Attached files
EXHIBIT 99.2
FORM OF LETTER TO STOCKHOLDERS WHO ARE RECORD HOLDERS
GROWLIFE, INC.
Subscription
Rights to Purchase Units
Offered
Pursuant to Subscription Rights Distributed to Stockholders of
GrowLife, Inc.
______________,
2018
Dear
Stockholder:
This
letter is being distributed by GrowLife, Inc. (the
“Company”) to all holders of record of shares of its
common stock, $0.0001 par value per share (the “Common
Stock”) as of 6:00 p.m., Eastern Time on October 12, 2018
(the “Record Date”), in connection with a distribution
in a rights offering (the “Rights Offering”) of a
non-transferable subscription right (each a “Subscription
Right”) to subscribe for and purchase one Unit for each share
of Common Stock owned as of the Record Date. Each Unit consists of
one share of the Company’s Common Stock and two ½
Warrants, consisting of one ½ warrant which will be
exercisable for one share of our Common Stock at an exercise price
of $0.018 per share and one ½ warrant exercisable for one
share of our Common Stock at an exercise price of $0.024, which we
refer to collectively as the Warrant. Each whole Warrant entitles
the holder to purchase one share of our Common Stock. The
Subscription Rights and Units are described in the prospectus dated
[______], 2018 (a copy of which accompanies this notice) (the
“Prospectus”). Pursuant to the Rights Offering, the
Company is issuing Subscription Rights to subscribe for up to
500,000,000 Units on the terms and subject to the conditions
described in the Prospectus, at a subscription price of $0.012 per
Unit (the “Subscription Price”).
The
Subscription Rights may be exercised at any time during the
subscription period, which commences on October 13, 2018 and ends
at 6:00 p.m., Eastern Time, on November 12, 2018 unless extended in
the sole discretion of the Company (as it may be extended, the
“Expiration Date”). As described in the Prospectus,
holders will receive one Subscription Right for every share of
Common Stock owned or deemed to be owned on the Record Date,
evidenced by non-transferable subscription rights certificates (the
“Subscription Rights Certificates”). Each Subscription
Right entitles the holder to purchase one Unit at the Subscription
Price (the “Basic Subscription Right”).
Based
on 2,997,279,413 shares of common stock outstanding as of
September 17, 2018, we would grant Subscription Rights to acquire
approximately 2,997,279,413 shares but will only accept
subscriptions for an aggregate amount of $6,000,000 or 500,000,000
Units. Accordingly, sufficient Units may not be available to honor
your subscription in full. If exercises of Basic Subscription
Rights exceed the number of Units available in the Rights Offering,
we will allocate the available Units in proportion to the number of
shares of our Common Stock each of the record holders owned or were
deemed to own on the Record Date, relative to the number of shares
owned or deemed to be owned on the Record Date by all record
holders exercising the basic subscription right. If this pro rata
allocation results in any record holders receiving a greater number
of Units than the record holder subscribed for pursuant to the
exercise of the Basic Subscription Right, then such record holder
will be allocated only that number of Units for which the record
holder subscribed, and the remaining Units will be allocated among
all other record holders exercising their Basic Subscription Right
on the same pro rata basis described above. The proration process
will be repeated until all Units have been allocated. If for any
reason the amount of Units allocated to you is less than you have
subscribed for, then the excess funds held by the Subscription
Agent on your behalf will be returned to you, without interest, as
soon as practicable after the Rights Offering has expired and all
prorating calculations and reductions contemplated by the terms of
the Rights Offering have been effected, and we will have no further
obligations to you.
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Holders
who fully exercise their Basic Subscription Right are entitled to
subscribe for additional Units that remain unsubscribed as a result
of any unexercised Basic Subscription Rights pursuant to the terms
and conditions of the Rights Offering, subject to proration and
stock ownership limitations as described in the Prospectus (the
“Over-Subscription Right”).
The
Company will not issue fractional shares. Fractional shares
resulting from the exercise of the Basic Subscription Right and the
Over-Subscription Right will be eliminated by rounding down to the
nearest whole share of Common Stock and Warrant, as applicable. Any
excess subscription payment received by the Subscription Agent will
be returned, without interest or penalty, as soon as practicable
after the Rights Offering has expired.
Enclosed
are copies of the following documents:
1.
Prospectus
2.
Subscription Rights
Certificate
3.
Instructions as to
use of Subscription Rights Certificate
4.
Notice of
Guaranteed Delivery
5.
Return envelope,
addressed to Issuer Direct Corporation (the “Subscription
Agent”)
Your
prompt attention is requested. To exercise your Subscription
Rights, you should deliver the properly completed and signed
Subscription Rights Certificate, with payment of the Subscription
Price in full for each Unit subscribed for pursuant to the Basic
Subscription Right and Over-Subscription Right, if applicable, to
the Subscription Agent, as indicated in the Prospectus. The
Subscription Agent must receive the properly completed and duly
executed Subscription Certificate and full payment of the
Subscription Price, including final clearance of any checks, prior
to the Expiration Date. You cannot revoke the exercise of your
Subscription Right. Subscription Rights not exercised at or prior
to 6:00 p.m., Eastern Time, on the Expiration Date will
expire.
ANY
QUESTIONS OR REQUESTS FOR ASSISTANCE CONCERNING THE RIGHTS OFFERING
SHOULD BE DIRECTED TO ISSUER DIRECT CORPORATION, THE SUBSCRIPTION
AGENT, TOLL-FREE AT (888) 301-2498 OR BY EMAIL AT
CORPORATE-ACTIONS@ISSUERDIRECT.COM
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