Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Sep. 18, 2019 | Dec. 31, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | S&W Seed Co | ||
Entity Central Index Key | 0001477246 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity File Number | 001-34719 | ||
Entity Tax Identification Number | 271275784 | ||
Entity Address, Address Line One | 106 K Street | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Sacramento | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95814 | ||
City Area Code | 559 | ||
Local Phone Number | 884-2535 | ||
Entity Public Float | $ 21,700,635 | ||
Entity Common Stock, Shares Outstanding | 33,283,695 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Trading Symbol | SANW |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Oct. 25, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 3,431,802 | $ 4,320,894 | $ 745,001 | |
Accounts receivable, net | 13,380,464 | 13,861,932 | ||
Inventories, net | 71,295,520 | 60,419,276 | ||
Prepaid expenses and other current assets | 1,687,490 | 1,279,794 | ||
Assets held for sale | 1,850,000 | 0 | ||
TOTAL CURRENT ASSETS | 91,645,276 | 79,881,896 | ||
Property, plant and equipment, net | 20,634,949 | 13,180,132 | ||
Intangibles, net | 32,714,484 | 33,109,780 | ||
Goodwill | 0 | $ 1,573,546 | 10,292,265 | 10,292,265 |
Other assets | 1,369,560 | 1,303,135 | ||
TOTAL ASSETS | 146,364,269 | 137,767,208 | ||
CURRENT LIABILITIES | ||||
Accounts payable | 6,930,829 | 5,935,454 | ||
Deferred revenue | 9,054,549 | 212,393 | ||
Accrued expenses and other current liabilities | 6,073,110 | 3,114,799 | ||
Lines of credit, net | 10,755,548 | 32,630,559 | ||
Current portion of long-term debt, net | 1,113,502 | 503,012 | ||
TOTAL CURRENT LIABILITIES | 33,927,538 | 42,396,217 | ||
Long-term debt, net, less current portion | 12,158,095 | 12,977,087 | ||
Other non-current liabilities | 280,424 | 651,780 | ||
TOTAL LIABILITIES | 46,366,057 | 56,025,084 | ||
STOCKHOLDERS' EQUITY | ||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | 0 | 0 | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 33,303,218 issued and 33,278,218 outstanding at June 30, 2019; 24,367,906 issued and 24,342,906 outstanding at June 30, 2018; | 33,303 | 24,367 | ||
Treasury stock, at cost, 25,000 shares | (134,196) | (134,196) | ||
Additional paid-in capital | 136,751,875 | 108,803,991 | ||
Accumulated deficit | (30,466,618) | (21,161,376) | ||
Accumulated other comprehensive loss | (6,138,467) | (5,790,662) | ||
Noncontrolling interests | (47,685) | 0 | ||
TOTAL STOCKHOLDERS' EQUITY | 99,998,212 | 81,742,124 | $ 61,221,655 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 146,364,269 | $ 137,767,208 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 33,303,218 | 24,367,906 |
Common stock, shares outstanding | 33,278,218 | 24,342,906 |
Treasury stock, shares | 25,000 | 25,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue | ||
Total revenue | $ 109,722,511 | $ 64,085,510 |
Cost of revenue | ||
Total cost of revenue | $ 69,014,490 | $ 49,332,052 |
Type of Cost, Good or Service [Extensible List] | us-gaap:LicenseMember | us-gaap:LicenseMember |
Gross profit | $ 40,708,021 | $ 14,753,458 |
Operating expenses | ||
Selling, general and administrative expenses | 17,486,071 | 10,503,020 |
Research and development expenses | 6,272,758 | 3,887,723 |
Depreciation and amortization | 4,128,546 | 3,439,287 |
Gain on disposal of property, plant and equipment | (86,222) | (82,980) |
Goodwill impairment charges | 11,865,811 | 0 |
Intangible asset impairment charges | 6,034,792 | 0 |
Total operating expenses | 45,701,756 | 17,747,050 |
Loss from operations | (4,993,735) | (2,993,592) |
Other expense | ||
Foreign currency gain | (99,467) | (12,584) |
Change in derivative warrant liabilities | 0 | (431,300) |
Change in estimated value of assets held for sale | 1,521,855 | 0 |
Reduction of anticipated loss on sub-lease land | (141,373) | 0 |
Interest expense - amortization of debt discount | 340,847 | 169,045 |
Interest expense | 2,886,077 | 1,863,288 |
Loss before income taxes | (9,501,674) | (4,582,041) |
Provision for income taxes | (148,747) | 143,049 |
Net loss | (9,352,927) | (4,725,090) |
Net loss attributed to noncontrolling interests | (47,685) | 0 |
Net loss attributable to S&W Seed Company | $ (9,305,242) | $ (4,725,090) |
Net loss attributable to S&W Seed Company per common share: | ||
Basic | $ (0.31) | $ (0.21) |
Diluted | $ (0.31) | $ (0.21) |
Weighted average number of common shares outstanding: | ||
Basic | 30,102,158 | 22,481,491 |
Diluted | 30,102,158 | 22,481,491 |
Product and Other | ||
Revenue | ||
Total revenue | $ 75,507,078 | $ 64,085,510 |
Licensing | ||
Revenue | ||
Total revenue | $ 34,215,433 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (9,352,927) | $ (4,725,090) |
Foreign currency translation adjustment, net of income taxes | (347,805) | (252,277) |
Comprehensive loss | (9,700,732) | (4,977,367) |
Comprehensive loss attributable to noncontrolling interests | (47,685) | |
Comprehensive loss attributable to S&W Seed Company | $ (9,653,047) | $ (4,977,367) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Beginning Balance, amount at Jun. 30, 2017 | $ 61,221,655 | $ 18,004 | $ (134,196) | $ 83,312,518 | $ (16,436,286) | $ (5,538,385) | ||
Beginning Balance, shares at Jun. 30, 2017 | 18,004,681 | (25,000) | ||||||
Stock-based compensation - options, restricted stock, and RSUs | 748,516 | 748,516 | ||||||
Net issuance to settle RSUs, amount | (115,319) | $ 103 | (115,422) | |||||
Net issuance to settle RSUs, shares | 103,225 | |||||||
Proceeds from sale of common stock, net of fees and expenses, amount | 22,459,339 | $ 6,260 | 22,453,079 | |||||
Proceeds from sale of common stock, net of fees and expenses, shares | 6,260,000 | |||||||
Reclassification of warrants upon expiration of repricing provisions | 2,405,300 | 2,405,300 | ||||||
Foreign currency translation adjustment, net of income taxes | (252,277) | (252,277) | ||||||
Net loss | (4,725,090) | (4,725,090) | ||||||
Ending Balance, amount at Jun. 30, 2018 | 81,742,124 | $ 24,367 | $ (134,196) | 108,803,991 | (21,161,376) | (5,790,662) | ||
Ending Balance, shares at Jun. 30, 2018 | 24,367,906 | (25,000) | ||||||
Stock-based compensation - options, restricted stock, and RSUs | 694,610 | 694,610 | ||||||
Net issuance to settle RSUs, amount | (39,314) | $ 93 | (39,407) | |||||
Net issuance to settle RSUs, shares | 92,595 | |||||||
Proceeds from sale of preferred stock, net of fees and expenses | 22,373,842 | $ 7 | 22,373,835 | |||||
Proceeds from sale of preferred stock, net of fees and expenses, shares | 7,235 | |||||||
Conversion of preferred stock to common stock | $ (7) | $ 7,235 | (7,228) | |||||
Conversion of preferred stock to common stock, shares | (7,235) | 7,235,000 | ||||||
Proceeds from sale of common stock, net of fees and expenses, amount | 4,927,682 | $ 1,608 | 4,926,074 | |||||
Proceeds from sale of common stock, net of fees and expenses, shares | 1,607,717 | |||||||
Foreign currency translation adjustment, net of income taxes | (347,805) | (347,805) | ||||||
Net loss | (9,352,927) | (9,305,242) | $ (47,685) | |||||
Ending Balance, amount at Jun. 30, 2019 | $ 99,998,212 | $ 33,303 | $ (134,196) | $ 136,751,875 | $ (30,466,618) | $ (6,138,467) | $ (47,685) | |
Ending Balance, shares at Jun. 30, 2019 | 33,303,218 | (25,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (9,352,927) | $ (4,725,090) |
Adjustments to reconcile net loss from operating activities to net cash provided by (used) in operating activities | ||
Stock-based compensation | 694,610 | 748,516 |
Change in allowance for doubtful accounts | 996,461 | 78,980 |
Inventory write-down | 8,822,103 | 482,250 |
Depreciation and amortization | 4,128,546 | 3,439,287 |
Gain on disposal of property, plant and equipment | (86,222) | (82,980) |
Goodwill impairment charges | 11,865,811 | 0 |
Intangible asset impairment charges | 6,034,792 | 0 |
Change in deferred tax provision | (270,083) | 0 |
Change in foreign exchange contracts | (52,778) | 272,801 |
Change in derivative warrant liabilities | 0 | (431,300) |
Change in estimated value of assets held for sale | 1,521,855 | 0 |
Amortization of debt discount | 340,847 | 169,045 |
Reduction of anticipated loss on sub-lease land | (141,373) | 0 |
Changes in: | ||
Accounts receivable | 307,209 | 9,207,302 |
Inventories | (13,331,376) | (29,860,271) |
Prepaid expenses and other current assets | (413,751) | (241,394) |
Other non-current asset | 203,132 | 259,683 |
Accounts payable | (830,718) | (1,052,624) |
Accounts payable - related parties | 0 | (336,494) |
Deferred revenue | 8,069,734 | (456,643) |
Accrued expenses and other current liabilities | 3,114,523 | 307,500 |
Other non-current liabilities | (324,564) | 21,191 |
Net cash provided by (used in) operating activities | 21,295,831 | (22,200,241) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Additions to property, plant and equipment | (735,316) | (1,187,307) |
Proceeds from disposal of property, plant and equipment | 567,492 | 45,830 |
Additions to internal use software | (43,000) | 0 |
Acquisition of germplasm assets | 0 | (295,034) |
Acquisition of business, net of cash acquired | (26,354,951) | 0 |
Net cash used in investing activities | (26,565,775) | (1,436,511) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net proceeds from sale of common stock | 4,927,682 | 22,459,339 |
Net proceeds from sale of preferred stock | 22,373,842 | 0 |
Taxes paid related to net share settlements of stock-based compensation awards | (39,314) | (115,319) |
Borrowings and repayments on lines of credit, net | (21,289,159) | 5,439,382 |
Payment of contingent consideration obligation | 0 | (2,500,000) |
Borrowings of long-term debt | 2,359,431 | 12,590,318 |
Debt issuance costs | (411,315) | (257,964) |
Repayments of long-term debt | (3,290,242) | (10,273,560) |
Net cash provided by financing activities | 4,630,925 | 27,342,196 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (250,073) | (129,551) |
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS | (889,092) | 3,575,893 |
CASH AND CASH EQUIVALENTS, beginning of the period | 4,320,894 | 745,001 |
CASH AND CASH EQUIVALENTS, end of period | 3,431,802 | 4,320,894 |
Cash paid (received) during the period for: | ||
Interest | 2,945,034 | 1,830,277 |
Income taxes | $ 69,713 | $ (150,139) |
Background and Organization
Background and Organization | 12 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
BACKGROUND AND ORGANIZATION | NOTE 1 - BACKGROUND AND ORGANIZATION Organization S&W Seed 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 incorporated a corporation with the same name in Delaware in October 2009, which is the successor entity to Seed Holding, LLC, having purchased a majority interest in the general partnership between June 2008 and December 2009. Following the Company’s initial public offering in May 2010, the Company purchased the remaining general partnership interests and became the sole owner of the general partnership’s original business. Seed Holding, LLC remains a consolidated subsidiary of the Company. In December 2011, the Company reincorporated in Nevada as a result of a statutory short-form merger of the Delaware corporation into its wholly-owned subsidiary, S&W Seed Company, a Nevada corporation. On April 1, 2013, the Company, together with its wholly-owned subsidiary, S&W Holdings Australia Pty Ltd, an Australia corporation (f/k/a S&W Seed Australia Pty Ltd “S&W Holdings”), consummated an acquisition of all of the issued and outstanding shares of Seed Genetics International Pty Ltd, an Australia corporation (“SGI”), from SGI’s shareholders. In April 2018, SGI changed its name to S&W Seed Company Australia Pty Ltd (“S&W Australia”). On September 19, 2018, the Company and AGT Foods Africa Proprietary Limited (“AGT”) formed a venture based in South Africa named SeedVision Proprietary Limited (“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. 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. The Company owns seed cleaning and processing facilities, which are located in Five Points, California, Nampa, Idaho, Dumas, Texas, New Deal, Texas and Keith, South Australia. The Company’s seed products are primarily grown under contract by farmers. The Company began its stevia initiative in fiscal year 2010 and is currently focused on breeding improved varieties of stevia and developing marketing and distribution programs for its stevia products. The Company has also been actively engaged in expansion initiatives through a combination of organic growth and strategic acquisitions, 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. (“Pioneer”). The Company had a long-term distribution agreement with Pioneer regarding conventional (non-GMO) varieties, and a production agreement with Pioneer (relating to GMO-traited varieties). These agreements were terminated on May 20, 2019. See Note 3 for further discussion. In May 2016, the Company acquired the assets and business of SV Genetics, a private Australian company specializing in the breeding and licensing of proprietary hybrid sorghum and sunflower seed germplasm, which represented the Company’s initial effort to diversify its product portfolio beyond alfalfa seed and stevia. In October 2018, the Company acquired substantially all of the assets of Chromatin, Inc., a U.S.-based sorghum genetics and seed company, as part of the Company's efforts to expand its penetration into the hybrid sorghum market. The Company’s operations span the world’s alfalfa seed production regions with operations in the San Joaquin and Imperial Valleys of California, Texas, five other U.S. states, Australia, and three provinces in Canada, and the Company sells its seed products in more than 30 countries around the globe. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of S&W Seed Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. 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, . The Company owns 51.0% of Sorghum Solutions South Africa, which is a variable interest entity as defined in ASC 810-10, Consolidation, . Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. We have recorded a combined $0.6 million of current assets (restricted) and $0.2 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2019. 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 Risks and Concentrations The Company’s revenue is principally derived from the sale of seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 65% of its revenue for the year ended June 30, 2019. One customer accounted for 62% of its revenue for the year ended June 30, 2018. One customer accounted for 19% of the Company’s accounts receivable at June 30, 2019. One customer accounted for 35% of the Company’s accounts receivable at June 30, 2018. The Company sells a substantial portion of its products to international customers. Sales to international markets represented 20% and 35% of revenue during the years ended June 30, 2019 and 2018, respectively. The net book value of fixed assets located outside the United States was 11% and 20% of total fixed assets at June 30, 2019 and June 30, 2018, respectively. Cash balances located outside of the United States may not be insured and totaled $236,822 and $369,803 at June 30, 2019 and June 30, 2018, respectively. The following table shows revenue from external sources by destination country: Years Ended June 30, 2019 2018 United States $ 88,176,809 80 % $ 41,662,556 65 % Saudi Arabia 4,745,993 4 % 1,461,368 2 % Australia 2,787,128 3 % 1,242,957 2 % Libya 2,629,750 2 % 936,423 1 % Mexico 2,264,827 2 % 4,932,105 8 % Pakistan 1,009,120 1 % 5,856 0 % Egypt 965,269 1 % 284,760 0 % Peru 905,580 1 % 1,844,898 3 % France 845,172 1 % 220,919 0 % Argentina 841,969 1 % 2,748,492 4 % Other 4,550,893 4 % 8,745,176 15 % Total $ 109,722,511 100 % $ 64,085,510 100 % International Operations The Company translates its foreign operations’ assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of operations. Revenue Recognition The Company adopted the provisions of ASC Topic 606, Revenue from Contracts with Customers ("Topic 606") as of July 1, 2018. See Note 4 for further discussion. Cost of Revenue The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue. Cash and Cash Equivalents For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation. Accounts Receivable The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $1,576,900 and $584,202 at June 30, 2019 and June 30, 2018, respectively. Inventories Inventories consist of seed and packaging materials. Inventories are stated at the lower of cost or net realizable value, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities. The Company’s subsidiary, S&W Australia, 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. S&W Australia 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. Inventory quality is a function of germination percentage. Our experience has shown that our alfalfa seed quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed as a material concern. Hybrid crops (sorghum and sunflower) seed quality may be affected by warehouse storage pests such as insects and rodents. The Company maintains a strict pest control program to mitigate risk and maximize hybrid seed quality. During the fourth quarter of the year ended June 30, 2019, the Company recognized a write-down of inventory in the amount of $8.8 million, which is included in Cost of Revenue in the Consolidated Statement of Operations. $4.8 million of this write-down related to dormant alfalfa seed products. The termination of the distribution and production agreements with Pioneer altered the Company’s planned consumption of these varieties and as a result the Company determined this particular dormant seed inventory will need to be sold to alternative sales channels at lower selling prices. The remaining inventory write-down primarily relates to changes in the Company’s assessment of the future market prices for non-dormant alfalfa seed varieties. The changes in the Company’s assessment occurred as it updated its business plans taking into account activity during the fourth quarter, which is the height of the sales season for non-dormant varieties. Components of inventory are: June 30, 2019 June 30, 2018 Raw materials and supplies $ 664,541 $ 344,620 Work in progress 5,664,934 2,775,398 Finished goods 64,966,045 57,299,258 $ 71,295,520 $ 60,419,276 Property, Plant and Equipment Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 5-35 years for buildings, 2-20 years for machinery and equipment, and 2-5 years for vehicles. Intangible Assets Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 5-20 years for customer relationships and trade names and 3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 17 years for customer relationships, 18 years for trade names and 19 years for other intangible assets. Goodwill Goodwill originated from acquisitions of Imperial Valley Seeds, Inc. (“IVS”) and S&W Australia in fiscal year 2013, the acquisition of the alfalfa business from Pioneer in fiscal year 2015, the acquisition of assets of SV Genetics in fiscal year 2016 and acquisition of substantially all of the assets of Chromatin, Inc. in fiscal year 2019. 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 quantitative goodwill impairment test. 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 as well as discounted cash flow analysis. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company performed a quantitative assessment of goodwill at June 30, 2019 and determined that goodwill was fully impaired. See Note 6 for further information. The Company performed a quantitative assessment of goodwill at June 30, 2018 and determined that goodwill was not impaired. Investment in Bioceres S.A. The Company owns less than 1% of Bioceres, S.A., a provider of crop productivity solutions headquartered in Argentina. The carrying value of the investment is $1.3 million at June 30, 2019 and 2018, and the investment is included in Other Assets on the Consolidated Balance Sheet. The Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities Investments – Equity Securities Prior to July 1, 2018, the investment was 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 would have been 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. No adjustments for impairment or observable transactions were made in fiscal years 2019 or 2018. Research and Development Costs The Company is engaged in ongoing research and development (“R&D”) of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset. Income Taxes Deferred tax assets and liabilities are determined based on differences between the financial statement and tax basis of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s effective tax rate for the years ended June 30, 2019 and 2018 has been affected by the valuation allowance on the Company’s deferred tax assets. Net Income (Loss) Per Common Share Data Basic net income (loss) per common share ("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, restricted stock awards, convertible debt and common stock warrants. 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 net number of shares assumed to be issued added to the denominator. The calculation of Basic and Diluted EPS is shown in the table below. Years Ended June 30, 2019 2018 Numerator: Net loss attributable to S&W Seed Company $ (9,305,242 ) $ (4,725,090 ) Numerator for basis EPS (9,305,242 ) (4,725,090 ) Effect of dilutive securities: Warrants — — — — Numerator for diluted EPS $ (9,305,242 ) $ (4,725,090 ) Denominator: Denominator for basic EPS-weighted- average shares 30,102,158 22,481,491 Effect of dilutive securities: Employee stock options — — Employee restricted stock units — — Warrants — — Dilutive potential common shares — — Denominator for diluted EPS - adjusted weighted average shares and assumed conversions 30,102,158 22,481,491 Basic EPS $ (0.31 ) $ (0.21 ) Diluted EPS $ (0.31 ) $ (0.21 ) The effects of employee stock options and stock units, and warrants are excluded because they would be anti-dilutive due to the Company’s net loss. 