SANW S and W Seed Company

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): November 22, 2024

S&W SEED COMPANY

(Exact name of registrant as specified in Its charter)

Nevada	001-34719	27-1275784
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

2101 Ken Pratt Blvd, Suite 201 Longmont, CO		80501
(Address of principal executive offices)		(Zip Code)

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

Not Applicable

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

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

 

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

 

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

 

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

 

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

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

 

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

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

Emerging growth company ☐

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

 

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Item 1.01 Entry into a Material Definitive Agreement.

As previously reported, S&W Seed Company Australia Pty Ltd (“S&W Australia”), a wholly-owned subsidiary of S&W Seed Company (the “Company”), adopted a voluntary plan of administration on July 24, 2024, and on October 11, 2024, creditors of S&W Australia approved a proposed Deed of Company Arrangement (“DOCA”) pursuant to which, among other things, all of the outstanding shares of S&W Australia would be transferred to Avior Asset Management No. 3 Pty Ltd. In order to facilitate the satisfaction of certain conditions to the effectiveness of the DOCA, on November 22, 2024, the Company entered into (i) a Business Transfer Agreement, (ii) a Transitional Services Deed and (iii) a Deed of Settlement and Release with S&W Australia. The Company also entered into a Deed of Release of US Corporate Guarantee with National Australia Bank Limited (“NAB”), and obtained a release of certain applicable liens from CIBC Bank USA (“CIBC”).

Business Transfer Agreement

Under the Business Transfer Agreement, the Company transferred certain intellectual property rights related to alfalfa and white clover seeds necessary for S&W Australia’s continued operations (the “IP Rights”), along with certain related inventory, to S&W Australia. Pursuant to the agreement, S&W Australia granted the Company a non-exclusive, non-transferable, royalty-bearing license to the IP Rights for the sale of products in the United States, Mexico, Canada, Central America, and South America for a term of five years. S&W Australia is entitled to receive a royalty in the mid-single digits from the Company on gross revenue generated from the licensed IP Rights.

Transitional Services Deed

Under the Transitional Services Deed, the Company agreed to continue providing certain services it has generally provided to S&W Australia on a temporary basis to support the transition of services from the Company to S&W Australia. Each party will be responsible for its own transition costs. The services provided per the Transitional Services Deed will terminate between February 12, 2025 and August 31, 2025, unless terminated earlier pursuant to its terms.

Deed of Settlement and Release

Under the Deed of Settlement and Release, in consideration for the Company’s (i) transfers under the Business Transfer Agreement, (ii) services rendered under the Transitional Services Deed and (iii) certain other payments, S&W Australia released the Company from all intercompany liabilities and obligations.

Deed of Release of US Corporate Guarantee

S&W Australia’s Amended and Restated Finance Agreement with NAB, effective November 17, 2023 (the “NAB Finance Agreement”) was guaranteed by the Company up to a maximum of AUD $15.0 million (USD $10.4 million as of September 30, 2024) (the “Parent Guarantee”). Under the Deed of Release of US Corporate Guarantee, NAB released the Company from all liability under the Parent Guarantee and related to the NAB Finance Agreement.

Lien Release

Pursuant to the Company’s Amended and Restated Loan and Security Agreement with CIBC dated March 22, 2023 (as amended, the “CIBC Loan Agreement”), CIBC obtained a security interest in the Company’s assets. In connection with the execution of the agreements listed above, CIBC consented to the transfer of, and released its security interests in, the assets of the Company to be transferred to S&W Australia pursuant to the Business Transfer Agreement as described above.

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information in Item 1.01 is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(b) Pro forma financial information.

The unaudited pro forma consolidated financial statements of the Company as of and for the three months ended September 30, 2024 and the fiscal year ended June 30, 2024 and the notes related thereto, in each case giving effect to the transfer of all outstanding shares of S&W Australia, as well as certain assets, to a third party, are filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

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(d) Exhibits

Exhibit	Description
99.1	Unaudited pro forma financial information
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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

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SIGNATURES

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

 

 

	S&W SEED COMPANY
	By:	/s/ Vanessa Baughman
		Vanessa Baughman
		Chief Financial Officer
Date: November 27, 2024

 

 

 

 

 

 

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S&W Seed Company

Pro Forma Consolidated Financial Statements

(Unaudited)

The following unaudited pro forma consolidated financial statements of S&W Seed Company, or the Company, are presented to illustrate the effect to the Company's historical financial position and operating results as of the closing of the transaction to transfer all of the outstanding shares of S&W Australia, among other certain things to facilitate the satisfaction of certain conditions to the effectiveness of the Deed of Company Arrangement, to Avior Asset Management No. 3 Pty Ltd. (as detailed in Note 1— Basis of Presentation), which occurred on November 22, 2024.

