Cover
Cover - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Apr. 10, 2023 | Jun. 30, 2022 | |
Document Type | 10-K | |||
Amendment Flag | false | |||
Document Annual Report | true | |||
Document Transition Report | false | |||
Document Period End Date | Dec. 31, 2022 | |||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2022 | |||
Current Fiscal Year End Date | --12-31 | |||
Entity File Number | 001-40524 | |||
Entity Registrant Name | SHF Holdings, Inc. | |||
Entity Central Index Key | 0001854963 | |||
Entity Tax Identification Number | 86-2409612 | |||
Entity Incorporation, State or Country Code | DE | |||
Entity Address, Address Line One | 1526 Cole Blvd. | |||
Entity Address, Address Line Two | Suite 250 | |||
Entity Address, City or Town | Golden | |||
Entity Address, State or Province | CO | |||
Entity Address, Postal Zip Code | 80410 | |||
City Area Code | (303) | |||
Local Phone Number | 431-3435 | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Non-accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | true | |||
Elected Not To Use the Extended Transition Period | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 609 | |||
Entity Common Stock, Shares Outstanding | 41,121,551 | |||
Documents Incorporated by Reference [Text Block] | Portions of the registrant’s definitive proxy statement pursuant to Regulation 14A for the 2023 Annual Meeting of Shareholders, to be filed within 120 days of the registrant’s fiscal year end, are incorporated by reference into Part III hereof. | |||
ICFR Auditor Attestation Flag | false | |||
Auditor Firm ID | 688 | 149 | ||
Auditor Name | Marcum | Elliott Davis, PLLC | ||
Auditor Location | Hartford, Connecticut | Franklin, Tennessee | ||
Common Class A [Member] | ||||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |||
Trading Symbol | SHFS | |||
Security Exchange Name | NASDAQ | |||
Redeemable Warrants [Member] | ||||
Title of 12(b) Security | Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | |||
Trading Symbol | SHFSW | |||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 8,390,195 | $ 5,495,905 |
Accounts receivable – trade | 1,401,839 | 522,896 |
Contract assets | 21,170 | 18,317 |
Prepaid expenses – current portion | 175,585 | 6,021 |
Accrued interest receivable | 40,266 | 7,556 |
Short-term loans receivable, net | 51,300 | 52,833 |
Other Current Assets | 150,817 | |
Total Current Assets | 10,231,172 | 6,103,528 |
Long-term loans receivable, net | 1,250,691 | 1,410,727 |
Property, plant and equipment, net | 49,614 | 6,351 |
Operating lease right to use assets | 1,016,198 | |
Goodwill | 19,266,276 | |
Intangible assets, net | 10,621,087 | |
Deferred tax asset | 51,593,302 | |
Prepaid expenses – long term position | 712,500 | |
Forward purchase receivable | 4,584,221 | |
Security deposit | 17,795 | |
Total Assets | 99,342,856 | 7,520,606 |
Current Liabilities: | ||
Accounts payable | 2,851,457 | 43,626 |
Accrued expenses | 6,354,485 | 129,546 |
Contract liabilities | 996 | 8,333 |
Lease liabilities – current | 20,124 | |
Deferred Consideration – current portion | 14,359,822 | |
Due to seller - current portion | 25,973,017 | |
Other current liabilities | 11,291 | |
Total Current Liabilities | 49,571,192 | 181,505 |
Warrant liability | 666,510 | |
Deferred Consideration – long term portion | 2,747,592 | |
Forward purchase derivative liability | 7,309,580 | |
Due to seller – long-term portion | 30,976,783 | |
Lease liabilities – long term | 1,008,109 | |
Deferred underwriter fee payable | 1,450,500 | |
Indemnity liability | 499,465 | |
Total Liabilities | 94,229,731 | 181,505 |
Commitment and Contingencies (Note 14) | ||
Parent-Entity Net Investment and Stockholders’ Equity | ||
Convertible preferred stock, $.0001 par value, 1,250,000 shares authorized, 14,616 shares issued and outstanding on December 31, 2022, and no shares issued and outstanding on December 31, 2021, respectively | 1 | |
Class A common stock, $.0001 par value, 130,000,000 shares authorized, 23,732,889 issued and outstanding on December 31, 2022, and no shares issued and outstanding on December 31, 2021, respectively | 2,374 | |
Additional paid in capital | 44,806,031 | |
Retained earnings | (39,695,281) | |
Parent-Entity Net Investment | 7,339,101 | |
Total Parent-Entity Net Investment and Stockholders’ Equity | 5,113,125 | 7,339,101 |
Total Liabilities and Parent-Entity Net Investment and Stockholders’ Equity | $ 99,342,856 | $ 7,520,606 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 1,250,000 | 1,250,000 |
Convertible preferred stock, shares issued | 14,616 | 0 |
Convertible preferred stock, shares outstanding | 14,616 | 0 |
Class A common stock, par value | $ 0.0001 | $ 0.0001 |
Class A common stock, shares authorized | 130,000,000 | 130,000,000 |
Class A common stock, shares issued | 23,732,889 | 0 |
Class A common stock, shares outstanding | 23,732,889 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 9,478,819 | $ 7,005,579 |
Operating Expenses | ||
Compensation and employee benefits | 6,695,319 | 2,135,243 |
General and administrative expenses | 2,390,539 | 567,892 |
Professional services | 1,985,343 | 292,143 |
Rent expense | 99,246 | 73,482 |
Provision for loan losses | 506,212 | 1,399 |
Corporate allocations | 648,533 | |
Total operating expenses | 11,676,659 | 3,718,692 |
Operating (loss)/ income | (2,197,840) | 3,286,887 |
Other (income) expenses | ||
Interest expense | 802,797 | |
Change in fair value of warrant liability | (939,019) | |
Change in fair value of forward purchase agreement | 33,322,248 | |
Change in fair value of forward purchase option derivative | 8,997,110 | |
Total other (income) expenses | 42,183,136 | |
Net (loss) / income before income tax | (44,380,976) | 3,286,887 |
Provision for income taxes | (9,252,893) | |
Net (loss)/income | $ (35,128,083) | $ 3,286,887 |
Weighted average shares outstanding, basic | 18,988,558 | |
Basic net loss per share | $ (1.85) | |
Weighted average shares outstanding, diluted | 18,988,558 | |
Diluted net loss per share | $ (1.85) |
Consolidated Statements of Pare
Consolidated Statements of Parent-Entity Net Investment and Stockholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] Common Class A [Member] | Additional Paid-in Capital [Member] | Parent-Entity Net Investment [Member] | Retained Earnings [Member] | Total |
Beginning balance value at Dec. 31, 2020 | $ 4,354,021 | $ 4,354,021 | ||||
Beginning balance, shares at Dec. 31, 2020 | ||||||
Net income (loss) | 3,286,887 | 3,286,887 | ||||
Contribution of loan receivable from Parent | 1,185,691 | 1,185,691 | ||||
Net change due to allocations and distributions to Parent | (1,487,498) | (1,487,498) | ||||
Ending balance value at Dec. 31, 2021 | 7,339,101 | 7,339,101 | ||||
Ending balance, shares at Dec. 31, 2021 | ||||||
Net income (loss) | 1,650,198 | (36,778,281) | (35,128,083) | |||
Issuance of shares in connection with Business Combination and PIPE offering, net of issuance costs | $ 2 | $ 1,872 | 29,327,087 | (7,339,101) | 21,989,860 | |
Issuance of shares in connection with Business Combination and PIPE offering, net of issuance costs, shares | 20,450 | 18,715,912 | ||||
Acquisition of Abaca | $ 210 | 8,105,701 | 8,105,911 | |||
Acquisition of Abaca, Acquisitions, shares | 2,099,977 | |||||
Conversion of PIPE Shares | $ (1) | $ 292 | 2,916,709 | (2,917,000) | ||
Conversion of PIPE Shares, shares | (5,834) | 2,917,000 | ||||
Stock option conversion | 2,806,336 | 2,806,336 | ||||
Ending balance value at Dec. 31, 2022 | $ 1 | $ 2,374 | $ 44,806,031 | $ (39,695,281) | $ 5,113,125 | |
Ending balance, shares at Dec. 31, 2022 | 14,616 | 23,732,889 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) / income | $ (35,128,083) | $ 3,286,887 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 189,274 | 1,921 |
Stock compensation expense | 2,806,336 | |
Interest expense | 802,797 | |
Provision for loan loss | 506,212 | 1,399 |
Deferred tax credit | (9,252,893) | |
Change in fair value of warrant and forward purchase option derivative liabilities | 41,380,339 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (653,425) | (293,355) |
Contract assets | (2,853) | |
Prepaid expenses | 55,997 | (3,468) |
Forward purchase receivables | 1,379,285 | |
Accrued interest receivable | (32,711) | (7,556) |
Deferred underwriting payable | (715,750) | |
Other current assets | (150,817) | |
Accounts payable | 508,544 | (64,900) |
Accrued expenses | 17,550 | 37,742 |
Contract Liabilities | (7,337) | |
Security deposit | (5,085) | |
Deferred revenue | (12,287) | |
Net cash provided by operating activities | 1,697,380 | 2,946,383 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (17,318) | (5,920) |
Change in loan receivable, net | 161,569 | 1,041,577 |
Acquisition of Abaca | (3,041,680) | |
Net cash provided by (used in) investing activities | (2,897,429) | 1,035,657 |
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||
Proceeds from reverse capitalization, net of transaction costs | 4,094,339 | |
Net change in parent funding, allocations, and distributions to parent | (1,487,498) | |
Net cash provided by (used in) financing activities | 4,094,339 | (1,487,498) |
Net increase in cash and cash equivalents | 2,894,290 | 2,494,542 |
Cash and cash equivalents - beginning of period | 5,495,905 | 3,001,363 |
Cash and cash equivalents - end of period | 8,390,195 | 5,495,905 |
Non-Cash transactions: | ||
Shares issued for the settlement of abaca acquisition | 8,105,911 | |
Operating lease right of use assets recognized | 1,029,227 | |
Operating lease liabilities recognized | 1,022,380 | |
Contribution of loan receivable from Parent | $ 1,185,691 |
Organization and Business Opera
Organization and Business Operations | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Business Operations | 1. Organization and Business Operations Business Description The Company originated as business operations conducted through PCCU, which were transferred to SHF. LLC (“SHF”), then an indirect wholly owned subsidiary of PCCU. SHF Holdings, Inc. (the “Company”), formerly known as Northern Lights Acquisition Corp. (“NLIT”), acquired all of the outstanding membership interests of SHF in a transaction that closed on September 28, 2022 (the “Business Combination”). The Business Combination was consummated pursuant to a Unit Purchase Agreement dated February 11, 2022 (the “Business Combination Agreement”) among SHF, SHF Holding Co., LLC (the direct parent of SHF and a wholly owned subsidiary of PCCU), PCCU and NLIT, a special purpose acquisition company, and its sponsor, 5AK, LLC. Subsequent to the completion of the Business Combination, NLIT changed its name to “SHF Holdings, Inc.” In this Annual Report on Form 10-K (the “Annual Report”), we use the terms “we,” “us,” “our” and the “Company” to refer to the business and operations of SHF Holdings, Inc. following the closing of the Business Combination. (Refer to Note 3 to the Consolidated Financial Statements.) SHF was formed by PCCU following the approval of the contribution of certain assets and operating activities associated with operations from both certain branches and Safe Harbor Services, a wholly-owned subsidiary of PCCU, to SHF Holding, Co., LLC. SHF Holding, Co., LLC then contributed the same assets and related operations to SHF, with PCCU’s investment in SHF maintained at the SHF Holding, Co., LLC level (the “reorganization”). The reorganization effectively occurred July 1, 2021. In conjunction with the reorganization, all of the employees engaged in the operations contributed and certain PCCU employees were terminated from PCCU and hired as SHF employees. Collectively, oldco, the relevant operations of the PCCU branches, and SHF, represent the “Carved-Out Operations.” After the reorganization, the entirety of the Carved-Out Operations were owned by SHF and oldco was dissolved. In addition, effective July 1, 2021, SHF entered into an Account Servicing Agreement and Support Services Agreement with PCCU, which memorialized the operational relationship between SHF and PCCU and which were subsequently amended and restated and are discussed in Note 9 to the Consolidated Financial Statements. On September 28, 2022, the parties consummated the Business Combination, resulting in NLIT acquiring all of the issued and outstanding membership interests of SHF in exchange for an aggregate of $ 185,000,000 , consisting of (i) 11,386,139 shares of the Company’s Class A common stock with an aggregate value equal to $ 115,000,000 and (ii) $ 70,000,000 in cash, $ 56,949,801 1,831,683 shares of the Class A Common Stock were deposited with an escrow agent to be held in escrow for a period of 12 months following the closing date to satisfy potential indemnification claims of the parties. In addition, $ 3,143,388 in cash and cash equivalents representing the amount of cash on hand at July 31, 2021, less accrued but unpaid liabilities, were also paid to PCCU at the closing. For more information about the Business Combination, refer to Note 3 to the Consolidated Financial Statements included elsewhere in this Form 10-K. As a result of the Business Combination, PCCU is now the Company’s largest stockholder, owning 43.2 The Business Combination Agreement was amended to provide for the deferral of a portion of the cash due to PCCU at the closing of the Business Combination. The purpose of this deferral was to provide the Company with additional cash to support its post-closing activities. Furthermore, PCCU also agreed to defer $ 3,143,388 On October 26, 2022, SHF Holdings, Inc., entered into a Forbearance Agreement (the “Forbearance Agreement”) with PCCU and Luminous Capital USA Inc. The Company generates both interest income and fee income through providing a variety of services to financial institutions desiring to service the cannabis industry including, among other things, Bank Secrecy Act and other regulatory compliance and reporting, onboarding, responding to account inquiries, responding to customer service inquiries relating to CRB depository accounts held at PCCU, and sourcing and managing loans. In addition to PCCU, the Company provides these similar services and outsourced support to other financial institutions providing banking to the cannabis industry. These services are provided to other financial institutions under the Safe Harbor Master Program Agreement. On March 29, 2023, the Company and PCCU entered into a definitive transaction (Refer to Note 22, “Subsequent Events,” of the consolidated financial statements) to settle and restructure the deferred obligations, including $ 56,949,800 14,500,000 4.25 11,200,000 On October 31, 2022, the Company entered into an Agreement and Plan of Merger (the “Abaca Merger Agreement”) by and among the Company, SHF Merger Sub I, a Delaware corporation and a direct wholly-owned subsidiary of the Company (“Merger Sub I”), SHF Merger Sub II, LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of the Company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”), Rockview Digital Solutions, Inc., a Delaware corporation, d/b/a Abaca (“Abaca”) and Dan Roda, solely in such individual’s capacity as the representative of the security holders of Abaca (the “Abaca Stockholders’ Representative”). On November 11, 2022, the parties to the Abaca Merger Agreement entered into an amendment to the Abaca Merger Agreement to modify the number of shares of the Company’s Class A Common Stock to be issued as consideration thereunder. On November 15, 2022, the parties consummated the transactions contemplated by the Abaca Merger Agreement, as amended. Pursuant to the Abaca Merger Agreement, as amended, (a) Merger Sub I merged with and into Abaca, with Abaca surviving as a direct wholly-owned subsidiary of the Company (“Merger I”) and (b) immediately following the effective time of the Merger I, Abaca merged with and into Merger Sub II (“Merger II” and, collectively with Merger I, the “Mergers”), with Merger Sub II surviving Merger II as a direct wholly-owned subsidiary of the Company. Pursuant to the Abaca Merger Agreement, as amended, the Company acquired Abaca in exchange for $ 30,000,000 9,000,000 3,000,000 3,000,000 2,100,000 12,600,000 500,000 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2. Basis of Presentation and Summary of Significant Accounting Policies i. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Material estimates that are particularly subject to change in the near term include the determination of the allowance for loan losses, indemnification liabilities, useful lives of intangibles and the fair value of financial instruments. Actual results could differ from the estimates. ii. Basis of Presentation Consolidated Financial statements have not historically been prepared for the Carved-Out Operations. For the year ended December 31, 2021, the Consolidated financial statements consist of the balances of SHS and SHF as prepared on a stand-alone basis and the balances of the Branches on a “carve-out” basis. For the year ended December 31, 2022, the consolidated financial statements represent SHF on a stand-alone basis as the period is post reorganization, and wholly owned subsidiary Abaca. All intercompany transactions have been eliminated for all periods presented. These consolidated financial statements reflect the Company’s historical financial position, results of operations and cash flows as they have been historically managed in conformity with GAAP. All depository asset accounts and liabilities are retained by PCCU as the Carved-Out Operations are not organized as a chartered financial institution. Accordingly, none of the cash of PCCU has been attributed to these consolidated financial statements. Asset and liabilities maintained by SHS and SHF have been included in these consolidated financial statements along with any specific assets and liabilities associated with the Branches. Revenue and expenses for the Branches were included based on specific identification as they relate to customer deposits, professional services, compensation and employee benefits, rent expense, provision for loan losses and other general and administrative expenses. Corporate allocations such as information technology, customer support, marketing, executive compensation and other general and administrative expenses are attributed to the Branches proportionately based on the size of the specifically identifiable CRB’s deposit balances, deposit activity and accounts relative to the totals of the consolidated PCCU entity. This allocation method was consistent for all periods prior to July 2021. Beginning in July 2021, a services agreement was entered into between SHF LLC and PCCU (see Note 9 to the consolidated financial statements). In exchange for services provided to PCCU via the Carved-Out Operations, SHF LLC receives 100% of CRB related revenue. PCCU receives (and SHF LLC pays) a monthly per account fee, split loan servicing fees and split investment income associated with Carved-Out Operations depository accounts. The fees are meant to represent PCCU’s cost for hosting depository accounts and funding related loans and providing certain limited infrastructure support. Management has considered the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefits received by the Branches during the periods presented. All revenue and expenses of SHS and SHF are specific to the entity. Corporate allocations were attributed for year ended December 2021. iii. Liquidity and Going Concern As of December 31, 2022, the Company had $ 8,390,195 39,340,020 5,495,905 5,922,023 25,973,017 14,359,822 Based upon these factors, management of the Company has determined that there is a risk of substantial doubt about the Company’s ability to continue as a going concern Management mitigated the going concern risk by renegotiating its aforementioned payable with PCCU (refer to the “Subsequent Events” disclosure within Note 22 of the consolidated financial statements herein), thus reducing the working capital deficit and certain other liabilities. The Company also hired an experienced Chief Financial Officer in October 2022, who has immediately begun to institute certain cost-cutting measures across the Company, including expense reduction measures and negotiating reduced amounts and extended terms for certain payables. These factors, however, do not fully remove substantial doubt regarding the Company’s ability to continue as a going concern that has been identified. 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 audited 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. iv. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from financial institutions, and investments with maturities of three months or less. v. Concentrations of Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash. Cash balances are maintained principally in accounts at PCCU which is insured by the National Credit Union Share Insurance Fund (“NCUSIF”) up to regulatory limits. From time to time, cash balances may exceed the NCUSIF insurance limit. The Company has not experienced any credit losses associated with its cash balances in the past. Currently the Company only services the cannabis industry. Cannabis remains illegal under federal law, and therefore, strict enforcement of federal laws regarding cannabis would likely result in our inability to execute our business plan. Currently the Company substantially relies on PCCU to hold customer deposits and fund its originated loans. As of this time, substantially all of the Company’s revenue is generated by deposits and loans hosted by its PCCU pursuant to various services agreements. The Company had 4 loans on its balance sheet as of December 31, 2022; each of these loans is in excess of 10 10 vi. Accounts Receivable-PCCU and Allowance for Doubtful Accounts Accounts receivable are recorded based on account fee schedules. While fees are generated from individual CRB related accounts, amounts are initially collected by the financial institutional partners and remitted in the subsequent month. As of December 31, 2022, and December 31, 2021, 85 100 At December 31, 2022 and December 31, 2021, there were no vii. Loans Receivable PCCU underwrites mortgage, commercial and consumer loans to members and other businesses. Commercial CRB loans originated by the Company and funded by PCCU are typically managed by the Company, inclusive of originated and funded loans that are on the PCCU balance sheet only. Certain CRB Loans were contributed to the Carved-out Operations. Such loans where the Company has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at principal balance outstanding, net of an allowance for loan losses and net deferred loan origination fees and costs when applicable. Interest income on loans is recognized over the term of the loan and is calculated using the simple-interest method on principal amounts outstanding. Interest income is not reported when full loan repayment is in doubt, typically when the loan is impaired, or payments are past due ninety days or more. All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts are satisfied to where the loan is less than ninety days past due and future payments are reasonably assured. Loans are evaluated for charge-off on a case-by-case basis and are typically charged off at the time of foreclosure. Past-due status is based on the contractual terms of the loans. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if the collection of principal and interest is considered doubtful. viii. Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased by the provision for loan losses and decreased by charge-offs less recoveries. Management estimates the required allowance for loan losses balance using past loan loss experience, known and inherent risks in the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. The general component covers non-classified loans and is based on historical loss experience adjusted for current factors. Due to the nature of uncertainties related to any estimation process, management’s estimate of loan losses inherent in the loan portfolio may change in the near term. However, the amount of the change that is reasonably possible cannot be estimated. A loan is considered impaired when, based on current information and events, full payment under the loan terms is not expected. Impairment is generally evaluated in total for smaller-balance loans of similar nature such as commercial lines of credit, but may be evaluated on an individual loan basis if deemed necessary. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. The loans SHF intends to originate will be secured by various types of assets of the borrowers, including real property and certain personal property, including value associated with other assets to the extent permitted by applicable laws and the regulations governing the borrowers. The documents governing the loans also include a variety of provisions intended to provide remedies against the value associated with licenses. Collection procedures are designed to ensure that neither SHF nor its financial institution clients who provide funding for a loan, nor a third-party agent engaged to assist with the liquidation or foreclosure process, will take possession of cannabis inventory, cannabis paraphernalia, or other cannabis-related assets, nor will they take title to real estate used in cannabis-related businesses. Upon default of a loan, a third-party agent will be engaged to work with the borrower to have the borrower sell collateral securing the loan to a third party or to institute a foreclosure proceeding to have such collateral sold to generate funds towards the payoff of the loan. Applicable regulations under state law that govern CRBs generally do not permit the taking of title to real estate involved in commercial sales of cannabis, whether through foreclosure or otherwise, without prior regulatory approval. The sale of a license or other realization of the value of licenses also requires the approval of state and local regulatory authorities. A defaulted loan may also be sold if such a sale would yield higher proceeds or that a sale could be accomplished more quickly than a foreclosure proceeding while yielding proceeds comparable to what would be expected from a foreclosure sale. Such sale of the loan would be conducted through a third-party administrative agent. However, SHF can provide no assurances that a sale of such loans would be possible or that the sales price of such loans would be sufficient to recover the outstanding principal balance, accrued interest, and fees. ix. Net Deferred Loan Origination Fees and Cost When included with a new loan origination, the Company receives loan origination fees in conjunction with new loans funded and any indemnified liabilities which are not recorded on the balance sheet from our financial institution partners. Where applicable, the loan origination fee is netted with loan origination costs associated with originating a specific loan. These loan origination costs are typically incremental direct costs (non-reimbursed) paid to third parties. Net loan origination fees are initially deferred and recognized as interest income utilizing the interest method. x. Indemnity Liability Effective February 11, 2022, SHF entered into a Loan Servicing Agreement with PCCU. Under the Loan Servicing Agreement, PCCU, in exchange for a fee at an annual rate of 0.25 ASC”) 450-20 Loss Contingencies In addition to default-related loan losses, SHF continuously monitors all other circumstances pursuant to the agreement and identifies events that may necessitate a loss contingency under the Loan Servicing Agreement. A loss contingency is reported when it is both probable that a future event will confirm that a loss had been incurred on or before the related balance sheet date and the loss is reasonably estimable. xi. Property and Equipment, net Property and equipment are recorded at historical cost, net of accumulated depreciation. Depreciation is provided over the assets’ useful lives on a straight-line basis - 4 5 Management periodically assesses the estimated useful life over which assets are depreciated or amortized. If the analysis warrants a change in the estimated useful life of property and equipment, management will reduce the estimated useful life and depreciate or amortize the carrying value prospectively over the shorter remaining useful life. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the period of disposal and the resulting gains and losses are included in the results of operations during the same period. We capitalize certain costs related to software developed for internal-use, primarily associated with the ongoing development and enhancement of our technology platform. Costs incurred in the preliminary development and post-development stages are expensed. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally five years. xii. Right of use assets and lease liability The Company has entered into lease agreements for a certain facility and certain items of equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. At inception of the lease agreement, the Company assesses whether the agreement conveys the right to control the use of an identified asset for a period in exchange for consideration, in which case it is classified as a lease. Each lease is further analysed to check whether it meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated balance sheet with a corresponding lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. The Company has elected not to recognize lease assets and lease liabilities for short-term leases (leases with a term of 12 months or less) and leases of low-value assets. Lease right-of-use assets, net and lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available as of the lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Finance lease interest expense is recognized based on an effective interest method and depreciation of assets is recorded on a straight-line basis over the shorter of the lease term and useful life of the asset. Both operating and finance lease right of use assets are reviewed for impairment, consistent with other long-lived assets, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. After a right of use asset is impaired, any remaining balance of the asset is amortized on a straight-line basis over the shorter of the remaining lease term or the estimated useful life. xiii. Impairment of Long-Lived Assets The Company evaluates the recoverability of tangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. There were no xiv. Goodwill and Other Intangible Assets The Company’s methodology for allocating the purchase price of an acquisition is based on established valuation techniques that reflect the consideration of a number of factors, including a valuation performed by a third-party appraiser. Goodwill is measured as the excess of the cost of an acquired business over the fair value assigned to identifiable assets acquired and liabilities assumed. Goodwill is considered impaired when the estimated fair value of the reporting unit that was allocated the goodwill is less than its carrying value. If the estimated fair value of such reporting unit is less than its carrying value, goodwill impairment is recognized based on that difference, not to exceed the carrying amount of goodwill. A reporting unit is an operating segment or a component of an operating segment provided that the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. Finite-lived intangible assets are amortized over their estimated useful life, which is the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the Company. Intangible assets should be tested for impairment at the time of a triggering event, if one were to occur. Finite-lived intangible assets may be impaired when the estimated undiscounted future cash flows generated from the assets are less than their carrying amounts. xv. Stock-based Compensation The Company measures all equity-based payment arrangements to employees and directors in accordance with ASC 718, Compensation–Stock Compensation. The Company’s stock-based compensation cost is measured based on the fair value at the grant date of the stock-based award. It is recognized as expense on a straight-line basis over the requisite service period for the entire award. Forfeitures are recognized as they occur. The Company estimates the fair value of each stock-based award on its measurement date using either the current market price of the stock or Black-Scholes option valuation model, whichever is most appropriate. The Black-Scholes valuation model incorporates assumptions such as expected term of the instrument, volatility of the Company’s future share price, risk free rates, future dividend yields and estimated forfeitures at the initial grant date, by reference to the underlying terms of the instrument, and the Company’s experience with similar instruments. Changes in assumptions used to estimate fair value could result in materially different results. The shares of the Company were listed on the stock exchange for a limited period of the time and also the stock price has dropped significantly from the date of listing, based on which the Company has considered the expected volatility at 100 xvi. Fair Value Measurements The Company utilizes the fair value hierarchy to apply fair value measurements. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair values that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The basis for fair value measurements for each level within the hierarchy is described below: Level 1 — Quoted prices for identical assets or liabilities in active markets. Level 2 — Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 —Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are unobservable. xvii. Revenue Recognition SHF recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which SHF expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Revenue is recorded at a point in time when the performance obligation is satisfied, and no contingencies exist. Revenue consists primarily of fees earned on deposit accounts held at PCCU but serviced by SHF such as bank account charges, onboarding income, account activity fee income and other miscellaneous fees. In addition, SHF recognizes revenue from the Master Program Agreement. The Master Program Agreement is a non-exclusive and non-transferable right to implement and utilize the Safe Harbor Program. The Safe Harbor Program has two performance obligations; an implementation fee recognized when the contract is effective and a service fee recognized ratable over the contract term as the compliance program is executed. Lastly, SHF also records revenue for interest on loans and investment income allocated by PCCU based on specific customer balances. Amounts received in advance of the service being provided is recorded as a liability under deferred revenue on the consolidated balance sheets. Typical Safe Harbor Program contracts are three-year contracts with amounts due monthly, quarterly or annually based on contract terms. Customers consist of financial institutions providing services to CRBs. Revenues are concentrated in the United States. xviii. Contract Assets / Contract Liabilities A contract asset is the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer. Conversely, the Company recognizes a contract liability if the customer’s payment of consideration precedes the reporting entity’s performance. As of December 31, 2022, the Company reported contract assets and contract liabilities of $ 21,170 996 18,317 8,333 8,333 xix. Advertising/Marketing Costs Advertising/marketing costs are expensed as incurred. For the years ended December 31, 2022, and December 31, 2021, advertising/marketing costs were $ 380,669 74,282 xx. Warrants Liability The Company accounts for the warrants assumed in the business combination in accordance with the guidance contained in ASC Topic 815, “Derivatives and Hedging” (“ASC 815”), under which warrants that do not meet the criteria for equity classification and must be recorded as derivative liabilities. Accordingly, the Company classifies the warrants as liabilities carried at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the consolidated statement of operations. xxi. Forward purchase derivative The Company accounts for the forward purchase derivative assumed in the business combination in accordance with the guidance contained in ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The Company classifies the forward purchase derivative as an asset or liability carried at fair value and adjusts the forward purchase derivative to fair value at each reporting period. This derivative asset or liability is subject to re-measurement at each balance sheet date until the conditions under the forward purchase agreement are exercised or expire, and any change in fair value is recognized in the consolidated statement of operations. xxii. Earnings Per Share Basic and diluted earnings per share are computed and disclosed in accordance with ASC Topic 260, Earnings Per Shares. The Company utilizes the two-class method to compute earnings available to common shareholders. Under the two-class method, earnings are adjusted by accretion amounts to redeemable noncontrolling interests recorded at redemption value. The adjustments represent dividend distributions, in substance, to the noncontrolling interest holder as the holders have contractual rights to receive an amount upon redemption other than the fair value of the applicable shares. As a result, earnings are adjusted to reflect this in substance distribution that is different from other common shareholders. In addition, the Company allocates net earnings to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company’s participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders (Refer to Note 16). Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards. xxiii. Income Tax Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are adjusted through the provision for income taxes as changes in tax laws or rates are enacted. Prior to the merger, the Company was a pass-through entity for tax purposes. Effective September 28, 2022, the Company complies with the accounting and reporting requirements of ASC Topic 740, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. PCCU was exempt from most federal, state, and local taxes under the provisions of the Internal Revenue Code and state tax laws. However, PCCU was subject to unrelated business income tax. The Carved-Out Operations were wholly owned by PCCU and therefore, were exempt from most federal and state income taxes. The ASC Topic 740, “Income Taxes,” under US GAAP clarifies accounting for uncertainty in income taxes reported in the financial statements. The interpretation provides criteria for assessment of individual tax positions and a process for recognition and measurement of uncertain tax positions. Tax positions are evaluated on whether they meet the “more likely than not” standard for sustainability on examination by tax authorities. The Company’s Management has determined there are no material uncertain tax positions. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods. If management is unable to estimate a portion of its ordinary income, but is otherwise able to reliably estimate the remainder, ASC 740-270-25-3 provides that the tax applicable to that item be reported in the interim period in which the item occurs. The tax (or benefit) related to ordinary income (or loss) shall be computed at an estimated annual effective tax rate and the tax (or benefit) related to all other items shall be individually computed and recognized when the items occur. Management is unable to estimate a portion of its ordinary income and as a result had computed the company’s tax provision in accordance with ASC 740-270-25-3. The Company’s effective tax rate was 20.85 0.00 21 ASC Topic 740 also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no no xxiv. Offering Costs Offering costs consisted of legal, accounting, underwriting fees and other costs incurred that were directly related to the PIPE offering. Offering costs are allocated to the separable financial instruments issued based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred, presented as offering costs allocated to warrants in the statements of operations. Offering costs associated with the Public Shares were charged to Parent-Entity Net Investment and Stockholders’ Equity upon the completion of the Initial Public Offering. xxv. Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective are not expected to have a material impact on the Company’s financial position or results of operations upon adoption. Adopted Standards Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Note 3. Business Combination The Business Combination detailed in Note 1 above was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, NLIT is treated as the acquired company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of SHF issuing shares for the net assets of NLIT, accompanied by a recapitalization. The net assets of NLIT are recognized at fair value (which was consistent with carrying value), with no goodwill or other intangible assets recorded. Other related events in connection with the Business Combination are summarized below: ● The 2,875,000 ● Upon closing of the Business Combination, 11,386,139 The seller was due to receive a cash payment of $ 3.1 ● Offering costs consisted of legal, accounting, underwriting fees and other costs incurred that were directly related to the business combination was approximately $ 10.85 ● Approximately $ 56.9 70.0 21.9 35.0 6.4 4.71 1,200,000 ● The Parent-Entity Net Investment appearing in the balance sheet of SHF amounting to $ 9,124,297 ● Immediately prior to the Closing, 20,450 20,450,000 2,045,000 10.00 ● For tax purposes, the transaction is treated as a taxable asset acquisition, resulting in an estimated tax basis Goodwill balance of $ 44,102,572 ● Preferred Stock: The Company is authorized to issue 1,250,000 0.0001 14,616 no 10.00 80% of the volume weighted average price of the Class A Common Stock for the prior five trading days and (ii) $2.00 (the “Floor Price”), provided that, so long as a preferred stock holders continues to hold any preferred shares, such preferred stock holder will be entitled to receive the aggregate shares of Class A Common Stock that would be issuable based upon its initial purchase of preferred stock at the adjusted Conversion Price 2.00 1.25 20 ● Class A Common Stock: The Company is authorized to issue up to 130,000,000 0.0001 23,732,889 0 3,667,377 ● The fair value of net assets on September 28,2022 in the books of NLIT are as follows: Schedule of Fair Value Net Assets Cash & Cash Equivalents $ 2,879 Prepaid Expense 15,000 Cash held in Trust 118,738,861 Deferred offering cost 266,240 Accounts Payable (1,374,021 ) Accrued Expense (1,202,164 ) Advance from sponsor (1,150,000 ) Deferred underwriter payable (4,025,000 ) Forward purchase derivative (795,942 ) Warrant Liability (1,394,453 ) Class A Common Stock subject to possible redemption (79,259,819 ) Fair value of net assets acquired $ 29,821,581 ● The following table summarizes the total fair value of consideration: Schedule of Fair Value Consideration Company’s Class A common stock comprises of 11,386,139 $ 115,000,000 Cash consideration 13,050,199 Deferred cash consideration 56,949,801 Total fair value of consideration $ 185,000,000 ● Parent-Entity Net Investment: Parent-Entity Net Investment balance in the consolidated balance sheets represents PCCU’s historical net investment in the Carved-Out Operations. For purposes of these consolidated financial statements, investing requirements have been summarized as “Parent-Entity Net Investment” and represent equity as no cash settlement with PCCU is required. No separate equity accounts are maintained for SHS, SHF or the Branches. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition | Note 4. Acquisition On November 15, 2022, the Company and its subsidiary entered into a series of merger and acquisition transactions resulting in the acquisition of 100.00 500,000 The acquisition increases the Company’s customer base to include more than 1,000 unique depository accounts across 40 states and U.S. territories; adds Abaca’s fintech platform to the Company’s existing technology; increases the Company’s financial institution client relationships and access to balance sheet capacity to five unique financial institutions strategically located across the United States; increases the Company’s lending capacity; and nearly doubles the Company’s team, adding to the existing talent pool of the cannabis industry’s foremost financial services and financial technology experts. Pursuant to the Abaca merger agreement, as amended, the Company acquired Abaca in exchange for $ 30,000,000 (a) cash consideration in an amount equal to (i) $ 9,000,000 3,000,000 3,000,000 (b) Common Stock equal to the lesser of (1) 2,100,000 12,600,000 500,000 The Company measures the deferred cash consideration and future stock consideration at fair value on the acquisition date based on report received from independent valuation firm. The following table summarizes the purchase price allocation: Schedule of Purchase Price Allocation Property, plant & equipment $ 27,117 Software 9,189 Cash & cash equivalents 245,524 Prepaid expense 23,061 Security deposit 675 Accounts receivables 232,265 Accounts Payable (206,508 ) Accrued Expense (235,894 ) Fair value of net assets acquired $ 95,429 Other intangibles 10,800,000 Goodwill 19,266,276 Deferred tax liabilities (1,758,769 ) Total purchase consideration $ 28,402,936 The following table summarizes the total fair value of consideration: Schedule of Fair Value Consideration Cash paid $ 2,763,800 Deferred cash payment 5,452,424 Share issued – common stock ( 2,099,977 8,105,911 Settlement of pre-existing notes along with accrued interest 523,404 Future consideration settled in common stock 11,557,397 Fair value of consideration $ 28,402,936 At the date of acquisition, management allocated the initial purchase price based on the estimated fair value of the identifiable assets and liabilities assumed on the acquisition date. The pre-existing relationships settled were the Company’s notes and related accrued interest with Abaca. Subsequently, the Company finalized the purchase price allocation and has adjusted the provisional values retrospectively to reflect changes to the assets and liabilities at the acquisition date. For the fair value of the identifiable intangible assets acquired, the Company used an income-based approach, which involves estimating the future net cash flows and applies an appropriate discount rate to those future cash flows. The following table summarizes the final adjustments made to the provisional purchase price allocation. Intangible assets are recorded at estimated fair value, as determined by management based on available information which includes a valuation prepared by an independent third party. The fair values assigned to identifiable intangible assets were determined through the use of the income approach and multi-period excess earnings methods. The major assumptions used in arriving at the estimated identifiable intangible asset values included management’s estimates of future cash flows, discounted at an appropriate rate of return which is based on the weighted average cost of capital for both the company and other market participants. The useful lives for intangible assets were determined based upon the remaining useful economic lives of the intangible assets that are expected to contribute directly or indirectly to future cash flows. The estimated fair value of intangible assets and related useful lives as included in the purchase price allocation include: Schedule of Intangible Assets and Related Useful Lives as Included in Purchase Price Allocation Amount Useful life in Years Market related intangible assets $ 2,100,000 8 Customer relationships 2,000,000 10 Developed technology 6,700,000 10 Fair value of consideration $ 10,800,000 Goodwill has been recognized as a result of the specialized assembled workforce at Abaca. Sales revenues of $ 491,149 257,967 Had the acquisition of Abaca occurred on January 1, 2022, there would not have been a significant impact on the consolidated operating sales revenues and net earnings for the year ended December 31, 2022. Acquisition costs of $ 236,200 Unaudited Supplemental Pro Forma Information The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2022, the earliest period presented herein: Schedule of Proforma Information of Operations For the Year Ended December 31, 2022 2021 Revenue $ 12,565,608 $ 10,606,011 Net Income (Loss) (37,720,687 ) 2,922,213 |
