HYDROFARM HOLDINGS GROUP, INC. 8-K

What Happened
Hydrofarm Holdings Group, Inc. announced on April 14, 2026 that it entered a Forbearance Agreement effective April 8, 2026 with its lenders and FEAC Agent, LLC after JPMorgan notified the company on February 11, 2026 of a default for failure to pay interest due January 31, 2026. The forbearance pauses lender enforcement actions solely with respect to that missed interest payment through the forbearance period (initially through April 30, 2026, extendable in 15‑day increments) subject to conditions and lender approval. The company and lenders also executed Amendment No. 2 to the Credit and Guaranty Agreement, which replaces JPMorgan with FEAC as administrative and collateral agent and adds reporting and liquidity covenants.

Key Details

• Term loan: $125,000,000 senior secured term loan under the Credit Agreement (originally dated Oct 25, 2021).
• Default: Specified Event of Default was failure to pay interest due Jan 31, 2026 (notice given Feb 11, 2026).
• Forbearance period: Effective April 8, 2026 through April 30, 2026 (extendable in 15‑day increments by the Administrative Agent).
• Covenants during forbearance include: maintain average daily cash balance ≥ $1,000,000; provide liquidity, cash‑flow and inventory reports; supply at least two asset‑valuation bids and Financial Advisor‑approved cash flow projections; submit budgets and a term sheet for a sale of certain assets; restrict most investments/restricted payments; pay agent/lender fees and expenses.
• Amendment No. 2: formally replaces JPMorgan with FEAC as agent and adds requirements for regular liquidity, aging and inventory reporting and a $1,000,000 minimum liquidity covenant.

Why It Matters
This filing confirms Hydrofarm missed an interest payment and negotiated a short-term forbearance rather than triggering immediate enforcement by lenders. For investors, the agreement is material because it (1) acknowledges an event of default on a significant $125M loan, (2) imposes tight liquidity and reporting requirements including a $1.0M minimum cash threshold, and (3) creates a limited window for the company to comply, seek financing, or pursue asset-sale options. The outcome of these conditions will directly affect the company’s liquidity position and potential need for restructuring or asset sales. The company also flagged forward‑looking risks and uncertainties in the filing.