JFB Construction (JFB) posts $21.8M revenue, $7.3M loss and major XTEND payment
JFB Construction Holdings reported sharply higher activity for the six months ended June 30, 2026, with revenue of $21,755,315 versus $9,598,801 a year earlier, driven by larger commercial and real estate development contracts. Commercial projects contributed 53% of revenue, residential 9%, and real estate development 38%.
Despite the growth, the company recorded a net loss of $7,264,069, wider than the prior‑year loss of $2,338,947, as selling and marketing expenses rose to $3,222,719 and general and administrative expenses to $6,629,071 to support expansion, brand awareness and public‑company infrastructure. Gross profit improved to $2,628,131, but was more than offset by higher operating costs.
Liquidity tightened: cash and restricted cash fell to $7,971,305 from $25,208,384, driven by a $30,223,000 prepaid acquisition cost related to the proposed XTEND merger and negative operating cash flow of $1,231,194, partly funded by $14,469,858 of equity issuance and warrant proceeds. The balance sheet remains equity‑heavy, with shareholder’s equity of $47,763,728 and minimal traditional debt, but the large upfront payment to XTEND and ongoing losses increase execution and capital‑raising risk if the merger or growth plans do not proceed as anticipated.
Positive
- Revenue more than doubled to $21,755,315 for the first half of 2026 from $9,598,801 a year earlier, reflecting strong growth in commercial and real estate development activity.
- Gross profit rose to $2,628,131 from $1,726,901, indicating improved absolute profitability from projects despite higher operating costs.
Negative
- Net loss expanded to $7,264,069 for the first half of 2026 from $2,338,947, as selling, marketing, and administrative expenses grew faster than gross profit.
- Cash and restricted cash declined to $7,971,305 from $25,208,384, largely due to a $30,223,000 prepaid merger payment and negative operating cash flow, tightening liquidity.
- The company committed $30,223,000 as a prepaid acquisition cost to XTEND; if the merger does not close, the payment remains with XTEND, increasing transaction risk.
- Shareholders face potential dilution from 34,602,536 warrants outstanding and 3,002,275 shares of Series C Preferred Stock that are convertible into common stock.
Insights
Analyzing...
Key Figures
Key Terms
ASC 606 financial
contract assets financial
cost-to-cost method financial
right-of-use assets financial
PIPE financing financial
Series C Convertible Preferred Stock financial
FAQ
How did JFB (JFB) perform financially in the first half of 2026?
What is JFB’s cash position and cash flow as of June 30, 2026?
How significant is the XTEND merger payment for JFB (JFB)?
What drove JFB’s revenue growth by segment in the first half of 2026?
What related party transactions affected JFB (JFB) in 2026?
How much potential dilution exists from JFB’s warrants and preferred stock?
AI-generated analysis. How Rhea-AI works. Not financial advice.
+
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______, 20___, to _____, 20___.
Commission File Number
(Exact Name of Registrant as Specified in its Charter)
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification Number) |
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(Address of Principal Executive Offices) |
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(Zip Code) |
(
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each Exchange on which Registered |
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The |
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO
As of August 13, 2026, there were
JFB Construction Holdings.
Table of Contents
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PART I - FINANCIAL INFORMATION |
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Item 1. |
Financial Statements |
5 |
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Consolidated Balance Sheets |
5 |
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Unaudited Consolidated Statements of Income |
6 |
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Unaudited Consolidated Statements of Changes in Shareholder’s Equity |
7 |
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Unaudited Consolidated Statements of Cash Flow |
8 |
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Notes to Unaudited Consolidated Financial Statements |
9 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 |
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
34 |
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Item 4. |
Controls and Procedures |
34 |
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PART II - OTHER INFORMATION |
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Item 1. |
Legal Proceedings |
35 |
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Item 1A. |
Risk Factors |
35 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
35 |
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Item 3. |
Defaults Upon Senior Securities |
35 |
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Item 4. |
Mine Safety Disclosures |
35 |
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Item 5. |
Other Information |
35 |
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Item 6. |
Exhibits |
37 |
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Signatures |
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38 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to considerable risks and uncertainties. All statements in this Quarterly Report, other than statements of historical fact, are forward-looking statements, including, without limitation, any projections regarding the markets in which we operate, plans and objectives for future operations, proposed new products or services, expected capital expenditures, future economic conditions or performance, and any estimates or assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “should,” “anticipates,” “intends,” “seeks,” “believes,” “estimates,” “potential,” “forecasts,” “continue,” or the negative thereof, or other comparable terminology. All forward-looking statements included in this Quarterly Report are made as of the date hereof and are based on information available to us as of such date. Although we believe the expectations reflected in the forward-looking statements contained herein are reasonable, there can be no assurance that such expectations or any of the forward-looking statements will prove to be correct. Actual results will likely differ, and could differ materially, from those results projected or assumed in the forward-looking statements. Prospective investors are cautioned not to unduly rely on any such forward-looking statements.