Goodwill and other intangibles
Goodwill and other intangibles | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangibles | Note 5. Goodwill and other intangibles Goodwill acquired in connection with the acquisition on November 16, 2022, is not amortized, but instead evaluated for impairment on an annual basis at the end of the fiscal year, or more frequently if events or circumstances indicate that impairment may be more likely than not. During the year ended December 31, 2022, no The change in the carrying amount of goodwill from December 31, 2021, to December 31, 2022, is as follows: Schedule of Carrying Amount of Goodwill December 31, 2021 $ - Acquisition of Abaca 19,266,276 December 31, 2022 $ 19,266,276 The Company has elected November 15 as the date for annual impairment testing or as necessary for triggering events. No impairment was recognized during the years ended December 31, 2022 and 2021. The Company’s finite lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Following is a summary of the Company’s finite-lived intangible assets as of December 31, 2022. Schedule of Finite Lived Intangible Assets Acquired in acquisition Amortization Finite-lived intangible assets, net Remaining Useful life in Years December 31, 2021 Acquired in acquisition Amortization December 31, 2022 Market related intangible assets 8 - $ 2,100,000 $ 33,082 $ 2,066,918 Customer relationships 10 - 2,000,000 25,205 1,974,795 Developed technology 7 - 6,700,000 120,626 6,579,374 Total intangible assets $ 10,800,000 $ 178,913 $ 10,621,087 |
Loans Receivable
Loans Receivable | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Loans Receivable | Note 6. Loans Receivable Commercial real estate loans receivable, net consist of the following: Schedule of Commercial Real Estate Loans Receivable December 31, 2022 December 31, 2021 Commercial real estate loans receivable, gross $ 1,432,560 $ 1,478,301 Less: loan origination charges (109,081 ) - Commercial real estate loans receivable, net 1,323,479 1,478,301 Allowance for loan losses (21,488 ) (14,741 ) Commercial real estate loans receivable, net 1,301,991 1,463,560 Current portion (51,300 ) (52,833 ) Noncurrent portion $ 1,250,691 $ 1,410,727 Allowance for Loan Losses The allowance for loan losses is maintained at a level believed to be sufficient to provide for estimated loan losses based on evaluating known and inherent risks in the loan portfolio. The allowance is provided based upon management’s analysis of the pertinent factors underlying the quality of the loan portfolio. These factors include changes in the amount and composition of the loan portfolio, delinquency levels, actual loss experience, current economic conditions, and detailed analysis of individual loans for which the full collectability may not be assured. The detailed analysis includes methods to estimate the fair value of loan collateral and the existence of potential alternative sources of repayment. The allowance may consist of specific and general components. While the allowance may consist of general and specific components, the allowance is general in nature and is available for the loan portfolio in its entirety. The allowance for loan losses consists of the following activity for the year ended December 31, 2022 and 2021: Schedule of Allowance For Loan Losses December 31, 2022 December 31, 2021 Allowance for loan losses Beginning balance $ 14,741 $ 13,342 Charge-offs - - Recoveries - - Provision 6,747 1,399 Ending balance $ 21,488 $ 14,741 Loans receivable: Individually evaluated for impairment $ - $ - Collectively evaluated for impairment 1,432,560 1,478,301 $ 1,432,560 $ 1,478,301 Allowance for loan losses: Individually evaluated for impairment $ - $ - Collectively evaluated for impairment 21,488 14,741 $ 21,488 $ 14,741 At December 31, 2022 and December 31, 2021, no loans were past due, classified as non-accrual or considered impaired. Credit quality of loans: As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks credit quality indicators based on the loan payment status on monthly basis. All the loans outstanding on December 31,2022 are evaluated based on their payment status, which is considered as the most meaningful indicator of credit quality. |
Indemnification liability
Indemnification liability | 12 Months Ended |
Dec. 31, 2022 | |
Indemnification Liability | |
Indemnification liability | Note 7. Indemnification liability As discussed at Note 9 to the consolidated financial statements, and pursuant to PCCU Agreements, PCCU funds loans through a third-party vendor. SHF earns the associated interest and pays PCCU a loan hosting payment at an annual rate of 0.25% of the outstanding loan principal. The below schedule details outstanding amounts funded by PCCU and categorized as either collateralized loans or unsecured loans and lines of credit. No loans were funded by PCCU prior to January 1, 2022. Schedule of Outstanding Amounts December 31, 2022 Secured term loans $ 18,400,000 Unsecured loans and lines of credit 498,042 Total loans funded by Parent $ 18,898,042 All amounts were performing at December 31, 2022. (Refer to Note 22, “Subsequent Events,” below for loan information subsequent to December 31, 2022.) Secured loans contained an interest rate ranging from 5.90% 12.00% Unsecured loans and lines of credit contain variable rates ranging from Prime + 1.50 % to Prime + 6.00 % 996,958 225,000 SHF has agreed to indemnify PCCU for losses on certain PCCU loans. The indemnity liability reflects SHF management’s estimate of probable loan losses inherent under the agreement at the balance sheet date. Management uses a disciplined process and methodology to establish the liability, and the estimates are sensitive to risk ratings assigned to individual loans covered by the agreement as well as economic assumptions driving the estimation model. Individual loan risk ratings are evaluated at least a quarterly based on each situation by SHF management. Given the Company’s limited lending history, the estimate is based on risk adjusted national charge off rates as published by the US Federal Reserve. The indemnity liability activity on December 31, 2022, is as follows: Schedule of Indemnity Liability Year ended December 31, 2022 Beginning balance $ - Charge-offs - Recoveries - Provision 499,465 Ending balance $ 499,465 All loans were current and considered performing at December 31, 2022. One loan was identified pursuant to potential default on January 5, 2023. (Refer to Note 22, “Subsequent Events,” below.) Credit quality of indemnified loans: As part of the on-going monitoring of the credit quality of the Company’s indemnified loan portfolio, management tracks credit quality indicators based on the loan payment status on monthly basis. All the indemnified loans outstanding on December 31,2022 are evaluated based on their payment status, which is considered as the most meaningful indicator of credit quality. SHF has agreed to indemnify PCCU from all claims related to SHF’s cannabis-related business. Other than potential loan losses, no other circumstances were identified meeting the requirements of a loss contingency. The provision for loan losses on the statement of operations consists of the following activity for the year ended December 31, 2022 and December 31, 2021: Schedule of Provision for Loan Losses Commercial real estate loans Indemnity liability Total Commercial real estate loans Indemnity liability Total December 31, 2022 December 31, 2021 Commercial real estate loans Indemnity liability Total Commercial real estate loans Indemnity liability Total Provision (benefit) $ 6,747 499,465 $ 506,212 $ 1,399 - $ 1,399 |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Note 8. Property and equipment, net Property and equipment consist of the following: Schedule of Property and Equipment, Net December 31, 2022 December 31, 2021 Equipment $ 45,397 $ 28,080 Software 51,692 - Improvement 71,635 - Office furniture 7,070 7,070 Property and equipment, gross 175,794 35,150 Less: accumulated depreciation (126,180 ) (28,799 ) Property and equipment, net $ 49,614 $ 6,351 Depreciation expense was $ 10,361 1,921 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 9. Related party transactions Account Servicing Agreement Effective July 1, 2021, SHF, LLC (“SHF”) entered into an Account Servicing Agreement with PCCU. SHF provides services as per the agreement to CRB accounts at PCCU. In addition to providing the services, SHF assumes the costs associated with the CRB accounts. These costs include employees to manage account onboarding, monitoring and compliance, rent and office expense, insurance and other operating expenses necessary to service these accounts. Under the agreement, PCCU agrees to pay SHF all revenue generated from CRB accounts. Amounts due to SHF are due monthly in arrears and upon receipt of invoice. The agreement is for an initial term of 3 years from the effective date. It shall renew thereafter for 1-year terms until either SHF or PCCU provide sixty days prior written notice. The agreement was amended and restated in conjunction with the contemplated Business Combination with substantially similar terms. Pursuant to this agreement, SHF reported revenue of $ 8,823,608 3,168,243 85 100 Corporate allocations Corporate allocations in 2021 include overhead expenses such as information technology, customer support, marketing, executive compensation and other general and administrative expenses that are attributed to the Branches proportionately based on the relative size of the specific identifiable customer deposits to the consolidated Parent. Support Services Agreement Effective July 1, 2021, SHF entered into a Support Services Agreement with PCCU. In connection with PCCU hosting the depository accounts and the related loans and providing certain infrastructure support, PCCU receives (and SHF pays) a monthly fee per depository account. In addition, 25 Pursuant to these agreements and as amended and restated, the Company reported expenses of $ 775,259 190,908 196,968 43,626 Significant terms of the Amended and Restated Accounting Servicing Agreement and Support Services Agreement are as follows: ● Pursuant to the Account Servicing Agreement, the Company’s fees for such services will equal all cannabis-related income, including all lending-related income (such as loan origination fees, interest income on CRB-related loans, participation fees and servicing fees), investment income, interest income, account activity fees, processing fees, flat fees, and other revenue generated from cannabis and multi-state hemp accounts that are hosted on PCCU’s core system. The Account Servicing Agreement and Support Services Agreement are for an initial term of three years and will renew for additional one-year terms unless a party provides 120 days’ notice of non-renewal, provided that PCCU may not provide notice of non-renewal until 30 months following the signing date. The Account Servicing Agreement will also terminate within 60 days of the Company no longer qualifying as a “credit union service organization” (a “CUSO”) or within 60 days of the assumption by a third party of all CRB-related accounts. On May 23, 2022, the Company and PCCU entered into the Second Amended and Restated Account Servicing Agreement and Support Services Agreement, which agreement amended and restated the Amended and Restated Account Servicing and Support Services Agreements to remove the provision providing for the termination of the agreements within 60 days of the Company no longer qualifying as a “credit union service organization,” as the Company will cease to qualify as a CUSO following the closing of the Business Combination. ● Pursuant to the Support Services Agreement, as amended, PCCU will continue to provide to the Company certain operational and administrative services relating to, among other things, human resources, employee benefits, IT and systems, accounting and marketing and capacity for CRB depository accounts for a monthly fee equal to $ 30.96 25.32 In addition, investment income from CRB-related cash and investments (excluding loans) will be shared 25% to PCCU and 75% to the Company and the Company will reimburse PCCU for any of its out-of-pocket expenses relating to the services provided to the Company 30,000,000 Schedule of Demonstrates Deposit Capacity December 31, 2022 (Unaudited) December 31, 2021 (Unaudited) PCCU total assets $ 695,072,554 $ 575,170,939 Capacity at 65% 451,797,160 373,861,110 CRB related deposits 161,138,975 146,267,976 Incremental capacity $ 290,658,185 $ 227,593,134 PCCU policy also requires they maintain an internal ratio of net worth to total assets of at least 10 Loan Servicing Agreement Effective February 11, 2022, SHF entered into a Loan Servicing Agreement with PCCU. The agreement sets forth the application, underwriting and approval process for loans from PCCU to CRB customers and the loan servicing and monitoring responsibilities provided by both PCCU and SHF. PCCU will receive a monthly servicing fee at the annual rate of 0.25 SHF’s loan program currently depends on PCCU as SHF’s largest funding source for new loans to CRBs. Under PCCU’s loan policy for loans to CRBs, PCCU’s Board of Directors has approved aggregate lending limits at the lessor of 1.3125 times PCCU’s net worth or 65 National Credit Union Association regulations to the greater of $100,000 or 15% of PCCU’s net worth The below schedule demonstrates the ratio of CRB related loans funded by PCCU to the relative lending limits at December 31, 2022. No amounts were funded prior to January 1, 2022. Schedule of Demonstrates Deposit Capacity December 31, 2022 (Unaudited) December 31, 2021 (Unaudited) CRB related deposits $ 161,138,975 $ 146,267,976 Capacity at 65% 104,740,334 95,074,184 PCCU net worth 133,231,565 61,925,336 Capacity at 1.3125 174,866,429 81,277,004 Limiting capacity 174,866,429 81,277,004 PCCU loans funded 18,898,042 - Amounts available under lines of credit 996,958 225,000 Incremental capacity $ 154,971,429 $ 81,052,004 Pursuant to this agreement, the Company reported expenses of $ 26,088 0 Collectively the Account Servicing Agreement, Support Servicing Agreement and Loan Servicing Agreement are referred to as the “Parent Agreements.” Operating leases Effective July 1, 2021, SHF entered into a one-year gross lease with PCCU to lease space in its existing office at a monthly rent of $ 5,400 Advance from Sponsor On June 27, 2022, Luminous Capital Inc., an affiliate of the Sponsor has provided a non-interest-bearing advance (the “Advance”) amounting to $ 1,150,000 |
Due to Seller
Due to Seller | 12 Months Ended |
Dec. 31, 2022 | |
Due To Seller | |
Due to Seller | Note 10. Due to Seller At December 31, 2022 amounts due to seller were as follows: Schedule of Amounts Due to Seller Due to Seller-Current (Unsecured) $ 25,973,017 Due to Seller-Non-Current (Unsecured) 30,976,783 $ 56,949,800 As contemplated by the Unit Purchase Agreement, related to reverse acquisition of NLIT, the consideration paid to the seller parent (PCCU) in connection with the Business Combination consisted of an aggregate of $ 185,000,000 11,386,139 115,000,000 70,000,000 56,949,800 The Deferred Cash Consideration was to be paid in one payment of $ 21,949,800 35,000,000 6,416,667 38,500,002 On October 26, 2022, SHF Holdings, Inc., entered into a Forbearance Agreement (the “Forbearance Agreement”) with PCCU and Luminous Capital USA Inc. (“Luminous”). As per the terms of the agreement, PCCU has agreed to defer all payments owed by the Company pursuant to the Purchase Agreement for a period of six (6) months from the date hereof while the Parties engage in good faith efforts to renegotiate the payment terms applicable to the Deferred Obligation (the “Forbearance Period”). The loan includes 5% interest annualized using the simple interest method and an approximate 4.71% effective interest rate. Repayment schedule of the amount outstanding on December 31,2022 are as follows: Schedule of Repayment of the Amount Outstanding Date of payment June 13, 2023 $ 21,949,801 October 1, 2023 4,023,216 January 1, 2024 6,048,819 April 1, 2024 6,123,866 July 1, 2024 6,195,796 October 1, 2024 6,266,944 January 1, 2025 6,341,358 Grand total $ 56,949,800 On March 29, 2023, the Company and PCCU entered into a definitive transaction (Refer to Note 22, “Subsequent Events,” of the consolidated financial statements) to settle and restructure the deferred obligations, including $ 56,949,800 14,500,000 4.25 11,200,000 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Leases | Note 11. Leases The Company has non-cancellable operating leases for facility space with varying terms. All of the active leases for facility space qualified for capitalization under FASB ASC 842, Leases. These leases have remaining lease terms between one 7 ten years 1,016,198 0 1,028,233 0 The Company analyses contracts above certain thresholds to identify leases and lease components. Lease and non-lease components are not separated for facility space leases. The Company uses its contractual borrowing rate to determine lease discount rates when an implicit rate is not available. Total lease cost for the years ended December 31, 2022 and 2021, included in Consolidated Statements of Operations, is detailed in the table below: Schedule of Lease Cost,Right of Use Assets Related to Lease and Future Minimum Lease Payments Year ended December 31, 2022 Year ended December 31, 2021 Operating lease cost $ - $ - Short-term lease cost 99,246 - Total Lease Cost $ 99,246 - ROU assets that are related to lease properties are presented as follows: Beginning balance $ - $ - Additions to right-of-use assets 1,029,226 - Amortization charge for the year (13,028 ) - Lease modifications - - Ending balance $ 1,016,198 $ - Further information related to leases is as follows: Weighted-average remaining lease term 4.42 - Weighted-average discount rate 6.87 % - Future minimum lease payments as of December 31, 2022 are as follows: Year 2023 $ 91,303 $ - 2024 197,520 - 2025 217,925 - 2026 222,275 - 2027 226,705 - Thereafter 348,926 - Total future minimum lease payments $ 1,304,654 $ - Less: Imputed interest 276,421 - Operating lease liabilities $ 1,028,233 $ - Less: Current portion 20,124 - Non-current portion of lease liabilities $ 1,008,109 $ - |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 12. Revenue Disaggregated revenue Revenue by type are as follows: Schedule of Disaggregated Revenue Year Ended December 31, 2022 2021 Deposit, activity, onboarding income $ 6,063,939 $ 6,039,358 Safe Harbor Program income 164,062 478,041 Investment income 2,120,640 376,918 Loan interest income 1,130,178 102,961 Miscellaneous fee income - 8,301 Total Revenue $ 9,478,819 $ 7,005,579 Account fee income consists of deposit account fees, activity fees and onboarding income, which are recognized on periodic basis as per the fee schedule pursuant to deposit servicing agreement with PCCU. Safe Harbor Program income consists of o utsourced support to other financial institutions providing banking to the cannabis industry whose income is recognized on the basis of usage as per the agreements. Investment income consist of interest earned on deposits with the Federal Reserve Bank pursuant to an investment servicing agreement with PCCU. Loan interest income consist of interest earned on both direct and indemnified loans pursuant to a loan servicing agreement with PCCU. |
Other Current Assets
Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | Note 13. Other Current Assets Schedule of Other Current Assets Year Ended December 31, 2022 Advance to capital supplier $ 93,517 Advance to other 57,300 Total $ 150,817 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 14. Commitments and contingencies ● The Company has issued irrevocable Letter of Credit in favor of AFCO Credit Corporation (“AFCO”), for an aggregate amount of US $ 750,000 , which can be drawn in the case of following events: ○ The Company continues to be in default, after 10 days’ written notice, in the payment of any sums due to AFCO under a premium finance agreement dated on or about October 20, 2022, or ○ A case concerning the Company has been filed under title 11 of the United States Code and that, not more than 95 days before that case commenced, AFCO received loan payments amounting to not less than (total of payments received in the 95-day period prior to filing of the bankruptcy case), and AFCO is drawing an amount equal to the stated sum of the loan payments so received. ● The Company is involved in, or has been involved in, arbitrations or various other legal proceedings that arise from the normal course of its business. The ultimate outcome of any litigation is uncertain, and either unfavorable or favorable outcomes could have a material impact on the Company’s results of operations, balance sheets and cash flows due to defense costs, and divert management resources. The Company cannot predict the timing or outcome of these claims and other proceedings. ● In connection with the Company’s initial public offering (“IPO”), the Company entered into a registration rights agreement dated June 23, 2021 with the Sponsor and the individuals serving as directors and executive officers of the Company at the time of the IPO. Pursuant to this registration rights agreement, the Company has agreed to register for resale upon the expiration of the applicable lock-up period the Company securities acquired by the Sponsor and such individuals in connection with the organization of the Company and the IPO. ● For a period beginning on June 28, 2021 and ending 12 months from the closing of a the Business Combination, the Company has granted the underwriters a right of first refusal to act as lead-left book running manager and lead left manager for any and all future private or public equity, convertible and debt offerings during such period. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first refusal shall not have a duration of more than three years from the effective date of our Registration Statement. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 15. Earnings Per Share Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares and potentially dilutive securities outstanding for the period. For the Company’s diluted earnings per share calculation, the Company uses the “if-converted” method for preferred stock and convertible debt and the “treasury stock” method for Warrants and Options. As the Business Combination and related transactions are being reflected as if they had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted net income per share assumes that the shares issued in connection with the Business Combination have been outstanding for the entire period presented. Schedule Of Earning Per Shares, Basic And Diluted For year Ended December 31 2022 Net loss $ (35,128,083 ) Weighted average shares outstanding – basic 18,988,558 Basic net earnings per share $ (1.85 ) Weighted average shares outstanding – diluted 18,988,558 Diluted net earnings (loss) per share $ (1.85 ) Weighted average shares calculation December 31, 2022 Company public shares 3,926,598 Company initial stockholders 3,403,175 PCCU stockholders 11,386,139 Shares issued for Abaca acquisition 264,654 Conversion of Preferred stock 7,992 Weighted average shares outstanding 18,988,558 Certain share-based equity awards and conversion of preferred shares were excluded from the computation of dilutive loss per share because inclusion of these awards would have had an anti-dilutive effect. The following table reflects the awards excluded. Schedule of Awards Excluded December 31, 2022 Warrants 7,036,588 Share based payments 2,170,000 Shares to be issued to Abaca acquisition 6,433,839 Conversion of Preferred stock 13,443,000 Total 29,083,427 The holders of Series A Convertible Preferred Stock shall be entitled to receive, and the Company shall pay, dividends on shares of Series A Convertible Preferred Stock equal (on an as-if-converted-to-Class-A-Common-Stock basis) to and in the same form as dividends actually paid on shares of the Class A Common Stock when, as and if such dividends are paid on shares of the Class A Common Stock. No other dividends shall be paid on shares of Series A Convertible Preferred Stock. In the 2021, SHF was a single member limited liability company with no shareholders hence the disclosure related to earning per share is not applicable. |
