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As filed with the Securities and Exchange Commission on ~~October~~May 206, ~~2025~~2026

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)

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. ☐

~~This~~The Registrant ~~Registration~~hereby ~~Statement~~amends ~~shall~~this ~~hereafter~~registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this registration statement shall thereafter become effective in accordance with ~~the provisions of~~ 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 ~~October~~May 206, ~~2025~~2026

PRELIMINARY PROSPECTUS

SHF HOLDINGS, INC.

5222,~~280~~598,~~646~~184 Shares of Class A Common Stock

This prospectus relates to the potential offer and sale from time to time by the selling stockholders named in this prospectus (each, a “Selling Stockholder”) of 5222,~~280~~598,~~646~~184 shares of Class A common stock, par value $0.0001 (the “Common Stock”), of SHF Holdings, Inc. (“SHF,” the “Company,” “we,” “us,” or “our”).

The 5222,~~280~~598,~~646~~184 shares of Common Stock offered under this prospectus consist of (i) 4921,~~993~~517,~~585~~377 shares of Common ~~Stock~~ ~~issuable upon conversion of Series B Convertible Preferred~~ Stock ~~(the~~underlying ~~“Series~~Common ~~B Preferred~~ Stock”) ~~issued~~purchase ~~and~~warrants ~~sold to certain investors pursuant to a Securities Purchase Agreement, dated~~ (as ofamended ~~September~~and 30restated, ~~2025~~each, bya ~~and between us and such investors (the~~ “Series B ~~SPA~~Warrant”) at ~~the~~an ~~potential~~exercise ~~floor conversion~~ price of $10.~~5528,~~65 ~~(ii)~~per ~~1,999,544~~warrant ~~shares~~share ~~of Common Stock underlying Common Stock purchase warrants~~ (the “~~Series~~Voluntarily BReduced ~~Warrants~~Price”) ~~at the floor exercise price of $1.5528 per warrant share,~~ issued and sold to the investors pursuant to ~~the~~a ~~Series~~Securities BPurchase ~~SPA~~Agreement, ~~(iii)~~dated ~~250,000~~as ~~shares~~ of ~~Common Stock underlying warrants at the~~September ~~exercise price of $40.00 per warrant share~~30, ~~issued~~2025 ~~and sold to the Abaca Holders~~ (~~as defined below) (~~the “~~Abaca Warrants” and together with the~~ Series B ~~Warrants, the “Warrants~~SPA”), ~~pursuant~~by toand anbetween ~~Agreement~~us and ~~Plan~~certain ofinvestors ~~Merger, dated as of October 31, 2022~~ (~~as amended,~~ the “~~Merger Agreement~~Buyers”), by and ~~between~~(ii) us1, ~~SHF Merger Sub I~~080,807 ~~SHF~~shares of ~~Merger~~Common ~~Sub~~Stock ~~II,~~issued ~~LLC,~~to ~~Rockview~~Partner ~~Digital Solutions,~~Colorado ~~Inc.~~Credit ~~d/b/a~~Union ~~Abaca~~ (“~~Abaca~~PCCU”), ~~and~~pursuant ~~Daniel~~to ~~Roda,~~a ~~solely~~Securities inIssuance ~~his~~Agreement, ~~capacity~~dated as ~~the representative~~ of March ~~Abaca’s~~29, ~~securityholders~~ 2023 (the “~~Abaca~~Issuance ~~Holders~~Agreement”), by and ~~(iv)~~between ~~37,517 shares of Common Stock issued on or about October 5, 2025 to~~ the ~~Abaca~~Company ~~Holders~~and ~~pursuant to the Merger Agreement~~PCCU.

WeThe ~~are~~Company ~~registering~~previously ~~the~~filed ~~shares~~a registration statement on ~~behalf~~Form ofS-1 (File No. 333-290979) (the ~~Selling~~“Prior ~~Stockholders,~~Registration Statement”) to beregister, ~~offered~~among ~~and~~other ~~sold~~things, by1,999,544 itshares ~~from~~of ~~time~~Common toStock ~~time.~~underlying Wethe ~~are~~Series ~~not~~B ~~selling any~~Warrants ~~securities~~at ~~under~~an ~~this~~exercise ~~prospectus,~~price ~~and~~of ~~will~~$7.7644. ~~not~~As previously ~~receive~~disclosed, ~~any~~the ~~proceeds~~Company ~~from~~intends ~~the~~to ~~sale~~voluntarily ofreduce ~~Common~~(the ~~Stock~~“Voluntary byReduction”) the ~~Selling~~exercise ~~Stockholders~~price of the Series ~~pursuant~~B Warrants to ~~this~~the ~~prospectus.~~Voluntarily ~~Upon~~Reduced ~~any~~Price ~~exercise~~from of the ~~Warrants~~date bythis ~~payment~~registration ofstatement ~~cash,~~is wedeclared ~~will~~effective ~~receive~~by the ~~exercise~~Securities and ~~price~~Exchange ofCommission ~~such~~(the ~~Warrants~~“SEC”) until July 31, ~~which,~~ if2026 ~~exercised~~(the in“Temporary ~~cash~~Reduction ~~with~~Period”). ~~respect~~In order to ~~all~~comply ofwith the ~~Warrants~~terms ~~outstanding~~of ~~and held by~~ the ~~Selling~~Series ~~Stockholders~~B asSPA ofand the ~~date~~Series ~~hereof~~B Warrants, ~~would~~ ~~result~~the inCompany ~~gross~~is ~~proceeds~~registering toan usadditional 21,517,377 shares of Common ~~approximately~~Stock ~~$24.6~~that ~~million~~will atunderlie the ~~floor~~Series ~~exercise~~B ~~price.~~Warrants ~~However,~~following wethe ~~cannot~~reduction ~~predict when and~~ in ~~what~~the ~~amounts~~exercise orprice ifto the ~~Warrants~~Voluntarily ~~will~~Reduced bePrice. Following ~~exercised~~the byconclusion ~~payments~~ of ~~cash~~the ~~and~~Temporary itReduction isPeriod, ~~possible~~the ~~that~~exercise price of the Series B Warrants ~~may~~will ~~expire~~revert ~~and~~back ~~never~~to bethe current ~~exercised,~~exercise inprice ~~which~~of ~~case~~$1.5528. weSee ~~would~~“Description ~~not~~of ~~receive~~Capital ~~any~~Stock––Preferred ~~cash~~Stock––Series ~~proceeds~~B ~~from~~Preferred ~~their exercise~~Stock––Conversion Rights.”

~~Our~~We ~~Common~~are ~~Stock~~registering isthe ~~listed~~shares on ~~The~~behalf ~~Nasdaq~~of ~~Stock~~the ~~Market~~Selling ~~(the~~Stockholders, ~~“Nasdaq”)~~to ~~under~~be ~~the~~offered ~~symbol~~and ~~“SHFS~~sold by it from time to time.” ~~The~~We ~~last~~are ~~reported~~not selling any securities under this prospectus and will not receive any proceeds from the sale of Common Stock by the Selling Stockholders pursuant to this prospectus. Upon any exercise of the Series B Warrants by payment of cash, we will receive the exercise price of ~~our~~such ~~Common~~Series B ~~Stock~~Warrants, onwhich, if exercised in cash with respect to all of the ~~Nasdaq~~Series onB ~~October~~Warrants 17outstanding and held by the Selling Stockholders as of the date hereof, ~~2025~~would ~~was~~result in gross proceeds to us of approximately $315.783 ~~per~~million ~~share~~at the Voluntarily Reduced Price. WeHowever, we ~~recommend~~cannot ~~that~~predict ~~you~~when ~~obtain~~and ~~current~~in what amounts or if the Series B Warrants will be exercised by payments of cash and it is possible that ~~market~~the ~~quotations~~Series ~~for~~B ~~our~~Warrants ~~Common~~may ~~Stock~~expire ~~prior~~and tonever ~~making~~be anexercised, ~~investment~~in ~~decision~~which case we would not receive any cash proceeds from their exercise.

Our Common Stock is listed on The Nasdaq Stock Market (“Nasdaq”) under the symbol “SHFS.” The last reported sale price of our Common Stock on Nasdaq on May 5, 2026 was $0.81 per share. We recommend that you obtain current market quotations for our Common Stock prior to making an investment decision.

Each 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 Stockholders will offer or sell any of the shares. 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 expense.

We will pay the expenses incurred in registering the shares, including legal and accounting fees. See “Plan of Distribution” on page 80 99 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 1216 of this prospectus and contained in any applicable prospectus supplement and in any ~~free~~ free writing prospectuses we have authorized for use in connection with a specific offering, and under similar headings in the other ~~documents~~ 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~~2026.

TABLE OF CONTENTS

	Page
ABOUT THIS PROSPECTUS	12
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	23
SUMMARY OF RISK FACTORS	46
PROSPECTUS SUMMARY	69
PRIVATE PLACEMENT OF PREFERRED SHARES AND ABACA MERGER SHARES	1015
RISK FACTORS	1216
USE OF PROCEEDS	2430
DETERMINATION OF OFFERING PRICE	2531
MARKET INFORMATION FOR COMMON STOCK AND DIVIDEND POLICY	2532
BUSINESS	2633
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023	37
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024	50
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024	54
MANAGEMENT	78
MANAGEMENT	62
EXECUTIVE AND DIRECTOR COMPENSATION	85
EXECUTIVE AND DIRECTOR COMPENSATION	68
PRINCIPAL STOCKHOLDERS	89
PRINCIPAL STOCKHOLDERS	72
SELLING STOCKHOLDERS	90
SELLING STOCKHOLDERS	73
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	94
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	76
DESCRIPTION OF CAPITAL STOCK	96
DESCRIPTION OF CAPITAL STOCK	78
PLAN OF DISTRIBUTION	99
PLAN OF DISTRIBUTION	80
LEGAL MATTERS	101
LEGAL MATTERS	81
EXPERTS	101
EXPERTS	81
WHERE YOU CAN FIND MORE INFORMATION	101
WHERE YOU CAN FIND MORE INFORMATION	81
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE	101
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 Stockholders 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 such Selling Stockholder of the securities offered pursuant to this prospectus.

Neither we nor the Selling Stockholders 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 Stockholders 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 Stockholders 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 Stockholders and their respective 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 Stockholders and their respective 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, Safe Harbor Retirement Services, LLC and SHF Managed Services, 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.

1This prospectus and the information incorporated herein by reference contains statistical data, market data, and other industry information obtained from government publications and third-party sources. Government sources include the Financial Crimes Enforcement Network (“FinCEN”), the Federal Deposit Insurance Corporation (“FDIC”), and the National Credit Union Administration (“NCUA”). Third-party sources include, among others, CRB Monitor and MJBizDaily. Certain figures in this prospectus and the information incorporated herein by reference, including estimates of the number of financial institutions with dedicated cannabis banking programs, represent management estimates derived from our review of publicly available data and have not been independently verified. We believe all sources referenced herein to be reliable as of the date of, as applicable, this prospectus or the information incorporated herein by reference; however, we have not independently verified the accuracy or completeness of information obtained from third-party publications and cannot guarantee that such information is accurate or complete. Furthermore, internally prepared and third-party market prospective information, in particular, are estimates only and there may be differences between the prospective and actual results because events and circumstances may not occur as expected, and those differences may be material. Also, references in this prospectus and the information incorporated herein by reference to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, reports, surveys or articles. The information in any such publication, report, survey or article is not incorporated by reference in this prospectus or the information incorporated herein by reference.

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 of 1933, as amended (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~~the Company’s 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~~ the Company’s 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. Furthermore, this prospectus and the information incorporated herein by reference may contain forward-looking statements regarding the potential for federal rescheduling of cannabis, the potential passage of the SAFER Banking Act of 2025 (the “SAFER Banking Act”), projected growth of the cannabis market, the potential impact of regulatory changes on the Company’s business, and the anticipated benefits of the Second Amended and Restated Commercial Alliance Agreement (the “Second Amended CAA”). 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 1216 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;

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

● ~~Many~~Liquidity ofrisks ~~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~~jeopardize ~~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 regulations 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,~~funding wesources 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~~increase ~~significant effects on~~ our ~~business;~~interest ●rate ~~There is substantial doubt about our ability to continue as a going concern~~expense; ● The Company’s ability to comply with Nasdaq, 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 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 regulations 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;

●

We are subject to capital adequacy and Nasdaq 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 stockholders 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;

●

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

●

The Company’s ability to comply with Nasdaq, 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 1216 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~~Our isrevenue ~~substantial~~has ~~doubt~~declined assignificantly toin ~~our~~recent ~~ability~~periods, toand ~~continue~~we ascannot aguarantee ~~going~~that ~~concern.~~the ●economics ~~Substantially all~~ of the ~~Company’s~~Second ~~CRB~~Amended ~~clients’~~CAA ~~deposits~~will ~~are~~fully ~~currently~~restore ~~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~~performance. ● ~~The~~Our ~~Company’s~~revenue ~~loan~~has ~~program~~declined isdue ~~currently~~to ~~substantially~~account ~~dependent~~attrition, onlower ~~the regulatory restrictions placed on PCCU~~pricing, ~~currently~~introduction ~~the largest funding source~~ of ~~loans~~money ~~facilitated~~market byaccounts ~~the~~that ~~Company,~~share ~~which~~interest ~~may~~earned ~~limit~~with the ~~types,~~depositor ~~terms~~ and ~~amounts~~reduced oftransaction ~~loans~~activity ~~that~~within ~~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~~cannabis ~~ability to achieve its business goals and its results of operations~~industry. ● ~~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~~Our inrecurring ~~laws,~~operating ~~regulations~~losses ~~or rules, or a failure to comply with any laws, regulations or rules, may adversely affect our business, investments~~ and ~~results~~negative 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~~from beoperations ~~adversely~~raise ~~affected.~~substantial ●doubt Anabout 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~~continue ~~timely~~as ~~and~~a ~~accurate~~going ~~financial statements or comply with applicable laws and regulations could be impaired~~concern.

Risks Related to the ~~Cannabis~~Second ~~Industry~~Amended CAA

● PCCU’s loan program is substantially dependent on the regulatory restrictions placed on PCCU, which may limit the types, terms, and amounts of loans offered. ● The ~~Company~~Second ~~provides~~Amended ~~services~~CAA reinstates an indemnification obligation of up to ~~financial~~65% ~~institutions~~of ~~that~~loan ~~provide~~loss. ~~banking~~● ~~services~~We are required to ~~businesses~~maintain insufficient orbalance ~~ancillary~~sheet resources to ~~the~~support ~~state-licensed~~our ~~cannabis~~indemnification ~~industry~~obligations ~~and~~under the ~~hemp~~Second ~~industry~~Amended CAA. ● Our indemnification obligation is unlimited in amount, ~~which~~and our actual losses could ~~expose~~exceed usour current estimates and our available cash. ● We are required to ~~additional~~maintain ~~liabilities~~sufficient cash and ~~regulatory~~cash ~~compliance~~equivalents ~~cost~~to support our indemnification obligations under the Second Amended CAA. ● PCCU retains final loan approval authority and ~~adversely~~may ~~impact~~decline loans that meet our ~~business,~~underwriting ~~operations~~standards, ~~financial~~which ~~condition,~~could ~~brand~~limit ~~and~~our ~~reputation~~revenue growth. ● ~~The~~One ~~Company,~~borrower ~~its~~represents ~~financial~~approximately ~~institution~~18% ~~customers~~of ~~and~~the ~~their~~total ~~cannabis~~loan ~~related~~portfolio ~~business~~and ~~(“CRB”)~~carries ~~clients~~the ~~are~~second ~~subject~~highest torisk aclassification. ~~variety~~● ofThe ~~laws~~CRB ~~regarding~~loan ~~financial~~portfolio ~~transactions~~is ~~related~~concentrated toentirely in the cannabis industry, ~~which~~and ~~could~~cannabis-specific collateral is subject ~~their~~to ~~CRB~~significant ~~clients~~valuation todiscounts, legal ~~claims~~uncertainties, orand ~~otherwise~~a ~~adversely~~limited ~~affect~~buyer ~~our~~pool ~~business~~in a foreclosure or forced sale. ● WeCertain ~~may~~provisions ~~have~~in ~~difficulty~~the ~~using~~Second ~~bankruptcy~~Amended ~~courts~~CAA ~~due~~create toa ~~our~~direct ~~involvement~~link inbetween ~~the~~our ~~regulated~~listing ~~cannabis~~compliance ~~industry~~and our revenue. ● The ~~conduct~~initial fair value measurement of ~~third~~our ~~parties~~stand-ready ~~may~~guarantee ~~jeopardize~~liability ~~our~~at ~~business~~inception under the Second Amended CAA involves significant estimates and ~~regulatory~~judgment ~~compliance~~and is subject to material uncertainty. ● WeOur ~~may~~ongoing beexpected financial indemnification liability under the CECL standard (ASC 326) requires quarterly ongoing remeasurement and is subject to ~~constraints~~material uncertainty. ● We are dependent on ~~marketing~~third ~~our~~parties, ~~services~~including PCCU and other service providers, ~~which~~for ~~could~~certain ~~adversely~~critical ~~impact~~services, ~~our~~and ~~results~~disruptions ofat ~~operations~~PCCU would directly and ~~our~~immediately ~~growth~~impair ~~opportunities~~our operations. ● ~~Service~~Loan ~~providers~~program toincome ~~cannabis~~(formerly ~~businesses~~loan ~~may~~interest beincome) ~~subject~~could todecline ~~unfavorable~~under ~~U.S.~~the ~~tax~~Second ~~treatment.~~Amended ●CAA ~~Cannabis~~if ~~businesses~~the ~~may~~indemnity bereserve ~~subject~~would cause our shareholders’ equity to ~~civil~~drop ~~asset~~below ~~forfeiture~~the Nasdaq Listing Requirements to maintain compliance.

4Risks Related to the Cannabis Industry and Regulatory Environment

● ~~Because~~We wehave ~~provide~~agreements ~~services~~with tofinancial ~~companies~~institutions that provide banking services to CRBs, wewhich ~~may~~exposes ~~have~~us ~~a difficult time obtaining the various insurances that are desired~~ to ~~operate~~additional ~~our business~~liabilities, ~~which~~regulatory ~~may~~compliance ~~expose~~costs, ~~us to additional risk~~ and ~~financial~~reputational ~~liability~~risk. ● ~~There~~Non-medicinal ~~may~~cannabis beremains ~~difficulty~~a ~~enforcing~~Schedule ~~certain~~I ofcontrolled ~~our~~substance ~~commercial~~under ~~agreements~~federal ~~and contracts. ● Directors~~law, ~~officers, employees~~ and ~~investors~~changes ~~who~~in ~~are~~federal ~~not~~enforcement ~~U.S.~~policy ~~citizens~~or ~~may~~the ~~face~~scheduling ~~constraints~~status onof ~~cross-border~~cannabis ~~travel~~could ~~into~~affect ~~the~~our ~~United~~business ~~States because of their involvement~~ in ~~the~~unpredictable ~~cannabis industry~~ways.

~~Risks Related to the Company’s Organization and Structure~~6

● The Company, ~~depends~~our onfinancial ~~key~~institution ~~management~~customers, ~~personnel~~ and ~~other~~our ~~experienced~~CRB ~~employees.~~clients ●are ~~Failure~~subject byto ~~the~~complex ~~Company’s~~federal ~~directors~~and state laws governing financial transactions related to cannabis, ~~officers~~which orcould ~~employees~~subject them to ~~comply~~legal ~~with~~claims ~~applicable~~or ~~policies~~restrict their activities. ● State-level regulatory changes, ~~regulations~~including market saturation, license non-renewals, and ~~rules~~changes to cannabis program structures, could ~~materially~~impair borrower viability and ~~adversely~~increase ~~affect~~the uscredit risk in the portfolio we indemnify. ● ~~Changes~~Because incannabis ~~accounting~~remains ~~rules~~federally illegal, ~~assumptions~~CRB orborrowers ~~judgments~~generally ~~could~~cannot ~~materially~~access ~~and~~bankruptcy ~~adversely~~protections ~~affect~~but instead work through the ~~Company~~receivership process, which complicates loan workouts and could increase our loss given default. ● IfService ~~the~~providers ~~Company~~to ~~fails~~cannabis businesses may be subject to ~~implement~~unfavorable ~~and~~U.S. ~~maintain~~federal anincome ~~effective~~tax ~~system~~treatment, including potential disallowance of ~~internal~~ordinary ~~controls~~business deductions under Section 280E. ● Cannabis businesses may be subject to civil asset forfeiture under federal law, itwhich could result in the loss of collateral securing loans in our portfolio. ● We may ~~not~~have bedifficulty ~~able~~enforcing certain of our commercial agreements and contracts related to ~~accurately~~cannabis-adjacent ~~determine~~services. ~~its~~● Because we serve cannabis-related businesses, we may have difficulty obtaining certain insurance coverages, which could expose us to additional financial ~~results~~liability. or● ~~prevent~~The ~~fraud~~conduct of third parties, including our CRB clients and their financial institution providers, may jeopardize our regulatory compliance and business relationships. As● aDirectors, ~~result~~officers, employees, and investors ~~could~~who ~~lose~~are ~~confidence~~not U.S. citizens may face cross-border travel restrictions into the United States due to their involvement in the ~~Company’s~~cannabis ~~financial~~industry. ~~results,~~● ~~which~~We ~~could~~may ~~materially~~be subject to marketing and ~~adversely~~advertising ~~affect~~constraints ~~the~~on ~~Company~~promoting our services to cannabis-related businesses, which could limit our growth.

Risks Related to anNasdaq ~~Investment~~Listing ~~in Our Securities~~Compliance

● ~~There~~Our ~~can~~Common beStock nohas ~~assurance~~previously ~~that~~traded webelow ~~will be able to comply with the continued listing standards of Nasdaq~~$1.00 ●per ~~The~~share, ~~market~~and ~~for~~if ~~our~~it ~~securities~~were ~~has~~to ~~been volatile and may~~ continue to betrade ~~volatile,~~below ~~which would adversely affect the liquidity and price of our securities~~$1.00 ●in ~~The Company may issue additional shares of common or preferred stock under~~ the ~~Equity Incentive Plan or otherwise~~future, ~~any~~it ~~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~~create ~~below~~an ~~the~~imminent ~~expectations~~risk of ~~securities analysts and investors due to seasonality and other factors, some of which are beyond~~ our ~~control,~~securities ~~resulting~~being indelisted afrom ~~decline in our stock price~~Nasdaq. ● IfA ~~securities~~proposed ornew ~~industry~~Nasdaq ~~analysts~~rule dowould ~~not~~delist ~~publish~~companies orwhose ~~cease~~market ~~publishing~~capitalization ~~research~~falls orbelow ~~reports~~$5 ~~about~~million ~~the~~for ~~Company,~~30 ~~its business,~~ or ~~its~~more ~~market,~~consecutive ~~or if they change their recommendations regarding our Common Stock adversely, then the price and~~ trading ~~volume of the Common Stock could decline~~days. ● WeA ~~may~~delisting ~~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~~materially impair our ~~stockholder’s~~ ability to ~~obtain~~make afuture ~~favorable~~draws ~~judicial~~under ~~forum~~the ~~for disputes with us or our directors, officers, employees or stockholders~~ELOC. ● 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~~Our ~~Offering~~Capital Structure and Securities

● ItThe isconversion ~~not~~of ~~possible~~our toSeries ~~predict~~B ~~the~~Preferred ~~actual~~Stock, ~~number~~exercise of ~~shares~~Series ofB ~~our Common Stock~~Warrants, ifand ~~any,~~future wedraws ~~will sell~~ under the ~~Purchase~~ELOC ~~Agreement,~~could orresult ~~the~~in ~~actual~~substantial ~~gross proceeds resulting from those sales or the~~ dilution to ~~you~~existing ~~from~~holders ~~those~~of ~~sales.~~our ~~Further,~~Common ~~we may not have access to the full amount available under the Purchase Agreement~~Stock. ● The ~~Selling~~ELOC ~~Stockholders~~is ~~will~~an ~~pay~~active ~~less~~financing ~~than~~facility, ~~the~~its ~~then-prevailing~~pricing ~~market~~and ~~price~~redemption ~~for~~mechanics ~~our~~significantly ~~Common~~reduce ~~Stock,~~our ~~which~~net ~~could~~proceeds ~~cause~~on ~~the~~each ~~price~~draw ofand ~~our~~increase ~~Common~~dilution ~~Stock~~ to ~~decline~~existing stockholders. ● ~~Investors~~Our ~~who~~Series ~~buy~~B ~~shares~~Preferred ofStock ~~Common~~and ~~Stock~~Series ~~from~~B ~~the~~Warrants ~~Selling~~contain ~~Stockholders~~anti-dilution atand ~~different~~reset ~~times~~provisions ~~will~~that ~~likely~~could ~~pay~~further ~~different~~dilute ~~prices~~common stockholders. ● ~~Future~~Our ~~resales and/or issuances of shares of~~ Common Stock, ~~including~~price ~~pursuant~~may tobe ~~this~~highly ~~prospectus~~volatile, orand ~~the~~stockholders ~~perception that such sales~~ may ~~occur,~~not ~~may~~be ~~cause~~able ~~the~~to ~~market~~sell ~~price~~their ofshares ~~our~~at ~~shares~~or toabove ~~drop~~their ~~significantly~~purchase price. ● WeThe ~~may~~soundness ~~use~~of ~~proceeds~~our ~~from~~financial ~~sales~~institution ofcustomers ~~our~~and ~~Common~~partners ~~Stock~~could ~~made~~adversely ~~pursuant~~affect tous. ~~the~~● ~~Purchase~~Our ~~Agreement~~investment in ~~ways~~preferred ~~with~~securities ~~which~~of ~~you~~ADTX ~~may~~is ~~not~~illiquid, ~~agree~~subject orto inimpairment, ~~ways~~and ~~which~~ may ~~not~~result ~~yield~~in a ~~significant~~partial ~~return~~or total loss.

5Risks Related to Internal Controls and Financial Reporting

	●	The Second Amended CAA introduces significant new accounting complexity that involves material judgment and estimation uncertainty.
	●	One material weakness in revenue recognition related to our activity fee income from deposits held at PCCU has been remediated, however sufficient time has not passed for us to conclude that it is operating effectively.
	●	We have identified a material weakness in internal control over financial reporting related to our loan documentation and expected credit loss estimation process, which could result in a material misstatement of our financial statements.

Risks Related to Legal Proceedings and Regulatory Compliance

	●	An adverse outcome in litigation to which we are or may become a party could materially and adversely affect us.
	●	Changes in laws, regulations, or rules applicable to cannabis banking, financial services, or public company reporting could adversely affect our business and results of operations.
	●	An interruption in, or breach of security of, our information systems could adversely affect us.
	●	We may suffer uninsured losses or losses in excess of our insurance limits.
	●	Recent developments in shareholder litigation against us on certain counterclaims could result in a material adverse effect on our financial position, results of operations, and cash flows.

Risks Related to 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.
	●	The Certificate of Designation governing our Series B Preferred Stock contains covenants that may limit our business flexibility.

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~~Founded ~~Company was founded~~ in 2015 asby aPCCU, ~~solution~~SHF towas aamong ~~major problem that plagued~~ the ~~nascent~~first ~~legalized~~companies ~~cannabis industry in Colorado - access~~ to ~~reliable~~provide ~~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~~lending ~~legitimacy~~services to ~~the~~cannabis ~~legal~~related ~~state~~businesses (“CRBs”). ~~From~~Our ~~decades~~mission ofis ~~regulatory and banking experience, we created a detailed compliance program~~ to ~~assist financial institutions desiring to~~ provide ~~safe~~reliable, ~~and~~compliant ~~sound~~ financial services ~~that~~to ~~would accomplish industry accountability and protect~~ the ~~financial~~legal ~~system. The compliance program provides onboarding~~cannabis, ~~validation and monitoring services to financial institutions desiring to provide traditional banking services to all types of marijuana,~~ hemp, and ~~CBD~~related ~~businesses,~~industries ~~and~~by toenabling ~~ancillary~~financial institution ~~businesses~~customers ~~that provide services~~ to ~~the~~offer ~~cannabis~~compliant ~~industry. These ancillary businesses include payroll companies~~banking, ~~payment processors~~lending, and ~~professionals~~other ~~providing~~financial 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~~provide tocompliance ~~support our mission by providing unparalleled client~~ and ~~customer~~loan ~~service~~origination ~~while~~services ~~offering~~to afinancial ~~unique~~institutions ~~array~~that ofwish ~~innovative~~to ~~technology-based products~~offer ~~and~~business ~~services. We believe that our unique~~ banking ~~relationships~~, ~~reputation~~private ~~of reliability in the cannabis industry~~banking, ~~as well~~and ascommercial ~~our~~banking ~~deep~~services ~~expertise~~to ~~and~~clients ~~experience~~operating in ~~the~~or ~~industry~~adjacent ~~will position us~~ to ~~serve~~the astate-legal ~~broad range of~~ cannabis industry. ~~participants,~~Through ~~including cannabis~~our ~~and~~proprietary ~~hemp cultivators, processors, manufacturers, dispensaries, multi-state operators, as well as the financial institutions~~technology ~~that wish to bank cannabis and hemp industry participants. Since 2015~~platform, wewhich ~~have~~currently ~~facilitated~~operates ~~more than $25.6 billion in deposit activity~~ across ~~a footprint of~~ 41 states and territories, ofwe ~~the~~enable ~~United~~our ~~States. Through its relationship with its~~ financial institution customers~~, the~~ ~~Company~~to ~~has~~compliantly ~~successfully~~provide the ~~navigated~~following ~~over~~services 16to ~~state and federal banking exams.~~CRBs:

~~Through a~~● ~~combination~~Business ofchecking ~~organic growth, increased commercial lending,~~ and ~~further~~savings 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.accounts;

~~Background and~~● ~~Recent~~Cash ~~Developments~~management accounts;

~~Background~~● Savings and investment options;

~~The Company~~● ~~has~~Commercial 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.lending;

6● Courier services (via third-party relationships);

~~Through the~~● ~~Company’s~~Remote ~~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.;

●

Automatic Clearing House (“ACH”) payments and origination; and

●

Wire payments.

Our core service offerings include:

●

Regulatory compliance consulting and technology: We provide our financial institution customers with the tools and support needed to maintain “Know Your Customer” (“KYC”), Anti-Money Laundering (“AML”) and Bank Secrecy Act (“BSA”) compliance, principally delivered through our proprietary financial services platform. Specific compliance services include initial customer due diligence, customer application management, program management support, compliance monitoring, and regulatory examination assistance.

●

Cannabis-related deposit services: We originate, onboard, verify, and service cannabis-related deposit business for and on behalf of our financial institutions, primarily PCCU, and constitute obligations solely of those institutions; the Company is not a financial institution and does not hold customer deposits on its consolidated balance sheet. Because most CRBs transact with high volumes of cash due to the limited availability of traditional banking services, we believe our platform benefits both CRBs and financial institutions by providing CRBs access to compliant banking and giving financial institutions access to increased, compliantly monitored deposits.

●

Lending services: We source, underwrite, service, and administer loans issued to cannabis businesses and related entities, many of which are also clients of our partner financial institutions.

We generate revenue through fee income, investment income, and loan program income earned by providing these compliance and lending services to financial institutions serving the cannabis industry.

Our Mission

Our mission is to serve as the trusted financial partner to CRBs and the financial institutions that serve them by providing the compliance infrastructure, lending access, and operational support to allow them to operate, grow, and succeed in a highly regulated industry. We are committed to being the most reliable and knowledgeable financial services provider in the cannabis sector, and to expanding the range of services we offer as the industry matures.

We believe our competitive position is based on four strengths that are difficult to replicate: a decade of demonstrated experience navigating the regulatory requirements and passing many audits of cannabis banking; deep cannabis domain expertise amongst our employees and management and long-standing relationships with both CRBs and the financial institutions that serve them; and a proprietary compliance platform that has processed approximately $35.4 billion in cannabis-related deposit activity across 41 states and territories since 2015. These capabilities allow us to serve a broad range of cannabis industry participants, including cultivators, processors, manufacturers, dispensaries, and multi-state operators, as well as the financial institutions that wish to bank them.

Recent Developments

OnProduct 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.Developments

OnIn ~~September~~April 92026, ~~2025,~~ the Company ~~issued~~announced anthe ~~additional~~launch ~~Note~~of tothe anSafe ~~accredited~~Harbor ~~investor~~Retirement inPlan, a pooled employer 401(k) plan designed specifically for state-legal cannabis businesses and the ~~principal~~companies ~~sum~~that ofserve ~~$125~~them,~~000~~ (as well as an expansion in the ~~“September~~financing solutions we offer to ~~Note”)~~CRBs. ~~The~~These ~~September~~solutions ~~Note~~are isdesigned ~~identical~~ to meet the ~~Notes~~operational ~~issued~~and ongrowth ~~August~~needs ~~27,~~of ~~2025~~CRBs.

OnNasdaq September 17, 2025, the Company entered into the Purchase Agreement with CREO Investments, LLC (“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 to CREO $1,000,000 in stated value of certain preferred stock of the Company (the “Commitment Shares”), following the creation of such preferred stock. 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”).Letter

On ~~September~~April 3022, ~~2025~~2026, the Company ~~and~~received ~~CREO~~a ~~entered~~letter ~~into~~from anthe ~~amendment~~listing toqualifications ~~the~~department ~~Purchase~~staff ~~Agreement~~of ~~whereby~~Nasdaq notifying the Company ~~agreed~~that ~~to apply 25%~~for ofthe ~~any~~last ~~net~~30 ~~cash~~consecutive ~~proceeds~~business ~~from~~days the ~~sale~~Company ofdid ~~shares~~not ofmaintain ~~its~~a ~~Common~~minimum ~~Stock~~closing ~~pursuant~~bid toprice ~~the Purchase Agreement towards the redemption~~ of ~~the Series B Preferred Stock~~$1.00 ~~The~~per ~~issuance~~share offor ~~such~~its ~~shares~~common isstock, as ~~solely~~required atby ~~our~~Nasdaq ~~discretion~~Marketplace ~~and~~Rule is5550(a)(2). ~~subject~~See to“––Nasdaq ~~conditions~~Listing ~~contained~~Compliance” inbelow ~~the~~for ~~Purchase~~additional ~~Agreement, the satisfaction of which are entirely outside of CREO’s control~~detail.

OnBoard September 30, 2025, the Company entered into a Securities Purchase Agreement (the “Series B SPA”) with the investors party thereto (the “Buyers”), pursuant to which, subject to the terms and conditions set forth therein, the Company agreed to issue and sell to the Buyers an aggregate of 31,052 shares of the Company’s Series B Convertible Preferred Stock, $0.0001 par value per share (the “Series B Preferred Stock”) and related warrants (the “Original Series B Warrants”) initially to acquire an aggregate of 1,999,544 shares of the Company’s Common Stock, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events. The exercise price per warrant share is $7.7644, subject to adjustment as provided therein.Directors

On ~~October~~April 1420, ~~2025~~2026, ~~the~~Sundie ~~Company~~Seefried ~~entered~~tendered ~~into~~her anresignation ~~Amendment~~as ~~No.~~a 1member toof ~~Securities~~on ~~Purchase~~our ~~Agreement~~board of directors (~~the~~“Board of Directors” or “~~Amendment~~Board”),. ~~with each Buyer, effective September 30, 2025~~Ms. ~~Pursuant to each Amendment, such Buyer~~Seefried’s ~~Original~~departure ~~Series B Warrant~~ was ~~amended~~not ~~and restated (as amended and restated, each, a “Series B Warrant”) to correct~~ the ~~exercisability~~result ~~date~~of ~~from~~any ~~six~~disagreement ~~months~~with ~~and one day after~~ the ~~Issuance~~ ~~Date~~Company ~~(as~~on ~~defined~~any inmatter ~~the~~relating ~~Series B Warrant)~~ to its ~~six~~operations, ~~months~~policies ~~and~~or ~~one day after the Applicable Date (as defined in the Series B Warrant)~~practices.

~~Subject~~On toApril ~~the~~22, ~~terms of the Warrant~~2026, ~~each Warrant is exercisable at any time on or after~~ the ~~six~~Board ~~month~~appointed ~~and~~each ~~one day anniversary~~ of ~~the~~Sean ~~Applicable Date~~Tonner ~~(as defined in the Series B SPA). The Warrants expire upon the third anniversary of such Initial Exercisability Date. Subject to the terms~~ and ~~conditions~~Tyler ofKlimas ~~the Certificate of Designation (~~as ~~defined below)~~directors, ~~the~~effective ~~Series B Preferred Stock is convertible~~ immediately ~~upon issuance~~, and the ~~conversion~~Board ~~price~~also ~~is $7.7644 per share, subject to adjustment as provided therein. The aggregate purchase price~~approved ~~paid~~an byincrease ~~the Buyers to the Company pursuant to the Series B SPA was approximately $28.8 million, resulting~~ in ~~approximately $6.3 million in additional cash to~~ the ~~Company.~~number This purchase price includes certain Buyers that paid for the securities acquired pursuant to the Series B SPA, in whole or in part, by (i) cancelling outstanding Indebtedness (as defined in the Series B SPA) or securities of ~~the~~directorships ~~Company,~~on ~~(ii) cancelling amounts owed to such Buyer by~~ the ~~Company,~~Board ~~including~~from ~~the~~five ~~Commitment Shares owed~~ to ~~CREO, and/or (iii) transferring assets, including third-party securities, to the Company~~six. Certain members of the Company’s management and board participated in the transaction as Buyers, however the issuance to such members of management of the shares of Common Stock underlying the Series B Preferred Stock and Warrants is subject to stockholder approval under Nasdaq Listing Rule 5635(c). The Company received net proceeds of approximately $6.1 million in connection with the transactions contemplated by the Series B SPA.