Forward-looking statements are neither statements of historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding our business, plans and strategies, projections, anticipated events and trends, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties,
2
risks, and changes in circumstances that are difficult to predict and may be outside of our control. Our actual financial condition, result of operations and business outcomes may differ materially from those expressed in or implied by the forward-looking statements.
Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
Moreover, new risks and uncertainties emerge occasionally, and it is not possible for management to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual future results to be materially different from any results expressed or implied by any forward-looking statements. Except as
3
required by applicable law or the listing rules of the Nasdaq Stock Market, we expressly disclaim any intent or obligation to update any forward-looking statements. If we do update or correct any forward-looking statements, investors and others should not conclude that we will make additional updates or corrections. We qualify all our forward-looking statements with these cautionary statements.
MARKET, INDUSTRY, AND OTHER DATA
This Quarterly Report includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties as well as our own estimates. All of the market data used in this report involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunities for our products include several key assumptions based on our industry knowledge, industry publications, third-party research, and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.
TRADEMARKS
This Quarterly Report includes trademarks, tradenames, and service marks that are our property or the property of others. Solely for convenience, such trademarks and tradenames sometimes appear without any “™” or “®” symbol. However, failure to include such symbols is not intended to suggest, in any way, that we will not assert our rights or the rights of any applicable licensor, to these trademarks and tradenames.
4
Item 1. Financial Statements .
JFB CONSTRUCTION HOLDINGS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
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As of |
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(Unaudited) |
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ASSETS |
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Cash |
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$ |
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Restricted Cash |
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Contract Receivables |
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Contract Assets |
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Prepaid expenses |
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TOTAL CURRENT ASSETS |
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NON- CURRENT ASSETS |
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Prepaid Acquisition Cost |
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NET PROPERTY AND EQUIPMENT |
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Other Assets-Related Party |
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RIGHT-OF-USE ASSETS – RELATED PARTY |
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Investment In Class A Common Stock |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES |
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Accounts payable and other payables |
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$ |
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$ |
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Accrued expenses |
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Contract liabilities |
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Lease liabilities – related party |
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TOTAL CURRENT LIABILITIES |
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SHAREHOLDER’S EQUITY |
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Preferred stock, $ |
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Class A Common stock, $ |
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Additional paid in Capital |
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Accumulated deficit |
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( |
) |
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TOTAL SHAREHOLDER’S EQUITY |
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TOTAL LIABILITIES AND SHAREHOLDER EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these consolidated financial statements.
5
JFB CONSTRUCTION HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
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For the three Months Ended |
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For the Six Months Ended |
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June 30, 2026 |
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June 30, 2025 |
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June 30, 2026 |
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June 30, 2025 |
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Sales |
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$ |
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$ |
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$ |
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$ |
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Sales-Related Party |
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Cost of Goods Sold |
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Cost of Goods Sold-Related Party |
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Gross Profit (Loss) |
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Operating Expenses |
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Selling and marketing expenses |
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General and administrative expense |
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Rent expense-related party |
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Depreciation and amortization expense |
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Total Operating Expense |
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Income(loss) from Operations |
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( |
) |
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( |
) |
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( |
) |
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( |
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OTHER INCOME (EXPENSE) |
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Other Income (Expense) |
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( |
) |
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( |
) |
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Interest Income |
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TOTAL OTHER INCOME |
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NET INCOME (LOSS) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Earnings (Loss) Per Share |
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Basic and Diluted Common Share |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Weighted- Average Common Shares Outstanding, Basic and Diluted |
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The accompanying notes are an integral part of these consolidated financial statements.
