Fred Sommer - IR, Ascendant Partners John Short - CEO and President Dale Belt - Chief Financial Officer Dr. Robert Smith - SVP, Operations and R&D Mark McKnight - SVP, Sales and Marketing.

Anthony Vendetti - Maxim Group Christian Lee - Nymex Capital Marc Nuccitelli - Dillon Hill Capital Gary Herman - Strategic Turnaround Fund.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the RiceBran Technologies Q3 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to introduce our host, Mr. Fred Sommer of Ascendant Partners. Please go ahead, Mr. Sommer..

Thank you, operator. Good afternoon, listeners. Welcome to RiceBran Technologies third quarter 2015 financial results conference call. With us today are John Short, Chief Executive Officer and President of RiceBran Technologies; Dale Belt, Chief Financial Officer; Dr.

Robert Smith, Senior Vice President of Operations and R&D; and Mark McKnight, Senior Vice President of Sales and Marketing. Before I turn the call over to John, I want to remind listeners that during the call, management’s prepared remarks may contain forward-looking statements that are subject to risks and uncertainties.

Management may make additional forward-looking statements in response to your questions today. Therefore, the company claims protection under the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

Actual results may differ from results discussed today, and therefore we refer you to a more detailed discussion of these risks and uncertainties in the company’s filings with the SEC.

In addition, any projections as to the company’s future performance represented by management include estimates as of today November 12, 2015 and the company assumes no obligation to update these projections in the future as market conditions change.

This webcast and certain financial information provided in this call, including reconciliations of non-GAAP financial measures to comparable GAAP financial measures are available at www.ricebrantech.com on the Investor Relations page. At this time, I would like to turn the call over to John Short, CEO and President of RiceBran Technologies.

John, please go ahead..

Thanks Fred and thanks to all of our listeners for joining this call. Today, we will review our third quarter results and cover a number of points to let you know where our business is headed, our performance, our strategic initiatives and our roadmap for revenue growth and profitability.

For the third quarter of 2015, we reported consolidated revenues of $8.9 million compared to $10.4 million in the same period in 2014. Due to the steep decline in the Brazilian real our Q3 revenue from our Brazil segment was negatively impacted by approximately $2.1 million.

Important to note that when comparing the two periods on a constant currency basis, using the prior year exchange rate, our Q3 consolidated revenues would have actually increased by 6% in U.S. dollar terms.

As mentioned in last quarter’s call, we implemented a number of restructuring initiatives at Irgovel early in the second quarter, aimed at aligning our cost structure with achievable production levels, based on raw rice bran availability.

I am pleased to report that those restructuring measures produced dramatically improved results at Irgovel in the third quarter, enabling us to achieve positive adjusted EBITDA for the first time since we initiated the plant expansion in 2013.

On a local currency basis, Brazil revenue hit a record high of R$40.8 million for the nine-month period ended September 30, 2015, a 52% increase over the same period in 2014. Nevertheless on a U.S. dollar reporting basis, revenue was down $600,000 for the third quarter, due to the negative impact from foreign currency translation.

Our Brazil segment margins were healthy 19.1% with room for continued improvement through higher production capacity utilization. As a result of stronger margins in Q3 coupled with the cost control initiatives implemented in Q2, we achieved positive adjusted EBITDA of $200,000 in our Brazil segment.

This is a significant turnaround from the adjusted EBITDA loss of $1.5 million recorded in Q3 of 2014. These positive results are beginning to demonstrate the strong earnings potential of our Irgovel operations.

As we increase throughput in 2016, we believe our Brazil segment will become a significant driver of cash flow, in spite of the difficult economic and political environment.

As previously mentioned, USA segment revenue in Q3 was down year-over-year, the 14.6% decline was mainly attributable to a temporary reduction in orders during the quarter, as our largest finished goods product customer moved its business into a new larger distribution center to support expected future growth, and to a lesser extent the continued decline of purchases by consumer package goods companies in the face of their own declining sales, particularly in their core cereal products.

With the customer warehouse relocation complete in Q3, we’re already seeing a significant increase in orders from that customer, as well as solid growth from other USA segment customers in Q4. In fact, October revenues in our USA segment were the highest for a single month in our Company’s history and November sales are trending at a similar pace.

With USA segment sales at a record pace in October and November, we expect a return to positive adjusted EBITDA in the quarter, and we expect to build on that momentum in 2016. I’ll stop here and pass the call to Dale to discuss our third quarter results in more detail..

The impact of lower reported operating expenses recorded in the Brazil segment which is due to restructuring efforts and the decline in value of the real; we had an overall decrease in corporate SG&A expenses; and we also had a decrease in stock-based compensation expense.

As always, we continue to tightly manage expenses in all of our reporting segments. In the third quarter of 2015, we recorded a consolidated adjusted EBITDA loss of $269,000 as compared to a consolidated adjusted EBITDA loss of $1.6 million in Q3 2014.

While we were marginally negative on a consolidated adjusted EBITDA basis in the quarter, we anticipate positive adjusted EBITDA from both segments in Q4. A reconciliation of adjusted EBITDA can be found on our website for those who want to go look at it there.

In Q3 2015, we recorded a net loss attributable to shareholders of $524,000 or $0.06 per share, based on approximately 9.2 million weighted average shares outstanding. This is a $3.2 million improvement over last year’s quarterly results.

From a balance sheet, liquidity perspective, we ended the quarter with $1.5 million in cash and cash equivalents, compared to $3.6 million as of December 31, 2014. As noted in our Q2 earnings release conference call in August, we received a favorable and unappealable award from a Brazil arbitration panel related to the 2008 acquisition of Irgovel.

With legal award in hand, we filed a motion in U.S. District Court, seeking a court order to release the $1.9 million of restricted cash held at an escrow account at a U.S. bank.

We are confident that we’ll be able to recover those escrow funds soon, which if received, will be used to substantially reduce our senior secured debt with the remainder utilized to support ongoing operations.

We believe these cash resources, if received, combined with operational improvements in the coming quarters, will provide us with adequate cash resources to deliver on our business plans. And with those remarks, I will turn the call over to Mark McKnight, who is going to discuss sales and marketing.

Mark?.

Thanks, Dale. Our sales and marketing efforts continued at full pace during the third quarter of 2015. We added four new sales staff to our sales team in August, two full-time and two part-time.

We now have sales staff located throughout United States and in Mexico with extensive experience in the markets for animal nutrition, conventional food ingredients, functional food ingredients, sports nutrition, non-diary beverages and finished functional foods.

