Todor Pichurov

Growlife Inc (OTCMKTS:PHOT) Pumps Out New Shares, Delays Annual

by Todor Pichurov April 1, 2016

The recent price trips of Growlife Inc (OTCMKTS:PHOT, PHOT message board) both up and down the charts continue to shake the stock. Yesterday PHOT closed down in double digits, dropping over 14%, down to a close of $0.023 per share. The company also dropped another Form D yesterday, which likely contributed to the price drop.

PHOT already diluted its shareholders by squeezing out a total of 64 million new shares priced at $0.007 on March 10 and March 17. Instead of the company's due annual report, yesterday investors were greeted by yet another Form D. This one discloses that PHOT pumped out another 22 million new shares, once again priced at $0.007, on March 28. Anyone caught by surprise by this flood of discounted shares should have spent some time browsing through the company's last published quarterly which clearly outlines convertible notes that can be turned into shares at double zeroes. However, the people who bought into the hype spike when PHOT was fresh out of the grey sheets and trading as a pink stock once again were probably too dizzy with delight to bother with such minutae.

In addition to the new block of shares, PHOT is also delaying its annual report. Investors got a NT 10-K and the promise that the report will be arriving within the next 14 days. The combination of another sizable batch of cheap shares hitting the market and the delay in publishing financials likely combined to push PHOT down the charts.

Those disappointed with the way things are turning out should be asking themselves one important question – what had fundamentally changed with PHOT ever since the company clambered out of the greys, so as to warrant a price spike to five cents per share? The convertible debt was still there, the $2 million settlement under the class action lawsuits following PHOT's SEC suspension were still there on the books, the gross loss for the last reported quarter was also there.

PHOT supporters are now left hoping the annual report will show at least some redeeming performance when it arrives over the next couple of weeks.

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