The transaction constituted a significant disposition for purposes of Item 2.01 of Form 8-K. As a result, the Company prepared the accompanying unaudited pro forma consolidated financial statements in accordance with Article 11 of Regulation S-X.

The accompanying unaudited pro forma consolidated balance sheets as of September 30, 2024 have been prepared to give effect to the disposition as if it had occurred on September 30, 2024. The unaudited pro forma consolidated statements of operations for the year ended June 30, 2024 and for the three months ended September 30, 2024 have been prepared to give effect to the disposition as if it had occurred on July 1, 2023.

The unaudited pro forma consolidated balance sheets and statements of operations included herein are for informational purposes only and are not necessarily indicative of the results that might have occurred had the disposition taken place on the respective dates assumed. Actual results may differ significantly from those reflected in the unaudited consolidated pro forma financial statements for various reasons, including but not limited to, the differences between the assumptions used to prepare the unaudited pro forma consolidated financial statements and actual results. The pro forma adjustments in the unaudited pro forma consolidated balance sheets and the statements of operations included herein include the use of estimates and assumptions as described in the accompanying notes. The pro forma adjustments are based on information available to the Company at the time these unaudited pro forma consolidated financial statements were prepared. The Company believes its current estimates provide a reasonable basis of presenting the significant effects of the transaction. However, the estimates and assumptions are subject to change as additional information becomes available. The unaudited pro forma consolidated financial statements only include adjustments related to the voluntary administration and the transaction to transfer all of the outstanding shares of S&W Australia to Avior Asset Management No. 3 Pty Ltd., among other certain things to facilitate the satisfaction of this transfer.

This pro forma consolidated information is based on the historical consolidated financial statements of the Company and should be read in conjunction with the unaudited consolidated financial statements and accompanying footnotes included in the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2024, filed with the Securities and Exchange Commission on November 26, 2024, and the consolidated financial statements and accompanying footnotes in its Annual Report on Form 10-K for the year ended June 30, 2024, filed with the Securities Exchange Commission on November 1, 2024.

 

 

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S&W Seed Company

Pro Forma Consolidated Balance Sheets

As of September 30, 2024

(Unaudited)

			As Reported (a)				Pro forma Adjustments				Footnotes		Pro forma Statements
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$		480,359		$		(238,480	)		(b)	$		241,879
Accounts receivable, net				16,588,371				—						16,588,371
Receivable from unconsolidated subsidiary				367,349				(367,349	)		(c)			—
Inventories, net				26,549,387				(6,029,063	)		(d)			20,520,324
Prepaid expenses and other current assets				2,616,306				—						2,616,306
TOTAL CURRENT ASSETS				46,601,772				(6,634,892	)					39,966,880
Property, plant and equipment, net				5,980,625				—						5,980,625
Intellectual property, net				19,919,389				(10,192,810	)		(e)			9,726,579
Other Intangibles, net				3,099,003				(455,688	)		(e)			2,643,315
Right of use asset - operating leases				890,086				—						890,086
Equity method investments				18,847,331				—						18,847,331
Other assets				1,272,948				—						1,272,948
TOTAL ASSETS		$		96,611,154		$		(17,283,390	)			$		79,327,764
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		$		9,396,043		$		—				$		9,396,043
Payable to unconsolidated subsidiary				16,214,514				(16,214,514	)		(c)			—
Bank guarantee				5,000,000				(5,000,000	)		(f)			—
Deferred revenue				2,056,703				—						2,056,703
Accrued expenses and other current liabilities				5,814,941				—						5,814,941
Current portion of working capital lines of credit, net				16,114,500				—						16,114,500
Current portion of long-term debt, net				284,239				—						284,239
TOTAL CURRENT LIABILITIES				54,880,940				(21,214,514	)					33,666,426
Long-term debt, net, less current portion				4,652,369				—						4,652,369
Other non-current liabilities				659,996				—						659,996
TOTAL LIABILITIES				60,193,305				(21,214,514	)					38,978,791
MEZZANINE EQUITY
Preferred stock, $0.001 par value; 3,323 shares authorized; 1,695 issued and outstanding at September 30, 2024 and June 30, 2024				5,896,657				—						5,896,657
TOTAL MEZZANINE EQUITY				5,896,657				—						5,896,657
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value; 75,000,000 shares authorized; 2,284,096 issued and 2,282,780 outstanding at September 30, 2024; 2,282,574 issued and 2,281,258 outstanding at June 30, 2024				43,398				—						43,398
Treasury stock, at cost, 1,316 shares at September 30, 2024 and June 30, 2024				(134,196	)			—						(134,196	)
Additional paid-in capital				169,048,535				—						169,048,535
Accumulated deficit				(138,448,097	)			3,931,124			(g)			(134,516,973	)
Accumulated other comprehensive loss				(30,156	)			—						(30,156	)
Noncontrolling interests				41,708				—						41,708
TOTAL STOCKHOLDERS' EQUITY				30,521,192				3,931,124						34,452,316
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY		$		96,611,154		$		(17,283,390	)			$		79,327,764

