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As filed with the Securities and Exchange Commission on September 25, 2025

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SHF Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware		6199		86-2409612
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

1526 Cole Blvd., Suite 250

Golden, Colorado 80401

Telephone: (303) 431-3435

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Terrance E. Mendez

Chief Executive Officer

1526 Cole Blvd., Suite 250

Golden, Colorado 80401

Telephone: (303) 431-3435

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Michael D. Schwamm, Esq.

Justin A. Santarosa, Esq.

Duane Morris LLP

865 South Figueroa Street, Suite 3100

Los Angeles, California 90017

Tel. No. (213) 689-7466

Approximate date of commencement of proposed sale of the securities to the public: From time to time after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated September 25, 2025

PRELIMINARY PROSPECTUS

SHF HOLDINGS, INC.

46,153,846 Shares of Class A Common Stock

This prospectus relates to the potential offer and sale from time to time by CREO Investments LLC (“CREO” or the “Selling Stockholder”) of 46,153,846 shares of Class A common stock, par value $0.0001 (the “Common Stock”), of SHF Holdings, Inc. (“SHF,” the “Company,” “we,” “us,” or “our”) that we elect, in our sole discretion, to issue and sell to CREO from time to time from and after the Commencement Date (as defined below) pursuant to a Common Stock Purchase Agreement, dated as of September 17, 2025, by and between us and CREO (the “Purchase Agreement”), as consideration for it establishing an equity line of credit (the “CREO Equity Financing”).

The actual number of shares of our Common Stock issuable will vary depending on the then-current market price of shares of our Common Stock sold to CREO under the Purchase Agreement, but will not exceed the number set forth above unless we file an additional registration statement under the Securities Act of 1933, as amended (the “Securities Act”), with the Securities and Exchange Commission (the “SEC”). See “CREO Equity Financing” for a description of the Purchase Agreement and “Selling Stockholder” for additional information regarding CREO.

We are registering the shares on behalf of the Selling Stockholder, to be offered and sold by it from time to time. We are not selling any securities under this prospectus, and will not receive any proceeds from the sale of Common Stock by the Selling Stockholder pursuant to this prospectus. We may receive up to $150.0 million in aggregate gross proceeds from CREO under the Purchase Agreement in connection with sales of the shares of our Common Stock pursuant to the Purchase Agreement at varying purchase prices after the date of this prospectus. In addition, we and CREO may agree to increase CREO’s total purchase commitment under the Purchase Agreement, which could result in us receiving up to $500.0 million in aggregate gross proceeds from CREO under the Purchase Agreement in connection with sales of the shares of our Common Stock pursuant to the Purchase Agreement at varying purchase prices after the date of this prospectus. In the event of such an increase, we would issue additional CREO Commitment Shares (as defined below) to CREO. However, the actual proceeds from CREO may be less than this amount depending on the number of shares of our Common Stock sold and the price at which the shares of our Common Stock are sold. The purchase price per share that CREO will pay for shares of Common Stock purchased from us under the Purchase Agreement will fluctuate based on the market price of our shares at the time we elect to sell shares to CREO and, further, to the extent that the Company sells shares of Common Stock under the Purchase Agreement, substantial amounts of shares could be issued and resold, which would cause dilution and may impact the Company’s stock price. As consideration for CREO’s commitment to purchase shares of Common Stock pursuant to the Purchase Agreement, we agreed to issue to CREO $1.0 million in stated value of a series of a to be designated series of preferred stock with such terms as mutually agreeable between us and CREO, with each such share having a stated value of $1,000 (the “CREO Commitment Shares”), following the creation of such CREO Commitment Shares.

Our Common Stock is listed on The Nasdaq Stock Market (the “Nasdaq”) under the symbol “SHFS.” The last reported sale price of our Common Stock on the Nasdaq on September 24, 2025 was $7.27 per share. We recommend that you obtain current market quotations for our Common Stock prior to making an investment decision.

The Selling Stockholder may offer all or part of the shares for resale from time to time through public or private transactions, at either prevailing market prices or at privately negotiated prices. Our registration of the shares of Common Stock covered by this prospectus does not mean that the Selling Stockholder will offer or sell any of the shares. With regard only to the shares the Selling Stockholder sells for its own behalf, the Selling Stockholder may be deemed an “underwriter” within the meaning of the Securities Act. The Company has paid all of the registration expenses incurred in connection with the registration of the shares. We will not pay any of the selling commissions, brokerage fees and related expenses.

We will pay the expenses incurred in registering the shares, including legal and accounting fees. See “Plan of Distribution” on page 85 of this prospectus.

We are an “emerging growth company” under applicable federal securities laws and are subject to reduced public company reporting requirements.

Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 11 of this prospectus and contained in any applicable prospectus supplement and in any free writing prospectuses we have authorized for use in connection with a specific offering, and under similar headings in the other documents that are incorporated by reference into this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is , 2025.

TABLE OF CONTENTS

	Page
ABOUT THIS PROSPECTUS	1

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	2

SUMMARY OF RISK FACTORS	5

PROSPECTUS SUMMARY	7

THE OFFERING	10

RISK FACTORS	11

CREO EQUITY FINANCING	26

USE OF PROCEEDS	30

DETERMINATION OF OFFERING PRICE	31

MARKET INFORMATION FOR COMMON STOCK AND DIVIDEND POLICY	31

BUSINESS	32

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023	43

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024	59

MANAGEMENT	68

EXECUTIVE AND DIRECTOR COMPENSATION	74

PRINCIPAL STOCKHOLDERS	78

DILUTIVE EFFECT ON OUR STOCKHOLDERS	79

SELLING STOCKHOLDERS	80

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	81

DESCRIPTION OF CAPITAL STOCK	83

PLAN OF DISTRIBUTION	85

LEGAL MATTERS	87

EXPERTS	87

WHERE YOU CAN FIND MORE INFORMATION	87

INDEX TO FINANCIAL STATEMENTS	F-1

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form S-1 that we filed with the SEC whereby the Selling Stockholder named herein may, from time to time, sell the securities offered by them as described in this prospectus. We will not receive any proceeds from the sale by the Selling Stockholder of the securities offered pursuant to this prospectus.

Neither we nor the Selling Stockholder have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the Selling Stockholder take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Neither we nor the Selling Stockholder will make an offer to sell these securities in any jurisdiction where such offer or sale is not permitted. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus, any applicable prospectus supplement or any related free writing prospectus. You should assume that the information appearing in this prospectus or any prospectus supplement is accurate as of the date on the front of those documents only, regardless of the time of delivery of this prospectus or any applicable prospectus supplement, or any sale of a security. Our business, financial condition, results of operations and prospects may have changed since those dates.

The Selling Stockholder and its permitted transferees may use this registration statement to sell securities from time to time through any means described in the section titled “Plan of Distribution.” More specific terms of any securities that the Selling Stockholder and its permitted transferees offer and sell may be provided in a prospectus supplement that describes, among other things, the specific amounts and prices of the securities being offered and the terms of the offering.

We may also provide a prospectus supplement or post-effective amendment to the registration statement to add information to, or update or change information contained in, this prospectus. Any statement contained in this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in such prospectus supplement or post-effective amendment modifies or supersedes such statement. Any statement so modified will be deemed to constitute a part of this prospectus only as so modified, and any statement so superseded will be deemed not to constitute a part of this prospectus. You should read both this prospectus and any applicable prospectus supplement or post-effective amendment to the registration statement together with the additional information to which we refer you in the sections of this prospectus titled “Where You Can Find More Information.”

This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the section entitled “Where You Can Find More Information.”

Except as otherwise indicated herein or as the context otherwise requires, references in this prospectus to “SHF,” “the Company,” “we,” “us,” “our” and similar references refer to SHF Holdings, Inc., a Delaware corporation, and where appropriate, its wholly-owned subsidiaries, SHF, LLC and SHFxAbaca, LLC.

This prospectus and the information incorporated herein by reference may include trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included or incorporated by reference into this prospectus, any applicable prospectus supplement or any related free writing prospectus are the property of their respective owners.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Various of the statements made in this prospectus, including information incorporated herein by reference to other documents, are “forward-looking statements” within the meaning of, and subject to the protections of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance and condition, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, achievements, or financial condition of the Company to be materially different from future results, performance, achievements, or financial condition expressed or implied by such forward-looking statements. You should not expect us to update any forward-looking statements. These forward-looking statements should be read together with the discussion of the Company’s risks and uncertainties included under the caption “Risk Factors” beginning on page 11 of this prospectus.

All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “will,” “anticipate,” “assume,” “seek,” “should,” “indicate,” “would,” “believe,” “contemplate,” “consider,” “expect,” “estimate,” “continue,” “plan,” “point to,” “project,” “could,” “intend,” “target” and other similar words and expressions of the future. These forward-looking statements may not be realized due to a variety of factors, including, without limitation:

	●	Our profitability is subject to interest rate risk;

	●	Volatility and uncertainty in the financial markets and banking industry may adversely impact our clients and our ability to obtain additional financial institution customers;

	●	Liquidity risks could affect our operations and jeopardize our financial condition and certain funding sources could increase our interest rate expense including our ability to operate as a going concern and also remaining in compliance with debt covenants;

	●	The industry in which our clients operate is considered federally illegal, which may pose risk if actions were taken against those clients or our Company;

	●	Our strategic plan and growth strategy may not be achieved as quickly or as fully as we seek;

	●	Our success depends on our ability to compete effectively in highly competitive markets;

	●	Potential gaps in our risk management policies may leave us exposed to unidentified or unanticipated risk, which could negatively affect our business;

	●	Our ability to resolve our material weaknesses in internal controls over financial reporting;

	●	We have identified and we may identify additional deficiencies in our internal controls, which may have an impact on our business operations;

	●	Technological changes affect our business including potentially impacting the revenue stream of traditional products and services, and we may have fewer resources than many competitors to invest in technological improvements;

	●	Our information systems may experience interruptions and security breaches, and are exposed to cybersecurity threats;

	●	Many of our major systems depend on and are operated by third-party vendors, and any systems failures or interruptions could adversely affect our operations and the services we provide to our clients;

	●	Any failure to protect the confidentiality of customer information could adversely affect our reputation and subject us to financial sanctions and other costs that could have a material adverse effect on our business, financial condition and results of operations;

	●	Future acquisitions and expansion activities may disrupt our business, dilute shareholder value and adversely affect our operating results;

	●	We may not be able to generate sufficient cash to service all of our operation needs, including our debt obligations;

	●	We may incur a substantial level of debt that could materially adversely affect our ability to generate sufficient cash to fulfill our obligations;

	●	Our business may be adversely affected by economic conditions in general and by conditions in the financial markets;

	●	We are subject to extensive regulation that could limit or restrict our activities and adversely affect our earnings;

	●	Litigation and regulatory investigations are increasingly common in our businesses and may result in significant financial losses and/or harm to our reputation;

	●	Liquidity risks arising from the uncertainty surrounding cash flows, including the potential impact on our ability to continue operations as a going concern;

	●	We are subject to capital adequacy and liquidity standards, and if we fail to meet these standards, whether due to losses, growth opportunities or an inability to raise additional capital or otherwise, our financial condition and results of operations would be adversely affected;

	●	Certain of our existing shareholders could exert significant control over the Company;

	●	If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the price of our Common Stock and its trading volume could decline;

	●	We have the ability to issue additional equity securities, which would lead to dilution of our issued and outstanding Common Stock;

	●	We are an “emerging growth company,” and, as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our Common Stock may be less attractive to investors;

	●	We may be unable to attract and retain key people to support our business;

	●	In certain circumstances, we assume the risk of fraud loss and negative balances for accounts maintained at our financial institution partners;

	●	Severe weather, natural disasters, global pandemics, acts of war or terrorism, theft, civil unrest, government expropriation or other external events could have significant effects on our business;

	●	Our ability to continue as a going concern;

	●	The Company’s ability to comply with Nasdaq’s listing requirements and maintain its listing on Nasdaq is uncertain and subject to various risks and factors that may cause actual results to differ materially; and
		Other factors and information in other filings that we make with the SEC under the Exchange Act and Securities Act.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this prospectus. Because of these risks and other uncertainties, our actual future financial condition, results, performance or achievements, or industry results, may be materially different from the results indicated by the forward-looking statements in this prospectus. In addition, our past results of operations are not necessarily indicative of our future results of operations. You should not rely on any forward-looking statements as predictions of future events.

All written or oral forward-looking statements that are made by us or are attributable to us are expressly qualified in their entirety by this cautionary note. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update, revise or correct any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

This prospectus and any related prospectus supplement also contain or may contain estimates, projections and other information concerning our industry, our business and the markets for our products, including data regarding the estimated size of those markets and their projected growth rates. We obtained the industry and market data in this prospectus from our own research as well as from industry and general publications, surveys and studies conducted by third parties. This data involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty, including those discussed in “Risk Factors.” We caution you not to give undue weight to such projections, assumptions and estimates. Further, industry and general publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that these publications, studies and surveys are reliable, we have not independently verified the data contained in them. In addition, while we believe that the results and estimates from our internal research are reliable, such results and estimates have not been verified by any independent source.

SUMMARY OF RISK FACTORS

Our business is subject to a number of risks, which are discussed more fully under “Risk Factors” beginning on page 11 of this prospectus, that could cause actual results to differ materially from those indicated by forward-looking statements made in this prospectus or presented elsewhere from time to time. Capitalized terms used but not otherwise defined in the following summary have the meanings ascribed to them elsewhere in this prospectus. These risks include, but are not limited to, the following:

Risks Related to the Company’s Business

	●	There is substantial doubt as to our ability to continue as a going concern.
	●	Substantially all of the Company’s CRB clients’ deposits are currently held at Partner Colorado Credit Union, which means that our growth will be restricted until we can enter into agreements with additional financial institutions or directly with CRB clients.
	●	The Company’s loan program is currently substantially dependent on the regulatory restrictions placed on PCCU, currently the largest funding source of loans facilitated by the Company, which may limit the types, terms and amounts of loans that we may offer.
	●	The Company may face competition from traditional financial institutions and other lenders and service providers for its lending and other services, which may adversely affect the Company’s ability to achieve its business goals and its results of operations.
	●	The soundness of our financial institution customers could adversely affect us.
	●	Volatility in interest rates may adversely affect our revenues, profitability, and competitive position.
	●	Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations.
	●	The Company is dependent third parties for certain services, and if we cannot manage our relationships with such third parties, our business, results of operations, financial condition, and cash flows could be adversely affected.
	●	An information systems interruption or breach in security of the Company’s systems could adversely affect us.
	●	The Company may suffer uninsured losses or suffer material losses in excess of insurance limits.
	●	An adverse outcome in litigation to which the Company is or becomes a party could materially and adversely affect us.
	●	We have identified material weaknesses in our internal control over financial reporting. If the remediation of such material weaknesses are not effective, or if we identify additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.

Risks Related to the Cannabis Industry

	●	The Company provides services to financial institutions that provide banking services to businesses in or ancillary to the state-licensed cannabis industry and the hemp industry, which could expose us to additional liabilities and regulatory compliance cost and adversely impact our business, operations, financial condition, brand and reputation.
	●	The Company, its financial institution customers and their CRB clients are subject to a variety of laws regarding financial transactions related to cannabis, which could subject their CRB clients to legal claims or otherwise adversely affect our business.
	●	We may have difficulty using bankruptcy courts due to our involvement in the regulated cannabis industry.
	●	The conduct of third parties may jeopardize our business and regulatory compliance.
	●	We may be subject to constraints on marketing our services, which could adversely impact our results of operations and our growth opportunities.
	●	Service providers to cannabis businesses may be subject to unfavorable U.S. tax treatment.
	●	Cannabis businesses may be subject to civil asset forfeiture.

	●	Because we provide services to companies that provide services to CRBs, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.
	●	There may be difficulty enforcing certain of our commercial agreements and contracts.
	●	Directors, officers, employees and investors who are not U.S. citizens may face constraints on cross-border travel into the United States because of their involvement in the cannabis industry.

Risks Related to the Company’s Organization and Structure

	●	The Company depends on key management personnel and other experienced employees.
	●	Failure by the Company’s directors, officers or employees to comply with applicable policies, regulations and rules could materially and adversely affect us.
	●	Changes in accounting rules, assumptions or judgments could materially and adversely affect the Company.
	●	If the Company fails to implement and maintain an effective system of internal controls, it may not be able to accurately determine its financial results or prevent fraud. As a result, investors could lose confidence in the Company’s financial results, which could materially and adversely affect the Company.

Risks Related to an Investment in Our Securities

	●	There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.
	●	The market for our securities has been volatile and may continue to be volatile, which would adversely affect the liquidity and price of our securities.
	●	The Company may issue additional shares of common or preferred stock under the Equity Incentive Plan or otherwise, any one of which would dilute the interest of the Company’s stockholders and likely present other risks.
	●	Our operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price.
	●	If securities or industry analysts do not publish or cease publishing research or reports about the Company, its business, or its market, or if they change their recommendations regarding our Common Stock adversely, then the price and trading volume of the Common Stock could decline.
	●	We may be unable to obtain additional financing to fund our operations and growth.
	●	Anti-takeover provisions contained in our Second Amended and Restated Certificate of Incorporation and Bylaws, as well as provisions of Delaware law, could impair a takeover attempt, which could limit the price investors might be willing to pay in the future for our Common Stock.
	●	Our Second Amended and Restated Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholder’s ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
	●	The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

Risks Related to this Offering

	●	It is not possible to predict the actual number of shares of our Common Stock, if any, we will sell under the Purchase Agreement, or the actual gross proceeds resulting from those sales or the dilution to you from those sales. Further, we may not have access to the full amount available under the Purchase Agreement.
	●	CREO will pay less than the then-prevailing market price for our Common Stock, which could cause the price of our Common Stock to decline.
	●	Investors who buy shares of Common Stock from CREO at different times will likely pay different prices.
	●	Future resales and/or issuances of shares of Common Stock, including pursuant to this prospectus, or the perception that such sales may occur, may cause the market price of our shares to drop significantly.
	●	We may use proceeds from sales of our Common Stock made pursuant to the Purchase Agreement in ways with which you may not agree or in ways which may not yield a significant return.

PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus or incorporated by reference herein and does not contain all the information that may be important to purchasers of our securities. Prospective purchasers of our securities should carefully read the entire prospectus, the applicable prospectus supplement and any related free writing prospectus, including the risks of investing in our securities discussed under the heading “Risk Factors” contained in this prospectus, the applicable prospectus supplement and any related free writing prospectus, and under similar headings in the other documents that are incorporated by reference into this prospectus. Prospective purchasers of our securities should also carefully read our financial statements, the information incorporated by reference into this prospectus and the exhibits to the registration statement of which this prospectus is a part.

The Company

The Company was founded in 2015 as a solution to a major problem that plagued the nascent legalized cannabis industry in Colorado - access to reliable and compliant financial services. Cannabis-related funds were already finding their way into the financial system, including via hidden, misrepresented accounts and unlawful banking practices. Based upon our research, we determined that the appropriate step was to protect the financial system from criminal activity and provide legitimacy to the legal state cannabis-related businesses (“CRBs”). From decades of regulatory and banking experience, we created a detailed compliance program to assist financial institutions desiring to provide safe and sound financial services that would accomplish industry accountability and protect the financial system. The compliance program provides onboarding, validation and monitoring services to financial institutions desiring to provide traditional banking services to all types of marijuana, hemp, and CBD businesses, and to ancillary businesses that provide services to the cannabis industry. These ancillary businesses include payroll companies, payment processors, and professionals providing services to and receiving payment from CRBs. As the lawful cannabis industry grew beyond Colorado, the Company evolved its business practices to build a national footprint and currently provides services to financial institutions that provide banking services in 41 states and territories of the United States of America (the “United States” or “U.S.”) where cannabis is either legal medicinally or for full adult use.

We intend to support our mission by providing unparalleled client and customer service while offering a unique array of innovative technology-based products and services. We believe that our unique banking relationships, reputation of reliability in the cannabis industry, as well as our deep expertise and experience in the industry will position us to serve a broad range of cannabis industry participants, including cannabis and hemp cultivators, processors, manufacturers, dispensaries, multi-state operators, as well as the financial institutions that wish to bank cannabis and hemp industry participants. Since 2015, we have facilitated more than $25.6 billion in deposit activity across a footprint of 41 states and territories of the United States. Through its relationship with its financial institution customers, the Company has successfully navigated over 16 state and federal banking exams.

Through a combination of organic growth, increased commercial lending, and further development of our financial technology company (“fintech”) platform, we believe we are all well-positioned to service the cannabis industry, including through the industry’s recent large-scale consolidations.

Background and Recent Developments

Background

The Company has developed and commercialized a fully compliant financial services platform for financial institutions providing banking services to CRBs to access and maintain reliable financial services as long as both the financial institution customer and the CRB meet regulatory requirements. Our platform enables the Company’s staff to efficiently guide financial institution customers and the CRBs desiring banking services through the onboarding, validation and monitoring process. Our automated platform provides for an efficient and effective management tool allowing our employees to provide continuity of service while enabling compliance staff to monitor Bank Secrecy Act (“BSA”) activities.

Through the Company’s platform, our financial institution customers have the ability to provide CRBs with access to traditional financial services including wires, debit, Automated Clearing House (“ACH”), remote deposit capture, business checking and savings accounts, courier and vaulting services, cash management accounts and commercial lending. We believe our services have been implemented consistent with applicable law and regulations, ensuring our financial institution customers will be able to provide CRBs with reliable access to these services. We feel our history of developing processes that satisfy regulatory standards has resulted in a solid reputation with related authorities and solidifies our ability to continue to grow existing services and reduces barriers to expanding into new service offerings.

Recent Developments

On August 27, 2025, the Company closed an offering of Convertible Promissory Notes (the “Notes”) that were issued to certain accredited investors (the “Investors”) with a maturity date of September 9, 2026, a 20% original issue discount and an aggregate principal sum of $562,500. Pursuant to the terms of the Notes, the Company has agreed to pay all outstanding principal and interest on the maturity date. The conversion price of the Notes is the lesser of (i) a twenty percent (20%) discount to the average VWAP (as defined below) of the Common Stock for the twenty (20) consecutive trading days ending on the trading day immediately prior to the execution date of the Note and (ii) a twenty percent (20%) discount to the average VWAP of the Common Stock for the twenty (20) consecutive trading days ending on the trading day immediately preceding the date of a conversion notice, subject to adjustment as provided in the Note. The Investors may, at any time, convert all or a portion of the Notes. The Notes contain customary events of default and become due and payable upon the occurrence thereof. The Notes also provide the Investors with the right to exchange the Note for securities issued by the Company in a subsequent offering of securities by the Company. At the election of the Investors, 120% of the principal and interest then outstanding on the Note shall be exchanged for the new securities. The Company has also granted the Investors piggyback registration rights with respect to the shares of Common Stock underlying the Notes.

On September 9, 2025, the Company issued an additional Note to an accredited investor in the principal sum of $125,000 (the “September Note”). The September Note is identical to the Notes issued on August 27, 2025.

On September 17, 2025, the Company entered into the Purchase Agreement with CREO, whereby the Company may offer and sell, from time to time at its sole discretion, and whereby CREO has committed to purchase, up to $150.0 million of the Company’s newly issued Common Stock, subject to the limitations described herein. We and CREO can also agree to increase this purchase commitment to up to $500.0 million of the Company’s newly issued Common Stock, subject to the limitations described herein. As consideration for CREO’s commitment to purchase shares of Common Stock pursuant to the Purchase Agreement, we agreed to issue the CREO Commitment Shares following the creation of such CREO Commitment Shares. In the event CREO’s purchase commitment is increased, we will issue additional CREO Commitment Shares. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with CREO, pursuant to which it agreed to provide CREO with certain registration rights related to the shares issued under the Purchase Agreement (the “CREO Registration Rights Agreement”).

Exchange Listing

Our Common Stock is currently listed on the on the Nasdaq under the symbol “SHFS.”

Nasdaq Listing Compliance

The Company does not comply with the Nasdaq Capital Market (“Nasdaq”) continued listing standards. Furthermore, the Company does not meet the alternative criteria for continued listing, which are based on the market value of listed securities or net income from continuing operations. On April 7, 2025, the Company received a notice from Nasdaq indicating that it no longer met the continued listing requirements. Specifically, the Company’s stockholders’ equity was, and continues to be, below the minimum required stockholders’ equity of $2.5 million as stipulated by Nasdaq’s Listing Rule 5550(b)(1) (“Rule 5550(b)(1)”). A compliance plan was submitted to Nasdaq on May 22, 2025, and Nasdaq confirmed receipt of our compliance plan. Management is making progress towards regaining compliance, however, there is no assurance that we will be successful.

There can be no assurance that Nasdaq will accept the Company’s plan or that the Company will be able to regain compliance with Rule 5550(b)(1) or maintain compliance with any other Nasdaq requirement in the future.

Additionally, as of June 30, 2025, our stockholders’ deficit of approximately $17.9 million is $20.4 million below the $2.5 million minimum equity requirement for continued listing on Nasdaq under Rule 5550(b)(1). We received a deficiency notice from Nasdaq regarding this noncompliance, and we submitted a compliance plan on May 22, 2025. There is no assurance that the Company will regain compliance within the allowed period.

Emerging Growth Company

We are an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an EGC can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards. In other words, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We intend to take advantage of the benefits of this extended transition period, for as long as it is available. We will remain an EGC until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act and (b) in which we have total annual gross revenue of at least $1.07 billion, (2) the date on which we are deemed to be a large accelerated filer, which means the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (3) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. References herein to “emerging growth company” have the meaning provided in the JOBS Act.

Smaller Reporting Company

We are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K, which allows us to take advantage of certain exemptions from disclosure requirements including exemption from compliance with the auditor attestation requirements of Section 404. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of the shares of our Common Stock held by non-affiliates exceeds $250.0 million as of the prior June 30, and (ii) our annual revenue exceeded $100.0 million during such completed fiscal year or the market value of the shares of our Common Stock held by non-affiliates exceeds $700.0 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

Corporate Information.

The Northern Lights Acquisition Corp. (“NLIT”) was incorporated in the State of Delaware on February 26, 2021 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. The Company completed its initial public offering in June 2021. In September 2022, NLIT acquired SHF, changing its name from Northern Lights Acquisition Corp. to SHF Holdings, Inc. Our principal executive offices are located at 1523 Cole Boulevard, Suite 250, Golden, Colorado 80401 and our telephone number is 303-431-3435. Our website address is www.shfinancial.org. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website addresses in this prospectus solely as an inactive textual reference.

The rights of holders of our Common Stock are governed by our Second Amended and Restated Certificate of Incorporation (as amended, the “Second Amended and Restated Certificate of Incorporation”), our bylaws (the “Bylaws”), and the Delaware General Corporation Law (the “DGCL”). See “Description of Capital Stock.”

THE OFFERING
Issuer		SHF Holdings, Inc.
Shares of Common Stock offered by the Selling Stockholder		Up to 46,153,846 shares of our Common Stock. The actual number of shares of Common Stock issued and sold pursuant to the Purchase Agreement will vary depending on the then-current market price of shares of Common Stock sold to CREO under the Purchase Agreement, but will not exceed the number set forth above unless we file an additional registration statement under the Securities Act with the SEC. We are registering the number of shares of Common Stock issuable under the Purchase Agreement assuming the then-current market price of our Common Stock is approximately $3.25 per share.

Shares of Common Stock outstanding immediately prior to this offering		2,915,956 shares (as of September 24, 2025).

Shares of Common Stock outstanding immediately following to this offering		49,069,802 shares, assuming immediate purchase of all of the shares under the Purchase Agreement.

Terms of the offering		The Selling Stockholder will determine when and how it will dispose of any shares of our Common Stock that are registered under this prospectus for resale. See “Plan of Distribution.”

Plan of distribution		The Selling Stockholder will determine when and how it sells all or a portion of the shares of Common Stock offered pursuant to this prospectus. See “Plan of Distribution.”

Use of proceeds		We are not selling any securities under this prospectus, and will not receive any proceeds from the sale of Common Stock by the Selling Stockholder pursuant to this prospectus. We may receive up to $150.0 million in aggregate gross proceeds from CREO under the Purchase Agreement in connection with sales of the shares of our Common Stock pursuant to the Purchase Agreement after the date of this prospectus. We and CREO can also agree to increase this purchase commitment to up to $500.0 million of the Company’s newly issued Common Stock, subject to the limitations described herein, in which case we could receive aggregate gross proceeds in excess of $150.0 million. However, the actual proceeds from CREO may be less than this amount depending on the number of shares of our Common Stock sold and the price at which the shares of our Common Stock are sold. We intend to use any net proceeds from any sales of shares of our Common Stock to CREO under the CREO Equity Financing for working capital and other general corporate purposes. See “Use of Proceeds.”
Nasdaq symbol		“SHFS”

Risk factors		Investing in our securities involves significant risks. Before making a decision whether to invest in our securities, please read the information contained under the heading “Risk Factors” in this prospectus, the documents we have incorporated by reference herein and under similar headings in other documents filed after the date hereof and incorporated by reference into this prospectus. See “Incorporation of Certain Information by Reference” and “Where You Can Find More Information.”

Transfer agent		The transfer agent and registrar for our Common Stock is Continental Stock Transfer and Trust Company.

RISK FACTORS

We are subject to risks and uncertainties that could potentially negatively impact our business, financial conditions, results of operations and cash flows. This section contains a description of the risk and uncertainties identified by management that could, individually or in combination, harm our business, results of operations, liquidity and financial condition, as well as our financial instruments and our securities. In evaluating us and our business and making or continuing an investment in our securities, you should carefully consider the risks described below as well as other information contained in this prospectus and any risk factors and uncertainties discussed in our other public filings with the SEC under the caption “Risk Factors.” We may face other risks that are not contained in this prospectus, including additional risk that are not presently known, or that we presently deem immaterial. This prospectus and the risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in such forward-looking statements. Please refer to the sections in this prospectus titled “Cautionary Note Regarding Forward-Looking Statements” for additional information regarding forward-looking statements and “Summary of Risk Factors” for additional information regarding the risks and uncertainties that could potentially negatively impact our business, financial conditions, results of operations and cash flows.

Risks Related to the Company’s Business

There is substantial doubt as to our ability to continue as a going concern.

As of June 30, 2025, the Company reported $247,318 of cash and cash equivalents, with an accumulated deficit of $122,513,459. Additional funds are necessary to maintain current operations and to continue our activities. However, there can be no assurance that sufficient funding, from the CREO Equity Financing or otherwise, will be available to allow the Company to successfully continue our activities. If the Company is unable to obtain the necessary funds, additional reductions in spending and the delay or cancellation of planned activities may be necessary. These actions would have a material adverse effect on the Company’s business, results of operations, and prospects. As further discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and its Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025, these conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these accompanying financial statements were issued. Furthermore, the independent auditors’ report on our consolidated financial statements for the year ended December 31, 2024 included an explanatory paragraph that expressed substantial doubt about our ability to continue as a going concern. Our reported working capital deficit and operating losses, before adjustment for non-cash activity, raises substantial doubt about our ability to continue as a going concern. In addition, our future financial statements may include similar qualifications about our ability to continue as a going concern. Our financial statements were prepared assuming that we will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty. If we are unable to meet our current operating costs, we will need to seek additional financing or modify or cease our operational plans. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.

