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 three- and
nine-month results for the period ended September 30, 2023 (“Q3
2023”).
Q3 2023 Financial and Operational
Highlights
- Revenue increased 82.11% to $4.3 million, compared to $2.4
million in Q3 2022;
- Total deposits increased 28.7% to $1.08 billion compared to
$836.4 million in Q3 2022;
- Monthly average number of accounts held with financial
institution (“FI”) clients increased 49.6% to 986 compared to 659
in Q3 2022;
- Monthly average balances on deposit held with FI clients
increased 36.5% to $216.9 million, compared to $158.9 million in Q3
2022;
- Loan Book value at the end of Q3 2023 increased 123.2% to $42.2
million as compared to $18.9 million in Q3 2022;
- Ended Q3 2023 with $8.9 million in cash.
First Nine Months 2023 Highlights
- Revenue increased 121.7% to $13.1 million, compared to $5.9
million in the first nine months of 2022;
- Total deposits increased 28.7% to $1.08 billion compared to
$836.4 million to the first nine months of 2022;
- Monthly average number of accounts held with financial
institution (“FI”) clients increased 62.7% to 1,010 compared to 616
in Q3 2022;
- Monthly average balances on deposit held with FI clients
increased 53.0% to $226.8 million, compared to $148.2 million in Q3
2022;
- Loan Book value at the end of the first nine months of 2023
increased 123.2 % to $42.2 million as compared to $18.9 million in
the same period in 2022.
“The third quarter was another successful
quarter for Safe Harbor as our ongoing execution of our growth
strategy led to another period of strong financial and operational
results for the overall business,” commented Sundie Seefried, Chief
Executive Officer of Safe Harbor Financial.
“Over the past year since becoming a publicly
traded company operating in a highly regulated industry, our focus
has been to grow our overall deposit base and increase the size of
our loan book while serving cannabis related businesses. As a
result of our continued dedication to the industry coupled with the
compliant fintech platform, we have to processed more than $1
billion in cannabis related funds for each of the first three
quarters of 2023. With this increased deposit base, we have also
been able to increase our credit portfolio by 123% year-over-year
to over $42 million in book value. Since the end of 2022, we have
also significantly reduced our overall operating expenses while
still being able to grow our business and further increase Adjusted
EBITDA which was positive for the third consecutive quarter,”
concluded Seefried.
Third Quarter 2023 Operational Highlights
- On July 12, 2023, Safe Harbor
announced the launch of interest-bearing commercial accounts;
- On July 27, 2023, the Company
announced it had originated three new loans to a tier-one
multi-state operator (MSO);
- On August 4, 2023, Safe Harbor
announced its CEO, Sundie Seefried received the Green Market Report
Cannabis Finance Award for Top CEO;
- On August 21, 2023, the Company
announced it hit a key milestone by helping to process over $20
billion in cannabis related funds;
- On September 14, 2023, Safe Harbor
announced it had originated a $3 million first lien secured loan
for a leading THC-infused beverage company;
- On September 19, 2023, the Company
announced it launched new line of credit products for cannabis
businesses.
Subsequent Operational
Highlights
- On October 10, 2023, the Company
announced its participation in the Maxim Group Virtual Tech
Conference Series: Exploring All Corners of the Tech Sector.
- On October 27, 2023, Safe Harbor
announced the restructuring of certain deferred consideration
obligations in connection with the 2022 acquisition of Abaca.
2023 Financial OutlookBased on
the continued strength of the Company's operations, Safe Harbor
anticipates that full year 2023 revenue will be in the range of
$16.0 million to $16.5 million as compared to the $9.5 million in
revenue reported for the 2022 full year.
Q3 2023 Three Month Financial
ResultsFor the quarter ended September 30, 2023, total
revenue increased to $4.3 million, compared to $2.4 million in the
prior year period, primarily due to higher investment and loan
interest income and higher deposit, activity and onboarding
income.
Third quarter 2023 operating expenses increased
to $3.8 million, compared to $1.6 million in the prior year period.
