Attached files
EXHIBIT 99.4
FORM OF BROKER LETTER TO CLIENTS WHO ARE BENEFICIAL
HOLDERS
GROWLIFE, INC.
Subscription
Rights to Purchase Units
Offered
Pursuant to Subscription Rights Distributed to Stockholders of
GrowLife, Inc.
[______],
2018
To our
Clients:
This
letter is being distributed to our clients who are holders of
Growlife, Inc. (the “Company”) 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 1/2 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, holders will receive one Subscription
Right for every share of Common Stock owned or deemed 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 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 your subscription in full. If exercises of Basic
Subscription Rights exceed the number of Units available in the
Rights Offering, the remaining Units will be allocated in
proportion to the number of shares of the Company’s 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 Rights, 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 Rights 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 the Company will have no further
obligations to you. 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”). 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 Shares 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.
-1-
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.
Enclosed
are copies of the following documents:
1.
Prospectus
2.
Instructions as to
Use of Subscription Rights Certificate
3.
Form of Beneficial
Owner Election
4.
Notice of
Guaranteed Delivery
5.
Return envelope,
addressed to Issuer Direct Corporation, (the “Subscription
Agent”)
THE
MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE BENEFICIAL
OWNER OF COMMON STOCK OR ELIGIBLE WARRANTS TO PURCHASE COMMON STOCK
HELD BY US IN YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME.
EXERCISES OF SUBSCRIPTION RIGHTS MAY BE MADE ONLY BY US AS THE
RECORD OWNER AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly,
we request instructions as to whether you wish us to elect to
subscribe for any Units to which you are entitled pursuant to the
terms and subject to the conditions set forth in the enclosed
Prospectus and other materials. However, we urge you to read the
Prospectus and other enclosed materials carefully before
instructing us to exercise your Subscription Rights. Your
instructions to us should be forwarded as promptly as possible in
order to permit us to exercise Subscription Rights on your behalf
in accordance with the provisions of the Rights Offering. The
Rights Offering will expire at 6:00 p.m., Eastern Time, on the
Expiration Date. You are encouraged to forward your instructions to
us before the Expiration Date to allow us ample time to act upon
your instructions. A holder cannot revoke the exercise of a
Subscription Right.
If you
wish to have us, on your behalf, exercise the Subscription Rights
for any Units to which you are entitled, please so instruct us by
timely completing, executing, and returning to us the Beneficial
Owner Election Form enclosed with this notice.
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
-2-