Risk Factors - SANW

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$SANW Risk Factor changes from 00/09/27/23/2023 to 00/11/01/24/2024

Item 1A.

“Risk Factors” of this Annual Report on Form 10-K, or the Annual Report, and that are otherwise described or updated from time to time in our filings with the Securities and Exchange Commission. You are urged to carefully review the disclosures made concerning risks and uncertainties that may affect our business or operating results, which include, among others, those described above. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Many factors discussed in this Annual Report on Form 10-K, some of which are beyond our control, will be important in determining our future performance. Consequently, these statements are inherently uncertain and actual results may differ materially from those that might be anticipated from the forward-looking statements.

In light of these and other uncertainties, you should not regard the inclusion of a forward-looking statement in this Annual Report on Form 10-K as a representation by us that our plans and objectives will be achieved, and you should not place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Furthermore, such forward-looking statements represent our views as of, and speak only as of, the date of this Annual Report on Form 10-K, and such statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. We undertake no obligation to publicly update any forward-looking statements, or to update the reasons why actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

When used in this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “the Company,” “S&W” and “S&W Seed” refer to S&W Seed Company and its subsidiaries or, as the context may require, S&W Seed Company only.

Our fiscal year ends on June 30, and accordingly, the terms “fiscal 2025,” “fiscal 2024” and “fiscal 2023” in this Annual Report on Form 10-K refer to the respective fiscal year ended June 30, 2025, 2024 and 2023, respectively, with corresponding meanings to any fiscal year reference beyond such dates. Our fiscal year ends on June 30, and accordingly, the terms "fiscal 2024, “fiscal 2023,” and “fiscal 2022” in this Annual Report on Form 10-K refer to the respective fiscal year ended June 30, 2024, 2023, and 2022, respectively, with corresponding meanings to any fiscal year reference beyond such dates. Trademarks, service marks and trade names of other companies appearing in this report are the property of their respective holders. 2 PART I Item 1. Business Overview We are a global multi-crop, middle-market agricultural company that is principally engaged in breeding, growing, processing and selling agricultural seeds. Business Overview We are a global multi-crop, middle-market agricultural company. In fiscal 2024, we operated seed cleaning and processing facilities located in Texas, New South Wales, and South Australia. We operate seed cleaning and processing facilities, which are located in Texas, New South Wales, and South Australia. Our seed products are primarily grown under contract by farmers. Our current focus is on growing sales of our proprietary and traited products, specifically through the expansion of Double TeamTM for forage and grain sorghum products and new trait introductions, including the second generation of Double Team and Prussic Acid FreeTM, or PF, improving profit margins through pricing and operational efficiencies, and developing the camelina market via a partnership formed in fiscal 2023. Our seed platform develops and supplies high quality trait and germplasm designed to produce higher yields for farmers worldwide. Our seed platform develops and supplies high quality germplasm designed to produce higher yields for farmers worldwide. In fiscal 2024, we sold over 650 seed products in more than 30 countries. We maintain an active product pipeline and expect to introduce over 10 new sorghum and alfalfa products during fiscal 2025 in North America. We maintain an active product pipeline and expect to introduce more than 20 new products during the fiscal year 2024. In accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification 280, Segment Reporting, for fiscal 2024, we determined that we have three reportable operating segments: Americas, International and AUSDOM.

