SHF Holdings, Inc.
For the period ended Mar 31, 2026. Filed May 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 15, 2026
SHFS$0.03-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001493152-25-021644
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001493152-26-023748
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 112 current paragraphs.
22 unchanged; 12 reworded; 78 added; 65 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (78)
Current report
The Company was founded in 2015 by Partner Colorado Credit Union (“PCCU”) and is headquartered in Golden, Colorado. We operate a proprietary compliance technology platform that enables financial institutions to provide banking and lending services to cannabis related businesses (“CRBs”) operating legally under applicable state law.
Current report
Because cannabis remains a federally controlled substance under the Controlled Substances Act (“CSA”), most financial institutions have historically been unwilling to serve CRBs, creating significant demand for the compliance infrastructure and risk management services we provide. We are not a bank or credit union and do not hold customer deposits. Instead, we provide compliance monitoring, onboarding, and reporting services that allow our financial institution clients to accept and maintain CRB deposit accounts in a manner consistent with Bank Secrecy Act (“BSA”) requirements, FinCEN guidance, and applicable anti-money laundering regulations.
Current report
Through our financial institution clients, we facilitate access to business checking and savings accounts, cash management, commercial lending, remote deposit, automated clearing house payments, wire transfers, and courier services through third-party relationships. By enabling CRBs to deposit cash receipts through regulated financial institutions, our platform helps to reduce the safety risks associated with high cash volumes and gives CRBs access to financial tools that help them operate more efficiently. In select markets, we also license our Program to other financial institutions, providing them know your customer due diligence tools, compliance monitoring, program management support, and regulatory exam assistance.
Current report
We generate revenue primarily through account fee income based on the number of active accounts and the size of deposit balances in such accounts, loan program income on CRB loans we source and service on behalf of our financial institution clients, and investment income earned on CRB-related deposits held at those institutions. Since 2015, the Company has assisted in the processing of more than $36.0 billion in cannabis-related depository funds and has supported its financial institution clients through more than 25 state and federal banking examinations.
Current report
Relationship with PCCU
Current report
PCCU is the Company’s primary financial institution client and the source of a significant majority of its revenue. The relationship is governed by the Second Amended CAA, which replaced the First Amended Commercial Alliance Agreement (the “First Amended CAA”) effective October 1, 2025.
Current report
The First Amended CAA introduced several significant changes to the Commercial Alliance Agreement, including (i) the elimination of the Company’s indemnification obligations for loan-related losses, (ii) a reduction in the Company’s loan program income share to approximately 35% to reflect the incremental risk absorbed by PCCU in connection with the elimination of our indemnification obligations, (iii) the replacement of a multiple per-account fee structure with a single asset hosting fee equal to 1.00% of average daily CRB deposit balances that increased to 1.30% in the event balances exceeded $130 million, and (iv) us receiving 100% of investment income on CRB deposits.
Current report
The Second Amended CAA fundamentally restructured the economics of the PCCU relationship. The primary changes were that (i) the Company’s share of loan program income increased from approximately 35% to up to 65%, reflecting the completion the September 2025 Recapitalization; (ii) the Company now receives up to 65% of loan program income generated by PCCU’s CRB loan portfolio in exchange for being obligated to indemnify PCCU for up to 65% of net losses of a default on any loan covered by the Second Amended CAA, with no contractual cap on total exposure; and (iii) the asset hosting fee structure transitioned from a flat rate to a tiered marginal rate schedule based on average daily deposit balances, with rates ranging from 0.50% on the first $25 million to 1.25% on balances above $125 million, resulting in estimated annual savings of approximately $0.3 million compared to the rates contained in the First Amended CAA.
Current report
The concentration of our business with PCCU and the re-assumption of the indemnification obligation each represent material risks to the Company. Any loss of or material adverse change to the PCCU relationship, or any significant loan defaults in the CRB portfolio for which we are required to fund indemnification payments, could have a material adverse impact on our liquidity, financial condition, and results of operations.
Current report
Industry and Regulatory Environment
Current report
Cannabis remains a Schedule I controlled substance under federal law, which creates ongoing legal and compliance risks for us and for the financial institutions we serve. Proposed federal legislation, including the SAFER Banking Act, could expand the availability of banking services to CRBs and increase competition in our market. Conversely, changes in federal or state enforcement priorities could adversely affect our clients and, in turn, our business. We monitor legislative and regulatory developments closely, as they are a primary driver of both the demand for, and the risks associated with our services.
