SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------- SCHEDULE 13D (RULE 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 2)(1) Hartville Group, Inc. --------------------- (Name of Issuer) Common Stock, $.001 Par Value ----------------------------- (Title of Class of Securities) 417287109 --------- (CUSIP Number) Richard O. Berner c/o John Lang, Inc. 485 Madison Avenue 23rd Floor New York, New York 10022 (212) 584-2100 -------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) February 14, 2007 ----------------- (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 of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box / /. NOTE. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. SEE Rule 13d-7 for other parties to whom copies are to be sent. (Continued on following pages) (Page 1 of 11 Pages) - ---------------- (1) The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, SEE the NOTES).- ---------------------- ---------------------- CUSIP No. 109696104 13D Page 2 of 11 Pages - ---------------------- ---------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) ISLANDIA, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 85,820,672 OWNED BY ----------------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON WITH - 0 - ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 85,820,672 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 85,820,672 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 69.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 3 of 11 Pages - ---------------------- ---------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) JOHN LANG, INC. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION NEW YORK - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 85,820,672 OWNED BY ----------------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON WITH - 0 - ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 85,820,672 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 85,820,672 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 69.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 4 of 11 Pages - ---------------------- ---------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) RICHARD BERNER - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 85,820,672 OWNED BY ----------------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON WITH - 0 - ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 85,820,672 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 85,820,672 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 69.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 5 of 11 Pages - ---------------------- ---------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) EDGAR BERNER - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 85,820,672 OWNED BY ----------------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON WITH - 0 - ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 85,820,672 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 85,820,672 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 69.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 6 of 11 Pages - ---------------------- ---------------------- ================================================================================ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) THOMAS BERNER - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / / (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) / / - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES BENEFICIALLY 85,820,672 OWNED BY ----------------------------------------------------------------- EACH 8 SHARED VOTING POWER REPORTING PERSON WITH - 0 - ----------------------------------------------------------------- 9 SOLE DISPOSITIVE POWER 85,820,672 ----------------------------------------------------------------- 10 SHARED DISPOSITIVE POWER - 0 - - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 85,820,672 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 69.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN ================================================================================ *SEE INSTRUCTIONS BEFORE FILLING OUT! - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 7 of 11 Pages - ---------------------- ---------------------- The following constitutes Amendment No. 2 ("Amendment No. 2") to the Schedule 13D initially filed by Islandia, L.P. This Amendment No. 2 amends the Schedule 13D as specifically set forth. Item 3 is hereby amended and restated to read as follows: Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The aggregate purchase price of the Company's securities owned by Islandia is $6,876,234.23. Such securities were acquired with partnership funds. Item 4 is hereby amended and restated to read as follows: Item 4. PURPOSE OF TRANSACTION. Pursuant to a Securities