10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2022

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 No.)
2101 Ken Pratt Blvd., Suite 201, Longmont, CO	80501
(Address of Principal Executive Offices)	(Zip Code)

(720) 506-9191

(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	SANW	The Nasdaq Capital Market

Securities Registered Pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

☐ Yes ☒ No

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 such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically 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 such files).

☒ Yes ☐ 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 the 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	☒	Smaller reporting company	☒
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $42,407,124.

The number of shares outstanding of common stock of the registrant as of September 21, 2022 was 42,607,585.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's Proxy Statement for its next Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement is to be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended June 30, 2022.

S&W SEED COMPANY

FORM 10-K

FOR THE FISCAL YEAR ENDED JUNE 30, 2022

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS			1
PART I			3
	Item 1.	Business	3
	Item 1A.	Risk Factors	12
	Item 1B.	Unresolved Staff Comments	27
	Item 2.	Properties	28
	Item 3.	Legal Proceedings	29
	Item 4.	Mine Safety Disclosures	29
PART II			30
	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	30
	Item 6.	Reserved	30
	Item 7.	Management’s Discussion and Analysis of Financing Condition and Results of Operations	31
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	45
	Item 8.	Financial Statements and Supplementary Data	46
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	79
	Item 9A.	Controls and Procedures	79
	Item 9B.	Other Information	79
	Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	79
PART III			80
	Item 10.	Directors, Executive Officers and Corporate Governance	80
	Item 11.	Executive Compensation	80
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	80
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	80
	Item 14.	Principal Accountant Fees and Services	80
PART IV			81
	Item 15.	Exhibits and Financial Statement Schedules	81
	Item 16.	Form 10-K Summary	87
SIGNATURES			88

i

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to: statements concerning the potential effects of the COVID-19 pandemic on our business; any 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,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions or variations intended to identify forward-looking statements. 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, including certain assumptions, that, if they never materialize or prove incorrect, could cause our actual results and the timing of certain events to differ materially from those expressed or implied by such forward-looking statements. Risks, uncertainties and assumptions include the following:

• whether we are successful in implementing our strategies focused on growth opportunities, changes in our cost structure and improved financial performance;

• whether we are able to maintain compliance with our current loan agreements or secure replacement loan financing, including to provide access to sufficient liquidity to pay our growers and suppliers;

• the COVID-19 pandemic, global inflation and the ongoing military conflict between Russia and Ukraine and the extent to which they continue to disrupt the local and global economies, as well as our business and the businesses of our customers, distributors and suppliers;

• changes in demand for our seed products, including Double Team^TM, our non-GMO herbicide tolerant sorghum solution;

• whether we are able to develop and successfully launch additional trait technology products;

• whether we are successful in commercializing our current and future trait technology products, including Double Team^TM;

• our plans for expansion of our business (including by expanding crop offerings and market share of existing offerings through acquisitions) and our ability to successfully integrate acquisitions into our operations;

• whether we continue to invest in research and development and whether such investment results in trait improvement across our crop categories;

• the continued ability of our distributors and suppliers to have access to sufficient liquidity to fund their operations;

• market 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;

1

• the cost and other implications of pending or future legislation or court decisions and pending or future accounting pronouncements;

• our preliminary, nonbinding discussions for a joint venture in wheat with Trigall Genetics may not result in a consummated transaction, the joint venture may not be created in the manner or on the terms expected, or at all, and the joint venture may not provide the anticipated benefits; and

• other risks that are described herein including but not limited to the items discussed in Part I, Item 1A. “Risk Factors” of this Annual Report on Form 10-K, or the Annual Report, and that are otherwise described or updated from time to time in our filings with the Securities Exchange Commission.

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 described above.

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 Annual Report on Form 10-K, 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 Annual Report on Form 10-K 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 Annual Report on Form 10-K, 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 Annual Report on Form 10-K, 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 2022,” “fiscal 2021,” and “fiscal 2020” in this Annual Report on Form 10-K refer to the respective fiscal year ended June 30, 2022, 2021 and 2020, 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.

2

PART I

Item 1. Business

Overview

We are a global multi-crop, middle-market agricultural company. We are market leaders in the breeding, production and sale of alfalfa seed and sorghum seed. We also have a commercial market presence in sunflower, wheat and pasture seed and maintain an active stevia development program.

Our seed platform develops and supplies high quality germplasm designed to produce higher yields for farmers worldwide. We sell over 500 seed products in more than 40 countries. We maintain an active product pipeline and expect to introduce more than 20 new products during the fiscal year 2023.

Founded in 1980, we began our operations as a limited producer of non-dormant alfalfa seed varieties bred for warm climates and high-yields, including varieties that can thrive in poor, saline soils. Over the years we have built a diversified, global agricultural platform through a combination of organic growth and strategic acquisitions and collaborations, including:

• Our 2012 acquisition of Imperial Valley Seeds, Inc., which enabled us to expand production of non-GMO alfalfa seed into California's Imperial Valley, thereby ensuring a non-GMO uncontaminated source of alfalfa seed due to the prohibition on growing GMO crops in the Imperial Valley, as well as enabling us to diversify our production areas and distribution channels;

• Our 2012 acquisition of a portfolio of dormant alfalfa germplasm, which launched our entry into the dormant alfalfa market;

• Our 2013 acquisition of Seed Genetics International Pty Ltd (now S&W Seed Company Australia Pty Ltd, or S&W Australia), the leading producer of non-dormant alfalfa seed in South Australia, which made us the largest non-dormant alfalfa seed company in the world, with production capabilities in both hemispheres;

• Our 2014 acquisition of alfalfa production and research facility assets and conventional (non-GMO) alfalfa germplasm from Pioneer Hi-Bred International, Inc., or Pioneer (now a subsidiary of Corteva Agriscience, Inc., or Corteva), which substantially broadened and improved our dormant alfalfa germplasm portfolio and deepened our production, research and product development capabilities;

• Our 2016 acquisition of the business and assets of SV Genetics Pty Ltd, a developer of proprietary hybrid sorghum and sunflower seed germplasm, which expanded our crop focus into two areas which we believe have global growth potential;

• Our 2018 acquisition of the assets of Chromatin, Inc. and related companies, which positioned us to become a global leader in the hybrid sorghum seed market and enhanced our distribution channels both internationally and within a U.S.-based dealer and distributor network;  

• Our 2018 joint venture with AGT Foods Africa Proprietary Limited and 2019 joint venture with Zaad Holdings Limited, both based in South Africa, each of which were formed to produce our hybrid sunflower, grain sorghum and forage sorghum seed in Africa for sale in Africa, the Middle East and Europe;

• Our 2019 license of commercialized and developmental wheat germplasm from Corteva, through which we entered the largest grain crop market in Australia;

• Our 2020 acquisition of Pasture Genetics Pty Ltd., or Pasture Genetics, the third largest pasture seed company in Australia, which further diversified our product offerings in Australia and strengthened our Australian sales team and distribution relationships;

• Our 2020 collaboration with ADAMA Ltd., or ADAMA, a subsidiary of China National Chemical Engineering Co Ltd., or ChemChina, to bring to the U.S. sorghum market the Double Team™ post emerge weed management system, consisting of ADAMA’s proprietary herbicides and our non-GMO, herbicide tolerant sorghum hybrids; and

• Our 2020 licensing agreement with The Agricultural Alumni Seed Improvement Association, Inc., an affiliate of Purdue University in West Lafayette, IN, to develop and commercialize worldwide a non-GMO, dhurrin-

3

free trait in sorghum species, which aims to eliminate the risk of grazing livestock illness and death from prussic acid that develops naturally in traditional sorghum varieties under certain conditions.

Our Strategy

The global agriculture market is experiencing rapid change driven by population growth, increasing consumer demand and emerging markets, environmental challenges, limited availability of arable land and diverse regulatory requirements. As a result, farmers and other industry participants are facing continuous pressure to cost-effectively increase productivity and output. These and certain other factors have led to strategic realignments and significant consolidation in the seed industry, leaving a small number of large players.

We believe this environment presents an opportunity to build a global agricultural company focused on crop and market opportunities that large seed companies may overlook, underserve or ineffectively address.

We believe our core strengths listed below position us to capitalize on this market opportunity:

• Strong Germplasm Asset Base and Development Capabilities. We believe we have the largest and most diversified alfalfa and sorghum germplasm pool in the world. Our germplasm pool offers traits sought by farmers who grow forage hay, forage sorghum and grain sorghum, including high yield, drought tolerance and disease tolerance. We continue to invest in research and development programs in the United States, Australia and South America with an emphasis on driving trait improvement across all of our crop categories.  

• Cost-Efficient Global Supply Chain. We produce seed in the Western United States, Canada, Australia and South Africa under contract with select third-party growers. We currently maintain approximately 200 grower relationships, many of which are longstanding. Our global, but localized, production capabilities allow us to produce seed close to the customer to ensure the seed product is developed specifically for the conditions and requirements of that customer’s region and produced at low cost. We condition and package seed primarily in our own facilities located in Idaho, Texas and Australia. We believe that direct ownership of our production facility assets gives us more flexibility to react to demand changes unique to each geography, greater control over product quality and a lower cost structure.

• Global Distribution Capabilities and Relationships. We sell our seed through one of the industry’s largest networks of distributors and dealers, reaching more than 40 countries.  In the United States, we believe that our dealer and distributor network, unique among middle-market seed companies, provides a platform to support sales growth across crop categories. In Australia, we recently enhanced our sales and distribution capabilities through our acquisition of Pasture Genetics.

• Deep Industry Expertise. We believe that our management team has deep industry experience and a demonstrated record of success that is unmatched for a seed industry company of our size. Our leadership team includes both proven industry executives recruited to our company and top talent acquired through our various acquisitions. Mark Wong, our Chief Executive Officer, has over 40 years of senior executive experience in the agriculture industry and has successfully built, operated, and sold multiple seed companies to industry leaders across multiple crops, including sorghum, corn, soybeans, and vegetables.  

Our goal is to be a leading multi-crop, middle-market agricultural company; delivering value to our customers and strong financial returns to our shareholders.  To reach our goal, we have prioritized the following strategic initiatives:

• Focus on Key Products that Address Unmet Market Needs. We expect to introduce more than 20 new products during the fiscal year 2023 across our current crop offerings. We also plan to continue development activities aimed to generate high-value, improved traits in our crops and to begin commercialization of seed products carrying those traits. We completed a Spring 2022 commercial launch of sorghum hybrids incorporating our proprietary, patent-pending herbicide tolerant trait as part of our Double Team™ collaboration with ADAMA. We are also developing and testing new sorghum products absent of dhurrin, a precursor to prussic acid, a known toxin which can negatively impact animal health when sorghum plants are grazed.

• Build Our Multi-Channel Distribution Network and Execute on International Cross-Selling Opportunities.  Our organization is aligned across geographic lines, as opposed to product lines. We believe that this structure allows us to make the best use of distribution assets like our United States dealer and distributor network and

4

our Australian sales force (recently expanded by our acquisition of Pasture Genetics) and to unlock potential sales synergies through international cross-selling of products. We believe that a robust, diverse distribution network will allow us to continue to evolve beyond our historical dependence on certain geographical markets which carry higher political, regulatory and economic risks.

• Exploit International Production Capability for Best-In Class Cost Structure. Our streamlined international supply chain provides us with flexibility in sourcing product to meet customer needs. We are focused on exploiting this ability to shift production to low-cost areas to both support our competitive position and improve our margins.

• Commercialize Stevia. We believe that an opportunity exists to bring to market new stevia varieties that can both meet consumer taste requirements and have yield quality that would enable farmers to profitably grow stevia in North and South America. We plan to leverage our proprietary stevia germplasm to form collaborations and commercial agreements with supply chain partners to create a U.S.-based stevia production industry for high-quality stevia sweetener with superior taste profiles that would supply major customers in the U.S. market.

• Enter the Camelina Market. We are an integrated global seed company with specific expertise in breeding, production, sales and distribution of small seeded and specialty crops, including camelina, which we believe are highly desirable for biofuel production. We expect to plant 300 acres of camelina in calendar year 2022 for seed harvest in 2023. It is our goal to enter the camelina market as a seed and technology provider; the industry has seen multiple transactions that we believe provide a potential future roadmap for S&W.

Our Current Crops

Alfalfa

The Alfalfa Market. Alfalfa seed is primarily used for growing alfalfa hay, which is grown throughout the world as “forage” for livestock, including dairy and beef cattle, horses and sheep. The alfalfa industry (and therefore the alfalfa seed industry) is highly dependent on the dairy industry, which is the largest consumer of alfalfa hay. As the global middle class expands and emerging markets adopt a diet with higher protein consumption, we expect the demand for alfalfa production around the world to increase.

We estimate that current global alfalfa hay crop production is 200 million metric tons per year and that global annual alfalfa seed sales are approximately $500 million.  

S&W’s Alfalfa Seed Portfolio. Our current portfolio of over 200 commercialized alfalfa seed products spans both non-dormant varieties, which grow year-round, and dormant varieties, which have adapted to cold climates by going dormant during periods when frost or snow conditions would otherwise kill them. Our specialty is high-yield alfalfa varieties with a wide range of adaptation across many growing environments. Our alfalfa seed products include varieties that exhibit the traits that farmers most value, such as high yield, root rot resistance, lodging resistance, salt tolerance, drought tolerance, leafhopper resistance and stem nematode resistance.

Over the past several years dormant alfalfa replant acreage in North America has trended downward, resulting in lower market size and corresponding seed sales for all companies in the sector. As a result, we have reduced our R&D expenditures in support of the dormant alfalfa market and have diverted those R&D assets towards bioenergy/cover crop development.

Sorghum

The Sorghum Market. Sorghum comes in two types, forage and grain. Forage sorghum utilizes the whole plant fed to livestock through grazing, dried hay or sileage. Grain sorghum is bred and managed to maximize production of the seed or grain. While grain from sorghum has been traditionally used for livestock feed and in ethanol production, sorghum is gaining popularity as a substitute for wheat and other grains in food products due to its gluten-free characteristics, as well as its antioxidant, high protein, low fat, high fiber and non-GMO properties. Additionally, the pet food industry has been increasing its use of grain sorghum due to its nutritional benefits and enhanced digestibility. Sorghum requires less water to grow than many other crops and is generally used as a replacement for

5

corn and other grains in areas where water is scarce. S&W’s primary markets are currently in the Americas, Europe and Australia where sorghum is grown commercially and requires high quality hybrid seed.

Global sorghum crop production is estimated to be 60 million metric tons per year.  Approximately half of this production is in Africa and South Asia using farmer-saved seed and the remainder produced in the Americas, Europe and Australia using commercial hybrid seed. We estimate that global annual sorghum seed sales are approximately $500 million.

S&W’s Sorghum Portfolio. Our current portfolio of approximately 40 commercialized sorghum seed products includes both forage and grain sorghum. We believe that many of our sorghum hybrids are unmatched and consistently out-yield competitor products in select markets.

We plan to launch two new conventional grain sorghum hybrids in fiscal year 2023 to replace aging products in our portfolio. For our technology trait product lines, we plan to launch in fiscal year 2023 at least one new dhurrin-free hybrid in collaboration with The Agricultural Alumni Seed Improvement Association, Inc., an affiliate of Purdue University in West Lafayette, Indiana. We plan to offer four Double Team™ grain sorghum hybrids with sufficient supply to address the potential significant growth in the herbicide trait sector.

Sunflower

The Sunflower Market. Sunflowers have multiple uses including oil, birdseed and human consumption. Our current sunflower seed focus is on hybrids best suited for the oil market. Sunflower oil is light in taste and appearance and supplies more Vitamin E than any other vegetable oil. It is a combination of monounsaturated and polyunsaturated fats with low saturated fat levels. The versatility of this healthy oil is recognized by cooks internationally, valued for its frying performance and health benefits. With multiple types of sunflower oils available, it meets the needs of consumer and food manufacturers alike for a healthy and high performance non-transgenic vegetable oil. Additionally, sunflower is being sought after as a source of non-GMO oils.

The USDA projects global sunflower seed production for 2022/2023 at 50 million metric tons per year. We estimate that global annual sunflower seed sales are approximately $750 million to $1 billion.

S&W’s Sunflower Portfolio. We currently have approximately six high-yield sunflower hybrids in the market. As part of our strategic review of our operations announced in May 2022, during fiscal year 2022 we ceased our sunflower research and development program in Europe and scaled back our program in Australia.

Australian Wheat

The Wheat Market in Australia. Wheat is Australia's largest grain crop. Australia produces around 24.3 million tons of wheat annually, with approximately 70% exported to Southeast Asian countries and the Middle East and North Africa region.

The wheat market in Australia operates under an end point royalty, or EPR, system in which the wheat variety owner earns a fixed royalty on every ton of grain produced. The applicable EPR varies by variety, but typically ranges from $2 to $4 per metric ton. Under EPR systems, variety owners such as us do not produce or hold commercial seed inventories or sell seed. Industry partners increase commercial quantities of planting seed and distribute to growers. Varieties are tracked along the supply chain and, when grain is ultimately delivered to the grain buyer or end user, the EPR is collected and delivered to the variety owner.

We estimate that total end point royalties paid to wheat variety owners in Australia are approximately $70 million per year.

S&W’s Wheat Portfolio. In 2019, under an exclusive, prepaid license from Corteva Agriscience, S&W acquired rights to a group of commercialized and development wheat varieties which are the result of an estimated $17 million development program investment. We currently have six wheat varieties commercially available in the Australian market. Our breeding program is focused on new dual purpose varieties which we believe have the potential to offer a number of benefits to Australian wheat growers as compared to existing commercial varieties, including forage potential, superior disease resistance, superior yields and grain quality to suit the diverse Australian conditions.

6

In May 2022, we entered into preliminary, nonbinding discussions with Trigall Genetics, a leader in transgenic wheat, to potentially combine our wheat operations through the creation of a joint venture in Australia. While we believe this joint venture could be beneficial in a number of respects, there can be no assurance that these preliminary, nonbinding discussions will result in a consummated transaction.

Pasture Seeds

The Pasture Seed Market in Australia. In addition to alfalfa, the pasture seed market in Australia includes medic, clovers, vetch, forage cereals, and certain grasses. Key customers include beef cattle, sheep and dairy farmers, silage, hay and chaff producers. We estimate that annual pasture seed sales in Australia are approximately $100 million.

S&W’s Pasture Seed Portfolio. After our February 2020 acquisition of Pasture Genetics, we currently offer over 300 pasture seed products in the Australian market.  

Stevia

Stevia and the Sweetener Industry. Stevia leaf and its refined products are a natural, non-caloric high intensity sweetener. The incorporation of stevia-derived extracts into foods and beverages in the U.S. has seen a rapid increase since the beginning of 2009, when stevia was first introduced as a sweetener alternative to sugar and approved by the FDA as generally recognized as safe. In the U.S., approximately 70% of all new products formulated with stevia are beverages, with the remainder split between diverse categories, including dairy products and baked goods. Currently, the majority of global commercial stevia production occurs in Asia (particularly, in China), as current varieties lack adaptive characteristics that would permit farmers to profitably grow them in other global agricultural regions.

We estimate the annual market value of stevia as an additive to foods and beverages to be $565 million.

S&W’s Stevia Program. Since 2009, our stevia research and development program has focused on developing stevia into a U.S.-grown crop. Our program has generated four patented varieties, and we are working closely with potential supply chain collaborators and customers to develop more advanced varieties that can both meet taste requirements of consumers and have field performance that would enable farmers to profitably grow stevia in the United States. In early 2019, we opened a dedicated stevia field breeding station in Tifton, GA to further support the breeding effort and select new varieties adapted to the Southeast growing regions targeted for initial cultivation of stevia in the United States.

In September 2021, we entered into a Pilot Program Supply Agreement with Ingredion Incorporated to develop a U.S.-based production and supply chain for stevia leaf using S&W’s propriety stevia genetics. The first plantings in the southeastern United States to support that agreement began in October 2021 and will continue to expand over the next several years. Additionally, we house and maintain under a services agreement the stevia genetics program of Heartland Food Products Group at our field breeding station in Tifton, Georgia.

Camelina

The Camelina Market in the U.S. Camelina is a short-season crop that can be produced during fallow periods in many row crop rotations. It is a feed stock that can be used to generate biofuel and biodegradable bioplastic, with its oil having one of the lowest carbon intensity scores of diesel feedstock crop alternatives.

S&W’s Camelina Program. We expect to plant 300 acres of camelina in calendar year 2022 for seed harvest in 2023. It is our goal to enter the camelina market as a seed and technology provider; the industry has seen multiple transactions that we believe provide a potential future roadmap for S&W.

7

Product Development

We believe a successful seed business in the modern era should deliver a combination of two types of products: (i) traditional products of high quality seed with genetics for high yield and end-use quality, appropriate disease and insect tolerance, and other agronomic characteristics; and (ii) differentiated products with high value proprietary traits that offer unique value for farmers or consumers and thus capture both market share and higher prices.

We develop the first product type, which is based on good agronomic performance, in our breeding programs at multiple locations in the United States and Australia and through collaborations in South America and Europe. These programs utilize state of the art equipment and experimental design and data analysis for field evaluation and track important agronomic traits using molecular genetic markers. Developing improved genetics for agronomic performance can take 5 to 15 years, depending on the species and specific genetic improvement targets. By maintaining a full R&D pipeline of genotypes in all stages of development, we believe we can deliver new varieties each year with incremental improvements over previous varieties.

We develop the second product type, which emphasizes valuable and unique traits, both in-house and through exclusive collaborations. The recently launched Double Team™ product was developed entirely in-house through our DNA and Tissue Culture Lab in Texas. We also developed an improved forage quality alfalfa product through our exclusive arrangement with Calyxt. Our dhurrin-free trait, expected to launch in fiscal 2023 was developed through an exclusive arrangement with The Agricultural Alumni Seed Improvement Association, Inc., an affiliate of Purdue University in West Lafayette, Indiana. Our lab and technology personnel are focused on maintaining a continuous pipeline of traits that can be used to build value and market share in both company and private label brands and through out-licensing to other seed companies on a royalty basis. For example, we completed our first out-license of Double Team™ technology to in June 2022.

Sales, Marketing and Distribution

We currently sell over 500 seed products in more than 40 countries. Our principal markets for alfalfa sales are the United States, Canada, Mexico, South America, the Middle East, North Africa, and Australia. Our sorghum sales are focused in the United States, Mexico, Australia, Europe and South Africa. Our sunflower sales are primarily in Europe, Asia and Australia. Our wheat and pasture seed sales are focused in Australia.

Our organization is structured across geographic lines, as opposed to product lines, which we believe allows us to make the best use of distribution assets (like our U.S. dealer and distributor network and our Australian sales force) and unlock potential sales synergies through international cross-selling of products.

Today we primarily sell our seed products under the S&W brand or other brands we own, such as Alfalfa Partners ™ and Sorghum Partners®. Private-label and licensing is an important part of our distribution strategy going forward.

Our customers are primarily distributors and dealers. Our distributors and dealers, in turn, sell to farmers. We believe that selling through dealers and distributors enables our products to reach growers in areas where there are geographic or other constraints on direct sales efforts. We select dealers and distributors based on shared vision, technical expertise, local market knowledge and financial stability. Over the years, we have built dealer/distributor loyalty through an emphasis on service, access to breeders, ongoing training and promotional material support. We limit the number of dealers and distributors with whom we have relationships in any particular area in order to provide adequate support and opportunity to those with whom we choose to do business.

Both farmers and dealers use pest-control advisors who recommend the varieties or hybrids that will produce the best results in a particular location. Therefore, a key part of our marketing strategy is to educate the consultants, as well as the farmers, as to benefits of our seed varieties and hybrids.

8

We believe that our best marketing tool is the dissemination of information regarding the quality and characteristics of our propriety seed products to those persons who make the growing decisions. We continue to place advertisements in trade journals, agriculture publications, social media and participate in seed industry conferences and trade shows and engage in various other educational and outreach programs as we deem appropriate.

Our sales efforts have historically involved significant in-person interaction with potential customers and distributors. In March 2020, at the beginning of what is typically our most active selling period, many national, state and local governments in our target markets implemented various stay-at-home, shelter-in-place and other quarantine measures in response to the COVID-19 pandemic. As a result, we immediately attempted to shift our sales activities to video conferencing and similar customer interaction models but found these alternative approaches to generally be less effective than in-person sales efforts, and we believe this has contributed to decreased sales and a negative impact on our business and financial results in prior periods. We have since resumed in-person marketing but may be unable to achieve the quality of interactions prior to the start of the pandemic due to the ongoing nature of the pandemic and adjustments in customer and distributor interactions.

Seed Production

We produce seed in the United States, Canada, Australia and South Africa under contract with select third-party contract growers. We currently maintain approximately 200 grower relationships. Our network of growers has the expertise needed to successfully grow high quality seed products. We have worked with many of the same growers on a long-term basis, and we believe that we have strong relationships with them. We allocate our seed production among our growers so that we can purchase the proper mix of seed each year. Our contracts with growers have terms ranging from one to seven years, depending on the crop and the production area. Our global, but localized, production capabilities allow us to produce close to the customer to ensure the seed product is developed specifically for the conditions and requirements of that region and is produced at the lowest cost.

We condition and package seed primarily in our own facilities located in Idaho, Texas and Australia; although in some markets (for example, California) we use third-party processing services. We believe that direct ownership of production facility assets gives us more flexibility to respond to demand changes unique to each geography, greater control over product quality and a lower cost structure.  

Seasonality

We contract with growers based upon our anticipated market demand. We mill, clean and stock the seed during the harvest season and ship from inventory throughout the year. However, our seed business is seasonal. In the Northern hemisphere, production and harvest occurs from March through September and processing and shipping finished goods primarily occurs from October through May. In the Southern hemisphere, production and harvest occurs from October through March and processing and shipping primarily occurs from March through August.

Proprietary Rights

Ownership of and access to intellectual property rights are important to us. We sell proprietary seed varieties and hybrids that have been specially selected to manifest the traits we deem best suited to particular regions in which our seed is planted. Our ability to compete effectively is dependent upon the proprietary nature of the seeds, seedlings, processes, technologies and materials owned by or used by us or our growers. Our competitive position would be adversely affected if any competitors independently were to develop any technologies that substantially equal or surpass our own.

In some cases, we obtain patent protection or plant breeder rights registrations for certain of our seed products.   However, our principal method of guarding our proprietary varieties and hybrids is exercising a high degree of control over the supply chain. As part of this control process, we require our growers to deliver back to us all seed derived from our proprietary varieties and, in the case, of hybrids, limit supply of parent seed that enables hybrid production. Historically, we have found that these control mechanisms have been an effective means to protect our proprietary seed. However, because we often do not have more formal proprietary rights protections, it would be possible for persons with access to our seed or plants grown from our seed to reproduce proprietary seed, which could significantly harm our business and our reputation.

9

Competition

Competition in the seed industry both domestically and internationally is intense, and we believe it is intensifying with industry consolidation. We believe that the key competitive drivers in the industry are proven performance, customer support in the field and value, which takes into account not simply the price of the seed but also performance in the field.

We face direct competition by other seed companies, including multinational agriculture companies, regional seed companies and small family-owned businesses, as well as subsidiaries or other affiliates of chemical, pharmaceutical and biotechnology companies. Our principal competitors include:

• Alfalfa. In the U.S. market, our principal competitors in our alfalfa seed business are Forage Genetics International (a subsidiary of Land O’ Lakes, Inc.), Pioneer and Alforex Seeds (subsidiaries of Corteva), and Pacific International Seed Company, Inc. In the Australian market, competitors in the proprietary alfalfa seed market include the Barenbrug Group and DLF Australia. In Australia, we also face competition from smaller companies offering non-proprietary seed.  

• Sorghum. Our principal competitors in sorghum are Pioneer, DeKalb (a subsidiary of Bayer), Pacific Seeds (a division of Advanta), and Nuseed.

• Sunflower. Our principal competitors in sunflower are Pioneer, Nuseed, Dyna-Gro Seed (a subsidiary of Nutrien Ag Solutions), Syngenta AG, Advanta and Limagrain.

• Australian Wheat. Our principal competitors in the Australian wheat market are AGT, LongReach Plant Breeders Pty Ltd., and InterGrain.

• Pasture Seed. Our principal competitors in the Australian pasture seed market are the Barenbrug Group, DLF Australia and Seedforce, a subsidiary of RAGT.

Many of our existing and potential competitors have substantially greater research and product development capabilities and financial, marketing and human resources than we do. As a result, these competitors may:

• succeed in developing products that are equal to or superior to our products or potential products or that achieve greater market acceptance than our products or potential products;

• devote greater resources to developing, marketing or selling their products;

• respond more quickly to new or emerging technologies or scientific advances and changes in customer requirements, which could render our products or potential products obsolete or less preferable;

• obtain patents that block or otherwise inhibit our ability to develop and commercialize potential products we might otherwise develop;

• withstand price competition more successfully than we can;

• establish cooperative relationships among themselves or with third parties that enhance their ability to address the needs of our customers or prospective customers; and

• take advantage of acquisition or other opportunities more readily than we can.

Environmental and Regulatory Matters

Our agricultural operations are subject to a broad range of evolving environmental laws and regulations applicable to the markets in which we operate. These environmental laws and regulations are intended to address concerns related to air quality, storm water discharge and management and disposal of agricultural chemicals relating to seed treatment.

Compliance with these laws and related regulations is an ongoing process that does not, and is not expected to, have a material effect on our capital expenditures, earnings or competitive position. Environmental concerns are, however, inherent in most major agricultural operations, including those conducted by us, and there can be no assurance that the cost of compliance with environmental laws and regulations will not be material. Moreover, it is possible that future developments, such as increasingly strict environmental laws and enforcement policies thereunder, and further restrictions on the use of agricultural chemicals, could result in increased compliance costs.

10

We also are subject to various laws and regulations relating to the transport, export/import and sale of seed applicable in the markets in which operate.  

Internationally, we are subject to various government laws and regulations (including the U.S. Foreign Corrupt Practices Act and similar non-U.S. laws and regulations) and local government regulations. To help ensure compliance with these laws and regulations, we have adopted specific risk management and compliance practices and policies, including a specific policy addressing the U.S. Foreign Corrupt Practices Act.

Research and Development

Research & Development expenses for the year ended June 30, 2022 totaled $7.7 million compared to $8.5 million in the year ended June 30, 2021.

Employees

As of September 21, 2022, we had 180 total employees, of which 148 were full-time employees. We also retain consultants for specific purposes when the need arises. None of our employees are represented by a labor union.

Corporate History

From 1980 until 2009, our business was operated as a general partnership. In October 2009 we incorporated in Delaware, and in December 2011 we reincorporated in Nevada.

Contact Information

Our principal business office is located at 2101 Ken Pratt Blvd., Suite 201, Longmont, Colorado 80501, and our telephone number is (720) 506-9191. Our website address is www.swseedco.com. Information contained on our website or any other website does not constitute part of this Annual Report on Form 10-K, and the inclusion of our website address in this report is an inactive textual reference only.

11

Item 1A. Risk Factors

Risks Relating to Our Business and Industry

The effects of health crises, including the COVID-19 pandemic, have had and may continue to have an adverse impact on our business, operations and the markets and communities in which we, our partners and customers operate.

As a result of the COVID-19 pandemic, we have and may in the future experience disruptions that have adversely impacted our business, including:

• We rely on third-party dealers, distributors and sales agents as our primary customers and distribution channels. These dealers, distributors and sales agents are often small businesses or sole proprietorships. Any restriction of, or disruption in, their ability to operate would adversely impact our business.

• Approximately 40% of our sales revenue depends on cross-border export of seed products from our primary production areas in the United States and Australia. We have experienced significant disruption in cross-border shipments due to reduced capacity of the global shipping network and quarantine measures.

• Approximately 60% of our sales revenue is from dealers and distributors in the United States and Australia. Disruption in shipments resulting from reduced capacity of the trucking and logistics network and quarantine measures have negatively impacted our business.

• Our product revenue is predicated on our ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in our distribution and supply channels. Any actual or perceived disruption in the distribution channel could alter customer buying decisions, prompting customers to delay or decrease their orders, which would negatively impact our sales revenue and could harm our reputation.

• A significant portion of our sales are made in markets in which sales are otherwise sensitive to changes in local currency to US Dollar exchange rates. During the COVID-19 pandemic, we have experienced increased foreign exchange rate volatility and currency devaluation in some of our markets outside the United States. Such volatility and disruption have impacted our customers and their ability to make timely payment on previously fulfilled orders. Any such effects on our customers’ ability to pay would negatively impact our business and financial results.

• Our sales cycle is highly seasonal, and the majority of our sales season activities for the United States and Australia are typically concentrated between March and June of each calendar year. Our sales efforts have historically involved significant in-person interaction with potential customers and distributors. Throughout the COVID-19 pandemic, in part in response to the many stay-at-home, shelter-in-place and other quarantine measures implemented by national, state and local governments in our target markets, we shifted our sales activities to video conferencing and similar customer interaction models. We found these alternative approaches to generally be less effective than in-person sales efforts, we believe this has contributed to decreased sales and a negative impact on our business and financial results in prior periods. We have since resumed in-person marketing but may be unable to achieve the quality of interactions prior to the start of the pandemic due to the ongoing nature of the pandemic and adjustments in customer and distributor interactions.

• We clean, process and package our seed products in multiple facilities in the United States and Australia. Any outbreak of COVID-19 at one of our facilities could require us to close the facility until the outbreak is resolved. Any such closure could have a negative impact on our ability to meet customer orders.

• We offer our customers payment terms generally less than one year from invoicing in alignment with the growing season.  As a result of the current economic downturn associated with the COVID-19 pandemic, our customers may be unable to repay their obligations to us when due, which could adversely affect our results and financial condition.

12

• We have historically relied upon occasional sales of our debt and equity securities and borrowing under credit facilities from financial institutions, both in the United States and South Australia, to fund our operations. The adverse effects on our business and financial condition due to the COVID-19 pandemic have negatively impacted our financing terms and our stock price.  This, in turn, has negatively affected our ability to raise capital on terms acceptable to us, and therefore our liquidity. Negative impacts on our liquidity can restrict our ability to pay our obligations as they come due, including under our contracts with our growers. If we are unable to pay our growers in compliance with our contractual arrangements, we could suffer reputational harm, impaired relationships with our growers and a lack of future supply of our product. In addition, our failure to pay our growers, including as a result of our growers taking adverse action against us, could result in an event of default under our loan agreements.

• We are subject to various affirmative and negative covenants in our loan agreements with our lenders. The effects of COVID-19 on our business and financial condition have, in part, caused us to fall out of compliance with our financial covenants under our CIBC Bank USA, or CIBC, facility. As of June 15, 2022, we were out of compliance with a minimum liquidity requirement, which was waived by CIBC in September 2022. As of June 30, 2022 we were out of compliance with the total debt coverage ratio (calculated as the ratio of EBITDA to total debt payments) under our Conterra Agriculture Capital, LLC, or Conterra, loan which was waived by Conterra. In the future, we may fall out of compliance with one or more other covenants. If we are unable to secure a future waiver or negotiate an amendment to such loan agreements on reasonable terms, or at all, an event of default could occur, which would allow our lenders to accelerate our repayment obligations or enforce their other rights under our agreements with them. Any such default may also require us to seek additional or alternative financing, which may not be available on commercially reasonable terms or at all. If we are unable to access funds to repay our lenders, our lenders could take control of our pledged assets. Any of the foregoing events would negatively impact our financial condition and liquidity. We cannot guarantee that we will be able to comply with all of the covenants contained in the CIBC loan agreement in the future, or secure additional waivers if or when required.

• Since early March 2020, we have taken temporary precautionary measures intended to help minimize the risk of COVID-19 to our employees and their families, including temporarily allowing office and sales employees to work remotely. Further measures may be taken as the COVID-19 outbreak continues. The measures taken now or in the future to contain the COVID-19 pandemic could negatively affect our ability to recruit and engage new employees and contractors necessary to the successful operation of our business.

The COVID-19 pandemic continues to rapidly evolve. The extent to which COVID-19 may impact our business will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, stay-at-home or other similar orders and social distancing in the United States, Australia and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States, Australia and other countries to contain and treat the virus.

We need to raise additional capital in the future. If we are unsuccessful in attracting new capital, we may not be able to continue operations or may be forced to sell assets to do so. Alternatively, capital may not be available to us on favorable terms, or if at all. If available, financing terms may lead to significant dilution of our stockholders’ equity.

We are not profitable and have had negative cash flow from operations for the last several years. To help fund our operations, we have in part relied on equity and debt financings. We will need to obtain additional funds to finance our operations in the future, and we could spend our available financial resources much faster than we currently expect. Our loan and security agreement with CIBC, and our secured promissory notes with Conterra, both of which mature on December 23, 2022, contain various operating and financial covenants, and the COVID-19 pandemic and other factors affecting our results of operations have increased the risk of our inability to comply with these covenants, which could result in acceleration of our repayment obligations and foreclosure on our pledged assets. In addition, these loan agreements contain cross-default provisions, such that certain defaults or breaches under any of our loan agreements may entitle CIBC or Conterra to invoke default remedies. We were not in compliance with certain of these covenants as of June 30, 2021, December 31, 2021, and March 31, 2022, and June 30, 2022, and were required to obtain waivers and/or amendments from CIBC and Conterra. As of June 15, 2022 we were not in compliance with a minimum liquidity requirement, which was waived by CIBC. In addition, we were not in

13

compliance with certain covenants under the Conterra note as of June 30, 2022 and we were required to obtain a waiver from Conterra. The CIBC loan agreement as presently in effect requires the Company to maintain minimum liquidity of no less than $1,000,000 at all times. We are actively pursuing refinancing of the CIBC loan facility and the Conterra loan, but we cannot assure you that we will be successful in refinancing our existing debt, raising additional capital, securing future waivers and/or amendments from CIBC, Conterra or our other lenders, renewing or refinancing our existing debt, or securing new financing. If we are unsuccessful in doing so, we may need to reduce the scope of our operations, repay amounts owing to our lenders, finance our cash needs through a combination of equity and debt financings, enter into collaborations, strategic alliances and licensing arrangements, delay payments to our growers, sell certain assets or divest certain operations.

These factors raise substantial doubt regarding our ability to continue as a going concern. If we are required or desire to raise additional capital in the future, whether as a condition to loan refinancing or separately, such additional financing may not be available on favorable terms, or available at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest would be diluted and the terms of these securities could include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may be secured by all or a portion of our assets, and may be on terms less favorable than our existing loans. If we fail to obtain additional capital as and when required, such failure could have a material impact on our business, results of operations and financial condition. If we are required or desire to raise additional capital in the future, such additional financing may not be available on favorable terms, or available at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest could be diluted and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may be secured by all or a portion of our assets. If we fail to obtain additional capital as and when required, such failure could have a material impact on our business, results of operations and financial condition.

In addition, as a result of the COVID-19 pandemic and actions taken to slow its spread, the ongoing military conflict between Russia and Ukraine, and other factors beyond our control, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. It is possible that further deterioration in credit and financial markets and confidence in economic conditions will occur. If equity and credit markets deteriorate, it may affect our ability to raise equity capital, borrow on our existing facilities or make any additional necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. In addition, while we are currently in compliance with our loan agreements, our ability to comply with the terms of our loan agreements has been compromised and could result in an event of default. If an event of default were to occur, our lenders could accelerate our repayment obligations or enforce their other rights under our agreements with them. Any such default may also require us to seek additional or alternative financing, which may not be available on commercially reasonable terms or at all.

Our earnings can be negatively impacted by declining demand brought on by varying factors, many of which are out of our control.

Demand for our seed depends upon a variety of factors, including end demand for the crops grown from the seed.  For example, a severe downturn in the dairy industry could have a negative effect on sales of alfalfa hay, and as a result, the demand for our alfalfa seed in the U.S. market. In addition, demand for our products could decline because of other supply and quality issues or for any other reason, including products of competitors that might be considered superior by end users. A decline in demand for our products could have a material adverse effect on our business, results of operations and financial condition.

Our earnings may also be sensitive to fluctuations in market prices for seed.

Market prices for our seed can be impacted by factors such as the quality of the seed and the available supply, including whether lower-quality, lower-priced seed is available. Growing conditions, particularly weather conditions such as windstorms, floods, droughts and freezes, as well as diseases and pests and the adventitious presence of

14

GMO, are primary factors influencing the quality and quantity of the seed and, therefore, the market price at which we can sell our seed to our customers. A decrease in the prices received for our products could have a material adverse effect on our business, results of operations and financial condition.

Our earnings are vulnerable to cost increases.

Future increase in costs, such as the costs of growing seed and shipping seed, could cause our margins and earnings to decline unless we are able to pass along the increased price of production to our customers. We may not be able to increase the price of our seed sufficiently to maintain our margins and earnings in the future.

Our inventory of seed can be adversely affected by the market price being paid for other crops.

Our seed production relies entirely on unaffiliated growers to grow our proprietary seed and to sell it to us at negotiated prices each year. Growers have a choice of what crops to plant. If a particular crop is paying a materially higher price than has been paid in the past, growers may decide to not grow our seed crops in favor of receiving a higher return from an alternative crop planted on the same acreage. If our growers decline to a significant degree to plant the acreage on which we rely, and if we cannot find other growers to plant the lost acreage, our inventory of seed could be insufficient to satisfy the needs of our customers unless we are able to procure the necessary additional seed in the market at prices we cannot control. If these circumstances occur, our business, results of operations and financial condition could materially decline. In addition, our customers could look to other suppliers for their seed if we cannot satisfy their requirements, and we may not be able to regain them as customers once our inventory levels have returned to normal.

Adverse weather conditions, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.

Our seed crops are vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are common but difficult to predict. In addition, seed crops are vulnerable to crop disease and to pests, which may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied and climatic conditions. The weather also can affect the quality, volume and cost of seed produced for sale as well as demand and product mix. Seed yields can be higher or lower than planned, which could lead to higher inventory and related write-offs. In addition, climate change may increase the frequency or intensity of extreme weather such as storms, floods, heat waves, droughts and other events that could affect the quality, volume and cost of seed produced for sale as well as demand and product mix. Climate change may also affect the availability and suitability of arable land and contribute to unpredictable shifts in the average growing season and types of crops produced. Unfavorable growing conditions can reduce both crop size and quality. Although we no longer grow any of our seed directly, these factors can still impact us by potentially decreasing the quality and yields of our seed and reducing our available inventory. These factors can increase costs, decrease revenue and lead to additional charges to earnings, which may have a material adverse effect on our business, results of operations and financial condition.

Because our seed business is highly seasonal, our revenue, cash flows from operations and operating results may fluctuate on a seasonal and quarterly basis.

Our seed business is seasonal. The seasonal nature of our operations results in significant fluctuations in our working capital during the growing and selling cycles. We have experienced, and expect to continue to experience, significant variability in net sales, operating cash flows and net income (loss) on a quarterly basis.

We have had a material concentration of revenue from a small group of customers that fluctuates, and the loss of any of these customers in any quarter could have a material adverse effect on our revenue.

