false
0001695295
0001695295
2026-07-31
2026-07-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 31, 2026
Hydrofarm Holdings Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware | | 001-39773 | | 81-4895761 |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
1510 Main Street
Shoemakersville, PA 19555
(Address of Principal Executive
Offices) (Zip Code)
Registrant’s telephone number, including area code: (707) 765-9990
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common Stock, $0.0001 par value per share | HYFM | Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into Material Definitive Agreement.
On July 31, 2026 (the “Closing Date”), Hydrofarm Holdings Group, Inc., a Delaware corporation (the “Company”), through its wholly owned subsidiaries Aurora International, LLC, a Delaware limited liability company (the “Seller”) and Aurora Peat Products ULC, an Alberta unlimited liability corporation (“APP”), entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with 2817049 Alberta Ltd., an Alberta corporation (the “Buyer”). Pursuant to the terms of the Share Purchase Agreement, Seller sold to Buyer and Buyer purchased from Seller all the issued and outstanding shares of APP for $16 million, subject to adjustments set forth in the Share Purchase Agreement (the “Transaction”). The net proceeds from the Transaction will be applied to reduce outstanding debt under the Company's $125 million senior secured term loan (the “Term Loan”). The Share Purchase Agreement contains customary representations and warranties of the parties, covenants and indemnification provisions. The representations, warranties and covenants contained in the Share Purchase Agreement were made solely for the benefit of the parties to the Share Purchase Agreement and may be subject to limitations agreed upon by the contracting parties.
In connection with the Share Purchase Agreement, the Seller and Buyer entered into a secured promissory note on the Closing Date, pursuant to which the Buyer issued, in favor of the Seller, a promissory note in the principal amount of $5 million (the “Principal Amount”), representing a deferred portion of the purchase price payable to the Seller under the Share Purchase Agreement. The secured promissory note was assigned to the lenders of the Company's Term Loan.
In connection with the Share Purchase Agreement, Hydrofarm LLC and APP entered into a Supply Agreement on the Closing Date (the “Supply Agreement”), pursuant to which each of Hydrofarm LLC and APP will produce and supply certain goods for the other party, subject to the terms and conditions therein.
The foregoing description of the Share Purchase Agreement and the transactions contemplated thereby including the Transaction, does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the Share Purchase Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein to the extent required to be disclosed under this Item 2.01.
Item 7.01 Regulation FD Disclosure.
On August 3, 2026, the Company issued a press release announcing the Transaction. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 7.01 (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(b) Pro forma financial information. The pro forma financial information required by Item 9.01(b) of Form 8-K is filed herewith as Exhibit 99.2 and is incorporated herein by reference.
(d) Exhibits. The following exhibits are being filed with this Current Report on Form 8-K.
Exhibit No. | | Description |
2.1+ | | Share Purchase Agreement dated as of July 31, 2026 by and among Aurora International, LLC, Aurora Peat Products ULC, and 2817049 Alberta Ltd. |
99.1 | | Press Release dated August 3, 2026. |
99.2 | | Unaudited pro forma condensed consolidated financial information for Hydrofarm Holdings Group, Inc. as of and for the fiscal quarter ended March 31, 2026 and for the fiscal year ended December 31, 2025. |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
+ In accordance with Item 601(b)(10)(iv) of Regulation S-K, certain information (indicated by “[***]”) has been excluded from this exhibit because it is both not material and private or confidential. A copy of the omitted portion will be furnished to the Securities and Exchange Commission upon request. Additionally, certain schedules and exhibits have been omitted from this filing pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished to the Securities and Exchange Commission upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Hydrofarm Holdings Group, Inc. |
| | | |
Date: August 6, 2026 | By: | /s/ William Toler |
| | Name: | William Toler |
| | Title: | Chief Executive Officer & Chairman of the Board of Directors |
| | | (Principal Executive Officer) |
Exhibit 99.1
Hydrofarm Completes Sale of Aurora Peat Products and Launches Project Agility to Scale Its Logistics Services Platform
$16 million transaction reduces debt and simplifies the Company’s operating footprint
SHOEMAKERSVILLE, Pa., August 3, 2026 — Hydrofarm Holdings Group, Inc. (Nasdaq: HYFM) (“Hydrofarm” or the “Company”), today announced that it has completed the sale of Aurora Peat Products ULC (“Aurora Peat”) to Raven Holdings LLC, a private company, for total consideration of $16 million, a portion of which is represented by a promissory note in the amount of $5 million. The Aurora Peat sale proceeds will be applied to reduce outstanding Term Loan debt, and the sale also removes the capital spend of owning and operating peat harvesting assets. Aurora Peat will continue producing and marketing high-quality peat products for the global horticultural market under private ownership led by longtime operators in the peat industry. The two companies will continue an ongoing commercial relationship whereby Aurora Peat remains a supplier to Hydrofarm’s grow media business, and Hydrofarm will continue to distribute Aurora Peat’s consumer gardening products pursuant to the terms of a supply agreement.
