ribt20240331

ribt20240331_10q.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2024

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

For the transition period from to

Commission File Number 001-36245

RiceBran Technologies

(Exact Name of Registrant as Specified in its Charter)

California

(State or other jurisdiction of

incorporation or organization)

87-0673375

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

25420 Kuykendahl Rd., Suite B300

Tomball, TX

(Address of Principal Executive Offices)

77375

(Zip Code)

(218) 773-7564

(Registrant’s telephone number, including area code)

None

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

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

Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock, no par value per share		RIBT		OTC Markets (Pinks)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

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

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

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

As of May 1, 2024, there were 10,004,002 shares of common stock outstanding.

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RiceBran Technologies

Index

Form 10-Q

PART I. FINANCIAL INFORMATION		Page
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2024, and December 31, 2023 (audited)	3
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	19
Signatures		20

Cautionary Note about Forward-Looking Statements

This quarterly report on Form 10-Q contains “forward-looking statements” concerning our operations, economic performance and financial condition. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue, liquidity or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services, products or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “could,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. The forward-looking statements contained herein reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Actual results may differ materially from those projected in such forward-looking statements due to a number of factors, risks and uncertainties, including the factors that may affect future results set forth in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023. Forward-looking statements speak only as of the date on which they are made, and we disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this quarterly report.

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

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

RiceBran Technologies

Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

	(Unaudited) March 31,			December 31,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	448		$	1,139
Accounts receivable, net of allowance for credit losses of $16 and $32		1,500			2,824
Inventories		417			420
Other current assets		459			216
Current assets held for sale		-			215
Total current assets		2,824			4,814
Property and equipment, net		1,984			2,088
Intangible assets		246			270
Long-term assets held for sale		-			2,150
Total assets	$	5,054		$	9,322

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	877		$	1,709
Commodities payable		1,896			2,465
Accrued salary, wages and benefits		117			226
Accrued legal		2,134			2,098
Accrued expenses		408			252
Due under factoring agreement		559			1,866
Due under insurance premium finance agreements		47			75
Finance lease liabilities, current portion		123			120
Current portion of long-term debt		77			137
Current liabilities held for sale		-			12
Total current liabilities		6,188			8,960
Finance lease liabilities, less current portion		364			396
Long-term debt, net of unamortized discount		3,184			2,960
Long-term liabilities held for sale		-			6
Total liabilities		9,736			12,322
Commitments and contingencies
Shareholders' deficit:
Preferred stock, 20,000,000 shares authorized: Series G, convertible, 3,000 shares authorized, stated value $150, 150 shares, issued and outstanding		75			75
Common stock, no par value, 15,000,000 shares authorized, 10,004,002 shares and 9,513,341 shares, issued and outstanding		330,328			330,202
Accumulated deficit		(335,135	)		(333,277	)
Total shareholders' deficit		(4,732	)		(3,000	)
Total liabilities and shareholders' deficit	$	5,054		$	9,322

See Notes to Unaudited Condensed Consolidated Financial Statements

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RiceBran Technologies

Condensed Consolidated Statements of Operations

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

	Three Months Ended March 31,
	2024			2023

Revenues	$	2,116		$	1,950
Cost of goods sold		1,653			1,702
Gross profit		463			248
Selling, general and administrative expenses		1,658			1,415
Loss from continuing operations before other income (expenses)		(1,195	)		(1,167	)
Interest expense		(245	)		(179	)
Interest income		-			19
Change in fair value of derivative warrant liability		-			(28	)
Other income		-			256
Other expense		(6	)		(60	)
Loss from continuing operations before income taxes		(1,446	)		(1,159	)
Income taxes		-			(6	)
Loss from continuing operations		(1,446	)		(1,165	)
Loss from discontinued operations		(412	)		(863	)
Net loss	$	(1,858	)	$	(2,028	)

Basic and diluted net loss per common share:
Continuing operations	$	(0.15	)	$	(0.18	)
Discontinued operations	$	(0.04	)	$	(0.13	)
	$	(0.19	)	$	(0.31	)

Weighted average number of shares outstanding:
Basic		9,970,925			6,567,978
Diluted		9,970,925			6,567,978

See Notes to Unaudited Condensed Consolidated Financial Statements

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RiceBran Technologies

Condensed Consolidated Statements of Cash Flows

(Unaudited) (in thousands)

