aerogrow-def14c_031510.htm
SCHEDULE
14C
(Rule
14c-101)
INFORMATION
REQUIRED IN INFORMATION STATEMENT
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c)
of the
Securities Exchange Act of 1934 (Amendment No. ______)
Check the
appropriate box:
o Preliminary
Information Statement
o Confidential, for
use of the Commission only (as permitted by Rule 14c-5(d)(2))
x Definitive
Information
Statement
AEROGROW
INTERNATIONAL, INC.
(Name of
Registrant as Specified in Its Charter)
Payment
of Filing Fee (Check the appropriate box):
x No Fee
Required.
o Fee computed on table
below per Exchange Act Rules 14c- 5(g) and 0-11.
1)
Title of each class of securities to which transaction
applies: Common Stock, par value $.001 per share
2)
Aggregate number of securities to which transaction
applies: _________
3)
Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4)
Proposed maximum aggregate value of
transaction: _____________
5)
Total Fee Paid. ____________
o Fee paid
previously with preliminary materials.
o Check box if
any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the Form or Schedule
and the date of its filing.
1)
Amount Previously Paid: none.
2)
Form, Schedule or Registration Statement No.: 14C
3)
Filing Party: AeroGrow International, Inc.
4)
Date Filed: March 4, 2010
AEROGROW
INTERNATIONAL, INC.
6075
Longbow Drive, Suite 200,
Boulder,
Colorado 80301
(303)
444-7755
Dear
Stockholder:
We
are furnishing this Information Statement to the holders of the Common Stock of
AeroGrow International, Inc., a Nevada corporation (the "Company"), in
connection with the determination of our Board of Directors that it is in the
best interest of the Company and our shareholders to increase our authorized
shares from 75,000,000 shares of common stock to 500,000,000 shares of common
stock (the “Share Increase”). Our authorized capital of 20,000,000
shares of preferred stock will remain unchanged. The increase in
authorized common stock will be effected by an amendment to our Articles of
Incorporation, as amended. As permitted by Nevada law and our
Articles of Incorporation, as amended, the Company has received a written
consent from the majority Shareholders of the Company approving the Share
Increase.
The
Share Increase described in this Information Statement will not become effective
until at least 20 calendar days following the date of mailing of this
Information Statement to our Shareholders.
SHAREHOLDERS
ARE NOT BEING ASKED FOR PROXIES TO VOTE THEIR SHARES WITH RESPECT TO THE
INCREASE IN SHARE AUTHORIZATION. NO PROXY CARD HAS BEEN ENCLOSED WITH THIS
INFORMATION STATEMENT AND NO MEETING OF SHAREHOLDERS WILL BE HELD TO CONSIDER
THE SHARE INCREASE.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
This
Information Statement is being provided to you pursuant to Rule 14c-2 under the
Securities Exchange Act of 1934, as amended. It contains a description of the
Share Increase, as well as summary information regarding the transactions
covered by the Information Statement. We encourage you to read the Information
Statement thoroughly. You may also obtain information about us from publicly
available documents filed with the Securities and Exchange Commission. We may
provide only one copy of the Information Statement to Shareholders who share an
address, unless we have received instructions otherwise. If you share an
address, your household has received only one copy of this Information Statement
and you wish to receive another copy, please contact our corporate secretary at
the address or telephone number above. If you have received multiple copies and
only wish to receive one copy of our SEC materials, you also may contact us at
the address and phone number above.
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Very
truly yours,
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/s/ Jack
J.
Walker
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Jack
J. Walker
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Chairman
and Chief Executive Officer
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AEROGROW
INTERNATIONAL, INC.
INFORMATION
STATEMENT
INFORMATION
STATEMENT
AEROGROW
INTERNATIONAL, INC.
6075
Longbow Drive, Suite 200,
Boulder,
Colorado 80301
(303)
444-7755
This
Information Statement is being furnished to the Shareholders of AeroGrow
International, Inc., a Nevada corporation (the "Company"), in connection with
the prior approval by our Board of Directors and the approval by written consent
of the majority Shareholders of the Company of the increase in our authorized
shares from 75,000,000 shares of common stock to 500,000,000 shares of common
stock (the “Share Increase”). Our authorized capital of 20,000,000
shares of preferred stock will remain unchanged. The increase in
authorized common stock will be effected by an amendment to our Articles of
Incorporation, as amended, as permitted by Nevada law and our Articles of
Incorporation, as amended, the Company has received a written consent from the
majority Shareholders of the Company approving the Share Increase.
