UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
~~Washington,~~

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~December 31, 2017~~September 30, 2022

ORor

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

For the transition period from ~~________to _________~~_____________ to _____________

Commission ~~file number~~ File Number: 001-34719

S&W SEED COMPANY

(Exact ~~name~~Name of Registrant as Specified in ~~its~~Its Charter)

~~Nevada~~	~~27-1275784~~
~~(State~~ Nevada		27-1275784
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification ~~Number)~~No.)


2101 Ken Pratt Blvd, Suite 201, Longmont, CO		80501
(Address of Principal Executive Offices)		(Zip Code)

(720) 506-9191

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

~~(559) 884-2535~~
(Registrant's Telephone Number, ~~including~~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)~~15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for the past 90 days.x ~~YES~~ ¨ NO

☒Yes☐ No

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

☒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~~“large accelerated filer,~~" "accelerated~~” “accelerated filer,~~" "smaller~~” “smaller reporting ~~company"~~company” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.


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

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

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

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

registrant as of November 4, 2022 was 42,623,445.

S&W SEED COMPANY
~~Table of Contents~~

TABLE OF CONTENTS

~~PART I. FINANCIAL INFORMATION~~	~~Page No.~~
PART I.		FINANCIAL INFORMATION		Page No.
Item 1.		Financial Statements (Unaudited):		4

Consolidated Balance Sheets at ~~December 31, 2017~~September 30, 2022 and June 30, ~~2017~~2022		4

Consolidated Statements of Operations for the Three ~~and Six~~ Months Ended ~~December 31, 2017~~September 30, 2022 and ~~2016~~2021		5

Consolidated Statements of Comprehensive Income (Loss) for the Three ~~and Six~~ Months Ended ~~December 31, 2017~~September 30, 2022 and ~~2016~~2021		6

Consolidated Statements of ~~Stockholders'~~Stockholders’ Equity for the ~~Six~~Three Months Ended ~~December 31, 2017~~September 30, 2022 and ~~2016~~2021		7

Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~December 31, 2017~~September 30, 2022 and ~~2016~~2021		8

Notes to Consolidated Financial Statements		9

Item 2. ~~Management's~~		Management’s Discussion and Analysis of Financial Condition and Results of Operations	35	29

Item 3.		Quantitative and Qualitative Disclosures About Market Risk	57	42

Item 4.		Controls and Procedures	57	42
PART II.		OTHER INFORMATION		43
~~PART II. OTHER INFORMATION~~ Item 1.		Legal Proceedings		43
Item 1A.		Risk Factors		43
~~Item 1. Legal Proceedings~~	58

~~Item 1A. Risk Factors~~	58

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	58	43

Item 3.		Defaults Upon Senior Securities	58	43

Item 4.		Mine Safety Disclosures	58	43
Item 5.		Other Information		43
~~Item 5. Other Information~~	58

Item 6. ~~Exhibits~~	59	Exhibits		44

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, ~~(the "Securities Act"),~~or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, ~~(the "Exchange Act"), which are subject to~~or the ~~"safe harbor" created by those sections. These~~Exchange Act. All statements other than statements of historical fact could be deemed forward-looking statements, ~~include~~including, but ~~are~~ not limited ~~to, any~~to: statements concerning ~~projections~~our loan agreements, including our ability to comply with and/or secure refinancing for such loan agreements; the potential effects of ~~revenue, margins, expenses, tax provisions, earnings, cash flows~~global macroeconomic events and ~~other financial items; any statements of~~the COVID-19 pandemic on our business; the plans, strategies and objectives of management for our future ~~operations; any statements regarding~~operations, including our expectations for new product introductions during fiscal 2023 and our implementation of our recently implemented strategic review (which includes our plans to reduce annual operating expenses); 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~~our assumptions, expectations and beliefs 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,"~~“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:

•
whether we are successful in ~~securing~~implementing our strategies focused on growth opportunities, changes in our cost structure and improved financial performance;
•
whether we are able to maintain compliance with our current loan agreements or secure replacement loan financing, including to provide access to sufficient ~~acreage~~liquidity to ~~support~~ pay our growers and suppliers;
•
the ~~growth~~COVID-19 pandemic and other geopolitical and macroeconomic events, such as global inflation, supply chain disruptions, uncertain market conditions and the ongoing military conflict between Russia and Ukraine and related sanctions, and the extent to which they continue to disrupt the local and global economies, as well as our business and the businesses of our ~~alfalfa~~customers, distributors and suppliers;
•
changes in demand for our seed ~~business,~~
products, including Double TeamTM, our non-GMO herbicide tolerant sorghum solution;
•
whether we are able to develop and successfully launch additional trait technology products;
•
whether we are successful in commercializing our current and future trait technology products, including Double TeamTM;
•
our plans for expansion of our business (including by expanding crop offerings and market share of existing offerings through ~~acquisitions)~~acquisitions, joint ventures and other strategic 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;~~
camelina and stevia;
•
the cost and other implications of pending or future legislation or court decisions and pending or future accounting pronouncements;
•
our preliminary, nonbinding discussions for a joint venture in wheat with Trigall Genetics may not result in a consummated transaction, the joint venture may not be created in the manner or on the terms expected, or at all, and
the joint venture may not provide the anticipated benefits; and
•
other risks that are described herein and in the section titled “Risk Factors” contained in Part I, Item 1A. of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, or the Annual Report, and that are otherwise described or updated from time to time in our filings with the Securities ~~and~~ Exchange ~~Commission ("SEC").~~

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 ~~listed in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K, which was filed with the SEC on September 20, 2017.~~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.

When used in this Quarterly Report on Form 10-Q, the terms ~~"we," "us," "our," "the~~“we,” “us,” “our,” “the Company,~~" "S&W"~~” “S&W” and "S“S&W ~~Seed"~~Seed” refer to S&W Seed Company and its subsidiaries or, as the context may require, S&W Seed Company only. Our fiscal year ends on June 30, and accordingly, the terms ~~"fiscal 2018," "fiscal 2017"~~“fiscal 2023,” “fiscal 2022,” and ~~"fiscal 2016"~~“fiscal 2021” in this Quarterly Report on Form 10-Q refer to the respective fiscal year ended June 30, ~~2018, 2017~~2023, 2022 and ~~2016,~~2021, 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.

PART I

~~Part I~~

FINANCIAL INFORMATION

Item 1. Financial Statements

S&W SEED COMPANY

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

December 31, June 30,
2017 2017
ASSETS

CURRENT ASSETS
     Cash and cash equivalents $ 5,454,694 $ 745,001
     Accounts receivable, net 25,250,475 23,239,325
     Inventories, net 70,486,985 31,489,945
     Prepaid expenses and other current assets 1,500,066 1,249,921
          TOTAL CURRENT ASSETS 102,692,220 56,724,192

Property, plant and equipment, net 13,630,123 13,581,576
Intangibles, net 33,810,687 34,939,079
Goodwill 10,292,265 10,292,265
Other assets 1,568,286 1,563,176
          TOTAL ASSETS $ 161,993,581 $ 117,100,288

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable $ 32,831,640 $ 7,157,745
     Accounts payable - related parties 117,164 331,694
     Deferred revenue 55,442 880,326
     Accrued expenses and other current liabilities 2,671,495 2,733,718
     Lines of credit, net 27,592,603 27,399,784
     Current portion of contingent consideration obligation - 2,500,000
     Current portion of long-term debt, net 358,864 10,309,664
          TOTAL CURRENT LIABILITIES 63,627,208 51,312,931

Long-term debt, net, less current portion 13,203,191 1,096,155
Derivative warrant liabilities - 2,836,600
Other non-current liabilities 781,629 632,947

          TOTAL LIABILITIES 77,612,028 55,878,633

STOCKHOLDERS' EQUITY
     Preferred stock, $0.001 par value; 5,000,000 shares authorized;
          no shares issued and outstanding - -
     Common stock, $0.001 par value; 50,000,000 shares authorized;
          24,353,300 issued and 24,328,300 outstanding at December 31, 2017;
          18,004,681 issued and 17,979,681 outstanding at June 30, 2017; 24,353 18,004
     Treasury stock, at cost, 25,000 shares (134,196) (134,196)
     Additional paid-in capital 108,568,030 83,312,518
     Accumulated deficit (18,653,679) (16,436,286)
     Accumulated other comprehensive loss (5,422,955) (5,538,385)
          TOTAL STOCKHOLDERS' EQUITY 84,381,553 61,221,655
          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 161,993,581 $ 117,100,288


ASSETS	September 30, 2022			June 30, 2022
CURRENT ASSETS
Cash and cash equivalents	$	1,224,400		$	2,056,508
Accounts receivable, net		27,707,851			19,051,236
Inventories, net		49,831,196			54,515,894
Prepaid expenses and other current assets		1,940,218			1,605,987
TOTAL CURRENT ASSETS		80,703,665			77,229,625
Property, plant and equipment, net		16,204,434			16,871,669
Intangibles, net		33,111,696			34,095,827
Other assets		5,272,985			5,590,730
TOTAL ASSETS	$	135,292,780		$	133,787,851
LIABILITIES, SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	17,073,969		$	15,901,116
Deferred revenue		963,435			605,960
Accrued expenses and other current liabilities		10,540,681			10,788,740
Current portion of working capital lines of credit, net		39,798,376			12,678,897
Current portion of long-term debt, net		8,108,613			8,316,783
TOTAL CURRENT LIABILITIES		76,485,074			48,291,496
Long-term working capital lines of credit, less current portion		—			21,703,286
Long-term debt, net, less current portion		3,767,839			3,992,540
Other non-current liabilities		3,461,501			3,587,041
TOTAL LIABILITIES		83,714,414			77,574,363
SERIES B CONVERTIBLE PREFERRED STOCK
Preferred stock, $0.001 par value; 3,323 shares authorized; 1,695 shares issued and outstanding at September 30, 2022; 1,695 issued and outstanding at June 30, 2022		4,918,880			4,804,819
TOTAL SERIES B CONVERTIBLE PREFERRED STOCK		4,918,880			4,804,819
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value; 75,000,000 shares authorized; 49,707,555 issued and 42,607,585 outstanding at September 30, 2022; 42,608,758 issued and 42,583,758 outstanding at June 30, 2022		42,633			42,609
Treasury stock, at cost, 25,000 shares		(134,196	)		(134,196	)
Additional paid-in capital		164,486,927			163,892,575
Accumulated deficit		(110,496,559	)		(105,873,557	)
Accumulated other comprehensive loss		(7,274,895	)		(6,560,600	)
Noncontrolling interests		35,576			41,838
TOTAL STOCKHOLDERS' EQUITY		46,659,486			51,408,669
TOTAL LIABILITIES, SERIES B CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY	$	135,292,780		$	133,787,851

See notes to consolidated financial statements.

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended Six Months Ended
December 31, December 31,
2017 2016 2017 2016
Revenue $ 20,532,796 $ 24,225,744 $ 31,244,512 $ 36,475,317

Cost of revenue 15,860,629 19,005,270 24,236,757 29,311,580

Gross profit 4,672,167 5,220,474 7,007,755 7,163,737

Operating expenses
     Selling, general and administrative expenses 2,446,955 2,592,059 5,361,035 5,047,263
     Research and development expenses 855,164 748,571 1,597,081 1,490,113
     Depreciation and amortization 870,981 842,454 1,759,233 1,677,151
     Disposal of property, plant and equipment gain (15,413) - (81,776) -

          Total operating expenses 4,157,687 4,183,084 8,635,573 8,214,527

Income (loss) from operations 514,480 1,037,390 (1,627,818) (1,050,790)

Other expense
     Foreign currency loss (gain) 7,472 (2,837) 22,030 (6,483)
     Change in derivative warrant liabilities 341,199 (959,200) (431,300) 168,500
     Change in contingent consideration obligations - 57,282 - 164,363
     Loss on equity method investment - - - 49,249
     Interest expense - amortization of debt discount 33,100 381,660 67,099 981,118
     Interest expense - convertible debt and other 383,894 295,042 731,623 647,584

Income (loss) before income taxes (251,185) 1,265,443 (2,017,270) (3,055,121)
     Provision (benefit) for income taxes 148,702 106,485 200,123 (996,923)
Net income (loss) $ (399,887) $ 1,158,958 $ (2,217,393) $ (2,058,198)

Net income (loss) per common share:
     Basic $ (0.02) $ 0.07 $ (0.11) $ (0.12)
     Diluted $ (0.02) $ 0.01 $ (0.11) $ (0.12)

Weighted average number of common shares outstanding:
     Basic 21,130,960 17,821,547 20,643,973 17,467,370
     Diluted 21,130,960 17,996,221 20,643,973 17,467,370


	Three Months Ended September 30,
	2022			2021
Revenue	$	19,865,865		$	15,531,682
Cost of revenue		15,361,354			12,405,012
Gross profit		4,504,511			3,126,670
Operating expenses
Selling, general and administrative expenses		5,056,257			5,587,635
Research and development expenses		1,515,380			1,995,128
Depreciation and amortization		1,336,434			1,331,045
Gain on disposal of property, plant and equipment		(3,660	)		(18,067	)
Total operating expenses		7,904,411			8,895,741
Loss from operations		(3,399,900	)		(5,769,071	)
Other (income) expense
Foreign currency loss		190,915			162,545
Change in contingent consideration obligation		—			(62,254	)
Interest expense - amortization of debt discount		283,643			192,195
Interest expense, net		742,409			518,486
Loss before income taxes		(4,616,867	)		(6,580,043	)
Benefit from income taxes		(101,664	)		(165,802	)
Net loss	$	(4,515,203	)	$	(6,414,241	)
Net loss attributable to noncontrolling interests		(6,262	)		(14,266	)
Net loss attributable to S&W Seed Company	$	(4,508,941	)	$	(6,399,975	)

Calculation of net loss for loss per share:
Net loss attributable to S&W Seed Company	$	(4,508,941	)	$	(6,399,975	)
Dividends accrued for participating securities and accretion		(114,061	)		—
Net loss attributable to common shareholders	$	(4,623,002	)	$	(6,399,975	)

Net loss attributable to S&W Seed Company per common share:
Basic	$	(0.11	)	$	(0.17	)
Diluted	$	(0.11	)	$	(0.17	)
Weighted average number of common shares outstanding:
Basic		42,604,020			36,773,864
Diluted		42,604,020			36,773,864

See notes to consolidated financial statements.

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
~~(UNAUDITED)~~

Three Months Ended Six Months Ended
December 31, December 31,
2017 2016 2017 2016

Net income (loss) $ (399,887) $ 1,158,958 $ (2,217,393) $ (2,058,198)

Foreign currency translation adjustment, net of income taxes (41,223) (448,784) 115,430 (243,621)

Comprehensive income (loss) $ (441,110) $ 710,174 $ (2,101,963) $ (2,301,819)

(UNAUDITED)


	Three Months Ended September 30,
	2022			2021
Net loss	$	(4,515,203	)	$	(6,414,241	)
Foreign currency translation adjustment, net of income taxes		(714,295	)		(461,127	)
Comprehensive loss		(5,229,498	)		(6,875,368	)
Comprehensive loss attributable to noncontrolling interests		(6,262	)		(14,266	)
Comprehensive loss attributable to S&W Seed Company	$	(5,223,236	)	$	(6,861,102	)

See notes to consolidated financial statements.

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS'~~STOCKHOLDERS’ EQUITY
~~(UNAUDITED)~~

Common Stock Treasury Stock Additional
Paid-In Accumulated Accumulated
Other
Comprehensive Total
Stockholders'
Shares Amount Shares Amount Capital Deficit Loss Equity

Balance, June 30, 2016 17,086,111 $ 17,086 (25,000) $ (134,196) $ 78,282,461 $ (4,614,244) $ (5,789,663) $ 67,761,444

Stock-based compensation - options, restricted stock, and RSUs - - - - 578,659 - - 578,659
Net issuance to settle RSUs 41,270 41 - - (75,124) - - (75,083)
Issuance of common stock upon conversion of principal and
interest of convertible debentures 684,321 684 - - 3,160,589 - - 3,161,273
Exercise of stock options, net of withholding taxes 161,781 162 - - 601,921 - - 602,083
Other comprehensive loss - - - - - - (243,621) (243,621)
Net loss - - - - - (2,058,198) - (2,058,198)
Balance, December 31, 2016 17,973,483 $ 17,973 (25,000) $ (134,196) $ 82,548,506 $ (6,672,442) $ (6,033,284) $ 69,726,557

Balance, June 30, 2017 18,004,681 $ 18,004 (25,000) $ (134,196) $ 83,312,518 $ (16,436,286) $ (5,538,385) $ 61,221,655

Stock-based compensation - options, restricted stock, and RSUs - - - - 451,033 - - 451,033
Net issuance to settle RSUs 88,619 89 - - (113,777) - - (113,688)
Proceeds from sale of common stock, net of fees and expenses 6,260,000 6,260 - - 22,512,956 - - 22,519,216
Reclassification of warrants upon expiration of repricing provisions - - - - 2,405,300 - - 2,405,300
Other comprehensive income - - - - - - 115,430 115,430
Net loss - - - - - (2,217,393) - (2,217,393)
Balance, December 31, 2017 24,353,300 $ 24,353 (25,000) $ (134,196) $ 108,568,030 $ (18,653,679) $ (5,422,955) $ 84,381,553

(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, 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
Net issuance to settle RSUs		—		—		28,263		28		—			—			(40,743	)		—			—			—			(40,715	)
Proceeds from sale of common stock, net of fees and expenses		—		—		848		1		—			—			2,480			—			—			—			2,481
Other comprehensive loss		—		—		—		—		—			—			—			—			—			(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

Balance, June 30, 2022		—	$	—		42,608,758	$	42,609		(25,000	)	$	(134,196	)	$	163,892,575		$	(105,873,557	)	$	41,838		$	(6,560,600	)	$	51,408,669
Stock-based compensation - options, restricted stock, and RSUs		—		—		—		—		—			—			456,112			—			—			—			456,112
Series B detachable warrant		—		—		—		—		—			—			—			(25,838	)		—			—			(25,838	)
Accrued dividends on Series B convertible preferred stock		—		—		—		—		—			—			—			(88,223	)		—			—			(88,223	)
Subordinated loan & security agreement warrants		—		—		—		—		—			—			146,474			—			—			—			146,474
Net issuance to settle RSUs		—		—		23,827		24		—			—			(8,234	)		—			—			—			(8,210	)
Other comprehensive loss		—		—		—		—		—			—			—			—			—			(714,295	)		(714,295	)
Net loss		—		—		—		—		—			—			—			(4,508,941	)		(6,262	)		—			(4,515,203	)
Balance, September 30, 2022		—	$	—		42,632,585	$	42,633		(25,000	)	$	(134,196	)	$	164,486,927		$	(110,496,559	)	$	35,576		$	(7,274,895	)	$	46,659,486

See notes to consolidated financial statements.

