10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period year ended September 30, 2021

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file 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 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 is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

The number of shares outstanding of common stock of the registrant as of November 11, 2021 was 38,715,137.

S&W SEED COMPANY

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	Page No.
Item 1.	Financial Statements (Unaudited):	4
	Consolidated Balance Sheets at September 30, 2021 and June 30, 2021	4
	Consolidated Statements of Operations for the Three Months Ended September 30, 2021 and 2020	5
	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended September 30, 2021 and 2020	6
	Consolidated Statements of Stockholders’ Equity for the Three Months Ended September 30, 2021 and 2020	7
	Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2021 and 2020	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
PART II.	OTHER INFORMATION	40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41

1

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, 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 statements concerning projections of revenue, margins, expenses, tax provisions, earnings, cash flows and other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding our ability to raise capital in the future; any statements concerning expected development, performance or market acceptance relating to our products or services or our ability to expand our grower or customer bases or to diversify our product offerings; any statements regarding future economic conditions or performance; any statements of expectation or belief; any statements regarding our ability to retain key employees; and any statements of assumptions underlying any of the foregoing. These forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “designed,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions or variations intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our current expectations about future events. Such forward-looking statements are subject to risks, uncertainties and other important factors, including certain assumptions, that, if they never materialize or they prove incorrect, could cause our actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Risks, uncertainties and assumptions include the following:

• the duration of the COVID-19 pandemic and the extent to which it continues 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 and stevia development program;

• our plans for expansion of our business (including by expanding crop offerings and market share of existing offerings through transactions) 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;

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

• other risks that are described herein and in the section titled “Risk Factors” contained in Part I, Item A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, 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 Quarterly Report on Form 10-Q, some of which are beyond our control, will be important in determining our future performance. Consequently, these statements are inherently uncertain and actual results may differ materially from those that might be anticipated from the forward-looking statements. In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this Quarterly Report on Form 10-Q as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Furthermore, such forward-looking statements represent our views as of, and speak only as of, the date of this Quarterly Report on Form 10-Q, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. We undertake no obligation to publicly update any forward-looking statements, or to update the reasons why actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

2

When used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “the Company,” “S&W” and “S&W Seed” refer to S&W Seed Company and its subsidiaries or, as the context may require, S&W Seed Company only. Our fiscal year ends on June 30, and accordingly, the terms “fiscal 2022,” “fiscal 2021,” and “fiscal 2020” in this Quarterly Report on Form 10-Q 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.

3

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

S&W SEED COMPANY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

ASSETS	September 30, 2021			June 30, 2021
CURRENT ASSETS
Cash and cash equivalents	$	1,894,727		$	3,527,937
Accounts receivable, net		22,247,866			19,389,213
Inventories, net		63,270,451			63,395,256
Prepaid expenses and other current assets		1,550,732			1,555,530
TOTAL CURRENT ASSETS		88,963,776			87,867,936
Property, plant and equipment, net		17,500,733			17,740,974
Intangibles, net		36,207,261			37,130,942
Goodwill		1,586,212			1,651,634
Other assets		7,129,149			7,079,490
TOTAL ASSETS	$	151,387,131		$	151,470,976
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	17,460,233		$	15,947,918
Deferred revenue		706,285			385,328
Accrued expenses and other current liabilities		9,726,059			9,134,869
Lines of credit, net		38,463,464			33,946,565
Current portion of long-term debt, net		8,420,259			1,681,166
TOTAL CURRENT LIABILITIES		74,776,300			61,095,846
Long-term debt, net, less current portion		4,407,195			11,590,500
Contingent consideration obligation		650,970			741,552
Other non-current liabilities		3,678,763			3,649,885
TOTAL LIABILITIES		83,513,228			77,077,783
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;                                   36,802,094 issued and 36,777,094 outstanding at September 30, 2021;          36,772,983 issued and 36,747,983 outstanding at June 30, 2021;		36,802			36,773
Treasury stock, at cost, 25,000 shares		(134,196	)		(134,196	)
Additional paid-in capital		150,040,406			149,684,357
Accumulated deficit		(75,711,884	)		(69,311,909	)
Accumulated other comprehensive loss		(6,311,953	)		(5,850,826	)
Noncontrolling interests		(45,272	)		(31,006	)
TOTAL STOCKHOLDERS' EQUITY		67,873,903			74,393,193
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	151,387,131		$	151,470,976

See notes to consolidated financial statements.

4

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended September 30,
	2021			2020
Revenue	$	15,531,682		$	13,855,386
Cost of revenue		12,405,012			12,074,454
Gross profit		3,126,670			1,780,932
Operating expenses
Selling, general and administrative expenses		5,587,635			4,684,744
Research and development expenses		1,995,128			2,016,686
Depreciation and amortization		1,331,045			1,378,088
Gain on disposal of property, plant and equipment		(18,067	)		(1,000	)
Total operating expenses		8,895,741			8,078,518
Loss from operations		(5,769,071	)		(6,297,586	)
Other expense
Foreign currency loss		162,545			99,217
Change in contingent consideration obligation		(62,254	)		104,821
Interest expense - amortization of debt discount		192,195			110,136
Interest expense		518,486			572,283
Loss before income taxes		(6,580,043	)		(7,184,043	)
Provision for income taxes		(165,802	)		1,833
Net loss	$	(6,414,241	)	$	(7,185,876	)
Net loss attributed to noncontrolling interests		(14,266	)		(13,116	)
Net loss attributable to S&W Seed Company	$	(6,399,975	)	$	(7,172,760	)
Net loss attributable to S&W Seed Company per common share:
Basic	$	(0.17	)	$	(0.21	)
Diluted	$	(0.17	)	$	(0.21	)
Weighted average number of common shares outstanding:
Basic		36,773,864			33,450,569
Diluted		36,773,864			33,450,569

See notes to consolidated financial statements.

5

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended September 30,
	2021			2020
Net loss	$	(6,414,241	)	$	(7,185,876	)
Foreign currency translation adjustment, net of income taxes		(461,127	)		276,838
Comprehensive loss	$	(6,875,368	)	$	(6,909,038	)
Comprehensive loss attributable to noncontrolling interests		(14,266	)		(13,116	)
Comprehensive loss attributable to S&W Seed Company	$	(6,861,102	)	$	(6,895,922	)

See notes to consolidated financial statements.

6

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

	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		—		—		—		—		—			—			320,409			—			—			—			320,409
Net issuance to settle RSUs		—		—		17,708		18		—			—			(17,285	)		—			—			—			(17,267	)
Other comprehensive loss		—		—		—		—		—			—			—			—			—			276,838			276,838
Net loss		—		—		—		—		—			—			—			(7,172,760	)		(13,116	)		—			(7,185,876	)
Balance, September 30, 2020		—	$	—		33,475,569	$	33,476		(25,000	)	$	(134,196	)	$	138,112,664		$	(57,313,702	)	$	(133,575	)	$	(5,834,586	)	$	74,730,081
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		—		—		—		—		—			—			394,312			—			—			—			394,312
Proceeds from sale of common stock, net of fees and expenses		—		—		848		1		—			—			2,480			—			—			—			2,481
Net issuance to settle RSUs		—		—		28,263		28		—			—			(40,743	)		—			—			—			(40,715	)
Other comprehensive income		—		—		—		—		—			—			—			—			—			(461,127	)		(461,127	)
Net loss		—		—		—		—		—			—			—			(6,399,975	)		(14,266	)		—			(6,414,241	)
Balance, September 30, 2021		—	$	—		36,802,094	$	36,802		(25,000	)	$	(134,196	)	$	150,040,406		$	(75,711,884	)	$	(45,272	)	$	(6,311,953	)	$	67,873,903

See notes to consolidated financial statements.

7

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended September 30,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(6,414,241	)	$	(7,185,876	)
Adjustments to reconcile net loss from operating activities to net
cash used in operating activities
Stock-based compensation		394,312			320,409
Change in allowance for doubtful accounts		97,028			35,435
Inventory write-down		307,000			908,497
Depreciation and amortization		1,331,045			1,378,088
Gain on disposal of property, plant and equipment		(18,067	)		(1,000	)
Change in foreign exchange contracts		235,912			(7,615	)
Change in contingent consideration obligation		(62,254	)		104,821
Amortization of debt discount		192,195			110,136
Changes in:
Accounts receivable		(3,247,001	)		(957,486	)
Inventories		(1,040,417	)		(3,103,060	)
Prepaid expenses and other current assets		(17,504	)		69,035
Other non-current asset		(17,800	)		53,916
Accounts payable		1,949,750			4,046,160
Deferred revenue		324,688			2,099,161
Accrued expenses and other current liabilities		566,298			(1,262,195	)
Other non-current liabilities		(65,426	)		(80,409	)
Net cash used in operating activities		(5,484,482	)		(3,471,983	)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(470,960	)		(121,525	)
Proceeds from disposal of property, plant and equipment		18,313			2,000
Net cash used in investing activities		(452,647	)		(119,525	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock		2,481			—
Taxes paid related to net share settlements of stock-based compensation awards		(40,715	)		(17,267	)
Borrowings and repayments on lines of credit, net		5,274,959			3,208,863
Borrowings of long-term debt		150,768			—
Debt issuance costs		(103,261	)		(54,956	)
Repayments of long-term debt		(452,544	)		(439,027	)
Net cash provided by financing activities		4,831,688			2,697,613
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(527,769	)		300,795
NET DECREASE IN CASH & CASH EQUIVALENTS		(1,633,210	)		(593,100	)
CASH AND CASH EQUIVALENTS, beginning of the period	$	3,527,937		$	4,123,094
CASH AND CASH EQUIVALENTS, end of period	$	1,894,727		$	3,529,994
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest	$	702,477		$	768,530
Income taxes		50,942			55,463

See notes to consolidated financial statements.

8

S&W SEED COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 owns seed cleaning and processing facilities, which are located in Nampa, Idaho, Dumas, Texas, New Deal, Texas, Keith, South Australia and Penfield, 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 initiatives.

The Company had a long-term distribution agreement with Pioneer Hi-Bred International, Inc., or Pioneer, now a subsidiary of Corteva Agriscience, Inc., which is jointly referred to as 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.  

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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.  We have 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 September 30, 2021. We have 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.  

Unaudited Interim Financial Information

The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, for interim financial reporting. These consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company’s consolidated balance sheets, statements of operations, comprehensive income (loss), cash flows and stockholders’ equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2022. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Annual Report, as filed with the SEC.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, 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.

10

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. Four customers accounted for 26% of its revenue for the three months ended September 30, 2021. Two customers accounted for 23% of its revenue for the three months ended September 30, 2020.

One customer accounted for 13% of the Company’s accounts receivable at September 30, 2021. 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 76% and 61% of revenue during the three months ended September 30, 2021 and 2020, respectively. The net book value of fixed assets located outside the United States was 20% and 19% of total fixed assets at September 30, 2021 and June 30, 2021, respectively. Cash balances located outside of the United States may not be insured and totaled $382,290 and $204,813 at September 30, 2021 and June 30, 2021, respectively.

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

	Three Months Ended September 30,
	2021				2020
United States	$	3,665,328	24	%	$	5,361,777	39	%
Saudi Arabia		3,467,210	22	%		1,198,909	9	%
Australia		3,434,005	22	%		2,782,464	20	%
Libya		1,044,000	7	%		225,000	2	%
Sudan		819,618	5	%		484,700	3	%
China		473,125	3	%		—	0	%
South Africa		464,229	3	%		664,075	5	%
Egypt		402,300	3	%		394,200	3	%
Argentina		350,839	2	%		85	0	%
Mexico		228,420	1	%		1,136,090	8	%
Other		1,182,608	8	%		1,608,086	11	%
Total	$	15,531,682	100	%	$	13,855,386	100	%

Liquidity and Covid-19 Pandemic

The Company is monitoring the impact of the COVID-19 pandemic 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 has found these alternative approaches to generally be less effective than in-person sales efforts. In particular, the Company’s sales cycle is highly seasonal, and the majority of its sales season activities for the United States and Australia are typically concentrated between March and June of each year. If ongoing measures to protect against COVID-19 remain in effect throughout the 2022 sales season, the Company may experience similar negative impacts that it experienced during the 2020 and 2021 sales seasons.

Further, vaccine mandates may be enforced in jurisdictions in which our business operates. Although it is not possible to predict with certainty the impact of these measures on our business and workforce, these requirements may result in attrition, difficulty securing future labor needs, and may further disrupt the national supply chain, all of which could have a material adverse effect on our business, financial condition and results of operations.

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

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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, this would adversely affect the Company’s product revenue.

During the year ended June 30, 2021 and the three months ended September 30, 2021, 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 throughout fiscal 2022.

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.

The Company’s loan and security agreement with CIBC Bank USA, or CIBC, and the Company’s secured promissory notes with Conterra Agriculture Capital, LLC contains various operating and financial covenants (See Note 8). The COVID-19 pandemic has 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 loan and security agreement with CIBC requires the Company to comply with a minimum EBITDA covenant for the fiscal quarters ending September 30, 2021 and December 31, 2021 and a fixed charge coverage ratio, tested on a trailing twelve-month basis beginning with the quarter ending March 31, 2022. It also requires the Company to maintain minimum liquidity of no less than $3,000,000 at all times. The Company believes it is uncertain it will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet these covenants. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is unable to meet these covenants, the Company will need to raise additional capital or secure future waivers and/or amendments from its lenders. There can be no assurance the Company will be successful in raising additional capital or securing future waivers and/or amendments from its lenders. If the Company is unable to raise sufficient additional capital or secure future waivers and/or amendments, it may need to reduce the scope of its operations, repay amounts owing to its lenders or sell certain assets. 

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 $155,657 and $57,582 at September 30, 2021 and June 30, 2021, respectively.

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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:

	September 30, 2021		June 30, 2021
Raw materials and supplies	$	1,749,836	$	2,722,832
Work in progress		11,316,519		6,662,006
Finished goods		50,204,096		54,010,418
	$	63,270,451	$	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, 15 years for trade names, 17 years for license agreements and 18 years for other intangible assets.

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Goodwill

Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value 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 fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  The Company performed a quantitative assessment of goodwill at June 30, 2021 on its one reporting unit and determined that goodwill was not impaired. See Note 6 for further information.

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 $1.3 million at September 30, 2021 and June 30, 2021, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted 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.    

No adjustments for impairment or observable transactions were made for the three months ended September 30, 2021 or the year ended June 30, 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 three months ended September 30, 2021 and September 30, 2020 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.

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

	Three Months Ended September 30,
	2021			2020
Numerator:
Net loss attributable to S&W Seed Company	$	(6,399,975	)	$	(7,172,760	)
Numerator for basis EPS		(6,399,975	)		(7,172,760	)
Effect of dilutive securities:
Warrants		—			—
		—			—
Numerator for diluted EPS	$	(6,399,975	)	$	(7,172,760	)
Denominator:
Denominator for basic EPS-weighted- average    shares		36,773,864			33,450,569
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		36,773,864			33,450,569
Basic EPS	$	(0.17	)	$	(0.21	)
Diluted EPS	$	(0.17	)	$	(0.21	)

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 three months ended September 30, 2021 and 2020.  

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 4 and Note 6 for impairment discussion.

Derivative Financial Instruments

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.

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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 September 30, 2021 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	324,595	$	—
Contingent consideration obligations	$	—	$	—	$	650,970
Total	$	—	$	324,595	$	650,970

	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.

NOTE 3 - LEASES

S&W leases office and laboratory space, 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 in 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 three months ended September 30, 2021. The Company’s lease agreements do not contain material restrictive covenants.