The
Board of Directors believes that consummation of the Share Increase is in the
best interests of the Company and its Shareholders. Accordingly, on March 3,
2010, the Board unanimously approved the Share Increase and directed that it be
submitted for stockholder approval.
Under
Nevada law and our Articles of Incorporation, as amended, the affirmative vote
of a majority of the votes entitled to be cast by holders of all shares of the
Company's Common Stock, par value $.001 per share ("Common Stock"), outstanding
as of the close of business on March 5, 2010, is required to approve the Share
Increase. Under our Articles of Incorporation, as amended, each share of Common
Stock is entitled to one vote per share. As of March 3, 2010, there were
outstanding 12,398,249 shares of Common Stock and 7,586 shares of Series A
Preferred Stock, representing a total of 12,398,249 votes of Common Stock and
37,930,000 votes of Series A Preferred Stock. As permitted by the Nevada Revised
Statutes, on March 3, 2010, the Company received a written consent in lieu of a
meeting of Shareholders from holders of 890,929 shares of our common stock and
shareholders owning an aggregate of 5,369 shares of our Series A Preferred Stock
representing 55.11% of the total voting rights of the Company approving the
Share Increase.
SHAREHOLDERS
ARE NOT BEING ASKED FOR PROXIES TO VOTE THEIR SHARES WITH RESPECT TO THE SHARE
INCREASE. NO PROXY CARD HAS BEEN ENCLOSED WITH THIS INFORMATION STATEMENT AND NO
MEETING OF SHAREHOLDERS WILL BE HELD TO CONSIDER THE SHARE
INCREASE.
The
Share Increase will not become effective until at least 20 calendar days
following the date of mailing of this Information Statement to our
Shareholders.
This
Information Statement is furnished for the purposes of informing Shareholders,
in the manner required under the Securities Exchange Act of 1934, as amended, of
the Share Increase before it is consummated. This Information Statement is first
being mailed on or about March 16, 2010 to holders of record of Common Stock as
of the close of business on March 5, 2010.
This
Information Statement is being furnished to the Shareholders of AeroGrow
International, Inc., a Nevada corporation, in connection with the prior approval
by our Board of Directors, and the approval by written consent of a majority of
our Shareholders, for the Share Increase. Throughout this Information Statement,
we shall refer to the Share Increase as the “Shareholder Action.” The terms
"we," "our," and the "Company" in this Information Statement refer to AeroGrow
International, Inc. References to "you" are to the Shareholders of
AeroGrow International, Inc.
A NOTE
ABOUT FORWARD-LOOKING STATEMENTS
This
Information Statement contains certain forward-looking statements, including
statements regarding our "expectations," "beliefs," "goals," "hopes,"
"strategies," and the like. We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of invoking those safe harbor provisions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors that are subject to change at any time and from time to
time and that could cause our actual results, performance or achievements to
differ materially from our expectations of future results, performance or
achievements expressed or implied by such forward-looking statements. Factors
that could cause actual results or developments to differ materially from those
described in or contemplated or implied by such forward-looking statements
include, without limitation, the risk that the assumptions upon which the
forward-looking statements are based ultimately may prove to be incorrect or
incomplete, as well as other risks and uncertainties that are described in the
Company's filings with the Securities and Exchange Commission. Although we
believe that the expectations reflected in our forward-looking statements are
reasonable, we cannot guarantee future events or results. Except as may be
required under federal law, we undertake no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes
available or other events occur.
The
following information in question and answer format, summarizes many of the
material terms of the Company's proposed Shareholder
Action. For a complete description of the terms and conditions
of the Shareholder Action, you are advised to carefully read this entire
Information Statement and the other documents referred to herein.
What
Vote Is Required To Approve The Shareholder Action?
Approval
of the Shareholder Action requires the affirmative vote of the holders of not
less than a majority of the Company's outstanding common stock.
