SHF Holdings, Inc. Q1 FY2024 earnings call

• Entered 2024 with expansive suite of financial compliance products/services. Focused on advancing newer lines of business to diversify income streams. Lending program is a natural extension as traditional banks are hesitant in cannabis financing. Loan income grew significantly, deposit base decreased due to master services agreement termination. Operating expense reduced by over 36% to $3.73 million in Q1 2024. Rescheduling of cannabis could be a catalyst for industry growth, attracting more capital and creating lending opportunities. Business fundamentals strong with positive net operating margins.

In the first quarter of 2024, loan income increased 250% year-over-year to $1.6 million, representing just over 40% of revenue. Depository fees decreased 28% to $1.62 million compared to $2.25 million in the first quarter of 2023. The loan book value nearly tripled year-over-year. The number of client accounts dropped from 1,040 as of March 31, 2023, to 757 as of March 31, 2024, negatively impacting depository fees.

• Expect to generate slightly better adjusted EBITDA on modestly higher revenue in 2024 compared to 2023 which had $3.6 million of adjusted EBITDA on $17.6 million of total revenue. Will provide updates to this guidance in subsequent earnings calls throughout the year.

• Traditional banks and credit unions remain hesitant to engage in cannabis financing with complex industry structure. If they do participate, loans often have high interest rates and less favorable terms. Market changes can impact deposit base as seen with the decrease in depository fees due to market conditions.

Q: A: Q: A: