S&W Announces Second Quarter Fiscal 2024 Financial Results
- Revenue for the second quarter of fiscal 2024 decreased by 16.0% compared to the same period in fiscal 2023.
- Gross profit margin improved to 30.3% in the second quarter of fiscal 2024.
- GAAP net loss for the second quarter of fiscal 2024 was ($6.5) million, or ($0.15) per basic and diluted share.
- Adjusted EBITDA for the second quarter of fiscal 2024 improved to ($3.2) million compared to ($4.6) million for the second quarter of fiscal 2023.
- S&W Seed Company received additional payments related to biofuel production and wheat development partnerships.
- The company appointed Vanessa Baughman as the full-time Chief Financial Officer.
- Despite challenges in the MENA region, the company expects revenue from Double Team sorghum solutions to increase in fiscal 2024.
- Revenue decline of 16.0% compared to the same period in fiscal 2023.
- GAAP net loss of ($6.5) million for the second quarter of fiscal 2024.
- Adjusted EBITDA for the second quarter of fiscal 2024 was still negative at ($3.2) million.
- Impact of MENA region conflicts on international alfalfa operations.
- Lower end revenue expectation for fiscal 2024 due to MENA region dynamics.
Insights
The reported 16.0% decrease in quarterly revenue for S&W Seed Company indicates a significant contraction in sales, which is a critical metric for investors monitoring the company's performance. This decline was primarily due to reduced sales in the MENA region, driven by market disruptions and strategic decisions around pricing. Despite this, the increase in gross profit margin from 21.3% to 30.3% reflects a positive shift towards higher-margin products, such as the Double TeamTM sorghum. This suggests an effective strategy in product mix optimization that could lead to improved profitability in the long term.
However, the GAAP net loss widening from ($6.0) million to ($6.5) million year-over-year implies that the company is still facing challenges in achieving net profitability. The adjusted EBITDA improvement, from ($4.6) million to ($3.2) million, is a positive sign of operational efficiency gains, but stakeholders should remain cautious as the company still operates at a loss. The guidance for fiscal 2024, with expected revenue on the lower end of the forecast range, coupled with an anticipated adjusted EBITDA loss, suggests continued operational challenges ahead.
The company's focus on sorghum, particularly the Double Team Grain Sorghum, represents a strategic emphasis on innovation within a niche market. With a 233% increase in sales for this product, S&W is capitalizing on the demand for sorghum as a versatile grain that can thrive in harsher climates. This positions the company well within a segment that may experience growth due to climate change and the need for more resilient crops. The introduction of additional sorghum products, such as the Double Team Forage Sorghum and Prussic Acid Free Trait, could further solidify S&W's market position, provided these products meet farmer satisfaction and demand similar to Double Team Grain Sorghum.
However, the geopolitical tensions in the MENA region and the resultant shift of alfalfa growers to wheat could have a prolonged impact on the company's international operations. While cost-saving measures have been implemented, the extent to which these will offset the loss in revenue from alfalfa sales remains to be seen. This underscores the importance of diversification and the ability to pivot in response to global events that affect agricultural markets.
The external factors impacting S&W Seed Company's performance, such as government incentives in Saudi Arabia that influence crop choice, highlight the sensitivity of agricultural businesses to policy changes. The payment received from Shell Oil Products US and Trigall Genetics S.A. as additional considerations for partnerships and sales of interests demonstrate the company's strategic moves to secure alternative revenue streams. This is a prudent approach in light of the unpredictable nature of global agricultural markets.
Moreover, the appointment of Vanessa Baughman as the full-time CFO could bring financial stability and a renewed strategic focus, given her experience in the industry. The financial acumen and strategic planning she may bring to the role could be instrumental in navigating the company through the current financial challenges and towards its profitability goals.
Financial Highlights
- Revenue for the second quarter of fiscal 2024 was
$10.9 million 16.0% decrease compared to the second quarter of fiscal 2023. Double TeamTM sorghum revenue was$4.0 million $1.2 million - Gross profit margin for the second quarter of fiscal 2024 was
30.3% , an improvement from21.3% in the second quarter of fiscal 2023. - GAAP operating expenses were
$7.9 million $9.0 million - GAAP net loss was
( , or ($6.5) million $0.15 ( , or ($6.0) million $0.14 - Adjusted EBITDA (see Table B) improved to
( for the second quarter of fiscal 2024 compared to$3.2) million ( for the second quarter of fiscal 2023.$4.6) million - Received
$6.0 million $1.0 million 80% interest in Trigall Australia Pty Ltd., a wheat development partnership, in December 2022.
