Hydrofarm Closes $8.3 Million Offering, Eliminates Senior Secured Term Loan

Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM), a leading independent manufacturer and distributor of controlled environment agriculture supplies and equipment, announced the closing of its previously disclosed registered direct offering and concurrent private placement. The transactions generated approximately $8.3 million in gross proceeds before fees and expenses, according to the company.

The offering consisted of 1,599,400 common shares at $0.905 per share and a concurrent private placement of 7,611,575 unregistered common shares or pre-funded warrants and 9,210,975 common stock purchase warrants. Chairman and CEO Bill Toler, along with other company officers, directors and their affiliates, participated on the same terms as other investors. Hydrofarm intends to use the net proceeds for general corporate purposes. ThinkEquity served as sole placement agent and advisor.

Concurrent with the closing, Hydrofarm entered into an agreement to fully satisfy its senior secured term loan through the issuance of 27.5 million shares of Series 1 nonvoting convertible preferred stock and warrants to purchase 27.5 million common shares at $0.78 per share. The transaction eliminated all outstanding obligations under the loan and released the associated liens and security interests. Conversion of the preferred shares and exercise of the lender warrants remain subject to stockholder approval.

Following the transactions, Hydrofarm reported that its pro forma stockholders’ equity exceeds Nasdaq’s $2.5 million minimum requirement and stated that it believes it has regained compliance with the exchange’s stockholders’ equity rule. For a Texas audience, the news matters because Hydrofarm’s products and logistics services support growers and controlled environment agriculture operations across the state and beyond, and a stronger balance sheet can help the company maintain supply and distribution reliability for its customers.

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.

Investors and industry observers can view the full press release at https://ibn.fm/AAwWO and find more information about Hydrofarm at www.Hydrofarm.com. The announcement was distributed through MissionIR, a specialized communications platform within the Dynamic Brand Portfolio at IBN. MissionIR provides access to wire solutions via InvestorWire, article and editorial syndication to 5,000+ outlets, and social media distribution to millions of followers. Terms of use and disclaimers are available at https://www.MissionIR.com/Disclaimer.