GrowLife Inc. (OTCMKTS:PHOT) has announced that they have completed an agreement with CANX USA, LLC to terminate all previous agreements. The agreements to be terminated include the one that entitled CANX to get 540 million GrowLife shares of common stock at $0.33 in relation to the exercise of Warrants.
Details of the termination agreement
The announcement stated that all rights in place and future rights and obligations between GrowLife and CANX as well as any right that will arise out of the prior agreements or related to the agreements in place will be terminated effective immediately including Warrants. In exchange for the termination, CANX will be entitled to a one-time lump sum issuance of GrowLIfe common stock of approximately $1 million priced as of 7 February 2019 which closed at $0.008.
Alternatively, CANX would benefit by being issued with 125 million shares of restricted stock that shall be issued directly. Following the development, the two companies have severed their relationship and therefore there are no further rights or obligations between them.
Termination of agreement move to strengthen the balance sheet
Speaking about the termination the GrowLife CEO, Marco Hegyi said that following years of extensive collaborative discussions, GrowLife had decided to take a significant step aimed at strengthening its balance sheet and he was pleased to announce the cancellations of CANX warrants to acquire more than 540 million shares of the common stock. He added that although CANX gave the necessary support to GrowLife in 2013 thus leading to their entitlement of 540 million common stock shares at $0.033, most GrowLife investors considered it to be a suppressive overhang to the company’s share price.
The issuance of the 125 million restricted stoke at a share price of $0.008 means that the company has settled and retired the complete overhang of CANX. The move is considered to be a vital move that the company made and it is a win-win situation for shareholders of GrowLife as well as CANX investors.