Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) announced the closing of a registered direct offering and concurrent private placement that raised approximately $8.3 million in gross proceeds and eliminated its senior secured term loan, according to a press release distributed by MissionIR. The company sold 1,599,400 common shares at $0.905 per share in the registered direct offering, alongside 7,611,575 unregistered common shares or pre-funded warrants and 9,210,975 common stock purchase warrants in the private placement. Chairman and CEO Bill Toler, along with other officers, directors and their affiliates, participated on the same terms as other investors.
The capital raise matters because it addresses both liquidity and balance-sheet risk. Hydrofarm said it intends to use the net proceeds for general corporate purposes. ThinkEquity served as sole placement agent and advisor. Concurrently, Hydrofarm entered into an agreement to fully satisfy its senior secured term loan by issuing 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. That transaction eliminated all outstanding obligations under the loan and released the associated liens and security interests, removing a secured claim on company assets.
The debt elimination also has a regulatory dimension. 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. Maintaining that compliance is critical because a failure to satisfy the requirement can put a company’s listing at risk.
Hydrofarm is a manufacturer and distributor of supplies and equipment for controlled environment agriculture, including plant nutrition, growing media, horticultural lighting and climate control solutions. It manufactures proprietary plant nutrition and growing media brands at its manufacturing center of excellence in Eugene, Oregon, and provides third-party warehousing, fulfillment and distribution services through its logistics platform. The company said it has helped growers for nearly 50 years. More information is available at www.Hydrofarm.com.
The announcement was syndicated by MissionIR, a communications platform that is part of the Dynamic Brand Portfolio at IBN. The release notes that IBN provides wire solutions through InvestorWire, including editorial syndication to 5,000+ outlets, press release enhancement and social media distribution, as well as tailored corporate communications solutions. Terms and disclaimers are posted at https://www.MissionIR.com/Disclaimer.
