SHFS 8-K
SHF Holdings, Inc. (SHFS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
The description of the amended executive employment agreement set forth below in Item 5.02 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
On August 29, 2024, SHF Holdings, Inc. (the “Company”) entered into an amended employment agreement with Sundie Seefried, the Company’s Chief Executive Officer and a member of the Company’s board of directors. The amended agreement restructured Ms. Seefried’s compensation to better align with the Company’s revenue performance, and facilitated business continuity by further staggering executive officer contract expirations.
Original Employment Agreement
As further described in the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”), on February 11, 2022, concurrently with entering into that certain Unit Purchase Agreement by and among the Company, 5AK, LLC, SHF, LLC d/b/a Safe Harbor Financial, SHF Holding Co., LLC, and Partner Colorado Credit Union, the Company entered into an Executive Employment Agreement with Ms. Seefried, which became effective upon the closing of the business combination contemplated by the aforementioned Unit Purchase Agreement on September 28, 2022.
A summary of Ms. Seefried’s executive employment agreement can be found in Amendment No.1 to the Company’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on May 10, 2024. The Company’s original employment agreement with Ms. Seefried is filed as Exhibits 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Employment Agreement Amendments
The amendment to Ms. Seefried’s Executive Employment Agreement extends the term of her employment through September 28, 2025, at a reduced annual base salary of $100,000. This base salary may be supplemented through a performance bonus rewarding increases in the Company’s future core revenue from the 2023 fourth quarter. Core revenue includes income derived from the Company’s deposit, activity and onboarding services, investments, and credit services.
In addition, effective August 1, 2024, the amendment deletes and replaces Section 4(b) of Ms. Seefried’s original executive employment such that all paid time off (“PTO”) that Ms. Seefried accrued through August 1, 2024, but had not taken, shall be paid to Ms. Seefried. As a result, no PTO shall accrue or be paid out at the time of termination of employment with the Company for any reason.
The foregoing description of the amended executive employment agreement between Ms. Seefried and the Company is only a summary and is qualified in its entirety by reference to the full text of such amendments, which are filed as Exhibit 10.2, to this Current Report on Form 8-K and are incorporated by reference herein.
Item 7.01. Regulation FD Disclosure.
On September 4, 2024, the Company issued a press release announcing the executive employment agreement amendments for Ms. Seefried and Tyler Beuerlein, the Company’s Chief Strategic Business Development Officer, and Daniel Roda, the Company’s Chief Credit Officer. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The amendments to the executive employment agreements of Mr. Beuerlein and Mr. Roda were previously disclosed in the Company’s Current Report on Form 8-K filed with SEC on August, 27, 2024.
In accordance with General Instruction B.2 of Form 8-K, the information presented herein under Item 7.01 and set forth in the attached press release included as Exhibit 99.1 to this report is deemed to be “furnished” solely pursuant to item 7.01 of this report and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information or the exhibits be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01. Financial Statements and Exhibits.
| Exhibit No. | Description of Exhibit | |
| 10.1 | Employment Agreement effective September 28, 2022, between the Company and Sundie Seefried | |
| 10.2 | Amendment to Employment Agreement dated August 1, 2024, between the Company and Sundie Seefried | |
| 99.1 | Press Release dated September 4, 2024 | |
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SHF HOLDINGS, INC. | ||
| Date: September 4, 2024 | By: | /s/ Sundie Seefried |
| Chief Executive Officer | ||
Exhibit 10.1
Exhibit 10.2
Amendment to Employment Agreement
This is an amendment (“Amendment”) to the Executive Employment Agreement entered into as of February 11, 2022 (“Employment Agreement”) by and between SHF, LLC doing business as Safe Harbor Financial (“SHF”) as a wholly owned subsidiary of SHF Holdings, Inc., a Delaware corporation (the “Company”), and Sundie Seefried (the “Executive”).
W I T N E S S E T H
Whereas, the Company and Executive desire to extend and update the terms of Executive’s Employment Agreement with SHF and the Company to ensure that key administrative personnel do not have contract terms expiring simultaneously and to ensure continuity of key administrative functions;
Now, Therefore, in consideration of the mutual promises contained herein, the parties hereto hereby agree as follows:
1. Employment Term. Commencing on August 1, 2024 (the “Effective Date”), and continuing through and including September 28, 2025, unless terminated earlier pursuant to the Employment Agreement (“Employment Term”), the Executive shall continue to serve as the Company’s and SHF’s Chief Executive Officer and shall report directly to the directors of the Company (the “Board”).