Our sales team has been working diligently to deliver new customers and new projects with a particular focus on customers that have the ability to grow inside the natural products marketplace. Our sales efforts boil down to just a few key strategic efforts. First, we will continue to support our largest customers.

RiceBran Technologies has some really great customers who have grown tremendously over the past five years, and we will continue to support them.

Second, we will acquire new customers, each with the potential to buy $1 million to $3 million in product from us in the first full year with the idea that they will grow their business and as a result, spend $5 million to $10 million a year annually.

An example of this would be a seller of protein powders, who needs to use our Proryza Platinum ingredient, as nutritional filler. They might start with three or four SKUs and then grow to 25 SKUs using our ingredient. Another example would be an infomercial company selling a finished goods manufactured at the Healthy Natural.

They might start-off selling 5,000 to 10,000 units a month and grow to be selling 40,000 to 50,000 units a month, by year two or three. We believe our hard work is paying off.

In the first nine months of 2015, we’ve added 65 new customers, each of which has purchased either our proprietary and process patented rice bran ingredient or our Healthy Natural finished functional food products.

Today we have 62 projects in our product development pipeline and more than 10 of those projects are with companies that have revenues of more than $1 billion annually. We are also making significant inroads with new animal nutrition customers, serving the growing market that supplies gentlemen-farmers and high end companion pet products.

From a tactical standpoint, we have taken a three pronged sales approach. First, continue to ramp up raw material sales through derivatives and the new line extension of Proryza Brew, Proryza Platinum and Proryza Crisps. Second, expand our footprint internationally with sales representatives and material brokers in Korea and Mexico.

To that end, we have already received purchase orders from new customers in both of these countries, and we have more new customers in the pipeline.

An important new customer in Korea is a large specialty food distributor that has already launched one powdered nutritional drink with our rice bran as a key ingredient and the same company has five additional products in development.

In addition, due to our proprietary and process patented raw materials, we have had interest from key natural product and high-end equine supplement companies in both England and the Middle East.

Third, expand finished product offerings with nutria-cosmetics based on rice bran oil as well as continued research and development around healthy functional foods and functional beverages.

We shipped our first large order of nutria-cosmetics in the third quarter and we have our second large order shipping to one of the country’s larger retailers in November. This new customer has 4,000 owned and franchise stores and has purchase hand cream made with rice bran oil.

RiceBran Technologies is developing a strong presence in the clean label and better for you ingredient marketplace through a consistent tradeshow presence coupled with frequent dialog with industry journalists and publications. Journalists are interested in our story because our products are sustainable, renewable and clean label.

Our ingredients meet the growing consumer demand for healthier foods and beverages. Our Company has been highlighted by journalists and the media in 12 different trade journals so far this year. As mentioned previously, October was the highest sales month in Company history and November is trending at the same level.

Our entire team is focused on building on those positive results, as we move into 2016. I’ll now pass the call over to Robert to discuss operations and R&D..

Thanks Mark. Rise of rice bran in California and in the Mid-South during the third quarter was sufficient to meet manufacturing needs at all of our manufacturing locations.

With increased warehouse space, we recently put in place in both California and Louisiana we have been able to build strategic inventories to reduce risk that we face product storage, as we experienced last year which led to loss sales and order cancellations in our USA segment in the second quarter of 2014.

While we believe these and other measures implemented in 2015 will provide sufficient additional stabilized brand to support our planned future business growth, it remains unclear what the overall impact of the California drop may ultimately see for this year’s harvest and for future years.

Turning to operations in Brazil, as both John and Dale mentioned, the restructuring actions implemented in the second quarter have begun to deliver benefits, producing a positive adjusted EBITDA of over $200,000 in the third quarter.

While Irgovel’s operations have improved significantly, the social, economic and political environment in Brazil remains difficult. There continues to be pockets of labor unrest, which recently caused some transportation disruption at our shipping port.

But at this time, we do not see those interruptions having a material impact on our operations in the fourth quarter.

I want to remind our listeners that a key element of our long-term growth strategy for Brazil has been and continues to be the development and commercialization of value added human grade ingredients from both defatted and full-fat brands, using proprietary and patented processing technologies developed in the USA operations.

We are in the final stages of installing and starting up RBT’s proprietary extruded at the CAAL cooperative in Alegrete.

When operational, this new facility will provide a consistent source of stabilized full-fat rice bran for oil extraction and feedstock for production of high-value and high-margin functional ingredients using the same technologies we employ in our Sacramento, California and Dillon, Montana manufacturing faculties.

We have successfully completed test production of rice bran derivatives that is to say, our RiSolubles and RiFiber products from full-fat stabilized rice bran in a contract manufacturing facility near the Irgovel plant.

As a result, we are now in a position to enter into full scale production, once the RBT extruders are brought on line and Alegrete and product marketing is launched in 2016. In addition, we continue to develop our protein extraction and concentration processing at the same contract manufacturing facility, using defatted rice bran from Irgovel.

We believe that value add ingredients derived from defatted and full-fat rice bran all provide Irgovel with significant sources of additional revenue from the growing functional ingredient and package functional food markets in Brazil in the coming years. I’ll stop here and pass the call back to John..

Thanks Robert. Before opening the call to questions, I want to summarize where we are and where we see the business going, as we prepare for 2016. In Brazil, the unstable economic conditions created a challenging environment for our operations at Irgovel.

We responded by aggressively realigning costs and developing a plan to mitigate potential transportation risks with our CAAL agreement. In the third quarter, our restructuring efforts began to gain traction, producing a dramatic improvement in revenues, gross margin, and positive adjusted EBITDA.

Going forward, we see our Irgovel operations generating progressively more cash in the coming quarters.

With our extruding equipment coming on line at CAAL, sometime in December, we will have a large source of stabilized brand that we can use to fuel significant sales and margin growth in Brazil due to production in sales of higher value, human ingredients and functional foods.

As Robert mentioned, a key part of our strategy for Brazil has been to use the technology we imply at Dillon in Healthy Natural to produce high margin ingredients in finished products for the Brazilian market. We expect to launch human grade products into that market in 2016.

As mentioned on our last call, we’re actively seeking strategic partnerships that can accelerate our entry into the human ingredient and functional food markets products for the Brazilian market.

In our USA segment, we’ve addressed supply chain issues related to the drought by accessing additional warehouse space and attaching our existing stabilization equipment to the second mill at one of our current locations. We’ve managed cost carefully and we’ve positioned our company for positive performance in Q4 and into 2016.

We’ve already seen a significant upswing in revenues in October, achieving the highest sales in the history of the Company in our USA segment with November trending at the same level. Mark outlined the aggressive sales strategy implemented in our USA segment to grow our customer base and the inroads we’ve made thus far.

