Shf Holdings, Inc. (SHFS) SEC Filing 10-Q Quarterly Report for the period ending Friday, September 30, 2022

Shf Holdings, Inc.

CIK: 1854963 Ticker: SHFS


Safe Harbor Financial Reports Third Quarter 2022 Financial Results


— Revenue increased 38.6% to $2.38 Million in Third Quarter on a YoY Basis—


— Loan Originations increased 424% For The First Nine Months to $18.9 Million, Compared to the full Year 2021 —


— Total accounts reach 683, up 22% compared to September 2021 —


ARVADA, Colo., November 14, 2022 – SHF Holdings, Inc., d/b/a/ Safe Harbor Financial (“Safe Harbor

” or the “Company”) (NASDAQ: SHFS), a leader in facilitating financial services to the regulated cannabis industry, announced today its financial results for the third quarter ended September 30, 2022.


Founder and Chief Executive Officer, Sundie Seefried, commented, “2022 has been a transformative year for Safe Harbor, highlighted by our successful public listing on the Nasdaq in September. Throughout the year, Safe Harbor has continued to firmly establish itself as a leading provider of compliant financing and banking solutions to the regulated U.S. cannabis industry. We are strongly positioned to scale our proprietary financial services platform to support the evolving banking needs of cannabis related businesses and growth of the cannabis industry.”


“I am pleased to report, we have totaled nearly 700 accounts placed with us and increased our loan interest revenue by 1,400% in the third quarter of 2022 due to our ability to place a greater volume of high-quality credit. We remain focused on increasing our deposit base and expanding our loan services platform going forward. As of November 2, 2022, we have approximately $24.4 million of Safe Harbor originated loans in underwriting, which will continue to drive Safe Harbor’s financial growth. We remain steadfast in our mission to service the growing banking needs of the cannabis industry with our platform as we execute on our strategy.” concluded Ms. Seefried.


Third Quarter Financial and Operational Highlights


Safe Harbor completed its business combination transaction with Northern Lights Acquisition Corp and began trading on the Nasdaq Capital Markets on September 29, 2022.


Revenue increased 38.6% to $2.38 million for the three-months ended September 30, 2022, compared to $1.72 million for the third quarter of 2021. The increase was primarily attributable to the Company’s increase in investment income as a result of recent Federal Reserves interest rate increases and an increases in loan interest income.


Adjusted EBITDA was $1.28 million, compared to $947 thousand in the same period of 2021.


As of September 30, 2022, Safe Harbor had cash and marketable securities of $7.27 million.


Subsequent Events to the Quarter Ended September 30, 2022


Appointed James Dennedy, as Chief Financial Officer. Mr. Dennedy brings more than 25 years of investment and financial experience, and cannabis experience, to Safe Harbor, including senior leadership and director roles at both public and private companies.


Safe Harbor agreed to acquire Abaca, an industry leading cannabis fintech platform for $30 million in cash and common stock. Abaca brings more than 300 cannabis business related accounts and has facilitated more than $3.4 billion in gross transactions. Combining Safe Harbor’s wide range of financial services and Abaca’s industry-leading fintech and payment solutions will create comprehensive and streamlined banking solutions for cannabis operators.





Originations and Loan Activity


For the nine month period ended September 30, 2022, Safe Harbor originated loans totaling $18,886,500, compared to $3,600,000 for the full year in 2021 and $1,267,753 in 2020.


Financial Results


Three Months Ended September 30,  2022   2021   Change ($)   Change (%) 
Deposit, activity, onboarding income  $1,369,559   $1,494,204    (124,645)   (8.34)%
Safe Harbor Program income   38,598    83,194    (44,596)   (53.60)%
Investment income   558,860    111,052    447,808    403.24%
Loan interest income   412,297    28,411    383,886    1351.19%
Total Revenue  $2,379,314   $1,716,861    662,453    38.59%


For the quarter ended September 30, 2022, total revenue increased 38.6% to $2.37 million, compared to $1.72 million in the same period last year. This increase was the result of increased investment income related to higher interest rates and increased loan interest income. For the third quarter of 2022, the Company sourced six new loans. For the nine months ended September 30, 2022, total revenue increased 11.4% to $5.90 million, compared to $5.30 million in the same period in 2021.


For the quarter ended September 30, 2022, net income was $1.06 million, compared to $946 thousand in the same three month period ended September 30, 2021. For the nine months ended, September 30, 2022, net income was $1.89 million as compared to $2.57 million for the same period in 2021. The decrease in net income for the nine month period ended September 30, 2022 was due to an increase in operating expenses, mainly an increase in compensation, professional services and general and administrative expenses due to the Company becoming a publicly traded entity.


