Safe Harbor Financial Reports Fourth Quarter and Year-End 2024 Results

— Adjusted EBITDA(1) is positive for each of the last 3 years; Adjusted Working Capital(2) is approximately positive $2 million

— Loan Interest Income increased 82% and 123% year-over-year for the three months and full-year ended December 31, 2024, respectively

— Revenue for the Q4 2024 increased 5% compared to the Q3 2024, led by a 35% sequential increase in loan interest income

— Loan Loss Reserve of approximately $1.4 million reserved as a result of a modified Commercial Alliance Agreement (CAA) with Partner Colorado Credit Union (PCCU)

— Modifications of PCCU Commercial Alliance Agreement and Note enable new CEO Terry Mendez to implement growth strategy offering broader solutions for clients

GOLDEN, Colo., April 01, 2025 (GLOBE NEWSWIRE) -- 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 unaudited consolidated financial results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Financial and Operational Summary

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Revenue was approximately $3.7 million, compared to approximately $4.5 million for the fourth quarter of 2023 and $3.5 million for the third quarter of 2024.

●

 

Loan Interest Income increased 82% to approximately $1.8 million from approximately $1.0 million the fourth quarter of 2023.

●

 

Compensation and Employee Benefits expense of approximately $1.4 million declined 32% compared to approximately $2.1 million in 2023.

●

 

General and Administrative Expense of approximately $1.1 million declined 36% from $1.7 million in 2023.

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Adjusted EBITDA(1) was positive at $63,581, compared to $1.3 million in the fourth quarter of 2023(1).

●

 

On October 29, 2024, the Company announced it originated a $1.07 million secured credit facility for a Missouri cannabis operator.

●

 

On December 4, 2024, Safe Harbor, Collective Clean Energy Fund and Partner Colorado announced they are collaborating to fund a $500,000 sustainable upgrade loan for a Denver cannabis facility.

 

 

 

Full-Year 2024 Financial & Operational Summary

●

 

Revenue was approximately $15.2 million, compared to approximately $17.6 million for the full year of 2023.

●

 

Loan Interest Income increased 123% to approximately $6.6 million for the full year of 2024 from approximately $3.0 million for the full year of 2023.

●

 

Operating Expenses decreased to approximately $22.3 million, compared to approximately $38.3 million in 2023.

●

 

Adjusted EBITDA(1) was approximately $2.9 million, compared to approximately $3.6 million for the full year of 2023(1).

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Adjusted Working Capital(2) was approximately $2 million at December 31, 2024

 

 

 

(1) Adjusted EBITDA is a non-GAAP financial metric. A reconciliation of non-GAAP to GAAP measures is included below in this earnings release.(2) Adjusted Working Capital is a non-GAAP financial metric. A reconciliation of non-GAAP to GAAP measures is included below in this earnings release.

Subsequent Operational Highlights

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On December 31, 2024, the Company and PCCU entered into an Amended Commercial Alliance Agreement (the "Amended CAA"), extending the term through December 31, 2028, with automatic two-year renewal periods unless a party provides written notice of non-renewal at least 12 months before the current term expires. In addition, the Amended CAA eliminates the Company's indemnification obligations for any losses related to any loans it facilitated under the Original Commercial Alliance Agreement or will facilitate in the future.

●

 

On January 16, 2025, the Company announced it had processed over $25 Billion in cannabis-related funds.

●

 

On January 29, 2025, Safe Harbor announced that Terry Mendez joined as Co-CEO, and he became CEO on February 28, 2025, upon the retirement of former CEO Sundie Seefried.

●

 

On February 12, 2025, the Company announced it had originated a $1,500,000 secured credit facility for a Missouri cannabis operator.

●

 

On March 4, 2025, Safe Harbor announced it successfully modified its debt obligation with Partner Colorado Credit Union (the "Amended PCCU Note"), unlocking $6.4 million in cash flow over the next two years.

●

 

On March 20, 2025, the Company announced Mike Regan has joined as Head of Investor Relations and Data Science.

 

 

 

"Throughout 2024, the lending arm of Safe Harbor was a driving force for the Company as our loan interest income was up 82% for the fourth quarter and 123% for the year," said Terry Mendez, Chief Executive Officer of Safe Harbor Financial. "We continue to be an innovator in this sector as we instituted a new small business line of credit program while also originating several debt and credit facilities at market-competitive terms for numerous clients across the U.S. We were able to do this while remaining diligent in lower overall expenses. While fourth quarter 2024 operating expenses increased 86% compared to the fourth quarter of 2023, operating expenses declined 42% for the full year 2024. Operating expenses adjusted for material non-cash items declined approximately 15% year-over year in the fourth quarter 2024 and 24% for the full-year of 2024."

Mendez continued, "Subsequent to the quarter end, the Company surpassed $25 billion in processed cannabis-related funds through our trusted network of partner banks. This is a significant milestone that we achieved on our 10th anniversary and is another proven point that Safe Harbor continues to be a leader in offering compliant banking services to cannabis related businesses. We also originated a $1.5 million secured credit facility with a cannabis operator out of Missouri, further cementing our position as a trusted financial partner to cannabis businesses.

"Finally, in a redefining transaction for the Company, we successfully modified our debt obligation with Partner Colorado Credit Union. This modification greatly improves our financial stability as we are able to unlock over $6 million in cashflow over the next two years and push the term of the debt obligation out to October 2030. This updated debt deal provides Safe Harbor with the financial flexibility needed to enhance and expand our overall business services as we execute on our business strategy throughout 2025 and beyond.