6
JFB CONSTRUCTION HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Unaudited)
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Class A Common Stock |
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Class B Common Stock |
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Class C PreferredStock |
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Paid-In |
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Retained |
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Shares |
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Par |
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Shares |
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Par |
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Shares |
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Par |
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Capital |
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Earnings |
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Total |
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Balance, December 31, 2024 |
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$ |
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$ |
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- |
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- |
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$ |
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$ |
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$ |
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Contributions March 31, 2025 |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Proceeds from Issuance of Common stock, net |
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- |
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- |
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- |
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- |
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- |
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Net Income March 31, 2025 |
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- |
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- |
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- |
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- |
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- |
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- |
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Balance, March 31, 2025 |
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$ |
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$ |
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- |
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- |
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$ |
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$ |
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$ |
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Proceeds from Exercise of Warrants |
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- |
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- |
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- |
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- |
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- |
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Common Stock Issued for Service |
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- |
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- |
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- |
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- |
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Net Loss June 30, 2025 |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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Balance, June 30, 2025 |
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$ |
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$ |
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- |
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$ |
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$ |
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Balance, December 31, 2025 |
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$ |
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- |
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- |
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$ |
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$ |
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$ |
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$ |
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Proceeds from Exercise of Warrants |
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- |
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- |
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- |
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- |
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- |
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Shares Issued for Service |
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- |
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- |
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- |
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- |
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- |
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Proceeds from Issuance of Common stock, net |
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- |
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- |
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- |
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- |
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- |
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Conversion of Preferred Stock C to Common Stock |
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- |
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- |
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( |
) |
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( |
) |
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( |
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- |
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Cashless exercise of warrants |
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- |
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- |
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- |
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- |
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( |
) |
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- |
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- |
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Net Loss March 31, 2026 |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
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Balance, March 31, 2026 |
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$ |
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- |
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- |
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$ |
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$ |
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$ |
( |
) |
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$ |
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Proceeds from Exercise of Warrants |
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|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
||||||||||
Shares Issued for Service |
|
|
|
|
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
|
||||||||||
Conversion of Preferred Stock C to Common Stock |
|
|
|
|
|
|
- |
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
- |
|
|
|
|
||||||||
Contributed Capital |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
|
|
|||||||||
Net Loss June 30, 2026 |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||||||
Balance, June 30, 2026 |
|
|
|
|
$ |
|
|
- |
|
|
- |
|
|
|
|
|
$ |
|
$ |
|
|
$ |
( |
) |
|
$ |
47,763,728 |
|
|||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
JFB CONSTRUCTION HOLDINGS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net Income (Loss) |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile Net Income (Loss) to Net Cash provided by operations: |
|
|
|
|
|
|
||
Depreciation Expense |
|
|
|
|
|
|
||
Bad Debt Expense |
|
|
|
|
- |
|
||
Loss on Conversion of Preferred Stock |
|
|
|
|
- |
|
||
(Gain) loss on sale of fixed asset |
|
- |
|
|
|
( |
) |
|
Shares issued for Services |
|
|
|
|
|
|
||
Changes in assets and Liabilities (increase) decrease in : |
|
|
|
|
|
|
||
Contracts Receivable |
|
|
|
|
|
( |
) |
|
Other Assets |
|
|
|
|
|
|
||
Contract Assets |
|
|
( |
) |
|
|
( |
) |
Prepaid Expenses |
|
|
|
|
|
( |
) |
|
Lease Liabilities, net |
|
|
|
|
|
|
||
Accounts Payable |
|
|
|
|
|
( |
) |
|
Accrued Expenses |
|
|
|
|
|
|
||
Contract Liabilities |
|
|
|
|
- |
|
||
CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Cash Received from sale of Fixed Asset |
|
- |
|
|
|
|
||
Cash Paid for Class A Common Stock |
|
- |
|
|
|
( |
) |
|
Cash Used for Long- Term Investments |
|
|
( |
) |
|
|
|
|
Cash Paid for purchased of Fixed Assets |
|
|
( |
) |
|
|
( |
) |
NET CASH USED IN INVESTING ACTIVITIES |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Proceeds from Issuance of Common Stock A, net |
|
|
|
|
|
|
||
Proceeds from Exercise of Warrants |
|
|
|
|
|
|
||
Shareholder (Distributions) Contributions |
|
|
|
|
|
|
||
CASH PROVIDED BY (USED IN ) FINANCING ACTIVITIES |
|
|
|
|
|
|
||
NET INCREASE (DECREASE) IN CASH |
|
|
( |
) |
|
|
|
|
CASH AND RESTRICTED CASH AT BEGINNING OF YEAR |
|
|
|
|
|
|
||
Cash and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental Disclosures of Cash Flow Information: |
|
|
|
|
|
|
||
Interest Paid |
|
$ |
— |
|
|
$ |
— |
|
Taxes Paid |
|
$ |
— |
|
|
$ |
— |
|
Non-Cash Financing |
|
|
|
|
|
|
||
Addition of lease during the period |
|
$ |
|
|
- |
|
||
Conversion of Preferred Stock to Common Stock |
|
$ |
|
|
|
|
||
Cashless exercise of warrants |
|
$ |
|
|
$ |
— |
|
|
The accompanying notes are an integral part of these consolidated financial statements.
8
JFB Construction Holdings
Notes to the Unaudited Financial Statements
Note 1 – Nature of the Business
JFB Construction & Development, Inc. (the “JFB Subsidiary”) was incorporated in the State of Florida on May 28, 2014, and is based in Lantana, Florida. The Company offers more than
On April 09, 2024, JFB Construction Holdings (the “Parent Company”) was formed out of the state of Nevada to serve as the parent company of JFB Construction & Development, Inc. The consolidated financial statements of JFB Construction Holdings reflect the financial position, results of operations and cash flows of both JFB Construction Holdings and its subsidiaries from the date of consolidation. Unless otherwise indicated, “JFB Construction,” “JFB,” the “Company,” “we,” “us,” “our,” “our company” and “our business” refer, to JFB Construction Holdings, including its subsidiaries named herein.