On a historical basis, we have experienced a material concentration of revenue from a small group of customers. This concentration fluctuates from quarter to quarter, depending on our customer's specific requirements, which are themselves cyclical. However, in any particular quarter, we generally have a small group of customers that accounts

15

for a substantial portion of that quarter’s revenue. Most of these customers are not contractually obligated to purchase seed from us. The loss of one or more of these customers on a quarterly basis, when taken year over year, could have a material adverse impact on our business, financial position, results of operations and operating cash flows. We could also suffer a material adverse effect from any losses arising from a major customer's disputes regarding shipments, product quality or related matters, or from our inability to collect accounts receivable from any major customer. There are no assurances that we will be able to maintain our current customer relationships or that they will continue to purchase our seed in the current projected quantities. Any failure to do so may materially adversely impact our business.

Because we depend on a core group of significant customers, our sales, cash flows from operations and results of operations may be negatively affected if our key customers reduce the amount of products they purchase from us.

Although our customer concentration should decline as our product mix becomes more diverse, there is no assurance that we will be able to maintain the relationships with our major customers or that they will continue to purchase our seed in the quantities that we expect and rely upon. If we cannot do so, our results of operations could suffer.

Because we do not grow the seed that we sell, we are completely dependent on our network of contract growers, and our sales, cash flows from operations and results of operations may be negatively affected if we are unable to maintain an adequate network of contract growers to supply our seed requirements.

We do not directly grow any of the seed that we sell, and therefore, we are entirely dependent upon our network of growers. While we have some supply contracts with our growers of up to seven years in duration, many of our grower contracts cover only one year, which makes us particularly vulnerable to factors beyond our control. Events such as a shift in pricing caused by an increase in the value of commodity crops other than seed crops, increase in land prices, unexpected competition or reduced water availability could disrupt our supply chain. Any of these disruptions could limit the supply of seed that we obtain in any given year, adversely affecting supply and thereby lowering revenue. Such disruption could also damage our customer relationships and loyalty to us if we cannot supply the quantity of seed expected by them. In addition, if we are unable to maintain sufficient liquidity to pay our growers as payments come due, this could also damage our relationships with our growers and industry reputation, which could reduce the number of growers willing to contract with us, which could further harm our ability to supply the quantity of seed necessary to meet customer demand.

Our ability to contract for sufficient acreage presents challenges.

In order to increase revenue and earnings, we continue to need more production acreage. As we continue to increase the number of acres under contract and/or to move production into new geographical locations, we face challenges that can impede our ability to produce as much seed inventory as we have budgeted. For example, when we move production into new geographical locations, we may find it difficult to identify growers with the expertise to grow our seed crops, and we may not have sufficient company personnel available in such new locations to provide production advice on a timely basis. We also face increased competition for conventional seed acreage as the need for technology acres grows, which is further complicated by the field isolation issue relating to GMO crops that can reduce the amount of acreage available for conventional alfalfa seed crops. If we are unable to secure the acreage we need to meet our planned production for the crop year and are unable to purchase seed in the market, our results of operations could suffer, as would our reputation.

A lack of availability of water in any of our production areas could impact our business.

Adequate quantities and correct timing of the application of water are vital for most agriculture to thrive. Whether particular farms are experiencing water shortages depends, in large part, on their location. However, continuing drought conditions can threaten all farmland other than those properties with their own water sources. Foreign or domestic regulations regarding water usage and rights may also limit the availability of water. Although our current seed products are not water-intensive crops, the availability or the cost of water is a factor in the planting of the crops grown from our seed. Moreover, if the farmers and others who purchase our seed to grow crops cannot get an adequate supply of water, or if the cost of water makes it uneconomical for the farmers to grow the crops, we may not be able to sell our seed, which could have an adverse impact on our results of operations.

16

We face intense competition, and our inability to compete effectively for any reason could adversely affect our business.

Competition in the seed industry both domestically and internationally is intense, and we believe it is intensifying with industry consolidation. We face direct competition from other seed companies, including multinational agriculture companies, regional seed companies and small family-owned businesses, as well as subsidiaries or other affiliates of chemical, pharmaceutical and biotechnology companies, many of which have substantially greater resources than we do.

These resources give our competitors greater operating flexibility that, in certain cases, may permit them to respond better or more quickly to changes in the industry or to introduce new products more quickly and with greater marketing support. Increased competition could result in lower profit margins, substantial pricing pressure, reduced market share and lower operating cash flows. Price competition, together with other forms of competition, could have a material adverse effect on our business, financial position, results of operations and operating cash flows.

If we are unable to estimate our customers’ future needs accurately and to match our production to the demand of our customers, our business, financial condition and results of operations may be adversely affected.

We sell our seed primarily to dealers and distributors who, in turn, sell primarily to farmers who grow crops from the seed. Due to the nature of the seed industry, we normally produce seed according to our production plan before we sell and deliver seed to distributors and dealers. Our dealers and distributors generally make purchasing decisions for our products based on market prices, economic and weather conditions and other factors that we and our dealers and distributors may not be able to anticipate accurately in advance. If we fail to accurately estimate the volume and types of products sought by the end users and otherwise adequately manage production amounts, we may produce more seed than our dealers and distributors want, resulting in excess inventory levels. It may be difficult for us to dispose of all of our inventory on commercially reasonable terms, or at all. Also, retention of excess inventory over extended periods of time increases the risk that certain inventory lots may deteriorate in quality and germination rates. If we determine that the value of our inventories exceeds the market value of product that we reasonably believe we can sell, we may need to record an impairment charge for a portion of our inventory in one or more fiscal periods.  For example, our cost of revenue for the years ended June 30, 2022 and 2021 included inventory write-downs of $6.4 million and $1.4 million, respectively, related to certain inventory lots that deteriorated or were expected to deteriorate in quality and germination rates. Any such impairment charge or any failure to sell inventory on commercially reasonable terms could have a material adverse effect on our business, financial position, results of operations and operating cash flows.

On the other hand, if we underestimate demand, we may not be able to satisfy our dealers and distributors' demand for seed, and thus damage our customer relations and end-user loyalty. Our failure to estimate end users’ future needs and to match our production to the demand of our customers may adversely affect our business, financial condition and results of operations.

Our third-party distributors may not effectively distribute our products.

We depend in part on third-party distributors and strategic relationships for the marketing and selling of our products. We depend on these distributors’ efforts to market our products, yet we are unable to control their efforts completely. In addition, we are unable to ensure that our distributors comply with all applicable laws regarding the sale of our products, including the United States Foreign Corrupt Practices Act of 1977, as amended. If our distributors fail to effectively market and sell our products, and in full compliance with applicable laws, our operating results and business may suffer.

We extend credit to our international customers, which exposes us to the difficulties of collecting our receivables in foreign jurisdictions if those customers fail to pay us.

Although our payment terms for export seed sales often are prepaid, documentary collections or secured by a letter of credit, we do extend credit of up to 180 days to some of our international customers. Sales of our seed to international customers represented a material portion of our revenue in historical periods and we expect that we will continue to extend credit in connection with future sales. Because these customers are located in foreign countries, collection efforts, were they to become necessary, could be much more difficult and expensive than pursuing similar claims in the United States. Moreover, future political and/or economic factors, as well as future unanticipated trade

17

regulations, could negatively impact our ability to timely collect outstanding receivables from these important customers. The extension of credit to our international customers exposes us to the risk that our seed will be delivered but that we may not receive all or a portion of the payment therefor. If these customers are unable or unwilling to fully pay for the seed they purchase on credit, our results of operations and financial condition could be materially negatively impacted. Moreover, our internal forecasts on which we make business decisions throughout the year could be severely compromised, which could, in turn, mean that we spend capital for operations, investment or otherwise that we would not have spent had we been aware that the customer would not honor its credit extension obligation.

Our current reliance on the seed development and production business does not permit us to spread our business risks among different business segments, and thus a disruption in our seed production or the industry would harm us more immediately and directly than if we were more diversified.

We currently operate primarily in the agricultural seed business, and we do not expect this to change materially in the foreseeable future. Without business line diversity, we will not be able to spread the risk of our operations. Therefore, our business opportunities, revenue and income could be more immediately and directly affected by disruptions from such things as drought and disease or widespread problems affecting the alfalfa, sorghum, sunflower and pasture seed markets, payment disruptions and customer rejection of our seed. If there is a disruption as described above, our revenue and earnings could be reduced, and our business operations might have to be scaled back.

If we fail to introduce and commercialize new seed products, we may not be able to maintain market share, and our future sales may be harmed.

The performance of our new seed products may not meet our customers’ expectations, or we may not be able to introduce and commercialize specific seed varieties and hybrids. Reorder rates are uncertain due to several factors, many of which are beyond our control. These include changing customer preferences, which could be further complicated by competitive price pressures, our failure to develop new products to meet the evolving demands of the end users, the development of higher-demand products by our competitors and general economic conditions. The process for new products to gain market recognition and acceptance is long and has uncertainties. If we fail to introduce and commercialize a new seed product that meets the demand of the end user, if our competitors develop products that are favored by the end users, or if we are unable to produce our existing products in sufficient quantities, our growth prospects may be materially and adversely affected, and our revenue may decline. In addition, sales of our new products could replace sales of some of our current similar products, offsetting the benefit of a successful product introduction.

The presence of GMO alfalfa in Australia or California could impact our sales.

GMO crops currently are prohibited in most of the international markets in which our proprietary seed is currently sold. There are regions in the United States, including the Pacific Northwest, where even small quantities of GMO material inadvertently interspersed with conventional (non-GMO) alfalfa seed make the seed undesirable, which causes customers to look elsewhere for their alfalfa seed requirements. The greater the use of GMO seed in California and other alfalfa seed growing regions, the greater the risk that the adventitious presence of GMO material in our seed production will occur due to pollination from hay fields or other seed fields. We regularly test for the adventitious presence of GMO in our conventional alfalfa seed, and we have seen a slight increase in the percentage of GMO presence in conventional alfalfa seed over the past several years. Our seed containing GMO material can only be sold domestically or in other jurisdictions that permit the importation of GMO alfalfa. If we are unable to isolate our conventional alfalfa seed from inadvertently being contaminated by GMO seed, we may find it more difficult to sell that seed in our key markets and we may have insufficient quantities of seed to sell internationally, either of which could materially adversely impact our revenue over time.

The stevia market may not develop as we anticipate, and therefore our continued research and development activities with respect to stevia may never become profitable to us.

There are a number of challenges to market acceptance of stevia as a natural, non-caloric sweetener. Stevia has its own unique flavor, which can affect the taste of some foods and beverages. A common complaint about stevia is that some of its extracts and derivatives have a bitter aftertaste, and its taste does not uniformly correspond to all regional

18

taste preferences or combine well with some food flavors. Other factors that could impact market acceptance include the price structure compared to other sugar substitutes and availability. If the high-intensity, non-caloric sweetener market declines or if stevia fails to achieve substantially greater market acceptance than it currently enjoys, we might never be able to profit from our continued research and development activities relating to stevia or any commercial applications that we derive therefrom. Even if products conform to applicable safety and quality standards, sales could be adversely affected if consumers in target markets lose confidence in the safety, efficacy and quality of stevia. Adverse publicity about stevia or stevia-based products may discourage consumers from buying products that contain stevia. Any of these developments could adversely impact the future amount of dry leaf stevia, processed stevia leaves or extract we are able to sell, which could adversely impact our results of operations.

The loss of key employees or the failure to attract qualified personnel could have a material adverse effect on our ability to run our business.

The loss of any of our current executives, key employees or key advisors, or the failure to attract, integrate, motivate and retain additional key employees, could have a material adverse effect on our business. Although we have employment agreements with our executive officers, as well as certain other employees, all of our employees are employed “at-will” and could leave our employ at any time. We do not carry “key person” insurance on the lives of any of our management team. As we develop additional capabilities, we may require more skilled personnel who must be highly skilled and have a sound understanding of our industry, business or processing requirements. Recruiting skilled personnel is highly competitive. Although to date we have been successful in recruiting and retaining qualified personnel, there can be no assurance that we will continue to attract and retain the personnel needed for our business. The failure to attract or retain qualified personnel could have a material adverse effect on our business.

We may not be able to manage expansion of our operations effectively.

We expect our operations to continue to grow in the future, both as we expand our historical alfalfa seed business both domestically and internationally through internal growth and synergistic acquisitions and increase our growers’ production. These efforts will require the addition of employees, expansion of facilities and greater oversight, perhaps in diverse locations. If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities, execute on our business strategies or respond to competitive pressures, and we may have difficulties maintaining and updating the internal procedures and the controls necessary to meet the planned expansion of our overall business.

Our management will also be required to maintain and expand our relationships with customers, suppliers and other third parties as well as attract new customers and suppliers. We expect that our sales and marketing costs will increase as we grow our product lines and as we increase our sales efforts in new and existing markets. Our current and planned operations, personnel, systems and internal procedures and controls may not be adequate to support our future growth.

We may be unable to successfully integrate the businesses we have recently acquired and may acquire in the future with our current management and structure.

As part of our growth strategy, we have acquired and may continue to acquire additional businesses, product lines or other assets. We may not be able to locate or make suitable acquisitions on acceptable terms, and future acquisitions may not be effectively and profitably integrated into our business. Our failure to successfully complete the integration of the businesses we acquire could have an adverse effect on our prospects, business activities, cash flow, financial condition, results of operations and stock price. Integration challenges may include the following:

• assimilating the acquired operations, products and personnel with our existing operations, products and personnel;

• estimating the capital, personnel and equipment required for the acquired businesses based on the historical experience of management with the businesses with which they are familiar;

• minimizing potential adverse effects on existing business relationships with other suppliers and customers;

19

• developing and marketing the new products and services;

• entering markets in which we have limited or no prior experience; and

• coordinating our efforts throughout various distant localities and time zones.

In connection with any such transactions, we may also issue equity securities, incur additional debt, assume contractual obligations or liabilities or expend significant cash.  Such transactions could harm our operating results and cash position and negatively affect the price of our stock.

In addition, there can be no assurance that we will achieve the revenues, growth prospects and synergies expected from our prior acquisitions or any future acquisitions, or that we will achieve such revenue, growth prospects and synergies in a manner consistent with our expectations. For example, Pasture Genetics has not met certain earnings thresholds and therefore we are not obligated to pay the $5.4 million earn-out otherwise payable on September 30, 2022. Our failure to realize the anticipated benefits of our strategic transactions could adversely affect our business, operating results and financial condition.

The diversion of management's attention and costs associated with acquisitions may have a negative impact on our business.

If management’s attention is diverted from the management of our existing businesses as a result of its efforts in evaluating and negotiating new acquisitions and strategic transactions, the prospects, business activities, cash flow, financial condition and results of operations of our existing businesses may suffer. We also may incur unanticipated costs in connection with pursuing acquisitions and strategic transactions, whether they ultimately are consummated or not.

S&W Australia's alfalfa seed grower base is dependent on a limited number of milling facilities to process its seed.

Only five milling facilities are regularly used by S&W Australia’s grower base to clean and process S&W Australia alfalfa seed. Should one or more of these facilities become unusable, there could be a significant effect on S&W Australia’s ability to get its Australian alfalfa seed to market in a timely manner or at all. S&W Australia’s growers use Tatiara Seeds to process approximately 70% of the alfalfa seed grown for S&W Australia.

S&W Australia is thinly capitalized and may become dependent upon us for financing.

Because S&W Australia has relatively little net working capital, it is substantially dependent upon its credit arrangement with National Australia Bank Ltd, or NAB, to purchase its seed inventory. If S&W Australia breaches its credit arrangement in the future or other reasons cause this credit arrangement to become unavailable to S&W Australia, S&W Australia may become reliant on us to finance its operations or for financial guarantees. We currently are a guarantor on S&W Australia's NAB credit facility, and anticipate that we will need to make a capital infusion into S&W Australia in the near future. S&W Australia's financial dependency upon us could have a negative adverse effect upon our financial condition.

20

S&W Australia is dependent on a group of seed growers and a favorable pricing model for alfalfa seed production.

S&W Australia relies on a group of approximately 50 Australian contract growers to produce its proprietary alfalfa seeds. In this system, growers’ contract with S&W Australia to grow S&W Australia’s seed for terms of seven to ten years in the case of alfalfa and two to three years for white clover. S&W Australia uses a staggered payment system with the growers of its alfalfa and white clover; the payment amounts are based upon a Production Fee for compliant seed. The Production Fee is advised each year at the time of crop harvest but no later than May 31 and is based on carryover stock, estimated size of harvest and prevailing and estimated market values. Following the grower’s delivery of uncleaned seed to a milling facility, S&W Australia typically pays 40% of the Production Fee to the grower based on pre-cleaning weight. Following this initial payment, S&W Australia makes two equal progress payments to the total of the Production Fee in September and December and, if applicable, a bonus payment for “first grade” alfalfa seed. The final amount payable to each grower is also subject to adjustment based upon the clean weight of the seed grown. Once the Production Fee has been advised each year S&W Australia is committed to payment amounts and timing exposing it to adverse changes in market values due to price and currency fluctuations.

Changes in government policies and laws could adversely affect international sales and therefore our financial results.

Historically, sales to our distributors who sell our proprietary alfalfa seed varieties outside the United States have constituted a meaningful portion of our annual revenue. We anticipate that sales into international markets will continue to represent a meaningful portion of our total sales and that continued growth and profitability will require further international expansion, particularly in the Middle East and Africa. Our financial results could be affected by changes in trade, monetary and fiscal policies, laws and regulations, or other activities of U.S. and non-U.S. governments, agencies and similar organizations. These conditions include but are not limited to changes in a country’s or region’s economic or political conditions, trade regulations affecting production, pricing and marketing of products, local labor conditions and regulations, reduced protection of intellectual property rights in some countries, changes in the regulatory or legal environment, burdensome taxes and tariffs and other trade barriers. International risks and uncertainties, including changing social and economic conditions as well as terrorism, political hostilities and war, could lead to reduced distribution of our products into international markets and reduced profitability associated with such sales.

21

We are subject to risks associated with doing business globally.

Our operations, both inside and outside the United States, are subject to risks inherent in conducting business globally and under the laws, regulations and customs of various jurisdictions and geographies. Although we sell seed to various regions of the world, a significant percentage of our sales outside the United States in fiscal year 2022 were principally to customers in the Australia and the Middle East. Accordingly, developments in those parts of the world generally have a more significant effect on our operations than developments in other places. Our operations outside the United States are subject to special risks and restrictions, including, without limitation:  fluctuations in currency values and foreign-currency exchange rates; exchange control regulations; changes in local political or economic conditions; governmental pricing directives; import and trade restrictions; import or export licensing requirements and trade policy; restrictions on the ability to repatriate funds; and other potentially detrimental domestic and foreign governmental practices or policies affecting U.S. companies doing business abroad, including the U.S. Foreign Corrupt Practices Act and the trade sanctions laws and regulations administered by the U.S. Department of the Treasury's Office of Foreign Assets Control. Acts of terror or war may impair our ability to operate in particular countries or regions and may impede the flow of goods and services between countries. Customers in weakened economies may be unable to purchase our products, or it could become more expensive for them to purchase imported products in their local currency, or sell their commodity at prevailing international prices, and we may be unable to collect receivables from such customers. Further, changes in exchange rates may affect our net earnings, the book value of our assets outside the United States and our stockholders’ equity. Failure to comply with the laws and regulations that affect our global operations could have an adverse effect on our business, financial condition or results of operations.

Failure to comply with the United States Foreign Corrupt Practices Act or similar laws could subject us to penalties and other adverse consequences.

We are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies, including their suppliers, distributors and other commercial partners, from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices occur from time-to-time in the countries in which we distribute products. We have adopted formal policies and procedures designed to facilitate compliance with these laws. If our employees or other agents, including our distributors or suppliers, are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

Environmental regulation affecting our seed products could negatively impact our business.

Our agricultural operations are subject to a broad range of evolving environmental laws and regulations applicable to the markets in which we operate. These environmental laws and regulations are intended to address concerns related to, among other things, air quality, storm water discharge and management and disposal of agricultural chemicals relating to seed treatment.

In the U.S., we are subject to evolving environmental laws and regulations by federal and state governments. Federal laws and regulations include the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide and Rodenticide Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Federal Seed Act, and potentially regulations of the FDA and/or other State regulatory agencies.

Our Australian operations are also subject to a number of environmental laws, regulations and policies, including in particular the Environment Protection Act 1993 (SA), the Agricultural and Veterinary Products (Control of Use) Act 2002 (SA), the Genetically Modified Crops Management Act 2004 (SA), the Dangerous Substances Act 1979 (SA), the Controlled Substances Act 1984 (SA) and related regulations and policies.

Our failure to comply with these laws and related regulations could have an adverse effect on our business, financial condition or results of operations. Moreover, it is possible that future developments, such as increasingly strict environmental laws and enforcement policies thereunder, and further restrictions on the use of agricultural chemicals, could result in increased compliance costs which, in turn, could have a material adverse effect on our business, financial condition or results of operations.

22

If we are unable to obtain government approvals for certain of our products, we may be unable to commercialize those products in certain markets.

Our ability to launch and commercialize certain new products is subject to regulatory approval, which can be lengthy, costly, complex and in some markets unpredictable. Seed products incorporating biotechnology derived traits and crop protection products must be extensively tested for safety, efficacy, and environmental impact before they can be registered for production, use, sale or commercialization in a given market. Obtaining and maintaining regulatory approvals requires submitting a significant amount of information and data, which may require participation from technology providers. If we are unable to receive the necessary approvals, we will be unable to produce and sell certain of our current and future products, which may have a material adverse effect on our business, financial condition and results of operations.

Unauthorized access to our information technology systems, infrastructure and data could have a material adverse effect on our business, financial condition or results of operations.

We are dependent upon our own and third-party information technology systems, infrastructure and data, including mobile technologies, to operate our business. The multitude and complexity of our computer systems may make them vulnerable to service interruption or destruction, disruption of data integrity, malicious intrusion, or random attacks. Likewise, data privacy or security incidents or breaches by employees or others may pose a risk that sensitive data, including our intellectual property, trade secrets or personal information of our employees, customers or other business partners may be exposed to unauthorized persons or to the public. Our business partners face similar risks, and any security breach of their systems could adversely affect our security posture.

In addition, cyber-attacks are increasing in their frequency, sophistication and intensity. Cyber-attacks could include the deployment of harmful malware, denial-of-service, social engineering and other means to affect service reliability and threaten data confidentiality, integrity and availability. Moreover, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information, trade secrets or other intellectual property. 

A security breach, including, for example, a misappropriation of customer, distributor or employee confidential information, trade secrets or intellectual property, could disrupt our business and result in increased costs or loss of revenue, which may include potential costs of investigations, legal, forensic and consulting fees and expenses, costs and diversion of management’s attention required for investigation, remediation and litigation, substantial repair or replacement costs. In addition, any disruption in our information technology systems, loss of data or other disruptions could impair our ability to manage inventories, process transactions and communicate with our customers, which could prevent us from being able to fulfill orders, result in cancelations and loss of customers, cause us reputational harm and generally disrupt our ability to conduct our business, any of which could have a material adverse effect on our business, financial condition or results of operations.

While we have implemented measures for the protection of our data and information technology infrastructure, there can be no assurance that our efforts will prevent service interruptions, or identify breaches in our systems, that could adversely affect our business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal, business or reputational harm to us. In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.

Insurance covering defective seed claims may become unavailable or be inadequate.

Defective seed could result in insurance claims and negative publicity. Although we carry general liability insurance to cover defective seed claims, such coverage may become unavailable or be inadequate. Even if coverage is offered, it may be at a price and on terms not acceptable to us. If claims exceed coverage limits, or if insurance is not available to us, the occurrence of significant claims could have a material adverse effect on our business, results of operations and financial condition.

23

We may be exposed to product quality claims, which may cause us to incur substantial legal expenses and, if determined adversely against us, may cause us to pay significant damage awards.

We may be subject to legal proceedings and claims from time to time relating to our seed or stevia quality. The defense of these proceedings and claims can be both costly and time consuming and may significantly divert efforts and resources of our management personnel. An adverse determination in any such proceeding could subject us to significant liability and damage our market reputation and prevent us from achieving increased sales and market share. Protracted litigation could also result in our customers or potential customers deferring or limiting their purchase of our products.

Capital and credit market issues could negatively affect our liquidity, increase our costs of borrowing and disrupt the operations of our growers and customers.

The capital and credit markets have experienced increased volatility and disruption over the past several years, making it more difficult for companies to access those markets. Continued or increased volatility and disruption in the capital and credit markets may impair our liquidity or increase our costs of borrowing, if we need to access the credit market. Our business could also be negatively impacted if our growers or customers experience disruptions resulting from tighter capital and credit markets or a slowdown in the general economy.

If we are unable to protect our intellectual property rights, our business and prospects may be harmed.

Our ability to compete effectively is dependent upon the proprietary nature of the seeds, seedlings, processes, technologies and materials owned by or used by us or our growers. If any competitors independently develop new traits, seeds, seedlings, processes or technologies that customers or end users determine are better than our existing products, such developments could adversely affect our competitive position.

In some cases, we obtain patent protection or plant breeder rights registrations for certain of our seed products.   However, our principal method of guarding our proprietary varieties and hybrids is exercising a high degree of control over the supply chain.  We also rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents. Although we require our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques.

Even with these measures in place, it would be possible for persons with access to our seed or plants grown from our seed to reproduce and market products substantially similar to our proprietary seed varieties, which could significantly harm our business and our reputation.  Third parties may challenge the validity, enforceability and scope of our intellectual property rights.  Furthermore, we sell our products in more than 40 countries and the laws of some countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. Litigation may be necessary to protect our proprietary property and determine the validity and scope of the proprietary rights of competitors. Intellectual property litigation could result in substantial costs and diversion of our management and other resources. If we are unable to successfully protect our intellectual property rights, our competitors could market products that compete with our proprietary products without obtaining a license from us.

24

Risks Related to our Financial Position and Investment in Our Securities

The terms of our loan and security agreement with CIBC and MFP place restrictions on our operating and financial flexibility, and failure to comply with covenants or to satisfy certain conditions may result in acceleration of our repayment obligations and foreclosure on our pledged assets, which could significantly harm our liquidity, financial condition, operating results, business and prospects and cause the price of our securities to decline.

Our revolving credit facility with CIBC is secured by a first priority perfected security interest in substantially all of our assets, subject to certain exceptions. In addition, we recently entered into a Subordinate Loan and Security Agreement with MFP Partners, L.P., or MFP, pursuant to which we may become obligated to repay deemed term loan advances.

Our loan agreement with CIBC requires us to comply with certain financial covenants. The loan agreements with CIBC and MFP also require us to comply with a number of other covenants (affirmative and negative), including restrictive covenants that limit our ability to, among other things, incur additional indebtedness; merge or consolidate with or into any other organization or otherwise suffer a change in control; acquire, own or make investments; repurchase or redeem any class of stock or other equity interest; declare or pay any cash dividend or make a cash distribution on any class of stock or other equity interest; and transfer a material portion of our assets, in each case subject to exceptions.

In addition to other specified events of default, and subject to limited exceptions, CIBC could declare an event of default upon our non-compliance with certain covenants or the occurrence of certain events that it may determine, in its sole discretion, to have a material adverse effect, including: a material adverse change in, or a material adverse effect on our business, property, assets or operations, taken as a whole; a material impairment of our ability to perform any of our obligations under the loan agreement; a material adverse effect upon the collateral for the loan or its value; or a material impairment of the enforceability or priority of the liens upon the collateral for the loan or the legality, validity, binding effect or enforceability of the loan agreement or related agreements.

If we default under the credit facility, CIBC may accelerate all of our repayment obligations, which may require us to seek additional or alternate financing and/or modify our operational plans. As of June 15, 2022 we were not in compliance with a minimum liquidity requirement, which was waived by CIBC. On September 22, 2022 we entered into an amendment with CIBC which, among other things, established a minimum liquidity covenant requiring us to maintain minimum liquidity of not less than $1,000,000, tested weekly. We cannot guarantee that we will be able to comply with all of the covenants contained in the CIBC loan agreement in the future, or secure additional waivers if or when required.  If we are unable to comply with or obtain a waiver of any noncompliance under the loan agreement, CIBC could declare an event of default or require us to further renegotiate the loan agreement on terms that may be significantly less favorable to us, or we may be required to seek additional or alternative financing. Although we have secured a lending commitment from MFP to address certain of these risks, we cannot assure you that we will be able to comply with the terms of the loan agreement with MFP, and we would still need to seek refinancing of the MFP loan agreement if any amounts became payable under the MFP loan agreement. If we were to seek additional or alternative financing, any such financing may not be available to us on commercially reasonable terms or at all.

We are actively engaging with potential lenders to refinance the CIBC loan agreement prior to its maturity on December 23, 2022. However, we cannot assure you that we will succeed in securing such refinancing on commercially reasonable terms, if at all, and whether such terms may be more restrictive than the provisions governing the loan agreement. In addition, we cannot assure you that we will not experience an event of default or be required to further renegotiate with, or seek additional waivers from, CIBC, including on terms that may be significantly less favorable to us, before we are able to refinance the loan agreement, if ever. Any declaration by CIBC of an event of default could significantly harm our liquidity, financial condition, operating results, business, and prospects and cause the price of our securities to decline. If we are unable to access funds to meet those obligations or to renegotiate our agreement, CIBC could foreclose on our pledged assets and we would have to immediately cease operations. In addition, during the continuance of an event of default, the then-applicable interest rate on the then-outstanding principal balance is subject to increase. Upon an event of default, CIBC could also require us to repay the loan immediately, together with a prepayment penalty, and other fees. If we were to

25

renegotiate the agreement under such circumstances, the terms may be significantly less favorable to us. If we were liquidated, CIBC’s right to repayment would be senior to the rights of our stockholders to receive any proceeds from the liquidation. Any declaration by CIBC of an event of default could significantly harm our liquidity, financial condition, operating results, business, and prospects and cause the price of our securities to decline.

We may incur additional indebtedness in the future. The debt instruments governing such indebtedness may contain provisions that are as, or more, restrictive than the provisions governing our existing indebtedness. If we are unable to repay, refinance or restructure our indebtedness when payment is due, CIBC could proceed against the collateral or force us into bankruptcy or liquidation.

The value of our common stock can be volatile.

Our common stock is listed on the Nasdaq Capital Market. The overall market and the price of our common stock can fluctuate greatly. The trading price of our common stock may be significantly affected by various factors, including but not limited to:

• economic status and trends in the dairy industry, which underlies demand for our alfalfa seed;

• market conditions for alfalfa seed in the Middle East and North Africa, where a substantial amount of our seed historically has been purchased by end users;

• quarterly fluctuations in our operating results;

• our ability to meet the earnings estimates and other performance expectations of investors or financial analysts;

• fluctuations in the stock prices of our peer companies or in stock markets in general; and

• general economic or political conditions.

Our quarter-to-quarter performance may vary substantially, and this variance, as well as general market conditions, may cause the price of our securities to fluctuate greatly and potentially expose us to litigation.

Our seed business is highly seasonal because it is tied to the growing and harvesting seasons. If sales in particular quarters are lower than expected, our operating results for these quarters could cause our share price to decline.

Our future expense estimates are based, in large part, on estimates of future revenue, which is difficult to predict. We expect to continue to make expenditures in order to expand production, sales, marketing and processes. We may be unable to, or may elect not to, adjust spending quickly enough to offset any unexpected revenue shortfall. If our increased expenses are not accompanied by increased revenue in the same quarter, our quarterly operating results would be harmed.

In one or more future quarters, our results of operations may fall below the expectations of investors or analysts, and the trading price of our securities may decline as a consequence. We believe that quarter-to-quarter comparisons of our operating results will not be a good indication of our future performance and should not be relied upon to predict the future performance of our stock price.

In the past, companies that have experienced volatility in the market price of their stock have often been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management's attention from other business concerns, which could seriously harm our business.

26

If we issue shares of preferred stock, the holdings of those owning our common stock could be diluted or subordinated to the rights of the holders of preferred stock.

Our board of directors is authorized by our articles of incorporation to establish classes or series of preferred stock and fix the designation, powers, preferences and rights of the shares of each such class or series without any further vote or action by our stockholders. Any shares of preferred stock so issued could have priority over our common stock with respect to dividend or liquidation rights.

Our actual operating results may differ significantly from our guidance.

We routinely release annual guidance in our quarterly earnings releases, our quarterly earnings conference calls and in other forums we consider appropriate. Such guidance regarding our future performance represents our management's estimates as of the date of release or other communication. This guidance, which includes forward-looking statements, is based on projections prepared by our management. These projections are not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our independent registered public accountants nor any other independent expert or outside party compiles or examines the projections, and accordingly, no such person expresses any opinion or any other form of assurance with respect thereto.

Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change. If we issue guidance, we will generally state possible outcomes as high and low ranges or approximations that are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested ranges or approximations. The principal reason that we would release guidance would be to provide a basis for our management to discuss our business outlook with analysts and investors. We do not accept any responsibility for any projections or reports published by any such persons.

Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions of the guidance furnished by us will not materialize or will vary significantly from actual results. Accordingly, our guidance, when given, is only an estimate of what management believes is realizable as of the date of release or other communication. Actual results will vary from our guidance, and the variations may be material. In light of the foregoing, investors are urged not to rely upon, or otherwise consider, our guidance in making an investment decision about our securities.

We do not anticipate declaring any cash dividends on our common stock.

We have never declared or paid cash dividends on our common stock and do not plan to pay any cash dividends in the near future. Our current policy is to retain all funds and any earnings for use in the operation and expansion of our business. If we do not pay cash dividends, our stock may be less valuable to investors because a return on their investment will only occur if our stock price appreciates.

Anti-takeover provisions and our right to issue preferred stock could make a third-party acquisition of us difficult.

Our articles of incorporation and bylaws contain provisions that would make it more difficult for a third party to acquire control of us, including a provision that our board of directors may issue preferred stock without stockholder approval. In addition, certain anti-takeover provisions of Nevada law, if and when applicable, could make it more difficult for a third party to acquire control of us, even if such change in control would be beneficial to our stockholders.

Item 1B. Unresolved Staff Comments

None.

27

Item 2. Properties

The following is a description of our material properties:

Location	Size	Primary Use	Leased or Owned
Dumas (Moore County), Texas	9,021 sq. ft.	Warehouse storage	Owned by S&W
Kern County, California	584 acres	Farmland suitable for farming alfalfa seed and alfalfa hay	Leased by S&W
Keith, South Australia	8.2 acres	Processing facility	Owned by S&W Australia
Keith, South Australia	58 acres	Research farm	Leased by S&W Australia
Longmont (Boulder County), Colorado	8,948 sq. ft.	Corporate Headquarters for S&W	Leased by S&W
Lubbock (Lubbock County), Texas	7,200 sq. ft.	Research facilities and warehouse storage	Leased by S&W
Lubbock (Lubbock County), Texas	15,000 sq. ft.	Research greenhouse	Leased by S&W
Lubbock (Lubbock County), Texas	1,972 sq. ft.	Laboratory and general office	Leased by S&W
Nampa (Canyon County), Idaho	80 acres (approx.)	Alfalfa research and development facilities	Owned by S&W
Nampa (Canyon County), Idaho	16 acres	Milling facilities	Owned by S&W
New Deal (Lubbock County), Texas	111,062 sq. ft.	Processing facility and production warehouse storage	Owned by S&W
Penfield, South Australia	43,000 sq. ft.	Warehousing and production storage and research and development	Leased by S&W Australia
Deniliquin, New South Wales	100 acres	Processing Facility	Leased by S&W Australia
Breeza, New South Wales	159 acres	Research farm	Leased by S&W Australia
Tamworth, New South Wales	15,392 sq. ft.	Research and development and warehousing and production storage	Leased by S&W Australia
Tifton (Tift County), Georgia	11,508 sq. ft.	Research and shop facilities	Leased by S&W
Tifton (Tift County), Georgia	2 acres	Stevia/sorghum/camelina R&D field plots	Leased by S&W
Toowoomba, Queensland	12,110 sq. ft.	Research and development and warehousing and production storage	Leased by S&W Australia
Tulia (Swisher County), Texas	12,000 sq. ft.	Warehouse storage	Leased by S&W
Victoria (Victoria County), Texas	2,400 sq. ft.	Research facilities and warehouse storage	Leased by S&W
Wingfield, South Australia	17,200 sq. ft.	Warehousing and production storage	Leased by S&W Australia

We believe that our current facilities are adequate for our needs for the immediate future and that, should it be needed, suitable additional space will be available to accommodate expansion of our operations on commercially reasonable terms.

28

Item 3. Legal Proceedings

From time to time, we are involved in lawsuits, claims, investigations and proceedings, including pending opposition proceedings involving patents that arise in the ordinary course of business. There are no matters pending that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

29

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information Regarding Our Common Stock

Our common stock is traded on the Nasdaq Capital Market under the symbol “SANW.”

Holders

As of September 21, 2022, we had 43 stockholders of record. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders.

Dividend Policy

We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors considers relevant. In addition, our loan agreement with CIBC Bank USA contains restrictions on our ability to pay dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

There were no unregistered sales of equity securities in 2022 fiscal year that have not been previously reported on a Current Report on Form 8-K.

Purchases of Equity Securities by the Issuer and Affiliate Purchasers

None.

Item 6. Reserved

30

Item 7. 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 II, Item 8, “Financial Statements” of this Annual Report on Form 10-K. 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 Annual Report on Form 10-K. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Part I, Item 1A, “Risk Factors.”

Executive Overview

We are a global multi-crop, middle-market agricultural company. We are market leaders in the breeding, production and sale of alfalfa seed and sorghum seed. We also have a commercial market presence in sunflower, wheat and pasture seed and maintain an active stevia development program.  

Our seed platform develops and supplies high quality germplasm designed to produce higher yields for farmers worldwide. We sell over 500 seed products in more than 40 countries. We maintain an active product pipeline and expect to introduce more than 20 new products during the fiscal year 2023.

Strategic Review

We recently undertook a strategic review of our operations and future growth opportunities to determine areas we believe are key centers of value, including our U.S. sorghum, international forage, specialty crop and U.S. alfalfa businesses.

With respect to specialty crops, we intend to initially focus on stevia and camelina. We believe that an opportunity exists to bring to market new stevia varieties that can both meet consumer taste requirements and have yield quality that would enable farmers to profitably grow stevia in North and South America. We plan to leverage our proprietary stevia germplasm to form collaborations and commercial agreements with supply chain partners to create a U.S.-based stevia production industry for high-quality stevia sweetener with superior taste profiles that would supply major customers in the U.S. market, including pursuant to our previously announced U.S. stevia pilot production supply agreement with Ingredion. We also believe we have an opportunity to enter the camelina market as a seed and technology provider, where we plan to work with large oil companies for biofuel production leveraging our capabilities in producing, processing, and packaging camelina.

We have also begun working to align our cost structure to support these centers of value while assessing other potential value-generating transactions and means to strengthen our balance sheet. On May 11, 2022, we and Trigall Genetics, a leader in transgenic wheat, announced that we have entered into preliminary, nonbinding discussion to potentially combine our respective wheat operations through a joint venture in Australia. While we believe this joint venture could be beneficial in a number of respects, there can be no assurance that these preliminary, nonbinding discussions will result in a consummated transaction.

In addition, we have begun implementing our plan to reduce annual operating expenses by approximately $5.0 million, including through efforts to streamline our European sunflower operations by closing our facilities in Hungary, which we estimate could result in operating expense reductions of approximately $700,000.

Global Economic Conditions

The COVID-19 pandemic, military conflicts and other global events have had and may continue to have an adverse impact on our business, operations and the markets and communities in which we, our partners and customers operate. The COVID-19 pandemic continues to rapidly evolve and cause disruptions in the various markets in which we operate. In addition, although we have not been materially impacted to date, the military conflict in Russia and Ukraine, and related sanctions imposed against Russia, could lead to disruption, instability and volatility in global markets and industries that could negatively impact our operations.

31

The COVID-19 pandemic has negatively impacted our operations and financial results. Beginning in 2021 and continuing into 2022, ongoing strong demand for consumer goods and the effects of COVID-19 mitigation strategies have led to broad-based supply chain disruptions across the U.S. and globally, including inflation on many consumer products, labor shortages and demand outpacing supply. We continue to work closely with our business units, 3^rd party contractors and suppliers and other external business partners to minimize the potential impact on our business.

As the COVID-19 pandemic continues to affect the areas in which we operate, we believe the outbreak has and will continue to have a negative impact on our sales, operating results and financial condition. The extent of the impact of the COVID-19 pandemic on our sales, operating results and financial condition will depend on certain developments, including the duration and spread of the outbreak, impact on our customers, employees and vendors, all of which are uncertain and cannot be predicted.

Our product revenue is predicated on our ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in our distribution and supply channels, or concerns about our ability to timely fulfill their orders. If our customers delay or decrease their orders due to potential disruptions in our distribution and supply channels, this will adversely affect our product revenue.

During the years ended June 30, 2022 and June 30, 2021, we experienced numerous logistical challenges due to limited availability of trucks for product deliveries, congestion at the ports, and overall rising costs of shipping and transportation costs. We expect these logistical challenges to persist throughout fiscal 2023, which may, among other things, delay or reduce our ability to recognize revenues within a particular fiscal period and harm our results of operations.

The ultimate impact that COVID-19 will have on our consolidated financial statements remains uncertain and ultimately will be dictated by the length and severity of the pandemic, including broad-based supply chain disruptions, rising levels of inflation, the spread of COVID-19 variance or resurgences, as well as the economic recovery and actions taken in response to local, state and national governments around the world, including the distribution of vaccinations. We will continue to evaluate the nature and extent of those potential and evolving impacts to our business and consolidated financial statements.

Components of Our Statements of Operations Data

Revenue and Cost of Revenue

Product and Other Revenue

We derive most of our revenue from the sale of our proprietary seed varieties and hybrids. We expect that over the next several years, a substantial majority of our revenue will be generated from the sale of alfalfa, sorghum and pasture seed, although we are continually assessing other possible product offerings or means to increase revenue, including expanding into higher margin crops.

The mix of our product offerings will continue to change over time with the introduction of new seed varieties and hybrids resulting from our robust research and development efforts, including our potential expansion of novel, non-GMO product lines, potential entry into gene-edited product markets, potential entry into specialty crop markets, including stevia and biofuels, and additional strategic transactions.

Our revenue will fluctuate depending on the timing of orders from our customers and distributors and the extent to which markets are impacted by sources of instability and volatility in global markets and industries, including, among other things, the COVID-19 pandemic, the conflict between Russia and Ukraine, and global inflation. Because some of our large customers and distributors order in bulk only one or two times per year, our product revenue can fluctuate significantly from period to period. Some of this fluctuation is offset by having operations in both the northern and southern hemispheres. In addition, due to the numerous logistical challenges we have

32

experienced in our shipping and distribution networks resulting from the COVID-19 pandemic, our product revenue has fluctuated, and our ability to recognize revenues within a particular fiscal period has been impacted. We expect our product revenue will fluctuate from period to period as a result of the COVID-19 pandemic.