We have product development projects in place with over 10 large $1 billion plus customers that can help diversify our customer base and grow stable revenue going forward. We’re on a record sales pace thus far in Q4 and we intend to build on our momentum in 2016 to generate consistent positive EBITDA.

We continuously explore strategic and tactical partnerships and other opportunities to our USA segment as well. Recent discussions have focused on opportunities to gain access to meaningful quantities of organic brand for human ingredient applications and food processing into derivatives.

To be clear, we have no agreements in place at this time related to these or other strategic initiatives. Nevertheless, we continue to evaluate all strategic opportunities, as they present themselves.

In closing, while we’ve experienced a number of challenges in 2015, we implemented solutions that have yielded a significant turnaround in Brazil and mitigated supply chain issues in U.S. We’ve set the stage for growth in both segments, and we believe we’re poised to finally achieve consistent growth in coming years.

With demand for healthy natural organic products and functional foods continuing to grow, we’re confident that our clean label that offerings combined with a solid installed operating base and strong management team will allow us to take advantage of those growing markets to increase sales and profitability as we move into 2016.

That concludes our prepared comments. Operator, at this time, please open the call for questions.

Note that we’ll limit callers to one initial question and one follow-up?.

Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Anthony Vendetti with Maxim Group. Please proceed with your question..

I was just wondering maybe John or Dale you could explain how you deal with the Brazilian real situation? And if you’ve considered hedging the real or if not, why not and just talk a little bit about your best estimate for how that’s going to play out in 2016?.

Anthony, glad to have you on the call; thanks for the question. My wife continuously tells me that my crystal ball is made up onyx and I shouldn’t be making forecast. So, I’ll address the last part of your question left. You know that we have a private equity partner in Brazil Alothon Group. They are minority investor Irgovel.

They have been down there for 25 years. They have a range of companies and investments. They are all former bankers from Bankers Trust, Deutsche Bank, Latin America, [indiscernible] sort of it.

The feedback that we get, and as we explore this with them is that the cost to hedge in Brazil is prohibitive, so they don’t hedge their businesses, and as we looked few years back when we first got involved with these investments, we have not hedged our Brazilian investment either.

If you actually have different information and you could find it cost effective for us, we would be thrilled. So, the first issue is, we do not hedge. What we have been doing in view of the recent collapse of the Brazilian real is to push as much of a product as we can to export to take advantage of the currency differentials.

And of course, we get a certain amount of benefit from a cost perspective, based on the conversion of the local currency cost base into U.S. dollars as well. So, there are trade-offs in that. But to your point we don’t hedge and our investigations have indicated that the cost of hedge is prohibitive.

You asked where we think the currency may go going forward; you guys probably read the same thing we do. Current forecasts are 2.8 to 3 or 3.2 negative GDP this year. The numbers for next year range from 1 to 1.5, 2, depending on who the forecaster is.

When we talk to various constituencies, people in the industry or private equity partners, the banks in Brazil, banks in U.S., we get a whole range of forecast depending on the perspective of the party we talk to. The banks are the most negative and some of the operators are less negative.

We have a great relationship with a very large global commodities firm, one of the ABCDs, who has given us -- shared with us their forecast for next year; and they’re forecasting an average exchange rate of 3.8, averages throughout the year, a little high at the beginning and improving towards the end of the year.

We have to pick a number for purposes of our modeling, so we pick a number. But the things we’ve heard range from 3.5 on the low end to 4.5 on the high end and they move around all the time. My sense is, this is my sense, right, that the economy is about at the bottom of where the economy itself is going to go.

I realize the Brazilian banks and the Central Bank, and the government controlled banks have put themselves in little bit of suits, so they don’t have a lot of flexibility in terms of mitigating the impacts of the economic downturn. On the other hand, it maybe that the markets have overreacted here; we’ll have to wait and see.

But we’re trying to take a conservative approach in terms of our modeling, as we look at 2016. And from an operating point of view, we are -- as you know, we really reduced the expenses dramatically in the second quarter that’s provided some benefits now in the third quarter. We’ll continue to do so.

And we’re pushing very hard to increase exports of all products, both oil related and not oil related because there is a significant benefit to leveraging the export value of the products against the local currency cost base..

And then just a quick follow-up on the USA segment. You said the largest natural products customers slow purchases as they shift warehouses; that’s been pretty much resolved and led to the highest sales month, I guess October, in the Company’s history.

Can you say which customer that is? And if not, can you just talk about the percent of revenues this top customer accounts for?.

Anthony, you know that we’re prohibited by our supply agreements and things from naming customers. So, we can’t do that. But our largest contract manufacturing customer is the customer question.

Interestingly, we have kind of a funny situation because they plan to move which was planned in the third quarter at a point in time when they thought they might get a little bit of break in their sales growth and it turns out that that has not been the case.

So, not only that customer but a number of other customers in our USA segment are starting to trend. So we did suffer for sure in the third quarter. We have concentration risk associated with that particular customer.

Our strategy has been and continues to be to support, as Mark said earlier the sales growth of all of our new customers but to add a number of new customers that have the ability to outgrow our current largest customers. So that by virtue of bringing at faster rate, the new customers help us reduce our dependence on that largest existing customer.

That’s been our strategy. We’re getting traction with that strategy, had a little bump in the third quarter and happy about it. But we’re extremely pleased about where the overall business is for the fourth quarter..

The next question is from Harry Goldshaw, [ph] a Private Investor. Please proceed with your question..

Thanks for taking my call. I’ve been an investor in the Company for seven or eight years. And clearly it’s been an ugly seven or eight years. And I am somewhat disappointed that yet again the first three quarters of the year are flat to down. We haven’t near met any of those expectations that were projected.

Two years ago when you embarked on your financing and unfortunately since then, since November of 2013, we seem to be down about 82% in share price and this year alone we’re down 52% year-to-date. And I am only concerned about creating share value for the stockholders. And I don’t see this, I don’t see this happening and I am wondering why.

And with all these great things happening, we can’t seem to get the word out. No one knows about RiceBran Technologies. We’re the biggest secret in town. I’ve recently surveyed a number of the health food grocers, Whole Foods, Fresh Market, Trader Joe’s in the Chicago area; nobody carries rice bran oil in their inventory at all.

They don’t even know what it is.

So, I am wondering, as having one of the -- our biggest products rice bran oil, at least it seems like that out of Brazil, why can’t we sell it in this country and why can’t we make money?.

Harry, we appreciate you hanging in there with us. Our objective, as you know, is to drive the value of the business based on a solid operating platform. We think we have that in place. We would definitely like to move faster, and I am sure you would like to see us move faster as well. We, I guess have a different experience.

