UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 30, 2023

SHF Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

001-40524

90-2409612

(Commission

File Number)

(IRS Employer

Identification No.)

1526 Cole Blvd., Suite 250

Golden, Colorado 80401

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code (303) 431-3435

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

	☐	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))

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.

Results of Operations and Financial Condition.

On March 30, 2023, SHF Holdings, Inc. (the “Company”) issued a press release announcing its preliminary earnings and other financial results for its 2022 year end and fourth quarter ended December 31, 2022, and that management would review these results in a conference call at 4:30 pm Eastern time on March 30, 2023.

Exhibit 99.1 is being furnished and will not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor will it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.

Item 9.01.

Financial Statements and Exhibits.

Exhibit No.		Description of Exhibit

99.1		Press Release dated March 30, 2023

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: March 30, 2023	By:	/s/ James H. Dennedy
		Chief Financial Officer

Exhibit 99.1

Safe Harbor Financial Announces Preliminary Fourth Quarter and Full Year 2022 Financial Results

- Full year revenue increased 34% to $9.4 million, number of active accounts increased 82% to 1040 compared to 2021 -

- Recent agreement to resolve $64.7 million in payment obligations significantly strengthens balance sheet, strongly positions the Company for further growth in 2023 -

GOLDEN, Colo., March 30, 2023 — SHF Holdings, Inc., d/b/a/ Safe Harbor Financial (“Safe Harbor” or the “Company”) (NASDAQ: SHFS), a leader in facilitating banking, payments, and financial services to the regulated cannabis industry, today announced certain preliminary (unaudited) financial results for the quarter and year ended December 31, 2022. All financial information is provided in U.S. dollars unless otherwise indicated and is prepared under U.S. Generally Accepted Accounting Principles (“GAAP”).

Full Year 2022 Financial Highlights¹

	●	Revenue increased 34% to $9.4 million, compared to $7.0 million in 2021
	●	Increased the number of active accounts by 82% to 1040, compared to 572 at the end of 2021
	●	The Company originated $15.8 million in loans, compared to $4.3 million in 2021
	●	Ended 2022 with $8.4 million in cash

“Safe Harbor had a pivotal year: we completed our go-public transaction to list on the Nasdaq exchange, executed on the strategic acquisition of Abaca, and significantly grew our client base to establish a solid foundation for success in 2023 and beyond,” said Sundie Seefried, Chief Executive Officer at Safe Harbor. “During the year, we expanded topline revenue by 34% and increased our client base by approximately 82%, demonstrating the considerable industry need for the services we provide. We are committed to providing access to essential banking services to cannabis-related businesses, or CRBs, using the most sophisticated fintech to optimize the experience of the CRBs that bank with our clients. Our recent acquisition of Abaca is perfectly aligned with this goal as it meaningfully enhanced and added key elements to our fintech platform to expedite transactions with our banking partners.

“This momentum has continued in 2023, and we are pleased to have reached an agreement with Partner Colorado Credit Union to restructure our payment obligations to them, which removes a considerable financial constraint and further enhances our ability to execute on our growth strategy. The cannabis industry is maturing, and the fully complaint cannabis banking onboarding, monitoring and compliance infrastructure we provide is vital to CRBs as they navigate this complex and dynamic industry. We are excited about the opportunities ahead and look forward to continuing to expand our services to meet the needs of financial institutions desiring to provide banking services to CRBs across the country, while enhancing value for our shareholders.”

2022 Operational Highlights

	●	On September 28, 2022, Company completed its business combination transaction in which it acquired the Safe Harbor operations (the “Business Combination”) and began trading on the Nasdaq Capital Markets.
	●	On November 16, 2022, the Company acquired Abaca, an industry-leading cannabis fintech platform, for $30 million in cash and Class A common stock. The acquisition increased Safe Harbor’s lending capacity; and added a sophisticated fintech platform and more than 300 cannabis-related business accounts.

Subsequent Operational Highlights

●

On March 30, 2023, the Company entered into agreements with Partner Colorado Credit Union (“PCCU”), the Company’s largest stockholder, resulting in the settlement of the approximately $64.7 million deferred payable owed to PCCU (the “Agreement”). Under the terms of the Agreement, the Company has agreed to resolve approximately $64.7 million of total payment obligations owed from the September 28, 2022 business combination in exchange for a 5-year, $14.5 million senior secured note bearing a 4.25% annual interest rate and issuance of 11.2 million shares of Class A common stock in the Company.