Our specialty crops, including our stevia breeding program and biofuels program, have yet to generate any meaningful revenue. However, management continues to evaluate this portion of our business and assess various opportunities to monetize the results of our research and development efforts. Such potential opportunities include possible collaborations, licensing agreements and royalty-based agreements.

Cost of Revenue

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

Operating Expenses

Research and Development Expenses

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.

Overall, we have been focused on controlling research and development expenses, while balancing that objective against the recognition that continued advancement in product development is an important part of our strategic planning. We intend to focus our resources on high value activities. For alfalfa seed, we plan to invest in further development of differentiating forage quality traits.  For sorghum, we plan to invest in higher value grain products, proprietary herbicide tolerance traits and improved safety and palatability in forage products. 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.

Depreciation and Amortization

We amortize intangible assets, including those acquired from Pasture Genetics in 2020, Chromatin in 2018 and from SV Genetics in May 2016, using the straight-line method over the estimated useful life of the asset, consisting of periods of 3-30 years for technology/IP/germplasm, 5-20 years for customer relationships and trade names and 3-20 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 5-35 years for buildings, 2-20 years for machinery and equipment and 2-5 years for vehicles.

33

Other (Income) Expense

Other expense consists primarily of foreign currency gains and losses, change in contingent consideration obligation and interest expense in connection with amortization of debt discount. Interest expense primarily consists of interest costs related to outstanding borrowings on our working capital credit facilities and our financing with Conterra Agricultural Capital, LLC, and its affiliates, or 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. generally accepted accounting principles, or 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 decline in export sales to Saudi Arabia. As a result, we do not believe that it is more likely than not that our deferred tax assets will be realized.

Results of Operations

Fiscal Year Ended June 30, 2022 Compared to the Fiscal Year Ended June 30, 2021

Revenue and Cost of Revenue

Revenue for the year ended June 30, 2022 was $71.4 million compared to $84.0 million for the year ended June 30, 2021. The $12.7 million decrease in revenue for the year ended June 30, 2022 was primarily due to a $14.2 million decrease in product revenue received from Pioneer (subsidiary of Corteva) offset by a $1.5 million increase in product revenue in alfalfa, partially offset by pasture products. During the year ended June 30, 2022 we recorded no sales to Pioneer, compared to $14.2 million for the year ended June 30, 2021.  

Core Revenue (which we define as total revenue, excluding product revenue attributable to Pioneer) for the year ended June 30, 2022 was $71.4 million compared to Core Revenue for the year ended June 30, 2021 of $69.9 million, representing an increase of $1.5 million or 2.1%. Due to the revised agreements with Pioneer in May 2019, we plan to provide Core Revenue as a metric to track performance of our business until product revenue attributable to our revised agreements with Pioneer is no longer reflected in comparisons between fiscal periods. The increase in Core Revenue for the year ended June 30, 2022 can be attributed to an increase in alfalfa revenues in the Middle East, partially offset by decreased sales of pasture products in Australia and a slight decline in service revenue for treating and packaging services.

Sales into international markets represented 70% and 56% of our total revenue during the year ended June 30, 2022 and 2021, respectively. Domestic revenue accounted for 30% and 44% of our total revenue for the year ended June 30, 2022 and 2021, respectively. The increase in international revenue as a percentage of total revenue was primarily due to increased sales in the Middle East. The decrease in domestic revenue as a percentage of total revenue was primarily attributable to the termination of the Pioneer and Corteva agreement mentioned above.

34

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

	Years Ended June 30,
	2022				2021
Australia	$	21,721,727	30	%	$	21,470,810	26	%
United States		21,053,335	30	%		37,124,047	44	%
Saudi Arabia		9,510,809	13	%		5,911,498	7	%
Pakistan		3,309,800	5	%		2,041,548	2	%
China		2,565,668	4	%		2,042,585	2	%
South Africa		1,946,153	3	%		2,456,216	3	%
Libya		1,739,105	2	%		1,249,554	2	%
Argentina		1,543,474	2	%		1,838,648	2	%
Sudan		1,443,748	2	%		1,218,168	1	%
Egypt		960,114	1	%		818,101	1	%
Other		5,560,365	8	%		7,877,861	10	%
Total revenue	$	71,354,298	100	%	$	84,049,036	100	%

Cost of revenue of $65.0 million for the year ended June 30, 2022 was equal to 91.1% of total revenue for the year ended June 30, 2022, while the cost of revenue of $70.4 million for the year ended June 30, 2021 was equal to 83.7% of total revenue for the year ended June 30, 2021. Cost of revenue for the years ended June 30, 2022 and 2021 included inventory write-downs of $6.4 million and $1.4 million, respectively. The write-down of inventory during the years ended June 30, 2022 and 2021 related to certain inventory lots that deteriorated in quality and germination rates during the year. During the year ended June 30, 2022 the write-down of inventory also included reserves for an estimated amount that is expected to deteriorate in quality and germination during the product life cycle and adjusting specific products to market value.

Gross profit margin for the year ended June 30, 2022 was 8.9% compared to 16.3% in the prior year. The decrease in gross margin for the year ended June 30, 2022 is primarily driven by the increase in inventory write-downs and reserves, coupled with higher production costs, offset in part by higher margin Double Team™ grain sorghum sales. During the years ended June 30, 2022 and June 30, 2021, the Company experienced numerous logistical challenges due to limited availability of trucks for product deliveries, congestion at the ports, and overall rising cost increases of shipping and transportation costs.  The Company expects these logistical challenges to persist throughout fiscal 2023.

Excluding the $6.4 million of inventory write-downs, gross margin would have been 17.8% for the year ended June 30, 2022. Excluding the $1.4 million of inventory write-downs in the prior year, gross margin would have been 18.0% for the year ended June 30, 2021. We believe it is useful to exclude inventory write-downs in calculating adjusted gross margins in order to provide investors with a method to compare our operating results to prior periods and to peer companies.

Selling, General and Administrative Expenses

Selling, General and Administrative, or SG&A, expense for the year ended June 30, 2022 totaled $24.5 million compared to $21.9 million for the year ended June 30, 2021. The $2.6 million increase in SG&A expense versus the prior year was primarily due to $1.6 million incurred for changes in executive leadership and other severance in fiscal year 2022, $0.5 million increase in our stock-based compensation, $0.4 million change in our incentive compensation accruals and a $0.2 million increase in other expenses including professional fees, travel, rent and salaries and wages. As a percentage of revenue, SG&A expenses were 34.3% for the year ended June 30, 2022, compared to 26.0% for the year ended June 30, 2021.

Research and Development Expenses

Research and development expenses for the year ended June 30, 2022 totaled $7.7 million compared to $8.5 million for the year ended June 30, 2021. The $0.8 million decrease in research and development expense versus the prior year is primarily driven by reduced investment in our sunflower programs.  

35

Depreciation and Amortization

Depreciation and amortization expense for the year ended June 30, 2022 was $5.5 million compared to $5.5 million for the year ended June 30, 2021. For the year ended June 30, 2022 the expense was $2.4 million of depreciation expense of fixed assets, $2.4 million of amortization expense of intangible assets and $0.7 million of amortization expense of finance leases. For the year ended June 30, 2021 the expense was $2.5 million of depreciation expense of fixed assets used in the business, $2.4 million of amortization expense of intangible assets and $0.6 million of amortization expense of finance leases. For the year ended June 30, 2022 depreciation expense was $0.1 million lower due to the fixed assets sold with our Five Points facility sale in January 2021, partially offset by $0.1 million increase in amortization expense for finance lease additions in Australia.

Gain on Disposal of Property, Plant and Equipment

The gain on disposal of property, plant and equipment for the year ended June 30, 2022 was $31,088 compared to $1.9 million for the year ended June 30, 2021. The recorded gain on disposal of property, plant and equipment during the year ended June 30, 2021 was primarily related to the sale of our Five Points facility and other assets located in California.

Goodwill Impairment Charges

Goodwill impairment charges for the year ended June 30, 2022 was $1.5 million compared to none for the year ended June 30, 2021. The impairment charge related to the full impairment of our goodwill as a result of a sustained decline in the market capitalization of our common stock during the fourth quarter of the fiscal year ended June 30, 2022.

The sustained decline in market capitalization of our common stock during the fourth quarter of the fiscal year ended June 30, 2022 was a potential indicator of impairment. As a result, we initiated an impairment test for the year ended June 30, 2022 and concluded that the entire goodwill balance was impaired.

Foreign Currency Loss (Gain)

Foreign currency loss for the year ended June 30, 2022 was $0.8 million compared to a $0.1 million foreign currency gain for the year ended June 30, 2021. The foreign currency losses and gains are primarily associated with S&W Australia and S&W Hungary, our wholly-owned subsidiaries.

Change in contingent consideration obligation

The change in contingent consideration obligation for the year ended June 30, 2022 was a $0.7 million benefit compared to $4.0 million benefit for the year ended June 30, 2021. The contingent consideration obligation is considered a level 3 fair value financial instrument and is measured at each reporting period. The $3.3 million decrease in benefit to non-cash change in contingent consideration versus the prior year was driven by the decrease in the estimated fair value of the contingent consideration obligation associated with the February 2020 Pasture Genetics acquisition.

Interest Expense - Amortization of Debt Discount

Non-cash amortization of debt discount expense for the year ended June 30, 2022 was $0.9 million compared to $0.7 million for the year ended June 30, 2021. The expense in both years represents the amortization of the debt issuance costs associated with our working capital facilities, our secured property note and our equipment capital leases.

Interest Expense

Interest expense for the year ended June 30, 2022 totaled $2.2 million compared to $2.3 million for the year ended June 30, 2021. The expense in both years consists of the interest incurred on the working capital credit facilities, the secured property loan entered into in November 2017, and equipment capital leases. The $0.1 million decrease in interest expense for the year ended June 30, 2022 was primarily driven by decreases in average borrowings on the working capital credit facilities partially offset by year over year increased interest rates.

36

Provision for Income Taxes

Our income tax expense totaled $0.4 million for the year ended June 30, 2022 compared to an income tax benefit of $(24,358) for the year ended June 30, 2021. Our effective tax rate was (1.2%) for the year ended June 30, 2022 compared to 0.1% for the year ended June 30, 2021. Our effective tax rate was relatively consistent year over year. The slight decrease in our effective tax rate for the year ended June 30, 2022 was primarily attributable to an increase in our non-US income tax expense for the year ended June 30, 2022 compared to the year ended June 30, 2021.  Our tax expense is substantially driven by our full valuation allowance. 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 do record certain tax expenses and benefits related to some of our activity in our non-US locations, as well as related to our state tax return liabilities.  For example, we recorded income tax expense related to the current year activity and prior year tax return filings of our subsidiary located in Australia.  We also recorded minor tax benefit and expense related to current year activity and prior tax return filings of our subsidiaries in South Africa and Hungary, respectively.

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 2022, we paid our North American growers approximately 50% of amounts due in the fall of 2021 and the balance was paid in the spring of 2022. This payment cycle to our growers was similar in fiscal year 2021. We expect it to be similar for fiscal year 2023, provided, that we would be unable to pay our growers timely if we are unable to secure sufficient financing before October 2023.  S&W Australia and Pasture Genetics, our Australian-based subsidiaries, have production cycles that are 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, our month-to-month and quarter-to-quarter sales and associated cash receipts are highly dependent upon the timing of deliveries to and payments from these distributors, which varies significantly from year to year.

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 sales of our debt and equity securities and credit facilities from financial institutions, both in the United States and Australia.

Capital Resources and Requirements

We are not profitable and have had negative cash flow from operations for the last several years. To help fund our operations, we have in part relied on equity and debt financings, and we will need to obtain additional funding to finance our operations both for the next twelve months and thereafter. Accordingly, we are actively evaluating financing and strategic alternatives, including debt and equity financings and potential sales of assets or certain lines of business.

Our loan and security agreement with CIBC Bank USA, or CIBC, and our secured promissory note with Conterra, which mature on December 23, 2022, contain various operating and financial covenants. The COVID-19 pandemic and other factors affecting our results of operations have increased the risk of our inability to comply with these covenants, which could result in acceleration of our repayment obligations and foreclosure on our pledged assets. In addition, these loan agreements contain cross-default provisions, such that certain defaults or breaches under any of

37

our loan agreements may entitle CIBC or Conterra to invoke default remedies. We were not in compliance with certain of these covenants as of June 30, 2021, December 31, 2021, March 31, 2022, and June 30, 2022 and were required to obtain waivers and/or amendments from CIBC and Conterra. As of June 15, 2022 we were out of compliance with a minimum liquidity requirement, which was waived by CIBC. The CIBC loan agreement as presently in effect requires the Company to maintain minimum liquidity of no less than $1,000,000 at all times. We do not currently expect we will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet these covenants in certain periods prior to maturity. We will need to raise additional capital, secure future waivers and/or amendments from our lenders, obtain financing from new lenders, and/or accomplish some combination of these items to maintain sufficient liquidity. We are actively pursuing refinancing of the CIBC facility and Conterra loan.

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

• the maturity and repayment of our debt;

• the extent and duration of future operating income;

• the level and timing of future sales and expenditures;

• timing for when we are able to recognize revenue;

• working capital required to support our growth;

• our ability to timely pay our growers;

• investment capital for plant and equipment;

• investment in our sales and marketing programs;

• investment capital for potential acquisitions;

• our ability to renew and/or refinance our debt on acceptable terms;

• our ability to raise equity financing, in order to secure refinancing as well as support our operations, among other things;

• competition;

• market developments; and

• developments related to the COVID-19 pandemic.

We cannot assure you that we will be successful in renewing or refinancing our existing debt, raising additional capital, securing future waivers and/or amendments from CIBC, Conterra or our other lenders, renewing or refinancing our existing debt, or securing new financing. If we are unsuccessful in doing so, we may need to reduce the scope of our operations, repay amounts owing to our lenders, finance our cash needs through a combination of equity and debt financings, enter into collaborations, strategic alliances and licensing arrangements, sell certain assets or divest certain operations.  

If we are required or desire to raise additional capital in the future, whether as a condition to loan refinancing or separately, such additional financing may not be available on favorable terms, or available at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest would be diluted and the terms of these securities could include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may be secured by all or a portion of our assets, and may be on terms less favorable than our existing loans. If we fail to obtain additional capital as and when required, such failure could have a material impact on our business, results of operations and financial condition.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the ongoing military conflict between Russia and Ukraine, and other factors beyond our control, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. It is possible that further deterioration in credit and financial markets and confidence in economic conditions will occur. If equity and credit markets deteriorate, it may affect our ability to raise equity capital, borrow on our existing facilities or make any additional necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. In addition, while we are currently in compliance with our loan agreements, our ability to comply with the terms of our loan agreements has been compromised and could result in an event of default. If an event of default were to occur,

38

our lenders could accelerate our repayment obligations or enforce their other rights under our agreements with them. Any such default may also require us to seek additional or alternative financing, which may not be available on commercially reasonable terms or at all.

Below is a summary of our material sources of capital in recent periods:

Debt Financings

Loan and Security Agreement with CIBC

On December 26, 2019, we entered into a Loan and Security Agreement with CIBC, or the Loan Agreement, which we amended on September 22, 2020, December 30, 2020, May 12, 2021, September 27, 2021, May 13, 2022 and September 22, 2022. As amended, the Loan Agreement provides for an $18.0 million credit facility, or the CIBC Credit Facility. As of June 30, 2022, we had a combined aggregate of $3.1 million of cash on hand and availability under the CIBC Credit Facility.

The key terms of the amended Loan Agreement include the following: 

• Advances under the CIBC Credit Facility are to be used: (i) to finance our ongoing working capital requirements; and (ii) for general corporate purposes. We may also use a portion of the CIBC Credit Facility to finance permitted acquisitions and related costs.

• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the CIBC Credit Facility, will be payable in full on December 23, 2022.

• The CIBC Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable (90% of eligible foreign accounts receivable) plus up to the lesser of (i) 65% of eligible inventory, (ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) an eligible inventory sublimit as more fully set forth in the Loan Agreement, in each case, subject to lender reserves.

• Loans are based on a base rate plus 2.0% per annum. In the event of a default, at the option of CIBC, the interest rate on all obligations owing will increase by 2% per annum over the rate otherwise applicable.

• The CIBC Credit Facility is secured by a first priority perfected security interest in substantially all of our assets (subject to certain exceptions), including intellectual property.

• The Loan Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default that permit CIBC to accelerate our outstanding obligations under the CIBC Credit Facility, all as set forth in the Loan Agreement and related documents. The CIBC Credit Facility also contains customary and usual financial covenants imposed by CIBC.

Pursuant to the September 22, 2022 amendment, among other things, (i) the total revolving commitment provided under the Loan Agreement has been reduced to $18,000,000 from $20,000,000; (ii) the minimum liquidity financial covenant has been adjusted to require maintenance of no less than $1,000,000 for the remainder of the Loan Agreement, in each case tested weekly. We were not in compliance with the minimum liquidity requirement as of June 15, 2022; however, pursuant to the September 2022 amendment, we obtained waiver from CIBC to continue to be in compliance with the financial covenants under the Loan Agreement.

We cannot guarantee that we will be able to comply with our covenants in the Loan Agreement in the future, or secure additional waivers if or when required. If we are unable to comply with or obtain a waiver of any noncompliance under the Loan Agreement, CIBC could declare an event of default or require us to further renegotiate the Loan Agreement on terms that may be significantly less favorable to us, or we may be required to seek additional or alternative financing.

We are actively engaging with potential lenders to refinance the Loan Agreement prior to its maturity on December 23, 2022. However, we cannot assure you that we will succeed in securing such refinancing on commercially reasonable terms, if at all, and whether such terms may be more restrictive than the provisions governing the Loan Agreement. In addition, we cannot assure you that we will not experience an event of default or be required to further renegotiate with, or seek additional waivers from, CIBC, including on terms that may be significantly less favorable to us, before we are able to refinance the Loan Agreement, if ever. Any declaration by CIBC of an event

39

of default could significantly harm our liquidity, financial condition, operating results, business, and prospects and cause the price of our securities to decline.

Debt Facilities with National Australia Bank

At June 30, 2022, S&W Australia has debt facilities with National Australia Bank, or NAB, all of which are guaranteed by S&W Seed Company up to a maximum of AUD $15,000,000 (USD $10,332,000) and cross-guaranteed by S&W Australia.

On November 11, 2021, S&W Australia amended its debt facility with NAB pursuant to which:

• the borrowing base line credit limit under the seasonal credit facility increased from AUD $26,000,000 (USD $18,722,600) at September 30, 2021 to AUD $32,000,000 (USD $22,041,600) at June 30, 2022;

• the overdraft credit limit under the seasonal credit facility, or Overdraft Facility, decreased from AUD $3,000,000 (USD $2,160,300) at September 30, 2021 to AUD $2,000,000 (USD $1,497,400) at March 31, 2022. It then further decreased to AUD $1,000,000 (USD $748,700) at April 1, 2022. According to the agreement, the overdraft credit limit was to decrease to zero at June 30, 2022, but with NAB’s approval of the temporary extension of the Overdraft Facility, the credit limit remains AUD $1,000,000 (USD $688,800) at June 30, 2022;

• the credit limit under the master asset finance facility increased from AUD $2,000,000 (USD $1,440,200) at September 30, 2021 to AUD $3,000,000 (USD $2,066,400) at June 30, 2022; and

• the month in which annual principal repayments are required on the flexible rate loan was adjusted from November to May of each fiscal year.

After the amendment, the consolidated debt facilities with NAB provide up to an aggregate of AUD $40,000,000 (USD $27,552,000) of credit as of June 30, 2022, and include the following:

• S&W Australia finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility comprised of two facility lines: (i) an Overdraft Facility having credit limit of AUD $1,000,000 (USD $688,800) at June 30, 2022 and (ii) a Borrowing Base Line having a credit limit of AUD $32,000,000 (USD $22,041,600 at June 30, 2022). As of June 30, 2022, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 4.90% per annum calculated daily. The Overdraft Facility permitted S&W Australia 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 June 30, 2022, the Overdraft Facility accrued interest at approximately 5.72% per annum calculated daily. As of June 30, 2022, AUD $32,000,000 (USD $22,041,600) was outstanding under S&W Australia’s seasonal credit facility with NAB.  The seasonal credit facility is secured by a fixed and floating lien over all the present and future rights, property, and undertakings of S&W Australia. 

• S&W Australia has a flexible rate loan, or the Term Loan, in the amount of AUD $4,000,000 (USD $2,775,200) at June 30, 2022. Required annual principal payments of AUD $500,000 (USD $344,400) at June 30, 2022 on the Term Loan commenced on November 30, 2020, with the remainder of any unpaid balance becoming due on March 31, 2025. As part of the amendment, the November 2021 repayment was deferred to May 2022 with AUD $500,000 (USD $344,400) being paid and the remaining repayments due in May of each year. Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%. The Term Loan is secured by a lien on all the present and future rights, property and undertakings of S&W Australia.

• S&W Australia finances certain equipment purchases under a master asset finance facility with NAB.  The master asset finance facility has various maturity dates through 2029 and have interest rates ranging from 2.86% to 5.03%.  The credit limit under the facility is AUD $3,000,000 (USD $2,066,400) at June 30, 2022.  As of June 30, 2022, AUD $1,757,085 (USD $1,210,280) was outstanding under S&W Australia’s master asset finance facility.

S&W Australia was in compliance with all debt covenants under its debt facilities with NAB at June 30, 2022.

40

Secured Note with Conterra

In November 2017, we entered into a secured note financing transaction with Conterra for $12.5 million in gross proceeds. Pursuant to this transaction, we issued a secured real estate note to Conterra in the principal amount of $10.4 million, which bears interest of 7.75% per annum and is secured by a first priority security interest in the property, plant and fixtures located at our Nampa, Idaho production facilities and our Nampa, Idaho research facilities. We may prepay the secured note, in whole or in part, at any time. In January 2021, the Company completed the sale of its Five Points facility which resulted in the Company making a one-time principal pay-down of $1,706,845 on the secured real estate note. The final semi-annual principal and interest payment of $454,185 was made on July 1, 2022. On September 22, 2022, we entered into an amendment to extend the note’s maturity date to December 23, 2022. We are required to make a one-time final payment of approximately $6,969,668 on December 23, 2022. We were not in compliance with our total debt coverage ratio as of June 30, 2022, however we received a waiver from Conterra. We are actively engaging with Conterra and potential lenders to refinance the Conterra note prior to the final payment under the Conterra note coming due. However, we cannot assure you that we will succeed in securing such refinancing on commercially reasonable terms, if at all, and whether such terms may be more restrictive than the provisions governing the Conterra note. In addition, we cannot assure you that we will not experience an event of default or be required to further renegotiate with, or see additional waivers from, Conterra, including on terms that may be significantly less favorable to us, before we are able to refinance the Conterra note, if ever.

Equity Issuances

On September 23, 2020, we entered into an At Market Issuance Sales Agreement, or the ATM Agreement, with B. Riley Securities, Inc., or B. Riley, under which we may offer and sell from time to time, at our sole discretion, shares of our common stock having an aggregate offering price of up to $17.1 million through B. Riley as our sales agent. On May 17, 2022, we amended the ATM Agreement to having an aggregate offering price of $24.6 million.

For the year ended June 30, 2022, we received gross proceeds of approximately $7.4 million from the sale of 3,655,136 shares of our common stock pursuant to the ATM Agreement. For the year ended June 30, 2021, we received gross proceeds of approximately $10.9 million from the sale of 3,008,015 shares of its common stock pursuant to the ATM Agreement. As of June 30, 2022, we had $6.3 million remaining under the ATM Agreement.

On October 14, 2021, we entered into a Securities Purchase Agreement, or the Purchase Agreement, with the purchasers named therein, or the Purchasers, pursuant to which we agreed to sell and issue to the Purchasers an aggregate of 1,847,343 shares of our common stock, or the Shares, at a purchase price of $2.73 per share, for aggregate gross proceeds of approximately $5.0 million.

The Purchasers included MFP Partners, L.P., or MFP, our largest stockholder, Starlight 4, LLLP, an entity affiliated with Mark W. Wong, our Chief Executive Officer and a member of our board of directors, and Alan D. Willits, Charles B. Seidler and Robert Straus, each a member of our board of directors. Alexander C. Matina, a member of our board of directors, is Vice President of Investments of the general partner of MFP.

On February 18, 2022, we entered into a Securities Purchase Agreement with MFP, pursuant to which we sold and issued to MFP, in a private placement, 1,695 shares of our Series B Redeemable Convertible Non-Voting Preferred Stock, par value $0.001 per share, an accompanying warrant to purchase up to 559,350 shares of our common stock, at a combined unit price of $2,950 per share, for aggregate gross proceeds of approximately $5.0 million.

41

Summary of Cash Flows

The following table shows a summary of our cash flows for the years ended June 30, 2022 and 2021:

	Years Ended June 30,
	2022			2021
Cash flows from operating activities	$	(18,373,139	)	$	(14,221,042	)
Cash flows from investing activities		(909,426	)		2,465,746
Cash flows from financing activities		17,138,674			10,892,685
Effect of exchange rate changes on cash		672,462			267,454
Net decrease in cash and cash equivalents		(1,471,429	)		(595,157	)
Cash and cash equivalents, beginning of period		3,527,937			4,123,094
Cash and cash equivalents, end of period	$	2,056,508		$	3,527,937

Operating Activities

For the year ended June 30, 2022, operating activities used $18.4 million in cash.  Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows used $20.8 million in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows provided $2.4 million in cash. The decrease in cash from changes in operating assets and liabilities was primarily driven by increases in accrued expenses and other current liabilities of $1.2 million, accounts payable of $1.0 million and inventories of $0.7 million, partially offset by a decrease in accounts receivable of $0.4 million.

For the year ended June 30, 2021, operating activities used $14.2 million in cash.  Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows used $15.8 million in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows provided $1.6 million in cash. The decrease in cash from changes in operating assets and liabilities was primarily driven by an increase in accounts payable of $7.3 million, partially offset by a decrease in deferred revenue of $5.8 million and a decrease in accrued expenses and other current liabilities of $1.0 million.

Investing Activities

Investing activities during the year ended June 30, 2022 used $0.9 million in cash. The purchase of property, plant and equipment used $2.1 million. The use of cash was partially offset by net proceeds from the sale of Bioceres stock that provided $1.0 million.

Investing activities during the year ended June 30, 2021 provided $2.5 million in cash. Proceeds from the disposal of property, plant and equipment of $0.8 million and net proceeds from the sale of properties in California provided $2.8 million. Net proceeds were partially offset by additions to property, plant and equipment of $1.1 million consisting primarily of equipment purchases for our distribution facility in Keith, Australia, and research and development facilities in Tamworth, Australia.

Financing Activities

Financing activities during the year ended June 30, 2022 provided $17.1 million in cash. During the year ended June 30, 2022, we had net proceeds from the sale of our common stock of $11.8 million, net proceeds from the sale of our preferred stock of $5.0 million, net borrowings on the working capital lines of credit of $1.8 million and borrowings of long-term debt of $0.9 million. Net proceeds were partially offset by repayments of long-term debt of $1.4 million and debt issuance costs of $0.7 million.

Financing activities during the year ended June 30, 2021 provided $10.9 million in cash. During the year ended June 30, 2021, we had net proceeds from the sale of our common stock of $10.2 million, net borrowings on the working capital lines of credit of $5.0 million, borrowings of long-term debt of $0.4 million and repayments of long-term debt of $4.4 million and debt issuance costs of $0.2 million.

Inflation Risk

Inflationary pressures on labor and commodity price increases directly impacted our consolidated results of operations during the three months ended June 30, 2022, and we expect this to continue throughout fiscal year 2023.

42

We attempt to manage any inflationary costs through selective price increases and changes in product mix, but rapidly changing inflationary pressures from global commodity prices and logistics could impact our costs of goods before pricing adjustments can be implemented. Delays in implementing such price increases, competitive pressures, and other factors may limit our ability to recover such cost increases in the future. Inherent volatility experienced in certain commodity markets could have a significant effect on our results of operations and may have an adverse effect on us in the future. The extent of any impact will depend on our ability to manage such volatility through the product mix that we sell and selective price increases.

Critical Accounting Estimates

In preparing our financial statements, we must select and apply various accounting policies in accordance with GAAP. Our most significant policies are discussed in Note 2 – Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements. In order to apply our accounting policies, we often need to make estimates, judgments and assumptions that we believe are reasonable, based upon the information available to us. 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.

Goodwill

Goodwill is assessed annually for impairment or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit.  These events could include a significant change in business climate, legal factors, a decline in operating performance or market capitalization or our common stock, competition, sale or disposition of a significant portion of a business, or other factors. We perform our annual or interim goodwill impairment test by comparing the estimated fair value of our one reporting unit with its carrying amount. If the estimated fair value of our reporting unit is less than the carrying amount, an impairment is indicated, requiring recognition of a goodwill impairment charge for the differential, not to exceed the total amount of goodwill allocated to the reporting unit.

We had a sustained decline in the market capitalization of our common stock during the fourth quarter of the fiscal year ended June 30, 2022, thereby triggering a potential indicator of goodwill impairment. As a result, we initiated a goodwill impairment test for the year ended June 30, 2022.

We compared the carrying value of our invested capital to estimated fair values at June 30, 2022. We estimated the fair value using the market approach and a control premium (based on management’s best estimate) was added.

Upon completing the impairment test, we determined that the estimated fair value of invested capital was less than the carrying value by approximately 11%, thus indicating an impairment. We recognized a goodwill impairment charge of $1.5 million for the year ended June 30, 2022, which represented the entire goodwill balance prior to the impairment charge.

Our impairment assessment is sensitive to changes in control premium. For the June 30, 2022 assessment of our one reporting unit, if we assumed our selected control premium of 20% was increased to 24%, our goodwill impairment would have been approximately $1.4 million less.

43

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 compared to its fair value, with an impairment loss recognized if the estimated fair value is below carrying value. Fair values are typically estimated using discounted cash flow techniques. 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).

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 net realizable value. Inventories consist of raw materials and finished goods. 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 and this may require us in some cases to make

44

significant judgements. 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.

During the year ended June 30, 2022, we recognized a write-down of inventory in the amount of $6.4 million which is included in Cost of Revenue in the Consolidated Statement of Operations. The write-down of inventory during the year ended June 30, 2022 was related to certain inventory lots that deteriorated in quality and germination rates during the year, reserves for an estimated amount that is expected to deteriorate in quality and germination during the product life cycle and adjusting specific products to market value.

During the year ended June 30, 2021, we recognized a write-down of inventory in the amount of $1.4 million which is included in Cost of Revenue in the Consolidated Statement of Operations. The write-down of inventory during the year ended June 30, 2021 was primarily related to certain inventory lots that deteriorated in quality and germination rates during the year.

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 7A. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company; we are not required to provide information typically disclosed under this item.

45

Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 173)	47
Consolidated Balance Sheets at June 30, 2022 and 2021	48
Consolidated Statements of Operations for the Fiscal Years Ended June 30, 2022 and 2021	49
Consolidated Statements of Comprehensive Loss for the Fiscal Years Ended June 30, 2022 and 2021	50
Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended June 30, 2022 and 2021	51
Consolidated Statements of Cash Flows for the Fiscal Years Ended June 30, 2022 and 2021	52
Notes to Consolidated Financial Statements	53

46

Report of Independent Registered Public Accounting Firm

Stockholders and the Board of Directors of S&W Seed Company

Longmont, Colorado

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of S&W Seed Company (the "Company") as of June 30, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the two years in the period ended June 30, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company believes it is uncertain it will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet future covenants associated with its credit agreements that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Crowe LLP

We have served as the Company's auditor since 2015.

Sacramento, California

September 28, 2022

47

S&W SEED COMPANY

CONSOLIDATED BALANCE SHEETS

ASSETS	June 30, 2022			June 30, 2021
CURRENT ASSETS
Cash and cash equivalents	$	2,056,508		$	3,527,937
Accounts receivable, net		19,051,236			19,389,213
Inventories, net		54,515,894			63,395,256
Prepaid expenses and other current assets		1,605,987			1,555,530
TOTAL CURRENT ASSETS		77,229,625			87,867,936
Property, plant and equipment, net		16,871,669			17,740,974
Intangibles, net		34,095,827			37,130,942
Goodwill		—			1,651,634
Other assets		5,590,730			7,079,490
TOTAL ASSETS	$	133,787,851		$	151,470,976
LIABILITIES, SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	15,901,116		$	15,947,918
Deferred revenue		605,960			385,328
Accrued expenses and other current liabilities		10,788,740			9,134,869
Current portion of working capital lines of credit, net		12,678,897			33,946,565
Current portion of long-term debt, net		8,316,783			1,681,166
TOTAL CURRENT LIABILITIES		48,291,496			61,095,846
Long-term working capital lines of credit, less current portion		21,703,286			—
Long-term debt, net, less current portion		3,992,540			11,590,500
Contingent consideration obligation		—			741,552
Other non-current liabilities		3,587,041			3,649,885
TOTAL LIABILITIES		77,574,363			77,077,783
SERIES B CONVERTIBLE PREFERRED STOCK
Preferred stock, $0.001 par value; 3,323 shares authorized;    1,695 shares issued and outstanding at June 30, 2022;    none issued and outstanding at June 30, 2021		4,804,819			—
TOTAL SERIES B CONVERTIBLE PREFERRED STOCK		4,804,819			—
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value; 75,000,000 shares authorized;    42,608,758 issued and 42,583,758 outstanding at June 30, 2022;    36,772,983 issued and 36,747,983 outstanding at June 30, 2021		42,609			36,773
Treasury stock, at cost, 25,000 shares		(134,196	)		(134,196	)
Additional paid-in capital		163,892,575			149,684,357
Accumulated deficit		(105,873,557	)		(69,311,909	)
Accumulated other comprehensive loss		(6,560,600	)		(5,850,826	)
Noncontrolling interests		41,838			(31,006	)
TOTAL STOCKHOLDERS' EQUITY		51,408,669			74,393,193
TOTAL LIABILITIES, SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY	$	133,787,851		$	151,470,976

See notes to consolidated financial statements.

48

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended June 30,
	2022			2021
Revenue	$	71,354,298		$	84,049,036
Cost of revenue		64,999,136			70,372,139
Gross profit		6,355,162			13,676,897
Operating expenses
Selling, general and administrative expenses		24,470,730			21,867,529
Research and development expenses		7,710,642			8,515,786
Depreciation and amortization		5,460,321			5,469,581
Gain on disposal of property, plant and equipment		(31,088	)		(1,906,738	)
Goodwill impairment charges		1,548,324			—
Total operating expenses		39,158,929			33,946,158
Loss from operations		(32,803,767	)		(20,269,261	)
Other (income) expense
Foreign currency loss (gain)		777,913			(94,214	)
Change in contingent consideration obligation		(714,429	)		(4,016,904	)
Interest expense - amortization of debt discount		898,497			689,514
Interest expense		2,212,302			2,283,215
Gain on sale of marketable security		(68,967	)		—
Loss before income taxes		(35,909,083	)		(19,130,872	)
Provision for (benefit from) income taxes		413,423			(24,358	)
Net loss	$	(36,322,506	)	$	(19,106,514	)
Net income attributable to noncontrolling interests		72,844			64,453
Net loss attributable to S&W Seed Company	$	(36,395,350	)	$	(19,170,967	)
Calucation of net loss for loss per share:
Net loss attributable to S&W Seed Company	$	(36,395,350	)	$	(19,170,967	)
Dividends accrued for participating securities and accretion		(166,298	)		—
Net loss attributable to common shareholders	$	(36,561,648	)	$	(19,170,967	)
Net loss attributable to S&W Seed Company per common share:
Basic	$	(0.93	)	$	(0.55	)
Diluted	$	(0.93	)	$	(0.55	)
Weighted average number of common shares outstanding:
Basic		39,133,681			34,590,883
Diluted		39,133,681			34,590,883

See notes to consolidated financial statements.

49

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Years Ended June 30,
	2022			2021
Net loss	$	(36,322,506	)	$	(19,106,514	)
Foreign currency translation adjustment, net of income taxes		(709,774	)		260,598
Comprehensive loss		(37,032,280	)		(18,845,916	)
Comprehensive income attributable to noncontrolling interests		72,844			64,453
Comprehensive loss attributable to S&W Seed Company	$	(37,105,124	)	$	(18,910,369	)

See notes to consolidated financial statements.

50

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

	Preferred Stock				Common Stock				Treasury Stock						Additional Paid-In			Accumulated			Noncontrolling			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Interests			Loss			Equity
Balance, June 30, 2020		—	$	—		33,457,861	$	33,458		(25,000	)	$	(134,196	)	$	137,809,540		$	(50,140,942	)	$	(120,459	)	$	(6,111,424	)	$	81,335,977
Stock-based compensation - options, restricted stock, and RSUs		—		—		—		—		—			—			1,766,353			—			—			—			1,766,353
Net issuance to settle RSUs		—		—		307,107		307		—			—			(111,839	)		—			—			—			(111,532	)
Proceeds from sale of common stock, net of fees and expenses		—		—		3,008,015		3,008		—			—			10,220,303			—			—			—			10,223,311
Capital contribution from minority shareholder of subsidiary		—		—		—		—		—			—			—			—			25,000			—			25,000
Other comprehensive income		—		—		—		—		—			—			—			—			—			260,598			260,598
Net (loss) income		—		—		—		—		—			—			—			(19,170,967	)		64,453			—			(19,106,514	)
Balance, June 30, 2021		—	$	—		36,772,983	$	36,773		(25,000	)	$	(134,196	)	$	149,684,357		$	(69,311,909	)	$	(31,006	)	$	(5,850,826	)	$	74,393,193
Stock-based compensation - options, restricted stock, and RSUs		—		—		—		—		—			—			2,267,180			—			—			—			2,267,180
Series B detachable warrant		—		—		—		—		—			—			361,729			(38,757	)		—			—			322,972
Accrued dividends on Series B convertible preferred stock		—		—		—		—		—			—			—			(127,541	)		—			—			(127,541	)
Net issuance to settle RSUs		—		—		333,296		333		—			—			(192,878	)		—			—			—			(192,545	)
Proceeds from sale of common stock, net of fees and expenses		—		—		5,502,479		5,503		—			—			11,772,187			—			—			—			11,777,690
Capital contribution from minority shareholder of subsidiary		—		—		—		—		—			—			—			—			—			—			—
Other comprehensive loss		—		—		—		—		—			—			—			—			—			(709,774	)		(709,774	)
Net (loss) income		—		—		—		—		—			—			—			(36,395,350	)		72,844			—			(36,322,506	)
Balance, June 30, 2022		—	$	—		42,608,758	$	42,609		(25,000	)	$	(134,196	)	$	163,892,575		$	(105,873,557	)	$	41,838		$	(6,560,600	)	$	51,408,669

See notes to consolidated financial statements.

51

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended June 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(36,322,506	)	$	(19,106,514	)
Adjustments to reconcile net loss from operating activities to net
cash used in operating activities:
Stock-based compensation		2,267,180			1,766,353
Change in allowance for doubtful accounts		216,466			(235,201	)
Inventory write-down		6,365,542			1,416,029
Depreciation and amortization		5,460,321			5,469,581
Gain on disposal of property, plant and equipment		(31,088	)		(1,906,738	)
Change in deferred tax provision		78,954			—
Change in foreign exchange contracts		971,386			79,403
Change in contingent consideration obligation		(714,429	)		(4,016,904	)
Amortization of debt discount		898,497			689,514
Changes in:
Accounts receivable		(422,335	)		504,021
Inventories		688,903			648,448
Prepaid expenses and other current assets		(104,442	)		(120,030	)
Other non-current asset		(137,320	)		54,259
Accounts payable		977,036			7,265,195
Deferred revenue		223,586			(5,786,697	)
Accrued expenses and other current liabilities		1,226,353			(964,282	)
Other non-current liabilities		(15,243	)		22,521
Net cash used in operating activities		(18,373,139	)		(14,221,042	)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(2,098,535	)		(1,079,880	)
Proceeds from disposal of property, plant and equipment		200,605			782,645
Net proceeds from sale of marketable securities		988,504			—
Proceeds from sale of assets held for sale		—			2,771,480
Acquisition of germplasm		—			(8,499	)
Net cash (used in) provided by investing activities		(909,426	)		2,465,746
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock		11,777,690			10,223,311
Net proceeds from sale of Series B convertible preferred stock		5,000,250			—
Taxes paid related to net share settlements of stock-based compensation awards		(192,545	)		(111,532	)
Borrowings and repayments on lines of credit, net		1,770,219			4,954,687
Borrowings of long-term debt		868,372			385,636
Capital contribution from minority shareholder of subsidiary		—			25,000
Debt issuance costs		(692,779	)		(196,952	)
Repayments of long-term debt		(1,392,533	)		(4,387,465	)
Net cash provided by financing activities		17,138,674			10,892,685
EFFECT OF EXCHANGE RATE CHANGES ON CASH		672,462			267,454
NET DECREASE IN CASH & CASH EQUIVALENTS		(1,471,429	)		(595,157	)
CASH AND CASH EQUIVALENTS, beginning of the period		3,527,937			4,123,094
CASH AND CASH EQUIVALENTS, end of period	$	2,056,508		$	3,527,937
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	2,357,445		$	2,244,478
Income taxes		276,503			366,502

See notes to consolidated financial statements.

52

S&W SEED COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BACKGROUND AND ORGANIZATION

Organization

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. The Company 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.

In April 2013, the Company, together with its wholly-owned subsidiary, S&W Holdings Australia Pty Ltd, an Australia corporation (f/k/a S&W Seed Australia Pty Ltd), or S&W Holdings, consummated an acquisition of all of the issued and outstanding shares of Seed Genetics International Pty Ltd, an Australia corporation, or SGI, from SGI’s shareholders. In April 2018, SGI changed its name to S&W Seed Company Australia Pty Ltd, or S&W Australia.

In September 2018, the Company and AGT Foods Africa Proprietary Limited, or AGT, formed a venture based in South Africa named SeedVision Proprietary Limited, or SeedVision. SeedVision will leverage AGT's African-based production and processing facilities to produce S&W's hybrid sunflower, grain sorghum, and forage sorghum to be sold by SeedVision in the African continent, Middle East countries, and Europe.

As part of the Company’s 2018 acquisition of all the assets of Chromatin, Inc., the Company acquired 51.0% of Sorghum Solutions South Africa.

In February 2020, S&W Australia acquired all of the issued and outstanding shares of Pasture Genetics Ltd., or Pasture Genetics, from Pasture Genetics’ sole shareholder.

Business Overview

Since its establishment, the Company, including its predecessor entities, has been principally engaged in breeding, growing, processing and selling agricultural seeds. The Company operates seed cleaning and processing facilities, which are located in Idaho, Texas, New South Wales and 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.

The Company had a long-term distribution agreement with Pioneer Hi-Bred International, Inc., or Pioneer (now a subsidiary of Corteva Agriscience, Inc., or Corteva), regarding conventional (non-GMO) varieties, and a production agreement with Pioneer (relating to GMO-traited varieties). These agreements were terminated on May 20, 2019. See Note 4 for further discussion.

