Item 1.01 Entry into a Material Definitive Agreement.
On October 12, 2020, GrowLife, Inc., a Delaware corporation (the
“Company”), closed funding transactions totaling $1,127,602 ($946,205 net of fees, commissions and costs). The transactions
described below.
Securities Purchase Agreement and Self-Amortization Promissory Note
with Labrys Fund, L.P, a Delaware limited partnership (“Labrys”)
On August 31, 2020, the Company executed the following agreements
with Labrys: (i) Securities Purchase Agreement; and (ii) Self-Amortization Promissory Note (“Note”); (collectively
the “Labrys Agreements”). The Company entered into the Labrys Agreements with the intent to acquire working capital
to grow the Company’s businesses and complete the EZ-CLONE Enterprises, Inc. acquisition.
The total amount of funding under the Labrys Agreements is $632,750.
The Notes carry an original issue discount of $75,000, a transaction expense amount of $8,500, and a fee to J. H. Darbie &
Co. of $33,750, for total debt of $750,000 (“Debt”). The Note has an amortization schedule of $250,000 on November
30, 2020 and $51,042 at each month end from December 2020 through November 30, 2021. The Company issued commitment shares of 1,662,000
shares related to the Labrys Agreements. The Company agreed to reserve 5,043,859 shares of its common stock for issuance if any
Debt is converted. The Debt is due on or before November 30, 2021. The Debt carries an interest rate of twelve percent (12%). The
Debt is convertible into the Company’s common stock at the closing price the day before the conversion, subject to adjustment
as provided for in the Note.
Securities Purchase Agreement and Self-Amortization Promissory Note
with EMA Financial LLC, a Delaware limited corporation (“EMA”)
On October 2, 2020, the Company executed the following agreements
with EMA: (i) Securities Purchase Agreement; and (ii) Self-Amortization Promissory Note (“Note”); (collectively the
“EMA Agreements”). The Company entered into the EMA Agreements with the intent to acquire working capital to grow the
Company’s businesses and complete the EZ-CLONE Enterprises, Inc. acquisition.
The total amount of funding under the EMA Agreements is $183,455. The Notes carry
an original issue discount of $21,100, a transaction expense amount of $6,500, and a fee to J. H. Darbie & Co. of
$21,150, for total debt of $221,000 (“Debt”). The Note has an amortization schedule of $19,550 on January 2, 2021
and monthly from February 2021 through January 2022. The Company issued commitment shares of 550,000 shares related to the
EMA Agreements. The Company agreed to reserve 1,486,258 shares of its common stock for issuance if any Debt is converted.
The Debt is due on or before January 2, 2022. The Debt carries an interest rate of twelve percent (12%). The Debt is convertible
into the Company’s common stock at the closing price the day before the conversion, subject to adjustment as provided
for in the Note.
Securities Purchase Agreement and Self-Amortization Promissory Note with
FirstFire Global Opportunities Fund, LLC, a Delaware limited corporation (“FF”)
On October 2, 2020, the Company executed the following agreements with FF: (i)
Securities Purchase Agreement; and (ii) Self-Amortization Promissory Note (“Note”); (collectively the “FF
Agreements”). The Company entered into the FF Agreements with the intent to acquire reduce debt.
The total amount of funding under the FF Agreements is $130,000. The Notes carry
an original issue discount of $14,952, a transaction expense amount of $4,600, and a fee to J. H. Darbie & Co. of $7,050,
for total debt of $156,602 (“Debt”). The Note has an amortization schedule of $13,853 on January 11, 2021 and
monthly from February 2021 through January 2022. The Company issued commitment shares of 450,000 shares related to the FF
Agreements. The Company agreed to reserve 1,486,258 shares of its common stock for issuance if any Debt is converted. The
Debt is due on or before January 12, 2022. The Debt carries an interest rate of twelve percent (12%). The Debt is convertible
into the Company’s common stock at the closing price the day before the conversion, subject to adjustment as provided
for in the Note.
The Labrys, EMA and FF Agreements are qualified in their entirety by reference to
the Labrys, EMA and FF Agreements, copies of which are attached to this Current Report on Form 8-K as Exhibit 10.1-10.3,
respectively, and incorporated by reference into this Item 1.01. Certain capitalized terms used herein but not otherwise
defined shall have the meaning ascribed thereto in the Transaction Documents.
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