Our ability to raise additional funds will depend on financial, economic, and other factors, many of which are beyond our control. We cannot be certain that additional funding will be available on acceptable terms, or at all. Except as described in this prospectus, we have no committed source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be forced to delay, reduce, or terminate our business activities.

Substantially all of the Company’s CRB clients’ deposits are currently held at Partner Colorado Credit Union (“PCCU”), which means that our growth will be restricted until we can enter into agreements with additional financial institutions or directly with CRB clients.

Substantially all of the deposits of the Company’s CRB clients are currently held at PCCU. There can be no assurances that PCCU will be able to support the continued growth of CRB deposits given its regulatory framework. Therefore, unless we are able to expand the number of financial institutions at which deposits onboarded and monitored by the Company are held, our growth will be limited to the extent that PCCU’s assets may grow, if at all. Although under the Amended CAA (as defined below) the Company is not restricted from onboarding and monitoring deposits at other financial institutions, there can be no assurances that we will be able to expand the number of financial institutions with which we will onboard and monitor deposits or, if we are able to enter into agreements with additional financial institutions, whether the terms of those agreements will be on comparable terms. In addition, if PCCU were to terminate the Amended CAA, our operations would be materially impaired if we were not able to obtain from third parties the services the Company receives from PCCU under the Amended CAA or if we were not able to enter into arrangements with other financial institutions to host the deposits of the Company’s clients.

The Company’s loan program is currently substantially dependent on the regulatory restrictions placed on PCCU, currently the largest funding source of loans facilitated by the Company, which may limit the types, terms and amounts of loans that we may offer.

The Company’s loan program is currently dependent on a single financial institution, PCCU, as its primary funding source for loans to CRBs. To date, all of the Company’s loans have been funded by this institution. PCCU’s lending capacity is subject to regulatory, concentration, and internal policy limits, including limits on the aggregate amount of loans, types of collateral, and exposure to any single borrower or group of borrowers. As a result, the Company’s ability to expand its loan program is directly constrained by the growth and lending policies of this financial institution unless and until the Company establishes the capacity to make loans directly or secures participation from other financial institutions willing to lend to CRBs. Because the Company’s ability to attract and retain CRB clients is partially correlated to its ability to extend loans, any constraints on lending capacity could negatively impact client retention and business development. There can be no assurance that additional lenders will be identified, or that the Company would be able to obtain terms as favorable as those currently available. Any inability to diversify or expand funding sources could materially and adversely affect the Company’s growth prospects and financial condition.

The Company’s partner financial institutions may face competition from traditional financial institutions and other lenders and service providers for its lending and other services, which may adversely affect the Company’s ability to achieve its business goals and its results of operations.

The Company operates in an increasingly competitive market for its lending, compliance, client intake, management and banking services. The competitors to our compliance and customer-focused services include both traditional financial institutions and fintech companies servicing those financial institutions. Lending competitors include private investment funds, public real estate investment trusts and business development companies focused on the cannabis industry, and traditional financial institutions that have begun offering loans to CRBs. Many of our competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. In particular, because traditional financial institutions may have lower cost of funds, greater lending capacity, or higher risk tolerances than our financial institution customers, we may face greater competition in providing loans to CRBs. There can be no assurances that we will be able to successfully compete against these competitors, which may adversely affect the Company’s ability to achieve its business goals and its results of operations.

The soundness of our financial institution customers could adversely affect us.

Because our customers are other financial institutions, our ability to grow our operations and CRB client base could be adversely affected by the actions and commercial soundness the financial institutions for whom we provide services or who might seek our services. Financial institutions are interrelated as a result of trading, clearing, counterparty or other relationships. As a result, defaults by, or even rumors or questions about the financial health of, one or more financial institutions, or the banking and financial services industry generally, have previously led to market-wide liquidity problems and in the future could lead to losses, defaults or regulatory actions against the financial institutions with which we do business or with whom we may seek to provide services. There can be no assurances that the occurrence of any such losses, defaults or regulatory actions would not materially and adversely affect our results of operations.

Volatility in interest rates may adversely affect our revenues, profitability, and competitive position.

Prevailing interest rates affect multiple aspects of our business. Our investment income on deposits is tied to the Federal Reserve Interest on Reserve Balances (“IORB”) rate, such that changes in the IORB rate directly impact our revenues. Loan interest income is also influenced by prevailing market rates, which can affect both the yields on new loans and the demand for borrowing by CRBs. In addition, interest rates affect the cost of interest-bearing deposit products, including money market savings accounts offered by our financial institution partners.

Competitive dynamics in the cannabis banking sector are also affected by interest rates. In a higher-rate environment, some financial institutions may subsidize compliance costs with increased investment income and reduce or eliminate account fees charged to CRB clients, which can pressure our fee revenues. In a lower-rate environment, while account fees may increase, competition may prevent us from raising fees, which could reduce our profitability. As a result, sustained or volatile changes in interest rates could materially and adversely affect our business, financial condition, results of operations, and liquidity.

Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments and results of operations.

We are subject to laws, regulations and rules enacted by national, regional and local governments and Nasdaq. We are required to comply with certain SEC, Nasdaq and other legal or regulatory requirements of businesses providing financial services. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. These laws, regulations, and rules include, without limitation, the following:

	●	As an employer, we will be subject to state and federal laws relating to employment practices, health and safety of employees, employee benefits and other employment-related matters.

	●	As a company whose Common Stock is listed for trading on Nasdaq, we are subject to Nasdaq’s continued listing requirements, which include requirements relating corporate governance matters, the size of the public float of our shares, the minimum bid price of our shares, and maintaining minimum levels of shareholders’ equity. We are also required to notify Nasdaq of various corporate actions. See “Business––Nasdaq Listing Compliance.”

	●	We are an SEC reporting company and therefore we are required to comply with the various rules and regulations of the SEC that relate to, among other things, the timing and content of annual, quarterly and current reports, the process to register additional shares for sale to the public or for resale by existing investors, and disclosures in connection with meetings of our stockholders. Changes in these rules and regulations can have a significant impact on us.

As our business expands to additional states and U.S. territories, we will be required to review and comply with those states’ laws that apply to our services and business activities. We will also be required to determine whether we will become subject to additional areas of regulation if we expand the types of activities in which we engage. For example, because we do not hold client deposits or offer loans for consumer or personal purposes, we are not currently required have a financial institution charter or lending license in the states in which we currently provide services or loans. If we do not identify activities that would require a regulatory application, license or other approval, or if the interpretation and application of the laws to which we are currently subject change, those additional laws, rules, and regulations or changes therein could have a material adverse effect on our business, investments and results of operations. A failure to comply with any applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on our business and results of operations.

The Company is dependent third parties for certain services, and if we cannot manage our relationships with such third parties, our business, results of operations, financial condition, and cash flows could be adversely affected.

We rely on third parties, including PCCU, for certain administrative services. These fees may result in higher expenses than we would otherwise incur. In addition, we may not be able to bring these functions in-house and, even if we are able to do so, we may continue to rely on third parties for all or part of these functions. Reliance on a third party, including PCCU, may result in significant expenses and operational issues over which we will not have direct control. In addition, if any of these third parties terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we may not be able to replace such third party’s services or secure reasonable terms with another third party, which could adversely affect our business, results of operations, financial condition, and cash flows.

An information systems interruption or breach in security of the Company’s systems could adversely affect us.

The Company relies on information technology and other computer resources to perform important operational and marketing activities, as well as to maintain its business and employee records and financial data. The Company’s computer systems are currently hosted by PCCU and are subject to damage or interruption from, among other things, power outages, computer attacks by hackers, viruses, catastrophes, hardware and software failures and breach of data security protocols by its personnel or third-party service providers. Although the Company has implemented administrative and technical controls and has taken other actions to minimize the risk of cyber incidents and otherwise protect its information technology, computer intrusion efforts are becoming increasingly sophisticated and even the controls that the Company has installed might be breached. Further, many of these computer resources are provided to the Company or are maintained on the Company’s behalf by third-party service providers pursuant to agreements that specify certain security and service level standards, but which are ultimately outside of the Company’s control. If the Company were to experience a significant period of disruption in information technology systems that involve interactions with clients or suppliers, it could result in the loss of sales and clients and significant incremental costs, which could adversely affect its business. Additionally, security breaches of information technology systems could result in the misappropriation or unauthorized disclosure of proprietary, personal and confidential information, including information related to employees, counterparties, and clients, which could result in significant financial or reputational damage and liability under data privacy laws and regulations.

The Company may suffer uninsured losses or suffer material losses in excess of insurance limits.

In addition to difficulties with respect to claim assessment and liability and reserve estimation, some types of claims may not be covered by insurance or may exceed applicable coverage limits. The Company may also be responsible for applicable self-insured retentions with respect to its insurance policies. Furthermore, any product liability or warranty claims made against the Company, whether or not they are viable, may lead to negative publicity, which could impact the Company’s reputation and future sales.

Because of the uncertainties inherent in litigation, we cannot provide assurance that the Company’s insurance coverage, indemnity arrangements and reserves will be adequate to cover liability for any damages, the cost of litigation, or any other related expenses surrounding the current claims to which the Company is subject or any future claims that may arise. Such damages and expenses, to the extent that they are not covered by insurance, could materially and adversely affect our consolidated financial statements and results.

An adverse outcome in litigation to which the Company is or becomes a party could materially and adversely affect us.

Except as otherwise described in “Business––Involvement in Certain Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the years ended December 31, 2024 and 2023––Litigation,” the Company is not aware of any pending litigation involving the Company. However, in the future, it may become subject to litigation, including claims relating to its operations, breach of contract, securities offerings, relation to the cannabis industry, or otherwise in the ordinary course of business or otherwise. Some of these claims may result in significant defense costs and potentially significant judgments against the Company, some of which are not, or cannot be, insured against. We cannot be certain of the ultimate outcomes of any claims that may arise in the future. Resolution of these types of matters against the Company may result in significant fines, judgments or settlements, which, if uninsured, or if the fines, judgments and settlements exceed insured levels, could adversely impact the Company’s earnings and cash flows, thereby materially and adversely affecting us. Litigation or the resolution of litigation may affect the availability or cost of the Company’s insurance coverage, which could materially and adversely impact us.

We have identified material weaknesses in our internal control over financial reporting. If the remediation of such material weaknesses are not effective, or if we identify additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.

As of June 30, 2025, the Company identified material weaknesses in our internal control over financial reporting related to its going concern assessment. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, the following are the material weaknesses over financial reporting identified by management:

	●	Revenue Recognition: The Company is unable to support the completeness and accuracy of its activity fee income generated from deposits held at PCCU, as such activity fees are compiled from a system from which the Company does not have the ability to fully rely upon. As such, there is a potential that revenues recognized could have been misstated.

	●	Accounting for Financial Instruments: The Company did not appropriately apply the guidance under ASC 470, Debt, in connection with the reclassification of the Amended PCCU Note. The PCCU Note, which was amended on March 1, 2025, met the criteria for classification as a non-current liability under ASC 470, but was incorrectly presented as a current liability in the Company’s financial statements. As a result, management deemed that remediation efforts related to previously reported matter relating to the accounting, disclosure and valuation of complex financial instruments unsuccessful.

	●	Accounting for Forward Purchase Receivables: During the three months ended March 31, 2025, the Company did not appropriately reclassify the forward purchase receivables to additional paid-in-capital after certain conditions preventing its classification as equity were overcome. The Company did not have adequate documentation regarding the valuation of these receivables in accordance with the relevant accounting literature. This matter, corrected prior to issuance of the quarterly report, could have resulted in a misstatement in the valuation of the reported forward purchase receivables and additional paid-in-capital.

	●	Going Concern: In applying ASC 205-40 and SEC Staff Accounting Bulletin No. 59 (Topic 1.M), management failed to recognize that substantial doubt about the Company’s ability to continue as a going concern existed as of the December 31, 2024. Management’s evaluation initially failed to be evaluated based on financial cash flow projections from the date the financial statements would be issued. This matter could affect the accuracy and completeness assertions related to the presentation of liquidity and going concern disclosures in the financial statements.

	●	Information Technology: The Company did not regularly monitor, review, and restrict privileged user access to key financial applications, most significantly, the Jack Henry system utilized by PCCU which tracks account activity fees and the Company’s accounting system. Certain individuals, including the former Chief Financial Officer (CFO), retained unnecessary privileged access to these systems during the reporting period. Although audit logs confirm that no unauthorized transactions were executed and there is no evidence of intentional misuse of access, the presence of such elevated access created an environment where critical controls—particularly those relying on the segregation of duties—could have been overridden or bypassed.

	●	Determination of stock compensation expense: During the three months ended March 31, 2025, the Company initially reversed all previously recognized stock compensation expense under ASC 718 related to stock options that were fully vested at the time of the employee’s contract termination. Further, the fair value of certain stock option awards was not calculated correctly. The Black-Scholes option pricing model contained incorrect inputs, specifically for the expected term and stock price. The error in recording stock-based compensation resulted from a material weakness in the management review process.

The Company has implemented a remediation plan for each of the matters listed above. Management is in the process of assessing the effectiveness of these remediation efforts. Such remediation efforts include replacing the former Chief Financial Officer with a Senior Vice President (SVP) Controller with substantial SEC Registrant experience, enhancing the support provided to the SVP Controller, and implementing enhanced technology security procedures. Completion of remediation does not provide assurance that our remediation or other controls will continue to operate properly. A failure to maintain effective internal controls over financial reporting could result in errors in its financial statements that could require the Company to restate past financial statements, cause the Company to fail to meet its reporting obligations and cause investors to lose confidence in the Company’s reported financial information, all of which could materially and adversely affect the Company. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the years ended December 31, 2024 and 2023--––Liquidity and going concern––Management’s Plan Related to Going Concern” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months and Six Months ended June 2025 and 2024––Internal Control Over Financial Reporting” for additional discussion regarding the material weaknesses identified by management.

Our control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If our financial statements are not accurate, investors may not have a complete understanding of our operations. If we do not file financial statements on a timely basis as required by the SEC, we could face severe consequences. If we are unable to conclude that its internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our Common Stock could decline, and we could be subject to sanctions or investigations by the Nasdaq, the SEC or other regulatory authorities. Moreover, responding to such investigations are likely to consume a significant amount of our management resources and cause us to incur significant legal and accounting expenses. Failure to remedy any material weakness in internal control over financial reporting, or to maintain effective control systems, could also restrict our future access to the capital markets. This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

Risks Related to the Cannabis Industry

The Company provides services to financial institutions that provide banking services to businesses in or ancillary to the state-licensed cannabis industry and hemp industry, which could expose us to additional liabilities and regulatory compliance cost and adversely impact our business, operations, financial condition, brand and reputation.

The Company provides deposit and lending services to financial institutions that desire to provide services to CRBs in states where cannabis is legal for medical or full adult use. Medical use cannabis, as well as adult-use businesses, are legal in numerous states and the District of Columbia. Cannabis remains a Schedule I drug under the Controlled Substances Act of 1970 (the “CSA”), however, and the federal government has the authority to enforce the CSA regardless of whether cannabis is legal under state law. In 2014, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) published guidance for financial institutions servicing state-legal cannabis businesses (the “FinCEN Guidance”). The Company has implemented a comprehensive control framework that includes written policies and procedures related to the on-boarding of such businesses and the monitoring and maintenance of such business accounts at PCCU or other financial institutions that comport with the FinCEN Guidance. Additionally, the Company’s policies call for due diligence review of the cannabis business before the business is on-boarded, including, as applicable, confirmation that the business is properly licensed and maintains the license in good standing in the applicable state. The Company’s services to PCCU or other financial institutions include the ongoing monitoring and of the business to determine if the business continues to meet the requirements of the depositary institution.

While we believe the Company’s policies and procedures will allow us to operate in compliance with the FinCEN Guidance, there can be no assurance that compliance with the FinCEN Guidance will protect us from federal or other regulatory sanctions. Federal prosecutors have significant discretion and there can be no assurance that the federal prosecutors will not choose to strictly enforce the federal laws governing cannabis. Any change in the federal government’s enforcement position could potentially subject us to criminal prosecution and other regulatory sanctions. While we also believe the Company’s BSA anti-money laundering (“AML” and, together with BSA, “BSA/AML”) policies and programs are appropriate for the services offered by PCCU or other financial institutions to CRBs, the medical and adult-use cannabis business is considered high-risk, thus increasing the risk of a regulatory action against the Company’s BSA/AML program that could expose us to liabilities and regulatory compliance costs that would have an adverse impact on our business, results of operations, financial condition, brand and reputation.

Further, to the extent any law enforcement actions require us to respond to subpoenas, or undergo search warrants, for client records, PCCU or other financial institutions providing services to CRBs could elect to cease using our services. Until the U.S. federal government changes the laws with respect to cannabis, which may not occur, U.S. federal authorities could more strictly enforce current federal prohibitions and restrictions. An increase in federal enforcement against companies licensed under state cannabis laws could negatively impact the state-licensed cannabis industries and, in turn, our business, operating results, financial condition, brand and reputation.

The Company, its financial institution customers and their CRB clients are subject to a variety of laws regarding financial transactions related to cannabis, which could subject their CRB clients to legal claims or otherwise adversely affect our business.

The Company, its financial institution customers and their CRB clients are subject to a variety of laws and regulations in the United States regarding financial transactions, including the BSA, as amended by Title III of the USA Patriot Act. The penalties for violation of these laws and regulations include imprisonment, substantial fines and forfeiture. In complying with these laws and regulations, the Company complies with the FinCEN Guidance. This compliance includes, among other things, extensive due diligence reviews of potential and existing CRB clients of the financial institutions. These reviews may be time-consuming and costly, potentially creating additional barriers to providing financial services and imposing additional compliance requirements on us and our CRB clients. In addition, the Company is, on behalf of its financial institution customers, required to make various filings with FinCEN and the Internal Revenue Services (“IRS”) to report certain suspicious transactions or cash transactions of over $10,000. If the filings are not made accurately or promptly, substantial penalties may be imposed that could have a material adverse effect on our business, results of operations and financial condition. In addition, we cannot assure that the Company’s strategies and techniques for designing our services and solutions for our clients and CRB clients will operate effectively and efficiently and not be adversely impacted by cannabis regulations. Further, a change in financial services regulations or a change in the position of the financial services industry that permits more financial institutions to directly serve businesses that grow and sell cannabis products may increase competition for us, facilitate new entrants into the industry offering services similar to those that we offer, or otherwise adversely affect our results of operations.

We may have difficulty using bankruptcy courts due to our involvement in the regulated cannabis industry.

We currently have no plans to seek bankruptcy protection. Courts in the United States have held that debtors whose income is derived from cannabis or cannabis assets in violation of the CSA cannot seek federal bankruptcy protections. Although we are not in the business of growing or processing cannabis or selling or even possessing cannabis or cannabis products, a U.S. court could determine that our revenue is derived from cannabis or cannabis assets and prevent us from obtaining bankruptcy protections if necessary.

The conduct of third parties may jeopardize our business and regulatory compliance.

While the Company is not a cannabis licensee or directly involved in the cannabis industry and is therefore not subject to commercial cannabis regulations that apply to cannabis operators, we cannot guarantee that our systems, protocols, and practices associated with our onboarding and monitoring services will prevent all unauthorized or illegal activities by the CRBs receiving banking services through our financial institution customers. Our success depends in part on our financial institution customers’ ability to operate consistently with the regulatory and licensing requirements of each state, local, and regional jurisdiction in which they operate. We cannot ensure that the conduct of our financial institution customers and the CRBs that have deposits with them will not expose our clients to legal sanctions and costs, which could in turn, adversely affect our business, results of operations, financial condition, brand and reputation.

We may be subject to constraints on marketing our services, which could adversely impact our results of operations and our growth opportunities.

Certain states in which the Company may operate have strict regulations regarding marketing and sales activities ancillary to cannabis products, which could affect our ability to market our services and the development of our business. If we are unable to effectively market our services and compete for market share, or if the costs of compliance with government legislation and regulation cannot be mitigated through increased fees for our services, this could result in a loss of revenue.

Service providers to cannabis businesses may be subject to unfavorable U.S. tax treatment.

Under Section 280E of the Internal Revenue Code (the “Code”), no deduction or credit is allowed for any amount paid or incurred during the taxable year in carrying on business, other than costs of goods sold, if the business (or the activities which comprise the trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA). The IRS has applied this provision to cannabis operations, prohibiting them from deducting expenses associated with cannabis businesses and asserting assessments and penalties for additional taxes owed. While we believe that Section 280E of the Code does not apply to our business, or ancillary service providers that work with state-licensed CRBs, if the IRS determines that Section 280E does apply it would significantly and materially affect our profitability and financial condition.

Cannabis businesses may be subject to civil asset forfeiture.

Property owned by participants in the cannabis industry used in the course of conducting such business, or that represents proceeds of such business or is traceable to proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture because of the illegality of the cannabis industry under federal law. Even if the owner of the property is never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture. Forfeiture of assets of our CRB clients, particularly if such assets represent collateral for loans made or serviced by us, could adversely affect our revenues if it impedes the borrowers’ profitability or operations and our CRB clients’ ability to continue to use our services.

Because we provide services to companies that provide services to CRBs, we may have a difficult time obtaining the various insurances that are desired to operate our business, which may expose us to additional risk and financial liability.

Insurance that is otherwise readily available, such as general liability and directors’ and officers’ insurance, may be more difficult for us to find and could be more expensive or contain significant exclusions because our financial institution customers provide services to CRBs. There are no guarantees that we will be able to find such insurance coverage in the future or that the cost will be affordable to us. If appropriate coverage is not available, we may be prevented from entering into certain transactions or business sectors, our growth may be inhibited, and we may be exposed to additional risk and financial liabilities. If we experience an uninsured loss, it may result in loss of anticipated cash flow and could materially adversely affect our results of operations, financial condition, and business.

There may be difficulty enforcing certain of our commercial agreements and contracts.

Courts may not enforce a contract deemed to involve a violation of law or public policy. Parties to contracts involving the state-legal cannabis industry have at times argued that the agreements were void as federally illegal or against public policy. Some courts have accepted this argument in certain cases. While courts have enforced contracts related to activities by state-legal cannabis companies, and the trend is generally to enforce contracts with state-legal cannabis companies and their vendors, there remains some doubt that we will be able to enforce our commercial agreements with our financial institution customers or the CRBs to which they provide banking services in court. Therefore, we cannot be assured that we will have a remedy for breach of contract in all instances, which could have a material adverse effect on our business.

Directors, officers, employees and investors who are not U.S. citizens may face constraints on cross-border travel into the United States because of their involvement in the cannabis industry.

Non-U.S. citizens employed at or investing in companies doing business in the state-legal cannabis industry could face detention, denial of entry or lifetime bans from the United States for their business associations with cannabis businesses. Entry to the United States happens at the sole discretion of the officers on duty of the U.S. Customs and Border Protection, and these officers have wide latitude to ask questions to determine the admissibility of a foreign national. Business or financial involvement in the legal cannabis industry could be grounds for officers to deny entry. Travel restrictions imposed on our current or future directors, officers, employees and investors could impair our ability to conduct business and to freely explore new strategic relationships, thereby impacting our results of operations.

Risks Related to the Company’s Organization and Structure

The Company depends on key management personnel and other experienced employees.

The Company’s success depends to a significant degree upon the contributions of certain key management personnel including, but not limited to, the individual listed in the “Management” section included elsewhere in this prospectus. If the Company’s sole executive officer or any of the Company’s other key management personnel were to cease employment with the Company, the Company’s operating results could suffer. The Company’s ability to retain its key management personnel or to attract suitable replacements should any member(s) of its management team leave is dependent on the culture its leadership team fosters and on the competitive nature of the employment market. The loss of services from key management personnel or a limitation in their availability could materially and adversely impact the Company’s business, prospects, liquidity, financial condition and results of operations. Further, such a loss could be negatively perceived in the capital markets. The Company has not obtained key management life insurance that would provide it with proceeds in the event of death or disability of any of its key management personnel.

Experienced employees in the financial services and cannabis-related services industries are fundamental to the Company’s ability to generate, obtain and manage opportunities. In particular, relevant licenses and qualifications, local knowledge and relationships are critical to the Company’s ability to provide its services. Failure to attract and retain such personnel or to ensure that their experience and knowledge is not lost when they leave the business through retirement, redundancy or otherwise may adversely affect the standards of the Company’s service and may have an adverse impact on the Company’s business, prospects, liquidity, financial condition and results of operations.

Failure by the Company’s directors, officers or employees to comply with applicable policies, regulations and rules could materially and adversely affect us.

The Company has adopted an employee handbook which includes policies and guidelines for its directors, officers and employees. The Company’s adoption of these policies and guidelines is not a representation or warranty that all persons subject to such standards are or will be in complete compliance. The failure of a director, officer or employee of the Company to comply with the applicable policies and guidelines may result in liability or other legal consequences, adverse publicity and termination of the relationship, which could materially adversely affect the Company.

Changes in accounting rules, assumptions or judgments could materially and adversely affect the Company.

Accounting rules and interpretations for certain aspects of the Company’s financial reporting are highly complex and involve significant assumptions and judgment. These complexities could lead to a delay in the preparation and dissemination of the Company’s consolidated financial statements. Furthermore, changes in accounting rules and interpretations or in the Company’s accounting assumptions or judgments, such as asset impairments and contingencies are likely to significantly impact the Company’s consolidated financial statements. In some cases, the Company could be required to apply a new or revised standard retroactively, resulting in restating consolidated financial statements from prior period(s). Any of these circumstances could have a material adverse effect on the Company’s business, prospects, liquidity, financial condition and results of operations. For additional information, see the consolidated financial statements of the Company and related footnotes included elsewhere in this document.

If the Company fails to implement and maintain an effective system of internal controls, it may not be able to accurately determine its financial results or prevent fraud. As a result, investors could lose confidence in the Company’s financial results, which could materially and adversely affect the Company.

Effective internal controls are necessary for the Company to provide reliable financial reports and effectively prevent fraud. The Company may in the future discover areas of its internal controls that need improvement. We cannot be certain that the Company will be successful in maintaining adequate internal control over its financial reporting and financial processes. Furthermore, as the Company grows its business, its internal controls will become more complex, and the Company will require significantly more resources to ensure its internal controls remain effective. Additionally, the existence of any material weakness or significant deficiency would require management to devote significant time and incur significant expense to remediate any such material weakness or significant deficiency and management may not be able to remediate any such material weakness or significant deficiency in a timely manner. The existence of any material weakness in the Company’s internal control over financial reporting could also result in errors in its consolidated financial statements that could require the Company to restate past consolidated financial statements, cause the Company to fail to meet its reporting obligations and cause investors to lose confidence in the Company’s reported financial information, all of which could materially and adversely affect the Company. See “––Risks Related to the Company’s Business––We have identified material weaknesses in our internal control over financial reporting. If the remediation of such material weaknesses are not effective, or if we identify additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.”

Risks Related to an Investment in Our Securities

There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

Our continued eligibility for listing on Nasdaq depends on our ability to comply with Nasdaq’s continued listing requirements. If Nasdaq delists our Common Stock from trading on its exchange for failure to meet any listing standards, we and our stockholders could face significant material adverse consequences including:

	●	a limited availability of market quotations for our securities;

	●	a determination that our Common Stock is a “penny stock,” which will require brokers trading in our Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Common Stock;

	●	a limited amount of analyst coverage; and

	●	a decreased ability to issue additional securities or obtain additional financing in the future.

At this time, the Company’s Common Stock continues to trade on Nasdaq under the symbol “SHFS.” Remaining listed for trading on Nasdaq requires us to remain compliant with Nasdaq’s current continued listing requirements, which, in addition to a minimum bid price requirement, include maintaining minimum levels of shareholders’ equity, assets and revenues (depending on the compliance standard being used to demonstrate compliance), and other quantitative standards such as minimum market value of publicly held shares and number of market makers. For a discussion of the current status of our compliance with Nasdaq’s continued listing requirements, see “Business––Nasdaq Listing Compliance.”

The market for our securities has been volatile and may continue to be volatile, which would adversely affect the liquidity and price of our securities.

The price of our securities may fluctuate significantly due to the market’s reaction to sales of shares of Common Stock, including those issued to the holders of our convertible preferred stock upon the conversion thereof, and to general market and economic conditions. An active trading market for our securities may never develop or, if developed, it may not be sustained. In addition, the price of our securities can vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our securities become delisted from Nasdaq for any reason, and are quoted on the Over-the-Counter Markets, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities may be more limited than if we were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.

The Company may issue additional shares of common or preferred stock under the Amended and Restated – 2022 Equity Incentive Plan (the “Equity Incentive Plan”) or otherwise, any one of which would dilute the interest of the Company’s stockholders and likely present other risks.

The Company’s Second Amended and Restated Certificate of Incorporation authorizes the issuance of up to 130,000,000 shares of Common Stock and 1,250,000 shares of preferred stock, par value $0.0001 per share. There are currently 127,084,044 authorized but unissued shares of Common Stock available for issuance, which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants and stock options. There are currently 2,915,956 shares of Common Stock and 111 shares of preferred stock issued and outstanding. The Purchase Agreement permits the issuance of certain securities, including Common Stock, options and other equity awards, under the Equity Incentive Plan. The Company may issue additional shares of common or preferred stock to under the Equity Incentive Plan or as needed for working capital or other purposes.

The issuance of additional shares of common or preferred stock:

	●	may significantly dilute the equity interest of existing investors;

	●	may subordinate the rights of holders of Common Stock if preferred stock is issued with rights senior to those afforded the Common Stock;

	●	could cause a change in control if a substantial number of shares of Common Stock is issued, which may affect, among other things, the Company’s ability to use its net operating loss carry forwards, if any, and could result in the resignation or removal of the Company’s present officers and directors; and

	●	may adversely affect prevailing market prices for the Common Stock.

Our operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to seasonality and other factors, some of which are beyond our control, resulting in a decline in our stock price.

Our operating results may fluctuate significantly because of several factors, including:

	●	labor availability and costs for hourly and management personnel;

	●	profitability of our services, especially in new markets and due to seasonal fluctuations;

	●	changes in interest rates;

	●	macroeconomic conditions, both nationally and locally;

	●	negative publicity relating to products we serve;

	●	changes in consumer preferences and competitive conditions;

	●	expansion to new markets; and

	●	fluctuations in commodity prices.

If securities or industry analysts do not publish or cease publishing research or reports about the Company, its business, or its market, or if they change their recommendations regarding our Common Stock adversely, then the price and trading volume of the Common Stock could decline.

The trading market for our Common Stock may be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors. If any of the analysts who may cover the Company change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Common Stock would likely decline. If any analyst who may cover the Company were to cease coverage of us or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause the stock price or trading volume of our Common Stock to decline.

We may be unable to obtain additional financing to fund our operations and growth.

We may require financing in addition to the CREO Equity Financing to fund our operations or growth in future periods. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the Company. Except as otherwise provided for in the Purchase Agreement, none of our officers, directors or stockholders is required to provide any financing to us.