 

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.

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S&W Seed Company

Pro Forma Consolidated Statements of Operations

For the Year Ended June 30, 2024

(Unaudited)

		For the year ended June 30, 2024
						Pro Forma Adjustments
		As Reported				S&W Australia (h)				Other				Footnotes		Pro forma Statements
Revenue		$	60,441,646			$	(22,391,688	)		$	—					$	38,049,958
Cost of revenue (excluding depreciation and amortization)			44,631,897				(17,300,506	)			—						27,331,391
Gross profit			15,809,749				(5,091,182	)			—						10,718,567
Operating expenses																	—
Selling, general and administrative expenses			21,725,874				(6,572,147	)			—						15,153,727
Research and development expenses			4,062,419				(1,088,452	)			—						2,973,967
Depreciation and amortization			4,288,449				(1,033,006	)			(1,170,284	)		(i)			2,085,159
(Gain) loss on disposal of property, plant and equipment			(109,746	)			39,464				—						(70,282	)
Impairment charges			3,531,010				(3,531,010	)			—						—
Total operating expenses			33,498,006				(12,185,151	)			(1,170,284	)					20,142,571
Loss from operations			(17,688,257	)			7,093,969				1,170,284						(9,424,004	)
Other (income) expense
Foreign currency loss			1,213,732				(1,162,603	)			—						51,129
Loss on sale of equity investment			534,189				(534,189	)			—						—
Interest expense - amortization of debt discount			1,883,573				(394,523	)			—						1,489,050
Interest expense, net			5,520,991				(2,497,352	)			—						3,023,639
Other (income) expenses			(139,067	)			(8,477	)			—						(147,544	)
Loss before income taxes			(26,701,675	)			11,691,113				1,170,284						(13,840,278	)
Provision for (benefit from) income taxes			496,290				(488,063	)			—			(j)			8,227
Loss before equity in net earnings of affiliates			(27,197,965	)			12,179,176				1,170,284						(13,848,505	)
Equity in loss of equity method investees, net of tax			2,858,424				(245,147	)			—						2,613,277
Net loss			(30,056,389	)			12,424,323				1,170,284						(16,461,782	)
Loss attributable to noncontrolling interests			(25,412	)			—				—						(25,412	)
Net loss attributable to S&W Seed Company		$	(30,030,977	)		$	12,424,323			$	1,170,284					$	(16,436,370	)
Calculation of net loss per share:
Net loss attributable to S&W Seed Company per common share, basic and diluted		$	(13.21	)												$	(7.23	)
Weighted average number of common shares outstanding, basic and diluted			2,273,112														2,273,112

 

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.

 

 

 

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S&W Seed Company

Pro Forma Consolidated Statements of Operations

For the Three Months Ended September 30, 2024

(Unaudited)

		For the three months ended September 30, 2024
		As Reported (k)				Pro forma Adjustments				Footnotes		Pro forma Statements
Revenue		$	8,309,476			$	—					$	8,309,476
Cost of revenue (excluding depreciation and amortization)			6,973,108				—						6,973,108
Gross profit			1,336,368				—						1,336,368
Operating expenses
Selling, general and administrative expenses			4,002,211				—						4,002,211
Research and development expenses			741,820				—						741,820
Depreciation and amortization			814,453				(292,571	)		(i)			521,882
Loss on disposal of property, plant and equipment			11,462				—						11,462
Total operating expenses			5,569,946				(292,571	)					5,277,375
Loss from operations			(4,233,578	)			292,571						(3,941,007	)
Other (income) expense
Foreign currency loss			7,926				—						7,926
Loss on sale of equity investment			—				—						—
Interest expense - amortization of debt discount			361,138				—						361,138
Interest expense, net			761,879				—						761,879
Other (income) expenses			22,686				—						22,686
Loss before income taxes			(5,387,207	)			292,571						(5,094,636	)
Provision for income taxes			1,142				—			(j)			1,142
Loss before equity in net earnings of affiliates			(5,388,349	)			292,571						(5,095,778	)
Equity in loss of equity method investees, net of tax			846,878				—						846,878
Net loss from continuing operations		$	(6,235,227	)		$	292,571					$	(5,942,656	)
Calculation of net loss per share:
Net loss from continuing operations per common share, basic and diluted		$	(2.73	)								$	(2.60	)
Weighted average number of common shares outstanding, basic and diluted			2,282,780										2,282,780

