UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
_____________________________
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF THE
 
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report:
 
(Date of earliest event reported)
 
February 15, 2019
____________________________
 
 
GROWLIFE, INC.
(Exact name of registrant as specified in charter)
 
Delaware
(State or other Jurisdiction of Incorporation or Organization)
 
000-50385
(Commission File Number)
 
90-0821083
(IRS Employer Identification No.)
 
5400 Carillon Point
Kirkland, WA 98033
(Address of Principal Executive Offices and zip code)
 
 
(866) 781-5559
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:
 
[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
 
 
 
Item 1.02 - Termination of Material Definitive Agreement
 
Termination of all Agreements with CANX and Cancellation of CANX Warrants
 
On February 15, 2019, GrowLife, Inc. (the “Company”), entered into a Termination of Existing Agreements and Release (the “Agreement”) with CANX USA, LLC, a Nevada limited liability company (“CANX”). Pursuant to the Agreement, the Parties agreed to terminate, release and discharge all existing and further rights and obligations between the Parties under, arising out of, or in any way related to that certain Waiver and Modification Agreement and Amended and Restated Joint Venture Agreement made as of July 10, 2014, and any ancillary agreements or instruments thereto, including, but not limited to, the Warrants issued to CANX entitling CANX to purchase 540,000,000 shares of the Company’s common stock at an exercise price of $0.033 (collectively, the “CANX Agreements and Warrants”).
 
In exchange for the Agreement and cancellation of the CANX Agreements and Warrants, the Company agreed to issue $1,000,000 of restricted common stock priced at the February 7, 2019 closing price of $0.008, or 125,000,000 restricted common stock shares (the “Shares”).
 
The foregoing description of the Agreement is not complete and is subject to and qualified in its entirety by reference to the Agreement as set forth within Exhibit 10.1 attached hereto and incorporated herein by this reference. All defined terms not otherwise defined herein shall have the meaning as set forth in the Agreement.
 
Item 3.02    Unregistered Sales of Equity Securities
 
See the disclosures made in Item 1.02, which are incorporated herein by reference. The Company’s securities were issued to an accredited investor in a transaction exempt from registration pursuant to Section 4(2) of the Securities Act of 1933. The transaction did not involve a public offering, the sale of the securities was made without general solicitation or advertising, there was no underwriter, and no underwriting commissions were paid.
 
Item 7.01 Regulation FD Disclosure.
 
Attached hereto as Exhibit 99.1 is a press release the Company issued on February 19, 2019, announcing entry into the Agreement. The information provided in response to Item 1.02 of this report is incorporated by reference into this Item 7.01.
 
Item 9.01               Financial Statements and Exhibits.
 
(d)  Exhibits.
 
 
 
 
Exhibit No.
 
Description
 
 
 
 
Termination of Existing Agreements and Release Agreement accepted February 15, 2019, entered into by and between GrowLife, Inc. and CANX USA, LLC
 
Press Release issued by GrowLife, Inc., dated February 20, 2019, regarding the Agreement with CANX
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
GROWLIFE, INC.
 
 
 
 
Date:  February 20, 2019
By:
/s/ Marco Hegyi
 
 
Marco Hegyi
 
 
Chief Executive Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Exhibit 10.1

 
February 8, 2019
 
By Email Only
CANX USA, LLC
410 South Rampart Blvd., Suite 350
Las Vegas, NV 89145
 
Re: OFFER TO TERMINATE EXISTING AGREEMENTS AND RELEASE
 
Dear CANX USA LLC,
 
Reference is made to that certain Waiver and Modification Agreement and Amended and Restated Joint Venture Agreement made as of July 10, 2014, and any ancillary agreements or instruments thereto (collectively, the “Existing Agreements”), by and among GrowLife, Inc. (“GrowLife” or “PHOT”) and CANX USA, LLC, (“CANX” and together with GrowLife, the “Parties”). In connection with the Existing Agreements, CANX became the holder of the warrants, which entitled you to purchase 540,000,000 shares of GrowLife Common Stock (the “Warrants”).
 
The purpose of this letter is to present the following the following “Offer” which shall expire if not accepted with notice delivered to Mr. Hegyi prior to 11:59 PM PST Sunday, February 10, 2019.
 
