sc13da_aerogrow.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
(Amendment
No. 1)
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, Suite 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
7,392,856
(See Item 5)
|
8
|
SHARED
VOTING POWER
0
|
9
|
SOLE
DISPOSITIVE POWER
7,392,856
(See Item 5)
|
10
|
SHARED
DISPOSITIVE POWER
0
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,392,856
(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)
38.3%
|
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
7,392,856
(See Item 5)
|
8
|
SHARED
VOTING POWER
0
|
9
|
SOLE
DISPOSITIVE POWER
7,392,856
(See Item 5)
|
10
|
SHARED
DISPOSITIVE POWER
0
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,392,856
(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)
38.3%
|
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
7,392,856
(See Item 5)
|
8
|
SHARED
VOTING POWER
0
|
9
|
SOLE
DISPOSITIVE POWER
7,392,856
(See Item 5)
|
10
|
SHARED
DISPOSITIVE POWER
0
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,392,856
(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)
38.3%
|
14
|
TYPE
OF REPORTING PERSON
IN/HC
|
Explanatory
Note
This Amendment No. 1 amends the
original Schedule 13D (the “Original Schedule 13D) filed with the Securities and
Exchange Commission by Lazarus Partners, Lazarus Management and Justin B. Borus
(collectively, the “Reporting Persons”) on July 23, 2009. This
Amendment No. 1 is being filed as a result of new information disclosed in Items
3, 4, 5 and 6. This Amendment No. 1 amends and restates the Original
Schedule 13D filed by the Reporting Persons.
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 Partners”).
Lazarus Management Company LLC, a
Colorado limited liability company (“Lazarus Management”), is the investment
adviser and general partner of Lazarus Partners, and consequently may be deemed
to have voting control and investment discretion over securities owned by
Lazarus Partners. 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 Partners. Each of Lazarus Management and Mr. Borus disclaims
beneficial ownership of the securities set forth in this Schedule 13D, except to
the extent of its or his pecuniary interests therein.
The business address for the Reporting
Persons is c/o Lazarus Management Company LLC, 2401 E. 2nd
Avenue, Suite 600, Denver, Colorado 80206. Mr. Borus is a United States
citizen.
The principal business of Lazarus
Partners 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.
On June 30, 2009, 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 “Series A 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 Series 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 Series A 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
Series A Warrant to purchase 428 shares of Series A Stock.
On September 1, 2009, Lazarus
Partners entered into a Bridge Loan with the Issuer. In consideration
for the loan, Lazarus Partners was issued a five(5) year warrant to purchase
250,000 shares of common stock (“September Common Stock Warrant”) at an exercise
price of $0.25 per share.
On November 9, 2009, Lazarus
Partners entered into a Bridge Loan with the Issuer. In consideration
for the loan, Lazarus Partners was issued a five (5) year warrant to purchase
200,000 shares of common stock (“November Common Stock Warrant”) at an exercise
price of $0.25 per share.
The Reporting Persons also hold
previously purchased shares of the Issuer’s common stock that were acquire by
personal funds.
Item
4. Purpose of Transaction.
(a)-(i) The purpose of the
June 30, 2009 transaction was to acquire the Series A Stock and Series A
Warrant. Each Series A Warrant has a term of five (5) years with an
exercise price of $1,250 per share. The Reporting Persons may
exercise the Series A 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 Series A 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).
The purpose of the September 1,
2009 transaction was for Lazarus Partners to provide a short-term loan to the
Issuer. The Issuer will repay the principal amount of $250,000,
together with accrued interest from the date of disbursement at the rate of 15%
per annum. The principal and interest are due on November 16,
2009.
The purpose of the November 9,
2009 transaction was for Lazarus Partners to provide a short-term loan to the
Issuer. The Issuer will repay the principal amount of $200,000,
together with accrued interest from the date of disbursement at the rate of 20%
per annum. The principal and interest are due on February 1,
2010.
Item
5. Interest in Securities of the
Issuer.
(a) As of the date hereof,
Lazarus Partners may be deemed to be the beneficial owner of an aggregate of
7,392,856 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 Series A Warrant, 250,000 shares underlying the September Common
Stock Warrant, 200,000 shares underlying the November Common Stock Warrant and
502,856 shares held directly. The aggregate number of shares of
common stock of the Issuer the Reporting Persons beneficially own represents
38.3% of the Issuer’s outstanding common stock after exercise of the warrants
and conversion of the Series A Stock based on
12,398,249
shares of common stock outstanding as of October 31, 2009 as reported in
the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission on November 19, 2009.
Lazarus Management, as the investment
adviser and general partner of Lazarus Partners, may be deemed to have voting
control and investment discretion over securities owned by Lazarus
Partners.
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 Partners.
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 Partners.
(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 Partners entered into a privately-negotiated agreement with the Issuer
pursuant to which it acquired 1,147 shares of Series A Stock and a Series A
Warrant to purchase 574 shares of Series A Stock. Lazarus Partners
paid $1,000 per share of Series A Stock and received a Series 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
Partners distributed a portion of these securities to a former limited partner
and as a result, holds 860 shares of Series A Stock and a Series A Warrant to
purchase 428 shares of Series A Stock.
On September 1, 2009, for value
received, the Issuer issued a Promissory Note to Lazarus Partners. In
consideration for the loan, Lazarus Partners was issued a five (5) year warrant
to purchase 250,000 shares of common stock at an exercise price of $0.25 per
share.
On November 9, 2009, for value
received, the Issuer issued a promissory note to Lazarus Partners. In
consideration for the loan, Lazarus Partners was issued a five (5) year warrant
to purchase 200,000 shares of common stock at an exercise price of $0.25 per
share.
(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 Partners 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).
Lazarus Partners received a Promissory
Note from the Issuer in return for a loan made to the Issuer by Lazarus
Partners. The Issuer will repay the principal amount of $250,000,
together with accrued interest from the date of disbursement at the rate of 15%
per annum. The principal and interest are due on November 16,
2009.
Lazarus
Partners received a Promissory Note from the Issuer in return for a loan made to
the Issuer by Lazarus Partners. The Issuer will repay the principal
amount of $200,000, together with accrued interest from the date of disbursement
at the rate of 20% per annum. The principal and interest are due on
February 1, 2010.
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:
|
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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).
|
|
|
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Exhibit C:
|
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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).
|
|
|
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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:
February 16, 2010
|
|
LAZARUS
INVESTMENT PARTNERS LLLP
By:
Lazarus Management Company LLC
its
general partner
|
|
|
Name: Justin
B. Borus
Title: Chief
Compliance Officer
|
|
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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:
February 16, 2010
|
|
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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