Originations and Loan Activity

●

For the twelve-month period ended December 31, 2022, Safe Harbor originated loans totaling $15.8 million, compared to $4.3 million for the 2021 full year.

Fourth Quarter 2022 Financial Results

For the quarter ended December 31, 2022, total revenue increased to $3.6 million, compared to $1.7 million in the prior year period, primarily due to higher investment and loan interest income.

Fourth quarter 2022 operating expense increased to $7.4 million, compared to $1.0 million in the prior year period, primarily driven by significantly higher compensation and employee expenses, professional service expenses, and amortization expense.

Net loss for the quarter ended December 31, 2022 was $37.0 million, compared to net income of $718,000 million in the prior year period, primarily due to the loss in value of several of the financial instruments placed in connection with the Business Combination.

Full Year 2022 Financial Results¹

For the year ended December 31, 2022, total revenue increased 34% to $9.4 million, compared to $7.0 million in 2021. The increase is due to higher investment and loan interest income, partially offset by lower Safe Harbor program and miscellaneous fee income.

For the full year ended December 31, 2022, total operating expense increased to $11.6 million compared to $3.7 million in 2021, due to the same drivers of expense in the fourth quarter of 2022.

¹See “Financial Disclosure Advisory” below.

Net loss for the year ended December 31, 2022 was $35.1 million, compared to net income of $3.2 million in 2021, primarily due to the loss in value of several of the financial instruments placed in connection with the Business Combination.

As at December 31, 2022, the Company had cash and cash equivalents of $8.4 million, compared to $5.5 million at December 31, 2021.

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 preliminary financial results and provide investors with key business highlights.

Date:	Thursday, March 30, 2023
Time:	4:30 pm ET / 1:30 pm PT
Live webcast and replay:	Click to access
Participant call link:	Click to access

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 seven years, Safe Harbor has facilitated more than $17 billion in deposit transactions for businesses with operations spanning more than 40 states and US territories with regulated cannabis markets. For more information, visit www.shfinancial.org.

Financial Disclosure Advisory

The Company has not yet completed the audit of its financial statements for the fourth quarter and year ended December 31, 2022. The preliminary results presented herein are based on the Company’s reasonable estimates and the information available to the Company at this time. As such, the Company’s actual results that will be reported once the audit is complete may materially vary from the preliminary results presented herein and will not be finalized until the Company completes its audit, which audit includes the assessment of the financial instruments related to the Company’s business combination that was completed on September 28, 2022 and intellectual property valuation related to the Company’s acquisition of Abaca that was completed on November 16, 2022, both of which are expected to impact Safe Harbor’s balance sheet and GAAP net income as at and for the year ended December 31, 2022, respectively. In addition, any statements regarding the Company’s estimated financial performance for the fourth quarter and year ended December 31, 2022 do not present all information necessary for an understanding of the Company’s financial condition and results of operations as of and for these reporting periods, which information will be presented in the Company’s filings with the SEC once the audit has been completed. The preliminary financial results presented herein were not reviewed by Safe Harbor’s independent registered public accounting firm.

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; 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.

Media Contact

Safe Harbor Financial

Nick Callaio, Marketing Manager

720.951.0619

[email protected]

Investor Relations Contact

Mattio Communications

[email protected]

SHF Holdings, Inc.

UNAUDITED CONSOLIDATED BALANCE SHEETS

	December 31,			December 31,
	2022			2021
ASSETS
Current Assets:
Cash and cash equivalents	$	8,390,195		$	5,495,905
Accounts receivable – trade		1,401,839			522,896
Contract assets		21,170			18,317
Prepaid expenses – current portion		175,585			6,021
Accrued interest receivable		40,266			7,556
Short-term loans receivable, net		51,300			52,833
Other Current Assets		150,817			-
Total Current Assets		10,231,172			6,103,528
Long-term loans receivable, net		1,250,691			1,410,727
Property, plant and equipment, net		49,614			6,351
Operating lease right to use assets		1,016,198			-
Goodwill		19,266,276			-
Intangible assets, net		10,621,087			-
Deferred tax asset		51,593,302			-
Prepaid expenses – long term position		712,500			-
Forward purchase receivable		4,584,221			-
Security deposit		17,795			-
Total Assets	$	99,342,856		$	7,520,606

