S&W Seed Company Price & Performance (SANW)

And such forward looking statements are made pursuant to the S&W Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements describe future expectations, plans, results or strategies and generally preceded by words such as may, future, planned or planned, will or should, expected, anticipate, draft eventually or projected, Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events or results to differ materially from those projected the forward looking statements including the S&W that actual results may differ materially from those projected in the forward looking S&W, a result of various factors and other risks identified in the company's 10 ks for the fiscal year ended 06/30/2024, and other filings subsequently made by the company with the Securities and Exchange Commission. To supplement S and W's financial results reported in accordance with U. S S&W. Generally Accepted Accounting Principles or GAAP, S and W will be discussing adjusted EBITDA and adjusted operating expenses on this call. These non GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measure and are not prepared under any comprehensive set of accounting rules or principles.

An audio recording and webcast replay for today's conference call will also be available online on the company's Investor Relations page. With that said, let me turn the call over to Mark Herman, Chief Executive Officer for S and W Seed Company. Mark, please proceed. Thank you, Robert, and good morning to all of you. I'm excited to be here today speaking with you all. To set the agenda for the call today, let me first touch on the position S and W S&W on our high value ad crop opportunities, where we can drive growth and profitability through leading crop innovation, namely in sorghum and Camelina and ultimately unlock value to shareholders. Will then look at long term opportunity for sorghum as well as where the market stands today. I then will provide a brief update on our joint venture with BBO. Vanessa will then provide a detailed review of the financials, and we will take a look at any questions that you may have at the end. I know somewhat new to S and W, let me just take a brief moment to remind everybody of the key activities that have taken place over the past few months S&W.

Or so that we believe will ultimately value for S and W and its shareholders S&W. First, we successfully completed the VA process in Australia, which occurred in late November twenty twenty four. Among other key conditions, the settlement agreement which we finalized shortly after our last conference call in November, allowed for the release from the intercompany obligations owed to S and W Australia and agreement with the National Australia Bank that released S and W from the $15,000,000 AUD guarantee. In S&W, among other conditions, we transferred ownership of certain intellectual property and inventory to the new entity. Ultimately, this agreement provided the resources we mutually believe needed to create going concerns for all entities. Following the completion of the VA process, we successfully which replaced the previous facility with CIBC Bank, In connection with the agreement, MFB, our largest shareholder, provided a letter of credit with a S&W amount equal to $13,000,000 to be used as collateral We believe the new facility and commitment could be viewed as a strong endorsement from both our largest shareholder and new strategic lending partner in the future of S and W and the opportunity it represents going forward. With these key activities as backdrop, we have operationally focused on aligning the cost structure of S and W S&W implementing best practices across the organization.

The end S&W has been improved gross margins, a reduced breakeven rate, as well as lower working capital through an overall improvement in inventory management. All of which has put us closer to profitability without having raised equity capital during this past year. As a reminder, there are currently approximately 2,100,000.0 shares of common stock outstanding and bringing the total diluted shares outstanding to approximately $2,200,000 S&W, this has not been an easy S&W. Threading the needle of the past year or so. And I want personally thank the entire team here at S and W for their exceptional work. With that as a backdrop, going forward, we are now exclusively focused on our core U. S.-based S&W, led by our high value sorghum trade portfolio with double team, as well as our biofuels partnership with Shell for Camelina. While we are so excited about the new S and W, it's really driven by where we believe the market for sorghum is headed over the next decade. But more importantly, what our position in this market is. As some of you are aware, sorghum historically has not benefited from significant research investment, broad acre crops such as corn, soybeans and cotton have received.

