sc13d_aerogrow0609.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under
the Securities Exchange Act of 1934
AeroGrow
International, Inc.
|
(Name
of Issuer)
|
Common
Stock, par value $0.001 per share
|
(Title
of Class of Securities)
|
Justin
B. Borus
Lazarus
Investment Partners LLLP
c/o
Lazarus Management Company LLC
2401
E. 2nd
Avenue, #600
Denver,
CO 80206
(303)
302-9035
|
(Name,
Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
|
|
(Date
of event which requires filing of this
statement)
|
If
the filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because § 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the
following box o
..
SCHEDULE
13D
1
|
NAMES
OF REPORTING PERSONS.
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Lazarus
Investment Partners LLLP
56-2347695
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
o
(b)
o
|
3
|
SEC
USE ONLY
|
4
|
SOURCE
OF FUNDS
PF,
OO
|
5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
o
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Delaware
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE
VOTING POWER
6,942,856
(See Item 5)
|
8
|
SHARED
VOTING POWER
0
|
9
|
SOLE
DISPOSITIVE POWER
6,942,856
(See Item 5)
|
10
|
SHARED
DISPOSITIVE POWER
0
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,942,856
(See Item 5)
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
o
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.8%
|
14
|
TYPE
OF REPORTING PERSON
PN
|
SCHEDULE
13D
1
|
NAMES
OF REPORTING PERSONS.
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Lazarus
Management Company LLC
33-1042318
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
o
(b)
o
|
3
|
SEC
USE ONLY
|
4
|
SOURCE
OF FUNDS
PF,
OO
|
5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
o
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Colorado
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE
VOTING POWER
6,942,856
(See Item 5)
|
8
|
SHARED
VOTING POWER
0
|
9
|
SOLE
DISPOSITIVE POWER
6,942,856
(See Item 5)
|
10
|
SHARED
DISPOSITIVE POWER
0
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,942,856
(See Item 5)
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
o
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.8%
|
14
|
TYPE
OF REPORTING PERSON
IA
|
SCHEDULE
13D
1
|
NAMES
OF REPORTING PERSONS.
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Justin
B. Borus
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
o
(b)
o
|
3
|
SEC
USE ONLY
|
4
|
SOURCE
OF FUNDS
PF,
OO
|
5
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d)
OR 2(e)
o
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
United
States
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE
VOTING POWER
6,942,856
(See Item 5)
|
8
|
SHARED
VOTING POWER
0
|
9
|
SOLE
DISPOSITIVE POWER
6,942,856
(See Item 5)
|
10
|
SHARED
DISPOSITIVE POWER
0
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,942,856
(See Item 5)
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
o
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.8%
|
14
|
TYPE
OF REPORTING PERSON
IN/HC
|
Explanatory
Note
The Schedule 13G filed on
January 12, 2009 by Lazarus Investment Partners LLLP relating to the shares
of common stock, par value $0.001 per share of AeroGrow International, Inc. is
hereby amended on this Schedule 13D as set forth below.
Item
1. Security and Issuer.
(a) This statement on
Schedule 13D relates to the common stock of AeroGrow International, Inc., a
Nevada corporation (the “Issuer”).
(b) The principal executive
offices of the Issuer are located at 6075 Longbow Drive, Suite 200, Boulder,
Colorado, 80301.
Item
2. Identity and Background.
(a)-(c) and (f) This
statement is being filed by Lazarus Investment Partners LLLP, a Delaware limited
liability limited partnership (“Lazarus Partnership”).
Lazarus Management Company LLC, a
Colorado limited liability company (“Lazarus Management”), is the general
partner of Lazarus Partnership, and consequently may be deemed to have voting
control and investment discretion over securities owned by Lazarus Partnership.
Justin B. Borus (“Mr. Borus”) is the managing member of Lazarus Management. As a
result, Mr. Borus may be deemed to be the beneficial owner of any shares deemed
to be beneficially owned by Lazarus Management. The foregoing should not be
construed in and of itself as an admission by Lazarus Management or Mr. Borus as
to beneficial ownership of the shares owned by Lazarus Partnership.
