Weeks after SHF Holdings, Inc., d/b/a Safe Harbor Financial After (Nasdaq : SHFS), the company boasted about having processed more than $25 billion dollars in cannabis related funds, its CEO left the company and the company now pauses its principal payments made to Partner Colorado Credit Union (“PCCU”) for its Senior Secured Promised Note.
PCCU stated in a written statement that the company has temporarily suspended the payment of principal for the months of February and March of 2025, while it is discussed by the parties a modification of the Note. In a statement, the company said that they are working on completing a note modification by February or March 2025.
Terry Mendez said that the Letter Agreement is PCCU’s promise to collaborate with Safe Harbor Financial as they develop solutions for us to expand, scale up and maximize our services. PCCU’s willingness in engaging these discussions shows our relationship. Our liquidity is estimated to increase by $510,000 as a result of the temporary suspension in principal payments.
CEO departure
Sundie Seifed, CEO of Safe Harbor, announced that she will retire within 30 days. Safe Harbor announced that it had signed a 3-year agreement for Terry Mendez, the co-CEO who would be named CEO after Seefried retires. Seefried, who will stay on the Board of Directors following the transition, is expected to remain in that position. The company changed its employment contract with Seefried in the third quarter.
Sinking ship
Safe Harbor warned its investors that the company was having financial problems in their last quarterly report, despite boasting about transactions. Safe Harbor said revenue in its quarter ended September fell 19.6%, while revenue related to deposit activity and customer onboarding dropped 26%. Investment income revenue for the quarter ended December 30th, 2024 was $475,000. This is a 60% decrease compared to the same period last year.
By the end of 2024 the company will have $5,861,475 of cash on hand and $2,520.441 of net working-capital deficit, compared with $4,888.769 of cash at the end of 2023 and $135.355 of net working-capital deficit.
Investors were told that there was significant doubt regarding the company’s ability to continue.
According to the report, the Abaca acquisition caused the problem because “the fair value of identifiable net assets acquired exceeded the purchase price.” The Abaca merger resulted in less accounts and the company had to go through litigation because of the $3 million that was owed.