If we walk across the street to the Trader Joe’s here in Scottsdale, they will have rice ban oil, but we sell our rice ban oil into the various markets around the world in bulk. We are currently not in the B2C business; we’re in the B2B business. We try to make clear to folks.

Moving into B2C is another set of skills and actually another set of cost to attack those markets. So, today we sell rice ban oil in containers to folks who model and distribute. A lot of that bottling and distribution in the U.S. for industrial, food service, industrial application.

But we also sell it to into Mexico, Spain, Germany, Italy and other markets. But it gets bottled under somebody else’s brand, not a brand that we own. The only place we currently bottle our own brand is in Brazil with our Carreteiro brand.

We see on a go forward basis that we will be staying in the B2B business and not the B2C business, at least in the short-term.

One of the things we said back in November 2013 when up listed the business is, there is a time that we will look to move to B2C, but we’re not at that point in time yet, and we need to have the business hitting on all cylinders and generating cash before we consider doing that.

We’re disappointed with Q3 as well, but we’re actually quite excited about Q4 and the other things we see in the product development pipeline. We just have to continue to work through those, let them play out, we think they will play out in a positive way in the quarter and as we move into 2015. If you have a follow-up question, Harry….

I do. I am wondering why there is so little PR about the Company’s activities. It’s virtually nonexistent throughout the year.

And it does seem strange that you wouldn’t take advantage of those opportunities to talk about what you’re doing, when you’re doing it and not wait three months out or eight months out or however long it is before you have a conference call?.

Harry, I am not sure I understand your question.

Could you try it one more time?.

I see virtually no PR being released by the Company about what the Company is doing from quarter-to-quarter even throughout the year.

The only PR is I’ve seen or news releases have been related to arranging some financing or the arbitration results or repairing Irgovel or -- but you’re never talking about your products, you’re never talking about your growth. There is no stimulation for the investor community..

Fair enough comment, perhaps we should do more than that; more of that Harry. And that’s a fair comment. Remember who our market is, our market is B2B, very small, medium, but also very large food ingredient companies, finished product companies et cetera who prohibit us from using their name in any kind of marketing and advertising.

So, as an example, this is not the case, but we can’t turn around and say, hey, we’re supplying ingredients into a Nestlé or Mondelēz or Nestlé a Kraft or something like that, it would be great to say that. And by the way we do provide ingredients into a large number of the big global food companies and that business is growing for us.

But we’re prohibited from marketing those things. Where we do market is we market in the trade, we market B2B, we market to people who are in the product development business at these big companies. And those are the guys who make the decisions on whether or not to integrate our ingredients into their products going forward.

I think your by the way about more news for investors is a fair one and I will take that to and we’ll see what we can do about getting some news out there..

Our next question is from Christian Lee with Nymex Capital. Please proceed with your question..

Hi, I want to ask about Irgovel the current EBITDA that is achieved for this quarter, at what capacity is the plant operating to achieve that; and at what capacity would you have to operate to breakeven?.

We will share limited amounts of information about what’s going on there. We have said previously that because of the economic situation what has done to rice demand in Brazil as well as operation of the mills themselves, bran has been a little bit more difficult to get.

I think we have shared with people that we expect the plant to operate last quarter at about 200 metric tons per day, 6,000 metric tons per month on average that is what we are seeing. The plant, we’ve explained the folks that the capacity on completion of the expansion is 300 tons per day.

And we have also I think shared with folks that we’ve run the plant occasionally at much higher levels than that. But all of that is a function of bran availability. And one of the things we are seeing is with the collapse of the economy, even rice consumption in Brazil; rice of course is a staple. This is a basic food for the Brazilians.

But rice consumption is down, hence milling down; hence bran availability is down that sort of thing. So, what we have been forecasting, we said to the market previously that we made the decision back in the second quarter to significantly restructure our cost base, to be able to operate profitability at that kind of 200 ton per day level.

We implemented the changes. We absorbed the restructuring costs in Q2 at significant expense. You guys know what happens in a socialist economy when you lay off people; it’s a steady proposition. But we absorbed those costs in Q2 and we have been able to see the results in Q3.

Now, my personal view is that things are near the bottom economically in Brazil. You have to ask the question, can it get worse, what is the load, [ph] those sort of things. But my personal view is we are near the bottom. The question comes to be how long do you bounce along the bottom before you start to turn up.

But what we have positioned our business to do there is to generate EBITDA at those lower levels of production, 200 tons per day, assuming that things might not turn around quickly. What happens of course is that things do turn around a little more quickly than we expect and we can operate at 250, 300 or more than 300 tons a day.

It changes the economics of the plant very dramatically and very quickly. So for now, we are hunkered down. We are riding out the storm. We believe we can ride out that storm successfully in Brazil. But we also feel we are very well positioned with the base business. And I want to make a distinction here.

We are very well positioned with the base business to continue what we saw in the third quarter. Having said that, there is a whole another layer of business in Brazil that we spent the last 18 to 24 months preparing for, and that is the layer of business that comes from human grade products that come from both full-fat bran and defatted bran.

So, when you look at where we are, we made an announcement back in the spring, and Harry, these are probably the things that you get frustrated about but it takes time. We signed an agreement with CAAL to go install extruders, you have to go out and order machinery and equipment.

We built buildings to put the equipment into and that installation is only going to go live in December. So, we’ve talked about it for nine months and that’s how long it’s taken to actually build the facility.

In parallel, Robert and his team have been working at the third-party contract manufacturing facilities he described, and we have developed the processes with the equipment in place down there to be able to take full-fat bran and produce, very successfully produce I might add RiSolubles RiFiber, RiBran RiBalance, that gives us the ability to produce the products that we produce H&N.

Now thus far, we have been doing that with stabilized bran that was shipped in from our U.S. facilities, and we are only going to have full-fat stabilized bran from CAAL starting in December.

So, as we have that bran in hand, we will run it through the processes that Robert and his team have polished down there, and we will human grade RiSolubles, RiFiber et cetera produced in Brazil for the Brazil market. So, there is, in our mind, there is two ways to think about the business.

The core business, we’re hunkered down, we’re in a position to ride out the storm, we’re doing that. But at the same time, we expect in 2016 to add that human ingredient layer on top.

And quite honestly, if we can take a portion of the coke products stream that comes out of Brazil and move that into human ingredients, that again is another dramatic change to the economics of the facility. So, there is -- actually Christian a lot of complexity to your question. I hope that gave you a sense of what we’re doing.

