The stock closed Friday at $2.22 and the company's market capitalization was just shy of $6 million.

The 38.8% stake held by PCCU ($623.2 million in assets, 33,318 members as of Dec. 31) would make its shares worth $2.3 million.

That’s a significant drop from its estimated $117.4 million stake at the time of the September 2022 spinoff, its $11.4 million stake in July 2023 and even its $3.2 million stake at the beginning of April.

In a bankruptcy, PCCU’s shares would be rendered worthless, but its position as a creditor might allow some recovery.

After the September 2022 spinoff, PCCU members were promised $56.9 million from Safe Harbor. In an initial concession in early 2023, Partner Colorado members exchanged that promise of cash for a $14.5 million senior secured promissory note, which was to be repaid over five years at 4.25%. As of April 1, the company owed the credit union $11 million on the note.

An agreement in March extended the due date on the principal by two years, and allowed the company to make interest-only payments for two years, which the company said freed $6 million in cash during the period.

The 10K said the company erred in initially determining its ability to continue as a going concern, a judgment “not appropriately supported under GAAP.” Instead, the 10K now includes a warning that management believes there is substantial concern over the ability of the company to continue as a going concern.

The report said management put too much weight on positive trends, such as its non-GAAP adjustments made to both working capital and earnings before interest, taxes, depreciation and amortization.

The news release and its 10K showed the company had GAAP measures of $2.3 million cash and a net working capital deficit of $983,833 on Dec. 31, 2024, down from $4.9 million cash and a net working capital deficit of $135,355 as of Dec. 31, 2023. Its operating losses were $7.1 million in 2024 and $20.7 million in 2023.

“The Company’s ability to continue as a going concern depends on its capacity to generate sufficient liquidity to meet financial obligations, including interest repayments under the senior secured note with PCCU,” the company said in its 10K.

“The reported working capital deficit and operating losses, before adjustment for non-cash activity raises substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the date these consolidated financial statements are issued,” the 10K said.

The company also warned the SEC April 1 it had found “material weaknesses in the company’s internal controls over financial reporting” that it planned to disclose in the 10K.

Management did disclose several areas of weakness in financial reporting in the 10K, but it did not disclose whether the weaknesses resulted in any incorrect results in previous reports.

The company said it found and corrected weaknesses in revenue recognition on monthly transactions between the company and the credit union, the valuation of complex financial instruments and the determination of its outlook as a going concern.

Contact Jim DuPlessis at [email protected].