10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017

OR

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to _________

Commission file number 001-34719

S&W SEED COMPANY
(Exact name of Registrant as Specified in its Charter)

 

Nevada	27-1275784
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

106 K Street, Suite 300
Sacramento, California    95814
(Address of Principal Executive Offices, including Zip Code)

(559) 884-2535
(Registrant's Telephone Number, including Area Code)

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days.    x YES      ¨ NO   

      Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     YES  x     NO  ¨

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer    ¨ Accelerated filer    ¨ Non-accelerated filer    ¨
(Do not check if a smaller reporting company) Smaller reporting company    x Emerging growth company    ¨

      If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨

      Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES    ¨        NO    x

      As of February 8, 2018, 24,336,913 shares of the registrant's common stock were outstanding.

S&W SEED COMPANY
Table of Contents

PART I. FINANCIAL INFORMATION	Page No.
Item 1. Financial Statements (Unaudited):
Consolidated Balance Sheets at December 31, 2017 and June 30, 2017	4
Consolidated Statements of Operations for the Three and Six Months Ended December 31, 2017 and 2016	5
Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended December 31, 2017 and 2016	6
Consolidated Statements of Stockholders' Equity for the Six Months Ended December 31, 2017 and 2016	7
Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2017 and 2016	8
Notes to Consolidated Financial Statements	9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk	57
Item 4. Controls and Procedures	57
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	58
Item 1A. Risk Factors	58
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3. Defaults Upon Senior Securities	58
Item 4. Mine Safety Disclosures	58
Item 5. Other Information	58
Item 6. Exhibits	59

1

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are subject to the "safe harbor" created by those sections. These forward-looking statements include but are not limited to, any statements concerning projections of revenue, margins, expenses, tax provisions, earnings, cash flows and other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding our ability to raise capital in the future; any statements concerning expected development, performance or market acceptance relating to our products or services or our ability to expand our grower or customer bases or to diversify our product offerings; any statements regarding future economic conditions or performance; any statements of expectation or belief; any statements regarding our ability to retain key employees; and any statements of assumptions underlying any of the foregoing. These forward-looking statements are often identified by the use of words such as, but not limited to, "anticipate," "believe," "can," "continue," "could," "designed," "estimate," "expect," "intend," "may," "plan," "potential," "project," "seek," "should," "target," "will," "would," and similar expressions or variations intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations about future events. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Risks, uncertainties and assumptions include the following:

• whether we are successful in securing sufficient acreage to support the growth of our alfalfa seed business,
• our plans for expansion of our business (including through acquisitions) and our ability to successfully integrate acquisitions into our operations;
• the continued ability of our distributors and suppliers to have access to sufficient liquidity to fund their operations;
• trends and other factors affecting our financial condition or results of operations from period to period;
• the impact of crop disease, severe weather conditions, such as flooding, or natural disasters, such as earthquakes, on crop quality and yields and on our ability to grow, procure or export our products;
• the impact of pricing of other crops that may be influence what crops our growers elect to plant;
• whether we are successful in aligning expense levels to revenue changes;
• whether we are successful in monetizing our stevia business;
• the cost and other implications of pending or future legislation or court decisions and pending or future accounting pronouncements; and
• other risks that are described herein or updated from time to time in our filings with the Securities and Exchange Commission ("SEC").

2

You are urged to carefully review the disclosures made concerning risks and uncertainties that may affect our business or operating results, which include, among others, those listed in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K, which was filed with the SEC on September 20, 2017.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Many factors discussed in this Quarterly Report on Form 10-Q, some of which are beyond our control, will be important in determining our future performance. Consequently, these statements are inherently uncertain and actual results may differ materially from those that might be anticipated from the forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this Quarterly Report on Form 10-Q as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Furthermore, such forward-looking statements represent our views as of, and speak only as of, the date of this Quarterly Report on Form 10-Q, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. We undertake no obligation to publicly update any forward-looking statements, or to update the reasons why actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

When used in this Quarterly Report on Form 10-Q, the terms "we," "us," "our," "the Company," "S&W" and "S&W Seed" refer to S&W Seed Company and its subsidiaries or, as the context may require, S&W Seed Company only. Our fiscal year ends on June 30, and accordingly, the terms "fiscal 2018," "fiscal 2017" and "fiscal 2016" in this Quarterly Report on Form 10-Q refer to the respective fiscal year ended June 30, 2018, 2017 and 2016, respectively, with corresponding meanings to any fiscal year reference beyond such dates. Trademarks, service marks and trade names of other companies appearing in this report are the property of their respective holders.

3

Part I

FINANCIAL INFORMATION

Item 1. Financial Statements

S&W SEED COMPANY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

		December 31,		June 30,
		2017		2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	5,454,694	$	745,001
Accounts receivable, net		25,250,475		23,239,325
Inventories, net		70,486,985		31,489,945
Prepaid expenses and other current assets		1,500,066		1,249,921
TOTAL CURRENT ASSETS		102,692,220		56,724,192
Property, plant and equipment, net		13,630,123		13,581,576
Intangibles, net		33,810,687		34,939,079
Goodwill		10,292,265		10,292,265
Other assets		1,568,286		1,563,176
TOTAL ASSETS	$	161,993,581	$	117,100,288
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	32,831,640	$	7,157,745
Accounts payable - related parties		117,164		331,694
Deferred revenue		55,442		880,326
Accrued expenses and other current liabilities		2,671,495		2,733,718
Lines of credit, net		27,592,603		27,399,784
Current portion of contingent consideration obligation		-		2,500,000
Current portion of long-term debt, net		358,864		10,309,664
TOTAL CURRENT LIABILITIES		63,627,208		51,312,931
Long-term debt, net, less current portion		13,203,191		1,096,155
Derivative warrant liabilities		-		2,836,600
Other non-current liabilities		781,629		632,947
TOTAL LIABILITIES		77,612,028		55,878,633
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized;
no shares issued and outstanding		-		-
Common stock, $0.001 par value; 50,000,000 shares authorized;
24,353,300 issued and 24,328,300 outstanding at December 31, 2017;
18,004,681 issued and 17,979,681 outstanding at June 30, 2017;		24,353		18,004
Treasury stock, at cost, 25,000 shares		(134,196)		(134,196)
Additional paid-in capital		108,568,030		83,312,518
Accumulated deficit		(18,653,679)		(16,436,286)
Accumulated other comprehensive loss		(5,422,955)		(5,538,385)
TOTAL STOCKHOLDERS' EQUITY		84,381,553		61,221,655
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	161,993,581	$	117,100,288

See notes to consolidated financial statements.

4

S&W SEED COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

		Three Months Ended				Six Months Ended
		December 31,				December 31,
		2017		2016		2017		2016
Revenue	$	20,532,796	$	24,225,744	$	31,244,512	$	36,475,317
Cost of revenue		15,860,629		19,005,270		24,236,757		29,311,580
Gross profit		4,672,167		5,220,474		7,007,755		7,163,737
Operating expenses
Selling, general and administrative expenses		2,446,955		2,592,059		5,361,035		5,047,263
Research and development expenses		855,164		748,571		1,597,081		1,490,113
Depreciation and amortization		870,981		842,454		1,759,233		1,677,151
Disposal of property, plant and equipment gain		(15,413)		-		(81,776)		-
Total operating expenses		4,157,687		4,183,084		8,635,573		8,214,527
Income (loss) from operations		514,480		1,037,390		(1,627,818)		(1,050,790)
Other expense
Foreign currency loss (gain)		7,472		(2,837)		22,030		(6,483)
Change in derivative warrant liabilities		341,199		(959,200)		(431,300)		168,500
Change in contingent consideration obligations		-		57,282		-		164,363
Loss on equity method investment		-		-		-		49,249
Interest expense - amortization of debt discount		33,100		381,660		67,099		981,118
Interest expense - convertible debt and other		383,894		295,042		731,623		647,584
Income (loss) before income taxes		(251,185)		1,265,443		(2,017,270)		(3,055,121)
Provision (benefit) for income taxes		148,702		106,485		200,123		(996,923)
Net income (loss)	$	(399,887)	$	1,158,958	$	(2,217,393)	$	(2,058,198)
Net income (loss) per common share:
Basic	$	(0.02)	$	0.07	$	(0.11)	$	(0.12)
Diluted	$	(0.02)	$	0.01	$	(0.11)	$	(0.12)
Weighted average number of common shares outstanding:
Basic		21,130,960		17,821,547		20,643,973		17,467,370
Diluted		21,130,960		17,996,221		20,643,973		17,467,370

See notes to consolidated financial statements.

5

S&W SEED COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

		Three Months Ended				Six Months Ended
		December 31,				December 31,
		2017		2016		2017		2016
Net income (loss)	$	(399,887)	$	1,158,958	$	(2,217,393)	$	(2,058,198)
Foreign currency translation adjustment, net of income taxes		(41,223)		(448,784)		115,430		(243,621)
Comprehensive income (loss)	$	(441,110)	$	710,174	$	(2,101,963)	$	(2,301,819)

See notes to consolidated financial statements.

6

S&W SEED COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)

	Common Stock			Treasury Stock				Additional Paid-In		Accumulated		Accumulated Other Comprehensive		Total Stockholders'
	Shares		Amount	Shares		Amount		Capital		Deficit		Loss		Equity
Balance, June 30, 2016	17,086,111	$	17,086	(25,000)	$	(134,196)	$	78,282,461	$	(4,614,244)	$	(5,789,663)	$	67,761,444
Stock-based compensation - options, restricted stock, and RSUs	-		-	-		-		578,659		-		-		578,659
Net issuance to settle RSUs	41,270		41	-		-		(75,124)		-		-		(75,083)
Issuance of common stock upon conversion of principal and
interest of convertible debentures	684,321		684	-		-		3,160,589		-		-		3,161,273
Exercise of stock options, net of withholding taxes	161,781		162	-		-		601,921		-		-		602,083
Other comprehensive loss	-		-	-		-		-		-		(243,621)		(243,621)
Net loss	-		-	-		-		-		(2,058,198)		-		(2,058,198)
Balance, December 31, 2016	17,973,483	$	17,973	(25,000)	$	(134,196)	$	82,548,506	$	(6,672,442)	$	(6,033,284)	$	69,726,557
Balance, June 30, 2017	18,004,681	$	18,004	(25,000)	$	(134,196)	$	83,312,518	$	(16,436,286)	$	(5,538,385)	$	61,221,655
Stock-based compensation - options, restricted stock, and RSUs	-		-	-		-		451,033		-		-		451,033
Net issuance to settle RSUs	88,619		89	-		-		(113,777)		-		-		(113,688)
Proceeds from sale of common stock, net of fees and expenses	6,260,000		6,260	-		-		22,512,956		-		-		22,519,216
Reclassification of warrants upon expiration of repricing provisions	-		-	-		-		2,405,300		-		-		2,405,300
Other comprehensive income	-		-	-		-		-		-		115,430		115,430
Net loss	-		-	-		-		-		(2,217,393)		-		(2,217,393)
Balance, December 31, 2017	24,353,300	$	24,353	(25,000)	$	(134,196)	$	108,568,030	$	(18,653,679)	$	(5,422,955)	$	84,381,553

See notes to consolidated financial statements.

7

S&W SEED COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		Six Months Ended
		December 31,
		2017		2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,217,393)	$	(2,058,198)
Adjustments to reconcile net loss from operating activities to net cash used in operating activities
Stock-based compensation		451,033		578,659
Bad debt expense		20,547		-
Depreciation and amortization		1,759,233		1,677,151
Gain on disposal of property, plant and equipment		(81,776)		-
Change in deferred tax asset		-		(1,034,439)
Change in foreign exchange contracts		100,864		234,286
Change in derivative warrant liabilities		(431,300)		168,500
Change in contingent consideration obligation		-		164,363
Amortization of debt discount		67,099		981,118
Loss on equity method investment		-		49,249
Changes in:
Accounts receivable		(1,960,907)		1,820,501
Inventories		(38,850,545)		(20,836,483)
Prepaid expenses and other current assets		(377,920)		72,841
Other non-current asset		(4,963)		-
Accounts payable		25,606,471		10,098,122
Accounts payable - related parties		(216,112)		3,462,649
Deferred revenue		(614,523)		(151,463)
Accrued expenses and other current liabilities		(67,000)		(1,150,794)
Other non-current liabilities		148,147		(61,677)
Net cash used in operating activities		(16,669,045)		(5,985,615)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(815,063)		(1,264,395)
Proceeds from disposal of property, plant and equipment		46,218		-
Additions to internal use software		-		(118,389)
Net cash used in investing activities		(768,845)		(1,382,784)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock		22,519,216		-
Net proceeds from exercise of common stock options		-		602,083
Taxes paid related to net share settlements of stock-based compensation awards		(113,688)		(75,083)
Borrowings and repayments on lines of credit, net		38,574		5,646,664
Repayment of contingent consideration obligation		(2,500,000)		-
Borrowings of long-term debt		12,500,000		88,150
Debt issuance costs		(257,964)		-
Repayments of long-term debt		(10,113,415)		(169,598)
Repayments of convertible debt		-		(3,427,837)
Net cash provided by financing activities		22,072,723		2,664,379
EFFECT OF EXCHANGE RATE CHANGES ON CASH		74,860		(92,185)
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS		4,709,693		(4,796,205)
CASH AND CASH EQUIVALENTS, beginning of the period		745,001		6,904,500
CASH AND CASH EQUIVALENTS, end of period	$	5,454,694	$	2,108,295
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	776,882	$	823,844
Income taxes		42,244		148,019

See notes to consolidated financial statements.

8

S&W SEED COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1 - BACKGROUND AND ORGANIZATION

Organization

S&W Seed Company, a Nevada corporation (the "Company"), began as S&W Seed Company, a general partnership, in 1980 and was originally in the business of breeding, growing, processing and selling alfalfa seed. We then incorporated a corporation with the same name in Delaware in October 2009, which is the successor entity to Seed Holding, LLC, having purchased a majority interest in the general partnership between June 2008 and December 2009. Following the Company's initial public offering in May 2010, the Company purchased the remaining general partnership interests and became the sole owner of the general partnership's original business. Seed Holding, LLC remains a consolidated subsidiary of the Company.

In December 2011, the Company reincorporated in Nevada as a result of a statutory short-form merger of the Delaware corporation into its wholly-owned subsidiary, S&W Seed Company, a Nevada corporation.

On April 1, 2013, the Company, together with its wholly-owned subsidiary, S&W Seed Australia Pty Ltd, an Australia corporation ("S&W Australia"), consummated an acquisition of all of the issued and outstanding shares of Seed Genetics International Pty Ltd, an Australia corporation ("SGI"), from SGI's shareholders.

Business Overview

Since its establishment, the Company, including its predecessor entities, has been principally engaged in breeding, growing, processing and selling agricultural seeds, primarily alfalfa seed. The Company owns seed cleaning and processing facilities, which are located in Five Points, California, Nampa, Idaho and Keith, South Australia. The Company's seed products are primarily grown under contract by farmers. The Company began its stevia initiative in fiscal year 2010 and is currently focused on breeding improved varieties of stevia and developing marketing and distribution programs for its stevia products.

The Company has also been actively engaged in expansion initiatives through a combination of organic growth and strategic acquisitions, including in December 31, 2014, when the Company purchased certain alfalfa research and production facilities and conventional (non-GMO) alfalfa germplasm assets and assumed certain related liabilities ("the Pioneer Acquisition") of Pioneer Hi-Bred International, Inc. ("DuPont Pioneer").

More recently, in May 2016, the Company acquired the assets and business of SV Genetics, a private Australian company specializing in the breeding and licensing of proprietary hybrid sorghum and sunflower seed germplasm, which represented the Company's initial effort to diversify its product portfolio beyond alfalfa seed and stevia.

The Company's operations span the world's alfalfa seed production regions with operations in the San Joaquin and Imperial Valleys of California, five other U.S. states, Australia, and three provinces in Canada, and the Company sells its seed products in more than 30 countries around the globe.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The Company maintains its accounting records on an accrual basis in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The consolidated financial statements include the accounts of Seed Holding, LLC and its other wholly-owned subsidiaries, S&W Australia, which owns 100% of SGI, and Stevia California, LLC. All significant intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements are unaudited and, in the Company's opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company's consolidated balance sheets, statements of operations, comprehensive income (loss), cash flows and stockholders' equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2018. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended June 30, 2017, as filed with the SEC.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, derivative liabilities, contingencies and litigation. Significant estimates and assumptions are also used to establish the fair value and useful lives of depreciable tangible and certain intangible assets, goodwill as well as valuing stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows.

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Certain Risks and Concentrations

The Company's revenue is principally derived from the sale of alfalfa seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 75% and 66% of its revenue for the three months ended December 31, 2017 and 2016, respectively. One customer accounted for 58% and 49% of its revenue for the six months ended December 31, 2017 and 2016, respectively.

Two customers accounted for 50% of the Company's accounts receivable at December 31, 2017. Two customers accounted for 52% of the Company's accounts receivable at June 30, 2017.

In addition, the Company sells a substantial portion of its products to international customers. Sales to international markets represented 23% and 30% of revenue during the three months ended December 31, 2017 and 2016, respectively. Sales to international markets represented 38% and 46% of revenue during the six months ended December 31, 2017 and 2016, respectively. The net book value of fixed assets located outside the United States was 19% and 19% of total assets at December 31, 2017 and June 30, 2017, respectively. Cash balances located outside of the United States may not be insured and totaled $1,209,181 and $192,879 at December 31, 2017 and June 30, 2017, respectively.

The following table shows revenue from external sources by destination country:

		Three Months Ended December 31,						Six Months Ended December 31,
		2017			2016			2017			2016
United States	$	15,740,706	77%	$	16,858,325	70%	$	19,265,254	62%	$	19,782,389	54%
Mexico		1,664,618	8%		1,404,133	6%		4,380,626	14%		3,745,027	10%
Argentina		1,183,423	6%		1,677,035	7%		2,742,619	9%		2,565,004	7%
Libya		563,673	3%		-	0%		752,673	2%		-	0%
Saudi Arabia		513,000	2%		1,843,949	8%		844,908	3%		5,221,772	15%
Australia		438,468	2%		71,175	0%		557,998	2%		790,636	2%
South Africa		338,993	2%		634,768	2%		467,342	1%		636,870	2%
Sudan		-	0%		67,016	0%		447,500	1%		67,016	0%
Other		89,915	0%		1,669,343	7%		1,785,592	6%		3,666,603	10%
Total	$	20,532,796	100%	$	24,225,744	100%	$	31,244,512	100%	$	36,475,317	100%

International Operations

The Company translates its foreign operations' assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income. Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

Revenue Recognition

The Company derives its revenue primarily from sale of seed and other crops and milling services. Revenue from seed and other crop sales is recognized when risk and title to the product is transferred to the customer.

11

The Company recognizes revenue from milling services according to the terms of the sales agreements and when delivery has occurred, performance is complete and pricing is fixed or determinable at the time of sale.

Additional conditions for recognition of revenue for all sales include the requirements that the collection of sales proceeds must be reasonably assured based on historical experience and current market conditions, the sales price is fixed and determinable and that there must be no further performance obligations under the sale.

Cost of Revenue

The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue.

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation.

Accounts Receivable

The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer's trade accounts receivable. The allowance for doubtful trade receivables was $526,495 at December 31, 2017 and June 30, 2017.

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or market, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities.

12

The Company's subsidiary, SGI, does not fix the final price for seed payable to its growers until the completion of a given year's sales cycle pursuant to its standard contract production agreement. SGI records an estimated unit price; accordingly, inventory, cost of revenue and gross profits are based upon management's best estimate of the final purchase price to growers.

Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. Because the germination rate, and therefore the quality, of alfalfa seed improves over the first year of proper storage, inventory obsolescence for alfalfa seed is not a material concern. The Company sells its inventory to distributors, dealers and directly to growers.

Components of inventory are:

		December 31,		June 30,
		2017		2017
Raw materials and supplies	$	235,910	$	266,551
Work in progress		23,890,021		5,603,825
Finished goods		46,361,054		25,619,569
	$	70,486,985	$	31,489,945

Property, Plant and Equipment

Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 5-28 years for buildings, 3-20 years for machinery and equipment, and 3-5 years for vehicles. 

Intangible Assets

Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 10-20 years for customer relationships and trade names and 3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 18 years for customer relationships and 20 years for trade names and other intangible assets.

13

Goodwill

Goodwill originated from acquisitions of Imperial Valley Seeds, Inc. ("IVS") and SGI during the fiscal year 2013, the acquisition of the alfalfa business from DuPont Pioneer in fiscal year 2015 and the acquisition of assets of SV Genetics in May 2016. Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses market capitalization to estimate the fair value of its one reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. The Company performed a quantitative assessment of goodwill at June 30, 2017 and determined that goodwill was not impaired.

Equity Method Investments

Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company's board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company's accounts are not reflected within the Company's consolidated balance sheets and statements of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption ``Loss on equity method investment'' in the consolidated statements of operations. The Company's carrying value in an equity method investee company is included in the Company's consolidated balance sheets. When the Company's carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company's consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.

14

Cost Method Investments

Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method, the Company's share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges are recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded.

Research and Development Costs

The Company is engaged in ongoing research and development ("R&D") of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset.

Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial statement and tax basis of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company's effective tax rate for the three and six months ended December 31, 2017 has been effected by the valuation allowance on the Company's deferred tax assets.

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share ("EPS"), is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. 

Diluted EPS is calculated by adjusting both the numerator (net income (loss)) and the denominator (weighted-average number of shares outstanding) for the dilutive effects of potentially dilutive securities, including options, restricted stock awards, convertible debt and common stock warrants. 

• The if-converted method is used for convertible debt. Under the if-converted method, interest expense recognized in the period on the convertible debt is added to net income, and the number of shares that would be obtained upon conversion is added to the denominator. 
• The treasury stock method is used for common stock warrants, stock options, and restricted stock awards.  Under this method, consideration that would be received upon exercise (as well as remaining compensation cost to be recognized for awards not yet vested) is assumed to be used to repurchase shares of stock in the market, with the net number of shares assumed to be issued added to the denominator.

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The calculation of Basic and Diluted EPS is shown in the table below. Classes of securities identified in the table with no adjustments in the calculation of Diluted EPS were determined to be antidilutive for the applicable periods. 

		Three Months Ended				Six Months Ended
		December 31,				December 31,
		2017		2016		2017		2016
Numerator:
Net income (loss)	$	(399,887)	$	1,158,958	$	(2,217,393)	$	(2,058,198)
Numerator for basis EPS		(399,887)		1,158,958		(2,217,393)		(2,058,198)
Effect of dilutive securities:
Warrants		-		(959,200)		-		-
		-		(959,200)		-		-
Numerator for diluted EPS	$	(399,887)	$	199,758	$	(2,217,393)	$	(2,058,198)
Denominator:
Denominator for basic EPS - weighted-average shares		21,130,960		17,821,547		20,643,973		17,467,370
Effect of dilutive securities:
Employee stock options		-		-		-		-
Employee restricted stock units		-		-		-		-
Warrants		-		174,674		-		-
Dilutive potential common shares		-		174,674		-		-
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions		21,130,960		17,996,221		20,643,973		17,467,370
Basic EPS	$	(0.02)	$	0.07	$	(0.11)	$	(0.12)
Diluted EPS	$	(0.02)	$	0.01	$	(0.11)	$	(0.12)

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset.

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Derivative Financial Instruments

Foreign Exchange Contracts

The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts.

The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, "Derivatives and Hedging", which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company's foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings.

Derivative Liabilities

The Company reviews the terms of the common stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options and redemption options, which are required to be bifurcated and accounted for separately as derivative financial instruments.

Fair Value of Financial Instruments

The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows:

• Level 1. Observable inputs such as quoted prices in active markets;
• Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
• Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

No assets or liabilities were valued at fair value on a non-recurring basis as of December 31, 2017 or June 30, 2017.

The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates. The Company used a discounted cash flows approach to measure the fair value using Level 3 inputs.

17

Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows:

		Fair Value Measurements as of December 31, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	68,172	$	-
Contingent consideration obligations		-		-		-
Derivative warrant liabilities		-		-		-
Total	$	-	$	68,172	$	-
		Fair Value Measurements as of June 30, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	166,629	$	-
Contingent consideration obligations		-		-		2,500,000
Derivative warrant liabilities		-		-		2,836,600
Total	$	-	$	166,629	$	5,336,600

During the six months ended December 31, 2017, a change in derivative warrant liability of $431,300 was recorded in earnings. Upon expiration of the round-down pricing protection on December 31, 2017, the warrants were reclassified from derivative warrant liabilities to equity.

During the six months ended December 31, 2017, there was no change in the contingent consideration obligations. The DuPont contingent consideration was settled on December 1, 2017. Refer to Note 5 for further discussion. 

Recently Adopted and Issued Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). This standard eliminates Step 2 from the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for the Company beginning July 1, 2020. The adoption is not expected to have a material impact on the consolidated financial statements.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). This standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for the Company beginning July 1, 2018 and the Company is currently evaluating the impact that ASU 2016-15 will have on its consolidated financial statements.

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In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). This standard was issued as part of the FASB's Simplification Initiative that involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. For public business entities, ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The method of adoption is dependent on the specific aspect of accounting addressed in this new guidance. Early adoption is permitted in any interim or annual period. The Company adopted ASU 2016-09 in the first quarter of the fiscal year ended June 30, 2018. The adoption did not have a material impact on the consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02: Leases ("ASU 2016-02"). This standard amends various aspects of existing accounting guidance for leases, including the recognition of a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. This standard also introduces new disclosure requirements for leasing arrangements. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective approach, and provides for certain practical expedients. The Company is evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements and related disclosures.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (``ASU 2014-09''). This standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most existing revenue recognition guidance under U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. The FASB recently issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. However, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date that defers the effective date of ASU 2014-09 for all public business entities by one year. As a result, ASU 2014-09 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements and related disclosures.

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NOTE 3 - GOODWILL AND INTANGIBLE ASSETS

The following table summarizes the activity of goodwill for the six months ended December 31, 2017 and the year ended June 30, 2017, respectively.

		Balance at				Balance at
		July 1, 2017		Additions		December 31, 2017
Goodwill	$	10,292,265	$	-	$	10,292,265

		Balance at				Balance at
		July 1, 2016		Additions		June 30, 2017
Goodwill	$	10,292,265	$	-	$	10,292,265

Intangible assets consist of the following:

		Balance at						Balance at
		July 1, 2017		Additions		Amortization		December 31, 2017
Trade name	$	1,244,306	$	-	$	(42,240)	$	1,202,066
Customer relationships		1,258,163		-		(50,604)		1,207,559
Non-compete		102,035		-		(31,032)		71,003
GI customer list		78,803		-		(3,582)		75,221
Supply agreement		1,153,415		-		(37,816)		1,115,599
Distribution agreement		6,728,753		-		(192,250)		6,536,503
Production agreement		111,670		-		(111,666)		4
Grower relationships		1,858,616		-		(52,704)		1,805,912
Intellectual property		21,725,539		-		(572,610)		21,152,929
Internal use software		677,779		-		(33,888)		643,891
	$	34,939,079	$	-	$	(1,128,392)	$	33,810,687

		Balance at						Balance at
		July 1, 2016		Additions		Amortization		June 30, 2017
Trade name	$	1,328,786	$	-	$	(84,480)	$	1,244,306
Customer relationships		1,359,371		-		(101,208)		1,258,163
Non-compete		198,999		-		(96,964)		102,035
GI customer list		85,967		-		(7,164)		78,803
Supply agreement		1,229,047		-		(75,632)		1,153,415
Distribution agreement		7,113,253		-		(384,500)		6,728,753
Production agreement		335,002		-		(223,332)		111,670
Grower relationships		1,964,024		-		(105,408)		1,858,616
Intellectual property		22,870,760		-		(1,145,221)		21,725,539
Internal use software		521,593		156,186		-		677,779
	$	37,006,802	$	156,186	$	(2,223,909)	$	34,939,079

Amortization expense totaled $555,471 and $555,977 for the three months ended December 31, 2017 and 2016, respectively. Amortization expense totaled $1,128,392 and $1,111,954 for the six months ended December 31, 2017 and 2016, respectively. Estimated aggregate remaining amortization is as follows:

		2018		2019		2020		2021		2022		Thereafter
Amortization expense	$	993,981	$	1,977,388	$	1,977,388	$	1,977,388	$	1,977,388	$	24,907,154

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NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

		December 31,		June 30,
		2017		2017
Land and improvements	$	2,090,069	$	2,223,674
Buildings and improvements		6,784,964		6,401,277
Machinery and equipment		5,680,599		5,435,542
Vehicles		1,166,596		1,005,455
Construction in progress		2,170,844		2,196,513
Total property, plant and equipment		17,843,072		17,262,461
Less: accumulated depreciation		(4,212,949)		(3,680,885)
Property, plant and equipment, net	$	13,630,123	$	13,581,576

Depreciation expense totaled $315,510 and $286,477 for the three months ended December 31, 2017 and 2016, respectively. Depreciation expense totaled $630,842 and $565,197 for the six months ended December 31, 2017 and 2016, respectively.

NOTE 5 - DEBT

Total debt outstanding, excluding convertible debt addressed in Note 6, are presented on the consolidated balance sheet as follows:

		December 31,		June 30,
		2017		2017
Working capital lines of credit
KeyBank	$	21,649,089	$	18,695,896
National Australia Bank Limited		6,115,026		8,703,888
Debt issuance costs		(171,512)		-
Total working capital lines of credit, net	$	27,592,603	$	27,399,784
Current portion of long-term debt
Keith facility (building loan) - National Australia Bank Limited	$	3,901	$	-
Keith facility (machinery & equipment loans) - National Australia Bank Limited		218,239		209,664
Unsecured subordinate promissory note		100,000		100,000
Promissory note - DuPont Pioneer		-		10,000,000
Secured real estate note - Conterra		112,711		-
Debt issuance costs		(77,563)		-
Secured equipment note - Conterra		18,473		-
Debt issuance costs		(16,897)		-
Total current portion, net		358,864		10,309,664
Long-term debt, less current portion
Keith facility (building loan) - National Australia Bank Limited		444,713		499,524
Keith facility (machinery & equipment loans) - National Australia Bank Limited		545,285		596,631
Secured real estate note - Conterra		10,287,289		-
Debt issuance costs		(138,917)		-
Secured equipment note - Conterra		2,081,527		-
Debt issuance costs		(16,706)		-
Total long-term portion, net		13,203,191		1,096,155
Total debt, net	$	13,562,055	$	11,405,819

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On September 22, 2015, the Company and KeyBank National Association ("KeyBank") entered into a credit and securities agreement and related agreements with respect to a $20,000,000 aggregate principal amount revolving credit facility (the "KeyBank Credit Facility"), the principal amount of which was increased to $35,000,000 pursuant to a Fourth Amendment Agreement (the "Fourth Amendment") on September 13, 2017, as more fully described below. Under the Fourth Amendment, all amounts of unpaid principal and interest due under the KeyBank Credit Facility must be paid in full on or before September 12, 2019.

On October 4, 2016, the Company and KeyBank entered into a Second Amendment Agreement effective September 30, 2016 (the "Second Amendment"). The purpose of the Second Amendment was to provide certain temporary changes to the terms of the KeyBank Credit Facility, including: (i) temporarily increasing the borrowing capacity from $20.0 million to (a) up to $25.0 million between October 1, 2016 and November 30, 2016 and (b) up to $30.0 million from February 1, 2017 through March 31, 2017; (ii) temporarily allowing for a $4.0 million over-advance beyond the amounts otherwise available based on the borrowing base calculations, which was available through February 28, 2017; and (iii) temporarily expanding the borrowing base by reducing the reserves that KeyBank may establish with respect to grower payables to 75% between August 31, 2016 and February 28, 2017.

On March 13, 2017, the Company entered into a Third Amendment Agreement (the " Third Amendment"). The purpose of the Third Amendment was to provide certain temporary changes to the terms of the KeyBank Credit Facility, including: (i) further extending the temporary period during which the Company may borrow, repay and reborrow up to $30.0 million in the aggregate under the credit facility until April 21, 2017; and (ii) retroactively and temporarily allowing for over-advances, beyond amounts otherwise available based on the borrowing base calculations under the Credit Facility (a) of up to $3.5 million during the period from March 8, 2017 through March 10, 2017, (b) of up to $5.0 million during the period from March 11, 2017 through March 17, 2017, (c) of up to $6.0 million during the period from March 18, 2017 through March 24, 2017, (d) of up to $7.0 million during the period from March 25, 2017 through March 31, 2017 and (e) of up to $8.5 million during the period from April 1, 2017 through as late as April 20, 2017.

On September 13, 2017, the Company and Key Bank entered into the Fourth Amendment, pursuant to which the maturity date was extended to September 12, 2019 and the principal amount that the Company may borrow, repay and reborrow was increased to $35.0 million, subject to a requirement that the Company maintain a reduced loan balance of (i) not more than $20 million for at least 30 consecutive days over the prior 12 months (measured each quarter on a trailing 12 month basis) and (ii) not more than $25 million for at least 60 consecutive days over the prior 12 months (measured each quarter on a trailing 12 month basis). The Fourth Amendment generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable and 90% of eligible foreign accounts receivable, plus up to 65% of eligible inventory, subject to lender reserves. Loans may be based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.2% per annum), generally at the Company's option.

22

In the event of a default, at the option of KeyBank, the interest rate on all obligations owing will increase by 3% per annum over the rate otherwise applicable. The Company is required to maintain one or more lockbox or cash collateral accounts at KeyBank, in KeyBank's name, which provide for the collection and remittance of all proceeds from sales of Company product (which is collateral for the KeyBank Credit Facility) on a daily basis. Subject to certain exceptions, the KeyBank Credit Facility is secured by a first priority perfected security interest in all the Company's now owned and after acquired tangible and intangible assets as well as the assets of the Company's domestic subsidiaries, which have guaranteed the Company's obligations under the KeyBank Credit Facility. The KeyBank Credit Facility is further secured by a lien on, and a pledge of, 65% of the stock of S&W Australia Pty Ltd., the Company's wholly-owned subsidiary. The KeyBank Credit Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default. The Company was in compliance with all covenants at December 31, 2017. The outstanding balance on the KeyBank Credit Facility was $21,649,089 at December 31, 2017.

On October 1, 2012, the Company issued a five-year subordinated promissory note to IVS in the principal amount of $500,000 (the "IVS Note"), with a maturity date of October 1, 2017. The IVS Note accrues interest at a rate equal to one-month LIBOR at closing plus 2%, which equals 2.2%. Interest is payable in five annual installments, in arrears, on October 1 of each year. Amortizing payments of the principal of $100,000 will also be made on each October 1, with any remaining outstanding principal and accrued interest payable on the maturity date of the IVS Note. The outstanding balance on the IVS Note was $100,000 at December 31, 2017.

On December 31, 2014, the Company issued a three-year secured promissory note to DuPont Pioneer in the initial principal amount of $10,000,000 (the "Pioneer Note"), with a maturity date of December 31, 2017. The Pioneer Note accrued interest at 3% per annum. Interest was payable in three annual installments, in arrears, commencing on December 31, 2015. On December 31, 2014, the Company also issued contingent consideration to DuPont Pioneer which required the Company to increase the principal amount of the Pioneer Note by up to an additional $5,000,000 if the Company met certain performance metrics during the three-year period following December 31, 2014. The earn out payment to DuPont Pioneer was finalized in October 2017 and this amount of $2,500,000 was added to the Pioneer Note in October 2017. On December 1, 2017, the Company repaid the Pioneer Note. The repayment amount included the $2.5 million earn-out payment related to the Pioneer Acquisition that was added to the principal amount of the Pioneer Note in October 2017.

23

On November 30, 2017, the Company entered into a secured note financing transaction (the "Loan Transaction") with Conterra Agricultural Capital, LLC ("Conterra") for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, the Company issued two secured promissory notes (the "Notes") to Conterra as follows:

• Secured Real Estate Note. The Company issued one Note in the principal amount of $10.4 million (the "Secured Real Estate Note") that is secured by a first priority security interest in the property, plant and fixtures (the "Real Estate Collateral") located at the Company's Five Points, California and Nampa, Idaho production facilities and its Nampa, Idaho and Arlington, Wisconsin research facilities (the "Facilities"). The Secured Real Estate Note matures on November 30, 2020, which, subject to Conterra's approval, may be extended to November 30, 2022. The Secured Real Estate Note bears interest of 7.75% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $515,711, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Company may prepay the Secured Real Estate Note, in whole or in part, at any time after it has paid a minimum of twelve months of interest on the Secured Real Estate Note.

• Secured Equipment Note. The Company issued a second Note in the principal amount of $2.1 million (the "Secured Equipment Note") that is secured by a first priority security interest in certain equipment not attached to real estate located at the Facilities. The Secured Equipment Note is also secured by the Real Estate Collateral. The Secured Equipment Note matures on November 30, 2019, which, subject to Conterra's approval, may be extended to November 30, 2020. The Secured Equipment Note bears interest at a rate of 9.5% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $118,223, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Company may prepay the Secured Equipment Note, in whole or in part, at any time.

The Notes and related documents include customary representations and warranties in addition to customary affirmative and negative covenants (including financial covenants), and customary events of default that permit Conterra to accelerate the Company's obligations under the Notes, including, among other things, that a default under one of the Notes would constitute a default under the other Note. On December 1, 2017, the Company used the proceeds from the Loan Transaction to repay the Pioneer Note.

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SGI finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility with National Australia Bank Ltd ("NAB"). The current facility, referred to as the 2016 NAB Facilities, was amended as of March 30, 2017 and expires on March 30, 2019. As of December 31, 2017, AUD $7,837,767 (USD $6,115,026) was outstanding under the 2016 NAB Facilities.

The 2016 NAB Facilities, as currently in effect, comprises two distinct facility lines: (i) an overdraft facility (the "Overdraft Facility"), having a credit limit of AUD $980,000 (USD $764,596 at December 31, 2017) and a borrowing base facility (the "Borrowing Base Facility"), having a credit limit of AUD $12,000,000 (USD $9,362,400 at December 31, 2017).

The Borrowing Base Facility permits SGI to borrow funds for periods of up to 180 days, at SGI's discretion, provided that the term is consistent with its trading terms. Interest for each drawdown is set at the time of the drawdown as follows: (i) for Australian dollar drawings, based on the Australian Trade Refinance Rate plus 1.5% per annum and (ii) for foreign currency drawings, based on the British Bankers' Association Interest Settlement Rate for the relevant foreign currency for the relevant period, or if such rate is not available, the rate reasonably determined by NAB to be the appropriate equivalent rate, plus 1.5% per annum. As of December 31, 2017, the Borrowing Base Facility accrued interest on Australian dollar drawings at approximately 5.07% calculated daily. The Borrowing Base Facility is secured by a lien on all the present and future rights, property and undertakings of SGI, the mortgage on SGI's Keith, South Australia property and the Company's corporate guarantee (up to a maximum of AUD $15,000,000).

The Overdraft Facility permits SGI to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of December 31, 2017, the Overdraft Facility accrued interest at approximately 6.77% calculated daily.

For both the Overdraft Facility and the Borrowing Base Facility, interest is payable each month in arrears. In the event of a default, as defined in the NAB Facility Agreement, the principal balance due under the facilities will thereafter bear interest at an increased rate per annum above the interest rate that would otherwise have been in effect from time to time under the terms of each facility (i.e., the interest rate increases by 4.5% per annum under the Borrowing Base Facility and the Overdraft Facility rate increases to 13.92% per annum upon the occurrence of an event of default).

Both facilities constituting the 2016 NAB Facilities are secured by a fixed and floating lien over all the present and future rights, property and undertakings of SGI and are guaranteed by the Company as noted above. The 2016 NAB Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the NAB facility agreements. SGI was in compliance with all NAB debt covenants at December 31, 2017.

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In January 2015, NAB and SGI entered into a new business markets - flexible rate loan (the "Keith Building Loan") in the amount of AUD $650,000 (USD $507,130 at December 31, 2017). Since entering into the Keith Building Loan, the limit has been changed on three occasions, with the current limit being AUD $675,000 (USD $526,635 at December 31, 2017), and a separate machinery and equipment facility (the "Keith Machinery and Equipment Facility") has been added with the limit being changed on two occasions, the current limit being AUD $702,779 (USD $548,308) at December 31, 2017. At December 31, 2017, the principal balance on the Keith Building Loan was AUD $575,000 (USD $448,615) with unused availability of AUD $100,000 (USD $78,021). At December 31, 2017, the principal balance on the Keith Machinery and Equipment Facility was AUD $674,132 (USD $525,957) with no unused availability. In February 2016, NAB and SGI also entered into a master asset finance facility (the "Master Assets Facility"). At December 31, 2017, the principal balance on the Master Assets Facility was AUD $304,493 (USD $237,566) with unused availability of AUD $445,507 (USD $347,585). The Master Asset Facility has various maturity dates through 2021 and have interest rates ranging from 4.79% to 5.31%.

The Keith Building Loan and Keith Machinery and Equipment Facility are used for the construction of a building on SGI's Keith, South Australia property, purchase of adjoining land and for the machinery and equipment for use in the operations of the building. The Keith Building Loan matures on November 30, 2024. The interest rate on the Keith Building Loan varies from pricing period to pricing period (each such period approximately 30 days), based on the weighted average of a specified basket of interest rates (6.11% as of December 31, 2017). Interest is payable each month in arrears. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. The Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the facility agreement. They are secured by a lien on all the present and future rights, property and undertakings of SGI, the Company's corporate guarantee and a mortgage on SGI's Keith, South Australia property.

The annual maturities of short-term and long-term debt are as follows:

Fiscal Year		Amount
2018	$	223,473
2019		572,693
2020		2,656,068
2021		10,150,465
2022		92,427
Thereafter		117,012
Total	$	13,812,138

NOTE 6 - SENIOR CONVERTIBLE NOTES AND WARRANTS

On December 31, 2014, the Company consummated the sale of senior secured convertible debentures (the "Debentures") and common stock purchase warrants (the "Warrants") to various institutional investors ("Investors") pursuant to the terms of a securities purchase agreement among the Company and the Investors. At closing, the Company received $27,000,000 in gross proceeds. Offering expenses of $1,931,105 attributed to the Debentures were recorded as deferred financing fees and recorded as a debt discount and offering expenses of $424,113 attributed to the Warrants were expensed during the year ended June 30, 2015. The net proceeds were paid directly to DuPont Pioneer in partial consideration for the purchase of certain DuPont Pioneer assets, the closing for which also took place on December 31, 2014.

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Debentures

At the date of issuance, the Debentures were due and payable on November 30, 2017, unless earlier converted or redeemed. The Debentures bear interest on the aggregate unconverted and then outstanding principal amount at 8% per annum, payable in arrears monthly beginning February 2, 2015. Commencing on the occurrence of any Event of Default (as defined in the Debentures) that results in the eventual acceleration of the Debentures, the interest rate will increase to 18% per annum. The monthly interest is payable in cash, or in any combination of cash or shares of the Company's common stock at the Company's option, provided certain "equity conditions" defined in the Debentures are satisfied.

Beginning on July 1, 2015, the Company was required to make monthly payments of principal as well, payable in cash or any combination of cash or shares of its common stock at the Company's option, provided all of the applicable equity conditions are satisfied. The Debentures contain certain rights of acceleration and deferral at the holder's option in the event a principal payment is to be made in stock and contains certain limited acceleration rights of the Company, provided certain conditions are satisfied.

During Fiscal Year 2016, the Company accelerated three redemption payments totaling $2,830,049.

During the year ended June 30, 2017, certain holders of the Debentures converted an aggregate of $3,168,342 of principal and interest into 684,321 shares of the Company's common stock in accordance with the terms of the Debentures. Upon conversion, the Company recognized interest expense of $194,939 related to unamortized debt discount on the Debentures and incurred $7,070 of stock issuance costs.

As of June 30, 2017, the Debentures were fully retired and had no outstanding balance.

Warrants

The Warrants entitle the holders to purchase, in the aggregate, 2,699,999 shares of the Company's common stock. The Warrants are exercisable through their expiration on June 30, 2020, unless earlier redeemed. The Warrants were initially exercisable at an exercise price equal to $5.00. On September 30, 2015, pursuant to the terms of the Warrants, the exercise price was reset to $4.63. In addition, if the Company issues or is deemed to have issued securities at a price lower than the then applicable exercise price during the three-year period ending December 31, 2017, the exercise price of the Warrants will adjust based on a weighted average anti-dilution formula ("down-round protection"). On November 24, 2015, the Company closed on a private placement transaction in which 1,180,722 common shares were sold at $4.15 per share. Pursuant to the down-round protection terms of the Warrants, the exercise price was adjusted to $4.59 on November 24, 2015. On February 29, 2016, the Company completed a rights offering and accompanying noteholders' participation rights offering in which an aggregate of 2,125,682 shares of common stock were sold at $4.15 per share, triggering an adjustment of the exercise price of the Warrants to $4.53. On July 19, 2017, the Company completed a private placement transaction in which an aggregate of 2,685,000 shares of common stock were sold at $4.00 per share, triggering an adjustment of the exercise price of the Warrants to $4.46. On December 22, 2017, the Company completed a rights offering and backstop commitment in which an aggregate of 3,500,000 shares of common stock were sold at $3.50 per share, triggering an adjustment of the exercise price of the Warrants to $4.32. The down-round protection provision of the warrants expired on December 31, 2017.

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The Warrants may be exercised for cash, provided that, if there is no effective registration statement available registering the exercise of the Warrants, the Warrants may be exercised on a cashless basis. At any time that (i) all equity conditions set forth in the Warrants have been satisfied, and (ii) the closing sales price of the common stock equals or exceeds $12.00 for 15 consecutive trading days (subject to adjustment for stock splits, reverse stock splits and other similar recapitalization events), the Company may redeem all or any part of the Warrants then outstanding for cash in an amount equal to $0.25 per Warrant.

Accounting for the Conversion Option and Warrants

Due to the down-round price protection included in the terms of the Warrants, the Warrants are treated as a derivative liability in the consolidated balance sheet, measured at fair value and marked to market each reporting period until the earlier of the Warrants being fully exercised or December 31, 2017, when the down-round protection expires. The down-round price protection expired on December 31, 2017, accordingly, the fair value of the Warrants as of December 31, 2017 was reclassified to additional paid in capital within the equity section of the balance sheet. The initial fair value of the Warrants on December 31, 2014 was $4,862,000. At December 31, 2017 and June 30, 2017, the fair value of the Warrants was estimated at $2,405,300 and $2,836,600, respectively. The Warrants were valued at December 31, 2017 using the Monte Carlo simulation model, under the following assumptions: (i) remaining expected life of 2.5 years, (ii) volatility of 39.0%, (iii) risk-free interest rate of 1.92% and (iv) dividend rate of zero. The aggregate fair value of the Warrants derived via the Monte Carlo analysis were also weighted by a prior third party market transaction and third party indications of fair value. The prior third party market transaction was provided a weighting of 10.0% while the third party indications of fair value were provided a 50% weighting in the fair value analysis.

The Warrants were valued at June 30, 2017 using the Monte Carlo simulation model, under the following assumptions: (i) remaining expected life of 3 years, (ii) volatility of 45.6%, (iii) risk-free interest rate of 1.54% and (iv) dividend rate of zero. The aggregate fair value of the Warrants derived via the Monte Carlo analysis were also weighted by a prior third party market transaction and third party indications of fair value. The prior third party market transaction was provided a weighting of 10.0% while the third party indications of fair value were provided a 50% weighting in the fair value analysis.

Of the $27,000,000 in principal amount of Debentures sold in December 2014, $22,138,000 of the initial proceeds was allocated to the Debentures. The required redemption contingent upon the real estate sale was determined to be an embedded derivative not clearly and closely related to the borrowing. As such, it was bifurcated and treated as a derivative liability, recorded initially at its fair value of $150,000, leaving an allocation to the host debt of $21,988,000. The difference between the initial amount allocated to the borrowing and the face value of the Debentures was amortized over the term of the Debentures using the effective interest method. Debt issuance costs totaling $1,931,105 were also amortized over the term of the Debentures using the effective interest method. In addition, the reduction in the conversion price of the Debentures as of September 30, 2015 resulted in a beneficial conversion feature of $871,862, which was recognized as additional debt discount and an increase to additional paid-in capital.

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NOTE 7 - WARRANTS

The following table summarizes the total warrants outstanding at December 31, 2017:

			Exercise Price	Expiration	Outstanding as			Outstanding as
	Issue Date		Per Share	Date	of June 30, 2017	New Issuances	Expired	of December 31, 2017
Warrants	Dec 2014	$	4.32	Jun 2020	2,699,999	-	-	2,699,999
					2,699,999	-	-	2,699,999

The following table summarizes the total warrants outstanding at June 30, 2017:

			Exercise Price	Expiration	Outstanding as			Outstanding as
	Issue Date		Per Share	Date	of June 30, 2016	New Issuances	Expired	of June 30, 2017
Underwriter warrants	May 2012	$	6.88	Feb 2017	50,000	-	(50,000)	-
Warrants	Dec 2014	$	4.53	Jun 2020	2,699,999	-	-	2,699,999
					2,749,999	-	(50,000)	2,699,999

The warrants issued in December 2014 were subject to down-round price protection until December 31, 2017. See Note 6 for further discussion.

NOTE 8 - FOREIGN CURRENCY CONTRACTS

The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company manages through the use of foreign currency forward contracts. These foreign currency contracts are not designated as hedging instruments; accordingly, changes in the fair value are recorded in current period earnings. These foreign currency contracts had a notional value of $4,340,928 at December 31, 2017 and their maturities range from January 2018 to June 2018.

The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract assets totaled $68,172 at December 31, 2017 and $166,629 at June 30, 2017. The Company recorded a loss on foreign exchange contracts of $61,560 and $249,728, which is reflected in cost of revenue, for the three months ended December 31, 2017 and 2016, respectively. The Company recorded a loss on foreign exchange contracts of $100,864 and $147,356, which is reflected in cost of revenue for the six months ended December 31, 2017 and 2016, respectively.

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NOTE 9 - COMMITMENTS AND CONTINGENCIES

Commitments

Pursuant to the terms of the Asset Purchase and Sale Agreement for the DuPont Pioneer Acquisition, as amended, if required third party consents were received prior to January 31, 2018 (and subject to the satisfaction of certain other conditions specified in the Asset Purchase and Sale Agreement), either the Company or DuPont Pioneer had the right to enter into (and require the other party to enter into) on February 28, 2018 (or such earlier date as the parties agree) a proposed form of asset purchase and sale agreement, as the same may be updated in accordance with the terms of the Asset Purchase and Sale Agreement, pursuant to which Company would acquire additional GMO germplasm varieties and other related assets from DuPont Pioneer for a purchase price of $7,000,000.

Although the third party has informed the Company and DuPont Pioneer that it intends to provide the Company with the necessary consents and agreements to enable completion of the transaction, the Company did not obtain final executed consents and agreements prior to January 31, 2018. The Company is continuing discussions with DuPont Pioneer and the third party to obtain final executed consents and agreements and to complete the acquisition of DuPont Pioneer's GMO alfalfa assets. However, DuPont Pioneer has informed the Company that it currently does not intend to extend the deadline to complete the transaction. As a result, the Company may never enter into the second asset purchase agreement or close the acquisition of DuPont Pioneer's GMO germplasm varieties and related assets, in which case the Company would not be obligated to pay DuPont Pioneer the $7,000,000 purchase price.

Unless and until the Company completes the transactions contemplated under the second asset purchase agreement with DuPont Pioneer, DuPont Pioneer may purchase certain GMO-traited varieties of alfalfa seed from third parties. In addition, if the Company does not complete the transactions contemplated under the second asset purchase agreement, its production agreement with DuPont Pioneer (relating to GMO-traited varieties) will terminate on February 28, 2018, DuPont Pioneer will be free to pursue alternative production arrangements for the GMO-traited varieties, and DuPont Pioneer's minimum purchase commitments to the Company under the distribution agreement will be materially reduced. Although the Company is pursuing discussions with DuPont Pioneer regarding the possibility of extending the production agreement, DuPont Pioneer has informed the Company that it currently does not intend to extend the term of the Production Agreement past February 28, 2018. The termination of the Company's production agreement with DuPont Pioneer or any material reduction in the compensation payable to the Company under the agreement will have a material adverse effect on the Company's results of operations starting with the Company's fiscal year 2019.

Contingencies

Based on information currently available, management is not aware of any other matters that would have a material adverse effect on the Company's financial condition, results of operations or cash flows.

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NOTE 10 - RELATED PARTY TRANSACTIONS

Glen D. Bornt, a member of the Company's Board of Directors until January 9, 2018, is the founder and President of Imperial Valley Milling Co. ("IVM"). He is IVM's majority shareholder and a member of its Board of Directors. Glen D. Bornt is also a majority shareholder of Kongal Seeds Pty. Ltd. ("Kongal"). IVM had a 15-year supply agreement with IVS, and this agreement was assigned by IVS to the Company when it purchased the assets of IVS in October 2012. IVM contracts with alfalfa seed growers in California's Imperial Valley and sells its growers' seed to the Company pursuant to a supply agreement. Under the terms of the supply agreement, IVM's entire certified and uncertified alfalfa seed production must be offered and sold to the Company, and the Company has the exclusive option to purchase all or any portion of IVM's seed production. The Company paid $1,997,256 to IVM during the six months ended December 31, 2017. Amounts due to IVM totaled $115,582 and $326,941 at December 31, 2017 and June 30, 2017, respectively. The Company paid $0 to Kongal during the six months ended December 31, 2017. Amounts due to Kongal totaled $1,582 and $4,753 at December 31, 2017 and June 30, 2017, respectively.

