Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 13, 2024 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
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 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 Common Stock, Shares Outstanding | 55,431,001 | |
Class A Common Stock, $0.0001 par value per share | ||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |
Trading Symbol | SHFS | |
Security Exchange Name | NASDAQ | |
Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | ||
Title of 12(b) Security | Redeemable Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | |
Trading Symbol | SHFSW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Current Assets: | ||
Cash and cash equivalents | $ 5,626,362 | $ 4,888,769 |
Prepaid expenses – current portion | 506,634 | 546,437 |
Accrued interest receivable | 16,891 | 13,780 |
Short-term loans receivable, net | 12,620 | 12,391 |
Other current assets | 82,657 | |
Total Current Assets | 7,427,105 | 7,761,229 |
Long-term loans receivable, net | 379,863 | 381,463 |
Property, plant and equipment, net | 45,366 | 84,220 |
Operating lease right to use assets | 820,777 | 859,861 |
Goodwill | 6,058,000 | 6,058,000 |
Intangible assets, net | 3,564,890 | 3,721,745 |
Deferred tax asset | 44,278,374 | 43,829,019 |
Prepaid expenses – long term position | 525,000 | 562,500 |
Forward purchase receivable | 4,584,221 | 4,584,221 |
Security deposit | 18,875 | 18,651 |
Total Assets | 67,702,471 | 67,860,909 |
Current Liabilities: | ||
Accrued expenses | 645,635 | 1,008,987 |
Contract liabilities | 2,692 | 21,922 |
Lease liabilities – current | 142,863 | 132,546 |
Senior secured promissory note – current portion | 3,028,738 | 3,006,991 |
Deferred consideration – current portion | 2,921,257 | 2,889,792 |
Other current liabilities | 62,160 | 41,639 |
Total Current Liabilities | 7,108,280 | 7,896,584 |
Warrant liabilities | 2,908,642 | 4,164,129 |
Deferred consideration – long term portion | 594,000 | 810,000 |
Forward purchase derivative liability | 7,309,580 | 7,309,580 |
Senior secured promissory note—long term portion | 10,241,884 | 11,004,175 |
Net deferred indemnified loan origination fees | 421,907 | 63,275 |
Lease liabilities – long term | 835,598 | 875,447 |
Indemnity liability | 1,315,263 | 1,382,408 |
Total Liabilities | 30,735,154 | 33,505,598 |
Commitment and Contingencies (Note 13) | ||
Stockholders’ Equity | ||
Convertible preferred stock, $.0001 par value, 1,250,000 shares authorized, 111 and 1,101 shares issued and outstanding on March 31, 2024, and December 31, 2023, respectively | ||
Class A common stock, $.0001 par value, 130,000,000 shares authorized, 55,431,001 and 54,563,372 issued and outstanding on March 31, 2024, and December 31, 2023, respectively | 5,545 | 5,458 |
Additional paid in capital | 107,348,166 | 105,919,674 |
Retained deficit | (70,386,394) | (71,569,821) |
Total Stockholders’ Equity | 36,967,317 | 34,355,311 |
Total Liabilities and Stockholders’ Equity | 67,702,471 | 67,860,909 |
Nonrelated Party [Member] | ||
Current Assets: | ||
Accounts receivable | 153,208 | 121,875 |
Current Liabilities: | ||
Accounts payable | 179,242 | 217,392 |
Related Party [Member] | ||
Current Assets: | ||
Accounts receivable | 1,111,390 | 2,095,320 |
Current Liabilities: | ||
Accounts payable | $ 125,693 | $ 577,315 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
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 | 111 | 1,101 |
Convertible preferred stock, shares outstanding | 111 | 1,101 |
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 | 55,431,001 | 54,563,372 |
Class A common stock, shares outstanding | 55,431,001 | 54,563,372 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Revenue | $ 4,050,799 | $ 4,180,379 |
Operating Expenses | ||
Compensation and employee benefits | 2,280,038 | 3,659,520 |
General and administrative expenses | 984,220 | 1,538,874 |
Professional services | 460,950 | 449,246 |
Rent expense | 69,437 | 87,742 |
Provision (benefit) for credit losses | (68,787) | 66,666 |
Total operating expenses | 3,725,858 | 5,802,048 |
Operating income/ (loss) | 324,941 | (1,621,669) |
Other (income) expenses | ||
Change in the fair value of deferred consideration | (184,535) | 190,943 |
Interest expense | 154,172 | 643,260 |
Change in fair value of warrant liabilities | (1,255,487) | (433,148) |
Total other (income)/ expenses | (1,285,850) | 401,055 |
Net income/ (loss) before income tax | 1,610,791 | (2,022,724) |
Income tax benefit | 438,885 | 609,277 |
Net income/ (loss) | $ 2,049,676 | $ (1,413,447) |
Weighted average shares outstanding, basic | 55,213,609 | 25,670,730 |
Basic net income/ (loss) per share | $ 0.04 | $ (0.06) |
Weighted average shares outstanding, diluted | 56,268,075 | 25,670,730 |
Diluted income/ (loss) per share | $ 0.04 | $ (0.06) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] Common Class A [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2022 | $ 1 | $ 2,374 | $ 44,806,031 | $ (39,695,281) | $ 5,113,125 |
Balance, shares at Dec. 31, 2022 | 14,616 | 23,732,889 | |||
Conversion of PIPE shares | $ 473 | 5,004,727 | (5,005,200) | ||
Conversion of PIPE shares, shares | (3,720) | 4,726,200 | |||
Net loss | (1,413,447) | (1,413,447) | |||
Cumulative effect from adoption of CECL | (581,321) | (581,321) | |||
Stock option conversion | $ 62 | 1,570,719 | 1,570,781 | ||
Stock option conversion, shares | 629,728 | ||||
Issuance of shares to PCCU (net of tax) | $ 1,120 | 38,405,288 | 38,406,408 | ||
Issuance of shares to PCCU (net of tax), shares | 11,200,000 | ||||
Reversal of deferred underwriting cost | 900,500 | 900,500 | |||
Balance at Mar. 31, 2023 | $ 1 | $ 4,029 | 90,687,265 | (46,695,249) | 43,996,046 |
Balance, shares at Mar. 31, 2023 | 10,896 | 40,288,817 | |||
Balance at Dec. 31, 2023 | $ 5,458 | 105,919,674 | (71,569,821) | 34,355,311 | |
Balance, shares at Dec. 31, 2023 | 1,101 | 54,563,372 | |||
Conversion of PIPE shares | $ 79 | 866,170 | (866,249) | ||
Conversion of PIPE shares, shares | (990) | 792,000 | |||
Restricted stock units (net of tax) | $ 8 | (14,325) | (14,317) | ||
Restricted stock units (net of tax), shares | 75,629 | ||||
Stock compensation cost | 576,647 | 576,647 | |||
Net loss | 2,049,676 | 2,049,676 | |||
Balance at Mar. 31, 2024 | $ 5,545 | $ 107,348,166 | $ (70,386,394) | $ 36,967,317 | |
Balance, shares at Mar. 31, 2024 | 111 | 55,431,001 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income/ (loss) | $ 2,049,676 | $ (1,413,447) |
Adjustments to reconcile net income/ (loss) to net cash provided by/ (used in) operating activities: | ||
Depreciation and amortization expense | 195,709 | 751,225 |
Stock compensation expense | 562,330 | 1,570,781 |
Amortization of deferred origination fees | (27,970) | (14,104) |
Interest expense | 873,289 | |
(Benefit)/ provision for credit losses | (68,787) | 66,666 |
Amortization of right of use assets | 9,552 | 17,762 |
Income tax benefit | (438,885) | (609,277) |
Change in the fair value of deferred consideration | (184,535) | 190,943 |
Change in fair value of warrant | (1,255,487) | (433,148) |
Changes in operating assets and liabilities: | ||
Accounts receivable – Trade | (31,333) | (30,716) |
Accounts receivable – related party | 983,930 | 182,824 |
Contract assets | (13,019) | |
Prepaid expenses | 77,303 | 77,436 |
Accrued interest receivable | (3,111) | (146,106) |
Deferred underwriting payable | (550,000) | |
Other current assets | 82,657 | 150,817 |
Other current liabilities | 10,048 | 75,000 |
Accounts payable | (38,153) | (533,945) |
Accounts Payable – related party | (451,622) | (65,288) |
Accrued expenses | (363,347) | (466,849) |
Contract liabilities | (19,230) | 78,616 |
Net deferred indemnified loan origination fees | 386,602 | 8,500 |
Security deposit | (224) | |
Net cash provided by (used in) operating activities | 1,475,123 | (232,040) |
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (548,671) | |
Net repayment of loans | 3,014 | 1,019,268 |
Net cash provided by investing activities | 3,014 | 470,597 |
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||
Repayment of senior secured promissory note | (740,544) | |
Net cash used in financing activities | (740,544) | |
Net increase in cash and cash equivalents | 737,593 | 238,557 |
Cash and cash equivalents – beginning of period | 4,888,769 | 8,390,195 |
Cash and cash equivalents – end of period | 5,626,362 | 8,628,752 |
Supplemental disclosure of cash flow information | ||
Interest paid | 156,414 | |
Non-Cash transactions: | ||
Shares issued for the settlement of PCCU debt obligation | 38,406,408 | |
Cumulative effect from adoption of CECL | $ 581,321 |
Organization and Business Opera
Organization and Business Operations | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Organization and Business Operations | Note 1. Organization and Business Operations Business Description SHF Holdings, Inc. (the “Company”) originated as business operations conducted through Partner Colorado Credit Union (“PCCU”), which were transferred to SHF LLC (“SHF”), then an indirect wholly owned subsidiary of PCCU. The Company completed a strategic reorganization on July 1, 2021. This involved transferring select assets and operational activities from Partner Colorado Credit Union (“PCCU”) and its wholly owned subsidiary, Safe Harbor Services, to SHF Holding Co., LLC. Subsequently, these were consolidated into SHF, LLC (“SHF”), with PCCU’s investment managed at the SHF Holding Co., LLC level. On September 28, 2022, the Company concluded a transaction wherein NLIT (“Northern Lights Acquisition Corp.”) acquired all outstanding membership interests of SHF. This acquisition prompted the renaming of NLIT to SHF Holdings, Inc. As a result, PCCU emerged as the largest shareholder of the Company. The Company executed the Abaca Merger Agreement on October 31, 2022, facilitating a two-step merger through which Rockview Digital Solutions, Inc. (“Abaca”) became a direct wholly-owned subsidiary. The transaction expanded the Company’s fintech capabilities and market reach. The Company generates fee income, investment income and loan interest income through providing a variety of services to financial institutions desiring to service the cannabis industry including, among other things, the origination, onboarding, and servicing of cannabis-related deposit business for and on behalf of those partner institutions; Bank Secrecy Act and other regulatory compliance and reporting related to these accounts; onboarding these accounts and responding to account and customer service inquiries; and sourcing, underwriting, and servicing, and administering loans issued to cannabis businesses and related entities. In addition, the Company provides these services to financial institutions under a Safe Harbor Master Program Agreement. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2. Basis of Presentation and Summary of Significant Accounting Policies i. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly the consolidated financial condition, results of operations, statements of shareholders’ equity, and cash flows of the Company for the interim periods presented. Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the current year ending December 31, 2024. The financial data presented herein should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the years ended December 31, 2023, included in the Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). The company has made certain immaterial reclassifications to the statements of operations for the three months ended March 31, 2023, to conform to the presentation for the three months ended March 31, 2024. These reclassifications, totaling $ 190,943 The condensed consolidated financial statements include the accounts of SHF Holdings, Inc., its subsidiaries where we have controlling financial interests. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC and the instructions to Form 10-Q. ii. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed 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 credit losses, indemnification liabilities, useful lives of intangibles and the fair value of financial instruments. Actual results could differ from the estimates. iii. Liquidity and Going Concern As of March 31, 2024, the Company had $ 5,626,362 318,825 4,888,769 135,355 70,386,394 71,569,821 324,941 For the period ending March 31, 2024, the Company reported positive operating income and net working capital. However, considering the historical data, where the Company experienced negative operating income and negative net working capital, management acknowledges the need to closely evaluate the financial performance in upcoming quarters to mitigate any going concern risks. As of March 31, 2024, due to these historical trends, there is substantial doubt about the Company’s ability to continue as a going concern for at least twelve months from the date these condensed unaudited consolidated financial statements were issued. 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 condensed unaudited 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 substantially in accounts at Partner Colorado Credit Union (“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, majority all of the Company’s revenue is generated by deposits and loans hosted by its PCCU pursuant to various services agreements. The Company had only one loan on its balance sheet as of March 31, 2024, which comprises 100 10 vi. Accounts Receivable Accounts receivable are recorded based on account fee schedules. While fees are generated from accounts for individual cannabis-related businesses (“CRB”) related accounts, amounts are initially collected by the financial institutional partners and remitted in the subsequent month. Accounts receivable - related party represents amounts due from PCCU under related party contracts disclosed in Note 8 to the unaudited condensed consolidated financial statements. vii. Loans Receivable CRB loans that significantly support the Company’s operations are recognized as assets on the balance sheet. These loans, intended to be held either for the foreseeable future or until their maturity or full repayment, are recorded at their outstanding principal balance. This amount is adjusted for any credit loss allowances and net of any deferred loan origination fees and costs, as applicable, to reflect the net investment in these loans. The Company recognizes interest income on CRB Loans over the loan term using the simple-interest method based on outstanding principal amounts. This approach ensures a systematic recognition of income, aligning with the time value of money principle. Interest income recognition is suspended when there is uncertainty regarding full loan repayment, such as in cases of loan impairment or when payments are overdue by ninety days or more. Loans under these conditions are placed on nonaccrual status. Any accrued interest not received by the time a loan is placed on nonaccrual is reversed from interest income. Subsequent interest payments on nonaccrual loans are recorded using either the cash basis or the cost recovery method until the loan meets the criteria for reclassification to accrual status. Loans are returned to accrual status when they become current (less than ninety days past due) and when there is reasonable assurance of future payment compliance, evidenced by the full satisfaction of both principal and interest payments due. Loans are assessed individually for potential charge-off, which typically occurs at the point of foreclosure. Charge offs are executed to reflect the realizable value of loans that are deemed uncollectible. The determination of a loan’s past-due status is based on its contractual repayment terms. Loans are either placed on nonaccrual status or charged-off ahead of their contractual delinquency dates if the collection of principal and interest is deemed doubtful, ceasing the recognition of interest income on such loans. viii. Allowance for Credit Losses (ACL) The Company has adopted Accounting Standards Codification Topic 326 - Financial Instruments - Credit Losses (ASC Topic 326), for estimation of probable credit losses with an expected credit loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The ACL is a valuation account that is deducted from the amortized cost basis of financial assets carried at their amortized cost, including loans held for investment, to present the net amount that is expected to be collected throughout the life of the financial asset. The estimated ACL is recorded through a provision for credit losses charged against operations. Management periodically evaluates the adequacy of the ACL to maintain it at a level it believes to be reasonable. The Company uses the same methods used to determine the ACL to assess any reserves needed for off-balance sheet credit risks such as unfunded loan commitments including Indemnified loans to PCCU. These reserves for off-balance sheet credit risks are presented in the liabilities section in the unaudited condensed consolidated balance sheets as an “Indemnity liability.” The ACL consists of two components: an asset-specific component for estimating credit losses for individual loans that do not share similar risk characteristics with other loans; and a pooled component for estimating credit losses for pools of loans that share similar risk characteristics. The ACL for the pooled component is derived from an estimate of expected credit losses primarily using an expected loss methodology that incorporates risk parameters such as probability of default (“PD”) and loss given default (“LGD”) which are derived from various vendor models and/or internally developed model estimation approaches for smaller homogenous loans. The PD is quantified by analyzing historical data to determine the rate at which loans have defaulted within the portfolio, relative to the total outstanding loans as of the end of the reporting period. This rate is expressed as a percentage and serves as a key indicator of the likelihood of default across the loan pool. LGD assessments are conducted to estimate the potential loss amount in the event of a default, considering the recoverable value from the collateral liquidation against the remaining loan balance. This involves a detailed analysis of two primary components: the loss on principal, which arises from the gap between the collateral’s liquidation value and the unpaid principal balance of the loan; and the loss associated with various ancillary costs to recover, including, but not limited to, foregone interest, transaction costs, legal and administrative fees, and expenses related to the maintenance and renovation of the property. The Company considers relevant current conditions and reasonable and supportable forecasts that relate to its lending practices and environment and the specific borrower and determines that the significant factor affecting the loan’s performance is the fact that these borrowers are involved in the cannabis business. Despite being legal at the state level in certain jurisdictions, cannabis remains federally illegal in the United States as of the date of this filing. As cannabis related lending is a new practice in the United States, there is very little historical or industry data on which to base a loss forecast. Therefore, significant judgement is required in creating a reasonable loss estimate, using similar non-MRB loans as a baseline and adjusting for the inherent risks in the cannabis industry. While the Company considers other qualitative factors, including national macroeconomic conditions, in its overall risk analysis, it has determined that they are not significant inputs to the overall loss estimate calculations. The ACL estimation process also applies an economic forecast scenario, or a composite of scenarios based on management’s judgment and expectations around the current and future macroeconomic outlook. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term of a loan excludes expected extensions, renewals, and modification under certain conditions. Recoveries on loans represent collections received on amounts that were previously charged off against the ACL. Recoveries are credited to the ACL when received, to the extent of the amount previously charged off against the ACL on the related loan. Any amounts collected in excess of this limit are first recognized as interest income, then as a reduction of collection costs, and then as other income. 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 the company 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 presented net of loans receivable asset for portfolio loans, or as a separate liability for indemnified loans, and recognized as interest income utilizing the interest method. x. Indemnity Liability Under the Loan Servicing Agreement and Commercial Alliance Agreement with PCCU, the Company had agreed to indemnify PCCU from all claims related to Company’s cannabis-related business, including but not limited to default-related credit losses as defined in the Loan Servicing Agreement. The indemnification component of the Loan Servicing Agreement and the Commercial Alliance Agreement (refer to Note 8 to the unaudited condensed consolidated financial statements) is accounted for in accordance with accounting standards codification (“ ASC”) 460 Guarantees In addition to default-related credit losses, the Company 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 3 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. The Company 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 Liabilities 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 analyzed 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 finite-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. 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 tested for impairment at least annually on the elected impairment test date of December 31 unless any events or circumstances indicate it is more likely than not that the fair value of the goodwill is less than its carrying value. 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. xiv. 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 have been listed on the Nasdaq 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 xv. 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. xvi. 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. Majority of the revenue consists 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. Under the terms of the Loan Servicing Agreement and the Commercial Alliance Agreement, the Company is responsible for covering account hosting costs associated with the fees generated from deposits held at PCCU. These costs are classified as “General and Administrative Expenses” in the Consolidated Statements of Operations. 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. SHF recognizes revenue from interest on loans and investment income distributed by PCCU, which is determined by particular customer account balances. As per the Loan Servicing Agreement and the Commercial Alliance Agreement, SHF bears the expenses for hosting investments and servicing loans related to this interest and investment income. These expenses are allocated to “General and Administrative Expenses” in the Consolidated Statements of Operations. 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 of America. xvii. Contract Liabilities The Company recognizes a contract liability if the customer’s payment of consideration precedes the reporting entity’s performance. As of March 31, 2024, the Company recorded contract liabilities amounting to $ 2,692 21,922 xviii. Warrants Liabilities The Company has evaluated each of the warrant arrangements separately in accordance with “Distinguishing Liabilities from Equity” (“ASC 480”) and “Derivatives and Hedging” (“ASC 815”), to determine classification as either equity instruments or liabilities based on the specific terms and features of each warrant. Warrants are recognized as equity if they are indexed to our own stock and meet the equity classification criteria in ASC 815-40. These warrants are recorded within stockholders’ equity at their issuance date and are not subsequently remeasured at fair value. Conversely, warrants that do not meet the criteria for equity classification under ASC 815-40 are classified as liabilities. Such warrants are initially recorded at fair value on the issuance date and are subject to remeasurement at each balance sheet date thereafter. Any changes in fair value are recognized in the statement of operations. None of our warrant contracts met criteria to be considered indexed to their own stock, and as a result, have each been accounted for as a liability financial instrument. The fair value of warrants classified as liabilities is determined using appropriate valuation models, such as the Black- Scholes model, which incorporates various inputs, including the current stock price, expected volatility, risk-free interest rate, and the expected term of the warrants. xix. Deferred consideration In line with ASC Topic 815, the Company treats the deferred consideration from the Abaca acquisition as a derivative liability, since it does not fulfill the equity classification criteria. As a result, this obligation is recognized as a liability on the balance sheet at fair value and is adjusted to reflect its fair value at the end of each reporting period. The liability will be reassessed at fair value on every balance sheet date until the obligation’s term concludes. Fluctuations in its fair value are recorded in the consolidated statements of operations. xx. 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 derivatives as an assets or liabilities carried at their fair value and adjusts the forward purchase derivatives 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 unaudited condensed consolidated statement of operations. In December 2023, the company calculated its valuation using a Monte Carlo Simulation set within a risk-neutral environment. Initiated in December 2022, this strategy was applied to assess the fair value of the forward purchase agreement (FPA) derivatives, with an underlying assumption that future stock prices would adhere to a Geometric Brownian Motion trajectory. Throughout the first quarter of 2024, there were no transactions by FPA holders, and no considerable shifts in risk factors that could influence the valuation of FPA derivatives were observed. xxi. 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. 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. xxii. 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. 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. 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 unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2024 and December 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. xxiii. 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 Current Expected 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 instru |
Deferred Consideration
Deferred Consideration | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Consideration | |
Deferred Consideration | Note 3. Deferred Consideration Under the revised Abaca Merger Agreement, the Company compensated Abaca with $ 30 9 2,100,000 The revised terms, as of the second amendment on October 26, 2023, stipulated new deferred stock consideration of 5,835,822 2.00 1.5 5 2.00 The change in the amount of deferred consideration from January 1, 2023, to March 31, 2024, is as follows: Schedule of Change in Deferred Consideration Stock Cash Third Anniversary January 1, 2023 $ 11,456,639 $ 5,650,775 $ - Less: Working capital adjustment (108,691 ) - - Less: Issuance of shares and payment to shareholders (4,085,075 ) (3,000,000 ) - Less: Issuance of Abaca warrants (1,643,699 ) - - Less: Issuance of third anniversary payment consideration (430,000 ) - 430,000 Less: Gain recognized in the consolidated statements of operations (5,645,107 ) - - Add: Fair value adjustment 455,933 239,017 380,000 December 31, 2023 - 2,889,792 810,000 Add: Fair value adjustment - 31,465 (216,000 ) March 31, 2024 $ - $ 2,921,257 $ 594,000 |
Goodwill and Finite-lived Intan
Goodwill and Finite-lived Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Finite-lived Intangible Assets | Note 4. Goodwill and Finite-lived Intangible Assets The Company’s goodwill was derived from the Abaca acquisition transaction executed on November 15, 2022, where the purchase price exceeded the fair value of the net identifiable assets acquired. Goodwill is tested for impairment at least annually, or more frequently if a triggering event occurs. In 2023, the Company conducted an interim impairment assessment on June 30, 2023, and found that the carrying value of goodwill exceeded its fair value, leading to the recognition of a $ 13.21 6,058,000 As of March 31, 2024, the Company has not conducted an interim impairment assessment of its assets, due to the absence of any triggering events. Therefore, no additional impairment charges have been recognized in this reporting period. As of March 31, 2024, and December 31, 2023, the Company’s accumulated goodwill impairment was $ 13,208,276 Finite-lived intangible assets The Company reviews its finite-lived intangible assets for impairment at least annually on December 31 st In 2023, following a triggering event in the second quarter, the Company performed an interim goodwill analysis. In accordance with our established policy, an annual review was also conducted on December 31, 2023. The finite-lived intangible assets evaluated include market-related intangibles, customer relationships, and developed technologies. The interim analysis resulted in an impairment charge of $ 3,680,463 2,019,000 As of March 31, 2024, the Company has not conducted an interim impairment assessment of its assets, due to the absence of any triggering events. Therefore, no additional impairment changes have been recognized in this reporting period. Following is a summary of the Company’s finite-lived intangible assets as of March 31, 2024 and December 31, 2023: Schedule of Finite Lived Intangible Assets Remaining December 31, 2023 Acquired in Amortization Impairment March 31, 2024 Market related intangible assets 6.62 $ 65,216 $ - $ 2,540 $ - $ 62,676 Customer relationships 8.62 56,775 - 1,687 - 55,088 Developed technology 5.62 3,599,754 - 152,628 - 3,447,126 Total intangible assets $ 3,721,745 $ - $ 156,855 $ - $ 3,564,890 Remaining December 31, 2022 Acquired in Amortization Impairment December 31, 2023 Market related intangible assets 6.87 $ 2,066,918 $ - $ 136,034 1,865,668 $ 65,216 Customer relationships 8.87 1,974,795 - 103,225 1,814,795 56,775 Developed technology 5.87 6,579,374 - 960,619 2,019,001 3,599,754 Total intangible assets $ 10,621,087 $ - $ 1,199,878 5,699,464 $ 3,721,745 During the three months ended March 31, 2023, amortization expense and impairment of finite lived intangible assets were $ 354,911 0 |
Loans Receivable
Loans Receivable | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Loans Receivable | Note 5. Loans Receivable Commercial real estate loans receivable, net consist of the following: Schedule of Commercial Real Estate Loans Receivable March 31, 2024 December 31, 2023 Commercial real estate loans receivable, gross $ 401,564 $ 404,577 Allowance for credit losses (9,081 ) (10,723 ) Commercial real estate loans receivable, net 392,483 393,854 Current portion (12,620 ) (12,391 ) Noncurrent portion $ 379,863 $ 381,463 Allowance for Credit Losses The allowance for credit losses is maintained at a level believed to be sufficient to provide for estimated credit losses based on evaluating known and inherent risks in the loan portfolio. The Company’s estimated the allowance for credit losses on the reporting date in accordance with the credit loss policy described in Note 2 to the unaudited condensed consolidated financial statements. The allowance for credit losses consists of the following activity for the three months ended March 31, 2024 and three months ended March 31, 2023: Schedule of Allowance For Loan Losses March 31, 2024 March 31, 2023 Allowance for credit losses Beginning balance $ 10,723 $ 21,488 Cumulative effect from adoption of CECL - 14,980 Charge-offs - - Recoveries - (15,390 ) Benefit (1,642 ) - Ending balance $ 9,081 $ 21,078 Loans receivable: Individually evaluated for an allowance for credit loss $ - $ - Collectively evaluated for an allowance for credit loss 401,564 413,292 $ 401,564 $ 413,292 Allowance for credit losses: Individually evaluated for an allowance for credit loss $ - $ - Collectively evaluated for an allowance for credit loss 9,081 21,078 $ 9,081 $ 21,078 On March 31, 2024 and December 31, 2023, no loans were past due or classified as non-accrual. 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. The Company continuously evaluates the credit quality of each indemnified loan by assessing the risk factors and assigning a risk rating based on a variety of factors. The detailed breakdown of risk factors described in Note 6 to the unaudited condensed consolidated financial statements. The carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value within each risk rating is as follows: Schedule of Risk Rating Risk rating March 31, 2024 December 31, 2023 4 $ 401,564 $ 404,577 Grand total $ 401,564 $ 404,577 |
Indemnification Liability
Indemnification Liability | 3 Months Ended |
Mar. 31, 2024 | |
Indemnification Liability | |
Indemnification Liability | Note 6. Indemnification Liability As discussed at Note 8 to the unaudited condensed consolidated financial statements, and pursuant to the Commercial Alliance Agreement with PCCU, 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 0.35% of the outstanding loan principal funded and serviced by PCCU and 0.25% of the outstanding loan principle serviced by SHF. The below schedule details outstanding amounts funded by PCCU and categorized as either collateralized loans or unsecured loans and lines of credit. Schedule of Outstanding Amounts March 31, 2024 December 31, 2023 Secured term loans $ 57,737,288 $ 55,215,013 Unsecured loans and lines of credit 431,640 431,640 Total loans funded by PCCU $ 58,168,928 $ 55,646,653 Secured loans contained an interest rate ranging from 7.35 15.25 Unsecured loans and lines of credit contain variable rates ranging from Prime +1.50% to Prime +6.00%. 525,000 996,958 SHF has agreed to indemnify PCCU for losses on certain PCCU loans. The indemnity liability reflects SHF management’s estimate of probable credit losses inherent under the agreement at the balance sheet date. The Company’s estimated indemnity liability on the reporting date was calculated in accordance with the allowance for credit loss policy described in Note 2 to the unaudited condensed consolidated financial statements. The indemnity liability activity are as follows: Schedule of Indemnity Liability Three Months ended Three Months ended Beginning balance $ 1,382,408 $ 499,465 Cumulative effect from adoption of CECL - 566,341 Charge-offs - - Recoveries - - (Benefit)/ Provision (67,145 ) 82,026 Ending balance $ 1,315,263 $ 1,147,832 As of March 31, 2024, all loans within the Company’s portfolio were current and performing. This is in contrast to the situation as of December 31, 2023, when one loan was under nonaccrual status. The Company successfully negotiated an amendment agreement on December 29, 2023, which brought this loan back to current status through the payment of all overdue amounts. Under the terms of the amendment, the loan’s maturity date was extended to November 1, 2024. Interest income from this loan is now recognized on a cash basis. Given that the loan was delinquent for over 300 days, it has been incorporated into the Company’s Current Expected Credit Losses (CECL) methodology, which aids in estimating credit losses for this particular loan and the overall loan portfolio collectively. 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. The Company continuously evaluates the credit quality of each indemnified loan by assessing the risk factors and assigning a risk rating based on a variety of factors. Risk factors include property type, geographic and local market dynamics, physical condition, projected cash flow, loan structure and exit plan, loan-to-value ratio, fixed charge coverage ratio, project sponsorship, and other factors deemed necessary. Based on a 10-point scale, the Company’s loans are rated “0” through “10,” from less risk to greater risk, which ratings are defined as follows: Risk Category Description 0 Risk Free Free of repayment risk. The loan is fully guaranteed by the full faith and backing of the US Government or entirely secured by cash controlled by SHF. 1 Highest Quality High caliber loan with the lowest risk of default. Significant excess cash flow after debt service and moderate to low leverage. 2 Excellent High quality loan that carry’s a low risk of default. Strong cash flow and relatively few negative individual risk factors. 3 Good Loans with lower-than-average level of risk. Excess cash flow and other factors contributing to the overall low level of risk in the loan. 4 Average Risk factors may be mixed with some negative and some positive aspects, but the overall rating will indicate an average level of risk. 5 Fair Loans in this category have the maximum level of risk that can be accepted while still recommending a new loan for origination. The loan risk factors may contain multiple negative factors, but they are generally outweighed by the positive aspects of the loan. 6 Watch List There is a temporary and curable condition resulting in a lower risk rating. 