The increase in operating expense is due to increased compensation
and employee benefits increased on account of stock-based
compensation and also the increase in the head count in
anticipation of growth. General and administrative expenses
increased across various categories including: i) approximately
$134,699 in investment hosting fees as a result of the
reorganization, ii) approximately $92,123 in increased marketing
expense as we focus on growth, iii) approximately $287,246 in
amortization and depreciation, and iv) approximately $100,023 in
business insurance. There was an increase in professional services
expense primarily due to the increase in the legal fees, audit
fees, and consulting fees towards SEC filing and other regulatory
reporting. The provision for credit losses has decreased due to
decrease in the loss rate and an increase in the absolute value of
the loans. Impairment of goodwill and finite lived intangible
assets has increased on account of termination of the Master
Services and Revenue Sharing Agreement with Central Bank under
which the Company provided expertise and intellectual property to
cannabis related businesses primarily located in Arkansas.
Net loss for Q3 2023 was $748,067, compared to
net income of $1,056,235 in the prior year period, primarily due to
an increase in compensation and employee benefits as well as an
increase in general and administrative expenses. The net loss also
includes an increase in professional fees on account of an increase
in compliance expenses as well as increases in compensation,
employee benefits, marketing, and insurance.
Q3 2023 Nine Month Financial
Results
For the nine month period ended September 30,
2023, total revenue increased to $13.1 million, compared to $5.9
million in the prior year period, primarily due to higher
investment and loan interest income and higher deposit, activity
and onboarding income.
First nine month 2023 operating expenses
increased to $32.1 million, compared to $4.2 million in the prior
year period. The increase in operating expenses is due to increased
compensation and employee benefits on account of stock-based
compensation and also the increase in the head count in
anticipation of growth. General and administrative expenses
increased across various categories including: i) approximately
$746,080 in investment hosting fees as a result of the
reorganization, ii) approximately $93,393 in increased marketing
expense as we focus on growth, iii) approximately $1,082,959 in
amortization and depreciation, and iv) approximately $533,630 in
business insurance. Professional services expense increased
primarily due to the increase in the legal fees, audit fees, and
consulting fees towards SEC filing and other ancillary reporting.
There was a $13.2 million impairment of goodwill and a $3.7 million
finite-lived intangible assets on account of the termination of the
Master Services and Revenue Sharing Agreement with Central Bank
under which the Company provided expertise and intellectual
property to cannabis related businesses primarily located in
Arkansas. The provision for credit losses increased due to an
increase in the loss rate and with an increase in the absolute
value of the loans.
Net loss for the first nine months of 2023 was
$19.8 million, compared to net income of $1.9 million in the prior
year period, primarily due to an increase in compensation and
employee benefits as well as an increase in general and
administrative expenses. The net loss also includes an increase in
professional fees on account of increases in compliances expenses
as well as increases in compensation, employee benefits, marketing,
and insurance.
As of September 30, 2023, the Company had cash
and cash equivalents of $8.9 million, compared to $8.4 million at
December 31, 2022.
