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, announced today its financial results
for the fourth quarter and full year ended December 31, 2023.
Full-Year 2023 Financial & Operational
Highlights
- Revenue increased 85.3% to $17.6
million, compared to $9.5 million for the full year of 2022;
- Loan Book Value at the end of 2023
increased 194.2% to $55.6 million, compared to $18.9 million for
the full year of 2022;
- Adjusted EBITDA increased 176.9% to
$3.6 million, compared to $1.3 million for the full year of
2022(1);
- Deposit activity and onboarding
income increased approximately 42% to $8.6 million, compared to
approximately $6.1 million in 2022;
(1) Adjusted EBITDA is a non-GAAP financial
metric. A reconciliation of non-GAAP to GAAP measures is included
below in this earnings release.
“Throughout 2023, we introduced several new
lending and deposit products, significantly broadening our
financial service offering, setting the stage for a new path of
financial growth for Safe Harbor,” said Sundie Seefried, Chief
Executive Officer of Safe Harbor Financial. “With the successful
rollout of our line of credit products and interest-bearing
accounts last year, we started to recognize increased account fees,
higher levels of investment income and derived a steady stream of
loan income, all of which, allowed us to meet our goal of creating
a more diversified revenue mix. Most importantly, due to the
success of our lending program, a greater portion of revenue is
coming from this high-margin channel, making us less dependent on
deposit fees.”
“In the second half of 2023, Safe Harbor
mutually agreed to terminate its agreement with Central Bank, one
of our financial partners, which resulted in a material loss of
deposit accounts. That said, our recent initiatives to scale our
proven fintech platform have resulted in increased interest from
national financial institutions and cannabis-related businesses
across the country, which we are confident will result in increased
deposit activity in 2024 and beyond,” concluded Seefried.
Fourth Quarter 2023 Operational Highlights
- On October 11, 2023, Safe Harbor
participated in the Maxim Group Virtual Tech Conference Series:
Exploring All Corners of the Tech Sector.
- On October 27, 2023, the Company
announced it restructured certain deferred consideration
obligations in connection with the 2022 acquisition of Rockview
Digital Solutions, Inc, d/b/a Abaca (“Abaca”).
- On November 16, 2023, Safe Harbor
announced it originated a $3 million first lien secured loan for a
multi-tenant cannabis industrial building in California.
- On December 13, 2023, the Company
announced it originated a $1.17 million first lien secured loan for
the real estate acquisition and construction of a new cannabis
retail store in Bridgeport, Connecticut.
Subsequent Operational
Highlights
- On January 4, 2024, the Company
announced it originated a $9 million first lien secured loan for a
major, MSO-operated cultivation facility in Denver, Colorado.
- On March 12, 2024, Safe Harbor
announced it originated a $4.6 million secured credit facility for
a Michigan cannabis operator.
Fourth Quarter 2023 Financial
Results
For the fourth quarter ended December 31, 2023,
total revenue increased 25% to $4.5 million, compared to $3.6
million in the prior year period. The results for the fourth
quarter of 2023 included incremental revenue of $549,000 recognized
in the fourth quarter resulting from a strategic shift that
occurred in the fourth quarter of 2023 related to how the Company
applies earned interest to the aggregate average daily balance of
our client deposits. This methodology was applied retroactively at
the beginning of 2023, with the incremental revenue recognized in
the fourth quarter of 2023. Additionally, loan interest income
contributed to the Company’s revenue growth in the fourth quarter,
compared to same prior year period.
Fourth quarter 2023 operating expenses decreased
approximately 16.2% to $6.2 million, compared to $7.4 million in
the prior year period. The lower operating expenses in the fourth
quarter were primarily driven by lower compensation-related
expenses as well as lower professional services and
consulting-related expenses, offset by a $2 million charge for
impairment of developed technology taken in the fourth quarter of
2023.
Net income for the fourth quarter 2023 was $2.5
million, compared to net loss of $37.0 million in the prior year
period. The driver of the net income produced in the fourth quarter
2023 was the additional $549,000 of investment income captured in
the fourth quarter previously mentioned.
Full-Year Financial Results
For the full year ended December 31, 2023, total
revenue increased 85% to $17.6 million, compared to $9.5 million in
the prior year period, driven primarily by higher investment income
and loan interest income.
Full year 2023 operating expenses increased to
$38.3 million, compared to $11.7 million in the prior year period.