7 Special Mention There is a potential weakness that may result in the deterioration of the prospect of repayment that are not temporary and may require additional collection or workout efforts. 8 Substandard Loans in this category are inadequately protected by the current net worth and paying capacity of the obligors or of the collateral pledged and have well-defined weaknesses that jeopardize the liquidation of the debt with distinct possibility of loss. SHF may be required to advance additional funds to manage the loan. Escalated collection activities such as foreclosure have been scheduled with anticipated losses up to 20% of the outstanding balance. 9 Doubtful Collection or liquidation in full highly questionable and improbable. Escalated collection activities such as foreclosure have commenced with anticipated losses from 20% to 50% of the outstanding balance. 10 Loss Uncollectable loans. A complete write-off is imminent although a partial recovery may be affected in the future. SHF has agreed to indemnify PCCU from all claims related to SHF’s cannabis-related business. Other than potential credit losses, no other circumstances were identified meeting the requirements of a loss contingency. The carrying value, excluding the CECL Reserve, of the Company’s indemnified loans held at carrying value within each risk rating is as follows: Schedule of Indemnified Loans Risk Rating Risk rating March 31, 2024 December 31, 2023 3 $ 9,988,588 $ 10,100,000 4 3,425,158 3,431,640 5 30,553,007 28,115,013 6 10,900,000 10,900,000 7 - 3,100,000 8 3,302,175 - Grand total $ 58,168,928 $ 55,646,653 The provision for credit losses on the statement of operations consists of the following activity for the period ended March 31, 2024 and March 31, 2023: Schedule of Provision for Loan Losses Commercial Indemnity Total Commercial Indemnity Total March 31, 2024 March 31, 2023 Commercial Indemnity Total Commercial Indemnity Total Provision (benefit) $ (1,642 ) (67,145 ) (68,787 ) $ (15,390 ) 82,056 66,666 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 7. Property and Equipment, Net Property and equipment consist of the following: Schedule of Property and Equipment March 31, 2024 December 31, 2023 Equipment $ 45,397 $ 45,397 Software 51,692 51,692 Improvement 71,635 71,635 Office furniture 215,504 215,504 Property and equipment, gross 384,228 384,228 Less: accumulated depreciation (338,862 ) (300,008 ) Property and equipment, net $ 45,366 $ 84,220 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 8. Related Party Transactions Commercial Alliance Agreement On March 29, 2023, the Company and PCCU entered into the Commercial Alliance Agreement. This Agreement sets forth the terms and conditions of the lending and account-related services, governing the relationship between the Company and PCCU. The Commercial Alliance Agreement sets forth the application, underwriting, loan approval, and foreclosure process for loans from PCCU to borrowers that are cannabis-related businesses and the loan servicing and monitoring responsibilities provided by the Company and PCCU. In particular, the Commercial Alliance Agreement provides for procedures to be followed upon the default of a loan to ensure that neither the Company nor PCCU will take title to or possession of any cannabis-related assets, including real property, that may be collateral for a loan funded by PCCU pursuant to the Commercial Alliance Agreement. Under the Commercial Alliance agreement, the PCCU has the right to receive monthly fees for managing loans. For SHF-serviced loans, which are CRB loans provided by the PCCU but primarily handled by SHF, a yearly fee of 0.25 0.35 In addition, the Commercial Alliance Agreement provides for certain fees to be paid to the Company for certain identified account related services to include: 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 for a monthly fee equal to $30.96 per account in 2022, $25.32-$27.85 per account in 2023, and $26.08-$28.69 in 2024. In addition, as it pertains to CRB deposits held at PCCU, investment and interest income earned on these deposits (excluding interest income on loans funded by PCCU) will be shared 25% to PCCU and 75% to the Company. Finally, under the Commercial Alliance Agreement, PCCU will continue to allow its ratio of CRB-related deposits to total assets to equal at least 60% unless otherwise dictated by regulatory, regulator or policy requirements. The initial term of the Commercial Alliance Agreement is for a period of two years, with a one-year automatic renewal unless a party provides one hundred twenty days’ written notice prior to the end of the term. The below schedule demonstrates the ratio of CRB related loans funded by PCCU to the relative lending limits: Schedule of Demonstrated Deposit Capacity March 31, 2024 December 31, 2023 CRB related deposits $ 106,692,488 $ 129,350,998 Capacity at 60% 64,015,493 77,610,599 PCCU net worth 83,739,916 81,087,746 Capacity at 1.3125 109,908,640 106,670,306 Limiting capacity 64,015,493 77,610,599 PCCU loans funded 57,737,287 55,660,039 Amounts available under lines of credit 775,000 525,000 Incremental capacity $ 5,503,206 $ 21,425,560 The revenue from the PCCU Agreements recognized in the statements of operations consists of the following for the three months ended March 31, 2024, and March 31, 2023: Schedule of Revenue from Operations Three months ended Three months ended Account servicing agreement $ - $ 3,261,284 Commercial alliance agreement 3,585,856 - Total $ 3,585,856 $ 3,261,284 Revenue $ 3,585,856 $ 3,261,284 The operating expense from the PCCU Agreements recognized in the statements of operations consists of the following for the three months ended March 31, 2024, and March 31, 2023: Schedule of Operating Expense from Operations Three months ended Three months ended Support services agreement $ - $ 378,730 Loan servicing agreement - 11,929 Commercial alliance agreement 300,261 - Total $ 300,261 $ 390,659 Operating expense $ 300,261 $ 390,659 Issuance of shares to PCCU 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 issued 11,200,000 46.39 ● 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 which supersedes the Loan Servicing Agreement, as well as the Amended and Restated Support Services Agreement and the Amended and Restated Account Servicing Agreement. The outstanding balances associated with the PCCU disclosed in the balance sheet are as follows: Schedule of Outstanding Balances from Balance Sheet March 31, 2024 December 31, 2023 Accounts receivable $ 1,111,390 $ 2,095,320 Accounts payable 125,693 577,315 Senior Secured Promissory Note (Refer to Note 9 to the unaudited condensed consolidated financial statements) 13,270,622 14,011,166 Of the $ 5.6 8.6 5 4.6 |
Senior Secured Promissory Note
Senior Secured Promissory Note | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Senior Secured Promissory Note | Note 9. Senior Secured Promissory Note Schedule of Senior Secured Promissory Note March 31, 2024 December 31, 2023 Senior Secured Promissory Note (Current) $ 3,028,738 $ 3,006,991 Senior Secured Promissory Note (long term) 10,241,884 11,004,175 Total $ 13,270,622 $ 14,011,166 On March 29, 2023, the Company and PCCU entered into definitive transaction documents to settle and restructure the deferred obligation related to business Combination under which the Company has issued the five-year Senior Secured Promissory Note (the “Note”) in the principal amount of $ 14,500,000 4.25 The Note amount will be paid in 54 installments of principal and interest of $ 295,487 The repayment schedule of the outstanding principal amount on March 31, 2024, is as follows: Schedule of Outstanding Amount on Debt Year of payment 2024 $ 2,266,449 2025 3,138,931 2026 3,274,966 2027 3,416,896 2028 1,173,380 Grand total $ 13,270,622 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
Leases | Note 10. 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 seven years 820,777 859,861 978,461 1,007,993 The Company analyzes 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 three months ended March 31, 2024 and March 31, 2023, included in Unaudited Condensed Consolidated Statements of Operations, is detailed in the table below: Schedule of Lease Cost Three months ended Three months ended Operating lease cost $ - $ - Short-term lease cost 69,437 87,742 Total Lease Cost $ 69,437 $ 87,742 Schedule of Right Of Use Assets March 31, 2024 December 31, 2023 ROU assets that are related to lease properties are presented as follows: Beginning balance $ 859,861 $ 1,016,198 Additions to right-of-use assets - - Amortization charge for the period (39,084 ) (156,337 ) Lease modifications - - Ending balance $ 820,777 $ 859,861 Further information related to leases is as follows: Weighted-average remaining lease term 3.17 3.42 Weighted-average discount rate 6.87 % 6.87 % Future minimum lease payments as of March 31, 2024, and December 31, 2023, are as follows: Schedule of Future Minimum Lease Payments Year 2024 $ 151,111 $ 197,520 2025 217,925 217,925 2026 222,275 222,275 2027 226,705 226,705 2028 231,216 231,216 Thereafter 117,710 117,710 Total future minimum lease payments $ 1,166,942 $ 1,213,351 Less: Imputed interest 188,481 205,358 Operating lease liabilities 978,461 1,007,993 Less: Current portion 142,863 132,546 Non-current portion of lease liabilities $ 835,598 $ 875,447 |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 11. Revenue Disaggregated revenue Revenue by type are as follows: Schedule of Disaggregated Revenue 2024 2023 Three months ended 2024 2023 Deposit, activity, onboarding income $ 1,620,994 $ 2,245,831 Safe Harbor Program income 19,230 51,103 Investment income 773,819 1,417,152 Loan interest income 1,636,756 466,293 Total Revenue $ 4,050,799 $ 4,180,379 Account fee income consists of deposit account fees, activity fees and onboarding income, which are recognized on periodic basis as per the fee schedule with financial partner institutions. Safe Harbor Program income consists of outsourced support to other financial institutions providing banking to the cannabis industry whose income is recognized on the basis of usage as per the agreements. Loan interest income consist of interest earned on both direct and indemnified loans pursuant to a commercial alliance agreement with PCCU. Investment income consist of interest earned on the daily deposits balance with financial institution. Under our Commercial Alliance Agreement, we are obligated to remit 25 1,217,675 731,425 1,636,756 104,259 160,101 35,901 2,245,831 1,417,152 466,293 55,425 323,305 11,929 |
Deferred Underwriter Fee
Deferred Underwriter Fee | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Underwriter Fee | |
Deferred Underwriter Fee | Note 12. Deferred Underwriter Fee In connection with the business combination, the Company executed a note on September 28, 2022 with EF Hutton related to PIPE financing under which the Company was obligated to pay the principal sum of $ 2,166,250 715,750 362,625 The Company made the payment of its first installment of $ 715,750 1,450,500 550,000 900,500 |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 13. Commitments and contingencies ● 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. ● In connection with the issuance of common stock to Abaca shareholders, the Company commits to registering the stock upon the exercise of Warrants if required by law or regulation to ensure the shares can be sold without restrictive legends, known as the Warrant Registration Requirement. Should this requirement arise, the Company is obliged to file a registration statement with the SEC within 45 calendar days of notification of the Warrant Registration Requirement. The failure to file within this timeframe constitutes an event of default. Moreover, the Company is dedicated to making the registration statement effective as promptly as possible and maintaining its effectiveness, along with a current prospectus, until the Warrants expire according to this Agreement’s terms. In the event a registration statement triggered by a Warrant Registration Requirement is not declared effective by the SEC within one year from its filing date, Warrant holders are entitled to exercise their Warrants on a cashless basis from the 366th day post-filing until the statement becomes effective. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 14. 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 the three month period ended March 31 2024 2023 Net Income/ (loss) $ 2,049,676 $ (1,413,447 ) Weighted average shares outstanding – basic 55,213,609 25,670,730 Basic net income/ (loss) per share $ 0.04 $ (0.06 ) Weighted average shares outstanding – diluted 56,268,075 25,670,730 Diluted net income/ (loss) per share $ 0.04 $ (0.06 ) Schedule of Weighted Average Shares Outstanding - Basic And Diluted Weighted average shares calculation - basic 2024 2023 Three months ended March 31 Weighted average shares calculation - basic 2024 2023 Company public shares 3,926,598 3,926,598 Company initial stockholders 3,403,175 3,403,175 PCCU stockholders 22,586,139 11,759,472 Shares issued for abaca acquisition 7,935,800 2,099,977 Restricted stock units issued 1,308,089 566,755 Conversion of preferred stock 16,053,808 3,914,753 Grand total 55,213,609 25,670,730 Weighted average shares outstanding - basic 55,213,609 25,670,730 Weighted average shares calculation - diluted 2024 2023 Three months ended March 31 Weighted average shares calculation - diluted 2024 2023 Shares used in computation of basic earnings per share 55,213,609 - Shares to be issued to Abaca shareholders 750,000 - Share based payments 215,666 - Conversion of preferred stock 88,800 - Grand total 56,268,075 - Certain share-based equity awards and warrants were excluded from the computation of dilutive earnings/ (loss) per share because inclusion of these awards would have had an anti-dilutive effect. The following table reflects the awards excluded. Schedule of Share-based equity awards and Warrants Excluded from Computation of Earnings March 31, 2024 March 31, 2023 Warrants 12,036,588 7,036,588 Share based payments 2,284,080 2,775,655 Shares to be issued to Abaca shareholders - 6,433,839 Conversion of preferred stock - 10,896,000 Grand total 14,320,668 27,142,082 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. |
Forward Purchase Agreement
Forward Purchase Agreement | 3 Months Ended |
Mar. 31, 2024 | |
Forward Purchase Agreement | |
Forward Purchase Agreement | Note 15. Forward Purchase Agreement On June 16, 2022, the Company entered into a Forward Purchase Agreement with Midtown East Management NL, LLC (“Midtown East”). Subsequent to entering into the Forward Purchase Agreement, the Company 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, the Company 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 the Company, 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 ● In 2022, an agreement was reached among the Company, its common shareholders, and preferred investors, leading to a reduction in the make-whole price to $ 1.25 37.9 4.6 The reconciliation statement of the Class A common stock held by the parties are as follows: Schedule of Forward Purchase Agreement As at Shares sold during As at S.no Name of the party Opening Amount Shares Amount Shares Rest price Amount 1 Vellar 971,204 $ 1,214,005 - $ - 971,204 1.25 $ 1,214,005 2 Midtown East 1,517,924 1,897,405 - - 1,517,924 1.25 1,897,405 3 Verdun 1,178,249 1,472,811 - - 1,178,249 1.25 1,472,811 Grand total 3,667,377 $ 4,584,221 - $ - 3,667,377 $ 4,584,221 |
Warrant Liabilities
Warrant Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Warrant Liabilities | |
Warrant Liabilities | Note 16. Warrant Liabilities Public and Private Placement Warrants As of March 31, 2024, and December 31, 2023, the Company has 5,750,000 264,088 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 ● 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. 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, 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 March 31, 2024 and December 31, 2023, the Company has 1,022,500 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. Abaca Warrants As of March 31,2024, and December 31, 2023, the Company has 5,000,000 The Abaca 5,000,000 2.00 5 2.00 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | Note 17. 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 exchange traded price, 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. In the first quarter of 2024, the Company internally assessed the value of these derivatives with Level 3 inputs, which are derived from Black-Scholes model. This is a change from the first quarter of 2023, when the valuation was based on third-party reports, also utilizing Level 3 inputs for these derivatives. Management believes that this change was necessary to enhance the precision and control over the valuation process, allowing for a more tailored and responsive approach to the unique characteristics of the derivatives and the evolving market conditions. PIPE Warrants: PIPE Warrants are recorded at fair value on a recurring basis. In the first quarter of 2024, the Company internally assessed the value of these derivatives with Level 3 inputs, which are derived from Black-Scholes model. This is a change the first quarter of 2023, when the valuation was based on third-party reports, also utilizing Level 3 inputs for these derivatives. Management believes that this change was necessary to enhance the precision and control over the valuation process, allowing for a more tailored and responsive approach to the unique characteristics of the derivatives and the evolving market conditions. Abaca Warrants: Abaca Warrants are recorded at fair value on a recurring basis. The Company internally assessed the value of these derivatives with Level 3 inputs. Level 3 inputs, based on unobservable data derived from Black-Scholes model. Third Anniversary Payment Consideration: Third anniversary payment consideration 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 unobservable data derived from Black Scholes-Merton model. Forward Purchase Option Derivatives: Forward purchase option derivatives are recorded at fair value on a recurring basis. In 2022, the Company values these derivatives based on third party reports for Level 3 inputs. In 2023 and 2024, no significant risk factor changes affecting FPA derivative values were noted. 