Hydrofarm Holdings Group, Inc S-1, filed Apr 26, 2021

Hydrofarm Holdings Group, Inc. (HYFM)

S-1 2021-04-26

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	Delaware			5191			81-4895761
	(State or other jurisdiction of Classification Code Number)			(Primary Standard Industrial Classification Code Number)			(I.R.S. Employer Identification Number)

	Large accelerated filer ☐			Accelerated filer ☐
	Non-accelerated filer ☒			Smaller reporting company ☐
				Emerging growth company ☒


Title of Each Class of Securities to be Registered	Amount to be Registered(1)		Proposed Maximum Offering Price Per Share(2)			Proposed Maximum Aggregate Offering Price(1)(2)			Amount of Registration Fee
Common stock, par value $0.0001 per share		4,600,000		$	59.44		$	273,424,000		$	29,830.56

	J.P. Morgan						Stifel
	Deutsche Bank Securities			Truist Securities			William Blair

	Page
PROSPECTUS SUMMARY		1
THE OFFERING		19
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA		20
RISK FACTORS		23
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		28
USE OF PROCEEDS		30
DIVIDEND POLICY		31
CAPITALIZATION		32
DILUTION		33
MANAGEMENT		34
EXECUTIVE AND DIRECTOR COMPENSATION		41
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		49
PRINCIPAL STOCKHOLDERS		52
DESCRIPTION OF OUR INDEBTEDNESS		54
DESCRIPTION OF CAPITAL STOCK		56
SHARES ELIGIBLE FOR FUTURE SALE		62
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS OF COMMON STOCK		64
UNDERWRITING		68
LEGAL MATTERS		76
EXPERTS		76
WHERE YOU CAN FIND MORE INFORMATION		76
INCORPORATION BY REFERENCE		76

	Range
	Three Months Ended March 31, 2021
	(In millions)
Net Income Range		$	4.1	$	4.9
Interest expense			0.1		0.1
Income taxes			0.6		0.8
Depreciation and amortization			1.6		1.6
Impairment, restructuring and other			0.0		0.0
Acquisition expenses(1)			0.6		0.6
Other income, net			(0.1)		(0.1)
Stock-based compensation(2)			1.3		1.3
Loss on debt extinguishment			0.7		0.7
Adjusted EBITDA Range		$	8.9	$	9.9

	Three Months Ended March 31, 2020
	(In millions)
Net Loss		($	3.1)
Interest expense			2.8
Income taxes			0.1
Depreciation and amortization			1.8
Impairment, restructuring and other			0.0
Acquisition expenses			0.0
Other income, net			0.0
Stock-based compensation			0.0
Loss on debt extinguishment			0.0
Adjusted EBITDA		$	1.6

	Years ended December 31,
	2020			2019
	(In thousands, except per share amounts)
Income statement data for period ended:
Net sales		$	342,205		$	235,111
Gross profit			63,633			27,086
Selling, general and administrative			58,492			43,784
Impairment, restructuring and other(a)			860			10,035
Income (loss) from operations			4,281			(26,733)
Interest expense			10,141			13,467
Net loss			(7,273)			(40,083)
Net loss attributable to common stockholders			(9,870)			(40,083)
Net loss per share attributable to common stockholders – diluted		$	(0.46)		$	(1.94)
Cash flows (used in) provided by:
Operating activities		$	(44,825)		$	(13,302)
Investing activities			546			(3,818)
Financing activities			88,145			19,900
Net increase in cash, cash equivalents and restricted cash			44,098			4,934
Other data:
Adjusted EBITDA(b)		$	21,076		$	(9,495)
Adjusted EBITDA as a percent of net sales(b)			6.2%			-4.0%
Gross profit margin (gross profit as % of net sales)			18.6%			11.5%
Capital expenditures(c)			1,447			768
Federal net operating loss carryforwards			62,500			58,000

	As of December 31,
	2020			2019
	(In thousands)
Balance sheet data as of end of period:
Cash, cash equivalents and restricted cash		$	76,955		$	32,857
Working capital(d)			151,217			40,547
Total assets(e)			275,795			185,651
Long-term debt(f)			1,036			107,932
Total liabilities			64,877			154,471
Convertible preferred stock			—			21,802
Stockholders’ equity			210,918			9,378