On July 19, 2017, the Company entered into a Securities Purchase Agreement with certain purchasers, including MFP Partners, L.P. ("MFP"), a stockholder of the Company, and certain entities related to Wynnefield Capital Management LLC (collectively, "Wynnefield"), pursuant to which MFP purchased approximately $3.7 million of shares of its common stock and Wynnefield purchased approximately $3.0 million of shares of its common stock. Each of MFP and Wynnefield is a beneficial owner of more than 5% of the Company's common stock. Alexander C. Matina, a member of the Company's Board, is Vice President, Investments of MFP.

On October 11, 2017, the Company entered into a Securities Purchase Agreement with Mark W. Wong, the Company's President and Chief Executive Officer, pursuant to which the Company sold and issued an aggregate of 75,000 shares of its Common Stock at a purchase price of $3.50 per share, for aggregate gross proceeds of $262,500.

On December 22, 2017, the Company completed the closing of its previously announced rights offering. At the closing, the Company sold and issued an aggregate of 2,594,923 shares of its Common Stock at a subscription price of $3.50 per share pursuant to the exercise of subscriptions and oversubscriptions in the rights offering from its existing stockholders. Pursuant to an Investment Agreement, dated October 3, 2017, between the Company and MFP, MFP agreed to purchase, at the subscription price, all of the shares not purchased in the Rights Offering (the "Backstop Commitment"). Accordingly, on December 22, 2017, the Company and MFP completed the closing of the Backstop Commitment, in which the Company sold and issued 905,077 shares of its Common Stock to MFP. Combined, the Company sold and issued an aggregate of 3,500,000 shares of its common stock for aggregate gross proceeds of $12.25 million.

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NOTE 11 - EQUITY-BASED COMPENSATION

2009 Equity Incentive Plan

In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan (as amended and/or restated from time to time, the "2009 Plan"). The plan authorized the grant and issuance of options, restricted shares and other equity compensation to the Company's directors, employees, officers and consultants, and those of the Company's subsidiaries and parent, if any. In October 2012 and December 2012, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,250,000 shares. In September 2013 and December 2013, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,700,000 shares. In September 2015 and December 2015, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 2,450,000 shares.

The term of incentive stock options granted under the 2009 Plan may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the 2009 Plan must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Stock options issued to non-employees are accounted for at their estimated fair value. The fair value of options granted to non-employees is re-measured as they vest. The Company amortizes stock-based compensation expense on a straight-line basis over the requisite service period.

The Company utilizes a Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of the Company's common stock to estimate the fair value of employee options grants.

Weighted average assumptions used in the Black-Scholes-Merton model are set forth below:

	December 31,
	2017	2016
Risk free rate	1.72% - 1.91%	1.2% - 1.9%
Dividend yield	0%	0%
Volatility	45.3% - 45.5%	39.2% - 51.6%
Average forfeiture assumptions	1.4%	2.4%

During the six months ended December 31, 2017, the Company granted 62,755 options to certain members of the executive management team and other employees at exercise prices ranging from $3.00 to $3.10. These options vest in either quarterly or annual periods over three years, and expire ten years from the date of grant.

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A summary of stock option activity for the six months ended December 31, 2017 and year ended June 30, 2017 is presented below:

				Weighted-
			Weighted -	Average
			Average	Remaining		Aggregate
	Number		Exercise Price	Contractual		Intrinsic
	Outstanding		Per Share	Life (Years)		Value
Outstanding at June 30, 2016	1,021,418	$	5.14	4.2		142,381
Granted	230,610		4.19	-		-
Exercised	(232,000)		4.20	-		-
Canceled/forfeited/expired	(29,500)		5.95	-		-
Outstanding at June 30, 2017	990,528		5.12	4.3		100,344
Granted	62,755		3.08	-		-
Exercised	-		-	-		-
Canceled/forfeited/expired	(190,000)		6.99	-		-
Outstanding at December 31, 2017	863,283		4.56	6.5		72,914
Options vested and exercisable at December 31, 2017	632,416		4.82	5.6		19,183
Options vested and expected to vest as of December 31, 2017	862,808	$	4.56	6.5	$	72,496

The weighted average grant date fair value of options granted and outstanding at December 31, 2017 was $1.58. At December 31, 2017, the Company had $302,942 of unrecognized stock compensation expense, net of estimated forfeitures, related to the options under the 2009 Plan, which will be recognized over the weighted average remaining service period of 2.23 years. The Company settles employee stock option exercises with newly issued shares of common stock.

During the year ended June 30, 2017, the Company issued 77,275 restricted stock units to its directors, certain members of the executive management team, and other employees. The restricted stock units have varying vesting periods ranging from immediate vesting to annual installments over a three-year period. The fair value of the awards totaled $374,530 and was based on the closing stock price on the date of grants.

During the six months ended December 31, 2017, the Company issued 38,114 restricted stock units to its certain members of the executive management team and other employees. The restricted stock units vest in either quarterly or annual periods and vest over three-years. The fair value of the awards totaled $116,486 and was based on the closing stock price on the date of grants.

The Company recorded $311,067 and $240,241 of stock-based compensation expense associated with grants of restricted stock units during the six months ended December 31, 2017 and 2016, respectively. A summary of activity related to non-vested restricted stock units is presented below:

Six Months Ended December 31, 2017
				Weighted -
	Number of		Weighted-	Average
	Nonvested		Average	Remaining
	Restricted		Grant Date	Contractual
	Stock Units		Fair Value	Life (Years)
Beginning nonvested restricted units outstanding	120,971	$	5.59	1.5
Granted	38,114		3.06	1.7
Vested	(90,066)		5.68	-
Forfeited	(3,680)		-	-
Ending nonvested restricted units outstanding	65,339	$	4.06	1.6

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At December 31, 2017, the Company had $220,169 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.6 years.

At December 31, 2017, there were 526,603 shares available under the 2009 Plan for future grants and awards.

Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the three months ended December 31, 2017 and 2016, totaled $193,571 and $296,235, respectively. Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the six months ended December 31, 2017 and 2016, totaled $451,033 and $578,659, respectively.

NOTE 12 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the six months ended December 31, 2017 and 2016, respectively.

		Six Months Ended
		December 31,
		2017		2016
Issuance of common stock upon conversion of principal and interest of convertible debentures	$	-	$	3,168,342

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in Part I, Item 1, "Financial Statements" of this Quarterly Report on Form 10-Q. In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements as referred to on page 2 of this Quarterly Report on Form 10-Q. Factors that could cause or contribute to these differences include those discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2017, particularly in Part I, Item 1A, "Risk Factors."

Executive Overview

Founded in 1980 and headquartered in Sacramento, California, we are a global agricultural company. Grounded in our historical expertise and what we believe is our present leading position in the breeding, production and sale of alfalfa seed, we continue to build towards our goal of being recognized as the world's preferred proprietary forage, grain and specialty crop seed company. In addition to our primary activities in alfalfa seed, we have recently expanded our product portfolio by adding hybrid sorghum and sunflower seed, which complement our alfalfa seed offerings by allowing us to leverage our infrastructure, research and development expertise and our distribution channels, as we begin to diversify into what we believe are higher margin opportunities. We also continue to conduct our stevia breeding program, having three patents granted and one additional patent application pending.

Following our initial public offering in fiscal year 2010, we expanded certain pre-existing business initiatives and added new ones, including:

• diversifying our production geographically by expanding from solely producing seed in the San Joaquin Valley of California to initially adding production capability in the Imperial Valley of California, then expanding into Australia (primarily South Australia) and, most recently, adding production in other western states and Canada;
• expanding from solely offering non-dormant varieties to now having a full range of both dormant and non-dormant varieties;
• expanding the depth and breadth of our research and development capabilities in order to develop new varieties of both dormant and non-dormant alfalfa seed with traits sought after by our existing and future customers;
• diversifying into complementary proprietary crops by acquiring the assets of a Queensland, Australia company specializing in breeding and licensing of hybrid sorghum and sunflower seed;
• expanding our distribution channels and customer base, initially through the acquisition of the customer list of a key international customer in the Middle East in July 2011, and thereafter, through certain strategic acquisitions;
• expanding our sales geographically both through the expansion of our product offerings to make available product needed in regions we historically did not cover and through an expansion of our sales and marketing efforts generally; and
• implementing a stevia breeding program to develop new stevia varieties that incorporate the most desirable characteristics of this all-natural, zero calorie sweetener.

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We have accomplished these expansion initiatives through a combination of organic growth and strategic acquisitions, foremost among them:

• the acquisition in July 2011 of certain intangible assets, including the customer information, related to the field seed and small grain business of Genetics International, Inc., which had previously operated in the Middle East and North Africa ("MENA") and which began our transition into selling directly to MENA distributors;
• the acquisition of Imperial Valley Seeds, Inc. ("IVS") in October 2012, which enabled us to expand production of non-GMO seed into California's Imperial Valley, thereby ensuring a non-GMO source of seed due to the prohibition on GMO crops in the Imperial Valley, as well as enabling us to diversify our production areas and distribution channels;
• the acquisition of a portfolio of dormant alfalfa seed germplasm in August 2012 to launch our entry into the dormant market;
• the acquisition of the leading local producer of non-dormant alfalfa seed in South Australia, Seed Genetics International Pty Ltd ("SGI") in April 2013, which greatly expanded our production capabilities and geographic diversity;
• the acquisition of the alfalfa production and research facility assets and conventional (non-GMO) alfalfa germplasm from DuPont Pioneer, a wholly-owned subsidiary of E.I. du Pont de Nemours and Company ("DuPont Pioneer") in December 2014, thereby substantially expanding upon our initial entrance into the dormant alfalfa seed market that began in 2012 and enabling us to greatly expand our production and research and product development capabilities; and
• the acquisition, in May 2016, of the assets and business of SV Genetics Pty Ltd ("SV Genetics"), a private Australian company specializing in the breeding and licensing of proprietary hybrid sorghum and sunflower seed germplasm, which represents our initial effort to diversify our product portfolio beyond alfalfa seed breeding and production and stevia R&D.

We believe our 2013 combination with SGI created the world's largest non-dormant alfalfa seed company and gave us the competitive advantages of year-round production in that market. With the completion of the acquisition of dormant alfalfa seed assets from DuPont Pioneer in December 2014, we believe we have become the largest alfalfa seed company worldwide (by volume), with industry-leading research and development, as well as production and distribution capabilities in both hemispheres and the ability to supply proprietary dormant and non-dormant alfalfa seed. Our operations span the world's alfalfa seed production regions, with operations in the San Joaquin and Imperial Valleys of California, five additional Western states, Australia and three provinces in Canada.

Our May 2016 acquisition of the hybrid sorghum and sunflower germplasm business and assets of SV Genetics signals management's commitment to our strategy of identifying opportunities to diversify our product lines and improve our gross margins.

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Components of Our Statements of Operations Data

Revenue and Cost of Revenue

Revenue

We derive most of our revenue from the sale of our proprietary alfalfa seed varieties. We expect that over the next several years, a substantial majority of our revenue will continue to be generated from the sale of alfalfa seed, although we are continually assessing other possible product offerings or means to increase revenue, including expanding into other, higher margin crops. In late fiscal year 2016, we began that expansion with the acquisition of the hybrid sorghum and sunflower business and assets of SV Genetics. Revenue from the newly-acquired SV Genetics germplasm will be primarily derived from the sale of sorghum and sunflower seed as well as royalty-based payments set forth in various licensing agreements.

Fiscal year 2016 was the first full fiscal year in which we had a full range of non-dormant and dormant alfalfa seed varieties. This is expected to enable us to significantly expand the geographic reach of our sales efforts. The mix of our product offerings will continue to change over time with the introduction of new alfalfa seed varieties resulting from our robust research and development efforts, including our potential expansion into genetically-modified varieties in future periods. Currently, we have a long-term distribution agreement with DuPont Pioneer, which we expect will be the source of a significant portion of our annual revenue through December 2024.

Our revenue will fluctuate depending on the timing of orders from our customers and distributors. Because some of our large customers and distributors order in bulk only one or two times per year, our product revenue may fluctuate significantly from period to period. However, some of this fluctuation is offset by having operations in both the northern and southern hemispheres.

Our stevia breeding program has yet to generate any meaningful revenue. However, management continues to evaluate this portion of our business and assess various means to monetize the results of our effort to breed new, better tasting stevia varieties. Such potential opportunities include possible licensing agreements and royalty-based agreements.

Cost of Revenue

Cost of revenue relates to sale of our seed varieties and consists of the cost of procuring seed, plant conditioning and packaging costs, direct labor and raw materials and overhead costs.

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Operating Expenses

Research and Development Expenses

Seed and stevia research and development expenses consist of costs incurred in the discovery, development, breeding and testing of new products incorporating the traits we have specifically selected. These expenses consist primarily of employee salaries and benefits, consultant services, land leased for field trials, chemicals and supplies and other external expenses. With the acquisition of SV Genetics in late fiscal 2016, similar costs are now being incurred as we continue the research and development efforts begun by SV Genetics in the development of new varieties of hybrid sorghum and sunflower seed germplasm. Because we have been in the alfalfa seed breeding business since our inception in 1980, we have expended far more resources in development of our proprietary alfalfa seed varieties throughout our history than on our stevia breeding program, which we commenced in fiscal year 2010.

In fiscal year 2013, we made the decision to shift the focus of our stevia program away from commercial production and towards the breeding of improved varieties of stevia. We have continued that effort, which has resulted in the granting by the USPTO of three patents covering stevia plant varieties SW 107, SW 201 and SW 129. Additionally, we have applied for patent protection with the USPTO for SW 227 for the fresh and dry leaf market.

Our research and development expenses increased significantly with the acquisition of the alfalfa research and development assets of DuPont Pioneer in December 2014. We also have expanded our genetics research both internally and in collaboration with third parties. In addition, we acquired additional research and development operations in connection with our May 2016 acquisition of SV Genetics that we expect will factor into an overall increase in R&D expense. Overall, we have been focused on reducing research and development expense, while balancing that objective against the recognition that continued advancement in product development is an important part of our strategic planning. We expect our research and development expenses will fluctuate from period to period as a result of the timing of various research and development projects.

Our internal research and development costs are expensed as incurred, while third party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or construed for research and development activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses consist primarily of employee costs, including salaries, employee benefits and share-based compensation, as well as professional service fees, insurance, marketing, travel and entertainment expense, public company expense and other overhead costs. We proactively take steps on an ongoing basis to control selling, general and administrative expense as much as is reasonably possible.

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Depreciation and Amortization

Most of the depreciation and amortization expense on our statement of operations consists of amortization expense. We amortize intangible assets, including those acquired from DuPont Pioneer in December 2014 and from SV Genetics in May 2016, using the straight-line method over the estimated useful life of the asset, consisting of periods of 10-30 years for technology/IP/germplasm, 20 years for customer relationships and trade names and 2-20 years for other intangible assets. Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset, consisting of periods of 5-28 years for buildings, 3-20 years for machinery and equipment and 3-5 years for vehicles.

Other Expense

Other expense consists primarily of foreign currency gains and losses, changes in the fair value of derivative liabilities related to our warrants, changes in the fair value of our contingent consideration obligations and interest expense in connection with amortization of debt discount. In addition, interest expense consists of interest costs related to outstanding borrowings on our credit facilities, including our current KeyBank revolving line of credit and on SGI's credit facilities in South Australia, our 8% senior secured convertible debentures that were issued in December 2014 which were fully paid off on March 1, 2017, our three-year secured promissory note issued in December 2014 in connection with the DuPont Pioneer acquisition which was paid off on December 1, 2017, and our newly issued secured promissory notes with Conterra.

Provision (Benefit) for Income Taxes

Our effective tax rate is based on income, statutory tax rates, differences in the deductibility of certain expenses and inclusion of certain income items between financial statement and tax return purposes, and tax planning opportunities available to us in the various jurisdictions in which we operate. Under U.S. GAAP, if we determine that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, we recognize the benefit. Tax regulations require certain items to be included in the tax return at different times than when those items are required to be recorded in the consolidated financial statements. As a result, our effective tax rate reflected in our consolidated financial statements is different from that reported in our tax returns. Some of these differences are permanent, such as meals and entertainment expenses that are not fully deductible on our tax return, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years for which we have already recorded the tax benefit in our consolidated statements of operations. In the fourth quarter of fiscal year 2017, we recorded a valuation allowance against all of our deferred tax assets. The full valuation allowance was recorded during the fiscal year 2017 as a result of changes to our operating results and future projections, resulting from a recent decline in export sales to Saudi Arabia. In addition, our available tax planning strategies are currently not expected to overcome the uncertainty of the Saudi Arabian market. As a result of these factors, we don't believe that it is more likely than not that our deferred tax assets will be realized.

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Results of Operations

Three Months Ended December 31, 2017 Compared to the Three Months Ended December 31, 2016

Revenue and Cost of Revenue

Revenue for three months ended December 31, 2017 was $20,532,796 compared to $24,225,744 for the three months ended December 31, 2016. The $3,692,948 decrease in revenue for the three months ended December 31, 2017 was primarily due to a decrease of sales to the Saudi Arabia markets of approximately $1.3 million. Regulatory uncertainty in Saudi Arabia surrounding water use restrictions for large forage producers caused customers in the region to defer purchases and/or reduce inventory carrying levels. The outlook for demand for our non-dormant varieties in Saudi Arabia over the next two to four years continues to be uncertain because of the potential for water use restrictions and further regulations from the Saudi Arabian government on water usage. If there is a significant decrease in demand from our customers in Saudi Arabia, we would experience a material decline in revenue and earnings in the absence of growth in other regions and other products.

Sales into international markets represented 23% and 30% of revenue during the three months ended December 31, 2017 and 2016, respectively. Domestic revenue accounted for 77% and 70% of our total revenue for the three months ended December 31, 2017 and 2016, respectively. The increase in domestic revenue as a percentage of total revenue is primarily attributed to timing differences in shipments to our largest customer.

We recorded sales of approximately $15.3 million from our distribution and production agreements with DuPont Pioneer during the three months ended December 31, 2017, which was a decrease of $0.8 million from the prior year amount of $16.1 million. We expect DuPont Pioneer to represent a significant portion of our domestic sales, as well as overall sales, for the foreseeable future.

The following table shows revenue from external sources by destination country:

		Three Months Ended December 31,
		2017			2016
United States	$	15,740,706	77%	$	16,858,325	70%
Mexico		1,664,618	8%		1,404,133	6%
Argentina		1,183,423	6%		1,677,035	7%
Libya		563,673	3%		-	0%
Saudi Arabia		513,000	2%		1,843,949	8%
Australia		438,468	2%		71,175	0%
South Africa		338,993	2%		634,768	2%
Sudan		-	0%		67,016	0%
Other		89,915	0%		1,669,343	7%
Total	$	20,532,796	100%	$	24,225,744	100%

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Cost of revenue of $15,860,629 for the three months ended December 31, 2017 was 77.2% of revenue, while the cost of revenue of $19,005,270 for the three months ended December 31, 2016 was 78.5% of revenue. Cost of revenue decreased on a dollar basis primarily due to the decrease in revenue as well as a reduction of product costs.

Total gross profit margin for the three months ended December 31, 2017 was 22.8% compared to 21.5% in the comparable period of the prior year. The increase in gross profit margins was primarily due to product sales mix during the current period where we had a higher concentration of sales, as a percentage of total revenue, to DuPont Pioneer which are higher margin sales. Additionally, the product costs of proprietary seed are lower in the current year due to more favorable production contracts and arrangements.

While there will continue to be quarterly fluctuations in gross profit margin based on product sales mix, we anticipate improved gross margins in fiscal 2018 as a result of a number of initiatives we are deploying.

Selling, General and Administrative Expenses

Selling, General and Administrative ("SG&A") expense for the three months ended December 31, 2017 totaled $2,446,955 compared to $2,592,059 for the three months ended December 31, 2016. The $145,104 decrease in SG&A expense versus the second quarter of the prior year was primarily due to cost reduction initiatives coupled with a decrease in stock based compensation of $102,664. As a percentage of revenue, SG&A expenses were 11.9% in the current quarter compared to 10.7% in the three months ended December 31, 2016.

Research and Development Expenses

Research and development expenses for the three months ended December 31, 2017 totaled $855,164 compared to $748,571 for the three months ended December 31, 2016. The $106,593 increase in research and development expense is driven by additional investment in our hybrid sorghum and sunflower programs. We expect our research and development spend for fiscal 2018 to total approximately $3.4 million.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended December 31, 2017 was $870,981 compared to $842,454 for the three months ended December 31, 2016. Included in the amount was amortization expense for intangible assets, which totaled $555,471 in the three months ended December 31, 2017 and $555,977 in the three months ended December 31, 2016. The $28,527 increase in depreciation and amortization expense over the comparable period of the prior year is primarily driven by additional depreciation expense associated with fixed asset additions.

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Foreign Currency Loss (Gain)

We incurred a foreign currency loss of $7,472 for the three months ended December 31, 2017 compared to a gain of $2,837 for the three months ended December 31, 2016. The foreign currency gains and losses are associated with SGI, our wholly-owned subsidiary in Australia.

Change in Derivative Warrant Liability

The derivative warrant liability was considered a level 3 fair value financial instrument and was measured at each reporting period until December 31, 2017 at which time the warrants were reclassified to equity due to the expiration of the down-round price protection provision. We recorded a non-cash change in derivative warrant liability loss of $341,199 in the three months ended December 31, 2017 compared to a gain of $959,200 in the three months ended December 31, 2016. The loss represents the increase in fair value of the outstanding warrants issued in December 2014.

Change in Contingent Consideration Obligations

The contingent consideration obligations are considered level 3 fair value financial instruments and will be measured at each reporting period. The $0 and $57,282 charges to non-cash change in contingent consideration obligations expense for the three months ended December 31, 2017 and 2016, respectively; represents the increase in the estimated fair value of the contingent consideration obligations during that respective period due to the decrease in the present value discount factor used to estimate the fair value of the contingent consideration obligations. The earn-out payment to DuPont Pioneer was finalized in the amount of $2,500,000 and this was added to the Pioneer Note in October 2017.

Interest Expense - Amortization of Debt Discount

Non-cash amortization of debt discount expense for the three months ended December 31, 2017 was $33,100 compared to $381,660 for the three months ended December 31, 2016. The expense in the current quarter represents the amortization of the debt issuance costs associated with our KeyBank working capital facility and our secured property and equipment notes with Conterra. The expense in the prior year represents the amortization of the debt discount, beneficial conversion feature and debt issuance costs associated with the convertible debentures issued December 31, 2014 and the debt issuance costs associated with our KeyBank working capital facility. As of March 1, 2017, the convertible debentures have been fully retired and accordingly, the amortization of debt discount associated with the convertible debentures is complete.

Interest Expense - Convertible Debt and Other

Interest expense during the three months ended December 31, 2017 totaled $383,894 compared to $295,042 for the three months ended December 31, 2016. Interest expense for the three months ended December 31, 2017 primarily consisted of interest incurred on the note payable issued to DuPont Pioneer as part of the purchase consideration for the DuPont Pioneer acquisition, the working capital credit facilities with KeyBank and NAB, and the new secured property and equipment loans entered into in November 2017. Interest expense for the three months ended December 31, 2016 primarily consisted of interest incurred on the convertible debentures issued on December 31, 2014, on the note payable issued to DuPont Pioneer as part of the purchase consideration for the DuPont Pioneer acquisition and the working capital credit facilities with KeyBank and NAB. The $88,852 increase in interest expense for the three months ended December 31, 2017 is primarily driven by $91,363 of interest on the new secured property and equipment loans.

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Provision (Benefit) for Income Taxes

Income tax expense totaled $148,702 for the three months ended December 31, 2017 compared to an income tax expense of $106,485 for the three months ended December 31, 2016. Our effective tax rate expense was (59.1%) for the three months ended December 31, 2017 compared to 8.4% for the three months ended December 31, 2016. The decrease in our effective tax rate for the three months ended December 31, 2017 is attributable to the full valuation allowance established against our deferred tax assets which was recorded during the fourth quarter of fiscal 2017. Due to the valuation allowance, we do not record the income tax expense or benefit related to substantially all of our current year operating results, as such results are generally incorporated in our net operating loss deferred tax asset position, which has a full valuation allowance against it. However, we did record tax expense related to certain other factors occurring throughout the year. For example, we have certain intangible assets with indefinite lives for financial reporting purposes. The write down of these assets cannot be assumed and thus, the deferred tax liability created by the difference in the basis in these assets for financial reporting and tax purposes cannot be used as a source of taxable income against our deferred tax assets. The increase in the deferred tax liability due the yearly tax amortization on these intangible assets is recorded as income tax expense. We also analyzed additional information on our tax return filings in the second quarter of fiscal 2018. To the extent that differences arise from the estimates of tax return filings, these differences are generally recorded in the quarter that they arise and are commonly referred to as provision to return adjustments. Such adjustments related to our Australian tax return filings also generated additional income tax expense for the quarter ended December 31, 2017.

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the "Tax Act"). The Tax Act reduced the corporate tax rate from the maximum federal statutory rate of 35% to 21%. The Tax Act states that the 21% corporate tax rate is effective for tax years beginning on or after January 1, 2018. However, existing tax law, which was not amended under the Tax Act, governs when a change in tax rate is effective. Existing tax law provides that if the taxable year includes the effective date of any rate change (unless the change is the first date of the taxable year), taxes should be calculated by applying a blended rate to the taxable income for the year.  Our blended federal rate is 27.6%. As a result of the new law, we have concluded that our deferred tax assets will need to be revalued. Our deferred tax assets represent a reduction in corporate taxes that are expected to be paid in the future. As a result of the Tax Act, we have estimated a reduction to the value of our deferred tax assets which is almost entirely offset by a reduction to our valuation allowance in the second quarter of the year ending June 30, 2018.  The net impact of the decrease to both the deferred tax assets and the valuation allowance will be a remeasuring of our net deferred tax liability associated with indefinite lived intangibles for which we cannot predict a reversal into taxable income. In conjunction with the tax law changes, the SEC staff issued Staff Accounting Bulletin No. 118 ("SAB 118") to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations)

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in reasonable detail to complete the accounting for certain income tax effects of the Tax Act.  We have recognized the provisional tax impacts related to deemed repatriated earnings, the potential impact of new section 162(m) rules on our deferred tax balances, and the revaluation of deferred tax assets and liabilities and included these amounts in our consolidated financial statements for the quarter ended December 31, 2017.   The ultimate impact, which is expected to be recorded by June 30, 2018, may differ from these provisional amounts, possibly materially, due to, among other things, additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued, and actions we may take as a result of the Tax Act, and the fact that we cannot definitively predict what our deferred tax balance will ultimately be as of June 30, 2018.  The Tax Act allows for one hundred percent expensing of the cost of qualified property acquired and placed in service after September 27, 2017 and before January 1, 2023.  We do not plan to take advantage of this provision for the near term and have the option of opting out of this provision. In addition, net operating losses incurred in tax years beginning after December 31, 2017 are only allowed to offset a taxpayer's taxable income by eighty percent, but those net operating losses are allowed to be carried forward indefinitely with no expiration.  Also as part of the Tax Act, our net interest expense deductions are limited to 30% of earnings before interest, taxes, depreciation, and amortization through 2021 and of earnings before interest and taxes thereafter. This provision also takes effect for tax years beginning after 2017 and isn't expected to have a material impact to our deferred tax asset position. The Tax Act also incorporates changes to certain international tax provisions.  There is a one-time transition tax on foreign income earned by subsidiaries at a rate of 15.5% for cash and cash equivalents and at a rate of 8% for the remainder of the foreign earnings. There is a provision for the current inclusion in US taxable income of global intangible low-tax income and also the imposition of a tax equal to its base erosion minimum tax amount.  The new laws incorporate a potential benefit for foreign derived intangible income, but the benefit only applies if the foreign derived sales and services income exceeds a calculated 'routine return' and if we have taxable income.  We do not currently anticipate that any of the foreign provisions will have an impact to our tax accounts.

Six Months Ended December 31, 2017 Compared to the Six Months Ended December 31, 2016

Revenue and Cost of Revenue

Revenue for six months ended December 31, 2017 was $31,244,512 compared to $36,475,317 for the six months ended December 31, 2016. The $5,230,805 decrease in revenue for the six months ended December 31, 2017 was primarily due to a decrease of sales to the Saudi Arabia markets of approximately $4.4 million. Regulatory uncertainty in Saudi Arabia surrounding water use restrictions for large forage producers caused customers in the region to defer purchases and/or reduce inventory carrying levels. The outlook for demand for our non-dormant varieties in Saudi Arabia over the next two to four years continues to be uncertain because of the potential for water use restrictions and further regulations from the Saudi Arabian government on water usage. If there is a significant decrease in demand from our customers in Saudi Arabia, we would experience a material decline in revenue and earnings in the absence of growth in other regions and other products. The decrease in revenue directed to the Saudi Arabia markets was partially offset by an increase in sales to the domestic market and Argentina.

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Sales into international markets represented 38% and 46% of revenue during the six months ended December 31, 2017 and 2016, respectively. Domestic revenue accounted for 62% and 54% of our total revenue for the six months ended December 31, 2017 and 2016, respectively. The increase in domestic revenue as a percentage of total revenue is directly attributable to reduced sales to customers in Saudi Arabia.

We recorded sales of approximately $18.1 million from our distribution and production agreements with DuPont Pioneer during the six months ended December 31, 2017, which was an increase of $0.5 million from the prior year amount of $17.6 million. We expect DuPont Pioneer to represent a significant portion of our domestic sales, as well as overall sales, for the foreseeable future.

The following table shows revenue from external sources by destination country:

		Six Months Ended December 31,
		2017			2016
United States	$	19,265,254	62%	$	19,782,389	54%
Mexico		4,380,626	14%		3,745,027	10%
Argentina		2,742,619	9%		2,565,004	7%
Libya		752,673	2%		-	0%
Saudi Arabia		844,908	3%		5,221,772	15%
Australia		557,998	2%		790,636	2%
South Africa		467,342	1%		636,870	2%
Sudan		447,500	1%		67,016	0%
Other		1,785,592	6%		3,666,603	10%
Total	$	31,244,512	100%	$	36,475,317	100%

Cost of revenue of $24,236,757 for the six months ended December 31, 2017 was 77.6% of revenue, while the cost of revenue of $29,311,580 for the six months ended December 31, 2016 was 80.4% of revenue. Cost of revenue decreased on a dollar basis primarily due to the decrease in revenue.

Total gross profit margin for the six months ended December 31, 2017 was 22.4% compared to 19.6% in the comparable period of the prior year. The increase in gross profit margins was primarily attributable to decreases in cost of goods sold compared to the prior year for S&W's non-dormant varieties. The product costs of proprietary seed are lower in the current year due to more favorable production contracts and arrangements.

While there will continue to be quarterly fluctuations in gross profit margin based on product sales mix, we anticipate improved gross margins in fiscal 2018 as a result of a number of initiatives we are deploying.

Selling, General and Administrative Expenses

Selling, General and Administrative ("SG&A") expense for the six months ended December 31, 2017 totaled $5,361,035 compared to $5,047,263 for the six months ended December 31, 2016. The $313,772 increase in SG&A expense versus the comparable period of the prior year was primarily due to an increase in sales personnel and related costs, as well as an increase in consulting fees of approximately $190,000. As a percentage of revenue, SG&A expenses were 17.2% in the six months ended December 31, 2017, compared to 13.8% in the six months ended December 31, 2016.

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Research and Development Expenses

Research and development expenses for the six months ended December 31, 2017 totaled $1,597,081 compared to $1,490,113 for the six months ended December 31, 2016. The $106,968 increase in research and development expense versus the second quarter of the prior year is driven by additional investment in our hybrid sorghum and sunflower programs. We expect our research and development spend for fiscal 2018 to total approximately $3.4 million.

Depreciation and Amortization

Depreciation and amortization expense for the six months ended December 31, 2017 was $1,759,233 compared to $1,677,151 for the six months ended December 31, 2016. Included in the amount was amortization expense for intangible assets, which totaled $1,128,392 for the six months ended December 31, 2017 and $1,111,954 for the six months ended December 31, 2016. The $82,082 increase in depreciation and amortization expense over the comparable period of the prior year is primarily driven by additional depreciation expense associated with fixed asset additions.

Foreign Currency Loss (Gain)

We incurred a foreign currency loss of $22,030 for the six months ended December 31, 2017 compared to a gain of $6,483 for the six months ended December 31, 2016. The foreign currency gains and losses are associated with SGI, our wholly-owned subsidiary in Australia.

Change in Derivative Warrant Liability

The derivative warrant liability was considered a level 3 fair value financial instrument and was measured at each reporting period until December 31, 2017 at which time the warrants were reclassified to equity due to the expirations of the down-round price protection provision. We recorded a non-cash change in derivative warrant liability gain of $431,300 in the six months ended December 31, 2017 compared to a loss of $168,500 in the six months ended December 31, 2016. The gain represents the decrease in fair value of the outstanding warrants issued in December 2014.

Change in Contingent Consideration Obligations

The contingent consideration obligations are considered level 3 fair value financial instruments and will be measured at each reporting period. The $0 and $164,363 charges to non-cash change in contingent consideration obligations expense for the six months ended December 31, 2017 and 2016, respectively; represents the increase in the estimated fair value of the contingent consideration obligations during that respective period due to the decrease in the present value discount factor used to estimate the fair value of the contingent consideration obligations. The earn-out payment to DuPont Pioneer was finalized in the amount of $2,500,000 and this was added to the Pioneer Note in October 2017.

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Loss on Equity Method Investment

Loss on equity method investment totaled $0 and $49,249 for the six months ended December 31, 2017 and 2016, respectively. This represents our 50% share of losses incurred by our joint corporation (S&W Semillas S.A.) in Argentina. The Company's carrying value in the equity method investee company has been reduced to zero, accordingly, no further losses will be recorded in the Company's consolidated financial statements related to this equity method investment.

Interest Expense - Amortization of Debt Discount

Non-cash amortization of debt discount expense for the six months ended December 31, 2017 was $67,099 compared to $981,118 for the six months ended December 31, 2016. The expense in the current period represents the amortization of the debt issuance costs associated with our KeyBank working capital facility and our secured property and equipment notes with Conterra. The expense in the prior year period represents the amortization of the debt discount, beneficial conversion feature and debt issuance costs associated with the convertible debentures issued December 31, 2014 and the debt issuance costs associated with our KeyBank working capital facility. As of March 1, 2017, the convertible debentures have been fully retired and accordingly, the amortization of debt discount associated with the convertible debentures is complete.

Interest Expense - Convertible Debt and Other

Interest expense during the six months ended December 31, 2017 totaled $731,623 compared to $647,584 for the six months ended December 31, 2016. Interest expense for the six months ended December 31, 2017 primarily consisted of interest incurred on the note payable issued to DuPont Pioneer as part of the purchase consideration for the DuPont Pioneer acquisition, the working capital credit facilities with KeyBank and NAB, and the new secured property and equipment loans entered into in November 2017. Interest expense for the six months ended December 31, 2016 primarily consisted of interest incurred on the convertible debentures issued on December 31, 2014, on the note payable issued to DuPont Pioneer as part of the purchase consideration for the DuPont Pioneer acquisition and the working capital credit facilities with KeyBank and NAB. The $84,039 increase in interest expense for the six months ended December 31, 2017 is primarily driven by $91,363 of interest on the secured property and equipment loans.

Provision (Benefit) for Income Taxes

Income tax expense totaled $200,123 for the six months ended December 31, 2017 compared to an income tax benefit of $996,923 for the six months ended December 31, 2016. Our effective tax rate expense was (9.9%) for the six months ended December 31, 2017 compared to 32.6% for the six months ended December 31, 2016. The decrease in our effective tax rate for the six months ended December 31, 2017 was primarily attributable to the fact that a valuation allowance against substantially all of our assets was recorded in the fourth quarter of the year ended June 30, 2017. For the six months ended December 31, 2016 we recorded a benefit associated with the tax losses incurred in that period. However, for the six months ended December 31, 2017, we have not recorded a benefit related to our losses due to the valuation allowance. The expense recorded for the six months ended December 31, 2017 is primarily attributed to additional deferred tax liabilities recorded during the year on indefinite lived intangible assets and the recording of additional tax expense on our prior year Australian tax return, which will be filed in fiscal 2018.

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Liquidity and Capital Resources

Our working capital and working capital requirements fluctuate from quarter to quarter depending on the phase of the growing and sales cycle that falls during a particular quarter. Our need for cash has historically been highest in the second and third fiscal quarters (October through March) because we historically have paid our North American contracted growers progressively, starting in the second fiscal quarter. In fiscal year 2017, we paid our North American growers approximately 50% in October 2016 and the balance was paid in February 2017. This payment cycle to our growers is expected to be similar in fiscal year 2018. SGI, our Australian-based subsidiary, has a production cycle that is counter-cyclical to North America; however, this also puts a greater demand on our working capital and working capital requirements during the second, third and fourth fiscal quarters based on timing of payments to growers in the second through fourth quarters.

Historically, due to the concentration of sales to certain distributors, which typically represented a significant percentage of seed sales, our month-to-month and quarter-to-quarter sales and associated cash receipts were highly dependent upon the timing of deliveries to and payments from these distributors, which varied significantly from year to year. The timing of collection of receivables from DuPont Pioneer, which is our largest customer, is defined in the distribution and production agreements with DuPont Pioneer and consists of three installment payments, the first on September 15th, the second on January 15th, and the third payment on February 15th. Our future revenue and cash collections pertaining to the production and distribution agreements with DuPont Pioneer are expected to provide us with greater predictability, as sales to DuPont Pioneer are expected to be primarily concentrated in our second, third and fourth fiscal quarters, and payments will be received in three installments over the September to mid-February time period.

We continuously monitor and evaluate our credit policies with all of our customers based on historical collection experience, current economic and market conditions and a review of the current status of the respective trade accounts receivable balance. Our principal working capital components include cash and cash equivalents, accounts receivable, inventory, prepaid expense and other current assets, accounts payable and our working capital lines of credit.

In addition to funding our business with cash from operations, we have historically relied upon occasional sales of our debt and equity securities and credit facilities from financial institutions, both in the United States and South Australia.

In recent periods, we have consummated the following equity and debt financings:

On December 31, 2014, in connection with the DuPont Pioneer Acquisition, we issued a secured promissory note (the "Pioneer Note") payable by us to DuPont Pioneer in the initial principal amount of $10,000,000 (issued at closing), and a potential earn-out payment (payable as an increase in the principal amount of the Pioneer Note) of up to $5,000,000 based on our sales under the distribution and production agreements entered into in connection with the DuPont Pioneer Acquisition, as well as other sales of products we consummate containing the acquired germplasm in the three-year period following the closing. The earn-out payment of $2,500,000 to DuPont Pioneer was finalized in October 2017 and this amount was added to the Pioneer Note in October 2017. The Pioneer Note accrued interest at 3% per annum. Interest was payable in three annual installments, in arrears, commencing on December 31, 2015. On December 1, 2017, we repaid the Pioneer Note. The repayment amount included the $2.5 million earn-out payment related to the Pioneer Acquisition that was added to the principal amount of the Pioneer Note in October 2017.

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On November 30, 2017, we entered into a secured note financing transaction (the "Loan Transaction") with Conterra Agricultural Capital, LLC ("Conterra") for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, we issued two secured promissory notes (the "Notes") to Conterra as follows:

• Secured Real Estate Note. We issued one Note in the principal amount of $10.4 million (the "Secured Real Estate Note") that is secured by a first priority security interest in the property, plant and fixtures (the "Real Estate Collateral") located at our Five Points, California and Nampa, Idaho production facilities and our Nampa, Idaho and Arlington, Wisconsin research facilities (the "Facilities"). The Secured Real Estate Note matures on November 30, 2020, which, subject to Conterra's approval, may be extended to November 30, 2022. The Secured Real Estate Note bears interest of 7.75% per annum. We have agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $515,711, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. We may prepay the Secured Real Estate Note, in whole or in part, at any time after we have paid a minimum of twelve months of interest on the Secured Real Estate Note.

• Secured Equipment Note. We issued a second Note in the principal amount of $2.1 million (the "Secured Equipment Note") that is secured by a first priority security interest in certain equipment not attached to real estate located at the Facilities. The Secured Equipment Note is also secured by the Real Estate Collateral. The Secured Equipment Note matures on November 30, 2019, which, subject to Conterra's approval, may be extended to November 30, 2020. The Secured Equipment Note bears interest at a rate of 9.5% per annum. We have agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $118,223, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. We may prepay the Secured Equipment Note, in whole or in part, at any time.

The Notes and related documents include customary representations and warranties in addition to customary affirmative and negative covenants (including financial covenants), and customary events of default that permit Conterra to accelerate our obligations under the Notes, including, among other things, that a default under one of the Notes would constitute a default under the other Note. On December 1, 2017, we used the proceeds from the Loan Transaction to repay the Pioneer Note.

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On September 22, 2015, we entered into an up to $20,000,000 aggregate principal amount credit and security agreement (the "KeyBank Credit Facility") with KeyBank. On October 4, 2016, we entered into an amendment to the KeyBank Credit Facility effective as of September 30, 2016, temporarily increasing the borrowing limit and certain other credit facility terms as follows: (i) temporarily increasing the borrowing capacity from $20.0 million to (a) up to $25.0 million between October 1, 2016 and November 30, 2016 and (b) up to $30.0 million from February 1, 2017 through March 31, 2017; (ii) temporarily allowing for a $4.0 million over-advance beyond the amounts otherwise available based on the borrowing base calculations, which will be available through February 28, 2017; and (iii) temporarily expanding the borrowing base by reducing the reserves that KeyBank may establish with respect to grower payables to 75% between August 31, 2016 and February 28, 2017. On March 13, 2017, we entered into a Third Amendment Agreement (the "Third Amendment") with respect to the KeyBank Credit Facility. The purpose of the Third Amendment was to provide certain temporary changes to the terms of the KeyBank Credit Facility, including: (i) further extending the temporary period during which we may borrow, repay and reborrow up to $30.0 million in the aggregate under the credit facility until April 21, 2017; and (ii) retroactively and temporarily allowing for over-advances, beyond amounts otherwise available based on the borrowing base calculations under the Credit Facility: (a) of up to $3.5 million during the period from March 8, 2017 through March 10, 2017, (b) of up to $5.0 million during the period from March 11, 2017 through March 17, 2017, (c) of up to $6.0 million during the period from March 18, 2017 through March 24, 2017, (d) of up to $7.0 million during the period from March 25, 2017 through March 31, 2017 and (e) of up to $8.5 million during the period from April 1, 2017 through as late as April 20, 2017. On September 13, 2017, we entered into a Fourth Amendment Agreement (the "Fourth Amendment") with respect to the KeyBank Credit Facility. Pursuant to the Fourth Amendment, we extended the maturity date of the Credit Facility to September 12, 2019 and increased the aggregate principal amount that we may borrow, repay and reborrow, up to $35.0 million in the aggregate, subject to a requirement that we maintain a reduced loan balance of (i) not more than $20.0 million for at least 30 consecutive days over the prior twelve months (measured each quarter on a trailing 12 month basis) and (ii) not more than $25.0 million for at least 60 consecutive days over the prior twelve months (measured each quarter on a trailing 12 month basis).

Key provisions of the KeyBank Credit Facility, as amended, include:

All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the KeyBank Credit Facility, will be payable in full on September 12, 2019.

The KeyBank Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable and 90% of eligible foreign accounts receivable plus up to the lesser of 65% of the cost eligible inventory or 90% of the net orderly liquidation value, subject to lender reserves.

Loans may be based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.2% per annum) (both as defined in the September 22, 2015 credit and security agreement (the "Credit Agreement")), generally at the Company's option. In the event of a default, at the option of KeyBank, the interest rate on all obligations owing will increase by 3% per annum over the rate otherwise applicable.

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Subject to certain exceptions, the KeyBank Credit Facility is secured by a first priority perfected security interest in all our now owned and after acquired tangible and intangible assets and our domestic subsidiaries, which have guaranteed our obligations under the KeyBank Credit Facility. The KeyBank Credit Facility is further secured by a lien on, and a pledge of, 65% of the stock of our wholly-owned subsidiary, S&W Australia Pty Ltd. With respect to its security interest and/or lien, KeyBank has entered into an Intercreditor Agreement with Hudson Bay Fund LP (as agent for the holders of the senior secured debentures issued by us on December 31, 2014) and DuPont Pioneer.

At December 31, 2017, we were in compliance with all KeyBank debt covenants.

SGI finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility with National Australia Bank Ltd ("NAB"). The current facility, referred to as the 2016 NAB Facilities, was amended as of March 30, 2017 and expires on March 30, 2019. As of December 31, 2017, AUD $7,837,767 (USD $6,115,026) was outstanding under the 2016 NAB Facilities.

The 2016 NAB Facilities, as currently in effect, comprises two distinct facility lines: (i) an overdraft facility (the "Overdraft Facility"), having a credit limit of AUD $980,000 (USD $764,596 at December 31, 2017) and a borrowing base facility (the "Borrowing Base Facility"), having a credit limit of AUD $12,000,000 (USD $9,362,400 at December 31, 2017).

The Borrowing Base Facility permits SGI to borrow funds for periods of up to 180 days, at SGI's discretion, provided that the term is consistent with its trading terms. Interest for each drawdown is set at the time of the drawdown as follows: (i) for Australian dollar drawings, based on the Australian Trade Refinance Rate plus 1.5% per annum and (ii) for foreign currency drawings, based on the British Bankers' Association Interest Settlement Rate for the relevant foreign currency for the relevant period, or if such rate is not available, the rate reasonably determined by NAB to be the appropriate equivalent rate, plus 1.5% per annum. As of December 31, 2017, the Borrowing Base Facility accrued interest on Australian dollar drawings at approximately 5.07% calculated daily. The Borrowing Base Facility is secured by a lien on all the present and future rights, property and undertakings of SGI, the mortgage on SGI's Keith, South Australia property and the Company's corporate guarantee (up to a maximum of AUD $15,000,000).

The Overdraft Facility permits SGI to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of December 31, 2017, the Overdraft Facility accrued interest at approximately 6.77% calculated daily.

For both the Overdraft Facility and the Borrowing Base Facility, interest is payable each month in arrears. In the event of a default, as defined in the NAB Facility Agreement, the principal balance due under the facilities will thereafter bear interest at an increased rate per annum above the interest rate that would otherwise have been in effect from time to time under the terms of each facility (i.e., the interest rate increases by 4.5% per annum under the Borrowing Base Facility and the Overdraft Facility rate increases to 13.92% per annum upon the occurrence of an event of default).

Both facilities constituting the 2016 NAB Facilities are secured by a fixed and floating lien over all the present and future rights, property and undertakings of SGI and are guaranteed by the Company as noted above. The 2016 NAB Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the NAB facility agreements. SGI was in compliance with all NAB debt covenants at December 31, 2017.

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In January 2015, NAB and SGI entered into a new business markets - flexible rate loan (the "Keith Building Loan") in the amount of AUD $650,000 (USD $507,130 at December 31, 2017). Since entering into the Keith Building Loan, the limit has been changed on three occasions, with the current limit being AUD $675,000 (USD $526,635 at December 31, 2017), and a separate machinery and equipment facility (the "Keith Machinery and Equipment Facility") has been added with the limit being changed on two occasions, the current limit being AUD $702,779 (USD $548,308) at December 31, 2017. At December 31, 2017, the principal balance on the Keith Building Loan was AUD $575,000 (USD $448,615) with unused availability of AUD $100,000 (USD $78,021). At December 31, 2017, the principal balance on the Keith Machinery and Equipment Facility was AUD $674,132 (USD $525,957) with no unused availability. In February 2016, NAB and SGI also entered into a master asset finance facility (the "Master Assets Facility"). At December 31, 2017, the principal balance on the Master Assets Facility was AUD $304,493 (USD $237,566) with unused availability of AUD $445,507 (USD $347,585). The Master Asset Facility has various maturity dates through 2021 and have interest rates ranging from 4.79% to 5.31%.

The Keith Building Loan and Keith Machinery and Equipment Facility are used for the construction of a building on SGI's Keith, South Australia property, purchase of adjoining land and for the machinery and equipment for use in the operations of the building. The Keith Building Loan matures on November 30, 2024. The interest rate on the Keith Building Loan varies from pricing period to pricing period (each such period approximately 30 days), based on the weighted average of a specified basket of interest rates (6.11% as of December 31, 2017). Interest is payable each month in arrears. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. The Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the facility agreement. They are secured by a lien on all the present and future rights, property and undertakings of SGI, the Company's corporate guarantee and a mortgage on SGI's Keith, South Australia property.

On July 19, 2017, we entered into a Securities Purchase Agreement with certain purchasers, pursuant to which we sold and issued an aggregate of 2,685,000 shares of our Common Stock at a purchase price of $4.00 per share, for aggregate gross proceeds of $10.74 million.

On October 11, 2017, we entered into a Securities Purchase Agreement with Mark W. Wong, our President and Chief Executive Officer, pursuant to which we sold and issued an aggregate of 75,000 shares of our Common Stock at a purchase price of $3.50 per share, for aggregate gross proceeds of $262,500.

On December 22, 2017, we completed the closing of our rights offering of 3,500,000 shares of our Common Stock. At the closing, we sold and issued an aggregate of 2,594,923 shares of our Common Stock at a subscription price of $3.50 per share (the "Subscription Price"). Pursuant to a backstop commitment with MFP Partners, L.P. ("MFP"), concurrently with the closing of rights offering, we sold and issued the remaining 905,077 shares of our Common Stock not purchased in the rights offering to MFP at the subscription price of $3.50 per share. Combined, we sold and issued an aggregate of 3,500,000 shares of our common stock for aggregate gross proceeds of $12.25 million.

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Summary of Cash Flows

The following table shows a summary of our cash flows for the six months ended December 31, 2017 and 2016:

		Six Months Ended
		December 31,
		2017		2016
Cash flows from operating activities	$	(16,669,045)	$	(5,985,615)
Cash flows from investing activities		(768,845)		(1,382,784)
Cash flows from financing activities		22,072,723		2,664,379
Effect of exchange rate changes on cash		74,860		(92,185)
Net increase (decrease) in cash and cash equivalents		4,709,693		(4,796,205)
Cash and cash equivalents, beginning of period		745,001		6,904,500
Cash and cash equivalents, end of period	$	5,454,694	$	2,108,295

Operating Activities

For the six months ended December 31, 2017, operating activities used $16,669,045 in cash. Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows used $471,624 in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows used $16,197,421 in cash. The decrease in cash from changes in operating assets and liabilities was primarily driven by increases in inventory of $38,850,545 due to timing of the US harvest, partially offset by a corresponding increase in accounts payable of $25,606,471.

For the six months ended December 31, 2016, operating activities used $5,985,615 in cash. Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows provided $760,689 in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows used $6,746,304 in cash. The decrease in cash from changes in operating assets and liabilities was primarily driven by an increase in inventories of $20,836,483 partially offset by an increase in accounts payable (including related parties) of $13,560,771 and a decrease in accounts receivable of $1,820,501.

Investing Activities

Investing activities during the six months ended December 31, 2017 used $768,845 in cash. These activities consisted primarily of additions to a build out of a new research and development facility in Nampa, Idaho.

Investing activities during the six months ended December 31, 2016 used $1,382,784 in cash. These activities consisted primarily of additions to a build out of a new research and development facility in Nampa, Idaho and investment in internal use software.

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Financing Activities

Financing activities during the six months ended December 31, 2017 provided $22,072,723 in cash. We completed two separate private placements of common stock during the six months ended December 31, 2017 which raised net proceeds of $10.7 million in cash. In December 2017, we also completed the closing of our rights offering and backstop commitment with MFP. Pursuant to the rights offering and backstop commitment with MFP, we sold and issued an aggregate of 3,500,000 shares of our common stock in December 2017 for aggregate net proceeds of $11.8 million. On November 30, 2017, we entered into a secured note financing transaction for $12.5 million in gross proceeds. The proceeds from the secured note financing were used to repay the Pioneer Note. The repayment amount included the $2.5 million earn-out payment related to the Pioneer Acquisition that was added to the principal amount of the Pioneer Note in October 2017.

Financing activities during the six months ended December 31, 2016 provided $2,664,379 in cash. We had net borrowings of $5.6 million on our lines of credit and made $3.4 million of redemptions on our convertible debentures. We also generated $602,083 in net proceeds from the exercise of stock options during the six months ended December 31, 2016.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations, including our revenue and income from continuing operations. However, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Off Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the three and six months ended December 31, 2017.

Capital Resources and Requirements

Our future liquidity and capital requirements will be influenced by numerous factors, including:

• the extent and duration of future operating income;
• the level and timing of future sales and expenditures;
• working capital required to support our growth;
• investment capital for plant and equipment;
• our sales and marketing programs;
• investment capital for potential acquisitions;
• our ability to renew and/or refinance our debt on acceptable terms;
• competition; and
• market developments.

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Critical Accounting Policies

The accounting policies and the use of accounting estimates are set forth in the footnotes to our consolidated financial statements.

In preparing our financial statements, we must select and apply various accounting policies. Our most significant policies are described in Note 2 - Summary of Significant Accounting Policies of the footnotes to the consolidated financial statements. In order to apply our accounting policies, we often need to make estimates based on judgments about future events. In making such estimates, we rely on historical experience, market and other conditions, and on assumptions that we believe to be reasonable. However, the estimation process is by its nature uncertain given that estimates depend on events over which we may not have control. If market and other conditions change from those that we anticipate, our results of operations, financial condition and changes in financial condition may be materially affected. In addition, if our assumptions change, we may need to revise our estimates, or to take other corrective actions, either of which may also have a material effect on our results of operations, financial condition or changes in financial condition. Members of our senior management have discussed the development and selection of our critical accounting estimates, and our disclosure regarding them, with the audit committee of our board of directors, and do so on a regular basis.

We believe that the following estimates have a higher degree of inherent uncertainty and require our most significant judgments. In addition, had we used estimates different from any of these, our results of operations, financial condition or changes in financial condition for the current period could have been materially different from those presented.