	Three Months Ended March 31,
	2024			2023
Cash flow from operating activities:
Net loss	$	(1,858	)	$	(2,028	)
Loss from discontinued operations		(412	)		(863	)
Loss from continuing operations		(1,446	)		(1,165	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation		138			50
Amortization		24			29
Stock and share-based compensation		126			324
Change in fair value of derivative warrant liability		-			28
Other		-			(78	)
Changes in operating assets and liabilities:
Accounts receivable		1,323			385
Inventories		3			(5	)
Accounts payable and accrued liabilities		(766	)		616
Commodities payable		(570	)		272
Other		(29	)		57
Net cash (used in) provided by operating activities of continuing operations		(1,197	)		513
Net cash used in operating activities of discontinued operations		(203	)		(575	)
Net cash used in operating activities		(1,400	)		(62	)
Cash flows from investing activities:
Purchases of property and equipment		(78	)		(178	)
Net cash used in investing activities of continuing operations		(78	)		(178	)
Net cash (used in) provided by investing activities of discontinued operations		2,150			(52	)
Net cash (used in) provided by investing activities		2,072			(230	)
Cash flows from financing activities:
Advances on factoring agreement		3,101			8,559
Payments on factoring agreement		(4,408	)		(8,908	)
Advances of bank line of credit		-			36
Advances on insurance premium finance agreements		65			206
Payments on insurance premium finance agreements		(103	)		(184	)
Proceeds from debt, net of issuance costs		-			2,494
Payments of debt and finance lease liabilities		-			(2,440	)
Net cash used in financing activities of continuing operations		(1,345	)		(237	)
Net cash used in financing activities of discontinued operations		(18	)		-
Net cash used in financing activities		(1,363	)		(237	)
Net change in cash and cash equivalents	$	(691	)	$	(529	)

Cash and cash equivalents, beginning of period		1,139			3,941
Cash and cash equivalents, end of period		448			3,412
Net change in cash and cash equivalents	$	(691	)	$	(529	)

Supplemental disclosures:
Cash paid for interest	$	38		$	193
PIK interest	$	224		$	-

See Notes to Unaudited Condensed Consolidated Financial Statements

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RiceBran Technologies

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1. BASIS OF PRESENTATION

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

These interim financial statements should be read in conjunction with the consolidated audited financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2023, which included all disclosures required by generally accepted accounting principles.

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

Certain reclassifications have been made to amounts reported for the prior period for discontinued operations to achieve consistent presentation with the current period. Such reclassifications had no impact on previously reported net loss or shareholders’ deficit. See Note 3 in the Notes to Unaudited Condensed Consolidated Statement of Operations for further discussion of our discontinued operations.

NOTE 2. GOING CONCERN AND MANAGEMENT’S PLAN

The Company has incurred losses and generated negative cash flows from operations since its inception. As of March 31, 2024, the Company had an accumulated deficit of $335.1 million and cash and cash equivalents of $0.4 million.

Our history of operating losses and negative operating cash flows from continuing operations raises substantial doubt about our ability to continue as a going concern within one year from the date of this filing. Due to these historical losses and negative cash flows, management has considered various strategic alternatives. Specifically, we recently completed a refinancing in December 2023, as further described below.

On December 1, 2023, an entity owned by Cable Car Capital LLC, Funicular Funds, LP (Funicular), purchased $0.4 million of shares of common stock of the Company and lent the Company $4.1 million.

Related to this financing, Funicular was also granted warrants to purchase up to 5.0 million shares of common stock of the Company. If Funicular exercised all its warrants, it would own 49.8% of the Company. The Company also exchanged existing warrants with other investors to purchase an aggregate 2.2 million shares of common stock of the Company for an aggregate of approximately 0.6 million shares of common stock of the Company and new warrants to purchase 1.2 million shares of common stock of the Company.

With the proceeds of this financing, the Company repaid its $1.5 million mortgage note (see Note 9) and will use the remaining balance to fund its current and future general working capital and operating, investing, and financing cash flow needs.

On January 25, 2024, the Company sold Golden Ridge for $2.2 million. As a result of the sale, the Company has streamlined its business and balance sheet, eliminating unprofitable operations.

