10-K/A

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-K /A

[X]           Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the fiscal year ended June 30, 2008

[  ]           Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from _______ to _______.

Commission file number 0-1912

SONOMAWEST HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation of organization) 94-1069729 (I.R.S. Employer Identification Number)

2064 Highway 116 North, Sebastopol, California 95472

(Address of principal executive offices)

(707) 824-2534

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $0.0001 per share

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

              YES     X                                NO  ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K /A or any amendment to this Form 10-K /A .  [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.   See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filero Non-accelerated filero Smaller reporting company  x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).YES  ___NO     X

Aggregate market value of common stock held by non-affiliates based on the closing price of the registrant’s common stock as reported in the “pink sheets” published by The Pink Sheets LLC on December 31, 2007: $11,069,012  For the purposes of the foregoing calculations, shares of common stock held by persons who hold more than 5% of the outstanding shares of common stock and shares held by executive officers and directors of the registrant have been excluded in that such persons may be deemed to be affiliates. This determination of affiliates is not necessarily conclusive for this or any other purpose.

As of September 26, 2008, there were 1,251,367 shares of common stock, par value $0.0001 per share, outstanding which is the only class of shares publicly traded.

Portions of the Registrant’s Proxy Statement for the 2008 Annual Meeting of Stockholders are incorporated by reference into Part II and Part III of this Annual Report on Form 10-K /R to the extent stated herein.  The Proxy Statement will be filed within 120 days of the registrant’s fiscal year ended June 30, 2008.

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EXPLANATORY NOTE

On March 31, 2009, SonomaWest Holdings, Inc. (the “Company”) received a letter from the Securities and Exchange Commission (the “SEC”) regarding the Company’s Annual Report on Form 10-K filed by the Company with the SEC on September 29, 2008 (the “Original Filing”) for the fiscal year ended June 30, 2008.  The Company has responded to the SEC’s comments to our Original Filing in this Amendment #1.

In connection with the review of the Original Filing, the SEC asked the Company to:

(i)	revise certain disclosures related to forward-looking statements,
(ii)	revise certain disclosures related to Items 1 and 2, Business and Properties,
(iii)	revise certain disclosures related to dividends,
(iv)	revise certain disclosures related to contractual obligations and tenant reimbursements,
(v)	revise management’s disclosures related to Controls and Procedures,
(vi)	revise management’s Section 302 certifications.

T he amendment has no impact on the Company’s consolidated balance sheet, consolidated statements of operations, consolidated statements of changes in shareholders’ equity and consolidated statements of cash flows for the years ended June 30, 2008 and 2007.  Accordingly, we have not refiled the financial statements for the fiscal years ended June 30, 2008 and 2007.

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TABLE OF CONTENTS

		Page
PART I
Items 1 and 2.	Business and Properties	4
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	9
Item 3.	Legal Proceedings	12
Item 4.	Submission of Matters to a Vote of Security Holders	12
PART II		12
Item 5.	Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	21
Item 9A(T).	Controls and Procedures	21
SIGNATURES		21
EX-31.1 Certification of Chief Financial Officer
EX-31.2 Certification of Chief Executive Officer
EX-32.1 Certification of Chief Executive Officer and Chief Financial Officer

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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

SonomaWest Holdings, Inc. (the “Company” or “Registrant”) is including the following cautionary statement in this Annual Report to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward looking statements made by, or on behalf of, the Company.  The statements contained in this Report that are not historical facts are “forward-looking statements ”, which can be identified by the use of forward-looking terminology such as “estimated,” “projects,” “anticipated,” “assumes,” “expects,” “intends,” “believes,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance and underlying assumptions.  Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, although actual results may differ materially from those described in any such forward looking statements.  All written and oral forward-looking statements made in connection with this report which are attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the disclosures contained under the “Risk Factors” heading in this report and other cautionary statements set forth under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere herein. There can be no assurance that management’s expectations, beliefs or projections will be achieved or accomplished, and the Company expressly disclaims any obligation to update any forward looking statements.

PART I

Items 1 and 2.  Business and Properties

SonomaWest Holdings, Inc., formerly Vacu-dry Company, was incorporated in 1946 and currently operates as a real estate management and rental company. The Company’s rental operations include two industrial/agricultural properties.  The commercial property is now being rented to third parties.  The Company’s primary operating revenue is generated from the leasing of its two properties located in Sebastopol, California.

The properties are leased to multiple tenants with leases ranging in length from month-to-month to thirteen years.  Revenue from lease rental is recognized on a monthly basis, based upon the dollar amount specified in the related lease.  The Company requires that all tenants be covered by a lease.  The Company does not have leases that require the lessee to pay the lessor any additional rent based upon the lessee’s sales or any other financial performance measures.

On July 15, 2008, the Board of Directors of the Company declared a dividend of the remaining 150,943 shares of MetroPCS Communications, Inc. (“MetroPCS”) common stock, payable pro rata to the Company’s shareholders of record as of the close of business on July 28, 2008, due and payable on the close of business on August 18, 2008.  The Company distributed the entirety of its MetroPCS shares, and any shares held back were for rounding purposes only.

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Properties

The Company owns two properties together comprising 91.24 acres in West Sonoma County, approximately 56 miles north of San Francisco.  The properties are four miles apart, north and south of the town of Sebastopol located in the “Russian River Valley” wine appellation district.

SonomaWest Industrial Park South. This property (the “South property”) consists of 15.2 acres of land immediately south of Sebastopol at 1365 Gravenstein Highway South.  Improvements on the property consist of five connected buildings on a parcel approximately five acres in size with an aggregate of 85,882 square feet of leasable space under roof with an average effective annual rental of $6.22 per square foot as of June 30, 2008 .  In addition, there is 4,458 square feet of outside area that is currently leased. The available space is suited for commercial rental.  All buildings have fire sprinkler protection.  Other features include ample parking, security and a location close to major north-south and east-west traffic arteries. The property is zoned for “limited industrial” use, meaning that permitted uses include agricultural/food processing, light industry, related offices to support industrial tenant activities, warehousing or storage.  Adjacent to the occupied five-acre site are two additional undeveloped Company owned parcels approximately two acres and eight acres in size.  These parcels are zoned “limited industrial” and “low density residential,” respectively.

