- Many members of the LF-RB Group are long-term shareholders of the Company.
- The average price for the RiceBran shares paid by several members of the LF-RB Group is over $4 a share, which means that we have a vested interest in ensuring that the Company's stock price goes up.
- Contrary to the Company's assertions, our interests are the same as those of all shareholders. We do not seek benefits at the expense of long-term shareholder value—the opposite is true, as we have a demonstrated, long-term interest in the Company and its future recovery and success.
- We have sought to work constructively with management and the Board in an effort to improve the Company's strategy, cost structure, capital allocation, executive compensation, and corporate governance; all with the aim of creating long-term shareholder value.
- Our goal is simply to restore good governance and effective strategy with a view to the Company's long-term profitability and value creation. Contrary to the Board's assertions, we are trying to gain representation on the Board to implement strategies and make changes for the sole purpose of creating shareholder value; we are not seeking to "acquire" the Company. The current members of the Board did not pay any "control premium" when they were elected.
- Despite our sincere efforts, the current Board has rebuffed meaningful attempts for us to engage in a constructive dialogue. We believe the interests and attention of the current Board are not properly focused on the interests of the Company's shareholders.
- RiceBran's directors have demonstrated inadequate action in response to current management's weak strategic execution, ineffective financial stewardship and mediocre performance. For example, during the current Board's tenure, the Company generated net losses attributable to RiceBran shareholders of $8,268,000, $23,029,000, $15,021,000 and $9,509,000 in 2015, 2014, 2013 and 2012, respectively, and annual revenues for 2015, 2014, 2013 and 2012 have stagnated at around the $40 million level.
- What we believe to be Robert Schweitzer's inadequate leadership and failure to guide the Board to help create shareholder value have shown that he is not performing successfully in the role of Chairman—the Company's shareholders deserve a more effective Chairman.
- Five of the seven current directors joined the Board in 2012 or earlier. During the period from December 31, 2012 to June 10, 2016, RiceBran's common stock has experienced an absolute stock price decline of 85.4%, from $10.80 per share to $1.58 per share.
- Revenue has remained stagnant for the past five years in the $40 million range.
- From 2012 to 2015, the Company accumulated $55.8 million in net losses attributable to RiceBran shareholders. Despite these losses, aggregate total compensation of the Company's Named Executive Officers was more than $7 million during such period. In addition, the total cash compensation of the Company's non-employee directors was $249,708, $320,000, $441,783 and $427,750 in 2012, 2013, 2014 and 2015, as disclosed in the Company's filings with the SEC, despite the Company's net losses noted above.
Given the duration and magnitude of RiceBran's underperformance under the leadership of the current Board, we believe the best outcome for our fellow long-term shareholders would be driven by changes at the Board and management level. Our interests are clearly aligned with yours. We believe time has come for shareholders to elect directors who will try to not only preserve the value of your investment but, more importantly, implement a strategic plan that will help recover it.__________________________ 1 Hain Celestial Group, Inc. Form 10-K filed August 27, 2014 (for the fiscal year ended June 30, 2014). YOUR VOTE IS IMPORTANT. Please vote for the election of the LF-RB Group nominees, no matter how many or how few shares you own. How to Vote If your shares are held in the name of a brokerage firm, bank or other nominee or custodian, only that firm can vote your shares and, with respect to the election of directors, that firm can only vote your shares if it receives your specific instructions. Accordingly, we urge you to contact the person responsible for your account and instruct that person to execute the GOLD proxy card on your behalf, including FOR the LF-RB Group's nominees. If you have any questions, please contact Alliance Advisors, the firm that is assisting us in this solicitation, by means of the toll-free phone number listed below. IMPORTANT ADDITIONAL INFORMATION THE LF-RB GROUP STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE DEFINITIVE PROXY STATEMENT FILED BY THE LF-RB GROUP ON JUNE 13, 2016 AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. THE LF-RB GROUP'S PROXY MATERIALS ARE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE LF-RB GROUP WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. ALLIANCE ADVISORS, LLC, THE LF-RB GROUP'S PROXY SOLICITOR, WILL PROVIDE COPIES OF THE PROXY MATERIALS WITHOUT CHARGE UPON REQUEST BY CALLING TOLL-FREE AT (855) 742-8269. The LF-RB Group consists of LF-RB, Gary L. Herman, Michael Goose, Stephen D. Baksa, Larry Hopfenspirger, Richard Jacinto II, Edward M. Giles and Richard Bellofatto.
About LF-RB Management, LLCLF-RB Management, LLC was established by a group of professionals with significant experience in activist investing, undervalued companies and strategies to create shareholder value.