Blueprint
Exhibit 99.1
GrowLife, Inc. Reports 112% Quarter-Over-Quarter Revenue Growth in
Fourth Quarter and Year End 2018 Financial Results and Operational
Highlights Filing
Company
Files Annual Report on Financial Results and Operational
Highlights from
2018
Summary:
●
GrowLife
experienced revenue growth of 112% Quarter-Over-Quarter and 86%
Year-Over-Year as compared to year end 2017
●
GrowLife completed
acquisition of controlling interest in EZ-CLONE Enterprises, Inc.,
as well as integration of assets from a commercial flooring company
and of GoGreen Hydroponics in Los Angeles County
●
GrowLife launched a
proof-of-concept study on a proprietary vertical grow system,
targeting a market launch in the second half of 2019
KIRKLAND,
Wash. -- GrowLife,
Inc. (OTC: PHOT) (“GrowLife” or the
“Company”), one of the nation’s most recognized plant
cultivation product and service providers, today announced
financial results for the quarter and year ending Dec. 31, 2018,
and provided an overview of recent operational highlights. The
Company continued to show significant market and revenue growth
throughout the year, as Q2 2018 revenue increased year over year by
131.78%, Q3 2018 by 44.22%, and Q4 2018 by 112.25% over the
previous year in the same quarter. Total revenue for the period
ending Dec. 31, 2018, increased 86.49% over the same period last
year. Other financial highlights include an increase in gross
margins of $197,000 year over year related to the acquisition of
EZ-CLONE Enterprises, Inc. EZ-Clone reported gross margins of 47.5%
during the quarter ended December 31, 2018. The overall balance
sheet was improved with the closing of the rights offering on
November 30, 2018 and total assets increased $6,356,000 over the
prior year-end. Operational highlights include the Company’s
market expansion into Canada where cannabis has been nationally
legalized, strategic acquisition of industry leading EZ-Clone
Enterprises, Inc., and initiation of research and development of a
vertical commercial cannabis growing system set to hit the market
in 2019.
This
recap highlights various business results and developments within
GrowLife’s diverse portfolio throughout the year and reflects
enthusiasm for the future of the Company.
“I
could not be prouder of the growth and accomplishments our company
and team members achieved in 2018,”
said GrowLife CEO Marco Hegyi. “Our industry
experienced unprecedented legislative developments including Canada
going full adult use. GrowLife is more well-positioned than ever to
be a leader in the space. Not only did we expand our team, but we
integrated two additional companies that will position us to
capture additional market share and own the entire cultivation
process from clone to harvest, as well as completed the full
acquisition of a flooring company we have rebranded as
‘ShopCustomFloors.’ The acquisition of EZ-Clone
redefined our path to success as a organization and enables us to
supply growers with the all the tools needed, from clone to
harvest. While this took an investment at the beginning of 2018,
these integrations align with our goals of increasing margins for
our products and driving innovation. Adding to GrowLife’s
robust intellectual property portfolio, we began development of our
game-changing commercial grow system that aims to drastically
decrease the costs associated with cannabis
cultivation.
“The
team executed on our solid fiscal strategy that allowed us to
secure additional, less-expensive financing to meet our expansion
goals. We expanded our North American footprint with the addition
of retail and fulfillment centers in Canada, California, Texas and
Maine. Finally, these accomplishments were noticed by renowned news
outlets covering innovations in this multi-billion-dollar industry.
As promised, 2018 proved to be one of the most pivotal and exciting
years for our company and we are preparing to capitalize on the
momentum we experienced in the new year.”
Results
will be discussed on an Investor Conference Call on Monday, March
11, 2019, at 4:30 p.m. ET.
To
access the call:
Dial-In
Number: 1-857-232-0157
Access
Code: 422095
For
those unable to participate in the conference call at that time, a
replay will be available at https://smallcapvoice.com/blog/phot/
shortly after the call has concluded.
To view
the Company’s 2018 Recap video, visit our website
here.
Operation
Highlights for 2018
Included:
Executed on Solid Fiscal Strategy
●
Reported nearly
100% year-over-year growth in Q4 2017, 52% year-over-year
growth in Q1 2018, 131% year-over-year
growth in Q2 2018, and 74% year-to-date
growth in Q3 2018 as compared to the previous
year.