LIABILITIES AND PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	2,851,457		$	43,626
Accrued expenses		6,354,485			129,546
Contract liabilities		996			8,333
Lease liabilities – current		20,124			-
Deferred Consideration – current portion		14,359,822			-
Due to seller - current portion		25,973,017			-
Other current liabilities		11,291			-
Total Current Liabilities		49,571,192			181,505
Warrant liability		666,510			-
Deferred Consideration – long term portion		2,747,592			-
Forward purchase derivative liability		7,309,580			-
Due to seller – long-term portion		30,976,783			-
Lease liabilities – long term		1,008,109			-
Deferred underwriter fee payable		1,450,500			-
Indemnity liability		499,465			-
Total Liabilities		94,229,731			181,505
Commitment and Contingencies
Parent-Entity Net Investment and Stockholders’ Equity

Convertible preferred stock, $.0001 par value, 1,250,000 shares authorized, 14,616 shares issued and outstanding on December 31, 2022, and no shares issued and outstanding on December 31, 2021, respectively		1			-
Class A common stock, $.0001 par value, 130,000,000 shares authorized, 23,732,889 issued and outstanding on December 31, 2022, and no shares issued and outstanding on December 31, 2021, respectively		2,374			-
Additional paid in capital		44,806,031			-
Retained earnings		(39,695,281	)		-
Parent-Entity Net Investment		-			7,339,101
Total Parent-Entity Net Investment and Stockholders’ Equity		5,113,125			7,339,101
Total Liabilities and Parent-Entity Net Investment and Stockholders’ Equity	$	99,342,856		$	7,520,606

SHF Holdings, Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the year ended December 31,
	2022			2021

Revenue	$	9,478,819		$	7,005,579

Operating Expenses
Compensation and employee benefits	$	6,695,319		$	2,135,243
General and administrative expenses		2,390,539			567,892
Professional services		1,985,343			292,143
Rent expense		99,246			73,482
Provision for loan losses		506,212			1,399
Corporate allocations		-			648,533
Total operating expenses	$	11,676,659		$	3,718,692
Operating (loss)/ Income		(2,197,840	)		3,286,887
Other (income) expenses
Interest expense		802,797			-
Change in fair value of warrant liability		(939,019	)		-
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	$	42,183,136		$	-
Net (loss) / income before income tax		(44,380,976	)		3,286,887
Provision for income taxes	$	(9,252,893	)	$	-
Net (loss)/income		(35,128,083	)		3,286,887
Weighted average shares outstanding, basic		18,988,558			-
Basic net loss per share	$	(1.85	)	$	-
Weighted average shares outstanding, diluted		18,988,558			-
Diluted net loss per share	$	(1.85	)	$	-

UNAUDITED CONSOLIDATED STATEMENTS OF PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2022, AND 2021

	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, 2020		-		$	-			-	$	-	$	-	$	4,354,021		$	-		$	4,354,021
Net income		-			-			-		-		-		3,286,887			-			3,286,887
Contribution of loan receivable from Parent		-			-			-		-		-		1,185,691			-			1,185,691
Net change due to allocations and distributions to Parent		-			-			-		-		-		(1,487,498	)		-			(1,487,498	)
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

SHF Holdings, Inc.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended December 31,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) / income	$	(35,128,083	)	$	3,286,887
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		202,302			1,921
Stock compensation expense		2,806,336			-
Interest expense		802,797			-
Provision for loan loss		506,212			1,399
Deferred tax credit		(9,252,893	)		-
Change in fair value of warrant and forward purchase option derivative liabilities		41,380,339			-
Changes in operating assets and liabilities:
Accounts receivable		(653,425	)		(293,355	)
Contract assets		(2,853	)		-
Prepaid expenses		55,997			(3,468	)
Forward purchase receivables		1,379,285			-
Accrued interest receivable		(32,711	)		(7,556	)
Deferred underwriting payable		(715,750	)		-
Other current assets		(150,817	)		-
Accounts payable		508,544			(64,900	)
Accrued expenses		17,550			37,742
Contract Liabilities		(7,337	)		-
Security deposit		(18,113	)		-
Deferred revenue		-			(12,287	)
Net cash provided by operating activities		1,697,380			2,946,383

CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property and equipment		(17,318	)		(5,920	)
Change in loan receivable, net		161,569			1,041,577
Acquisition of Abaca		(3,041,680	)		-
Net cash provided by (used in) investing activities		(2,897,429	)		1,035,657

CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from reverse capitalization, net of transaction costs		4,094,339			-
Net change in parent funding, allocations, and distributions to parent		-			(1,487,498	)
Net cash provided by (used in) financing activities		4,090,945			(1,487,498	)

Net increase in cash and cash equivalents		2,894,290			2,494,542
Cash and cash equivalents - beginning of period		5,495,905			3,001,363
Cash and cash equivalents - end of period	$	8,390,195		$	5,495,905

Non-Cash transactions:
Shares issued for the settlement of abaca acquisition	$	8,105,911		$	-
Operating lease right of use assets recognized		1,029,227			-
Operating lease liabilities recognized		1,022,380			-
Contribution of loan receivable from Parent		-			1,185,691

SHF Holdings, Inc.