The Company also believes additional cash can be secured through other debt or structured equity financing, if necessary. However, there can be no assurance that equity or debt financing will be available to the Company should it need it or, if available, that the terms will be satisfactory to the Company and not dilutive to existing shareholders. The Company’s failure to raise capital as and when needed could have significant negative consequences for its business, financial condition, and results of consolidated operations.

NOTE 3. DISCONTINUED OPERATIONS

We continuously assess the composition of our portfolio to ensure it is aligned with our strategic objectives and positioned to maximize return to our shareholders.

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RiceBran Technologies

Notes to Unaudited Condensed Consolidated Financial Statements

Golden Ridge Rice Mills, Inc. Business

On January 25, 2024, we completed the sale of our assets related to the Golden Ridge Rice Mills, Inc. business (GRR Business) for $2.2 million in cash and the assumption of $18,000 of finance leases. The sale agreement contains customary representations, warranties, and covenants. In consideration of a lender's consent to the sale and release of securities interests and liens on the GRR Business assets, we paid a fee of $86,000. The buyer of the GRR Business did not acquire accounts receivable generated by the operation of the GRR Business assets and generally did not assume any accounts payable or accrued expenses related to the operation of the GRR Business through the January 25, 2024, date of sale.

As summarized in the following table (in thousands), the net carrying value of the GRR Business assets and liabilities assumed as of the date of sale were $2.2 million resulting in a loss on sale of $0.2 million. The estimated loss on sale includes no provision for income taxes as it is anticipated the tax benefit for the expected tax loss on disposition will not be realized based on our current U.S. valuation allowance position.

Property and equipment	$	2,116
Prepaid expenses		76
Deposits		32
Inventories		30
Total assets		2,254

Capital lease liabilities		18
Total liabilities		18
Net assets sold	$	2,236

We determined that the disposal met the criteria for presentation as discontinued operations in the first quarter of 2024. Accordingly, the GRR Business results are presented as discontinued operations in our unaudited condensed consolidated statements of operations and are excluded from continuing operations for all periods presented. In addition, the GRR Business assets and liabilities are classified as held for sale in our condensed consolidated balance sheet as of December 31, 2023.

The following table summarizes the major line items included in loss from discontinued operations related to the GRR Business and divestiture (in thousands).

	March 31
	2024			2023
Revenues	$	681		$	3,894
Cost of goods sold		(903	)		(4,200	)
Selling, general and administrative expenses		(46	)		-
Interest expense		(12	)		-
Other expenses		(7	)		-
Loss from operations of discontinued operations		(287	)		(306	)
Loss on sale		(172	)		-
Loss from discontinued operations	$	(459	)	$	(306	)

Depreciation included in cost of goods sold	$	49		$	146
Capital expenditures	$	-		$	52

The following table summarizes the major line items included in cash flows from discontinued operations related to the GRR Business and divestiture (in thousands).

	March 31
	2024			2023

Net cash used in operating activities	$	(203	)	$	(145	)
Net cash provided by (used in) investing activities		2,150			(28	)
Net cash used in financing activities		(18	)		-
Net cash provided by (used in) discontinued operations	$	1,929		$	(173	)

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RiceBran Technologies

Notes to Unaudited Condensed Consolidated Financial Statements

The following table summarizes the carrying amounts of major classes of GRR Business assets and liabilities classified as held for sale as of December 31, 2023 (in thousands).

Property and equipment	$	2,150
Prepaid expenses		60
Deposits		32
Inventories		123
Total assets		2,365

Capital lease liabilities		18
Total liabilities		18
Net assets sold	$	2,347

Stabilized Rice Bran Business

On June 23, 2023, we completed the sale of our assets related to the stabilized rice bran (SRB Business) for $1.8 million in cash and the assumption of $1.7 million of real estate operating leases and other liabilities. The sale agreement contained customary representations, warranties, and covenants.

The proceeds, net of expenses, of $1.4 million, and the net carrying value of the SRB Business assets and liabilities assumed as of the date of sale at $10.0 million resulted in our recognition of a loss on sale of $8.6 million. The loss on sale includes no provision for income taxes as it is anticipated the tax benefit for the expected tax loss on disposition will not be realized based on our current U.S. valuation allowance position.