Current report
Federal Regulatory Developments — Rescheduling to Schedule III
Current report
The federal regulatory environment for cannabis continues to evolve in ways the Company believes are material to its industry. In August 2023, the U.S. Department of Health and Human Services recommended that the Drug Enforcement Administration (“DEA”) reschedule cannabis from Schedule I to Schedule III of the CSA, and in May 2024 the U.S. Department of Justice (“DOJ”) issued a Notice of Proposed Rulemaking to that effect, although the rescheduling process was stayed and effectively stalled for much of 2025. On December 18, 2025, President Trump signed an Executive Order directing the Attorney General to expeditiously complete the rulemaking process to reschedule cannabis to Schedule III. On April 23, 2026, the DOJ issued a final order rescheduling Food and Drug Administration-approved cannabis products and products regulated under state medical marijuana licenses to Schedule III, and the DEA is scheduled to hold an expedited administrative hearing beginning on June 29, 2026 and concluding not later than July 15, 2026 to consider broader rescheduling from Schedule I to Schedule III. Legal challenges are anticipated, and the ultimate timing of any final rule remains uncertain. The Company believes the most financially material consequence of rescheduling would be the elimination of Section 280E of the Internal Revenue Code, which currently prohibits cannabis businesses from deducting ordinary and necessary business expenses and results in effective federal tax rates materially higher than those of other industries, and its elimination could improve cash flows and profitability for state-legal cannabis operators.
Current report
“EBITDA” is defined as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization. “Adjusted EBITDA” is further adjusted to exclude non-cash, unusual, and infrequent items that management does not consider reflective of the Company’s core operating performance.
Current report
These measures have material limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our GAAP results. Specifically, although depreciation and amortization are non-cash charges, the underlying assets may require future replacement and neither EBITDA nor Adjusted EBITDA reflects the associated capital expenditure requirements. In addition, neither measure reflects changes in working capital needs or tax payments that may reduce cash available to the Company. Accordingly, these measures should be considered alongside net income (loss) and other GAAP results.
Current report
Discussion of Adjusted EBITDA Results
Current report
For the three months ended March 31, 2026, EBITDA was $(1.6) million, compared to $(0.7) million for the three months ended March 31, 2025. Adjusted EBITDA was $(1.8) million and $(1.2) million for the three months ended March 31, 2026 and March 31, 2025, respectively, reflecting a decrease of $0.6 million. The decrease was driven by higher operating expenses, primarily reflecting increased compensation from strategic hires, alongside higher marketing spend and reduction in options grants to the board of directors vested immediately.
Current report
Management’s focus for the remainder of 2026 is on improving client retention through the Company’s expanded lending capabilities, enhanced client service technology, and continued new account development supported by new marketing initiatives and customer acquisition processes.
Current report
Management monitors the following operational metrics to assess the health and trajectory of the core banking services business.
Current report
Our ability to generate account fee income and investment income is directly tied to the number of active CRB accounts we manage and the total deposit balances maintained at our financial institution clients. We monitor account activity including daily deposits, withdrawals, and ending balances on an ongoing basis. Average account balances represent the average aggregate ending balance of onboarded and monitored CRB deposits held at financial institution clients over the revenue generating period. at period end. Average account balance is total account balances divided by total active accounts at period end. Trailing 14-day average balances represent the aggregate ending balance of onboarded and monitored CRB deposits held at financial institution clients over the 14 calendar days at the period end and represent a period end balance that smooths our clients’ two-week payroll cycles.
Current report
Average active accounts decreased by 2.4% as of March 31, 2026. The accounts lost had lower average balances than the accounts added, resulting in an increase in the average account balance. However, average account fee revenue declined despite growth in total deposit balances, primarily due to the reduction in average fee revenue per account.
