8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report  (Date of earliest event reported): June 28, 2018

AeroGrow International, Inc.

(Exact name of registrant as specified in charter)

Delaware

(State or other jurisdiction of incorporation)

001-33531	46-0510685
(Commission File Number)	(IRS Employee Identification No.)

6075 Longbow Drive, Suite 200, Boulder, Colorado	80301
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 444-7755

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter)

Emerging growth company ☐.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02  Results of Operations and Financial Condition.

On June 28, 2018, AeroGrow International, Inc. (the “Company”) issued a press release announcing the Company’s operational results for the fiscal year ended March 31, 2018.  A copy of the press release announcing the Company’s operational results for the fiscal year ended March 31, 2018, is furnished as Exhibit 99.1 to this report.

The information contained in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or the Securities Act of 1933, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

Item 9.01  Financial Statements and Exhibits.

Exhibits.  The following exhibit is furnished with this Form 8-K:

Exhibit Number	Description
99.1	Press Release Issued by AeroGrow International, Inc. on June 28, 2018.

Portions of this report may constitute “forward-looking statements” as defined by federal law. Although the Company believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the “safe harbor” protections provided under the Private Securities Litigation Reform Act of 1995. Additional information about issues that could lead to material changes in the Company’s performance is contained in the Company’s filings with the Securities and Exchange Commission.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AeroGrow International, Inc.
	(Registrant)
Date: June 28, 2018	By:	/s/ Grey H. Gibbs
		Grey H. Gibbs Principal Accounting Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release Issued by AeroGrow International, Inc. on June 28, 2018.

EX-99.1

Exhibit 99.1

AeroGrow Reports Results for the Full Fiscal Year Ended March 31, 2018

· Full Year Sales up 37% to $32.3 million

· Operating Loss of $448K

· Continued Success with Amazon, Bed, Bath & Beyond, Others

· Successful New Launches with Key National Retailers Including Macy’s and Kohl’s

· Highly Successful New Product Launches, More Planned for FY 2019

Boulder, CO - (June 28, 2018) - AeroGrow International, Inc. (OTCQB: AERO) (“AeroGrow” or the “Company”), the manufacturer and distributor of AeroGardens - the world’s leading family of In-Home Garden Systems™ – announced results for the fiscal year (FY) ended March 31, 2018.

For the year ended March 31, 2018 the Company recorded total revenue of $32.3 million, an increase of 37% over the prior year.   Operating Loss for the full year was $448K up slightly from the prior year primarily due to increased investments in marketing and R&D.

“I am very pleased to report our Fiscal Year 2018 results,” said President and CEO J. Michael Wolfe.  “With sales up 37%, increased channels of distribution and several successful product launches, I believe our FY 2018 continued to demonstrate the exceptional progress we are making.  Our balance sheet was also strong, which as of March 31, 2018 showed no debt, over $7.5 million of cash on hand, over $4.3 million in good Accounts Receivables and plenty of inventory.

“For the five year period since the Scotts Miracle-Gro Company took an ownership position in our company, we have achieved a compound annual growth rate of 35%.  Fiscal Year 2018 accelerated to 37% as we continued to broaden our brand, our product offerings and our channels of distribution.  I believe that our growth rate accelerating off of an ever-increasing base is a very encouraging sign for the health and future of our business.

“Our focus this past year was to continue the growth in our highly successful on-line channels while building on our successful distribution with prominent national retailers.  The results were exceptional as we achieved 35% growth on our Amazon platforms and an impressive + 70% growth in our portfolio of retail companies – including continued success at Bed, Bath & Beyond and Sur La Table, and successful launches at Kohl’s and Macy’s.  Not only are we registering good in-store results, but our on-line performance at these retailers has been very strong as well.

 “Our Direct-to-Consumer business also grew steadily in FY 2018 and we continued our successful testing in Europe – with encouraging results on the Amazon platforms in the UK, France, Germany, Spain and Italy.  We also had a successful retail test in the UK with The Steamer Cookshops chain of culinary stores, selling out our entire inventory in just a few weeks.

“It’s also worth noting that sales of our Seed Pod Kits continue to show considerable strength with Seed Pod-related sales accelerating to 42% growth YoY in FY 2018, up from 32% growth the prior year.  This is a critical measure of our business and an indication of continued usage and engagement of the product.  We’ve also seen continued strong seed pod sales early in our FY 2019, which began on April 1.  

“The new products we launched in the past year were extremely well received. The big winner was the AeroGarden Farm, our most advanced indoor garden ever with 24 pods, automatically-adjustable 120 watts of LED grow lights, and 24 inches of growing height – offering our biggest and best growing experience yet.  Look for us to continue to be aggressive in bringing new and innovative products to market – with several significant launches planned for this fall.

“In Amazon and our Direct-to-Consumer business, we have two very well-established channels of distribution that have continued to grow.  In addition, we’ve now proven that we can be successful in-store, a highly scalable distribution channel that can drive considerable growth in the coming years.  We will also look to expand upon the very promising start to our international distribution efforts by growing our sales on the Amazon platforms in Europe.

