PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents JFB Construction Holdings' unaudited consolidated financial statements for Q1 2025, detailing revenue growth, decreased net income, and balance sheet strengthening from IPO proceeds [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, shows total assets increased to $13.27 million, driven by a rise in cash, and shareholder's equity grew to $11.03 million from stock issuance proceeds Consolidated Balance Sheet Summary (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $11,479,824 | $7,123,579 | | **Total Assets** | **$13,268,364** | **$8,965,038** | | **Total Current Liabilities** | $2,239,662 | $2,635,279 | | **Total Shareholder's Equity** | **$11,028,702** | **$6,329,759** | | **Total Liabilities and Shareholder Equity** | **$13,268,364** | **$8,965,038** | - Cash increased significantly to **$7,721,811** as of March 31, 2025, from **$2,696,183** as of December 31, 2024[17](index=17&type=chunk) - Additional Paid-in Capital saw a substantial increase to **$5,092,647** from **$425,136**, mainly due to the issuance of common stock[17](index=17&type=chunk) [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2025, sales increased to $5.91 million, but net income decreased to $30,307 from $113,395 year-over-year, primarily due to higher general and administrative expenses Consolidated Income Statement Summary (Unaudited) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | **Sales** | **$5,913,863** | **$2,500,318** | | Gross Profit | $1,469,366 | $882,167 | | Income (loss) from Operations | ($27,187) | $41,982 | | **Net Income (Loss)** | **$30,307** | **$113,395** | | Basic and Diluted EPS | $0.00 | $0.01 | - General and administrative expenses increased significantly to **$1,285,707** for the three months ended March 31, 2025, compared to **$798,109** for the same period in 2024[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased to $392,835 in Q1 2025, but strong financing cash flow of $4.67 million from stock issuance led to a net cash increase of $5.03 million, boosting the ending cash balance to $7.72 million Consolidated Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $392,835 | $4,775,146 | | Net Cash used in Investing Activities | ($35,843) | ($223,594) | | Net Cash from Financing Activities | $4,668,636 | ($50,434) | | **Net Increase in Cash** | **$5,025,628** | **$4,501,118** | | **Cash at End of Period** | **$7,721,811** | **$5,737,862** | - The primary source of financing cash flow in Q1 2025 was **$4,667,636** in net proceeds from the issuance of common stock[24](index=24&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including revenue recognition under ASC 606, segment reporting, related party transactions, and the company's recent IPO and equity structure - The company operates in three primary business segments: Commercial Construction, Residential Construction, and Real Estate Development, with Commercial Construction accounting for **69%** of revenue and Residential Construction for **31%** in Q1 2025[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - Revenue is recognized over time using the cost-to-cost method as performance obligations are satisfied, in accordance with ASC 606[37](index=37&type=chunk)[66](index=66&type=chunk) - The company leases its corporate headquarters from Aura Commercial, LLC, an entity wholly owned by the company's CEO, Joseph F. Basile III[91](index=91&type=chunk)[93](index=93&type=chunk)[106](index=106&type=chunk) - On March 7, 2025, the company completed its IPO, issuing **1,250,000** units at **$4.125** per unit, generating net proceeds of **$4,667,636**[113](index=113&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, highlighting a 93.6% revenue increase offset by higher costs and G&A expenses, leading to a 73% net income decrease, with liquidity significantly boosted by the March 2025 IPO [Results of Operations](index=30&type=section&id=Results%20of%20Operations) In Q1 2025, revenues grew by $2.86 million (93.6%) to $5.91 million, but a sharp rise in operating expenses, particularly G&A and marketing, led to an operating loss and a 73% decline in net income to $30,307 Comparison of Operations for the Three Months Ended March 31, | Metric | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | **$5,913,863** | **$3,055,204** | **$2,858,659** | **93.6%** | | Gross profit | $1,469,366 | $882,167 | $587,199 | 66.6% | | Total operating expenses | $1,496,553 | $840,185 | $656,368 | 78.1% | | Income(loss) from operations | ($27,187) | $41,982 | ($69,169) | -164.8% | | **Net income (Loss)** | **$30,307** | **$113,395** | **($83,088)** | **-73.3%** | - The increase in G&A expenses was mainly due to enhanced talent acquisition and retention efforts and investments in administrative infrastructure to support growth[141](index=141&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity significantly improved as of March 31, 2025, with $7.7 million cash and $9.2 million working capital, primarily due to $4.67 million net proceeds from its March 2025 IPO, despite decreased cash from operations - As of March 31, 2025, the company had a positive working capital of **$9,240,162**, with current assets of **$11,479,824** and current liabilities of **$2,239,662**[153](index=153&type=chunk) - Net cash provided by