Anti-takeover provisions contained in our Second Amended and Restated Certificate of Incorporation and Bylaws, as well as provisions of Delaware law, could impair a takeover attempt, which could limit the price investors might be willing to pay in the future for our Common Stock.

Our Second Amended and Restated Certificate of Incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together, these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. These provisions include:

	●	a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

	●	a denial of the right of stockholders to call a special meeting;

	●	a vote of 66 2/3% required to approve certain amendments to the Second Amended and Restated Certificate of Incorporation and the Bylaws; and

	●	the designation of Delaware as the exclusive forum for certain disputes.

Our Second Amended and Restated Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholder’s ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our Second Amended and Restated Certificate of Incorporation provides, to the fullest extent permitted by law, that internal corporate claims may be brought only in the Court of Chancery in the State of Delaware (or, if the Court of Chancery does not have, or declines to accept, jurisdiction, another state court or a federal court located within the State of Delaware). In addition, our Second Amended and Restated Certificate of Incorporation provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. This forum selection provision does not apply to claims brought to enforce a duty or liability created by the Exchange Act. Any person or entity purchasing or otherwise acquiring or holding any interest in our stock shall be deemed to have notice of and consented to the forum provision in our Second Amended and Restated Certificate of Incorporation.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our Second Amended and Restated Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. For example, under the Securities Act, federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.

The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

We qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. As such, we take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as we continue to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of SOX, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. As a result, our stockholders may not have access to certain information they deem important. We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year (1) following July 28, 2026, the fifth anniversary of our IPO, (2) in which we have total annual gross revenue of at least $1.07 billion or (3) in which we are deemed to be a large accelerated filer, which means the market value of our Common Stock, public warrants and public units that is held by non-affiliates exceeds $700 million as of the last business day of our prior second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We cannot predict if investors will find our Common Stock less attractive if we choose to rely on these exemptions. If some investors find our Common Stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our Common Stock and the price of our Common Stock may be more volatile. The Company’s total revenue for the year ended December 31, 2024 was approximately $15.2 million. If the Company expands its business through acquisitions and/or grows revenue organically, we may cease to be an emerging growth company prior to December 31, 2026.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as we are an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. We have elected to avail ourselves of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our consolidated financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

If some investors find our Common Stock less attractive as a result of the foregoing, there may be a less active trading market for our Common Stock and more stock price volatility.

Risks Related to this Offering

It is not possible to predict the actual number of shares of our Common Stock, if any, we will sell under the Purchase Agreement, or the actual gross proceeds resulting from those sales or the dilution to you from those sales. Further, we may not have access to the full amount available under the Purchase Agreement.

Pursuant to the Purchase Agreement, CREO shall purchase from us up to the lesser of (i) $150.0 million in shares of our Common Stock, which can be increased to up to $500.0 million, and (ii) 582,899, representing 19.99% of the total number of shares of Common Stock outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”), upon the terms and subject to the conditions and limitations set forth in the Purchase Agreement (the “CREO Commitment Amount”); provided, however, that such limitations will not apply (A) if we obtain stockholder approval to issue additional shares of Common Stock or (B) if the “average price” of all purchases under the Purchase Agreement equals or exceeds the Minimum Price (as defined in the Purchase Agreement), as adjusted, such that issuance and sales of Common Stock under the Purchase Agreement are deemed “at market” pursuant to the corporate governance rules of Nasdaq. Accordingly, we have reserved 85,000,000 shares for issuance under the Purchase Agreement and resale pursuant to this prospectus, however there can be no guarantee that we will be able to obtain the requisite stockholder approval to issue additional shares of Common Stock. The shares of our Common Stock that may be issued under the Purchase Agreement may be sold by us to CREO at our discretion from time to time from the Commencement Date until the earliest to occur of (1) the thirty-six (36) month anniversary of the effective date of the registration statement of which this prospectus forms a part, (2) the date on which CREO has purchased the CREO Commitment Amount pursuant to the Purchase Agreement, (3) the date on which our Common Stock fails to be listed or quoted on Nasdaq or any successor Eligible Market (as defined in the Purchase Agreement), (4) thirty (30) trading days after the Company commences a voluntary bankruptcy case or any person commences a bankruptcy proceeding against the Company, in each case that is not discharged or dismissed prior to such thirtieth (30^th) trading day, (5) the date on which, pursuant to or within the meaning of any bankruptcy law, a custodian is appointed for us or for all or substantially all of our property, or we make a general assignment for the benefit of our creditors, or (6) the thirty-six (36) month anniversary of the date of the Purchase Agreement. The Company has the right to terminate the Purchase Agreement at any time after the Commencement Date, at no cost or penalty, upon one (1) trading day’s prior written notice to CREO. CREO has the right to terminate the Purchase Agreement upon ten (10) trading days’ prior written notice to the Company if certain specified events occur. The Company and CREO may also agree to terminate the Purchase Agreement by mutual written consent at any time.

Subject to the terms and conditions of the Purchase Agreement, we have the right to control the timing and amount of any sales of our Common Stock to CREO under the Purchase Agreement. Sales of our Common Stock, if any, to CREO under the Purchase Agreement will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to CREO all, some or none of the Common Stock that may be available for us to sell to CREO pursuant to the Purchase Agreement. Accordingly, we cannot guarantee that we will be able to sell all of the CREO Commitment Amount or how much in proceeds we may obtain under the Purchase Agreement. If we cannot sell securities under the CREO Equity Financing, we may be required to utilize more costly and time-consuming means of accessing the capital markets, which could have a material adverse effect on our liquidity and cash position.

Because the purchase price per share of Common Stock to be paid by CREO for the Common Stock that we may elect to sell to CREO under the Purchase Agreement, if any, will fluctuate based on the market prices of our Common Stock at the time we make such election, it is not possible for us to predict, as of the date of this prospectus and prior to any such sales, the number of shares of Common Stock that we will sell to CREO under the Purchase Agreement, the purchase price per share that CREO will pay for shares of Common Stock purchased from us under the Purchase Agreement, or the aggregate gross proceeds that we will receive from those purchases by CREO under the Purchase Agreement.

We are registering 46,153,846 shares of our Common Stock under this prospectus. As of September 24, 2025, there were 2,915,956 shares of Common Stock outstanding. If all of the 46,153,846 shares of our Common Stock offered for resale by the Selling Stockholder under this prospectus were issued and outstanding as of September 24, 2025, such shares would represent approximately 94% of the total number of shares of our Common Stock outstanding.

The actual number of shares of our Common Stock issuable will vary depending on the then current market price of shares of our Common Stock sold to the Selling Stockholder in this offering and the number of shares of our Common Stock we ultimately elect to sell to the Selling Stockholder under the Purchase Agreement. If it becomes necessary for us to issue and sell to CREO under the Purchase Agreement more than the 46,153,846 shares of our Common Stock (assuming the shares are sold at a price of approximately $3.25 per share) being registered for resale under this prospectus in order to receive aggregate gross proceeds equal to $150.0 million under the Purchase Agreement, or more if CREO’s total purchase commitment is increased in accordance with the terms of the Purchase Agreement, we must file with the SEC one or more additional registration statements to register under the Securities Act the resale by CREO of any such additional shares of our Common Stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case before we may elect to sell any additional shares of our Common Stock under the Purchase Agreement. CREO is not obligated to buy any Common Stock under the Purchase Agreement if such shares, when aggregated with all other Common Stock then beneficially owned by CREO and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act, and Rule 13d-3 promulgated thereunder), would result in CREO beneficially owning Common Stock in excess of 4.99% of the then-outstanding shares of Common Stock (the “Beneficial Ownership Cap”). Our inability to access a portion or the full amount available under the Purchase Agreement, in the absence of any other financing sources, could have a material adverse effect on our business or results of operation. For additional information, see “CREO Equity Financing” below.

CREO will pay less than the then-prevailing market price for our Common Stock, which could cause the price of our Common Stock to decline.

The purchase price of our Common Stock to be sold to CREO under the Purchase Agreement is derived from the market price of our Common Stock on Nasdaq. Shares to be sold to CREO pursuant to the Purchase Agreement will be purchased at a discounted price.

For example, we may effect sales to CREO pursuant to a Purchase (as defined below) notice at a purchase price equal to the lesser of 90% of (i) the lowest sale price of the Common Stock on the applicable Purchase Date (as defined below) and (ii) the daily volume weighted average price of the Company’s Common Stock on Nasdaq (“VWAP”) during the VWAP Purchase Period (as defined in the Purchase Agreement). See “CREO Equity Financing” for more information.

As a result of this pricing structure, CREO may sell the shares they receive immediately after receipt of such shares, which could cause the price of our Common Stock to decrease.

Investors who buy shares of Common Stock from CREO at different times will likely pay different prices.

Pursuant to the Purchase Agreement, we have discretion, to vary the timing, price and number of shares of Common Stock we sell to CREO. If and when we elect to sell shares of Common Stock to CREO pursuant to the Purchase Agreement, after CREO has acquired such shares, CREO may resell all, some or none of such shares at any time or from time to time in its sole discretion and at different prices. As a result, investors who purchase shares from CREO in this offering at different times will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from CREO in this offering as a result of future sales made by us to CREO at prices lower than the prices such investors paid for their shares in this offering. In addition, if we sell a substantial number of shares to CREO under the Purchase Agreement, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangements with CREO may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

Future resales and/or issuances of shares of Common Stock, including pursuant to this prospectus, or the perception that such sales may occur, may cause the market price of our shares to drop significantly.

Sales of a substantial number of shares of our Common Stock by us or the Selling Stockholder and any future sales of a substantial number of shares of Common Stock in the public market, or the perception by the market that those sales could occur, could cause the market price of our Common Stock to decline or could make it more difficult for us to raise funds through the sale of equity and equity-related securities in the future at a time and price that our management deems acceptable, or at all. The shares of our Common Stock that may be issued under the Purchase Agreement may be sold by us to CREO at our discretion from time to time from the date of effectiveness of effectiveness of the registration statement of which this prospectus forms a part until the earliest to occur of (i) the thirty-six (36) month anniversary of the effective date of the registration statement of which this prospectus forms a part, (ii) the date on which CREO has purchased the CREO Commitment Amount pursuant to the Purchase Agreement, (iii) the date on which our Common Stock fails to be listed or quoted on Nasdaq or any successor Eligible Market (as defined in the Purchase Agreement), (iv) thirty (30) trading days after the Company commences a voluntary bankruptcy case or any person commences a bankruptcy proceeding against the Company, in each case that is not discharged or dismissed prior to such thirtieth (30^th) trading day, (v) the date on which, pursuant to or within the meaning of any bankruptcy law, a custodian is appointed for us or for all or substantially all of our property, or we make a general assignment for the benefit of our creditors, or (vi) the thirty-six (36) month anniversary of the date of the Purchase Agreement.

The purchase price for shares of our Common Stock that we may sell to CREO under the Purchase Agreement will fluctuate based on the trading price of shares of our Common Stock. Depending on market liquidity at the time, sales of shares of our Common Stock may cause the trading price of shares of our Common Stock to decrease. Subject to the terms and conditions of the Purchase Agreement, we have the right to control the timing and amount of any future sales of shares of our Common Stock to CREO. Additional sales of shares of our Common Stock, if any, to CREO will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to CREO all, some or none of the additional shares of our Common Stock that may be available for us to sell pursuant to the Purchase Agreement. If and when we do sell shares of our Common Stock to CREO, after CREO has acquired shares of our Common Stock, CREO may resell all, some or none of such shares of our Common Stock at any time or from time to time in its discretion and at different prices. Therefore, sales to CREO by us could result in substantial dilution to the interests of other holders of shares of our Common Stock. In addition, if we sell a substantial number of shares of our Common Stock to CREO under the Purchase Agreement, or if investors expect that we will do so, the shares held by CREO will represent a significant portion of our public float and may result in substantial decreases to the price of our Common Stock. The actual sales of shares of our Common Stock or the mere existence of our arrangement with CREO may also make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

The market price of shares of our Common Stock could drop significantly if CREO sells shares of Common Stock or is perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of shares of our Common Stock or other securities.

We may use proceeds from sales of our Common Stock made pursuant to the Purchase Agreement in ways with which you may not agree or in ways which may not yield a significant return.

We will have broad discretion over the use of proceeds from sales of our Common Stock made pursuant to the Purchase Agreement, including for any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds, their ultimate use may vary substantially from their currently intended use. While we expect to use the net proceeds from this offering as set forth in “Use of Proceeds,” we are not obligated to do so. The failure by us to apply these funds effectively could harm our business, and the net proceeds may be used for corporate purposes that do not increase our operating results or enhance the value of our Common Stock.

CREO EQUITY FINANCING

On September 17, 2025, the Company entered into the Purchase Agreement relating to the CREO Equity Financing with CREO, whereby the Company may offer and sell, from time to time at its sole discretion, and whereby CREO has committed to purchase, up to $150.0 million of the Company’s newly issued Common Stock, subject to the limitations described below. We and CREO may also agree to increase CREO’s total purchase commitment, in which case we could receive aggregate gross proceeds from CREO under the Purchase Agreement in connection with sales of the shares of our Common Stock at varying purchase prices after the date of this prospectus in excess of $150.0 million. Under the Purchase Agreement, CREO’s total purchase commitment can be increased to up to an aggregate of $500.0 million. In the event of such an increase, we would issue additional CREO Commitment Shares to CREO. Concurrently with entering into the Purchase Agreement, the Company also entered into the CREO Registration Rights Agreement.

The Company may, from time to time and at its sole discretion, direct CREO to purchase shares of Common Stock upon the satisfaction of certain conditions set forth in the Purchase Agreement at a purchase price per share based on the market price of Common Stock at the time of sale as computed under the Purchase Agreement. There is no upper limit on the price per share that CREO could be obligated to pay for Common Stock under the Purchase Agreement. The Company will control the timing and amount of any sales of Common Stock to CREO, and CREO has no right to require the Company to sell any shares to it under the Purchase Agreement.

The Company does not have a right to commence any sales of Common Stock to the Purchaser under the Purchase Agreement until the time when all of the conditions to the Company’s right to commence sales of Common Stock to the Purchaser set forth in the Purchase Agreement have been satisfied, including that a registration statement covering the resale of such shares is declared effective by the SEC and the final form of prospectus is filed with the SEC (the “Commencement Date”). Over the thirty-six (36) month period from and after the Commencement Date, the Company will control the timing and amount of any sales of Common Stock to the Purchaser. Actual sales of shares of Common Stock to the Purchaser under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by us as to the appropriate sources of funding and the Company’s operations.

Although the Purchase Agreement provides that we may sell, subject to a mutually agreed upon increase, up to an aggregate of $150.0 million of our shares of our Common Stock to CREO, only 46,153,846 shares of our Common Stock (assuming the shares are sold at a price of approximately $3.25 per share) are being registered for resale under the registration statement that includes this prospectus. If it becomes necessary for us to issue and sell to CREO under the Purchase Agreement more shares than are being registered for resale under this prospectus in order to receive aggregate gross proceeds equal to $150.0 million under the Purchase Agreement, or more if CREO’s total purchase commitment is increased in accordance with the terms of the Purchase Agreement, we must first file with the SEC one or more additional registration statements to register under the Securities Act the resale by CREO of any such additional shares of our Common Stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case, before we may elect to sell any additional shares of our Common Stock to CREO under the Purchase Agreement.

In no event will the Company issue to the Purchaser under the Purchase Agreement more than 582,899 shares of Common Stock, representing 19.99% of the total number of shares of Common Stock outstanding immediately prior to the execution of the Purchase Agreement, unless (i) the Company obtains the approval of the issuance of such shares by its stockholders in accordance with the applicable stock exchange rules or (ii) if the “average price” of all purchases under the Purchase Agreement equals or exceeds the Minimum Price (as defined in the Purchase Agreement), as adjusted, such that issuance and sales of Common Stock under the Purchase Agreement are deemed “at market” pursuant to the corporate governance rules of Nasdaq. As of the date of this prospectus, we have not sought stockholder approval to issue shares to CREO in excess of the Exchange Cap, although the Company intends to seek stockholder approval in the near future.

In all cases, the Company may not issue or sell any shares of Common Stock to CREO under the Purchase Agreement which, when aggregated with all other shares of Common Stock then beneficially owned by CREO and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in CREO beneficially owning shares in excess of the Beneficial Ownership Cap.

At any time from and after the Commencement Date, on any business day on which the closing sale price of the Common Stock is equal to or greater than $1.00 (the “Purchase Date”), the Company may direct the Purchaser to purchase a specified number of shares of Common Stock (a “Purchase”) not to exceed the lesser of (i) the Beneficial Ownership Cap and (ii) 30% of the trading volume in the Company’s Common Stock on Nasdaq during the VWAP Purchase Period at a price equal to 90% of (a) the lowest sale price of the Common Stock on the applicable Purchase Date and (b) the VWAP during the period on the applicable Purchase Date.

The net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its Common Stock to CREO.

The Purchase Agreement contains customary representations, warranties and agreements of the Company and CREO, limitations and conditions regarding sales of Common Stock, indemnification rights and other obligations of the parties.

There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement other than a prohibition (with certain limited exceptions) on entering into a dilutive securities transaction during certain periods when the Company is selling Common Stock to CREO under the Purchase Agreement. CREO has agreed that, during the term of the Purchase Agreement, it will not engage in or effect, directly or indirectly, any short sales involving the Company’s securities or any hedging transaction that transfers the economic risk of ownership of the Common Stock.

The Purchase Agreement will automatically terminate on the earliest to occur of earliest to occur of (i) the thirty-six (36) month anniversary of the effective date of the registration statement of which this prospectus forms a part, (ii) the date on which CREO has purchased the CREO Commitment Amount pursuant to the Purchase Agreement, (iii) the date on which our Common Stock fails to be listed or quoted on Nasdaq or any successor Eligible Market (as defined in the Purchase Agreement), (iv) thirty (30) trading days after the Company commences a voluntary bankruptcy case or any person commences a bankruptcy proceeding against the Company, in each case that is not discharged or dismissed prior to such thirtieth (30^th) trading day, (v) the date on which, pursuant to or within the meaning of any bankruptcy law, a custodian is appointed for us or for all or substantially all of our property, or we make a general assignment for the benefit of our creditors, or (vi) the thirty-six (36) month anniversary of the date of the Purchase Agreement. The Company has the right to terminate the Purchase Agreement at any time after the Commencement Date, at no cost or penalty, upon one (1) trading day’s prior written notice to CREO. CREO has the right to terminate the Purchase Agreement upon ten (10) trading days’ prior written notice to the Company if certain specified events occur. The Company and CREO may also agree to terminate the Purchase Agreement by mutual written consent at any time. Neither the Company nor CREO may assign or transfer the Company’s respective rights and obligations under the Purchase Agreement.

Concurrent with the execution of the Purchase Agreement, the Company entered into the CREO Registration Rights Agreement, pursuant to which the Company agreed to file a registration statement covering the issuance and sale of the maximum number of shares issuable under the Purchase Agreement as may be permitted under applicable rules. The Company agreed to use its commercially reasonable efforts to cause the registration statement to be filed within thirty (30) days after the closing of the Purchase Agreement and to have such registration statement effective upon the earlier of (i) the sixtieth (60^th) day following the date of such filing and (ii) the third (3^rd) business day following the date the Company is notified by the SEC that such registration statement will not be reviewed or subject to further review.

Effect of Sales of our Common Stock under the Purchase Agreement on our Stockholders

The Common Stock being registered for resale in this offering may be issued and sold by us to the Selling Stockholder from time to time at our discretion, during the terms described above. The resale by the Selling Stockholder of a significant quantity of shares registered for resale in this offering at any given time, or the perception that these sales may occur, could cause the market price of our Common Stock to decline and to be highly volatile. Sales of our Common Stock, if any, to CREO under the Purchase Agreement will be determined by us in our sole discretion, subject to the satisfaction of certain conditions in the Purchase Agreement and will depend upon market conditions and other factors. We may ultimately decide to sell to CREO all, some or none of the Common Stock that may be available for us to sell to CREO pursuant to the Purchase Agreement. If we elect to sell Common Stock to CREO pursuant to the Purchase Agreement, after CREO has acquired such shares, CREO may resell all, some or none of such Common Stock at any time or from time to time in its discretion and at different prices. As a result, investors who purchase Common Stock from CREO in this offering at different times will likely pay different prices for those shares of Common Stock, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results. See “Risk Factors—Risks Related to this Offering—Investors who buy shares of Common Stock from CREO at different times will likely pay different prices.”

Investors may experience a decline in the value of the Common Stock they purchase from CREO in this offering as a result of future sales made by us to CREO at prices lower than the prices such investors paid for their shares in this offering. In addition, if we sell a substantial number of shares of Common Stock to CREO under the Purchase Agreement, or if investors expect that we will do so, the actual sales of Common Stock or the mere existence of our arrangement with CREO may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales. See “Risk Factors––Risks Related to this Offering––Future resales and/or issuances of shares of Common Stock, including pursuant to this prospectus, or the perception that such sales may occur, may cause the market price of our shares to drop significantly.”

Because the purchase price per share to be paid by CREO for the Common Stock that we may elect to sell to CREO under the Purchase Agreement, if any, will fluctuate based on the market prices of our Common Stock at the time we make such election, as of the date of this prospectus, it is not possible for us to predict the number of shares of Common Stock that we will sell to CREO under the Purchase Agreement, the actual purchase price per share to be paid by CREO for those shares of Common Stock, or the actual gross proceeds to be raised by us from those sales, if any. As of September 24, 2025, there were 2,915,956 shares of Common Stock outstanding. If all of the 46,153,846 shares of our Common Stock offered for resale by the Selling Stockholder under this prospectus were issued and outstanding as of September 24, 2025, such shares would represent approximately 94% of the total number of shares of our Common Stock outstanding. The actual number of shares of our Common Stock issuable will vary depending on the then current market price of shares of our Common Stock sold to the Selling Stockholder in this offering.

The number of shares of Common Stock ultimately offered for sale by the Selling Stockholder for resale under this prospectus is dependent upon the number of shares of Common Stock, if any, we ultimately sell to CREO under the Purchase Agreement. Further, if and when we elect to sell shares of Common Stock to CREO pursuant to the Purchase Agreement, after CREO has acquired such shares, CREO may resell all, some or none of such shares of Common Stock at any time or from time to time in its discretion and at different prices. See “Risk Factors––Risks Related to this Offering–– It is not possible to predict the actual number of shares of our Common Stock, if any, we will sell under the Purchase Agreement, or the actual gross proceeds resulting from those sales or the dilution to you from those sales. Further, we may not have access to the full amount available under the Purchase Agreement.”

The issuance of our shares of Common Stock to the Selling Stockholder pursuant to the Purchase Agreement will not affect the rights or privileges of our existing stockholders, except that the economic and voting interests of each of our existing stockholders will be diluted. Although the number of shares of Common Stock that our existing stockholders own will not decrease, the shares of Common Stock owned by our existing stockholders will represent a smaller percentage of our total outstanding shares of Common Stock after any such issuance.

Although the Purchase Agreement provides that we may sell up to an aggregate of $150.0 million of shares of our Common Stock to CREO, or more if CREO’s total purchase commitment is increased in accordance with the terms of the Purchase Agreement, only 46,153,846 shares (assuming the shares are sold at a price of approximately $3.25 per share) are being registered for resale under the registration statement that includes this prospectus. If it becomes necessary for us to issue and sell more shares than are being registered for resale under this prospectus in order to receive aggregate gross proceeds equal to $150.0 million under the Purchase Agreement, or more if CREO’s total purchase commitment is increased in accordance with the terms of the Purchase Agreement, we must first file with the SEC one or more additional registration statements to register under the Securities Act the resale by CREO of any such additional shares of our Common Stock we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case, before we may elect to sell any additional shares of our Common Stock to CREO under the Purchase Agreement.

The following table sets forth the number of shares of Common Stock to be issued to CREO under the Purchase Agreement registered hereunder at varying purchase prices:

Assumed Average Purchase Price Per Share		Number of Registered Shares to be Issued if Full Purchase⁽¹⁾	Percentage of Outstanding Shares After Giving Effect to the Issuance to CREO ⁽²⁾		Gross Proceeds from the Sale of Shares to CREO Under the Purchase Agreement
$	3.25	46,153,846	94	%	$	150,000,000
$	5.00	30,000,000	91.1	%	$	150,000,000
$	7.00	21,428,571	88	%	$	150,000,000

(1)	The purchase prices assume a discount to the market prices of our shares, in accordance with the Purchase Agreement.

(2)

The denominator is based on 2,915,956 shares outstanding as of September 24, 2025, adjusted to include the number of shares set forth in the adjacent column that we would have sold to CREO, assuming the average purchase price in the first column. The numerator is based on the number of shares issuable pursuant to future sales under the Purchase Agreement (that are the subject of this offering) at the corresponding assumed average purchase price set forth in the first column.

USE OF PROCEEDS

All of the shares of our Common Stock offered by CREO will be solely for CREO’s account. We will not receive any of the proceeds from these sales. We may receive up to $150.0 million in aggregate gross proceeds from CREO under the Purchase Agreement in connection with sales of our shares of our Common Stock to CREO after the date of this prospectus. We and CREO may also agree to increase CREO’s total purchase commitment, in which case we could receive aggregate gross proceeds from CREO under the Purchase Agreement in connection with sales of the shares of our Common Stock at varying purchase prices after the date of this prospectus in excess of $150.0 million. Under the Purchase Agreement, CREO’s total purchase commitment can be increased to up to an aggregate of $500.0 million. However, the actual proceeds may be less than this amount depending on the number of shares of our Common Stock sold and the price at which the shares of our Common Stock are sold.

We intend to use any net proceeds from any sales of shares of our Common Stock to CREO under the CREO Equity Financing for working capital and other general corporate purposes. Pending other uses, we intend to invest the net proceeds to us in investment-grade, interest-bearing securities such as money market funds, cryptocurrencies, certificates of deposit, or direct or guaranteed obligations of the U.S. government, or hold as cash. We cannot predict whether the net proceeds invested will yield a favorable return. We will have broad discretion in the way we use these proceeds. See “Risk Factors–– Risks Related to this Offering––We may use proceeds from sales of our Common Stock made pursuant to the Purchase Agreement in ways with which you may not agree or in ways which may not yield a significant return.”

The Selling Stockholder will pay any underwriting fees, discounts, selling commissions, stock transfer taxes and certain legal expenses incurred thereby in disposing of its shares of Common Stock, and we will bear all other costs, fees and expenses incurred in effecting the registration of such securities covered by this prospectus, including, without limitation, all registration and filing fees, Nasdaq listing fees and fees and expenses of our counsel and our independent registered public accountants. We estimate that the total expenses paid by us for the offering will be approximately $200,000.

DETERMINATION OF OFFERING PRICE

We cannot currently determine the price or prices at which shares of our Common Stock may be sold by the Selling Stockholder under this prospectus.

MARKET INFORMATION FOR COMMON STOCK AND DIVIDEND POLICY

Market Information

Our Common Stock is currently listed on the Nasdaq under the symbol “SHFS.”

As of September 24, 2025, there were 100 holders of record of our Common Stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. The closing price of our Common Stock as reported on Nasdaq on September 24, 2025 was $7.27 per share.

Dividend Policy

We have not paid any cash dividends on our Common Stock to date. We may retain future earnings, if any, for future operations, expansion and debt repayment and has no current plans to pay cash dividends for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of the Company’s board of directors (the “Board of Directors” or the “Board”) and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that the Board may deem relevant. In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur. We do not anticipate declaring any cash dividends to holders of the Common Stock in the foreseeable future.

BUSINESS

Overview

We provide compliance and loan origination services to financial institutions desiring to provide business banking, private banking and commercial banking services to their clients, particularly those clients conducting business in or adjacent to the state legal cannabis industry. Our services include, among other things:

	●	regulatory compliance consulting and software for maintaining “Know Your Customer” (“KYC”) and BSA compliance to financial institutions, principally conducted vis-à-vis our proprietary financial services platform;

	●	the origination, onboarding, verification, and servicing of cannabis-related deposit business for and on behalf of our partner financial institutions; and

	●	sourcing, underwriting, servicing, and administering loans issued to cannabis businesses and related entities, which are often also our clients, as well as being clients of our partner financial institutions.

Financial Services Platform

Through the Company’s platform, our financial institution customers have the ability to provide CRBs with access to traditional financial services including wires, debit, ACH, remote deposit capture, business checking and savings accounts, courier and vaulting services, cash management accounts and commercial lending. We believe our services have been implemented consistent with applicable law and regulations, ensuring our financial institution customers will be able to provide CRBs with reliable access to these services. We feel our history of developing processes that satisfy regulatory standards has resulted in a solid reputation with related authorities and solidifies our ability to continue to grow existing services and reduces barriers to expanding into new service offerings.

CRB Deposits

The Company maintains relationships with PCCU and other financial institutions in which the CRB funds are deposited and monetary transactions are performed. The Company’s agreements with the financial institution allow the Company’s platform to interface with the financial institution’s core banking systems and extract data necessary to monitor the deposit accounts onboarded by the Company’s transactions, such as funds transmissions to or from the accounts, occur through PCCU’s and other financial institution customer’s infrastructure.

When a CRB or ancillary service provider approaches a financial institution for which the Company provides its onboarding services, an initial onboarding fee is assessed based on the type and complexity of the business. Onboarding is an important part of the KYC requirements set forth in federal guidance. The onboarding process can require a great deal of time depending on the business complexity, and the fee we assess is based upon the complexity and required time to complete the process. Additionally, the Company assesses monthly deposit and activity fees, which have historically been the majority of our revenue. These fees are also based on business type and size. Monitoring and validating deposit activity is paramount to the success of the Company’s platform. We believe our compliance-first focus reassures regulators and law enforcement that the Company continues to focus on the safety and soundness of the financial system.

Investment income is also generated when our financial institution customers invest CRB deposits. Under the Commercial Alliance Agreement (“PCCU CAA”) dated March 29, 2023 between PCCU and the Company, which was amended on December 31, 2024, the Company pays a fixed 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. Through its relationship with PCCU, depository amounts invested are typically restricted to low-risk assets with high liquidity and low returns. The investment income is significantly influenced by the levels of CRB deposits and the prevailing interest rate environment for cash and similar assets. Fees based on deposits we onboard, along with interest on the daily balance (less cash used to collateralize our loan portfolios maintained with financial institutions), represented a significant portion of our revenue in 2024.

On December 31, 2024, the Company and PCCU entered into an Amended and Restated Commercial Alliance Agreement (“Amended CAA”), extending the term through December 31, 2028, with automatic renewals every two (2) years unless terminated with twelve (12) months’ notice. Key changes in the Amended CAA include the elimination of the Company’s indemnification obligations for loan-related losses and the removal of prior fees, such as per-account servicing, investment hosting, and loan servicing fees. These are replaced by a fixed asset hosting fee, calculated based on the average daily balance of account relationships. The Amended CAA also entitles the Company to all investment income earned on CRB funds invested on its behalf by PCCU. Additionally, the interest income is now determined using a loan yield allocation formula, and penalties are introduced for non-compliance with the Loan-to-Share Ratio (as defined below), including adjustments to the asset hosting fee and interest charges if certain thresholds are exceeded. See “––Amended and Restated CAA with PCCU.”