2. Base Salary. As of the Effective Date, Section 2 of the Employment Agreement is deleted in its entirety and replaced for all purposes by the following:
During the Employment Term, the Company agrees to pay the Executive a base salary at an annual rate of one hundred thousand dollars ($100,000) payable subject to standard federal and state payroll withholding requirements in accordance with the regular payroll practices of the Company. The Executive’s base salary may be subject to annual review by the Chief Executive Officer or the Company’s Board of directors (or a committee thereof), and may be increased from time to time as determined by the Chief Executive Officer or the Board. The base salary as may be increased from time to time shall constitute “Base Salary” for purposes of this Agreement. Any such increases will be determined by the Chief Executive Officer or the Compensation Committee of the Board, in her/its reasonable discretion and consistent with the Company’s practices as in effect from time to time. The Compensation Committee shall take into account such factors as SHF’s and the Company’s execution of its business plan, the results of SHF’s and the Company’s operations and their financial condition, the Executive’s compensation as compared to executives of SHF’s peers, and such other factors may determine are appropriate in the exercise of the Compensation Committee’s and the Chief Executive Officer’s or the Board’s fiduciary duties.
3. Incentive Plan. In addition to base salary, Executive may receive compensation pursuant to achievement of Company goals as described in Exhibit A attached hereto. Any incentive earned shall be payable within forty-five (45) days following the period in which the incentive was earned. Incentive plans in place prior to the Effective Date will be prorated through the Effective Date and paid forty-five (45) days following the Effective Date.
4. Vacation Time; Paid Time Off (PTO). As of the Effective Date, Section 4(b) of the Employment Agreement is deleted in its entirety and replaced for all purposes by the following:
All PTO that Executive has accrued through August 1, 2024, but has not taken, equals $28,969.36 (172.16 hours) and shall be paid to Executive during the month of August 2024. Effective as of August 1, 2024, Executive shall be entitled to unlimited PTO pursuant to Company policy, subject to advanced approved by Executive’s supervisor and scheduled to ensure that Executive will not be on vacation during periods of time when his key administrative responsibilities are reasonably expected to be needed. As a result, and regardless of anything to the contrary in Section 6(a)(iii) of the Employment Agreement, no PTO or other accrued vacation shall accrue or be paid out at time of termination of Executive’s employment for any reason.
5. Consequences of Termination. As of the Effective Date, Section 6(d) of the Employment Agreement is deleted in its entirety and replaced for all purposes by the following:
TERMINATION WITHOUT CAUSE, FOR GOOD REASON, OR EXPIRATION. If the Executive’s employment by the Company is (x) terminated by the Company without Cause, or (y) terminated by the Executive for Good Reason, or (z) terminated by failure to extend employment beyond the Employment Term, Company will provide the Executive with the Accrued Benefits at such times as set forth in Section 6(a) above, and provided the Executive executes, returns to the Company and does not revoke the release and waiver of claims in the form attached hereto as Exhibit C (with such changes as may be required in order to reflect or comply with applicable laws at such time, as determined by the Company in its reasonable judgment, the “Release and Waiver”) and the Release and Waiver becomes effective pursuant to its terms and conditions, all within sixty (60) days following termination of employment, then the Company shall also pay or provide the Executive with the following:
(i) continued participation through COBRA coverage (the costs, expenses and premiums to be paid by Company on the same basis as if the Executive had continued in employment) on the same basis in the executive benefit plans contemplated by Section 4(a) hereof in which the Executive is participating on the date of such termination of employment and continuing for a period of eighteen (18) months following such termination (the “COBRA Payment Period”); provided that the Executive is eligible and remains eligible for coverage under such plans; and provided, further, that in the event that the Executive obtains other employment that offers the Executive substantially equivalent benefits, such continuation of coverage by the Company under this Section 6(d)(ii) shall immediately cease. Notwithstanding the foregoing, if at any time the Company determines that its payment of COBRA premiums on Executive’s behalf would result in a violation of applicable law (including but not limited to the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act), then in lieu of paying COBRA premiums pursuant to this Section, the Company shall pay the Executive on the last day of each remaining month of the COBRA Payment Period, a fully taxable cash payment equal to the COBRA premium for such month, subject to applicable tax withholding (such amount, the “Special Severance Payment”), such Special Severance Payment to be made without regard to the Executive’s payment of COBRA premiums and without regard to the expiration of the COBRA period prior to the end of the COBRA Payment Period. Nothing in this Agreement shall deprive the Executive of her rights under COBRA or ERISA for benefits under plans and policies arising under her employment by the Company.
