SHF Holdings Reports 52% Revenue Decline and Increased Losses in Q1 2025

SHF Holdings, Inc. reported a significant decline in financial performance for the first quarter of 2025, with revenues totaling $1.93 million, a decrease of approximately 52% from $4.05 million in the same period of 2024. The company experienced an operating loss of $1.48 million, compared to an operating income of $324,941 in the prior year. The net loss for the quarter was $313,627, a stark contrast to the net income of $2.05 million reported in the first quarter of 2024. This downturn is attributed to reduced depository activity, loan interest income, and fee income, alongside ongoing legal expenses.

In terms of operational metrics, SHF Holdings saw a notable reduction in total operating expenses, which decreased by $315,583 year-over-year, primarily due to a significant cut in compensation and employee benefits. However, this reduction was insufficient to offset the declines in revenue. The company’s cash and cash equivalents also fell sharply to $931,397 from $2.32 million at the end of 2024, indicating liquidity challenges. The working capital deficit increased to $6.72 million, compared to $983,833 at the end of the previous fiscal year.

Strategically, SHF Holdings has made several adjustments to its operations, including the renegotiation of its senior secured loan with PCCU, which has been restructured to allow for interest-only payments until January 2027. The company has also eliminated its indemnification obligations under the Commercial Alliance Agreement with PCCU, which may help reduce future liabilities. Additionally, SHF is exploring various financing options and strategic partnerships to enhance its revenue base and address liquidity needs.

The company’s stockholders’ deficit widened to $16.95 million as of March 31, 2025, compared to $12.29 million at the end of 2024. This deterioration in equity is compounded by the notification from Nasdaq regarding non-compliance with listing requirements due to the stockholders’ equity deficit. SHF Holdings has until May 22, 2025, to submit a plan to regain compliance, and management is actively working on strategies to address these challenges.

Looking ahead, SHF Holdings faces significant uncertainty regarding its ability to continue as a going concern. The company’s management has indicated that the current cash reserves are projected to support operations only through September 2025. The ongoing efforts to secure additional financing and improve operational efficiency are critical for the company’s future viability. However, the success of these initiatives remains uncertain, and the company may need to consider curtailing operations or pursuing other strategic alternatives if liquidity issues persist.