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.

53

In October 2018, the Company acquired substantially all of the assets of Chromatin, Inc., a U.S.-based sorghum genetics and seed company, as part of the Company's efforts to expand its penetration into the hybrid sorghum market.

In August 2019, S&W Australia, a wholly owned subsidiary of S&W Seed Company, licensed certain wheat germplasm varieties and acquired certain equipment from affiliates of Corteva.  In the transaction, S&W Australia paid a one-time license fee of $2.3 million and an equipment purchase price of $0.3 million.  The license has an initial term of 15 years.

In February 2020, S&W Australia acquired Pasture Genetics, the third largest pasture seed company in Australia, as part of the Company’s efforts to diversify its product offerings and expand its distribution channels.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of S&W Seed Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, or GAAP, and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company's exercises control. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

The Company owns 50.1% of SeedVision, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and SeedVision is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of SeedVision because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of SeedVision, which are considered to be the activities that have the greatest impact on the future economic performance of SeedVision.

The Company owns 51.0% of Sorghum Solutions South Africa, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and Sorghum Solutions South Africa is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of Sorghum Solutions South Africa because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of Sorghum Solutions South Africa, which are considered to be the activities that have the greatest impact on the future economic performance of Sorghum Solutions South Africa.

Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. The Company recorded a combined $0.5 million of current assets (restricted) and $31,307 of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2022.

The Company recorded a combined $0.6 million of current assets (restricted) and $0.1 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2021.   

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, 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.

54

The COVID-19 pandemic and the efforts to contain it have, among other things, negatively impacted the global economy and created significant volatility and disruption of financial markets. In addition, the COVID-19 pandemic has significantly increased economic and demand uncertainty. The Company believes the estimates and assumptions underlying the accompanying consolidated financial statements are reasonable and supportable based on the information available at the time the financial statements were prepared.

However, uncertainty over the impact COVID-19 will have on the global economy and the Company’s business in particular makes many of the estimates and assumptions reflected in these consolidated financial statements inherently less certain. Therefore, actual results may ultimately differ from those estimates to a greater degree than historically.

Certain Risks and Concentrations

The Company’s revenue is principally derived from the sale of seed, the market for which is highly competitive. The Company depends on a core group of significant customers. No single customer accounted for more than 10% of revenue for the year ended June 30, 2022. One customer accounted for 19% of its revenue for the year ended June 30, 2021.

No customer accounted for more than 10% of the Company’s accounts receivable at June 30, 2022. One customer accounted for 11% of the Company’s accounts receivable at June 30, 2021.

The Company sells a substantial portion of its products to international customers. Sales to international markets represented 70% and 56% of revenue during the years ended June 30, 2022 and 2021, respectively. The net book value of fixed assets located outside the United States was 22% and 19% of total fixed assets at June 30, 2022 and June 30, 2021, respectively. Cash balances located outside of the United States may not be insured and totaled $811,551 and $204,813 at June 30, 2022 and June 30, 2021, respectively.

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

	Years Ended June 30,
	2022				2021
Australia	$	21,721,727	30	%	$	21,470,810	26	%
United States		21,053,335	30	%		37,124,047	44	%
Saudi Arabia		9,510,809	13	%		5,911,498	7	%
Pakistan		3,309,800	5	%		2,041,548	2	%
China		2,565,668	4	%		2,042,585	2	%
South Africa		1,946,153	3	%		2,456,216	3	%
Libya		1,739,105	2	%		1,249,554	2	%
Argentina		1,543,474	2	%		1,838,648	2	%
Sudan		1,443,748	2	%		1,218,168	1	%
Egypt		960,114	1	%		818,101	1	%
Other		5,560,365	8	%		7,877,861	10	%
Total revenue	$	71,354,298	100	%	$	84,049,036	100	%

Liquidity and COVID-19 Pandemic

The Company is monitoring the impact of the COVID-19 pandemic and the ongoing military conflict between Russia and Ukraine on its business, including its results of operations and financial condition, and has implemented measures designed to protect the health and safety of its employees while continuing its operations.  

The Company’s sales efforts historically involved significant in-person interaction with potential customers and distributors. Throughout the COVID-19 pandemic, many national, state and local governments in its target markets implemented various stay-at-home, shelter-in-place and other quarantine measures. As a result, the Company shifted its sales activities to video conferencing and similar customer interaction models and continues to evaluate its sales approach, but the Company found these alternative approaches to generally be less effective than in-person sales efforts. In particular, regular in-person customer interactions did not resume until February 2022 in some locations where the Company operates. If ongoing measures to protect against COVID-19 remain in effect throughout the

55

2023 sales season, the Company may experience similar negative impacts that it experienced during the 2021 and 2022 sales seasons.

In addition, the Company’s product revenue is predicated on its ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in the Company’s distribution and supply channels. If the Company’s customers delay or decrease their orders due to potential disruptions in its distribution and supply channels, or if the Company is unable to timely fulfill their orders, this would adversely affect the Company’s product revenue.

During the year ended June 30, 2022, the Company experienced numerous logistical challenges due to limited availability of trucks for product deliveries, congestion at the ports, and overall increases in shipping and transportation costs.  The Company expects these logistical challenges to persist well into fiscal 2023, which may, among other things, delay or reduce its ability to recognize revenue within a particular fiscal period and harm its results of operations.

Given the level of uncertainty regarding the duration and broader impact of the COVID-19 pandemic, the Company is unable to fully assess the extent of its impact on the Company’s operations.

For the year ended June 30, 2022, we reported a net loss of $36.3 million and net cash used in operations of $18.4 million. At June 30, 2022, we had cash on hand of $2.1 million.

The Company’s loan and security agreement with CIBC Bank USA, or CIBC, and the Company’s secured promissory note with Conterra Agriculture Capital, LLC, or Conterra, which mature on December 23, 2022, contain various operating and financial covenants (See Note 8). The COVID-19 pandemic and other factors affecting the Company’s results of operations have increased the risk of the Company’s inability to comply with these covenants, which could result in acceleration of its repayment obligations and foreclosure on its pledged assets. For example, the Company was not in compliance with certain of these covenants as of June 30, 2021, December 31, 2021, March 31, 2022, June 15, 2022 and June 30, 2022, and was required to obtain waivers and/or amendments from CIBC and Conterra. In particular, the CIBC loan agreement as presently in effect requires the Company to maintain minimum liquidity of no less than $1,000,000. The Company does not currently expect it will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet these covenants in certain periods prior to maturity. The Company will need to either raise additional capital, secure future waivers and/or amendments from its lenders, obtain financing from new lenders, and/or accomplish some combination of these items to maintain sufficient liquidity. The Company is actively pursuing refinancing of the CIBC debt facility. There can be no assurance the Company will be successful in raising additional capital, securing future waivers and/or amendments from its lenders, renewing or refinancing its existing debt or securing new financing. If the Company is unsuccessful in doing so, it may need to reduce the scope of its operations, repay amounts owing to its lenders or sell certain assets. These operating and liquidity factors raise substantial doubt regarding the Company’s ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.  

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 (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

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.

56

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 $233,927 and $57,782 at June 30, 2022 and June 30, 2021, respectively.

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or net realizable value, 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.

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. Inventory quality is a function of germination percentage.  Our experience has shown that our alfalfa seed quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed as a material concern.  Hybrid crops (sorghum and sunflower) seed quality may be affected by warehouse storage pests such as insects and rodents.  The Company maintains a strict pest control program to mitigate risk and maximize hybrid seed quality.

Components of inventory are:

	June 30, 2022		June 30, 2021
Raw materials and supplies	$	2,645,764	$	2,722,832
Work in progress		6,677,980		6,662,006
Finished goods		45,192,150		54,010,418
Inventories, net	$	54,515,894	$	63,395,256

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 5-35 years for buildings, 2-20 years for machinery and equipment, and 2-5 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 3-30 years for technology/IP/germplasm, 5-20 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, 20 years for customer relationships, 16 years for trade names, 18 years for license agreements and 19 years for other intangible assets.

57

Goodwill

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  

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 or market capitalization of our common stock, 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 is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value is less than its carrying amount, management conducts a quantitative goodwill impairment test. The goodwill impairment test is used to identify potential impairment by comparing the fair value with its carrying amount, including goodwill. The Company uses market capitalization and an estimate of a control premium to estimate the fair value. If the estimated fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its estimated fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company performed a quantitative assessment of goodwill at June 30, 2022 on its one reporting unit and determined that goodwill was fully impaired. See Note 6 for further information.

The Company performed a quantitative assessment of goodwill at June 30, 2021 on its one reporting unit and determined that goodwill was not impaired.

Investment in Bioceres S.A.

The Company owns less than 1% of Bioceres, S.A., a provider of crop productivity solutions headquartered in Argentina.  The carrying value of the investment is $0.4 million at June 30, 2022 and $1.3 million at June 30, 2021, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted Accounting Standards Update, or ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities beginning July 1, 2018.  As such, this investment is accounted for in accordance with ASC 321, Investments – Equity Securities. As the stock is not publicly traded, the Company has elected to account for its investment at cost, with adjustments to fair value when there are observable transactions that provide an indicator of fair value.  In addition, if qualitative factors indicate a potential impairment, fair value must be estimated and the investment written down to that fair value if it is lower than the carrying value.

During the year ended June 30, 2022, the Company sold 71.4% of the investment in Bioceres, S.A. for net proceeds of $988,504, which included a gain on sale of marketable securities of $68,967.

No adjustments for impairment were made in fiscal years 2022 or 2021.  

Research and Development Costs

The Company is engaged in ongoing research and development, or 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 years ended June 30, 2022 and 2021 has been affected by the valuation allowance on the Company’s deferred tax assets.

58

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share, or 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 and restricted stock awards. 

The treasury stock method is used for 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 net number of shares assumed to be issued added to the denominator.

The Company computes earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. The Series B Redeemable Convertible Non-Voting Preferred Stock, par value $0.001 per share, or the Series B Preferred Stock, and warrant are participating securities because holders of such shares have non-forfeitable dividend rights and participate in any undistributed earnings with common stock. Under the two-class method, total dividends provided to the holders of participating securities and undistributed earnings allocated to participating securities, are subtracted from net income attributable to the Company in determining net loss attributable to common shareholders. During the year ended June 30, 2022, there were $127,541 in accrued dividends subtracted from net income attributable to common shareholders; there were no undistributed earnings to allocate to the participating securities. Additionally, any accretion to the redemption value for the Series B Preferred Stock is treated as a deemed dividend in the two-class EPS calculation. During the year ended June 30, 2022, $38,757 was accreted to the redemption value of the Series B Preferred Stock and subtracted from net income attributable to common shareholders.

The calculation of Basic and Diluted EPS is shown in the table below. 

	Years Ended June 30,
	2022			2021
Numerator:
Net loss attributable to S&W Seed Company	$	(36,395,350	)	$	(19,170,967	)
Dividends accrued for participating securities and accretion		(166,298	)		—
Numerator for basic and diluted EPS	$	(36,561,648	)	$	(19,170,967	)
Denominator:
Denominator for basic EPS - weighted average    shares		39,133,681			34,590,883
Effect of dilutive securities:
Employee stock options		—			—
Employee restricted stock units		—			—
Dilutive potential common shares		—			—
Denominator for diluted EPS - adjusted weighted    average shares and assumed conversions		39,133,681			34,590,883
Basic EPS	$	(0.93	)	$	(0.55	)
Diluted EPS	$	(0.93	)	$	(0.55	)

The effects of employee stock options and restricted stock units are excluded because they would be anti-dilutive due to the Company’s net loss for the years ended June 30, 2022 and 2021.  

59

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. Refer to Note 6 for impairment discussion.

Derivative Financial Instruments

Foreign Exchange Contracts

The Company’s subsidiary, S&W Australia, 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.

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.

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.

60

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

	Fair Value Measurements as of June 30, 2022 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	996,106	$	—
Contingent consideration obligations		—		—		—
Total	$	—	$	996,106	$	—

	Fair Value Measurements as of June 30, 2021 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	96,466	$	—
Contingent consideration obligations		—		—		741,552
Total	$	—	$	96,466	$	741,552

Recently Adopted Accounting Pronouncements

The Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes effective July 1, 2021. This ASU is intended to simplify various aspects to accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The adoption of this ASU had no impact on the Company’s consolidated financial statements and related disclosures.

The Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity effective July 1, 2021. This ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt–Debt with Conversion and other Options, for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. This will also result in the interest expense recognized for convertible debt instruments to be typically closer to the coupon interest rate when applying the guidance in Topic 835, Interest. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible debt instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted for periods beginning after December 15, 2020. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. At the time of adoption, we had no outstanding convertible instruments and no adjustments were recognized to our July 1, 2021 accumulated deficit. The adoption of this ASU had no impact on the Company’s consolidated financial statements and related disclosures.

61

NOTE 3 - LEASES

S&W leases office and laboratory space, field research plots and equipment used in connection with its operations under various operating and finance leases.

Right-of-use, or ROU, assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the net present value of the Company’s obligation to make payments arising from these leases. The lease liabilities are based on the present value of fixed lease payments over the lease term using the implicit lease interest rate or, when unknown, the Company's incremental borrowing rate on the lease commencement date or July 1, 2019 for leases that commenced prior to that date. If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the option(s). Operating lease expense is recognized on a straight-line basis over the term of the lease. As permitted by ASC 842, leases with an initial term of twelve months or less, or short-term leases, are not recorded on the accompanying consolidated balance sheet.

The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component under the practical expedient provisions of the standard. The Company has lease agreements with terms less than one year. For the qualifying short-term leases, the Company elected the short-term lease recognition exemption in which the Company will not recognize ROU assets or lease liabilities, including the ROU assets or lease liabilities for existing short-term leases of those assets upon adoption.

Variable lease payments consist primarily of common area maintenance, utilities and taxes, which are not included in the recognition of ROU assets and related lease liabilities.  Variable lease payments and short-term lease expenses were immaterial to the Company’s financial statements for the year ended June 30, 2022. The Company’s lease agreements do not contain material restrictive covenants.

The components of lease assets and liabilities are as follows:

Leases	Balance Sheet Classification:	June 30, 2022
Assets:
Right of use assets - operating leases	Other assets	$	4,094,253
Right of use assets - finance leases	Other assets		2,071,609
Accumulated amortization - finance leases	Other assets		(1,131,842	)
Right of use assets - finance leases, net	Other assets		939,767
Total lease assets		$	5,034,020
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net	$	804,309
Current lease liabilities	Accrued expenses and other current liabilities		1,341,198
Long-term debt, net, less current portion	Long-term debt, net, less current portion		500,723
Long-term lease liabilities	Other non-current liabilities		3,042,311
Total lease liabilities		$	5,688,541

62

The components of lease cost are as follows:

Lease cost:	Income Statement Classification:	Year Ended June 30, 2022
Operating lease cost	Cost of revenue	$	692,210
Operating lease cost	Selling, general and administrative expenses		307,368
Operating lease cost	Research and development expenses		375,905
Finance lease cost	Depreciation and amortization and Interest expense		715,202
Total lease costs		$	2,090,685

Maturities of lease liabilities as of June 30, 2022 are as follows:

	Operating Leases			Finance Leases
2023	$	1,478,640		$	636,178
2024		1,243,871			472,039
2025		861,779			305,293
2026		687,202			58,721
2027		402,439			7,312
After 2027		77,558			—
Total lease payments		4,751,489			1,479,543
Less: Interest		(367,980	)		(174,512	)
Present value of lease liabilities	$	4,383,509		$	1,305,031

The following are the weighted average assumptions used for lease term and discount rate and supplemental cash flow information related to leases as of June 30, 2022:

Operating lease remaining lease term	4.0 years
Operating lease discount rate		4.29	%
Finance lease remaining lease term	1.3 years
Finance lease discount rate		5.50	%
Cash paid for operating leases	$	1,481,024
Cash paid for finance leases		1,088,090

NOTE 4 – PIONEER RELATIONSHIP

Distribution and Production Agreements with Pioneer

In 2014, the Company purchased from Pioneer certain assets related to alfalfa and entered into a long-term contract to sell alfalfa seed to Pioneer under a production agreement (GMO varieties) and a distribution agreement (conventional varieties). Under the production and distribution agreements with Pioneer, the Company grew, processed, and delivered alfalfa seed for and to Pioneer.  See Note 5 for a discussion of the recognition of revenue under these agreements.  

On May 22, 2019, the Company and Pioneer terminated the production and distribution agreements.  As part of the termination, Pioneer’s parent company, Corteva, agreed to purchase from the Company certain quantities of seed held by the Company as of that date that Pioneer was not previously obligated to purchase. Those quantities of seed were delivered to Corteva periodically through March 2021.  

The Company does not expect to sell any other products to Pioneer or Corteva beyond those quantities of seed.  

63

License Agreement with Corteva

Contemporaneously with the termination, the Company entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of the Company's alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the Company's existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties. The Company also assigned to Corteva grower production contract rights, and Corteva assumed grower production contract obligations, related to the licensed and certain other alfalfa varieties.  Corteva received no license to the Company's other commercial alfalfa varieties or pre-commercial alfalfa pipeline products and no rights to any future products developed by the Company.

Payments Due from Corteva and Pioneer

The Company received a payment of approximately $8.3 million in fiscal 2021 from Pioneer/Corteva.

This amount was recognized as revenue as the seed was delivered to Corteva through March 2021.  The amount allocated to the seed represents the estimated standalone selling price of those quantities of seed, determined based on the Company’s normal profit margin on the quantities and varieties of seed that Corteva agreed to purchase.

NOTE 5 - REVENUE RECOGNITION

The Company derives its revenue from 1) the sale of seed, 2) milling and packaging services, 3) research and development services and 4) product licensing agreements.

The following table disaggregates the Company's revenue by type of contract:

	Years Ended June 30,
	2022		2021
Pioneer product sales	$	—	$	14,198,857
Other product sales		69,425,407		67,234,359
Services		1,928,891		2,615,820
Total revenue	$	71,354,298	$	84,049,036

Pioneer Product Sales

For the year ended June 30, 2021, Pioneer product sales consisted of product shipments to Pioneer under the termination agreement discussed in Note 4.

Other Product Sales

Revenue from other product sales is recognized at the point in time at which control of the product is transferred to the customer. Generally, this occurs upon shipment of the product. Pricing for such transactions is negotiated and determined at the time the contracts are signed. We have elected the practical expedient that allows us to account for shipping and handling activities as a fulfillment cost, and we accrue those costs when the related revenue is recognized.

The Company has certain contracts with customers that offer a limited right of return on certain branded products. The products must be in an unopened and undamaged state and must be resalable in the sole opinion of the Company to qualify for refund.  Returns are only accepted on product received by August 31^st of the current sales year.  The Company uses a historical returns percentage to estimate the refund liability and records a reduction of revenue in the period in which revenue is recognized.

Services

Revenue from milling services, conditioning, treating and packaging services, which are performed on the customer's product, is recognized as services are completed and the milled product is delivered to the customer.

Revenue from research and development services is recognized over time as the services are performed.

64

Payment Terms and Related Balance Sheet Accounts

Accounts receivable represent amounts that are payable to the Company by its customers subject only to the passage of time. Payment terms on invoices are generally 30 to 180 days for export customers and end of sales season (October 31^st) for branded products sold within the United States. As the period between the transfer of goods and/or services to the customer and receipt of payment is less than one year, the Company does not separately account for a financing component in its contracts with customers.

Unbilled receivables represent contract assets that arise when the Company has partially performed under a contract but is not yet able to invoice the customer until the Company has made additional progress. Unbilled receivables arose from the distribution and production agreements with Pioneer for which the Company recognized revenue over time, as the Company bills for these arrangements upon product delivery, while revenue was recognized, as described above, as costs were incurred. Unbilled receivables may arise as much as three months before billing is expected to occur. Unbilled receivables are generally expected to be generated in the first and second fiscal quarters, and to be billed in the second, third and fourth fiscal quarters.

Losses on accounts receivable and unbilled receivables are recognized if and when it becomes probable that amounts will not be paid. These losses are reversed in subsequent periods if these amounts are paid. During the period ended June 30, 2022, the Company recognized bad debt expense of $216,466 associated with impaired accounts receivable.  During the year ended June 30, 2021, the Company recognized a net gain from collections on amounts previously written off to bad debt expense of $235,201.  

Deferred revenue represents payments received from customers in advance of completion of the Company's performance obligation.  During the year ended June 30, 2022, the Company recognized $0.3 million of revenue that was included in the deferred balance as of June 30, 2021. During the year ended June 30, 2021, the Company recognized $6.2 million of revenue that was included in the deferred balance as of June 30, 2020.

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  

During the fourth quarter of the fiscal year ended June 30, 2022, the Company had a sustained decline in market valuation of its common stock, thereby triggering a potential indicator of goodwill impairment. As a result, the Company initiated a goodwill impairment test for the year ended June 30, 2022.

The Company compared the carrying value of its invested capital to estimated fair values at June 30, 2022. The Company estimated the fair value using the market approach and a control premium (based on management’s best estimate) was added.

Upon completing the impairment test, the Company determined that the estimated fair value of invested capital was less than the carrying value by approximately 3%, thus indicating an impairment. The Company recognized a goodwill impairment charge of $1.5 million for the year ended June 30, 2022, which represented the entire goodwill balance prior to the impairment charge.

The following table summarizes the activity of goodwill for the years ended June 30, 2022 and 2021, respectively:

	Balance at July 1, 2021		Additions		Impairment			Currency Translation Adjustment			Balance at June 30, 2022
Goodwill	$	1,651,634	$	—	$	(1,548,324	)	$	(103,310	)	$	—

	Balance at July 1, 2020		Additions		Impairment		Currency Translation Adjustment		Balance at June 30, 2021
Goodwill	$	1,508,675	$	—	$	—	$	142,959	$	1,651,634

65

For the years ended June 30, 2022 and 2021, the Company determined there was no impairment on its intangible assets.

Intangible assets consist of the following:

	Balance at July 1, 2021		Additions		Amortization			Currency Translation Adjustment			Balance at June 30, 2022
Trade name	$	1,310,489	$	—	$	(203,009	)	$	(22,689	)	$	1,084,791
Customer relationships		6,302,591		—		(373,393	)		(429,383	)		5,499,815
Non-compete		5,058		—		(5,058	)		—			—
GI customer list		50,146		—		(7,163	)		—			42,983
Supply agreement		850,874		—		(75,633	)		—			775,241
Grower relationships		1,436,988		—		(105,407	)		—			1,331,581
Intellectual property		24,427,857		—		(1,391,932	)		—			23,035,925
In process research and development		—		—		—			—			—
License agreement		2,340,269		—		(172,004	)		(181,667	)		1,986,598
Internal use software		406,670		—		(67,777	)		—			338,893
	$	37,130,942	$	—	$	(2,401,376	)	$	(633,739	)	$	34,095,827

	Balance at July 1, 2020		Additions			Amortization			Currency Translation Adjustment		Balance at June 30, 2021
Trade name	$	1,479,278	$	—		$	(206,311	)	$	37,522	$	1,310,489
Customer relationships		6,187,086		—			(376,431	)		491,936		6,302,591
Non-compete		21,312		—			(16,254	)		—		5,058
GI customer list		57,310		—			(7,164	)		—		50,146
Supply agreement		926,507		—			(75,633	)		—		850,874
Grower relationships		1,542,393		—			(105,405	)		—		1,436,988
Intellectual property		25,415,665		388,499			(1,376,307	)		—		24,427,857
In process research and development		380,000		(380,000	)		—			—		—
License agreement		2,300,059		—			(176,646	)		216,856		2,340,269
Internal use software		474,448		—			(67,778	)		—		406,670
	$	38,784,058	$	8,499		$	(2,407,929	)	$	746,314	$	37,130,942

Amortization expense totaled $2,401,376 and $2,407,929 for the years ended June 30, 2022 and 2021, respectively.

Estimated aggregate remaining amortization is as follows:

	2023		2024		2025		2026		2027		Thereafter
Amortization expense	$	2,395,678	$	2,372,718	$	2,338,707	$	2,252,740	$	2,201,856	$	22,534,128

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

	June 30, 2022			June 30, 2021
Land and improvements	$	2,265,087		$	2,297,529
Buildings and improvements		8,119,960			8,196,593
Machinery and equipment		14,972,462			13,935,053
Vehicles		1,085,342			1,046,937
Leasehold improvements		552,810			552,810
Construction in progress		110,107			48,480
Total property, plant and equipment		27,105,768			26,077,402
Less: accumulated depreciation		(10,234,099	)		(8,336,428	)
Property, plant and equipment, net	$	16,871,669		$	17,740,974

Depreciation expense totaled $2,433,319 and $2,518,356 for the years ended June 30, 2022 and 2021, respectively.

66

NOTE 8 - DEBT

Total debt outstanding is presented on the consolidated balance sheet as follows:

	June 30, 2022			June 30, 2021
Current portion of working capital lines of credit
CIBC	$	12,804,611		$	14,500,000
National Australia Bank Limited		338,314			19,494,800
National Australia Bank Limited Overdraft Facility		—			617,471
Debt issuance costs		(464,028	)		(665,706	)
Total current portion of working capital lines of credit, net		12,678,897			33,946,565
Long-term portion of working capital lines of credit, less current portion
National Australia Bank Limited		21,703,286			—
Total long-term portion of working capital lines of credit		21,703,286			—
Total working capital lines of credit, net	$	34,382,183		$	33,946,565
Current portion of long-term debt
Finance leases	$	804,309		$	909,413
Debt issuance costs		(1,828	)		(5,077	)
Term Loan - National Australia    Bank Limited		344,400			374,900
Machinery & equipment loans -    National Australia Bank Limited		246,547			160,632
Machinery & equipment loans - Hyster		11,834			5,170
Vehicle loans - Ford Credit		40,341			—
Secured real estate note - Conterra		6,905,995			275,684
Debt issuance costs		(34,815	)		(39,556	)
Total current portion, net		8,316,783			1,681,166
Long-term debt, less current portion
Finance leases		500,723			1,108,709
Debt issuance costs		(21	)		(1,847	)
Term loan - National Australia    Bank Limited		2,410,800			2,999,200
Machinery & equipment loans -    National Australia Bank Limited		963,733			508,641
Machinery & equipment loans - Hyster		28,722			17,923
Vehicle loans - Ford Credit		88,583			—
Secured real estate note - Conterra		—			6,974,356
Debt issuance costs		—			(16,482	)
Total long-term portion, net		3,992,540			11,590,500
Total debt, net	$	12,309,323		$	13,271,666

67

On December 26, 2019, the Company entered into a Loan and Security Agreement, or the Loan Agreement, with CIBC Bank USA, or CIBC, which originally provided for a $35.0 million credit facility, or the CIBC Credit Facility.  The Loan Agreement was subsequently amended on September 22, 2020 December 30, 2020, May 12, 2021, September 27, 2021, May 13, 2022 and September 22, 2022. As amended, the Loan Agreement provides for a $18.0 million credit facility. The following is a summary of certain terms of the CIBC Credit Facility:

• Advances under the CIBC Credit Facility are to be used: (i) to finance the Company’s ongoing working capital requirements; and (ii) for general corporate purposes.

• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the CIBC Credit Facility, will be payable in full on December 23, 2022.

• The CIBC Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable (90% of eligible foreign accounts receivable) plus up to the lesser of (i) 65% of eligible inventory, (ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) an eligible inventory sublimit as more fully set forth in the Loan Agreement, in each case, subject to lender reserves.

• Loans are based on (i) a Base Rate plus 2.0% per annum. In the event of a default, at the option of CIBC, the interest rate on all obligations owing will increase by 2% per annum over the rate otherwise applicable.

• The CIBC Credit Facility is secured by a first priority perfected security interest in substantially all of the Borrowers’ assets (subject to certain exceptions), including intellectual property.

• The Loan Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default that permit CIBC to accelerate the Company’s outstanding obligations under the CIBC Credit Facility, all as set forth in the Loan Agreement and related documents. The CIBC Credit Facility also contains customary and usual financial covenants imposed by CIBC.

Pursuant to the September 22, 2022 amendment, among other things, (i) the total revolving commitment provided under the Loan Agreement has been reduced to $18.0 million from $20.0 million; (ii) CIBC waived noncompliance with the Company’s minimum liquidity requirements as of June 15, 2022; (iii) the minimum liquidity financial covenant has been adjusted to require weekly testing that the Company maintain no less than $1.0 million of Liquidity (as defined in the Loan Agreement). After giving effect to the May 2022 amendment, the Company was not in compliance with the Loan Agreement for the year ended June 30, 2022 and obtained a waiver from CIBC to continue to be in compliance with the financial covenants under the Loan Agreement.

As of June 30, 2022, there was approximately $1.9 million of unused availability on the CIBC Credit Facility.

In November 2017, the Company entered into a secured note financing transaction, or the Loan Transaction, with Conterra Agricultural Capital, LLC, or Conterra, for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, the Company issued a secured real estate note to Conterra in the principal amount of $10.4 million, which bears interest at 7.75% per annum and is secured by a first priority security interest in the property, plant and fixtures located at the Company's Nampa, Idaho production facilities and its Nampa, Idaho research facilities. In January 2021, the Company completed the sale of its Five Points facility which resulted in the Company making a one-time principal pay-down of $1,706,845 on the secured real estate note. The final semi-annual principal and interest payment of $454,185 was made on July 1, 2022. On September 22, 2022, the Company entered into an amendment to extend the note’s maturity date to December 23, 2022. The Company is required to make a one-time final payment of approximately $6,969,668 on December 23, 2022. The Company was not in compliance with the total debt coverage ratio as of June 30, 2022; Conterra provided a waiver.

On August 15, 2018, the Company completed a sale and leaseback transaction with American AgCredit involving certain equipment located at the Company's Five Points, California and Nampa, Idaho production facilities. Due to its terms, the sale and leaseback transaction was required to be accounted for as a financing arrangement. Accordingly, the proceeds received from American AgCredit were accounted for as proceeds from a debt financing. Under the terms of the transaction:

• The Company sold the equipment to American AgCredit for $2,106,395 million in proceeds. The proceeds were used to pay off in full a note (in the principal amount of $2,081,527, plus accrued interest of $24,868) held by Conterra Agricultural Capital, LLC, which had an interest rate of 9.5% per annum and was secured by, among other things, the equipment.

• The Company entered into a lease agreement with American AgCredit relating to the equipment. The lease agreement has a five-year term and provides for monthly lease payments of $40,023 (representing an

68

annual interest rate of 5.6%). At the end of the lease term, the Company will repurchase the equipment for $1. During January 2021, the Company completed the sale of its Five Points facility which triggered the Company making a one-time principal pay down of $294,163 on the finance lease agreement.

Australian Facilities

At June 30, 2022, S&W Australia has debt facilities with National Australia Bank, or NAB, all of which are guaranteed by S&W Seed Company up to a maximum of AUD $15,000,000 (USD $10,332,000).

On November 11, 2021, S&W Australia amended its debt facilities with NAB pursuant to which:

• the borrowing base line credit limit under the seasonal credit facility increased from AUD $26,000,000 (USD $18,722,600 at September 30, 2021), to AUD $32,000,000 (USD $22,041,600 at June 30, 2022);

• the overdraft credit limit under the seasonal credit facility, or Overdraft Facility, decreased from AUD $3,000,000 (USD $2,160,300 at September 30, 2021) to AUD $2,000,000 (USD $1,497,400 at March 31, 2022). It then further decreased to AUD $1,000,000 (USD $748,700 on April 1, 2022). According to the agreement, the overdraft credit limit was to decrease to zero at June 30, 2022; but with NAB’s approval of the temporary extension of the Overdraft Facility, the credit limit remains AUD $1,000,000 (USD $688,800) at June 30, 2022;

• the credit limit under the master asset finance facility increased from AUD $2,000,000 (USD $1,440,200 at September 30, 2021) to AUD $3,000,000 (USD $2,066,400 at June 30, 2022); and

• the month in which annual principal repayments are required on the flexible rate loan was adjusted from November to May of each fiscal year.

After the amendment, the consolidated debt facilities with NAB provide for up to an aggregate of AUD $40,000,000 (USD $27,552,000) of credit as of June 30, 2022, and include the following:

• S&W Australia finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility comprised of two facility lines: (i) an Overdraft Facility having a credit limit of AUD $1,000,000 (USD $688,800 at June 30, 2022) and (ii) a Borrowing Base Line having a credit limit of AUD $32,000,000 (USD $22,041,600 at June 30, 2022). As of June 30, 2022, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 4.90% per annum calculated daily. The Overdraft Facility permits S&W Australia 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 June 30, 2022, the Overdraft Facility accrued interest at approximately 5.72% per annum calculated daily. As of June 30, 2022, AUD $32,000,000 (USD $22,041,600) was outstanding under S&W Australia’s seasonal credit facility with NAB.  The seasonal credit facility is secured by a fixed and floating lien over all the present and future rights, property, and undertakings of S&W Australia.       

• S&W Australia has a flexible rate loan, or the Term Loan, in the amount of AUD $4,000,000 (USD $2,755,200 at June 30, 2022). Required annual principal payments of AUD $500,000 on the Term Loan commenced on November 30, 2020, with the remainder of any unpaid balance becoming due on March 31, 2025. As part of the amendment, the November 2021 repayment was deferred to May 2022, with AUD $500,000 (USD $344,400) being paid and the remaining payments due in May of each year. Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%.  The Term Loan is secured by a lien on all the present and future rights, property and undertakings of S&W Australia.

• S&W Australia finances certain equipment purchases under a master asset finance facility with NAB.  The master asset finance facility has various maturity dates through 2029 and have interest rates ranging from 2.86% to 5.03%.  The credit limit under the facility is AUD $3,000,000 (USD $2,066,400) at June 30, 2022.  As of June 30, 2022, AUD $1,757,085 (USD $1,210,280) was outstanding under S&W Australia’s master asset finance facility.

S&W Australia was in compliance with all debt covenants under its debt facilities with NAB at June 30, 2022.

69

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

Fiscal Year	Amount
2023	$	8,353,426
2024		1,050,062
2025		2,399,706
2026		278,595
2027		264,198
Thereafter		—
Total	$	12,345,987

NOTE 9 - INCOME TAXES

Loss before income taxes consists of the following:

	Years Ended June 30,
	2022			2021
United States	$	(37,346,576	)	$	(22,519,842	)
Foreign		1,437,493			3,388,970
Loss before income taxes	$	(35,909,083	)	$	(19,130,872	)

Significant components of the provision for income taxes from continuing operations are as follows:

	Years Ended June 30,
	2022			2021
Current:
Federal	$	—		$	—
State		301			(5,385	)
Foreign		266,129			(197,163	)
Total current provision		266,430			(202,548	)
Deferred:
Federal		(1	)		—
State		—			—
Foreign		146,994			178,190
Total deferred provision		146,993			178,190
Provision for (benefit from) income taxes	$	413,423		$	(24,358	)

The differences between the total calculated income tax provision and the expected income tax computed using the U.S. federal income tax rate are as follows:

	Years Ended June 30,
	2022			2021
Tax benefit at statutory tax rate	$	(7,540,908	)	$	(4,018,362	)
State benefit, net of federal benefit		(493,262	)		(417,868	)
Federal and state research credits - current year		(390,235	)		(675,527	)
Other permanent differences		184,725			(110,860	)
Foreign rate differential		420,829			431,265
Goodwill impairment		549,577			—
Valuation allowance		7,573,300			5,178,300
Tax law changes		—			(411,306	)
Other		109,397			—
Provision for (benefit from) income taxes	$	413,423		$	(24,358	)

70

Significant components of the Company's deferred tax assets and liabilities are as follows:

	June 30, 2022			June 30, 2021
Deferred tax assets:
Net operating loss carry forwards	$	22,815,372		$	15,623,619
Tax credit carry forwards		1,388,106			1,169,978
Allowance for bad debts		1,216,187			1,378,422
Lease liability		1,187,090			1,209,560
Other, net		3,116,913			3,214,948
Total deferred tax assets		29,723,668			22,596,527
Valuation allowance for deferred tax assets		(27,437,845	)		(19,892,644	)
Deferred tax assets, net of valuation allowance		2,285,823			2,703,883
Deferred tax liabilities:
ROU lease asset		(1,226,879	)		(1,293,365	)
Fixed assets		(1,382,821	)		(1,588,708	)
Total deferred tax liabilities		(2,609,700	)		(2,882,073	)
Net deferred tax asset (liability)	$	(323,877	)	$	(178,190	)

The Company recognizes federal and state current tax liabilities or assets based on its estimate of taxes payable to or refundable from tax authorities in the current fiscal year.  The Company also recognizes federal and state deferred tax liabilities or assets based on the Company’s estimate of future tax effects attributable to temporary differences and carryforwards.  The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future taxable income and planning strategies in making this assessment. Based on projections of taxable income, the Company had previously determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, a full valuation allowance was recorded as of June 30, 2017.  The Company’s valuation allowance position has not changed for the years ended June 30, 2022 and June 30, 2021, respectively, as the Company does not believe that it is more likely than not that it will realize its deferred tax assets.  The valuation allowance increased by approximately $7.5 million for the year ended June 30, 2022, related primarily to losses generated in the current year.

The U.S. Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on a corporation's ability to utilize net operating loss carryovers, or NOLs, if it experiences an ownership change as defined in Section 382.  In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50% over a three-year period.  In the event that an ownership change has occurred, or were to occur, utilization of the Company’s NOLs would be subject to an annual limitation under Section 382 as determined by multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate as defined in the Internal Revenue Code.  Any unused annual limitation may be carried over to later years.  The Company could experience an ownership change under Section 382 as a result of events in the past in combination with events in the future.  If so, the use of the Company’s NOLs, or a portion thereof, against future taxable income may be subject to an annual limitation under Section 382, which may result in expiration of a portion of the NOLs before utilization.  To the extent our use of net operating loss carryforwards is significantly limited under the rules of Section 382, our income could be subject to U.S. corporate income tax earlier than it would if we were able to use net operating loss carryforwards, which could result in lower profits.  Any carryforwards that expire prior to utilization as a result of such limitations will be removed, if applicable, from deferred tax assets with a corresponding reduction of the valuation allowance.  As of June 30, 2022, the Company is not aware of any applicable Section 382 limitations that may exist on its net operating losses.

As of June 30, 2022, the Company had federal and state net operating loss carryovers of approximately $98.7 million and $32.9 million, respectively, which will begin to expire June 30, 2031, unless previously utilized. A

71

portion of the federal net operating losses generated after June 30, 2018 can be carried forward indefinitely, which total $74.2 million. The Company has federal research credits of $1,275,701 which will expire June 30, 2031, unless previously utilized. The Company also has foreign tax credits of $322,859 which will begin to expire June 30, 2023, unless previously utilized. The Company has state research credits of $25,089 that do not expire. The Company also has $0 Australian net operating loss carryovers as of the year ended June 30, 2022. In addition, the Company has $5.2 million of Section 163(j) interest limitation carryovers as of June 30, 2022 which do not expire.

As of June 30, 2022, the Company has not provided for foreign withholding taxes on approximately $7.4 million of undistributed earnings of its foreign subsidiaries, as these earnings are considered indefinitely reinvested outside of the United States. The Company does not plan to repatriate any earnings that are currently located in its foreign subsidiaries as of June 30, 2022.  

The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes.  

The Company has approximately $77,350 of unrecognized tax benefits related to current year tax positions as of June 30, 2022. Included in the unrecognized tax benefits was approximately $61,106 of tax benefits that, if recognized, would reduce our annual effective tax rate, if the Company were not in a valuation allowance position. However, as the Company is in a full valuation allowance position, there would be no impact to the annual effective tax rate if the tax benefits were recognized.

The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. The Company has not accrued interest and penalties associated with uncertain tax positions as of June 30, 2022 and 2021. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act was signed into law. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments. The CARES Act did not have a material impact on the Company’s consolidated financial statements for the years ended June 30, 2022 and 2021.

On March 11, 2021, the American Rescue Act, or ARPA, was signed into law. The ARPA strengthens and extends certain federal programs enacted through the CARES Act and other COVID-19 relief measures, and establishes new federal programs, including provisions on taxes, healthcare and unemployment benefits. The ARPA did not have a material impact on the Company’s consolidated financial statements for the years ended June 30, 2022 and 2021.

NOTE 10 - FOREIGN CURRENCY CONTRACTS

The Company’s subsidiary, S&W Australia, 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 $14,775,693 at June 30, 2022 and their maturities range from July 2022 to January 2023.

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 liabilities totaled $996,106 and $96,466 at June 30, 2022 and 2021, respectively. The Company recorded a loss on foreign exchange contracts of $958,373 and $79,403 for the years ended June 30, 2022 and 2021, respectively, which are reflected in cost of revenue.

72

NOTE 11 - COMMITMENTS AND CONTINGENCIES

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.

Legal Matters

The Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. Any current litigation is considered immaterial and counter claims have been assessed as remote.

NOTE 12 - EQUITY

On September 23, 2020, the entered into an At Market Issuance Sales Agreement, or the ATM Agreement, with B. Riley Securities, Inc., or B. Riley, under which the Company may offer and sell from time to time, at its sole discretion, shares of its common stock having an aggregate offering price of up to $14.0 million through B. Riley as its sales agent. The Company agreed to pay B. Riley a commission of 3.5% of the gross proceeds of the sales price per share of any common stock sold through B. Riley under the ATM Agreement. For the year ended June 30, 2021, the Company received gross proceeds of approximately $10.9 million from the sale of 3,008,015 shares of its common stock pursuant to the ATM Agreement.

On September 27, 2021, the Company entered into an amendment to the ATM Agreement, under which the aggregate offering price was increased from $14.0 million to $17.1 million. For the year ended June 30, 2022, the Company received gross proceeds of approximately $6.2 million from the sale of 2,633,900 shares of its common stock pursuant to the ATM Agreement. As of June 30, 2021, the Company had $0 million remaining under the ATM Agreement.

On May 17, 2022, the Company amended the ATM Agreement to having an aggregate offering price of $24.6 million. As of June 30, 2022, the Company had $6.3 million remaining under the ATM Agreement.

On October 14, 2021, the Company entered into a Securities Purchase Agreement with MFP Partners, L.P., or MFP, the Company’s largest stockholder, Starlight 4, LLLP, an entity affiliated with Mark W. Wong, the Company’s Chief Executive Officer and a member of its board of directors, and Alan D. Willits, Charles B. Seidler and Robert Straus, each a member of its board of directors, pursuant to which the Company sold and issued an aggregate of 1,847,343 shares of its common stock at a purchase price of $2.73 per share for aggregate gross proceeds of approximately $5.0 million. Alexander C. Matina, a member of the Company’s board of directors, is Vice President of Investments of the general partner of MFP.

NOTE 13 - EQUITY-BASED COMPENSATION

Equity Incentive Plans

In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan, or 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.