SHF Holdings, Inc.CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
|
September 30,2023 |
|
|
December 31,2022 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current
Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
8,948,644 |
|
|
$ |
8,390,195 |
|
Accounts receivable – trade |
|
|
1,312,900 |
|
|
|
1,401,839 |
|
Contract assets |
|
|
2,115 |
|
|
|
21,170 |
|
Prepaid expenses – current portion |
|
|
189,488 |
|
|
|
175,585 |
|
Accrued interest receivable |
|
|
123,282 |
|
|
|
40,266 |
|
Short-term loans receivable, net |
|
|
12,166 |
|
|
|
51,300 |
|
Other current assets |
|
|
- |
|
|
|
150,817 |
|
Total Current
Assets |
|
$ |
10,588,595 |
|
|
$ |
10,231,172 |
|
Long-term loans receivable, net |
|
|
304,967 |
|
|
|
1,250,691 |
|
Property, plant and equipment, net |
|
|
126,363 |
|
|
|
49,614 |
|
Operating lease right to use assets |
|
|
898,945 |
|
|
|
1,016,198 |
|
Goodwill |
|
|
6,058,000 |
|
|
|
19,266,276 |
|
Intangible assets, net |
|
|
5,985,773 |
|
|
|
10,621,087 |
|
Deferred tax asset |
|
|
43,198,800 |
|
|
|
51,593,302 |
|
Prepaid expenses – long term position |
|
|
614,120 |
|
|
|
712,500 |
|
Forward purchase receivable |
|
|
4,584,221 |
|
|
|
4,584,221 |
|
Security deposit |
|
|
18,501 |
|
|
|
17,795 |
|
Total
Assets |
|
$ |
72,378,285 |
|
|
$ |
99,342,856 |
|
LIABILITIES AND
PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
933,719 |
|
|
$ |
2,851,457 |
|
Accrued expenses |
|
|
1,323,651 |
|
|
|
6,354,485 |
|
Contract liabilities |
|
|
63,402 |
|
|
|
996 |
|
Lease liabilities – current |
|
|
122,508 |
|
|
|
20,124 |
|
Senior secured promissory note – current portion |
|
|
2,731,369 |
|
|
|
- |
|
Deferred consideration – current portion |
|
|
14,722,147 |
|
|
|
14,359,822 |
|
Due to seller - current portion |
|
|
- |
|
|
|
25,973,017 |
|
Other current liabilities |
|
|
72,912 |
|
|
|
11,291 |
|
Total Current
Liabilities |
|
$ |
19,969,708 |
|
|
$ |
49,571,192 |
|
Warrant liability |
|
|
1,084,308 |
|
|
|
666,510 |
|
Deferred consideration – long term portion |
|
|
2,857,891 |
|
|
|
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 |
|
|
11,768,631 |
|
|
|
- |
|
Lease liabilities – long term |
|
|
898,745 |
|
|
|
1,008,109 |
|
Deferred underwriter fee |
|
|
- |
|
|
|
1,450,500 |
|
Indemnity liability |
|
|
1,465,455 |
|
|
|
499,465 |
|
Total
Liabilities |
|
$ |
45,354,318 |
|
|
$ |
94,229,731 |
|
Commitment and
Contingencies (Note 15) |
|
|
|
|
|
|
|
|
Parent-Entity Net
Investment and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock,
$.0001 par value, 1,250,000 shares authorized, 3,811 and 14,616
shares issued and outstanding on September 30, 2023 and December
31, 2022, respectively |
|
|
- |
|
|
|
1 |
|
Class A common stock, $.0001
par value, 130,000,000 shares authorized, 46,593,317 and 23,732,889
issued and outstanding on September 30, 2023 and December 31, 2022,
respectively |
|
|
4,660 |
|
|
|
2,374 |
|
Additional paid in
capital |
|
|
98,704,114 |
|
|
|
44,806,031 |
|
Retained deficit |
|
|
(71,684,807 |
) |
|
|
(39,695,281 |
) |
Total Parent-Entity Net
Investment and Stockholders’ Equity |
|
$ |
27,023,967 |
|
|
$ |
5,113,125 |
|
Total Liabilities and
Parent-Entity Net Investment and Stockholders’ Equity |
|
$ |
72,378,285 |
|
|
$ |
99,342,856 |
|
The accompanying notes are an integral part of
the unaudited condensed consolidated financial
statements.