Management Discussion
"We continued to successfully implement key operational initiatives to drive efficiencies across the global organization. These initiatives, coupled with our higher mix of Double Team sales, provided a gross margin improvement to
"While we are achieving strong adoption in our high margin sorghum trait technology solutions, we are closely monitoring the dynamics from the expanding conflicts in the Middle East North Africa, or MENA, region on our international alfalfa product operations. The war in
"We believe we are well positioned within our
CFO Update
The Company's board of directors appointed Vanessa Baughman as the Company's full-time Chief Financial Officer effective February 12, 2024. Ms. Baughman has been serving as the Company's Interim Chief Financial Officer and corporate Secretary since May 2023. Prior to joining S&W, Ms. Baughman served as Chief Financial Officer and Vice President of Finance of AgReliant Genetics, LLC, the third largest North American seed corn company, headquartered in
Financial Results
Total revenue for the second quarter of fiscal 2024 was
Gross profit margin for the second quarter of fiscal 2024 was
GAAP operating expenses for the second quarter of fiscal 2024 were
Adjusted operating expenses (see Table A1) for the second quarter of fiscal 2024 were
GAAP net loss for the second quarter of fiscal 2024 was
Adjusted net loss (see Table A2) for the second quarter of fiscal 2024 was
Adjusted EBITDA (see Table B) for the second quarter of fiscal 2024 was
Fiscal 2024 Guidance
Due to the dynamics in the MENA region potentially impacting international alfalfa operations, S&W expects fiscal 2024 revenue to be on the lower end of the previously communicated range of
As the partnership with Shell is accounted for as an equity method investment, it is not expected to have a material impact on S&W's full-year financial results for fiscal 2024.
Conference Call
S&W Seed Company has scheduled a conference call for Wednesday, February 14, 2024, at 11:00am ET (8:00am PT) to review these results. Interested parties can access the conference call by dialing (844) 861-5498 or (412) 317-6580 or can listen via a live Internet webcast, which is available in the Investor Relations section of the Company's website at http://www.swseedco.com/investors. A teleconference replay of the call will be available for seven days at (877) 344-7529 or (412) 317-0088, confirmation #1634446. A webcast replay will be available in the Investor Relations section of the Company's website at http://www.swseedco.com/investors for 30 days.
Non-GAAP Financial Measures
In addition to financial results reported in accordance with accounting principles generally accepted in
For reconciliations of historical non-GAAP financial measures to the most comparable financial measures under GAAP, see Tables A1, A2, and B accompanying this release. We have not reconciled our guidance for adjusted EBITDA for fiscal 2024 to net loss because the reconciling line items that impact net loss, including interest expense, non-cash stock-based compensation, foreign currency loss, and equity in loss of equity method investee (Vision Bioenergy), net of tax, among others, are uncertain or out of our control and cannot be reasonably predicted. The actual amount of these items during fiscal 2024 will have a significant impact on net loss. Accordingly, a reconciliation of this non-GAAP measure to its most directly comparable GAAP measure is not available without unreasonable efforts.
In order to calculate these non-GAAP financial measures, we make targeted adjustments to certain GAAP financial line items found on our condensed consolidated statement of operations, backing out non-recurring or unique items that we believe otherwise distort the underlying results and trends of the ongoing business. We have excluded the following items from one or more of our non-GAAP financial measures for the periods presented:
Selling, general and administrative expenses; operating expenses. We exclude from operating expenses a portion of SG&A expense related to depreciation and amortization, non-cash stock-based compensation, and non-recurring transaction costs. We exclude non-recurring transaction costs from our SG&A expense and total operating expenses to provide investors a method to compare our operating results to prior periods and to peer companies, as such amounts can vary significantly based on the frequency of acquisitions and the magnitude of acquisition expenses.
Foreign currency loss. The foreign currency loss represents fluctuations from changes in exchange rates that are uncertain or out of our control and cannot be reasonably predicted. We believe it is useful to exclude this amount in order to better understand our business performance and allow investors to compare our results with peer companies.
Interest expense – amortization of debt discount. Amortization of debt discount and debt issuance costs are primarily related to our working capital lines of credit and term loans. These amounts are non-cash charges and are unrelated to our core performance during any particular period. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
Interest expense, net. Interest expense, net primary consists of interest incurred on our working capital credit facilities, the MFP Loan, and equipment capital leases. We believe it is useful to exclude these amounts to better understand our business performance and allow investors to compare our results with peer companies.
