SHF (US:SHFS)2023-11-15 04:30Financial Data and Key Metrics Changes - For the third quarter of 2023, Safe Harbor reported revenue of $4.3 million, up 79% from $2.4 million in the comparable prior year period [30] - Total revenue for the nine months ended September 30, 2023, was $13.1 million, an increase of 122% from $5.9 million for the prior year period [30] - Investment income increased 112% year-over-year to $1.19 million in the third quarter of 2023 [6] - Total operating expenses for the third quarter of 2023 were $3.8 million compared to $1.6 million for the comparable prior year period [19] - Net loss in the third quarter of 2023 was $748,000 compared to net income of $595,000 in the comparable prior year period [20] Business Line Data and Key Metrics Changes - Revenue for deposit activity and onboarding was $2.2 million in the third quarter, an increase of 65% versus the comparable prior year period [30] - Loan interest income grew 119% to $906,000 in the third quarter of 2023 compared to the prior year period [31] - The company issued a total of $7.2 million in credit facilities in the third quarter, bringing the loan balance over $42 million [50] Market Data and Key Metrics Changes - Balances on deposit increased 36.5% to $216.9 million in the third quarter of 2023 compared to $158.9 million in the third quarter of 2022 [6] - The average active accounts for the quarter increased 49.6% to 986 from 659 in the third quarter of 2022 [48] Company Strategy and Development Direction - Safe Harbor is focused on advancing new growth opportunities to scale its compliant cannabis finance infrastructure [1] - The company is pursuing initiatives to catalyze higher rates of growth, including discussions with financial institutions to acquire their portfolio of accounts [22] - The advancement of the SAFER Banking Act is expected to positively impact Safe Harbor by reshaping the legal and regulatory landscape surrounding cannabis [8][29] Management's Comments on Operating Environment and Future Outlook - Management believes that as the cannabis industry matures, Safe Harbor will increasingly become the go-to fintech partner for cannabis-related businesses [52] - The company expects to report full-year revenue for 2023 in the range of $16 million to $16.5 million [22] - Management is optimistic about the future, citing strong financial institutional partnerships and growth initiatives [36] Other Important Information - The company reported a net working capital deficit of $9.4 million as of September 30, 2023, which includes $14.7 million associated with deferred consideration owed to the sellers of Abaca [56] - Safe Harbor's program income for the third quarter decreased by 81% to $7,000, as the company strategically reduced the number of financial institutions permitted to license its program [54] Q&A Session All Questions and Answers Question: How much of the deposit balances is from Partner Colorado Credit Union versus other financial institutions? - Management indicated that approximately 2/3 to 3/4 of the deposit balances are from Partner Colorado [25]