0001564590-21-048958.txt : 20210927 0001564590-21-048958.hdr.sgml : 20210927 20210927080528 ACCESSION NUMBER: 0001564590-21-048958 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20210927 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20210927 DATE AS OF CHANGE: 20210927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: S&W Seed Co CENTRAL INDEX KEY: 0001477246 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 271275784 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34719 FILM NUMBER: 211279019 BUSINESS ADDRESS: STREET 1: 2101 KEN PRATT BLVD. STREET 2: SUITE 201 CITY: LONGMONT STATE: CO ZIP: 80501 BUSINESS PHONE: (720) 506-9191 MAIL ADDRESS: STREET 1: 2101 KEN PRATT BLVD. STREET 2: SUITE 201 CITY: LONGMONT STATE: CO ZIP: 80501 8-K 1 sanw-8k_20210927.htm 8-K sanw-8k_20210927.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 27, 2021

S&W SEED COMPANY

(Exact name of registrant as specified in Its charter)

 

Nevada

001-34719

27-1275784

 (State or Other Jurisdiction of Incorporation)

 (Commission File Number)

(IRS Employer Identification Number)

 

2101 Ken Pratt Blvd, Suite 201

Longmont, CO

 

 

80501

(Address of principal executive offices)

 

 

(Zip Code)

 

Registrant's telephone number, including area code: (720) 506-9191

 

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.          

 

 

 

 


 

 

Item 2.02.    Results of Operations and Financial Condition.

On September 27, 2021, S&W Seed Company, or the Company, issued a press release announcing financial results for the fourth quarter and fiscal year ended June 30, 2021. The text of the press release is furnished as Exhibit 99.1 to this current report on Form 8-K.

The information in this Item 2.02 and Exhibit 99.1 hereto shall not be deemed "filed" for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Unless expressly incorporated into a filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, the information contained in this Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any Company filing, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01.    Financial Statements and Exhibits.

(d) Exhibits

 

 

*

This exhibit is furnished and shall not be deemed "filed" for purposes of the Exchange Act, as amended.

2


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

S&W SEED COMPANY

 

 

 

 

 

 

 

By:

/s/ Matthew K. Szot

 

 

Matthew K. Szot

 

 

Executive Vice President of Finance and Administration and Chief Financial Officer

 

 

 

Date: September 27, 2021

 

 

 

3

EX-99.1 2 sanw-ex991_6.htm EX-99.1 sanw-ex991_6.htm

EXHIBIT 99.1

 

S&W Announces Fiscal 2021 Financial Results

 

Conference call to be conducted on Monday, September 27, 2021 at 11:00 am ET

 

For Immediate Release

 

Company Contact:Investor Contact:

Matthew Szot, Chief Financial Officer Robert Blum

S&W Seed CompanyLytham Partners, LLC
Phone: (720) 506-1164Phone: (602) 889-9700
www.swseedco.comsanw@lythampartners.comwww.lythampartners.com

LONGMONT, Colorado – September 27, 2021 – S&W Seed Company (Nasdaq: SANW) today announced financial results for fiscal year 2021 ended June 30, 2021. The Company had announced preliminary fiscal 2021 financial results on August 19, 2021.

 

"The overall strategic plan to evolve S&W into an integrated agricultural seed technology company remains on-track, despite the logistical challenges we encountered in fiscal 2021," commented Mark Wong, President & CEO of S&W Seed Company. "We are seeing strong demand for our recently launched non-GMO herbicide tolerant sorghum solution, Double Team, which we believe provides an opportunity to not only gain sorghum market share, but also expand the size of the overall U.S. sorghum market. We also anticipate the launch of our second novel trait technology product in fiscal 2022, Improved Quality Alfalfa (IQ™), a gene-edited crop to down-regulate lignin synthesis and improve forage digestibility in ruminants. We believe these two innovative new products, coupled with improvements from our existing crop portfolio including our recently announced stevia pilot production program with Ingredion (Nasdaq: INGR), should help to drive revenue growth in the future.”