Forward Purchase Agreement
Forward Purchase Agreement | 12 Months Ended |
Dec. 31, 2022 | |
Forward Purchase Agreement | |
Forward Purchase Agreement | Note 16. Forward Purchase Agreement On June 16, 2022, NLIT entered into a Forward Purchase Agreement with Midtown East Management NL, LLC (“Midtown East”). Subsequent to entering into the Forward Purchase Agreement, the Company, NLIT, and Midtown East entered into assignment and novation agreements with Verdun Investments LLC (“Verdun”) and Vellar Opportunity Fund SPV LLC – Series 1 (“Vellar”), pursuant to which Midtown East assigned its obligations as to 1,666,666 ● Prior to the closing, Midtown East, Verdun and Vellar purchased approximately 3.8 ● One business day following the closing, NLIT paid approximately $ 39.3 0.3 ● At the Maturity Date, Midtown East, Verdun and Vellar shall be entitled to (1) the product of the shares then held by them multiplied by the Forward Price, and (2) an amount, in cash or shares at the sole discretion of NLIT, equal to (a) in the case of cash, the product of (i)(x) 3.8 ● At any time prior to the Maturity Date (defined as the earlier of i) the third anniversary of the Closing of the Business Combination, ii) the shares are delisted from The Nasdaq Stock Market or (iii) during any 30 consecutive Scheduled Trading Day-period following the closing of the Business Combination, the Volume Weighted Average Share Price (VWAP) Price for 20 Scheduled Trading Days during such period shall be less than $ 3.00 ● The trading value of the common stock combined with preferred shareholders electing to convert their preferred shares to common stock triggered a lower reset price embedded in the forward purchase agreement, or FPA. As of December 31, 2022, the Company had already called a special meeting to lower the make-whole price under the preferred share purchase agreement to $ 1.25 1.25 1.25 1.25 The reconciliation statement of the common stock held by the parties are as follows: Schedule of Forward Purchase Agreeement On the date of acquisition (September 28, 2022) Share sold during the period September 29, 2022 to December 31, 2022 As at December 31, 2022 S.no Name of the party Opening Shares (a) Amount Shares (b) Amount Shares (c=a-b) Rest price (iii) Amount (c x iii) 1 Vellar 1,025,000 $ 10,583,246 53,796 $ 524,472 971,204 1.25 $ 1,214,005 2 Midtown East 1,599,496 16,514,986 81,572 832,850 1,517,924 1.25 1,897,405 3 Verdun 1,180,376 12,187,522 2,127 21,962 1,178,249 1.25 1,472,811 Grand total 3,804,872 $ 39,285,754 137,495 $ 1,379,284 3,667,377 $ 4,584,221 |
Warrant Liability
Warrant Liability | 12 Months Ended |
Dec. 31, 2022 | |
Warrant Liability | |
Warrant Liability | Note 17. Warrant Liability Public and Private Placement Warrants As of December 31, 2022, the Company has 5,750,000 264,088 no The Public and Private Placement Warrants may only be exercised for a whole number of shares. The Public and Private Placement Warrants became exercisable on September 28, 2022, the date of the Business Combination and will expire on September 28,2027, or earlier upon redemption or liquidation No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption from registration is available. Redemption of warrants become exercisable when the price per Class A Common Stock equals or exceeds $18.00. Once the warrants become exercisable, the Company may redeem the warrants: ● in whole and not in part; ● at a price of $ 0.01 ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and ● if, and only if, the reported last sale price of the Class A Common Stock equals or exceeds $ 18.00 If and when the warrants become redeemable by the Company, the Company may exercise its redemption rights; this is also the case if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise the Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Window and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. The private placement warrants are identical to the public warrants, except that the private placement warrants and the Class A Common Stock issuable upon the exercise of the private placement warrants were not transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the private placement warrants are exercisable on a cashless basis and non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the private placement warrants are held by someone other than the initial purchasers or their permitted transferees, the private placement warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants. PIPE Warrants As of December 31, 2022, the Company has 1,022,500 no The PIPE Warrants have an exercise price of $ 11.50 (i)125% of the conversion price if at any time there is an adjustment to the Conversion Price and the exercise price after such adjustment is greater than 125% of the Conversion Price as adjusted and (ii) $5.00. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Note 18. Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The fair value hierarchy ranks the inputs used in measuring fair value as follows: ○ Level 1 – Observable, unadjusted quoted prices in active markets ○ Level 2 – Inputs other than quoted prices included in Level 1 that are directly or indirectly observable for the asset or liability ○ Level 3 – Unobservable inputs with little or no market activity that require the Company to use reasonable inputs and assumptions The Company uses fair value measurements to record adjustments to certain financial assets and liabilities on a recurring basis. The Company may be required to record certain assets at fair value on a nonrecurring basis in specific circumstances, such as evidence of impairment. Methodologies used to determine fair value might be highly subjective and judgmental in nature; therefore, valuations may not be precise. If the Company determines that a valuation technique change is necessary, the change is assumed to have occurred at the end of the respective reporting period. Assets and Liabilities Reported at Fair Value on a Recurring Basis Public Warrants: Public warrants are recorded at fair value on a recurring basis. The Company obtains dealer quotes, of Level 1 inputs, based on observable data to value these warrants. Private Placement Warrants Private Placement Warrants are recorded at fair value on a recurring basis. The Company value these derivatives based on third party reports for Level 3 inputs. Level 3 inputs, based on observable data to value these derivatives. PIPE Warrants PIPE Warrants are recorded at fair value on a recurring basis. The Company value these derivatives based on third party reports for Level 3 inputs. Level 3 inputs, based on observable data to value these derivatives. Forward purchase option derivatives: Forward purchase option derivatives are recorded at fair value on a recurring basis. The Company values these derivatives based on third party reports for Level 3 inputs. Level 3 inputs, based on observable data to value these derivatives. The following tables summarize financial assets and liabilities recorded at fair value on a recurring basis, by the level of valuation inputs in the fair value hierarchy on December 31, 2022: Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Unobservable Inputs (Level 3) Description Liabilities: Public warrants $ 361,100 361,100 - Private placement warrants 19,110 - 19,110 PIPE Warrants 286,300 - 286,300 Forward purchase option derivative 7,309,580 - 7,309,580 Assets Measured at Fair Value on a Nonrecurring Basis There were no Fair Value of Financial Instruments The Company uses various methodologies and assumptions to estimate the fair value of certain financial instruments. With the exceptions of loans receivable, warrants and forward purchase option derivatives, the Company considers the carrying amounts of its financial instruments (cash, accounts receivable and accounts payable) in the balance sheet to approximate fair value because of the short-term or highly liquid nature of these financial instruments. The following tables present the carrying amounts and fair values of financial instruments, by the level of valuation inputs in the fair value hierarchy, as of the dates indicated: Schedule of Carrying Amounts and Fair Values of Financial Instruments by the Level of Valuation Inputs in the Fair Value Hierarchy As on December 31, 2022 Carrying amount Fair value Fair value measurement using Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 8,390,195 $ 8,390,195 $ 8,390,195 - - Forward purchase receivables 4,584,221 4,584,221 4,584,221 - Loans 1,301,991 1,241,761 - - 1,241,761 Liabilities Deferred consideration 14,359,822 14,359,822 14,359,822 - - Due to seller - current portion 25,973,017 25,973,017 25,973,017 - - Due to seller - long term position 30,976,783 30,976,783 30,976,783 - - Deferred underwriter fee payable 1,450,500 1,450,500 1,450,500 - - Indemnity liability 499,465 499,465 499,465 - - Public warrants 361,100 361,100 361,100 - - Private placement warrants 19,110 19,110 - - 19,110 PIPE Warrants 286,300 286,300 - - 286,300 Forward purchase derivative 7,309,580 7,309,580 - - 7,309,580 As on December 31, 2021 Carrying amount Fair value Fair value measurement using Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 5,495,905 $ 5,495,905 $ 5,495,905 - - Loans 1,463,560 1,417,637 - - 1,417,637 The change in the assets measured at fair value on a recurring basis for which we have utilized Level 3 inputs to determine fair value are presented in the following table: Schedule of Fair Value Assets Measured on Recurring Basis PIPE Warrants Private Placement Warrants Forward purchase derivative As on December 31, 2022 PIPE Warrants Private Placement Warrants Forward purchase derivative Balance at the beginning of the period $ - - - Acquired under business combination - 203,112 (1,687,530 ) Fair value adjustment 286,300 (184,002 ) 8,997,110 Balance at the end of the period $ 286,300 19,110 7,309,580 The private placement warrants and PIPE warrants are measured at fair value using a Black-Scholes model and Black-Scholes-Merton model, respectively. As of December 31, 2022, these warrants were valued based on third party reports for Level 3 inputs. The fair value of the forward purchase derivative was estimated using a Monte-Carlo Simulation in a risk-neutral framework (a special case of the Income Approach). Specifically, the future stock price is simulated assuming a Geometric Brownian Motion (“GBM”). For each simulated path, the forward purchase value is calculated based on the contractual terms and then discounted at the term-matched risk-free rate. Finally, the value of the forward is calculated as the average present value over all simulated paths. The Company measured the fair value of the forward purchase option derivative upon execution of the Forward Purchase Agreement and as of December 31, 2022, with the respective fair value adjustments recorded within its Statements of Operations. The Company will continue to monitor the fair value of the forward option derivative each reporting period with subsequent revisions to be recorded in the Statements of Operations. The following table provides quantitative information regarding Level 3 fair value measurements inputs as it relates to the private placement warrants and public warrants as of their measurement dates: Schedule of Level 3 Fair Value Measurement Inputs As on December 31,2022 PIPE Warrants Private placement warrants Exercise price $ 5.00 $ 11.50 Share Price $ 1.78 $ 1.78 Expected term (years) 4.74 4.74 Volatility 46.00 % 46.00 % Risk-free rate 4.00 % 3.98 % The following table provides quantitative information regarding Level 3 fair value measurements inputs as it relates to the forward purchase derivatives as of their measurement dates: December 31, 2022 Reset Price $ 1.25 Expected term (years) 2.74 Additional maturity consideration per share $ 2.00 Volatility 46 % Risk-free rate 4.2 % Risk-adjusted discount rate 13.4 % |
Tax
Tax | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Tax | Note 19. Tax Income tax The major components of income tax for the year ended December 31, 2022, are as follows: Schedule of Major Components of Income tax For year ended December 31, 2022 Current income Tax: Current tax on profits $ (3,394 ) Tax regarding prior years - Deferred tax: Deferred taxation - current year (9,249,499 ) Deferred taxation - prior years - Income tax benefit reported in the income statement $ (9,252,893 ) A reconciliation follows between tax benefit and the product of accounting profit multiplied by the United States domestic tax rate for the years ended December 31, 2022: Schedule of Effective Income Tax Rate Reconciliation For year ended December 31, 2022 Accounting loss before tax from continuing operations $ (44,380,976 ) Accounting loss before income tax (44,380,976 ) At federal statutory income tax rate of 21% (9,320,005 ) State income tax benefit, net of federal benefit (1,304,510 ) Remeasurement of deferred taxes due to US tax legislative changes - Permanent differences, net 1,787,471 UTP withholding - Other (415,849 ) Valuation allowance charges affecting the provision for income taxes - Total $ (9,252,893 ) Deferred tax: Deferred taxes are comprised of the following: Schedule of Deferred Tax Assets and Liabilities December 31, 2022 Loan loss reserve $ 127,508 Stock option conversion 686,879 Deferred revenue 251 Transaction costs 817,322 Change in value of forward purchase contract 8,155,953 Goodwill on Abaca 42,551,111 NOL carryforward 1,862,394 Lease liabilities 251,670 Deferred tax assets $ 54,453,088 Property, plant and equipment, net $ (11,444 ) Operating lease right to use assets (248,725 ) Intangible Assets (2,599,617 ) Deferred tax liabilities $ (2,859,786 ) Net deferred tax assets / (liabilities) $ 51,593,302 Reflected in the statement of financial position as follows: Deferred tax assets 54,453,088 Deferred tax liabilities (2,859,786 ) Deferred tax assets net 51,593,302 The Company offsets tax assets and liabilities only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. The Company has US federal tax losses totaling $ 7.5 The Company offsets tax assets and liabilities only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. The Company considers their deferred tax assets to be realizable and has not established a valuation allowance, as it is considered more likely than not that the Company will utilize deferred tax assets in future periods through future taxable income. The Company has US federal tax loss carryovers totaling $ 7.5 4.1 3.4 |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
401(k) Plan | Note 20. 401(k) Plan The Company offers to all employees a tax-qualified retirement contribution plan, with the Company’s 100 4 47,806 44,158 |
Share based compensation
Share based compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share based compensation | Note 21. Share based compensation 2022 Equity Incentive Plan Share-based compensation expense recognized for the years ended December 31, 2022, and 2021 totaled $ 2.81 0 The 2022 Plan was approved by the Company’s stockholders on June 28, 2022. The 2022 Plan permits the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonus awards, and performance compensation awards. The Company has not issued stock appreciation rights, restricted stock, restricted stock units, stock bonus awards, and performance compensation awards in year 2022 and 2021. In conjunction with the 2022 Plan, as of December 31, 2022, the Company had granted stock options which are described in more detail below. Stock options Stock options are awarded to encourage ownership of the Company’s common stock by employees and to provide increased incentive for employees to render services and to exert maximum effort for the success of the Company. The Company’s incentive stock options generally permit net-share settlement upon exercise. The option exercise price, vesting schedule and exercise period are determined for each grant by the administrator (person appointed by board to administer the stock plans) of the applicable plan. The Company’s stock options generally have a 10 3 4 The assumptions used to determine the fair value of options granted in the year ended December 31, 2022, using the Black-Scholes-Merton model are as follows: Schedule of Fair Value of Options Granted Black-Scholes-Merton Model Dividend yield 0 % Risk-free interest rate 3.62 4.23 % Expected volatility (weighted-average and range, if applicable) 100 % Expected term 6 6.5 The expected term of the options granted is calculated based on the simplified method by taking average of contractual term and vesting period the awards. The shares of the Company were listed on the stock exchange for a limited period of the time and the share price has also dropped significantly from the date of listing, based on these factors the Management has considered the expected volatility at 100 The summary of stock option activity as of and for the year ended December 31, 2022 is presented below: Schedule of Stock Options Stock Options Shares Weighted Average Exercise Price Weighted-Average Remaining Contractual Life (in Years) December 31, 2021 - - - Granted 2,170,000 5.29 2.02 Exercised - - - Expired - - - Cancelled / Forfeited - - - December 31, 2022 2,170,000 5.29 2.02 At December 31, 2022, the following options were outstanding at their respective exercise price: Schedule of Exercise Price Options Exercise price options outstanding $1.56 87,500 $2.58 350,000 $4.00 482,500 $6.67 1,250,000 Total 2,170,000 On December 31, 2022, there were no unrecognized compensation costs related to non-vested stock options to be recognized. Share based compensation did not impact on Company’s cash flow in financial year ended December 31, 2022, or December 31, 2021. |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 22. Subsequent events Subsequent events are events or transactions that occur after the balance sheet date but before the consolidated financial statements are issued. The Company noted the following subsequent events that occurred after the balance sheet date of December 31, 2022: ● On January 5, 2023, the Company’s management was informed that an indemnified loan, having an outstanding balance of $ 3.1 5.25 90 ● On January 25, 2023, at a special meeting of the Company’s stockholders the reduction in the floor conversion price of the outstanding Series A Preferred Stock from $ 2.00 1.25 The approval was obtained to comply with the Nasdaq listing rules requiring stockholder approval for issuances of voting stock exceeding 20% of the voting stock outstanding at the time of the vote 7,764 27,027,089 12,686 ● On November 2, 2022, EF Hutton, a division of Benchmark Investments, LLC (“EF Hutton”) issued a notice of default to the Company towards a promissory note (the “Note”) entered with the company on September 28, 2022, amounting to $ 2,166,250 2,166,250 715,750 362,625 1,450,500 24 362,625 550,000 ● As per Note 3 above, the Company entered into a forbearance agreement with PCCU and Luminous on October 26, 2022. As per the terms of the agreement, PCCU has agreed to defer all payments owed by the Company pursuant to the Purchase Agreement for a period of six (6) months from the date hereof while the parties engage in good faith efforts to renegotiate the payment terms applicable to the deferred obligation. On March 29, 2023, the Company and PCCU entered into the following definitive transaction documents to settle and restructure the deferred obligation: ● A five 14,500,000 4.25 ● A Securities Issuance Agreement, pursuant to which the Company will issue 11,200,000 54.93 ● The Registration Rights Agreement requires the Company to register the Shares for resale pursuant to the Securities Act of 1933, as amended (the “Securities Act”); and the Lock-Up Agreement restricts PCCU from transferring the Shares until the earlier of (i) six (6) months after the date of the Securities Issuance Documents or (ii) the consummation of a transaction with an unaffiliated third party in which all of the Company’s stockholders have the right to exchange their shares of Class A Common Stock for cash, securities, or other property; and ● A Commercial Alliance Agreement that sets forth the terms and conditions of the lending-related and account-related services governing the relationship between the Company and PCCU from and after the date of the transactions, which agreement superseded the amended and restated support services agreement, the amended and restated account servicing agreement, and the loan servicing agreement. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | i. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Material estimates that are particularly subject to change in the near term include the determination of the allowance for loan losses, indemnification liabilities, useful lives of intangibles and the fair value of financial instruments. Actual results could differ from the estimates. |
Basis of Presentation | ii. Basis of Presentation Consolidated Financial statements have not historically been prepared for the Carved-Out Operations. For the year ended December 31, 2021, the Consolidated financial statements consist of the balances of SHS and SHF as prepared on a stand-alone basis and the balances of the Branches on a “carve-out” basis. For the year ended December 31, 2022, the consolidated financial statements represent SHF on a stand-alone basis as the period is post reorganization, and wholly owned subsidiary Abaca. All intercompany transactions have been eliminated for all periods presented. These consolidated financial statements reflect the Company’s historical financial position, results of operations and cash flows as they have been historically managed in conformity with GAAP. All depository asset accounts and liabilities are retained by PCCU as the Carved-Out Operations are not organized as a chartered financial institution. Accordingly, none of the cash of PCCU has been attributed to these consolidated financial statements. Asset and liabilities maintained by SHS and SHF have been included in these consolidated financial statements along with any specific assets and liabilities associated with the Branches. Revenue and expenses for the Branches were included based on specific identification as they relate to customer deposits, professional services, compensation and employee benefits, rent expense, provision for loan losses and other general and administrative expenses. Corporate allocations such as information technology, customer support, marketing, executive compensation and other general and administrative expenses are attributed to the Branches proportionately based on the size of the specifically identifiable CRB’s deposit balances, deposit activity and accounts relative to the totals of the consolidated PCCU entity. This allocation method was consistent for all periods prior to July 2021. Beginning in July 2021, a services agreement was entered into between SHF LLC and PCCU (see Note 9 to the consolidated financial statements). In exchange for services provided to PCCU via the Carved-Out Operations, SHF LLC receives 100% of CRB related revenue. PCCU receives (and SHF LLC pays) a monthly per account fee, split loan servicing fees and split investment income associated with Carved-Out Operations depository accounts. The fees are meant to represent PCCU’s cost for hosting depository accounts and funding related loans and providing certain limited infrastructure support. Management has considered the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefits received by the Branches during the periods presented. All revenue and expenses of SHS and SHF are specific to the entity. Corporate allocations were attributed for year ended December 2021. |
