The accompanying unaudited condensed consolidated financial statements of GrowLife, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated financial statements have been included. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the Securities and Exchange Commission on March 8, 2019. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results for the year ending December 31, 2019 or any future interim period. These financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report filed on Form 10-K for the year ended December 31, 2018. The results of operations for the nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full fiscal year, or for any other fiscal period. GrowLife, Inc. (GrowLife or the Company) is incorporated under the laws of the State of Delaware and is headquartered in Kirkland, Washington. The Company was founded in 2012 with the Closing of the Agreement and Plan of Merger with SGT Merger Corporation. On June 7, 2013, GrowLife Hydroponics completed the purchase of Rocky Mountain Hydroponics, LLC, a Colorado limited liability company (RMC), and Evergreen Garden Center, LLC, a Maine limited liability company (EGC). The effective date of the purchase was June 7, 2013. The Companys goal of becoming the nations largest cultivation facility service provider for the production of organics, herbs and greens and plant-based medicines has not changed. The Companys mission is to best serve more cultivators in the design, build-out, expansion and maintenance of their facilities with products of high quality, exceptional value and competitive price. Through a nationwide network of knowledgeable representatives, GrowLife provides essential and hard-to-find goods including media (i.e., farming soil), industry-leading hydroponics equipment, organic plant nutrients, and thousands more products to specialty grow operations across the United States. On October 15, 2018, in connection with the Companys strategy to become a dominate cultivation facilities provider, the Company closed the Purchase and Sale Agreement with EZ-CLONE Enterprises, Inc., a California corporation. EZ-CLONE is the manufacturer of multiple award-winning products specifically designed for the commercial cloning and propagation stage of indoor plant cultivation including cannabis, food, and other hydroponic farming. The Company acquired 51% of EZ-CLONE stock for $2,040,000, payable as follows: (i) a cash payment of $645,000; and (ii) the issuance of 107,307,692 restricted shares of the Companys common stock at a price of $0.013 per share or $1,395,000. The Company is consolidating the operations of EZ-Clone and treating the 49% that the Company does not control as non-controlling interest. The Company has the obligation with the delivery of EZ-CLONE common stock to acquire the remaining 49% of EZ-CLONE within one year for $1,960,000, payable as follows: (i) a cash payment of $855,000; and (ii) the issuance of 85,000,000 shares of the Companys common stock at a price of $0.013 per share or $1,105,000. On November 5, 2019, the Company extended the closing of the remaining 49% with one 24.5% shareholder by up to nine months by agreeing to a 20% extension fee of the $855,000 cash payment, payable at the earlier of the closing of $2,000,000 in funding or the nine months. The Company continues to negotiate with the second shareholder for the remaining 24.5%. As of September 30, 2019, the Company closed retail stores in Portland, Maine, Encino, California and Calgary, Canada and online sales. Also, we are expecting to close the sale of the flooring division located in Grand Prairie, Texas. The Company expects to reduce losses and cash costs by $100,000 per month starting October 1, 2019. As of September 30, 2019, The Company recorded restructuring expense of $306,000 for the closure of the flooring division primarily related to equipment write down and $250,000 for the closure of the retail stores, related store leases and online sales. See Note 4 for additional details. On October 17, 2017, the Company was informed by Alpine Securities Corporation (Alpine) that Alpine has demonstrated compliance with the Financial Industry Regulatory Authority (FINRA) Rule 6432 and Rule 15c2-11 under the Securities Exchange Act of 1934. The Company filed an amended application with the OTC Markets to list the Companys common stock on the OTCQB and begin to trade on this market as of March 20, 2018. As of March 4, 2019, the Company began to trade on the Pink Sheet stocks system. The Companys bid price had closed below $0.01 for more than 30 consecutive calendar days.