RiceBran Technologies - FORM 8-K/A - EX-99.2 - EXHIBIT 99.2 - July 20, 2017

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Exhibit 99.2

Unaudited Pro Forma Financial Statements

On July 14, 2017, Rice Bran Technologies (the Company) completed the sale of Healthy Natural, Inc., (HN) its wholly-owned subsidiary, pursuant to an asset purchase agreement (Purchase Agreement) previously reported in the Company’s current report on Form 8-K filed with the SEC on July 17, 2017.

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 divestiture of Healthy Natural, Inc.  The unaudited pro forma condensed statements of operations for the three months ended March 31, 2017 and 2016, and for the years ended December 31, 2016 and 2015, assume that the divestiture of Healthy Natural, Inc. occurred January 1, 2015. The unaudited pro forma balance sheet as of March 31, 2017, assumes that the divestiture 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 the Company’s results of operations or financial condition would have been had the divestiture been completed on the dates assumed.  In addition, they are not necessarily indicative of the Company’s future results of operations or financial condition.  Beginning in the second quarter of 2017, the historical financial results of Healthy Natural, Inc., for periods prior to the divestiture will be reflected in the Company’s consolidated financial statements as discontinued operations.

The unaudited pro forma 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 the Company’s Form 10-K for the year ended December 31, 2016, filed with the SEC on March 23, 2017, 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 the Company’s Form 10-Q for the three months ended March 31, 2017, filed with the SEC on May 12, 2017.

RiceBran Technologies
Pro Forma Condensed Consolidated Statements of Operations
Unaudited Three Months Ended March 31, 2017
 (in thousands, except share and per share amounts)

   
Historical
    
HN Divestiture
Pro Forma
Adjustments
    
Notes
    
Pro Forma
  
                         
Revenues
  
$
11,435
    
$
(4,418
)
  
(a)
    
$
7,017
  
Cost of goods sold
    
8,924
      
(3,022
)
  
(a)
      
5,902
  
Operating expenses
    
3,027
      
(227
)
  
(b)
      
2,800
  
Other expense
    
2,085
      
(1
)
  
(c)
          
             
(362
)
  
(g)
      
1,722
  
Loss before income taxes
    
(2,601
)
                  
(3,407
)
Income taxes
    
-
      
409
    
(i)
      
409
  
Net loss
    
(2,601
)
                  
(2,998
)
Net loss attributable to noncontrolling interest
    
319
                    
319
  
Net loss attributable to shareholders
    
(2,282
)
                  
(2,679
)
Dividends on preferred stock--beneficial conversion feature
    
(778
)
                  
(778
)
Net loss attributable to common shareholders
  
$
(3,060
)
                 
$
(3,457
)
                               
Loss per share attributable to common shareholders
                              
Basic
  
$
(0.32
)
                 
$
(0.36
)
Diluted
  
$
(0.32
)
                 
$
(0.36
)
                               
Weighted average number of shares outstanding
                              
Basic
    
9,657,543
                    
9,657,543
  
Diluted
    
9,657,543
                    
9,657,543
  

See Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

RiceBran Technologies
Pro Forma Condensed Consolidated Statements of Operations
Unaudited Three Months Ended March 31, 2016
(in thousands, except share and per share amounts)

   
Historical
    
HN Divestiture
Pro Forma
Adjustments
    
Notes
    
Pro Forma
  
                         
Revenues
  
$
10,051
    
$
(4,488
)
  
(a)
    
$
5,563
  
Cost of goods sold
    
7,814
      
(2,959
)
  
(a)
      
4,855
  
Operating expenses
    
3,727
      
(374
)
  
(b)
      
3,353
  
Other income
    
(1,352
)
                  
(1,352
)
Loss before income taxes
    
(138
)
                  
(1,293
)
Income taxes
    
-
      
404
    
(i)
      
404
  
Net loss
    
(138
)
                  
(889
)
Net loss attributable to noncontrolling interest
    
438
                    
438
  
Net loss attributable to shareholders
    
300
                    
(451
)
Dividends on preferred stock--beneficial conversion feature
    
(551
)
                  
