PART I - FINANCIAL INFORMATION Item 1. Financial Statements The company's cash position significantly increased due to its July 2023 IPO, despite wider net losses driven by higher operating expenses Condensed Balance Sheet Highlights (Unaudited) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $5,815,008 | $981,125 | | Total current assets | $6,134,128 | $1,026,978 | | Total assets | $6,240,912 | $1,336,913 | | Total current liabilities | $216,695 | $204,896 | | Total liabilities | $244,353 | $811,535 | | Total stockholders' equity | $5,996,559 | $525,378 | Condensed Statement of Operations Highlights (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Revenues | $1,652,965 | $1,691,826 | | Total operating expenses | $3,812,045 | $3,231,326 | | Loss from operations | $(2,159,080) | $(1,539,500) | | Net loss | $(2,196,565) | $(1,531,399) | | Net loss per common share | $(0.28) | $(0.22) | Condensed Statement of Cash Flows Highlights (Unaudited, Nine Months Ended) | Metric | Sep 30, 2023 | Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(908,139) | $(774,196) | | Net cash used in investing activities | $(9,073) | $0 | | Net cash provided by financing activities | $5,751,095 | $343,991 | | Net change in cash | $4,833,883 | $(430,205) | Notes to Condensed Financial Statements The company raised $5.0 million from its July 2023 IPO and has sufficient cash to fund operations for at least one year despite recurring losses - The company completed its Initial Public Offering (IPO) on July 27, 2023, selling 1,412,500 shares of common stock at $4.00 per share, resulting in net proceeds of approximately $5.0 million after deducting underwriting discounts and offering expenses30 - Despite a net loss of $2.2 million for the nine months ended September 30, 2023, management expects that its cash balance of $5.8 million will be sufficient to fund operating expenses and capital requirements for at least one year3132 - Upon the IPO in July 2023, all remaining outstanding SAFEs were converted into 165,861 shares of common stock, and all shares of Series B Preferred Stock were converted into 500,000 shares of common stock7179 - Total stock-based compensation for the nine months ended September 30, 2023, was $1.43 million, a significant increase from $0.67 million in the prior year, largely due to IPO-related issuances8493 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Q3 revenue grew 11% driven by higher transaction values, though operating expenses rose significantly due to IPO-related costs Overview and Strategy The company operates a B2B fintech marketplace and plans to accelerate growth through content, platform enhancement, and performance marketing - The company's business model is a B2B fintech marketplace connecting commercial borrowers and lenders, earning a transaction fee of approximately 1% of the loan amount at closing104107 - Key strategic initiatives include accelerating content marketing, enhancing the product platform with data and features, and expanding performance marketing to new borrower segments109114 Results of Operations Q3 revenue rose 11% to $584k on higher transaction values, while surging IPO-related expenses drove a higher net loss Q3 2023 vs Q3 2022 Performance | Metric | Q3 2023 | Q3 2022 | Change % | | :--- | :--- | :--- | :--- | | Revenues | $583,785 | $525,360 | 11% | | Total operating expenses | $2,222,431 | $1,127,452 | 97% | | Loss from operations | $(1,638,646) | $(602,092) | 172% | | Net loss | $(1,578,528) | $(267,642) | 490% | Nine Months 2023 vs 2022 Performance | Metric | Nine Months 2023 | Nine Months 2022 | Change % | | :--- | :--- | :--- | :--- | | Revenues | $1,652,965 | $1,691,826 | -2% | | Total operating expenses | $3,812,045 | $3,231,326 | 18% | | Loss from operations | $(2,159,080) | $(1,539,500) | 40% | | Net loss | $(2,196,565) | $(1,531,399) | 43% | - The 11% revenue increase in Q3 2023 was driven by a 78% increase in average revenue per transaction ($9,673 vs $5,419 in Q3 2022), largely due to growth in Small Business Administration (SBA) loans117 - The significant increase in operating expenses for both the three and nine-month periods was primarily attributed to higher stock-based compensation and professional fees related to the company's IPO119121128 Liquidity and Capital Resources The company's cash position increased to $5.8 million following its IPO and a preferred stock sale, ensuring sufficient liquidity for one year - As of September 30, 2023, the company had $5.8 million in cash and cash equivalents, compared to $0.98 million at December 31, 2022130 - Financing activities in 2023 included raising $1.0 million from the sale of Series B preferred stock and approximately $5.0 million in net proceeds from the IPO130136 - Management believes its current capital is sufficient to sustain the company's operating expenses for at least one year130 Non-GAAP Financial Measures Adjusted EBITDA loss improved to $725k for the nine-month period, excluding non-cash expenses like stock-based compensation - Adjusted EBITDA is presented as a key non-GAAP measure, calculated as net loss excluding stock-based compensation, depreciation, and other income/expense137 Reconciliation of Net Loss to Adjusted EBITDA (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net loss | $(2,196,565) | $(1,531,399) | | Share-based compensation | $1,434,464 | $673,572 | | Depreciation | $107 | $0 | | Other income (expense) | $(37,485) | $8,101 | | Adjusted EBITDA | $(724,509) | $(865,928) | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company identifies interest rate and inflation as primary market risks but reports no material impact on its operations to date - The company's primary market risks are identified as interest rate and inflation risks152 - Management does not believe inflation has had a material effect on the company's results of operations during the periods presented154 Item 4. Controls and Procedures Management concluded disclosure controls were ineffective due to a material weakness in internal controls related to segregation of duties - Management concluded that as of September 30, 2023, the company's disclosure controls and procedures were not effective at the reasonable assurance level156 - The ineffectiveness is due to a material weakness related to the inability to effectively segregate accounting duties, attributed to the company's limited size and resources157 PART II - OTHER INFORMATION Item 1. Legal Proceedings The company reports no current legal proceedings - The company is not a party to any material legal proceedings161 Item 1A. Risk Factors No material changes to risk factors have been reported since the company's S-1 Registration Statement - As a smaller reporting company, Janover is not required to provide this information and reports no material changes from its Registration Statement162 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company details unregistered equity sales, including a $1 million preferred stock sale and conversions of SAFEs and preferred stock to common stock - In April 2023, the company sold 1,000 shares of Series B Preferred Stock for an aggregate price of $1,000,000163 - Upon the IPO in July 2023, all outstanding SAFEs were converted into 165,861 shares of common stock, and all Series B Preferred Stock was converted into 500,000 shares of common stock164165 - In connection with the IPO, the company also issued 135,266 shares for services, 375,000 shares as direct offering costs, and an aggregate of 342,438 shares related to employee stock options165166167 Other Items and Exhibits The company reports no defaults or other material information and lists all exhibits filed with the report - The company reports no defaults upon senior securities (Item 3), no mine safety disclosures (Item 4), and no other information (Item 5)168169 - Item 6 lists exhibits filed with the report, including corporate governance documents, equity plans, and required certifications170
Janover (JNVR) - 2023 Q3 - Quarterly Report