S&W SEED COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended
December 31,
2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss $ (2,217,393) $ (2,058,198)
     Adjustments to reconcile net loss from operating activities to net cash used in operating activities
          Stock-based compensation 451,033 578,659
          Bad debt expense 20,547 -
          Depreciation and amortization 1,759,233 1,677,151
          Gain on disposal of property, plant and equipment (81,776) -
          Change in deferred tax asset - (1,034,439)
          Change in foreign exchange contracts 100,864 234,286
          Change in derivative warrant liabilities (431,300) 168,500
          Change in contingent consideration obligation - 164,363
          Amortization of debt discount 67,099 981,118
          Loss on equity method investment - 49,249
          Changes in:
               Accounts receivable (1,960,907) 1,820,501
               Inventories (38,850,545) (20,836,483)
               Prepaid expenses and other current assets (377,920) 72,841
               Other non-current asset (4,963) -
               Accounts payable 25,606,471 10,098,122
               Accounts payable - related parties (216,112) 3,462,649
               Deferred revenue (614,523) (151,463)
               Accrued expenses and other current liabilities (67,000) (1,150,794)
               Other non-current liabilities 148,147 (61,677)
                    Net cash used in operating activities (16,669,045) (5,985,615)

CASH FLOWS FROM INVESTING ACTIVITIES
     Additions to property, plant and equipment (815,063) (1,264,395)
     Proceeds from disposal of property, plant and equipment 46,218 -
     Additions to internal use software - (118,389)
                    Net cash used in investing activities (768,845) (1,382,784)

CASH FLOWS FROM FINANCING ACTIVITIES
     Net proceeds from sale of common stock 22,519,216 -
     Net proceeds from exercise of common stock options - 602,083
     Taxes paid related to net share settlements of stock-based compensation awards (113,688) (75,083)
     Borrowings and repayments on lines of credit, net 38,574 5,646,664
     Repayment of contingent consideration obligation (2,500,000) -
     Borrowings of long-term debt 12,500,000 88,150
     Debt issuance costs (257,964) -
     Repayments of long-term debt (10,113,415) (169,598)
     Repayments of convertible debt - (3,427,837)
                    Net cash provided by financing activities 22,072,723 2,664,379

EFFECT OF EXCHANGE RATE CHANGES ON CASH 74,860 (92,185)

NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 4,709,693 (4,796,205)

CASH AND CASH EQUIVALENTS, beginning of the period 745,001 6,904,500

CASH AND CASH EQUIVALENTS, end of period $ 5,454,694 $ 2,108,295

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

     Cash paid during the period for:
          Interest $ 776,882 $ 823,844
          Income taxes 42,244 148,019


	Three Months Ended September 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,515,203	)	$	(6,414,241	)
Adjustments to reconcile net loss from operating activities to net
cash used in operating activities:
Stock-based compensation		456,112			394,312
Change in allowance for doubtful accounts		(155,421	)		97,028
Inventory write-down		537,998			307,000
Depreciation and amortization		1,336,434			1,331,045
Gain on disposal of property, plant and equipment		(3,660	)		(18,067	)
Change in foreign exchange contracts		503,985			235,912
Foreign currency transactions		(1,294,985	)		—
Change in contingent consideration obligation		—			(62,254	)
Amortization of debt discount		283,643			192,195
Changes in:
Accounts receivable		(8,996,608	)		(3,247,001	)
Inventories		3,124,383			(1,040,417	)
Prepaid expenses and other current assets		(216,080	)		(17,504	)
Other non-current asset		72,381			(17,800	)
Accounts payable		1,671,381			1,949,750
Deferred revenue		361,348			324,688
Accrued expenses and other current liabilities		(436,714	)		566,298
Other non-current liabilities		(48,989	)		(65,426	)
Net cash used in operating activities		(7,319,995	)		(5,484,482	)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(151,376	)		(470,960	)
Proceeds from disposal of property, plant and equipment		3,660			18,313
Net cash used in by investing activities		(147,716	)		(452,647	)
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		(8,210	)		(40,715	)
Borrowings and repayments on lines of credit, net		6,750,048			5,274,959
Borrowings of long-term debt		266,734			150,768
Debt issuance costs		(128,879	)		(103,261	)
Repayments of long-term debt		(457,929	)		(452,544	)
Net cash provided by financing activities		6,421,764			4,831,688
EFFECT OF EXCHANGE RATE CHANGES ON CASH		213,839			(527,769	)
NET DECREASE IN CASH & CASH EQUIVALENTS		(832,108	)		(1,633,210	)
CASH AND CASH EQUIVALENTS, beginning of the period		2,056,508			3,527,937
CASH AND CASH EQUIVALENTS, end of period	$	1,224,400		$	1,894,727

See notes to consolidated financial statements.

S&W SEED COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 - BACKGROUND AND ORGANIZATION

~~Organization~~

~~S&W Seed~~Organization

The Company ~~a Nevada corporation (the "Company"),~~ began as S&W Seed Company, a general partnership, in 1980 and was originally in the business of breeding, growing, processing and selling alfalfa seed. ~~We then~~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~~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~~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.

OnIn April 1, 2013, the Company, together with its wholly-owned subsidiary, S&W ~~Seed~~Holdings Australia Pty Ltd, an Australia corporation ("(f/k/a S&W ~~Australia")~~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, ~~("SGI")~~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 ~~SGI's shareholders.~~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, primarily alfalfa seed.~~seeds. The Company ~~owns~~operates seed cleaning and processing facilities, which are located in ~~Five Points, California, Nampa,~~ Idaho, Texas, New South Wales and ~~Keith,~~ South Australia. The ~~Company's~~Company’s seed products are primarily grown under contract by farmers. The Company began its stevia initiative in fiscal year 2010 and is currently focused on breeding improved varieties of stevia and developing marketing and distribution programs for its stevia products.

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

~~More recently, in~~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~~Company’s initial effort to diversify its product portfolio beyond alfalfa seed and stevia.

The Company's operations span the world's alfalfa seed production regions with operations in the San Joaquin and Imperial Valleys of California, five other U.S. states, Australia, and three provinces in Canada, andIn October 2018, the Company ~~sells~~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 Agriscience, Inc., or 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 ~~products~~company in ~~more than 30 countries around~~Australia, as part of the ~~globe.~~Company’s efforts to diversify its product offerings and expand its distribution channels.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

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

The consolidated financial statements include the accounts of S&W Seed ~~Holding, LLC~~Company and its ~~other wholly-owned subsidiaries, S&W Australia, which owns 100% of SGI, and Stevia California, LLC.~~subsidiaries. All ~~significant~~ intercompany ~~balances~~accounts and transactions have been ~~eliminated.~~eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles, or GAAP, and include the assets, liabilities, revenue and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the Company's exercises control. Outside stockholders' interests in subsidiaries are shown on the condensed consolidated financial statements as Noncontrolling interests.

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

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

Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. The Company recorded a combined $0.4 million of current assets (restricted) and $27,762 of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of September 30, 2022.

The Company recorded a combined $0.5 million of current assets (restricted) and $31,307 of current liabilities (nonrecourse) for these entities in its consolidated balance sheet as of June 30, 2022.

Unaudited Interim Financial Information

The Company has prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission, ~~("SEC")~~or SEC, for interim financial reporting. These consolidated financial statements are unaudited and, in the ~~Company's~~Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the ~~Company's~~Company’s consolidated balance sheets, statements of operations, comprehensive income (loss), cash flows and ~~stockholders'~~stockholders’ equity for the periods presented. Operating results for the periods presented are not necessarily indicative of the results to be expected for the full year ending June 30, ~~2018.~~2023. Certain information and disclosures normally included in financial statements prepared in accordance with ~~accounting principles generally accepted in the United States of America~~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 ~~Company's~~ Annual Report, ~~on Form 10-K for the year ended June 30, 2017,~~ as filed with the SEC.

Use of Estimates

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

Certain adverse geopolitical and macroeconomic events, such as the continued impact of COVID-19, the ongoing conflict between Ukraine and Russia and related sanctions, and uncertain market conditions, including higher inflation and supply chain disruptions, have, among other things, negatively impacted the global economy, created significant volatility and disruption of financial markets, and 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~~Company’s revenue is principally derived from the sale of ~~alfalfa~~ seed, the market for which is highly competitive. ~~The Company depends on a core group of significant customers.~~ One customer accounted for ~~75% and 66%~~16% of its revenue for the three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016, respectively. One~~no single customer accounted for ~~58% and 49%~~more than 10% of its revenue for the ~~six~~three months ended ~~December 31, 2017 and 2016, respectively.~~September 30, 2021.

~~Two customers~~No customer accounted for ~~50%~~more than 10% of the ~~Company's~~Company’s accounts receivable ~~at December 31, 2017. Two customers accounted for 52%~~as of ~~the Company's accounts receivable at~~ June 30, ~~2017.~~2022 and September 30, 2022.

~~In addition, the~~The Company sells a substantial portion of its products to international customers. Sales to international markets represented ~~23%~~79% and ~~30%~~76% of revenue during the three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016,~~2021, respectively. ~~Sales to international markets represented 38% and 46% of revenue during the six months ended December 31, 2017 and 2016, respectively.~~ The net book value of fixed assets located outside the United States was ~~19%~~21% and ~~19%~~22% of total fixed assets at ~~December 31, 2017~~September 30, 2022 and June 30, ~~2017,~~2022, respectively. Cash balances located outside of the United States may not be insured and totaled ~~$1,209,181~~$195,158 and ~~$192,879~~$811,551 at ~~December 31, 2017~~September 30, 2022 and June 30, ~~2017,~~2022, respectively.

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

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


	Three Months Ended September 30,
	2022				2021
Saudi Arabia	$	5,172,286	26	%	$	3,467,210	22	%
United States		4,260,754	21	%		3,665,328	24	%
Libya		2,998,047	15	%		1,044,000	7	%
Australia		2,557,732	13	%		3,434,005	22	%
Pakistan		821,620	4	%		164,055	1	%
Sudan		802,044	4	%		819,618	5	%
Algeria		754,680	4	%		—	—
Mexico		731,100	4	%		228,420	2	%
China		468,500	2	%		473,125	3	%
Argentina		362,978	2	%		350,839	2	%
Other		936,124	5	%		1,885,082	12	%
Total revenue	$	19,865,865	100	%	$	15,531,682	100	%

Liquidity andCapital Resources

The Company is monitoring the impact of adverse geopolitical and macroeconomic events, including the COVID-19 pandemic and the ongoing military conflict between Russia and Ukraine and related sanctions, and uncertain market conditions, including higher inflation and supply chain disruptions, on its business, including its results of operations and financial condition.

The Company’s sales efforts historically involved significant in-person interaction with potential customers and distributors. Throughout the COVID-19 pandemic, many national, state and local governments in its target markets implemented various stay-at-home, shelter-in-place and other quarantine measures. As a result, the Company shifted its sales activities to video conferencing and similar customer interaction models and continues to evaluate its sales approach, but the Company found these alternative approaches to generally be less effective than in-person sales efforts. In particular, regular in-person customer interactions did not resume until February 2022 in some locations where the Company operates. If ongoing measures to protect against COVID-19 are reinstated during the fiscal 2023 sales season, the Company may experience similar negative impacts that it experienced during the fiscal 2021 and 2022 sales seasons.

Following the recent invasion of Ukraine by Russia, the U.S. and global financial markets experienced volatility, which has led to disruptions to trade, commerce, pricing stability, credit availability, supply chain continuity and reduced access to liquidity globally. In response to the invasion, the United States, United Kingdom and European Union, along with others, imposed significant new sanctions and export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in the future. The full economic and social impact of the sanctions imposed on Russia and possible future punitive measures that may be implemented, as well as the counter measures imposed by Russia, in addition to the ongoing military conflict between Ukraine and Russia and related sanctions, which could conceivably expand into the surrounding region, remains uncertain; however, both the conflict and related sanctions have resulted and could continue to result in disruptions to trade, commerce, pricing stability, credit availability, supply chain continuity and reduced access to liquidity on acceptable terms, in both Europe and globally, and has introduced significant uncertainty into global markets. As a result, the Company’s business, including its ability to deliver seed and timely receive payment from customers, and access to capital may be adversely affected by the ongoing military conflict

between Ukraine and Russia and related sanctions, particularly to the extent it escalates to involve additional countries, further economic sanctions or wider military conflict.

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

During the year ended June 30, 2022 and the three months ended September 30, 2022, the Company experienced numerous logistical challenges due to limited availability of trucks for product deliveries, congestion at the ports, and overall increases in shipping and transportation costs, which the Company attributes to the COVID-19 pandemic and the general disruptions from the ongoing conflict between Ukraine and Russia and related sanctions. The Company expects these logistical challenges to persist throughout fiscal 2023, which may, among other things, delay or reduce its ability to recognize revenue within a particular fiscal period and harm its results of operations.

Given the level of uncertainty regarding the duration and broader impact of these adverse geopolitical and macroeconomic events, the Company is unable to fully assess the extent of their impact on the Company’s operations.

For the three months ended September 30, 2022, we reported a net loss of $4.5 million and net cash used in operations of $7.3 million. At September 30, 2022, we had cash on hand of $1.2 million.

The Company’s Loan and Security Agreement, dated December 26, 2019, or the CIBC Loan Agreement, with CIBC Bank USA, or CIBC, and the secured promissory note, or Rooster Note, that it executed in favor of Conterra Agriculture Capital, LLC, or Conterra, and subsequently endorsed to Rooster Capital, LLC, or Rooster, which matures on December 23, 2022, and its debt facilities with National Australia Bank, or NAB, contain various operating and financial covenants (See Note 7). Adverse geopolitical and macroeconomic events and other factors affecting the Company’s results of operations have increased the risk of the Company’s inability to comply with these covenants, which could result in acceleration of its repayment obligations and foreclosure on its pledged assets. For example, the Company was not in compliance with certain covenants in the CIBC Loan Agreement and the Rooster Note as of June 30, 2021, December 31, 2021, March 31, 2022, June 15, 2022 and June 30, 2022, and was required to obtain waivers and/or amendments from CIBC and Rooster. In particular, the CIBC Loan Agreement as presently in effect requires the Company to maintain minimum liquidity of no less than $1,000,000, and the NAB Finance Agreement (as defined below) includes an undertaking that requires the Company to maintain a net related entity position of not more than AUD $25,000,000. Accordingly, the Company’s ability to comply with this undertaking is subject to fluctuations in foreign currency conversion rates, which are outside of the Company’s control. Due to recent fluctuations in foreign currency conversion rates, the Company is currently not in compliance with this undertaking. Although the Company is currently in discussions with NAB to revise how compliance with this undertaking is measured, there can be no assurances that the Company will be able to secure an amendment to the NAB Finance Agreement or regain compliance with this undertaking. The Company is actively pursuing refinancing of the CIBC Loan Agreement and the Rooster Note. There can be no assurance the Company will be successful in raising additional capital, securing future waivers and/or amendments from its lenders, renewing or refinancing its existing debt or securing new financing. If the Company is unsuccessful in doing so, it may need to reduce the scope of its operations, repay amounts owing to its lenders or sell certain assets. The Company is also exploring strategic alternatives for underutilized assets, including plans to enter the camelina market as a seed and technology provider. These operating and liquidity factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

International Operations

The Company translates its foreign ~~operations'~~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.~~income (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of ~~operations.~~

~~Revenue Recognition~~

~~The Company derives its revenue primarily from sale~~operations, and included approximately $1.0 million benefit to cost of ~~seed~~revenues and $0.2 million foreign currency loss to other ~~crops and milling services. Revenue from seed and other crop sales is recognized when risk and title to~~(income) expense for the ~~product is transferred to the customer.~~three months ended September 30, 2022.

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

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

Cost of Revenue

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

Cash and Cash Equivalents

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

Accounts Receivable

The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each ~~customer's~~customer’s trade accounts receivable. The allowance for doubtful trade receivables was ~~$526,495~~$80,743 and $233,927 at ~~December 31, 2017~~September 30, 2022 and June 30, ~~2017.~~2022, respectively.

Inventories

Inventories consist of seed and packaging materials.

Inventories are stated at the lower of cost or ~~market,~~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.

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

Inventory is periodically reviewed to determine if it is marketable, obsolete, or impaired. Inventory that is determined to be obsolete or impaired is written off to expense at the time the impairment is identified. ~~Because the~~Inventory quality is a function of germination ~~rate, and therefore the quality, of~~percentage. Our experience has shown that our alfalfa seed ~~improves over the first year of~~quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed ~~is not~~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 ~~sells its inventory~~maintains a strict pest control program to ~~distributors, dealers~~mitigate risk and ~~directly to growers.~~maximize hybrid seed quality.

Components of inventory ~~are:~~are as follows:

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


	As of September 30, 2022		As of June 30, 2022
Raw materials and supplies	$	3,138,774	$	2,645,764
Work in progress		8,345,528		6,677,980
Finished goods		38,346,894		45,192,150
Inventories, net	$	49,831,196	$	54,515,894

Property, Plant and Equipment

Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of ~~5-28~~5-35 years for buildings, ~~3-20~~2-20 years for machinery and equipment, and ~~3-5~~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 ~~10-30~~3-30 years for technology/IP/germplasm, ~~10-20~~5-20 years for customer relationships and trade names and ~~3-20~~3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 1820 years for customer relationships, ~~and 20~~16 years for trade names, 18 years for license agreements and19 years for other intangible assets.

Goodwill

~~Goodwill~~

Goodwill originated from acquisitions of Imperial Valley Seeds, Inc. ("IVS") and SGI during the fiscal year 2013, the acquisition of the alfalfa business from DuPont Pioneer in fiscal year 2015 and the acquisition of assets of SVThe Company acquired Pasture Genetics in ~~May 2016.~~ February 2020, and recorded goodwill of $1,452,436 as part of this transaction.

Goodwill is assessed at least annually, or when certain triggering events occur, for impairment using fair value measurement techniques. These events could include a significant change in the business climate, legal factors, a decline in operating performance, competition, sale or disposition of a significant portion of the business, or other factors. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value ~~of a reporting unit~~ is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value ~~of a reporting unit~~ is less than its carrying amount, management conducts a ~~two-step~~ quantitative goodwill impairment test. The ~~first step of the~~ goodwill impairment test is used to identify potential impairment by comparing the fair value ~~of a reporting unit~~ with its

carrying amount, including goodwill. The Company uses market capitalization and an estimate of a control premium to estimate the fair ~~value of its one reporting unit.~~value. If the fair value ~~of a reporting unit~~ exceeds its carrying amount, goodwill of the reporting unit is considered not ~~impaired, and the second step of the impairment test is unnecessary.~~impaired. If the carrying amount ~~of a reporting unit~~ exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. If the carrying amount of the reporting unit's goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that ~~excess. The implied fair value of goodwill is determined in~~excess, limited to the ~~same manner as the~~total amount of goodwill recognized in a business combination. That is, the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. goodwill.

The Company performed a quantitative assessment of goodwill at June 30, ~~2017~~2022 on its one reporting unit and determined that goodwill was ~~not~~fully impaired. See Note 5 for further information.

~~Equity Method Investments~~Investment in Bioceres S.A.

~~Investee companies that are not consolidated, but over which the~~The Company ~~exercises significant influence, are accounted for under the equity method~~owns less than 1% of ~~accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation~~Bioceres, S.A., a provider of ~~several factors including, among others, representation on the investee company's board of directors and ownership level, which is generally a 20% to 50% interest~~crop productivity solutions headquartered in ~~the voting securities~~Argentina. The carrying value of the ~~investee company. Under~~investment is $0.4 million at September 30, 2022 and $0.4 million at June 30, 2022, and the equity method of accounting, an investee company's accounts are not reflected within the Company's consolidated balance sheets and statements of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption ``Loss on equity method investment'' in the consolidated statements of operations. The Company's carrying value in an equity method investee companyinvestment is included in Other Assets on the ~~Company's~~Company’s consolidated balance ~~sheets. When~~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 ~~Company's carrying value in an equity method investee company~~stock is ~~reduced to zero, no further losses are recorded in the Company's consolidated financial statements unless~~not publicly traded, the Company ~~guaranteed obligations~~has elected to account for its investment at cost, with adjustments to fair value when there are observable transactions that provide an indicator of fair value. In addition, if qualitative factors indicate a potential impairment, fair value must be estimated, and the investment written down to that fair value if it is lower than the carrying value.

During the third quarter of fiscal year 2022, the Company sold 71.4% of the ~~investee company~~investment in Bioceres, S.A. for net proceeds of $988,504, which included a gain on the sale of marketable securities of $68,967.

No adjustments for impairment were made for the three months ended September 30, 2022 or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.September 30, 2021.

~~Cost Method Investments~~

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

Research and Development Costs

The Company is engaged in ongoing research and development, ("or R~~&D")~~&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~~Company’s effective tax rate for the three ~~and six~~ months ended ~~December 31, 2017~~September 30, 2022 and September 30, 2021 has been ~~effected~~affected by the valuation allowance on the ~~Company's~~Company’s deferred tax assets.

Net Income (Loss) Per Common Share Data

Basic net income (loss) per common share, ~~("EPS"),~~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, convertible debt and common stock warrants.~~ awards.

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

The Company computes earnings per share using the two-class method. The two-class method requires an earnings allocation formula that determines earnings per share for common shareholders and participating security holders according to dividends declared and participating rights in undistributed earnings. The Company’s Series B Preferred Stock (as defined below) and the Warrant (as defined below) are participating securities because holders of such equity have non-forfeitable dividend rights and participate in any undistributed earnings with common stock. Under the two-class method, total dividends provided to the holders of participating securities and undistributed earnings allocated to participating securities, are subtracted from net income attributable to the Company in determining net loss attributable to common shareholders. During the three months ended September 30, 2022, there were $88,223 in accrued dividends subtracted from net income attributable to common shareholders; there were no undistributed earnings to allocate

to the participating securities. Additionally, any accretion to the redemption value for the Series B Preferred Stock is treated as a deemed dividend in the two-class EPS calculation. During the three months ended September 30, 2022, $25,838 was accreted to the redemption value of the Series B Preferred Stock and subtracted from net income attributable to common shareholders.