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 March 31, 2024 and December 31, 2023: Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis Total Fair Quoted Significant Total Fair Quoted Significant March 31, 2024 December 31, 2023 Total Fair Quoted Significant Total Fair Quoted Significant Description Liabilities: PIPE warrants $ 189,220 - 189,220 $ 273,124 - 273,124 Public warrants $ 430,675 430,675 - $ 481,850 481,850 - Private placement warrants $ 20,315 - 20,315 $ 25,070 - 25,070 Abaca warrant $ 2,268,432 - 2,268,432 $ 3,384,085 - 3,384,085 Forward purchase derivative liability $ 7,309,580 - 7,309,580 $ 7,309,580 - 7,309,580 Third anniversary payment consideration $ 594,000 - 594,000 $ 810,000 - 810,000 Liabilities $ 594,000 - 594,000 $ 810,000 - 810,000 Assets Measured at Fair Value on a Nonrecurring Basis Assets that are measured at fair value on a nonrecurring basis primarily comprises of property, plant and equipment, right-to-use assets, finite lived intangible assets and goodwill. The Company does not record these at fair value on a recurring basis, however, the carrying value of the assets may be reduced to fair value when the Company determines that impairment has occurred. There were no assets or liabilities recorded at fair value on a nonrecurring basis for the period ended March 31, 2024 and March 31, 2023. 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 Level 1 Level 2 Level 3 As on March 31, 2024 Carrying Fair value Fair value measurement using Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 5,626,362 $ 5,626,362 $ 5,626,362 $ - $ - Forward purchase receivables 4,584,221 4,584,221 4,584,221 - - Loans 392,483 362,671 362,671 Liabilities Deferred consideration 2,921,257 2,921,257 2,921,257 - - Senior Secured Promissory note 13,270,622 12,137,875 - - 12,137,875 Indemnity liability 1,315,263 1,315,263 1,315,263 - - Public warrants 430,675 430,675 430,675 - - Private placement warrants 20,315 20,315 - - 20,315 PIPE Warrants 189,220 189,220 - - 189,220 Abaca Warrants 2,268,432 2,268,432 - - 2,268,432 Third anniversary payment consideration 594,000 594,000 - - 594,000 Forward purchase derivative 7,309,580 7,309,580 - - 7,309,580 Level 1 Level 2 Level 3 As on December 31, 2023 Carrying Fair value Fair value measurement using Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 4,888,769 $ 4,888,769 $ 4,888,769 $ - $ - Forward purchase receivables 4,584,221 4,584,221 4,584,221 - - Loans 330,579 363,561 - - 363,561 Liabilities Deferred consideration 2,889,792 2,889,792 2,889,792 - - Senior secured promissory note 14,011,166 12,750,204 - - 12,750,204 Public warrants 481,850 481,850 481,850 - - Private placement warrants 25,070 25,070 - - 25,070 PIPE warrants 273,124 273,124 - - 273,124 Abaca warrants 3,384,085 3,384,085 - - 3,384,085 Forward purchase derivative 7,309,580 7,309,580 - - 7,309,580 Third anniversary payment consideration 810,000 810,000 - - 810,000 The change in the assets measured at fair value on a recurring basis for which the Company 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 Abaca Private Third Forward For the period ended March 31, 2024 PIPE Abaca Private Third Forward Balance at the beginning of the period $ 273,124 $ 3,384,085 $ 25,070 $ 810,000 $ 7,309,580 Issued to Abaca shareholders - - - - - Fair value adjustment (83,904 ) (1,115,653 ) (4,755 ) (216,000 ) - Balance at the end of the period $ 189,220 $ 2,268,432 $ 20,315 $ 594,000 $ 7,309,580 PIPE Abaca Private Third Forward For the period ended March 31, 2023 PIPE Abaca Private Third Forward Balance at the beginning of the period $ 286,300 $ - $ 19,110 $ - $ 7,309,580 Fair value adjustment (211,538 ) - (11,157 ) - - Balance at the end of the period $ 74,762 $ - $ 7,953 $ - $ 7,309,580 As of March 31, 2024 and on December 31, 2023, the valuation of private placement warrants, PIPE warrants, and Abaca warrants was carried out using the Black-Scholes model, while the fair value of the Abaca third anniversary payment consideration was determined using the Black Scholes Merton Option pricing model. Contrastingly, in the first quarter of 2023, the fair value assessments for both the private placement warrants and PIPE warrants were conducted using the Black-Scholes model and the Black Scholes-Merton model, respectively. Management believes that the change in method for PIPE warrants was necessary to enhance the precision and control over the valuation process, allowing for a more tailored and responsive approach to the unique characteristics of the derivatives and the evolving market conditions. As of March 31, 2024 and December 31, 2023, these warrants were valued for Level 3 inputs, which are based on observable data to value these derivatives. As of December 31, 2023, the Company assessed the fair value of its forward purchase agreement (FPA) derivative utilizing a Monte Carlo Simulation within a risk-neutral setting, which is a particular instance of the Income Approach, based on calculations from December 31, 2022. Throughout the first quarters of both 2023 and 2024, there were no notable alterations in risk factors that would impact the valuation of the FPA derivative. Consequently, management retained the December 31, 2022, valuation for December 31, 2023 and March 31, 2024. 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. During the first quarters of both 2023 and 2024, there were no changes in the classification of financial instruments within Level 2 and Level 3 of the fair value hierarchy. 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 PIPE Private Third Abaca PIPE Private Third Abaca March 31, 2024 December 31, 2023 PIPE Private Third Abaca PIPE Private Third Abaca Exercise price $ 5 11.5 - 2 $ 5 11.5 - 2 Share Price $ 0.97 0.97 0.97 0.97 $ 1.42 1.42 1.42 1.42 Expected term (years) 3.49 3.49 1.51 4.57 3.74 3.74 1.76 4.84 Volatility 76.00 % 76.00 % 76.00 % 76.00 % 62.95 % 62.95 % 62.95 % 62.95 Risk-free rate 4.26 % 4.26 % 4.26 % 4.36 % 4.25 % 4.25 % 4.25 % 4.25 Warrants and rights outstanding, measurement input 4.26 % 4.26 % 4.26 % 4.36 % 4.25 % 4.25 % 4.25 % 4.25 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 on March 31, 2024 and December 31, 2023: Schedule of Level 3 Fair Value Measurements Inputs March 31, 2024 December 31, 2023 Reset Price $ 1.25 $ 1.25 Expected term (years) 1.49 1.74 Additional Maturity Consideration per share $ 2.00 $ 2.00 Volatility 46 % 46 % Risk-free rate 4.2 % 4.2 % Risk-adjusted discount rate 13.4 % 13.4 % Derivative liability, measurement input 13.4 % 13.4 % |
Tax
Tax | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Tax | Note 18. Tax For the three months ended March 31, 2024, the Company recorded income tax benefit of $ 438,885 28.14 21.0 44,278,374 43,829,019 The Company recognizes income tax benefits from uncertain tax positions where the realization of the ultimate benefit is uncertain. As of both March 31, 2024, and December 31, 2023, the Company has no unrecognized income tax benefits. |
401(k) Plan
401(k) Plan | 3 Months Ended |
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
401(k) Plan | Note 19. 401(k) Plan The Company offers to all employees a tax-qualified retirement contribution plan, with the Company’s 100 4 35,233 20,663 |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 20. Stockholders’ Equity Preferred Stock The Company is authorized to issue 1,250,000 0.0001 111 1,101 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 Common Stock The Company is authorized to issue up to 130,000,000 .0001 55,431,001 54,563,372 3,667,377 2022 Equity Incentive Plan Share-based compensation expense recognized for the three months ended March 31, 2024 and March 31, 2023 totaled $ 0.6 1.6 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, stock bonus awards, or performance compensation awards in the three months ended March 31, 2024 and March 31, 2023. In conjunction with the 2024 Plan, as of March 31, 2024, the Company had granted stock options and restricted stock units which are described in more detail below. Stock Options Stock options are awarded to encourage ownership of the Company’s Class A 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 The assumptions used to determine the fair value of options granted in the three months ended March 31, 2024, 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 Management has considered the expected volatility at 100 A summary of the Company’s stock option activities and related information for the three months ended March 31, 2024 is as follows: Schedule of Stock Option and Related Information Stock Option No. of Stock Weighted- Weighted- December 31, 2023 2,286,010 $ 5.43 1.65 Granted - - - Exercised - - - Expired - - - Cancelled / Forfeited (1,930 ) 1.56 - March 31, 2024 2,284,080 $ 5.43 1.40 A summary of the Company’s stock option activities and related information for the three months ended March 31, 2023 is as follows: Stock Option No. of Stock Weighted- Weighted- December 31, 2022 2,170,000 $ 3.53 2.02 Granted 336,730 1.03 2.76 Exercised - - - Expired - - Cancelled / Forfeited (64,875 ) 3.13 - March 31, 2023 2,441,855 $ 3.20 2.39 The following options were outstanding at their respective exercise price: Schedule of Options Outstanding Exercise price options outstanding March 31, 2024 March 31, 2023 $ 1.56 374,580 359,355 $ 2.58 350,000 350,000 $ 4.00 309,500 482,500 $ 6.67 1,250,000 1,250,000 Total 2,284,080 2,441,855 Restricted Stock Units (“RSUs”) A summary of the Company’s RSU activities and related information for the three months ended March 31, 2024 is as follows: Schedule of Restricted Stock Units Restricted Stock Units No. of RSU Weighted- Weighted- December 31, 2023 323,500 $ 1.31 2.00 Granted - - - Vested (107,833 ) 1.31 - Expired - - - Cancelled / Forfeited - - - March 31, 2024 215,667 $ 1.31 1.75 Restricted Stock Units No. of RSU Weighted- Weighted- December 31, 2022 - $ - - Granted 963,528 1.31 2.76 Vested - - - Expired - - - Cancelled / Forfeited - - - March 31, 2023 963,528 $ 1.31 2.76 The following RSU were outstanding at their respective vest price: Schedule of Exercise Price of Restricted Stock Units Vest price RSU outstanding March 31, 2024 March 31, 2023 $1.31 215,667 963,528 Total 215,667 963,528 |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 21. Subsequent events On April 5, 2024, the Company received a letter from the listing qualifications department staff of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that for the last 30 consecutive business days, the Company did not maintain a minimum closing bid price of $ 1.00 If the Company’s Class A 1.00 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | i. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”). The accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly the consolidated financial condition, results of operations, statements of shareholders’ equity, and cash flows of the Company for the interim periods presented. Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the current year ending December 31, 2024. The financial data presented herein should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the years ended December 31, 2023, included in the Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). The company has made certain immaterial reclassifications to the statements of operations for the three months ended March 31, 2023, to conform to the presentation for the three months ended March 31, 2024. These reclassifications, totaling $ 190,943 The condensed consolidated financial statements include the accounts of SHF Holdings, Inc., its subsidiaries where we have controlling financial interests. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC and the instructions to Form 10-Q. |
Use of Estimates | ii. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed 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 credit losses, indemnification liabilities, useful lives of intangibles and the fair value of financial instruments. Actual results could differ from the estimates. |
Liquidity and Going Concern | iii. Liquidity and Going Concern As of March 31, 2024, the Company had $ 5,626,362 318,825 4,888,769 135,355 70,386,394 71,569,821 324,941 For the period ending March 31, 2024, the Company reported positive operating income and net working capital. However, considering the historical data, where the Company experienced negative operating income and negative net working capital, management acknowledges the need to closely evaluate the financial performance in upcoming quarters to mitigate any going concern risks. As of March 31, 2024, due to these historical trends, there is substantial doubt about the Company’s ability to continue as a going concern for at least twelve months from the date these condensed unaudited consolidated financial statements were issued. 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 condensed unaudited 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 substantially in accounts at Partner Colorado Credit Union (“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, majority all of the Company’s revenue is generated by deposits and loans hosted by its PCCU pursuant to various services agreements. The Company had only one loan on its balance sheet as of March 31, 2024, which comprises 100 10 |
Accounts Receivable | vi. Accounts Receivable Accounts receivable are recorded based on account fee schedules. While fees are generated from accounts for individual cannabis-related businesses (“CRB”) related accounts, amounts are initially collected by the financial institutional partners and remitted in the subsequent month. Accounts receivable - related party represents amounts due from PCCU under related party contracts disclosed in Note 8 to the unaudited condensed consolidated financial statements. |
Loans Receivable | vii. Loans Receivable CRB loans that significantly support the Company’s operations are recognized as assets on the balance sheet. These loans, intended to be held either for the foreseeable future or until their maturity or full repayment, are recorded at their outstanding principal balance. This amount is adjusted for any credit loss allowances and net of any deferred loan origination fees and costs, as applicable, to reflect the net investment in these loans. The Company recognizes interest income on CRB Loans over the loan term using the simple-interest method based on outstanding principal amounts. This approach ensures a systematic recognition of income, aligning with the time value of money principle. Interest income recognition is suspended when there is uncertainty regarding full loan repayment, such as in cases of loan impairment or when payments are overdue by ninety days or more. Loans under these conditions are placed on nonaccrual status. Any accrued interest not received by the time a loan is placed on nonaccrual is reversed from interest income. Subsequent interest payments on nonaccrual loans are recorded using either the cash basis or the cost recovery method until the loan meets the criteria for reclassification to accrual status. Loans are returned to accrual status when they become current (less than ninety days past due) and when there is reasonable assurance of future payment compliance, evidenced by the full satisfaction of both principal and interest payments due. Loans are assessed individually for potential charge-off, which typically occurs at the point of foreclosure. Charge offs are executed to reflect the realizable value of loans that are deemed uncollectible. The determination of a loan’s past-due status is based on its contractual repayment terms. Loans are either placed on nonaccrual status or charged-off ahead of their contractual delinquency dates if the collection of principal and interest is deemed doubtful, ceasing the recognition of interest income on such loans. |
Allowance for Credit Losses (ACL) | viii. Allowance for Credit Losses (ACL) The Company has adopted Accounting Standards Codification Topic 326 - Financial Instruments - Credit Losses (ASC Topic 326), for estimation of probable credit losses with an expected credit loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The ACL is a valuation account that is deducted from the amortized cost basis of financial assets carried at their amortized cost, including loans held for investment, to present the net amount that is expected to be collected throughout the life of the financial asset. The estimated ACL is recorded through a provision for credit losses charged against operations. Management periodically evaluates the adequacy of the ACL to maintain it at a level it believes to be reasonable. The Company uses the same methods used to determine the ACL to assess any reserves needed for off-balance sheet credit risks such as unfunded loan commitments including Indemnified loans to PCCU. These reserves for off-balance sheet credit risks are presented in the liabilities section in the unaudited condensed consolidated balance sheets as an “Indemnity liability.” The ACL consists of two components: an asset-specific component for estimating credit losses for individual loans that do not share similar risk characteristics with other loans; and a pooled component for estimating credit losses for pools of loans that share similar risk characteristics. The ACL for the pooled component is derived from an estimate of expected credit losses primarily using an expected loss methodology that incorporates risk parameters such as probability of default (“PD”) and loss given default (“LGD”) which are derived from various vendor models and/or internally developed model estimation approaches for smaller homogenous loans. The PD is quantified by analyzing historical data to determine the rate at which loans have defaulted within the portfolio, relative to the total outstanding loans as of the end of the reporting period. This rate is expressed as a percentage and serves as a key indicator of the likelihood of default across the loan pool. LGD assessments are conducted to estimate the potential loss amount in the event of a default, considering the recoverable value from the collateral liquidation against the remaining loan balance. This involves a detailed analysis of two primary components: the loss on principal, which arises from the gap between the collateral’s liquidation value and the unpaid principal balance of the loan; and the loss associated with various ancillary costs to recover, including, but not limited to, foregone interest, transaction costs, legal and administrative fees, and expenses related to the maintenance and renovation of the property. The Company considers relevant current conditions and reasonable and supportable forecasts that relate to its lending practices and environment and the specific borrower and determines that the significant factor affecting the loan’s performance is the fact that these borrowers are involved in the cannabis business. Despite being legal at the state level in certain jurisdictions, cannabis remains federally illegal in the United States as of the date of this filing. As cannabis related lending is a new practice in the United States, there is very little historical or industry data on which to base a loss forecast. Therefore, significant judgement is required in creating a reasonable loss estimate, using similar non-MRB loans as a baseline and adjusting for the inherent risks in the cannabis industry. While the Company considers other qualitative factors, including national macroeconomic conditions, in its overall risk analysis, it has determined that they are not significant inputs to the overall loss estimate calculations. The ACL estimation process also applies an economic forecast scenario, or a composite of scenarios based on management’s judgment and expectations around the current and future macroeconomic outlook. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term of a loan excludes expected extensions, renewals, and modification under certain conditions. Recoveries on loans represent collections received on amounts that were previously charged off against the ACL. Recoveries are credited to the ACL when received, to the extent of the amount previously charged off against the ACL on the related loan. Any amounts collected in excess of this limit are first recognized as interest income, then as a reduction of collection costs, and then as other income. |
