Growlife Inc. (OTC:PHOT) Loses Momentum
After the promising spike of more than 29% Growlife Inc. (OTC:PHOT) seem to have lost some steam during the last 3 trading session. On Friday they dropped 6% to close at 0.053.
Many companies decide to repair their shaky financials by switching to the newly legalized marijuana sector. Even the mere announcement of joining it can secure a new influx of funds as investors are eager to jump in. Will PHOT disprove our initial suspicions and stay for the long run? We are eagerly awating the answer.
For now, taking a look at their 10-K report, they seem to be in quite a good shape, for a penny company that is:
- $36,602 cash
- $1.2 million total assets
- $1.6 million total liabilities, of which 1 million convertible note
- $1.4 million revenues
- $2.1 million net loss
Many investors were encouraged by the respectable revenues and manageable losses and on April 2 more than 18 million shares were traded. Now things have calmed down a bit with the price fluctuating around 0.056 and traded volume of around 6.5 million.
In contrast to their stock, the company itself hasn’t let up one bit as it continued to reveal one big news release after the other. They signed a letter of intent to acquire Rocky Mountain Hydroponics, LLC., Evergreen Garden Center, LLC. and 58Hydro.com in a transaction that involved a combination of common stock, debt securities and cash. Exactly how much cash, debt securities and common stock were negotiated is unclear. Also we shouldn’t forget that this is a letter of intent and nothing is final until June 7 when the agreement is expected to be closed.
Wouldn’t you know it, only hours ago came another press release. This time PHOT will be co-title sponsor for the ‘420 Hot Box’. This event will celebrate the legalization of marijuana in Colorado and will be headlined by the bands Slightly Stoopid and Cypress Hill. It seems PHOT‘s PR machine is working on full power. One must wonder for how long can this flashy marketing be sustained with only 36 thousand in cash. Relying only on hype to generate shareholder value is not a sound business strategy and if you are contemplating investing in them be sure to do your own research beforehand.