The components of lease assets and liabilities are as follows:

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Leases	Balance Sheet Classification	September 30, 2021
Assets:
Right of use assets - operating leases	Other assets	$	4,455,308
Right of use assets - finance leases	Other assets		2,280,077
Accumulated amortization - finance leases	Other assets		(1,038,206	)
Right of use assets - finance leases, net	Other assets		1,241,871
Total lease assets		$	5,697,179
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net		893,753
Current lease liabilities	Accrued expenses and other current liabilities		1,280,322
Long-term debt, net	Long-term debt, net		925,005
Long-term lease liabilities	Other long-term liabilities		3,472,734
Total lease liabilities		$	6,571,814

The components of lease cost are as follows:

Leases	Income Statement Classification	Three Months Ended September 30, 2021
Operating lease cost	Cost of revenue	$	172,582
Operating lease cost	Selling, general and administrative expenses		82,043
Operating lease cost	Research and development expenses		122,280
Finance lease cost	Depreciation and amortization and interest		183,261
Total lease costs		$	560,166

Maturities of lease liabilities as of September 30, 2021 are as follows:

	Operating Leases			Finance Leases
Remainder of 2022	$	1,190,320		$	707,929
2023		1,162,910			861,026
2024		1,063,293			282,194
2025		727,353			50,734
2026		644,553			19,845
After 2026		401,534			—
Total lease payments		5,189,963			1,921,728
Less: Interest		(436,907	)		(102,970	)
Present value of lease liabilities	$	4,753,056		$	1,818,758

The following are the weighted average assumptions used for lease term and discount rate and supplemental cash flow information related to leases as of and for the three months ended September 30, 2021:

Operating lease remaining lease term	4.5 years
Operating lease discount rate		4.10	%
Finance lease remaining lease term	2.2 years
Finance lease discount rate		5.10	%
Cash paid for operating leases	$	293,400
Cash paid for finance leases	$	379,503

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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 terminations discussed above, the Company entered into a license agreement 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 payments of $45.0 million in fiscal 2019, $16.7 million in fiscal 2020, and $8.3 million in fiscal 2021, which totaled $70.0 million. Approximately $34.2 million of these amounts referenced above has been allocated to the license to the Company’s alfalfa varieties. The $34.2 million was reported as licensing revenue in the consolidated statement of operations for the fiscal year ended June 30, 2019.  

The remaining amounts were 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.  The Company allocated approximately $1.8 million to an unbilled receivable related to revenue recognition at contract termination and the remainder of the payments was allocated to the license using a residual method approach.  The unbilled receivable is $0 as of September 30, 2021 and June 30, 2021.

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:

	Three Months Ended September 30,
	2021		2020
Pioneer product sales	$	—	$	1,622,363
Other product sales		14,905,402		11,870,912
Services		626,280		362,111
	$	15,531,682	$	13,855,386

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Pioneer Product Sales

For the three months ended September 30, 2020, 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 120 days for export customers and end of sales season (September 30^th) 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 three months ended September 30, 2021, the Company recognized bad debt expense of $97,028 associated with impaired accounts receivable. During the three months ended September 30, 2020, the Company recognized bad debt expense of $35,435 associated with impaired accounts receivable.

Deferred revenue represents payments received from customers in advance of completion of the Company's performance obligation. During the three months ended September 30, 2021, the Company recognized $0.2 million of revenue that was included in the deferred balance as of June 30, 2021. During the three months ended September 30, 2020, the Company recognized $6.1 million of revenue that was included in the deferred balance as of June 30, 2020.

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

The following table summarizes the activity of goodwill for the three months ended September 30, 2021 and the year ended June 30, 2021, respectively.

	Balance at July 1, 2021		Additions		Impairment		Currency Translation Adjustment			Balance at September 30, 2021
Goodwill	$	1,651,634	$	—	$	—	$	(65,422	)	$	1,586,212

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

Intangible assets consist of the following:

	Balance at July 1, 2021		Additions		Impairment		Amortization			Currency Translation Adjustment			Balance at September 30, 2021
Trade name	$	1,310,489	$	—	$	—	$	(51,038	)	$	(12,778	)	$	1,246,673
Customer relationships		6,302,591		—		—		(94,264	)		(214,597	)		5,993,730
Non-compete		5,058		—		—		(2,701	)		—			2,357
GI customer list		50,146		—		—		(1,791	)		—			48,355
Supply agreement		850,874		—		—		(18,908	)		—			831,966
Grower relationships		1,436,988		—		—		(26,351	)		—			1,410,637
Intellectual property		24,427,857		—		—		(348,933	)		—			24,078,924
License agreement		2,340,269		—		—		(43,558	)		(91,817	)		2,204,894
Internal use software		406,670		—		—		(16,945	)		—			389,725
	$	37,130,942	$	—	$	—	$	(604,489	)	$	(319,192	)	$	36,207,261

	Balance at July 1, 2020		Additions			Impairment		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 $604,489 and $594,720 for the three months ended September 30, 2021 and 2020, respectively. Estimated aggregate remaining amortization is as follows:

	2022		2023		2024		2025		2026		Thereafter
Amortization expense	$	1,805,435	$	2,354,830	$	2,332,295	$	2,320,745	$	2,234,328	$	25,159,628

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NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

	September 30, 2021			June 30, 2021
Land and improvements	$	2,281,733		$	2,297,529
Buildings and improvements		8,154,956			8,196,593
Machinery and equipment		13,921,828			13,935,053
Vehicles		1,016,775			1,046,937
Leasehold Improvements		552,810			552,810
Construction in progress		373,007			48,480
Total property, plant and equipment		26,301,109			26,077,402
Less: accumulated depreciation		(8,800,376	)		(8,336,428	)
Property, plant and equipment, net	$	17,500,733		$	17,740,974

Depreciation expense totaled $570,510 and $691,483 for the three months ended September 30, 2021 and 2020, respectively.

NOTE 8 - DEBT

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

	September 30, 2021			June 30, 2021
Working capital lines of credit
CIBC	$	15,898,798		$	14,500,000
National Australia Bank Limited		21,386,970			19,494,800
National Australia Bank Limited Overdraft Facility		1,726,226			617,471
Debt issuance costs		(548,530	)		(665,706	)
Total working capital lines of credit, net	$	38,463,464		$	33,946,565
Current portion of long-term debt
Finance lease	$	893,753		$	909,413
Debt issuance costs		(4,281	)	$	(5,077	)
Term Loan - National Australia    Bank Limited		360,050			374,900
Machinery & equipment loans -    National Australia Bank Limited		182,606			165,802
Secured real estate note - Conterra		7,085,613			275,684
Debt issuance costs		(97,482	)		(39,556	)
Total current portion, net		8,420,259			1,681,166
Long-term debt, less current portion
Finance lease		925,005			1,108,709
Debt issuance costs		(1,080	)		(1,847	)
Term Loan - National Australia    Bank Limited		2,880,400			2,999,200
Machinery & equipment loans -    National Australia Bank Limited		602,870			526,564
Secured real estate note - Conterra		—			6,974,356
Debt issuance costs		—			(16,482	)
Total long-term portion, net		4,407,195			11,590,500
Total debt, net	$	12,827,454		$	13,271,666

On December 26, 2019, the Company entered into a Loan and Security Agreement, or the Loan Agreement, with 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 and September 27, 2021.  As amended, the Loan Agreement provides for a $25.0 million revolving credit facility.       

The following is a summary of certain terms of the CIBC Credit Facility:

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• 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 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 may be based on (i) a Base Rate plus 1.0% per annum or (ii) LIBOR Rate plus 3.0% per annum (both as defined in the Loan Agreement), generally at the Company’s option. Pursuant to the September 27, 2021 amendment, the Loans will be based on Prime 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 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 2021 amendment to the Loan Agreement, CIBC waived noncompliance with the Company’s fixed charge coverage ratio as of June 30, 2021 and suspended the Company’s fixed charge coverage ratio financial covenants for the fiscal quarters ending September 30, 2021 and December 31, 2021 and replaced that financial covenant with a minimum EBITDA threshold tested quarterly for the quarters ending September 30, 2021 and December 31, 2021.  Pursuant to the September 2021 amendment, the Company reverts back to its previous financial covenant to require that it maintain a fixed charge coverage ratio equal to or greater than (i) 1.00 to 1.00 for the quarters ended March 31, 2022 and (ii) 1.15 to 1.00 for each fiscal quarter thereafter. In addition, pursuant to the September 2021 amendment, the Company is required to maintain liquidity of no less than $3,000,000 at all times for the remainder of the term of the Loan Agreement. As of September 30, 2021, the Company was in compliance with all CIBC debt covenants.  

As of September 30, 2021, there was approximately $1.5 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. On December 24, 2019, the Company entered into an amendment to extend the note’s maturity date to November 30, 2022, and revise the amounts payable under the note.  Pursuant to the December 2019 amendment, the Company agreed to make (i) a principal and interest payment of approximately $515,711 on January 1, 2020; (ii) five consecutive semi-annual principal and interest payments of approximately $454,185, beginning on July 1, 2020; and (iii) a one-time final payment of approximately $8,957,095 on November 30, 2022. The Company may prepay the Secured Real Estate 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 Company will also make three consecutive semi-annual principal and interest payments of approximately $388,045, beginning on July 1, 2021; and a one-time final payment of approximately $7,184,109 on November 30, 2022. The Company was in compliance with all debt covenants as of September 30, 2021.

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

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At September 30, 2021, 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 $10,801,500) and cross-guaranteed by S&W Australia and Pasture Genetics.   

In June 2020, S&W Australia executed documentation to consolidate the Pasture Genetics debt facility with NAB into its debt facilities with NAB.  The documentation became effective in July 2020. The consolidated debt facilities with NAB provide for up to an aggregate of AUD $35,500,000 (USD $25,563,550) of credit as of September 30, 2021, 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 $3,000,000 (USD $2,160,300 at September 30, 2021) and (ii) a Borrowing Base Line having a credit limit of AUD $26,000,000 (USD $18,722,600 at September 30, 2021). In March 2021, S&W Australia entered into an amendment with NAB which temporarily increased the Overdraft Facility to AUD $3,000,000 (USD $2,160,300) for a three-month period and extended the maturity date of the seasonal credit facility to June 30, 2022. During the three months ended September 30, 2021, NAB temporarily increased the credit limit of the Borrowing Base Line to AUD $29,700,000 (USD $21,386,970). As of September 30, 2021, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 3.5% 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 September 30, 2021, the Overdraft Facility accrued interest at approximately 5.47% per annum calculated daily. As of September 30, 2021, AUD $32,097,203 (USD $23,113,196) 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 $4,500,000 million (USD $3,240,450 at September 30, 2021). 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. 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 2026 and have interest rates ranging from 2.86% to 5.31%.  The credit limit under the facility is AUD $2,000,000 (USD $1,440,200 at September 30, 2021).  As of September 30, 2021, AUD $731,109 (USD $526,472) was outstanding under S&W Australia’s master asset finance facility.

• S&W Australia was in compliance with all debt covenants under the debt facilities with NAB at September 30, 2021.

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

Fiscal Year	Amount
2022	$	1,262,508
2023		8,322,235
2024		802,225
2025		2,316,599
2026		183,936
Thereafter		42,794
Total	$	12,930,297

NOTE 9 – EQUITY

On September 23, 2020, the Company 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 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.

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On September 27, 2021, the Company entered into an amendment to the At Market Issuance Sales Agreement, under which the aggregate offering price was increased from $14 million to $17.1 million. For the three months ended September 30, 2021, the Company received gross proceeds of approximately $2,586 from the sale of 848 shares of its common stock pursuant to the ATM Agreement.

As of September 30, 2021, the Company had $6.2 million remaining under the ATM Agreement.

In December 2020, the Company’s shareholders approved the amendment to the Company’s Articles of Incorporation to increase the authorized number of shares of common stock from 50,000,000 shares to 75,000,000 shares.  

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 $5,483,354 at September 30, 2021, and their maturities range from October 2021 to April 2022.

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 $324,595 at September 30, 2021 and foreign currency contract liabilities totaled $96,466 at June 30, 2021. The Company recorded a loss on foreign exchange contracts of $238,803 for the three months ended September 30, 2021 and a gain on foreign exchange contracts of $4,746 for the three months ended September 30, 2020, which are both reflected in cost of revenue.

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-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, plus (ii) 2,750,000 additional shares that were reserved as of the effective date of the 2019 Plan, plus (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

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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 options grants.

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

	September 30,
	2021	2020
Risk free rate	N/A	N/A
Dividend yield	N/A	N/A
Volatility	N/A	N/A
Average forfeiture assumptions	N/A	N/A

During the three months ended September 30, 2021 and 2020, the Company did not grant options to its directors, certain members of the executive management team and other employees.

A summary of stock option activity for the three months ended September 30, 2021 and the year ended June 30, 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		—			—		—		—
Exercised		(38,774	)		2.33		—		—
Canceled/forfeited/expired		(31,669	)		2.35		—		—
Outstanding at September 30, 2021		3,706,125			2.65		7.7		600,620
Options vested and exercisable at September 30, 2021		2,195,366			2.83		7.2		304,247
Options vested and expected to vest as of    September 30, 2021		3,701,852		$	2.65		7.7	$	599,796

There were no options granted for the three months ended September 30, 2021. At September 30, 2021, the Company had $1,137,377 of unrecognized stock compensation expense, net of estimated forfeitures, which will be recognized over the weighted average remaining service period of 1.6 years. The Company settles employee stock option exercises with newly issued shares of common stock.

There were no restricted stock units granted during the three months ended September 30, 2021 and 2020.         

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The Company recorded $171,524 and $160,882 of stock-based compensation expense associated with grants of restricted stock units during the three months ended September 30, 2021 and 2020, 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		—			—		—
Vested		(30,531	)		2.51		—
Forfeited		(7,036	)		2.35		—
Nonvested restricted units outstanding at September 30, 2021		324,003		$	2.51		1.2

At September 30, 2021, the Company had $402,915 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.2 years.

At September 30, 2021, there were 3,731,341 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 three months ended September 30, 2021 and 2020, totaled $394,312 and $320,409, respectively.

NOTE 13 - 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 three months ended September 30, 2021 and 2020, respectively.

	Three Months Ended September 30,
	2021			2020
Purchases of equipment classified as finance lease	$	(81,209	)	$	(20,834	)

NOTE 14 – SUBSEQUENT EVENTS

On October 14, 2021, the Company entered into a Securities Purchase Agreement with MFP Partners, L.P., 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.

On November 11, 2021, S&W Australia amended its seasonal credit and master asset finance 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 $23,043,200 at September 30, 2021);

• the overdraft credit limit under the seasonal credit facility decreased from AUD $3,000,000 (USD $2,160,300 at September 30, 2021) to AUD 2,000,000 (USD $1,440,200 at September 30, 2021) and will decrease to AUD 0on June 30, 2022;

• the credit limit under the master asset finance facility increased to AUD $2,000,000 (USD $1,440,200 at September 30, 2021) to AUD $3,000,000 (USD $2,160,300 at September 30, 2021); and

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

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

You should read the following discussion of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q. In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements as referred to on page 2 of this Quarterly Report on Form 10-Q. Factors that could cause or contribute to these differences include those discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, 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 growing 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 2022-2023 fiscal years.

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 high 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 farmer-dealer 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 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 DoubleTeam™ grassy 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-free trait in sorghum species, which essentially eliminates potential livestock death from hydrogen cyanide poisoning when grazing sorghum.

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In 2019, we restructured our relationship with Corteva, under which, among other things:

o We received $45.0 million in fiscal 2019, $16.7 million in fiscal 2020, and approximately $8.3 million in fiscal 2021

o Corteva received a fully pre-paid, exclusive license to produce and distribute certain of our alfalfa varieties world-wide (except South America). The licensed varieties include certain of our existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties. Corteva received no license to our other commercial alfalfa varieties or pre-commercial alfalfa pipeline products and no rights to any future products developed by us.

o We assigned to Corteva grower production contract rights, and Corteva assumed grower production contract obligations, related to the licensed and certain other alfalfa varieties.

o Our prior Distribution Agreement, related to conventional (non-GMO) alfalfa varieties, and Contract Alfalfa Production Services Agreement, related to GMO-traited alfalfa varieties, with Corteva both terminated.  Under the Distribution Agreement, Corteva was obligated to make minimum annual purchases from us.