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


	Three Months Ended September 30,
	2022			2021
Numerator:
Net loss attributable to S&W Seed Company	$	(4,508,941	)	$	(6,399,975	)
Dividends accrued for participating securities and accretion		(114,061	)		—
Numerator for basic and diluted EPS	$	(4,623,002	)	$	(6,399,975	)
Denominator:
Denominator for basic EPS - weighted average shares		42,604,020			36,773,864
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		42,604,020			36,773,864
Basic EPS	$	(0.11	)	$	(0.17	)
Diluted EPS	$	(0.11	)	$	(0.17	)

The effects of ~~securities identified in~~employee stock options and restricted stock units are excluded because they would be anti-dilutive due to the ~~table with no adjustments in the calculation of Diluted EPS were determined to be antidilutive~~Company’s net loss for the ~~applicable periods.~~ three months ended September 30, 2022 and 2021.

Three Months Ended Six Months Ended
December 31, December 31,
2017 2016 2017 2016

Numerator:
Net income (loss) $ (399,887) $ 1,158,958 $ (2,217,393) $ (2,058,198)

Numerator for basis EPS (399,887) 1,158,958 (2,217,393) (2,058,198)

Effect of dilutive securities:
     Warrants - (959,200) - -
- (959,200) - -

Numerator for diluted EPS $ (399,887) $ 199,758 $ (2,217,393) $ (2,058,198)

Denominator:
Denominator for basic EPS - weighted-average shares 21,130,960 17,821,547 20,643,973 17,467,370

Effect of dilutive securities:
     Employee stock options - - - -
     Employee restricted stock units - - - -
     Warrants - 174,674 - -
Dilutive potential common shares - 174,674 - -
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions 21,130,960 17,996,221 20,643,973 17,467,370

     Basic EPS $ (0.02) $ 0.07 $ (0.11) $ (0.12)
     Diluted EPS $ (0.02) $ 0.01 $ (0.11) $ (0.12)

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. Refer to Note 5 for impairment discussion.

Derivative Financial Instruments

Foreign Exchange 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~~“Derivatives and ~~Hedging"~~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~~Company’s foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings.

~~Derivative Liabilities~~

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

Fair Value of Financial Instruments

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

•
Level 1. Observable inputs such as quoted prices in active markets;

•

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

•

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

~~No assets or liabilities were valued at fair value on a non-recurring basis as of December 31, 2017 or June 30, 2017.~~15

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

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

		Fair Value Measurements as of December 31, 2017 Using:
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	68,172	$	-
Contingent consideration obligations		-		-		-
Derivative warrant liabilities		-		-		-
Total	$	-	$	68,172	$	-

							Fair Value Measurements as of September 30, 2022 Using:
		Fair Value Measurements as of June 30, 2017 Using:					Level 1		Level 2		Level 3
		Level 1		Level 2		Level 3
Foreign exchange contract asset	$	-	$	166,629	$	-
Foreign exchange contract liability							$	—	$	1,421,980	$	—
Contingent consideration obligations		-		-		2,500,000		—		—		—
Derivative warrant liabilities		-		-		2,836,600
Total	$	-	$	166,629	$	5,336,600	$	—	$	1,421,980	$	—

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


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

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

~~Recently Adopted and Issued~~New Accounting Pronouncements

Accounting pronouncements not yet adopted

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

~~In August~~June 2016, the FASB issued Accounting Standards Update No. ~~2016-15,~~ ~~Classification~~2016-13, Measurement of ~~Certain Cash Receipts~~Credit Losses on Financial Instruments. The standard introduces new guidance for the accounting for credit losses on instruments within its scope, including trade and ~~Cash Payments ("ASU 2016-15"). This standard addresses eight specific cash flow issues with~~other receivables. In addition, the ~~objective~~FASB subsequently issued several amendments to this standard. All of ~~reducing the existing diversity in practice. ASU 2016-15 is~~these standards are effective for the Company ~~beginning~~on July 1, ~~2018~~2023 and ~~the Company is currently evaluating the impact that ASU 2016-15 will have on its consolidated financial statements.~~

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

~~In February 2016, the FASB issued Accounting Standards Update No. 2016-02:~~~~Leases~~("ASU 2016-02"). This standard amends various aspects of existing accounting guidance for leases, including the recognition of a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. This standard also introduces new disclosure requirements for leasing arrangements. For public business entities, ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective ~~approach, and provides for certain practical expedients.~~approach. The Company ~~is evaluating~~does not expect application of these standards to have a significant impact on its results of operations or financial position.

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 ~~impact~~Company’s right to use the underlying assets for the lease term and lease liabilities represent the net present value of the ~~adoption~~Company’s obligation to make payments arising from these leases. The lease liabilities are based on the present value of ~~ASU 2016-02~~fixed lease payments over the lease term using the implicit lease interest rate or, when unknown, the Company's incremental borrowing rate on ~~its~~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, 2022. The Company’s lease agreements do not contain material restrictive covenants.

The components of lease assets and liabilities as of September 30, 2022 are as follows:


Leases	Balance Sheet Classification:
Assets:
Right of use assets - operating leases	Other assets	$	4,014,379

Right of use assets - finance leases	Other assets	$	2,021,839
Accumulated amortization - finance leases	Other assets		(1,244,915	)
Right of use assets - finance leases, net	Other assets	$	776,924
Total lease assets		$	4,791,303

Liabilities:
Current portion of long-term debt, net	Current portion of long-term debt, net	$	754,818
Current lease liabilities	Accrued expenses and other current liabilities		1,233,912
Long-term debt, net, less current portion	Long-term debt, net, less current portion		313,605
Long-term lease liabilities	Other non-current liabilities		3,019,216
Total lease liabilities		$	5,321,551

The components of lease cost are as follows:


Lease cost:	Income Statement Classification:	Three Months Ended September 30, 2022
Operating lease cost	Cost of revenue	$	183,860
Operating lease cost	Selling, general and administrative expenses		55,334
Operating lease cost	Research and development expenses		136,197
Finance lease cost	Depreciation and amortization and interest expense		156,335
Total lease costs		$	531,726

Maturities of lease liabilities are as follows:


	Operating Leases			Finance Leases
2023	$	1,055,368		$	662,269
2024		1,293,732			320,703
2025		923,092			97,299
2026		756,049			36,804
2027		477,765			—
After 2027		122,223			—
Total lease payments		4,628,229			1,117,075
Less: Interest		(375,101	)		(48,652	)
Present value of lease liabilities	$	4,253,128		$	1,068,423

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


Operating lease remaining lease term	3.8 years
Operating lease discount rate		4.24	%
Finance lease remaining lease term	1.3 years
Finance lease discount rate		5.51	%
Cash paid for operating leases	$	349,947
Cash paid for finance leases		306,812

~~In May 2014,~~17

NOTE 4 - REVENUE RECOGNITION

The Company derives its revenue from 1) the ~~FASB issued Accounting Standards Update No. 2014-09,~~sale of seed, 2) milling and packaging services and 3) product licensing agreements.

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

Three Months Ended September 30,

2022

2021

Other product sales

$
19,837,787

$
14,905,402

Services

28,078

626,280

Total revenue

$
19,865,865

$
15,531,682

Other Product Sales

Revenue from ~~Contracts with Customers~~~~(``ASU 2014-09''). This standard outlines~~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 ~~single comprehensive model for entities to use in accounting for~~fulfillment cost, and we accrue those costs when the related revenue ~~arising from~~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 ~~supersedes most existing revenue recognition guidance under U.S. GAAP. The core principle~~undamaged state and must be resalable in the sole opinion of the ~~guidance~~Company to qualify for refund. Returns are only accepted on product received by August 31st 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, conditioning, and 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.

Payment Terms and Related Balance Sheet Accounts

Accounts receivable represent amounts that ~~an entity should recognize revenue when it transfers promised~~are payable to the Company by its customers subject only to the passage of time. Payment terms on invoices are generally 30 to 180 days for export customers and end of sales season (September 30th) for branded products sold within the United States. As the period between the transfer of goods and/or services to ~~customers~~the customer and receipt of payment is less than one year, the Company does not separately account for a financing component in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenues and cash flows arising fromits contracts with customers. ~~The FASB recently issued several amendments~~

Unbilled receivables represent contract assets that arise when the Company has partially performed under a contract but is not yet able to invoice the ~~standard, including clarifications~~customer until the Company has made additional progress. Unbilled receivables arose from the distribution and production agreements 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 ~~disclosure~~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, 2022, the Company recognized a gain on amounts previously written off to bad debt expense of ~~prior-period performance obligations and remaining performance obligations. Entities have the option~~$155,421.

Deferred revenue represents payments received from customers in advance of ~~using either a full retrospective or a modified retrospective approach for the adoption~~completion of the ~~new standard. However,~~Company's performance obligation. During the three months ended September 30, 2022, the Company recognized $0.6 million of revenue that was included in ~~August 2015,~~ the ~~FASB issued ASU 2015-14,~~~~Revenue from Contracts with Customers: Deferral of the Effective Date~~that defers the effective date of ASU 2014-09 for all public business entities by one year. As a result, ASU 2014-09 is effective for fiscal years beginning after December 15, 2017 including interim periods within that reporting period. Earlier application is permitted onlydeferred balance as of ~~annual reporting periods beginning after December 15, 2016, including interim reporting periods within~~June 30, 2022. During the three months ended September 30, 2021, the Company recognized $0.2 million of revenue that ~~reporting period. The Company is evaluating~~was included in the ~~impact~~deferred balance as of ~~the adoption of ASU 2014-09 on its consolidated financial statements and related disclosures.~~June 30, 2021.

NOTE ~~3 -~~5 – GOODWILL AND INTANGIBLE ASSETS

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

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

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

The following table summarizes the activity of goodwill for the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022 and the year ended June 30, ~~2017,~~2022, respectively.

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

Balance at
July 1, 2022

Additions

Impairment

Currency Translation Adjustment

Balance at
September 30, 2022

Goodwill

—

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


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

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

Intangible assets consist of the following:

		Balance at						Balance at
		July 1, 2017		Additions		Amortization		December 31, 2017	Balance at July 1, 2022		Additions		Amortization			Currency Translation Adjustment			Balance at September 30, 2022
Trade name	$	1,244,306	$	-	$	(42,240)	$	1,202,066	$	1,084,791	$	—	$	(49,481	)	$	(11,783	)	$	1,023,527
Customer relationships		1,258,163		-		(50,604)		1,207,559		5,499,815		—		(89,285	)		(269,916	)		5,140,614
Non-compete		102,035		-		(31,032)		71,003		—		—		—			—			—
GI customer list		78,803		-		(3,582)		75,221		42,983		—		(1,791	)		—			41,192
Supply agreement		1,153,415		-		(37,816)		1,115,599		775,241		—		(18,908	)		—			756,333
Distribution agreement		6,728,753		-		(192,250)		6,536,503
Production agreement		111,670		-		(111,666)		4
Grower relationships		1,858,616		-		(52,704)		1,805,912		1,331,581		—		(26,352	)		—			1,305,229
Intellectual property		21,725,539		-		(572,610)		21,152,929		23,035,925		—		(346,704	)		—			22,689,221
License agreement										1,986,598		—		(40,531	)		(112,436	)		1,833,631
Internal use software		677,779		-		(33,888)		643,891		338,893		—		(16,944	)		—			321,949
	$	34,939,079	$	-	$	(1,128,392)	$	33,810,687	$	34,095,827	$	—	$	(589,996	)	$	(394,135	)	$	33,111,696

		Balance at						Balance at
		July 1, 2016		Additions		Amortization		June 30, 2017	Balance at July 1, 2021		Additions		Amortization			Currency Translation Adjustment			Balance at June 30, 2022
Trade name	$	1,328,786	$	-	$	(84,480)	$	1,244,306	$	1,310,489	$	—	$	(203,009	)	$	(22,689	)	$	1,084,791
Customer relationships		1,359,371		-		(101,208)		1,258,163		6,302,591		—		(373,393	)		(429,383	)		5,499,815
Non-compete		198,999		-		(96,964)		102,035		5,058		—		(5,058	)		—			—
GI customer list		85,967		-		(7,164)		78,803		50,146		—		(7,163	)		—			42,983
Supply agreement		1,229,047		-		(75,632)		1,153,415		850,874		—		(75,633	)		—			775,241
Distribution agreement		7,113,253		-		(384,500)		6,728,753
Production agreement		335,002		-		(223,332)		111,670
Grower relationships		1,964,024		-		(105,408)		1,858,616		1,436,988		—		(105,407	)		—			1,331,581
Intellectual property		22,870,760		-		(1,145,221)		21,725,539		24,427,857		—		(1,391,932	)		—			23,035,925
In process research and development										—		—		—			—			—
License agreement										2,340,269		—		(172,004	)		(181,667	)		1,986,598
Internal use software		521,593		156,186		-		677,779		406,670		—		(67,777	)		—			338,893
	$	37,006,802	$	156,186	$	(2,223,909)	$	34,939,079	$	37,130,942	$	—	$	(2,401,376	)	$	(633,739	)	$	34,095,827

Amortization expense totaled ~~$555,471~~$589,996 and ~~$555,977~~$604,489 for the three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016,~~2021, respectively. ~~Amortization expense totaled $1,128,392 and $1,111,954 for the six months ended December 31, 2017 and 2016, respectively.~~

Estimated aggregate remaining amortization is as follows:

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


	2023		2024		2025		2026		2027		Thereafter
Amortization expense	$	1,856,468	$	2,298,113	$	2,267,090	$	2,181,123	$	2,130,239	$	22,378,663

NOTE 46 - PROPERTY, PLANT AND EQUIPMENT

Components of property, plant and equipment were as follows:

		December 31,		June 30,
		2017		2017
					As of September 30, 2022			As of June 30, 2022
Land and improvements	$	2,090,069	$	2,223,674	$	2,243,972		$	2,265,087
Buildings and improvements		6,784,964		6,401,277		8,065,798			8,119,960
Machinery and equipment		5,680,599		5,435,542		14,931,729			14,972,462
Vehicles		1,166,596		1,005,455		1,073,704			1,085,342
Leasehold improvements						552,810			552,810
Construction in progress		2,170,844		2,196,513		39,473			110,107
Total property, plant and equipment		17,843,072		17,262,461		26,907,486			27,105,768

Less: accumulated depreciation		(4,212,949)		(3,680,885)		(10,703,052	)		(10,234,099	)

Property, plant and equipment, net	$	13,630,123	$	13,581,576	$	16,204,434		$	16,871,669

Depreciation expense totaled ~~$315,510~~$606,748 and ~~$286,477~~$570,510 for the three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016,~~2021, respectively. ~~Depreciation expense totaled $630,842 and $565,197 for the six months ended December 31, 2017 and 2016, respectively.~~

NOTE 57 - DEBT

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

		December 31,		June 30,
		2017		2017	As of September 30, 2022			As of June 30, 2022
Working capital lines of credit
KeyBank	$	21,649,089	$	18,695,896
Current portion of working capital lines of credit
CIBC					$	15,778,748		$	12,804,611
National Australia Bank Limited		6,115,026		8,703,888		24,016,700			338,314
National Australia Bank Limited Overdraft Facility						313,687			—
Debt issuance costs		(171,512)		-		(310,759	)		(464,028	)
Total current portion of working capital lines of credit, net						39,798,376			12,678,897
Long-term portion of working capital lines of credit, less current portion
National Australia Bank Limited						—			21,703,286
Total long-term portion of working capital lines of credit						—			21,703,286
Total working capital lines of credit, net	$	27,592,603	$	27,399,784	$	39,798,376		$	34,382,183

Current portion of long-term debt
Keith facility (building loan) - National Australia Bank Limited	$	3,901	$	-
Keith facility (machinery & equipment loans) - National Australia Bank Limited		218,239		209,664
Unsecured subordinate promissory note		100,000		100,000
Promissory note - DuPont Pioneer		-		10,000,000
Secured real estate note - Conterra		112,711		-
Finance leases					$	754,818		$	804,309
Debt issuance costs		(77,563)		-		(1,079	)		(1,828	)
Secured equipment note - Conterra		18,473		-
Term Loan - National Australia Bank Limited						324,550			344,400
Machinery & equipment loans - National Australia Bank Limited						273,874			246,547
Machinery & equipment loans - Hyster						11,278			11,834
Vehicle loans - Ford Credit						40,341			40,341
Secured real estate note - Rooster						6,726,376			6,905,995
Debt issuance costs		(16,897)		-		(21,545	)		(34,815	)
Total current portion, net		358,864		10,309,664		8,108,613			8,316,783

Long-term debt, less current portion
Keith facility (building loan) - National Australia Bank Limited		444,713		499,524
Keith facility (machinery & equipment loans) - National Australia Bank Limited		545,285		596,631
Secured real estate note - Conterra		10,287,289		-
Finance leases						313,605			500,723
Debt issuance costs		(138,917)		-		—			(21	)
Secured equipment note - Conterra		2,081,527		-
Debt issuance costs		(16,706)		-
Term loan - National Australia Bank Limited						2,271,850			2,410,800
Machinery & equipment loans - National Australia Bank Limited						1,080,841			963,733
Machinery & equipment loans - Hyster						24,200			28,722
Vehicle loans - Ford Credit						77,343			88,583
Total long-term portion, net		13,203,191		1,096,155		3,767,839			3,992,540
Total debt, net	$	13,562,055	$	11,405,819	$	11,876,452		$	12,309,323

OnDecember 26, 2019, the Company entered into the CIBC Loan Agreement with CIBC, which originally provided for a $35.0 million credit facility, or the CIBC Credit Facility. The CIBC Loan Agreement was subsequently amended on September 22, ~~2015,~~2020, December 30, 2020, May 13, 2021, September 27, 2021, May 13, 2022, September 22, 2022 and October 28, 2022. As amended, the CIBC Loan Agreement provides for a total revolving loan commitment of $21.0 million. The following is a summary of certain terms of the CIBC Loan Agreement and 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. The Company ~~and KeyBank National Association ("KeyBank") entered into~~may also use a ~~credit and securities agreement~~portion of borrowings incurred under the CIBC Credit Facility to finance permitted acquisitions and related ~~agreements with respect~~costs.

•

All amounts due and owing, including, but not limited to, a $20,000,000 aggregate principal amount revolving credit facility (the "KeyBank Credit Facility"), the principal amount of which was increased to $35,000,000 pursuant to a Fourth Amendment Agreement (the "Fourth Amendment") on September 13, 2017, as more fully described below. Under the Fourth Amendment, all amounts ofaccrued and unpaid principal and interest due under the ~~KeyBank~~CIBC Credit Facility, ~~must~~will be ~~paid~~payable in full on ~~or before September 12, 2019.~~

~~On October 4, 2016, the Company and KeyBank entered into a Second Amendment Agreement effective September 30, 2016 (the "Second Amendment").~~ December 23, 2022.

•

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

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

On September 13, 2017, the Company and Key Bank entered into the Fourth Amendment, pursuant to which the maturity date was extended to September 12, 2019 and the principal amount that the Company may borrow, repay and reborrow was increased to $35.0 million, subject to a requirement that the Company maintain a reduced loan balance of (i) not more than $20 million for at least 30 consecutive days over the prior 12 months (measured each quarter on a trailing 12 month basis) and (ii) not more than $25 million for at least 60 consecutive days over the prior 12 months (measured each quarter on a trailing 12 month basis). The Fourth Amendment generally establishes a borrowing base of up to ~~85%~~85% of eligible domestic accounts receivable ~~and 90%~~(90% of eligible foreign accounts ~~receivable,~~receivable) plus up to ~~65%~~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 of $12,000,000, in each case, subject to lender reserves.

•

Loans ~~may be~~are based on a ~~Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.2%~~base rate plus 2.0% per ~~annum), generally at the Company's option.~~

annum. In the event of a default, at the option of ~~KeyBank,~~CIBC, the interest rate on all obligations owing will increase by 3%2% per annum over the rate otherwise applicable.

•

The Company is required to maintain one or more lockbox or cash collateral accounts at KeyBank, in KeyBank's name, which provide for the collection and remittance of all proceeds from sales of Company product (which is collateral for the KeyBank Credit Facility) on a daily basis. Subject to certain exceptions, the KeyBankCIBC Credit Facility is secured by a first priority perfected security interest in substantially all ~~the Company's now owned and after acquired tangible and intangible assets as well as the assets~~ of the ~~Company's domestic subsidiaries, which have guaranteed~~Borrowers’ (as defined in the ~~Company's obligations under the KeyBank Credit Facility.~~ CIBC Loan Agreement) assets (subject to certain exceptions), including intellectual property.

