Hydrofarm Holdings Group Closes $8.3 Million Registered Direct Offering and Private Placement in Connection with Elimination of $109 Million Term Loan

The term-loan elimination removes approximately $12 million in annual debt service.

Rhea-AI Summary

Hydrofarm Holdings Group (Nasdaq: HYFM) closed approximately $8.3 million in equity financing alongside the elimination of its $109 million term loan.

The financing included 1,599,400 registered shares at $0.905 each, plus a private placement of 7,611,575 unregistered shares or pre-funded warrants and 9,210,975 common warrants. Gross proceeds exclude placement agent fees and offering expenses.

Lenders received 27.5 million non-voting convertible preferred shares and warrants for 27.5 million common shares at $0.78 each. All term-loan obligations were discharged and related liens released. Preferred shares convert one-for-one; conversion and lender-warrant exercise require stockholder approval.

Pro forma stockholders’ equity exceeds Nasdaq’s $2.5 million minimum. Hydrofarm believes it has regained compliance with the equity rule following its previously disclosed noncompliance.

5 points · 2 major

MixediHow this balance works

How this balance works

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It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

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2 major · 6 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major pointApproximately $8.3 million in gross proceeds raised through the completed registered direct offering and concurrent private placement. 2.2× market cap
• Major point$109 million term loan eliminated, with all related obligations discharged and liens and security interests released. 29× market cap
• Moderate pointPro forma stockholders’ equity exceeds $2.5 million; Hydrofarm believes it has regained Nasdaq equity-rule compliance.
• Minor pointApproximately $12 million of annual debt service eliminated.
• Minor pointOfficers and directors or their affiliates participated in the offering on the same terms as other investors.

Negative

• Major point7,611,575 unregistered shares or pre-funded warrants sold alongside 9,210,975 common warrants, adding dilution exposure.
• Major point. Forward-looking: it has not happened yet and may not happen.27.5 million preferred shares issued to lenders, each with $1.00 stated value and one-for-one common-stock conversion.
• Minor point1,599,400 registered common shares at $0.905 each issued, diluting existing holders.
• Minor point. Forward-looking: it has not happened yet and may not happen.Lender warrants for 27.5 million common shares at $0.78 each create additional potential dilution.
• Minor pointStockholder approval remains required for preferred-stock conversion and lender-warrant exercise; Hydrofarm intends to seek it promptly.
• Minor pointPlacement agent fees and offering expenses reduce the approximately $8.3 million gross proceeds.

News Explained

The term-loan payoff removes approximately $12 million in annual debt service.

The offering and term-loan payoff have closed; Hydrofarm plans to use the net proceeds for general corporate purposes.

The payoff eliminates approximately $12 million in annual debt service.

Hydrofarm has agreed to file resale registration statements for the unregistered private-placement securities and lender-issued preferred stock and warrants, as well as common shares issuable upon conversion or exercise.

Key Figures

Term Loan eliminated: $109 million Annual debt service eliminated: $12 million Gross proceeds: $8.3 million +5 more

Term Loan eliminated

$109 million

Discharged in full at closing

Annual debt service eliminated

$12 million

Stated in the announcement headline

Gross proceeds

$8.3 million

Before placement agent fee and offering expenses

Registered offering

1,599,400 shares at $0.905 per share

Registered direct offering

Private placement shares

7,611,575 shares

Unregistered shares or pre-funded warrants in lieu

Common Warrants

9,210,975 warrants

Issued in the concurrent private placement

Lender securities

27.5 million preferred shares and warrants for 27.5 million common shares

Issued in satisfaction of the Term Loan

Nasdaq Equity Rule minimum

$2.5 million

Pro forma stockholders’ equity exceeds the stated requirement

Historical Context

2 past events · Latest: Aug 14

2 events

1. Aug 14

   Q2 results

   24h Move

   -15.0%

   Reported the Term Loan in default under forbearance, with $114.4 million principal outstanding.