The increased operating expense in 2023 versus 2022 was
attributable to goodwill and other impairment charges recognized in
the second quarter of 2023, an impairment charge to developed
technology taken in the fourth quarter of 2023, expense related to
restructuring the Abaca transaction consideration and stock-based
compensation expense.
Net loss for 2023 was $17.3 million, compared to
net loss of $35.1 million in the prior year period. The net loss
reported for the full year 2023 is primarily attributable to the
impairment of long-lived assets and goodwill, higher compensation
expense, and Abaca consideration restructuring expenses.
As of December 31, 2023, the Company had cash
and cash equivalents of $4.9 million, compared to $8.4 million at
December 31, 2022.
For more information on the Company’s fourth
quarter and full year 2023 financial results, please refer to our
Annual Report on Form 10-K for the year ended December 31, 2023
filed with the U.S. Securities & Exchange Commission (the
“SEC”) and accessible at www.sec.gov.
|
SHF Holdings, Inc.CONSOLIDATED BALANCE
SHEETS |
|
|
|
December 31,2023 |
|
|
December 31,2022 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,888,769 |
|
|
$ |
8,390,195 |
|
Accounts receivable – trade |
|
|
121,875 |
|
|
|
203,058 |
|
Accounts receivable – related party |
|
|
2,095,320 |
|
|
|
1,231,727 |
|
Contract assets |
|
|
- |
|
|
|
21,170 |
|
Prepaid expenses – current portion |
|
|
546,437 |
|
|
|
175,585 |
|
Accrued interest receivable |
|
|
13,780 |
|
|
|
7,320 |
|
Short-term loans receivable, net |
|
|
12,391 |
|
|
|
51,300 |
|
Other current assets |
|
|
82,657 |
|
|
|
150,817 |
|
Total Current
Assets |
|
$ |
7,761,229 |
|
|
$ |
10,231,172 |
|
Long-term loans receivable, net |
|
|
381,463 |
|
|
|
1,359,772 |
|
Property, plant and equipment, net |
|
|
84,220 |
|
|
|
49,614 |
|
Operating lease right to use assets |
|
|
859,861 |
|
|
|
1,016,198 |
|
Goodwill |
|
|
6,058,000 |
|
|
|
19,266,276 |
|
Intangible assets, net |
|
|
3,721,745 |
|
|
|
10,621,087 |
|
Deferred tax asset |
|
|
43,829,019 |
|
|
|
51,593,302 |
|
Prepaid expenses – long term position |
|
|
562,500 |
|
|
|
712,500 |
|
Forward purchase receivable |
|
|
4,584,221 |
|
|
|
4,584,221 |
|
Security deposit |
|
|
18,651 |
|
|
|
17,795 |
|
Total
Assets |
|
$ |
67,860,909 |
|
|
$ |
99,451,937 |
|
LIABILITIES AND
PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
217,392 |
|
|
$ |
2,654,489 |
|
Accounts payable-related party |
|
|
577,315 |
|
|
|
5,078,042 |
|
Accrued expenses |
|
|
1,008,987 |
|
|
|
1,473,411 |
|
Contract liabilities |
|
|
21,922 |
|
|
|
996 |
|
Lease liabilities – current |
|
|
132,546 |
|
|
|
20,124 |
|
Senior secured promissory note – current portion |
|
|
3,006,991 |
|
|
|
- |
|
Deferred consideration – current portion |
|
|
2,889,792 |
|
|
|
14,359,822 |
|
Due to seller - current portion |
|
|
- |
|
|
|
25,973,017 |
|
Other current liabilities |
|
|
41,639 |
|
|
|
11,291 |
|
Total Current
Liabilities |
|
$ |
7,896,584 |
|
|
$ |
49,571,192 |
|
Warrant liability |
|
|
4,164,129 |
|
|
|
666,510 |
|
Deferred consideration – long term portion |
|
|
810,000 |
|
|
|
2,747,592 |
|
Forward purchase derivative liability |
|
|
7,309,580 |
|
|
|
7,309,580 |
|
Due to seller – long term portion |
|
|
- |
|
|
|
30,976,783 |
|
Senior secured promissory note—long term portion |
|
|
11,004,175 |