As a result of the 2018 Chromatin acquisition, the 2019 restructuring of our relationship with Corteva, and our February 2020 acquisition of Pasture Genetics, we expect that our results of operations for fiscal 2022 and future periods will differ significantly from prior periods as the mix of our product portfolio rebalances away from a reliance on alfalfa sales (sales of alfalfa seed to Corteva totaled $14.2 million and $19.7 million during the year ended June 30, 2021 and 2020) to a more diverse product mix. We do not expect any other significant revenue from sales to Corteva in the future.

COVID-19 Update

We are monitoring the impact of the COVID-19 global pandemic on our business and have implemented measures designed to protect the health and safety of our workforce, including a voluntary work-from-home policy for employees who can perform their jobs offsite. We are continuing our activities and are taking precautionary measures to protect our employees working in our facilities.  

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 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 our target markets implemented various stat-at-home, shelter-in-place and other quarantine measures in response to the COVID-19 pandemic.  As a result, we have shifted certain of our sales activities to video conferencing and similar customer interaction models. We continue to evaluate our sales approach, but we have found these alternative approaches to generally be less effective than in-person sales efforts.  In particular, 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 each year. If ongoing measures designed to protect against COVID-19 remain in effect throughout the 2022 sales season, we may experience similar negative impacts that we experienced during the 2020 and 2021 sales seasons.

Further, vaccine mandates may be enforced in jurisdictions in which our business operates. Although it is not possible to predict with certainty the impact of these measures on our business and workforce, these requirements may result in attrition, difficulty securing future labor needs, and may further disrupt the national supply chain, all of which could have a material adverse effect on our business, financial condition and results of operations.

In addition, 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. 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 year ended June 30, 2021 and three months ended September 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 2022.

Given these uncertainties, at this time we cannot reasonably estimate the overall impact of the COVID-19 pandemic on our business, operating results and financial condition.

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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 other, 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 into gene-edited products in future periods, and our strategic acquisitions.

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

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

Cost of Revenue

Cost of revenue relates to sale of our seed 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,

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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.

Other (Income) Expense

Other expense consists primarily of foreign currency gains and losses, change in contingent consideration obligation, changes in the estimated fair value of assets held for sale 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, 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. 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

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Revenue and Cost of Revenue

Revenue for the three months ended September 30, 2021 was $15.5 million compared to $13.9 million for the three months ended September 30, 2020. The $1.6 million increase in revenue for the three months ended September 30, 2021 was primarily due to $3.0 million increase in core product revenue in alfalfa and pasture products, partially offset by a $1.6 million decrease in product revenue received from Pioneer (subsidiary of Corteva). In May 2019, we terminated the production and distribution agreements with Pioneer, and entered into a new license agreement with Corteva. As of June 30, 2021, we have fully recorded all revenue from Pioneer under its agreement announced in May 2019. During the three months ended September 30, 2021 we recorded no sales to Pioneer, compared to $1.6 million for the three months ended September 30, 2020.

Core Revenue (which we define as total revenue, excluding product revenue attributable to Pioneer) for the three months ended September 30, 2021 was $15.5 million compared to Core Revenue for the three months ended September 30, 2020 of $12.2 million, representing an increase of $3.3 million or 27%.  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 three months ended September 30, 2021 can be attributed to an increase in alfalfa revenues in the Middle East and North Africa region and pasture products in Australia.

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Sales into international markets represented 76% and 61% of our total revenue during the three months ended September 30, 2021 and 2020, respectively. Domestic revenue accounted for 24% and 39% of our total revenue for the three months ended September 30, 2021 and 2020, respectively. 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.

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

	Three Months Ended September
	2021				2020
United States	$	3,665,328	24	%	$	5,361,777	39	%
Saudi Arabia		3,467,210	22	%		1,198,909	9	%
Australia		3,434,005	22	%		2,782,464	20	%
Libya		1,044,000	7	%		225,000	2	%
Sudan		819,618	5	%		484,700	3	%
China		473,125	3	%		—	0	%
South Africa		464,229	3	%		664,075	5	%
Egypt		402,300	3	%		394,200	3	%
Argentina		350,839	2	%		85	0	%
Mexico		228,420	1	%		1,136,090	8	%
Other		1,182,608	8	%		1,608,086	11	%
Total	$	15,531,682	100	%	$	13,855,386	100	%

Cost of revenue of $12.4 million for the three months ended September 30, 2021 was equal to 79.9% of total revenue for the three months ended September 30, 2021, while the cost of revenue of $12.1 million for the three months ended September 30, 2020 was equal to 87.1% of total revenue for the three months ended September 30, 2020. Cost of revenue for the three months ended September 30, 2021 and 2020 included inventory write-downs of $0.3 million and $0.9 million, respectively. The write-down of inventory during the three months ended September 30, 2021 related to certain inventory lots that deteriorated in quality and germination rates during the quarter.   

Gross profit margin for the three months ended September 30, 2021 was 20.1% compared to 12.9% in the three months ended September 30, 2020. The increase in gross margin for the three months ended September 30, 2021 is primarily driven by the decrease in inventory write-downs, coupled with higher margin alfalfa seed and pasture product sales.  During the three months ended September 30, 2021, the Company experienced numerous logistical challenges due to limited availability of trucks for product deliveries, congestion at the ports, and overall rising costs increases of shipping and transportation costs.  The Company expects these logistical challenges to persist throughout the remainder of fiscal 2022.

Selling, General and Administrative Expenses

Selling, General and Administrative, or SG&A, expense for the three months ended September 30, 2021 totaled $5.6 million compared to $4.7 million for the three months ended September 30, 2020. The $0.9 million increase in SG&A expense versus the comparable period of the prior year was primarily due to $0.2 million of increases in sales and marketing expenditures as well as a $0.7 million change in our incentive compensation accruals. As a percentage of revenue, SG&A expenses were 36.0% for the three months ended September 30, 2021, compared to 33.8% for the three months ended September 30, 2020.

Research and Development Expenses

Research and development expenses for each of the three months ended September 30, 2021 and September 30, 2020 totaled $2.0 million. We expect that research and development costs will total approximately $8.0 million for the year ended June 30, 2022.  

Depreciation and Amortization

Depreciation and amortization expense for the three months ended September 30, 2021 was $1.3 million compared to $1.4 million for the three months ended September 30, 2020. Included in these amounts was amortization expense for intangible assets, which totaled $0.6 million for the three months ended September 30, 2021 and $0.6 million for the three months ended September 30, 2020.

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Foreign Currency Loss

We recorded a foreign currency loss of $0.2 million for the three months ended September 30, 2021 compared to a loss of $0.1 million for the three months ended September 30, 2020. The foreign currency gains and losses are primarily associated with S&W Australia and S&W Hungary, our wholly-owned subsidiaries.

Change in Contingent Consideration Obligation

The contingent consideration obligation is considered a level 3 fair value financial instrument and will be measured at each reporting period. The $0.1 million benefit to non-cash change in contingent consideration obligation for the three-months ended September 30, 2021 represents 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 three months ended September 30, 2021 was $0.2 million compared to $0.1 million for the three months ended September 30, 2020. The expense in both periods 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 each of the three months ended September 30, 2021 and September 30, 2020 totaled $0.6 million. Interest expense for the three months ended September 30, 2021 and 2020 primarily consisted of interest incurred on the working capital credit facilities, the secured property loan entered into in November 2017, and equipment capital leases.

Provision for Income Taxes

Income tax benefit totaled $165,802 for the three months ended September 30, 2021 compared to income tax expense of $1,833 for the three months ended September 30, 2020. Our effective tax rate was 2.5% for the three months ended September 30, 2021 compared to an effective tax rate of 0.0% for the three months ended September 30, 2020. Our effective tax rate was relatively consistent period over period.  Our effective tax rate for the three months ended September 30, 2020 was 0.0% due to the valuation allowance recorded against substantially all of our deferred tax assets. 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, with the exception of our operations in Australia, as such results are generally incorporated in our net operating loss deferred tax asset position, which has a full valuation allowance against it. As of June 30, 2021, we converted to a net deferred tax liability position in Australia, as our GAAP basis currently exceeds our tax basis in certain intangible assets in that jurisdiction. Therefore, we are recording a tax benefit related to losses incurred in the quarter by our Australian subsidiaries.  Our effective tax rate for the current quarter is driven by this Australian tax benefit and minor state taxes.

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 2021, we paid our North American growers approximately 50% of amounts due in the fall of 2020 and the balance was paid in the spring of 2021. This payment cycle to our growers was similar in fiscal year 2020, and we expect it to be similar for fiscal year 2022.  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.

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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.

On February 24, 2020, S&W Australia acquired all of the issued and outstanding shares of Pasture Genetics, the PG Acquisition, for an initial consideration that consisted of an upfront cash payment at closing of USD $7.5 million (AUD $11.4 million). A potential earn-out payment of up to USD $5.3 million (AUD $8.0 million), or the Earn-Out, is payable on September 30, 2022, or the Earn-Out Date. The amount of any Earn-Out will be equal to the excess, if any, of (a) 7.5, multiplied by the average of an agreed-upon calculation of Pasture Genetics’ earnings over fiscal years 2021 and 2022, above (b) USD $7.5 million (AUD $11.4 million). At S&W Australia’s election, up to 50% of the Earn-Out may be paid in shares of our common stock at a per share purchase price equal to the volume-weighted average purchase price of our common stock during the 10-day period ending immediately prior to the Earn-Out Date.

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

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. We currently expect that our cash and cash equivalents may be sufficient to enable us to fund our operations for at least the next 12 months. However, 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 Bank USA, or CIBC, and our secured promissory notes with Conterra contain various operating and financial covenants, and the COVID-19 pandemic has 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. For example, we were not in compliance with certain of these covenants as of June 30, 2021 and we were required to obtain waivers and/or amendments from CIBC and Conterra. We believe it is uncertain we will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet these covenants in future periods. These factors raise substantial doubt regarding our ability to continue as a going concern. If we are unable to meet these covenants, we will need to raise additional capital in the future to enhance our working capital. This may include, for example, the need to finance our cash needs through a combination of equity and debt financings, as well as potentially entering into collaborations, strategic alliances and licensing arrangements.

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

• the timing of repayment of our debt;

• the extent and duration of future operating income;

• the level and timing of future sales and expenditures;

• working capital required to support our growth;

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• investment capital for plant and equipment;

• our sales and marketing programs;

• investment capital for potential acquisitions;

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

• competition;

• market developments; and

• developments related to the COVID-19 pandemic.

We cannot assure you that we will be successful in raising additional capital or securing future waivers and/or amendments from CIBC or our other lenders. If we are unable to raise sufficient additional capital or secure future waivers and/or amendments, we may need to reduce the scope of our operations, repay amounts owing to our lenders or sell certain assets.  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.

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 and September 27, 2021. As amended, the Loan Agreement provides for a $25.0 million credit facility, or 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 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 may be based on (i) a Base Rate plus 1.0% per annum or (ii) LIBOR Rate plus 3.0% per annum (both as defined in the Loan Agreement), generally at our option. Pursuant to the September 27, 2021 amendment, the Loans will now be based on Prime 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 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 2021 amendment to the Loan Agreement, CIBC waived noncompliance with our fixed charge coverage ratio as of June 30, 2021 and suspended our fixed charge coverage ratio financial covenants for the fiscal quarters ended September 30, 2021 and December 31, 2021 and replaced that financial covenant with the minimum EBITDA threshold tested quarterly for the quarters ending September 30, 2021 and December 31, 2021.  Pursuant to the September 2021 amendment, we revert back to our previous financial covenant to require that we maintain a fixed charge coverage ratio equal to or greater than (i) 1.00 to 1.00, beginning with the fiscal quarters ending March 31, 2022 and (ii) 1.15 to 1.00 for each fiscal quarter thereafter.  In addition, pursuant to the September 2021 amendment, we are required to maintain liquidity of no less than $3,000,000 at all times for the remainder of the term of the Loan Agreement. As of September 30, 2021, we were in compliance with the Loan Agreement.

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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. 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. 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.

Australian Facilities

At September 30, 2021, S&W Australia has debt facilities with NAB, all of which are guaranteed by S&W Seed Company up to a maximum of AUD $15,000,000 (USD $10,801,500 at September 30, 2021) and cross-guaranteed by S&W Australia.

In June 2020, S&W Australia executed documentation to consolidate the Pasture Genetics debt facility with NAB into its debt facilities with NAB. The documentation became effective in July 2020.  The consolidated debt facilities with NAB provide up to an aggregate of AUD $35,500,000 (USD $25,563,550) of credit as of September 30, 2021, 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 line having a credit limit of AUD $3,000,000 (USD $2,160,300 at September 30, 2021) and (ii) a borrowing base line having a credit limit of AUD $26,000,000 (USD $18,722,600 at September 30, 2021). In March 2021, S&W Australia entered into an amendment with NAB which temporarily increased the Overdraft Facility to AUD $3,000,000 (USD 2,160,300) for a three-month period and extended the maturity date of the seasonal credit facility to June 30, 2022. As of September 30, 2021, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 3.5% 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 September 30, 2021, the Overdraft Facility accrued interest at approximately 5.47% per annum calculated daily. As of September 30, 2021, AUD $32,097,203 (USD $23,113,196) 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 $4,500,000 (USD $3,240,450) at September 30, 2021. 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. 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 June 2026 and have interest rates ranging from 2.86% to 5.31%.  The credit limit under the facility is AUD $2,000,000 (USD $1,440,200) at September 30, 2021.  As of September 30, 2021, AUD $731,109 (USD $526,472) was outstanding under S&W Australia’s master asset finance facility.

S&W Australia was in compliance with all debt covenants under the debt facilities with NAB at September 30, 2021.

Equity Issuances

On September 23, 2020 and as amended on September 27, 2021, 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.  

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 our common stock pursuant to the ATM Agreement.  For the three months ended September 30, 2021, we received gross proceeds of approximately $2,586 from the sale of 848 shares of our common stock pursuant to the ATM Agreement.

As of September 30, 2021, the Company had $6.2 million remaining under the ATM Agreement.

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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., 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.

Summary of Cash Flows

The following table shows a summary of our cash flows for the three months ended September 30, 2021 and 2020:

	Three Months Ended                  September 30,
	2021			2020
Cash flows from operating activities	$	(5,484,482	)	$	(3,471,983	)
Cash flows from investing activities		(452,647	)		(119,525	)
Cash flows from financing activities		4,831,688			2,697,613
Effect of exchange rate changes on cash		(527,769	)		300,795
Net increase (decrease) in cash and cash equivalents		(1,633,210	)		(593,100	)
Cash and cash equivalents, beginning of period		3,527,937			4,123,094
Cash and cash equivalents, end of period	$	1,894,727		$	3,529,994

Operating Activities

For the three months ended September 30, 2021, operating activities used $5.5 million in cash. Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows used $3.9 million in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows used $1.5 million in cash. The decrease in cash from changes in operating assets and liabilities was primarily driven by increases in inventory of $1.0 million and accounts receivable of $3.2 million, partially offset by increases in accounts payable of $1.9 million and accrued expenses and other current liabilities of $0.5 million.

For the three months ended September 30, 2020, operating activities used $3.5 million in cash. Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows used $4.4 million in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows provided $0.9 million in cash. The increase in cash from changes in operating assets and liabilities was primarily driven by increases in accounts payable of $4.0 million and deferred revenue of $2.1 million, partially offset by increases in inventory of $3.1 million and accounts receivable of $1.0 million.

