[PRESS RELEASE] – SHOEMAKERSVILLE, Pa., Nov. 3, 2026 – Hydrofarm Holdings Group Inc., a leading independent manufacturer and distributor of branded supplies and equipment for controlled environment agriculture (CEA), provides additional detail on its debt elimination(i).
The Recapitalization
Prior to these actions, the company had a $109 million term loan, with approximately $12 million of annual debt service. In the recapitalization, the term loan was eliminated, and the former term loan lenders received $27.5 million of a newly created class of Series 1 non-voting convertible preferred stock, convertible to common stock at $1 per share, and warrants to purchase 27.5 million shares of common stock at an exercise price of $0.78 per share.
In addition, Hydrofarm sold common stock and warrants to investors in a registered direct offering and concurrent private placement (the “offering”), raising approximately $8.3 million in gross proceeds. Officers and directors of the company participated in the offering on the same terms as other investors. Following the offering and conversion of the preferred stock, the company will have approximately 41.8 million common shares outstanding.
Hydrofarm now has no outstanding debt(i) and enhanced liquidity, providing the company with flexibility to support strategic initiatives and capitalize on market opportunities.
“This is a monumental time for Hydrofarm,” Chairman and CEO Bill Toler said. “With no debt on our balance sheet, we enter our 50th year in 2027 independent and built to scale. We are also excited about the opportunity to sell our cultivation products directly to commercial cannabis growers, removing a long-standing market access barrier and creating a more robust channel for our products.”
Strategic Priorities
Hydrofarm remains committed to driving high-quality revenue streams, improving profit margins and strengthening its financial position. The company’s proprietary and partner brands span the CEA, gardening and agriculture markets. The company has reduced costs and improved productivity within the organization. Now with the recapitalization complete, Hydrofarm is focused on sustainable growth through commercial direct offerings, organic brands, international expansion, e-commerce and logistics services.
“The recapitalization reflects the commitment of our organization, former lenders and investors to build a stronger financial foundation to scale the Hydrofarm platform,” said Eric Ceresnie, senior vice president of corporate development and international markets. “We are a lean and focused organization with a capital structure to support growth. We are excited about expanding the direct commercial sales channel, scaling our logistics services platform and pursuing additional growth opportunities. I’m proud of the resilience of our organization, investors, customers and vendor partners have shown to get us here. Now we can execute and build.”
Nasdaq Listing Compliance and Other Information
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 recapitalization and offering, the company believes that the company’s pro forma stockholders’ equity exceeds the $2.5 million minimum and that the company has regained compliance with the equity rule.
As previously disclosed, the company was also not in compliance with Nasdaq listing rule 5550(a)(2), which requires a minimum closing bid price of $1 per share (the “bid price rule”). The company remains subject to Nasdaq’s continued monitoring of its compliance with the equity rule and the other Nasdaq listing rules, including the bid price rule, and there can be no assurance that Nasdaq will find that the company has regained compliance with the equity rule or the bid price rule, or that the company will remain in compliance with the Nasdaq listing rules.
Additional information regarding the recapitalization is outlined in the company’s current reports on Form 8-K filed with the Securities and Exchange Commission (SEC) on Oct. 27, 2026, and in the company’s press releases dated Oct. 27 and 28, 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 Dec. 10, 2025, the base prospectus dated Dec. 10, 2025, thereunder and a prospectus supplement to the base prospectus filed on Oct. 29, 2026, with the SEC. Copies of the final prospectus may be obtained from ThinkEquity, 17 State Street, 41st Floor, New York, New York 10004. The final prospectus was filed with the SEC and is 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 warrants issued to the former term loan lenders, 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 any 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. This press release is not a solicitation of a proxy. Stockholders are urged to read the company’s proxy statement, when it becomes available, because it will contain important information.
Hydrofarm intends to file a proxy statement seeking, among other things, shareholder approval of the conversion of the Series 1 non-voting convertible preferred stock and the exercise of the warrants issued to the former term loan lenders, and to hold a shareholder meeting as promptly as practicable. The company also intends to file registration statements covering the resale of securities issued in the private placement and to the former term loan lenders.
(i) Hydrofarm maintains an immaterial amount of ‘other debt’ comprised of a foreign subsidiary’s revolving line of credit and mortgage.
