Recent developments include leadership changes, strategic partnerships to enhance compliance and capital access, participation in industry conferences, and initiatives to improve investor communications.

• SHF Holdings introduced an investor presentation strategy to enhance communication with investors [N1].
• Safe Harbor Financial executives participated in the Benzinga Cannabis Capital Conference 2025, highlighting industry engagement [N2].
• The company partnered with Bennett Thrasher to enhance financial compliance services for the cannabis industry [N3].
• Safe Harbor Financial partnered with FundCanna to improve capital access for cannabis businesses [N4].
• SHF Holdings appointed Terry Mendez as CEO and announced strategic growth initiatives [N6].
• Safe Harbor Financial announced a successful debt modification with Partner Colorado Credit Union to enhance financial flexibility [N7].
• Safe Harbor Financial closed a $1.5 million secured credit facility for a Missouri cannabis operator [N8].

SHF Holdings has developed a specialized platform that addresses the complex compliance needs of cannabis-related financial services, positioning it as a key enabler for financial institutions serving this market. The extension and amendment of its alliance agreement with PCCU through 2031 provide a stable revenue framework. Strategic leadership appointments and partnerships to enhance compliance and capital access services may support operational improvements. The company's liquidity management and access to a $150 million equity line of credit provide financial flexibility to navigate industry challenges.

The company faces significant risks including recurring operating losses and negative cash flows that raise substantial doubt about its ability to continue as a going concern. Its indemnification obligations under the alliance agreement with PCCU have no dollar cap and could materially impair financial condition if significant loan defaults occur. Customer concentration risk is high, with one borrower representing 18% of the loan portfolio and carrying a high risk rating. Regulatory uncertainties, internal control weaknesses, and dependence on a single financial institution partner constrain growth and operational stability. Industry economic pressures have led to account attrition, lower pricing, and reduced transaction activity, impacting revenue.

SHF Holdings' moat is based on its proprietary financial services platform tailored for compliant banking and lending services to cannabis-related businesses, a niche with significant regulatory complexity. Its long-standing relationship and alliance agreement with Partner Colorado Credit Union (PCCU), a federally chartered credit union, provide a critical infrastructure and client base that is difficult to replicate. The company's compliance expertise, technology platform deployed across 41 states, and regulatory examination support establish barriers to entry for competitors. However, the company's dependence on PCCU and regulatory environment pose risks to the durability of this moat.

• Indemnification Obligations: The Second Amended Commercial Alliance Agreement requires SHF Holdings to indemnify PCCU for up to 65% of loan losses with no dollar cap, exposing the company to potentially substantial financial liabilities that could impair liquidity and operations.
• Going Concern Uncertainty: Recurring operating losses and negative cash flows raise substantial doubt about the company's ability to continue as a going concern, as noted by independent auditors.
• Customer and Partner Concentration: The company is highly dependent on PCCU as its primary financial institution partner and on a concentrated loan portfolio, including one borrower representing 18% of loans with a high risk rating.
• Regulatory and Compliance Risks: Operating in the federally illegal cannabis industry exposes the company to heightened regulatory scrutiny, potential enforcement actions, and reputational risks that could affect business continuity.
• Internal Control Weaknesses: Material weaknesses identified in revenue recognition and loan documentation processes pose risks of financial misstatements and regulatory scrutiny.

• SHF Holdings, Inc. is based in Golden, Colorado, founded in 2015 by Partner Colorado Credit Union (PCCU).
• The company provides compliant banking and lending services to cannabis-related businesses (CRBs) and related industries through financial institution customers.
• SHF Holdings operates a proprietary financial services platform called the Safe Harbor Program, deployed across 41 states and territories, enabling financial institutions to offer compliant banking services to CRBs.
• Services enabled include business checking and savings accounts, cash management, savings and investment options, commercial lending, courier services, remote deposit, ACH payments, and wire payments.
• The company provides regulatory compliance consulting and technology, including KYC, AML, and BSA compliance support, customer due diligence, application management, program management, compliance monitoring, and regulatory examination assistance.
• SHF Holdings is not a financial institution and does not hold customer deposits or loans on its balance sheet; these are held by its financial institution partners, primarily PCCU.
• Revenue is generated through fee income (onboarding fees, monthly deposit and activity fees), investment income on CRB deposits, and loan program income from loans originated through PCCU.
• The Second Amended Commercial Alliance Agreement (CAA) with PCCU governs the primary relationship, effective October 1, 2025, through December 31, 2031, with automatic renewals.
• Under the Second Amended CAA, SHF Holdings receives up to 65% of loan program income but also indemnifies PCCU for up to 65% of loan losses, with no dollar cap on indemnification.
• The company must maintain sufficient liquidity to support its indemnification obligations and certify this monthly to PCCU.
• As of December 31, 2025, SHF Holdings held $6.8 million in cash and equivalents, with a current ratio of 1.88 and a cash ratio of 1.04, indicating liquidity to support operations and indemnification obligations.
• The company reported a net loss of approximately $2.16 million and negative earnings per share of -$0.82 for the fiscal year ended December 31, 2025.
• Recurring operating losses and negative cash flows raise substantial doubt about the company's ability to continue as a going concern, as noted by independent auditors.
• Management has taken steps to preserve liquidity, including restructuring revenue sharing under the Second Amended CAA, seeking strategic partnerships, reducing expenses, and maintaining access to a $150 million equity line of credit.
• The company faces risks from account attrition, lower pricing, introduction of money market accounts sharing interest with depositors, and reduced transaction activity in the cannabis industry.
• Investment income is sensitive to prevailing interest rates, which affects yields on CRB deposits and loan interest rates.
• One borrower represents approximately 18% of the total loan portfolio and carries a high risk rating, with potential indemnification exposure between $2.2 million and $6.1 million.
• The company has identified material weaknesses in internal controls related to revenue recognition and loan documentation, which have been remediated or are under monitoring.
• SHF Holdings has announced leadership changes, including appointment of Terry Mendez as CEO and strategic growth initiatives.
• The company has engaged in partnerships to enhance financial compliance services and capital access for the cannabis industry.
• Recent news includes participation in industry conferences and introduction of an investor presentation strategy.