“The Aurora Peat sale is a key strategic step toward optimizing our portfolio and focus, and strengthening the Company’s capital structure,” said Bill Toler, Chief Executive Officer. “Aurora Peat is a sound business, and it is going to owners who know the peat industry well. For Hydrofarm, the divestiture continues to simplify our operating model and reduce debt. We are committed to our strategic priorities to drive high-quality revenue streams, and improve profit margins and profitability. We are excited about our core CEA business including our proprietary brand offerings, and heightened focus on our logistics services business, which has been a key driver in reducing our facility costs the past few years.”
“As part of Aurora Peat Products' previous management team, several key members and I are grateful to return with the opportunity to carry the business forward to a new level of success,” said Bowe McGinnis, Manager of Raven Holdings LLC. “For our customers, the important things remain unchanged as they have for Aurora Peat Products' decades of history - our product quality, reliability, and supply commitments remain paramount. We are also enthusiastic about expansion opportunities, as Aurora Peat has secured one of the largest premium-quality Sphagnum peat moss reserves in North America. We deeply value our continuing relationship with Hydrofarm, a key partner on the supply side. By combining their top-notch distribution network with our focus on bulk peat and mix sales, we create the perfect partnership. We are excited for this strategy to support our customers and grow revenue across all categories.”
“The actions in our announcement today support a change in Hydrofarm’s trajectory - we are now a leaner and more focused organization,” said Eric Ceresnie, Senior Vice President of Strategy, Corporate Development and International Markets. “We are also excited to announce Project Agility, which will drive resources to scale our logistics services platform as we pursue opportunities in adjacent high-growth sectors. While the logistics services business currently represents only a small portion of our operating results, our global distribution center footprint and operational excellence position us well going forward.”
About Hydrofarm
Hydrofarm is a leading independent manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture (“CEA”), including grow lights, climate control solutions, grow media and nutrients, as well as a broad portfolio of innovative proprietary branded products. 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 in their grow projects.
www.Hydrofarm.com
Contact: ir@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, and include, among others, statements regarding the anticipated benefits of the sale of Aurora Peat; the application of transaction proceeds and expected reduction of indebtedness; the continuing supply and distribution relationship between Hydrofarm and Aurora Peat; the objectives, scope and anticipated results of the logistics services business and Project Agility, including expansion of the Company’s logistics services business and ability to execute on opportunities in adjacent high-growth sectors; and the Company’s future financial performance, liquidity and capital allocation plans.
These statements are based on management’s current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially, including risks relating to the collectability of the promissory note; the Company’s level of indebtedness and ability to comply with the terms of its credit facilities; demand conditions in the CEA and hydroponics markets; the Company’s ability to attract and retain logistics services customers and to execute on new initiatives; the Company’s ability to maintain compliance with Nasdaq continued listing requirements; 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 Securities and Exchange Commission. 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.
# # #
Exhibit 99.2
Hydrofarm Holdings Group, Inc.
Unaudited Pro Forma Condensed Consolidated Financial Information
On August 6, 2026 Hydrofarm Holdings Group Inc. ("HYFM" or the "Company") filed a Current Report on Form 8-K with the Securities and Exchange Commission ("SEC") to disclose that, among other things, the sale of its Aurora Peat Products business ("APP") was completed on July 31, 2026 (the "Closing Date"). The Company entered into a Share Purchase Agreement (the "Purchase Agreement"), dated July 31, 2026, between the Company, through its wholly-owned subsidiary Aurora International, LLC and 2817049 Alberta Ltd. ("Buyer"). Pursuant to the Purchase Agreement, the Company sold APP to the Buyer for $16 million, a portion of which is represented by a promissory note in the amount of $5 million and subject to customary adjustments for cash, indebtedness, working capital and transaction expenses as set forth in the Purchase Agreement (the “Transaction”). The net proceeds from the sale of APP will be applied to reduce outstanding debt under the Company’s $125 million senior secured term loan (the “Term Loan”).
The sale of APP constitutes a significant disposition for purposes of Item 2.01 of Form 8-K.
The unaudited pro forma condensed consolidated financial statements presented below consist of an Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2026 and Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and for the year ended December 31, 2025.
The following unaudited pro forma condensed consolidated financial information is intended to show how the sale of APP might have affected the historical financial statements of the Company if the transaction had been completed at an earlier time as indicated herein. The unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and were derived from the Company’s historical consolidated financial statements and are being presented to give effect to the sale of APP. The unaudited pro forma condensed consolidated financial statements and the accompanying notes should be read in conjunction with:
i. The audited historical financial statements of the Company and the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 27, 2026; and
ii. The unaudited interim historical consolidated financial statements of the Company, the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2026 filed with the SEC on May 15, 2026.
The unaudited pro forma condensed consolidated financial statements are based on available information and assumptions that the Company’s management believes are reasonable as of the date of this filing. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2026 adjusts the Company’s assets, liabilities, and stockholders' equity to reflect the sale of APP as of March 31, 2026. The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and for the year ended December 31, 2025 reflect the disposition of APP for all periods presented. In addition, the Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2026 and the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and for the year ended December 31, 2025, reflect certain "Pro Forma Adjustments" that are incremental to those related to the sale of APP, as discussed above. The Pro Forma Adjustments in the unaudited pro forma condensed consolidated balance sheet as of March 31, 2026 and the unaudited pro forma condensed consolidated statements of operations for the periods ending March 31, 2026 and December 31, 2025 are reflected as if the transaction had occurred on March 31, 2026, January 1, 2026, and January 1, 2025, respectively.
The unaudited pro forma condensed consolidated financial information is provided for informational purposes only and does not purport to represent the Company’s actual financial condition or results of operations had the APP sale occurred on the dates indicated nor does it project the Company’s results of operations or financial condition for any future period or date. The Company has prepared the unaudited pro forma condensed financial information based on available information using certain assumptions that it believes are reasonable. As a result, the actual results reported by the Company in periods following the APP sale may differ materially from this unaudited pro forma condensed financial information.
Hydrofarm Holdings Group, Inc.
Pro Forma Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands, except share amounts)
| | As of March 31, 2026 |
| | Historical HYFM (as reported) | | APP Disposition | | Pro Forma Adjustments | | | Pro Forma HYFM |
| | | (A) | | | (C) | | |
Assets | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 4,811 | | | $ | 9,880 | | i | | $ | (9,880 | ) | iv | | $ | 4,811 | |
Restricted cash | | | 537 | | | | - | | | | | - | | | | | 537 | |
Accounts receivable, net | | | 12,082 | | | | (610 | ) | | | | - | | | | | 11,472 | |
Inventories | | | 28,806 | | | | (3,052 | ) | | | | - | | | | | 25,754 | |
Prepaid expenses and other current assets | | | 2,885 | | | | (88 | ) | | | | - | | | | | 2,797 | |
