Item 1.01 Entry into a Material Definitive Agreement.
On August 3, 2020, AeroGrow International, Inc. (the "Company") entered a $7.5
Million Working Capital Term Loan Agreement with The Scotts Miracle-Gro Company.
The funding will provide general working capital to support anticipated growth
as the Company expands its retail and its direct-to-consumer sales channels. The
proceeds will be made available as needed in increments of $500,000 not to
exceed $7.5 million with a due date of June 30, 2020. Interest will be charged
at the stated rate of 10% and will be paid quarterly in arrears on each of
September 30, 2020, December 30, 2020, March 31, 2021 and June 30, 2021.
As previously reported in a Current Report on Form 8-K filed with the SEC on
April 23, 2013, the Company entered into a strategic alliance with The Scotts
Miracle-Gro Company in which, among other things, the Company issued: (i)
2,649,007 shares of Series B Convertible Preferred Stock to a wholly owned
subsidiary of Scotts Miracle-Gro; and (ii) a warrant to purchase shares of the
Company's common stock for an aggregate purchase price of $4.0 million. The
Term Loan was approved by members of the Company's Board of Directors.
The foregoing description of the $7.5 Million Term Loan Agreement does not
purport to be complete, and is qualified in its entirety by reference to the
full text of the agreement, which is filed as Exhibit 10.1 hereto and are
incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
Exhibits. The following exhibit is furnished with this Form 8-K:
Exhibit Number Description
10.1 Term Loan and Security Agreement
Portions of this report may constitute "forward-looking statements" as defined
by federal law. Although the Company believes any such statements are based on
reasonable assumptions, there is no assurance that actual outcomes will not be
materially different. Any such statements are made in reliance on the "safe
harbor" protections provided under the Private Securities Litigation Reform Act
of 1995. Additional information about issues that could lead to material changes
in the Company's performance is contained in the Company's filings with the
Securities and Exchange Commission.
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