# EDGAR Filing Document

**Accession Number:** 0001854963
**File Stem:** 0001493152-23-009734
**Filing Date:** 2023-3
**Character Count:** 31129
**Document Hash:** fa04d724c97a6f305c74d2664ca7865a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-009734.hdr.sgml**: 20230330

**ACCESSION NUMBER**: 0001493152-23-009734

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230330

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230330

**DATE AS OF CHANGE**: 20230330

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SHF Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001854963
- **STANDARD INDUSTRIAL CLASSIFICATION:** FINANCE SERVICES [6199]
- **IRS NUMBER:** 862409612
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40524
- **FILM NUMBER:** 23780629

**BUSINESS ADDRESS:**
- **STREET 1:** 1526 COLE BLVD.
- **STREET 2:** SUITE 250
- **CITY:** GOLDEN
- **STATE:** CO
- **ZIP:** 80401
- **BUSINESS PHONE:** (303) 431-3435

**MAIL ADDRESS:**
- **STREET 1:** 1526 COLE BLVD.
- **STREET 2:** SUITE 250
- **CITY:** GOLDEN
- **STATE:** CO
- **ZIP:** 80401

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Northern Lights Acquisition Corp.
- **DATE OF NAME CHANGE:** 20210402

?xml version="1.0" encoding="utf-8"?

**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): <u>March 30, 2023</u>

**<u>SHF Holdings, Inc.</u>**

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

<u>001-40524</u> <u>90-2409612</u> <br> (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 <u>(303) 431-3435</u>

(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](ex99-1.htm) |
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |

---

**<u>SIGNATURES</u>**

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.** | **SHF HOLDINGS, INC.** |
| Date: March 30, 2023 | By: | */s/ James H. Dennedy* |
|  |  | Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

![](ex99-1_001.jpg)

**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 Highlights<sup>1</sup>**

● 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 Results<sup>1</sup>**

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.

<sup>1</sup> See "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: | <u>Click to access</u> |
| Participant call link: | <u>Click to access</u> |

---

**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 <u>www.shfinancial.org</u>.

**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 Nick@SHFinancial.org

**Investor Relations Contact**

Mattio Communications

ir@mattio.com

**SHF Holdings, Inc.**

**UNAUDITED CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2022** | **December 31,**<br>**2021** |
| **ASSETS** |  |  |
| **Current Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $8390195 | $5495905 |
| &nbsp;&nbsp;&nbsp;Accounts receivable – trade | 1401839 | 522896 |
| &nbsp;&nbsp;&nbsp;Contract assets | 21170 | 18317 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses – current portion | 175585 | 6021 |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | 40266 | 7556 |
| &nbsp;&nbsp;&nbsp;Short-term loans receivable, net | 51300 | 52833 |
| &nbsp;&nbsp;&nbsp;Other Current Assets | 150817 | - |
| **Total Current Assets** | **10231172** | **6103528** |
| &nbsp;&nbsp;&nbsp;Long-term loans receivable, net | 1250691 | 1410727 |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 49614 | 6351 |
| &nbsp;&nbsp;&nbsp;Operating lease right to use assets | 1016198 |  |
| &nbsp;&nbsp;&nbsp;Goodwill | 19266276 |  |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 10621087 |  |
| &nbsp;&nbsp;&nbsp;Deferred tax asset | 51593302 |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses – long term position | 712500 |  |
| &nbsp;&nbsp;&nbsp;Forward purchase receivable | 4584221 |  |
| &nbsp;&nbsp;&nbsp;Security deposit | 17795 | - |
| **Total Assets** | $**99342856** | $**7520606** |
| **LIABILITIES AND PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS' EQUITY** |  |  |
| **Current Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $2851457 | $43626 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 6354485 | 129546 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 996 | 8333 |
| &nbsp;&nbsp;&nbsp;Lease liabilities – current | 20124 |  |
| &nbsp;&nbsp;&nbsp;Deferred Consideration – current portion | 14359822 |  |
| &nbsp;&nbsp;&nbsp;Due to seller - current portion | 25973017 |  |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 11291 | - |
| **Total Current Liabilities** | **49571192** | **181505** |
| &nbsp;&nbsp;&nbsp;Warrant liability | 666510 |  |
| &nbsp;&nbsp;&nbsp;Deferred Consideration – long term portion | 2747592 |  |
| &nbsp;&nbsp;&nbsp;Forward purchase derivative liability | 7309580 |  |
| &nbsp;&nbsp;&nbsp;Due to seller – long-term portion | 30976783 |  |
| &nbsp;&nbsp;&nbsp;Lease liabilities – long term | 1008109 |  |
| &nbsp;&nbsp;&nbsp;Deferred underwriter fee payable | 1450500 |  |
| &nbsp;&nbsp;&nbsp;Indemnity liability | 499465 | - |
| **Total Liabilities** | **94229731** | 181505 |
| **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 | 2374 |  |
| Additional paid in capital | 44806031 |  |
| Retained earnings | (39695281) |  |
| Parent-Entity Net Investment | - | 7339101 |
| Total Parent-Entity Net Investment and Stockholders' Equity | 5113125 | 7339101 |
| **Total Liabilities and Parent-Entity Net Investment and Stockholders' Equity** | $**99342856** | $**7520606** |

