What changed in this filing

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Item 3. Legal Proceedings

2026-04-15 compared with 2025-04-10 · 52 added, 37 removed, 5 unchanged (95% of the section changed)

Legal Proceedings.

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.

Holdings, Inc.

Roda, Ellis, and Carroll (Denver District Court)

October 17, 2024, the Company filed a complaint in the District Court for the City and County of Denver, Colorado, captioned SHF Holdings,

Daniel Roda, Gregory W.

1 unchanged sentence

Carroll , Case No.

2024CV33187 (Denver County District Court).

On November 21, 2024, in connection with the Company’s request, the Company caused 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.

The Merger Payment has already been accounted for in the working capital deficit disclosed in the Liquidity and Going Concern section.

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.

For additional details, p lease refer to the section

titled “Abaca legal case in Denver” in the Recent Updates above as well as the Company’s Current Reports on Form 8-K

filed with the SEC on October 18, 2024 and December 19, 2024.

the foregoing, we may, from time to time, in the ordinary course, be subject to various legal proceedings and disputes.

as part of the ordinary course of business, we may be parties to litigation involving claims relating to the ownership of funds in particular

accounts, the collection of delinquent accounts, credit relationships, challenges to security interests in collateral and foreclosure

interests, which are incidental to our regular business activities.

While the ultimate liability with respect to these other litigation

matters and claims cannot be determined at this time, we are currently not aware of any such pending or threatened legal proceedings

or claims that we believe will have or is likely to have, individually or in the aggregate, a material adverse effect on our business,

financial position, results of operations or cash flows.

Where appropriate, reserves for these various matters of litigation are established,

under FASB ASC Topic 450, Contingencies, based in part upon management’s judgment and the advice of legal counsel.

least quarterly, we assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information

For those matters where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we

record a liability in our consolidated financial statements.

These legal reserves may be increased or decreased to reflect any relevant

developments based on our quarterly reviews.

For other matters, where a loss is not probable or the amount of the loss cannot be estimated,

we have not accrued legal reserves, consistent with applicable accounting guidance.

Based on information currently available to us, advice

of counsel, and available insurance coverage, we believe that our established reserves are adequate and the liabilities arising from

the legal proceedings will not have a material adverse effect on our consolidated financial condition.

We note, however, that in light

of the inherent uncertainty in legal proceedings there can be no assurance that the ultimate resolution will not exceed established reserves.

As a result, the outcome of a particular matter or a combination of matters, if unfavorable, may be material to our financial position,

results of operations or cash flows for a particular period, depending upon the size of the loss or our income for that particular period.

The lawsuit arises from a dispute over the terms

of the Company’s October 2022 acquisition of Abaca pursuant to a merger agreement that was subsequently amended in November 2022

and in October 2023 (the “Second Amendment”).

Second Amendment restructured certain merger consideration, including introducing warrants and modifying payment timing.

The defendants

contend the Second Amendment is invalid under Delaware law and seek to have it set aside, which would reinstate the original payment

terms and potentially increase the Company’s obligations.

The Company maintains that the Second Amendment was validly executed

and is binding.

November 21, 2024, at the Company’s request, the disputed merger payment of $3.0 million was deposited into the Denver County,

Colorado District Court’s registry pending resolution of the dispute.

December 19, 2024, the defendants filed an answer and counterclaims against the Company.

On April 18, 2025, the District Court issued

an order denying the Company’s motion to dismiss most of the counterclaims, but the District Court did dismiss claims against the

Company’s Chairman, Fred Niehaus, with prejudice.

The District Court also clarified that the Delaware statutes cited by the defendants

govern pre-closing amendments and do not authorize post-merger amendments altering consideration, a finding that is consistent with the

Company’s legal position.

case is currently in active discovery.

A ruling on the summary judgement briefing is pending, and a court date is scheduled for May

Company has assessed its potential exposure under ASC 450, see Note 20 Commitments and Contingencies.

If the District Court upholds

the Second Amendment, which the Company believes was validly executed and is binding, its cash obligation is limited to the $3.0

million already deposited in the District Court’s registry, with additional exposure limited primarily to legal fees.

Company currently considers an adverse outcome reasonably possible but not probable.

Accordingly, no accrual has been recorded for

this contingency beyond the $3.0 million already reflected in the financial statements.

The estimated range of loss is $0 to $7.8 million.

For additional details regarding this matter, please refer to Note 20 to the consolidated financial statements included in this

Annual Report on Form 10-K, and to the Company’s Current Reports on Form 8-K filed with the SEC on October 18, 2024 and

December 19, 2024.

Legal Matters

addition to the foregoing, from time to time we may be party to various legal proceedings and claims arising in the ordinary course of

These may include disputes relating to the ownership of funds in particular accounts, the collection of delinquent accounts,

credit relationships, challenges to security interests in collateral, and foreclosure matters incidental to our regular business activities.

assess our legal liabilities and contingencies at least quarterly using the most recently available information, advice of legal counsel,

and applicable accounting guidance under ASC Topic 450.

Where a loss is probable and can be reasonably estimated, we record a reserve

in our consolidated financial statements.

These reserves are adjusted each quarter to reflect relevant developments.

Where a loss is

not probable or cannot be reasonably estimated, we do not accrue a reserve.

on information currently available to us and the advice of counsel, we are not aware of any pending or threatened legal proceedings or

claims, other than the matter described above, that we believe are likely to have, individually or in the aggregate, a material adverse

effect on our business, financial position, results of operations, or cash flows.

We note, however, that legal proceedings are inherently

uncertain, and the ultimate resolution of any matter could differ from our current assessments.

An unfavorable outcome in one or more

matters, depending on its magnitude, could be material to our financial results for a particular period.

Mine Safety Disclosures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings