Hydrofarm to raise $8.3M, retire $109M loan via stock deal

Hydrofarm Holdings Group, Inc. (Nasdaq: HYFM) announced it has entered into definitive agreements for a registered direct offering and concurrent private placement expected to raise approximately $8.3 million in gross proceeds, before placement agent fees and offering expenses.

The registered direct offering involves 1,599,400 shares of common stock priced at $0.905 per share. A concurrent private placement includes 7,611,575 unregistered shares of common stock, or pre-funded warrants in lieu thereof, along with 9,210,975 common stock purchase warrants, also priced at $0.905. Each common warrant is exercisable at $0.78 per share and expires five and a half years from issuance.

ThinkEquity is acting as sole placement agent. The company said it intends to use net proceeds for general corporate purposes. The offering was expected to close on or about October 27, 2026, subject to customary closing conditions.

In conjunction with the offering, Hydrofarm said it has agreed with holders of its $109 million Senior Secured Term Loan to issue 27.5 million shares of Series 1 Non-Voting Convertible Preferred Stock and warrants to purchase 27.5 million shares of common stock to fully satisfy the term loan. Each preferred share converts into one share of common stock, and each warrant carries an exercise price of $0.78. The conversion and warrant exercises are subject to shareholder approval.

Chairman and Chief Executive Officer Bill Toler, along with other officers and directors or their affiliates, will participate in the offering on the same terms as other investors, according to a press release from the company.

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