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 3 and Note 6 for impairment discussion. Derivative Financial Instruments Foreign Exchange Contracts The Company’s subsidiary, S&W Australia, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts. The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging”, which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company’s foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings. Fair Value of Financial Instruments The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows: • Level 1. Observable inputs such as quoted prices in active markets; • Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The assets acquired and liabilities assumed in the Chromatin acquisition were valued at fair value on a non-recurring basis as of October 25, 2018. The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates. Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows: Fair Value Measurements as of June 30, 2019 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ — $ 42,255 $ — Total $ — $ 42,255 $ — Fair Value Measurements as of June 30, 2018 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ — $ 100,138 $ — Total $ — $ 100,138 $ — During the years ended June 30, 2019 and June 30, 2018, a change in derivative warrant liability of $0 and $431,300 were recorded in earnings, respectively. Upon expiration of the round-down pricing protection on December 31, 2017, the warrants were reclassified from derivative warrant liabilities to equity. During the years ended June 30, 2019 and June 30, 2018, there was no change in the contingent consideration obligations. The DuPont contingent consideration was settled on December 1, 2017. Recently Adopted Accounting Pronouncements The Company adopted Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04") effective July 1, 2018. 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. The new guidance was applied during the goodwill impairment test in the fourth quarter of 2019. See Note 6. The Company adopted Topic 606 as of July 1, 2018. This ASC topic outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most previously existing revenue recognition guidance under U.S. GAAP. The core principle of Topic 606 is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted Topic 606 using the modified retrospective approach. The adoption did not result in a cumulative effect adjustment as of July 1, 2018. The adoption of Topic 606 had a significant effect on the Company's accounting for its distribution and production agreements with Pioneer for the year ended June 30, 2019. There were no other changes in the Company's accounting as a result of the adoption of Topic 606. The change in the accounting for the distribution and production agreements with Pioneer arose from the provisions of Topic 606 regarding the determination of whether a performance obligation is satisfied at a point in time or over time. Under those provisions, a performance obligation is considered to be satisfied over time if the company's performance creates an asset that the customer controls as the asset is created or enhanced; or the work to satisfy the performance obligation does not create an asset with alternative future use to the vendor and the customer has an obligation to pay for work completed. Under the agreements, Pioneer submitted a demand plan to the Company in advance of the growing season specifying the amount of seed that it intended to order for the upcoming sales year. Once the demand plan was submitted, Pioneer could not cancel or reduce the amount of seed that it was obligated to purchase under the agreements. In addition, the Company was not permitted to sell products produced for Pioneer under the agreements to other customers. Therefore, under Topic 606, the performance obligation was satisfied, and revenue was recognized, over time, as the Company took delivery of, processed, and packaged the seed. Prior to the adoption of Topic 606, revenue related to the Pioneer agreement was recognized when seed was delivered to Pioneer. Costs incurred to purchase and process seed were capitalized as inventory until the product was delivered. As the Company adopted Topic 606 using the modified retrospective approach, figures for fiscal 2018 have not been adjusted and continue to reflect the prior accounting policies. The change in accounting for the Pioneer contract did not result in a cumulative effect adjustment, because all seed produced for Pioneer in previous growing seasons had been delivered, and revenue recognized, prior to July 1, 2018, and no seed had been received prior to July 1, 2018 related to the current growing season. However, the change did not materially affect the amount of revenue and costs recognized for the year ended June 30, 2019. The effects of the new accounting for the Pioneer contracts on the Company's financial statements are shown below: Year Ended June 30, 2019 As Reported Adjustments Balances Without Adoption of ASC 606 Revenue Product and other $ 75,507,078 $ (1,837,392 ) $ 73,669,686 Licensing 34,215,433 — 34,215,433 Total revenue 109,722,511 (1,837,392 ) 107,885,119 Cost of revenue Product and other 69,014,490 (1,522,606 ) 67,491,884 Total cost of revenue 69,014,490 (1,522,606 ) 67,491,884 Gross profit 40,708,021 (314,786 ) 40,393,235 Operating expenses Selling, general and administrative expenses 17,486,071 - 17,486,071 Research and development expenses 6,272,758 - 6,272,758 Depreciation and amortization 4,128,546 - 4,128,546 Gain on disposal of property, plant and equipment (86,222 ) - (86,222 ) Goodwill impairment charges 11,865,811 - 11,865,811 Intangible asset impairment charges 6,034,792 - 6,034,792 Total operating expenses 45,701,756 - 45,701,756 Loss from operations (4,993,735 ) (314,786 ) (5,308,521 ) Other expense Foreign currency gain (99,467 ) - (99,467 ) Change in estimated value of assets held for sale 1,521,855 - 1,521,855 Reduction of anticipated loss on sub-lease land (141,373 ) - (141,373 ) Interest expense - amortization of debt discount 340,847 - 340,847 Interest expense 2,886,077 - 2,886,077 Loss before income taxes (9,501,674 ) (314,786 ) (9,816,460 ) Provision for income taxes (148,747 ) (1,864 ) (150,611 ) Net loss $ (9,352,927 ) $ (312,922 ) $ (9,665,849 ) Net loss attributed to noncontrolling interests (47,685 ) - - Net loss attributable to S&W Seed Company $ (9,305,242 ) $ (312,922 ) $ (9,665,849 ) Net income (loss) per common share: Basic $ (0.31 ) $ (0.01 ) $ (0.32 ) Diluted $ (0.31 ) $ (0.01 ) $ (0.32 ) Weighted average number of common shares outstanding: Basic 30,102,158 - 30,102,158 Diluted 30,102,158 - 30,102,158 June 30, 2019 As Reported Adjustments Balances Without Adoption of ASC 606 ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,431,802 $ — $ 3,431,802 Accounts receivable, net 13,380,464 (1,837,392 ) 11,543,072 Inventories, net 71,295,520 1,522,606 72,818,126 Prepaid expenses and other current assets 1,687,490 1,864 1,689,354 Assets held for sale 1,850,000 — 1,850,000 TOTAL CURRENT ASSETS 91,645,276 (312,922 ) 91,332,354 Property, plant and equipment, net 20,634,949 — 20,634,949 Intangibles, net 32,714,484 — 32,714,484 Goodwill — — — Other assets 1,369,560 — 1,369,560 TOTAL ASSETS $ 146,364,269 $ (312,922 ) $ 146,051,347 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 6,930,829 $ — $ 6,930,829 Deferred revenue 9,054,549 — 9,054,549 Accrued expenses and other current liabilities 6,073,110 — 6,073,110 Lines of credit, net 10,755,548 — 10,755,548 Current portion of long-term debt, net 1,113,502 — 1,113,502 TOTAL CURRENT LIABILITIES 33,927,538 — 33,927,538 Long-term debt, net, less current portion 12,158,095 — 12,158,095 Other non-current liabilities 280,424 — 280,424 TOTAL LIABILITIES 46,366,057 — 46,366,057 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; 33,303,218 issued and 33,278,218 outstanding at June 30, 2019; 24,367,906 issued and 24,342,906 outstanding at June 30, 2018; 33,303 — 33,303 Treasury stock, at cost, 25,000 shares (134,196 ) — (134,196 ) Additional paid-in capital 136,751,875 — 136,751,875 Accumulated deficit (30,466,618 ) (312,922 ) (30,779,540 ) Accumulated other comprehensive loss (6,138,467 ) — (6,138,467 ) Noncontrolling interests (47,685 ) — (47,685 ) TOTAL STOCKHOLDERS' EQUITY 99,998,212 (312,922 ) 99,685,290 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 146,364,269 $ (312,922 ) $ 146,051,347 Topic 606 also requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. Those disclosures can also be found in Note 4. Recently Issued, but Not Yet Adopted, Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02: Leases |
Pioneer Relationship
Pioneer Relationship | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
PIONEER RELATIONSHIP | NOTE 3 – PIONEER RELATIONSHIP Distribution and Production Agreements with Pioneer In 2014, the Company purchased from Pioneer certain assets related to alfalfa and entered into a long-term contract to sell alfalfa seed to Pioneer under a production agreement (GMO varieties) and a distribution agreement (conventional varieties). Under the production and distribution agreements with Pioneer, the Company grew, processed, and delivered alfalfa seed for and to Pioneer. See Note 4 for a discussion of the recognition of revenue under these agreements. On May 22, 2019, the Company and Pioneer terminated the production and distribution agreements. As part of the termination, Pioneer’s parent company, Corteva, agreed to purchase from the Company certain quantities of seed held by the Company as of that date that Pioneer was not previously obligated to purchase. Those quantities of seed will be delivered to Corteva periodically through February 2021. The Company does not expect to sell any other products to Pioneer or Corteva beyond those quantities of seed. In conjunction with the termination of the Pioneer production and distribution agreements, the Company recorded a $6.0 million impairment charge on its intangible assets related to the Pioneer distribution agreements for the year ended June 30, 2019. In addition, the termination of this relationship was a significant factor leading to the $11.9 million impairment of goodwill. License Agreement with Corteva Contemporaneously with the termination, the Company entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of the Company's alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the Company's existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties. The Company also assigned to Corteva grower production contract rights, and Corteva assumed grower production contract obligations, related to the licensed and certain other alfalfa varieties. Corteva received no license to the Company's other commercial alfalfa varieties or pre-commercial alfalfa pipeline products and no rights to any future products developed by the Company. Payments Due from Corteva and Pioneer The Company received a payment of $45 million in May 2019 from Pioneer/Corteva, and will receive quarterly payments through February 2021, which total approximately $25 million. Approximately $34.2 million of these amounts referenced above has been allocated to the license to the Company’s alfalfa varieties. The $34.2 million is reported as licensing revenue in the consolidated statement of operations for the year ended June 30, 2019. The remaining amounts will be recognized as revenue as the seed is delivered to Corteva through February 2021. The amount allocated to the seed represents the estimated standalone selling price of those quantities of seed, determined based on the Company’s normal profit margin on the quantities and varieties of seed that Corteva agreed to purchase. The Company allocated approximately $1.8 million to an unbilled receivable related to revenue recognition at contract termination and the remainder of the payments was allocated to the license using a residual method approach. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Jun. 30, 2019 | |
Revenues [Abstract] | |
REVENUE RECOGNITION | NOTE 4 - REVENUE RECOGNITION The Company adopted the provisions of Topic 606 as of July 1, 2018. As the Company adopted Topic 606 using the modified retrospective approach, comparative figures have not been revised and are still reported under prior accounting standards. The Company derives its revenue from 1) the sale of seed, 2) milling services 3) research and development services and 4) product licensing agreements. The following table disaggregates the Company's revenue by type of contract 1 Years Ended June 30, 2019 2018 ASC 606 ASC 605 ASC 605 Distribution and production agreements - Pioneer $ 37,605,215 $ 35,767,823 $ 39,522,568 Other product sales 37,647,297 37,647,297 24,152,667 Licensing 34,215,433 34,215,433 - Services 254,566 254,566 410,275 $ 109,722,511 $ 107,885,119 $ 64,085,510 1 Distribution and Production Agreements with Pioneer Under the production and distribution agreements with Pioneer, the Company grew, processed, and delivered alfalfa seed for and to Pioneer. The Company concluded that none of the individual activities performed under these contracts were distinct, as the customer was contracting for processed and packaged product. Until those contracts were terminated in May 2019 (see Note 3), Pioneer submitted a demand plan to the Company in advance of the growing season specifying the amount of seed that it intends to order for the upcoming sales year. The Company was required to use commercially reasonable efforts to arrange for the requisite amount of seed to be grown, processed and packaged. Once the demand plan was submitted, Pioneer was committed to at least that amount of seed. In addition, the Company was not permitted to sell products produced for Pioneer under the agreements to other customers. Therefore, as provided in Topic 606, the Company recognized revenue from these agreements over time in 2019, as it incurred costs to fulfill its obligations. To the extent the Company produced more product than Pioneer specified in its demand plan, the Company was required to first offer such product to Pioneer. If Pioneer did not purchase such excess product, the Company was permitted to sell the excess product to other customers subject to certain limitations. The agreements specified prices per finished unit which were adjusted each year, up or down, based on current market conditions, by a maximum of 4% per year. The prices for a given crop year were determined one year in advance of the beginning of the sales season. The Company concluded that cost was the best measure of progress under these contracts because no other measure adequately reflected the value added to the product by each of the Company's major tasks - having the crop grown, processing, and packaging. As the Company typically contracted out the growing of seed to third parties, the vast majority of the Company's costs under these agreements were incurred, and therefore the vast majority of the revenue from such agreements was recognized, when the raw seed was purchased from the third-party contract growers. The rest of the costs were incurred, and therefore the rest of the revenue was recognized, as the Company processed and packaged the product. As of the date of the termination of the production and distribution agreements with Pioneer (see Note 3), all seed covered by the active demand plan had been grown, processed and packaged. Prior to the adoption of Topic 606, revenue from these agreements was recognized when risk and title to the product was transferred, which generally occurred upon shipment. Licensing Contemporaneously with the termination in Note 3, the Company entered into a license with Corteva, under which Corteva received a fully pre-paid, exclusive license to produce and distribute certain of the Company's alfalfa seed varieties world-wide (except South America). The licensed seed varieties include certain of the Company's existing commercial conventional (non-GMO) alfalfa varieties and six pre-commercial dormant alfalfa varieties. Other Product Sales Revenue from other product sales is recognized at the point in time at which control of the product is transferred to the customer. Generally, this occurs upon shipment of the product. Pricing for such transactions is negotiated and determined at the time the contracts are signed. We have elected the practical expedient that allows us to account for shipping and handling activities as a fulfillment cost, and we accrue those costs when the related revenue is recognized. The Company has certain contracts with customers that offer a limited right of return on certain branded products. The products must be in an unopened and undamaged state and must be resalable in the sole opinion of the Company to qualify for refund. Returns are only accepted on product received by August 31 st Services Revenue from milling services, which are performed on the customer's product, is recognized as services are completed and the milled product is delivered to the customer. Revenue from research and development services is recognized over time as the services are performed. R&D services are generally paid for in advance. In fiscal 2019, R&D revenue relates to a single contract in which the customer may decide annually whether to continue the arrangement. Revenue is recognized straight-line over time, as services are expected to be provided roughly evenly throughout the year. Payment Terms and Related Balance Sheet Accounts Accounts receivable represent amounts that are payable to the Company by its customers subject only to the passage of time. Payment terms on invoices are generally 30 to 120 days. As the period between the transfer of goods and/or services to the customer and receipt of payment is less than one year, the Company does not separately account for a financing component in its contracts with customers. Unbilled receivables represent contract assets that arise when the Company has partially performed under a contract, but is not yet able to invoice the customer until the Company has made additional progress. Unbilled receivables arose from the distribution and production agreements with Pioneer for which the Company recognized revenue over time, as the Company bills for these arrangements upon product delivery, while revenue was recognized, as described above, as costs were incurred. Unbilled receivables may arise as much as three months before billing is expected to occur. Unbilled receivables are generally expected to be generated in the first and second fiscal quarters, and to be billed in the second, third and fourth fiscal quarters. Losses on accounts receivable and unbilled receivables are recognized if and when it becomes probable that amounts will not be paid. These losses are reversed in subsequent periods if these amounts are paid. During the year ended June 30, 2019, the Company recognized bad debt expense of $996,461 associated with impaired accounts receivable. Deferred revenue represents payments received from customers in advance of completion of the Company's performance obligation. |
Business Combinations
Business Combinations | 12 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | NOTE 5 - BUSINESS COMBINATIONS On October 25, 2018, the Company completed the acquisition of substantially all of the assets of Chromatin, Inc. (together with certain of its subsidiaries and affiliates in receivership, "Chromatin"), as well as the assumption of certain contracts and limited specified liabilities of Chromatin, for an aggregate cash purchase price of approximately $26.5 million (the "Acquisition"), pursuant to the terms of its Asset Purchase Agreement, dated September 14, 2018, with Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin ("Novo"). The acquisition expanded the Company's sorghum production capabilities, diversified its product offerings and provided access to new distribution channels. The Acquisition has been accounted for as a business combination, and the Company valued and recorded all assets acquired and liabilities assumed at their estimated fair values on the date of the Acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of October 25, 2018: October 25, 2018 Cash and cash equivalents $ 95,049 Accounts receivable 947,015 Inventories 6,959,936 Prepaid expenses and other current assets 16,501 Property, plant and equipment 10,193,620 Assets held for sale 1,930,400 In-process research and development 380,000 Technology/IP - germplasm 7,200,000 Trade names 150,000 Goodwill 1,573,546 Current liabilities (2,881,198 ) Noncurrent liabilities (114,869 ) Total acquisition cost allocated $ (26,450,000 ) Management determined that one of the facilities acquired as part of the Chromatin acquisition would not be operated and is being held for sale. The components of that facility are: Land and improvements 320,000 Buildings and improvements 1,380,000 Machinery and equipment 332,000 Less: Costs to sell (101,600 ) Less: Fair value adjustment subsequently recorded (1,230,400 ) Assets held for sale $ 700,000 Management expects the sale to be completed within 12 months and plans to pay down a portion of the Company's short-term debt with the proceeds, accordingly, these held for sale assets are presented as current assets. The estimated fair value of accounts receivable acquired is $947,015, with the gross contractual amount totaling $2,164,476, less $1,217,461 expected to be uncollectible. The current liabilities assumed relate to inventory acquired in the acquisition as well as customer deposits. The excess of the purchase price over the fair value of the net assets acquired, amounting to $1,573,546, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to control the acquired business, technology, and the distribution channels. Goodwill is not amortized for financial reporting purposes, but is amortized for tax purposes. Management assigned fair values to the identifiable intangible assets through a combination of the relief from royalty method, the multi-period excess earnings method, and the replacement cost method. In-process research and development costs are being accounted for as an indefinite lived intangible asset subject to impairment testing until completion or abandonment of research and development efforts associated with the in-process projects. Upon successful completion of each project, the Company will make a determination about the then remaining useful life of the intangible asset and begin amortization. The values and useful lives of the acquired intangibles are as follows: Estimated Useful Life (Years) Estimated Fair Value In-process research and development n/a $ 380,000 Technology/IP - germplasm 30 7,200,000 Trade names 5 150,000 Total identifiable intangible assets $ 7,730,000 The Company incurred acquisitions costs of $1,196,476 during the year ended June 30, 2019 that have been recorded in selling, general and administrative expenses on the consolidated statement of operations. The results of the Chromatin acquisition are included in our consolidated financial statements from the date of acquisition through June 30, 2019. The revenue and net loss (including transaction costs) of Chromatin operations included in our consolidated statements of operations were $12.4 million and $1.7 million, for the period from October 25, 2018 through June 30, 2019. The following unaudited pro forma financial information presents results as if the Acquisition occurred on July 1, 2017. Years Ended June 30, 2019 June 30, 2018 Revenue $ 111,359,688 $ 76,847,561 Net loss $ (11,179,299 ) $ (11,729,205 ) For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2019 include: (i) the elimination of acquisition expenses of $1,196,476; (ii) amortization of acquired intangibles of $132,222; and (iii) depreciation of acquired property, plant and equipment of $358,273. For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2018 include: (i) amortization of acquired intangibles of $396,667; and (ii) depreciation of acquired property, plant and equipment of $1,074,780. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6 – GOODWILL AND INTANGIBLE ASSETS During the fourth quarter of the year ended June 30, 2019, the Company terminated its production and distribution agreements with Pioneer, thereby triggering a potential indicator of goodwill impairment. As a result, the Company initiated a goodwill impairment test for the year ended June 30, 2019. The Company compared the carrying value of its invested capital to its estimated fair values at June 30, 2019. The Company estimated the fair value based on the income approach. The discounted cash flows served as the primary basis for the income approach and were based on discrete financial forecasts developed by management. Cash flows beyond the discrete forecast period of ten years were estimated using the perpetuity growth method calculation. The income approach valuation included estimated weighted average cost of capital, which was 10.6%. Upon completing the impairment test, the Company determined that the fair value of invested capital was less than the carrying value by approximately 10%, thus indicating an impairment. The Company recognized a goodwill impairment charge of $11.9 million for the year ended June 30, 2019, which represented the entire goodwill balance prior to the impairment charge. The following table summarizes the activity of goodwill for the years ended June 30, 2019 and 2018, respectively. Balance at July 1, 2018 Additions Impairment Balance at June 30, 2019 Goodwill $ 10,292,265 $ 1,573,546 $ (11,865,811 ) $ — Balance at July 1, 2017 Additions Impairment Balance at June 30, 2018 Goodwill $ 10,292,265 $ — $ — $ 10,292,265 For the year ended June 30, 2019, the Company recorded an impairment charge on its intangible assets of $6.0 million. Refer to Note 3 for further information. Intangible assets consist of the following: Balance at July 1, 2018 Additions Impairment Amortization Balance at June 30, 2019 Trade name $ 1,159,826 $ 150,000 $ — $ (104,480 ) $ 1,205,346 Customer relationships 1,156,955 — — (101,208 ) 1,055,747 Non-compete 62,720 — — (32,453 ) 30,267 GI customer list 71,639 — — (7,164 ) 64,475 Supply agreement 1,077,783 — — (75,629 ) 1,002,154 Distribution agreement 6,344,253 — (5,991,792 ) (352,461 ) — Grower relationships 1,753,208 — — (105,408 ) 1,647,800 Intellectual property 20,873,393 7,200,000 — (1,286,925 ) 26,786,468 In process research and development — 380,000 — — 380,000 Internal use software 610,003 43,000 (43,000 ) (67,776 ) 542,227 $ 33,109,780 $ 7,773,000 $ (6,034,792 ) $ (2,133,504 ) $ 32,714,484 Balance at July 1, 2017 Additions Impairment Amortization Balance at June 30, 2018 Trade name $ 1,244,306 $ — $ — $ (84,480 ) $ 1,159,826 Customer relationships 1,258,163 — — (101,208 ) 1,156,955 Non-compete 102,035 — — (39,315 ) 62,720 GI customer list 78,803 — — (7,164 ) 71,639 Supply agreement 1,153,415 — — (75,632 ) 1,077,783 Distribution agreement 6,728,753 — — (384,500 ) 6,344,253 Production agreement 111,670 — — (111,670 ) — Grower relationships 1,858,616 — — (105,408 ) 1,753,208 Intellectual property 21,725,539 295,034 — (1,147,180 ) 20,873,393 Internal use software 677,779 — — (67,776 ) 610,003 $ 34,939,079 $ 295,034 $ — $ (2,124,333 ) $ 33,109,780 Amortization expense totaled $2,133,504 and $2,124,333 for the years ended June 30, 2019 and 2018, respectively. Estimated aggregate remaining amortization is as follows: 2020 2021 2022 2023 2024 Thereafter Amortization expense $ 1,867,303 $ 1,848,480 $ 1,848,480 $ 1,843,188 $ 1,822,728 $ 23,484,305 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 7 - PROPERTY, PLANT AND EQUIPMENT Components of property, plant and equipment were as follows: June 30, 2019 June 30, 2018 Land and improvements $ 2,150,085 $ 2,068,742 Buildings and improvements 10,018,108 8,888,196 Machinery and equipment 12,579,698 5,731,293 Vehicles 2,099,814 1,130,276 Construction in progress 66,921 220,089 Total property, plant and equipment 26,914,626 18,038,596 Less: accumulated depreciation (6,279,677 ) (4,858,464 ) Property, plant and equipment, net $ 20,634,949 $ 13,180,132 Depreciation expense totaled $1,995,042 and $1,314,954 for the years ended June 30, 2019 and 2018, respectively. |
Debt
Debt | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 8 - DEBT Total debt outstanding is presented on the consolidated balance sheet as follows: June 30, 2019 June 30, 2018 Working capital lines of credit KeyBank $ 2,350,000 $ 25,050,464 National Australia Bank Limited 8,426,400 7,697,040 National Australia Bank Limited Overdraft Facility 351,544 — Debt issuance costs (372,396 ) (116,945 ) Total working capital lines of credit, net $ 10,755,548 $ 32,630,559 Current portion of long-term debt Capital lease $ 563,087 $ 27,241 Debt issuance costs (11,070 ) $ — Keith facility (building loan) - National Australia Bank Limited 73,731 3,701 Keith facility (machinery & equipment loans) - National Australia Bank Limited 215,519 198,251 Unsecured subordinate promissory note 100,000 100,000 Secured real estate note - Conterra 247,942 229,789 Debt issuance costs (75,707 ) (76,981 ) Secured equipment note - Conterra — 37,824 Debt issuance costs — (16,813 ) Total current portion, net 1,113,502 503,012 Long-term debt, less current portion Capital lease 1,709,481 — Debt issuance costs (15,078 ) — Keith facility (building loan) - National Australia Bank Limited 256,303 421,857 Keith facility (machinery & equipment loans) - National Australia Bank Limited 309,988 431,754 Secured real estate note - Conterra 9,922,269 10,170,211 Debt issuance costs (24,869 ) (100,576 ) Secured equipment note - Conterra — 2,062,176 Debt issuance costs — (8,335 ) Total long-term portion, net 12,158,095 12,977,087 Total debt, net $ 13,271,596 $ 13,480,099 In September 2015, the Company entered into a credit and security agreement (the “KeyBank Credit Facility”) with KeyBank. Key provisions of the KeyBank Credit Facility, as amended, include: • An aggregate principal amount that the Company may borrow, repay and reborrow, of up to $45.0 million in the aggregate, subject to a requirement that the Company 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). • All amounts due and owing, including, but not limited to, accrued and unpaid principal and interest, will be payable in full on December 31, 2020; provided that on or after January 15, 2020, KeyBank may deliver notice of termination of the facility to the Company specifying a termination date no earlier than 30 days after the date of the notice. • A borrowing base of up to the total of the following: (a) 85% of eligible domestic accounts receivable, plus (b) and 90% of eligible foreign accounts receivable, plus (c) the lesser of (i) 75% of the cost eligible inventory or (ii) 90% of the net orderly liquidation value of the inventory, plus (d) the amount of any unencumbered cash the Company holds at KeyBank, minus (e) $16.0 million subject to lender reserves. • Loans may be based on a Base Rate or Eurodollar Rate (which is increased by an applicable margin of 2.9% per annum for Eurodollar Loans and 1.0% for Base Rate Loans) (both as defined in the KeyBank Credit Facility), generally at the Company’s option. In the event of a default, at the option of KeyBank, the interest rate on all obligations owing will increase by 3% per annum over the rate otherwise applicable. • Subject to certain exceptions, the KeyBank Credit Facility is secured by a first priority perfected security interest in all of the Company’s now owned and after acquired tangible and intangible assets and its domestic subsidiaries, which have guaranteed the Company’s obligations under the KeyBank Credit Facility. The KeyBank Credit Facility is further secured by a lien on, and a pledge of, 65% of the stock of its wholly-owned subsidiary, S&W Holdings Australia Pty Ltd. • At June 30, 2019, the Company was in compliance with all KeyBank debt covenants. In November 2017, the Company entered into a secured note financing transaction (the "Loan Transaction") with Conterra Agricultural Capital, LLC ("Conterra") for $12.5 million in gross proceeds. Pursuant to the Loan Transaction, the Company issued two secured promissory notes (the "Notes") to Conterra as follows: • Secured Real Estate Note Secured Equipment Note On August 15, 2018, the Company completed a sale and leaseback transaction with American AgCredit involving certain equipment located at the Company's Five Points, California and Nampa, Idaho production facilities. Due to its terms, the sale and leaseback transaction was required to be accounted for as a financing arrangement. Accordingly, the proceeds received from American AgCredit were accounted for as proceeds from a debt financing. Under the terms of the transaction: • The Company sold the equipment to American AgCredit for $2,106,395 million in proceeds. The proceeds were used to pay off in full a note (in the principal amount of $2,081,527, plus accrued interest of $24,868) held by Conterra Agricultural Capital, LLC, which had an interest rate of 9.5% per annum and was secured by, among other things, the equipment. • The Company entered into a lease agreement with American AgCredit relating to the equipment. The lease agreement has a five-year term and provides for monthly lease payments of $40,023 (representing an annual interest rate of 5.6%). At the end of the lease term, the Company will repurchase the equipment for $1. S&W Australia finances the purchase of most of its seed inventory from growers pursuant to a seasonal credit facilities with National Australia Bank Ltd (“NAB”). The current facilities (the “NAB Facilities”) were amended as of July 9, 2019 and expire on March 31, 2021. As of June 30, 2019, AUD $12,504,633 (USD $8,780,753) was outstanding under the NAB Facilities. The NAB Facilities, as recently amended, comprise two distinct facility lines: (i) an overdraft facility (the “Overdraft Facility”), having a credit limit of AUD $2,000,000 (USD $1,404,400) and a borrowing base facility (the “Borrowing Base Facility”), having a credit limit of AUD $13,000,000 (USD $9,128,600). The Borrowing Base Facility permits S&W Australia to borrow funds for periods of up to 180 days, at S&W Australia’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. As of June 30, 2019, the Borrowing Base Facility accrued interest on Australian dollar drawings at approximately 4.75% calculated daily. The Borrowing Base Facility is secured by a lien on all the present and future rights, property and undertakings of S&W Australia, the mortgage on S&W Australia’s Keith, South Australia property and the Company’s corporate guarantee (up to a maximum of AUD $15,000,000). The Overdraft Facility permits S&W Australia to borrow funds on a revolving line of credit up to the credit limit. Interest accrues daily and is calculated by applying the daily interest rate to the balance owing at the end of the day and is payable monthly in arrears. As of June 30, 2019, the Overdraft Facility accrued interest at approximately 6.77% calculated daily. For both the Overdraft Facility and the Borrowing Base Facility, interest 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. Both facilities constituting the NAB Facilities are secured by a fixed and floating lien over all the present and future rights, property and undertakings of S&W Australia and are guaranteed by the Company as noted above. The NAB Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate S&W Australia’s outstanding obligations, all as set forth in the NAB facility agreements. S&W Australia was in compliance with all NAB debt covenants at June 30, 2019. In January 2015, NAB and S&W Australia entered into a new business markets – flexible rate loan (the “Keith Building Loan”) and a separate machinery and equipment facility (the “Keith Machinery and Equipment Facility”). In February 2016, NAB and S&W Australia also entered into a master asset finance facility (the “Master Assets Facility”). The Master Asset Facility has various maturity dates through 2023 and have interest rates ranging from 4.89% to 5.31%. The Keith Building Loan and Keith Machinery and Equipment Facility are used for the construction of a building on S&W Australia’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 (5.79% as of June 30, 2019). 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 quoted by NAB at the time of the drawdown, plus 2.9%. The Keith Credit Facilities contain customary representations and warranties, affirmative and negative covenants and customary events of default that permit NAB to accelerate S&W Australia’s outstanding obligations, all as set forth in the facility agreement. They are secured by a lien on all the present and future rights, property and undertakings of S&W Australia, the Company’s corporate guarantee and a mortgage on S&W Australia’s Keith, South Australia property. The annual maturities of short-term and long-term debt are as follows: Fiscal Year Amount 2020 $ 1,200,279 2021 10,764,617 2022 705,216 2023 582,859 2024 145,349 Thereafter — Total $ 13,398,320 |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 - INCOME TAXES Loss before income taxes consists of the following: Years Ended June 30, 2019 2018 United States $ (9,336,700 ) $ (5,112,254 ) Foreign (164,974 ) 530,213 Loss before income taxes $ (9,501,674 ) $ (4,582,041 ) Significant components of the provision for income taxes from continuing operations are as follows: Years Ended June 30, 2019 2018 Current: Federal $ — $ — State 28,591 — Foreign 92,744 100,122 Total current provision 121,335 100,122 Deferred: Federal (227,142 ) 20,785 State (42,940 ) 22,142 Foreign — — Total deferred provision (benefit) (270,082 ) 42,927 (Benefit) Provision for income taxes $ (148,747 ) $ 143,049 The differences between the total calculated income tax provision and the expected income tax computed using the U.S. federal income tax rate are as follows: Years Ended June 30, 2019 2018 Tax benefit at statutory tax rate $ (1,995,352 ) $ (1,262,509 ) State benefit, net of federal benefit (304,015 ) (133,666 ) Mark to market on financial instruments - (118,838 ) Section 965 toll tax - 584,086 Other permanent differences 23,786 (144,049 ) Federal and state research credits - current year (228,039 ) (89,572 ) Foreign rate differential 10,819 (971 ) Shortfall on restricted stock vest 49,118 155,783 Change in unrecognized tax benefit 49,939 - Tax Cuts and Jobs Act - 3,264,391 Valuation allowance 2,265,361 (2,145,250 ) Other (20,364 ) 33,644 $ (148,747 ) $ 143,049 On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“the Tax Act”). The Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate income tax rate (“federal tax rate”) from 35% to 21% effective January 1, 2018, implementing a modified territorial tax system, and imposing a mandatory one-time transition tax on accumulated earnings of foreign subsidiaries. The total tax charge as a result of the Tax Act was $3.8 million, consisting of $0.5 million of tax expense for the U.S. transition tax on accumulated earnings of foreign subsidiaries and $3.3 million of tax expense for DTA re-measurement. Significant components of the Company's deferred tax assets are shown below. June 30, 2019 2018 Deferred tax assets: Net operating loss carry forwards $ 5,817,688 $ 6,771,974 Compensation accruals 261,365 144,550 Allowance for bad debts 1,376,388 151,972 Stock compensation 288,648 241,837 Tax credit carry forwards 662,283 434,245 Intangible assets 2,226,539 — Deferred Rent 47,226 90,466 Assets held for sale 367,387 — Other, net 476,411 277,065 Total deferred tax assets 11,523,935 8,112,109 Valuation allowance for deferred tax assets (9,774,130 ) (7,506,759 ) Deferred tax assets, net of valuation allowance 1,749,805 605,350 Deferred tax liabilities Intangible assets — (519,942 ) Fixed assets (1,749,805 ) (355,491 ) Total deferred tax liabilities (1,749,805 ) (875,433 ) Net deferred tax asset / (liability) $ — $ (270,083 ) In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. The Company considers projected future taxable income and planning strategies in making this assessment. Based on projections of taxable income, the Company had previously determined that it is more likely than not that the deferred tax assets will not be realized. Accordingly, a valuation allowance had been recorded as of June 30, 2017. The Company’s valuation allowance position has not changed for the years ended June 30, 2019 and June 30, 2018, respectively, as the Company does not believe that it is more likely than not that it will realize its deferred tax assets. The valuation allowance increased $2.3 million for the year ended June 30, 2019 related primarily to the ability of the Company to utilize net operating losses to offset current year income, resulting in a reduction to the Company net deferred tax asset balance. In the event the Company experiences an ownership change within the meaning of Section 382 of the Internal Revenue Code (“IRC”), the Company’s ability to utilize net operating losses, tax credits and other tax attributes may be limited. As of June 30, 2019, the Company is not aware of any applicable Section 382 limitations that may exist on its net operating losses. As of June 30, 2019, the Company had federal and state net operating loss carry forwards of approximately $24.7 million and $8.3 million, respectively, which will begin to expire June 30, 2030, unless previously utilized. A portion of the federal net operating losses generated after June 30, 2017 can be carried forward indefinitely as a result of the Tax Cuts and Jobs Act. Therefore, approximately $4.9 million of net operating loss carryovers are not subject to expiration. The Company has federal research credits of $642,463 which will expire June 30, 2031, unless previously utilized. The Company also has foreign tax credits of $157,859 which will begin to expire June 30, 2023, unless previously utilized. The Company has state research credits of $23,170 that do not expire. As of June 30, 2019, the Company has not provided for foreign withholding taxes on approximately $3.8 million of undistributed earnings of its foreign subsidiary as these earnings are considered indefinitely reinvested outside of the United States. The Company does not plan to repatriate any earnings that are currently located in its foreign subsidiaries as of June 30, 2019. However, to the extent that the foreign subsidiaries accrue earnings and profits in the future years, the Company does plan to repatriate those funds to the U. S. and will record withholding taxes as those earnings and profits are incurred. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes that it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcome of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company has $63,214 of unrecognized tax benefits related to current year tax positions as of June 30, 2019. Included in the unrecognized tax benefits was $49,939 of tax benefits that, if recognized, would reduce our annual effective tax rate, if the Company were not in a valuation allowance position. However, as the Company is in a full valuation allowance position, there would be no impact to the annual effective tax rate if the tax benefits were recognized. The Company's policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. The Company has not accrued interest and penalties associated with uncertain tax positions as of June 30, 2019 and 2018. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. |
Warrants
Warrants | 12 Months Ended |
Jun. 30, 2019 | |
Warrants And Rights Note Disclosure [Abstract] | |
WARRANTS | NOTE 10 - WARRANTS The following table summarizes the total warrants outstanding at June 30, 2019: Issue Date Exercise Price Per Share Expiration Date Outstanding as of June 30, 2018 New Issuances Expired Outstanding as of June 30, 2019 Warrants Dec 2014 $ 4.32 June 2020 2,699,999 — — 2,699,999 2,699,999 — — 2,699,999 The following table summarizes the total warrants outstanding at June 30, 2018: Issue Date Exercise Price Per Share Expiration Date Outstanding as of June 30, 2017 New Issuances Expired Outstanding as of June 30, 2018 Warrants Dec 2014 $ 4.32 June 2020 2,699,999 — — 2,699,999 2,699,999 — — 2,699,999 |
Equity
Equity | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
EQUITY | NOTE 11 - EQUITY On September 5, 2018, the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with MFP Partners, L.P. ("MFP"), pursuant to which the Company sold to MFP 1,607,717 shares of common stock of the Company (the "Common Shares") at a purchase price of $3.11 per share at an initial closing, and agreed to sell, subject to the satisfaction of certain conditions, 7,235 shares of newly designated Series A Convertible Preferred Stock of the Company ("Preferred Shares") to MFP at a purchase price of $3,110 per share at a second closing (the "Second Closing"). The Second Closing was completed on October 23, 2018, for aggregate gross proceeds of approximately $22.5 million, which was used primarily to fund the Chromatin Acquisition. The Preferred Shares carried no voting rights and were automatically convertible into shares of common stock at the rate of 1,000 shares of common stock per Preferred Share upon the approval of the Company's stockholders for the issuance of the requisite shares of common stock. Pursuant to the Securities Purchase Agreement, the Company agreed to use its reasonable best efforts to solicit the approval of its shareholders for the issuance of stock upon the conversion of the Preferred Shares at a special meeting of shareholders, and at each annual meeting of shareholders thereafter, if necessary. Approval was obtained at a Special Meeting of Stockholders held on November 20, 2018, and the Preferred Shares automatically converted into 7,235,000 shares of common stock on that same day. |