Commercial Lending Program

The level of CRB deposits onboarded by the Company and held at PCCU allows for robust lending capacity. The Company’s commercial lending program serves as a key pillar for future revenue and profit growth. The primary focus will be on senior secured lending, with smaller loans also considered for unsecured lending opportunities. Collateral types would include real estate, equipment, and other business assets. The Company’s commercial lending program is built on:

	●	stringent collateral package requirements with ample loan to value coverage;

	●	strong underwriting of collateral and creditworthiness of borrower; and

	●	a deep knowledge and understanding of the industry, the borrowers’ operations and the cannabis industry business cycle.

Currently, lending is primarily funded through PCCU using the funds from CRB deposit accounts onboarded by the Company. The Company is currently seeking relationships with additional financial institutions that would fund the Company’s loans and other sources of working capital with which the Company could fund the loans directly. The Company has created a lending program tailored specifically to the unique needs of CRBs while also achieving strong returns on quality loans. While third parties are presently used to provide loan underwriting and servicing, the Company plans on building out a full-service internal lending function to improve the efficiency of our lending process and to increase future profitability.

We feel we have taken a creative and methodical approach in building the Company’s platform, which has allowed us to nationally scale our business. The platform’s policies, training, monitoring and other processes are well established with talented employees who have expert-level knowledge. We also plan to further expand the officer-level suite with talent that we believe will further our success. We anticipate this combination will provide a competitive advantage for us as we focus on continued growth.

Our Mission

Our mission is to become the cannabis industry’s leading financial services provider by creating a one-stop financial service center upon which cannabis businesses can rely.

We intend to support our mission by providing unparalleled customer and client service while offering a unique array of innovative technology-based products and services. We believe that our unique banking relationships, reputation of reliability in the cannabis industry, as well as our deep expertise and experience in the industry, will position us to serve a broad range of cannabis industry participants, including cannabis cultivators, processors, manufacturers, dispensaries, multi-state operators, as well as the financial institutions that wish to bank cannabis industry participants. Since 2015, we have facilitated more than $25.6 billion in deposit activity across a footprint of 41 states and territories of the United States.

Through a combination of organic growth, increased commercial lending, and further development of our fintech platform, we believe we are all well-positioned to service the cannabis industry, including through the industry’s recent large-scale consolidations.

Industry Overview

We believe that the cannabis industry is one of the fastest growing emerging consumer packaged goods markets in the United States. Grand View Research predicts the U.S. cannabis market will expand from $44 billion in 2025 to $76 billion by 2030. The state-licensed operators current employ 425,000 people in the United States, per the Vangst U.S. Cannabis Jobs Report 2025.

Despite rapid growth, industry participants continue to face various headwinds, including:

	●	Regulatory complexity and taxation. Federal law, including the prohibition on ordinary business deductions under Section 280E of the Code, continues to materially limit profitability for operators.

	●	Capital constraints. High interest rates and the illegality of the cannabis industry under federal law have restricted affordable access to debt and equity financing.

	●	Competition from illicit markets. Lower-cost, unregulated alternatives continue to compete with licensed operators.

	●	Limited banking access. The majority of U.S. financial institutions remain unwilling to serve CRBs due to federal illegality and perceived compliance burdens.

At the federal level, policy changes remain a potential catalyst. Proposed legislation, such as the Secure and Fair Enforcement (SAFER) Banking Act (the “SAFER Banking Act”), along with ongoing discussion around rescheduling or descheduling cannabis, could materially expand the availability of banking and financial services for CRBs. The timing and scope of any such changes remain uncertain.

Market Dynamics and Opportunity

We believe the demand for reliable, compliant financial services for CRBs is growing in parallel with the broader cannabis industry. Although a small number of financial institutions currently provide services to CRBs, the market remains highly fragmented and underpenetrated. Building compliance frameworks capable of serving the industry requires substantial investment, specialized expertise, and reputational tolerance. As a result, we believe many institutions will continue to seek outsourced solutions.

Our established track record, industry-specific expertise, and reputation for compliance position us to serve this need. Over the past decade, our team has developed relationships across regulators, financial institutions, and operators, and we are frequently called upon to share insights on cannabis banking in industry conferences, webinars, and podcasts. Members of our leadership team have participated in public forums with state and federal officials, regulators, law enforcement, and financial services providers to address challenges and best practices in cannabis banking. We believe this visibility reinforces our credibility and strengthens our ability to enter new and emerging markets.

The combination of strong projected industry growth, limited access to traditional financial services, and the increasing demand for compliant banking solutions creates a significant long-term market opportunity. We believe our tested platform, compliance expertise, and reputation uniquely position us to capitalize on these industry dynamics and to become a leading provider of financial services to CRBs.

The cannabis industry has been unfavorably impacted by a variety of factors, including competitive illicit alternatives in the market, high inflation unfavorably impacting consumer spending, a challenging tax environment that limits federal deductibility of certain operating costs, and high interest rates unfavorably impacting the ability of industry participants to find affordable capital. We expect this rapid growth to favorably impact our total available market offset in part by increased competition from financial institutions that choose to build rather than outsource their compliance programs. Having created a reliable reputation and network over the past ten years, the Company is well positioned to assist growing markets. Our team is often called upon to work with state and federal officials, regulators, law enforcement and financial service providers to share experience and knowledge on navigating access to financial services. We believe this expertise garners trust that will allow us to enter new markets with greater ease.

There is a great deal of discussion regarding the SAFE Banking Act of 2021 (the “SAFE Banking Act”) and the SAFER Banking Act, the re-scheduling or de-scheduling of cannabis, and even federal legalization of intoxicating cannabis products. We monitor these matters closely through our affiliation with various lobbying groups. Each of these matters, while separate, could individually and collectively materially and favorably impact the cannabis industry. Management believes that anything that favorably impacts the cannabis industry will in turn favorably impact the Company. Today, there are several federally legal businesses that are debanked or otherwise deemed too risky for most financial institutions. The cannabis industry will likely be similarly deemed too risky for most financial institutions. It will take time, capital, and reputational tolerance for competing financial institutions to build a compliance solution for themselves, while we offer financial institutions the ability to leverage the tested and refined platform that the Company operates today.

We believe there is currently a relatively small subset of the financial services industry willing to provide a full suite of financial services to CRBs and these providers are extremely fragmented. The Company has been a front runner in assisting financial institutions that desire to provide reliable financial services to the cannabis industry and is well known amongst the leaders in the cannabis financial services arena. Going forward, we feel this positions the Company well to further optimize market position and become the leading provider of access to financial services for the cannabis industry.

Business Strategy

We provide compliant financial services solutions to CRBs through relationships with partner financial institutions. Our platform enables those institutions to offer depository, payment, and lending services to CRBs while maintaining compliance with applicable regulatory requirements. Fees are primarily generated from account services, transaction activity, and lending-related services.

Our strategy is focused on responsibly scaling our business by:

	●	Expanding relationships with CRBs and partner financial institutions to increase the number of clients utilizing our platform and diversify our funding sources.

	●	Enhancing lending capabilities to support the financing needs of CRBs in partnership with financial institutions and other capital providers.

	●	Developing additional products and services that improve efficiency, strengthen compliance, and provide value-added solutions to our clients.

	●	Investing in technology and operational efficiency to support growth, reduce costs, and maintain high standards of regulatory compliance.

	●	Attracting and retaining experienced personnel with both financial services and cannabis industry expertise to deliver high-quality client service.

We believe our ability to grow and retain our CRB client base is closely tied to our ability to provide reliable access to banking and lending services in a highly regulated industry. Our business model depends on maintaining strong relationships with financial institution partners, preserving a reputation for compliance and trust, and continuing to expand the breadth of services we can offer to clients.

Nasdaq Listing Compliance

Amended and Restated CAA with PCCU

On December 31, 2024, we entered into an Amended and Restated Commercial Alliance Agreement with PCCU (the “Amended CAA”), which governs our ongoing customer relationship. The Amended CAA extends the term of the agreement through December 31, 2028, with automatic two-year renewals unless either party provides at least twelve months’ advance notice of non-renewal.

Under the Amended CAA:

	●	We are no longer required to indemnify PCCU for loan-related losses.

	●	Our fee obligations are based on a fixed asset hosting fee tied to the average daily balance of account relationships generated through our platform.

	●	We are entitled to all investment income on funds invested on our behalf by PCCU.

	●	Interest income on loans is determined under a loan yield allocation formula that references U.S. Treasury rates and a risk-rating methodology.

	●	We are subject to certain fees and interest charges if agreed Loan-to-Share Ratio thresholds are not maintained.

	●	The prior per-account servicing, investment hosting, and loan servicing fees have been eliminated and replaced with a single fixed 1% asset hosting fee tied to the average daily balance of account relationships generated through our platform. This model aligns servicing costs with account balances.

While the prior management expected the Amended CAA to simplify our fee structure and remove the indemnification liability, the contract has been unprofitable year to date in 2025 despite significant cost cuts.

Amendment to Senior Secured Promissory Note (the “Senior Secured Promissory Note”) and Deferral Agreement with PCCU

On March 1, 2025, we entered into an Amended and Restated Senior Secured Promissory Note with PCCU (the “Amended PCCU Note”), replacing the Company’s prior senior secured promissory note dated March 29, 2023. The Amended PCCU Note provides for a principal balance of approximately $10.7 million, accruing interest at an annual rate of 4.25%. Under its terms, we will make interest-only payments through January 5, 2027, followed by combined principal and interest payments through the maturity date of October 5, 2030.

The Amended PCCU Note continues to grant PCCU a first-priority security interest in the Company’s assets and requires compliance with a debt service coverage ratio covenant of 1.4 to 1.0, tested annually. While the Amended PCCU provides flexibility through an initial period of interest-only payments, any failure to meet our repayment obligations or covenant requirements could result in an event of default. In such event, PCCU would be entitled to exercise remedies under the security agreement, including acceleration of the debt, which could materially and adversely affect our operations and financial position.

Involvement in Certain Legal Proceedings

To our knowledge, none of our current directors or executive officers has, during the past ten years:

	●	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

	●	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

	●	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

	●	been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

	●	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

	●	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Except as set forth in our discussion in “Certain Relationships and Related Party Transactions,” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

On October 17, 2024, the Company filed a declaratory judgment action in the Denver County District Court, Case No. 2024CV33187, against Daniel Roda, Gregory W. Ellis, and James R. Carroll (the “Defendants”), each of whom is a former shareholder of Rockview Digital Solutions, Inc. (d/b/a Abaca) (“Abaca”), which the Company acquired in October 2022. The action relates to a $3.0 million contingent merger consideration payment (the “Merger Payment”) due under the merger agreement by and between the Company and the other parties named therein and its subsequent amendments (the “Merger Agreement”). The Company initiated litigation to determine the appropriate party authorized to receive the payment following internal disputes among the former Abaca shareholders.

On November 21, 2024, the Company deposited the $3.0 million payment into the registry of the Denver County District Court in accordance with a court-approved motion, and the funds remain held by the court pending resolution of the dispute.

On December 19, 2024, the Defendants filed a counterclaim against the Company alleging breach of contract and related causes of action, and a third-party claim was asserted against a member of the Company’s board of directors. As of the date of these financial statements, no trial date has been set, and the case remains in the pleading stage.

On January 16, 2025, the Company filed a motion to dismiss all counterclaims filed against the Company.

On April 18, 2025, the District Court for the City and County of Denver, Colorado (i) dismissed Gregory W. Ellis as a counter-plaintiff and third-party plaintiff because Mr. Ellis lacked standing to bring any claim and (ii) denied a third-party’s request to intervene in the litigation. The remainder of the case will proceed to the discovery phase of litigation.

The Company is vigorously defending against the counterclaims and continues to monitor the proceedings and potential financial exposure. Based on the current status of the litigation, and in consultation with legal counsel, the Company has determined that no accrual for loss is required under ASC 450-20 as of June 30, 2025.

The Company made a settlement offer to a former employee related to certain employment matters and accrued $300,000 as of March 31, 2025. The settlement offer was accepted and finalized in the third quarter of 2025. Under the terms of the agreement the Company will pay $100,000 in cash over a 12-month period beginning in the third quarter of 2025. In addition, the Company issued 89,308 shares of Common Stock to the former employee, representing a $200,000 portion of the total settlement. Accordingly, in the third quarter of 2025, the Company expects to reduce the accrued liability by $200,000 to reflect the settlement of that portion through equity issuance.

Except as set forth above, we are not currently a party to any legal proceedings, the adverse outcome of which, individually or in the aggregate, we believe will have a material adverse effect on our business, financial condition or operating results.

Sales and Marketing

Our sales and marketing efforts are focused on expanding brand visibility, acquiring new CRB clients, and strengthening relationships with existing clients and financial institutions. Because the industry remains highly regulated and fragmented, our strategy emphasizes trust, compliance, and credibility as key differentiators.

Our approach is centered on:

	●	Brand Development and Market Positioning. We are refreshing our brand to reflect our role as a fintech-driven platform serving CRBs and to support broader client engagement.

	●	Visibility and Thought Leadership. We participate in select industry events and forums and maintain public and investor communications designed to enhance credibility and awareness of our services.

	●	Digital Presence. We maintain a professional online presence and use digital channels to ensure accessibility to prospective clients and financial institution partners.

	●	Client and Financial Institution Relationships. We seek to grow by adding new financial institution partners and by strengthening retention through personalized client engagement and reliable delivery of services.

	●	Value-Added Partner Network. We are developing a cannabis-friendly partner network designed to deliver additional operational and financial solutions to CRBs. We believe this enhances “stickiness” by embedding our platform more deeply into client operations.

	●	Strategic Partnerships. We work with referral partners and service providers to broaden distribution and enhance the value we deliver to clients and financial institution partners.

We believe that this targeted, relationship-driven approach supports the acquisition of new CRBs and financial institutions, deepens client loyalty through value-added services, and positions the Company as a trusted provider of compliant financial services in the cannabis sector.

Competition

Our business model is based on providing compliance and financial services solutions to financial institutions that choose to serve CRBs. Accordingly, we do not generally compete directly with other financial institutions for CRB banking relationships. Instead, our financial institution customers face competition from local and regional banks, credit unions, and larger financial institutions that may seek to enter the cannabis banking market. These competitors often have significantly greater financial and operational resources, broader product lines, and wider distribution networks.

To participate in the cannabis banking market, financial institutions must maintain specialized compliance programs that satisfy regulatory expectations. Developing and sustaining such programs internally can be costly and resource intensive. As a result, financial institutions must decide whether to build these capabilities in-house or to outsource certain functions to providers such as the Company. Our value proposition is based our plan for offering a tested and scalable compliance platform that enables financial institutions to serve CRBs without assuming the full burden of creating and operating their own compliance infrastructure.

In addition, there are ancillary technology providers that market compliance and monitoring solutions to financial institutions, which may serve as an alternative to outsourcing arrangements with us. These solutions can support institutions that elect to manage cannabis banking compliance programs internally.

Key competitive factors in our market include compliance expertise, reliability of services, cost efficiency, industry reputation, and the ability to adapt to evolving regulatory requirements. We believe our established track record, specialized focus, and longstanding relationships position us to compete effectively, although there can be no assurance that financial institutions will continue to prefer outsourcing over in-house solutions.

Intellectual Property

As we do not have any registered intellectual property, we currently rely on confidentiality and non-disclosure agreements with our employees and others to protect our proprietary rights. Despite these efforts to protect ourselves from infringement or misappropriation of our intellectual property rights, unauthorized parties may attempt to copy or otherwise obtain and use our intellectual property in violation of our rights. In the event of a successful claim of infringement against us, or our failure or inability to develop non-infringing intellectual property or license the infringed or similar intellectual property on a timely basis, our business could be harmed.

Seasonality

We do not experience material seasonality in our revenues. Our income is generated primarily from loan interest, loan-related fees, account activity fees, and interest earned on deposits held with partner financial institutions. Loan and fee income have historically been relatively stable throughout the year, as demand for compliant banking and credit among cannabis-related businesses has generally been consistent.

Interest income from deposits held with partner financial institutions may fluctuate depending on the level of client deposits and prevailing interest rates. However, these variations are driven by balance and rate dynamics rather than predictable seasonal patterns.

Overall, we do not believe seasonality has a material impact on our results of operations.

Investments

Our investment policy requires that investment decisions be made based on, but not limited to, the following four principles: investment quality, liquidity requirements, interest-rate risk sensitivity and estimated return on investment. These characteristics are pillars of our investment decision-making process, which seeks to minimize exposure to risks while providing a reasonable yield and liquidity.

Regulations and Legislation

Our operations are subject to an evolving regulatory framework that combines banking, financial services, cannabis, and hemp. While cannabis remains a controlled substance under federal law, many states have legalized cannabis for medical or adult use, creating a divergence between federal and state regimes. This conflict has contributed to limited access to banking and capital for CRBs, which in turn creates demand for the services we provide to financial institutions. We are not a depository institution and are not directly regulated as a bank, and as such our business model depends on maintaining relationships with partner financial institutions that are subject to federal and state banking laws, including BSA and AML requirements. Serving CRBs requires heightened compliance obligations under these laws, which many financial institutions are unwilling or unable to undertake without support.

Most financial institutions remain hesitant to directly bank CRBs due to:

	●	The continued classification of cannabis as a Schedule I controlled substance under federal law, creating a conflict with state legalization regimes.

	●	The absence of a federal “safe harbor” for banks serving CRBs, leaving officers and directors potentially exposed.

	●	The extensive BSA/AML obligations, which require costly monitoring, validation, and reporting processes.

	●	The 2014 FinCEN Guidance, which provides a framework for banking CRBs but is subject to interpretation and enforcement risk.

	●	The resource-intensive training and specialized compliance systems required to onboard, monitor, and validate cannabis-related accounts.

These barriers create the opportunity for our platform, which allows financial institutions to serve CRBs while outsourcing many of the compliance burdens to us.

At the federal level, multiple proposals could alter the regulatory environment for both financial institutions and CRBs:

	●	STATES 2.0 Act would amend the Controlled Substances Act (the “CSA”) to provide protections for financial institutions and insurers serving state-legal cannabis businesses, reducing uncertainty for banks that choose to serve CRBs, while providing for interstate commerce and tax relief to CRBs.

	●	The SAFER Banking Act, which evolved from the SAFE Banking Act, would prohibit federal regulators from penalizing financial institutions for serving legal CRBs. While it has bipartisan support, its ultimate passage remains uncertain.

	●	The Department of Health and Human Services has recommended, and federal policymakers have publicly discussed, moving cannabis from Schedule I to Schedule III. Rescheduling would not legalize cannabis federally but could eliminate the tax impact of Section 280E of the Code, thereby improving CRB cash flow and potentially increasing deposit activity. Reports have also circulated regarding a willingness by policymakers, including President Trump, to support this rescheduling.

	●	Federal and state legislators are increasingly focused on intoxicating hemp-derived products (such as delta-8 THC and THCA) that fall outside the framework of the Agriculture Improvement Act of 2018. Proposed federal reforms and recent state actions seek to restrict or ban these products, which could consolidate the regulated cannabis market and shift activity into more strictly monitored channels.

Even if federal legislation such as the SAFER Banking Act or STATES 2.0 Act is enacted, we believe many financial institutions will remain cautious about directly banking CRBs due to the intensive compliance requirements, reputational considerations, and operational risk. As a result, the need for outsourced compliance solutions is expected to persist.

Rescheduling or other reforms may expand the overall market opportunity for CRBs, which could increase banking and lending activity across our partner financial institutions. However, legislative and regulatory uncertainty remains, and any changes could materially impact the pace and scope of industry growth, the willingness of financial institutions to participate, and the demand for our services.

Key Regulatory Challenges

Cannabis remains a controlled substance under the CSA. The conflict between federal law and state legalization regimes creates uncertainty for financial institutions and financial service providers. Although the 2013 Guidance Regarding Marijuana Enforcement from the U.S. Department of Justice (the “2013 Cole Memorandum”) was rescinded in 2018, federal prosecutors retain prosecutorial discretion, and the potential for enforcement actions remains. Assets connected to cannabis businesses may be subject to seizure, and financial institutions that choose to serve the industry could face regulatory or reputational risks.

The FinCEN Guidance outlines how financial institutions might provide services to cannabis-related businesses in compliance with the BSA and related obligations. However, the FinCEN Guidance is not a safe harbor and has led to differing interpretations and inconsistent application. Many financial institutions remain unwilling to dedicate the resources necessary to build and maintain such programs, given the risk of non-compliance and the significant penalties that could result.

Key regulatory challenges include, but are not limited to:

	●	Conflict Between Federal and State Law. Cannabis is classified as a Schedule I substance under the CSA. This creates the possibility of federal enforcement actions and asset seizures, even for state-legal operators, and raises reputational and compliance risks for financial institutions.

	●	Uncertain Federal Guidance. The 2013 Cole Memorandum, which deprioritized federal prosecution of state-legal cannabis activity, was rescinded in 2018, leaving enforcement discretion with federal prosecutors. The FinCEN Guidance remains in effect and provides a framework for financial institutions to serve CRBs in compliance with the BSA. However, the Guidance does not provide a safe harbor, and interpretations vary.

	●	BSA/AML Compliance Burden. The BSA requires financial institutions to implement extensive AML and monitoring programs. Serving CRBs adds complexity because many businesses operate through multi-entity structures, require detailed source-of-funds reviews, and generate higher volumes of cash transactions. Regulatory penalties for BSA violations can be significant, contributing to institutional reluctance to serve CRBs.

	●	Regulatory Uncertainty. Ongoing divergence between federal and state law, combined with the absence of a federal safe harbor, has left most financial institutions unwilling to develop in-house cannabis banking programs. This uncertainty creates the market opportunity for outsourced compliance solutions such as those provided by the Company.

Competitive Landscape and Fintech Models

Some unregulated or lightly regulated fintech providers have entered the cannabis financial services market. These companies are not subject to the same supervisory regimes as chartered financial institutions but must still navigate BSA and payment-system requirements. We believe competition remains limited given the high compliance burden and the likelihood that regulators will increase scrutiny of fintech providers over time.

Our Approach

We design our services to align with the requirements of the BSA and the FinCEN Guidance. Our onboarding, monitoring, and reporting processes are intended to assist financial institution partners in meeting their regulatory obligations while providing CRBs access to compliant banking services. We employ policies and procedures that are reviewed regularly, supported by employee training, and adapted as regulations evolve. In addition, we have developed proprietary software that enables financial institutions to manage customer onboarding, due diligence, and ongoing compliance monitoring.

Concentrations

Currently, substantially all deposits are maintained at PCCU, and all transmissions of funds to or from these deposit accounts are handled directly by PCCU. We intend to expand our relationships with other financial institutions that similarly hold the CRB deposit accounts and handle transmissions of funds to and from the accounts. Although we do not directly hold the deposit accounts, we believe that account retention is a measure of our ability to efficiently and compliantly onboard, validate and monitor CRB accounts. The largest ten CRB accounts held at PCCU for the period ended June 30, 2025, represented less than 5% of fee income from onboarded deposits, which is currently our largest source of revenue. Building upon the existing foundation, we believe the Company can continue to grow the financial institution customers for which it onboards deposits and related fee income at a strong pace. In addition, we plan to add access to additional financial services to the Company’s platform, such as merchant processing, custodial relationships, insurance products, broker/dealer services, payment processing services and investment services, although in each case these services would be provided by a third party holding necessary licenses.

Lending Activities

We currently do not deploy our own cash to originate loans. Instead, we facilitate lending through partner financial institutions. While we may evaluate opportunities to directly extend credit in the future, our lending activity today is limited to loan origination, servicing, and compliance support on behalf of our financial institution partners.

Employees

As of September 24, 2025, we had thirty-five full time employees, and one part time employee. None of our employees are represented by a labor union or covered by a collective bargaining agreement.

Human Capital Management

Our human capital objectives include attracting, retaining, and developing employees with expertise in financial services, compliance, and technology, which are critical to serving our financial institution customers and CRBs in a highly regulated environment. We seek to achieve these objectives through programs focused on:

	●	Compensation and Benefits. We offer competitive pay and benefits intended to support employee well-being and retention.

	●	Training and Development. We provide ongoing training, including compliance and regulatory education, to ensure employees are prepared to meet client and regulatory expectations.

	●	Workplace Culture and Customer Engagement. We promote a workplace culture based on collaboration, integrity, and customer focus, with an emphasis on regulatory compliance and sound risk management.

We believe that maintaining a workforce with the appropriate skills, regulatory experience, and cultural alignment is essential to our ability to execute our business strategy and to support the growth of our platform.

Corporate History

We were founded in 2015 to address the lack of reliable and compliant financial services available to CRBs in Colorado. At that time, many financial institutions were unwilling to serve the industry due to regulatory uncertainty and compliance burdens. Drawing on regulatory and banking experience, we developed a compliance program designed to assist financial institutions in providing services to CRBs while addressing BSA and AML obligations.

Our program provides onboarding, monitoring, and validation services to financial institutions seeking to offer traditional banking products to licensed cannabis, hemp, and CBD operators, as well as ancillary businesses that provide goods and services to the cannabis industry. As cannabis legalization has expanded beyond Colorado, our operations have grown to support financial institutions that provide services in 41 states and territories where cannabis is permitted for medical or adult use.

Our principal executive offices are located at 1523 Cole Boulevard, Suite 250, Golden, Colorado 80401, and our telephone number is (303) 431-3435. Our website is www.shfinancial.org; information on our website is not incorporated by reference into this prospectus.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

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 prospectus 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.

Overview

Founded in 2015 by PCCU, SHF’s mission is to provide access to reliable and compliant financial services for the legal cannabis industry. Through that mission and as an early leader with over ten years of experience, SHF is a leading provider of access to reliable and compliance driven banking, lending and other financial services to financial institutions desiring to provide those services to the cannabis industry.

Through our proprietary platform and on a multi-state level, SHF provides access to the following banking related services through PCCU and other financial institutions:

	●	Business checking and savings accounts;

	●	Cash management accounts;

	●	Savings and investment options;

	●	Commercial lending;

	●	Courier services (via third-party relationships);

	●	Remote deposit services;

	●	ACH payments and origination; and

	●	Wire payments.

Clients 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 less punitive terms than the current industry average. Our financial institution clients offer loan options including senior secured debt and operating lines of debt. Collateral types include real estate, equipment, and other business assets. We also provide access to lending options for ancillary service providers serving the cannabis industry as these businesses also can have difficulty finding reliable financial services.

To ensure access to consistent and dependable banking access to CRBs, we provide our compliance, validation and monitoring services to financial institutions in a compliance driven environment ensuring strict adherence to the BSA and FinCEN guidance and related anti money laundering provisions. Since inception, the Company has assisted in the processing of more than $25.6 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.

In strategically selected geographic areas, the Company has licensed its proprietary software and 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:

	●	Initial customer due diligence – Know Your Customer;

	●	Customer application management;

	●	Program management support;

	●	Compliance monitoring; and

	●	Regulatory exam assistance.

Key Metrics

In addition to the measures presented in our consolidated financial statements, our management regularly monitors certain measures in the operation of our business. These key metrics are discussed below.

Non-GAAP Financial Measures

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.

Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) and Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net loss before taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net loss (the most directly comparable GAAP financial measure) to EBITDA and from EBITDA to Adjusted EBITDA.

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.

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:

	●	although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and both EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

	●	EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and

	●	EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available to us.

Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.

A reconciliation of net loss to non-GAAP EBITDA and Adjusted EBITDA is as follows:

	Year Ended December 31,
	2024			2023
Net loss	$	(48,319,475	)	$	(17,279,847	)
Interest expense		533,390			1,094,736
Depreciation and amortization		711,929			1,373,707
Provision (benefit) for income taxes		43,859,686			(1,829,701	)
EBITDA		(3,214,470	)		(16,641,105	)

Other adjustments –
Credit loss (benefit) expense		(1,393,131	)		290,857
Change in the fair value of warrants and forward purchase derivatives		(2,803,640	)		1,853,920
Change in the fair value of deferred consideration		(361,449	)		(4,570,157	)
Deferred loan origination fees and costs		(63,275	)		27,271
Stock based compensation		1,575,952			3,739,156
Goodwill and long-lived intangible assets impairment		9,148,881			18,907,739
Adjusted EBITDA	$	2,888,868		$	3,607,681

For the year ending December 31, 2024, our adjusted EBITDA declined primarily due to a decrease in account fee income resulting from a reduction in the number of accounts, as well as higher professional expenses, particularly legal fees associated with ongoing litigation. These factors contributing to our financial performance are further discussed in “––Discussion of our Results of Operations —2024 Compared to 2023 (Year Ended December 31)” below. Other adjustments include estimated future credit losses not yet realized, including amounts indemnified to PCCU for loans funded by them. The Company entered into the PCCU CAA with PCCU, under which it agreed to indemnify PCCU for claims related to CRB activities, including loan default-related losses for loans funded by PCCU. This agreement was subsequently amended and restated, effective December 31, 2024, to eliminate the Company’s indemnification liability. Deferred loan origination fees and costs represent the change in net deferred loan origination fees and costs. When included with a new loan origination, we receive an upfront loan origination fee in conjunction with new loans funded by our financial institution partners and incur costs associated with originating a specific loan. For accounting purposes, the cash received for loan origination fees and costs is initially deferred and recognized as interest income utilizing the interest method.

Other Metrics

For our business operations, we monitor the following key metrics:

Total account balances, number of accounts and average account balances

Our ability to originate loans for PCCU is dependent on the size of our managed deposit base and number of active accounts. In addition, fees are generated based on open accounts and account activity. We monitor account activity including deposits, withdrawals and ending account balance daily. Total account balances represent the balance of onboarded and monitored deposits on hand at financial institution clients at period end. Average account balance represents the total account balance divided by the number of accounts at the period end.

Account fees per average active accounts managed

Currently a significant amount of our fees is generated from account openings, 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.

Year Ended December 31,		2024		2023		Change			Change (%)
Average monthly ending deposit balance	(1)	$	117,847,512		204,923,090		(87,075,578	)		(42.49	)%
Account fees	(2)	$	5,073,186		7,735,582		(2,662,396	)		(34.42	)%
Average active accounts	(3)		757		932		(175	)		(18.78	)%
Average account balance	(4)	$	155,728		219,835		(64,107	)		(29.16	)%
Average fees per account	(4)	$	6,704		8,298		(1,594	)		(19.21	)%

	(1)	Represents the average of monthly ending account balances
	(2)	Reported account activity fee revenue
	(3)	Represents the average of monthly ending active accounts
	(4)	Refer to the below section “––Discussion of our Results of Operations —2024 Compared to 2023 (Year Ended December 31)” for additional discussion.

For the year ended December 31, 2024, there was a decline in the average number of accounts and associated fees compared to the prior period, mainly due to a reduction in clientele following the termination of the agreement with the Central Bank of Arkansas which was acquired in 2022 as part of the acquisition of Abaca. However, we anticipate a reversal of this trend as we focus on our lending program, which generally requires borrowers to maintain deposits with financial institutions with which we have established relationships.

We are focused on expanding and enhancing our lending platform. As this part of our business scales, we will track key metrics, such as average loan balance, average repayment term, effective interest rate, loan status, and other relevant indicators, to measure growth and performance.

Components of our Results of Operations

Revenue

The Company generates interest and fee income through providing a variety of services to our financial institutions to facilitate its banking services to CRBs including, among other things, BSA and other regulatory compliance and reporting, onboarding, responding to account inquiries, responding to client service inquiries relating to CRB deposit accounts held at financial institution customers, and sourcing and originating loans. In addition, the Company provides these similar services and outsourced support to other financial institutions providing banking to the cannabis industry.

Operating Expenses

Operating expenses consist of compensation and benefits, professional services, rent expense, credit loss (benefit) expense and other general and administrative expenses.

Compensation and benefits consist of employee wages and associated benefits while professional services consist of legal, general consulting and accounting fees.

The Company reports provisions for credit losses on internally funded and indemnified loans. Prior to December 31, 2024, the Company indemnified PCCU against losses on sourced loans. With effect from the Amended CAA, the indemnification obligation ceased on December 31, 2024.

Other general and administrative expenses consist of various miscellaneous items including account hosting fees, insurance expense, advertising and marketing, travel meals and entertainment and other office and operating expense.

Discussion of our Results of Operations —2024 Compared to 2023 (Year Ended December 31)

Revenue

Year Ended December 31,	2024		2023		Change ($)			Change (%)
Account fee income	$	6,447,201	$	8,614,945	$	(2,167,744	)		(25.16	)%
Safe Harbor Program income		76,920		130,688		(53,768	)		(41.14	)%
Investment income		2,092,863		5,844,836		(3,751,973	)		(64.19	)%
Loan interest income		6,625,576		2,972,434		3,653,142			122.90	%
Total Revenue	$	15,242,560	$	17,562,903	$	(2,320,343	)		(13.21	)%

Account fee income consists of deposit account fees, activity fees and onboarding income. We receive 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. The decrease in account fee income was primarily attributable to the previously disclosed reduction in the number of accounts and the average monthly ending deposit balance.

The reconciliation of account fee income and account hosting fees are as follows:

Account fee income:

Year Ended December 31,	2024		2023		Change ($)			Change (%)
PCCU	$	4,565,545	$	5,150,397	$	(584,852	)		(11.36	)%
Central Bank		1,190,700		3,193,067		(2,002,367	)		(62.71	)%
Pacific Valley Bank		46,989		21,799		25,190			115.56	%
Five Star Bank		490,117		78,864		411,253			521.47	%
Others		153,850		170,818		(16,968	)		(9.93	)%
Total account fee income	$	6,447,201	$	8,614,945	$	(2,167,744	)		(25.16	)%

Account hosting fees:

Year Ended December 31,	2024		2023		Change ($)			Change (%)
PCCU	$	452,371	$	529,208	$	(76,837	)		(14.52	)%
Central Bank		-		878,430		(878,430	)		(100.00	)%
Pacific Valley Bank		19,460		8,720		10,740			123.17	%
Five Star Bank		72,963		11,864		61,099			514.99	%
Total account hosting fees	$	544,794	$	1,428,222	$	(883,428	)		(61.86	)%

Account fees, net of hosting fees, were $5,902,407 and $7,186,723 for December 31, 2024, and December 31, 2023, respectively, reflecting an 8% margin improvement on reduced fees.

The Company provides similar account services and outsourced support to other financial institutions that offer banking services to the cannabis industry. These services are provided under the Safe Harbor Master Program Agreement.

Investment income

We have agreements with PCCU and Five Star Bank, where our financial institution clients pay us interest on daily account balances as per the rates outlined in the agreements.

Until March 29, 2023, we operated under a Loan Servicing Agreement with PCCU, where PCCU reported the loan balances on its financial statements. This agreement was later superseded by the PCCU CAA, under which we paid a hosting fee equivalent to 25% of the investment income derived from PCCU-related funds. For the year ended December 31, 2024, investment income associated with PCCU totaled $1,903,422, with the Company incurring $457,105 in investment hosting fees. In comparison, for the year ended December 31, 2023, PCCU’s contribution to investment income was $5,803,114, resulting in $1,445,517 in investment hosting fees. These expenses were recorded under “General and Administrative Expenses” in the Consolidated Statements of Operations in our financial statements.

The Amended CAA eliminates the 25% investment hosting fees. Under the Amended CAA, the Company is entitled to receive 100% of the investment income. For additional details, please refer to “Business––Amended and Restated CAA with PCCU.”

Loan interest income

For the year ended December 31, 2024, the Company serviced twenty-four loans, compared to twelve loans in the year ended December 31, 2023. In 2024, the Company recognized $6,254,175 in loan interest income attributable to PCCU activities. Related expenses for this income included $143,217 in loan servicing fees, in compliance with both the Loan Servicing Agreement and the PCCU CAA. In 2023, loan interest income from PCCU operations amounted to $2,883,192, with associated loan servicing fees totaling $81,577, pursuant to the same agreements. These expenses were also categorized under “General and Administrative Expenses” in the Consolidated Statements of Operations in our financial statements.

Under the Amended CAA, the Company’s loan interest income will be determined by a new loan yield allocation formula. This formula incorporates the Constant Maturity US Treasury Rate and a proprietary risk rating to determine the fee split for each loan. For additional details, please refer to “Business––Amended and Restated CAA with PCCU.”

Operating expenses

Year Ended December 31,	2024			2023		Change ($)			Change (%)
Compensation and employee benefits	$	7,783,331		$	10,334,212	$	(2,550,881	)		(24.68	)%
General and administrative expenses		4,018,094			6,587,392		(2,569,298	)		(39.00	)%
Impairment of goodwill		6,058,000			13,208,276		(7,150,276	)		(54.13	)%
Impairment of long-lived intangible assets		3,090,881			5,699,463		(2,608,582	)		(45.77	)%
Professional services		2,518,394			1,858,137		660,257			35.53	%
Rent expense		258,477			315,615		(57,138	)		(18.10	)%
Credit loss (benefit) expense		(1,393,131	)		290,857		(1,683,988	)		(578.97	)%
Total Operating Expenses	$	22,334,046		$	38,293,952	$	(15,959,906	)		(41.68	)%

In 2024, we reduced expenses by $15,959,906, which is a 41.68% reduction in expenses compared to 2023.

Compensation and employee benefits expenses decreased due to decrease in stock-based compensation and a lower headcount as compared to previous year. Restructuring efforts continue as we optimize our talent portfolio.

General and administrative expenses decreased across various categories including: (i) $988,412 in investment hosting fees as a result of the decrease in investment income, (ii) $900,034 in decreased bank sharing fees due to the decrease in the number of accounts, and (iii) $661,776 in decreased amortization and depreciation.

For the year ended December 31, 2024, the impairment of goodwill and finite-lived intangible assets was recognized as a result of the Company’s annual impairment assessment conducted on December 31, 2024. Similarly, for the year ended December 31, 2023, impairment of goodwill and finite-lived intangible assets was recorded following both the annual impairment assessment on December 31, 2023, and an interim impairment assessment on June 30, 2023. The interim assessment was necessitated by the termination of the Master Services and Revenue Sharing Agreement with the Central Bank, under which the Company provided expertise and intellectual property to cannabis-related businesses, primarily in Arkansas.

The professional services expense increased primarily due to higher legal fees related to ongoing litigation.

The indemnity liability was eliminated from the Balance Sheet as of December 31, 2024, due to the Amended CAA, which led to the complete reversal of the liability under the ‘credit loss (benefit) expense.’ For additional details, please refer to “Business––Amended and Restated CAA with PCCU.”

Other (income) /expenses

Year ended December 31,	2024			2023			Change ($)			Change(%)
Change in the fair value of deferred consideration	$	(361,449	)	$	(4,570,157	)	$	4,208,708			(92.09	)%
Interest expense		533,390			1,094,736			(561,346	)		(51.28	)%
Change in fair value of warrant liabilities		(2,803,638	)		1,853,920			(4,657,558	)		(251.23	)%
	$	(2,631,697	)	$	(1,621,501	)	$	(1,010,196	)		62.30	%

The deferred consideration from the Abaca acquisition is classified as a derivative liability under ASC 815 and recorded at fair value, with periodic adjustments. Its value fluctuates based on factors such as the company’s stock price, market volatility, risk-free interest rates, and amendments to the agreement. For the year ended December 31, 2024, the fair value of deferred consideration decreased by $361,449 from its balance as of December 31, 2023. This reduction was due to a decline in the fair value adjustment on the stock and cash consideration payable to the Abaca shareholders, which affected the fair value of the third anniversary payment.

Interest expense for 2024 primarily consists of interest liability on the Senior Secured Promissory Note. In contrast, interest expense for 2023 primarily comprised interest liabilities on both the Senior Secured Promissory Note and the deferred obligation related to the reverse acquisition of NLIT. For the year ended December 31, 2024, interest expense decreased by $561,346. This reduction was mainly due to the restructuring of the deferred obligation payable related to the reverse acquisition, which was converted into a Senior Secured Promissory Note on March 29, 2023.

The Company has warrant liabilities related to public, private placement, PIPE, and Abaca warrants, which may be settled in cash or stock depending on conditions such as stock price or registration status. These warrants are accounted for as derivative liabilities due to their contingent nature. The liabilities are subject to adjustments based on terms and stock performance. The change in the fair value of warrant liabilities by $2,803,638 from December 31, 2023 was attributable to the decrease in the share price.

Income taxes

Year ended December 31,	2024		2023			Change ($)		Change (%)
Income tax expense (benefit), net	$	43,859,686	$	(1,829,701	)	$	45,689,387		(2,497.10	)%
	$	43,859,686	$	(1,829,701	)	$	45,689,387		(2,497.10	)%

The Company recognized a deferred tax asset, primarily arising from temporary differences between financial accounting and tax reporting related to the reverse acquisition of NLIT, the acquisition of Abaca, and Net Operating Loss carryforwards. For the year ended December 31, 2024, the provision for income taxes increased by $45,689,387 compared to the same period in 2023. This increase was principally due to our determination that it is more likely than not the deferred tax assets cannot be realized.

Financial Condition

Cash and cash equivalents

Cash, cash equivalents totaled $2,324,647 and $4,888,769 as of December 31, 2024 and 2023, respectively.

Cash flows

For the year ended December 31, 2024, the Company generated $430,477 in cash from operations, compared to cash used of $832,144 for the year ended December 31, 2023. This improvement was mainly due to lower operating expenses and the greater number of performing loans at better interest rates than the previous period.

For the year ended December 31, 2024, the Company generated $12,394 in cash from investing activities, compared to cash used of $2,180,448 for the year ended December 31, 2023. The decrease was primarily due to the repayment of loans by customers in the previous period.

For the year ended December 31, 2024, the Company used $3,006,993 in cash for financing activities, compared to $488,834 in the corresponding period of 2023. This was mainly due to the repayments on the senior secured promissory note during 2024.

Contract assets and liabilities

Deferred revenue is primarily related to contract liabilities associated with the Company agreements. As of December 31, 2024, SHF reported a contract asset and liability of $0 and $28,335 respectively and on December 31, 2023, SHF reported a contract asset and liability of $0 and $21,922, respectively.

Liquidity and going concern

Liquidity refers to our ability to meet anticipated cash demands, including servicing debt, funding operations, maintaining assets, and covering other routine business expenses. Our primary cash outflows include debt principal and interest repayments, operating costs, and general business expenditures. The main source of our liquidity continues to be cash inflows generated from operational performance. As of December 31, 2024, the Company does not have significant capital investment commitments.

Going concern

Under ASC 205-40, Presentation of Financial Statements—Going Concern, the Company is responsible for evaluating whether conditions or events raise substantial doubt about its ability to meet future financial obligations within one year of the financial statement issuance date. This evaluation involves two steps: (1) assessing whether conditions or events raise substantial doubt about the Company’s ability to continue as a going concern, and (2) if substantial doubt is raised, evaluating whether the Company has plans to mitigate that doubt. Disclosures are required if substantial doubt exists or if the Company’s plans alleviate the doubt.

While the company reported a net working capital deficit of $983,833 at the end of 2024, this figure includes several non-cash liabilities that do not affect liquidity. After adjusting for these non-cash items and considering the cost of the Amended PCCU Note the adjusted working capital calculation is as follows:

	Amount
Working capital deficit as on December 31, 2024	$	(983,833	)
Forward purchase agreement, net		2,725,359
Third anniversary payment consideration		322,000
Fees paid in 2025 on the Amended PCCU Note		(53,742	)
Adjusted working capital as on December 31, 2024	$	2,009,784

The Company has the following non-cash items on its balance sheet that impact the working capital calculation as reported, thus improving working capital:

●

Obligation under the Forward Purchase Agreement: As of December 31, 2024, the Company had a forward purchase receivable of $4,584,221 and a forward purchase derivative liability of $7,309,580, resulting in a net liability of $2,725,359. This liability can be settled in common stock at the Company’s discretion, offering flexibility to improve working capital, which is management’s plan and intention.

●

Obligation under the Third Anniversary Consideration Payment: As of December 31, 2024, the Company had an outstanding liability of $322,000, payable to the Abaca shareholders. This liability can also be settled in common stock at the Company’s discretion, providing further flexibility to enhance working capital, which is management’s plan and intention.

At December 31, 2024, the Company reported cash of $2,324,647 and a net working capital deficit of $983,833, compared to cash of $4,888,769 and a net working capital deficit of $135,355 as of December 31, 2023. The Company’s ability to continue as a going concern depends on its capacity to generate sufficient liquidity to meet financial obligations, including interest repayments under the senior secured note with PCCU. The Company incurred operating losses of $7,091,486 and $20,731,049 for the years ended December 31, 2024 and 2023, respectively.

The reported working capital deficit and operating losses, before adjustment for non-cash activity raises substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the date these consolidated financial statements are issued.

Management’s Plan Related to Going Concern

To address these concerns, the Company has performed actions, including renegotiating its senior secured loan with PCCU. On January 29, 2025, the Company and PCCU entered into a letter agreement to defer the principal payments for February and March 2025 (the “Deferral Period”). While interest has been repaid during the Deferral Period, the note repayment schedule has been extended by an additional two months.

Furthermore, on March 1, 2025, the Company entered into an Amended PCCU Note with PCCU, modifying the outstanding principal of $10,748,408 with an interest rate of 4.25% per annum. The new repayment schedule includes interest-only payments from March 1, 2025, to January 5, 2027, followed by monthly principal and interest payments from February 5, 2027, to September 5, 2030, with the full loan balance due by October 5, 2030. This two-year deferment of principal has unlocked $6,437,050 in cash flow, significantly improving the Company’s liquidity position.

On December 31, 2024, as a result of the Amended PCCU Note, the Company excluded the short-term obligations of the PCCU Note totaling $2,883,167 from current liabilities and reclassified it as non-current liabilities.

In the first quarter of 2025, the Company commenced utilizing its stock-based compensation as an alternative to cash payments to attract and retain talent, the Board of Directors restructured their compensation towards stock-based compensation, and the Company has continued to reduce costs through lower headcount and other operational spend. The Company has established a budget and monitors its liquidity position and will make adjustments as needed.

Due to the uncertainty surrounding cash flows from operations, the management plans outlined above do not entirely resolve the uncertainty regarding the going concern assumption. As a result, management has determined that there remains substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the date these consolidated financial statements are issued.

If the Company is not able to sustain its present level of operations, it may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, or suspend or curtail planned expansion programs. Any of these actions could materially harm the Company’s business, results of operations and future prospects.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result should the Company not continue as a going concern as a result of this uncertainty.

Litigation

On October 17, 2024, the Company caused a Complaint to be filed in the District Court for the City and County of Denver, Colorado, captioned SHF Holdings, Inc. v. Daniel Roda, Gregory W. Ellis, and James R. Carroll, Case No. 2024CV33187 (Denver County District Court). On November 21, 2024, in connection with the Company’s request, the Company caused the Merger Payment to be deposited into the Denver County District Court’s registry so that it can be distributed in accordance with the terms of the Merger Agreement. The Merger Payment has already been accounted for in the working capital deficit disclosed in the Liquidity and Going Concern section of the Company’s applicable financial statements. On December 19, 2024, Daniel Roda, Gregory W. Ellis, and James R. Carroll caused an answer and counterclaim to be filed in response to the Company Complaint. For additional details, please refer to “Business––Involvement in Certain Legal Proceedings,” as well as the Company’s Current Reports on Form 8-K filed with the SEC on October 18, 2024 and December 19, 2024.

Critical Accounting Estimates

Our consolidated financial statements and accompanying notes are prepared in accordance with GAAP. Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as disclosure of contingent assets and liabilities. An appreciation of our critical accounting policies is necessary to understand our financial results. In some cases, we could reasonably use different accounting policies and estimates, and changes in our estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates, and our financial condition or results of operations could be affected. We base our estimates on our experience and other assumptions that we believe are reasonable, and we evaluate these estimates on an ongoing basis. We refer to the following accounting estimates as critical accounting estimates, based on their importance to the financial reporting and potential for changes in future periods:

Revenue recognition

The Company recognizes revenue in accordance with ASC 606, allocating transaction prices to specific services provided within a contract. The primary revenue streams include account fee income, interest income on loans, and investment income, each classified as gross revenue due to the Company’s control over the respective processes. An important element of the estimation process is the determination of a principal-vs-agent (gross-vs-net) relationship.

Account Fee Income

Revenue from account fee income is recognized when the Company fulfills its service obligations, including fees charged for financial services such as account maintenance, transaction processing, and other miscellaneous services. The transaction price is determined based on contractual terms and potential fluctuations in client usage. The Company recognizes revenue on a gross basis, as it is directly responsible for compliance monitoring, account management, and reporting services, and has sole discretion in setting service fees.

Interest Income on Loans

The Company earns revenue from interest on loans, previously determined using a fixed percentage fee structure, where PCCU received a share of interest income from CRB-related loans. Revenue is recognized over the loan period as earned. The Company reports this revenue on a gross basis as a principle, as it is responsible for identifying customers, evaluating and onboarding borrowers, and determining loan interest rates. Additionally, under the PCCU CAA, the Company is required to pay PCCU a loan servicing fee of 0.35% of the outstanding loan balance and monthly service fees, which vary based on account balances above or below $1 million.

Investment Income

Revenue from investment income consists of interest earned on daily deposit balances maintained with financial institutions. The Company’s customer base primarily includes financial institutions serving CRBs, with revenue primarily generated in the United States. Revenue is recognized on a gross basis, as the Company retains first rights over deposit balances and controls their allocation for loan funding, subject to contractual ceiling limits. The Company maintains control over the utilization of deposit balances, reinforcing its principal role in this revenue stream. Additionally, the Company paid PCCU a 25% hosting fee based on investment earnings derived from PCCU-related deposits.

These revenue recognition policies align with ASC 606, ensuring the appropriate allocation of transaction prices to the Company’s distinct performance obligations, including setup fees, ongoing service charges, and financial management activities.

Stock-based compensation

In conjunction with the Equity Incentive Plan, as of December 31, 2024, the Company had granted stock options and restricted stock units which are described in more detail below:

Stock options

The Company awards stock options to incentivize employee ownership and performance, applying ASC 718 for equity-based payments. Options, with a 10-year term with their fair value determined at the grant date, considering either market price or the Black-Scholes model. This model factors in expected option term, stock price volatility (set at 100% due to significant price fluctuations since listing), risk-free interest rates (aligned with U.S. Treasury rates), and an assumed zero dividend yield, given the Company’s history of not paying dividends. The expected option term is derived using the simplified method, averaging the contractual term and vesting period. Compensation cost is recognized over the service period on a straight-line basis, with immediate recognition of forfeitures. Changes in valuation assumptions could significantly alter fair value estimates.

Restricted Stock Units / Restricted Stock Awards

The Company values equity-based payments under ASC 718, using fair value at grant date for stock awards, recognizing expenses over the service period. Fair value is estimated via the market price or Black-Scholes model, considering variables like expected term, stock volatility, risk-free rates, and forfeiture rates. Given the stock’s limited listing period and significant price drop, volatility is presumed at 100%. Risk-free rates align with U.S. Treasury rates matching the awards’ lifespans. The options’ expected term merges the contractual and vesting durations. The Company assumes zero dividend, reflecting the Company’s history and future dividend outlook, impacting the valuation of stock-based compensation. Changes in valuation assumptions could significantly alter fair value estimates.

Forward Purchase Agreement

The Company, under a Forward Purchase Agreement (“FPA”) with Midtown East, which was later reassigned to Verdun Investments LLC and Vellar Opportunity Fund SPV LLC – Series 1, is involved in complex transactions around its Common Stock. Initially, about $0.19 million shares were acquired from the market. Post-business combination, the Company disbursed $39.6 million for these shares and associated costs. The FPA allows for an early termination sale of shares by the assignees, with proceeds above the reset price going to them and the rest to the Company. The final settlement at the maturity date includes a cash or share payment based on the forward price and a maturity cash consideration. In 2022, the reset price adjustment, influenced by the Common Stock’s trading value and preferred share conversions, significantly reduced the FPA receivable from $37.9 million to $4.6 million. No further transactions or value changes were noted in the year end December 31, 2023, and December 31, 2024, maintaining the FPA receivable’s value. The value of the forward purchase agreement could diminish if the Company issues any securities at a price below the reset price of $25.00 per share before the agreement expires.

Forward Purchase Derivative

The Company records the forward purchase derivative from a business combination as per ASC 815, marking it as an asset or liability at fair value, adjusted each reporting period. Fair value adjustments are recognized in the consolidated statement of operations. The Monte-Carlo Simulation, applying Geometric Brownian Motion for stock price projections, was utilized for valuation. In 2022, the company fully accounted for the maximum contractual liability. Throughout 2023 and 2024, there were no notable shifts in risk factors that would impact the values of FPA derivatives. As a result, the valuation established on December 31, 2022 was maintained for the years ended December 31, 2023 and December 31, 2024.

Impairment of Goodwill and Finite-lived intangible assets

The Company assesses goodwill and intangible assets for impairment in accordance with ASC 350 and ASC 360, utilizing various valuation methodologies that involve significant management judgment and estimation.

On December 31, 2024, the Company conducted its annual goodwill impairment test under ASC 350, employing a combination of the Discounted Cash Flow (“DCF”) method and the Guideline Public Company (“GPC”) method. The DCF method estimated the present value of projected future cash flows using an appropriate discount rate, while the GPC method compared key financial metrics against publicly traded comparable companies. As a cross-check, the enterprise value approach was used to validate the results. The impairment determination incorporated an equally weighted enterprise value derived from both the DCF and GPC methods. Since the fair value of the asset group was lower than its carrying amount, the Company recorded a full goodwill impairment charge of $6.06 million.

Additionally, under ASC 360, the Company conducted a recoverability test by comparing the sum of estimated undiscounted future cash flows of the asset group to its carrying amount. As the undiscounted cash flows were lower than the carrying amount, the Company proceeded with a fair value assessment using a DCF analysis. The results indicated that the fair value of the asset group was lower than its carrying amount, leading to impairment charges of $0.05 million for market-related intangible assets, $0.05 million for customer relationships, and $2.99 million for developed technologies.

The determination of impairment is inherently subjective and relies on key assumptions regarding future economic conditions, industry-specific factors, and Company performance. For goodwill and intangible asset impairment testing under ASC 350 and ASC 360, the Company applies critical estimates, including projected future cash flows based on expected revenue growth, market demand, and operational performance, discount rate selection reflecting asset-specific risks and prevailing market conditions, useful life estimates for intangible assets, which impact the recoverability assessment, and customer attrition rates affecting the valuation of customer-related intangible assets. These estimates are influenced by broader macroeconomic factors, including interest rate fluctuations, inflationary pressures, and sector-specific developments. Given the complexity and judgment involved, impairment test results may significantly vary over time due to changes in market conditions, operational performance, technological advancements, or strategic business decisions such as asset sales or discontinued operations. As a result, impairment charges may fluctuate materially across reporting periods, highlighting the sensitivity of these estimates to evolving financial and market dynamics.

Warrants Liability

The Company’s accounting for warrants, including public, private placement, PIPE, and Abaca warrants, constitutes a critical accounting estimate due to the significant judgments and assumptions involved in their valuation and the potential impact on our financial statements. These warrants are recorded at fair value on a recurring basis, requiring the use of observable market data and valuation techniques that involve significant estimates and assumptions. For public warrants, the Company utilizes Level 1 inputs, relying on exchange-traded prices which provide a transparent and observable market valuation. This approach minimizes the level of estimation uncertainty associated with these warrants. Private placement, PIPE and Abaca warrant valuations are based upon internal assessments by the Company, employing Level 3 inputs derived from unobservable inputs. Key assumptions in the valuations include the expected volatility of our stock, exercise price, the fair market value of the underlying Common Stock, the risk-free interest rate, the expected life of the warrants, and the dividend yield. Future variations in these critical assumptions could arise from changes in market conditions, such as fluctuations in the volatility of the Company’s stock, alterations in the risk-free interest rate reflecting broader economic shifts, or adjustments in the expected life of the warrants due to changes in the holders’ exercise behavior. Additionally, regulatory changes or shifts in the market perception of the Company could also necessitate adjustments to these assumptions. Changes in these assumptions could lead to significant variations in the recorded fair value of the warrants, impacting the Company’s financial position and results of operations. The Company closely monitors these assumptions and market conditions to ensure that the warrant valuations accurately reflect their fair market value on reporting date.

Deferred Consideration

The Company’s accounting for the deferred consideration arising from the acquisition of Abaca represents a critical accounting estimate, consistent with ASC 815. This consideration is accounted for as a derivative liability. This approach necessitates the recognition of this obligation on the balance sheet at its fair value, with subsequent adjustments to fair value reflected at each reporting period end. The determination of fair value involves significant judgments and assumptions, particularly in light of the complex terms outlined in the Merger Agreement. The deferred consideration includes cash payments scheduled at various anniversaries of the merger closing, the issuance of Common Stock based on specified conditions, and the introduction of additional consideration and stock warrants as per the latest amendments to the agreement. The fair value assessment of these components is influenced by several factors, including the Company’s stock price, the volatility of the stock, the risk-free interest rate, and the specific terms of the deferred and stock considerations as amended. Future variations in the fair value of this derivative liability could arise from changes in the Company’s stock price, fluctuations in market volatility, alterations in the risk-free interest rate, or changes in the terms of the agreement as negotiated with the Abaca stockholders. Such changes could be prompted by evolving business strategies, market conditions, or regulatory environments that impact the financial and operational aspects of the agreement. These estimates and assumptions are subject to inherent uncertainties and the exercise of management’s judgment. Changes in these critical assumptions could lead to significant adjustments in the recorded fair value of the derivative liability associated with the Abaca acquisition’s deferred consideration. These adjustments could materially impact the Company’s financial position and results of operations, emphasizing the importance of the estimates and assumptions used in the valuation of this complex financial instrument. The Company closely monitors related developments and market conditions to ensure the derivative liability is accurately valued, providing transparency and reliability on the reporting date.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued until such time as those standards apply to private companies. In electing this relief, the JOBS Act does not preclude an EGC from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. SHF has elected to use this relief and will do so until the earlier of the date that it (a) is no longer an emerging growth company or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result of the elected JOBS Act relief, these combined and consolidated financial statements may not be comparable to companies that do not elect JOBS Act relief or choose to early adopt different accounting pronouncements than SHF.

Internal Control Over Financial Reporting

In connection with our management assessment of internal control over financial reporting as of and for the year ended December 31, 2024, the Company has identified material weaknesses within our internal controls over financial reporting. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three Months and Six Months ended June 2025 and 2024––Internal Control Over Financial Reporting” for further discussion of the material weaknesses identified by management during this and subsequent assessments of our internal control over financial reporting.

Related Party Relationships

PCCU is considered a related party as it holds a significant ownership interest in the Company and serves as its position as the Company’s sole lending institution. The agreements between PCCU and the Company are as follows:

Account Servicing Agreement

The Company had an Account Servicing Agreement with PCCU. The Company provides services as per the agreement to CRB accounts at PCCU. In addition to providing the services, the Company assumed the costs associated with the CRB accounts. These costs include employees to manage account onboarding, monitoring and compliance, rent and office expense, insurance and other operating expenses necessary to service these accounts. Under the agreement, PCCU agreed to pay the Company all revenue generated from CRB accounts. Amounts due to the Company were due monthly in arrears and upon receipt of invoice. This agreement was replaced and superseded in its entirety by the PCCU CAA, which was entered into on March 29, 2023, and later amended and restated on December 31, 2024, between PCCU and the Company

Support Services Agreement

On July 1, 2021, SHF entered into a Support Services Agreement with PCCU. In connection with PCCU hosting the depository accounts and the related loans and providing certain infrastructure support, PCCU receives (and SHF pays) a monthly fee per depository account. In addition, 25% of any investment income associated with CRB deposits is paid to PCCU. This agreement was replaced and superseded in its entirety by the PCCU CAA, which was entered into on March 29, 2023, and later amended and restated on December 31, 2024, between PCCU and the Company.

Loan Servicing Agreement

Effective February 11, 2022, the Company entered into a Loan Servicing Agreement with PCCU. The agreement sets forth the application, underwriting and approval process for loans from PCCU to CRB clients and the loan servicing and monitoring responsibilities provided by both PCCU and the Company. PCCU receives a monthly servicing fee at the annual rate of 0.25% of the then-outstanding principal balance of each loan funded and serviced by PCCU. For the loans that are subject to this agreement, the Company originates the loans and performs all compliance analysis, credit analysis of the potential borrower, due diligence and underwriting and all administration, including hiring and incurring the costs of all related personnel or third-party vendors necessary to perform these services. Under the Loan Servicing Agreement, the Company has agreed to indemnify PCCU from all claims related to default-related credit losses as defined in the Loan Servicing Agreement. This agreement was replaced and superseded in its entirety by the PCCU CAA, entered into on March 29, 2023, between PCCU and the Company, which was subsequently amended on December 31, 2024.

Commercial Alliance Agreement

On March 29, 2023, the Company and PCCU entered into the PCCU CAA, which was subsequently amended and restated on December 31, 2024. This agreement set forth the terms and conditions of lending and account-related services, governing the relationship between the Company and PCCU. The PCCU CAA outlined the application, underwriting, loan approval, and foreclosure processes for loans issued by PCCU to CRBs, as well as the loan servicing and monitoring responsibilities of both parties.

Under the PCCU CAA, PCCU had the right to receive monthly fees for managing loans. For SHF-serviced loans (CRB loans provided by PCCU but primarily handled by SHF), a yearly fee of 0.25% of the remaining loan balance was applied. For loans both financed and serviced by PCCU, a yearly fee of 0.35% on the outstanding balance was charged. These fees were calculated based on the average daily balance of each loan for the preceding month.

Additionally, the Company was obligated under the PCCU CAA to indemnify PCCU from certain default-related loan losses, as fully defined in the agreement.

Furthermore, the PCCU CAA outlined certain fees to be paid to the Company for specified account-related services, including cannabis-related income such as loan origination fees, interest income on CRB-related loans, participation fees, servicing fees, investment income, account activity fees, processing fees, and other revenue. These fees were set at $30.96 per account in 2022, $25.32-$27.85 per account in 2023, and $26.08-$28.69 in 2024.