 

Wong continued, “We have made significant progress in overcoming the logistical challenges we experienced during fiscal 2021, having successfully shipped $5 million of product in the first quarter of fiscal 2022 that was originally expected to ship in fiscal 2021. Additionally, we have undertaken several strategic initiatives that are designed to drive improved operating results going forward, including the implementation of price increases on the majority of our products to address overall rising costs and to more properly reflect the value of our proprietary products and modifying the terms and conditions of standard customer contracts to address the volatility and increased costs of freight and transportation. We expect these actions to translate into improved gross and operating margins in the future.”

Financial Results

Core Revenue (which we define as total revenue, excluding product revenue attributable to Pioneer) for fiscal 2021 was $69.8 million, compared to Core Revenue for fiscal 2020 of $59.9 million, an increase of $9.9 million or 16.5%. Due to continued logistical challenges, approximately $5.0 million of revenue that the Company expected to recognize in the fourth quarter of fiscal 2021 is instead expected to be


recognized in the first quarter of fiscal 2022. Additionally, the Company also experienced weakness in its European sunflower program and delays in certain customer product registrations which also had an impact on the annual results.

As announced in May 2019, S&W entered into a termination agreement and an alfalfa license agreement with Pioneer Hi-Bred International, a subsidiary of Corteva Agriscience, to replace its prior alfalfa distribution agreement with Pioneer. Due to these agreements with Pioneer, S&W plans to disclose Core Revenue as a metric to track performance of its business on a go-forward basis until product revenue attributable to Pioneer is no longer reflected in comparisons between fiscal periods. The increase in Core Revenue for fiscal 2021 can be primarily attributed to Pasture Genetics’ operations in Australia, which the Company acquired on February 24, 2020.

Total revenue for fiscal 2021 was $84.0 million, compared to total revenue for fiscal 2020 of $79.6 million, an increase of 5.5%. For fiscal 2021, S&W recorded product revenue from Pioneer of $14.2 million, compared to $19.7 million in fiscal 2020. As of March 31, 2021, S&W had fully recorded all revenue from Pioneer under the May 2019 agreement.

GAAP gross margins during fiscal 2021 were 16.3% compared to GAAP gross margins of 18.8% in fiscal 2020. Adjusted gross margins, excluding the impact of inventory write-downs (see Table A1), were 18.0% in fiscal 2021 compared to 21.7% in fiscal 2020.

The COVID-19 pandemic had a significant negative impact on logistics, as experienced in several industries across the globe, contributing to delayed shipments to the Company's customers and also increased costs of goods sold. In particular, the Company experienced challenges in shipping product during the quarter ended June 30, 2021, due to limited availability of trucks and marine containers for product deliveries, congestion at ports, and rising shipping and transportation costs. The Company's strategy of concentrating its production to fewer, and larger facilities, became much more challenging due to these industry-wide supply chain issues.

GAAP operating expenses for fiscal 2021 were $33.9 million, compared to $33.7 million in fiscal 2020. The increase in operating expenses for fiscal 2021 can primarily be attributed to a $1.2 million increase in research and development expenses as well as additional expenses from the acquisition of Pasture Genetics, partially offset by a $1.9 million gain on the sale property, plant and equipment.

GAAP net loss for fiscal 2021 was $(19.2) million, or $(0.55) per basic and diluted share, compared to GAAP net loss of $(19.7) million, or $(0.59) per basic and diluted share, in fiscal 2020.

Adjusted net loss (see Table A2) for fiscal 2021 was $(22.5) million, or $(0.65) per basic and diluted share, excluding non-recurring transaction costs, change in contingent consideration obligation and interest expense – amortization of debt discount. Adjusted net loss (see Table A2) for fiscal 2020, excluding transaction costs, change in estimated value of assets held for sale, change in contingent consideration, loss on extinguishment of debt and interest expense – amortization of debt discount, was $(18.4) million, or $(0.55) per basic and diluted share.