Intangible Assets

All amortizable intangible assets are assessed for impairment whenever events indicate a possible loss. Such an assessment involves estimating undiscounted cash flows over the remaining useful life of the intangible. If the review indicates that undiscounted cash flows are less than the recorded value of the intangible asset, the carrying amount of the intangible is reduced by the estimated cash-flow shortfall on a discounted basis, and a corresponding loss is charged to the consolidated statement of operations. Significant changes in key assumptions about the business, market conditions and prospects for which the intangible asset is currently utilized or expected to be utilized could result in an impairment charge.

Stock-Based Compensation

We account for stock-based compensation in accordance with FASB Accounting Standards Codification Topic 718 Stock Compensation, which establishes accounting for equity instruments exchanged for employee services. Under such provisions, stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense, under the straight-line method, over the employee's requisite service period (generally the vesting period of the equity grant).

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We account for equity instruments, including stock options issued to non-employees, in accordance with authoritative guidance for equity-based payments to non-employees (FASB ASC 505-50). Stock options issued to non-employees are accounted for at their estimated fair value. The fair value of options granted to non-employees is re-measured as they vest.

We utilize the Black-Scholes-Merton option pricing model to estimate the fair value of options granted under share-based compensation plans. The Black-Scholes-Merton model requires us to estimate a variety of factors including, but not limited to, the expected term of the award, stock price volatility, dividend rate, risk-free interest rate. The input factors to use in the valuation model are based on subjective future expectations combined with management judgment. The expected term used represents the weighted-average period that the stock options are expected to be outstanding. We have used the historical volatility for our stock for the expected volatility assumption required in the model, as it is more representative of future stock price trends. We use a risk-free interest rate that is based on the implied yield available on U.S. Treasury issued with an equivalent remaining term at the time of grant. We have not paid dividends in the past and currently do not plan to pay any dividends in the foreseeable future, and as such, dividend yield is assumed to be zero for the purposes of valuing the stock options granted. We evaluate the assumptions used to value stock awards on a quarterly basis. If factors change, and we employ different assumptions, share-based compensation expense may differ significantly from what we have recorded in the past. When there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase or cancel any remaining unearned share-based compensation expense. To the extent that we grant additional equity securities to employees, our share-based compensation expense will be increased by the additional unearned compensation resulting from those additional grants.

Income Taxes

We regularly assess the likelihood that deferred tax assets will be recovered from future taxable income. To the extent management believes that it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is established. When a valuation allowance is established or increased, an income tax charge is included in the consolidated financial statements and net deferred tax assets are adjusted accordingly. Changes in tax laws, statutory tax rates and estimates of our future taxable income levels could result in actual realization of the deferred tax assets being materially different from the amounts provided for in the consolidated financial statements. If the actual recovery amount of the deferred tax asset is less than anticipated, we would be required to write-off the remaining deferred tax asset and increase the tax provision, resulting in a reduction of earnings and stockholders' equity.

Inventories

All inventories are accounted for on a lower of cost or market basis. Inventories consist of raw materials and finished goods as well as in the ground crop inventories. Depending on market conditions, the actual amount received on sale could differ from our estimated value of inventory. In order to determine the value of inventory at the balance sheet date, we evaluate a number of factors to determine the adequacy of provisions for inventory. The factors include the age of inventory, the amount of inventory held by type, future demand for products and the expected future selling price we expect to realize by selling the inventory. Our estimates are judgmental in nature and are made at a point in time, using available information, expected business plans and expected market conditions. We perform a review of our inventory by product line on a quarterly basis.

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Our subsidiary, SGI, does not fix the final price for seed payable to its growers until the completion of a given year's sales cycle pursuant to its standard contract production agreement. We record an estimated unit price accordingly, inventory, cost of revenue and gross profits are based upon management's best estimate of the final purchase price to our SGI growers. To the extent the estimated purchase price varies from the final purchase price for seed, the adjustment to actual could materially impact the results in the period when the difference between estimates and actuals are identified. If the actual purchase price is in excess of our estimated purchase price, this would negatively impact our financial results including a reduction in gross profits and earnings.

Allowance for Doubtful Accounts

We regularly assess the collectability of receivables and provide an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer's trade accounts receivable. Our estimates are judgmental in nature and are made at a point in time. Management believes the allowance for doubtful accounts is appropriate to cover anticipated losses in our accounts receivable under current conditions; however, unexpected, significant deterioration in any of the factors mentioned above or in general economic conditions could materially change these expectations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company and therefore, we are not required to provide information required by this item of Form 10-Q.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2017 (the "Evaluation Date"). The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of December 31, 2017, our Principal Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

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Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d- 15(f) under the Exchange Act) or in other factors that occurred during the period of our evaluation that have significantly affected, or are reasonably likely to significantly affect, our internal control over financial reporting.

Part II

OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

Our business and results of operations are subject to a number of risks and uncertainties. While there have been no material changes to the risk factors previously disclosed under the heading "Risk Factors" in our Annual Report, which was filed with the SEC on September 20, 2017, you should carefully consider the risk factors described therein. The occurrence of any of the risks described in our Annual Report or herein could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report on Form 10-Q and those we may make from time to time.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibit No.	Description
2.1	Fourth Amendment to Asset Purchase and Sale Agreement between the Registrant and Pioneer Hi-Bred International, Inc., dated December 4, 2017.
3.1(1)	Registrant's Articles of Incorporation.
3.2(2)	Registrant's Second Amended and Restated Bylaws.
4.1	Reference is made to Exhibits 3.1 and 3.2.
4.2(3)	Form of Common Stock Certificate.
4.3(4)	Form of Common Stock Purchase Warrant.
10.1(5)	Investment Agreement, by and between the Registrant and MFP Partners, L.P., dated October 3, 2017.
10.2(6)	Securities Purchase Agreement by and between the Registrant and Mark W. Wong, dated October 11, 2017.
10.3(6)	Registration Rights Agreement by and between the Registrant and Mark W. Wong, dated October 11, 2017.
10.5	Secured Promissory Notes issued by the Registrant in favor of Conterra Agricultural Capital, LLC, dated November 30, 2017 and related documents.
10.6	Third Amendment to Contract Alfalfa Production Services Agreement between the Registrant and Pioneer Hi-Bred International, Inc., dated December 21, 2017.
10.7	First Amendment to Research Agreement between the Registrant and Pioneer Hi-Bred International, Inc., dated December 21, 2017.
10.8(7)	Registration Rights Agreement by and between the Registrant and MFP Partners, L.P., dated December 22, 2017.
31.1	Certification of Chief Executive Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

59

32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

_________

(1)   Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on December 19, 2011.
(2)   Incorporated by reference to the Registrants' Current Report on Form 8-K, filed on December 16, 2015.
(3)   Incorporated by reference to the Registrant's Registration Statement on Form S-1 (File No. 333-164588), filed on April 23, 2010.
(4)   Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on December 31, 2014.
(5)   Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on October 4, 2017.
(6)   Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on October 12, 2017.
(7)   Incorporated by reference to the Registrant's Registration Statement on Form S-3 (File No. 333-222916), filed on February 7, 2018.

60

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 8th day of February, 2018.

S&W SEED COMPANY 

By:      /s/ Matthew K. Szot          

          Matthew K. Szot

          Executive Vice President of Finance and Administration and Chief Financial Officer
           (duly authorized on behalf of the registrant and
           principal financial and accounting officer)

61

EX-2.1

Exhibit 2.1

CONFIDENTIAL

FOURTH AMENDMENT TO THE ASSET PURCHASE AND SALE AGREEMENT

This Fourth Amendment to the Asset Purchase and Sale Agreement (this "Amendment") is made this 4^th day of December 2017, by and between Pioneer Hi-Bred International, Inc., an Iowa corporation ("Seller"), and S&W Seed Company, a Nevada corporation ("Buyer"). Buyer and Seller are collectively referred to herein as the "Parties" and each individually as a "Party".

WHEREAS, the Parties entered into that certain Asset Purchase and Sale Agreement dated December 19, 2014 (as thereafter amended, the "APSA");

WHEREAS, pursuant to the APSA and that certain Promissory Note dated December 31, 2014, Buyer agreed to pay to Seller the principal amount of Ten Million United States Dollars, including unpaid interest due thereon, together with the Earn-Out Payment, on or before December 31, 2017;

WHEREAS, Seller has paid to Buyer the entire balance of the principal and interest due under such Promissory Note, including the Earn-Out Payment;

WHEREAS, pursuant to Section 5.19 of the APSA, and subject to the other terms and conditions set forth therein, the parties agreed that if the Second APSA Consents and the Second APSA Agreements have been obtained by November 30, 2017, then either Seller or Buyer may elect to execute and deliver (and to cause the other party to execute and deliver), the Second APSA on the Second APSA Closing Date;

WHEREAS, in order to provide the Parties with additional time to obtain such Second APSA Consents and the Second APSA Agreements, in all events in accordance with the terms and subject to the conditions set forth in the APSA, the Parties now wish to amend the APSA to extend the date on which such Second APSA Consents and Second APSA Agreements may be obtained and, if applicable, the potential date of the Second APSA Closing Date, as provided in this Amendment.

NOW, THEREFORE, for and in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the Parties hereby agree as follows:

1. As used in this Amendment, capitalized terms not defined herein shall have the meanings ascribed to them in the APSA.

2. Section 5.19 (inclusive of all subsections thereof) of the APSA shall be amended by deleting the references therein to November 30, 2017 and inserting in lieu thereof "January 31, 2018".

3. Section 5.19 (inclusive of all subsections thereof) of the APSA shall be amended by deleting the references therein to December 29, 2017 and inserting in lieu thereof "February 28, 2018".

4. Buyer hereby represents and warrants to Seller that all amounts due and payable by Buyer or its Affiliates to the Term Loan Lenders pursuant to the Term Loan Agreements, including the Term Loan Debt, as such terms are defined in the Intercreditor and Subordination Agreement dated September 22, 2015 by and between KeyBank National Association, Hudson Bay Fund LP, in its capacity as agent, and Seller, have been paid and satisfied in full and irrevocably discharged, terminated and released.

5. This Amendment shall be effective as of the date first written above.

6. In case of any inconsistencies between the terms and conditions contained in this Amendment and the terms and conditions contained in the APSA, the terms and conditions of this Amendment shall control.

7. Except as set forth in this Amendment, (a) all provisions of the APSA shall remain unmodified and in full force and effect and (b) nothing contained in this Amendment shall amend, modify or otherwise affect the APSA or any Party's rights or obligations contained therein.

8. This Amendment shall be governed by and interpreted in accordance with the substantive laws of the State of Delaware, without regard to its conflicts of laws principles. Any controversy or claim arising out of or relating to this Amendment shall be handled in accordance with Section 10.3 of the APSA.

9. This Amendment (along with the APSA and the other Transaction Documents) supersedes all prior agreements between the Parties with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the Parties with respect to its subject matter.

10. All of the terms and provisions of this Amendment shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

11. This Amendment may be executed in any number of counterparts (including via facsimile or portable document format (PDF)), each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument.

[Signature Page Follows]

2.

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the date first above written.

SELLER:
PIONEER HI-BRED INTERNATIONAL, INC.

By: /s/ Tim Johnson
Name: Tim Johnson
Title: VP and Treasurer

BUYER:
S&W SEED COMPANY

By: /s/ Matthew Szot
Name: Matthew Szot
Title: EVP and Chief Financial Officer

EX-10.5

Exhibit 10.5

NOTE

Loan # R1036

November 30, 2017
[Date] Sacramento,
[City] CA
[State]

Agricultural Land and Seed Processing Facilities, Canyon County, ID, Fresno County, CA and Columbia County, WI
[Property Address]

1. BORROWER'S PROMISE TO PAY

In return for a loan that Borrower has received, Borrower promises to pay U.S. $10,400,000.00 (this amount is called "Principal"), plus interest, to the order of the Lender. The Lender is Conterra Agricultural Capital, LLC. Borrower will make all payments under this Note in the form of cash, check or money order.

Borrower understands that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is also called the "Lender."

2. INTEREST

Prior to default, interest will be charged on unpaid principal until the full amount of Principal has been paid. Borrower will pay interest at a yearly rate of 7.750%.

After default, interest will be charged on unpaid principal at the interest rate stated in Section 8 of this Note.

3. SCHEDULED PAYMENTS
1. Time and Amount of Payments

1 interest payment on January 1, 2018, with interest calculated from the date of closing on the unpaid principal balance at 7.750% per annum; 5 consecutive semi-annual principal and interest payments of $515,710.54 each, beginning July 1, 2018, and the final payment of $10,107,215.72 on November 30, 2020, which is called the "Maturity Date." In the event Borrower elects the Option to Extend pursuant to Section 4 of this Note, and Lender approves of such extension pursuant to Section 4 of this Note, Borrower shall make 4 additional consecutive semi-annual principal and interest payments of $515,710.54 each, beginning January 1, 2021, and a final payment of $9,510,811.17 on November 30, 2022.

2. Place of Payments

Borrower will make payments at 7755 Office Plaza Dr. North, Suite 195, West Des Moines, IA 50266 or at a different place if required by Lender.

4. OPTION TO EXTEND

Provided that no default or event of default is then existing under this Note or under the Security Instrument, as hereinafter defined, Borrower shall have, subject to Lender's approval, the option to extend the Maturity Date of the Note to November 30, 2022. The option to extend set forth herein shall be a single option to extend, subject to Lender's sole approval, exercisable by Borrower prior the original Maturity Date under this Note.

5. INTEREST CALCULATION

Interest on this Note is computed on a 30/360 simple interest basis; that is, with the exception of odd days in the first payment period, monthly interest is calculated by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by a month of 30 days. Interest for the odd days is calculated on the basis of the actual days to the next full month and a 360-day year. Unless required by applicable law, payments will be applied first to interest, second to principal, third to advances under the Security Instrument, and finally to late charges.

6. PREPAYMENTS

1 year lockout: Upon payment of 12 months interest, as calculated from the funding date of this Note, Borrower may prepay all or any portion of the principal of this Note. Concurrently with any permitted prepayment of the unpaid principal balance of this Note, Borrower shall pay any unpaid interest accrued on such principal amount from the date to which interest was last paid to the next installment payment date.

MULTISTATE FIXED RATE NOTE - Open Prepayment -- Farmer Mac
UNIFORM INSTRUMENT Form 6001

1

7. BORROWER'S FAILURE TO PAY AS REQUIRED
1. Late Charge for Overdue Payments

If any installment of principal or interest is not received by the Lender by the end of the 10th calendar day after the date it is due, a late fee shall be payable on such defaulted payment at a rate which is equal to 5% per annum above the current rate of interest under this note, subject to a minimum interest charge of 5% of such defaulted payment.

2. Default

If Borrower does not pay the full amount of each installment within 10 calendar days of the date each installment is due, Borrower will be in default.

3. Notice of Default

If Borrower is in default and if allowed by applicable law, Lender may send Borrower a written notice telling Borrower that if Borrower does not pay the overdue amount by a certain date (in the case of a payment default) or cure the default within 30 days of Borrower's receipt of notice of default (in the case of any non-payment default), then Lender may require Borrower to pay immediately the full amount of Principal which has not been paid and all the interest that Borrower owes on that amount.

4. No Waiver By Lender

Even if, at a time when Borrower is in default, Lender does not require Borrower to pay immediately in full as described above, Lender will still have the right to do so if Borrower is in default at a later time.

5. Payment of Lender's Costs and Expenses

If Lender has required Borrower to pay immediately in full as described above, Lender will have the right to be paid back by Borrower for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. If allowed by applicable law those expenses include, for example, reasonable attorneys' fees.

8. INTEREST AFTER DEFAULT

Upon default, including failure to pay upon final maturity, at Lender's option, Lender may add any unpaid interest to principal and such sum will bear interest there from until paid at the rate provided in this Note (including any increased interest rate). From and after the occurrence of any default, whether by nonpayment, maturity, acceleration, nonperformance or otherwise, and until such default has been cured, all outstanding amounts due under this Note shall bear interest at a rate equal to 18% per annum, or the maximum legal rate allowed by applicable state law if this rate is in excess of the maximum rate Lender is permitted to charge.

9. ANNUAL FINANCIAL STATEMENTS

Borrower agrees to provide Lender with updated financial statements and other requested financial reports, including tax returns, annually on the anniversary date of the date of this Note or at such other reasonable times as Lender may request. The failure of Borrower to provide annual financial statements or other requested reports within a reasonable time may be declared to be a default of this Note by Lender and Lender may exercise all remedies under Section 7 of this Note or as provided elsewhere in this Note.

10. DISSEMINATION OF INFORMATION

If Lender determines at any time to sell, transfer or assign this Note, the Security Instrument and any other security instruments, and any or all servicing rights with respect thereto, or to grant participations therein ("Participations") or issue, in a public offering or private placement, mortgage pass-through certificates or other securities evidencing a beneficial interest in the loan ("Securities"), Lender may forward to each purchaser, transferee, assignee, servicer, participant, investor, or their respective successors in such Participations and/or Securities ("collectively, the "Investor"), any rating agency rating such Securities and each prospective Investor, all documents and information which Lender now has or may hereafter acquire relating to the Indebtedness and to Borrower, any guarantor, any indemnitors and the Property, which shall have been furnished by Borrower, any guarantor or any indemnitors, as Lender determines necessary or desirable.

11. LENDER ADVANCES

Lender may make advances under the mortgage or deed of trust, security agreement or other instrument providing security for this Note, to protect the Lender's interest in any mortgage or deed of trust, security agreement or other instrument providing security for this Note from loss of value or damage. Any money so advanced (including reasonable costs of recovery and attorneys' fees) plus interest at the default rate stated in Section 8 of this Note shall become an obligation due and owing under the terms of this Note immediately upon the date advanced by Lender and is an obligation of Borrower secured by the mortgage or deed of trust, security agreement or other instrument providing security for this Note.

MULTISTATE FIXED RATE NOTE - Open Prepayment -- Farmer Mac
UNIFORM INSTRUMENT Form 6001

2

12. GIVING OF NOTICES

Unless applicable law requires a different method, any notice that must be given to Borrower under this Note will be given by delivering it or by mailing it by nationally recognized overnight courier to Borrower at 106 K Street, Suite 300, Sacramento, CA 95814 or at a different address if Borrower gives Lender a notice of Borrower's different address.

Any notice that must be given to Lender under this Note will be given by delivering it or by mailing it by nationally recognized overnight courier to Lender at the address stated in Section 3(B) above or at a different address if Borrower is given a notice of that different address.

13. OBLIGATIONS OF PERSONS UNDER THIS NOTE Each Borrower, and each person executing this Note on such Borrower's behalf, represents and warrants to Lender that by its execution below, such Borrower is duly organized, is in good standing, and has the full power, authority and legal right to execute and deliver this Note, and is obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed and any additional amounts incurred under the terms of this Note. Each Borrower also represents and warrants that any person who is a guarantor, surety or endorser of this Note is also obligated to keep all promises made in this Note, including the promise to pay the full amount owed and any additional amounts incurred under the terms of this Note. Lender may enforce its rights under this Note against each Borrower and each person executing or guaranteeing this Note on such Borrower's behalf, individually or against all such persons together. Any one Borrower or any person guaranteeing this Note on any such Borrower's behalf may be required to pay all amounts due or incurred under this Note.
14. WAIVERS

Borrower and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment" means the right to require Lender to demand payment of amounts due. "Notice of Dishonor" means the right to require Lender to give notice to other persons that amounts due have not been paid.

15. UNIFORM SECURED NOTE This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given to the Lender under this Note, a Mortgage, Deed of Trust, or Security Deed (the "Security Instrument"), dated the same date as this Note, protects the Lender from possible losses which might result if Borrower does not keep the promises which Borrower makes in this Note. That Security Instrument describes how and under what conditions Borrower may be required to make immediate payment in full of all amounts Borrower owes under this Note. Some of those conditions are described as follows:

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.

16. USURY

The parties to this Note intend and agree that the indebtedness evidenced by this Note and any related documents shall remain in compliance with any usury provisions of the state within which this Note was made by Borrower. This Note and any related documents are subject to the express condition that at no time shall the Borrower be obligated, or required, to pay interest on the principal balance at a rate that could subject Lender to either civil or criminal liability as a result of such rate being in excess of the maximum rate which Lender is permitted to charge. If, by the terms of this Note, Borrower is, at any time, required or obligated to pay interest on the principal balance at a rate in excess of such maximum rate, then the rate of interest under this Note shall be deemed to be immediately reduced to such maximum rate, and interest payable hereunder shall be computed at such maximum rate, and any portion of all prior Interest payments in excess of such maximum rate shall be applied, and/or shall retroactively be deemed to have been payments made, in reduction of the principal balance.

MULTISTATE FIXED RATE NOTE - Open Prepayment -- Farmer Mac
UNIFORM INSTRUMENT Form 6001

3

S&W Seed Company, a Nevada corporation

_________________________________
Signature
Matthew K. Szot, Chief Financial Officer /Sign Originals. Only]

PAY TO THE ORDER OF

U.S. Bank National Association, as Custodian/Trustee for Rooster Capital LLC, a Delaware limited liability company
WITHOUT RECOURSE

Conterra Agricultural Capital, LLC

_________________________________
Signature
Paul Erickson, President

MULTISTATE FIXED RATE NOTE - Open Prepayment -- Farmer Mac
UNIFORM INSTRUMENT Form 6001

4

NOTE

Loan # R1028

November 30, 2017
[Date] Sacramento,
[City] CA
[State]

Equipment and Vehicles

1. BORROWER'S PROMISE TO PAY

In return for a loan that Borrower has received, Borrower promises to pay U.S. $2,100,000.00, (this amount is called "Principal"), plus interest, to the order of the Lender. The Lender is Conterra Agricultural Capital, LLC . Borrower will make all payments under this Note in the form of cash, check or money order.

Borrower understands that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is also called the "Lender."

2. INTEREST

Prior to default, interest will be charged on unpaid principal until the full amount of Principal has been paid. Borrower will pay interest at a yearly rate of 9.500%.

After default, interest will be charged on unpaid principal at the interest rate stated in Section 8 of this Note.

3. SCHEDULED PAYMENTS
1. Time and Amount of Payments

1 interest payment on January 1, 2018, with interest calculated from the date of closing on the unpaid principal balance at 9.500% per annum; 3 consecutive semi- annual principal and interest payments of $118,223.17 each, beginning July 1, 2018, and the final payment of $2,122,731.84 on November 30, 2019, which is called the "Maturity Date." In the event Borrower elects the Option to Extend pursuant to Section 4 of this Note, and Lender approves of such extension pursuant to Section 4 of this Note, Borrower shall make 2 additional consecutive semi-annual principal and interest payments of $118,223.17 each, beginning January 1, 2020, and a final payment of $2,077,537.23 on November 30, 2020.

2. Place of Payments

Borrower will make payments at 7755 Office Plaza Dr. North, Suite 195, West Des Moines, IA 50266 or at a different place if required by Lender.

4. OPTION TO EXTEND

Provided that no default or event of default is then existing under this Note or under the Security Instrument, as hereinafter defined, Borrower shall have, subject to Lender's approval, the option to extend the Maturity Date of the Note to November 30, 2020. The option to extend set forth herein shall be a single option to extend, subject to Lender's sole approval, exercisable by Borrower prior the original Maturity Date under this Note.

5. INTEREST CALCULATION

Interest on this Note is computed on a 30/360 simple interest basis; that is, with the exception of odd days in the first payment period, monthly interest is calculated by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by a month of 30 days. Interest for the odd days is calculated on the basis of the actual days to the next full month and a 360-day year. Unless required by applicable law, payments will be applied first to accrued unpaid interest, second to principal, third to advances under the Security Instrument, and finally to late charges.

MULTISTATE FIXED RATE NOTE - Open Prepayment -- Farmer Mac
UNIFORM INSTRUMENT Form 6001

1

6. PREPAYMENTS.

Borrower may prepay all or any portion of the principal of this Note. Concurrently with any permitted prepayment of the unpaid principal balance of this Note, Borrower shall pay any unpaid interest accrued on such principal amount from the date to which interest was last paid to the next installment payment date.

7. BORROWER'S FAILURE TO PAY AS REQUIRED
1. Late Charge for Overdue Payments

If any installment of principal or interest due under this Note is not received by the Lender by the 10th calendar day after the date such payment is due, a late fee shall be payable by Borrower equal to 15% of the amount of principal or interest then due.

2. Default

If Borrower does not pay the full amount of each installment within 10 calendar days of the date each installment is due, Borrower will be in default.

3. Notice of Default

If Borrower is in default and if allowed by applicable law, Lender may send Borrower a written notice telling Borrower that if Borrower does not pay the overdue amount by a certain date (in the case of a payment default) or cure the default within 30 days of Borrower's receipt of notice of default (in the case of any non-payment default), then Lender may require Borrower to pay immediately the full amount of Principal which has not been paid and all the interest that Borrower owes on that amount.

4. No Waiver By Lender

Even if, at a time when Borrower is in default, Lender does not require Borrower to pay immediately in full as described above, Lender will still have the right to do so if Borrower is in default at a later time.

5. Payment of Lender's Costs and Expenses

If Lender has required Borrower to pay immediately in full as described above, Lender will have the right to be paid back by Borrower for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. If allowed by applicable law those expenses include, for example, reasonable attorneys' fees.

8. INTEREST AFTER DEFAULT

Upon default, including failure to pay this Note upon final maturity, at Lender's option, Lender may add any unpaid interest to principal then due under the Note and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased interest rate). From and after the occurrence of any default, whether by nonpayment, maturity, acceleration, nonperformance or otherwise, and until such default has been cured, all outstanding amounts due under this Note shall bear interest at a rate equal to 1$% per annum, or the maximum legal rate allowed by applicable state law if this rate is in excess of the maximum rate Lender is permitted to charge.

9. ANNUAL FINANCIAL STATEMENTS

Borrower agrees to provide Lender with updated financial statements and other requested financial reports, including tax returns, annually on the anniversary date of the date of this Note or at such other reasonable times as Lender may request. The failure of Borrower to provide annual financial statements or other requested reports within a reasonable time may be declared to be a default of this Note by Lender and Lender may exercise all remedies under Section 7 of this Note or as provided elsewhere in this Note.

10. DISSEMINATION OF INFORMATION

If Lender determines at any time to sell, transfer or assign this Note, the Security Instrument and any other security instruments, and any or all servicing rights with respect thereto, or to grant participations therein ("Participations") or issue, in a public offering or private placement, mortgage pass-through certificates or other securities evidencing a beneficial interest in the loan ("Securities"), Lender may forward to each purchaser, transferee, assignee, servicer, participant, investor, or their respective successors in such Participations and/or Securities ("collectively, the "Investor"), any rating agency rating such Securities and each prospective Investor, all documents and information which Lender now has or may hereafter acquire relating to the Indebtedness and to Borrower, any guarantor, any indemnitors and the Property, which shall have been furnished by Borrower, any guarantor or any indemnitors, as Lender determines necessary or desirable.

MULTISTATE FIXED RATE NOTE - Open Prepayment -- Farmer Mac
UNIFORM INSTRUMENT Form 6001

2

11. LENDER ADVANCES

Lender may make advances under the Security Instrument, as hereinafter defined, providing security for this Note, to protect the Lender's interest in any property providing security for this Note from loss of value or damage. Any money so advanced (including reasonable costs of recovery and attorneys' fees) plus interest at the default rate stated in Section 8 of this Note shall become an obligation due and owing under the terms of this Note immediately upon the date advanced by Lender and is an obligation of Borrower secured by the Security Instrument providing security for this Note.

12. GIVING OF NOTICES

Unless applicable law requires a different method, any notice that must be given to Borrower under this Note will be given by delivering it or by mailing it by nationally recognized overnight courier to Borrower at 106 K Street, Suite 300, Sacramento, CA 95814 the Property Address above or at a different address if Borrower gives Lender a notice of Borrower's different address.

Any notice that must be given to Lender under this Note will be given by delivering it or by mailing it by nationally recognized overnight courier to Lender at the address stated in Section 3(B) above or at a different address if Borrower is given a notice of that different address.

13. OBLIGATIONS OF PERSONS UNDER THIS NOTE

Each Borrower, and each person executing this Note on such Borrower's behalf, represents and warrants to Lender that by its execution below, such Borrower is duly organized, is in good standing, and has the full power, authority and legal right to execute and deliver this Note, and is obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed and any additional amounts incurred under the terms of this Note. Each Borrower also represents and warrants that any person who is a guarantor, surety or endorser of this Note is also obligated to keep all promises made in this Note, including the promise to pay the full amount owed and any additional amounts incurred under the terms of this Note. Lender may enforce its rights under this Note against each Borrower and each person executing or guaranteeing this Note on such Borrower's behalf, individually or against all such persons together. Any one Borrower or any person guaranteeing this Note on any such Borrower's behalf may be required to pay all amounts due or incurred under this Note.

14. WAIVERS

Borrower and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment" means the right to require Lender to demand payment of amounts due. "Notice of Dishonor" means the right to require Lender to give notice to other persons that amounts due have not been paid.

15. UNIFORM SECURED NOTE

This Note is a uniform instrument with limited variations in some jurisdictions. In addition to the protections given to the Lender under this Note, three separate Security Agreements related to Borrower's property located in California, Idaho, and Wisconsin (collectively, the "Security Instrument"), dated the same date as this Note, protects the Lender from possible losses which might result if Borrower does not keep the promises which Borrower makes in this Note. That Security Instrument describes how and under what conditions Borrower may be required to make immediate payment in full of all amounts Borrower owes under this Note. Some of those conditions are described as follows:

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.

MULTISTATE FIXED RATE NOTE - Open Prepayment -- Farmer Mac
UNIFORM INSTRUMENT Form 6001

3

Additionally, Borrower covenants and agrees that on the date hereof, Borrower has also entered into another loan (Loan # 21701653 in the amount of $10,400,00.00) which is evidenced by a separate promissory note (the "Other Note"), which is secured by a separate mortgage and deed of trusts (the "Other Security Instruments"). It is agreed that any default under the Security Instrument or this Note shall be deemed a default under the Other Note and Other Security Instruments; and any default under the Other Note or Other Security Instruments shall be deemed to be a default under this Note and the Security Instrument.

16. USURY

The parties to this Note intend and agree that the indebtedness evidenced by this Note and any related documents shall remain in compliance with any usury provisions of the state within which this Note was made by Borrower. This Note and any related documents are subject to the express condition that at no time shall the Borrower be obligated, or required, to pay interest on the principal balance at a rate that could subject Lender to either civil or criminal liability as a result of such rate being in excess of the maximum rate which Lender is permitted to charge. If, by the terms of this Note, Borrower is, at any time, required or obligated to pay interest on the principal balance at a rate in excess of such maximum rate, then the rate of interest under this Note shall be deemed to be immediately reduced to such maximum rate, and interest payable hereunder shall be computed at such maximum rate, and any portion of all prior Interest payments in excess of such maximum rate shall be applied, and/or shall retroactively be deemed to have been payments made, in reduction of the principal balance.

S&W Seed Company, a Nevada corporation

_________________________________
Signature
Matthew K. Szot, Chief Financial Officer /Sign Originals. Only]

PAY TO THE ORDER OF

U.S. Bank National Association, as Custodian/Trustee for Rooster Capital LLC, a Delaware limited liability company
WITHOUT RECOURSE

Conterra Agricultural Capital, LLC

_________________________________
Signature
Paul Erickson, President

MULTISTATE FIXED RATE NOTE - Open Prepayment -- Farmer Mac
UNIFORM INSTRUMENT Form 6001

4

SECURITY AGREEMENT

This Security Agreement (this "Agreement") is entered into as of November 30, 2017, by and between S&W SEED COMPANY, a Nevada corporation ("Debtor"), and CONTERRA AGRICULTURAL CAPITAL, LLC, an Iowa limited liability company ("Secured Party").

RECITALS

A. Secured Party has made a loan to Debtor in the original principal amount of Two Million One Hundred Thousand and no/100 Dollars ($2,100,00.00), which is evidenced by, among other things, that certain promissory note by Debtor in favor of Secured Party (as amended, supplemented, or restated, the "Note") as of the date of this Agreement.

B. Debtor desires to create and grant in favor of Secured Party, and Secured Party desires to accept, a security interest in all Collateral (as defined herein) to secure full and timely payment and performance of all Obligations (as defined herein).

NOW, THEREFORE, in consideration of the foregoing Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Debtor and Secured Party (each a "Party" and collectively, the "Parties") agree as follows:

AGREEMENT

1. Grant of Security Interest. The Parties agree that the recitals set forth above are true and correct and are hereby incorporated in and made a part of this Agreement. Debtor hereby pledges and grants to Secured Party a security interest in all Collateral (as defined in Section 2 below) to secure full and timely payment and performance of all Obligations (as defined in Section 3 below).
2. Collateral. For purposes of this Agreement, "Collateral" shall mean and include any and all of Debtor's right, title, or interest, now owned or later acquired by Debtor, wherever located, in or to the following:
1. the machinery and equipment specifically listed on Schedule 1 attached hereto;
2. the vehicles specifically listed on Schedule 2, attached hereto;
3. All proceeds from any of the property described in (a) and (b) above, including without limitation, insurance proceeds, proceeds of any noncommercial tort cause of action or settlement, and all replacements, substitutions, returns, additions, or renewals of same.
3. Obligations. For purposes of this Agreement, "Obligations" shall mean and include any and all debts, obligations, duties, liabilities, and other covenants of Debtor or any other person in favor of Secured Party, now existing or hereafter arising, pursuant to, in connection with, or otherwise related to the Note or this Agreement, as any of the same may be modified from time to time in accordance therewith, including, without limitation:
1. Full and timely reimbursement of all costs and expenses (including reasonable attorneys' fees) incurred by Secured Party for: (i) the collection of any funds or the enforcement of any rights under the Note or this Agreement; or (ii) the protection, maintenance, and enforcement of the security interest created under this Agreement;

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Conterra Agricultural Capital, LLC
R1028 CA Security Agreement
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2. Any and all obligations and liabilities of Debtor related to the Note or this Agreement provided by law or required pursuant to any other agreement; and
3. Any and all obligations and liabilities of Debtor or any other person under any amendments, renewals, or restatements of the Note, this Agreement or any other related loan document.
4. Representations and Warranties. Debtor represents and warrants to Secured Party the following:
1. Title. Except as otherwise disclosed to Secured Party in writing prior to this Agreement, Debtor owns the Collateral free and clear of any and all liens, claims and encumbrances, except the security interest created under this Agreement, and no other person has any right, title, claim, license, security interest, lien, or other interest in, against, or to the Collateral;
2. Authority. Debtor has full right, power, and authority to grant a security interest in the Collateral, to execute this Agreement to render the Collateral subject to the security interest created under this Agreement, and to perform all of Debtor's obligations under this Agreement. The individual executing this Agreement on behalf of Debtor has full right, power, and authority to execute this Agreement on behalf of Debtor and to bind Debtor hereunder by their acts and deeds;
3. Information. The following information and all other factual information contained in this Agreement is accurate and complete as of the date hereof and does not fail to include any information necessary to make the same not materially misleading:
1. Debtor is a corporation validly formed and in good standing under the laws of the State of Nevada. Debtor is qualified to transact business in and in good standing under the laws of the State of California;
2. Debtor's mailing address is: 106 K Street, Suite 300, Sacramento, CA 95814;
3. All of the Collateral under this Agreement is located in California; and
4. Debtor's records concerning the Collateral are located at the following address: 106 K Street, Suite 300, Sacramento, CA 95814; and
4. Security Interest. This Agreement is intended to create a valid security interest in the Collateral and, upon the filing of the appropriate financing statements, a perfected priority security interest in the Collateral in favor of Secured Party. The Debtor has taken all actions necessary to protect and perfect such security interest.
5. Covenants of Debtor. Debtor hereby agrees:
1. To defend the Collateral against all other persons who, at any time, may claim an interest in it;
2. To do all acts that may be necessary to maintain, preserve, and protect the Collateral and not to fail to maintain or renew, and not to abandon, any Collateral;
3. To not sell, encumber, or otherwise dispose of or transfer any Collateral or any right or interest therein without the Secured Party's prior written consent, and to keep the Collateral free of all liens or security interests (other than the security interest created under this Agreement or as disclosed by Debtor to Secured Party in writing prior to this Agreement);

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Conterra Agricultural Capital, LLC
R1028 CA Security Agreement
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4. To keep the Collateral insured against loss through theft, fire, or other casualty in an amount and manner approved by the Secured Party, to promptly provide proof of such insurance to Secured Party upon request and to cause to be included in each such insurance policy, as may be requested by Secured Party, endorsements in form and substance satisfactory to Secured Party (i) designating Secured Party as the party to receive payment of any proceeds payable as the result of a loss of all or any part of the Collateral under such policy, and (ii) requiring at least 30 days written notice to Secured Party prior to any modification, termination, or cancellation of any such policy. In all events, Debtor hereby assigns to Secured Party all of its rights, title, and interest in and to any proceeds of any insurance covering the Collateral, whether or not required under this Section 5, and authorizes Secured Party to take such acts and execute such documents as may be required to receive such proceeds. In the event Debtor fails to provide for all insurance coverage as required in this Section 5, Secured Party shall have, in addition to any other remedies available to it, the right to obtain satisfactory insurance coverage on the Collateral on its own behalf and Debtor agrees to reimburse Secured Party upon demand for all costs and expenses incurred in connection therewith;
5. To give Secured Party reasonable access to and opportunity to inspect the Collateral, wherever located;
6. To promptly pay when due all taxes, assessments, charges, encumbrances, and liens now or hereafter imposed upon or affecting any Collateral;
7. To keep and maintain all of the records concerning the Collateral at the address indicated in this Agreement;
8. To keep and maintain the Collateral at the address(es) indicated in this Agreement or at such other locations as may be approved by Secured Party;
9. To notify Secured Party at least ten (10) business days prior to any change in: (i) the location of Debtor's place of business, (ii) Debtor's name, (iii) Debtor's type of business organization, (iv) Debtor's jurisdiction of organization, (v) the location of the Collateral, and (vi) any information set forth in Section 4(c) above;
10. To comply and to maintain compliance with all laws, regulations, and ordinances relating to the possession and control of the Collateral; and
11. To procure, execute, and deliver any endorsements, assignments, and other writings reasonably requested by Secured Party in order to perfect, maintain, and protect Secured Party's security interest in the Collateral and the priority thereof.
6. Authorized Action by Secured Party. Debtor hereby authorizes Secured Party to, at Secured Party's sole option and without any obligation to do so, and regardless of whether the Collateral is in its possession:
1. File or record any document necessary or convenient to perfect, continue, amend or terminate the security interest created under this Agreement, including, without limitation, any financing statements, including amendments, authorized to be filed under the California Commercial Code or any comparable law in any jurisdiction. Debtor hereby ratifies any documents previously filed or recorded by Secured Party regarding the Collateral, including, without limitation, any and all previously filed financing statements;
2. Enter Debtor's property to inspect the Collateral at any reasonable time, provided that Secured Party gives Debtor notice within two business days of any inspection; however, no notice shall be required for any entry by Secured Party in connection with exercise of any available remedy upon breach of this Agreement; and

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Conterra Agricultural Capital, LLC
R1028 CA Security Agreement
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3. Pay any costs reasonably necessary to obtain, preserve, maintain, defend and enforce the security interest created under this Agreement, and pay any amounts reasonably necessary to discharge encumbrances, maintain adequate insurance coverage and maintain compliance with applicable laws and ordinances affecting the Collateral, including, without limitation, the payment of taxes, assessments, and other charges required by law or contract, reasonable attorney fees and legal expenses and expenses associated with sale, repair or storage of all or any of the Collateral. Debtor agrees to reimburse Secured Party on demand for any such payments made or costs incurred by Secured Party and that such reimbursement obligation shall be a part of the Obligations.
7. Default and Remedies. In the event of any failure or default by Debtor or any other person in the full and timely payment and performance of the Obligations, including, without limitation, any default by Debtor in the payment of any principal or in any other duty, covenant, or obligation under the Note, this Agreement or any other Loan Document (in each case, subject to the applicable cure periods set forth in Section 7 of the Note), Secured Party shall have all the rights and remedies of a secured party under the California Commercial Code, including, without limitation, a right to do any one or more of the following without notice or demand:
1. Take (or require Debtor to assemble and deliver to Secured Party at the Project at any reasonably specified time) and retain possession and control of all or any of the Collateral wherever it is located or at whatever location Secured Party deems appropriate upon removal, with or without judicial process;
2. Sell, lease, or otherwise dispose of any or all Collateral by public or private sale or otherwise, on such terms and in such manner as Secured Party deems appropriate to preserve and protect its security interest;
3. Enforce Secured Party's security interest by foreclosure or any other means permitted by law or under the terms of this Agreement; and
4. Recover from Debtor all costs and expenses incurred by Secured Party in exercising any of its rights, powers, or remedies under this Agreement or as permitted by law, including without limitation, attorneys' fees and costs, appraisal costs, and costs of transporting or storing any or all of the Collateral.
8. Notices. Any notice or other communication required or permitted to be given under this Agreement shall be delivered and become effective in accordance with the provisions of Section 12 of the Note.
9. Cumulative Rights. The rights, powers, and remedies of Secured Party under this Agreement are in addition to any rights, powers, and remedies given to Secured Party by virtue of any statute or rule of law, the Note, or any other agreement, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Secured Party's security interest in the Collateral.
10. Waiver. No forbearance or delay by Secured Party in exercising any right, power, or remedy shall constitute a waiver thereof, and every right, power, or remedy of Secured Party shall continue in full force and effect until such right, power, or remedy is specifically waived in a writing executed by Secured Party.
11. Successors and Assigns. This Agreement and all rights and obligations hereunder shall be binding upon Debtor and its successors, assigns, personal representatives, and heirs; and shall inure to the benefit of Secured Party and its respective successors and assigns.
12. Entire Agreement. This Agreement and the Note to which Debtor is a party together constitute the entire agreement between the Parties with regard to the subject matter of this Agreement. There are no other representations, agreements, or understandings, oral or written, between or among the parties relating to the subject matter of this Agreement.

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Conterra Agricultural Capital, LLC
R1028 CA Security Agreement
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13. No Modifications. No part of this Agreement may be modified, waived, limited, discharged, or terminated except in writing, signed by all Parties and expressly referring to this Agreement and to the provisions so modified or limited.
14. Governing Law and Venue. This Agreement and all amendments relating hereto shall be governed by and construed under the laws of the State of California without regard to principles of conflicts of law. Where applicable and except as otherwise defined herein or in the Note, terms used in this Agreement shall have the meanings given them in the California Commercial Code.
15. Use of Headings. Any headings contained in this Agreement are for reference purposes only and shall not be considered in construing this Agreement.
16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
17. Severability. If any of the provisions of this Agreement shall be held invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the Parties hereto shall be construed and enforced accordingly.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first set forth in this Agreement.

DEBTOR

S&W SEED COMPANY,
a Nevada corporation

By _______________________________
Name: Matthew K. Szot
Title: Chief Financial Officer

SECURED PARTY

CONTERRA AGRICULTURAL CAPITAL, LLC,
an Iowa limited liability company

By _______________________________
Name: Paul Erickson
Title: President

S&W Seed Company
Conterra Agricultural Capital, LLC
R1028 CA Security Agreement
Schedule 1

SCHEDULE 1

MACHINERY & EQUIPMENT

S&W Seed Company 25552 S. Butte Ave., Five Points, CA 93624
Item Description

2      4,150-Steel Seed Bins, approx. 4 ft.X4 ft. X 4ft. through all warehouses
5      Mobile Grain Elevator, KSI The Inclinator, 18 ft., SN 20606
6      Neuero Moveable Blower/Vacuum-model 8110 D, SN 3000, new engine, 3 years
22      Floor Scale Under Hopper, Inscale Lp751A
66      Pallet Attachment for forklift, Liftmaster Dumper
67      EZ Loader, Bishamon SN 1709008
75      Zebra Printer Model 105 SL
76      Miscellaneous Office Equipment (lot)
78      Inspection-Ergo Vision System, by Master Seed Equipment
79      Seed Screen Sorter-Almaco Model ANSC, SN T14075 (air blast)
80      Miscellaneous Equipment in weigh house and lab, grain scale, light table, magnifier
81      (20) Each Framed Breeder Cages
82      Hege Model 80 Seeder Plot Drill
83      Compressor, 80 Gallon Tank, HP Unknown
84      Bagging Machine
85      Bagging Machine (Covered)
86      Ryobi 2800 psi Pressure Washer
87      Carton Sealer
88      Pallet Jack, 5500#
         Shop Equipment Including press, torch set, compressor, miller welder, auger, Lincoln welder, sorter, grinder, chop saw, pump, mixer, drill, hand tools,
89      miscellaneous support
90      Gustafson Seed Treater Model 1000, SN S1000 (in container outside Whse A)
91      Seed Treater (Unknown Model)
92      40 ft. Container with ThermoKing Air Control (for bees)
94      Diesel Fuel Trailer
95      Field Auger
96      Sweeper-Exterra
97      Carton Crusher- Not Operational
99      (3) 40 ft. Containers (Whse A North)
100     Furniture and Support Items
101     Electronic support items, computer, printers, phones system

S&W Seed Company
Conterra Agricultural Capital, LLC
R1028 CA Security Agreement
Schedule 2

SCHEDULE 2

VEHICLES

Asset #	Class	State	Loc	Equipment Property Description	Purchase/In Service Date	Purchase Price	NBV9/30/2017
V200808	S&W	CA	Five Points	2008 Ford Edge VIN# 2FMDK38C18BB23209	8/15/2008	35,264	-
V200906	S&W	CA	Five Points	2009 Ford F-250 VIN# 1FTSW20569WA55423	6/12/2009	38,771	0
V201008-2	S&W	CA	Five Points	2011Ford F-150 VIN# 1FT7W2A67BEA51996	8/11/2010	44,492	(0)
V201303-1	S&W	CA	Five Points	2013 Dodge Ram 1500 Vin #1C6RR7NT6DS5686D4	3/7/2013	4,000	333
V201303-2	S&W	CA	Five Points	2013 Dodge Ram 1500 Vin #1C6RR7NT6DS5686D4	3/31/2013	44,572	3,714
V201307	S&W	CA	Five Points	2013 Ram 1500, Odom 4814; VIN #1C6RR7NT3DS619489	7/12/2013	50,302	7,545
V201401-1	S&W	CA	Other	K8228 NEW 2013 Kawasaki KAF9S0FDF (Red) VIN JK1AFDF10DB506359	1/7/2014	13,815	13,815
V201406-1	S&W	CA	Five Points	2014 Ram 1500 Truck-VIN 1C6RR7NT2ES290253	6/26/2014	52,742	17,581

SECURITY AGREEMENT

This Security Agreement (this "Agreement") is entered into as of November 30, 2017, by and between S&W
SEED COMPANY, a Nevada corporation ("Debtor"), and CONTERRA AGRICULTURAL CAPITAL, LLC, an Iowa limited liability company ("Secured Party").

RECITALS

A. Secured Party has made a loan to Debtor in the original principal amount of Two Million One Hundred Thousand and no/100 Dollars ($2,100,00.00), which is evidenced by, among other things, that certain promissory note by Debtor in favor of Secured Party (as amended, supplemented, or restated, the "Note") as of the date of this Agreement.

B. Debtor desires to create and grant in favor of Secured Party, and Secured Party desires to accept, a security interest in all Collateral (as defined herein) to secure full and timely payment and performance of all Obligations (as defined herein).

NOW, THEREFORE, in consideration of the foregoing Recitals and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Debtor and Secured Party (each a "Party" and collectively, the "Parties") agree as follows:

AGREEMENT

1. Grant of Security Interest. The Parties agree that the recitals set forth above are true and correct and are hereby incorporated in and made a part of this Agreement. Debtor hereby pledges and grants to Secured Party a security interest in all Collateral (as defined in Section 2 below) to secure full and timely payment and performance of all Obligations (as defined in Section 3 below).
2. Collateral. For purposes of this Agreement, "Collateral" shall mean and include any and all of Debtor's right, title, or interest, now owned or later acquired by Debtor, wherever located, in or to the following:
1. the machinery and equipment specifically listed on Schedule 1 attached hereto;
2. the vehicles specifically listed on Schedule 2, attached hereto;
3. All proceeds from any of the property described in (a) and (b) above, including without limitation, insurance proceeds, proceeds of any noncommercial tort cause of action or settlement, and all replacements, substitutions, returns, additions, or renewals of same.
3. Obligations. For purposes of this Agreement, "Obligations" shall mean and include any and all debts, obligations, duties, liabilities, and other covenants of Debtor or any other person in favor of Secured Party, now existing or hereafter arising, pursuant to, in connection with, or otherwise related to the Note or this Agreement, as any of the same may be modified from time to time in accordance therewith, including, without limitation:
1. Full and timely reimbursement of all costs and expenses (including reasonable attorneys' fees) incurred by Secured Party for: (i) the collection of any funds or the enforcement of any rights under the Note or this Agreement; or (ii) the protection, maintenance, and enforcement of the security interest created under this Agreement;
2. Any and all obligations and liabilities of Debtor related to the Note or this Agreement provided by law
   or required pursuant to any other agreement; and

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Conterra Agricultural Capital, LLC
R1028 ID Security Agreement
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3. Any and all obligations and liabilities of Debtor or any other person under any amendments, renewals, or restatements of the Note, this Agreement or any other related loan document.
4. Representations and Warranties. Debtor represents and warrants to Secured Party the following:
1. Title. Except as otherwise disclosed to Secured Party in writing prior to this Agreement, Debtor owns the Collateral free and clear of any and all liens, claims and encumbrances, except the security interest created under this Agreement, and no other person has any right, title, claim, license, security interest, lien, or other interest in, against, or to the Collateral;
2. Authority. Debtor has full right, power, and authority to grant a security interest in the Collateral, to execute this Agreement to render the Collateral subject to the security interest created under this Agreement, and to perform all of Debtor's obligations under this Agreement. The individual executing this Agreement on behalf of Debtor has full right, power, and authority to execute this Agreement on behalf of Debtor and to bind Debtor hereunder by their acts and deeds;
3. Information. The following information and all other factual information contained in this Agreement is accurate and complete as of the date hereof and does not fail to include any information necessary to make the same not materially misleading:
1. Debtor is a corporation validly formed and in good standing under the laws of the State of Nevada. Debtor is qualified to transact business in and in good standing under the laws of the State of Idaho;
2. Debtor's mailing address is: 106 K Street, Suite 300, Sacramento, CA 95814;
3. All of the Collateral under this Agreement is located in Idaho; and
4. Debtor's records concerning the Collateral are located at the following address: 106 K Street, Suite 300, Sacramento, CA 95814; and
4. Security Interest. This Agreement is intended to create a valid security interest in the Collateral and, upon the filing of the appropriate financing statements, a perfected priority security interest in the Collateral in favor of Secured Party. The Debtor has taken all actions necessary to protect and perfect such security interest.
5. Covenants of Debtor. Debtor hereby agrees:
1. To defend the Collateral against all other persons who, at any time, may claim an interest in it;
2. To do all acts that may be necessary to maintain, preserve, and protect the Collateral and not to fail to maintain or renew, and not to abandon, any Collateral;
3. To not sell, encumber, or otherwise dispose of or transfer any Collateral or any right or interest therein without the Secured Party's prior written consent, and to keep the Collateral free of all liens or security interests (other than the security interest created under this Agreement or as disclosed by Debtor to Secured Party in writing prior to this Agreement);

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Conterra Agricultural Capital, LLC
R1028 ID Security Agreement
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4. To keep the Collateral insured against loss through theft, fire, or other casualty in an amount and manner approved by the Secured Party, to promptly provide proof of such insurance to Secured Party upon request and to cause to be included in each such insurance policy, as may be requested by Secured Party, endorsements in form and substance satisfactory to Secured Party (i) designating Secured Party as the party to receive payment of any proceeds payable as the result of a loss of all or any part of the Collateral under such policy, and (ii) requiring at least 30 days written notice to Secured Party prior to any modification, termination, or cancellation of any such policy. In all events, Debtor hereby assigns to Secured Party all of its rights, title, and interest in and to any proceeds of any insurance covering the Collateral, whether or not required under this Section 5, and authorizes Secured Party to take such acts and execute such documents as may be required to receive such proceeds. In the event Debtor fails to provide for all insurance coverage as required in this Section 5, Secured Party shall have, in addition to any other remedies available to it, the right to obtain satisfactory insurance coverage on the Collateral on its own behalf and Debtor agrees to reimburse Secured Party upon demand for all costs and expenses incurred in connection therewith;
5. To give Secured Party reasonable access to and opportunity to inspect the Collateral, wherever located;
6. To promptly pay when due all taxes, assessments, charges, encumbrances, and liens now or hereafter imposed upon or affecting any Collateral;
7. To keep and maintain all of the records concerning the Collateral at the address indicated in this Agreement;
8. To keep and maintain the Collateral at the address(es) indicated in this Agreement or at such other locations as may be approved by Secured Party;
9. To notify Secured Party at least ten (10) business days prior to any change in: (i) the location of Debtor's place of business, (ii) Debtor's name, (iii) Debtor's type of business organization, (iv) Debtor's jurisdiction of organization, (v) the location of the Collateral, and (vi) any information set forth in Section 4(c) above;
10. To comply and to maintain compliance with all laws, regulations, and ordinances relating to the possession and control of the Collateral; and
11. To procure, execute, and deliver any endorsements, assignments, and other writings reasonably requested by Secured Party in order to perfect, maintain, and protect Secured Party's security interest in the Collateral and the priority thereof.
6. Authorized Action by Secured Party. Debtor hereby authorizes Secured Party to, at Secured Party's sole option and without any obligation to do so, and regardless of whether the Collateral is in its possession:
1. File or record any document necessary or convenient to perfect, continue, amend or terminate the security interest created under this Agreement, including, without limitation, any financing statements, including amendments, authorized to be filed under the Idaho Commercial Code or any comparable law in any jurisdiction. Debtor hereby ratifies any documents previously filed or recorded by Secured Party regarding the Collateral, including, without limitation, any and all previously filed financing statements;
2. Enter Debtor's property to inspect the Collateral at any reasonable time, provided that Secured Party gives Debtor notice within two business days of any inspection; however, no notice shall be required for any entry by Secured Party in connection with exercise of any available remedy upon breach of this Agreement; and

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Conterra Agricultural Capital, LLC
R1028 ID Security Agreement
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3. Pay any costs reasonably necessary to obtain, preserve, maintain, defend and enforce the security interest created under this Agreement, and pay any amounts reasonably necessary to discharge encumbrances, maintain adequate insurance coverage and maintain compliance with applicable laws and ordinances affecting the Collateral, including, without limitation, the payment of taxes, assessments, and other charges required by law or contract, reasonable attorney fees and legal expenses and expenses associated with sale, repair or storage of all or any of the Collateral. Debtor agrees to reimburse Secured Party on demand for any such payments made or costs incurred by Secured Party and that such reimbursement obligation shall be a part of the Obligations.
7. Default and Remedies. In the event of any failure or default by Debtor or any other person in the full and timely payment and performance of the Obligations, including, without limitation, any default by Debtor in the payment of any principal or in any other duty, covenant, or obligation under the Note, this Agreement or any other Loan Document (in each case, subject to the applicable cure periods set forth in Section 7 of the Note), Secured Party shall have all the rights and remedies of a secured party under the Idaho Commercial Code, including, without limitation, a right to do any one or more of the following without notice or demand:
1. Take (or require Debtor to assemble and deliver to Secured Party at the Project at any reasonably specified time) and retain possession and control of all or any of the Collateral wherever it is located or at whatever location Secured Party deems appropriate upon removal, with or without judicial process;
2. Sell, lease, or otherwise dispose of any or all Collateral by public or private sale or otherwise, on such terms and in such manner as Secured Party deems appropriate to preserve and protect its security interest;
3. Enforce Secured Party's security interest by foreclosure or any other means permitted by law or under the terms of this Agreement; and
4. Recover from Debtor all costs and expenses incurred by Secured Party in exercising any of its rights, powers, or remedies under this Agreement or as permitted by law, including without limitation, attorneys' fees and costs, appraisal costs, and costs of transporting or storing any or all of the Collateral.
8. Notices. Any notice or other communication required or permitted to be given under this Agreement shall be delivered and become effective in accordance with the provisions of Section 12 of the Note.
9. Cumulative Rights. The rights, powers, and remedies of Secured Party under this Agreement are in addition to any rights, powers, and remedies given to Secured Party by virtue of any statute or rule of law, the Note, or any other agreement, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Secured Party's security interest in the Collateral.
10. Waiver. No forbearance or delay by Secured Party in exercising any right, power, or remedy shall constitute a waiver thereof, and every right, power, or remedy of Secured Party shall continue in full force and effect until such right, power, or remedy is specifically waived in a writing executed by Secured Party.
11. Successors and Assigns. This Agreement and all rights and obligations hereunder shall be binding upon Debtor and its successors, assigns, personal representatives, and heirs; and shall inure to the benefit of Secured Party and its respective successors and assigns.
12. Entire Agreement. This Agreement and the Note to which Debtor is a party together constitute the entire agreement between the Parties with regard to the subject matter of this Agreement. There are no other representations, agreements, or understandings, oral or written, between or among the parties relating to the subject matter of this Agreement.