Liquidity and Going Concern | iii. Liquidity and Going Concern As of December 31, 2022, the Company had $ 8,390,195 39,340,020 5,495,905 5,922,023 25,973,017 14,359,822 Based upon these factors, management of the Company has determined that there is a risk of substantial doubt about the Company’s ability to continue as a going concern Management mitigated the going concern risk by renegotiating its aforementioned payable with PCCU (refer to the “Subsequent Events” disclosure within Note 22 of the consolidated financial statements herein), thus reducing the working capital deficit and certain other liabilities. The Company also hired an experienced Chief Financial Officer in October 2022, who has immediately begun to institute certain cost-cutting measures across the Company, including expense reduction measures and negotiating reduced amounts and extended terms for certain payables. These factors, however, do not fully remove substantial doubt regarding the Company’s ability to continue as a going concern that has been identified. 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 audited 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. |
Cash and Cash Equivalents | iv. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from financial institutions, and investments with maturities of three months or less. |
Concentrations of Risk | v. Concentrations of Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash. Cash balances are maintained principally in accounts at PCCU which is insured by the National Credit Union Share Insurance Fund (“NCUSIF”) up to regulatory limits. From time to time, cash balances may exceed the NCUSIF insurance limit. The Company has not experienced any credit losses associated with its cash balances in the past. Currently the Company only services the cannabis industry. Cannabis remains illegal under federal law, and therefore, strict enforcement of federal laws regarding cannabis would likely result in our inability to execute our business plan. Currently the Company substantially relies on PCCU to hold customer deposits and fund its originated loans. As of this time, substantially all of the Company’s revenue is generated by deposits and loans hosted by its PCCU pursuant to various services agreements. The Company had 4 loans on its balance sheet as of December 31, 2022; each of these loans is in excess of 10 10 |
Accounts Receivable-PCCU and Allowance for Doubtful Accounts | vi. Accounts Receivable-PCCU and Allowance for Doubtful Accounts Accounts receivable are recorded based on account fee schedules. While fees are generated from individual CRB related accounts, amounts are initially collected by the financial institutional partners and remitted in the subsequent month. As of December 31, 2022, and December 31, 2021, 85 100 At December 31, 2022 and December 31, 2021, there were no |
Loans Receivable | vii. Loans Receivable PCCU underwrites mortgage, commercial and consumer loans to members and other businesses. Commercial CRB loans originated by the Company and funded by PCCU are typically managed by the Company, inclusive of originated and funded loans that are on the PCCU balance sheet only. Certain CRB Loans were contributed to the Carved-out Operations. Such loans where the Company has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at principal balance outstanding, net of an allowance for loan losses and net deferred loan origination fees and costs when applicable. Interest income on loans is recognized over the term of the loan and is calculated using the simple-interest method on principal amounts outstanding. Interest income is not reported when full loan repayment is in doubt, typically when the loan is impaired, or payments are past due ninety days or more. All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts are satisfied to where the loan is less than ninety days past due and future payments are reasonably assured. Loans are evaluated for charge-off on a case-by-case basis and are typically charged off at the time of foreclosure. Past-due status is based on the contractual terms of the loans. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if the collection of principal and interest is considered doubtful. |
Allowance for Loan Losses | viii. Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased by the provision for loan losses and decreased by charge-offs less recoveries. Management estimates the required allowance for loan losses balance using past loan loss experience, known and inherent risks in the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance for loan losses may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. The allowance for loan losses consists of specific and general components. The specific component relates to loans that are individually classified as impaired or loans otherwise classified as substandard or doubtful. The general component covers non-classified loans and is based on historical loss experience adjusted for current factors. Due to the nature of uncertainties related to any estimation process, management’s estimate of loan losses inherent in the loan portfolio may change in the near term. However, the amount of the change that is reasonably possible cannot be estimated. A loan is considered impaired when, based on current information and events, full payment under the loan terms is not expected. Impairment is generally evaluated in total for smaller-balance loans of similar nature such as commercial lines of credit, but may be evaluated on an individual loan basis if deemed necessary. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. The loans SHF intends to originate will be secured by various types of assets of the borrowers, including real property and certain personal property, including value associated with other assets to the extent permitted by applicable laws and the regulations governing the borrowers. The documents governing the loans also include a variety of provisions intended to provide remedies against the value associated with licenses. Collection procedures are designed to ensure that neither SHF nor its financial institution clients who provide funding for a loan, nor a third-party agent engaged to assist with the liquidation or foreclosure process, will take possession of cannabis inventory, cannabis paraphernalia, or other cannabis-related assets, nor will they take title to real estate used in cannabis-related businesses. Upon default of a loan, a third-party agent will be engaged to work with the borrower to have the borrower sell collateral securing the loan to a third party or to institute a foreclosure proceeding to have such collateral sold to generate funds towards the payoff of the loan. Applicable regulations under state law that govern CRBs generally do not permit the taking of title to real estate involved in commercial sales of cannabis, whether through foreclosure or otherwise, without prior regulatory approval. The sale of a license or other realization of the value of licenses also requires the approval of state and local regulatory authorities. A defaulted loan may also be sold if such a sale would yield higher proceeds or that a sale could be accomplished more quickly than a foreclosure proceeding while yielding proceeds comparable to what would be expected from a foreclosure sale. Such sale of the loan would be conducted through a third-party administrative agent. However, SHF can provide no assurances that a sale of such loans would be possible or that the sales price of such loans would be sufficient to recover the outstanding principal balance, accrued interest, and fees. |
Net Deferred Loan Origination Fees and Cost | ix. Net Deferred Loan Origination Fees and Cost When included with a new loan origination, the Company receives loan origination fees in conjunction with new loans funded and any indemnified liabilities which are not recorded on the balance sheet from our financial institution partners. Where applicable, the loan origination fee is netted with loan origination costs associated with originating a specific loan. These loan origination costs are typically incremental direct costs (non-reimbursed) paid to third parties. Net loan origination fees are initially deferred and recognized as interest income utilizing the interest method. |
Indemnity Liability | x. Indemnity Liability Effective February 11, 2022, SHF entered into a Loan Servicing Agreement with PCCU. Under the Loan Servicing Agreement, PCCU, in exchange for a fee at an annual rate of 0.25 ASC”) 450-20 Loss Contingencies In addition to default-related loan losses, SHF continuously monitors all other circumstances pursuant to the agreement and identifies events that may necessitate a loss contingency under the Loan Servicing Agreement. A loss contingency is reported when it is both probable that a future event will confirm that a loss had been incurred on or before the related balance sheet date and the loss is reasonably estimable. |
Property and Equipment, net | xi. Property and Equipment, net Property and equipment are recorded at historical cost, net of accumulated depreciation. Depreciation is provided over the assets’ useful lives on a straight-line basis - 4 5 Management periodically assesses the estimated useful life over which assets are depreciated or amortized. If the analysis warrants a change in the estimated useful life of property and equipment, management will reduce the estimated useful life and depreciate or amortize the carrying value prospectively over the shorter remaining useful life. The carrying amounts of assets sold or retired and the related accumulated depreciation are eliminated in the period of disposal and the resulting gains and losses are included in the results of operations during the same period. We capitalize certain costs related to software developed for internal-use, primarily associated with the ongoing development and enhancement of our technology platform. Costs incurred in the preliminary development and post-development stages are expensed. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally five years. |
Right of use assets and lease liability | xii. Right of use assets and lease liability The Company has entered into lease agreements for a certain facility and certain items of equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. At inception of the lease agreement, the Company assesses whether the agreement conveys the right to control the use of an identified asset for a period in exchange for consideration, in which case it is classified as a lease. Each lease is further analysed to check whether it meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated balance sheet with a corresponding lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. The Company has elected not to recognize lease assets and lease liabilities for short-term leases (leases with a term of 12 months or less) and leases of low-value assets. Lease right-of-use assets, net and lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available as of the lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Finance lease interest expense is recognized based on an effective interest method and depreciation of assets is recorded on a straight-line basis over the shorter of the lease term and useful life of the asset. Both operating and finance lease right of use assets are reviewed for impairment, consistent with other long-lived assets, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. After a right of use asset is impaired, any remaining balance of the asset is amortized on a straight-line basis over the shorter of the remaining lease term or the estimated useful life. |
Impairment of Long-Lived Assets | xiii. Impairment of Long-Lived Assets The Company evaluates the recoverability of tangible assets periodically by taking into account events or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. There were no |
Goodwill and Other Intangible Assets | xiv. Goodwill and Other Intangible Assets The Company’s methodology for allocating the purchase price of an acquisition is based on established valuation techniques that reflect the consideration of a number of factors, including a valuation performed by a third-party appraiser. Goodwill is measured as the excess of the cost of an acquired business over the fair value assigned to identifiable assets acquired and liabilities assumed. Goodwill is considered impaired when the estimated fair value of the reporting unit that was allocated the goodwill is less than its carrying value. If the estimated fair value of such reporting unit is less than its carrying value, goodwill impairment is recognized based on that difference, not to exceed the carrying amount of goodwill. A reporting unit is an operating segment or a component of an operating segment provided that the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. Finite-lived intangible assets are amortized over their estimated useful life, which is the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the Company. Intangible assets should be tested for impairment at the time of a triggering event, if one were to occur. Finite-lived intangible assets may be impaired when the estimated undiscounted future cash flows generated from the assets are less than their carrying amounts. |
Stock-based Compensation | xv. Stock-based Compensation The Company measures all equity-based payment arrangements to employees and directors in accordance with ASC 718, Compensation–Stock Compensation. The Company’s stock-based compensation cost is measured based on the fair value at the grant date of the stock-based award. It is recognized as expense on a straight-line basis over the requisite service period for the entire award. Forfeitures are recognized as they occur. The Company estimates the fair value of each stock-based award on its measurement date using either the current market price of the stock or Black-Scholes option valuation model, whichever is most appropriate. The Black-Scholes valuation model incorporates assumptions such as expected term of the instrument, volatility of the Company’s future share price, risk free rates, future dividend yields and estimated forfeitures at the initial grant date, by reference to the underlying terms of the instrument, and the Company’s experience with similar instruments. Changes in assumptions used to estimate fair value could result in materially different results. The shares of the Company were listed on the stock exchange for a limited period of the time and also the stock price has dropped significantly from the date of listing, based on which the Company has considered the expected volatility at 100 |
Fair Value Measurements | xvi. Fair Value Measurements The Company utilizes the fair value hierarchy to apply fair value measurements. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair values that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. The basis for fair value measurements for each level within the hierarchy is described below: Level 1 — Quoted prices for identical assets or liabilities in active markets. Level 2 — Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 —Valuations derived from valuation techniques in which one or more significant inputs to the valuation model are unobservable. |
Revenue Recognition | xvii. Revenue Recognition SHF recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which SHF expects to be entitled in exchange for those goods or services. ASC 606 defines a five-step process to achieve this core principle including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Revenue is recorded at a point in time when the performance obligation is satisfied, and no contingencies exist. Revenue consists primarily of fees earned on deposit accounts held at PCCU but serviced by SHF such as bank account charges, onboarding income, account activity fee income and other miscellaneous fees. In addition, SHF recognizes revenue from the Master Program Agreement. The Master Program Agreement is a non-exclusive and non-transferable right to implement and utilize the Safe Harbor Program. The Safe Harbor Program has two performance obligations; an implementation fee recognized when the contract is effective and a service fee recognized ratable over the contract term as the compliance program is executed. Lastly, SHF also records revenue for interest on loans and investment income allocated by PCCU based on specific customer balances. Amounts received in advance of the service being provided is recorded as a liability under deferred revenue on the consolidated balance sheets. Typical Safe Harbor Program contracts are three-year contracts with amounts due monthly, quarterly or annually based on contract terms. Customers consist of financial institutions providing services to CRBs. Revenues are concentrated in the United States. |
Contract Assets / Contract Liabilities | xviii. Contract Assets / Contract Liabilities A contract asset is the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer. Conversely, the Company recognizes a contract liability if the customer’s payment of consideration precedes the reporting entity’s performance. As of December 31, 2022, the Company reported contract assets and contract liabilities of $ 21,170 996 18,317 8,333 8,333 |
Advertising/Marketing Costs | xix. Advertising/Marketing Costs Advertising/marketing costs are expensed as incurred. For the years ended December 31, 2022, and December 31, 2021, advertising/marketing costs were $ 380,669 74,282 |
Warrants Liability | xx. Warrants Liability The Company accounts for the warrants assumed in the business combination in accordance with the guidance contained in ASC Topic 815, “Derivatives and Hedging” (“ASC 815”), under which warrants that do not meet the criteria for equity classification and must be recorded as derivative liabilities. Accordingly, the Company classifies the warrants as liabilities carried at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the consolidated statement of operations. |
Forward purchase derivative | xxi. Forward purchase derivative The Company accounts for the forward purchase derivative assumed in the business combination in accordance with the guidance contained in ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The Company classifies the forward purchase derivative as an asset or liability carried at fair value and adjusts the forward purchase derivative to fair value at each reporting period. This derivative asset or liability is subject to re-measurement at each balance sheet date until the conditions under the forward purchase agreement are exercised or expire, and any change in fair value is recognized in the consolidated statement of operations. |
Earnings Per Share | xxii. Earnings Per Share Basic and diluted earnings per share are computed and disclosed in accordance with ASC Topic 260, Earnings Per Shares. The Company utilizes the two-class method to compute earnings available to common shareholders. Under the two-class method, earnings are adjusted by accretion amounts to redeemable noncontrolling interests recorded at redemption value. The adjustments represent dividend distributions, in substance, to the noncontrolling interest holder as the holders have contractual rights to receive an amount upon redemption other than the fair value of the applicable shares. As a result, earnings are adjusted to reflect this in substance distribution that is different from other common shareholders. In addition, the Company allocates net earnings to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company’s participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders (Refer to Note 16). Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocated to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards. |
Income Tax | xxiii. Income Tax Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are adjusted through the provision for income taxes as changes in tax laws or rates are enacted. Prior to the merger, the Company was a pass-through entity for tax purposes. Effective September 28, 2022, the Company complies with the accounting and reporting requirements of ASC Topic 740, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. PCCU was exempt from most federal, state, and local taxes under the provisions of the Internal Revenue Code and state tax laws. However, PCCU was subject to unrelated business income tax. The Carved-Out Operations were wholly owned by PCCU and therefore, were exempt from most federal and state income taxes. The ASC Topic 740, “Income Taxes,” under US GAAP clarifies accounting for uncertainty in income taxes reported in the financial statements. The interpretation provides criteria for assessment of individual tax positions and a process for recognition and measurement of uncertain tax positions. Tax positions are evaluated on whether they meet the “more likely than not” standard for sustainability on examination by tax authorities. The Company’s Management has determined there are no material uncertain tax positions. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate applied to year to date income in interim periods. If management is unable to estimate a portion of its ordinary income, but is otherwise able to reliably estimate the remainder, ASC 740-270-25-3 provides that the tax applicable to that item be reported in the interim period in which the item occurs. The tax (or benefit) related to ordinary income (or loss) shall be computed at an estimated annual effective tax rate and the tax (or benefit) related to all other items shall be individually computed and recognized when the items occur. Management is unable to estimate a portion of its ordinary income and as a result had computed the company’s tax provision in accordance with ASC 740-270-25-3. The Company’s effective tax rate was 20.85 0.00 21 ASC Topic 740 also prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no no |
Offering Costs | xxiv. Offering Costs Offering costs consisted of legal, accounting, underwriting fees and other costs incurred that were directly related to the PIPE offering. Offering costs are allocated to the separable financial instruments issued based on a relative fair value basis, compared to total proceeds received. Offering costs associated with warrant liabilities are expensed as incurred, presented as offering costs allocated to warrants in the statements of operations. Offering costs associated with the Public Shares were charged to Parent-Entity Net Investment and Stockholders’ Equity upon the completion of the Initial Public Offering. |