73

In December 2018 and January 2019, the Company's Board of Directors and stockholders, respectively, approved the 2019 Equity Incentive Plan, or the 2019 Plan, as a successor to and continuation of the 2009 Plan. In October 2020 and December 2020, the Company’s Board of Directors and stockholders approved, respectively, the amendment to the 2019 Plan to increase the number of shares available for issues as grants and awards by 4,000,000 shares. Subject to adjustment for certain changes in the Company's capitalization, the aggregate number of shares of the Company's common stock that may be issued under the 2019 Plan, as amended, will not exceed 8,243,790 shares, which is the sum of (i) 4,000,000 new shares, (ii) 2,750,000 additional shares that were reserved as of the effective date of the 2019 Plan, (iii) 350,343 shares (the number of unallocated shares that were available for grant under the 2009 Plan as of January 16, 2019, the effective date of the 2019 Plan), plus (iv) 1,143,447 shares, which is the number of shares subject to outstanding stock awards granted under the 2009 Plan that on or after the effective date of the 2019 Plan may expire or terminate for any reason prior to exercise or settlement, are forfeited because of the failure to meet a contingency or condition required to vest such shares or otherwise return to us, or are reacquired, withheld or not issued to satisfy a tax withholding obligation in connection with an award or to satisfy the purchase price or exercise price of a stock award. 

The term of incentive stock options granted under the Company’s equity incentive plans 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 Company’s equity incentive plans 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 option grants.

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

	June 30, 2022			June 30, 2021
Risk free rate	0.82%-2.81%			0.24%-0.33%
Dividend yield		0	%		0	%
Volatility	61.7%-64.7%			52.1%-53.0%
Average forfeiture assumptions		3.2	%		2.3	%

During the year ended June 30, 2022, the Company granted 994,725 options to its directors, certain members of the executive management team and other employees at exercise prices ranging from $2.64 - $3.39. These options vest in either quarterly or annual periods over one to three years, and expire ten years from the date of grant.

74

A summary of stock option activity for the years ended June 30, 2022 and 2021 is presented below:

	Number Outstanding			Weighted - Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 30, 2020		2,875,894		$	2.74		8.6	$	22,409
Granted		976,924			2.41
Exercised		(65,990	)		2.48
Canceled/forfeited/expired		(10,260	)		2.94
Outstanding at June 30, 2021		3,776,568			2.65		8.0		3,962,766
Granted		994,725			2.63
Exercised		(38,774	)		2.33
Canceled/forfeited/expired		(95,419	)		2.82
Outstanding at June 30, 2022		4,637,100			2.64		6.6		—
Options vested and exercisable at June 30, 2022		3,229,891		$	2.70		5.7	$	—
Options vested and expected to vest as of    June 30, 2022		4,629,560			2.64		6.6		—

The weighted average grant date fair value of options granted and outstanding at June 30, 2022 was $2.64. At June 30, 2022, the Company had $1,183,831 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 1.81 years. The Company settles employee stock option exercises with newly issued shares of common stock.

During the years ended June 30, 2022 and 2021, the Company issued 304,421 and 291,206 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 quarterly or annual installments over one to three-years. The fair value of the awards during the years ended June 30, 2022 and 2021 totaled $846,080 and $1,965,712, respectively, and was based on the closing stock price on the date of grants.

The Company recorded $982,422 and $866,017 of stock-based compensation expense associated with grants of restricted stock units during the years ended June 30, 2022 and 2021, respectively. A summary of activity related to non-vested restricted stock units is presented below:

	Number of Nonvested Restricted Stock Units			Weighted-Average Grant Date  Fair Value		Weighted-Average Remaining  Contractual Life (Years)
Nonvested restricted units outstanding at June 30, 2020		396,803		$	2.33		1.6
Granted		291,206			2.59		1.9
Vested		(326,439	)		2.36		—
Forfeited		—			—		—
Nonvested restricted units outstanding at June 30, 2021		361,570			2.51		1.3
Granted		304,421			2.78		2.4
Vested		(391,036	)		2.62		—
Forfeited		(7,036	)		2.35		—
Nonvested restricted units outstanding at June 30, 2022		267,919			2.66		1.2

At June 30, 2022, the Company had $439,089 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.18 years.

At June 30, 2022, there were 2,549,966 shares available under the 2019 Plan for future grants and awards.

Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the years ended June 30, 2022 and 2021, totaled $2,267,186 and $1,766,353, respectively.

75

NOTE – 14 SERIES B CONVERTIBLE PREFERRED STOCK

On February 18, 2022, the Company entered into a Securities Purchase Agreement, or the Purchase Agreement, with MFP, pursuant to which the Company sold and issued to MFP, in a private placement, 1,695 shares of its Series B Redeemable Convertible Non-Voting Preferred Stock, par value $0.001 per share, or the Series B Preferred Stock, and an accompanying warrant, or the Warrant, to purchase up to 559,350 shares of the Company’s common stock, or the Common Stock, par value $0.001 per share, at a combined unit price of $2,950 per share, or the Stated Value, for aggregate gross proceeds of approximately $5.0 million.

The Warrant first becomes exercisable on the date that is six months after the date of issuance, at an exercise price of $5.00 per share (subject to adjustment in connection with any stock dividends and splits, distributions with respect to Common Stock and certain fundamental transactions as described in the Warrant) and will expire five years from the date it first becomes exercisable.

The Series B Preferred Stock is initially convertible into shares of Common Stock at the rate of 1,000 shares of Common Stock per share of Series B Preferred Stock, at any time at the option of the holder of such shares, subject to the following limitations: (i) unless a holder was a stockholder of the Company as of February 18, 2022 (in which case such limitation shall not apply), the Company shall not affect any conversion of Series B Preferred Stock to the extent that, after giving effect to an attempted conversion, such holder, together with its affiliates, would beneficially own a number of shares of Common Stock in excess of 4.99% of the total number of shares of Common Stock outstanding immediately after giving effect to the issuance of such shares, which limit may be decreased or increased (not to exceed 19.99%) upon written notice to the Company, with any increase not becoming effective until at least 61 days after such notice; (ii) a holder may not acquire shares of Common Stock upon conversion of Series B Preferred Stock if such conversion would result in the total number of shares of Common Stock issued or issuable upon conversion or exercise of the securities issued pursuant to the Purchase Agreement to exceed 7,777,652 shares, or 19.99% of the outstanding shares of Common Stock as of the date of the Purchase Agreement; and (iii) to the extent Nasdaq Listing Rule 5635(c) is applicable or deemed applicable to a holder, such holder may not acquire shares of Common Stock upon conversion of Series B Preferred Stock that would exceed the maximum number of all shares of Common Stock that could be issued by the Company to such holder without requiring stockholder approval pursuant to Nasdaq Listing Rule 5635(c). Upon receiving shareholder approval of a proposal to be submitted to the shareholders of the Company for the purpose of approving the transactions contemplated by the Purchase Agreement, pursuant to Nasdaq Listing Rules 5635(a), (c) and (d), the foregoing limitations in (ii) and (iii) above shall no longer have any force or effect.

Pursuant to the Purchase Agreement, the Company agreed to use its reasonable best efforts to solicit the approval of its shareholders for the issuance of all shares of Common Stock otherwise issuable upon the conversion of the Series B Preferred Stock, or the Requisite Approval, at the next annual meeting of the Company’s shareholders, and at each annual meeting of shareholders thereafter, if necessary, until the Requisite Approval is obtained.

A holder of Series B Preferred Stock is entitled to receive cumulative cash dividends of 5% per annum, payable semi-annually in arrears on the last day of March and September of each calendar year. In lieu of paying such cash dividends, the Company may elect to add an amount to the Stated Value, provided that the dividend rate shall be 7% per annum, calculated semi-annually in arrears on the last day of March and September of each calendar year. A holder of Series B Preferred Stock is also entitled to receive any dividend declared and paid to holders of the Common Stock as if such Series B Preferred Stock had been converted into Common Stock. In addition, a holder of Series B Preferred Stock is entitled to a liquidation preference equal to the greater of (i) the Stated Value, plus any cash dividends accrued but unpaid thereon, and (ii) the payment such holder would have received had the Series B Preferred Stock been converted into shares of Common Stock immediately prior to such liquidation event.

Unless prohibited by Nevada law governing distributions to stockholders, the Series B Preferred Stock is redeemable, at any time after August 18, 2025, upon written request from the holders of a majority of the outstanding shares of Series B Preferred Stock, at a price equal to the Stated Value, plus any cash dividends accrued but unpaid thereon.

The Series B Preferred Stock is non-voting except with respect to certain matters affecting the Series B Preferred Stock. In addition, the approval of a majority of the outstanding shares of Series B Preferred Stock is required if after February 18, 2022 the Company seeks to issue Common Stock, pursuant to the Sales Agreement, dated

76

September 27, 2021, between the Company and B. Riley Securities, for cumulative gross proceeds in excess of $6.1 million.

Since the holder has the option to redeem their shares of Series B Preferred Stock at any time after August 18, 2025, the stock is considered contingently redeemable and, accordingly, is classified as temporary equity, net of the relative fair value assigned to the warrant of $361,709 recorded in the Statement of Equity, on the Consolidated Balance Sheet as of June 30, 2022. Over the initial 42-month term the $4,638,521 relative fair value of the Series B Preferred Stock will be accreted to its redemption value of $5,000,250. Dividends will be accrued and recognized through retained earnings.

The following summarizes changes to our Series B Preferred Stock:

Balance at June 30, 2021	$	—
Issuance of preferred stock		4,638,521
Dividends accrued		127,541
Accretion of discount for warrants		38,757
Balance at June 30, 2022	$	4,804,819

NOTE 15 - 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 years ended June 30, 2022 and 2021, respectively.

	Years Ended June 30,
	2022			2021
Purchases of equipment classified as finance lease	$	(369,574	)	$	(696,303	)
Dividends accrued for participating securities and accretion		(166,298	)		—

77

NOTE 16 - SUBSEQUENT EVENTS

MFP Loan Agreement

On September 22, 2022, in support of S&W Seed Company’s ongoing efforts to solidify and stabilize its financial position and balance sheet, MFP provided a letter of credit, issued by JPMorgan Chase Bank, N.A. for the account of MFP, with a face amount of $9,000,000, or Specified LC, for the benefit of CIBC, as additional collateral to support the Company’s obligations under the CIBC loan agreement. The Specified LC matures on January 23, 2023, one month after the maturity date of the CIBC loan agreement.

Concurrently, on September 22, 2022 the Company entered into a Subordinate Loan and Security Agreement, or MFP Loan Agreement, with MFP, pursuant to which any draw CIBC may make on the Specified LC, or Bank Draw, will be deemed to be a term loan advance made by MFP to the Company. The MFP Loan Agreement will mature on November 30, 2025. Pursuant to the MFP Loan Agreement, the Company will pay to MFP a cash fee through the maturity date of the Specified LC equal to 3.50% per annum on all amounts remaining undrawn under the Specified LC. In the event any term advances are deemed made under the MFP Loan Agreement, such advances will bear interest at a rate per annum equal to term SOFR (with a floor of 1.25%) plus 9.25%, half of which will be payable in cash on the last day of each fiscal quarter and half of which will accrue as payment in kind interest payable on the maturity date, unless, with respect to any quarterly payment date, the Company elects to pay such interest in cash.

The MFP Loan Agreement includes customary affirmative and negative covenants and events of default. The MFP Loan Agreement is secured by substantially all of the assets of the Company and is subordinated to the CIBC Loan Agreement. Upon the occurrence and during the continuance of an event of default, MFP may declare all outstanding obligations under the MFP Loan Agreement immediately due and payable and take such other actions as set forth in the MFP Loan Agreement.

MFP is the Company’s largest shareholder. One of the Company’s directors, Alexander C. Matina, is a Portfolio Manager of MFP Investors LLC, the general partner of MFP.

6th Amendment to CIBC Loan Agreement

On September 22, 2022, the Company entered into a Sixth Amendment to Loan and Security Agreement, or CIBC Amendment, with CIBC, amending the CIBC loan agreement. The CIBC Amendment, among other things, (i) reduces the maximum loan amount available to the Company to $18,000,000 from $20,000,000, (ii) sets the Company’s borrowing base eligible inventory sublimit at $9,000,000, (iii) specifies that the inventory sublimit cannot be reduced below the proceeds available to be drawn under the Specified LC, and (iv) waives the Company’s non-compliance with certain financial covenants under the CIBC loan agreement.

MFP Warrants

Pursuant to the terms and conditions of the MFP Loan agreement, on September 22, 2022, the Company issued to MFP a warrant, or Initial Warrant, to purchase up to 500,000 shares of the Company’s Common Stock, or Initial Warrant Shares, which number of shares may be reduced by up to one half in connection with any Bank Draws, pursuant to the following formula: (x) $9,000,000 minus the aggregate amount of any Bank Draws as of any exercise date, divided by (y) $9,000,000, multiplied by (z) 250,000. In addition, upon each Bank Draw, the Company will issue to MFP additional warrants, or Additional Warrants (and together with the Initial Warrant, the Warrants), to purchase such number of shares of the Company’s Common Stock as is equal to the quotient of (A) the product of (x) the amount of each Bank Draw multiplied by (y) 40%, divided by (B) $1.60 (together with the Initial Warrant Shares, the Warrant Shares). The Warrant Shares are issuable pursuant to the Warrants at an exercise price of $1.60 per Warrant Share (subject to adjustment in connection with any stock dividends and splits, distributions with respect to Common Stock and certain fundamental transactions as described in the Initial Warrant) and each Warrant will expire five years from the date of issuance.

2nd Amendment to Rooster Note

In addition, on September 22, 2022, the Company entered into a Second Amendment to Note, or Rooster Amendment, with Rooster Capital LLC, or Rooster, amending the Company’s promissory note, dated November 30, 2017, originally issued to Conterra, and subsequently endorsed to Rooster (as amended, the Rooster Note). The Rooster Amendment extends the maturity date of the Rooster Note from November 30, 2022 to December 23, 2022.

78

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. 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 June 30, 2022, or 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 June 30, 2022, 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.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted, with the participation of our Principal Executive Officer and our Principal Financial Officer, an assessment, including testing of the effectiveness, of our internal control over financial reporting as of the Evaluation Date. Management’s assessment of internal control over financial reporting was conducted using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control—Integrated Framework, or 2013 Framework. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In connection with our management’s assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002, we have not identified any material weaknesses in our internal control over financial reporting as of the Evaluation Date. We have thus concluded that our internal control over financial reporting was effective as of the Evaluation Date.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

79

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by Item 10 regarding directors, executive officers, promoters and control persons is incorporated by reference to the information appearing under the caption "Directors and Executive Officers" “Directors and Executive Officers – Information Regarding Our Board of Directors, Corporate Governance And Executive Officers – Audit Committee,” “Directors and Executive Officers – Information Regarding Our Board of Directors, Corporate Governance And Executive Officers – Nominating and Governance Committee,” “Election of Directors,” “Executive Officers,” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

Our written Code of Conduct and Ethics applies to all of our directors and employees, including our executive officers, including without limitation our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Conduct and Ethics is available on our website at www.swseedco.com in the Investors section under "Corporate Governance." Changes to or waivers of the Code of Conduct and Ethics will be disclosed on the same website. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendment to, or waiver of, any provision of the Code of Conduct and Ethics by disclosing such information on the same website.

Item 11. Executive Compensation

The information required by Item 11 is incorporated by reference to the information appearing under the caption "Executive Compensation Overview," “Directors and Executive Officers – Information Regarding Our Board of Directors, Corporate Governance And Executive Officers – Compensation Committee,” and “Directors and Executive Officers – Information Regarding Our Board of Directors, Corporate Governance And Executive Officers – Non-Employee Director Compensation” in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 is incorporated by reference to the information appearing under the caption "Security Ownership of Certain Beneficial Owners and Management" and “Executive Compensation Overview – Equity Benefit Plans” in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by Item 13 is incorporated by reference to the information appearing under the caption "Certain Relationships and Related Party Transactions" and “Directors and Executive Officers – Information Regarding Our Board of Directors, Corporate Governance And Executive Officers – Board Independence” in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

Item 14. Principal Accountant Fees and Services

The information required by Item 14 is incorporated by reference to the information appearing under the caption "Principal Accountant Fees and Services" in our definitive Proxy Statement relating to our next Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days after the close of our fiscal year.

80

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Annual Report on Form 10-K:

(1) Financial Statements:

Reference is made to the Index to Consolidated Financial Statements of S&W Seed Company under Item 8 in Part II of this Form 10-K.

(2) Financial Statement Schedules:

Financial statement schedules have been omitted in this Annual Report because they are not applicable, not required under the instructions, or the information requested is set forth in the financial statements or notes thereto.

(3) Exhibits:

The information required by this Section (a)(3) of Item 15 is incorporated by reference or filed with this report as set forth on the exhibit index that follows below.

81

(b) Exhibits

INDEX TO EXHIBITS

		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	SEC File Number	Exhibit Number	Filing Date	Filed Herewith
2.1	Asset Acquisition Agreement among the Registrant, Imperial Valley Seeds, Inc. (“IVS”), Glen D. Bornt, Fred Fabre and the Bornt Family Trust, dated September 28, 2012	8-K	001-34719	2.1	10/2/12
2.2†	Asset Purchase and Sale Agreement between the Registrant and Pioneer Hi-Bred International, Inc. (“Pioneer”), dated December 19, 2014	8-K	001-34719	2.1	12/29/14
2.3†	First Amendment to Asset Purchase and Sale Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	2.1	1/7/15
2.4	Second Amendment to the Asset Purchase and Sale Agreement between the Registrant and Pioneer, dated April 23, 2015	10-K	001-34719	2.6	9/28/15
2.5	Third Amendment to Asset Purchase and Sale Agreement between the Registrant and Pioneer, dated July 23, 2015	10-K	001-34719	2.7	9/28/15
2.6	Fourth Amendment to Asset Purchase and Sale Agreement between the Registrant and Pioneer, dated December 4, 2017	10-Q	001-34719	2.1	2/8/18
2.7	Asset Acquisition Agreement between the Registrant, SV Genetics Pty Ltd, Seed Genetics International Pty Ltd, David John Holman, Alan Irvine Scott, Trevor Bailie, Bottrell Precision Ventures, LLC and James R. Bennett, dated May 27, 2016	8-K	001-34719	2.1	5/31/16
2.8	Asset Purchase Agreement by and between Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin, Inc., dated September 5, 2018	10-K	001-34719	2.8	9/20/18
2.9	Asset Purchase Agreement by and between Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin, Inc., dated September 14, 2018	10-K	001-34719	2.9	9/20/18
2.10	Share Sale Agreement by and among S&W Seed Company Australia Pty Ltd, a wholly owned subsidiary of the Registrant, Ann Elizabeth Damin and Robert Damin, dated February 18, 2020	10-Q	001-34719	10.1	5/14/20
3.1	Registrant’s Articles of Incorporation, as amended	10-Q	001-34719	3.1	2/11/21

82

3.2	Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock	8-K	001-34719	3.1	2/23/22
3.3	Registrant’s Second Amended and Restated Bylaws, together with Amendment One thereto	10-Q	001-34719	3.3	5/14/20
4.1	Reference is made to Exhibits 3.1, 3.2 and 3.3
4.2	Form of Common Stock Certificate	S-3	333-219726	4.3	8/4/17
4.3	Description of Common Stock	10-K	001-34719	4.3	9/23/20
4.4	Form of Warrant issued on February 18, 2022	8-K	001-34719	4.1	2/23/22
10.1†	Non-Exclusive Alfalfa Licensing and Assignment Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.4	1/7/15
10.2†	Information Technology Transition Services Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.6	1/7/15
10.3	Patent License Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.11	1/7/15
10.4	Patent Assignment Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.12	1/7/15
10.5	Know-How Transfer Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.13	1/7/15
10.6	Data Transfer Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.14	1/7/15
10.7	Assignment Agreement of Plant Variety Certificates, Plant Breeders’ Rights, Maintenance Rights and Registration Rights between the Registrant, Pioneer Overseas Corporation and Pioneer, dated December 31, 2014	8-K	001-34719	10.15	1/7/15
10.8	First Amendment to the Assignment Agreement of Plant Variety Certificates, Plant Breeders’ Rights, Maintenance Rights and Registration Rights between the Registrant, Pioneer Overseas Corporation and Pioneer, dated April 23, 2015	10-K	001-34719	10.25	9/28/15

83

10.9	Assignment and Assumption Agreement between the Registrant and Pioneer, dated December 31, 2014	8-K	001-34719	10.16	1/7/15
10.10	Form of Indemnification Agreement with Officers, Directors and Employees of the Registrant and Subsidiaries	8-K	001-34719	10.1	7/24/14
10.11*	Amended and Restated 2009 Equity Incentive Plan as amended through Amendment No. 2, forms of Stock Option Grant and Agreement, Restricted Stock Unit Grant and Restricted Stock Award	10-K	001-34719	10.34	9/28/15
10.12*	S&W Seed Company 2019 Equity Incentive Plan, as amended (the “Plan”)	8-K	001-34719	10.1	12/18/20
10.13*	Form of Stock Option Grant Notice, Option Agreement and Notice of Exercise under the Plan.	S-8	333-229625	99.2	2/12/19
10.14*	Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the Plan.	S-8	333-229625	99.3	2/12/19
10.15*	Employment Agreement between the Registrant and Mark W. Wong, dated September 27, 2021	10-K	001-34719	10.16	9/28/22
10.16*	Employment Agreement between the Company and Donald Panter, dated September 27, 2021	10-K	001-34719	10.17	9/28/22
10.17*	Employment Agreement between the Company and David Callachor, dated September 27, 2021	10-K	001-34719	10.18	9/28/22
10.18*	Employment Agreement by and between the Registrant and Elizabeth Horton, dated November 13, 2021	10-Q	001-34719	10.2	2/10/22
10.19*	Separation and Consulting Agreement by and between the Registrant and Matthew Szot, dated November 14, 2021	10-Q	001-34719	10.3	2/10/22
10.20†	Collaboration Agreement between the Registrant and Calyxt, Inc., dated May 28, 2015 and entered into by the Registrant on June 3, 2015	10-K	001-34719	10.39	9/28/15

84

10.21	Registration Rights Agreement between the Registrant and the investors named therein, dated July 19, 2017	8-K	001-34719	99.2	7/20/17
10.22	Registration Rights Agreement by and between the Registrant and Mark W. Wong, dated October 11, 2017	8-K	001-34719	99.2	10/12/17
10.23	Secured Promissory Notes issued by the Registrant in favor of Conterra Agricultural Capital, LLC, dated November 30, 2017 and related documents	10-Q	001-34719	10.5	2/8/18
10.24	Registration Rights Agreement by and between the Registrant and MFP Partners, L.P., dated December 22, 2017	S-3	333-222916	4.17	2/7/18
10.25	Sale and Lease Agreement by and between the Registrant and American AgCredit, dated August 9, 2018	10-K	001-34719	10.73	9/20/18
10.26	Registration Rights Agreement dated September 5, 2018, by and among the Registrant and MFP Partners, L.P.	8-K	001-34719	10.3	9/6/18
10.27††	Loan and Security Agreement by and among the Registrant, Seed Holding, LLC, Stevia California, LLC, and CIBC Bank USA, dated December 26, 2019	10-Q	001-34719	10.1	2/12/20
10.28	First Amendment to Loan and Security Agreement by and among the Registrant, Seed Holding, LLC, Stevia California, LLC, and CIBC Bank USA, dated September 22, 2020	10-K	001-34719	10.27	9/23/20
10.29	Amendment to Note between the Registrant and Rooster Capital LLC, dated December 24, 2019	10-Q	001-34719	10.2	2/12/20
10.30	Business Letter of Offer between National Australia Bank Limited and S&W Seed Company Australia Pty Ltd, dated February 17, 2020	10-K	001-34719	10.29	9/23/20
10.31	Business Letter of Offer between National Australia Bank Limited and Pasture Genetics Ptd Ltd, dated February 17, 2020	10-K	001-34719	10.30	9/23/20
10.32††	Termination Agreement by and between the Registrant and Pioneer Hi-Bred International, Inc., effective as of May 20, 2019	10-K	001-34719	10.31	9/23/20
10.33††	Alfalfa License Agreement by and between the Registrant and Pioneer Hi-Bred International, Inc., effective as of May 20, 2019	10-K	001-34719	10.32	9/23/20

85

10.34	Business Letter of Offer between National Australia Bank Limited and S&W Seed Company Australia Pty Ltd, dated May 28, 2020	10-Q	001-34719	10.2	11/12/20
10.35	Second Amendment to Loan and Security Agreement, dated December 30, 2020, by and among the Registrant, Seed Holding, LLC, Stevia California, LLC and CIBC Bank USA.	10-Q	001-34719	10.2	2/11/21
10.36	Business Letter of Variation between National Australia Bank Limited and S&W Seed Company Australia Pty Ltd, dated March 8, 2021.	10-Q	001-34719	10.1	5/13/21
10.37	Third Amendment to Loan and Security Agreement, dated May 12, 2021, by and among the Registrant, Seed Holding, LLC, Stevia California, LLC and CIBC Bank USA.	10-Q	001-34719	10.2	5/13/21
10.38	Fourth Amendment to Loan and Security Agreement, dated September 27, 2021, by and among the Registrant, Seed Holdings, LLC, Stevia California, LLC and CIBC Bank USA	10-K	001-34719	10.37	9/28/22
10.39	Securities Purchase Agreement, dated October 14, 2021, by and among the Company and the Purchasers	8-K	001-34719	10.1	10/18/21
10.40	Registration Rights Agreement, dated October 14, 2021, by and among the Company and the Purchasers	8-K	001-34719	10.2	10/18/21
10.41	Finance Agreement by and between National Australia Bank Limited and S&W Seed Company Australia Pty Ltd, dated October 14, 2021	10-Q	001-34719	10.1	2/10/22
10.42	Securities Purchase Agreement, dated February 18, 2022, by and among the Registrant and MFP Partners, L.P. (“MFP”)	8-K	001-34719	10.1	2/23/22
10.43	Registration Rights Agreement, dated February 18, 2022, by and among the Registrant and MFP	8-K	001-34719	10.2	2/23/22
10.44	Fifth Amendment to Loan and Security Agreement, dated May 13, 2022, by and among the Registrant, Seed Holding, LLC, Stevia California, LLC and CIBC Bank USA	10-Q	001-34719	10.3	5/16/22
21.1	Subsidiaries of the Registrant					X
23.1	Consent of Independent Registered Public Accounting Firm					X

86

24.1	Power of Attorney (see signature page)	X
31.1	Chief Executive Officer Certification pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended	X
31.2	Chief Financial Officer Certification pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended	X
32.1**	Chief Executive Officer Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2**	Chief Financial Officer Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	Inline XBRL Instance Document	X
101.SCH	Inline XBRL Schema Document	X
101.CAL	Inline XBRL Calculation Linkbase Document	X
101.DEF	Inline XBRL Definition Linkbase Document	X
101.LAB	Inline XBRL Label Linkbase Document	X
101.PRE	Inline XBRL Presentation Linkbase Document	X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).	X

† Portions of this exhibit have been omitted pursuant to an Order Granting Confidential Treatment under the Securities Exchange Act of 1934, as amended.

†† Certain portions of this exhibit (indicated by “[***]”) have been omitted as the Registrant as determined (i) the omitted information is not material and (ii) the omitted information would likely cause harm to the Registrant if publicly disclosed

* Management contract or compensatory plan or arrangement.

** This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

Item 16. Form 10-K Summary

None.

87

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date:  September 28, 2022

S&W SEED COMPANY
By:	/s/ Mark W. Wong
	Mark W. Wong
	President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Mark W. Wong and Elizabeth Horton, or any of them, his attorneys-in-fact, for such person in any and all capacities, to sign any amendments to this report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that either of said attorneys-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Mark W. Wong	President, Chief Executive Officer and Director (Principal Executive Officer)	September 28, 2022
Mark W. Wong
/s/ Elizabeth Horton	Chief Financial Officer (Principal Financial and Accounting Officer)	September 28, 2022
Elizabeth Horton
/s/ Mark J. Harvey	Chairman of the Board	September 28, 2022
Mark J. Harvey
/s/ David A. Fischhoff	Director	September 28, 2022
David A. Fischhoff
/s/ Consuelo E. Madere	Director	September 28, 2022
Consuelo E. Madere
/s/ Alexander C. Matina	Director	September 28, 2022
Alexander C. Matina
/s/ Charles B. Seidler	Director	September 28, 2022
Charles B. Seidler
/s/ Robert D. Straus	Director	September 28, 2022
Robert D. Straus
/s/ Alan D. Willits	Director	September 28, 2022
Alan D. Willits

88

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF

S&W SEED COMPANY,

Nevada corporation

Pasture Genetics Pty Ltd, an Australia corporation (wholly-owned by S&W Seed Company Australia Pty Ltd)

Seed Holding, LLC, a Nevada limited liability company

Stevia California, LLC, a California limited liability company

S&W Holdings Australia Pty Ltd, an Australia corporation (f/k/a S&W Seed Australia Pty Ltd)

S&W Seed Company Australia Pty Ltd, an Australia corporation (f/k/a Seed Genetics International Pty Ltd) (wholly-owned by S&W Holdings Australia Pty Ltd)

Seed Vision (PTY) LTD, a South Africa proprietary limited company

Sorghum Solutions South Africa (PTY) LTD, a South Africa proprietary limited company

S&W Seed Hungary Korlátolt Felelősségű Társaság (KFT), a Hungary limited liability company

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements on Form S-3 (File Nos. 333-261728 and 333-248974) and Form S-8 (File Nos. 333-256079, 333-229625, 333-196067 and 333-169742) of S&W Seed Company of our report dated September 28, 2022 relating to the consolidated financial statements, appearing in this Annual Report on Form 10-K.

/s/ Crowe LLP

Sacramento, California

September 28, 2022

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Mark W. Wong, certify that:

1. I have reviewed this report on Form 10-K of S&W Seed Company (the "registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 28, 2022

/s/ Mark W. Wong

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Elizabeth Horton, certify that:

1. I have reviewed this report on Form 10-K of S&W Seed Company (the "registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: September 28, 2022

/s/ Elizabeth Horton

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K of S&W Seed Company (the "Company") for the fiscal year ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Mark W. Wong, President and Chief Executive Officer of the Company, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: September 28, 2022

/s/ Mark W. Wong

Mark W. Wong

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Annual Report on Form 10-K of S&W Seed Company (the "Company") for the fiscal year ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the "Report") I, Elizabeth Horton, Chief Financial Officer of the Company, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, that to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: September 28, 2022

/s/ Elizabeth Horton

Elizabeth Horton

Chief Financial Officer

(Principal Financial and Accounting Officer)

XML

Document and Entity Information - USD ($)

12 Months Ended

Jun. 30, 2022

Sep. 21, 2022

Dec. 31, 2020

Cover [Abstract]

Entity Registrant Name

S&W Seed Co

Entity Central Index Key

0001477246

Document Type

10-K

Document Period End Date

Jun. 30, 2022

Amendment Flag

false

Current Fiscal Year End Date

--06-30

Entity Well-known Seasoned Issuer

No

Entity Voluntary Filers

No

Entity Small Business

true

Entity Emerging Growth Company

false

ICFR Auditor Attestation Flag

false

Entity Shell Company

false

Entity Current Reporting Status

Yes

Entity Filer Category

Non-accelerated Filer

Entity File Number

001-34719

Entity Tax Identification Number

27-1275784

Entity Address, Address Line One

2101 Ken Pratt Blvd

Entity Address, Address Line Two

Suite 201

Entity Address, City or Town

Longmont

Entity Address, State or Province

CO

Entity Address, Postal Zip Code

80501

City Area Code

720

Local Phone Number

506-9191

Entity Public Float

$ 42,407,124

Entity Common Stock, Shares Outstanding

42,607,585

Document Fiscal Period Focus

FY

Document Fiscal Year Focus

2022

Trading Symbol

SANW

Title of 12(b) Security

Common Stock, par value $0.001 per share

Security Exchange Name

NASDAQ

Entity Interactive Data Current

Yes

Entity Incorporation, State or Country Code

NV

Document Annual Report

true

Document Transition Report

false

Auditor Firm ID

173

Auditor Name

Crowe LLP

Auditor Location

Sacramento, California

Documents Incorporated by Reference

Portions of the registrant's Proxy Statement for its next Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement is to be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended June 30, 2022.

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2022	Jun. 30, 2021
CURRENT ASSETS
Cash and cash equivalents	$ 2,056,508	$ 3,527,937
Accounts receivable, net	19,051,236	19,389,213
Inventories, net	54,515,894	63,395,256
Prepaid expenses and other current assets	1,605,987	1,555,530
TOTAL CURRENT ASSETS	77,229,625	87,867,936
Property, plant and equipment, net	16,871,669	17,740,974
Intangibles, net	34,095,827	37,130,942
Goodwill	0	1,651,634
Other assets	5,590,730	7,079,490
TOTAL ASSETS	133,787,851	151,470,976
CURRENT LIABILITIES
Accounts payable	15,901,116	15,947,918
Deferred revenue	605,960	385,328
Accrued expenses and other current liabilities	10,788,740	9,134,869
Current portion of working capital lines of credit, net	12,678,897	33,946,565
Current portion of long-term debt, net	8,316,783	1,681,166
TOTAL CURRENT LIABILITIES	48,291,496	61,095,846
Long-term working capital lines of credit, less current portion	21,703,286	0
Long-term debt, net, less current portion	3,992,540	11,590,500
Contingent consideration obligation	0	741,552
Other non-current liabilities	3,587,041	3,649,885
TOTAL LIABILITIES	77,574,363	77,077,783
SERIES B CONVERTIBLE PREFERRED STOCK
Preferred stock, $0.001 par value; 3,323 shares authorized; 1,695 shares issued and outstanding at June 30, 2022; none issued and outstanding at June 30, 2021	4,804,819	0
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value; 75,000,000 shares authorized; 42,608,758 issued and 42,583,758 outstanding at June 30, 2022; 36,772,983 issued and 36,747,983 outstanding at June 30, 2021	42,609	36,773
Treasury stock, at cost, 25,000 shares	(134,196)	(134,196)
Additional paid-in capital	163,892,575	149,684,357
Accumulated deficit	(105,873,557)	(69,311,909)
Accumulated other comprehensive loss	(6,560,600)	(5,850,826)
Noncontrolling interests	41,838	(31,006)
TOTAL STOCKHOLDERS' EQUITY	51,408,669	74,393,193
TOTAL LIABILITIES, SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY	133,787,851	151,470,976
Series B Convertible Preferred Stock
SERIES B CONVERTIBLE PREFERRED STOCK
Preferred stock, $0.001 par value; 3,323 shares authorized; 1,695 shares issued and outstanding at June 30, 2022; none issued and outstanding at June 30, 2021	$ 4,804,819	$ 0

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2022	Jun. 30, 2021
STOCKHOLDERS' EQUITY
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	42,608,758	36,772,983
Common stock, shares outstanding	42,583,758	36,747,983
Treasury stock, shares	25,000	25,000
Series B Convertible Preferred Stock
SERIES B CONVERTIBLE PREFERRED STOCK
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	3,323	3,323
Preferred stock, shares issued	1,695	1,695
Preferred stock, shares outstanding	1,695	1,695

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Income Statement [Abstract]
Revenue	$ 71,354,298	$ 84,049,036
Cost of revenue	64,999,136	70,372,139
Gross profit	6,355,162	13,676,897
Operating expenses
Selling, general and administrative expenses	24,470,730	21,867,529
Research and development expenses	7,710,642	8,515,786
Depreciation and amortization	5,460,321	5,469,581
Gain on disposal of property, plant and equipment	(31,088)	(1,906,738)
Goodwill impairment charges	1,548,324	0
Total operating expenses	39,158,929	33,946,158
Loss from operations	(32,803,767)	(20,269,261)
Other (income) expense
Foreign currency loss (gain)	777,913	(94,214)
Change in contingent consideration obligation	(714,429)	(4,016,904)
Interest expense - amortization of debt discount	898,497	689,514
Interest expense	2,212,302	2,283,215
Gain on sale of marketable security	(68,967)	0
Loss before income taxes	(35,909,083)	(19,130,872)
Provision for (benefit from) income taxes	413,423	(24,358)
Net loss	(36,322,506)	(19,106,514)
Net income attributable to noncontrolling interests	72,844	64,453
Net loss attributable to S&W Seed Company	(36,395,350)	(19,170,967)
Net loss attributable to S&W Seed Company	(36,395,350)	(19,170,967)
Dividends accrued for participating securities and accretion	(166,298)	0
Net loss attributable to common shareholders	$ (36,561,648)	$ (19,170,967)
Net loss attributable to S&W Seed Company per common share:
Basic	$ (0.93)	$ (0.55)
Diluted	$ (0.93)	$ (0.55)
Weighted average number of common shares outstanding:
Basic	39,133,681	34,590,883
Diluted	39,133,681	34,590,883

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (36,322,506)	$ (19,106,514)
Foreign currency translation adjustment, net of income taxes	(709,774)	260,598
Comprehensive loss	(37,032,280)	(18,845,916)
Comprehensive income attributable to noncontrolling interests	72,844	64,453
Comprehensive loss attributable to S&W Seed Company	$ (37,105,124)	$ (18,910,369)

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Deficit	Noncontrolling Interests	Accumulated Other Comprehensive Loss
Beginning Balance, amount at Jun. 30, 2020	$ 81,335,977	$ 33,458	$ (134,196)	$ 137,809,540	$ (50,140,942)	$ (120,459)	$ (6,111,424)
Beginning Balance, shares at Jun. 30, 2020		33,457,861	(25,000)
Stock-based compensation - options, restricted stock, and RSUs	1,766,353			1,766,353
Net issuance to settle RSUs, amount	(111,532)	$ 307		(111,839)
Net issuance to settle RSUs, shares		307,107
Proceeds from sale of common stock, net of fees and expenses, amount	10,223,311	$ 3,008		10,220,303
Proceeds from sale of common stock, net of fees and expenses, shares		3,008,015
Capital contribution from minority shareholder of subsidiary	25,000					25,000
Other comprehensive income (loss)	260,598						260,598
Net loss	(19,106,514)				(19,170,967)	64,453
Ending Balance, amount at Jun. 30, 2021	74,393,193	$ 36,773	$ (134,196)	149,684,357	(69,311,909)	(31,006)	(5,850,826)
Ending Balance, shares at Jun. 30, 2021		36,772,983	(25,000)
Stock-based compensation - options, restricted stock, and RSUs	2,267,180			2,267,180
Series B detachable warrant	322,972			361,729	(38,757)
Accrued dividends on Series B convertible preferred stock	(127,541)				(127,541)
Net issuance to settle RSUs, amount	(192,545)	$ 333		(192,878)
Net issuance to settle RSUs, shares		333,296
Proceeds from sale of common stock, net of fees and expenses, amount	11,777,690	$ 5,503		11,772,187
Proceeds from sale of common stock, net of fees and expenses, shares		5,502,479
Other comprehensive income (loss)	(709,774)						(709,774)
Net loss	(36,322,506)				(36,395,350)	72,844
Ending Balance, amount at Jun. 30, 2022	$ 51,408,669	$ 42,609	$ (134,196)	$ 163,892,575	$ (105,873,557)	$ 41,838	$ (6,560,600)
Ending Balance, shares at Jun. 30, 2022		42,608,758	(25,000)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (36,322,506)	$ (19,106,514)
Adjustments to reconcile net loss from operating activities to net cash used in operating activities
Stock-based compensation	2,267,180	1,766,353
Change in allowance for doubtful accounts	216,466	(235,201)
Inventory write-down	6,365,542	1,416,029
Depreciation and amortization	5,460,321	5,469,581
Gain on disposal of property, plant and equipment	(31,088)	(1,906,738)
Change in deferred tax provision	78,954	0
Change in foreign exchange contracts	971,386	79,403
Change in contingent consideration obligation	(714,429)	(4,016,904)
Amortization of debt discount	898,497	689,514
Changes in:
Accounts receivable	(422,335)	504,021
Inventories	688,903	648,448
Prepaid expenses and other current assets	(104,442)	(120,030)
Other non-current asset	(137,320)	54,259
Accounts payable	977,036	7,265,195
Deferred revenue	223,586	(5,786,697)
Accrued expenses and other current liabilities	1,226,353	(964,282)
Other non-current liabilities	(15,243)	22,521
Net cash used in operating activities	(18,373,139)	(14,221,042)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment	(2,098,535)	(1,079,880)
Proceeds from disposal of property, plant and equipment	200,605	782,645
Net proceeds from sale of marketable securities	988,504	0
Proceeds from sale of assets held for sale	0	2,771,480
Acquisition of germplasm	0	(8,499)
Net cash (used in) provided by investing activities	(909,426)	2,465,746
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock	11,777,690	10,223,311
Net proceeds from sale of Series B convertible preferred stock	5,000,250	0
Taxes paid related to net share settlements of stock-based compensation awards	(192,545)	(111,532)
Borrowings and repayments on lines of credit, net	1,770,219	4,954,687
Borrowings of long-term debt	868,372	385,636
Capital contribution from minority shareholder of subsidiary	0	25,000
Debt issuance costs	(692,779)	(196,952)
Repayments of long-term debt	(1,392,533)	(4,387,465)
Net cash provided by financing activities	17,138,674	10,892,685
EFFECT OF EXCHANGE RATE CHANGES ON CASH	672,462	267,454
NET DECREASE IN CASH & CASH EQUIVALENTS	(1,471,429)	(595,157)
CASH AND CASH EQUIVALENTS, beginning of the period	3,527,937	4,123,094
CASH AND CASH EQUIVALENTS, end of period	2,056,508	3,527,937
Cash paid during the period for:
Interest	2,357,445	2,244,478
Income taxes	$ 276,503	$ 366,502

XML

Background and Organization

12 Months Ended

Jun. 30, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

BACKGROUND AND ORGANIZATION

NOTE 1 - BACKGROUND AND ORGANIZATION

Organization

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. The Company 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.

In April 2013, the Company, together with its wholly-owned subsidiary, S&W Holdings Australia Pty Ltd, an Australia corporation (f/k/a S&W Seed Australia Pty Ltd), or S&W Holdings, consummated an acquisition of all of the issued and outstanding shares of Seed Genetics International Pty Ltd, an Australia corporation, or SGI, from SGI’s shareholders. In April 2018, SGI changed its name to S&W Seed Company Australia Pty Ltd, or S&W Australia.

In September 2018, the Company and AGT Foods Africa Proprietary Limited, or AGT, formed a venture based in South Africa named SeedVision Proprietary Limited, or SeedVision. SeedVision will leverage AGT's African-based production and processing facilities to produce S&W's hybrid sunflower, grain sorghum, and forage sorghum to be sold by SeedVision in the African continent, Middle East countries, and Europe.

As part of the Company’s 2018 acquisition of all the assets of Chromatin, Inc., the Company acquired 51.0% of Sorghum Solutions South Africa.

In February 2020, S&W Australia acquired all of the issued and outstanding shares of Pasture Genetics Ltd., or Pasture Genetics, from Pasture Genetics’ sole shareholder.