2. Aug 03

   Asset sale

   24h Move

   +298.1%

   Aurora Peat sale proceeds were designated to reduce outstanding Term Loan debt.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

registered direct offering, private placement, pre-funded warrants, at-the-market

4 terms

registered direct offering financial

"closed its previously announced registered direct offering"

A registered direct offering is a way for a company to sell new shares of its stock directly to select investors with regulatory approval. This method allows the company to raise funds quickly and efficiently without needing a public auction, similar to offering exclusive access to a limited number of buyers. For investors, it often provides an opportunity to purchase shares at a favorable price, while giving the company immediate access to capital.

private placement financial

"concurrent private placement of 7,611,575 unregistered shares"

A private placement is a sale of securities directly to a selected group of investors, typically institutions or accredited investors, instead of through a public offering. It lets a company raise money faster and with fewer regulatory steps; for existing shareholders it matters because the newly issued shares, often sold at a discount, increase the share count and can dilute their ownership.

pre-funded warrants financial

"pre-funded warrants (“Pre-Funded Warrants”) in lieu thereof"

Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.

at-the-market financial

"priced at-the-market under Nasdaq rules"

"At-the-market" is a method for companies to sell new shares of stock directly into the open market over time, rather than all at once. It allows companies to raise money gradually, similar to selling slices of a pie instead of the entire pie at once, which can help manage the sale's impact on the stock price. This approach gives investors a steady supply of shares while providing companies with flexible funding options.

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Eliminates approximately $12 million of annual debt service;

Pro forma stockholders’ equity exceeds Nasdaq’s $2.5 million Equity Rule requirement

SHOEMAKERSVILLE, Pa., Oct. 28, 2026 (GLOBE NEWSWIRE) -- Hydrofarm Holdings Group, Inc. (“Hydrofarm” or the “Company”) (Nasdaq: HYFM), a leading independent manufacturer and distributor of branded supplies and equipment for controlled environment agriculture, today announced that it has closed its previously announced registered direct offering of 1,599,400 shares of common stock at $0.905 per share, priced at-the-market under Nasdaq rules, and concurrent private placement of 7,611,575 unregistered shares of common stock (or pre-funded warrants (“Pre-Funded Warrants”) in lieu thereof) and 9,210,975 common stock purchase warrants (“Common Warrants”). Gross proceeds to Hydrofarm were approximately $8.3 million, before deducting the placement agent fee and offering expenses. All of the shares of common stock, Pre-Funded Warrants and Common Warrants were sold by the Company.

Bill Toler, the Company’s Chairman and Chief Executive Officer, as well as additional officers and directors of the Company, or their respective affiliates, participated in the offering on the same terms as the other investors.

The Company intends to use the net proceeds for general corporate purposes.

ThinkEquity acted as sole placement agent and advisor to Hydrofarm in connection with the transactions.

Concurrently with the closing, the Company entered into a payoff letter with the holders of its Senior Secured Term Loan (the “Term Loan”). In satisfaction of the Term Loan in full, the Company issued to the lenders 27.5 million shares of Series 1 Non-Voting Convertible Preferred Stock and warrants to purchase 27.5 million shares of common stock at an exercise price of $0.78 per share (the “Lender Warrants”). Upon closing, all indebtedness, liabilities and obligations under the Term Loan documents were discharged and satisfied in full, and all liens and security interests securing them were released. Each share of Series 1 Non-Voting Convertible Preferred Stock has a stated value of $1.00 and converts into one share of common stock. The conversion of the Series 1 Non-Voting Convertible Preferred Stock and the exercise of the Lender Warrants are subject to stockholder approval, which the Company intends to seek as promptly as practicable.

Nasdaq Listing Compliance

As previously disclosed, the Company was not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires a minimum of $2.5 million in stockholders’ equity (the “Equity Rule”). Giving effect to the transactions described above, the Company’s pro forma stockholders’ equity exceeds the $2.5 million minimum, and the Company believes it has regained compliance with the Equity Rule. Additional information is set forth in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on October 27, 2026.

The registered direct offering was made pursuant to an effective shelf registration statement on Form S-3 previously filed with the SEC and declared effective on December 10, 2025, the base prospectus dated December 10, 2025 thereunder and a prospectus supplement to the base prospectus to be filed with the SEC. Copies of the final prospectus, when available, may be obtained from ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004. The final prospectus will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov.