Recently Issued Accounting Standards | xxv. Recently Issued Accounting Standards From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective are not expected to have a material impact on the Company’s financial position or results of operations upon adoption. Adopted Standards Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In August 2020, the FASB issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, ASU 2020-06 removes from U.S. GAAP the liability and equity separation model for convertible instruments with a cash conversion feature, and as a result, after adoption, entities will no longer separately present in equity an embedded conversion feature for such debt. Similarly, the embedded conversion feature will no longer be amortized into income as interest expense over the life of the instrument. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. ASU 2020-06 was effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. The Company adopted the new standard during fiscal year 2022 with no material impact. Lease Accounting FASB ASU 2016-02, Leases, (“ASC 842”) and related amendments, require lessees to recognize a right-of-use asset and a lease liability for substantially all leases and to disclose key information about leasing arrangements and aligns certain underlying principles of the lessor model with the revenue standard. The Company adopted this guidance during fiscal year 2022 using the optional transition method, which allows entities to apply the guidance at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings, if any, in the period of adoption with no restatement of comparative periods. At the January 1, 2022 adoption date, there were no leases outstanding that met criteria for recognition. The Company has since recognized any leases in accordance with ASC 842 by recording right-of-use assets and operating lease liabilities on the balance sheet. Standards Pending to be Adopted Financial Instruments—Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduces a model based on expected losses to estimate credit losses for most financial assets and certain other instruments. In November 2019, the FASB issued ASU No. 2019-10 Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). The update allows the extension of the initial effective date for entities which have not yet adopted ASU No. 2016-02. The standard is effective for annual reporting periods beginning after December 15, 2022 for private companies and SEC filers classified as smaller reporting entities, with early adoption permitted. Entities apply the standard’s provisions by recording a cumulative effect adjustment to retained earnings. The Company has not adopted ASU 2016-13 as of December 31, 2022; however, it has adopted this standard as of January 1, 2023 and the ASU has not had a material impact on the Company’s financial statements. Troubled Debt Restructurings and Vintage Disclosures This Accounting Standard Update (ASU 2022-02) eliminates the recognition and measurement guidance on troubled debt restructurings for creditors that have adopted ASC 326 and requires them to make enhanced disclosures about loan modifications for borrowers experiencing financial difficulty. The new guidance also requires public business entities to present current period gross write-offs (on a current year-to-date basis for interim-period disclosures) by year of origination in their vintage disclosures. For entities that have adopted ASU 2016-13, this ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company has not adopted ASU 2022-02 as of December 31, 2022; however, it has adopted this standard as of January 1, 2023 and the ASU has not had a material impact on the Company’s financial statements. Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions This Accounting Standard Update (ASU 2022-03) clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered when measuring fair value. Recognizing a contractual restriction on the sale of an equity security as a separate unit of account is not permitted. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company does not expect this ASU to have a material impact on its consolidated financial statements. Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 This Accounting Standard Update (ASU 2022-06) defers the Sunset Date of ASC Topic 848, Reference Rate Reform (Topic 848), which provides temporary optional relief in accounting for the impact of Reference Rate Reform. This ASU is effective upon issuance (December 21, 2022) and generally can be applied through December 31, 2024. The Company does not expect this ASU to have a material impact on its consolidated financial statements. |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Fair Value Net Assets | Schedule of Fair Value Net Assets Cash & Cash Equivalents $ 2,879 Prepaid Expense 15,000 Cash held in Trust 118,738,861 Deferred offering cost 266,240 Accounts Payable (1,374,021 ) Accrued Expense (1,202,164 ) Advance from sponsor (1,150,000 ) Deferred underwriter payable (4,025,000 ) Forward purchase derivative (795,942 ) Warrant Liability (1,394,453 ) Class A Common Stock subject to possible redemption (79,259,819 ) Fair value of net assets acquired $ 29,821,581 |
Schedule of Fair Value Consideration | Schedule of Fair Value Consideration Company’s Class A common stock comprises of 11,386,139 $ 115,000,000 Cash consideration 13,050,199 Deferred cash consideration 56,949,801 Total fair value of consideration $ 185,000,000 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Acquisition [Line Items] | |
Schedule of Purchase Price Allocation | The following table summarizes the purchase price allocation: Schedule of Purchase Price Allocation Property, plant & equipment $ 27,117 Software 9,189 Cash & cash equivalents 245,524 Prepaid expense 23,061 Security deposit 675 Accounts receivables 232,265 Accounts Payable (206,508 ) Accrued Expense (235,894 ) Fair value of net assets acquired $ 95,429 Other intangibles 10,800,000 Goodwill 19,266,276 Deferred tax liabilities (1,758,769 ) Total purchase consideration $ 28,402,936 |
Schedule of Fair Value Consideration | Schedule of Fair Value Consideration Company’s Class A common stock comprises of 11,386,139 $ 115,000,000 Cash consideration 13,050,199 Deferred cash consideration 56,949,801 Total fair value of consideration $ 185,000,000 |
Schedule of Intangible Assets and Related Useful Lives as Included in Purchase Price Allocation | Schedule of Intangible Assets and Related Useful Lives as Included in Purchase Price Allocation Amount Useful life in Years Market related intangible assets $ 2,100,000 8 Customer relationships 2,000,000 10 Developed technology 6,700,000 10 Fair value of consideration $ 10,800,000 |
Schedule of Proforma Information of Operations | The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2022, the earliest period presented herein: Schedule of Proforma Information of Operations For the Year Ended December 31, 2022 2021 Revenue $ 12,565,608 $ 10,606,011 Net Income (Loss) (37,720,687 ) 2,922,213 |
Abacha [Member] | |
Business Acquisition [Line Items] | |
Schedule of Fair Value Consideration | The following table summarizes the total fair value of consideration: Schedule of Fair Value Consideration Cash paid $ 2,763,800 Deferred cash payment 5,452,424 Share issued – common stock ( 2,099,977 8,105,911 Settlement of pre-existing notes along with accrued interest 523,404 Future consideration settled in common stock 11,557,397 Fair value of consideration $ 28,402,936 |
Goodwill and other intangibles
Goodwill and other intangibles (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Carrying Amount of Goodwill | The change in the carrying amount of goodwill from December 31, 2021, to December 31, 2022, is as follows: Schedule of Carrying Amount of Goodwill December 31, 2021 $ - Acquisition of Abaca 19,266,276 December 31, 2022 $ 19,266,276 |
Schedule of Finite Lived Intangible Assets | The Company’s finite lived intangible assets are amortized on a straight-line basis over their estimated useful lives. Following is a summary of the Company’s finite-lived intangible assets as of December 31, 2022. Schedule of Finite Lived Intangible Assets Acquired in acquisition Amortization Finite-lived intangible assets, net Remaining Useful life in Years December 31, 2021 Acquired in acquisition Amortization December 31, 2022 Market related intangible assets 8 - $ 2,100,000 $ 33,082 $ 2,066,918 Customer relationships 10 - 2,000,000 25,205 1,974,795 Developed technology 7 - 6,700,000 120,626 6,579,374 Total intangible assets $ 10,800,000 $ 178,913 $ 10,621,087 |
Loans Receivable (Tables)
Loans Receivable (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Commercial Real Estate Loans Receivable | Commercial real estate loans receivable, net consist of the following: Schedule of Commercial Real Estate Loans Receivable December 31, 2022 December 31, 2021 Commercial real estate loans receivable, gross $ 1,432,560 $ 1,478,301 Less: loan origination charges (109,081 ) - Commercial real estate loans receivable, net 1,323,479 1,478,301 Allowance for loan losses (21,488 ) (14,741 ) Commercial real estate loans receivable, net 1,301,991 1,463,560 Current portion (51,300 ) (52,833 ) Noncurrent portion $ 1,250,691 $ 1,410,727 |
Schedule of Allowance For Loan Losses | The allowance for loan losses consists of the following activity for the year ended December 31, 2022 and 2021: Schedule of Allowance For Loan Losses December 31, 2022 December 31, 2021 Allowance for loan losses Beginning balance $ 14,741 $ 13,342 Charge-offs - - Recoveries - - Provision 6,747 1,399 Ending balance $ 21,488 $ 14,741 Loans receivable: Individually evaluated for impairment $ - $ - Collectively evaluated for impairment 1,432,560 1,478,301 $ 1,432,560 $ 1,478,301 Allowance for loan losses: Individually evaluated for impairment $ - $ - Collectively evaluated for impairment 21,488 14,741 $ 21,488 $ 14,741 |
Indemnification liability (Tabl
Indemnification liability (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Indemnification Liability | |
Schedule of Outstanding Amounts | Schedule of Outstanding Amounts December 31, 2022 Secured term loans $ 18,400,000 Unsecured loans and lines of credit 498,042 Total loans funded by Parent $ 18,898,042 |
Schedule of Indemnity Liability | The indemnity liability activity on December 31, 2022, is as follows: Schedule of Indemnity Liability Year ended December 31, 2022 Beginning balance $ - Charge-offs - Recoveries - Provision 499,465 Ending balance $ 499,465 |
Schedule of Provision for Loan Losses | The provision for loan losses on the statement of operations consists of the following activity for the year ended December 31, 2022 and December 31, 2021: Schedule of Provision for Loan Losses Commercial real estate loans Indemnity liability Total Commercial real estate loans Indemnity liability Total December 31, 2022 December 31, 2021 Commercial real estate loans Indemnity liability Total Commercial real estate loans Indemnity liability Total Provision (benefit) $ 6,747 499,465 $ 506,212 $ 1,399 - $ 1,399 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consist of the following: Schedule of Property and Equipment, Net December 31, 2022 December 31, 2021 Equipment $ 45,397 $ 28,080 Software 51,692 - Improvement 71,635 - Office furniture 7,070 7,070 Property and equipment, gross 175,794 35,150 Less: accumulated depreciation (126,180 ) (28,799 ) Property and equipment, net $ 49,614 $ 6,351 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Schedule of Demonstrates Deposit Capacity | Schedule of Demonstrates Deposit Capacity December 31, 2022 (Unaudited) December 31, 2021 (Unaudited) PCCU total assets $ 695,072,554 $ 575,170,939 Capacity at 65% 451,797,160 373,861,110 CRB related deposits 161,138,975 146,267,976 Incremental capacity $ 290,658,185 $ 227,593,134 |
Loan Servicing Agreement [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Schedule of Demonstrates Deposit Capacity | Schedule of Demonstrates Deposit Capacity December 31, 2022 (Unaudited) December 31, 2021 (Unaudited) CRB related deposits $ 161,138,975 $ 146,267,976 Capacity at 65% 104,740,334 95,074,184 PCCU net worth 133,231,565 61,925,336 Capacity at 1.3125 174,866,429 81,277,004 Limiting capacity 174,866,429 81,277,004 PCCU loans funded 18,898,042 - Amounts available under lines of credit 996,958 225,000 Incremental capacity $ 154,971,429 $ 81,052,004 |
Due to Seller (Tables)
Due to Seller (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Due To Seller | |
Schedule of Amounts Due to Seller | At December 31, 2022 amounts due to seller were as follows: Schedule of Amounts Due to Seller Due to Seller-Current (Unsecured) $ 25,973,017 Due to Seller-Non-Current (Unsecured) 30,976,783 $ 56,949,800 |
Schedule of Repayment of the Amount Outstanding | The loan includes 5% interest annualized using the simple interest method and an approximate 4.71% effective interest rate. Repayment schedule of the amount outstanding on December 31,2022 are as follows: Schedule of Repayment of the Amount Outstanding Date of payment June 13, 2023 $ 21,949,801 October 1, 2023 4,023,216 January 1, 2024 6,048,819 April 1, 2024 6,123,866 July 1, 2024 6,195,796 October 1, 2024 6,266,944 January 1, 2025 6,341,358 Grand total $ 56,949,800 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of Lease Cost,Right of Use Assets Related to Lease and Future Minimum Lease Payments | Schedule of Lease Cost,Right of Use Assets Related to Lease and Future Minimum Lease Payments Year ended December 31, 2022 Year ended December 31, 2021 Operating lease cost $ - $ - Short-term lease cost 99,246 - Total Lease Cost $ 99,246 - ROU assets that are related to lease properties are presented as follows: Beginning balance $ - $ - Additions to right-of-use assets 1,029,226 - Amortization charge for the year (13,028 ) - Lease modifications - - Ending balance $ 1,016,198 $ - Further information related to leases is as follows: Weighted-average remaining lease term 4.42 - Weighted-average discount rate 6.87 % - Future minimum lease payments as of December 31, 2022 are as follows: Year 2023 $ 91,303 $ - 2024 197,520 - 2025 217,925 - 2026 222,275 - 2027 226,705 - Thereafter 348,926 - Total future minimum lease payments $ 1,304,654 $ - Less: Imputed interest 276,421 - Operating lease liabilities $ 1,028,233 $ - Less: Current portion 20,124 - Non-current portion of lease liabilities $ 1,008,109 $ - |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | Revenue by type are as follows: Schedule of Disaggregated Revenue Year Ended December 31, 2022 2021 Deposit, activity, onboarding income $ 6,063,939 $ 6,039,358 Safe Harbor Program income 164,062 478,041 Investment income 2,120,640 376,918 Loan interest income 1,130,178 102,961 Miscellaneous fee income - 8,301 Total Revenue $ 9,478,819 $ 7,005,579 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Schedule of Other Current Assets Year Ended December 31, 2022 Advance to capital supplier $ 93,517 Advance to other 57,300 Total $ 150,817 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule Of Earning Per Shares, Basic And Diluted | Schedule Of Earning Per Shares, Basic And Diluted For year Ended December 31 2022 Net loss $ (35,128,083 ) Weighted average shares outstanding – basic 18,988,558 Basic net earnings per share $ (1.85 ) Weighted average shares outstanding – diluted 18,988,558 Diluted net earnings (loss) per share $ (1.85 ) Weighted average shares calculation December 31, 2022 Company public shares 3,926,598 Company initial stockholders 3,403,175 PCCU stockholders 11,386,139 Shares issued for Abaca acquisition 264,654 Conversion of Preferred stock 7,992 Weighted average shares outstanding 18,988,558 |
Schedule of Awards Excluded | Schedule of Awards Excluded December 31, 2022 Warrants 7,036,588 Share based payments 2,170,000 Shares to be issued to Abaca acquisition 6,433,839 Conversion of Preferred stock 13,443,000 Total 29,083,427 |
Forward Purchase Agreement (Tab
Forward Purchase Agreement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Forward Purchase Agreement | |
Schedule of Forward Purchase Agreeement | Schedule of Forward Purchase Agreeement On the date of acquisition (September 28, 2022) Share sold during the period September 29, 2022 to December 31, 2022 As at December 31, 2022 S.no Name of the party Opening Shares (a) Amount Shares (b) Amount Shares (c=a-b) Rest price (iii) Amount (c x iii) 1 Vellar 1,025,000 $ 10,583,246 53,796 $ 524,472 971,204 1.25 $ 1,214,005 2 Midtown East 1,599,496 16,514,986 81,572 832,850 1,517,924 1.25 1,897,405 3 Verdun 1,180,376 12,187,522 2,127 21,962 1,178,249 1.25 1,472,811 Grand total 3,804,872 $ 39,285,754 137,495 $ 1,379,284 3,667,377 $ 4,584,221 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, All Other Investments [Abstract] | |
Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis | The following tables summarize financial assets and liabilities recorded at fair value on a recurring basis, by the level of valuation inputs in the fair value hierarchy on December 31, 2022: Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Unobservable Inputs (Level 3) Description Liabilities: Public warrants $ 361,100 361,100 - Private placement warrants 19,110 - 19,110 PIPE Warrants 286,300 - 286,300 Forward purchase option derivative 7,309,580 - 7,309,580 |
Schedule of Carrying Amounts and Fair Values of Financial Instruments by the Level of Valuation Inputs in the Fair Value Hierarchy | The following tables present the carrying amounts and fair values of financial instruments, by the level of valuation inputs in the fair value hierarchy, as of the dates indicated: Schedule of Carrying Amounts and Fair Values of Financial Instruments by the Level of Valuation Inputs in the Fair Value Hierarchy As on December 31, 2022 Carrying amount Fair value Fair value measurement using Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 8,390,195 $ 8,390,195 $ 8,390,195 - - Forward purchase receivables 4,584,221 4,584,221 4,584,221 - Loans 1,301,991 1,241,761 - - 1,241,761 Liabilities Deferred consideration 14,359,822 14,359,822 14,359,822 - - Due to seller - current portion 25,973,017 25,973,017 25,973,017 - - Due to seller - long term position 30,976,783 30,976,783 30,976,783 - - Deferred underwriter fee payable 1,450,500 1,450,500 1,450,500 - - Indemnity liability 499,465 499,465 499,465 - - Public warrants 361,100 361,100 361,100 - - Private placement warrants 19,110 19,110 - - 19,110 PIPE Warrants 286,300 286,300 - - 286,300 Forward purchase derivative 7,309,580 7,309,580 - - 7,309,580 As on December 31, 2021 Carrying amount Fair value Fair value measurement using Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 5,495,905 $ 5,495,905 $ 5,495,905 - - Loans 1,463,560 1,417,637 - - 1,417,637 |
Schedule of Fair Value Assets Measured on Recurring Basis | The change in the assets measured at fair value on a recurring basis for which we have utilized Level 3 inputs to determine fair value are presented in the following table: Schedule of Fair Value Assets Measured on Recurring Basis PIPE Warrants Private Placement Warrants Forward purchase derivative As on December 31, 2022 PIPE Warrants Private Placement Warrants Forward purchase derivative Balance at the beginning of the period $ - - - Acquired under business combination - 203,112 (1,687,530 ) Fair value adjustment 286,300 (184,002 ) 8,997,110 Balance at the end of the period $ 286,300 19,110 7,309,580 |
Schedule of Level 3 Fair Value Measurement Inputs | The following table provides quantitative information regarding Level 3 fair value measurements inputs as it relates to the private placement warrants and public warrants as of their measurement dates: Schedule of Level 3 Fair Value Measurement Inputs As on December 31,2022 PIPE Warrants Private placement warrants Exercise price $ 5.00 $ 11.50 Share Price $ 1.78 $ 1.78 Expected term (years) 4.74 4.74 Volatility 46.00 % 46.00 % Risk-free rate 4.00 % 3.98 % The following table provides quantitative information regarding Level 3 fair value measurements inputs as it relates to the forward purchase derivatives as of their measurement dates: December 31, 2022 Reset Price $ 1.25 Expected term (years) 2.74 Additional maturity consideration per share $ 2.00 Volatility 46 % Risk-free rate 4.2 % Risk-adjusted discount rate 13.4 % |
Tax (Tables)
Tax (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Major Components of Income tax | The major components of income tax for the year ended December 31, 2022, are as follows: Schedule of Major Components of Income tax For year ended December 31, 2022 Current income Tax: Current tax on profits $ (3,394 ) Tax regarding prior years - Deferred tax: Deferred taxation - current year (9,249,499 ) Deferred taxation - prior years - Income tax benefit reported in the income statement $ (9,252,893 ) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation follows between tax benefit and the product of accounting profit multiplied by the United States domestic tax rate for the years ended December 31, 2022: Schedule of Effective Income Tax Rate Reconciliation For year ended December 31, 2022 Accounting loss before tax from continuing operations $ (44,380,976 ) Accounting loss before income tax (44,380,976 ) At federal statutory income tax rate of 21% (9,320,005 ) State income tax benefit, net of federal benefit (1,304,510 ) Remeasurement of deferred taxes due to US tax legislative changes - Permanent differences, net 1,787,471 UTP withholding - Other (415,849 ) Valuation allowance charges affecting the provision for income taxes - Total $ (9,252,893 ) |
Schedule of Deferred Tax Assets and Liabilities | Deferred taxes are comprised of the following: Schedule of Deferred Tax Assets and Liabilities December 31, 2022 Loan loss reserve $ 127,508 Stock option conversion 686,879 Deferred revenue 251 Transaction costs 817,322 Change in value of forward purchase contract 8,155,953 Goodwill on Abaca 42,551,111 NOL carryforward 1,862,394 Lease liabilities 251,670 Deferred tax assets $ 54,453,088 Property, plant and equipment, net $ (11,444 ) Operating lease right to use assets (248,725 ) Intangible Assets (2,599,617 ) Deferred tax liabilities $ (2,859,786 ) Net deferred tax assets / (liabilities) $ 51,593,302 Reflected in the statement of financial position as follows: Deferred tax assets 54,453,088 Deferred tax liabilities (2,859,786 ) Deferred tax assets net 51,593,302 |
Share based compensation (Table
Share based compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Fair Value of Options Granted Black-Scholes-Merton Model | The assumptions used to determine the fair value of options granted in the year ended December 31, 2022, using the Black-Scholes-Merton model are as follows: Schedule of Fair Value of Options Granted Black-Scholes-Merton Model Dividend yield 0 % Risk-free interest rate 3.62 4.23 % Expected volatility (weighted-average and range, if applicable) 100 % Expected term 6 6.5 |
Schedule of Stock Options | The summary of stock option activity as of and for the year ended December 31, 2022 is presented below: Schedule of Stock Options Stock Options Shares Weighted Average Exercise Price Weighted-Average Remaining Contractual Life (in Years) December 31, 2021 - - - Granted 2,170,000 5.29 2.02 Exercised - - - Expired - - - Cancelled / Forfeited - - - December 31, 2022 2,170,000 5.29 2.02 |
Schedule of Exercise Price Options | At December 31, 2022, the following options were outstanding at their respective exercise price: Schedule of Exercise Price Options Exercise price options outstanding $1.56 87,500 $2.58 350,000 $4.00 482,500 $6.67 1,250,000 Total 2,170,000 |
Organization and Business Ope_2
Organization and Business Operations (Details Narrative) - USD ($) | 12 Months Ended | ||||||||
Mar. 29, 2023 | Nov. 15, 2022 | Oct. 31, 2022 | Sep. 28, 2022 | Sep. 28, 2022 | Feb. 11, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Jul. 31, 2021 | |
Business combination, consideration transferred | $ 10,850,000 | ||||||||
Payments to acquire businesses | $ 2,763,800 | 3,041,680 | |||||||
Cash and Cash Equivalents, at Carrying Value | 8,390,195 | $ 5,495,905 | |||||||