Investing Activities

Investing activities during the three months ended September 30, 2021 used $0.5 million in cash. We had additions to property, plant and equipment of $0.5 million consisting primarily of machinery and equipment purchases for Penfield and Keith facilities in Australia.

Investing activities during the three months ended September 30, 2020 used $0.1 million in cash. We had additions to property, plant and equipment of $0.1 million consisting primarily of machinery and equipment purchases for our facility in New Deal, Texas and additions to our global IT infrastructure project.

Financing Activities

Financing activities during the three months ended September 30, 2021 provided $4.9 million in cash. During the three months ended September 30, 2021, we had net borrowings on the working capital lines of credit of $5.3 million and net repayments of long-term debt of $0.4 million.

Financing activities during the three months ended September 30, 2020 provided $2.7 million in cash. During the three months ended September 30, 2020, we had net borrowings on the working capital lines of credit of $3.2 million and net repayments of long-term debt of $0.4 million.

Inflation Risk

36

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

Off Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the three months ended September 30, 2021.

Critical Accounting Policies

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

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

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

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.  We adopted Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment, or ASU 2017-04, effective July 1, 2018. This standard eliminates Step 2 from the goodwill impairment test. Instead, we perform our annual or interim goodwill impairment test by comparing the fair value of our one reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

The goodwill balance at September 30, 2021 and June 30, 2021 relates to our February 2020 acquisition of Pasture Genetics. Upon completing the impairment test on our one reporting unit, there was no impairment for the year ended June 30, 2021.

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 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).

37

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. 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 three months ended September 30, 2021, we recognized a write-down of inventory in the amount of $0.3 million which is included in Cost of Revenue in the Consolidated Statement of Operations. The write-down of inventory during the three months ended September 30, 2021 was primarily related to certain inventory lots that deteriorated in quality and germination rates during the quarter.

During the three months ended September 30, 2020, we recognized a write-down of inventory in the amount of $0.9 million which is included in Cost of Revenue in the Consolidated Statement of Operations. The write-down of inventory during the three months ended September 30, 2020 related to certain inventory lots that deteriorated in quality or germination rates during the quarter.

Allowance for Doubtful Accounts 

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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

38

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2021. 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 September 30, 2021, 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.

Changes in Internal Control over Financial Reporting

There have been no 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.

39

Part II

OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

We are a smaller reporting company, and, as such, we are not required to provide the information under this Item of Form 10-Q.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On November 11, 2021, S&W Australia amended its seasonal credit and master asset finance facilities with National Australia Bank Ltd, or 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 $23,043,200 at September 30, 2021);

• the overdraft credit limit under the seasonal credit facility decreased from AUD $3,000,000 (USD $2,160,300 at September 30, 2021) to AUD 2,000,000 (USD $1,440,200 at September 30, 2021) and will decrease to AUD $0 on 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 $2,160,300 at September 30, 2021);.

• the month in which annual principal repayments are required on the Term Loan was adjusted from November to May to each fiscal year.

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Item 6. Exhibits.

Exhibit No.	Description
3.1(1)	Registrant's Articles of Incorporation, as amended.
3.2(2)	Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock.
3.3(3)	Registrant’s Second Amended and Restated Bylaws, together with Amendment One thereto.
4.1	Reference is made to Exhibits 3.1, 3.2 and 3.3.
4.2(4)	Form of Common Stock Certificate.
10.1(5)	Securities Purchase Agreement, dated October 14, 2021, by and among the Company and the Purchasers.
10.2(6)	Registration Rights Agreement, dated October 14, 2021, by and among the Company and the Purchasers.
10.3(7)+	Employment Agreement between the Registrant and Matthew K. Szot, dated September 27, 2021.
10.4(8)+	Employment Agreement between the Registrant and Mark W. Wong, dated September 27, 2021.
10.5(9)+	Employment Agreement between the Company and Donald Panter, dated September 27, 2021.
10.6(10)+	Employment Agreement between the Company and David Callachor, dated September 27, 2021.
10.7(11)	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
31.1	Certification of Chief Executive Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

(1) Incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Report on Form 10-Q, filed on February 11, 2021 (File No. 001-34719).

(2) Incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed on October 25, 2018 (File No. 001-34719).

(3) Incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q, filed on May 14, 2020 (File No. 001-34719).

(4) Incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-3, filed on August 4, 2017 (File No. 333-219726).

41

(5) Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on October 18, 2021 (File No. 001-34719).

(6) Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed on October 18, 2021 (File No. 001-34719).

(7) Incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K, filed on September 28, 2021 (File No. 001-34719).

(8) Incorporated by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K, filed on September 28, 2021 (File No. 001-34719).

(9) Incorporated by reference to Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K, filed on September 28, 2021 (File No. 001-34719).

(10) Incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K, filed on September 28, 2021 (File No. 001-34719).

(11) Incorporated by reference to Exhibit 10.37 to the Registrant’s Annual Report on Form 10-K, filed on September 28, 2021 (File No. 001-34719).

+       Management contract or compensatory plan or arrangement

** This certification accompanies the Quarterly Report on Form 10-Q 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-Q), irrespective of any general incorporation language contained in such filing.

42

SIGNATURES

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

	S&W SEED COMPANY
Date: November 12, 2021	By:	/s/ Matthew K. Szot
		Matthew K. Szot
		Executive Vice President of Finance and Administration and Chief Financial Officer (On behalf of the registrant in his capacity as Principal Financial and Accounting Officer)

43

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-Q of S&W Seed Company, or 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: November 12, 2021

/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, Matthew K. Szot, certify that:

1. I have reviewed this report on Form 10-Q of S&W Seed Company, or 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: November 12, 2021

/s/ Matthew K. Szot

Executive Vice President of Finance and

Administration and 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 Quarterly Report on Form 10-Q of S&W Seed Company, or the Company, for the quarter ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof, or 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 (15 U.S.C. 78m(a) or 780(d)); 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: November 12, 2021

/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 Quarterly Report on Form 10-Q of S&W Seed Company, or the Company, for the quarter ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof, or the Report, I, Matthew K. Szot, Executive Vice President and 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 (15 U.S.C. 78m(a) or 780(d)); 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: November 12, 2021

/s/ Matthew K. Szot

Matthew K. Szot

Executive Vice President of Finance and

Administration and Chief Financial Officer

(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2021	Nov. 11, 2021
Cover [Abstract]
Entity Registrant Name	S&W Seed Co
Entity Central Index Key	0001477246
Document Type	10-Q
Document Period End Date	Sep. 30, 2021
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Small Business	true
Entity Emerging Growth Company	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 Common Stock, Shares Outstanding		38,715,137
Document Fiscal Period Focus	Q1
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 Quarterly Report	true
Document Transition Report	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2021	Jun. 30, 2021
CURRENT ASSETS
Cash and cash equivalents	$ 1,894,727	$ 3,527,937
Accounts receivable, net	22,247,866	19,389,213
Inventories, net	63,270,451	63,395,256
Prepaid expenses and other current assets	1,550,732	1,555,530
TOTAL CURRENT ASSETS	88,963,776	87,867,936
Property, plant and equipment, net	17,500,733	17,740,974
Intangibles, net	36,207,261	37,130,942
Goodwill	1,586,212	1,651,634
Other assets	7,129,149	7,079,490
TOTAL ASSETS	151,387,131	151,470,976
CURRENT LIABILITIES
Accounts payable	17,460,233	15,947,918
Deferred revenue	706,285	385,328
Accrued expenses and other current liabilities	9,726,059	9,134,869
Lines of credit, net	38,463,464	33,946,565
Current portion of long-term debt, net	8,420,259	1,681,166
TOTAL CURRENT LIABILITIES	74,776,300	61,095,846
Long-term debt, net, less current portion	4,407,195	11,590,500
Contingent consideration obligation	650,970	741,552
Other non-current liabilities	3,678,763	3,649,885
TOTAL LIABILITIES	83,513,228	77,077,783
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.001 par value; 75,000,000 shares authorized; 36,802,094 issued and 36,777,094 outstanding at September 30, 2021; 36,772,983 issued and 36,747,983 outstanding at June 30, 2021;	36,802	36,773
Treasury stock, at cost, 25,000 shares	(134,196)	(134,196)
Additional paid-in capital	150,040,406	149,684,357
Accumulated deficit	(75,711,884)	(69,311,909)
Accumulated other comprehensive loss	(6,311,953)	(5,850,826)
Noncontrolling interests	(45,272)	(31,006)
TOTAL STOCKHOLDERS' EQUITY	67,873,903	74,393,193
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 151,387,131	$ 151,470,976

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2021	Jun. 30, 2021
STOCKHOLDERS' EQUITY
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	36,802,094	36,772,983
Common stock, shares outstanding	36,777,094	36,747,983
Treasury stock, shares	25,000	25,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Income Statement [Abstract]
Revenue	$ 15,531,682	$ 13,855,386
Cost of revenue	12,405,012	12,074,454
Gross profit	3,126,670	1,780,932
Operating expenses
Selling, general and administrative expenses	5,587,635	4,684,744
Research and development expenses	1,995,128	2,016,686
Depreciation and amortization	1,331,045	1,378,088
Gain on disposal of property, plant and equipment	(18,067)	(1,000)
Total operating expenses	8,895,741	8,078,518
Loss from operations	(5,769,071)	(6,297,586)
Other expense
Foreign currency loss	162,545	99,217
Change in contingent consideration obligation	(62,254)	104,821
Interest expense - amortization of debt discount	192,195	110,136
Interest expense	518,486	572,283
Loss before income taxes	(6,580,043)	(7,184,043)
Provision for income taxes	(165,802)	1,833
Net loss	(6,414,241)	(7,185,876)
Net loss attributed to noncontrolling interests	(14,266)	(13,116)
Net loss attributable to S&W Seed Company	$ (6,399,975)	$ (7,172,760)
Net loss attributable to S&W Seed Company per common share:
Basic	$ (0.17)	$ (0.21)
Diluted	$ (0.17)	$ (0.21)
Weighted average number of common shares outstanding:
Basic	36,773,864	33,450,569
Diluted	36,773,864	33,450,569

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (6,414,241)	$ (7,185,876)
Foreign currency translation adjustment, net of income taxes	(461,127)	276,838
Comprehensive loss	(6,875,368)	(6,909,038)
Comprehensive loss attributable to noncontrolling interests	(14,266)	(13,116)
Comprehensive loss attributable to S&W Seed Company	$ (6,861,102)	$ (6,895,922)

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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	320,409			320,409
Net issuance to settle RSUs, amount	(17,267)	$ 18		(17,285)
Net issuance to settle RSUs, shares		17,708
Other comprehensive income (loss)	276,838						276,838
Net loss	(7,185,876)				(7,172,760)	(13,116)
Ending Balance, amount at Sep. 30, 2020	74,730,081	$ 33,476	$ (134,196)	138,112,664	(57,313,702)	(133,575)	(5,834,586)
Ending Balance, shares at Sep. 30, 2020		33,475,569	(25,000)
Beginning Balance, amount at Jun. 30, 2021	74,393,193	$ 36,773	$ (134,196)	149,684,357	(69,311,909)	(31,006)	(5,850,826)
Beginning Balance, shares at Jun. 30, 2021		36,772,983	(25,000)
Stock-based compensation - options, restricted stock, and RSUs	394,312			394,312
Proceeds from sale of common stock, net of fees and expenses, amount	2,481	$ 1		2,480
Proceeds from sale of common stock, net of fees and expenses, shares		848
Net issuance to settle RSUs, amount	(40,715)	$ 28		(40,743)
Net issuance to settle RSUs, shares		28,263
Other comprehensive income (loss)	(461,127)						(461,127)
Net loss	(6,414,241)				(6,399,975)	(14,266)
Ending Balance, amount at Sep. 30, 2021	$ 67,873,903	$ 36,802	$ (134,196)	$ 150,040,406	$ (75,711,884)	$ (45,272)	$ (6,311,953)
Ending Balance, shares at Sep. 30, 2021		36,802,094	(25,000)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (6,414,241)	$ (7,185,876)
Adjustments to reconcile net loss from operating activities to net cash used in operating activities
Stock-based compensation	394,312	320,409
Change in allowance for doubtful accounts	97,028	35,435
Inventory write-down	307,000	908,497
Depreciation and amortization	1,331,045	1,378,088
Gain on disposal of property, plant and equipment	(18,067)	(1,000)
Change in foreign exchange contracts	235,912	(7,615)
Change in contingent consideration obligation	(62,254)	104,821
Amortization of debt discount	192,195	110,136
Changes in:
Accounts receivable	(3,247,001)	(957,486)
Inventories	(1,040,417)	(3,103,060)
Prepaid expenses and other current assets	(17,504)	69,035
Other non-current asset	(17,800)	53,916
Accounts payable	1,949,750	4,046,160
Deferred revenue	324,688	2,099,161
Accrued expenses and other current liabilities	566,298	(1,262,195)
Other non-current liabilities	(65,426)	(80,409)
Net cash used in operating activities	(5,484,482)	(3,471,983)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment	(470,960)	(121,525)
Proceeds from disposal of property, plant and equipment	18,313	2,000
Net cash used in investing activities	(452,647)	(119,525)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock	2,481	0
Taxes paid related to net share settlements of stock-based compensation awards	(40,715)	(17,267)
Borrowings and repayments on lines of credit, net	5,274,959	3,208,863
Borrowings of long-term debt	150,768	0
Debt issuance costs	(103,261)	(54,956)
Repayments of long-term debt	(452,544)	(439,027)
Net cash provided by financing activities	4,831,688	2,697,613
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(527,769)	300,795
NET DECREASE IN CASH & CASH EQUIVALENTS	(1,633,210)	(593,100)
CASH AND CASH EQUIVALENTS, beginning of the period	3,527,937	4,123,094
CASH AND CASH EQUIVALENTS, end of period	1,894,727	3,529,994
Cash paid during the period for:
Interest	702,477	768,530
Income taxes	$ 50,942	$ 55,463

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Background and Organization

3 Months Ended

Sep. 30, 2021

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 owns seed cleaning and processing facilities, which are located in Nampa, Idaho, Dumas, Texas, New Deal, Texas, Keith, South Australia and Penfield, 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 initiatives.

The Company had a long-term distribution agreement with Pioneer Hi-Bred International, Inc., or Pioneer, now a subsidiary of Corteva Agriscience, Inc., which is jointly referred to as 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.  

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Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2021

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.  We have 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 September 30, 2021. We have 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.  

Unaudited Interim Financial Information

The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, for interim financial reporting. These consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company’s consolidated balance sheets, statements of operations, comprehensive income (loss), cash flows and stockholders’ equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2022. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Annual Report, as filed with the SEC.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, 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. Four customers accounted for 26% of its revenue for the three months ended September 30, 2021. Two customers accounted for 23% of its revenue for the three months ended September 30, 2020.

One customer accounted for 13% of the Company’s accounts receivable at September 30, 2021. 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 76% and 61% of revenue during the three months ended September 30, 2021 and 2020, respectively. The net book value of fixed assets located outside the United States was 20% and 19% of total fixed assets at September 30, 2021 and June 30, 2021, respectively. Cash balances located outside of the United States may not be insured and totaled $382,290 and $204,813 at September 30, 2021 and June 30, 2021, respectively.