As of June 30, 2008, 100% of the leasable space under roof at the South property had been leased to nine tenants on a month-to-month or longer-term basis. In addition, there is 4,458 square feet of outside space that has also been leased.  Lease terms for all property range from month-to-month to ten years with options to extend the lease term.

The following table sets forth information as of June 30, 2008, concerning future lease expirations and other data related to the South property.

Year ending June 30th	Number of Tenants Whose Leases Will Expire	Total Square Feet Covered by Remaining Long-term Leases	Annual Rent Represented by Remaining Long-term Leases
2009	0	85,335	$  580,043
2010	1	85,335	$  563,679
2011	2	76,733	$  496,409
2012	1	59,238	$  129,214
2013	0	5,417	$    28,784
Thereafter	0	5.417	$  124,731

The table above does not include month-to-month leases. For the year ended June 30, 2008, 3% of the Company’s South property rental revenue was generated from month-to-month leases. As of June 30, 2008, approximately 2.5% or 2,236 square feet of the South property’s total square footage was covered by month-to-month leases.

    As of June 30, 2008, the federal tax basis of the property was $260,184, the accumulated book depreciation was $1,096,033 and the book net carrying value was $198,633.  Depreciation expense is calculated on a straight-line basis for book purposes and through various methods for tax purposes.  The real estate taxes for this property for the year ended June 30, 2008 were $15,110.  The Company has no debt associated with this property.

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SonomaWest Industrial Park North.  This property (the “North property”) consists of 76.04 acres of land approximately two miles north of Sebastopol at 2064 Gravenstein Highway North.  Improvements on the property consist of 12 buildings located on approximately 27 acres with an aggregate of 289,948 square feet of leasable space under roof with an average effective annual rental of $7.43 per square foot as of June 30, 2008 .  In addition, there is 49,480 square feet of outside area that is currently leased. The balance of the property is dedicated to wastewater treatment and a large pond for fire protection. The principal administrative offices of the Company occupy a small portion of the North property.  The Company believes its office space is adequate for its current needs.

On March 28, 2006, Sonoma County approved modifications to the existing land use entitlements on the Company’s North property, subject to the satisfaction of certain conditions.  These land use entitlement changes, among other things, approved a rezoning of the property from “Diverse Agricultural” to “MP-Industrial Park” use and the approval of a master use permit.  The rezoning permits industrial activities consistent with the agricultural/food processing and related warehousing that currently occur on the property.  These land use approvals permit the Company to lease the property to a broader range of tenants and allow for a broader range of uses on the property.  The approvals also permit new buildings to be constructed to replace older buildings without having to reapply for additional zoning approvals or waivers.  For the Company to maintain the benefits of the land use approvals, the Company is required to take a number of actions and satisfy a number of Sonoma County conditions of approval involving the property.  The Company has begun making the expenditures and taking the actions required to satisfy these conditions, and several of the conditions have already been satisfied.  It is anticipated that all the conditions will be completed during the second quarter of fiscal year 2009.  The Company believes that these approvals are a positive development for the Company and its stockholders and potentially increases the value of the North property. The Company estimates the total cost for these improvements to be $161, 000 during the next two years, with an additional estimated $7,000 required to complete the conditions of the approval process. The Company continues to be in compliance with the terms and conditions of our master use permit. As of June 30, 2008, $31,000 had been spent on the improvements. The Company does not engage in, or make any expenditures with respect to research and development activities.

As of June 30, 2008, 99.8% of the leasable space under roof had been leased to twenty-three tenants on a month-to-month or longer-term basis.  An additional 49,480 square feet of outside space has also been leased.  Leases for all property range from month-to-month to thirteen years.

The following table sets forth information as of June 30, 2008 concerning future lease expirations and other data related to the North property.

Year ending June 30th	Number of Tenants Whose Leases Will Expire	Total Square Feet Covered by Remaining Long-term Leases	Annual Rent Represented by Remaining Long-term Leases
2009	3	325,435	$  2,232,344
2010	2	267,518	$  1,969,238
2011	1	250,801	$  1,897,448
2012	6	247,182	$  1,529,969
2013	2	112,843	$     870,129
Thereafter	0	112,843	$  2,296,314

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The table above does not include month-to-month leases. For the year ended June 30, 2008, 4% of the Company’s North property rental revenue was generated from month-to-month leases. As of June 30, 2008, approximately 4.3% or 14,637 square feet of the North property’s total square footage was covered by month-to-month leases.

As of June 30, 2008, the federal tax basis of the property was $1,446,279, the accumulated book depreciation was $4,873,492 and the book net carrying value was $776,059.  Depreciation expense is calculated on a straight-line basis for book purposes and through various methods for tax purposes.  The real estate taxes for this property for the year ended June 30, 2008 were $58,438.  The Company has a $2,500,000 three-year term loan from Wachovia Bank that is secured by this property as described further in “Item 7 – Managements Discussion and Analysis of Financial Condition and Results of Operation”.

The Company continues to market all of its properties.  There can be no assurance that these marketing efforts will be successful, or that suitable tenants will be found on a timely basis.  Significant, prolonged vacancies at the properties may have a material adverse impact on the Company’s business, financial condition and results of operations.

Other Assets

Investment in MetroPCS Communications, Inc.

Background.  During the fiscal year ended June 30, 2008, the Company held an investment in MetroPCS, a wireless telecommunications company that consummated its initial public offering on April 19, 2007.  In connection with the transaction, the Company’s shares of Series D Preferred Stock were converted into shares of common stock, representing 993,297 shares of MetroPCS.  As part of the initial public offering, the Company agreed to a 180-day lockup on its shares, which expired on October 19, 2007. The Company accounts for its investment in MetroPCS under the fair value method, as reflected in the Company’s balance sheet, which amounted to $2,673,000 as of June 30, 2008. The Company currently classifies the investment in MetroPCS as available-for-sale. Net unrealized holding gains or losses on available-for-sale securities, if material, are reported as a component of other comprehensive income net of taxes. For the year ended June 30, 2008, $1,389,000 ($2,308,000 less the deferred tax liability of $919,000) of unrealized gain was included on the Statement of Changes in Shareholders’ Equity.

On December 20, 2007, the Board of Directors declared a dividend of 842,316 shares of MetroPCS, subsequently amended to 842,348 shares, payable pro rata to its shareholders of record as of the close of business on December 24, 2007, due and payable at the close of business on January 3, 2008. At the time, the Company recorded realized gain of $12,666,000 from the transaction.

