• Safe Harbor Financial Announces First Quarter 2024 Results

    Источник: Nasdaq GlobeNewswire / 13 май 2024 15:05:00   America/Chicago

    --Net Income increased 245% year-over-year to approximately $2.0 million in the first quarter of 2024

    --Adjusted EBITDA increased 165.3% to approximately $1.1 million(1)

    --Operating Expenses decreased 35.8% versus the same period in 2023

    GOLDEN, Colo., May 13, 2024 (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 financial results for the first quarter ended March 31, 2024.

    First Quarter 2024 Financial & Operational Summary

    • Net Income increased 245% to approximately $2.0 million, compared to a net loss of approximately $1.4 million in the same period of 2023;
    • Revenue was approximately $4.1 million, compared to approximately $4.2 million for the first quarter of 2023;
    • Gross profit was approximately $325,000, versus a gross loss of approximately $1.6 million in the first quarter of 2024;
    • Operating Expenses decreased 35.8% to $3.7 million, compared to $5.8 million in the first quarter of 2023;
    • Adjusted EBITDA increased 165.3% to approximately $1.1 million, compared to $410,000 for the first quarter of 2023(1).

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

    “We continued to expand the breadth of our service offering in the first quarter, advancing several strategic initiatives and establishing a more diversified income base,” said Sundie Seefried, Chief Executive Officer of Safe Harbor Financial. “We have been very successful with this effort, specifically within our lending program, nearly tripling our loan book year-over-year and driving a 251% increase in our loan income to $1.64 million in the first quarter of 2024 compared to $466,293 in the comparable period of 2023.”

    “These results speak directly to our unique ability to support the unmet financial needs of the cannabis industry, and the continued growth opportunity for Safe Harbor to address the evolving financial requirements of cannabis related businesses (CRB’s) through our streamlined platform. With the increasing likelihood that cannabis will be reclassified from a Schedule I drug to a Schedule III drug, we believe there will be a material increase of capital from these businesses moved into financial institutions, thereby creating stronger demand for our services,” concluded Seefried.

    First Quarter 2024 Operational Highlights

    • On January 4, 2024, the Company announced it originated a $9 Million first lien secured loan for a major, MSO-operated cultivation facility in Denver, Colorado.
    • On March 12, 2024, Safe Harbor announced it originated a $4.6 Million secured credit facility for a Michigan cannabis operator.

    Other Significant Events

    • On April 15th, 2024, the Company appointed CEO, Sundie Seefried to its Board of Directors.

    First Quarter 2024 Financial Results

    For the first quarter ended March 31, 2024, total revenue decreased 3% to $4.1 million, compared to $4.2 million in the prior year period, due to fewer accounts and lower balances on deposit versus the prior year period.

    First quarter 2024 net income was approximately $2.0 million, compared to a net loss of $1.4 million in the prior year period. The driver of the net income produced in the first quarter 2024 was due to lower expenses across the Company. Overall, operating expenses in the period decreased approximately 35.8% to $3.7 million, compared to $5.8 million in the prior year period.

    As of March 31, 2024, the Company had cash and cash equivalents of $5.6 million, compared to $4.9 million at December 31, 2023.

    For more information on the Company’s first quarter 2024 financial results, please refer to our Form 10-Q for the quarter ended March 31, 2024 filed with the U.S. Securities & Exchange Commission (the “SEC”) and accessible at www.sec.gov.