Adjusted EBITDA (see Table B) for fiscal 2021 was $(13.1) million, compared to adjusted EBITDA of $(9.7) million in fiscal 2020.

Fiscal 2022 Revenue Guidance

S&W expects fiscal 2022 Core and Total Revenue to be within a range of $80 to $85 million, representing an expected increase of approximately 15% to 20% compared to fiscal 2021 Core Revenue of $69.8 million.

Conference Call

S&W Seed Company has scheduled a conference call for Monday, September 27, 2021, at 11:00 am ET (8:00 am PT) to review these results. Interested parties can access the conference call by dialing (844) 861-5498 or (412) 317-6580 or can listen via a live Internet webcast, which is available in the Investor Relations section of the Company's website at http://www.swseedco.com/investors. A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, confirmation #10160367. A webcast replay will be available in the Investor Relations section of the Company's website at http://www.swseedco.com/investors for 30 days.

Non-GAAP Financial Measures

In addition to financial results reported in accordance with accounting principles generally accepted in the United States of America (“GAAP”), we have provided the following non-GAAP financial measures in this release and the accompanying tables: adjusted gross margins; adjusted net loss; adjusted net loss per share; and adjusted EBITDA. We use these non-GAAP financial measures internally to facilitate period-to-period comparisons and analysis of our operating performance and liquidity, and believe they are useful to investors as a supplement to GAAP measures in analyzing, trending and benchmarking the performance and value of our business. However, these measures are not intended to be a substitute for those reported in accordance with GAAP. These measures may be different from non-GAAP financial measures used by other companies, even when similar terms are used to identify such measures.

For reconciliations of historical non-GAAP financial measures to the most comparable financial measures under GAAP, see Tables A and B accompanying this release.

In order to calculate these non-GAAP financial measures, we make targeted adjustments to certain GAAP financial line items found on our Consolidated Statement of Operations, backing out non-recurring or unique items or items that we believe otherwise distort the underlying results and trends of the ongoing business. We have excluded the following items from one or more of our non-GAAP financial measures for the periods presented:

Selling, general and administrative expenses; operating expenses. We exclude from operating expenses a portion of SG&A expense related to non-recurring transaction expenses related to acquisitions. Such acquisition-related expenses include non-recurring transaction fees, due diligence costs and other direct costs associated with our acquisitions. These amounts are unrelated to our core performance during any particular period and are impacted by the timing of the acquisition. We exclude acquisition-related


expenses from our SG&A expense and total operating expenses to provide investors a method to compare our operating results to prior periods and to peer companies, as such amounts can vary significantly based on the frequency of acquisitions and the magnitude of acquisition expenses.

Change in estimated value of assets held for sale.  The change in estimated value of assets held for sale represents our estimated change in the value of certain properties held for sale.  These amounts are non-cash losses and are unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

Change in contingent consideration obligation.  The change in contingent consideration obligation represents our estimated change in the value of contingent earn-out related to the February 2020 acquisition of Pasture Genetics.  These amounts are non-cash gains and are unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

Loss on extinguishment of debt.   Loss on extinguishment of debt represents the unamortized debt issuance costs related to our terminated KeyBank credit agreement.  These amounts are non-cash losses, and are unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

 

Interest expense – amortization of debt discount.  Amortization of debt discount and debt issuance costs are primarily related to our working capital lines of credit and term loans. These amounts are non-cash charges and are unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.

Non-GAAP Tax Rate.  The estimated non-GAAP effective tax rate adjusts the tax effect to quantify the tax consequences of the excluded non-GAAP items.

Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows:

 

Adjusted gross margins.  We define adjusted gross margins as gross margins, adjusted to exclude the impact of inventory write-downs. We believe that the use of adjusted gross margins is useful to investors and other users of our financial statements in evaluating our operating performance because it provides a method to compare our operating results to prior periods and to peer companies after making adjustments for amounts that can vary significantly from period to period.