The business address for the Reporting
Persons is c/o Lazarus Management Company LLC, 2401 E. 2nd Avenue,
#600, Denver, Colorado 80206. Mr. Borus is a United States
citizen.
The principal business of Lazarus
Partnership is investing in securities. The principal business of
Lazarus Management is providing investment advice. The principal
business of Mr. Borus is investment management.
(d) During the last five
years, none of the Reporting Persons have been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five
years, none of the Reporting Persons have been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of
such proceeding were or are subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, Federal or state securities laws or finding any violation with respect to
such laws.
Item
3. Source and Amount of Funds or Other
Consideration.
The Reporting Persons used a
combination of sources to purchase shares of the Issuer’s Series A Preferred
Stock (the “Series A Stock”) and a warrant to purchase shares of Series A Stock
(the “Warrant”). The Reporting Persons exchanged securities of the
Issuer held by the Reporting Persons that were valued by the Issuer at
approximately $497,000 and made a cash payment out of personal funds in the
amount of $650,000 for a total of 1,147 shares of Series A Stock and a Warrant
for 574 shares of Series A Stock. In connection with this transaction
and on the same date, the Reporting Persons distributed a portion of the Series
A Stock and Warrant then held to a former limited partner effective as of June
30, 2009. As a result, as of June 30, 2009, the Reporting Persons
hold 860 shares of Series A Stock and a Warrant to purchase 428 shares of Series
A Stock.
Item
4. Purpose of Transaction.
(a)-(i) The purpose of the
transaction was to acquire the Series A Stock and Warrant. Each
Warrant has a term of five (5) years with an exercise price of $1,250 per
share. The Reporting Persons may exercise the Warrant at any
time. At the election of the Reporting Persons, each share of Series
A Stock is convertible into 5,000 shares of the Issuer’s common stock, subject
to customary anti-dilution adjustments. The holders of the Series A
Stock, in aggregate, are entitled to appoint three (3) directors to the board of
directors of the Issuer. In connection with the transactions, the
Issuer amended its bylaws to render the Nevada control share statute
inapplicable to the Issuer. The holders of Series A Stock are
entitled to vote alongside the holders of the Issuer’s common stock on an
as-converted-to common stock basis. The holders of the Series A Stock
are entitled to receive preferential dividends in the amount of 8% per annum
when and if declared by the board of directors of the Issuer. The
holders of the Series A Stock, in aggregate and voting as a separate class, are
entitled to vote on certain corporate transactions of the Issuer including,
without limitation, any amendments to the Issuer’s bylaws or articles of
incorporation and the creation of any equity securities senior to the Series A
Stock. The description of the terms of the Series A Stock are
qualified in their entirety by reference to the Issuer’s Certificate of
Designations filed with the Nevada Secretary of State on June 29, 2009 (which is
included as Exhibit B to this Schedule 13D and is incorporated by reference into
this Item 4). The description of the terms of the Warrant are
qualified in their entirety by reference to the Issuer’s Form of Series A
Preferred Stock Warrant (which is included as Exhibit C to this Schedule 13D and
is incorporated by reference into this Item 4).
Item
5. Interest in Securities of the
Issuer.
(a) As of the date hereof,
Lazarus Partnership may be deemed to be the beneficial owner of an aggregate of
6,942,856 shares of common stock, including shares of common stock issuable upon
conversion of the 860 shares of Series A Stock, 428 shares of Series A Stock
underlying the Warrant, and 502,856 shares held directly. The
aggregate number of shares of common stock of the Issuer the Reporting Persons
beneficially own represents 36.8% of the Issuer’s outstanding common stock after
exercise of the Warrant and conversion of the Series A Stock based on 12,425,249
shares of such common stock outstanding, 6,836 shares of Series A Stock
outstanding, and warrants to purchase 3,414 shares of Series A Stock
outstanding.
Lazarus Management, as the managing
partner of Lazarus Partnership, may be deemed to have voting control and
investment discretion over securities owned by Lazarus Partnership.
Mr. Borus, as the managing member of
Lazarus Management, may also be deemed to beneficially own the shares of common
stock beneficially owned by Lazarus Partnership.
The foregoing should not be construed
in and of itself as an admission by Lazarus Management or Mr. Borus as to
beneficial ownership of the shares owned by Lazarus Partnership.
