Hydrofarm Announces Redemption of Investor Warrants

Hydrofarm Holdings Group, Inc. (“Hydrofarm” or the “Company”) (Nasdaq: HYFM), a leading distributor and manufacturer of hydroponics equipment and supplies, today announced that the Company will redeem certain of its outstanding warrants (the “Investor Warrants”). Holders of the Investor Warrants have until 5:00 p.m. Eastern Time on July 19, 2021 to exercise their Investor Warrants. The Investor Warrants are exercisable for an aggregate of approximately 3.37 million shares of common stock, which reflects the total number of outstanding Investor Warrants as of June 15, 2021, at a price of $16.86 per share, representing approximately $54.0 million in total potential cash net proceeds to Hydrofarm. Following the redemption, and assuming all outstanding Investor Warrants are exercised, Hydrofarm expects to have approximately 43.2 million shares of common stock outstanding.

Bill Toler, Chairman and Chief Executive Officer of Hydrofarm, stated, “The redemption of our Investor Warrants will further strengthen our financial position by adding up to $54 million of additional cash to our balance sheet, while also streamlining our capital structure. The redemption also helps position us to continue to invest in our organic growth, as well as execute our acquisition strategy going forward.”

Investor Warrant Details

Under the terms of the Investor Warrants, Hydrofarm is entitled to redeem all of the outstanding Investor Warrants for a redemption price of $0.00033712 per Investor Warrant if (i) there is an effective registration statement covering the resale of the shares of common stock underlying the Investor Warrants, and (ii) the volume-weighted average price of the Company’s common stock for the twenty (20) consecutive trading days prior to the date of the notice of redemption is at least $25.28. These requirements have been achieved.

Any Investor Warrants that remain unexercised immediately after 5:00 p.m. Eastern Time on July 19, 2021, the redemption date, will be void and no longer exercisable, and the holders of those Investor Warrants will be entitled to receive $0.00033712 per Investor Warrant.

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