Adjusted net loss and loss per share.  We define non-GAAP net loss as net loss less non-recurring transaction costs, change in estimated value of assets held for sale, change in contingent consideration


obligation, loss on extinguishment of debt and interest expense - amortization of debt discount.  However, in order to provide a complete picture of our recurring core business operating results, we also exclude from non-GAAP net loss the tax effects of these adjustments. We used estimated Non-GAAP Tax Rate that we believe would be applied had our income approximated the non-GAAP net loss for the presented periods. We caution investors that the tax effects of these adjustments are based on management's estimates. We believe that these non-GAAP financial measures provide useful supplemental information for evaluating our operating performance.

Adjusted EBITDA. We define Adjusted EBITDA as GAAP net loss, adjusted to exclude non-recurring transaction costs from SG&A, depreciation and amortization, non-cash stock-based compensation, foreign currency (gain) loss, change in estimated value of assets held for sale, change in contingent consideration obligation, loss on extinguishment of debt, interest expense – amortization of debt discount, interest expense, and provision for income taxes. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We use adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance, for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. Management does not place undue reliance on adjusted EBITDA as its only measure of operating performance. Adjusted EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP.

About S&W Seed Company

Founded in 1980, S&W Seed Company is a global agricultural company headquartered in Longmont, Colorado. S&W’s vision is to be the world’s preferred proprietary seed company which supplies a range of forage and specialty crop products that supports the growing global demand for animal proteins and healthier consumer diets. S&W is a global leader in proprietary alfalfa and sorghum seeds, with significant research and development, production and distribution capabilities. S&W’s product portfolio also includes hybrid sunflower and wheat and the company is utilizing its research and breeding expertise to develop and produce stevia, the all-natural, zero calorie sweetener for the food and beverage industry. For more information, please visit www.swseedco.com.

Safe Harbor Statement

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may,” “future,” “plan” or “planned,” “will” or “should,” “expected,” “anticipates,” “draft,” “eventually” or “projected.” Forward-looking statements in this release include, but are not limited to: anticipated results of the commercial launch of Double Team; the anticipated launch of Improved Quality Alfalfa (IQ™), expected revenue growth; benefits anticipated from strategic initiatives designed to improve operating results; expectations regarding the duration and impact of logistical challenges that affected our results of operations in the quarter ended June 30, 2021; our guidance on Core Revenue for the fiscal year ending June 30, 2022; and our plans for the advancement of our business strategy.  You are cautioned that such statements are


subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including: the effects of the COVID-19 pandemic on our business and operations; risks related to our need to raise additional capital in the future and our ability to continue as a “going concern”; changes in market conditions, including any unexpected decline in commodity prices, may harm our results of operations and revenue outlook; our proprietary seed trait technology products may not yield their anticipated benefits; changes in the competitive landscape and the introduction of competitive products may negatively impact our results of operations; our business strategic initiatives may not achieve the expected results; previously experienced logistical challenges in shipping and transportation of our products may become amplified and further decrease our gross margins; and the risks associated with our ability to successfully optimize and commercialize our business. These and other risks are identified in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 10-K for the year ended June 30, 2021 and in other filings subsequently made by the Company with the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made and are based on management’s assumptions and estimates as of such date. We do not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events or otherwise.

 

 

 


S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

2021

 

 

 

2020

 

 

2021

 

 

 

2020

 

 

 

Revenue

 

$

22,765,623

 

 

 

$

25,864,756

 

 

$

84,049,036

 

 

 

$

79,582,198

 

 

 

Cost of revenue

 

 

19,078,447

 

 

 

 

22,620,497

 

 

 

70,372,139

 

 

 

 

64,647,936

 

 

 

Gross profit

 

 

3,687,176

 

 

 

 

3,244,259

 

 

 

13,676,897

 

 

 

 

14,934,262

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

5,465,178

 

 

 

 

5,684,186

 

 

 

21,867,529

 

 