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Conterra Agricultural Capital, LLC
R1028 ID Security Agreement
Page 5 of 5

13. No Modifications. No part of this Agreement may be modified, waived, limited, discharged, or terminated except in writing, signed by all Parties and expressly referring to this Agreement and to the provisions so modified or limited.
14. Governing Law and Venue. This Agreement and all amendments relating hereto shall be governed by and construed under the laws of the State of Idaho without regard to principles of conflicts of law. Where applicable and except as otherwise defined herein or in the Note, terms used in this Agreement shall have the meanings given them in the Idaho Commercial Code.
15. Use of Headings. Any headings contained in this Agreement are for reference purposes only and shall not be considered in construing this Agreement.
16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
17. Severability. If any of the provisions of this Agreement shall be held invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the Parties hereto shall be construed and enforced accordingly.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first set forth in this Agreement.

DEBTOR

S&W SEED COMPANY,
a Nevada corporation

By _______________________________
Name: Matthew K. Szot
Title: Chief Financial Officer

SECURED PARTY

CONTERRA AGRICULTURAL CAPITAL, LLC,
an Iowa limited liability company

By _______________________________
Name: Paul Erickson
Title: President

S&W Seed Company
Conterra Agricultural Capital, LLC
R1028 ID Security Agreement
Schedule 1

SCHEDULE 1

MACHINERY & EQUIPMENT

S&W Seed Company 4819 E. Lewis Lane, Nampa, ID 83686

Item	Description
1	AOC Stationary Belt Thresher
2	Almaco Plot Thresher
3	Belt Thresher
4	WinterSteiger Thresher
5	LD 350 Seed Thresher
6	LD180 Seed Thresher
7	South Dkota Seed Blower
8	Agriculex ASC-3 Seed Cleaner
9	Agriculex ASC-3 Seed Cleaner
10	Dryer Box
11	Lab Top Drier
12	Lab Scientific Labcon Level 2 Biosafety Cab
13	Lab Laminar Flow Hood
14	Autoclave
15	Bee Incubator
16	SG 30 Seed Germinator-Incubator
17	Seed Germinator-Incubator
18	Percival Seed Germinator Screened Cage Tops & Frame Work Approx. 30 EA 20'X30' Approx. 30 EA 10'X14' Approx.
19	20 EA Various Sizes
20	Polaris Ranger 2X4
21	Zebra Printer
22	Balance
23	Dissecting Microscope
24	Dissecting Scope
25	Electronic Scale
26	Microscope
27	72 Inch Flail Mower
28	2011 Frontier Rototiller 1307R
29	Plot Drill "Hedge 80" W/Extra Weights
30	Seeder/Plot Drill
31	Bush Hog 60" Tiller
32	Forage Chopper
33	Alfalfa Harvester
34	Wiley Mill
35	Plot Harvester
36	TXS65 Thermal Tag Printer-Rewinder
37	Flail Mower
38	Equipment Trailer
39	Big Ox 8' Terracer Blade

40	Used Forklift
41	Tiller/Sickle Bar with Trade
42	John Deer 8300 Grain Drill
43	Domries 8 Ft Disc
44	8.5 Ft Ring Packer
45	7 Ft Ring Packer
46	7 Ft Spring Shank Chisel
47	John Deer 50 Box Scraper
48	Hays Forks Loader Attachment
49	Pallett Fork Loader Attachment
50	Field Transplanter Home Made
51	Catlin MFG Gopher Poison Machine
52	8 Ft Rod Weeder
53	Rankin 3 Tooth 7 Ft Ripper
54	2 Misc Tool Bars with Shovels
55	John Deer 3 Bottom Roll Over Plow
56	Pipe Trailer
57	John Deer Row Marker
58	Home Made Row Marker
59	Fuel Tank Gas/Diesel on Trailer
60	New Holland 520 Manure Spreader
61	Older Manure Spreader (Make Unknown)
62	3" X 40' Alum. Handline Approx. 150 each
63	3 Pt Sprayer with Poly Tank Herbicide
64	3 Pt Sprayer with Poly Tank Pesticide
65	30 Ft Spray Boom
66	Emglow 5HP Air Compressor
67	Panasonic Toughpad
68	Braber Dry Fertilizer Spreader 3 Pt
69	5500 Tractor
70	Ford 1520 Tractor W/Loader & BKT
71	Case 35 Hydrostat Tractor with Loader and 80" Belly Mower
72	Portable Dust Collection System
73	M5091 Tractor with Cab and Radio
74	Agtech Products Inc. - Lab Equipment for Nampa Research Facility
75	Foss North America - Used FOSS NIRS DS2500 S/N 91753101 64 BIT Dell for Stevia Analysis
	Computer and Networking Equipment
76	(LOT)
79	Westrup HA 400 Brusch Machine
80	1987 Jacobson Bumper Pull Equip Trailer VIN #1J9DE2H27HF015072
81	American Trailer Sales Co. - Research Trailer VIN #16VGX252XG4086523

S&W Seed Company, 9178 Lakeshore Drive, Nampa, Idaho. 83686-9202
Item	Description
1	6141 (EA) Steel Seed Bins. Approx. 4 ft. X 4 ft. X 4ft. Throughout all warehouses
2	2,500 (EA) Cardboard Seed Bins
159	03 Hyster S50XM Forklift
160	WMS Fork Truck Mount Units
161	WMS Forklift Mounts
162	WMS Units for New Fork Trucks
163	2003POWERNESTER Clamp
164	2009HYSTERH50FT H50FT
165	2009HYSTERS50FT189 S50FT
166	S50FT2009HYSTER189 S50FT
167	2009HYSTERS50FT189 S50FT
168	Hyster
169	Hyster
170	Power Boss
171	Hyster
172	Hyster
173	Trimble GPS
174	Bee Trailer
175	4X4 Utility Vehicle-Kawasaki Mule
176	Case Loader for Tractor
177	Kubota Tractor
178	Scissor Lift
179	Well House Backup Generator
180	Automatic External Defibrillator
181	BM&M Cleaner (Screen Cleaner)
182	Box Washer
183	Bulk Bag Hanger
184	Car Unloader Conveyor
185	Fluke Thermal Imager
186	Formax Cutter FD572
187	Formax Cutter FD572
188	Formax Cutter FD572
189	GPS Recording Equipment
190	Inspection Vibrator
191	Mica Transfer Sys-Bulk Bags to Stg Tank
192	Miller Retrieval Units
193	Truck Scale (#5)
194	Weather Loggers
195	Outdoor Platform Scale (#8)
196	Portable Platform Scale (#2)
197	Portable Scales
198	Band Saw
199	Chain Hoist

200	Metal Shear Hydraulic 52"
201	Plasma Cutter
202	Plasma Cutter
203	Wire Feed Welder
204	Wire Feed Welder
205	Miller Shopmaster Combo
206	National 48" Box and Pan Break
207	Speedflo PT4500 Airless Paint Sprayer
208	Vertical Mill
209	Welder Syncrowave 210 Series Tig/Mig
210	Welder/Compressor/Generator Combo
211	Engine Lathe
212	Press
213	Ironworker
214	Tool Storage Cabinets
215	Misc. Shop Support Small Tools
216	SG30 Seed Germinator
217	(2) Victor 6-Drawer File
218	Binocular Microscopes
219	Clipper Cleaner (Lab Model)
220	Germinator/Growth Chamber
221	Germinator/Growth Chamber
222	Microscope With Illuminator
223	6' Velvet Roll, Lab
224	Chairs-Training Area
225	Furniture-Office Construction
226	HP LaserJet 9050dn-Printer
227	Lanier LD550 C Copier/Printer
228	LaserJet 400 N Printer/Ethernet
229	Partner Plus Phone System
230	Phone System
231	Sharp MX5111N Copier/Printer
232	Typewriter
233	Goodman A/C and Installation
234	Furniture, cubicles, main office
235	Computer
236	Networking Equipment
237	Vee Ditcher, 8 row cultivator, 13' disc
238	Border Plow
239	Lawn Mower
240	Monosem Planter (alfalfa)
241	6 Row Precision Planter
242	Farmall
243	Utility Trailer
244	7' X 18' Flatbed Tilt Deck
245	Trailer Vin #5PTGF3523E1021055

SCHEDULE 2

VEHICLES

Asset #	Class	State	Loc	Equipment Property Description	Purchase/In Service Date	Purchase Price	NBV 9/30/2017
V201303-3	S&W	Idaho	Nampa	2013 Dodge Ram 1500 Laramie Crew Cab VIN#1C6RR7NT1DS619488	3/13/2013	48,756	4,063
13699	Pioneer	Idaho	Nampa	2013 F150 XLT VIN# 1FTFW1ET5DKE25192	12/31/2014	25,000	7,812
13827	Pioneer	Idaho	Nampa	2013 F250 XLT VIN# 1FT7W2BT4DEA70383	12/31/2014	34,000	10,625
14609	Pioneer	Idaho	Nampa	2014 F150 XLT VIN# 1FTFW1EF0EKD28249	12/31/2014	30,000	9,375
61039	Pioneer	Idaho	Nampa	Utility Trailer	12/31/2014	3,500	1,094
61054	Pioneer	Idaho	Nampa	7'x18' Flatbed Tilt Deck	12/31/2014	2,500	781
10008	Pioneer	Idaho	Nampa	2008 F150 XLT VIN# 1FTPW14V68KE07653	12/31/2014	15,000	4,688
08095	Pioneer	Idaho	Nampa	2008 F550 XLT VIN# 1FDAF57Y78ED02598	12/31/2014	17,500	5,469
08454	Pioneer	Idaho	Nampa	2010 F150 XLT VIN# 1FTFX1EV8AKA32734	12/31/2014	15,000	4,688
13455	Pioneer	Idaho	Nampa	2013 F150 XLT VIN# 1FTFW1ET6DKD66430	12/31/2014	25,000	7,812
0382	Pioneer	Idaho	Nampa	2003POWERNESTER Clamp	12/31/2014	1,500	469
09740	Pioneer	Idaho	Nampa	2009HYSTERH50FT H50FT	12/31/2014	15,000	4,688
09737	Pioneer	Idaho	Nampa	2009HYSTERS50FT189 S50Ft	12/31/2014	15,000	4,688
09739	Pioneer	Idaho	Nampa	S50FT2009HYSTER189 S50FT	12/31/2014	15,000	4,688
09738	Pioneer	Idaho	Nampa	2009HYSTERS50FT189 S50FT	12/31/2014	15,000	4,688
8258	Pioneer	Idaho	Nampa	2008 F150 XLT VIN# 1FTPX14V28KC96595	12/31/2014	14,825	4,633
12103	Pioneer	Idaho	Nampa	Hyster	12/31/2014	27,207	8,502
14037	Pioneer	Idaho	Nampa	Hyster	12/31/2014	37,143	11,607
14033	Pioneer	Idaho	Nampa	Power Boss	12/31/2014	31,559	9,862
14036	Pioneer	Idaho	Nampa	Hyster	12/31/2014	37,143	11,607
13186	Pioneer	Idaho	Nampa	Hyster	12/31/2014	31,869	9,959
11654	Pioneer	Idaho	Nampa	Farman	12/31/2014	16,136	5,042
V201502	Pioneer	Idaho	Nampa	2015 Dodge Ram 5500 Vin# 3C7WRNBL1FG611845 Nampa Pioneer	2/28/2015	53,926	25,165
V201503	Pioneer	Idaho	Nampa	Trailer Vin #5PTGF3523E1021055	3/31/2015	10,070	3,566
Adjustment	Pioneer	Idaho	Nampa	2008 F150 VIN: 1FTPX14V28KC96595	12/31/2014	14,825	4,633
Adjustment	Pioneer	Idaho	Nampa	1987 JACOBSEN BUMPER PULL EQUIP TRAILER VIN #1J9DE2H27HF015072	12/31/2014	1,500	469
V201509	S&W	Idaho	Nampa	2012 - Mazda3 Gray Vin #JM1BL1L98C1685959	9/30/2015	12,600	7,350
V201606	Pioneer	Idaho	Nampa	2016 Dodge 3500 Ram Pickup VIN 3C63R3GL3GG290526	6/2/2016	46,629	34,194

SECURITY AGREEMENT

This Security Agreement (this "Agreement") is entered into as of November 30, 2017, by and between S&W SEED COMPANY, a Nevada corporation ("Debtor"), and CONTERRA AGRICULTURAL CAPITAL, LLC, an Iowa limited liability company ("Secured Party").

RECITALS

A. Secured Party has made a loan to Debtor in the original principal amount of Two Million One Hundred Thousand and no/100 Dollars ($2,100,00.00), which is evidenced by, among other things, that certain promissory note by Debtor in favor of Secured Party (as amended, supplemented, or restated, the "Note") as of the date of this Agreement.

B. Debtor desires to create and grant in favor of Secured Party, and Secured Party desires to accept, a security interest in all Collateral (as defined herein) to secure full and timely payment and performance of all Obligations (as defined herein).

NOW, THEREFORE, in consideration of the foregoing Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Debtor and Secured Party (each a "Party" and collectively, the "Parties") agree as follows:

AGREEMENT

1. Grant of Security Interest. The Parties agree that the recitals set forth above are true and correct and are hereby incorporated in and made a part of this Agreement. Debtor hereby pledges and grants to Secured Party a security interest in all Collateral (as defined in Section 2 below) to secure full and timely payment and performance of all Obligations (as defined in Section 3 below).
2. Collateral. For purposes of this Agreement, "Collateral" shall mean and include any and all of Debtor's right, title, or interest, now owned or later acquired by Debtor, wherever located, in or to the following:
1. the machinery and equipment specifically listed on Schedule 1 attached hereto;
2. the vehicles specifically listed on Schedule 2, attached hereto;
3. All proceeds from any of the property described in (a) and (b) above, including without limitation, insurance proceeds, proceeds of any noncommercial tort cause of action or settlement, and all replacements, substitutions, returns, additions, or renewals of same.
3. Obligations. For purposes of this Agreement, "Obligations" shall mean and include any and all debts, obligations, duties, liabilities, and other covenants of Debtor or any other person in favor of Secured Party, now existing or hereafter arising, pursuant to, in connection with, or otherwise related to the Note or this Agreement, as any of the same may be modified from time to time in accordance therewith, including, without limitation:
1. Full and timely reimbursement of all costs and expenses (including reasonable attorneys' fees) incurred by Secured Party for: (i) the collection of any funds or the enforcement of any rights under the Note or this Agreement; or (ii) the protection, maintenance, and enforcement of the security interest created under this Agreement;
2. Any and all obligations and liabilities of Debtor related to the Note or this Agreement provided by law or required pursuant to any other agreement; and

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Conterra Agricultural Capital, LLC
R1028 WI Security Agreement
Page 2 of 5

2. Any and all obligations and liabilities of Debtor or any other person under any amendments, renewals, or restatements of the Note, this Agreement or any other related loan document.
4. Representations and Warranties. Debtor represents and warrants to Secured Party the following:
1. Title. Except as otherwise disclosed to Secured Party in writing prior to this Agreement, Debtor owns the Collateral free and clear of any and all liens, claims and encumbrances, except the security interest created under this Agreement, and no other person has any right, title, claim, license, security interest, lien, or other interest in, against, or to the Collateral;
2. Authority. Debtor has full right, power, and authority to grant a security interest in the Collateral, to execute this Agreement to render the Collateral subject to the security interest created under this Agreement, and to perform all of Debtor's obligations under this Agreement. The individual executing this Agreement on behalf of Debtor has full right, power, and authority to execute this Agreement on behalf of Debtor and to bind Debtor hereunder by their acts and deeds;
3. Information. The following information and all other factual information contained in this Agreement is accurate and complete as of the date hereof and does not fail to include any information necessary to make the same not materially misleading:
1. Debtor is a corporation validly formed and in good standing under the laws of the State of Nevada. Debtor is qualified to transact business in and in good standing under the laws of the State of Wisconsin;
2. Debtor's mailing address is: 106 K Street, Suite 300, Sacramento CA, 95814;
3. All of the Collateral under this Agreement is located in Wisconsin; and
4. Debtor's records concerning the Collateral are located at the following address: 106 K Street, Suite 300, Sacramento CA, 95814; and
4. Security Interest. This Agreement is intended to create a valid security interest in the Collateral and, upon the filing of the appropriate financing statements, a perfected priority security interest in the Collateral in favor of Secured Party. The Debtor has taken all actions necessary to protect and perfect such security interest.
5. Covenants of Debtor. Debtor hereby agrees:
1. To defend the Collateral against all other persons who, at any time, may claim an interest in it;
2. To do all acts that may be necessary to maintain, preserve, and protect the Collateral and not to fail to maintain or renew, and not to abandon, any Collateral;
3. To not sell, encumber, or otherwise dispose of or transfer any Collateral or any right or interest therein without the Secured Party's prior written consent, and to keep the Collateral free of all liens or security interests (other than the security interest created under this Agreement or as disclosed by Debtor to Secured Party in writing prior to this Agreement);

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Conterra Agricultural Capital, LLC
R1028 WI Security Agreement
Page 3 of 5

4. To keep the Collateral insured against loss through theft, fire, or other casualty in an amount and manner approved by the Secured Party, to promptly provide proof of such insurance to Secured Party upon request and to cause to be included in each such insurance policy, as may be requested by Secured Party, endorsements in form and substance satisfactory to Secured Party (i) designating Secured Party as the party to receive payment of any proceeds payable as the result of a loss of all or any part of the Collateral under such policy, and (ii) requiring at least 30 days written notice to Secured Party prior to any modification, termination, or cancellation of any such policy. In all events, Debtor hereby assigns to Secured Party all of its rights, title, and interest in and to any proceeds of any insurance covering the Collateral, whether or not required under this Section 5, and authorizes Secured Party to take such acts and execute such documents as may be required to receive such proceeds. In the event Debtor fails to provide for all insurance coverage as required in this Section 5, Secured Party shall have, in addition to any other remedies available to it, the right to obtain satisfactory insurance coverage on the Collateral on its own behalf and Debtor agrees to reimburse Secured Party upon demand for all costs and expenses incurred in connection therewith;
5. To give Secured Party reasonable access to and opportunity to inspect the Collateral, wherever located;
6. To promptly pay when due all taxes, assessments, charges, encumbrances, and liens now or hereafter imposed upon or affecting any Collateral;
7. To keep and maintain all of the records concerning the Collateral at the address indicated in this Agreement;
8. To keep and maintain the Collateral at the address(es) indicated in this Agreement or at such other locations as may be approved by Secured Party;
9. To notify Secured Party at least ten (10) business days prior to any change in: (i) the location of Debtor's place of business, (ii) Debtor's name, (iii) Debtor's type of business organization, (iv) Debtor's jurisdiction of organization, (v) the location of the Collateral, and (vi) any information set forth in Section 4(c) above;
10. To comply and to maintain compliance with all laws, regulations, and ordinances relating to the possession and control of the Collateral; and
11. To procure, execute, and deliver any endorsements, assignments, and other writings reasonably requested by Secured Party in order to perfect, maintain, and protect Secured Party's security interest in the Collateral and the priority thereof.
6. Authorized Action by Secured Party. Debtor hereby authorizes Secured Party to, at Secured Party's sole option and without any obligation to do so, and regardless of whether the Collateral is in its possession:
1. File or record any document necessary or convenient to perfect, continue, amend or terminate the security interest created under this Agreement, including, without limitation, any financing statements, including amendments, authorized to be filed under the Wisconsin Commercial Code or any comparable law in any jurisdiction. Debtor hereby ratifies any documents previously filed or recorded by Secured Party regarding the Collateral, including, without limitation, any and all previously filed financing statements;

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Conterra Agricultural Capital, LLC
R1028 WI Security Agreement
Page 4 of 5

2. Enter Debtor's property to inspect the Collateral at any reasonable time, provided that Secured Party gives Debtor notice within two business days of any inspection; however, no notice shall be required for any entry by Secured Party in connection with exercise of any available remedy upon breach of this Agreement; and
3. Pay any costs reasonably necessary to obtain, preserve, maintain, defend and enforce the security interest created under this Agreement, and pay any amounts reasonably necessary to discharge encumbrances, maintain adequate insurance coverage and maintain compliance with applicable laws and ordinances affecting the Collateral, including, without limitation, the payment of taxes, assessments, and other charges required by law or contract, reasonable attorney fees and legal expenses and expenses associated with sale, repair or storage of all or any of the Collateral. Debtor agrees to reimburse Secured Party on demand for any such payments made or costs incurred by Secured Party and that such reimbursement obligation shall be a part of the Obligations.
7. Default and Remedies. In the event of any failure or default by Debtor or any other person in the full and timely payment and performance of the Obligations, including, without limitation, any default by Debtor in the payment of any principal or in any other duty, covenant, or obligation under the Note, this Agreement or any other Loan Document (in each case, subject to the applicable cure periods set forth in Section 7 of the Note), Secured Party shall have all the rights and remedies of a secured party under the Wisconsin Commercial Code, including, without limitation, a right to do any one or more of the following without notice or demand:
1. Take (or require Debtor to assemble and deliver to Secured Party at the Project at any reasonably specified time) and retain possession and control of all or any of the Collateral wherever it is located or at whatever location Secured Party deems appropriate upon removal, with or without judicial process;
2. Sell, lease, or otherwise dispose of any or all Collateral by public or private sale or otherwise, on such terms and in such manner as Secured Party deems appropriate to preserve and protect its security interest;
3. Enforce Secured Party's security interest by foreclosure or any other means permitted by law or under the terms of this Agreement; and
4. Recover from Debtor all costs and expenses incurred by Secured Party in exercising any of its rights, powers, or remedies under this Agreement or as permitted by law, including without limitation, attorneys' fees and costs, appraisal costs, and costs of transporting or storing any or all of the Collateral.
8. Notices. Any notice or other communication required or permitted to be given under this Agreement shall be delivered and become effective in accordance with the provisions of Section 12 of the Note.
9. Cumulative Rights. The rights, powers, and remedies of Secured Party under this Agreement are in addition to any rights, powers, and remedies given to Secured Party by virtue of any statute or rule of law, the Note, or any other agreement, all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing Secured Party's security interest in the Collateral.

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Conterra Agricultural Capital, LLC
R1028 WI Security Agreement
Page 5 of 5

10. Waiver. No forbearance or delay by Secured Party in exercising any right, power, or remedy shall constitute a waiver thereof, and every right, power, or remedy of Secured Party shall continue in full force and effect until such right, power, or remedy is specifically waived in a writing executed by Secured Party.
11. Successors and Assigns. This Agreement and all rights and obligations hereunder shall be binding upon Debtor and its successors, assigns, personal representatives, and heirs; and shall inure to the benefit of Secured Party and its respective successors and assigns.
12. Entire Agreement. This Agreement and the Note to which Debtor is a party together constitute the entire agreement between the Parties with regard to the subject matter of this Agreement. There are no other representations, agreements, or understandings, oral or written, between or among the parties relating to the subject matter of this Agreement.
13. No Modifications. No part of this Agreement may be modified, waived, limited, discharged, or terminated except in writing, signed by all Parties and expressly referring to this Agreement and to the provisions so modified or limited.
14. Governing Law and Venue. This Agreement and all amendments relating hereto shall be governed by and construed under the laws of the State of Wisconsin without regard to principles of conflicts of law. Where applicable and except as otherwise defined herein or in the Note, terms used in this Agreement shall have the meanings given them in the Wisconsin Commercial Code.
15. Use of Headings. Any headings contained in this Agreement are for reference purposes only and shall not be considered in construing this Agreement.
16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
17. Severability. If any of the provisions of this Agreement shall be held invalid or unenforceable, this Agreement shall be construed as if not containing those provisions and the rights and obligations of the Parties hereto shall be construed and enforced accordingly.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first set forth in this Agreement.

DEBTOR

S&W SEED COMPANY,
a Nevada corporation

By /s/ Matthew K. Szot

Name: Matthew K. Szot

Title: Chief Financial Officer

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Conterra Agricultural Capital, LLC
R1028 WI Security Agreement
Page 6 of 11

SECURED PARTY

CONTERRA AGRICULTURAL CAPITAL, LLC,
an Iowa limited liability company

By /s/ Paul Erickson

Name: Paul Erickson

Title: President

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S&W Seed Company
Conterra Agricultural Capital, LLC
R1028 WI Security Agreement
Schedule 1

SCHEDULE 1

MACHINERY & EQUIPMENT

S& W Seed Company W 8131 State Hwy 60, Arlington, WI 53911

Item	Description
1	AED Unit
2	Alfalfa GH Exp - Lauer Rolling Benches
3	Alfalfa Harvester
4	Falc Rotary Tiller Model CS4-1800 (72")
5	Flail Mower
6	Flail Mower
7	Forage Harvester
8	Gooseneck Trailer, 83"x32'x4'
9	Hege 80 Plot Planter
10	Irrigation Pump
11	Kuhn Rototiller
12	Landpride FM1488 Flail Mower
13	LD180 Seed Thresher
14	Modine Heater Unit
15	Peristaltic Pump
16	Vicon Fertilizer Spreader
17	Backup Generator
18	Ferris Lawn Mower
19	Ford 1510 Diesel 4WD Tractor
20	Ford 1520 Tractor W/4WD
21	High Power Washer
22	Allegro Field PC
23	Allegro Field PC
24	Allegro Field PC
25	Allegro Field PC
26	Chemical Storage Cabinet
27	Drying Oven
28	Greenhouse Benches
29	Phone System
30	Autoclave
31	Centrifuge, Thermo Scientific Legend XT
32	Compound Microscope
33	Electronic Balance
34	Electronic Scale
35	Incubator
36	Lab Homogenizer
37	Laminar Flow Hood
38	Stereomicroscope System w/Light Source
39	ASC-3 Cleaner, stand & Side Funnel
40	Freeze Dryer
41	Greenhouse Shade Cloth
42	Growth Chamber
43	Homogenizer
44	Portable Dust Collection System
45	Seed Cleaner
46	Seed Thresher
47	Seed Thresher
48	Shaker & Platform
49	M8836 Kubota Tractor with Loader QuantSudio6, a qPCR/Real Time PCR Machine for Gene
50	Introgression and Selections
51	Life Technologies Corp-NanoDrop for QPCR Equipment
52	McFarlane Mfg. Co. Inc. - Landpride APSSP 1596 Snow Pusher

Item	Description
53	Arlington Hardware Co. Inc. - Air Handler with 2 Ton Condensing Unit
54	Landpride APS1548 Seeder Ser# 870271
55	Golf Cart S/N 0330-303268
56	Golf Cart Used
57	Irrigation Handline
58	Irrigation Trailer
59	JD Grain Drill
60	JD Manure Spreader
61	Sprayer 55 Gal.
62	Sprayer 55 Gal.
63	Sprayer 55 Gal.
64	Garden Rototiller Husqvarna
65	Shop Air Compressor DeWalt
66	Diesel Fuel Tank And Cart
67	Small Kubota B2320
68	Massey Ferguson 1726E
69	Transplanter Old Style
70	Transplanter New Style
71	Field Cultivator
72	Deep Tiller
73	Cultipacker
74	Cultipacker
75	Barn Fan
76	Barn Fan
77	18' Trailer
78	Undercutter
79	Row Marker
80	Irrigation Wheel
81	Conviron Growth Chamber
82	Ice Maker
83	IsoTemp Lab Fridge
84	WWR Lab Fridge
85	Small Lab Fridge Revco
86	Manostat Hyprostatic Pump
87	Epson Projector
88	Stake Printer
89	Zebra Printer Stake Lab
90	Zebra Printer Seed Lab
91	Ricoh Copier Scanner
92	Air Compressor Seed Lab 12 Gal.
93	Seed Dryer VWR 1370F
94	Field Sample Fridge
95	Freezer Kenmore 12
96	Thresher Small Black
97	Computer & Networking Equipment (LOT)

S&W Seed Company
Conterra Agricultural Capital, LLC
R1028 WI Security Agreement
Schedule 2

SCHEDULE 2

VEHICLES

Assest #	Class	State	Loc	Equipment Property Description	Purchase/In Service Date	Purchase Price	NBV 9/30/2017
13623	Pioneer	Wisconsin	Arlington	2013 F150 XLT VIN# 1FTFW1ET4DKE19187	12/31/2014	25,000	7,812
10252	Pioneer	Wisconsin	Arlington	2010 F550 XLT VIN# 1FDAW5GR6AEB43085	12/31/2014	27,000	8,438
13016	Pioneer	Wisconsin	Arlington	Farmall	12/31/2014	16,369	5,115
14731	Pioneer	Wisconsin	Arlington	Kubota	12/31/2014	19,612	14,708

Recording Requested By:

Conterra Agricultural Capital, LLC

After Recording Return To:

Conterra Agricultural Capital, LLC
7755 Office Plaza Dr. North, Suite 195
West Des Moines, IA 50266
Sarah Streeter

[Space Above This Line For Recording Data]

DEED OF TRUST

Security Agreement, Assignment of Rents and Fixture Filing

DEFINITIONS

Words used in multiple sections of this document are defined below and other words are defined in certain Sections of this document. Certain rules regarding the usage of words used in this document are also provided in Section 13.

(A) "Security Instrument" means this document, which is dated November 30, 2017, together with all Riders to this document.

(B) "Borrower" is Seed Holding, LLC, a Nevada limited liability company. Borrower is the trustor under this Security Instrument. Borrower's address is 106 K Street, Suite 300, Sacramento, CA 95814.

(C) "Lender" is Conterra Agricultural Capital, LLC. Lender is a limited liability company organized and existing under the laws of Iowa. Lender's address is 7755 Office Plaza Dr. North, Suite 195 West Des Moines, IA 50266. Lender is the beneficiary under this Security Instrument.

(D) "Trustee" is First American Title and Escrow Company.

(E) "Note" means the promissory note signed by Borrower and dated November 30, 2017. The Note states that Borrower owes Lender Ten Million Four Hundred Thousand and 00/100 Dollars (U.S.$10,400,000.00) plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than January 1, 2021.

(F) "Property" means the property that is described below under the heading "Transfer of Rights in the Property."

(G) "Loan" means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note, and all sums due under this Security Instrument, plus interest.

(H) "Riders" mean all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower [check box as applicable]:

California--uniform instrument Form 5000.05 4/23/07

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¨ Irrigation Equipment Rider ¨ Adjustable Rate Rider ¨ Mortgage Insurance Rider	¨ Water Rights Rider ¨ Permitted Prior Encumbrance Rider ý Financial Information and Covenants Rider
ý Other(s): Cross Default Rider, Cross Collateralization Rider

(I) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions.

(J) "Electronic Funds Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers.

(K) "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 4) for: (1) damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property.

(L) "Periodic Payment" means the regularly scheduled amount due for principal and interest under the Note.

(M) "Successor in Interest of Borrower" means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument.

TRANSFER OF RIGHTS IN THE PROPERTY

This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii)the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in the County [Type of Recording Jurisdiction] of Fresno [Name of Recording Jurisdiction]:

SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF.

which currently has the address of :

Agricultural Land and Seed Processing Facilities
Fresno County, California
("Property Address"):

subject only to those matters set forth in the Permitted Prior Encumbrance Rider, if said rider is attached (hereafter "Permitted Prior Encumbrances");

TOGETHER WITH all buildings, improvements, fixtures and permanent plantings located therein or thereon or appurtenant thereto, and all additions, replacements, and improvements hereafter made thereto or placed therein or thereon; all rights-of-way, easements, rents, issues, profits, income, proceeds and general intangibles there from, tenements, hereditaments, remainders, reversions, privileges and appurtenances thereunto belonging, however evidenced which are used or enjoyed in connection with the real property now or hereafter owned or belonging to the same or which hereafter may be acquired and so used or enjoyed;

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TOGETHER WITH water and water rights now owned or hereafter acquired by Borrower and howsoever evidenced, including but not limited to any water rights specifically described in the Water Rights Rider if said rider is attached hereto, whether such water and water rights are riparian, appropriative or otherwise and whether or not appurtenant to the real property, along with all ditch and ditch rights and any shares of stock, licenses, permits and contracts evidencing such water or ditch rights, and all wells, reservoirs, dams, embankments or fixtures relating thereto;

TOGETHER WITH all personal property, including all windmills, pumps, irrigation equipment, motors, engines, and devices of every kind now or hereafter used for or in connection with the irrigation of the real property, or for stock watering or domestic purposes thereon, which are owned by Borrower and which are located on the real property in Fresno County, California, described above together with all additional accessions, replacements, improvements, repairs and substitutions to said property and the proceeds thereof and all other fixtures now or hereafter located upon the real property, all of which are declared to be appurtenant to said real property, or incident to the ownership thereof, or used in connection therewith;

TOGETHER WITH all judgments, awards of damages, settlements and payments or security (i) hereafter made as a result of or in lieu of any taking of all or any part of the real property under the power of eminent domain or for any damage to the real property and/or the improvements located thereon, or any part thereof, and (ii) hereafter made for any damage to the real property and/or the improvements located thereon, or any part thereof resulting from exercise of or attempted exercise of mining rights or claims, however reserved or asserted, and resulting from the disturbance of any of the surface of the real property. Borrower does hereby covenant and agree that Borrower will not give such consent as may be required of the owner for mining or other surface disturbance by the terms of any patent, deed, statute, law or otherwise, without the prior written consent of Lender;

TOGETHER WITH all proceeds of and any unearned premiums on any insurance policies covering the real property and/or the improvements located thereon, including, without limitation, the right to receive and apply the proceeds of any insurance judgments, or settlements made in lieu thereof, for damage to the real property and/or the improvements located thereon or the indebtedness secured thereby;

TOGETHER WITH all contract rights, chattel paper, documents, accounts and general intangibles, rights to performance, entitlement to payment in cash or in kind, or any other benefits under any current or future governmental program which pertain to the real property, whether now or hereafter existing or acquired;

TOGETHER WITH all cash and noncash proceeds of the conversion, voluntary or involuntary, of any of the foregoing;

TOGETHER WITH any and all of Borrower's right, title, and/or interest in any and all system memberships and/or ownership certificates in any non-municipal water sewer systems now or in the future serving said property.

All replacements and additions shall also be covered by this Security Instrument.

All of the foregoing is referred to in this Security Instrument as the "Property."

For clarity, notwithstanding the foregoing or any other provision of this Security Instrument, the Property shall specifically exclude (a) all Collateral as defined in the Security Agreement, dated November 30, 2017, by and between Lender and S&W Seed Company granting Lender a security interest in such Collateral located in California and securing that certain promissory note entered into by S&W Seed Company in the amount of $2,100,00.00 in favor of Lender (Loan # R1028) and (b) all seed or other products produced, processed or stored on the Property.

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BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record and specifically those permitted prior encumbrances, if any, set forth in the Permitted Prior Encumbrances Rider if said rider is attached to this Security Instrument. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.

THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property, fixtures, and certain personal property.

UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:

1. Payment of Principal, Interest, Prepayment Charges, Yield Maintenance Premiums and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any yield maintenance premiums, any prepayment charges and late charges due under the Note. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or (d) Electronic Funds Transfer.

Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 12. Lender may return any payment or partial payment if the payment or partial payment is insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payment in the future, but Lender is not obligated to apply such payments at the time such payments are accepted Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument.

2. Application of Payments or Proceeds. Unless required by Applicable Law, payments will be applied first to accrued unpaid interest, then second to principal, third to advances under this Security Instrument, and finally to late charges. Such payments shall be applied to each Periodic Payment in the order in which it became due.

If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note.

Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount, of the Periodic Payments.

3. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any.

Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 3.

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Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan.

4. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower.

If Borrower fails to maintain any of the coverages described above, such failure shall constitute a default under the terms of this Security Instrument and the Loan. Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, Ward or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 4 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee.

In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2.

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If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 25 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due.

5. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 4 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration.

Borrower will operate the Property in a good and workmanlike manner and in accordance with all Applicable Law and will pay all fees and charges of any kind in connection therewith. Borrower will use good farming and animal husbandry practices.

Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause.

6. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan.

7. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding, (d) perform any farming operations related to the planting, growing, maintenance, and harvesting of crops located on the Property, and (e) perform any ranching operations related to any animals located on the Property. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 7, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 7. Lender may perform these or any other actions it deems necessary in Lender's sole discretion to preserve the value of the Property, and/or assign to others the right to do same on behalf of Lender. Lender may make advances under this security instrument or other instrument providing security for the Note, to protect the Lender's interest in this security instrument or other instrument providing security for the Note from loss of value or damage. Any money so advanced (including reasonable costs of recovery and attorneys' fees) plus interest at the default rate indicated in the Note shall become an obligation due and owing under the terms of the Note immediately upon the date advanced by Lender and is an obligation of the Borrower secured by the security instrument or other instrument providing security for the Note.

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Any amounts disbursed by Lender under this Section 7 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. Borrower shall not surrender the leasehold estate and interests herein conveyed or terminate or cancel the ground lease. Borrower shall not, without the express written consent of Lender, alter or amend the ground lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing.

8. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender.

If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2.

In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due.

If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party" means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds.

Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration has occurred, reinstate as provided in Section 16, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender,

All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2.

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9. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy.

10. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent.

Subject to the provisions of Section 15, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 17) and benefit the successors and assigns of Lender.

11. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys' fees, property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law.

If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge.

12. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be 106 K Street, Suite 300, Sacramento, CA 95814, unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument.

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13. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision.

As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discretion without any obligation to take any action.

14. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument.

15. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 15, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser.

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.

If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 12 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

16. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 15.

17. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.

Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 12) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 25 and the notice of acceleration given to Borrower pursuant to Section 15 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 17.

California--uniform instrument Form 5000.05 4/23/07

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18. Hazardous Substances. As used in this Section 18: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d) an "Environmental Condition" means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup.

Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Ha7_ardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property (including, but not limited to, hazardous substances in consumer products).

Borrower shall promptly give Lender written notice of (a) any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release of a Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup. Borrower agrees to indemnify and hold Lender free and harmless from and against all loss, costs (including attorneys' fees and costs), damage (including consequential damages), and expenses Lender may sustain by reason of the assertion against Lender by any third-party of any claim in connection with Hazardous Substances on, in or affecting the Property. Borrower further agrees that Lender shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any claims related to Hazardous Substances on, in or affecting the Property, and shall pay any such attorney fees and expenses Lender incurs in connection therewith.

19. Additional Property Subject To The Security instrument. This Security Instrument also constitutes a security agreement within the meaning of the Uniform Commercial Code as adopted in the State of California (the "UCC"). In addition to the Property described in the Security Instrument, the following items now or hereafter attached to the Property to the extent they are fixtures are added to the Property description, and shall also constitute the Property covered by the Security Instrument: building materials, appliances and goods of every nature whatsoever now or hereafter located in, on, or used, or intended to be used in connection with the Property. including, but not limited to. those for the purposes of supplying or distributing heating, cooling, electricity, gas, water, air and light, fire prevention and extinguishing apparatus, security and access control apparatus, plumbing, bath tubs, water heaters, water closets, sinks. ranges, stoves, refrigerators, dishwashers, disposals, washers, dryers, awnings, storm windows, storm doors, screens, blinds, shades, curtains and curtain rods, attached mirrors, cabinets, paneling, attached floor coverings, irrigation pipes and pumps, livestock fencing and pens, windmills and related equipment and pumps and specifically: All water and water rights now owned or hereafter acquired by Debtor and howsoever evidenced, whether such water and water rights are riparian, appropriative or otherwise and whether or not appurtenant to the real estate described herein, all ditch/pond and ditch/pond rights and any shares of stock, licenses, permits and contracts evidencing such water or ditch rights, and all wells, reservoirs, dams, embankments or fixtures relating thereto, along with all replacements, substitutions, accessions thereto and proceeds derived therefrom.

California--uniform instrument Form 5000.05 4/23/07

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All irrigation equipment of every kind and nature, including but not limited to center irrigation pivots, pumps, pvc pipe, sprinklers, motors, well equipment, pumps and power units, now owned or hereafter acquired by Debtor and now or hereafter located and situated on the real estate described herein, along with all replacements, substitutions, accessions thereto and proceeds derived therefrom.

All Seed Processing Equipment., all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by the Security Instrument. All of the foregoing together with the Property described in the Security Instrument (or the leasehold estate if the Security Instrument is on a leasehold) are referred to in this Security Instrument as the "Property."

20. Fixture Filing. This Security Instrument constitutes a "fixture filing" for the purposes of the UCC against all of the Property which is or is to become fixtures per the UCC.

21. Use of Property; Compliance With Law. Borrower shall not seek, agree to or make a change in the use of the Property or its zoning classification, unless Lender has agreed in writing to the change. Borrower shall comply with all laws, ordinances, regulations and requirements of any governmental body applicable to the Property.

22. Assignment of Leases. Upon Lender's request after default, Borrower shall assign to Lender all leases of the Property and all security deposits made in connection with leases of the Property. Upon the assignment, Lender shall have the right to modify, extend or terminate the existing leases and to execute new leases, in Lender's sole discretion. As used in this paragraph, the word "lease" shall mean "sublease" if the Security Instrument is on a leasehold.

23. Assignment of Rents; Appointment of Receiver; Lender In Possession. Specifically excepting any receipts or revenues Borrower receives from the sale of seed or other products produced, processed or stored at Borrower facilities on the Property, Borrower absolutely and unconditionally assigns and transfers to Lender all the rents and revenues ("Rents") of the Property, regardless of to whom the Rents of the Property are payable. Borrower authorizes Lender or Lender's agents to collect the Rents, and agrees that each tenant of the Property shall pay the Rents to Lender or Lender's agents. However, Borrower shall receive the Rents until (i) Lender has given Borrower notice of default pursuant to Sections 12 and 25 of the Security Instrument and (ii) Lender has given notice to the tenant(s) that the Rents are to be paid to Lender or Lender's agent. This assignment of Rents constitutes an absolute assignment and not an assignment for additional security only.

If Lender gives notices of default to Borrower: (i) all Rents received by Borrower shall be held by Borrower as trustee for the benefit of Lender only, to be applied to the sums secured by the Security Instrument; (ii) Lender shall be entitled to collect and receive all of the Rents of the Property; (iii) Borrower agrees that each tenant of the Property shall pay all Rents due and unpaid to Lender or Lender's agents upon Lender's written demand to the tenant; (iv) unless applicable law provides otherwise, all Rents collected by Lender or Lender's agents shall be applied first to the costs of taking control of and managing the Property and collecting the Rents, including, but not limited to, attorneys' fees, receiver's fees, premiums on receiver's bonds, repair and maintenance costs, insurance premiums, taxes, assessments and other charges on the Property, and then to the sums secured by the Security Instrument; (v) Lender, Lender's agents or any judicially appointed receiver shall be liable to account for only those Rents actually received; and (vi) Lender shall be entitled to have a receiver appointed to take possession of and manage the Property and collect the Rents and profits derived from the Property without any showing as to the inadequacy of the Property as security.

If the Rents of the Property are not sufficient to cover the costs of taking control of and managing the Property and of collecting the Rents any funds expended by Lender for such purposes shall become indebtedness of Borrower to Lender secured by the Security Instrument pursuant to Section 7 of the Security Instrument.

California--uniform instrument Form 5000.05 4/23/07

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Borrower represents and warrants that Borrower has not executed any prior assignment of the Rents and has not performed, and will not perform, any act that would prevent Lender from exercising its rights under this paragraph.

Lender, or Lender's agents or a judicially appointed receiver, shall not be required to enter upon, take control of or maintain the Property before or after giving notice of default to Borrower. However, Lender, or Lender's agents or a judicially appointed receiver, may do so at any time when a default occurs. Any application of Rents shall not cure or waive any default or invalidate any other right or remedy of Lender. This assignment of Rents of the Property shall terminate when all the sums secured by the Security Instrument are paid in full.

24. Cross-Default Provision. Borrower's default or breach under any note or agreement in which Lender has an interest shall be a breach under the Security Instrument and Lender may invoke any of the remedies permitted by the Security Instrument.

NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows:

25. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 15 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 25, including, but not limited to, reasonable attorneys' fees and costs of title evidence.

If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of Lender's election to cause the Property to he sold. Trustee shall cause this notice to be recorded in each county in which any part of the Property is located. Lender or Trustee shall mail copies of the notice as prescribed by Applicable Law to Borrower and to the other persons prescribed by Applicable Law. Trustee shall give public notice of sale to the persons and in the manner prescribed by Applicable Law. After the time required by Applicable Law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in any order Trustee determines. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or its designee may purchase the Property at any sale.

Trustee shall deliver to the purchaser Trustee's deed conveying the Property without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all expenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it.

26. Reconveyance. Upon payment of all sums secured by this Security Instrument, Lender shall request Trustee to reconvey the Property and shall surrender this Security Instrument and all notes evidencing debt secured by this Security Instrument to Trustee. Trustee shall reconvey the Property without warranty to the person or persons legally entitled to it. Lender may charge such person or persons a reasonable fee for reconveying the Property, but only if the fee is paid to a third party (such as the Trustee) for services rendered and the charging of the fee is permitted under Applicable Law. If the fee charged does not exceed the fee set by Applicable Law, the fee is conclusively presumed to be reasonable.

California--uniform instrument Form 5000.05 4/23/07

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27. Substitute Trustee. Lender, at its option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder of the county in which the Property is located. The instrument shall contain the name of the original Lender, Trustee and Borrower, the book and page where this Security Instrument is recorded and the name and address of the successor trustee. Without conveyance of the Property, the successor trustee shall succeed to all the title, powers and duties conferred upon the Trustee herein and by Applicable Law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution.

28. Statement of Obligation Fee. Lender may collect a fee not to exceed the maximum amount permitted by Applicable Law for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it.

Seed Holding, LLC, a Nevada limited liability
company

S&W Seed Company, a Nevada corporation, its Sole
Member

;/s/ Matthew K. Szot 11/30/17
Signature         Date

Matthew K. Szot, Executive Vice President of
Finance and Administration and CFO                [Sign Originals Only]

California--uniform instrument Form 5000.05 4/23/07

13

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
               )
COUNTY OF        San Diego )

On this 30^th day of    November   , 2017, before me,    Candelario Resendez   , personally appeared Matthew K. Szot, Executive Vice President of Finance and Administration and CFO of S&W Seed Company, Sole Member of Seed Holding, LLC, on behalf of said corporation, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the entities upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

   Candelario Resendez
Signature
(Seal)

California--uniform instrument Form 5000.05 4/23/07

14

LEGAL DESCRIPTION

Real property in the unincorporated area of the County of Fresno, State of California, described as follows:

A PORTION OF THAT PARCEL OF LAND GRANTED IN THAT DOCUMENT RECORDED JANUARY 5, 2005, AS DOCUMENT NO. 2005-0003134, OF FRESNO COUNTY RECORDS, LOCATED IN THE SOUTHWEST QUARTER OF SECTION 17, TOWNSHIP 18 SOUTH, RANGE 17 EAST, MOUNT DIABLO BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHWEST CORNER OF PARCEL 1 OF PARCEL MAP NO. 7942, RECORDED IN BOOK 66 OF PARCEL MAPS, AT PAGE 21, OF FRESNO COUNTY RECORDS, LOCATED IN THE NORTHWEST QUARTER OF SECTION 17, TOWNSHIP 18 SOUTH, RANGE 17 EAST, MOUNT DIABLO BASE AND MERIDIAN, IN THE COUNTY OF FRESNO, STATE OF CALIFORNIA; THENCE NORTH 88° 43' 48" EAST ALONG THE SOUTH LINE OF SAID PARCEL 1, A DISTANCE OF 291.46 FEET; THENCE SOUTH 01° 12' 28" EAST ALONG SAID SOUTH LINE, 272.85 FEET; THENCE NORTH 89° 03' 13" EAST ALONG SAID SOUTH LINE, 172.72 FEET, TO THE SOUTHEAST CORNER OF SAID PARCEL 1; THENCE CONTINUING NORTH 89° 03' 13" EAST, 43.58 FEET; THENCE SOUTH 00° 56' 47" EAST, 35.73 FEET; THENCE NORTH 89° 03' 13" EAST, 23.00 FEET; THENCE SOUTH 01° 48' 15" EAST, 27730 FEET; THENCE SOUTH 88° 55' 15" WEST, 7.00 FEET; THENCE SOUTH 01° 48' 15" EAST, 64.19 FEET; THENCE SOUTH 48° 56' 59" WEST, 31.65 FEET; THENCE SOUTH 88° 55' 15" WEST, 57.95 FEET; THENCE SOUTH 01° 08' 03" EAST, 161.40 FEET; THENCE SOUTH 88° 55' 15" WEST, 57.95 FEET; THENCE SOUTH 01° 08' 03" EAST, 187.50 FEET; THENCE SOUTH 88° 55' 15" WEST, 96.00 FEET, TO THE EASTERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 7942; THENCE NORTH 01° 08' 03" WEST ALONG SAID EASTERLY LINE, 430.01 FEET, TO THE NORTHEAST CORNER OF SAID PARCEL 4; THENCE NORTH 88° 36' 41" WEST ALONG THE NORTH LINE OF SAID PARCEL 4, A DISTANCE OF 300.62 FEET, TO THE NORTHWEST CORNER OF SAID PARCEL 4 AND THE WEST LINE OF SOUTHWEST QUARTER OF SAID SECTION 17; THENCE NORTH 00° 17' 10" WEST ALONG SAID WEST LINE, 575.95 FEET, TO THE POINT OF BEGINNING;

THIS LEGAL DESCRIPTION IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE APPROVING A LOT LINE ADJUSTMENT NO. PLA 15-16(A), RECORDED AUGUST 17, 2017 AS INSTRUMENT NO. 17-102967 OF OFFICIAL RECORDS.

EXCEPTING `THEREFROM ALL OIL, GAS, ASPHALTUM AND OTHER HYDROCARBON SUBSTANCES AND MINERALS UNDERLYING SAID LAND, AS RESERVED IN THE DEED FROM LAND CORPORATION CO., LTD., A CORPORATION, RECORDED NOVEMBER 2, 1938, IN BOOK 1711, PAGE 198 OF OFFICIAL RECORDS.

(APN: 060-100-80-S AND A PORTION OF APN: 060-100-79-S)

CROSS COLLATERALIZATION RIDER

Loan # R1036

THIS CROSS COLLATERALIZATION RIDER is made this November 30, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date, given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities
Fresno County, CA
[Property Address]

In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that on the date hereof the following other loans have been entered into:

Borrowers/Co-Signers' Names	Date	Loan Amount/Loan No.
S&W Seed Company	11/30/2017	$2,100,000.00/R1028

each of which is evidenced by a separate promissory note (the "Other Notes"), and each of which is secured by a separate Security Agreement (the "Other Security Instruments"). It is agreed that in addition to Borrower's Note, this Security Instrument secures the obligations, debts, and liabilities evidenced by the Other Notes and Other Security Instruments referenced herein, plus interest thereon, which is payable by Grantor to Lender.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Cross Collateralization Rider.