Refer to Note 17 contained in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K, for more information on our reportable segments. Ongoing Voluntary Administration Process Involving S&W Australia We previously announced in 2023 that we were evaluating the possibility of a strategic transaction involving our international operations, which is headquartered within S&W Seed Company Australia Pty Ltd, or S&W Australia, our wholly-owned subsidiary. 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 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 for the entity, 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 loan obligations. As a result of the voluntary administration process, we currently do not control S&W Australia, and on October 11, 2024, creditors of S&W Australia approved a proposed Deed of Company Arrangement, pursuant to which, among other things, the outstanding shares of S&W Australia would be transferred to a third party. We expect that S&W Australia will no longer be our subsidiary, or owned or controlled by us in any manner, at the conclusion of the voluntary administration process and therefore all of the related business conducted through S&W Australia will cease to be included within the scope of our business. As a result, if, as expected, we do not regain control of S&W Australia at the conclusion of the voluntary administration process, we will no longer include S&W Australia in our consolidated financials. S&W Australia had $43.8 million in total assets, $46.8 million and $6. 4 million in total liabilities and ($2.6) million in stockholders' equity as of June 30, 2024. S&W Australia's revenue and net loss for the year ended June 30, 2024 were $26.4 million and ($10.8 million and $6. 0) million, respectively, which is included in our Consolidated Financial Statements as of and for the year ended June 30, 2024. The discussions and descriptions throughout the remainder of this Item 1 reflect our expectation that S&W Australia will no longer be our subsidiary, or owned or controlled by us in any manner, at the conclusion of the voluntary administration process. We expect our operations to continue to grow in the future, both as we expand our historical alfalfa seed business both domestically and internationally through internal growth and synergistic acquisitions and increase our growers’ production. 3 Our Strategy The global agriculture market is experiencing rapid change driven by population growth, increasing consumer demand and emerging markets, environmental challenges, limited availability of arable land and diverse regulatory requirements. Our Strategy The global agriculture market is experiencing rapid change driven by population growth, increasing consumer demand and emerging markets, environmental challenges, limited availability of arable land and diverse regulatory requirements. As a result, farmers and other industry participants are facing continuous pressure to cost-effectively increase productivity and output. These and certain other factors have led to strategic realignments and significant consolidation in the seed industry, leaving a small number of large players. We believe this environment presents an opportunity to build a global agricultural company focused on crop and market opportunities that large seed companies may overlook, underserve or ineffectively address. We believe our core strengths listed below position us to capitalize on this market opportunity: •Strong Germplasm Asset Base and Development Capabilities. We believe we have the largest and most diversified sorghum and alfalfa germplasm pool in the world. Our germplasm pool offers traits sought by farmers who grow forage hay, forage sorghum and grain sorghum, including high yield, drought tolerance and disease tolerance. We continue to invest in research and development programs, with an emphasis on driving trait improvement across all of our crop categories. We continue to invest in research and development programs in the United States, Australia and South America with an emphasis on driving trait improvement across all of our crop categories. •Cost-Efficient Supply Chain. We produce seed in the Western United States and certain other locations under contract with select third-party growers, many of which are longstanding. We produce seed in the Western United States, Canada, Australia, South Africa and Argentina under contract with select third-party growers. Our production capabilities allow us to produce seed close to the customer to ensure the seed product is developed specifically for the conditions and requirements of that customer’s region and produced at low cost. Our global, but localized, production capabilities allow us to produce seed close to the customer to ensure the seed product is developed specifically for the conditions and requirements of that customer’s region and produced at low cost. We condition and package seed primarily in our own facilities located in Texas. We condition and package seed primarily in our own facilities located in Texas and Australia. We believe that direct ownership of our production facility assets gives us more flexibility to react to demand changes unique to each geography, greater control over product quality and a lower cost structure. •Distribution Capabilities and Relationships. •Global Distribution Capabilities and Relationships. We believe that our dealer and distributor network is unique among middle-market seed companies, provides a platform to support sales growth across crop categories. In the United States, we believe that our 3 dealer and distributor network, unique among middle-market seed companies, provides a platform to support sales growth across crop categories. •Deep Industry Expertise. We believe that our management team has deep industry experience and a demonstrated record of success that is unmatched for a seed industry company of our size. Our leadership team includes both proven industry executives recruited to our company and top talent acquired through our various acquisitions. Mark Herrmann, our Chief Executive Officer, has over 35 years of experience in the agricultural seed industry, most recently serving as CEO of AgReliant Genetics, LLC, the third largest North American seed corn company and leader in soybeans and other supporting crops, from January 2016 to July 2020. Mark Herrmann, appointed as CEO effective July 1, 2023, has over 35 years of experience in the agricultural seed industry, most recently serving as CEO of AgReliant Genetics, LLC, the third largest North American seed corn company and leader in soybeans and other supporting crops, from January 2016 to July 2020. Our goal is to be a leading multi-crop, middle-market agricultural company delivering value to our customers and strong financial returns to our shareholders. To reach our goal, we have prioritized the following strategic initiatives: •Focus on Key Products that Address Unmet Market Needs. We expect to introduce over 10 new sorghum and alfalfa products during fiscal 2025 in North America. We also plan to continue development activities aimed at generating high-value improved traits in our crops and to continue commercialization of seed products carrying those traits. We also plan to continue development activities aimed at generating high-value improved traits in our crops and to begin commercialization of seed products carrying those traits. We completed a Spring 2022 commercial launch of sorghum hybrids incorporating our proprietary, patent-pending herbicide tolerant trait as part of our Double Team collaboration with ADAMA. With the persistence and concern of drought conditions, we expect our Double Team sorghum to continue gaining market share in the coming years as it has the prior two years. With the persistence and concern of drought conditions, we expect our Double Team sorghum to continue gaining market share in the coming years. In fiscal 2025, we expect to commercialize additional Double Team hybrids as well as launch the second generation of Double Team forage and grain sorghum. We are also developing and testing new sorghum products absent of prussic acid, a known toxin which can negatively impact animal health when sorghum plants are grazed. We expect our first PF hybrid will be commercialized in fiscal 2025. •Develop Licensing Strategy Business Model to Enhance Customer Experience. In fiscal 2025, we plan to launch a new business model for many of our private label customers focused on licensing our product for them to sell. We believe that by switching to this strategy, we will not only be more aligned with our competitors, but also provide our customers with more flexibility and control over their costs. •Exploit Production Capability for Best-In Class Cost Structure. •Exploit Production Capability for Best-In Class Cost Structure. Our streamlined supply chain provides us with flexibility in sourcing product to meet customer needs. Our streamlined international supply chain provides us with flexibility in sourcing product to meet customer needs. We are focused on exploiting this ability to shift 4 production to low-cost areas to both support our competitive position and improve our profit margins by increasing our efficiency. We are focused on exploiting this ability to shift production to low-cost areas to both support our competitive position and improve our margins by increasing our efficiency. Our Expected Fiscal 2025 Crops Sorghum The Sorghum Market. Sorghum comes in two types, forage and grain. Forage sorghum utilizes the whole plant fed to livestock through grazing, dried hay or sileage. Grain sorghum is bred and managed to maximize production of the seed or grain. While grain from sorghum has been traditionally used for livestock feed and in ethanol production, sorghum is gaining popularity as a substitute for wheat and other grains in food products due to its gluten-free characteristics, as well as its antioxidant, high protein, low fat, high fiber and non-GMO properties. Additio