SHF Holdings enters stock purchase agreement with CREO Investments for up to $150 million

SHF Holdings, Inc. (NASDAQ:SHFS), a micro-cap company currently valued at $9.24 million and trading at $3.26, announced that on September 17, it entered into a Common Stock Purchase Agreement with CREO Investments LLC. According to InvestingPro data, the company’s stock has experienced significant volatility, declining 64.8% year-to-date. The agreement allows SHF Holdings to sell up to the lesser of $150 million of its Class A common stock or 582,899 shares, representing 19.99% of its outstanding common shares immediately prior to the agreement, to CREO. Any increase above this limit would require shareholder approval under Nasdaq rules. This capital raising effort comes as InvestingPro analysis shows the company faces financial challenges, with a weak current ratio of 0.4 and short-term obligations exceeding liquid assets.

The agreement includes the possibility for SHF Holdings and CREO to mutually increase the total purchase commitment up to $500 million. For every $100 million increase in commitment, SHF Holdings would issue additional preferred shares to CREO valued at 0.75% of the increased amount.

A separate registration rights agreement was also signed on September 17, obligating SHF Holdings to file a registration statement with the Securities and Exchange Commission to cover the resale of shares that may be issued to CREO.

Under the agreement, SHF Holdings can direct CREO to purchase shares on any business day when the closing price of its common stock is at least $1.00. The purchase price per share will be the lower of 90% of the lowest sale price on the purchase date or 90% of the volume-weighted average price during the specified period.

As consideration for CREO’s commitment, SHF Holdings agreed to issue $1 million in stated value of a new series of preferred stock to CREO, with each share having a stated value of $1,000.

The agreement will terminate automatically on the earliest of several events, including the expiration of the registration statement, CREO reaching the aggregate limit, delisting of the common stock, certain bankruptcy events, or 36 months from the closing date.

The company stated that net proceeds from any sales under the agreement will depend on the frequency and price of share sales and are expected to be used for working capital and general corporate purposes. For deeper insights into SHF Holdings’ financial health and future prospects, including 8 additional key ProTips and comprehensive valuation metrics, explore the detailed Pro Research Report available on InvestingPro.

This information is based on a statement in a press release and an SEC filing.

In other recent news, SHF Holdings Inc. has announced the launch of its Fully Managed Cannabis Banking Program. This program represents a significant development as it offers the first complete operational and compliance outsourcing solution for financial institutions serving the cannabis industry. Additionally, SHF Holdings closed a $562,500 convertible note offering, which was completed with a 20% original issue discount. The notes, issued to accredited investors, are set to mature in August 2026, with the company agreeing to pay all outstanding principal and interest at that time.

In corporate governance developments, SHF Holdings’ shareholders approved an amendment to the company’s 2022 Equity Incentive Plan. This amendment increases the number of shares available under the plan and includes provisions for automatic increases in certain situations. During the same annual meeting, shareholders elected Terrance E. Mendez and Francis A. Braun III as Class I directors. These moves reflect SHF Holdings’ recent strategic and operational adjustments aimed at strengthening its market position.

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