     
    SHF Holdings, Inc.
    CONDENSED CONSOLIDATED BALANCE SHEETS
           
      March 31, 2024
    (Unaudited)
      December 31, 2023 
           
    ASSETS        
    Current Assets:        
    Cash and cash equivalents $5,626,362  $4,888,769 
    Accounts receivable – trade  153,208   121,875 
    Accounts receivable – related party  1,111,390   2,095,320 
    Prepaid expenses – current portion  506,634   546,437 
    Accrued interest receivable  16,891   13,780 
    Short-term loans receivable, net  12,620   12,391 
    Other current assets  -   82,657 
    Total Current Assets $7,427,105  $7,761,229 
    Long-term loans receivable, net  379,863   381,463 
    Property, plant and equipment, net  45,366   84,220 
    Operating lease right to use assets  820,777   859,861 
    Goodwill  6,058,000   6,058,000 
    Intangible assets, net  3,564,890   3,721,745 
    Deferred tax asset  44,278,374   43,829,019 
    Prepaid expenses – long term position  525,000   562,500 
    Forward purchase receivable  4,584,221   4,584,221 
    Security deposit  18,875   18,651 
    Total Assets $67,702,471  $67,860,909 
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current Liabilities:        
    Accounts payable $179,242  $217,392 
    Accounts payable-related party  125,693   577,315 
    Accrued expenses  645,635   1,008,987 
    Contract liabilities  2,692   21,922 
    Lease liabilities – current  142,863   132,546 
    Senior secured promissory note – current portion  3,028,738   3,006,991 
    Deferred consideration – current portion  2,921,257   2,889,792 
    Other current liabilities  62,160   41,639 
    Total Current Liabilities $7,108,280  $7,896,584 
    Warrant liabilities  2,908,642   4,164,129 
    Deferred consideration – long term portion  594,000   810,000 
    Forward purchase derivative liability  7,309,580   7,309,580 
    Senior secured promissory note—long term portion  10,241,884   11,004,175 
    Net deferred indemnified loan origination fees  421,907   63,275 
    Lease liabilities – long term  835,598   875,447 
    Indemnity liability  1,315,263   1,382,408 
    Total Liabilities $30,735,154  $33,505,598 
    Commitment and Contingencies (Note 13)        
    Stockholders’ Equity        
    Convertible preferred stock, $.0001 par value, 1,250,000 shares authorized, 111 and 1,101 shares issued and outstanding on March 31, 2024, and December 31, 2023, respectively  -   - 
    Class A common stock, $.0001 par value, 130,000,000 shares authorized, 55,431,001 and 54,563,372 issued and outstanding on March 31, 2024, and December 31, 2023, respectively  5,545   5,458 
    Additional paid in capital  107,348,166   105,919,674 
    Retained deficit  (70,386,394)  (71,569,821)
    Total Stockholders’ Equity $36,967,317  $34,355,311 
    Total Liabilities and Stockholders’ Equity $67,702,471  $67,860,909 
             


     
    SHF Holdings, Inc.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
        
      For the three months ended
    March 31,
     
      2024  2023 
           
    Revenue $4,050,799  $4,180,379 
             
    Operating Expenses        
    Compensation and employee benefits $2,280,038  $3,659,520 
    General and administrative expenses  984,220   1,538,874 
    Professional services  460,950   449,246 
    Rent expense  69,437   87,742 
    Provision (benefit) for credit losses  (68,787)  66,666 
    Total operating expenses $3,725,858  $5,802,048 
    Operating income/ (loss)  324,941   (1,621,669)
    Other (income) expenses        
    Change in the fair value of deferred consideration  (184,535)  190,943 
    Interest expense  154,172   643,260 
    Change in fair value of warrant liabilities  (1,255,487)  (433,148)
    Total other (income)/ expenses $(1,285,850) $401,055 
    Net income/ (loss) before income tax  1,610,791   (2,022,724)
    Income tax benefit $438,885  $609,277 
    Net income/ (loss)  2,049,676   (1,413,447)
    Weighted average shares outstanding, basic  55,213,609   25,670,730 
    Basic net income/ (loss) per share $0.04  $(0.06)
    Weighted average shares outstanding, diluted  56,268,075   25,670,730 
    Diluted income/ (loss) per share $0.04  $(0.06)
             


     
    SHF Holdings, Inc.
    Condensed Consolidated Statements of Stockholders’ Equity
    (Unaudited)
     
