Attached files
EXHIBIT 99.3
FORM OF LETTER TO BROKERS, DEALERS, BANKS AND OTHER
NOMINEES
GROWLIFE, INC.
Subscription
Rights to Purchase Units
Offered
Pursuant to Subscription Rights Distributed to Stockholders of
GrowLife, Inc.
[______],
2018
To
Brokers, Dealers, Banks and Other Nominees:
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
non-transferable subscription rights (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
by the Company in its sole discretion (as it may be extended, the
“Expiration Date”).
As
described in the Prospectus, each beneficial owner of shares of
Common Stock is entitled to one Subscription Right for every share
of Common Stock owned or deemed to be owned by such beneficial
owner on the Record Date, evidenced by non-transferable
Subscription Rights certificates (the “Subscription Rights
Certificates”) registered in the name of the record holder or
its nominee. Each Subscription Right entitles 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 Units but will only accept
subscriptions for an aggregate of $6,000,000 or 500,000,000 Units.
Accordingly, sufficient Units may not be available to honor all
subscriptions 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 was
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.
Holders
who fully exercise their Basic Subscription Right will be entitled
to subscribe for additional Units that remain unsubscribed as a
result of any unexercised Basic Subscription Right (the
“Over-Subscription Right”). Subject to stock ownership
limitations described in the Prospectus, if sufficient Units are
available, all Over-Subscription Right requests will be honored in
full. If Over-Subscription Right requests for Units exceed the
remaining Units available, the remaining Units will be prorated
among rights holders who oversubscribe, based on the number of
basic subscription shares to which they have subscribed, subject to
stock ownership limitations as described in the
Prospectus.
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The
Company will not issue fractional shares or Warrants. Fractional
shares or Warrants 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 following the
expiration of the Rights Offering.
The
Company is asking persons who hold shares of the Company’s
Common Stock or eligible warrants to purchase the Company’s
Common Stock beneficially, and who have received the Subscription
Rights distributable with respect to those securities through a
broker, dealer, bank, or other nominee, to contact the appropriate
institution or nominee and request it to effect the transactions
for them. If you exercise Subscription Rights on behalf of
beneficial owners, you will be required to certify to the
Subscription Agent and the Company, in connection with such
exercise, as to the aggregate number of Subscription Rights that
have been exercised pursuant to the Basic Subscription Right,
whether the Basic Subscription Rights of each beneficial owner of
Subscription Rights on whose behalf you are acting has been
exercised in full, and the number of Units being subscribed for
pursuant to the Over-Subscription Right by each beneficial owner of
Subscription Rights on whose behalf you are acting.
The
Company is asking you to contact your clients for whom you hold
shares of Common Stock or eligible warrant to purchase Common Stock
registered in your name or the name of your nominee to obtain
instruction with respect to the Subscription Rights.
Enclosed
are copies of the following documents:
1.
Prospectus
2.
Subscription Rights
Certificate
3.
Instructions as to
use of Subscription Rights Certificate
4.
Form of Letter to
Stockholders who are Beneficial Holders
5.
Beneficial Owner
Election
6.
Nominee Holder
Certification
7.
Notice of
Guaranteed Delivery
8.
Return envelope,
addressed to Issuer Direct Corporation.
All
commissions, fees and other expenses (including brokerage
commissions and transfer taxes), other than fees and expenses of
the Subscription Agent, incurred in connection with the exercise of
the Subscription Rights will be for the account of the holder, and
none of such commissions, fees or expenses will be paid by the
Company or the Subscription Agent.
Your
prompt action is requested. To exercise the 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 property completed and duly
executed Subscription Rights Certificate and full payment of the
Subscription Price, including final clearance of any checks, prior
to the Expiration Date.
A
holder cannot revoke the exercise of a 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
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL MAKE YOU OR ANY
OTHER PERSON AN AGENT OF THE COMPANY, THE DEALER-MANAGER, THE
SUBSCRIPTION AGENT, THE INFORMATION AGENT OR ANY OTHER PERSON
MAKING OR DEEMED TO BE MAKING OFFERS OF THE SECURITIES ISSUABLE
UPON VALID EXERCISE OF THE SUBSCRIPTION RIGHTS, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM
WITH RESPECT TO THE OFFERING, EXCEPT FOR STATEMENTS MADE IN THE
PROSPECTUS.
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