(778
)
Net loss attributable to common shareholders
  
$
(251
)
                 
$
(1,229
)
                               
Loss per share attributable to common shareholders
                              
Basic
  
$
(0.03
)
                 
$
(0.13
)
Diluted
  
$
(0.03
)
                 
$
(0.13
)
                               
Weighted average number of shares outstanding
                              
Basic
    
9,215,684
                    
9,215,684
  
Diluted
    
9,215,684
                    
9,215,684
  

See Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

RiceBran Technologies
Pro Forma Condensed Consolidated Statements of Operations
Unaudited Year Ended December 31, 2016
(in thousands, except share and per share amounts)

   
Historical
    
HN Divestiture
Pro Forma
Adjustments
    
Notes
    
Pro Forma
  
                         
Revenues
  
$
39,405
    
$
(19,677
)
  
(a)
    
$
19,728
  
Cost of goods sold
    
31,436
      
(13,158
)
  
(a)
      
18,278
  
Operating expenses
    
19,100
      
(1,438
)
  
(b)
      
17,662
  
Other (income) expense, net
    
78
      
(2
)
  
(c)
          
             
(1,098
)
  
(g)
      
(1,022
)
Loss before income taxes
    
(11,209
)
                  
(15,190
)
Income taxes
    
(41
)
    
1,778
    
(i)
      
1,737
  
Net loss
    
(11,250
)
                  
(13,453
)
Net loss attributable to noncontrolling interest
    
2,720
                    
2,720
  
Net loss attributable to shareholders
    
(8,530
)
                  
(10,733
)
Dividends on preferred stock--beneficial conversion feature
    
(551
)
                  
(778
)
Net loss attributable to common shareholders
  
$
(9,081
)
                 
$
(11,511
)
                               
Loss per share attributable to common shareholders
                              
Basic
  
$
(0.97
)
                 
$
(1.23
)
Diluted
  
$
(0.97
)
                 
$
(1.23
)
                               
Weighted average number of shares outstanding
                              
Basic
    
9,338,370
                    
9,338,370
  
Diluted
    
9,338,370
                    
9,338,370
  

See Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

RiceBran Technologies
Pro Forma Condensed Consolidated Statements of Operations
Unaudited Year Ended December 31, 2015
(in thousands, except share and per share amounts)

   
Historical
    
HN Divestiture
Pro Forma
Adjustments
    
Notes
    
Pro Forma
  
                         
Revenues
  
$
39,896
    
$
(12,845
)
  
(a)
    
$
27,051
  
Cost of goods sold
    
31,826
      
(8,716
)
  
(a)
      
23,110
  
Operating expenses
    
14,346
      
(1,738
)
  
(b)
      
12,608
  
Other expense, net
    
4,476
                    
4,476
  
Loss before income taxes
    
(10,752
)
                  
(13,143
)
Income taxes
    
176
      
837
    
(i)
      
1,013
  
Net loss
    
(10,576
)
                  
(12,130
)
Net loss attributable to noncontrolling interest
    
2,308
                    
2,308
  
Net loss attributable to shareholders
    
(8,268
)
                  
(9,822
)
Dividends on preferred stock--beneficial conversion feature
    
-
                    
(778
)
Net loss attributable to common shareholders
  
$
(8,268
)
                 
$
(10,600
)
                               
Loss per share attributable to common shareholders
                              
Basic
  
$
(0.90
)
                 
$
(1.15
)
Diluted
  
$
(0.90
)
                 
$
(1.15
)
                               
Weighted average number of shares outstanding
                              
Basic
    
9,187,983
                    
9,187,983
  
Diluted
    
9,187,983
                    
9,187,983
  

See Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

RiceBran Technologies
Pro Forma Condensed Consolidated Balance Sheets
Unaudited March 31, 2017
(in thousands, except share amounts)

   
Historical
    
HN Divestiture
Pro Forma
Adjustments
    
Notes
    
Pro Forma
  
ASSETS
                        
Cash and cash equivalents
  
$
3,366
    
$
17,349
    
(e)
        
