--Net Income increased to $0.9 million in the second quarter of 2024 --Loan Interest Income increased 203.6% year-over-year --Excluding impairment expense in 2023, Operating Expenses decreased 34.5% versus 2023 --Cash and cash equivalents increased 25% to $6.1 million GOLDEN, Colo., Aug. 14, 2024 (GLOBE NEWSWIRE) -- SHF Holdings, Inc., d/b/a/ Safe Harbor Financial ("Safe Harbor" or the "Company") (NASDAQ:SHFS), a leader in facilitating financial services and credit facilities to the regulated cannabis industry, announced today its financial results for the second quarter and six months ended June 30, 2024. Second Quarter 2024 Financial and Operational Summary Net Income increased to approximately $0.9 million, compared to a net loss of approximately $17.6 million in the same period of 2023; Revenue was approximately $4.0 million, compared to approximately $4.6 million for the second quarter of 2023; Operating Expenses decreased to $3.7 million, compared to $22.5 million in the second quarter of 2023; Adjusted EBITDA(1) increased 14.5% to approximately $0.97 million, compared to approximately $850,000 for the second quarter of 2023(1). Six-month 2024 Financial & Operational Summary Net Income increased to approximately $3.0 million, compared to a net loss of approximately $19.0 million in the first half of 2023; Revenue was approximately $8.1 million, compared to approximately $8.8 million for the first half of 2023; Operating Expenses decreased to approximately $7.5 million, compared to approximately $28.3 million in the first half of 2023; Adjusted EBITDA(1) increased 63.5% to approximately $2.06 million, compared to approximately $1.26 million for the first half of 2023(1). (1) Adjusted EBITDA is a non-GAAP financial metric. A reconciliation of non-GAAP to GAAP measures is included below in this earnings release. "During the quarter, we experienced strength across our business, as well as operated more efficiently, both of which contributed meaningfully to our strong results," said Sundie Seefried, Chief Executive Officer of Safe Harbor Financial. "A major contributor to our favorable results was our lending platform, which posted record quarterly loan income of approximately $1.8 million in the second quarter of 2024, an increase of over 203% year-over year. This improvement helped to drive our gross margins substantially higher as we focused on shifting to higher margin products, which in addition to streamlining the business, improved improve our bottom-line." "During the second quarter we launched our Small Business Line of Credit Program, exemplifying our commitment to supporting the capital requirements of the cannabis industry, addressing the growing demand from small and mid-sized cannabis businesses, and diversifying our income sources. We also recently recouped the entire principal from a $3.1 million defaulted loan, further demonstrating the strength of our underwriting process. The money collected from this loan also increased our lending capacity, allowing Safe Harbor to more effectively meet client credit needs," added Seefried. Second Quarter 2024 Operational Highlights On April 15, 2024, the Company appointed CEO Sundie Seefried to the Board of Directors. On June 5, 2024, Safe Harbor announced a new small business line of credit program with the origination of three new lines of credit. Subsequent Operational Highlights On July 9, 2024, the Company announced it successfully exited a $3.1 million loan in default, collecting 100% of principal, as well as over $200,000 in accrued interest. On July 25, 2024, Safe Harbor announced it was teaming up with BIPOCann to empower minority-owned cannabis businesses. Second Quarter 2024 Financial Results For the second quarter ended June 30, 2024, total revenue was $4.0 million, compared to $4.6 million in the prior year period. The decrease in revenue was due to a reduction in deposit activity and onboarding income and was primarily attributable to the decrease in the number of accounts related to the Abaca acquisition. For the three months ended June 30, 2024, PCCU accounted for $1,206,922 of the revenue generated from deposits, activities, and client onboarding, compared with $1,385,845 during the same period last year. In Q2 2024, the Company recognized $121,108 in account hosting expenses, in accordance with the Commercial Alliance Agreement, compared with account hosting expenses of $60,833 for Q2 2023. Operating expenses for the second quarter 2024 decreased to $3.7 million, compared to $22.5 million in the prior year period, which was comprised of the following: Compensation and employee benefits decreased in the three months ended June 30, 2024, compared to compared to Q2 2023 due to a reduction in stock-based compensation and a decrease in the headcount. Rent expenses decreased in the second quarter of 2024 compared to the second quarter of 2023 due to reduction in the number of lease properties. Provision for credit losses decreased in the three months ended June 30, 2024 to a benefit for this expense item compared to and expense in the three months ended June 30, 2023 due to a decrease in the loan loss rate. For the quarter ended June 30, 2024, general and administrative expenses decreased across various categories including: i) approximately $345,271 in investment hosting fees due to a reduction in investment income, and (ii) approximately $206,560 in amortization and depreciation due to the reduction in the gross value of intangible assets from impairment recorded in 2023. The Company incurred significant impairment charges to goodwill and long-lived intangible assets in the second quarter of 2023. Removing these one-time, non-cash expenses, operating expenses for the comparable prior year quarter were $5.6 million. Second quarter 2024 net income was approximately $0.9 million, compared to a net loss of $17.6 million in the prior year period. The improvement in net income in Q2 2024 was the result of lower expenses across the Company and the greater number of performing loans at better interest rates than the previous period. First Six Months 2024 Financial Results For the six-months ended June 30, 2024, total revenue decreased to $8.1 million, compared to approximately $8.8 million in the prior year period. The decrease in revenue for the first six months of 2024 was due to a reduction in deposit activity and onboarding income and was primarily attributable to the decrease in the number of accounts related to the Abaca acquisition. For the six months ended June 30, 2024, PCCU accounted for $2,424,598 of the revenue generated from