SHF Holdings, Inc.CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months endedSeptember
30 |
|
|
For the nine months endedSeptember
30 |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
4,332,974 |
|
|
$ |
2,379,314 |
|
|
$ |
13,085,861 |
|
|
$ |
5,903,213 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and employee
benefits |
|
$ |
2,069,910 |
|
|
$ |
865,595 |
|
|
$ |
8,269,761 |
|
|
$ |
2,383,117 |
|
General and administrative
expenses |
|
|
1,482,792 |
|
|
|
373,695 |
|
|
|
4,874,255 |
|
|
|
856,205 |
|
Impairment of goodwill |
|
|
- |
|
|
|
- |
|
|
|
13,208,276 |
|
|
|
- |
|
Impairment of finite-lived
intangible assets |
|
|
- |
|
|
|
- |
|
|
|
3,680,463 |
|
|
|
- |
|
Professional services |
|
|
361,804 |
|
|
|
195,464 |
|
|
|
1,431,785 |
|
|
|
534,494 |
|
Rent expense |
|
|
87,951 |
|
|
|
30,759 |
|
|
|
246,694 |
|
|
|
82,087 |
|
Provision (benefit) for credit
losses |
|
|
(200,932 |
) |
|
|
88,345 |
|
|
|
377,614 |
|
|
|
383,910 |
|
Total operating expenses |
|
$ |
3,801,525 |
|
|
$ |
1,553,858 |
|
|
$ |
32,088,848 |
|
|
$ |
4,239,813 |
|
Operating (loss) income |
|
|
531,449 |
|
|
|
825,456 |
|
|
|
(19,002,987 |
) |
|
|
1,663,400 |
|
Other expenses (income) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
356,840 |
|
|
|
36,002 |
|
|
|
1,544,779 |
|
|
|
36,002 |
|
Change in fair value of
forward purchase option derivative liability |
|
|
- |
|
|
|
601,691 |
|
|
|
- |
|
|
|
601,691 |
|
Change in fair value of
warrant liability |
|
|
860,735 |
|
|
|
(868,472 |
) |
|
|
417,798 |
|
|
|
(868,472 |
) |
Total other expenses |
|
$ |
1,217,575 |
|
|
$ |
230,779 |
|
|
$ |
1,962,577 |
|
|
$ |
230,779 |
|
Net (loss) income before
income tax |
|
|
(686,126 |
) |
|
|
1,056,235 |
|
|
|
(20,965,564 |
) |
|
|
1,894,179 |
|
Income tax (benefit)
expense |
|
|
61,941 |
|
|
|
- |
|
|
|
(1,199,483 |
) |
|
|
- |
|
Net (loss) income |
|
$ |
(748,067 |
) |
|
$ |
1,056,235 |
|
|
$ |
(19,766,081 |
) |
|
$ |
1,894,179 |
|
Weighted average shares
outstanding, basic |
|
|
49,257,988 |
|
|
|
18,715,912 |
|
|
|
38,725,273 |
|
|
|
18,715,912 |
|
Basic net (loss) income per
share |
|
$ |
(0.02 |
) |
|
$ |
0.06 |
|
|
$ |
(0.51 |
) |
|
$ |
0.10 |
|
Weighted average shares
outstanding, diluted |
|
|
49,257,988 |
|
|
|
20,760,912 |
|
|
|
38,725,273 |
|
|
|
20,760,912 |
|
Diluted (loss) income per
share |
|
$ |
(0.02 |
) |
|
$ |
0.05 |
|
|
$ |
(0.51 |
) |
|
$ |
0.09 |
|
The accompanying notes are an integral part of
the unaudited condensed consolidated financial statements.
