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RiceBran Technologies Message Board

gnus_hound 102 posts  |  Last Activity: Dec 6, 2014 12:06 PM Member since: Jan 5, 2007
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  • See WSJ article - parts shown below

    The abruptness of Mr. Chenevert’s departure startled some executives within the company. But it was the culmination of perceptions that had been building over time that Mr. Chenevert was often away, leaving him less involved and harder to reach, the people said.

    Top managers at the industrial units of United Technologies, which manufactures Pratt & Whitney jet engines, Sikorsky helicopters, Otis elevators and Carrier air conditioning units, complained that they were having difficulty getting adequate access to the CEO when they needed it, the people said. They wanted Mr. Chenevert to handle more business decisions in person as opposed to over the phone, the people said.

    Edward Kangas , then United Technologies’ lead independent director, confronted Mr. Chenevert with those concerns following the CEO’s return from a business trip that included a stop in Kaohsiung, Taiwan, to monitor the construction of his latest yacht, two of the people said.

  • Reply to

    The Sabby fiasco - part 1 and more

    by gnus_hound Nov 25, 2014 8:37 AM
    gnus_hound gnus_hound Nov 25, 2014 10:42 AM Flag

    ARoof - you want to know how much they saved RIBT. One piece is from the last 10-Q

    "One USA segment customer accounted for approximately 29% of our consolidated revenues for the nine months ended September 30, 2014"

    That's 29% of everything, including Brazil revenue amounts.

  • Reply to

    The Sabby fiasco - part 1 and more

    by gnus_hound Nov 25, 2014 8:37 AM
    gnus_hound gnus_hound Nov 25, 2014 10:40 AM Flag

    Sure, it's a contract between the two entities. But RIBT said in the S-3 that it exists. But RIBT says it existed in October and November 2014 and clearly from that, prior to the PIPE.

    But this is a common type deal. Entities like RIBT often use these to limit 5% reporting SEC filings because an aggregate 50% from 5% or more owners over any three year rolling period significantly impairs NOL's. By my counting of actual 5% owners at times (including estimated for unreported or not amended filings, could be over 30% right now and the Brazil partner has a right to roll into RIBT which could/may be problematic for the NOL numbers.

    I actually recommended to JS/BOD many months ago that due to the large "free stock" Baruch and another PN person would get in June, they needed to create a provision like JCP and others that bars any person from acquiring 5% with prior approval of the company. These two PN holders were each going to get amounts of shares that exceeded 5% and in at least Baruch's case, much higher.

    They clearly didn't do it and the issue could become more an issue under certain events in the future.

  • Reply to

    The Sabby fiasco - part 1 and more

    by gnus_hound Nov 25, 2014 8:37 AM
    gnus_hound gnus_hound Nov 25, 2014 9:02 AM Flag

    ~By this statement in the S-3, Sabby combined is required to hold no more than 468,704 shares of common stock and can’t exercise any warrants that would cause a breach of that number. So the PIPE transaction had RIBT/Sabby violating the 4.99% blocker and then disclosing its existence in the S-3.~

  • Reply to

    The Sabby fiasco - part 1 and more

    by gnus_hound Nov 25, 2014 8:37 AM
    gnus_hound gnus_hound Nov 25, 2014 9:01 AM Flag

    Then RIBT did the PIPE on September 30, 2014. Per the S-3 filed in late October 2014, the shares O/S after the PIPE were 9,374,085. 5% of that would be 468,704 shares. Per the S-3 filing (table an footnotes on “selling shareholders); each Sabby fund acquired 425,000 (combined 850,000) of the 1,181,696 shares of common stock issued in the PIPE. They also each received 425,000 warrants. They each still held their 143,750 warrants from the prior offering. It’s not known how many of their prior shares of common stock they still owned but since they never filed a 13G/A stating less than 5% ownership, it is assumed they held most of them.

    The S-3 also claims in footnotes 2 and 3 that the 4.99% blocker is for the COMBINED OWNERSHIP and not for each Sabby fund. The FIASCO. Forgetting the prior shares, SABBY (combined) was sold 850,000 of shares of common stock in the PIPE despite RIBT and Sabby have a BLOCKER limiting total actual shares owned to 468,704.

    The S-3 states each Sabby fund had beneficial ownership of 470,000 on 10/28/14. This is 425,000 from the PIPE, plus any common shares still owned from earlier in 2014, less any shares of common stock they shorted through 10/28/14. It would only include warrants to the degree it added to common shares owned – up to the total of 4.99% (RIBT used 470,000 despite being a few shares to high).