|
|
|
- |
|
Net deferred indemnified loan origination fees |
|
|
63,275 |
|
|
|
109,081 |
|
Lease liabilities – long term |
|
|
875,447 |
|
|
|
1,008,109 |
|
Deferred underwriter fee |
|
|
- |
|
|
|
1,450,500 |
|
Indemnity liability |
|
|
1,382,408 |
|
|
|
499,465 |
|
Total
Liabilities |
|
$ |
33,505,598 |
|
|
$ |
94,338,812 |
|
Commitment and
Contingencies (Note 15) |
|
|
|
|
|
|
|
|
Parent-Entity Net
Investment and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock,
$.0001 par value, 1,250,000 shares authorized, 1,101 and 14,616
shares issued and outstanding on December 31, 2023, and December
31, 2022, respectively |
|
|
- |
|
|
|
1 |
|
Class A common stock, $.0001
par value, 130,000,000 shares authorized, 54,563,372 and 23,732,889
issued and outstanding on December 31, 2023, and December 31, 2022,
respectively |
|
|
5,458 |
|
|
|
2,374 |
|
Additional paid in
capital |
|
|
105,919,674 |
|
|
|
44,806,031 |
|
Retained deficit |
|
|
(71,569,821 |
) |
|
|
(39,695,281 |
) |
Total Parent-Entity Net
Investment and Stockholders’ Equity |
|
$ |
34,355,311 |
|
|
$ |
5,113,125 |
|
Total Liabilities and
Parent-Entity Net Investment and Stockholders’ Equity |
|
$ |
67,860,909 |
|
|
$ |
99,451,937 |
|
|
SHF Holdings, Inc.CONSOLIDATED STATEMENTS
OF OPERATIONS |
|
|
|
For the year ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
17,562,903 |
|
|
$ |
9,478,819 |
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
Compensation and employee benefits |
|
$ |
10,334,212 |
|
|
$ |
6,695,319 |
|
General and administrative expenses |
|
|
6,568,662 |
|
|
|
2,390,539 |
|
Professional services |
|
|
1,858,137 |
|
|
|
1,985,343 |
|
Rent expense |
|
|
315,615 |
|
|
|
99,246 |
|
Provision for credit losses |
|
|
290,857 |
|
|
|
506,212 |
|
Impairment of goodwill |
|
|
13,208,276 |
|
|
|
- |
|
Impairment of long-lived intangible assets |
|
|
5,699,463 |
|
|
|
- |
|
Total operating expenses |
|
$ |
38,275,222 |
|
|
$ |
11,676,659 |
|
Operating loss |
|
|
(20,712,319 |
) |
|
|
(2,197,840 |
) |
Other (income) expenses |
|
|
|
|
|
|
|
|
Interest expense |
|
|
1,113,466 |
|
|
|
705,204 |
|
Change in fair value of warrant liability |
|
|
1,853,920 |
|
|
|
(939,019 |
) |
Change in the fair value of deferred consideration |
|
|
(4,570,157 |
) |
|
|
97,593 |
|
Change in fair value of forward purchase agreement |
|
|
- |
|
|
|
33,322,248 |
|
Change in fair value of forward purchase option derivative |
|
|
- |
|
|
|
8,997,110 |
|
Total other (income)
expenses |
|
$ |
(1,602,771 |
) |
|
$ |
42,183,136 |
|
Net loss income before income
tax |
|
|
(19,109,548 |
) |
|
|
(44,380,976 |
) |
Provision for income
taxes |
|
$ |
(1,829,701 |
) |
|
$ |
(9,252,893 |
) |
Net loss |
|
$ |
(17,279,847 |
) |
|
$ |
(35,128,083 |
) |
Weighted average shares
outstanding, basic |
|
|
42,574,563 |
|
|
|
18,988,558 |
|
Basic net loss per share |
|
$ |
(0.41 |
) |
|
$ |
(1.85 |
) |
Weighted average shares
outstanding, diluted |
|
|
42,574,563 |
|
|
|
18,988,558 |
|
Diluted net loss per
share |
|
$ |
(0.41 |
) |
|
$ |
(1.85 |
) |
|
SHF Holdings, Inc.CONSOLIDATED STATEMENTS
OF PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS’
EQUITYFOR THE YEARS ENDED DECEMBER 31, 2023 AND
2022 |
|
|
|
Preferred Stock |
|
|
Class A Common Stock |
|
|
Additional Paid-in |
|
|
Parent-Entity Net |
|
|
Retained |
|
|
Total Shareholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Investment |