	Years ended December 31,
	2020			2019
	(In thousands)
Net loss		$	(7,273)		$	(40,083)
Interest expense			10,141			13,467
Income tax expense (benefit)			576			(691)
Depreciation and amortization			6,779			6,995
Impairment, restructuring and other			860			10,035
Other income, net			(70)			(105)
Stock-based compensation(1)			9,156			208
Loss on debt extinguishment			907			679
Adjusted EBITDA		$	21,076		$	(9,495)
Adjusted EBITDA as a percent of net sales			6.2%			-4.0%

	As of December 31, 2020
	Actual			As adjusted
	(in thousands, except share and per share data)
Cash, cash equivalents and restricted cash		$	76,955		$	311,019
Stockholders’ equity:
Preferred stock, $0.0001 par value: 50,000,000 shares authorized, no shares issued and outstanding, actual; 50,000,000 shares authorized, no shares issued and outstanding, as adjusted			—			—
Common stock, $0.0001 par value: 300,000,000 shares authorized, 33,499,953 shares issued and outstanding, actual; 300,000,000 shares authorized, 37,499,953 shares issued and outstanding, as adjusted			3			4
Additional paid-in-capital			364,248			598,311
Accumulated other comprehensive income			599			599
Accumulated deficit			(153,932)			(153,932)
Total stockholders’ equity			210,918			444,982
Total capitalization		$	210,918		$	444,982

Assumed public offering price per share			$	61.63
Historical net tangible book value per share as of December 31, 2020	$	4.73
Increase in as adjusted net tangible book value per share attributable to new investors in this offering		5.74
As adjusted net tangible book value per share after this offering				10.47
Dilution per share to new investors in this offering			$	51.16

Name	Age	Position
William Toler	61	Chief Executive Officer and Chairman of the Board
Terence Fitch	61	President
B. John Lindeman	50	Chief Financial Officer
Susan P. Peters	67	Director
Patrick Chung	31	Director
Renah Persofsky	62	Director
Richard D. Moss	63	Director
Melisa Denis	57	Director

Name and Principal Position	Year ($)		Salary ($)		Bonus ($)		Stock Awards ($)(1)		Option Awards ($)		Nonequity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)(2)		Total ($)
William Toler, Chief Executive Officer and Chariman of the Board(3)		2020		519,231		—		—		—		—		—		16,881		536,112
		2019		475,243		—		7,497,636		—		—		—		14,308		7,987,187
Terence Fitch, President(4)		2020		311,539		—		—		—		—		—		23,947		335,486
Terence Fitch, President(4)		2019		237,945		—		1,795,242		—		—		—		16,715		2,049,902
B. John Lindeman, Chief Financial Officer(5)		2020		374,519		100,000		2,440,327		—		—		—		16,412		2,931,258
B. John Lindeman, Chief Financial Officer(5)		2019		—		—		—		—		—		—		—		—

	Option Awards										Stock Awards
Name and Principal Position	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Exercise Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)(1)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
William Toler, Chief Executive Officer and Chairman of the		—		—		—		—		—		892,197		46,911,718		—		—
Terence Fitch, President(3)		—		—		—		—		—		209,473		11,014,090		—		—
B. John Lindeman, Chief Financial Officer(4)		—		—		—		—		—		402,151		21,145,100		—		—

Name and Address of Beneficial Owner	Number of Shares Beneficially Owned		Percentage of Shares Beneficially Owned Before This Offering		Percentage of Shares Beneficially Owned After This Offering
5% Stockholders
Chris Payne(1)		2,299,331		6.7%		6.0%
John Tomes(2)		2,239,784		6.6%		5.9%
Peter Wardenburg(3)		2,320,118		6.8%		6.1%
Directors and Named Executive Officers:
William Toler(4)		890,606		2.6%		2.3%
Terence Fitch(5)		142,350		*		*
B. John Lindeman(6)		69,699		*		*
Susan Peters(7)		3,000		*		*
Patrick Chung(7)		2,500		*		*
Renah Persofsky(7)		4,500		*		*
Richard D. Moss(7)		5,000		*		*
Melisa Denis(7)		3,700		*		*
All directors and current executive officers as a group (eight persons)		1,121,355		3.3%		3.0%

SEC registration fee	$	29,831
FINRA filing fee		41,514
Accounting fees and expenses		120,000
Legal fees and expenses		500,000
Printing expenses		50,000
Transfer agent and registrar fees and expenses		5,000
Miscellaneous fees and expenses		3,655
Total	$	750,000

	Very truly yours,

	HYDROFARM HOLDINGS GROUP, INC.

