SHF (SHFS) Registration filing summary

Company overview and business model

• Provides compliance, banking, and lending services to cannabis-related businesses (CRBs) via a proprietary fintech platform operating in 41 states and territories.

• Revenue streams include compliance service fees, account-based fee income, investment income on custodied deposits, and loan program income from financial institutions serving the cannabis industry.

• Not a bank; does not hold customer deposits or loans on its balance sheet; partners with financial institutions, primarily PCCU, to deliver services.

• Recent initiatives include the acquisition of 420 IT Solutions, expansion of managed services, and launch of a pooled employer 401(k) plan for cannabis businesses.

• Mission centers on enabling compliant financial access for CRBs and supporting financial institutions entering the cannabis sector.

Financial performance and metrics

• 2025 revenue was $7.7 million, down 49.7% from $15.2 million in 2024, driven by a 63% reduction in loan program income and a 39% decline in account fee income.

• Net loss for 2025 was $2.2 million, compared to a $48.3 million net loss in 2024 (the prior year included a large deferred tax asset valuation adjustment).

• Adjusted EBITDA for 2025 was $(3.9) million, down from $2.9 million in 2024, reflecting structural changes in revenue arrangements and market conditions.

• Cash and cash equivalents at year-end 2025 were $6.8 million, with net working capital of $5.7 million.

• Substantial doubt exists about the ability to continue as a going concern due to recurring operating losses and negative cash flows.

Use of proceeds and capital allocation

• No proceeds from the resale of shares by selling stockholders; proceeds from any cash exercise of Series B Warrants (up to $15.3 million if fully exercised) will be used for working capital and general corporate purposes.

• September 2025 Recapitalization eliminated $18 million in debt, raised $6.7 million in new capital, and established a $150 million equity line of credit (ELOC) that can be expanded to $500 million.