        
                     
(1,927
)
(a)
    
-
  
Notes payable to RiceBran Technologies
     -      
565
      
(565
)
(b)
    
-
  
Equipment note payable
    
13
      
260
      
60
  
(e)
        
                     
(92
)
(a)
    
241
  
Total liabilities
    
2,315
      
5,941
                
5,578
  
                                   
SHAREHOLDERS' EQUITY
                                  
Preferred stock
    
313
      
-
                
313
  
Common stock
    
291,228
      
-
      
5,000
  
(a)
    
296,228
  
Members' deficit
    
-
      
(411
)
    
411
        
-
  
Accumulated deficit
    
(270,828
)
    
-
                
(270,828
)
Total shareholders' equity
    
20,713
      
(411
)
              
25,713
  
Total liabilities and shareholders' equity
   $ 23,028    
$
5,530
               
$
31,291
  

See Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

RiceBran Technologies
Pro Forma Condensed Consolidated Statement of Operations
Unaudited Nine Months Ended September 30, 2018
 (in thousands, except share and per share amounts)

   
Registrant
Historical
    
Golden Ridge
(Acquiree)
Historical
    
Pro Forma
Adjustments
  
Notes
  
Pro Forma
  
                           
Revenues
  
$
10,213
    
$
13,679
             
$
23,892
  
Cost of goods sold
    
7,842
      
13,187
    
$
141
  
(g)
    
21,170
  
Selling general and administrative expenses
    
8,102
      
333
      
68
  
(f)
    
8,503
  
Other income (expense), net
    
31
      
(144
)
    
95
  
(h)
    
(18
)
Loss before income taxes
    
(5,700
)
    
15
                
(5,799
)
Income tax benefit
    
-
      
-
                
-
  
Net income (loss)
  
$
(5,700
)
  
$
15
               
$
(5,799
)
                                   
Loss per share attributable to common shareholders
                                  
Basic
  
$
(0.28
)
                      
$
(0.26
)
Diluted
  
$
(0.28
)
                      
$
(0.26
)
Weighted average number of shares outstanding
                                  
Basic
    
20,538,309
              
1,666,667
  
(a)
    
22,204,976
  
Diluted
    
20,538,309
              
1,666,667
  
(a)
    
22,204,976
  

See Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

RiceBran Technologies
Pro Forma Condensed Consolidated Statement of Operations
Unaudited Year Ended December 31, 2017
(in thousands, except share and per share amounts)

   
Registrant
Historical
    
Golden Ridge
(Acquiree)
Historical
    
Pro Forma
Adjustments
  
Notes
  
Pro Forma
  
                           
Revenues
  
$
13,355
    
$
11,600
             
$
24,955
  
Cost of goods sold
    
9,564
      
11,517
    
$
188
  
(g)
    
21,269
  
Selling general and administrative expenses
    
9,888
      
43
                
9,931
  
Other income (expense), net
    
(9,118
)
    
(174
)
    
144
  
(h)
    
(9,148
)
Loss before income taxes
    
(15,215
)
    
(134
)
              
(15,393
)
Income taxes
    
5,030
      
-
                
5,030
  
Net loss from continuing operations
    
(10,185
)
    
(134
)
              
(10,363
)
Income from discontinued operations
    
3,983
      
-
                
3,983
  
Net loss
    
(6,202
)
    
(134
)
              
(6,380
)
Net loss attributable to noncontrolling interest in discontinued operations
    
1,671
      
-
                
1,671
  
Net loss attributable to RiceBran Technologies shareholders
    
(4,531
)
    
(134
)
              
(4,709
)
Less - Dividends on preferred stock, beneficial conversion feature
    
778
      
-
                
778
  
Net loss attributable to RiceBran Technologies common shareholders
  
$
(5,309
)
  
$
(134
)
             
$
(5,487
)
                                   
Loss per share attributable to common shareholders
                                  
Basic
  
$
(0.45
)
                      