	By:
		Name:
		Title:

By:
	Authorized Signatory

Name	Fees Earned or Paid in Cash ($)		Stock Awards(1) ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Patrick Chung		—		50,000		—		—		—		—		50,000
Susan P. Peters		—		50,000		—		—		—		—		50,000
Renah Persofsky		—		50,000		—		—		—		—		50,000
Richard D. Moss		—		50,000		—		—		—		—		50,000
Melisa Denis		—		50,000		—		—		—		—		50,000

Name	Number of Shares of Underlying Outstanding Stock Awards
Patrick Chung		2,500
Susan P. Peters		2,500
Renah Persofsky		2,500
Richard D. Moss		2,500
Melisa Denis		2,500

Name	Number of Shares
J.P. Morgan Securities LLC
Stifel, Nicolaus & Company, Incorporated
Deutsche Bank Securities Inc.
Truist Securities, Inc.
William Blair & Company, L.L.C.
Total		4,000,000

Exhibit			Description
1.1			Form of Underwriting Agreement.
2.1*			Amended and Restated Agreement and Plan of Merger, dated August 28, 2018, by and among Hydrofarm Holdings Group, Inc., Hydrofarm Merger Sub, Inc. and Hydrofarm Investment Corp (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
3.1*			Amended and Restated Certificate of Incorporation of Hydrofarm Holdings Group, Inc. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
3.2*			Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Hydrofarm Holdings Group, Inc. (Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No. 333-250037), filed with the SEC on December 1, 2020).
3.3*			Certificate of Designations, Preferences and Rights of the Series A Convertible Preferred Stock of Hydrofarm Holdings Group, Inc. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
3.4*			Amended and Restated Bylaws (Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No. 333-250037), filed with the SEC on December 1, 2020).
4.1*			Specimen Common Stock Certificate of the Hydrofarm Holdings Group, Inc. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
4.2*			Form of Warrant To Purchase Common Stock (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
4.3*			Form of Placement Agent Warrant to Purchase Common Stock (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
4.4*			Form of Registration Rights Agreement from Private Placement (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
4.5*			Investor Rights Agreement, dated August 28, 2018, by and among Hydrofarm Holdings LLC and certain of its stockholders identified on the signature pages thereto (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
4.6*			Amendment No. 1 to Investor Rights Agreement, dated November 10, 2020, by and among Hydrofarm Holdings LLC and certain of its stockholders identified on the signature pages thereto. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
5.1			Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
10.1#*			Loan And Security Agreement, dated May 12, 2017, by and between Hydrofarm Holdings LLC, Hydrofarm, LLC, WJCO LLC, EHH Holdings, LLC, SunBlaster LLC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.2#*			Amended and Restated Loan and Security Agreement, dated November 8, 2017, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, WJCO LLC, EHH Holdings, LLC, SunBlaster LLC, GS Distribution Inc., SunBlaster Holdings ULC, EWGS Distribution Inc., Eddi’s Wholesale Garden Supplies Ltd., and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).

Exhibit			Description
10.3#*			Forbearance Agreement and First Amendment to Amended and Restated Loan and Security Agreement, dated May 18, 2018, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, WJCO, LLC, Hydrofarm Canada, LLC, GS Distribution Inc., Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.4#*			First Amendment To Forbearance Agreement And Second Amendment To Amended And Restated Loan And Security Agreement, dated July 16, 2018, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, WJCO LLC, Hydrofarm Canada, LLC, GS Distribution Inc., Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.5#*			Waiver And Third Amendment To Amended And Restated Loan And Security Agreement, dated August 24, 2018, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, GS Distribution Inc., Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.6#*			Fourth Amendment To Amended And Restated Loan And Security Agreement, dated March 15, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.7#*			Fifth Amendment To Amended And Restated Loan And Security Agreement, dated May 31, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.8#*			Sixth Amendment To Amended And Restated Loan And Security Agreement, dated June 10, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.9#*			Seventh Amendment To Amended And Restated Loan And Security Agreement, dated June 27, 2020, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.10#*			Payoff Letter, dated July 11, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, WJCO LLC, GS Distribution, Inc., EWGS Distribution, Inc., Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC, and Bank of America, N.A. (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).