 

 

21,348,092

 

 

 

Research and development expenses

 

 

2,031,891

 

 

 

 

2,035,040

 

 

 

8,515,786

 

 

 

 

7,336,754

 

 

 

Depreciation and amortization

 

 

1,342,805

 

 

 

 

1,416,229

 

 

 

5,469,581

 

 

 

 

5,036,464

 

 

 

Gain on disposal of property, plant and equipment

 

 

(553,323

)

 

 

 

(2,505

)

 

 

(1,906,738

)

 

 

 

(23,299

)

 

 

Total operating expenses

 

 

8,286,551

 

 

 

 

9,132,950

 

 

 

33,946,158

 

 

 

 

33,698,011

 

 

 

Loss from operations

 

 

(4,599,375

)

 

 

 

(5,888,691

)

 

 

(20,269,261

)

 

 

 

(18,763,749

)

 

 

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency (gain) loss

 

 

(77,509

)

 

 

 

31,221

 

 

 

(94,214

)

 

 

 

98,620

 

 

 

Change in estimated value of assets held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

92,931

 

 

 

Change in contingent consideration obligation

 

 

(3,768,812

)

 

 

 

(302,139

)

 

 

(4,016,904

)

 

 

 

(302,139

)

 

 

Government grant income

 

 

 

 

 

 

(1,958,600

)

 

 

 

 

 

 

(1,958,600

)

 

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

 

 

140,638

 

 

 

Interest expense - amortization of debt discount

 

 

187,913

 

 

 

 

161,114

 

 

 

689,514

 

 

 

 

555,049

 

 

 

Interest expense

 

 

546,379

 

 

 

 

588,202

 

 

 

2,283,215

 

 

 

 

1,970,882

 

 

 

Loss before income taxes

 

 

(1,487,346

)

 

 

 

(4,408,489

)

 

 

(19,130,872

)

 

 

 

(19,361,130

)

 

 

Provision for income taxes

 

 

188,962

 

 

 

 

368,744

 

 

 

(24,358

)

 

 

 

385,968

 

 

 

Net loss

 

$

(1,676,308

)

 

 

$

(4,777,233

)

 

$

(19,106,514

)

 

 

$

(19,747,098

)

 

 

Net income (loss) attributed to noncontrolling interests

 

 

8,155

 

 

 

 

24,996

 

 

 

64,453

 

 

 

 

(72,774

)

 

 

Net loss attributable to S&W Seed Company

 

$

(1,684,463

)

 

 

$

(4,802,229

)

 

$

(19,170,967

)

 

 

$

(19,674,324

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to S&W Seed Company per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.05

)

 

 

$

(0.14

)

 

$

(0.55

)

 

 

$

(0.59

)

 

 

Diluted

 

$

(0.05

)

 

 

$

(0.14

)

 

$

(0.55

)

 

 

$

(0.59

)

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,440,732

 

 

 

 

33,423,894

 

 

 

34,590,883

 

 

 

 

33,348,263

 

 

 

Diluted

 

 

36,440,732

 

 

 

 

33,423,894

 

 

 

34,590,883

 

 

 

 

33,348,263

 

 

 

 

 

 


 

 

 

 

TABLE A1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S&W SEED COMPANY

ITEMIZED RECONCILIATION BETWEEN GROSS PROFIT AND NON-GAAP ADJUSTED GROSS PROFIT

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

Gross profit

 

$

3,687,176

 

 

$

3,244,259

 

 

$

13,676,897

 

 

$

14,934,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory write-downs

 

 

162,956

 

 

 

868,673

 

 

 

1,416,029

 

 

 

2,344,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjusted gross profit

 

$

3,850,132

 

 

$

4,112,932

 

 

$

15,092,926

 

 

$

17,279,062

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjusted gross margin

 

 

16.9

%

 

 

15.9

%

 

 

18.0

%

 

 

21.7

%

 

 

 

