KIRKLAND, Wash. — GrowLife, Inc. (OTCQB: PHOT) (“GrowLife” or the “Company”), one of the nation’s most recognized indoor cultivation product and service providers, today announced financial results for the quarter ending Sept. 30, 2018, and provided an overview of recent operational highlights from that quarter. The company experienced continued growth over last year, showing a 44.3% increase in revenue over Q3 2017. For the nine-month period ending Sept. 30, 2018, the company experienced revenue growth of 74% over the same period last year.
“We are pleased to share some of the significant milestones met in the development and expansion of our commercial cultivation product offering as well as impressive revenue growth we achieved in the third quarter of this year,” said GrowLife CEO Marco Hegyi. “During the third quarter, a historically slower quarter for our industry, we saw incredible results from our proof-of-concept study on our proprietary vertical grow room in development by our product development division. We look forward to further testing this system and bringing it to market in the coming months. Additionally, GrowLife’s seamless expansion into the Canadian marketplace saw further increases in sales and our new storefront and distribution centers in Portland, Maine and Los Angeles positioned us to more efficiently service the expanding legalized United States market through not only a retail presence but e-commerce fulfillment. Finally, we attended some of the most important and relevant industry events to network with industry leaders and speak on GrowLife’s products and services and further position us as a leader in commercial cannabis cultivation.”
THIRD QUARTER 2018 HIGHLIGHTS
During Q3 2018, GrowLife, Inc. achieved the following milestones and significant events:
Announced Rights Offering to Shareholders for Investment Opportunity for Marketing, Sales and Technology Expansion
- The Company announced a right’s offering for shareholders of record on Oct. 12, 2018. The rights offering was designed to give shareholders the opportunity to invest directly into PHOT at a set price with additional warrants to support the company’s capital raise to be used for continued expansion. The rights offering deadline was extended to Oct. 20. For more information, shareholders are encouraged to work with their brokers or visit https://growlifeinc.com/investors/rights-offering/.
Filed a Patent on a Standardized Vertical Grow Room Farming System
- GrowLife Innovations, the product development division of the company, filed a provisional patent application with the United States Patent and Trademark Office (USPTO) on a highly efficient and scalable vertical cultivation system. The Automated Indoor Cannabis Growing Facility is designed to produce high-quality, consistent and cost-effective cannabis. The company identified a need for commercial cultivators to continue to reduce their production costs while still producing large volumes of high-quality cannabis.
Announced Results from Proof-of-Concept Study On Company’s Proprietary Vertical Grow Room
- The Company announced preliminary test results from a Proof-of-Concept (POC) study in Colorado with a licensed customer on its proprietary vertical grow room system. The study has proven that the system can house four times as many plants as compared to traditional grow rooms with the same square footage. The system, which operates in only 64 square feet, is currently being tested with 70 full-size plants utilizing cubic volume versus horizontal square footing, which would traditionally only allow for the growing of up to 15-17 plants.
- The Company also announced preliminary test results from a Proof-of-Concept (POC) study in Colorado with a licensed customer on its proprietary vertical grow room system. When compared to plants in a traditional grow room, results showed a 76% reduction in per-plant kilowatt usage with the 8’ x 8’ GrowLife cubical vertical grow system that would result in significant cost savings for cultivators.
Increased Retail and Fulfillment Footprint Across the United States
- The company added a location in Los Angeles, in the heart of the world’s largest legalized cannabis market, through the purchase of assets from GoGreen Hydroponics. The facility, located at 15721 Ventura Blvd., Encino, CA 91436, will act as the company’s West Coast retail and e-logistics fulfillment center.
- The Company held a ribbon-cutting ceremony in Portland, Maine, for its newest retail location named GrowLife Hydroponics. This storefront carries GrowLife’s line of industry-leading hydroponics and soil, along with thousands of other brands and products that cater to cultivators of all sizes. The East Coast is poised for additional legalization in the coming months and this location will also serve as the company’s East Cost fulfillment center for orders placed on its e-commerce platform.
Reported Year-Over-Year Revenue Growth in Q2 2018 Financial Results
- The Company experienced escalated growth over last year, showing a 74% increase in revenue over the same quarter last year.
Presented at Two Major Industry Events
- President of GrowLife’s Commercial Division Joe Barnes spoke on GrowLife’s mission and product offerings with attendees at CannaGather’s Growing With Danny Danko event in August at Galvanize in New York.
- CEO Marco Hegyi spoke at the Cannabis World Congress and Business Expo (CWCBExpo) on a panel entitled “Investing in Ancillary Companies” in September at the Los Angeles Convention Center. During the panel, Hegyi discussed the opportunities ancillary companies present to investors eager to enter the rapidly evolving cannabis space.
Reached a Securities Purchase Agreement, Secured Promissory Notes and Security Agreement with Iliad Research and Trading, L.P. (“Iliad”)
- On Aug. 10, 2018, the Company closed the transactions described below with Iliad.
- On Aug. 7, 2018, the Company executed the following agreements with Iliad: (i) Securities Purchase Agreement; (ii) Secured Promissory Notes; and (iii) Security Agreement (collectively the “Iliad Agreements”). The Company entered into the Iliad Agreements with the intent to acquire working capital to grow its businesses.
- The total amount of funding under the Iliad Agreements was $1,500,000. The Convertible Promissory Note carries an original issue discount of $150,000 and a transaction expense amount of $5,000, for total debt of $1,655,000. If not converted sooner, the Debt is due on or before Aug. 7, 2019. The Debt carries an interest rate of ten percent (10%). The Debt is convertible, at Iliad’s option, into common stock at $0.015 per share subject to adjustment as provided for in the Secured Promissory Notes. The Company’s obligation to pay the Debt, or any portion thereof, is secured by all of its assets. The Company has $1,055,000 available under this debt financing.
THIRD QUARTER 2018 FINANCIAL RESULTS
Net Revenue: For the period ending Sept. 30, 2018, GrowLife showed net revenue of $954,000 as compared to revenue of $661,000 for the period that ended Sept. 30, 2017, an increase of 44.3%.
Balance Sheet: Total Assets for the company were $1,219,159 as of June 30, 2018, compared to $861,866 as of December 31, 2017.
For more information about GrowLife, please visit the company’s website. Products can be purchased at ShopGrowLife.com. Additional commentary on the company and the industry as a whole can be found on the CEO’s blog.
About GrowLife, Inc.
GrowLife, Inc. (PHOT) aims to become the nation’s largest cultivation service provider for cultivating organics, herbs and greens and plant-based medicines. Our mission is to help make our customers successful. Through a network of local representatives covering the United States and Canada, regional centers and its e-Commerce team, GrowLife provides essential goods and services including media, industry-leading hydroponics and soil, plant nutrients, and thousands more products to specialty grow operations. GrowLife is headquartered in Kirkland, Washington and was founded in 2012.
Public Relations Contact:
Cassandra Dowell, 858-264-6600
FORWARD LOOKING STATEMENT:
This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding the intent, belief or current expectations of GrowLife, Inc., its directors or its officers with respect to, among other things: (i) financing plans; (ii) trends affecting its financial condition or results of operations; (iii) growth strategy and operating strategy. The words may, would, will, expect, estimate, can, believe, potential and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond GrowLife, Inc.’s ability to control, and actual results may differ materially from those projected in the forward-looking statements as a result of various factors.