    FOR THE THREE MONTHS ENDED MARCH 31, 2024
                     
      Preferred Stock  Class A
    Common Stock
      Additional
    Paid-in
      Retained  Total Shareholders’ 
      Shares  Amount  Shares  Amount  Capital  Earnings  Equity 
    Balance, December 31, 2023  1,101  $-   54,563,372  $5,458  $105,919,674  $(71,569,821) $34,355,311 
    Conversion of PIPE shares  (990)  -   792,000   79   866,170   (866,249)  - 
    Restricted stock units (net of tax)  -   -   75,629   8   (14,325)  -   (14,317)
    Stock compensation cost  -   -   -   -   576,647   -   576,647 
    Net Income  -   -   -   -   -   2,049,676   2,049,676 
    Balance, March 31, 2024  111   -   55,431,001   5,545   107,348,166   (70,386,394)  36,967,317 
                                 


     
    SHF Holdings, Inc.
    Condensed Consolidated Statements of Stockholders’ Equity
    (Unaudited)
     
    FOR THE THREE MONTHS ENDED MARCH 31, 2023
                    
      Preferred Stock  Class A
    Common Stock
      Additional
    Paid-in
      Retained  Total Shareholders’ 
      Shares  Amount  Shares  Amount  Capital  Earnings  Equity 
    Balance, December 31, 2022  14,616  $1   23,732,889  $2,374  $44,806,031  $(39,695,281) $5,113,125 
    Cumulative effect from adoption of CECL  -   -   -   -   -   (581,321)  (581,321)
    Conversion of PIPE shares  (3,720)  -   4,726,200   473   5,004,727   (5,005,200)  - 
    Stock option conversion  -   -   629,728   62   1,570,719   -   1,570,781 
    Issuance of shares to PCCU (net of tax)  -   -   11,200,000   1,120   38,405,288   -   38,406,408 
    Reversal of deferred underwriting cost  -   -   -   -   900,500   -   900,500 
    Net loss  -   -   -   -   -   (1,413,447)  (1,413,447)
    Balance, March 31, 2023  10,896  $1   40,288,817  $4,029  $90,687,265  $(46,695,249) $43,996,046 
                                 


     
    SHF Holdings, Inc.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
        
      For the three months ended
    March 31,
     
      2024  2023 
    CASH FLOWS FROM OPERATING ACTIVITIES:        
    Net income/ (loss) $2,049,676  $(1,413,447)
    Adjustments to reconcile net income/ (loss) to net cash provided by/ (used in) operating activities:        
    Depreciation and amortization expense  195,709   751,225 
    Stock compensation expense  562,330   1,570,781 
    Amortization of deferred origination fees  (27,970)  (14,104)
    Interest expense  -   873,289 
    (Benefit)/ provision for credit losses  (68,787)  66,666 
    Amortization of right of use assets  9,552   17,762 
    Income tax benefit  (438,885)  (609,277)
    Change in the fair value of deferred consideration  (184,535)  190,943 
    Change in fair value of warrant  (1,255,487)  (433,148)
    Changes in operating assets and liabilities:        
    Accounts receivable – Trade  (31,333)  (30,716)
    Accounts receivable – related party  983,930   182,824 
    Contract assets  -   (13,019)
    Prepaid expenses  77,303   77,436 
    Accrued interest receivable  (3,111)  (146,106)
    Deferred underwriting payable  -   (550,000)
    Other current assets  82,657   150,817 
    Other current liabilities  10,048   75,000 
    Accounts payable  (38,153)  (533,945)
    Accounts Payable – related party  (451,622)  (65,288)
    Accrued expenses  (363,347)  (466,849)
    Contract liabilities  (19,230)  78,616 
    Net deferred indemnified loan origination fees  386,602   8,500 
    Security deposit  (224)  - 
    Net cash provided by (used in) operating activities  1,475,123   (232,040)
    CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:        
    Purchase of property and equipment  -   (548,671)
    Net repayment of loans  3,014   1,019,268 
    Net cash provided by investing activities  3,014   470,597 
    CASH FLOWS USED IN FINANCING ACTIVITIES:        
    Repayment of senior secured promissory note  (740,544)  - 
    Net cash used in financing activities  (740,544)  - 
             