On July 15, 2008, the Board of Directors of the Company declared a dividend of the remaining 150,943 shares of MetroPCS, payable pro rata to the Company’s shareholders of record as of the close business on July 28, 2008, due and payable at the close of business on August 18, 2008. The Company distributed the entirety of its MetroPCS shares, and any shares held back were for rounding purposes only. On July 24, 2008, the Company was notified by NASDAQ that the ex-dividend date for the dividend was set as August 19, 2008.

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Other Information

For the year ended June 30, 2008, the Company operated in one reportable segment, real estate management and rental operations.  The Company’s business is not seasonal and does not require significant working capital.  The Company does not engage in , or make any expenditures , with respect to research and development activities.  Revenue from tenants resulting from the Company’s leasing activities is generally payabl e the first day of each month.  For the year ended June 30, 2008, Vinovation, Sonoma Wine Company and Greg & Greg Inc. Winery accounted for 12%, 11% and 12% of the Company’s revenue, respectively.

Competition

The Company competes with numerous commercial property landlords who offer warehouse, manufacturing and food processing properties in the greater Petaluma/Santa Rosa area, located in central to southern Sonoma County of Northern California.  Obtaining new tenants for our properties generally requires a tenant to relocate from an existing rental property of a competitor.  The Company believes that its North property enjoys a competitive advantage over other similarly situated properties with respect to certain kinds of potential tenants because of the wastewater treatment facility located on the property, which is well suited for tenants involved in the food processing industry and more particularly, the wine processing industry.  The Company believes that its rental rates for both of its North and South properties are competitively priced relative to comparable property on the market.  Some of the Company’s competitors enjoy the advantage that their properties are newer than the Company’s properties.  The Company generally competes on the basis of location, price, service and tenant improvements, including the North property’s wastewater treatment facility.

Environmental Matters

The Company believes it has complied in all material respects with all material governmental regulations regarding protection of the environment.  In connection with the renewal of its wastewater permit (issued by the State of California), the Company was required to modify its wastewater system to separate domestic waste from its processed wastewater.  As a result, the Company has made changes to comply with these regulations and has incurred related capital expenditures of $173,000 for the total project, which was completed in September 2005.  On September 18, 2007, the Company received closure for the site investigation and remedial action of a former underground storage tank, which resulted in no additional costs. All expenses related to these contaminates are reimbursable by the State of California’s Underground Storage Tank Cleanup Fund.  In addition to these capital expenditures, the Company could be held liable for the costs of removal or remediation of any hazardous or toxic substances, if any, that might be located on or in its properties in the future.  These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of the hazardous or toxic substances.  The presence of such substances, or the failure to remediate such substances properly may adversely affect the owner’s ability to sell or rent the property or to borrow money using the property as collateral.  Other federal and state laws require the removal of damaged material containing asbestos in the event of remodeling or renovation.

Insurance

The Company maintains workers compensation, commercial general liability, property, extended coverage and rental loss insurance.  While management feels the limits and coverage are adequate relative to the related risks, there is no assurance that this insurance will be adequate to protect the Company from all unforeseen occurrences.

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Employees

The Company currently employs two part-time and four full-time employees in a management or staff capacity, none of whom is covered under a collective bargaining agreement.

Item 1A:  Risk Factors

In evaluating the Company and its business, the following risk factors should be given careful consideration, in addition to the information mentioned elsewhere in this Annual Report on Form 10-K /A .

Factors Related to Real Estate Industry Segment.

Our properties success depends upon the Northern California and particularly the Sonoma County economy.

Our entire rental revenues come from two properties located in Northern California and more particularly, Sonoma County.  Events and conditions applicable to owners and operators of real property that are beyond our control may decrease the value of our properties.  These events include: local oversupply or reduction in demand for office, industrial or other commercial space; inability to collect rent from tenants; vacancies or inability to rent spaces on favorable terms; inability to finance property development on favorable terms; increased operating costs, including insurance premiums, utilities, and real estate taxes; costs of complying with changes in governmental regulations; the relative illiquidity of real estate investments; changing sub-market demographics; and property damage resulting from seismic activity.  The geographical concentration of our properties may expose us to greater economic risks than if we owned properties in several geographic regions.  Any adverse economic or real estate developments in the Sonoma County region could adversely impact our financial condition, results from operations, cash flows, quoted per share trading price of our common stock and ability to satisfy any debt service obligations. There is no assurance, in the near future, that the market will significantly improve, or not suffer a decline.

Potential losses may not be covered by insurance.

We carry commercial general liability, property, extended coverage and rental loss insurance covering all of our properties.  Management believes the policy specifications and insured limits are appropriate given the relative risk of loss, the cost of the coverage and industry practice.  We do not carry earthquake coverage.  We do not carry insurance for generally uninsurable losses such as pollution, contamination, asbestos and seepage.  Some of our policies are subject to limitations involving large deductibles or co-payments and policy limits.  If we experience a loss that is uninsured or that exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties.  In addition, if the damaged properties were subject to any recourse indebtedness, we would continue to be liable for the indebtedness, even if the properties were irreparable.

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Downturns in tenants’ businesses may reduce our cash flow.

For the year ended June 30, 2008, we derived 100% of our operating revenue from rental income and tenant reimbursements.  A tenant may experience a downturn in its business which may weaken its financial condition and result in its failure to make timely rental payments.  In the event of default by a tenant, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment.  The bankruptcy or insolvency of a major tenant also may adversely affect the income produced by our properties.  If any tenant becomes a debtor in a case under the U.S. Bankruptcy Code, we cannot evict the tenant solely because of the bankruptcy.  In addition, the bankruptcy court might authorize the tenant to reject and terminate its lease.  Our claim against the tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease.  Our claim for unpaid rent would likely not be paid in full.  Any losses resulting from the bankruptcy of any of our tenants could adversely impact our financial condition, results from operations, cash flow and the quoted per share trading price of our common stock.  Although we have not experienced material losses from tenant bankruptcies, tenants could file for bankruptcy protection in the future.

We may be unable to renew leases or re-let space as leases expire.