S and W is working to change all of that. In the four years since we first commercialized commercially introduced S&W Team, we have grown from no acres to approximately 10% to 12% market share of The U. S. S&W sorghum acres this year. Based on expectation expected adoption rates, we believe double team sorghum can capture 25% to 30% of The U. S. Sorghum market share over the next eight years which would generate about $70,000,000 to $78,000,000 in traded sorghum sales. This translates into a bigger of about 16% to 18% through 02/1933. At this scale, we estimate that we would generate gross margins of approximately 76% to 81% on the traded products. Key to this growth is to build on our S&W of our initial double T product with currently have multiple new products set to be launched over the next second generation Double Team or DT2 grain sorghum and PAF or S&W acid free forage sorghum in fiscal twenty twenty five. And DT2 forage sorghum in fiscal twenty twenty seven in The U. S S&W. The commercial launch of DT2 S&W '28 in The U. S. S and W will be extending our trade portfolio to targeted countries through our licensing strategy and agreements to leading independent C companies as we receive regulatory labels and registrations.

The commercial launch of broad spectrum S&W tolerant sorghum in fiscal two thousand and thirty one in The U. S. And certain other countries in fiscal two thousand and thirty three and finally, the commercial launch of insect tolerant sorghum in S&W two thousand and thirty one in The U. S. And certain other countries in fiscal two thousand and thirty three. It's important to note that the pathway to these adoption rates is validated by adoption rates of similar technologies and other crops where leadership positions have been established in a multi strategic go to market model has been enacted. This established roadmap we are following utilizes a combination of a robust direct technical sales team, private label licensing partners and distribution partners with some of the largest AGCAM retail distributors in The U. S S&W. Along with an asset light model in Patam through collaborations with leading seed brands via licensing. In our view, there is not another company in the world that boasts the sorghum capabilities that we have. Providing a very strong first to market position with an impressive pipeline for [indiscernible] to continue to build on our market strength. So that's the long term look as we see sorghum.

Consistent 16% to 18% decade long CAGRs, I. 70% plus gross margins, driven by strong R and D pipeline and an established commercial model. Near Turb Sorghum we are focused on executing against our outlook. That we have established for fiscal twenty twenty five which includes global sorghum sales of about $24,000,000 to S&W of which $12,000,000 to $14,500,000 of that is Traded Technologies. Looking at the numbers through the first six months, certainly is an indicative of our outlook that we have for the year. Last year, we saw a lot of early sales in during the December ending quarter. So which was somewhat abnormal to the normal purchasing patterns, which tend to occur in the March through June timeframe. Therefore, we certainly expect to see the normal significant ramp here to the coming S&W. Our confidence in the future of Double Team is being driven by the very high grower satisfaction results we're an extremely high percentage of growers reporting a positive experience. Overall, the majority of growers who have tried Double S&W seek to increase acres. Simply put, farmers that have tried Double Team love it. Now I would like to be remiss if I don't exhibit some level of caution in the near term from a few of the macro factors that impact farmers' decisions.

Namely the potential impact from S&W. As well as the rise in alternative crop prices as of recent. As most of you are aware, as a country, The U. S. Is a net exporter of sorghum, with the primary importer being China. Further alternative crop prices relative to sorghum could impact sorghum acres planted this coming season. As we have discussed in our private label business model is moving from selling in germplasm royalty and trait royalty S&W selling with production S&W and moving the germplasm and trait royalties to a grower point of sale invoice. This effectively keeps inventory management at the S&W, while aligning the royalty payments with timing of sales to farmers. This model will enable our strategy to realize significant sales growth in market penetration and align revenue recognition with timing of grower sales. The model transition will be completed in 2027 S&W As you know with the USC business, our third and fourth quarters, which run from January through June, are our key quarters and we are in full court press mode to ensure that our sales and logistics teams are in sync to get product to customers in a timely manner. In fact, we just completed a multi day strategic sales meeting with high levels of enthusiasm from the organization.

Clearly, the next few months will be busy for our teams and I'm confident that we are well positioned as we can be to execute on the plans that we have put in place. Let's transition for a moment to BBO. While there's not a lot of new information to report, everything related to our biofuels joint venture with Shell remains on track. As a reminder, we own a 34% interest in the JV. Quick reminder of this past fall BVO introduced Camelina S&W to farmers, which carries resistance to bupocinate. An effective broad spectrum over the top weed control system. There are currently promotions ongoing with them directly working with farmers into the spring months. I hope to be able to share more with you in the upcoming call. Before I turn it to Vanessa, let me just briefly comment on the announcement we made in mid January regarding the commencement by the Board to explore and evaluate various strategic alternatives that may be available to S and W in an effort to enhance shareholder value. There is not a lot I can share with you besides what to Chairman, Alan Willets, mentioned in the press release. Which is that we believe we have taken decisive actions to strengthen the company much of which I have discussed today.