---

**SHF Holdings, Inc.**

**UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS**

---

| | | |
|:---|:---|:---|
|  | **For the year ended December 31,** | **For the year ended December 31,** |
|  | **2022** | **2021** |
| Revenue | $9478819 | $7005579 |
| Operating Expenses |  |  |
| &nbsp;&nbsp;&nbsp;Compensation and employee benefits | $6695319 | $2135243 |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 2390539 | 567892 |
| &nbsp;&nbsp;&nbsp;Professional services | 1985343 | 292143 |
| &nbsp;&nbsp;&nbsp;Rent expense | 99246 | 73482 |
| &nbsp;&nbsp;&nbsp;Provision for loan losses | 506212 | 1399 |
| &nbsp;&nbsp;&nbsp;Corporate allocations | - | 648533 |
| &nbsp;&nbsp;&nbsp;Total operating expenses | $11676659 | $3718692 |
| Operating (loss)/ Income | (2197840) | 3286887 |
| Other (income) expenses |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 802797 |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liability | (939019) |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of forward purchase agreement | 33322248 |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of forward purchase option derivative | 8997110 | - |
| Total other (income) expenses | $42183136 | $- |
| Net (loss) / income before income tax | (44380976) | 3286887 |
| Provision for income taxes | $(9252893) | $- |
| Net (loss)/income | (35128083) | 3286887 |
| Weighted average shares outstanding, basic | 18988558 | - |
| Basic net loss per share | $(1.85) | $- |
| Weighted average shares outstanding, diluted | 18988558 | - |
| 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** | **Preferred Stock** | **Class A Common Stock** | **Class A Common Stock** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional Paid-in**<br> **Capital** | **Parent-<br> Entity Net**<br> **Investment** | **Retained**<br> **Earnings** | **Total<br> Shareholders'**<br> **Equity** |
| **Balance, December 31, 2020** |  | $**-** | **-** | $**-** | $**-** | $4354021 | $**-** | $4354021 |
| Net income |  | **-** | **-** | **-** | **-** | 3286887 | **-** | 3286887 |
| Contribution of loan receivable from Parent |  | **-** | **-** | **-** | **-** | 1185691 | **-** | 1185691 |
| Net change due to allocations and distributions to Parent | - | **-** | **-** | **-** | **-** | (1487498) | **-** | (1487498) |
| **Balance, December 31, 2021** | **-** | $**-** | **-** | $**-** | $**-** | $7339101 | $**-** | $7339101 |
| Issuance of shares in connection with Business Combination and PIPE offering, net of issuance costs | 20450 | 2 | 18715912 | 1872 | 29327087 | (7339101) |  | 21989860 |
| Acquisition of Abaca |  |  | 2099977 | 210 | 8105701 |  |  | 8105911 |
| Conversion of PIPE Shares | (5834) | (1) | 2917000 | 292 | 2916709 |  | (2917000) |  |
| Stock option conversion |  |  |  |  | 2806336 |  |  | 2806336 |
| Net loss | - | - | - | - | 1650198 | - | (36778281) | (35128083) |
| **Balance, December 31, 2022** | **14616** | $**1** | **23732889** | $**2374** | $**44806031** | $**-** | $**(39695281)** | $**5113125** |

