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Aerogrow International, Inc.(TBA)

 
123Jump Rating:   Underwriters: Keating Securities
     
Status:  
 
Address: 900 28th Street, Suite 201
Boulder,
FiledDate:
  Boulder,
   
  CO 80303
Filed Price Range ($):
       
Telephone: 303-444-7755 Filed Offer Amount ($ Million): $0.00
       
Fax: Shares Offered (Millions): 1,666,666
       
Websites: www.aerogrow.com Shares Outstanding (Millions): 6,675,610
       
Management: W. Bissonnette, CEO
IPO Date:
     
  Final Offer Price ($): $0.00
       
Industry: The Company’s principal business is researching, developing and marketing advanced indoor aeroponic garden systems designed and priced to appeal to the gardening, cooking and small kitchen appliance, healthy eating and home and office décor markets worldwide. The Company’s principal products are "kitchen garden" indoor growing systems and proprietary seed kits that will allow consumers, with or without gardening experience, to easily grow to grow a variety of culinary herbs, including cilantro, chives, basil, dill, oregano, mint, cherry tomatoes, chili peppers, salad greens and flowers throughout the year. The Company’s "rainforest" nutrient delivery system combines its patent-pending technologies with features from several advanced hydroponic or aeroponic methodologies into a proprietary system designed to provide the benefits of accelerated aeroponic plant growth. The Company’s rainforest technology suspends plant roots into a 2 to 4 inch air chamber above an oxygenated nutrient solution. Nutrients are pumped from the nutrient reservoir to the base of each plant where a regulated flow of nutrients drips down through plant roots. The Company’s proprietary bio-grow seed pods include pre-implanted seeds, a bio-sponge growing medium, removable bio-dome covers and a grow basket to assist with the proper distribution of moisture. The Company’s seed pods must be used in its kitchen garden systems in order to grow plants. The Company implants its selected seeds in a bio-sponge growing medium principally developed for rapid germination and enhanced root growth. The bio-sponge helps facilitate and regulate oxygen, moisture and nutrition, and supports plant roots from germination through maturity and harvest. The Company’s bio-grow domes create a mini-greenhouse environment by covering the grow surface to create a near-100% humidity air chamber which is optimal for most plant germination and initial growth. The Company’s bio-grow seed pods will be packaged along with nutrients in its proprietary seed kits to be used exclusively in its kitchen garden systems. These seed kits currently include seeds for a variety of culinary herbs, including cilantro, chives, basil, dill, oregano, mint, cherry tomatoes, chili peppers, salad greens and flowers. In addition to pre-seeded pods, the Company also plans to allow consumers to purchase unseeded pods to give them the opportunity to grow their own seeds in its kitchen garden systems. The Company has developed two kitchen garden systems with different control systems. The Company’s microprocessor-based control panel will be available as an accessory for its basic kitchen garden system and is included as a standard feature on its deluxe kitchen garden system. This control panel includes an electronic nutrient and water reminder system and microprocessor-controlled lights that alert consumers to add water and nutrients when needed and help ensure that plants are properly fed and receive the proper lighting. Final Offer Size (Millions of Shares): 0.00
       
Employees: 21 Final Offer Amount ($ Million): $0.00
       
Competitors: S-1 Forms: 2007 S1-Form  download
     
   
       
     
     
     
       
 
- Avoid        - Value Gap        - Short-Term Growth        - Long-Term Growth        - Long-Term Value

Major Stock Holders   (Prior To Offering)

Name

Class A
Jerry L. Gutterman 2.40%
Randy Seffren 0.90%
Richard A. Kranitz 1.10%
W. Michael Bissonnette 19.60%
Wayne Harding 2.60%

Business Environment

Hydroponics is the science of growing plants in water instead of soil. Used commercially worldwide, hydroponics is considered an advanced and often preferred crop production method. Hydroponics is typically used inside greenhouses to give growers the ability to better regulate and control nutrient delivery, light, air, water, humidity, pests and temperature. Hydroponic growers benefit by producing crops faster and enjoying higher crop yields per acre than traditional soil-based growers.

Aeroponics is derived from hydroponics and occurs when plant roots are suspended in an air chamber and bathed at regular intervals with nutrient solution.

The 2002 National Gardening Survey conducted by the National Gardening Association states that gardening was America's number one hobby with more than 70 million active gardeners. In the United States in 2002 there were estimated to be 27 million vegetable gardeners with one out of every four households having a vegetable garden, over 15 million fresh herb gardeners and over 20 million flower gardeners.