What
Constitutes A Majority Of The Company's Outstanding Common Stock?
On
March 3, 2010, the Company had 12,398,249 shares of Common Stock issued and
outstanding and 7,586 shares of Series A Preferred Stock issued and
outstanding. 6,199,125 constitutes a majority of the shares of Common
Stock issued and outstanding and 3,794 constitutes a majority of the shares of
Series A Preferred Stock issued and outstanding.
Who
Voted In Favor Of The Shareholder Action?
Shareholders
owning an aggregate of 890,929 shares of our common stock and shareholders
owning an aggregate of 5,369 shares of our Series A Preferred Stock voted in
favor of the Shareholder Action. Those shares combined represent 55.11% of the
voting power of common stock and Series A Preferred Stock outstanding. Those
shareholders consisted of Jack J. Walker, Lazarus Investment Partners LLLP,
Michael S. Barish, Jervis B. Perkins, J. Michael Wolfe; and H. MacGregor
Clarke. Such shareholders shall be referred to as the"
Majority Shareholders".
Will
The Shareholders That Voted In Favor Of The Shareholder Action Have Any Special
Interest in the Shareholder Action?
No.
None of the Majority Shareholders that voted in favor of the Shareholder Action
will have any interest in those Actions different than the interest of all
shareholders of the Company.
Why
Isn't The Company Holding A Shareholders Meeting To Vote On The Proposed
Shareholder Action?
In
order to lawfully close on the proposed Shareholder Action, Nevada law requires
that a majority of shares of Common Stock vote in favor of the proposed
Shareholder Action. The Shareholders voting in favor of the proposed Shareholder
Action represent 55.11% of the shares outstanding, or a majority of the
outstanding shares. Therefore, management concluded that because approving a
transaction by the written consent of Shareholders can be faster than
distributing a notice of meeting and proxy statement, and conducting a
Shareholders meeting, and in light of the fact that Company management wanted to
expedite the closing of the proposed Shareholder Action, management and the
Board of Directors decided not to conduct a meeting of Shareholders. Instead,
Shareholders owning approximately 55.11% of the shares signed a written consent
approving the Shareholder Action and the transactions contemplated
thereby.
What
Will Happen To The Company After The Shareholder Action?
Following
the Shareholder Action, we expect to continue to market and distribute our
products.
Why
is the Share Increase Being Undertaken?
The
Share Increase is being undertaken due to the fact that on a fully converted
basis, we already have issued and outstanding shares that nearly exhaust our
authorized capital. The increase in authorized shares will permit the
Board to issue additional shares without further shareholder approval to raise
additional capital or take advantage of future opportunities.
What
Rights Do Shareholders Have To Dissent From The Shareholder Action?
Company
Shareholders do not have dissenters’ rights or the right to seek the appraisal
of their shares under Nevada law.
What
Are The Income Tax Consequences Of The Shareholder Action?
There
will be no federal or state income tax consequences to our shareholders as a
result of the Shareholder Action.
Our
ability to undertake the Shareholder Action without a meeting of our
Shareholders is authorized by Section 78.320(2) of the Nevada Revised
Statutes. That section generally provides that a Nevada corporation
may substitute for action on a matter by its Shareholders at a meeting the
written consent of the holders of outstanding shares of capital stock holding at
least the minimum number of votes which would be necessary to authorize or take
the action at a meeting at which all shares entitled to vote on the matter are
present and voted. In accordance with this provision, we obtained the written
consent of the Majority Shareholders to the Shareholder Action. As a result of
the action of the Majority Shareholders, we are not soliciting proxies, and
there will be no further stockholder action on the Shareholder
Action.
Holders
of record of the Company's Common Stock are entitled to notice of the action
taken by written consent approving the Shareholder Action.
Under
Nevada law and our Articles of Incorporation, as amended, , the affirmative vote
of a majority of the votes entitled to be cast by holders of all shares of our
Common Stock outstanding as of the close of business on the Record Date, was
required to approve the Shareholder Action. Each holder of Common Stock was
entitled to one vote on each of the foregoing matters, for each share of Common
Stock held by such stockholder. As of March 3, 2010, there were outstanding
12,398,249 shares of Common Stock and 7,586 shares of Series A Preferred Stock,
representing a total of 12,398,249 votes of Common Stock and 37,930,000 votes of
Series A Preferred Stock. As of that date, the Majority
Shareholders held 890,929 shares of Common Stock and 5,369 shares of Series
A Preferred Stock and were entitled to cast a total of 27,735,929 votes, or
55.11% of the total votes entitled to be cast by all holders of our Common
Stock.