|
|
Earnings |
|
|
Equity |
|
Balance, December 31, 2021 |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
7,339,101 |
|
|
$ |
- |
|
|
$ |
7,339,101 |
|
Issuance of shares in
connection with Business Combination and PIPE offering, net of
issuance costs |
|
|
20,450 |
|
|
|
2 |
|
|
|
18,715,912 |
|
|
|
1,872 |
|
|
|
29,327,087 |
|
|
|
(7,339,101 |
) |
|
|
- |
|
|
|
21,989,860 |
|
Acquisition of Abaca |
|
|
- |
|
|
|
- |
|
|
|
2,099,977 |
|
|
|
210 |
|
|
|
8,105,701 |
|
|
|
- |
|
|
|
- |
|
|
|
8,105,911 |
|
Conversion of PIPE Shares |
|
|
(5,834 |
) |
|
|
(1 |
) |
|
|
2,917,000 |
|
|
|
292 |
|
|
|
2,916,709 |
|
|
|
- |
|
|
|
(2,917,000 |
) |
|
|
- |
|
Stock option conversion |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,806,336 |
|
|
|
- |
|
|
|
- |
|
|
|
2,806,336 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,650,198 |
|
|
|
- |
|
|
|
(36,778,281 |
) |
|
|
(35,128,083 |
) |
Balance, December 31,
2022 |
|
|
14,616 |
|
|
$ |
1 |
|
|
|
23,732,889 |
|
|
$ |
2,374 |
|
|
$ |
44,806,031 |
|
|
$ |
- |
|
|
$ |
(39,695,281 |
) |
|
$ |
5,113,125 |
|
Cumulative effect from
adoption of CECL |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(581,318 |
) |
|
|
(581,318 |
) |
Issuance of shares to Abaca
shareholders |
|
|
- |
|
|
|
- |
|
|
|
5,835,822 |
|
|
|
585 |
|
|
|
4,084,491 |
|
|
|
- |
|
|
|
- |
|
|
|
4,085,076 |
|
Conversion of PIPE Shares |
|
|
(13,515 |
) |
|
|
(1 |
) |
|
|
12,562,200 |
|
|
|
1,256 |
|
|
|
14,012,120 |
|
|
|
- |
|
|
|
(14,013,375 |
) |
|
|
- |
|
Restricted stock units |
|
|
- |
|
|
|
- |
|
|
|
1,232,461 |
|
|
|
123 |
|
|
|
1,251,920 |
|
|
|
- |
|
|
|
- |
|
|
|
1,252,043 |
|
Stock compensation cost |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,459,324 |
|
|
|
- |
|
|
|
- |
|
|
|
2,459,324 |
|
PCCU Restructuring |
|
|
- |
|
|
|
- |
|
|
|
11,200,000 |
|
|
|
1,120 |
|
|
|
38,405,288 |
|
|
|
- |
|
|
|
- |
|
|
|
38,406,408 |
|
Reversal of deferred
underwriting cost |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
900,500 |
|
|
|
- |
|
|
|
- |
|
|
|
900,500 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(17,279,847 |
) |
|
|
(17,279,847 |
) |
Balance, December 31,
2023 |
|
|
1,101 |
|
|
|
- |
|
|
|
54,563,372 |
|
|
|
5,458 |
|
|
|
105,919,674 |
|
|
|
- |
|
|
|
(71,569,821 |
) |
|
|
34,355,311 |
|
|
SHF Holdings, Inc.CONSOLIDATED STATEMENTS
OF CASH FLOWS |
|
|
|
Year ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(17,279,847 |
) |
|
$ |
(35,128,083 |
) |
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
1,373,707 |
|
|
|
189,274 |
|
Stock compensation expense |
|
|
3,711,367 |
|
|
|
2,806,336 |
|
Net deferred indemnified loan origination fees |
|
|
(45,806 |
) |
|
|
- |
|
Interest expense |
|
|
663,208 |
|
|
|
705,204 |
|
Lease Expense |
|
|
136,097 |
|
|
|
- |
|
Provision for credit loss |
|
|
290,857 |
|
|
|
506,212 |
|
Impairment of goodwill |
|
|
13,208,276 |
|
|
|
- |
|
Impairment of long-lived intangible assets |
|
|
5,699,463 |
|
|
|
- |
|
Deferred tax credit |
|
|
(1,829,700 |
) |
|
|
(9,252,893 |
) |
Change in fair value of warrant and forward purchase option
derivative liabilities |
|
|
1,853,920 |
|
|
|
41,380,339 |
|
Change in the fair value of deferred consideration |
|
|
(4,570,157 |
) |
|
|
97,593 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable - Trade |
|
|
81,183 |
|
|
|
24,798 |
|