SHF Holdings,
Inc.CONDENSED CONSOLIDATED STATEMENTS OF
PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS’
EQUITY(Unaudited)
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock |
|
|
Class A CommonStock |
|
|
AdditionalPaid-in |
|
|
Parent-Entity Net |
|
|
Retained |
|
|
TotalShareholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Investment |
|
|
deficit |
|
|
Equity |
|
Balance, June 30, 2023 |
|
|
4,221 |
|
|
$ |
- |
|
|
|
46,265,317 |
|
|
$ |
4,627 |
|
|
$ |
97,923,103 |
|
|
$ |
- |
|
|
$ |
(70,577,990 |
) |
|
$ |
27,349,740 |
|
Conversion of PIPE shares |
|
|
(410 |
) |
|
|
- |
|
|
|
328,000 |
|
|
|
33 |
|
|
|
358,717 |
|
|
|
- |
|
|
|
(358,750 |
) |
|
|
- |
|
Restricted stock units |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
33,735 |
|
|
|
- |
|
|
|
- |
|
|
|
33,735 |
|
Stock option conversion |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
388,559 |
|
|
|
- |
|
|
|
- |
|
|
|
388,559 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(748,067 |
) |
|
|
(748,067 |
) |
Balance, September 30,
2023 |
|
|
3,811 |
|
|
$ |
- |
|
|
|
46,593,317 |
|
|
$ |
4,660 |
|
|
$ |
98,704,114 |
|
|
$ |
- |
|
|
$ |
(71,684,807 |
) |
|
$ |
27,023,967 |
|
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
2022
|
|
Preferred Stock |
|
|
Class A Common Stock |
|
|
AdditionalPaid-in |
|
|
Parent-Entity Net |
|
|
Retained |
|
|
Total Shareholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Investment |
|
|
deficit |
|
|
Equity |
|
Balance, June 30, 2022 |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
8,312,043 |
|
|
$ |
- |
|
|
$ |
8,312,043 |
|
Issuance of shares in
connection with Business Combination and PIPE offering, net of
issuance costs |
|
|
20,450 |
|
|
|
2 |
|
|
|
18,715,912 |
|
|
|
1,872 |
|
|
|
30,451,696 |
|
|
|
(9,124,297 |
) |
|
|
- |
|
|
|
21,329,273 |
|
Net profit |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
812,254 |
|
|
|
243,981 |
|
|
|
1,056,235 |
|
Balance, September 30,
2022 |
|
|
20,450 |
|
|
$ |
2 |
|
|
|
18,715,912 |
|
|
$ |
1,872 |
|
|
$ |
30,451,696 |
|
|
$ |
- |
|
|
$ |
243,981 |
|
|
$ |
30,697,551 |
|
SHF Holdings,
Inc.CONDENSED CONSOLIDATED STATEMENTS OF
PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS’
EQUITY(Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2023
|
|
Preferred Stock |
|
|
Class A CommonStock |
|
|
AdditionalPaid-in |
|
|
Parent-Entity Net |
|
|
Retained |
|
|
TotalShareholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Investment |
|
|
deficit |
|
|
Equity |
|
Balance, December 31, 2022 |
|
|
14,616 |
|
|
$ |
1 |
|
|
|
23,732,889 |
|
|
$ |
2,374 |
|
|
$ |
44,806,031 |
|
|
$ |
- |
|
|
$ |
(39,695,281 |
) |
|
$ |
5,113,125 |
|
Reversal of deferred
underwriting cost |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
900,500 |
|
|
|
- |
|
|
|
- |
|
|
|
900,500 |
|
Cumulative effect from
adoption of CECL |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(581,321 |
) |
|
|
(581,321 |
) |
Conversion of PIPE shares |
|
|
(10,805 |
) |
|
|
(1 |
) |
|
|
10,394,200 |
|
|
|
1,039 |
|
|
|
11,641,086 |
|
|
|
- |
|
|
|
(11,642,124 |
) |
|
|
- |
|
Restricted stock units |
|
|
- |
|
|
|
- |
|
|
|
1,266,228 |
|
|
|
127 |
|
|
|
1,243,446 |
|
|
|
- |
|
|
|
- |
|
|
|
1,243,573 |
|
Stock option conversion |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,707,763 |
|
|
|
- |
|
|
|
- |
|
|
|
1,707,763 |
|
Issuance of shares to PCCU
(net of tax) |
|
|
- |
|
|
|
- |
|
|
|
11,200,000 |
|
|
|
1,120 |
|
|
|
38,405,288 |
|
|
|
- |
|
|
|
- |
|
|
|
38,406,408 |
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(19,766,081 |
) |
|
|
(19,766,081 |
) |
Balance, September 30,
2023 |
|
|
3,811 |
|
|
$ |
- |
|
|
|
46,593,317 |
|
|
$ |
4,660 |
|
|
$ |
98,704,114 |
|
|
$ |
- |
|
|
$ |
(71,684,807 |
) |
|
$ |
27,023,967 |
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2022
|
|
Preferred Stock |
|
|
Class A CommonStock |