InEmerging connection with the execution of the Series B SPA, the Company entered into a Registration Rights Agreement with the Buyers on the Closing Date (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company agreed, among other things, to file a registration statement on Form S-1 with the SEC as soon as practicable, but in no event later than October 29, 2025, to register the Common Stock underlying the Series B Preferred Stock and the Series B Warrants for resale by the Buyers.Markets

OnIn ~~September~~March 302026, ~~2025,~~we ~~the~~announced ~~Company~~that ~~entered~~emerging ~~into a Debt Cancellation Agreement (the “Debt Cancellation Agreement”) with Partner Colorado Credit Union (“PCCU”)~~U.S. Asmarket ~~previously~~average ~~disclosed,~~deposit ~~the~~balances ~~Company~~increased ~~and PCCU entered into a Senior Secured Promissory Note and Security Agreement (the “Loan Agreements”) on March~~ 29,% ~~2023~~over ~~whereby PCCU agreed to make loans to~~ the ~~Company~~twelve inmonths ~~the aggregate~~ended ~~principal~~February ~~amount of $14.5 million. Pursuant to the terms of the Debt Cancellation Agreement~~4, ~~the outstanding principal amount~~2026, ofdriving ~~all~~total ~~loans~~average ~~made~~deposit tobalances ~~the~~up ~~Company under the Loan Agreements, or approximately $10~~4.~~7 million~~5%, ~~was deemed repaid~~ and ~~the~~that ~~obligations~~emerging ~~of the~~U.S. ~~Company~~markets represented ~~thereby~~31% ~~with respect to such principal amount was deemed to be satisfied in full and cancelled in exchange for 13,436 shares~~ of the Company’s ~~Series~~average Bdeposit balances ~~Preferred~~at ~~Stock~~the ~~and~~time ~~a Series B Warrant to purchase 865,200 shares~~ of ~~Stock, subject to adjustment as provided in~~ the ~~Series B Warrant~~announcement.

~~Exchange and Cancellation Agreements~~10

On420 ~~September~~IT ~~30,~~Solutions 2025, the Company entered into Exchange and Cancellation Agreements (each, an “Exchange and Cancellation Agreement”) with each of Verdun Investments LLC (“Verdun”), Vellar Opportunity Fund SPV LLC – Series 1 (“Vellar”), and Midtown East Management NL,LLC (“Midtown” and, together with Verdun and Vellar, the “Sellers”). As previously disclosed, on June 16, 2022 the Company and Midtown entered into a Forward Purchase Agreement (the “FPA”), which was subsequently assigned by Midtown to each of Vellar and Verdun. Pursuant to the terms of the Exchange and Cancellation Agreement, the Company issued a certain number of shares of Series B Preferred Stock and Warrants to the Sellers in exchange for each Seller agreeing to irrevocably cancel, waive and forego all of its rights under the FPA and to terminate the FPA. The Company issued (i) 1,607 shares of Series B Preferred Stock and a Warrant to purchase 103,485 shares of Common Stock to Verdun, (ii) 2,070 shares of Series B Preferred Stock and a Warrant to purchase 133,301 shares of Common Stock to Midtown, and (iii) 1,325 shares of Series B Preferred Stock and a Warrant to purchase 85,325 shares of Common Stock to Vellar. The number of shares of Common Stock purchasable under the Warrants is subject to adjustment as provided therein.Acquisition

AsOn ~~previously~~December ~~disclosed~~19, ~~on August 27~~2025, ~~2025~~Safe ~~and~~Harbor ~~September~~Managed 9Services LLC, ~~2025~~a wholly-owned subsidiary of the Company, ~~issued~~completed ~~Convertible~~the ~~Promissory~~acquisition ~~Notes~~of (substantially all of the assets of LBMW LLC, a Delaware limited liability company doing business as 420 IT Solutions (“~~Notes~~420 IT Solutions”). to420 ~~certain~~IT ~~accredited~~Solutions ~~investors~~is ~~with~~engaged anin ~~aggregate~~the ~~principal~~business ~~sum~~ of ~~$687,500.~~providing Onthird-party ~~September~~professional ~~30,~~advisory ~~2025,~~and ~~these~~technology ~~Notes~~services ~~were~~to ~~exchanged~~the ~~for~~cannabis anindustry. The aggregate purchase price for the acquired assets consisted of ~~825~~125,000 shares of ~~Series~~the BCompany’s ~~Preferred~~Class A Common Stock ~~and~~or ~~Series~~Common Stock B(the ~~Warrants~~“Earnout toShares”), ~~purchase~~plus anthe ~~aggregate~~assumption of 53certain identified liabilities under contracts assigned to the Company. The Earnout Shares are subject to performance-based vesting over a two-year earnout period ending December 31,~~127~~ ~~shares~~2027. The acquisition included the transfer of ~~Common~~customer ~~Stock~~contracts, the registered trademark “420 IT Solutions”, domain name registrations, and ~~subject~~other intellectual property. No cash consideration was paid at closing. In connection with the acquisition, 420 IT Solutions’ founders joined the Company to ~~adjustment~~lead asthe ~~provided~~third-party inprofessional advisory and technology services division. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the ~~Series~~Years Bended ~~Warrant~~December 31, 2025 and 2024––Acquisition of 420 IT Solutions.”

7Second Amended CAA

During the fourth quarter of 2025, SHF LLC, a wholly-owned subsidiary of the Company, and PCCU reached agreement on the material economic terms of the Second Amended CAA on or about October 1, 2025, following completion of the September 2025 Recapitalization (as defined below). The written agreement was formally executed on February 4, 2026; the intervening period involved only procedural and documentation matters that did not affect the substance of the agreed terms. Accordingly, the Company has given effect to the Second Amended CAA from October 1, 2025, consistent with Accounting Standards Codification (“ASC”) 606 contract modification guidance. Under the Second Amended CAA, we receive up to 65% of loan program income generated by PCCU’s CRB loan portfolio, an increase from the approximately 35% share in effect under the Amended and Restated Commercial Alliance Agreement, dated December 30, 2024, by and between the Company and PCCU (the “First Amended CAA”). In exchange, we are obligated to indemnify PCCU for up to 65% of net losses on any loan default covered by the Second Amended CAA. See “Risk Factors––Risks Related to the Second Amended CAA” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Relationship with PCCU.”

September 2025 Recapitalization

On August 27, 2025, the Company issued Convertible Promissory Notes (the “Notes”) to certain accredited investors with an aggregate principal amount of $0.6 million, a 20% original issue discount (“OID”) and maturity date of September 9, 2026. The conversion price of the Notes is the lesser of (i) a twenty percent (20%) discount to the average volume-weighted average price (“VWAP”) 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. On September 9, 2025, the Company issued an additional Note to an accredited investor in the principal amount of $0.1 million on identical terms, bringing the aggregate principal amount to $0.7 million.

On September 17, 2025, we established the Equity Line of Credit (“ELOC”) with CREO Investments LLC (“CREO”), which provided we may sell to CREO up to $150 million of Common Stock and granted us and CREO the mutual right to agree to increase this amount to $500 million.

On September 30, 2025, all outstanding Notes were exchanged for an aggregate of 825 shares of the Series B Convertible Preferred Stock (“Series B Preferred Stock”) and Series B Warrants to purchase 53,127 shares of Common Stock. Also on September 30, 2025, the Company entered into Exchange and Cancellation Agreements (each, an “Exchange and Cancellation Agreement”) with each of Midtown East Management NL, LLC (“Midtown”), Verdun Investments LLC (“Verdun”) and Vellar Opportunity Fund SPV LLC – Series 1 (“Vellar”) relating to a Forward Purchase Agreement (the “FPA”) that the Company initially entered into on June 16, 2022. In exchange for each counterparty irrevocably cancelling, waiving, and terminating all of their rights under the FPA, the Company issued an aggregate of 5,002 shares of Series B Preferred Stock and Series B Warrants to initially purchase 322,111 shares of Common Stock.

We refer to these Notes transactions, the entrance into the ELOC and the termination of the FPA collectively as the “September 2025 Recapitalization.” The September 2025 Recapitalization eliminated approximately $18 million in debt and raised over $6.7 million in new capital and also resulted in the establishment of the $150 million ELOC that can potentially be expanded to $500 million, thereby meaningfully improving our ability to support our lending commitments and portfolio growth. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Relationship with PCCU” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Gain on Extinguishment of Debt.”

Exchange Listing

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

Nasdaq Listing Compliance

As of ~~June~~December 3031, 2025, our stockholders’ ~~deficit~~equity ofwas approximately $178.92 million, ~~was~~or $205.47 million ~~below~~above the $2.5 million minimum equity requirement for continued listing on Nasdaq under Nasdaq Listing Rule 5550(b)(1). WeOn April 22, 2026, the Company received a ~~deficiency~~letter ~~notice~~ from the listing qualifications department staff of Nasdaq ~~regarding~~notifying ~~this~~the ~~noncompliance~~Company that for the last 30 consecutive business days the Company did not maintain a minimum closing bid price of $1.00 per share for its common stock, as required by Nasdaq Marketplace Rule 5550(a)(2). ~~and~~The wenotice ~~submitted~~had no immediate effect on the listing of the Company’s common stock or warrants. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company was provided with a compliance ~~plan~~period onof ~~May~~180 22calendar days, ~~2025~~or until October 19, 2026, to regain compliance with the minimum bid price requirement. The notice states that to regain compliance the closing bid price of the Company’s common stock must meet or exceed $1.00 for a minimum of 10 consecutive business days.

OnIf ~~April 7, 2025,~~ the Company ~~received a notice from Nasdaq indicating that it no longer met the continued listing requirements. The Company~~ does not ~~meet~~regain ~~the~~compliance ~~alternative~~by ~~criteria~~October ~~for continued listing~~19, ~~which are based on the market value of listed securities or net income from continuing operations Specifically~~2026, the Company’s ~~stockholders’ equity~~may ~~was~~be ~~below~~eligible ~~the~~for ~~minimum~~a ~~required~~second ~~stockholders’ equity of $2.5 million as stipulated by Nasdaq’s Listing Rule 5550(b)(1) (“Rule 5550(b)(1)”). A~~ compliance ~~plan~~period ~~was~~for ~~submitted~~up to ~~Nasdaq~~an ~~on May 22, 2025, and Nasdaq confirmed receipt~~additional of180 ~~our compliance plan~~days. AsThe aCompany ~~result~~intends ofto ~~the~~actively ~~recent~~monitor ~~preferred equity financing, Nasdaq informed~~ the ~~Company~~bid ~~that~~price itand ~~has~~may ~~regained compliance~~evaluate ~~with~~other ~~Rule~~available ~~5550(b)(1).~~options Into ~~that~~resolve ~~regard,~~ the ~~Company~~deficiency ~~believes that its stockholders’ equity exceeds $2.5 million,~~ and ~~SHF~~regain ~~anticipates~~compliance ~~that~~with the ~~information~~Nasdaq ~~contained~~Marketplace ~~in its Quarterly Report on Form 10-Q for the period ended September 30, 2025, will reflect this~~Rules. ~~The Company also believes that its stockholders’ equity will continue to exceed $2.5 million as of December 31, 2025.~~

~~There~~In ~~can~~addition, bethe noCompany ~~assurance~~is aware of a proposed new Nasdaq rule filed with the SEC on January 13, 2026, that would require listed companies to maintain a minimum market value of listed securities of at least $5 million. Under the proposed rule, if a company’s market value of listed securities falls below $5.0 million for 30 consecutive business days, Nasdaq would immediately suspend trading and delist the company’s securities without a cure period and without a stay of suspension during any appeal. The SEC has extended its review period and is expected to make a decision on this proposed rule in the summer of 2026. If adopted, the rule would become effective 60 days after SEC approval. Based on the Company’s ~~will~~current stock price and number of shares outstanding as of the date of this filing, the Company may not be ~~able maintain~~in compliance with ~~any~~this ~~other~~proposed ~~Nasdaq~~ requirement inat the ~~future.~~time of its adoption and could be subject to immediate delisting as soon as 30 business days after the rule takes effect

There can be no assurance that the Company will be able to regain and/or maintain, as applicable, compliance with this or any other Nasdaq requirement in the future. See “Risk Factors––Risks Related to Nasdaq Listing Compliance––Our Common Stock has previously traded below $1.00 per share, and if it were to continue to trade below $1.00 in the future, it could create an imminent risk of our securities being delisted from Nasdaq.”

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.12

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, which is December 31, 2026, 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. The Company will cease to be an EGC on December 31, 2026.

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 1526 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 Stockholders		Up to 52,280,646 shares of our Common Stock. We are registering the number of shares of Common Stock issuable under the Purchase Agreement assuming the floor conversion price of $1.5528 for the Series B Preferred conversion.
Shares of Common Stock outstanding immediately prior to this offering		2,953,473 shares (as of October 16, 2025).
Shares of Common Stock outstanding immediately following to this offering		Up to 55,234,119 shares, assuming immediate (i) conversion of all the Preferred Stock, and (ii) exercise of all Warrants.
Terms of the offering		Each 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		Each 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 Stockholders pursuant to this prospectus. Upon any exercise of the Warrants by payment of cash, we will receive the exercise price of such Warrants, which, if exercised in cash with respect to all of the Warrants outstanding and held by the Selling Stockholders as of the date hereof, would result in gross proceeds to us of approximately $15.5 million. However, we cannot predict when and in what amounts or if the Warrants will be exercised by payments of cash and it is possible that the Warrants may expire and never be exercised, in which case we would not receive any cash proceeds from their exercise. We intend to use any net proceeds from the exercise of Warrants 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.

PRIVATE PLACEMENT OF PREFERRED SHARES AND ABACA MERGER SHARES

This prospectus relates to the potential offer and sale from time to time by the selling stockholders named in this prospectus (each, a “Selling Stockholder”) of 52,280,646 shares of Class A common stock, par value $0.0001 (the “Common Stock”), of SHF Holdings, Inc. (“SHF,” the “Company,” “we,” “us,” or “our”).

The 52,280,646 shares of Common Stock offered under this prospectus consist of (i) 49,993,585 shares of Common Stock issuable upon conversion of Series B Convertible Preferred Stock (the “Series B Preferred Stock”) issued and sold to certain investors pursuant to a Securities Purchase Agreement, dated as of September 30, 2025, by and between us and such investors (the “Series B SPA”) at the potential floor conversion price of $1.5528, (ii) 1,999,544 shares of Common Stock underlying Common Stock purchase warrants (the “Series B Warrants”) at the floor exercise price of $1.5528 per warrant share, issued and sold to the investors pursuant to the Series B SPA, (iii) 250,000 shares of Common Stock underlying warrants at the exercise price of $40.00 per warrant share, issued and sold to the Abaca Holders (as defined below) (the “Abaca Warrants” and together with the Series B Warrants, the “Warrants”), pursuant to an Agreement and Plan of Merger, dated as of October 31, 2022 (as amended, the “Merger Agreement”), by and between us, SHF Merger Sub I, SHF Merger Sub II, LLC, Rockview Digital Solutions, Inc. d/b/a Abaca (“Abaca”), and Daniel Roda, solely in his capacity as the representative of Abaca’s securityholders (the “Abaca Holders”), and (iv) 37,517 shares of Common Stock issued on or about October 5, 2025 to the Abaca Holders pursuant to the Merger Agreement.

Private Placement of Preferred Shares

On September 30, 2025, the Company entered into the Series B SPA with the investors party thereto (the “Buyers”), pursuant to which, subject to the terms and conditions set forth therein, the Company agreed to issue and sell to the Buyers an aggregate of 31,052 shares of Series B Preferred Stock and related Original Series B Warrants initially to acquire an aggregate of 1,999,544 shares of the Company’s Common Stock, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events. The Series B Preferred Stock that was issued included Commitment Shares that the Company was required to issue to CREO in accordance with the Purchase Agreement.

On October 14, 2025, the Company and each Buyer entered into an Amendment No. 1 to Securities Purchase Agreement (the “Amendment”). Pursuant to each Amendment, such Buyer’s Original Series B Warrant was amended and restated (as amended and restated, each, a “Series B Warrant”) to change the exercisability date from six months and one day after the Issuance Date (as defined in the Series B Warrant) to six months and one day after the Applicable Date (as defined in the Series B Warrant).

Subject to the terms of the Series B Warrant, each Series B Warrant is exercisable at any time on or after the six month and one day anniversary of the Applicable Date (the “Initial Exercisability Date”). The Series B Warrant expire upon the third anniversary of such Initial Exercisability Date. The exercise price per warrant share is $7.7644, subject to adjustment as provided therein.

Subject to the terms and conditions of the Certificate of Designation (as defined below), the Series B Preferred Stock is convertible immediately upon issuance, and the conversion price is $7.7644 per share, subject to adjustment as provided therein.

Series B Preferred Stock

Our board of directors amended our articles of incorporation on September 30, 2025, to authorize the issuance of Series B Preferred Stock by the filing of a certificate of designation (as amended as of the date of this Information Statement, the “Series B Certificate of Designation”), with each such share having a stated value of $1,000 as described below.

General. Each share of Series B Preferred Stock has a stated value of $1,000 per share and, when issued, the Series B Preferred Stock will be fully paid and non-assessable.

Ranking. Series B Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company unless the Required Holders (as defined in the Series B Certificate of Designation) consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series B Preferred Stock.

Dividends. The holders of Series B Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of the Company’s Common Stock, when and if actually paid.

Purchase Rights. If at any time the Company grants, issues or sells any options, convertible securities, or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then each holder of Series B Preferred Stock will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon complete conversion of all the Series B preferred stock held by such holder immediately prior to the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights at the Alternate Conversion Price (as defined below); subject to certain limitations on beneficial ownership.

Conversion Rights

Conversion at Option of Holder. Each holder of Series B preferred stock may convert all, or any part, of the outstanding Series B preferred stock, at any time at such holder’s option, into shares of the Common Stock (which converted shares of Common Stock are referred to as “Conversion Shares” herein) at the fixed “Conversion Price” of $7.7644 which is subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions.

Voluntary Adjustment Right. Subject to the rules and regulations of the Nasdaq, the Company has the right, at any time, with the written consent of the Required Holders, to lower the fixed conversion price to any amount and for any period of time deemed appropriate by the board of directors of the Company.

Other Adjustments. The Company has agreed to seek stockholder approval at a special meeting of stockholders, of the issuance of conversion shares at a conversion price below the conversion price (the date of such approval, the “Stockholder Approval Date”).

If 60 days, 90 days and 180 days following the occurrence of the later of (x) the Stockholder Approval Date and (y) the earlier of (a) the effective date of the registration statement to be filed pursuant to the Registration Rights Agreement and (b) the date that the Series B preferred stock is eligible to be resold without restriction under Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”), the Conversion Price then in effect is greater than the greater of $1.5528 and the Market Price (as defined in the Certificate of Designations) then in effect (each, an “Adjustment Price”), the conversion price shall automatically lower to such Adjustment Price.

Change of Control Exchange. Upon a change of control of the Company, each holder may require the Company to exchange the holder’s shares of Series B preferred stock for consideration equal to the Change of Control Election Price (as defined in the Series B Certificate of Designation), to be satisfied at the Company’s election in either (x) cash or (y) rights convertible into such securities or other assets to which such holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such holder upon consummation of such corporate event.

Company Optional Redemption. At any time the Company shall have the right to redeem in cash all, but not less than all, the shares of Series B preferred stock then outstanding at a redemption price equal to 120% of the greater of (i) the Conversion Amount being redeemed as of the Company optional redemption date and (ii) the product of (1) the conversion rate with respect to the Conversion Amount being redeemed as of the Company optional redemption date multiplied by (2) the greatest closing sale price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Company optional redemption notice date and ending on the Trading Day immediately prior to the date the Company makes the entire payment required to be made.

Fundamental Transactions. The Series B Certificate of Designation prohibits the Company from entering specified fundamental transactions (including, without limitation, mergers, business combinations and similar transactions) unless the Company (or the Company’s successor) assumes in writing all of the Company’s obligations under the Certificate of Designations and the other Transaction Documents (as defined in the Series B Certificate of Designation).

Voting Rights. The holders of the Series B preferred stock shall have no voting power and no right to vote on any matter at any time, either as a separate series or class or together with any other series or class of share of capital stock, and shall not be entitled to call a meeting of such holders for any purpose nor shall they be entitled to participate in any meeting of the holders of Common Stock, except as provided in the Certificate of Designations (or as otherwise required by applicable law).

Abaca Merger Shares

On October 26, 2023, the Company issued 250,000 Abaca Warrants to the Abaca Holders, in connection with the Second Amendment to the Merger Agreement (the “Second Amendment”) and the First Amendment to the Second Amendment dated February 27, 2024 . The Abaca Warrants have an exercise price of $40.00 per share of Common Stock to be paid in cash. An Abaca Warrant may be exercised only during the period (the “Exercise Period”) commencing October 26, 2023 and terminating October 25, 2028 (the “Expiration Date”).

The Second Amendment also added a Third Anniversary Consideration Payment of $1,500,000 which was payable in cash, stock, or a combination of both at the Company’s discretion. On October 5, 2025, the Company issued 37,517 shares of Common Stock to the Abaca Holders pursuant to the Second Amendment (the “Abaca Shares”).

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, In addition, the Company had a working capital deficit of $7,318,312 and cash used from operating activities of $1,815338 for the six months ended June 30, 2025. 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 and on Form 10-K/A for the 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~~THE 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.OFFERING

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.

Issuer		SHF Holdings, Inc.

Shares of Common Stock offered by the Selling Stockholders		Up to 22,598,184 shares of our Common Stock. We are registering 22,598,184 shares of Common Stock in connection with the Voluntary Reduction, as well as 1,080,807 shares of Common Stock that were issued to PCCU pursuant to the Issuance Agreement.

Shares of Common Stock outstanding immediately prior to this offering		5,146,419 shares (as of May 1, 2026).

Shares of Common Stock outstanding immediately following to this offering		Up to 27,744,603 shares, assuming immediate exercise of all Series B Warrants.

Terms of the offering		Each 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		Each 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 Stockholders pursuant to this prospectus. Upon any exercise of the Series B Warrants by payment of cash, we will receive the exercise price of such Series B Warrants, which, if exercised in cash with respect to all of the Series B Warrants outstanding and held by the Selling Stockholders as of the date hereof, would result in gross proceeds to us of approximately $15.3 million. However, we cannot predict when and in what amounts or if the Series B Warrants will be exercised by payments of cash and it is possible that the Series B Warrants may expire and never be exercised, in which case we would not receive any cash proceeds from their exercise. We intend to use any net proceeds from the exercise of Series B Warrants 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.

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.

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

~~The~~This ~~Company~~prospectus ~~relies~~relates ~~on information technology and other computer resources~~ to ~~perform~~the ~~important~~potential ~~operational~~offer and ~~marketing~~sale ~~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~~time 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~~time 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~~Selling ~~control.~~Stockholders ~~If the Company were to experience a significant period~~ of ~~disruption~~ ~~in information technology systems that involve interactions with clients or suppliers~~22, ~~it could result in the loss of sales and clients and significant incremental costs~~598,184 ~~which~~shares ~~could adversely affect its business. Additionally, security breaches~~ of ~~information technology~~Common 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 regulationsStock.

The ~~Company~~22,598,184 ~~may~~shares ~~suffer~~of ~~uninsured~~Common ~~losses~~Stock oroffered ~~suffer~~under ~~material~~this ~~losses~~prospectus inconsist ~~excess~~of (i) 21,517,377 shares of ~~insurance~~Common ~~limits~~Stock underlying the Series B Warrants at the Voluntarily Reduced Price issued and sold to the investors pursuant to the Series B SPA and (ii) 1,080,807 shares of Common Stock issued to PCCU pursuant to the Issuance Agreement.

InSeries ~~addition~~B toWarrants 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~~On ofSeptember ~~the~~30, ~~uncertainties inherent in litigation~~2025, wethe ~~cannot~~Company ~~provide~~entered ~~assurance~~into ~~that~~ the ~~Company’s~~Series ~~insurance~~B ~~coverage,~~SPA ~~indemnity~~with ~~arrangements and~~the ~~reserves~~Buyers, ~~will~~pursuant beto ~~adequate~~which, subject to ~~cover~~the ~~liability~~terms ~~for~~and ~~any~~conditions set ~~damages~~forth therein, the ~~cost~~Company ofagreed ~~litigation,~~to orissue ~~any~~and ~~other~~sell ~~related~~to ~~expenses surrounding~~ the ~~current~~ ~~claims~~Buyers, toamong ~~which~~other ~~the~~things, ~~Company~~Common isStock ~~subject~~purchase orwarrants ~~any~~(the ~~future~~“Original Series ~~claims~~B ~~that~~Warrants”) ~~may~~initially ~~arise.~~to ~~Such~~acquire ~~damages~~an ~~and~~aggregate ~~expenses~~of 1,999,544 toshares of the ~~extent~~Company’s ~~that~~Common ~~they are~~Stock, ~~not~~subject ~~covered~~to byadjustment for ~~insurance~~stock splits, ~~could~~stock ~~materially~~dividends, ~~and~~recapitalizations, ~~adversely~~reorganizations, ~~affect~~reclassifications, ~~our~~combinations, ~~consolidated~~subdivisions ~~financial~~or ~~statements~~other ~~and results~~similar events.

AnOn ~~adverse~~October ~~outcome~~14, in2025, ~~litigation~~the Company and each Buyer entered into an Amendment No. 1 to ~~which~~the Series B SPA (the ~~Company~~“Series isB orSPA ~~becomes~~Amendment”). Pursuant ato ~~party~~each ~~could~~Series ~~materially~~B SPA Amendment, such Buyer’s Original Series B Warrant was amended and ~~adversely~~restated ~~affect~~to uschange the exercisability date from six months and one day after the Issuance Date (as defined in the Series B Warrant) to six months and one day after the Applicable Date (as defined in the Series B Warrant).

~~Except~~Subject asto ~~otherwise~~the ~~described~~terms ~~in “Business––Involvement in Certain Legal Proceedings” and “Management’s Discussion and Analysis~~ of ~~Financial Condition and Results of Operations for~~ the ~~years~~Series ~~ended~~B ~~December 31~~Warrant, ~~2024~~each ~~and~~Series ~~2023––Litigation,” the~~B ~~Company~~Warrant is ~~not~~exercisable ~~aware~~at of any ~~pending~~time ~~litigation~~on ~~involving~~or ~~the~~after ~~Company. However, in~~ the ~~future,~~six itmonth ~~may~~and ~~become~~one ~~subject~~day ~~to litigation,~~anniversary ~~including claims relating to its operations, breach~~ of ~~contract, securities offerings, relation to~~ the ~~cannabis~~Applicable ~~industry,~~Date ~~or otherwise in~~ (the ~~ordinary~~“Initial ~~course~~Exercisability ~~of business or otherwise~~Date”). ~~Some~~The ofSeries ~~these~~B ~~claims~~Warrant ~~may~~expire ~~result~~upon inthe ~~significant~~third ~~defense~~anniversary ~~costs~~of ~~and potentially significant~~such ~~judgments~~Initial ~~against~~Exercisability ~~the~~Date. ~~Company,~~The ~~some~~exercise ofprice ~~which~~per ~~are~~warrant ~~not,~~share orwas ~~cannot~~initially be$7.7644, ~~insured~~however, ~~against.~~since Wethe ~~cannot~~filing ~~be certain~~ of the ~~ultimate~~Prior ~~outcomes of~~Registration ~~any~~Statement, ~~claims that may arise in~~ the ~~future.~~exercise ~~Resolution~~price ofper ~~these~~warrant ~~types~~share ofhas ~~matters~~adjusted ~~against the Company may result~~ in ~~significant~~accordance ~~fines,~~with ~~judgments or~~the ~~settlements,~~terms ~~which,~~of ~~if uninsured, or if~~ the ~~fines,~~Series ~~judgments~~B SPA and ~~settlements~~the ~~exceed~~Series ~~insured~~B ~~levels~~Warrants, ~~could adversely impact the Company’s~~ ~~earnings~~ and ~~cash~~it ~~flows,~~is ~~thereby materially and adversely affecting us~~$1.5528 ~~Litigation~~as ~~or the resolution~~ of ~~litigation may affect~~ the ~~availability or~~date ~~cost of the Company’s insurance coverage, which could materially and adversely impact us~~hereof.

Pursuant to the terms of the Series B Warrant, the Voluntarily Reduced Price shall be in effect from the date this registration statement is declared effective by the SEC until July 31, 2026. In order to comply with the terms of the Series B SPA and the Series B Warrants, the Company is registering 21,517,377 shares of Common Stock that will underlie the Series B Warrants during the Voluntary Reduction. Following the conclusion of the Temporary Reduction Period, the exercise price of the Series B Warrants will revert back to the current exercise price of $1.5528. See “Description of Capital Stock––Preferred Stock––Series B Preferred Stock––Conversion Rights.”

Issuance Agreement

On March 29, 2023, the Company and PCCU entered into the Issuance Agreement, pursuant to which the Company issued 11,200,000 shares of Common Stock. Concurrently with entering into the Issuance Agreement, the Company also entered into a registration rights agreement with PCCU, pursuant to which it agreed to provide PCCU with certain registration rights related to the shares issued under the Issuance Agreement. In order to comply with the terms of the Issuance Agreement, the Company is registering 1,080,807 shares of Common Stock.

WeRISK 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.FACTORS

AsWe ofare ~~June~~subject 30to risks and uncertainties that could potentially negatively impact our business, ~~2025~~financial conditions, ~~the~~results ~~Company~~of operations and cash flows. This section contains a description of certain risks and uncertainties identified ~~material~~by ~~weaknesses~~management that could, individually or in combination, harm our ~~internal~~business, ~~control~~results ~~over~~of operations, liquidity and financial ~~reporting~~condition, ~~related~~as towell ~~its~~as ~~going~~our ~~concern~~financial instruments ~~assessment~~and our securities. AThese ~~material~~disclosures ~~weakness~~reflect isthe aCompany’s ~~deficiency,~~beliefs orand ~~combination~~opinions ofas ~~deficiencies,~~to factors that could materially and adversely affect the Company and its securities in ~~internal~~the ~~control~~future. ~~over~~References ~~financial~~to ~~reporting,~~past ~~such~~events ~~that~~are provided by way of example only and are not intended ~~there~~to isbe a ~~reasonable~~complete ~~possibility~~listing ~~that~~or a ~~material~~representation ~~misstatement~~as to whether or not such factors have occurred in the past or their likelihood of occurring in the ~~Company’s~~future. ~~annual~~In evaluating us and our business and making or ~~interim~~continuing ~~financial~~an ~~statements~~investment ~~will~~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 bein ~~prevented~~this prospectus, including additional risk that are not presently known, or ~~detected~~that onwe apresently ~~timely~~deem ~~basis~~immaterial. ~~Specifically~~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 ~~following~~sections ~~are~~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 ~~material~~risks ~~weaknesses~~and ~~over~~uncertainties that could potentially negatively impact our business, financial ~~reporting~~conditions, ~~identified~~results byof ~~management:~~operations and cash flows.

●Risks Related ~~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.Business

~~The~~Our ~~Company~~revenue has ~~implemented~~declined asignificantly ~~remediation plan for each of the matters listed above. Management is~~ in ~~the~~recent process of assessing the effectiveness of these remediation efforts. Such remediation efforts include replacing the former Chief Financial Officer with a Principal Accounting Officer and Senior Vice President (SVP) Controller with substantial SEC Registrant experienceperiods, ~~enhancing the support provided to the SVP Controller,~~ and ~~implementing~~we ~~enhanced~~cannot ~~technology~~guarantee ~~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~~economics ~~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.~~Second ~~See~~Amended ~~“Management’s~~CAA ~~Discussion~~will ~~and Analysis~~fully ofrestore ~~Financial~~our ~~Condition~~financial 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 managementperformance.

Our loan interest income declined sharply following the First Amended CAA, which reduced our income share to approximately 35%. While the Second Amended CAA, increases our income share to up to 65%, this comes at the cost of an up to 65% loan loss indemnification obligation. As such, we cannot guarantee that the economics of the Second Amended CAA will fully restore our financial performance if we are required to fulfill our indemnification obligations.

Our revenue has declined due to account attrition, lower pricing, introduction of money market accounts that share interest earned with the depositor and reduced transaction activity within the cannabis industry.

The fees we earn from deposit accounts and transaction activity are directly tied to the number of active CRB accounts, the average balances those accounts maintain, and the volume of transactions processed through our platform. Over recent periods, we have experienced account attrition and lower balances, reflecting broader economic pressures in the U.S. cannabis industry, including reduced wholesale pricing and constrained operator liquidity. These trends reduce both our account fee income and the deposit base on which we earn investment income. We also introduced a money market account that shares the interest earned with depositors, which reduces the average revenue generated from CRBs. We cannot predict when, or whether, conditions in the cannabis industry will improve, or whether accounts lost to attrition will be replaced by new customers.

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

Our investment income is earned on CRB deposits held at PCCU based on the Interest on Reserve Balances (“IORB”) paid by the Federal Reserve, which is sensitive to changes in prevailing interest rates and including policy decisions by the Federal Reserve. When interest rates decline, the yield earned on CRB deposits decreases, and when interest rates rise, the yield earned on CRB deposits increases. A sustained low-rate environment could materially reduce our revenues and make it more difficult for us to achieve or maintain profitability. In addition, lower interest rates could reduce the interest rates charged on new loans made to CRB borrowers.

Our ~~control~~recurring ~~over~~operating ~~financial~~losses ~~reporting will not prevent or detect all errors~~ and ~~all~~negative ~~fraud.~~cash Aflows ~~control~~from ~~system,~~operations noraise ~~matter~~substantial ~~how~~doubt ~~well~~about ~~designed~~our ~~and operated,~~ability 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~~continue ~~fraud~~as ~~will~~a ~~not~~going ~~occur or that all control issues and instances of fraud will be detected~~concern. ~~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~~The ~~failure~~Company tohas ~~maintain~~incurred ~~internal~~recurring ~~control~~losses ~~over~~from ~~financial reporting could severely inhibit our ability to accurately report our financial condition, results of~~ operations orand negative cash flows. Iffrom ~~our financial statements are not accurate~~operations, ~~investors~~including ~~may~~an ~~not~~operating ~~have~~loss ~~a complete understanding~~ of ~~our~~ ~~operations~~approximately $5.4 Ifmillion weand docash ~~not~~used ~~file~~in ~~financial~~operating ~~statements~~activities onof aapproximately ~~timely~~$3.4 ~~basis~~million asfor ~~required~~the byyear ~~the~~ended ~~SEC~~December 31, we2025, ~~could~~which ~~face~~raise ~~severe~~substantial doubt ~~consequences.~~about ~~If we~~the ~~are~~Company’s ~~unable~~ability to ~~conclude~~continue ~~that~~as ~~its~~a ~~internal~~going ~~control~~concern. ~~over~~Management ~~financial~~has ~~reporting~~taken issteps ~~effective,~~to ~~investors~~preserve ~~may~~liquidity, ~~lose~~including ~~confidence~~restructuring revenue insharing under the ~~accuracy and~~Second ~~completeness~~Amended ofCAA ~~our~~to ~~financial~~increase ~~reports,~~ the ~~market~~Company’s ~~price~~share of ~~our~~loan ~~Common~~program ~~Stock~~income ~~could~~from ~~decline,~~approximately ~~and~~35% ~~we could be subject~~ to ~~sanctions or~~65%, ~~investigations~~seeking bystrategic ~~the Nasdaq~~partnerships, ~~the~~reducing ~~SEC~~operating ~~or other regulatory authorities. Moreover~~expenses, ~~responding~~maintaining toaccess ~~such investigations are likely~~ to ~~consume~~ a ~~significant~~$150 ~~amount~~million ofELOC ~~our management resources~~ and ~~cause~~monitoring usits toliquidity ~~incur~~position. Notwithstanding ~~significant~~these ~~legal~~measures, ~~and~~there ~~accounting~~is ~~expenses.~~no ~~Failure~~assurance tothat ~~remedy~~management’s ~~any material~~plans ~~weakness~~will inbe ~~internal~~sufficient ~~control~~to ~~over~~sustain ~~financial reporting~~operations, orand toif the ~~maintain~~Company ~~effective~~is ~~control~~unable ~~systems,~~to ~~could~~achieve ~~also~~profitability ~~restrict~~or ~~our future~~ access toadequate ~~the~~ capital ~~markets.~~on ~~This~~acceptable ~~could~~terms, ~~result~~it inmay anbe ~~adverse~~forced ~~reaction~~to inreduce ~~the~~spending, ~~financial~~liquidate assets, ~~markets~~or ~~due~~curtail tooperations, aany ~~loss~~ of ~~confidence~~which incould materially harm the ~~reliability of~~Company’s ~~our~~business and financial ~~statements~~condition.

~~Risks~~Furthermore, ~~Related~~the independent registered public accounting firm’s report on our consolidated financial statements for the year ended December 31, 2025 includes an explanatory paragraph that expresses 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 ~~Cannabis~~outcome ~~Industry~~of this uncertainty. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Liquidity” for further details.

~~The~~Risks ~~Company~~Related ~~provides services~~ to ~~financial institutions that provide banking services to businesses in or ancillary to~~ the ~~state-licensed cannabis~~Second ~~industry~~Amended ~~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.~~CAA

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 TreasuryPCCU’s ~~Financial Crimes Enforcement Network (“FinCEN”) published guidance for financial institutions servicing~~ ~~state-legal~~loan ~~cannabis~~program ~~businesses~~is ~~(the~~substantially ~~“FinCEN~~dependent ~~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~~regulatory ~~and~~restrictions ~~maintenance~~placed ofon ~~such business accounts at~~ PCCU ~~or other financial institutions that comport with the FinCEN Guidance. Additionally~~, ~~the~~which ~~Company’s~~may ~~policies~~limit ~~call for due diligence review of~~ the ~~cannabis business before the business is on-boarded~~types, ~~including~~terms, ~~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~~amounts ~~or other financial institutions include the ongoing monitoring and~~ of ~~the~~loans ~~business to determine if the business continues to meet the requirements of the depositary institution~~offered.