Dividends accrued for participating securities and accretion. Dividends accrued for participating securities and accretion relates to dividends accrued for the Series B convertible preferred stock and the accretion for the discount related to the warrants issued in conjunction with the Series B convertible preferred stock. We believe it is useful to exclude these amounts in order to better understand our business performance and allow investors to compare our results with peer companies.
Equity in loss of equity method investee (Vision Bioenergy), net of tax. This loss represents S&W's percentage of Vision Bioenergy's loss for the three and six months ended December 31, 2023, as it has significant influence in the Company. We believe it is useful to exclude this amount in order to better understand our business performance and allow investors to compare our results with peer companies.
Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows:
Adjusted Operating Expenses. We define adjusted operating expenses as GAAP operating expenses adjusted to exclude depreciation and amortization, loss on disposal of property, plant and equipment, and one-time, non-recurring expenses. We believe that the use of adjusted operating expenses is useful to investors and other users of our financial statements in evaluating our operating performance because it provides a method to compare our operating results to prior periods and to peer companies after making adjustments for depreciation and amortization and amounts that are not expected to recur.
Adjusted net loss and loss per share. We define adjusted net loss as net loss attributable to S&W Seed Company less interest expense – amortization of debt discount, non-recurring transaction costs, dividends accrued for participating securities and accretion and equity in loss of equity method investee (Vision Bioenergy), net of tax. We believe that these non-GAAP financial measures provide useful supplemental information for evaluating our operating performance.
Adjusted EBITDA. We define adjusted EBITDA as net loss attributable to S&W Seed Company adjusted to exclude interest expense, net, interest expense – amortization of debt discount, provision for (benefit from) income taxes, depreciation and amortization, non-recurring transaction costs, non-cash stock-based compensation, foreign currency loss, gain on disposal of intangible assets, gain on sale of equity investment, equity in loss of equity method investee (Vision Bioenergy), net of tax, and dividends accrued for participating securities and accretion. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We use adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance, for planning purposes, including the preparation of our annual operating budget, to evaluate the effectiveness of our business strategies and to communicate with our board of directors concerning our financial performance. Management does not place undue reliance on adjusted EBITDA as its only measure of operating performance. Adjusted EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP.
Financial Tables
For a complete press release including financial tables, please view online at: https://swseedco.com/investors/press-releases/.
About S&W Seed Company
Founded in 1980, S&W Seed Company is a global multi-crop, middle-market agricultural company headquartered in
Safe Harbor Statement
This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. "Forward-looking statements" describe future expectations, plans, results, or strategies and are generally preceded by words such as "ability," "believe," "may," "future," "plan," "should" or "expects." Forward-looking statements in this release include, but are not limited to: our guidance on revenue and adjusted EBITDA for the fiscal year ending June 30, 2024; our success in developing and commercializing Double Team Forage Sorghum solution and Prussic Acid Free Trait for sorghum; our expected timelines for the development and launch of our products; the projected growth of Double Team Grain Sorghum's share of all grain sorghum acres in the
Company Contact:
Mark Herrmann, Chief Executive Officer
S&W Seed Company
Phone: (720) 593-3570
www.swseedco.com
Investor Contact:
Robert Blum
Lytham Partners, LLC
Phone: (602) 889-9700
sanw@lythampartners.com
www.lythampartners.com
S & W SEED COMPANY | |||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||
(UNAUDITED) | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||
Revenue | $ | 10,864,809 | $ | 12,937,802 | $ | 27,297,275 | $ | 32,803,667 | |||||||||
Cost of revenue | 7,575,685 | 10,188,511 | 18,996,837 | 25,549,865 | |||||||||||||
Gross profit | 3,289,124 | 2,749,291 | 8,300,438 | 7,253,802 | |||||||||||||
Operating expenses | |||||||||||||||||
Selling, general and administrative expenses | 5,892,922 | 6,242,212 | 11,679,502 | 11,298,469 | |||||||||||||
Research and development expenses | 994,648 | 1,503,473 | 2,081,160 | 3,018,853 | |||||||||||||
Depreciation and amortization | 1,076,019 | 1,253,904 | 2,145,042 | 2,590,338 | |||||||||||||
Gain on disposal of property, plant and equipment | (68,734) | (751) | (101,690) | (4,411) | |||||||||||||
Total operating expenses | 7,894,855 | 8,998,838 | 15,804,014 | 16,903,249 | |||||||||||||
Loss from operations | (4,605,731) | (6,249,547) | (7,503,576) | (9,649,447) | |||||||||||||
Other (income) expense | |||||||||||||||||
Foreign currency loss | 244,298 | 176,624 | 616,486 | 367,539 | |||||||||||||
Gain on disposal of intangible assets | — | (1,796,252) | — | (1,796,252) | |||||||||||||
Gain on sale of equity investment | — | (32,030) | — | (32,030) | |||||||||||||
Interest expense - amortization of debt discount | 446,017 | 578,112 | 901,591 | 861,755 | |||||||||||||
Interest expense - convertible debt and other | 1,337,992 | 1,092,327 | 2,743,759 | 1,879,006 | |||||||||||||
Other (income) expenses | (59,336) | 546 | (96,896) | (43,724) | |||||||||||||
Loss before income taxes | (6,574,702) | (6,268,874) | (11,668,516) | (10,885,741) | |||||||||||||
Benefit from income taxes | (756,985) | (282,296) | (755,778) | (383,960) | |||||||||||||
Loss before equity in net earnings of affiliates | (5,817,717) | (5,986,578) | (10,912,738) | (10,501,781) | |||||||||||||
Equity in loss of equity method investees, net of tax | 676,329 | 4,015 | 1,538,225 | 4,015 | |||||||||||||
Net loss | (6,494,046) | (5,990,593) | (12,450,963) | (10,505,796) | |||||||||||||
Loss attributable to noncontrolling interests | (25,194) | (4,588) | (32,482) | (10,850) | |||||||||||||
Net loss attributable to S&W Seed Company | $ | (6,468,852) | $ | (5,986,005) | $ | (12,418,481) | $ | (10,494,946) | |||||||||
Calculation of net loss per share: | |||||||||||||||||
Net loss attributable to S&W Seed Company | $ | (6,468,852) | $ | (5,986,005) | $ | (12,418,481) | $ | (10,494,946) | |||||||||
Dividends accrued for participating securities and accretion | (124,431) | (114,062) | (244,476) | (228,123) | |||||||||||||
Net loss attributable to common shareholders | $ | (6,593,283) | $ | (6,100,067) | $ | (12,662,957) | $ | (10,723,069) | |||||||||
Net loss attributable to S&W Seed Company per common share, basic and diluted | $ | (0.15) | $ | (0.14) | $ | (0.29) | $ | (0.25) | |||||||||
Weighted average number of common shares outstanding, basic and diluted | 43,091,438 | 42,651,270 | 43,050,329 | 42,627,645 | |||||||||||||
TABLE A1 | |||||||||||||||
S&W SEED COMPANY | |||||||||||||||
ITEMIZED RECONCILIATION BETWEEN OPERATING EXPENSES AND NON-GAAP ADJUSTED OPERATING EXPENSES | |||||||||||||||
(UNAUDITED) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Operating expenses | $ | 7,894,855 | $ | 8,998,838 | $ | 15,804,014 | $ | 16,903,249 | |||||||
Less: | |||||||||||||||
Depreciation and amortization | (1,076,019) | (1,253,904) | (2,145,042) | (2,590,338) | |||||||||||
Non-recurring transaction costs | (161,268) | (189,125) | (323,499) | (262,618) | |||||||||||
Gain on disposal of property, plant and equipment | 68,734 | 751 | 101,690 | 4,411 | |||||||||||
Non-GAAP adjusted operating expenses | $ | 6,726,302 | $ | 7,556,560 | $ | 13,437,163 | $ | 14,054,704 | |||||||
TABLE A2 | |||||||||||||||
S&W SEED COMPANY | |||||||||||||||
ITEMIZED RECONCILIATION BETWEEN NET LOSS AND NON-GAAP ADJUSTED NET LOSS | |||||||||||||||
(UNAUDITED) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net loss attributable to S&W Seed Company | $ | (6,468,852) | $ | (5,986,005) | $ | (12,418,481) | $ | (10,494,946) | |||||||
Interest expense - amortization of debt discount | 446,017 | 578,112 | 901,591 | 861,755 | |||||||||||
Non-recurring transaction costs | 161,268 | 189,125 | 323,499 | 262,618 | |||||||||||
Dividends accrued for participating securities and accretion | (124,431) | (114,062) | (244,476) | (228,123) | |||||||||||
Equity in loss of equity method investee (Vision Bioenergy), net of tax | 577,039 | — | 1,354,012 | — | |||||||||||
Non-GAAP adjusted net loss | $ | (5,408,959) | $ | (5,332,830) | $ | (10,083,855) | $ | (9,598,696) | |||||||
Non-GAAP adjusted net loss attributable to | $ | (0.13) | $ | (0.13) | $ | (0.23) | $ | (0.23) | |||||||
Weighted average number of common shares outstanding, basic and diluted | 43,091,438 | 42,651,270 | 43,050,329 | 42,627,645 | |||||||||||
TABLE B | |||||||||||||||||||||
S&W SEED COMPANY | |||||||||||||||||||||
ITEMIZED RECONCILIATION BETWEEN NET LOSS AND NON-GAAP ADJUSTED EBITDA | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Net loss attributable to S&W Seed Company | $ | (6,468,852) | $ | (5,986,005) | $ | (12,418,481) | $ | (10,494,946) | |||||||||||||
Interest expense, net | 1,337,992 | 1,092,327 | 2,743,759 | 1,879,006 | |||||||||||||||||
Interest expense - amortization of debt discount | 446,017 | 578,112 | 901,591 | 861,755 | |||||||||||||||||
Benefit from income taxes | (756,985) | (282,296) | (755,778) | (383,960) | |||||||||||||||||
Depreciation and amortization | 1,076,019 | 1,253,904 | 2,145,042 | 2,590,338 | |||||||||||||||||
Non-recurring transaction costs | 161,268 | 189,125 | 323,499 | 262,618 | |||||||||||||||||
Non-cash stock-based compensation | 283,327 | 305,894 | 695,147 | 762,006 | |||||||||||||||||
Foreign currency loss | 244,298 | 176,624 | 616,486 | 367,539 | |||||||||||||||||
Gain on disposal of intangible assets | — | (1,796,252) | — | (1,796,252) | |||||||||||||||||
Gain on sale of equity investment | — | (32,030) | — | (32,030) | |||||||||||||||||
Equity in loss of equity method investee (Vision Bioenergy), net of tax | 577,039 | — | 1,354,012 | — | |||||||||||||||||
Dividends accrued for participating securities and accretion | (124,431) | (114,062) | (244,476) | (228,123) | |||||||||||||||||
Non-GAAP adjusted EBITDA | $ | (3,224,308) | $ | (4,614,659) | $ | (4,639,199) | $ | (6,212,049) | |||||||||||||
S & W SEED COMPANY | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(UNAUDITED) | ||||||||||
As of | As of | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS | ||||||||||
Cash and cash equivalents | $ | 1,114,370 | $ | 3,398,793 | ||||||
Accounts receivable, net | 19,983,583 | 24,622,727 | ||||||||
Notes receivable, net | 6,974,357 | 6,846,897 | ||||||||
Inventories, net | 46,008,080 | 45,098,268 | ||||||||
Prepaid expenses and other current assets | 2,974,177 | 4,099,027 | ||||||||
TOTAL CURRENT ASSETS | 77,054,567 | 84,065,712 | ||||||||
Property, plant and equipment, net | 10,350,887 | 10,082,168 | ||||||||
Intellectual property, net | 20,958,076 | 21,650,534 | ||||||||
Other Intangibles, net | 7,808,412 | 8,082,325 | ||||||||
Right of use asset - operating leases | 2,825,742 | 2,983,303 | ||||||||
Equity method investments | 21,624,643 | 23,059,705 | ||||||||
Other assets | 3,051,182 | 2,066,081 | ||||||||
TOTAL ASSETS | $ | 143,673,509 | $ | 151,989,828 | ||||||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | ||||||||||
CURRENT LIABILITIES | ||||||||||
Accounts payable | $ | 14,891,078 | $ | 13,312,180 | ||||||
Deferred revenue | 5,504,204 | 464,707 | ||||||||
Accrued expenses and other current liabilities | 6,004,829 | 8,804,456 | ||||||||
Current portion of working capital lines of credit, net | 43,597,213 | 44,900,779 | ||||||||
Current portion of long-term debt, net | 4,445,442 | 3,808,761 | ||||||||
TOTAL CURRENT LIABILITIES | 74,442,766 | 71,290,883 | ||||||||
Long-term debt, net, less current portion | 4,862,340 | 4,499,334 | ||||||||
Other non-current liabilities | 2,063,641 | 2,102,030 | ||||||||
TOTAL LIABILITIES | 81,368,747 | 77,892,247 | ||||||||
MEZZANINE EQUITY | ||||||||||