EBITDA and Adjusted EBITDA


   Three Months Ended September 30, 
   2022   2021 
Net income  $1,056,235    946,063 
Interest expense   36,002    - 
Depreciation and amortization expense   1,625    399 
Taxes   -    - 
EBITDA   1,093,862    946,462 
Other adjustments –          
Loan loss provision   88,345    514 
Loan origination fees and costs   102,364    - 
Adjusted EBITDA   1,284,571    946,976 





Safe Harbor disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that the Company calculates 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. Other adjustments include estimated future loan losses not yet realized including amounts indemnified to PCCU for loans funded by them.


Balance Sheet


As of Septmber 30, 2022, the Company had cash and cash equivalents of $7,273,012 as compared to $4,354,827 in same period ended September 30, 2021.


Earnings Conference Call


Chief Executive Officer Sundie Seefried and Chief Financial Officer, Jim Dennedy will host a conference call and webcast at 4:30pm Eastern / 1:30pm Pacific on November 14th to discuss the Company’s financial results and provide investors with key business highlights. For those interested in listening in to the conference call, please dial in and ask to join the Safe Harbor call.


Date: Monday November 14th, 2022


Time: 4:30pm Eastern / 1:30pm Pacific


Webcast: Safe Harbor Financial Webcast Link


Dial-In: +1 877-270-2148 (US Toll Free), +1 412-902-6510 (International)


The webcast will be available for three weeks following the conference call.


About Safe Harbor


Safe Harbor is one of the first service providers to offer compliance, monitoring and validation services to financial institutions while providing 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 seven years, Safe Harbor (including its predecessor) has assisted with the onboarding of over $14 billion in deposit transactions for customers with operations spanning 30 states with regulated cannabis markets. For more information, visit





Cautionary Statement Regarding 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 following the closing of the business combination; 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.


Safe Harbor Investor Relations Contacts:


KCSA Strategic Communications

Phil Carlson / Erika Kay


Safe Harbor Public Relations Contacts:


KCSA Strategic Communications

Joshua Greenwald / Danielle Dodson





SHF Holdings, Inc.



   September 30,   December 31, 
   2022   2021 
ASSETS   (Unaudited)    (Audited) 
Current Assets:          
Cash and cash equivalents  $7,273,012   $5,495,905 
Accounts receivable – trade   813,257    522,896 
Contract assets   7,676    18,317 
Prepaid expenses   941,478    6,021 
Accrued interest receivable   25,422    7,556 
Due from PIPE investors   4,090,000    - 
Short-term loans receivable   71,168    52,833 
Total Current Assets   13,222,013    6,103,528 
Long-term loans receivable, net   1,350,246    1,410,727 
Property and equipment, net   16,510    6,351 
Other investment   500,000    - 
Deferred tax asset   43,411,985    - 
Forward purchase derivative assets   1,085,839    - 
Forward purchase receivable   39,285,754    - 
Security deposit   5,036    - 
Total Assets  $98,877,383   $7,520,606 
Current Liabilities:          
Accounts payable  $2,263,746   $43,626 
Accrued expenses   5,569,026    129,546 
Contract liabilities   14,583    8,333 
Due to seller - current portion   33,616,468    - 
Total Current Liabilities   41,463,823    181,505 
Warrant liability   737,057    - 
Due to seller – long-term portion   23,333,333    - 
Deferred loan origination fees   102,364    - 
Deferred offering costs   2,166,250    - 
Indemnity liability   377,005    - 
Total Liabilities   68,179,832    181,505 
Parent-Entity Net Investment and Stockholders’ Equity          
Convertible preferred stock, $.0001 par value, 1,250,000 shares authorized, 20,450 shares issued and outstanding on September 30, 2022, and no shares issued and outstanding on December 31, 2021, respectively   2    - 
Class A common stock, $.0001 par value, 125,000,000 shares authorized, 18,715,912 issued and outstanding on September 30, 2022, and no shares issued and outstanding on December 31, 2021, respectively   1,872    - 
Additional paid in capital   30,451,696    - 
Retained earnings   243,981    - 
Parent-Entity Net Investment   -    7,339,101 
Total Parent-Entity Net Investment and Stockholders’ Equity   30,697,551    7,339,101 
Total Liabilities and Parent-Entity Net Investment and Stockholders’ Equity  $98,877,383   $7,520,606 





SHF Holdings, Inc.





