Dragni Dragnev

Growlife Inc. (OTCMKTS:PHOT)‘s Surge Is On

by Dragni Dragnev March 29, 2016

Growlife Inc. (OTCMKTS:PHOT, PHOT message board) managed to add a whooping 33% to its market cap in yesterday’s trading session – but will its climb continue?

Truth be told, it is surprising enough to see PHOT even manage to maintain its volatility and momentum after the long weekend – and the reasons for that should be obvious.

Anyone who’s kept an eye on the OTC Markets back in the days of the marijuana rush knows PHOT’s story. The company was so dubious, controversial and volatile that even the SEC took notice of its activities, to the regret of all the bagholders involved.

After quite a bit of time spent on the gray market, PHOT was allowed to return on the OTC Markets’ pinksheets sector, but honestly – that means very little. The company’s name has been compromised, perhaps irreparably – and, truth be told, PHOT hasn’t really done all that much to try and mend the situation. Its latest financial report was simply atrocious:

  • cash - $62 thousand
  • current liabilities - $4.6 million
  • quarterly revenues - $525 thousand
  • quarterly operating loss - $777 thousand

The numbers given above clearly show that as it is, PHOT is completely incapable of making ends meet – which is a sad, sad state of affairs indeed. Still, as mediocre and idle that may seem, said numbers don’t represent the greatest threat to investor value that the company has in store for traders.

No, the real trap lies in the fact that the company still has a ton of convertible debt that can be transformed into shares of common stock at prices ranging from $0.007 to $0.01 and dumped on the market at the noteholders’ leisure. And it’s not like said noteholders are idle, either – an 8-k that hit the web just a couple of days ago stated that as of March 17, PHOT has issued 74 million new shares at said abysmally low prices, bringing the total of shares it has outstanding to 976 million.

This pretty much tells investors all they need to know about PHOT’s current state of developments, as well as its methods of doing “business”, as well as some of the more obvious pitfalls of trading PHOT stock. Investors are advised to tread lightly, do some serious due diligence before jumping at PHOT stock and be on the lookout for the company’s upcoming report, which should hit the web any day now.

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