And if you have a follow-up to that question, we’re happy to take it..

Our next question is from Michael Seigel, [ph] a Private Investor. Please proceed with your question..

I have question about the Cooperative [ph] in of your Brazil and your plans; how many tons per day are we talking about of bran you’re going to get from it?.

I’m sorry.

Will you ask the question again?.

New agreement in the Cooperative in Brazil, you grown out that after bran, [ph] how many tons per day they’re talking about of that bran?.

That information that we probably won’t share with you but what I’ll say to you Michael is it is a very significant amount of bran and it provides us two benefits. The first benefit is that by stabilizing bran that we receive at distance because the Cooperative the CAAL Cooperative is about 500 kilometers north of Rio Grande state.

By stabilizing the bran there with equipment the bran comes into Irgovel with about 1.5% to 2.5% free fatty acid. That gives us significant additional value in terms of oil extraction. It is much easier and more efficient to extract low acid bran and we get a better quality finished product that’s worth more money.

So, the first is bandage we get out of that is the first piece, better performance in the Irgovel oil facility.

The second piece of the puzzle is with a relatively small portion of the bran that’s available there; we can diverse 10% of that bran into launching human grade ingredients in Brazil and the value of those human grade ingredients in relation to the cost of the brand.

If you take for example our RiSolubles and RiFiber and remember those products are produced under patent, so you can’t get them anywhere else. Remember also that we have a series of clinical trial studies reports about the health and wellness value of those products. So, these products are sort after in the current natural organic wellness markets.

But just as a comparison, the value of those products at wholesale is more than 20 times the value -- the cost of the bran. So, when you look at diverting a small portion of the bran into those patented products for ultimate distribution into the market, it can be a very attractive business proposition over time.

Not to say, it isn’t -- it takes work to begin to penetrate those markets. But of course we started that process already with the team down in Brazil, and we’ll make some inroads in 2016.

So, the value of that installation up in CAAL is two, number one better quality bran for oil extraction and number two, a product stream that allows us to move into much higher value human grade derivatives that are made under our patent. I am not sure that I answered all of your questions, so try me again if I didn’t..

But can you give like a ballpark of how many tons per day you’re going to get that for bran, like ballpark….

No. We’re not going to share information on what we get from our milling partners. We don’t have -- so we have confidentiality agreements in place with all these guys. They will become -- they are already becoming by the way an important bran supplier to us.

But in the past, it was less attractive for us to take bran from them because the bran wasn’t stable. So, this is a nice addition to our bran availability in that market. But the most important piece is that opens up the possibility of human ingredients..

You’re going to present your U.S. sales in the range of 30 million plus, there is a huge growth.

So what surprise this year that completely challenged the whole perspective; why is that growth with the material wise? [Ph] You were talking about half on half [indiscernible] segment would bring 34 million and so you’re going to bring only like 24 this year.

So, where the 10 million goes? What happens to this year if that doesn’t happen?.

We did not see as fast pick up in the U.S. ingredient and the contract manufacturing piece as we had expected to see in 2015 or in early part of 2015. We’re actually seeing those pickups, those levels as we move into Q4 on a run rate basis. So, we are a couple of quarters off in terms of the speed of the ramp up..

And so what about the Japanese customer, you were talking about couple of months ago?.

We’re selling into -- we’ve launched -- so we had mentioned a whole variety of things. We had mentioned that we were pursuing opportunities in Mexico that we’re pursuing opportunities in Korea; we’re pursuing opportunities in Japan. We actually have purchase orders and sales into all of those markets as we speak.

And Mark mentioned earlier that there is additional product development underway with the customers -- with a lot of customers actually in all of those markets. Takes time to build them to significant numbers, but we have heels in all those markets that are moving forward..

But you mentioned that you already started shipping commercial order for that customer in Japan and so that you can mention also what…..

Well, it’s interesting. We’ve added 65 new customers that we ship to this year, we’ve got one in Japan, and we’ve got a couple in Korea, we’ve got three or four in Mexico. And we don’t make it a habit of talking about the specific customers to much. What we were really more interested in doing was indicating that we’re moving into those markets.

And we have purchase orders in hand and product that’s already been shipped into each of those markets. We think those are opportunities to continue to build those markets.

And one of the challenges as we move into all of those market and this will be by the way a challenge as we moved into Brazil as well with human ingredient product, you have to go to their Ministry of Health equivalent, you have to register all of your ingredients, you have to get approval before you can move those into human grade stuff.

And it takes time, it’s piteous, some countries are more difficult than others. But we’ve now skinned the cat in Japan, we’ve skinned the cat in Korea, we skinned the cat in Mexico and we’re in process in Brazil. So that we can launch product in 2016 as we have locally available of that brand.

And one of the things that we had talked about previously and I’ll just frame this for people to think about, our experience, if you talk about large CPG customers, take on a new joint global food company customer.

From the first time, we meet with them, show them samples, then work through the process of sampling; testing; getting approval for our product, then moving it to their marketing guys, getting marketing approval and then going mark-to-marketing to change over.

For example, if somebody takes soy out of a product to put rice bran in because of the soy oil in issues, our experience is from the first day you go send, till the day you get your first purchase order in that big CPG world, Michael, is 18 to 24 months.

Once you get purchase orders flowing, you’re an approved vendor, you’re registered all kind of stuff, you have an opportunity to take out. For some of the direct to consumer companies, MLM and for a lot of the smaller and medium size companies, it’s a much shorter cycle, but it’s still six to nine to 12 months.

Mark, has company that was -- will turn out to be quite significant, he’s going to launch this ideally in November, maybe December and you probably have six months, seven months development with that customer..

Correct. Yes, rapid speed is three to six months and normal speed is 6 to 18 months and slow is 18 to 36 months. But we had a great success with the meat company. They have been testing our product real-time test for 24 months.

So they started with rice bran almost three and a half years ago and we just started to see regular monthly orders from them in April. So, there are good things like that; we just unfortunately don’t control the speed and the ramp up as much as we’d like to..

Last question, what was source of bran in California which was supposed to be on line but has time?.

Mike, can you ask again? I didn’t understand the question..

You were supposed to [indiscernible] in California?.

What we’ve done for now is we actually hooked up a second mill in one of our existing locations. One of the things that’s going on right now is of course we want to carefully manage our expenses. And you guys see that in this quarter we were able to reduce our expenses pretty significantly because we’re managing every cost.

I don’t know if you guys have any idea but Cara Newman [ph] is sitting here with us. Cara unfortunately is the executive assistant to the management team and the board. So, she actually takes care of eight or nine people.