financing activities was **$4,668,636** in Q1 2025, a stark contrast to the net cash used of **$(50,434)** in Q1 2024, driven by the IPO[150](index=150&type=chunk) - Net cash from operating activities decreased by **91%** to **$392,835** in Q1 2025 from **$4,775,146** in Q1 2024, mainly due to a significant decrease in contract receivables collection[148](index=148&type=chunk) [Critical Accounting Policies and Estimates](index=33&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section details critical accounting policies, including principles of consolidation, use of estimates, and revenue recognition under ASC 606, emphasizing significant judgments required for cost-to-cost revenue recognition - The company's most significant estimates include the allowance for doubtful accounts, valuation of stock-based compensation, useful lives of assets, contract liabilities and assets, and the implicit interest rate in leases[165](index=165&type=chunk) - Revenue from construction contracts is recognized over time using the cost-to-cost method, which requires significant judgment in estimating total contract costs[167](index=167&type=chunk)[170](index=170&type=chunk) - The company follows a 5-step model for revenue recognition under ASC 606, treating each construction contract as a single performance obligation[168](index=168&type=chunk)[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the quantitative and qualitative disclosures about market risk since the Annual Report on Form 10-K for the year ended December 31, 2024 - As of March 31, 2025, there were no material changes to the market risk information provided in the company's 2024 Form 10-K[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The company's chief executive officer and chief financial officer concluded that disclosure controls and procedures were not effective at a reasonable assurance level as of March 31, 2025[194](index=194&type=chunk) - There were no material changes to the company's internal control over financial reporting during the quarter ended March 31, 2025[195](index=195&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to materially affect its business, with a previous litigation matter settled on March 19, 2025 - There are no legal proceedings currently pending against the company which would have a material effect on its business[198](index=198&type=chunk) - A litigation case concerning a residential remodel was settled on March 19, 2025, with the company set to receive a settlement of **$39,138**[110](index=110&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) The company highlights risks from evolving U.S. trade policy, including potential tariffs on key construction materials like steel and aluminum, which could adversely affect gross margins and cause project delays - The company faces risks from evolving U.S. trade policy, including potential tariffs on key construction materials such as steel and aluminum[200](index=200&type=chunk) - Increases in material costs due to tariffs could negatively impact gross margins on fixed-price contracts and may require revisions to cost forecasts under ASC 606[200](index=200&type=chunk)[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is reported as not applicable for the period - Not applicable[203](index=203&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) The company reports no other material information for the quarter, confirming no material changes to procedures for security holders to recommend board nominees or adoption/termination of Rule 10b5-1 trading plans - No other material information was reported for the quarter[205](index=205&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the underwriting agreement, corporate governance documents, employment agreements, lease agreements, and CEO/CFO certifications - The report includes a comprehensive list of exhibits, such as the Form of Underwriting Agreement, Amended and Restated Articles of Incorporation, Employment Agreements, and various certifications[208](index=208&type=chunk)

Company Overview - JFB Construction Holdings is a construction company focused on commercial, retail, and residential property development [1] - The company has extensive experience in building multifamily communities, shopping centers, national franchises, and over 2 million square feet of commercial and retail space [4] Recent Developments - JFB has signed a contract to convert and remodel an existing Holiday Inn to a Courtyard by Marriott in Melbourne, Florida, valued at $6.7 million [2] - Construction is expected to commence in the third quarter of 2025 [1][2] Strategic Positioning - This project marks JFB's second collaboration with Marriott Hotels, reinforcing its position in the hospitality development sector [3] - The CEO expressed confidence that successful project completion will foster a long-term relationship with Marriott and lead to additional opportunities [3] Reputation and Client Trust - JFB's reputation is built on client trust and the value it brings to projects, with most projects obtained through referrals and repeat customers [5] - The company has provided general contracting and construction management services across 36 U.S. states [5]