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

	Three Months Ended September 30,
	2021				2020
United States	$	3,665,328	24	%	$	5,361,777	39	%
Saudi Arabia		3,467,210	22	%		1,198,909	9	%
Australia		3,434,005	22	%		2,782,464	20	%
Libya		1,044,000	7	%		225,000	2	%
Sudan		819,618	5	%		484,700	3	%
China		473,125	3	%		—	0	%
South Africa		464,229	3	%		664,075	5	%
Egypt		402,300	3	%		394,200	3	%
Argentina		350,839	2	%		85	0	%
Mexico		228,420	1	%		1,136,090	8	%
Other		1,182,608	8	%		1,608,086	11	%
Total	$	15,531,682	100	%	$	13,855,386	100	%

Liquidity and Covid-19 Pandemic

The Company is monitoring the impact of the COVID-19 pandemic 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 has found these alternative approaches to generally be less effective than in-person sales efforts. In particular, the Company’s sales cycle is highly seasonal, and the majority of its sales season activities for the United States and Australia are typically concentrated between March and June of each year. If ongoing measures to protect against COVID-19 remain in effect throughout the 2022 sales season, the Company may experience similar negative impacts that it experienced during the 2020 and 2021 sales seasons.

Further, vaccine mandates may be enforced in jurisdictions in which our business operates. Although it is not possible to predict with certainty the impact of these measures on our business and workforce, these requirements may result in attrition, difficulty securing future labor needs, and may further disrupt the national supply chain, all of which could have a material adverse effect on our business, financial condition and results of operations.

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, this would adversely affect the Company’s product revenue.

During the year ended June 30, 2021 and the three months ended September 30, 2021, 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 throughout fiscal 2022.

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.

The Company’s loan and security agreement with CIBC Bank USA, or CIBC, and the Company’s secured promissory notes with Conterra Agriculture Capital, LLC contains various operating and financial covenants (See Note 8). The COVID-19 pandemic has 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 loan and security agreement with CIBC requires the Company to comply with a minimum EBITDA covenant for the fiscal quarters ending September 30, 2021 and December 31, 2021 and a fixed charge coverage ratio, tested on a trailing twelve-month basis beginning with the quarter ending March 31, 2022. It also requires the Company to maintain minimum liquidity of no less than $3,000,000 at all times. The Company believes it is uncertain it will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet these covenants. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is unable to meet these covenants, the Company will need to raise additional capital or secure future waivers and/or amendments from its lenders. There can be no assurance the Company will be successful in raising additional capital or securing future waivers and/or amendments from its lenders. If the Company is unable to raise sufficient additional capital or secure future waivers and/or amendments, it may need to reduce the scope of its operations, repay amounts owing to its lenders or sell certain assets. 

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 $155,657 and $57,582 at September 30, 2021 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:

	September 30, 2021		June 30, 2021
Raw materials and supplies	$	1,749,836	$	2,722,832
Work in progress		11,316,519		6,662,006
Finished goods		50,204,096		54,010,418
	$	63,270,451	$	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, 15 years for trade names, 17 years for license agreements and 18 years for other intangible assets.

Goodwill

Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value 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 fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  The Company performed a quantitative assessment of goodwill at June 30, 2021 on its one reporting unit and determined that goodwill was not impaired. See Note 6 for further information.

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 $1.3 million at September 30, 2021 and June 30, 2021, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted 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.    

No adjustments for impairment or observable transactions were made for the three months ended September 30, 2021 or the year ended June 30, 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 three months ended September 30, 2021 and September 30, 2020 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 calculation of Basic and Diluted EPS is shown in the table below. 

	Three Months Ended September 30,
	2021			2020
Numerator:
Net loss attributable to S&W Seed Company	$	(6,399,975	)	$	(7,172,760	)
Numerator for basis EPS		(6,399,975	)		(7,172,760	)
Effect of dilutive securities:
Warrants		—			—
		—			—
Numerator for diluted EPS	$	(6,399,975	)	$	(7,172,760	)
Denominator:
Denominator for basic EPS-weighted- average    shares		36,773,864			33,450,569
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		36,773,864			33,450,569
Basic EPS	$	(0.17	)	$	(0.21	)
Diluted EPS	$	(0.17	)	$	(0.21	)

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 three months ended September 30, 2021 and 2020.  

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 4 and Note 6 for impairment discussion.

Derivative Financial Instruments

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 September 30, 2021 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	324,595	$	—
Contingent consideration obligations	$	—	$	—	$	650,970
Total	$	—	$	324,595	$	650,970

	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.

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Leases

3 Months Ended

Sep. 30, 2021

Lessee Disclosure [Abstract]

LEASES

NOTE 3 - LEASES

S&W leases office and laboratory space, 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 in 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 three months ended September 30, 2021. 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	September 30, 2021
Assets:
Right of use assets - operating leases	Other assets	$	4,455,308
Right of use assets - finance leases	Other assets		2,280,077
Accumulated amortization - finance leases	Other assets		(1,038,206	)
Right of use assets - finance leases, net	Other assets		1,241,871
Total lease assets		$	5,697,179
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net		893,753
Current lease liabilities	Accrued expenses and other current liabilities		1,280,322
Long-term debt, net	Long-term debt, net		925,005
Long-term lease liabilities	Other long-term liabilities		3,472,734
Total lease liabilities		$	6,571,814

The components of lease cost are as follows:

Leases	Income Statement Classification	Three Months Ended September 30, 2021
Operating lease cost	Cost of revenue	$	172,582
Operating lease cost	Selling, general and administrative expenses		82,043
Operating lease cost	Research and development expenses		122,280
Finance lease cost	Depreciation and amortization and interest		183,261
Total lease costs		$	560,166

Maturities of lease liabilities as of September 30, 2021 are as follows:

	Operating Leases			Finance Leases
Remainder of 2022	$	1,190,320		$	707,929
2023		1,162,910			861,026
2024		1,063,293			282,194
2025		727,353			50,734
2026		644,553			19,845
After 2026		401,534			—
Total lease payments		5,189,963			1,921,728
Less: Interest		(436,907	)		(102,970	)
Present value of lease liabilities	$	4,753,056		$	1,818,758

The following are the weighted average assumptions used for lease term and discount rate and supplemental cash flow information related to leases as of and for the three months ended September 30, 2021:

Operating lease remaining lease term	4.5 years
Operating lease discount rate		4.10	%
Finance lease remaining lease term	2.2 years
Finance lease discount rate		5.10	%
Cash paid for operating leases	$	293,400
Cash paid for finance leases	$	379,503

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Pioneer Relationship

3 Months Ended

Sep. 30, 2021

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 terminations discussed above, the Company entered into a license agreement 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 payments of $45.0 million in fiscal 2019, $16.7 million in fiscal 2020, and $8.3 million in fiscal 2021, which totaled $70.0 million. Approximately $34.2 million of these amounts referenced above has been allocated to the license to the Company’s alfalfa varieties. The $34.2 million was reported as licensing revenue in the consolidated statement of operations for the fiscal year ended June 30, 2019.  

The remaining amounts were 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.  The Company allocated approximately $1.8 million to an unbilled receivable related to revenue recognition at contract termination and the remainder of the payments was allocated to the license using a residual method approach.  The unbilled receivable is $0 as of September 30, 2021 and June 30, 2021.

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Revenue Recognition

3 Months Ended

Sep. 30, 2021

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:

	Three Months Ended September 30,
	2021		2020
Pioneer product sales	$	—	$	1,622,363
Other product sales		14,905,402		11,870,912
Services		626,280		362,111
	$	15,531,682	$	13,855,386

Pioneer Product Sales

For the three months ended September 30, 2020, 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 120 days for export customers and end of sales season (September 30^th) 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 three months ended September 30, 2021, the Company recognized bad debt expense of $97,028 associated with impaired accounts receivable. During the three months ended September 30, 2020, the Company recognized bad debt expense of $35,435 associated with impaired accounts receivable.

Deferred revenue represents payments received from customers in advance of completion of the Company's performance obligation. During the three months ended September 30, 2021, the Company recognized $0.2 million of revenue that was included in the deferred balance as of June 30, 2021. During the three months ended September 30, 2020, the Company recognized $6.1 million of revenue that was included in the deferred balance as of June 30, 2020.

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Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2021

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

The following table summarizes the activity of goodwill for the three months ended September 30, 2021 and the year ended June 30, 2021, respectively.

	Balance at July 1, 2021		Additions		Impairment		Currency Translation Adjustment			Balance at September 30, 2021
Goodwill	$	1,651,634	$	—	$	—	$	(65,422	)	$	1,586,212

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

Intangible assets consist of the following:

	Balance at July 1, 2021		Additions		Impairment		Amortization			Currency Translation Adjustment			Balance at September 30, 2021
Trade name	$	1,310,489	$	—	$	—	$	(51,038	)	$	(12,778	)	$	1,246,673
Customer relationships		6,302,591		—		—		(94,264	)		(214,597	)		5,993,730
Non-compete		5,058		—		—		(2,701	)		—			2,357
GI customer list		50,146		—		—		(1,791	)		—			48,355
Supply agreement		850,874		—		—		(18,908	)		—			831,966
Grower relationships		1,436,988		—		—		(26,351	)		—			1,410,637
Intellectual property		24,427,857		—		—		(348,933	)		—			24,078,924
License agreement		2,340,269		—		—		(43,558	)		(91,817	)		2,204,894
Internal use software		406,670		—		—		(16,945	)		—			389,725
	$	37,130,942	$	—	$	—	$	(604,489	)	$	(319,192	)	$	36,207,261

	Balance at July 1, 2020		Additions			Impairment		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 $604,489 and $594,720 for the three months ended September 30, 2021 and 2020, respectively. Estimated aggregate remaining amortization is as follows:

	2022		2023		2024		2025		2026		Thereafter
Amortization expense	$	1,805,435	$	2,354,830	$	2,332,295	$	2,320,745	$	2,234,328	$	25,159,628

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Property, Plant and Equipment

3 Months Ended

Sep. 30, 2021

Property Plant And Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

	September 30, 2021			June 30, 2021
Land and improvements	$	2,281,733		$	2,297,529
Buildings and improvements		8,154,956			8,196,593
Machinery and equipment		13,921,828			13,935,053
Vehicles		1,016,775			1,046,937
Leasehold Improvements		552,810			552,810
Construction in progress		373,007			48,480
Total property, plant and equipment		26,301,109			26,077,402
Less: accumulated depreciation		(8,800,376	)		(8,336,428	)
Property, plant and equipment, net	$	17,500,733		$	17,740,974

Depreciation expense totaled $570,510 and $691,483 for the three months ended September 30, 2021 and 2020, respectively.

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Debt

3 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

DEBT

NOTE 8 - DEBT

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

	September 30, 2021			June 30, 2021
Working capital lines of credit
CIBC	$	15,898,798		$	14,500,000
National Australia Bank Limited		21,386,970			19,494,800
National Australia Bank Limited Overdraft Facility		1,726,226			617,471
Debt issuance costs		(548,530	)		(665,706	)
Total working capital lines of credit, net	$	38,463,464		$	33,946,565
Current portion of long-term debt
Finance lease	$	893,753		$	909,413
Debt issuance costs		(4,281	)	$	(5,077	)
Term Loan - National Australia    Bank Limited		360,050			374,900
Machinery & equipment loans -    National Australia Bank Limited		182,606			165,802
Secured real estate note - Conterra		7,085,613			275,684
Debt issuance costs		(97,482	)		(39,556	)
Total current portion, net		8,420,259			1,681,166
Long-term debt, less current portion
Finance lease		925,005			1,108,709
Debt issuance costs		(1,080	)		(1,847	)
Term Loan - National Australia    Bank Limited		2,880,400			2,999,200
Machinery & equipment loans -    National Australia Bank Limited		602,870			526,564
Secured real estate note - Conterra		—			6,974,356
Debt issuance costs		—			(16,482	)
Total long-term portion, net		4,407,195			11,590,500
Total debt, net	$	12,827,454		$	13,271,666

On December 26, 2019, the Company entered into a Loan and Security Agreement, or the Loan Agreement, with 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 and September 27, 2021.  As amended, the Loan Agreement provides for a $25.0 million revolving 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 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 may be based on (i) a Base Rate plus 1.0% per annum or (ii) LIBOR Rate plus 3.0% per annum (both as defined in the Loan Agreement), generally at the Company’s option. Pursuant to the September 27, 2021 amendment, the Loans will be based on Prime 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 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 2021 amendment to the Loan Agreement, CIBC waived noncompliance with the Company’s fixed charge coverage ratio as of June 30, 2021 and suspended the Company’s fixed charge coverage ratio financial covenants for the fiscal quarters ending September 30, 2021 and December 31, 2021 and replaced that financial covenant with a minimum EBITDA threshold tested quarterly for the quarters ending September 30, 2021 and December 31, 2021.  Pursuant to the September 2021 amendment, the Company reverts back to its previous financial covenant to require that it maintain a fixed charge coverage ratio equal to or greater than (i) 1.00 to 1.00 for the quarters ended March 31, 2022 and (ii) 1.15 to 1.00 for each fiscal quarter thereafter. In addition, pursuant to the September 2021 amendment, the Company is required to maintain liquidity of no less than $3,000,000 at all times for the remainder of the term of the Loan Agreement. As of September 30, 2021, the Company was in compliance with all CIBC debt covenants.  

As of September 30, 2021, there was approximately $1.5 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. On December 24, 2019, the Company entered into an amendment to extend the note’s maturity date to November 30, 2022, and revise the amounts payable under the note.  Pursuant to the December 2019 amendment, the Company agreed to make (i) a principal and interest payment of approximately $515,711 on January 1, 2020; (ii) five consecutive semi-annual principal and interest payments of approximately $454,185, beginning on July 1, 2020; and (iii) a one-time final payment of approximately $8,957,095 on November 30, 2022. The Company may prepay the Secured Real Estate 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 Company will also make three consecutive semi-annual principal and interest payments of approximately $388,045, beginning on July 1, 2021; and a one-time final payment of approximately $7,184,109 on November 30, 2022. The Company was in compliance with all debt covenants as of September 30, 2021.

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 September 30, 2021, 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 $10,801,500) and cross-guaranteed by S&W Australia and Pasture Genetics.   

In June 2020, S&W Australia executed documentation to consolidate the Pasture Genetics debt facility with NAB into its debt facilities with NAB.  The documentation became effective in July 2020. The consolidated debt facilities with NAB provide for up to an aggregate of AUD $35,500,000 (USD $25,563,550) of credit as of September 30, 2021, 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 $3,000,000 (USD $2,160,300 at September 30, 2021) and (ii) a Borrowing Base Line having a credit limit of AUD $26,000,000 (USD $18,722,600 at September 30, 2021). In March 2021, S&W Australia entered into an amendment with NAB which temporarily increased the Overdraft Facility to AUD $3,000,000 (USD $2,160,300) for a three-month period and extended the maturity date of the seasonal credit facility to June 30, 2022. During the three months ended September 30, 2021, NAB temporarily increased the credit limit of the Borrowing Base Line to AUD $29,700,000 (USD $21,386,970). As of September 30, 2021, the Borrowing Base Line accrued interest on Australian dollar drawings at approximately 3.5% 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 September 30, 2021, the Overdraft Facility accrued interest at approximately 5.47% per annum calculated daily. As of September 30, 2021, AUD $32,097,203 (USD $23,113,196) 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 $4,500,000 million (USD $3,240,450 at September 30, 2021). 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. 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 2026 and have interest rates ranging from 2.86% to 5.31%.  The credit limit under the facility is AUD $2,000,000 (USD $1,440,200 at September 30, 2021).  As of September 30, 2021, AUD $731,109 (USD $526,472) was outstanding under S&W Australia’s master asset finance facility.

• S&W Australia was in compliance with all debt covenants under the debt facilities with NAB at September 30, 2021.

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

Fiscal Year	Amount
2022	$	1,262,508
2023		8,322,235
2024		802,225
2025		2,316,599
2026		183,936
Thereafter		42,794
Total	$	12,930,297

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Equity

3 Months Ended

Sep. 30, 2021

Equity [Abstract]

EQUITY

NOTE 9 – EQUITY

On September 23, 2020, the Company 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 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 At Market Issuance Sales Agreement, under which the aggregate offering price was increased from $14 million to $17.1 million. For the three months ended September 30, 2021, the Company received gross proceeds of approximately $2,586 from the sale of 848 shares of its common stock pursuant to the ATM Agreement.