|
|
AdditionalPaid-in |
|
|
Parent-Entity Net |
|
|
Retained |
|
|
TotalShareholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Investment |
|
|
deficit |
|
|
Equity |
|
Balance, December 31, 2021 |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
7,339,101 |
|
|
$ |
- |
|
|
$ |
7,339,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from parent |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
134,998 |
|
|
|
- |
|
|
|
134,998 |
|
Issuance of shares in
connection with Business Combination and PIPE offering, net of
issuance costs |
|
|
20,450 |
|
|
|
2 |
|
|
|
18,715,912 |
|
|
|
1,872 |
|
|
|
30,451,696 |
|
|
|
(9,124,297 |
) |
|
|
- |
|
|
|
21,329,273 |
|
Net income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,650,198 |
|
|
|
243,981 |
|
|
|
1,894,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30,
2022 |
|
|
20,450 |
|
|
$ |
2 |
|
|
|
18,715,912 |
|
|
$ |
1,872 |
|
|
$ |
30,451,696 |
|
|
$ |
- |
|
|
$ |
243,981 |
|
|
$ |
30,697,551 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
the unaudited condensed consolidated financial
statements.
SHF Holdings, Inc.CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(Unaudited) |
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(19,766,081 |
) |
|
$ |
1,894,179 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
1,086,535 |
|
|
|
3,576 |
|
Stock compensation expense |
|
|
2,951,336 |
|
|
|
- |
|
Interest expense |
|
|
1,544,780 |
|
|
|
- |
|
Provision for credit losses |
|
|
377,614 |
|
|
|
383,910 |
|
Lease expense |
|
|
110,273 |
|
|
|
- |
|
Impairment of goodwill |
|
|
13,208,276 |
|
|
|
- |
|
Impairment of finite-lived intangible assets |
|
|
3,680,463 |
|
|
|
- |
|
Deferred tax benefit |
|
|
(1,199,483 |
) |
|
|
(266,781 |
) |
Change in fair value of warrant |
|
|
417,798 |
|
|
|
- |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
88,937 |
|
|
|
(290,361 |
) |
Contract assets |
|
|
19,055 |
|
|
|
10,641 |
|
Prepaid expenses |
|
|
84,477 |
|
|
|
(20,457 |
) |
Accrued interest receivable |
|
|
(83,017 |
) |
|
|
(17,866 |
) |
Deferred underwriting payable |
|
|
(550,000 |
) |
|
|
- |
|
Other current assets |
|
|
150,817 |
|
|
|
- |
|
Accounts payable |
|
|
(1,856,117 |
) |
|
|
116,050 |
|
Accrued expenses |
|
|
(552,395 |
) |
|
|
153,662 |
|
Deferred loan origination fees |
|
|
- |
|
|
|
- |
|
Contract liabilities |
|
|
62,406 |
|
|
|
6,250 |
|
Security deposit |
|
|
(706 |
) |
|
|
(5,036 |
) |
Net cash (used in) provided by operating activities |
|
|
(225,032 |
) |
|
|
1,967,767 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS USED IN
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(208,434 |
) |
|
|
(13,735 |
) |
Funding of other investment |
|
|
- |
|
|
|
(500,000 |
) |
Repayment of loans receivable, net |
|
|
991,914 |
|
|
|
35,241 |
|
Net cash provided by (used in) investing activities |
|
|
783,480 |
|
|
|
(483,530 |
) |
CASH FLOWS USED IN
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from reverse capitalization, net of transaction costs |
|
|
- |
|
|
|
287,834 |
|
Net cash provided by financing activities |
|
|
- |
|
|
|
287,834 |
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash
equivalents |
|
|
558,449 |
|
|
|
1,777,107 |
|
Cash and cash equivalents –
beginning of period |
|
|
8,390,195 |
|
|
|
5,495,905 |
|
Cash and cash equivalents –
end of period |
|
$ |
8,948,644 |
|
|
$ |
7,273,012 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure |
|
|
|
|
|
|
|
|
Shares issued for the
settlement of PCCU debt obligation |
|
$ |
38,406,408 |
|
|
$ |
- |
|
Cumulative effect from
adoption of CECL |
|
|
581,321 |
|
|
|
- |
|
Interest payment on senior
secured promissory note |
|
|
260,007 |
|
|
|
- |
|
Reversal of deferred
underwriting cost |
|
|
900,500 |
|
|
|
- |
|
The accompanying notes are an integral part of
the unaudited condensed consolidated financial statements.
