Growlife Inc. (OTCBB:PHOT) Trying to Return to 10 cents
Ever since the February hype around the medical marijuana industry started dying out there has been one clear leader – Medical Marijuana, Inc. (OTCMKTS:MJNA). But the times have been changing and it appears that Growlife Inc. (OTCBB:PHOT) may be able to overtake the position once held by MJNA.
Looking at the performance of both stocks for the year MJNA have dropped from a peak of nearly half a dollar to just 12 cents while PHOT earlier this month managed to return to their highs from February. Currently they are once again gathering momentum to pass through 10 cents closing at $0.94 on Friday.
Although PHOT have still quite a way to go before turning into a profitable business their revenues have been constantly increasing and have broken through the $1 million mark. For the quarter ending September 30 they disclosed the following financial results:
- $190 thousand cash
- $1.2 million total current assets
- $1.5 million total current liabilities
- $1.3 million revenues
- $1.8 million net loss
The reason why PHOT have been gathering moment may have something to do with the fact that they have quite diverse operations. In addition to the core hydroponic growing technologies they are developing software for the marijuana dispensaries through their GrowLife Financial brand and just last week announced the creation of a joint venture with CANX USA LLC (CANX). Under the terms of the agreement the two companies are going to form Organic Growth International, LLC with the funding provided by CANX going as high as $40 million if certain criteria is met.
For now CANX are going to provide an initial payment of $1.3 million and another $1 million under a 7% convertible note. And here start the worries of PHOT shareholders. This joint venture may cause severe dilution of PHOT‘s common shares. First they issued CANX 140 million transferable unrestricted warrants to purchase 140 million shares at a third of the current market price or just $0.033. In addition if PHOT increase their authorized stock they will have to issue another 100 million warrants with the same characteristics. That is still not all though, with another 20 blocks of 10 million warrants waiting to be issued under cetain conditions.
As a whole 440 million new common shares may see the light of day which are more than half of the current 700 million outstanding shares. PHOT indeed have potential to grow their business and operations but still doing your own research should precede everything else and especially so when you are dealing with pennystocks.
Although the stock of Guar Global Ltd. (OTCMKTS:GGBL) started to be actively traded just last week the company is already being touted by a promotion with a total budget of $1.2 million. The fate of this pump remains to be seen but keep in mind that last week SEC intervened and suspended two high-budget pumps for Life Stem Genetics Inc (OTCBB:LIFS) and Nevada Gold Corp. (OTCBB:NVGC).