~~While~~PCCU weis ~~believe~~a ~~the~~federally ~~Company’s~~chartered ~~policies~~credit ~~and~~union ~~procedures~~subject ~~will allow us~~ to ~~operate~~regulation inby ~~compliance with~~ the ~~FinCEN~~NCUA. ~~Guidance,~~PCCU ~~there~~is ~~can~~subject ~~be no~~to ~~assurance that compliance with the FinCEN Guidance will protect us from federal or other~~ regulatory ~~sanctions.~~capital ~~Federal~~requirements, ~~prosecutors~~portfolio ~~have~~concentration ~~significant~~limits, ~~discretion~~currently ~~and~~capped ~~there~~at ~~can~~60% beof nototal ~~assurance~~assets ~~that~~in ~~the~~CRB-related ~~federal~~deposits, ~~prosecutors~~and ~~will~~periodic ~~not~~examinations ~~choose~~by toapplicable ~~strictly enforce the federal~~oversight ~~laws governing cannabis~~authorities. ~~Any~~If ~~change in the federal government~~PCCU’s ~~enforcement~~regulators ~~position~~impose ~~could~~more ~~potentially~~restrictive ~~subject~~requirements, usreduce toits ~~criminal~~concentration ~~prosecution and~~limit, ~~other~~or ~~regulatory~~restrict ~~sanctions.~~its ~~While~~ability to wemake ~~also~~CRB ~~believe~~loans, the ~~Company’s~~size ~~BSA anti-money laundering (“AML”~~ and, ~~together with~~composition ~~BSA,~~of ~~“BSA/AML”)~~the ~~policies~~loan ~~and~~portfolio ~~programs~~from ~~are~~which ~~appropriate~~we ~~for~~earn ~~the~~income ~~services~~could ~~offered~~be bymaterially ~~PCCU~~reduced. orWe ~~other~~have ~~financial~~no ~~institutions~~ability to ~~CRBs,~~compel ~~the~~PCCU ~~medical~~to ~~and~~originate ~~adult-use~~loans ~~cannabis~~or ~~business~~to ismaintain ~~considered~~its ~~high-risk,~~current ~~thus~~regulatory ~~increasing~~posture, ~~the~~and ~~risk~~changes ofin aPCCU’s regulatory ~~action~~environment ~~against~~could restrict the ~~Company’s~~loan ~~BSA/AML~~ program ~~that~~we ~~could~~depend ~~expose~~on usfor toa ~~liabilities~~significant ~~and~~portion ~~regulatory~~of ~~compliance costs that would have an adverse impact on~~ our ~~business, results of operations, financial condition, brand and reputation~~revenue.

The Second Amended CAA reinstates an indemnification obligation of up to 65% of loan loss.

Under the Second Amended CAA, we receive up to 65% of loan program income generated by PCCU’s CRB loan portfolio. In exchange, we are obligated to indemnify PCCU for up to 65% of net losses of a default on any loan covered by the Second Amended CAA. This obligation has no maximum dollar limit and covers principal, accrued interest, fees, legal costs, collection costs, and collateral disposition costs, net of any recoveries. As of the date the Second Amended CAA was entered into, the total loan portfolio was approximately $52.1 million, giving us a theoretical maximum indemnification exposure of approximately $33.8 million. If one or more significant loan defaults occur, our indemnification obligations could be substantial and could materially impair our financial condition and ability to operate. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Relationship with PCCU.”

We are required to maintain sufficient balance sheet resources to support our indemnification obligations under the Second Amended CAA.

The Second Amended CAA requires us to certify monthly to PCCU that we maintain adequate liquidity to support our 65% indemnification obligation. While we currently meet this requirement, there is no assurance that we will continue to do so. Our cash position may decline as a result of operating losses, capital expenditures, debt service, or indemnification payments. If we are unable to certify adequate liquidity or if material indemnification claims are made against us, our ability to continue operating could be significantly impaired.

~~Further,~~Our toindemnification ~~the~~obligation ~~extent~~is ~~any~~unlimited ~~law~~in ~~enforcement actions require us to respond to subpoenas~~amount, orand ~~undergo~~our ~~search~~actual ~~warrants,~~losses ~~for client records, PCCU or other financial institutions providing services to CRBs~~ could ~~elect~~exceed ~~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~~estimates ~~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,~~available ~~operating results, financial condition, brand and reputation~~cash.

The ~~Company,~~indemnification ~~its~~obligation ~~financial~~under ~~institution~~the ~~customers~~Second ~~and~~Amended ~~their~~CAA ~~CRB~~has ~~clients~~no ~~are~~dollar ~~subject~~cap. Our ability to satisfy indemnification claims depends entirely on our maintaining sufficient cash and liquidity at the time a ~~variety~~claim arises. As of ~~laws~~December ~~regarding~~31, ~~financial~~2025, ~~transactions~~we held cash of $6.8 million; however, ~~related~~our cash position may decline due to ~~cannabis~~operating losses, ~~which~~working ~~could~~capital ~~subject~~needs, ~~their~~or ~~CRB~~prior ~~clients~~indemnification payments. If we are unable to fund ~~legal~~an ~~claims~~indemnification orclaim, ~~otherwise~~PCCU ~~adversely~~would ~~affect~~bear the full loss on the affected loan. Such a failure could severely damage our ~~business~~relationship with PCCU, result in a default under the Second Amended CAA, and jeopardize our ability to continue operating.

~~The~~We ~~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~~maintain ~~various~~sufficient ~~filings~~cash ~~with FinCEN~~ and ~~the~~cash ~~Internal~~equivalents ~~Revenue Services (“IRS”)~~ to ~~report~~support 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,~~indemnification ~~results~~obligations ofunder ~~operations and financial condition. In addition, we cannot assure that~~ the ~~Company’s~~Second ~~strategies~~Amended ~~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~~CAA. 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.

WeThe Second Amended CAA requires us to certify monthly to PCCU that we maintain adequate liquidity to support our 65% indemnification obligation. While we currently meet this requirement, there is no assurance that we will continue to do so. Our cash position may ~~have~~decline ~~difficulty~~as ~~using~~a ~~bankruptcy~~result of ~~courts~~operating ~~due~~losses, capital expenditures, debt service, or indemnification payments. If we are unable to certify adequate liquidity or if material indemnification claims are made against us, our ~~involvement~~ability into ~~the~~continue ~~regulated~~operating ~~cannabis~~could ~~industry~~be significantly impaired.

WePCCU ~~currently~~retains ~~have~~final noloan ~~plans~~approval toauthority ~~seek~~and ~~bankruptcy~~may ~~protection.~~decline ~~Courts~~loans ~~in the United States have held~~ that ~~debtors~~meet ~~whose~~our ~~income~~underwriting 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 productsstandards, awhich ~~U.S. court~~ could ~~determine~~limit ~~that~~ our revenue is ~~derived from cannabis or cannabis assets and prevent us from obtaining bankruptcy protections if necessary~~growth.

~~The~~We ~~conduct~~control ofthe ~~third~~loan ~~parties~~origination process and assist with underwriting, risk rating, and credit analysis, for these loans and determine which loan applications are submitted to PCCU for funding. However, PCCU’s loan committee retains final approval authority and may ~~jeopardize~~reject loans that we have underwritten and recommended for funding. A pattern of rejections on loans we consider creditworthy could reduce the size of the loan portfolio, limit our ~~business~~loan program income, and ~~regulatory~~constrain ~~compliance~~our ability to grow revenue under the Second Amended CAA. We cannot compel PCCU to approve any loan we originate, and disagreements over credit standards could adversely affect our relationship with PCCU and our financial results.

~~While~~One ~~the~~borrower ~~Company~~represents isapproximately ~~not~~18% aof ~~cannabis licensee or directly involved in~~ the ~~cannabis~~total ~~industry~~loan ~~and~~portfolio ~~is therefore not subject to commercial cannabis regulations that apply to cannabis operators, we cannot guarantee that our systems, protocols,~~ and ~~practices~~carries ~~associated with our onboarding and monitoring services will prevent all unauthorized or illegal activities by~~ the ~~CRBs~~second ~~receiving~~highest ~~banking~~risk ~~services through our financial institution customers~~classification. 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.

WeAs ~~may~~of beDecember ~~subject~~31, to2025, ~~constraints~~one onborrower ~~marketing~~had an outstanding loan balance of approximately $9.3 million, representing approximately 18% of our total ~~services~~CRB loan portfolio. This loan carries the second highest risk rating under the risk rating classification system used in the loan program, and which indicates that collection or liquidation in full is highly questionable, doubtful and improbable, with anticipated losses ranging from 20% to 50% of the outstanding balance. Our 65% indemnification exposure on this single loan could ~~adversely~~result ~~impact~~in ~~our~~a ~~results~~loss to us of ~~operations~~between approximately $2.2 million, net of estimated collateral value and $6.1 million, uncollateralized. As of December 31, 2025, the Company has recorded provisions of $0.4 million and $0.3 million in the consolidated balance sheet for financial indemnification liability under ASC 326 and standby guarantee obligations under ASC 460, respectively. The realization of any portion of this loss could materially impair our ~~growth~~liquidity ~~opportunities~~and financial condition.

~~Certain~~The ~~states~~CRB inloan ~~which~~portfolio ~~the~~is ~~Company~~concentrated ~~may~~entirely ~~operate~~in ~~have~~the ~~strict regulations regarding marketing and sales activities ancillary to~~ cannabis ~~products~~industry, ~~which~~ ~~could affect our ability to market our services~~ and ~~the~~cannabis-specific ~~development~~collateral ofis ~~our~~subject ~~business. If we are unable~~ to ~~effectively~~significant ~~market our~~valuation ~~services~~discounts, ~~and~~legal ~~compete for market share~~uncertainties, ~~or if the costs of compliance with government legislation~~ and ~~regulation~~a ~~cannot~~limited bebuyer ~~mitigated~~pool ~~through increased fees for our services, this could result~~ in a ~~loss~~foreclosure ofor ~~revenue~~forced sale.

All loans in the portfolio we indemnify are made to CRBs. In the event of a default, the primary collateral securing these loans is typically real estate used in cannabis operations. PCCU eliminates the cannabis license premium (sometimes referred to as the “green tax”) from its collateral valuations and applies a further 60% reduction to estimate realizable value in a non-cannabis sale. As a result, the effective collateral value available to offset loan losses in a foreclosure or forced sale is significantly lower than for comparable conventional commercial real estate. This means our actual loss for a given default, and therefore our indemnification payments under the Second Amended CAA, may be materially higher than we currently estimate.

~~Service~~Certain ~~providers~~provisions toin ~~cannabis~~the ~~businesses~~Second ~~may~~Amended beCAA ~~subject~~create toa ~~unfavorable~~direct ~~U.S.~~link ~~tax~~between ~~treatment~~our listing compliance and our revenue.

~~Under~~The ~~Section~~Second ~~280E~~Amended ofCAA ~~the~~contains ~~Internal~~a ~~Revenue~~provision ~~Code~~that ~~(the~~automatically ~~“Code”),~~reduces noour ~~deduction~~loan orprogram ~~credit~~income isshare ~~allowed~~percentage ~~for~~if ~~any~~we ~~amount~~determine ~~paid~~that ~~or incurred~~our ~~during~~indemnification ~~the~~percentage ~~taxable~~must ~~year~~be reduced in ~~carrying~~order onto ~~business,~~maintain ~~other~~our ~~than~~listing ~~costs~~on ofNasdaq. ~~goods~~In ~~sold, if~~ the ~~business~~event ~~(or~~of ~~the~~such ~~activities~~a ~~which~~determination, ~~comprise~~our ~~the~~income ~~trade~~split orpercentage ~~business)~~will ~~consists~~be ofreduced ~~trafficking~~to inmatch ~~controlled~~our ~~substances~~indemnification ~~(within~~percentage, ~~the~~with ~~meaning~~a ofretroactive ~~Schedules~~true-up Ito ~~and II of~~ the ~~CSA).~~immediately ~~The~~preceding ~~IRS has~~quarter ~~applied~~that ~~this~~will ~~provision~~be tosettled ~~cannabis~~within ~~operations,~~ten ~~prohibiting~~days ~~them~~of ~~from~~our ~~deducting~~next ~~expenses~~filing ~~associated~~ with ~~cannabis~~the ~~businesses and asserting assessments and penalties for additional taxes owed~~SEC. ~~While~~A wereduction ~~believe~~in ~~that Section 280E of~~ the ~~Code~~indemnity ~~does~~percentage ~~not~~would ~~apply~~directly toreduce our ~~business, or~~ ~~ancillary~~revenue ~~service~~and ~~providers~~could ~~that~~signal ~~work~~financial ~~with~~distress ~~state-licensed~~to ~~CRBs,~~the ifmarket. ~~the~~This ~~IRS~~provision ~~determines~~means that ~~Section~~a ~~280E~~Nasdaq ~~does~~compliance ~~apply~~issue itcould ~~would~~simultaneously ~~significantly~~impair ~~and~~both ~~materially~~our ~~affect~~capital ~~our~~markets ~~profitability~~access and ~~financial~~our ~~condition~~operating income.

~~Cannabis~~The ~~businesses~~initial ~~may~~fair bevalue measurement of our stand-ready guarantee liability at inception under the Second Amended CAA involves significant estimates and judgment and is subject to ~~civil~~material ~~asset forfeiture~~uncertainty.

~~Property~~We ~~owned~~are byrequired ~~participants~~under inASC ~~the~~460, ~~cannabis~~Guarantees, ~~industry~~to ~~used~~recognize in the ~~course~~fair value of ~~conducting~~our ~~such~~stand-ready ~~business,~~guarantee orobligation ~~that~~at ~~represents~~inception. ~~proceeds~~We ~~of such business~~are orfinalizing isthis ~~traceable~~initial tofair ~~proceeds~~value ofmeasurement ~~such~~with ~~business,~~the ~~could~~assistance beof ~~subject~~a tothird-party ~~seizure~~valuation byspecialist. ~~law~~This ~~enforcement~~is ~~and~~a ~~subsequent~~Level ~~civil~~3 ~~asset forfeiture because~~measurement ofunder the ~~illegality~~fair ofvalue ~~the~~hierarchy, ~~cannabis~~meaning ~~industry~~it ~~under~~relies ~~federal~~on ~~law.~~significant ~~Even~~unobservable ifinputs, ~~the~~including ~~owner~~assumed ofdefault ~~the~~probabilities, ~~property~~loss isgiven default ~~never~~rates, ~~charged~~cannabis-specific ~~with~~collateral adiscount ~~crime~~assumptions, discount rates, and the ~~property in~~timing ~~question~~of ~~could~~potential ~~still~~guarantee bepayments. ~~seized~~The fair ~~and~~value ~~subject~~of tothis anliability ~~administrative~~is ~~proceeding~~fixed byat ~~which,~~inception ~~with~~and ~~minimal~~released ~~due~~over ~~process,~~the itremaining ~~could~~term beof ~~subject to~~the ~~forfeiture.~~Second ~~Forfeiture~~Amended ofCAA ~~assets~~as ofwe ~~our~~are ~~CRB~~released from ~~clients,~~risk. ~~particularly~~Because ifthis ~~such~~measurement ~~assets~~depends ~~represent~~entirely ~~collateral~~on ~~for~~management ~~loans~~assumptions ~~made~~and orunobservable ~~serviced~~market ~~by us~~inputs, actual results could ~~adversely~~differ materially ~~affect~~from our ~~revenues~~estimates. ifErrors itin ~~impedes~~this measurement, or changes in the ~~borrowers’~~assumptions ~~profitability~~used, orcould ~~operations~~result ~~and~~in ~~our~~material ~~CRB~~charges ~~clients’~~to ~~ability~~our toincome ~~continue~~statement toor ~~use~~require restatements of our ~~services~~financial statements.

~~Because~~Our weongoing ~~provide~~expected ~~services~~financial toindemnification ~~companies~~liability ~~that~~under ~~provide~~the ~~services~~Current toExpected ~~CRBs,~~Credit weLoss ~~may~~(“CECL”) ~~have~~standard a(ASC ~~difficult~~326) ~~time obtaining the various insurances that are~~requires ~~desired~~quarterly toongoing ~~operate~~remeasurement ~~our~~and ~~business,~~is ~~which~~subject ~~may expose us~~ to ~~additional~~material ~~risk and financial liability~~uncertainty.

~~Insurance~~Pursuant ~~that~~to isASC ~~otherwise readily available~~326, ~~such~~Financial asInstruments ~~general~~– ~~liability~~Credit ~~and~~Losses, ~~directors’~~using ~~and~~the ~~officers’~~CECL ~~insurance~~methodology, ~~may~~coinciding bewith ~~more~~the ~~difficult for~~first usperiod toin ~~find~~which the ~~and~~Company ~~could~~held befinancial ~~more~~assets ~~expensive~~within orthe ~~contain~~scope ~~significant~~of ~~exclusions~~the ~~because~~standard. ~~our~~Our financial ~~institution~~indemnification ~~customers~~liability ~~provide~~represents ~~services~~our estimate of to65% ~~CRBs.~~of ~~There~~the ~~are~~expected nocredit ~~guarantees~~losses ~~that~~on wethe ~~will~~covered beloan ~~able~~portfolio tounder ~~find~~the ~~such~~Second ~~insurance~~Amended ~~coverage~~CAA. inUnlike ~~the~~our ~~future~~ASC or460 ~~that~~stand-ready ~~the~~guarantee liability, ~~cost~~which ~~will~~is befixed ~~affordable to~~at ~~us.~~inception, Ifour ~~appropriate~~financial ~~coverage~~indemnification liability is ~~not~~dynamic ~~available,~~and weremeasured ~~may~~every bequarter ~~prevented~~to ~~from~~reflect ~~entering~~current conditions, ~~into~~forward-looking ~~certain~~economic ~~transactions~~forecasts, orupdated ~~business~~default ~~sectors~~probability assumptions, ~~our growth~~revised ~~may~~loss begiven ~~inhibited~~default estimates, and wechanges in ~~may~~collateral bevalues. ~~exposed~~Because tothe ~~additional~~cannabis ~~risk~~commercial ~~and~~real estate lending market has limited historical loss data for reliable statistical calibration, our estimates for financial ~~liabilities~~indemnification liability involve a higher-than-normal degree of management judgment. IfChanges in wethese ~~experience~~estimates anin ~~uninsured~~future ~~loss~~periods, itincluding ~~may~~as a result of borrower deterioration, collateral value declines, or changes in economic conditions, could result in material charges to credit loss ofexpense ~~anticipated~~in ~~cash~~our ~~flow~~income ~~and~~statement. ~~could~~Errors ~~materially~~in ~~adversely~~these ~~affect~~measurements ~~our~~could ~~results~~also require restatements of ~~operations,~~our financial ~~condition, and business~~statements.

~~There~~We ~~may~~are bedependent ~~difficulty~~on ~~enforcing~~third parties, including PCCU and other service providers, for certain ofcritical ~~our~~services, ~~commercial~~and ~~agreements~~disruptions at PCCU would directly and ~~contracts~~immediately impair our operations.

~~Courts~~PCCU ~~may~~provides ~~not~~the ~~enforce~~regulated abanking ~~contract~~infrastructure ~~deemed~~on towhich ~~involve~~our aentire ~~violation~~service ofmodel ~~law~~depends. orWe ~~public~~do ~~policy.~~not ~~Parties~~hold toa ~~contracts~~bank ~~involving~~or ~~the~~credit ~~state-legal~~union ~~cannabis~~charter ~~industry~~and ~~have~~cannot atdirectly ~~times~~offer ~~argued~~deposit, ~~that~~lending, ~~the~~or ~~agreements~~payment ~~were~~services ~~void~~to asCRB ~~federally~~clients. ~~illegal~~Operational ordisruptions ~~against~~at ~~public~~PCCU, ~~policy.~~whether ~~Some~~caused ~~courts~~by ~~have accepted~~a ~~this~~regulatory ~~argument~~action, ina ~~certain~~cybersecurity ~~cases.~~incident, ~~While~~a ~~courts~~financial ~~have~~stress ~~enforced~~event, ~~contracts~~or ~~related~~an tooperational ~~activities~~failure, bywould ~~state-legal~~directly ~~cannabis companies,~~ and ~~the~~immediately impair ~~trend~~our isability ~~generally~~ to ~~enforce~~serve ~~contracts~~our ~~with~~clients ~~state-legal cannabis companies~~ and ~~their~~generate ~~vendors,~~revenue. ~~there~~We ~~remains~~have ~~some~~limited ~~doubt~~ability ~~that we will be able~~ to ~~enforce~~transition our ~~commercial~~operations ~~agreements~~to ~~with~~an ~~our~~alternative financial institution ~~customers~~partner oron ~~the~~short ~~CRBs to which they provide banking services in court. Therefore~~notice, weand ~~cannot~~the beloss ~~assured~~of ~~that~~PCCU’s weoperational ~~will~~infrastructure ~~have a remedy~~ for ~~breach~~any ofextended ~~contract~~period ~~in all instances, which~~ could ~~have~~be afatal ~~material~~to ~~adverse effect on~~ our business.

~~Directors,~~We ~~officers,~~are ~~employees~~almost ~~and~~entirely ~~investors~~dependent ~~who~~on PCCU as our banking partner. Substantially all deposits from our CRB clients are ~~not~~held Uat PCCU, and substantially all of our revenue is generated through the services we provide under the Second Amended CAA.S We currently have no other financial institution partner of comparable scope. ~~citizens~~The ~~may~~loss ~~face~~of ~~constraints~~our onrelationship ~~cross-border~~with ~~travel~~PCCU, ~~into~~or a material adverse change to the ~~United~~terms ~~States~~of ~~because~~the Commercial Alliance ofAgreement ~~their~~that ~~involvement~~we inentered into with PCCU on March 29, 2023 (the ~~cannabis~~“CAA”), ~~industry~~would have a material adverse effect on our business, revenues, and operations. Until we enter into agreements with one or more additional financial institution partners, our ability to grow our client base and diversify our revenue is significantly constrained

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~~Loan ~~Related~~program toincome (formerly loan interest income) could decline under the ~~Company~~Second Amended CAA if the indemnity reserve would cause our shareholders’s equity ~~Organization~~to ~~and~~drop ~~Structure~~below the Nasdaq Listing Requirements to maintain compliance.

The ~~Company~~Second ~~depends~~Amended onCAA ~~key~~contains ~~management~~a ~~personnel~~provision that automatically reduces our loan program income (formerly loan interest income) share percentage if we determine that our indemnification percentage must be reduced in order to maintain our Nasdaq listing. In the event of such a determination, our income split percentage will be reduced to match our indemnification percentage. Any such adjustment in our indemnification obligation would result in a corresponding decrease in the amount of loan program income generated by PCCU’s CRB loan portfolio that we receive pursuant to the Second Amended CAA. The current listing requirement is a minimum of $2.5 million of shareholders’ equity, and ~~other~~if Nasdaq ~~experienced~~were ~~employees~~to increase this requirement such that it exceeded the Company’s balance sheet equity, or the Company’s balance sheet equity decreases below $2.5 million, our loan program income could decline. See “––Risks Related to the Second Amended CAA––Certain provisions in the Second Amended CAA create a direct link between our listing compliance and our revenue.”

~~The~~Risks ~~Company’s~~Related ~~success depends~~ to ~~a significant degree upon~~ the ~~contributions~~Cannabis ofIndustry 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 onRegulatory 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.Environment

~~Experienced~~We ~~employees~~have inagreements ~~the~~with financial ~~services~~institutions ~~and~~that 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~~banking services. ~~Failure~~ to ~~attract~~CRBs, ~~and~~which ~~retain~~exposes ~~such~~us ~~personnel or~~ to ~~ensure~~additional ~~that their experience and knowledge is not lost when they leave the business through retirement~~liabilities, ~~redundancy or otherwise may adversely affect the standards~~regulatory ofcompliance ~~the Company’s service and may have an adverse impact on the Company’s business~~costs, ~~prospects, liquidity, financial condition~~ and ~~results~~reputational ~~of operations~~risk.

~~Failure~~Our bybusiness ~~the~~is ~~Company’s~~built ~~directors,~~on ~~officers~~serving oran ~~employees~~industry that remains illegal under federal law. This creates unique risks that do not apply to ~~comply~~service providers ~~with~~operating ~~applicable~~in ~~policies~~conventional industries, ~~regulations~~including potential federal enforcement actions, heightened regulatory scrutiny of our financial institution partners, difficulty obtaining banking services and ~~rules~~insurance, and reputational harm that could ~~materially~~affect our ability to attract investors, employees, and customers. Any increase in federal enforcement activity targeting cannabis-related financial services ~~adversely~~could ~~affect~~have usan immediate and material adverse effect on our business.

~~The~~Non-medicinal ~~Company~~Cannabis ~~has~~remains ~~adopted~~a anSchedule ~~employee~~I ~~handbook~~controlled ~~which~~substance ~~includes~~under ~~policies~~federal ~~and guidelines for its directors~~law, ~~officers~~ and ~~employees.~~changes ~~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~~federal ~~compliance.~~enforcement ~~The~~policy ~~failure of a director, officer~~ or ~~employee of~~ the ~~Company~~scheduling ~~to comply with the applicable policies and guidelines~~status ~~may result in liability or other legal consequences, adverse publicity and termination~~ of ~~the~~cannabis ~~relationship,~~could ~~which~~affect ~~could~~our ~~materially~~business ~~adversely affect~~in ~~the~~unpredictable ~~Company~~ways.

~~Changes~~Non-medicinal incannabis ~~accounting~~is ~~rules~~classified as a Schedule I controlled substance under the Controlled Substances Act (the “CSA”) and is illegal under federal law. While some federal administrations have adopted policies of non-enforcement with respect to state-licensed cannabis operations, ~~assumptions~~those orpolicies ~~judgments~~can change at any time. Potential federal rescheduling of non-medicinal cannabis from Schedule I to Schedule III, while potentially reducing enforcement risk for CRBs, could ~~materially~~also ~~and~~attract ~~adversely~~new ~~affect~~competitors into the ~~Company~~cannabis banking market, alter the regulatory framework governing financial institutions that serve CRBs, change the federal tax treatment of CRB operators, or otherwise disrupt the economics of the market we serve. We cannot predict the direction or timing of federal cannabis policy changes or their ultimate effect on our business.

~~Accounting~~The ~~rules and interpretations for certain aspects of the~~ Company’s, our financial ~~reporting~~institution ~~are~~customers, ~~highly complex~~ and ~~involve~~our ~~significant~~CRB ~~assumptions and~~clients ~~judgment.~~are ~~These~~subject ~~complexities could lead~~ to acomplex ~~delay~~federal ~~in the preparation~~ and ~~dissemination~~state oflaws ~~the~~governing ~~Company’s consolidated~~ financial ~~statements.~~ ~~Furthermore, changes in accounting rules and interpretations or in the Company’s accounting assumptions or judgments,~~transactions ~~such~~related ~~as asset impairments and contingencies are likely~~ to ~~significantly impact the Company’s consolidated financial statements. In some cases~~cannabis, ~~the~~which ~~Company~~ could besubject ~~required~~them to ~~apply~~legal aclaims ~~new~~ or ~~revised~~restrict ~~standard~~their ~~retroactively, resulting in restating consolidated financial statements from prior period(s)~~activities. 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.

Financial institutions that bank cannabis businesses must navigate a complex web of federal and state laws, including the BSA, AML requirements, FinCEN guidance on marijuana banking, and various state cannabis regulatory frameworks. Changes in FinCEN guidance, BSA or AML examination standards, or the legal interpretation of applicable statutes could require us, or our financial institution partners, to modify or discontinue certain services to CRB clients. Any such change could materially reduce our revenues and disrupt our operations.

State-level regulatory changes, including market saturation, license non-renewals, and changes to cannabis program structures, could impair borrower viability and increase the credit risk in the portfolio we indemnify.

The viability of CRB borrowers in our loan portfolio depends substantially on conditions in their respective state cannabis markets. Market saturation, the non-renewal of cannabis licenses, adverse changes to state cannabis program structures, or increased state regulation could impair CRB operators’ ability to generate sufficient revenue to service their debt obligations. An increase in default rates among portfolio borrowers would increase the probability that we would be required to fund indemnification payments to PCCU, which could materially impair our financial condition.

IfBecause ~~the~~cannabis ~~Company~~remains ~~fails~~federally ~~to implement and maintain an effective system of internal controls~~illegal, itCRB ~~may~~borrowers ~~not~~generally becannot ~~able~~access tobankruptcy ~~accurately~~protections ~~determine~~but ~~its financial~~instead ~~results~~work orthrough ~~prevent~~the ~~fraud. As a result~~receivership process, ~~investors~~which ~~could~~complicates ~~lose~~loan ~~confidence~~workouts inand ~~the Company’s financial results, which~~ could ~~materially~~ ~~and~~increase ~~adversely~~our ~~affect~~loss ~~the~~given ~~Company~~default.

~~Effective~~Under ~~internal controls are necessary for~~ the ~~Company~~applicable tobankruptcy ~~provide~~laws, ~~reliable~~debtors ~~financial~~engaged ~~reports and effectively prevent fraud. The Company may~~ in the ~~future~~cultivation, ~~discover~~distribution, ~~areas~~or sale of ~~its~~a ~~internal~~federally ~~controls~~illegal ~~that~~substance ~~need~~are ~~improvement. We cannot be certain that the Company will be successful~~generally inineligible ~~maintaining~~for ~~adequate~~bankruptcy ~~internal~~protection. ~~control~~This ~~over~~means ~~its~~that ~~financial~~when ~~reporting~~a ~~and~~CRB ~~financial~~borrower ~~processes. Furthermore~~defaults, as the ~~Company~~workout ~~grows its business, its internal controls will become more complex,~~ and ~~the~~collateral ~~Company~~recovery ~~will~~process ~~require~~must proceed ~~significantly~~entirely ~~more~~outside ~~resources~~of tobankruptcy ~~ensure~~court, ~~its~~typically ~~internal controls~~through ~~remain~~foreclosure, ~~effective.~~deed-in-lieu ~~Additionally~~arrangements, ~~the existence of any material weakness~~ or ~~significant~~negotiated ~~deficiency~~settlements. ~~would require management to~~These ~~devote~~processes ~~significant~~typically ~~time~~take ~~and~~one ~~incur significant expense~~ to ~~remediate~~three ~~any~~years ~~such material weakness or significant deficiency~~ and ~~management may~~yield ~~not~~lower benet ~~able~~recovery toproceeds ~~remediate~~than ~~any such material weakness or significant deficiency in~~ a ~~timely~~bankruptcy-supervised ~~manner~~liquidation. 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~~ is that ~~could~~our ~~require~~actual ~~the~~loss ~~Company~~for toa ~~restate~~given ~~past~~default ~~consolidated~~on ~~financial~~indemnified ~~statements,~~loans ~~cause~~may ~~the~~be ~~Company~~materially ~~to fail to meet its reporting obligations and cause investors to lose confidence in the Company’s reported financial information~~higher, ~~all of which could materially~~ and ~~adversely affect~~our ~~the~~indemnification ~~Company.~~payments ~~See~~may ~~“––Risks Related to the Company’s Business––We have identified material~~arise ~~weaknesses in our internal control~~ over ~~financial~~a ~~reporting.~~longer Iftimeline ~~the~~with ~~remediation~~greater ofuncertainty ~~such~~than ~~material~~would ~~weaknesses~~be ~~are not effective, or if we identify additional material weaknesses in~~ the ~~future~~case orfor ~~otherwise~~conventional ~~fail~~commercial toreal ~~develop~~estate ~~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~~loans.”

~~Risks~~Service ~~Related~~providers to ancannabis ~~Investment~~businesses inmay ~~Our~~be ~~Securities~~subject to unfavorable U.S. federal income tax treatment, including potential disallowance of ordinary business deductions under Section 280E of the Internal Revenue Code (“Section 280E”).

Section 280E prohibits deductions for ordinary and necessary business expenses incurred by taxpayers who traffic in Schedule I or Schedule II controlled substances. This provision significantly increases the effective federal income tax rate for CRB operators, reducing their after-tax cash flow and their ability to service debt. Although Section 280E applies directly to CRBs rather than to service providers such as us, the financial burden it places on our borrowers affects their creditworthiness and the credit quality of the loan portfolio we indemnify. Any adverse change in federal tax policy applicable to cannabis-related businesses could further impair the financial condition of our CRB clients.

Cannabis businesses may be subject to civil asset forfeiture under federal law, which could result in the loss of collateral securing loans in our portfolio.

Federal law permits the seizure and forfeiture of assets used in connection with, or derived from, violations of the CSA. If federal authorities were to seize cannabis-related assets pledged as collateral for loans in the PCCU portfolio, the collateral available to secure repayment would be lost or materially impaired, increasing the risk that we would be required to fund indemnification payments. The risk of civil forfeiture is difficult to predict and is not fully reflected in our current collateral valuations.

We may have difficulty enforcing certain of our commercial agreements and contracts related to cannabis-adjacent services.

Because cannabis remains federally illegal, certain agreements relating to cannabis industry services may be challenged as unenforceable in federal courts or in states that do not recognize contracts related to federally illegal activities. If any of our material agreements were found to be unenforceable, we could lose the benefit of the relevant contract rights and suffer material financial harm.

Because we serve cannabis-related businesses, we may have difficulty obtaining certain insurance coverages, which could expose us to additional financial liability.

The cannabis industry’s federal legal status limits access to standard commercial insurance products. Many conventional insurers decline to provide coverage to cannabis-adjacent businesses, and the specialized insurance products that are available often carry higher premiums and more limited coverage terms. Gaps in our insurance program could leave us exposed to uninsured losses including those arising from indemnification claims, litigation, cybersecurity incidents, or errors and omissions that could materially impair our financial condition.

The conduct of third parties, including our CRB clients and their financial institution providers, may jeopardize our regulatory compliance and business relationships.

Our ability to maintain compliance with applicable laws depends in part on the conduct of the CRBs we serve and the financial institution partners through which we operate. If a CRB client engages in unlicensed activity, money laundering, or other regulatory violations, we could be exposed to regulatory sanctions, reputational harm, or legal liability even if we were unaware of the misconduct. We have what we believe to be effective compliance monitoring procedures in place, but we cannot guarantee that they will detect or prevent all violations by third parties.

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

Individuals who are not U.S. citizens and who are associated with the cannabis industry, including through employment, investment, or service on the Board, may be subject to restrictions on entry into the United States. This could limit our ability to attract and retain international talent at the Board and management levels and could affect relationships with international investors. These restrictions create practical operational challenges that do not affect companies operating in federally legal industries.

We may be subject to marketing and advertising constraints on promoting our services to cannabis-related businesses, which could limit our growth.

Restrictions on advertising and marketing to regulated industries, including cannabis, may limit our ability to promote our platform and services to prospective CRB clients or to financial institutions considering offering cannabis banking services. These constraints could slow our ability to grow our client base and expand into new geographic markets, adversely affecting our revenue growth.

Risks Related to Nasdaq Listing Compliance

Our Common Stock has previously traded below $1.00 per share, and if it were to continue to trade below $1.00 in the future, it could create an imminent risk of our securities being delisted from Nasdaq.

On April 22, 2026, the Company received a letter from the listing qualifications department staff of Nasdaq notifying the Company that for the last 30 consecutive business days the Company did not maintain a minimum closing bid price of $1.00 per share for its common stock, as required by Nasdaq Marketplace Rule 5550(a)(2). The notice had no immediate effect on the listing of the Company’s common stock or warrants. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company was provided with a compliance period of 180 calendar days, or until October 19, 2026, to regain compliance with the minimum bid price requirement. The notice states that to regain compliance the closing bid price of the Company’s common stock must meet or exceed $1.00 for a minimum of 10 consecutive business days. If the Company does not regain compliance by October 19, 2026, the Company may be eligible for a second compliance period for up to an additional 180 days.

Our stockholders approved a reverse stock split of the outstanding shares of our Common Stock within the range of 2-for-1 to 12-for-1, which our Board could execute proactively before October 19, 2026. However, if such action is not taken, we may be unable to regain compliance through other means within the required timeframe. Failure to regain compliance could ultimately result in the delisting of our Common Stock from Nasdaq. The Company intends to actively monitor the bid price and may evaluate other available options to resolve the deficiency and regain compliance with the Nasdaq Marketplace Rules, but there can be no assurance that the Company will be able to regain or maintain compliance with the foregoing or other Nasdaq listing standards

A proposed new Nasdaq rule would delist companies whose market capitalization falls below $5 million for 30 or more consecutive trading days.

We are aware of a proposed new Nasdaq rule which was filed with the SEC on January 13, 2026, that would result in mandatory delisting without a cure period if a listed company’s market capitalization is below $5.0 million for 30 consecutive trading days. See “Prospectus Summary––Nasdaq Listing Compliance” for further discussion. If such a rule is adopted and we fail to satisfy its requirements, our shares could be delisted from Nasdaq, which would have severe adverse consequences for our stockholders and our ability to raise capital. Given that our current stock price and number of shares outstanding as of the date hereof put us below the $5 million requirement, it is possible that we would not be compliant with such a rule at the time of its adoption and could be delisted as soon as 30 trading days after the proposed rule takes effect.

A delisting of our Common Stock could materially impair our ability to make future draws under the ELOC.

The ELOC requires that, as a condition precedent to each draw, there has been no suspension of trading in, or notice of delisting of, our Common Stock. The ELOC also requires us to use commercially reasonable efforts to maintain the listing and trading of our Common Stock on Nasdaq or another Eligible Market (as defined below). If we receive a final and non-appealable notice that our Common Stock will be delisted from Nasdaq, we are required to promptly seek listing on a market designated as eligible under the ELOC, which includes the Over The Counter Market (OTC), The New York Stock Exchange American, or any nationally recognized successor to any of the foregoing (each, an “Eligible Market”).

During any period between a delisting from Nasdaq and the successful listing of our Common Stock on an Eligible Market, we would be unable to satisfy the conditions precedent to make draws under the ELOC. There can be no assurance that we will maintain our Nasdaq listing, or that if delisted, we will be able to obtain listing on an Eligible Market in a timely manner or at all. Any inability to make draws under the ELOC, whether temporary or prolonged, could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Our Capital Structure and Securities

The conversion of our Series B Preferred Stock, exercise of Series B Warrants, and future draws under the ELOC could result in substantial dilution to existing holders of our Common Stock.