•

The ~~KeyBank Credit Facility is further secured by a lien on, and a pledge of, 65% of the stock of S&W Australia Pty Ltd., the Company's wholly-owned subsidiary. The KeyBank Credit~~CIBC Loan Agreement contains customary representations and warranties, affirmative and negative covenants and customary events of default that permit CIBC to accelerate the Company’s outstanding obligations under the CIBC Credit Facility, all as set forth in the CIBC Loan Agreement and related documents. The CIBC Credit Facility also contains customary affirmative and negative covenants and events of default.

The October 28, 2022 amendment to the CIBC Loan Agreement, among other things, increased (i) the total revolving loan commitment to $21.0 million from $18.0 million; and (ii) the borrowing base eligible inventory sublimit to $12.0 million from $9.0 million. As of September 30, 2022, the Company was in compliance with all covenants ~~at December 31, 2017. The outstanding balance on the KeyBank Credit Facility was $21,649,089 at December 31, 2017.~~

~~On October 1, 2012, the Company issued a five-year subordinated promissory note to IVS~~contained in the ~~principal amount~~CIBC Loan Agreement.

As of ~~$500,000 (the "IVS Note"), with a maturity date~~September 30, 2022, there was approximately $2.2 million of October 1, 2017. The IVS Note accrues interest at a rate equal to one-month LIBOR at closing plus 2%, which equals 2.2%. Interest is payable in five annual installments, in arrears, on October 1 of each year. Amortizing payments ofunused availability under the principal of $100,000 will also be made on each October 1, with any remaining outstanding principal and accrued interest payable on the maturity date of the IVS Note. The outstanding balance on the IVS Note was $100,000 at December 31, 2017.CIBC Credit Facility.

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

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

~~Secured Real Estate Note. The Company issued one Note~~(which was subsequently endorsed to Rooster) in the principal amount of ~~$10.4~~$10.4 million, ~~(the "Secured Real Estate Note") that~~which bears interest at 7.75% per annum and is secured by a first priority security interest in the property, plant and fixtures ~~(the "Real Estate Collateral")~~ located at the Company's ~~Five Points, California and~~ Nampa, Idaho production facilities and its Nampa, Idaho research facilities. In January 2021, the Company completed the sale of its Five Points facility which resulted in the Company making a one-time principal pay-down of $1,706,845 on the secured real estate note. The final semi-annual principal and ~~Arlington, Wisconsin research facilities (the "Facilities")~~interest payment of $454,185 was made on July 1, 2022. On September 22, 2022, the Company entered into an amendment to extend the Rooster Note’s maturity date to December 23, 2022. The Company is required to make a one-time final payment of approximately $6,969,668 on December 23, 2022. The ~~Secured Real Estate Note matures on November~~Company was not in compliance with the total debt coverage ratio as of June 30, ~~2020, which, subject~~2022; Rooster provided a waiver.
On August 15, 2018, the Company completed a sale and leaseback transaction with American AgCredit involving certain equipment located at the Company's Five Points, California and Nampa, Idaho production facilities. Due to ~~Conterra's approval, may~~its terms, the sale and leaseback transaction was required to be ~~extended to November 30, 2022. The Secured Real Estate Note bears interest~~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 ~~7.75% per annum.~~ the transaction:
•
The Company ~~has agreed~~sold the equipment to ~~make semi-annual payments of interest and amortized principal on~~American AgCredit for $2,106,395 million in proceeds. The proceeds were used to pay off in full a 20-year amortization schedule, for a combined payment of $515,711, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Company may prepay the Secured Real Estate Note, in whole or in part, at any time after it has paid a minimum of twelve months of interest on the Secured Real Estate Note.

~~Secured Equipment Note. The Company issued a second Note in~~note (in the principal amount of ~~$2.1 million (the "Secured Equipment Note"~~$2,081,527, plus accrued interest of $24,868) ~~that is~~held by Conterra, which had an interest rate of 9.5% per annum and was secured by, a first priority security interest in certain equipment not attached to real estate located at the Facilities. The Secured Equipment Note is also secured by the Real Estate Collateral. The Secured Equipment Note matures on November 30, 2019, which, subject to Conterra's approval, may be extended to November 30, 2020. The Secured Equipment Note bears interest at a rate of 9.5% per annum. The Company has agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule, for a combined payment of $118,223, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. The Company may prepay the Secured Equipment Note, in whole or in part, at any time.

•

The Company entered into a ~~default under one~~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 ~~Notes would constitute~~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 ~~default~~one-time principal pay down of $294,163 on the finance lease agreement.

Australian Facilities

S&W Australia has debt facilities with NAB, pursuant to an amended and restated finance agreement, entered into on October 24, 2022, as amended on October 25, 2022, or the NAB Finance Agreement, all of which are guaranteed by S&W Seed Company up to a maximum of AUD $15,000,000 (USD $9,736,500 as of September 30, 2022). As of September 30, 2022, approximately AUD $1.4 million (USD $0.9 million) remained available for use under the NAB Finance Agreement.

Pursuant to the amendments contained in the NAB Finance Agreement, among other ~~Note. On December 1, 2017,~~ things:

•

the ~~Company used~~ borrowing base line credit limit under S&W Australia’s seasonal credit facility was increased from AUD $32,000,000 (USD $20,771,200 as of September 30, 2022) to AUD $40,000,000 (USD $25,964,000 as of September 30, 2022), with a one-year maturity date extension to September 30, 2024;

•

the ~~proceeds~~overdraft credit limit under S&W Australia’s seasonal credit facility was increased from AUD $1,000,000 (USD $649,100 as of September 30, 2022) to AUD $2,000,000 (USD $1,298,200 as of September 30, 2022), with a one-year maturity date extension to September 29, 2023; and

•

the ~~Loan Transaction~~maturity date of S&W Australia’s master asset finance facility was extended by one year to ~~repay~~September 29, 2023.

The consolidated debt facilities under the ~~Pioneer Note.~~NAB Finance Agreement provide for up to an aggregate of AUD $49,000,000 (USD $31,805,900 as of September 30, 2022) of credit, and include the following:

~~SGI~~

•

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

~~The 2016 NAB Facilities, as currently in effect, comprises~~ two ~~distinct~~ facility lines: (i) an overdraft facility ~~(the "Overdraft Facility"),~~ having a credit limit of AUD ~~$980,000~~$2,000,000 (USD ~~$764,596 at December 31, 2017)~~$1,298,200 as of September 30, 2022) and (ii) a borrowing base ~~facility (the "Borrowing Base Facility"),~~line having a credit limit of AUD ~~$12,000,000~~$40,000,000 (USD ~~$9,362,400 at December 31, 2017).~~

~~The Borrowing Base Facility permits SGI to borrow funds for periods~~$25,964,000 as of up to 180 days, at SGI's discretion, provided that the term is consistent with its trading terms. Interest for each drawdown is set at the time of the drawdown as follows: (i) for Australian dollar drawings, based on the Australian Trade Refinance Rate plus 1.5% per annum and (ii) for foreign currency drawings, based on the British Bankers' Association Interest Settlement Rate for the relevant foreign currency for the relevant period, or if such rate is not available, the rate reasonably determined by NAB to be the appropriate equivalent rate, plus 1.5% per annum.September 30, 2022). As of ~~December 31, 2017,~~September 30, 2022, the ~~Borrowing Base Facility~~borrowing base line accrued interest on Australian dollar drawings at approximately ~~5.07%~~6.43% per annum calculated daily. The ~~Borrowing Base Facility is secured by a lien on all the present and future rights, property and undertakings of SGI, the mortgage on SGI's Keith, South~~borrowing base line permits S&W Australia ~~property and the Company's corporate guarantee (up to a maximum of AUD $15,000,000).~~

~~The Overdraft Facility permits SGI~~ to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in ~~arrears~~.arrears. As of ~~December 31, 2017,~~September 30, 2022, the ~~Overdraft Facility~~borrowing base line accrued interest at approximately ~~6.77%~~7.22% per annum calculated daily.

~~For both the Overdraft Facility and the Borrowing Base Facility, interest~~ As of September 30, 2022, AUD $37,483,264 (USD $24,330,387) was outstanding under S&W Australia’s seasonal credit facility with NAB, which is payable each month in arrears. In the event of a default, as defined in the NAB Facility Agreement, the principal balance due under the facilities will thereafter bear interest at an increased rate per annum above the interest rate that would otherwise have been in effect from time to time under the terms of each facility (~~i.e.~~~~, the interest rate increases by 4.5% per annum under the Borrowing Base Facility and the Overdraft Facility rate increases to 13.92% per annum upon the occurrence of an event of default).~~

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

~~In January 2015, NAB and SGI entered into~~S&W Australia.

•

S&W Australia has a ~~new business markets -~~ flexible term rate loan, ~~(the "Keith Building Loan")~~ in the amount of AUD ~~$650,000~~$4,000,000 (USD ~~$507,130 at December 31, 2017)~~$2,596,400 as of September 30, 2022). ~~Since entering into~~Required annual principal payments of AUD $500,000 (USD $324,550 as of September 30, 2022) on the ~~Keith Building Loan, the limit has been changed~~term loan commenced on ~~three occasions,~~November 30, 2020, with the ~~current limit being AUD $675,000 (USD $526,635 at December~~remainder of any unpaid balance becoming due on May 31, ~~2017), and a separate machinery and equipment facility (the "Keith Machinery and Equipment Facility") has been added with~~2026. Monthly interest amounts outstanding under the limit being changed on two occasions, the current limit being AUD $702,779 (USD $548,308) at December 31, 2017. At December 31, 2017, the principal balance on the Keith Building Loan was AUD $575,000 (USD $448,615) with unused availability of AUD $100,000 (USD $78,021). At December 31, 2017, the principal balance on the Keith Machinery and Equipment Facility was AUD $674,132 (USD $525,957) with no unused availability. In February 2016, NAB and SGI also entered into a master asset finance facility (the "Master Assets Facility"). At December 31, 2017, the principal balance on the Master Assets Facility was AUD $304,493 (USD $237,566) with unused availability of AUD $445,507 (USD $347,585). The Master Asset Facility has various maturity dates through 2021 and have interest rates ranging from 4.79% to 5.31%.

~~The Keith Building Loan and Keith Machinery and Equipment Facility~~term loan are used for the construction of a building on SGI's Keith, South Australia property, purchase of adjoining land and for the machinery and equipment for use in the operations of the building. The Keith Building Loan matures on November 30, 2024. The interest rate on the Keith Building Loan varies from pricing period to pricing period (each such period approximately 30 days), based on the weighted average of a specified basket of interest rates (6.11% as of December 31, 2017). Interest is payable each month in arrears. The Keith Machinery and Equipment Facility bears interest, payable in arrears ~~based on the Australian Trade Refinance Rate~~at a floating rate quoted by NAB atfor the ~~time of the drawdown,~~applicable pricing period, plus ~~2.9%~~2.6%. The Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the facility agreement. They areterm loan is secured by a lien on all the present and future rights, property and undertakings of ~~SGI,~~S&W Australia.

•

S&W Australia finances certain equipment purchases under a master asset finance facility with NAB. The master asset finance facility has various maturity dates through 2029 and have interest rates ranging from 2.86% to 6.61%. The credit limit under the facility is AUD $3,000,000 (USD $1,947,300 as of September 30, 2022). As of September 30, 2022, AUD $2,087,067 (USD $1,354,715) 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 under its loan agreement with NAB as of September 30, 2022. Pursuant to the NAB Finance Agreement in effect after September 30, 2022, the Company must comply with an undertaking that requires the Company to maintain a net related entity position of not more than AUD $25,000,000. Accordingly, the Company’s ability to comply with this undertaking is subject to fluctuations in foreign currency conversion rates, which are outside of the Company’s control. Due to recent fluctuations in foreign currency conversion rates, the Company is currently not in compliance with this undertaking. Although the Company is currently in discussions with NAB to revise how compliance with this undertaking is measured, there can be no assurances that the Company will be able to secure an amendment to the NAB Finance Agreement or regain compliance with this undertaking.

MFP Loan Agreement

On September 22, 2022, the Company’s largest stockholder, MFP Partners, L.P., or MFP, provided a letter of credit, issued by JPMorgan Chase Bank, N.A. for the account of MFP, with an initial face amount of $9,000,000, or the MFP Letter of Credit, for the benefit of CIBC, as additional collateral to support the Company’s obligations under the CIBC Loan Agreement. The MFP Letter of Credit matures on January 23, 2023, one month after the maturity date of the CIBC Loan Agreement. On October 28, 2022 MFP amended the MFP Letter of Credit to increase the face amount from $9,000,000 to $12,000,000, in order to provide collateral to support the Company's ~~corporate guarantee~~obligations under the CIBC Loan Agreement.

Concurrently, on September 22, 2022, the Company entered into a Subordinate Loan and Security Agreement, or the MFP Loan Agreement, with MFP, pursuant to which any draw CIBC may make on the MFP Letter of Credit will be deemed to be a ~~mortgage~~term loan advance made by MFP to the Company. The MFP Loan Agreement initially provided for up to $9,000,000 of term loan advances. On October 28, 2022, the MFP Loan Agreement was amended to increase the maximum amount of term loan advances available to the Company under the MFP Loan Agreement from $9,000,000 to $12,000,000. As of September 30, 2022, no amounts were outstanding under the MFP Loan Agreement.

The MFP Loan Agreement will mature on ~~SGI's Keith, South Australia property.~~November 30, 2025. Pursuant to the MFP Loan Agreement, the Company will pay to MFP a cash fee through the maturity date of the MFP Letter of Credit equal to 3.50% per annum on all amounts remaining undrawn under the MFP Letter of Credit. In the event any term advances are deemed made under the MFP Loan Agreement, such advances will bear interest at a rate per annum equal to term SOFR (with a floor of 1.25%) plus 9.25%, half of which will be payable in cash on the last day of each fiscal quarter and half of which will accrue as payment in kind interest payable on the maturity date, unless, with respect to any quarterly payment date, the Company elects to pay such interest in cash.

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

On September 22, 2022, in connection with the Company's entry into the MFP Loan Agreement, the Company issued to MFP a warrant, or the MFP Warrant, to purchase 500,000 shares of the Company’s Common Stock, at an exercise price of $1.60 per share (subject to adjustment in connection with any stock dividends and splits, distributions with respect to common stock and certain fundamental transactions). The MFP Warrant will expire five years from the date of issuance. The $146,474 fair value of the warrant was determined using the Black-Scholes-Merton model and recorded in the consolidated statements of stockholders’ equity. The fair value of the MFP Warrant will be recognized as a component of interest expense over the term of the MFP Loan Agreement.

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

Fiscal Year Amount

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


Fiscal Year	Amount
2023	$	7,949,167
2024		986,564
2025		683,719
2026		1,941,163
2027		156,501
Thereafter		181,962
Total	$	11,899,076

~~NOTE 6 - SENIOR CONVERTIBLE NOTES AND WARRANTS~~

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

~~Debentures~~

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

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

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

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

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

~~Warrants~~

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

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

~~Accounting for the Conversion Option and Warrants~~

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

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

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

~~NOTE 7 - WARRANTS~~

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

Exercise Price

Expiration

Outstanding as

Outstanding as

Issue Date

Per Share

Date

of June 30, 2017

New Issuances

Expired

of December 31, 2017

Warrants

Dec 2014

$
4.32

Jun 2020

2,699,999

-

-

2,699,999

2,699,999

-

-

2,699,999

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

Exercise Price

Expiration

Outstanding as

Outstanding as

Issue Date

Per Share

Date

of June 30, 2016

New Issuances

Expired

of June 30, 2017

Underwriter warrants

May 2012

$
6.88

Feb 2017

50,000

-

(50,000)

-
Warrants

Dec 2014

$
4.53

Jun 2020

2,699,999

-

-

2,699,999

2,749,999

-

(50,000)

2,699,999

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

NOTE 8 - FOREIGN CURRENCY CONTRACTS

The ~~Company's~~Company’s subsidiary, ~~SGI,~~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 ~~$4,340,928~~$17,149,868 at ~~December 31, 2017 and their~~September 30, 2022, with maturities ~~range~~ranging from ~~January 2018~~October 2022 to June ~~2018.~~2023.

The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract ~~assets~~liabilities totaled ~~$68,172~~$1,421,980 at ~~December 31, 2017~~September 30, 2022 and ~~$166,629~~foreign currency contract liabilities totaled $996,106 at June 30, ~~2017.~~2022. The Company recorded a loss on foreign exchange contracts of ~~$61,560~~$503,985 and ~~$249,728, which is reflected in cost of revenue, for the three months ended December 31, 2017 and 2016, respectively. The Company recorded~~ a loss on foreign exchange contracts of ~~$100,864~~$238,803, for the three months ended September 30, 2022 and ~~$147,356,~~2021, respectively, which isare reflected in cost of ~~revenue for the six months ended December 31, 2017 and 2016, respectively.~~revenue.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

~~Commitments~~Contingencies

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

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

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

~~Contingencies~~

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

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 10 ~~- RELATED PARTY TRANSACTIONS~~– EQUITY

~~Glen D. Bornt,~~

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 $14.0 million through B. Riley as its sales agent. The Company agreed to pay B. Riley a ~~member~~commission of 3.5% of the ~~Company's Board~~gross proceeds of ~~Directors until January 9, 2018, is~~ the ~~founder and President~~sales price per share of ~~Imperial Valley Milling Co. ("IVM"). He is IVM's majority shareholder and a member~~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 ~~Board of Directors. Glen D. Bornt is also a majority shareholder of Kongal Seeds Pty. Ltd. ("Kongal"). IVM had a 15-year supply agreement with IVS, and this agreement was assigned by IVS~~common stock pursuant to the ATM Agreement.

On September 27, 2021, the Company ~~when it purchased the assets of IVS in October 2012. IVM contracts with alfalfa seed growers in California's Imperial Valley and sells its growers' seed~~entered into an amendment to the ATM Agreement, under which the aggregate offering price was increased from $14.0 million to $17.1 million. For the 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 ~~a supply agreement. Under~~ the ~~terms of the supply agreement, IVM's entire certified and uncertified alfalfa seed production must be offered and sold~~ATM Agreement. No sales were made pursuant to the ~~Company, and~~ATM Agreement during the three months ended September 30, 2022.

On May 17, 2022, the Company ~~has~~amended the ~~exclusive option~~ATM Agreement to ~~purchase all or any portion~~increase the aggregate offering price to $24.6 million. As of ~~IVM's seed production. The~~September 30, 2022, the Company ~~paid $1,997,256 to IVM during~~had $6.3 million remaining under the six months ended December 31, 2017. Amounts due to IVM totaled $115,582 and $326,941 at December 31, 2017 and June 30, 2017, respectively. The Company paid $0 to Kongal during the six months ended December 31, 2017. Amounts due to Kongal totaled $1,582 and $4,753 at December 31, 2017 and June 30, 2017, respectively.ATM Agreement.

On ~~July 19, 2017,~~October 14, 2021, the Company entered into a Securities Purchase Agreement with ~~certain purchasers, including~~ MFP Partners, L.P. ~~("MFP")~~, aor MFP, the Company’s largest stockholder, of the Company, and certain entities related to Wynnefield Capital Management LLC (collectively, "Wynnefield"), pursuant to which MFP purchased approximately $3.7 million of shares of its common stock and Wynnefield purchased approximately $3.0 million of shares of its common stock. Each of MFP and Wynnefield is a beneficial owner of more than 5% of the Company's common stock. Alexander C. Matina, a member of the Company's Board, is Vice President, Investments of MFP.