For the three months

ended September 30,


For the nine months

ended September 30,

   2022   2021   2022   2021 
Revenue  $2,379,314   $1,716,861   $5,903,213   $5,297,457 
Operating Expenses                    
Compensation and employee benefits  $865,595   $539,611   $2,383,117   $1,997,669 
Professional services   195,464    29,288    534,494    91,558 
Rent expense   30,759    24,710    82,087    48,576 
Provision for loan losses   88,345    514    383,910    12,441 
General and administrative expenses   373,695    176,675    856,205    578,676 
Total operating expenses  $1,553,858   $770,798   $4,239,813   $2,728,920 
Operating income  $825,456   $946,063   $1,663,400   $2,568,537 
Other (income) expenses                    
Interest expense   36,002    -    36,002    - 
Change in fair value of warrant liability   (868,472)   -    (868,472)   - 
Change in fair value of forward purchase option derivative liability   601,691    -    601,691    - 
Total other (income) expenses  $(230,779)   -   $(230,779)   - 
Net income  $1,056,235   $946,063   $1,894,179   $2,568,537 
Weighted average shares outstanding, basic   18,715,912    18,715,912    18,715,912    18,715,912 
Basic net income per share  $0.06   $0.05   $0.10   $0.14 
Weighted average shares outstanding, diluted   20,760,912    18,715,912    20,760,912    18,715,912 
Diluted net income per share  $0.06   $0.05   $0.09   $0.14 





SHF Holdings, Inc.




   For the nine months ended September 30, 
   2022   2021 
Net income  $1,894,179   $2,568,537 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation expense   3,576    1,264 
Provision for loan loss   383,910    12,441 
Change in fair value of warrant and forward purchase option derivative liabilities   (266,781)   - 
Changes in operating assets and liabilities:          
Accounts receivable   (290,361)   (415,425)
Contract assets   10,641    - 
Prepaid expenses   (20,457)   (19,646)
Accrued interest receivable   (17,866)   (8,989)
Accounts payable   116,050    (70,770)
Accrued expenses   153,662    98,535 
Contract liabilities   6,250    16,943 
Net cash provided by operating activities   1,972,803    2,182,890 
Purchase of property and equipment   (13,735)   (344)
Issuance of new loans (net of payment received)   35,241    (415,657)
Funding of other investment   (500,000)   - 
Security deposit   (5,036)   - 
Net cash used in investing activities   (483,530)   (416,001)
Proceeds from reverse capitalization, net of transaction costs   287,834      
Net change in parent funding, allocations, and distributions to parent   -    (413,425)
Net cash provided by (used in) financing activities   287,834    (413,425)
Net increase in cash and cash equivalents   1,777,107    1,353,464 
Cash and cash equivalents - beginning of period   5,495,905    3,001,363 
Cash and cash equivalents - end of period  $7,273,012   $4,354,827 




The following information was filed by Shf Holdings, Inc. (SHFS) on Monday, November 14, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Combined Balance Sheets
Combined Balance Sheets (Parenthetical)
Combined Statements Of Cash Flows (Unaudited)
Combined Statements Of Net Income And Comprehensive Income (Unaudited)
Combined Statements Of Parent-Entity Net Investment And Stockholders' Equity (Unaudited)
Allowance For Loan Losses
Allowance For Loan Losses (Details Narrative)
Allowance For Loan Losses (Tables)
Commitments And Contingencies
Earnings Per Share
Earnings Per Share (Tables)
Financial Instruments
Financial Instruments (Tables)
Forward Purchase Agreement
Forward Purchase Agreement (Details Narrative)
Loans Receivable
Loans Receivable (Tables)
Organization And Business Operations
Organization And Business Operations (Details Narrative)
Other Investment
Other Investment (Details Narrative)
Property And Equipment, Net
Property And Equipment, Net (Details Narrative)
Property And Equipment, Net (Tables)
Related Party Transactions
Related Party Transactions (Details Narrative)
Related Party Transactions (Tables)
Revenue (Tables)
Schedule Of Allowance For Loan Losses (Details)
Schedule Of Carrying Amounts And Fair Values Of Financial Instruments By The Level Of Valuation Inputs In The Fair Value Hierarchy (Details)
Schedule Of Commercial Real Estate Loans Receivable (Details)
Schedule Of Demonstrates Deposit Capacity (Details)
Schedule Of Disaggregated Revenue (Details)
Schedule Of Earning Per Shares, Basic And Diluted (Details)
Schedule Of Earning Per Shares, Basic And Diluted (Details) (Parenthetical)
Schedule Of Fair Value Assets And Liabilities Measured On Recurring Basis (Details)
Schedule Of Indemnity Liability (Details)
Schedule Of Level 3 Fair Value Measurement Inputs (Details)
Schedule Of Outstanding Amounts (Details)
Schedule Of Property And Equipment, Net (Details)
Subsequent Events
Subsequent Events (Details Narrative)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (Details Narrative)
Summary Of Significant Accounting Policies (Policies)
Warrant Liability
Warrant Liability (Details Narrative)
Ticker: SHFS
CIK: 1854963
Form Type: 10-Q Quarterly Report
Accession Number: 0001493152-22-032258
Submitted to the SEC: Mon Nov 14 2022 5:15:10 PM EST
Accepted by the SEC: Mon Nov 14 2022
Period: Friday, September 30, 2022
Industry: Finance Services

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