Hydrofarm Cancels $109M Term Loan; Prices $8.3M Offering Of 1,599,400 Shares, 7,611,575 Pre-Funded Warrants And 9,210,975 Common Warrants

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 entered into definitive agreements for the purchase of 1,599,400 shares of common stock in a registered direct offering at a purchase price of $0.905 priced at-the-market under Nasdaq rules. In a concurrent private placement, investors also agreed to purchase 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") at a purchase price of $0.9050. Each Common Warrant is exercisable for one share of common stock at an exercise price of $0.78 and will expire five and a half years from the issuance date. Total gross proceeds from the offering, before deducting the placement agent fee and offering expenses are expected to be approximately $8.3 million. All of the shares of common stock, Pre-funded Warrants, and Common Warrants are being 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, will participate in the offering on the same terms as the other investors.

ThinkEquity is acting as sole placement agent and advisor to Hydrofarm in connection with the transactions. The Company intends to use the net proceeds for general corporate purposes. The closing of the offering is expected to occur on or about October 27, 2026, subject to satisfaction of customary closing conditions.

In conjunction with the closing of the offering, the Company has entered into agreements with the holders of its Senior Secured Term Loan (the "Term Loan") and the agent thereunder to issue 27.5 million shares of Series 1 Non-Voting Convertible Preferred Stock and common stock purchase warrants to purchase 27.5 million shares of common stock ("Lender Warrants") to satisfy the Company’s Term Loan in full. Each share of Series 1 Non-Voting Convertible Preferred Stock converts into one share of common stock. Each Lender Warrant is exercisable for one share of common stock at an exercise price of $0.78. The conversion of the shares of Series 1 Non-Voting Convertible Preferred Stock and exercise of the Lender Warrants are subject to shareholder approval.