SHF Holdings Stock Skyrockets 283% on $150M Equity Financing Deal
The cannabis-focused financial firm secured a major capital agreement, triggering a massive after-hours rally and signaling renewed investor confidence.
Shares of SHF Holdings Inc. (NASDAQ: SHFS), a specialized financial services provider for the cannabis industry, surged an extraordinary 283% in after-hours trading on Tuesday. The massive rally was ignited by the announcement of a that could provide the company with up to $150 million in new capital.
The Colorado-based company entered into a Common Stock Purchase Agreement with CREO Investments LLC, according to a recent SEC filing. The deal provides SHF Holdings with a flexible and strategic source of funding, allowing it to sell shares to CREO over a 36-month period. This structure enables the company to access capital as needed for working capital and other general corporate purposes, offering a crucial financial backstop.
SHF Holdings operates in a complex but growing niche, providing essential to cannabis, hemp, and CBD businesses that are often shut out of the traditional financial system. The firm's services are critical for an industry navigating a difficult federal regulatory landscape. The infusion of capital is particularly timely, as the company recently announced the launch of its Fully Managed Cannabis Banking Program, an outsourcing solution for financial institutions.
The terms of the agreement allow SHF to sell its stock at a 90% discount to the prevailing market price, with an initial cap of 19.99% of its outstanding stock, a threshold that avoids the need for immediate shareholder approval under Nasdaq rules. to potentially increase the total commitment to $500 million, subject to mutual consent.
Despite reporting a net loss in 2024, SHF Holdings has shown operational resilience, achieving its third consecutive year of positive Adjusted EBITDA and a 42% reduction in operating expenses. The financing from CREO Investments addresses immediate capital concerns and provides the resources to fuel its strategic initiatives, including within the cannabis sector. The dramatic investor response, sending shares to $12.49 in extended trading, underscores the market's optimism that this deal will place SHF Holdings on a stronger financial footing for future growth.