Note 2 –Summary of Significant Accounting Policies
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity.
Principles of Consolidation
JFB Construction & Development, Inc. accounts are included on its Parent Company’s consolidated financial statements for the six months ended June 30, 2026 and June 30, 2025 and for the year ended December 31, 2025.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”), regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual financial statements prepared in accordance with U.S. GAAP. Therefore, these unaudited consolidated financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report for the year ended December 31, 2025.
Cash and Restricted Cash
The Company’s cash is comprised of highly liquid investments with an original maturity of Six (6) months or less.
As of June 30, 2026 the Company holds $
Concentration Risk
Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Company (FDIC) limits. At times throughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of June 30, 2026 and December 31, 2025, the cash balance in excess of the FDIC limits was $
The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk in these accounts.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Certain accounting estimates of the Company require a higher degree of judgement than others in their application. These include the recognition of revenue
9
and earnings from construction contracts over time, and the valuation of long-lived assets. Management evaluates all of its estimates and judgements based on available information and experience; however, actual results could differ from those estimates.
Revenue Recognition
We recognize revenue when services are performed, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.
Revenues and related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue, and associated profit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined.
Revisions in cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions become known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined.
Contract receivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible upon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based upon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General and administrative expenses are charged to operations as incurred and are not allocated to contract costs.
To determine proper revenue recognition for contracts, we evaluate whether two or more contracts should be combined and accounted for as one single performance obligation or whether a single contract should be accounted for as more than one performance obligation. This evaluation requires significant judgment and the decision to combine a group of contracts or separate a single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. For all of our contracts, we provide a significant service of integrating a complex set of tasks and components into a single project. Hence, the entire contract is accounted for as one performance obligation. Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion is complex, subject to variables and requires significant judgment. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us.
In accordance with ASC 606-10-50-12, our revenue recognition policy reflects the nature of the goods and services promised to customers across our
In accordance with ASC 606-10-50-13 we disclose information regarding our remaining performance obligations for contracts with customers in our business segments. The total remaining performance obligations under the Commercial Construction segment are expected to be satisfied within the next
Contract Assets and Contract Liabilities
Account receivable are recognized in the period when the Company’s right to consideration is unconditional. Accounts receivable are recognized net of an allowance for credit losses. A considerable amount of judgement is required in assessing the likelihood of realization of receivables.
The timing of revenue may differ from timing of invoicing customers.
10
Contract assets include unbilled amounts from long-term construction services when revenue recognized under the cost-to-cost measure of progress exceeds the amounts invoiced to customers, as the amounts cannot be billed under the terms of the contracts. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones, completion of specified units or completion of contract. Contracts assets are generally classified as current within the consolidated balance sheet.
Contract liabilities from construction contracts occur when amounts invoiced to customers exceed revenues recognized under the cost-to-cost measures of progress. Contract liabilities additionally include advance payments from customers on certain contracts. Contract liabilities decrease as the Company recognizes revenue from the satisfaction of the related performance obligation. Contract liabilities are generally classified as current within the consolidated balance sheet.
Although the Company believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably possible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises its estimates and makes adjustments when they are considered necessary.
The Company recognizes revenue by applying the following 5 step model:
1. Identifying the Contract(s) with a Customer. The Company enters into written contract with customers that create enforceable rights and obligations. Contracts are assessed to ensure they meet criteria for being considered legally binding and capable of being accounted for.
2. Identify the Performance Obligations in the Contract. Performance obligations are identified as distinct promises to transfer goods or services to a customer. The Company identifies their scope of work and creates a schedule of values (SOV) outlining each individual scope of the project.
3. Determine the Transaction Price. The transaction price is the amount of considerations the Company expects to be entitled to in exchange for transferring promised services. The transaction price may include fixed amounts or cost-plus percentage method.
4. Allocate the Transaction Priced to Performance Obligations. The transaction price is allocated to each performance obligation (SOV) based on its stand-alone selling price. The stand-alone selling price is the price which the Company would sell its service separately to a customer.
5. Recognize Revenue when (or as) the Company Satisfies a Performance Obligation. The Company recognizes revenue over time based on the progress towards completion of performance obligation. Revenue recognized during this reporting period is derived from the total contract value as allocated to performance obligations satisfied during that period.
In accordance with ASC 280-10-50, our operations are organized into three primary business segments: Commercial Construction, Residential Construction, and Real Estate Development. These segments are defined based on the nature of our services and the markets we serve.
