Deferred consideration

3 Months Ended

Mar. 31, 2025

Deferred Consideration

Deferred consideration

Note 3. Deferred consideration

On November 11, 2022, the Company entered into the first Amendment to the Merger Agreement with Rockview Digital Solutions, Inc. (“Abaca”) and other parties. The Merger Agreement included a $30 million payment through a mix of cash and stock, including $9 million in cash over three instalments and 105,000 Class A Common Stock, alongside deferred stock considerations based on a 10-day volume weighted average price (“VWAP”) formula.

A Second Amendment to the Merger Agreement, dated October 26, 2023, introduced deferred stock consideration of 291,792 shares of Class A Common Stock at a recalculated value of $40.00 per share. No changes were made to the cash payments. Additionally, a third-anniversary consideration of $1.5 million was introduced, payable in cash or stock at the Company’s discretion, along with the issuance of 250,000 stock warrants at $40.00 per share.

The adjustments and changes to deferred consideration have been valued and recorded according to ASC 815 in the Company’s unaudited condensed consolidated financial statements.

The change in the amount of deferred consideration from January 1, 2024, to March 31, 2025, is as follows:

	Cash Consideration		Third Anniversary Consideration Payment
January 1, 2024	$	2,889,792	$	810,000
Add: Fair value adjustment		126,551		(488,000	)
December 31, 2024	$	3,016,343	$	322,000
Add: Fair value adjustment		-		(161,000	)
March 31, 2025	$	3,016,343	$	161,000

On October 17, 2024, the Company caused a Complaint to be filed in the District Court for the City and County of Denver, Colorado, captioned SHF Holdings, Inc. v. Daniel Roda, Gregory W. Ellis, and James R. Carroll, Case No. 2024CV33187 (Denver County District Court). On November 21, 2024, in connection with the Company’s request, the Company caused the $3,000,000 (the “Merger Payment”) to be deposited into the Denver County District Court’s registry so that it can be distributed in accordance with the terms of the Merger Agreement. On December 19, 2024, Daniel Roda, Gregory W. Ellis, and James R. Carroll caused an answer and counterclaim to be filed in response to the Company Complaint.

On November 20, 2024, the Company deposited $3,000,000 with the District Court of Denver, Colorado, for the court to determine the appropriate disbursement method to Abaca shareholders. This amount is recorded under “Other Current Assets” on the balance sheet.

On January 16, 2025, the Company filed a motion to dismiss all counterclaims filed against the Company.

On April 18, 2025, the District Court for the City and County of Denver, Colorado (i) dismissed Gregory W. Ellis as a counter-plaintiff and third-party plaintiff because Mr. Ellis lacked standing to bring any claim, and (ii) denied a third-party’s request to intervene in the litigation. The remainder of the case will proceed to the discovery phase of litigation.