Preferred stock, at December 31, 2023 and June 30, 2023 | 5,518,624 | 5,274,148 | ||||||||
TOTAL MEZZANINE EQUITY | 5,518,624 | 5,274,148 | ||||||||
STOCKHOLDERS' EQUITY | ||||||||||
Common stock, 43,292,044 outstanding at December 31, 2023; 43,004,011 issued and 42,979,011 outstanding at June 30, 2023 | 43,317 | 43,004 | ||||||||
Treasury stock, at cost, 25,000 shares | (134,196) | (134,196) | ||||||||
Additional paid-in capital | 168,270,300 | 167,768,104 | ||||||||
Accumulated deficit | (104,595,765) | (91,932,808) | ||||||||
Accumulated other comprehensive loss | (6,832,156) | (6,987,791) | ||||||||
Noncontrolling interests | 34,638 | 67,120 | ||||||||
TOTAL STOCKHOLDERS' EQUITY | 56,786,138 | 68,823,433 | ||||||||
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | $ | 143,673,509 | $ | 151,989,828 | ||||||
S & W SEED COMPANY | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(UNAUDITED) | ||||||||||
Six Months Ended December 31, | ||||||||||
2023 | 2022 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net loss | $ | (12,450,963) | $ | (10,505,796) | ||||||
Adjustments to reconcile net loss from operating activities to net cash used in operating activities: | ||||||||||
Stock-based compensation | 695,147 | 762,006 | ||||||||
Bad debt expense | 472,411 | (125,209) | ||||||||
Inventory write-down | 787,085 | 685,200 | ||||||||
Depreciation and amortization | 2,145,042 | 2,590,338 | ||||||||
Gain on disposal of property, plant and equipment | (101,690) | (4,411) | ||||||||
Gain on disposal of intangible assets | — | (1,796,252) | ||||||||
Gain on sale of equity investment | — | (32,030) | ||||||||
Equity in loss of equity method investees, net of tax | 1,538,225 | 4,015 | ||||||||
Change in deferred tax provision | (712,063) | (259,747) | ||||||||
Change in foreign exchange contracts | (639,143) | 19,466 | ||||||||
Foreign currency transactions | 1,276,525 | (200,666) | ||||||||
Amortization of debt discount | 901,591 | 861,755 | ||||||||
Accretion of note receivable | (127,476) | — | ||||||||
Changes in: | ||||||||||
Accounts receivable | 4,326,500 | (3,968,108) | ||||||||
Inventories | (1,300,241) | 557,442 | ||||||||
Prepaid expenses and other current assets | 356,779 | 20,736 | ||||||||
Other non-current assets | 47,015 | (677,938) | ||||||||
Accounts payable | 1,381,305 | (385,529) | ||||||||
Deferred revenue | 5,039,497 | 5,578,365 | ||||||||
Accrued expenses and other current liabilities | (2,231,490) | (1,256,423) | ||||||||
Other non-current liabilities | 32,768 | (207,625) | ||||||||
Net cash provided by (used in) operating activities | 1,436,824 | (8,340,411) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Additions to property, plant and equipment | (1,077,055) | (154,997) | ||||||||
Proceeds from disposal of property, plant and equipment | 160,958 | 3,660 | ||||||||
Capital contributions to partnerships | (88,543) | (59,242) | ||||||||
Proceeds from partnership transaction | — | 2,000,000 | ||||||||
Net proceeds from sale of equity investment | — | 400,000 | ||||||||
Net cash provided by (used in) investing activities | (1,004,640) | 2,189,421 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Net proceeds from sale of common stock | (165,812) | — | ||||||||
Taxes paid related to net share settlements of stock-based compensation awards | (26,825) | (12,949) | ||||||||
Borrowings and repayments on lines of credit, net | (2,762,758) | 6,598,076 | ||||||||
Borrowings of long-term debt | 595,175 | 285,005 | ||||||||
Repayments of long-term debt | (152,214) | (1,063,661) | ||||||||
Debt issuance costs | (237,278) | (359,527) | ||||||||
Net cash provided by (used in) financing activities | (2,749,712) | 5,446,944 | ||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 33,105 | (24,290) | ||||||||
NET DECREASE IN CASH & CASH EQUIVALENTS | (2,284,423) | (728,336) | ||||||||
CASH AND CASH EQUIVALENTS, beginning of the period | 3,398,793 | 2,056,508 | ||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 1,114,370 | $ | 1,328,172 | ||||||
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SOURCE S&W Seed Company
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