Commercial Construction: This segment includes all activities related to the construction of commercial properties such as office buildings, retail spaces, and industrial facilities. Revenue is recognized using the cost-to-cost method, reflecting the extent of work performed on contracts. The Commercial segment of JFB Construction represents
Residential Construction: This segment focuses on the construction of residential properties, including single-family homes and multi-family units. Revenue recognition is similarly based on the cost-to-cost method. The Residential segment of JFB Construction represents
Real Estate Development: This segment encompasses the acquisition, development, and sale of real estate properties. Revenue is recognized upon the sale of developed properties and is influenced by market conditions and demand for residential and commercial properties. The Real Estate Development segment of JFB Construction represents
The financial performance of each segment is regularly reviewed with operational leaders in charge of these segments, the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and others.
11
Contract Receivable
Accounts receivables are generally based on amounts billed to the customer in accordance with contractual provisions. They are uncollateralized customer obligations due under normal trade terms, only recorded for those amounts deemed collectible, based upon experience with its customers. No finance or interest charges are charged to accounts receivable. The Company uses the allowance method to account for uncollectible accounts receivable. The Company records an allowance against uncollectible items for each customer after all reasonable means of collection have been exhausted, and the potential for recovery is considered remote. The allowance for doubtful accounts was $
Prepaid Expenses
The Company records expenditures that have been paid in advance as prepaid expenses. The prepaid expenses are initially recorded as assets because they have future economic benefits and are expensed at the time the benefits are realized. The prepaid expenses balance was $
In addition, on February 17, 2026, the Company remitted $
Advertising Costs
The Company expenses the cost of advertising and promotional materials when incurred. The advertising costs were $
Property and Equipment
Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, including vehicles, computers and office equipment and field equipment. Gain or loss is recognized upon disposal of property and equipment, and the asset and related accumulated depreciation are removed from the accounts. Expenditures for maintenance and repairs are charged to expense as incurred, while expenditures for addition and betterment are capitalized.
Estimated Life |
|
Office, Field, and Computer Equipment |
|
Vehicles |
|
Leasehold Improvements |
|
|
06/30/2026 |
|
|
12/31/2025 |
|
||
Field Equipment |
|
$ |
|
|
$ |
|
||
Computer Equipment |
|
|
|
|
|
|
||
Vehicles |
|
|
|
|
|
|
||
Office Equipment |
|
|
|
|
|
|
||
Leasehold Improvements |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Net Property and Equipment |
|
$ |
|
|
$ |
|
||
Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that the facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability would be performed following generally accepted accounting principles.
Depreciation expense during the six months ended June 30, 2026 and June 30, 2025 , was $
12
Fair Value of Financial Instruments
Fair Value of Financial Instruments requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of June 30, 2026 the balances reported for cash, contract receivables, cost in excess of billing, prepaid expenses, accounts payable, billing in excess of cost, and accrued expenses approximate the fair value because of their short maturities.
We adopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures about fair value measurements.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
Work-in-Process
The Company recognizes as an asset the accumulated costs for work-in-process on projects expected to be delivered to customers. Work in Process includes the cost price of materials and labor related to the construction of equipment to be sold to customers.
Recently Issued Accounting Pronouncements
Management reviewed currently issued pronouncements and does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying condensed financial statements.
Note 3 – Revenue from Contracts with Customers
Revenues and related costs on equipment contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined.
In accordance with ASC 606-10-50-5, the Company identifies Revenue from Contracts with Customers using this 5- step model.
1. Identifying the Contract(s) with a Customer. The Company enters into written contract with customers that create enforceable rights and obligations. Contracts are assessed to ensure they meet criteria for being considered legally binding and capable of being accounted for.
2. Identify the Performance Obligations in the Contract. Performance obligations are identified as distinct promises to transfer goods or services to a customer. The Company identifies their scope of work and creates a schedule of values (SOV) outlining each individual scope of the project. Commercial construction performance obligations typically include delivering construction services for commercial construction and recognized the entire contract as a single performance obligation, Residential Construction is typically delivering the new construction of a residential construction or a remodel of an existing residential property, and we recognize the contract as a single performance obligation.
3. Determine the Transaction Price. The transaction price is the amount of considerations the Company expects to be entitled to in exchange for transferring promised services. The transaction price may include fixed amounts or cost-plus percentage method.
13
4. Allocate the Transaction Priced to Performance Obligations. The transaction price is allocated to each performance obligation (SOV) based on its stand-alone selling price. The stand-alone selling price is the price which the Company would sell its service separately to a customer.