●
Completed its proposed
rights offering on Nov 30, 2018 that was designed to give
shareholders the opportunity to invest directly in the Company at a
set price, with additional warrants to support the Company’s
capital raise that will be used for its continued expansion in the
burgeoning cannabis industry.
●
Held its Annual Meeting
of Stockholders on Dec. 6, 2018, where more than 90% of
shares were voted, and all items put forward by management were
passed by a majority vote.
Completed Acquisitions/Integrations
●
Acquired cannabis industry-leading product manufacturer EZ-CLONE
Enterprises, Inc. (EZ-CLONE). The company acquired controlling
interest of EZ-CLONE in October with the intent to acquire the
remaining stake in the future. EZ-CLONE is the manufacturer of
multiple award-winning products specifically designed for the
commercial cloning and propagation stage of indoor plant
cultivation including cannabis, food, and other hydroponic farming.
The transaction aligned with the Company’s strategic vision
of servicing the burgeoning cannabis cultivation
market.
●
Completed acquisition
of assets of building materials manufacturing company FreeFit
Flooring, which specializes in the production of non-toxic,
eco-friendly flooring. This acquisition, completed through
subsidiary GrowLife Innovations, aligns with the Company’s
goal of offering innovative new products to the indoor growing
market, including everything needed for cultivation “from the
ground up.”
Expanded Leadership Team
●
Appointed William
Blackburn as President of product development division, GrowLife
Innovations. Blackburn focuses on bringing new commercial
products to market and closing the Company’s rights offering
funding.
●
Added Vice President
of Administration Will Scott, GrowLife’s long time
controller, who brings years of experience in finance and
operations positions including within the company.
Extended North American Footprint
●
Launched an e-commerce platform in Canada, a new online e-commerce platform
designed to service both consumer and commercial customers
throughout the country of Canada.
●
Through the Company’s acquisition of EZ-CLONE Enterprises,
the Company added a manufacturing facility for commercial
cultivation equipment in Sacramento, California.
●
Added a retail and West Coast fulfillment center in Los
Angeles located at
15721 Ventura Blvd, Encino, CA 91436 and had a long-standing
hydroponics customer base as it was acquired through an asset
purchase of intellectual property rights and lease transfer from
GoGreen Hydroponics.
●
As a part of its
GrowLife Innovations division, the company opened a new R&D
and manufacturing facility in Dallas designed to meet the
increased demand for innovative products and solutions for the
indoor cultivation and building material market.
●
Held a Grand
Opening Ceremony for a hydroponics retail store and fulfillment
center in Portland, Maine.
Launched New Products and Began Testing of Others
●
Initiated a Proof-of-Concept study on a commercial vertical grow
system that leverages
state-of-the-art technology and design to maximize the amount of
plants that can be grown in a cubic space while utilizing
technologies that decrease production costs and produce consistent
results.
Preliminary results
show
an 4x increase in capacity from 15 to 70 plants
when compared to traditional grow rooms as well as a
decrease of over 70% of electricity required to grow the same number
of plants.
●
GrowLife HP Organic Soil (‘Soil Product’)
product was
tested and selected for use in three major indoor cultivation
rooms, including one of the nation’s largest rooms with over
120,000 square feet of cultivation space in
Colorado.
●
Line of eco-friendly products is a unique line of
indoor cultivation products curated for their decreased impact on
the environment, which allows GrowLife’s customers to play a
role in providing a greener economic footprint compared to
traditional indoor cultivation methods while remaining efficient on
output and profitability.
Expanded Intellectual Property Portfolio
●
Filed a provisional patent on a technology based commercial
vertical grow concept designed to reduce the costs of cannabis
cultivation.
●
Filed a provisional patent on an eco-friendly process for
converting plant waste generated by extraction into recycled
building materials that can be used to build new facilities or
update existing ones.
Further Positioning as a Thought Leader Through Continued Media
Exposure
●
Forbes,
“Michigan May Become A
Haven For Cannabis Entrepreneurs If It Learns From California's
Mistakes.”