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 the company 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 presented net of loans receivable asset for portfolio loans, or as a separate liability for indemnified loans, and recognized as interest income utilizing the interest method. |
Indemnity Liability | x. Indemnity Liability Under the Loan Servicing Agreement and Commercial Alliance Agreement with PCCU, the Company had agreed to indemnify PCCU from all claims related to Company’s cannabis-related business, including but not limited to default-related credit losses as defined in the Loan Servicing Agreement. The indemnification component of the Loan Servicing Agreement and the Commercial Alliance Agreement (refer to Note 8 to the unaudited condensed consolidated financial statements) is accounted for in accordance with accounting standards codification (“ ASC”) 460 Guarantees In addition to default-related credit losses, the Company 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 3 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. The Company 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 Liabilities | xii. Right of Use Assets and Lease Liabilities 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 analyzed 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 finite-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. |
Goodwill and Other Intangible Assets | xiii. 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 tested for impairment at least annually on the elected impairment test date of December 31 unless any events or circumstances indicate it is more likely than not that the fair value of the goodwill is less than its carrying value. 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 | xiv. 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 have been listed on the Nasdaq 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 | xv. 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 | xvi. 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. Majority of the revenue consists 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. Under the terms of the Loan Servicing Agreement and the Commercial Alliance Agreement, the Company is responsible for covering account hosting costs associated with the fees generated from deposits held at PCCU. These costs are classified as “General and Administrative Expenses” in the Consolidated Statements of Operations. 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. SHF recognizes revenue from interest on loans and investment income distributed by PCCU, which is determined by particular customer account balances. As per the Loan Servicing Agreement and the Commercial Alliance Agreement, SHF bears the expenses for hosting investments and servicing loans related to this interest and investment income. These expenses are allocated to “General and Administrative Expenses” in the Consolidated Statements of Operations. 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 of America. |
Contract Liabilities | xvii. Contract Liabilities The Company recognizes a contract liability if the customer’s payment of consideration precedes the reporting entity’s performance. As of March 31, 2024, the Company recorded contract liabilities amounting to $ 2,692 21,922 |
Warrants Liabilities | xviii. Warrants Liabilities The Company has evaluated each of the warrant arrangements separately in accordance with “Distinguishing Liabilities from Equity” (“ASC 480”) and “Derivatives and Hedging” (“ASC 815”), to determine classification as either equity instruments or liabilities based on the specific terms and features of each warrant. Warrants are recognized as equity if they are indexed to our own stock and meet the equity classification criteria in ASC 815-40. These warrants are recorded within stockholders’ equity at their issuance date and are not subsequently remeasured at fair value. Conversely, warrants that do not meet the criteria for equity classification under ASC 815-40 are classified as liabilities. Such warrants are initially recorded at fair value on the issuance date and are subject to remeasurement at each balance sheet date thereafter. Any changes in fair value are recognized in the statement of operations. None of our warrant contracts met criteria to be considered indexed to their own stock, and as a result, have each been accounted for as a liability financial instrument. The fair value of warrants classified as liabilities is determined using appropriate valuation models, such as the Black- Scholes model, which incorporates various inputs, including the current stock price, expected volatility, risk-free interest rate, and the expected term of the warrants. |
Deferred consideration | xix. Deferred consideration In line with ASC Topic 815, the Company treats the deferred consideration from the Abaca acquisition as a derivative liability, since it does not fulfill the equity classification criteria. As a result, this obligation is recognized as a liability on the balance sheet at fair value and is adjusted to reflect its fair value at the end of each reporting period. The liability will be reassessed at fair value on every balance sheet date until the obligation’s term concludes. Fluctuations in its fair value are recorded in the consolidated statements of operations. |
Forward purchase derivative | xx. 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 derivatives as an assets or liabilities carried at their fair value and adjusts the forward purchase derivatives 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 unaudited condensed consolidated statement of operations. In December 2023, the company calculated its valuation using a Monte Carlo Simulation set within a risk-neutral environment. Initiated in December 2022, this strategy was applied to assess the fair value of the forward purchase agreement (FPA) derivatives, with an underlying assumption that future stock prices would adhere to a Geometric Brownian Motion trajectory. Throughout the first quarter of 2024, there were no transactions by FPA holders, and no considerable shifts in risk factors that could influence the valuation of FPA derivatives were observed. |
Earnings Per Share | xxi. 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. 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 | xxii. 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. 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. 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 unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2024 and December 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. |
Recently Issued Accounting Standards | xxiii. 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 Current Expected 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 deficit. The Company has adopted ASU 2016-13 as of January 1, 2023, utilizing the modified retrospective method. CECL Transition Impact: The table below provides details on the transition impacts of adopting CECL. Other balance sheet lines not presented were not affected by CECL. CECL Transition Impact: Schedule of Current Expected Credit Losses Transition Impact Assets December 31, Transition January 1, Loans receivable, gross $ 1,432,560 $ - $ 1,432,560 Less: Allowance for credit loss (21,488 ) (14,980 ) (36,468 ) $ 14,11,072 $ (14,980 ) $ 1,396,092 Liabilities & Equity December 31, Transition January 1, Indemnity liability $ 499,465 $ 566,341 $ 1,065,806 Retained deficit (39,695,281 ) (581,321 ) (40,276,602 ) $ (39,195,816 ) $ (14,980 ) $ (39,210,796 ) 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 adopted this standard as of January 1, 2023 and the ASU has not had a material impact on the Company’s unaudited condensed consolidated 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 has adopted this standard as of January 1, 2024 and the ASU has not had a material impact on the Company’s unaudited condensed 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.This ASU has not had a material impact on the Company’s unaudited condensed consolidated financial statements. Investments-Equity Method and Joint Ventures In March 2023, the FASB issued ASU 2023-02, Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures using the Proportional Amortization Method. The FASB issued final guidance allowing entities to apply the proportional amortization method to equity investments in all tax credit programs that meet the conditions in ASC 323-740, rather than just investments in qualified affordable projects that generate low income housing tax credits, as was required under the legacy guidance. The guidance is effective for public business entities for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years. This ASU has not had a material impact on the Company’s unaudited condensed consolidated financial statements. Standards Pending to be Adopted Business Combinations-Joint Venture Formations In August 2023, the FASB issued 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60); Recognition and Initial Measurement. This ASU contains guidance requiring certain joint ventures to apply a new basis of accounting upon formation by recognizing and initially measuring most of their assets and liabilities at fair value. This guidance is effective for all joint venture formations with a formation date on or after January 1, 2025. Early adoption is permitted. Joint Ventures formed before the effective date have the option to apply it retrospectively, while those formed after the effective date are required to apply it prospectively. The Company does not expect this ASU to have a material impact on its unaudited condensed consolidated financial statements. Disclosure Improvements, “Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, “Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB codification. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. For all other entities, the amendments will be effective two years later. The amendments in this Update should be applied prospectively. For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company does not expect this ASU to have a material impact on its unaudited condensed consolidated financial statements. Segment Reporting In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280). This ASU requires public entities to provide disclosures of significant segment expenses and other segment items. It also requires public entities to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reportable segment will have to provide all the disclosures required by ASC 280, including the significant segment expense disclosures. This guidance is applied retrospectively to all periods presented, unless it is impractical. This ASU applies to all public entities and is effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption is permitted. The Company does not expect this ASU to have a material impact on its unaudited condensed consolidated financial statements. Income Taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740). This ASU requires public business entities to disclose in their rate reconciliation table additional categories of information about income taxes paid, including certain disclosures that would be disaggregated by jurisdiction and other categories. This ASU is effective for fiscal years after December 15, 2024. Early adoption would be permitted. The Company does not expect this ASU to have a material impact on its condensed unaudited consolidated financial statements. ASU 2024-01: Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards ASU 2024-01 clarifies the scope applications of profits interest awards by adding illustrative guidance to ASC 718 “Compensation-Stock Compensation.” The amendments in the ASU apply to all reporting entities that account for profits interest awards as compensation to employees or non-employees in return for goods or services. The term “profits interest” is not explicitly defined in US GAAP. Rather, an IRS Revenue Procedure (Rev Proc 93-27) defines a “Profits Interest” as a “partnership interest other than a capital interest.” Unlike a capital interest, which provides rights to existing net assets of an entity, a profits interest only provides rights to future profits and/or equity appreciation of an entity. This distinction, along with other terms, conditions and characteristics of profits interests often complicates accounting decisions for profits interests, leading to diversity in practice whether to account for profits interests under ASC 718 or other US GAAP. The ASU introduces four (4) illustrative examples of fact patterns that demonstrate how an entity would apply the scope guidance in paragraph 718-10-15-3 to a profits interest or similar award with certain features. The ASUs are effective for public entities for fiscal years beginning after December 15, 2024, including interim periods within those years. For all other entities, adoption is required for fiscal years beginning after December 15, 2025. Early adoption is permitted. The Company does not expect this ASU to have a material impact on its unaudited condensed consolidated financial statements. ASU 2024-02: Codification Improvements—Amendments to Remove References to the Concepts Statements The ASU contains amendments to the Codification that remove references to various FASB Concepts Statements. The Board has a standing project on its agenda to address suggestions received from stakeholders on the Accounting Standards Codification and other incremental improvements to GAAP. This effort facilitates Codification updates for technical corrections such as conforming amendments, clarifications to guidance, simplifications to wording or the structure of guidance and other minor improvements. In the Board’s view, removing all references to Concept Statements in the guidance will simplify the codification and draw a distinction between authoritative and non-authoritative literature. The amendments in the Update are effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. The Company does not expect this ASU to have a material impact on its unaudited condensed consolidated financial statements. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Current Expected Credit Losses Transition Impact | Schedule of Current Expected Credit Losses Transition Impact Assets December 31, Transition January 1, Loans receivable, gross $ 1,432,560 $ - $ 1,432,560 Less: Allowance for credit loss (21,488 ) (14,980 ) (36,468 ) $ 14,11,072 $ (14,980 ) $ 1,396,092 Liabilities & Equity December 31, Transition January 1, Indemnity liability $ 499,465 $ 566,341 $ 1,065,806 Retained deficit (39,695,281 ) (581,321 ) (40,276,602 ) $ (39,195,816 ) $ (14,980 ) $ (39,210,796 ) |
Deferred Consideration (Tables)
Deferred Consideration (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Consideration | |
Schedule of Change in Deferred Consideration | The change in the amount of deferred consideration from January 1, 2023, to March 31, 2024, is as follows: Schedule of Change in Deferred Consideration Stock Cash Third Anniversary January 1, 2023 $ 11,456,639 $ 5,650,775 $ - Less: Working capital adjustment (108,691 ) - - Less: Issuance of shares and payment to shareholders (4,085,075 ) (3,000,000 ) - Less: Issuance of Abaca warrants (1,643,699 ) - - Less: Issuance of third anniversary payment consideration (430,000 ) - 430,000 Less: Gain recognized in the consolidated statements of operations (5,645,107 ) - - Add: Fair value adjustment 455,933 239,017 380,000 December 31, 2023 - 2,889,792 810,000 Add: Fair value adjustment - 31,465 (216,000 ) March 31, 2024 $ - $ 2,921,257 $ 594,000 |
Goodwill and Finite-lived Int_2
Goodwill and Finite-lived Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite Lived Intangible Assets | Following is a summary of the Company’s finite-lived intangible assets as of March 31, 2024 and December 31, 2023: Schedule of Finite Lived Intangible Assets Remaining December 31, 2023 Acquired in Amortization Impairment March 31, 2024 Market related intangible assets 6.62 $ 65,216 $ - $ 2,540 $ - $ 62,676 Customer relationships 8.62 56,775 - 1,687 - 55,088 Developed technology 5.62 3,599,754 - 152,628 - 3,447,126 Total intangible assets $ 3,721,745 $ - $ 156,855 $ - $ 3,564,890 Remaining December 31, 2022 Acquired in Amortization Impairment December 31, 2023 Market related intangible assets 6.87 $ 2,066,918 $ - $ 136,034 1,865,668 $ 65,216 Customer relationships 8.87 1,974,795 - 103,225 1,814,795 56,775 Developed technology 5.87 6,579,374 - 960,619 2,019,001 3,599,754 Total intangible assets $ 10,621,087 $ - $ 1,199,878 5,699,464 $ 3,721,745 |
Loans Receivable (Tables)
Loans Receivable (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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 March 31, 2024 December 31, 2023 Commercial real estate loans receivable, gross $ 401,564 $ 404,577 Allowance for credit losses (9,081 ) (10,723 ) Commercial real estate loans receivable, net 392,483 393,854 Current portion (12,620 ) (12,391 ) Noncurrent portion $ 379,863 $ 381,463 |