Foreign Currency Contracts
Foreign Currency Contracts | 12 Months Ended |
Jun. 30, 2019 | |
Foreign Currency [Abstract] | |
FOREIGN CURRENCY CONTRACTS | NOTE 12 - FOREIGN CURRENCY CONTRACTS The Company’s subsidiary, S&W Australia, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company manages through the use of foreign currency forward contracts. These foreign currency contracts are not designated as hedging instruments; accordingly, changes in the fair value are recorded in current period earnings. These foreign currency contracts had a notional value of $2,192,223 at June 30, 2019 and their maturities range from July to October 2019. The Company records an asset or liability on the consolidated balance sheet for the fair value of the foreign currency forward contracts. The foreign currency contract liabilities totaled $42,255 at June 30, 2019 and foreign currency contract liabilities totaled $100,138 at June 30, 2018. The Company recorded a gain on foreign exchange contracts of $52,788 and a loss on foreign exchange contracts of $272,801, which is reflected in cost of revenue for the years ended June 30, 2019 and 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13 - COMMITMENTS AND CONTINGENCIES Contingencies Based on information currently available, management is not aware of any other matters that would have a material adverse effect on the Company's financial condition, results of operations or cash flows. Legal Matters The Company may be subject to various legal proceedings from time to time. The results of any future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. Any current litigation is considered immaterial and counter claims have been assessed as remote. Leases The Company has entered into various non-cancelable operating lease agreements. Rent expense under operating leases was $763,874 and $401,375 for the years ended June 30, 2019 and 2018, respectively. The following table sets forth the Company's estimates of future lease payment obligations as of June 30, 2019: 2020 2021 2022 2023 2024 2025 and beyond Total (a) Operating lease obligations $ 640,135 $ 634,422 $ 352,730 $ 201,800 $ 235,776 $ 366,581 $ 2,431,444 (a) Minimum payments have not been reduced by minimum sublease rentals of $788,400 due in the future under noncancelable sublease The following table sets forth the composition of total rental expense for all operating leases except those with terms of a month or less that were not renewed. Years Ended June 30, 2019 2018 Minimum rentals $ 763,874 $ 401,375 Less: Sublease rentals (87,600 ) (43,800 ) $ 676,274 $ 357,575 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 - RELATED PARTY TRANSACTIONS On July 19, 2017, the Company entered into a Securities Purchase Agreement with certain purchasers, including MFP Partners, L.P. ("MFP"), a stockholder of the Company, On October 11, 2017, the Company entered into a Securities Purchase Agreement with Mark W. Wong, the Company’s President and Chief Executive Officer, pursuant to which the Company sold and issued an aggregate of 75,000 shares of its Common Stock at a purchase price of $3.50 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 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, all of the shares not purchased in the Rights Offering (the "Backstop Commitment"). Accordingly, on December 22, 2017, the Company and MFP completed the closing of the Backstop Commitment, in which the Company sold and issued 905,077 shares 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. On September 5, 2018, the Company entered into the Securities Purchase Agreement with MFP, pursuant to which the Company sold the Common Shares at the Initial Closing and the Preferred Shares at the Second Closing. The Initial Closing was completed on September 5, 2018 and the Second Closing was completed on October 23, 2018. See Note 11 for further discussion on the Second Closing. On December 18, 2018, the Company entered into a Loan and Security Agreement (the "MFP Loan Agreement") with MFP, pursuant to which the Company was able to borrow up to $5,000,000, in minimum increments of $1,000,000, from MFP during the period beginning on December 18, 2018 and ending on the earlier to occur of (i) March 18, 2019 and (ii) certain specified events of default. Pursuant to the MFP Loan Agreement, interest accrued on outstanding principal at a fixed per annum rate of 6.0%. In addition, the Company was obligated to pay to MFP a fee equal to 2.0% of each advance under the MFP Loan Agreement. Concurrently with the execution of the MFP Loan Agreement, the Company drew down $1,000,000 under the MFP Loan Agreement, which was disbursed to the Company on December 21, 2018. On December 31, 2018, the Company repaid in full the $1,000,000 disbursed to the Company. As of June 30, 2019, no amounts remained outstanding under the MFP Loan Agreement. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Jun. 30, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
EQUITY-BASED COMPENSATION | NOTE 15 - EQUITY-BASED COMPENSATION Equity Incentive Plans In October 2009 and January 2010, the Company's Board of Directors and stockholders, respectively, approved the 2009 Equity Incentive Plan (as amended and/or restated from time to time, the "2009 Plan"). The plan authorized the grant and issuance of options, restricted shares and other equity compensation to the Company's directors, employees, officers and consultants, and those of the Company's subsidiaries and parent, if any. In October 2012 and December 2012, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,250,000 shares. In September 2013 and December 2013, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 1,700,000 shares. In September 2015 and December 2015, the Company's Board of Directors and stockholders, respectively, approved the amendment and restatement of the 2009 Plan, including an increase in the number of shares available for issuance as grants and awards under the Plan to 2,450,000 shares. In January 2019, the Company's Board of Directors and stockholders approved the 2019 Equity Incentive Plan ("2019 Plan") as a successor to and continuation of the 2009 The term of incentive stock options granted under the Company’s equity incentive plans may not exceed ten years, or five years for incentive stock options granted to an optionee owning more than 10% of the Company's voting stock. The exercise price of options granted under the Company’s equity incentive plans must be equal to or greater than the fair market value of the shares of the common stock on the date the option is granted. An incentive stock option granted to an optionee owning more than 10% of voting stock must have an exercise price equal to or greater than 110% of the fair market value of the common stock on the date the option is granted. The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Stock options issued to non-employees are accounted for at their estimated fair value. The fair value of options granted to non-employees is re-measured as they vest. The Company amortizes stock-based compensation expense on a straight-line basis over the requisite service period. The Company utilizes a Black-Scholes-Merton option pricing model, which includes assumptions regarding the risk-free interest rate, dividend yield, life of the award, and the volatility of the Company's common stock to estimate the fair value of employee options grants. Weighted average assumptions used in the Black-Scholes-Merton model are set forth below: June 30, 2019 2018 Risk free rate 1.9% - 3.0% 1.7% - 2.3% Dividend yield 0 % 0 % Volatility 34.5% - 41.5% 45.3% - 45.5% Average forfeiture assumptions 1.1 % 1.4 % During the year ended June 30, 2019, the Company granted 497,178 options to its directors, certain members of the executive management team and other employees at exercise prices ranging from $2.19 - $3.30. These options vest in either quarterly or annual periods over one to three years, and expire ten years from the date of grant. A summary of stock option activity for the years ended June 30, 2019 and 2018 is presented below: Number Outstanding Weighted - Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2017 990,528 $ 5.12 4.3 $ 100,344 Granted 103,283 3.45 — — Exercised (49,000 ) 3.95 — — Canceled/forfeited/expired (252,737 ) 6.46 — — Outstanding at June 30, 2018 792,074 4.55 6.3 10,413 Granted 497,178 2.85 — — Exercised — — — — Canceled/forfeited/expired (166,500 ) 6.17 — — Outstanding at June 30, 2019 1,122,752 3.55 8.0 34,135 Options vested and exercisable at June 30, 2019 618,668 4.04 7.0 — Options vested and expected to vest as of June 30, 2019 1,120,572 $ 3.55 8.0 $ 33,928 The weighted average grant date fair value of options granted and outstanding at June 30, 2019 was $0.99. At June 30, 2019, the Company had $458,246 of unrecognized stock compensation expense, net of estimated forfeitures, related to the options under the 2009 Plan, which will be recognized over the weighted average remaining service period of 1.84 years. The Company settles employee stock option exercises with newly issued shares of common stock. During the years ended June 30, 2019 and 2018, the Company issued 175,758 and 78,642 restricted stock units to its directors, certain members of the executive management team, and other employees. The restricted stock units have varying vesting periods ranging from immediate vesting to quarterly or annual installments over one to three-years. The fair value of the awards during the years ended June 30, 2019 and 2018 totaled $472,171 and $279,611, respectively, and was based on the closing stock price on the date of grants. The Company recorded $379,212 and $487,391 of stock-based compensation expense associated with grants of restricted stock units during the years ended June 30, 2019 and 2018, respectively. A summary of activity related to non-vested restricted stock units is presented below: Number of Nonvested Restricted Stock Units Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Life (Years) Nonvested restricted units outstanding at June 30, 2017 120,971 $ 5.59 1.0 Granted 78,642 3.56 1.3 Vested (105,985 ) 5.49 — Forfeited (4,435 ) 4.45 — Nonvested restricted units outstanding at June 30, 2018 89,193 3.98 1.1 Granted 175,758 2.69 2.8 Vested (107,747 ) 3.75 — Forfeited — — — Nonvested restricted units outstanding at June 30, 2019 157,204 $ 2.69 1.4 At June 30, 2019, the Company had $297,670 of unrecognized stock compensation expense related to the restricted stock units, which will be recognized over the weighted average remaining service period of 1.4 years. At June 30, 2019, there were 2,957,294 shares available under the 2019 Plan for future grants and awards. Stock-based compensation expense recorded for stock options, restricted stock grants and restricted stock units for the years ended June 30, 2019 and 2018, totaled $694,610 and $748,516, respectively. |
Non-Cash Activities for Stateme
Non-Cash Activities for Statements of Cash Flows | 12 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS | NOTE 16 - NON-CASH ACTIVITIES FOR STATEMENTS OF CASH FLOWS The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the years ended June 30, 2019 and 2018, respectively. Years Ended June 30, 2019 2018 Fair value of assets acquired $ 29,446,067 $ — Cash paid for the acquisition (26,450,000 ) — Liabilities assumed (2,996,067 ) — Purchases of equipment classified as capital lease (574,018 ) — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 - SUBSEQUENT EVENTS In August 2019, S&W Australia, a wholly owned subsidiary of S&W Seed Company, licensed certain wheat germplasm varieties and acquired certain equipment from affiliates of Corteva. In the transaction, S&W Australia paid a one-time license fee of US$2.3 million and an equipment purchase price of US$300,000. The license has an initial term of 15 years. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of S&W Seed Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements were prepared in accordance with U.S. 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, . The Company owns 51.0% of Sorghum Solutions South Africa, which is a variable interest entity as defined in ASC 810-10, Consolidation, . Because the Company is its primary beneficiary, SeedVision's and Sorghum Solutions South Africa’s financial results are included in these financial statements. We have recorded a combined $0.6 million of current assets (restricted) and $0.2 million of current liabilities (nonrecourse) for these entities in our consolidated balance sheet as of June 30, 2019. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are adjusted to reflect actual experience when necessary. Significant estimates and assumptions affect many items in the financial statements. These include allowance for doubtful trade receivables, inventory valuation, asset impairments, provisions for income taxes, grower accruals (an estimate of amounts payable to farmers who grow seed for the Company), contingent consideration obligations, 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 Risks and Concentrations | Certain Risks and Concentrations The Company’s revenue is principally derived from the sale of seed, the market for which is highly competitive. The Company depends on a core group of significant customers. One customer accounted for 65% of its revenue for the year ended June 30, 2019. One customer accounted for 62% of its revenue for the year ended June 30, 2018. One customer accounted for 19% of the Company’s accounts receivable at June 30, 2019. One customer accounted for 35% of the Company’s accounts receivable at June 30, 2018. The Company sells a substantial portion of its products to international customers. Sales to international markets represented 20% and 35% of revenue during the years ended June 30, 2019 and 2018, respectively. The net book value of fixed assets located outside the United States was 11% and 20% of total fixed assets at June 30, 2019 and June 30, 2018, respectively. Cash balances located outside of the United States may not be insured and totaled $236,822 and $369,803 at June 30, 2019 and June 30, 2018, respectively. The following table shows revenue from external sources by destination country: Years Ended June 30, 2019 2018 United States $ 88,176,809 80 % $ 41,662,556 65 % Saudi Arabia 4,745,993 4 % 1,461,368 2 % Australia 2,787,128 3 % 1,242,957 2 % Libya 2,629,750 2 % 936,423 1 % Mexico 2,264,827 2 % 4,932,105 8 % Pakistan 1,009,120 1 % 5,856 0 % Egypt 965,269 1 % 284,760 0 % Peru 905,580 1 % 1,844,898 3 % France 845,172 1 % 220,919 0 % Argentina 841,969 1 % 2,748,492 4 % Other 4,550,893 4 % 8,745,176 15 % Total $ 109,722,511 100 % $ 64,085,510 100 % |
International Operations | International Operations The Company translates its foreign operations’ assets and liabilities denominated in foreign currencies into U.S. dollars at the current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in the cumulative translation account, a component of accumulated other comprehensive income (loss). Gains or losses from foreign currency transactions are included in the consolidated statement of operations. |
Revenue Recognition | Revenue Recognition The Company adopted the provisions of ASC Topic 606, Revenue from Contracts with Customers ("Topic 606") as of July 1, 2018. See Note 4 for further discussion. |
Cost of Revenue | Cost of Revenue The Company records purchasing and receiving costs, inspection costs and warehousing costs in cost of revenue. When the Company is required to pay for outward freight and/or the costs incurred to deliver products to its customers, the costs are included in cost of revenue. |
Cash and Cash Equivalents | Cash and Cash Equivalents For financial statement presentation purposes, the Company considers time deposits, certificates of deposit and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. At times, cash and cash equivalents balances exceed amounts insured by the Federal Deposit Insurance Corporation. |
Accounts Receivable | Accounts Receivable The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer’s trade accounts receivable. The allowance for doubtful trade receivables was $1,576,900 and $584,202 at June 30, 2019 and June 30, 2018, respectively. |
Inventories | Inventories Inventories consist of seed and packaging materials. Inventories are stated at the lower of cost or net realizable value, and an inventory reserve permanently reduces the cost basis of inventory. Inventories are valued as follows: Actual cost is used to value raw materials such as packaging materials, as well as goods in process. Costs for substantially all finished goods, which include the cost of carryover crops from the previous year, are valued at actual cost. Actual cost for finished goods includes plant conditioning and packaging costs, direct labor and raw materials and manufacturing overhead costs based on normal capacity. The Company records abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage) as current period charges and allocates fixed production overhead to the costs of finished goods based on the normal capacity of the production facilities. The Company’s subsidiary, S&W Australia, 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. S&W Australia 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. Inventory quality is a function of germination percentage. Our experience has shown that our alfalfa seed quality tends to be stable under proper storage conditions; therefore, we do not view inventory obsolescence for alfalfa seed as a material concern. Hybrid crops (sorghum and sunflower) seed quality may be affected by warehouse storage pests such as insects and rodents. The Company maintains a strict pest control program to mitigate risk and maximize hybrid seed quality. During the fourth quarter of the year ended June 30, 2019, the Company recognized a write-down of inventory in the amount of $8.8 million, which is included in Cost of Revenue in the Consolidated Statement of Operations. $4.8 million of this write-down related to dormant alfalfa seed products. The termination of the distribution and production agreements with Pioneer altered the Company’s planned consumption of these varieties and as a result the Company determined this particular dormant seed inventory will need to be sold to alternative sales channels at lower selling prices. The remaining inventory write-down primarily relates to changes in the Company’s assessment of the future market prices for non-dormant alfalfa seed varieties. The changes in the Company’s assessment occurred as it updated its business plans taking into account activity during the fourth quarter, which is the height of the sales season for non-dormant varieties. Components of inventory are: June 30, 2019 June 30, 2018 Raw materials and supplies $ 664,541 $ 344,620 Work in progress 5,664,934 2,775,398 Finished goods 64,966,045 57,299,258 $ 71,295,520 $ 60,419,276 |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment is depreciated using the straight-line method over the estimated useful life of the asset - periods of 5-35 years for buildings, 2-20 years for machinery and equipment, and 2-5 years for vehicles. |
Intangible Assets | Intangible Assets Intangible assets acquired in business acquisitions are reported at their initial fair value less accumulated amortization. Intangible assets are amortized using the straight-line method over the estimated useful life of the asset. Periods of 10-30 years for technology/IP/germplasm, 5-20 years for customer relationships and trade names and 3-20 for other intangible assets. The weighted average estimated useful lives are 26 years for technology/IP/germplasm, 17 years for customer relationships, 18 years for trade names and 19 years for other intangible assets. |
Goodwill | Goodwill Goodwill originated from acquisitions of Imperial Valley Seeds, Inc. (“IVS”) and S&W Australia in fiscal year 2013, the acquisition of the alfalfa business from Pioneer in fiscal year 2015, the acquisition of assets of SV Genetics in fiscal year 2016 and acquisition of substantially all of the assets of Chromatin, Inc. in fiscal year 2019. 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 quantitative goodwill impairment test. 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 as well as discounted cash flow analysis. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The Company performed a quantitative assessment of goodwill at June 30, 2019 and determined that goodwill was fully impaired. See Note 6 for further information. The Company performed a quantitative assessment of goodwill at June 30, 2018 and determined that goodwill was not impaired. |
Investment in Bioceres S.A | Investment in Bioceres S.A. The Company owns less than 1% of Bioceres, S.A., a provider of crop productivity solutions headquartered in Argentina. The carrying value of the investment is $1.3 million at June 30, 2019 and 2018, and the investment is included in Other Assets on the Consolidated Balance Sheet. The Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities Investments – Equity Securities Prior to July 1, 2018, the investment was 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 would have been 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. No adjustments for impairment or observable transactions were made in fiscal years 2019 or 2018. |