6. No Effect on Unamended Terms. All terms and conditions set forth in Executive’s Employment Agreement that are not amended by the terms of this Amendment shall remain in full force and effect.
| 2 |
In Witness Whereof, the parties hereto have executed this Amendment as of the date(s) set forth below:
| SHF, LLC | Executive | |||
| By: | /s/ Sundie Seefried | By: | /s/ Sundie Seefried | |
| Sundie Seefried, CEO | Sundie Seefried | |||
| Dated: August 1, 2024 | Dated: August 1, 2024 | |||
| SHF Holdings, Inc. | ||||
| By: | /s/ Jonathon F. Niehaus | |||
| Jonathon F. Niehaus | ||||
| Board Chair | ||||
| By: | /s/ Richard Carleton | |||
| Richard Carleton | ||||
| Compensation Committee Chair | ||||
| Dated: August 1, 2024 | ||||
| 3 |
EXHIBIT A
Incentive Plan
For each full or partial quarter in which this agreement is in effect, executive shall earn as incentive compensation a sum computed as follows.
Executive shall earn 1.15% of the incremental increase in the sum of (1) Deposit, Activity, Onboarding Income, (2) Investment Income and (3) Loan Interest Income (together defined in this Exhibit as “Core Revenue”) earned in any quarter during the current fiscal year over the Core Revenue earned in the fourth quarter of the prior fiscal year.
Expressed mathematically, the calculation is expressed as follows where X represents the designated quarter:
Executive’s Incentive Compensation = 1.35% * (XQ24 Core Revenue – 4Q23 Core Revenue)
The incentive earned in any quarter shall be paid no later than the 45th day following the end of the quarter.
| 4 |
Exhibit 99-1
Safe Harbor Financial Secures Key Executive Team with Strategic Contract Extensions
GOLDEN, Colo., September 4, 2024 — SHF Holdings, Inc., d/b/a/ Safe Harbor Financial (“Safe Harbor” or the “Company”) (NASDAQ: SHFS), a leader in facilitating financial services and credit facilities to the regulated cannabis industry, today announced extensions to the contracts of three key executives and a restructuring of their compensation packages.
The restructured agreements include Sundie Seefried, President / CEO, extended for one year through September 2025; Dan Roda, extended through June 30, 2025; and Tyler Beuerlein, whose term remains unchanged, continuing through February 2025. Beuerlein serves as the company’s Chief Strategic Business Development Officer; Roda transitions into the newly created role of Chief Credit Officer, focusing on the company’s lending and loan participation business lines.
As part of the restructuring, the Company will realize an initial cost savings of $350,000 as the new compensation structure reduces base pay in favor of incentives aligned more closely with company revenue and growth objectives.
“These contract extensions and compensation adjustments reflect our commitment to long-term growth and shareholder value,” said Fred Niehaus, Chairman of the Board of Safe Harbor. “By ensuring continuity in our leadership team and aligning their incentives with our strategic goals, we’re positioning Safe Harbor Financial for sustained success in the dynamic cannabis banking landscape.”
This move emphasizes Safe Harbor’s dedication to maintaining a strong leadership team while implementing a more performance-driven compensation model. The extended contracts for key executives ensure stable and experienced management, while the new structure ties executive rewards directly to company performance. Additionally, the incentives are now more closely aligned with revenue and production goals, demonstrating a clear focus on growth. Safe Harbor Financial believes these changes will drive growth, enhance operational efficiency, and ultimately deliver greater value to its stakeholders.
About Safe Harbor
Safe Harbor is among 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 eight years, Safe Harbor has facilitated more than $23 billion in deposit transactions for businesses with operations spanning over 41 states and US territories 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 and historical performance; new product and service offerings Safe Harbor may introduce in the future; the impact 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; 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.
Contact Information
Safe Harbor Media
Nick Callaio, Marketing Manager
720.951.0619
Safe Harbor Investor Relations
KCSA Strategic Communications
Phil Carlson