~~On October 11, 2017, the Company entered into a Securities Purchase Agreement~~Starlight 4, LLLP, an entity affiliated with Mark W. Wong, the ~~Company's President and~~Company’s Chief Executive Officer and a member of its board of directors, Alan D. Willits, a member of its board of directors, and Charles B. Seidler and Robert Straus, each then a member of its board of directors, pursuant to which the Company sold and issued an aggregate of ~~75,000~~1,847,343 shares of its ~~Common Stock~~common stock at a purchase price of ~~$3.50~~$2.73 per share, for aggregate gross proceeds of ~~$262,500.~~

~~On December 22, 2017, the Company completed the closing of its previously announced rights offering. At the closing, the Company sold and issued an aggregate of 2,594,923 shares of its Common Stock at~~approximately $5.0 million. Alexander C. Matina, a subscription price of $3.50 per share pursuant to the exercise of subscriptions and oversubscriptions in the rights offering from its existing stockholders. Pursuant to an Investment Agreement, dated October 3, 2017, between the Company and MFP, MFP agreed to purchase, at the subscription price, allmember of the ~~shares not purchased in the Rights Offering (the "Backstop Commitment"). Accordingly, on December 22, 2017, the Company and MFP completed the closing~~Company’s board of directors, is Vice President of Investments of the ~~Backstop Commitment, in which the Company sold and issued 905,077 shares~~general partner of ~~its Common Stock to~~ MFP. ~~Combined, the Company sold and issued an aggregate of 3,500,000 shares of its common stock for aggregate gross proceeds of $12.25 million.~~

NOTE 11 - EQUITY-BASED COMPENSATION

~~2009~~ Equity Incentive ~~Plan~~Plans

In October 2009 and January 2010, the Company's ~~Board~~board of ~~Directors~~directors and stockholders, respectively, approved the 2009 Equity Incentive Plan, ~~(as~~or as amended and/or restated from time to time, the ~~"2009 Plan").~~2009 Plan. The ~~plan~~2009 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~~board of ~~Directors~~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 2009 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 ~~1,250,000~~1,700,000 shares. In September ~~2013~~2015 and December ~~2013,~~2015, the Company's ~~Board~~board of ~~Directors~~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~~2,450,000 shares.

In ~~September 2015~~December 2018 and ~~December 2015,~~January 2019, the Company's ~~Board~~board of ~~Directors~~directors and stockholders, respectively, approved the ~~amendment~~2019 Equity Incentive Plan, or the 2019 Plan, as a successor to and ~~restatement~~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 ~~including an~~to increase in the number of shares available for ~~issuance~~issues as grants and awards by 4,000,000 shares. Subject to adjustment for certain changes in the Company's capitalization, the aggregate number of shares of the Company's common stock that may be issued under the 2019 Plan, as amended, will not exceed 8,243,790 shares, which is the sum of (i) 4,000,000 new shares, (ii) 2,750,000 additional shares that were reserved as of the effective date of the 2019 Plan, (iii) 350,343 shares (the number of unallocated shares that were available for grant under the 2009 Plan as of January 16, 2019, the effective date of the 2019 Plan), and (iv) 1,143,447 shares, which is the number of shares subject to ~~2,450,000 shares.~~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 ~~2009 Plan~~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 ~~2009 Plan~~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%~~10% of voting stock must have an exercise price equal to or greater than ~~110%~~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~~Weighted-average assumptions used in the Black-Scholes-Merton model are set forth below:

December 31,
2017 2016

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


	As of September 30, 2022	As of September 30, 2021
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 ~~six~~three months ended ~~December 31, 2017,~~September 30, 2022 and 2021, the Company ~~granted 62,755~~did not grant options to its directors, certain members of the executive management team and other ~~employees at exercise prices ranging from $3.00 to $3.10. These options vest in either quarterly or annual periods over three years, and expire ten years from the date of grant.~~employees.

A summary of stock option activity for the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022 and the year ended June 30, ~~2017~~2022 is presented below:

				Weighted-
			Weighted -	Average			Number Outstanding			Weighted - Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
			Average	Remaining		Aggregate
	Number		Exercise Price	Contractual		Intrinsic
	Outstanding		Per Share	Life (Years)		Value
Outstanding at June 30, 2016	1,021,418	$	5.14	4.2		142,381
Outstanding at June 30, 2021								3,776,568		$	2.65		8.0	$	3,962,766
Granted	230,610		4.19	-		-		994,725			2.63
Exercised	(232,000)		4.20	-		-		(38,774	)		2.33
Canceled/forfeited/expired	(29,500)		5.95	-		-		(95,419	)		2.82
Outstanding at June 30, 2017	990,528		5.12	4.3		100,344
Outstanding at June 30, 2022								4,637,100			2.64		6.6		—
Granted	62,755		3.08	-		-		—			—
Exercised	-		-	-		-		—			—
Canceled/forfeited/expired	(190,000)		6.99	-		-		(125,307	)		2.62
Outstanding at December 31, 2017	863,283		4.56	6.5		72,914
Options vested and exercisable at December 31, 2017	632,416		4.82	5.6		19,183
Options vested and expected to vest as of December 31, 2017	862,808	$	4.56	6.5	$	72,496
Outstanding at September 30, 2022								4,511,793			2.64		5.8		—

Options vested and exercisable at September 30, 2022								3,527,758		$	2.68		5.1	$	—
Options vested and expected to vest as of September 30, 2022								4,507,581			2.64		5.8		—

~~The weighted average grant date fair value of~~There were no options granted ~~and outstanding at December 31, 2017 was $1.58.~~for the three months ended September 30, 2022. At ~~December 31, 2017,~~September 30, 2022, the Company had ~~$302,942~~$796,441 of unrecognized stock compensation expense, net of estimated forfeitures, related to the options under the 2009 Plan and 2019 Plan, which will be recognized over the weighted average remaining service period of ~~2.23~~1.72 years. The Company settles employee stock option exercises with newly issued shares of common stock.

~~During the year ended June 30, 2017, the Company issued 77,275~~There were no restricted stock units ~~to its directors, certain members of~~granted during the executive management team, and other employees. The restricted stock units have varying vesting periods ranging from immediate vesting to annual installments over a three-year period. The fair value of the awards totaled $374,530 and was based on the closing stock price on the date of grants.

~~During the six~~three months ended ~~December 31, 2017, the Company issued 38,114 restricted stock units to its certain members of the executive management team~~September 30, 2022 and other employees. The restricted stock units vest in either quarterly or annual periods and vest over three-years. The fair value of the awards totaled $116,486 and was based on the closing stock price on the date of grants.2021.

The Company recorded ~~$311,067~~$173,994 and ~~$240,241~~$171,524 of stock-based compensation expense associated with grants of restricted stock units during the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016,~~2021, respectively. A summary of activity related to non-vested restricted stock units is presented below:

Six Months Ended December 31, 2017
				Weighted -
	Number of		Weighted-	Average	Number of Nonvested Restricted Stock Units				Weighted-Average Grant Date Fair Value				Weighted-Average Remaining Contractual Life (Years)
	Nonvested		Average	Remaining
	Restricted		Grant Date	Contractual
	Stock Units		Fair Value	Life (Years)
Beginning nonvested restricted units outstanding	120,971	$	5.59	1.5
Nonvested restricted units outstanding at June 30, 2021								361,570			$	2.51			1.3
Granted	38,114		3.06	1.7		304,421				2.78				2.4
Vested	(90,066)		5.68	-		(391,036	)			2.62				—
Forfeited	(3,680)		-	-		(7,036	)			2.35				—
Ending nonvested restricted units outstanding	65,339	$	4.06	1.6
Nonvested restricted units outstanding at June 30, 2022								267,919				2.66			1.2
Granted								—				—			—
Vested								(30,332	)			2.44			—
Forfeited								(8,750	)			2.50			—
Nonvested restricted units outstanding at September 30, 2022								228,837				2.70			1.2

At ~~December 31, 2017,~~September 30, 2022, the Company had ~~$220,169~~$251,317 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of ~~1.6~~1.19 years.

At ~~December 31, 2017,~~September 30, 2022, there were ~~526,603~~2,691,979 shares available under the ~~2009~~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 ~~December 31, 2017~~September 30, 2022 and ~~2016,~~2021, totaled ~~$193,571~~$456,112 and ~~$296,235,~~$394,312, respectively. ~~Stock-based compensation expense recorded~~

NOTE 12 – SERIES B CONVERTIBLE PREFERRED STOCK

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

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

The Series B Preferred Stock is initially convertible into shares of Common Stock at the rate of 1,000 shares of Common Stock per share of Series B Preferred Stock, at any time at the option of the holder of such shares, subject to the following limitations: (i) unless a holder was a stockholder of the Company as of February 18, 2022 (in which case such limitation shall not apply), the Company shall not affect any conversion of Series B Preferred Stock to the extent that, after giving effect to an attempted conversion, such holder, together with its affiliates, would beneficially own a number of shares of Common Stock in excess of 4.99% of the total number of shares of Common Stock outstanding immediately after giving effect to the issuance of such shares, which limit may be decreased or increased (not to exceed 19.99%) upon written notice to the Company, with any increase not becoming effective until at least 61 days after such notice; (ii) a holder may not acquire shares of Common Stock upon conversion of Series B Preferred Stock if such conversion would result in the total number of shares of Common Stock issued or issuable upon conversion or exercise of the securities issued pursuant to the Purchase Agreement to exceed 7,777,652 shares, or 19.99% of the outstanding shares of Common Stock as of the date of the Purchase Agreement; and (iii) to the extent Nasdaq Listing Rule 5635(c) is applicable or deemed applicable to a holder, such holder may not acquire shares of Common Stock upon conversion of Series B Preferred Stock that would exceed the maximum number of all shares of Common Stock that could be issued by the Company to such holder without requiring stockholder approval pursuant to Nasdaq Listing Rule 5635(c). Upon receiving shareholder approval of a proposal to be submitted to the shareholders of the Company for the ~~six months ended December 31, 2017~~purpose of approving the transactions contemplated by the Purchase Agreement, pursuant to Nasdaq Listing Rules 5635(a), (c) and ~~2016, totaled $451,033~~(d), the foregoing limitations in (ii) and ~~$578,659, respectively.~~(iii) above shall no longer have any force or effect.

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

~~The below table represents supplemental information~~A holder of Series B Preferred Stock is entitled to receive cumulative cash dividends of 5% per annum, payable semi-annually in arrears on the last day of March and September of each calendar year. In lieu of paying such cash dividends, the Company may elect to add an amount to the ~~Company's~~Stated Value, provided that the dividend rate shall be 7% per annum, calculated semi-annually in arrears on the last day of March and September of each calendar year. A holder of Series B Preferred Stock is also entitled to receive any dividend declared and paid to holders of the Common Stock as if such Series B Preferred Stock had been converted into Common

Stock. In addition, a holder of Series B Preferred Stock is entitled to a liquidation preference equal to the greater of (i) the Stated Value, plus any cash dividends accrued but unpaid thereon, and (ii) the payment such holder would have received had the Series B Preferred Stock been converted into shares of Common Stock immediately prior to such liquidation event.

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

The Series B Preferred Stock is non-voting except with respect to certain matters affecting the Series B Preferred Stock. In addition, the approval of a majority of the outstanding shares of Series B Preferred Stock is required if after February 18, 2022 the Company seeks to issue Common Stock, pursuant to the Sales Agreement, dated September 27, 2021, between the Company and B. Riley Securities, for cumulative gross proceeds in excess of $6.1 million.

Since the holder has the option to redeem their shares of Series B Preferred Stock at any time after August 18, 2025, the stock is considered contingently redeemable and, accordingly, is classified as temporary equity, net of the relative fair value assigned to the warrant of $361,729 recorded in the unaudited consolidated ~~statements~~statement of ~~cash flows for non-cash activities during~~stockholders’ equity as of September 30, 2022. Over the ~~six months ended December 31, 2017~~initial 42-month term the $4,638,521 relative fair value of the Series B Preferred Stock will be accreted to its redemption value of $5,000,250. Dividends will be accrued and ~~2016, respectively.~~recognized through retained earnings.

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

34The following summarizes changes to our Series B Preferred Stock:


Balance at June 30, 2021	$	—
Issuance of preferred stock		4,638,521
Dividends accrued		127,541
Accretion of discount for warrants		38,757
Balance at June 30, 2022		4,804,819
Issuance of preferred stock		—
Dividends accrued		88,223
Accretion of discount for warrants		25,838
Balance at September 30, 2022	$	4,918,880

NOTE 13 – SUBSEQUENT EVENTS

On October 24, 2022, S&W Australia and NAB entered into an amended and restated finance agreement, pursuant to which, among other things:

•

the borrowing base line credit limit under S&W Australia’s seasonal credit facility was increased from AUD $32,000,000 (USD $20,771,200 as of September 30, 2022) to AUD $40,000,000 (USD $25,964,000 as of September 30, 2022), with a one-year maturity date extension to September 30, 2024;

•

the overdraft credit limit under S&W Australia’s seasonal credit facility was increased from AUD $1,000,000 (USD $649,100 as of September 30, 2022) to AUD $2,000,000 (USD $1,298,200 as of September 30, 2022), with a one-year maturity date extension to September 29, 2023; and

•

the maturity date of S&W Australia’s master asset finance facility was extended by one year to September 29, 2023.

The NAB Finance Agreement, inclusive of the October 25, 2022 amendment, includes an undertaking that requires the Company to maintain a net related entity position of not more than AUD $25,000,000. Accordingly, the Company’s ability to comply with this undertaking is subject to fluctuations in foreign currency conversion rates, which are outside of the Company’s control. Due to recent fluctuations in foreign currency conversion rates, the Company is currently not in compliance with this undertaking. Although the Company is currently in discussions with NAB to revise how compliance with this undertaking is measured, there can be no assurances that the Company will be able to secure an amendment to the NAB Finance Agreement or regain compliance with this undertaking.

On October 28, 2022, the Company amended the CIBC Loan Agreement, which increased (i) the total revolving loan commitment provided under the CIBC Loan Agreement from $18,000,000 to $21,000,000 and (ii) the borrowing base eligible inventory sublimit from $9,000,000 to $12,000,000.

On October 28, 2022, MFP amended the MFP Letter of Credit to increase the face amount from $9,000,000 to $12,000,000, as additional collateral to support the Company’s obligations under the CIBC Loan Agreement.

Concurrently, on October 28, 2022, the Company amended the MFP Loan Agreement to increase the maximum amount of term loan advances available to the Company from $9,000,000 to $12,000,000. On October 28, 2022, in connection with the amendment to the MFP Loan Agreement, the Company issued to MFP a warrant, or the Additional MFP Warrant, to purchase 166,700 shares of the Company’s Common Stock, at an exercise price of $1.60 per share (subject to adjustment in connection with any stock dividends and splits, distributions with respect to common stock and certain fundamental transactions). The Additional MFP Warrant will expire five years from the date of issuance.

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

Item 2. ~~Management's~~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"~~“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~~under the heading “Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Factors that could cause or contribute to these differences include those discussed in our Annual Report on Form 10-K for the fiscal year ended June 30, ~~2017,~~2022, particularly in Part I, Item ~~1A, "Risk~~1A., “Risk Factors."”

Executive Overview

~~Founded in 1980 and headquartered in Sacramento, California, we~~We are a global multi-crop, middle-market agricultural company. ~~Grounded in our historical expertise and what we believe is our present leading position~~We are market leaders in the breeding, production and sale of alfalfa seed ~~we continue to build towards our goal of being recognized as the world's preferred proprietary forage, grain~~ and ~~specialty crop seed company. In addition to our primary activities in alfalfa seed, we have recently expanded our product portfolio by adding hybrid~~ sorghum and sunflower seed, which complement our alfalfa seed offerings by allowing us to leverage our infrastructure, research and development expertise and our distribution channels, as we begin to diversify into what we believe are higher margin opportunities.seed. We also ~~continue~~have a commercial market presence in sunflower, wheat and pasture seed and maintain an active stevia development program.

Our seed platform develops and supplies high quality germplasm designed to ~~conduct~~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 fiscal 2023.

Founded in 1980, we began our ~~stevia breeding program, having three patents granted and one additional patent application pending.~~

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

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

Weyears we have ~~accomplished these expansion initiatives~~built a diversified, global agricultural platform through a combination of organic growth and strategic acquisitions ~~foremost among them:~~

~~the acquisition in July 2011 of certain intangible assets, including the customer information, related to the field seed~~ and small grain business of Genetics International, Inc., which had previously operated in the Middle East and North Africa ("MENA") and which began our transition into selling directly to MENA distributors;
~~the~~collaborations, including:
•
Our 2012 acquisition of Imperial Valley Seeds, Inc. ~~("IVS") in October 2012,~~, 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;
~~the~~
•
Our 2012 acquisition of a portfolio of dormant alfalfa ~~seed~~ germplasm, ~~in August 2012 to launch~~which launched our entry into the dormant alfalfa market;
~~the~~
•
Our 2013 acquisition of Seed Genetics International Pty Ltd (now S&W Seed Company Australia Pty Ltd, or S&W Australia), the leading ~~local~~ producer of non-dormant alfalfa seed in South Australia, ~~Seed Genetics International Pty Ltd ("SGI")~~which made us the largest non-dormant alfalfa seed company in ~~April 2013, which greatly expanded our~~the world, with production capabilities ~~and geographic diversity;~~
~~the~~in both hemispheres;
•
Our 2014 acquisition of ~~the~~ alfalfa production and research facility assets and conventional (non-GMO) alfalfa germplasm from ~~DuPont~~ Pioneer Hi-Bred International, Inc., or Pioneer (now a ~~wholly-owned~~ subsidiary of ~~E.I. du Pont de Nemours~~Corteva Agriscience, Inc., or Corteva), which substantially broadened and ~~Company ("DuPont Pioneer") in December 2014, thereby substantially expanding upon~~improved our ~~initial entrance into the~~ dormant alfalfa ~~seed market that began in 2012~~germplasm portfolio and ~~enabling us to greatly expand~~deepened our production, ~~and~~ research and product development capabilities; ~~and~~
~~the~~
•
Our 2016 acquisition ~~in May 2016,~~ of the ~~assets~~business and ~~business~~assets of SV Genetics Pty Ltd, ~~("SV Genetics"),~~ a ~~private Australian company specializing in the breeding and licensing~~developer of proprietary hybrid sorghum and sunflower seed germplasm, which ~~represents~~expanded our ~~initial effort~~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 ~~diversify~~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 ~~portfolio beyond~~offerings in Australia and strengthened our Australian sales team and distribution relationships;
•
Our 2020 collaboration with ADAMA Ltd., or ADAMA, a subsidiary of China National Chemical Engineering Co Ltd., or ChemChina, to bring to the U.S. sorghum market the Double Team™ grassy weed management system, consisting of ADAMA’s proprietary herbicides and our non-GMO, herbicide tolerant sorghum hybrids; and
29
•
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.
In 2019, we restructured our relationship with Corteva, under which, among other things:
•
Corteva received a fully pre-paid, exclusive license to produce and distribute certain of our alfalfa ~~seed breeding~~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.
•
We assigned to Corteva grower production contract rights, and Corteva assumed grower production contract obligations, related to the licensed and certain other alfalfa varieties.
•
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.
Strategic Review
We recently undertook a strategic review of our operations and future growth opportunities to determine areas we believe are key centers of value, including our sorghum technology operations (led by Double Team™, our non-GMO herbicide tolerant sorghum solution), international forage operations, U.S. forage operations and our specialty crops.
With respect to specialty crops, we intend to initially focus on stevia ~~R&D.~~

and camelina. We believe that an opportunity exists to bring to market new stevia varieties that can both meet consumer taste requirements and have yield quality that would enable farmers to profitably grow stevia in North and South America. We plan to leverage our ~~2013 combination~~proprietary stevia germplasm to form collaborations and commercial agreements with ~~SGI created~~supply chain partners to create a U.S.-based stevia production industry for high-quality stevia sweetener with superior taste profiles that would supply major customers in the ~~world's largest non-dormant alfalfa seed company and gave us the competitive advantages of year-round~~U.S. market, including pursuant to our previously announced U.S. stevia pilot production ~~in that market. With the completion of the acquisition of dormant alfalfa seed assets from DuPont Pioneer in December 2014, we~~supply agreement with Ingredion. We also believe we have ~~become~~an opportunity to enter the ~~largest alfalfa~~camelina market as a seed ~~company worldwide (by volume),~~and technology provider, where we plan to work with ~~industry-leading research~~large oil companies for biofuel production leveraging our capabilities in producing, processing, and ~~development,~~packaging camelina.

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

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

Global Economic Conditions

We are subject to additional risks and uncertainties as a result of adverse geopolitical and macroeconomic events, such as the continued impact of the COVID-19 pandemic, the ongoing military conflict between Ukraine and Russia and related sanctions, uncertain market conditions, including higher inflation and supply chain disruptions, and other global events, which have had and may continue to have an adverse impact on our business, operations and the markets and communities in which we, our partners and customers operate. The COVID-19 pandemic continues to rapidly evolve and may cause further disruptions in the various markets in which we operate.