TABLE A2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

S&W SEED COMPANY

ITEMIZED RECONCILIATION BETWEEN NET LOSS AND NON-GAAP ADJUSTED NET LOSS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

Net loss attributable to S&W Seed Company

 

$

(1,684,463

)

 

$

(4,802,229

)

 

$

(19,170,967

)

 

$

(19,674,324

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recurring transaction costs

 

 

-

 

 

 

207,447

 

 

 

20,000

 

 

 

792,993

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in estimated value of assets held for sale

 

 

-

 

 

 

-

 

 

 

-

 

 

 

92,931

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

140,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in contingent consideration obligation

 

 

(3,768,812

)

 

 

(302,139

)

 

 

(4,016,904

)

 

 

(302,139

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense - amortization of debt discount

 

 

187,913

 

 

 

161,114

 

 

 

689,514

 

 

 

555,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjusted net loss

 

$

(5,265,362

)

 

$

(4,735,807

)

 

$

(22,478,357

)

 

$

(18,394,852

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjusted net loss attributable to S&W Seed Company per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.14

)

 

$

(0.14

)

 

$

(0.65

)

 

$

(0.55

)

 

Diluted

 

$

(0.14

)

 

$

(0.14

)

 

$

(0.65

)

 

$

(0.55

)

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,440,732

 

 

 

33,423,894

 

 

 

34,590,883

 

 

 

33,348,263

 

 

Diluted

 

 

36,440,732

 

 

 

33,423,894

 

 

 

34,590,883

 

 

 

33,348,263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


TABLE B

 

S&W SEED COMPANY

ITEMIZED RECONCILIATION BETWEEN NET LOSS AND NON-GAAP ADJUSTED EBITDA

(UNAUDITED)

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

 

 

June 30,

 

June 30,

 

 

 

 

 

2021

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

Net loss attributed to S&W Seed Company

 

$

 

(1,684,463

)

 

 

(4,802,229

)

 

$

 

(19,170,967

)

 

$

 

(19,674,324

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-recurring transaction costs

 

 

 

-

 

 

 

207,447

 

 

 

 

20,000

 

 

 

 

792,993

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash stock-based compensation

 

 

 

462,914

 

 

 

373,760

 

 

 

 

1,766,353

 

 

 

 

1,167,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

1,342,805

 

 

 

1,416,229

 

 

 

 

5,469,581

 

 

 

 

5,036,464

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency (gain) loss

 

 

 

(77,509

)

 

 

31,221

 

 

 

 

(94,214

)

 

 

 

98,620

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in estimated fair value of assets held for sale

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

92,931

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in contingent consideration obligation

 

 

 

(3,768,812

)

 

 

(302,139

)

 

 

 

(4,016,904

)

 

 

 

(302,139

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

 

140,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense - amortization of debt discount

 

 

 

187,913

 

 

 

161,114

 

 

 

 

689,514

 

 

 

 

555,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

546,379

 

 

 

588,202

 

 

 

 

2,283,215

 

 

 

 

1,970,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

 

188,962

 

 

 

368,744

 

 

 

 

(24,358

)

 

 

 

385,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP adjusted EBITDA

 

$

 

(2,801,811

)

 

 

(1,957,651

)

 

$

 

(13,077,780

)

 

$

 

(9,734,967

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


S&W SEED COMPANY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2021

 

 

 

June 30, 2020

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

3,527,937

 

 

$

 

4,123,094

 

Accounts receivable, net

 

 

 

19,389,213

 

 

 

 

19,023,098

 

Inventories, net

 

 

 

63,395,256

 

 

 

 

63,882,938

 

Prepaid expenses and other current assets

 

 

 

1,555,530

 

 

 

 

1,374,677

 

TOTAL CURRENT ASSETS

 

 

 

87,867,936

 

 

 

 

88,403,807

 

Property, plant and equipment, net

 

 

 

17,740,974

 

 

 

 

20,494,312

 

Intangibles, net

 

 

 

37,130,942

 

 