The
action by written consent approving the Shareholder Action was effective on
March 3, 2010.
Information
About the Company
AeroGrow
International, Inc. (“AeroGrow”) was formed as a Nevada corporation on March 25,
2002. AeroGrow merged with Wentworth I, Inc., a Delaware corporation on February
24, 2006, and AeroGrow was the surviving corporation.
After
more than three years of initial research and product development, we began
sales activities in March 2006. Since that time, we have significantly expanded
all aspects of our operations in order to take advantage of what we believe to
be an attractive market opportunity. We have developed direct sales
channels including web sales, direct television sales, including infomercials
and 60 and 120 second television commercials, and a direct mail catalogue
business with more than four million catalogues mailed in calendar
2009. During the 2009 holiday season, AeroGarden products were also
selling through approximately 4,500 retail storefronts in North America and more
than a dozen countries internationally. In the past two years we
have significantly expanded our product lines, and now offer 11 different indoor
garden models, more than 50 seed kits, and various gardening and kitchen
accessories.
Dissenters'
Rights
In
accordance with the Nevada General Corporation Law, our Shareholders do not have
dissenters' or appraisal rights in connection with the Shareholder
Action.
Certain
Federal Income Tax Consequences
The
Shareholder Action will not result in any impact on our Shareholders for federal
and state income tax purposes.
Government
Approvals
Except
for compliance with the applicable regulations of the Securities and Exchange
Commission in connection with this Information Statement and of the Nevada
Revised Statutes in connection with the Shareholder Action, we are not required
to comply with any federal or state regulatory requirements, and no federal or
state regulatory approvals are required in connection with the Shareholder
Action.
As of the
Record Date, there were outstanding 12,398,249 shares of Common Stock, $0.001
par value.
The table
shows the number of shares owned as of March 3, 2010 by our Directors and
Officers and shareholders owning more than 5% of outstanding common stock
and Series A Preferred Stock owned as of March 3, 2010. Each person
has sole voting and investment power with respect to the shares shown, except as
noted.
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Common Stock
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Series A Preferred Stock
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Name
of Beneficial Owner
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Number
of Common Shares Beneficially Owned (1)
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Number
of Common Shares Acquirable Within 60 Days (2)
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Percent
of Class
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Number
of Series A Preferred Shares Beneficially Owned (1)
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Number
of Series A Preferred Shares Acquirable Within 60 Days (2)
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Percent
of Class
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Percent
Total Voting Power (3)
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5%
Stockholders
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Jack
J. Walker (4)
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25,494,575 |
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25,270,167 |
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67.68 |
% |
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4,974 |
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1,324 |
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55.82 |
% |
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36.71 |
% |
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Lazarus
Investment Partners LLLP (5), (6)
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7,392,856 |
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6,890,000 |
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38.33 |
% |
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1,288 |
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428 |
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16.07 |
% |
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9.54 |
% |
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Mingkeda
Industries Co., Ltd. (6), (7)
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4,135,000 |
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4,125,000 |
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25.03 |
% |
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825 |
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275 |
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10.49 |
% |
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5.48 |
% |
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Alpha
Capital Anstalt (6)
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4,116,000 |
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4,100,000 |
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24.95 |
% |
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800 |
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400 |
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10.02 |
% |
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4.01 |
% |
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Michael
S. Barish (8)
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3,362,332 |
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3,209,167 |
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21.54 |
% |
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603 |
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201 |
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7.74 |
% |
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4.30 |
% |
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Kayue
Electric Company Ltd. (9)
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2,825,000 |
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2,825,000 |
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18.56 |
% |
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565 |
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188 |
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7.27 |
% |
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3.75 |
% |
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Thunder
Funding LLC (6)
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2,500,000 |
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2,500,000 |
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16.78 |
% |
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500 |
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500 |
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6.18 |
% |
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* |
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Jervis
B. Perkins
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2,008,000 |
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2,002,500 |
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13.94 |
% |
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303 |
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101 |
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3.94 |
% |
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2.02 |
% |
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Joint
Glory International Limited
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1,925,010 |
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1,862,505 |
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13.50 |
% |
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360 |
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180 |
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4.64 |
% |
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1.91 |
% |
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H.