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

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

Following the recent invasion of Ukraine by Russia, the U.S. and global financial markets experienced volatility, which has led to disruptions to trade, commerce, pricing stability, credit availability, supply chain continuity and reduced access to liquidity globally. In response to the invasion, the United States, United Kingdom and European Union, along with others, imposed significant new sanctions and export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in the future. The full economic and social impact of the sanctions imposed on Russia and possible future punitive measures that may be implemented, as well as ~~production~~the counter measures imposed by Russia, in addition to the ongoing military conflict between Ukraine and Russia and related sanctions, which could conceivably expand into the surrounding region, remains uncertain; however, both the conflict and related sanctions have resulted and could continue to result in disruptions to trade, commerce, pricing stability, credit availability, supply chain continuity and reduced access to liquidity on acceptable terms, in both Europe and globally, and has introduced significant uncertainty into global markets. As a result, although we have not been materially impacted to date, our business, including our ability to deliver seed and timely receive payment from customers, and access to capital could become adversely affected by the ongoing military conflict between Ukraine and Russia and related sanctions, particularly to the extent it escalates to involve additional countries, further economic sanctions or wider military conflict.

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 ~~capabilities~~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 ~~both hemispheres~~our distribution and supply channels, or concerns about our ability to timely fulfill their orders. If our customers delay or decrease their orders due to potential disruptions in our distribution and supply channels, including as a result of the COVID-19 pandemic or other adverse geopolitical and macroeconomic events, this will adversely affect our product revenue.

During the year ended June 30, 2022 and the three months ended September 30, 2022, we experienced numerous logistical challenges due to limited availability of trucks for product deliveries, congestion at the ports, and overall rising costs of shipping and transportation costs. We expect these logistical challenges to persist throughout fiscal 2023, which may, among other things, delay or reduce our ability to ~~supply proprietary dormant~~recognize revenues within a particular fiscal period and ~~non-dormant alfalfa seed. Our operations span~~harm our results of operations.

The ultimate impact that COVID-19 and other adverse geopolitical and macroeconomic events will have on our consolidated financial statements remains uncertain and ultimately will be dictated by the ~~world's alfalfa seed production regions, with operations in the San Joaquin~~length and ~~Imperial Valleys of California, five additional Western states, Australia and three provinces in Canada.~~

~~Our May 2016 acquisition~~severity of the ~~hybrid sorghum~~pandemic and ~~sunflower germplasm~~any broad-based supply chain disruptions, labor shortages, rising levels of inflation and interest rates, tightening of credit markets or other developments resulting from the pandemic or recent geopolitical and macroeconomic events, as well as the economic recovery and actions taken in response to local, state and national governments around the world, including the distribution of vaccinations. We will continue to evaluate the nature and extent of those potential and evolving impacts to our business and ~~assets of SV Genetics signals management's commitment to our strategy of identifying opportunities to diversify our product lines and improve our gross margins.~~consolidated financial statements.

Components of Our Statements of Operations Data

Revenue and Cost ofRevenue

Product and Other Revenue

We derive most of our revenue from the sale of our proprietary ~~alfalfa~~ seed ~~varieties.~~varieties and hybrids. We expect that over the next several years, a substantial majority of our revenue will ~~continue to~~ 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. In late fiscal year 2016, we began that expansion with the acquisition of the hybrid sorghum and sunflower business and assets of SV Genetics. Revenue from the newly-acquired SV Genetics germplasm will be primarily derived from the sale of sorghum and sunflower seed as well as royalty-based payments set forth in various licensing agreements.

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

Our revenue will fluctuate depending on the timing of orders from our customers and ~~distributors.~~distributors and the extent to which markets are impacted by sources of instability and volatility in global markets and industries, including, among other things, the COVID-19 pandemic, the conflict between Russia and Ukraine, supply chain issues and global inflation. Because some of our large customers and distributors order in bulk only one or two times per year, our product revenue ~~may~~can fluctuate significantly from period to period. ~~However, some~~Some of this fluctuation is offset by having operations in both the northern and southern hemispheres. In addition, due to the numerous logistical challenges we have experienced in our shipping and distribution networks resulting from current geopolitical and macroeconomic events, including the COVID-19 pandemic, our product revenue has fluctuated, and our ability to recognize revenues within a particular fiscal period has been impacted. We expect our product revenue will fluctuate from period to period as a result of the current geopolitical and macroeconomic conditions.

Our specialty crops, including our stevia breeding program ~~has~~and biofuels program, have yet to generate any meaningful revenue. However, management continues to evaluate this portion of our business and assess various ~~means~~opportunities to monetize the results of

our ~~effort to breed new, better tasting stevia varieties.~~research and development efforts. Such potential opportunities include possible collaborations, licensing agreements and royalty-based agreements.

Cost of Revenue

Cost of revenue relates to sale of our seed ~~varieties~~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

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

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

Our research and development expenses increased significantly with the acquisition of the alfalfa research and development assets of DuPont Pioneer in December 2014. We also have expanded our genetics research both internally and in collaboration with third parties. In addition, we acquired additional research and development operations in connection with our May 2016 acquisition of SV Genetics that we expect will factor into an overall increase in R&D expense. Overall, we have been focused on ~~reducing~~controlling research and development ~~expense,~~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~~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~~constructed 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

~~Most of the depreciation and amortization expense on our statement of operations consists of amortization expense.~~ We amortize intangible assets, including those acquired from ~~DuPont Pioneer~~Pasture Genetics in ~~December 2014~~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 ~~10-30~~3-30 years for technology/IP/germplasm, 205-20 years for customer relationships and trade names and ~~2-20~~3-20 years for other intangible assets. Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset, consisting of periods of ~~5-28~~5-35 years for buildings, ~~3-20~~2-20 years for machinery and equipment and ~~3-5~~2-5 years for vehicles.

Other Expense

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

Provision (Benefit) for Income Taxes

Our effective tax rate is based on income, statutory tax rates, differences in the deductibility of certain expenses and inclusion of certain income items between financial statement and tax return purposes, and tax planning opportunities available to us in the various jurisdictions in which we operate. Under U.S. generally accepted accounting principles, or GAAP, if we determine that a tax position is more likely than not of being sustained upon audit, based solely on the technical merits of the position, we recognize the benefit. Tax regulations require certain items to be included in the tax return at different times than when those items are required to be recorded in the consolidated financial statements. As a result, our effective tax rate reflected in our consolidated financial statements is different from that reported in our tax returns. Some of these differences are permanent, such as meals and entertainment expenses that are not fully deductible on our tax return, and some are temporary differences, such as depreciation expense. Temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years for which we have already recorded the tax benefit in our consolidated statements of operations. In the fourth quarter of fiscal year 2017, we recorded a valuation allowance against all of our deferred tax assets. The full valuation

allowance was recorded during the fiscal year 2017 as a result of changes to our operating results and future projections, resulting from a ~~recent~~ decline in export sales to Saudi Arabia. ~~In addition, our available tax planning strategies are currently not expected to overcome the uncertainty of the Saudi Arabian market.~~ As a result, ~~of these factors,~~ we ~~don't~~do not believe that it is more likely than not that our deferred tax assets will be realized.

Results of Operations

Three Months Ended ~~December 31, 2017~~September 30, 2022 Compared to the Three Months Ended ~~December 31, 2016~~September 30, 2021

Revenue and Cost of Revenue

Revenue ~~for three months ended December 31, 2017 was $20,532,796 compared to $24,225,744~~ for the three months ended ~~December 31, 2016.~~September 30, 2022 was $19.9 million compared to $15.5 million for the three months ended September 30, 2021, representing an increase of $4.4 million or 27.9%. The ~~$3,692,948 decrease~~$4.4 million increase in revenue for the three months ended ~~December 31, 2017~~September 30, 2022 was primarily due to the increase in product revenue from alfalfa sales to the Middle East North Africa, or MENA, region of $5.0 million, a $1.5 million increase in alfalfa and sorghum sales to North America, partially offset by a decrease of $0.9 million in product revenue from pasture product sales to ~~the Saudi Arabia markets~~Australia, a decrease of ~~approximately $1.3 million. Regulatory uncertainty in Saudi Arabia surrounding water use restrictions for large forage producers caused customers~~$0.7 million of service revenue in the region to defer purchases and/or reduce inventory carrying levels. The outlook for demand for our non-dormant varieties in Saudi Arabia over the next two to four years continues to be uncertain because of the potential for water use restrictionsUnited States and ~~further regulations from the Saudi Arabian government on water usage. If there is~~ a ~~significant~~ decrease in ~~demand~~product revenue from ~~our customers in Saudi Arabia, we would experience a material decline in revenue~~pasture and ~~earnings in the absence~~alfalfa sales to South Africa of ~~growth in other regions and other products.~~$0.3 million.

Sales into international markets represented ~~23%~~79% and ~~30%~~76% of our total revenue during the three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016,~~2021, respectively. Domestic revenue accounted for ~~77%~~21% and ~~70%~~24% of our total revenue for the three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016,~~2021, respectively. The ~~increase~~decrease in domestic revenue as a percentage of total revenue is primarily ~~attributed~~attributable to ~~timing differences~~the increase in ~~shipments~~alfalfa sales to ~~our largest customer.~~

~~We recorded sales of approximately $15.3 million from our distribution and production agreements with DuPont Pioneer during~~ the ~~three months ended December 31, 2017, which was~~MENA region. In addition, wet conditions in Australia have led to a ~~decrease of $0.8 million from the prior year amount of $16.1 million. We expect DuPont Pioneer to represent a significant portion of~~slow start in our domestic ~~sales, as well as overall sales, for the foreseeable future.~~business.

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

		Three Months Ended December 31,
		2017			2016		Three Months Ended September 30,
							2022				2021
Saudi Arabia							$	5,172,286	26	%	$	3,467,210	22	%
United States	$	15,740,706	77%	$	16,858,325	70%		4,260,754	21	%		3,665,328	24	%
Libya								2,998,047	15	%		1,044,000	7	%
Australia								2,557,732	13	%		3,434,005	22	%
Pakistan								821,620	4	%		164,055	1	%
Sudan								802,044	4	%		819,618	5	%
Algeria								754,680	4	%		—	—
Mexico		1,664,618	8%		1,404,133	6%		731,100	4	%		228,420	2	%
China								468,500	2	%		473,125	3	%
Argentina		1,183,423	6%		1,677,035	7%		362,978	2	%		350,839	2	%
Libya		563,673	3%		-	0%
Saudi Arabia		513,000	2%		1,843,949	8%
Australia		438,468	2%		71,175	0%
South Africa		338,993	2%		634,768	2%
Sudan		-	0%		67,016	0%
Other		89,915	0%		1,669,343	7%		936,124	5	%		1,885,082	12	%
Total	$	20,532,796	100%	$	24,225,744	100%
Total revenue							$	19,865,865	100	%	$	15,531,682	100	%

Cost of revenue of ~~$15,860,629~~$15.4 million for the three months ended ~~December 31, 2017~~September 30, 2022 was ~~77.2%~~equal to 77.3% of total revenue for the three months ended September 30, 2022, while the cost of revenue of ~~$19,005,270~~$12.4 million for the three months ended ~~December 31, 2016~~September 30, 2021 was ~~78.5%~~equal to 79.9% of ~~revenue.~~total revenue for the three months ended September 30, 2021. Cost of revenue ~~decreased on a dollar basis primarily due~~for the three months ended September 30, 2022 and 2021 included inventory write-downs of $0.5 million and $0.3 million, respectively. The write-down of inventory during the three months ended September 30, 2022 and 2021 related to certain inventory lots that deteriorated in quality and germination rates during the ~~decrease~~quarter. The write-down of inventory during the three months ended September 30, 2022 also related to amounts reserved for an estimated amount that is expected to deteriorate in ~~revenue as well as a reduction of product costs.~~quality and germination before being saleable.

~~Total gross~~Gross profit margin for the three months ended ~~December 31, 2017~~September 30, 2022 was ~~22.8%~~22.7% compared to ~~21.5% in~~20.1% for the ~~comparable period of the prior year.~~three months ended September 30, 2021. The increase in gross ~~profit margins~~margin for the three months ended September 30, 2022, was primarily ~~due to product~~driven by higher margins on Alfalfa sales mix during the current period where we had a higher concentration of sales, as a percentage of total revenue, to DuPont Pioneer which are higher margin sales. Additionally, the product costs of proprietary seed are lower in the ~~current year due to more favorable production contracts~~MENA region, partially offset by a decrease in margins from conventional grain sorghum sales and ~~arrangements.~~inventory write-downs, as discussed above.

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

Selling, General and Administrative Expenses

Selling, General and Administrative, ("or SG~~&A")~~&A, expense for the three months ended ~~December 31, 2017~~September 30, 2022 totaled ~~$2,446,955~~$5.1 million compared to ~~$2,592,059~~$5.6 million for the three months ended ~~December 31, 2016.~~September 30, 2021. The ~~$145,104~~$0.5 million decrease in SG&A expense ~~versus the second quarter of~~compared to the prior ~~year~~year-period was primarily due to ~~cost reduction initiatives coupled with~~ a $0.3 million decrease in ~~stock based~~salaries and wages, a $0.3 million decrease in bad debt expense and a $0.2 million decrease in advertising and marketing expenses, offset by $0.1 million incurred for contract labor changes, $0.1 million in stock-based compensation ~~of $102,664.~~expense, and $0.1 million in travel related expenses. As a percentage of revenue, SG&A expenses were ~~11.9% in the current quarter compared to 10.7% in the three months ended December 31, 2016.~~

~~Research and Development Expenses~~

~~Research and development expenses~~25.5% for the three months ended ~~December 31, 2017 totaled $855,164~~September 30, 2022, compared to ~~$748,571~~36.0% for the three months ended ~~December 31, 2016. The $106,593 increase in research~~September 30, 2021.

Research and ~~development expense is driven by additional investment in our hybrid sorghum~~Development Expenses

Research and ~~sunflower programs. We expect our research and~~ development ~~spend for fiscal 2018 to total approximately $3.4 million.~~

~~Depreciation and Amortization~~

~~Depreciation and amortization~~ expense for the three months ended ~~December 31, 2017 was $870,981~~September 30, 2022 totaled $1.5 million compared to ~~$842,454~~$2.0 million for the three months ended ~~December 31, 2016. Included~~September 30, 2021. The $0.5 million decrease in research and development expense compared to the ~~amount~~prior year-period was primarily driven by a $0.2 million reduction of investment in our sunflower programs in Hungary, a $0.2 million reduction in salaries and wages, and a $0.1 million reduction in Unites States field trials. We expect that research and development costs will total approximately $5.4 million for the year ended June 30, 2023.

Depreciation and Amortization

Depreciation and amortization expense for ~~intangible assets, which totaled $555,471 in~~each of the three months ended ~~December 31, 2017~~September 30, 2022 and ~~$555,977 in~~2021 was $1.3 million. For each of the three months ended ~~December 31, 2016. The $28,527 increase in~~September 30, 2022 and 2021, depreciation and amortization expense ~~over the comparable period~~consisted of ~~the prior year is primarily driven by additional~~$0.6 million of depreciation expense ~~associated with~~of fixed ~~asset additions.~~assets, $0.6 million of amortization expense of intangible assets and $0.1 million of amortization expense of finance leases.

Gain on Disposal of Property, Plant and Equipment

~~Foreign Currency Loss (Gain)~~

~~We incurred a foreign currency loss~~Gain on disposal of ~~$7,472~~property, plant and equipment for the three months ended ~~December 31, 2017~~September 30, 2022 was $3,660 compared to ~~a gain of $2,837~~$18,067 for the three months ended ~~December 31, 2016. The foreign~~September 30, 2021.

Foreign Currency Loss

Foreign currency loss for the three months ended September 30, 2022 and 2021 was $0.2 million. Foreign currency losses and gains ~~and losses~~ are primarily associated with ~~SGI,~~S&W Australia and S&W Hungary, our wholly-owned ~~subsidiary in Australia.~~subsidiaries.

Change in ~~Derivative Warrant Liability~~Contingent Consideration Obligation

The ~~derivative warrant liability~~change in contingent consideration obligation for the three months ended September 30, 2022 was $0 compared to a $0.1 million benefit for the three months ended September 30, 2021. Contingent consideration obligation is considered a level 3 fair value financial instrument and was measured at each reporting period until December 31, 2017 at which time the warrants were reclassified to equity due to the expiration of the down-round price protection provision. We recorded a non-cash change in derivative warrant liability loss of $341,199 in the three months ended December 31, 2017 compared to a gain of $959,200 in the three months ended December 31, 2016. The loss represents the increase in fair value of the outstanding warrants issued in December 2014.

~~Change in Contingent Consideration Obligations~~

~~The contingent consideration obligations are considered level 3 fair value financial instruments and will be~~is measured at each reporting period. The ~~$0 and $57,282 charges~~$0.1 million decrease in benefit to non-cash change in contingent consideration ~~obligations expense for~~compared to the ~~three months ended December 31, 2017 and 2016, respectively; represents~~prior year-period was driven by the ~~increase~~decrease in the estimated fair value of the contingent consideration ~~obligations during that respective period due to the decrease~~obligation associated with our acquisition of Pasture Genetics in the present value discount factor used to estimate the fair value of the contingent consideration obligations. The earn-out payment to DuPont Pioneer was finalized in the amount of $2,500,000 and this was added to the Pioneer Note in October 2017.February 2020.

Interest Expense - Amortization of Debt Discount

Non-cash amortization of debt discount expense for the three months ended ~~December 31, 2017~~September 30, 2022 was ~~$33,100~~$0.3 million compared to ~~$381,660~~$0.2 million for the three months ended ~~December 31, 2016.~~September 30, 2021. The expense in ~~the current quarter~~both periods represents the amortization of the debt issuance costs associated with our ~~KeyBank~~ working capital ~~facility and~~facilities, our secured property note and our equipment notes with Conterra. The expense in the prior year represents the amortization of the debt discount, beneficial conversion feature and debt issuance costs associated with the convertible debentures issued December 31, 2014 and the debt issuance costs associated with our KeyBank working capital ~~facility. As of March 1, 2017, the convertible debentures have been fully retired and accordingly, the amortization of debt discount associated with the convertible debentures is complete.~~leases.

Interest Expense, ~~- Convertible Debt and Other~~Net

~~Interest expense during the three months ended December 31, 2017 totaled $383,894 compared to $295,042 for the three months ended December 31, 2016.~~ Interest expense for the three months ended ~~December 31, 2017~~September 30, 2022 totaled $0.7 million compared to $0.5 million for the three months ended September 30, 2021. Interest expense for the three months ended September 30, 2022 and 2021 primarily consisted of interest incurred on the ~~note payable issued to DuPont Pioneer as part of the purchase consideration for the DuPont Pioneer acquisition, the~~ working capital credit facilities, ~~with KeyBank and NAB, and~~ the ~~new secured property~~Rooster Note (as defined below), and equipment loans entered into in November 2017. Interest expense for the three months ended December 31, 2016 primarily consisted of interest incurred on the convertible debentures issued on December 31, 2014, on the note payable issued to DuPont Pioneer as part of the purchase consideration for the DuPont Pioneer acquisition and the working capital ~~credit facilities with KeyBank and NAB.~~leases. The ~~$88,852~~$0.2 million increase in interest expense for the three months ended ~~December 31, 2017 is~~September 30, 2022 was primarily driven by ~~$91,363 of interest~~increases in S&W Australia’s average borrowings on the ~~new secured property~~working capital credit facilities and ~~equipment loans.~~increased interest rates.

Income Tax Benefit

~~Provision (Benefit) for Income Taxes~~

Income tax ~~expense~~benefit totaled ~~$148,702~~$0.1 million for the three months ended ~~December 31, 2017~~September 30, 2022 compared to ~~an income tax expense of $106,485~~$0.2 million for the three months ended ~~December 31, 2016.~~September 30, 2021. Our effective tax rate ~~expense~~ was ~~(59.1%)~~2.2% for the three months ended ~~December 31, 2017~~September 30, 2022 compared to ~~8.4%~~2.5% for the three months ended ~~December 31, 2016. The decrease in our~~September 30, 2021. Our effective tax rate for the three months ended ~~December 31, 2017 is attributable~~September 30, 2022 was due to the ~~full~~ valuation allowance ~~established~~recorded against substantially all of our deferred tax ~~assets which was recorded during the fourth quarter of fiscal 2017.~~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, as such results are generally incorporated in our net operating loss deferred tax asset position, which has a full valuation allowance against it. However, we did record tax expense related to certain other factors occurring throughoutwith the year. For example, we have certain intangible assets with indefinite lives for financial reporting purposes. The write down of these assets cannot be assumed and thus, the deferred tax liability created by the difference in the basis in these assets for financial reporting and tax purposes cannot be used as a source of taxable income against our deferred tax assets. The increase in the deferred tax liability due the yearly tax amortization on these intangible assets is recorded as income tax expense. We also analyzed additional information on our tax return filings in the second quarter of fiscal 2018. To the extent that differences arise from the estimates of tax return filings, these differences are generally recorded in the quarter that they arise and are commonly referred to as provision to return adjustments. Such adjustments related to our Australian tax return filings also generated additional income tax expense for the quarter ended December 31, 2017.

