S&W Seed Company announced the company has entered into agreements to sell 759 acres of farmland in Calipatria, Calif., as well as 30 acres of farmland in Five Points, Calif., for $7.3 million combined. Concurrently, the company has signed an agreement with the purchaser of the Calipatria farmland for continued alfalfa seed production of the Company's proprietary alfalfa seed varieties on a contracted basis.

Following the repayment of the existing $2.3 million mortgage on the Calipatria farmland, the company will utilize the remaining proceeds to prepay $5.0 million of the convertible debentures recently issued in connection with the Company's acquisition of DuPont Pioneer's alfalfa seed production and research assets, reducing interest expense and potential dilution associated with the convertible debentures.

Mark Grewal, chief executive officer of S&W Seed Company, commented, "The farmland sale, grower contracting, and debt retirement is precisely in line with the plans we laid out to further grow S&W and place it on a path to drive continued shareholder value going forward.

The sale of farmland allows S&W to retire $7.3 million of total debt from the company's balance sheet, reduce potential dilution from the convertible debentures and reduce interest expense while allowing for the continued utilization of the farmland to produce our proprietary alfalfa seed varieties. We look forward to the further execution of our strategic business plan to capitalize on the opportunities ahead of us as the largest and most diversified alfalfa seed company in the world."

The farmland sales are expected to close during the company's third quarter ending March 31, 2015. The company will receive net cash proceeds from the farmland sales of approximately $5.0 million following the repayment of the existing $2.3 million mortgage on the Calipatria farmland, and will record an estimated one-time charge of $500,000 for unrecovered stand establishment and growing crop costs that were incurred on the farmland being sold prior to farming revenues being received.

This one-time charge will be recognized in the company's second quarter. The Ccopany will also record a $126,000 gain on the sale of the farmland in Five Points during the third quarter ending March 31, 2015. Additionally, the reduction of debt is estimated to reduce interest expense by approximately $460,000 over the next 12 months.