As of June 30, 2008, not taking into account month-to-month leases (which comprise approximately 4% of our total leased space), leases representing approximately 14% and 7% of the square footage of our properties will expire in 2009 and 2010, respectively.  If leases expire with then-above market rental rates we may be forced to renew or re-lease such expiring leases at rates below the existing rental rates.  We cannot give any assurance that leases will be renewed or that our properties will be re-leased at rental rates equal to or above the current rental rates.  If the rental rates for our properties decrease, if existing tenants do not renew their leases, or if we do not re-lease a significant portion of our available space, our financial position, results of operations, cash flow and quoted per share trading price of our common stock would be adversely affected.

Our real estate holdings could subject us to potential environmental liability.

We could be held liable for the costs of removal or remediation of any hazardous or toxic substances located on or in our properties. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of the hazardous or toxic substances.  The presence of such substances, or the failure to remediate such substances properly, may adversely affect our ability to sell or rent the property or to borrow using the property as collateral.  Other federal and state laws require the removal of damaged material containing asbestos in the event of remodeling or renovation.

We rely on three major tenants for a significant portion of our rental revenues.

Benziger Family Winery accounted for 2% and 12% of the Company’s rental revenues for the years ended June 30, 2008 and 2007, respectively. As of September 1, 2007, Sonoma Wine Company replaced Benziger Family Winery as a tenant, and entered into a new five-year lease covering 54,244 square feet ofwarehouse space, with annual Consumer Price Index and Excess Operating Expense increases provided for in the lease .  Sonoma Wine Company accounted for 11% of the Company’s rental revenues for the year ended June 30, 2008.  The loss of the Sonoma Wine Company when their lease expires August 31, 2012, if not renewed or replaced, would have a material adverse effect on our operating results.  At June 30, 2008, all rental amounts owed by Sonoma Wine Company were payable within the normal billing cycle and were not past due.

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Vinovation, Inc. accounted for 12% the Company’s rental revenues for the years ended June 30, 2008 and 2007, respectively. On January 24, 2006, Vinovation Inc. entered into a 26 month lease covering 52,601 square feet of warehouse space with annual Consumer Price Index  increases provided for in the lease.  The loss of the Vinovation, Inc. when their lease expires September 30, 2011, if not renewed or replaced, would have a material adverse effect on our operating results.  At June 30, 2008 and 2007, all rental amounts owed by Vinovation, Inc. were payable within the normal billing cycle and were not past due.

Greg & Greg, Inc. Winery accounted for 12% of the Company’s rental revenues for the years ended June 30, 2008 and 2007.   On June 8, 2008, Greg & Greg, Inc. Winery entered into a 5 year lease covering 37,931 square feet of warehouse space with annual Consumer Price Index and Excess Operating Expense increases provided for in the lease.  The loss of Greg & Greg, Inc. Winery when their lease expires on August 15, 2013, if not renewed or replaced, would have a material adverse effect on our operating results.  At June 30, 2008 and 2007, all rental amounts owed by Greg & Greg, Inc. Winery were payable within the normal billing cycle and were not past due.

 The following table sets forth the Company’s  major tenants whose rental payments exceed 10% of the Company’s leasing segment revenues:

	2008		2007
Benzinger Family Winery	$	54,000	$	305,000
Sonoma Wine Company		309,000		0
Vinovation, Inc.		339,000		307,000
Greg & Greg Inc. Winery		347,000		280,000
	$	1,047,000	$	892,000

During the years ended June 30, 2008 and 2007, 64% and 59%, respectively, of the Companies revenues were associated with the wine industry.

Compliance with new regulations governing public company corporate governance and reporting will result in additional costs.

Our continuing preparation for and implementation of various corporate governance reforms and enhanced disclosure laws and regulations adopted in recent years requires us to incur significant additional accounting and legal costs.  We, like other public companies, are preparing for new accounting practices and procedures required by laws and regulations adopted in connection with the Sarbanes-Oxley Act of 2002.  In particular, we are providing, with this Annual Report on Form 10-K /A , disclosures on our internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act.  Beginning with the fiscal year ending June 30, 2010, the Company’s auditors will provide an annual report on our internal control over financial reporting and auditors’ attestation with respect to our report required by Section 404 of the Sarbanes-Oxley Act.  Any unanticipated difficulties in preparing for and implementing these and other corporate governance and reporting reforms could result in material delays in compliance or significantly increase our costs.  Also, there can be no assurance that we will be able to fully comply with these new laws and regulations.  Any failure to timely prepare for and implement the reforms required by these new laws and regulations could significantly harm our business, operating results, and financial condition.

Factors Relating to Our Stock

Our stock price is volatile and our stock is thinly traded, sometimes resulting in a lack of liquidity.

Our stock price has from time to time experienced significant price and volume fluctuations.  For example, during fiscal 2008, the high and low sales price for the common stock was $29.80 and $5.00, respectively.  Since becoming a public company, our stock price has fluctuated in conjunction with the stock markets generally and sometimes on matters more specific to the Company, such as the public offering of MetroPCS and the Company’s distribution of its MetroPCS shares to its shareholders.  Our stock price may be expected to continue to experience significant price and volume fluctuations in response to factors specific to the Company.

The common stock is currently trading on the over-the-counter “Pink Sheets,” which is generally a less liquid market.  Continued trading on the Pink Sheets could reduce the liquidity of our common stock, cause certain investors not to trade in our common stock and result in a lower stock price.

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The daily trading volume in our common stock is typically very low.  As a result, sales of a significant number of shares into the public markets may negatively affect our stock price, and there can be no assurance that an investor will be able to purchase or sell shares of our common stock at the times they desire or at all.

Item 1B.  Unresolved Staff Comments

None.

Item 3.  Legal Proceedings

The Company is not a party to any material legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended June 30, 2008.

PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common stock was traded on the Nasdaq SmallCap Market (symbol:  SWHI) until August 10, 2005, when the common stock was delisted from the Nasdaq SmallCap Market, and began trading on the over-the-counter “Pink Sheets” under the symbol “SWHI.PK.”

The quarterly high and low sales prices for the last two fiscal years were as follows:

Quarter Ending	Low		High		Adj Close*
9/30/2006	$	11.50	$	13.02	$	2.42
12/31/2006	$	10.45	$	14.00	$	2.57
3/31/2007	$	12.50	$	22.00	$	3.72
6/30/2007	$	20.00	$	29.45	$	4.93
9/30/2007	$	20.00	$	29.80	$	3.77
12/31/2007	$	13.00	$	21.25	$	3.26
3/31/2008	$	5.50	$	19.50	$	8.00
6/30/2008	$	5.00	$	8.00	$	7.00
* Closing price adjusted for dividends

The above quotations were obtained from the Yahoo Finance Online website.

