1477246--9/28/2010--S&W_Seed

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Risks Relating to Our Business and Industry Adverse weather conditions, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business. Our earnings may be sensitive to fluctuations in market prices and demand for our products. Because our business is highly seasonal, our revenue, cash flows from operations and operating results may fluctuate on a seasonal and quarterly basis. 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. Because we do not grow any of the alfalfa seed that we sell, we are entirely dependent on our network of growers, and our sales, cash flows from operations and results of operations may be negatively affected if our largest growers were to stop supplying seed to us. We are particularly dependent on our relationship with Triangle T. A lack of availability of water in California s San Joaquin Valley could impact our business. We face intense competition, and our inability to compete effectively for any reason could adversely affect our business. If we are unable to estimate our customers future needs accurately and to match our production to the demand of our customers, our business, financial condition and results of operations may be adversely affected. Our single business line of seed development and production does not permit us to spread our business risks among different business segments and, thus, a disruption in our seed production or the industry would harm us more immediately and directly than if we were diversified. If we fail to introduce and commercialize new alfalfa seed varieties, we may not be able to maintain market share, and our future sales may be harmed. Roundup Ready alfalfa could be available for sale in 2010 or soon thereafter, and its availability could negatively impact our sales if we do not license the technology. The approval of GMO alfalfa seed products in the U.S. could negatively impact our operations if our growers cannot satisfy field separation requirements we may have to impose on them to avoid cross-pollination of GMO and non-GMO products. We have recently started a new business venture to pursue the development and production of stevia, and this part of our business is subject to many of the risks of a new business enterprise. The stevia market may not develop as we anticipate and therefore our investment in stevia may not be as profitable as we expect. If demand for stevia does not increase, there may be excess capacity that could decrease the market price of stevia and reduce our revenue expectations. Stevia competes with sugar and other high intensity sweeteners in the global sweetener market, and the success of stevia will largely depend on consumer perception of the positive health implications of stevia relative to other sweeteners. There are difficulties in managing our storage system, which may result in damage to our seeds in storage. If we are unable to acquire sufficient raw materials or produce sufficient finished product, we will not be able to meet the demands of our customers. The loss of key employees or the failure to attract qualified personnel could have a material adverse effect on our ability to run our business. We may not be able to manage our expansion of operations effectively. Changes in government policies and laws could adversely affect international sales and therefore, our financial results. We could face international transportation risks in the future. Insurance covering warranty 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. The current global economic downturn could result in a decrease in our sales and revenue, which could adversely affect the results of our operations, and we cannot predict the extent or duration of these trends. Capital and credit market issues could negatively affect our liquidity, increase our costs of borrowing and disrupt the operations of our growers and customers. If we are unable to protect our intellectual property rights, our business and prospects may be harmed. Risks Relating to Our Securities An active market may not develop or be maintained for our securities. Our largest stockholder has a controlling interest in our company and may have interests that differ from our other stockholders. While the public warrants are outstanding, it may be more difficult to raise additional equity capital. The redemption of the Class A warrants or Class B warrants issued in our initial public offering may require warrantholders to sell or exercise the those warrants at a time that may be disadvantageous for them. Future sales or the potential for future sales of shares of our common stock may cause the trading price of our common stock and public warrants to decline and could impair our ability to raise capital through subsequent equity offerings. Anti-takeover provisions and our right to issue preferred stock could make a third-party acquisition of us difficult. The value of our common stock and public warrants could be volatile. Our quarter-to-quarter performance may vary substantially, and this variance, as well as general market conditions, may cause our stock price to fluctuate greatly and potentially expose us to litigation.

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1477246--9/28/2010--S&W_Seed_Co