Schedule of Allowance For Loan Losses | The allowance for credit losses consists of the following activity for the three months ended March 31, 2024 and three months ended March 31, 2023: Schedule of Allowance For Loan Losses March 31, 2024 March 31, 2023 Allowance for credit losses Beginning balance $ 10,723 $ 21,488 Cumulative effect from adoption of CECL - 14,980 Charge-offs - - Recoveries - (15,390 ) Benefit (1,642 ) - Ending balance $ 9,081 $ 21,078 Loans receivable: Individually evaluated for an allowance for credit loss $ - $ - Collectively evaluated for an allowance for credit loss 401,564 413,292 $ 401,564 $ 413,292 Allowance for credit losses: Individually evaluated for an allowance for credit loss $ - $ - Collectively evaluated for an allowance for credit loss 9,081 21,078 $ 9,081 $ 21,078 |
Schedule of Risk Rating | The carrying value, excluding the CECL Reserve, of the Company’s loans held at carrying value within each risk rating is as follows: Schedule of Risk Rating Risk rating March 31, 2024 December 31, 2023 4 $ 401,564 $ 404,577 Grand total $ 401,564 $ 404,577 |
Indemnification Liability (Tabl
Indemnification Liability (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Indemnification Liability | |
Schedule of Outstanding Amounts | Schedule of Outstanding Amounts March 31, 2024 December 31, 2023 Secured term loans $ 57,737,288 $ 55,215,013 Unsecured loans and lines of credit 431,640 431,640 Total loans funded by PCCU $ 58,168,928 $ 55,646,653 |
Schedule of Indemnity Liability | The indemnity liability activity are as follows: Schedule of Indemnity Liability Three Months ended Three Months ended Beginning balance $ 1,382,408 $ 499,465 Cumulative effect from adoption of CECL - 566,341 Charge-offs - - Recoveries - - (Benefit)/ Provision (67,145 ) 82,026 Ending balance $ 1,315,263 $ 1,147,832 |
Schedule of Indemnified Loans Risk Rating | The carrying value, excluding the CECL Reserve, of the Company’s indemnified loans held at carrying value within each risk rating is as follows: Schedule of Indemnified Loans Risk Rating Risk rating March 31, 2024 December 31, 2023 3 $ 9,988,588 $ 10,100,000 4 3,425,158 3,431,640 5 30,553,007 28,115,013 6 10,900,000 10,900,000 7 - 3,100,000 8 3,302,175 - Grand total $ 58,168,928 $ 55,646,653 |
Schedule of Provision for Loan Losses | The provision for credit losses on the statement of operations consists of the following activity for the period ended March 31, 2024 and March 31, 2023: Schedule of Provision for Loan Losses Commercial Indemnity Total Commercial Indemnity Total March 31, 2024 March 31, 2023 Commercial Indemnity Total Commercial Indemnity Total Provision (benefit) $ (1,642 ) (67,145 ) (68,787 ) $ (15,390 ) 82,056 66,666 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: Schedule of Property and Equipment March 31, 2024 December 31, 2023 Equipment $ 45,397 $ 45,397 Software 51,692 51,692 Improvement 71,635 71,635 Office furniture 215,504 215,504 Property and equipment, gross 384,228 384,228 Less: accumulated depreciation (338,862 ) (300,008 ) Property and equipment, net $ 45,366 $ 84,220 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Schedule of Revenue from Operations | The revenue from the PCCU Agreements recognized in the statements of operations consists of the following for the three months ended March 31, 2024, and March 31, 2023: Schedule of Revenue from Operations Three months ended Three months ended Account servicing agreement $ - $ 3,261,284 Commercial alliance agreement 3,585,856 - Total $ 3,585,856 $ 3,261,284 Revenue $ 3,585,856 $ 3,261,284 |
Schedule of Operating Expense from Operations | The operating expense from the PCCU Agreements recognized in the statements of operations consists of the following for the three months ended March 31, 2024, and March 31, 2023: Schedule of Operating Expense from Operations Three months ended Three months ended Support services agreement $ - $ 378,730 Loan servicing agreement - 11,929 Commercial alliance agreement 300,261 - Total $ 300,261 $ 390,659 Operating expense $ 300,261 $ 390,659 |
Schedule of Outstanding Balances from Balance Sheet | The outstanding balances associated with the PCCU disclosed in the balance sheet are as follows: Schedule of Outstanding Balances from Balance Sheet March 31, 2024 December 31, 2023 Accounts receivable $ 1,111,390 $ 2,095,320 Accounts payable 125,693 577,315 Senior Secured Promissory Note (Refer to Note 9 to the unaudited condensed consolidated financial statements) 13,270,622 14,011,166 |
Loan Servicing Agreement [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Schedule of Demonstrated Deposit Capacity | The below schedule demonstrates the ratio of CRB related loans funded by PCCU to the relative lending limits: Schedule of Demonstrated Deposit Capacity March 31, 2024 December 31, 2023 CRB related deposits $ 106,692,488 $ 129,350,998 Capacity at 60% 64,015,493 77,610,599 PCCU net worth 83,739,916 81,087,746 Capacity at 1.3125 109,908,640 106,670,306 Limiting capacity 64,015,493 77,610,599 PCCU loans funded 57,737,287 55,660,039 Amounts available under lines of credit 775,000 525,000 Incremental capacity $ 5,503,206 $ 21,425,560 |
Senior Secured Promissory Note
Senior Secured Promissory Note (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Senior Secured Promissory Note | Schedule of Senior Secured Promissory Note March 31, 2024 December 31, 2023 Senior Secured Promissory Note (Current) $ 3,028,738 $ 3,006,991 Senior Secured Promissory Note (long term) 10,241,884 11,004,175 Total $ 13,270,622 $ 14,011,166 |
Schedule of Outstanding Amount on Debt | The repayment schedule of the outstanding principal amount on March 31, 2024, is as follows: Schedule of Outstanding Amount on Debt Year of payment 2024 $ 2,266,449 2025 3,138,931 2026 3,274,966 2027 3,416,896 2028 1,173,380 Grand total $ 13,270,622 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases | |
Schedule of Lease Cost | Schedule of Lease Cost Three months ended Three months ended Operating lease cost $ - $ - Short-term lease cost 69,437 87,742 Total Lease Cost $ 69,437 $ 87,742 |
Schedule of Right Of Use Assets | Schedule of Right Of Use Assets March 31, 2024 December 31, 2023 ROU assets that are related to lease properties are presented as follows: Beginning balance $ 859,861 $ 1,016,198 Additions to right-of-use assets - - Amortization charge for the period (39,084 ) (156,337 ) Lease modifications - - Ending balance $ 820,777 $ 859,861 Further information related to leases is as follows: Weighted-average remaining lease term 3.17 3.42 Weighted-average discount rate 6.87 % 6.87 % |
Schedule of Future Minimum Lease Payments | Future minimum lease payments as of March 31, 2024, and December 31, 2023, are as follows: Schedule of Future Minimum Lease Payments Year 2024 $ 151,111 $ 197,520 2025 217,925 217,925 2026 222,275 222,275 2027 226,705 226,705 2028 231,216 231,216 Thereafter 117,710 117,710 Total future minimum lease payments $ 1,166,942 $ 1,213,351 Less: Imputed interest 188,481 205,358 Operating lease liabilities 978,461 1,007,993 Less: Current portion 142,863 132,546 Non-current portion of lease liabilities $ 835,598 $ 875,447 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | Revenue by type are as follows: Schedule of Disaggregated Revenue 2024 2023 Three months ended 2024 2023 Deposit, activity, onboarding income $ 1,620,994 $ 2,245,831 Safe Harbor Program income 19,230 51,103 Investment income 773,819 1,417,152 Loan interest income 1,636,756 466,293 Total Revenue $ 4,050,799 $ 4,180,379 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earning Per Shares, Basic and Diluted | Schedule of Earning Per Shares, Basic and Diluted For the three month period ended March 31 2024 2023 Net Income/ (loss) $ 2,049,676 $ (1,413,447 ) Weighted average shares outstanding – basic 55,213,609 25,670,730 Basic net income/ (loss) per share $ 0.04 $ (0.06 ) Weighted average shares outstanding – diluted 56,268,075 25,670,730 Diluted net income/ (loss) per share $ 0.04 $ (0.06 ) |
Schedule of Weighted Average Shares Outstanding - Basic And Diluted | Schedule of Weighted Average Shares Outstanding - Basic And Diluted Weighted average shares calculation - basic 2024 2023 Three months ended March 31 Weighted average shares calculation - basic 2024 2023 Company public shares 3,926,598 3,926,598 Company initial stockholders 3,403,175 3,403,175 PCCU stockholders 22,586,139 11,759,472 Shares issued for abaca acquisition 7,935,800 2,099,977 Restricted stock units issued 1,308,089 566,755 Conversion of preferred stock 16,053,808 3,914,753 Grand total 55,213,609 25,670,730 Weighted average shares outstanding - basic 55,213,609 25,670,730 Weighted average shares calculation - diluted 2024 2023 Three months ended March 31 Weighted average shares calculation - diluted 2024 2023 Shares used in computation of basic earnings per share 55,213,609 - Shares to be issued to Abaca shareholders 750,000 - Share based payments 215,666 - Conversion of preferred stock 88,800 - Grand total 56,268,075 - |
Schedule of Share-based equity awards and Warrants Excluded from Computation of Earnings | Certain share-based equity awards and warrants were excluded from the computation of dilutive earnings/ (loss) per share because inclusion of these awards would have had an anti-dilutive effect. The following table reflects the awards excluded. Schedule of Share-based equity awards and Warrants Excluded from Computation of Earnings March 31, 2024 March 31, 2023 Warrants 12,036,588 7,036,588 Share based payments 2,284,080 2,775,655 Shares to be issued to Abaca shareholders - 6,433,839 Conversion of preferred stock - 10,896,000 Grand total 14,320,668 27,142,082 |
Forward Purchase Agreement (Tab
Forward Purchase Agreement (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Forward Purchase Agreement | |
Schedule of Forward Purchase Agreement | The reconciliation statement of the Class A common stock held by the parties are as follows: Schedule of Forward Purchase Agreement As at Shares sold during As at S.no Name of the party Opening Amount Shares Amount Shares Rest price Amount 1 Vellar 971,204 $ 1,214,005 - $ - 971,204 1.25 $ 1,214,005 2 Midtown East 1,517,924 1,897,405 - - 1,517,924 1.25 1,897,405 3 Verdun 1,178,249 1,472,811 - - 1,178,249 1.25 1,472,811 Grand total 3,667,377 $ 4,584,221 - $ - 3,667,377 $ 4,584,221 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
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 March 31, 2024 and December 31, 2023: Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis Total Fair Quoted Significant Total Fair Quoted Significant March 31, 2024 December 31, 2023 Total Fair Quoted Significant Total Fair Quoted Significant Description Liabilities: PIPE warrants $ 189,220 - 189,220 $ 273,124 - 273,124 Public warrants $ 430,675 430,675 - $ 481,850 481,850 - Private placement warrants $ 20,315 - 20,315 $ 25,070 - 25,070 Abaca warrant $ 2,268,432 - 2,268,432 $ 3,384,085 - 3,384,085 Forward purchase derivative liability $ 7,309,580 - 7,309,580 $ 7,309,580 - 7,309,580 Third anniversary payment consideration $ 594,000 - 594,000 $ 810,000 - 810,000 Liabilities $ 594,000 - 594,000 $ 810,000 - 810,000 |
Schedule of Carrying Amounts and Fair Values of 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 Level 1 Level 2 Level 3 As on March 31, 2024 Carrying Fair value Fair value measurement using Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 5,626,362 $ 5,626,362 $ 5,626,362 $ - $ - Forward purchase receivables 4,584,221 4,584,221 4,584,221 - - Loans 392,483 362,671 362,671 Liabilities Deferred consideration 2,921,257 2,921,257 2,921,257 - - Senior Secured Promissory note 13,270,622 12,137,875 - - 12,137,875 Indemnity liability 1,315,263 1,315,263 1,315,263 - - Public warrants 430,675 430,675 430,675 - - Private placement warrants 20,315 20,315 - - 20,315 PIPE Warrants 189,220 189,220 - - 189,220 Abaca Warrants 2,268,432 2,268,432 - - 2,268,432 Third anniversary payment consideration 594,000 594,000 - - 594,000 Forward purchase derivative 7,309,580 7,309,580 - - 7,309,580 Level 1 Level 2 Level 3 As on December 31, 2023 Carrying Fair value Fair value measurement using Level 1 Level 2 Level 3 Assets Cash and cash equivalents $ 4,888,769 $ 4,888,769 $ 4,888,769 $ - $ - Forward purchase receivables 4,584,221 4,584,221 4,584,221 - - Loans 330,579 363,561 - - 363,561 Liabilities Deferred consideration 2,889,792 2,889,792 2,889,792 - - Senior secured promissory note 14,011,166 12,750,204 - - 12,750,204 Public warrants 481,850 481,850 481,850 - - Private placement warrants 25,070 25,070 - - 25,070 PIPE warrants 273,124 273,124 - - 273,124 Abaca warrants 3,384,085 3,384,085 - - 3,384,085 Forward purchase derivative 7,309,580 7,309,580 - - 7,309,580 Third anniversary payment consideration 810,000 810,000 - - 810,000 |
Schedule of Fair Value Assets Measured on Recurring Basis | The change in the assets measured at fair value on a recurring basis for which the Company 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 Abaca Private Third Forward For the period ended March 31, 2024 PIPE Abaca Private Third Forward Balance at the beginning of the period $ 273,124 $ 3,384,085 $ 25,070 $ 810,000 $ 7,309,580 Issued to Abaca shareholders - - - - - Fair value adjustment (83,904 ) (1,115,653 ) (4,755 ) (216,000 ) - Balance at the end of the period $ 189,220 $ 2,268,432 $ 20,315 $ 594,000 $ 7,309,580 PIPE Abaca Private Third Forward For the period ended March 31, 2023 PIPE Abaca Private Third Forward Balance at the beginning of the period $ 286,300 $ - $ 19,110 $ - $ 7,309,580 Fair value adjustment (211,538 ) - (11,157 ) - - Balance at the end of the period $ 74,762 $ - $ 7,953 $ - $ 7,309,580 |
Purchase Agreement Option [Member] | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Schedule of Level 3 Fair Value Measurements Inputs | 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 on March 31, 2024 and December 31, 2023: Schedule of Level 3 Fair Value Measurements Inputs March 31, 2024 December 31, 2023 Reset Price $ 1.25 $ 1.25 Expected term (years) 1.49 1.74 Additional Maturity Consideration per share $ 2.00 $ 2.00 Volatility 46 % 46 % Risk-free rate 4.2 % 4.2 % Risk-adjusted discount rate 13.4 % 13.4 % Derivative liability, measurement input 13.4 % 13.4 % |
Warrant [Member] | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | |
Schedule of Level 3 Fair Value Measurements 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 PIPE Private Third Abaca PIPE Private Third Abaca March 31, 2024 December 31, 2023 PIPE Private Third Abaca PIPE Private Third Abaca Exercise price $ 5 11.5 - 2 $ 5 11.5 - 2 Share Price $ 0.97 0.97 0.97 0.97 $ 1.42 1.42 1.42 1.42 Expected term (years) 3.49 3.49 1.51 4.57 3.74 3.74 1.76 4.84 Volatility 76.00 % 76.00 % 76.00 % 76.00 % 62.95 % 62.95 % 62.95 % 62.95 Risk-free rate 4.26 % 4.26 % 4.26 % 4.36 % 4.25 % 4.25 % 4.25 % 4.25 Warrants and rights outstanding, measurement input 4.26 % 4.26 % 4.26 % 4.36 % 4.25 % 4.25 % 4.25 % 4.25 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [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 three months ended March 31, 2024, 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 Option and Related Information | A summary of the Company’s stock option activities and related information for the three months ended March 31, 2024 is as follows: Schedule of Stock Option and Related Information Stock Option No. of Stock Weighted- Weighted- December 31, 2023 2,286,010 $ 5.43 1.65 Granted - - - Exercised - - - Expired - - - Cancelled / Forfeited (1,930 ) 1.56 - March 31, 2024 2,284,080 $ 5.43 1.40 A summary of the Company’s stock option activities and related information for the three months ended March 31, 2023 is as follows: Stock Option No. of Stock Weighted- Weighted- December 31, 2022 2,170,000 $ 3.53 2.02 Granted 336,730 1.03 2.76 Exercised - - - Expired - - Cancelled / Forfeited (64,875 ) 3.13 - March 31, 2023 2,441,855 $ 3.20 2.39 |
Schedule of Options Outstanding | The following options were outstanding at their respective exercise price: Schedule of Options Outstanding Exercise price options outstanding March 31, 2024 March 31, 2023 $ 1.56 374,580 359,355 $ 2.58 350,000 350,000 $ 4.00 309,500 482,500 $ 6.67 1,250,000 1,250,000 Total 2,284,080 2,441,855 |
Schedule of Restricted Stock Units | A summary of the Company’s RSU activities and related information for the three months ended March 31, 2024 is as follows: Schedule of Restricted Stock Units Restricted Stock Units No. of RSU Weighted- Weighted- December 31, 2023 323,500 $ 1.31 2.00 Granted - - - Vested (107,833 ) 1.31 - Expired - - - Cancelled / Forfeited - - - March 31, 2024 215,667 $ 1.31 1.75 Restricted Stock Units No. of RSU Weighted- Weighted- December 31, 2022 - $ - - Granted 963,528 1.31 2.76 Vested - - - Expired - - - Cancelled / Forfeited - - - March 31, 2023 963,528 $ 1.31 2.76 |
Schedule of Exercise Price of Restricted Stock Units | The following RSU were outstanding at their respective vest price: Schedule of Exercise Price of Restricted Stock Units Vest price RSU outstanding March 31, 2024 March 31, 2023 $1.31 215,667 963,528 Total 215,667 963,528 |
Schedule of Current Expected Cr
Schedule of Current Expected Credit Losses Transition Impact (Details) - USD ($) | Jan. 01, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Indemnity liability | $ 1,315,263 | $ 1,382,408 | ||
Retained earning | (70,386,394) | (71,569,821) | ||
Liabilities & Equity | $ (67,702,471) | $ (67,860,909) | ||
Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Loans receivable, gross | ||||
Allowance for loan losses | (14,980) | |||
Loans receivable, net | (14,980) | |||
Indemnity liability | 566,341 | |||
Retained earning | (581,321) | |||
Liabilities & Equity | (14,980) | |||
Credit Expected Credit Losses Transition [Member] | ||||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||||
Loans receivable, gross | 1,432,560 | $ 1,432,560 | ||
Less: Allowance for credit loss | (36,468) | (21,488) | ||
Loans receivable, net | 1,396,092 | 1,411,072 | ||
Indemnity liability | 1,065,806 | 499,465 | ||
Retained earning | (40,276,602) | (39,695,281) | ||
Liabilities & Equity | $ (39,210,796) | $ (39,195,816) |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Cash | $ 5,626,362 | $ 4,888,769 | |
Working capital deficit | 318,825 | 135,355 | |
Retained deficit | 70,386,394 | 71,569,821 | |
Operating income | $ 324,941 | $ (1,621,669) | |
Percentage of total loans receivables | 100% | ||
Percentage of loans receivables | 10% | ||
Expected volatility rate | 100% | ||
Contract liabilities | $ 2,692 | $ 21,922 | |
Equipment and Furniture and Fixtures [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment useful life | 3 years | ||
Equipment and Furniture and Fixtures [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment useful life | 5 years | ||