On September 26, 2008, there were approximately 376 registered holders of our common stock.  On that date, the average of the high and low sales price per share of the Company’s stock was $8.35.

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Dividends

The Company paid dividends on its common stock in the form of shares of MetroPCS common stock in January 2008 valued at $14,702,000, and distributed the remainder of its MetroPCS shares to its shareholders on August 18, 2008 , valued at $2,649,000.  Even if its future operations or investments result in increased profitability, as to which there can be no assurance, there is no present anticipation that future dividends will be paid.  The Company has not paid any cash dividends on its common stock during the past two years.  The Company's $2,500,000 loan with Wachovia Bank, described further in "Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operation" does not materially restrict the Company's ability to pay dividends.

Issuer Purchases of Equity Securities

The Company did not repurchase any of its registered securities during the last quarter of the fiscal year ended June 30, 2008.

Equity Compensation Plan Information

The Company’s equity plan information required by this Item is incorporated herein by reference from the Company’s definitive proxy statement for its Annual Meeting of Stockholders to be filed with the United States Securities and Exchange Commission within 120 days after the end of the fiscal year ended June 30, 2008.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operation

OVERVIEW

The Company’s business consists of its real estate management and rental operations.  As of June 30, 2008, the Company also owned 150,949 shares of stock of a publicly traded wireless telecommunications company, MetroPCS; the remainder of these shares were distributed to our stockholders on August 18, 2008.

The management of the Company is pleased with the favorable leasing activity that has taken place at the Company’s properties during the past year.  In May 2008, the Company obtained a $2,500,000 loan from Wachovia Bank (the “Loan”), to help cover the tax liability incurred as a result of the dividend distribution of the MetroPCS stock to the Company shareholders, as described further below. The Loan is evidenced by a three-year promissory note, made by the Company in favor of Wachovia and bearing interest at the rate of LIBOR plus 2.25% per annum. The interest rate was 4.7325% at June 30, 2008.  The Loan matures on May 1, 2011, prior to which, the Company is obligated to make monthly payments of accrued interest only.  The Loan is secured by the Company's North property pursuant to the Deed of Trust.  The Loan and the Deed of Trust contain standard continuing covenants and agreements.  In connection with the Loan, the Company also entered into an Environmental Indemnity Agreement, dated as of May 21, 2008, pursuant to which the Company agreed, among other things, to indemnify Wachovia and its assignees against any liabilities arising from or out of (i) certain violation of environmental laws and regulations applicable to the North property, (ii) the presence on the North property of certain hazardous materials, and (iii) any breach by the Company of any representation or warranty made in the Environmental Indemnity Agreement, to the extent applicable.

The Company’s rental operations include industrial/agricultural property, some of which was formerly used in its discontinued fruit processing businesses.  This commercial property is now being rented to third parties.  The Company’s primary business revenue is generated from the leasing of its two properties, located in Sebastopol, California.

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The properties are leased to multiple tenants with leases varying in length from month-to-month to thirteen years.  Revenue from lease rental is recognized on a monthly basis, based upon the dollar amount specified in the related lease.  The Company requires that all tenants be covered by a lease.  The Company does not have leases that include provisions that require the lessee to pay the lessor any additional rent based upon the lessee’s sales or any other financial performance measures.  The Company has no tenant related reimbursements that are not part of tenant lease agreements.

In 2000 and 2001, the Company liquidated its fruit processing operations, but continued to hold its real estate and other assets.  Thereafter, an opportunity was made available to the Company to invest in MetroPCS, which had operations, in part, in Northern California.

                In connection with MetroPCS’s initial public offering on April 19, 2007, the Company’s shares of Series D Preferred Stock were converted into 993,297 shares of common stock. MetroPCS began trading its stock on the open market April 19, 2007, at which point the Company was able to determine the fair value of its investment in MetroPCS. Prior to this date, the fair value of the MetroPCS investment could not be readily determined and thus had been accounted for at cost. As of June 30, 2008, the Company classified the investment as “available-for-sale,” and accounted for its investment at fair value.  Per FAS 115, the increase in value from cost to fair value was reflected as an increase in shareholders’ equity net of the tax effect, and was not reflected on the Statement of Income. On December 20, 2007, the Board of Directors declared a dividend of 842,316 shares of MetroPCS, subsequently amended to 842,348 shares, payable pro rata to its shareholders of record as of the close of business on December 24, 2007, due and payable at the close of business on January 3, 2008. At the time, the Company recorded realized gain of $12,666,000 from the transaction.  Following the payment of the dividend, the Company held 150,949 shares of MetroPCS common stock with a fair value of $2,673,000 as of June 30, 2008, which was included on the balance sheet as of June 30, 2008.  The net unrealized gain of $1,389,000 ($2,308,000 less the deferred tax liability of $919,000) which resulted from increasing the value from cost to fair value for the year ended June 30, 2008 was included on the Statement of Changes in Shareholders’ Equity.

On July 15, 2008, the Company declared a dividend of the remaining 150,943 shares of MetroPCS common stock, payable pro rata to its shareholders of record of common stock as of the close of business on July 28, 2008, due and payable at the close of business on August 18, 2008. On July 24, 2008, the Company was notified by NASDAQ that the ex-dividend date for the dividend was set as August 19, 2008

CRITICAL ACCOUNTING POLICIES

The financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Company to make estimates and assumptions.  The Company believes that of its significant accounting policies (see Note 1 to the financial statements); the most critical accounting policies were determined to be related to:

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Valuation of Investments Securities – In connection with the MetroPCS initial public offering on April 19, 2007, the Company’s shares of Series D Preferred Stock were converted into 993,297 shares of MetroPCS common stock.  As part of the initial public offering, the Company agreed to a 180-day lockup on its shares. The Company currently classifies the investment as available-for-sale and it is carried at fair value. Net unrealized gains or losses on available-for-sale securities, if material, are reported as a component of other comprehensive income in the Statement of Changes in Shareholders’ Equity. The fair value of the investment in MetroPCS following the payment of the dividend in January 2008 as reflected in the balance sheet was $2,673,000 as of June 30, 2008. The fair value was derived from the publicly traded stock price as of June 30, 2008. The deferred tax liability of $919,000 associated with the unrealized gain on the increase to fair value of $2,308,000 was reflected in the balance sheet as of June, 30, 2008.  For the year ended June 30, 2008, $1,389,000 ($2,308,000 less the deferred tax liability of $919,000) of unrealized gain was included on the Statement of Changes in Shareholders’ Equity.