In consideration of the Lender’s (as defined below) consent to the sale and release of securities interests and liens on SRB Business assets, we paid a portion of the amount outstanding on our mortgage promissory note, not exclusively related to the SRB Business, from proceeds of the sale. In addition, we paid liabilities for accumulated paid time off to the employees of the SRB Business. The following table summarizes the distribution of proceeds (in thousands).

Purchase price	$	1,800
Expenses as of June 30, 2023		(375	)
Net proceeds	$	1,425

Repayment of mortgage promissory note	$	450
Payment of paid time off liabilities		215
	$	665

The following table summarizes the carrying amounts of the SRB Business as of June 23, 2023, the date of sale (in thousands).

Inventories	$	2,252
Other current assets		185
Property and equipment		7,710
Operating lease right of use assets		1,566
Total assets		11,713

Accrued expenses		9
Operating lease liabilities		1,668
Finance lease liabilities		12
Long-term debt		14
Total liabilities		1,703
Net assets sold	$	10,010

The buyer of the SRB Business did not acquire accounts receivable generated by the operation of the SRB Business assets and generally did not assume any accounts payable or accrued expenses related to the operation of the SRB Business through the June 23, 2023, date of sale.

We determined that the disposal met the criteria for presentation as discontinued operations in the second quarter of 2023. Accordingly, SRB Business results are presented as discontinued operations in our unaudited condensed consolidated statements of operations and are excluded from continuing operations for the three months ended March 31, 2023. The operations of the SRB Business are included in our results for the three months ended March 31, 2023. The following two tables represent activity as of March 31, 2023.

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RiceBran Technologies

Notes to Unaudited Condensed Consolidated Financial Statements

The following table summarizes the major line items included in loss from discontinued operations related to the SRB Business and divestiture (in thousands).

	March 31, 2023
Revenues	$	3,425
Cost of goods sold		(3,649	)
Selling, general and administrative expenses		(316	)
Interest expense		(17	)
Loss from operations of discontinued operations		(557	)
Gain (loss) on sale		-
Loss from discontinued operations	$	(557	)

Depreciation included in cost of goods sold	$	318
Capital expenditures	$	47

The following table summarizes the major line items included in cash flows from discontinued operations related to the SRB Business and divestiture (in thousands).

	March 31
	2024		2023

Net cash used in operating activities	$	-	$	(430	)
Net cash used in investing activities		-		(24	)
Net cash used in financing activities		-		-
Net cash used in discontinued operations		-		(454	)

NOTE 4. ACCOUNTS RECEIVABLE AND REVENUES

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

	Customer
	A			B			C
% of revenue, three months ended March 31, 2024		48	%		9	%		8	%
% of revenue, three months ended March 31, 2023		32	%		17	%		8	%

% of accounts receivable, as of March 31, 2024		32	%		22	%		8	%
% of accounts receivable, as of December 31, 2023		26	%		13	%		10	%

The following table presents disaggregated revenues (in thousands).

	Three Months Ended March 31,
	2024		2023
Barley and Oats		1,950		1,617
Feed and Other		166		333
Revenues	$	2,116	$	1,950

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RiceBran Technologies

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 5. INVENTORIES

The following table details the components of inventories (in thousands).

	March 31,		December 31,
	2024		2023
Finished goods	$	79	$	90
Raw materials		322		302
Packaging		16		28
Inventories	$	417	$	420

NOTE 6. PROPERTY AND EQUIPMENT

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

	March 31,		December 31,		Estimated Useful Lives
	2024		2023		(in years)
Land	$	145	$	145
Plant		947		947	20	-	40 or life of lease
Computer and software		14		14	3	-	5
Machinery and equipment		2,079		2,079	5	-	15
Property and equipment, cost		3,185		3,185
Less accumulated depreciation		1,201		1,097
Property and equipment, net	$	1,984	$	2,088

NOTE 7. INTANGIBLE ASSETS

Intangible assets consist of the following (in thousands).

			March 31, 2024						December 31, 2023
	Estimated Useful Life		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Customer relationships		15	$	930	$	691	$	239	$	930	$	668	$	262
Trademarks		10		13		6		7		13		6		7
Non-compete agreement		5		22		22		-		22		21		1
Total intangible assets			$	965	$	719	$	246	$	965	$	695	$	270

The customer relationship intangible is amortizing over the 15-year period of expected future economic benefit, in proportion to the discounted expected future cash flows used to estimate the value of the intangible at acquisition in 2019. It is amortizing at a more rapid rate in the earlier periods than in later periods. Other finite-lived intangible assets are amortizing on a straight-line basis.

