S&W Seed Co. is an agricultural company, which engages in the production and trade of stevia and alfalfa seeds. It product portfolio include hybrid sorghum, sunflower seed,and corn. The company was founded by Grover T. Wickersham in July 1980 and is headquartered in Hanford, CA.
Our earnings can be negatively impacted by declining demand brought on by varying factors, many of which are out of our control.
Our earnings may also be sensitive to fluctuations in market prices for seed.
Adverse weather conditions, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.
Because our seed business is highly seasonal, our revenue, cash flows from operations and operating results may fluctuate on a seasonal and quarterly basis.
We have had a material concentration of revenue from a small group of customers that fluctuates, and the loss of any of these customers in any quarter could have a material adverse effect on our revenue.
Because we depend on a core group of significant customers, our sales, cash flows from operations and results of operations may be negatively affected if our key customers reduce the amount of products they purchase from us.
Our ability to contract for sufficient acreage presents challenges.
A lack of availability of water in any of our production areas could impact our business.
We face intense competition, and our inability to compete effectively for any reason could adversely affect our business.
Our third-party distributors may not effectively distribute our products.
We extend credit to our largest international customer and to certain of our other international customers, which exposes us to the difficulties of collecting our receivables in foreign jurisdictions if those customers fail to pay us.
The future demand for our non-dormant alfalfa seed varieties in Saudi Arabia is uncertain.
If we fail to introduce and commercialize new seed products, we may not be able to maintain market share, and our future sales may be harmed.
The presence of GMO alfalfa in Australia or California could impact our sales.
The stevia market may not develop as we anticipate, and therefore our continued research and development activities with respect to stevia may never become profitable to us.
We may not be able to manage expansion of our operations effectively.
We may be unable to successfully integrate the businesses we have recently acquired and may acquire in the future with our current management and structure.
The diversion of management's attention and costs associated with acquisitions may have a negative impact on our business.
S&W Australia's alfalfa seed grower pool is dependent on a limited number of milling facilities to process its seed, with particular dependence on a dominant operator whose commercial interests may be adverse to S&W Australia.
S&W Australia is thinly capitalized and may become dependent upon us for financing.
S&W Australia’s reliance upon an estimated purchase price to growers could result in changes in estimates in our consolidated financial statements.
We may need to raise additional capital in the future.
Changes in government policies and laws could adversely affect international sales and therefore our financial results.
Failure to comply with the United States Foreign Corrupt Practices Act or similar laws could subject us to penalties and other adverse consequences.
Environmental regulation affecting our alfalfa seed, sorghum, sunflower or stevia products could negatively impact our business.
Insurance covering defective seed claims may become unavailable or be inadequate.
We may be exposed to product quality claims, which may cause us to incur substantial legal expenses and, if determined adversely against us, may cause us to pay significant damage awards.
If we are unable to protect our intellectual property rights, our business and prospects may be harmed.
Raising additional capital may cause dilution to our stockholders or restrict our operations.
The value of our common stock can be volatile.
Our quarter-to-quarter performance may vary substantially, and this variance, as well as general market conditions, may cause the price of our securities to fluctuate greatly and potentially expose us to litigation.
Our actual operating results may differ significantly from our guidance.
We do not anticipate declaring any cash dividends on our common stock.
Anti-takeover provisions and our right to issue preferred stock could make a third-party acquisition of us difficult.
You should read the following discussion of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in Part II, Item 8, “Financial Statements” of this Annual Report on Form 10-K. In addition to our historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements as referred to on page 2 of this Annual Report on Form 10-K. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Part I, Item 1A, “Risk Factors.”