As of September 30, 2021, the Company had $6.2 million remaining under the ATM Agreement.

In December 2020, the Company’s shareholders approved the amendment to the Company’s Articles of Incorporation to increase the authorized number of shares of common stock from 50,000,000 shares to 75,000,000 shares.  

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Foreign Currency Contracts

3 Months Ended

Sep. 30, 2021

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 $5,483,354 at September 30, 2021, and their maturities range from October 2021 to April 2022.

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 $324,595 at September 30, 2021 and foreign currency contract liabilities totaled $96,466 at June 30, 2021. The Company recorded a loss on foreign exchange contracts of $238,803 for the three months ended September 30, 2021 and a gain on foreign exchange contracts of $4,746 for the three months ended September 30, 2020, which are both reflected in cost of revenue.

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Commitments and Contingencies

3 Months Ended

Sep. 30, 2021

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.

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Equity-Based Compensation

3 Months Ended

Sep. 30, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

EQUITY-BASED COMPENSATION

NOTE 12 - 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, plus (ii) 2,750,000 additional shares that were reserved as of the effective date of the 2019 Plan, plus (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 options grants.

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

	September 30,
	2021	2020
Risk free rate	N/A	N/A
Dividend yield	N/A	N/A
Volatility	N/A	N/A
Average forfeiture assumptions	N/A	N/A

During the three months ended September 30, 2021 and 2020, the Company did not grant options to its directors, certain members of the executive management team and other employees.

A summary of stock option activity for the three months ended September 30, 2021 and the year ended June 30, 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		—			—		—		—
Exercised		(38,774	)		2.33		—		—
Canceled/forfeited/expired		(31,669	)		2.35		—		—
Outstanding at September 30, 2021		3,706,125			2.65		7.7		600,620
Options vested and exercisable at September 30, 2021		2,195,366			2.83		7.2		304,247
Options vested and expected to vest as of    September 30, 2021		3,701,852		$	2.65		7.7	$	599,796

There were no options granted for the three months ended September 30, 2021. At September 30, 2021, the Company had $1,137,377 of unrecognized stock compensation expense, net of estimated forfeitures, which will be recognized over the weighted average remaining service period of 1.6 years. The Company settles employee stock option exercises with newly issued shares of common stock.

There were no restricted stock units granted during the three months ended September 30, 2021 and 2020.         

The Company recorded $171,524 and $160,882 of stock-based compensation expense associated with grants of restricted stock units during the three months ended September 30, 2021 and 2020, 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		—			—		—
Vested		(30,531	)		2.51		—
Forfeited		(7,036	)		2.35		—
Nonvested restricted units outstanding at September 30, 2021		324,003		$	2.51		1.2

At September 30, 2021, the Company had $402,915 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.2 years.

At September 30, 2021, there were 3,731,341 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 three months ended September 30, 2021 and 2020, totaled $394,312 and $320,409, respectively.

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Non-Cash Activities for Statements of Cash Flows

3 Months Ended

Sep. 30, 2021

Supplemental Cash Flow Elements [Abstract]

NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS

NOTE 13 - 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 three months ended September 30, 2021 and 2020, respectively.

	Three Months Ended September 30,
	2021			2020
Purchases of equipment classified as finance lease	$	(81,209	)	$	(20,834	)

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Subsequent Events

3 Months Ended

Sep. 30, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 14 – SUBSEQUENT EVENTS

On October 14, 2021, the Company entered into a Securities Purchase Agreement with MFP Partners, L.P., 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.

On November 11, 2021, S&W Australia amended its seasonal credit and master asset finance 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 $23,043,200 at September 30, 2021);

• the overdraft credit limit under the seasonal credit facility decreased from AUD $3,000,000 (USD $2,160,300 at September 30, 2021) to AUD 2,000,000 (USD $1,440,200 at September 30, 2021) and will decrease to AUD 0on June 30, 2022;

• the credit limit under the master asset finance facility increased to AUD $2,000,000 (USD $1,440,200 at September 30, 2021) to AUD $3,000,000 (USD $2,160,300 at September 30, 2021); and

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

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2021

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.  We have 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 September 30, 2021. We have 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.  

Unaudited Interim Financial Information

Unaudited Interim Financial Information

The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC, for interim financial reporting. These consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the Company’s consolidated balance sheets, statements of operations, comprehensive income (loss), cash flows and stockholders’ equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, 2022. Certain information and disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Annual Report, as filed with the SEC.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, 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. Four customers accounted for 26% of its revenue for the three months ended September 30, 2021. Two customers accounted for 23% of its revenue for the three months ended September 30, 2020.

One customer accounted for 13% of the Company’s accounts receivable at September 30, 2021. 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 76% and 61% of revenue during the three months ended September 30, 2021 and 2020, respectively. The net book value of fixed assets located outside the United States was 20% and 19% of total fixed assets at September 30, 2021 and June 30, 2021, respectively. Cash balances located outside of the United States may not be insured and totaled $382,290 and $204,813 at September 30, 2021 and June 30, 2021, respectively.

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

	Three Months Ended September 30,
	2021				2020
United States	$	3,665,328	24	%	$	5,361,777	39	%
Saudi Arabia		3,467,210	22	%		1,198,909	9	%
Australia		3,434,005	22	%		2,782,464	20	%
Libya		1,044,000	7	%		225,000	2	%
Sudan		819,618	5	%		484,700	3	%
China		473,125	3	%		—	0	%
South Africa		464,229	3	%		664,075	5	%
Egypt		402,300	3	%		394,200	3	%
Argentina		350,839	2	%		85	0	%
Mexico		228,420	1	%		1,136,090	8	%
Other		1,182,608	8	%		1,608,086	11	%
Total	$	15,531,682	100	%	$	13,855,386	100	%

Liquidity and Covid-19 Pandemic

Liquidity and Covid-19 Pandemic

The Company is monitoring the impact of the COVID-19 pandemic 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 has found these alternative approaches to generally be less effective than in-person sales efforts. In particular, the Company’s sales cycle is highly seasonal, and the majority of its sales season activities for the United States and Australia are typically concentrated between March and June of each year. If ongoing measures to protect against COVID-19 remain in effect throughout the 2022 sales season, the Company may experience similar negative impacts that it experienced during the 2020 and 2021 sales seasons.

Further, vaccine mandates may be enforced in jurisdictions in which our business operates. Although it is not possible to predict with certainty the impact of these measures on our business and workforce, these requirements may result in attrition, difficulty securing future labor needs, and may further disrupt the national supply chain, all of which could have a material adverse effect on our business, financial condition and results of operations.

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, this would adversely affect the Company’s product revenue.

During the year ended June 30, 2021 and the three months ended September 30, 2021, 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 throughout fiscal 2022.

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.

The Company’s loan and security agreement with CIBC Bank USA, or CIBC, and the Company’s secured promissory notes with Conterra Agriculture Capital, LLC contains various operating and financial covenants (See Note 8). The COVID-19 pandemic has 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 loan and security agreement with CIBC requires the Company to comply with a minimum EBITDA covenant for the fiscal quarters ending September 30, 2021 and December 31, 2021 and a fixed charge coverage ratio, tested on a trailing twelve-month basis beginning with the quarter ending March 31, 2022. It also requires the Company to maintain minimum liquidity of no less than $3,000,000 at all times. The Company believes it is uncertain it will be able to generate sufficient cash flow from operations or maintain sufficient liquidity to meet these covenants. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. If the Company is unable to meet these covenants, the Company will need to raise additional capital or secure future waivers and/or amendments from its lenders. There can be no assurance the Company will be successful in raising additional capital or securing future waivers and/or amendments from its lenders. If the Company is unable to raise sufficient additional capital or secure future waivers and/or amendments, it may need to reduce the scope of its operations, repay amounts owing to its lenders or sell certain assets. 

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 $155,657 and $57,582 at September 30, 2021 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:

	September 30, 2021		June 30, 2021
Raw materials and supplies	$	1,749,836	$	2,722,832
Work in progress		11,316,519		6,662,006
Finished goods		50,204,096		54,010,418
	$	63,270,451	$	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, 15 years for trade names, 17 years for license agreements and 18 years for other intangible assets.

Goodwill

Goodwill

Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value 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 fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill.

The Company acquired Pasture Genetics in February 2020, and recorded goodwill of $1,452,436 as part of this transaction.  The Company performed a quantitative assessment of goodwill at June 30, 2021 on its one reporting unit and determined that goodwill was not impaired. See Note 6 for further information.

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 $1.3 million at September 30, 2021 and June 30, 2021, and the investment is included in Other Assets on the Consolidated Balance Sheet.

The Company adopted 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.    

No adjustments for impairment or observable transactions were made for the three months ended September 30, 2021 or the year ended June 30, 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 three months ended September 30, 2021 and September 30, 2020 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 calculation of Basic and Diluted EPS is shown in the table below. 

	Three Months Ended September 30,
	2021			2020
Numerator:
Net loss attributable to S&W Seed Company	$	(6,399,975	)	$	(7,172,760	)
Numerator for basis EPS		(6,399,975	)		(7,172,760	)
Effect of dilutive securities:
Warrants		—			—
		—			—
Numerator for diluted EPS	$	(6,399,975	)	$	(7,172,760	)
Denominator:
Denominator for basic EPS-weighted- average    shares		36,773,864			33,450,569
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		36,773,864			33,450,569
Basic EPS	$	(0.17	)	$	(0.21	)
Diluted EPS	$	(0.17	)	$	(0.21	)

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 three months ended September 30, 2021 and 2020.  

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 4 and Note 6 for impairment discussion.

Derivative Financial Instruments

Derivative Financial Instruments

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 September 30, 2021 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	324,595	$	—
Contingent consideration obligations	$	—	$	—	$	650,970
Total	$	—	$	324,595	$	650,970

	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.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Schedule of Revenues from External Customers by Country

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

	Three Months Ended September 30,
	2021				2020
United States	$	3,665,328	24	%	$	5,361,777	39	%
Saudi Arabia		3,467,210	22	%		1,198,909	9	%
Australia		3,434,005	22	%		2,782,464	20	%
Libya		1,044,000	7	%		225,000	2	%
Sudan		819,618	5	%		484,700	3	%
China		473,125	3	%		—	0	%
South Africa		464,229	3	%		664,075	5	%
Egypt		402,300	3	%		394,200	3	%
Argentina		350,839	2	%		85	0	%
Mexico		228,420	1	%		1,136,090	8	%
Other		1,182,608	8	%		1,608,086	11	%
Total	$	15,531,682	100	%	$	13,855,386	100	%

Components of Inventory

Components of inventory are:

	September 30, 2021		June 30, 2021
Raw materials and supplies	$	1,749,836	$	2,722,832
Work in progress		11,316,519		6,662,006
Finished goods		50,204,096		54,010,418
	$	63,270,451	$	63,395,256

Schedule of Calculation of Basic and Diluted EPS

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

	Three Months Ended September 30,
	2021			2020
Numerator:
Net loss attributable to S&W Seed Company	$	(6,399,975	)	$	(7,172,760	)
Numerator for basis EPS		(6,399,975	)		(7,172,760	)
Effect of dilutive securities:
Warrants		—			—
		—			—
Numerator for diluted EPS	$	(6,399,975	)	$	(7,172,760	)
Denominator:
Denominator for basic EPS-weighted- average    shares		36,773,864			33,450,569
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		36,773,864			33,450,569
Basic EPS	$	(0.17	)	$	(0.21	)
Diluted EPS	$	(0.17	)	$	(0.21	)

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 September 30, 2021 Using:
	Level 1		Level 2		Level 3
Foreign exchange contract liability	$	—	$	324,595	$	—
Contingent consideration obligations	$	—	$	—	$	650,970
Total	$	—	$	324,595	$	650,970

	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

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Leases (Tables)

3 Months Ended

Sep. 30, 2021

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	September 30, 2021
Assets:
Right of use assets - operating leases	Other assets	$	4,455,308
Right of use assets - finance leases	Other assets		2,280,077
Accumulated amortization - finance leases	Other assets		(1,038,206	)
Right of use assets - finance leases, net	Other assets		1,241,871
Total lease assets		$	5,697,179
Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net		893,753
Current lease liabilities	Accrued expenses and other current liabilities		1,280,322
Long-term debt, net	Long-term debt, net		925,005
Long-term lease liabilities	Other long-term liabilities		3,472,734
Total lease liabilities		$	6,571,814

Summary of Components of Lease Cost

The components of lease cost are as follows:

Leases	Income Statement Classification	Three Months Ended September 30, 2021
Operating lease cost	Cost of revenue	$	172,582
Operating lease cost	Selling, general and administrative expenses		82,043
Operating lease cost	Research and development expenses		122,280
Finance lease cost	Depreciation and amortization and interest		183,261
Total lease costs		$	560,166

Summary of Maturities of Lease Liabilities

Maturities of lease liabilities as of September 30, 2021 are as follows:

	Operating Leases			Finance Leases
Remainder of 2022	$	1,190,320		$	707,929
2023		1,162,910			861,026
2024		1,063,293			282,194
2025		727,353			50,734
2026		644,553			19,845
After 2026		401,534			—
Total lease payments		5,189,963			1,921,728
Less: Interest		(436,907	)		(102,970	)
Present value of lease liabilities	$	4,753,056		$	1,818,758

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 and for the three months ended September 30, 2021:

Operating lease remaining lease term	4.5 years
Operating lease discount rate		4.10	%
Finance lease remaining lease term	2.2 years
Finance lease discount rate		5.10	%
Cash paid for operating leases	$	293,400
Cash paid for finance leases	$	379,503

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Revenue Recognition (Tables)

3 Months Ended

Sep. 30, 2021

Revenues [Abstract]

Schedule of disaggregation of revenues

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

	Three Months Ended September 30,
	2021		2020
Pioneer product sales	$	—	$	1,622,363
Other product sales		14,905,402		11,870,912
Services		626,280		362,111
	$	15,531,682	$	13,855,386

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2021

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Activity of Goodwill

The following table summarizes the activity of goodwill for the three months ended September 30, 2021 and the year ended June 30, 2021, respectively.