Business Overview

Since its establishment, the Company, including its predecessor entities, has been principally engaged in breeding, growing, processing and selling agricultural seeds. The Company operates seed cleaning and processing facilities, which are located in Idaho, Texas, New South Wales and 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.

The Company had a long-term distribution agreement with Pioneer Hi-Bred International, Inc., or Pioneer (now a subsidiary of Corteva Agriscience, Inc., or Corteva), regarding conventional (non-GMO) varieties, and a production agreement with Pioneer (relating to GMO-traited varieties). These agreements were terminated on May 20, 2019. See Note 4 for further discussion.

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.

In October 2018, the Company acquired substantially all of the assets of Chromatin, Inc., a U.S.-based sorghum genetics and seed company, as part of the Company's efforts to expand its penetration into the hybrid sorghum market.

In August 2019, S&W Australia, a wholly owned subsidiary of S&W Seed Company, licensed certain wheat germplasm varieties and acquired certain equipment from affiliates of Corteva.  In the transaction, S&W Australia paid a one-time license fee of $2.3 million and an equipment purchase price of $0.3 million.  The license has an initial term of 15 years.

In February 2020, S&W Australia acquired Pasture Genetics, the third largest pasture seed company in Australia, as part of the Company’s efforts to diversify its product offerings and expand its distribution channels.

XML

Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of S&W Seed Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, or GAAP, and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company's exercises control. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

The Company owns 50.1% of SeedVision, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and SeedVision is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of SeedVision because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of SeedVision, which are considered to be the activities that have the greatest impact on the future economic performance of SeedVision.

The Company owns 51.0% of Sorghum Solutions South Africa, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and Sorghum Solutions South Africa is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of Sorghum Solutions South Africa because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of Sorghum Solutions South Africa, which are considered to be the activities that have the greatest impact on the future economic performance of Sorghum Solutions South Africa.

Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. The Company recorded a combined $0.5 million of current assets (restricted) and $31,307 of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2022.

The Company recorded a combined $0.6 million of current assets (restricted) and $0.1 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2021.   

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, 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.

The COVID-19 pandemic and the efforts to contain it have, among other things, negatively impacted the global economy and created significant volatility and disruption of financial markets. In addition, the COVID-19 pandemic has significantly increased economic and demand uncertainty. The Company believes the estimates and assumptions underlying the accompanying consolidated financial statements are reasonable and supportable based on the information available at the time the financial statements were prepared.

However, uncertainty over the impact COVID-19 will have on the global economy and the Company’s business in particular makes many of the estimates and assumptions reflected in these consolidated financial statements inherently less certain. Therefore, actual results may ultimately differ from those estimates to a greater degree than historically.

Certain Risks and Concentrations

The Company’s revenue is principally derived from the sale of seed, the market for which is highly competitive. The Company depends on a core group of significant customers. No single customer accounted for more than 10% of revenue for the year ended June 30, 2022. One customer accounted for 19% of its revenue for the year ended June 30, 2021.

No customer accounted for more than 10% of the Company’s accounts receivable at June 30, 2022. One customer accounted for 11% of the Company’s accounts receivable at June 30, 2021.

The Company sells a substantial portion of its products to international customers. Sales to international markets represented 70% and 56% of revenue during the years ended June 30, 2022 and 2021, respectively. The net book value of fixed assets located outside the United States was 22% and 19% of total fixed assets at June 30, 2022 and June 30, 2021, respectively. Cash balances located outside of the United States may not be insured and totaled $811,551 and $204,813 at June 30, 2022 and June 30, 2021, respectively.

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

	Years Ended June 30,
	2022				2021
Australia	$	21,721,727	30	%	$	21,470,810	26	%
United States		21,053,335	30	%		37,124,047	44	%
Saudi Arabia		9,510,809	13	%		5,911,498	7	%
Pakistan		3,309,800	5	%		2,041,548	2	%
China		2,565,668	4	%		2,042,585	2	%
South Africa		1,946,153	3	%		2,456,216	3	%
Libya		1,739,105	2	%		1,249,554	2	%
Argentina		1,543,474	2	%		1,838,648	2	%
Sudan		1,443,748	2	%		1,218,168	1	%
Egypt		960,114	1	%		818,101	1	%
Other		5,560,365	8	%		7,877,861	10	%
Total revenue	$	71,354,298	100	%	$	84,049,036	100	%

Liquidity and COVID-19 Pandemic

The Company is monitoring the impact of the COVID-19 pandemic and the ongoing military conflict between Russia and Ukraine on its business, including its results of operations and financial condition, and has implemented measures designed to protect the health and safety of its employees while continuing its operations.  

The Company’s sales efforts historically involved significant in-person interaction with potential customers and distributors. Throughout the COVID-19 pandemic, many national, state and local governments in its target markets implemented various stay-at-home, shelter-in-place and other quarantine measures. As a result, the Company shifted its sales activities to video conferencing and similar customer interaction models and continues to evaluate its sales approach, but the Company found these alternative approaches to generally be less effective than in-person sales efforts. In particular, regular in-person customer interactions did not resume until February 2022 in some locations where the Company operates. If ongoing measures to protect against COVID-19 remain in effect throughout the

2023 sales season, the Company may experience similar negative impacts that it experienced during the 2021 and 2022 sales seasons.

In addition, the Company’s product revenue is predicated on its ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in the Company’s distribution and supply channels. If the Company’s customers delay or decrease their orders due to potential disruptions in its distribution and supply channels, or if the Company is unable to timely fulfill their orders, this would adversely affect the Company’s product revenue.

During the year ended June 30, 2022, the Company experienced numerous logistical challenges due to limited availability of trucks for product deliveries, congestion at the ports, and overall increases in shipping and transportation costs.  The Company expects these logistical challenges to persist well into fiscal 2023, which may, among other things, delay or reduce its ability to recognize revenue within a particular fiscal period and harm its results of operations.

Given the level of uncertainty regarding the duration and broader impact of the COVID-19 pandemic, the Company is unable to fully assess the extent of its impact on the Company’s operations.

For the year ended June 30, 2022, we reported a net loss of $36.3 million and net cash used in operations of $18.4 million. At June 30, 2022, we had cash on hand of $2.1 million.

The Company’s loan and security agreement with CIBC Bank USA, or CIBC, and the Company’s secured promissory note with Conterra Agriculture Capital, LLC, or Conterra, which mature on December 23, 2022, contain various operating and financial covenants (See Note 8). The COVID-19 pandemic and other factors affecting the Company’s results of operations have increased the risk of the Company’s inability to comply with these covenants, which could result in acceleration of its repayment obligations and foreclosure on its pledged assets. For example, the Company was not in compliance with certain of these covenants as of June 30, 2021, December 31, 2021, March 31, 2022, June 15, 2022 and June 30, 2022, and was required to obtain waivers and/or amendments from CIBC and Conterra. In particular, the CIBC loan agreement as presently in effect requires the Company to maintain minimum liquidity of no less than $1,000,000. The Company does not currently expect it will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet these covenants in certain periods prior to maturity. The Company will need to either raise additional capital, secure future waivers and/or amendments from its lenders, obtain financing from new lenders, and/or accomplish some combination of these items to maintain sufficient liquidity. The Company is actively pursuing refinancing of the CIBC debt facility. There can be no assurance the Company will be successful in raising additional capital, securing future waivers and/or amendments from its lenders, renewing or refinancing its existing debt or securing new financing. If the Company is unsuccessful in doing so, it may need to reduce the scope of its operations, repay amounts owing to its lenders or sell certain assets. These operating and liquidity factors raise substantial doubt regarding the Company’s ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.  

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 (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

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 $233,927 and $57,782 at June 30, 2022 and June 30, 2021, respectively.

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or net realizable value, 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.

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. Inventory quality is a function of germination percentage.  Our experience has shown that our alfalfa seed quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed as a material concern.  Hybrid crops (sorghum and sunflower) seed quality may be affected by warehouse storage pests such as insects and rodents.  The Company maintains a strict pest control program to mitigate risk and maximize hybrid seed quality.

Components of inventory are:

	June 30, 2022		June 30, 2021
Raw materials and supplies	$	2,645,764	$	2,722,832
Work in progress		6,677,980		6,662,006
Finished goods		45,192,150		54,010,418
Inventories, net	$	54,515,894	$	63,395,256

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 5-35 years for buildings, 2-20 years for machinery and equipment, and 2-5 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 3-30 years for technology/IP/germplasm, 5-20 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, 20 years for customer relationships, 16 years for trade names, 18 years for license agreements and 19 years for other intangible assets.

Goodwill

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  

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 or market capitalization of our common stock, 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 is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value is less than its carrying amount, management conducts a quantitative goodwill impairment test. The goodwill impairment test is used to identify potential impairment by comparing the fair value with its carrying amount, including goodwill. The Company uses market capitalization and an estimate of a control premium to estimate the fair value. If the estimated fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its estimated fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company performed a quantitative assessment of goodwill at June 30, 2022 on its one reporting unit and determined that goodwill was fully impaired. See Note 6 for further information.

The Company performed a quantitative assessment of goodwill at June 30, 2021 on its one reporting unit and determined that goodwill was not impaired.

Investment in Bioceres S.A.

The Company owns less than 1% of Bioceres, S.A., a provider of crop productivity solutions headquartered in Argentina.  The carrying value of the investment is $0.4 million at June 30, 2022 and $1.3 million at June 30, 2021, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted Accounting Standards Update, or ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities beginning July 1, 2018.  As such, this investment is accounted for in accordance with ASC 321, Investments – Equity Securities. As the stock is not publicly traded, the Company has elected to account for its investment at cost, with adjustments to fair value when there are observable transactions that provide an indicator of fair value.  In addition, if qualitative factors indicate a potential impairment, fair value must be estimated and the investment written down to that fair value if it is lower than the carrying value.

During the year ended June 30, 2022, the Company sold 71.4% of the investment in Bioceres, S.A. for net proceeds of $988,504, which included a gain on sale of marketable securities of $68,967.

No adjustments for impairment were made in fiscal years 2022 or 2021.  

Research and Development Costs

The Company is engaged in ongoing research and development, or 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 years ended June 30, 2022 and 2021 has been affected 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, or 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 and restricted stock awards. 

The treasury stock method is used for 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 net number of shares assumed to be issued added to the denominator.

The Company computes earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. The Series B Redeemable Convertible Non-Voting Preferred Stock, par value $0.001 per share, or the Series B Preferred Stock, and warrant are participating securities because holders of such shares have non-forfeitable dividend rights and participate in any undistributed earnings with common stock. Under the two-class method, total dividends provided to the holders of participating securities and undistributed earnings allocated to participating securities, are subtracted from net income attributable to the Company in determining net loss attributable to common shareholders. During the year ended June 30, 2022, there were $127,541 in accrued dividends subtracted from net income attributable to common shareholders; there were no undistributed earnings to allocate to the participating securities. Additionally, any accretion to the redemption value for the Series B Preferred Stock is treated as a deemed dividend in the two-class EPS calculation. During the year ended June 30, 2022, $38,757 was accreted to the redemption value of the Series B Preferred Stock and subtracted from net income attributable to common shareholders.

The calculation of Basic and Diluted EPS is shown in the table below. 

	Years Ended June 30,
	2022			2021
Numerator:
Net loss attributable to S&W Seed Company	$	(36,395,350	)	$	(19,170,967	)
Dividends accrued for participating securities and accretion		(166,298	)		—
Numerator for basic and diluted EPS	$	(36,561,648	)	$	(19,170,967	)
Denominator:
Denominator for basic EPS - weighted average    shares		39,133,681			34,590,883
Effect of dilutive securities:
Employee stock options		—			—
Employee restricted stock units		—			—
Dilutive potential common shares		—			—
Denominator for diluted EPS - adjusted weighted    average shares and assumed conversions		39,133,681			34,590,883
Basic EPS	$	(0.93	)	$	(0.55	)
Diluted EPS	$	(0.93	)	$	(0.55	)

The effects of employee stock options and restricted stock units are excluded because they would be anti-dilutive due to the Company’s net loss for the years ended June 30, 2022 and 2021.  

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. Refer to Note 6 for impairment discussion.

Derivative Financial Instruments

Foreign Exchange Contracts

The Company’s subsidiary, S&W Australia, 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.

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.

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.

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

	Fair Value Measurements as of June 30, 2022 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	996,106	$	—
Contingent consideration obligations		—		—		—
Total	$	—	$	996,106	$	—

	Fair Value Measurements as of June 30, 2021 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	96,466	$	—
Contingent consideration obligations		—		—		741,552
Total	$	—	$	96,466	$	741,552

Recently Adopted Accounting Pronouncements

The Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes effective July 1, 2021. This ASU is intended to simplify various aspects to accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The adoption of this ASU had no impact on the Company’s consolidated financial statements and related disclosures.

The Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity effective July 1, 2021. This ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt–Debt with Conversion and other Options, for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. This will also result in the interest expense recognized for convertible debt instruments to be typically closer to the coupon interest rate when applying the guidance in Topic 835, Interest. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible debt instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted for periods beginning after December 15, 2020. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. At the time of adoption, we had no outstanding convertible instruments and no adjustments were recognized to our July 1, 2021 accumulated deficit. The adoption of this ASU had no impact on the Company’s consolidated financial statements and related disclosures.

XML

Leases

12 Months Ended

Jun. 30, 2022

Lessee Disclosure [Abstract]

LEASES

NOTE 3 - LEASES

S&W leases office and laboratory space, field research plots and equipment used in connection with its operations under various operating and finance leases.

Right-of-use, or ROU, assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the net present value of the Company’s obligation to make payments arising from these leases. The lease liabilities are based on the present value of fixed lease payments over the lease term using the implicit lease interest rate or, when unknown, the Company's incremental borrowing rate on the lease commencement date or July 1, 2019 for leases that commenced prior to that date. If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the option(s). Operating lease expense is recognized on a straight-line basis over the term of the lease. As permitted by ASC 842, leases with an initial term of twelve months or less, or short-term leases, are not recorded on the accompanying consolidated balance sheet.

The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component under the practical expedient provisions of the standard. The Company has lease agreements with terms less than one year. For the qualifying short-term leases, the Company elected the short-term lease recognition exemption in which the Company will not recognize ROU assets or lease liabilities, including the ROU assets or lease liabilities for existing short-term leases of those assets upon adoption.

Variable lease payments consist primarily of common area maintenance, utilities and taxes, which are not included in the recognition of ROU assets and related lease liabilities.  Variable lease payments and short-term lease expenses were immaterial to the Company’s financial statements for the year ended June 30, 2022. The Company’s lease agreements do not contain material restrictive covenants.

The components of lease assets and liabilities are as follows:

Leases	Balance Sheet Classification:	June 30, 2022
Assets:
Right of use assets - operating leases	Other assets	$	4,094,253
Right of use assets - finance leases	Other assets		2,071,609
Accumulated amortization - finance leases	Other assets		(1,131,842	)
Right of use assets - finance leases, net	Other assets		939,767
Total lease assets		$	5,034,020
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net	$	804,309
Current lease liabilities	Accrued expenses and other current liabilities		1,341,198
Long-term debt, net, less current portion	Long-term debt, net, less current portion		500,723
Long-term lease liabilities	Other non-current liabilities		3,042,311
Total lease liabilities		$	5,688,541

The components of lease cost are as follows:

Lease cost:	Income Statement Classification:	Year Ended June 30, 2022
Operating lease cost	Cost of revenue	$	692,210
Operating lease cost	Selling, general and administrative expenses		307,368
Operating lease cost	Research and development expenses		375,905
Finance lease cost	Depreciation and amortization and Interest expense		715,202
Total lease costs		$	2,090,685

Maturities of lease liabilities as of June 30, 2022 are as follows:

	Operating Leases			Finance Leases
2023	$	1,478,640		$	636,178
2024		1,243,871			472,039
2025		861,779			305,293
2026		687,202			58,721
2027		402,439			7,312
After 2027		77,558			—
Total lease payments		4,751,489			1,479,543
Less: Interest		(367,980	)		(174,512	)
Present value of lease liabilities	$	4,383,509		$	1,305,031

The following are the weighted average assumptions used for lease term and discount rate and supplemental cash flow information related to leases as of June 30, 2022:

Operating lease remaining lease term	4.0 years
Operating lease discount rate		4.29	%
Finance lease remaining lease term	1.3 years
Finance lease discount rate		5.50	%
Cash paid for operating leases	$	1,481,024
Cash paid for finance leases		1,088,090

XML

Pioneer Relationship

12 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

PIONEER RELATIONSHIP

NOTE 4 – PIONEER RELATIONSHIP

Distribution and Production Agreements with Pioneer

In 2014, the Company purchased from Pioneer certain assets related to alfalfa and entered into a long-term contract to sell alfalfa seed to Pioneer under a production agreement (GMO varieties) and a distribution agreement (conventional varieties). Under the production and distribution agreements with Pioneer, the Company grew, processed, and delivered alfalfa seed for and to Pioneer.  See Note 5 for a discussion of the recognition of revenue under these agreements.  

On May 22, 2019, the Company and Pioneer terminated the production and distribution agreements.  As part of the termination, Pioneer’s parent company, Corteva, agreed to purchase from the Company certain quantities of seed held by the Company as of that date that Pioneer was not previously obligated to purchase. Those quantities of seed were delivered to Corteva periodically through March 2021.  

The Company does not expect to sell any other products to Pioneer or Corteva beyond those quantities of seed.  

License Agreement with Corteva

Contemporaneously with the termination, the Company entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of the Company's alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the Company's existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties. The Company also assigned to Corteva grower production contract rights, and Corteva assumed grower production contract obligations, related to the licensed and certain other alfalfa varieties.  Corteva received no license to the Company's other commercial alfalfa varieties or pre-commercial alfalfa pipeline products and no rights to any future products developed by the Company.

Payments Due from Corteva and Pioneer

The Company received a payment of approximately $8.3 million in fiscal 2021 from Pioneer/Corteva.

This amount was recognized as revenue as the seed was delivered to Corteva through March 2021.  The amount allocated to the seed represents the estimated standalone selling price of those quantities of seed, determined based on the Company’s normal profit margin on the quantities and varieties of seed that Corteva agreed to purchase.

XML

Revenue Recognition

12 Months Ended

Jun. 30, 2022

Revenues [Abstract]

REVENUE RECOGNITION

NOTE 5 - REVENUE RECOGNITION

The Company derives its revenue from 1) the sale of seed, 2) milling and packaging services, 3) research and development services and 4) product licensing agreements.

The following table disaggregates the Company's revenue by type of contract:

	Years Ended June 30,
	2022		2021
Pioneer product sales	$	—	$	14,198,857
Other product sales		69,425,407		67,234,359
Services		1,928,891		2,615,820
Total revenue	$	71,354,298	$	84,049,036

Pioneer Product Sales

For the year ended June 30, 2021, Pioneer product sales consisted of product shipments to Pioneer under the termination agreement discussed in Note 4.

Other Product Sales

Revenue from other product sales is recognized at the point in time at which control of the product is transferred to the customer. Generally, this occurs upon shipment of the product. Pricing for such transactions is negotiated and determined at the time the contracts are signed. We have elected the practical expedient that allows us to account for shipping and handling activities as a fulfillment cost, and we accrue those costs when the related revenue is recognized.

The Company has certain contracts with customers that offer a limited right of return on certain branded products. The products must be in an unopened and undamaged state and must be resalable in the sole opinion of the Company to qualify for refund.  Returns are only accepted on product received by August 31^st of the current sales year.  The Company uses a historical returns percentage to estimate the refund liability and records a reduction of revenue in the period in which revenue is recognized.

Services

Revenue from milling services, conditioning, treating and packaging services, which are performed on the customer's product, is recognized as services are completed and the milled product is delivered to the customer.

Revenue from research and development services is recognized over time as the services are performed.

Payment Terms and Related Balance Sheet Accounts

Accounts receivable represent amounts that are payable to the Company by its customers subject only to the passage of time. Payment terms on invoices are generally 30 to 180 days for export customers and end of sales season (October 31^st) for branded products sold within the United States. As the period between the transfer of goods and/or services to the customer and receipt of payment is less than one year, the Company does not separately account for a financing component in its contracts with customers.

Unbilled receivables represent contract assets that arise when the Company has partially performed under a contract but is not yet able to invoice the customer until the Company has made additional progress. Unbilled receivables arose from the distribution and production agreements with Pioneer for which the Company recognized revenue over time, as the Company bills for these arrangements upon product delivery, while revenue was recognized, as described above, as costs were incurred. Unbilled receivables may arise as much as three months before billing is expected to occur. Unbilled receivables are generally expected to be generated in the first and second fiscal quarters, and to be billed in the second, third and fourth fiscal quarters.

Losses on accounts receivable and unbilled receivables are recognized if and when it becomes probable that amounts will not be paid. These losses are reversed in subsequent periods if these amounts are paid. During the period ended June 30, 2022, the Company recognized bad debt expense of $216,466 associated with impaired accounts receivable.  During the year ended June 30, 2021, the Company recognized a net gain from collections on amounts previously written off to bad debt expense of $235,201.  

Deferred revenue represents payments received from customers in advance of completion of the Company's performance obligation.  During the year ended June 30, 2022, the Company recognized $0.3 million of revenue that was included in the deferred balance as of June 30, 2021. During the year ended June 30, 2021, the Company recognized $6.2 million of revenue that was included in the deferred balance as of June 30, 2020.

XML

Goodwill and Intangible Assets

12 Months Ended

Jun. 30, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

NOTE 6 – GOODWILL AND INTANGIBLE ASSETS

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  

During the fourth quarter of the fiscal year ended June 30, 2022, the Company had a sustained decline in market valuation of its common stock, thereby triggering a potential indicator of goodwill impairment. As a result, the Company initiated a goodwill impairment test for the year ended June 30, 2022.

The Company compared the carrying value of its invested capital to estimated fair values at June 30, 2022. The Company estimated the fair value using the market approach and a control premium (based on management’s best estimate) was added.

Upon completing the impairment test, the Company determined that the estimated fair value of invested capital was less than the carrying value by approximately 3%, thus indicating an impairment. The Company recognized a goodwill impairment charge of $1.5 million for the year ended June 30, 2022, which represented the entire goodwill balance prior to the impairment charge.

The following table summarizes the activity of goodwill for the years ended June 30, 2022 and 2021, respectively:

	Balance at July 1, 2021		Additions		Impairment			Currency Translation Adjustment			Balance at June 30, 2022
Goodwill	$	1,651,634	$	—	$	(1,548,324	)	$	(103,310	)	$	—

	Balance at July 1, 2020		Additions		Impairment		Currency Translation Adjustment		Balance at June 30, 2021
Goodwill	$	1,508,675	$	—	$	—	$	142,959	$	1,651,634

For the years ended June 30, 2022 and 2021, the Company determined there was no impairment on its intangible assets.

Intangible assets consist of the following:

	Balance at July 1, 2021		Additions		Amortization			Currency Translation Adjustment			Balance at June 30, 2022
Trade name	$	1,310,489	$	—	$	(203,009	)	$	(22,689	)	$	1,084,791
Customer relationships		6,302,591		—		(373,393	)		(429,383	)		5,499,815
Non-compete		5,058		—		(5,058	)		—			—
GI customer list		50,146		—		(7,163	)		—			42,983
Supply agreement		850,874		—		(75,633	)		—			775,241
Grower relationships		1,436,988		—		(105,407	)		—			1,331,581
Intellectual property		24,427,857		—		(1,391,932	)		—			23,035,925
In process research and development		—		—		—			—			—
License agreement		2,340,269		—		(172,004	)		(181,667	)		1,986,598
Internal use software		406,670		—		(67,777	)		—			338,893
	$	37,130,942	$	—	$	(2,401,376	)	$	(633,739	)	$	34,095,827

	Balance at July 1, 2020		Additions			Amortization			Currency Translation Adjustment		Balance at June 30, 2021
Trade name	$	1,479,278	$	—		$	(206,311	)	$	37,522	$	1,310,489
Customer relationships		6,187,086		—			(376,431	)		491,936		6,302,591
Non-compete		21,312		—			(16,254	)		—		5,058
GI customer list		57,310		—			(7,164	)		—		50,146
Supply agreement		926,507		—			(75,633	)		—		850,874
Grower relationships		1,542,393		—			(105,405	)		—		1,436,988
Intellectual property		25,415,665		388,499			(1,376,307	)		—		24,427,857
In process research and development		380,000		(380,000	)		—			—		—
License agreement		2,300,059		—			(176,646	)		216,856		2,340,269
Internal use software		474,448		—			(67,778	)		—		406,670
	$	38,784,058	$	8,499		$	(2,407,929	)	$	746,314	$	37,130,942

Amortization expense totaled $2,401,376 and $2,407,929 for the years ended June 30, 2022 and 2021, respectively.

Estimated aggregate remaining amortization is as follows:

	2023		2024		2025		2026		2027		Thereafter
Amortization expense	$	2,395,678	$	2,372,718	$	2,338,707	$	2,252,740	$	2,201,856	$	22,534,128

XML

Property, Plant and Equipment

12 Months Ended

Jun. 30, 2022

Property Plant And Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

	June 30, 2022			June 30, 2021
Land and improvements	$	2,265,087		$	2,297,529
Buildings and improvements		8,119,960			8,196,593
Machinery and equipment		14,972,462			13,935,053
Vehicles		1,085,342			1,046,937
Leasehold improvements		552,810			552,810
Construction in progress		110,107			48,480
Total property, plant and equipment		27,105,768			26,077,402
Less: accumulated depreciation		(10,234,099	)		(8,336,428	)
Property, plant and equipment, net	$	16,871,669		$	17,740,974

Depreciation expense totaled $2,433,319 and $2,518,356 for the years ended June 30, 2022 and 2021, respectively.

XML

Debt

12 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

DEBT

NOTE 8 - DEBT

Total debt outstanding is presented on the consolidated balance sheet as follows:

	June 30, 2022			June 30, 2021
Current portion of working capital lines of credit
CIBC	$	12,804,611		$	14,500,000
National Australia Bank Limited		338,314			19,494,800
National Australia Bank Limited Overdraft Facility		—			617,471
Debt issuance costs		(464,028	)		(665,706	)
Total current portion of working capital lines of credit, net		12,678,897			33,946,565
Long-term portion of working capital lines of credit, less current portion
National Australia Bank Limited		21,703,286			—
Total long-term portion of working capital lines of credit		21,703,286			—
Total working capital lines of credit, net	$	34,382,183		$	33,946,565
Current portion of long-term debt
Finance leases	$	804,309		$	909,413
Debt issuance costs		(1,828	)		(5,077	)
Term Loan - National Australia    Bank Limited		344,400			374,900
Machinery & equipment loans -    National Australia Bank Limited		246,547			160,632
Machinery & equipment loans - Hyster		11,834			5,170
Vehicle loans - Ford Credit		40,341			—
Secured real estate note - Conterra		6,905,995			275,684
Debt issuance costs		(34,815	)		(39,556	)
Total current portion, net		8,316,783			1,681,166
Long-term debt, less current portion
Finance leases		500,723			1,108,709
Debt issuance costs		(21	)		(1,847	)
Term loan - National Australia    Bank Limited		2,410,800			2,999,200
Machinery & equipment loans -    National Australia Bank Limited		963,733			508,641
Machinery & equipment loans - Hyster		28,722			17,923
Vehicle loans - Ford Credit		88,583			—
Secured real estate note - Conterra		—			6,974,356
Debt issuance costs		—			(16,482	)
Total long-term portion, net		3,992,540			11,590,500
Total debt, net	$	12,309,323		$	13,271,666

On December 26, 2019, the Company entered into a Loan and Security Agreement, or the Loan Agreement, with CIBC Bank USA, or CIBC, which originally provided for a $35.0 million credit facility, or the CIBC Credit Facility.  The Loan Agreement was subsequently amended on September 22, 2020 December 30, 2020, May 12, 2021, September 27, 2021, May 13, 2022 and September 22, 2022. As amended, the Loan Agreement provides for a $18.0 million credit facility. The following is a summary of certain terms of the CIBC Credit Facility:

• Advances under the CIBC Credit Facility are to be used: (i) to finance the Company’s ongoing working capital requirements; and (ii) for general corporate purposes.

• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the CIBC Credit Facility, will be payable in full on December 23, 2022.

• The CIBC Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable (90% of eligible foreign accounts receivable) plus up to the lesser of (i) 65% of eligible inventory, (ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) an eligible inventory sublimit as more fully set forth in the Loan Agreement, in each case, subject to lender reserves.

• Loans are based on (i) a Base Rate plus 2.0% per annum. In the event of a default, at the option of CIBC, the interest rate on all obligations owing will increase by 2% per annum over the rate otherwise applicable.

• The CIBC Credit Facility is secured by a first priority perfected security interest in substantially all of the Borrowers’ assets (subject to certain exceptions), including intellectual property.

• The Loan Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default that permit CIBC to accelerate the Company’s outstanding obligations under the CIBC Credit Facility, all as set forth in the Loan Agreement and related documents. The CIBC Credit Facility also contains customary and usual financial covenants imposed by CIBC.

Pursuant to the September 22, 2022 amendment, among other things, (i) the total revolving commitment provided under the Loan Agreement has been reduced to $18.0 million from $20.0 million; (ii) CIBC waived noncompliance with the Company’s minimum liquidity requirements as of June 15, 2022; (iii) the minimum liquidity financial covenant has been adjusted to require weekly testing that the Company maintain no less than $1.0 million of Liquidity (as defined in the Loan Agreement). After giving effect to the May 2022 amendment, the Company was not in compliance with the Loan Agreement for the year ended June 30, 2022 and obtained a waiver from CIBC to continue to be in compliance with the financial covenants under the Loan Agreement.

As of June 30, 2022, there was approximately $1.9 million of unused availability on the CIBC Credit Facility.

In November 2017, the Company entered into a secured note financing transaction, or the Loan Transaction, with Conterra Agricultural Capital, LLC, or Conterra, for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, the Company issued a secured real estate note to Conterra in the principal amount of $10.4 million, which bears interest at 7.75% per annum and is secured by a first priority security interest in the property, plant and fixtures located at the Company's Nampa, Idaho production facilities and its Nampa, Idaho research facilities. In January 2021, the Company completed the sale of its Five Points facility which resulted in the Company making a one-time principal pay-down of $1,706,845 on the secured real estate note. The final semi-annual principal and interest payment of $454,185 was made on July 1, 2022. On September 22, 2022, the Company entered into an amendment to extend the note’s maturity date to December 23, 2022. The Company is required to make a one-time final payment of approximately $6,969,668 on December 23, 2022. The Company was not in compliance with the total debt coverage ratio as of June 30, 2022; Conterra provided a waiver.

On August 15, 2018, the Company completed a sale and leaseback transaction with American AgCredit involving certain equipment located at the Company's Five Points, California and Nampa, Idaho production facilities. Due to its terms, the sale and leaseback transaction was required to be accounted for as a financing arrangement. Accordingly, the proceeds received from American AgCredit were accounted for as proceeds from a debt financing. Under the terms of the transaction:

• The Company sold the equipment to American AgCredit for $2,106,395 million in proceeds. The proceeds were used to pay off in full a note (in the principal amount of $2,081,527, plus accrued interest of $24,868) held by Conterra Agricultural Capital, LLC, which had an interest rate of 9.5% per annum and was secured by, among other things, the equipment.

• The Company entered into a lease agreement with American AgCredit relating to the equipment. The lease agreement has a five-year term and provides for monthly lease payments of $40,023 (representing an

annual interest rate of 5.6%). At the end of the lease term, the Company will repurchase the equipment for $1. During January 2021, the Company completed the sale of its Five Points facility which triggered the Company making a one-time principal pay down of $294,163 on the finance lease agreement.

Australian Facilities

At June 30, 2022, S&W Australia has debt facilities with National Australia Bank, or NAB, all of which are guaranteed by S&W Seed Company up to a maximum of AUD $15,000,000 (USD $10,332,000).

On November 11, 2021, S&W Australia amended its debt facilities with NAB pursuant to which:

• the borrowing base line credit limit under the seasonal credit facility increased from AUD $26,000,000 (USD $18,722,600 at September 30, 2021), to AUD $32,000,000 (USD $22,041,600 at June 30, 2022);

• the overdraft credit limit under the seasonal credit facility, or Overdraft Facility, decreased from AUD $3,000,000 (USD $2,160,300 at September 30, 2021) to AUD $2,000,000 (USD $1,497,400 at March 31, 2022). It then further decreased to AUD $1,000,000 (USD $748,700 on April 1, 2022). According to the agreement, the overdraft credit limit was to decrease to zero at June 30, 2022; but with NAB’s approval of the temporary extension of the Overdraft Facility, the credit limit remains AUD $1,000,000 (USD $688,800) at June 30, 2022;

• the credit limit under the master asset finance facility increased from AUD $2,000,000 (USD $1,440,200 at September 30, 2021) to AUD $3,000,000 (USD $2,066,400 at June 30, 2022); and

• the month in which annual principal repayments are required on the flexible rate loan was adjusted from November to May of each fiscal year.

After the amendment, the consolidated debt facilities with NAB provide for up to an aggregate of AUD $40,000,000 (USD $27,552,000) of credit as of June 30, 2022, and include the following:

• S&W Australia finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facility comprised of two facility lines: (i) an Overdraft Facility having a credit limit of AUD $1,000,000 (USD $688,800 at June 30, 2022) and (ii) a Borrowing Base Line having a credit limit of AUD $32,000,000 (USD $22,041,600 at June 30, 2022). As of June 30, 2022, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 4.90% per annum calculated daily. The Overdraft Facility permits S&W Australia 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 June 30, 2022, the Overdraft Facility accrued interest at approximately 5.72% per annum calculated daily. As of June 30, 2022, AUD $32,000,000 (USD $22,041,600) was outstanding under S&W Australia’s seasonal credit facility with NAB.  The seasonal credit facility is secured by a fixed and floating lien over all the present and future rights, property, and undertakings of S&W Australia.       

• S&W Australia has a flexible rate loan, or the Term Loan, in the amount of AUD $4,000,000 (USD $2,755,200 at June 30, 2022). Required annual principal payments of AUD $500,000 on the Term Loan commenced on November 30, 2020, with the remainder of any unpaid balance becoming due on March 31, 2025. As part of the amendment, the November 2021 repayment was deferred to May 2022, with AUD $500,000 (USD $344,400) being paid and the remaining payments due in May of each year. Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%.  The Term Loan is secured by a lien on all the present and future rights, property and undertakings of S&W Australia.

• S&W Australia finances certain equipment purchases under a master asset finance facility with NAB.  The master asset finance facility has various maturity dates through 2029 and have interest rates ranging from 2.86% to 5.03%.  The credit limit under the facility is AUD $3,000,000 (USD $2,066,400) at June 30, 2022.  As of June 30, 2022, AUD $1,757,085 (USD $1,210,280) was outstanding under S&W Australia’s master asset finance facility.

S&W Australia was in compliance with all debt covenants under its debt facilities with NAB at June 30, 2022.

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

Fiscal Year	Amount
2023	$	8,353,426
2024		1,050,062
2025		2,399,706
2026		278,595
2027		264,198
Thereafter		—
Total	$	12,345,987

XML

Income Taxes

12 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9 - INCOME TAXES

Loss before income taxes consists of the following:

	Years Ended June 30,
	2022			2021
United States	$	(37,346,576	)	$	(22,519,842	)
Foreign		1,437,493			3,388,970
Loss before income taxes	$	(35,909,083	)	$	(19,130,872	)

Significant components of the provision for income taxes from continuing operations are as follows:

	Years Ended June 30,
	2022			2021
Current:
Federal	$	—		$	—
State		301			(5,385	)
Foreign		266,129			(197,163	)
Total current provision		266,430			(202,548	)
Deferred:
Federal		(1	)		—
State		—			—
Foreign		146,994			178,190
Total deferred provision		146,993			178,190
Provision for (benefit from) income taxes	$	413,423		$	(24,358	)

The differences between the total calculated income tax provision and the expected income tax computed using the U.S. federal income tax rate are as follows:

	Years Ended June 30,
	2022			2021
Tax benefit at statutory tax rate	$	(7,540,908	)	$	(4,018,362	)
State benefit, net of federal benefit		(493,262	)		(417,868	)
Federal and state research credits - current year		(390,235	)		(675,527	)
Other permanent differences		184,725			(110,860	)
Foreign rate differential		420,829			431,265
Goodwill impairment		549,577			—
Valuation allowance		7,573,300			5,178,300
Tax law changes		—			(411,306	)
Other		109,397			—
Provision for (benefit from) income taxes	$	413,423		$	(24,358	)

Significant components of the Company's deferred tax assets and liabilities are as follows:

	June 30, 2022			June 30, 2021
Deferred tax assets:
Net operating loss carry forwards	$	22,815,372		$	15,623,619
Tax credit carry forwards		1,388,106			1,169,978
Allowance for bad debts		1,216,187			1,378,422
Lease liability		1,187,090			1,209,560
Other, net		3,116,913			3,214,948
Total deferred tax assets		29,723,668			22,596,527
Valuation allowance for deferred tax assets		(27,437,845	)		(19,892,644	)
Deferred tax assets, net of valuation allowance		2,285,823			2,703,883
Deferred tax liabilities:
ROU lease asset		(1,226,879	)		(1,293,365	)
Fixed assets		(1,382,821	)		(1,588,708	)
Total deferred tax liabilities		(2,609,700	)		(2,882,073	)
Net deferred tax asset (liability)	$	(323,877	)	$	(178,190	)

The Company recognizes federal and state current tax liabilities or assets based on its estimate of taxes payable to or refundable from tax authorities in the current fiscal year.  The Company also recognizes federal and state deferred tax liabilities or assets based on the Company’s estimate of future tax effects attributable to temporary differences and carryforwards.  The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized.

In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future taxable income and planning strategies in making this assessment. Based on projections of taxable income, the Company had previously determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, a full valuation allowance was recorded as of June 30, 2017.  The Company’s valuation allowance position has not changed for the years ended June 30, 2022 and June 30, 2021, respectively, as the Company does not believe that it is more likely than not that it will realize its deferred tax assets.  The valuation allowance increased by approximately $7.5 million for the year ended June 30, 2022, related primarily to losses generated in the current year.

The U.S. Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on a corporation's ability to utilize net operating loss carryovers, or NOLs, if it experiences an ownership change as defined in Section 382.  In general terms, an ownership change may result from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50% over a three-year period.  In the event that an ownership change has occurred, or were to occur, utilization of the Company’s NOLs would be subject to an annual limitation under Section 382 as determined by multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate as defined in the Internal Revenue Code.  Any unused annual limitation may be carried over to later years.  The Company could experience an ownership change under Section 382 as a result of events in the past in combination with events in the future.  If so, the use of the Company’s NOLs, or a portion thereof, against future taxable income may be subject to an annual limitation under Section 382, which may result in expiration of a portion of the NOLs before utilization.  To the extent our use of net operating loss carryforwards is significantly limited under the rules of Section 382, our income could be subject to U.S. corporate income tax earlier than it would if we were able to use net operating loss carryforwards, which could result in lower profits.  Any carryforwards that expire prior to utilization as a result of such limitations will be removed, if applicable, from deferred tax assets with a corresponding reduction of the valuation allowance.  As of June 30, 2022, the Company is not aware of any applicable Section 382 limitations that may exist on its net operating losses.

As of June 30, 2022, the Company had federal and state net operating loss carryovers of approximately $98.7 million and $32.9 million, respectively, which will begin to expire June 30, 2031, unless previously utilized. A

portion of the federal net operating losses generated after June 30, 2018 can be carried forward indefinitely, which total $74.2 million. The Company has federal research credits of $1,275,701 which will expire June 30, 2031, unless previously utilized. The Company also has foreign tax credits of $322,859 which will begin to expire June 30, 2023, unless previously utilized. The Company has state research credits of $25,089 that do not expire. The Company also has $0 Australian net operating loss carryovers as of the year ended June 30, 2022. In addition, the Company has $5.2 million of Section 163(j) interest limitation carryovers as of June 30, 2022 which do not expire.

As of June 30, 2022, the Company has not provided for foreign withholding taxes on approximately $7.4 million of undistributed earnings of its foreign subsidiaries, as these earnings are considered indefinitely reinvested outside of the United States. The Company does not plan to repatriate any earnings that are currently located in its foreign subsidiaries as of June 30, 2022.  

The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes.  

The Company has approximately $77,350 of unrecognized tax benefits related to current year tax positions as of June 30, 2022. Included in the unrecognized tax benefits was approximately $61,106 of tax benefits that, if recognized, would reduce our annual effective tax rate, if the Company were not in a valuation allowance position. However, as the Company is in a full valuation allowance position, there would be no impact to the annual effective tax rate if the tax benefits were recognized.

The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. The Company has not accrued interest and penalties associated with uncertain tax positions as of June 30, 2022 and 2021. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, or the CARES Act was signed into law. The CARES Act provides a substantial stimulus and assistance package intended to address the impact of the COVID-19 pandemic, including tax relief and government loans, grants and investments. The CARES Act did not have a material impact on the Company’s consolidated financial statements for the years ended June 30, 2022 and 2021.

On March 11, 2021, the American Rescue Act, or ARPA, was signed into law. The ARPA strengthens and extends certain federal programs enacted through the CARES Act and other COVID-19 relief measures, and establishes new federal programs, including provisions on taxes, healthcare and unemployment benefits. The ARPA did not have a material impact on the Company’s consolidated financial statements for the years ended June 30, 2022 and 2021.

XML

Foreign Currency Contracts

12 Months Ended

Jun. 30, 2022

Foreign Currency [Abstract]

FOREIGN CURRENCY CONTRACTS

NOTE 10 - FOREIGN CURRENCY CONTRACTS

The Company’s subsidiary, S&W Australia, 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 $14,775,693 at June 30, 2022 and their maturities range from July 2022 to January 2023.

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 liabilities totaled $996,106 and $96,466 at June 30, 2022 and 2021, respectively. The Company recorded a loss on foreign exchange contracts of $958,373 and $79,403 for the years ended June 30, 2022 and 2021, respectively, which are reflected in cost of revenue.

XML

Commitments and Contingencies

12 Months Ended

Jun. 30, 2022

Commitments And Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 11 - COMMITMENTS AND CONTINGENCIES

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.

Legal Matters

The Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. Any current litigation is considered immaterial and counter claims have been assessed as remote.

XML

Equity

12 Months Ended

Jun. 30, 2022

Equity [Abstract]

EQUITY

NOTE 12 - EQUITY

On September 23, 2020, the entered into an At Market Issuance Sales Agreement, or the ATM Agreement, with B. Riley Securities, Inc., or B. Riley, under which the Company may offer and sell from time to time, at its sole discretion, shares of its common stock having an aggregate offering price of up to $14.0 million through B. Riley as its sales agent. The Company agreed to pay B. Riley a commission of 3.5% of the gross proceeds of the sales price per share of any common stock sold through B. Riley under the ATM Agreement. For the year ended June 30, 2021, the Company received gross proceeds of approximately $10.9 million from the sale of 3,008,015 shares of its common stock pursuant to the ATM Agreement.