Cross-Collaterization Rider

1

Seed Holding, LLC, a Nevada limited liability
company

S&W Seed Company, a Nevada corporation, its
Sole Member

   /s/ Matthew K. Szot 11/30/17

Signature Date

Matthew K. Szot, Executive Vice President of
Finance and Administration and CFO [Sign Originals Only]

Cross-Collaterization Rider

2

CROSS DEFAULT RIDER

Loan # R1036

THIS CROSS DEFAULT RIDER is made this November 30, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date, given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities
Fresno County, CA
[Property Address]

In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that on the date hereof the following other loans have been entered into:

Borrowers/Co-Signers' Names	Date	Loan Amount/Loan No.
S&W Seed Company	11/30/2017	$2,100,000.00/R1028

each of which is evidenced by a separate promissory note (the "Other Notes"), and each of which is secured by a separate Security Agreement (the "Other Security Instruments"). It is agreed that any default under this Security Instrument or this Note shall be deemed a default under the Other Notes and Other Security Instruments; and any default under any or all of the Other Notes or Other Security Instruments shall be deemed to be a default under this Note and this Security Instrument.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Cross Collateralization Rider.

MULTISTATE CROSS DEFAULT RIDER

1

Seed Holding, LLC, a Nevada limited liability
company

S&W Seed Company, a Nevada corporation, its
Sole Member

   /s/ Matthew K. Szot 11/30/17

Signature Date

Matthew K. Szot, Executive Vice President of
Finance and Administration and CFO [Sign Originals Only]

MULTISTATE CROSS DEFAULT RIDER

2

FINANCIAL INFORMATION AND COVENANTS RIDER

Loan # R1036

THIS FINANCIAL INFORMATION AND COVENANTS RIDER (this "Rider") is made this Thirtieth day of November, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities
Fresno County, CA
[Property Address]

FINANCIAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that Borrower will prepare and maintain Borrower's financial records using consistently applied generally accepted accounting principles then in effect. Borrower will provide Lender with financial information in a form reasonably acceptable to Lender and under the following terms:

(If "X"ed the following terms are agreed to.)

ý Frequency. Annually, Borrower will provide to Lender Borrower's financial statements, tax returns, annual internal audit reports or those prepared by independent accountants within 90 days after the close of each fiscal year. Any annual financial statements that Borrower provides will be reviewed statements.

¨ Interim Financial Reports. Borrower will provide Lender with interim financial reports on a basis, and within 0 days after the close of this business period. Interim financial statements will be statements.

¨ Requested Information. Borrower will provide Lender with any other information about Borrower's operations, financial affairs and condition within 0 days after Lender's request.

¨ Leverage Ratio. Borrower will maintain at all times a ratio of total liabilities to tangible net worth, determined under consistently applied generally accepted accounting principles, of 0.000 to 1.0 (Total Liabilities to Tangible Net Worth Ratio) or less.

¨ Minimum Tangible Net Worth. Borrower will maintain at all times a total tangible net worth, determined

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER--
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

1

under consistently applied generally accepted accounting principles, of $0.00 (Minimum Tangible Net Worth) or more. Tangible net worth is the amount by which total assets exceed total liabilities. For determining tangible net worth, total assets will exclude all intangible assets, including without limitation goodwill, patents, trademarks, trade names, copyrights, and franchises, and will also exclude any accounts receivable that do not provide for a repayment schedule.

¨ Minimum Current Ratio. Borrower will maintain at all times a ratio of current assets to current liabilities, determined under consistently applied generally accepted accounting principles, of 0 to 1.0 (Minimum Current Ratio) or more.

¨ Minimum Working Capital. Borrower will maintain at all times a working capital, determined under consistently applied generally accepted accounting principles by subtracting current liabilities from current assets, of $0.00 (Minimum Working Capital) or more. For this determination, current assets exclude (Excluded Current Assets.). Likewise, current liabilities include (1) all obligations payable on demand or within on year after the date on which the determination is made, and (2) final maturities and sinking fund payments required to be made within one year after the date on which the determination is made, but exclude all liabilities or obligations that Borrower may renew or extend to a date more than one year from the date of this determination.

ý EBITDA. Adjusted EBITDA/Total Annual Debt Payments no less than 1.30x (measured annually on Borrower's fiscal year basis and calculated based on Borrower's financial statements delivered 90 days after fiscal year end).

ý Debt to Asset Ratio. Debt to Asset Ratio shall not be greater than 60% (measured annually as of the end of Borrower's fiscal year and calculated based Borrower's financial statements delivered 90 days after fiscal year end).

Capitalized terms used, but not defined, in this Rider have the respective meanings set forth in annex A hereto.
All determinations of Borrower's compliance with the foregoing covenants will be made exclusively by reference to Borrower's financial statements delivered pursuant hereto.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Financial Information and Covenants Rider.

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER--
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

2

S&W Seed Company, a Nevada corporation

   /s/ Matthew K. Szot 11/30/17

Signature Date

Matthew K. Szot, Chief Financial Officer [Sign Originals Only]

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER--
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

3

ANNEX A

As used in this Rider, the following terms have the following meanings:

"Adjusted EBITDA" means, for any fiscal year of Borrower, the result of (a) Borrower's Consolidated Net Earnings for such fiscal year plus, without duplication, the aggregate amounts deducted in determining such Consolidated Net Earnings in respect of (i) Consolidated Interest Expense, (ii) Consolidated Income Tax Expense, (iii) Consolidated Depreciation and Amortization Charges, (iv) non- recurring separation charges, (v) non-recurring reserve for uncollectible sublease and stand establishment receivables, (vi) non-cash expenses incurred in connection with stock-based compensation, (vii) non-rash expenses incurred in connection with amortization of debt discount, and (viii) non-cash expenses incurred prior to December 31, 2017 in connection with derivative warrant liability; minus (b) to the extent included in Consolidated Net Earnings for such period, non-cash gains incurred prior to December 31, 2017 in connection with derivative warrant liability.

"Consolidated" means the resultant consolidation of the financial statements of Borrower and its subsidiaries in accordance with generally accepted accounting principles in the United States, including principles of consolidation consistent with those applied in preparation of the financial statements delivered by Borrower pursuant to this Rider.

"Consolidated Depreciation and Amortization Charges" means, for any fiscal year of Borrower, the aggregate of all depreciation and amortization charges for fixed assets, leasehold improvements and general intangibles (specifically including goodwill) of Borrower for such period, as determined on a Consolidated basis.

"Consolidated Income Tax Expense" means, for any fiscal year of Borrower, all provisions for taxes based on the gross or net income of Borrower (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto), as determined on a Consolidated basis.

"Consolidated Indebtedness" means, as of the end of any fiscal year of Borrower, the total Indebtedness of Borrower as of such date, as determined on a Consolidated basis.

"Consolidated Interest Expense" means, for any fiscal year of Borrower, the interest expense of Borrower for such fiscal year, as determined on a Consolidated basis.

"Consolidated Net Earnings" means, for any fiscal year of Borrower, the net income (loss) of Borrower for such fiscal year, as determined on a Consolidate basis.

"Consolidated Total Assets" means, as of the end of any fiscal year of Borrower, the total assets of Borrower as of such date, as determined on a Consolidated basis.

"Debt to Asset Ratio" means, as of the end of any fiscal year of Borrower, the ratio of (a) Consolidated Indebtedness to (b) Consolidated Total Assets.

"Indebtedness" means, without duplication, (a) all obligations to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (c) all obligations under conditional sales or other title retention agreements, (d) all obligations (contingent or otherwise) under any letter of credit or banker's acceptance, (e) all net obligations under any currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, (f) all synthetic leases, (g) all capitalized lease obligations, (h) all obligations of Borrower with respect to asset securitization financing programs, (i) all obligations to advance funds to, or to purchase assets, property or services from, any other person or entity in order to maintain the financial condition of such person or entity, (j) all indebtedness of the types referred to in subparts (a) through (I) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which Borrower is a general partner or joint venturer, unless such indebtedness is expressly made non-recourse to Borrower, (k) any other transaction (including forward sale or purchase agreements) having the commercial effect of a borrowing of money entered into by Borrower to finance its operations or capital requirements, and (I) any guaranty of any obligation described in subparts (a) through (k) above.

"Total Annual Debt Payments" means, for any fiscal year of Borrower, the aggregate, without duplication, of (a) Borrower's Consolidated Interest Expense paid in cash for such fiscal year, and (6) Borrower's principal payments on Consolidated Indebtedness paid in cash for such fiscal year, excluding, in each case, (i) payments of principal under the Credit and Security Agreement, dated as of September 22, 2015, between Borrower and KeyBank National Association, as amended from time to time, or any replacement facility therefore, (ii) payments of principal under any working capital line of credit maintained by Borrower's Seed Genetics International Pty Ltd subsidiary and (iii) payments of principal that certain Promissory Note dated December 31, 2014 made by Borrower in favor and for the benefit of Pioneer Hi-Bred International, inc., as amended from time to time,

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER--
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

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After Recording Return To:
Conterra Agricultural Capital, LLC
7755 Office Plaza Dr. North, Suite 195
West Des Moines, IA 50266
Sarah Streeter

[Space Above This Line For Recording Data]

DEED OF TRUST

Security Agreement, Assignment of Rents and Fixture Filing

DEFINITIONS

Words used in multiple sections of this document are defined below and other words are defined in certain Sections of this document. Certain rules regarding the usage of words used in this document are also provided in Section 13.

(A) "Security Instrument" means this document, which is dated November 30, 2017, together with all Riders to this document.

(B) "Borrower" is S&W Seed Company, a Nevada corporation. Borrower is the trustor under this Security Instrument.

(C) "Lender" is Conterra Agricultural Capital, LLC. Lender is a limited liability company organized and existing under the laws of Iowa. Lender's address is 7755 Office Plaza Dr. North, Suite 195 West Des Moines, IA 50266. Lender is the beneficiary under this Security Instrument.

(D) "Trustee" is First American Title and Escrow Company.

(E) "Note" means the promissory note signed by Borrower and dated November 30, 2017. The Note states that Borrower owes Lender Ten Million Four Hundred Thousand and 00/100 Dollars (U.S.$10,400,000.00) plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than January 1, 2021.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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(F) "Property" means the property that is described below under the heading "Transfer of Rights in the Property."

(G) "Loan" means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note, and all sums due under this Security Instrument, plus interest.

(H) "Riders" mean all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower [cheek box as applicable]:

¨ Irrigation Equipment Rider ¨ Water Rights Rider

¨ Adjustable Rate Rider ¨ Permitted Prior Encumbrance Rider

¨ Mortgage Insurance Rider x Financial Information and Covenants Rider

x Other(s): Cross Default Rider, Cross
Collateralization Rider

(I) "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions.

(J) "Electronic Funds Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers.

(K) "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 4) for: (i) damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property.

(L) "Periodic Payment" means the regularly scheduled amount due for principal and interest under the Note.

(M) "Successor in Interest of Borrower" means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument.

TRANSFER OF RIGHTS IN THE PROPERTY

This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in the County [Type of Recording Jurisdiction] of Canyon [Name of Recording Jurisdiction]:

SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF.

which currently has the address of

Agricultural Land and Seed Processing Facilities
Canyon County, ID
("Property Address"):

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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subject only to those matters set forth in the Permitted Prior Encumbrance Rider, if said rider is attached (hereafter "Permitted Prior Encumbrances");

TOGETHER WITH all buildings, improvements, fixtures and permanent plantings located therein or thereon or appurtenant thereto, and all additions, replacements, and improvements hereafter made thereto or placed therein or thereon; all rights-of-way, easements, rents, issues, profits, income, proceeds and general intangibles there from, tenements, hereditaments, remainders, reversions, privileges and appurtenances thereunto belonging, however evidenced which are used or enjoyed in connection with the real property now or hereafter owned or belonging to the same or which hereafter may be acquired and so used or enjoyed;

TOGETHER WITH all water and water rights now owned or hereafter acquired by Borrower and howsoever evidenced, including but not limited to any water rights specifically described in the Water Rights Rider if said rider is attached hereto, whether such water and water rights are riparian, appropriative or otherwise and whether or not appurtenant to the real property, along with all ditch and ditch rights and any shares of stock, licenses, permits and contracts evidencing such water or ditch rights, and all wells, reservoirs, dams, embankments or fixtures relating thereto;

TOGETHER WITH all personal property, including all windmills, pumps, irrigation equipment, motors, engines, and devices of every kind now or hereafter used for or in connection with the irrigation of the real property, or for stock watering or domestic purposes thereon, which are owned by Borrower and which are located on the real property in Canyon County, ID, described above together with all additional accessions, replacements, improvements, repairs and substitutions to said property and the proceeds thereof and all other fixtures now or hereafter located upon the real property, all of which are declared to be appurtenant to said real property, or incident to the ownership thereof, or used in connection therewith;

TOGETHER WITH all judgments, awards of damages, settlements and payments or security (1) hereafter made as a result of or in lieu of any taking of all or any part of the real property under the power of eminent domain or for any damage to the real property and/or the improvements located thereon, or any part thereof, and (ii) hereafter made for any damage to the real property and/or the improvements located thereon, or any part thereof resulting from exercise of or attempted exercise of mining rights or claims, however reserved or asserted, and resulting from the disturbance of any of the surface of the real property. Borrower does hereby covenant and agree that Borrower will not give such consent as may be required of the owner for mining or other surface disturbance by the terms of any patent, deed, statute, law or otherwise, without the prior written consent of Lender;

TOGETHER WITH all proceeds of and any unearned premiums on any insurance policies covering the real property and/or the improvements located thereon, including, without limitation, the right to receive and apply the proceeds of any insurance judgments, or settlements made in lieu thereof, for damage to the real property and/or the improvements located thereon or the indebtedness secured thereby;

TOGETHER WITH all contract rights, chattel paper, documents, accounts and general intangibles, rights to performance, entitlement to payment in cash or in kind, or any other benefits under any current or future governmental program which pertain to the real property, whether now or hereafter existing or acquired;

TOGETHER WITH all cash and noncash proceeds of the conversion, voluntary or involuntary, of any of the foregoing;

TOGETHER WITH any and all of Borrower's right, title, and/or interest in any and all system memberships and/or ownership certificates in any non-municipal water sewer systems now or in the future serving said property.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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All replacements and additions shall also be covered by this Security Instrument.

All of the foregoing is referred to in this Security Instrument as the "Property."

For clarity, notwithstanding the foregoing or any other provision of this Security Instrument, the Property shall specifically exclude (a) all Collateral as defined in the Security Agreement, dated November 30, 2017, by and between Lender and S&W Seed Company granting Lender a security interest in such Collateral located in Idaho and securing that certain promissory note entered into by S&W Seed Company in the amount of $2,100,00.00 in favor of Lender (Loan # R1028) and (b) all seed or other products produced, processed or stored on the Property.

BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record and specifically those permitted prior encumbrances, if any, set forth in the Permitted Prior Encumbrances Rider if said rider is attached to this Security Instrument. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.

THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property, fixtures, and certain personal property.

UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:

1. Payment of Principal, Interest, Prepayment Charges, Yield Maintenance Premiums and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any yield maintenance premiums, any prepayment charges and late charges due under the Note. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or (d) Electronic Funds Transfer.

Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 12. Lender may return any payment or partial payment if the payment or partial payment is insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payment in the future, but Lender is not obligated to apply such payments at the time such payments are accepted Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument.

2. Application of Payments or Proceeds. Unless required by Applicable Law, payments will be applied first to accrued unpaid interest, then second to principal, third to advances under this Security Instrument, and finally to late charges. Such payments shall be applied to each Periodic Payment in the order in which it became due.

If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount, of the Periodic Payments.

3. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any.

Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument, If Lender determines that any part of the Property is subject to a lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 3.

Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan.

4. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either: (a) a one-time charge for flood zone determination, certification and tracking services; or (b) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower.

If Borrower fails to maintain any of the coverages described above, such failure shall constitute a default under the terms of this Security Instrument and the Loan. Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 4 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2.

If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 25 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due.

5. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 4 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration.

Borrower will operate the Property in a good and workmanlike manner and in accordance with all Applicable Law and will pay all fees and charges of any kind in connection therewith. Borrower will use good farming and animal husbandry practices.

Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause.

6. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan.
7. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument,

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding, (d) perform any farming operations related to the planting, growing, maintenance, and harvesting of crops located on the Property, and (e) perform any ranching operations related to any animals located on the Property. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 7, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 7. Lender may perform these or any other actions it deems necessary in Lender's sole discretion to preserve the value of the Property, and/or assign to others the right to do same on behalf of Lender. Lender may make advances under this security instrument or other instrument providing security for the Note, to protect the Lender's interest in this security instrument or other instrument providing security for the Note from loss of value or damage. Any money so advanced (including reasonable costs of recovery and attorneys' fees) plus interest at the default rate indicated in the Note shall become an obligation due and owing under the terms of the Note immediately upon the date advanced by Lender and is an obligation of the Borrower secured by the security instrument or other instrument providing security for the Note.

Any amounts disbursed by Lender under this Section 7 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. Borrower shall not surrender the leasehold estate and interests herein conveyed or terminate or cancel the ground lease. Borrower shall not, without the express written consent of Lender, alter or amend the ground lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing.

8. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender.

If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2.

In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due.

"Opposing Party" means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds.

Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration has occurred, reinstate as provided in Section 16, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender.

All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2.

9. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy.
10. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent.

Subject to the provisions of Section 15, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shall not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 17) and benefit the successors and assigns of Lender.

11. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys' fees, property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge.

12. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise.

The notice address shall be 106K Street, Suite 300, Sacramento, CA 95814, unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security Instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument.

13. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision.

As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discretion without any obligation to take any action.

14. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument.
15. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 15, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser.

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.

If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 12 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

16. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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Security Instrument, including, but not limited to, reasonable attorneys' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such cheek is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 15.

17. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.

Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 12) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 25 and the notice of acceleration given to Borrower pursuant to Section 15 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 17.

18. Hazardous Substances. As used in this Section 18: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d) an "Environmental Condition" means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup.

Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property (including, but not limited to, hazardous substances in consumer products).

Borrower shall promptly give Lender written notice of (a) any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release of a Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup. Borrower agrees to indemnify and hold Lender free and harmless from and against all loss, costs (including attorneys' fees and costs), damage (including consequential damages), and expenses Lender may sustain by reason of the assertion against Lender by any third-party of any claim in connection with Hazardous Substances on, in or affecting the Property. Borrower further agrees that Lender shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any claims related to Hazardous Substances on, in or affecting the Property, and shall pay any such attorney fees and expenses Lender incurs in connection therewith.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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19. Additional Property Subject To The Security Instrument. This Security Instrument also constitutes a security agreement within the meaning of the Uniform Commercial Code as adopted in the State of ID (the "UCC"). In addition to the Property described in the Security Instrument, the following items now or hereafter attached to the Property to the extent they are fixtures are added to the Property description, and shall also constitute the Property covered by the Security Instrument: building materials, appliances and goods of every nature whatsoever now or hereafter located in, on, or used, or intended to be used in connection with the Property, including, but not limited to, those for the purposes of supplying or distributing heating, cooling, electricity, gas, water, air and light, fire prevention and extinguishing apparatus, security and access control apparatus. plumbing, bath tubs, water heaters, water closets, sinks, ranges, stoves, refrigerators, dishwashers, disposals. washers, dryers, awnings, storm windows, storm doors,. screens, blinds, shades, curtains and curtain rods, attached minors, cabinets, paneling, attached floor coverings, irrigation Dines and pumps, livestock fencing and pens. windmills and related equipment and pumps, and specifically: All water and water rights now owned or hereafter acquired by Debtor and howsoever evidenced, whether such water and water rights are riparian, appropriative or otherwise and whether or not appurtenant to the real estate described herein, all ditch/pond and ditch/pond rights and any shares of stock, licenses, permits and contracts evidencing such water or ditch rights, and all wells, reservoirs, dams, embankments or fixtures relating thereto, along with all replacements, substitutions, accessions thereto and proceeds derived therefrom.

All irrigation equipment of every kind and nature, including but not limited to center irrigation pivots, pumps, rive pipe, sprinklers, motors, well equipment, pumps and power units, now owned or hereafter acquired by Debtor and now or hereafter located and situated on the real estate described herein, along with all replacements, substitutions, accessions thereto and proceeds derived therefrom.

All Seed Processing Equipment., all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by the Security Instrument. All of the foregoing together with the Property described in the Security Instrument (or the leasehold estate if the Security Instrument is on a leasehold) are referred to in this Security Instrument as the "Property."

20. Fixture Filing. This Security Instrument constitutes a "fixture filing" for the purposes of the UCC against all of the Property which is or is to become fixtures per the UCC.
21. Use of Property; Compliance With Law. Borrower shall not seek, agree to or make a change in the use of the Property or its zoning classification, unless Lender has agreed in writing to the change. Borrower shall comply with all laws, ordinances, regulations and requirements of any governmental body applicable to the Property.
22. Assignment of Leases. Upon Lender's request after default, Borrower shall assign to Lender all leases of the Property and all security deposits made in connection with leases of the Property. Upon the assignment, Lender shall have the right to modify, extend or terminate the existing leases and to execute new leases, in Lender's sole discretion. As used in this paragraph, the word "lease" shall mean "sublease" if the Security Instrument is on a leasehold.
23. Assignment of Rents; Appointment of Receiver; Lender In Possession. Specifically excepting any receipts or revenues Borrower receives from the sale of seed or other products produced, processed or stored at Borrower facilities on the Property, Borrower absolutely and unconditionally assigns and transfers to Lender all the rents and revenues ("Rents") of the Property, regardless of to whom the Rents of the Property are payable. Borrower authorizes Lender or Lender's agents to collect the Rents, and agrees that each tenant of the Property shall pay the Rents to Lender or Lender's agents. However, Borrower shall receive the Rents until (i) Lender has given Borrower notice of default pursuant to Sections 12 and 25 of the Security Instrument and (ii) Lender has given notice to the tenant(s) that the Rents are to be paid to Lender or Lender's agent. This assignment of Rents constitutes an absolute assignment and not an assignment for additional security only.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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If Lender gives notices of default to Borrower: (i) all Rents received by Borrower shall be held by Borrower as trustee for the benefit of Lender only, to be applied to the sums secured by the Security Instrument; (ii) Lender shall be entitled to collect and receive all of the Rents of the Property; (iii) Borrower agrees that each tenant of the Property shall pay all Rents due and unpaid to Lender or Lender's agents upon Lender's written demand to the tenant; (iv) unless applicable law provides otherwise, all Rents collected by Lender or Lender's agents shall be applied first to the costs of taking control of and managing the Property and collecting the Rents, including, but not limited to, attorneys' fees, receiver's fees, premiums on receiver's bonds, repair and maintenance costs, insurance premiums, taxes, assessments and other charges on the Property, and then to the sums secured by the Security Instrument; (v) Lender, Lender's agents or any judicially appointed receiver shall be liable to account for only those Rents actually received; and (vi) Lender shall be entitled to have a receiver appointed to take possession of and manage the Property and collect the Rents and profits derived from the Property without any showing as to the inadequacy of the Property as security.

If the Rents of the Property are not sufficient to cover the costs of taking control of and managing the Property and of collecting the Rents any funds expended by Lender for such purposes shall become indebtedness of Borrower to Lender secured by the Security Instrument pursuant to Section 7 of the Security Instrument.

Borrower represents and warrants that Borrower has not executed any prior assignment of the Rents and has not performed, and will not perform, any act that would prevent Lender from exercising its rights under this paragraph.

Lender, or Lender's agents or a judicially appointed receiver, shall not be required to enter upon, take control of or maintain the Property before or after giving notice of default to Borrower. However, Lender, or Lender's agents or a judicially appointed receiver, may do so at any time when a default occurs. Any application of Rents shall not cure or waive any default or invalidate any other right or remedy of Lender. This assignment of Rents of the Property shall terminate when all the sums secured by the Security Instrument are paid in full.

24. Cross-Default Provision. Borrower's default or breach under any note or agreement in which Lender has an interest shall be a breach under the Security Instrument and Lender may invoke any of the remedies permitted by the Security Instrument.

NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows:

25. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 15 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 25, including, but not limited to, reasonable attorneys' fees and costs of title evidence.

If Lender invokes the power of sale, Lender shall execute or cause Trustee to execute written notice of the occurrence of an event of default and of Lender's election to cause the Property to be sold, and shall cause such notice to be recorded in each county in which any part of the Property is located. Lender or Trustee shall mail copies of the notice as prescribed by Applicable Law to Borrower and to other persons prescribed by Applicable Law. Trustee shall give public notice of sale to the persons and in the manner prescribed by Applicable Law. After the time required by Applicable Law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in any order Trustee determines. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. Lender or its designee may purchase the Property at any sale.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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Trustee shall deliver to the purchaser Trustee's deed conveying the Property without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all expenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all sums secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it.

26. Reconveyance. Upon payment of all sums secured by this Security Instrument, Lender shall request Trustee to reconvey the Property and shall surrender this Security Instrument and all notes evidencing debt secured by this Security Instrument to Trustee. Trustee shall reconvey the Property without warranty to the person or persons legally entitled to it. Such person or persons shall pay any recordation costs. Lender may charge such person or persons a fee for reconveying the Property, but only if the fee is paid to a third party (such as the Trustee) for services rendered and the charging of the fee is permitted under Applicable Law.
27. Substitute Trustee. Lender may, for any reason or cause, from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder_ Without conveyance of the Property, the successor trustee shall succeed to all the title, power and duties conferred upon Trustee herein and by Applicable Law.
28. Area and Location of Property. Either the Property is not more than 40 acres in area or the Property is located within an incorporated city or village.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it.

NOTICE

UNDER IDAHO LAW, ANY PROMISE BY THE BANK TO GRANT OR EXTEND EXISTING CREDIT TO YOU MUST BE IN WRITING TO BE LEGALLY BINDING UPON THE BANK IF THE ORIGINAL AMOUNT OF SUCH CREDIT IS $50,000 OR MORE.

S&W Seed Company, a Nevada corporation

/s/Matthew K. Szet
Signature
Matthew K. Szot, Chief Financial Officer
Mailing address
802 N Douty St.
Hanford, CA 93230

[Sign Originals Only]

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
                )
COUNTY OF SAN DIEGO )

On this 30^th day of November, 2017, before me, Candelario Resendez, personally appeared Matthew K. Szot, Executive Vice President of Finance and Administration and CFO of S&W Seed Company, Sole Member of Seed Holding, LLC, on behalf of said corporation, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the entities upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that eth foregoing paragraph is true and correct.

WITNESS my hand and official seal.

/s/Candelario Resendez
Signature
(Seal)

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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Exhibit A

Parcel 1:

The West 220 feet of the East 1022 feet of the Southeast Quarter of the Northeast Quarter of Section 16, Township 2 North, Range 2 West, Boise Meridian, Canyon County, Idaho;
and
A portion of the Southeast Quarter of the Northeast Quarter of Section 16, Township 2 North, Range 2 West of the Boise Meridian, Canyon County, Idaho, being more particularly described as follows:
Commencing at the Southeast corner of said Southeast Quarter of the Northeast Quarter of Section 16; thence
South 89°55'04" West along the South line of said Southeast Quarter to the Northeast Quarter a distance of 1022.00 feet to the True Point of Beginning; thence continuing
South 89°55'04" West along said South line, a distance of 30.00 feet to a point; thence
North on a line parallel to the East line of said Southeast Quarter of the Northeast Quarter of Section 16, a distance of 190.00 feet to a point; thence
North 89°55'04" East, along a line parallel with the South line of said Southeast Quarter of the Northeast Quarter, a distance of 30.00 feet; thence
South along a line parallel to the East line of said Southeast Quarter of the Northeast Quarter, a distance of 190.00 feet to the True Point of Beginning.

Parcel 2:

A parcel of land located in the Southeast Quarter of the Northeast Quarter of Section 16, Township 2 North, Range 2 West of the Boise Meridian, Canyon County, Idaho, and is more particularly described as follows:

Commencing at the East quarter corner of said Section 15, being a P.K. Nail and the centerline intersection of Lake Shore Drive and 12th Avenue South; thence
South 89°55'04" West along the South line of said Southeast quarter of the Northeast Quarter, and the centerline of Lake Shore Drive, a distance of 1022.00 feet to a P.K. Nail, being the True Point of Beginning; thence continuing
South 89°55'04" West along said South line of the Southeast Quarter of the Northeast Quarter and the centerline of Lake Shore Drive, a distance of 300.20 feet to the Southwest corner of said parcel, being a 5/8 inch steel pin, from whence a 112 inch steel pin bears North 0°06'20" West, a distance of 33.00 feet; thence leaving said
South line of the Southeast Quarter of the Northeast Quarter and the centerline of Lake Shore Drive North 0°06'20" West, along the West line of said Southeast Quarter of the Northeast Quarter, a distance of 1324.04 feet to the Northwest corner of said parcel being a 5/8 inch steel pin, and the Northeast 1/16 corner of said Section 16; thence
North 89°55'27" East along the North line of said Southeast Quarter of the Northeast Quarter, a distance of 302.64 feet to the Northeast corner of said parcel, being a 1/2 inch steel pin; thence
South and parallel with the East line of said Southeast Quarter of the Northeast
Quarter, a distance of 1324.01 feet to the True Point of Beginning.

Excepting Therefrom:

A portion of the Southeast Quarter of the Northeast Quarter of Section 16, Township 2 North, Range 2 West of the Boise Meridian, Canyon County, Idaho, being more particularly described as follows:

Commencing at the Southeast corner of said Southeast Quarter of the Northeast Quarter of Section 16; thence
South 89°55'04" West along the South line of said Southeast Quarter of the Northeast Quarter a distance of 1022.00 feet to the True Point of Beginning; thence continuing
South 89°55'04" West along said South line, a distance of 30.00 feet to a point; thence
North on a line parallel to the East line of said Southeast Quarter of the Northeast Quarter of Section 16, a distance of 390.00 feet to a point; thence
North 89°55'04" East, along a line parallel with the South line of said Southeast Quarter of the Northeast Quarter, a distance of 30.00 feet; thence
South along a line parallel to the East line of said Southeast Quarter of the Northeast Quarter, a distance of 190.00 feet to the True Point of Beginning.

Parcel 3:

COMMENCING at the Northwest corner of Lot 1 in Section 18, Township 2 North, Range 1 West of the Boise Meridian, Canyon County, Idaho; thence
East along the North boundary line of said Lot 1, a distance of 544 feet to the Real Point of Beginning; thence
South and parallel to the West boundary line of said Lot 1, a distance of 179 feet; thence
West and parallel to the North boundary line of said Lot 1, a distance of 106 feet; thence
South and parallel to the West boundary line of said Lot 1, a distance of 156 feet; thence
East and parallel to the North boundary line of said Lot 1, a distance of 172 feet; thence
North and parallel to the West boundary line of said Lot 1, a distance of 156 feet; thence
West and parallel to the North boundary tine of said Lot 1, a distance of 26 feet; thence

North and parallel to the West boundary line of said Lot 1, a distance of 179 feet, more or less, to a point in the North boundary line of said Lot 1; thence
West a distance of 40 feet, more or less, along the North boundary line of Lot 1 to the Real Point of Beginning.

AND

Lot 1 in Section 18, Township 2 North, Range 1 West of the Boise Meridian, Canyon County, Idaho.

EXCEPTING the following described real property, to-wit:

COMMENCING at the Northwest corner of Lot 1 in Section 18, Township 2 North, Range 1 West of the Boise Meridian, Canyon County, Idaho; thence
East along the North boundary line of said Lot 1, a distance of 544 feet to the Real Point of Beginning; thence
South and parallel to the West boundary line of said Lot 1, a distance of 179 feet; thence
West and parallel to the North boundary line of said Lot 1, a distance of 106 feet; thence
South and parallel to the West boundary line of said Lot 1, a distance of 156 feet; thence
East and parallel to the North boundary line of Lot 1, a distance of 172 feet; thence North and parallel to the West boundary line of said Lot 1, a distance of 156 feet; thence
West and parallel to the North boundary tine of said Lot 1, a distance of 26 feet; thence
North and parallel to the West boundary line of said Lot 1, a distance of 179 feet, more or less, to a point in the North boundary line of said Lot 1; thence
West a distance of 40 feet, more or less, along the North boundary line of Lot 1 to the Real Point of Beginning.

Parcel 4:

The Northeast Quarter Northwest Quarter, Section 18, Township 2 North, Range 1 West of the Boise Meridian, Canyon County, Idaho.

Address disclosed by County Assessor: 4819 East Lewis Lane, Nampa, ID 83686; 9224 Lake Shore Drive, Nampa, ID 83686

APN: 28992000 0; 28992010 0; 29584010 0; 29585000 0

CROSS COLLATERALIZATION RIDER

Loan # R1036

THIS CROSS COLLATERALIZATION RIDER is made this November 30, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date, given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities
Canyon County, ID
[Property Address]

In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender Maher covenant and agree that on the date hereof the following other loans have been entered into:

Borrowers/Co-Signers' Names	Date	Loan Amount/Loan No.
S&W Seed Company	11/30/2017	$2,100,000.00/R1028

each of which is evidenced by a separate promissory note (the "Other Notes"), and each of which is secured by a separate Security Agreement (the "Other Security Instruments"). It is agreed that in addition to Borrower's Note, this Security Instrument secures the obligations, debts, and liabilities evidenced by the Other Notes and Other Security Instruments referenced herein, plus interest thereon, which is payable by Grantor to Lender.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Cross Collateralization Rider.

S&W Seed Company, a Nevada corporation

/s/Matthew K. Szot

Signature

Matthew K. Szot, Chief Financial Officer[Sign Originals Only]

Cross-Collaterization Rider

1

CROSS DEFAULT RIDER

Loan # R1036

THIS CROSS DEFAULT RIDER is made this November 30, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date, given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities
Canyon County, ID
[Property Address]

In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that on the date hereof the following other loans have been entered into:

Borrowers/Co-Signers' Names	Date	Loan Amount/Loan No.
S&W Seed Company	11/30/2017	$2,100,000.00/R1028

each of which is evidenced by a separate promissory note (the "Other Notes"), and each of which is secured by a separate Security Agreement (the "Other Security Instruments"). It is agreed that any default under this Security Instrument or this Note shall be deemed a default under the Other Notes and Other Security Instruments; and any default under any or all of the Other Notes or Other Security Instruments shall be deemed to be a default under this Note and this Security Instrument.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Cross Default Rider.

S&W Seed Company, a Nevada corporation

/s/Matthew K. Szot
Signature
Matthew K. Szot, Chief Financial Officer[Sign Originals Only]

MULTISTATE CROSS DEFAULT RIDER

1

FINANCIAL INFORMATION AND COVENANTS RIDER

Loan # R1036

THIS FINANCIAL INFORMATION AND COVENANTS RIDER (this "Rider") is made this Thirtieth day of November, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities
Canyon County, ID
[Property Address]

FINANCIAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that Borrower will prepare and maintain Borrower's financial records using consistently applied generally accepted accounting principles then in effect. Borrower will provide Lender with financial information in a form reasonably acceptable to Lender and under the following terms:

(If "X"ed the following terms are agreed to.)

x Frequency. Annually, Borrower will provide to Lender Borrower's financial statements, tax returns, annual internal audit reports or those prepared by independent accountants within 90 days after the close of each fiscal year. Any annual financial statements that Borrower provides will be reviewed statements.

¨ Interim Financial Reports. Borrower will provide Lender with interim financial reports on a basis, and within 0 days after the close of this business period. Interim financial statements will be statements.

¨ Requested Information. Borrower will provide Lender with any other information about Borrower's operations, financial affairs and condition within 0 days after Lender's request.

¨ Leverage Ratio. Borrower will maintain at all times a ratio of total liabilities to tangible net worth, determined under consistently applied generally accepted accounting principles, of 0.000 to 1.0 (Total Liabilities to Tangible Net Worth Ratio) or less.

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDERFarmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

¨ Minimum Tangible Net Worth. Borrower will maintain at all times a total tangible net worth, determined under consistently applied generally accepted accounting principles, of $0.00 (Minimum Tangible Net Worth) or more. Tangible net worth is the amount by which total assets exceed total liabilities. For determining tangible net worth, total assets will exclude all intangible assets, including without limitation goodwill, patents, trademarks, trade names, copyrights, and franchises, and will also exclude any accounts receivable that do not provide for a repayment schedule.

¨ Minimum Current Ratio. Borrower will maintain at all times a ratio of current assets to current liabilities, determined under consistently applied generally accepted accounting principles, of 0 to 1.0 (Minimum Current Ratio) or more.

¨ Minimum Working Capital. Borrower will maintain at all times a working capital, determined under consistently applied generally accepted accounting principles by subtracting current liabilities from current assets, of $0.00 (Minimum Working Capital) or more. For this determination, current assets exclude (Excluded Current Assets.). Likewise, current liabilities include (1) all obligations payable on demand or within on year after the date on which the determination is made, and (2) final maturities and sinking fund payments required to be made within one year after the date on which the determination is made, but exclude all liabilities or obligations that Borrower may renew or extend to a date more than one year from the date of this determination.

x EBITDA. Adjusted EBITDA/Total Annual Debt Payments no less than 1.30x (measured annually on Borrower's fiscal year basis and calculated based on Borrower's financial statements delivered 90 days after fiscal year end).

x Debt to Asset Ratio. Debt to Asset Ratio shall not be greater than 60% (measured annually as of the end of Borrower's fiscal year and calculated based Borrower's financial statements delivered 90 days after fiscal year end).

Capitalized terms used, but not defined, in this Rider have the respective meanings set forth in annex A hereto. All determinations of Borrower's compliance with the foregoing covenants will be made exclusively by reference to Borrower's financial statements delivered pursuant hereto.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Financial Information and Covenants Rider.

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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S&W Seed Company, a Nevada corporation

/s/ Matthew K. Szot
Signature
Matthew K. Szot, Chief Financial Officer[Sign Originals Only]

IDAHO UNIFORM INSTRUMENT (40 acres or less) Form 5000.13A 5/18/07

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ANNEX A

As used in this Rider, the following terms have the following meanings:

"Adjusted EBITDA" means, for any fiscal year of Borrower, the result of (a) Borrower's Consolidated Net Earnings for such fiscal year plus, without duplication, the aggregate amounts deducted in determining such Consolidated Net Earnings in respect of (i) Consolidated Interest Expense, (ii) Consolidated Income Tax Expense, (iii) Consolidated Depreciation and Amortization Charges, (iv) non-recurring separation charges, (v) nonrecurring reserve for uncollectible sublease and stand establishment receivables, (vi) non-cash expenses incurred in connection with stock-based compensation, (vii) non-cash expenses incurred in connection with amortization of debt discount, and (viii) non-cash expenses incurred prior to December 31, 2017 in connection with derivative warrant liability; minus (b) to the extent included in Consolidated Net Earnings for such period, non-cash gains incurred prior to December 31, 2017 in connection with derivative warrant liability.

"Consolidated" means the resultant consolidation of the financial statements of Borrower and its subsidiaries in accordance with generally accepted accounting principles in the United States, including principles of consolidation consistent with those applied in preparation of the financial statements delivered by Borrower pursuant to this Rider.

`Consolidated Depreciation and Amortization Charges' means, for any fiscal year of Borrower, the aggregate of all depreciation and amortization charges for fixed assets, leasehold improvements and general intangibles (specifically including goodwill) of Borrower for such period, as determined on a Consolidated basis.

"Consolidated Income Tax Expense" means, for any fiscal year of Borrower, all provisions for taxes based on the gross or net income of Borrower (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto), as determined on a Consolidated basis.

"Consolidated Indebtedness" means, as of the end of any fiscal year of Borrower, the total Indebtedness of Borrower as of such date, as determined on a Consolidated basis.

"Consolidated Interest Expense" means, for any fiscal year of Borrower, the interest expense of Borrower for such fiscal year, as determined on a Consolidated basis.

"Consolidated Net Earnings" means, for any fiscal year of Borrower, the net income (loss) of Borrower for such fiscal year, as determined on a Consolidate basis.

"Consolidated Total Assets' means, as of the end of any fiscal year of Borrower, the total assets of Borrower as of such date, as determined on a Consolidated basis.

"Debt to Asset Ratio" means, as of the end of any fiscal year of Borrower, the ratio of (a) Consolidated Indebtedness to (b) Consolidated Total Assets.

"Indebtedness" means, without duplication, (a) all obligations to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (c) all obligations under conditional sales or other title retention agreements, (d) all obligations (contingent or otherwise) under any letter of credit or banker's acceptance, (e) all net obligations under any currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, (f) all synthetic leases, (g) all capitalized lease obligations, (h) all obligations of Borrower with respect to asset securitization financing programs, (i) all obligations to advance funds to, or to purchase assets, property or services from, any other person or entity in order to maintain the financial condition of such person or entity, (j) all indebtedness of the types referred to in subparts (a) through (i) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which Borrower is a general partner or joint venturer, unless such indebtedness is expressly made non-recourse to Borrower, (k) any other transaction (including forward sale or purchase agreements) having the commercial effect of a borrowing of money entered into by Borrower to finance its operations or capital requirements, and (I) any guaranty of any obligation described in subparts (a) through (lc) above.

"Total Annual Debt Payments" means, for any fiscal year of Borrower, the aggregate, without duplication, of (a) Borrower's Consolidated Interest Expense paid in cash for such fiscal year, and (b) Borrower's principal payments on Consolidated Indebtedness paid in cash for such fiscal year, excluding, in each case, (i) payments of principal under the Credit and Security Agreement, dated as of September 22, 2015, between Borrower and KeyBank National Association, as amended from time to time, or any replacement facility therefore, (ii) payments of principal under any working capital line of credit maintained by Borrower's Seed Genetics International Pty Ltd subsidiary and (iii) payments of principal that certain Promissory Note dated December 31, 2014 made by Borrower in favor and for the benefit of Pioneer Hi-Bred International, Inc., as amended from time to time.

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

After Recording Return To:
Conterra Agricultural Capital, LLC
7755 Office Plaza Dr. North, Suite 195
West Des Moines, IA 50266
Sarah Streeter

This instrument was drafted by:

Michael H. Patterson
2310 Interstate 20 West, Suite 100
Arlington, TX 76017-1668

[Space Above This Line For Recording Data]

Parcel ID No.: 11002-392.A; 11002-392.01

MORTGAGE
Security Agreement, Assignment of Rents
and Fixture Filing

DEFINITIONS

Words used in multiple sections of this document are defined below and other words are defined in certain Sections of this document. Certain rules regarding the usage of words used in this document are also provided in Section 13.

1. "Security Instrument" means this document, which is dated November 30, 2017, together with all Riders to this document.
2. "Borrower" is S&W Seed Company, a Nevada corporation. Borrower is the mortgagor under this Security Instrument.
3. "Lender" is Conterra Agricultural Capital, LLC. Lender is a limited liability company organized and existing under the laws of Iowa. Lender's address is 7755 Office Plaza Dr. North, Suite 195 West Des Moines, IA 50266. Lender is the mortgagee under this Security Instrument.
4. "Note" means the promissory note signed by Borrower and dated November 30, 2017. The Note states that Borrower owes Lender Ten Million Four Hundred Thousand and 00/100 Dollars (U.S. $10,400,000.00) plus interest. Borrower has promised to pay this debt in regular Periodic Payments and to pay the debt in full not later than January 1, 2021.
5. "Property" means the property that is described below under the heading "Transfer of Rights in the Property."
6. "Loan" means the debt evidenced by the Note, plus interest, any prepayment charges and late charges due under the Note, and all sums due under this Security Instrument, plus interest.

WISCONSIN - UNIFORM INSTRUMENT Form 5000.50 4/23/07

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7. "Riders" mean all Riders to this Security Instrument that are executed by Borrower. The following Riders are to be executed by Borrower [check box

   o Irrigation Equipment Rider o Adjustable Rate Rider o Mortgage Insurance Rider	o Water Rights Rider o Permitted Prior Encumbrance Rider T Financial Information and Covenants Rider
   T Other(s): Cross Default Rider, Cross Collateralization Rider

8. "Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances and administrative rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions.

9. "Electronic Funds Transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, computer, or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, transfers initiated by telephone, wire transfers, and automated clearinghouse transfers.

10. "Miscellaneous Proceeds" means any compensation, settlement, award of damages, or proceeds paid by any third party (other than insurance proceeds paid under the coverages described in Section 4) for: (i) damage to, or destruction of, the Property; (ii) condemnation or other taking of all or any part of the Property; (iii) conveyance in lieu of condemnation; or (iv) misrepresentations of, or omissions as to, the value and/or condition of the Property.
11. "Periodic Payment" means the regularly scheduled amount due for principal and interest under the Note,
12. "Successor in Interest of Borrower" means any party that has taken title to the Property, whether or not that party has assumed Borrower's obligations under the Note and/or this Security Instrument.

TRANSFER OF RIGHTS IN THE PROPERTY

This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower's covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower does hereby mortgage, grant and convey to Lender, with power of sale, the following described property located in the County [Type of Recording Jurisdiction] of Columbia [Name of Recording Jurisdiction]:

SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF.

which currently has the address of

Agricultural Land and Seed Processing Facilities
Columbia County, Wisconsin
("Property Address"):

subject only to those matters set forth in the Permitted Prior Encumbrance Rider, if said rider is attached (hereafter "Permitted Prior Encumbrances");

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TOGETHER WITH all buildings, improvements, fixtures and permanent plantings located therein or thereon or appurtenant thereto, and all additions, replacements, and improvements hereafter made thereto or placed therein or thereon; all rights-of-way, easements, rents, issues, profits, income, proceeds and general intangibles there from, tenements, hereditaments, remainders, reversions, privileges and appurtenances thereunto belonging, however evidenced which are used or enjoyed in connection with the real property now or hereafter owned or belonging to the same or which hereafter may be acquired and so used or enjoyed;

TOGETHER WITH all water and water rights now owned or hereafter acquired by Borrower and howsoever evidenced, including but not limited to any water rights specifically described in the Water Rights Rider if said rider is attached hereto, whether such water and water rights are riparian, appropriative or otherwise and whether or not appurtenant to the real property, along with all ditch and ditch rights and any shares of stock, licenses, permits and contracts evidencing such water or ditch rights, and all wells, reservoirs, dams, embankments or fixtures relating thereto;

TOGETHER WITH all personal property, including all windmills, pumps, irrigation equipment, motors, engines, and devices of every kind now or hereafter used for or in connection with the irrigation of the real property, or for stock watering or domestic purposes thereon, which are owned by Borrower and which are located on the real property in Columbia County, Wisconsin, described above together with all additional accessions, replacements, improvements, repairs and substitutions to said property and the proceeds thereof and all other fixtures now or hereafter located upon the real property, all of which are declared to be appurtenant to said real property, or incident to the ownership thereof, or used in connection therewith;

TOGETHER WITH all judgments, awards of damages, settlements and payments or security (i) hereafter made as a result of or in lieu of any taking of all or any part of the real property under the power of eminent domain or for any damage to the real property and/or the improvements located thereon, or any part thereof, and (ii) hereafter made for any damage to the real property and/or the improvements located thereon, or any part thereof resulting from exercise of or attempted exercise of mining rights or claims, however reserved or asserted, and resulting from the disturbance of any of the surface of the real property. Borrower does hereby covenant and agree that Borrower will not give such consent as may be required of the owner for mining or other surface disturbance by the terms of any patent, deed, statute, law or otherwise, without the prior written consent of Lender;

TOGETHER WITH all proceeds of and any unearned premiums on any insurance policies covering the real property and/or the improvements located thereon, including, without limitation, the right to receive and apply the proceeds of any insurance judgments, or settlements made in lieu thereof, for damage to the real property and/or the improvements located thereon or the indebtedness secured thereby;

TOGETHER WITH all contract rights, chattel paper, documents, accounts and general intangibles, rights to performance, entitlement to payment in cash or in kind, or any other benefits under any current or future governmental program which pertain to the real property, whether now or hereafter existing or acquired;

TOGETHER WITH all cash and noncash proceeds of the conversion, voluntary or involuntary, of any of the foregoing;

TOGETHER WITH any and all of Borrower's right, title, and/or interest in any and all system memberships and/or ownership certificates in any non-municipal water sewer systems now or in the future serving said property.

All replacements and additions shall also be covered by this Security Instrument.

All of the foregoing is referred to in this Security Instrument as the "Property."

For clarity, notwithstanding the foregoing or any other provision of this Security Instrument, the Property shall specifically exclude (a) all Collateral as defined in the Security Agreement, dated November 30, 2017, by and between Lender and S&W Seed Company granting Lender a security interest in such Collateral located in Wisconsin and securing that certain promissory note entered into by MEW Seed Company in the amount of $2,100,00.00 in favor of Lender (Loan # R1028) and (b) all seed or other products produced, processed or stored on the Property.

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BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record and specifically those permitted prior encumbrances, if any, set forth in the Permitted Prior Encumbrances Rider if said rider is attached to this Security Instrument. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.

THIS SECURITY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security instrument covering real property, fixtures, and certain personal property.

UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows:

1. Payment of Principal, Interest, Prepayment Charges, Yield Maintenance Premiums and Late Charges. Borrower shall pay when due the principal of, and interest on, the debt evidenced by the Note and any yield maintenance premiums, any prepayment charges and late charges due under the Note. Payments due under the Note and this Security Instrument shall be made in U.S. currency. However, if any check or other instrument received by Lender as payment under the Note or this Security Instrument is returned to Lender unpaid, Lender may require that any or all subsequent payments due under the Note and this Security Instrument be made in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality, or entity; or (d) Electronic Funds Transfer.

Payments are deemed received by Lender when received at the location designated in the Note or at such other location as may be designated by Lender in accordance with the notice provisions in Section 12. Lender may return any payment or partial payment if the payment or partial payment is insufficient to bring the Loan current. Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payment in the future, but Lender is not obligated to apply such payments at the time such payments are accepted Lender may hold such unapplied funds until Borrower makes payment to bring the Loan current. If Borrower does not do so within a reasonable period of time, Lender shall either apply such funds or return them to Borrower. If not applied earlier, such funds will be applied to the outstanding principal balance under the Note immediately prior to foreclosure. No offset or claim which Borrower might have now or in the future against Lender shall relieve Borrower from making payments due under the Note and this Security Instrument or performing the covenants and agreements secured by this Security Instrument.

2. Application of Payments or Proceeds. Unless required by Applicable Law, payments will be applied First to accrued unpaid interest, then second to principal, third to advances under this Security Instrument, and finally to late charges. Such payments shall be applied to each Periodic Payment in the order in which it became due.

If Lender receives a payment from Borrower for a delinquent Periodic Payment which includes a sufficient amount to pay any late charge due, the payment may be applied to the delinquent payment and the late charge. If more than one Periodic Payment is outstanding, Lender may apply any payment received from Borrower to the repayment of the Periodic Payments if, and to the extent that, each payment can be paid in full. To the extent that any excess exists after the payment is applied to the full payment of one or more Periodic Payments, such excess may be applied to any late charges due. Voluntary prepayments shall be applied first to any prepayment charges and then as described in the Note.

Any application of payments, insurance proceeds, or Miscellaneous Proceeds to principal due under the Note shall not extend or postpone the due date, or change the amount, of the Periodic Payments.

3. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines, and impositions attributable to the Property which can attain priority over this Security Instrument, leasehold payments or ground rents on the Property, if any.

WISCONSIN - UNIFORM INSTRUMENT Form 5000.50 4/23/07

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Borrower shall promptly discharge any lien which has priority over this Security Instrument unless Borrower: (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender, but only so long as Borrower is performing such agreement; (b) contests the lien in good faith by, or defends against enforcement of the lien in, legal proceedings which in Lender's opinion operate to prevent the enforcement of the lien while those proceedings are pending, but only until such proceedings are concluded; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument. If Lender determines that any part of the Property is subject to a lien which can attain priority over this Security Instrument, Lender may give Borrower a notice identifying the lien. Within 10 days of the date on which that notice is given, Borrower shall satisfy the lien or take one or more of the actions set forth above in this Section 3.

Lender may require Borrower to pay a one-time charge for a real estate tax verification and/or reporting service used by Lender in connection with this Loan.

4. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the Property insured against loss by fire, hazards included within the term "extended coverage," and any other hazards including, but not limited to, earthquakes and floods, for which Lender requires insurance. This insurance shall be maintained in the amounts (including deductible levels) and for the periods that Lender requires. What Lender requires pursuant to the preceding sentences can change during the term of the Loan. The insurance carrier providing the insurance shall be chosen by Borrower subject to Lender's right to disapprove Borrower's choice, which right shall not be exercised unreasonably. Lender may require Borrower to pay, in connection with this Loan, either (a) a one-time charge for flood zone determination, certification and tracking services; or (11) a one-time charge for flood zone determination and certification services and subsequent charges each time remappings or similar changes occur which reasonably might affect such determination or certification. Borrower shall also be responsible for the payment of any fees imposed by the Federal Emergency Management Agency in connection with the review of any flood zone determination resulting from an objection by Borrower.

If Borrower fails to maintain any of the coverages described above, such failure shall constitute a default under the terms of this Security Instrument and the Loan. Lender may obtain insurance coverage, at Lender's option and Borrower's expense. Lender is under no obligation to purchase any particular type or amount of coverage. Therefore, such coverage shall cover Lender, but might or might not protect Borrower, Borrower's equity in the Property, or the contents of the Property, against any risk, hazard or liability and might provide greater or lesser coverage than was previously in effect. Borrower acknowledges that the cost of the insurance coverage so obtained might significantly exceed the cost of insurance that Borrower could have obtained. Any amounts disbursed by Lender under this Section 4 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

All insurance policies required by Lender and renewals of such policies shall be subject to Lender's right to disapprove such policies, shall include a standard mortgage clause, and shall name Lender as mortgagee and/or as an additional loss payee. Lender shall have the right to hold the policies and renewal certificates. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. If Borrower obtains any form of insurance coverage, not otherwise required by Lender, for damage to, or destruction of, the Property, such policy shall include a standard mortgage clause and shall name Lender as mortgagee and/or as an additional loss payee.