In connection with our September 2025 Recapitalization, we issued 31,052 shares of Series B Preferred Stock and Series B Warrants to purchase approximately 1,999,544 shares of Common Stock. As these instruments are converted or exercised, and as we draw on the ELOC, substantial additional shares of Common Stock will be issued and outstanding. This dilution could depress the market price of our Common Stock, making it harder for existing stockholders to sell their shares at or above their purchase price and potentially triggering further Nasdaq compliance issues.

The ELOC is an active financing facility, its pricing and redemption mechanics significantly reduce our net proceeds on each draw and increase dilution to existing stockholders.

We have an active ELOC under which we may raise capital by issuing shares of our Common Stock. However, each draw under the ELOC is subject to the satisfaction of certain conditions precedent, including: (i) no material adverse change in our business, operations, properties, or financial condition; (ii) no suspension of trading in, or notice of delisting of, our Common Stock; (iii) our representations and warranties remaining true and correct in all material respects; and (iv) no occurrence of any event that would reasonably be expected to have a material adverse effect on our ability to perform our obligations under the ELOC. Each draw is also priced at 90% of the lowest intraday trade price on the draw date, meaning we do not receive full market value for the shares we issue. Additionally, each draw is subject to a 25% redemption right, under which the Series B investor returns 25% of the gross draw amount to us as a redemption of Series B Preferred Stock, reducing our net cash proceeds. The combined effect of these features means we retain approximately $0.675 of net cash proceeds for every dollar of shares issued at market. To raise $1.00 of net capital, we must issue shares representing approximately $1.48 of gross market value. This structure, together with the conditions precedent described above, increases dilution to existing common stockholders and reduces the effective capacity and reliability of the ELOC as a liquidity source.

Our Series B Preferred Stock and Series B Warrants contain anti-dilution and reset provisions that could further dilute common stockholders.

The Series B instruments include down-round adjustment provisions and automatic price reset mechanics. The first and final automatic reset has already occurred, resetting the conversion price and exercise price to $1.5528 per share. While no further automatic resets are triggered, the increased share counts resulting from the reset require additional share registration. Additional issuances of Common Stock at prices below the conversion or exercise price, whether under the ELOC or otherwise, may trigger further anti-dilution adjustments, increasing the number of shares issuable to Series B holders and further diluting existing common stockholders.

Our Common Stock price may be highly volatile, and stockholders may not be able to sell their shares at or above their purchase price.

Our Common Stock has experienced significant price volatility, including extended periods of trading below $1.00 per share. Factors that have contributed, and may continue to contribute, to this volatility include our financial condition and operating results, changes to the terms of our Second Amended CAA, regulatory developments affecting the cannabis industry, Nasdaq compliance notices, limited analyst coverage, low trading volumes, and broader stock market conditions. This volatility makes it difficult for stockholders to predict when, or whether, they will be able to sell their shares at a price they consider acceptable.

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

We depend on the financial health and stability of PCCU and any other financial institution partners we may engage with. PCCU is subject to its own regulatory requirements, capital adequacy standards, and examinations by applicable oversight authorities. A regulatory enforcement action against PCCU, a deterioration in PCCU’s financial condition, or a significant adverse event at PCCU could directly and materially impair our ability to provide services to CRB clients, collect fees and interest income, and fund our operations. We have limited ability to anticipate or mitigate risks arising from the financial condition of our banking partners.

Our investment in preferred securities of Aditxt, Inc. (“ADTX”) is illiquid, subject to impairment, and may result in a partial or total loss.

We hold an investment in preferred securities of ADTX, a publicly traded company, with a carrying value of $1.45 million as of December 31, 2025. The investment was received as non-cash consideration in connection with the issuance of our Series B Preferred Stock in September 2025. Because ADTX’s preferred shares are not actively traded and do not have a readily determinable fair value, the investment is measured at cost, less any impairment, adjusted for observable price changes in orderly transactions for identical or similar instruments under ASC 321. We do not have the ability to exercise significant influence or control over ADTX, and we hold less than 20% of its voting interests.

Starting April 1, 2026, the Company can convert the ADTX preferred shares into shares of ADTX common stock at a 50% premium to the $1,000 value using a conversion price based on a 20% discount to the trailing five-day VWAP of ADXT’s common stock, which can be sold Nasdaq in tranches over multiple quarters depending on the average trading volume. Based on the conversion mechanics, the aggregate face value of ADTX’s common stock issuable upon full conversion would exceed the current carrying value of the preferred shares. However, the timing and actual proceeds we realize upon conversion and sale will depend on the trading price and volume of ADTX’s common stock at the time of each transaction. If ADTX’s common stock price declines, trading volume is insufficient to absorb our sales without significant price impact, or ADTX experiences a deterioration in its financial condition or business prospects, we may realize proceeds below our carrying value or be required to recognize an impairment charge, either of which could have a material adverse effect on our consolidated results of operations.

Risks Related to Internal Controls and Financial Reporting

The Second Amended CAA introduces significant new accounting complexity that involves material judgment and estimation uncertainty.

The Second Amended CAA requires us to measure and record a stand-ready guarantee liability at fair value at inception under ASC 460, estimate and recognize an initial financial indemnification liability under ASC 326-20, and account for retroactive revenue recognition as a subsequent event for the period from October 1, 2025 through December 31, 2025. Each of these accounting determinations involve significant estimates and management judgment. Errors in our estimates or judgments could result in material misstatements in our financial statements, which could require restatements, damage investor confidence, and adversely affect our ability to timely file required SEC reports.

One material weakness in revenue recognition related to our activity fee income from deposits held at PCCU has been remediated, however sufficient time has not passed for us to conclude that it is operating effectively.

As of December 31, 2025, the Company had material weaknesses we have identified, one specifically relates to revenue recognition for activity fee income earned on CRB deposits held at PCCU. This weakness has been remediated however sufficient time has not passed for us to conclude that it is operating effectively. There remains a risk that our reported activity fee revenues may be misstated. A misstatement in this revenue category could adversely affect investor confidence in our financial reporting, attract SEC comment or inquiry, and impair our ability to file required periodic reports on a timely basis. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years Ended December 31, 2025 and 2024––Material Weaknesses in Internal Controls” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years Ended December 31, 2025 and 2024––Internal Control Over Financial Reporting.”

We have identified a material weakness in internal control over financial reporting related to our loan documentation and expected credit loss estimation process, which could result in a material misstatement of our financial statements.

During the fourth quarter of 2025, in connection with the Company’s initial recognition of an indemnification liability under the Second Amended CAA, management identified a material weakness in internal control over financial reporting. Specifically, for the first time, the Company was required to measure a stand-ready guarantee liability at fair value under ASC 460 and an expected credit loss liability under ASC 326-20. Both measurements depend on underlying loan documentation maintained as part of the Company’s credit administration responsibilities under the Second Amended CAA. During the audit, certain loan documentation used in connection with these measurements was found to be out of date or inconsistent with the terms of the underlying loans.

While management concluded that the indemnification and expected credit loss liabilities which together totaled approximately $3.1 million as of December 31, 2025 are fairly stated as of that date, the absence of a formalized loan documentation review and maintenance process represents a control deficiency. If not remediated, this deficiency could result in a material misstatement of the Company’s indemnification liability under ASC 460 or its expected credit loss liability under ASC 326-20 in future periods.

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.

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. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years Ended December 31, 2025 and 2024––Material Weaknesses in Internal Controls” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years Ended December 31, 2025 and 2024––Internal Control Over Financial Reporting.”

Risks Related to Legal Proceedings and Regulatory Compliance

An adverse outcome in litigation to which we are or may become a party could materially and adversely affect us.

We are currently a party to a declaratory judgment action pending in a Denver County, Colorado District Court (the “District Court”) in connection with our acquisition of Rockview Digital Solutions, Inc. d/b/a Abaca (“Abaca”). On April 23, 2026, the District Court issued an omnibus order on cross-motions for summary judgement, and the District Court denied the Company’s motion for summary judgement in its entirety. See “––Recent developments in shareholder litigation against us on certain counterclaims could result in a material adverse effect on our financial position, results of operations, and cash flows” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years Ended December 31, 2025 and 2024––Litigation” for additional details. We cannot predict the timing, outcome, or cost of this litigation. An adverse ruling could result in financial judgments against us, require us to alter our business practices, or damage our reputation. In addition to existing litigation, we may in the future become subject to other legal proceedings in the ordinary course of our business. The cost of defending any litigation, even if we are ultimately successful, could be significant and could divert management attention and resources from our core operations.

Changes in laws, regulations, or rules applicable to cannabis banking, financial services, or public company reporting could adversely affect our business and results of operations.

We operate at the intersection of cannabis regulation, financial services regulation, and public company reporting requirements, all of which are subject to change. Modifications to FinCEN guidance on cannabis banking, changes in SEC reporting requirements, updates to Nasdaq listing standards, or shifts in state cannabis regulations could require us to make significant operational or compliance changes, incur additional costs, or modify or discontinue certain services. The regulatory environment in which we operate is complex and evolving, and we may not be able to adapt quickly enough to avoid adverse consequences.

An interruption in, or breach of security of, our information systems could adversely affect us.

We operate a proprietary compliance technology platform that processes sensitive financial and regulatory compliance data for CRB clients and financial institutions. A cyberattack, data breach, ransomware incident, or systems failure affecting our platform, or the platforms or systems of CRB clients or other third parties we are engaged with, could expose us to significant legal liability, regulatory sanctions, reputational harm, and operational disruption. Recovery from a serious cybersecurity incident could be costly and time-consuming, and our insurance coverage for cyber-related losses may be insufficient to fully cover the resulting damages. Our ability to maintain the trust of our clients and financial institution partners depends on the security and reliability of our technology infrastructure.

We may suffer uninsured losses or losses in excess of our insurance limits.

We carry insurance intended to cover various business risks, but the specialized nature of our cannabis-adjacent business limits our access to certain commercial insurance products. Our insurance policies are subject to coverage exclusions, deductibles, and limits that may be insufficient to fully compensate us for significant losses. In particular, losses arising from indemnification obligations under the Second Amended CAA, professional liability, cyber incidents, or regulatory actions may not be fully covered by our existing policies. Significant uninsured losses could materially impair our financial condition and our ability to continue operating.

Recent developments in shareholder litigation against us on certain counterclaims could result in a material adverse effect on our financial position, results of operations, and cash flows.

As previously disclosed in a Current Report on Form 8-K filed with the SEC, on April 23, 2026 the District Court granted summary judgment against us on counterclaims relating to the validity of the Second Amendment (as defined below) and our payment of the first anniversary parent shares, with damages to be determined at a future hearing. Additional claims, including a counterclaim concerning the $3.0 million second anniversary cash consideration payment and our declaratory judgment claim, are set for trial on August 10th and 11th of this year. We intend to defend our positions vigorously and to pursue all available legal options, but we may not prevail at trial or on any appeal that may become available.

The ultimate resolution of the litigation could result in damages, settlement payments, or other obligations that are material to us. Our ability to fund any such payment in cash may be materially constrained by the terms of the ELOC or our Series B Preferred Stock. The $3.0 million previously deposited into the District Court’s registry remains reflected in our condensed consolidated financial statements pending resolution of the related claims and is not currently available for our general operating or strategic use. An adverse outcome could have a material adverse effect on our business, financial position, results of operations, cash flows, liquidity, the trading price of our securities, and our ability to regain or maintain compliance with applicable Nasdaq listing standards. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years Ended December 31, 2025 and 2024––Litigation” for additional details.

Risks Related to Our Securities

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

~~Our~~Nasdaq ~~continued~~requires ~~eligibility~~that the trading price of its listed stocks remain above $1.00 in order for ~~listing~~stock onto remain listed. If a listed stock trades below $1.00 for more than 30 consecutive trading days, then it is subject to delisting from the Nasdaq. ~~depends~~See on“––––Risks Related to Nasdaq Listing Compliance––Our Common Stock has previously traded below $1.00 per share, and if it were to continue to trade below $1.00 in the future, it could create an imminent risk of our ~~ability~~securities being delisted from Nasdaq.” In addition, to ~~comply~~maintain ~~with~~a listing on Nasdaq’s, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders’ equity, and certain corporate governance requirements. If ~~Nasdaq~~we are unable to satisfy these requirements or standards, we could be subject to delisting, which would have ~~delists~~a negative effect on the price of our Common Stock ~~from~~and ~~trading~~would onimpair ~~its~~your ~~exchange~~ability ~~for~~to ~~failure~~sell or purchase our Common Stock when you wish to do ~~meet~~so. ~~any~~In the event of a delisting, we would expect to take actions to restore our compliance with the listing ~~standards~~requirements, but we ~~and~~can provide no assurance that any such action taken by us would allow our ~~stockholders~~Common ~~could~~Stock ~~face~~to ~~significant~~become listed again, stabilize the market price ~~material~~or ~~adverse~~improve ~~consequences~~the ~~including:~~liquidity of our Common Stock, prevent our Common Stock from dropping below the minimum bid price requirement, or prevent future non-compliance with the listing requirements.

● 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.

21The Company may issue additional shares of common or preferred stock under the Amended and Restated - 2022 Equity Incentive Plan (the “Equity Incentive Plan” or the “Plan”) or otherwise, any one of which would dilute the interest of the Company’s stockholders and likely present other risks.

The Company’s ~~may~~Second ~~issue~~Amended ~~additional~~and Restated Certificate of Incorporation authorizes the issuance of up to 1,000,000,000 shares of ~~common~~Common Stock orand 1,250,000 shares of preferred stock, ~~under~~par ~~the~~value ~~Amended~~$0.0001 per share. There are currently 994,853,581 unissued shares of Common Stock available for issuance as of May 1, 2026, which amount does not take into account shares reserved for issuance upon exercise of outstanding warrants and ~~Restated~~stock –options. ~~2022~~As ~~Equity~~of ~~Incentive~~May ~~Plan~~1, ~~(the~~2026, there were 5,146,419 shares of Common Stock, 111 shares of Series A Convertible Preferred Stock (“~~Equity~~Series ~~Incentive~~A ~~Plan~~Preferred Stock”) orand ~~otherwise~~30,332 ~~any~~shares ~~one~~of Series B Preferred Stock issued and outstanding and an aggregate of ~~which~~550,726 ~~would~~warrants ~~dilute~~outstanding. The Series B SPA permits the ~~interest~~issuance of certain securities, including Common Stock, options and other equity awards, under the Equity Incentive Plan. The Company’s ~~stockholders~~may ~~and~~issue additional shares of common or preferred stock to under ~~likely~~the ~~present~~Equity Incentive Plan or as needed for working capital or other ~~risks~~purposes.

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 2,953,473 shares of Common Stock, 111 shares of Series A Preferred Stock and 31,052 shares of Series B Preferred Stock issued and outstanding and 601,851 warrants 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.27

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.

●

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.

●

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 Series B SPA 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~~ELOC, 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.

●

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 initial public offering (“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.

23The Certificate of Designation governing our Series B Preferred Stock contains covenants that may limit our business flexibility.

The Certificate of Designation governing our Series B Preferred Stock requires the consent or cooperation of the holders of Series B Preferred Stock for certain corporate actions. If we are unable to obtain such consent or cooperation, these provisions of the Certificate of Designation governing our Series B Preferred Stock could limit our business flexibility or our ability to take, or refrain from taking, certain actions that management may believe would be in the interest of the Company and its stockholders, which could adversely affect our business and results of operations.

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 Stockholders pursuant to this prospectus. Upon any exercise of the Series B Warrants by payment of cash, we will receive the exercise price of such Series B Warrants, which, if exercised in cash with respect to all of the Series B Warrants outstanding and held by the Selling Stockholders as of the date hereof, would result in gross proceeds to us of approximately $15.53 million. However, we cannot predict when and in what amounts or if the Series B Warrants will be exercised by payments of cash and it is possible that the ~~Warrants~~Series B Warrants may expire and never be exercised, in which case we would not receive any cash proceeds from their exercise.

We intend to use any net proceeds from the exercise of Series B Warrants for working capital and other general corporate purposes.

2430

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 ~~October~~April 1729, ~~2025~~2026, there were ~~100~~101 holders of record of our Common Stock. The actual number of stockholders is greater than this ~~number~~ 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 ~~October~~May 175, ~~2025~~2026 was $30.7881 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.

2532

BUSINESS

Overview

WeThe ~~provide~~Company ~~compliance~~is ~~and~~based ~~loan~~in ~~origination~~Golden, ~~services~~Colorado. toFounded ~~financial~~in ~~institutions~~2015 ~~desiring~~by toPCCU, ~~provide~~SHF ~~business~~was ~~banking,~~among ~~private~~the ~~banking~~first ~~and commercial~~companies to provide compliant banking and lending services to ~~their~~CRBs. ~~clients,~~Our ~~particularly~~mission ~~those~~is ~~clients~~to ~~conducting~~provide ~~business~~reliable, incompliant orfinancial ~~adjacent~~services to the ~~state~~ legal cannabis, hemp, and related industries ~~industry.~~by ~~Our~~enabling ~~services~~financial ~~include~~institution customers to offer compliant banking, ~~among~~lending, and other ~~things:~~financial services to CRBs.

●We provide ~~regulatory~~ compliance ~~consulting~~ and ~~software~~loan ~~for~~origination ~~maintaining~~services ~~“Know Your Customer” (“KYC”) and BSA compliance~~ to financial institutions, ~~principally~~that ~~conducted~~wish ~~vis-à-vis~~to ~~our~~offer ~~proprietary~~business ~~financial services platform; ● the origination~~banking, ~~onboarding,~~private ~~verification~~banking, and commercial ~~servicing~~banking ofservices ~~cannabis-related~~to ~~deposit~~clients ~~business~~operating ~~for~~in ~~and~~or onadjacent ~~behalf~~to ofthe ~~our~~state-legal ~~partner~~cannabis ~~financial~~industry. ~~institutions;~~Through ~~and~~our ●proprietary ~~sourcing~~technology platform, ~~underwriting,~~which ~~servicing,~~currently ~~and~~operates ~~administering~~across ~~loans~~41 ~~issued~~states ~~to cannabis businesses~~ and ~~related entities~~territories, ~~which~~we ~~are~~enable ~~often also~~ our ~~clients,~~financial asinstitution ~~well~~customers asto ~~being~~compliantly ~~clients~~provide the offollowing ~~our~~services ~~partner~~to ~~financial institutions.~~CRBs:

●

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.

Our core service offerings include:

●

Regulatory compliance consulting and technology — We provide our financial institution customers with the tools and support needed to maintain KYC and BSA compliance, principally delivered through our proprietary financial services platform. Specific compliance services include initial customer due diligence, customer application management, program management support, compliance monitoring, and regulatory examination assistance.

●

Cannabis-related deposit services — We originate, onboard, verify, and service cannabis-related deposit business for and on behalf of our financial institutions, primarily PCCU, and constitute obligations solely of those institutions; the Company is not a financial institution and does not hold customer deposits on its consolidated balance sheet. Because most CRBs transact with high volumes of cash due to the limited availability of traditional banking services, we believe our platform benefits both CRBs and financial institutions by providing CRBs access to compliant banking and giving financial institutions access to increased, compliantly monitored deposits.

●

Lending services — We source, underwrite, service, and administer loans issued to cannabis businesses and related entities, many of which are also clients of our partner financial institutions.

We generate revenue through fee income, investment income, and loan program income earned by providing these compliance and lending services to financial institutions serving the cannabis industry.

Financial Services Platform

~~The~~We ~~Company~~have ~~has~~ developed and commercialized a ~~fully~~proprietary ~~compliant~~ financial services platform, ~~for~~known ~~financial~~as ~~institutions~~the ~~providing~~Safe ~~banking~~Harbor ~~services~~Program (the “Program”), towhich ~~CRBs~~enables tofinancial ~~access~~institutions ~~and~~to ~~maintain~~provide ~~reliable~~compliant ~~financial~~banking services asto ~~long~~CRBs. asOur ~~both~~platform ~~the~~is ~~financial~~currently ~~institution~~deployed ~~customer~~across ~~and~~41 ~~the CRB meet regulatory~~states ~~requirements.~~and ~~Our~~territories ~~platform~~and ~~enables~~is ~~the~~designed ~~Company’s staff~~ to ~~efficiently~~ guide financial institution customers and ~~the~~ CRBs ~~desiring banking services~~ through the ~~onboarding,~~full ~~validation~~lifecycle ~~and~~of ~~monitoring~~account ~~process.~~onboarding, ~~Our automated platform provides for an efficient~~ validation, and ~~effective management~~ongoing ~~tool~~compliance ~~allowing~~monitoring ~~our~~in ~~employees~~a tomanner ~~provide~~consistent ~~continuity~~with ofapplicable ~~service~~banking ~~while~~regulations ~~enabling~~and ~~compliance~~regulatory ~~staff to monitor BSA activities~~guidance.

~~Through~~The ~~the Company’s~~ platform, ~~our~~serves ~~financial~~as ~~institution~~an ~~customers~~automated ~~have~~management ~~the~~tool ~~ability~~that toallows ~~provide~~our ~~CRBs~~employees ~~with access~~ to ~~traditional~~deliver ~~financial services~~continuity ~~including~~of ~~wires,~~service ~~debit,~~while ~~ACH,~~enabling ~~remote~~compliance staff ~~deposit~~to ~~capture,~~efficiently ~~business~~monitor ~~checking~~BSA and ~~savings~~AML ~~accounts, courier and vaulting services, cash management accounts and commercial lending~~activities. WeIt ~~believe~~is ~~our~~intended ~~services~~to ~~have~~satisfy ~~been~~the ~~implemented~~compliance ~~consistent~~standards ~~with~~required ~~applicable~~by ~~law~~state and ~~regulations,~~federal ~~ensuring~~banking ~~our~~regulators, ~~financial~~and ~~institution~~since ~~customers~~inception, ~~will~~we behave ~~able~~assisted toin ~~provide~~the ~~CRBs~~processing ~~with~~of ~~reliable~~approximately ~~access to these services~~$35.4 Webillion ~~feel our history of developing processes that satisfy regulatory standards has resulted~~ in ~~a solid reputation with~~ cannabis-related ~~authorities~~depository funds and ~~solidifies our~~successfully ~~ability~~supported toour ~~continue~~financial toinstitution ~~grow~~clients ~~existing~~through ~~services~~more ~~and~~than ~~reduces~~25 ~~barriers~~state toand ~~expanding~~federal ~~into~~banking ~~new service offerings~~examinations.

It is important to note that the Company is not a financial institution and does not include loans or customer deposits, which are associated with financial institutions, on its consolidated balance sheet. All deposit accounts are held by our financial institution customers, and all funds transmitted to and from those accounts are handled directly by those institutions. Our role is to provide the compliance infrastructure, technology, and CRB client relationships that enable our financial institution partners to serve the cannabis industry.

We also license the Program to financial institutions that wish to independently provide compliant cannabis banking services. Under these licensing arrangements, we provide:

●

Initial customer due diligence (e.g., KYC);

●

Program management support;

●

Regulatory examination assistance;

●

Customer application management;

●

Compliance monitoring; and

●

Regulatory examination assistance.

We believe our platform and processes have been implemented in a manner that is consistent with applicable laws and regulations. Our track record in developing compliance processes that satisfy regulatory standards has established a strong reputation with relevant regulatory authorities, which we believe positions us well to continue growing our existing service offerings and to expand into new ones.

CRB Deposits

~~The~~We ~~Company~~maintain ~~maintains~~ relationships with PCCU and other financial ~~institutions~~institution partners in which ~~the~~ CRB funds are deposited and monetary transactions are ~~performed~~processed. ~~The~~Our ~~Company’s~~proprietary ~~agreements~~platform connects with the ~~financial~~core ~~institution~~banking ~~allow~~systems ~~the~~of ~~Company’s~~these ~~platform~~institutions, toenabling ~~interface~~us ~~with~~to ~~the~~monitor deposit ~~financial~~accounts ~~institution’s~~we ~~core~~have ~~banking~~onboarded ~~systems~~ and to extract the data necessary to ~~monitor~~help ~~the~~ongoing ~~deposit~~compliance. ~~accounts~~All ~~onboarded~~fund bytransmissions ~~the~~including ~~Company’s~~wires, ACH transactions, ~~such~~and asother ~~funds~~transfers ~~transmissions~~are toprocessed ordirectly ~~from~~through ~~the~~our ~~accounts,~~financial ~~occur~~institution ~~through PCCU~~partners’s ~~and~~infrastructure. ~~other~~The Company itself is not a financial institution and does not hold customer~~’s infrastructure~~ deposits.

~~When~~How 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~~Generate ~~our~~Revenue ~~compliance-first~~from ~~focus~~Deposits ~~reassures regulators~~Maintained ~~and~~at ~~law~~Financial ~~enforcement that the Company continues to focus on the safety and soundness of the financial system.~~Institutions?

26We generate revenue from deposits maintained at financial institutions in three primary ways. First, we may assess an initial onboarding fee when a CRB or ancillary service provider begins banking through one of our financial institution partners. This fee reflects the time and complexity involved in completing the KYC and BSA due diligence that is required before an account can be opened. Second, we earn monthly deposit and account activity fees that are based on business type, account size, and transaction activity. Third, we earn investment income when our financial institution partners invest CRB deposits in low-risk, liquid assets. The amount of investment income we earn is directly influenced by the level of deposits under their management and the prevailing interest rate environment.

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 2024.34

OnOur ~~December~~Relationship ~~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.”

PCCU is our primary financial institution partner and the holder of the majority of CRB deposit accounts we service, and this relationship is governed by the Second Amended CAA. Under the Second Amended CAA, we provide PCCU with the compliance infrastructure, technology, and CRB client relationships needed to serve the cannabis industry, and in return we earn account servicing fees, investment income on CRB deposits, and a share of loan program income on CRB loans originated through PCCU. We also pay PCCU a monthly asset hosting fee for access to its regulated banking platform and infrastructure. The Second Amended CAA will expire on December 31, 2031, afterwards the agreement will automatically renew for periods of two years unless we or PCCU provides a non-renewal notice twelve months prior to the expiration of the then-current period.

Because PCCU accounts for a significant portion of our revenue, the loss of or a material change to this relationship could have a material adverse impact on our results of operations and financial condition. See “Risk Factors––Risks Related to the Second Amended CAA,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years Ended December 31, 2025 and 2024––Relationship with PCCU” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years Ended December 31, 2025 and 2024––Related Party Relationship with PCCU.”

Commercial Lending Program

~~The~~Commercial ~~level~~lending ofis ~~CRB~~a ~~deposits~~key ~~onboarded~~component byof ~~the~~our ~~Company~~business and ~~held~~an atimportant ~~PCCU~~source ~~allows~~of ~~for~~revenue. ~~robust~~Our lending ~~capacity.~~program ~~The~~is ~~Company’s~~designed ~~commercial~~to ~~lending~~specifically address ~~program~~the ~~serves~~unique asfinancing aneeds ~~key~~of ~~pillar~~CRBs, ~~for~~which ~~future~~often ~~revenue~~have ~~and~~limited ~~profit~~access ~~growth.~~to ~~The~~traditional ~~primary~~credit ~~focus~~markets. ~~will~~We beassist, ~~on senior secured lending~~service, ~~with~~and ~~smaller~~administer loans ~~also~~on ~~considered~~behalf ~~for~~of ~~unsecured~~our ~~lending~~financial ~~opportunities.~~institution ~~Collateral~~partners, ~~types~~with ~~would~~the ~~include~~majority ~~real~~of ~~estate,~~lending ~~equipment,~~currently ~~and~~funded ~~other~~through ~~business assets.~~PCCU ~~The~~using ~~Company’s~~CRB ~~commercial~~deposit ~~lending~~balances that ~~program~~we ishave ~~built~~onboarded ~~on:~~and continue to manage.

●Our lending ~~stringent~~program ~~collateral~~is ~~package~~focused ~~requirements~~primarily on senior secured loans, with ~~ample~~collateral ~~loan~~including real estate, equipment, accounts receivable, and other business assets. Unsecured lending opportunities are also considered on a selective basis. Our approach to ~~value~~credit ~~coverage;~~is ●built on ~~strong~~three ~~underwriting~~core principles: thorough investigations of both collateral and borrower creditworthiness; ofdisciplined ~~borrower;~~loan-to-value requirements; and ● a deep knowledge ~~and understanding~~ of the cannabis industry, including the ~~borrowers’~~operational ~~operations~~ and ~~the~~business ~~cannabis~~cycle ~~industry~~dynamics ~~business~~unique ~~cycle~~to CRB borrowers.

~~Currently,~~Our ~~lending~~loan isoperations ~~primarily~~team ~~funded~~is ~~through~~directly ~~PCCU~~involved ~~using~~in ~~the~~each ~~funds~~step ~~from~~of ~~CRB~~the ~~deposit~~lending ~~accounts~~process, ~~onboarded~~including byinitial ~~the~~due ~~Company.~~diligence, ~~The~~underwriting, ~~Company~~loan ~~is currently~~closing ~~seeking~~and ~~relationships~~documentation, ~~with~~ongoing ~~additional~~servicing, ~~financial~~payment ~~institutions~~processing, ~~that~~borrower ~~would~~monitoring, ~~fund~~risk ~~the~~rating, ~~Company’s~~and ~~loans~~workout and ~~other~~collections ~~sources~~when ~~of working capital~~necessary. ~~with~~PCCU’s ~~which~~loan ~~the~~committee ~~Company~~retains ~~could~~final ~~fund~~approval ~~the~~authority ~~loans~~over ~~directly.~~all ~~The~~credit ~~Company~~decisions, ~~has~~and ~~created~~PCCU ais ~~lending~~the ~~program~~legal ~~tailored~~lender ~~specifically~~of torecord ~~the unique needs~~under ofall ~~CRBs~~loan ~~while also achieving strong returns on quality loans~~agreements. ~~While~~We ~~third~~earn ~~parties~~a ~~are~~share ~~presently~~of ~~used~~the ~~to provide~~ loan ~~underwriting~~program ~~and servicing,~~income ~~the Company plans~~ on ~~building~~loans ~~out~~originated athrough ~~full-service~~PCCU ~~internal~~under ~~lending function to improve~~ the ~~efficiency~~terms of ~~our~~the ~~lending~~Second ~~process~~Amended ~~and~~CAA. toSee ~~increase~~“––CRB ~~future~~Deposits” ~~profitability~~above.

WeOur ~~feel~~available welending ~~have~~capacity ~~taken~~is adirectly ~~creative~~tied ~~and~~to ~~methodical~~the ~~approach~~size inof ~~building~~our ~~the~~managed ~~Company’s~~deposit ~~platform~~base, ~~which~~as ~~has~~the ~~allowed~~amount uswe tocan ~~nationally~~arrange ~~scale~~in loans through PCCU ~~our~~is ~~business.~~based ~~The~~on ~~platform’s~~a ~~policies,~~regulatorily ~~training,~~stipulated ~~monitoring~~percentage ~~and~~of ~~other~~average ~~processes~~CRB deposits. We are ~~well~~incentivized ~~established~~to ~~with~~deploy ~~talented~~available ~~employees~~lending ~~who~~capacity, as ~~have~~loan ~~expert-level~~program ~~knowledge.~~income Weon ~~also~~funded ~~plan~~loans togenerally ~~further~~exceeds ~~expand~~ the ~~officer-level~~investment ~~suite~~income ~~with~~that ~~talent~~would ~~that~~otherwise webe ~~believe~~earned ~~will~~on ~~further~~the ~~our~~same ~~success~~deposits. Growing Weand ~~anticipate~~retaining ~~this~~the ~~combination~~CRB ~~will~~deposit ~~provide~~base atherefore ~~competitive~~remains ~~advantage~~central ~~for~~to usour asability weto ~~focus~~expand onthe ~~continued~~lending ~~growth~~program.

In 2025, we executed lending program agreements with certain companies that provide us access to private capital sources, including family offices and private equity funds. These agreements provide additional funding channels for CRB loans outside of our PCCU relationship. These agreements are intended to diversify our lending capacity and reduce our dependence on a single funding source. The Company did not have any revenue from these arrangements, however we believe these agreements represent an important avenue for future growth as we continue to build and deploy the lending program.

Our Mission

Our mission is to ~~become~~serve as the ~~cannabis~~trusted ~~industry’s~~financial ~~leading~~partner to CRBs and the financial ~~services~~institutions ~~provider~~that serve them by ~~creating~~providing the compliance infrastructure, lending access, and operational support to allow them to operate, grow, and succeed in a ~~one-stop~~highly ~~financial~~regulated ~~service~~industry. ~~center~~We ~~upon~~are ~~which~~committed to being the most reliable and knowledgeable financial services provider in the cannabis ~~businesses~~sector, ~~can~~and ~~rely~~to expanding the range of services we offer as the industry matures.

We ~~intend~~believe toour ~~support~~competitive ~~our~~position ~~mission~~is bybased ~~providing~~on ~~unparalleled~~four ~~customer~~strengths ~~and~~that ~~client~~are ~~service~~difficult ~~while~~to ~~offering~~replicate: a ~~unique~~decade ~~array~~ of ~~innovative~~demonstrated ~~technology-based~~experience navigating ~~products~~the regulatory requirements and ~~services.~~passing Wemany ~~believe~~audits ~~that~~of cannabis banking; deep cannabis domain expertise amongst our ~~unique~~employees ~~banking~~and management and long-standing relationships, ~~reputation~~with ofboth ~~reliability~~CRBs inand the ~~cannabis~~financial ~~industry,~~institutions asthat ~~well~~serve them; and a proprietary compliance platform asthat ~~our~~has ~~deep~~processed ~~expertise~~approximately ~~and~~$35.4 ~~experience~~billion in ~~the~~cannabis-related ~~industry,~~deposit ~~will~~activity ~~position~~across 41 states and territories since 2015. These capabilities allow us to serve a broad range of cannabis industry participants, including ~~cannabis~~ cultivators, processors, manufacturers, dispensaries, and multi-state operators, as well as the financial institutions that wish to bank ~~cannabis industry participants~~them. ~~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.~~

27Growth Initiatives

~~Through~~We aare ~~combination~~pursuing ~~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~~four ~~industry’s~~complementary ~~recent~~growth ~~large-scale consolidations.~~initiatives:

●

We are focused on growing our core deposit and lending business organically by increasing the number of CRB accounts we onboard and manage for our financial institutions, deepening relationships with existing and potentially new financial institution partners, and by deploying more of our available lending capacity through PCCU and our expanding network of private capital partners.

●

In December 2025, we acquired substantially all of the assets of 420 IT Solutions, a company that provided on-site due diligence review services to cannabis-friendly financial institutions. This acquisition added capabilities that are complementary to our existing compliance platform and expanded the suite of services we can offer to financial institution customers seeking to enter or grow their cannabis banking programs.

●

We are investing in the development of a managed services business that will offer outsourced consulting and operational support directly to CRBs and financial institutions. These are expected to include outsourced finance, accounting, treasury, information technology, and human resources services, as many CRBs lack the internal infrastructure to operate in these areas efficiently. We generated initial revenue from this business line in 2025, though it was not material. We are actively investing to build this capability and grow it into a meaningful revenue contributor over time.

●

We are growing through strategic partnerships with third parties who can expand our reach, capabilities, and capital base. In 2025, we executed lending program agreements that allow us to access private capital sources, including family offices and private equity funds, to provide additional funding capacity for CRB loans outside of our PCCU relationship. These partnerships are intended to reduce our funding concentration risk and increase the volume of loans we are able to originate and service.

We are also pursuing partnerships with other CRB-focused service providers whose offerings are complementary to ours, with the goal of creating a more integrated set of solutions for cannabis businesses and the financial institutions that serve them. While revenue from these partnership channels was not material in 2025, we believe they represent an important foundation for future growth.

We believe that the combination of our established compliance and banking infrastructure, our expanded on-site review capabilities following the acquisition of the assets of 420 IT Solutions, our emerging managed services business, and our growing network of capital and strategic partnerships positions us to serve cannabis businesses and financial institutions more comprehensively than any other provider in our market.

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 approximately 425,000 people in the United States, per the Vangst~~ U.S. Cannabis ~~Jobs Report 2025.~~Market

~~Despite~~The ~~rapid~~United ~~growth,~~States cannabis industry ~~participants~~has ~~continue~~grown into one of the largest and most economically significant emerging sectors in the American economy. In 2025, total U.S. state-licensed cannabis market revenues were estimated at approximately $30.4 billion, with forecasts projecting the market to ~~face~~reach ~~various~~approximately ~~headwinds~~$31.5 billion in 2025 and potentially exceed $76 billion by 2030, ~~including:~~reflecting a compound annual growth rate of approximately 19%. The industry supports an estimated 425,000 full-time jobs nationwide and generated more than $4.4 billion in state and local tax revenues in 2025. In addition, the intoxicating hemp market had an estimated value of $21.8 billion in 2025.

●The regulatory ~~Regulatory~~landscape ~~complexity~~has ~~and~~continued ~~taxation.~~to ~~Federal~~evolve ~~law,~~at ~~including~~ the ~~prohibition~~state onlevel. ~~ordinary~~As ~~business~~of ~~deductions~~the ~~under~~date ~~Section~~hereof, ~~280E~~40 ofstates, ~~the~~three ~~Code~~territories, ~~continues~~and tothe ~~materially~~District of ~~limit~~Columbia ~~profitability~~permit ~~for~~the ~~operators.~~medical ●use ~~Capital~~of ~~constraints.~~cannabis, ~~High~~and ~~interest~~24 ~~rates~~states, two territories, and the ~~illegality~~District of ~~the~~Columbia ~~cannabis~~have ~~industry~~enacted ~~under~~laws ~~federal~~permitting adult-use ~~law~~recreational ~~have~~cannabis. ~~restricted~~Despite ~~affordable~~this ~~access~~broad tostate-level ~~debt~~acceptance, ~~and~~cannabis ~~equity~~remains ~~financing.~~classified ●as ~~Competition~~a ~~from~~Schedule ~~illicit~~I ~~markets.~~controlled ~~Lower-cost,~~substance under ~~unregulated~~the ~~alternatives~~CSA, ~~continue~~creating toa ~~compete~~persistent ~~with~~gap ~~licensed~~between ~~operators.~~state ●and ~~Limited~~federal ~~banking~~law ~~access.~~that ~~The~~fundamentally ~~majority~~shapes ofhow ~~U.S.~~cannabis ~~financial~~businesses ~~institutions~~operate, ~~remain~~including their ~~unwilling~~ability to ~~serve~~access ~~CRBs~~banking ~~due~~and tofinancial ~~federal~~services, ~~illegality~~obtain standard business financing, and ~~perceived~~manage ~~compliance~~their ~~burdens~~tax obligations.

