Replies to post #62520 on GrowLife Inc (PHOT)

[doubleeagle]

There will be no buy back! Not even in the near future. Maybe a spin off of a jv partner.

[dickmilde]

No I don't... They just increased the authorized share count and that stock can be expected to become part of the outstanding share count over time. They did this because they intend to use shares instead of money for the business activities... they don't have any money. As of the last report they only have about $190,000 in cash and current liabilities exceed current assets. Most of their current assets is in inventory which means that if the inventory is sold only a fraction of that money increases cash on hand because of the expenses required to sell the inventory. Actually the most recent repot indicates that the current losses are HIGHER than the current sales. They had sales of $1.3 Million and as a result had a loss of $1.8 Million.
http://www.sec.gov/Archives/edgar/data/1161582/000107997413000726/growlife10q9302013.htm

Anyway... No, they won't be buying back shares, they will be putting more shares on the market. This can happen in two ways. They can use shares to buy more businesses or they can use shares to raise money. Either will dilute current shareholders. The typical money raise in this situation would be for them to do a private placement to accredited investors by selling shares below the current market at the time of the agreement. Accredited investors will demand a significant discount because of the risk.