---

**SHF Holdings, Inc.**

**UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** |
|  | **2022** | **2021** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net (loss) / income | $(35128083) | $3286887 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation expense | 202302 | 1921 |
| &nbsp;&nbsp;&nbsp;Stock compensation expense | 2806336 |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 802797 |  |
| &nbsp;&nbsp;&nbsp;Provision for loan loss | 506212 | 1399 |
| &nbsp;&nbsp;&nbsp;Deferred tax credit | (9252893) |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant and forward purchase <br>option derivative liabilities | 41380339 |  |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (653425) | (293355) |
| &nbsp;&nbsp;&nbsp;Contract assets | (2853) |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 55997 | (3468) |
| &nbsp;&nbsp;&nbsp;Forward purchase receivables | 1379285 |  |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | (32711) | (7556) |
| &nbsp;&nbsp;&nbsp;Deferred underwriting payable | (715750) |  |
| &nbsp;&nbsp;&nbsp;Other current assets | (150817) |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 508544 | (64900) |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 17550 | 37742 |
| &nbsp;&nbsp;&nbsp;Contract Liabilities | (7337) |  |
| &nbsp;&nbsp;&nbsp;Security deposit | (18113) |  |
| &nbsp;&nbsp;&nbsp;Deferred revenue | - | (12287) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 1697380 | 2946383 |
| **CASH FLOWS USED IN INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (17318) | (5920) |
| &nbsp;&nbsp;&nbsp;Change in loan receivable, net | 161569 | 1041577 |
| &nbsp;&nbsp;&nbsp;Acquisition of Abaca | (3041680) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities | (2897429) | 1035657 |
| **CASH FLOWS USED IN FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from reverse capitalization, net of transaction costs | 4094339 |  |
| &nbsp;&nbsp;&nbsp;Net change in parent funding, allocations, and distributions to parent | - | (1487498) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 4090945 | (1487498) |
| Net increase in cash and cash equivalents | 2894290 | 2494542 |
| Cash and cash equivalents - beginning of period | 5495905 | 3001363 |
| Cash and cash equivalents - end of period | $8390195 | $5495905 |
| **Non-Cash transactions:** |  |  |
| Shares issued for the settlement of abaca acquisition | $8105911 | $- |
| Operating lease right of use assets recognized | 1029227 |  |
| Operating lease liabilities recognized | 1022380 |  |
| Contribution of loan receivable from Parent |  | 1185691 |

---

**SHF Holdings, Inc.**

**<u>UNAUDITED Reconciliation of net income to non-GAAP EBITDA and Adjusted EBITDA is as follows:</u>**

---

| | | |
|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** |
| Net (loss)/ income | $(35128083) | $3286887 |
| Interest expense | 802797 |  |
| Depreciation | 189275 | 1921 |
| Taxes | (9252893) | - |
| EBITDA | (43388904) | 3288808 |
| Other adjustments – |  |  |
| &nbsp;&nbsp;&nbsp;Loan loss provision | 506212 | 1399 |
| &nbsp;&nbsp;&nbsp;Change in warrants and forward purchase derivatives | 41380339 |  |
| &nbsp;&nbsp;&nbsp;Deferred loan origination fees and costs | (1890) | - |
| &nbsp;&nbsp;&nbsp;Stock option conversion | 2806336 | - |
| Adjusted EBITDA | 1302093 | 3290207 |

---

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.