On September 27, 2021, the Company entered into an amendment to the ATM Agreement, under which the aggregate offering price was increased from $14.0 million to $17.1 million. For the year ended June 30, 2022, the Company received gross proceeds of approximately $6.2 million from the sale of 2,633,900 shares of its common stock pursuant to the ATM Agreement. As of June 30, 2021, the Company had $0 million remaining under the ATM Agreement.

On May 17, 2022, the Company amended the ATM Agreement to having an aggregate offering price of $24.6 million. As of June 30, 2022, the Company had $6.3 million remaining under the ATM Agreement.

On October 14, 2021, the Company entered into a Securities Purchase Agreement with MFP Partners, L.P., or MFP, the Company’s largest stockholder, Starlight 4, LLLP, an entity affiliated with Mark W. Wong, the Company’s Chief Executive Officer and a member of its board of directors, and Alan D. Willits, Charles B. Seidler and Robert Straus, each a member of its board of directors, pursuant to which the Company sold and issued an aggregate of 1,847,343 shares of its common stock at a purchase price of $2.73 per share for aggregate gross proceeds of approximately $5.0 million. Alexander C. Matina, a member of the Company’s board of directors, is Vice President of Investments of the general partner of MFP.

XML

Equity-Based Compensation

12 Months Ended

Jun. 30, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

EQUITY-BASED COMPENSATION

NOTE 13 - EQUITY-BASED COMPENSATION

Equity Incentive Plans

In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan, or 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.

In December 2018 and January 2019, the Company's Board of Directors and stockholders, respectively, approved the 2019 Equity Incentive Plan, or the 2019 Plan, as a successor to and continuation of the 2009 Plan. In October 2020 and December 2020, the Company’s Board of Directors and stockholders approved, respectively, the amendment to the 2019 Plan to increase the number of shares available for issues as grants and awards by 4,000,000 shares. Subject to adjustment for certain changes in the Company's capitalization, the aggregate number of shares of the Company's common stock that may be issued under the 2019 Plan, as amended, will not exceed 8,243,790 shares, which is the sum of (i) 4,000,000 new shares, (ii) 2,750,000 additional shares that were reserved as of the effective date of the 2019 Plan, (iii) 350,343 shares (the number of unallocated shares that were available for grant under the 2009 Plan as of January 16, 2019, the effective date of the 2019 Plan), plus (iv) 1,143,447 shares, which is the number of shares subject to outstanding stock awards granted under the 2009 Plan that on or after the effective date of the 2019 Plan may expire or terminate for any reason prior to exercise or settlement, are forfeited because of the failure to meet a contingency or condition required to vest such shares or otherwise return to us, or are reacquired, withheld or not issued to satisfy a tax withholding obligation in connection with an award or to satisfy the purchase price or exercise price of a stock award. 

The term of incentive stock options granted under the Company’s equity incentive plans 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 Company’s equity incentive plans 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 option grants.

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

	June 30, 2022			June 30, 2021
Risk free rate	0.82%-2.81%			0.24%-0.33%
Dividend yield		0	%		0	%
Volatility	61.7%-64.7%			52.1%-53.0%
Average forfeiture assumptions		3.2	%		2.3	%

During the year ended June 30, 2022, the Company granted 994,725 options to its directors, certain members of the executive management team and other employees at exercise prices ranging from $2.64 - $3.39. These options vest in either quarterly or annual periods over one to three years, and expire ten years from the date of grant.

A summary of stock option activity for the years ended June 30, 2022 and 2021 is presented below:

	Number Outstanding			Weighted - Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 30, 2020		2,875,894		$	2.74		8.6	$	22,409
Granted		976,924			2.41
Exercised		(65,990	)		2.48
Canceled/forfeited/expired		(10,260	)		2.94
Outstanding at June 30, 2021		3,776,568			2.65		8.0		3,962,766
Granted		994,725			2.63
Exercised		(38,774	)		2.33
Canceled/forfeited/expired		(95,419	)		2.82
Outstanding at June 30, 2022		4,637,100			2.64		6.6		—
Options vested and exercisable at June 30, 2022		3,229,891		$	2.70		5.7	$	—
Options vested and expected to vest as of    June 30, 2022		4,629,560			2.64		6.6		—

The weighted average grant date fair value of options granted and outstanding at June 30, 2022 was $2.64. At June 30, 2022, the Company had $1,183,831 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 1.81 years. The Company settles employee stock option exercises with newly issued shares of common stock.

During the years ended June 30, 2022 and 2021, the Company issued 304,421 and 291,206 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 quarterly or annual installments over one to three-years. The fair value of the awards during the years ended June 30, 2022 and 2021 totaled $846,080 and $1,965,712, respectively, and was based on the closing stock price on the date of grants.

The Company recorded $982,422 and $866,017 of stock-based compensation expense associated with grants of restricted stock units during the years ended June 30, 2022 and 2021, respectively. A summary of activity related to non-vested restricted stock units is presented below:

	Number of Nonvested Restricted Stock Units			Weighted-Average Grant Date  Fair Value		Weighted-Average Remaining  Contractual Life (Years)
Nonvested restricted units outstanding at June 30, 2020		396,803		$	2.33		1.6
Granted		291,206			2.59		1.9
Vested		(326,439	)		2.36		—
Forfeited		—			—		—
Nonvested restricted units outstanding at June 30, 2021		361,570			2.51		1.3
Granted		304,421			2.78		2.4
Vested		(391,036	)		2.62		—
Forfeited		(7,036	)		2.35		—
Nonvested restricted units outstanding at June 30, 2022		267,919			2.66		1.2

At June 30, 2022, the Company had $439,089 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.18 years.

At June 30, 2022, there were 2,549,966 shares available under the 2019 Plan for future grants and awards.

Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the years ended June 30, 2022 and 2021, totaled $2,267,186 and $1,766,353, respectively.

XML

Series B Convertible Preferred Stock

12 Months Ended

Jun. 30, 2022

Temporary Equity Disclosure [Abstract]

Series B Convertible Preferred Stock

NOTE – 14 SERIES B CONVERTIBLE PREFERRED STOCK

On February 18, 2022, the Company entered into a Securities Purchase Agreement, or the Purchase Agreement, with MFP, pursuant to which the Company sold and issued to MFP, in a private placement, 1,695 shares of its Series B Redeemable Convertible Non-Voting Preferred Stock, par value $0.001 per share, or the Series B Preferred Stock, and an accompanying warrant, or the Warrant, to purchase up to 559,350 shares of the Company’s common stock, or the Common Stock, par value $0.001 per share, at a combined unit price of $2,950 per share, or the Stated Value, for aggregate gross proceeds of approximately $5.0 million.

The Warrant first becomes exercisable on the date that is six months after the date of issuance, at an exercise price of $5.00 per share (subject to adjustment in connection with any stock dividends and splits, distributions with respect to Common Stock and certain fundamental transactions as described in the Warrant) and will expire five years from the date it first becomes exercisable.

The Series B Preferred Stock is initially convertible into shares of Common Stock at the rate of 1,000 shares of Common Stock per share of Series B Preferred Stock, at any time at the option of the holder of such shares, subject to the following limitations: (i) unless a holder was a stockholder of the Company as of February 18, 2022 (in which case such limitation shall not apply), the Company shall not affect any conversion of Series B Preferred Stock to the extent that, after giving effect to an attempted conversion, such holder, together with its affiliates, would beneficially own a number of shares of Common Stock in excess of 4.99% of the total number of shares of Common Stock outstanding immediately after giving effect to the issuance of such shares, which limit may be decreased or increased (not to exceed 19.99%) upon written notice to the Company, with any increase not becoming effective until at least 61 days after such notice; (ii) a holder may not acquire shares of Common Stock upon conversion of Series B Preferred Stock if such conversion would result in the total number of shares of Common Stock issued or issuable upon conversion or exercise of the securities issued pursuant to the Purchase Agreement to exceed 7,777,652 shares, or 19.99% of the outstanding shares of Common Stock as of the date of the Purchase Agreement; and (iii) to the extent Nasdaq Listing Rule 5635(c) is applicable or deemed applicable to a holder, such holder may not acquire shares of Common Stock upon conversion of Series B Preferred Stock that would exceed the maximum number of all shares of Common Stock that could be issued by the Company to such holder without requiring stockholder approval pursuant to Nasdaq Listing Rule 5635(c). Upon receiving shareholder approval of a proposal to be submitted to the shareholders of the Company for the purpose of approving the transactions contemplated by the Purchase Agreement, pursuant to Nasdaq Listing Rules 5635(a), (c) and (d), the foregoing limitations in (ii) and (iii) above shall no longer have any force or effect.

Pursuant to the Purchase Agreement, the Company agreed to use its reasonable best efforts to solicit the approval of its shareholders for the issuance of all shares of Common Stock otherwise issuable upon the conversion of the Series B Preferred Stock, or the Requisite Approval, at the next annual meeting of the Company’s shareholders, and at each annual meeting of shareholders thereafter, if necessary, until the Requisite Approval is obtained.

A holder of Series B Preferred Stock is entitled to receive cumulative cash dividends of 5% per annum, payable semi-annually in arrears on the last day of March and September of each calendar year. In lieu of paying such cash dividends, the Company may elect to add an amount to the Stated Value, provided that the dividend rate shall be 7% per annum, calculated semi-annually in arrears on the last day of March and September of each calendar year. A holder of Series B Preferred Stock is also entitled to receive any dividend declared and paid to holders of the Common Stock as if such Series B Preferred Stock had been converted into Common Stock. In addition, a holder of Series B Preferred Stock is entitled to a liquidation preference equal to the greater of (i) the Stated Value, plus any cash dividends accrued but unpaid thereon, and (ii) the payment such holder would have received had the Series B Preferred Stock been converted into shares of Common Stock immediately prior to such liquidation event.

Unless prohibited by Nevada law governing distributions to stockholders, the Series B Preferred Stock is redeemable, at any time after August 18, 2025, upon written request from the holders of a majority of the outstanding shares of Series B Preferred Stock, at a price equal to the Stated Value, plus any cash dividends accrued but unpaid thereon.

The Series B Preferred Stock is non-voting except with respect to certain matters affecting the Series B Preferred Stock. In addition, the approval of a majority of the outstanding shares of Series B Preferred Stock is required if after February 18, 2022 the Company seeks to issue Common Stock, pursuant to the Sales Agreement, dated

September 27, 2021, between the Company and B. Riley Securities, for cumulative gross proceeds in excess of $6.1 million.

Since the holder has the option to redeem their shares of Series B Preferred Stock at any time after August 18, 2025, the stock is considered contingently redeemable and, accordingly, is classified as temporary equity, net of the relative fair value assigned to the warrant of $361,709 recorded in the Statement of Equity, on the Consolidated Balance Sheet as of June 30, 2022. Over the initial 42-month term the $4,638,521 relative fair value of the Series B Preferred Stock will be accreted to its redemption value of $5,000,250. Dividends will be accrued and recognized through retained earnings.

The following summarizes changes to our Series B Preferred Stock:

Balance at June 30, 2021	$	—
Issuance of preferred stock		4,638,521
Dividends accrued		127,541
Accretion of discount for warrants		38,757
Balance at June 30, 2022	$	4,804,819

XML

Non-Cash Activities for Statements of Cash Flows

12 Months Ended

Jun. 30, 2021

Supplemental Cash Flow Elements [Abstract]

NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

NOTE 15 - 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 years ended June 30, 2022 and 2021, respectively.

	Years Ended June 30,
	2022			2021
Purchases of equipment classified as finance lease	$	(369,574	)	$	(696,303	)
Dividends accrued for participating securities and accretion		(166,298	)		—

XML

Subsequent Events

12 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 16 - SUBSEQUENT EVENTS

MFP Loan Agreement

On September 22, 2022, in support of S&W Seed Company’s ongoing efforts to solidify and stabilize its financial position and balance sheet, MFP provided a letter of credit, issued by JPMorgan Chase Bank, N.A. for the account of MFP, with a face amount of $9,000,000, or Specified LC, for the benefit of CIBC, as additional collateral to support the Company’s obligations under the CIBC loan agreement. The Specified LC matures on January 23, 2023, one month after the maturity date of the CIBC loan agreement.

Concurrently, on September 22, 2022 the Company entered into a Subordinate Loan and Security Agreement, or MFP Loan Agreement, with MFP, pursuant to which any draw CIBC may make on the Specified LC, or Bank Draw, will be deemed to be a term loan advance made by MFP to the Company. The MFP Loan Agreement will mature on November 30, 2025. Pursuant to the MFP Loan Agreement, the Company will pay to MFP a cash fee through the maturity date of the Specified LC equal to 3.50% per annum on all amounts remaining undrawn under the Specified LC. In the event any term advances are deemed made under the MFP Loan Agreement, such advances will bear interest at a rate per annum equal to term SOFR (with a floor of 1.25%) plus 9.25%, half of which will be payable in cash on the last day of each fiscal quarter and half of which will accrue as payment in kind interest payable on the maturity date, unless, with respect to any quarterly payment date, the Company elects to pay such interest in cash.

The MFP Loan Agreement includes customary affirmative and negative covenants and events of default. The MFP Loan Agreement is secured by substantially all of the assets of the Company and is subordinated to the CIBC Loan Agreement. Upon the occurrence and during the continuance of an event of default, MFP may declare all outstanding obligations under the MFP Loan Agreement immediately due and payable and take such other actions as set forth in the MFP Loan Agreement.

MFP is the Company’s largest shareholder. One of the Company’s directors, Alexander C. Matina, is a Portfolio Manager of MFP Investors LLC, the general partner of MFP.

6th Amendment to CIBC Loan Agreement

On September 22, 2022, the Company entered into a Sixth Amendment to Loan and Security Agreement, or CIBC Amendment, with CIBC, amending the CIBC loan agreement. The CIBC Amendment, among other things, (i) reduces the maximum loan amount available to the Company to $18,000,000 from $20,000,000, (ii) sets the Company’s borrowing base eligible inventory sublimit at $9,000,000, (iii) specifies that the inventory sublimit cannot be reduced below the proceeds available to be drawn under the Specified LC, and (iv) waives the Company’s non-compliance with certain financial covenants under the CIBC loan agreement.

MFP Warrants

Pursuant to the terms and conditions of the MFP Loan agreement, on September 22, 2022, the Company issued to MFP a warrant, or Initial Warrant, to purchase up to 500,000 shares of the Company’s Common Stock, or Initial Warrant Shares, which number of shares may be reduced by up to one half in connection with any Bank Draws, pursuant to the following formula: (x) $9,000,000 minus the aggregate amount of any Bank Draws as of any exercise date, divided by (y) $9,000,000, multiplied by (z) 250,000. In addition, upon each Bank Draw, the Company will issue to MFP additional warrants, or Additional Warrants (and together with the Initial Warrant, the Warrants), to purchase such number of shares of the Company’s Common Stock as is equal to the quotient of (A) the product of (x) the amount of each Bank Draw multiplied by (y) 40%, divided by (B) $1.60 (together with the Initial Warrant Shares, the Warrant Shares). The Warrant Shares are issuable pursuant to the Warrants at an exercise price of $1.60 per Warrant Share (subject to adjustment in connection with any stock dividends and splits, distributions with respect to Common Stock and certain fundamental transactions as described in the Initial Warrant) and each Warrant will expire five years from the date of issuance.

2nd Amendment to Rooster Note

In addition, on September 22, 2022, the Company entered into a Second Amendment to Note, or Rooster Amendment, with Rooster Capital LLC, or Rooster, amending the Company’s promissory note, dated November 30, 2017, originally issued to Conterra, and subsequently endorsed to Rooster (as amended, the Rooster Note). The Rooster Amendment extends the maturity date of the Rooster Note from November 30, 2022 to December 23, 2022.

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of S&W Seed Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, or GAAP, and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company's exercises control. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

The Company owns 50.1% of SeedVision, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and SeedVision is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of SeedVision because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of SeedVision, which are considered to be the activities that have the greatest impact on the future economic performance of SeedVision.

The Company owns 51.0% of Sorghum Solutions South Africa, which is a variable interest entity as defined in ASC 810-10, Consolidation, because no substantive equity contributions have been made to it, and Sorghum Solutions South Africa is being funded through advances, as needed, from its investors. The Company has concluded that it is the primary beneficiary of Sorghum Solutions South Africa because it has the power, through a tie-breaking vote on the board of directors, to direct the sales and marketing activities of Sorghum Solutions South Africa, which are considered to be the activities that have the greatest impact on the future economic performance of Sorghum Solutions South Africa.

Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. The Company recorded a combined $0.5 million of current assets (restricted) and $31,307 of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2022.

The Company recorded a combined $0.6 million of current assets (restricted) and $0.1 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2021.   

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, 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.

The COVID-19 pandemic and the efforts to contain it have, among other things, negatively impacted the global economy and created significant volatility and disruption of financial markets. In addition, the COVID-19 pandemic has significantly increased economic and demand uncertainty. The Company believes the estimates and assumptions underlying the accompanying consolidated financial statements are reasonable and supportable based on the information available at the time the financial statements were prepared.

However, uncertainty over the impact COVID-19 will have on the global economy and the Company’s business in particular makes many of the estimates and assumptions reflected in these consolidated financial statements inherently less certain. Therefore, actual results may ultimately differ from those estimates to a greater degree than historically.

Certain Risks and Concentrations

Certain Risks and Concentrations

The Company’s revenue is principally derived from the sale of seed, the market for which is highly competitive. The Company depends on a core group of significant customers. No single customer accounted for more than 10% of revenue for the year ended June 30, 2022. One customer accounted for 19% of its revenue for the year ended June 30, 2021.

No customer accounted for more than 10% of the Company’s accounts receivable at June 30, 2022. One customer accounted for 11% of the Company’s accounts receivable at June 30, 2021.

The Company sells a substantial portion of its products to international customers. Sales to international markets represented 70% and 56% of revenue during the years ended June 30, 2022 and 2021, respectively. The net book value of fixed assets located outside the United States was 22% and 19% of total fixed assets at June 30, 2022 and June 30, 2021, respectively. Cash balances located outside of the United States may not be insured and totaled $811,551 and $204,813 at June 30, 2022 and June 30, 2021, respectively.

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

	Years Ended June 30,
	2022				2021
Australia	$	21,721,727	30	%	$	21,470,810	26	%
United States		21,053,335	30	%		37,124,047	44	%
Saudi Arabia		9,510,809	13	%		5,911,498	7	%
Pakistan		3,309,800	5	%		2,041,548	2	%
China		2,565,668	4	%		2,042,585	2	%
South Africa		1,946,153	3	%		2,456,216	3	%
Libya		1,739,105	2	%		1,249,554	2	%
Argentina		1,543,474	2	%		1,838,648	2	%
Sudan		1,443,748	2	%		1,218,168	1	%
Egypt		960,114	1	%		818,101	1	%
Other		5,560,365	8	%		7,877,861	10	%
Total revenue	$	71,354,298	100	%	$	84,049,036	100	%

Liquidity and Covid-19 Pandemic

Liquidity and COVID-19 Pandemic

The Company is monitoring the impact of the COVID-19 pandemic and the ongoing military conflict between Russia and Ukraine on its business, including its results of operations and financial condition, and has implemented measures designed to protect the health and safety of its employees while continuing its operations.  

The Company’s sales efforts historically involved significant in-person interaction with potential customers and distributors. Throughout the COVID-19 pandemic, many national, state and local governments in its target markets implemented various stay-at-home, shelter-in-place and other quarantine measures. As a result, the Company shifted its sales activities to video conferencing and similar customer interaction models and continues to evaluate its sales approach, but the Company found these alternative approaches to generally be less effective than in-person sales efforts. In particular, regular in-person customer interactions did not resume until February 2022 in some locations where the Company operates. If ongoing measures to protect against COVID-19 remain in effect throughout the

2023 sales season, the Company may experience similar negative impacts that it experienced during the 2021 and 2022 sales seasons.

In addition, the Company’s product revenue is predicated on its ability to timely fulfill customer orders, which depends in large part upon the consistent availability and operation of shipping and distribution networks operated by third parties. Farmers typically have a limited window during which they can plant seed, and their buying decisions can be shaped by actual or perceived disruptions in the Company’s distribution and supply channels. If the Company’s customers delay or decrease their orders due to potential disruptions in its distribution and supply channels, or if the Company is unable to timely fulfill their orders, this would adversely affect the Company’s product revenue.

During the year ended June 30, 2022, the Company experienced numerous logistical challenges due to limited availability of trucks for product deliveries, congestion at the ports, and overall increases in shipping and transportation costs.  The Company expects these logistical challenges to persist well into fiscal 2023, which may, among other things, delay or reduce its ability to recognize revenue within a particular fiscal period and harm its results of operations.

Given the level of uncertainty regarding the duration and broader impact of the COVID-19 pandemic, the Company is unable to fully assess the extent of its impact on the Company’s operations.

For the year ended June 30, 2022, we reported a net loss of $36.3 million and net cash used in operations of $18.4 million. At June 30, 2022, we had cash on hand of $2.1 million.

The Company’s loan and security agreement with CIBC Bank USA, or CIBC, and the Company’s secured promissory note with Conterra Agriculture Capital, LLC, or Conterra, which mature on December 23, 2022, contain various operating and financial covenants (See Note 8). The COVID-19 pandemic and other factors affecting the Company’s results of operations have increased the risk of the Company’s inability to comply with these covenants, which could result in acceleration of its repayment obligations and foreclosure on its pledged assets. For example, the Company was not in compliance with certain of these covenants as of June 30, 2021, December 31, 2021, March 31, 2022, June 15, 2022 and June 30, 2022, and was required to obtain waivers and/or amendments from CIBC and Conterra. In particular, the CIBC loan agreement as presently in effect requires the Company to maintain minimum liquidity of no less than $1,000,000. The Company does not currently expect it will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet these covenants in certain periods prior to maturity. The Company will need to either raise additional capital, secure future waivers and/or amendments from its lenders, obtain financing from new lenders, and/or accomplish some combination of these items to maintain sufficient liquidity. The Company is actively pursuing refinancing of the CIBC debt facility. There can be no assurance the Company will be successful in raising additional capital, securing future waivers and/or amendments from its lenders, renewing or refinancing its existing debt or securing new financing. If the Company is unsuccessful in doing so, it may need to reduce the scope of its operations, repay amounts owing to its lenders or sell certain assets. These operating and liquidity factors raise substantial doubt regarding the Company’s ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.  

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 (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of operations.

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 Cash 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 $233,927 and $57,782 at June 30, 2022 and June 30, 2021, respectively.

Inventories

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or net realizable value, 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.

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. Inventory quality is a function of germination percentage.  Our experience has shown that our alfalfa seed quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed as a material concern.  Hybrid crops (sorghum and sunflower) seed quality may be affected by warehouse storage pests such as insects and rodents.  The Company maintains a strict pest control program to mitigate risk and maximize hybrid seed quality.

Components of inventory are:

	June 30, 2022		June 30, 2021
Raw materials and supplies	$	2,645,764	$	2,722,832
Work in progress		6,677,980		6,662,006
Finished goods		45,192,150		54,010,418
Inventories, net	$	54,515,894	$	63,395,256

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 5-35 years for buildings, 2-20 years for machinery and equipment, and 2-5 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 3-30 years for technology/IP/germplasm, 5-20 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, 20 years for customer relationships, 16 years for trade names, 18 years for license agreements and 19 years for other intangible assets.

Goodwill

Goodwill

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  

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 or market capitalization of our common stock, 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 is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value is less than its carrying amount, management conducts a quantitative goodwill impairment test. The goodwill impairment test is used to identify potential impairment by comparing the fair value with its carrying amount, including goodwill. The Company uses market capitalization and an estimate of a control premium to estimate the fair value. If the estimated fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its estimated fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company performed a quantitative assessment of goodwill at June 30, 2022 on its one reporting unit and determined that goodwill was fully impaired. See Note 6 for further information.

The Company performed a quantitative assessment of goodwill at June 30, 2021 on its one reporting unit and determined that goodwill was not impaired.

Investment in Bioceres S.A.

Investment in Bioceres S.A.

The Company owns less than 1% of Bioceres, S.A., a provider of crop productivity solutions headquartered in Argentina.  The carrying value of the investment is $0.4 million at June 30, 2022 and $1.3 million at June 30, 2021, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted Accounting Standards Update, or ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities beginning July 1, 2018.  As such, this investment is accounted for in accordance with ASC 321, Investments – Equity Securities. As the stock is not publicly traded, the Company has elected to account for its investment at cost, with adjustments to fair value when there are observable transactions that provide an indicator of fair value.  In addition, if qualitative factors indicate a potential impairment, fair value must be estimated and the investment written down to that fair value if it is lower than the carrying value.

During the year ended June 30, 2022, the Company sold 71.4% of the investment in Bioceres, S.A. for net proceeds of $988,504, which included a gain on sale of marketable securities of $68,967.

No adjustments for impairment were made in fiscal years 2022 or 2021.  

Research and Development Costs

Research and Development Costs

The Company is engaged in ongoing research and development, or 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 years ended June 30, 2022 and 2021 has been affected by the valuation allowance on the Company’s deferred tax assets.

Net Income (Loss) Per Common Share Data

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share, or 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 and restricted stock awards. 

The treasury stock method is used for 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 net number of shares assumed to be issued added to the denominator.

The Company computes earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. The Series B Redeemable Convertible Non-Voting Preferred Stock, par value $0.001 per share, or the Series B Preferred Stock, and warrant are participating securities because holders of such shares have non-forfeitable dividend rights and participate in any undistributed earnings with common stock. Under the two-class method, total dividends provided to the holders of participating securities and undistributed earnings allocated to participating securities, are subtracted from net income attributable to the Company in determining net loss attributable to common shareholders. During the year ended June 30, 2022, there were $127,541 in accrued dividends subtracted from net income attributable to common shareholders; there were no undistributed earnings to allocate to the participating securities. Additionally, any accretion to the redemption value for the Series B Preferred Stock is treated as a deemed dividend in the two-class EPS calculation. During the year ended June 30, 2022, $38,757 was accreted to the redemption value of the Series B Preferred Stock and subtracted from net income attributable to common shareholders.

The calculation of Basic and Diluted EPS is shown in the table below. 

	Years Ended June 30,
	2022			2021
Numerator:
Net loss attributable to S&W Seed Company	$	(36,395,350	)	$	(19,170,967	)
Dividends accrued for participating securities and accretion		(166,298	)		—
Numerator for basic and diluted EPS	$	(36,561,648	)	$	(19,170,967	)
Denominator:
Denominator for basic EPS - weighted average    shares		39,133,681			34,590,883
Effect of dilutive securities:
Employee stock options		—			—
Employee restricted stock units		—			—
Dilutive potential common shares		—			—
Denominator for diluted EPS - adjusted weighted    average shares and assumed conversions		39,133,681			34,590,883
Basic EPS	$	(0.93	)	$	(0.55	)
Diluted EPS	$	(0.93	)	$	(0.55	)

The effects of employee stock options and restricted stock units are excluded because they would be anti-dilutive due to the Company’s net loss for the years ended June 30, 2022 and 2021.  

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. Refer to Note 6 for impairment discussion.

Derivative Financial Instruments

Derivative Financial Instruments

Foreign Exchange Contracts

The Company’s subsidiary, S&W Australia, 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.

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.

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.

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

	Fair Value Measurements as of June 30, 2022 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	996,106	$	—
Contingent consideration obligations		—		—		—
Total	$	—	$	996,106	$	—

	Fair Value Measurements as of June 30, 2021 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	96,466	$	—
Contingent consideration obligations		—		—		741,552
Total	$	—	$	96,466	$	741,552

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

The Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes effective July 1, 2021. This ASU is intended to simplify various aspects to accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and clarifying certain aspects of the current guidance to promote consistency among reporting entities. ASU 2019-12 is effective for annual periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. An entity that elects early adoption must adopt all the amendments in the same period. Most amendments within this ASU are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The adoption of this ASU had no impact on the Company’s consolidated financial statements and related disclosures.

The Company adopted ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity effective July 1, 2021. This ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt–Debt with Conversion and other Options, for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. The convertible debt instruments will be accounted for as a single liability measured at amortized cost. This will also result in the interest expense recognized for convertible debt instruments to be typically closer to the coupon interest rate when applying the guidance in Topic 835, Interest. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible debt instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The ASU is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted for periods beginning after December 15, 2020. Adoption of the ASU can either be on a modified retrospective or full retrospective basis. At the time of adoption, we had no outstanding convertible instruments and no adjustments were recognized to our July 1, 2021 accumulated deficit. The adoption of this ASU had no impact on the Company’s consolidated financial statements and related disclosures.

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Schedule of Revenues from External Customers by Country

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

	Years Ended June 30,
	2022				2021
Australia	$	21,721,727	30	%	$	21,470,810	26	%
United States		21,053,335	30	%		37,124,047	44	%
Saudi Arabia		9,510,809	13	%		5,911,498	7	%
Pakistan		3,309,800	5	%		2,041,548	2	%
China		2,565,668	4	%		2,042,585	2	%
South Africa		1,946,153	3	%		2,456,216	3	%
Libya		1,739,105	2	%		1,249,554	2	%
Argentina		1,543,474	2	%		1,838,648	2	%
Sudan		1,443,748	2	%		1,218,168	1	%
Egypt		960,114	1	%		818,101	1	%
Other		5,560,365	8	%		7,877,861	10	%
Total revenue	$	71,354,298	100	%	$	84,049,036	100	%

Components of Inventory

Components of inventory are:

	June 30, 2022		June 30, 2021
Raw materials and supplies	$	2,645,764	$	2,722,832
Work in progress		6,677,980		6,662,006
Finished goods		45,192,150		54,010,418
Inventories, net	$	54,515,894	$	63,395,256

Schedule of Calculation of Basic and Diluted EPS

The calculation of Basic and Diluted EPS is shown in the table below. 

	Years Ended June 30,
	2022			2021
Numerator:
Net loss attributable to S&W Seed Company	$	(36,395,350	)	$	(19,170,967	)
Dividends accrued for participating securities and accretion		(166,298	)		—
Numerator for basic and diluted EPS	$	(36,561,648	)	$	(19,170,967	)
Denominator:
Denominator for basic EPS - weighted average    shares		39,133,681			34,590,883
Effect of dilutive securities:
Employee stock options		—			—
Employee restricted stock units		—			—
Dilutive potential common shares		—			—
Denominator for diluted EPS - adjusted weighted    average shares and assumed conversions		39,133,681			34,590,883
Basic EPS	$	(0.93	)	$	(0.55	)
Diluted EPS	$	(0.93	)	$	(0.55	)

Schedule of Assets and Liabilities Recognized and Measured at Fair Value on Recurring Basis

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

	Fair Value Measurements as of June 30, 2022 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	996,106	$	—
Contingent consideration obligations		—		—		—
Total	$	—	$	996,106	$	—

	Fair Value Measurements as of June 30, 2021 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	96,466	$	—
Contingent consideration obligations		—		—		741,552
Total	$	—	$	96,466	$	741,552

XML

Leases (Tables)

12 Months Ended

Jun. 30, 2022

Lessee Disclosure [Abstract]

Summary of Components of Lease Assets and Liabilities

The components of lease assets and liabilities are as follows:

Leases	Balance Sheet Classification:	June 30, 2022
Assets:
Right of use assets - operating leases	Other assets	$	4,094,253
Right of use assets - finance leases	Other assets		2,071,609
Accumulated amortization - finance leases	Other assets		(1,131,842	)
Right of use assets - finance leases, net	Other assets		939,767
Total lease assets		$	5,034,020
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net	$	804,309
Current lease liabilities	Accrued expenses and other current liabilities		1,341,198
Long-term debt, net, less current portion	Long-term debt, net, less current portion		500,723
Long-term lease liabilities	Other non-current liabilities		3,042,311
Total lease liabilities		$	5,688,541

Summary of Components of Lease Cost

The components of lease cost are as follows:

Lease cost:	Income Statement Classification:	Year Ended June 30, 2022
Operating lease cost	Cost of revenue	$	692,210
Operating lease cost	Selling, general and administrative expenses		307,368
Operating lease cost	Research and development expenses		375,905
Finance lease cost	Depreciation and amortization and Interest expense		715,202
Total lease costs		$	2,090,685

Summary of Maturities of Lease Liabilities

Maturities of lease liabilities as of June 30, 2022 are as follows:

	Operating Leases			Finance Leases
2023	$	1,478,640		$	636,178
2024		1,243,871			472,039
2025		861,779			305,293
2026		687,202			58,721
2027		402,439			7,312
After 2027		77,558			—
Total lease payments		4,751,489			1,479,543
Less: Interest		(367,980	)		(174,512	)
Present value of lease liabilities	$	4,383,509		$	1,305,031

Summary of Weighted Average Assumptions on Lease Term and Discount Rate and Supplemental Cash Flow Information Related to Leases

The following are the weighted average assumptions used for lease term and discount rate and supplemental cash flow information related to leases as of June 30, 2022:

Operating lease remaining lease term	4.0 years
Operating lease discount rate		4.29	%
Finance lease remaining lease term	1.3 years
Finance lease discount rate		5.50	%
Cash paid for operating leases	$	1,481,024
Cash paid for finance leases		1,088,090

XML

Revenue Recognition (Tables)

12 Months Ended

Jun. 30, 2022

Revenues [Abstract]

Schedule of disaggregation of revenues

The following table disaggregates the Company's revenue by type of contract:

	Years Ended June 30,
	2022		2021
Pioneer product sales	$	—	$	14,198,857
Other product sales		69,425,407		67,234,359
Services		1,928,891		2,615,820
Total revenue	$	71,354,298	$	84,049,036

XML

Goodwill and Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Activity of Goodwill

The following table summarizes the activity of goodwill for the years ended June 30, 2022 and 2021, respectively:

	Balance at July 1, 2021		Additions		Impairment			Currency Translation Adjustment			Balance at June 30, 2022
Goodwill	$	1,651,634	$	—	$	(1,548,324	)	$	(103,310	)	$	—

	Balance at July 1, 2020		Additions		Impairment		Currency Translation Adjustment		Balance at June 30, 2021
Goodwill	$	1,508,675	$	—	$	—	$	142,959	$	1,651,634

Schedule of Intangible Assets

Intangible assets consist of the following:

	Balance at July 1, 2021		Additions		Amortization			Currency Translation Adjustment			Balance at June 30, 2022
Trade name	$	1,310,489	$	—	$	(203,009	)	$	(22,689	)	$	1,084,791
Customer relationships		6,302,591		—		(373,393	)		(429,383	)		5,499,815
Non-compete		5,058		—		(5,058	)		—			—
GI customer list		50,146		—		(7,163	)		—			42,983
Supply agreement		850,874		—		(75,633	)		—			775,241
Grower relationships		1,436,988		—		(105,407	)		—			1,331,581
Intellectual property		24,427,857		—		(1,391,932	)		—			23,035,925
In process research and development		—		—		—			—			—
License agreement		2,340,269		—		(172,004	)		(181,667	)		1,986,598
Internal use software		406,670		—		(67,777	)		—			338,893
	$	37,130,942	$	—	$	(2,401,376	)	$	(633,739	)	$	34,095,827

	Balance at July 1, 2020		Additions			Amortization			Currency Translation Adjustment		Balance at June 30, 2021
Trade name	$	1,479,278	$	—		$	(206,311	)	$	37,522	$	1,310,489
Customer relationships		6,187,086		—			(376,431	)		491,936		6,302,591
Non-compete		21,312		—			(16,254	)		—		5,058
GI customer list		57,310		—			(7,164	)		—		50,146
Supply agreement		926,507		—			(75,633	)		—		850,874
Grower relationships		1,542,393		—			(105,405	)		—		1,436,988
Intellectual property		25,415,665		388,499			(1,376,307	)		—		24,427,857
In process research and development		380,000		(380,000	)		—			—		—
License agreement		2,300,059		—			(176,646	)		216,856		2,340,269
Internal use software		474,448		—			(67,778	)		—		406,670
	$	38,784,058	$	8,499		$	(2,407,929	)	$	746,314	$	37,130,942

Intangible Assets (Future Amortization)

Estimated aggregate remaining amortization is as follows:

	2023		2024		2025		2026		2027		Thereafter
Amortization expense	$	2,395,678	$	2,372,718	$	2,338,707	$	2,252,740	$	2,201,856	$	22,534,128

XML

Property, Plant and Equipment (Tables)

12 Months Ended

Jun. 30, 2022

Property Plant And Equipment [Abstract]

Components of Property, Plant and Equipment

Components of property, plant and equipment were as follows:

	June 30, 2022			June 30, 2021
Land and improvements	$	2,265,087		$	2,297,529
Buildings and improvements		8,119,960			8,196,593
Machinery and equipment		14,972,462			13,935,053
Vehicles		1,085,342			1,046,937
Leasehold improvements		552,810			552,810
Construction in progress		110,107			48,480
Total property, plant and equipment		27,105,768			26,077,402
Less: accumulated depreciation		(10,234,099	)		(8,336,428	)
Property, plant and equipment, net	$	16,871,669		$	17,740,974

XML

Debt (Tables)

12 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Schedule of Total Debt Outstanding

Total debt outstanding is presented on the consolidated balance sheet as follows:

	June 30, 2022			June 30, 2021
Current portion of working capital lines of credit
CIBC	$	12,804,611		$	14,500,000
National Australia Bank Limited		338,314			19,494,800
National Australia Bank Limited Overdraft Facility		—			617,471
Debt issuance costs		(464,028	)		(665,706	)
Total current portion of working capital lines of credit, net		12,678,897			33,946,565
Long-term portion of working capital lines of credit, less current portion
National Australia Bank Limited		21,703,286			—
Total long-term portion of working capital lines of credit		21,703,286			—
Total working capital lines of credit, net	$	34,382,183		$	33,946,565
Current portion of long-term debt
Finance leases	$	804,309		$	909,413
Debt issuance costs		(1,828	)		(5,077	)
Term Loan - National Australia    Bank Limited		344,400			374,900
Machinery & equipment loans -    National Australia Bank Limited		246,547			160,632
Machinery & equipment loans - Hyster		11,834			5,170
Vehicle loans - Ford Credit		40,341			—
Secured real estate note - Conterra		6,905,995			275,684
Debt issuance costs		(34,815	)		(39,556	)
Total current portion, net		8,316,783			1,681,166
Long-term debt, less current portion
Finance leases		500,723			1,108,709
Debt issuance costs		(21	)		(1,847	)
Term loan - National Australia    Bank Limited		2,410,800			2,999,200
Machinery & equipment loans -    National Australia Bank Limited		963,733			508,641
Machinery & equipment loans - Hyster		28,722			17,923
Vehicle loans - Ford Credit		88,583			—
Secured real estate note - Conterra		—			6,974,356
Debt issuance costs		—			(16,482	)
Total long-term portion, net		3,992,540			11,590,500
Total debt, net	$	12,309,323		$	13,271,666

Schedule of Annual Maturities of Short-Term and Long-Term Debt

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

Fiscal Year	Amount
2023	$	8,353,426
2024		1,050,062
2025		2,399,706
2026		278,595
2027		264,198
Thereafter		—
Total	$	12,345,987

XML

Income Taxes (Tables)

12 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Schedule of Loss Before Income Taxes

Loss before income taxes consists of the following:

	Years Ended June 30,
	2022			2021
United States	$	(37,346,576	)	$	(22,519,842	)
Foreign		1,437,493			3,388,970
Loss before income taxes	$	(35,909,083	)	$	(19,130,872	)

Components of Provision for Income Taxes

Significant components of the provision for income taxes from continuing operations are as follows:

	Years Ended June 30,
	2022			2021
Current:
Federal	$	—		$	—
State		301			(5,385	)
Foreign		266,129			(197,163	)
Total current provision		266,430			(202,548	)
Deferred:
Federal		(1	)		—
State		—			—
Foreign		146,994			178,190
Total deferred provision		146,993			178,190
Provision for (benefit from) income taxes	$	413,423		$	(24,358	)

Reconciliation of Income Tax Provision and Expected Income Tax Computed Using U.S. Federal Income Tax Rate

The differences between the total calculated income tax provision and the expected income tax computed using the U.S. federal income tax rate are as follows:

	Years Ended June 30,
	2022			2021
Tax benefit at statutory tax rate	$	(7,540,908	)	$	(4,018,362	)
State benefit, net of federal benefit		(493,262	)		(417,868	)
Federal and state research credits - current year		(390,235	)		(675,527	)
Other permanent differences		184,725			(110,860	)
Foreign rate differential		420,829			431,265
Goodwill impairment		549,577			—
Valuation allowance		7,573,300			5,178,300
Tax law changes		—			(411,306	)
Other		109,397			—
Provision for (benefit from) income taxes	$	413,423		$	(24,358	)

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company's deferred tax assets and liabilities are as follows:

	June 30, 2022			June 30, 2021
Deferred tax assets:
Net operating loss carry forwards	$	22,815,372		$	15,623,619
Tax credit carry forwards		1,388,106			1,169,978
Allowance for bad debts		1,216,187			1,378,422
Lease liability		1,187,090			1,209,560
Other, net		3,116,913			3,214,948
Total deferred tax assets		29,723,668			22,596,527
Valuation allowance for deferred tax assets		(27,437,845	)		(19,892,644	)
Deferred tax assets, net of valuation allowance		2,285,823			2,703,883
Deferred tax liabilities:
ROU lease asset		(1,226,879	)		(1,293,365	)
Fixed assets		(1,382,821	)		(1,588,708	)
Total deferred tax liabilities		(2,609,700	)		(2,882,073	)
Net deferred tax asset (liability)	$	(323,877	)	$	(178,190	)

XML

Equity-Based Compensation (Tables)

12 Months Ended

Jun. 30, 2022

Summary of Activity Related to Non-Vested Restricted Stock Units

A summary of activity related to non-vested restricted stock units is presented below:

	Number of Nonvested Restricted Stock Units			Weighted-Average Grant Date  Fair Value		Weighted-Average Remaining  Contractual Life (Years)
Nonvested restricted units outstanding at June 30, 2020		396,803		$	2.33		1.6
Granted		291,206			2.59		1.9
Vested		(326,439	)		2.36		—
Forfeited		—			—		—
Nonvested restricted units outstanding at June 30, 2021		361,570			2.51		1.3
Granted		304,421			2.78		2.4
Vested		(391,036	)		2.62		—
Forfeited		(7,036	)		2.35		—
Nonvested restricted units outstanding at June 30, 2022		267,919			2.66		1.2

Stock Options

Schedule of Weighted Average Assumptions Used in Black-Scholes-Merton Model

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

	June 30, 2022			June 30, 2021
Risk free rate	0.82%-2.81%			0.24%-0.33%
Dividend yield		0	%		0	%
Volatility	61.7%-64.7%			52.1%-53.0%
Average forfeiture assumptions		3.2	%		2.3	%

Summary of Stock Option Activity

A summary of stock option activity for the years ended June 30, 2022 and 2021 is presented below:

