GrowLife Inc (PHOT)

[Trained Monkey]

Understanding the Feb 7 vote to raise A/S

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PHOT is asking investors to approve raising the A/S by 2 Billion shares. The very fact that we are being asked is awesome, as is the complete transparency and fully reporting SEC status of Growlife.


Sterling Scott, CEO of Growlife, has stated that the increased A/S will be used to grow the business, through mergers and acquisitions. An example of using shares like this can be found in the 8k filed 1/23.

The gist of the 8-k is this:

PHOT owns their businesses now. They paid $550k and just north of 7.2M shares for 100% of Rocky Mtn Hydro and Evergreen.

This is 'healthy dilution,' and what longs have been pointing to as an example of what Growlife intends to use the raised A/S for, ie: acquire assets.

Link to the 8k: http://biz.yahoo.com/e/140123/phot8-k_a.html

The legal team in place (Crowell and Moring) specializes in mergers and acquisitions such as this. Generally, this firm represents Fortune 100 companies. Growlife retained elite counsel here.

PR giving details about C&M: https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?page=%2fqnr%2fStocks%2fMoreNews

At current share price this acquisition costs PHOT about 2.3M in cash and stock for the two acquired businesses.

Why so many shares? According to Sterling's open letter dated Friday 1/17 he doesn't want to see the company asking for another A/S increase in 6/12/18/24 months.

Sterling's position: https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?page=%2fqnr%2fStocks%2fArticle%3fdockey%3d1-SN20140117005361-540MD373IDLK8I38546Q738Q8J%26

Like pulling off a band aid... yank it RIGHT OFF!! No need to keep coming back and asking for permission, but have power to strike when the iron is hot and the deal is on the table. Logical plan.