Stock issued during period, value, acquisitions | 8,105,911 | $ 8,105,911 | |||||||
Subsequent Event [Member] | |||||||||
Secured debt | $ 56,949,800 | ||||||||
Debt instrument, face amount | $ 14,500,000 | ||||||||
Debt instrument, interest rate, effective percentage | 4.25% | ||||||||
Stock issued during period, shares, new issues | 11,200,000 | ||||||||
Safe Harbour Financial LLC [Member] | |||||||||
Equity method investment, ownership percentage | 43.20% | 43.20% | |||||||
Safe Harbour Financial LLC [Member] | |||||||||
Business combination, consideration transferred | $ 185,000,000 | $ 185,000,000 | |||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 115,000,000 | ||||||||
Payments to acquire businesses | 70,000,000 | 70,000,000 | $ 70,000,000 | ||||||
Deferred costs | $ 56,949,801 | $ 56,949,801 | |||||||
Cash and Cash Equivalents, at Carrying Value | $ 3,143,388 | ||||||||
Safe Harbour Financial LLC [Member] | Common Class A [Member] | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 11,386,139 | 11,386,139 | 11,386,139 | ||||||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | $ 115,000,000 | $ 115,000,000 | |||||||
[custom:SharesToBeHeldInEscrow] | 1,831,683 | ||||||||
Abacha [Member] | |||||||||
Outstanding note balance plus accrued interest | 500,000 | ||||||||
Abacha [Member] | Merger Agreement [Member] | |||||||||
Business combination, consideration transferred | 30,000,000 | $ 30,000,000 | |||||||
Payments to acquire businesses | 9,000,000 | 9,000,000 | |||||||
Outstanding note balance plus accrued interest | 500,000 | 500,000 | |||||||
Abacha [Member] | Merger Closing [Member] | |||||||||
Payments to acquire businesses | 3,000,000 | 3,000,000 | |||||||
Abacha [Member] | One Year Anniversary [Member] | |||||||||
Payments to acquire businesses | 3,000,000 | 3,000,000 | |||||||
Abacha [Member] | Two Year Anniversaries [Member] | |||||||||
Payments to acquire businesses | $ 3,000,000 | $ 3,000,000 | |||||||
Abacha [Member] | Common Class A [Member] | Merger Agreement [Member] | |||||||||
Stock issued during period, shares, acquisitions | 2,100,000 | 2,100,000 | |||||||
Stock issued during period, value, acquisitions | $ 12,600,000 | $ 12,600,000 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Feb. 11, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Cash and cash equivalent | $ 8,390,195 | $ 5,495,905 | |
Working capital | 39,340,020 | 5,922,023 | |
Long term debt | 25,973,017 | ||
Deferred compensation | $ 14,359,822 | ||
Percentage of loans receivables | 10% | ||
Accounts receivable percentage | 85% | 100% | |
Allowance for doubtful accounts | $ 0 | $ 0 | |
Exchange of annual rate of interest | 0.25% | ||
Impairment of long-lived asset | $ 0 | 0 | |
Expected volatility rate | 100% | ||
Contract assets | $ 21,170 | 18,317 | |
Contract liabilities | 996 | 8,333 | |
Revenue recognized | 8,333 | ||
Advertising/Marketing costs | $ 380,669 | $ 74,282 | |
Effective tax rate | 20.85% | 0% | |
Statutory tax rate | 21% | ||
Unrecognized tax benefits | $ 0 | $ 0 | |
Accrued for interest and penalties, amount | $ 0 | $ 0 | |
Equipment and Furniture and Fixtures [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment useful life | 4 years | ||
Equipment and Furniture and Fixtures [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment useful life | 5 years |
Schedule of Fair Value Net Asse
Schedule of Fair Value Net Assets (Details) - Safe Harbour Financial LLC [Member] | Sep. 28, 2022 USD ($) |
Business Acquisition [Line Items] | |
Cash & Cash Equivalents | $ 2,879 |
Prepaid Expense | 15,000 |
Cash held in Trust | 118,738,861 |
Deferred offering cost | 266,240 |
Accounts Payable | (1,374,021) |
Accrued Expense | (1,202,164) |
Advance from sponsor | (1,150,000) |
Deferred underwriter payable | (4,025,000) |
Forward purchase derivative | (795,942) |
Warrant Liability | (1,394,453) |
Class A Common Stock subject to possible redemption | (79,259,819) |
Fair value of net assets acquired | $ 29,821,581 |
Schedule of Fair Value Consider
Schedule of Fair Value Consideration (Details) - USD ($) | 12 Months Ended | |||||
Nov. 15, 2022 | Sep. 28, 2022 | Sep. 28, 2022 | Feb. 11, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Total fair value of consideration | $ 10,850,000 | |||||
Cash paid | $ 2,763,800 | 3,041,680 | ||||
Deferred cash payment | 5,452,424 | |||||
Share issued – common stock (2,099,977 shares) | 8,105,911 | $ 8,105,911 | ||||
Settlement of pre-existing notes along with accrued interest | 523,404 | |||||
Future consideration settled in common stock | 11,557,397 | |||||
Fair value of consideration | $ 28,402,936 | |||||
Safe Harbour Financial LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Company’s Class A common stock comprises of 11,386,139 shares | $ 115,000,000 | |||||
Cash consideration | 13,050,199 | |||||
Deferred cash consideration | 56,949,801 | |||||
Total fair value of consideration | 185,000,000 | $ 185,000,000 | ||||
Cash paid | $ 70,000,000 | $ 70,000,000 | $ 70,000,000 |
Schedule of Fair Value Consid_2
Schedule of Fair Value Consideration (Details) (Parenthetical) - shares | 12 Months Ended | |
Sep. 28, 2022 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Common stock comprises, shares | 11,386,139 | |
Common Stock [Member] | Abacha [Member] | ||
Business Acquisition [Line Items] | ||
Common stock, shares | 2,099,977 |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) | 12 Months Ended | ||||||||
Nov. 15, 2022 | Sep. 28, 2022 | Sep. 28, 2022 | Feb. 11, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 06, 2023 | Jan. 25, 2023 | Jul. 31, 2021 | |
Business Acquisition [Line Items] | |||||||||
Business combination | $ 10,850,000 | ||||||||
Cash consideration | $ 2,763,800 | 3,041,680 | |||||||
Interest rate | 0.25% | ||||||||
Transferred to additional paid in capital | 2,806,336 | ||||||||
Acquisition of Abaca | $ 8,105,911 | 8,105,911 | |||||||
Goodwill | $ 44,102,572 | ||||||||
Preferred stock, shares authorized | 1,250,000 | 1,250,000 | |||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||||
Preferred stock, shares issued | 14,616 | 0 | |||||||
Preferred stock, shares outstanding | 14,616 | 0 | |||||||
Conversion price | $ 10 | ||||||||
Conversion of stock description | 80% of the volume weighted average price of the Class A Common Stock for the prior five trading days and (ii) $2.00 (the “Floor Price”), provided that, so long as a preferred stock holders continues to hold any preferred shares, such preferred stock holder will be entitled to receive the aggregate shares of Class A Common Stock that would be issuable based upon its initial purchase of preferred stock at the adjusted Conversion Price | ||||||||
Common stock, shares authorized | 130,000,000 | 130,000,000 | |||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||||
Common stock, shares issued | 23,732,889 | 0 | |||||||
Common stock, shares outstanding | 23,732,889 | 0 | |||||||
Maximum [Member] | Subsequent Event [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Share price | $ 2 | ||||||||
Minimum [Member] | Subsequent Event [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Share price | $ 1.25 | ||||||||
Board of Directors [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Preferred stock, shares authorized | 1,250,000 | ||||||||
Preferred stock, par value | $ 0.0001 | ||||||||
December 15, 2022 [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Deferred consideration payable | $ 21,949,800 | $ 21,949,800 | |||||||
Common Class A [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Share price | $ 18 | ||||||||
Common stock, shares authorized | 130,000,000 | ||||||||
Common stock, par value | $ 0.0001 | ||||||||
Common stock, shares outstanding | 3,667,377 | ||||||||
Common Class A [Member] | Subsequent Event [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Common stock, shares issued | 27,027,089 | ||||||||
Common stock, shares outstanding | 27,027,089 | ||||||||
Safe Harbour Financial LLC [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | $ 3,100,000 | ||||||||
Business combination | 185,000,000 | 185,000,000 | |||||||
Deferral amount | 56,949,800 | 56,949,800 | $ 56,900,000 | ||||||
Cash consideration | 70,000,000 | 70,000,000 | $ 70,000,000 | ||||||
Deferred consideration payable | 38,500,002 | 38,500,002 | |||||||
Interest rate | 4.71% | ||||||||
Deferred consideration payable | 1,200,000 | ||||||||
Transferred to additional paid in capital | $ 9,124,297 | ||||||||
Safe Harbour Financial LLC [Member] | December 15, 2022 [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Deferred consideration payable | 21,900,000 | ||||||||
Safe Harbour Financial LLC [Member] | After First Payment [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Deferred consideration payable | 35,000,000 | 35,000,000 | 35,000,000 | ||||||
Safe Harbour Financial LLC [Member] | Six Equal Installments [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Deferred consideration payable | $ 6,416,667 | $ 6,416,667 | $ 6,400,000 | ||||||
Safe Harbour Financial LLC [Member] | Common Class B [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of shares converted | 2,875,000 | ||||||||
Safe Harbour Financial LLC [Member] | Common Class A [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Number of shares issued in acquisition transaction | 11,386,139 | 11,386,139 | 11,386,139 | ||||||
Number of shares issuable upon conversion | 2,045,000 | ||||||||
Safe Harbour Financial LLC [Member] | Series A Convertible Preferred Stock [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition of Abaca, Acquisitions, shares | 20,450 | ||||||||
Acquisition of Abaca | $ 20,450,000 | ||||||||
Share price per share | $ 10 | ||||||||
Voting Stock Exceeding [Member] | Subsequent Event [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Voting stock exceeding | 20% |
Schedule of Purchase Price Allo
Schedule of Purchase Price Allocation (Details) - USD ($) | Dec. 31, 2022 | Nov. 15, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 19,266,276 | ||
Abacha [Member] | |||
Business Acquisition [Line Items] | |||
Property, plant & equipment | $ 27,117 | ||
Software | 9,189 | ||
Cash & cash equivalents | 245,524 | ||
Prepaid expense | 23,061 | ||
Security deposit | 675 | ||
Accounts receivables | 232,265 | ||
Accounts Payable | (206,508) | ||
Accrued Expense | (235,894) | ||
Fair value of net assets acquired | 95,429 | ||
Other intangibles | 10,800,000 | ||
Goodwill | 19,266,276 | ||
Deferred tax liabilities | (1,758,769) | ||
Total purchase consideration | $ 28,402,936 |
Schedule of Intangible Assets a
Schedule of Intangible Assets and Related Useful Lives as Included in Purchase Price Allocation (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of consideration | $ 10,800,000 |
Marketing-Related Intangible Assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of consideration | $ 2,100,000 |
Developed technology | 8 years |
Customer-Related Intangible Assets [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of consideration | $ 2,000,000 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Developed technology | 10 years |
Developed Technology Rights [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair value of consideration | $ 6,700,000 |
Developed technology | 10 years |
Schedule of Proforma Informatio
Schedule of Proforma Information of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenue | $ 12,565,608 | $ 10,606,011 |
Net Income (Loss) | $ (37,720,687) | $ 2,922,213 |
Acquisition (Details Narrative)
Acquisition (Details Narrative) - USD ($) | 12 Months Ended | |||
Nov. 15, 2022 | Oct. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Business combination, consideration transferred | $ 10,850,000 | |||
Payments to acquire businesses | $ 2,763,800 | 3,041,680 | ||
Stock issued during period, value, acquisitions | $ 8,105,911 | 8,105,911 | ||
Net losses before tax | (35,128,083) | $ 3,286,887 | ||
Acquisition costs | 236,200 | |||
Abacha [Member] | ||||
Business Acquisition [Line Items] | ||||
Acquisition transactions percentage | 100% | |||
Outstanding note balance plus accrued interest | $ 500,000 | |||
Business combination, cash consideration description | cash consideration in an amount equal to (i) $9,000,000 ($3,000,000 was payable at the closing of the Mergers (the “Merger Closing”), with an additional $3,000,000 payable at each of the one-year and two-year anniversaries of the Merger Closing), (collectively, the “Deferred Cash Consideration”); and | |||
Business acquisition, description | Common Stock equal to the lesser of (1) 2,100,000 shares or (2) a number of shares equal to (i) $8,400,000, divided by (ii) the Closing Parent Trading Price and $12,600,000 (minus an outstanding note balance of $500,000, plus accrued interest) in shares of Class A Common Stock at the one-year anniversary of the Merger Closing based on a 10-day VWAP (collectively, the “Future stock consideration”). | |||
Sales revenues | 491,149 | |||
Net losses before tax | $ 257,967 | |||
Abacha [Member] | Merger Agreement [Member] | ||||
Business Acquisition [Line Items] | ||||
Outstanding note balance plus accrued interest | $ 500,000 | $ 500,000 | ||
Business combination, consideration transferred | 30,000,000 | 30,000,000 | ||
Payments to acquire businesses | $ 9,000,000 | $ 9,000,000 | ||
Abacha [Member] | Merger Agreement [Member] | Common Class A [Member] | ||||
Business Acquisition [Line Items] | ||||
Stock issued during period, shares, acquisitions | 2,100,000 | 2,100,000 | ||
Stock issued during period, value, acquisitions | $ 12,600,000 | $ 12,600,000 | ||
Abacha [Member] | Merger Closing [Member] | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses | 3,000,000 | 3,000,000 | ||
Abacha [Member] | One Year Anniversary [Member] | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses | 3,000,000 | 3,000,000 | ||
Abacha [Member] | Two Year Anniversaries [Member] | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire businesses | $ 3,000,000 | $ 3,000,000 |
Schedule of Carrying Amount of
Schedule of Carrying Amount of Goodwill (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
December 31, 2021 | |
Acquisition of Abaca | 19,266,276 |
December 31, 2022 | $ 19,266,276 |
Schedule of Finite Lived Intang
Schedule of Finite Lived Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Net | $ 10,621,087 | |
Marketing-Related Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 2,100,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 33,082 | |
Finite-Lived Intangible Assets, Net | $ 2,066,918 | |
Developed technology | 8 years | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 2,000,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 25,205 | |
Finite-Lived Intangible Assets, Net | $ 1,974,795 | |
Developed technology | 10 years | |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 6,700,000 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 120,626 | |
Finite-Lived Intangible Assets, Net | $ 6,579,374 | |
Developed technology | 10 years | |
Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Developed technology | 7 years |
Goodwill and other intangible_2
Goodwill and other intangibles (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, impairment loss | $ 0 |
Schedule of Commercial Real Est
Schedule of Commercial Real Estate Loans Receivable (Details) - Commercial Real Estate Loans Receivable [Member] - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | ||
Commercial real estate loans receivable, gross | $ 1,432,560 | $ 1,478,301 |
Less: loan origination charges | (109,081) | |
Commercial real estate loans receivable, net | 1,323,479 | 1,478,301 |
Allowance for loan losses | (21,488) | (14,741) |
Commercial real estate loans receivable, net | 1,301,991 | 1,463,560 |
Current portion | (51,300) | (52,833) |
Noncurrent portion | $ 1,250,691 | $ 1,410,727 |
Schedule of Allowance For Loan
Schedule of Allowance For Loan Losses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Receivables [Abstract] | ||
Beginning balance | $ 14,741 | $ 13,342 |
Charge-offs | ||
Recoveries | ||
Provision | 6,747 | 1,399 |
Ending balance | 21,488 | 14,741 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 1,432,560 | 1,478,301 |
Total loans receivable | 1,432,560 | 1,478,301 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 21,488 | 14,741 |
Total allowance for loan losses | $ 21,488 | $ 14,741 |
Schedule of Outstanding Amounts
Schedule of Outstanding Amounts (Details) | Dec. 31, 2022 USD ($) |
Indemnification Liability | |
Secured term loans | $ 18,400,000 |
Unsecured loans and lines of credit | 498,042 |
Total loans funded by Parent | $ 18,898,042 |
Schedule of Indemnity Liability
Schedule of Indemnity Liability (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Indemnification Liability | |
Beginning balance | |
Charge-offs | |
Recoveries | |
Provision | 499,465 |
Ending balance | $ 499,465 |
Schedule of Provision for Loan
Schedule of Provision for Loan Losses (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Financing Receivable, Past Due [Line Items] | ||
Provision (benefit) | $ 506,212 | $ 1,399 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Provision (benefit) | 6,747 | 1,399 |
Indemnity Liability Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Provision (benefit) | $ 499,465 |
Indemnification liability (Deta
Indemnification liability (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 11, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||
Interest rate | 0.25% | ||
Secured Debt [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.90% | ||
Secured Debt [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Interest rate | 12% | ||
Unsecured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Variable rate description | Unsecured loans and lines of credit contain variable rates ranging from Prime + 1.50 % to Prime + 6.00 % | ||
Lines of credit | $ 996,958 | $ 225,000 |
Schedule of Property and Equipm
Schedule of Property and Equipment, Net (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 175,794 | $ 35,150 |
Less: accumulated depreciation | (126,180) | (28,799) |
Property and equipment, net | 49,614 | 6,351 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 45,397 | 28,080 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 51,692 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 71,635 | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,070 | $ 7,070 |
Property and equipment, net (De
Property and equipment, net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 10,361 | $ 1,921 |
Schedule of Demonstrates Deposi
Schedule of Demonstrates Deposit Capacity (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Incremental capacity | $ 290,658,185 | $ 227,593,134 |
Loan Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 154,971,429 | 81,052,004 |
Partner Colorado Credit Union [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 695,072,554 | 575,170,939 |
Partner Colorado Credit Union [Member] | Loan Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 133,231,565 | 61,925,336 |
Capacity At 65% [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 451,797,160 | 373,861,110 |
Capacity At 65% [Member] | Loan Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 104,740,334 | 95,074,184 |
Cannabis Related Businesses Related Deposits [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 161,138,975 | 146,267,976 |
Cannabis Related Businesses Related Deposits [Member] | Loan Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 161,138,975 | 146,267,976 |
Capacity [Member] | Loan Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 174,866,429 | 81,277,004 |
Limiting Capacity [Member] | Loan Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 174,866,429 | 81,277,004 |
Partner Colorado Credit Union Loans Funded [Member] | Loan Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 18,898,042 | |
Line of Credit [Member] | Loan Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | $ 996,958 | $ 225,000 |
Related party transactions (Det
Related party transactions (Details Narrative) - USD ($) | 12 Months Ended | ||||
Feb. 11, 2022 | Jul. 01, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Jun. 27, 2022 | |
Related Party Transaction [Line Items] | |||||
Accounts payable | $ 2,851,457 | $ 43,626 | |||
Partner Colorado Credit Union [Member] | |||||
Related Party Transaction [Line Items] | |||||
Rent expenses | $ 5,400 | ||||
Affiliate Of Sponsor [Member] | |||||
Related Party Transaction [Line Items] | |||||
Advance amount | $ 1,150,000 | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Partner Colorado Credit Union [Member] | |||||
Related Party Transaction [Line Items] | |||||
Concentration risk percentage1 | 85% | 100% | |||
Account Servicing Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related party | $ 8,823,608 | $ 3,168,243 | |||
Support Services Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense | 775,259 | 190,908 | |||
Accounts payable | $ 196,968 | 43,626 | |||
Support Services Agreement [Member] | Partner Colorado Credit Union [Member] | |||||
Related Party Transaction [Line Items] | |||||
Monthly fee 2022 | $ 30.96 | ||||
Monthly fee 2024 | 25.32 | ||||
Monthly fee 2023 | $ 25.32 | ||||
Related party transaction description | In addition, investment income from CRB-related cash and investments (excluding loans) will be shared 25% to PCCU and 75% to the Company and the Company will reimburse PCCU for any of its out-of-pocket expenses relating to the services provided to the Company | ||||
Bonus distributions | $ 30,000,000 | ||||
Assets net worth percentage | 10% | ||||
Support Services Agreement [Member] | Cannabis Related Businesses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Investment income deposits percentage | 25% | ||||
Loan Servicing Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense | $ 26,088 | $ 0 | |||
Loan Servicing Agreement [Member] | Partner Colorado Credit Union [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction description | National Credit Union Association regulations to the greater of $100,000 or 15% of PCCU’s net worth | ||||
Assets net worth percentage | 65% | ||||
Servicing fee | 0.25% |
Schedule of Amounts Due to Sell
Schedule of Amounts Due to Seller (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Due To Seller | ||
Due to Seller-Current(Unsecured) | $ 25,973,017 | |
Due to Seller-Non-Current(Unsecured) | 30,976,783 | |
Due to Seller | $ 56,949,800 |
Schedule of Repayment of the Am
Schedule of Repayment of the Amount Outstanding (Details) | Dec. 31, 2022 USD ($) |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Due to Seller | $ 56,949,800 |
June 13, 2023 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Due to Seller | 21,949,801 |
October 1, 2023 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Due to Seller | 4,023,216 |
January 1, 2024 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Due to Seller | 6,048,819 |
April 1, 2024 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Due to Seller | 6,123,866 |
July 1, 2024 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Due to Seller | 6,195,796 |
October 1, 2024 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Due to Seller | 6,266,944 |
January 1, 2025 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Due to Seller | $ 6,341,358 |
Due to Seller (Details Narrativ
Due to Seller (Details Narrative) - USD ($) | 12 Months Ended | ||||||
Mar. 29, 2023 | Nov. 15, 2022 | Sep. 28, 2022 | Sep. 28, 2022 | Feb. 11, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Purchase consideration | $ 10,850,000 | ||||||
Cash consideration | $ 2,763,800 | $ 3,041,680 | |||||
Subsequent Event [Member] | |||||||
Secured debt | $ 56,949,800 | ||||||
Debt instrument, face amount | $ 14,500,000 | ||||||
Debt instrument, interest rate, effective percentage | 4.25% | ||||||
Stock issued during period, shares, new issues | 11,200,000 | ||||||
December 15, 2022 [Member] | |||||||