5. Recognize Revenue when (or as) the Company Satisfies a Performance Obligation. The Company recognizes revenue over time based on the progress towards completion of performance obligation. Revenue recognized during this reporting period is derived from the total contract value as allocated to performance obligations satisfied during that period. Commercial construction revenue is recognized over time, using the cost-to-cost method as we perform work on projects. Residential construction is similarly recognized over time for custom builds and remodel using the cost-to-cost method. By treating our contracts as a single performance obligation, we ensure that our revenue recognition process accurately reflects the economic realities of our business operations across all segments. This approach provides clarity to stakeholders regarding our revenue-generating activities, aligning with the guidance provided in ASC 606-10-55-89 through 55-91.
In accordance with ASC 606-10-50-8, the Company has disclosed significant judgements and changes in judgements related to the recognition of revenue from construction contracts. The application of ASC 606 requires the use of judgment in various aspects of revenue recognition, particularly in the cost-to-cost method. The Company applies the cost-to-cost method to measure progress toward completion. This involves estimating the total contract cost and recognizing revenue based on the ration of cost incurred to the estimated total cost. The Company makes judgements regarding the recognition of revenue related to change orders and claims. Revenue from change orders is included in the transaction price when it is probable the customer will approve the change and the amount can be reliably estimated.
In accordance with ASC 606-10-50-8, the Company recognizes contract assets and liabilities that reflect timing of revenue relative to the amounts billed or paid. Contract balances are reported in the balance sheet as follows:
1. Contract Assets. Contract Assets represent the Company’s right to consideration for work completed to date but not yet billed to the customer. These amounts typically arise when revenue is recognized before an invoice is issued.
2. Contract Liabilities. Contract Liabilities represent the Company’s obligation to transfer goods or service to a customer for which it has received consideration or has the right to receive consideration before performing under the contract. Contract liabilities include advance payments or progress billing received from customers before the Company has satisfied its performance obligations.
Contract assets represent revenues recognized in excess of amounts billed on contracts in progress. Contract liabilities represent billings in excess of revenues recognized on contracts in progress. Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheets, as they will be liquidated in the normal course of the contract completion. The contract asset for the six months ended June 30, 2026 and the year ended December 31, 2025, was $
Note 4 – Business Segment Information
The Company operates primarily in
Commercial Construction: This segment includes all activities related to the construction of commercial properties such as office buildings, retail spaces, and industrial facilities. Revenue is recognized using the cost-to-cost method, reflecting the extent of work performed on contracts.
Residential Construction: This segment focuses on the construction of residential properties, including single-family homes and multi-family units. Revenue recognition is similarly based on the cost-to-cost method.
Real Estate Development: This segment encompasses the acquisition, development, and sale of real estate properties. Revenue is recognized upon the sale of developed properties and is influenced by market conditions and demand for residential and commercial properties. The company views this segment as a strategic growth opportunity in the future. We are actively exploring development opportunities and anticipate expanding our footprint in this area over the coming years.
The Company’s segment profit or loss is measured using gross profit, which is the primary performance metric utilized by management to evaluate the financial results of each reportable segment. For segment reporting purposes, gross profit is calculated as the difference between segment revenue and the direct costs associated with specific projects or contracts. These direct costs include materials, labor, subcontractors, and other project-specific expenses directly attributable to the construction activities of each segment.
14
The financial performance of each segment is regularly reviewed with operational leaders in charge of these segments, the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and others. The Company’s segment disclosures are presented in accordance with the guidance set forth in ASC 280, Segment reporting. Specifically, the disclosures comply with the requirements outlined in ASC 280-10-50-22 through 50-26, which mandate that an entity disclose certain information about its operating segments to enable users of the financial statements to understand the financial performance of different parts of the business.
In accordance with ASC 280-10-50-29, the disclosures also adhere to the requirements of which mandate that the financial information provided for each segment should include items such as capital expenditures, depreciation, and amortization, when appropriate. The disclosures reflect the performance and financial position of each segment, and a reconciliation of segment totals to the overall consolidated financial results, including total segment profit or loss and other significant disclosures.
The Company’s segment disclosures are presented in accordance with the requirements set forth in ASC 280-10-50-30(b) and (c), which specify the need to disclose the total of reportable segments' profit or loss, as well as the basis of measurement used to determine the segment results.
In accordance with ASC 280-10-50-30(b), the Company provides the total of profit or loss for all reportable segments, which reflects the combined operating results for each reportable segment included in the financial statements. The total segment profit or loss represents the aggregation of segment results before the allocation of corporate expenses and certain other items not attributable to specific segments.
As required by ASC 280-10-50-30(c), the Company has also disclosed the basis of measurement for segment profit or loss. The measure used to assess segment performance and allocate resources is operating income (or loss), which includes revenues, cost of sales, and directly attributable operating expenses for each segment. The operating income (or loss) for each reportable segment is reviewed by the Company’s chief operating decision maker (CODM) and serves as the primary performance metric used in resource allocation and operational decision-making.