Company Overview - JFB Construction Holdings is a construction company focused on commercial, retail, and residential property development [1][4] - The company has extensive experience in building multifamily communities, shopping centers, national franchises, and over 2 million square feet of commercial and retail space [4] Recent Developments - JFB Construction has signed a construction contract valued at $18 million to develop a new Courtyard by Marriott with 117 rooms in Olive Branch, Mississippi [2][3] - Construction is scheduled to commence by early June 2025 [2] Strategic Goals - The CEO of JFB Construction, Joseph F. Basile, III, stated that this project represents a major milestone for the company and aligns with its future goals [3] - The company is actively involved in the land acquisition process and holds an ownership position in the project location, indicating a commitment to hospitality development [3]

Company Overview - JFB Construction Holdings is a construction company focused on commercial, retail, and residential property development [1] - The company has a strong reputation built on client trust, with most projects obtained through referrals and repeat customers [6] - JFB has provided general contracting and construction management services in 36 U.S. states [6] Leadership Appointment - Jesus Rolon has been appointed as Chief Construction Officer, effective May 5, 2025 [1] - Rolon brings over 25 years of experience in the design and construction of various facilities, including quick serve and casual restaurants, big box retail, and health and fitness facilities [2] - Prior to joining JFB, Rolon was the director of design and construction for Planet Fitness Corporate, managing a capex budget of $44 million [3] Strategic Goals - Rolon is expected to play a key role in expanding JFB's commercial construction division [4] - The company aims to leverage Rolon's bilingual skills and extensive knowledge of the commercial construction industry to navigate corporate franchise requirements [4] Company Experience - JFB has generations of combined experience in residential and commercial construction, having built multifamily communities, shopping centers, and over 2 million square feet of commercial and retail space [5]

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) JFB Construction Holdings is a commercial and residential construction and development company expanding into high-growth states, leveraging its public status to enhance capital access and bonding capacity for larger projects [Company Overview and History](index=4&type=section&id=Company%20Overview%20and%20History) JFB Construction Holdings, a parent holding company reorganized in July 2024, provides commercial and residential construction and development services across 36 states, with real estate development focused in South Florida - JFB Construction Holdings was formed in April 2024 as a Nevada corporation to serve as the parent holding company for JFB Construction & Development Inc., a Florida corporation established in 2014[16](index=16&type=chunk)[17](index=17&type=chunk) - The commercial contracting segment has completed projects in **36 states**, delivering over **2 million square feet** of commercial space, historically focused on the Southern Atlantic region[18](index=18&type=chunk) - Real estate development and residential construction segments are currently concentrated in South Florida[19](index=19&type=chunk) [Business Segments](index=5&type=section&id=Business%20Segments) The company operates through Commercial Construction (78% of 2024 revenue), Residential Construction (22% of 2024 revenue), and a strategic Real Estate Development segment with one project underway Revenue Contribution by Segment | Segment | FY 2024 Revenue % | FY 2023 Revenue % | | :--- | :--- | :--- | | Commercial Construction | 78% | 88% | | Residential Construction | 22% | 11% | - The company has extensive experience with national franchise brands, typically under fixed-price contracts of **$1.5-2 million**[22](index=22&type=chunk) - The company is expanding its real estate development segment, acting as a general contractor on multi-family projects with future plans for direct investment or joint ventures[23](index=23&type=chunk)[36](index=36&type=chunk) - As of the report date, the company has **26 construction projects**, comprising **15 commercial** and **11 residential** projects[26](index=26&type=chunk) [Corporate Growth and Expansion](index=4&type=section&id=Corporate%20Growth%20and%20Expansion) JFB's growth strategy involves geographic expansion into high-growth states and securing larger projects, leveraging its public status for increased capital access and a target bonding capacity of $100 million - The company intends to focus its business in states with increased population and GDP growth, such as Florida, Texas, and South Carolina[20](index=20&type=chunk)[25](index=25&type=chunk) - Increased access to capital as a public entity is expected to fund new projects, strategic acquisitions, and real estate development investments[21](index=21&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - A key goal is to increase bonding capacity to **$100 million** to qualify for larger, more complex construction projects[44](index=44&type=chunk)[45](index=45&type=chunk) [Project Delivery and Operational Framework](index=10&type=section&id=Project%20Delivery%20and%20Operational%20Framework) JFB