Leigh Severance (6), (10)
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1,769,378 |
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1,650,000 |
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12.60 |
% |
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325 |
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108 |
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4.22 |
% |
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2.39 |
% |
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J.
Michael Wolfe
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1,650,000 |
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1,650,000 |
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11.75 |
% |
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270 |
|
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90 |
|
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3.52 |
% |
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1.79 |
% |
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Jerome
P. Lauffenburger (6), (11)
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1,161,334 |
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1,021,000 |
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8.65 |
% |
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|
199 |
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66 |
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2.60 |
% |
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1.60 |
% |
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Wildernest
Logistics Solutions Inc. (6), (12)
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870,000 |
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870,000 |
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6.54 |
% |
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|
174 |
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58 |
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2.52 |
% |
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1.24 |
% |
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Enable
Capital Management LLC and affiliated holders (13)
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840,000 |
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840,000 |
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6.35 |
% |
|
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* |
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* |
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* |
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* |
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Optimal
Joy Limited
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800,000 |
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800,000 |
|
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6.06 |
% |
|
|
160 |
|
|
|
80 |
|
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2.09 |
% |
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* |
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|
H.
MacGregor Clarke
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797,500 |
|
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|
792,500 |
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6.05 |
% |
|
|
112 |
|
|
|
37 |
|
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|
1.47 |
% |
|
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* |
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|
Directors
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|
Jack
J. Walker (4)
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25,494,575 |
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25,270,167 |
|
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67.68 |
% |
|
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4,974 |
|
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1,324 |
|
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55.82 |
% |
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36.71 |
% |
|
Michael
S. Barish (6)
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3,362,332 |
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|
3,209,167 |
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21.54 |
% |
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|
603 |
|
|
|
201 |
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7.74 |
% |
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|
4.30 |
% |
|
Jervis
B. Perkins
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2,008,000 |
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|
2,002,500 |
|
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13.94 |
% |
|
|
303 |
|
|
|
101 |
|
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3.94 |
% |
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|
2.02 |
% |
|
H.
MacGregor Clarke
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|
797,500 |
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|
792,500 |
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6.05 |
% |
|
|
112 |
|
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|
37 |
|
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1.47 |
% |
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* |
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|
Michael
D. Dingman, Jr.
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91,917 |
|
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91,917 |
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* |
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* |
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* |
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* |
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* |
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Named
Executive Officers
|
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|
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|
Jack
J. Walker (4)
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|
|
25,494,575 |
|
|
|
25,270,167 |
|
|
|
67.68 |
% |
|
|
4,974 |
|
|
|
1,324 |
|
|
|
55.82 |
% |
|
|
36.71 |
% |
|
J.
Michael Wolfe
|
|
|
1,650,000 |
|
|
|
1,650,000 |
|
|
|
11.75 |
% |
|
|
270 |
|
|
|
90 |
|
|
|
3.52 |
% |
|
|
1.79 |
% |
|
H.
MacGregor Clarke
|
|
|
797,500 |
|
|
|
792,500 |
|
|
|
6.05 |
% |
|
|
112 |
|
|
|
37 |
|
|
|
1.47 |
% |
|
|
* |
|
|
John
K. Thompson
|
|
|
184,184 |
|
|
|
157,500 |
|
|
|
1.47 |
% |
|
|
9 |
|
|
|
3 |
|
|
|
* |
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
AeroGrow Named Executive Officers and Directors as a Group
(7
Persons)
|
|
|
33,588,507 |
|
|
|
33,173,750 |
|
|
|
73.70 |
% |
|
|
6,271 |
|
|
|
1,756 |
|
|
|
67.13 |
% |
|
|
45.68 |
% |
* Less
than 1 percent.