 

The accompanying notes are an integral part of these unaudited pro forma consolidated financial statements.

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S&W Seed Company

Notes to Pro Forma Consolidated Financial Statements

(Unaudited)

Note 1 - Basis of Presentation

The accompanying unaudited pro forma consolidated financial statements of S&W Seed Company, or the Company, were derived from the Company’s historical consolidated financial statements. The unaudited pro forma consolidated balance sheets as of September 30, 2024 were adjusted to reflect the completion of the transaction to transfer all outstanding shares of S&W Seed Company Australia Pty Ltd, or S&W Australia., as well as certain tangible and intangible assets, in exchange for the release from National Australia Bank Limited, or NAB, of its guarantee and the release from S&W Australia of all intercompany liabilities and obligations, as if the transaction had occurred on September 30, 2024. The unaudited pro forma consolidated statements of operations for the year ended June 30, 2024 and the three months ended September 30, 2024 were adjusted as if the transaction had occurred on July 1, 2023.

All figures are in United States dollars.

The unaudited pro forma consolidated financial statements are furnished for informational purposes only and do not purport to reflect the Company’s financial position and results of operations had the dispositions occurred on the dates as indicated above. Further, these financial statements are not necessarily indicative of the Company’s future financial position and future results of operations and should be read in conjunction with the historical financial statements of the Company included in its Annual Report on Form 10-K for the year ended June 30, 2024 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

Note 2 - Pro Forma Adjustments

The unaudited pro forma adjustments are based on preliminary estimates, available information and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma consolidated financial information:

“Historical” represents the historical unaudited consolidated (i) balance sheets of S&W Seed Company as of September 30, 2024 and (ii) statements of operations of S&W Seed Company for the year ended June 30, 2024 and the three months ended September 30, 2024. For the three months ended September 30, 2024, the unaudited consolidated statements of operations is only presented through the net loss from continuing operations, as the net loss from discontinued operations should be excluded.

Balance Sheets:

(a) The consolidated balance sheets as of September 30, 2024 already exclude S&W Australia due to the deconsolidation of this subsidiary at quarter-end.

(b) Reduction is due to repayment of insurance proceeds received on behalf of S&W Australia, offset by chiller fee payment S&W Australia was required to settle with the Company.

(c) Release from all intercompany obligations owed to S&W Australia, with the intercompany receivables netted against the intercompany payables.

(d) Estimated net book value of alfalfa and white clover inventory transferred to S&W Australia.

(e) Removal of certain alfalfa and white clover intellectual property transferred to S&W Australia, with the value being a preliminary estimate.

(f) Release from NAB of AUD $15.0 million guarantee, which was reported at its fair value of $5.0 million as of September 30, 2024.

(g) Estimated net gain from S&W Australia ownership transfer transaction discussed in Note 1 - Basis of Presentation.

Statements of Operations:

(h) Adjustments to remove S&W Australia activity, factoring in intercompany activity, for the period.

(i) Reduction in amortization expense due to transfer of certain intellectual property related to alfalfa and white clover intellectual property to S&W Australia.

(j) Tax effect not shown due to the Company's significant valuation allowance in the United States.

(k) Discontinued operations, which relates to S&W Australia activity and loss from deconsolidation, is excluded.

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v3.24.3

Document and Entity Information	Nov. 22, 2024
Cover [Abstract]
Entity Registrant Name	S&W SEED CO
Security Exchange Name	NASDAQ
Amendment Flag	false
Entity Central Index Key	0001477246
Document Type	8-K
Document Period End Date	Nov. 22, 2024
Entity Incorporation, State or Country Code	NV
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
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	SANW
Entity Emerging Growth Company	false

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