uses cost-plus contracts for residential and fixed-price for commercial projects, relying on subcontractors selected through bidding or direct negotiation, while managing risks from market volatility and inflation - The company uses cost-plus agreements for residential construction and predominantly fixed-price contracts for commercial construction, especially with franchisees[46](index=46&type=chunk) - A comprehensive bidding process is used to select subcontractors based on cost, qualifications, and past performance, though direct negotiation occurs with some clients[49](index=49&type=chunk)[53](index=53&type=chunk) - The company frequently utilizes subcontractors for flexibility and scalability but acknowledges risks associated with subcontractor non-performance[56](index=56&type=chunk) - Market challenges include inflationary pressures, rising interest rates, fluctuating material costs, and availability of skilled labor[57](index=57&type=chunk) [Item 1A. Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business risks including management inexperience, internal control deficiencies, client concentration, and industry competition, alongside securities risks such as stock price volatility and reduced governance requirements as an emerging growth and controlled company [Risks Relating to Our Business and Strategy](index=14&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Strategy) The company faces business risks including limited management experience in public operations, internal control deficiencies, high dependence on its CEO, significant client concentration, and uncertainties in expansion and real estate development - The company has a limited staff of **17 full-time employees**, and its management team lacks experience in operating a publicly traded company[60](index=60&type=chunk)[62](index=62&type=chunk) - Deficiencies in internal controls have been identified, specifically a lack of formalized policies for board and management oversight of financial reporting, risk management, and compliance[63](index=63&type=chunk)[64](index=64&type=chunk) - The business is highly dependent on a single franchise client, which accounted for **41% of total revenue in FY 2024** and **52% in FY 2023**[103](index=103&type=chunk) - The company's cash balance of **$8,199,835** held at Seacoast National Bank exceeds the FDIC insurance limit, posing a concentration risk[76](index=76&type=chunk) [Risks Relating to Our Industry](index=30&type=section&id=Risks%20Relating%20to%20Our%20Industry) The company operates in a highly competitive and seasonal construction industry, facing risks from regulatory compliance, inherent operating hazards, potential project delays, and disruptions from natural disasters or geopolitical events - The construction industry is seasonal, causing substantial fluctuations in the company's quarterly and annual results of operations[119](index=119&type=chunk) - The company is subject to numerous laws and regulations, including OSHA, which could result in fines or increased operating costs[120](index=120&type=chunk) - The industry is highly competitive, with competition from local, regional, and national entities that may have superior resources[127](index=127&type=chunk) - Failure to meet contractual schedule requirements could lead to additional costs, penalties, or liquidated damages[122](index=122&type=chunk) [Risks Relating to Our Securities](index=34&type=section&id=Risks%20Relating%20to%20Our%20Securities) Investing in the company's securities carries substantial risk due to potential stock price volatility, no planned dividends, a dual-class stock structure concentrating voting power, and reduced disclosure requirements as an emerging growth and controlled company - The company has a dual-class stock structure, which may result in a lower or more volatile market price for its Class A common stock[142](index=142&type=chunk) - The company has no current plans to pay cash dividends on its common stock in the foreseeable future[139](index=139&type=chunk) - JFB is an "emerging growth company" and a "smaller reporting company," allowing it to take advantage of reduced disclosure and reporting requirements[151](index=151&type=chunk)[154](index=154&type=chunk) - The company is a "controlled company" as its CEO, Joseph F. Basile III, holds more than **50% of the voting power**, qualifying it for exemptions from certain Nasdaq corporate governance requirements[157](index=157&type=chunk)[410](index=410&type=chunk) [Item 1B. Unresolved Staff Comments](index=46&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[171](index=171&type=chunk) [Item 1C. Cybersecurity](index=46&type=section&id=Item%201C.%20Cybersecurity) The company has implemented a cybersecurity risk management program, overseen by the Board's Audit Committee and supported by a third-party provider, with no material threats or incidents identified to date - The company has a cybersecurity risk management methodology integrated into its enterprise risk management, utilizing a third-party service provider[172](index=172&type=chunk) - The Board of Directors provides strategic oversight, with the Audit Committee overseeing the implementation of the cybersecurity program[174](index=174&type=chunk) - As of the report date, no known cybersecurity threats or incidents have materially affected the company[173](index=173&type=chunk) [Item 2. Properties](index=48&type=section&id=Item%202.