SHF Holdings, Inc. reported a significant decline in its financial performance for the fiscal year ending December 31, 2024, with a net loss of $48.3 million compared to a loss of $17.3 million in the previous year. Total revenue decreased to $12.6 million from $13.8 million in 2023, primarily due to a reduction in account fee income and a decrease in the number of active accounts. The company attributed these changes to the termination of its agreement with the Central Bank of Arkansas, which had been a significant contributor to its revenue.
In terms of operational metrics, SHF's average monthly deposit activity fell to $280 million in 2024, down from previous levels, reflecting a decrease in customer accounts. The company reported a total of 600 active accounts, a reduction from prior periods, which directly impacted its fee income. Additionally, the company’s cash and cash equivalents decreased to $2.3 million from $4.9 million in 2023, indicating liquidity challenges. The company also faced a working capital deficit of $983,833 at the end of 2024, raising concerns about its ability to continue as a going concern.
Strategically, SHF made significant changes to its Commercial Alliance Agreement (CAA) with Partner Colorado Credit Union (PCCU) on December 31, 2024. The amended agreement eliminated the company's indemnification obligations for loan-related losses and replaced various fees with a fixed asset hosting fee structure. This change is expected to streamline operations and improve revenue predictability. Furthermore, the company is focusing on expanding its commercial lending program, which it views as a key driver for future growth.
The company’s employee headcount stood at 41 full-time employees as of December 31, 2024, a reduction from previous years, reflecting ongoing efforts to optimize operational efficiency. SHF has also been actively working to enhance its compliance and risk management frameworks, particularly in light of the complex regulatory environment surrounding the cannabis industry. The company has successfully navigated over 16 state and federal banking exams, reinforcing its reputation as a compliant service provider in the cannabis financial services sector.
Looking ahead, SHF Holdings aims to stabilize its financial position by focusing on improving its lending capabilities and expanding its customer base. The company is also exploring opportunities to enhance its fintech platform and develop new service offerings. However, management has acknowledged that substantial doubt remains regarding its ability to continue as a going concern, contingent on its capacity to generate sufficient liquidity to meet financial obligations. The company plans to submit a compliance plan to Nasdaq to address its listing requirements, as it continues to navigate the challenges posed by the evolving cannabis market.
About SHF Holdings, Inc.
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