deposits, activities, and client onboarding. Related to this revenue, the Company recognized $277,721 in account hosting expenses, in accordance with the Commercial Alliance Agreement. For the six months ended June 30, 2023, PCCU contributed $2,763,684 to the revenue from similar sources, with account hosting expenses amounting to $116,258 as per the Loan Servicing Agreement provisions. First six-months of 2024 operating expenses decreased to $7.5 million, compared to $28.3 million in the prior year period, which was comprised of the following: Compensation and employee benefits decreased in the six-month period ended June 30, 2024 compared to the six month period ended June 30, 2023 on account of stock-based compensation and also the decrease in the headcount. Rent expenses decreased in the six months ended June 30, 2024, compared to the six months ended June 30, 2023, due to reduction in the number of lease properties. (Benefit)/ Provision for credit losses decreased in the six months ended June 30, 2024, compared to the six months ended June 30, 2023, due to a decrease in the estimated loss rate. For the six months of 2024, general and administrative expenses decreased across various categories including: i) approximately $632,675 in investment hosting fees due to a reduction in investment income and ii) approximately $407,165 in amortization and depreciation due to the reduction in the gross value of intangible assets from impairment recorded in 2023. Net income for the first six-months of 2024 was approximately $3.0 million, compared to a net loss of approximately $19.0 million in the prior year period. The driver of the net income produced in the first six months of 2024 was due to lower expenses across the Company and the greater number of performing loans at better interest rates than the previous period. As of June 30, 2024, the Company had cash and cash equivalents of $6.1 million, compared to $4.9 million at December 31, 2023. For more information on the Company's second quarter 2024 financial results, please refer to our Form 10-Q for the quarter ended June 30, 2024 filed with the U.S. Securities & Exchange Commission (the "SEC") and accessible at www.sec.gov. SHF Holdings, Inc.CONDENSED CONSOLIDATED BALANCE SHEETS     June 30, 2024(Unaudited)     December 31, 2023                 ASSETS                 Current Assets:                 Cash and cash equivalents   $ 6,111,982     $ 4,888,769   Accounts receivable – trade     302,749       121,875   Accounts receivable – related party     1,003,251       2,095,320                     Prepaid expenses – current portion     378,102       546,437   Accrued interest receivable     23,250       13,780   Short-term loans receivable, net     12,853       12,391   Other current assets     -       82,657   Total Current Assets   $ 7,832,187     $ 7,761,229   Long-term loans receivable, net     376,809       381,463   Property, plant and equipment, net     7,430       84,220   Operating lease right to use assets     781,693       859,861   Goodwill     6,058,000       6,058,000   Intangible assets, net     3,408,036       3,721,745   Deferred tax asset     43,793,536       43,829,019   Prepaid expenses – long term position     487,500       562,500   Forward purchase receivable     4,584,221       4,584,221   Security deposit     19,102       18,651   Total Assets   $ 67,348,514     $ 67,860,909   LIABILITIES AND STOCKHOLDERS' EQUITY                 Current Liabilities:                 Accounts payable   $ 154,445     $ 217,392   Accounts payable-related party     103,258       577,315                     Accrued expenses     949,686       1,008,987   Contract liabilities     66,795       21,922   Lease liabilities – current     153,357       132,546   Senior secured promissory note – current portion     3,072,871       3,006,991   Deferred consideration – current portion     2,952,722       2,889,792   Other current liabilities     77,315       41,639   Total Current Liabilities   $ 7,530,449     $ 7,896,584   Warrant liabilities     1,822,356       4,164,129   Deferred consideration – long term portion     351,000       810,000   Forward purchase derivative liability     7,309,580       7,309,580   Senior secured promissory note—long term portion     9,450,788       11,004,175   Net deferred indemnified loan origination fees     410,035       63,275   Lease liabilities – long term     795,062       875,447   Indemnity liability     1,218,263       1,382,408   Total Liabilities   $ 28,887,533     $ 33,505,598   Commitment and Contingencies (Note 13)                 Stockholders' Equity                 Convertible preferred stock, $.0001 par value, 1,250,000 shares authorized, 111 and 1,101 shares issued and outstanding on June 30, 2024, and December 31, 2023, respectively     -       -   Class A common stock, $.0001 par value, 130,000,000 shares authorized, 55,431,001 and 54,563,372 issued and outstanding on June 30, 2024, and December 31, 2023, respectively     5,545       5,458   Additional paid in capital     107,900,303       105,919,674   Retained deficit     (69,444,867 )     (71,569,821 ) Total Stockholders' Equity   $ 38,460,981     $ 34,355,311   Total Liabilities and Stockholders' Equity   $ 67,348,514     $ 67,860,909                     The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. SHF Holdings, Inc.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)                               For the three months ended June 30,     For the six months ended June 30,       2024     2023     2024     2023                             Revenue   $ 4,037,535     $ 4,572,508     $ 8,088,334     $ 8,752,887                                     Operating Expenses                                 Compensation and employee benefits   $ 2,264,931     $ 2,540,331     $ 4,544,969     $ 6,199,851   General and administrative expenses     1,001,764       1,852,589       1,985,984       3,391,463   Impairment of goodwill     -       13,208,276       -       13,208,276   Impairment of finite-lived intangible assets     -       3,680,463       -       3,680,463   Professional services     503,727       620,735       964,677       1,069,981   Rent expense     64,198       71,001       133,635       158,743   Provision (benefit) for credit losses     (97,248 )     511,880       (166,035 )     578,546   Total operating expenses   $ 3,737,372     $ 22,485,275     $ 7,463,230     $ 28,287,323   Operating income/ (loss)   $ 300,163     $ (17,912,767 )   $ 625,104     $ (19,534,436 ) Other income /(expenses)                                 Change in the fair value of deferred consideration