|
(1)
|
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission, which include holding voting and investment power
with respect to the securities. Shares of common stock subject
to preferred stock, options or warrants currently exercisable, or
exercisable within 60 days, are deemed outstanding for computing the
percentage of the total number of shares beneficially owned by the
designated person, but are not deemed outstanding for computing the
percentage for any other person. Includes shares of common
stock issuable upon conversion of Series A Convertible Preferred
Stock.
|
|
(2)
|
The
number of shares acquirable within 60 days includes any preferred stock,
options or warrants currently exercisable or exercisable within the next
60 days. This number is included in the number of shares
beneficially owned. Includes shares of common stock issuable
upon conversion of Series A Convertible Preferred
Stock.
|
|
(3)
|
The
percent total voting power is based on the number of preferred shares and
common shares presently held that could be voted. It does not
include any exercisable options or warrants. Includes shares of
common stock issuable upon conversion of Series A Convertible Preferred
Stock.
|
|
(4)
|
Mr.
Walker’s beneficial ownership includes 475 shares of preferred stock and
warrants to purchase 273 shares of preferred stock that are held of record
by M&J Walker Charitable Remainder Trust, of which Mr. Walker is a
controlling person. Mr. Walker’s beneficial ownership
also includes 100 shares of preferred stock, warrants to purchase 50
shares of preferred stock, and 76,122 shares of common stock held of
record by March Trade & Finance, Inc. of which Mr. Walker is a
controlling person.
|
|
(5)
|
As
of November 9, 2009, based on information provided in an Amendment to
Schedule 13D as filed February 16, 2010. Lazarus Investment
Partners LLLP and its affiliates hold 860 shares of Series A preferred
stock, warrants to purchase 428 shares of Series A preferred stock,
502,856 shares of common stock, and warrants to purchase 450,000 shares of
common stock. Lazarus Investment Partners LLLP’s address is
2401 East 2nd Avenue, #600, Denver, CO 80206.
|
|
(6)
|
Beneficial
ownership is based on holdings known to the Company and may not include
all shares of common stock beneficially owned but held in street
name.
|
|
(7)
|
Mingkeda
Industries Co. Ltd.’s address is 1825 Renmin E Road, Heshan City,
Guangdong Province, China.
|
|
(8)
|
Mr.
Barish’s address is Lazarus Investment Partners LLLP, 2401 East 2nd
Avenue, #600, Denver, CO 80206.
|
|
(9)
|
Kayue
Electric Company Ltd.’s address is Unit C, 19/F, Dragon Centre, 79 Wing
Hong Street, Cheung Sha Wan, Kowloon, Hong Kong.
|
|
(10)
|
Mr.
Severance’s beneficial ownership includes 106 shares of preferred stock,
warrants to purchase an additional 53 shares of preferred stock, and
57,709 shares of common stock held of record by H. Leigh Severance, Inc.
Profit Sharing Plan and Trust, of which Mr. Severance is a controlling
person. Mr. Severance’s beneficial ownership also includes 5 shares of
preferred stock, warrants to purchase an additional 2 shares of preferred
stock, and 3,335 shares of common stock held of record by H. Leigh
Severance, Inc. Pension Plan and Trust, of which Mr. Severance is a
controlling person. Mr. Severance’s address is 14282 E. Caley
Ave., Aurora, CO 80016.
|
|
(11)
|
Mr.
Lauffenburger’s address is 2095 Heritage Place, Erie, CO
80516.
|
|
(12)
|
Wildernest
Logistics Solutions, Inc.’s address is 3500 N Windsor Dr., Suite 400,
Aurora, CO 80011.
|
|
(13)
|
As
of December 31, 2008, based on information provided in Schedule 13G as
filed February 11, 2009. According to these filings, Enable
Capital Management, LLC (“ECM”) is the beneficial owner of warrants to
purchase up to 840,000 shares of our common stock. ECM is
located at One Ferry Building, Suite 255, San Francisco, CA
94111. Mr. Mitchell S. Levine is the managing member and
majority owner of ECM. Mr. Levine’s address is One Ferry
Building, Suite 255, San Francisco, CA 94111. ECM acts as the
general partner and/or investment manager of Enable Growth Partners,
L.P. Enable Growth Partners L.P. is located at One Ferry
Building, Suite 255, San Francisco, CA
94111.