AtFederal ~~the~~Regulatory ~~federal~~Developments ~~level,~~— ~~policy~~Rescheduling ~~changes~~to ~~remain~~Schedule 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.III

~~Market~~The ~~Dynamics~~federal regulatory environment for cannabis has undergone significant and ~~Opportunity~~evolving changes recently, and the Company believes these developments are material to an understanding of the industry in which it operates.

WeIn ~~believe~~August 2023, the ~~demand~~U.S. ~~for~~Department ~~reliable,~~of ~~compliant~~Health ~~financial~~and ~~services~~Human ~~for~~Services ~~CRBs~~(“HHS”) isrecommended ~~growing~~that inthe ~~parallel~~Drug ~~with~~Enforcement Administration (“DEA”) reschedule cannabis from Schedule I to Schedule III of the ~~broader~~CSA, concluding that cannabis ~~industry.~~has ~~Although~~a currently accepted medical use and a ~~small~~lower ~~number~~potential offor ~~financial~~abuse ~~institutions~~than ~~currently~~Schedule ~~provide~~I ~~services~~or toSchedule ~~CRBs~~II substances. In May 2024, the ~~market~~U.S. ~~remains~~Department ~~highly~~of ~~fragmented~~Justice ~~and underpenetrated.~~(the ~~Building~~“DOJ”) ~~compliance~~issued ~~frameworks~~a ~~capable~~Notice of ~~serving~~Proposed ~~the~~Rulemaking ~~industry~~proposing ~~requires~~to ~~substantial~~move ~~investment,~~cannabis ~~specialized~~from ~~expertise,~~Schedule ~~and~~I ~~reputational~~to Schedule III. The proposed rule ~~tolerance~~generated nearly 43,000 public comments. AsWhile a ~~result~~formal DEA administrative hearing was initially scheduled for January 2025, wethat ~~believe~~hearing was ~~many~~stayed ~~institutions~~by ~~will~~the ~~continue~~presiding toadministrative ~~seek~~law ~~outsourced~~judge ~~solutions~~pending resolution of procedural appeals, and the rescheduling process effectively stalled for much of 2025.

~~Our~~On ~~established~~December ~~track record~~18, ~~industry-specific expertise~~2025, ~~and~~President ~~reputation~~Donald ~~for~~Trump ~~compliance~~signed ~~position~~an usExecutive toOrder ~~serve~~titled ~~this~~Increasing ~~need.~~Medical ~~Over~~Marijuana ~~the~~and ~~past~~Cannabidiol ~~decade~~Research, ~~our~~directing ~~team~~the ~~has~~Attorney ~~developed~~General ~~relationships~~of ~~across~~the ~~regulators,~~United ~~financial~~States ~~institutions,~~to ~~and~~“take ~~operators,~~all ~~and~~necessary westeps ~~are~~to ~~frequently~~complete ~~called~~the ~~upon~~rulemaking toprocess ~~share~~related to ~~insights~~rescheduling onmarijuana ~~cannabis~~to ~~banking~~Schedule inIII ~~industry~~of ~~conferences,~~the ~~webinars,~~CSA ~~and~~in ~~podcasts.~~the ~~Members~~most ofexpeditious ~~our~~manner ~~leadership~~in ~~team~~accordance ~~have~~with ~~participated~~Federal inlaw.” ~~public~~This Executive ~~forums~~Order ~~with~~did ~~state~~not ~~and~~itself ~~federal~~reschedule ~~officials~~cannabis, ~~regulators,~~as ~~law~~formal ~~enforcement,~~rescheduling ~~and~~requires ~~financial~~completing ~~services~~the ~~providers~~full torulemaking ~~address~~process, ~~challenges~~which ~~and~~includes ~~best~~DEA ~~practices~~issuing ina ~~cannabis~~final ~~banking.~~rule, Wehowever we believe ~~this~~it ~~visibility~~represents ~~reinforces~~one ~~our~~of ~~credibility~~the most significant federal cannabis policy directives in more than 50 years and ~~strengthens~~signals ~~our~~a ~~ability~~clear intent within the executive branch of the federal government to ~~enter~~bring ~~new~~the ~~and~~rescheduling ~~emerging markets~~process to conclusion.

~~The~~On ~~combination~~April of23, ~~strong~~2026, ~~projected~~the ~~industry~~DOJ ~~growth,~~issued ~~limited~~a ~~access~~final toorder ~~traditional~~implementing ~~financial~~a ~~services,~~rule that places Food and ~~the~~Drug ~~increasing~~Administration ~~demand~~(“FDA”) ~~for~~approved products ~~compliant~~containing cannabis and products regulated by state medical marijuana licenses in Schedule III. The DOJ also initiated an expedited ~~banking~~administrative ~~solutions~~hearing process to consider the broader rescheduling of cannabis to Schedule III. The final order creates a ~~significant~~pathway ~~long-term~~for state ~~market~~licensed ~~opportunity.~~medical Weoperators ~~believe~~to ~~our~~legally ~~tested~~cultivate, ~~platform~~manufacture, ~~compliance~~and ~~expertise~~dispense medical only products, and ~~reputation~~could also remove Section ~~uniquely~~280E ~~position~~considerations usfrom tothe ~~capitalize~~medicinal onaspects ~~these~~of ~~industry~~CRBs’ ~~dynamics~~operations. ~~and~~In addition, the DEA will commence an expedited administrative hearing on June 29, 2026 to ~~become~~consider awhether ~~leading~~cannabis ~~provider~~should ofbe ~~financial~~more ~~services~~broadly rescheduled from Schedule I to ~~CRBs~~Schedule III.

28Legal challenges to the rescheduling process are anticipated. Organizations opposing rescheduling may argue that the proposed rule is procedurally flawed or scientifically unsupported, and litigation under the Administrative Procedure Act is possible after a final rule is published. The ultimate timing of any final rescheduling rule therefore remains uncertain, and investors should not rely on any specific timeline for completion of the rescheduling process.

~~The~~We ~~cannabis~~believe ~~industry~~the ~~has~~most ~~been~~immediate ~~unfavorably~~and ~~impacted~~financially bymaterial aconsequence ~~variety~~ of ~~factors,~~rescheduling ~~including~~would ~~competitive~~be ~~illicit alternatives in~~ the ~~market,~~elimination ~~high inflation~~of ~~unfavorably~~Section ~~impacting~~280E. ~~consumer~~Under ~~spending,~~the ~~a challenging tax environment that limits federal deductibility of certain operating~~current ~~costs~~law, ~~and~~cannabis ~~high~~businesses ~~interest~~classified ~~rates~~as ~~unfavorably~~drug ~~impacting~~traffickers ~~the~~under ~~ability~~federal oflaw ~~industry~~because ~~participants~~of tothe ~~find~~cannabis’ ~~affordable~~current ~~capital.~~Schedule WeI ~~expect~~status ~~this~~are ~~rapid~~prohibited ~~growth~~from todeducting ~~favorably~~ordinary ~~impact~~and ~~our~~necessary ~~total~~business ~~available~~expenses, ~~market~~including ~~offset~~payroll, inrent, ~~part~~and bymarketing ~~increased~~costs. ~~competition~~This ~~from~~results ~~financial~~in ~~institutions that~~effective ~~choose~~federal totax ~~build~~rates ~~rather~~for ~~than~~cannabis ~~outsource~~operators ~~their~~that ~~compliance~~are ~~programs.~~materially ~~Having~~higher ~~created~~than athose ~~reliable~~faced ~~reputation~~by ~~and~~businesses ~~network~~in ~~over~~other ~~the~~industries. ~~past ten years,~~Rescheduling ~~the Company is well positioned~~ to ~~assist~~Schedule ~~growing~~III ~~markets.~~could ~~Our~~eliminate ~~team~~the isSection ~~often~~280E ~~called upon to work with state and federal officials~~penalty, ~~regulators, law~~thereby ~~enforcement~~improving ~~and~~cash ~~financial~~flows ~~service providers to share experience~~ and ~~knowledge~~profitability onfor ~~navigating~~state-legal ~~access~~cannabis ~~to financial services. We believe~~operators ~~this~~across ~~expertise~~the ~~garners trust that will allow us to enter new markets with greater ease~~country.

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.37

WeRescheduling ~~believe~~could ~~there~~also isencourage ~~currently~~greater aparticipation ~~relatively~~by ~~small~~academic ~~subset~~institutions ~~of the financial services industry willing to provide a full suite of financial services to CRBs~~ and ~~these~~pharmaceutical ~~providers~~companies ~~are extremely fragmented. The Company has been a front runner~~ in ~~assisting~~researching ~~financial institutions that desire to provide reliable financial services to~~ the ~~cannabis~~medicinal ~~industry and is well known amongst the leaders in the cannabis financial~~properties ~~services~~of ~~arena. Going forward~~cannabis, as we ~~feel~~believe ~~this~~such ~~positions~~institutions ~~the Company well to further optimize market position~~ and ~~become~~companies ~~the~~have ~~leading~~historically ~~provider of~~avoided ~~access~~using toSchedule ~~financial~~I ~~services~~substances ~~for~~in ~~the~~their ~~cannabis industry~~research.

The Company does not believe that rescheduling, on its own, would eliminate the market for its services. In fact, the Company believes that rescheduling could improve the financial stability of its CRB clients, which would as a result help support higher average account balances. In addition, rescheduling could attract additional financial institutions to join the cannabis banking market, and the Company could partner with some or all of these new entrants.

Banking Access

Despite the growth of state-legal cannabis markets, the vast majority of cannabis-related businesses continue to face constraints in accessing basic banking and financial services. Because non-medicinal cannabis remains a Schedule I controlled substance under federal law, federally regulated financial institutions including banks, credit unions, and payment processors face legal and regulatory risk when providing services to CRBs. Financial institutions that serve CRBs are required to file Suspicious Activity Reports (“SARs”) for cannabis-related transactions under the BSA and related FinCEN guidance, which creates a compliance burden that many financial institutions appear unwilling to assume. As a result, the majority of CRBs continue to operate primarily in cash and in turn this method of operation can create public safety risks, operational inefficiencies, and barriers to tax collection and regulatory oversight.

A bipartisan letter signed by 32 state attorneys general in July 2025 urged Congress to advance the SAFER Banking Act, which is designed to protect federally regulated financial institutions from penalties when they provide services to state-sanctioned cannabis businesses. The SAFER Banking Act has passed the U.S. House of Representatives in prior legislative sessions but has repeatedly failed to advance in the Senate. The bill’s near-term prospects in the current Congress remain uncertain given current legislative dynamics and policy priorities. The Company exists, in part, because of this structural gap in banking access and the need for compliance-driven platforms that enable financial institutions to serve CRBs in a manner that is consistent with applicable federal banking regulations and Fin CEN guidance.

Market Headwinds and Industry Pressures

The cannabis industry experienced meaningful financial and operational headwinds during 2024 and 2025. Wholesale cannabis prices declined in some state markets due to oversupply and increasing competition, constraining operator revenues and reducing average deposit balances across the industry. Cannabis operators collectively carry an estimated $2.5 billion in debt and only approximately 27% of cannabis companies were profitable in 2024 compared to 42% of such companies in 2022. In addition, several large multi-state operators are facing significant debt maturities. These pressures have been reflected in lower average account balances and reduced transaction activity across the Company’s portfolio during 2025.

At the same time, the Company believes there are meaningful catalysts for industry recovery. A potential rescheduling of non-medicinal cannabis could materially improve operator cash flows and profitability. See “––Federal Regulatory Developments—Rescheduling to Schedule III.” In addition, broader improvements to the United States’ economy and the growth rate of consumer discretionary spending could support higher cannabis sales volumes. The expansion of state-level markets could increase the number of CRBs as well.

The Company believes that its platform, its established relationships with financial institution customers, and its proprietary compliance infrastructure position it to benefit from an industry recovery as these factors develop.

Regulatory Framework for Cannabis Banking

Under current federal guidance, financial institutions that serve CRBs are required to operate under the framework established in FinCEN’s 2014 guidance memorandum, which outlined our expectations for BSA compliance, ongoing customer due diligence requirements, and SAR filing obligations specific to cannabis banking. The guidance has never been superseded by statute, and financial institutions operating in the cannabis banking space continue to face regulatory examination risk, possible reputational harm in the event of a violation, and the ongoing administrative burden of SAR filings. The Company’s platform and compliance program are designed to address these requirements directly, thereby enabling its financial institution partners to serve CRBs with confidence in their regulatory compliance.

The Company has assisted in the processing of approximately $35.4 billion in cannabis-related depository funds since 2015 and has successfully navigated more than 25 state and federal banking examinations through its financial institution relationships. The Company currently operates its platform across 41 states and territories, serving a diversified base of CRB clients and financial institution customers.

Business Strategy

WeSHF’s ~~provide~~mission ~~compliant~~is to be the leading compliance-driven financial services ~~solutions~~platform for the U.S. cannabis industry, enabling partner financial institutions to serve CRBs ~~through~~reliably, ~~relationships~~safely, and in full conformity with ~~partner~~applicable ~~financial~~federal ~~institutions~~and state regulatory requirements. Our ~~platform enables~~strategy ~~those~~is ~~institutions~~based toon ~~offer~~five ~~depository,~~priorities: ~~payment,~~stabilizing and organically growing our core platform business; deepening lending-related ~~services~~revenue tothrough our ~~CRBs~~relationship ~~while~~with PCCU and other capital sources; building complementary service lines; maintaining ~~compliance~~and ~~with~~expanding ~~applicable~~financial ~~regulatory~~institution ~~requirements.~~partnerships; ~~Fees~~and ~~are~~positioning ~~primarily~~the ~~generated~~Company to benefit from ~~account~~anticipated ~~services,~~favorable ~~transaction~~changes ~~activity,~~in ~~and~~the ~~lending-related~~federal ~~services~~cannabis banking regulatory environment.

~~Our~~Loans ~~strategy~~are isextended ~~focused~~to cannabis related businesses, including both licensed cannabis operators and ancillary service providers to the cannabis industry. The cannabis industry continues to grow and expand at a rapid pace due in part to the on-going ~~responsibly~~opening ~~scaling~~of ~~our~~additional ~~business~~legalized cannabis ~~by:~~markets at the state level. Due to the federally status of cannabis, most cannabis-related businesses have experienced years of inability to access capital at reasonable rates, and these circumstances can force them to purchase properties and equipment and fund their businesses from personal investment or reinvestment of cash from operations, which could potentially limit their own growth. This creates a robust opportunity for us to lend to established entities with real estate assets free of debt. Businesses are taking the opportunity to leverage such assets to expand and grow their operations while we build a senior secured portfolio ostensibly collateralized with a real estate or other hard asset such as equipment.

●Furthermore, the ~~Expanding~~industry ~~relationships~~has ~~with~~typically ~~CRBs~~been ~~and~~subject ~~partner financial institutions~~ to ~~increase~~“hard ~~the~~money” ~~number~~lending ofwith ~~clients~~annual ~~utilizing~~rates ~~our~~available ~~platform~~between ~~and~~18-36%. ~~diversify~~This ~~our~~is ~~funding~~yet ~~sources.~~another opportunity ●for ~~Enhancing~~us ~~lending capabilities~~ to ~~support~~offer ~~the~~refinancing ~~financing needs~~ of ~~CRBs~~real inestate ~~partnership~~and ~~with~~equipment ~~financial~~loans ~~institutions~~at ~~and~~more ~~other~~favorable ~~capital~~interest ~~providers~~rates. ●Given ~~Developing~~that ~~additional~~the ~~products~~depository relationship ~~and~~is ~~services~~necessary ~~that~~as ~~improve~~part ~~efficiency,~~of ~~strengthen~~the compliance process, ~~and~~we ~~provide~~benefit ~~value-added~~from ~~solutions~~servicing, tomonitoring, ~~our~~and ~~clients.~~validating ●compliance ~~Investing~~of indepository relationships, ~~technology~~earning ~~and~~fees ~~operational~~on ~~efficiency~~deposits. toThis ~~support~~results ~~growth,~~in ~~reduce~~a ~~costs,~~lower ~~and~~cost ~~maintain~~of ~~high~~capital ~~standards~~when ofaccounting ~~regulatory~~for ~~compliance.~~the ●fact ~~Attracting~~that ~~and~~we ~~retaining~~earn ~~experienced~~interest ~~personnel~~income on ~~with~~ both ~~financial~~the ~~services~~depository and ~~cannabis~~lending ~~industry expertise to deliver high-quality client service~~relationships.

WeStabilize ~~believe our ability to grow~~ and ~~retain~~Organically ~~our~~Grow ~~CRB~~the ~~client~~Core ~~base~~Deposit ~~is closely tied to our ability to provide reliable access to banking~~ and ~~lending services~~Compliance 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.Platform

29Our primary business is providing compliance infrastructure, technology platforms, and ongoing monitoring services that allow partner financial institutions to provide banking services to CRBs. Since 2015, we have assisted in the processing of approximately $35.4 billion in cannabis-related depository funds across a platform footprint of 41 states and territories, and through our financial institution relationships, we have successfully navigated more than 25 state and federal banking examinations. These milestones reflect the depth and durability of our compliance expertise and the strength of our established relationships with both CRBs and financial institutions.

~~Nasdaq~~Our ~~Listing~~near-term ~~Compliance~~organic growth strategy focus is on increasing the number of CRB accounts we onboard and manage, deepening relationships with existing financial institution partners, and selectively expanding to new financial institution partners to the extent market conditions and our operational capacity can support it.

AsAnother ofkey ~~June~~component ~~30,~~of ~~2025,~~ our ~~stockholders’~~organic ~~deficit~~growth ofstrategy ~~approximately $17.9 million~~ is ~~$20.4~~early ~~million~~entry ~~below~~into ~~the~~emerging $2cannabis markets.5 ~~million~~We ~~minimum~~define ~~equity~~“emerging markets” ~~requirement~~as ~~for~~American ~~continued~~states ~~listing~~with oncannabis ~~Nasdaq~~programs ~~under~~that ~~Rule~~have ~~5550(b)(1). We~~launched ~~received~~or abeen ~~deficiency~~materially ~~notice~~expanded ~~from~~within ~~Nasdaq~~the ~~regarding~~past ~~this~~five ~~noncompliance,~~years. ~~and~~Our weemerging ~~submitted~~market portfolio aspans ~~compliance~~three ~~plan~~distinct onopportunity ~~May 22, 2025.~~categories:

~~On April~~● 7,New ~~2025,~~Markets ~~the~~Coming ~~Company~~Online: ~~received~~In astates ~~notice from Nasdaq indicating~~ that ithave norecently ~~longer~~launched ~~met~~or ~~the~~are ~~continued~~actively ~~listing~~implementing ~~requirements. The~~cannabis ~~Company~~licensing ~~does~~programs, ~~not~~such ~~meet~~as ~~the~~Delaware, ~~alternative~~Minnesota, ~~criteria~~Kentucky, ~~for~~Alabama, ~~continued~~and ~~listing~~Mississippi, ~~which~~we are ~~based~~working onto ~~the~~establish ~~market~~banking ~~value~~relationships ofas ~~listed~~operators ~~securities or~~prepare ~~net~~for ~~income from continuing operations Specifically~~launch, ~~the~~with ~~Company’s~~account ~~stockholders’~~activity ~~equity~~evolving ~~was below the minimum required stockholders’ equity of $2.5 million~~ as ~~stipulated~~businesses byprogress ~~Nasdaq’s~~through ~~Listing~~their ~~Rule~~respective ~~5550(b)(1)~~licensing ~~(“Rule~~and ~~5550(b)(1)”)~~operational phases.

A compliance plan was submitted to Nasdaq on May 22, 2025, and Nasdaq confirmed receipt of our compliance plan. As a result of the recent preferred equity financing, Nasdaq informed the Company that it has regained compliance with Rule 5550(b)(1). In that regard, the Company believes that its stockholders’ equity exceeds $2.5 million, and SHF anticipates that the information contained in its Quarterly Report on Form 10-Q for the period ended September 30, 2025, will reflect this. The Company also believes that its stockholders’ equity will continue to exceed $2.5 million as of December 31, 2025.39

~~There can~~● beLicensing noExpansion ~~assurance~~in ~~that~~Established ~~the~~Adult-Use ~~Company~~States: ~~will~~States beexpanding ~~able~~their ~~maintain~~licensing ~~compliance~~frameworks, ~~with~~such ~~any~~as ~~other~~New ~~Nasdaq~~York, ~~requirement~~New inJersey, Maryland, Connecticut, Missouri, and Ohio, increase the ~~future~~demand for compliant banking services as new operators are allowed into these markets.

~~Amended~~ ● Operator Footprint Expansion: States such as Pennsylvania, Illinois, Virginia, and ~~Restated~~Florida, ~~CAA~~where ~~with~~existing ~~PCCU~~operators are scaling their operations, require more sophisticated banking and financial services.

OnBy ~~December~~entering ~~31,~~these ~~2024~~markets early, weoften ~~entered~~before ~~into~~licensing anprograms ~~Amended~~are ~~and~~fully ~~Restated~~developed, ~~Commercial~~the ~~Alliance~~Company ~~Agreement~~aims ~~with~~to ~~PCCU~~position ~~(the~~itself ~~“Amended~~as ~~CAA”),~~the ~~which~~partner ~~governs~~of ~~our~~choice ~~ongoing~~for ~~customer~~licensed ~~relationship~~operators navigating complex and evolving regulatory environments. ~~The~~In ~~Amended~~emerging ~~CAA~~markets, ~~extends~~deposit ~~the~~levels ~~term~~naturally fluctuate ofas ~~the~~operators ~~agreement~~progress through ~~December~~business 31cycles, ~~2028,~~from ~~with~~deploying ~~automatic two-year~~startup ~~renewals~~capital ~~unless~~during ~~either~~launch ~~party~~phases ~~provides~~to atbuilding ~~least~~working ~~twelve~~capital reserves ~~months’~~as ~~advance~~operations ~~notice~~mature. ofSee ~~non-renewal~~“––Recent Developments––Emerging Markets” for additional information.

~~Under~~Deepen Lending Revenue Through the Second Amended CAA: and Expanding Capital Partnerships

● Under Wethe ~~are~~Second noAmended ~~longer~~CAA, ~~required~~we toreceive ~~indemnify~~up ~~PCCU~~to ~~for~~65% of loan~~-related~~ ~~losses.~~program ●income ~~Our~~generated ~~fee~~by ~~obligations~~PCCU’s ~~are~~CRB ~~based~~loan onportfolio, aan ~~fixed~~increase ~~asset~~from the ~~hosting~~approximately ~~fee~~35% ~~tied~~share toin ~~the~~effect ~~average~~from ~~daily~~January ~~balance~~1, of2025 ~~account~~until ~~relationships~~September ~~generated~~30, ~~through~~2025 ~~our~~under ~~platform.~~the ●CAA Weand ~~are~~the ~~entitled~~First toAmended ~~all~~CAA. ~~investment~~In ~~income~~exchange, we onare ~~funds~~obligated ~~invested~~to onindemnify ~~our~~PCCU ~~behalf~~for byup ~~PCCU.~~to ●65% ~~Interest~~of ~~income~~net onlosses ~~loans~~of isa ~~determined~~default ~~under~~on aany loan ~~yield~~covered ~~allocation~~by ~~formula~~the ~~that~~Second ~~references~~Amended UCAA.S. ~~Treasury~~As ~~rates~~of ~~and~~December 31, a2025, ~~risk-rating~~the ~~methodology.~~CRB ●loan Weportfolio ~~are~~totaled ~~subject~~approximately to$52.1 ~~certain~~million ~~fees~~across ~~and~~25 ~~interest~~loans, ~~charges~~with ifzero ~~agreed~~historical ~~Loan-to-Share~~losses ~~Ratio~~since ~~thresholds~~the ~~are~~program’s inception ~~not~~in ~~maintained~~2023. ●Our ~~The~~strategy ~~prior~~is ~~per-account~~to ~~servicing,~~grow ~~investment~~the ~~hosting, and~~ loan ~~servicing~~portfolio ~~fees~~responsibly ~~have~~by ~~been~~continuing ~~eliminated~~to ~~and~~originate ~~replaced~~quality ~~with~~CRB aloans ~~single~~through ~~fixed~~PCCU, maintain 1%rigorous ~~asset~~credit ~~hosting~~underwriting ~~fee~~standards, ~~tied~~and tobuild the ~~average~~cash ~~daily~~reserves ~~balance~~and ofcapital ~~account~~access ~~relationships~~necessary ~~generated~~to ~~through~~support our ~~platform~~indemnification obligations. ~~This model aligns servicing costs with account balances.~~

~~While~~In ~~the~~2025, ~~prior~~we ~~management~~executed ~~expected~~lending ~~the~~program ~~Amended~~agreements ~~CAA~~with certain companies that provide us access to ~~simplify~~private ~~our~~capital ~~fee~~sources, ~~structure~~including family offices and ~~remove~~private ~~the~~equity ~~indemnification~~funds. ~~liability,~~These ~~the~~agreements ~~contract~~provide ~~has~~additional funding channels for CRB loans outside of our PCCU relationship. ~~been~~These ~~unprofitable~~agreements ~~year~~are intended to ~~date~~diversify inour ~~2025~~lending ~~despite~~capacity ~~significant~~and ~~cost~~reduce ~~cuts~~our dependence on a single funding source. The Company did not have any revenue from these arrangements, however we believe these agreements represent an important avenue for future growth as we continue to build and deploy the lending program.

~~Amendment~~The toSeptember ~~Senior~~2025 ~~Secured~~Recapitalization ~~Promissory~~eliminated ~~Note~~approximately ($18 million in debt and raised gross proceeds of $6.7 million in new capital, and also resulted in the ~~“Senior~~establishment ~~Secured~~of ~~Promissory~~the ~~Note~~$150 million ELOC with an institutional investor (the “ELOC Investor”) that can potentially be expanded to $500 million, thereby meaningfully improving our ability to support our lending commitments and ~~Deferral~~portfolio growth. ~~Agreement~~During ~~with~~the ~~PCCU~~fourth quarter of 2025, the Company issued 1,326,603 shares of Common Stock and received proceeds of approximately $1.8 million.

OnBuild ~~March~~Complementary 1,Service 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.Lines

30In December 2025, we acquired substantially all of the assets of 420 IT Solutions, a company that provided on-site due diligence review services to cannabis-friendly financial institutions. This acquisition added capabilities that are complementary to our existing compliance platform and expanded the suite of services we can offer to financial institution customers seeking to enter or grow their cannabis banking programs. On-site reviews are a key component of BSA/AML compliance for cannabis-banking financial institutions, and bringing this capability in-house strengthens both our service offerings and our compliance infrastructure.

~~The~~In ~~Amended~~addition, ~~PCCU~~we ~~Note~~are ~~continues~~investing toin ~~grant~~the ~~PCCU~~development of a ~~first-priority~~managed ~~security~~services ~~interest~~business inthat ~~the~~will ~~Company’s~~offer ~~assets~~outsourced consulting and ~~requires~~operational ~~compliance with~~support adirectly ~~debt~~to ~~service~~CRBs ~~coverage~~and ~~ratio~~financial ~~covenant of 1~~institutions.4 toThese ~~1.0,~~are ~~tested~~expected ~~annually.~~to ~~While~~include ~~the~~outsourced ~~Amended~~finance, ~~PCCU~~accounting, ~~provides~~treasury, ~~flexibility~~information ~~through an initial~~technology, ~~period~~and ofhuman ~~interest-only~~resources ~~payments~~services, ~~any~~as ~~failure~~many toCRBs ~~meet~~lack ~~our~~the ~~repayment~~internal ~~obligations~~infrastructure orto ~~covenant~~operate ~~requirements could result~~ in anthese ~~event~~areas ~~of default~~efficiently. InWe ~~such~~generated ~~event,~~initial revenue ~~PCCU~~from ~~would~~this bebusiness ~~entitled~~line toin ~~exercise~~2025, ~~remedies~~though ~~under~~it ~~the~~was ~~security~~not ~~agreement,~~material. ~~including~~We ~~acceleration~~are ofactively ~~the~~investing ~~debt, which~~to ~~could~~build ~~materially~~this capability and ~~adversely~~grow ~~affect~~it ~~our~~into a ~~operations~~meaningful ~~and~~revenue ~~financial~~contributor ~~position~~over time.

On September 30, 2025, the Company entered into the Debt Cancellation Agreement with PCCU. Pursuant to the terms of the Debt Cancellation Agreement, the outstanding principal amount of all loans made to the Company, including the Amended PCCU Note was deemed repaid and the obligations of the Company represented thereby with respect to such principal amount was deemed to be satisfied in full and cancelled in exchange for 13,436 shares of Company’s Series B Preferred Stock and a Series B Warrant to purchase 865,200 shares of Stock, subject to adjustment as provided in the Series B Warrant.40

~~Involvement~~Maintain inand ~~Certain~~Expand ~~Legal~~Financial ~~Proceedings~~Institution Partnerships

ToOur ~~our~~business ~~knowledge~~model depends on maintaining strong, ~~none~~trust-based ofrelationships with our ~~current~~financial ~~directors~~institution orpartners. ~~executive~~PCCU ~~officers~~remains ~~has~~our most significant financial institution customer. We continue to partner with other financial institutions that wish to compliantly provide banking services to CRBs, ~~during~~including ~~the~~with ~~past~~respect ~~ten~~to ~~years:~~KYC onboarding, ongoing compliance monitoring, program management support, and regulatory examination assistance.

●We are ~~been~~also ~~convicted~~pursuing inpartnerships awith ~~criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and~~ other ~~minor~~CRB-focused ~~offenses);~~service ●providers ~~had~~whose ~~any~~offerings ~~bankruptcy~~are ~~petition~~complementary 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~~ours, 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~~the ~~engaged~~goal ~~in any such activity; ● been found by a court~~ of ~~competent jurisdiction in~~ creating a ~~civil~~more ~~action~~integrated orset byof ~~the~~solutions ~~SEC~~for orcannabis ~~the~~businesses ~~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 orthat ~~insurance~~serve ~~companies~~them. ~~including,~~While ~~but~~revenue ~~not~~from ~~limited~~these ~~to,~~broader partnership achannels ~~temporary~~was 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~~material ~~reversed, suspended or vacated, of any self-regulatory organization (as defined~~ in ~~Section 3(a)(26) of the Exchange Act)~~2025, ~~any~~we ~~registered~~believe ~~entity~~they ~~(as~~represent ~~defined~~an inimportant ~~Section~~foundation ~~1(a)(29)~~for offuture ~~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~~growth.

~~Except~~Position asfor ~~set~~Regulatory 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.Tailwinds

OnWe ~~October~~believe ~~17, 2024,~~ the Company ~~filed~~is awell-positioned ~~declaratory~~to ~~judgment~~capitalize ~~action~~on inany ~~the~~cannabis-related ~~Denver~~rescheduling ~~County District Court, Case No~~developments. ~~2024CV33187,~~As ~~against Daniel~~discussed ~~Roda~~above, ~~Gregory~~we W.believe that ~~Ellis, and James R. Carroll (the “Defendants”), each of whom is~~ a ~~former~~rescheduling ~~shareholder~~ of ~~Rockview Digital~~cannabis ~~Solutions,~~from ~~Inc.~~Schedule ~~(d/b/a~~I ~~Abaca) (“Abaca”), which the Company acquired in October 2022. The action relates~~ to aSchedule ~~$3.0 million~~III ~~contingent~~would ~~merger~~decrease ~~consideration~~tax ~~payment~~burdens ~~(the~~for ~~“Merger~~cannabis ~~Payment”)~~operators ~~due under the merger agreement by~~ and ~~between~~improve the financial ~~Company~~stability ~~and~~of ~~the~~CRBs. ~~other~~See ~~parties named therein and its subsequent amendments (the~~ “~~Merger~~––Federal ~~Agreement”).~~Regulatory ~~The~~Developments—Rescheduling ~~Company initiated litigation~~ to ~~determine~~Schedule ~~the appropriate party authorized to receive the payment following internal disputes among the former Abaca shareholders~~III.”

The potential impact of such reforms on our current and prospective financial institution partners could be significant. According to FinCen approximately 998 depository institutions, 816 banks and 182 credit unions, were actively filing marijuana-related SARs, which is the primary indicator that an institution is serving CRBs, as of December 2024. This represents less than 11% of the approximately 9,140 FDIC- and NCUA-insured depository institutions operating in the United States as of December 31, 2024. In addition, industry analysts estimate that less than 200 financial institutions nationwide have a dedicated, actively marketed cannabis banking program.

OnWe ~~November~~believe ~~21,~~the ~~2024,~~primary reason the ~~Company~~vast ~~deposited~~majority of U.S. financial institutions have not entered the $3cannabis banking market is regulatory risk and the compliance burden.0 ~~million~~Under ~~payment~~current ~~into~~federal law and the ~~registry~~2014 ofFinCEN guidance, every institution serving a CRB must file initial and continuing SARs on a quarterly basis, establish and maintain enhanced BSA/AML compliance programs, and accept the ~~Denver~~reputational ~~County~~and examination ~~District~~risk ~~Court~~that accompanies providing banking services in ~~accordance~~ connection with a ~~court-approved~~federally ~~motion~~controlled substance. This compliance burden represents the market barrier that the Company’s platform is specifically designed to address. We believe that passage of the SAFER Banking Act or related federal cannabis banking legislation, or regulatory relief related to the rescheduling of cannabis to Schedule III, would meaningfully lower that barrier and expand the ~~funds~~scope ~~remain~~of ~~held~~financial byinstitutions willing to enter the ~~court~~cannabis ~~pending~~banking ~~resolution~~market. An increase in the number of financial institutions seeking to serve CRBs would represent a larger market for our compliance services. Regulatory relief would, in our view, be more likely to accelerate the ~~dispute~~adoption of cannabis banking programs by financial institutions than to make our compliance infrastructure obsolete, given that state-level regulatory requirements, ongoing due diligence obligations, and BSA program management would remain necessary regardless of federal scheduling changes.

OnOperational ~~December~~Efficiency ~~19, 2024, the Defendants filed a counterclaim against the Company alleging breach of contract~~ and ~~related~~Financial 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.Discipline

OnFollowing ~~January~~the 16September 2025 Recapitalization and the restructuring of the CAA in February 2026, we are focused on operating with greater financial discipline. With no material debt outstanding as of December 31, 2025, and improved liquidity from the ~~Company~~recapitalization ~~filed~~and athe ~~motion~~ELOC, our near-term priorities include reducing operating costs, improving cash generation, and maintaining the cash reserves required to ~~dismiss~~support our ~~all~~lending ~~counterclaims~~indemnification ~~filed~~obligations ~~against~~under the ~~Company~~Second Amended CAA.

OnWe ~~April~~believe ~~18,~~that ~~2025,~~ the ~~District~~combination ~~Court~~of ~~for~~our ~~the~~established ~~City~~compliance and ~~County~~banking ~~of Denver~~infrastructure, ~~Colorado~~our ~~(i)~~expanded ~~dismissed~~on-site ~~Gregory~~review W.capabilities ~~Ellis~~through the as420 aIT ~~counter-plaintiff and~~Solutions ~~third-party~~asset ~~plaintiff~~acquisition, ~~because~~our ~~Mr.~~emerging ~~Ellis~~managed ~~lacked~~services ~~standing~~offerings, toand ~~bring~~our ~~any~~growing ~~claim~~network ~~and~~of ~~(ii)~~capital ~~denied~~and astrategic ~~third-party’s~~partnerships positions ~~request~~us to ~~intervene in~~serve ~~the~~cannabis ~~litigation.~~businesses ~~The~~and ~~remainder~~financial ofinstitutions ~~the~~more ~~case~~comprehensively ~~will~~than ~~proceed~~any toother ~~the~~provider ~~discovery~~in ~~phase~~our ~~of litigation~~market.

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~~three ~~brand~~audiences: ~~visibility,~~financial ~~acquiring~~institutions ~~new~~seeking ~~CRB~~to ~~clients,~~enter ~~and~~or ~~strengthening~~expand ~~relationships~~their ~~with~~cannabis banking ~~existing~~programs, ~~clients~~CRBs ~~and~~seeking ~~financial~~access ~~institutions.~~to ~~Because~~compliant ~~the~~banking ~~industry~~and ~~remains~~financial ~~highly~~services, ~~regulated~~ and ~~fragmented,~~the ~~our~~broader ~~strategy~~regulatory ~~emphasizes~~and ~~trust, compliance,~~legislative ~~and~~community ~~credibility~~whose decisions asshape ~~key~~our ~~differentiators~~operating environment.