Stock-Based Compensation – In accordance with SFAS No. 123(R), Share-Based Payment. Under the fair value recognition provisions of this statement, share-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment, including estimating expected dividends. In addition, judgment is also required in estimating the amount of share-based awards that are expected to be forfeited. If actual results differ significantly from these estimates, stock-based compensation expense and our results of operations could be materially impacted.

Income Taxes – The Company records income taxes in accordance with Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes.  SFAS No. 109 requires the Company to compute deferred taxes based upon the amount of taxes payable in future years after considering changes in tax rates and other statutory provisions that will be in effect in those years. Deferred taxes are recorded based upon differences between the financial statement and tax bases of assets and liabilities and available tax credit carryforwards.  A valuation allowance is provided for deferred tax assets, if their realization is uncertain.

   Revenue Recognition – Revenue is recognized on a monthly basis, based upon the dollar amount specified in the related lease.  The Company requires that all tenants be covered by a lease.  The Company does not have leases that include provisions that require the lessee to pay the lessor any additional rent based upon the lessee’s sales or any other financial performance levels.  Reimbursements of certain costs received from tenants are recognized as tenant reimbursement revenues.

NEW ACCOUNTING PRONOUNCEMENTS

Effective July 1, 2007, the Company adopted the provisions of the Financial Accounting Standards Board (“FASB”) Interpretation Number 48, Accounting for Uncertainty in Income Taxes, (“FIN 48”) an Interpretation of SFAS No. 109, Accounting for Income Taxes (“SFAS No. 109”).  FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company’s income tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

As a result of the implementation of FIN 48, the Company recognized no change in liability for unrecognized tax benefits related to tax positions taken in prior periods, and no corresponding change in retained earnings.

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      As a result of the implementation of FIN 48, the Company recognized no material adjustment in the liability for unrecognized income tax benefits as of July 1, 2007 (adoption date) and June 30, 2008.  Also, the Company had no amounts of unrecognized tax benefits that, if recognized, would affect its effective tax rate for July 1, 2007 and June 30, 2008.

The Company’s policy for deducting interest and penalties is to treat interest as interest expense and penalties as taxes.  As of June 30, 2008, the Company has no amount accrued for the payment of interest and penalties related to unrecognized tax benefits, and no amounts as of the adoption date of FIN 48.

The U.S. tax return years 2004 through 2007 remain open to examination by tax authorities.   The State tax return years 2002 to 2007 remain open to examination by tax authorities.

    In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. SFAS No. 157 is effective for the Company’s fiscal year beginning July 1, 2008.

    In February 2008, the FASB issued FASB Staff Position (FSP) No. 157-2, Effective Date of FASB Statement No. 157. FSP No. 157-2 permits a one-year deferral in applying the measurement provisions of SFAS No. 157 to non-financial assets and non-financial liabilities that are not recognized or disclosed at fair value in an entity’s financial statements on a recurring basis (at least annually). The adoption of SFAS No. 157 and FSP No. 157-2 is not expected to have a material impact on our financial position or results of operations.

 In February 2008, FASB issued FSP No. 157-1, which amends SFAS No. 157, Fair Value Measurements, to exclude SFAS No. 13, Accounting for Leases, and other accounting pronouncements that address fair value measurements for purposes of lease classification or measurement under Statement 13. However, this scope exception does not apply to assets acquired and liabilities assumed in a business combination that are required to be measured at fair value under FASB Statement No. 141, Business Combinations, or No. 141 (revised 2007), Business Combinations, regardless of whether those assets and liabilities are related to leases.  The adoption of FSP No. 157-1 is not expected to have a material impact on our financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, which is effective for fiscal years beginning after November 15, 2007.  Early adoption is permitted in certain circumstances provided that the entity also elects to adopt the provisions of SFAS No. 157, Fair Value Measurements.  SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value.  The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company does not expect the adoption of SFAS No. 159 to have a material impact on its financial position, results of operations or cash flows.

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    In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. The new standard is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (“GAAP”) for nongovernmental entities.

    Prior to the issuance of SFAS No. 162, GAAP hierarchy was defined in the American Institute of Certified Public Accountants (AICPA) Statement on Auditing Standards (SAS) No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. SAS No. 69 has been criticized because it is directed to the auditor rather than the entity. SFAS No. 162 addresses these issues by establishing that the GAAP hierarchy should be directed to entities because it is the entity (not its auditor) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.

    SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles.  The adoption of SFAS No. 162 is not expected to have a material impact on our financial position or results of operations.

   Management does not believe that any other issued, but not yet effective accounting pronouncements, if adopted, would have had a material effect on the accompanying financial statements.

RESULTS OF OPERATIONS

Fiscal 2008 Compared To Fiscal 2007

Rental Revenue. The Company leases warehouse, production, and office space, as well as outside storage space at both of its properties.  The two properties have a combined leasable area of approximately 429,768 square feet (375,830 ft. under roof and 53,938 ft. outside) on 91.24 acres of land.  As of the end of fiscal 2008, there were 32 tenants with leases covering 429,768 square feet of leasable space (375,830 ft. under roof and 53,938 ft. outside) or 100% of the total leasable area.  As of the end of fiscal 2007, there were 33 tenants with leases that comprised 429,834 square feet of leasable space (369,316 ft. under roof and 60,518 ft. outside) or 99% of the total leasable area of  435,734 square feet (375,216 ft. under roof and 60,518 ft. outside). Leasable area changes result from areas that are removed from common area and rented or found not to be rentable. Fiscal 2008 rental revenue increased $224,000 or 9% from $2,545,000 in fiscal 2007, to $2,769,000 in fiscal 2008. The increase in occupancy under roof by current and new tenants, at higher rental rates, accounted for the increase in the revenue between fiscal years.  While the Company continues to market the properties to prospective tenants to occupy leases that expire during the next year, there can be no assurance that tenants will be found in a timely manner or at acceptable rental rates; the failure to renew or replace expiring leases would then negatively impact the Company’s revenue.