%20Properties) The company leases its corporate headquarters in Lantana, FL, under a 7-year term with a monthly rent of $11,928, and holds an option to purchase the property for $4.25 million until December 31, 2025 - The company leases its headquarters in Lantana, FL under a **7-year lease** with a monthly rent of **$11,928**, increasing by **2.5% annually**[177](index=177&type=chunk) - JFB has an option to purchase the entire property for **$4,250,000**, valid until December 31, 2025[177](index=177&type=chunk) [Item 3. Legal Proceedings](index=48&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no material pending legal proceedings, but notes ongoing litigation for an unpaid residential remodel invoice and a formal claim regarding subcontractor defaulted work as of December 31, 2024 - There are no pending legal actions expected to have a material adverse effect on the company[178](index=178&type=chunk) - As of December 31, 2024, ongoing litigation exists concerning an unpaid invoice for a residential remodel, for which the company has filed a lien and is seeking foreclosure[181](index=181&type=chunk) - A formal notice of claim has been issued in connection with a subcontractor's defaulted work at a job site managed by the company[182](index=182&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not Applicable[183](index=183&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=49&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock began trading on Nasdaq under "JFB" on March 6, 2025, with approximately 330 holders, no anticipated cash dividends, and recent issuances of unregistered securities for reorganization and consulting services - The Common Stock began trading on the Nasdaq Capital Market under the symbol **JFB** on **March 06, 2025**[185](index=185&type=chunk) - The company has not declared or paid any cash dividends and does not anticipate paying any in the foreseeable future[187](index=187&type=chunk) - Unregistered shares were issued to effectuate the Reorganization in July 2024, and **360,000 Class A shares** were issued to Chartered Services for consulting[192](index=192&type=chunk)[193](index=193&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=51&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights a significant decline in 2024 revenues to **$23.1 million** and net income to **$119,005** due to market conditions, despite a **102% increase** in operating cash flow to **$3.5 million**, with critical accounting policies like ASC 606 revenue recognition detailed [Critical Accounting Policies and Estimates](index=51&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's financial statements, prepared under U.S. GAAP, rely on significant management estimates, with revenue recognition under ASC 606 using a cost-to-cost method for single performance obligations being the most critical policy - Revenue from construction contracts is recognized over time using the cost-to-cost method in accordance with **ASC 606**[207](index=207&type=chunk)[214](index=214&type=chunk) - The company treats each construction contract as a single performance obligation, as it provides a significant service of integrating complex tasks into a single project[215](index=215&type=chunk)[296](index=296&type=chunk) - Basic and Diluted EPS are calculated using the two-class method, as required for companies with multiple classes of common stock[220](index=220&type=chunk)[222](index=222&type=chunk) [Results of Operations](index=58&type=section&id=Results%20of%20Operations) For FY 2024, JFB's revenues decreased by **28.66%** to **$23.1 million**, gross profit fell by **30.7%** to **$5.0 million**, and net income plummeted by **97.13%** to **$119,005**, primarily due to increased operating expenses Consolidated Results of Operations (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $23,087,885 | $32,366,003 | (28.66%) | | Gross Profit | $5,034,561 | $7,270,961 | (30.7%) | | Income from Operations | $(33,504) | $4,021,724 | (100.8%) | | Net Income | $119,005 | $4,145,762 | (97.13%) | - The decrease in revenue was primarily driven by a decline in new contracts awarded, attributed to industry seasonality, inflation, and high interest rates on construction loans[240](index=240&type=chunk) - General and administrative expenses increased by **56.76%** to **$4.8 million**, mainly due to investments in talent acquisition, retention, and administrative infrastructure[243](index=243&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2024, the company reported **$2.7 million** in cash and **$4.5 million** in working capital, with net cash from operating activities increasing by **102%** to **$3.5 million**, deemed sufficient for current needs Summary of Cash Flows (FY 2024 vs. FY 2023) | Cash Flow Activity | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,481,851 | $1,722,022 | | Net cash used in investing activities | $(817,534) | $(375,220) | | Net cash used in financing activities | $(1,204,877) | $(142,054) | - As of December 31, 2024, the company had working capital of **$4,488,300**, with current assets of **$7,123,579** and current liabilities of **$2,635,279**[255](index=255&type=chunk) - The