Current report
The Company generates revenue through four primary streams. Account fee income consists of fees charged to financial institution clients based on the number of active CRB accounts managed, account-level transaction activity, and deposit balances. These fees compensate the Company for providing BSA compliance monitoring, onboarding, account management, and related regulatory reporting services. Loan program income represents the Company’s contractual share of interest earned on CRB loans originated and serviced by the Company on behalf of its financial institution clients, primarily PCCU. The Company’s share of loan program income is currently determined in accordance with the Second Amended CAA. Investment income represents interest earned on CRB deposit balances held at financial institution clients and is based on the prevailing market rates applied to those balances. In addition, the Company earns fees from licensing its proprietary Program to other financial institutions and from ancillary services provided to businesses serving the cannabis industry.
Current report
Discussion of our Results of Operations Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
Current report
Account fee income
Current report
Account fee income decreased by $0.2 million, or 19.0%, for the three months ended March 31, 2026, compared to the same period in 2025. The decline was primarily due to a merchant service partner renegotiating its revenue-sharing arrangement on less favorable terms, which reduced account fee income by approximately $0.15 million year over year. In addition, client attrition and lower average fees collected from PCCU-hosted clients contributed approximately $0.05 million to the overall decrease.
Current report
Investment income represents interest earned on net investable CRB deposit balances held at partner financial institutions. The rate of return on these balances is directly benchmarked to the Interest on Reserve Balances (“IORB”) rate published by the Federal Reserve Bank of Kansas City. Under the Company’s agreements, investment income is calculated daily on net investable CRB deposit balances and paid monthly in arrears.
Current report
Investment income was $0.2 million for the three months ended March 31, 2026, compared to $0.3 million for the three months ended March 31, 2025, a decrease of $0.05 million, or 17.8%. The net average daily investable deposit base grew to $45.0 million from $34.5 million between those periods, but the benefit of that growth was more than offset by a decline in the IORB rate from 4.40% to 3.65%. .
Current report
Loan program income
Current report
Loan program income was generated primarily from CRB loans originated by PCCU and underwritten and serviced by the Company under the First Amended CAA for the period ended March 31, 2025 and the Second Amended CAA for the period ended March 31, 2026.
Current report
For the three months ended March 31, 2026, the Company serviced twenty-two loans, compared to twenty-three loans for the same period in 2025. Loan program income attributable to PCCU activities totaled $0.8 million for the three months ended March 31, 2026, compared to $0.5 million for the three months ended March 31, 2025. The increase was primarily driven by the Second Amended CAA, which increased the Company’s share of loan program income to 65% from approximately 35% under the First Amended CAA. In addition, the loan portfolio was $51.5 million as of March 31, 2026, compared to $56.8 million as of March 31, 2025, a decrease of $5.3 million. The weighted average interest rate for the three months ended March 31, 2026 was approximately 10.3% and was 10.2% for the three months ended March 31, 2025.
Current report
Total operating expenses
Current report
Total operating expenses decreased by $0.2 million, or 4.7%, to $3.7 million for the three months ended March 31, 2026, compared to $3.9 million for the same period in 2025. The decrease was primarily driven by lower professional services expenses due to reduced stock awards to directors and a release of credit loss provisions resulting from the systematic release of liability and remeasurement reflecting changes in risk ratings. These reductions were partially offset by higher amortization of contract assets in line with scheduled amortization and increased compensation and employee benefits expenses, driven by higher average staff costs and employee bonus accruals.
Current report
Compensation and employee benefits expenses increased by $0.3 million, or 21.0%, to $1.7 million for the three months ended March 31, 2026, compared to $1.3 million for the same period in 2025. The increase was primarily driven by higher bonus accruals and increased employee salaries, including costs associated with the acquisition of LBMW LLC (d/b/a 420 IT Solutions), which contributes approximately $0.5 million annually plus fringe benefits to compensation expense. The rise in expenses also reflects the full-period impact of hiring of additional personnel to support the Company’s strategic initiatives, including expanding lending capabilities, developing managed business solutions, and enhancing beyond-banking services. These increases were partially offset by a decrease in stock-based compensation expense related to a prior stock grant issued to an executive.
Current report
General and administrative expenses increased by $0.07 million, or 7.8%, to $1.1 million for the three months ended March 31, 2026, compared to $1.0 million for the three months ended March 31, 2025. The increase was primarily due to marketing activities and was offset by lower asset hosting fees under the Second Amended CAA.