Research and Development Costs | Research and Development Costs The Company is engaged in ongoing research and development (“R&D”) of proprietary seed and stevia varieties. All R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results have been achieved. The costs associated with equipment or facilities acquired or constructed for R&D activities that have alternative future uses are capitalized and depreciated on a straight-line basis over the estimated useful life of the asset. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are determined based on differences between the financial statement and tax basis of assets and liabilities, as well as a consideration of net operating loss and credit carry forwards, using enacted tax rates in effect for the period in which the differences are expected to impact taxable income. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount that is more likely than not to be realized. The Company’s effective tax rate for the years ended June 30, 2019 and 2018 has been affected by the valuation allowance on the Company’s deferred tax assets. |
Net Income (Loss) Per Common Share Data | Net Income (Loss) Per Common Share Data Basic net income (loss) per common share ("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, restricted stock awards, convertible debt and common stock warrants. 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 net number of shares assumed to be issued added to the denominator. The calculation of Basic and Diluted EPS is shown in the table below. Years Ended June 30, 2019 2018 Numerator: Net loss attributable to S&W Seed Company $ (9,305,242 ) $ (4,725,090 ) Numerator for basis EPS (9,305,242 ) (4,725,090 ) Effect of dilutive securities: Warrants — — — — Numerator for diluted EPS $ (9,305,242 ) $ (4,725,090 ) Denominator: Denominator for basic EPS-weighted- average shares 30,102,158 22,481,491 Effect of dilutive securities: Employee stock options — — Employee restricted stock units — — Warrants — — Dilutive potential common shares — — Denominator for diluted EPS - adjusted weighted average shares and assumed conversions 30,102,158 22,481,491 Basic EPS $ (0.31 ) $ (0.21 ) Diluted EPS $ (0.31 ) $ (0.21 ) The effects of employee stock options and stock units, and warrants are excluded because they would be anti-dilutive due to the Company’s net loss. |
Impairment of Long-lived Assets | Impairment of Long-Lived Assets The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of long-lived assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. Refer to Note 3 and Note 6 for impairment discussion. |
Derivative Financial Instruments | Derivative Financial Instruments Foreign Exchange Contracts The Company’s subsidiary, S&W Australia, is exposed to foreign currency exchange rate fluctuations in the normal course of its business, which the Company at times manages through the use of foreign currency forward contracts. The Company has entered into certain derivative financial instruments (specifically foreign currency forward contracts), and accounts for these instruments in accordance with ASC Topic 815, “Derivatives and Hedging”, which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. The Company’s foreign currency contracts are not designated as hedging instruments under ASC 815; accordingly, changes in the fair value are recorded in current period earnings. |
Fair Values of Financial Instruments | Fair Value of Financial Instruments The Company discloses assets and liabilities that are recognized and measured at fair value, presented in a three-tier fair value hierarchy, as follows: • Level 1. Observable inputs such as quoted prices in active markets; • Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The assets acquired and liabilities assumed in the Chromatin acquisition were valued at fair value on a non-recurring basis as of October 25, 2018. The carrying value of cash and cash equivalents, accounts payable, short-term and all long-term borrowings, as reflected in the consolidated balance sheets, approximate fair value because of the short-term maturity of these instruments or interest rates commensurate with market rates. There have been no changes in operations and/or credit characteristics since the date of issuance that could impact the relationship between interest rate and market rates. Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows: Fair Value Measurements as of June 30, 2019 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ — $ 42,255 $ — Total $ — $ 42,255 $ — Fair Value Measurements as of June 30, 2018 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ — $ 100,138 $ — Total $ — $ 100,138 $ — During the years ended June 30, 2019 and June 30, 2018, a change in derivative warrant liability of $0 and $431,300 were recorded in earnings, respectively. Upon expiration of the round-down pricing protection on December 31, 2017, the warrants were reclassified from derivative warrant liabilities to equity. During the years ended June 30, 2019 and June 30, 2018, there was no change in the contingent consideration obligations. The DuPont contingent consideration was settled on December 1, 2017. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements The Company adopted Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04") effective July 1, 2018. 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. The new guidance was applied during the goodwill impairment test in the fourth quarter of 2019. See Note 6. The Company adopted Topic 606 as of July 1, 2018. This ASC topic outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most previously existing revenue recognition guidance under U.S. GAAP. The core principle of Topic 606 is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted Topic 606 using the modified retrospective approach. The adoption did not result in a cumulative effect adjustment as of July 1, 2018. The adoption of Topic 606 had a significant effect on the Company's accounting for its distribution and production agreements with Pioneer for the year ended June 30, 2019. There were no other changes in the Company's accounting as a result of the adoption of Topic 606. The change in the accounting for the distribution and production agreements with Pioneer arose from the provisions of Topic 606 regarding the determination of whether a performance obligation is satisfied at a point in time or over time. Under those provisions, a performance obligation is considered to be satisfied over time if the company's performance creates an asset that the customer controls as the asset is created or enhanced; or the work to satisfy the performance obligation does not create an asset with alternative future use to the vendor and the customer has an obligation to pay for work completed. Under the agreements, Pioneer submitted a demand plan to the Company in advance of the growing season specifying the amount of seed that it intended to order for the upcoming sales year. Once the demand plan was submitted, Pioneer could not cancel or reduce the amount of seed that it was obligated to purchase under the agreements. In addition, the Company was not permitted to sell products produced for Pioneer under the agreements to other customers. Therefore, under Topic 606, the performance obligation was satisfied, and revenue was recognized, over time, as the Company took delivery of, processed, and packaged the seed. Prior to the adoption of Topic 606, revenue related to the Pioneer agreement was recognized when seed was delivered to Pioneer. Costs incurred to purchase and process seed were capitalized as inventory until the product was delivered. As the Company adopted Topic 606 using the modified retrospective approach, figures for fiscal 2018 have not been adjusted and continue to reflect the prior accounting policies. The change in accounting for the Pioneer contract did not result in a cumulative effect adjustment, because all seed produced for Pioneer in previous growing seasons had been delivered, and revenue recognized, prior to July 1, 2018, and no seed had been received prior to July 1, 2018 related to the current growing season. However, the change did not materially affect the amount of revenue and costs recognized for the year ended June 30, 2019. The effects of the new accounting for the Pioneer contracts on the Company's financial statements are shown below: Year Ended June 30, 2019 As Reported Adjustments Balances Without Adoption of ASC 606 Revenue Product and other $ 75,507,078 $ (1,837,392 ) $ 73,669,686 Licensing 34,215,433 — 34,215,433 Total revenue 109,722,511 (1,837,392 ) 107,885,119 Cost of revenue Product and other 69,014,490 (1,522,606 ) 67,491,884 Total cost of revenue 69,014,490 (1,522,606 ) 67,491,884 Gross profit 40,708,021 (314,786 ) 40,393,235 Operating expenses Selling, general and administrative expenses 17,486,071 - 17,486,071 Research and development expenses 6,272,758 - 6,272,758 Depreciation and amortization 4,128,546 - 4,128,546 Gain on disposal of property, plant and equipment (86,222 ) - (86,222 ) Goodwill impairment charges 11,865,811 - 11,865,811 Intangible asset impairment charges 6,034,792 - 6,034,792 Total operating expenses 45,701,756 - 45,701,756 Loss from operations (4,993,735 ) (314,786 ) (5,308,521 ) Other expense Foreign currency gain (99,467 ) - (99,467 ) Change in estimated value of assets held for sale 1,521,855 - 1,521,855 Reduction of anticipated loss on sub-lease land (141,373 ) - (141,373 ) Interest expense - amortization of debt discount 340,847 - 340,847 Interest expense 2,886,077 - 2,886,077 Loss before income taxes (9,501,674 ) (314,786 ) (9,816,460 ) Provision for income taxes (148,747 ) (1,864 ) (150,611 ) Net loss $ (9,352,927 ) $ (312,922 ) $ (9,665,849 ) Net loss attributed to noncontrolling interests (47,685 ) - - Net loss attributable to S&W Seed Company $ (9,305,242 ) $ (312,922 ) $ (9,665,849 ) Net income (loss) per common share: Basic $ (0.31 ) $ (0.01 ) $ (0.32 ) Diluted $ (0.31 ) $ (0.01 ) $ (0.32 ) Weighted average number of common shares outstanding: Basic 30,102,158 - 30,102,158 Diluted 30,102,158 - 30,102,158 June 30, 2019 As Reported Adjustments Balances Without Adoption of ASC 606 ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,431,802 $ — $ 3,431,802 Accounts receivable, net 13,380,464 (1,837,392 ) 11,543,072 Inventories, net 71,295,520 1,522,606 72,818,126 Prepaid expenses and other current assets 1,687,490 1,864 1,689,354 Assets held for sale 1,850,000 — 1,850,000 TOTAL CURRENT ASSETS 91,645,276 (312,922 ) 91,332,354 Property, plant and equipment, net 20,634,949 — 20,634,949 Intangibles, net 32,714,484 — 32,714,484 Goodwill — — — Other assets 1,369,560 — 1,369,560 TOTAL ASSETS $ 146,364,269 $ (312,922 ) $ 146,051,347 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 6,930,829 $ — $ 6,930,829 Deferred revenue 9,054,549 — 9,054,549 Accrued expenses and other current liabilities 6,073,110 — 6,073,110 Lines of credit, net 10,755,548 — 10,755,548 Current portion of long-term debt, net 1,113,502 — 1,113,502 TOTAL CURRENT LIABILITIES 33,927,538 — 33,927,538 Long-term debt, net, less current portion 12,158,095 — 12,158,095 Other non-current liabilities 280,424 — 280,424 TOTAL LIABILITIES 46,366,057 — 46,366,057 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; 33,303,218 issued and 33,278,218 outstanding at June 30, 2019; 24,367,906 issued and 24,342,906 outstanding at June 30, 2018; 33,303 — 33,303 Treasury stock, at cost, 25,000 shares (134,196 ) — (134,196 ) Additional paid-in capital 136,751,875 — 136,751,875 Accumulated deficit (30,466,618 ) (312,922 ) (30,779,540 ) Accumulated other comprehensive loss (6,138,467 ) — (6,138,467 ) Noncontrolling interests (47,685 ) — (47,685 ) TOTAL STOCKHOLDERS' EQUITY 99,998,212 (312,922 ) 99,685,290 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 146,364,269 $ (312,922 ) $ 146,051,347 Topic 606 also requires enhanced disclosures about the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. Those disclosures can also be found in Note 4. |
Recently Issued, but Not Yet Adopted, Accounting Pronouncements | Recently Issued, but Not Yet Adopted, Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02: Leases |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Revenues from External Customers by Country | The following table shows revenue from external sources by destination country: Years Ended June 30, 2019 2018 United States $ 88,176,809 80 % $ 41,662,556 65 % Saudi Arabia 4,745,993 4 % 1,461,368 2 % Australia 2,787,128 3 % 1,242,957 2 % Libya 2,629,750 2 % 936,423 1 % Mexico 2,264,827 2 % 4,932,105 8 % Pakistan 1,009,120 1 % 5,856 0 % Egypt 965,269 1 % 284,760 0 % Peru 905,580 1 % 1,844,898 3 % France 845,172 1 % 220,919 0 % Argentina 841,969 1 % 2,748,492 4 % Other 4,550,893 4 % 8,745,176 15 % Total $ 109,722,511 100 % $ 64,085,510 100 % |
Components of Inventory | Components of inventory are: June 30, 2019 June 30, 2018 Raw materials and supplies $ 664,541 $ 344,620 Work in progress 5,664,934 2,775,398 Finished goods 64,966,045 57,299,258 $ 71,295,520 $ 60,419,276 |
Schedule of Calculation of Basic and Diluted EPS | The calculation of Basic and Diluted EPS is shown in the table below. Years Ended June 30, 2019 2018 Numerator: Net loss attributable to S&W Seed Company $ (9,305,242 ) $ (4,725,090 ) Numerator for basis EPS (9,305,242 ) (4,725,090 ) Effect of dilutive securities: Warrants — — — — Numerator for diluted EPS $ (9,305,242 ) $ (4,725,090 ) Denominator: Denominator for basic EPS-weighted- average shares 30,102,158 22,481,491 Effect of dilutive securities: Employee stock options — — Employee restricted stock units — — Warrants — — Dilutive potential common shares — — Denominator for diluted EPS - adjusted weighted average shares and assumed conversions 30,102,158 22,481,491 Basic EPS $ (0.31 ) $ (0.21 ) Diluted EPS $ (0.31 ) $ (0.21 ) |
Schedule of Assets and Liabilities Recognized and Measured at Fair Value on Recurring Basis | Assets and liabilities that are recognized and measured at fair value on a recurring basis are categorized as follows: Fair Value Measurements as of June 30, 2019 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ — $ 42,255 $ — Total $ — $ 42,255 $ — Fair Value Measurements as of June 30, 2018 Using: Level 1 Level 2 Level 3 Foreign exchange contract liability $ — $ 100,138 $ — Total $ — $ 100,138 $ — |
Schedule of Impacts of Adopting ASC 606 | The effects of the new accounting for the Pioneer contracts on the Company's financial statements are shown below: Year Ended June 30, 2019 As Reported Adjustments Balances Without Adoption of ASC 606 Revenue Product and other $ 75,507,078 $ (1,837,392 ) $ 73,669,686 Licensing 34,215,433 — 34,215,433 Total revenue 109,722,511 (1,837,392 ) 107,885,119 Cost of revenue Product and other 69,014,490 (1,522,606 ) 67,491,884 Total cost of revenue 69,014,490 (1,522,606 ) 67,491,884 Gross profit 40,708,021 (314,786 ) 40,393,235 Operating expenses Selling, general and administrative expenses 17,486,071 - 17,486,071 Research and development expenses 6,272,758 - 6,272,758 Depreciation and amortization 4,128,546 - 4,128,546 Gain on disposal of property, plant and equipment (86,222 ) - (86,222 ) Goodwill impairment charges 11,865,811 - 11,865,811 Intangible asset impairment charges 6,034,792 - 6,034,792 Total operating expenses 45,701,756 - 45,701,756 Loss from operations (4,993,735 ) (314,786 ) (5,308,521 ) Other expense Foreign currency gain (99,467 ) - (99,467 ) Change in estimated value of assets held for sale 1,521,855 - 1,521,855 Reduction of anticipated loss on sub-lease land (141,373 ) - (141,373 ) Interest expense - amortization of debt discount 340,847 - 340,847 Interest expense 2,886,077 - 2,886,077 Loss before income taxes (9,501,674 ) (314,786 ) (9,816,460 ) Provision for income taxes (148,747 ) (1,864 ) (150,611 ) Net loss $ (9,352,927 ) $ (312,922 ) $ (9,665,849 ) Net loss attributed to noncontrolling interests (47,685 ) - - Net loss attributable to S&W Seed Company $ (9,305,242 ) $ (312,922 ) $ (9,665,849 ) Net income (loss) per common share: Basic $ (0.31 ) $ (0.01 ) $ (0.32 ) Diluted $ (0.31 ) $ (0.01 ) $ (0.32 ) Weighted average number of common shares outstanding: Basic 30,102,158 - 30,102,158 Diluted 30,102,158 - 30,102,158 June 30, 2019 As Reported Adjustments Balances Without Adoption of ASC 606 ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,431,802 $ — $ 3,431,802 Accounts receivable, net 13,380,464 (1,837,392 ) 11,543,072 Inventories, net 71,295,520 1,522,606 72,818,126 Prepaid expenses and other current assets 1,687,490 1,864 1,689,354 Assets held for sale 1,850,000 — 1,850,000 TOTAL CURRENT ASSETS 91,645,276 (312,922 ) 91,332,354 Property, plant and equipment, net 20,634,949 — 20,634,949 Intangibles, net 32,714,484 — 32,714,484 Goodwill — — — Other assets 1,369,560 — 1,369,560 TOTAL ASSETS $ 146,364,269 $ (312,922 ) $ 146,051,347 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 6,930,829 $ — $ 6,930,829 Deferred revenue 9,054,549 — 9,054,549 Accrued expenses and other current liabilities 6,073,110 — 6,073,110 Lines of credit, net 10,755,548 — 10,755,548 Current portion of long-term debt, net 1,113,502 — 1,113,502 TOTAL CURRENT LIABILITIES 33,927,538 — 33,927,538 Long-term debt, net, less current portion 12,158,095 — 12,158,095 Other non-current liabilities 280,424 — 280,424 TOTAL LIABILITIES 46,366,057 — 46,366,057 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; 33,303,218 issued and 33,278,218 outstanding at June 30, 2019; 24,367,906 issued and 24,342,906 outstanding at June 30, 2018; 33,303 — 33,303 Treasury stock, at cost, 25,000 shares (134,196 ) — (134,196 ) Additional paid-in capital 136,751,875 — 136,751,875 Accumulated deficit (30,466,618 ) (312,922 ) (30,779,540 ) Accumulated other comprehensive loss (6,138,467 ) — (6,138,467 ) Noncontrolling interests (47,685 ) — (47,685 ) TOTAL STOCKHOLDERS' EQUITY 99,998,212 (312,922 ) 99,685,290 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 146,364,269 $ (312,922 ) $ 146,051,347 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Revenues [Abstract] | |
Schedule of disaggregation of revenues | The following table disaggregates the Company's revenue by type of contract 1 Years Ended June 30, 2019 2018 ASC 606 ASC 605 ASC 605 Distribution and production agreements - Pioneer $ 37,605,215 $ 35,767,823 $ 39,522,568 Other product sales 37,647,297 37,647,297 24,152,667 Licensing 34,215,433 34,215,433 - Services 254,566 254,566 410,275 $ 109,722,511 $ 107,885,119 $ 64,085,510 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents results as if the Acquisition occurred on July 1, 2017. Years Ended June 30, 2019 June 30, 2018 Revenue $ 111,359,688 $ 76,847,561 Net loss $ (11,179,299 ) $ (11,729,205 ) |
Chromatin Acquisition | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date of October 25, 2018: October 25, 2018 Cash and cash equivalents $ 95,049 Accounts receivable 947,015 Inventories 6,959,936 Prepaid expenses and other current assets 16,501 Property, plant and equipment 10,193,620 Assets held for sale 1,930,400 In-process research and development 380,000 Technology/IP - germplasm 7,200,000 Trade names 150,000 Goodwill 1,573,546 Current liabilities (2,881,198 ) Noncurrent liabilities (114,869 ) Total acquisition cost allocated $ (26,450,000 ) |
Assets Held for Sale | Management determined that one of the facilities acquired as part of the Chromatin acquisition would not be operated and is being held for sale. The components of that facility are: Land and improvements 320,000 Buildings and improvements 1,380,000 Machinery and equipment 332,000 Less: Costs to sell (101,600 ) Less: Fair value adjustment subsequently recorded (1,230,400 ) Assets held for sale $ 700,000 |
Useful Lives of Acquired Intangibles in business Combination | The values and useful lives of the acquired intangibles are as follows: Estimated Useful Life (Years) Estimated Fair Value In-process research and development n/a $ 380,000 Technology/IP - germplasm 30 7,200,000 Trade names 5 150,000 Total identifiable intangible assets $ 7,730,000 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Activity of Goodwill | The following table summarizes the activity of goodwill for the years ended June 30, 2019 and 2018, respectively. Balance at July 1, 2018 Additions Impairment Balance at June 30, 2019 Goodwill $ 10,292,265 $ 1,573,546 $ (11,865,811 ) $ — Balance at July 1, 2017 Additions Impairment Balance at June 30, 2018 Goodwill $ 10,292,265 $ — $ — $ 10,292,265 |
Schedule of Intangible Assets | For the year ended June 30, 2019, the Company recorded an impairment charge on its intangible assets of $6.0 million. Refer to Note 3 for further information. Intangible assets consist of the following: Balance at July 1, 2018 Additions Impairment Amortization Balance at June 30, 2019 Trade name $ 1,159,826 $ 150,000 $ — $ (104,480 ) $ 1,205,346 Customer relationships 1,156,955 — — (101,208 ) 1,055,747 Non-compete 62,720 — — (32,453 ) 30,267 GI customer list 71,639 — — (7,164 ) 64,475 Supply agreement 1,077,783 — — (75,629 ) 1,002,154 Distribution agreement 6,344,253 — (5,991,792 ) (352,461 ) — Grower relationships 1,753,208 — — (105,408 ) 1,647,800 Intellectual property 20,873,393 7,200,000 — (1,286,925 ) 26,786,468 In process research and development — 380,000 — — 380,000 Internal use software 610,003 43,000 (43,000 ) (67,776 ) 542,227 $ 33,109,780 $ 7,773,000 $ (6,034,792 ) $ (2,133,504 ) $ 32,714,484 Balance at July 1, 2017 Additions Impairment Amortization Balance at June 30, 2018 Trade name $ 1,244,306 $ — $ — $ (84,480 ) $ 1,159,826 Customer relationships 1,258,163 — — (101,208 ) 1,156,955 Non-compete 102,035 — — (39,315 ) 62,720 GI customer list 78,803 — — (7,164 ) 71,639 Supply agreement 1,153,415 — — (75,632 ) 1,077,783 Distribution agreement 6,728,753 — — (384,500 ) 6,344,253 Production agreement 111,670 — — (111,670 ) — Grower relationships 1,858,616 — — (105,408 ) 1,753,208 Intellectual property 21,725,539 295,034 — (1,147,180 ) 20,873,393 Internal use software 677,779 — — (67,776 ) 610,003 $ 34,939,079 $ 295,034 $ — $ (2,124,333 ) $ 33,109,780 |