company reports no off-balance sheet arrangements for the fiscal years ended December 31, 2024 and 2023[257](index=257&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section summarizes significant business risks, including management's public company inexperience, internal control deficiencies, client concentration, competitive pressures, real estate development market risks, and common stock volatility - This section reiterates key risks from Item 1A, including management's inexperience with public companies, lack of formalized policies, and significant risks in entering the real estate development market[259](index=259&type=chunk) - Highlights the concentration of cash at one financial institution, with a balance of **$8,139,998** in excess of the FDIC limit as of March 28, 2025[259](index=259&type=chunk) - Re-emphasizes the dependence on a single franchise client, which represented **41% of total revenue in 2024**[260](index=260&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=65&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2024 and 2023, with an unqualified opinion from M&K CPAS, PLLC, highlighting revenue recognition on long-term contracts as a critical audit matter [Report of Independent Registered Public Accounting Firm](index=66&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) M&K CPAS, PLLC issued an unqualified opinion on the consolidated financial statements for 2024 and 2023, prepared under U.S. GAAP, identifying revenue recognition on long-term contracts as a critical audit matter - The auditor issued an unqualified opinion on the consolidated financial statements[264](index=264&type=chunk) - Revenue Recognition was identified as a Critical Audit Matter due to the significant judgment involved in estimating costs on long-term contracts[268](index=268&type=chunk)[269](index=269&type=chunk) [Consolidated Financial Statements](index=68&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show total assets decreased to **$8.97 million** in 2024, net income sharply declined to **$119,005**, and cash increased from **$1.24 million** to **$2.70 million**, primarily from operating activities Consolidated Balance Sheet Data (As of Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Current Assets | $7,123,579 | $8,859,234 | | Total Assets | $8,965,038 | $9,243,279 | | Total Current Liabilities | $2,635,279 | $2,553,167 | | Total Shareholder's Equity | $6,329,759 | $6,690,112 | Consolidated Income Statement Data (Year Ended Dec 31) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Sales | $23,087,885 | $32,366,003 | | Gross Profit | $5,034,561 | $7,270,961 | | Net Income | $119,005 | $4,145,762 | | Basic and Diluted EPS | $0.02 | $0.54 | [Notes to Consolidated Financial Statements](index=72&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail business nature, accounting policies, related party leases, S-Corporation status, significant customer concentration (41% of 2024 sales from one franchise), numerous related party transactions with the CEO, and a subsequent IPO raising **$5,156,250** gross proceeds - The company operates in three segments: Commercial Construction (**78% of 2024 revenue**), Residential Construction (**22% of 2024 revenue**), and Real Estate Development (no revenue recognized)[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) - A single franchise customer accounted for **41% of sales in 2024** and **52% in 2023**, representing a significant concentration risk[361](index=361&type=chunk) - Numerous related party transactions exist with entities owned by the CEO, Joseph F. Basile III, including loans, construction services, and property leases[363](index=363&type=chunk)[364](index=364&type=chunk)[365](index=365&type=chunk) - Subsequent to year-end, on **February 6, 2024**, the company completed its IPO, raising gross proceeds of **$5,156,250**[375](index=375&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=89&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on any matter of accounting principles, financial statement disclosure, or auditing scope or procedure - None[378](index=378&type=chunk) [Item 9A. Controls and Procedures](index=89&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were ineffective as of December 31, 2024, due to material weaknesses including lack of segregation of duties and failure to identify financial reporting errors - Management concluded that disclosure controls and procedures were not effective as of **December 31, 2024**[380](index=380&type=chunk) - Management concluded that internal control over financial reporting was not effective as of **December 31, 2024**[383](index=383&type=chunk) - Material weaknesses identified include a lack of segregation of duties and the failure of internal controls to identify multiple journal entries and errors later found by the external auditor[384](index=384&type=chunk) [Item 9B. Other Information](index=90&type=section&id=Item%209B.