Deferred consideration payable | $ 21,949,800 | $ 21,949,800 | |||||
Safe Harbour Financial LLC [Member] | |||||||
Purchase consideration | 185,000,000 | 185,000,000 | |||||
Number of shares issued in acquisition transaction value | 115,000,000 | ||||||
Cash consideration | 70,000,000 | 70,000,000 | $ 70,000,000 | ||||
Deferral amount | 56,949,800 | 56,949,800 | 56,900,000 | ||||
Deferred consideration payable | 38,500,002 | 38,500,002 | |||||
Safe Harbour Financial LLC [Member] | December 15, 2022 [Member] | |||||||
Deferred consideration payable | 21,900,000 | ||||||
Safe Harbour Financial LLC [Member] | After First Payment [Member] | |||||||
Deferred consideration payable | 35,000,000 | 35,000,000 | 35,000,000 | ||||
Safe Harbour Financial LLC [Member] | Six Equal Installments [Member] | |||||||
Deferred consideration payable | $ 6,416,667 | $ 6,416,667 | $ 6,400,000 | ||||
Safe Harbour Financial LLC [Member] | Common Class A [Member] | |||||||
Number of shares issued in acquisition transaction | 11,386,139 | 11,386,139 | 11,386,139 | ||||
Number of shares issued in acquisition transaction value | $ 115,000,000 | $ 115,000,000 |
Schedule of Lease Cost,Right of
Schedule of Lease Cost,Right of Use Assets Related to Lease and Future Minimum Lease Payments (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating lease cost | ||
Short-term lease cost | 99,246 | |
Total Lease cost | 99,246 | |
Beginning balance | ||
Additions to right of use assets | 1,029,226 | |
Amortization charge for the year | (13,028) | |
Amortization charge for the year | 13,028 | |
Lease modifications | ||
Ending balance | $ 1,016,198 | |
Weighted-average remaining lease term | 4 years 5 months 1 day | |
Weighted-average discount rate | 6.87% | |
2023 | $ 91,303 | |
2024 | 197,520 | |
2025 | 217,925 | |
2026 | 222,275 | |
2027 | 226,705 | |
Thereafter | 348,926 | |
Total future minimum lease payments | 1,304,654 | |
Less: Imputed interest | 276,421 | |
Operating lease liabilities | 1,028,233 | |
Less: Current portion | 20,124 | |
Non-current portion of lease liabilities | $ 1,008,109 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Option to extend lease term | ten years | ||
Operating lease right to use assets | $ 1,016,198 | ||
Operating lease liablities | $ 1,028,233 | ||
Minimum [Member] | |||
Lease term | 1 year | ||
Maximum [Member] | |||
Lease term | 7 years |
Schedule of Disaggregated Reven
Schedule of Disaggregated Revenue (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Total Revenue | $ 9,478,819 | $ 7,005,579 |
Deposit activity onboarding income [Member] | ||
Total Revenue | 6,063,939 | 6,039,358 |
Safe Harbor Program Income [Member] | ||
Total Revenue | 164,062 | 478,041 |
Investment Income [Member] | ||
Total Revenue | 2,120,640 | 376,918 |
Interest Income [Member] | ||
Total Revenue | 1,130,178 | 102,961 |
Other Income [Member] | ||
Total Revenue | $ 8,301 |
Schedule of Other Current Asset
Schedule of Other Current Assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Advance to capital supplier | $ 93,517 | |
Advance to other | 57,300 | |
Total | $ 150,817 |
Commitments and contingencies (
Commitments and contingencies (Details Narrative) | Dec. 31, 2022 USD ($) |
Letter of Credit [Member] | |
Short-Term Debt [Line Items] | |
Debt Instrument, Face Amount | $ 750,000 |
Schedule Of Earning Per Shares,
Schedule Of Earning Per Shares, Basic And Diluted (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ (35,128,083) | $ 3,286,887 |
Weighted average shares outstanding | 18,988,558 | |
Basic net earnings per share | $ (1.85) | |
Weighted average shares outstanding – diluted | 18,988,558 | |
Diluted net earnings (loss) per share | $ (1.85) | |
Company public shares | 3,926,598 | |
Company initial stockholders | 3,403,175 | |
PCCU stockholders | 11,386,139 | |
Shares issued for Abaca acquisition | 264,654 | |
Conversion of Preferred stock | 7,992 |
Schedule of Awards Excluded (De
Schedule of Awards Excluded (Details) | 12 Months Ended |
Dec. 31, 2022 shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 29,083,427 |
Warrant [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 7,036,588 |
Share-Based Payment Arrangement [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 2,170,000 |
Abaca Acquisition [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 6,433,839 |
Conversion Preferred [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total | 13,443,000 |
Schedule of Forward Purchase Ag
Schedule of Forward Purchase Agreeement (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2022 | Sep. 28, 2022 | |
Number of shares on the date of acquistion | 3,804,872 | |
Number of shares on the date of acquistion value | $ 39,285,754 | |
Sale of stock, consideration received on transaction | $ 1,379,284 | |
Common stock held by subsidiary shares | 3,667,377 | |
Common stock held by subsidiary | $ 4,584,221 | |
Sale of stock, number of shares issued in transaction shares | 137,495 | |
Vellar [Member] | ||
Number of shares on the date of acquistion | 1,025,000 | |
Number of shares on the date of acquistion value | $ 10,583,246 | |
Sale of stock, number of shares issued in transaction | 53,796 | |
Sale of stock, consideration received on transaction | $ 524,472 | |
Common stock held by subsidiary shares | 971,204 | |
Share price | $ 1.25 | |
Common stock held by subsidiary | $ 1,214,005 | |
Midtown East [Member] | ||
Number of shares on the date of acquistion | 1,599,496 | |
Number of shares on the date of acquistion value | $ 16,514,986 | |
Sale of stock, number of shares issued in transaction | 81,572 | |
Sale of stock, consideration received on transaction | $ 832,850 | |
Common stock held by subsidiary shares | 1,517,924 | |
Share price | $ 1.25 | |
Common stock held by subsidiary | $ 1,897,405 | |
Verdun [Member] | ||
Number of shares on the date of acquistion | 1,180,376 | |
Number of shares on the date of acquistion value | $ 12,187,522 | |
Sale of stock, number of shares issued in transaction | 2,127 | |
Sale of stock, consideration received on transaction | $ 21,962 | |
Common stock held by subsidiary shares | 1,178,249 | |
Share price | $ 1.25 | |
Common stock held by subsidiary | $ 1,472,811 |
Forward Purchase Agreement (Det
Forward Purchase Agreement (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Jun. 16, 2022 | Dec. 31, 2022 | |
Related expense amounts | $ 0.3 | |
Maturity date, description | At the Maturity Date, Midtown East, Verdun and Vellar shall be entitled to (1) the product of the shares then held by them multiplied by the Forward Price, and (2) an amount, in cash or shares at the sole discretion of NLIT, equal to (a) in the case of cash, the product of (i)(x) 3.8 million shares less (y) the number of Terminated Shares and (ii) $2.00 (the “Maturity Cash Consideration”) and (b) in the case of shares, (i) the Maturity Cash Consideration divided by (ii) the VWAP Price for the 30 Scheduled Trading Days prior to the Maturity Date. | |
Shares per share | $ 3 | $ 1.25 |
Cash [Member] | ||
Asset held with trust | $ 39.3 | |
Midtown East Management NL LLC [Member] | Common Class A [Member] | ||
Shares, Issued | 1,666,666 | |
Number of new stock issued | 3,800,000 |
Warrant Liability (Details Narr
Warrant Liability (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
warrants outstanding | 0 | |
Warrants description | The Public and Private Placement Warrants became exercisable on September 28, 2022, the date of the Business Combination and will expire on September 28,2027, or earlier upon redemption or liquidation | |
Warrant description | (i)125% of the conversion price if at any time there is an adjustment to the Conversion Price and the exercise price after such adjustment is greater than 125% of the Conversion Price as adjusted and (ii) $5.00. | |
Common Class A [Member] | ||
Warrants execise price | $ 11.50 | |
Shares issued, Price per share | $ 18 | |
Public Warrants [Member] | ||
warrants outstanding | 5,750,000 | |
Warrants execise price | $ 0.01 | |
Private Placement Warrants[Member] | ||
warrants outstanding | 264,088 | |
PIPE Warrants [Member] | ||
warrants outstanding | 1,022,500 | 0 |
Schedule of Fair Value Assets a
Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Recurring [Member] | Dec. 31, 2022 USD ($) |
Public Warrants [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | $ 361,100 |
Public Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | 361,100 |
Public Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | |
Private Placement Warrants[Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | 19,110 |
Private Placement Warrants[Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | |
Private Placement Warrants[Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | 19,110 |
PIPE Warrants [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | 286,300 |
PIPE Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | |
PIPE Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
PIPE Warrants | 286,300 |
Forward Purchase Option Derivative [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Forward purchase option derivative | 7,309,580 |
Forward Purchase Option Derivative [Member] | Fair Value, Inputs, Level 1 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Forward purchase option derivative | |
Forward Purchase Option Derivative [Member] | Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Forward purchase option derivative | $ 7,309,580 |
Schedule of Carrying Amounts an
Schedule of Carrying Amounts and Fair Values of Financial Instruments by the Level of Valuation Inputs in the Fair Value Hierarchy (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Liabilities | ||
Deferred consideration | $ 14,359,822 | |
Due to seller - current portion | 25,973,017 | |
Due to seller - long term position | 30,976,783 | |
Deferred underwriter fee payable | 1,450,500 | |
Indemnity liability | 499,465 | |
Fair Value, Inputs, Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 8,390,195 | 5,495,905 |
Forward purchase receivables | 4,584,221 | |
Loans | ||
Liabilities | ||
Deferred consideration | 14,359,822 | |
Due to seller - current portion | 25,973,017 | |
Due to seller - long term position | 30,976,783 | |
Deferred underwriter fee payable | 1,450,500 | |
Indemnity liability | 499,465 | |
Public warrants | 361,100 | |
Private placement warrants | ||
PIPE Warrants | ||
Forward purchase derivative | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Loans | ||
Liabilities | ||
Deferred consideration | ||
Due to seller - current portion | ||
Due to seller - long term position | ||
Deferred underwriter fee payable | ||
Indemnity liability | ||
Public warrants | ||
Private placement warrants | ||
PIPE Warrants | ||
Forward purchase derivative | ||
Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Forward purchase receivables | ||
Loans | 1,241,761 | 1,417,637 |
Liabilities | ||
Deferred consideration | ||
Due to seller - current portion | ||
Due to seller - long term position | ||
Deferred underwriter fee payable | ||
Indemnity liability | ||
Public warrants | ||
Private placement warrants | 19,110 | |
PIPE Warrants | 286,300 | |
Forward purchase derivative | 7,309,580 | |
Carrying Amount [Member] | ||
Assets | ||
Cash and cash equivalents | 8,390,195 | 5,495,905 |
Forward purchase receivables | 4,584,221 | |
Loans | 1,301,991 | 1,463,560 |
Liabilities | ||
Deferred consideration | 14,359,822 | |
Due to seller - current portion | 25,973,017 | |
Due to seller - long term position | 30,976,783 | |
Deferred underwriter fee payable | 1,450,500 | |
Indemnity liability | 499,465 | |
Public warrants | 361,100 | |
Private placement warrants | 19,110 | |
PIPE Warrants | 286,300 | |
Forward purchase derivative | 7,309,580 | |
Fair Value [Member] | ||
Assets | ||
Cash and cash equivalents | 8,390,195 | 5,495,905 |
Forward purchase receivables | 4,584,221 | |
Loans | 1,241,761 | $ 1,417,637 |
Liabilities | ||
Deferred consideration | 14,359,822 | |
Due to seller - current portion | 25,973,017 | |
Due to seller - long term position | 30,976,783 | |
Deferred underwriter fee payable | 1,450,500 | |
Indemnity liability | 499,465 | |
Public warrants | 361,100 | |
Private placement warrants | 19,110 | |
PIPE Warrants | 286,300 | |
Forward purchase derivative | $ 7,309,580 |
Schedule of Fair Value Assets M
Schedule of Fair Value Assets Measured on Recurring Basis (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
PIPE Warrants [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Balance at the beginning of the period | |
Acquired under business combination | |
Fair value adjustment | 286,300 |
Balance at the end of the period | 286,300 |
Private Placement Warrants[Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Balance at the beginning of the period | |
Acquired under business combination | 203,112 |
Fair value adjustment | (184,002) |
Balance at the end of the period | 19,110 |
Forward Purchase Derivative [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Balance at the beginning of the period | |
Acquired under business combination | (1,687,530) |
Fair value adjustment | 8,997,110 |
Balance at the end of the period | $ 7,309,580 |
Schedule of Level 3 Fair Value
Schedule of Level 3 Fair Value Measurement Inputs (Details) | Dec. 31, 2022 $ / shares |
PIPE Warrants [Member] | Measurement Input, Exercise Price [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 5 |
PIPE Warrants [Member] | Measurement Input, Share Price [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 1.78 |
PIPE Warrants [Member] | Expected Term [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Expected term (years) | 4 years 8 months 26 days |
PIPE Warrants [Member] | Measurement Input, Price Volatility [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 46 |
PIPE Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 4 |
Private Placement Warrants[Member] | Measurement Input, Exercise Price [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 11.50 |
Private Placement Warrants[Member] | Measurement Input, Share Price [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 1.78 |
Private Placement Warrants[Member] | Expected Term [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Expected term (years) | 4 years 8 months 26 days |
Private Placement Warrants[Member] | Measurement Input, Price Volatility [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 46 |
Private Placement Warrants[Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 3.98 |
Forward Purchase Derivative [Member] | Expected Term [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Expected term (years) | 2 years 8 months 26 days |
Forward Purchase Derivative [Member] | Measurement Input, Price Volatility [Member] | Purchase Agreement Option [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 46 |
Forward Purchase Derivative [Member] | Measurement Input, Risk Free Interest Rate [Member] | Purchase Agreement Option [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 4.2 |
Forward Purchase Derivative [Member] | Measurement Input Reset Price [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 1.25 |
Forward Purchase Derivative [Member] | Measurement Input Additional Maturity Per Share [Member] | Purchase Agreement Option [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Additional maturity consideration per share | $ 0.0200 |
Forward Purchase Derivative [Member] | Measurement Input, Discount Rate [Member] | Purchase Agreement Option [Member] | |
Impairment Effects on Earnings Per Share [Line Items] | |
Risk-adjusted discount rate | 13.4 |
Financial Instruments (Details
Financial Instruments (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of assets and liabilities nonrecurring basis | $ 0 | $ 0 |
Schedule of Major Components of
Schedule of Major Components of Income tax (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Current tax on profits | $ (3,394) | |
Tax regarding prior years | ||
Deferred taxation - current year | (9,249,499) | |
Deferred taxation - prior years | ||
Income tax benefit reported in the income statement | $ (9,252,893) |
Schedule of Effective Income Ta
Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Accounting loss before tax from continuing operations | $ (44,380,976) | |
Accounting loss before income tax | (44,380,976) | |
At federal statutory income tax rate of 21% | (9,320,005) | |
State income tax benefit, net of federal benefit | (1,304,510) | |
Remeasurement of deferred taxes due to US tax legislative changes | ||
Permanent differences, net | 1,787,471 | |
UTP withholding | ||
Other | (415,849) | |
Valuation allowance charges affecting the provision for income taxes | ||
Total | $ (9,252,893) |
Schedule of Deferred Tax Assets
Schedule of Deferred Tax Assets and Liabilities (Details) | Dec. 31, 2022 USD ($) |
Income Tax Disclosure [Abstract] | |
Loan loss reserve | $ 127,508 |
Stock option conversion | 686,879 |
Deferred revenue | 251 |
Transaction costs | 817,322 |
Change in value of forward purchase contract | 8,155,953 |
Goodwill on Abaca | 42,551,111 |
NOL carryforward | 1,862,394 |
Lease liabilities | 251,670 |
Deferred tax assets | 54,453,088 |
Property, plant and equipment, net | (11,444) |
Operating lease right to use assets | (248,725) |
Intangible Assets | (2,599,617) |
Deferred tax liabilities | (2,859,786) |
Net deferred tax assets / (liabilities) | 51,593,302 |
Deferred tax assets net | $ 51,593,302 |
Tax (Details Narrative)
Tax (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Operationg loss carry forwards | $ 1,862,394 |
Federal tax loss carryovers | 7,500,000 |
UNITED STATES | |
Operationg loss carry forwards | 7,500,000 |
State of Colorado [Member] | |
Operationg loss carry forwards | 4,100,000 |
State Of Arkansas [Member] | |
Operationg loss carry forwards | $ 3,400,000 |
401(k) Plan (Details Narrative)
401(k) Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan employee percent | 100% | |
Defined contribution plan employee matching contribution | 4% | |
Defined contribution plan amount | $ 47,806 | $ 44,158 |
Schedule of Fair Value of Optio
Schedule of Fair Value of Options Granted Black-Scholes-Merton Model (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Dividend yield | 0% |
Expected volatility | 100% |
Minimum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Risk free interest rate | 3.62% |
Expected term | 6 years |
Maximum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Risk free interest rate | 4.23% |
Expected term | 6 years 6 months |
Schedule of Stock Options (Deta
Schedule of Stock Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Shares Outstanding, Beginning Balance | ||
Weighted Average Exercise Price, Beginning Balance | ||
Weighted-Average Remaining Contractual Life, Beginning | 10 years | |
Shares, Granted | 2,170,000 | |
Weighted Average Exercise Price, Granted | $ 5.29 | |
Weighted-Average Remaining Contractual Life, Granted | 2 years 7 days | |
Shares, Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Shares, Expired | ||
Weighted Average Exercise Price, Expired | ||
Shares, Cancelled/Forfeited | ||
Weighted Average Exercise Price, Cancelled/Forfeited | ||
Shares Outstanding, Ending Balance | 2,170,000 | |
Weighted Average Exercise Price Outstanding, Ending Balance | $ 5.29 | |
Weighted-Average Remaining Contractual Life, Ending | 2 years 7 days |
Schedule of Exercise Price Opti
Schedule of Exercise Price Options (Details) | Dec. 31, 2022 $ / shares shares |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price options | 2,170,000 |
Exercise Price 1 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price | $ / shares | $ 1.56 |
Exercise price options | 87,500 |
Exercise Price 2 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price | $ / shares | $ 2.58 |
Exercise price options | 350,000 |
Exercise Price 3 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price | $ / shares | $ 4 |
Exercise price options | 482,500 |
Exercise Price 4 [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price | $ / shares | $ 6.67 |
Exercise price options | 1,250,000 |
Share based compensation (Detai
Share based compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based compensation | $ 2,810,000 | $ 0 |
Contractual term | 10 years | |
Expected Volatility | 100% | |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Contractual term | 3 years | |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Contractual term | 4 years |
Subsequent events (Details Narr
Subsequent events (Details Narrative) - USD ($) | Mar. 29, 2023 | Mar. 29, 2023 | Mar. 13, 2023 | Feb. 06, 2023 | Jan. 31, 2023 | Jan. 25, 2023 | Jan. 05, 2023 | Dec. 31, 2022 | Nov. 30, 2022 | Nov. 02, 2022 | Oct. 31, 2022 | Oct. 14, 2022 | Nov. 07, 2022 | Feb. 11, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | |||||||||||||||
Preferred stock convertible conversion price | $ 10 | ||||||||||||||
Common stock shares issued | 23,732,889 | 0 | |||||||||||||
Common stock shares outstanding | 23,732,889 | 0 | |||||||||||||
Preferred stock shares issued | 14,616 | 0 | |||||||||||||
Preferred stock shares outstanding | 14,616 | 0 | |||||||||||||
Debt instrument interest rate stated percentage | 0.25% | ||||||||||||||
Benchmark Investments LLC [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Notes payable | $ 2,166,250 | ||||||||||||||
Debt instrument face amount | 2,166,250 | ||||||||||||||
Debt periodic payment | $ 362,625 | $ 362,625 | $ 362,625 | $ 715,750 | |||||||||||
Repayment of debt | $ 1,450,500 | ||||||||||||||
Debt instrument interest rate stated percentage | 24% | ||||||||||||||
Due from related party | $ 362,625 | ||||||||||||||
Common Class A [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Common stock shares outstanding | 3,667,377 | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Payments for loans | $ 3,100,000 | ||||||||||||||
Debt Instrument collateral | 5.25 | ||||||||||||||
Collateral percentage | 90% | ||||||||||||||
Preferred stock voting rights | The approval was obtained to comply with the Nasdaq listing rules requiring stockholder approval for issuances of voting stock exceeding 20% of the voting stock outstanding at the time of the vote | ||||||||||||||
Debt instrument face amount | $ 14,500,000 | $ 14,500,000 | |||||||||||||
Issuance of shares in connection with Business Combination and PIPE offering, net of issuance costs, shares | 11,200,000 | ||||||||||||||
Subsequent Event [Member] | Settlement Agreement [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Payment of loan costs | $ 550,000 | ||||||||||||||
Subsequent Event [Member] | Security Agreement [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Debt instrument face amount | $ 14,500,000 | $ 14,500,000 | |||||||||||||
Debt instrument interest rate stated percentage | 4.25% | 4.25% | |||||||||||||
Debt instrument term | 5 years | ||||||||||||||
Subsequent Event [Member] | Benchmark Investments LLC [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Debt periodic payment | $ 362,625 | ||||||||||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Preferred stock convertible conversion price | $ 2 | ||||||||||||||
Shares price per share | $ 1.25 | ||||||||||||||
Convertible shares | 7,764 | ||||||||||||||
Preferred stock shares issued | 12,686 | ||||||||||||||
Preferred stock shares outstanding | 12,686 | ||||||||||||||
Subsequent Event [Member] | Common Class A [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Common stock shares issued | 27,027,089 | ||||||||||||||
Common stock shares outstanding | 27,027,089 | ||||||||||||||
Subsequent Event [Member] | Common Class A [Member] | Securities Issuance Agreement [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Ownwership percentage | 54.93% | 54.93% | |||||||||||||
Subsequent Event [Member] | Common Class A [Member] | Securities Issuance Agreement [Member] | |||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||
Issuance of shares in connection with Business Combination and PIPE offering, net of issuance costs, shares | 11,200,000 |