Exhibit			Description
10.11#*			Credit Agreement, dated March 12, 2017, by and between Hydrofarm Holdings LLC (to be succeeded as Borrower by Hydrofarm, LLC, WJCO, LLC, EHH Holdings, LLC, and SunBlaster LLC) and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.12#*			Forbearance Agreement and Amendment to Credit Agreement, dated March 18, 2018, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, Hydrofarm Canada, LLC, WJCO, LLC, EHH Holdings, LLC, SunBlaster LLC, and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.13#*			Amendment No. 1 to Forbearance Agreement, dated July 16, 2018, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, Hydrofarm Canada, LLC, WJCO, LLC, EHH Holdings, LLC, SunBlaster LLC, and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.14#*			Waiver and Amendment No. 1 to Credit Agreement, dated September 21, 2017, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, WJCO, LLC, EHH Holdings, LLC, SunBlaster LLC, and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.15#*			Amendment No. 2 to Credit Agreement, dated November 8, 2017, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, WJCO, LLC, EHH Holdings, LLC, SunBlaster LLC, and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.16#*			Waiver and Amendment No. 3 to Credit Agreement, dated August 24, 2018, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.17#*			Amendment No. 4 to Credit Agreement, dated March 15, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.18+*			Amendment No. 5 to Credit Agreement, dated July 11, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.19+*			Amendment No. 6 to Credit Agreement, dated October 15, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, and Brightwood Loan Services LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.20+*			Loan And Security Agreement, dated July 11, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC and Encina Business Credit, LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.21+*			First Amendment to Loan And Security Agreement, dated October 15, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC and Encina Business Credit, LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).

Exhibit			Description
10.22+*			Second Amendment to Loan And Security Agreement, dated November 26, 2019, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC and Encina Business Credit, LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.23+*			Third Amendment to Loan And Security Agreement, dated April 3, 2020, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC and Encina Business Credit, LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.24+*			Fourth Amendment to Loan And Security Agreement, dated May 29, 2020, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC and Encina Business Credit, LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.25+*			Fifth Amendment to Loan And Security Agreement, dated May 30, 2020, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC and Encina Business Credit, LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.26+*			Sixth Amendment to Loan And Security Agreement, dated September 30, 2020, by and among Hydrofarm Holdings LLC, Hydrofarm, LLC, EHH Holdings, LLC, SunBlaster LLC, Hydrofarm Canada, LLC, Eddi’s Wholesale Garden Supplies Ltd., SunBlaster Holdings ULC and Encina Business Credit, LLC (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.27+*			Employment Agreement, dated January 1, 2019, by and between Hydrofarm Holdings Group, Inc. and William Toler (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.28+*			Employment Agreement, dated March 4, 2019, by and between Hydrofarm Holdings Group, Inc. and Terence Fitch (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.29+*			Offer Letter, dated February 26, 2020, by and between Hydrofarm Holdings Group, Inc. and B. John Lindeman (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.30*			Hydrofarm Holdings Group, Inc. 2018 Equity Incentive Plan (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.31*			Form of Hydrofarm Holdings Group, Inc. 2018 Equity Incentive Plan Stock Option Grant Notice (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.32+*			Hydrofarm Holdings Group, Inc. 2019 Equity Incentive Plan (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.33+*			Form of Hydrofarm Holdings Group, Inc. 2019 Equity Incentive Plan Stock Option Grant Notice (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.34+*			Hydrofarm Holdings Group, Inc. 2020 Equity Incentive Plan (Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No. 333-250037), filed with the SEC on December 1, 2020).

Exhibit			Description
10.35+*			Form of Hydrofarm Holdings Group, Inc. 2020 Equity Incentive Plan Stock Option Notice (Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No. 333-250037), filed with the SEC on December 1, 2020).
10.36*			Form of Indemnification Agreement (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
10.37*			Credit Agreement, dated March 29, 2021, by and among Hydrofarm Holdings Group, Inc., Hydrofarm, LLC, and JPMorgan Chase Bank, N.A. (Incorporated by reference to the Company’s Annual Report on Form 10-K, filed with the SEC on March 30, 2021).
10.38#			Unit Purchase and Contribution Agreement, dated as of April 26, 2021, by and among Hydrofarm Holdings Group, Inc., Field 16, LLC, F16 Holding LLC and the members of F16 Holding LLC.
16.1*			Letter from MNP LLP regarding statements made in the registration statement concerning its dismissal (Incorporated by reference to the Company’s Registration Statement on Form S-1 (File No. 333-250037), filed with the SEC on November 12, 2020).
21.1*			Subsidiaries of Hydrofarm Holdings Group, Inc. (Incorporated by reference to the Company’s Registration Statement on Form S-1/A (File No. 333-250037), filed with the SEC on December 1, 2020).
23.1			Consent of Deloitte & Touche LLP, independent registered public accounting firm.
23.2			Consent of MNP, LLP, independent registered public accounting firm.
23.3			Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (included in Exhibit 5.1).
24.1			Power of Attorney (included on signature page to this registration statement).