**<u>UNAUDITED PRO FORMA BALANCE SHEET STATEMENT POST IMPACT OF PCCU SETTLEMENT</u>**

---

| | | | |
|:---|:---|:---|:---|
|  | **A** | **B** | **A+B** |
|  | **December 31,**<br> **2022** | **Adjustment** | **December 31,**<br> **2022** |
| **ASSETS** |  |  |  |
| **Current Assets:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $8390195 | $- | 8390195 |
| &nbsp;&nbsp;&nbsp;Accounts receivable – trade | 1401839 |  | 1401839 |
| &nbsp;&nbsp;&nbsp;Contract assets | 21170 |  | 21170 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses – current portion | 175585 |  | 175585 |
| &nbsp;&nbsp;&nbsp;Accrued interest receivable | 40266 |  | 40266 |
| &nbsp;&nbsp;&nbsp;Short-term loans receivable, net | 51300 |  | 51300 |
| &nbsp;&nbsp;&nbsp;Other Current Assets | 150817 | - | 150817 |
| **Total Current Assets** | **10231172** |  | **10231172** |
| &nbsp;&nbsp;&nbsp;Long-term loans receivable, net | 1250691 |  | 1250691 |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment, net | 49614 |  | 49614 |
| &nbsp;&nbsp;&nbsp;Operating lease right to use assets | 1016198 |  | 1016198 |
| &nbsp;&nbsp;&nbsp;Goodwill | 19266276 |  | 19266276 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 10621087 |  | 10621087 |
| &nbsp;&nbsp;&nbsp;Deferred tax asset | 51593302 |  | 51593302 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses – long term position | 712500 |  | 712500 |
| &nbsp;&nbsp;&nbsp;Forward purchase receivable | 4584221 |  | 4584221 |
| &nbsp;&nbsp;&nbsp;Security deposit | 17795 | - | 17795 |
| **Total Assets** | $**99342856** | $**-** | **99342856** |
| **LIABILITIES AND PARENT-ENTITY NET INVESTMENT AND STOCKHOLDERS' EQUITY** |  |  |  |
| **Current Liabilities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $2851457 | $- | 2851457 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 6354485 | (4911074) | 1443411 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 996 |  | 996 |
| &nbsp;&nbsp;&nbsp;Lease liabilities – current | 20124 |  | 20124 |
| &nbsp;&nbsp;&nbsp;Deferred Consideration – current portion | 14359822 |  | 14359822 |
| &nbsp;&nbsp;&nbsp;Due to seller - current portion | 25973017 | (25484183) | 488834 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 11291 | - | 11291 |
| **Total Current Liabilities** | **49571192** | **(30395257)** | **19175935** |
| &nbsp;&nbsp;&nbsp;Warrant liability | 666510 |  | 666510 |
| &nbsp;&nbsp;&nbsp;Deferred Consideration – long term portion | 2747592 |  | 2747592 |
| &nbsp;&nbsp;&nbsp;Forward purchase derivative liability | 7309580 |  | 7309580 |
| &nbsp;&nbsp;&nbsp;Due to seller – long-term portion | 30976783 | (16965617) | 14011166 |
| &nbsp;&nbsp;&nbsp;Lease liabilities – long term | 1008109 |  | 1008109 |
| &nbsp;&nbsp;&nbsp;Deferred underwriter fee payable | 1450500 | (900500) | 550000 |
| &nbsp;&nbsp;&nbsp;Indemnity liability | 499465 | - | 499465 |
| **Total Liabilities** | **94229731** | (48261374) | **45968357** |
| **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 | 2374 | 1120 | 3494 |
| Additional paid in capital | 44806031 | 47561927 | 92367958 |
| Retained earnings | (39695281) | 698327 | (38996954) |
| Parent-Entity Net Investment | - | - | - |
| Total Parent-Entity Net Investment and Stockholders' Equity | 5113125 | 48261374 | 53374499 |
| **Total Liabilities and Parent-Entity Net Investment and Stockholders' Equity** | $**99342856** | $**-** | **99342856** |

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