Intangible Assets (Future Amortization) | Estimated aggregate remaining amortization is as follows: 2020 2021 2022 2023 2024 Thereafter Amortization expense $ 1,867,303 $ 1,848,480 $ 1,848,480 $ 1,843,188 $ 1,822,728 $ 23,484,305 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Components of Property, Plant and Equipment | Components of property, plant and equipment were as follows: June 30, 2019 June 30, 2018 Land and improvements $ 2,150,085 $ 2,068,742 Buildings and improvements 10,018,108 8,888,196 Machinery and equipment 12,579,698 5,731,293 Vehicles 2,099,814 1,130,276 Construction in progress 66,921 220,089 Total property, plant and equipment 26,914,626 18,038,596 Less: accumulated depreciation (6,279,677 ) (4,858,464 ) Property, plant and equipment, net $ 20,634,949 $ 13,180,132 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Total Debt Outstanding | Total debt outstanding is presented on the consolidated balance sheet as follows: June 30, 2019 June 30, 2018 Working capital lines of credit KeyBank $ 2,350,000 $ 25,050,464 National Australia Bank Limited 8,426,400 7,697,040 National Australia Bank Limited Overdraft Facility 351,544 — Debt issuance costs (372,396 ) (116,945 ) Total working capital lines of credit, net $ 10,755,548 $ 32,630,559 Current portion of long-term debt Capital lease $ 563,087 $ 27,241 Debt issuance costs (11,070 ) $ — Keith facility (building loan) - National Australia Bank Limited 73,731 3,701 Keith facility (machinery & equipment loans) - National Australia Bank Limited 215,519 198,251 Unsecured subordinate promissory note 100,000 100,000 Secured real estate note - Conterra 247,942 229,789 Debt issuance costs (75,707 ) (76,981 ) Secured equipment note - Conterra — 37,824 Debt issuance costs — (16,813 ) Total current portion, net 1,113,502 503,012 Long-term debt, less current portion Capital lease 1,709,481 — Debt issuance costs (15,078 ) — Keith facility (building loan) - National Australia Bank Limited 256,303 421,857 Keith facility (machinery & equipment loans) - National Australia Bank Limited 309,988 431,754 Secured real estate note - Conterra 9,922,269 10,170,211 Debt issuance costs (24,869 ) (100,576 ) Secured equipment note - Conterra — 2,062,176 Debt issuance costs — (8,335 ) Total long-term portion, net 12,158,095 12,977,087 Total debt, net $ 13,271,596 $ 13,480,099 |
Schedule of Annual Maturities of Short-Term and Long-Term Debt | The annual maturities of short-term and long-term debt are as follows: Fiscal Year Amount 2020 $ 1,200,279 2021 10,764,617 2022 705,216 2023 582,859 2024 145,349 Thereafter — Total $ 13,398,320 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Taxes | Loss before income taxes consists of the following: Years Ended June 30, 2019 2018 United States $ (9,336,700 ) $ (5,112,254 ) Foreign (164,974 ) 530,213 Loss before income taxes $ (9,501,674 ) $ (4,582,041 ) |
Components of Provision for Income Taxes | Significant components of the provision for income taxes from continuing operations are as follows: Years Ended June 30, 2019 2018 Current: Federal $ — $ — State 28,591 — Foreign 92,744 100,122 Total current provision 121,335 100,122 Deferred: Federal (227,142 ) 20,785 State (42,940 ) 22,142 Foreign — — Total deferred provision (benefit) (270,082 ) 42,927 (Benefit) Provision for income taxes $ (148,747 ) $ 143,049 |
Reconciliation of Income Tax Provision and Expected Income Tax Computed Using U.S. Federal Income Tax Rate | The differences between the total calculated income tax provision and the expected income tax computed using the U.S. federal income tax rate are as follows: Years Ended June 30, 2019 2018 Tax benefit at statutory tax rate $ (1,995,352 ) $ (1,262,509 ) State benefit, net of federal benefit (304,015 ) (133,666 ) Mark to market on financial instruments - (118,838 ) Section 965 toll tax - 584,086 Other permanent differences 23,786 (144,049 ) Federal and state research credits - current year (228,039 ) (89,572 ) Foreign rate differential 10,819 (971 ) Shortfall on restricted stock vest 49,118 155,783 Change in unrecognized tax benefit 49,939 - Tax Cuts and Jobs Act - 3,264,391 Valuation allowance 2,265,361 (2,145,250 ) Other (20,364 ) 33,644 $ (148,747 ) $ 143,049 |
Schedule of Deferred Tax Assets | Significant components of the Company's deferred tax assets are shown below. June 30, 2019 2018 Deferred tax assets: Net operating loss carry forwards $ 5,817,688 $ 6,771,974 Compensation accruals 261,365 144,550 Allowance for bad debts 1,376,388 151,972 Stock compensation 288,648 241,837 Tax credit carry forwards 662,283 434,245 Intangible assets 2,226,539 — Deferred Rent 47,226 90,466 Assets held for sale 367,387 — Other, net 476,411 277,065 Total deferred tax assets 11,523,935 8,112,109 Valuation allowance for deferred tax assets (9,774,130 ) (7,506,759 ) Deferred tax assets, net of valuation allowance 1,749,805 605,350 Deferred tax liabilities Intangible assets — (519,942 ) Fixed assets (1,749,805 ) (355,491 ) Total deferred tax liabilities (1,749,805 ) (875,433 ) Net deferred tax asset / (liability) $ — $ (270,083 ) |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Warrants And Rights Note Disclosure [Abstract] | |
Schedule of Warrants Outstanding | The following table summarizes the total warrants outstanding at June 30, 2019: Issue Date Exercise Price Per Share Expiration Date Outstanding as of June 30, 2018 New Issuances Expired Outstanding as of June 30, 2019 Warrants Dec 2014 $ 4.32 June 2020 2,699,999 — — 2,699,999 2,699,999 — — 2,699,999 The following table summarizes the total warrants outstanding at June 30, 2018: Issue Date Exercise Price Per Share Expiration Date Outstanding as of June 30, 2017 New Issuances Expired Outstanding as of June 30, 2018 Warrants Dec 2014 $ 4.32 June 2020 2,699,999 — — 2,699,999 2,699,999 — — 2,699,999 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Lease Payments Obligations | The following table sets forth the Company's estimates of future lease payment obligations as of June 30, 2019: 2020 2021 2022 2023 2024 2025 and beyond Total (a) Operating lease obligations $ 640,135 $ 634,422 $ 352,730 $ 201,800 $ 235,776 $ 366,581 $ 2,431,444 (a) Minimum payments have not been reduced by minimum sublease rentals of $788,400 due in the future under noncancelable sublease |
Schedule of Operating Leases Rental Expense | The following table sets forth the composition of total rental expense for all operating leases except those with terms of a month or less that were not renewed. Years Ended June 30, 2019 2018 Minimum rentals $ 763,874 $ 401,375 Less: Sublease rentals (87,600 ) (43,800 ) $ 676,274 $ 357,575 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Summary of Activity Related to Non-Vested Restricted Stock Units | A summary of activity related to non-vested restricted stock units is presented below: Number of Nonvested Restricted Stock Units Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Life (Years) Nonvested restricted units outstanding at June 30, 2017 120,971 $ 5.59 1.0 Granted 78,642 3.56 1.3 Vested (105,985 ) 5.49 — Forfeited (4,435 ) 4.45 — Nonvested restricted units outstanding at June 30, 2018 89,193 3.98 1.1 Granted 175,758 2.69 2.8 Vested (107,747 ) 3.75 — Forfeited — — — Nonvested restricted units outstanding at June 30, 2019 157,204 $ 2.69 1.4 |
Stock Options | |
Schedule of Weighted Average Assumptions Used in Black-Scholes-Merton Model | Weighted average assumptions used in the Black-Scholes-Merton model are set forth below: June 30, 2019 2018 Risk free rate 1.9% - 3.0% 1.7% - 2.3% Dividend yield 0 % 0 % Volatility 34.5% - 41.5% 45.3% - 45.5% Average forfeiture assumptions 1.1 % 1.4 % |
Summary of Stock Option Activity | A summary of stock option activity for the years ended June 30, 2019 and 2018 is presented below: Number Outstanding Weighted - Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at June 30, 2017 990,528 $ 5.12 4.3 $ 100,344 Granted 103,283 3.45 — — Exercised (49,000 ) 3.95 — — Canceled/forfeited/expired (252,737 ) 6.46 — — Outstanding at June 30, 2018 792,074 4.55 6.3 10,413 Granted 497,178 2.85 — — Exercised — — — — Canceled/forfeited/expired (166,500 ) 6.17 — — Outstanding at June 30, 2019 1,122,752 3.55 8.0 34,135 Options vested and exercisable at June 30, 2019 618,668 4.04 7.0 — Options vested and expected to vest as of June 30, 2019 1,120,572 $ 3.55 8.0 $ 33,928 |
Non-Cash Activities for State_2
Non-Cash Activities for Statements of Cash Flows (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Consolidated Statements of Cash Flows for Non-Cash Activities | The below table represents supplemental information to the Company's consolidated statements of cash flows for non-cash activities during the years ended June 30, 2019 and 2018, respectively. Years Ended June 30, 2019 2018 Fair value of assets acquired $ 29,446,067 $ — Cash paid for the acquisition (26,450,000 ) — Liabilities assumed (2,996,067 ) — Purchases of equipment classified as capital lease (574,018 ) — |
Background and Organization - A
Background and Organization - Additional Information (Details) | Jun. 30, 2019 |
Minimum | |
Background And Organizations [Line Items] | |
Number of countries in which S&W operates | 30 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($)Customer | Jun. 30, 2018USD ($)Customer | Jul. 01, 2019USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Current assets (restricted) | $ 600,000 | $ 600,000 | ||
Current liabilities (nonrecourse) | $ 200,000 | $ 200,000 | ||
Net book value of fixed assets located outside the United States, percent of total | 11.00% | 11.00% | 20.00% | |
Cash balances located outside of the United States | $ 236,822 | $ 236,822 | $ 369,803 | |
Disclosure on Geographic Areas, Fixed Assets | The net book value of fixed assets located outside the United States was 11% and 20% of total fixed assets at June 30, 2019 and June 30, 2018, respectively. Cash balances located outside of the United States may not be insured and totaled $236,822 and $369,803 at June 30, 2019 and June 30, 2018, respectively. | |||
Allowance for doubtful trade receivables | 1,576,900 | $ 1,576,900 | 584,202 | |
Recognized write-down of inventory | 8,822,103 | 482,250 | ||
Goodwill impairment | 11,865,811 | 0 | ||
Adjustments for impairment or observable transactions | 0 | 0 | ||
Change in derivative warrant liability | 0 | (431,300) | ||
Change in contingent consideration obligations | 0 | 0 | ||
Other Assets | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Carrying value of investment | 1,300,000 | $ 1,300,000 | $ 1,300,000 | |
Minimum | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Right of use asset | $ 2,000,000 | |||
Lease liability | 2,000,000 | |||
Minimum | Technology/IP | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 10 years | |||
Minimum | Customer Relationships | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 5 years | |||
Minimum | Trade Name | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 5 years | |||
Minimum | Other Intangibles | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 3 years | |||
Maximum | Subsequent Event | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Right of use asset | 3,000,000 | |||
Lease liability | $ 3,000,000 | |||
Maximum | Technology/IP | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 30 years | |||
Maximum | Customer Relationships | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 20 years | |||
Maximum | Trade Name | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 20 years | |||
Maximum | Other Intangibles | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 20 years | |||
Weighted Average | Technology/IP | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 26 years | |||
Weighted Average | Customer Relationships | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 17 years | |||
Weighted Average | Trade Name | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 18 years | |||
Weighted Average | Other Intangibles | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Useful life | 19 years | |||
Building | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 5 years | |||
Building | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 35 years | |||
Machinery and Equipment | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 2 years | |||
Machinery and Equipment | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 20 years | |||
Vehicles | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 2 years | |||
Vehicles | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 5 years | |||
Cost of Revenue | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Recognized write-down of inventory | 8,800,000 | |||
Cost of Revenue | Dormant Alfalfa Seed Products | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Recognized write-down of inventory | $ 4,800,000 | |||
Argentina | Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Ownership percentage in Bioceres, S.A. | 1.00% | 1.00% | ||
Customer Concentration Risk | Revenue | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of customers | Customer | 1 | 1 | ||
Concentration risk, percentage | 65.00% | 62.00% | ||
Credit Concentration Risk | Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of customers | Customer | 1 | 1 | ||
Concentration risk, percentage | 19.00% | 35.00% | ||
Geographic Concentration Risk | Revenue | Non-US | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 20.00% | 35.00% | ||
SeedVision | Variable Interest Entity | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Ownership percentage in variable interest entity | 50.10% | |||
Sorghum Solutions | Variable Interest Entity | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Ownership percentage in variable interest entity | 51.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Revenues from External Customers by Country (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 109,722,511 | $ 64,085,510 |
Revenue from external customers by country, percentage | 100.00% | 100.00% |
United States | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 88,176,809 | $ 41,662,556 |
Revenue from external customers by country, percentage | 80.00% | 65.00% |
Mexico | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 2,264,827 | $ 4,932,105 |
Revenue from external customers by country, percentage | 2.00% | 8.00% |
Argentina | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 841,969 | $ 2,748,492 |
Revenue from external customers by country, percentage | 1.00% | 4.00% |
Peru | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 905,580 | $ 1,844,898 |
Revenue from external customers by country, percentage | 1.00% | 3.00% |
Saudi Arabia | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 4,745,993 | $ 1,461,368 |
Revenue from external customers by country, percentage | 4.00% | 2.00% |
Pakistan | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 1,009,120 | $ 5,856 |
Revenue from external customers by country, percentage | 1.00% | 0.00% |
Australia | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 2,787,128 | $ 1,242,957 |
Revenue from external customers by country, percentage | 3.00% | 2.00% |
Egypt | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 965,269 | $ 284,760 |
Revenue from external customers by country, percentage | 1.00% | 0.00% |
Libya | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 2,629,750 | $ 936,423 |
Revenue from external customers by country, percentage | 2.00% | 1.00% |
France | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 845,172 | $ 220,919 |
Revenue from external customers by country, percentage | 1.00% | 0.00% |
Other | ||
Disaggregation Of Revenue [Line Items] | ||
Revenues from external customers | $ 4,550,893 | $ 8,745,176 |
Revenue from external customers by country, percentage | 4.00% | 15.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Components of Inventory (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 664,541 | $ 344,620 |
Work in progress | 5,664,934 | 2,775,398 |
Finished goods | 64,966,045 | 57,299,258 |
Inventories | $ 71,295,520 | $ 60,419,276 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Calculation of Basic and Diluted EPS (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||
Net loss attributable to S&W Seed Company | $ (9,305,242) | $ (4,725,090) |
Numerator for basis EPS | (9,305,242) | (4,725,090) |
Effect of dilutive securities: | ||
Warrants | 0 | 0 |
Total effect of dilutive securities: | 0 | 0 |
Numerator for diluted EPS | $ (9,305,242) | $ (4,725,090) |
Denominator: | ||
Denominator for basic EPS-weighted- average shares | 30,102,158 | 22,481,491 |
Effect of dilutive securities: | ||
Employee stock options | 0 | 0 |
Employee restricted stock units | 0 | 0 |
Warrants | 0 | 0 |
Dilutive potential common shares | 0 | 0 |
Denominator for diluted EPS - adjusted weighted average shares and assumed conversions | 30,102,158 | 22,481,491 |
Basic EPS | $ (0.31) | $ (0.21) |
Diluted EPS | $ (0.31) | $ (0.21) |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Assets and Liabilities Recognized and Measured at Fair Value on Recurring Basis (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Level 1 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Foreign exchange contract liability | $ 0 | $ 0 |
Total | 0 | 0 |
Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Foreign exchange contract liability | 42,255 | 100,138 |
Total | 42,255 | 100,138 |
Level 3 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Foreign exchange contract liability | 0 | $ 0 |
Total | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Summary of Impact of ASC 606 (Details) - USD ($) | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Oct. 25, 2018 | Jun. 30, 2017 | |
Revenue | ||||
Total revenue | $ 109,722,511 | $ 64,085,510 | ||
Cost of revenue | ||||
Total cost of revenue | 69,014,490 | 49,332,052 | ||
Gross profit | 40,708,021 | 14,753,458 | ||
Operating expenses | ||||
Selling, general and administrative expenses | 17,486,071 | 10,503,020 | ||
Research and development expenses | 6,272,758 | 3,887,723 | ||
Depreciation and amortization | 4,128,546 | 3,439,287 | ||
Gain on disposal of property, plant and equipment | (86,222) | (82,980) | ||
Goodwill impairment charges | 11,865,811 | 0 | ||
Intangible asset impairment charges | 6,034,792 | 0 | ||
Total operating expenses | 45,701,756 | 17,747,050 | ||
Loss from operations | (4,993,735) | (2,993,592) | ||
Other expense | ||||
Foreign currency gain | (99,467) | (12,584) | ||
Change in estimated value of assets held for sale | 1,521,855 | 0 | ||
Reduction of anticipated loss on sub-lease land | (141,373) | 0 | ||
Interest expense - amortization of debt discount | 340,847 | 169,045 | ||
Interest expense | 2,886,077 | 1,863,288 | ||
Loss before income taxes | (9,501,674) | (4,582,041) | ||
Provision for income taxes | (148,747) | 143,049 | ||
Net loss | (9,352,927) | (4,725,090) | ||
Net loss attributed to noncontrolling interests | (47,685) | 0 | ||
Net loss attributable to S&W Seed Company | $ (9,305,242) | $ (4,725,090) | ||
Net income (loss) per common share: | ||||
Basic | $ (0.31) | $ (0.21) | ||
Diluted | $ (0.31) | $ (0.21) | ||
Weighted average number of common shares outstanding: | ||||
Basic | 30,102,158 | 22,481,491 | ||
Diluted | 30,102,158 | 22,481,491 | ||
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 3,431,802 | $ 4,320,894 | $ 745,001 | |
Accounts receivable, net | 13,380,464 | 13,861,932 | ||
Inventories, net | 71,295,520 | 60,419,276 | ||
Prepaid expenses and other current assets | 1,687,490 | 1,279,794 | ||
Assets held for sale | 1,850,000 | 0 | ||
TOTAL CURRENT ASSETS | 91,645,276 | 79,881,896 | ||
Property, plant and equipment, net | 20,634,949 | 13,180,132 | ||
Intangibles, net | 32,714,484 | 33,109,780 | ||
Goodwill | 0 | 10,292,265 | $ 1,573,546 | 10,292,265 |
Other assets | 1,369,560 | 1,303,135 | ||
TOTAL ASSETS | 146,364,269 | 137,767,208 | ||
CURRENT LIABILITIES | ||||
Accounts payable | 6,930,829 | 5,935,454 | ||
Deferred revenue | 9,054,549 | 212,393 | ||
Accrued expenses and other current liabilities | 6,073,110 | 3,114,799 | ||
Lines of credit, net | 10,755,548 | 32,630,559 | ||
Current portion of long-term debt, net | 1,113,502 | 503,012 | ||
TOTAL CURRENT LIABILITIES | 33,927,538 | 42,396,217 | ||
Long-term debt, net, less current portion | 12,158,095 | 12,977,087 | ||
Other non-current liabilities | 280,424 | 651,780 | ||
TOTAL LIABILITIES | 46,366,057 | 56,025,084 | ||
STOCKHOLDERS' EQUITY | ||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | 0 | 0 | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 33,303,218 issued and 33,278,218 outstanding at June 30, 2019; 24,367,906 issued and 24,342,906 outstanding at June 30, 2018; | 33,303 | 24,367 | ||
Treasury stock, at cost, 25,000 shares | (134,196) | (134,196) | ||
Additional paid-in capital | 136,751,875 | 108,803,991 | ||
Accumulated deficit | (30,466,618) | (21,161,376) | ||
Accumulated other comprehensive loss | (6,138,467) | (5,790,662) | ||
Noncontrolling interests | (47,685) | 0 | ||
TOTAL STOCKHOLDERS' EQUITY | 99,998,212 | 81,742,124 | $ 61,221,655 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 146,364,269 | 137,767,208 | ||
Balances Without Adoption of ASC 606 | ||||
Revenue | ||||
Total revenue | 64,085,510 | |||
Product and Other | ||||
Revenue | ||||
Total revenue | 75,507,078 | |||
Cost of revenue | ||||
Total cost of revenue | 69,014,490 | |||
Licensing | ||||
Revenue | ||||
Total revenue | 34,215,433 | $ 0 | ||
ASC 606 | Adjustments | ||||
Revenue | ||||
Total revenue | (1,837,392) | |||
Cost of revenue | ||||
Total cost of revenue | (1,522,606) | |||
Gross profit | (314,786) | |||
Operating expenses | ||||
Selling, general and administrative expenses | 0 | |||
Research and development expenses | 0 | |||
Depreciation and amortization | 0 | |||
Gain on disposal of property, plant and equipment | 0 | |||
Goodwill impairment charges | 0 | |||
Intangible asset impairment charges | 0 | |||
Total operating expenses | 0 | |||
Loss from operations | (314,786) | |||
Other expense | ||||
Foreign currency gain | 0 | |||
Change in estimated value of assets held for sale | 0 | |||
Reduction of anticipated loss on sub-lease land | 0 | |||
Interest expense - amortization of debt discount | 0 | |||
Interest expense | 0 | |||
Loss before income taxes | (314,786) | |||
Provision for income taxes | (1,864) | |||
Net loss | (312,922) | |||
Net loss attributed to noncontrolling interests | 0 | |||
Net loss attributable to S&W Seed Company | $ (312,922) | |||
Net income (loss) per common share: | ||||
Basic | $ (0.01) | |||
Diluted | $ (0.01) | |||
Weighted average number of common shares outstanding: | ||||
Basic | 0 | |||
Diluted | 0 | |||
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 0 | |||
Accounts receivable, net | (1,837,392) | |||
Inventories, net | 1,522,606 | |||
Prepaid expenses and other current assets | 1,864 | |||
Assets held for sale | 0 | |||
TOTAL CURRENT ASSETS | (312,922) | |||
Property, plant and equipment, net | 0 | |||
Intangibles, net | 0 | |||