(b) The Reporting Persons
have the sole power to vote or to direct the voting of all such shares described
in Item 5(a) above. The Reporting Persons have the sole power to
dispose or direct the disposition of all such shares described in Item 5(a)
above. The Reporting Persons do not have shared power to vote or to
direct the vote of any such shares described in Item 5(a) above, and do not have
shared power to dispose or direct the disposition of any such shares described
in Item 5(a) above.
(c) On June 30, 2009,
Lazarus Partnership entered into a privately-negotiated agreement with the
Issuer pursuant to which it acquired 1,147 shares of Series A Stock and a
Warrant to purchase 574 shares of Series A Stock. Lazarus Partnership
paid $1,000 per share of Series A Stock and received a warrant to purchase 0.5
shares of Series A Stock, exercisable at $1,250 per share for each share of
Series A Stock purchased. On June 30, 2009, Lazarus Partnership
distributed a portion of these securities to a former limited partner and as a
result, holds 860 shares of Series A Stock and a Warrant to purchase 428 shares
of Series A Stock.
(d) The holders of the
Series A Stock are entitled to receive preferential dividends in the amount of
8% per annum when and if declared by the board of directors of the
Issuer.
(e) Not
applicable.
Item
6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Lazarus Partnership and the Issuer
entered into an Investor Rights Agreement on June 30, 2009 (the “Investor
Rights Agreement”), pursuant to which, among other things, the Issuer agreed to
grant certain registration rights on the shares of common stock underlying the
Series A Stock to Lazarus Partnership. The description of the terms
of the Investor Rights Agreement are qualified in their entirety by reference to
the Investor Rights Agreement (which is included as Exhibit D to this Schedule
13D and is incorporated by reference into this Item 6).
Item
7. Material to Be Filed as
Exhibits.
Exhibit A:
|
|
Joint
Filing Agreement, dated as of July 23, 2009, by and among Lazarus
Investment Partners LLLP, Lazarus Management Company LLC and Justin B.
Borus.
|
|
|
|
Exhibit B:
|
|
Certificate
of Designations (Incorporated by reference to Exhibit 3.7 to the Issuer’s
Annual Report on Form 10-K for the year ended March 31,
2009).
|
|
|
|
Exhibit C:
|
|
Form
of Series A Preferred Stock Warrant (Incorporated by reference to Exhibit
4.19 to the Issuer’s Annual Report on Form 10-K for the year ended March
31, 2009).
|
|
|
|
Exhibit D:
|
|
Investor
Rights Agreement (Incorporated by reference to Exhibit 4.20 to the
Issuer’s Annual Report on Form 10-K for the year ended March 31,
2009).
|
SIGNATURE
After reasonable inquiry and to the
best of my knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
Dated:
July 23, 2009
|
|
LAZARUS
INVESTMENT PARTNERS LLLP
By:
Lazarus Management Company LLC
its
general partner
|
|
|
Name: Justin
B. Borus
Title: Chief
Compliance Officer
|
|
|
LAZARUS
MANAGEMENT COMPANY LLC
|
|
|
Name: Justin
B. Borus
Title: Chief
Compliance Officer
|
|
|
|
Justin
B.
Borus
|
EXHIBIT
A
JOINT
FILING AGREEMENT
This will confirm the agreement by and
among the undersigned that the Schedule 13D filed with the Securities and
Exchange Commission on or about the date hereof with respect to the beneficial
ownership by the undersigned of the common stock, par value $0.001 per share, of
AeroGrow International, Inc., a Nevada corporation, is being filed, and all
amendments thereto will be filed, on behalf of each of the persons and entities
named below in accordance with Rule 13d-1(k) under the Securities Exchange Act
of 1934, as amended. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Dated:
July 23, 2009
|
|
LAZARUS
INVESTMENT PARTNERS LLLP
By:
Lazarus Management Company LLC
its
general partner
|
|
|
Name: Justin
B. Borus
Title: Chief
Compliance Officer
|
|
|
LAZARUS
MANAGEMENT COMPANY LLC
|
|
|
Name: Justin
B. Borus
Title: Chief
Compliance Officer
|
|
|
|
Justin
B.
Borus
|
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