             
(12,563
)
  
(f)
    
$
8,152
  
Accounts receivable, net
    
2,944
      
(592
)
  
(d)
      
2,352
  
Inventories
    
4,028
      
(1,915
)
  
(d)
      
2,113
  
Deposits and other current assets
    
904
      
(23
)
  
(d)
      
881
  
Property and equipment, net
    
18,881
      
(1,019
)
  
(d)
      
17,862
  
Goodwill
    
790
      
(790
)
  
(d)
      
-
  
Intangible assets, net
    
206
                    
206
  
Operating taxes recoverable
    
1,203
                    
1,203
  
Other long-term assets
    
141
      
(25
)
  
(d)
      
116
  
Total assets
  
$
32,463
                   
$
32,885
  
                               
LIABILITIES
                              
Accounts payable and accruals
  
$
11,086
      
(825
)
  
(d)
          
             
4,594
    
(h)
    
$
14,855
  
Long-term debt
    
13,003
      
(45
)
  
(d)
          
             
(5,509
)
  
(f)
      
7,449
  
Derivative warrant liabilities
    
494
                    
494
  
Deferred tax liability
    
29
                    
29
  
Total liabilities
    
24,612
                    
22,827
  
                               
EQUITY
                              
Preferred stock
    
1,545
                    
1,545
  
Common stock
    
273,853
                    
273,853
  
Accumulated deficit
    
(262,879
)
    
9,261
    
(h)
          
             
(7,054
)
  
(f)
      
(260,672
)
Accumulated deficit attributable to noncontrolling interest
    
(416
)
                  
(416
)
Accumulated other comprehensive loss
    
(4,252
)
                  
(4,252
)
Total equity
    
7,851
                    
10,058
  
Total liabilities and equity
  
$
32,463
                   
$
32,885
  

See Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

RiceBran Technologies
Notes to Pro Forma Unaudited Condensed Consolidated Financial Statements

The unaudited pro forma financial statements give effect to the sale of Healthy Natural, Inc. (the Asset Sale) to be accounted for as a discontinued operation. The unaudited pro forma statements of operations for the three months ended March 31, 2017 and 2016, and for the years ended December 31, 2016 and 2015, are presented as if the sale occurred as of the beginning of those periods.  The unaudited pro forma balance sheet as of March 31, 2017, is presented as if the sale occurred on that date.

(a)
This adjustment reflects the elimination of revenues and cost of goods sold of Healthy Natural, Inc.
(b)
This adjustment reflects the elimination of operating expenses of Healthy Natural, Inc., excluding the anticipated effects of other costs that may be reduced or eliminated as a result of having completed the sale.
(c)
This adjustment reflects the elimination of interest expense related to of Healthy Natural, Inc. debt.
(d)
This adjustment reflects the elimination of the historical assets and liabilities of Healthy Natural, Inc.
(e)
This adjustment reflects the cash consideration received at closing of the Asset Sale net of $219 thousand of assumed liabilities, $519 thousand of advisory fees and $365 thousand of other costs of the Asset Sale.
(f)
This adjustment reflects the repayment of certain non-Healthy Natural, Inc. debt from proceeds of the Asset Sale and the estimated expense arising from the extinguishment of that debt.  This estimated expense arising from the extinguishment has not been reflected in the pro forma statements of operations as it is considered to be nonrecurring in nature.
(g)
This adjustment reflects the elimination of interest expense on the registrant debt referred to in footnote (f).
(h)
This adjustment reflects the estimated gain arising from the transaction. The estimated gain has not been reflected in the accompanying statements of operations as it is considered to be nonrecurring in nature.  No adjustment has been made to the sales proceeds to give effect to any potential post-closing adjustments under the terms of the Purchase Agreement.  The estimated gain includes a provision for income taxes of $4.6 million. which may be due on the Asset Sale.  The Internal Revenue Service rules in this area are complex and the registrant has not yet completed an analysis of what net operating losses, if any, will be available to reduce the taxes owed on the gain.
(i)
This adjustment reflects income tax expense of 35% on adjustments (a), (b) and (c).
 

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