UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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Item 8.01 Other Events.
S&W Seed Company (the “Company”) previously announced in 2023 that it was evaluating the possibility of a strategic transaction involving the Company's international operations, which are headquartered within S&W Seed Company Australia Pty Ltd (“S&W Australia”), a wholly-owned subsidiary of the Company. That process has not resulted in the consummation of a transaction, and on July 24, 2024, S&W Australia adopted a voluntary plan of administration based on its determination that S&W Australia is likely to become “insolvent” within the meaning of section 436A(1) of Australia’s Corporations Act 2001.
In Australia, voluntary administration is a process whereby an insolvent company is placed in the hands of one or more independent administrators whose role is to investigate the company’s affairs, to report to creditors and to recommend to creditors whether the company should enter into a deed of company arrangement, liquidation, or be returned to its board of directors. A voluntary administration involves an investigation of available options to provide a better return to creditors and, if possible, to save the business.
A number of factors combined to lead S&W Australia to conclude that the voluntary plan of administration was necessary and advisable, including the lack of viable strategic alternatives, Saudi Arabia’s recent discontinuation of import permits for alfalfa seed, and the increased risk that S&W Australia would be unable to meet its obligations under the Amended and Restated Finance Agreement with National Australia Bank Limited (“NAB”), effective November 17, 2023 (the “NAB Finance Agreement”).
S&W Australia’s entry into voluntary administration constitutes an event of default and automatic acceleration of S&W Australia’s obligations under the NAB Finance Agreement. However, such acceleration is stayed while S&W Australia is under voluntary administration. The NAB Finance Agreement is guaranteed by the Company, up to a maximum of AUD $15.0 million (USD $9.8 million as of June 30, 2024) (the “Parent Guarantee”). The Company’s obligations under the Parent Guarantee are not subject to a stay in connection with S&W Australia’s voluntary administration.
S&W Australia’s entry into voluntary administration also constitutes an event of default under the Company’s Amended and Restated Loan and Security Agreement with CIBC Bank USA (“CIBC”) dated December 26, 2019 (as amended to date, the “CIBC Loan Agreement”), as a result of a cross-default provision in the CIBC Loan Agreement that is triggered by the event of default under the NAB Finance Agreement. The Company is working towards a remedy for the event of default with CIBC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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S&W SEED COMPANY |
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Date: July 30, 2024 |
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/s/ Vanessa Baughman |
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Vanessa Baughman |
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Chief Financial Officer |
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