Exhibit 99.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 26, 2022
SHF Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40524 | 90-2409612 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| 5269 W. 62nd Avenue, Arvada, Colorado | 80003 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (303) 431-3435
N/A
(Former name or former address, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
| Class A Common Stock, $0.0001 par value per share | SHFS | The Nasdaq Stock Market LLC |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Agreement
On October 26, 2022, SHF Holdings, Inc., a Delaware corporation (the “Parent” or “SHF”), entered into a Forbearance Agreement (the “Forbearance Agreement”) with Partner Colorado Credit Union (“PCCU”), a Colorado credit union, and Luminous Capital USA Inc. (“Luminous”).
Safe Harbor and PCCU are among the parties to a Unit Purchase Agreement dated as of February 11, 2022 (the “UPA”), which includes three amendments: the “First Amendment” dated September 19, 2022, the “Second Amendment” dated September 22, 2022, and the “Third Amendment” dated September 28, 2022. The UPA, First Amendment, Second Amendment, and Third Amendment are collectively referred to as the “Purchase Agreement.”
According to the terms of the Purchase Agreement, Safe Harbor agreed to pay approximately $56.9 million of cash proceeds to PCCU, of which $21.9 million would be payable on December 15, 2022. The remaining $35.0 million would be due in six quarterly installments of $6.4 million (the “Deferred Cash Consideration). PCCU has also agreed to defer the payment of other transaction related expenses. These transaction related expenses together with the Deferred Cash Consideration are collectively referred to as the “Deferred Obligation.”
Also, pursuant to the Purchase Agreement, and in connection with the security for payment of the Deferred Cash Consideration, Luminous has agreed to escrow one million two hundred thousand (1,200,000) shares of Safe Harbor common stock as security for payment of the Deferred Cash Consideration, with the same being held in escrow until such time as the Deferred Cash Consideration is paid in full to PCCU.
Pursuant to the Forbearance Agreement, PCCU has agreed to defer all payments owed pursuant to the Purchase Agreement for a period of six (6) months from the date hereof while the Parties engage in good faith efforts to renegotiate the payment terms applicable to the Deferred Obligation (the “Forbearance Period”).
The foregoing description of the Forbearance Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Forbearance Agreement, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On October 27, 2022, the Company issued a press release announcing its entry into the Forbearance Agreement. The press release is attached hereto as Exhibit 99.2.
Exhibit 99.2 is being furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
| Exhibit No. | Description of Exhibit | |
| 99.1 | Forbearance Agreement, dated as of October 27, 2022 by and between SHF Holdings, Inc., Partner Colorado Credit Union and Luminous Capital USA Inc. | |
| 99.2 | Press Release dated October 27, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SHF HOLDINGS, INC.
Date: November 1, 2022
| By: | /s/ Donnie Emmi | |
| Name: | Donnie Emmi | |
| Title: | Chief Legal Officer |
Exhibit 99.1
Exhibit 99.2
Safe Harbor Financial and Partner Colorado Credit Union Agree to
Deferral of Scheduled Cash Payments
Updated Payment Schedule to Provide Safe Harbor with Increased Flexibility to
Execute Near-Term Growth Strategy
Arvada, CO, October 27, 2022 — SHF Holdings, Inc., d/b/a/ Safe Harbor Financial (“Safe Harbor” or the “Company”) (NASDAQ: SHFS), a leader in facilitating financial services to the regulated cannabis industry, announced today that Partner Colorado Credit Union (PCCU) has agreed to allow the Company to defer its initial cash payments to PCCU, for a period of six months.
“I am grateful for PCCU’s continued support and trust in our relationship. Not only does the deferral of payment demonstrate their confidence in our business, it affords us increased flexibility and the wherewithal to execute on an aggressive growth strategy that will expand service options to the cannabis industry and position Safe Harbor to scale nationally at a faster pace with new services and offerings” said Sundie Seefried, Founder and Chief Executive Officer of Safe Harbor. “Safe Harbor is building an end-to-end platform to meet the financial needs of cannabis-related businesses, and is paving the way to becoming the premier financial services platform to the cannabis industry.”
According to the terms of the business combination, Safe Harbor agreed to pay approximately $56.9 million of cash proceeds to PCCU, of which $21.9 million would be payable on December 15, 2022. The remaining $35.0 million would be due in six quarterly installments of $6.4 million. Under the terms of the forbearance agreement, PCCU and Safe Harbor have acknowledged their mutual desire to ensure the success of Safe Harbor, and to compromise permanently and settle the payment terms of the Deferred Obligation.
“As a partner and shareholder, we are fully supportive and excited for Safe Harbor’s next steps as a publicly listed company. As this has been a longer than expected process, and the industry as a whole now faces a somewhat stagnant market that is placing pressure on raising capital, we want to be as supportive as possible in assisting Safe Harbor to advance upon a number of new growth opportunities,” said Doug Fagan, CEO of PCCU.
About Safe Harbor
Safe Harbor is one of the first service providers to offer compliance, monitoring and validation services to financial institutions providing traditional banking services to cannabis, hemp, CBD, and ancillary operators, making communities safer, driving growth in local economies, and fostering long-term partnerships. Safe Harbor, through its financial institution clients, implements high standards of accountability, transparency, monitoring, reporting and risk mitigation measures while meeting Bank Secrecy Act obligations in line with FinCEN guidance on cannabis-related businesses. Over the past seven years, Safe Harbor (including its predecessor) has assisted with the onboarding of over $14 billion in deposit transactions for customers with operations spanning 20 states with regulated cannabis markets. For more information, visit www.shfinancial.org.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release constitute “forward-looking statements’’ within the meaning of federal securities laws. Forward-looking statements may include, but are not limited to, statements with respect to trends in the cannabis industry, including proposed changes in U.S and state laws, rules, regulations and guidance relating to Safe Harbor’s services; Safe Harbor’s growth prospects and Safe Harbor’s market size; Safe Harbor’s projected financial and operational performance, including relative to its competitors; new product and service offerings Safe Harbor may introduce in the future; the impact of recent volatility in the capital markets, which may adversely affect the price of the Company’s securities; the outcome of any legal proceedings that may be instituted against Safe Harbor following the closing of the business combination; other statements regarding Safe Harbor’s expectations, hopes, beliefs, intentions or strategies regarding the future; and the other risk factors discussed in Safe Harbor’s filings from time to time with the Securities and Exchange Commission. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “outlook,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject, are subject to risks and uncertainties. These forward-looking statements involve a number of risks and uncertainties (some of which are beyond the control of Safe Harbor), and other assumptions, that may cause the actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
Safe Harbor Investor Relations Contacts:
KCSA Strategic Communications
Phil Carlson / Erika Kay
safeharbor@kcsa.com
Safe Harbor Public Relations Contacts:
KCSA Strategic Communications
Joshua Greenwald / Danielle Dodson
safeharbor@kcsa.com