~~Our approach is centered on:~~41

~~● Brand Development and Market Positioning.~~ We generate ~~are~~new ~~refreshing~~financial ~~our~~institution ~~brand~~relationships toprimarily ~~reflect~~through ~~our~~direct ~~role~~outreach, asreferrals afrom ~~fintech-driven~~existing ~~platform~~partners, ~~serving CRBs~~ and ~~to support broader client engagement. ● Visibility and Thought Leadership. We participate~~ participation in ~~select~~ industry ~~events~~conferences and ~~forums~~events. ~~and~~Our ~~maintain~~leadership ~~public~~team ~~and~~actively ~~investor~~engages ~~communications~~in ~~designed~~speaking toopportunities ~~enhance credibility~~ and ~~awareness~~thought ofleadership ~~our~~forums ~~services.~~that position ●the ~~Digital~~Company ~~Presence.~~as ~~We maintain~~ a ~~professional~~recognized ~~online~~authority ~~presence~~in ~~and~~cannabis ~~use~~banking ~~digital channels to ensure accessibility to prospective clients and financial institution partners~~compliance. ~~● Client and Financial Institution Relationships.~~ We ~~seek~~also tomaintain ~~grow~~relationships bywith ~~adding~~state ~~new~~regulators, legislators, ~~financial institution partners~~ and byattorneys ~~strengthening~~general ~~retention~~to ~~through~~support ~~personalized~~awareness ~~client engagement and reliable delivery~~ of ~~services.~~compliant ~~● Value-Added Partner Network. We are developing a~~ cannabis~~-friendly~~ ~~partner~~banking ~~network~~frameworks ~~designed to deliver additional operational~~ and ~~financial solutions~~ to ~~CRBs.~~contribute ~~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~~policy ~~distribution~~discussions as ~~and~~they ~~enhance the value we deliver to clients and financial institution partners~~evolve.

WeCRB customer ~~believe~~acquisition ~~that~~is ~~this~~largely ~~targeted, relationship-~~driven ~~approach~~by ~~supports~~referrals ~~the~~from ~~acquisition~~our offinancial ~~new~~institution ~~CRBs~~partners and ~~financial~~from ~~institutions~~existing CRB customers, ~~deepens~~reflecting ~~client~~the ~~loyalty~~trust-based nature of our platform. We also support customer acquisition and retention through ~~value-added~~targeted ~~services~~outreach, referral programs, and ~~positions~~success ~~the~~fee ~~Company~~arrangements asthat aalign ~~trusted~~our ~~provider~~growth ofincentives ~~compliant~~with ~~financial~~those ~~services~~of inour ~~the cannabis sector~~partners.

32In 2025, we completed a comprehensive rebrand of the Company and its digital presence, repositioning the Company around a unified value proposition that we are the Company where cannabis businesses can come to bank, borrow, operate, and grow. The rebrand included a full redesign of our website and client-facing materials to reflect the expanded scope of our platform beyond compliance and deposit services.

Also in 2025, we formalized and professionalized our Safe Harbor Partner Program by hiring a Senior Vice President of Strategic Partnerships and enrolling more than a dozen third-party partners. These partners refer CRB clients to our platform in exchange for referral fees, while referred CRB clients receive preferential pricing on our services. Although the program was not a material revenue contributor in 2025, it represents an important investment in our distribution infrastructure and is expected to support client acquisition growth in 2026 and beyond.

The December 2025 acquisition of substantially all of the assets of 420 IT Solutions also meaningfully expanded our field presence. Our team now can conduct on-site reviews at financial institutions and CRB locations across the country, and our established presence in key cannabis markets provides the Company with additional capacity to attend industry events, build relationships with prospective clients, and support business development activity in growth markets where in-person engagement is an important part of building trust.

To support broader brand awareness and investor communications, we work with outside public relations and investor relations advisors and maintain an ongoing program of digital marketing, search engine optimization, and direct outreach to current and prospective clients.

Competition

~~Our~~The ~~business~~market ~~model~~for iscannabis-related ~~based~~banking ~~on providing compliance~~ and financial compliance services ~~solutions~~is tocompetitive ~~financial~~and ~~institutions~~evolving. ~~that~~We ~~choose~~face tocompetition ~~serve~~from ~~CRBs.~~two primary ~~Accordingly,~~sources: we(1) dosoftware-as-a-service ~~not~~(“SaaS”) ~~generally~~compliance ~~compete~~technology ~~directly~~providers ~~with~~that ~~other~~enable financial institutions ~~for~~to ~~CRB~~build and operate their own cannabis banking ~~relationships.~~programs ~~Instead,~~and ~~our~~(2) integrated financial ~~institution~~ ~~customers~~technology ~~face~~(“fintech”) ~~competition~~company ~~from~~platforms ~~local~~that ~~and~~combine regulatory ~~regional~~compliance ~~banks,~~solutions ~~credit~~with ~~unions,~~broader ~~and~~financial ~~larger~~services ~~financial~~offerings. ~~institutions~~We ~~that~~believe ~~may~~we ~~seek to~~compete ~~enter~~on the ~~cannabis~~basis ~~banking~~of ~~market.~~our ~~These~~regulatory ~~competitors~~reputation, compliance ~~often~~track ~~have~~record, ~~significantly~~depth ~~greater~~of ~~financial~~cannabis ~~and~~industry ~~operational~~expertise, ~~resources~~breadth of financial services, ~~broader product~~quality ~~lines~~of client relationships, and ~~wider~~the overall ~~distribution~~value ~~networks~~of our platform.

ToSaaS ~~participate~~Compliance inTechnology 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.Providers

InA ~~addition,~~number ~~there~~of ~~are~~companies ~~ancillary~~offer ~~technology~~software ~~providers~~platforms ~~that~~designed ~~market~~to provide financial institutions with the compliance infrastructure and monitoring tools ~~solutions~~necessary to provide banking services to CRBs without engaging a specialized third-party compliance provider. These platforms provide KYC tools, BSA monitoring, SAR preparation, and related compliance workflows that financial institutions, ~~which~~can ~~may~~operate internally. By lowering ~~serve~~the ascost anand ~~alternative~~amount of expertise required for a financial institution to ~~outsourcing~~build ~~arrangements~~its ~~with~~own ~~us.~~cannabis ~~These~~banking ~~solutions~~program, ~~can~~these ~~support~~SaaS ~~institutions~~providers reduce barriers to entry for banks and credit unions that ~~elect~~have tonot ~~manage~~historically participated in the cannabis banking market. We believe ~~compliance~~our ~~programs~~competitive ~~internally~~advantages over these providers include our more than 10-year operational track record in cannabis banking, our established relationships with state and federal banking regulators, our zero-lending-failure history, and the depth of our full-service platform, which extends well beyond software tooling to include client onboarding, ongoing relationship management, lending support, and regulatory examination assistance.

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.42

Integrated Fintech Platforms Offering Regulatory Compliance Solutions

A second source of competition comes from fintech companies that bundle regulatory compliance capabilities with complementary financial services, such as payment, supply chain management, or lending, into a vertically integrated suite of services. These platforms seek to serve CRBs through this suite of services, thereby increasing customer switching costs and reducing the need for a standalone compliance and banking infrastructure provider. Competitors in this category include financial institutions that have developed proprietary compliance and banking capabilities specifically tailored to the cannabis industry, as well as specialty lenders that combine capital deployment with advisory services.

Competitive Dynamics and Risks

We expect competition to increase as the cannabis industry matures, as additional states legalize cannabis for medical and/or adult use, and as federal regulatory developments, including the potential rescheduling of cannabis under the CSA, reduce barriers that have historically limited larger financial institutions’ participation in the market. If non-medicinal cannabis is rescheduled to Schedule III, we believe that a broader set of well-capitalized banks, credit unions, and fintech companies would likely seek to enter into or expand their presence in the cannabis banking market, potentially reducing our competitive differentiation and increasing pricing pressure on the fees we charge.

Despite these risks, we believe our primary competitive strengths include the following:

●

Our leadership team’s rare combination of areas of expertise. We believe we are uniquely positioned as the only fintech cannabis financial solution whose executive leadership team, including our Chief Executive Officer, brings together direct, hands-on experience in cannabis operations, financial services, and banking. This integrated expertise allows us to serve cannabis-related businesses with a depth of understanding that we believe no competitor can replicate.

●

Our established regulatory reputation and proven track record. Since our founding in 2015, we have successfully navigated more than 25 state and federal banking examinations, a record we believe is unmatched in our industry and reflects the rigor and integrity of our compliance infrastructure.

●

Our proprietary compliance management platform. Our technology platform, operating across 41 states and territories, has facilitated the processing of approximately $35.4 billion in cannabis-related depository funds since 2015. The platform enables financial institution partners to provide BSA and FinCEN-compliant banking services to CRBs, including KYC onboarding, ongoing transaction monitoring, and regulatory exam support.

●

Our comprehensive suite of financial services for CRBs. Through our financial institution customers and strategic partners, we offer CRBs access to business checking and savings accounts, cash management, commercial lending, ACH and wire payment services, remote deposit, and ancillary compliance consulting, addressing the full spectrum of financial needs that CRBs face in an underserved market.

We cannot assure you, however, that we will be able to compete successfully against current or future competitors, and increased competition could materially and adversely affect our business, financial condition, and results of operations. For additional information, see “Risk Factors.”

Intellectual Property

AsThe weacquisition doof ~~not~~substantially ~~have~~all ~~any~~of ~~registered~~the ~~intellectual~~assets ~~property,~~of we420 ~~currently~~IT ~~rely~~Solutions onincluded ~~confidentiality~~the ~~and~~transfer ~~non-disclosure~~of, ~~agreements~~among ~~with~~other ~~our~~things, ~~employees and~~the ~~others~~registered ~~to protect our proprietary rights. Despite these efforts to protect ourselves from infringement or misappropriation of our~~trademark ~~intellectual~~“420 ~~property~~IT ~~rights~~Solutions”, ~~unauthorized~~domain ~~parties~~name ~~may~~registrations, ~~attempt to copy or otherwise obtain~~ and ~~use~~other ~~our~~ intellectual property ~~in violation of our rights. In the event of a successful claim of infringement against us~~, orincluding ~~our~~420 ~~failure~~IT orSolution’s ~~inability to develop non-infringing intellectual~~whitepaper ~~property~~of orbanking ~~license~~compliance ~~the~~services ~~infringed~~and orsite ~~similar~~inspection ~~intellectual property on a timely basis, our business could be harmed~~templates.

Except as described above, we do not have any registered intellectual property, and therefore 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

WeMost doloan ~~not~~production ~~experience~~is ~~material~~generally subject to seasonality, inwith ~~our~~the ~~revenues.~~lowest ~~Our~~volume ~~income~~typically isbeing ~~generated~~in ~~primarily~~the ~~from~~first ~~loan~~quarter ~~interest,~~of ~~loan-related~~each ~~fees,~~year. ~~account~~This does ~~activity~~not ~~fees,~~necessarily ~~and~~apply ~~interest~~to ~~earned~~us onas ~~deposits~~we ~~held~~serve ~~with~~the ~~partner~~cannabis ~~financial~~industry ~~institutions.~~with ~~Loan~~demands ~~and~~for ~~fee~~access ~~income~~to ~~have~~capital ~~historically~~at ~~been~~reasonable ~~relatively stable~~rates throughout the year. We expect, asbased ~~demand~~upon ~~for~~our ~~compliant~~pipeline ~~banking~~of ~~and~~demand, ~~credit~~a ~~among~~methodical ~~cannabis-related~~and ~~businesses~~consistent ~~has~~growth ~~generally~~in ~~been~~the ~~consistent~~lending portfolio.

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~~The ~~investment~~Company’s ~~policy requires that~~ investment ~~decisions~~activities beare ~~made~~limited ~~based~~in ~~on,~~scope ~~but~~and ~~not~~are ~~limited~~guided ~~to,~~by ~~the following~~ four core principles: investment quality, liquidity ~~requirements~~, interest-rate risk ~~sensitivity~~management, and ~~estimated~~ return on investment. ~~These~~Given ~~characteristics~~the ~~are~~nature ~~pillars~~ of our ~~investment~~business ~~decision-making~~and ~~process,~~our ~~which~~obligations ~~seeks~~under tothe ~~minimize~~Second ~~exposure~~Amended toCAA, ~~risks~~maintaining adequate ~~while~~liquidity ~~providing~~is aour ~~reasonable~~primary ~~yield~~investment ~~and liquidity~~objective.

Most of the Company’s liquid assets are held in cash and cash equivalents, including interest-bearing money market accounts. The Company does not maintain a significant portfolio of marketable securities.

During 2025, the Company acquired 1.5 million preferred securities of ADTX for $1.5 million, which is accounted for at cost less impairment under ASC 321, as the preferred shares are not actively traded and do not have a readily determinable fair value. During the year ended December 31, 2025, the Company received redemption proceeds of approximately $0.05 million for 43 shares of ADTX. As of December 31, 2025, the Company holds 1,457 preferred securities of ADTX having carrying value of $1.45 million. This investment is classified as long-term and will be periodically assessed for impairment or observable price changes.

The Company does not engage in speculative investment activity and does not hold derivative financial instruments for investment purposes.

Regulations and Legislation

~~Our~~Non-medicinal ~~operations~~cannabis ~~are~~remains ~~subject~~a toSchedule anI ~~evolving~~controlled ~~regulatory~~substance ~~framework~~under ~~that~~the ~~combines banking~~CSA, ~~financial~~making ~~services,~~it ~~cannabis,~~illegal ~~and hemp. While cannabis remains a controlled substance~~ under federal law, ~~many~~despite ~~states~~being ~~have~~legal ~~legalized cannabis~~ for medical and/or adult recreational use, ~~creating~~in a ~~divergence between~~majority ~~federal~~of ~~and~~U.S. ~~state regimes~~states. This conflict ~~has~~between ~~contributed~~federal ~~to limited access to banking~~ and ~~capital~~state ~~for~~law ~~CRBs,~~is ~~which in turn creates demand for~~ the ~~services~~central weregulatory ~~provide to financial institutions. We are not a depository institution and are not directly regulated as a~~reality ~~bank,~~shaping ~~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~~The ~~financial~~Federal-State ~~institutions~~Conflict ~~remain~~and ~~hesitant~~Its toImpact ~~directly~~on ~~bank CRBs due to:~~Banking

●Because cannabis ~~The~~remains ~~continued~~federally ~~classification~~illegal, ofmost ~~cannabis~~financial asinstitutions aare ~~Schedule~~unwilling Ito ~~controlled~~provide ~~substance~~banking ~~under~~services ~~federal~~to ~~law,~~CRBs. ~~creating~~The arisks ~~conflict~~deterring participation ~~with~~include ~~state~~potential ~~legalization~~federal ~~regimes.~~prosecution, ●civil ~~The~~asset ~~absence~~forfeiture ofexposure, areputational ~~federal~~risk, ~~“safe~~and ~~harbor”~~significant ~~for~~BSA ~~banks~~compliance obligations. ~~serving~~FinCEN ~~CRBs,~~issued ~~leaving~~guidance ~~officers~~in ~~and~~February ~~directors~~2014 ~~potentially~~establishing ~~exposed.~~a ●framework ~~The~~for ~~extensive~~how ~~BSA/AML~~financial ~~obligations,~~institutions ~~which~~may ~~require~~serve ~~costly~~the ~~monitoring,~~cannabis ~~validation,~~industry while ~~and~~meeting ~~reporting~~their ~~processes.~~BSA ●and ~~The~~AML ~~2014~~obligations. ~~FinCEN~~While ~~Guidance,~~this ~~which~~guidance ~~provides~~created a ~~framework~~path ~~for~~forward, ~~banking~~it ~~CRBs~~also ~~but~~imposed issubstantial ~~subject~~compliance toburdens, including ~~interpretation~~detailed ~~and~~customer ~~enforcement~~due ~~risk.~~diligence, ●transaction ~~The~~monitoring, ~~resource-intensive~~and ~~training~~SAR ~~and~~filing ~~specialized~~obligations, ~~compliance~~that ~~systems~~most ~~required~~financial toinstitutions ~~onboard,~~are ~~monitor,~~unwilling or ~~and~~unable ~~validate~~to ~~cannabis-related~~resource ~~accounts~~adequately.

~~These~~We ~~barriers~~believe ~~create~~ the ~~opportunity~~absence ~~for~~of ~~our~~a ~~platform,~~federal ~~which~~“safe ~~allows~~harbor” for financial institutions toand ~~serve~~their officers and directors who service CRBs remains ~~while~~the ~~outsourcing~~single ~~many~~most ofsignificant structural barrier to entry in this market, and this was the ~~compliance~~primary reason the Company was founded ~~burdens~~and continues to usoperate.

~~At the~~Pending ~~federal~~and ~~level,~~Recent ~~multiple~~Federal ~~proposals could alter the regulatory environment for both financial institutions and CRBs:~~Legislation

●Congress ~~STATES~~has ~~2.0~~made ~~Act~~several ~~would~~attempts ~~amend~~to ~~the~~address ~~Controlled Substances Act (~~the ~~“CSA”)~~banking toaccess 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 CRBsproblem. ● The ~~SAFER~~SAFE Banking Act, ~~which~~of ~~evolved~~2021 ~~from~~ (the “SAFE Banking Act,”) passed ~~would~~the ~~prohibit federal regulators from penalizing financial institutions for serving legal CRBs~~U. ~~While it has bipartisan support, its ultimate passage remains uncertain~~S. ●House ~~The Department~~ of ~~Health~~Representatives ~~and~~in ~~Human~~April ~~Services has recommended~~2021, and ~~federal~~an ~~policymakers~~updated ~~have publicly discussed~~version, ~~moving cannabis from Schedule I to Schedule III. Rescheduling would not legalize cannabis federally but could eliminate~~ the ~~tax~~SAFER ~~impact~~Banking ofAct, ~~Section~~passed ~~280E of~~ the ~~Code,~~Senate ~~thereby~~Banking ~~improving~~Committee in ~~CRB~~September ~~cash flow and potentially increasing deposit activity~~2023. ~~Reports~~As 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~~date ~~Improvement Act~~ of ~~2018.~~this ~~Proposed federal reforms and recent state actions seek to restrict or ban these products~~filing, ~~which~~neither ~~could~~bill ~~consolidate~~has ~~the~~been ~~regulated~~enacted ~~cannabis~~into ~~market~~law. ~~and~~We ~~shift~~continue ~~activity~~to ~~into~~monitor ~~more~~legislative ~~strictly monitored channels~~developments closely.

3444

~~Even~~Separately, ifHHS ~~federal~~recommended ~~legislation~~in ~~such~~2023 asthat cannabis be rescheduled from Schedule I to Schedule III under the ~~SAFER~~CSA. ~~Banking~~This ~~Act~~recommendation orwas ~~STATES~~forwarded to 2the DEA and remains pending.0 ~~Act~~However, ison ~~enacted~~April 23, we2026 ~~believe~~the ~~many~~DOJ ~~financial~~implemented ~~institutions~~a ~~will~~rule ~~remain~~that places FDA approved products containing cannabis ~~cautious~~and ~~about~~products ~~directly~~regulated ~~banking~~by ~~CRBs~~state ~~due~~medical tomarijuana ~~the~~licenses ~~intensive~~in ~~compliance~~Schedule ~~requirements,~~III. ~~reputational~~If ~~considerations~~further rescheduling occurs, ~~and~~it ~~operational~~could ~~risk.~~meaningfully impact Ascannabis ~~a result~~businesses, including by modifying the ~~need~~application of Section 280E, which currently prohibits ordinary business deductions for companies ~~outsourced~~trafficking ~~compliance~~in ~~solutions~~Schedule isI ~~expected~~substances. toGreater ~~persist~~after-tax cash flow for CRBs could increase deposit activity and borrowing capacity both of which would benefit the Company.

~~Rescheduling~~We ordo ~~other~~not ~~reforms~~believe ~~may~~passage ~~expand~~of the ~~overall~~SAFE ~~market~~Banking ~~opportunity~~Act ~~for~~or ~~CRBs,~~the ~~which~~SAFER ~~could~~Banking ~~increase~~Act ~~banking~~alone ~~and~~would ~~lending~~significantly ~~activity~~reduce ~~across~~the ~~our~~barriers ~~partner~~to entry that define ~~financial~~our ~~institutions~~competitive advantage. ~~However,~~The ~~legislative~~high ~~and~~cash-intensity ~~regulatory~~of ~~uncertainty~~the ~~remains~~cannabis business, ~~and~~its ~~any~~illicit ~~changes~~history, ~~could~~and ~~materially~~the ~~impact~~ongoing ~~the~~presence ~~pace~~of ~~and~~an illicit ~~scope~~market ofmean ~~industry~~that ~~growth,~~BSA ~~the~~compliance ~~willingness~~obligations will remain demanding regardless of ~~financial~~whether ~~institutions~~a tosafe ~~participate,~~harbor ~~and~~is ~~the~~enacted. ~~demand~~We ~~for~~expect ~~our~~many ~~services~~potential competitors will continue to avoid the sector.

~~Key~~Our ~~Regulatory~~Compliance ~~Challenges~~Framework

~~Cannabis~~The ~~remains~~Company aoperates ~~controlled~~in ~~substance~~a ~~under~~compliance-first ~~the~~manner ~~CSA.~~aligned ~~The~~with ~~conflict~~the ~~between~~2014 ~~federal~~FinCEN ~~law~~Guidance and ~~state~~BSA ~~legalization~~requirements. ~~regimes~~Although ~~creates~~we ~~uncertainty~~are ~~for~~not a chartered financial ~~institutions~~institution, ~~and~~our ~~financial~~agreements ~~service~~with ~~providers.~~financial ~~Although~~institution ~~the~~partners ~~2013~~require ~~Guidance~~that ~~Regarding~~we ~~Marijuana~~provide ~~Enforcement~~services ~~from~~consistent ~~the~~with ~~U.S. Department~~applicable ofregulatory ~~Justice~~standards. ~~(the~~Our ~~“2013~~compliance ~~Cole~~program ~~Memorandum”)~~includes ~~was~~comprehensive ~~rescinded~~written inpolicies ~~2018~~and procedures, ~~federal~~ongoing ~~prosecutors~~and ~~retain~~annual ~~prosecutorial~~employee ~~discretion~~training, quarterly and ~~the potential~~annual ~~for~~third-party ~~enforcement~~compliance ~~actions~~audits, ~~remains.~~and ~~Assets~~continuous ~~connected~~assessments toby ~~cannabis~~management. ~~businesses~~These ~~may~~policies beare ~~subject~~formally toreviewed ~~seizure,~~at least ~~and~~annually. ~~financial~~The ~~institutions that~~Company ~~choose~~has tosuccessfully ~~serve~~navigated ~~the~~more ~~industry~~than ~~could~~25 ~~face~~state and federal regulatory orexaminations ~~reputational~~with ~~risks~~no adverse findings attributable to our program.

~~The~~Competitive ~~FinCEN~~Barriers ~~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.Entry

~~Key~~The regulatory ~~challenges~~environment ~~include~~has created both a barrier and an opportunity. While some fintech companies have attempted to enter this space because these companies benefit from less restrictive regulatory requirements than chartered institutions, ~~but~~sustainable ~~are~~cannabis ~~not~~fintech models require deep regulatory expertise, robust BSA programs, and reliable financial institution partnerships. We believe competition remains limited ~~to:~~for these reasons and that our established platform, proprietary technology, and compliance track record provide a durable competitive advantage.

●We expect ~~Conflict~~most ~~Between~~large ~~Federal~~financial ~~and~~institutions ~~State~~to ~~Law.~~remain ~~Cannabis~~on ~~is classified as a Schedule I substance under~~ the ~~CSA.~~sidelines ~~This~~until ~~creates the possibility of~~ federal ~~enforcement~~legalization ~~actions~~occurs, and ~~asset seizures,~~ even ~~for state-legal operators~~then, ~~and~~the ~~raises reputational and compliance risks for financial institutions. ● Uncertain Federal Guidance. The 2013 Cole Memorandum, which deprioritized federal prosecution of state-legal~~ cannabis ~~activity,~~sector will ~~was~~require ~~rescinded~~specialized ~~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~~expertise ~~the~~that ~~BSA.~~takes ~~However,~~years ~~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~~build. ~~Serving~~We ~~CRBs~~also ~~adds~~anticipate ~~complexity~~that ~~because~~regulatory ~~many~~requirements ~~businesses~~applicable 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 fintechs ~~institutional~~will ~~reluctance~~increase toover ~~serve CRBs. ● Regulatory Uncertainty. Ongoing divergence between federal and state law~~time, ~~combined~~further ~~with~~reinforcing the ~~absence~~value of aour ~~federal safe harbor~~established, ~~has left most financial institutions unwilling to develop in~~compliance-~~house~~tested ~~cannabis banking programs~~program. ~~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,~~business ~~such~~is ascurrently ~~merchant~~concentrated ~~processing, custodial relationships, insurance products, broker/dealer services, payment processing services and investment services, although~~ in ~~each~~two ~~case~~significant ~~these services would be provided by a third party holding necessary licenses.~~ways:

~~Lending Activities~~● Financial Institution Partner Concentration. Substantially all of the Company’s revenue is derived from services provided to PCCU under Second Amended CAA. For the years ended December 31, 2025, and December 31, 2024, revenue generated under then-in-effect version of the CAA approximated 86.7% and 83.5% of the Company’s total revenue, respectively. PCCU is also a significant related party. In addition, the Company receives revenue from merchant services, which is a shared fee for the use of automated teller machines. Merchant service revenue for the years ended December 31, 2025 and December 31, 2024, was approximately 9.7% and 8.6%, respectively. As of the date of this filing, PCCU holds approximately 25% of the Company’s Common Stock. PCCU also holds approximately 43% of Series B Preferred Stock and Series B Warrants combined, and is the largest holder of those securities. In the aggregate, PCCU’s holdings represent substantial actual and potential ownership of the Company on a fully diluted basis. PCCU also holds substantially all of the cash deposits of CRBs onboarded through the Company’s platform. The loss of, or a material adverse change to, the Company’s relationship with PCCU would have a material adverse impact on the Company’s results of operations and financial condition. The Company is actively working to expand its financial institution partner base to reduce this revenue concentration over time. The Company has other sources of revenue, such as merchant services. During the year ended December 31, 2025, one financial institution terminated its relationship with the Company.

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.45

●

CRB Deposit Concentration. The Company does not directly hold CRB deposit accounts. All deposit accounts are maintained at PCCU or other financial institutions, and all fund transmissions are handled directly by those institutions. The Company’s fee income from onboarded deposits is well-diversified at the individual CRB level. No one CRB account for the year ended December 31, 2025 represented more than 10% of total fee income from onboarded deposits. The Company monitors account retention as a key indicator of its ability to efficiently and compliantly onboard, validate, and monitor CRB accounts.

Loans Receivables

The Company does not originate or hold loans on its own balance sheet in the ordinary course of business. Loans to CRBs are originated and funded by PCCU pursuant to the Second Amended CAA. The Company’s role is to identify and underwrite loans on PCCU’s behalf, earning a share of loan program income. See “––Overview––Our Relationship with PCCU.”

During the year ended December 31, 2025, the Company’s sole loan receivable, which had a carrying value of approximately $0.4 million as of December 31, 2024, was sold, generating proceeds of approximately $0.4 million. As a result, the Company had no loans on its consolidated balance sheet as of December 31, 2025.

Employees

As of ~~October~~December 1631, 2025, we had ~~thirty-five~~39 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. Approximately 70% of our workforce is based in Colorado, with approximately 8% in Arkansas, and the remainder distributed across six additional states. The Company utilizes a remote-capable workforce model that supports client relationship management across the 41 states and territories in which we operate.

Human Capital Management

Our human capital ~~objectives~~strategy ~~include~~reflects ~~attracting,~~the ~~retaining,~~specialized nature of our business. Serving the cannabis industry at the intersection of financial services and ~~developing~~regulatory compliance requires employees with expertise inthat ~~financial~~is ~~services,~~difficult ~~compliance,~~to recruit and ~~technology,~~ ~~which~~takes ~~are~~significant ~~critical~~time to ~~serving~~develop. Cannabis ~~our~~industry ~~financial~~knowledge ~~institution~~cannot ~~customers~~be ~~and~~easily ~~CRBs~~trained, inas, aalthough ~~highly~~compliance ~~regulated~~and ~~environment.~~financial Weservices ~~seek~~skills tocan be taught, deep operational ~~achieve~~understanding ~~these~~of ~~objectives~~the ~~through~~cannabis ~~programs~~sector ~~focused~~must ~~on:~~be cultivated over time. Retaining experienced employees is therefore a direct operational priority.

●Our human ~~Compensation~~capital ~~and~~management ~~Benefits.~~focuses 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,~~the ~~integrity,~~following ~~and customer focus, with an emphasis on regulatory compliance and sound risk management.~~areas:

● Talent Acquisition and Retention. We ~~believe~~ recruit for specialized roles spanning cannabis compliance, banking operations, relationship management, and information technology. Our talent acquisition efforts are concentrated in sales, business development, and client-facing roles that ~~maintaining~~directly adrive ~~workforce~~revenue. ~~with~~We ~~the~~offer ~~appropriate~~competitive ~~skills~~base compensation, ~~regulatory~~performance-based ~~experience~~incentive programs, and ~~cultural~~equity ~~alignment~~participation through the Plan, which is ~~essential~~intended to ~~our~~align ~~ability~~ employee interests with long-term shareholder value creation. ● Performance Management. The Company is transitioning to ~~execute~~a ~~our~~performance-based ~~business~~compensation ~~strategy~~framework that ties cash bonuses and equity grants to ~~support~~defined, ~~the~~measurable outcomes including revenue growth, client acquisition, and operational efficiency. Performance evaluations are conducted quarterly and annually and serve as the basis for compensation decisions and career development planning. ● Learning and Development. All employees receive ongoing compliance training aligned with BSA/AML requirements and the 2014 FinCEN guidance. New employees complete industry-specific onboarding covering cannabis banking compliance and the Company’s Code of Business Conduct and Ethics, which is available on our ~~platform~~website at www.shfinancial.org. We supplement internal training with cannabis industry conferences and continuing education programs.

	●	*Technology and Productivity.* We are actively investing in artificial intelligence-enabled compliance management and customer relationship management tools designed to automate routine tasks and increase individual employee output. This allows our team to focus on higher-value client-facing activities as we grow, without a proportional increase in headcount.

	●	*Compensation and Benefits.* We offer a competitive total rewards package including comprehensive medical, dental, and vision coverage, with the Company contributing to employee premiums on a tenure-based scale and funding a portion of employee Health Savings Accounts monthly. Effective in 2025, the Company transitioned to an unlimited paid time off policy, which provides employees with flexibility to manage their personal and professional needs without a fixed accrual cap. The Company offers a 401(k) retirement plan to all eligible employees. The employer matching contribution was suspended in 2024 and discontinued in 2025. The Company intends to reassess the matching contribution as its financial position improves.

Recent Developments

Product Developments

In April 2026, the Company announced the launch of the Safe Harbor Retirement Plan, a pooled employer 401(k) plan designed specifically for state-legal cannabis businesses and the companies that serve them, as well as an expansion in the financing solutions we offer to CRBs. These solutions are designed to meet the operational and growth needs of CRBs.

Nasdaq Letter

Board of Directors

On April 20, 2026, Sundie Seefried tendered her resignation as a member of on our Board. Ms. Seefried’s departure was not the result of any disagreement with the Company on any matter relating to its operations, policies or practices.

On April 22, 2026, the Board appointed each of Sean Tonner and Tyler Klimas as directors, effective immediately, and the Board also approved an increase in the number of directorships on the Board from five to six.

Emerging Markets

In March 2026, we announced that emerging U.S. market average deposit balances increased 29% over the twelve months ended February 4, 2026, driving total average deposit balances up 4.5%, and that emerging U.S. markets represented 31% of the Company’s average deposit balances at the time of the announcement.

420 IT Solutions Acquisition

On December 19, 2025, Safe Harbor Managed Services LLC, a wholly-owned subsidiary of the Company, completed the acquisition of substantially all of the assets of 420 IT Solutions. 420 IT Solutions is engaged in the business of providing third-party professional advisory and technology services to the cannabis industry. The aggregate purchase price for the acquired assets consisted of 125,000 Earnout Shares, plus the assumption of certain identified liabilities under contracts assigned to the Company. The acquisition included the transfer of customer contracts, the registered trademark “420 IT Solutions”, domain name registrations, and other intellectual property. No cash consideration was paid at closing. In connection with the acquisition, 420 IT Solutions’ founders joined the Company to lead the third-party professional advisory and technology services division. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Acquisition of 420 IT Solutions.”

Second Amended CAA

During the fourth quarter of 2025, SHF LLC, a wholly-owned subsidiary of the Company, and PCCU reached agreement on the material economic terms of the Second Amended CAA on or about October 1, 2025, following completion of the September 2025 Recapitalization. The written agreement was formally executed on February 4, 2026; the intervening period involved only procedural and documentation matters that did not affect the substance of the agreed terms. Accordingly, the Company has given effect to the Second Amended CAA from October 1, 2025, consistent with ASC 606 contract modification guidance. Under the Second Amended CAA, we receive up to 65% of loan program income generated by PCCU’s CRB loan portfolio, an increase from the approximately 35% share in effect under the First Amended CAA. In exchange, we are obligated to indemnify PCCU for up to 65% of net losses on any loan default covered by the Second Amended CAA. See “Risk Factors––Risks Related to the Second Amended CAA” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Relationship with PCCU.”

September 2025 Recapitalization

On August 27, 2025, the Company issued the Notes to certain accredited investors with an aggregate principal amount of $0.6 million, a 20% OID and maturity date of September 9, 2026. The conversion price of the Notes is the lesser of (i) 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 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. On September 9, 2025, the Company issued an additional Note to an accredited investor in the principal amount of $0.1 million on identical terms, bringing the aggregate principal amount to $0.7 million.

On September 17, 2025, we established the ELOC with CREO, which provided we may sell to CREO up to $150 million of Common Stock and granted us and CREO the mutual right to agree to increase this amount to $500 million.

On September 30, 2025, all outstanding Notes were exchanged for an aggregate of 825 shares of the Series B Preferred Stock and Series B Warrants to purchase 53,127 shares of Common Stock. Also on September 30, 2025, the Company entered into Exchange and Cancellation Agreements with each of Midtown, Verdun and Vellar relating to the FPA that the Company initially entered into on June 16, 2022. In exchange for each counterparty irrevocably cancelling, waiving, and terminating all of their rights under the FPA, the Company issued an aggregate of 5,002 shares of Series B Preferred Stock and Series B Warrants to initially purchase 322,111 shares of Common Stock.

The September 2025 Recapitalization eliminated approximately $18 million in debt and raised over $6.7 million in new capital and also resulted in the establishment of the $150 million ELOC that can potentially be expanded to $500 million, thereby meaningfully improving our ability to support our lending commitments and portfolio growth. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Relationship with PCCU” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Years ended December 31, 2025 and 2024––Gain on Extinguishment of Debt.”

Corporate History

WeThe ~~were~~Company was founded in 2015 to address the lack of reliable and compliant financial services available to CRBs in Colorado. At that time, ~~many~~ 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 1526 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.

36Available Information

~~MANAGEMENT’S~~We maintain ~~DISCUSSION~~a ~~AND~~website ~~ANALYSIS~~at OFthe ~~FINANCIAL~~address shfinancial.org. On our website, you can access, free of charge, our Annual Report on Form 10-K, Quarterly ~~CONDITION~~Reports ~~AND~~on ~~RESULTS~~Form OF10-Q, Current Reports on Form 8-K, our annual proxy statement on Schedule 14A, and amendments to those materials filed ~~OPERATIONS~~or ~~FOR~~furnished ~~THE~~pursuant ~~YEARS~~to ~~ENDED~~Sections ~~DECEMBER~~13(a) 31and 15(d) of the Exchange Act. Materials are available online as soon as reasonably practicable after we electronically file such material with, ~~2024~~or ~~AND~~furnish ~~2023~~it to, the SEC. In addition, the SEC maintains a website at the address www.sec.gov that contains the information we file or furnish electronically with the SEC. The information contained on our website or on the SEC’s website is not incorporated by reference in, or considered part of, this prospectus. Our principal executive offices are located at 1526 Cole Boulevard, Suite 250, Golden, Colorado 80401, and our telephone number is (303) 431-3435.

~~References in this section to “we,”~~Emerging ~~“us,”~~Growth ~~“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.

We are an EGC as defined in 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 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, which is December 31, 2026, 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. The Company will cease to be an EGC on December 31, 2026.

Smaller Reporting Company

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 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 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~~The Company was founded in 2015 by PCCU, ~~SHF’s~~and ~~mission~~ is ~~to provide~~headquartered ~~access~~in toGolden, ~~reliable and compliant financial services for the legal cannabis industry~~Colorado. ~~Through~~We ~~that~~operate ~~mission~~a ~~and~~proprietary ascompliance antechnology ~~early leader~~platform ~~with~~that ~~over~~enables ~~ten~~financial ~~years~~institutions ~~of experience, SHF is a leading provider of access~~ to ~~reliable~~provide ~~and compliance driven~~ banking, ~~lending~~ and ~~other~~lending ~~financial~~ services to ~~financial~~CRBs ~~institutions~~operating ~~desiring~~legally tounder ~~provide~~applicable ~~those~~state ~~services to the cannabis industry~~law.

~~Through~~Because cannabis ~~our~~remains ~~proprietary~~a ~~platform~~federally ~~and~~controlled onsubstance aunder ~~multi-state level~~the CSA, ~~SHF~~most ~~provides~~financial ~~access~~institutions have historically been unwilling to serve CRBs, creating significant demand for the ~~following~~compliance ~~banking~~infrastructure ~~related~~and risk management services ~~through~~we ~~PCCU~~provide. We are not a bank or credit union and ~~other~~do not hold customer deposits. Instead, we provide compliance monitoring, onboarding, and reporting services that allow our financial ~~institutions:~~institution clients to accept and maintain CRB deposit accounts in a manner consistent with BSA requirements, FinCEN guidance, and applicable anti-money laundering regulations.

●Through our ~~Business~~financial institution clients, we facilitate access to business checking and savings accounts;, ●cash ~~Cash~~ management, ~~accounts;~~commercial ●lending, remote ~~Savings~~deposit, ~~and~~ACH ~~investment~~payments, ~~options;~~wire ●transfers, ~~Commercial~~and ~~lending;~~courier ~~● Courier~~ services ~~(via~~through third-party relationships);. ●By ~~Remote~~enabling CRBs to deposit ~~services;~~cash receipts ●through ~~ACH~~regulated ~~payments~~financial ~~and~~institutions, ~~origination;~~our platform helps to reduce the safety risks associated with high cash volumes and gives ●CRBs ~~Wire~~access ~~payments~~to financial tools that help them operate more efficiently. In select markets, we also license our Program to other financial institutions, providing them KYC due diligence tools, compliance monitoring, program management support, and regulatory exam assistance.