Revision of Prior Period, Reclassification, Adjustment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Accounts receivable trade | $ 190,943 |
Schedule of Change in Deferred
Schedule of Change in Deferred Consideration (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Deferred Consideration | ||
Deferred stock consideration, Balance | $ 11,456,639 | |
Deferred cash consideration, Balance | 2,889,792 | 5,650,775 |
Deferred consideration payment, Balance | 810,000 | |
Stock consideration, Working capital adjustment | (108,691) | |
Cash consideration, Working capital adjustment | ||
Stock consideration, Issuance of shares and payment to shareholders | (4,085,075) | |
Cash consideration, Issuance of shares and payment to shareholders | (3,000,000) | |
Stock consideration, Issuance of payment consideration | (1,643,699) | |
Stock consideration, Issuance of payment consideration | (430,000) | |
Consideration payment, Issuance of payment consideration | 430,000 | |
Stock consideration, Gain recognized in the consolidated statements of operations | (5,645,107) | |
Stock consideration, Fair value adjustment | 455,933 | |
Cash consideration, Fair value adjustment | 31,465 | 239,017 |
Consideration payment, Fair value adjustment | (216,000) | 380,000 |
Deferred stock consideration, Balance | ||
Deferred cash consideration, Balance | 2,921,257 | 2,889,792 |
Deferred consideration payment, Balance | $ 594,000 | $ 810,000 |
Deferred Consideration (Details
Deferred Consideration (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Oct. 26, 2023 | Mar. 31, 2024 | |
Common Class A [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Warrant exercise price | $ 11.50 | |
Abaca Merger Closing [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payments to acquire businesses | $ 30 | |
Abaca Merger Closing [Member] | Cash [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payments to acquire businesses | $ 9 | |
Merger Agreement [Member] | Abaca [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Payments to acquire businesses | $ 1.5 | |
Number of shares issued for acquisition | 5,835,822 | |
Share issued price per share | $ 2 | |
Number of warrant issued | 5,000,000 | |
Warrant exercise price | $ 2 | |
Merger Agreement [Member] | Abaca [Member] | Common Class A [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Stock issued during period, shares, acquisitions | 2,100,000 |
Schedule of Finite Lived Intang
Schedule of Finite Lived Intangible Assets (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 156,855 | 1,199,878 | |
Intangible Assets, Net (Excluding Goodwill) | 5,699,464 | ||
Finite-lived intangible assets, net | 3,564,890 | 3,721,745 | $ 10,621,087 |
Marketing-Related Intangible Assets [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 2,540 | 136,034 | |
Intangible Assets, Net (Excluding Goodwill) | 1,865,668 | ||
Finite-lived intangible assets, net | $ 62,676 | $ 65,216 | 2,066,918 |
Remaining useful life in years | 6 years 7 months 13 days | 6 years 10 months 13 days | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 1,687 | 103,225 | |
Intangible Assets, Net (Excluding Goodwill) | 1,814,795 | ||
Finite-lived intangible assets, net | $ 55,088 | $ 56,775 | 1,974,795 |
Remaining useful life in years | 8 years 7 months 13 days | 8 years 10 months 13 days | |
Developed Technology Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-Lived Intangible Assets, Gross | |||
Finite-Lived Intangible Assets, Accumulated Amortization | 152,628 | 960,619 | |
Intangible Assets, Net (Excluding Goodwill) | 2,019,001 | ||
Finite-lived intangible assets, net | $ 3,447,126 | $ 3,599,754 | $ 6,579,374 |
Remaining useful life in years | 5 years 7 months 13 days | 5 years 10 months 13 days |
Goodwill and Finite-lived Int_3
Goodwill and Finite-lived Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Non-cash goodwill impairment charge | $ 13,210,000 | ||
Goodwill | $ 6,058,000 | 6,058,000 | |
Goodwill impairment | 13,208,276 | $ 13,208,276 | |
Impairment charge | 3,680,463 | ||
Impairment | 354,911 | $ 0 | |
Developed Technology Rights [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment charge | $ 2,019,000 |
Schedule of Commercial Real Est
Schedule of Commercial Real Estate Loans Receivable (Details) - Commercial Real Estate Loans Receivable [Member] - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Short-Term Debt [Line Items] | ||
Commercial real estate loans receivable, gross | $ 401,564 | $ 404,577 |
Allowance for credit losses | (9,081) | (10,723) |
Commercial real estate loans receivable, net | 392,483 | 393,854 |
Current portion | (12,620) | (12,391) |
Noncurrent portion | $ 379,863 | $ 381,463 |
Schedule of Allowance For Loan
Schedule of Allowance For Loan Losses (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Receivables [Abstract] | |||
Allowance for credit losses, beginning balance | $ 10,723 | $ 21,488 | |
Cumulative effect from adoption of CECL | 14,980 | ||
Charge-offs | |||
Recoveries | (15,390) | ||
Provision | (1,642) | ||
Allowance for credit losses,ending balance | 9,081 | 21,078 | |
Individually evaluated for impairment | |||
Collectively evaluated for impairment | 401,564 | 413,292 | $ 404,577 |
Loans receivable | 401,564 | 413,292 | |
Individually evaluated for impairment | |||
Collectively evaluated for impairment | 9,081 | 21,078 | |
Allowance for loan losses | $ 9,081 | $ 21,078 | $ 10,723 |
Schedule of Risk Rating (Detail
Schedule of Risk Rating (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Grand total | $ 401,564 | $ 404,577 | $ 413,292 |
Risk Rate 4 [Member] | |||
Financing Receivable, Credit Quality Indicator [Line Items] | |||
Grand total | $ 401,564 | $ 404,577 |
Schedule of Outstanding Amounts
Schedule of Outstanding Amounts (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total loans funded by PCCU | $ 58,168,928 | $ 55,646,653 |
P C C U Agreement [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Secured term loans | 57,737,288 | 55,215,013 |
Unsecured loans and lines of credit | 431,640 | 431,640 |
Total loans funded by PCCU | $ 58,168,928 | $ 55,646,653 |
Schedule of Indemnity Liability
Schedule of Indemnity Liability (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Indemnification Liability | ||
Beginning balance | $ 1,382,408 | $ 499,465 |
Cumulative effect from adoption of CECL | 566,341 | |
Charge-offs | ||
Recoveries | ||
(Benefit)/ Provision | (67,145) | 82,026 |
Ending balance | $ 1,315,263 | $ 1,147,832 |
Schedule of Indemnified Loans R
Schedule of Indemnified Loans Risk Rating (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Grand total | $ 58,168,928 | $ 55,646,653 |
Risk Rate 3 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Grand total | 9,988,588 | 10,100,000 |
Risk Rate 4 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Grand total | 3,425,158 | 3,431,640 |
Risk Rate 5 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Grand total | 30,553,007 | 28,115,013 |
Risk Rate Six [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Grand total | 10,900,000 | 10,900,000 |
Risk Rate 7 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Grand total | 3,100,000 | |
Risk Rate 8 [Member] | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Grand total | $ 3,302,175 |
Schedule of Provision for Loan
Schedule of Provision for Loan Losses (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Financing Receivable, Past Due [Line Items] | ||
Provision (benefit) | $ (68,787) | $ 66,666 |
Commercial Real Estate Portfolio Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Provision (benefit) | (1,642) | (15,390) |
Indemnity Liability Segment [Member] | ||
Financing Receivable, Past Due [Line Items] | ||
Provision (benefit) | $ (67,145) | $ 82,056 |
Indemnification Liability (Deta
Indemnification Liability (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Secured Debt [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.35% | |
Secured Debt [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate | 15.25% | |
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 | $ 525,000 | $ 996,958 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 384,228 | $ 384,228 |
Less: accumulated depreciation | (338,862) | (300,008) |
Property and equipment, net | 45,366 | 84,220 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 45,397 | 45,397 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 51,692 | 51,692 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 71,635 | 71,635 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 215,504 | $ 215,504 |
Schedule of Demonstrated Deposi
Schedule of Demonstrated Deposit Capacity (Details) - Loan Servicing Agreement [Member] - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Related Party Transaction [Line Items] | ||
Incremental capacity | $ 5,503,206 | $ 21,425,560 |
Cannabis Related Businesses Related Deposits [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 106,692,488 | 129,350,998 |
Capacity at 60% [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 64,015,493 | 77,610,599 |
Partner Colorado Credit Union [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 83,739,916 | 81,087,746 |
Capacity at 1.3125 [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 109,908,640 | 106,670,306 |
Limiting Capacity [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 64,015,493 | 77,610,599 |
Partner Colorado Credit Union Loans Funded [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | 57,737,287 | 55,660,039 |
Line of Credit [Member] | ||
Related Party Transaction [Line Items] | ||
Incremental capacity | $ 775,000 | $ 525,000 |
Schedule of Revenue from Operat
Schedule of Revenue from Operations (Details) - Related Party [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | ||
Revenue | $ 3,585,856 | $ 3,261,284 |
Account Servicing Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue | 3,261,284 | |
Commercial Alliance Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue | $ 3,585,856 |
Schedule of Operating Expense f
Schedule of Operating Expense from Operations (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | ||
Operating expense | $ 3,725,858 | $ 5,802,048 |
Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Operating expense | 300,261 | 390,659 |
Support Services Agreement [Member] | Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Operating expense | 378,730 | |
Loan Servicing Agreement [Member] | Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Operating expense | 11,929 | |
Commercial Alliance Agreement [Member] | Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Operating expense | $ 300,261 |
Schedule of Outstanding Balance
Schedule of Outstanding Balances from Balance Sheet (Details) - Related Party [Member] - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Related Party Transaction [Line Items] | ||
Accounts receivable | $ 1,111,390 | $ 2,095,320 |
Accounts payable | 125,693 | 577,315 |
Senior Secured Promissory Note (Refer to Note 9 to the unaudited condensed consolidated financial statements) | $ 13,270,622 | $ 14,011,166 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 29, 2023 | Mar. 31, 2024 | Dec. 31, 2023 | |
Debt instrument, face amount | $ 14,500,000 | ||
Debt instrument, interest rate, effective percentage | 4.25% | ||
Cash and cash equivalents | $ 5,600,000 | $ 8,600,000 | |
Deposits | $ 5,000,000 | $ 4,600,000 | |
Senior Secured Promissory Note [Member] | |||
Debt instrument term | 5 years | ||
Debt instrument, face amount | $ 14,500,000 | ||
Debt instrument, interest rate, effective percentage | 4.25% | ||
Loan Servicing Agreement [Member] | Partner Colorado Credit Union [Member] | |||
Servicing fee | 0.25% | ||
Yearly fee percentage | 0.35% | ||
Support Services Agreement [Member] | |||
Alliance agreement, description | In addition, the Commercial Alliance Agreement provides for certain fees to be paid to the Company for certain identified account related services to include: 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 for a monthly fee equal to $30.96 per account in 2022, $25.32-$27.85 per account in 2023, and $26.08-$28.69 in 2024. In addition, as it pertains to CRB deposits held at PCCU, investment and interest income earned on these deposits (excluding interest income on loans funded by PCCU) will be shared 25% to PCCU and 75% to the Company. Finally, under the Commercial Alliance Agreement, PCCU will continue to allow its ratio of CRB-related deposits to total assets to equal at least 60% unless otherwise dictated by regulatory, regulator or policy requirements. The initial term of the Commercial Alliance Agreement is for a period of two years, with a one-year automatic renewal unless a party provides one hundred twenty days’ written notice prior to the end of the term. | ||
Securities Issuance Agreement [Member] | Partner Colorado Credit Union [Member] | Common Class A [Member] | |||
Number of shares issued | 11,200,000 | ||
Ownwership percentage | 46.39% |
Schedule of Senior Secured Prom
Schedule of Senior Secured Promissory Note (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 29, 2023 |
Short-Term Debt [Line Items] | |||
Total | $ 14,500,000 | ||
Security Agreement [Member] | |||
Short-Term Debt [Line Items] | |||
Total | $ 13,270,622 | $ 14,011,166 | |
Senior Secured Promissory Note Current [Member] | Security Agreement [Member] | |||
Short-Term Debt [Line Items] | |||
Total | 3,028,738 | 3,006,991 | |
Senior Secured Promissory Note Non Current [Member] | Security Agreement [Member] | |||
Short-Term Debt [Line Items] | |||
Total | $ 10,241,884 | $ 11,004,175 |
Schedule of Outstanding Amount
Schedule of Outstanding Amount on Debt (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Short-Term Debt [Line Items] | ||
Total loans funded by PCCU | $ 58,168,928 | $ 55,646,653 |
Senior Secured Promissory Note [Member] | ||
Short-Term Debt [Line Items] | ||
2024 | 2,266,449 | |
2025 | 3,138,931 | |
2026 | 3,274,966 | |
2027 | 3,416,896 | |
2028 | 1,173,380 | |
Total loans funded by PCCU | $ 13,270,622 |
Senior Secured Promissory Not_2
Senior Secured Promissory Note (Details Narrative) - USD ($) | Nov. 05, 2023 | Mar. 29, 2023 |
Debt instrument, face amount | $ 14,500,000 | |
Debt instrument, interest rate, effective percentage | 4.25% | |
54 Equal Installments [Member] | ||
Deferred consideration payable | $ 295,487 |
Schedule of Lease Cost (Details
Schedule of Lease Cost (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases | ||
Operating lease cost | ||
Short-term lease cost | 69,437 | 87,742 |
Total Lease Cost | $ 69,437 | $ 87,742 |
Schedule of Right Of Use Assets
Schedule of Right Of Use Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Leases | ||
Beginning balance | $ 859,861 | $ 1,016,198 |
Additions to right-of-use assets | ||
Amortization charge for the period | (39,084) | (156,337) |
Lease modifications | ||
Ending balance | $ 820,777 | $ 859,861 |
Weighted-average remaining lease term | 3 years 2 months 1 day | 3 years 5 months 1 day |
Weighted-average discount rate | 6.87% | 6.87% |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Payments (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Leases | ||
2024 | $ 151,111 | $ 197,520 |
2025 | 217,925 | 217,925 |
2026 | 222,275 | 222,275 |
2027 | 226,705 | 226,705 |
2028 | 231,216 | 231,216 |
Thereafter | 117,710 | 117,710 |
Total future minimum lease payments | 1,166,942 | 1,213,351 |
Less: Imputed interest | 188,481 | 205,358 |
Operating lease liabilities | 978,461 | 1,007,993 |
Less: Current portion | 142,863 | 132,546 |
Non-current portion of lease liabilities | $ 835,598 | $ 875,447 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Operating lease right to use assets | $ 820,777 | $ 859,861 | $ 1,016,198 |
Operating lease liablities | $ 978,461 | $ 1,007,993 | |
Minimum [Member] | |||
Lease term | 1 year | ||
Maximum [Member] | |||
Lease term | 7 years |
Schedule of Disaggregated Reven
Schedule of Disaggregated Revenue (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total Revenue | $ 4,050,799 | $ 4,180,379 |
Deposit Activity Onboarding Income [Member] | ||
Total Revenue | 1,620,994 | 2,245,831 |
Safe Harbor Program Income [Member] | ||
Total Revenue | 19,230 | 51,103 |
Investment Income [Member] | ||
Total Revenue | 773,819 | 1,417,152 |
Interest Income [Member] | ||
Total Revenue | $ 1,636,756 | $ 466,293 |
Revenue (Details Narrative)
Revenue (Details Narrative) - Partner Colorado Credit Union [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Investment hosting fees remit percent | 25% | |
Proceeds from deposits | $ 1,217,675 | $ 2,245,831 |
Investment income | 731,425 | 1,417,152 |
Loan interest income | 1,636,756 | 466,293 |
Account hosting expenses | 104,259 | 55,425 |
Investment hosting fee | 160,101 | 323,305 |
Loan servicing fees | $ 35,901 | $ 11,929 |
Deferred Underwriter Fee (Detai
Deferred Underwriter Fee (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
Mar. 13, 2023 | Jan. 31, 2023 | Dec. 31, 2022 | Oct. 31, 2022 | Oct. 14, 2022 | Nov. 30, 2022 | Mar. 31, 2023 | Sep. 28, 2022 | |
Deferred underwriting cost | $ 900,500 | |||||||
Benchmark Investments LLC [Member] | ||||||||
Notes payable | $ 1,450,500 | $ 2,166,250 | ||||||
Periodic payment | $ 362,625 | $ 362,625 | $ 362,625 | $ 715,750 | $ 362,625 | |||
Repayments of debt | $ 550,000 |
Schedule of Earning Per Shares,
Schedule of Earning Per Shares, Basic and Diluted (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net Income/ (loss) | $ 2,049,676 | $ (1,413,447) |
Weighted average shares outstanding – basic | 55,213,609 | 25,670,730 |
Basic net income/ (loss) per share | $ 0.04 | $ (0.06) |
Weighted average shares outstanding – diluted | 56,268,075 | 25,670,730 |
Diluted net income/ (loss) per share | $ 0.04 | $ (0.06) |
Schedule of Weighted Average Sh
Schedule of Weighted Average Shares Outstanding - Basic And Diluted (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Company public shares | 3,926,598 | 3,926,598 |
Company initial stockholders | 3,403,175 | 3,403,175 |
PCCU stockholders | 22,586,139 | 11,759,472 |
Shares issued for abaca acquisition | 7,935,800 | 2,099,977 |
Restricted stock units issued | 1,308,089 | 566,755 |
Conversion of preferred stock | 16,053,808 | 3,914,753 |
Weighted average shares outstanding - basic | 55,213,609 | 25,670,730 |
Shares used in computation of basic earnings per share | 55,213,609 | 25,670,730 |
Shares to be issued to Abaca shareholders | 750,000 | |
Share based payments | 215,666 | |
Conversion of preferred stock | 88,800 | |
Grand total | 56,268,075 | 25,670,730 |
Schedule of Share-based equity
Schedule of Share-based equity awards and Warrants Excluded from Computation of Earnings (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Warrants | 12,036,588 | 7,036,588 |
Share based payments | 2,284,080 | 2,775,655 |
