Deferred Consideration

9 Months Ended

Sep. 30, 2025

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 annual installments and 105,000 Class A Common Stock (“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 291,791 shares of Common Stock at a recalculated value of $40.00 per share. No changes were made to the cash payments. Additionally, 250,000 stock warrants at $40.00 per share were issued, and a third-anniversary consideration payment of $1.5 million due October 5, 2025 was introduced, payable in cash or Common Stock with a floor value of $40.00 per share, at the Company’s discretion. The Company issued 37,517 unregistered shares of Common Stock in lieu of cash, computed using the floor value on October 3, 2025. On October 21, 2025, the Company filed Form S-1 to register the 37,517 shares of Common Stock issued on October 3, 2025 and the 250,000 common shares underlying the Abaca warrants to purchase Class A Common Stock with an exercise price of $40.00 per share.

The second annual payment of $3 million that was due on October 5, 2024 is being held by the registry of the Denver County District Court in accordance with a court-approved motion described further in Note 19 Commitments and Contingencies.

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 September 30, 2025.

	Cash Considerations			Third Anniversary Consideration Payment			Total
Balance, January 1, 2024	$	2,889,792		$	810,000		$	3,699,792
Fair value adjustment		126,551			(488,000	)		(361,449	)
Balance, December 31, 2024		3,016,343			322,000			3,338,343
Fair value adjustment		(16,343	)		(63,132	)		(79,475	)
Balance, September 30, 2025	$	3,000,000		$	258,868		$	3,258,868

The fair value of the third anniversary payment consideration is determined using the Monte Carlo Simulation. model.

The following table provides quantitative information regarding Level 3 fair value measurements inputs for the third anniversary payment consideration as of their measurement dates:

	September 30, 2025			December 31, 2024

Stock price	$	7.16		$	9.00
Payment date		10/15/2025			10/15/2025
Third anniversary consideration	$	1,500,000		$	1,500,000
Risk free interest rate		4.2	%		4.2	%
Market discount rate		5.8	%		5.8	%
Remaining term in years		0.05			0.75
Expected volatility		110.9	%		86.2	%

On October 3, 2025, the Company issued 37,517 shares of Class A Common Stock to settle the liability with third anniversary payment consideration.

SHF Holdings, Inc. 10-Q