UNAUDITED Reconciliation of net income to non-GAAP EBITDA and Adjusted EBITDA is as follows:

	Year Ended December 31,
	2022			2021
Net (loss)/ income	$	(35,128,083	)	$	3,286,887
Interest expense		802,797			-
Depreciation		189,275			1,921
Taxes		(9,252,893	)		-
EBITDA		(43,388,904	)		3,288,808

Other adjustments –
Loan loss provision		506,212			1,399
Change in warrants and forward purchase derivatives		41,380,339			-
Deferred loan origination fees and costs		(1,890	)		-
Stock option conversion		2,806,336			-
Adjusted EBITDA		1,302,093			3,290,207

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.

UNAUDITED PRO FORMA BALANCE SHEET STATEMENT POST IMPACT OF PCCU SETTLEMENT

	A			B			A+B
	December 31, 2022			Adjustment			December 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	8,390,195		$	-			8,390,195
Accounts receivable – trade		1,401,839			-			1,401,839
Contract assets		21,170			-			21,170
Prepaid expenses – current portion		175,585			-			175,585
Accrued interest receivable		40,266			-			40,266
Short-term loans receivable, net		51,300			-			51,300
Other Current Assets		150,817			-			150,817
Total Current Assets		10,231,172						10,231,172
Long-term loans receivable, net		1,250,691			-			1,250,691
Property, plant and equipment, net		49,614			-			49,614
Operating lease right to use assets		1,016,198			-			1,016,198
Goodwill		19,266,276			-			19,266,276
Intangible assets, net		10,621,087			-			10,621,087
Deferred tax asset		51,593,302			-			51,593,302
Prepaid expenses – long term position		712,500			-			712,500
Forward purchase receivable		4,584,221			-			4,584,221
Security deposit		17,795			-			17,795
Total Assets	$	99,342,856		$	-			99,342,856
LIABILITIES AND PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	2,851,457		$	-			2,851,457
Accrued expenses		6,354,485			(4,911,074	)		1,443,411
Contract liabilities		996						996
Lease liabilities – current		20,124			-			20,124
Deferred Consideration – current portion		14,359,822			-			14,359,822
Due to seller - current portion		25,973,017			(25,484,183	)		488,834
Other current liabilities		11,291			-			11,291
Total Current Liabilities		49,571,192			(30,395,257	)		19,175,935
Warrant liability		666,510			-			666,510
Deferred Consideration – long term portion		2,747,592			-			2,747,592
Forward purchase derivative liability		7,309,580			-			7,309,580
Due to seller – long-term portion		30,976,783			(16,965,617	)		14,011,166
Lease liabilities – long term		1,008,109			-			1,008,109
Deferred underwriter fee payable		1,450,500			(900,500	)		550,000
Indemnity liability		499,465			-			499,465
Total Liabilities		94,229,731			(48,261,374	)		45,968,357
Commitment and Contingencies
Parent-Entity Net Investment and Stockholders’ Equity

Convertible preferred stock, $.0001 par value, 1,250,000 shares authorized, 14,616 shares issued and outstanding on December 31, 2022, and no shares issued and outstanding on December 31, 2021, respectively		1			-			1
Class A common stock, $.0001 par value, 130,000,000 shares authorized, 23,732,889 issued and outstanding on December 31, 2022, and no shares issued and outstanding on December 31, 2021, respectively		2,374			1,120			3,494
Additional paid in capital		44,806,031			47,561,927			92,367,958
Retained earnings		(39,695,281	)		698,327			(38,996,954	)
Parent-Entity Net Investment		-			-			-
Total Parent-Entity Net Investment and Stockholders’ Equity		5,113,125			48,261,374			53,374,499
Total Liabilities and Parent-Entity Net Investment and Stockholders’ Equity	$	99,342,856		$	-			99,342,856