And that the Board supports all initiatives that optimize shareholder value and will consider the full range of potential strategic alternatives to ensure S and W Seed is best positioned for future success. As always, there can be no assurance will result in the company pursuing any transactions or any other strategic outcome nor as to the form or timing of any of the foregoing. The Board has not set a timetable for completion of this process and we do not intend to disclose further developments unless and until it determines that further disclosure is appropriate or necessary. Let me turn the call over to Vanessa for a full detailed review of the financials, including our outlook and guidance for the upcoming year. I will then provide some brief closing comments and turn it over for any questions you may have. Vanessa S&W? Thanks, Mark S&W. Good morning to everyone on the call today. Let me just remind everyone that the completion of the divestiture of The U. S. Australian subsidiary has resulted in moving all Australian related operations [indiscernible] operations on a look back basis for FY 2024. Therefore, when you look at the period period comparisons, the Australian domestic and the Australian international businesses have been moved to discontinued operations for both of the financial years.

With that, let's dive right in. On the revenue line for Q2 only, we reported revenue of $5,100,000 compared to $8,300,000 in Q2 of last year. Again, the 8,300,000.0 from last year excludes Australia S&W. Couple of keynotes on revenue. Last year's Q2 had S&W dollars of ex U. S. International revenue which was not repeated this quarter. No sales ex U. S. International occurred in Q2 of this year as we continue to evaluate our crop strategy moving forward for the remainder of fiscal year twenty twenty five.

The remaining delta is primarily on doubletane. Which had Q2 revenue this year of $1,900,000 versus $4,000,000 in Q2 of last year. The difference here is the timing of private label shipping. Overall, America S&W revenue including Double Team and Conventional Sorghum, was $3,100,000 Americas forage revenue was $1,700,000 and there was a small amount of [indiscernible] pertaining to our VBO partnership. As I mentioned last quarter, Q1 and Q2 are seasonally our lightest quarters. With Q3 and Q4, which is our March and June ending quarters being the bulk of our volumes where we expect about 65% to 70% of our annualized sales to occur. Q3 and Q4 will also be the quarters in which the greatest leverage in our business occurs to the bottom line as many of the fixed costs are absorbed over greater revenue dollars. In fact, our guidance suggests that we will have positive adjusted EBITDA of $1,000,000 to S&W in the second half of fiscal twenty twenty five.

For fiscal twenty twenty five, which ends on 06/30/2025, Our guidance remains unchanged from last quarter. With total revenue to be between 34,500,000.0 and $38,000,000 for the ongoing business. This number does include the $4,100,000 of international sales recognized in Q1. Let's break the guidance for the ongoing business down a bit more. We expect total global sorghum revenue to be $24,000,000 to 27,500,000.0 of which DT will be between $12,000,000 and 14,500,000.0 and the pilot for S&W Free will contribute 200,000 in revenue. The remainder will be our conventional traits in Sorto. This includes sorghum sales that we recorded in Q1 and S&W to record in the [indiscernible] in Q3 and Q4. [indiscernible] are expected are approximately $3,200,000 of which the full $3,200,000 was recognized in Q1. And Americas Forge will be between $7,000,000 and $8,000,000 while other sales will be approximately 300,000 Now turning to margins.

Gross profit margin Q2 was 37.1% compared to 42.8% in last year's Q2. Again, last year's gross margin excludes Australian operations. The change here is really due to the lower DT revenue in Q2 of this year versus Q2 of last year. We are expecting total gross margins for fiscal twenty twenty five to be between 3336% S&W. Now let's transition to operating expenses. Q2 fiscal twenty twenty five operating expenses inclusive of depreciation and amortization for the ongoing business in total were $6,200,000 compared to $5,700,000 last year.