Regarding CRB deposits held at PCCU, investment and interest income earned on these deposits (excluding interest income on loans funded by PCCU) was shared at a ratio of 25% to PCCU and 75% to the Company. Additionally, PCCU maintained its CRB-related deposits to total assets ratio at 60%, unless otherwise dictated by regulatory, regulator, or policy requirements. The initial term of the PCCU CAA was two years, with a one-year automatic renewal, unless either party provided a one hundred twenty-day written notice prior to the end of the term.

Up to the third quarter of 2023, the Company’s investment earnings came solely from interest on deposits at the Federal Reserve Bank, capped at the earnings accrued by PCCU from its reserves. However, in the fourth quarter of 2023, a strategic shift led the Company to adopt the Federal Reserve’s interest rates applied to the daily average balance of SHF customer deposits, with certain exclusions. This method, applied retroactively from the beginning of 2023, resulted in an incremental revenue of $549,000, which was recognized in the fourth quarter. Under the PCCU CAA, the Company was obligated to pay a 25% of the investment earnings as a hosting fee to PCCU based on this income.

On December 31, 2024, the Company and PCCU entered into an Amended CAA, extending the term through December 31, 2028, with automatic two-year renewal periods unless a party provides written notice of non-renewal at least twelve months before the current term expires. See “Business––Amended and Restated CAA with PCCU” for additional discussion of the Amended CAA.

Key modifications under the Amended CAA include:

●

Elimination of Indemnification Obligations: The Company is no longer required to indemnify PCCU for any loan-related losses under either the original or future agreements.

●

Elimination of Prior Fees and Implementation of Asset Hosting Fee Structure: Under the previous agreement, the Company was required to pay various fees to PCCU, including per-account servicing fees, investment hosting fees, and loan servicing fees. The Amended CAA eliminates all these charges and replaces them with a fixed account servicing fee. Under the new structure, the Company will pay a single asset hosting fee which is 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 revised model aligns servicing costs with account balances rather than a flat per-account charge, offering a more scalable and efficient fee structure.

●

Investment Income Entitlement: Under the Amended CAA, the Company received all investment income earned on CRB funds invested on its behalf by PCCU, effectively eliminating the investment hosting fees that were previously payable to PCCU.

●

Loan Yield Allocation Formula: The Company’s interest income will be determined using a loan yield allocation formula incorporating the Constant Maturity US Treasury Rate and a proprietary risk rating formula for determining the fee split.

●

Loan-to-Share Ratio Compliance: The Amended CAA introduces penalties for the Company, if it fails to maintain the agreed Loan-to-Share (“LTS” or “Loan-to-Share”) Ratio. If the LTS Maximum (60%) is exceeded for over 90 days, the Asset Hosting Fee increases from 1.00% to 1.10% of the average daily balance until compliance is restored. If the LTS Minimum (27.5%) is breached, SHF must pay a quarterly adjustment fee based on the shortfall. Additionally, if the LTS Ratio exceeds 100% for 90 days, SHF incurs an interest charge at the Federal Funds Rate + 120 bps, calculated daily and paid monthly.

The schedule below demonstrates the ratio of CRB related loans funded by PCCU to the relative lending limits on December 31, 2024 and December 31, 2023.

	December 31, 2024		December 31, 2023
CRB related deposits	$	116,064,487	$	129,350,998
Capacity at 60%		69,638,692		77,610,599
PCCU net worth		82,400,677		81,087,746
Capacity at 1.3125		108,150,889		106,670,306
Limiting capacity		69,638,692		77,610,599
PCCU loans funded		56,794,446		55,660,039
Amounts available under lines of credit		1,131,708		525,000
Incremental capacity	$	11,712,538	$	21,425,560

The revenue from operation on the statement of operations consists of the following agreement mentioned above for the year ended December 31, 2024, and December 31, 2023:

	Year ended December 31, 2024		Year ended December 31, 2023
Account Servicing Agreement	$	-	$	3,075,458
Commercial Alliance Agreement		12,601,271		10,761,245
Total	$	12,601,271	$	13,836,703

The operating expense on the statement of operations consists of the following agreement mentioned above for the year ended December 31, 2024, and December 31, 2023:

	Year ended December 31, 2024		Year ended December 31, 2023
Support Services Agreement	$	-	$	378,730
Loan Servicing Agreement		-		11,929
Commercial Alliance Agreement		1,052,693		1,665,644
Total	$	1,052,693	$	2,056,303

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

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.

Overview

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the years ended December 31, 2024 and 2023” for a discussion regarding the overview of the Company.

Results of Operations

Revenue

The Company generates interest and fee income through providing a variety of services to our financial institution customers to facilitate their banking services to CRBs including, among other things, the BSA and other regulatory compliance and reporting, marketing new CRBs clients and onboarding, responding to account inquiries, responding to customer service inquiries relating to CRB deposit accounts held at financial institution clients, and sourcing and originating loans. In addition, the Company provides these similar services and outsourced support to other financial institutions providing banking to the cannabis industry.

Operating Expenses

Operating expenses consist of compensation and benefits, professional services, rent expense, account hosting fees, advertising and marketing, and other general and administrative expenses.

Compensation and benefits consist of employee wages and associated benefits while professional services consist of legal, general consulting and accounting fees.

The Company reports provisions for credit losses on internally funded and 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.

Three and Six Months June 30, 2025 As Compared To June 30, 2024

Revenue

The following is the revenue for the three and six months ended June 30, 2025 and June 30, 2024.

Three Months Ended June 30,	2025		2024		Change ($)			Change (%)
Account fee income	$	1,009,730	$	1,681,596	$	(671,866	)		(40.0	)%
Loan interest income		555,971		1,836,092		(1,280,121	)		(69.7	)%
Investment income		260,403		500,617		(240,214	)		(48.0	)%
Safe Harbor Program income		19,230		19,230		-			0.0	%
Total	$	1,845,334	$	4,037,535	$	(2,192,201	)		(54.3	)%

Six Months Ended June 30,	2025		2024		Change ($)			Change (%)
Account fee income	$	2,082,195	$	3,302,590	$	(1,220,395	)		(37.0	)%
Loan interest income		1,096,193		3,472,848		(2,376,655	)		(68.4	)%
Investment income		560,838		1,274,436		(713,598	)		(56.0	)%
Safe Harbor Program income		38,460		38,460		-			0.0	%
Total	$	3,777,686	$	8,088,334	$	(4,310,648	)		(53.3	)%

Account fee income consists of deposit account fees, activity fees and onboarding income. 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. The decrease in the account fee income was primarily attributable to the previously disclosed reduction in the average monthly ending deposit balance.

The following is the account fee income by financial institutions for the three and six months ended June 30, 2025 and June 30, 2024.

Three Months Ended June 30,	2025		2024		Change ($)			Change (%)
PCCU	$	808,848	$	1,241,183	$	(432,335	)		(34.8	)%
Pacific Valley Bank		17,618		12,775		4,843			37.9	%
Five Star Bank		-		144,126		(144,126	)		(100.0	)%
Others		183,264		283,512		(100,248	)		(35.4	)%
Total	$	1,009,730	$	1,681,596	$	(671,866	)		(40.0	)%

Six Months Ended June 30,	2025			2024		Change ($)			Change (%)
PCCU	$	1,565,275		$	2,424,598	$	(859,323	)		(35.4	)%
Pacific Valley Bank		38,012			20,373		17,639			86.6	%
Five Star Bank		(16,389	)		263,388		(279,777	)		(106.2	)%
Other		495,297			594,232		(98,935	)		(16.7	)%
Total	$	2,082,195		$	3,302,591	$	(1,220,396	)		(37.0	)%

The following is the hosting fee by financial institutions for the three and six months ended June 30, 2025 and June 30, 2024.

Three Months Ended June 30,	2025		2024		Change ($)			Change (%)
PCCU	$	288,232	$	121,108		167,124			138.0	%
Pacific Valley Bank		4,648		4,002		646			16.1	%
Five Star Bank		-		17,409		(17,409	)		(100.0	)%
Total	$	292,880		142,519	$	150,361			105.5	%

Six Months Ended June 30,	2025			2024		Change ($)			Change (%)
PCCU	$	591,744		$	225,367	$	366,377			162.6	%
Pacific Valley Bank		12,266			5282		6,984			132.2	%
Five Star Bank		(2,795	)		33,701		(36,496	)		(108.3	)%
Total	$	601,215		$	264,350	$	336,865			127.4	%

Account hosting fees increased in the three ended and six months ended June 30, 2025 compared to 2024, primarily due to the Amended CAA. In 2024, PCCU charged a monthly per-account fee ranging from $25.32 to $27.85 for accounts hosted on their platform. In contrast, under the Amended CAA in 2025, the Company 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 then multiplied by the number of days in the applicable month. This new asset hosting fee replaced the prior investment hosting fee and loan hosting fee, as described below. We anticipate that the new asset hosting fee will be more expensive than the disaggregated fees in the PCCU CAA.

Investment Income

Some of the Company’s financial institutions pay us interest on daily account balances as per the rates outlined in the agreements. The decrease in investment income was primarily attributable to a reduction in average daily deposit balances.

During 2024, under the terms of the PCCU CAA, the Company paid a hosting fee equal to 25% of the investment income generated from PCCU-related funds. For the three months and six months ended June 30, 2024, PCCU’s contribution to investment income totaled $435,238 and $1,166,663, resulting in $117,620 and $277,721 investment hosting fees. These fees were recorded under general and administrative expenses in the unaudited condensed consolidated statements of operations.

In contrast, under the Amended PCCU CAA effective December 31, 2024, the Company is no longer required to pay investment hosting fees to PCCU. For the three months ended and six months ended June 30, 2025, PCCU’s contribution to investment income was $260,387 and $552,823.

Loan Interest Income

Loan interest income includes interest earned from both direct loans and those issued under the PCCU CAA, which were indemnified by the Company through December 31, 2024. Upon the execution of the Amended PCCU CAA on December 31, 2024, the indemnification liability was eliminated, and the indemnified status of these loans was removed.

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% of the outstanding loan balance.

Effective December 31, 2024, the Amended PCCU CAA eliminated the Company’s role as guarantor, thereby removing the 100% indemnity liability. Additionally, under the amended agreement, the method for calculating loan interest income was revised, and loan service fees were eliminated. 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.

The reduction in loan interest income for the period is mainly attributed to the implementation of the new formula and the removal of the indemnification structure. According to the Amended CAA, the Company’s interest income on all loans with PCCU is now calculated using a loan yield allocation formula. This formula takes into account the Constant Maturity U.S. 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. Prior to the Amended CAA, the Company retained the full interest income from the loans and was responsible for paying loan servicing fees of 0.25% of the loan balance. The Amended CAA eliminates both the loan servicing fees and indemnification liability, while introducing the new interest income split between the Company and PCCU. The interest income split, given the current portfolio of loans, and using the loan yield allocation formula, is approximately 39% in favor of the Company, with the remainder retained by PCCU. The interest income split will vary depending on changes to the loan portfolio.

For the three months and six months ended June 30, 2025, the Company recognized $506,233 and $1,046,455 in loan interest income attributable to PCCU activities. In comparison, for the three months and six months ended June 30, 2024, the Company recognized $1,836,092 and $3,472,848 in loan interest income from the same activities. Related expenses for the 2024 period included $36,156 and $72,057 in loan servicing fees, in accordance with the PCCU CAA, which were reported under general and administrative expenses in the unaudited condensed consolidated statements of operations.

Operating Expenses

Three Months Ended June 30,	2025		2024			Change ($)			Change (%)
Compensation and employee benefits	$	1,583,051	$	2,264,931		$	(681,880	)		(30.1	)%
General and administrative expenses		457,803		1,001,764			(543,961	)		(54.3	)%
Professional services		712,337		503,727			208,610			41.4	%
Rent expense		63,185		64,198			(1,013	)		(1.6	)%
Provision (benefit) for credit losses		-		(97,248	)		97,248			(100.0	)%
Total	$	2,816,376	$	3,737,372		$	(920,996	)		(24.6	)%

Six months Ended June 30,	2025		2024			Change ($)			Change (%)
Compensation and employee benefits	$	2,955,532	$	4,544,969		$	(1,589,437	)		(34.9	)%
General and administrative expenses		1,448,629		1,985,984			(537,355	)		(27.0	)%
Professional services		2,211,871		964,677			1,247,194			129.3	%
Rent expense		124,191		133,635			(9,444	)		(7.1	)%
Provision (benefit) for credit losses		-		(166,035	)		166,035			(100.0	)%
Total	$	6,740,223	$	7,463,230		$	(723,007	)		(9.7	)%

For the three months ended June 30, 2025, as compared to June 30, 2024, the Company reduced operating expenses by $920,996, or 24.6%. For the six months ended June 30, 2025, as compared to June 30, 2024, the Company reduced operating expenses by $723,007 or 9.7%. The Company implemented a business plan that included a reduction of expenses to save cash, refer to management’s plan related to going concern, Note 2 to the accompanying financial statements.

For the three months ended June 30, 2025, compared to the same period in 2024, the Company reduced compensation and employee benefits by $681,880, or 30.1%. This decrease was primarily driven by reduction in stock compensation expense of $700,000 which is offset by $100,000 for an amount accrued for an amount owed to a former employee. For the six months ended June 30, 2025, compared to the same period in 2024, compensation and employee benefits declined by $1,589,437, or 34.9%, including $833,000 in savings from headcount reductions and a $861,000 reduction in stock compensation expense, offset by $100,000 for an accrual for an amount owed to a former employee. Compensation and employee expenses should continue to decline in the third quarter ending September 30, 2025 with a full effect of the headcount reductions taken during the quarter ended June 30, 2025.

For the three months ended June 30, 2025, as compared to June 30, 2024, there was a decrease in general and administrative expense of $543,961, or 54.3%. The decrease is primarily related to a decrease of $271,000 from franchise taxes, a decrease of $191,000 for amortization of intangible assets, and a decrease in marketing expenses of $41,000. For the six months ended June 30, 2025, as compared to June 30, 2024, there was a decrease in general and administrative expense of $537,355, or 27%. The decrease was primarily attributed to a franchise taxes of $271,000, and a decrease in marketing expenses of $92,000.

For the three months ended June 30, 2025, as compared to June 30, 2024, there was an increase in professional services of $208,610, or 41.4%, The increase was attributed to legal fees associated with the Company’s litigation, For the six months ended June 30, 2025, as compared to June 30, 2024, there was an increase in professional services of $1,247,194, or 129.3%. The increase was attributed to legal fees associated with the Abaca legal case, non-cash stock compensation to directors, and a $200,000 legal settlement with a former employee. For additional details, please refer to “Business––Involvement in Certain Legal Proceedings.”

For the three months ended June 30, 2025, there was no credit loss (benefit) expense as compared to a credit loss (benefit) of $(97,248). For the six months ended June 30, 2025, there was no credit loss (benefit) expense as compared to a credit loss (benefit) of $(166,035). Effective with the Amended PCCU CAA, the Company is not indemnifying loans issued by PCCU.

Other Income / (Expenses)

Three Months Ended June 30,	2025			2024			Change ($)			Change (%)
Change in the fair value of deferred consideration	$	(40,960	)	$	211,535		$	(252,495	)		119.4	%
Interest expense		(115,341	)		(168,830	)		53,489			(31.7	)%
Change in fair value of warrant liabilities		138,158			1,086,286			(948,128	)		87.3	%
	$	(18,143	)	$	1,128,991		$	(1,147,134	)		101.6	%

Six Months Ended June 30,	2025			2024			Change ($)			Change (%)
Change in the fair value of deferred consideration	$	120,040		$	396,070		$	(276,030	)		(69.7	)%
Interest expense		(228,127	)		(323,002	)		94,875			(29.4	)%
Change in fair value of warrant liabilities		1,254,240			2,341,773			(1,087,533	)		46.4	%
	$	1,146,153		$	2,414,841		$	(1,268,688	)		(52.5	)%

Deferred consideration from the Abaca acquisition is classified as a derivative liability under ASC 815 and recorded at fair value, with periodic adjustments. Its value fluctuates based on factors such as the Company’s stock price, market volatility, risk-free interest rates, and amendments to the agreement. For the three months and six months ending June 30, 2025, the fair value of deferred consideration decreased by $252,495, of 119.4% and $276,030, or 69.7%. This decrease was predominantly due to a decline in the stock price which affected the fair value of the warrants and third anniversary payment.

Interest expense for the three and six months ended June 30, 2025, and June 30, 2024, primarily relates to the Senior Secured Promissory Note. For the three months ended June 30, 2025, interest expense decreased by $53,489, or 31.7%, compared to the same period in 2024, primarily due to principal repayments on the note. For the six months ended June 30, 2025, interest expense decreased by $94,875, or 29.4%, compared to the prior-year period, also driven by principal repayments on the Senior Secured Promissory Note.

The Company has warrant liabilities related to public, private placement, PIPE, and Abaca warrants, which may be settled in cash or stock at the option of the Company. The liabilities are subject to adjustments based on its fair value which is calculated by the Black Scholes Merton option pricing method and Monte Carlo Simulation method. Changes in the Company’s stock price primarily resulted in the decrease in fair market value.

Income Taxes

Income tax (benefit) expense for the three months ended June 30, 2025 was $(58,470) as compared to income tax of $487,627 for the three months ended June 30, 2024. Income tax (benefit) expense for the six months ended June 30, 2025 was $(58,470) as compared to an income tax expense of $48,742 for the six months ended June 30, 2024. The change in income tax (benefit) resulted in a reversal of estimated accrual.

Key Metrics

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.

Non-GAAP Financial Measures

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.

Earnings Before Interest Taxes Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net profit before taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net profit (the most directly comparable GAAP financial measure) to EBITDA and from EBITDA to Adjusted EBITDA.

	●	although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and both EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

	●	EBITDA and Adjusted EBITDA do not reflect changes in our cash requirements for our working capital needs; and

	●	EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available to us.

Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net profit and our other GAAP results.

A reconciliation of net profit to non-GAAP EBITDA and Adjusted EBITDA is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Net (loss) income	$	(930,715	)	$	941,527		$	(1,757,914	)	$	2,991,203
Interest expense		115,341			168,830			228,127			323,002
Depreciation and amortization		1,077			194,790			2,518			390,499
Provision (benefit) for income taxes		(58,470	)		487,627			(58,470	)		48,742
EBITDA		(872,767	)	$	1,792,774			(1,585,739	)		3,753,446

Other adjustments –
Credit loss (benefit) expense		-			(97,248	)		-			(166,035	)
Change in the fair value of warrants and forward purchase derivatives		(138,158	)		(1,086,286	)		(1,254,240	)		(2,341,773	)
Change in the fair value of deferred consideration		40,960			(211,535	)		(120,040	)		(396,070	)
Stock compensation,		20,951			552,137			783,762			1,164,261
Deferred loan origination fees and costs		-			23,800			-			47,173
Adjusted EBITDA	$	(949,014	)	$	973,642		$	(2,176,257	)	$	2,061,002

Other Metrics

The Company monitors the following key metrics for its business operations.

Total account balances, number of accounts and average account balances

Account Fees Per Average Active Accounts Managed

Six Months Ended June 30,		2025		2024		Change			Change (%)
Average monthly deposit balance	(1)	$	103,756,620	$	125,852,436	$	(22,095,816	)		(17.6	)%
Average Account fees	(2)		285,433		432,888		(147,455	)		(34.1	)%
Average active accounts	(3)		772		752		20			2.7	%
Average account balance	(4)		134,400		167,283		(32,883	)		(19.7	)%
Average fees per account	(4)		370		576		(206	)		(35.8	)%

Three Months Ended June 30,		2025		2024		Change			Change (%)
Average monthly deposit balance	(1)	$	101,463,819	$	116,237,767	$	(14,773,948	)		(12.7	)%
Average Account fees	(2)		276,586		431,399		(154,813	)		(35.9	)%
Average active accounts	(3)		762		760		2			0.2	%
Average account balance	(4)		133,155		152,877		(19,722	)		(12.9	)%
Average fees per account	(4)		363		567		(204	)		(36.0	)%

	(1)	2025 represents the average of the daily account balance for the three and six months therein; 2024 represents the average of the ending account balances for each of the three and six months therein.
	(2)	Reported account activity fee revenue per month.
	(3)	Represents the average of ending active accounts for each of the three and six months therein.
	(4)	Refer to “––Three and Six Months June 30, 2025 As Compared To June 30, 2024” for additional discussion of trends.

For the three months and six months ended June 30, 2025, there was an increase in the average number of accounts; however, the average monthly balance and fees declined due to a reduction in high value accounts compared to the three and six months ended June 30, 2024. The Company is focused on expanding its client base through various strategic partnerships, which is expected to drive growth in both account balances and fees in the upcoming quarters.

Liquidity, Capital Resources and Capital Resources.

Liquidity refers to our ability to meet expected cash obligations, including operating costs, interest payments, and general business expenditures. As of June 30, 2025, we had cash and cash equivalents of $247,318 and a net working capital deficit of $7,381,312. We also had an accumulated deficit of $122,513,459 and used cash of $1,815,338 in operating activities during the six months ended June 30, 2025.

Pursuant to ASC 205-40, we evaluated whether there are conditions or events that raise substantial doubt about our ability to continue as a going concern for at least one year from the date of issuance of these unaudited condensed consolidated financial statements. Based on current financial projections, we believe substantial doubt exists regarding our ability to continue as a going concern.

Management projects that the Company will not have sufficient liquidity to continue operations, including making required interest payments under the Amended PCCU Note beyond October 2025. The total outstanding balance under the Amended PCCU Note is $10,748,408. PCCU holds a senior security interest in all of the Company’s assets other than the Nasdaq listing. In the event of a payment default, and if such default is not cured within the applicable grace period, PCCU may exercise its rights under the security agreement, which could include accelerating the debt and pursuing remedies that could materially and adversely affect the Company’s operations and financial position.

The Company continues to experience reductions in depository activity, loan interest income, and fee revenue, as well as legal expenses related to ongoing shareholder and former employee litigation. These factors have further constrained liquidity and heightened the uncertainty surrounding our ability to sustain operations.

The Company entered into a purchase loan agreement with PCCU on July 31, 2025, for the sale of a loan receivable of $385,642 as of June 30, 2025 to PCCU. On July 31, 2025, the Company received $384,527 from PCCU for the sale of the loan.

Additionally, as of June 30, 2025, our stockholders’ deficit of approximately $17.9 million is $20.4 million below the $2.5 million minimum equity requirement for continued listing on Nasdaq under Rule 5550(b)(1). We received a deficiency notice from Nasdaq and submitted a compliance plan on May 22, 2025. Nasdaq confirmed receipt of the plan but has provided no additional commentary as of the date of issuance of the financial statements. There is no assurance that the Company will regain compliance within the allowed period.

Notwithstanding these financial conditions, the Company does not anticipate any material impact to services provided to its cannabis-related business (CRB) clients, whose deposits are maintained with the Company’s contracted financial institutions. However, these developments could ultimately result in changes to the Company’s ownership structure.

Management’s Plan Related to Going Concern

In response to the liquidity challenges and the existence of substantial doubt about the Company’s ability to continue as a going concern, management has implemented and is pursuing a series of initiatives intended to improve the Company’s financial condition and operating flexibility.

The Company has undertaken several operational and financial restructuring measures, including:

	●	Strategic partnerships aimed at expanding its service offerings to cannabis-related businesses;

	●	Renegotiating terms under its Amended PCCU Note;

	●	Offering stock-based compensation in lieu of cash to conserve liquidity while continuing to attract and retain key personnel;

	●	Restructuring its employee base to align staffing with current operating needs; and

	●	Adjusting Board of Directors’ compensation to further align interests with shareholders through equity incentives.

In addition, the Company is actively engaged in discussions with potential investors, lenders, acquirers, investment banks, and strategic partners to secure additional capital through debt and equity financing or other strategic alternatives. Management is also exploring the potential use of its Nasdaq listing as part of a broader strategy that may include digital assets or treasury-related partnerships. These discussions remain preliminary, and no assurance can be given that any such transaction will materialize.

While these plans are factored and heighted to alleviate the conditions giving rise to the going concern uncertainty, there can be no assurance that they will be successfully executed, or that any financing will be secured on acceptable terms, or at all. If the Company is unable to implement these plans or obtain sufficient funding, it may be required to curtail operations or pursue other strategic alternatives. The Company is closely monitoring its cash flows, reducing discretionary expenditures, and prioritizing liquidity preservation while continuing to assess all available strategic options.

Management remains committed to executing its business plan while addressing the Company’s liquidity needs in a timely and prudent manner.

Internal Control over Financial Reporting

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following are the material weaknesses over financial reporting identified by management:

●

Revenue Recognition: The Company is unable to support the completeness and accuracy of its activity fee income generated from deposits held at PCCU, as such activity fees are compiled from a system from which the Company does not have the ability to fully rely upon. As such, there is a potential that revenues recognized could have been misstated.

●

Accounting for Financial Instruments: The Company did not appropriately apply the guidance under ASC 470, Debt, in connection with the reclassification of the Amended PCCU Note. The PCCU Note, which was amended on March 1, 2025, met the criteria for classification as a non-current liability under ASC 470, but was incorrectly presented as a current liability in the Company’s financial statements. As a result, management deemed that remediation efforts related to previously reported matter relating to the accounting, disclosure and valuation of complex financial instruments unsuccessful.

●

Accounting for Forward Purchase Receivables: During the three months ended March 31, 2025, the Company did not appropriately reclassify the forward purchase receivables to additional paid-in-capital after certain conditions preventing its classification as equity were overcome. The Company did not have adequate documentation regarding the valuation of these receivables in accordance with the relevant accounting literature. This matter, corrected prior to issuance of the quarterly report, could have resulted in a misstatement in the valuation of the reported forward purchase receivables and additional paid-in-capital.

●

Going Concern: In applying ASC 205-40 and SEC Staff Accounting Bulletin No. 59 (Topic 1.M), management failed to recognize that substantial doubt about the Company’s ability to continue as a going concern existed as of the December 31, 2024. Management’s evaluation initially failed to be evaluated based on financial cash flow projections from the date the financial statements would be issued. This matter could affect the accuracy and completeness assertions related to the presentation of liquidity and going concern disclosures in the financial statements.

●

Information Technology: The Company did not regularly monitor, review, and restrict privileged user access to key financial applications, most significantly, the Jack Henry system utilized by PCCU which tracks account activity fees and the Company’s accounting system. Certain individuals, including the former Chief Financial Officer, retained unnecessary privileged access to these systems during the reporting period. Although audit logs confirm that no unauthorized transactions were executed and there is no evidence of intentional misuse of access, the presence of such elevated access created an environment where critical controls-particularly those relying on the segregation of duties-could have been overridden or bypassed.

●

Determination of stock compensation expense: During the three months ended March 31, 2025, the Company initially reversed all previously recognized stock compensation expense under ASC 718 related to stock options that were fully vested at the time of the employee’s contract termination. Further, the fair value of certain stock option awards was not calculated correctly. The Black-Scholes option pricing model contained incorrect inputs, specifically for the expected term and stock price. The error in recording stock-based compensation resulted from a material weakness in the management review process.

Cash Flows

For the six months ended June 30, 2025, the Company used $1,815,338 of cash in operating activities to fund its net loss of $1,757,914. Operating cash flow benefited from $783,762 in non-cash stock-based compensation and $532,761 generated through effective working capital management. For the six months ended June 30, 2024, the Company cash provided by operations was $2,704,637 primarily from a net income of $2,991,203, increases in changes in operating assets and liabilities $1,390,207, offset by non-cash expenses of $1,340,207.

For the six months ended June 30, 2025, and June 30, 2024, the Company generated cash from investing activities was $6,545 and $6,083 from the proceeds of loan, respectively.

For the six months ended June 30, 2025, and June 2024, the Company used from financing activities was $268,536 and $1,487,507 was primarily from the repayment of the senior secured promissory notes, respectively.

Critical Accounting Estimates

As of June 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 for the fiscal year ended December 31, 2024.

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in the JOBS Act. Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued until such time as those standards apply to private companies. In electing this relief, the JOBS Act does not preclude an EGC from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. SHF has elected to use this relief and will do so until the earlier of the date that it (a) is no longer an emerging growth company or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result of the elected JOBS Act relief, these combined and unaudited condensed consolidated financial statements may not be comparable to companies that do not elect JOBS Act relief or choose to early adopt different accounting pronouncements than SHF.

MANAGEMENT

Executive Officers and Directors

As of September 24, 2025, our directors and executive officers were as follows:

Name		Position
Terrance E. Mendez		Chief Executive Officer & Interim Chief Financial Officer, Director
Richard Carleton		Director
Francis A. Braun III		Director
Jonathon F. Niehaus		Director
Sundie Seefried		Director

Directors

Terrance E. Mendez. Mr. Mendez currently serves as the Chief Executive Officer for the Company, a position he has held since February 2025 after initially being appointed Co-Chief Executive Officer in January 2025. Mr. Mendez has also served as the Company’s Interim Chief Financial Officer since the resignation of the Company’s prior Chief Financial Officer, James H. Dennedy, in June 2025. Mr. Mendez also serves as the Chief Executive Officer of Amos Advisory Solutions (“AMOS”) since August 2016, a management and outsource consulting firm through which he has held executive leadership roles in several cannabis and cannabis-related business. In connection with his employment with AMOS, Mr. Mendez served from November 2023 to May 2025 as the Chief Financial Officer of 42 Degrees, a cannabis extractor and distributor. From February 2022 to February 2024 as the Chief Executive Officer of Devi Holdings, a vertically integrated multi-state cannabis operator. From December 2019 to April 2021 as the Chief Executive Officer, of Dalwhinnie Enterprises, a single state vertical integrated cannabis operator. Mr. Mendez was employed from July 2017 to August 2019, as the Vice President of Finance and Chief Accounting Officer by Hitachi Vantara, a subsidiary of Hitachi, Ltd. (OTCMKTS:HTHIY), a technology conglomerate. From March 2014 to November 2016, Mr. Mendez served as Vice President and Chief Audit Executive by Arrow Electronics Inc. (NYSE:ARW), an electronics components manufacturer. From September 2011 to March 2014, Mr. Mendez was employed as Vice President of FP&A and was a Segment Financial Controller by Broadridge Financial Solutions Inc. (NYSE:BR). Mr. Mendez spent 14 years in public accounting with Arthur Andersen & Co. and Deloitte Touche LLP. Mr. Mendez is a Certified Public Accountant in the States of New York, New Jersey and Colorado and a Charted Global Management Accountant. He holds a Bachelor of Science in Economics from the University of Pennsylvania’s Wharton School of Business. Mr. Mendez’s finance and accounting expertise is a strong asset to the Board of Directors, and he also has extensive management and industry experience. Age: 50.

Richard Carleton. On September 28, 2022, Mr. Carleton was appointed as a member of the Board of Directors in connection with the closing of our initial business combination. Mr. Carleton currently serves as the Chief Executive Officer and Board Member of the Canadian Securities Exchange, a position he has held since July 2011. Mr. Carleton also currently serves as Chair of Tetra Trust, a licensed trust company that provides secure custody for digital assets in Canada, having joined the board in June 2021, and also serves as a director of Blue Ocean ATS, a U.S. registered alternative trading system, a position he has held since April 2021. Mr. Carleton brings to the Board of Directors his experience as a senior executive in the North American capital markets industry for more than 35 years as a trusted legal, financial and business advisor. An early advocate for the cannabis industry in the public markets, Mr. Carleton is a recognized thought leader on the development of the industry in Canada, the United States and beyond. Mr. Carleton received his Bachelor of Arts in History from the University of Ottawa (1981) and his LLB from the University of Toronto (1985). He has also completed the Executive Development Program at the Wharton School, University of Pennsylvania. Age: 65.