    I surmise that Sabby was shorting shares prior to 10/28. So my initial premise is that SABBY was a strong seller from the PIPE through 10/28 to get total actual shares owned down to 470,000 in “EACH FUND”. This was despite RIBT saying the 4.99% blocker is a COMBINED BLOCKER and not for each fund.

    This would also mean that no matter what SABBY did or thought the blocker was ------ RIBT sold the combined SABBY funds 850,000 shares of common stock in the PIPE when they weren’t allowed to own more than 468,704 COMBINED.

    By this statement in the S-3, Sabby combined is required to hold no more than 468,704 shares of common stock and can’t

  • This story is one of the most bizarre ones you can imagine.

    1st let me explain a 4.99% blocker. It means the party agrees to not acquire more than 4.99% of the equity of RIBT. That’s actual shares of common stock owned divided by RIBT’s O/S shares. It excludes rights to buy more via warrants, etc. It limits the party from acquiring more shares or exercising derivatives if their ownership after such would exceed 4.99%.

    2nd is an explanation of beneficial ownership for SEC reporting purposes. This calculation is all equity and all derivatives the party has a right to within 60 days (or 90 days). A blocker would effectively limit the “right to” since they are contractually prohibited form exceeding that amount. But parties with common ownership, etc. are required to combine ownership from all parties they have partial control over.

    3rd is Sabby. They have 2 entities, controlled by common persons. The entities have to be combined for SEC reporting purposes.

    Now to the fiasco. Sabby Management filed a 13G with the SEC on 6/30/2014 stating the following beneficial ownership / combined beneficial ownership:

    Sabby Healthcare Volatility Master Fund, Ltd. - 287,500 (3.66%)

    Sabby Volatility Warrant Master Fund, Ltd. - 287,500 (3.66%)

    Sabby Management, LLC - 575,000 (7.31%)

    Hal Mintz - 575,000 (7.31%)

    These would have been acquired in the 2014 follow on offerings that were debt that converted to equity after the increase in the A/S in June 2014. 50% of the ownership of each would have been warrants at $5.25 per share. So each Sabby “fund” owned 143,750 shares and the same number of warrants. Combined, they owned 3.66% in actual shares of common stock and rights to another 3.66%.

    (continued)

  • gnus_hound by gnus_hound Nov 22, 2014 7:01 PM Flag

    Happy birthday PM - Sunday.

  • Reply to

    Want to see the share price go up 20-25%?

    by zubobma Nov 21, 2014 10:56 AM
    gnus_hound gnus_hound Nov 21, 2014 12:18 PM Flag

    I suspect the JS very small stock buy (in relation to his salary, bonus and free equity - Over $1.5 million in last 12 months) was motivated by a hope it saves his job and a hope it partially offsets the signal he sends every week by continuing to be a commuting CEO and not committing.

  • Reply to

    Another silver lining in the CC

    by sixth_8th Nov 17, 2014 9:42 AM
    gnus_hound gnus_hound Nov 19, 2014 7:37 PM Flag

    It all depends on orders for milled rice. If they come and if they come to Farmers, it should be decent. As M6 pointed out though, 50% of raw rice from CA is still exported (mainly to Mexico). So with lower harvest in the last couple months, storage will be lower and the further one gets into 2015, to possibility there can be issues.

    Also as pointed out by JS in a conversation, the rising price of rice is currently having some impact on the orders CA mills are getting for finished rice (something good supply chain management would have accounted for).

    You can subscribe to the "Rice Advocate" weekly report to get good info on rice issues every week. You can get archives for all of 2014 as well from web pages.

    Also search for west Sac and a foreign company that is building a large plant near Farmers mill, to produce "rice buns" to ship back overseas where there is a good market for them. I assume that helps Farmers some, as they use milled rice for their production.
    part of their bran for their own sales.....not sure on this as RIBT has always been closed lipped on the details related to ADM).

    Adding another source and actually taking all RB made available should make a major difference.

  • gnus_hound by gnus_hound Nov 19, 2014 7:09 PM Flag

    Now at lower forecast and probably at lower margins due to added costs. But it is a story to look forward to. I'll keep an eye on things and good luck to the investors that are here and who have suffered so much. No need for me to be here on a week to week basis anymore until next year.