The Q2 also includes all of the non recurring transactional costs pertaining to voluntary administration of approximately 600,000. Excluding depreciation and amortization, as well as the non recurring transactions costs, adjusted operating expenses during Q2 were $4,900,000 which is flat with last year at $4,900,000 in Q2.

Looking at it on an annualized basis, our expectation is for total operating expenses exclusive of depreciation and amortization stock based comp and any one time charges related to VA to be about $16,500,000 including depreciation and amortization and stock based Spacecop that number will be about 21,100,000.0 have made a number of significant reductions in operating expenses through last fiscal year and leading up to Q1 of this year. And believe we have reached a very reasonable go forward operating As I mentioned last quarter, we carry about $3,000,000 of costs related to being a publicly traded company. But beyond that, we have made significant efforts to align our go forward business plan with our expenses to try and drive the business towards profitability. Now to EBITDA. Adjusted EBITDA for Q2 was a negative 2,900,000.0 compared to adjusted EBITDA of negative $1,100,000 in last year's Q2. For the first half of fiscal twenty twenty five, adjusted EBITDA is a negative 6,000,000 S&W on the various inputs I provided, we are expecting adjusted EBITDA for the year to be between a negative $5,000,000 on the low end to a negative $3,000,000 on the high end. Compared to negative $5,600,000 with Australia's businesses removed and fiscal year twenty twenty four.

Put differently, with the first S&W already at negative $6,000,000 S&W are expecting the high end of our range for the rest of the year to be a positive $3,000,000 for the back half of the year. And for the low end, to be about $1,000,000 in positive adjusted EBITDA breakeven for the rest of fiscal twenty twenty five in aggregate. As Mark mentioned, since our last call, we successfully secured a $25,000,000 working capital facility with Mount Ridge. Which replaced the previous facility we had with CIBC S&W. I want to take a moment to thank CIBC for their support at S and W. Over the past four years. And we're excited to be working with the team at Mountain Ridge moving forward.

Their commitment coupled with the $13,000,000 letter of credit provided by MSP our tremendous endorsements to the work done over the last year to reposition S and W going forward. Again, I'm happy to follow-up with any of the details we went through if you should have additional questions. With that, let me turn the call back over to Mark. Thank you, Vanessa S&W.

First, let me just thank the entire team at S and W for their hard work over the past year to get S and W to a place where we can focus on delivering value to farmers and shareholders alike.

Going forward, our business is going to be driven by high value, high margins sorghum trait technology in well established markets in The Americas. Our commercial commercialization strategy is robust and validated by decades of success by similar products in adjacent crops. Our product development pipeline is deep with multiple new products set to launch each year in various geographies over the next decade. Importantly, the value we bring to farmers has been validated. The Farmgate value of our Double Team Grain product is between $36 to $72 per acre, Our DT forage products provide between $30 to $67 per acre our S&W acid free trait adds an additional $30 to $55 per acre. When you S&W them it allows farmers to take full advantage of each independent trait value These are significant benefits of benefits to farmers as they protect against hundreds of millions of dollars of estimated farm production loss each year. And of course, we have large equity stake in Shell Bilefuels JV which has a large opportunity ahead of ourselves as we progress S&W our second year of the JV. With the business dramatically more streamlined from an OpEx perspective and efficiencies in place to drive incremental gross margin improvements in both our traded products as well as our other forage S&W.

I believe we are in a position to return S and W to profitability. I want to sincerely thank all the shareholders for their continued support I look forward to taking your questions. Operator? We will now begin the question First question comes from Ben Kleeve S&W Street Capital Markets S&W. Please go ahead. All right. Thanks for taking my questions. Got a handful from here. First S&W couple regarding the current year results. So first question what you see as the level of inventory for that product that's already within the supply chain? Is that are inventory levels still such that there's real visibility of a pretty steep commercial ramp or do you have any concern about elevated levels here at this point in the year? Hey, good morning, Ben. Appreciate the question. As we look at our business, over 50% of our business comes from SORGOM Partners brand, which S and W completely operates in The U. S, S&W? So with Sorghum Partners brand, all unsold inventory at the end of the spring. Gets picked up and returned to our warehouse. So in reality, we know exactly that we start annually from zero, S&W? So there's no no pre existing supply in the channel.