Assets held for sale | | | 1,415 | | | | - | | | | | - | | | | | 1,415 | |
Total current assets | | | 50,536 | | | | 6,130 | | | | | (9,880 | ) | | | | 46,786 | |
Property and equipment, net | | | 27,649 | | | | (13,974 | ) | | | | - | | | | | 13,675 | |
Operating lease right-of-use assets | | | 35,559 | | | | (2,253 | ) | | | | - | | | | | 33,306 | |
Intangible assets, net | | | 2,801 | | | | - | | | | | - | | | | | 2,801 | |
Notes receivable | | | - | | | | 5,000 | | i | | | (5,000 | ) | iv | | | - | |
Other assets | | | 1,215 | | | | (284 | ) | | | | - | | | | | 931 | |
Total assets | | | 117,760 | | | | (5,381 | ) | | | | (14,880 | ) | | | | 97,499 | |
| | | | | | | | | | | | | | | | | | |
Liabilities and stockholders' equity | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | |
Accounts payable | | | 14,526 | | | | (1,001 | ) | | | | - | | | | | 13,525 | |
Accrued expenses and other current liabilities | | | 12,196 | | | | (579 | ) | | | | (2,460 | ) | iv | | | 9,157 | |
Deferred revenue | | | 1,755 | | | | (40 | ) | | | | - | | | | | 1,715 | |
Current portion of lease liabilities | | | 7,576 | | | | (232 | ) | | | | - | | | | | 7,344 | |
Current portion of finance lease liabilities | | | 451 | | | | - | | | | | - | | | | | 451 | |
Current portion of long-term debt | | | 114,419 | | | | - | | | | | (9,920 | ) | iv | | | 104,499 | |
Total current liabilities | | | 150,923 | | | | (1,852 | ) | | | | (12,380 | ) | | | | 136,691 | |
Long-term lease liabilities | | | 30,645 | | | | (2,021 | ) | | | | - | | | | | 28,624 | |
Long-term finance lease liabilities | | | 7,263 | | | | - | | | | | - | | | | | 7,263 | |
Long-term debt | | | 44 | | | | - | | | | | - | | | | | 44 | |
Deferred tax liabilities | | | 2,131 | | | | - | | | | | (2,131 | ) | v | | | - | |
Other long-term liabilities | | | 4,889 | | | | (4,635 | ) | | | | - | | | | | 254 | |
Total liabilities | | | 195,895 | | | | (8,508 | ) | | | | (14,511 | ) | | | | 172,876 | |
Stockholders' (deficit) equity | | | | | | | | | | | | | | | | | | |
Common stock ($0.0001 par value; 300,000,000 shares authorized; 4,764,612 shares issued and outstanding at March 31, 2026). | | | - | | | | - | | | | | - | | | | | - | |
Additional paid-in capital | | | 791,380 | | | | - | | | | | - | | | | | 791,380 | |
Accumulated other comprehensive (loss) income | | | (7,653 | ) | | | 2,503 | | ii | | | - | | | | | (5,150 | ) |
Accumulated deficit | | | (861,862 | ) | | | 624 | | iii | | | (369 | ) | | | | (861,607 | ) |
Total stockholders' (deficit) equity | | | (78,135 | ) | | | 3,127 | | | | | (369 | ) | | | | (75,377 | ) |
Total liabilities and stockholders' (deficit) equity | | $ | 117,760 | | | $ | (5,381 | ) | | | $ | (14,880 | ) | | | $ | 97,499 | |
Hydrofarm Holdings Group, Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share amounts)
| | Three Months Ended March 31, 2026 |
| | Historical HYFM (as reported) | | APP Disposition | | Pro Forma Adjustments | | | Pro Forma HYFM |
| | | (B) | | (C) | | | |
Net sales | | $ | 28,524 | | | $ | (1,852 | ) | | $ | 347 | | viii | | $ | 27,019 | |
Cost of goods sold | | | 26,687 | | | | (2,493 | ) | | | 348 | | viii | | | 24,542 | |
Gross profit | | | 1,837 | | | | 641 | | | | (1 | ) | viii | | | 2,477 | |
Operating expenses: | | | | | | | | | | | | | | | | | |
Selling, general and administrative | | | 10,568 | | | | (103 | ) | | | - | | vi | | | 10,465 | |
(Loss) income from operations | | | (8,731 | ) | | | 744 | | | | (1 | ) | | | | (7,988 | ) |
Interest expense | | | (5,866 | ) | | | - | | | | 754 | | vii | | | (5,112 | ) |
Other (expense) income | | | (122 | ) | | | (110 | ) | | | 65 | | vi | | | (167 | ) |
(Loss) income before tax | | | (14,719 | ) | | | 634 | | | | 818 | | | | | (13,267 | ) |
Income tax benefit (expense) | | | 108 | | | | (158 | ) | | | - | | | | | (50 | ) |
Net (loss) income | | $ | (14,611 | ) | | $ | 476 | | | $ | 818 | | | | $ | (13,317 | ) |
Hydrofarm Holdings Group, Inc.