“All of this is against the backdrop of our product line becoming increasingly well positioned in the marketplace – smart gardens, indoor gardening and hydroponic gardening all appear to be trending significantly upward, and we are uniquely qualified to address each of these major trends. We’re also working on some very exciting new innovations that we’ll outline in more detail in our upcoming communications.   When you combine our sales momentum with a strong balance sheet, expanding distribution, and the continued innovation of our product line, I believe we are well positioned for FY 2019 and beyond.”

Forward-Looking Statements

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements by J. Michael Wolfe and/or the Company, statements regarding growth of the AeroGarden product line, ability to raise capital, optimism related to the business, expanding sales, market acceptance of developments and enhancements to our product line, improved margins and profitability, and other statements in this press release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company’s business. Words such as expects, anticipates, intends, plans, believes, sees, estimates and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict. Actual results could vary materially from the description contained herein due to many factors including continued market acceptance of the Company’s products or the need to raise additional capital. In addition, actual results could vary materially based on changes or slower growth in the indoor garden market; the potential inability to realize expected benefits and synergies; domestic and international business and economic conditions; changes in customer demand or ordering patterns; changes in the competitive environment including pricing pressures or technological changes; technological advances; shortages of manufacturing capacity; future production variables impacting excess inventory and other risk factors listed from time to time in the Company’s Securities and Exchange Commission (SEC) filings, including in “Item 1A Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017. The forward-looking statements contained in this press release speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release.

Additional detailed information concerning a number of the important factors that could cause actual results to differ materially from the forward-looking information contained in this release is readily available in the Company’s publicly filed quarterly, annual and other reports. The Company disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.

AEROGROW INTERNATIONAL, INC.

BALANCE SHEETS

	March 31,			March 31,
	2018			2017
(in thousands, except share and per share data)
ASSETS
Current assets
Cash and cash equivalents	$	7,482		$	8,804
Restricted cash		15			15
Accounts receivable, net of allowance for doubtful accounts of $39 and $20 at March 31, 2018 and 2017, respectively		4,296			2,484
Other receivables		281			258
Inventory, net		5,047			2,921
Prepaid expenses and other		493			511
Total current assets		17,614			14,993
Property and equipment and intangible assets, net of accumulated depreciation of $4,386 and $4,020 at March 31, 2018 and 2017, respectively		514			415
Deposits		39			106
Total assets	$	18,167		$	15,514
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	2,748		$	1,853
Accrued expenses		2,231			1,520
Customer deposits		163			106
Debt associated with sale of intellectual property		80			117
Total current liabilities		5,222			3,596
Long term liabilities
Capital lease liability		12			19
Other liability		190			-
Total liabilities		5,424			3,615
Commitments and contingencies (Note 7)
Stockholders’ equity
Preferred stock, $.001 par value, 20,000,000 shares authorized, 0 issued and outstanding at March 31, 2018 and 2017, respectively		-			-
Common stock, $.001 par value, 750,000,000 shares authorized, 34,328,036 and 33,477,287 shares issued and outstanding at March 31, 2018 and 2017, respectively		34			33
Additional paid-in capital		140,817			138,757
Stock dividend to be distributed		-			2,595
Accumulated deficit		(128,108	)		(129,486	)
Total stockholders’ equity		12,743			11,899
Total liabilities and stockholders’ equity	$	18,167		$	15,514

AEROGROW INTERNATIONAL, INC.

STATEMENTS OF OPERATIONS

	Years ended March 31,
	2018			2017
(in thousands, except per share data)
Net revenue	$	32,298		$	23,609
Cost of revenue		21,598			15,044
Gross profit		10,700			8,565
Operating expenses
Research and development		558			392
Sales and marketing		8,071			6,125
General and administrative		2,519			2,394
Total operating expenses		11,148			8,911
Loss from operations		(448	)		(346	)
Other income (expense), net
Fair value changes in derivative warrant liability		-			(2,108	)
Interest expense – related party		(21	)		(108	)
Other income (expense), net		27			(36	)
Total other income (expense), net		6			(2,252	)
Net loss	$	(442	)	$	(2,598	)
Change in fair value of stock to be distributed for Scotts Miracle-Gro transactions		534			(2,167	)
Net income (loss) attributable to common shareholders	$	92		$	(4,765	)
Net loss per common share, basic and diluted	$	0.00		$	(0.31	)
Weighted average number of common shares outstanding, basic		31,128			15,547
Weighted average number of common shares outstanding, diluted		31,212			15,547

About AeroGrow International, Inc.

Headquartered in Boulder, Colorado, AeroGrow International, Inc. is the leader in the rapidly growing indoor gardening category. AeroGardens allow anyone to grow farmer’s market fresh herbs, salad greens, tomatoes, chili peppers, flowers and more, indoors, year-round, so simply and easily that no green thumb is required. With an AeroGarden…you can grow anything! In April 2013, AeroGrow entered into a strategic partnership with Scotts Miracle-Gro to continue to expand the indoor gardening market. For more information, visit http://www.aerogrow.com.

Investor Relations: 

Grey Gibbs

Senior Vice President of Finance and Accounting

grey@aerogrow.com

303-444-7755