In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, any insurance proceeds, whether or not the underlying insurance was required by Lender, shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such insurance proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such insurance proceeds, Lender shall not be required to pay Borrower any interest or earnings on such proceeds. Fees for public adjusters, or other third parties, retained by Borrower shall not be paid out of the insurance proceeds and shall be the sole obligation of Borrower. If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such insurance proceeds shall be applied in the order provided for in Section 2.

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If Borrower abandons the Property, Lender may file, negotiate and settle any available insurance claim and related matters. If Borrower does not respond within 30 days to a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may negotiate and settle the claim. The 30-day period will begin when the notice is given. In either event, or if Lender acquires the Property under Section 25 or otherwise, Borrower hereby assigns to Lender (a) Borrower's rights to any insurance proceeds in an amount not to exceed the amounts unpaid under the Note or this Security Instrument, and (b) any other of Borrower's rights (other than the right to any refund of unearned premiums paid by Borrower) under all insurance policies covering the Property, insofar as such rights are applicable to the coverage of the Property. Lender may use the insurance proceeds either to repair or restore the Property or to pay amounts unpaid under the Note or this Security Instrument, whether or not then due.

5. Preservation, Maintenance and Protection of the Property; Inspections. Borrower shall not destroy, damage or impair the Property, allow the Property to deteriorate or commit waste on the Property. Borrower shall maintain the Property in order to prevent the Property from deteriorating or decreasing in value due to its condition. Unless it is determined pursuant to Section 4 that repair or restoration is not economically feasible, Borrower shall promptly repair the Property if damaged to avoid further deterioration or damage. If insurance or condemnation proceeds are paid in connection with damage to, or the taking of, the Property, Borrower shall be responsible for repairing or restoring the Property only if Lender has released proceeds for such purposes. Lender may disburse proceeds for the repairs and restoration in a single payment or in a series of progress payments as the work is completed. If the insurance or condemnation proceeds are not sufficient to repair or restore the Property, Borrower is not relieved of Borrower's obligation for the completion of such repair or restoration.

Borrower will operate the Property in a good and workmanlike manner and in accordance with all Applicable Law and will pay all fees and charges of any kind in connection therewith. Borrower will use good farming and animal husbandry practices.

Lender or its agent may make reasonable entries upon and inspections of the Property. If it has reasonable cause, Lender may inspect the interior of the improvements on the Property. Lender shall give Borrower notice at the time of or prior to such an interior inspection specifying such reasonable cause.

6. Borrower's Loan Application. Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan.
7. Protection of Lender's Interest in the Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this security Instrument, (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture, for enforcement of a lien which may attain priority over this Security Instrument or to enforce laws or regulations), or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument, including its secured position in a bankruptcy proceeding, (d) perform any farming operations related to the planting, growing, maintenance, and harvesting of crops located on the Property, and (e) perform any ranching operations related to any animals located on the Property. Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lender may take action under this Section 7, Lender does not have to do so and is not under any duty or obligation to do so. It is agreed that Lender incurs no liability for not taking any or all actions authorized under this Section 7. Lender may perform these or any other actions it deems necessary in Lender's sole discretion to preserve the value of the Property, and/or assign to others the right to do same on behalf of Lender. Lender may make advances under this security instrument or other instrument providing security for the Note, to protect the Lender's interest in this security instrument or other instrument providing security for the Note from loss of value or damage. Any money so advanced (including reasonable costs of recovery and attorneys' fees) plus interest at the default rate indicated in the Note shall become an obligation due and owing under the terms of the Note immediately upon the date advanced by Lender and is an obligation of the Borrower secured by the security instrument or other instrument providing security for the Note.

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Any amounts disbursed by Lender under this Section 7 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. Borrower shall not surrender the leasehold estate and interests herein conveyed or terminate or cancel the ground lease. Borrower shall not, without the express written consent of Lender, alter or amend the ground lease. If Borrower acquires fee title to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing.

8. Assignment of Miscellaneous Proceeds; Forfeiture. All Miscellaneous Proceeds are hereby assigned to and shall be paid to Lender.

If the Property is damaged, such Miscellaneous Proceeds shall be applied to restoration or repair of the Property, if the restoration or repair is economically feasible and Lender's security is not lessened. During such repair and restoration period, Lender shall have the right to hold such Miscellaneous Proceeds until Lender has had an opportunity to inspect such Property to ensure the work has been completed to Lender's satisfaction, provided that such inspection shall be undertaken promptly. Lender may pay for the repairs and restoration in a single disbursement or in a series of progress payments as the work is completed. Unless an agreement is made in writing or Applicable Law requires interest to be paid on such Miscellaneous Proceeds, Lender shall not be required to pay Borrower any interest or earnings on such Miscellaneous Proceeds. If the restoration or repair is not economically feasible or Lender's security would be lessened, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower. Such Miscellaneous Proceeds shall be applied in the order provided for in Section 2.

In the event of a total taking, destruction, or loss in value of the Property, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with the excess, if any, paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is equal to or greater than the amount of the sums secured by this Security Instrument immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the sums secured by this Security Instrument shall be reduced by the amount of the Miscellaneous Proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the partial taking, destruction, or loss in value divided by (b) the fair market value of the Property immediately before the partial taking, destruction, or loss in value. Any balance shall be paid to Borrower.

In the event of a partial taking, destruction, or loss in value of the Property in which the fair market value of the Property immediately before the partial taking, destruction, or loss in value is less than the amount of the sums secured immediately before the partial taking, destruction, or loss in value, unless Borrower and Lender otherwise agree in writing, the Miscellaneous Proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due.

If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the Opposing Party (as defined in the next sentence) offers to make an award to settle a claim for damages, Borrower fails to respond to Lender within 30 days after the date the notice is given, Lender is authorized to collect and apply the Miscellaneous Proceeds either to restoration or repair of the Property or to the sums secured by this Security Instrument, whether or not then due. "Opposing Party" means the third party that owes Borrower Miscellaneous Proceeds or the party against whom Borrower has a right of action in regard to Miscellaneous Proceeds.

Borrower shall be in default if any action or proceeding, whether civil or criminal, is begun that, in Lender's judgment, could result in forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. Borrower can cure such a default and, if acceleration has occurred, reinstate as provided in Section 16, by causing the action or proceeding to be dismissed with a ruling that, in Lender's judgment, precludes forfeiture of the Property or other material impairment of Lender's interest in the Property or rights under this Security Instrument. The proceeds of any award or claim for damages that are attributable to the impairment of Lender's interest in the Property are hereby assigned and shall be paid to Lender.

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All Miscellaneous Proceeds that are not applied to restoration or repair of the Property shall be applied in the order provided for in Section 2.

9. Borrower Not Released; Forbearance By Lender Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower. Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower. Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender's acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy.
10. Joint and Several Liability; Co-signers; Successors and Assigns Bound. Borrower covenants and agrees that Borrower's obligations and liability shall be joint and several. However, any Borrower who co-signs this Security Instrument but does not execute the Note (a "co-signer"): (a) is co-signing this Security Instrument only to mortgage, grant and convey the co-signer's interest in the Property under the terms of this Security Instrument; (b) is not personally obligated to pay the sums secured by this Security Instrument; and (c) agrees that Lender and any other Borrower can agree to extend, modify, forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without the co-signer's consent.

Subject to the provisions of Section 15, any Successor in Interest of Borrower who assumes Borrower's obligations under this Security Instrument in writing, and is approved by Lender, shall obtain all of Borrower's rights and benefits under this Security Instrument. Borrower shalt not be released from Borrower's obligations and liability under this Security Instrument unless Lender agrees to such release in writing. The covenants and agreements of this Security Instrument shall bind (except as provided in Section 17) and benefit the successors and assigns of Lender.

11. Loan Charges. Lender may charge Borrower fees for services performed in connection with Borrower's default, for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument, including, but not limited to, attorneys' fees, property inspection and valuation fees. In regard to any other fees, the absence of express authority in this Security Instrument to charge a specific fee to Borrower shall not be construed as a prohibition on the charging of such fee. Lender may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law.

If the Loan is subject to a law which sets maximum loan charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the Loan exceed the permitted limits, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge (whether or not a prepayment charge is provided for under the Note). Borrower's acceptance of any such refund made by direct payment to Borrower will constitute a waiver of any right of action Borrower might have arising out of such overcharge.

12. Notices. All notices given by Borrower or Lender in connection with this Security Instrument must be in writing. Any notice to Borrower in connection with this Security Instrument shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower's notice address if sent by other means. Notice to any one Borrower shall constitute notice to all Borrowers unless Applicable Law expressly requires otherwise. The notice address shall be 106 K Street, Suite 300, Sacramento, CA 95814, unless Borrower has designated a substitute notice address by notice to Lender. Borrower shall promptly notify Lender of Borrower's change of address. If Lender specifies a procedure for reporting Borrower's change of address, then Borrower shall only report a change of address through that specified procedure. There may be only one designated notice address under this Security Instrument at any one time. Any notice to Lender shall be given by delivering it or by mailing it by first class mail to Lender's address stated herein unless Lender has designated another address by notice to Borrower. Any notice in connection with this Security instrument shall not be deemed to have been given to Lender until actually received by Lender. If any notice required by this Security Instrument is also required under Applicable Law, the Applicable Law requirement will satisfy the corresponding requirement under this Security Instrument.

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13. Governing Law; Severability; Rules of Construction. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law. Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract. In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision.

As used in this Security Instrument: (a) words of the masculine gender shall mean and include corresponding neuter words or words of the feminine gender; (b) words in the singular shall mean and include the plural and vice versa; and (c) the word "may" gives sole discretion without any obligation to take any action.

14. Borrower's Copy. Borrower shall be given one copy of the Note and of this Security Instrument.
15. Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 15, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser.

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.

If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 12 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

16. Borrower's Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower's right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys' fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender's interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender's interest in the Property and rights under this Security Instrument, and Borrower's obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement sums and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer's check or cashier's check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 15.
17. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.

Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party's actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 12) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action. If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph. The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 25 and the notice of acceleration given to Borrower pursuant to Section 15 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 17.

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18. Hazardous Substances. As used in this Section 18: (a) "Hazardous Substances" are those substances defined as toxic or hazardous substances, pollutants, or wastes by Environmental Law and the following substances: gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials; (b) "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection; (c) "Environmental Cleanup" includes any response action, remedial action, or removal action, as defined in Environmental Law; and (d) an "Environmental Condition" means a condition that can cause, contribute to, or otherwise trigger an Environmental Cleanup.

Borrower shall not cause or permit the presence, use, disposal, storage, or release of any Hazardous Substances, or threaten to release any Hazardous Substances, on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property (a) that is in violation of any Environmental Law, (b) which creates an Environmental Condition, or (c) which, due to the presence, use, or release of a Hazardous Substance, creates a condition that adversely affects the value of the Property. The preceding two sentences shall not apply to the presence, use, or storage on the Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Property (including, but not limited to, hazardous substances in consumer products).

Borrower shall promptly give Lender written notice of (a) any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving the Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge, (b) any Environmental Condition, including but not limited to, any spilling, leaking, discharge, release or threat of release of any Hazardous Substance, and (c) any condition caused by the presence, use or release of a Hazardous Substance which adversely affects the value of the Property. If Borrower learns, or is notified by any governmental or regulatory authority, or any private party, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Borrower shall promptly take all necessary remedial actions in accordance with Environmental Law. Nothing herein shall create any obligation on Lender for an Environmental Cleanup. Borrower agrees to indemnify and hold Lender free and harmless from and against all loss, costs (including attorneys' fees and costs), damage (including consequential damages), and expenses Lender may sustain by reason of the assertion against Lender by any third-party of any claim in connection with Hazardous Substances on, in or affecting the Property. Borrower further agrees that Lender shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any claims related to Hazardous Substances on, in or affecting the Property, and shall pay any such attorney fees and expenses Lender incurs in connection therewith.

19. Additional Property Subject To The Security Instrument. This Security Instrument also constitutes a security agreement within the meaning of the Uniform Commercial Code as adopted in the State of Wisconsin (the "UCC"). In addition to the Property described in the Security Instrument, the following items now or hereafter attached to the Property to the extent they are fixtures are added to the Property description, and shall also constitute the Property covered by the Security Instrument: building materials, appliances and goods of every nature whatsoever now or hereafter located in, on, or used, or intended to be used in connection with the Property, including, but not limited to, those for the purposes of supplying or distributing heating. cooling, electricity, gas, water. air and light, fire prevention and extinguishing apparatus, security and access control apparatus, plumbing, bath tubs, water heaters, water closets, sinks, ranges, stoves, refrigerators, dishwashers, disposals, washers, dryers, awnings, storm windows. storm doors, screens, blinds, shades, curtains and curtain rods, attached mirrors, cabinets, paneling, attached floor coverings, irrigation pipes and pumps, livestock fencing and pens, windmills and related equipment and pumps and specifically: All water and water rights now owned or hereafter acquired by Debtor and howsoever evidenced, whether such water and water rights are riparian, appropriative or otherwise and whether or not appurtenant to the real estate described herein, all ditch/pond and ditch/pond rights and any shares of stock, licenses, permits and contracts evidencing such water or ditch rights, and all wells, reservoirs, dams, embankments or fixtures relating thereto, along with all replacements, substitutions, accessions thereto and proceeds derived therefrom.

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All irrigation equipment of every kind and nature, including but not limited to center irrigation pivots,, pumps, pvc pipe, sprinklers, motors, well equipment, pumps and power units, now owned or hereafter acquired by Debtor and now or hereafter located and situated on the real estate described herein, along with all replacements, substitutions, accessions thereto and proceeds derived therefrom.

All Seed Processing Equipment., all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by the Security Instrument. All of the foregoing together with the Property described in the Security Instrument (or the leasehold estate if the Security Instrument is on a leasehold) are referred to in this Security Instrument as the "Property."

20. Fixture Filing. This Security Instrument constitutes a "fixture filing" for the purposes of the UCC against all of the Property which is or is to become fixtures per the UCC.
21. Use of Property; Compliance With Law. Borrower shall not seek, agree to or make a change in the use of the Property or its zoning classification, unless Lender has agreed in writing to the change. Borrower shall comply with all laws, ordinances, regulations and requirements of any governmental body applicable to the Property.
22. Assignment of Leases. Upon Lender's request after default, Borrower shall assign to Lender all leases of the Property and all security deposits made in connection with leases of the Property. Upon the assignment, Lender shall have the right to modify, extend or terminate the existing leases and to execute new leases, in Lender's sole discretion. As used in this paragraph , the word "lease" shall mean "sublease" if the Security Instrument is on a leasehold.
23. Assignment of Rents; Appointment of Receiver; Lender In Possession. Specifically excepting any receipts or revenues Borrower receives from the sale of seed or other products produced, processed or stored at Borrower facilities on the Property, Borrower absolutely and unconditionally assigns and transfers to Lender all the rents and revenues ("Rents") of the Property, regardless of to whom the Rents of the Property are payable. Borrower authorizes Lender or Lender's agents to collect the Rents, and agrees that each tenant of the Property shall pay the Rents to Lender or Lender's agents. However, Borrower shall receive the Rents until (i) Lender has given Borrower notice of default pursuant to Sections 12 and 25 of the Security Instrument and (ii) Lender has given notice to the tenant(s) that the Rents are to be paid to Lender or Lender's agent. This assignment of Rents constitutes an absolute assignment and not an assignment for additional security only.

If Lender gives notices of default to Borrower: (i) all Rents received by Borrower shall be held by Borrower as trustee for the benefit of Lender only, to be applied to the sums secured by the Security Instrument; (ii) Lender shall be entitled to collect and receive all of the Rents of the Property; (iii) Borrower agrees that each tenant of the Property shall pay all Rents due and unpaid to Lender or Lender's agents upon Lender's written demand to the tenant; (iv) unless applicable law provides otherwise, all Rents collected by Lender or Lender's agents shall be applied first to the costs of taking control of and managing the Property and collecting the Rents, including, but not limited to, attorneys' fees, receiver's fees, premiums on receiver's bonds, repair and maintenance costs, insurance premiums, taxes, assessments and other charges on the Property, and then to the sums secured by the Security Instrument; (v) Lender, Lender's agents or any judicially appointed receiver shalt be liable to account for only those Rents actually received; and (vi) Lender shall be entitled to have a receiver appointed to take possession of and manage the Property and collect the Rents and profits derived from the Property without any showing as to the inadequacy of the Property as security.

If the Rents of the Property are not sufficient to cover the costs of taking control of and managing the Property and of collecting the Rents any funds expended by Lender for such purposes shall become indebtedness of Borrower to Lender secured by the Security Instrument pursuant to Section 7 of the Security Instrument.

Borrower represents and warrants that Borrower has not executed any prior assignment of the Rents and has not performed, and will not perform, any act that would prevent Lender from exercising its rights under this paragraph.

Lender, or Lender's agents or a judicially appointed receiver, shall not be required to enter upon, take control of or maintain the Property before or after giving notice of default to Borrower. However, Lender, or Lender's agents or a judicially appointed receiver, may do so at any time when a default occurs. Any application of Rents shall not cure or waive any default or invalidate any other right or remedy of Lender. This assignment of Rents of the Property shall terminate when all the sums secured by the Security Instrument are paid in full.

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24. Cross-Default Provision. Borrower's default or breach under any note or agreement in which Lender has an interest shall be a breach under the Security Instrument and Lender may invoke any of the remedies permitted by the Security Instrument.

NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows:

25. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 15 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may invoke the power of sale and any other remedies permitted by Applicable Law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 25, including, but not limited to, Reasonable Attorneys' Fees (as defined in Section 25) and costs of title evidence.

If Lender invokes the power of sale, Lender shall give notice of sale in the manner prescribed by Applicable Law to Borrower and to the other persons prescribed by Applicable Law. Lender shall publish the notice of sale, and the Property shall be sold in the manner prescribed by Applicable Law. Lender or its designee may purchase the Property at any sale. The proceeds of the sale shall be applied in the following order: (a) to all expenses of the sale, including, but not limited to, Reasonable Attorneys' Fees (as defined in Section 28); (b) to all sums secured by this Security Instrument; and (c) any excess to the clerk of the circuit court of the county in which the sale is held.

26. Release. Upon payment of all sums secured by this Security Instrument, Lender shall release this Security Instrument. Borrower shall pay any recordation costs. Lender may charge Borrower a fee for releasing this Security Instrument, but only if the fee is paid to a third party for services rendered and the charging of the fee is permitted under Applicable Law.
27. Accelerated Redemption Periods. If the Property is a one- to four-family residence that is owner-occupied at the commencement of a foreclosure, a farm, a church or owned by a tax exempt charitable organization, Borrower agrees to the provisions of Section 846.101 of the Wisconsin Statutes, and as the same may be amended or renumbered from time to time, permitting Lender, upon waiving the right to judgment for deficiency, to hold the foreclosure sale of real estate of 20 acres or less six months after a foreclosure judgment is entered. If the Property is other than a one- to four-family residence that is owner-occupied at the commencement of a foreclosure, a farm, a church, or a tax-exempt charitable organization, Borrower agrees to the provisions of Section 846.103 of the Wisconsin Statutes, and as the same may be amended or renumbered from time to time, permitting Lender, upon waiving the right to judgment for deficiency, to hold the foreclosure sale of real estate three months after a foreclosure judgment is entered.
28. Attorneys' Fees. If this Security Instrument is subject to Chapter 428 of the Wisconsin Statutes, "Reasonable Attorneys' Fees" shall mean only those attorneys' fees allowed by that Chapter.

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BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Security Instrument and in any Rider executed by Borrower and recorded with it.

S&W Seed Company, a Nevada corporation

________________________________
Signature
Matthew K. Szot, Chief Financial Officer[Sign Originals. Only]

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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA COUNTY OF )
               )
COUNTY OF        San Diego

On this 30^th day of   November  , 2017, before me,   Candelario Resendez  , personally appeared Matthew K. Szot, Executive Vice President of Finance and Administration and CFO of S&W Seed Company, Sole Member of Seed Holding, LLC, on behalf of said corporation, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the entities upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

/s/ Candelario Resendez
Signature
(Seal)

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Exhibit A

Lot 1 Certified Survey Map No. 884 recorded in Volume 4 of Columbia County Certified Survey Maps at Page 104 as Document No. 441386, Town of Arlington, Columbia County, Wisconsin.

AND

Lot 1 Certified Survey Map No. 3122 recorded in Volume 20 of Columbia County Certified Survey Maps at Page 118 as Document No. 593525, Town of Arlington, Columbia County, Wisconsin.

APN: 11002-392.A, 11002-392.01

Property Address: W813I St Hwy 60, Arlington, WI 53911

CROSS COLLATERALIZATION RIDER

Loan # R1036

THIS CROSS COLLATERALIZATION RIDER is made this November 30, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date, given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities

Columbia County, WI

[Property Address]

In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that on the date hereof the following other loans have been entered into:

Borrowers/Co-Signers' Names	Date	Loan Amount/Loan No.
S&W Seed Company	11/30/2017	$2,100,000.00/R1028

each of which is evidenced by a separate promissory note (the "Other Notes"), and each of which is secured by a separate Security Agreement (the "Other Security Instruments"). It is agreed that in addition to Borrower's Note, this Security Instrument secures the obligations, debts, and liabilities evidenced by the Other Notes and Other Security Instruments referenced herein, plus interest thereon, which is payable by Grantor to Lender.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Cross Col lateralization Rider.

S&W Seed Company, a Nevada corporation /s/ Matthew K. Szot 11/30/17
Signature Date
Matthew K. Szot, Chief Financial Officer [Sign Originals. Only]

Cross-Collaterization Rider

1

CROSS DEFAULT RIDER

Loan # R1036

THIS CROSS DEFAULT RIDER is made this November 30, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date, given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities

Columbia County, WI

[Property Address]

In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that on the date hereof the following other loans have been entered into:

Borrowers/Co-Signers' Names	Date	Loan Amount/Loan No.
S&W Seed Company	11/30/2017	$2,100,000.00/R1028

each of which is evidenced by a separate promissory note (the "Other Notes"), and each of which is secured by a separate Security Agreement (the "Other Security Instruments"). It is agreed that any default under this Security Instrument or this Note shall be deemed a default under the Other Notes and Other Security Instruments; and any default under any or all of the Other Notes or Other Security Instruments shall be deemed to be a default under this Note and this Security Instrument.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Cross Default Rider.

MULTISTATE CROSS DEFAULT RIDER

1

S&W Seed Company, a Nevada corporation /s/ Matthew K. Szot 11/30/17
Signature Date
Matthew K. Szot, Chief Financial Officer [Sign Originals. Only]

MULTISTATE CROSS DEFAULT RIDER

2

FINANCIAL INFORMATION AND COVENANTS RIDER

Loan # R1036

THIS FINANCIAL INFORMATION AND COVENANTS RIDER (this "Rider") is made this Thirtieth day of November, 2017, and is incorporated into and shall be deemed to amend and supplement the Mortgage, Deed of Trust, or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Note to Conterra Agricultural Capital, LLC (the "Lender") of the same date and covering the Property described in the Security Instrument and located at:

Agricultural Land and Seed Processing Facilities
Columbia County, WI
[Property Address]

FINANCIAL COVENANTS. In addition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree that Borrower will prepare and maintain Borrower's financial records using consistently applied generally accepted accounting principles then in effect. Borrower will provide Lender with financial information in a form reasonably acceptable to Lender and under the following terms:

(If "X"ed the following terms are agreed to.)

T Frequency. Annually, Borrower will provide to Lender Borrower's financial statements, tax returns, annual internal audit reports or those prepared by independent accountants within 90 days after the close of each fiscal year. Any annual financial statements that Borrower provides will be reviewed statements.

o Interim Financial Reports. Borrower will provide Lender with interim financial reports on a basis, and within days after the close of this business period. Interim financial statements will be statements.

o Requested Information. Borrower will provide Lender with any other information about Borrower's operations, financial affairs and condition within 0 days after Lender's request.

o Leverage Ratio. Borrower will maintain at all times a ratio of total liabilities to tangible net worth, determined under consistently applied generally accepted accounting principles, of 0.000 to 1.0 (Total Liabilities to Tangible Net Worth Ratio) or less.

o Minimum Tangible Net Worth. Borrower will maintain at all times a total tangible net worth, determined under consistently applied generally accepted accounting principles, of $0.00 (Minimum Tangible Net Worth) or more. Tangible net worth is the amount by which total assets exceed total liabilities. For determining tangible net worth, total assets will exclude all intangible assets, including without limitation goodwill, patents, trademarks, trade names, copyrights, and franchises, and will also exclude any accounts receivable that do not provide for a repayment schedule.

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER--
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

1

o Minimum Current Ratio. Borrower will maintain at all times a ratio of current assets to current liabilities, determined under consistently applied generally accepted accounting principles, of 0 to 1.0 (Minimum Current Ratio) or more.

o Minimum Working Capital. Borrower will maintain at all times a working capital, determined under consistently applied generally accepted accounting principles by subtracting current liabilities from current assets, of $0.00 (Minimum Working Capital) or more. For this determination, current assets exclude (Excluded Current Assets.). Likewise, current liabilities include (1) all obligations payable on demand or within one year after the date on which the determination is made, and (2) final maturities and sinking fund payments required to be made within one year after the date on which the determination is made, but exclude all liabilities or obligations that Borrower may renew or extend to a date more than one year from the date of this determination.

T EBITDA. Adjusted EMMA/Total Annual Debt Payments no less than 1.30x (measured annually on Borrower's fiscal year basis and calculated based on Borrower's financial statements delivered 90 days after fiscal year end).

T Debt to Asset Ratio. Debt to Asset Ratio shall not be greater than 60% (measured annually as of the end of Borrower's fiscal year and calculated based Borrower's financial statements delivered 90 days after fiscal year end).

Capitalized terms used, but not defined, in this Rider have the respective meanings set forth in annex A hereto. All determinations of Borrower's compliance with the foregoing covenants will be made exclusively by reference to Borrower's financial statements delivered pursuant hereto.

BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants contained in this Financial Information and Covenants Rider.

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER--
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

2

S&W Seed Company, a Nevada corporation /s/ Matthew K. Szot 11/30/17
Signature Date
Matthew K. Szot, Chief Financial Officer [Sign Originals. Only]

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER--
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

3

ANNEX A

As used in this Rider, the following terms have the following meanings:

"Adjusted EBITDA" means, for any fiscal year of Borrower, the result of (a) Borrower's Consolidated Net Earnings for such fiscal year plus, without duplication, the aggregate amounts deducted in determining such Consolidated Net Earnings in respect of (i) Consolidated Interest Expense, (ii) Consolidated Income Tax Expense, (iii) Consolidated Depreciation and Amortization Charges, (iv) non-recurring separation charges, (v) non-recurring reserve for uncollectible sublease and stand establishment receivables, (vi) non-cash expenses incurred in connection with stock-based compensation, (vii) non-cash expenses incurred in connection with amortization of debt discount, and (viii) non-cash expenses incurred prior to December 31, 2017 in connection with derivative warrant liability; minus (b) to the extent included in Consolidated Net Earnings for such period, non-cash gains incurred prior to December 31, 2017 in connection with derivative warrant liability.

"Consolidated" means the resultant consolidation of the financial statements of Borrower and its subsidiaries in accordance with generally accepted accounting principles in the United States, including principles of consolidation consistent with those applied in preparation of the financial statements delivered by Borrower pursuant to this Rider.

"Consolidated Depreciation and Amortization Charges" means, for any fiscal year of Borrower, the aggregate of all depreciation and amortization charges for fixed assets, leasehold improvements and general intangibles (specifically including goodwill) of Borrower for such period, as determined on a Consolidated basis.

"Consolidated Income Tax Expense" means, for any fiscal year of Borrower, all provisions for taxes based on the gross or net income of Borrower (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto), as determined on a Consolidated basis.

"Consolidated Indebtedness" means, as of the end of any fiscal year of Borrower, the total Indebtedness of Borrower as of such date, as determined on a Consolidated basis.

"Consolidated Interest Expense" means, for any fiscal year of Borrower, the interest expense of Borrower for such fiscal year, as determined on a Consolidated basis.

"Consolidated Net Earnings" means, for any fiscal year of Borrower, the net income (loss) of Borrower for such fiscal year, as determined on a Consolidate basis,

"Consolidated Total Assets" means, as of the end of any fiscal year of Borrower, the total assets of Borrower as of such date, as determined on a Consolidated basis,

"Debt to Asset Ratio" means, as of the end of any fiscal year of Borrower, the ratio of (a) Consolidated Indebtedness to (b) Consolidated Total Assets.

"Indebtedness" means, without duplication, (a) all obligations to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (c) all obligations under conditional sales or other title retention agreements, (d) all obligations (contingent or otherwise) under any letter of credit or banker's acceptance, (e) all net obligations under any currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device, ( 0 all synthetic leases, (g) all capitalized lease obligations, (h) all obligations of Borrower with respect to asset securitization financing programs, (i) all obligations to advance funds to, or to purchase assets, property or services from, any other person or entity in order to maintain the financial condition of such person or entity, (j) all indebtedness of the types referred to in subparts (a) through (i) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which Borrower is a general partner or joint venturer, unless such indebtedness is expressly made non-recourse to Borrower, (k) any other transaction (including forward sale or purchase agreements) having the commercial effect of a borrowing of money entered into by Borrower to finance its operations or capital requirements, and (I) any guaranty of any obligation described in subparts (a) through (k) above.

"Total Annual Debt Payments" means, for any fiscal year of Borrower, the aggregate, without duplication, of (a) Borrower's Consolidated Interest Expense paid in cash for such fiscal year, and (b) Borrower's principal payments on Consolidated Indebtedness paid in cash for such fiscal year, excluding, in each case, (i) payments of principal under the Credit and Security Agreement, dated as of September 22, 2015, between Borrower and KeyBank National Association, as amended from time to time, or any replacement facility therefore, (ii) payments of principal under any working capital line of credit maintained by Borrower's Seed Genetics International Pty Ltd subsidiary and (iii) payments of principal that certain Promissory Note dated December 31, 2014 made by Borrower in favor and for the benefit of Pioneer Hi-Bred International, Inc., as amended from time to time.

MULTISTATE FINANCIAL INFORMATION AND COVENANTS RIDER--
Farmer Mac UNIFORM INSTRUMENT Form FM 5001 4/23/2007

4

EX-10.6

Exhibit 10.6

CONFIDENTIAL

THIRD AMENDMENT TO
CONTRACT ALFALFA PRODUCTION SERVICES AGREEMENT

This Third Amendment to Contract Alfalfa Production Services Agreement (this "Amendment") is made this 21st day of December, 2017, by and between Pioneer Hi-Bred International, Inc., an Iowa corporation ("Pioneer"), and S&W Seed Company, a Nevada corporation ("Contractor"). Pioneer and Contractor are collectively referred to herein as the "Parties" and each individually as a "Party".

WHEREAS, the Parties entered into that certain Contract Alfalfa Production Services Agreement dated December 31, 2014 (as thereafter amended from time to time, the "Agreement").

WHEREAS, the Parties now wish to amend the Agreement as provided in this Amendment.

NOW, THEREFORE, for and in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the Parties hereby agree as follows:

1. As used in this Amendment, capitalized terms not defined herein shall have the meanings ascribed to them in the Agreement.

2. Section 15(A) of the Agreement shall be amended by deleting the text therein in its entirety and inserting the following in lieu thereof:

This Agreement shall be effective as of the date first written above and, unless terminated as set forth below in Section 15(B) or Section 15(C), shall continue until the earlier of (i) the date on which the parties shall execute and close under the Second APSA (as such term is defined in the APSA) or (ii) February 28, 2018; provided, however, that upon the prior written consent of Contractor and Pioneer, this Agreement may continue until March 31, 2018. Notwithstanding anything herein to the contrary, the parties acknowledge and agree that from December 31, 2017 through the expiration or earlier termination of this Agreement: (i) Contractor shall only conduct activities to complete the Production Services (exclusive of any Field Services) with respect to the 2017 Contracted Amounts; provided, that if Contractor and Pioneer agree in writing that this Agreement may continue until March 31, 2018, Contractor may, to the extent necessary, continue to complete seed treatment, coating and packaging of the 2017 Contracted Amounts (and no other Production Services without the written consent of Pioneer) through such date; (ii) Contractor shall not further engage in any future production with respect to any Alfalfa Varieties; (iii) Contractor shall not enter into any new, or amend, modify or terminate any existing Grower Contract or New Grower Contract without the prior written instruction or consent of Pioneer (including the instruction provided to Contractor pursuant to the letter from Pioneer dated November 13, 2017); (iv) except as expressly set forth in Section 9, no compensation shall be due and payable by Pioneer with respect to the performance by Contractor of the services under the Agreement during the period commencing January 1, 2018 and ending on the expiration or earlier termination of this Agreement; and (v) except as expressly set forth in Section 15(D), Contractor shall, in all events, remain liable for, and shall satisfy, pay and discharge, all amounts due and payable to any grower under any Grower Contract or New Grower Contract, in each case, pursuant to the terms of such agreements.

3. This Amendment shall be effective as of the date first written above.

4. In case of any inconsistencies between the terms and conditions contained in this Amendment and the terms and conditions contained in the Agreement, the terms and conditions of this Amendment shall control.

5. Except as set forth in this Amendment, (a) all provisions of the Agreement shall remain unmodified and in full force and effect and (b) nothing contained in this Amendment shall amend, modify or otherwise affect the Agreement or any Party's rights or obligations contained therein.

6. This Amendment shall be governed by the substantive laws of the State of Iowa, without regard to its conflicts of laws principles. Any controversy or claim arising out of or relating to this Amendment shall be handled in accordance with Section 16 of the Agreement.

7. This Amendment (along with the Agreement and the other Transaction Documents (as such term is defined in the APSA)) supersedes all prior agreements between the Parties with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the Parties with respect to its subject matter.

8. All of the terms and provisions of this Amendment shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns .

9. This Amendment may be executed in any number of counterparts (including via facsimile or portable document format (PDF)), each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment as of the date first above written.

PIONEER HI-BRED INTERNATIONAL, INC. S&W SEED COMPANY	S&W SEED COMPANY
By: /s/ Curt Clausen Name: Curt Clausen Title: Director, Global Forage	By: /s/ Matthew Szot Name: Matthew Szot Title: EVP and CFO

[Signature Page to Third Amendment to Contract Alfalfa Production Services Agreement]

EX-10.7

Exhibit 10.7

CONFIDENTIAL

FIRST AMENDMENT TO RESEARCH AGREEMENT

This First Amendment to Research Agreement (this "Amendment") is made this 21st day of December, 2017, by and between Pioneer Hi-Bred International, Inc., an Iowa corporation ("Pioneer"), and S&W Seed Company, a Nevada corporation ("Researcher"). Pioneer and Contractor are collectively referred to herein as the "Parties" and each individually as a "Party".

WHEREAS, the Parties entered into that certain Research Agreement dated December 31, 2014 (the "Agreement").

WHEREAS, the Parties now wish to amend the Agreement as provided in this Amendment.

NOW, THEREFORE, for and in consideration of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the Parties hereby agree as follows:

1. As used in this Amendment, capitalized terms not defined herein shall have the meanings ascribed to them in the Agreement.

2. Section 3.2 of the Agreement shall be amended by inserting the following immediately after the existing text thereof:

Notwithstanding anything herein to the contrary, the Parties acknowledge and agree that from and after January 1, 2018, (x) the Research Plan in effect as of December 31, 2017 shall be extended for all purposes under the Agreement until the expiration or earlier termination of this Agreement, and (y) except for those Services specified on the Research Plan in effect as of December 31, 2017, Researcher shall not, and shall cause its Affiliates not to, perform any Research activities or other Services pursuant to this Agreement without the prior written consent of Pioneer.

3. Section 8.1 of the Agreement shall be amended by deleting the text therein in its entirety and inserting the following in lieu thereof:

This Agreement shall be effective as of the date first written above and, unless terminated as set forth below in Section 8.2 or Section 8.3, shall continue until the earlier of (i) the execution and closing under the Second APSA (as such term is defined in the APSA) or (ii) February 28, 2018.

4. This Amendment shall be effective as of the date first written above.

5. In case of any inconsistencies between the terms and conditions contained in this Amendment and the terms and conditions contained in the Agreement, the terms and conditions of this Amendment shall control.

6. Except as set forth in this Amendment, (a) all provisions of the Agreement shall remain unmodified and in full force and effect and (b) nothing contained in this Amendment shall amend, modify or otherwise affect the Agreement or any Party's rights or obligations contained therein.

7. This Amendment shall be governed by the substantive laws of the State of Iowa, without regard to its conflicts of laws principles. Any controversy or claim arising out of or relating to this Amendment shall be handled in accordance with Section 10.2 of the Agreement.

8. This Amendment (along with the Agreement and the other Transaction Documents (as such term is defined in the APSA)) supersedes all prior agreements between the Parties with respect to its subject matter and constitutes a complete and exclusive statement of the terms of the agreement between the Parties with respect to its subject matter.

9. All of the terms and provisions of this Amendment shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

10. This Amendment may be executed in any number of counterparts (including via facsimile or portable document format (PDF)), each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument.

[Signature Page Follows]

2.

IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment as of the date first above written.

PIONEER HI-BRED INTERNATIONAL, INC. S&W SEED COMPANY	S&W SEED COMPANY
By: /s/ Curt Clausen Name: Curt Clausen Title: Director, Global Forage	By: /s/ Matthew Szot Name: Matthew Szot Title: EVP and CFO

[Signature Page to First Amendment to Research Agreement]

EX-31.2

EX-32.1

EX-32.2

XML

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2017	Feb. 08, 2018
Document And Entity Information
Entity Registrant Name	S&W Seed Co
Entity Central Index Key	0001477246
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		24,336,913
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2017	Jun. 30, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 5,454,694	$ 745,001
Accounts receivable, net	25,250,475	23,239,325
Inventories, net	70,486,985	31,489,945
Prepaid expenses and other current assets	1,500,066	1,249,921
TOTAL CURRENT ASSETS	102,692,220	56,724,192
Property, plant and equipment, net	13,630,123	13,581,576
Intangibles, net	33,810,687	34,939,079
Goodwill	10,292,265	10,292,265
Other assets	1,568,286	1,563,176
TOTAL ASSETS	161,993,581	117,100,288
CURRENT LIABILITIES
Accounts payable	32,831,640	7,157,745
Accounts payable - related parties	117,164	331,694
Deferred revenue	55,442	880,326
Accrued expenses and other current liabilities	2,671,495	2,733,718
Lines of credit, net	27,592,603	27,399,784
Current portion of contingent consideration obligation	0	2,500,000
Current portion of long-term debt, net	358,864	10,309,664
TOTAL CURRENT LIABILITIES	63,627,208	51,312,931
Long-term debt, net, less current portion	13,203,191	1,096,155
Derivative warrant liabilities	0	2,836,600
Other non-current liabilities	781,629	632,947
TOTAL LIABILITIES	77,612,028	55,878,633
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.001 par value; 50,000,000 shares authorized; 24,353,300 issued and 24,328,300 outstanding at December 31, 2017; 18,004,681 issued and 17,979,681 outstanding at June 30, 2017	24,353	18,004
Treasury stock, at cost, 25,000 shares	(134,196)	(134,196)
Additional paid-in capital	108,568,030	83,312,518
Accumulated deficit	(18,653,679)	(16,436,286)
Accumulated other comprehensive loss	(5,422,955)	(5,538,385)
TOTAL STOCKHOLDERS' EQUITY	84,381,553	61,221,655
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 161,993,581	$ 117,100,288

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2017	Jun. 30, 2017
STOCKHOLDERS' EQUITY
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	24,353,300	18,004,681
Common stock, shares outstanding	24,328,300	17,979,681
Treasury stock, shares	25,000	25,000

XML

Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Revenue	$ 20,532,796	$ 24,225,744	$ 31,244,512	$ 36,475,317
Cost of revenue	15,860,629	19,005,270	24,236,757	29,311,580
Gross profit	4,672,167	5,220,474	7,007,755	7,163,737
Operating expenses
Selling, general and administrative expenses	2,446,955	2,592,059	5,361,035	5,047,263
Research and development expenses	855,164	748,571	1,597,081	1,490,113
Depreciation and amortization	870,981	842,454	1,759,233	1,677,151
Disposal of property, plant and equipment gain	(15,413)	0	(81,776)	0
Total operating expenses	4,157,687	4,183,084	8,635,573	8,214,527
Income (loss) from operations	514,480	1,037,390	(1,627,818)	(1,050,790)
Other expense
Foreign currency loss (gain)	7,472	(2,837)	22,030	(6,483)
Change in derivative warrant liabilities	341,199	(959,200)	(431,300)	168,500
Change in contingent consideration obligation	0	57,282	0	164,363
Loss on equity method investment	0	0	0	49,249
Interest expense - amortization of debt discount	33,100	381,660	67,099	981,118
Interest expense - convertible debt and other	383,894	295,042	731,623	647,584
Income (loss) before income taxes	(251,185)	1,265,443	(2,017,270)	(3,055,121)
Provision (benefit) from income taxes	148,702	106,485	200,123	(996,923)
Net income (loss)	$ (399,887)	$ 1,158,958	$ (2,217,393)	$ (2,058,198)
Net income (loss) per common share:
Basic	$ (0.02)	$ 0.07	$ (0.11)	$ (0.12)
Diluted	$ (0.02)	$ 0.01	$ (0.11)	$ (0.12)
Weighted average number of common shares outstanding:
Basic	21,130,960	17,821,547	20,643,973	17,467,370
Diluted	21,130,960	17,996,221	20,643,973	17,467,370

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Consolidated Statements Of Comprehensive Income Loss
Net income (loss)	$ (399,887)	$ 1,158,958	$ (2,217,393)	$ (2,058,198)
Foreign currency translation adjustment, net of income tax	(41,223)	(448,784)	115,430	(243,621)
Comprehensive income (loss)	$ (441,110)	$ 710,174	$ (2,101,963)	$ (2,301,819)

XML

Consolidated Statements of Stockholders' Equity - USD ($)	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Beginning balance, shares at Jun. 30, 2016	17,086,111	(25,000)
Beginning balance, amount at Jun. 30, 2016	$ 17,086	$ (134,196)	$ 78,282,461	$ (4,614,244)	$ (5,789,663)	$ 67,761,444
Stock-based compensation - options, restricted stock and RSU's	$ 0	0	578,659	0	0	578,659
Exercise of stock options, net of withholding taxes, shares	161,781
Exercise of stock options, net of withholding taxes, amount	$ 162	0	601,927	0	0	602,083
Net issuance to settle RSU's, shares	41,270
Net issuance to settle RSU's, amount	$ 41	0	(75,124)	0	0	(75,083)
Issuance of common stock upon conversion of principal and interest of convertible debentures, shares	684,321
Issuance of common stock upon conversion of principal and interest of convertible debentures	$ 684	0	3,160,589	0	0	3,161,273
Other comprehensive income	0	0	0	0	(243,621)	(243,621)
Net loss	$ 0	$ 0	0	(2,058,194)	0	(2,058,198)
Ending balance, shares at Dec. 31, 2016	17,973,483	(25,000)
Ending balance, amount at Dec. 31, 2016	$ 17,973	$ (134,196)	82,548,506	(6,672,442)	(6,033,284)	69,726,557
Beginning balance, shares at Jun. 30, 2016	17,086,111	(25,000)
Beginning balance, amount at Jun. 30, 2016	$ 17,086	$ (134,196)	78,282,461	(4,614,244)	(5,789,663)	$ 67,761,444
Exercise of stock options, net of withholding taxes, shares						232,000
Ending balance, shares at Jun. 30, 2017	18,004	(25,000)
Ending balance, amount at Jun. 30, 2017	$ 18,004,681	$ (134,196)	83,312,518	(16,436,286)	(5,538,385)	$ 61,221,655
Stock-based compensation - options, restricted stock and RSU's	$ 0	0	451,033	0	0	$ 451,033
Exercise of stock options, net of withholding taxes, shares						0
Net issuance to settle RSU's, shares	88,619
Net issuance to settle RSU's, amount	$ 89	0	(113,777)	0	0	$ (113,688)
Proceeds from sale of common stock, net of fees and expenses, shares	6,260,000
Proceeds from sale of common stock, net of fees and expenses, amount	$ 6,260	0	22,512,956	0	0	22,519,216
Reclassification of warrants upon expiration of repricing provisions	0	0	2,405,000	0	0	2,405,300
Other comprehensive income	0	0	0	0	115,430	115,430
Net loss	$ 0	$ 0	0	(2,217,393)	0	(2,217,393)
Ending balance, shares at Dec. 31, 2017	24,353,300	(25,000)
Ending balance, amount at Dec. 31, 2017	$ 24,353	$ (134,196)	$ 108,568,030	$ (18,653,679)	$ (5,422,955)	$ 84,381,553

XML

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (2,217,393)	$ (2,058,198)
Adjustments to reconcile net loss to net cash used in operating activities
Stock-based compensation	451,033	578,659
Bad debt expense	20,547	0
Depreciation and amortization	1,759,233	1,677,151
Gain on disposal of property, plant and equipment	(81,776)	0
Change in deferred tax asset	0	(1,034,439)
Change in foreign exchange contracts	100,864	234,286
Change in derivative warrant liabilities	(431,300)	168,500
Change in contingent consideration obligation	0	164,363
Amortization of debt discount	67,099	981,118
Loss on equity method investment	0	49,249
Changes in:
Accounts receivable	(1,960,907)	1,820,501
Inventories	(38,850,545)	(20,836,483)
Prepaid expenses and other current assets	(377,920)	72,841
Other non-current assets	(4,963)	0
Accounts payable	25,606,471	10,098,122
Accounts payable - related parties	(216,112)	3,462,649
Deferred revenue	(614,523)	(151,463)
Accrued expenses and other current liabilities	(67,000)	(1,150,794)
Other non-current liabilities	148,147	(61,677)
Net cash used in operating activities	(16,669,045)	(5,985,615)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment	(815,063)	(1,264,395)
Proceeds from disposal of property, plant and equipment	46,218	0
Additions to internal use software	0	(118,389)
Net cash used in investing activities	(768,845)	(1,382,784)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock	22,519,216	0
Net proceeds from exercise of common stock options	0	602,083
Taxes paid related to net share settlements of stock-based compensation awards	(113,688)	(75,083)
Borrowings and repayments on line of credit, net	38,574	5,646,664
Repayment of contingent consideration obligation	(2,500,000)	0
Borrowings of long-term debt	12,500,000	88,150
Debt issuance costs	(257,964)	0
Repayments of long-term debt	(10,113,415)	(169,598)
Repayments of convertible debt	0	(3,427,837)
Net cash provided by financing activities	22,072,723	2,664,379
EFFECT OF EXCHANGE RATE CHANGES ON CASH	74,860	(92,185)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	4,709,693	(4,796,205)
CASH AND CASH EQUIVALENTS, beginning of the period	745,001	6,904,500
CASH AND CASH EQUIVALENTS, end of period	5,454,694	2,108,295
Cash paid during the period for:
Interest	776,882	823,844
Income taxes	$ 42,244	$ 148,019

XML

NOTE 1 - BACKGROUND AND ORGANIZATION

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 1 - BACKGROUND AND ORGANIZATION

NOTE 1 - BACKGROUND AND ORGANIZATION

Organization

S&W Seed Company, a Nevada corporation (the "Company"), began as S&W Seed Company, a general partnership, in 1980 and was originally in the business of breeding, growing, processing and selling alfalfa seed. We then incorporated a corporation with the same name in Delaware in October 2009, which is the successor entity to Seed Holding, LLC, having purchased a majority interest in the general partnership between June 2008 and December 2009. Following the Company's initial public offering in May 2010, the Company purchased the remaining general partnership interests and became the sole owner of the general partnership's original business. Seed Holding, LLC remains a consolidated subsidiary of the Company.

In December 2011, the Company reincorporated in Nevada as a result of a statutory short-form merger of the Delaware corporation into its wholly-owned subsidiary, S&W Seed Company, a Nevada corporation.

On April 1, 2013, the Company, together with its wholly-owned subsidiary, S&W Seed Australia Pty Ltd, an Australia corporation ("S&W Australia"), consummated an acquisition of all of the issued and outstanding shares of Seed Genetics International Pty Ltd, an Australia corporation ("SGI"), from SGI's shareholders.

Business Overview

Since its establishment, the Company, including its predecessor entities, has been principally engaged in breeding, growing, processing and selling agricultural seeds, primarily alfalfa seed. The Company owns seed cleaning and processing facilities, which are located in Five Points, California, Nampa, Idaho and Keith, South Australia. The Company's seed products are primarily grown under contract by farmers. The Company began its stevia initiative in fiscal year 2010 and is currently focused on breeding improved varieties of stevia and developing marketing and distribution programs for its stevia products.

The Company has also been actively engaged in expansion initiatives through a combination of organic growth and strategic acquisitions, including in December 31, 2014, when the Company purchased certain alfalfa research and production facilities and conventional (non-GMO) alfalfa germplasm assets and assumed certain related liabilities ("the Pioneer Acquisition") of Pioneer Hi-Bred International, Inc. ("DuPont Pioneer").

More recently, in May 2016, the Company acquired the assets and business of SV Genetics, a private Australian company specializing in the breeding and licensing of proprietary hybrid sorghum and sunflower seed germplasm, which represented the Company's initial effort to diversify its product portfolio beyond alfalfa seed and stevia.

The Company's operations span the world's alfalfa seed production regions with operations in the San Joaquin and Imperial Valleys of California, five other U.S. states, Australia, and three provinces in Canada, and the Company sells its seed products in more than 30 countries around the globe.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The Company maintains its accounting records on an accrual basis in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The consolidated financial statements include the accounts of Seed Holding, LLC and its other wholly-owned subsidiaries, S&W Australia, which owns 100% of SGI, and Stevia California, LLC. All significant intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements are unaudited and, in the Company's opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company's consolidated balance sheets, statements of operations, comprehensive income (loss), cash flows and stockholders' equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2018. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended June 30, 2017, as filed with the SEC.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, derivative liabilities, contingencies and litigation. Significant estimates and assumptions are also used to establish the fair value and useful lives of depreciable tangible and certain intangible assets, goodwill as well as valuing stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows.

Certain Risks and Concentrations

The Company's revenue is principally derived from the sale of alfalfa seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 75% and 66% of its revenue for the three months ended December 31, 2017 and 2016, respectively. One customer accounted for 58% and 49% of its revenue for the six months ended December 31, 2017 and 2016, respectively.

Two customers accounted for 50% of the Company's accounts receivable at December 31, 2017. Two customers accounted for 52% of the Company's accounts receivable at June 30, 2017.

In addition, the Company sells a substantial portion of its products to international customers. Sales to international markets represented 23% and 30% of revenue during the three months ended December 31, 2017 and 2016, respectively. Sales to international markets represented 38% and 46% of revenue during the six months ended December 31, 2017 and 2016, respectively. The net book value of fixed assets located outside the United States was 19% and 19% of total assets at December 31, 2017 and June 30, 2017, respectively. Cash balances located outside of the United States may not be insured and totaled $1,209,181 and $192,879 at December 31, 2017 and June 30, 2017, respectively.

The following table shows revenue from external sources by destination country:

		Three Months Ended December 31,						Six Months Ended December 31,
		2017			2016			2017			2016
United States	$	15,740,706	77%	$	16,858,325	70%	$	19,265,254	62%	$	19,782,389	54%
Mexico		1,664,618	8%		1,404,133	6%		4,380,626	14%		3,745,027	10%
Argentina		1,183,423	6%		1,677,035	7%		2,742,619	9%		2,565,004	7%
Libya		563,673	3%		-	0%		752,673	2%		-	0%
Saudi Arabia		513,000	2%		1,843,949	8%		844,908	3%		5,221,772	15%
Australia		438,468	2%		71,175	0%		557,998	2%		790,636	2%
South Africa		338,993	2%		634,768	2%		467,342	1%		636,870	2%
Sudan		-	0%		67,016	0%		447,500	1%		67,016	0%
Other		89,915	0%		1,669,343	7%		1,785,592	6%		3,666,603	10%
Total	$	20,532,796	100%	$	24,225,744	100%	$	31,244,512	100%	$	36,475,317	100%

International Operations

The Company translates its foreign operations' assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income. Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

Revenue Recognition

The Company derives its revenue primarily from sale of seed and other crops and milling services. Revenue from seed and other crop sales is recognized when risk and title to the product is transferred to the customer.

The Company recognizes revenue from milling services according to the terms of the sales agreements and when delivery has occurred, performance is complete and pricing is fixed or determinable at the time of sale.

Additional conditions for recognition of revenue for all sales include the requirements that the collection of sales proceeds must be reasonably assured based on historical experience and current market conditions, the sales price is fixed and determinable and that there must be no further performance obligations under the sale.

Cost of Revenue

The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue.

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation.

Accounts Receivable

The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer's trade accounts receivable. The allowance for doubtful trade receivables was $526,495 at December 31, 2017 and June 30, 2017.

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or market, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities.

The Company's subsidiary, SGI, does not fix the final price for seed payable to its growers until the completion of a given year's sales cycle pursuant to its standard contract production agreement. SGI records an estimated unit price; accordingly, inventory, cost of revenue and gross profits are based upon management's best estimate of the final purchase price to growers.

Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. Because the germination rate, and therefore the quality, of alfalfa seed improves over the first year of proper storage, inventory obsolescence for alfalfa seed is not a material concern. The Company sells its inventory to distributors, dealers and directly to growers.

