GrowLife, Inc. Reports Third Quarter Financial and Operational Results Gross Revenue Increase 231% Over Q3 2016

GrowLife, Inc. (PHOT), one of the nation’s most recognized indoor cultivation service providers, today filed its 10-Q for its quarter ending September 30, 2017 including financial and operational results.

GrowLife, Inc. has recently completed a newsworthy October with recent announcements around its five pillar strategy, shareholder meeting where 88% of shares were voted and majority showed support of management and its proposals, FINRA confirmed compliance of its market maker permitting the solicited trade of PHOT shares, and the strategic asset acquisition of building materials, patents and trademarks that further enable the Company to innovate its product offerings to remain ahead of market trends. Today’s September 30, 2017 10-Q is the capstone with announcement of strong revenue, gross profit and gross margin growth over last year.

“Results are what matter and the GrowLife team continues to perform in a unified manner where it is firing on all cylinders with sales, finance and operations aligned,” said GrowLife CEO Marco Hegyi. “With the recent additions of world-class talent, resources and further regulatory approval, I expect GrowLife to continue to lead in growth and capitalize on the demand from the indoor cultivation industry. Our shareholder’s recent votes show great support in the Company’s future.”

Revenue

Net revenue for the three months ended September 30, 2017 increased $461,000 to $661,000 as compared to $200,000 for the three months ended September 30, 2016. The increase resulted from increased sales personnel and channels of distribution.

Cost of Goods Sold

Cost of sales for the three months ended September 30, 2017 increased $297,000 to $476,000 as compared to $179,000 for the three months ended September 30, 2016. The increase was due increased sales, offset by lower cost of sales related to favorable product mix and increased supplier discounts.

Gross profit was $185,000 for the three months ended September 30, 2017 as compared to a gross profit of $21,000 for the three months ended September 30, 2016. The gross profit percentage was 27.9% for the three months ended September 30, 2017 as compared to 10.3% for the three months ended September 30, 2016. The gross profit increase was due increased sales, offset by lower cost of sales related to favorable product mix and increased supplier discounts.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2017 increased $151,000 to $589,000 as compared to $438,000 for the three months ended September 30, 2016.

The increase was due to the expense of our annual shareholder meeting. Non-cash general and administrative expenses for the three months ended September 30, 2017 were $57,000 related to stock based compensation.

Other Expense

Other expense for the three months ended September 30, 2017 was $352,000 as compared to $57,000 for the three months ended September 30, 2016.

Net (Loss)

Net loss for the three months ended September 30, 2017 was $756,000 as compared to $474,000 for the three months ended September 30, 2016 for the reasons discussed above.

Net loss for the three months ended September 30, 2017 included non-cash expenses of $407,000 including (i) stock based compensation of $57,000 related to stock option grants and warrants; (ii) accrued interest and amortization of debt discount on convertible notes payable of $151,000; (iii) loss on debt conversions of $199,000; (iv) reclassification of derivative instruments to additional paid in capital to of $538,000; and offset by (v) change in derivative liability of $538,000.

For more information on the last quarter, please read GrowLife’s September 30, 2017, 10Q SEC filing which can be found here.

For more information, The GrowLife 2017 Stockholder Review presentation can be found on the Company’s homepage at www.GrowLifeInc.com.

For more information about GrowLife and GrowLifeEco.com, please visit the company website. Additional commentary on the Company as well as the industry is also provided on the CEO’s blog. Specific financials and corporate actions on GrowLife (PHOT), can be found in the filings at the SEC website.

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 representative covering the United States and Canada, regional centers and its e-Commerce team, GrowLife provides essential goods and services including media, industry-leading hydroponics equipment, plant nutrients, and thousands more products to specialty grow operations. GrowLife is headquartered in Kirkland, Washington and was founded in 2012.

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