Tenant Reimbursements.  Reimbursements received from tenants of certain costs are recognized as tenant reimbursement revenues.  For the fiscal year 2008, tenant reimbursements decreased $173,000, from $701,000 to $528,000 or 25% as compared to fiscal year 2007, utility reimbursements decreased $156,000, water usage reimbursements decreased $10,000 and other tenant reimbursements decreased $7,000.  Such reimbursements related primarily to the decrease in occupancy by manufacturing tenants with an increase in storage tenants, which resulted in less energy and water consumption by tenants.   The Company receives monthly bills from its utility provider for tenant expenses. The Company makes the payments directly to the utility provider on behalf of the tenants, and submits an invoice to the tenants for reimbursement. Such reimbursements are provided for in the terms of the tenants' lease agreements with the Company. While utility reimbursements levels may decrease and there may be a downward pressure on revenues, the Company would also have an equal amount of reduction of expenses, thus creating no effect to net income.

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Operating Costs.  Total operating costs consist of direct costs related to operations and all general corporate costs.  Fiscal 2008 total operating costs of $2,714,000 decreased $25,000, or less than 1%, from $2,739,000 in fiscal 2007.  Of this decrease, operating costs increased $28,000 and operating costs-related party decreased $53,000.  The increase of $28,000 in operating costs was primarily the result of the following increases: salary and related expenses of $112,000 to Walker R. Stapleton as the President and Chief Executive Officer of the Company, facility water system costs of $56,000, various accounting fees of $52,000, legal fees of $26,000, Board of Director Fees of $19,000, Sarbanes-Oxley compliance consultant fees of $19,000, real estate incentive compensation of $22,000, payroll and related expenses of $31,000 primarily related to the employee 401(k) plan adopted in April 2008 and various miscellaneous increases of $47,000. These were offset by the following decreases: utility expenses of $145,000 primarly due to the reduction of processing on the North property, repairs and maintenance by a total of $72,000, primarily related to a reduced level of roofing expenses, non-cash stock compensation of $53,000, depreciation of $19,000, loan fees of $19,000 and decreased Delaware Franchise tax of $48,000.  The Company continues to closely scrutinize all discretionary spending as efforts to reduce and/or maintain expenses continue to be an important management focus. Total operating expenses are expected to remain relatively consistent over the remainder of fiscal 2008.

The decrease of $53,000 in operating costs—related party was primarily a result of decreases in related party real estate consulting costs ($53,000) relating to the revision in June 2007 to a consulting agreement with a member of our Board of Directors.

Interest Income.  In fiscal 2008 and 2007, the Company generated $153,000 of interest income on its cash balances.  

Interest Expense.  Interest expense consists primarily of interest expense on mortgage debt.  For fiscal 2008, the Company incurred $28,000 of interest expense.  This compares to $7,000 in fiscal 2007.  The increase is related to interest expense on the Company’s $2,500,000 term loan received in May 2008.

Income Taxes.  The Company’s tax provision was $5,383,000 in fiscal 2008 compared to $206,000 in fiscal 2007.  The 2008 tax provision was higher than fiscal 2007 primarily because the Company recorded a gain on distribution of MetroPCS shares in the amount of $12,666,000.

Fiscal 2007 Compared To Fiscal 2006

Rental Revenue. The Company leases warehouse, production, and office space, as well as outside storage space at both of its properties.  The two properties have a combined leasable area of approximately 435,734 square feet (375,216 ft. under roof and 60,518 ft. outside) on 91.24 acres of land.  As of the end of fiscal year 2007, there were 33 tenants with leases covering 429,834 square feet of leasable space (369,316 ft. under roof and 60,518 ft. outside) or 99% of the total leasable area.  As of the end of fiscal 2006, there were 33 tenants with leases that comprised 420,153 square feet of leasable space (362,600 ft. under roof and 57,553 ft. outside) or 97% of the total leasable area of 432,769 square feet (375,216 ft. under roof and 57,553 ft. outside). Fiscal 2007 rental revenue increased $409,000 or 19% from $2,136,000 in fiscal 2006, to $2,545,000 in fiscal 2007. The increase in occupancy by current and new tenants, at higher rental rates, accounted for the increase in the revenue between fiscal years.   While the Company continues to market the properties to prospective tenants to occupy leases that expire during the next year, there can be no assurance that tenants will be found in a timely manner or at acceptable rental rates; the failure to renew or replace expiring leases would then negatively impact the Company’s revenue.

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Tenant Reimbursements.  Reimbursements received from tenants of certain costs are recognized as tenant reimbursement revenues.  For the fiscal year 2007, tenant reimbursements increased $170,000, from $531,000 to $701,000 or 32% as compared to fiscal year 2006.  Such reimbursements related primarily to the increase in occupancy, which resulted in additional energy and water consumption by tenants.  The Company’s costs for such items are passed along to the tenants at the Company’s cost. Utilities increased $143,000, water usage increased $19,000 and other reimbursements increased $8,000.

Operating Costs.  Total operating costs consist of direct costs related to operations and all general corporate costs.  Fiscal 2007 total operating costs of $2,739,000 increased $162,000 or 6% from $2,577,000 in fiscal 2006.  Of this increase, operating costs increased $255,000 and operating costs-related party decreased $93,000.  The increase of $255,000 in operating costs was primarily the result of the following: increased repair and maintenance costs of $132,000 (primarily from $116,000 in roof recoating and $8,000 in road repairs, an increase in utility expense of $126,000 due to the increased occupancy), an increased bonus to Walker R. Stapleton as the President and Chief Executive Officer of the Company of $90,000.  This incentive bonus was recommended by an outside compensation analysis specialist and unanimously approved by the Compensation Committee. Other increases included the Delaware Franchise Tax increase of $65,000 related to the increased valuation of the Company’s investment in MetroPCS, employee bonus accruals increased $35,000, non-cash stock compensation expense increased $35,000 resulting from an increase in the number of fully vested stock options granted in fiscal 2007 as compared to fiscal 2006 and increased board fees of $33,000.  These increases were partially offset by decreases in non-recurring Special Committee costs of $125,000 in fiscal 2006 relating to the management-led buyout proposal received from Mr. Stapleton, non-related party legal fees of $50,000 and various miscellaneous expenses, each under $10,000, totaling $86,000.  The overall operating costs for fiscal 2008 are expected to be slightly higher compared to fiscal 2007 as the result of costs associated with the land use entitlement change approvals.