	Number Outstanding			Weighted - Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 30, 2020		2,875,894		$	2.74		8.6	$	22,409
Granted		976,924			2.41
Exercised		(65,990	)		2.48
Canceled/forfeited/expired		(10,260	)		2.94
Outstanding at June 30, 2021		3,776,568			2.65		8.0		3,962,766
Granted		994,725			2.63
Exercised		(38,774	)		2.33
Canceled/forfeited/expired		(95,419	)		2.82
Outstanding at June 30, 2022		4,637,100			2.64		6.6		—
Options vested and exercisable at June 30, 2022		3,229,891		$	2.70		5.7	$	—
Options vested and expected to vest as of    June 30, 2022		4,629,560			2.64		6.6		—

XML

Series B Convertible Preferred Stock (Tables)

12 Months Ended

Jun. 30, 2022

Temporary Equity Disclosure [Abstract]

Summary of Changes to Series B Preferred Stock

The following summarizes changes to our Series B Preferred Stock:

Balance at June 30, 2021	$	—
Issuance of preferred stock		4,638,521
Dividends accrued		127,541
Accretion of discount for warrants		38,757
Balance at June 30, 2022	$	4,804,819

XML

Non-Cash Activities for Statements of Cash Flows (Tables)

12 Months Ended

Jun. 30, 2021

Supplemental Cash Flow Elements [Abstract]

Schedule of Consolidated Statements of Cash Flows for Non-Cash Activities

	Years Ended June 30,
	2022			2021
Purchases of equipment classified as finance lease	$	(369,574	)	$	(696,303	)
Dividends accrued for participating securities and accretion		(166,298	)		—

XML

Background and Organization - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Aug. 30, 2019	Jun. 30, 2022
S&W Australia
Background And Organizations [Line Items]
One time license fee	$ 2.3
Purchase price of equipment	$ 0.3
License initial term	15 years
Sorghum Solutions | Variable Interest Entity
Background And Organizations [Line Items]
Ownership percentage in variable interest entity		51.00%

XML

Summary of Significant Accounting Policies - Additional Information (Details)	1 Months Ended	12 Months Ended
	Feb. 29, 2020 USD ($)	Jun. 30, 2022 USD ($) Customer Reporting	Jun. 30, 2021 USD ($) Customer Reporting
Summary Of Significant Accounting Policies [Line Items]
Current assets (restricted)		$ 500,000	$ 600,000
Current liabilities (nonrecourse)		$ 31,307	$ 100,000
Net book value of fixed assets located outside the United States, percent of total		22.00%	19.00%
Cash balances located outside of the United States		$ 811,551	$ 204,813
Disclosure on Geographic Areas, Fixed Assets		The net book value of fixed assets located outside the United States was 22% and 19% of total fixed assets at June 30, 2022 and June 30, 2021, respectively. Cash balances located outside of the United States may not be insured and totaled $811,551 and $204,813 at June 30, 2022 and June 30, 2021, respectively.
Net loss		$ 36,322,506	19,106,514
Net cash used in operations		18,373,139	14,221,042
Cash on hand		2,100,000
Allowance for doubtful trade receivables		233,927	57,782
Goodwill acquire transaction		$ 0	$ 0
Number of reporting units | Reporting		1	1
Adjustments for impairment or observable transactions		$ 0	$ 0
ASU 2018-15
Summary Of Significant Accounting Policies [Line Items]
Change in accounting principle, accounting standards update, adopted		true
Change in accounting principle, accounting standards update, adoption date		Jul. 01, 2021
Change in accounting principle, accounting standards update, immaterial effect		true
Other Assets
Summary Of Significant Accounting Policies [Line Items]
Carrying value of investment		$ 400,000	$ 1,300,000
Pasture Genetics Acquisition
Summary Of Significant Accounting Policies [Line Items]
Goodwill acquire transaction	$ 1,452,436
Trade Name
Summary Of Significant Accounting Policies [Line Items]
Useful life		20 years
License Agreements
Summary Of Significant Accounting Policies [Line Items]
Useful life		18 years
CIBC
Summary Of Significant Accounting Policies [Line Items]
Debt instrument, maturity date		Dec. 23, 2022
CIBC | Line of Credit
Summary Of Significant Accounting Policies [Line Items]
Minimum potential liquidity raised to meet covenant compliance		$ 1,000,000
Minimum | Technology/IP
Summary Of Significant Accounting Policies [Line Items]
Useful life		3 years
Minimum | Customer Relationships
Summary Of Significant Accounting Policies [Line Items]
Useful life		5 years
Minimum | Trade Name
Summary Of Significant Accounting Policies [Line Items]
Useful life		5 years
Minimum | Other Intangibles
Summary Of Significant Accounting Policies [Line Items]
Useful life		3 years
Minimum | Building
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		5 years
Minimum | Machinery and Equipment
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		2 years
Minimum | Vehicles
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		2 years
Maximum | Technology/IP
Summary Of Significant Accounting Policies [Line Items]
Useful life		30 years
Maximum | Customer Relationships
Summary Of Significant Accounting Policies [Line Items]
Useful life		20 years
Maximum | Other Intangibles
Summary Of Significant Accounting Policies [Line Items]
Useful life		20 years
Maximum | Building
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		35 years
Maximum | Machinery and Equipment
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		20 years
Maximum | Vehicles
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		5 years
Maximum | Argentina
Summary Of Significant Accounting Policies [Line Items]
Ownership percentage in Bioceres, S.A.		1.00%
Weighted Average | Technology/IP
Summary Of Significant Accounting Policies [Line Items]
Useful life		26 years
Weighted Average | Customer Relationships
Summary Of Significant Accounting Policies [Line Items]
Useful life		20 years
Weighted Average | Trade Name
Summary Of Significant Accounting Policies [Line Items]
Useful life		16 years
Weighted Average | Other Intangibles
Summary Of Significant Accounting Policies [Line Items]
Useful life		19 years
Customer Concentration Risk | Revenue | Significant Customer
Summary Of Significant Accounting Policies [Line Items]
Number of customers | Customer		0	1
Concentration risk, percentage			19.00%
Customer Concentration Risk | Minimum | Revenue | Significant Customer
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		10.00%
Credit Concentration Risk | Accounts Receivable | Significant Customer
Summary Of Significant Accounting Policies [Line Items]
Number of customers | Customer		0	1
Concentration risk, percentage			11.00%
Credit Concentration Risk | Minimum | Accounts Receivable | Significant Customer
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		10.00%
Geographic Concentration Risk | Revenue | Non-US
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		70.00%	56.00%
SeedVision | Variable Interest Entity
Summary Of Significant Accounting Policies [Line Items]
Ownership percentage in variable interest entity		50.10%
Sorghum Solutions | Variable Interest Entity
Summary Of Significant Accounting Policies [Line Items]
Ownership percentage in variable interest entity		51.00%

XML

Summary of Significant Accounting Policies - Schedule of Revenues from External Customers by Country (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 71,354,298	$ 84,049,036
Revenue from external customers by country, percentage	100.00%	100.00%
United States
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 21,053,335	$ 37,124,047
Revenue from external customers by country, percentage	30.00%	44.00%
Australia
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 21,721,727	$ 21,470,810
Revenue from external customers by country, percentage	30.00%	26.00%
Saudi Arabia
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 9,510,809	$ 5,911,498
Revenue from external customers by country, percentage	13.00%	7.00%
South Africa
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,946,153	$ 2,456,216
Revenue from external customers by country, percentage	3.00%	3.00%
Pakistan
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 3,309,800	$ 2,041,548
Revenue from external customers by country, percentage	5.00%	2.00%
China
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 2,565,668	$ 2,042,585
Revenue from external customers by country, percentage	4.00%	2.00%
Libya
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,739,105	$ 1,249,554
Revenue from external customers by country, percentage	2.00%	2.00%
Argentina
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,543,474	$ 1,838,648
Revenue from external customers by country, percentage	2.00%	2.00%
Sudan
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,443,748	$ 1,218,168
Revenue from external customers by country, percentage	2.00%	1.00%
EGYPT
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 960,114	$ 818,101
Revenue from external customers by country, percentage	1.00%	1.00%
Other
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 5,560,365	$ 7,877,861
Revenue from external customers by country, percentage	8.00%	10.00%

XML

Summary of Significant Accounting Policies - Components of Inventory (Details) - USD ($)	Jun. 30, 2022	Jun. 30, 2021
Inventory Disclosure [Abstract]
Raw materials and supplies	$ 2,645,764	$ 2,722,832
Work in progress	6,677,980	6,662,006
Finished goods	45,192,150	54,010,418
Inventories, net	$ 54,515,894	$ 63,395,256

XML

Summary of Significant Accounting Policies - Schedule of Calculation of Basic and Diluted EPS (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Numerator:
Net loss attributable to S&W Seed Company	$ (36,395,350)	$ (19,170,967)
Dividends accrued for participating securities and accretion	166,298	0
Numerator for basic and diluted EPS	$ (36,561,648)	$ (19,170,967)
Denominator:
Basic	39,133,681	34,590,883
Weighted average number of common shares outstanding:
Employee stock options	0	0
Employee restricted stock units	0	0
Dilutive potential common shares	0	0
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions	39,133,681	34,590,883
Basic EPS	$ (0.93)	$ (0.55)
Diluted EPS	$ (0.93)	$ (0.55)

XML

Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Recognized and Measured at Fair Value on Recurring Basis (Details) - USD ($)	Jun. 30, 2022	Jun. 30, 2021
Fair Value, Inputs, Level 1
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign exchange contract liability	$ 0	$ 0
Contingent consideration obligations	0	0
Total	0	0
Level 2
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign exchange contract liability	996,106	96,466
Contingent consideration obligations	0	0
Total	996,106	96,466
Level 3
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign exchange contract liability	0	0
Contingent consideration obligations	0	741,552
Total	$ 0	$ 741,552

XML

Leases - Additional Information (Details)	12 Months Ended
	Jun. 30, 2022
Operating And Finance Lease [Line Items]
Lessee, operating lease, option to extend, description	If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the option(s). Operating lease expense is recognized on a straight-line basis over the term of the lease.
Lessee, operating lease, option to extend	true
Maximum
Operating And Finance Lease [Line Items]
Lease agreements term	1 year

XML

Leases - Summary of Components of Lease Assets and Liabilities (Details) - USD ($)	Jun. 30, 2022	Jun. 30, 2021
Lessee Disclosure [Abstract]
Right of use assets - operating leases	$ 4,094,253
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other assets
Right of use assets - finance leases	$ 2,071,609
Accumulated amortization - finance leases	(1,131,842)
Right of use assets - finance leases, net	$ 939,767
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other assets
Total lease assets	$ 5,034,020
Current portion of long-term debt, net	$ 804,309	$ 909,413
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Current portion of long-term debt, net
Current lease liabilities	$ 1,341,198
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued expenses and other current liabilities
Long-term debt, net, less current portion	$ 500,723	$ 1,108,709
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Long-term debt, net, less current portion
Long-term lease liabilities	$ 3,042,311
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other non-current liabilities
Total lease liabilities	$ 5,688,541

XML

Leases - Summary of Components of Lease Cost (Details)	12 Months Ended
	Jun. 30, 2022 USD ($)
Lessee Lease Description [Line Items]
Total lease costs	$ 2,090,685
Cost of Revenue
Lessee Lease Description [Line Items]
Operating lease cost	692,210
Selling, General and Administrative Expenses
Lessee Lease Description [Line Items]
Operating lease cost	307,368
Research and Development Expenses
Lessee Lease Description [Line Items]
Operating lease cost	375,905
Depreciation and Amortization and Interest Expense
Lessee Lease Description [Line Items]
Finance lease cost	$ 715,202

XML

Leases - Summary of Maturities of Lease Liabilities (Details)	Jun. 30, 2022 USD ($)
Operating Leases
2023	$ 1,478,640
2024	1,243,871
2025	861,779
2026	687,202
2027	402,439
After 2027	77,558
Total lease payments	4,751,489
Less: Interest	(367,980)
Present value of lease liabilities	4,383,509
Finance Leases
2023	636,178
2024	472,039
2025	305,293
2026	58,721
2027	7,312
Total lease payments	1,479,543
Less: Interest	(174,512)
Present value of lease liabilities	$ 1,305,031

XML

Leases - Summary of Weighted Average Assumptions on Lease Term and Discount Rate and Supplemental Cash Flow Information Related to Leases (Details)	12 Months Ended
	Jun. 30, 2022 USD ($)
Lessee Disclosure [Abstract]
Operating lease remaining lease term	4 years
Operating lease discount rate	4.29%
Finance lease remaining lease term	1 year 3 months 18 days
Finance lease discount rate	5.50%
Cash paid for operating leases	$ 1,481,024
Cash paid for finance leases	$ 1,088,090

XML

Pioneer Relationship - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Pioneer | Alfalfa Seeds
Related Party Transaction [Line Items]
Termination date	May 22, 2019
Corteva and Pioneer
Related Party Transaction [Line Items]
Payments received from related parties		$ 8.3

XML

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Disaggregation Of Revenue [Line Items]
Total revenue	$ 71,354,298	$ 84,049,036
Pioneer product sales
Disaggregation Of Revenue [Line Items]
Total revenue		14,198,857
Other product sales
Disaggregation Of Revenue [Line Items]
Total revenue	69,425,407	67,234,359
Services
Disaggregation Of Revenue [Line Items]
Total revenue	$ 1,928,891	$ 2,615,820

XML

Revenue Recognition - Additional Information (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Revenue Recognition [Line Items]
Maximum term of payments for transfer goods and services	1 year
Unbilled receivables billing term	3 months
Bad debt expense	$ 216,466	$ (235,201)
Revenue recognized	$ 300,000	$ 6,200,000
Minimum
Revenue Recognition [Line Items]
Term of customer invoice payment	30 days
Maximum
Revenue Recognition [Line Items]
Term of customer invoice payment	180 days

XML

Goodwill and Intangible Assets - Additional Information (Details) - USD ($)	1 Months Ended	12 Months Ended
	Feb. 29, 2020	Jun. 30, 2022	Jun. 30, 2021
Goodwill And Intangible Assets [Line Items]
Goodwill acquire transaction		$ 0	$ 0
Percentage of goodwill impairment		3.00%
Goodwill impairment charges		$ 1,548,324	0
Impairment charge on intangible assets		0
Amortization expense		$ 2,401,376	$ 2,407,929
Pasture Genetics
Goodwill And Intangible Assets [Line Items]
Goodwill acquire transaction	$ 1,452,436

XML

Goodwill and Intangible Assets - Summary of Activity of Goodwill (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill, Beginning Balance	$ 1,651,634	$ 1,508,675
Goodwill additions	0	0
Goodwill Impairment	(1,548,324)	0
Goodwill currency translation adjustment	(103,310)	142,959
Goodwill, Ending Balance	$ 0	$ 1,651,634

XML

Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Finite Lived Intangible Assets [Line Items]
Intangible asset	$ 37,130,942	$ 38,784,058
Intangible addition	0	8,499
Intangible amortization expense	(2,401,376)	(2,407,929)
Intangible currency translation adjustment	(633,739)	746,314
Intangible asset	34,095,827	37,130,942
Trade Name
Finite Lived Intangible Assets [Line Items]
Intangible asset	1,310,489	1,479,278
Intangible addition	0	0
Intangible amortization expense	(203,009)	(206,311)
Intangible currency translation adjustment	(22,689)	37,522
Intangible asset	1,084,791	1,310,489
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Intangible asset	6,302,591	6,187,086
Intangible addition	0	0
Intangible amortization expense	(373,393)	(376,431)
Intangible currency translation adjustment	(429,383)	491,936
Intangible asset	5,499,815	6,302,591
Non-compete
Finite Lived Intangible Assets [Line Items]
Intangible asset	5,058	21,312
Intangible addition	0	0
Intangible amortization expense	(5,058)	(16,254)
Intangible currency translation adjustment	0	0
Intangible asset	0	5,058
GI Customer list
Finite Lived Intangible Assets [Line Items]
Intangible asset	50,146	57,310
Intangible addition	0	0
Intangible amortization expense	(7,163)	(7,164)
Intangible currency translation adjustment	0	0
Intangible asset	42,983	50,146
Supply Agreement
Finite Lived Intangible Assets [Line Items]
Intangible asset	850,874	926,507
Intangible addition	0	0
Intangible amortization expense	(75,633)	(75,633)
Intangible currency translation adjustment	0	0
Intangible asset	775,241	850,874
Grower Relationships
Finite Lived Intangible Assets [Line Items]
Intangible asset	1,436,988	1,542,393
Intangible addition	0	0
Intangible amortization expense	(105,407)	(105,405)
Intangible currency translation adjustment	0	0
Intangible asset	1,331,581	1,436,988
Intellectual Property
Finite Lived Intangible Assets [Line Items]
Intangible asset	24,427,857	25,415,665
Intangible addition	0	388,499
Intangible amortization expense	(1,391,932)	(1,376,307)
Intangible currency translation adjustment	0	0
Intangible asset	23,035,925	24,427,857
In process research and development
Finite Lived Intangible Assets [Line Items]
Intangible asset	0	380,000
Intangible addition	0	(380,000)
Intangible amortization expense	0	0
Intangible currency translation adjustment	0	0
Intangible asset	0	0
License Agreements
Finite Lived Intangible Assets [Line Items]
Intangible asset	2,340,269	2,300,059
Intangible addition	0	0
Intangible amortization expense	(172,004)	(176,646)
Intangible currency translation adjustment	(181,667)	216,856
Intangible asset	1,986,598	2,340,269
Internal use software
Finite Lived Intangible Assets [Line Items]
Intangible asset	406,670	474,448
Intangible addition	0	0
Intangible amortization expense	(67,777)	(67,778)
Intangible currency translation adjustment	0	0
Intangible asset	$ 338,893	$ 406,670

XML

Goodwill and Intangible Assets - Intangible Assets (Future Amortization) (Details)	Jun. 30, 2022 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2023	$ 2,395,678
2024	2,372,718
2025	2,338,707
2026	2,252,740
2027	2,201,856
Thereafter	$ 22,534,128

XML

Property, Plant and Equipment - Components of Property, Plant and Equipment (Details) - USD ($)	Jun. 30, 2022	Jun. 30, 2021
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 27,105,768	$ 26,077,402
Less: accumulated depreciation	(10,234,099)	(8,336,428)
Property, plant and equipment, net	16,871,669	17,740,974
Land and improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	2,265,087	2,297,529
Buildings and improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	8,119,960	8,196,593
Machinery and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	14,972,462	13,935,053
Vehicles
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	1,085,342	1,046,937
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	552,810	552,810
Construction in progress
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 110,107	$ 48,480

XML

Property, Plant and Equipment - Additional Information (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Property Plant And Equipment [Abstract]
Depreciation expense	$ 2,433,319	$ 2,518,356

XML

Debt - Schedule of Total Debt Outstanding (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Current portion of working capital lines of credit
Total current portion of working capital lines of credit, net	$ 12,678,897	$ 33,946,565
Debt issuance costs	(464,028)	(665,706)
Long-term portion of working capital lines of credit, less current portion
Total long-term portion of working capital lines of credit	21,703,286	0
Total working capital lines of credit, net	34,382,183	33,946,565
Current portion of long-term debt
Finance leases, Current	804,309	909,413
Total current portion, net	8,316,783	1,681,166
Long-term debt, less current portion
Finance leases, Noncurrent	500,723	1,108,709
Total long-term portion, net	3,992,540	11,590,500
Total debt, net	12,309,323	13,271,666
CIBC
Current portion of working capital lines of credit
Total current portion of working capital lines of credit, net	12,804,611	14,500,000
National Australia Bank
Current portion of working capital lines of credit
Total current portion of working capital lines of credit, net	338,314	19,494,800
Long-term portion of working capital lines of credit, less current portion
Total long-term portion of working capital lines of credit	21,703,286	0
National Australia Bank Limited Overdraft Facility
Current portion of working capital lines of credit
Total current portion of working capital lines of credit, net	0	617,471
Finance Lease
Current portion of long-term debt
Debt issuance costs,Current	(1,828)	(5,077)
Long-term debt, less current portion
Debt issuance costs, Noncurrent	(21)	(1,847)
Term Loan Long Term Current | National Australia Bank
Current portion of long-term debt
Secured Debt, Current	344,400	374,900
Machinery & Equipment Loans Long Term Current | National Australia Bank
Current portion of long-term debt
Secured Debt, Current	246,547	160,632
Machinery & Equipment Loans Long Term Current | Hyster
Current portion of long-term debt
Secured Debt, Current	11,834	5,170
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	28,722	17,923
Vehicle Loans | Ford Credit
Current portion of long-term debt
Secured Debt, Current	40,341	0
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	88,583	0
Conterra RE Short
Current portion of long-term debt
Debt issuance costs,Current	(34,815)	(39,556)
Secured Debt, Current	6,905,995	275,684
Term Loan Long Term Non Current | National Australia Bank
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	2,410,800	2,999,200
Machinery & Equipment Loans long Term | National Australia Bank
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	963,733	508,641
Conterra RE Long
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	0	6,974,356
Debt issuance costs, Noncurrent	$ 0	$ (16,482)

XML

Debt - CIBC Credit Facility - Additional Information (Details) - CIBC - USD ($)		12 Months Ended
	Dec. 26, 2019	Jun. 30, 2022	Sep. 27, 2022	May 13, 2022
Line Of Credit Facility [Line Items]
Line of credit and security agreement date	Dec. 26, 2019
Line of credit facility, maximum borrowing capacity	$ 35,000,000.0		$ 18,000,000.0
Debt instrument, prepayment term		• All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest due under the CIBC Credit Facility, will be payable in full on December 23, 2022.
Line of credit facility, borrowing capacity, description		• The CIBC Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable (90% of eligible foreign accounts receivable) plus up to the lesser of (i) 65% of eligible inventory, (ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) an eligible inventory sublimit as more fully set forth in the Loan Agreement, in each case, subject to lender reserves.
Line of credit facility, remaining borrowing capacity		$ 1,900,000
Line of Credit
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity				$ 20,000,000.0
Minimum potential liquidity to meet covenant compliance until June 15, 2022				$ 1,000,000.0
Line of Credit | Subsequent Event
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 18,000,000.0
Line of Credit | Base Rate
Line Of Credit Facility [Line Items]
Basis spread on variable rate	2.00%
Line of Credit | Event Of Default
Line Of Credit Facility [Line Items]
Basis spread on variable rate	2.00%
Maximum
Line Of Credit Facility [Line Items]
Borrowing base in percentage based on eligible domestic accounts receivable	85.00%
Borrowing base in percentage based on eligible foreign accounts receivable	90.00%
Borrowing base in percentage based on eligible inventory	65.00%
Borrowing base in percentage based on liquidation value of the inventory, subject to lender reserves	85.00%

XML

Debt - Loan Transaction - Additional Information (Details)		1 Months Ended		12 Months Ended
	Sep. 22, 2022 USD ($)	Jan. 31, 2021 USD ($) Point	Nov. 30, 2017 USD ($)	Jun. 30, 2022
Line Of Credit Facility [Line Items]
Number of production points assets sold | Point		5
Conterra | Secured Promissory Notes
Line Of Credit Facility [Line Items]
Gross proceeds from issuance of long term debt			$ 12,500,000
Debt instrument, maturity date				Dec. 23, 2022
Conterra | Secured Real Estate Note
Line Of Credit Facility [Line Items]
Debt instrument, maturity date				Dec. 23, 2022
Debt instrument, principal amount			$ 10,400,000
Debt instrument, maturity date, description				On September 22, 2022, the Company entered into an amendment to extend the note’s maturity date to December 23, 2022.
Debt instrument, interest rate			7.75%
Number of production points assets sold | Point		5
Pay-down Secured Real Estate Note		$ 1,706,845
Conterra | Secured Real Estate Note | Debt Instrument, Redemption, Period One
Line Of Credit Facility [Line Items]
Debt instrument, combined payment		$ 454,185
Debt instrument, payment starting date		Jul. 01, 2022
Conterra | Secured Real Estate Note | Debt Instrument, Redemption, Period Two | Subsequent Event
Line Of Credit Facility [Line Items]
Debt instrument, combined payment	$ 6,969,668
Debt instrument, payment starting date	Dec. 23, 2022
Debt instrument, frequency of periodic payment of interest	one-time final payment

XML

Debt - Additional Information (Details)		1 Months Ended
	Aug. 15, 2018 USD ($) Point	Jan. 31, 2021 USD ($) Point
Line Of Credit Facility [Line Items]
Number of production points assets sold | Point		5
Pay-down the finance lease		$ 294,163
American AgCredit
Line Of Credit Facility [Line Items]
Number of sale and leaseback equipment points completed | Point	5
Proceeds from sale of equipment	$ 2,106,395
Lease term	5 years
Monthly lease payments under lease agreement	$ 40,023
Annual interest rate under lease agreement	5.60%
Repurchase value of lease asset at end of lease term	$ 1
Conterra Agricultural Capital, LLC
Line Of Credit Facility [Line Items]
Repayment of debt principal amount	$ 2,081,527
Debt Instrument, stated interest rate, percentage	9.50%
Payment of outstanding interest on borrowings	$ 24,868

XML

Debt - NAB Facilities - Additional Information (Details)		12 Months Ended
	Nov. 30, 2020 AUD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2022 AUD ($)	Jun. 30, 2022 AUD ($)	Apr. 01, 2022 USD ($)	Apr. 01, 2022 AUD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2022 AUD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 AUD ($)	Jun. 30, 2021 USD ($)
Line Of Credit Facility [Line Items]
Facility outstanding amount		$ 34,382,183									$ 33,946,565
Term Loan
Line Of Credit Facility [Line Items]
Facility outstanding amount		$ 2,755,200		$ 4,000,000
Line of credit facility, Principal payments	$ 500,000
Line of credit facility principal payment start date		Nov. 30, 2020	Nov. 30, 2020
Line of credit facility, termination date		Mar. 31, 2025	Mar. 31, 2025
Line of credit facility, Annual principal payment		$ 344,400	$ 500,000
Line of credit facility, floating interest rate during period		2.60%	2.60%
Line of credit facility, interest rate description		Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%.	Monthly interest amounts outstanding under the Term Loan will be payable in arrears at a floating rate quoted by NAB for the applicable pricing period, plus 2.6%.
Master Asset Finance Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 2,066,400		3,000,000
Facility outstanding amount		$ 1,210,280		1,757,085
Debt instrument maturity year		2029	2029
Master Asset Finance Facility | Minimum
Line Of Credit Facility [Line Items]
Interest rate		2.86%	2.86%
Master Asset Finance Facility | Maximum
Line Of Credit Facility [Line Items]
Interest rate		5.03%	5.03%
National Australia Bank
Line Of Credit Facility [Line Items]
Debt guaranteed value		$ 10,332,000		15,000,000
National Australia Bank Ltd Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		27,552,000		40,000,000
Facility outstanding amount		22,041,600		32,000,000
National Australia Bank Ltd Facility | Borrowing Base Line
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 22,041,600		$ 32,000,000					$ 18,722,600	$ 26,000,000
Line of credit facility interest accrued		4.90%		4.90%
National Australia Bank Ltd Facility | Overdraft Credit
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 0		$ 0	$ 748,700	$ 1,000,000	$ 1,497,400	$ 2,000,000	2,160,300	3,000,000
National Australia Bank Ltd Facility | Temporary Extension Overdraft
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		688,800		1,000,000
National Australia Bank Ltd Facility | Master Asset Finance Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		2,066,400		3,000,000					$ 1,440,200	$ 2,000,000
National Australia Bank Ltd Facility | Overdraft Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 688,800		$ 1,000,000
Line of credit facility interest accrued		5.72%		5.72%

XML

Debt - Schedule of Annual Maturities of Short-Term and Long-Term Debt (Details)	Jun. 30, 2022 USD ($)
Debt Disclosure [Abstract]
2023	$ 8,353,426
2024	1,050,062
2025	2,399,706
2026	278,595
2027	264,198
Thereafter	0
Total	$ 12,345,987

XML

Income Taxes - Schedule of Loss Before Income Taxes (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
United States	$ (37,346,576)	$ (22,519,842)
Foreign	1,437,493	3,388,970
Loss before income taxes	$ (35,909,083)	$ (19,130,872)

XML

Income Taxes - Components of Provision for Income Taxes (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Current:
Federal	$ 0	$ 0
State	301	(5,385)
Foreign	266,129	(197,163)
Total current provision	266,430	(202,548)
Deferred:
Federal	(1)	0
State	0	0
Foreign	146,994	178,190
Total deferred provision	146,993	178,190
Provision for (benefit from) income taxes	$ 413,423	$ (24,358)

XML

Income Taxes - Reconciliation of Income Tax Provision and Expected Income Tax Computed Using U.S. Federal Income Tax Rate (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Tax benefit at statutory tax rate	$ (7,540,908)	$ (4,018,362)
State benefit, net of federal benefit	(493,262)	(417,868)
Federal and state research credits - current year	(390,235)	(675,527)
Other permanent differences	184,725	(110,860)
Foreign rate differential	420,829	431,265
Goodwill impairment	549,577	0
Valuation allowance	7,573,300	5,178,300
Tax law changes	0	(411,306)
Other	109,397	0
Provision for (benefit from) income taxes	$ 413,423	$ (24,358)

XML

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Jun. 30, 2022	Jun. 30, 2021
Deferred tax assets:
Net operating loss carry forwards	$ 22,815,372	$ 15,623,619
Tax credit carry forwards	1,388,106	1,169,978
Allowance for bad debts	1,216,187	1,378,422
Lease liability	1,187,090	1,209,560
Other, net	3,116,913	3,214,948
Total deferred tax assets	29,723,668	22,596,527
Valuation allowance for deferred tax assets	(27,437,845)	(19,892,644)
Deferred tax assets, net of valuation allowance	2,285,823	2,703,883
Deferred tax liabilities:
ROU lease asset	(1,226,879)	(1,293,365)
Fixed assets	(1,382,821)	(1,588,708)
Total deferred tax liabilities	(2,609,700)	(2,882,073)
Net deferred tax asset (liability)	$ (323,877)	$ (178,190)

XML

Income Taxes - Additional Information (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Line Items]
Deferred tax assets, increase in valuation allowance	$ 7,500,000
Transactions increase in ownership, period	3 years
Interest limitation carryovers	$ 5,200,000
Undistributed earnings of foreign subsidiaries	7,400,000
Unrecognized tax benefits	77,350
Unrecognized tax benefits that, if recognized, would reduce annual effective tax rate	61,106
Accrued interest and penalties associated with uncertain tax positions	0	$ 0
Unrecognized tax benefits to change significantly	0
Federal
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 98,700,000
Operating loss carryforwards, expiration dates	Jun. 30, 2031
Net operating loss carried forward indefinitely	$ 74,200,000
Research tax credit carryforwards	$ 1,275,701
Research tax credit carryforwards, expiration dates	Jun. 30, 2031
Foreign tax credit carryforwards	$ 322,859
Foreign tax credit carryforwards, expiration dates	Jun. 30, 2023
State
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 32,900,000
Operating loss carryforwards, expiration dates	Jun. 30, 2031
Research tax credit carryforwards	$ 25,089
Australian
Income Tax Disclosure [Line Items]
Operating loss carryforwards	$ 0
Minimum
Income Tax Disclosure [Line Items]
Percentage of transactions increase in ownership of certain stockholders	50.00%

XML

Foreign Currency Contracts - Additional Information (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Foreign Currency Contracts [Line Items]
Foreign exchange contract liability	$ 996,106	$ 96,466
Gain(loss) on foreign exchange contracts	(777,913)	94,214
Foreign Currency Forward Contracts
Foreign Currency Contracts [Line Items]
Foreign currency forward contracts, notional value	14,775,693
Gain(loss) on foreign exchange contracts	$ (958,373)	$ 79,403
Minimum
Foreign Currency Contracts [Line Items]
Foreign currency maturity term	2022-07
Maximum
Foreign Currency Contracts [Line Items]
Foreign currency maturity term	2023-01

XML

Equity - Additional Information (Details) - USD ($)			12 Months Ended
	Oct. 14, 2021	Sep. 23, 2020	Jun. 30, 2022	Jun. 30, 2021	May 17, 2022	Sep. 27, 2021
Class Of Stock [Line Items]
Net proceeds from sale of common stock			$ 11,777,690	$ 10,223,311
ATM Agreement | B. Riley Securities, Inc
Class Of Stock [Line Items]
Maximum aggregate offering price of common stock by agent		$ 14,000,000.0			$ 24,600,000	$ 17,100,000
Percentage of commission on gross proceeds from sale of common stock through agent		3.50%
Gross proceeds from sale of common stock			$ 6,200,000	$ 10,900,000
Number of common stock shares issued during the period			2,633,900	3,008,015
Value of remaining common stock available to issue under agreement			$ 6,300,000	$ 0
Securities Purchase Agreement
Class Of Stock [Line Items]
Proceeds from sale of common stock, net of fees and expenses, shares	1,847,343
Common stock purchase price, per share	$ 2.73
Net proceeds from sale of common stock	$ 5,000,000.0

XML

Equity-Based Compensation - Additional Information (Details) - USD ($)	1 Months Ended	12 Months Ended
	Jan. 31, 2019	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2020	Oct. 31, 2020	Jan. 16, 2019	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2012	Oct. 31, 2012
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options granted		994,725
Exercise price, lower range limit		$ 2.64
Exercise price, upper range Limit		$ 3.39
Stock-based compensation		$ 2,267,186	$ 1,766,353
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, term		10 years
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation, total compensation cost not yet recognized, period for recognition		1 year 2 months 4 days
Number of restricted stock units issued		304,421	291,206
Fair value of awards granted		$ 846,080	$ 1,965,712
Stock-based compensation		982,422	$ 866,017
Unrecognized stock compensation expense related to restricted stock grants		$ 439,089
Maximum | Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		3 years
Maximum | Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		3 years
Minimum | Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		1 year
Minimum | Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Vesting period		1 year
2009 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for issuance of grants						350,343	2,450,000	2,450,000	1,700,000	1,700,000	1,250,000	1,250,000
Options granted	1,143,447
2009 Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, term		10 years
2009 Plan | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options, term		5 years
Voting stock, percentage		10.00%
Fair market value of common stock, percentage		110.00%
2019 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for issuance of grants	2,750,000	2,549,966		4,000,000	4,000,000
Number of shares reserved for issuance under the plan	8,243,790
Number of new shares	4,000,000
2009 and 2019 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options granted and outstanding, weighted average grant date fair value		$ 2.64
Unrecognized stock compensation expense, net of estimated forfeitures, related to options		$ 1,183,831
Stock-based compensation, total compensation cost not yet recognized, period for recognition		1 year 9 months 21 days

XML

Equity-Based Compensation - Schedule of Weighted Average Assumptions (Details) - Stock Options	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Risk free rate, minimum	0.82%	0.24%
Risk free rate, maximum	2.81%	0.33%
Dividend yield	0.00%	0.00%
Volatility, minimum	61.70%	52.10%
Volatility, maximum	64.70%	53.00%
Average forfeiture assumptions	3.20%	2.30%

XML

Equity-Based Compensation - Summary Of Stock Option Activity (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Options, Outstanding as of beginning of period	3,776,568	2,875,894
Options, Granted	994,725	976,924
Options, Exercised	(38,774)	(65,990)
Options, Canceled/forfeited/expired	(95,419)	(10,260)
Options, Outstanding as of end of period	4,637,100	3,776,568	2,875,894
Options, vested and exercisable at end of period	3,229,891
Options, vested and expected to vest	4,629,560
Weighted-Average Exercise Prices, Outstanding as of beginning of period	$ 2.65	$ 2.74
Weighted-Average Exercise Prices, Granted	2.63	2.41
Weighted-Average Exercise Prices, Exercised	2.33	2.48
Weighted-Average Exercise Prices, Canceled/forfeited/expired	2.82	2.94
Weighted-Average Exercise Prices, Outstanding as of end of period	2.64	$ 2.65	$ 2.74
Weighted-Average Exercise Prices, vested and exercisable	2.70
Weighted-Average Exercise Price, vested and expected to vest	$ 2.64
Options Outstanding, Weighted-Average Remaining Contractual Term (in years)	6 years 7 months 6 days	8 years	8 years 7 months 6 days
Weighted-Average Remaining Contractual Term (in years), vested and exercisable	5 years 8 months 12 days
Weighted-Average Remaining Contractual Term (in years), vested and expected to vest	6 years 7 months 6 days
Options, Outstanding, Aggregate Intrinsic Value		$ 3,962,766	$ 22,409

XML

Equity-Based Compensation - Summary of Activity Related to Non-Vested Restricted Stock Units (Details) - Restricted Stock Units - $ / shares	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Nonvested Restricted Stock Units Outstanding, Beginning	361,570	396,803
Number of Nonvested Restricted Stock Units, Granted	304,421	291,206
Number of Nonvested Restricted Stock Units, Vested	(391,036)	(326,439)
Number of Nonvested Restricted Stock Units, Forfeited	(7,036)
Number of Nonvested Restricted Stock Units Outstanding, Ending	267,919	361,570	396,803
Weighted-Average Grant Date Fair Value, Beginning	$ 2.51	$ 2.33
Weighted-Average Grant Date Fair Value, Granted	2.78	2.59
Weighted-Average Grant Date Fair Value, Vested	2.62	2.36
Weighted-Average Grant Date Fair Value, Forfeited	2.35
Weighted-Average Grant Date Fair Value, Ending	$ 2.66	$ 2.51	$ 2.33
Weighted-Average Remaining Contractual Life (Years)	1 year 2 months 12 days	1 year 3 months 18 days	1 year 7 months 6 days
Weighted-Average Remaining Contractual Life (Years), Granted	2 years 4 months 24 days	1 year 10 months 24 days

XML

Series B Convertible Preferred Stock - Additional Information (Details) - USD ($)			12 Months Ended
	Feb. 18, 2022	Sep. 27, 2021	Jun. 30, 2022	Jun. 30, 2021
Temporary Equity [Line Items]
Common stock, par value			$ 0.001	$ 0.001
Net proceeds from sale of common stock			$ 11,777,690	$ 10,223,311
Fair value of Series B Preferred Stock			4,638,521
Accreted to its redemption value			$ 5,000,250	$ 0
Series B Convertible Preferred Stock
Temporary Equity [Line Items]
Preferred stock, shares issued			1,695	1,695
Preferred stock, par value			$ 0.001	$ 0.001
Series B Convertible Preferred Stock | Purchase Agreement
Temporary Equity [Line Items]
Preferred stock, shares issued	1,695
Preferred stock, par value	$ 0.001
Net proceeds from sale of common stock		$ 6,100,000
Warrant exercise price per share	$ 5.00
Temporary equity			$ 361,709
Fair value of Series B Preferred Stock			$ 4,638,521
Initial term of temporary equity issuance of preferred stock.			42 months
Accreted to its redemption value			$ 5,000,250
Series B Convertible Preferred Stock | Purchase Agreement | Minimum
Temporary Equity [Line Items]
Percentage of cash dividends	5.00%
Series B Convertible Preferred Stock | Purchase Agreement | Maximum
Temporary Equity [Line Items]
Percentage of cash dividends	7.00%
Series B Convertible Preferred Stock | Common Stock | Purchase Agreement
Temporary Equity [Line Items]
Warrants to purchase of common stock	559,350
Common stock, par value	$ 0.001
Unit price	$ 2,950
Net proceeds from sale of common stock	$ 5,000,000.0
Convertible preferred stock into common stock	1,000
Percentage of common stock outstanding shares	19.99%
Preferred stock, issuable upon conversion	7,777,652
Series B Convertible Preferred Stock | Common Stock | Purchase Agreement | Minimum
Temporary Equity [Line Items]
Percentage of common stock outstanding shares	4.99%
Series B Convertible Preferred Stock | Common Stock | Purchase Agreement | Maximum
Temporary Equity [Line Items]
Percentage of common stock outstanding shares	19.99%

XML

Series B Convertible Preferred Stock - Summary of Changes to Series B Preferred Stock (Details)	12 Months Ended
	Jun. 30, 2022 USD ($)
Temporary Equity Disclosure [Abstract]
Balance at June 30, 2021	$ 0
Issuance of preferred stock	4,638,521
Dividends accrued	127,541
Accretion of discount for warrants	38,757
Balance at June 30, 2022	$ 4,804,819

XML

Non-Cash Activities for Statements of Cash Flows - Schedule of Consolidated Statements of Cash Flows for Non-Cash Activities (Details) - USD ($)	12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Supplemental Cash Flow Elements [Abstract]
Purchases of equipment classified as finance lease	$ (369,574)	$ (696,303)
Dividends accrued for participating securities and accretion	$ (166,298)	$ 0

XML

Subsequent Events - Additional Information (Details) - USD ($)	Sep. 22, 2022	Nov. 30, 2017	Sep. 21, 2022
2nd Amendment to Rooster Note
Subsequent Event [Line Items]
Debt instrument, maturity date		Nov. 30, 2022
Subsequent Event | MFP Warrants
Subsequent Event [Line Items]
Description of Class of Warrant or Right Formula Pursuant to Loan Agreement	Pursuant to the terms and conditions of the MFP Loan agreement, on September 22, 2022, the Company issued to MFP a warrant, or Initial Warrant, to purchase up to 500,000 shares of the Company’s Common Stock, or Initial Warrant Shares, which number of shares may be reduced by up to one half in connection with any Bank Draws, pursuant to the following formula: (x) $9,000,000 minus the aggregate amount of any Bank Draws as of any exercise date, divided by (y) $9,000,000, multiplied by (z) 250,000. In addition, upon each Bank Draw, the Company will issue to MFP additional warrants, or Additional Warrants (and together with the Initial Warrant, the Warrants), to purchase such number of shares of the Company’s Common Stock as is equal to the quotient of (A) the product of (x) the amount of each Bank Draw multiplied by (y) 40%, divided by (B) $1.60 (together with the Initial Warrant Shares, the Warrant Shares). The Warrant Shares are issuable pursuant to the Warrants at an exercise price of $1.60 per Warrant Share (subject to adjustment in connection with any stock dividends and splits, distributions with respect to Common Stock and certain fundamental transactions as described in the Initial Warrant) and each Warrant will expire five years from the date of issuance.
Warrant expiration term	5 years
Subsequent Event | Maximum | MFP Warrants
Subsequent Event [Line Items]
Initial warrant, to purchase shares of common stock	500,000
Subsequent Event | 6th Amendment to CIBC Loan Agreement
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity	$ 18,000,000		$ 20,000,000
Borrowing base in based on eligible inventory sublimit	$ 9,000,000
Subsequent Event | 2nd Amendment to Rooster Note
Subsequent Event [Line Items]
Debt instrument, maturity date	Dec. 23, 2022
Subsequent Event | MFP Loan Agreement
Subsequent Event [Line Items]
Debt face amount	$ 9,000,000
Debt instrument, maturity date	Jan. 23, 2023
Borrowing base in percentage based on eligible cash fee	3.50%
Subsequent Event | MFP Loan Agreement | Floor Rate
Subsequent Event [Line Items]
Debt instrument, interest rate	1.25%
Subsequent Event | MFP Loan Agreement | SOFR
Subsequent Event [Line Items]
Debt instrument, interest rate	9.25%