Current report
Professional services expenses decreased by $0.4 million, or 23.6%, to $1.1 million for the three months ended March 31, 2026, compared to $1.5 million for the same period in 2025. The decrease was primarily driven by a reduction in fully vested stock-based awards issued to the board of directors, as no stock options were issued during the three months ended March 31, 2026. This reduction was partially offset by an increase in one-time cash bonuses awarded to directors and higher legal fees associated with the Abaca litigation.
Current report
Rent expense
Current report
Rent expense decreased by $0.01 million, or 15.7%, to $0.05 million for the three months ended March 31, 2026, from $0.06 million for the three months ended March 31, 2025, primarily due to the closure of the Company’s Arkansas office during 2025.
Current report
Amortization of contract asset
Current report
The Company capitalized costs as a contract asset to secure the Second Amended CAA related to the (i) stand-ready guarantee liability and (ii) financial indemnification liability discussed in Note 6 to the Company’s unaudited condensed consolidated financial statements in this Form 10-Q. Amortization of contract costs was $0.1 million for the three months ended March 31, 2026, compared to $0 for the three months ended March 31, 2025. It represents the straight-line amortization of the cost to acquire a contract asset recognized as of October 1, 2025, the effective date of the Second Amended CAA.
Current report
Credit loss (benefit) expense
Showing the first 40 of 78 passages. Open the source sections for the rest.
Removed paragraphs (65)
Previous report
Founded in 2015 by Partner Colorado Credit Union (“PCCU”) (please see “Business Reorganization” below for a description of SHF’s organization), SHF was among the first financial institutions to provide banking services to Cannabis Related Businesses “CRB.” SHF’s mission is to provide access to reliable and compliant financial services for the legal cannabis, hemp, and related industries by enabling our Financial Institution (“FI”) customers to provide compliance driven banking, lending and other financial services to our CRB clients.
Previous report
Through our proprietary platform operating in 41 states and territories, SHF ensures our Financial Institution customers can compliantly provide the following banking related services to CRBs:
Previous report
Due to limited availability of payment and other banking solutions for the cannabis industry, most CRBs transact with high volumes of cash. Our fintech platform benefits CRBs and financial institutions by providing CRBs with access to financial institutions and financial institutions access to increased deposits with the comfort of knowing that those deposits have been compliantly monitored and validated. By facilitating the daily movement of cash between CRBs and financial institutions, the risks associated with high cash on hand are mitigated, creating a safer atmosphere for the CRB’s employees and the financial institutions at which the deposit accounts are held.
Previous report
The Company is not a financial institution, and as such it does not hold customer deposits. All deposit accounts are held by the Company’s financial institution customers and all transmissions of funds to and from deposit accounts are handled directly by the financial institutions. In an industry with limited capital and financing options, we offer access to loan options at what we believe to be competitive rates, often with more attractive terms than the current industry average. Our financial institution customers and strategic partners offer CRB’s loan options including senior secured and operating lines of debt. Collateral types include real estate, equipment, and other business assets.
Previous report
To ensure CRB’s have access to consistent and dependable banking, we provide our compliance, validation and monitoring services to financial institutions ensuring strict adherence to the Bank Secrecy Act/FinCEN guidance and related anti money laundering provisions. Since inception, the Company has assisted in the processing of approximately $26 billion in cannabis related depository funds. Through its relationship with its financial institution clients, the Company has successfully navigated over 16 state and federal banking exams.
Previous report
The Company has licensed its proprietary software or Safe Harbor Program (the “Program”) to other financial institutions to provide compliance-related services to CRBs. As part of the Program, we provide the following to financial institutions interested in licensing the Program to assist in compliant cannabis banking:
Previous report
Results of Operations
Previous report
The Company generates interest and fee income by providing a variety of services to our financial institution customers to facilitate their banking services to CRBs including, among other things, maintaining compliance with the Bank Secrecy Act (“BSA”) and other regulatory compliance and reporting requirements, marketing and onboarding support, responding to customer service inquiries, and sourcing and originating loans. In addition, the Company provides outsourced support to financial institutions providing banking to the cannabis industry.
Previous report
Compensation and benefits consist of employee wages, stock-based compensation and associated benefits, while professional services consist of legal, board fees including stock-based compensation, general consulting and accounting fees.