Components of inventory are:

		December 31,		June 30,
		2017		2017
Raw materials and supplies	$	235,910	$	266,551
Work in progress		23,890,021		5,603,825
Finished goods		46,361,054		25,619,569
	$	70,486,985	$	31,489,945

Property, Plant and Equipment

Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 5-28 years for buildings, 3-20 years for machinery and equipment, and 3-5 years for vehicles. 

Intangible Assets

Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 10-20 years for customer relationships and trade names and 3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 18 years for customer relationships and and 20 years for trade names and other intangible assets.

Goodwill

Goodwill originated from acquisitions of Imperial Valley Seeds, Inc. ("IVS") and SGI during the fiscal year 2013, the acquisition of the alfalfa business from DuPont Pioneer in fiscal year 2015 and the acquisition of assets of SV Genetics in May 2016. Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses market capitalization to estimate the fair value of its one reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. The Company performed a quantitative assessment of goodwill at June 30, 2017 and determined that goodwill was not impaired.

Equity Method Investments

Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company's board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company's accounts are not reflected within the Company's consolidated balance sheets and statements of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption ``Loss on equity method investment'' in the consolidated statements of operations. The Company's carrying value in an equity method investee company is included in the Company's consolidated balance sheets. When the Company's carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company's consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.

Cost Method Investments

Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method, the Company's share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges are recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded.

Research and Development Costs

The Company is engaged in ongoing research and development ("R&D") of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset.

Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial statement and tax basis of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company's effective tax rate for the three and six months ended December 31, 2017 has been effected by the valuation allowance on the Company's deferred tax assets.

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share ("EPS"), is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. 

Diluted EPS is calculated by adjusting both the numerator (net income (loss)) and the denominator (weighted-average number of shares outstanding) for the dilutive effects of potentially dilutive securities, including options, restricted stock awards, convertible debt and common stock warrants. 

• The if-converted method is used for convertible debt. Under the if-converted method, interest expense recognized in the period on the convertible debt is added to net income, and the number of shares that would be obtained upon conversion is added to the denominator. 
• The treasury stock method is used for common stock warrants, stock options, and restricted stock awards.  Under this method, consideration that would be received upon exercise (as well as remaining compensation cost to be recognized for awards not yet vested) is assumed to be used to repurchase shares of stock in the market, with the net number of shares assumed to be issued added to the denominator.

The calculation of Basic and Diluted EPS is shown in the table below. Classes of securities identified in the table with no adjustments in the calculation of Diluted EPS were determined to be antidilutive for the applicable periods. 

		Three Months Ended				Six Months Ended
		December 31,				December 31,
		2017		2016		2017		2016
Numerator:
Net income (loss)	$	(399,887)	$	1,158,958	$	(2,217,393)	$	(2,058,198)
Numerator for basis EPS		(399,887)		1,158,958		(2,217,393)		(2,058,198)
Effect of dilutive securities:
Warrants		-		(959,200)		-		-
		-		(959,200)		-		-
Numerator for diluted EPS	$	(399,887)	$	199,758	$	(2,217,393)	$	(2,058,198)
Denominator:
Denominator for basic EPS - weighted-average shares		21,130,960		17,821,547		20,643,973		17,467,370
Effect of dilutive securities:
Employee stock options		-		-		-		-
Employee restricted stock units		-		-		-		-
Warrants		-		174,674		-		-
Dilutive potential common shares		-		174,674		-		-
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions		21,130,960		17,996,221		20,643,973		17,467,370
Basic EPS	$	(0.02)	$	0.07	$	(0.11)	$	(0.12)
Diluted EPS	$	(0.02)	$	0.01	$	(0.11)	$	(0.12)

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset.

Derivative Financial Instruments

Foreign Exchange Contracts

The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts.

The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, "Derivatives and Hedging", which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company's foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings.

Derivative Liabilities

The Company reviews the terms of the common stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options and redemption options, which are required to be bifurcated and accounted for separately as derivative financial instruments.

Fair Value of Financial Instruments

The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows:

• Level 1. Observable inputs such as quoted prices in active markets;
• Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
• Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

No assets or liabilities were valued at fair value on a non-recurring basis as of December 31, 2017 or June 30, 2017.

The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates. The Company used a discounted cash flows approach to measure the fair value using Level 3 inputs.

Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows:

		Fair Value Measurements as of December 31, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	68,172	$	-
Contingent consideration obligations		-		-		-
Derivative warrant liabilities		-		-		-
Total	$	-	$	68,172	$	-
		Fair Value Measurements as of June 30, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	166,629	$	-
Contingent consideration obligations		-		-		2,500,000
Derivative warrant liabilities		-		-		2,836,600
Total	$	-	$	166,629	$	5,336,600

During the six months ended December 31, 2017, a change in derivative warrant liability of $431,300 was recorded in earnings. Upon expiration of the round-down pricing protection on December 31, 2017, the warrants were reclassified from derivative warrant liabilities to equity.

During the six months ended December 31, 2017, there was no change in the contingent consideration obligations. The DuPont contingent consideration was settled on December 1, 2017. Refer to Note 5 for further discussion. 

Recently Adopted and Issued Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). This standard eliminates Step 2 from the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for the Company beginning July 1, 2020. The adoption is not expected to have a material impact on the consolidated financial statements.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). This standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for the Company beginning July 1, 2018 and the Company is currently evaluating the impact that ASU 2016-15 will have on its consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). This standard was issued as part of the FASB's Simplification Initiative that involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. For public business entities, ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The method of adoption is dependent on the specific aspect of accounting addressed in this new guidance. Early adoption is permitted in any interim or annual period. The Company adopted ASU 2016-09 in the first quarter of the fiscal year ended June 30, 2018. The adoption did not have a material impact on the consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02: Leases ("ASU 2016-02"). This standard amends various aspects of existing accounting guidance for leases, including the recognition of a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. This standard also introduces new disclosure requirements for leasing arrangements. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective approach, and provides for certain practical expedients. The Company is evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements and related disclosures.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (``ASU 2014-09''). This standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most existing revenue recognition guidance under U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. The FASB recently issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. However, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date that defers the effective date of ASU 2014-09 for all public business entities by one year. As a result, ASU 2014-09 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements and related disclosures.

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NOTE 3 - GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 3 - GOODWILL AND INTANGIBLE ASSETS

NOTE 3 - GOODWILL AND INTANGIBLE ASSETS

The following table summarizes the activity of goodwill for the six months ended December 31, 2017 and the year ended June 30, 2017, respectively.

		Balance at				Balance at
		July 1, 2017		Additions		December 31, 2017
Goodwill	$	10,292,265	$	-	$	10,292,265

		Balance at				Balance at
		July 1, 2016		Additions		June 30, 2017
Goodwill	$	10,292,265	$	-	$	10,292,265

Intangible assets consist of the following:

		Balance at						Balance at
		July 1, 2017		Additions		Amortization		December 31, 2017
Trade name	$	1,244,306	$	-	$	(42,240)	$	1,202,066
Customer relationships		1,258,163		-		(50,604)		1,207,559
Non-compete		102,035		-		(31,032)		71,003
GI customer list		78,803		-		(3,582)		75,221
Supply agreement		1,153,415		-		(37,816)		1,115,599
Distribution agreement		6,728,753		-		(192,250)		6,536,503
Production agreement		111,670		-		(111,666)		4
Grower relationships		1,858,616		-		(52,704)		1,805,912
Intellectual property		21,725,539		-		(572,610)		21,152,929
Internal use software		677,779		-		(33,888)		643,891
	$	34,939,079	$	-	$	(1,128,392)	$	33,810,687

		Balance at						Balance at
		July 1, 2016		Additions		Amortization		June 30, 2017
Trade name	$	1,328,786	$	-	$	(84,480)	$	1,244,306
Customer relationships		1,359,371		-		(101,208)		1,258,163
Non-compete		198,999		-		(96,964)		102,035
GI customer list		85,967		-		(7,164)		78,803
Supply agreement		1,229,047		-		(75,632)		1,153,415
Distribution agreement		7,113,253		-		(384,500)		6,728,753
Production agreement		335,002		-		(223,332)		111,670
Grower relationships		1,964,024		-		(105,408)		1,858,616
Intellectual property		22,870,760		-		(1,145,221)		21,725,539
Internal use software		521,593		156,186		-		677,779
	$	37,006,802	$	156,186	$	(2,223,909)	$	34,939,079

Amortization expense totaled $555,471 and $555,977 for the three months ended December 31, 2017 and 2016, respectively. Amortization expense totaled $1,128,392 and $1,111,954 for the six months ended December 31, 2017 and 2016, respectively. Estimated aggregate remaining amortization is as follows:

		2018		2019		2020		2021		2022		Thereafter
Amortization expense	$	993,981	$	1,977,388	$	1,977,388	$	1,977,388	$	1,977,388	$	24,907,154

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NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

		December 31,		June 30,
		2017		2017
Land and improvements	$	2,090,069	$	2,223,674
Buildings and improvements		6,784,964		6,401,277
Machinery and equipment		5,680,599		5,435,542
Vehicles		1,166,596		1,005,455
Construction in progress		2,170,844		2,196,513
Total property, plant and equipment		17,843,072		17,262,461
Less: accumulated depreciation		(4,212,949)		(3,680,885)
Property, plant and equipment, net	$	13,630,123	$	13,581,576

Depreciation expense totaled $315,510 and $286,477 for the three months ended December 31, 2017 and 2016, respectively. Depreciation expense totaled $630,842 and $565,197 for the six months ended December 31, 2017 and 2016, respectively.

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NOTE 5 - DEBT

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 5 - DEBT

NOTE 5 - DEBT

Total debt outstanding, excluding convertible debt addressed in Note 6, are presented on the consolidated balance sheet as follows:

		December 31,		June 30,
		2017		2017
Working capital lines of credit
KeyBank	$	21,649,089	$	18,695,896
National Australia Bank Limited		6,115,026		8,703,888
Debt issuance costs		(171,512)		-
Total working capital lines of credit, net	$	27,592,603	$	27,399,784
Current portion of long-term debt
Keith facility (building loan) - National Australia Bank Limited	$	3,901	$	-
Keith facility (machinery & equipment loans) - National Australia Bank Limited		218,239		209,664
Unsecured subordinate promissory note		100,000		100,000
Promissory note - DuPont Pioneer		-		10,000,000
Secured real estate note - Conterra		112,711		-
Debt issuance costs		(77,563)		-
Secured equipment note - Conterra		18,473		-
Debt issuance costs		(16,897)		-
Total current portion, net		358,864		10,309,664
Long-term debt, less current portion
Keith facility (building loan) - National Australia Bank Limited		444,713		499,524
Keith facility (machinery & equipment loans) - National Australia Bank Limited		545,285		596,631
Secured real estate note - Conterra		10,287,289		-
Debt issuance costs		(138,917)		-
Secured equipment note - Conterra		2,081,527		-
Debt issuance costs		(16,706)		-
Total long-term portion, net		13,203,191		1,096,155
Total debt, net	$	13,562,055	$	11,405,819

On September 22, 2015, the Company and KeyBank National Association ("KeyBank") entered into a credit and securities agreement and related agreements with respect to a $20,000,000 aggregate principal amount revolving credit facility (the "KeyBank Credit Facility"), the principal amount of which was increased to $35,000,000 pursuant to a Fourth Amendment Agreement (the "Fourth Amendment") on September 13, 2017, as more fully described below. Under the Fourth Amendment, all amounts of unpaid principal and interest due under the KeyBank Credit Facility must be paid in full on or before September 12, 2019.

On October 4, 2016, the Company and KeyBank entered into a Second Amendment Agreement effective September 30, 2016 (the "Second Amendment"). The purpose of the Second Amendment was to provide certain temporary changes to the terms of the KeyBank Credit Facility, including: (i) temporarily increasing the borrowing capacity from $20.0 million to (a) up to $25.0 million between October 1, 2016 and November 30, 2016 and (b) up to $30.0 million from February 1, 2017 through March 31, 2017; (ii) temporarily allowing for a $4.0 million over-advance beyond the amounts otherwise available based on the borrowing base calculations, which was available through February 28, 2017; and (iii) temporarily expanding the borrowing base by reducing the reserves that KeyBank may establish with respect to grower payables to 75% between August 31, 2016 and February 28, 2017.

On March 13, 2017, the Company entered into a Third Amendment Agreement (the " Third Amendment"). The purpose of the Third Amendment was to provide certain temporary changes to the terms of the KeyBank Credit Facility, including: (i) further extending the temporary period during which the Company may borrow, repay and reborrow up to $30.0 million in the aggregate under the credit facility until April 21, 2017; and (ii) retroactively and temporarily allowing for over-advances, beyond amounts otherwise available based on the borrowing base calculations under the Credit Facility (a) of up to $3.5 million during the period from March 8, 2017 through March 10, 2017, (b) of up to $5.0 million during the period from March 11, 2017 through March 17, 2017, (c) of up to $6.0 million during the period from March 18, 2017 through March 24, 2017, (d) of up to $7.0 million during the period from March 25, 2017 through March 31, 2017 and (e) of up to $8.5 million during the period from April 1, 2017 through as late as April 20, 2017.

On September 13, 2017, the Company and Key Bank entered into the Fourth Amendment, pursuant to which the maturity date was extended to September 12, 2019 and the principal amount that the Company may borrow, repay and reborrow was increased to $35.0 million, subject to a requirement that the Company maintain a reduced loan balance of (i) not more than $20 million for at least 30 consecutive days over the prior 12 months (measured each quarter on a trailing 12 month basis) and (ii) not more than $25 million for at least 60 consecutive days over the prior 12 months (measured each quarter on a trailing 12 month basis). The Fourth Amendment generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable and 90% of eligible foreign accounts receivable, plus up to 65% of eligible inventory, subject to lender reserves. Loans may be based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.2% per annum), generally at the Company's option.

In the event of a default, at the option of KeyBank, the interest rate on all obligations owing will increase by 3% per annum over the rate otherwise applicable. The Company is required to maintain one or more lockbox or cash collateral accounts at KeyBank, in KeyBank's name, which provide for the collection and remittance of all proceeds from sales of Company product (which is collateral for the KeyBank Credit Facility) on a daily basis. Subject to certain exceptions, the KeyBank Credit Facility is secured by a first priority perfected security interest in all the Company's now owned and after acquired tangible and intangible assets as well as the assets of the Company's domestic subsidiaries, which have guaranteed the Company's obligations under the KeyBank Credit Facility. The KeyBank Credit Facility is further secured by a lien on, and a pledge of, 65% of the stock of S&W Australia Pty Ltd., the Company's wholly-owned subsidiary. The KeyBank Credit Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default. The Company was in compliance with all covenants at December 31, 2017. The outstanding balance on the KeyBank Credit Facility was $21,649,089 at December 31, 2017.

On October 1, 2012, the Company issued a five-year subordinated promissory note to IVS in the principal amount of $500,000 (the "IVS Note"), with a maturity date of October 1, 2017. The IVS Note accrues interest at a rate equal to one-month LIBOR at closing plus 2%, which equals 2.2%. Interest is payable in five annual installments, in arrears, on October 1 of each year. Amortizing payments of the principal of $100,000 will also be made on each October 1, with any remaining outstanding principal and accrued interest payable on the maturity date of the IVS Note. The outstanding balance on the IVS Note was $100,000 at December 31, 2017.

On December 31, 2014, the Company issued a three-year secured promissory note to DuPont Pioneer in the initial principal amount of $10,000,000 (the "Pioneer Note"), with a maturity date of December 31, 2017. The Pioneer Note accrued interest at 3% per annum. Interest was payable in three annual installments, in arrears, commencing on December 31, 2015. On December 31, 2014, the Company also issued contingent consideration to DuPont Pioneer which required the Company to increase the principal amount of the Pioneer Note by up to an additional $5,000,000 if the Company met certain performance metrics during the three-year period following December 31, 2014. The earn out payment to DuPont Pioneer was finalized in October 2017 and this amount of $2,500,000 was added to the Pioneer Note in October 2017. On December 1, 2017, the Company repaid the Pioneer Note. The repayment amount included the $2.5 million earn-out payment related to the Pioneer Acquisition that was added to the principal amount of the Pioneer Note in October 2017.

On November 30, 2017, the Company entered into a secured note financing transaction (the "Loan Transaction") with Conterra Agricultural Capital, LLC ("Conterra") for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, the Company issued two secured promissory notes (the "Notes") to Conterra as follows:

• Secured Real Estate Note. The Company issued one Note in the principal amount of $10.4 million (the "Secured Real Estate Note") that is secured by a first priority security interest in the property, plant and fixtures (the "Real Estate Collateral") located at the Company's Five Points, California and Nampa, Idaho production facilities and its Nampa, Idaho and Arlington, Wisconsin research facilities (the "Facilities"). The Secured Real Estate Note matures on November 30, 2020, which, subject to Conterra's approval, may be extended to November 30, 2022. The Secured Real Estate Note bears interest of 7.75% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $515,711, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Company may prepay the Secured Real Estate Note, in whole or in part, at any time after it has paid a minimum of twelve months of interest on the Secured Real Estate Note.

• Secured Equipment Note. The Company issued a second Note in the principal amount of $2.1 million (the "Secured Equipment Note") that is secured by a first priority security interest in certain equipment not attached to real estate located at the Facilities. The Secured Equipment Note is also secured by the Real Estate Collateral. The Secured Equipment Note matures on November 30, 2019, which, subject to Conterra's approval, may be extended to November 30, 2020. The Secured Equipment Note bears interest at a rate of 9.5% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $118,223, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Company may prepay the Secured Equipment Note, in whole or in part, at any time.

The Notes and related documents include customary representations and warranties in addition to customary affirmative and negative covenants (including financial covenants), and customary events of default that permit Conterra to accelerate the Company's obligations under the Notes, including, among other things, that a default under one of the Notes would constitute a default under the other Note. On December 1, 2017, the Company used the proceeds from the Loan Transaction to repay the Pioneer Note.

SGI finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility with National Australia Bank Ltd ("NAB"). The current facility, referred to as the 2016 NAB Facilities, was amended as of March 30, 2017 and expires on March 30, 2019. As of December 31, 2017, AUD $7,837,767 (USD $6,115,026) was outstanding under the 2016 NAB Facilities.

The 2016 NAB Facilities, as currently in effect, comprises two distinct facility lines: (i) an overdraft facility (the "Overdraft Facility"), having a credit limit of AUD $980,000 (USD $764,596 at December 31, 2017) and a borrowing base facility (the "Borrowing Base Facility"), having a credit limit of AUD $12,000,000 (USD $9,362,400 at December 31, 2017).

The Borrowing Base Facility permits SGI to borrow funds for periods of up to 180 days, at SGI's discretion, provided that the term is consistent with its trading terms. Interest for each drawdown is set at the time of the drawdown as follows: (i) for Australian dollar drawings, based on the Australian Trade Refinance Rate plus 1.5% per annum and (ii) for foreign currency drawings, based on the British Bankers' Association Interest Settlement Rate for the relevant foreign currency for the relevant period, or if such rate is not available, the rate reasonably determined by NAB to be the appropriate equivalent rate, plus 1.5% per annum. As of December 31, 2017, the Borrowing Base Facility accrued interest on Australian dollar drawings at approximately 5.07% calculated daily. The Borrowing Base Facility is secured by a lien on all the present and future rights, property and undertakings of SGI, the mortgage on SGI's Keith, South Australia property and the Company's corporate guarantee (up to a maximum of AUD $15,000,000).

The Overdraft Facility permits SGI to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of December 31, 2017, the Overdraft Facility accrued interest at approximately 6.77% calculated daily.

For both the Overdraft Facility and the Borrowing Base Facility, interest is payable each month in arrears. In the event of a default, as defined in the NAB Facility Agreement, the principal balance due under the facilities will thereafter bear interest at an increased rate per annum above the interest rate that would otherwise have been in effect from time to time under the terms of each facility (i.e., the interest rate increases by 4.5% per annum under the Borrowing Base Facility and the Overdraft Facility rate increases to 13.92% per annum upon the occurrence of an event of default).

Both facilities constituting the 2016 NAB Facilities are secured by a fixed and floating lien over all the present and future rights, property and undertakings of SGI and are guaranteed by the Company as noted above. The 2016 NAB Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the NAB facility agreements. SGI was in compliance with all NAB debt covenants at December 31, 2017.

In January 2015, NAB and SGI entered into a new business markets - flexible rate loan (the "Keith Building Loan") in the amount of AUD $650,000 (USD $507,130 at December 31, 2017). Since entering into the Keith Building Loan, the limit has been changed on three occasions, with the current limit being AUD $675,000 (USD $526,635 at December 31, 2017), and a separate machinery and equipment facility (the "Keith Machinery and Equipment Facility") has been added with the limit being changed on two occasions, the current limit being AUD $702,779 (USD $548,308) at December 31, 2017. At December 31, 2017, the principal balance on the Keith Building Loan was AUD $575,000 (USD $448,615) with unused availability of AUD $100,000 (USD $78,021). At December 31, 2017, the principal balance on the Keith Machinery and Equipment Facility was AUD $674,132 (USD $525,957) with no unused availability. In February 2016, NAB and SGI also entered into a master asset finance facility (the "Master Assets Facility"). At December 31, 2017, the principal balance on the Master Assets Facility was AUD $304,493 (USD $237,566) with unused availability of AUD $445,507 (USD $347,585). The Master Asset Facility has various maturity dates through 2021 and have interest rates ranging from 4.79% to 5.31%.

The Keith Building Loan and Keith Machinery and Equipment Facility are used for the construction of a building on SGI's Keith, South Australia property, purchase of adjoining land and for the machinery and equipment for use in the operations of the building. The Keith Building Loan matures on November 30, 2024. The interest rate on the Keith Building Loan varies from pricing period to pricing period (each such period approximately 30 days), based on the weighted average of a specified basket of interest rates (6.11% as of December 31, 2017). Interest is payable each month in arrears. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. The Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the facility agreement. They are secured by a lien on all the present and future rights, property and undertakings of SGI, the Company's corporate guarantee and a mortgage on SGI's Keith, South Australia property.

The annual maturities of short-term and long-term debt are as follows:

Fiscal Year		Amount
2018	$	223,473
2019		572,693
2020		2,656,068
2021		10,150,465
2022		92,427
Thereafter		117,012
Total	$	13,812,138

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NOTE 6 - SENIOR CONVERTIBLE NOTES AND WARRANTS

6 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

NOTE 6 - SENIOR CONVERTIBLE NOTES AND WARRANTS

NOTE 6 - SENIOR CONVERTIBLE NOTES AND WARRANTS

On December 31, 2014, the Company consummated the sale of senior secured convertible debentures (the "Debentures") and common stock purchase warrants (the "Warrants") to various institutional investors ("Investors") pursuant to the terms of a securities purchase agreement among the Company and the Investors. At closing, the Company received $27,000,000 in gross proceeds. Offering expenses of $1,931,105 attributed to the Debentures were recorded as deferred financing fees and recorded as a debt discount and offering expenses of $424,113 attributed to the Warrants were expensed during the year ended June 30, 2015. The net proceeds were paid directly to DuPont Pioneer in partial consideration for the purchase of certain DuPont Pioneer assets, the closing for which also took place on December 31, 2014.

Debentures

At the date of issuance, the Debentures were due and payable on November 30, 2017, unless earlier converted or redeemed. The Debentures bear interest on the aggregate unconverted and then outstanding principal amount at 8% per annum, payable in arrears monthly beginning February 2, 2015. Commencing on the occurrence of any Event of Default (as defined in the Debentures) that results in the eventual acceleration of the Debentures, the interest rate will increase to 18% per annum. The monthly interest is payable in cash, or in any combination of cash or shares of the Company's common stock at the Company's option, provided certain "equity conditions" defined in the Debentures are satisfied.

Beginning on July 1, 2015, the Company was required to make monthly payments of principal as well, payable in cash or any combination of cash or shares of its common stock at the Company's option, provided all of the applicable equity conditions are satisfied. The Debentures contain certain rights of acceleration and deferral at the holder's option in the event a principal payment is to be made in stock and contains certain limited acceleration rights of the Company, provided certain conditions are satisfied.

During Fiscal Year 2016, the Company accelerated three redemption payments totaling $2,830,049.

During the year ended June 30, 2017, certain holders of the Debentures converted an aggregate of $3,168,342 of principal and interest into 684,321 shares of the Company's common stock in accordance with the terms of the Debentures. Upon conversion, the Company recognized interest expense of $194,939 related to unamortized debt discount on the Debentures and incurred $7,070 of stock issuance costs.

As of June 30, 2017, the Debentures were fully retired and had no outstanding balance.

Warrants

The Warrants entitle the holders to purchase, in the aggregate, 2,699,999 shares of the Company's common stock. The Warrants are exercisable through their expiration on June 30, 2020, unless earlier redeemed. The Warrants were initially exercisable at an exercise price equal to $5.00. On September 30, 2015, pursuant to the terms of the Warrants, the exercise price was reset to $4.63. In addition, if the Company issues or is deemed to have issued securities at a price lower than the then applicable exercise price during the three-year period ending December 31, 2017, the exercise price of the Warrants will adjust based on a weighted average anti-dilution formula ("down-round protection"). On November 24, 2015, the Company closed on a private placement transaction in which 1,180,722 common shares were sold at $4.15 per share. Pursuant to the down-round protection terms of the Warrants, the exercise price was adjusted to $4.59 on November 24, 2015. On February 29, 2016, the Company completed a rights offering and accompanying noteholders' participation rights offering in which an aggregate of 2,125,682 shares of common stock were sold at $4.15 per share, triggering an adjustment of the exercise price of the Warrants to $4.53. On July 19, 2017, the Company completed a private placement transaction in which an aggregate of 2,685,000 shares of common stock were sold at $4.00 per share, triggering an adjustment of the exercise price of the Warrants to $4.46. On December 22, 2017, the Company completed a rights offering and backstop commitment in which an aggregate of 3,500,000 shares of common stock were sold at $3.50 per share, triggering an adjustment of the exercise price of the Warrants to $4.32. The down-round protection provision of the warrants expired on December 31, 2017.

The Warrants may be exercised for cash, provided that, if there is no effective registration statement available registering the exercise of the Warrants, the Warrants may be exercised on a cashless basis. At any time that (i) all equity conditions set forth in the Warrants have been satisfied, and (ii) the closing sales price of the common stock equals or exceeds $12.00 for 15 consecutive trading days (subject to adjustment for stock splits, reverse stock splits and other similar recapitalization events), the Company may redeem all or any part of the Warrants then outstanding for cash in an amount equal to $0.25 per Warrant.

Accounting for the Conversion Option and Warrants

Due to the down-round price protection included in the terms of the Warrants, the Warrants are treated as a derivative liability in the consolidated balance sheet, measured at fair value and marked to market each reporting period until the earlier of the Warrants being fully exercised or December 31, 2017, when the down-round protection expires. The down-round price protection expired on December 31, 2017, accordingly, the fair value of the Warrants as of December 31, 2017 was reclassified to additional paid in capital within the equity section of the balance sheet. The initial fair value of the Warrants on December 31, 2014 was $4,862,000. At December 31, 2017 and June 30, 2017, the fair value of the Warrants was estimated at $2,405,300 and $2,836,600, respectively. The Warrants were valued at December 31, 2017 using the Monte Carlo simulation model, under the following assumptions: (i) remaining expected life of 2.5 years, (ii) volatility of 39.0%, (iii) risk-free interest rate of 1.92% and (iv) dividend rate of zero. The aggregate fair value of the Warrants derived via the Monte Carlo analysis were also weighted by a prior third party market transaction and third party indications of fair value. The prior third party market transaction was provided a weighting of 10.0% while the third party indications of fair value were provided a 50% weighting in the fair value analysis.

The Warrants were valued at June 30, 2017 using the Monte Carlo simulation model, under the following assumptions: (i) remaining expected life of 3 years, (ii) volatility of 45.6%, (iii) risk-free interest rate of 1.54% and (iv) dividend rate of zero. The aggregate fair value of the Warrants derived via the Monte Carlo analysis were also weighted by a prior third party market transaction and third party indications of fair value. The prior third party market transaction was provided a weighting of 10.0% while the third party indications of fair value were provided a 50% weighting in the fair value analysis.

Of the $27,000,000 in principal amount of Debentures sold in December 2014, $22,138,000 of the initial proceeds was allocated to the Debentures. The required redemption contingent upon the real estate sale was determined to be an embedded derivative not clearly and closely related to the borrowing. As such, it was bifurcated and treated as a derivative liability, recorded initially at its fair value of $150,000, leaving an allocation to the host debt of $21,988,000. The difference between the initial amount allocated to the borrowing and the face value of the Debentures was amortized over the term of the Debentures using the effective interest method. Debt issuance costs totaling $1,931,105 were also amortized over the term of the Debentures using the effective interest method. In addition, the reduction in the conversion price of the Debentures as of September 30, 2015 resulted in a beneficial conversion feature of $871,862, which was recognized as additional debt discount and an increase to additional paid-in capital.

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NOTE 7 - WARRANTS

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 7 - WARRANTS

NOTE 7 - WARRANTS

The following table summarizes the total warrants outstanding at December 31, 2017:

			Exercise Price	Expiration	Outstanding as			Outstanding as of
	Issue Date		Per Share	Date	of June 30, 2017	New Issuances	Expired	December 31, 2017
Warrants	Dec 2014	$	4.32	Jun 2020	2,699,999	-	-	2,699,999
					2,699,999	-	-	2,699,999

The following table summarizes the total warrants outstanding at June 30, 2017:

			Exercise Price	Expiration	Outstanding as			Outstanding as
	Issue Date		Per Share	Date	of June 30, 2016	New Issuances	Expired	of June 30, 2017
Underwriter warrants	May 2012	$	6.88	Feb 2017	50,000	-	(50,000)	-
Warrants	Dec 2014	$	4.53	Jun 2020	2,699,999	-	-	2,699,999
					2,749,999	-	(50,000)	2,699,999

The warrants issued in December 2014 were subject to down-round price protection until December 31, 2017. See Note 6 for further discussion.

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NOTE 8 - FOREIGN CURRENCY CONTRACTS

6 Months Ended

Dec. 31, 2017

Note 8 - Foreign Currency Contracts

NOTE 8 - FOREIGN CURRENCY CONTRACTS

NOTE 8 - FOREIGN CURRENCY CONTRACTS

The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company manages through the use of foreign currency forward contracts. These foreign currency contracts are not designated as hedging instruments; accordingly, changes in the fair value are recorded in current period earnings. These foreign currency contracts had a notional value of $4,340,928 at December 31, 2017 and their maturities range from January 2018 to June 2018.

The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract assets totaled $68,172 at December 31, 2017 and $166,629 at June 30, 2017. The Company recorded a loss on foreign exchange contracts of $61,560 and $249,728, which is reflected in cost of revenue, for the three months ended December 31, 2017 and 2016, respectively. The Company recorded a loss on foreign exchange contracts of $100,864 and $147,356, which is reflected in cost of revenue for the six months ended December 31, 2017 and 2016, respectively.

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NOTE 9 - COMMITMENTS AND CONTINGENCIES

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 9 - COMMITMENTS AND CONTINGENCIES

NOTE 9 - COMMITMENTS AND CONTINGENCIES

Commitments

Pursuant to the terms of the Asset Purchase and Sale Agreement for the DuPont Pioneer Acquisition, as amended, if required third party consents were received prior to January 31, 2018 (and subject to the satisfaction of certain other conditions specified in the Asset Purchase and Sale Agreement), either the Company or DuPont Pioneer had the right to enter into (and require the other party to enter into) on February 28, 2018 (or such earlier date as the parties agree) a proposed form of asset purchase and sale agreement, as the same may be updated in accordance with the terms of the Asset Purchase and Sale Agreement, pursuant to which Company would acquire additional GMO germplasm varieties and other related assets from DuPont Pioneer for a purchase price of $7,000,000.

Although the third party has informed the Company and DuPont Pioneer that it intends to provide the Company with the necessary consents and agreements to enable completion of the transaction, the Company did not obtain final executed consents and agreements prior to January 31, 2018. The Company is continuing discussions with DuPont Pioneer and the third party to obtain final executed consents and agreements and to complete the acquisition of DuPont Pioneer's GMO alfalfa assets. However, DuPont Pioneer has informed the Company that it currently does not intend to extend the deadline to complete the transaction. As a result, the Company may never enter into the second asset purchase agreement or close the acquisition of DuPont Pioneer's GMO germplasm varieties and related assets, in which case the Company would not be obligated to pay DuPont Pioneer the $7,000,000 purchase price.

Unless and until the Company completes the transactions contemplated under the second asset purchase agreement with DuPont Pioneer, DuPont Pioneer may purchase certain GMO-traited varieties of alfalfa seed from third parties. In addition, if the Company does not complete the transactions contemplated under the second asset purchase agreement, its production agreement with DuPont Pioneer (relating to GMO-traited varieties) will terminate on February 28, 2018, DuPont Pioneer will be free to pursue alternative production arrangements for the GMO-traited varieties, and DuPont Pioneer's minimum purchase commitments to the Company under the distribution agreement will be materially reduced. Although the Company is pursuing discussions with DuPont Pioneer regarding the possibility of extending the production agreement, DuPont Pioneer has informed the Company that it currently does not intend to extend the term of the Production Agreement past February 28, 2018. The termination of the Company's production agreement with DuPont Pioneer or any material reduction in the compensation payable to the Company under the agreement will have a material adverse effect on the Company's results of operations starting with the Company's fiscal year 2019.

Contingencies

Based on information currently available, management is not aware of any other matters that would have a material adverse effect on the Company's financial condition, results of operations or cash flows.

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NOTE 10 - RELATED PARTY TRANSACTIONS

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 10 - RELATED PARTY TRANSACTIONS

NOTE 10 - RELATED PARTY TRANSACTIONS

Glen D. Bornt, a member of the Company's Board of Directors until January 9, 2018, is the founder and President of Imperial Valley Milling Co. ("IVM"). He is IVM's majority shareholder and a member of its Board of Directors. Glen D. Bornt is also a majority shareholder of Kongal Seeds Pty. Ltd. ("Kongal"). IVM had a 15-year supply agreement with IVS, and this agreement was assigned by IVS to the Company when it purchased the assets of IVS in October 2012. IVM contracts with alfalfa seed growers in California's Imperial Valley and sells its growers' seed to the Company pursuant to a supply agreement. Under the terms of the supply agreement, IVM's entire certified and uncertified alfalfa seed production must be offered and sold to the Company, and the Company has the exclusive option to purchase all or any portion of IVM's seed production. The Company paid $1,997,256 to IVM during the six months ended December 31, 2017. Amounts due to IVM totaled $115,582 and $326,941 at December 31, 2017 and June 30, 2017, respectively. The Company paid $0 to Kongal during the six months ended December 31, 2017. Amounts due to Kongal totaled $1,582 and $4,753 at December 31, 2017 and June 30, 2017, respectively.

On July 19, 2017, the Company entered into a Securities Purchase Agreement with certain purchasers, including MFP Partners, L.P. ("MFP"), a stockholder of the Company, and certain entities related to Wynnefield Capital Management LLC (collectively, "Wynnefield"), pursuant to which MFP purchased approximately $3.7 million of shares of its common stock and Wynnefield purchased approximately $3.0 million of shares of its common stock. Each of MFP and Wynnefield is a beneficial owner of more than 5% of the Company's common stock. Alexander C. Matina, a member of the Company's Board, is Vice President, Investments of MFP.

On October 11, 2017, the Company entered into a Securities Purchase Agreement with Mark W. Wong, the Company's President and Chief Executive Officer, pursuant to which the Company sold and issued an aggregate of 75,000 shares of its Common Stock at a purchase price of $3.50 per share, for aggregate gross proceeds of $262,500.

On December 22, 2017, the Company completed the closing of its previously announced rights offering. At the closing, the Company sold and issued an aggregate of 2,594,923 shares of its Common Stock at a subscription price of $3.50 per share pursuant to the exercise of subscriptions and oversubscriptions in the rights offering from its existing stockholders. Pursuant to an Investment Agreement, dated October 3, 2017, between the Company and MFP, MFP agreed to purchase, at the subscription price, all of the shares not purchased in the Rights Offering (the "Backstop Commitment"). Accordingly, on December 22, 2017, the Company and MFP completed the closing of the Backstop Commitment, in which the Company sold and issued 905,077 shares of its Common Stock to MFP. Combined, the Company sold and issued an aggregate of 3,500,000 shares of its common stock for aggregate gross proceeds of $12.25 million.

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NOTE 11 - EQUITY-BASED COMPENSATION

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 11 - EQUITY-BASED COMPENSATION

NOTE 11 - EQUITY-BASED COMPENSATION

2009 Equity Incentive Plan

In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan (as amended and/or restated from time to time, the "2009 Plan"). The plan authorized the grant and issuance of options, restricted shares and other equity compensation to the Company's directors, employees, officers and consultants, and those of the Company's subsidiaries and parent, if any. In October 2012 and December 2012, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,250,000 shares. In September 2013 and December 2013, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,700,000 shares. In September 2015 and December 2015, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 2,450,000 shares.

The term of incentive stock options granted under the 2009 Plan may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the 2009 Plan must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted.

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Stock options issued to non-employees are accounted for at their estimated fair value. The fair value of options granted to non-employees is re-measured as they vest. The Company amortizes stock-based compensation expense on a straight-line basis over the requisite service period.

The Company utilizes a Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of the Company's common stock to estimate the fair value of employee options grants.

Weighted average assumptions used in the Black-Scholes-Merton model are set forth below:

	December 31,
	2017	2016
Risk free rate	1.72% - 1.91%	1.2% - 1.9%
Dividend yield	0%	0%
Volatility	45.3% - 45.5%	39.2% - 51.6%
Average forfeiture assumptions	1.4%	2.4%

During the six months ended December 31, 2017, the Company granted 62,755 options to certain members of the executive management team and other employees at exercise prices ranging from $3.00 to $3.10. These options vest in either quarterly or annual periods over three years, and expire ten years from the date of grant.

A summary of stock option activity for the six months ended December 31, 2017 and year ended June 30, 2017 is presented below:

				Weighted-
			Weighted -	Average
			Average	Remaining		Aggregate
	Number		Exercise Price	Contractual		Intrinsic
	Outstanding		Per Share	Life (Years)		Value
Outstanding at June 30, 2016	1,021,418	$	5.14	4.2		142,381
Granted	230,610		4.19	-		-
Exercised	(232,000)		4.20	-		-
Canceled/forfeited/expired	(29,500)		5.95	-		-
Outstanding at June 30, 2017	990,528		5.12	4.3		100,344
Granted	62,755		3.08	-		-
Exercised	-		-	-		-
Canceled/forfeited/expired	(190,000)		6.99	-		-
Outstanding at December 31, 2017	863,283		4.56	6.5		72,914
Options vested and exercisable at December 31, 2017	632,416		4.82	5.6		19,183
Options vested and expected to vest as of December 31, 2017	862,808	$	4.56	6.5	$	72,496

The weighted average grant date fair value of options granted and outstanding at December 31, 2017 was $1.58. At December 31, 2017, the Company had $302,942 of unrecognized stock compensation expense, net of estimated forfeitures, related to the options under the 2009 Plan, which will be recognized over the weighted average remaining service period of 2.23 years. The Company settles employee stock option exercises with newly issued shares of common stock.

During the year ended June 30, 2017, the Company issued 77,275 restricted stock units to its directors, certain members of the executive management team, and other employees. The restricted stock units have varying vesting periods ranging from immediate vesting to annual installments over a three-year period. The fair value of the awards totaled $374,530 and was based on the closing stock price on the date of grants.

During the six months ended December 31, 2017, the Company issued 38,114 restricted stock units to its certain members of the executive management team and other employees. The restricted stock units vest in either quarterly or annual periods and vest over three-years. The fair value of the awards totaled $116,486 and was based on the closing stock price on the date of grants.

The Company recorded $311,067 and $240,241 of stock-based compensation expense associated with grants of restricted stock units during the six months ended December 31, 2017 and 2016, respectively. A summary of activity related to non-vested restricted stock units is presented below:

Six Months Ended December 31, 2017
				Weighted -
	Number of		Weighted-	Average
	Nonvested		Average	Remaining
	Restricted		Grant Date	Contractual
	Stock Units		Fair Value	Life (Years)
Beginning nonvested restricted units outstanding	120,971	$	5.59	1.5
Granted	38,114		3.06	1.7
Vested	(90,066)		5.68	-
Forfeited	(3,680)		-	-
Ending nonvested restricted units outstanding	65,339	$	4.06	1.6

At December 31, 2017, the Company had $220,169 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.6 years.

At December 31, 2017, there were 526,603 shares available under the 2009 Plan for future grants and awards.

Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the three months ended December 31, 2017 and 2016, totaled $193,571 and $296,235, respectively. Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the six months ended December 31, 2017 and 2016, totaled $451,033 and $578,659, respectively.

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NOTE 12 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

6 Months Ended

Dec. 31, 2017

Supplemental Cash Flow Elements [Abstract]

NOTE 12 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

NOTE 12 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the six months ended December 31, 2017 and 2016, respectively.

		Six Months Ended
		December 31,
		2017		2016
Issuance of common stock upon conversion of principal and interest of convertible debentures	$	-	$	3,168,342

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The Company maintains its accounting records on an accrual basis in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The consolidated financial statements include the accounts of Seed Holding, LLC and its other wholly-owned subsidiaries, S&W Australia, which owns 100% of SGI, and Stevia California, LLC. All significant intercompany balances and transactions have been eliminated.

Unaudited Interim Financial Information

Unaudited Interim Financial Information

The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated financial statements are unaudited and, in the Company's opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company's consolidated balance sheets, statements of operations, comprehensive income, cash flows and stockholders' equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2018. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended June 30, 2017, as filed with the SEC.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, derivative liabilities, contingencies and litigation. Significant estimates and assumptions are also used to establish the fair value and useful lives of depreciable tangible and certain intangible assets, goodwill as well as valuing stock-based compensation. Actual results may differ from those estimates and assumptions, and such results may affect income, financial position or cash flows.

Certain Risks and Concentrations

Certain Risks and Concentrations

The Company's revenue is principally derived from the sale of alfalfa seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 75% and 66% of its revenue for the three months ended December 31, 2017 and 2016, respectively. One customer accounted for 58% and 49% of its revenue for the six months ended December 31, 2017 and 2016, respectively.

Two customers accounted for 50% of the Company's accounts receivable at December 31, 2017. Two customers accounted for 52% of the Company's accounts receivable at June 30, 2017.

In addition, the Company sells a substantial portion of its products to international customers. Sales to international markets represented 23% and 30% of revenue during the three months ended December 31, 2017 and 2016, respectively. Sales to international markets represented 38% and 46% of revenue during the six months ended December 31, 2017 and 2016, respectively. The net book value of fixed assets located outside the United States was 19% and 19% of total assets at December 31, 2017 and June 30, 2017, respectively. Cash balances located outside of the United States may not be insured and totaled $1,209,181 and $192,879 at December 31, 2017 and June 30, 2017, respectively.

The following table shows revenue from external sources by destination country:

		Three Months Ended December 31,						Six Months Ended December 31,
		2017			2016			2017			2016
United States	$	15,740,706	77%	$	16,858,325	70%	$	19,265,254	62%	$	19,782,389	54%
Mexico		1,664,618	8%		1,404,133	6%		4,380,626	14%		3,745,027	10%
Argentina		1,183,423	6%		1,677,035	7%		2,742,619	9%		2,565,004	7%
Libya		563,673	3%		-	0%		752,673	2%		-	0%
Saudi Arabia		513,000	2%		1,843,949	8%		844,908	3%		5,221,772	15%
Australia		438,468	2%		71,175	0%		557,998	2%		790,636	2%
South Africa		338,993	2%		634,768	2%		467,342	1%		636,870	2%
Sudan		-	0%		67,016	0%		447,500	1%		67,016	0%
Other		89,915	0%		1,669,343	7%		1,785,592	6%		3,666,603	10%
Total	$	20,532,796	100%	$	24,225,744	100%	$	31,244,512	100%	$	36,475,317	100%

International Operations

International Operations

The Company translates its foreign operations' assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income. Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

Revenue Recognition

Revenue Recognition

The Company derives its revenue primarily from sale of seed and other crops and milling services. Revenue from seed and other crop sales is recognized when risk and title to the product is transferred to the customer. No customer has a right of return.

The Company recognizes revenue from milling services according to the terms of the sales agreements and when delivery has occurred, performance is complete and pricing is fixed or determinable at the time of sale.

Additional conditions for recognition of revenue for all sales include the requirements that the collection of sales proceeds must be reasonably assured based on historical experience and current market conditions, the sales price is fixed and determinable and that there must be no further performance obligations under the sale.

Cost of Revenue

Cost of Revenue

The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue.

Cash and Equivalents

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation.

Accounts Receivable

Accounts Receivable

The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer's trade accounts receivable. The allowance for doubtful trade receivables was $526,495 at December 31, 2017 and June 30, 2017.

Inventories

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or market, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities.

The Company's subsidiary, SGI, does not fix the final price for seed payable to its growers until the completion of a given year's sales cycle pursuant to its standard contract production agreement. SGI records an estimated unit price; accordingly, inventory, cost of revenue and gross profits are based upon management's best estimate of the final purchase price to growers.

Inventory is periodically reviewed to determine if it is marketable, obsolete or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. Because the germination rate, and therefore the quality, of alfalfa seed improves over the first year of proper storage, inventory obsolescence for alfalfa seed is not a material concern. The Company sells its inventory to distributors, dealers and directly to growers.

Components of inventory are:

		December 31,		June 30,
		2017		2017
Raw materials and supplies	$	235,910	$	266,551
Work in progress and growing crops		23,890,021		5,603,825
Finished goods		46,361,054		25,619,569
	$	70,486,985	$	31,489,945

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 5-28 years for buildings, 3-20 years for machinery and equipment, and 3-5 years for vehicles. 

Intangible Assets

Intangible Assets

Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 10-20 years for customer relationships and trade names and 3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 18 years for customer relationships and 20 years for trade names and other intangible assets.

Goodwill

Goodwill

Goodwill originated from acquisitions of Imperial Valley Seeds, Inc. ("IVS") and SGI during the fiscal year 2013, the acquisition of the alfalfa business from DuPont Pioneer in fiscal year 2015 and the acquisition of assets of SV Genetics in May 2016. Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the goodwill impairment test is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The Company uses market capitalization to estimate the fair value of its one reporting unit. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. The Company performed a quantitative assessment of goodwill at June 30, 2017 and determined that goodwill was not impaired.

Equity Method Investments

Equity Method Investments

Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company's board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company's accounts are not reflected within the Company's consolidated balance sheets and statements of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption ``Loss on equity method investment'' in the consolidated statements of operations. The Company's carrying value in an equity method investee company is included in the Company's consolidated balance sheets. When the Company's carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company's consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.

Cost Method Investments

Cost Method Investments

Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method, the Company's share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges are recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded.

Research and Development Costs

Research and Development Costs

The Company is engaged in ongoing research and development ("R&D") of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are determined based on differences between the financial statement and tax basis of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company's effective tax rate for the three and six months ended December 31, 2017 has been effected by the valuation allowance on the Company's deferred tax assets.

Net Income (Loss) Per Common Share

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share ("EPS"), is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. 

Diluted EPS is calculated by adjusting both the numerator (net income (loss)) and the denominator (weighted-average number of shares outstanding) for the dilutive effects of potentially dilutive securities, including options, restricted stock awards, convertible debt and common stock warrants. 

• The if-converted method is used for convertible debt. Under the if-converted method, interest expense recognized in the period on the convertible debt is added to net income, and the number of shares that would be obtained upon conversion is added to the denominator. 
• The treasury stock method is used for common stock warrants, stock options, and restricted stock awards.  Under this method, consideration that would be received upon exercise (as well as remaining compensation cost to be recognized for awards not yet vested) is assumed to be used to repurchase shares of stock in the market, with the net number of shares assumed to be issued added to the denominator.

The calculation of Basic and Diluted EPS is shown in the table below. Classes of securities identified in the table with no adjustments in the calculation of Diluted EPS were determined to be antidilutive for the applicable periods. 

		Three Months Ended				Six Months Ended
		December 31,				December 31,
		2017		2016		2017		2016
Numerator:
Net income (loss)	$	(399,887)	$	1,158,958	$	(2,217,393)	$	(2,058,198)
Numerator for basis EPS		(399,887)		1,158,958		(2,217,393)		(2,058,198)
Effect of dilutive securities:
Warrants		-		(959,200)		-		-
		-		(959,200)		-		-
Numerator for diluted EPS	$	(399,887)	$	199,758	$	(2,217,393)	$	(2,058,198)
Denominator:
Denominator for basic EPS - weighted-average shares		21,130,960		17,821,547		20,643,973		17,467,370
Effect of dilutive securities:
Employee stock options		-		-		-		-
Employee restricted stock units		-		-		-		-
Warrants		-		174,674		-		-
Dilutive potential common shares		-		174,674		-		-
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions		21,130,960		17,996,221		20,643,973		17,467,370
Basic EPS	$	(0.02)	$	0.07	$	(0.11)	$	(0.12)
Diluted EPS	$	(0.02)	$	0.01	$	(0.11)	$	(0.12)

Impairment of Long-lived Assets

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset.

Foreign Exchange Contracts

Derivative Financial Instruments

Foreign Exchange Contracts

The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts.

The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, "Derivatives and Hedging", which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company's foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings.

Derivative Liabilities

Derivative Financial Instruments

Derivative Liabilities

The Company reviews the terms of the common stock, warrants and convertible debt it issues to determine whether there are embedded derivative instruments, including embedded conversion options and redemption options, which are required to be bifurcated and accounted for separately as derivative financial instruments.

Fair Values of Financial Instruments

Fair Value of Financial Instruments

The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows:

• Level 1. Observable inputs such as quoted prices in active markets;
• Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
• Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

No assets or liabilities were valued at fair value on a non-recurring basis as of December 31, 2017 or June 30, 2017.

The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates. The Company used a discounted cash flows approach to measure the fair value using Level 3 inputs.

Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows:

		Fair Value Measurements as of December 31, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	68,172	$	-
Contingent consideration obligations		-		-		-
Derivative warrant liabilities		-		-		-
Total	$	-	$	68,172	$	-
		Fair Value Measurements as of June 30, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	166,629	$	-
Contingent consideration obligations		-		-		2,500,000
Derivative warrant liabilities		-		-		2,836,600
Total	$	-	$	166,629	$	5,336,600

During the six months ended December 31, 2017, a change in derivative warrant liability of $431,300 was recorded in earnings. Upon expiration of the round-down pricing protection on December 31, 2017, the warrants were reclassified from derivative warrant liabilities to equity.

During the six months ended December 31, 2017, there was no change in the contingent consideration obligations. The DuPont contingent consideration was settled on December 1, 2017. Refer to Note 5 for further discussion. 

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Issued Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). This standard eliminates Step 2 from the goodwill impairment test. Instead, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. ASU 2017-04 is effective for the Company beginning July 1, 2020. The adoption is not expected to have a material impact on the consolidated financial statements.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments ("ASU 2016-15"). This standard addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for the Company beginning July 1, 2018 and the Company is currently evaluating the impact that ASU 2016-15 will have on its consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). This standard was issued as part of the FASB's Simplification Initiative that involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. For public business entities, ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The method of adoption is dependent on the specific aspect of accounting addressed in this new guidance. Early adoption is permitted in any interim or annual period. The Company adopted ASU 2016-09 in the first quarter of the fiscal year ended June 30, 2018. The adoption did not have a material impact on the consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02: Leases ("ASU 2016-02"). This standard amends various aspects of existing accounting guidance for leases, including the recognition of a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. This standard also introduces new disclosure requirements for leasing arrangements. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective approach, and provides for certain practical expedients. The Company is evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements and related disclosures.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (``ASU 2014-09''). This standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most existing revenue recognition guidance under U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. The FASB recently issued several amendments to the standard, including clarifications on disclosure of prior-period performance obligations and remaining performance obligations. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. However, in August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date that defers the effective date of ASU 2014-09 for all public business entities by one year. As a result, ASU 2014-09 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements and related disclosures.

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Summary of Significant Accounting Policies (Certain Risks and Concentrations) (Tables)

6 Months Ended

Dec. 31, 2017

Summary Of Significant Accounting Policies Certain Risks And Concentrations Tables

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area

The following table shows revenue from external sources by destination country:

		Three Months Ended December 31,						Six Months Ended December 31,
		2017			2016			2017			2016
United States	$	15,740,706	77%	$	16,858,325	70%	$	19,265,254	62%	$	19,782,389	54%
Mexico		1,664,618	8%		1,404,133	6%		4,380,626	14%		3,745,027	10%
Argentina		1,183,423	6%		1,677,035	7%		2,742,619	9%		2,565,004	7%
Libya		563,673	3%		-	0%		752,673	2%		-	0%
Saudi Arabia		513,000	2%		1,843,949	8%		844,908	3%		5,221,772	15%
Australia		438,468	2%		71,175	0%		557,998	2%		790,636	2%
South Africa		338,993	2%		634,768	2%		467,342	1%		636,870	2%
Sudan		-	0%		67,016	0%		447,500	1%		67,016	0%
Other		89,915	0%		1,669,343	7%		1,785,592	6%		3,666,603	10%
Total	$	20,532,796	100%	$	24,225,744	100%	$	31,244,512	100%	$	36,475,317	100%

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Summary of Significant Accounting Policies (Inventories) (Tables)

6 Months Ended

Dec. 31, 2017

Summary Of Significant Accounting Policies Inventories Tables

Inventories (Tables)

Components of inventory are:

		December 31,		June 30,
		2017		2017
Raw materials and supplies	$	235,910	$	266,551
Work in progress		23,890,021		5,603,825
Finished goods		46,361,054		25,619,569
	$	70,486,985	$	31,489,945

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Summary of Significant Accounting Policies (Net Income (Loss) Per Common Share Data) (Tables)

6 Months Ended

Dec. 31, 2017

Summary Of Significant Accounting Policies Net Income Loss Per Common Share Data Tables

Net Income (Loss) Per Common Share Data (Tables)

The calculation of Basic and Diluted EPS is shown in the table below. Classes of securities identified in the table with no adjustments in the calculation of Diluted EPS were determined to be antidilutive for the applicable periods. 

