SHF Holdings, Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2025, with total revenue of $7.7 million, down approximately 49.7% from $15.2 million in 2024. This decrease was primarily driven by a 63% reduction in loan program income, attributed to changes in the revenue-sharing structure under the First Amended Commercial Alliance Agreement (CAA) with Partner Colorado Credit Union (PCCU). Investment income also fell by 45%, reflecting lower average deposit balances and declining interest rates, while account fee income decreased by 39% due to account attrition and reduced transaction activity.
The company underwent strategic changes during the year, including the execution of the Second Amended CAA, which increased SHF's share of loan program income from approximately 35% to up to 65%. This agreement, effective retroactively from October 1, 2025, reinstated indemnification obligations for loan defaults, which could expose the company to significant financial risk. Additionally, SHF acquired 420 IT Solutions, enhancing its compliance capabilities and expanding its service offerings to financial institutions serving cannabis-related businesses.
Operationally, SHF's average active accounts increased by 2.1% to 773, while average account balances decreased by 12.6% to $136,094. The company reported a net loss of $2.2 million for 2025, a substantial improvement from a net loss of $48.3 million in 2024, which was heavily influenced by a non-recurring deferred tax asset valuation adjustment. Despite this improvement, the company continues to face challenges, including recurring operating losses and negative cash flows, raising substantial doubt about its ability to continue as a going concern.
Looking ahead, SHF aims to stabilize and grow its core deposit and compliance platform, deepen lending revenue through the Second Amended CAA, and expand its financial institution partnerships. The company is also focused on improving client retention and exploring strategic partnerships to enhance its market position. However, the ongoing legal and regulatory complexities surrounding the cannabis industry, along with the potential for federal rescheduling of cannabis, could significantly impact SHF's operations and financial outlook.
About SHF Holdings, Inc.
SHF Holdings provides compliance, loan origination, and banking services tailored to the cannabis industry. Its core offerings include regulatory consulting, a fintech platform for banking cannabis-related businesses, deposit management, and specialized lending. Serving financial institutions and cannabis businesses across the U.S., the company emphasizes compliance, innovative technology, and building long-term relationships to facilitate legal access to financial services in a high-risk, evolving regulatory environment.
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