Previous report
The Company previously reported provisions for credit losses on indemnified loans. Prior to December 31, 2024, the Company indemnified PCCU against losses on sourced loans. The indemnification obligation ceased on December 31, 2024, when the Amended PCCU CAA took effect.
Previous report
Three and Nine Months September 30, 2025 As Compared To September 30, 2024
Previous report
The following is the revenue for the three and nine months ended September 30, 2025 and September 30, 2024.
Previous report
Account fee income consists of (a) fees earned from banking services such as deposit account fees, activity fees and onboarding income and (b) merchant income earned through referral arrangements with third-party payment processors, under which the Company receives a percentage of the net revenue generated by referred merchants. The Company receives a flat fee and lower rates for ancillary accounts, which are accounts provided to businesses servicing the cannabis industry in general but do not manufacture, possess, distribute or transport cannabis.
Previous report
The decrease in the account fee income was primarily attributable to a decrease in the comparative average monthly ending deposit balance, a revised revenue-sharing arrangement between a large merchant and a participating third-party payment processor, and a promotion geared to retaining and expanding our average monthly deposit balance. Under the updated revenue-sharing arrangement, the merchant’s retainage increased, which in turn reduces both the total revenue available to the payment processor and the Company’s corresponding share of that revenue compared with the prior year.
Previous report
The following is the account fee income by financial institutions for the three and nine months ended September 30, 2025 and September 30, 2024.
Previous report
Certain financial institutions pay us interest on daily account balances as per the rates outlined in the customer agreement. The decrease in investment income was primarily attributable to a reduction in average daily deposit balances, the launch of interest-bearing money market accounts in the first quarter of 2025, and federal rate cuts enacted in the fourth quarter of 2024 and in September 2025.
Previous report
Loan Interest Income
Previous report
Loan interest income is generated from loans issued predominantly under the Company’s Commercial Alliance Agreement (the “PCCU CAA”) with PCCU, as amended.
Previous report
The majority of the Company’s loan portfolio consists of CRB loans originated by PCCU and primarily serviced by SHF. Under the original PCCU CAA in 2024, the Company received 100% of the loan interest income associated with these loans and was obligated to pay PCCU a servicing fee equal to 0.25-0.35% of the outstanding loan balance.
Previous report
Effective December 31, 2024, the method for calculating loan interest income was revised. The new loan yield allocation formula factors in the Constant Maturity U.S. Treasury Rate and a proprietary risk rating to determine the interest income split for each loan.
Previous report
The reduction in loan interest income for the period is mainly attributed to the implementation of the new formula. Under the Amended PCCU CAA, the Company’s interest income on all loans is now calculated using a loan yield allocation formula that considers the Constant Maturity US Treasury Rate from the Federal Reserve’s website, along with a proprietary risk rating formula to determine the fee split between the Company and PCCU. The amendment introduced a new interest income split between the Company and PCCU. The interest income split under the new loan yield allocation formula is approximately 39% to the Company, with the remainder retained by PCCU. The interest income split will vary depending on changes to the loan portfolio.
Previous report
For the three months and nine months ended September 30, 2025, the Company recognized $0.5 million and $1.6 million in loan interest income attributable to PCCU activities. In comparison, for the three months and nine months ended September 30, 2024, the Company recognized $1.3 million and $4.8 million in loan interest income from the same activities.
Previous report
For the three months ended September 30, 2025, compared to September 30, 2024, the Company reduced operating expenses by $0.26 million, or 7.7%. For the nine months ended September 30, 2025, compared to the same period in 2024, operating expenses decreased by $1.0 million, or 9.1%.
Previous report
The Company has been implementing cost-reduction measures since the prior year, including workforce realignments, vendor consolidation, and tighter discretionary spending controls. The benefits of these cost actions were partially offset by expenses incurred to implement certain of these initiatives. In addition, reported operating expenses include higher one-time non-cash stock-based compensation associated with new executive and consultant equity awards granted in 2025, which increased by approximately $1.0 million year over year. Management is using stock-based compensation awards to reduce the cash component of employee compensation and align incentives with the performance of the Company’s Class A Common Stock.
Previous report
Excluding these non-recurring transition costs and non-cash compensation, total operating costs would have shown a more significant year-over-year decline. The Company believes these results demonstrate that its cost-containment initiatives are generating sustainable reductions in ongoing cash expenditures, the full effect of which is expected to become more evident in 2026.