     The decrease of $93,000 in operating costs—related party was primarily a result of decreases in related party real estate consulting costs ($67,000) relating to the revision in June 2006 to a consulting agreement with a review of our Board of Directors reducing the fees paid. The Company continues to closely scrutinize all discretionary spending.  Efforts to reduce and/or maintain expenses continue to be an important focus for the Company.

Interest Income.  In fiscal 2007, the Company generated $153,000 of interest income on its cash balances, compared to $134,000 in fiscal 2006.  The increase in interest income in fiscal 2007 was a result of an increase in the average available invested cash.

Interest Expense.  Interest expense consists primarily of interest expense on mortgage debt.  For fiscal 2007, the Company incurred $7,000 of interest expense.  This compares to $119,000 in fiscal 2006. The decrease in interest expense in fiscal 2007 was a result of paying off the Wells Fargo loan and credit line in the first quarter of fiscal 2007.

Other Income and Expense.  In fiscal 2007, the Company generated $2,000 from other income and expense from the sale of bins.  In fiscal 2006, the Company recorded $8,000 in other income and expense.  The decrease resulted from the sale of discontinued assets of $5,000 in fiscal 2006.  During the year ending June 30, 2007, the Company did not sell any of its MetroPCS stock.

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Income Taxes.  The Company’s tax provision was $206,000 in fiscal 2007 compared to $479,000 in fiscal 2006.  The 2006 tax provision was higher than fiscal 2007 primarily because the Company recorded a gain on the sale of MetroPCS shares in fiscal 2006, in the amount of $1,090,000.  The Company’s operating income increased to $507,000 in fiscal 2007 compared to $90,000 in fiscal 2006.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash and cash equivalents of $2,604,000 at June 30, 2008, and long-term debt of $2,500,000.  The decrease in the cash balance of $983,000, from $3,587,000 at June 30, 2007, was primarily the result of cash used in operating activities of $4,061,000, which included cash outflow for tax payments of $5,117,000, and capital expenditures of $39,000.  This decrease was offset by the receipt of proceeds from exercise of stock options for $540,000 plus the tax benefit of $77,000 and proceeds from the loan of $2,500,000.  At June 30, 2008, the Company also held 150,949 shares of MetroPCS, with a fair market value of $2,673,000.  Management believes its cash and cash equivalents and cash expected to be generated by its business activities will be sufficient to meet its working capital needs for at least the next twelve months.

In May 2008, the Company entered into a Loan Agreement with Wachovia Bank for $2,500,000.  The loan bears interest at the Libor plus 2.25%, with accrued monthly interest payments only.  The interest rate was 4.7325% as of June 30, 2008.  Principal and interest is due on the maturity date of May 21, 2011.  The Note is secured by a first deed of trust on the Company’s North property located at 2064 Gravenstein Highway North, Sebastopol, California.   Under this Loan Agreement the Company is required to meet certain financial covenants; as of June 30, 2008 the Company was in compliance with such covenants.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

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Item 9.   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

There have been no changes in our accountants and have no disagreements with regard to accounting and financial disclosure.

Item 9A(T).  Controls and Procedures

 
Evaluation of Disclosure Controls and Procedures

                Attached as exhibits to this report are certifications of our CEO and CFO required pursuant to Rule 13a-14 under the Exchange Act. This section includes information concerning the controls and procedures evaluation referred to in the certifications.

                Evaluation of Disclosure Controls and Procedures.     We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2008. This evaluation was conducted under the supervision and with the participation of management, including our CEO and CFO. Based on this evaluation, our CEO and CFO have concluded that, subject to the limitations noted in this section, as of June 30, 2008, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC. We also concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure.

     Management's Annual Report on Internal Control over Financial Reporting.    Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

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                Under the supervision and with the participation of our management, including our CEO and CFO, we assessed our internal control over financial reporting as of June 30, 2008, the end of our fiscal year. This assessment was based on criteria established in Internal Control—Integrated Framework  issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, management has concluded that our internal control over financial reporting was effective as of June 30, 2008.

                This Annual Report on Form 10K/A does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

               Changes in Internal Control over Financial Reporting.    There have been no changes in our internal control over financial reporting during the fourth quarter of 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

                Inherent Limitations on Effectiveness of Controls.    Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:                       April 10, 2009                                                                         SONOMAWEST HOLDINGS, INC.

                                 By:    /s/ Walker R. Stapleton

                     Walker R. Stapleton, President, Chief

                      Executive Officer and Chief Financial Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Walker R. Stapleton and David J. Bugatto, and each of them, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Report on Form 10-K /A , and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting to said attorneys-in-fact, or his substitute or substitutes, the power and authority to perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

SIGNATURES	TITLE	DATE
Principal Executive Officer and Principal Financial Officer: /s/ Walker R. Stapleton                             Walker R. Stapleton	President, Chief Executive Officer and Chief Financial Officer, Director	April 10, 2009
Directors:
/s/ David J. Bugatto                                   David J. Bugatto	Director	April 10, 2009
/s/ David Janke                                               David Janke	Director	April 10, 2009
/s/ Robert Davies                                                                             Robert Davies	Director	April 10, 2009

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EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Walker R. Stapleton , Chief Executive Officer of SonomaWest Holdings, Inc. , certify that:

1.           I have reviewed this annual report on Form 10-K /A of SonomaWest Holdings, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 10, 2009

/s/ Walker R. Stapleton                                                                

Walker R. Stapleton, Chief Executive Officer 

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Walker R. Stapleton , Chief Financial Officer of SonomaWest Holdings, Inc. , certify that:

1.           I have reviewed this annual report on Form 10-K /A of SonomaWest Holdings, Inc.;

2.           Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.           Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.           The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exhange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.           The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 10, 2009

/s/ Walker R. Stapleton                                                                

Walker R. Stapleton, Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63

of Title 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.  1350), the undersigned officer of SonomaWest Holdings, Inc., a Delaware corporation (the “Company”), does hereby certify that:

The Annual Report on Form 10-K /A for the fiscal year ended June 30, 2008 (the “Form 10-K /A ”) of the Company fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Form 10-K /A fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Walker R. Stapleton                                                                     

Walker R. Stapleton, President, Chief Executive Officer and Chief Financial Officer

April 10, 2009