Francis A. Braun III. Francis A. (Skip) Braun III was appointed to the Board of Directors in May 2025. He has served as a senior advisor to Stout since April 2024 and as a member of CrossCountry Consulting’s advisory counsel since February 2024. Mr. Braun was appointed to the Board of Directors of Elite Express Holdings Inc. in August 2025. Mr. Braun has also served as a director of Crown Bank in New Jersey since October 2024 and is the chairman of the bank’s audit committee. From July 2024 to July 2025 Mr. Braun served as a consultant to Kohlberg Kravis Roberts & Co. L.P., and from December 2016 to July 2023, Mr. Braun served as a Partner at Grant Thornton LLP. Mr. Braun is considered a financial expert under the Sarbanes-Oxley rules and has 40 years of diversified experience serving public and private companies during his time in public accounting with Arthur Andersen LLP, Deloitte & Touche LLP and Grant Thornton LLP. He holds a Bachelor of Science in Commerce, Accounting from Rider University. Age: 64.

Jonathon F. Niehaus. On September 28, 2022, Mr. Niehaus was appointed as a member of the Board of Directors in connection with the closing of the initial business combination. Mr. Niehaus currently serves as the Managing Partner of Interactive Global Solutions, a global consulting company, a position he has held since January 2011. Mr. Niehaus previously served as a member of the board of managers of SHF, LLC d/b/a Safe Harbor Financial (“SHF Predecessor”) from February 2022 until September 2022. From 2003 until 2011, Mr. Niehaus served as a Global SVP for First Data Corporation and the Western Union Company. In this capacity, Mr. Niehaus was responsible international government relations and public affairs. In addition, he spearheaded outreach to US attorneys general in matters relating to compliance and anti-money laundering activities. Mr. Niehaus was thereafter appointed to be a senior advisor to the Alliance Partnership, an international rule of law initiative run by the Attorney General Alliance. Mr. Niehaus is an active board member, serving as the chair of the Farnsworth Group, a multi-state architecture and engineering firm and chair of the Make A Difference Foundation which focusses on green energy initiatives internationally. He has also served as advisor to other private companies as well as serving 10 years on the board of the Colorado Great Outdoors Trust Fund. Mr. Niehaus received his Bachelor of Science in Journalism Communications from the University of Iowa. Mr. Niehaus’ background enables him to share his expertise in legal, regulatory, and compliance matters with the Board of Directors. Age: 53.

Sundie Seefried. Ms. Seefried served as the Chief Executive Officer of the Company from July 2021 until February 2025 and currently serves as a member of the Board of Directors, a position she has held since April 2024. Ms. Seefried originally created and implemented the cannabis banking program that led the Company to separate from PCCU as a stand-alone company. Her expertise with financial regulations provides support to the present operations of the Company and also contributes to the strategic position of the Company as it manages its growth. Prior to joining the Company, Ms. Seefried served as the Chief Executive Officer of PCCU from 2001 until June 2021. While CEO, she established the Partner Colorado Foundation for community outreach programs, which is now in its 10th year of service and has granted nearly $900,000 scholarships and community grants in total. Her consistent dedication to her community and their needs demonstrates a hands-on approach and awareness to continue to support the future strategic direction of the Company. She also established and led as the Chief Executive Officer and/or board member of Eagle Legacy Services, LLC from January 2017 until March 2021. Ms. Seefried previously served as a board member of the Colorado Division of Financial Services from 2019 until 2021, and as a board member of the Credit Union Association from 2007 until 2015. Ms. Seefried received her Bachelor of Science in Business Management from the University of Maryland and her Master of Business Administration in Finance from Regis University, Colorado. Age: 63.

Executive Officers

Mr. Mendez’ biographical information is set forth above in “––Directors.”

Family Relationships

There are no family relationships between our Board of Directors and any of our executive officers.

Board of Directors

Our Board of Directors directs our business and affairs, as provided by Delaware law, and conducts its business through meetings of the Board of Directors and its standing committees.

In accordance with our Certificate of Incorporation, our Board of Directors consists of three classes of directors, with the first class consisting of two directors with a term that, after the nominees are elected at the 2025 Annual Stockholders Meeting (the “2025 Annual Meeting”), will expire at the annual meeting of stockholders held in 2028; the second class consisting of three directors with a term that expires at the annual meeting of stockholders held in 2026; and the third class consisting of two directors with a term that will expire at the annual meeting of stockholders held in 2027. At each annual meeting of stockholders, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election.

During the fiscal year ended December 31, 2024, exclusive of committee meetings, our Board of Directors held 5 meetings and took 11 actions by unanimous written consent. In 2024, each person serving as director attended at least 75% of the total number of meetings of our Board of Directors and any committee of the Board of Directors on which he or she served.

Corporate Governance Overview

We are committed to having sound corporate governance principles, which are essential to running our business efficiently and maintaining our integrity in the marketplace. We understand that corporate governance practices change and evolve over time, and we seek to adopt and use practices that we believe will be of value to our stockholders and will positively aid in the governance of the Company. To that end, we regularly review our corporate governance policies and practices and compare them to the practices of other peer institutions and public companies. We will continue to monitor emerging developments in corporate governance and enhance our policies and procedures when required or when our Board of Directors determines that it would benefit our Company and our stockholders.

In this section, we describe the roles and responsibilities of our Board of Directors and its committees and describe our corporate governance policies, procedures and related documents. The charters of the Audit, Nominating and Corporate Governance, and Compensation Committees of our Board of Directors, and Code of Ethics can be accessed electronically by clicking the “Investor Relations” page on our website, www.shfinancial.org, and selecting “Governance” under the “Company Information” tab. We will also provide a copy of the committee charters, our Corporate Governance Guidelines and our Code of Business Conduct and Ethics without charge upon written request sent to Michael Regan in writing at 1526 Cole Blvd., Suite 250, Golden, Colorado 80401 or by telephone at 720-826-6282.

Board Composition and Leadership Structure

Jonathon F. Niehaus, a Class II director, serves as the chair of the Company’s Board of Directors and lead independent director. Mr. Niehaus, in his capacity as lead independent director, helps to ensure that the Board of Directors provides effective independent oversight of management.

Our Board of Directors has determined that our leadership structure is appropriate for the Company and our stockholders as it helps to ensure that the Board of Directors and management act with a common purpose and provides a single, clear chain of command to execute our strategic initiatives and business plans.

Director Independence

Applicable rules of Nasdaq require a majority of a listed company’s board of directors to be comprised of independent directors within one year of listing. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and corporate governance committees be independent, and that audit committee members also satisfy independence criteria set forth in Rule 10A-3 under the Exchange Act. The Nasdaq independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees, that neither the director nor any of his or her family members has engaged in various types of business dealings with us and that the director is not associated with the holders of more than five percent of our Common Stock. In addition, under applicable Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the listed company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our Board of Directors has undertaken a review of the independence of each director. Based on information provided by each director concerning their background, employment and affiliations, our Board of Directors has determined that four of our five current directors do not have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the listing standards of Nasdaq. In making such determination, our Board of Directors considered the relationships that each such non-employee director has with us and all other facts and circumstances that our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

Each of Mr. Carleton, Mr. Niehaus, and Mr. Braun would be considered “independent” members of our Board of Directors as “independence” is defined in Nasdaq Marketplace Rule 5605(a)(2). The Board has determined that Mr. Mendez is not “independent” because he is an executive officer of the Company, and that Ms. Seefried is not “independent” due to her recent previous employment as an executive officer of the Company.

Board’s Role in Risk Oversight and Management

Our Board of Directors has responsibility for the oversight of the Company’s risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from committees and members of senior management to enable our Board of Directors to understand the Company’s risk identification, risk management and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, strategic and reputational risk. In its risk oversight role, our Board of Directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed.

The Audit Committee reviews information regarding liquidity and operations and oversees our management of financial risks. Periodically, the Audit Committee reviews our policies with respect to risk assessment, risk management, loss prevention and regulatory compliance. Oversight by the Audit Committee includes direct communication with our external auditors, and discussions with management regarding significant risk exposures and the actions management has taken to limit, monitor or control such exposures. The Compensation Committee is responsible for assessing whether any of our compensation policies or programs has the potential to encourage excessive risk-taking. The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board of Directors, corporate disclosure practices, and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks. Matters of significant strategic risk are considered by our Board of Directors as a whole.

Committees of the Board of Directors

The Board of Directors has three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. While the Audit Committee has primary responsibility for risk oversight, both the Audit Committee and the entire Board of Directors are actively involved in risk oversight on behalf of the Company and both receive reports on the Company’s risk management activities from the Company’s executive management team on a regular basis. The members of both the Audit Committee and the Board of Directors also engage in periodic discussions with the Company’s Chief Executive Officer and interim Chief Financial Officer, as well as other senior employees as they deem appropriate to ensure that risk is being properly managed at the Company. In addition, it is expected that each committee of the Board of Directors will consider risks associated with its respective area of responsibility.

From time to time, the Board of Directors forms special committees as circumstances arise where the Board of Directors believes that such a committee is called for.

Audit Committee

The Audit Committee currently consists of Mr. Braun, Mr. Niehaus, and Mr. Carleton. Under Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the Audit Committee, all of whom must be independent. Mr. Braun, Mr. Niehaus, and Mr. Carleton each meet the independent director standard under Nasdaq listing standards and under Rule 10A-3(b)(1) of the Exchange Act, and Mr. Braun serves as chairperson of the Audit Committee. Our Board of Directors has determined that Mr. Braun qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

We have adopted an Audit Committee charter, which details the principal functions of the Audit Committee, including:

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the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us;

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pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

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setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations;

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setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

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obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues, and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence;

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reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and

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reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

The Audit Committee has also established a procedure whereby complaints or concerns regarding accounting, internal controls or auditing matters may be submitted anonymously to the Audit Committee by email.

The Audit Committee held 7 meetings and took 1 action by unanimous written consent during the year ended December 31, 2024.

Compensation Committee

Messrs. Carleton, Niehaus, and Braun currently serve as members of the Compensation Committee. Under Nasdaq listing standards, the Compensation Committee must consist of all independent members. Mr. Carleton, Mr. Niehaus, and Mr. Braun meet the independent director standard under Nasdaq listing standards, and Mr. Carleton serves as chairperson of the Compensation Committee.

The Compensation Committee acts on behalf of and in conjunction with the Board of Directors to establish or recommend the compensation of executive officers of the Company and to provide oversight of the Company’s overall compensation programs and philosophy.

We have adopted a Compensation Committee charter, which details the principal functions of the Compensation Committee, including:

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reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation;

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reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers;

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reviewing on an annual basis our executive compensation policies and plans;

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implementing and administering our incentive compensation equity-based remuneration plans;

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assisting management in complying with our proxy statement and annual report disclosure requirements;

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approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;

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if required, producing a report on executive compensation to be included in our annual proxy statement; and

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reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

The charter also provides that the Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and is directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the Compensation Committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

The Compensation Committee held 8 meetings and took 2 actions by unanimous written consent during the year ended December 31, 2024.

During 2024, there was no interlocking relationship between the Board of Directors or the Compensation Committee and the board of directors or compensation committee of any other company.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee currently consists of Messrs. Niehaus, Carleton, and Braun. Under Nasdaq listing standards, the Nominating and Corporate Governance Committee must consist of all independent members. Messrs. Niehaus, Carleton, and Braun meet the independent director standard under Nasdaq listing standards, and Mr. Braun serves as chairperson of the Nominating and Corporate Governance Committee.

The Nominating and Corporate Governance Committee is responsible for evaluating the composition, size and governance of the Board of Directors and its committees and making recommendations regarding future planning and the appointment of directors to the committees, establishing a policy for considering stockholder nominees to the Board of Directors, reviewing the corporate governance principles and making recommendations to the Board of Directors regarding possible changes; and reviewing and monitoring compliance with the Company’s Code of Ethics.

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the Board of Directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

Stockholders wishing to submit the name of a person as a potential nominee to the Board of Directors must send the name, address, and a brief (no more than five hundred words) biographical description of such potential nominee to the Nominating and Corporate Governance Committee at the following address: Nominating and Corporate Governance Committee of the Board of Directors, c/o SHF Holdings, Inc., 1526 Cole Blvd., Suite 250, Golden, Colorado 80401. The Nominating and Corporate Governance Committee need not engage in an evaluation process unless (i) there is a vacancy on the Board, (ii) a director is not standing for re-election, or (iii) the Nominating and Corporate Governance Committee does not intend to recommend the nomination of a sitting director for re-election. A potential director nominee recommended by a stockholder will not be evaluated differently from any other potential nominee.

The Nominating and Corporate Governance Committee held 3 meetings and did not take any actions by unanimous written consent during the year ended December 31, 2024.

Code of Ethics

We have adopted a Code of Ethics applicable to our directors, executive officers and employees that complies with the rules and regulations of Nasdaq. The Code of Ethics codifies the business and ethical principles that govern all aspects of our business. We have previously filed a copy of our form Code of Ethics as Exhibit 14 to our registration statement on Form S-1 in connection with our IPO, filed on June 1, 2021. You may review this document by accessing our public filings at the SEC’s web site at www.sec.gov or on our website at https://ir.shfinancial.org/corporate-governance/. In addition, a copy of the Code of Ethics will be provided without charge upon request to Michael Regan in writing at 1526 Cole Blvd., Suite 250, Golden, Colorado 80401 or by telephone at 720-826-6282. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Hedging Policy

In connection with Company’s Insider Trading Policy, “Covered Persons,” which includes all officers, directors, and employees of the Company, including any such person’s spouse, other persons living in such person’s household and minor children and entities over which such person exercises control, are prohibited from engaging in the practice of hedging or monetization transactions or similar arrangements with respect to Company securities, without prior written consent from the Vice President of Strategic Finance and Corporate Development, Michael Regan.

Insider Trading Policy

The Company’s Insider Trading Policy governs the purchase, sale and other acquisitions and dispositions of the Company’s securities by the Company and all of its directors, officers and employees. This policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the Nasdaq listing standards. A copy of the Insider Trading Policy is filed as Exhibit 19 to the 2024 Annual Report.

EXECUTIVE AND DIRECTOR COMPENSATION

We qualify as both a “smaller reporting company” and an “emerging growth company” under the rules promulgated by the SEC, and we have elected to comply with the disclosure requirements applicable to smaller reporting and emerging growth companies. Accordingly, this executive compensation summary is not intended to meet the disclosure requirements of larger reporting companies.

As a smaller reporting company, we are required to disclose the executive compensation of our named executive officers, which consist of the following individuals, for the fiscal years ended December 31, 2024 and December 31, 2023, respectively: (i) any individual serving as our principal executive officer or acting in a similar capacity, during the fiscal year ended December 31, 2024; (ii) the two other most highly compensated executive officers of the Company serving as executive officers at the end of the most recently completed fiscal year; and (iii) up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer at the end of the most recently completed fiscal year.

As an emerging growth company, we are not required to provide the executive compensation Pay versus Performance disclosure described in in Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act or Item 402(v) of Regulation S-K.

Our named executive officers for the fiscal year ended December 31, 2024 were Terrance E. Mendez, our Chief Executive Officer and Interim Chief Financial Officer, Sundie Seefried, our former Chief Executive Officer, Donnie Emmi, our former Chief Legal Officer, and James H. Dennedy, our former Chief Financial Officer.

Summary Compensation Table

The following table discloses compensation paid or to be paid to our named executive officers for the fiscal years ended December 31, 2024 and December 31, 2023.

Name and Principal Position	Fiscal Year	Salary ($)		Bonus ($)		Stock Awards ($)⁽¹⁾		Non-Qualified Deferred Compensation ($)		All Other Compensation ($)		Total ($)

Sundie Seefried⁽²⁾	2024		316,728		46,667		32,518		0		0		395,913
Former Chief Executive Officer	2023		342,885		66,767		181,664		-		-		591,316

Donnie Emmi⁽³⁾	2024		331,508		38,000		26,459		0		0		395,967
Former Chief Legal Officer	2023		285,000		20,000		131,563		-		-		436,563

James H. Dennedy⁽⁴⁾	2024		334,699		38,000		26,459		0		0		399,158
Former Chief Financial Officer	2023		285,000		20,000		131,563		-		-		436,563

Terrance Mendez⁽⁵⁾	2024		-		-		-		-		72,827		72,827
Chief Executive Officer⁽⁶⁾	2023		-		-		-		-		-		-

(1)	Amounts represent the aggregate grant date fair value of stock awards or option awards, as applicable, granted during the year measured pursuant to Financial Accounting Standard Board Accounting Standards Codification Topic 718 (Topic 718), the basis for computing stock-based compensation in our financial statement.
(2)	Ms. Seefried resigned as Chief Executive Officer on February 28, 2025.
(3)	Mr. Emmi resigned as Chief Legal Officer on June 6, 2025.
(4)	Mr. Dennedy resigned as Chief Financial Officer on June 6, 2025.
(5)	Prior to becoming the Chief Executive Officer on January 21, 2025, and for the year 2024, all income earned by Mr. Mendez was through his engagement as an independent contractor.
(6)	Mr. Mendez became our Interim Chief Financial Officer on June 6, 2025 following Mr. Dennedy’s resignation.

Narrative Disclosure to Summary Compensation Table

Overview

The Company has developed an executive compensation program which is designed to align compensation with the Company’s business objectives and the creation of stockholder value, while enabling the Company to attract, motivate and retain individuals who contribute to the long-term success of the Company.

Decisions on the executive compensation program, as described below, are determined and/or ratified by the Board of Directors with recommendations given by the Compensation Committee.

The decisions regarding executive compensation reflect our belief that the executive compensation program must be competitive in order to attract and retain our executive officers. The Compensation Committee will seek to implement our compensation policies and philosophies by linking a significant portion of our executive officers’ cash compensation to performance objectives and by providing a portion of their compensation as long-term incentive compensation in the form of equity awards.

The compensation for our executive officers has three primary components: base salary, an annual cash incentive bonus, and long-term incentive compensation in the form of equity awards.

Base Salary

The Company’s practice has been to ensure that base salary is fair to the executive officers, competitive within the industry and reasonable in light of the Company’s cost structure. The Compensation Committee determines base salaries and manages the base salary review process, subject to existing employment agreements.

Annual Bonuses

The Company uses annual cash incentive bonuses for the executive officers to tie a portion of their compensation to financial and operational objectives achievable within the applicable fiscal year. The Company expects that, near the beginning of each year, the Compensation Committee will select the performance targets, target amounts, target award opportunities and other term and conditions of annual cash bonuses for the executive officers, subject to the terms of any employment agreement. Following the end of each year, the Compensation Committee will determine the extent to which the performance targets were achieved and the amount of the award that is payable to the executive officers.

Equity Awards

The Company uses equity awards to reward long-term performance of the executive officers. The Company believes that providing a meaningful portion of the total compensation package in the form of equity awards will align the incentives of its executive officers with the interests of its stockholders and serve to motivate and retain the individual executive officers. Equity awards are awarded under our Equity Incentive Plan, which has been adopted by the Board of Directors.

In connection with the Company’s executive compensation program, the Company has granted equity awards to its executives.

Other Compensation

The Company maintains various employee benefit plans, including medical, dental, life insurance and 401(k) plans, in which the executive officers participate.

Employment Agreements

Agreement with Sundie Seefried

On February 11, 2022, the Company entered into an executive employment agreement with Sundie Seefried which became effective September 28, 2022, pursuant to which Ms. Seefried serves as the Chief Executive Officer of the Company. The executive employment agreement provides for an annual base salary of $350,000, an initial incentive equity grant of options exercisable for 550,000 shares of the Company’s Common Stock at $6.67 per share that will vest over two years and other customary benefits. The executive employment agreement, which is for a two-year term, also provides for severance in the event of a termination by the Company without cause or by Ms. Seefried for good reason, of one year’s base salary. Ms. Seefried resigned as co-Chief Executive Officer of the Company effective on February 28, 2025. Ms. Seefried continues to be a member of the Board.

Agreement with Terrance E. Mendez

On January 21, 2025, the Company entered into an executive employment agreement with Mr. Mendez which became effective immediately, pursuant to which Mr. Mendez serves as the Chief Executive Officer of the Company. The Company has an employment agreement with its Chief Executive Officer. Under the terms of the agreement, if the contract is not renewed or is terminated without cause, the Company is obligated to pay severance equal to the Chief Executive Officer’s then-current annual base salary, which is $360,000 as of June 30, 2025. The agreement also provides for an annual cash bonus opportunity of up to 100% of base salary, and for long-term incentive compensation, the terms of which are to be determined by the Board of Directors. On January 21, 2025, the Company’s Board of Directors granted Mr. Mendez an option to purchase 32,700 shares of our Common Stock at an exercise price of $8.00 per share. The option has a ten-year term. One-third of the option vested immediately upon grant, one-third will vest on the first anniversary of the grant date, and the remaining one-third will vest on the second anniversary of the grant date.

Agreement with James H. Dennedy

On January 10, 2023, the Company entered into an executive employment agreement with James Dennedy, pursuant to which Mr. Dennedy serves as the Chief Financial Officer of the Company. The executive employment agreement provides for an annual base salary of $285,000, an initial incentive equity grant of options exercisable for 350,000 shares of the Company’s Common Stock at $6.67 per share that will vest over two years and other customary benefits. The executive employment agreement, which is for a two-year term, also provides for severance in the event of a termination by the Company without cause or by Mr. Dennedy for good reason, of one year’s base salary.

On April 2, 2024, the Company entered into an amendment to its original agreement with Mr. Dennedy to facilitate business continuity and stagger contract expirations to accommodate the Company’s public reporting schedule. The amendment to Mr. Dennedy’s executive employment extends the term of his employment to May 16, 2026. In addition, the amendment contains a provision that, effective April 1, 2024, deletes and replaces Section 4(b) of Mr. Dennedy’s original agreement such that all PTO that Mr. Dennedy accrued through March 31, 2024, but had not taken, shall be paid to him during the month of April 2024. As a result, no PTO shall accrue or be paid out at the time of termination of Mr. Dennedy’s employment with the Company for any reason. The amendment also adds a provision that Mr. Dennedy shall be entitled to receive supplemental severance in an amount equivalent to six months’ of his then-current base salary, provided that he executes a release of claims against the Company and its affiliated entities, executives, and employees (including claims related to any non-compete and non-solicit covenants), for the six month period after the termination of his employment.

Mr. Dennedy resigned as Chief Financial Officer on June 6, 2025.

Agreement with Donnie Emmi

On January 10, 2023, the Company entered into an executive employment agreement with Donnie Emmi, pursuant to which Mr. Emmi serves as the Chief Legal Officer of the Company. The executive employment agreement provides for an annual base salary of $285,000, an initial incentive equity grant of options exercisable for 350,000 shares of the Company’s Common Stock at $6.67 per share that will vest over two years and other customary benefits. The executive employment agreement, which is for a two-year term, also provides for severance in the event of a termination by the Company without cause or by Mr. Emmi for good reason, of one year’s base salary.

On April 2, 2024, the Company entered into an amendment to its original agreement with Mr. Emmi to facilitate business continuity and stagger contract expirations to accommodate the Company’s public reporting schedule. The amendment to Mr. Emmi’s executive employment agreement extends the term of his employment to August 22, 2026. In addition, the amendment contains a provision that, effective April 1, 2024, deletes and replaces Section 4(b) of Mr. Emmi’s original agreement such that all PTO that Mr. Emmi accrued through March 31, 2024, but had not taken, shall be paid to him during the month of April 2024. As a result, no PTO shall accrue or be paid out at the time of termination of Mr. Emmi’s employment with the Company for any reason. The amendment also adds a provision that Mr. Emmi shall be entitled to receive supplemental severance in an amount equivalent to six months’ of his then-current base salary, provided that he executes a release of claims against the Company and its affiliated entities, executives, and employees (including claims related to any non-compete and non-solicit covenants), for the six month period after the termination of his employment.

Mr. Emmi resigned as Chief Legal Officer on June 6, 2025. In connection with his resignation, the Company paid Mr. Emmi $22,500 as a severance payment.

Director Compensation

The following table sets forth for the year ended December 31, 2024, certain information as to the total remuneration we paid to our non-employee directors.

In 2024, each director received a quarterly cash payment in the amount of $12,500, fees in the amount of $1,500 per committee meeting, and $2,000 per Board of Directors meeting. In addition, the chair of the Audit Committee received an annual retainer of $20,000; the chair of Compensation Committee received an annual retainer of $15,000; the chair of the Nominating and Corporate Governance Committee received an annual retainer of $10,000; and the chair of the Board of Directors received an additional $60,000. Ms. Seefried did not receive fees for her service as a member of the Board of Directors.

Name	Fees Earned or Paid in Cash ($)		Bonus ($)		All Other Compensation ($)		Total ($)
Jonathon F. Niehaus		110,500		-		-		110,500
Sundie Seefried		-		-		-		-
Richard Carleton		95,500		-		-		95,500
Jonathan Summers⁽¹⁾		100,500		-		-		100,500
Douglas Fagan⁽²⁾		58,000		-		-		58,000
Jennifer Meyers⁽³⁾		58,000		-		-		58,000
Karl Racine⁽⁴⁾		79,000		-		-		79,000

(1) Mr. Summers did not stand for re-election as a director of the Company at the 2025 Annual Meeting.

(2) Mr. Fagan resigned from his position as a director of the Company on May 15, 2025.

(3) Ms. Meyers resigned from her position as a director of the Company on May 15, 2025.

(4) Mr. Racine resigned from his position as a director of the Company on May 2, 2025.

Outstanding Equity Awards at December 31, 2024

The following table sets forth information regarding outstanding stock options or unvested equity awards as of December 31, 2024.

	Option Awards										Restricted Stock Awards
	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)

Sundie Seefried		27,500		0		0		133.40		10/4/32		8,761		3,056		-		-

Donald T. Emmi		17,500		0		0		133.40		10/4/32		1,944		7,389		-		-

James H. Dennedy		17,500		0		0		51.60		10/23/32		1,944		7,389		-		-

PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial ownership of our Common Stock as of September 24, 2025, except as noted, by (i) each stockholder known by us to be the beneficial owner of more than 5% of our Common Stock, (ii) each of our directors and named executive officers, and (iii) all of our directors and executive officers as a group. Our only class of voting securities is our Common Stock. To our knowledge, none of the shares listed below is held under a voting trust or similar agreement. To our knowledge, there are no pending arrangements, including any pledges by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company. There were 2,915,956 shares of Common Stock issued and outstanding on September 24, 2025.

Unless otherwise indicated in the following table, the address for each person named in the table is 1526 Cole Blvd., Suite 250, Golden, Colorado 80401. Pursuant to SEC rules, we have included shares of Common Stock that the person has the right to acquire within 60 days after September 24, 2025.

Name and Address of Beneficial Owner	Shares of Class A Common Stock			% of Total Voting Power⁽¹⁾
Terrance Mendez		10,900			*	%
Sundie Seefried		96,795	⁽²⁾		3.3	%

Francis A. Braun III		53,114	⁽³⁾		*	%
Jonathon F. Niehaus		12,718	⁽⁴⁾		*	%
Richard Carleton		11,756	⁽⁵⁾		*	%

*(All Executive Officers and Directors as a Group (5 persons))*		178,914			5.9	%

*Greater than Five Percent Holders:*
Partner Colorado Credit Union		1,080,807	⁽⁶⁾		37.1	%
M3 Funds, LLC		277,485	⁽⁷⁾		9.5	%

* Indicates ownership of less than 1% of the outstanding shares of our Common Stock.

(1)

The percentage of beneficial ownership of the Company is calculated based on 2,915,956 shares of Common Stock outstanding as of September 24, 2025, plus vested, but unexercised options.

(2)

Includes 39,128 incentive stock options that are vested, or vest in the next 60 days, to purchase shares of Common Stock, which options expire ten years from the grant date and have an exercise price per share equal to $8.00 per share

(3)

Includes incentive stock options that are vested, or vest in the next 60 days, to purchase shares of Common Stock, which stock options expire ten years from the grant date. 27,500 and 11,628 stock options have an exercise price per share equal to $133.40, per share and $9.60 -share, respectively.

(4)

Includes incentive stock options that are vested, or vest in the next 60 days, to purchase shares of Common Stock, which options expire ten years from the grant date and have an exercise price per share equal to $2.40 per share.

(5)

(6)

Based solely on information contained in a Schedule 13D filed with the SEC on July 21, 2023. The business address of Partner Colorado Credit Union is 6221 Sheridan Blvd, Arvada, CO 80003.

(7)

Based solely on information contained in a Schedule 13D filed with the SEC on February 14, 2024. The business address of M3 Funds, LLC is 2070 E 2100 S, Suite 250, Salt Lake City, UT 84109.

DILUTIVE EFFECT ON OUR STOCKHOLDERS

All 46,153,846 shares of our Common Stock registered under this prospectus which may be issued or sold by us to CREO under the Purchase Agreement are expected to be freely tradable. It is anticipated that the Common Stock registered under this prospectus will be sold by us to CREO from time to time over the thirty-six (36) month period from and after the Commencement Date. The sale by CREO of a significant amount of our Common Stock registered under this prospectus at any given time could cause the market price of our Common Stock to decline and to be highly volatile. Sales of our Common Stock to CREO, if any, will depend upon market conditions and other factors to be determined by us. We may ultimately issue or sell to CREO all, some or none of the shares of Common Stock available under the Purchase Agreement.

Issuances of our Common Stock registered under this prospectus will not affect the rights or privileges of our existing stockholders, except that the economic and voting interests of each of our existing stockholders will be diluted as a result of any such issuance. Although the size of our Common Stock that our existing stockholders own will not decrease, the shares owned by our existing stockholders will represent a smaller percentage of our total outstanding shares after any such issuance to CREO. If and when we do sell our Common Stock to CREO under the Purchase Agreement, after CREO has acquired those shares, CREO may resell all, some or none of such shares at any time or from time to time in its discretion. Therefore, issuances to CREO by us under the Purchase Agreement may result in substantial dilution to the interests of other holders of our Common Stock. In addition, if we sell a substantial number of our Common Stock to CREO under the Purchase Agreement, or if investors expect that we will do so, the actual sales of our Common Stock or the mere existence of our arrangement with CREO may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales. However, we have the right, subject to the terms and conditions of the Purchase Agreement, to control the timing and amount of any additional sales of Common Stock to CREO, and the Purchase Agreement may be terminated at any time by the mutual written consent of us and CREO. See “Risk Factors––Risks Related to this Offering.”