As of March 31, 2024, the weighted-average remaining amortization period for intangibles is 8.6 years and future intangible amortization is expected to total the following (in thousands):

2024 (remaining 9 months)	$	61
2025		57
2026		41
2027		30
2028		21
Thereafter		36
Total amortization	$	246

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RiceBran Technologies

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 8. LEASES

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

	Three Months Ended March 31,
	2024		2023
Finance lease cost:
Amortization of right-of use assets, included in cost of goods sold	$	41	$	15
Interest on lease liabilities		12		18
Operating lease cost, included in selling, general and administrative expenses:
Fixed lease cost		-		129
Variable lease cost		-		51
Short-term lease cost		-		43
Total lease cost	$	53	$	256

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	12	$	18
Operating cash flows from operating leases	$	-	$	129
Financing cash flows from finance leases	$	-	$	36

As of March 31, 2024 and 2023, variable lease payments do not depend on a rate or index. As of March 31, 2024, property and equipment, net, includes $0.5 million of finance lease right-of-use-assets, with an original cost of $0.6 million. As of March 31, 2023, property and equipment, net, includes $0.6 million of finance lease right-of-use-assets, with an original cost of $1.1 million. During the three months ended March 31, 2023, we financed the purchase of $0.2 million of property and equipment in noncash finance lease transactions.

As of March 31, 2024, we do not believe it is certain that we will exercise any renewal options. The remaining terms of our leases and the discount rates used in the calculation of our lease liabilities as of March 31, 2024, follows.

	Finance Leases
Remaining leases terms (in years)	1.1	-	3.9
Weighted average remaining lease terms (in years)		3.5
Discount rates	3.5%	-	11.6%
Weighted average discount rate		9.6%

Maturities of lease liabilities as of March 31, 2024, follow (in thousands).

	Finance
	Leases
2024 (remaining nine months)	$	123
2025		164
2026		163
2027		126
2028		3
Total lease payments		579
Amounts representing interest		(92	)
Present value of lease obligations	$	487

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RiceBran Technologies

Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 9. DEBT

We finance certain amounts owed for annual insurance premiums under financing agreements. As of March 31, 2024, amounts due under insurance premium financing agreements are due in monthly installments of principal and interest through September 1, 2024, at an interest rate of 9.95% per year and an outstanding principal balance of approximately $47,000.

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

	March 31, 2024		December 31, 2023
Mortgage promissory note - Dated December 1, 2023. Original principal $4.1 million. Interest accrues and compounds quarterly at 13.5% per year. At each quarterly interest payment date, the accrued and unpaid interest can be paid in cash or paid in-kind and has a December 1, 2028 maturity date.
Accrued interest capitalized as of March 31, 2024 was $232,000.	$	3,150	$	2,968
Equipment note - Dated May 2021. Original principal $46,000. Due in monthly installments through June 2025. Interest accrues at the effective discount rate of 3.6% per year.		12		15
Equipment note - Dated June 2023. Original principal $144,000. Due in monthly installments through August 2025. Interest accrues at the effective discount rate of 14.0% per year.		99		114
Total long-term debt, net	$	3,261	$	3,097

The Funicular note

On December 1, 2023, we entered into a new secured promissory note with Funicular, guaranteed by its subsidiaries Golden Ridge Rice Mills, Inc. and MGI Grain, Incorporated (MGI) in the aggregate principal amount of $4.1 million, funded on December 1, 2023. A portion of the proceeds from the note were used to pay amounts owed under the previous mortgage promissory note. The note has a stated maturity date of December 1, 2028. Interest accrues at a rate per annum equal to 13.50%. On each quarterly interest payment date, the accrued and unpaid interest shall, at the election of the Company in its sole discretion, be either paid in cash or paid in-kind. In addition, the note requires payment of a $50,000 fee on account of costs and expenses of Funicular, which fee was in-kind at the Company’s election as per the agreement.