And we're moving forward with that business and expect to see the growth that we had built into the plan. With the license business, they do the same activity with their own seed brands. In the fact that they deliver and then they pull back into company warehouses and have an accurate count at the end of the year. So our previous model was shipping fully loaded trait in germplasm royalty as well as the cost of goods shipping to the licensed companies. And as I talked about in this call, that will be moving to more of a system of where the S&W seat company takes inventory at a cost of goods just like every seat company including ourselves does and manages their internal inventory and then we'll pay royalties based on grower actual sales each year reported by our year end, right? So it will move to it. So there's a bit of gap and information as to timing when each of the licensees pull in inventory. And last year, we did see an incremental amount of ordering in the fourth quarter. Pulling inventory into their businesses both to fill spring needs as well as to carry some inventory into the next year.

I think potentially it along with some of just the indecision on farms, some of the things we're seeing moving There'd be a question mark if our process of going through the VA last year slowed some people down as far as bringing in their inventory in Q1 and Q2 versus bringing it in now in Q3 and Q4, right? So we're working to analyze that and be on top of it as we work through with licensees right now. For what their production plans, one, what their demand their sales, what inventory they need to ensure they can complete demand with their customers for this year for shipping as well as then working up their production plan for next year's S&W sales and we'll have that effort over the next couple of weeks. So I think one of the pieces that delayed the one in two was our process of going through the Australian VA. And so of the unknowns that that put into the marketplace as well as we are in kind of a unique with farmer decision making on cropping plan [indiscernible] volatility on all crops between corn, soybean and cotton as far as the alternative S&W as well as sorghum.

But I do believe we'll see that settling out farmers to be finalizing their decision as we move forward. I don't anticipate that it's a significant problematic S&W, but I do believe the model we're going to is a model that will help us have seed companies planning to carry the appropriate level of inventories on a year round S&W. To really run their seed business efficiently versus trying to avoid bringing material in because of a fully loaded S&W, which included Germplasm royalty and trait royalty before they had the sales activity taking place with farmers S&W. Ben, does that kind of address it? I know still leaves a huge unknown, but I don't see a signal that says that we're off track versus the guidance that Vanessa and I have rolled out to the organization. [indiscernible] I appreciate that. There's a lot of moving [indiscernible] those are all very helpful context. And you got to my you alluded to my next question, which I don't know if this is S&W better directed to you or Vanessa, but regarding the current year guidance S&W and the sorghum revenue that you lay out, I'm [indiscernible] given the rising price of alternative commodities, especially corn, the level of embedded acreage you guys are expecting within The U. S S&W.

Market? I see the level of acreage within The U. S. Market that you're expecting embedded within your S&W. Do you guys anticipate kind of a flat level of S&W acreage year over year in the country? Or are you expecting some kind of decline given elevated pricing here for alternative crops?

Yes, it's a great question. And I'll take a swing at it. And then Vanessa, S&W, if you've got others to add. But if you look at the acre trend, sorghum had been on a bit of a growth trend if you look over [indiscernible] two years prior to last year, right? So it had grown from a $6,000,000 to about a $7,200,000 $7,300,000 acre crop for the planting season of 2023, which also had the contribution of very late planning, the weather through a lot of the sorghum market was wet which prevented planting of cotton and alternative S&W. Farmers came back with a sorghum crop, which helped also move acreage up. Last year was the opposite impact It was a perfect S&W. Commodity prices were strong in the other commodity S&W, and we saw acres move $6,300,000 to 6,500,000 sorghum acres. We did not build our our plan based on depending on growth of sorghum acres. But as we look at the market, it does have a pretty significant [indiscernible] based on what Baker planning does happen, right? So we started out very strong, the economics of planting sorghum versus alternative crops was very positive. It's leveled off a little bit with the increase in the corn price, which if you look at corn price seasonally, the corn market is very good at raising price working to get the acres planted.