Goodwill | 0 | |||
Other assets | 0 | |||
TOTAL ASSETS | (312,922) | |||
CURRENT LIABILITIES | ||||
Accounts payable | 0 | |||
Deferred revenue | 0 | |||
Accrued expenses and other current liabilities | 0 | |||
Lines of credit, net | 0 | |||
Current portion of long-term debt, net | 0 | |||
TOTAL CURRENT LIABILITIES | 0 | |||
Long-term debt, net, less current portion | 0 | |||
Other non-current liabilities | 0 | |||
TOTAL LIABILITIES | 0 | |||
STOCKHOLDERS' EQUITY | ||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | 0 | |||
Common stock, $0.001 par value; 50,000,000 shares authorized; 33,303,218 issued and 33,278,218 outstanding at June 30, 2019; 24,367,906 issued and 24,342,906 outstanding at June 30, 2018; | 0 | |||
Treasury stock, at cost, 25,000 shares | 0 | |||
Additional paid-in capital | 0 | |||
Accumulated deficit | (312,922) | |||
Accumulated other comprehensive loss | 0 | |||
Noncontrolling interests | 0 | |||
TOTAL STOCKHOLDERS' EQUITY | (312,922) | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | (312,922) | |||
ASC 606 | Balances Without Adoption of ASC 606 | ||||
Revenue | ||||
Total revenue | 107,885,119 | |||
Cost of revenue | ||||
Total cost of revenue | 67,491,884 | |||
Gross profit | 40,393,235 | |||
Operating expenses | ||||
Selling, general and administrative expenses | 17,486,071 | |||
Research and development expenses | 6,272,758 | |||
Depreciation and amortization | 4,128,546 | |||
Gain on disposal of property, plant and equipment | (86,222) | |||
Goodwill impairment charges | 11,865,811 | |||
Intangible asset impairment charges | 6,034,792 | |||
Total operating expenses | 45,701,756 | |||
Loss from operations | (5,308,521) | |||
Other expense | ||||
Foreign currency gain | (99,467) | |||
Change in estimated value of assets held for sale | 1,521,855 | |||
Reduction of anticipated loss on sub-lease land | (141,373) | |||
Interest expense - amortization of debt discount | 340,847 | |||
Interest expense | 2,886,077 | |||
Loss before income taxes | (9,816,460) | |||
Provision for income taxes | (150,611) | |||
Net loss | (9,665,849) | |||
Net loss attributed to noncontrolling interests | 0 | |||
Net loss attributable to S&W Seed Company | $ (9,665,849) | |||
Net income (loss) per common share: | ||||
Basic | $ (0.32) | |||
Diluted | $ (0.32) | |||
Weighted average number of common shares outstanding: | ||||
Basic | 30,102,158 | |||
Diluted | 30,102,158 | |||
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 3,431,802 | |||
Accounts receivable, net | 11,543,072 | |||
Inventories, net | 72,818,126 | |||
Prepaid expenses and other current assets | 1,689,354 | |||
Assets held for sale | 1,850,000 | |||
TOTAL CURRENT ASSETS | 91,332,354 | |||
Property, plant and equipment, net | 20,634,949 | |||
Intangibles, net | 32,714,484 | |||
Goodwill | 0 | |||
Other assets | 1,369,560 | |||
TOTAL ASSETS | 146,051,347 | |||
CURRENT LIABILITIES | ||||
Accounts payable | 6,930,829 | |||
Deferred revenue | 9,054,549 | |||
Accrued expenses and other current liabilities | 6,073,110 | |||
Lines of credit, net | 10,755,548 | |||
Current portion of long-term debt, net | 1,113,502 | |||
TOTAL CURRENT LIABILITIES | 33,927,538 | |||
Long-term debt, net, less current portion | 12,158,095 | |||
Other non-current liabilities | 280,424 | |||
TOTAL LIABILITIES | 46,366,057 | |||
STOCKHOLDERS' EQUITY | ||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | 0 | |||
Common stock, $0.001 par value; 50,000,000 shares authorized; 33,303,218 issued and 33,278,218 outstanding at June 30, 2019; 24,367,906 issued and 24,342,906 outstanding at June 30, 2018; | 33,303 | |||
Treasury stock, at cost, 25,000 shares | (134,196) | |||
Additional paid-in capital | 136,751,875 | |||
Accumulated deficit | (30,779,540) | |||
Accumulated other comprehensive loss | (6,138,467) | |||
Noncontrolling interests | (47,685) | |||
TOTAL STOCKHOLDERS' EQUITY | 99,685,290 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 146,051,347 | |||
ASC 606 | Product and Other | Adjustments | ||||
Revenue | ||||
Total revenue | (1,837,392) | |||
Cost of revenue | ||||
Total cost of revenue | (1,522,606) | |||
ASC 606 | Product and Other | Balances Without Adoption of ASC 606 | ||||
Revenue | ||||
Total revenue | 73,669,686 | |||
Cost of revenue | ||||
Total cost of revenue | 67,491,884 | |||
ASC 606 | Licensing | Adjustments | ||||
Revenue | ||||
Total revenue | 0 | |||
ASC 606 | Licensing | Balances Without Adoption of ASC 606 | ||||
Revenue | ||||
Total revenue | $ 34,215,433 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Summary of Impact of ASC 606 (Details) (Parenthetical) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 |
Accounting Policies [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 33,303,218 | 24,367,906 |
Common stock, shares outstanding | 33,278,218 | 24,342,906 |
Treasury stock, shares | 25,000 | 25,000 |
Pioneer Relationship - Addition
Pioneer Relationship - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
May 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transaction [Line Items] | |||
Impairment charge on intangible assets | $ 6,034,792 | $ 0 | |
Goodwill impairment charges | 11,865,811 | 0 | |
Revenue | $ 109,722,511 | $ 64,085,510 | |
Pioneer | Alfalfa Seeds | |||
Related Party Transaction [Line Items] | |||
Termination date | May 22, 2019 | ||
Impairment charge on intangible assets | $ 6,000,000 | ||
Goodwill impairment charges | 11,900,000 | ||
Corteva and Pioneer | |||
Related Party Transaction [Line Items] | |||
Payments received from related parties | $ 45,000,000 | ||
Quarterly payments receivable from related parties | $ 25,000,000 | ||
Description of related party quarterly payments | Receive quarterly payments through February 2021 | ||
Unbilled receivable at contract termination | $ 1,800,000 | ||
Corteva and Pioneer | Alfalfa Seeds | |||
Related Party Transaction [Line Items] | |||
Revenue | $ 34,200,000 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 109,722,511 | $ 64,085,510 |
Balances Without Adoption of ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 64,085,510 | |
Balances Without Adoption of ASC 606 | ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 107,885,119 | |
Distribution and production agreements - Pioneer | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 37,605,215 | |
Distribution and production agreements - Pioneer | Balances Without Adoption of ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 39,522,568 | |
Distribution and production agreements - Pioneer | Balances Without Adoption of ASC 606 | ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 35,767,823 | |
Other product sales | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 37,647,297 | |
Other product sales | Balances Without Adoption of ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 24,152,667 | |
Other product sales | Balances Without Adoption of ASC 606 | ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 37,647,297 | |
Licensing | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 34,215,433 | 0 |
Licensing | Balances Without Adoption of ASC 606 | ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 34,215,433 | |
Services | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 254,566 | |
Services | Balances Without Adoption of ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 410,275 | |
Services | Balances Without Adoption of ASC 606 | ASC 606 | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 254,566 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue Recognition [Line Items] | ||
Finished unit maximum price adjustment percentage per year | 4.00% | |
Price determination period for sales season | 1 year | |
Unbilled receivables billing term | 3 months | |
Bad debt expense | $ 996,461 | $ 78,980 |
Minimum | ||
Revenue Recognition [Line Items] | ||
Term of customer invoice payment | 30 days | |
Maximum term of payments for transfer goods and services | 1 year | |
Maximum | ||
Revenue Recognition [Line Items] | ||
Term of customer invoice payment | 120 days |
Business Combinations - Additio
Business Combinations - Additional information (Details) - USD ($) | 10 Months Ended | 12 Months Ended | |||
Sep. 09, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Oct. 25, 2018 | Jun. 30, 2017 | |
Business Combinations [Abstract] | |||||
Business Acquisition, Description of Acquired Entity | On October 25, 2018, the Company completed the acquisition of substantially all of the assets of Chromatin, Inc. (together with certain of its subsidiaries and affiliates in receivership, "Chromatin"), as well as the assumption of certain contracts and limited specified liabilities of Chromatin, for an aggregate cash purchase price of approximately $26.5 million (the "Acquisition"), pursuant to the terms of its Asset Purchase Agreement, dated September 14, 2018, with Novo Advisors, solely in its capacity as the receiver for, and on behalf of, Chromatin ("Novo"). | ||||
Total acquisition cost allocated | $ 26,450,000 | ||||
Business Acquisition [Line Items] | |||||
Estimated fair value of accounts receivable acquired | 947,015 | ||||
Business Combination, Acquired Receivables, Gross Contractual Amount | 2,164,476 | ||||
Business Combination, Acquired Receivables, Estimated Uncollectible | 1,217,461 | ||||
Goodwill | $ 0 | $ 10,292,265 | $ 1,573,546 | $ 10,292,265 | |
Business Combination, Goodwill Recognized, Description | The estimated fair value of accounts receivable acquired is $947,015, with the gross contractual amount totaling $2,164,476, less $1,217,461 expected to be uncollectible. The current liabilities assumed relate to inventory acquired in the acquisition as well as customer deposits. The excess of the purchase price over the fair value of the net assets acquired, amounting to $1,573,546, was recorded as goodwill on the consolidated balance sheet. The primary item that generated goodwill was the premium paid by the Company for the ability to control the acquired business, technology, and the distribution channels. Goodwill is not amortized for financial reporting purposes, but is amortized for tax purposes. | ||||
Net loss | $ (9,305,242) | (4,725,090) | |||
Chromatin Acquisition | |||||
Business Acquisition [Line Items] | |||||
Revenue | $ 12,400,000 | ||||
Net loss | $ (1,700,000) | ||||
Elimination of acquisition expenses | 1,196,476 | ||||
Amortization of acquired intangibles | 132,222 | 396,667 | |||
Depreciation of acquired property, plant and equipment | $ 358,273 | $ 1,074,780 | |||
Business Acquisition, Pro Forma Information, Description | For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2019 include: (i) the elimination of acquisition expenses of $1,196,476; (ii) amortization of acquired intangibles of $132,222; and (iii) depreciation of acquired property, plant and equipment of $358,273. For purposes of the pro forma disclosures above, the primary adjustments for the year ended June 30, 2018 include: (i) amortization of acquired intangibles of $396,667; and (ii) depreciation of acquired property, plant and equipment of $1,074,780. | ||||
Chromatin Acquisition | Selling, General and Administrative Expenses | |||||
Business Acquisition [Line Items] | |||||
Acquisitions costs | $ 1,196,476 |
Business Combinations (Purchase
Business Combinations (Purchase Price Allocation and Assets Held for Sale) (Details) - USD ($) | 1 Months Ended | |||
Oct. 25, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Business Combinations [Abstract] | ||||
Cash and cash equivalents | $ 95,049 | |||
Accounts receivable | 947,015 | |||
Inventories | 6,959,936 | |||
Prepaid expenses and other current assets | 16,501 | |||
Property, plant and equipment | 10,193,620 | |||
Assets held for sale | 1,930,400 | |||
In-process research and development | 380,000 | |||
Technology/IP - germplasm | 7,200,000 | |||
Trade names | 150,000 | |||
Goodwill | 1,573,546 | $ 0 | $ 10,292,265 | $ 10,292,265 |
Current liabilities | (2,881,198) | |||
Noncurrent liabilities | (114,869) | |||
Total acquisition cost allocated | (26,450,000) | |||
Assets held for sale | ||||
Land and improvements | 320,000 | |||
Buildings and improvements | 1,380,000 | |||
Machinery and equipment | 332,000 | |||
Less: Costs to sell | (101,600) | |||
Less: Fair value adjustment subsequently recorded | (1,230,400) | |||
Assets held for sale | $ 700,000 |
Business Combinations (Acquired
Business Combinations (Acquired Intangibles (Value and Useful Lives) (Details) - Chromatin | 1 Months Ended |
Oct. 25, 2018USD ($) | |
In-process research and development | |
Finite Lived Intangible Assets [Line Items] | |
Fair value of asset | $ 380,000 |
Technology/IP - germplasm | |
Finite Lived Intangible Assets [Line Items] | |
Fair value of asset | $ 7,200,000 |
Estimated Useful Life (years) | 30 years |
Trade names | |
Finite Lived Intangible Assets [Line Items] | |
Fair value of asset | $ 150,000 |
Estimated Useful Life (years) | 5 years |
Total identifiable intangible assets | |
Finite Lived Intangible Assets [Line Items] | |
Fair value of asset | $ 7,730,000 |
Business Combinations (Pro Form
Business Combinations (Pro Forma Financial Information) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Business Combinations [Abstract] | ||
Revenue | $ 111,359,688 | $ 76,847,561 |
Net loss | $ (11,179,299) | $ (11,729,205) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill And Intangible Assets [Line Items] | ||
Discrete cash flow period | 10 years | |
Percentage of fair value in excess of carrying amount | 10.00% | |
Goodwill impairment charges | $ 11,865,811 | $ 0 |
Impairment charge on intangible assets | 6,034,792 | 0 |
Amortization expense | $ 2,133,504 | $ 2,124,333 |
Valuation Income Approach | Measurement Input Discount Rate | ||
Goodwill And Intangible Assets [Line Items] | ||
Percentage of goodwill impairment | 10.60% |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Activity of Goodwill (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Goodwill, Beginning Balance | $ 10,292,265 | $ 10,292,265 |
Goodwill additions | 1,573,546 | 0 |
Goodwill Impairment | (11,865,811) | 0 |
Goodwill, Ending Balance | $ 0 | $ 10,292,265 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | $ 33,109,780 | $ 34,939,079 |
Intangible addition | 7,773,000 | 295,034 |
Intangible Impairment | (6,034,792) | 0 |
Intangible amortization expense | (2,133,504) | (2,124,333) |
Intangible asset | 32,714,484 | 33,109,780 |
Trade name | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 1,159,826 | 1,244,306 |
Intangible addition | 150,000 | 0 |
Intangible Impairment | 0 | 0 |
Intangible amortization expense | (104,480) | (84,480) |
Intangible asset | 1,205,346 | 1,159,826 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 1,156,955 | 1,258,163 |
Intangible addition | 0 | 0 |
Intangible Impairment | 0 | 0 |
Intangible amortization expense | (101,208) | (101,208) |
Intangible asset | 1,055,747 | 1,156,955 |
Non-compete | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 62,720 | 102,035 |
Intangible addition | 0 | 0 |
Intangible Impairment | 0 | 0 |
Intangible amortization expense | (32,453) | (39,315) |
Intangible asset | 30,267 | 62,720 |
GI Customer list | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 71,639 | 78,803 |
Intangible addition | 0 | 0 |
Intangible Impairment | 0 | 0 |
Intangible amortization expense | (7,164) | (7,164) |
Intangible asset | 64,475 | 71,639 |
Supply Agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 1,077,783 | 1,153,415 |
Intangible addition | 0 | 0 |
Intangible Impairment | 0 | 0 |
Intangible amortization expense | (75,629) | (75,632) |
Intangible asset | 1,002,154 | 1,077,783 |
Distribution agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 6,344,253 | 6,728,753 |
Intangible addition | 0 | 0 |
Intangible Impairment | (5,991,792) | 0 |
Intangible amortization expense | (352,461) | (384,500) |
Intangible asset | 0 | 6,344,253 |
Production agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 0 | 111,670 |
Intangible addition | 0 | |
Intangible Impairment | 0 | |
Intangible amortization expense | (111,670) | |
Intangible asset | 0 | |
Grower Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 1,753,208 | 1,858,616 |
Intangible addition | 0 | 0 |
Intangible Impairment | 0 | 0 |
Intangible amortization expense | (105,408) | (105,408) |
Intangible asset | 1,647,800 | 1,753,208 |
Intellectual Property | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 20,873,393 | 21,725,539 |
Intangible addition | 7,200,000 | 295,034 |
Intangible Impairment | 0 | 0 |
Intangible amortization expense | (1,286,925) | (1,147,180) |
Intangible asset | 26,786,468 | 20,873,393 |
In-process research and development | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 0 | |
Intangible addition | 380,000 | |
Intangible Impairment | 0 | |
Intangible amortization expense | 0 | |
Intangible asset | 380,000 | 0 |
Internal use software | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset | 610,003 | 677,779 |
Intangible addition | 43,000 | 0 |
Intangible Impairment | (43,000) | 0 |
Intangible amortization expense | (67,776) | (67,776) |
Intangible asset | $ 542,227 | $ 610,003 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Intangible Assets (Future Amortization) (Details) | Jun. 30, 2019USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
2020 | $ 1,867,303 |
2021 | 1,848,480 |
2022 | 1,848,480 |
2023 | 1,843,188 |
2024 | 1,822,728 |
Thereafter | $ 23,484,305 |
Property, Plant and Equipment -
Property, Plant and Equipment - Components of Property, Plant and Equipment (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 26,914,626 | $ 18,038,596 |
Less: accumulated depreciation | (6,279,677) | (4,858,464) |
Property, plant and equipment, net | 20,634,949 | 13,180,132 |
Land and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 2,150,085 | 2,068,742 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 10,018,108 | 8,888,196 |
Machinery and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 12,579,698 | 5,731,293 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | 2,099,814 | 1,130,276 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment | $ 66,921 | $ 220,089 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 1,995,042 | $ 1,314,954 |
Debt - Schedule of Total Debt O
Debt - Schedule of Total Debt Outstanding (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Working capital lines of credit | ||
Total working capital lines of credit, net | $ 10,755,548 | $ 32,630,559 |
Debt issuance costs | (372,396) | (116,945) |
Current portion of long-term debt | ||
Capital lease. Current | 563,087 | 27,241 |
Debt issuance costs,Current | (11,070) | 0 |
Total current portion, net | 1,113,502 | 503,012 |
Long-term debt, less current portion | ||
Capital lease,Noncurrent | 1,709,481 | 0 |
Debt issuance costs, Noncurrent | (15,078) | 0 |
Total long-term portion, net | 12,158,095 | 12,977,087 |
Total debt, net | 13,271,596 | 13,480,099 |
KeyBank | ||
Working capital lines of credit | ||
Total working capital lines of credit, net | 2,350,000 | 25,050,464 |
National Australia Bank | ||
Working capital lines of credit | ||
Total working capital lines of credit, net | 8,426,400 | 7,697,040 |
National Australia Bank Limited Overdraft Facility | ||
Working capital lines of credit | ||
Total working capital lines of credit, net | 351,544 | 0 |
Keith Facility Building Loan Long Term Current | National Australia Bank | ||
Current portion of long-term debt | ||
Secured Debt, Current | 73,731 | 3,701 |
Keith Facility Machinery & Equipment Loans long term Current | National Australia Bank | ||
Current portion of long-term debt | ||
Secured Debt, Current | 215,519 | 198,251 |
Promissory Note Current | ||
Current portion of long-term debt | ||
Unsecured Debt, Current | 100,000 | 100,000 |
Conterra RE Short | ||
Current portion of long-term debt | ||
Debt issuance costs,Current | (75,707) | (76,981) |
Secured Debt, Current | 247,942 | 229,789 |
Conterra Equip Short | ||
Current portion of long-term debt | ||
Debt issuance costs,Current | 0 | (16,813) |
Secured Debt, Current | 0 | 37,824 |
Keith Facility Building Loans Long term | National Australia Bank | ||
Long-term debt, less current portion | ||
Secured Long-term Debt, Noncurrent | 256,303 | 421,857 |
Keith Facility Machinery & Equipment loans Long Term | National Australia Bank | ||
Long-term debt, less current portion | ||
Secured Long-term Debt, Noncurrent | 309,988 | 431,754 |
Conterra RE Long | ||
Long-term debt, less current portion | ||
Secured Long-term Debt, Noncurrent | 9,922,269 | 10,170,211 |
Debt issuance costs, Noncurrent | (24,869) | (100,576) |
Contera Equip Long | ||
Long-term debt, less current portion | ||
Secured Long-term Debt, Noncurrent | 0 | 2,062,176 |
Debt issuance costs, Noncurrent | $ 0 | $ (8,335) |
Debt - KeyBank Credit Facility
Debt - KeyBank Credit Facility - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Jun. 30, 2019 | |
Line Of Credit Facility [Line Items] | ||
Line of credit facility, borrowing capacity, description | A borrowing base of up to 85% of eligible domestic accounts receivable and 90% of eligible foreign accounts receivable, plus up to the lesser of (i) 75% of the cost eligible inventory or (ii) 90% of the net orderly liquidation value of the inventory, subject to lender reserves. | |
Maximum | ||
Line Of Credit Facility [Line Items] | ||
Borrowing base in percentage based on eligible domestic accounts receivable | 85.00% | |
Borrowing base in percentage based on eligible foreign accounts receivable | 90.00% | |
Borrowing base in percentage based on cost eligible inventory | 75.00% | |
Borrowing base in percentage based on liquidation value of the inventory, subject to lender reserves | 90.00% | |
Borrowing base subject to lender reserves | $ 16,000,000 | |
KeyBank | ||
Line Of Credit Facility [Line Items] | ||
Line of credit and security agreement month and year | 2015-09 | |
Line of credit facility, maximum borrowing capacity | $ 45,000,000 | |
Line of credit facility, description | An aggregate principal amount that the Company may borrow, repay and reborrow, of up to $35.0 million in the aggregate, subject to a requirement that the Company 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). | |
30 consecutive days | KeyBank | Maximum | ||
Line Of Credit Facility [Line Items] | ||
Line of credit facility maintenance of reduced loan balance | 20,000,000 | |