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

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

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

~~Revenue and Cost of Revenue~~

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

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

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

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

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

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

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

~~Selling, General and Administrative Expenses~~

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

~~Research and Development Expenses~~

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

~~Depreciation and Amortization~~

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

~~Foreign Currency Loss (Gain)~~

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

~~Change in Derivative Warrant Liability~~

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

~~Change in Contingent Consideration Obligations~~

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

~~Loss on Equity Method Investment~~

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

~~Interest Expense - Amortization of Debt Discount~~

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

~~Interest Expense - Convertible Debt and Other~~

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

~~Provision (Benefit) for Income Taxes~~

~~Income tax expense totaled $200,123 for the six months ended December 31, 2017 compared to an income tax benefit of $996,923 for the six months ended December 31, 2016.~~ Our ~~effective tax rate expense was (9.9%) for the six months ended December 31, 2017 compared to 32.6% for the six months ended December 31, 2016. The decrease in our~~ effective tax rate for the ~~six months ended December 31, 2017 was~~current quarter is primarily ~~attributable~~due to the fact that a valuation allowance against substantially all of our assets was recorded in the fourth quarter of the year ended June 30, 2017. For the six months ended December 31, 2016 we recorded a benefit associated with theincome tax ~~losses incurred in that period. However, for the six months ended December 31, 2017, we have not recorded a benefit~~expense related to our losses due to the valuation allowance. The expense recorded for the six months ended December 31, 2017 is primarily attributed to additional deferred tax liabilities recorded during the year on indefinite lived intangible assetsforeign operations and ~~the recording of additional tax expense on our prior year Australian tax return, which will be filed in fiscal 2018.~~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 ~~2017,~~2022, we paid our North American growers approximately 50% of amounts due in ~~October 2016~~the fall of 2021 and the balance was paid in ~~February 2017.~~the spring of 2022. This payment cycle to our growers ~~is expected to be~~was similar in fiscal year ~~2018. SGI,~~2021, and we expect it to be similar for fiscal year 2023. S&W Australia and Pasture Genetics, our ~~Australian-based subsidiary, has a~~Australia-based wholly-owned subsidiaries, have production ~~cycle~~cycles that isare counter-cyclical to North America; however, this also puts a greater demand on our working capital and working capital requirements during the second, third and fourth fiscal quarters based on timing of payments to growers in the second through fourth quarters.

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

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

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

~~In recent periods,~~Capital Resources and Material Cash 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 ~~consummated the following~~relied on equity and debt ~~financings:~~financings, and we will need to obtain additional funding to finance our operations in the future. Accordingly, we are actively evaluating financing and strategic alternatives, including debt and equity financings and potential sales of assets or certain lines of business.

~~On December 31, 2014,~~We believe our existing cash and cash equivalents, accounts receivable, cash flow from revenues derived from sales of our products, and the undrawn availability under our debt facilities will be sufficient to meet our cash requirements over the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations beyond the next 12 months through a combination of existing cash and cash equivalents, accounts receivable, cash flow from operations, the undrawn availability under our debt facilities and issuances of equity securities or debt offerings. Our ability to fund longer-term operating needs will depend on our ability to generate sufficient cash flows through sales of our products, our ability to maintain compliance with, and secure additional from, our existing debt facilities, and our ability to access the capital markets, the impacts of adverse geopolitical and macroeconomic events, and other factors, including those discussed under the section titled “Risk Factors” in ~~connection~~our Annual Report on Form 10-K for the year ended June 30, 2022.

The CIBC Loan Agreement (as defined below), with CIBC Bank USA, or CIBC, and the ~~DuPont Pioneer Acquisition, we issued a~~ secured promissory note, ~~(the "Pioneer Note") payable by~~or the Rooster Note, we executed in favor of Conterra in November 2017 and subsequently endorsed to Rooster Capital, LLC, or Rooster, which matures on December 23, 2022, and our debt facilities with National Australia Bank, or NAB, contain various operating and financial covenants. Adverse geopolitical and macroeconomic events, such as the continued impact of the COVID-19 pandemic, the ongoing conflict between Ukraine and Russia and related sanctions, and uncertain market conditions, including higher inflation and supply chain disruptions, and other factors affecting our results of operations have increased the risk of our inability to comply with these covenants, which could result in acceleration of our repayment obligations and foreclosure on our pledged assets. In addition, these loan agreements contain cross-default provisions, such that certain defaults or breaches under any of our loan agreements may entitle CIBC or Rooster to invoke default remedies. We were not in compliance with certain covenants in the CIBC Loan Agreement and the Rooster Note as of June 30, 2021, December 31, 2021, March 31, 2022, June 15, 2022 and June 30, 2022, and were required to obtain waivers and/or amendments from CIBC and Rooster. In particular, the CIBC Loan Agreement as presently in effect requires us to ~~DuPont Pioneer~~maintain minimum liquidity of no less than $1,000,000 and the NAB Finance Agreement (as defined below) includes an undertaking that requires us to maintain a net related entity position of not more than AUD $25,000,000. Accordingly, our ability to comply with this undertaking is subject to fluctuations in foreign currency conversion rates, which are outside of our control. Due to recent fluctuations in foreign currency conversion rates, we are currently not in compliance with this undertaking. Although we are currently in discussions with NAB to revise how compliance with this undertaking is measured, there can be no assurances that we will be able to secure an amendment to the ~~initial principal amount of $10,000,000 (issued at closing), and a potential earn-out payment (payable as an increase in the principal amount~~NAB Finance Agreement or regain compliance with this undertaking. We are actively pursuing refinancing of the ~~Pioneer Note)~~CIBC Loan Agreement and the Rooster Note.

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

•

the maturity and repayment of upour debt;

•

the extent and sustainability of future operating income;

•

the level and timing of future sales and expenditures;

•

timing for when we are able to ~~$5,000,000 based on~~recognize revenue;

•

working capital required to support our growth;

•

our ability to timely pay our growers;

•

investment capital for plant and equipment;

•

investment in our sales ~~under the distribution~~ and ~~production agreements entered into~~marketing programs;

•

investment capital for potential acquisitions;

•

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

•

our ability to raise equity financing, in ~~connection with the DuPont Pioneer Acquisition,~~order to secure refinancing as well as support our operations, among other ~~sales~~things;

•

competition;

•

market developments; and

•

developments related to adverse geopolitical and macroeconomic events, including the COVID-19 pandemic, inflation and supply chain disruptions.

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

If we ~~consummate containing the acquired germplasm~~are required or desire to raise additional capital in the ~~three-year period following~~future, whether as a condition to loan refinancing or separately, such additional financing may not be available on favorable terms, or available at all. To the ~~closing. The earn-out payment~~extent that we raise additional capital through the sale of ~~$2,500,000~~equity or convertible debt securities, your ownership interest would be diluted and the terms of these securities could include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing may involve agreements that include covenants limiting or restricting our ability to ~~DuPont Pioneer was finalized~~take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may be secured by all or a portion of our assets, and may be on terms less favorable than our existing loans. If we fail to obtain additional capital as and when required, such failure could have a material impact on our business, results of operations and financial condition.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the ongoing military conflict between Russia and Ukraine, and other geopolitical and macroeconomic factors beyond our control, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in ~~October 2017~~consumer confidence, declines in economic growth, increases in unemployment rates and ~~this amount was added~~uncertainty about economic stability. It is possible that further deterioration in credit and financial markets and confidence in economic conditions will occur. If equity and credit markets deteriorate, it may affect our ability to raise equity capital, borrow on our existing facilities or make any additional necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. In addition, while we are currently in compliance with our loan agreements, our ability to comply with the ~~Pioneer Note~~terms of our loan agreements has been compromised and could result in ~~October 2017. The Pioneer Note accrued interest~~an event of default. If an event of default were to occur, our lenders could accelerate our repayment obligations or enforce their other rights under our agreements with them. Any such default may also require us to seek additional or alternative financing, which may not be available on commercially reasonable terms or at ~~3% per annum. Interest was payable~~all.

Below is a summary of our material sources of capital in ~~three annual installments, in arrears, commencing on December 31, 2015.~~ recent periods:

Debt Financings

Loan and Security Agreement with CIBC

On December 1, 2017, we repaid the Pioneer Note. The repayment amount included the $2.5 million earn-out payment related to the Pioneer Acquisition that was added to the principal amount of the Pioneer Note in October 2017.

~~On November 30, 2017,~~26, 2019, we entered into a ~~secured note financing transaction (the "Loan Transaction")~~Loan and Security Agreement with ~~Conterra Agricultural Capital, LLC ("Conterra") for $12.5 million in gross proceeds. Pursuant to~~CIBC, or the CIBC Loan ~~Transaction,~~Agreement, which we ~~issued two secured promissory notes (the "Notes") to Conterra as follows:~~

~~Secured Real Estate Note~~. We issued one Note in the principal amount of $10.4 million (the "Secured Real Estate Note") that is secured by a first priority security interest in the property, plant and fixtures (the "Real Estate Collateral") located at our Five Points, California and Nampa, Idaho production facilities and our Nampa, Idaho and Arlington, Wisconsin research facilities (the "Facilities"). The Secured Real Estate Note maturesamended on ~~November~~September 22, 2020, December 30, 2020, ~~which, subject to Conterra's approval, may be extended to November 30,~~May 12, 2021, September 27, 2021, May 13, 2022, September 22, 2022 and October 28, 2022. ~~The Secured Real Estate Note bears interest of 7.75% per annum. We have agreed to make semi-annual payments of interest and amortized principal on a 20-year amortization schedule,~~As amended, the CIBC Loan Agreement provides for a ~~combined payment of $515,711, starting July 1, 2018, in addition to a one-time interest only payment on January 1, 2018. We may prepay~~$21.0 million credit facility, or the ~~Secured Real Estate Note, in whole or in part, at any time after we have paid a minimum of twelve months of interest on the Secured Real Estate Note.~~

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

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

~~On September 22, 2015, we entered into an up to $20,000,000 aggregate principal amount credit and security agreement (the "KeyBank~~CIBC Credit ~~Facility") with KeyBank. On October 4, 2016, we entered into an amendment to the KeyBank Credit Facility effective as~~Facility. As of September 30, ~~2016, temporarily increasing~~2022, approximately $2.2 million remained available for use under the borrowing limit and certain other credit facility terms as follows: (i) temporarily increasing the borrowing capacity from $20.0 million to (a) up to $25.0 million between October 1, 2016 and November 30, 2016 and (b) up to $30.0 million from February 1, 2017 through March 31, 2017; (ii) temporarily allowing for a $4.0 million over-advance beyond the amounts otherwise available based on the borrowing base calculations, which will be available through February 28, 2017; and (iii) temporarily expanding the borrowing base by reducing the reserves that KeyBank may establish with respect to grower payables to 75% between August 31, 2016 and February 28, 2017. On March 13, 2017, we entered into a Third Amendment Agreement (the "Third Amendment") with respect to the KeyBankCIBC Credit Facility.

The ~~purpose of the Third Amendment was to provide certain temporary changes to the~~key terms of the ~~KeyBank~~CIBC Loan Agreement include the following:

•

Advances under the CIBC Credit Facility ~~including:~~are to be used: (i) ~~further extending the temporary period during which we~~to finance our ongoing working capital requirements; and (ii) for general corporate purposes. We may ~~borrow, repay and reborrow up to $30.0 million in the aggregate~~also use a portion of borrowings incurred under the credit facility until April 21, 2017; and (ii) retroactively and temporarily allowing for over-advances, beyond amounts otherwise available based on the borrowing base calculations under the Credit Facility: (a) of up to $3.5 million during the period from March 8, 2017 through March 10, 2017, (b) of up to $5.0 million during the period from March 11, 2017 through March 17, 2017, (c) of up to $6.0 million during the period from March 18, 2017 through March 24, 2017, (d) of up to $7.0 million during the period from March 25, 2017 through March 31, 2017 and (e) of up to $8.5 million during the period from April 1, 2017 through as late as April 20, 2017. On September 13, 2017, we entered into a Fourth Amendment Agreement (the "Fourth Amendment") with respect to the KeyBank Credit Facility. Pursuant to the Fourth Amendment, we extended the maturity date of theCIBC Credit Facility to ~~September 12, 2019~~finance permitted acquisitions and increased the aggregate principal amount that we may borrow, repay and reborrow, up to $35.0 million in the aggregate, subject to a requirement that we maintain a reduced loan balance of (i) not more than $20.0 million for at least 30 consecutive days over the prior twelve months (measured each quarter on a trailing 12 month basis) and (ii) not more than $25.0 million for at least 60 consecutive days over the prior twelve months (measured each quarter on a trailing 12 month basis).related costs.

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

•

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

December 23, 2022.

•

The ~~KeyBank~~CIBC Credit Facility generally establishes a borrowing base of up to 85% of eligible domestic accounts receivable ~~and 90%~~(90% of eligible foreign accounts ~~receivable~~receivable) plus up to the lesser of (i) 65% of ~~the cost~~ eligible inventory, ~~or 90%~~(ii) 85% of the appraised net orderly liquidation value of eligible inventory, and (iii) a borrowing base eligible inventory sublimit of $12,000,000, as more fully set forth in the CIBC Loan Agreement, in each case, subject to lender reserves.

•

Loans ~~may be~~are based on a ~~Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.2%~~base rate plus 2.0% per ~~annum) (both as defined in the September 22, 2015 credit and security agreement (the "Credit Agreement")), generally at the Company's option.~~annum. In the event of a default, at the option of ~~KeyBank,~~CIBC, the interest rate on all obligations owing will increase by 3%2% per annum over the rate otherwise applicable.

~~Subject to certain exceptions, the KeyBank~~

•

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

•

The CIBC Loan Agreement contains customary representations and ~~after acquired tangible~~warranties, affirmative and ~~intangible assets~~negative covenants and customary events of default that permit CIBC to accelerate our ~~domestic subsidiaries, which have guaranteed our~~outstanding obligations under the ~~KeyBank Credit Facility. The KeyBank~~CIBC Credit Facility, ~~is further secured by a lien on,~~all as set forth in the CIBC Loan Agreement and ~~a pledge~~related documents. The CIBC Credit Facility also contains customary affirmative and negative covenants and events of ~~65%~~default.

The October 28, 2022 amendment to the CIBC Loan Agreement, among other things, increased (i) the total revolving loan commitment to $21,000,000 from $18,000,000 and (ii) the borrowing base eligible inventory sublimit to $12.0 million from $9.0 million. As of the stock of our wholly-owned subsidiary, S&W Australia Pty Ltd. With respect to its security interest and/or lien, KeyBank has entered into an Intercreditor Agreement with Hudson Bay Fund LP (as agent for the holders of the senior secured debentures issued by us on December 31, 2014) and DuPont Pioneer.

~~At December 31, 2017,~~September 30, 2022, we were in compliance with all ~~KeyBank~~covenants contained in the CIBC Loan Agreement.

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

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

Debt Facilities with National Australia Bank

S&W Australia has debt ~~covenants.~~facilities with NAB, pursuant to an amended and restated finance agreement, entered into on October 24, 2022, as amended on October 25, 2022, or the NAB Finance Agreement, all of which are guaranteed by S&W Seed Company up to a maximum of AUD $15,000,000 (USD $9,736,500 as of September 30, 2022). As of September 30, 2022, approximately AUD $1.4 million (USD $0.9 million) remained available for use under the NAB Finance Agreement.

~~SGI~~Pursuant to the amendments contained in the NAB Finance Agreement, among other things:

•

the maturity date of S&W Australia’s master asset finance facility was extended by one year to September 29, 2023.

The consolidated debt facilities under the NAB Finance Agreement provide for up to an aggregate of AUD $49,000,000 (USD $31,805,900 as of September 30, 2022) of credit, and include the following:

•

~~The 2016 NAB Facilities, as currently in effect, comprises~~ two ~~distinct~~ facility lines: (i) an overdraft facility ~~(the "Overdraft Facility"),~~ having a credit limit of AUD ~~$980,000~~$2,000,000 (USD ~~$764,596 at December 31, 2017)~~$1,298,200 as of September 30, 2022), and (ii) a borrowing base ~~facility (the "Borrowing Base Facility"),~~line having a credit limit of AUD ~~$12,000,000~~$40,000,000 (USD ~~$9,362,400 at December 31, 2017).~~

~~The Borrowing Base Facility permits SGI to borrow funds for periods~~$25,964,000 as of up to 180 days, at SGI's discretion, provided that the term is consistent with its trading terms. Interest for each drawdown is set at the time of the drawdown as follows: (i) for Australian dollar drawings, based on the Australian Trade Refinance Rate plus 1.5% per annum and (ii) for foreign currency drawings, based on the British Bankers' Association Interest Settlement Rate for the relevant foreign currency for the relevant period, or if such rate is not available, the rate reasonably determined by NAB to be the appropriate equivalent rate, plus 1.5% per annum.September 30, 2022). As of ~~December 31, 2017,~~September 30, 2022, the ~~Borrowing Base Facility~~borrowing base line accrued interest on Australian dollar drawings at approximately ~~5.07%~~6.43% per annum calculated daily. The ~~Borrowing Base Facility is secured by a lien on all the present and future rights, property and undertakings of SGI, the mortgage on SGI's Keith, South~~overdraft facility permits S&W Australia ~~property and the Company's corporate guarantee (up to a maximum of AUD $15,000,000).~~

~~The Overdraft Facility permits SGI~~ to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the

balance owing at the end of the day and is payable monthly in ~~arrears~~.arrears. As of ~~December 31, 2017,~~September 30, 2022, the ~~Overdraft Facility~~overdraft facility accrued interest at approximately ~~6.77%~~7.22% per annum calculated daily.

~~In January 2015, NAB and SGI entered into~~S&W Australia.

•

S&W Australia has a ~~new business markets -~~ flexible term rate loan ~~(the "Keith Building Loan")~~ in the amount of AUD ~~$650,000~~$4,000,000 (USD ~~$507,130 at December 31, 2017)~~$2,596,400 as of September 30, 2022). ~~Since entering into the Keith Building Loan, the limit has been changed on three occasions, with the current limit being~~Required annual principal payments of AUD ~~$675,000~~$500,000 (USD $526,635 at December 31, 2017), and a separate machinery and equipment facility (the "Keith Machinery and Equipment Facility") has been added with the limit being changed on two occasions, the current limit being AUD $702,779 (USD $548,308) at December 31, 2017. At December 31, 2017, the principal balance$324,550 as of September 30, 2022) on the ~~Keith Building~~Term Loan was AUD $575,000 (USD $448,615) with unused availability of AUD $100,000 (USD $78,021). At December 31, 2017, the principal balance on the Keith Machinery and Equipment Facility was AUD $674,132 (USD $525,957) with no unused availability. In February 2016, NAB and SGI also entered into a master asset finance facility (the "Master Assets Facility"). At December 31, 2017, the principal balance on the Master Assets Facility was AUD $304,493 (USD $237,566) with unused availability of AUD $445,507 (USD $347,585). The Master Asset Facility has various maturity dates through 2021 and have interest rates ranging from 4.79% to 5.31%.

The Keith Building Loan and Keith Machinery and Equipment Facility are used for the construction of a building on SGI's Keith, South Australia property, purchase of adjoining land and for the machinery and equipment for use in the operations of the building. The Keith Building Loan maturescommenced on November 30, ~~2024. The~~2020, with the remainder of any unpaid balance becoming due on May 31, 2026. Monthly interest ~~rate on~~amounts outstanding under the Keith Building Loan varies from pricing period to pricing period (each such period approximately 30 days), based on the weighted average of a specified basket of interest rates (6.11% as of December 31, 2017). Interest is payable each month in arrears. The Keith Machinery and Equipment Facility bears interest,term loan are payable in arrears ~~based on the Australian Trade Refinance Rate~~at a floating rate quoted by NAB atfor the ~~time of the drawdown,~~applicable pricing period, plus ~~2.9%~~2.6%. The Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate SGI's outstanding obligations, all as set forth in the facility agreement. They areterm loan is secured by a lien on all the present and future rights, property and undertakings of ~~SGI,~~S&W Australia.