Which I anticipate is what's taking place this year as well. But we really didn't build our plan based on a return to a seven plus million acre base Okay. Good to hear the conservatism embedded within that then. Vanessa, S&W question for you on the debt levels and update on the new credit facility. So first of all, I think I see [indiscernible] Australian business exited and then ripping working capital off the balance S&W. You guys are sitting at a level of debt that's lower than it's been since like 2016. So congratulations on some real progress on that front. And my question to you is twofold here. The degree of visibility you have at further reductions in working capital here over the second half of this year or maybe over the next twelve months? And then also the level of availability you have today within your new credit S&W?

Yes, of course. Thank you, Ben, for the question. So for the remainder of fiscal twenty twenty five, we and I'll mention this in comparison to last year. We will end or [indiscernible] Position than last year. And it goes to exactly what you just mentioned. So continued focus on OpEx and meeting our targets on S&W. As well as the working capital component. While we were able to achieve that through Q2 in terms of lower debt versus last year, one of the things from a cash flow perspective that we've had to cover for, are those onetime transactional costs that you can see in our adjusted EBITDA reconciliation within the financials of approximately $600,000 related to VA. So unfortunately, that was a cash outlay that we had not planned, right, at the time that we were working through the particulars with Mount Ridge. [indiscernible] for the remainder of fiscal twenty twenty five, we're in a position from a capacity perspective to be well supported with the Mountain Ridge facility as it is today. And as a reminder, it is a asset based type of agreement. So as sales start to position themselves over Q3 and Q4, That gives us adequate credit financing for the remainder of 2025 that again is expected year over year that we will be in a lower debt position and overcoming those onetime S&W.

But I will say that that added some complexity to at least Q1 and Q2 S&W overcoming S&W hundred thousand dollars and those onetime non reoccurring costs related to VA?

Okay. Hey Vanessa, could I just add So as Vanessa and I came in, we did feel S and W was carrying far too much inventory for S&W. So as we finish this year, we should reduce carryout inventories by about 40% to 50% versus what we carried out last year, which has a huge positive as far as cash tied up in inventory, but also S&W seed inventory you lose approximately 10% due to quality, just aging. So it's a significant reduction in it. And I say this because I really don't even believe it's totally focused on just reducing working capital, but it puts the C company in a very quick to move. When you've got a strong pipeline of new product advancements that we're going to have over the next ten years. The ability to keep inventories tight to have the ability to ramp up the newest technology, the newest germ plasma as quickly as S&W. Continues to drive the leadership position. So it will have very positive impacts on both the working capital as well as profitability but also it will put us in a place to continue to support a very aggressive ramp up of of sales success as well.

Okay, good.

Very good. One more for me and then I'll get back in queue. And it's just kind of a big pick S&W. In the context of the strategic review you laid out, all of these kind of long term expectations. And I'm curious the degree to which kind of the scale of S and W constrains the the ramp in sorghum either from an R and D perspective or a commercial S&W. And any potential S&W that could come from a larger operation having this kind of S&W embedded within it? I mean, is there a material S&W concern constraint from a financial or human capital perspective at S and W on on the sorghum outlook that you think could be kind of unlocked if this was elsewhere? S&W, that's a great point and input. Ben. So there's always a strategic opportunity for entities to be able to look internally at the resources they're already spending S&W and how does it either trait pipeline or product release pipeline that we've got really in sight for the next ten years. So I do think as we go through the process S&W be significant opportunities for different organizations to assess how the resources and assets inside of S and W really contribute [indiscernible] and escalate their current paths, right, either S and Ws ability to reach and accelerate or their ability to for efficiencies S&W invest [indiscernible] significant value identified Very good.

All right. Well, I appreciate you taking my question. Congratulations. It's been a busy and very productive last few months. Good luck, Saket S&W. Half of this year and I'll get back in queue.