Shares to be issued to Abaca shareholders | 6,433,839 | |
Conversion of preferred stock | 10,896,000 | |
Grand total | 14,320,668 | 27,142,082 |
Schedule of Forward Purchase Ag
Schedule of Forward Purchase Agreement (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Number of shares on the date of acquisition | 3,667,377 | |
Number of shares on the date of acquisition value | $ 4,584,221 | |
Sale of stock, consideration received on transaction | ||
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 | ||
Vellar [Member] | ||
Number of shares on the date of acquisition | 971,204 | |
Number of shares on the date of acquisition value | $ 1,214,005 | |
Sale of stock, number of shares issued in transaction | ||
Sale of stock, consideration received on transaction | ||
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 acquisition | 1,517,924 | |
Number of shares on the date of acquisition value | $ 1,897,405 | |
Sale of stock, number of shares issued in transaction | ||
Sale of stock, consideration received on transaction | ||
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 acquisition | 1,178,249 | |
Number of shares on the date of acquisition value | $ 1,472,811 | |
Sale of stock, number of shares issued in transaction | ||
Sale of stock, consideration received on transaction | ||
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 | 3 Months Ended | |||
Jun. 16, 2022 | Mar. 31, 2024 | Dec. 31, 2022 | Sep. 30, 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 the Company, 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 | ||
Forward Purchase Agreement [Member] | ||||
Decrease in receivables | $ 37.9 | |||
Receivables | $ 4.6 | |||
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 Liabilities (Details Na
Warrant Liabilities (Details Narrative) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Common Class A [Member] | ||
Shares issued, price per share | $ 18 | |
Warrants execise price | $ 11.50 | |
Public Warrants [Member] | ||
Warrants outstanding | 5,750,000 | |
Warrants execise price | $ 0.01 | |
Private Placement Warrants [Member] | ||
Warrants outstanding | 264,088 | |
Public and Private Warrants [Member] | ||
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. | |
PIPE Warrants [Member] | ||
Warrants outstanding | 1,022,500 | 1,022,500 |
Warrants 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. | |
Abaca Warrants [Member] | ||
Warrants outstanding | 5,000,000 | 5,000,000 |
Warrants execise price | $ 2 | |
Abaca Warrants [Member] | Common Class A [Member] | ||
Warrants execise price | $ 2 | |
Number of warrant issued | 5,000,000 | |
Warrants term | 5 years |
Schedule of Fair Value Assets a
Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
PIPE Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 189,220 | $ 273,124 |
PIPE Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | ||
PIPE Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 189,220 | 273,124 |
Public Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 430,675 | 481,850 |
Public Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 430,675 | 481,850 |
Public Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | ||
Private Placement Warrants [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 20,315 | 25,070 |
Private Placement Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | ||
Private Placement Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 20,315 | 25,070 |
Abaca Warrant [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 2,268,432 | 3,384,085 |
Abaca Warrant [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | ||
Abaca Warrant [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 2,268,432 | 3,384,085 |
Forward Purchase Derivative Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 7,309,580 | 7,309,580 |
Forward Purchase Derivative Liability [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | ||
Forward Purchase Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 7,309,580 | 7,309,580 |
Third Anniversary Payment Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 594,000 | 810,000 |
Third Anniversary Payment Consideration [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | ||
Third Anniversary Payment Consideration [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 594,000 | $ 810,000 |
Schedule of Carrying Amounts an
Schedule of Carrying Amounts and Fair Values of Financial Instruments (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Liabilities | ||
Deferred consideration | $ 2,921,257 | $ 2,889,792 |
Indemnity liability | 1,315,263 | 1,382,408 |
Forward purchase derivative | 7,309,580 | 7,309,580 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets | ||
Cash and cash equivalents | 5,626,362 | 4,888,769 |
Forward purchase receivables | 4,584,221 | 4,584,221 |
Loans | ||
Liabilities | ||
Deferred consideration | 2,921,257 | 2,889,792 |
Senior secured promissory note | ||
Indemnity liability | 1,315,263 | |
Public warrants | 430,675 | 481,850 |
Private placement warrants | ||
PIPE warrants | ||
Abaca warrants | ||
Third anniversary payment consideration | ||
Forward purchase derivative | ||
Fair Value, Inputs, Level 2 [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Forward purchase receivables | ||
Loans | ||
Liabilities | ||
Deferred consideration | ||
Senior secured promissory note | ||
Indemnity liability | ||
Public warrants | ||
Private placement warrants | ||
PIPE warrants | ||
Abaca warrants | ||
Third anniversary payment consideration | ||
Forward purchase derivative | ||
Fair Value, Inputs, Level 3 [Member] | ||
Assets | ||
Cash and cash equivalents | ||
Forward purchase receivables | ||
Loans | 362,671 | 363,561 |
Liabilities | ||
Deferred consideration | ||
Senior secured promissory note | 12,137,875 | 12,750,204 |
Indemnity liability | ||
Public warrants | ||
Private placement warrants | 20,315 | 25,070 |
PIPE warrants | 189,220 | 273,124 |
Abaca warrants | 2,268,432 | 3,384,085 |
Third anniversary payment consideration | 594,000 | 810,000 |
Forward purchase derivative | 7,309,580 | 7,309,580 |
Reported Value Measurement [Member] | ||
Assets | ||
Cash and cash equivalents | 5,626,362 | 4,888,769 |
Forward purchase receivables | 4,584,221 | 4,584,221 |
Loans | 392,483 | 330,579 |
Liabilities | ||
Deferred consideration | 2,921,257 | 2,889,792 |
Senior secured promissory note | 13,270,622 | 14,011,166 |
Indemnity liability | 1,315,263 | |
Public warrants | 430,675 | 481,850 |
Private placement warrants | 20,315 | 25,070 |
PIPE warrants | 189,220 | 273,124 |
Abaca warrants | 2,268,432 | 3,384,085 |
Third anniversary payment consideration | 594,000 | 810,000 |
Forward purchase derivative | 7,309,580 | 7,309,580 |
Estimate of Fair Value Measurement [Member] | ||
Assets | ||
Cash and cash equivalents | 5,626,362 | 4,888,769 |
Forward purchase receivables | 4,584,221 | 4,584,221 |
Loans | 362,671 | 363,561 |
Liabilities | ||
Deferred consideration | 2,921,257 | 2,889,792 |
Senior secured promissory note | 12,137,875 | 12,750,204 |
Indemnity liability | 1,315,263 | |
Public warrants | 430,675 | 481,850 |
Private placement warrants | 20,315 | 25,070 |
PIPE warrants | 189,220 | 273,124 |
Abaca warrants | 2,268,432 | 3,384,085 |
Third anniversary payment consideration | 594,000 | 810,000 |
Forward purchase derivative | $ 7,309,580 | $ 7,309,580 |
Schedule of Fair Value Assets M
Schedule of Fair Value Assets Measured on Recurring Basis (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
PIPE Warrants [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Balance at the beginning of the period | $ 273,124 | $ 286,300 |
Issued to Abaca shareholders | ||
Fair value adjustment | (83,904) | (211,538) |
Balance at the end of the period | 189,220 | 74,762 |
Abaca Warrant [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Balance at the beginning of the period | 3,384,085 | |
Issued to Abaca shareholders | ||
Fair value adjustment | (1,115,653) | |
Balance at the end of the period | 2,268,432 | |
Private Placement Warrants [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Balance at the beginning of the period | 25,070 | 19,110 |
Issued to Abaca shareholders | ||
Fair value adjustment | (4,755) | (11,157) |
Balance at the end of the period | 20,315 | 7,953 |
Third Anniversary Payment Consideration [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Balance at the beginning of the period | 810,000 | |
Issued to Abaca shareholders | ||
Fair value adjustment | (216,000) | |
Balance at the end of the period | 594,000 | |
Forward Purchase Derivative [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Balance at the beginning of the period | 7,309,580 | 7,309,580 |
Issued to Abaca shareholders | ||
Fair value adjustment | ||
Balance at the end of the period | $ 7,309,580 | $ 7,309,580 |
Schedule of Level 3 Fair Value
Schedule of Level 3 Fair Value Measurement Inputs (Details) | Mar. 31, 2024 $ / shares | Dec. 31, 2023 $ / shares |
PIPE Warrants [Member] | Measurement Input, Exercise Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 5 | 5 |
PIPE Warrants [Member] | Measurement Input, Share Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.97 | 1.42 |
PIPE Warrants [Member] | Expected Term [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Expected term (years) | 3 years 5 months 26 days | 3 years 8 months 26 days |
PIPE Warrants [Member] | Measurement Input, Price Volatility [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 76 | 62.95 |
PIPE Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 4.26 | 4.25 |
Private Warrants [Member] | Measurement Input, Exercise Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 11.5 | 11.5 |
Private Warrants [Member] | Measurement Input, Share Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.97 | 1.42 |
Private Warrants [Member] | Expected Term [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Expected term (years) | 3 years 5 months 26 days | 3 years 8 months 26 days |
Private Warrants [Member] | Measurement Input, Price Volatility [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 76 | 62.95 |
Private Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 4.26 | 4.25 |
Third Anniversary Payment Consideration [Member] | Measurement Input, Exercise Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | ||
Third Anniversary Payment Consideration [Member] | Measurement Input, Share Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.97 | 1.42 |
Third Anniversary Payment Consideration [Member] | Expected Term [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Expected term (years) | 1 year 6 months 3 days | 1 year 9 months 3 days |
Third Anniversary Payment Consideration [Member] | Measurement Input, Price Volatility [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 76 | 62.95 |
Third Anniversary Payment Consideration [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 4.26 | 4.25 |
Abaca Warrant [Member] | Measurement Input, Exercise Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 2 | 2 |
Abaca Warrant [Member] | Measurement Input, Share Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.97 | 1.42 |
Abaca Warrant [Member] | Expected Term [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Expected term (years) | 4 years 6 months 25 days | 4 years 10 months 2 days |
Abaca Warrant [Member] | Measurement Input, Price Volatility [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 76 | 62.95 |
Abaca Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Warrants and rights outstanding, measurement input | 4.36 | 4.25 |
Schedule of Level 3 Fair Valu_2
Schedule of Level 3 Fair Value Measurements Inputs (Details) - Forward Purchase Derivative [Member] | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 $ / shares | Dec. 31, 2023 $ / shares | |
Measurement Input Reset Price [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Derivative liability, measurement input | 1.25 | 1.25 |
Measurement Input, Expected Term [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Expected term (years) | 1 year 5 months 26 days | 1 year 8 months 26 days |
Measurement Input Additional Maturity Per Share [Member] | Purchase Agreement Option [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Derivative liability, measurement input | 2 | 2 |
Measurement Input, Price Volatility [Member] | Purchase Agreement Option [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Derivative liability, measurement input | 46 | 46 |
Measurement Input, Risk Free Interest Rate [Member] | Purchase Agreement Option [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Derivative liability, measurement input | 4.2 | 4.2 |
Measurement Input, Discount Rate [Member] | Purchase Agreement Option [Member] | ||
Impairment Effects on Earnings Per Share [Line Items] | ||
Derivative liability, measurement input | 13.4 | 13.4 |
Tax (Details Narrative)
Tax (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit | $ 438,885 | $ 609,277 | |
Effective income tax rate reconciliation other adjustments | 28.14% | ||
Effective income tax rate, federal | 21% | ||
Deferred tax assets liabilities net | $ 44,278,374 | $ 43,829,019 |
401(k) Plan (Details Narrative)
401(k) Plan (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Retirement Benefits [Abstract] | ||
Defined contribution plan employee percent | 100% | |
Defined contribution plan employee matching contribution | 4% | |
Defined contribution plan amount | $ 35,233 | $ 20,663 |
Schedule of Fair Value of Optio
Schedule of Fair Value of Options Granted Black-Scholes-Merton Model (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Dividend yield | 0% |
Risk-free interest rate, minimum | 3.62% |
Risk-free interest rate, maximum | 4.23% |
Expected volatility | 100% |
Minimum [Member] | |
Expected term | 6 years |
Maximum [Member] | |
Expected term | 6 years 6 months |
Schedule of Stock Option and Re
Schedule of Stock Option and Related Information (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | |
Equity [Abstract] | ||||
No. of Stock Option, Beginning Balance | 2,286,010 | 2,170,000 | 2,170,000 | |
Weighted Average Grant Date Fair Value Per Stock Option, Beginning Balance | $ 5.43 | $ 3.53 | $ 3.53 | |
Weighted-Average Remaining Contractual Life, Ending | 1 year 4 months 24 days | 2 years 4 months 20 days | 2 years 7 days | 1 year 7 months 24 days |
No. of Stock Option, Granted | 336,730 | |||
Weighted Average Grant Date Fair Value Per Stock Option, Granted | $ 1.03 | |||
No. of Stock Option, Exercised | ||||
Weighted Average Grant Date Fair Value Per Stock Option, Exercised | ||||
No. of Stock Option, Expired | ||||
Weighted Average Grant Date Fair Value Per Stock Option, Expired | ||||
No. of Stock Option, Cancelled/Forfeited | (1,930) | (64,875) | ||
Weighted Average Grant Date Fair Value Per Stock Option, Cancelled/Forfeited | $ 1.56 | $ 3.13 | ||
No. of Stock Option, Ending Balance | 2,284,080 | 2,441,855 | 2,170,000 | 2,286,010 |
Weighted Average Grant Date Fair Value Per Stock Option, Ending Balance | $ 5.43 | $ 3.20 | $ 3.53 | $ 5.43 |
Weighted-Average Remaining Contractual Life, Granted | 2 years 9 months 3 days |
Schedule of Options Outstanding
Schedule of Options Outstanding (Details) - shares | Mar. 31, 2024 | Mar. 31, 2023 |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price options | 2,284,080 | 2,441,855 |
Exercise Price One [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price options | 374,580 | 359,355 |
Exercise Price Two [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price options | 350,000 | 350,000 |
Exercise Price Three [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price options | 309,500 | 482,500 |
Exercise Price Four [Member] | ||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Exercise price options | 1,250,000 | 1,250,000 |
Schedule of Restricted Stock Un
Schedule of Restricted Stock Units (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Weighted-Average Remaining Contractual Life, Ending | 1 year 4 months 24 days | 2 years 4 months 20 days | 2 years 7 days | 1 year 7 months 24 days | |
Weighted-Average Remaining Contractual Life, Granted | 2 years 9 months 3 days | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
No. of RSU, Beginning Balance | 323,500 | ||||
Weighted Average Grant Date Fair Value Per RSU, Beginning Balance | $ 1.31 | ||||
Weighted-Average Remaining Contractual Life, Beginning | 2 years | ||||
No. of RSU, Granted | 963,528 | ||||
Weighted Average Grant Date Fair Value Per RSU, Granted | $ 1.31 | ||||
No. of RSU, Vested | (107,833) | ||||
Weighted Average Grant Date Fair Value Per RSU, Vested | $ 1.31 | ||||
No. of RSU, Expired | |||||
Weighted Average Grant Date Fair Value Per RSU, Expired | |||||
No. of RSU, Cancelled/Forfeited | |||||
Weighted Average Grant Date Fair Value Per RSU, Cancelled/Forfeited | |||||
No. of RSU, Ending Balance | 215,667 | 963,528 | 323,500 | ||
Weighted Average Grant Date Fair Value Per RSU, Ending Balance | $ 1.31 | $ 1.31 | |||
Weighted-Average Remaining Contractual Life, Ending | 1 year 9 months | 2 years 9 months 3 days | |||
Weighted-Average Remaining Contractual Life, Granted | 2 years 9 months 3 days | ||||
No. of RSU, Vested | 107,833 |
Schedule of Exercise Price of R
Schedule of Exercise Price of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] - shares | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise price options | 215,667 | 323,500 | 963,528 | |
Exercise Price One [Member] | ||||
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Exercise price options | 215,667 | 963,528 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Jan. 25, 2024 | Dec. 31, 2023 | |
Preferred stock, shares authorized | 1,250,000 | 1,250,000 | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||
Convertible preferred stock, shares issued | 111 | 1,101 | ||
Convertible preferred stock, shares outstanding | 111 | 1,101 | ||
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 | |||
Class A common stock, shares authorized | 130,000,000 | 130,000,000 | ||
Class A common stock, par value | $ 0.0001 | $ 0.0001 | ||
Class A common stock, shares issued | 55,431,001 | 54,563,372 | ||
Class A common stock, shares outstanding | 55,431,001 | 54,563,372 | ||
Common stock held for purchase | 3,667,377 | |||
Share based compensation | $ 0.6 | $ 1.6 | ||
Expected volatility | 100% | |||
Share-Based Payment Arrangement, Option [Member] | ||||
Contractual term | 10 years | |||
Forward Purchase Agreement [Member] | ||||
Common stock held for purchase | 3,667,377 | 3,667,377 | ||
Maximum [Member] | ||||
Share price | $ 2 | |||
Minimum [Member] | ||||
Share price | $ 1.25 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) | Apr. 05, 2024 $ / shares |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Share price | $ 1 |