	Balance at July 1, 2021		Additions		Impairment		Currency Translation Adjustment			Balance at September 30, 2021
Goodwill	$	1,651,634	$	—	$	—	$	(65,422	)	$	1,586,212

	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		Impairment		Amortization			Currency Translation Adjustment			Balance at September 30, 2021
Trade name	$	1,310,489	$	—	$	—	$	(51,038	)	$	(12,778	)	$	1,246,673
Customer relationships		6,302,591		—		—		(94,264	)		(214,597	)		5,993,730
Non-compete		5,058		—		—		(2,701	)		—			2,357
GI customer list		50,146		—		—		(1,791	)		—			48,355
Supply agreement		850,874		—		—		(18,908	)		—			831,966
Grower relationships		1,436,988		—		—		(26,351	)		—			1,410,637
Intellectual property		24,427,857		—		—		(348,933	)		—			24,078,924
License agreement		2,340,269		—		—		(43,558	)		(91,817	)		2,204,894
Internal use software		406,670		—		—		(16,945	)		—			389,725
	$	37,130,942	$	—	$	—	$	(604,489	)	$	(319,192	)	$	36,207,261

	Balance at July 1, 2020		Additions			Impairment		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:

	2022		2023		2024		2025		2026		Thereafter
Amortization expense	$	1,805,435	$	2,354,830	$	2,332,295	$	2,320,745	$	2,234,328	$	25,159,628

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Property, Plant and Equipment (Tables)

3 Months Ended

Sep. 30, 2021

Property Plant And Equipment [Abstract]

Components of Property, Plant and Equipment

Components of property, plant and equipment were as follows:

	September 30, 2021			June 30, 2021
Land and improvements	$	2,281,733		$	2,297,529
Buildings and improvements		8,154,956			8,196,593
Machinery and equipment		13,921,828			13,935,053
Vehicles		1,016,775			1,046,937
Leasehold Improvements		552,810			552,810
Construction in progress		373,007			48,480
Total property, plant and equipment		26,301,109			26,077,402
Less: accumulated depreciation		(8,800,376	)		(8,336,428	)
Property, plant and equipment, net	$	17,500,733		$	17,740,974

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Debt (Tables)

3 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Schedule of Total Debt Outstanding

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

	September 30, 2021			June 30, 2021
Working capital lines of credit
CIBC	$	15,898,798		$	14,500,000
National Australia Bank Limited		21,386,970			19,494,800
National Australia Bank Limited Overdraft Facility		1,726,226			617,471
Debt issuance costs		(548,530	)		(665,706	)
Total working capital lines of credit, net	$	38,463,464		$	33,946,565
Current portion of long-term debt
Finance lease	$	893,753		$	909,413
Debt issuance costs		(4,281	)	$	(5,077	)
Term Loan - National Australia    Bank Limited		360,050			374,900
Machinery & equipment loans -    National Australia Bank Limited		182,606			165,802
Secured real estate note - Conterra		7,085,613			275,684
Debt issuance costs		(97,482	)		(39,556	)
Total current portion, net		8,420,259			1,681,166
Long-term debt, less current portion
Finance lease		925,005			1,108,709
Debt issuance costs		(1,080	)		(1,847	)
Term Loan - National Australia    Bank Limited		2,880,400			2,999,200
Machinery & equipment loans -    National Australia Bank Limited		602,870			526,564
Secured real estate note - Conterra		—			6,974,356
Debt issuance costs		—			(16,482	)
Total long-term portion, net		4,407,195			11,590,500
Total debt, net	$	12,827,454		$	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
2022	$	1,262,508
2023		8,322,235
2024		802,225
2025		2,316,599
2026		183,936
Thereafter		42,794
Total	$	12,930,297

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Equity-Based Compensation (Tables)

3 Months Ended

Sep. 30, 2021

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		—			—		—
Vested		(30,531	)		2.51		—
Forfeited		(7,036	)		2.35		—
Nonvested restricted units outstanding at September 30, 2021		324,003		$	2.51		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:

	September 30,
	2021	2020
Risk free rate	N/A	N/A
Dividend yield	N/A	N/A
Volatility	N/A	N/A
Average forfeiture assumptions	N/A	N/A

Summary of Stock Option Activity

A summary of stock option activity for the three months ended September 30, 2021 and the year ended June 30, 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		—			—		—		—
Exercised		(38,774	)		2.33		—		—
Canceled/forfeited/expired		(31,669	)		2.35		—		—
Outstanding at September 30, 2021		3,706,125			2.65		7.7		600,620
Options vested and exercisable at September 30, 2021		2,195,366			2.83		7.2		304,247
Options vested and expected to vest as of    September 30, 2021		3,701,852		$	2.65		7.7	$	599,796

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Non-Cash Activities for Statements of Cash Flows (Tables)

3 Months Ended

Sep. 30, 2021

Supplemental Cash Flow Elements [Abstract]

Schedule of Consolidated Statements of Cash Flows for Non-Cash Activities

The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the three months ended September 30, 2021 and 2020, respectively.

	Three Months Ended September 30,
	2021			2020
Purchases of equipment classified as finance lease	$	(81,209	)	$	(20,834	)

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Background and Organization - Additional Information (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Aug. 30, 2019	Sep. 30, 2021
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%

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Summary of Significant Accounting Policies - Additional Information (Details)	1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 29, 2020 USD ($)	Sep. 30, 2021 USD ($) Customer Reporting	Sep. 30, 2020 Customer	Jun. 30, 2021 USD ($) Customer	Sep. 27, 2021 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Current assets (restricted)		$ 600,000		$ 600,000
Current liabilities (nonrecourse)		$ 100,000		$ 100,000
Net book value of fixed assets located outside the United States, percent of total		20.00%		19.00%
Cash balances located outside of the United States		$ 382,290		$ 204,813
Disclosure on Geographic Areas, Fixed Assets		The net book value of fixed assets located outside the United States was 20% and 19% of total fixed assets at September 30, 2021 and June 30, 2021, respectively. Cash balances located outside of the United States may not be insured and totaled $382,290 and $204,813 at September 30, 2021 and June 30, 2021, respectively.
Allowance for doubtful trade receivables		$ 155,657		57,582
Goodwill acquire transaction		$ 0		0
Number of reporting units | Reporting		1
Adjustments for impairment or observable transactions		$ 0		0
ASU 2019-12
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		$ 1,300,000		$ 1,300,000
Pasture Genetics
Summary Of Significant Accounting Policies [Line Items]
Goodwill acquire transaction	$ 1,452,436
Line of Credit | CIBC
Summary Of Significant Accounting Policies [Line Items]
'Minimum potential liquidity raised to meet covenant compliance					$ 3,000,000
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
Minimum | Line of Credit | CIBC
Summary Of Significant Accounting Policies [Line Items]
'Minimum potential liquidity raised to meet covenant compliance		$ 3,000,000
Maximum [Member] | Technology/IP
Summary Of Significant Accounting Policies [Line Items]
Useful life		30 years
Maximum [Member] | Customer Relationships
Summary Of Significant Accounting Policies [Line Items]
Useful life		20 years
Maximum [Member] | Trade Name
Summary Of Significant Accounting Policies [Line Items]
Useful life		20 years
Maximum [Member] | Other Intangibles
Summary Of Significant Accounting Policies [Line Items]
Useful life		20 years
Maximum [Member] | Building
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		35 years
Maximum [Member] | Machinery and Equipment
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		20 years
Maximum [Member] | Vehicles
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives		5 years
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		15 years
Weighted Average | Other Intangibles
Summary Of Significant Accounting Policies [Line Items]
Useful life		18 years
Weighted Average | License Agreements
Summary Of Significant Accounting Policies [Line Items]
Useful life		17 years
Argentina | Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Ownership percentage in Bioceres, S.A.		1.00%
Customer Concentration Risk | Revenue
Summary Of Significant Accounting Policies [Line Items]
Number of customers | Customer		4	2
Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Number of customers | Customer		1		1
Geographic Concentration Risk | Revenue | Non-US
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		76.00%	61.00%
Four Customers | Customer Concentration Risk | Revenue
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		26.00%
Two Customers | Customer Concentration Risk | Revenue
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage			23.00%
Customer One | Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage		13.00%
Customer Two | Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage				11.00%
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%

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Summary of Significant Accounting Policies - Schedule of Revenues from External Customers by Country (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 15,531,682	$ 13,855,386
Revenue from external customers by country, percentage	100.00%	100.00%
United States
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 3,665,328	$ 5,361,777
Revenue from external customers by country, percentage	24.00%	39.00%
Mexico
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 228,420	$ 1,136,090
Revenue from external customers by country, percentage	1.00%	8.00%
Sudan
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 819,618	$ 484,700
Revenue from external customers by country, percentage	5.00%	3.00%
Australia
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 3,434,005	$ 2,782,464
Revenue from external customers by country, percentage	22.00%	20.00%
South Africa
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 464,229	$ 664,075
Revenue from external customers by country, percentage	3.00%	5.00%
Libya
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,044,000	$ 225,000
Revenue from external customers by country, percentage	7.00%	2.00%
China
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 473,125
Revenue from external customers by country, percentage	3.00%	0.00%
Egypt
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 402,300	$ 394,200
Revenue from external customers by country, percentage	3.00%	3.00%
Argentina
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 350,839	$ 85
Revenue from external customers by country, percentage	2.00%	0.00%
Saudi Arabia
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 3,467,210	$ 1,198,909
Revenue from external customers by country, percentage	22.00%	9.00%
Other
Disaggregation Of Revenue [Line Items]
Revenues from external customers	$ 1,182,608	$ 1,608,086
Revenue from external customers by country, percentage	8.00%	11.00%

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Summary of Significant Accounting Policies - Components of Inventory (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Inventory Disclosure [Abstract]
Raw materials and supplies	$ 1,749,836	$ 2,722,832
Work in progress	11,316,519	6,662,006
Finished goods	50,204,096	54,010,418
Inventories	$ 63,270,451	$ 63,395,256

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Summary of Significant Accounting Policies - Schedule of Calculation of Basic and Diluted EPS (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Numerator:
Net loss attributable to S&W Seed Company	$ (6,399,975)	$ (7,172,760)
Numerator for basis EPS	(6,399,975)	(7,172,760)
Effect of dilutive securities:
Warrants	0	0
Total effect of dilutive securities:	0	0
Numerator for diluted EPS	$ (6,399,975)	$ (7,172,760)
Denominator:
Denominator for basic EPS-weighted- average shares	36,773,864	33,450,569
Effect of dilutive securities:
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	36,773,864	33,450,569
Basic EPS	$ (0.17)	$ (0.21)
Diluted EPS	$ (0.17)	$ (0.21)

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Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Recognized and Measured at Fair Value on Recurring Basis (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
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	324,595	96,466
Contingent consideration obligations	0	0
Total	324,595	96,466
Level 3
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Foreign exchange contract liability	0	0
Contingent consideration obligations	650,970	741,552
Total	$ 650,970	$ 741,552

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Leases - Additional Information (Details)	3 Months Ended
	Sep. 30, 2021
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 [Member]
Operating And Finance Lease [Line Items]
Lease agreements term	1 year

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Leases - Summary of Components of Lease Assets and Liabilities (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Lessee Disclosure [Abstract]
Right of use assets - operating leases	$ 4,455,308
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets
Right of use assets - finance leases	$ 2,280,077
Accumulated amortization - finance leases	(1,038,206)
Right of use assets - finance leases, net	$ 1,241,871
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets
Total lease assets	$ 5,697,179
Current portion of long-term debt, net	$ 893,753	$ 909,413
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:DebtCurrent
Current lease liabilities	$ 1,280,322
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:AccountsPayableAndAccruedLiabilitiesCurrent, us-gaap:OtherLiabilitiesCurrent
Long-term debt, net	$ 925,005	$ 1,108,709
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Long-term debt, net, less current portion
Long-term lease liabilities	$ 3,472,734
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other non-current liabilities
Total lease liabilities	$ 6,571,814

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Leases - Summary of Components of Lease Cost (Details)	3 Months Ended
	Sep. 30, 2021 USD ($)
Lessee Lease Description [Line Items]
Total lease costs	$ 560,166
Cost of Revenue
Lessee Lease Description [Line Items]
Operating lease cost	172,582
Selling, General and Administrative Expenses
Lessee Lease Description [Line Items]
Operating lease cost	82,043
Research and Development Expenses
Lessee Lease Description [Line Items]
Operating lease cost	122,280
Depreciation and Amortization and Interest
Lessee Lease Description [Line Items]
Finance lease cost	$ 183,261

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Leases - Summary of Maturities of Lease Liabilities (Details)	Sep. 30, 2021 USD ($)
Operating Leases
Remainder of 2022	$ 1,190,320
2023	1,162,910
2024	1,063,293
2025	727,353
2026	644,553
After 2026	401,534
Total lease payments	5,189,963
Less: Interest	(436,907)
Present value of lease liabilities	4,753,056
Finance Leases
Remainder of 2022	707,929
2023	861,026
2024	282,194
2025	50,734
2026	19,845
Total lease payments	1,921,728
Less: Interest	(102,970)
Present value of lease liabilities	$ 1,818,758

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Leases - Summary of Weighted Average Assumptions on Lease Term and Discount Rate and Supplemental Cash Flow Information Related to Leases (Details)	3 Months Ended
	Sep. 30, 2021 USD ($)
Lessee Disclosure [Abstract]
Operating lease remaining lease term	4 years 6 months
Operating lease discount rate	4.10%
Finance lease remaining lease term	2 years 2 months 12 days
Finance lease discount rate	5.10%
Cash paid for operating leases	$ 293,400
Cash paid for finance leases	$ 379,503

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Pioneer Relationship - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2019
Related Party Transaction [Line Items]
Payments received from related parties	$ 70,000,000.0
Revenue	15,531,682	$ 13,855,386
Unbilled receivable at contract termination	$ 0		$ 0
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			$ 8,300,000	$ 16,700,000	$ 45,000,000.0
Unbilled receivable at contract termination	$ 1,800,000
Corteva and Pioneer | Alfalfa Seeds
Related Party Transaction [Line Items]
Revenue					$ 34,200,000

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Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Disaggregation Of Revenue [Line Items]
Revenue	$ 15,531,682	$ 13,855,386
Pioneer product sales
Disaggregation Of Revenue [Line Items]
Revenue		1,622,363
Other product sales
Disaggregation Of Revenue [Line Items]
Revenue	14,905,402	11,870,912
Services
Disaggregation Of Revenue [Line Items]
Revenue	$ 626,280	$ 362,111

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Revenue Recognition - Additional Information (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Revenue Recognition [Line Items]
Maximum term of payments for transfer goods and services	1 year
Unbilled receivables billing term	3 months
Bad debt expense	$ 97,028	$ 35,435
Revenue recognized	$ 200,000	$ 6,100,000
Minimum
Revenue Recognition [Line Items]
Term of customer invoice payment	30 days
Maximum [Member]
Revenue Recognition [Line Items]
Term of customer invoice payment	120 days

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Goodwill and Intangible Assets - Additional Information (Details)	1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 29, 2020 USD ($)	Sep. 30, 2021 USD ($) Reporting	Sep. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)
Goodwill And Intangible Assets [Line Items]
Goodwill acquire transaction		$ 0		$ 0
Number of reporting units | Reporting		1
Amortization expense		$ 604,489	$ 594,720	$ 2,407,929
Pasture Genetics
Goodwill And Intangible Assets [Line Items]
Goodwill acquire transaction	$ 1,452,436

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Goodwill and Intangible Assets - Summary of Activity of Goodwill (Details) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill, Beginning Balance	$ 1,651,634	$ 1,508,675
Goodwill additions	0	0
Goodwill Impairment	0	0
Goodwill currency translation adjustment	(65,422)	142,959
Goodwill, Ending Balance	$ 1,586,212	$ 1,651,634