The following table sets forth the amount of gross proceeds we would receive from CREO from our issuance and sale of 46,153,846 shares to CREO under the Purchase Agreement registered hereunder at varying purchase prices:

Assumed Average Purchase Price Per Share		Number of Registered Shares to be Issued if Full Purchase⁽¹⁾		Percentage of Outstanding Shares After Giving Effect to the Issuance to CREO ⁽²⁾			Gross Proceeds from the Sale of Shares to CREO Under the Purchase Agreement
$	3.25		46,153,846		94	%	$	150,000,000
$	5.00		30,000,000		91.1	%	$	150,000,000
$	7.00		21,428,571		88	%	$	150,000,000

(1)

We are registering up to 46,153,846 shares of our Common Stock, all of which would be issuable to CREO pursuant to the Purchase Agreement. The above table assumes that sales are made to CREO without regard for the Beneficial Ownership Cap.

(2)

The denominator is based on 2,915,956 shares outstanding as of September 24, 2025, adjusted to include the issuance of the number of our Common Stock set forth in the adjacent column which we would have issued to CREO under the Purchase Agreement based on the applicable assumed purchase price per share.

SELLING STOCKHOLDER

This prospectus relates to the possible resale from time to time by CREO of any or all of the shares of Common Stock that may be issued by us to CREO under the Purchase Agreement. For additional information regarding the issuance of Common Stock covered by this prospectus, see the section titled “CREO Equity Financing.” We are registering the shares of Common Stock pursuant to the provisions of the CREO Registration Rights Agreement in order to permit the Selling Stockholder to offer the shares for resale from time to time. Except for the transactions contemplated by the Purchase Agreement and the CREO Registration Rights Agreement, CREO has not had any material relationship with us within the past three years. As used in this prospectus, the term “Selling Stockholder” means CREO.

The table below presents information regarding the Selling Stockholder and the shares of Common Stock that it may offer from time to time under this prospectus. This table is prepared based on information supplied to us by the Selling Stockholder, and reflects holdings as of September 24, 2025. The number of shares in the column “Maximum Number of Shares of Common Stock to be Offered Pursuant to this Prospectus” represents all of the shares of Common Stock that the Selling Stockholder may offer under this prospectus. The Selling Stockholder may sell some, all or none of its shares in this offering. We do not know how long the Selling Stockholder will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the Selling Stockholder regarding the sale of any of the shares.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act, and includes shares of Common Stock with respect to which the Selling Stockholder has voting and investment power. The percentage of shares of Common Stock beneficially owned by the Selling Stockholder prior to the offering shown in the table below is based on an aggregate of 2,915,956 shares of our Common Stock outstanding on September 24, 2025. Because the purchase price of the shares of Common Stock issuable under the Purchase Agreement is determined on the applicable VWAP Purchase Date (as defined in the Purchase Agreement), with respect to a VWAP Purchase (as defined in the Purchase Agreement), the number of shares that may actually be sold by the Company to CREO under the Purchase Agreement may be fewer than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the Selling Stockholder pursuant to this prospectus.

Name of Selling Shareholder

Number of Shares of Common Stock Owned Prior to Offering

Maximum Number of Shares of Common Stock to be Offered Pursuant to this Prospectus

Number of Shares of Common Stock Owned After Offering

Number⁽¹⁾

Percent⁽²⁾

Number⁽³⁾

Percent⁽²⁾

CREO Investments LLC⁽⁴⁾

46,153,846

(1)

In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior to the offering all of the shares that CREO may be required to purchase under the Purchase Agreement, because the issuance of such shares is solely at our discretion and is subject to conditions contained in the Purchase Agreement, the satisfaction of which are entirely outside of CREO’s control, including the registration statement that includes this prospectus becoming and remaining effective. Furthermore, the VWAP Purchase of Common Stock are subject to certain agreed upon maximum amount limitations set forth in the Purchase Agreement. Also, the Purchase Agreement prohibits us from issuing and selling any shares of our common stock to CREO to the extent such shares, when aggregated with all other shares of our common stock then beneficially owned by CREO, would cause CREO’s beneficial ownership of our common stock to exceed the Beneficial Ownership Cap.

(2)

Applicable percentage ownership is based on 2,915,956 shares of our Common Stock outstanding as of September 24, 2025.

(3)	Assumes the sale of all shares being offered pursuant to this prospectus.

(4)	The business address of CREO is 16192 Coastal Highway, Lewes, Delaware 19958. CREO’s principal business is that of a private investor. Andrew Cohen is the managing member of CREO and the beneficial owner of 20% of the membership interests in CREO. Andrew Cohen has voting control and investment discretion over securities beneficially owned directly by CREO and indirectly by Keystone Capital Partners, LLC, an affiliate of CREO, and Seven Knots, LLC. We have been advised that none of Mr. Cohen, CREO, Keystone Capital Partners, LLC or Seven Knots, LLC is a member of the Financial Industry Regulatory Authority, or FINRA, or an independent broker-dealer, or an affiliate or associated person of a FINRA member or independent broker-dealer. The foregoing should not be construed in and of itself as an admission by Mr. Cohen as to beneficial ownership of the securities beneficially owned directly by CREO and indirectly by Keystone Capital Partners, LLC or Seven Knots, LLC.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Family Relationships

There are no family relationships between or among our executive officers and directors.

Related Party Transactions

Except as described below, there are no transactions since January 1, 2023, or any currently proposed transactions, in which the Company was or is to be a participant and in which any related person had or will have a direct or indirect material interest.

Account Servicing Agreement

Support Services Agreement

Loan Servicing Agreement

Commercial Alliance Agreement

In particular, the PCCU CAA provided procedures to be followed upon the default of a loan to ensure that neither the Company nor PCCU would take title to or possession of cannabis-related assets, including real property that may have served as collateral for loans funded by PCCU pursuant to the agreement. Under the PCCU CAA, PCCU had the right to receive monthly fees for managing loans. For SHF-serviced loans (CRB loans provided by PCCU but primarily handled by SHF), a yearly fee of 0.25% of the remaining loan balance was applied. For loans both financed and serviced by PCCU, a yearly fee of 0.35% on the outstanding balance was charged. These fees were calculated based on the average daily balance of each loan for the preceding month. Additionally, the Company was obligated under the PCCU CAA to indemnify PCCU from certain default-related loan losses, as fully defined in the agreement.

Policies and Procedures for the Company’s Related Party Transactions

Our Audit Committee charter provides that our Audit Committee must review and approve any transaction, arrangement or relationship, or series of transactions, arrangements or relationships, in which the Company was, is or will be a participant and the amount exceeds the lesser of (i) $120,000 or (ii) 1% of the average of the Company’s total assets at the year end for the last two completed fiscal years, and in which a related party has any direct or indirect interest. We believe that this policy requiring that any material transaction between us and such related parties be approved by our Audit Committee ensures that such transactions are on terms no less favorable to us than reasonably could have been obtained in arm’s length transactions with independent third parties. Our related party transactions entered into between January 1, 2023 and the date hereof, all of which were previously approved by our Audit Committee, are described above.

DESCRIPTION OF CAPITAL STOCK

The following summary of the material terms of our capital stock is not intended to be a complete summary of the rights and preferences of such securities, and is qualified by reference to our Second Amended and Restated Certificate of Incorporation, our Bylaws and the Warrant-related documents described herein, which are exhibits to the registration statement of which this prospectus is a part. We urge you to read each of our Second Amended and Restated Certificate of Incorporation, the Bylaws and the Warrant-related documents described herein in their entirety for a complete description of the rights and preferences of our securities.

Authorized and Outstanding Stock

Our Second Amended and Restated Certificate of Incorporation authorizes the issuance of 131,250,000 shares of capital stock, consisting of (i) 130,000,000 shares of Common Stock and (ii) 1,250,000 shares of preferred stock, par value $0.0001 per share. The outstanding shares of our Common Stock are duly authorized, validly issued, fully paid and non-assessable. As of the date of this prospectus, there were 2,915,956 shares of Common Stock outstanding, 111 shares of preferred stock outstanding and 639,329 warrants outstanding.

Common Stock

The Common Stock has such rights as are provided in the Second Amended and Restated Certificate of Incorporation.

Voting Power

Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, under the Second Amended and Restated Certificate of Incorporation, the holders of Common Stock possess or will possess, as applicable, all voting power for the election of our directors and all other matters requiring stockholder action and are entitled or will be entitled, as applicable, to one vote per share on matters to be voted on by stockholders. Subject to certain limited exceptions, the holders of Common Stock shall at all times vote together as one class on all matters submitted to a vote of the holders of Common Stock under the Second Amended and Restated Certificate of Incorporation.

Preemptive or Other Rights

The Second Amended and Restated Certificate of Incorporation does not provide for any preemptive or other similar rights.

Election of Directors

Our Second Amended and Restated Certificate of Incorporation establishes that there can be a maximum of seven members of our Board, although this number may be increased or decreased from time to time by the Board. Currently, our board consists of five directors. The Board is divided into three classes, with the first class consisting of two directors with an initial term that expires in 2028, the second class consisting of three directors with an initial term that expires in 2026, and the third class consisting of two directors with an initial term that expires in 2027. The directors shall serve until their respective successors are duly elected and qualified, or until their earlier resignation, removal, or death.

Under our Second Amended and Restated Certificate of Incorporation, directors are elected by a plurality voting standard, whereby each of our stockholders may not give more than one vote per share towards any one director nominee.

Preferred Stock

The Company is authorized to issue 1,250,000 shares of preferred stock, with a par value of $0.0001 per share, with such designation rights and preferences as may be determined from time to time by the Company’s Board of Directors.

Pursuant to the Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Preferred Stock (the “Certificate of Designation”), the Series A Convertible Preferred Stock has a stated value of $1,000 per share and will convert into shares of Common Stock at a price of $10.00 per share of Common Stock (the “Conversion Price”). The Conversion Price is subject to downward adjustment on each of the dates that are ten days, fifty-five days, one hundred days, one hundred forty-five days and one hundred ninety-days days after the effectiveness of a registration statement registering the shares of Common Stock issuable upon conversion of the PIPE Shares to the lower of the Conversion Price and the greater of (i) 80% of the volume weighted average price of the Common Stock for the prior five trading days and (ii) $2.00 (the “Floor Price”); provided that, so long as a PIPE Investor continues to hold any PIPE Shares, such PIPE Investor will be entitled to receive the aggregate shares of Common Stock that would be issuable based upon its initial purchase of PIPE Shares at the adjusted Conversion Price. Additionally, the Floor Price will be reduced to $1.25 if and only if the Company’s stockholders provide the approval contemplated by Nasdaq Listing Standard Rule 5635(d) with respect to the issuance of the Conversion Shares based on a reduction of the Floor Price to $1.25 (the “Requisite Stockholder Approval”); provided, however, that no holder of Conversion Shares issued prior to obtaining the Requisite Stockholder Approval will be allowed to vote such Conversion Shares for or against such proposal. Further, pursuant to the Certificate of Designation, as soon as practicable, but in any event not later than one hundred and twenty days after September 28, 2022, the Company will call a special meeting of its stockholders to obtain the Requisite Stockholder Approval for the reduction of the Floor Price to $1.25 and (ii) the Board will recommend approval of such proposal. If the Requisite Stockholder Approval is received and, on the date that the Requisite Stockholder Approval is received, if a prior scheduled downward adjustment of the Conversion Price would have resulted in a Conversion Price lower than the prior Floor Price (the “Theoretical Adjustment Price”), then such Conversion Price shall be downwardly adjusted to the Theoretical Adjustment Price effective, automatically and without further action of the Company or any PIPE Investor, on the trading day immediately following the trading day upon which the Requisite Stockholder Approval is obtained regardless of whether a scheduled downward adjustment of the Conversion Price would have otherwise occurred on such trading day; provided, however, in no event shall the Theoretical Adjustment Price be less than $1.25. The Company obtained the Requisite Stockholder Approval at a special meeting of its stockholders on January 25, 2023.

In addition, until the Price Protection Expiration Date (as such term is defined in the Certificate of Designation), the Conversion Price is subject to adjustment for certain issuances of Common Stock at a price per share less than the Conversion Price such that the Conversion Price will be adjusted to equal the price at which the new shares are issued. The Conversion Price is also subject to other customary adjustments for stock dividends, stock splits and similar corporate actions.

As of June 30, 2025, there were 111 shares of Convertible Preferred Stock issued and outstanding, and there were 111 shares of Convertible Preferred Stock issued and outstanding on December 31, 2024.

PLAN OF DISTRIBUTION

The Common Stock offered by this prospectus is being offered by the Selling Stockholder. The shares may be sold or distributed from time to time by the Selling Stockholder directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as agents at market prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. The sale of our Common Stock offered by this prospectus could be effected in one or more of the following methods:

●

ordinary brokers’ transactions;

●

transactions involving cross or block trades;

●

through brokers, dealers, or underwriters who may act solely as agents;

●

“at the market” into an existing market for our Common Stock;

●

in other ways not involving market makers or established business markets, including direct sales to purchasers or sales effected through agents;

●

in privately negotiated transactions; or

●

any combination of the foregoing.

In order to comply with the securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from the state’s registration or qualification requirement is available and complied with.

The Selling Stockholder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.

The Selling Stockholder has informed us that it intends to use one or more registered broker-dealers to effectuate all sales, if any, of our Common Stock that it has acquired and may in the future acquire from us pursuant to the Purchase Agreement. Such sales will be made at prices and at terms then prevailing or at prices related to the then current market price. Each such registered broker-dealer will be an underwriter within the meaning of Section 2(a)(11) of the Securities Act. The Selling Stockholder has informed us that each such broker-dealer will receive commissions from the Selling Stockholder, as applicable, that will not exceed customary brokerage commissions.

Brokers, dealers, underwriters or agents participating in the distribution of our Common Stock offered by this prospectus may receive compensation in the form of commissions, discounts, or concessions from the purchasers, for whom the broker-dealers may act as agent, of the shares sold by the Selling Stockholder through this prospectus. The compensation paid to any such particular broker-dealer by any such purchasers of our Common Stock sold by the Selling Stockholder may be less than or in excess of customary commissions. Neither we nor the Selling Stockholder can presently estimate the amount of compensation that any agent will receive from any purchasers of our Common Stock sold by the Selling Stockholder.

We know of no existing arrangements between the Selling Stockholder or any other shareholder, broker, dealer, underwriter or agent relating to the sale or distribution of our Common Stock offered by this prospectus.

We may from time to time file with the SEC one or more supplements to this prospectus or amendments to the registration statement of which this prospectus forms a part to amend, supplement or update information contained in this prospectus, including, if and when required under the Securities Act, to disclose certain information relating to a particular sale of shares offered by this prospectus by the Selling Stockholder, including the names of any brokers, dealers, underwriters or agents participating in the distribution of such shares by the Selling Stockholder, any compensation paid by the Selling Stockholder to any such brokers, dealers, underwriters or agents, and any other required information.

We will pay the expenses incident to the registration under the Securities Act of the offer and sale of our Common Stock covered by this prospectus by the Selling Stockholder. As consideration for its irrevocable commitment to purchase our Common Stock under the Purchase Agreement, we will issue to CREO the CREO Commitment Shares in accordance with the Purchase Agreement. We have also paid to CREO $35,000.00 in cash as reimbursement for the reasonable, out-of-pocket expenses incurred by CREO in connection with the Purchase Agreement, including the legal fees and disbursements of CREO’s legal counsel, in connection with its due diligence investigation of the Company and in connection with the preparation, negotiation and execution of the Purchase Agreement.

We also have agreed to indemnify the Selling Stockholder and certain other persons against certain liabilities in connection with the offering of our Common Stock offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. The Selling Stockholder has agreed to indemnify us against liabilities under the Securities Act that may arise from certain written information furnished to us by the Selling Stockholder specifically for use in this prospectus or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons, we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act and is therefore, unenforceable.

We estimate that the total expenses for the offering will be approximately $200,000.

The Selling Stockholder has represented to us that at no time prior to the date of the Purchase Agreement has the Selling Stockholder or its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any short sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our Common Stock or any hedging transaction, which establishes a net short position with respect to our Common Stock. The Selling Stockholder has agreed that during the term of the Purchase Agreement neither the Selling Stockholder, nor any of its agents, representatives or affiliates will enter into or effect, directly or indirectly, any of the foregoing transactions.

We have advised the Selling Stockholder that it is required to comply with Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M precludes the Selling Stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution of that security. All of the foregoing may affect the marketability of the securities offered by this prospectus.

This offering will terminate on the date that all of our Common Stock offered by this prospectus has been sold by the Selling Stockholder.

Our Common Stock is currently listed on The Nasdaq Capital Market under the symbol “SHFS.”

LEGAL MATTERS

Duane Morris LLP, Los Angeles, California has acted as our securities counsel. In addition, counsel that will be named in the applicable prospectus supplement will pass upon the validity of any securities offered under the applicable prospectus supplement for any underwriters or agents.

EXPERTS

Marcum LLP (“Marcum”) audited our consolidated financial statements for the years ended December 31, 2024 and 2023, respectively. We have included our consolidated financial statements in this prospectus and elsewhere in the registration statement in reliance on the reports of Marcum, given their authority as experts in accounting and auditing. As previously reported, on April 15, 2025, Marcum notified the Audit Committee that the auditor relationship between the Company and Marcum was terminated, effective April 14, 2025.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a registration statement we filed with the SEC. This prospectus does not contain all of the information set forth in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities we are offering under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. Neither we nor any agent, underwriter or dealer has authorized any person to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front page of this prospectus, regardless of the time of delivery of this prospectus or any sale of the securities offered by this prospectus.

We file annual, quarterly and current reports and other information with the SEC. Our SEC filings are available to the public at the SEC’s website at www.sec.gov. Additional information about the Company is contained at our website, www.shfinancial.org. Information on our website is not incorporated by reference into this prospectus. We make available, without charge, on our website, www.shfinancial.org, our SEC filings as soon as reasonably practicable after those reports are filed with the SEC. We will provide to each person, including any beneficial owner, to whom this prospectus is delivered, a copy of any or all the reports or documents that have been incorporated by reference in this prospectus but not delivered with this prospectus (and any exhibits specifically incorporated in such information), at no cost, upon written or oral request to us at the following address:

1523 Cole Boulevard

Suite 250

Golden, Colorado 80401

Attn: Michael Regan

Telephone: 303-431-3435

You may also obtain additional information about us by visiting our website, www.shfinancial.org. The information contained on, or that may be accessed through, our website is not a part of, and is not incorporated into, this prospectus. We have included our website addresses in this prospectus solely as an inactive textual reference.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

As a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K, all documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering shall be deemed to be incorporated by reference into the prospectus.

SHF HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS

INDEX

	Page
Report of Independent Registered Public Accounting Firm (Marcum LLP) (PCAOB ID 688)	F-2
Consolidated Balance Sheets as of December 31, 2024 and 2023	F-3
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023	F-4
Consolidated Statements of Stockholders’ (Deficit) Equity for the years ended December 31, 2024 and 2023	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023	F-6
Notes to the Consolidated Financial Statements for the years ended December 2024 and 2023	F-7
Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024	F-41
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and June 30, 2024	F-42
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2025 and June 30, 2024	F-43
Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2025 and June 30, 2024	F-45
Notes to Unaudited Condensed Consolidated Financial Statements	F-46

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

SHF Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of SHF Holdings, Inc. and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ (deficit) equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph - Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and may need to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum LLP

We have served as the Company’s auditor from 2022 to 2024.

Hartford, CT

April 10, 2025

F-2

SHF Holdings, Inc.

CONSOLIDATED BALANCE SHEETS

	December 31, 2024			December 31, 2023

ASSETS
Current Assets:
Cash and cash equivalents	$	2,324,647		$	4,888,769
Accounts receivable - trade		134,609			121,875
Accounts receivable - related party		968,023			2,095,320
Accounts receivable		968,023			2,095,320
Prepaid expenses - current portion		659,536			546,437
Accrued interest receivable		16,319			13,780
Forward purchase receivable		4,584,221			-
Short-term loans receivable, net		13,332			12,391
Asset held for sale		-			-
Other current assets		3,000,000			82,657
Total Current Assets	$	11,700,687		$	7,761,229
Long-term loans receivable, net		378,854			381,463
Property, plant and equipment, net		3,154			84,220
Operating lease right to use assets		703,524			859,861
Goodwill		-			6,058,000
Intangible assets, net		-			3,721,745
Deferred tax asset, net		-			43,829,019
Prepaid expenses - long term position		412,500			562,500
Forward purchase receivable		-			4,584,221
Security deposit		19,568			18,651
Other assets					-
Total Assets	$	13,218,287		$	67,860,909

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current Liabilities:
Accounts payable	$	140,723		$	217,392
Accounts payable-related party		75,608			577,315
Accounts payable		75,608			577,315
Accrued expenses		1,301,378			1,008,987
Contract liabilities		28,335			21,922
Lease liabilities - current		161,952			132,546
Senior secured promissory note - current portion		255,765			3,006,991
Deferred consideration - current portion		3,338,343			2,889,792
Forward purchase derivative liability		7,309,580			-
Other current liabilities		72,836			41,639
Total Current Liabilities	$	12,684,520		$	7,896,584
Warrant liabilities		1,360,491			4,164,129
Deferred consideration - long term portion		-			810,000
Forward purchase derivative liability		-			7,309,580
Senior secured promissory note-long term portion		10,748,408			11,004,175
Net deferred indemnified loan origination fees		-			63,275
Lease liabilities - long term		712,882			875,447
Indemnity liability		-			1,382,408
Total Liabilities	$	25,506,301		$	33,505,598
Commitment and Contingencies (Note 13)		-			-
Stockholders’ (Deficit) Equity

Convertible preferred stock, $.0001 par value, 1,250,000 shares authorized, 111 and 1,101 shares issued and outstanding on December 31, 2024, and December 31, 2023, respectively		-			-
Class A Common Stock, $.0001 par value, 130,000,000 shares authorized, 2,783,667 and 2,728,169 issued and outstanding on December 31, 2024, and December 31, 2023, respectively		278			273
Additional paid in capital		108,467,253			105,924,859
Retained deficit		(120,755,545	)		(71,569,821	)
Total Stockholders’ (Deficit) Equity	$	(12,288,014	)	$	34,355,311
Total Liabilities and Stockholders’ (Deficit) Equity	$	13,218,287		$	67,860,909

See accompanying notes to consolidated financial statements

F-3

SHF Holdings, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

	2024			2023
	For the year ended December 31,
	2024			2023
Revenue	$	15,242,560		$	17,562,903

Operating expenses
Compensation and employee benefits	$	7,783,331		$	10,334,212
General and administrative expenses		4,018,094			6,587,392
Professional services		2,518,394			1,858,137
Lease expense		258,477			315,614
Credit loss (benefit) expense		(1,393,131	)		290,857
Impairment of goodwill		6,058,000			13,208,276
Impairment of long-lived intangible assets		3,090,881			5,699,464
Rent expense		-			-
Provision (benefit) for credit losses		-			-
Total operating expenses	$	22,334,046		$	38,293,952
Operating loss		(7,091,486	)		(20,731,049	)
Other (income) expenses
Interest expense		533,390			1,094,736
Change in fair value of warrant liabilities		(2,803,638	)		1,853,920
Change in the fair value of deferred consideration		(361,449	)		(4,570,157	)
Total other (income) expenses	$	(2,631,697	)	$	(1,621,501	)
Net loss before income tax		(4,459,789	)		(19,109,548	)
Provision (benefit) for income taxes	$	43,859,686		$	(1,829,701	)
Net loss	$	(48,319,475	)	$	(17,279,847	)
Weighted average shares outstanding, basic		2,772,867			2,128,728
Basic net loss per share	$	(17.43	)	$	(8.12	)
Weighted average shares outstanding, diluted		2,772,867			2,128,728
Diluted net loss per share	$	(17.43	)	$	(8.12	)

See accompanying notes to consolidated financial statements

F-4

SHF Holdings, Inc.

Consolidated Statements of Stockholders’ (Deficit) Equity

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

	Shares			Amount			Shares		Amount		Capital		Earnings			Equity
	Preferred Stock						Class A Common Stock				Additional Paid-in		Retained			Total Shareholders’ (Deficit)
	Shares			Amount			Shares		Amount		Capital		(Deficit)			Equity
Balance, January 01, 2023		14,616		$	1			1,186,644	$	119	$	44,808,286	$	(39,695,281	)	$	5,113,125
Cumulative effect from adoption of CECL		-			-			-		-		-		(581,318	)		(581,318	)
Issuance of shares to Abaca shareholders		-			-			291,791		29		4,085,047		-			4,085,076
Conversion of PIPE Shares		(13,515	)		(1	)		628,110		63		14,013,313		(14,013,375	)		-
Restricted stock units		-			-			61,623		6		1,252,037		-			1,252,043
Stock compensation cost		-			-			-		-		2,459,324		-			2,459,324
PCCU Restructuring		-			-			560,000		56		38,406,352		-			38,406,408
Reversal of deferred underwriting cost		-			-			-		-		900,500		-			900,500
Net loss		-			-			-		-		-		(17,279,847	)		(17,279,847	)
Balance, December 31, 2023		1,101		$	-			2,728,168	$	273	$	105,924,859	$	(71,569,821	)	$	34,355,311
Balance		1,101			-			2,728,168		273		105,924,859		(71,569,821	)		34,355,311
Issuance of equity for marketing services		-			-			12,117		1		149,999		-			150,000
Conversion of PIPE shares		(990	)		-			39,600		4		866,245		(866,249	)		-
Restricted stock units		-			-			3,781		-		63,784		-			63,784
Stock compensation cost		-			-			-		-		1,462,366		-			1,462,366
Net loss		-			-			-		-		-		(48,319,475	)		(48,319,475	)
Balance, December 31, 2024		111		$	-			2,783,666	$	278	$	108,467,253	$	(120,755,545	)	$	(12,288,014	)
Balance		111			-			2,783,666		278		108,467,253		(120,755,545	)		(12,288,014	)

See accompanying notes to consolidated financial statements

F-5

SHF Holdings, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2024			2023
	Year ended December 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(48,319,475	)	$	(17,279,847	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense		711,929			1,373,707
Stock compensation expense		1,575,952			3,739,156
Amortization of deferred origination fees		-			-
Operating lease		-			-
Provision (benefit) for credit losses		-			-
Net deferred indemnified loan origination fees		(63,275	)		(45,806	)
Interest expense		-			663,208
Lease expense		23,181			136,097
Credit loss (benefit) expense		(1,393,131	)		290,857
Impairment of goodwill		6,058,000			13,208,276
Impairment of long-lived intangible assets		3,090,881			5,699,464
Deferred tax expense (benefit), net		43,859,686			(1,829,701	)
Marketing expense settled via common stock		100,000			-
Change in fair value of warrant liabilities		(2,803,638	)		1,853,920
Change in the fair value of deferred consideration		(361,449	)		(4,570,157	)
Changes in operating assets and liabilities:
Accounts receivable - trade		(12,734	)		81,183
Accounts receivable - related party		1,127,297			(863,593	)
Contract assets		-			21,170
Prepaid expenses		86,901			(220,852	)
Other current liabilities		527			-
Accrued interest receivable		(2,542	)		(6,460	)
Deferred underwriting payable		-			(550,000	)
Other current assets		(2,967,145	)		40,370
Accounts payable		(76,672	)		(2,515,442	)
Accounts payable - related party		(501,709	)		386,660
Accrued expenses		292,396			(464,424	)
Contract liabilities		6,413			20,926
Security deposit		(916	)		(856	)
Net deferred indemnified loan origination fees		-			-
Net cash provided by (used in) operating activities	$	430,477		$	(832,144	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		-			(208,434	)
Payment to Abaca Shareholder		-			(3,000,000	)
Loan receivable repayment		12,394			1,027,986
Net cash provided by (used in) investing activities	$	12,394		$	(2,180,448	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of senior secured promissory note		(3,006,993	)		(488,834	)
Net share settlement for stock compensation expense		-			-
Net cash used in financing activities	$	(3,006,993	)	$	(488,834	)

Net decrease in cash and cash equivalents		(2,564,122	)		(3,501,426	)
Cash and cash equivalents - beginning of period		4,888,769			8,390,195
Cash and cash equivalents - end of period	$	2,324,647		$	4,888,769

Supplemental disclosure of cash flow information
Interest paid	$	416,852		$	450,258
Non-cash transactions:
Marketing expense settled via common stock	$	50,000		$	-
Shares issued for the settlement of abaca acquisition		-			4,085,076
Operating lease right of use assets recognized		-			-
Operating lease liabilities recognized		-			-
Shares issued for the settlement of PCCU debt obligation		-			38,406,408
Cumulative effect from adoption of CECL		-			581,318
Reversal of deferred underwriting cost		-			900,500
Interest recognized on PCCU settlement		-			639,521
Reclassification of forward purchase receivable		-			-

See accompanying notes to consolidated financial statements

F-6

Note 1. Organization and Business Operations

Business Description

SHF Holdings, Inc. (the “Company”), based in Golden, Colorado, specializes in financial technology designed to facilitate banking service solutions tailored to the cannabis industry. Initially, the Company’s operations were developed as a credit union service organization under PCCU. A strategic reorganization on July 1, 2021 consolidated select assets and activities from PCCU into SHF LLC (“SHF”) under SHF Holding Co., LLC. On September 28, 2022, Northern Lights Acquisition Corp. (“NLIT”) acquired SHF, changing its name from Northern Lights Acquisition Corp. to SHF Holdings, Inc., (the “Business Combination”). The Business Combination aimed to enhance the Company’s financial services footprint in the cannabis sector.

On October 31, 2022, the Company acquired Rockview Digital Solutions, Inc. d/b/a Abaca (“Abaca”). This merger, executed in two steps, positioned Abaca as a wholly-owned subsidiary, bolstering the Company’s fintech offerings and market reach.

The Company facilitates a range of financial services through its financial institution customers using a proprietary technology platform for deposit and ongoing deposit activity compliance with banking regulations and regulators. These include access to business checking and savings accounts, cash management, commercial lending, courier services, remote deposit services, ACH payments, and wire payments. These services enable cannabis businesses to manage their finances effectively. The Company generates revenue from fee income, investment income, loan interest income and by offering compliance services to certain financial institutions serving the cannabis industry.

Note 2. Basis of Presentation and Summary of Significant Accounting Policies

i. Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Material estimates that are particularly subject to change in the near term include the determination of the allowance for credit losses, valuation of deferred tax assets, and the fair value of financial instruments. Actual results could differ from the estimates.

ii. Basis of Presentation

The accompanying consolidated financial statements and related notes have been prepared on the accrual basis of accounting in conformity with GAAP and include the accounts of the Company, and its wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for the fair presentation of the Company’s results of operations and financial condition as of and for the periods presented. All intercompany balances and transactions have been eliminated in consolidation.

The Company has made certain immaterial reclassifications to the statements of operations for the year ended December 31, 2023, to conform to the presentation for the year ended December 31, 2024. These reclassifications, totaling $18,730 for the year ended December 31, 2023, were moved from ‘Interest Expense’ to ‘General and administrative expenses’.

The consolidated financial statements include the accounts of SHF Holdings, Inc. and its subsidiaries where the Company have controlling financial interests. All intercompany balances and transactions have been eliminated except that the par value per share remained $0.0001 per share.

F-7

iii. Reverse Stock Split

The Company effected a reverse stock split of 1-for-20 on March 14, 2025. Unless otherwise stated, all share and per share amounts for all periods presented have been adjusted to reflect the reverse stock split.

SHF Holdings, Inc. S-1