  • Reply to

    Another silver lining in the CC

    by sixth_8th Nov 17, 2014 9:42 AM
    gnus_hound gnus_hound Nov 19, 2014 7:02 PM Flag

    Correction -

    "Beyond", they clearly botched the supply chain in Q3 and from their own failures. Rice mills, ,ill to orders fro raw rice"

    Should be

    Beyond", they clearly botched the supply chain in Q3 and from their own failures. Rice mills, ,fill to orders for "finished rice.

  • Reply to

    Another silver lining in the CC

    by sixth_8th Nov 17, 2014 9:42 AM
    gnus_hound gnus_hound Nov 19, 2014 6:56 PM Flag

    "Beyond", they clearly botched the supply chain in Q3 and from their own failures. Rice mills, ,ill to orders fro raw rice. And it's my understanding that for years and years and years, RIBT does not take all RB that is made available to them from Farmers (and maybe ADM and at Mermentau. Even with the potential crop issues, the rising prices and the slow down in orders mills were receiving, RIBT apparently didn't load up on inventory from Farmers, etc. and apparently were trying just in time inventory management without understanding their supply chain. I suggest one go back and listen or read the transcript where Robert Smith talks about undertaking initiatives after the PIPE to improve planning and inventory and adding storage capacity. They clearly weren't prepared.

    In Brazil, they clearly state the problems and they weren't what was claimed on the CC. The 10-Q tells the real story on why Brazil was a problem and that they couldn't even operate up to the levels of the impaired plant capacity in Q3.

    And while nobody can ever show definitively either way, I belief the issues would have been much less or very limited if RIBT had a CEO that lived in PHX.

    Everything above is IMHO or IMHO from the facts presented.

  • gnus_hound by gnus_hound Nov 19, 2014 10:41 AM Flag

    People here know this has been a major issue for me for at least 4 years (since the July 2010 amended contract) and I've voiced such here over an over. I will add that I recent discussed this issue with JS. I'll simply characterize it as we have different views on the impact this has of the culture, efficiencies and effectiveness of a company and neither of us accept the others beliefs on the matter.

    Article worth reading.

    "JC Penney CEO Ron Johnson Made A Critical Mistake When He Refused To Move To Texas"

    A source told the New York Post's James Covert that Johnson's at headquarters four days a week, "if that much."

    That's not a good message to send to employees.

    Johnson is asking everybody at the company to believe in him and his strategy, to make sacrifices, and join in a long and painful effort towards rebuilding. But he's not willing to take a basic step to show his confidence and long term commitment in the company.

    Culture isn't just about mission statements and perks. It's about the way a place feels. Johnson was something of a rockstar, recruited after great success at Apple by a billionaire hedge fund investor.

    That may have excited employees at first, but the sheen has worn off. The company's struggling. Johnson hasn't acknowledged that yet by where he lives or the way he speaks in public, and that really matters.

    He's having a negative impact on the culture at headquarters by making it seem like his comfort and family's convenience are a higher priority than the company, and on employees in stores by spending far more than an average sales associate makes in a year on flights each week (a round-trip flight on a Gulfstream from Dallas to San Jose costs an estimated $41,817).

    Employees appear to be responding to the message. According to the New York Post, employees at the company's Plano headquarters are getting in later and clocking out earlier.

  • Reply to

    CC thoughts

    by sixth_8th Nov 14, 2014 5:28 PM
    gnus_hound gnus_hound Nov 17, 2014 11:11 PM Flag

    California should be overloaded with rice now through at least May 2015. What it comes down to is how much rice is milled by Farmers and ADM, thus providing RIBT with RB. I doubt the 2014 crop size harvest directly impacted availability of RB through Q3 and certainly not in Q4. This issue would have been and is how much business the mills have for orders for finished rice (thus milling the rice to produce the RB). It has been rightly pointed out to me that this line of thought has one shortcoming to it. The 2014 summer/fall harvest would have impacted milling operations to some degree in Q3 and into Q4 to some degree due to the higher prices for rice caused by the drought (replacement costs pricing). I hadn't factored that in in my prior expectations for Q3 and Q4. The impact of that does provide additional insight to why available RB volumes in the US could be lower than I had rationalized.

  • gnus_hound by gnus_hound Nov 17, 2014 8:33 PM Flag

    I was clearly disappointed in the Q3 numbers and lower guidance going forward. As I said over the last couple days, I had expected a stronger Q3 and Q4. As I had been saying since September, it was still about the end of year revenue run rate and 2015 guidance. And if anything close to the old $100 million discussed revenue run rate, this stock was significantly undervalued. I had actually hope the lifting of the PIPE selling and the 10-Q would send this stock back over $5 no matter what the 10-Q said (from my lowest expectations).