~~Clients~~We generate ~~and~~revenue ~~all~~primarily ~~transmissions~~through ofthree ~~funds~~streams: toaccount ~~and~~fee ~~from deposit~~income ~~accounts~~based ~~are~~on ~~handled directly by~~ the ~~financial~~number ~~institutions.~~of Inactive anaccounts ~~industry with limited capital~~ and ~~financing~~the ~~options,~~size weof ~~offer~~deposit balances ~~access~~in tosuch accounts, loan ~~options~~program atincome ~~what~~(formerly weloan ~~believe~~interest toincome) beon ~~competitive~~CRBs ~~rates,~~loans ~~often~~we ~~with~~source ~~less~~and ~~punitive~~service ~~terms~~on ~~than~~behalf ~~the~~of ~~current~~our ~~industry average. Our~~ financial institution clients, ~~offer~~and ~~loan~~investment ~~options~~income ~~including~~earned ~~senior~~on ~~secured~~CRB-related ~~debt~~deposits ~~and~~held ~~operating~~at ~~lines~~those ~~of debt~~institutions. ~~Collateral~~Since ~~types include real estate~~2015, ~~equipment,~~the ~~and~~Company ~~other~~has ~~business~~assisted in ~~assets.~~the Weprocessing ~~also~~of ~~provide~~more ~~access~~than to$35.4 ~~lending~~billion ~~options~~in ~~for~~cannabis-related ~~ancillary~~depository ~~service~~funds ~~providers~~and ~~serving~~has ~~the~~supported ~~cannabis industry~~its asfinancial ~~these~~institution ~~businesses~~clients through ~~also~~more ~~can~~than ~~have~~25 ~~difficulty~~state ~~finding~~and ~~reliable~~federal ~~financial~~banking ~~services~~examinations.

~~To ensure access to consistent and dependable banking~~Relationship 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.~~ PCCU

37PCCU is our primary financial institution client and the source of a significant majority of our revenue. This relationship is governed by the Second Amended CAA, which replaced the First Amended CAA as of October 1, 2025.

InThe First ~~strategically~~Amended ~~selected~~CAA ~~geographic~~introduced ~~areas~~several significant changes to the CAA, including (i) the elimination of the Company’s indemnification ~~has~~obligations ~~licensed~~for ~~its~~loan-related ~~proprietary~~losses, ~~software~~(ii) ~~and~~a ~~Safe~~reduction ~~Harbor~~in ~~Program (~~the ~~“Program”)~~Company’s toloan ~~other~~program ~~financial~~income ~~institutions~~share to ~~provide~~approximately ~~compliance-related services~~35% to ~~CRBs.~~reflect the Asincremental ~~part~~risk ofabsorbed by PCCU in connection with the ~~Program,~~elimination weof ~~provide~~our indemnification obligations, (iii) the ~~following~~replacement toof a ~~financial~~multiple ~~institutions~~per-account ~~interested~~fee instructure ~~licensing~~with ~~the~~a ~~Program~~single asset hosting fee equal to ~~assist~~1.00% of average daily CRB deposit balances that increased to 1.30% in ~~compliant~~the ~~cannabis~~event ~~banking:~~balances exceeded $130 million, and (iv) us receiving 100% of investment income on CRB deposits.

~~● Initial customer due diligence – Know Your Customer; ● Customer application management; ● Program management support; ● Compliance monitoring; and ● Regulatory exam assistance.~~50

The Second Amended CAA fundamentally restructured the economics of the PCCU relationship. The primary changes were that (i) the Company’s share of loan program income increased from approximately 35% up to 65%, reflecting the completion the September 2025 Recapitalization; (ii) the Company now receives up to 65% of loan program income generated by PCCU’s CRB loan portfolio in exchange for being obligated to indemnify PCCU for up to 65% of net losses of a default on any loan covered by the Second Amended CAA, with no contractual cap on total exposure; and (iii) the asset hosting fee structure transitioned from a flat rate to a tiered marginal rate schedule based on average daily deposit balances, with rates ranging from 0.50% on the first $25 million to 1.25% on balances above $125 million, resulting in estimated annual savings of approximately $0.3 million compared to the rates contained in the First Amended CAA. See “Business––Recent Developments––September 2025 Recapitalization.”

The concentration of our business with PCCU and the re-assumption of the indemnification obligation each represent material risks to the Company. Any loss of or material adverse change to the PCCU relationship, or any significant loan defaults in the CRB portfolio for which we are required to fund indemnification payments, could have a material adverse impact on our liquidity, financial condition, and results of operations. See “Risk Factors–– Risks Related to the Second Amended CAA” and “Certain Relationships and Related Party Transactions––Related Party Transactions” for further detail.

Year Ended December 31, 2025 Performance Summary

Total revenue for the year ended December 31, 2025 was $7.7 million, a decrease of approximately 49.7% compared to $15.2 million for the year ended December 31, 2024. The decline was primarily driven by a 63% reduction in loan program income resulting from revised interest allocation provisions under the First Amended CAA. This decrease was partially offset by approximately $0.4 million in incremental loan program income recognized following the execution of the Second Amended CAA, which had a retroactive effective date of October 1, 2025. Investment income also decreased by 45%, reflecting declining balances, lower prevailing interest rates that ranged from 3.65% to 4.40% in 2025 versus 4.40% to 5.40% in 2024 and the implementation of an interest-bearing deposit program for customers. Additionally, account fee income declined by 39%, which was attributable to a reduction in the number of active accounts following the conclusion of our relationship with Five Star Bank, as well as lower fees associated with merchant services.

Total operating expenses decreased by $9.3 million, or 42%, to $13.1 million for the year ended 2025, compared to $22.3 million in fiscal year 2024, due to the absence of $9.1 million in goodwill and intangible asset impairment charges recorded in 2024 and from ongoing cost reduction actions including workforce restructuring and reduced overhead. The Company reported a net loss of $2.2 million for the year ended December 31, 2025, compared to net loss of $48.3 million in year 2024. The net loss in 2024 was significantly influenced by a large, non-recurring deferred tax asset valuation adjustment of $43.9 million. Excluding that item, the underlying operating performance declined year-over-year consistent with the revenue trends described above.

Material Weaknesses in Internal Controls

Management identified material weaknesses in the Company’s internal control over financial reporting as of December 31, 2024. These weaknesses primarily related to the Company’s application of U.S. generally accepted accounting principles (“GAAP”) to complex transactions, including revenue recognition, accounting for financial instruments, forward purchase arrangements, and stock-based compensation, as well as deficiencies in the going concern evaluation process and information technology access controls. The Company has implemented a remediation plan, including hiring new senior financial leadership with public company experience, engaging external technical accounting advisors, implementing enhanced financial statement review procedures, and upgrading IT access controls.

As of December 31, 2025, management believes these remediation actions have addressed all previously identified material weaknesses; however, a material weakness was identified during the fourth quarter of 2025 related to the Company’s loan documentation and credit loss estimation process.

Additionally, while the material weakness related to the completeness and accuracy of account activity fee income has been remediated, sufficient time has not elapsed to conclude that the related controls are operating effectively. See “Internal Control Over Financial Reporting” below for further discussion.

Industry and Regulatory Environment

Non-medicinal cannabis remains a Schedule I controlled substance under federal law, which creates ongoing legal and compliance risks for us and for the financial institutions we serve. Proposed federal legislation, including the SAFER Banking Act, could expand the availability of banking services to CRBs and increase competition in our market. Conversely, changes in federal or state enforcement priorities could adversely affect our clients and, in turn, our business. We monitor legislative and regulatory developments closely, as they are a primary driver of both the demand for, and the risks associated with, our services. See “Business––Industry Overview” for further discussion of the current and evolving industry and regulatory landscape.

Key Metrics

In addition to the measures presented in our consolidated financial statements, ~~our~~ management regularly monitors certain ~~measures~~operational inand ~~the~~non-GAAP financial ~~operation~~measures ofto ~~our~~evaluate business performance. These ~~key~~ metrics are ~~discussed~~ described below.

Non-GAAP Financial Measures

In addition to financial measures ~~presented~~prepared in accordance with ~~accounting~~GAAP, ~~principles~~this ~~generally~~this ~~accepted~~prospectus inand the ~~United~~information ~~States~~incorporated ofherein ~~America (“GAAP”), this document contains~~ contain non-GAAP financial measures ~~where~~that management believes itare touseful ~~be helpful~~ in understanding our results of operations orand financial position. ~~Where~~For each non-GAAP ~~financial measures~~measure ~~are used~~presented, ~~the~~we ~~comparable~~have ~~GAAP~~provided ~~financial~~a ~~measure, as well as the~~ reconciliation to the most directly comparable GAAP financial measure~~, can be found herein~~.

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

To“EBITDA” is ~~provide~~defined ~~investors~~as ~~with~~net ~~additional~~income ~~information~~(loss) ~~regarding our~~before ~~financial~~interest ~~results~~expense, weincome ~~have~~tax ~~disclosed~~expense ~~EBITDA and Adjusted EBITDA~~(benefit), ~~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~~ “Adjusted EBITDA” ~~and~~is further adjusted to exclude non-cash, unusual , and~~/or~~ infrequent ~~costs~~items inthat ~~the~~management ~~case~~does ofnot ~~Adjusted~~consider ~~EBITDA.~~reflective ~~Below we have provided a reconciliation~~ of ~~net loss (~~ the ~~most~~Company’s ~~directly~~core ~~comparable GAAP~~operating ~~financial measure) to EBITDA and from EBITDA to Adjusted EBITDA~~performance.

We present EBITDA and Adjusted EBITDA because ~~these metrics~~management ~~are~~uses athese ~~key~~measures ~~measure used by our management~~ to evaluate ~~our~~ operating performance, ~~generate~~develop ~~future~~ forward-looking operating plans, and make strategic decisions regarding ~~the~~resource allocation ~~of investment capacity~~. ~~Accordingly,~~We we believe ~~that~~these ~~EBITDA~~measures ~~and Adjusted EBITDA~~ provide useful supplemental information to investors ~~and others in understanding and~~ evaluating our ~~operating~~ results in the same manner as ~~our~~ management.

~~EBITDA~~These measures ~~and Adjusted EBITDA~~ have material limitations as an analytical ~~tool,~~tools and it should not be considered in isolation or as a substitute for analysis of our GAAP results. asSpecifically, ~~reported~~although ~~under~~depreciation ~~GAAP~~and amortization are non-cash charges, the underlying assets may require future replacement and neither EBITDA nor Adjusted EBITDA reflects the associated capital expenditure requirements. ~~Some~~In addition, neither measure reflects ofchanges in working capital needs or tax payments that may reduce cash available to the Company. Accordingly, these ~~limitations~~measures ~~are~~should asbe considered ~~follows:~~alongside net income (loss) and other GAAP results.

●A reconciliation ~~although~~of ~~depreciation~~net ~~and~~(loss) ~~amortization~~income ~~are non-cash charges, the assets being depreciated and amortized may have~~ to ~~be replaced in the future, and both~~ EBITDA and Adjusted EBITDA dois ~~not~~as 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.follows:

Year ended December 31,	2025			2024
Net loss	$	(2,160,998	)	$	(48,319,475	)
Interest expense		492,643			533,390
Amortization of prepaid consulting associated with Series B		59,857			-
Amortization of contract asset		129,072			-
Depreciation and amortization expense		3,155			711,929
Provision for income taxes (benefit)		(58,470	)		43,859,686
EBITDA		(1,534,741	)		(3,214,470	)
Other adjustments:
Credit loss (benefit) expense		(177,917	)		(1,393,131	)
Change in the fair value of warrants		(1,320,871	)		(2,803,640	)
Deferred loan origination fees and costs		-			(63,275	)
Change in the fair value of deferred consideration		(79,475	)		(361,449	)
Gain on extinguishment of forward purchase derivative		(3,336,213	)		-
Costs incurred to secure financing		987,621			-
Discount on common stock sold pursuant to the ELOC		76,553			-
Stock based compensation		1,523,489			1,575,952
Goodwill and long-lived intangible assets impairment		-			9,148,881
Adjusted EBITDA	$	(3,861,554	)	$	2,888,868

~~Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.~~52

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

	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 ended December 31, 2025, EBITDA was $(1.5) million, compared to $(3.2) million for the year ended December 31, 2024. Adjusted EBITDA was $(3.9) million and $2.9 million for the years ended December 31, 2025 and December 31, 2024, respectively, a decline of $6.7 million. The decline was driven by three primary factors, each of which is directly connected to structural changes in the Company’s revenue arrangements and market conditions, rather than deterioration in the underlying business operations of the Company.

~~For the year ending December 31, 2024, our adjusted~~The ~~EBITDA~~most ~~declined~~significant ~~primarily~~factor ~~due~~was ~~to a decrease in account fee income resulting from a reduction in~~ the ~~number~~First ofAmended 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~~made ~~subsequently~~two ~~amended~~economically ~~and~~material ~~restated, effective~~changes ~~December 31, 2024,~~ to ~~eliminate~~ the Company’s ~~indemnification liability. Deferred loan origination fees and costs represent~~revenue 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.model:

	●	First, it reduced the Company’s share of loan program income from substantially all of the interest earned on the CRB loan portfolio to approximately 35%, with PCCU retaining the remainder to compensate for their absorption of the credit risk that the Company had previously indemnified them against. This structural reduction in loan program income accounted for the majority of the year-over-year revenue decline.

	●	Second, the First Amended CAA replaced the prior per-account fee structure with an asset hosting fee equal to 1.00% of average daily CRB deposit balances, which resulted in higher hosting costs relative to the prior structure. Together, these two changes under the First Amended CAA represented the primary explanation for the decline in Adjusted EBITDA and should be understood as a deliberate restructuring of the economic relationship with PCCU rather than an operational shortfall. The revenue impact of these reductions was partially offset in the fourth quarter of 2025 by the Second Amended CAA, which increased the Company’s share of loan program income from approximately 35% up to 65% and has been recognized as a Type 1 subsequent event under ASC 855.

The second factor was a decline in investment income. The Federal Reserve reduced its IORB rate multiple times during 2024 and 2025, from 5.40% at the start of 2024 to 3.65% by the end of 2025. Because the Company’s investment income is directly tied to the IORB rate applied to CRB deposit balances held at PCCU, these rate reductions directly generated lower investment income. This decline was compounded by the full-year impact in 2025 of the Company’s money market account program, introduced in 2024, under which the Company effectively shares a portion of the IORB rate with CRB clients. Although this arrangement improved client retention and deposit growth, it did further reduce the Company’s net investment margin.

The third factor was a reduction in account fee income primarily driven by a decline in the weighted average fee per account during the year. This decline was driven by a shift in the client portfolio to newer accounts that generate fees at a lower rate given either lower initial balances, or large balances across multiple accounts.

Management has identified three primary causes that it believes elevated attrition in 2025:

	1)	A portion of the attrition reflected industry-level dynamics, including consolidation among cannabis operators and business closures driven by ongoing market pressures in certain state markets, all of which are outside of the Company’s control.

	2)	Competitive pricing pressure from other cannabis banking providers.

	3)	More stringent loan underwriting and approval standards, including enhanced collateral requirements and longer processing timelines through PCCU’s loan committee, were implemented by PCCU. These changes reduced the Company’s ability to offer CRB clients competitive lending terms and timely access to credit, both of which are key factors in client retention and acquisition. The resulting decline in loan origination activity contributed to elevated client attrition during this period. The Second Amended CAA increased the Company’s loan program income share to up to 65%, which management believes will support improved loan production and client retention going forward.

EBITDA was also impacted by approximately $0.5 million in lost income from a strategic merchant services partner that renegotiated its revenue-sharing arrangement such that it resulted in less favorable terms for the Company in 2025. This is a discrete, identifiable reduction that management does not expect to recur at the same magnitude going forward.

Management’s focus for 2026 is on improving client retention through the Company’s expanding lending capability, enhanced client service technology, and continued new account development driven by new marketing and customer acquisition processes.

The significant non-cash and non-recurring items excluded from Adjusted EBITDA in 2025 include a $3.3 million gain on extinguishment of the FPA, a $1.0 million charge for costs incurred in connection with the September 2025 Recapitalization, a $1.5 million non-cash stock-based compensation charge, and a $1.3 million non-cash gain from the change in fair value of warrant and forward purchase derivative liabilities.

For the year ended December 31, 2024, GAAP net loss figure of $48.3 million in the reconciliation above reflects the impact of significant non-recurring items, including a large deferred tax valuation recognition and subsequent write-off. Management believes that for the year ended December 31, 2024 Adjusted EBITDA of $2.9 million is the more relevant basis for comparison, as it reflects the operating performance of the business under the CAA structure before the entrance into the First Amended CAA.

Other Metrics

~~For~~Management monitors ~~our~~the ~~business~~following ~~operations,~~operational wemetrics ~~monitor~~to assess the ~~following key~~health ~~metrics:~~and trajectory of the core banking services business.

Total account balances, number of accounts and average account balances

Our ability to ~~originate~~generate ~~loans~~account ~~for~~fee ~~PCCU~~income isand ~~dependent on~~investment ~~the~~income ~~size~~is ofdirectly ~~our~~tied ~~managed~~to ~~deposit~~the ~~base and~~ number of active CRB accounts. Inwe ~~addition,~~manage ~~fees~~and ~~are~~the total ~~generated~~deposit ~~based~~balances onmaintained ~~open~~at ~~accounts~~our ~~and~~financial ~~account activity~~institution clients. We monitor account activity including daily deposits, withdrawals , and ending ~~account~~balances ~~balance~~on ~~daily~~an ongoing basis. ~~Total~~Average account balances represent the average aggregate ending balance of onboarded and monitored CRB deposits onheld ~~hand~~ at financial institution clients atover ~~period~~the ~~end~~revenue generating period. Average account balance ~~represents the~~is total account ~~balance~~ balances divided by total active accounts at period end. Trailing 14-day average balances represent the ~~number~~aggregate ending balance of ~~accounts~~onboarded and monitored CRB deposits held at financial institution clients over the 14 calendar days at the period end and represent a period end balance that smooths our clients’ two-week payroll cycles.

39Account Fees per Average Active Account

~~Account~~Our fee income is generated from active accounts and account-level transaction activity. We track account openings and closings on a daily, weekly, and monthly basis and monitor account fees per average active ~~accounts~~account ~~managed~~as an indicator of pricing efficiency and revenue quality.

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,		2025		2024		Change			Change (%)
Average deposit balance	(1)	$	105,215,252	$	117,847,512	$	(12,632,260	)		(10.7	)%
Trailing 14 day average account balance	(2)	$	106,800,196	$	113,008,693	$	(6,208,496	)		(5.5	)%
Account fees	(3)	$	2,741,124	$	5,073,186	$	(2,332,062	)		(46.0	)%
Average active accounts	(4)		773		757		16			2.1	%
Average account balance	(5)	$	136,094	$	155,728	$	(19,634	)		(12.6	)%
Average fees per account	(6)	$	3,546	$	6,704	$	(3,158	)		(47.1	)%

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)

For the year ended December 31, 2025, represents the average deposit balance over the year; For the year ended December 31, 2024 represents the average of monthly ending account balances. This represents the average balance for the relevant revenue generating period.

	(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.

	(2)	Represents the average balance for the 14 calendar days ending on December 31, which represents a period end balance that smooths our clients’ two-week payroll cycles.
	(3)	Reported account activity fee revenue
	(4)	Represents the average of monthly ending active accounts
	(5)	Refer to the below section – Discussion of Results of our Operations for additional discussion of trends.

WeAverage active ~~are~~accounts ~~focused~~increased onby ~~expanding~~16, ~~and~~or ~~enhancing~~2.1%, ~~our~~in ~~lending platform.~~2025, Asand ~~this~~the ~~part~~accounts oflost ~~our~~carried ~~business~~higher ~~scales,~~average webalances ~~will~~than ~~track~~the ~~key~~accounts ~~metrics~~won, ~~such~~resulting in asa decline in average ~~loan~~account balance, ~~average~~and ~~repayment~~a ~~term,~~net ~~effective interest~~decline ~~rate,~~in ~~loan~~account ~~status,~~fee ~~and~~revenue ~~other~~despite ~~relevant~~positive ~~indicators,~~account togrowth. ~~measure~~Management’s primary ~~growth~~retention and ~~performance~~growth initiatives for 2026 are described above.

Components of our Results of Operations

Revenue

The Company generates ~~interest~~revenue ~~and~~through ~~fee~~three ~~income~~primary ~~through providing~~streams. aAccount ~~variety~~fee income consists of ~~services~~fees charged to ~~our~~ financial ~~institutions~~institution toclients based ~~facilitate~~on ~~its~~the ~~banking~~number ~~services~~of toactive ~~CRBs~~CRB ~~including~~accounts managed, ~~among~~account-level ~~other~~transaction ~~things~~activity, and deposit balances. These fees compensate the Company for providing BSA compliance monitoring, onboarding, account management, and ~~other~~related regulatory ~~compliance~~reporting services. Loan program income represents the Company’s contractual share of interest earned on CRB loans originated and ~~reporting,~~serviced ~~onboarding,~~by ~~responding~~the toCompany ~~account~~on ~~inquiries~~behalf of its financial institution clients, ~~responding~~primarily toPCCU. ~~client~~The ~~service~~Company’s ~~inquiries~~share of loan program income is currently determined in accordance ~~relating~~with tothe Second Amended CAA. Investment income represents interest earned on CRB deposit ~~accounts~~balances held at financial institution ~~customers,~~ clients and ~~sourcing~~is ~~and~~based ~~originating~~on ~~loans~~the prevailing market rates applied to those balances. In addition, the Company ~~provides~~ ~~these~~earns ~~similar~~fees ~~services~~from ~~and~~licensing ~~outsourced~~its ~~support~~proprietary Program to other financial institutions ~~providing~~and ~~banking~~from ancillary services provided to businesses serving the cannabis industry.

Operating Expenses

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

● Compensation and employee benefits consist of employee wages ~~and~~, ~~associated~~payroll taxes, employee benefits, ~~while~~and ~~professional~~non-cash stock-based compensation. Stock-based compensation has increasingly been used as a component of total compensation to preserve cash and align employee and consultant incentives with the performance of the Common Stock. ● Professional services consist of legal fees, audit and accounting fees, general consulting fees, and ~~accounting~~Board-related fees. Legal fees include both ongoing corporate legal services and costs associated with the Company’s active litigation matters. Professional services expenses increased materially in 2025 primarily due to legal fees associated with the Abaca litigation described in “––Litigation” below, as well as costs incurred in connection with the September 2025 Recapitalization. ● General and administrative expenses include the asset hosting fee paid to PCCU under the First Amended CAA or the Second Amended CAA, as applicable, investment hosting fees, bank sharing fees paid to financial institution clients, insurance, advertising and marketing, travel and entertainment, and other office and operating expenses. The asset hosting fee represents consideration paid to PCCU for access to its banking platform, regulated deposit infrastructure, and bank charter and is the largest component of general and administrative expenses. See “Certain Relationships and Related Party Transactions––Related Party Transactions” and “––Related Party Relationships.” ● Rent expense reflects the cost of the Company’s corporate office. The Company closed its Arkansas office during 2025, thereby reducing its ongoing rent obligations.

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, 2024.55

~~Other~~● ~~general~~Provision ~~and~~(benefit) ~~administrative~~for ~~expenses~~credit ~~consist~~ losses reflects the Company’s estimated losses on loans it is obligated to indemnify. Under the Second Amended CAA, we receive up to 65% of ~~various~~loan ~~miscellaneous~~program ~~items~~income ~~including~~generated ~~account~~by ~~hosting~~PCCU’s CRB loan portfolio. In exchange, we are obligated to indemnify PCCU for up to 65% of net losses of a default on any loan covered by the Second Amended CAA. This obligation has no maximum dollar limit and covers principal, accrued interest, fees, ~~insurance~~legal ~~expense~~costs, ~~advertising~~collection costs, and ~~marketing~~collateral disposition costs, ~~travel~~net ~~meals~~of any recoveries. Because the Company and ~~entertainment~~ PCCU reached agreement on the material economic terms of the Second Amended CAA on or about October 1, 2025, and ~~other~~the ~~office~~written agreement was formally executed on February 4, 2026, with the intervening period involving only procedural and ~~operating~~documentation ~~expense~~matters, the Company has given effect to the Second Amended CAA from October 1, 2025 in accordance with ASC 606-10-25-10 through 25-13. Accordingly, its financial statement impact is reflected in the Company’s consolidated financial statements for the year ended December 31, 2025. See “Certain Relationships and Related Party Transactions––Related Party Transaction and “––Related Party Relationships” for further detail.

Discussion of our Results of Operations —~~2024~~ 2025 Compared to ~~2023~~2024 (Year Ended December 31)

Revenue

Year Ended December 31,	~~2024~~2025		~~2023~~2024		Change ($)			Change (%)
Account fee income	$	63,~~447~~963,~~201~~097	$	86,~~614~~447,~~945~~201	$	(2,~~167~~484,~~744~~104	)		(2538.165	)%
Safe Harbor Program income		76,920		~~130~~76,~~688~~920		~~(53,768~~-	)		~~(41.14~~-	)%
Investment income		21,~~092~~155,~~863~~433		52,~~844~~092,~~836~~863		(3937,~~751,973~~430	)		(6444.198	)%
Loan interest income		6,625,576		2,972,434		3,653,142			122.90	%
Loan program income		2,478,082		6,625,576		(4,147,494	)		(62.6	)%
Total Revenue	$	15,242,560	$	17,562,903	$	(2,320,343	)		(13.21	)%
Total revenue	$	7,673,532	$	15,242,560	$	(7,569,028	)		(49.7	)%

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~~Account fee ~~reconciliation~~income ofdecreased ~~account~~by ~~fee~~$2.5 ~~income~~million, ~~and~~or ~~account~~38.5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The ~~hosting~~decline ~~fees~~was ~~are~~driven asby ~~follows:~~following factors.

~~Account~~● During 2025 the Company had limited lending capacity available through PCCU under the First Amended CAA. Access to loans is a meaningful factor in client retention, and this constraint directly contributed to client attrition during the affected period. This attrition was further compounded by broader cannabis industry pressures, including operator consolidation and business closures in certain state markets, which resulted in additional account losses that were partially offset by 227 new account openings during the year. In aggregate, client attrition and the reduction in average fees collected from PCCU-hosted clients accounted for approximately $1.4 million of the year-over-year decline. ● The termination of the Company’s banking relationship with Five Star Bank in the fourth quarter of 2024. This reduced fee income: by approximately $0.5 million during 2025. ● A strategic merchant services partner renegotiated its revenue-sharing arrangement on less favorable terms during 2025, reducing account fee income by approximately $0.5 million compared to the prior year.

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

WeInvestment income ~~have~~represents ~~agreements~~interest ~~with~~earned ~~PCCU~~on ~~and~~net ~~Five~~investable ~~Star~~CRB ~~Bank,~~deposit ~~where~~ balances held at our partner financial ~~institution~~institutions. ~~clients~~The ~~pay~~rate usof ~~interest~~ return on ~~daily~~these ~~account~~ balances asis ~~per~~directly benchmarked to the ~~rates~~IORB ~~outlined~~rate inpublished by the Federal Reserve Bank of Kansas City. Under our agreements, investment income is calculated daily on net investable CRB deposit balances and paid to the Company monthly in arrears.

~~Until March 29, 2023, we operated under a Loan Servicing~~For ~~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~~2025, total investment income ~~associated~~was ~~with PCCU totaled~~ $1~~,903,422,~~.2 ~~with the Company incurring $457~~million,~~105~~ incompared ~~investment~~to ~~hosting fees~~$2.1 Inmillion ~~comparison,~~ for the year ended December 31, ~~2023~~ 2024, ~~PCCU’s~~a ~~contribution~~decrease toof ~~investment income was~~ $~~5,803,114,~~0.9 ~~resulting in $1~~million,~~445,517~~ inor ~~investment hosting fees~~44.8%. ~~These~~The ~~expenses~~year-over-year ~~were~~decline ~~recorded~~was ~~under~~primarily ~~“General~~driven ~~and~~by ~~Administrative~~four ~~Expenses” in the Consolidated Statements of Operations in our financial statements.~~factors:

1) Decline in IORB rates. The ~~Amended~~IORB ~~CAA~~rate ~~eliminates~~at the beginning of 2025 was 4.40%, which already reflected three rate reductions totaling 100 basis points that were enacted by the Federal Reserve in the second half of 2024. During 2025, the Federal Reserve further reduced the IORB rate by 25 basis points effective September 2025, and by an additional 25 basis points effective December 2025, which brought the IORB rate to 3.65% ~~investment~~at ~~hosting fees~~year-end. ~~Under~~In total, the ~~Amended~~IORB ~~CAA~~rate declined by 75 basis points during the 2025 fiscal year, compressing the ~~Company~~yield isearned ~~entitled~~on tonet ~~receive~~investable ~~100%~~CRB ofdeposit balances throughout the year and directly reducing investment income. ~~For~~relative ~~additional~~to ~~details~~2024, ~~please~~when ~~refer~~the ~~to “Business––Amended~~IORB ~~and~~rate ~~Restated~~averaged ~~CAA~~approximately ~~with~~5.10% ~~PCCU~~across the full year.”

~~Loan interest income~~56

~~For~~2) ~~the~~Launch ~~year~~of ~~ended~~interest-bearing ~~December~~money ~~31,~~market ~~2024,~~accounts. In the ~~Company serviced~~first ~~twenty-four~~quarter ~~loans~~of 2025, ~~compared~~the toCompany ~~twelve~~launched ~~loans~~interest-bearing inmoney ~~the~~market ~~year~~accounts ~~ended~~for ~~December~~CRB ~~31, 2023~~clients. InWhile ~~2024,~~this product enhances the Company’s ~~recognized~~competitive $6deposit offerings,~~254,175~~ balances held in ~~loan~~ money market accounts generate interest income ~~attributable~~that is credited directly to ~~PCCU~~clients ~~activities.~~rather ~~Related~~than ~~expenses~~recognized ~~for~~as ~~this~~investment income ~~included~~by ~~$143~~the Company,~~217~~ inwhich ~~loan~~reduced ~~servicing~~the ~~fees,~~net ininvestable ~~compliance with~~deposit ~~both~~base upon which the ~~Loan~~Company ~~Servicing~~earns ~~Agreement~~IORB-benchmarked ~~and~~investment ~~the~~income. ~~PCCU~~3) ~~CAA~~Decline in average daily deposit balances. InAverage ~~2023,~~daily ~~loan~~CRB ~~interest~~deposit ~~income~~balances ~~from~~declined ~~PCCU~~during ~~operations~~2025 ~~amounted~~compared to $22024,~~883,192,~~ ~~with associated~~which ~~loan~~reduced ~~servicing~~the ~~fees~~principal ~~totaling~~base ~~$81~~upon which investment income is earned. As discussed in “––Discussion of Adjusted EBITDA Results” above,~~577,~~ ~~pursuant~~Management tohas identified three primary causes of the ~~same~~elevated ~~agreements~~client attrition and deposit outflows experienced during 2025 4) The Company’s banking relationship with Five Star Bank was terminated in 2024. ~~These~~Five ~~expenses~~Star ~~were~~Bank ~~also~~contributed ~~categorized~~$0.2 ~~under~~million ~~“General and~~to ~~Administrative~~investment ~~Expenses”~~income in ~~the~~2024, ~~Consolidated~~which ~~Statements~~is ofnot ~~Operations~~material in ~~our~~2025 ~~financial~~results, ~~statements~~representing an incremental headwind in the year-over-year comparison.

~~Under the Amended CAA, the Company’s loan interest~~Loan ~~income~~program 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.”income

42In 2025, loan program income was generated primarily from CRB loans originated by PCCU and underwritten and serviced by the Company under the First Amended CAA.

For the year ended December 31, 2025, the Company serviced twenty-two loans, compared to twenty-four loans for the year ended December 31, 2024. For the year ended December 31, 2025, the Company recognized $2.5 million loan program income attributable to PCCU activities, compared to $6.3 million for the year ended December 31, 2024. The decrease in loan program income was driven by three primary factors.

	1)	The First Amended CAA became effective January 1, 2025, pursuant to which the Company received approximately 35% of loan program income generated by the applicable loans, with the remainder retained by PCCU. This replaced the prior structure in effect in 2024, under which the Company received 100% of loan program income and paid PCCU a servicing fee of 0.25% to 0.35% per annum. This structural change reduced the Company’s effective yield on the portfolio in 2025 relative to the prior year. Due to the Second Amended CAA, the Company’s share of loan program income increased to up to 65%. The Second Amended CAA constitutes a Type 1 subsequent event, and as such the Company recognized approximately $0.4 million in incremental loan program income attributable to the fourth quarter of 2025, partially offsetting the decline in loan program income resulting from the reduced allocation under the First Amended CAA.

	2)	The composition of the loan portfolio has not changed materially during 2025. As of December 31, 2025, the portfolio consisted of twenty-two loans with an aggregate outstanding balance of $52.1 million, compared to twenty-four loans with an aggregate outstanding balance of $56.8 million as of December 31, 2024.

	3)	The weighted average interest rate on the loan portfolio was approximately 10.6% as of December 31, 2025, compared to approximately 10.2% as of December 31, 2024. All loans in the portfolio carry fixed interest rates. The increase in the weighted average rate reflects changes in portfolio composition resulting from principal repayments on higher-risk rated loans.

Operating expenses

Year Ended December 31,	~~2024~~2025			~~2023~~2024			Change ($)			Change (%)
Compensation and employee benefits	$	76,~~783~~266,~~331~~317		$	107,~~334~~783,~~212~~331		$	(21,~~550~~517,~~881~~014	)		(2419.685	)%
General and administrative expenses		43,~~018~~294,~~094~~275			64,~~587~~018,~~392~~094			(2723,~~569,298~~819	)		(3918.000	)%
Impairment of goodwill		~~6,058,000~~-			136,~~208~~058,~~276~~000			(76,~~150~~058,~~276~~000	)		(54100.130	)%
Impairment of long-lived intangible assets		~~3,090,881~~-			53,~~699~~090,~~463~~881			(23,~~608~~090,~~582~~881	)		(45100.770	)%
Professional services		23,~~518~~328,~~394~~222			12,~~858~~518,~~137~~394			~~660~~809,~~257~~828			3532.532	%
Rent expense		~~258~~232,~~477~~773			~~315~~258,~~615~~477			(5725,~~138~~704	)		(189.109	)%
Credit loss (benefit) expense		(1,393,131	)		290,857			(1,683,988	)		(578.97	)%
Amortization of contract asset		129,072			-			129,072			100.0	%
Total Operating Expenses	$	22,334,046		$	38,293,952		$	(15,959,906	)		(41.68	)%
Credit loss (benefit) expense		(177,917	)		(1,393,131	)		1,215,214			(87.2	)%
Total operating expenses	$	13,072,742		$	22,334,046		$	(9,261,304	)		(41.5	)%

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

~~Compensation~~Total operating ~~and~~expenses ~~employee~~decreased ~~benefits~~by ~~expenses~~$9.3 ~~decreased due~~million, or 41.5%, to $13.1 million for the year ended December 31, 2025, from $22.3 million for the year ended December 31, 2024. The decrease inwas ~~stock~~driven primarily by the absence of non-~~based~~cash ~~compensation~~impairment ~~and~~charges athat were recognized in 2024, lower headcount-related ascosts, ~~compared~~and toreduced ~~previous~~general ~~year.~~and ~~Restructuring~~administrative ~~efforts~~expenses, ~~continue~~partially asoffset weby ~~optimize~~higher professional services ~~our~~costs ~~talent~~associated ~~portfolio~~with litigation and the September 2025 Recapitalization.

~~General and administrative expenses decreased across~~Compensation 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)~~employee ~~$661,776 in decreased amortization and depreciation.~~benefits

~~For~~Compensation and employee benefits decreased by $1.5 million, or 19.5%, to $6.3 million for the year ended December 31, ~~2024~~2025, ~~the~~from ~~impairment~~$7.8 million for ofthe ~~goodwill~~year ~~and~~ended ~~finite~~December 31, 2024. The decrease reflects several deliberate cost-~~lived~~reduction ~~intangible~~actions ~~assets~~taken ~~was~~during ~~recognized~~2025, asincluding a ~~result~~reduction in ofheadcount as the Company’s ~~annual~~continued ~~impairment~~to ~~assessment~~optimize ~~conducted on~~its ~~December 31~~workforce, ~~2024.~~a ~~Similarly,~~reduction ~~for~~in the ~~year~~scope ~~ended~~of ~~December~~employee ~~31,~~bonus ~~2023~~programs, ~~impairment~~and the termination of ~~goodwill~~the ~~and~~Company’s ~~finite~~matching contributions to its 401(k) plan. In addition, non-~~lived~~cash ~~intangible~~stock-based ~~assets~~compensation ~~was~~expense ~~recorded~~decreased year ~~following~~over ~~both~~year. ~~the~~These ~~annual~~decreases ~~impairment~~were ~~assessment~~partially onoffset ~~December~~by ~~31,~~executive ~~2023,~~bonus ~~and~~compensation anof ~~interim~~approximately ~~impairment~~$0.5 ~~assessment~~million onawarded ~~June~~during 302025, ~~2023~~as well as a one-time settlement payment of approximately $0.3 ~~The~~million ~~interim assessment~~to a former employee, which was ~~necessitated~~satisfied bythrough ~~the~~a ~~termination~~combination of cash and shares of the ~~Master~~Company’s ~~Services~~Common ~~and~~Stock. ~~Revenue~~The ~~Sharing~~Company ~~Agreement~~has ~~with~~increasingly ~~the~~used ~~Central~~equity-based ~~Bank,~~compensation ~~under~~to ~~which the~~preserve ~~Company~~cash ~~provided~~and align ~~expertise~~employee and ~~intellectual~~consultant ~~property~~incentives towith ~~cannabis-related~~the ~~businesses,~~performance ~~primarily~~of inits ~~Arkansas~~Common Stock.