•

S&W Australia finances certain equipment purchases under a master asset finance facility with NAB. The master asset finance facility has various maturity dates through 2029 and have interest rates ranging from 2.86% to 6.61%. The credit limit under the ~~Company's corporate guarantee~~facility is AUD $3,000,000 (USD $1,947,300 as of September 30, 2022). As of September 30, 2022, AUD $2,087,067 (USD $1,354,715) was outstanding under S&W Australia’s master asset finance facility.

S&W Australia was in compliance with all debt covenants under its loan agreement with NAB in effect as of September 30, 2022. Pursuant to the NAB Finance Agreement, inclusive of the October 25, 2022 amendment, we must comply with an undertaking that requires us to maintain a net related entity position of not more than AUD $25,000,000. Accordingly, our ability to comply with this undertaking is subject to fluctuations in foreign currency conversion rates, which are outside of our control. Due to recent fluctuations in foreign currency conversion rates, we are currently not in compliance with this undertaking. Although we are currently in discussions with NAB to revise how compliance with this undertaking is measured, there can be no assurances that we will be able to secure an amendment to the NAB Finance Agreement or regain compliance with this undertaking.

Rooster Note

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

MFP Loan Agreement

On September 22, 2022, our largest stockholder, MFP Partners, L.P., or MFP, provided a letter of credit, issued by JPMorgan Chase Bank, N.A. for the account of MFP, with a face amount of $9,000,000, or the MFP Letter of Credit, for the benefit of CIBC, as additional collateral to support our obligations under the CIBC Loan Agreement. The MFP Letter of Credit matures on January 23, 2023, one month after the maturity date of the CIBC Loan Agreement. On October 28, 2022, MFP amended the MFP Letter of Credit to increase the face amount from $9,000,000 to $12,000,000, in order to provide collateral to support our obligations under the CIBC Loan Agreement.

Concurrently, on September 22, 2022, we entered into a Subordinate Loan and Security Agreement, or the MFP Loan Agreement, with MFP, pursuant to which any draw CIBC may make on the MFP Letter of Credit will be deemed to be a term loan advance made by MFP to us. The MFP Loan Agreement will mature on November 30, 2025. Pursuant to the MFP Loan Agreement, we will pay to MFP a cash fee through the maturity date of the MFP Letter of Credit equal to 3.50% per annum on all amounts remaining undrawn under the MFP Letter of Credit. In the event any term advances are deemed made under the MFP Loan Agreement, such advances will bear interest at a rate per annum equal to term SOFR (with a floor of 1.25%) plus 9.25%, half of which will be payable in cash on the last day of each fiscal quarter and half of which will accrue as payment in kind interest payable on the maturity date, unless, with respect to any quarterly payment date, we elect to pay such interest in cash. On October 28, 2022, the MFP Loan Agreement was amended to increase the maximum amount of term loan advances available to us under the MFP Loan Agreement from $9,000,000 to $12,000,000. As of September 30, 2022, no amounts were outstanding under the MFP Loan Agreement.

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

Equity Issuances

On September 23, 2020 we entered into an At Market Issuance Sales Agreement, as amended on September 27, 2021, 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. We have 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, 2022, we received gross proceeds of approximately $7.4 million from the sale of 3,655,136 shares of our common stock pursuant to the ATM Agreement. No sales were made during the three months ended September 30, 2022. As of September 30, 2022, we had $6.3 million of availability remaining under the ATM Agreement.

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

The Purchasers included MFP, our largest stockholder, Starlight 4, LLLP, an entity affiliated with Mark W. Wong, our Chief Executive Officer and a ~~mortgage on SGI's Keith, South Australia property.~~member of our board of directors, Alan D. Willits, a member of our board of directors, and Charles B. Seidler and Robert Straus, each then a member of our board of directors. Alexander C. Matina, a member of our board of directors, is Vice President and Portfolio Manager of MFP Investments LLC, the general partner of MFP.

On ~~July 19, 2017,~~February 18, 2022, we entered into a Securities Purchase Agreement with ~~certain purchasers,~~MFP, pursuant to which we sold and issued ~~an aggregate of 2,685,000~~to MFP, in a private placement, 1,695 shares of our ~~Common~~Series B Redeemable Convertible Non-Voting Preferred Stock, par value $0.001 per share, an accompanying warrant to purchase up to 559,350 shares of our common stock, at a ~~purchase~~combined unit price of ~~$4.00~~$2,950 per share, for aggregate gross proceeds of ~~$10.74~~approximately $5.0 million.

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

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

Summary of Cash Flows

The following table shows a summary of our cash flows for the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022 and ~~2016:~~2021:

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


	Three Months Ended September 30,
	2022			2021
Cash flows from operating activities	$	(7,319,995	)	$	(5,484,482	)
Cash flows from investing activities		(147,716	)		(452,647	)
Cash flows from financing activities		6,421,764			4,831,688
Effect of exchange rate changes on cash		213,839			(527,769	)
Net decrease in cash and cash equivalents		(832,108	)		(1,633,210	)
Cash and cash equivalents, beginning of period		2,056,508			3,527,937
Cash and cash equivalents, end of period	$	1,224,400		$	1,894,727

OperatingActivities

For the ~~six~~three months ended ~~December 31, 2017,~~September 30, 2022, operating activities used ~~$16,669,045~~$7.3 million in cash. Net loss plus and minus the adjustments for non-cash items as detailed on the statement of cash flows used ~~$471,624~~$1.6 million in cash, and changes in operating assets and liabilities as detailed on the statement of cash flows used ~~$16,197,421~~$4.5 million in cash. The decrease in cash from changes in operating assets and liabilities was primarily driven by $1.3 million in unrealized foreign currency gains, an increase in accounts receivable of $9.0 million and increased pre-paid expenses of $0.2 million offset by a decrease in inventory of $3.1 million, an increase in accounts payable and accruals of $1.2 million and an increase of $0.4 million in deferred revenue from prepayments for our fiscal 2023 United States domestic business.

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 ~~$38,850,545 due to timing~~$1.0 million and accounts receivable of ~~the US harvest,~~$3.2 million, partially offset by ~~a corresponding increase~~increases in accounts payable of ~~$25,606,471.~~$1.9 million and accrued expenses and other current liabilities of $0.5 million.

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

Investing Activities

Investing activities during the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022 used ~~$768,845~~$0.1 million in ~~cash. These activities consisted primarily of~~cash, which resulted from additions to ~~a build out of a new research~~property, plant and ~~development facility in Nampa, Idaho.~~equipment for our United States and Australian facilities.

Investing activities during the ~~six~~three months ended ~~December 31, 2016~~September 30, 2021 used ~~$1,382,784~~$0.5 million in ~~cash. These activities consisted~~cash, which resulted from additions to property, plant and equipment consisting primarily of ~~additions to a build out of a new research~~machinery and ~~development facility~~equipment purchases for our Penfield and Keith facilities in ~~Nampa, Idaho and investment in internal use software.~~Australia.

Financing Activities

Financing activities during the ~~six~~three months ended ~~December 31, 2017~~September 30, 2022 provided ~~$22,072,723 in cash. We completed two separate private placements of common stock during the six months ended December 31, 2017 which raised net proceeds of $10.7~~$6.4 million in ~~cash. In December 2017, we also completed~~cash, consisting of net borrowings on the ~~closing~~working capital lines of ~~our rights offering~~credit and ~~backstop commitment with MFP. Pursuant to the rights offering and backstop commitment with MFP, we sold and issued an aggregate~~borrowings of ~~3,500,000 shares~~long-term debt of ~~our common stock in December 2017 for aggregate~~$7.0 million, partially offset by net ~~proceeds~~repayments of ~~$11.8~~long-term debt of $0.5 million. On November 30, 2017, we entered into a secured note financing transaction for $12.5 million in gross proceeds. The proceeds from the secured note financing were used to repay the Pioneer Note. The repayment amount included the $2.5 million earn-out payment related to the Pioneer Acquisition that was added to the principal amount of the Pioneer Note in October 2017.

Financing activities during the ~~six~~three months ended ~~December 31, 2016~~September 30, 2021 provided ~~$2,664,379~~$4.8 million in ~~cash. We had~~cash, consisting of net borrowings ~~of $5.6 million~~ on ~~our~~the working capital lines of credit and ~~made $3.4~~borrowings of long-term debt of $5.4 million, partially offset by net repayments of ~~redemptions~~long-term debt of $0.5 million.

Inflation Risk

Inflationary pressures on labor and commodity price increases directly impacted our ~~convertible debentures. We also generated $602,083 in net proceeds from the exercise~~consolidated results of ~~stock options~~operations during the ~~six~~three months ended ~~December 31, 2016.~~

~~Inflation Risk~~

September 30, 2022, and we expect this to continue throughout the remainder of fiscal year 2023. We ~~do not believe that inflation has had~~attempt to manage any inflationary costs through selective price increases and changes in product mix, but rapidly changing inflationary pressures from global commodity prices and logistics could impact our costs of goods before pricing adjustments can be implemented. Delays in implementing such price increases, competitive pressures, and other factors may limit our ability to recover such cost increases in the future. Inherent volatility experienced in certain commodity markets could have a ~~material~~significant 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~~have an adverse effect on us in the future. The extent of ~~operations.~~

~~Off Balance Sheet Arrangements~~

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

~~Capital Resources and Requirements~~

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

~~the extent and duration of future operating income;~~
~~the level and timing of future sales and expenditures;~~
~~working capital required to support our growth;~~
~~investment capital for plant and equipment;~~
~~our sales and marketing programs;~~
~~investment capital for potential acquisitions;~~
depend on our ability to ~~renew and/or refinance our debt on acceptable terms;~~
~~competition;~~manage such volatility through the product mix that we sell and
~~market developments.~~

selective price increases.

Critical Accounting ~~Policies~~Estimates

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

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

Goodwill

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

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

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

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

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

Intangible Assets

All amortizable intangible assets are assessed for impairment whenever events indicate a possible loss. Such an assessment involves estimating undiscounted cash flows over the remaining useful life of the intangible. If the review indicates that undiscounted cash flows are less than the recorded value of the intangible asset, the carrying amount of the intangible is ~~reduced by~~compared to its fair value, with an impairment loss recognized if the fair value is below carrying value. Fair values are typically estimated ~~cash-flow shortfall on a~~using discounted ~~basis, and a corresponding loss is charged to the consolidated statement of operations.~~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~~employee’s requisite service period (generally the vesting period of the equity grant).

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

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

Income Taxes

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

Inventories

All inventories are accounted for on a lower of cost or ~~market basis.~~net realizable value. Inventories consist of raw materials and finished ~~goods as well as in the ground crop inventories.~~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.

~~Our subsidiary, SGI, does not fix~~During the ~~final price~~three months ended September 30, 2022, we recognized a write-down of inventory in the amount of $0.5 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, 2022 was primarily related to certain sorghum, alfalfa, sunflower and other inventory lots that deteriorated in quality and germination rates during the period or has been reserved for ~~seed payable to its growers until the completion of a given year's sales cycle pursuant to its standard contract production agreement. We record~~as an estimated ~~unit price accordingly,~~amount that is expected to deteriorate in quality and germination before being saleable.

During the three months ended September 30, 2021, we recognized a write-down of inventory cost of revenue and gross profits are based upon management's best estimate of the final purchase price to our SGI growers. To the extent the estimated purchase price varies from the final purchase price for seed, the adjustment to actual could materially impact the results in the ~~period when~~amount of $0.3 million which is included in Cost of Revenue in the ~~difference between estimates~~Consolidated Statement of Operations. The write-down of inventory during the three months ended September 30, 2021 was primarily related to certain sorghum and ~~actuals are identified. If~~alfalfa inventory lots that deteriorated in quality and germination rates during the ~~actual purchase price is in excess of our estimated purchase price, this would negatively impact our financial results including a reduction in gross profits and earnings.~~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~~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~~typically disclosed under this ~~item of Form 10-Q.~~item.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and our Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~December 31, 2017 (the "Evaluation Date").~~September 30, 2022. The term ~~"disclosure~~“disclosure controls and procedures,"” as defined in Rules ~~13a-15(e)~~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~~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~~company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of ~~December 31, 2017,~~September 30, 2022, our Principal Executive Officer and Principal Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

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

Part II

OTHER INFORMATION

Item 1. Legal Proceedings.

~~None.~~From time to time, we are involved in lawsuits, claims, investigations and proceedings, including pending opposition proceedings involving patents that arise in the ordinary course of business. There are no matters pending that we expect to have a material adverse impact on our business, results of operations, financial condition or cash flows.

Item 1A. Risk Factors.

~~Our business~~We are a smaller reporting company, and, ~~results~~as such, we are not required to provide the information under this Item of operations are subject to a number of risks and uncertainties. While there have been no material changes to the risk factors previously disclosed under the heading "Risk Factors" in our Annual Report, which was filed with the SEC on September 20, 2017, you should carefully consider the risk factors described therein. The occurrence of any of the risks described in our Annual Report or herein could harm our business, financial condition, results of operations and/or growth prospects or cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report on Form ~~10-Q and those we may make from time to time.~~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.

~~None.~~Not applicable.

5843

Item 6. Exhibits.


Exhibit No.		Description
~~2.1~~
1.1(1)		~~Fourth Amendment to Asset Purchase~~At Market Issuance Sales Agreement, dated September 23, 2020, by and ~~Sale Agreement~~ between ~~the Registrant~~S&W Seed Company and ~~Pioneer Hi-Bred International,~~B. Riley Securities, Inc.~~, dated December 4, 2017.~~
~~3.1(1)~~
3.1(2)		Registrant's Articles of ~~Incorporation.~~Incorporation, as amended.

3.2(3)		Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock.
~~3.2(2)~~
3.3(4)		Registrant's Second Amended and Restated ~~Bylaws.~~Bylaws, together with Amendment One thereto.
~~4.1~~
4.1		Reference is made to Exhibits 3.1, 3.2 and ~~3.2.~~3.3.
~~4.2(3)~~
4.2(5)		Form of Common Stock Certificate.
~~4.3(4)~~
4.3(6)		Form of ~~Common Stock Purchase Warrant.~~Warrant issued on February 18, 2022.
~~10.1(5)~~
4.4		~~Investment~~Common Stock Purchase Warrant issued to MFP Partners, L.P. on September 22, 2022.

10.1		Irrevocable Standby Letter of Credit, dated September 21, 2022, issued by JPMorgan Chase Bank, N.A. in favor of CIBC Bank USA for the account of the Registrant.

10.2		Subordinate Loan and Security Agreement, dated September 22, 2022, by and between the Registrant and MFP Partners, L.P.~~, dated October 3, 2017.~~
~~10.2(6)~~
10.3		~~Securities Purchase~~Sixth Amendment to Loan and Security Agreement, dated September 22, 2022, by and among the Registrant, Seed Holding, LLC, Stevia California, LLC and CIBC Bank USA.

10.4		Second Amendment to Note, dated September 22, 2022, by and between the Registrant and ~~Mark W. Wong, dated October 11, 2017.~~Rooster Capital LLC.
~~10.3(6)~~		~~Registration Rights Agreement by and between the Registrant and Mark W. Wong, dated October 11, 2017.~~
~~10.5~~ 31.1		~~Secured Promissory Notes issued by the Registrant in favor of Conterra Agricultural Capital, LLC, dated November 30, 2017 and related documents.~~
~~10.6~~		~~Third Amendment to Contract Alfalfa Production Services Agreement between the Registrant and Pioneer Hi-Bred International, Inc., dated December 21, 2017.~~
~~10.7~~		~~First Amendment to Research Agreement between the Registrant and Pioneer Hi-Bred International, Inc., dated December 21, 2017.~~
~~10.8(7)~~		~~Registration Rights Agreement by and between the Registrant and MFP Partners, L.P., dated December 22, 2017.~~
~~31.1~~		Certification of Chief Executive Officer Pursuant to Rule 13-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002.
~~31.2~~
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~~2002.

~~32.1~~
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~~2002.
~~32.2~~
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~~2002.
~~101.INS~~
~~XBRL Instance Document~~
~~101.SCH~~101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
~~101.CAL~~
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
~~101.LAB~~
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
~~101.PRE~~
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
~~101.DEF~~
104
Cover Page Interactive Data File (embedded within the Inline XBRL ~~Taxonomy Extension Definition Linkbase Document~~document)

~~_________~~

(1)

Incorporated by reference to Exhibit 1.2 to the ~~Registrant's~~Registrant’s Registration Statement on Form S-3, filed on September 23, 2020 (File No. 333-248974).

(2)

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).

(3)

Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on ~~December 19, 2011.~~
~~(2)~~ February 23, 2022 (File No. 001-34719).

(4)

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

(5)

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).

(6)

Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K, filed on ~~December 16, 2015.~~
~~(3) Incorporated by reference to the Registrant's Registration Statement on Form S-1~~February 23, 2022 (File No. ~~333-164588), filed on April 23, 2010.~~
~~(4) Incorporated by reference to~~001-34719).

* This certification accompanies the ~~Registrant's Current~~Quarterly Report on Form ~~8-K,~~10-Q to which it relates, is not deemed filed ~~on December 31, 2014.~~
~~(5) Incorporated~~with the Securities and Exchange Commission and is not to be incorporated by reference tointo any filing of Registrant under the ~~Registrant's Current Report on~~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 ~~8-K, filed on October 4, 2017.~~
~~(6) Incorporated by reference to the Registrant's Current Report on Form 8-K, filed on October 12, 2017.~~
~~(7) Incorporated by reference to the Registrant's Registration Statement on Form S-3 (File No. 333-222916)~~10-Q), ~~filed on February 7, 2018.~~

irrespective of any general incorporation language contained in such filing.

SIGNATURES

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


	S&W SEED COMPANY

Date: November 14, 2022	By:	/s/ ~~Matthew K. Szot~~ Elizabeth Horton
~~Matthew K. Szot~~		Elizabeth Horton
~~Executive Vice President of Finance and Administration and~~		Chief Financial Officer ~~(duly authorized on~~ (On behalf of the registrant ~~and~~ ~~principal financial~~in her capacity as Principal Financial and ~~accounting officer)~~Accounting Officer)

		Three Months Ended				Six Months Ended
		December 31,				December 31,
		2017		2016		2017		2016
Revenue	$	20,532,796	$	24,225,744	$	31,244,512	$	36,475,317

Cost of revenue		15,860,629		19,005,270		24,236,757		29,311,580

Gross profit		4,672,167		5,220,474		7,007,755		7,163,737

Operating expenses
Selling, general and administrative expenses		2,446,955		2,592,059		5,361,035		5,047,263
Research and development expenses		855,164		748,571		1,597,081		1,490,113
Depreciation and amortization		870,981		842,454		1,759,233		1,677,151
Disposal of property, plant and equipment gain		(15,413)		-		(81,776)		-

Total operating expenses		4,157,687		4,183,084		8,635,573		8,214,527

Income (loss) from operations		514,480		1,037,390		(1,627,818)		(1,050,790)

Other expense
Foreign currency loss (gain)		7,472		(2,837)		22,030		(6,483)
Change in derivative warrant liabilities		341,199		(959,200)		(431,300)		168,500
Change in contingent consideration obligations		-		57,282		-		164,363
Loss on equity method investment		-		-		-		49,249
Interest expense - amortization of debt discount		33,100		381,660		67,099		981,118
Interest expense - convertible debt and other		383,894		295,042		731,623		647,584

Income (loss) before income taxes		(251,185)		1,265,443		(2,017,270)		(3,055,121)
Provision (benefit) for income taxes		148,702		106,485		200,123		(996,923)
Net income (loss)	$	(399,887)	$	1,158,958	$	(2,217,393)	$	(2,058,198)

Net income (loss) per common share:
Basic	$	(0.02)	$	0.07	$	(0.11)	$	(0.12)
Diluted	$	(0.02)	$	0.01	$	(0.11)	$	(0.12)

Weighted average number of common shares outstanding:
Basic		21,130,960		17,821,547		20,643,973		17,467,370
Diluted		21,130,960		17,996,221		20,643,973		17,467,370

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

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

			Exercise Price	Expiration	Outstanding as			Outstanding as
	Issue Date		Per Share	Date	of June 30, 2017	New Issuances	Expired	of December 31, 2017

Warrants	Dec 2014	$	4.32	Jun 2020	2,699,999	-	-	2,699,999
					2,699,999	-	-	2,699,999

~~32.1~~
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~~2002.
~~32.2~~
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~~2002.
~~101.INS~~		~~XBRL Instance Document~~
~~101.SCH~~101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document
~~101.CAL~~
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
~~101.LAB~~
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
~~101.PRE~~
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
~~101.DEF~~
104		Cover Page Interactive Data File (embedded within the Inline XBRL ~~Taxonomy Extension Definition Linkbase Document~~document)