%20Other%20Information) No officers or directors reported the adoption, modification, or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fourth quarter of fiscal year 2024 - No officers or directors adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended **December 31, 2024**[386](index=386&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=90&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details the company's leadership, including its seven-member Board with four independent directors, executive officer biographies, established Audit, Compensation, and Nominating committees, and its status as a "controlled company" due to the CEO's majority voting power - The Board of Directors consists of **seven members**, including Joseph F. Basile III (Chairman) and Ruben Calderon[388](index=388&type=chunk) - The board has determined that **four directors** are independent under Nasdaq rules[407](index=407&type=chunk) - The company is a "controlled company" because CEO Joseph F. Basile III holds more than **50% of the voting power**[410](index=410&type=chunk) - The Board has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee, each with charters[402](index=402&type=chunk)[416](index=416&type=chunk) [Item 11. Executive Compensation](index=101&type=section&id=Item%2011.%20Executive%20Compensation) The executive compensation program includes base salary, performance bonuses, and equity incentives; in FY 2024, CEO Joseph F. Basile III received **$1,755,153** total compensation, and employment agreements were amended in February 2025 to set new base salaries and performance targets Summary Compensation Table (2024) | Name and Principal Position | Salary | Bonus | Other Compensation | Total | | :--- | :--- | :--- | :--- | :--- | | Joseph Basile, CEO | $282,307 | $600,000 | $872,846 | $1,755,153 | | Ruben Calderon, CFO | $126,395 | $20,000 | $0 | $146,395 | - Amended employment agreements effective **February 1, 2025**, set the CEO's base salary at **$300,000** and the CFO's at **$130,000**, with performance bonuses tied to gross revenue[444](index=444&type=chunk)[446](index=446&type=chunk) - The company implemented a new Equity Incentive Plan on **July 18, 2024**, reserving **two million shares** of Class A Common Stock for awards[449](index=449&type=chunk)[450](index=450&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=106&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details beneficial ownership, showing CEO Joseph F. Basile III holds **71.68% of total voting power** through Class B and Class A shares, while The Basile Family Irrevocable Trust holds **81.25% of Class A shares**, indicating significant family control Beneficial Ownership and Voting Power | Name | Class A Shares (%) | Class B Shares (%) | Total Voting Power (%) | | :--- | :--- | :--- | :--- | | Joseph F. Basile III | 365,000 (9.13%) | 4,000,000 (100%) | 71.68% | | The Basile Family Irrevocable Trust | 3,250,000 (81.25%) | 0 (0%) | 18.84% | - Holders of Class A common stock are entitled to **one vote per share**, while holders of Class B common stock are entitled to **three votes per share**[454](index=454&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=108&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company discloses several material related party transactions, primarily with CEO-controlled entities, including loans, headquarters construction and leases, and a **$21 million** project with an entity where the CEO has an ownership stake, with a formal related person transaction policy adopted on December 2, 2024 - The company received a loan from Capo 7, LLC, an entity owned by CEO Joseph F. Basile III, with the related party payable at **$332,870** as of December 31, 2023, and **$0** as of December 31, 2024[458](index=458&type=chunk) - JFB built its current headquarters for Aura Commercial LLC, an entity **100% owned by the CEO**, under a cost-plus **5% contract**, and now leases the property from the same entity[459](index=459&type=chunk)[463](index=463&type=chunk) - The company was awarded a **$21 million** project with Rare Capital Partners LLC, in which the CEO and two director nominees hold ownership interests[462](index=462&type=chunk) - A formal policy for reviewing and approving related person transactions was adopted on **December 2, 2024**[471](index=471&type=chunk) [Item 14. Principal Accounting Fees and Services](index=112&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section details fees paid to M&K CPAs, PLLC, with **$106,175** for audit and review and **$37,000** for S-1 related services in FY 2024, and **$83,096** for audit and review in FY 2023, all pre-approved by the Audit Committee Accountant Fees | Fee Type | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Audit Fees | $106,175 | $83,096 | | Tax Fees | $0 | $0 | | All Other Fees (S-1 related) | $37,000 | $0 | - All audit and permissible non-audit services provided by M&K CPAs, PLLC were pre-approved by the Audit Committee[480](index=480&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=115&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements included under Item 8, notes the omission of other schedules, and provides an index of exhibits filed with the Form 10-K, including corporate documents and officer certifications - This item provides an index of the financial statements and exhibits filed with the annual report[483](index=483&type=chunk)[487](index=487&type=chunk) [Item 16. Form 10-K Summary](index=115&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has opted not to include a Form 10-K summary in this filing - The company has opted not to include a Form 10-K summary[484](index=484&type=chunk)