    That clearly didn't happen. I was concerned over the weekend the stock would drop more but as I posted, the stock price seemed to have all the news we heard priced in.

    For traders, I'm not sure what stimulates this stock outside of a range of $3.95 to $4.30 over the next couple months. For investors, I think 2015 is clearly a bright spot to look forward to.

    I have done some more DD and think 2015 has significant potential, if they execute. There is also decent upside potential to the 2015.

    So traders / swing traders / event driven traders might not have much in store for the rest of 2014. The story for investors is 2015 and I don't see that much down side risk from last weeks levels. And as most here know, I fall into the 1st category.

    BTW, I've been assured that RIBT management are working significant hours trying to reach their objectives.

  • Reply to

    CC thoughts

    by sixth_8th Nov 14, 2014 5:28 PM
    gnus_hound gnus_hound Nov 17, 2014 8:56 AM Flag

    Rice is stored both on farms and off farms after a harvest. This is dependent on what the farmer has chosen to sell (spot prices, futures contract commitments or straight contract arraignments). As time goes by, the mills operate based on their end product rice sales, drawing from their inventory or buying from supplies stored by other parties. Typically, you will see very large storage amounts they are reduced to small amounts by the August to October period. Unless all storage is depleted prior to the end of a 12 month cycle, there is supply to mill to customer orders (the mills orders for finished rice).

    As to US for Q4, they said they had orders they couldn't fill in Q3 and rice harvest has insured there is a ton of rice to mill for Q4 and Q1 next year, provided their supplier mills have orders for finished rice (which will certainly exist at decent levels). Plus they have more "new" products being launched by their customers in Q4.

    Short of another massive screw up, the future should be cash flow positive, and a very decent 2015.

  • Reply to

    Revised EBITDA - Q4 and 8-K

    by gnus_hound Nov 17, 2014 8:38 AM
    gnus_hound gnus_hound Nov 17, 2014 8:48 AM Flag

    My guess is that Q4 internal forecast were higher and they changed the numbers late in the process to be more conservative or to dump some expense accruals in in Q4. I predict they will amend the 8-K to say $3 to $4 million as stated on the CC. That would still allow for over $600,000 in positive EBITDA for Q4,

  • Reply to

    Revised EBITDA - Q4 and 8-K

    by gnus_hound Nov 17, 2014 8:38 AM
    gnus_hound gnus_hound Nov 17, 2014 8:43 AM Flag

    So who wants to bet that no matter which is the accurate one, this wouldn't have arisen if we didn't have a part time, commuting CEO and the negative issues this creates on efficiency on the corporate culture.

  • They filed the 8-K and they now say the negative EBITDA for all 2014 will be $2 to $3 million:

    "The Company projects that its consolidated revenue for 2014 will be in the range of $40 to $42 million with a negative Adjusted EBITDA of $2 to $3 million."

    Per their reconciliation on their web site, it was in excess of a negative $3.6 through September 30, 2014.

    So is this showing they are forecasting positive EBITDA of $0.6 to $1.6 million, versus a range $1 million less than that?

    Either way, they appear to be looking for a small to a decent positive number for Q4, and possibly as high as $1.6 million. This would be despite continued issues and Brazil being shut down for maintenance and final repairs in December.

    What is stunning though is they can't get their forecast correct between the CC and the 8-K they said it would be in.

  • Reply to

    EBITDA - Part 1

    by gnus_hound Nov 15, 2014 12:45 AM
    gnus_hound gnus_hound Nov 15, 2014 12:54 AM Flag

    The CC said Brazil supply issues are behind them, but the plant will be down for annual maintenance part of December.

    But here is the “hidden” silver lining in the CC. JS said the forecast for “Adjusted EBITDA” for 2014 is a negative $3 to $4 million (based on revenues of $40 to $42 million).

    Well “Adjusted EBITDA” through September was ($3,618,000). So the Q4 guidance, even will all the issues laid out are for “Adjusted EBITDA” (which should largely be EBITDA adjusted for any equity compensation and warrant derivative gain/loss) ranges from a negative amount of less than $400,000 to a positive amount of over $600,000. The latter would also make them cash flow positive on a consolidated basis.

    BTW, if you want to see the EBITDA info, go to the investor section of the web site and look at the PDF there that details the reconciliation.

RIBT
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