Purchase Agreement, dated as of November 26, 2004 (the "2004 Purchase Agreement"), Islandia purchased from the Company a convertible debenture due November 26, 2006 in the principal amount of $1,998,640 (the "2004 Debenture") and a warrant to purchase 888,284 shares of Common Stock (the "2004 Warrant"). Also on such date, Islandia purchased from the Company 1,766,053 shares of Common Stock. The 2004 Debenture was convertible into Common Stock at a conversion price equal to the lesser of $2.25 and 80% of the average of the five closing prices immediately prior to the conversion date, but in any event not less than $0.95. The 2004 Warrant has an exercise price of $0.95 and expires on November 26, 2009. The Company was obligated to register for resale the shares of Common Stock underlying the 2004 Debenture and the 2004 Warrant pursuant to the terms of a registration rights agreement (the "2004 Registration Rights Agreement"). Each of the 2004 Purchase Agreement, 2004 Debenture, 2004 Warrant and 2004 Registration Rights Agreement is filed as an exhibit hereto and incorporated herein by reference. Pursuant to an Interest Amendment and Waiver Agreement, effective as of September 30, 2005 (the "Amendment Agreement"), the Company issued to Islandia a convertible debenture due November 26, 2006 in the principal amount of $199,844.35 (the "2005 Debenture") and a warrant to purchase 999,222 shares of Common Stock (the "2005 Warrant"). The 2005 Debenture and 2005 Warrant were issued to Islandia in consideration for its waiver of certain defaults by the Company under the 2004 Registration Rights Agreement. The Amendment Agreement also adjusted the exercise price of the 2004 Warrant from $0.95 to $0.01. The 2005 Debenture was convertible into Common Stock at a conversion price equal to $0.20 per share. The 2005 Warrant has an exercise price of $0.01 and expires on September 30, 2010. Each of the Amendment Agreement, the 2005 Debenture and the 2005 Warrant is filed as an exhibit hereto and incorporated herein by reference. Pursuant to a Securities Purchase Agreement, dated as of July 31, 2006 (the "2006 Purchase Agreement"), Islandia purchased from the Company a convertible debenture due July 31, 2009 in the principal amount of $2,531,645.67 (the "2006 Debenture") and a warrant to purchase 25,316,456 shares of Common Stock (the "2006 Warrant"). The 2006 Debenture is convertible into Common Stock at a conversion price equal to $0.10 per share. The 2006 Warrant has an exercise price of $0.10 and expires on July 31, 2010. The Company is obligated to - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 8 of 11 Pages - ---------------------- ---------------------- register for resale the shares of Common Stock underlying the 2006 Debenture and the 2006 Warrant pursuant to the terms of a registration rights agreement (the "2006 Registration Rights Agreement"). Each of the 2006 Purchase Agreement, 2006 Debenture, 2006 Warrant and 2006 Registration Rights Agreement is filed as an exhibit hereto and incorporated herein by reference. Effective August 1, 2006, pursuant to a Conversion Agreement and Release (the "Conversion Agreement"), Islandia converted the aggregate outstanding principal amount of its 2004 Debenture and 2005 Debenture into an aggregate of 14,656,563 shares of Common Stock at a conversion price of $0.15 per share. Prior to the effective date of the Conversion Agreement, Islandia's ability to acquire beneficial ownership of the Common Stock was contractually capped at 4.9% of the outstanding Common Stock. The Conversion Agreement is filed as an exhibit hereto and incorporated herein by reference. Pursuant to a Securities Purchase Agreement, dated as of February 14, 2007 (the "2007 Purchase Agreement"), Islandia purchased from the Company a convertible debenture due February 14, 2010, in the principal amount of $1,000,000 (the "2007 Debenture") and a warrant to purchase 8,438,818 shares of Common Stock (the "2007 Warrant"). The 2007 Debenture is convertible into Common Stock at a conversion price equal to $0.15 per share. The 2007 Warrant has an exercise price of $0.15 and expires on February 14, 2011. The Company is obligated to register for resale the shares of Common Stock underlying the 2007 Debenture and the 2007 Warrant pursuant to the terms of a registration rights agreement (the "2007 Registration Rights Agreement"). Each of the 2007 Purchase Agreement, 2007 Debenture, 2007 Warrant and 2007 Registration Rights Agreement is filed as an exhibit hereto and incorporated herein by reference. Islandia acquired the above securities of the Company for investment purposes. No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D, except for the sale of shares of Common Stock in ordinary brokerage transactions. Item 5 is hereby amended and restated to read as