~~The professional services expense increased primarily~~General ~~due~~and toadministrative ~~higher legal fees related to ongoing litigation.~~expenses

~~The~~General and ~~indemnity~~administrative ~~liability~~expenses ~~was~~decreased ~~eliminated~~by ~~from~~$0.7 ~~the~~million, ~~Balance Sheet~~or as18.0%, ofto $3.3 million for the year ended December 31, ~~2024~~2025, ~~due~~from to$4.0 million for the ~~Amended~~year ~~CAA~~ended December 31, ~~which~~2024. ~~led~~The todecrease ~~the~~was ~~complete~~driven ~~reversal~~by several factors: (i) a decrease of ~~the~~approximately ~~liability~~$0.7 ~~under~~million ~~the~~in ~~‘credit~~depreciation and ~~loss~~amortization expense as certain intangible assets became fully amortized in 2024; (ii) a reduction of approximately $0.07 million in bank-sharing fees paid to other financial-institution clients due to a lower number of active accounts; and (~~benefit~~iii) a reduction in investment relations expense of approximately $0.’12 ~~For~~million. ~~additional~~These ~~details,~~decreases ~~please~~were ~~refer~~partially offset by an increase in hosting fees paid to ~~“Business––Amended~~PCCU, as ~~and~~the ~~Restated~~First Amended CAA ~~with~~resulted ~~PCCU~~in an incremental cost of approximately $0.”2 million after netting the savings from the elimination of investment-hosting and loan-services fees.

~~Other~~Subsequent to ~~(income)~~December ~~/expenses~~31, 2025, the Second Amended CAA replaced the flat 1.00% asset hosting fee rate with a tiered rate structure. Under the new structure, the rate ranges from 0.50% on the first $25 million of average daily balances to 1.25% on balances above $125 million. The new rates apply retroactively from October 1, 2025, which resulted in a reduction of approximately $0.06 million in asset hosting fee expense for the fourth quarter of 2025. This adjustment has been recognized in the fourth quarter of 2025 financial statements as a Type 1 subsequent event.

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	%

Impairment of goodwill and long-lived intangible assets

~~The deferred consideration from the Abaca acquisition~~No isimpairment ~~classified~~of asgoodwill aand ~~derivative~~long-lived ~~liability~~intangible ~~under~~assets ~~ASC~~charges ~~815~~were ~~and~~ recorded atduring ~~fair~~the ~~value,~~year ~~with~~ended ~~periodic~~December ~~adjustments~~31, 2025. ~~Its~~During ~~value~~the ~~fluctuates based~~year onended ~~factors~~December ~~such~~31, as2024, the ~~company’s~~Company ~~stock~~recognized ~~price,~~impairment ~~market~~charges ~~volatility,~~of ~~risk-free~~$6.1 ~~interest~~million ~~rates,~~related ~~and amendments~~ to ~~the~~goodwill ~~agreement~~and $3.1 ~~For the~~million ~~year~~related ~~ended~~to ~~December~~finite-lived intangible 31assets, ~~2024,~~each ~~the~~identified ~~fair~~through ~~value~~the ofCompany’s ~~deferred~~annual ~~consideration~~impairment ~~decreased~~assessment ~~by $361,449 from its balance~~ as of December 31, ~~2023~~2024. ~~This~~ ~~reduction~~The ~~was~~absence ~~due~~of toimpairment charges ~~a decline~~ in ~~the~~2025 ~~fair~~accounts ~~value~~for ~~adjustment~~$9.1 onmillion ~~the~~of ~~stock and cash consideration payable to~~ the ~~Abaca~~total ~~shareholders, which~~year-over-year ~~affected~~decrease ~~the~~in ~~fair~~operating ~~value of the third anniversary payment~~expenses.

4358

~~Interest expense for 2024 primarily consists of interest~~Professional 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.services

~~The~~Professional services ~~Company~~expenses ~~has~~increased ~~warrant~~by ~~liabilities~~$0.8 ~~related~~million toor ~~public~~32.2%, ~~private~~ ~~placement,~~to ~~PIPE,~~$3.3 ~~and~~million ~~Abaca~~for ~~warrants~~the year ended December 31, ~~which~~2025, ~~may~~from be$2.5 ~~settled~~million infor ~~cash~~the year orended ~~stock~~December ~~depending~~31, on2024. ~~conditions~~The ~~such~~increase asreflects ~~stock~~a ~~price~~structural orshift ~~registration status.~~in ~~These~~how ~~warrants~~the ~~are~~Company ~~accounted~~sources ~~for~~and asmanages ~~derivative~~certain ~~liabilities~~services, ~~due~~as towell as ~~their~~a ~~contingent~~concentration ~~nature.~~of ~~The~~non-recurring ~~liabilities~~costs ~~are~~associated ~~subject~~with tosignificant ~~adjustments based~~corporate onevents ~~terms~~during ~~and~~2025, ~~stock~~partially ~~performance.~~offset ~~The~~by ~~change~~savings inrealized from the ~~fair~~transition ~~value~~to ofan ~~warrant~~outsourced ~~liabilities~~service bymodel ~~$2,803,638~~and ~~from~~lower ~~December~~ongoing ~~31,~~audit ~~2023~~fees ~~was~~following ~~attributable to~~ the ~~decrease~~completion inof the ~~share~~Company’s ~~price~~auditor transition.

~~Income~~The most ~~taxes~~significant structural change in 2025 was the elimination of the Company’s internal legal team and the engagement of external general counsel and compliance service providers in its place. This transition reclassified costs previously reported within compensation and employee benefits into professional services and generated one-time transition costs during 2025. Notwithstanding those transition costs, the Company estimates that this change in structure produced annualized savings in excess of $0.3 million relative to the cost of maintaining an internal legal function, the benefit of which is expected to be fully reflected in future periods.

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 increase in professional services expense was also attributable to the following during 2025:

~~The~~● ~~Company~~Legal ~~recognized~~fees aassociated ~~deferred~~with ~~tax~~the ~~asset,~~shareholder ~~primarily arising~~litigation ~~from~~described ~~temporary~~in ~~differences~~“––Litigation” ~~between~~below; ~~financial~~● ~~accounting~~Costs incurred in connection with the resolution of employment matters with former employees; ● Advisory, legal, and ~~tax~~other ~~reporting~~fees related to the ~~reverse~~September ~~acquisition~~2025 Recapitalization, including the cost of ~~NLIT~~filing required registration statements, the ~~acquisition~~ cost of ~~Abaca,~~issuance of convertible notes and ~~Net~~the ~~Operating~~solicitation ~~Loss~~of ~~carryforwards.~~required ~~For~~shareholder ~~the~~votes; ~~year~~● ~~ended~~Fees ~~December~~incurred ~~31,~~in ~~2024,~~connection with the ~~provision~~transition ~~for~~to ~~income~~a ~~taxes~~new ~~increased~~independent byregistered ~~$45~~public accounting firm,~~689,387 compared~~ toincluding parallel engagement costs during the ~~same~~transition period; inand ~~2023.~~● ~~This~~Accounting ~~increase~~and ~~was~~audit ~~principally~~fees ~~due~~related to ~~our~~the ~~determination~~restatement ~~that~~of itthe isCompany’s ~~more~~Quarterly ~~likely~~Report ~~than~~on ~~not~~Form 10-Q for the ~~deferred tax~~quarter ~~assets~~ended ~~cannot~~March be31, ~~realized~~2025, which was a non-recurring event.

In connection with the September 2025 Recapitalization, the Company issued 1,063 shares of Series B Preferred Stock and accompanying Series B Warrants to three independent service providers in exchange for a two-year service arrangement that run through September 30, 2027. This structure reduced the immediate cash cost of those services; however, under GAAP the equity instruments issued were recorded at fair value as a prepaid asset and are being amortized to professional services expense ratably over the two-year service term. The portion of amortization recognized during the year ended December 31, 2025, is included within professional services expense above. The unamortized balance as of December 31, 2025, is reflected as a $0.3 million prepaid asset on the consolidated balance sheet. Partially offsetting these increases, the Company eliminated prior-year external counsel retainer arrangements that were no longer necessary following the outsourcing of its legal function and began to benefit from lower recurring audit and accounting fees following the completion of its auditor transition. The Company expects that, with the majority of these non-recurring items now behind it, ongoing professional services costs will decline in future periods relative to the elevated 2025 levels.

Rent expense

Rent expense decreased by $0.03 million, or 9.9%, to $0.2 million for the year ended December 31, 2025, from $0.3 million for the year ended December 31, 2024, primarily reflecting the closure of the Company’s Arkansas office during 2025.

Amortization of contract asset

The Company capitalized costs as a contract asset to secure the Second Amended CAA related to the (i) stand-ready guarantee liability and (ii) financial indemnification liability discussed elsewhere in this prospectus. Amortization of contract costs was $0.1 million for the year ended December 31, 2025, compared to $0 for the year ended December 31, 2024. It represents the straight-line amortization of the cost to acquire a contract asset recognized as of October 1, 2025, the effective date.

Credit loss (benefit) expense

The Company recognized a credit benefit of $0.2 million for the year ended December 31, 2025, compared to a credit benefit of $1.4 million for the year ended December 31, 2024.

For the year ended December 31, 2024, the credit benefit resulted from the full release of the indemnification liability under the CAA. The First Amended CAA eliminated the Company’s obligation to indemnify PCCU for CRB loan losses, and accordingly, the previous indemnification liability was fully reversed.

For the year ended December 31, 2025, the Second Amended CAA, effective October 1, 2025, reinstated indemnification obligations, requiring the Company to cover up to 65% of PCCU CRB loan portfolio. The Company recorded a stand ready guarantee liability of $2.1 million under ASC 460 and a financial indemnification liability of $1.1 million under ASC 326, each with a corresponding contract asset.

In accordance with ASC 460, the liability is recognized on a straight line basis, based on a weighted-average remaining loan maturity of three years. The Company reduced the stand ready guarantee liability by $0.2 million and the consolidated statement of operation reflects $0.2 million as benefit in operating expense. The expected amortization per year is approximately $0.7 million in future periods, which will be reassessed annually.

Other Income (Expenses)

Year Ended December 31,	2025			2024			Change			Change %
Change in the fair value of deferred consideration	$	79,475		$	361,449		$	(281,974	)		(78.0	)%
Interest expense		(492,643	)		(533,390	)		40,747			(7.6	)%
Gain on extinguishment of forward purchase derivative		3,336,213			-			3,333,213			100.0	%
Costs incurred to secure financing		(987,621	)		-			(987,621	)		100.0	%
Discount on Common Stock sold pursuant to the ELOC		(76,553	)		-			(76,553	)		100.0	%
Change in fair value of warrant liabilities		1,320,871			2,803,638			(1,482,767	)		(52.9	)%
Total Other Income/ (Expenses)	$	3,179,742		$	2,631,697		$	548,045			20.8	%

Total other income (expenses) for the year ended December 31, 2025, was $3.2 million, compared to total other expense of $2.6 million for the year ended December 31, 2024, an improvement of $0.5 million. The increase was primarily due to a $3.3 million gain on the extinguishment of the FPA liability, which had been carried on the Company’s balance sheet at $7.3 million since December 31, 2022 and was settled through the issuance of Series B Preferred Stock and Series B Warrants rather than cash or Common Stock. The increase in other income is partially offset by costs incurred to secure financing and shift in the fair value of warrant liabilities. Each component is described below.

Change in Fair Value of Deferred Consideration

The contingent consideration payable to the former shareholders of Abaca was classified as a derivative liability under ASC 815 and remeasured at fair value at each reporting date, with changes recognized in earnings. The liability’s fair value was sensitive to the Company’s stock price, implied volatility, risk-free interest rates, and any amendments to the underlying arrangement.

For the year ended December 31, 2025, the Company recognized a gain of $0.08 million related to the decrease in the fair value of the deferred consideration, compared to a gain of $0.4 million for the year ended December 31, 2024. The gain in 2025 was primarily attributable to the decline in the Company’s stock price during 2025, which reduced the fair value of the third anniversary payment obligation prior to its extinguishment.

The third anniversary payment of $1.5 million was settled in full on October 3, 2025 through the non-cash issuance of 37,517 shares of the Company’s Common Stock at the contractual floor value of $40.00 per share. As a result of this settlement, the deferred consideration liability was fully extinguished prior to December 31, 2025, and no balance remains on the consolidated balance sheet as of that date. The last fair value measurement of the liability occurred at the time of settlement in October 2025, at which point the Company’s stock price had declined from $9.00 per share as of December 31, 2024 to $6.90 per share on October 3, 2025. This non-cash settlement is reflected in the supplemental schedule of non-cash investing and financing activities in the consolidated statements of cash flows.

Interest Expense

Interest expense for the year ended December 31, 2025 consisted of (i) interest on the senior secured promissory note with PCCU (the “PCCU Note”) and (ii) non-cash interest expense related to the OID on the Notes. By comparison, interest expense for the year ended December 31, 2024 primarily reflected interest incurred on only the PCCU Note.

During 2024, the Company made $2.2 million in scheduled principal repayments on the PCCU Note, reducing the outstanding balance to approximately $11.0 million as of December 31, 2024. The Company made one additional scheduled principal payment in January 2025. In March 2025, the Company and PCCU amended the PCCU Note to convert it to an interest only structure for a two-year period and to extend the maturity date to October 2030. Following this amendment, the Company remained current on all required interest payments through the date of the September 2025 Recapitalization.

On September 30, 2025, in connection with the Company’s September 2025 Recapitalization, PCCU cancelled the PCCU Note in full pursuant to a Debt Cancellation Agreement (the “Debt Cancellation Agreement”). At the time of debt cancellation, the outstanding principal balance was approximately $10.7 million. In consideration for the cancellation, PCCU received 13,436 shares of Series B Preferred Stock and a Series B Warrant to purchase 865,200 shares of Common Stock. As a result, no balance remained outstanding under the PCCU Note as of December 31, 2025.

The year-over-year decrease in interest expense of $0.04 million was primarily attributable to a lower average principal balance on the PCCU Note during 2025 relative to 2024. This decrease was partially offset by approximately $0.1 million of non-cash interest expense recognized in connection with the OID on the Notes. These Notes were subsequently exchanged for Series B Preferred Stock and Series B Warrants in connection with the Exchange and Cancellation Agreements.

Gain on Extinguishment of Debt

On June 16, 2022, the Company entered the FPA with Midtown, which subsequently assigned the FPA in part to Verdun and Vellar. The FPA was carried as a derivative liability on the Company’s balance sheet at a carrying value of $7.3 million as of the settlement date.

On September 30, 2025, the Company entered into Exchange and Cancellation Agreements with each of Midtown, Verdun, and Vellar under which each counterparty irrevocably cancelled, waived, and terminated all of its rights under the FPA. In full settlement of the FPA liability, the Company issued an aggregate of 5,002 shares of Series B Preferred Stock and Series B Warrants to initially purchase 322,111 shares of Common Stock at an exercise price of $7.7644 per share. In February 2026, the Series B Preferred Stock and Series B Warrants’ exercise price was reduced to $1.5528.

The transaction was accounted for as an extinguishment of a liability under ASC 405-20. The equity instruments issued were measured at their fair value of $800 per unit, consistent with the price paid by unaffiliated third-party investors for identical securities on the same date. Because the aggregate fair value of the equity instruments issued was less than the carrying amount of the FPA liability, the Company recognized a gain on extinguishment of $3.3 million, which is included in Other Income (Expense) for the year ended December 31, 2025.

In August and September 2025, the Company issued the Notes in the aggregate principal amount of $0.7 million, with a 20% OID, resulting in net proceeds of $0.6 million. The Notes did not bear stated interest and the OID represented the investors’ yield and was recognized as non-cash interest expense under ASC 835-30.

On September 30, 2025, the Notes were exchanged for Series B Preferred Stock and Series B Warrants at $800 per unit. The exchange was accounted for as an extinguishment of debt under ASC 470-50. To the extent the fair value of the equity instruments issued exceeded the carrying amount of the Notes at the time of settlement, the Company recognized a loss on extinguishment. For the year ended December 31, 2025, the Company recorded a net loss on extinguishment of debt of $0.003 million related to these convertible note exchanges.

Costs Incurred to Secure Financing

For the year ended December 31, 2025, the Company incurred $1.1 million in costs related to establishing its ELOC, of which $0.8 million was in the non-cash form of Series B Preferred Stock issued as commitment consideration. These costs were expensed as incurred in accordance with ASC 505-10-45-2, as the ELOC does not qualify for deferral treatment under GAAP. There were no comparable costs during the year ended December 31, 2024.

Discount on Common Stock sold pursuant to the ELOC

For the year ended December 31, 2025, the Company drew on its ELOC, selling shares of Common Stock at a contractual 10% discount to the lowest intraday stock price on each draw date. This pricing discount, which represents a direct cost of accessing the facility, resulted in a non-cash charge of approximately $0.08 million recognized in the statement of operations for the year ended December 31, 2025. This expense reflects the difference between the fair market value of the shares issued on settlement date and the proceeds received by the Company under the ELOC.

Change in Fair Value of Warrant Liabilities

The Company has outstanding public warrants, private placement warrants, PIPE warrants, and Abaca warrants, each of which is accounted for as a derivative liability because the settlement of these instruments may be in cash or stock depending on conditions such as the Company’s stock price or registration status. Public warrants are remeasured at fair value using observable market prices (Level 1). Private placement warrants, PIPE warrants and Abaca warrants are remeasured using the Black-Scholes-Merton option pricing model (Level 3). Changes in fair value are recognized in earnings for each reporting period.

For the year ended December 31, 2025, the Company recognized a gain of $1.3 million on the change in fair value of warrant liabilities, compared to a loss of $2.8 million for the year ended December 31, 2024. The favorable change of $4.1 million was primarily driven by a reduction in the aggregate fair value of outstanding warrant liabilities, reflecting changes in the Company’s stock price and associated implied volatility during the year. As of December 31, 2025, all outstanding warrants were out of the money.

For the year ended December 31, 2024, the $2.8 million loss was attributable to increases in warrant liability fair values, driven by movements in the Company’s stock price relative to warrant exercise prices during that period.

Income tax (benefit) expense

Year ended December 31,		2025				2024				Change ($)				Change (%)
Income tax (benefit) expense		$	(58,470	)		$	43,859,686			$	(43,918,156	)			100	%

Income tax (benefit)/expense for the year ended December 31, 2025 was $0.06 million, compared to $43.9 million for the year ended December 31, 2024. For the year ended December 31, 2024, income tax expense was primarily due to the recognition of a full valuation allowance against the Company’s net deferred tax assets. As of December 31, 2025 and December 31, 2024, the Company had net deferred tax assets of approximately $45.8 million and $44.4 million, respectively and a full valuation allowance has been recorded in each period.

The Company’s net operating loss (“NOL”) carryforwards are subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended. As of December 31, 2025, the Company had approximately $67.7 million of federal NOL carryforwards.

Financial Condition

Cash and cash equivalents

Cash, and cash equivalents totaled $~~2,324,647~~6.8 million and $~~4,888,769~~ 2.3 million as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

Cash flows

For the year ended December 31, ~~2024~~2025, the Company ~~generated~~ used $~~430,477~~3.4 million of cash in operating activities. Operating cash ~~from~~flows ~~operations~~for December 31, 2025 ~~compared~~decreased from the prior year primarily due to ~~cash~~the ~~used~~net loss of $~~832~~2.2 million and changes to operating assets and liabilities that totaled $0.8 million,~~144~~ ~~for~~which were offset by $2.0 million of non-cash adjustments to reconcile net income to net cash provided by operating activities. For the year ended December 31, ~~2023~~2024, the Company generated approximately $0.4 ~~This~~million ~~improvement~~of ~~was~~cash from operating activities, ~~mainly~~including ~~due~~non-cash adjustments to ~~lower~~reconcile net income to net cash provided by operating ~~expenses~~activities ~~and~~of ~~the~~$50.8 ~~greater~~million ~~number~~that were offset by a net loss of ~~performing~~$48.3 ~~loans~~million atand ~~better~~$2.0 ~~interest~~million ~~rates~~of ~~than~~changes ~~the~~to ~~previous~~operating ~~period~~cash assets and liabilities.

For the year ended December 31, ~~2024~~2025, the Company generated ~~$12,394 in~~ cash from investing activities of approximately $0.4 million, ~~compared~~primarily tofrom the ~~cash~~proceeds ~~used~~of a loan and from the sale of ~~$2,180,448~~investment ~~for~~securities. For the year ended December 31, ~~2023.~~2024, ~~The~~cash ~~decrease was~~from ~~primarily~~investing ~~due to the repayment~~ activities of ~~loans~~$0.01 bymillion ~~customers~~from in the ~~previous~~proceeds ~~period~~from a loan.

For the year ended December 31, ~~2024~~2025, the Company ~~used~~ had generated $~~3,006,993~~7.4 inmillion of cash ~~for~~from financing activities. This primarily reflects proceeds of $0.6 million from the issuance of the Notes, ~~compared~~$6.1 million of gross proceeds from the issuance of Series B Preferred Stock and Series B Warrants to purchase Common Stock, excluding $~~488~~0.4 million offering cost,~~834~~ inand ~~the~~$1.8 ~~corresponding~~million ~~period~~from the sale of ~~2023.~~Common Stock under the ELOC. This was ~~mainly~~offset ~~due~~by tothe repayment of the PCCU Note totaling $0.3 million, $0.1 million repayment of a loan payable for insurance financing ~~repayments~~and on$0.3 million from the ~~senior~~redemption ~~secured~~of ~~promissory~~Series ~~note~~B ~~during~~Preferred Stock. For the year ended December 31, 2024, the Company used $3.0 million to repay the PCCU Note.

~~Contract assets and liabilities~~Liquidity

~~Deferred~~Liquidity refers ~~revenue~~to isour ~~primarily~~ability ~~related~~ to ~~contract liabilities~~meet ~~associated~~anticipated ~~with~~cash ~~the~~demands, ~~Company~~including ~~agreements~~servicing debt, funding operations, maintaining assets, and covering other routine business expenses. AsOur ofprimary ~~December~~cash 31outflows include operating costs, ~~2024~~general business expenditures, ~~SHF~~and, ~~reported~~to a ~~contract~~lesser ~~asset~~extent, debt ~~and~~interest ~~liability~~payments following the deferral of $0principal ~~and~~under ~~$28,335 respectively~~the ~~and~~PCCU onNote. ~~December~~The ~~31,~~primary ~~2023,~~source ~~SHF~~of ~~reported~~our aliquidity ~~contract~~is ~~asset~~cash ~~and~~generated from ~~liability~~operations. As of $0December ~~and~~31, ~~$21~~2025,~~922,~~ ~~respectively~~the Company does not have significant capital investment commitments.

44Under 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.

~~Liquidity~~As of December 31, 2025, the Company has cash and cash equivalents of $6.8 million and net working capital of $5.7 million. The Company has incurred recurring losses from operations and experienced negative cash flows from operations, including an operating loss of $5.4 million and cash used in operating activities of $3.4 million for the year ended December 31, 2025. These conditions raise 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.

~~Liquidity refers to our ability to meet anticipated~~Management ~~cash~~has ~~demands,~~developed ~~including servicing debt, funding operations, maintaining assets,~~ and ~~covering~~implemented ~~other~~a ~~routine~~series ~~business expenses. Our primary cash outflows include debt principal and interest repayments, operating costs, and general business expenditures. The main source~~ of ~~our liquidity~~measures ~~continues~~intended to bepreserve ~~cash~~liquidity ~~inflows~~and ~~generated~~support ~~from operational performance. As of December 31, 2024,~~ the Company’s ~~does~~ability ~~not~~to ~~have~~meet ~~significant~~its ~~capital~~obligations ~~investment~~during ~~commitments~~the look-forward period.

~~Going concern~~63

~~Under ASC 205-40, Presentation of Financial Statements—Going~~Strengthened ~~Concern,~~Revenue 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.Profile

~~While~~The Second ~~the~~Amended ~~company~~CAA ~~reported~~increased athe ~~net~~Company’s ~~working~~share ~~capital deficit~~ of ~~$983,833~~loan atprogram ~~the~~income ~~end~~from ofapproximately ~~2024,~~35% ~~this~~to ~~figure~~65% ~~includes~~of ~~several~~the ~~non-cash~~PCCU’s ~~liabilities~~loan portfolio. ~~that~~This doagreement ~~not~~improves ~~affect~~the ~~liquidity.~~recurring ~~After~~revenue ~~adjusting~~profile ~~for~~of ~~these non-cash~~the ~~items~~Company’s ~~and~~core ~~considering~~business ~~the~~on ~~cost~~a ofprospective basis. Additionally, the ~~Amended~~Company ~~PCCU~~is ~~Note~~exploring ~~the~~strategic ~~adjusted~~partnerships ~~working~~with ~~capital~~other ~~calculation~~financial ~~is as follows:~~institutions.

	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

Access to Additional Capital

The Company has ~~the~~entered ~~following~~into ~~non-cash~~the ~~items~~ELOC, onproviding ~~its balance~~contingent ~~sheet~~access ~~that~~to ~~impact~~additional ~~the working~~ capital ~~calculation~~subject asto ~~reported,~~customary ~~thus improving working capital:~~conditions.

	●	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.

Expense Management

~~At December 31, 2024, the Company reported cash of~~Management ~~$2,324,647~~has ~~and~~identified ~~a net working capital deficit of $983,833, compared to cash of $4,888,769~~ and aquantified ~~net working capital deficit of $135~~specific,~~355 as~~ ofactionable ~~December~~cost ~~31,~~reductions ~~2023.~~that ~~The~~are ~~Company’s~~within ~~ability~~its todirect ~~continue~~operational ascontrol aand ~~going~~that ~~concern~~it ~~depends~~would ~~on its capacity to generate sufficient liquidity~~implement toshould ~~meet financial obligations, including interest repayments under the senior secured note with PCCU. The Company incurred~~ operating ~~losses of~~conditions ~~$7,091,486~~deteriorate ~~and~~below ~~$20,731,049~~base-case ~~for the years ended December 31, 2024 and 2023, respectively~~expectations.

~~The reported working capital deficit and operating~~Cash ~~losses,~~Flow 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.Monitoring

45Management maintains a 52-week rolling cash flow projection that tracks anticipated expenses, revenues, and ending cash balances against budget. Cash positions are reviewed on a bi-weekly basis to ensure the Company maintains adequate liquidity to fund operations.

~~Management~~Notwithstanding the measures described above, the Company continues to incur operating losses and negative cash flows from operations, and uncertainty remains as to whether these conditions will be fully resolved within the look-forward period. As a result, management has concluded that substantial doubt exists about the Company’s ~~Plan~~ability ~~Related~~ to ~~Going~~continue ~~Concern~~as a going concern for a period of at least twelve months from the date these consolidated financial statements are issued.

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~~filed a ~~Complaint to~~complaint ~~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)~~. OnThe ~~November~~lawsuit ~~21,~~arises ~~2024,~~from ina ~~connection~~dispute ~~with~~over 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~~October ~~financial statements.~~2022 Onacquisition ~~December~~of ~~19,~~Abaca ~~2024,~~pursuant ~~Daniel Roda, Gregory W. Ellis, and James R. Carroll caused an answer and counterclaim~~ to bea ~~filed~~merger inagreement ~~response to~~ (the ~~Company~~“Merger ~~Complaint.~~Agreement”) ~~For~~that ~~additional~~was ~~details,~~subsequently ~~please~~amended ~~refer to “Business––Involvement~~ in ~~Certain~~November ~~Legal Proceedings,”~~2022 asand ~~well~~in asOctober ~~the~~2023 ~~Company’s Current Reports on Form 8-K filed with~~ (the ~~SEC~~“Second ~~on October 18, 2024 and December 19, 2024~~Amendment”).

The Second Amendment restructured certain merger consideration, including introducing warrants and modifying payment timing. The defendants contend the Second Amendment is invalid under Delaware law and seek to have it set aside, which would reinstate the original payment terms and potentially increase the Company’s obligations. The Company maintains that the Second Amendment was validly executed and is binding.

On November 21, 2024, at the Company’s request, the disputed merger payment of $3.0 million was deposited into the Denver County, Colorado District Court’s registry pending resolution of the dispute. This amount has been reflected in the Company’s consolidated balance sheet.

On December 19, 2024, the defendants filed an answer and counterclaims against the Company. On April 18, 2025, the District Court issued an order denying the Company’s motion to dismiss most of the counterclaims, but the District Court did dismiss claims against the Company’s Chairman, Fred Niehaus, with prejudice. The District Court also clarified that the Delaware statutes cited by the defendants govern pre-closing amendments and do not authorize post-merger amendments altering consideration, a finding that is consistent with the Company’s legal position.

On April 23, 2026, the District Court issued an omnibus order on cross-motions for summary judgment in the matter. The ruling addressed the validity of the Second Amendment entered into in connection with the Company’s October 2022 acquisition of Abaca. The District Court denied the Company’s motion for summary judgment in its entirety.

The District Court granted the counterclaim plaintiffs’ motions for summary judgement regarding the validity of the Second Amendment and the claim that the Company breached the Merger Agreement by using a certain formula in the Second Amendment to calculate the first anniversary cash consideration payment. Damages for these two counterclaims are to be determined at a future hearing. The District Court denied both parties’ motions for summary judgement regarding a claim related to the second anniversary cash consideration payment of $3.0 million. The District Court also denied the counterclaim plaintiffs’ motion for summary judgment on the Company’s declaratory judgment claim.

The Company intends to continue defending its positions vigorously. In addition, the Company may evaluate the possibility of a negotiated resolution of the dispute. In the event of a negotiated resolution, the Company’s ability to fund any payments owed in cash may be materially constrained by the terms of the ELOC and the Company’s Series B Preferred Stock. Litigation is inherently uncertain, and there can be no assurance that any negotiated resolution will be reached or that the terms of any such resolution are favorable to the Company.

The $3.0 million previously deposited into the District Court’s registry in November 2024 remains reflected in the Company’s financial statements.

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~~Revenue ~~transaction~~from ~~prices~~Contracts towith ~~specific~~Customers, ~~services~~by ~~provided~~identifying ~~within~~contracts awith ~~contract.~~customers, identifying ~~The~~distinct ~~primary~~performance ~~revenue streams include account fee income~~obligations, ~~interest~~determining ~~income~~and onallocating ~~loans~~transaction prices, and ~~investment~~recognizing ~~income,~~revenue ~~each classified~~ as ~~gross~~each ~~revenue due to the Company’s control over the~~performance ~~respective~~obligation ~~processes~~is satisfied. AnA ~~important~~critical element of ~~the~~this ~~estimation~~ process is the determination of whether the Company acts as a principal~~-vs-agent~~ or agent (gross~~-vs-~~ versus net revenue presentation) ~~relationship~~in each of its revenue streams.

The Company’s primary revenue streams are account fee income, loan program income, and investment income. Each stream involves contractual arrangements with PCCU. Accordingly, the terms of the Second Amended CAA are material to the Company’s revenue recognition policies and estimates. See “––Relationship with PCCU.”

The Company’s revenue recognition process requires management to exercise judgment in three primary areas: determining the transaction price for account fee income, estimating the Company’s allocated share of loan program income under a variable yield formula, and determining average net daily deposit balances for investment income. Each involves assumptions that, if different, could materially affect reported revenue. Except for account fee income, where the Company acts as principal, the Company serves as an agent for loan program income and investment income. Because its primary role is to facilitate the contract with PCCU, the Company recognizes these revenues on a net basis.

Account Fee Income

~~Revenue from account~~ Account fee income isconsists ~~recognized~~of ~~when the Company fulfills its service obligations, including~~ fees charged ~~for~~to ~~financial~~CRBs ~~services~~for ~~such as~~ account maintenance, transaction processing, compliance monitoring, and other ~~miscellaneous~~ ancillary services. ~~The~~Fees ~~transaction~~are ~~price~~recognized isas ~~determined~~services ~~based~~are ~~on contractual terms and potential fluctuations in client usage~~performed. The Company ~~recognizes~~presents this revenue on a gross basis, asbecause it isbears ~~directly~~primary responsibility ~~responsible~~ for compliance monitoring, account management, and ~~reporting~~ ~~services~~reporting, and ~~has~~retains sole discretion inover ~~setting~~fee ~~service fees~~pricing.

~~Interest Income on Loans~~65

The key ~~Company~~estimation ~~earns~~challenge ~~revenue~~is ~~from~~the ~~interest~~transaction ~~on loans~~price, ~~previously~~ ~~determined~~which ~~using~~varies aby ~~fixed~~account ~~percentage fee structure~~type, ~~where~~deposit ~~PCCU~~balance ~~received~~tier, aand ~~share~~customer ~~of interest income from CRB-related loans~~activity. ~~Revenue~~Management isdetermines ~~recognized over~~ the ~~loan~~appropriate ~~period~~fee astier ~~earned.~~each ~~The~~period ~~Company~~and ~~reports~~evaluates ~~this~~any ~~revenue~~adjustments ~~on a gross basis as a principle, as it is responsible~~ for ~~identifying~~ ~~customers~~credits, ~~evaluating and onboarding borrowers~~waivers, ~~and~~or ~~determining~~usage-based ~~loan interest rates~~fluctuations. ~~Additionally, under~~ Following the ~~PCCU~~revised ~~CAA,~~fee ~~the Company~~schedule iseffective ~~required~~January to1, ~~pay~~2025, ~~PCCU~~changes ain ~~loan~~customer ~~servicing~~mix ~~fee of 0.35% of the outstanding loan balance~~ and ~~monthly~~average ~~service~~deposit ~~fees,~~levels ~~which~~directly ~~vary~~affect ~~based on~~recognized ~~account balances above or below $1 million~~revenue.

Loan Program Income

The Company earns income from CRB loans originated and funded by PCCU and primarily serviced by the Company. Revenue is recognized over the loan’s term as interest is earned, reflecting only the Company’s allocated share of net interest income. Management has concluded this arrangement is best characterized as a collaborative arrangement under ASC 808, given the bidirectional flow of consideration, shared credit risk, and the absence of a traditional customer-vendor relationship between the Company and PCCU. The timing and amount of income recognized are identical regardless of whether ASC 808 or ASC 606 governs how the Company accrues its allocated share monthly as earned.

Effective December 31, 2024, the Company’s allocated share of net interest income is determined under a loan yield allocation formula that combines the externally observable Constant Maturity U.S. Treasury Rate with a proprietary internal risk rating assigned to each loan. The risk rating is a management estimate that directly drives the income split between the Company and PCCU, and changes in risk ratings across the portfolio will increase or decrease the Company’s recognized share of interest income accordingly.

Investment Income

~~Revenue from investment~~ Investment income ~~consists~~represents of interest earned on ~~daily~~CRB deposit balances ~~maintained~~held ~~with~~at ~~financial~~PCCU ~~institutions.~~at ~~The~~the ~~Company’s~~IORB ~~customer~~rate, ~~base~~classified ~~primarily~~as ~~includes~~a ~~financial institutions~~return ~~serving~~on ~~CRBs,~~a ~~with~~financial ~~revenue~~instrument under ~~primarily~~ASC ~~generated~~310 inand outside the ~~United~~scope ~~States~~of ASC 606. ~~Revenue~~Income is ~~recognized~~accrued monthly based on aaverage ~~gross~~net ~~basis,~~daily asdeposit balances and the ~~Company~~prevailing ~~retains~~IORB ~~first~~rate, ~~rights~~both ~~over~~of ~~deposit~~which ~~balances~~are ~~and~~externally ~~controls~~determinable. ~~their~~To ~~allocation~~the ~~for~~extent ~~loan~~ASC ~~funding,~~606 ~~subject~~were determined to ~~contractual~~apply, ~~ceiling~~the ~~limits.~~recognition ~~The~~outcome would be ~~Company~~identical, ~~maintains~~and ~~control~~accordingly ~~over~~no change in previously reported amounts would arise from this classification. Pursuant to the ~~utilization~~each of ~~deposit~~the First ~~balances~~Amended CAA and the Second Amended CAA, ~~reinforcing~~the ~~its~~Company ~~principal~~is ~~role~~entitled into ~~this~~100% ~~revenue~~of ~~stream.~~this ~~Additionally~~investment income, ~~the~~ ~~Company~~replacing ~~paid~~the ~~PCCU~~prior astructure under which 25% was remitted to PCCU as an investment hosting fee. ~~based~~This onchange ~~investment~~is ~~earnings~~a ~~derived~~material ~~from~~factor ~~PCCU-related~~in ~~deposits~~the comparability of investment income between 2024 and 2025.

~~These revenue recognition policies align with ASC~~Stock-Based ~~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.~~Compensation

The Company grants stock options and restricted stock units (“RSUs”) to employees, directors, and consultants under the Plan, which was originally approved by stockholders on June 28, 2022. During 2025, the Plan was amended to provide that the total number of shares of Common Stock authorized for issuance under the Plan will automatically increase upon the occurrence of a Dilution Event (as defined in the Plan) and on the first trading day of each calendar year, beginning January 1, 2026, by the number of shares necessary to bring the total authorized shares under the Plan equal to fifteen percent (15%) of total outstanding shares of Common Stock as of the last day of the immediately preceding calendar year, subject to a maximum annual increase of 50,000 shares. The Company also filed a Registration Statement on Form S-~~based~~8 during 2025 to register the shares of Common Stock issuable under the Plan, ensuring that shares delivered to grantees upon exercise or settlement of awards are freely tradeable. The Company has not issued stock appreciation rights, restricted stock, stock bonus awards, or performance compensation awards in the year ended December 31, 2025 and December 31, 2024. As of December 31, 2025, a total of 626,749 shares of Common Stock were authorized for issuance under the Plan, of which 78,799 shares remained available for future issuances.

InThe Company ~~conjunction~~accounts ~~with~~for ~~the~~all ~~Equity~~equity-based ~~Incentive~~awards ~~Plan~~under ASC 718, asCompensation—Stock Compensation. Stock-based compensation is ofconsidered ~~December~~a ~~31,~~critical ~~2024,~~

Filing Compare · SHF Holdings, Inc.