|
Amendment
to Articles of Incorporation, as amended, to increase the
The
Board of Directors has adopted a resolution proposing and declaring the
advisability of amending the Company’s Articles of Incorporation, as amended, to
increase the number of shares of common stock that the Company is authorized to
issue from 75,000,000 shares to 500,000,000 shares. The number of shares of
preferred stock that the Company is authorized to issue will remain unchanged at
20,000,000 shares. The proposed increase in the authorized number of shares of
common stock will give the Company additional shares to provide flexibility for
the future. In particular, the Company may require additional funding for its
operations and therefore may need the increased number of authorized shares to
raise additional equity capital. In addition, the additional authorized shares
may be used in the future for any other proper corporate purpose approved by the
Board, including corporate mergers or acquisitions, shares reserved under stock
option plans, stock dividends or splits, or other corporate
purposes. The terms of any shares of preferred stock that may be
issued in the future would be determined by the Board of Directors.
These
additional shares would be available for issuance from time to time for
corporate purposes such as raising additional capital, making strategic
acquisitions, entering into collaborative and licensing arrangements and
employee recruitment and retention. We believe that the availability of the
additional common shares will provide us with the flexibility to meet business
needs as they arise, to take advantage of favorable opportunities and to respond
to a changing corporate environment. Our future revenue may be insufficient to
support the expenses of our operations and the planned expansion of our
business. We therefore may need additional equity capital to finance our
operations. We may seek to obtain such equity capital through the issuance of
common stock or securities convertible into common stock. The issuance of
a substantial number of additional common shares may result in dilution of your
ownership interest in the Company.
Potential
Anti-Takeover Effect
The
proposed Share Increase is not part of any plan to adopt a series of amendments
having an anti-takeover effect, and the Company’s management presently does not
intend to propose anti-takeover measures in future proxy solicitations. Subject
to the limitations of Nevada law, it could be possible to use the additional
shares of common stock that would become available for issuance if the Share
Increase is approved to oppose a hostile takeover attempt or delay or prevent
changes of control of the Company or changes in or removal of our management,
including transactions that are favored by a majority of the independent
shareholders or in which the shareholders might otherwise receive a premium for
their shares over then-current market prices or benefit in some other manner.
For example, our board of directors could, without further shareholder approval,
strategically sell shares of our common stock in a private transaction to
purchasers who would oppose a takeover or favor our current board of directors.
The Share Increase is not being proposed in response to any effort, nor are we
aware of any effort, to accumulate shares of our common stock or obtain control
of the company.
Our
Articles and Bylaws contain certain provisions that could make it more difficult
for a third party to acquire a controlling interest without the consent of our
board. These provisions may delay or prevent a change of control, even if the
change of control would benefit the shareholders. In addition, the authority
granted to the board by our Articles to issue shares of preferred stock and fix
the designations, powers, preferences, rights, qualifications, limitations and
restrictions of the shares of any series so established could be used to delay
or prevent a change of control. None of these provisions would be affected by
the Share Increase.
Approval
Of The Board Of Directors and Shareholders
The
Board of Directors of the Company, after careful consideration, has approved the
Share Increase and has recommended that the Company's Shareholders vote for its
adoption. Effective March 3, 2010, Shareholders holding 55.11% of the Company's
shares of common stock outstanding executed a written consent in lieu of a
Shareholders meeting approving the Share Increase.
We
file annual, quarterly and current reports, proxy and information statements and
other information with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended. You may read and copy this
information at the Public Reference Section at the Securities and Exchange
Commission at 100 F Street, NE, Washington, DC 20549. You may obtain information
on the operation of the Public Reference Room by calling the SEC at 1- (202)
942-8088. The SEC maintains an Internet site that contains reports, proxy and
information statements, and other information about issuers that file
electronically with the SEC. The address of that site is http://www.sec.gov.
Our public filings are also available to the public from commercial document
retrieval services.
SIGNATURES
|
|
Respectfully
submitted,
|
|
|
|
|
|
AEROGROW
INTERNATIONAL, INC.
|
|
|
|
|
Date: March
16, 2010
|
By:
/s/ Jack J.
Walker
Jack
J. Walker, Chairman and Chief Executive
Officer
|