60 consecutive days | KeyBank | Maximum | ||
Line Of Credit Facility [Line Items] | ||
Line of credit facility maintenance of reduced loan balance | $ 25,000,000 | |
Credit Facility | KeyBank | ||
Line Of Credit Facility [Line Items] | ||
Percentage of stock of foreign subsidiary collateralized for credit facility | 65.00% | |
Credit Facility | KeyBank | Eurodollar Rate | ||
Line Of Credit Facility [Line Items] | ||
Basis spread on variable rate | 2.90% | |
Credit Facility | KeyBank | Base Rate | ||
Line Of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.00% | |
Credit Facility | KeyBank | Event Of Default | ||
Line Of Credit Facility [Line Items] | ||
Basis spread on variable rate | 3.00% |
Debt - Loan Transaction - Addit
Debt - Loan Transaction - Additional Information (Details) - Conterra | 1 Months Ended | 12 Months Ended |
Nov. 30, 2017USD ($)PromissoryNote | Jun. 30, 2019 | |
Secured Promissory Notes | ||
Line Of Credit Facility [Line Items] | ||
Gross proceeds from issuance of long term debt | $ 12,500,000 | |
Number of promissory notes issued | PromissoryNote | 2 | |
Secured Real Estate Note | ||
Line Of Credit Facility [Line Items] | ||
Debt instrument, principal amount | $ 10,400,000 | |
Debt instrument, maturity date | Nov. 30, 2020 | |
Debt instrument, extended maturity date | Nov. 30, 2022 | |
Debt instrument, maturity date, description | The Secured Real Estate Note matures on November 30, 2020, which, subject to Conterra's approval, may be extended to November 30, 2022. | |
Debt instrument, interest rate | 7.75% | |
Debt instrument, frequency of periodic payment of interest | Semi-annual payments of interest | |
Debt instrument, amortization schedule | 20 years | |
Debt instrument, combined payment | $ 515,711 | |
Debt instrument, payment starting date | Jul. 1, 2018 | |
Debt instrument, interest only payment term | One-time interest only payment on January 1, 2018 | |
Debt instrument, prepayment term | 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 | ||
Line Of Credit Facility [Line Items] | ||
Debt instrument, principal amount | $ 2,100,000 | |
Debt instrument, maturity date | Nov. 30, 2019 | |
Debt instrument, maturity date, description | The Secured Equipment Note was scheduled to mature on November 30, 2019 . | |
Debt instrument, interest rate | 9.50% | |
Debt instrument, frequency of periodic payment of interest | Semi-annual payments of interest | |
Debt instrument, amortization schedule | 20 years | |
Debt instrument, combined payment | $ 118,223 | |
Debt instrument, payment starting date | Jul. 1, 2018 | |
Debt instrument, interest only payment term | One-time interest only payment on January 1, 2018 | |
Debt instrument, prepayment term | The Secured Equipment Note was repaid in full in August 2018 |
Debt - Additional Information (
Debt - Additional Information (Details) | Aug. 15, 2018USD ($)Point | Jun. 30, 2019 |
Maximum | ||
Line Of Credit Facility [Line Items] | ||
Interest rate | 4.89% | |
Minimum | ||
Line Of Credit Facility [Line Items] | ||
Interest rate | 5.31% | |
Keith Machinery and Equipment Facility | ||
Line Of Credit Facility [Line Items] | ||
Line of credit and security agreement date | Jan. 31, 2015 | |
Interest payable on facility above Australian trade refinance rate quote | 2.90% | |
Master Assets Facility | ||
Line Of Credit Facility [Line Items] | ||
Line of credit and security agreement date | Feb. 29, 2016 | |
Debt instrument maturity year | 2023 | |
Keith Building Loan | ||
Line Of Credit Facility [Line Items] | ||
Facility expiration date | Nov. 30, 2024 | |
Weighted average interest rate | 5.79% | |
American AgCredit | ||
Line Of Credit Facility [Line Items] | ||
Number of sale and leaseback equipment points completed | Point | 5 | |
Proceeds from sale of equipment | $ 2,106,395 | |
Lease term | 5 years | |
Monthly lease payments under lease agreement | $ 40,023 | |
Annual interest rate under lease agreement | 5.60% | |
Repurchase value of lease asset at end of lease term | $ 1 | |
Conterra Agricultural Capital, LLC | ||
Line Of Credit Facility [Line Items] | ||
Repayment of debt principal amount | $ 2,081,527 | |
Debt Instrument, stated interest rate, percentage | 9.50% | |
Payment of outstanding interest on borrowings | $ 24,868 |
Debt - NAB Facilities - Additio
Debt - NAB Facilities - Additional Information (Details) | Jul. 09, 2019 | Jun. 30, 2019USD ($) | Jun. 30, 2019AUD ($) |
Line Of Credit Facility [Line Items] | |||
Line of credit facility, borrowing capacity, description | A borrowing base of up to 85% of eligible domestic accounts receivable and 90% of eligible foreign accounts receivable, plus up to the lesser of (i) 75% of the cost eligible inventory or (ii) 90% of the net orderly liquidation value of the inventory, subject to lender reserves. | ||
Overdraft Facility | |||
Line Of Credit Facility [Line Items] | |||
Line of credit facility interest accrued | 6.77% | 6.77% | |
Increase interest rate per annum | 13.92% | ||
Borrowing Base Facility | |||
Line Of Credit Facility [Line Items] | |||
Line of credit facility, borrowing capacity, description | Borrowing Base Facility permits S&W Australia to borrow funds for periods of up to 180 days, at S&W Australia’s discretion, provided that the term is consistent with its trading terms. | ||
Increase interest rate per annum | 4.50% | ||
Borrowing Base Facility | Maximum | |||
Line Of Credit Facility [Line Items] | |||
Line of credit facility interest accrued | 4.75% | 4.75% | |
Secured debt | $ 15,000,000 | ||
Borrowing Base Facility | Australian Trade Refinance Rate | |||
Line Of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.50% | ||
NAB Facility | |||
Line Of Credit Facility [Line Items] | |||
Facility outstanding amount | $ 8,780,753 | 12,504,633 | |
NAB Facility | Overdraft Facility | |||
Line Of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | 1,404,400 | 2,000,000 | |
NAB Facility | Borrowing Base Facility | |||
Line Of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 9,128,600 | $ 13,000,000 | |
NAB Facility | Borrowing Base Facility | British Bankers’ Association Interest Settlement Rate | |||
Line Of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.50% | ||
NAB Facility | Subsequent Event | |||
Line Of Credit Facility [Line Items] | |||
Facility amendment date | Jul. 9, 2019 | ||
Facility expiration date | Mar. 31, 2021 |
Debt - Schedule of Annual Matur
Debt - Schedule of Annual Maturities of Short-Term and Long-Term Debt (Details) | Jun. 30, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 1,200,279 |
2021 | 10,764,617 |
2022 | 705,216 |
2023 | 582,859 |
2024 | 145,349 |
Thereafter | 0 |
Total | $ 13,398,320 |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (9,336,700) | $ (5,112,254) |
Foreign | (164,974) | 530,213 |
Loss before income taxes | $ (9,501,674) | $ (4,582,041) |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 28,591 | 0 |
Foreign | 92,744 | 100,122 |
Total current provision | 121,335 | 100,122 |
Deferred: | ||
Federal | (227,142) | 20,785 |
State | (42,940) | 22,142 |
Foreign | 0 | 0 |
Total deferred provision (benefit) | (270,082) | 42,927 |
(Benefit) Provision for income taxes | $ (148,747) | $ 143,049 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Provision and Expected Income Tax Computed Using U.S. Federal Income Tax Rate (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at statutory tax rate | $ (1,995,352) | $ (1,262,509) |
State benefit, net of federal benefit | (304,015) | (133,666) |
Mark to market on financial instruments | 0 | (118,838) |
Section 965 toll tax | 0 | 584,086 |
Other permanent differences | 23,786 | (144,049) |
Federal and state research credits - current year | (228,039) | (89,572) |
Foreign rate differential | 10,819 | (971) |
Shortfall on restricted stock vest | 49,118 | 155,783 |
Change in unrecognized tax benefit | 49,939 | 0 |
Tax Cuts and Jobs Act | 0 | 3,264,391 |
Valuation allowance | 2,265,361 | (2,145,250) |
Other | (20,364) | 33,644 |
(Benefit) Provision for income taxes | $ (148,747) | $ 143,049 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Line Items] | |||
Statutory corporate income tax rate | 35.00% | 21.00% | |
Tax charge as result of Tax Act | $ 3,800,000 | ||
Tax expense for U.S. transition tax on accumulated earnings of foreign subsidiaries | 500,000 | ||
Tax expense for DTA re-measurement | 3,300,000 | ||
Deferred tax assets, increase in valuation allowance | 2,300,000 | ||
Undistributed earnings of foreign subsidiaries | 3,800,000 | ||
Unrecognized tax benefits | 63,214 | ||
Unrecognized tax benefits that, if recognized, would reduce annual effective tax rate | 49,939 | ||
Accrued interest and penalties associated with uncertain tax positions | 0 | $ 0 | |
Unrecognized tax benefits to change significantly | 0 | ||
Federal | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | $ 24,700,000 | ||
Operating loss carryforwards, expiration dates | Jun. 30, 2030 | ||
Net operating loss carryovers as result of Tax Cuts and Jobs Act, not subject to expiration | $ 4,900,000 | ||
Research tax credit carryforwards | $ 642,463 | ||
Research tax credit carryforwards, expiration dates | Jun. 30, 2031 | ||
Foreign tax credit carryforwards | $ 157,859 | ||
Foreign tax credit carryforwards, expiration dates | Jun. 30, 2023 | ||
State | |||
Income Tax Disclosure [Line Items] | |||
Operating loss carryforwards | $ 8,300,000 | ||
Operating loss carryforwards, expiration dates | Jun. 30, 2030 | ||
Research tax credit carryforwards | $ 23,170 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Deferred tax assets: | ||
Net operating loss carry forwards | $ 5,817,688 | $ 6,771,974 |
Compensation accruals | 261,365 | 144,550 |
Allowance for bad debts | 1,376,388 | 151,972 |
Stock compensation | 288,648 | 241,837 |
Tax credit carry forwards | 662,283 | 434,245 |
Intangible assets | 2,226,539 | 0 |
Deferred Rent | 47,226 | 90,466 |
Assets held for sale | 367,387 | 0 |
Other, net | 476,411 | 277,065 |
Total deferred tax assets | 11,523,935 | 8,112,109 |
Valuation allowance for deferred tax assets | (9,774,130) | (7,506,759) |
Deferred tax assets, net of valuation allowance | 1,749,805 | 605,350 |
Deferred tax liabilities | ||
Intangible assets | 0 | (519,942) |
Fixed assets | (1,749,805) | (355,491) |
Total deferred tax liabilities | (1,749,805) | (875,433) |
Net deferred tax asset / (liability) | $ 0 | $ (270,083) |
Warrants - Schedule of Warrants
Warrants - Schedule of Warrants Outstanding (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Class Of Warrant Or Right [Line Items] | ||
Warrants outstanding, beginning | 2,699,999 | 2,699,999 |
Warrant issuances | 0 | 0 |
Warrants expired | 0 | 0 |
Warrants outstanding. ending | 2,699,999 | 2,699,999 |
Warrants | ||
Class Of Warrant Or Right [Line Items] | ||
Warrant issue date | 2014-12 | 2014-12 |
Exercise Price Per Share | $ 4.32 | $ 4.32 |
Warrant expiration date | 2020-06 | 2020-06 |
Warrants outstanding, beginning | 2,699,999 | 2,699,999 |
Warrant issuances | 0 | 0 |
Warrants expired | 0 | 0 |
Warrants outstanding. ending | 2,699,999 | 2,699,999 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | Oct. 23, 2018 | Sep. 05, 2018 | Dec. 22, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Nov. 20, 2018 |
Class Of Stock [Line Items] | ||||||
Sale of common stock | $ 12,250,000 | |||||
Aggregate gross proceeds from sale of convertible preferred stock | $ 22,500,000 | $ 22,373,842 | $ 0 | |||
Preferred stock, voting rights | no | |||||
Number of preferred shares converted in to common stock | 1,000 | |||||
Series A Convertible Preferred Stock | Securities Purchase Agreement | MFP | ||||||
Class Of Stock [Line Items] | ||||||
Purchase price per share | $ 3,110 | |||||
Sale of preferred stock | $ 7,235 | |||||
Common Stock | ||||||
Class Of Stock [Line Items] | ||||||
Number of preferred shares converted in to common stock | 7,235,000 | |||||
Common Stock | Securities Purchase Agreement | MFP | ||||||
Class Of Stock [Line Items] | ||||||
Sale of common stock | $ 1,607,717 | |||||
Purchase price per share | $ 3.11 |
Foreign Currency Contracts - Ad
Foreign Currency Contracts - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Foreign Currency Contracts [Line Items] | ||
Foreign exchange contract liability | $ 42,255 | $ 100,138 |
Gain on foreign exchange contracts | 52,788 | |
Loss on foreign exchange contracts | $ 272,801 | |
Foreign Currency Forward Contracts | ||
Foreign Currency Contracts [Line Items] | ||
Foreign currency forward contracts, notional value | $ 2,192,223 | |
Minimum | ||
Foreign Currency Contracts [Line Items] | ||
Foreign currency maturity term | 2019-07 | |
Maximum | ||
Foreign Currency Contracts [Line Items] | ||
Foreign currency maturity term | 2019-10 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Operating leases, rent expense, minimum rentals | $ 763,874 | $ 401,375 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Lease Payments Obligations (Details) | Jun. 30, 2019USD ($) | |
Year ending June 30: | ||
2020 | $ 640,135 | |
2021 | 634,422 | |
2022 | 352,730 | |
2023 | 201,800 | |
2024 | 235,776 | |
2025 and beyond | 366,581 | |
Total | $ 2,431,444 | [1] |
[1] | Minimum payments have not been reduced by minimum sublease rentals of $788,400 due in the future under noncancelable sublease |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Lease Payments Obligations (Parenthetical) (Details) | Jun. 30, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
Future minimum sublease rentals due | $ 788,400 |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Operating Leases Rental Expense (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Minimum rentals | $ 763,874 | $ 401,375 |
Less: Sublease rentals | (87,600) | (43,800) |
Operating leases, rent expense, net | $ 676,274 | $ 357,575 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | Dec. 31, 2018 | Dec. 21, 2018 | Sep. 05, 2018 | Dec. 22, 2017 | Oct. 11, 2017 | Jul. 19, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 18, 2018 |
Related Party Transaction [Line Items] | |||||||||
Common stock sold | $ 4,927,682 | $ 22,459,339 | |||||||
Gross proceeds from common stock | $ 12,250,000 | ||||||||
MFP Loan Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | ||||||||
Line of credit facility, minimum increment borrowing capacity | $ 1,000,000 | ||||||||
Line of credit facility, fixed per annum rate | 6.00% | ||||||||
Line of credit facility, fee percentage | 2.00% | ||||||||
Line of credit facility, drew down amount | $ 1,000,000 | ||||||||
Repayments of line of credit | $ 1,000,000 | ||||||||
Facility outstanding amount | 0 | ||||||||
Securities Purchase Agreement | Mark W. Wong | |||||||||
Related Party Transaction [Line Items] | |||||||||
Gross proceeds from common stock | $ 262,500 | ||||||||
Common Stock | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock sold | $ 1,608 | $ 6,260 | |||||||
Common stock sold and issued | 3,500,000 | 1,607,717 | 6,260,000 | ||||||
Common Stock | Rights Offering | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock sold and issued | 2,594,923 | ||||||||
Purchase price of common stock | $ 3.50 | ||||||||
Common Stock | MFP | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock sold and issued | 905,077 | ||||||||
Common Stock | Securities Purchase Agreement | MFP | |||||||||
Related Party Transaction [Line Items] | |||||||||
Gross proceeds from common stock | $ 1,607,717 | ||||||||
Common Stock | Securities Purchase Agreement | Mark W. Wong | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock sold and issued | 75,000 | ||||||||
Purchase price of common stock | $ 3.50 | ||||||||
Common Stock | Wynnefield | Securities Purchase Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock sold | $ 3,000,000 | ||||||||
Common Stock | MFP | Securities Purchase Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Common stock sold | $ 3,700,000 | ||||||||
Minimum | Common Stock | Wynnefield | Securities Purchase Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Beneficial ownership percentage | 5.00% | ||||||||
Minimum | Common Stock | MFP | Securities Purchase Agreement | |||||||||
Related Party Transaction [Line Items] | |||||||||
Beneficial ownership percentage | 5.00% |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Jan. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 16, 2019 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Oct. 31, 2012 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock-based compensation | $ 694,610 | $ 748,516 | ||||||||
Restricted Stock Units | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock-based compensation, total compensation cost not yet recognized, period for recognition | 1 year 4 months 24 days | |||||||||
Number of shares issued | 175,758 | 78,642 | ||||||||
Total fair value of vested stock | $ 472,171 | $ 279,611 | ||||||||
Stock-based compensation | 379,212 | $ 487,391 | ||||||||
Unrecognized stock compensation expense related to restricted stock grants | $ 297,670 | |||||||||
Maximum | Restricted Stock Units | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Vesting period | 3 years | |||||||||
Minimum | Restricted Stock Units | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Vesting period | 1 year | |||||||||
2009 Plan | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Number of shares available for issuance of grants | 350,343 | 2,450,000 | 2,450,000 | 1,700,000 | 1,700,000 | 1,250,000 | 1,250,000 | |||
Options granted | 1,143,447 | 497,178 | ||||||||
Exercise price, lower range limit | $ 2.19 | |||||||||
Exercise price, upper range Limit | 3.30 | |||||||||
Stock options granted and outstanding, weighted average grant date fair value | $ 0.99 | |||||||||
Unrecognized stock compensation expense, net of estimated forfeitures, related to options | $ 458,246 | |||||||||
Stock-based compensation, total compensation cost not yet recognized, period for recognition | 1 year 10 months 2 days | |||||||||
2009 Plan | Maximum | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock options, term | 10 years | |||||||||
Vesting period | 3 years | |||||||||
2009 Plan | Minimum | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock options, term | 5 years | |||||||||
Voting stock, percentage | 10.00% | |||||||||
Fair market value of common stock, percentage | 110.00% | |||||||||
Vesting period | 1 year | |||||||||
2019 Plan | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Number of shares available for issuance of grants | 2,957,294 | |||||||||
Number of shares reserved for issuance under the plan | 4,243,790 | |||||||||
Number of new shares | 2,750,000 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Weighted Average Assumptions (Details) - Stock Options | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk free rate, minimum | 1.90% | 1.70% |
Risk free rate, maximum | 3.00% | 2.30% |
Dividend yield | 0.00% | 0.00% |
Volatility of common stock, minimum | 34.50% | 45.30% |
Volatility of common stock, maximum | 41.50% | 45.50% |
Average forfeiture assumptions | 1.10% | 1.40% |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary Of Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Options, Outstanding as of beginning of period | 792,074 | 990,528 | |
Options, Granted | 497,178 | 103,283 | |
Options, Exercised | (49,000) | ||
Options, Canceled/forfeited/expired | (166,500) | (252,737) | |
Options, Outstanding as of end of period | 1,122,752 | 792,074 | 990,528 |
Options, vested and exercisable at end of period | 618,668 | ||
Options, vested and expected to vest | 1,120,572 | ||
Weighted-Average Exercise Prices, Outstanding as of beginning of period | $ 4.55 | $ 5.12 | |
Weighted-Average Exercise Prices, Granted | 2.85 | 3.45 | |
Weighted-Average Exercise Prices, Exercised | 3.95 | ||
Weighted-Average Exercise Prices, Canceled/forfeited/expired | 6.17 | 6.46 | |
Weighted-Average Exercise Prices, Outstanding as of end of period | 3.55 | $ 4.55 | $ 5.12 |
Weighted-Average Exercise Prices, vested and exercisable | 4.04 | ||
Weighted-Average Exercise Price, vested and expected to vest | $ 3.55 | ||
Options Outstanding, Weighted-Average Remaining Contractual Term (in years) | 8 years | 6 years 3 months 18 days | 4 years 3 months 18 days |
Weighted-Average Remaining Contractual Term (in years), vested and exercisable | 7 years | ||
Weighted-Average Remaining Contractual Term (in years), vested and expected to vest | 8 years | ||
Options, Outstanding, Aggregate Intrinsic Value | $ 34,135 | $ 10,413 | $ 100,344 |
Options, vested and expected to vest, Aggregate Intrinsic Value | $ 33,928 |
Equity-Based Compensation - S_2
Equity-Based Compensation - Summary of Activity Related to Non-Vested Restricted Stock Units (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Nonvested Restricted Stock Units Outstanding, Beginning | 89,193 | 120,971 | |
Number of Nonvested Restricted Stock Units, Granted | 175,758 | 78,642 | |
Number of Nonvested Restricted Stock Units, Vested | (107,747) | (105,985) | |
Number of Nonvested Restricted Stock Units, Forfeited | (4,435) | ||
Number of Nonvested Restricted Stock Units Outstanding, Ending | 157,204 | 89,193 | 120,971 |
Weighted-Average Grant Date Fair Value, Beginning | $ 3.98 | $ 5.59 | |
Weighted-Average Grant Date Fair Value, Granted | 2.69 | 3.56 | |
Weighted-Average Grant Date Fair Value, Vested | 3.75 | 5.49 | |
Weighted-Average Grant Date Fair Value, Forfeited | 4.45 | ||
Weighted-Average Grant Date Fair Value, Ending | $ 2.69 | $ 3.98 | $ 5.59 |
Weighted-Average Remaining Contractual Life (Years) | 1 year 4 months 24 days | 1 year 1 month 6 days | 1 year |
Weighted-Average Remaining Contractual Life (Years), Granted | 2 years 9 months 18 days | 1 year 3 months 18 days |
Non-Cash Activities for State_3
Non-Cash Activities for Statements of Cash Flows - Schedule of Consolidated Statements of Cash Flows for Non-Cash Activities (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Supplemental Cash Flow Elements [Abstract] | ||
Fair value of assets acquired | $ 29,446,067 | $ 0 |
Cash paid for the acquisition | (26,450,000) | 0 |
Liabilities assumed | (2,996,067) | 0 |
Purchases of equipment classified as capital lease | $ (574,018) | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - S&W Australia | 1 Months Ended |
Aug. 30, 2019USD ($) | |
Subsequent Event [Line Items] | |
One time license fee | $ 2,300,000 |
Purchase price of equipment | $ 300,000 |
License initial term | 15 years |