(Photo Credit – Thomas Healy)
On Sept. 13, AeroGrow International, Inc. (OTC:AERO) entered a $2 million Term Loan Agreement with Scotts Miracle-Gro Company (NYSE:SMG), as announced via a recent 8-K filing with the SEC. An infusion of capital could prove a major asset for this biotech stock, so it’s worth knowing more about them.
The funding will provide general working capital to support anticipated growth as AeroGrow expands its retail and its direct-to-consumer sales channels for its product lines. AeroGrow is the manufacturer and distributor of the world’s most popular counter-top indoor gardening systems – the AeroGarden. These systems allow people to grow everything from herbs to herb. As such, they’ve taken off in popularity and have become a major growth driver for both AeroGrow and Scotts.
The proceeds of the loan will be made available as needed in increments of $500,000 not to exceed $2 million with a due date of March 30. Interest will be charged at the stated rate of 10% and will be paid quarterly in arrears on Sept. 29, Dec. 30, and March 30.
As previously reported in a Form 8-K filed with the SEC on April 23, 2013, AeroGrow entered into a strategic alliance with The Scotts Miracle-Gro Company in which, among other things, the AERO issued 2,649,007 shares of Series B Convertible Preferred Stock to a wholly owned subsidiary of Scotts Miracle-Gro. They also a warrant to purchase shares of the Company’s common stock for an aggregate purchase price of $4 million.
We’ll be watching to see if this loan leads to an increased growth rate for this biotech stock. Be sure to subscribe to our daily Growth Stock Network newsletter so you never miss an important update.