Previous report
During the three months ended September 30, 2025, compensation and employee benefits decreased by $0.1 million or 7.8%, primarily due to a reduction in headcount. The reduction in headcount resulted in a cost savings of approximately $0.4 million offset in part by an increase of non-cash stock-based compensation of approximately $0.3 million.
Previous report
For the nine month period ended September 30, 2025, these expenses declined by $1.7 million, or 27.1%, reflecting $1.0 million in decrease from headcount reductions and $0.9 million decrease in stock compensation expense partially offset by $0.1 million expense to a former employee.
Previous report
For the three months ended September 30, 2025, general and administrative expenses decreased by $0.07 million, or 7.9%, compared to the three months ended September 30, 2024. This decrease was primarily due to a $0.2 million reduction in intangible asset amortization as certain assets became fully amortized.
Previous report
Beginning in 2025, investment hosting fees and loan servicing fees were combined into the account hosting fees following the Amended PCCU CAA. On a combined basis, total hosting-related fees increased by $0.04 million ($0.18 million increases in account hosting fees less $0.10 million of investment hosting fees and $0.04 million of loan servicing fees incurred in the prior period), reflecting the impact of the Amended PCCU CAA offset by the termination of the Company’s customer relationship with Five Star Bank.
Previous report
For the nine months ended September 30, 2025, general and administrative expenses decreased by $0.6 million, or 20.9%, compared to the same period in 2024. This decrease was primarily due to a $0.5 million reductions in intangible asset amortization as certain assets became fully amortized.
Previous report
Beginning in 2025, investment hosting fees and loan servicing fees were combined into account hosting fees following the Amended PCCU CAA. On a combined basis, total hosting-related fees increased by $0.03 million ($0.5 million increase in account hosting fees less $0.4 million of investment hosting fees and $0.1 million of loan servicing fees incurred in the prior period), reflecting the impact of the Amended PCCU CAA offset by the termination of the Company’s customer relationship with Five Star Bank.
Previous report
Account hosting fees
Previous report
The account hosting fees increased for both periods primarily due to the Amended PCCU CAA, which became effective on December 31, 2024. Under the prior CAA, PCCU charged a monthly per-account fee ranging from $26.08 to $28.69 for accounts hosted on its platform. Under the Amended PCCU CAA, the Company now pays PCCU a fixed asset hosting fee calculated as 0.01 multiplied by the average daily balance of account relationships generated by the Company, divided by the number of days in the year, and multiplied by the number of days in the applicable month. This new structure incorporated the investment hosting fee and loan hosting fee that existed under the prior agreement and has resulted in higher total account hosting costs compared to the prior fee schedule.
Previous report
Beginning in 2025, investment hosting fees and loan servicing fees are reported within account hosting fees following the Amended PCCU CAA. The following is the account hosting fee by financial institutions for the three and nine months ended September 30, 2025 and September 30, 2024:
Previous report
For the three months ended September 30, 2025, professional services expense decreased by $0.03 million or 4.6% compared to the same period in 2024, primarily reflecting lower negotiated rates with several service providers and reduced audit and accounting fees following completion of the Company’s auditor transition earlier in the year.
Previous report
For the nine months ended September 30, 2025, professional services expense increased by $1.2 million or 85.9% compared to September 30, 2024. The increase was driven primarily by transition-related legal and advisory costs incurred as the Company outsourced its internal legal and compliance functions to external counsel, as well as other non-recurring professional fees primarily related to shareholder litigation. Key components of the increase include:
Previous report
These increases were partially offset by the elimination of prior-year external counsel retainers, lower recurring audit and accounting fees after the auditor transition, and rate reductions achieved through vendor consolidation. The Company expects that, following completion of the legal and auditor transitions, annualized professional service costs will decline compared with maintaining both internal and multiple external service providers.
Previous report
Provision (benefit) for credit losses
Previous report
For both the three- and nine-month periods ended September 30, 2025, there was no credit loss (benefit) expense, compared to an expense of $0.0 million and a benefit of $0.2 million, respectively, in the comparable 2024 periods. Effective with the Amended PCCU Commercial Alliance Agreement, the Company is no longer indemnifying loans issued by PCCU, thereby eliminating the prior credit-loss exposure.