Flowers are frequently used to brighten homes and offices around the world. It is difficult to readily grow flowers indoors due to a lack of sufficient light and growing knowledge. As a result, people often use cut flowers which are expensive, short-lived and require ongoing maintenance.

Company Strategy
A development stage company engaged in the business of developing, marketing and distributing advanced indoor aeroponic garden systems.

Product/Services Portfolio
The Company’s principal business is researching, developing and marketing advanced indoor aeroponic garden systems designed and priced to appeal to the gardening, cooking and small kitchen appliance, healthy eating and home and office décor markets worldwide.

The Company’s principal products are "kitchen garden" indoor growing systems and proprietary seed kits that will allow consumers, with or without gardening experience, to easily grow to grow a variety of culinary herbs, including cilantro, chives, basil, dill, oregano, mint, cherry tomatoes, chili peppers, salad greens and flowers throughout the year.

The Company’s "rainforest" nutrient delivery system combines its patent-pending technologies with features from several advanced hydroponic or aeroponic methodologies into a proprietary system designed to provide the benefits of accelerated aeroponic plant growth. The Company’s rainforest technology suspends plant roots into a 2 to 4 inch air chamber above an oxygenated nutrient solution. Nutrients are pumped from the nutrient reservoir to the base of each plant where a regulated flow of nutrients drips down through plant roots.

The Company’s proprietary bio-grow seed pods include pre-implanted seeds, a bio-sponge growing medium, removable bio-dome covers and a grow basket to assist with the proper distribution of moisture. The Company’s seed pods must be used in its kitchen garden systems in order to grow plants.

The Company implants its selected seeds in a bio-sponge growing medium principally developed for rapid germination and enhanced root growth. The bio-sponge helps facilitate and regulate oxygen, moisture and nutrition, and supports plant roots from germination through maturity and harvest. The Company’s bio-grow domes create a mini-greenhouse environment by covering the grow surface to create a near-100% humidity air chamber which is optimal for most plant germination and initial growth.

The Company’s bio-grow seed pods will be packaged along with nutrients in its proprietary seed kits to be used exclusively in its kitchen garden systems. These seed kits currently include seeds for a variety of culinary herbs, including cilantro, chives, basil, dill, oregano, mint, cherry tomatoes, chili peppers, salad greens and flowers. In addition to pre-seeded pods, the Company also plans to allow consumers to purchase unseeded pods to give them the opportunity to grow their own seeds in its kitchen garden systems.

The Company has developed two kitchen garden systems with different control systems. The Company’s microprocessor-based control panel will be available as an accessory for its basic kitchen garden system and is included as a standard feature on its deluxe kitchen garden system. This control panel includes an electronic nutrient and water reminder system and microprocessor-controlled lights that alert consumers to add water and nutrients when needed and help ensure that plants are properly fed and receive the proper lighting.

Investment Analysis
As of June 30, 2005, a cash balance was $830.4 thousand. This cash, along with the proceeds from the debt offering in July, August and September 2005, will be sufficient to meet the liquidity requirements through February 28, 2006.

From June 30, 2005, through September 30, 2005, were issued 1.6 thousand shares of common stock pursuant to an agreement with an employee at $5 per share for aggregate proceeds of $8 thousand and 18 thousand shares of common stock pursuant to the exercise of warrants for proceeds of $35 thousand.

Income Data 
Year Revenues Costs Oper Income Taxes Net Income EPS
2003 0.00 1157617 -1157617 0.00 -1169535 -0.419999999999999984456877655247808434069156646728515625
2004 0.00 2396608 -2396608 0.00 -2389044 -0.560000000000000053290705182007513940334320068359375
2005 0.00 1910102 -1910102 0.00 -1895729 -0.39000000000000001332267629550187848508358001708984375
*As of period Ended June 30, 2005

Balance Sheet Data

Year

Cash Acct Recv. Inventory Total Cur Assets Total Cur Liability PPE Total Assets LT Debt SH Equity
2003 632412 70000 0.00 704512 72252 25085 731597 0.00 659345
2004 1916842 41000 0.00 1963265 86547 30721 1998470 0.00 1911923
2005 830377 0.00 0.00 841704 433710 77601 949442 0.00 515732
*As of period Ended June 30, 2005

Cash Flow Summary

Year

Net Cash-Ops Net Cash-Inv Net Cash-Fin Net Change
2003 -812998 -27005 1332261 492258
2004 -1688367 -11556 2984353 1284430
2005 -1349397 -52615 315547 830377
*As of period Ended June 30, 2005
 

 

Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites.
Market data: BATS Exchange. Inc.

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