Q Advisors Represents AeroGrow in its $7.6M Recapitalization

BOULDER, CO, June 30, 2009 - AeroGrow International, Inc., makers of the AeroGarden® line of indoor gardening products, announced that it has successfully completed a $7.6 million recapitalization including the conversion of accounts payable to long-term debt, the amendment of terms of its senior secured revolving credit facility, and other fundraising as detailed in concurrent releases today.

The Company announced the conversion of $1.4 million in accounts payable from a leading manufacturer into a two-year debt instrument at 8% interest, maturing on June 30, 2011. At the same time, the Company announced an amendment to the terms of its senior secured revolving credit facility that allows AeroGrow to continue to access the debt facility for working capital needs on an ongoing basis.

"We started the recapitalization process in January, knowing that it would likely be difficult in the midst of a global financial crisis," said Jerry Perkins, CEO of AeroGrow. "We formed a special committee of the independent directors to manage the process and hired investment banking firm Q Advisors to assist with a capital raise. In the ensuing months we looked at a broad range of options, meeting with strategic investors, private funds and equity groups to raise funds on the best possible terms.

"The resulting recapitalization offers a blended solution that the special committee believes is in the best interests of all stakeholders. It brings together contributions from our Chairman of the Board, leading shareholders, the senior management team, and key lenders and vendors to infuse new funds and rework existing terms to give AeroGrow the working capital needed to move forward."

Additional details on the recapitalization can be found in a concurrent release issued today and in AeroGrow's 10K, which is expected to be filed this week.

"In the past year we've been challenged by the downturn in the economy, but have taken significant measures to reduce our overhead, restructure the balance sheet and continue to drive the company toward profitability," said Jack Walker, AeroGrow's Chairman of the Board. "AeroGrow has a truly differentiated product, with strong, proven demand, and, with the help of this recapitalization, I'm confident in the capability of the current management team to guide the Company through to profitability and continued growth. In fact, as a strong indicator of the confidence that we have in the Company and our prospects going forward, I, along with our senior management team, have combined to invest more than $4 million as part of this recapitalization, including $2.8 million in new capital and $1.3 million in converted obligations."