Growlife Inc (OTCBB:PHOT) Swaps Shares With Debt


Dallas, Texas 10/29/2013 (Financialstrend) – Growlife Inc (OTCBB:PHOT) is a $50.54 million market capitalized company which is into the manufacture and sale of hydroponic products. It is also involved in processing and sale of high quality seeds. Its other products include nutrient solutions and germination enabling solutions. In 2013, the company has successfully acquired three other companies. The repeat business that the company is able to generate from its close to 50,000 customers accounts for more than 50% of its quarterly revenue. At the time of market opening on October 28, the stock was priced at $0.08 per share. It posted loss of close to 1.43% from the starting price as of 10:30 AM ET.

On October 11 the company filed mandatory SEC filings indicating a conversion of debt notes into warrants. The arrangement was executed between Growlife and Gemini Master Fund. Gemini Master Fund was owed $280,000 worth notes by Growlife. Both the companies have agreed to convert the notes into 8 million shares of company common stock. This translates to a $0.035 valuation per allotted share. This translates to a 62% discount on the price of the shares as of October 28. As per the original terms of the agreement, the hydroponics major was supposed to retire the loan before end of October this year. The 8 million stock transfers are in lieu of the entire $280,000 debt which stands fully repaid post the transfer.

On the same day the company also announced the issue of convertible notes which bear a 7% interest charge. Through this exercise, penny stock firm was able to raise $850,000 to sustain its operations. The notes are expected to mature on September 30 in 2015. At current valuations the stock is trading 33% down from its 52 week high valuation. As of mid day trading on October 28, close to 5.3 million shares of the stock had been traded which was on par with the 65 day daily average of 9.4 million transaction.