Segment information is as follows:
For the six months ended June 30, 2026 |
|
Commercial |
|
Residential |
|
Real Estate Development |
|
Rental Income |
|
Consolidated |
|
|||||
Sales |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|||||
Cost of Goods Sold |
|
|
|
|
|
|
|
- |
|
|
|
|||||
Gross Profit (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating Expenses |
|
|
|
|
|
|
|
- |
|
|
|
|||||
Selling & Marketing Expenses |
|
|
|
|
|
|
|
- |
|
|
|
|||||
General & Administrative Expenses |
|
|
|
|
|
|
|
|
|
|
|
|||||
Rent expense-related party |
|
|
|
|
|
|
|
- |
|
|
|
|||||
Depreciation and amortization expense |
|
|
|
|
|
|
|
- |
|
|
|
|||||
Total Operating Expense |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income (loss) From Operations |
|
|
( |
) |
|
( |
) |
|
( |
) |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|||||
Other Income (expenses) |
|
|
( |
) |
|
( |
) |
|
( |
) |
- |
|
|
( |
) |
|
Interest Income |
|
|
|
|
|
|
|
- |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
TOTAL OTHER INCOME |
|
|
|
|
|
|
|
- |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
NET INCOME (LOSS) |
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
|
$ |
( |
) |
|
15
For the six months ended June 30, 2025 |
|
Commercial |
|
|
Residential |
|
|
Real Estate |
|
|
Consolidated |
|
||||
Sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cost of Goods Sold |
|
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|
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|
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|
||||
Gross Profit (Loss) |
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|
||||
|
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|
||||
Operating Expenses |
|
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|
|
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|
|
||||
Selling & Marketing Expenses |
|
|
|
|
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|
||||
General & Administrative Expenses |
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|
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|
||||
Rent Paid- Related Party |
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|
|
|
|
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|
||||
Depreciation and amortization expense |
|
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|
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|
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|
||||
Total Operating Expense |
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|
||||
|
|
|
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|
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|
|
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|
||||
Loss From Operations |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other Income (Expenses) |
|
|
|
|
|
|
|
- |
|
|
|
|
||||
Interest Income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
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|
||||
TOTAL OTHER INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
NET INCOME (LOSS) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Note 5 – Lease Arrangements
In the ordinary course of business, the Company enters into lease arrangements, including operating and finance leases. Please refer to Note 8 for more information on our lease arrangements.
The Company determines if an arrangement is a lease at inception. The operating lease right-of-use (“ROU”) assets are included within the Company’s non-current assets and lease liabilities are included in current or non-current liabilities on the Company’s Consolidated Balance Sheets. Finance leases are included in “Property and equipment,” “Current maturities of long-term debt,” and “Long-term debt” on the Company’s Consolidated Balance Sheets. ROU assets represent the Company’s right to use, or control the use of, a specified asset for the lease term. Lease liabilities are the Company’s obligation to make lease payments arising from a lease and are measured on a discounted basis. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term on the commencement date. The operating lease ROU asset includes any lease payments made and initial direct costs incurred and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments continues to be recognized on a straight-line basis over the lease term.
Total rent expense was $
In accordance with the accounting standards under ASC 842, the Company has entered into a lease agreement with Aura Commercial LLC, a related party, for office space. The total rental obligation under the lease amounts to $
Lease Terms:
Monthly Rent: $
We lease our current corporate headquarters under a
The Company accounts for its lease liabilities in accordance with ASC 842, recognizing the present value of future lease payments as a liability on the balance sheet. The interest expense associated with the lease liability is recognized over the lease term. The company has a lease liability of $
16
Note 6 – Income Taxes
JFB has elected to be taxed as an “C” Corporation under the provisions of the Internal Revenue Code (the “Code”). Under this provision, the Company is directly responsible for the calculation and payment of federal corporate income taxes on its taxable income, as determined in accordance with the code and relevant regulations.
Pursuant to the provisions of the Accounting Standards Codification (“ASC”) 740-10, the Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. As of the six months ended June 30, 2026 and the year ended December 31, 2025, the Company had
The Company’s federal income tax returns for 2025 and 2024 are subject to examination by the IRS, generally for three years after they were filed.
Note 7 – Concentrations
The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of its cash and accounts receivable. The Company maintains its cash balances in bank deposit and money market accounts which, at times, may exceed federally insured limits.
Sales and Accounts Receivable
During the periods ended June 30, 2026 one (1) customer totaled
The Company performs ongoing credit valuations on its customers and management believes that the financial viability of these customers its sound.