●
Entrepreneur,
“Why Jeff Sessions' New War on Marijuana Hasn't Frightened
Investors or Cannabis Entrepreneurs.”
●
CNBC, “US cannabis
companies set to gain from Canadian
market.”
●
TheStreet,
“For Cannabis Companies, the Path to Traditional Markets
Isn't Always Straight.”
●
Fox Business,
“More states could join legal marijuana wave this
year.”
●
The Dallas Morning
News, “Pot is illegal in Texas, but cannabis-related
supplier GrowLife sees Grand Prairie as a place to
grow.”
●
Cannabis Now,
“New York’s
CannaGather Meetup Fosters the City’s Infant Cannabis
Industry.”
●
Pot Network “Growlife CEO Marco
Hegyi on marijuana stocks and why you should grow cannabis
vertically.”
●
CNN Money “Pot
Stocks, ETFs, Top News And Data From The Cannabis Industry This
Week.”
●
Terpenes and Testing Magazine, “In Search of
Affordable Cannabis Medicine,” Sept. 12.
●
My Tech Decisions Podcast,
“Editor Jonathan
Blackwood speaks with Marco Hegyi, CEO of GrowLife,
Inc.”
●
The Technology Headlines, “GrowLife:
Best-in-class products for growers of all
sizes”
Participated in Trade Shows and Speaking Engagements
●
CEO Marco Hegyi
presented
on an Investment Panel at the World Medical Cannabis
Conference and Expo in Pittsburg, PA.
●
CEO Marco Hegyi
presented
on a panel entitled “Investing in Ancillary Cannabis
Companies” at the Cannabis World Congress and Business
Expo in Los Angeles.
●
The Company
attended Lift Cannabis
Expo. The conference coins
itself as the “Premier Cannabis Event for the Canadian
Market,” featuring more than 200 exhibitors from across North
America and Europe.
●
The Company
attended MJ Biz Con,
“the largest cannabis conference in the world,” which
was held at the Las Vegas Convention Center. The event attracted
more than 20,000 cannabis professionals and 1,000
exhibitors.
●
The Company
attended HempFest
Calgary. The two-day annual
cannabis trade show was held at Stampede Park in Calgary, Alberta.
HempFest Calgary took place just days before Canada’s Oct.
17, 2018, legalization of cannabis.
●
GrowLife operated as a
sponsor and exhibitor at the
Marijuana Industry Trade Association’s
meeting on April 26, 2018,
at the FOUND: RE hotel in Phoenix, Arizona.
●
GrowLife Regional
Director Jeremy Belmont met with other industry leaders at
the
4th Annual Maine Cannabis Convention Oct. 6-7 to increase
awareness on what the leading “picks-and-shovels”
company in the cannabis space can offer the rapidly-expanding
marketplace, both in Maine and throughout North
America.
●
The Company
exhibited at
The International Surface Event: SURFACES in
Las Vegas Nevada Jan. 30 to Feb. 1, 2018. Specifically, the Company
showcased its entire line of premium, eco-friendly and non-toxic
vinyl flooring products sold under the brand of
FreeFit™.
FOURTH QUARTER AND YEAR-END 2018 FINANCIAL RESULTS
Net Revenue: For the year ending Dec. 31, 2018, GrowLife,
Inc. showed net revenue of $4,573,000, as compared to revenue of
$2,452,104 for the year that ended December 31, 2017 – an
increase of 86.49%.
Balance Sheet: Total Assets for the company were $7,217,948
as of Dec. 31, 2018 as compared to $861,866 of Dec. 31, 2017, an
increase of $6,356,082.
Operating Loss: For the year ending Dec. 31, 2018, GrowLife,
Inc. had an Operating Loss of $4,548,649 as compared to $2,048,954
for the year ending Dec. 31, 2017. The increase related to non-cash
charges and the expansion of our business as discussed
above.
Cash Flow used in Operations: For the year ending Dec. 31,
2018, GrowLife, Inc. had Cash Flow Used in Operations of $3,854,506
as compared to $2,082,493 for the year ending Dec. 31, 2017. The
increase related to non-cash charges and the expansion of our
business as discussed above.
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 of 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:
investors@growlifeinc.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.