Name	Title	Date
/s/ William Toler William Toler	Chief Executive Officer and Chairman of the Board (Principal Executive Officer)	April 26, 2021
/s/ B. John Lindeman B. John Lindeman	Chief Financial Officer (Principal Financial and Accounting Officer)	April 26, 2021
/s/ Susan P. Peters Susan P. Peters	Director	April 26, 2021
/s/ Patrick Chung Patrick Chung	Director	April 26, 2021
/s/ Renah Persofsky Renah Persofsky	Director	April 26, 2021
/s/ Richard D. Moss Richard D. Moss	Director	April 26, 2021
/s/ Melisa Denis Melisa Denis	Director	April 26, 2021

Underwriter			Number of Shares
J.P. Morgan Securities LLC			[●]
Stifel, Nicolaus & Company, Incorporated			[●]
Deutsche Bank Securities Inc.			[●]
Truist Securities, Inc.			[●]
William Blair & Company, L.L.C.			[●]







Total

	Page
Article I PURCHASE AND SALE	2
Section 1.01 Purchase and Sale	2
Section 1.02 Purchase Price	2
Section 1.03 Closing	3
Section 1.04 Estimated Closing Calculations	3
Section 1.05 Escrow Agreement	3
Section 1.06 Closing Actions.	4
Section 1.07 Purchase Price Adjustment	4
Section 1.08 Withholding	7
Section 1.09 Allocation of Purchase Price	8
Article II REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY	8
Section 2.01 Organization, Power and Qualification of the Company	8
Section 2.02 Authority; Enforceability	9
Section 2.03 Capitalization; Ownership of Units	9
Section 2.04 Subsidiaries	10
Section 2.05 No Conflicts; Consents	10
Section 2.06 Financial Statements	10
Section 2.07 Undisclosed Liabilities	11
Section 2.08 Absence of Certain Changes, Events and Conditions	11
Section 2.09 Material Contracts	13
Section 2.10 Real Property	15
Section 2.11 Title to Assets; No Other Business; Condition	16
Section 2.12 Intellectual Property	17
Section 2.13 Insurance	20
Section 2.14 Legal Proceedings; Orders	20
Section 2.15 Compliance With Laws; Permits; Anti-Corruption Laws	21
Section 2.16 Environmental Matters	22
Section 2.17 Employee Benefits	23
Section 2.18 Employment Matters	25

	Page
Section 2.19 Taxes	26
Section 2.20 Affiliate Transactions	31
Section 2.21 Products; Recalls	31
Section 2.22 Material Customers and Material Suppliers	32
Section 2.23 Data Security	33
Section 2.24 Inventory	35
Section 2.25 Accounts Receivable	35
Section 2.26 COVID-19.	35
Section 2.27 Brokers	35
Section 2.28 Disclosure	35
Section 2.29 No Other Representations and Warranties	35
Article III REPRESENTATIONS AND WARRANTIES OF SELLER & MEMBERS	36
Section 3.01 Ownership	36
Section 3.02 Organization; Authority; Enforceability.	36
Section 3.03 No Conflicts; Consents	37
Section 3.04 Brokers	37
Section 3.05 Litigation	37
Section 3.06 Investment Purpose; Restricted Stock	37
Section 3.07 SEC Filings	38
Section 3.08 Acknowledgement and Representations by Seller and Members	38
Article IV REPRESENTATIONS AND WARRANTIES OF BUYER	38
Section 4.01 Organization of Buyer; Authority of Buyer; Buyer Enforceability	38
Section 4.02 No Conflicts; Consents	39
Section 4.03 Investment Purpose	39
Section 4.04 Brokers	39
Section 4.05 Sufficiency of Funds	39
Section 4.06 Valid Issuance	40
Section 4.07 Legal Proceedings	40
Section 4.08 Acknowledgement and Representations by Buyer	40
Section 4.09 No Other Representations and Warranties	40