Accounts receivable – Related Party |
|
|
(863,593 |
) |
|
|
(710,698 |
) |
Contract assets |
|
|
21,170 |
|
|
|
(2,853 |
) |
Prepaid expenses |
|
|
(220,852 |
) |
|
|
55,997 |
|
Forward purchase receivables |
|
|
- |
|
|
|
1,379,285 |
|
Accrued interest receivable |
|
|
(6,460 |
) |
|
|
(236 |
) |
Deferred underwriting payable |
|
|
(550,000 |
) |
|
|
(715,750 |
) |
Other current assets |
|
|
68,160 |
|
|
|
(150,817 |
) |
Accounts payable |
|
|
(2,515,443 |
) |
|
|
355,202 |
|
Accounts Payable – related party |
|
|
386,660 |
|
|
|
(231,875 |
) |
Accrued expenses |
|
|
(464,424 |
) |
|
|
402,767 |
|
Contract Liabilities |
|
|
20,926 |
|
|
|
(7,337 |
) |
Security deposit |
|
|
(856 |
) |
|
|
(5,085 |
) |
Net cash (used in)/provided by operating activities |
|
$ |
(832,144 |
) |
|
$ |
1,697,380 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS USED IN
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(208,434 |
) |
|
|
(17,318 |
) |
Change in loan receivable, net |
|
|
- |
|
|
|
161,569 |
|
Payment to Abaca Shareholder |
|
|
(3,000,000 |
) |
|
|
- |
|
Loan receivable repayment |
|
|
1,027,986 |
|
|
|
- |
|
Acquisition of Abaca |
|
|
- |
|
|
|
(3,041,680 |
) |
Net cash used in investing activities |
|
$ |
(2,180,448 |
) |
|
$ |
(2,897,429 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS USED IN
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from reverse capitalization, net of transaction costs |
|
|
- |
|
|
|
4,094,339 |
|
Repayment of loans |
|
|
(488,834 |
) |
|
|
- |
|
Net cash (used in)/provided by financing activities |
|
$ |
(488,834 |
) |
|
$ |
4,094,339 |
|
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in
cash and cash equivalents |
|
|
(3,501,426 |
) |
|
|
2,894,290 |
|
Cash and cash equivalents -
beginning of period |
|
|
8,390,195 |
|
|
|
5,495,905 |
|
Cash and cash equivalents -
end of period |
|
$ |
4,888,769 |
|
|
$ |
8,390,195 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
450,258 |
|
|
|
- |
|
Non-cash
transactions: |
|
|
|
|
|
|
|
|
Shares issued for the
settlement of abaca acquisition |
|
$ |
4,085,076 |
|
|
$ |
8,105,911 |
|
Operating lease right of use
assets recognized |
|
|
- |
|
|
|
1,029,227 |
|
Operating lease liabilities
recognized |
|
|
- |
|
|
|
1,022,380 |
|
Shares issued for the
settlement of PCCU debt obligation |
|
|
38,406,408 |
|
|
|
- |
|
Cumulative effect from
adoption of CECL |
|
|
581,318 |
|
|
|
- |
|
Reversal of deferred
underwriting cost |
|
|
900,500 |
|
|
|
- |
|
Interest recognized on PCCU
settlement |
|
|
639,521 |
|
|
|
- |
|
Reconciliation of net (loss) income to non-GAAP EBITDA and
Adjusted EBITDA(Unaudited) |
|
Safe Harbor Financial discloses EBITDA and
Adjusted EBITDA, both of which are non-GAAP financial measures and
are calculated as net income before taxes and depreciation and
amortization expense in the case of EBITDA and further adjusted to
exclude non-cash, unusual and/or infrequent costs in the case of
Adjusted EBITDA. Management of the Company uses this information in
evaluating period over period performance because it believes that
EBITDA and Adjusted EBITDA present important metrics regarding the
Company’s ongoing operating performance. Investors should consider
non-GAAP financial measures only as a supplement to, not as a
substitute for or as superior to, measures of financial performance
prepared in accordance with GAAP.