Thank you, Ben.

The next question comes from Kurt Karamanidis with S&W M. Henning Inc. Please go ahead.

Hi, thanks for taking my question. Questions on VBO, are there constraints in selling that position as you do this review from Shell or any kind of color that you could give us on how that would be monetized potentially? And then S&W next year kind of a ramp year for the Camelina business? I'll cover the last one first.

So as BBO keeps expanding their product lines, particularly focused on their trait position, which is very unique in the marketplace for Camelina. For easy control of weeds at a very economical position. I do believe their continued ramp up of success positioning with farmers S&W move forward. As far as the other one, I probably have to say I can't really speak to the specifics other than what was positioned by the Chairman of the Board, Alan Willets. Alan Willets and Mark Wong are also on the Board of of DBO in As we look at it, we're looking at all opportunities that bring value. To S and W shareholders as we move forward.

Okay, fair enough.

And then did you I know you did the reverse split, but have you considered going to the OTC to save a couple? I know that wouldn't be free, but a couple of million bucks a year? What's kind of the thought process there?

Yes. And you bring up a good point between what Vanessa positioned that we've got about $3,000,000 tied with expenses for being publicly traded. And today, we're a company that has sales in that $35,000,000 range position, right? It just speaks to there's potential efficiency processes. I would just leave that as part of the whole discussion around looking at strategic options that bring value to S and W shareholders?

Great. That makes sense. Appreciate it.

Operator, we've got a while we wait to see if there's anyone else in the queue, I have S&W a couple of questions here from the online portal. To Mark and Vanessa. I'll try to bucketize them briefly here. Talk about maybe any competitive products out there specifically within the herbicide resistant sorghum?

Yes. So there's two other programs that are in the marketplace S&W S&W and W has had a significant lead over each of those positions both in volume and market penetration as well as farmer feedback as far as weed control cropping options and others. So as we look at it, we're in a very, very strong position. And then with the pipeline as it comes out I do believe we can work to keep market leadership position, not just on ET and Grass Control but also across a broad spectrum that brings value value to farmers. Everything is predicated on does your product truly turn into a positive economic investment for farmers? And we feel very good about the portfolio that we've got And our approach has really been looking pretty directly at the economic impact But as you look at peace of mind and other intrinsic values, I think part of the acceleration of our trade portfolio is going to be driven and has been driven the peace of mind of knowing you're going to be able to rescue your crop in the event of heavy pressure [indiscernible] If you know much about grazing cattle on [indiscernible] drawbacks.

The big drawback is prussic acid and the concern for animal health. With S&W acid free completely resolves and puts farmer in a great position.

Be able to utilize [indiscernible] the great benefits of using a forward shore room or even a post harvest grain sorghum to provide feed for their for their livestock.

So I believe we've got a strong position as far as the pipeline and where we're currently at for success. There's a significant advantage. To our product position.

Okay. Maybe just one more question but but more broadly with some of the tariffs, some of the other subsidies, basically just overall change in S&W. What sort of impact to this have you taken into account with the that you provided here?

S&W a great question, Robert. And I called it out a bit and and internally we've had the discussions around the tariffs. China is the number one importer of sorghum globally, right? And where The U. S. Is the number one exporter. So there's a pretty tight relationship between China and The U. S. As far as sorghum S&W. And then there's the concern around tariffs where they could go and what could be the response from China two of those, right? So unfortunately, all of it is speculation and S&W. Clearly, if they have a block on importing U. S S&W. Products or a significant tariff, it could significantly hamper sorghum pricing in the sorghum market. But we have not built overly aggressively conservatism based on an assumption that that that will happen, right? It's something we'll watch for. We'll know more as we go forward, and it's a sensitivity, but it's not built into the numbers today.

Okay, fantastic S&W. Mark Vinesse, S&W showing no further questions here. So Mark, I guess I'll turn it over to you for closing remarks S&W.

I really want to thank everybody for joining And Vanessa and I look forward to hopefully speaking with you all again shortly. Thank you.

The conference has now concluded. You for attending today's presentation.