We do not have everybody here with a personal assistant or a secretary; everybody in our business lies coach, including internationally. So, we manage the hack out of the expenses for the business and we will continue to do that even after we get the business to profitability.

Michael, but if you look at the situation in California we thought the better way to go in the short-term as we watch the evolution was to hook a second mill at an existing location and sort of see what happens with the drought. Now, we have all seen the forecast of the strongest El Niño in depends, 20 years, 30 years….

Yes, thank you very much, hopefully good move on your part..

But I would tell what, if it doesn’t turn and we don’t get rain in California, then we are going to have to do something else. But right now, we are trying to figure out how to manage limited resources.

And we remain in conversations with various mills who are interested in having our stuff in there but we are just trying -- we are trying to balance the realities of the environment. And for right now, as Robert said earlier, we feel like we are okay from a bran acquisition perspective..

Okay, thank you..

Yes, Michael thanks you for your questions.

Rob, do you want to take a next question?.

Yes, our next question from Mike Figarelli with Dillon Hill Capital. Please proceed with your question..

Hey Mike, are you there?.

Sorry, can you hear me? It’s Marc actually..

Marc, how are you?.

Okay. Hey, guys; hey, Dale and Mark. So I am just trying -- I am trying to kind of take a high picture. You talk about, you are dealing with these -- anytime you are dealing with food and large companies, a big ramp18, 36 month all in to ramp, and you have been putting a lot of that hard work and it appears at this points.

And at this point we can only take your word because it’s not obviously showing up in the numbers. So, just trying to bridge between Brazil and the U.S., what I am hearing on Brazil and correct me if I am wrong.

You’ve had -- besides the production disruption, you had to take production down from where you intended to be 30%, 40% from where you like to be and then on top of that you’ve got this currency issue. And what I am understanding it’s more of a supply side issue not a demand issue. And then on the U.S.

it sounds like you stabilized your supply but your ramp is not taking place as quickly as you expected..

Yes, let me -- that’s a fair description and let me put a little more meat on the bones of that discussion. In Brazil, we are sold out. We have at the end of each month, we may have one or two days of production in the plant that is not sold and shipped but normally there is nothing there.

This last month -- we are not going to get all heft up about this, and you guys shouldn’t either Marc, but they had another little strike down in Irgovel started the 27th of October; they shutdown the port until the 6th of November and for the month of October only, we ended up unable to ship in the last four or five days, first few days of November et cetera.

That’s not going to impact us for the quarter because that will catch up, I think that port strike has been resolved.

But the normalized basis in Irgovel right now is challenges getting bran because of reduced milling and we are selling everything we have and unless there is a little anomaly like last week’s port strike, all of that stuff would be out boats and at the end of every month.

And what we have done there is one or two or three days of work in progress and stuff that’s being loaded into a container on the last day of the month. So Brazil is selling everything that is available to them. And as I said, we are trying to skew more of that to export. On the west side, we didn’t get the ramp as quickly as we thought we would.

We are now starting to see it last month and this month, the levels that we had expected to be at earlier in the year. And we expect those levels to actually build going forward because we have a huge amount of positive stuff in the pipeline..

I guess as a follow on, just little more clarity on both sides of the globe.

You took some initiatives last quarter to shore up supply in Brazil, I guess that obviously wasn’t enough; is that a fair assessment?.

Well, you have economies that shut down; you have consumers, Marc, purchasing less of everything including purchasing less rice, which means that millers are mill less rice. You probably saw day before yesterday, Goldman Sachs closed down their BRIC fund and you probably read all of the comments about Brazil related to that.

There is less going on in the market. We know for a fact that several of the mills are very challenged financially and they’re are operating at lower levels. But all of that means less bran available to us. We are processing everything we can get our hands on and we’re selling everything that is processed..

And so that’s one thing. So, this is again -- I want to make sure we’re talking about the macro environment and obviously people are concerning about the demand side of Brazil. The demand side is not really affecting you, it’s really the supply.

The demand is affecting the rice mills, which is affecting your supply which is inhibiting your ability to sell more finished goods..

Yes, the kind of stuff we’re wrestling with right now, Marc, is all of our oil sold, [ph] so we have to allocate and we have to make decision as to where it goes.

And the oil that we’re selling, now you know we have our own brand in Brazil the Carreteiro brand that we sell in, one liter pet model that is getting the least attention in terms of allocation because the stuff that goes offshore, those offshore R$4 to the dollar.

So, we’re allocating -- we’re trying to find the balance but in the current environment we are pushing to increase exports and that means we’re making less available -- we’re making less of that oil available in the local markets.

But one of the other things that we spend a lot of time and effort doing right now is developing applications and processes to be able to better utilize that huge coke product stream that comes from oil extraction, which is the defatted bran.

And what we’re coming very-very close, we have our first shipments into the international market the defatted bran out of Brazil, it started as Mark mentioned in April. We expect those to build up over time.

But we see all of those as opportunities, we see the full-fat bran as opportunities, we see the defatted bran as opportunity but right now we’re hunkered down in a pretty ugly economic environment but we don’t expect to turn this month or next. And who knows how fast that thing is going to turn. I didn’t know if that’s what you’re getting at Mark.

So, try me one more time if that wasn’t….

Yes, I would love to know, I was just thinking we can’t answer this question if I guess if you had all the rice bran you wanted, could you ramp back up to 9,000, 10,000 per month?.

Yes..

So, it’s one thing, the demand is disruption, there is other side, on the supplies but I know -- I don’t know if you can solve the supplies on the short-term but I’d much rather have a supply side issue than a demand side issue..

We have a supply side issue and we’re not able to service all of the demand we had either domestically or internationally on the oil side. So, we are allocating. And that will continue until we get more bran availability.

But as we tried to say a little bit earlier, we are hunkered down right now the rough patches in Brazil, we think we’re near the bottom but from a plant manufacturing and operational point of view, we are positioned to be able to ramp up as bran availability increases and the markets are there.

The markets are absolutely there on the oil side, we’re pushing hard to develop higher value markets on the defatted bran side. And now with CAAL, we’ll be able to add the full-fat bran side into the Brazil market too..

When can we expect -- obviously with this extruder and going moving up market and higher profit margin products, finished products, we talked about the leverage that took place in the U.S. that we’re still waiting to see. But you have experienced a lot of that over the last year or so.

Is there any time when you can give us guidance on what do you think the leveraging we’ll get out of that extruder, any kind of brackets around what type of revenues you could see in ‘16?.

No, not going to do it because we don’t even have them installed yet. But we’re very close, the buildings are built, the stuff is sitting there, they’re on the schedule, we’re going to take them down -- and install the machinery and equipment.