A reconciliation of net (loss) income to non-GAAP EBITDA and
Adjusted EBITDA is as follows:
|
|
Year Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
Net loss |
|
$ |
(17,279,847 |
) |
|
$ |
(35,128,083 |
) |
Interest expense |
|
|
1,113,466 |
|
|
|
705,204 |
|
Depreciation and
amortization |
|
|
1,373,707 |
|
|
|
189,275 |
|
Taxes |
|
|
(1,829,701 |
) |
|
|
(9,252,893 |
) |
EBITDA |
|
|
(16,622,375 |
) |
|
|
(43,486,497 |
) |
|
|
|
|
|
|
|
|
|
Other adjustments – |
|
|
|
|
|
|
|
|
Provision for credit losses |
|
|
290,857 |
|
|
|
506,212 |
|
Change in the fair value of warrants and forward purchase
derivatives |
|
|
1,853,920 |
|
|
|
8,058,091 |
|
Change in fair value of Forward Purchase Agreement |
|
|
- |
|
|
|
33,322,248 |
|
Change in the fair value of deferred consideration |
|
|
(4,570,157 |
) |
|
|
97,593 |
|
Deferred loan origination fees and costs |
|
|
27,271 |
|
|
|
(1,890 |
) |
Stock based compensation |
|
|
3,739,156 |
|
|
|
2,806,336 |
|
Goodwill and long-lived intangible assets impairment |
|
|
18,907,739 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
3,626,411 |
|
|
$ |
1,302,093 |
|
|
The increase in our income on both an EBITDA and
Adjusted EBITDA basis for the fiscal year ending December 31, 2023
can be attributed to several key factors. These factors include a
rise in deposits and activity income, which was significantly
influenced by the growth in account numbers following the Abaca
acquisition. Additionally, there was an increase in employee
benefits and general and administrative expenses, coupled with a
decrease in professional expenses, as detailed in the ‘Discussion
of our Results of Operations’ section in our Annual Report on Form
10-K for the year ended December 31, 2023. Other adjustments
include estimated future credit losses not yet realized, including
amounts indemnified to Partner Colorado Credit Union (“PCCU”) for
loans funded by them, change in the fair value of warrants and
forward purchase derivates, change in fair value of the Forward
Purchase Agreement, stock based compensation and Goodwill and
long-lived intangible assets impairment. The Company had entered
into a Loan Servicing Agreement with PCCU, pursuant to which the
Company agreed to indemnify PCCU for claims associated with
cannabis-related business activities including any loan default
related losses for loans funded by PCCU; the Loan Servicing
Agreement has since been superseded by the Commercial Alliance
Agreement. Deferred loan origination fees and costs represent the
change in net deferred loan origination fees and costs. When
included with a new loan origination, we receive an upfront loan
origination fee in conjunction with new loans funded by our
financial institution partners and incur costs associated with
originating a specific loan. For accounting purposes, the cash
received for loan origination fees and costs is initially deferred
and recognized as interest income utilizing the interest
method.
Conference Call Details:The Company’s Chief
Executive Officer, Sundie Seefried and Chief Financial Officer, Jim
Dennedy will host a conference call and webcast at 4:30 pm ET /
1:30 pm PT today to discuss the Company's financial results and
provide investors with key business highlights.
|
Date: |
|
Monday, April
1, 2024 |
|
Time: |
|
4:30 p.m. ET / 1:30 p.m. PT |
|
Live webcast and replay: |
|
webcast link |
|
Participant Dial-In: |
|
646-307-1963 or 800-715-9871 (Toll Free) |
|
Passcode: |
|
1506945 |
|
|
|
|
About Safe HarborSafe 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 $21 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.
Forward-Looking StatementsCertain 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 loan performance; 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; Safe
Harbor’s ability to make the same or similar loans in the future;
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 SEC. 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. These and
other risks are discussed in detail in the periodic reports that
Safe Harbor files with the SEC, and investors are urged to review
those periodic reports and Safe Harbor’s other filings with the
SEC, which are accessible on the SEC’s website at www.sec.gov,
before making an investment decision. Safe Harbor assumes no
obligation to update its forward-looking statements except as
required by law.
Contact Information
Safe Harbor MediaNick Callaio, Marketing
Manager720.951.0619Nick@SHFinancial.org
Safe Harbor Investor Relationsir@SHFinancial.org
KCSA Strategic CommunicationsPhil Carlsonsafeharbor@kcsa.com
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