follows: Item 5. INTEREST IN SECURITIES OF THE ISSUER. (a) The aggregate percentage of shares of Common Stock reported owned by each Reporting Person is based upon 124,197,941 shares outstanding, which is the 54,799,885 shares outstanding as reported in the Company's Quarterly Report on Form 10-QSB, as filed with the Securities and Exchange Commission on November 20, 2006, plus an aggregate of 69,398,056 shares of Common Stock issuable upon the exercise of the 2004 Warrant, 2005 Warrant, 2006 Warrant, 2006 Debenture, 2007 Warrant and 2007 Debenture. As of the close of business on February 20, 2007, Islandia beneficially owned 85,820,672 shares of Common Stock (consisting of (i) 16,422,616 shares of Common Stock (including 14,656,563 shares of Common Stock issued upon conversion of the 2004 Debenture and 2005 Debenture) owned by Islandia, (ii) 888,284 shares of Common Stock issuable upon exercise of the 2004 Warrant, (iii) 999,222 shares of Common Stock issuable upon exercise of the 2005 Warrant, (iv) 25,316,456 shares of Common Stock issuable upon conversion of the - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 9 of 11 Pages - ---------------------- ---------------------- 2006 Debenture, (v) 25,316,456 shares of Common Stock issuable upon exercise of the 2006 Warrant, (vi) 8,438,818 shares of Common Stock issuable upon conversion of the 2007 Debenture and (vii) 8,438,818 shares of Common Stock issuable upon conversion of the 2007 Warrant), constituting approximately 69.0% of the Common Stock outstanding. As the general partner of Islandia, John Lang may be deemed to beneficially own the 85,820,672 shares of Common Stock owned by Islandia, constituting approximately 69.0% of the Common Stock outstanding. As the President of John Lang, Richard Berner may be deemed to beneficially own the 85,820,672 shares of Common Stock owned by Islandia, constituting approximately 69.0% of the Common Stock outstanding. As a Vice President of John Lang, each of Edgar Berner and Thomas Berner may be deemed to beneficially own the 85,820,672 shares of Common Stock owned by Islandia, constituting approximately 69.0% of the Common Stock outstanding. Each of John Lang, Richard Berner, Edgar Berner and Thomas Berner disclaims beneficial ownership of the shares of Common Stock owned by Islandia. (b) By virtue of their respective positions with John Lang, the general partner of Islandia, each of Richard Berner, Edgar Berner and Thomas Berner has sole voting and dispositive power with respect to the shares of Common Stock owned by Islandia. (c) Pursuant to the 2007 Purchase Agreement, Islandia purchased from the Company for an aggregate subscription amount of $1,000,000 the 2007 Debenture, which is convertible into 8,438,818 shares of Common Stock, and the 2007 Warrant to purchase 8,438,818 shares of Common Stock. (d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the shares of Common Stock reported hereby. (e) Not applicable. Item 7 is hereby amended to include the following: Item 7. MATERIAL TO BE FILED AS EXHIBITS. 14. 2007 Securities Purchase Agreement. 15. 2007 Debenture. 16. 2007 Warrant. 17. 2007 Registration Rights Agreement. - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 10 of 11 Pages - ---------------------- ---------------------- SIGNATURES ---------- After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: February 21, 2007 ISLANDIA, L.P. By: John Lang, Inc. General Partner By: /s/ Edgar Berner ------------------------------------ Edgar Berner, Vice President JOHN LANG, INC. By: /s/ Edgar Berner ------------------------------------ Edgar Berner, Vice President /s/ Richard Berner ---------------------------------------- Richard Berner /s/ Richard Berner ---------------------------------------- Edgar Berner /s/ Thomas Berner ---------------------------------------- Thomas Berner - ---------------------- ---------------------- CUSIP No. 109696104 13D Page 11 of 11 Pages - ---------------------- ---------------------- EXHIBIT INDEX ------------- Exhibit Page ------- ---- 1. Joint Filing Agreement by and among Islandia, (1) L.P., John Lang, Inc., Richard O. Berner, Edgar R. Berner and Thomas Berner, dated August 10, 2006. 2. 2004 Securities Purchase Agreement. (1) 3. 2004 Debenture. (1) 4. 2004 Warrant. (1) 5. 2004 Registration Rights Agreement. (1) 6. Amendment Agreement. (1) 7. 2005 Debenture. (1) 8. 2005 Warrant. (1) 9. 2006 Securities Purchase Agreement. (1) 10. 2006 Debenture. (1) 11. 2006 Warrant. (1) 12. 2006 Registration Rights Agreement. (1) 13. Conversion Agreement. (1) 14. 2007 Securities Purchase Agreement. (2) 15. 2007 Debenture. (2) 16. 2007 Warrant. (2) 17. 2007 Registration Rights Agreement. (2) - ----------------------- (1) Previously filed. (2) Incorporated by reference to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 20, 2007.