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JFB Construction Holdings-A(JFB) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements 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 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, 202417 - Additional Paid-in Capital saw a substantial increase to $5,092,647 from $425,136, mainly due to the issuance of common stock17 Consolidated Statements of Income 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 202420 Consolidated Statements of Cash Flows 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 stock24 Notes to Unaudited Consolidated Financial Statements 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 2025515253 - Revenue is recognized over time using the cost-to-cost method as performance obligations are satisfied, in accordance with ASC 6063766 - The company leases its corporate headquarters from Aura Commercial, LLC, an entity wholly owned by the company's CEO, Joseph F. Basile III9193106 - On March 7, 2025, the company completed its IPO, issuing 1,250,000 units at $4.125 per unit, generating net proceeds of $4,667,636113 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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 growth141 Liquidity and Capital Resources 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 $2,239,662153 - 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 IPO150 - 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 collection148 Critical Accounting Policies and Estimates 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 leases165 - Revenue from construction contracts is recognized over time using the cost-to-cost method, which requires significant judgment in estimating total contract costs167170 - The company follows a 5-step model for revenue recognition under ASC 606, treating each construction contract as a single performance obligation168172 Item 3. Quantitative and Qualitative Disclosures About Market Risk 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-K192 Item 4. Controls and Procedures 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, 2025194 - There were no material changes to the company's internal control over financial reporting during the quarter ended March 31, 2025195 PART II - OTHER INFORMATION Item 1. Legal Proceedings 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 business198 - A litigation case concerning a residential remodel was settled on March 19, 2025, with the company set to receive a settlement of $39,138110 Item 1A. Risk Factors 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 aluminum200 - 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 606200201 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This item is reported as not applicable for the period - Not applicable203 Item 5. Other Information 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 quarter205 Item 6. Exhibits 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 certifications208