Debra Borchardt
SHF Holdings, Inc., d/b/a/ Safe Harbor Financial (NASDAQ: SHFS) announced certain preliminary (unaudited) financial results for the fourth quarter and year ended December 31, 2022. Safe Harbor reported that its fourth-quarter total revenue increased to $3.6 million versus $1.7 million in the prior year period, primarily due to higher investment and loan interest income. The net loss for the quarter was $37.0 million versus last year’s net income of $718,000 million in the prior year period.
The company said the loss was attributed to the loss in value of several of the financial instruments placed in connection with the Business Combination. The business combination was the deal with Northern Lights Acquisition Corp. which allowed the company to begin trading on the Nasdaq Capital Markets.
For the full year, the company reported revenue increased 34% to $9.4 million versus $7.0 million in 2021. The net loss for the year ended December 31, 2022, was $35.1 million, compared to a net income of $3.2 million in 2021.
“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 essential banking services to cannabis-related businesses, or CRBs, using the most sophisticated fintech to optimize our customers’ experience. 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.”
Payment Settlement
In addition to reporting its earnings, Safe Harbor entered into agreements with Partner Colorado Credit Union, the company’s largest stockholder, resulting in the settlement of the approximately $64.7 million deferred payable owed to PCCU. Safe Harbor said it 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.
Company Details
Safe Harbor also told investors that it increased the number of active accounts by 82% to 1040, compared to 572 at the end of 2021. It originated $15.8 million in loans, compared to $4.3 million in 2021, and ended 2022 with $8.4 million in cash.
“This momentum has continued in 2023, and we are pleased to have reached an agreement with Partner Colorado Credit Union to resolve 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 compliant cannabis banking 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 CRBs across the country, while enhancing value for our shareholders.”