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Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)	3 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Finite Lived Intangible Assets [Line Items]
Intangible asset	$ 37,130,942	$ 38,784,058	$ 38,784,058
Intangible addition	0		8,499
Intangible Impairment	0		0
Intangible amortization expense	(604,489)	(594,720)	(2,407,929)
Intangible currency translation adjustment	(319,192)		746,314
Intangible asset	36,207,261		37,130,942
Trade Name
Finite Lived Intangible Assets [Line Items]
Intangible asset	1,310,489	1,479,278	1,479,278
Intangible addition	0		0
Intangible Impairment	0		0
Intangible amortization expense	(51,038)		(206,311)
Intangible currency translation adjustment	(12,778)		37,522
Intangible asset	1,246,673		1,310,489
Customer Relationships
Finite Lived Intangible Assets [Line Items]
Intangible asset	6,302,591	6,187,086	6,187,086
Intangible addition	0		0
Intangible Impairment	0		0
Intangible amortization expense	(94,264)		(376,431)
Intangible currency translation adjustment	(214,597)		491,936
Intangible asset	5,993,730		6,302,591
Non-compete
Finite Lived Intangible Assets [Line Items]
Intangible asset	5,058	21,312	21,312
Intangible addition	0		0
Intangible Impairment	0		0
Intangible amortization expense	(2,701)		(16,254)
Intangible currency translation adjustment	0		0
Intangible asset	2,357		5,058
GI Customer list
Finite Lived Intangible Assets [Line Items]
Intangible asset	50,146	57,310	57,310
Intangible addition	0		0
Intangible Impairment	0		0
Intangible amortization expense	(1,791)		(7,164)
Intangible currency translation adjustment	0		0
Intangible asset	48,355		50,146
Supply Agreement
Finite Lived Intangible Assets [Line Items]
Intangible asset	850,874	926,507	926,507
Intangible addition	0		0
Intangible Impairment	0		0
Intangible amortization expense	(18,908)		(75,633)
Intangible currency translation adjustment	0		0
Intangible asset	831,966		850,874
Grower Relationships
Finite Lived Intangible Assets [Line Items]
Intangible asset	1,436,988	1,542,393	1,542,393
Intangible addition	0		0
Intangible Impairment	0		0
Intangible amortization expense	(26,351)		(105,405)
Intangible currency translation adjustment	0		0
Intangible asset	1,410,637		1,436,988
Intellectual Property
Finite Lived Intangible Assets [Line Items]
Intangible asset	24,427,857	25,415,665	25,415,665
Intangible addition	0		388,499
Intangible Impairment	0		0
Intangible amortization expense	(348,933)		(1,376,307)
Intangible currency translation adjustment	0		0
Intangible asset	24,078,924		24,427,857
License agreement
Finite Lived Intangible Assets [Line Items]
Intangible asset	2,340,269	2,300,059	2,300,059
Intangible addition	0		0
Intangible Impairment	0		0
Intangible amortization expense	(43,558)		(176,646)
Intangible currency translation adjustment	(91,817)		216,856
Intangible asset	2,204,894		2,340,269
Internal use software
Finite Lived Intangible Assets [Line Items]
Intangible asset	406,670	474,448	474,448
Intangible addition	0		0
Intangible Impairment	0		0
Intangible amortization expense	(16,945)		(67,778)
Intangible currency translation adjustment	0		0
Intangible asset	389,725		406,670
In-process research and development
Finite Lived Intangible Assets [Line Items]
Intangible asset	$ 0	$ 380,000	380,000
Intangible addition			(380,000)
Intangible Impairment			0
Intangible amortization expense			0
Intangible currency translation adjustment			0
Intangible asset			$ 0

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Goodwill and Intangible Assets - Intangible Assets (Future Amortization) (Details)	Sep. 30, 2021 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2022	$ 1,805,435
2023	2,354,830
2024	2,332,295
2025	2,320,745
2026	2,234,328
Thereafter	$ 25,159,628

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Property, Plant and Equipment - Components of Property, Plant and Equipment (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 26,301,109	$ 26,077,402
Less: accumulated depreciation	(8,800,376)	(8,336,428)
Property, plant and equipment, net	17,500,733	17,740,974
Land and improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	2,281,733	2,297,529
Buildings and improvements
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	8,154,956	8,196,593
Machinery and Equipment
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	13,921,828	13,935,053
Vehicles
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	1,016,775	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	$ 373,007	$ 48,480

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Property, Plant and Equipment - Additional Information (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Property Plant And Equipment [Abstract]
Depreciation expense	$ 570,510	$ 691,483

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Debt - Schedule of Total Debt Outstanding (Details) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2021	Jun. 30, 2021
Working capital lines of credit
Total working capital lines of credit, net	$ 38,463,464	$ 33,946,565
Debt issuance costs	(548,530)	(665,706)
Current portion of long-term debt
Finance lease, Current	893,753	909,413
Debt issuance costs,Current	(4,281)	(5,077)
Total current portion, net	8,420,259	1,681,166
Long-term debt, less current portion
Finance lease, Noncurrent	925,005	1,108,709
Debt issuance costs, Noncurrent	(1,080)	(1,847)
Total long-term portion, net	4,407,195	11,590,500
Total debt, net	12,827,454	13,271,666
CIBC
Working capital lines of credit
Total working capital lines of credit, net	15,898,798	14,500,000
National Australia Bank
Working capital lines of credit
Total working capital lines of credit, net	21,386,970	19,494,800
National Australia Bank Limited Overdraft Facility
Working capital lines of credit
Total working capital lines of credit, net	1,726,226	617,471
Term Loan Long Term Current | National Australia Bank
Current portion of long-term debt
Secured Debt, Current	360,050	374,900
Machinery & Equipment Loans Long Term Current | National Australia Bank
Current portion of long-term debt
Secured Debt, Current	182,606	165,802
Conterra RE Short
Current portion of long-term debt
Debt issuance costs,Current	(97,482)	(39,556)
Secured Debt, Current	7,085,613	275,684
Term Loan Long Term Non Current | National Australia Bank
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	2,880,400	2,999,200
Machinery & Equipment Loans long Term | National Australia Bank
Long-term debt, less current portion
Secured Long-term Debt, Noncurrent	602,870	526,564
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)

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Debt - CIBC Credit Facility - Additional Information (Details) - CIBC - USD ($)			3 Months Ended
	Sep. 27, 2021	Dec. 26, 2019	Sep. 30, 2021
Line Of Credit Facility [Line Items]
Line of credit and security agreement date		Dec. 26, 2019
Line of credit facility, maximum borrowing capacity	$ 25,000,000.0	$ 35,000,000.0
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 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			$ 1,500,000
Line of Credit
Line Of Credit Facility [Line Items]
Debt instrument covenant compliance to maintain minimum fixed charge coverage ratio until March 31, 2022	1.00%
Debt instrument covenant compliance to maintain minimum fixed charge coverage ratio thereafter	1.15%
'Minimum potential liquidity raised to meet covenant compliance	$ 3,000,000
Line of Credit | Base Rate
Line Of Credit Facility [Line Items]
Basis spread on variable rate		1.00%
Line of Credit | LIBOR
Line Of Credit Facility [Line Items]
Basis spread on variable rate		3.00%
Line of Credit | Prime
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 [Member]
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%
Minimum | Line of Credit
Line Of Credit Facility [Line Items]
'Minimum potential liquidity raised to meet covenant compliance			$ 3,000,000

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Debt - Loan Transaction - Additional Information (Details)		1 Months Ended		3 Months Ended
	Dec. 24, 2019 USD ($)	Jan. 31, 2021 USD ($) Point	Nov. 30, 2017 USD ($)	Sep. 30, 2021
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
Conterra | Secured Real Estate Note
Line Of Credit Facility [Line Items]
Debt instrument, principal amount			$ 10,400,000
Debt instrument, maturity date				Nov. 30, 2022
Debt instrument, maturity date, description				On December 24, 2019, the Company entered into an amendment to extend the note’s maturity date to November 30, 2022, and revise the amounts payable under the note.
Debt instrument, interest rate			7.75%
Debt instrument, prepayment term				The Company may prepay the Secured Real Estate Note, in whole or in part, at any time.
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	$ 515,711	$ 388,045
Debt instrument, payment starting date	Jan. 01, 2020	Jul. 01, 2021
Debt instrument, frequency of periodic payment of interest		three consecutive semi-annual principal and interest payments
Conterra | Secured Real Estate Note | Debt Instrument, Redemption, Period Two
Line Of Credit Facility [Line Items]
Debt instrument, combined payment	$ 454,185	$ 7,184,109
Debt instrument, payment starting date	Jul. 01, 2020	Nov. 30, 2022
Debt instrument, frequency of periodic payment of interest	five consecutive semi-annual principal and interest payments	one-time final payment
Conterra | Secured Real Estate Note | Debt Instrument, Redemption, Period Three
Line Of Credit Facility [Line Items]
Debt instrument, combined payment	$ 8,957,095
Debt instrument, payment starting date	Nov. 30, 2022
Debt instrument, frequency of periodic payment of interest	one-time final payment

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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

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Debt - NAB Facilities - Additional Information (Details)		3 Months Ended
	Nov. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 AUD ($)
Term Loan
Line Of Credit Facility [Line Items]
Line of credit facility, expiration date		Mar. 31, 2025
Facility outstanding amount		$ 3,240,450	$ 4,500,000,000,000
Line of credit facility, Principal payments	$ 500,000
Line of credit facility principal payment start date		Nov. 30, 2020
Line of credit facility, floating interest rate during period		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%
Master Asset Finance Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 1,440,200	2,000,000
Facility outstanding amount		$ 526,472	731,109
Debt instrument maturity year		2026
Master Asset Finance Facility | Minimum
Line Of Credit Facility [Line Items]
Interest rate		2.86%
Master Asset Finance Facility | Maximum [Member]
Line Of Credit Facility [Line Items]
Interest rate		5.31%
National Australia Bank
Line Of Credit Facility [Line Items]
Debt guaranteed value		$ 10,801,500	15,000,000
NAB Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 25,563,550	35,500,000
Line of credit facility, expiration date		Jun. 30, 2022
Facility outstanding amount		$ 23,113,196	32,097,203
NAB Facility | Overdraft Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		2,160,300	3,000,000
Line of credit facility, temporarily increased maximum borrowing capacity		$ 2,160,300	$ 3,000,000
Line of credit facility interest accrued		5.47%	5.47%
NAB Facility | Borrowing Base Line
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 18,722,600	$ 26,000,000
Line of credit facility, temporarily increased maximum borrowing capacity		$ 21,386,970	$ 29,700,000
Line of credit facility interest accrued		3.50%	3.50%
NAB Facility | Master Asset Finance Facility
Line Of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 1,440,200	$ 2,000,000

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Debt - Schedule of Annual Maturities of Short-Term and Long-Term Debt (Details)	Sep. 30, 2021 USD ($)
Debt Disclosure [Abstract]
2022	$ 1,262,508
2023	8,322,235
2024	802,225
2025	2,316,599
2026	183,936
Thereafter	42,794
Total	$ 12,930,297

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Equity - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended	12 Months Ended
	Sep. 23, 2020	Sep. 30, 2021	Jun. 30, 2021	Sep. 27, 2021	Dec. 31, 2020	Dec. 01, 2020
Class Of Stock [Line Items]
Common stock, shares authorized		75,000,000	75,000,000
ATM Agreement | B. Riley Securities, Inc
Class Of Stock [Line Items]
Maximum aggregate offering price of common stock by agent	$ 14.0			$ 17.1
Percentage of commission on gross proceeds from sale of common stock through agent	3.50%
Gross proceeds from sale of common stock		$ 2,586.0	$ 10.9
Number of common stock shares issued during the period		848	3,008,015
Value of remaining common stock available to issue under agreement		$ 6.2
Common stock, shares authorized					75,000,000	50,000,000

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Foreign Currency Contracts - Additional Information (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Jun. 30, 2021
Foreign Currency Contracts [Line Items]
Foreign exchange contract liability	$ 324,595		$ 96,466
Gain (loss) on foreign exchange contracts	$ (162,545)	$ (99,217)
Minimum
Foreign Currency Contracts [Line Items]
Foreign currency maturity term	2021-10
Maximum [Member]
Foreign Currency Contracts [Line Items]
Foreign currency maturity term	2022-04
Foreign Currency Forward Contracts
Foreign Currency Contracts [Line Items]
Foreign currency forward contracts, notional value	$ 5,483,354
Gain (loss) on foreign exchange contracts	$ 238,803	$ (4,746)

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Equity-Based Compensation - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Jan. 31, 2019	Sep. 30, 2021	Sep. 30, 2020	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		0	0
Unrecognized stock compensation expense, net of estimated forfeitures, related to options		$ 1,137,377
Stock-based compensation, total compensation cost not yet recognized, period for recognition		1 year 7 months 6 days
Stock-based compensation		$ 394,312	$ 320,409
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 12 days
Number of restricted stock units issued		0	0	291,206
Stock-based compensation		$ 171,524	$ 160,882
Unrecognized stock compensation expense related to restricted stock grants		$ 402,915
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 [Member]
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	3,731,341			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

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Equity-Based Compensation - Summary Of Stock Option Activity (Details) - USD ($)	3 Months Ended	12 Months Ended
	Sep. 30, 2021	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		976,924
Options, Exercised	(38,774)	(65,990)
Options, Canceled/forfeited/expired	(31,669)	(10,260)
Options, Outstanding as of end of period	3,706,125	3,776,568	2,875,894
Options, vested and exercisable at end of period	2,195,366
Options, vested and expected to vest	3,701,852
Weighted-Average Exercise Prices, Outstanding as of beginning of period	$ 2.65	$ 2.74
Weighted-Average Exercise Prices, Granted		2.41
Weighted-Average Exercise Prices, Exercised	2.33	2.48
Weighted-Average Exercise Prices, Canceled/forfeited/expired	2.35	2.94
Weighted-Average Exercise Prices, Outstanding as of end of period	2.65	$ 2.65	$ 2.74
Weighted-Average Exercise Prices, vested and exercisable	2.83
Weighted-Average Exercise Price, vested and expected to vest	$ 2.65
Options Outstanding, Weighted-Average Remaining Contractual Term (in years)	7 years 8 months 12 days	8 years	8 years 7 months 6 days
Weighted-Average Remaining Contractual Term (in years), vested and exercisable	7 years 2 months 12 days
Weighted-Average Remaining Contractual Term (in years), vested and expected to vest	7 years 8 months 12 days
Options, Outstanding, Aggregate Intrinsic Value	$ 600,620	$ 3,962,766	$ 22,409
Options, vested and exercisable, Aggregate Intrinsic Value	304,247
Options, vested and expected to vest, Aggregate Intrinsic Value	$ 599,796

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Equity-Based Compensation - Summary of Activity Related to Non-Vested Restricted Stock Units (Details) - Restricted Stock Units - $ / shares	3 Months Ended		12 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	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	396,803
Number of Nonvested Restricted Stock Units, Granted	0	0	291,206
Number of Nonvested Restricted Stock Units, Vested	(30,531)		(326,439)
Number of Nonvested Restricted Stock Units, Forfeited	(7,036)
Number of Nonvested Restricted Stock Units Outstanding, Ending	324,003		361,570	396,803
Weighted-Average Grant Date Fair Value, Beginning	$ 2.51	$ 2.33	$ 2.33
Weighted-Average Grant Date Fair Value, Granted			2.59
Weighted-Average Grant Date Fair Value, Vested	2.51		2.36
Weighted-Average Grant Date Fair Value, Forfeited	2.35
Weighted-Average Grant Date Fair Value, Ending	$ 2.51		$ 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			1 year 10 months 24 days

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Non-Cash Activities for Statements of Cash Flows - Schedule of Consolidated Statements of Cash Flows for Non-Cash Activities (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Supplemental Cash Flow Elements [Abstract]
Purchases of equipment classified as finance lease	$ (81,209)	$ (20,834)

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Subsequent Events - Additional Information (Details)		3 Months Ended
	Oct. 14, 2021 USD ($) $ / shares shares	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2022 AUD ($)	Nov. 11, 2021 USD ($)	Nov. 11, 2021 AUD ($)	Sep. 30, 2021 AUD ($)
Subsequent Event [Line Items]
Net proceeds from sale of common stock		$ 2,481	$ 0
NAB Facility
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		25,563,550					$ 35,500,000
Borrowing Base Line | NAB Facility
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		18,722,600					26,000,000
Overdraft Credit | NAB Facility
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		2,160,300					3,000,000
Overdraft Credit | NAB Facility | Scenario Forecast
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity				$ 0
Master Asset Finance Facility
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		1,440,200					2,000,000
Master Asset Finance Facility | NAB Facility
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		$ 1,440,200					$ 2,000,000
Subsequent Event | Borrowing Base Line | NAB Facility
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity					$ 23,043,200	$ 32,000,000
Subsequent Event | Overdraft Credit | NAB Facility
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity					1,440,200	2,000,000
Subsequent Event | Master Asset Finance Facility | NAB Facility
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity					$ 2,160,300	$ 3,000,000
Subsequent Event | Securities Purchase Agreement
Subsequent Event [Line Items]
Issuance of common stock, shares | shares	1,847,343
Common stock purchase price, per share | $ / shares	$ 2.73
Net proceeds from sale of common stock	$ 5,000,000.0