    Net increase in cash and cash equivalents  737,593   238,557 
    Cash and cash equivalents – beginning of period  4,888,769   8,390,195 
    Cash and cash equivalents – end of period $5,626,362  $8,628,752 
    Supplemental disclosure of cash flow information        
    Interest paid $156,414  $- 
    Non-Cash transactions:        
    Shares issued for the settlement of PCCU debt obligation $-  $38,406,408 
    Cumulative effect from adoption of CECL $-  $581,321 
             

    Reconciliation of Net income (loss) to non-GAAP EBITDA and Adjusted EBITDA
    (Unaudited)

    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 that EBITDA and Adjusted EBITDA present important metrics 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.

    A reconciliation of Net income (loss) to non-GAAP EBITDA and Adjusted EBITDA is as follows:

      Three Months Ended March 31, 
      2024  2023 
    Net income/(loss) $2,049,676  $(1,413,447)
    Interest expense  154,172   643,260 
    Depreciation and amortization  195,709   396,314 
    Taxes  (438,885)  (609,277)
    EBITDA $1,960,672  $(983,150)
             
    Other adjustments –        
    (Benefit)/ Provision for credit losses  (68,787)  66,666 
    Change in the fair value of warrants  (1,255,487)  (433,148)
    Change in the fair value of deferred consideration  (184,535)  190,943 
    Stock based compensation  612,124   1,570,782 
    Loan origination fees and costs  23,373   (2,175)
    Adjusted EBITDA $1,087,360  $409,918 
             

    For the quarter ending March 31, 2024, our EBITDA income improved primarily as a result of lower General and Administrative expenses and reduced stock-based compensation. Additionally, the increase in adjusted EBITDA income during this period was mainly attributed to the decrease in General and Administrative expenses. This reduction was driven by lower investment hosting fees, decreased amortization and depreciation expenses, and reduced business insurance costs. Additionally, there were decreases in compensation, employee benefits, marketing expenses, and other insurance costs. These factors contributing to our financial performance are further discussed in the “Discussion of our Results of Operations” section below. Other adjustments include estimated future credit losses not yet realized, including amounts indemnified to PCCU for loans funded by them. The Company had entered into a Commercial alliance agreement with PCCU, pursuant to which the Company agreed to indemnify PCCU for claims associated with CRB activities including any loan default related losses for loans funded by PCCU. Deferred loan origination fees and costs represent the change in net deferred loan origination fees and costs. When included with a new loan origination, we receive an upfront loan origination fee in conjunction with new loans funded by our financial institution partners and incur costs associated with originating a specific loan. For accounting purposes, the cash received for loan origination fees and costs is initially deferred and recognized as interest income utilizing the interest method.

    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 on May 13, 2024, 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 Financial call.

      
    Date:Monday, May 13, 2024
    Time:4:30 p.m. ET / 1:30 p.m. PT
    Live webcast and replay:https://edge.media-server.com/mmc/p/q2tyra8n 
    Participant Dial-In:646-307-1963 or 800-715-9871 (Toll Free)
    Passcode:9092789
      

    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. 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 $21 billion in deposit transactions for businesses with operations spanning over 41 states and US territories with regulated cannabis markets. For more information, visit www.shfinancial.org.

    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 and loan performance; 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; Safe Harbor’s ability to make the same or similar loans in the future; 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 SEC. 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. These and other risks are discussed in detail in the periodic reports that Safe Harbor files with the SEC, and investors are urged to review those periodic reports and Safe Harbor’s other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, before making an investment decision. Safe Harbor assumes no obligation to update its forward-looking statements except as required by law.

    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


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