Previous report
For the three and nine months ended September 30, 2025, other income (expenses) primarily reflects the impact of financing-related transactions and fair-value adjustments associated with the Company’s capital restructuring completed in connection with the Series B Convertible Preferred Stock and Series B Warrant issuance.
Showing the first 40 of 65 passages. Open the source sections for the rest.
Reworded paragraphs (12)
Previous wording
References in this section to “we,” “us,” “our,” “SHF” or the “Company” refer to SHF Holdings, Inc. References to “management” refer to our officers and board of managers. The following discussion and analysis of our financial performance and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those financial statements included elsewhere in this Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.
Current wording
References in this section to “we,” “us,” “our,” “SHF,” or the “Company” refer to SHF Holdings, Inc. References to “management” refer to our officers and Board of Directors. The following discussion and analysis of our financial performance and results of operations should be read in conjunction with our consolidated financial statements and the notes to those financial statements included elsewhere in this Form 10-Q. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.
Previous wording
In addition to the measures presented in our unaudited condensed consolidated financial statements, our management regularly monitors certain measures in the operation of our business. These key metrics are discussed below.
Current wording
In addition to the measures presented in our consolidated financial statements, management regularly monitors certain operational and non-GAAP financial measures to evaluate business performance. These metrics are described below.
Previous wording
In addition to financial measures presented in accordance with accounting principles generally accepted in the United States of America (GAAP), this document contains non-GAAP financial measures where management believes it to be helpful in understanding our results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein.
Current wording
In addition to financial measures prepared in accordance with GAAP, this Form 10-Q contains non-GAAP financial measures that management believes are useful in understanding our results of operations and financial position. For each non-GAAP measure presented, we have provided a reconciliation to the most directly comparable GAAP financial measure.
Previous wording
We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
Current wording
We present EBITDA and Adjusted EBITDA because management uses these measures to evaluate operating performance, develop forward-looking operating plans, and make strategic decisions regarding resource allocation. We believe these measures provide useful supplemental information to investors evaluating our results in the same manner as management.
Previous wording
A reconciliation of net profit to non-GAAP EBITDA and Adjusted EBITDA is as follows:
Current wording
A reconciliation of net loss to EBITDA and Adjusted EBITDA is as follows:
Previous wording
Account Fees Per Average Active Accounts Managed
Current wording
Account Fees per Average Active Account
Previous wording
Currently a significant amount of our fees is generated from active accounts and account activity. As a result, we monitor account openings and closings on a daily, weekly and monthly basis. We strive to meet the appropriate balance between depository balances and fees and therefore review account fees per average number of active accounts managed.
Current wording
Our fee income is generated from active accounts and account-level transaction activity. We track account openings and closings on a daily, weekly, and monthly basis and monitor account fees per average active account as an indicator of pricing efficiency and revenue quality.
Previous wording
EBITDA and Adjusted EBITDA have limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
Current wording
Components of our Results of Operations
Previous wording
Operating expenses consist of compensation and benefits, professional services, rent expense, account hosting fees, advertising and marketing, and other general and administrative expenses.
Current wording
Operating expenses consist of compensation and employee benefits, professional services, general and administrative expenses, rent expense, and provision (benefit) for credit losses.
Previous wording
For the nine months ended September 30, 2025, and September 30, 2024, the Company generated cash from investing activities was $0.4 million and $0.008 million from the proceeds of loan, respectively.
Current wording
For the three months ended March 31, 2026 and March 31, 2025, the cash flow from investing activities was nil.
Previous wording
As of September 30, 2025, there were no significant changes in the application or the nature of accounting estimates that are considered critical in nature from those presented in our Annual Report on Form 10-K and Form 10-K/A.
Current wording
As of March 31, 2026, there were no significant changes in the application or the nature of accounting estimates that are considered critical in nature from those presented in our Annual Report on Form 10-K.
Previous wording
In connection with our management assessment of internal control over financial reporting as of and for the nine months ended September 30, 2025, the Company has identified material weaknesses within our internal controls over financial reporting. Refer to Item 4A of this document for additional details.
Current wording
In connection with our management assessment of internal control over financial reporting as of and for the three months ended March 31, 2026, the Company has identified material weaknesses within our internal controls over financial reporting. Refer to Item 4A of this document for additional details.