RiceBran Technologies

As discussed in Note 9, the outstanding principal and related accrued interest on our PPP loan were completely forgiven in January 2021. The SBA may audit any PPP loan at its discretion through January 2027, six years after the date the SBA forgave the loan.  The SBA may review any or all of the following when auditing a PPP loan: whether the borrower qualified for the PPP loan, whether the PPP loan amount was appropriately calculated and the proceeds used for allowable purposes, and whether the loan forgiveness amount was appropriately determined.  We could be deemed ineligible for the PPP loan received in 2020 upon audit by the SBA.  We believe the SBA's stated intention is to focus its reviews on borrowers with loans greater than $2 million, thereby mitigating our future risk of an audit.  The SBA continues to develop and issue new and updated guidance regarding required borrower certifications and requirements for forgiveness of loans made under the program.

Revenues of $8.6 million in the first quarter of 2021 increased $0.3 million, or 3.3%, compared to the first quarter of 2020.  This increase year-over-year was due to strong sales growth in SRB and SRB derivatives offset by a decline in sales of milled grains and co-products.  Notably, sales of SRB derivatives more than doubled in the first quarter of 2021 from the same period a year ago, while revenues from our Golden Ridge facility declined approximately 25% in the first quarter of 2021 from the first quarter of 2020 due to significant weather-related downtime in February 2021. Our MGI facility also saw a double-digit decline in revenue due to the timing of customer deliveries.

We had $5.4 million in cash and equivalents as of March 31, 2021, an increase of $0.2 million from $5.3 million on December 31, 2020.  During the first quarter of 2021, we were able to offset cash operating losses with improved working capital management neutralizing cash used in operating activities.  Cash used for investing activities consisted of $0.3 million in capital expenditures, primarily for the purchase and installation of capital equipment at our Wynne, Arkansas and East Grand Forks, Minnesota facilities.  This was more than offset by $0.5 million in cash generated from financing activities, where increases in borrowing under our factoring facility and equipment financing more than offset principal payments on our term loan and other financing activities.

On March 30, 2020, we entered into a sales agreement with respect to an at-the-market (ATM) offering program, under which we may offer and sell shares of our common stock having an aggregate offering price of up to $6.0 million.  In April 2020, we were approved for a $1.8 million SBA Payroll Protection Program loan as discussed further in Note 9 of the Notes to Unaudited Condensed Consolidated Financial Statements.  In the first quarter of 2021, we did not raise any funds from the sale of shares under our ATM program, and the $1.8 million SBA Payment Protection Program loan was completely forgiven, which contributed to reducing total debt to $1.7 million at the end of the first quarter of 2021, compared to $3.7 million at the end of the prior quarter.  As of the date of this filing, management believes we have sufficient capital reserves to fund the operations of the business through the company’s expected transition to profitability or positive cash flow.

During the quarter ended March 31, 2021, we issued the securities described below without registration under the Securities Act.  The description below does not include issuances that were disclosed previously on Current Reports on Form 8-K. Unless otherwise indicated below, the securities were issued pursuant to the private placement exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended.  All issuances below were made without any public solicitation, to a limited number of sophisticated persons and were acquired for investment purposes only.