But remember, one of the things we have, we have put samples into the market with a number of people and a number of potential partners to both as ingredient and as finished product where people do look at and consider. But if we’re going to do that you actually have that product coming from CAAL when [ph] launches.

So when we talk about putting products in the market in 2016, we’ll have some products in the market in 2016. How much traction those will get? It will be modest. We’ll have to see how it goes. Now having said all of that there are large global MLMs who have said to us, if you could make these products available in Brazil, we’d want them immediately.

So all of that is if, if, if how to get the stabilized bran.

Refine your production process with the stabilized bran coming out of CAAL, get your registration for that product done in Brazil and then you can move into the ingredient market, you can approach these large global MLMs who like the product, would like to have it in Brazil et cetera, but it is a process.

So when we look in 2016, it’s going to take some time.

And Mark, do you want to comment?.

You have heard me talk passionately about the ingredient in this Company. I am just going to give you one example. So Robert Smith did a phenomenal job developing a type of product with our patented RiFiber ingredient.

One of our sales reps in Mexico contacted a $1 billion plus company who analyzed it and said, wow, this is what we’re looking for, it is super high and natural phosphorus content. We’d never even sold that idea to somebody, but RiceBran is super nutritious for people.

So, here is a huge R&D facility in Mexico trying to find a solution in Brazil because Brazil is a very large direct sales market, but they have a lot of restrictions on importing finished goods. So all these companies.

And duties..

And duties, so all these companies around the world are looking for unique solutions for their Brazilian sales force. And this is a large company that took something we had developed. And it’s like bingo, this fits what they want. Now, we have to get it made in Brazil. That’s the challenge. We can’t make it here and ship it there because of the duty.

And because I am very close to customers going on sales calls two, three, five times a week with our sales team, I see tons of this interest out there. And our job is to leverage up all of this interest into higher value opportunities. And that’s what we’re focused and we’ve seen a lot of good things.

The unfortunate part, we don’t control some of these things that our shareholders want to see consistently. But over the long run, I am convinced we are in the right space and doing the right things..

Thanks Mark, I appreciate that. And we can look -- I am very -- that you’re in the food business, we have customers in technology business, we know things take -- big large bureaucratic companies take 18 to 36 months certainly sounds understandable.

Obviously you guys are shareholder, we’re not satisfied; obviously we wanted it yesterday, just to round out the question from -- on the U.S. side. So you think your supply is sufficient to meet kind of internal projections on ‘16 demand for the U.S.

segment?.

This is Robert speaking, yes, based on our projections of where we want to go for 2016, so we’re in a very good position today. We will continue to look at opportunities to collaborate with various mills around the country. But right now, we feel we’re in a very good situation as far as our supply chain goes..

So, I guess just to wrap up here, it’s unfortunate you said you wanted your large customer shifted from the third quarter to fourth quarter, you’re saying you’re having record October and that’s spilling over to November in the U.S. It would be great if you can give us some real concrete information that your best quarter in the U.S.

was around $7 million, is that to say you’re tracking better than $7 million quarter now for the U.S.

segment?.

We’re not going to provide numbers, Marc. Marc, what we did share earlier is that October was the biggest month in the history of our USA segment. So, you have to figure out what conclusion you want to draw..

I appreciate, but I guess qualitatively, you are in this 18 to 36 month cycle, a lot of these customers -- 65 customers added in ‘15 all sounds great.

Are you starting to see the follow-on order starting to increase in line with your expectations; are they tiny increments of new orders or are you starting to see more substance that you think is going to spill over to that ramp in ‘16?.

Mark McKnight in the prepared comments provided a couple of examples of the kind of things that we’re focused on. And I think it’s important, Marc Nuccitelli, to keep in mind the three levels that Mark McKnight was talking about.

You have some people, small entrepreneurial companies, direct selling companies and MLMs et cetera who are very fast in terms of decision making. So, we’ve got a couple of cases; we’re over three, six months period; we’ve completed multiple rounds of product development, got stuffed signed up and got appeal and started to ship.

That is not the $10 billion, $20 billion, $30 billion multinational, they are -- you guys saw we all watched, there is interesting article from Tuesday’s Wall Street Journal, November 10th in the marketplace section where they talk about food stocks being less tempting.

And if you go into that article, the food index, the tracking of all the major food companies, their revenues are down 10.5% in the quarter. So, you look these big guys.

And then you look at the behavior and you say, I think it was General Mills said we are going to launch gluten free Cheerios because we have to be in the healthy natural market, and of course they had total hold start and they had to pull it back and start over again.

Some of these big companies are monsters and the ability to move anything through that processes is very, very challenging. So that’s only a portion of the customers that we are pursuing.

Mark mentioned a very large multibillion dollar meat company that took us 24 months to get the first order and now we are starting to flow on a monthly basis with those guys. But a lot of the guys that we are focusing on are different markets, they are much faster in terms of the decision making process.

So when you look at what we are doing, Marc, we are doing all of those things. We have major product development projects underway with giant global food companies that are eight or nine months in that we think are going to take us 18 months to get a purchase order.

And then we have other things going on where we are turning purchase orders in four to six months. So, we have a little bit of everything. And when we sit down and we look at our pipeline reports, we categorize each of those 62 projects in the pipeline and we’ve got a beat on how fast do we think they are going to convert.

And some of the big companies, Mark you’ve got another 18, 24 months, right?.

And part of the strategy is what opportunities out there in the food segment actually pull more of our brand into the product. We have some great customers that make crackers. But when somebody eats a cracker with our rice bran giving it a whole grain claim, it uses very little of our rice bran.

So, it takes truckloads of crackers to equal a customer for example, one of our Korean customers has used the rice bran into ancient grains non-dairy beverage. That pulls a lot of rice bran because it’s going into the liquid formula at a higher percent.

And so, our sales team is constantly focused on what opportunities will leverage the most pull from our supply. And so, in terms of succeeding with companies that use our bran at a very small percent, RiceBran Technologies has been very successful.

We have a lot of good companies, a lot of good customers, and they just don’t spend a lot of money with us because they are using our bran into their product at a very small percent. So, everything our sales team is focused on are those higher value opportunities where it’s pulling more of our bran into that product formula..

Marc just an example and I am cherry picking here but we have a small new customer who is producing a wellness, powdered wellness beverage for I think the China market right.

Mark? And from zero, from introduction to first deal was four months?.

Yes, three to four months..

Yes, and we’ve actually shipped the first batches of product for these guys. That particular product, if I am not mistaken, -- will you tell the group about what….