		Three Months Ended				Six Months Ended
		December 31,				December 31,
		2017		2016		2017		2016
Numerator:
Net income (loss)	$	(399,887)	$	1,158,958	$	(2,217,393)	$	(2,058,198)
Numerator for basis EPS		(399,887)		1,158,958		(2,217,393)		(2,058,198)
Effect of dilutive securities:
Warrants		-		(959,200)		-		-
		-		(959,200)		-		-
Numerator for diluted EPS	$	(399,887)	$	199,758	$	(2,217,393)	$	(2,058,198)
Denominator:
Denominator for basic EPS - weighted-average shares		21,130,960		17,821,547		20,643,973		17,467,370
Effect of dilutive securities:
Employee stock options		-		-		-		-
Employee restricted stock units		-		-		-		-
Warrants		-		174,674		-		-
Dilutive potential common shares		-		174,674		-		-
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions		21,130,960		17,996,221		20,643,973		17,467,370
Basic EPS	$	(0.02)	$	0.07	$	(0.11)	$	(0.12)
Diluted EPS	$	(0.02)	$	0.01	$	(0.11)	$	(0.12)

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Summary of Significant Accounting Policies (Fair Value Measurement) (Tables)

6 Months Ended

Dec. 31, 2017

Summary Of Significant Accounting Policies Fair Value Measurement Tables

Fair Value of Financial Instrumements (Tables)

Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows:

		Fair Value Measurements as of December 31, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	68,172	$	-
Contingent consideration obligations		-		-		-
Derivative warrant liabilities		-		-		-
Total	$	-	$	68,172	$	-
		Fair Value Measurements as of June 30, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	166,629	$	-
Contingent consideration obligations		-		-		2,500,000
Derivative warrant liabilities		-		-		2,836,600
Total	$	-	$	166,629	$	5,336,600

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Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2017

Intangible Assets Tables

Goodwill

The following table summarizes the activity of goodwill for the six months ended December 31, 2017 and the year ended June 30, 2017, respectively.

		Balance at				Balance at
		July 1, 2017		Additions		December 31, 2017
Goodwill	$	10,292,265	$	-	$	10,292,265

		Balance at				Balance at
		July 1, 2016		Additions		June 30, 2017
Goodwill	$	10,292,265	$	-	$	10,292,265

Carrying values of intangible assets (Tables)

Intangible assets consist of the following:

		Balance at						Balance at
		July 1, 2017		Additions		Amortization		December 31, 2017
Trade name	$	1,244,306	$	-	$	(42,240)	$	1,202,066
Customer relationships		1,258,163		-		(50,604)		1,207,559
Non-compete		102,035		-		(31,032)		71,003
GI customer list		78,803		-		(3,582)		75,221
Supply agreement		1,153,415		-		(37,816)		1,115,599
Distribution agreement		6,728,753		-		(192,250)		6,536,503
Production agreement		111,670		-		(111,666)		4
Grower relationships		1,858,616		-		(52,704)		1,805,912
Intellectual property		21,725,539		-		(572,610)		21,152,929
Internal use software		677,779		-		(33,888)		643,891
	$	34,939,079	$	-	$	(1,128,392)	$	33,810,687

		Balance at						Balance at
		July 1, 2016		Additions		Amortization		June 30, 2017
Trade name	$	1,328,786	$	-	$	(84,480)	$	1,244,306
Customer relationships		1,359,371		-		(101,208)		1,258,163
Non-compete		198,999		-		(96,964)		102,035
GI customer list		85,967		-		(7,164)		78,803
Supply agreement		1,229,047		-		(75,632)		1,153,415
Distribution agreement		7,113,253		-		(384,500)		6,728,753
Production agreement		335,002		-		(223,332)		111,670
Grower relationships		1,964,024		-		(105,408)		1,858,616
Intellectual property		22,870,760		-		(1,145,221)		21,725,539
Internal use software		521,593		156,186		-		677,779
	$	37,006,802	$	156,186	$	(2,223,909)	$	34,939,079

Finite-lived intangible assets - future amortization expense

Estimated aggregate remaining amortization is as follows:

		2018		2019		2020		2021		2022		Thereafter
Amortization expense	$	993,981	$	1,977,388	$	1,977,388	$	1,977,388	$	1,977,388	$	24,907,154

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Property, Plant and Equipment (Tables)

6 Months Ended

Dec. 31, 2017

Property Plant And Equipment Tables

Components of Property, Plant and Equipment

Components of property, plant and equipment were as follows:

		December 31,		June 30,
		2017		2017
Land and improvements	$	2,090,069	$	2,223,674
Buildings and improvements		6,784,964		6,401,277
Machinery and equipment		5,680,599		5,435,542
Vehicles		1,166,596		1,005,455
Construction in progress		2,170,844		2,196,513
Total property, plant and equipment		17,843,072		17,262,461
Less: accumulated depreciation		(4,212,949)		(3,680,885)
Property, plant and equipment, net	$	13,630,123	$	13,581,576

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Debt (Tables)

6 Months Ended

Dec. 31, 2017

Debt Tables

Debt Components

Total debt outstanding, excluding convertible debt addressed in Note 6, are presented on the consolidated balance sheet as follows:

		December 31,		June 30,
		2017		2017
Working capital lines of credit
KeyBank	$	21,649,089	$	18,695,896
National Australia Bank Limited		6,115,026		8,703,888
Debt issuance costs		(171,512)		-
Total working capital lines of credit, net	$	27,592,603	$	27,399,784
Current portion of long-term debt
Keith facility (building loan) - National Australia Bank Limited	$	3,901	$	-
Keith facility (machinery & equipment loans) - National Australia Bank Limited		218,239		209,664
Unsecured subordinate promissory note		100,000		100,000
Promissory note - DuPont Pioneer		-		10,000,000
Secured real estate note - Conterra		112,711		-
Debt issuance costs		(77,563)		-
Secured equipment note - Conterra		18,473		-
Debt issuance costs		(16,897)		-
Total current portion, net		358,864		10,309,664
Long-term debt, less current portion
Keith facility (building loan) - National Australia Bank Limited		444,713		499,524
Keith facility (machinery & equipment loans) - National Australia Bank Limited		545,285		596,631
Secured real estate note - Conterra		10,287,289		-
Debt issuance costs		(138,917)		-
Secured equipment note - Conterra		2,081,527		-
Debt issuance costs		(16,706)		-
Total long-term portion, net		13,203,191		1,096,155
Total debt, net	$	13,562,055	$	11,405,819

Schedule of Annual Maturities

The annual maturities of short-term and long-term debt are as follows:

Fiscal Year		Amount
2018	$	223,473
2019		572,693
2020		2,656,068
2021		10,150,465
2022		92,427
Thereafter		117,012
Total	$	13,812,138

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Stockholders' Equity (Warrants Outstanding) (Tables)

6 Months Ended

Dec. 31, 2017

Stockholders Equity Warrants Outstanding Tables

Warrants Outstanding (Tables)

The following table summarizes the total warrants outstanding at December 31, 2017:

			Exercise Price	Expiration	Outstanding as			Outstanding as of
	Issue Date		Per Share	Date	of June 30, 2017	New Issuances	Expired	December 31, 2017
Warrants	Dec 2014	$	4.32	Jun 2020	2,699,999	-	-	2,699,999
					2,699,999	-	-	2,699,999

The following table summarizes the total warrants outstanding at June 30, 2017:

			Exercise Price	Expiration	Outstanding as			Outstanding as
	Issue Date		Per Share	Date	of June 30, 2016	New Issuances	Expired	of June 30, 2017
Underwriter warrants	May 2012	$	6.88	Feb 2017	50,000	-	(50,000)	-
Warrants	Dec 2014	$	4.53	Jun 2020	2,699,999	-	-	2,699,999
					2,749,999	-	(50,000)	2,699,999

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Equity-Based Compensation (Plan Activity) (Tables)

6 Months Ended

Dec. 31, 2017

Stock Options

Summary of Share-Based Compensation Arrangements By Share-Based Payment Award

A summary of stock option activity for the six months ended December 31, 2017 and year ended June 30, 2017 is presented below:

				Weighted-
			Weighted -	Average
			Average	Remaining		Aggregate
	Number		Exercise Price	Contractual		Intrinsic
	Outstanding		Per Share	Life (Years)		Value
Outstanding at June 30, 2016	1,021,418	$	5.14	4.2		142,381
Granted	230,610		4.19	-		-
Exercised	(232,000)		4.20	-		-
Canceled/forfeited/expired	(29,500)		5.95	-		-
Outstanding at June 30, 2017	990,528		5.12	4.3		100,344
Granted	62,755		3.08	-		-
Exercised	-		-	-		-
Canceled/forfeited/expired	(190,000)		6.99	-		-
Outstanding at December 31, 2017	863,283		4.56	6.5		72,914
Options vested and exercisable at December 31, 2017	632,416		4.82	5.6		19,183
Options vested and expected to vest as of December 31, 2017	862,808	$	4.56	6.5	$	72,496

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

Weighted average assumptions used in the Black-Scholes-Merton model are set forth below:

	December 31,
	2017	2016
Risk free rate	1.72% - 1.91%	1.2% - 1.9%
Dividend yield	0%	0%
Volatility	45.3% - 45.5%	39.2% - 51.6%
Average forfeiture assumptions	1.4%	2.4%

Nonvested restricted stock

Summary of Share-Based Compensation Arrangements By Share-Based Payment Award

A summary of activity related to non-vested restricted stock units is presented below:

Six Months Ended December 31, 2017
				Weighted -
	Number of		Weighted-	Average
	Nonvested		Average	Remaining
	Restricted		Grant Date	Contractual
	Stock Units		Fair Value	Life (Years)
Beginning nonvested restricted units outstanding	120,971	$	5.59	1.5
Granted	38,114		3.06	1.7
Vested	(90,066)		5.68	-
Forfeited	(3,680)		-	-
Ending nonvested restricted units outstanding	65,339	$	4.06	1.6

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Non-Cash Investing and Financing Activities for Statements of Cash Flows (Tables)

6 Months Ended

Dec. 31, 2017

Non-cash Investing And Financing Activities For Statements Of Cash Flows Tables

Schedule of Cash Flow, Supplemental Disclosures

The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the six months ended December 31, 2017 and 2016, respectively.

		Six Months Ended
		December 31,
		2017		2016
Issuance of common stock upon conversion of principal and interest of convertible debentures	$	-	$	3,168,342

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Background and Organization (Narrative) (Details)	Dec. 31, 2017
Background And Organization Narrative Details
Number of Countries in which S&W Operates	30

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Summary of Significant Accounting Policies (Concentrations Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2017
Summary Of Significant Accounting Policies Concentrations Narrative Details
Sales revenue, major customer, percentage	75.00%	66.00%	58.00%	49.00%
Accounts receivable from major customers, percentage of total	50.00%		50.00%		52.00%
International sales revenue, percentage	23%	30%	38%	46%
Cash balances located outside of the United States	$ 1,209,181		$ 1,209,181		$ 192,879

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Summary of Significant Accounting Policies (Revenue Recognition Narrative) (Details)	6 Months Ended
	Dec. 31, 2016
Summary Of Significant Accounting Policies Revenue Recognition Narrative Details
Number of customers with right of return	0

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Summary of Significant Accounting Policies (Revenues from External Customers By Country Of Domicile) (Details) - USD ($)

3 Months Ended

6 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2017

Dec. 31, 2016

Revenues from external customers

$ 20,532,796

$ 24,225,744

$ 31,244,512

$ 36,475,317

Revenue from external customers by country, percentage

100.00%

100.00%

100.00%

100.00%

Disclosure on Geographic Areas, Fixed Assets

The net book value of fixed assets located outside the United States was 19% and 19% of total assets at December 31, 2017 and June 30, 2017, respectively.

United States

Revenues from external customers

$ 15,740,706

$ 16,858,325

$ 19,265,254

$ 19,782,389

Revenue from external customers by country, percentage

77.00%

70.00%

62.00%

54.00%

Mexico

Revenues from external customers

$ 1,664,618

$ 1,404,133

$ 4,380,626

$ 3,745,027

Revenue from external customers by country, percentage

8.00%

6.00%

14.00%

10.00%

Agrentina

Revenues from external customers

$ 1,183,423

$ 1,677,035

$ 2,742,619

$ 2,565,004

Revenue from external customers by country, percentage

6.00%

7.00%

9.00%

7.00%

Libya

Revenues from external customers

$ 563,673

$ 0

$ 752,673

$ 0

Revenue from external customers by country, percentage

3.00%

0.00%

2.00%

0.00%

Saudi Arabia

Revenues from external customers

$ 513,000

$ 1,843,949

$ 844,908

$ 5,221,772

Revenue from external customers by country, percentage

2.00%

8.00%

3.00%

15.00%

Australia

Revenues from external customers

$ 438,468

$ 71,175

$ 557,998

$ 790,636

Revenue from external customers by country, percentage

2.00%

0.00%

2.00%

2.00%

South Africa

Revenues from external customers

$ 338,993

$ 634,768

$ 467,342

$ 636,870

Revenue from external customers by country, percentage

2.00%

2.00%

1.00%

2.00%

Sudan

Revenues from external customers

$ 0

$ 67,016

$ 447,500

$ 67,016

Revenue from external customers by country, percentage

0.00%

0.00%

1.00%

0.00%

Other

Revenues from external customers

$ 89,915

$ 1,669,343

$ 1,785,592

$ 3,666,603

Revenue from external customers by country, percentage

0.00%

7.00%

6.00%

10.00%

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Summary of Significant Accounting Policies (Accounts Receivable Narrative) (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Summary Of Significant Accounting Policies Accounts Receivable Narrative Details
Allowance for doubtful trade receivables	$ 526,495	$ 526,495

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Summary of Significant Accounting Policies (Property, Plant and Equipment Useful Life Narrative) (Details)	6 Months Ended
	Dec. 31, 2017
Building | Minimum
Estimated Useful Lives	5 years
Building | Maximum
Estimated Useful Lives	28 years
Equipment | Minimum
Estimated Useful Lives	3 years
Equipment | Maximum
Estimated Useful Lives	20 years
Vehicles | Minimum
Estimated Useful Lives	3 years
Vehicles | Maximum
Estimated Useful Lives	5 years

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Summary of Significant Accounting Policies (Inventories by Component) (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Summary Of Significant Accounting Policies Inventories By Component Details
Raw materials and supplies	$ 235,910	$ 266,551
Work in progress	23,890,021	5,603,825
Finished goods	46,361,054	25,619,569
Inventories	$ 70,486,985	$ 31,489,945

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Summary of Significant Accounting Policies (Intangible Assets Useful Life Narrative) (Details)	6 Months Ended
	Dec. 31, 2017
Technology/IP | Minimum
Useful life	10 years
Technology/IP | Maximum
Useful life	30 years
Technology/IP | Weighted Average
Useful life	26 years
Customer Relationships | Minimum
Useful life	10 years
Customer Relationships | Maximum
Useful life	20 years
Customer Relationships | Weighted Average
Useful life	18 years
Trade Name | Minimum
Useful life	10 years
Trade Name | Maximum
Useful life	20 years
Trade Name | Weighted Average
Useful life	20 years
Other Intangibles | Minimum
Useful life	2 years
Other Intangibles | Maximum
Useful life	20 years
Other Intangibles | Weighted Average
Useful life	20 years

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Summary of Significant Accounting Policies (Net Income (Loss) Per Common Share) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net income (loss)	$ (399,887)	$ 1,158,958	$ (2,217,393)	$ (2,058,198)
Numerator for basic EPS	(399,887)	1,158,958	(2,217,393)	(2,058,198)
Effect of dilutive securities:
Warrants	0	(959,200)	0	0
Total effect of dilutive securities:		(959,200)
Numerator for diluted EPS	$ (399,887)	$ 199,758	$ (2,217,393)	$ (2,058,198)
Denominator:
Denominator for basic EPS - weighted-average shares	21,130,960	17,821,547	20,643,973	17,467,370
Effect of dilutive securities, shares:
Employee stock options	0	0	0	0
Employee restricted stock units	0	0	0	0
Warrants	0	174,674	0	0
Dilutive potential common shares	0	174,674	0	0
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions	21,130,960	17,996,221	20,643,973	17,467,370
Net income (loss) per share:
Basic EPS	$ (0.02)	$ 0.07	$ (0.11)	$ (0.12)
Diluted EPS	$ (0.02)	$ 0.01	$ (0.11)	$ (0.12)

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Summary of Significant Accounting Policies (Fair Value of Financial Instruments) (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016
Foreign exchange contract asset	$ 68,172	$ 166,629
Derivative warrant liabilities	$ 0	2,836,600
(Level 1)
Foreign exchange contract asset			$ 0
Total		0	0
Contingent consideration obligations		0
Derivative warrant liabilities		0
Total		0
(Level 2)
Foreign exchange contract asset		166,629	68,172
Total		166,629	68,172
Contingent consideration obligations		0
Derivative warrant liabilities		0
Total		0
(Level 3)
Foreign exchange contract asset			0
Total		0	$ 0
Contingent consideration obligations		2,500,000
Derivative warrant liabilities		2,836,000
Total		$ 5,336,000

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Changes in Carrying Amount of Goodwill by Location (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2017	Jun. 30, 2017
Goodwill, Beginning Balance	$ 10,292,265	$ 10,292,265
Goodwill additions	0	0
Foreign Currency Translation	0	0
Goodwill, Ending Balance	$ 10,292,265	$ 10,292,265

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Intangible Assets (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2017	Jun. 30, 2016
Intangible asset	$ 33,810,687		$ 33,810,687		$ 34,939,079	$ 37,006,802
Intangible addition			0		156,186
Intangible amortization expense	(555,471)	$ (555,977)	(1,128,392)	$ (1,111,954)	(2,223,099)
Trade name
Intangible asset	1,202,066		1,202,066		1,244,306	1,328,786
Intangible addition			0		0
Intangible amortization expense			(42,240)		(84,480)
Customer Relationships
Intangible asset	1,207,559		1,207,559		1,258,163	1,359,371
Intangible addition			0		0
Intangible amortization expense			(50,604)		(101,208)
Non-compete
Intangible asset	71,003		71,003		102,035	198,999
Intangible addition			0		0
Intangible amortization expense			(31,032)		(96,964)
GI Customer list
Intangible asset	75,221		75,221		78,803	85,967
Intangible addition			0		0
Intangible amortization expense			(3,582)		(7,164)
Supply Agreement
Intangible asset	1,115,599		1,115,599		1,153,415	1,229,047
Intangible addition			0		0
Intangible amortization expense			(37,816)		(75,632)
Distribution Agreement
Intangible asset	6,536,503		6,536,503
Intangible addition			0
Intangible amortization expense			(192,250)
Distribution agreement
Intangible asset					6,728,753	7,113,253
Intangible addition					0
Intangible amortization expense					(384,500)
Production agreement
Intangible asset	4		4		111,670	335,002
Intangible addition			0		0
Intangible amortization expense			(111,666)		(223,332)
Grower Relationships
Intangible asset	1,805,912		1,805,912		1,858,616	1,964,024
Intangible addition			0		0
Intangible amortization expense			(52,704)		(105,408)
Intellectual Property
Intangible asset	21,152,929		21,152,929		21,725,539	22,870,760
Intangible addition			0		0
Intangible amortization expense			(572,610)		(1,145,221)
Internal use software
Intangible asset	$ 643,891		643,891		677,779	$ 521,593
Intangible addition			0		156,186
Intangible amortization expense			$ (33,888)		$ 0

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Intangible Assets (Future Amortization) (Details)	Dec. 31, 2017 USD ($)
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract]
2018	$ 993,981
2019	1,977,388
2020	1,977,388
2021	1,977,388
2022	1,977,388
Thereafter	$ 24,907,154

XML

Intangible Assets (Amortization Expense Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2017
Intangible Assets Amortization Expense Narrative Details
Amortization expense	$ 555,471	$ 555,977	$ 1,128,392	$ 1,111,954	$ 2,223,099

XML

Property, Plant and Equipment (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Balance Sheet Related Disclosures [Abstract]
Land and improvements	$ 2,090,069	$ 2,223,674
Buildings and improvements	6,784,964	6,401,277
Machinery and equipment	5,680,599	5,435,542
Vehicles	1,116,596	1,005,455
Construction in progress	2,170,844	2,196,513
Property and equipment, gross	17,843,072	17,262,461
Less: accumulated depreciation	(4,212,949)	(3,680,885)
Property, plant and equipment, net	$ 13,630,123	$ 13,581,576

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Property, Plant and Equipment (Depreciation Expense Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Property Plant And Equipment Depreciation Expense Narrative Details
Depreciation expense	$ 315,510	$ 286,477	$ 565,197	$ 630,842

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Debt Lines of Creditt (Details) - USD ($)	1 Months Ended	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2017
Working capital lines of credit
Line of Credit Facility, Fair Value of Amount Outstanding	$ 27,399,784	$ 27,592,603
Debt issuance costs	0	(171,512)
KeyBank
Working capital lines of credit
Line of Credit Facility, Fair Value of Amount Outstanding	18,695,896	21,649,089
National Australia Bank
Working capital lines of credit
Line of Credit Facility, Fair Value of Amount Outstanding	$ 8,703,888	$ 6,115,026

XML

Debt Current and Long Term (Details) - USD ($)	Dec. 31, 2017	Jun. 30, 2017
Current portion of long-term debt
Total current portion	$ 358,864	$ 10,309,664
Long-term debt, less current portion
Total long-term portion	13,203,191	1,096,155
Total debt	13,562,055	11,405,819
Keith Building Current
Current portion of long-term debt
Secured Debt, Current	3,901	0
Keith Equipment Current
Current portion of long-term debt
Secured Debt, Current	218,239	209,664
Promissory Note Current
Current portion of long-term debt
Unsecured Debt, Current	100,000	100,000
DuPont
Current portion of long-term debt
Secured Debt, Current	0	10,000,000
Contera RE Short
Current portion of long-term debt
Secured Debt, Current	112,711	0
Debt issuance costs	(77,563)	0
Contera Equip Short
Current portion of long-term debt
Secured Debt, Current	18,473	0
Debt issuance costs	(16,897)	0
Keith Building Long
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	444,713	499,524
Keith Equipment Long
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	545,285	596,631
Contera RE Long
Current portion of long-term debt
Debt issuance costs	(138,917)	0
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	10,287,289	0
Contera Equip Long
Current portion of long-term debt
Debt issuance costs	(16,706)	0
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	$ 2,081,527	$ 0

XML

Debt Future Payments (Details)	Dec. 31, 2017 USD ($)
Fiscal Year
2018	$ 223,473
2019	572,693
2020	2,656,068
2021	10,150,465
2022	92,427
Thereafter	117,012
Total	$ 13,812,138

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Debt (Narrative) (Details)

1 Months Ended

6 Months Ended

Dec. 31, 2014

Oct. 31, 2012

Dec. 31, 2017

Dec. 31, 2016

KeyBank

Line of Credit Facility, Description

On September 22, 2015, the Company and KeyBank National Association ("KeyBank") entered into a credit and securities agreement and related agreements with respect to a $20,000,000 aggregate principal amount revolving credit facility (the "KeyBank Credit Facility"), the principal amount of which was increased to $35,000,000 pursuant to a Fourth Amendment Agreement (the "Fourth Amendment") on September 13, 2017, as more fully described below. Under the Fourth Amendment, all amounts of unpaid principal and interest due under the KeyBank Credit Facility must be paid in full on or before September 12, 2019.

On October 4, 2016, the Company and KeyBank entered into a Second Amendment Agreement effective September 30, 2016 (the "Second Amendment"). The purpose of the Second Amendment was to provide certain temporary changes to the terms of the KeyBank Credit Facility, including: (i) temporarily increasing the borrowing capacity from $20.0 million to (a) up to $25.0 million between October 1, 2016 and November 30, 2016 and (b) up to $30.0 million from February 1, 2017 through March 31, 2017; (ii) temporarily allowing for a $4.0 million over-advance beyond the amounts otherwise available based on the borrowing base calculations, which was available through February 28, 2017; and (iii) temporarily expanding the borrowing base by reducing the reserves that KeyBank may establish with respect to grower payables to 75% between August 31, 2016 and February 28, 2017.

On March 13, 2017, the Company entered into a Third Amendment Agreement (the " Third Amendment"). The purpose of the Third Amendment was to provide certain temporary changes to the terms of the KeyBank Credit Facility, including: (i) further extending the temporary period during which the Company may borrow, repay and reborrow up to $30.0 million in the aggregate under the credit facility until April 21, 2017; and (ii) retroactively and temporarily allowing for over-advances, beyond amounts otherwise available based on the borrowing base calculations under the Credit Facility (a) of up to $3.5 million during the period from March 8, 2017 through March 10, 2017, (b) of up to $5.0 million during the period from March 11, 2017 through March 17, 2017, (c) of up to $6.0 million during the period from March 18, 2017 through March 24, 2017, (d) of up to $7.0 million during the period from March 25, 2017 through March 31, 2017 and (e) of up to $8.5 million during the period from April 1, 2017 through as late as April 20, 2017.

On September 13, 2017, the Company and Key Bank entered into the Fourth Amendment, pursuant to which the maturity date was extended to September 12, 2019 and the principal amount that the Company may borrow, repay and reborrow was increased to $35.0 million, subject to a requirement that the Company maintain a reduced loan balance of (i) not more than $20 million for at least 30 consecutive days over the prior 12 months (measured each quarter on a trailing 12 month basis) and (ii) not more than $25 million for at least 60 consecutive days over the prior 12 months (measured each quarter on a trailing 12 month basis). The Fourth Amendment generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable and 90% of eligible foreign accounts receivable, plus up to 65% of eligible inventory, subject to lender reserves. Loans may be based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.2% per annum), generally at the Company's option.

In the event of a default, at the option of KeyBank, the interest rate on all obligations owing will increase by 3% per annum over the rate otherwise applicable. The Company is required to maintain one or more lockbox or cash collateral accounts at KeyBank, in KeyBank's name, which provide for the collection and remittance of all proceeds from sales of Company product (which is collateral for the KeyBank Credit Facility) on a daily basis. Subject to certain exceptions, the KeyBank Credit Facility is secured by a first priority perfected security interest in all the Company's now owned and after acquired tangible and intangible assets as well as the assets of the Company's domestic subsidiaries, which have guaranteed the Company's obligations under the KeyBank Credit Facility. The KeyBank Credit Facility is further secured by a lien on, and a pledge of, 65% of the stock of S&W Australia Pty Ltd., the Company's wholly-owned subsidiary. The KeyBank Credit Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default. The Company was in compliance with all covenants at December 31, 2017. The outstanding balance on the KeyBank Credit Facility was $21,649,089 at December 31, 2017.

IVS Note

Long-term Debt, Description

On October 1, 2012, the Company issued a five-year subordinated promissory note to IVS in the principal amount of $500,000 (the "IVS Note"), with a maturity date of October 1, 2017. The IVS Note accrues interest at a rate equal to one-month LIBOR at closing plus 2%, which equals 2.2%. Interest is payable in five annual installments, in arrears, on October 1 of each year. Amortizing payments of the principal of $100,000 will also be made on each October 1, with any remaining outstanding principal and accrued interest payable on the maturity date of the IVS Note. The outstanding balance on the IVS Note was $100,000 at December 31, 2017.

Conterra Notes

Long-term Debt, Description

On November 30, 2017, the Company entered into a secured note financing transaction (the "Loan Transaction") with Conterra Agricultural Capital, LLC ("Conterra") for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, the Company issued two secured promissory notes (the "Notes") to Conterra as follows:

• Secured Real Estate Note. The Company issued one Note in the principal amount of $10.4 million (the "Secured Real Estate Note") that is secured by a first priority security interest in the property, plant and fixtures (the "Real Estate Collateral") located at the Company's Five Points, California and Nampa, Idaho production facilities and its Nampa, Idaho and Arlington, Wisconsin research facilities (the "Facilities"). The Secured Real Estate Note matures on November 30, 2020, which, subject to Conterra's approval, may be extended to November 30, 2022. The Secured Real Estate Note bears interest of 7.75% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $515,711, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Company may prepay the Secured Real Estate Note, in whole or in part, at any time after it has paid a minimum of twelve months of interest on the Secured Real Estate Note.

• Secured Equipment Note. The Company issued a second Note in the principal amount of $2.1 million (the "Secured Equipment Note") that is secured by a first priority security interest in certain equipment not attached to real estate located at the Facilities. The Secured Equipment Note is also secured by the Real Estate Collateral. The Secured Equipment Note matures on November 30, 2019, which, subject to Conterra's approval, may be extended to November 30, 2020. The Secured Equipment Note bears interest at a rate of 9.5% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $118,223, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Company may prepay the Secured Equipment Note, in whole or in part, at any time.

The Notes and related documents include customary representations and warranties in addition to customary affirmative and negative covenants (including financial covenants), and customary events of default that permit Conterra to accelerate the Company's obligations under the Notes, including, among other things, that a default under one of the Notes would constitute a default under the other Note. On December 1, 2017, the Company used the proceeds from the Loan Transaction to repay the Pioneer Note.

NAB Facility

Line of Credit Facility, Description

SGI finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility with National Australia Bank Ltd ("NAB"). The current facility, referred to as the 2016 NAB Facilities, was amended as of March 30, 2017 and expires on March 30, 2019. As of December 31, 2017, AUD $7,837,767 (USD $6,115,026) was outstanding under the 2016 NAB Facilities.

The 2016 NAB Facilities, as currently in effect, comprises two distinct facility lines: (i) an overdraft facility (the "Overdraft Facility"), having a credit limit of AUD $980,000 (USD $764,596 at December 31, 2017) and a borrowing base facility (the "Borrowing Base Facility"), having a credit limit of AUD $12,000,000 (USD $9,362,400 at December 31, 2017).

The Borrowing Base Facility permits SGI to borrow funds for periods of up to 180 days, at SGI's discretion, provided that the term is consistent with its trading terms. Interest for each drawdown is set at the time of the drawdown as follows: (i) for Australian dollar drawings, based on the Australian Trade Refinance Rate plus 1.5% per annum and (ii) for foreign currency drawings, based on the British Bankers' Association Interest Settlement Rate for the relevant foreign currency for the relevant period, or if such rate is not available, the rate reasonably determined by NAB to be the appropriate equivalent rate, plus 1.5% per annum. As of December 31, 2017, the Borrowing Base Facility accrued interest on Australian dollar drawings at approximately 5.07% calculated daily. The Borrowing Base Facility is secured by a lien on all the present and future rights, property and undertakings of SGI, the mortgage on SGI's Keith, South Australia property and the Company's corporate guarantee (up to a maximum of AUD $15,000,000).

The Overdraft Facility permits SGI to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of December 31, 2017, the Overdraft Facility accrued interest at approximately 6.77% calculated daily.

For both the Overdraft Facility and the Borrowing Base Facility, interest is payable each month in arrears. In the event of a default, as defined in the NAB Facility Agreement, the principal balance due under the facilities will thereafter bear interest at an increased rate per annum above the interest rate that would otherwise have been in effect from time to time under the terms of each facility (i.e., the interest rate increases by 4.5% per annum under the Borrowing Base Facility and the Overdraft Facility rate increases to 13.92% per annum upon the occurrence of an event of default).

Both facilities constituting the 2016 NAB Facilities are secured by a fixed and floating lien over all the present and future rights, property and undertakings of SGI and are guaranteed by the Company as noted above. The 2016 NAB Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the NAB facility agreements. SGI was in compliance with all NAB debt covenants at December 31, 2017.

Long-term Debt, Description

In January 2015, NAB and SGI entered into a new business markets - flexible rate loan (the "Keith Building Loan") in the amount of AUD $650,000 (USD $507,130 at December 31, 2017). Since entering into the Keith Building Loan, the limit has been changed on three occasions, with the current limit being AUD $675,000 (USD $526,635 at December 31, 2017), and a separate machinery and equipment facility (the "Keith Machinery and Equipment Facility") has been added with the limit being changed on two occasions, the current limit being AUD $702,779 (USD $548,308) at December 31, 2017. At December 31, 2017, the principal balance on the Keith Building Loan was AUD $575,000 (USD $448,615) with unused availability of AUD $100,000 (USD $78,021). At December 31, 2017, the principal balance on the Keith Machinery and Equipment Facility was AUD $674,132 (USD $525,957) with no unused availability. In February 2016, NAB and SGI also entered into a master asset finance facility (the "Master Assets Facility"). At December 31, 2017, the principal balance on the Master Assets Facility was AUD $304,493 (USD $237,566) with unused availability of AUD $445,507 (USD $347,585). The Master Asset Facility has various maturity dates through 2021 and have interest rates ranging from 4.79% to 5.31%.

The Keith Building Loan and Keith Machinery and Equipment Facility are used for the construction of a building on SGI's Keith, South Australia property, purchase of adjoining land and for the machinery and equipment for use in the operations of the building. The Keith Building Loan matures on November 30, 2024. The interest rate on the Keith Building Loan varies from pricing period to pricing period (each such period approximately 30 days), based on the weighted average of a specified basket of interest rates (6.11% as of December 31, 2017). Interest is payable each month in arrears. The Keith Machinery and Equipment Facility bears interest, payable in arrears, based on the Australian Trade Refinance Rate quoted by NAB at the time of the drawdown, plus 2.9%. The Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the facility agreement. They are secured by a lien on all the present and future rights, property and undertakings of SGI, the Company's corporate guarantee and a mortgage on SGI's Keith, South Australia property.

Pioneer Note

Long-term Debt, Description

On December 31, 2014, the Company issued a three-year secured promissory note to DuPont Pioneer in the initial principal amount of $10,000,000 (the "Pioneer Note"), with a maturity date of December 31, 2017. The Pioneer Note accrued interest at 3% per annum. Interest was payable in three annual installments, in arrears, commencing on December 31, 2015. On December 31, 2014, the Company also issued contingent consideration to DuPont Pioneer which required the Company to increase the principal amount of the Pioneer Note by up to an additional $5,000,000 if the Company met certain performance metrics during the three-year period following December 31, 2014. The earn out payment to DuPont Pioneer was finalized in October 2017 and this amount of $2,500,000 was added to the Pioneer Note in October 2017. On December 1, 2017, the Company repaid the Pioneer Note. The repayment amount included the $2.5 million earn-out payment related to the Pioneer Acquisition that was added to the principal amount of the Pioneer Note in October 2017.

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Senior Convertible Notes and Warrants (Narrative) (Details)

6 Months Ended

Dec. 31, 2017

Senior Convertible Notes And Warrants Narrative Details

Debenture and Warrant Description

On December 31, 2014, the Company consummated the sale of senior secured convertible debentures (the "Debentures") and common stock purchase warrants (the "Warrants") to various institutional investors ("Investors") pursuant to the terms of a securities purchase agreement among the Company and the Investors. At closing, the Company received $27,000,000 in gross proceeds. Offering expenses of $1,931,105 attributed to the Debentures were recorded as deferred financing fees and recorded as a debt discount and offering expenses of $424,113 attributed to the Warrants were expensed during the year ended June 30, 2015. The net proceeds were paid directly to DuPont Pioneer in partial consideration for the purchase of certain DuPont Pioneer assets, the closing for which also took place on December 31, 2014.

Debentures

At the date of issuance, the Debentures were due and payable on November 30, 2017, unless earlier converted or redeemed. The Debentures bear interest on the aggregate unconverted and then outstanding principal amount at 8% per annum, payable in arrears monthly beginning February 2, 2015. Commencing on the occurrence of any Event of Default (as defined in the Debentures) that results in the eventual acceleration of the Debentures, the interest rate will increase to 18% per annum. The monthly interest is payable in cash, or in any combination of cash or shares of the Company's common stock at the Company's option, provided certain "equity conditions" defined in the Debentures are satisfied.

Beginning on July 1, 2015, the Company was required to make monthly payments of principal as well, payable in cash or any combination of cash or shares of its common stock at the Company's option, provided all of the applicable equity conditions are satisfied. The Debentures contain certain rights of acceleration and deferral at the holder's option in the event a principal payment is to be made in stock and contains certain limited acceleration rights of the Company, provided certain conditions are satisfied.

During Fiscal Year 2016, the Company accelerated three redemption payments totaling $2,830,049.

During the year ended June 30, 2017, certain holders of the Debentures converted an aggregate of $3,168,342 of principal and interest into 684,321 shares of the Company's common stock in accordance with the terms of the Debentures. Upon conversion, the Company recognized interest expense of $194,939 related to unamortized debt discount on the Debentures and incurred $7,070 of stock issuance costs.

As of June 30, 2017, the Debentures were fully retired and had no outstanding balance.

Warrants

The Warrants entitle the holders to purchase, in the aggregate, 2,699,999 shares of the Company's common stock. The Warrants are exercisable through their expiration on June 30, 2020, unless earlier redeemed. The Warrants were initially exercisable at an exercise price equal to $5.00. On September 30, 2015, pursuant to the terms of the Warrants, the exercise price was reset to $4.63. In addition, if the Company issues or is deemed to have issued securities at a price lower than the then applicable exercise price during the three-year period ending December 31, 2017, the exercise price of the Warrants will adjust based on a weighted average anti-dilution formula ("down-round protection"). On November 24, 2015, the Company closed on a private placement transaction in which 1,180,722 common shares were sold at $4.15 per share. Pursuant to the down-round protection terms of the Warrants, the exercise price was adjusted to $4.59 on November 24, 2015. On February 29, 2016, the Company completed a rights offering and accompanying noteholders' participation rights offering in which an aggregate of 2,125,682 shares of common stock were sold at $4.15 per share, triggering an adjustment of the exercise price of the Warrants to $4.53. On July 19, 2017, the Company completed a private placement transaction in which an aggregate of 2,685,000 shares of common stock were sold at $4.00 per share, triggering an adjustment of the exercise price of the Warrants to $4.46. On December 22, 2017, the Company completed a rights offering and backstop commitment in which an aggregate of 3,500,000 shares of common stock were sold at $3.50 per share, triggering an adjustment of the exercise price of the Warrants to $4.32. The down-round protection provision of the warrants expired on December 31, 2017.

The Warrants may be exercised for cash, provided that, if there is no effective registration statement available registering the exercise of the Warrants, the Warrants may be exercised on a cashless basis. At any time that (i) all equity conditions set forth in the Warrants have been satisfied, and (ii) the closing sales price of the common stock equals or exceeds $12.00 for 15 consecutive trading days (subject to adjustment for stock splits, reverse stock splits and other similar recapitalization events), the Company may redeem all or any part of the Warrants then outstanding for cash in an amount equal to $0.25 per Warrant.

Accounting for the Conversion Option and Warrants

Due to the down-round price protection included in the terms of the Warrants, the Warrants are treated as a derivative liability in the consolidated balance sheet, measured at fair value and marked to market each reporting period until the earlier of the Warrants being fully exercised or December 31, 2017, when the down-round protection expires. The down-round price protection expired on December 31, 2017, accordingly, the fair value of the Warrants as of December 31, 2017 was reclassified to additional paid in capital within the equity section of the balance sheet. The initial fair value of the Warrants on December 31, 2014 was $4,862,000. At December 31, 2017 and June 30, 2017, the fair value of the Warrants was estimated at $2,405,300 and $2,836,600, respectively. The Warrants were valued at December 31, 2017 using the Monte Carlo simulation model, under the following assumptions: (i) remaining expected life of 2.5 years, (ii) volatility of 39.0%, (iii) risk-free interest rate of 1.92% and (iv) dividend rate of zero. The aggregate fair value of the Warrants derived via the Monte Carlo analysis were also weighted by a prior third party market transaction and third party indications of fair value. The prior third party market transaction was provided a weighting of 10.0% while the third party indications of fair value were provided a 50% weighting in the fair value analysis.

The Warrants were valued at June 30, 2017 using the Monte Carlo simulation model, under the following assumptions: (i) remaining expected life of 3 years, (ii) volatility of 45.6%, (iii) risk-free interest rate of 1.54% and (iv) dividend rate of zero. The aggregate fair value of the Warrants derived via the Monte Carlo analysis were also weighted by a prior third party market transaction and third party indications of fair value. The prior third party market transaction was provided a weighting of 10.0% while the third party indications of fair value were provided a 50% weighting in the fair value analysis.

Of the $27,000,000 in principal amount of Debentures sold in December 2014, $22,138,000 of the initial proceeds was allocated to the Debentures. The required redemption contingent upon the real estate sale was determined to be an embedded derivative not clearly and closely related to the borrowing. As such, it was bifurcated and treated as a derivative liability, recorded initially at its fair value of $150,000, leaving an allocation to the host debt of $21,988,000. The difference between the initial amount allocated to the borrowing and the face value of the Debentures was amortized over the term of the Debentures using the effective interest method. Debt issuance costs totaling $1,931,105 were also amortized over the term of the Debentures using the effective interest method. In addition, the reduction in the conversion price of the Debentures as of September 30, 2015 resulted in a beneficial conversion feature of $871,862, which was recognized as additional debt discount and an increase to additional paid-in capital.

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Warrants Outstanding (Details) - $ / shares	6 Months Ended	12 Months Ended
	Dec. 31, 2017	Jun. 30, 2017	Jun. 30, 2016
Warrants outstanding, beginning	2,699,999	2,749,999
Warrant issuances	0	0
Warrants expired	0	(50,000)
Warrants outstanding. ending	2,699,999	2,699,999
Underwriter warrants
Warrant issue date		2012-05
Warrants outstanding, beginning	0	50,000
Exercise price per share			$ 6.88
Warrant expiration date		2017-02
Warrant issuances		0
Warrants expired		(50,000)
Warrants outstanding. ending		0
Warrants
Warrant issue date	2014-12	2014-12
Warrants outstanding, beginning	2,699,999	2,699,999
Exercise price per share	$ 4.32		$ 4.53
Warrant expiration date	2020-06	2020-06
Warrant issuances	0	0
Warrants expired	0	0
Warrants outstanding. ending	2,699,999	2,699,999

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Foreign Currency Contract (Narrative) (Details) - USD ($)

3 Months Ended

6 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2017

Dec. 31, 2016

Jun. 30, 2017

Foreign Currency Contract Narrative Details

Foreign Currency Transactions, Description

The Company's subsidiary, SGI, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company manages through the use of foreign currency forward contracts. These foreign currency contracts are not designated as hedging instruments; accordingly, changes in the fair value are recorded in current period earnings. These foreign currency contracts had a notional value of $4,340,928 at December 31, 2017 and their maturities range from January 2018 to June 2018.

The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract assets totaled $68,172 at December 31, 2017 and $166,629 at June 30, 2017. The Company recorded a loss on foreign exchange contracts of $61,560 and $249,728, which is reflected in cost of revenue, for the three months ended December 31, 2017 and 2016, respectively. The Company recorded a loss on foreign exchange contracts of $100,864 and $147,356, which is reflected in cost of revenue for the six months ended December 31, 2017 and 2016, respectively.

Foreign exchange contract asset

$ 68,172

$ 68,172

$ 166,629

Loss on foreign exchange contracts

$ 61,560

$ 249,728

$ 100,564

$ 147,356

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Commitments and Contingencies (Operating Leases Narrative) (Details)	Dec. 31, 2017 USD ($)
Commitments And Contingencies Operating Leases Narrative Details
Purchase commitments	$ 7,000,000

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Related Party Transactions (Narrative) (Details) - USD ($)

6 Months Ended

Dec. 31, 2017

Jun. 30, 2017

Dec. 31, 2016

Jun. 30, 2016

Accounts Receivable, Related Parties, Current

$ 0

$ 0

Accounts Payable, Related Parties, Current

$ 117,164

$ 331,694

IVM

Related Party Transaction, Description of Transaction

Glen D. Bornt, a member of the Company's Board of Directors until January 9, 2018, is the founder and President of Imperial Valley Milling Co. ("IVM"). He is IVM's majority shareholder and a member of its Board of Directors. Glen D. Bornt is also a majority shareholder of Kongal Seeds Pty. Ltd. ("Kongal"). IVM had a 15-year supply agreement with IVS, and this agreement was assigned by IVS to the Company when it purchased the assets of IVS in October 2012. IVM contracts with alfalfa seed growers in California's Imperial Valley and sells its growers' seed to the Company pursuant to a supply agreement. Under the terms of the supply agreement, IVM's entire certified and uncertified alfalfa seed production must be offered and sold to the Company, and the Company has the exclusive option to purchase all or any portion of IVM's seed production. The Company paid $1,997,256 to IVM during the six months ended December 31, 2017. Amounts due to IVM totaled $115,582 and $326,941 at December 31, 2017 and June 30, 2017, respectively. The Company paid $0 to Kongal during the six months ended December 31, 2017. Amounts due to Kongal totaled $1,582 and $4,753 at December 31, 2017 and June 30, 2017, respectively.

Related Party Transaction, Purchases from Related Party

$ 1,997,256

Accounts Payable, Related Parties, Current

$ 115,582

326,941

Kongal Seeds

Related Party Transaction, Description of Transaction

Glen D. Bornt, a member of the Company's Board of Directors until January 9, 2018, is the founder and President of Imperial Valley Milling Co. ("IVM"). He is IVM's majority shareholder and a member of its Board of Directors. Glen D. Bornt is also a majority shareholder of Kongal Seeds Pty. Ltd. ("Kongal"). IVM had a 15-year supply agreement with IVS, and this agreement was assigned by IVS to the Company when it purchased the assets of IVS in October 2012. IVM contracts with alfalfa seed growers in California's Imperial Valley and sells its growers' seed to the Company pursuant to a supply agreement. Under the terms of the supply agreement, IVM's entire certified and uncertified alfalfa seed production must be offered and sold to the Company, and the Company has the exclusive option to purchase all or any portion of IVM's seed production. The Company paid $1,997,256 to IVM during the six months ended December 31, 2017. Amounts due to IVM totaled $115,582 and $326,941 at December 31, 2017 and June 30, 2017, respectively. The Company paid $0 to Kongal during the six months ended December 31, 2017. Amounts due to Kongal totaled $1,582 and $4,753 at December 31, 2017 and June 30, 2017, respectively.

Related Party Transaction, Purchases from Related Party

$ 0

Accounts Payable, Related Parties, Current

$ 1,582

$ 4,753

Wynnefield

Related Party Transaction, Description of Transaction

On July 19, 2017, the Company entered into a Securities Purchase Agreement with certain purchasers, including MFP Partners, L.P. ("MFP"), a stockholder of the Company, and certain entities related to Wynnefield Capital Management LLC (collectively, "Wynnefield"), pursuant to which MFP purchased approximately $3.7 million of shares of its common stock and Wynnefield purchased approximately $3.0 million of shares of its common stock. Each of MFP and Wynnefield is a beneficial owner of more than 5% of the Company's common stock. Alexander C. Matina, a member of the Company's Board, is Vice President, Investments of MFP.

 On December 22, 2017, the Company completed the closing of its previously announced rights offering. At the closing, the Company sold and issued an aggregate of 2,594,923 shares of its Common Stock at a subscription price of $3.50 per share pursuant to the exercise of subscriptions and oversubscriptions in the rights offering from its existing stockholders. Pursuant to an Investment Agreement, dated October 3, 2017, between the Company and MFP, MFP agreed to purchase, at the subscription price, all of the shares not purchased in the Rights Offering (the "Backstop Commitment"). Accordingly, on December 22, 2017, the Company and MFP completed the closing of the Backstop Commitment, in which the Company sold and issued 905,077 shares of its Common Stock to MFP. Combined, the Company sold and issued an aggregate of 3,500,000 shares of its common stock for aggregate gross proceeds of $12.25 million.

Mark Wong

Related Party Transaction, Description of Transaction

On October 11, 2017, the Company entered into a Securities Purchase Agreement with Mark W. Wong, the Company's President and Chief Executive Officer, pursuant to which the Company sold and issued an aggregate of 75,000 shares of its Common Stock at a purchase price of $3.50 per share, for aggregate gross proceeds of $262,500.

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Equity-Based Compensation (Plan Narrative) (Details) - USD ($)

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

Mar. 31, 2016

Dec. 31, 2015

Jul. 31, 2015

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2017

Dec. 31, 2016

Jun. 30, 2017

Stock option exercise price

$ 3.08

$ 4.19

Share-based compensation

$ 193,571

$ 296,235

$ 451,033

$ 578,659

2009 Plan

Description of the 2009 Equity Incentive Plan

2009 Equity Incentive Plan

In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan (as amended and/or restated from time to time, the "2009 Plan"). The plan authorized the grant and issuance of options, restricted shares and other equity compensation to the Company's directors, employees, officers and consultants, and those of the Company's subsidiaries and parent, if any. In October 2012 and December 2012, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,250,000 shares. In September 2013 and December 2013, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,700,000 shares. In September 2015 and December 2015, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 2,450,000 shares.

Plan Modification, Description and Terms

The Company utilizes a Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of the Company's common stock to estimate the fair value of employee options grants.

Number of shares reserved for issuance under the plan

1,700,000

1,700,000

Shares available for future grants and awards

526,603

526,603

Terms of awards and other restrictions

The term of incentive stock options granted under the 2009 Plan may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the 2009 Plan must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted.

July 2015 Grants

Fiar value of RSU on date of grant

$ 420,465

December 2015 Grants

Fiar value of RSU on date of grant

$ 119,251

March 2016 Grants

Fiar value of RSU on date of grant

$ 12,180

FY 2017

Fiar value of RSU on date of grant

$ 374,530

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Equity-Based Compensation (Weighted Average Assumptions) (Details) - Stock Options - $ / shares	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Risk Free Interest Rate, minimum	1.72%
Risk Free Interest Rate, maximum	1.91%
Dividend yield	0.00%
Volatility of common stock, minimum	45.30%
Volatility of common stock, maximum	45.50%
Average forfeiture assumptions	1.40%
Weighted average grant date fair value of options granted and outstanding	$ 1.23
Stock-based compensation, total compensation cost not yet recognized, period for recognition	1 year 187 days
Risk Free Interest Rate, minimum		1.20%
Risk Free Interest Rate, maximum		1.90%
Dividend yield		0.00%
Volatility of common stock, minimum		39.20%
Volatility of common stock, maximum		51.60%
Average forfeiture assumptions		2.40%
Stock-based compensation, total compensation cost not yet recognized, period for recognition	2 years 83 days

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Equity-Based Compensation (Schedule Of Stock Option Activity) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2017	Jun. 30, 2017	Jun. 30, 2016
Equity-based Compensation Schedule Of Stock Option Activity Details
Options, Outstanding as of beginning of period	990,528	1,021,418
Options, Granted	62,755	230,610
Options, Exercised	0	(232,000)
Options, Forfeited, cancelled or expired	(190,000)	(29,500)
Options, Outstanding as of end of period	863,283	990,528
Options, vested and exercisable at end of period	632,416
Options, vested and expected to vest	862,808
Weighted-Average Exercise Prices, Outstanding as of beginnig of period	$ 5.12	$ 5.14
Weighted-Average Exercise Prices, Granted	3.08	4.19
Weighted-Average Exercise Prices, Exercised	0	4.20
Weighted-Average Exercise Prices, Forfeited, cancelled or expired	6.99	5.95
Weighted-Average Exercise Prices, Outstanding as of end of period	4.56	$ 5.12
Weighted-Average Exercise Prices, Vested and Exercisable	4.82
Weighted-Average Exercise Price, Vested and expected to vest	$ 4.56
Options Outstanding, Weighted-Average Remaining Contractual Term (in years)	6 years 180 days	4 years 108 days
Weighted-Average Remaining Contractual Term (in years), Vested and Exercisable	3 years 216 days
Weighted-Average Remaining Contractual Term (in years), Vested and expected to vest	4 years 180 days
Options, Outstanding, Aggregate Intrinsic Value	$ 72,914	$ 100,344	$ 142,381
Options, vested and xxercisable, Aggregate Intrinsic Value	19,183
Options, Vested and expected to vest, Aggregate Intrinsic Value	$ 72,496

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Equity-Based Compensation (Schedule Of Other Than Option Plan Activity) (Details) - Nonvested RSU's	6 Months Ended
	Dec. 31, 2017 $ / shares shares
Nonvested units outstanding at beginning	120,971
Granted	38,114
Vested	(90,066)
Forfeited	(3,680)
Nonvested units outstanding at end	65,339
Units granted, weighted average grant date fair value per unit | $ / shares	$ 3.06
Units vested, weighted average grant date fair value per unit | $ / shares	5.68
Nonvested units outstanding, weighted average grant date fair value per unit | $ / shares	$ 4.06
Weighted-average remaining contractual life (years)	1 year 180 days

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Equity-Based Compensation (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Stock-based compensation	$ 193,571	$ 296,235	$ 451,033	$ 578,659
Stock Options
Stock-based compensation, total compensation cost not yet recognized, period for recognition			2 years 83 days
Stock Options
Unrecognized stock compensation expense, net of estimated forfeitures, related to options	302,942		$ 302,942
Stock-based compensation, total compensation cost not yet recognized, period for recognition			1 year 187 days
Nonvested RSU's
Unrecognized stock compensation expense related to restricted stock grants	$ 220,169		$ 220,169
Stock-based compensation, total compensation cost not yet recognized, period for recognition				1 year 216 days
Stock-based compensation			$ 311,067	$ 240,241

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Non-Cash Investing Activities for Statements of Cash Flows (Details) - USD ($)	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Non-cash Investing Activities For Statements Of Cash Flows Details
Issuance of common stock upon conversion of principal and interest of convertible debentures	$ 0	$ 3,168,342