Item 8.01. Other Events.
Class Actions Alleging Violations of Federal Securities Laws
On April 18, 2014, a class action lawsuit alleging violations of federal
securities laws was filed against GrowLife, Inc., a Delaware corporation (the
"Company") in the United States District Court, Central District of California
(Randy Romero v. Growlife, Inc., et al.; Case No.: 2:14-cv-03015) (the "Romero
Action"). The Romero Action was previously disclosed via Current Report on Form
8-K dated May 8, 2014.
On May 30, 2014, the United States District Court, Central District of
California (the "Court") ordered the Romero Action consolidated with another
class action alleging securities violations also filed with the Court against
the Company entitled Gerald Young v. Growlife, Inc., et al. (Case No.:
2:14-cv-03183) (the "Young Action"). The Young Action was filed on April 25,
2014 but not served on the Company. Counsel for Romero and Young will work in
concert with the Court to determine a Lead Plaintiff and file a consolidated
On June 5, 2014, the Company entered a general appearance in connection with a
third class action alleging securities violations filed with the Court entitled
Rochelle Wolf v. Growlife, Inc., et al. (Case No.: 2:14-cv-04112)(the "Wolf
Action"). The Wolf Action has also been consolidated into the Romero Action as
was done with the Young Action based on the Court's standing order and
procedural rules. As a result, the allegations from all three actions will be
consolidated into a single complaint for the Company to defend.
Shareholder Derivative Action
On May 15, 2014, a shareholder derivative action was filed against the Board of
Directors (the "Directors") of the Company with the Court entitled Steve Roof v.
Sterling C. Scott, et al. (2:14-cv-03777)(the "Roof Derivative Action"). The
Company was also named as a nominal defendant. The Roof Derivative Action
alleges claims against the Directors including breach of fiduciary duty and duty
of loyalty, abuse of control and unjust enrichment. The Company has not yet
formally been served or appeared in this action.