In consideration for a one time lump sum issuance of $1,000,000 in PHOT common stock priced at the February 7, 2019 closing price of $0.008, or 125,000,000 restricted common stock shares (the “Shares”) issued directly to CANX, GrowLife and CANX agree to terminate any existing or further rights and obligations between the Parties under, arising out of, or in any way related to each of the Existing Agreements or the Warrants, the Warrants shall be cancelled and returned to treasury, and GrowLife shall terminate any and all relationship with Organic Growth International, LLC. The Parties further agree to release fully and finally, any and all claims, disputes, actions, or rights, known or unknown, which may now exist or heretofore have existed, between the Parties relating to the Existing Agreement or the Warrants or arising therefrom. Upon acceptance and countersigned execution copies of this Agreement, all rights and obligations under the Existing Agreements and the Warrants will be terminated and of no further force or effect, and each of the Parties shall be released from their respective obligations thereunder.
 
 
 
 
GrowLife is a fully reporting publically traded company. As such, the Shares shall be eligible for deposit and public resale with the broker of your choice pursuant to Rule 144 six (6) months after the date this Offer is accepted and the Shares are issued to CANX. As additional consideration, GrowLife will pay a maximum fee of $300 for CANX to acquire a legal opinion for the removal of the Rule 144 legend.
 
In addition to the consideration and mutual covenants referenced above, CANX and GrowLife, each of them, hereby represents and warrants to, and agrees with, each of the other that it has carefully read and reviewed this Agreement in its entirety and understands it fully, has had an opportunity to review the terms of this Agreement with independent legal counsel of its choice prior to executing this Agreement, and has executed this Agreement of its own free will. CANX and GrowLife each acknowledge that the person executing this Agreement has the authority to execute this Agreement on behalf of GrowLife or CANX, as applicable, on whose behalf said person is purporting to execute it and each corporate or limited liability company Party hereto represents and warrants that the execution and delivery of this Agreement has been duly authorized and approved.
 
CANX and GrowLife further agree that this Agreement is intended to be final and binding between and among, and to inure to the benefit of the Parties, including their heirs, executors, personal representatives, attorneys, successors and assigns, and is further intended to be effective as a full and final accord and satisfaction between and among the Parties regardless of any claims of fraud, misrepresentation, concealment of fact, mistake of fact or law, breach of fiduciary duty or any other claims or circumstances that have occurred as of the date hereof. Each Party relies on the finality of this Agreement as a material factor inducing that Party’s execution of this Agreement.
 
The term of the Offer made by GrowLife in this letter shall expire at 11:59 PM Pacific Standard Time on Sunday, February 10, 2019, unless sooner accepted by CANX by signing below and returning an executed copy of this letter agreement to GrowLife prior to the time of expiration.
 
Very truly yours,  
 
 
 
GROWLIFE, INC.
 
 
 
 
 

By:  
/s/  Marco Hegyi
 
 
Name: 
Marco Hegyi
 
 
Title: 
President and CEO
 
 
 
ACCEPTED AND AGREED TO:
 
 
CANX USA, LLC:
 
 
 
 
 

By:  
/s/   Tony Cox
 
 
Name: 
Tony Cox, Authorized Signatory 

 
 

 
 
  Exhibit 99.1
 
 
 
GrowLife, Inc. Announces Retirement of Over One-Half Billion Shares
 
KIRKLAND, Wash., February 20, 2019 -- GrowLife, Inc. (OTCQB:PHOT), one of the nation's most recognized indoor cultivation product and service providers, today announced that GrowLife and CANX USA, LLC, (“CANX”) have completed an agreement to terminate all past agreements between the parties including that which entitled CANX to receive up to 540,000,000 shares of GrowLife Common Stock priced at $0.033 related to the exercise of Warrants.  Effective immediately, all  existing or further rights and obligations between the parties under, arising out of, or in any way related to each of the existing agreements and the Warrants have been terminated in exchange for a one-time lump sum issuance of $1,000,000 in PHOT common stock priced at the February 7, 2019 closing price of $0.008, or 125,000,000 restricted common stock shares issued directly to CANX. As a result there are no further rights, obligations, or relationship between the two companies.
 
“After years of extensive and cooperative negotiations I am pleased to report that GrowLife has taken a significant step towards strenthening our balance sheet with the cancellation of warrants to purchase of up to 540 million common shares,” said GrowLife CEO Marco Hegyi. “CANX provided necessary support in 2013 and 2014 that entitled CANX to 540,000,000 shares at $0.033, which was was consided to be a supressive ‘overhang’ to PHOT’s share price by many investors. By issuing 125,000,000 restricted shares priced at $0.008, we have retired the enire CANX overhang. I see this as a win-win to both PHOT shareholders and CANX investors.”
 
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:
CMW Media
Cassandra Dowell, 858-264-6600
cassandra@cmwmedia.com
www.cmwmedia.com
Investor Relations Contact:
info@growlifinc.com
206-483-0059
 
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.