UNAUDITED Reconciliation of net (loss) income to non-GAAP
EBITDA andAdjusted EBITDA is as follows: |
|
|
|
|
|
|
|
|
|
|
Three months endedSeptember
30, |
|
|
Nine months endedSeptember
30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net (loss) income |
|
$ |
(748,067 |
) |
|
$ |
1,056,235 |
|
|
$ |
(19,766,081 |
) |
|
$ |
1,894,179 |
|
Interest expense |
|
|
356,840 |
|
|
|
36,002 |
|
|
|
1,544,779 |
|
|
|
36,002 |
|
Depreciation and
amortization |
|
|
288,871 |
|
|
|
1,625 |
|
|
|
1,086,535 |
|
|
|
3,576 |
|
Taxes |
|
|
61,941 |
|
|
|
- |
|
|
|
(1,199,483 |
) |
|
|
- |
|
EBITDA |
|
$ |
(40,415 |
) |
|
$ |
1,093,862 |
|
|
$ |
(18,334,250 |
) |
|
$ |
1,933,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other adjustments – |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit (benefit) losses |
|
|
(200,932 |
) |
|
|
88,345 |
|
|
|
377,614 |
|
|
|
383,910 |
|
Change in the fair value of warrants |
|
|
860,735 |
|
|
|
(868,472 |
) |
|
|
417,798 |
|
|
|
(868,472 |
) |
Change in the fair value of forward purchase derivatives |
|
|
- |
|
|
|
601,691 |
|
|
|
- |
|
|
|
601,691 |
|
Stock option conversion |
|
|
422,294 |
|
|
|
- |
|
|
|
2,951,336 |
|
|
|
- |
|
Impairment of goodwill and finite-lived intangible assets |
|
|
- |
|
|
|
- |
|
|
|
16,888,739 |
|
|
|
- |
|
Loan origination fees and costs |
|
|
11,431 |
|
|
|
102,364 |
|
|
|
12,178 |
|
|
|
102,364 |
|
Adjusted EBITDA |
|
$ |
1,053,113 |
|
|
$ |
1,017,790 |
|
|
$ |
2,313,415 |
|
|
$ |
2,153,250 |
|
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 it
presents an important metric 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.
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: |
Tuesday,
November 14, 2023 |
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: |
2576146 |
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. Currently managing
more than 1000 cannabis-related relationships, 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 $18 billion
in deposit transactions for businesses with operations spanning
over 40 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; 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; 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. . We discuss these risks in greater detail
in the sections entitled “Risk Factors” in our Annual Report on
Form 10-K and, as applicable, in our Quarterly Reports on Form 10-Q
filed with the SEC. Given these uncertainties, you should not place
undue reliance on these forward-looking statements.
Except as required by law, we assume no obligation to update these
forward-looking statements, or to update the reasons actual results
could differ materially from those anticipated in these
forward-looking statements, even if new information becomes
available in the future.
Contact Information
Safe Harbor Media |
Nick Callaio, Marketing
Manager |
720.951.0619 |
Nick@SHFinancial.org |
|
Safe Harbor Investor
Relations |
ir@SHFinancial.org |
|
KCSA Strategic
Communications |
Phil Carlson |
safeharbor@kcsa.com |
151504607.2
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