The securities sold in the concurrent private placement, and the Series 1 Non-Voting Convertible Preferred Stock and Lender Warrants issued to the holders of the Term Loan, have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws, and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. Hydrofarm has agreed to file registration statements with the SEC covering the resale of those securities and the shares of common stock issuable upon their exercise or conversion. Any such resale will be made only by means of a prospectus.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Hydrofarm Holdings Group, Inc.

Hydrofarm is a leading independent manufacturer and distributor of supplies and equipment for controlled environment agriculture, including plant nutrition, growing media, horticultural lighting and climate control solutions, spanning a portfolio of proprietary and select partner brands. The Company manufactures its proprietary plant nutrition and growing media brands at its manufacturing center of excellence in Eugene, Oregon, and, through its logistics services platform, provides third-party warehousing, fulfillment and distribution services across a wide range of industries. For nearly 50 years, Hydrofarm has helped growers make growing easier and more productive. The Company’s mission is to empower growers, farmers and cultivators with products that enable greater quality, efficiency, consistency and speed.

www.Hydrofarm.com

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “believe,” “expect,” “intend,” “anticipate,” “plan,” “will,” “project,” “potential” and similar expressions. They include, among others, statements regarding: the intended use of the net proceeds of the offering; the Company’s expectation that it has no outstanding indebtedness; the receipt of stockholder approval for the conversion of the Series 1 Non-Voting Convertible Preferred Stock and the exercise of the Lender Warrants, and the timing of the related proxy solicitation; whether any warrants will be exercised and the amount of any additional proceeds therefrom; the filing and effectiveness of resale registration statements for the securities issued in the concurrent private placement and to the holders of the Term Loan; the Company’s pro forma capitalization and stockholders’ equity; the Company’s belief that it has regained compliance with Nasdaq Listing Rule 5550(b)(1) and its ability to maintain compliance with Nasdaq continued listing requirements, including the minimum bid-price rule; the Company’s competitive position and the strength of its brand portfolio; expected benefits of the consolidation of manufacturing into the Company’s Eugene, Oregon manufacturing center of excellence, including productivity and cost improvements; the objectives, scope and anticipated results of Project Agility, including growth of the Company’s logistics services platform; and the Company’s future financial performance, margins, liquidity and capital allocation plans.

These statements are based on management’s current expectations and assumptions. They are subject to risks and uncertainties that could cause actual results to differ materially, including: the risk that stockholders do not approve the conversion of the Series 1 Non-Voting Convertible Preferred Stock or the exercise of the Lender Warrants, or that approval is delayed; the risk that the Panel does not find that the Company has regained compliance with the Equity Rule, or that the Company does not maintain compliance with Nasdaq continued listing requirements, including the minimum bid-price rule, and the risk that its securities could be delisted; the dilution to existing stockholders from the issuance of common stock, Pre-Funded Warrants, Common Warrants, Lender Warrants and Series 1 Non-Voting Convertible Preferred Stock, and from any later conversion or exercise; the impact on the market price of the common stock of future sales of shares; the risk that the Company cannot file or obtain effectiveness of the required resale registration statements; the final accounting treatment of the Series 1 Non-Voting Convertible Preferred Stock and the warrants issued in the transactions; the Company’s history of operating losses; demand conditions in the CEA and hydroponics markets; the Company’s ability to execute on Project Agility and its other growth initiatives; and the other factors described under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent periodic reports filed with the SEC. Pro forma figures are unaudited and illustrative and are not necessarily indicative of the Company’s actual financial position. Forward-looking statements speak only as of the date of this release, and the Company undertakes no obligation to update them except as required by law.

Contact: ir@hydrofarm.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much did Hydrofarm raise in its registered direct offering and private placement?

Hydrofarm raised approximately $8.3 million in gross proceeds before placement agent fees and offering expenses. The transactions combined a registered direct offering with a concurrent private placement.

How did Hydrofarm eliminate its $109 million term loan?

Hydrofarm satisfied the term loan by issuing lenders 27.5 million non-voting convertible preferred shares and warrants to purchase 27.5 million common shares at $0.78 each. All obligations under the loan documents were discharged, and the related liens and security interests were released.

What does Hydrofarm plan to do with the offering proceeds?

Hydrofarm intends to use the net proceeds for general corporate purposes.