SHF Holdings, Inc 8-K, filed Nov 14, 2023

SHF Holdings, Inc. (SHFS)

8-K 2023-11-14 For: 2023-11-14

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Added on April 11, 2026

About this 8-K

SHF Holdings, Inc filed this 8-K on November 14, 2023.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class A Common Stock, $0.0001 par value per share	SHFS	The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share	SHFSW	The Nasdaq Stock Market LLC

Exhibit No.		Description of Exhibit

99.1		Press Release dated November 7, 2023
99.2		Press Release dated November 14, 2023
104		Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit)

	SHF HOLDINGS, INC.

Date: November 14, 2023	By:	/s/ James H. Dennedy
		Chief Financial Officer

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

●	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.

●	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.

	●	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.

	●	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.

	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

	For the three months ended September 30						For the nine months ended September 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

	Preferred Stock					Class A Common Stock				Additional Paid-in		Parent- Entity Net		Retained			Total Shareholders’
	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

	Preferred Stock				Class A Common Stock				Additional Paid-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

	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			-

	Three months ended September 30,						Nine months ended September 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