"One of the major reasons I joined Safe Harbor is the tremendous opportunity I see to build upon our strong foundation, to evolve from a single compliance solution into a provider of a broad array of services focused on addressing the needs of our clients. I believe that Safe Harbor is well positioned to offer competitive solutions designed to protect, lend, connect and enable the success of our customers and our clients," concluded Mendez.

Full Year 2024 Financial Results

For the year ended December 31, 2024, total revenue was $15.2 million, compared to approximately $17.6 million in the prior year. The decrease in revenue was due to a reduction in deposit activity and onboarding income and was primarily attributable to the decrease in the number of accounts related to the Abaca acquisition, offset by a 123% year-over-year increase in loan interest income. In the full-year ended December 31, 2024, PCCU accounted for $4.6 million of the revenue generated from deposits, activities, and client onboarding. Related to this revenue, the Company recognized $452,371 in account hosting expenses.

Full-year 2024 operating expenses decreased over 42% to $22.3 million, compared to $38.3 million in the prior year period, which was comprised of the following:

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Compensation and employee benefits expenses decreased 25% due to decrease in stock-based compensation and a lower headcount as compared to previous year. Restructuring efforts will continue as we optimize our talent portfolio.

 

 

 

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General and administrative expenses decreased 39% across various categories including: i) $988,412 in investment hosting fees as a result of the decrease in investment income, ii) $900,034 in decreased bank sharing fees due to the decrease in the number of accounts, and iii) $661,776 in decreased amortization and depreciation.

 

 

 

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For the year ended December 31, 2024, the Company fully impaired goodwill and finite-lived intangible assets. Goodwill and intangible assets are now fully written down to $0 on the balance sheet.

 

 

 

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The professional services expense increased primarily due to higher legal fees related to ongoing litigation.

 

 

 

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Credit Loss Expense benefitted from the elimination of the indemnity liability from the Balance Sheet as of December 31, 2024, due to the Amended CAA.

 

 

 

Net loss for full year 2024 was approximately $48.3 million, compared to a net loss of approximately $17.3 million in the prior year period. This includes the impact of approximately $43.9 million non-cash valuation allowance on the deferred tax asset and $9.1 million in non-cash Goodwill and Long-Lived Intangible Asset Impairment expenses.

As of December 31, 2024, the Company had cash and cash equivalents of $2.3 million, compared to $4.9 million at December 31, 2023.

 

SHF Holdings, Inc.CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

December 31,2024(Unaudited)

 

 

December 31,2023

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,324,647

 

 

$

4,888,769

 

Accounts receivable, trade

 

 

134,609

 

 

 

121,875

 

Accounts receivable, related party

 

 

968,023

 

 

 

2,095,320

 

Prepaid expenses, current portion

 

 

659,536

 

 

 

546,437

 

Accrued interest receivable

 

 

16,319

 

 

 

13,780

 

Forward purchase receivable

 

 

4,584,221

 

 

 

-

 

Short-term loans receivable, net

 

 

13,332

 

 

 

12,391

 

Other current assets

 

 

3,000,000

 

 

 

82,657

 

Total Current Assets

 

$

11,700,687

 

 

$

7,761,229

 

Long-term loans receivable, net

 

 

378,854

 

 

 

381,463

 

Property, plant and equipment, net

 

 

3,154

 

 

 

84,220

 

Operating lease right to use assets

 

 

703,524

 

 

 

859,861

 

Goodwill

 

 

-

 

 

 

6,058,000

 

Intangible assets, net

 

 

-

 

 

 

3,721,745

 

Deferred tax asset, net

 

 

-

 

 

 

43,829,019

 

Prepaid expenses, long term position

 

 

412,500

 

 

 

562,500

 

Forward purchase receivable

 

 

-

 

 

 

4,584,221

 

Security deposit

 

 

19,568

 

 

 

18,651

 

Total Assets

 

$

13,218,287

 

 

$

67,860,909

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

140,723

 

 

$

217,392

 

Accounts payable-related party

 

 

75,608

 

 

 

577,315

 

Accrued expenses

 

 

1,301,378

 

 

 

1,008,987

 

Contract liabilities

 

 

28,335

 

 

 

21,922

 

Lease liabilities, current

 

 

161,952

 

 

 

132,546

 

Senior secured promissory note, current portion

 

 

255,765

 

 

 

3,006,991

 

Deferred consideration, current portion

 

 

3,338,343

 

 

 

2,889,792

 

Forward purchase derivative liability

 

 

7,309,580

 

 

 

-

 

Other current liabilities

 

 

72,836

 

 

 

41,639

 

Total Current Liabilities

 

$

12,684,520

 

 

$

7,896,584

 

Warrant liabilities

 

 

1,360,491

 

 

 

4,164,129

 

Deferred consideration, long term portion

 

 

-

 

 

 

810,000

 

Forward purchase derivative liability

 

 

-

 

 

 

7,309,580

 

Senior secured promissory note—long term portion

 

 

10,748,408

 

 

 

11,004,175

 

Net deferred indemnified loan origination fees

 

 

-

 

 

 

63,275

 

Lease liabilities, long term

 

 

712,882

 

 

 

875,447

 

Indemnity liability

 

 

-

 

 

 

1,382,408

 

Total Liabilities

 

$

25,506,301

 

 

$

33,505,598

 

Commitment and Contingencies

 

 

 

 

 

 

 

 

Stockholders' (Deficit) Equity