	Page
Article V PRE-CLOSING COVENANTS	40
Section 5.01 Information Prior to Closing	40
Section 5.02 Operation of Business	41
Section 5.03 Confidentiality; Publicity	41
Section 5.04 Consents; Further Actions	41
Section 5.05 Exclusivity	42
Section 5.06 R&W Insurance	42
Section 5.07 Notice of Termination of Employment	43
Section 5.08 Data Room	43
Article VI POST-CLOSING COVENANTS	43
Section 6.01 Further Assurances	43
Section 6.02 Employees; Benefit Plans	43
Section 6.03 Directors and Officers	44
Section 6.04 Books and Records	45
Section 6.05 Restrictive Covenants	45
Section 6.06 Tax Matters	47
Section 6.07 R&W Insurance Policy	51
Section 6.08 Release	51
Section 6.09 Intercompany Matters	52
Section 6.10 Intellectual Property Rights	52
Article VII CONDITIONS TO CLOSING	53
Section 7.01 Conditions to the Obligation to Close of All Parties	53
Section 7.02 Conditions to the Obligation to Close of Buyer	53
Section 7.03 Conditions to the Obligation to Close of Seller	56
Article VIII TERMINATION	57
Section 8.01 Termination of Agreement	57
Section 8.02 Effect of Termination	58
Article IX INDEMNIFICATION	58
Section 9.01 Survival	58
Section 9.02 Indemnification by Seller and Members	59

	Page
Section 9.03 Indemnification by Buyer	60
Section 9.04 Certain Limitations	60
Section 9.05 Indemnification Procedures	62
Section 9.06 Materiality Scrape	64
Section 9.07 Method of Payment for Losses	65
Section 9.08 Exclusive Remedies	65
Article X MISCELLANEOUS	65
Section 10.01 Expenses	65
Section 10.02 Notices	66
Section 10.03 Interpretation	67
Section 10.04 Severability	68
Section 10.05 Entire Agreement	68
Section 10.06 Successors and Assigns	68
Section 10.07 No Third-party Beneficiaries	68
Section 10.08 Amendment; Waiver	68
Section 10.09 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	69
Section 10.10 Specific Performance	69
Section 10.11 No Recourse Against any Person other than Contracting Parties	70
Section 10.12 Counterparts; Electronic Transmission	70
Section 10.13 Exhibits and Disclosure Letter	70

SELLER:

	F16 HOLDING, LLC

	By:	/s/ Aaron Berkowitz
		Name: Aaron Berkowitz
		Title: Member

COMPANY:

	FIELD 16, LLC

	By:	/s/ Aaron Berkowitz
		Name: Aaron Berkowitz
		Title: Chief Executive Officer

MEMBERS:
	/s/ Aaron Berkowitz
		Aaron Berkowitz

	/s/ Bryce Patterson
		Bryce Patterson

	/s/ Jordan Weiss
		Jordan Weiss

	/s/ Michael Stone
		Michael Stone, as trustee of the Michael Stone Trust u/d/t June 6, 2013

BUYER:	HYDROFARM HOLDINGS GROUP, INC.

	By:	/s/ William Toler
		Name: William Toler
		Title: Chief Executive Officer

Section 2.01(i)	Foreign jurisdiction qualifications
Section 2.01(ii)	Assumed or Fictitious Names
Section 2.05	Consents or filings required
Section 2.06(a)	Financial Statements
Section 2.08	Absence of Changes
Section 2.09(a)	Material Contracts
Section 2.10	Leased Real Property
Section 2.12	Intellectual Property
Section 2.13	Insurance
Section 2.14	Litigation
Section 2.15	Compliance with Laws
Section 2.16(c)	Organic Product certifications
Section 2.17(a)	Employee benefit plans
Section 2.18(a)	Employees
Section 2.19	Taxes
Section 2.20	Affiliated Transactions
Section 2.21	Products; Recalls
Section 2.22	Customers & Suppliers
Section 2.23(a)	Data Security
Section 6.02	Employee Closing Bonuses
Section 6.09	List of post-Closing affiliated party intercompany obligations
Section 7.02(e)(v)	Closing consents required
Section 7.02(e)(xii)	Real estate estoppel letters required
Section 9.02(b)(v)	Indemnification by Seller and Members
Section A-1	Capital Leases