Other Events.
Class Actions Alleging Violations of Federal Securities Laws
On April 18, 2014, a class action lawsuit alleging violations of federal securities laws was filed against GrowLife, Inc., a Delaware corporation (the “Company”) in the United States District Court, Central District of California ( Randy Romero v. Growlife, Inc., et al. ; Case No.: 2:14-cv-03015) (the “ Romero Action”). The Romero Action was previously disclosed via Current Report on Form 8-K dated May 8, 2014.
On May 30, 2014, the United States District Court, Central District of California (the “Court”) ordered the Romero Action consolidated with another class action alleging securities violations also filed with the Court against the Company entitled Gerald Young v. Growlife, Inc., et al . (Case No.: 2:14-cv-03183) (the “ Young Action”). The Young Action was filed on April 25, 2014 but not served on the Company. Counsel for Romero and Young will work in concert with the Court to determine a Lead Plaintiff and file a consolidated complaint.
On June 5, 2014, the Company entered a general appearance in connection with a third class action alleging securities violations filed with the Court entitled Rochelle Wolf v. Growlife, Inc., et al. (Case No.: 2:14-cv-04112)(the “ Wolf Action”). The Wolf Action has also been consolidated into the Romero Action as was done with the Young Action based on the Court’s standing order and procedural rules. As a result, the allegations from all three actions will be consolidated into a single complaint for the Company to defend.
Shareholder Derivative Action
On May 15, 2014, a shareholder derivative action was filed against the Board of Directors (the “Directors”) of the Company with the Court entitled Steve Roof v. Sterling C. Scott, et al. (2:14-cv-03777)(the “ Roof Derivative Action”). The Company was also named as a nominal defendant. The Roof Derivative Action alleges claims against the Directors including breach of fiduciary duty and duty of loyalty, abuse of control and unjust enrichment. The Company has not yet formally been served or appeared in this action.
