Safe Harbor Financial Proposes Combination With Opifex Media
Safe Harbor Financial has signed a non-binding term sheet to combine with Opifex Media, a media holding company focused on the creator economy. The proposed transaction would establish a publicly traded holding company with two businesses: Opifex’s media operations and Safe Harbor’s cannabis financial services platform.
SHF Holdings Inc., which operates as Safe Harbor (Nasdaq: SHFS), announced the agreement Oct. 26. Under the proposed structure, Opifex would become a wholly owned subsidiary of Safe Harbor. The combined company would remain listed on Nasdaq under a name the parties have yet to determine.
The transaction comes as Safe Harbor works to maintain its Nasdaq listing. On Oct. 20, Nasdaq granted the company an additional 180-day compliance period, through April 19, 2027, to meet the exchange’s $1 minimum bid price requirement. The parties intend to complete the proposed combination before that deadline.
“This proposed combination is intended to bring a growth-oriented creator-economy platform into our public company and to meet Nasdaq listing standards at closing,” said Terry Mendez, Safe Harbor’s CEO and CFO. “Greg Newman brings decades of experience building and scaling technology companies to the combined company’s board, and we believe this combination creates a compelling path forward for our stockholders.”
Opifex acquires and operates businesses in publishing, music and video. The company connects those businesses through a creator and data platform designed to generate revenue through advertising, subscriptions, licensing and media campaigns. Opifex says it uses artificial intelligence to improve operational efficiency rather than create content.
According to Goldman Sachs Research, the creator economy could grow from approximately $250 billion in 2023 to $480 billion by 2027.
Greg Newman, Opifex’s chairman, would serve as chairman of the combined company. The proposed five-member board would include Newman, another Opifex designee, two independent directors designated by Opifex and approved by Safe Harbor’s Nominating and Corporate Governance Committee, and one director from Safe Harbor. Opifex would designate the combined company’s officers.
“The creator economy represents a significant opportunity to build a portfolio of complementary media businesses with established audiences and valuable intellectual property,” Newman said. “Our strategy is to acquire and grow platforms that serve creators, connect their audiences and create additional opportunities for monetization. We believe a combination with Safe Harbor provides the right public-company foundation for that vision, and we are committed to supporting the continued operation of Safe Harbor’s cannabis financial services business.”
Safe Harbor plans to continue providing banking, lending and other financial services to cannabis businesses, along with infrastructure and compliance services for financial institutions that operate cannabis banking programs. The company reports that it has supported more than $36 billion in cannabis-related transactions across 41 states and territories since its inception. It does not expect the proposed transaction to change its services to clients or financial institution partners.
Under the term sheet, Opifex security holders would own 85% of the combined company at closing, while existing Safe Harbor stakeholders would hold 15% on a fully diluted basis. The parties may adjust Safe Harbor stakeholders’ allocation to between 12.5% and 17.5%, based on Safe Harbor’s valuation at closing and an independent fairness opinion. These ownership figures would precede any capital raised at closing and the reserve for an equity incentive plan.
The term sheet contemplates an Opifex valuation of at least $50 million, subject to an independent valuation and fairness opinion. Opifex must provide its proposed valuation, financial statements and supporting analysis within 15 business days.
The parties also intend to negotiate a contingent value right for existing Safe Harbor stakeholders tied to the cannabis financial services business. The combined company would adopt an equity incentive plan with a reserve equal to 10% of fully diluted shares, subject to stockholder approval.
To meet Nasdaq listing requirements, the parties may pursue a registered equity financing with investors who are not affiliates of either company and a direct investment of up to $1 million, subject to stockholder approval. Safe Harbor would also seek approval for a reverse stock split if necessary to meet Nasdaq’s minimum bid price requirement.
Completion depends on a definitive agreement, due diligence, audited financial statements from Opifex, required consents from Series B security holders, an independent valuation and fairness opinion, stockholder and Nasdaq approvals, and any required financing. The term sheet includes a 45-day exclusivity period.
The agreement remains non-binding except for certain provisions, including exclusivity and confidentiality. Neither company is obligated to complete the transaction, and the parties have not guaranteed that they will reach a definitive agreement or close the deal.
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