It’s a big tub of a very healthy smoothie type formula and it’s marketed for several different types of botanical things, one is rice bran one is nopal cactus, so it’s just like a healthy bunch of powder people would mix into and shake. And the great thing is, we formulated it at 70% rice bran.

So, it’s a giant 1 kilo tub and every time somebody buys that tub, it’s using 700 gram of our rice bran. So that’s an example, a perfect example of a project that will pull a lot raw material into the usage. So, we are very confident that we are telling the right story. We are telling people the story that all white rice starts as brown rice.

And our company specializes in capturing the nutritional part of brown rice that’s the bran. And then that goes into food that makes them healthier; it goes into functional beverages that makes them healthier. And we are seeing a lot of traction. We have added a lot of sales people to our team in 2015.

And that’s the story everybody is telling and it seems to be well received..

So Marc, there is three things going on. There is the short-term fast turning projects; the medium term, not quite so fast turning projects; and then there are the longer term projects that particularly happen with the giant global companies because they are so slow..

Yes, we had two interesting meetings. One, a giant company in Japan told us that they had chosen us as the greatest ingredient they’d ever seen. And that’s the good news. The bad news is the last -- this is a $12 billion.

The bad news is the last time they developed a drink that became the number one selling health drink in Japan, it took them 10 years to develop it. And in the meeting, I said, well, can you shorten that and they said yes, they’re trying to shorten it to five years. And I was just like oh, brother. But Korea is a different market.

Korea, they go to market much faster. We met this company in Korea earlier in 2015 and they launched their product in September; that was like a record speed for a food company.

Another interesting thing is that we were invited to one of the largest companies in the United States to attend their proprietary innovation conference and out of 10,000 venders, they only invited 32 venders to attend, and we were one of them.

And so, the rice bran story and the ingredient and the technology that we have, people are very interested in it. It’s the job that we have is to place it in these high value, high usage applications..

I know I’ve over extended my queue here, maybe you can just conclude….

No, you’re only on question one and a half, Marc. Go ahead..

It’s all the same question actually, just different ways. I know you’re not giving any projections right now and I think I understand why.

But is it safe to say, besides some of the production issues, currency, supply disruptions, are you still confident that A, your infrastructure; and B, your pipeline, can deliver the trajectory that you guys have talked about in the past and you just don’t know exactly when it’s going to come to fruition because a lot of these interruptions?.

Break that into two pieces. If you take our quarter, our third quarter year-to-date numbers for Brazil at the exchange rates for last year we’d be at $20 million plus this year or $10 million.

If the real goes to exaggerating here, I am not suggesting this but if the real goes to 4.5 or 5, you know what that means; if the real goes to 3.5 or 3, you know what that means. So, our plant has -- when we complete the expansion we targeted to be able to produce at a capacity of average capacity of 300 tons per day.

We have operated the plant on multiple occasions over 400 tons per day. We do not have -- we aren’t forecasting that and we do not have the brand to be able to run at that level. Marc, you saw we were up 52% in local currency through September and yet we’re down in U.S.

dollar, so Brazil is going to be Brazil and we’re going to have to write that one out. On the U.S. side, we completed the expansion at H&N and we have the capacity in place, we have the team in place, and we absolutely have the capacity to hit the trajectories that we were talking about previously.

We’re delayed a couple of quarters, we’re starting to get some traction now; we think Q4 will be good for us and we think that 2016 will be good for us. But there is a lot in the pipeline, there is a lot of stuff coming, we expect those things to convert, one by one they’re coming on.

And we have to get them first to convert and then to ramp because everybody’s initial purchase order is relatively small. But we’re not happy about the quarter; we are actually excited about where we are..

And then still no timing on getting that settlement almost that $2 million that it sounds like you guys could use to help offset some of these budget cuts?.

Marc, this is Dale. As I’ve already mentioned in my comments, we filed that motion here in Phoenix in the U.S. Court. I think it’s now been a month and half or maybe even two.

There has been some issues on the other side with regard to council and we believe we’re at the very end of the court process to move towards getting a ruling from the judge, so we can do what we have to do to get the money released. So, we need that court order in order to break that agreement. So, as we sit here today, I believe we’re near the end..

So again, jus to finish on my questions. You said you’ve made some cuts and I think it looks like operationally you guys have done a descent job on albeit at much lower run rate in Brazil and the U.S., but yet you have all these great opportunities and you’ve added a few sales people.

Are you cutting into the bone ball or are you just tightening up your operations?.

Well, on the operating expenses, I mean I’ve been here over five years now and we have never in my entire tenure here ever had a significant uptick and hiring of personnel. If you looked at our headcount over the last five years, it’s been very modest. And we have here recently as Mark has already mentioned very judiciously added some sales people.

And we’ve got to have boots on the ground to go make the sales happen. And that was a good investment. But in Brazil, one of the positive aspects of the depreciation in the real is the fact that it has the opposite effect on cost that hurt you on revenues but it certainly makes your expenses look a little better.

But they have as part of the restructuring; I’ll loosely call it a restructuring down there. They have cut back on some people, very surgically reduce some of their administrative personnel and they are running the plant more efficiently with fewer people. So, it’s been a combination down there.

But I don’t think we’re in so cutting into the bone at all. I mean we’re not significantly different in personnel, headcount here in the U.S. today than we have in recent memory..

Our next question is from Gary Herman with Strategic Turnaround Fund. Please proceed with your question..

Good afternoon.

Just a quick question about your credit line, how much have you drawn down on it to-date?.

Well, in our 10-Q and our debt footnote, this is from memory, we have a -- and as we have said I think in our press release, we have $2.5 million term loan. And the whole credit agreement was a three-year deal, which takes it out to 2018.

And then we have a working capital line that’s your typical ABL type line that is a function of collateral which is your AR in inventory. So that line moves up and down daily and payments are received and draw downs are taken..

Gary, it’s a $3.5 million working capital facility that is $2.5 million A term loan which is drawn and 2 million B term loan which is not drawn and that’s where we are..

Do you anticipate the need to raise additional capital this point in time considering what you have in the bank and the anticipated collection from the arbitration award?.

As we sit here today, no..

Mr. Short, there are no further questions at this time. Please continue with your closing remarks..

Rob, thank you. Let’s give everybody another 30 seconds to see if there any other questions pop up. And if not, we will close. Nobody is jumping into queue and to the question line. So, I just want to thank our shareholders and investors for your continued support.

If you have any additional questions, reach out to Dale or me or to Rich Galterio, attendant, we’ll be happy to respond to the extent that we can. And I want to thank everybody for joining today. That’s it and we’re signing off..

Thank you..

Yes, thanks everybody..