Arkansas mortgage promissory note

In January 2023, we entered into agreements with the Lender to effect a modification of the terms of the mortgage promissory note. This modification involved us entering into a new mortgage promissory note in the principal amount of $2.5 million. We received $0.3 million in cash, and the lender applied the remainder of the new principal to the $1.3 million then outstanding on the prior mortgage promissory note and the $0.9 million Over-advance (as defined below). Under the terms of the January 2023 note, (i) interest accrued at the same rate as the prior note, an annual rate which is the greater of 7.0% above the 1ender’s prime rate and 10.3%, and (ii) principal and interest are payable in equal monthly installments through January 2025, under the January note. Prior to the January 2023 modification, principal and interest were payable in equal monthly installments through December 2023. The note is secured by a mortgage on our real property in Arkansas. The current portion of long-term debt on the condensed consolidated balance sheet as of December 31, 2023, reflects the terms of the January 2023 modification. As of March 31, 2024, the balance was paid.

Factoring facility

We borrow under a factoring agreement with a lender (the Lender), which provides a $7.0 million credit facility. We may only borrow to the extent we have qualifying accounts receivable to use as collateral as defined in the agreement. The facility had an initial two-year term and automatically renews for successive annual periods until delivery of a proper termination notice. The facility term automatically extended to October 2024. We incur recurring fees under the agreement, including a funding fee of 0.5% above the prime rate, in no event to be less than 5.5%, on any advances, and a service fee on average net funds borrowed. The Lender has a security interest in our assets and the right to demand repayment of the advances at any time. As of March 31, 2024, and December 31, 2023, we had an outstanding payable balance of $0.6 million and $1.9 million, respectively.

The Lender also advanced us $0.9 million effective September 30, 2022 (the Over-advance), pending restructuring of our mortgage promissory note with the Lender. The Over-advance accrued interest at an annual rate which is the greater of 7.0% above the Lender's prime rate (14.5% at December 31, 2022) and 10.3% until it was repaid in January 2023. As of December 31, 2023, the Over-advance was classified as long-term debt in our condensed consolidated balance sheet as it was refinanced on a long-term basis in January 2023, as discussed below.

Table of Contents

RiceBran Technologies

Notes to Unaudited Condensed Consolidated Financial Statements

Additional information related to our factoring obligation (exclusive of the Over-advance) follows.

	Three Months Ended March 31,
	2024			2023
Average borrowings outstanding (in thousands)	$	802		$	2,771
Fees paid, as a percentage of average oustanding borrowings		12.4	%		2.2	%
Interest paid, as a percentage of average outstanding borrowings		2.3	%		2.2	%

As of March 31, 2023, we had $1.9 million outstanding under a line of credit with a bank. The borrowing was secured by our cash on deposit with the bank and bears interest at prime (7.8% at March 31, 2023). There were no stipulated repayment terms for the line as long as we maintained sufficient cash collateral. We repaid the amounts borrowed under the line of credit in full in April 2023. Our borrowings under the line of credit averaged $1.8 million in the three months ended March 31, 2023, at an average annual interest rate of 7.7%.

Future principal maturities of long-term debt outstanding at March 31, 2024, follow (in thousands).

2024 (remaining nine months)	$	57
2025		54
2026		-
2027		-
2028		4,282
Principal maturities		4,393
Debt issuance costs		(1,132	)
Total long term debt, net	$	3,261

NOTE 10. EQUITY, SHARE-BASED COMPENSATION AND WARRANTS

A summary of equity activity for the three months ended March 31, 2024 and 2023, follows (in thousands, except share amounts).

	Shares
	Preferred				Preferred		Common		Accumulated
	Series G		Common		Stock		Stock		Deficit			Deficit
Balance, December 31, 2023		150		9,513,341	$	75	$	330,202	$	(333,277	)	$	(3,000	)
Common stock awards under equity incentive plans		-		383,394		-		-		-			-
Stock units issued to vendor		-		106,667		-		126		-			126
Common stock issued to vendor		-		600		-		-		-			-
Net loss		-		-		-		-		(1,858	)		(1,858	)
Balance, March 31, 2024		150		10,004,002	$	75	$	330,328	$	(335,135	)	$	(4,732	)

Preferred

Common

Accumulated

Series G

Common

Stock

Deficit

Equity

Balance, December 31, 2022

150

SEC Form 10-Q filed by RiceBran Technologies