Pro Forma Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share amounts)
| | Year Ended December 31, 2025 |
| | Historical HYFM (as reported) | | APP Disposition | | Pro Forma Adjustments | | | Pro Forma HYFM |
| | (B) | | (C) | | | |
Net sales | | $ | 134,252 | | | $ | (9,211 | ) | | $ | 1,185 | | viii | | $ | 126,226 | |
Cost of goods sold | | | 119,043 | | | | (8,916 | ) | | | 1,193 | | viii | | | 111,320 | |
Gross profit | | | 15,209 | | | | (295 | ) | | | (8 | ) | viii | | | 14,906 | |
Operating expenses: | | | | | | | | | | | | | | | | | |
Selling, general and administrative | | | 59,948 | | | | (447 | ) | | | - | | | | | 59,501 | |
Impairments | | | 232,179 | | | | - | | | | - | | | | | 232,179 | |
(Loss) income from operations | | | (276,918 | ) | | | 152 | | | | (8 | ) | | | | (276,774 | ) |
Interest expense | | | (13,427 | ) | | | 18 | | | | 1,614 | | vii | | | (11,795 | ) |
Other (expense) income | | | (185 | ) | | | 548 | | | | - | | | | | 363 | |
(Loss) income before tax | | | (290,530 | ) | | | 718 | | | | 1,606 | | | | | (288,206 | ) |
Income tax (expense) benefit | | | 740 | | | | (154 | ) | | | - | | | | | 586 | |
Net (loss) income | | $ | (289,790 | ) | | $ | 564 | | | $ | 1,606 | | | | $ | (287,620 | ) |
Hydrofarm Holdings Group, Inc.
Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements
The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March 31, 2026, and the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and year ended December 31, 2025, include the following adjustments:
A | Reflects the sale of APP pursuant to the Purchase Agreement, adjustments required to record the estimated cash proceeds (net of transaction costs) received in connection with the sale of APP and recognition of the estimated gain on sale in retained earnings (accumulated deficit) as if the transaction had occurred on March 31, 2026. |
| i | Estimated net cash proceeds in connection with the sale of APP are as follows: |
Base purchase price | | | 16,000 | |
Estimated Net Working Capital Adjustment | | | (695 | ) |
Closing cash | | | 193 | |
Total consideration | | | 15,498 | |
Estimated transaction costs | | | (618 | ) |
Net proceeds | | | 14,880 | |
Net proceeds - Cash | | | 9,880 | |
Net proceeds - Note receivable | | | 5,000 | |
Net proceeds | | | 14,880 | |
| Purchase price adjustment includes items specified in the terms of the Purchase Agreement including preliminary estimates for closing net working capital and closing indebtedness. |
| ii | Reflects the release of currency translation adjustments directly attributable to APP in the amount of $2.5 million. |
| iii | Estimated gain on the sale of APP, assuming HYFM completed the sale as of March 31, 2026, is as follows: |
Net proceeds | | | 14,880 | |
Net assets sold | | | (11,753 | ) |
Accumulated other comprehensive loss | | | (2,503 | ) |
Pre-tax gain on sale | | | 624 | |
| For purposes of the unaudited pro forma condensed consolidated balance sheet, the estimated gain recognized in retained earnings (accumulated deficit) is based on the net carrying value of APP as of March 31, 2026 rather than as of the Closing Date of the transaction. As a result, the estimated loss reflected herein may differ materially from the actual loss on the sale of APP as of the Closing Date because of the differences in the carrying value of assets and liabilities at the Closing Date. |
B | Reflects the reclassification of the operations of APP. |
C | Reflects additional Pro Forma Adjustments which show how the APP sale may have affected HYFM's historical condensed consolidated balance sheet as of March 31, 2026 and the unaudited pro forma condensed consolidated statements of operations for the periods ending March 31, 2026 and December 31, 2025 are reflected as if the transaction had occurred on March 31, 2026, January 1, 2026, and January 1, 2025, respectively. |
| iv | Reflects partial repayment of the Term Loan, including outstanding interest, consisting of (x) $9.9 million net cash proceeds from the Transaction and (y) $5.0 million represented by the principal amount of the secured promissory note issued by the Buyer to HYFM on the Closing Date and subsequently assigned to the agent for the lenders of the Company's Term Loan. |
| v | Includes an adjustment of $2.1 million for changes in deferred taxes as a result of the sale of APP. |
| vi | In conjunction with the sale of APP, HYFM entered into a transition services agreement ("TSA") with the Buyer. Under the terms of the TSA, HYFM will provide certain post-closing services on an interim basis. The adjustment reflects estimated income of $0.1 million and estimated incremental expenses of nil from these services over a three-month period. |
| vii | Reflects the reduction of interest expense related to the repayment and partial redemption of HYFM's Term Loan maturing in October 2028. |
| viii | Reflects transactions between HYFM and APP that were historically eliminated in consolidation. |