 

 

38,784,058

 

Goodwill

 

 

 

1,651,634

 

 

 

 

1,508,675

 

Other assets

 

 

 

7,079,490

 

 

 

 

6,764,781

 

TOTAL ASSETS

 

$

 

151,470,976

 

 

$

 

155,955,633

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

 

15,947,918

 

 

$

 

8,045,694

 

Deferred revenue

 

 

 

385,328

 

 

 

 

6,171,904

 

Accrued expenses and other current liabilities

 

 

 

9,134,869

 

 

 

 

9,618,892

 

Lines of credit, net

 

 

 

33,946,565

 

 

 

 

26,983,264

 

Current portion of long-term debt, net

 

 

 

1,681,166

 

 

 

 

1,780,522

 

TOTAL CURRENT LIABILITIES

 

 

 

61,095,846

 

 

 

 

52,600,276

 

Long-term debt, net, less current portion

 

 

 

11,590,500

 

 

 

 

14,328,823

 

Contingent consideration obligation

 

 

 

741,552

 

 

 

 

4,263,503

 

Other non-current liabilities

 

 

 

3,649,885

 

 

 

 

3,427,054

 

TOTAL LIABILITIES

 

 

 

77,077,783

 

 

 

 

74,619,656

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 shares authorized;

   no shares issued and outstanding

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 75,000,000 shares authorized;

   36,772,983 issued and 36,747,983 outstanding at June 30, 2021;

   33,457,861 issued and 33,432,861 outstanding at June 30, 2020;

 

 

 

36,773

 

 

 

 

33,458

 

Treasury stock, at cost, 25,000 shares

 

 

 

(134,196

)

 

 

 

(134,196

)

Additional paid-in capital

 

 

 

149,684,357

 

 

 

 

137,809,540

 

Accumulated deficit

 

 

 

(69,311,909

)

 

 

 

(50,140,942

)

Accumulated other comprehensive loss

 

 

 

(5,850,826

)

 

 

 

(6,111,424

)

Noncontrolling interests

 

 

 

(31,006

)

 

 

 

(120,459

)

TOTAL STOCKHOLDERS' EQUITY

 

 

 

74,393,193

 

 

 

 

81,335,977

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

 

151,470,976

 

 

$

 

155,955,633

 

 

 

 

 


S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

 

Year Ended

 

 

 

 

June 30,

 

 

 

 

2021

 

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

     Net loss

 

$

 

(19,106,514

)

 

$

 

(19,747,098

)

     Adjustments to reconcile net loss from operating activities to net

 

 

 

 

 

 

 

 

 

 

        cash used in operating activities

 

 

 

 

 

 

 

 

 

 

        Stock-based compensation

 

 

 

1,766,353

 

 

 

 

1,167,951

 

        Change in allowance for doubtful accounts

 

 

 

(235,201

)

 

 

 

(255,000

)

        Inventory write-down

 

 

 

1,416,029

 

 

 

 

2,344,800

 

        Depreciation and amortization

 

 

 

5,469,581

 

 

 

 

5,036,464

 

        Gain on disposal of property, plant and equipment

 

 

 

(1,906,738

)

 

 

 

(23,299

)

        Change in foreign exchange contracts

 

 

 

79,403

 

 

 

 

(7,615

)

        Change in contingent consideration obligation

 

 

 

(4,016,904

)

 

 

 

(302,139

)

        Change in estimated fair value of assets held for sale

 

 

 

-

 

 

 

 

92,931

 

        Loss on debt extinguishment

 

 

 

-

 

 

 

 

140,638

 

        Amortization of debt discount

 

 

 

689,514

 

 

 

 

555,049

 

       Changes in:

 

 

 

-

 

 

 

 

-

 

           Accounts receivable

 

 

 

504,021

 

 

 

 

(1,819,625

)

            Inventories

 

 

 

648,448

 

 

 

 

11,083,296

 

            Prepaid expenses and other current assets

 

 

&