$
(0.40
)
Diluted
  
$
(0.45
)
                      
$
(0.40
)
                                   
Weighted average number of shares outstanding
                                  
Basic
    
11,923,923
              
1,666,667
  
(a)
    
13,590,590
  
Diluted
    
11,923,923
              
1,666,667
  
(a)
    
13,590,590
  

See Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

RiceBran Technologies
Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation

On November 28, 2018 (Closing), RiceBran Technologies completed the acquisition of substantially all the assets of Golden Ridge Rice Mills, LLC (Golden Ridge).

The unaudited pro forma financial statements have been developed by applying pro forma adjustments to our historical consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America and give effect to the acquisition of Golden Ridge.  The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2018, and for the year ended December 31, 2017, assume that the acquisition of Golden Ridge occurred January 1, 2017.  The unaudited pro forma condensed consolidated balance sheet as of September 30, 2018, assumes that the acquisition occurred on that date.  The unaudited pro forma condensed consolidated financial statements are presented based on currently available information and are intended for informational purposes only.

These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of what our results of operations or financial condition would have been had the acquisition been completed on the dates assumed.  In addition, they are not necessarily indicative of our future results of operations or financial condition.

Note 2 - Preliminary Price Allocation

The purchase price, detailed in the table below (in thousands), included the issuance 1,666,667 shares of our common stock at closing with a fair market value of $3.00 per share, based on the closing price of our common stock as of November 28, 2018.

1,666,667 shares of common stock, at fair value   $
 5,000
  
Golden Ridge bank debt paid at Closing
    
1,927
  
Paid to former owner of Golden Ridge at Closing
    
250
  
Capital lease paid at closing
    
92
  
Settlement of existing note receivable from Golden Ridge
     565  
   
$
7,834
  

The 1,666,667 shares issued at closing included 380,952 shares that were deposited in an escrow account to be used to satisfy any indemnification obligations of Golden Ridge that may arise.

The unaudited pro forma condensed consolidated financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and liabilities assumed of Golden Ridge based on management’s best estimates of fair value.  The final purchase price allocation may vary based on final appraisals, valuations and analyses of the fair value of the acquired assets and assumed liabilities.  Accordingly, the pro forma adjustments are preliminary and have been made solely for illustrative purposes. The following table (in thousands) shows the preliminary allocation of the purchase price to the acquired identifiable assets, liabilities assumed and pro forma goodwill:

Cash and cash equivalents
  
$
498
  
Accounts receivable, net
    
1,592
  
Inventories
    
321
  
Deposits and other current assets
    
61
  
Property and equipment
    
4,948
  
Goodwill
    
3,677
  
Accounts payable and accruals
    
(2,426
)
Equipment note payable
    
(228
)
Paid to former owner
    
(609
)
   
$
7,834
  

Note 3 — Pro Forma Adjustments

The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change.  The following adjustments have been reflected in the unaudited pro forma condensed consolidated financial information:

(a)
Reflects the closing purchase price allocation as further discussed in Note 2.
(b)
Reflects the elimination of our notes receivable from Golden Ridge.
(c)
Reflects the preliminary fair value adjustment to the acquired property and equipment, based on an independent appraisal.  The property and equipment has an estimated average remaining useful life of 9 years as of January 1, 2017.
(d)
Reflects the preliminary estimate of goodwill, which represents the excess of the purchase price over the fair value of Golden Ridge’s identifiable assets acquired and liabilities assumed as shown in Note 2.
(e)
Reflects the preliminary fair value adjustment of the acquired debt and capital lease obligations.
(f)
Reflects the elimination of the gain we recognized on the sale of property to Golden Ridge.
(g)
Reflects, as applicable, the estimated depreciation related to the acquired property and equipment discussed at (c) above.
(h)
Reflects the reduction in interest expense related to the payment of Golden Ridge debt.