Purchases and Payables
There was
Note 8 – Related Party Transactions
On March 14,2024 we were awarded a $
We lease our current corporate headquarters under a
On May 1, 2025, the Company entered into a Construction agreement as general contractor and co-developer for a new Courtyard by Marriott hotel in Olive Branch, Mississippi. The project includes the development of a 117- room hotel. As of June 30, 2026, the Company recognized revenue of $
17
Note 9 – Private Placement
On
JFB holds a
Class A Members are entitled to an
On February 17, 2026 the Company entered into a definitive Merger Agreement with XTEND pursuant to which XTEND will acquire all of the outstanding equity interests of the Company, subject to the terms and conditions set forth in the agreement. In connection with the execution of the merger agreement, the Company remitted $
Litigation
From time to time, the Company is party to various claims or actions arising out of the ordinary course of business. While any proceeding or litigation contains an element of uncertainty, management believes no matter exists that would have a material impact on the Company’s financial position, liquidity, or results of operations.
As of June 30, 2026, the Company is engaged in ongoing litigation with one customer related to an unpaid final contract balance of $
Note 11 – Equity
The Company is authorized to issue up to
18
accordance with ASC 505-10-S99-4 (SAB Topic 4:C) and ASC 260- 10-55-12, as of June 30, 2026, and December 31,2025
At times the CEO of the Company, makes contributions to the Company. For the six months ended June 30, 2026 the contributions were $
On March 7,2025 the Company consummated its initial public offering of
On March 2025 the board authorized
During the three months ended March 31, 2025, the Company received $
On January 16, 2026 the board authorized
On January 23,2026, the Company issued
On April 16, 2026 the board authorized
On May 7, 2026, the Company received $
On June 16, 2026 the board authorized
On June 30, 2026 the board authorized
As of June 30, 2026, the Company had
Holders of Series C Preferred Stock are entitled to receive dividends on an as‑converted basis if and when dividends are declared on the Company’s Common Stock. Dividends are non-cumulative. The Series C Preferred Stock votes together with the Common Stock on an as‑converted basis, except for matters requiring a separate class vote under applicable law or the Certificate of Designation. The Series C Preferred Stock includes customary protective provisions, including approval rights over amendments to the Certificate of Incorporation that adversely affect the Series C, the creation of senior or pari pass preferred stock, and certain corporate actions. As of June 30, 2026, the Company had
Upon any liquidation, dissolution, or winding up of the Company, holders of Series C Preferred Stock are entitled to receive, prior to any distribution to holders of Common Stock, an amount equal to the stated value per share plus any declared but unpaid dividends. After payment of the liquidation preference, Series C holders may participate on an as‑converted basis to the extent provided in the Certificate of Designation. The Series C Preferred Stock is not mandatorily redeemable, and any optional redemption by the Company
19
is subject to the terms and limitations set forth in the Certificate of Designation. Conversion and exercise rights associated with the Series C units may be subject to beneficial ownership limitations (e.g.,
During the period ended June 30, 2026, holders exercised a total of
The Company estimated the fair value of the warrants issued during the period using the Black‑Scholes option pricing model. The
|
Total Warrants outstanding as of December 31, 2025 |
|
|
||
|
Total warrants Exercised |
( |
|
||
|
|
|
|
|
|
Total Warrants Outstanding as of June 30, 2026 |
|
|
|||
Pursuant to a forward stock split (the “Forward Split”) announced on March 10, 2026, the total number of shares of Common Stock held by each stockholder were converted automatically into the number of shares of Common Stock equal to the number of issued and outstanding shares of Common Stock held by each such stockholder immediately prior to the Forward Split multiplied by two, with distribution occurring on March 25, 2026.
On February 18, 2026, the Company completed a private investment in public equity (“PIPE”) financing with American Ventures, LLC, Series XIV JFB (the “Investor”). Pursuant to the securities purchase agreement, the Company issued
In connection with the transaction, the Company incurred $
The PIPE financing strengthened the Company’s liquidity position and is intended to support general corporate purposes, working capital needs, and ongoing growth initiatives. The shares issued in the PIPE were not registered under the Securities Act of 1933 and were issued pursuant to applicable private placement exemptions.
Note 12 – Subsequent Event
Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, based on this evaluation, management has determined that a material subsequent event occurred;
On July 7, 2026, American Ventures converted
On July 15, 2026, American Ventures converted
On August 3, 2026, XTEND submitted its Form S-4/A2 registration statement to the Securities and Exchange Commission in connection with the proposed merger between the Company and XTEND. The filing of the Form S-4 occurred after the balance sheet date and does not impact the Company's financial position as of June 30, 2026.
On August 11, 2026 the Company filed a DEF14C Information Statement with the Securities and Exchange Commission. The filing was made to satisfy the applicable shareholder-notification and corporate-action requirements necessary to permit Xtend's Form S-4 registration statement to become effective.
Date of Management Review
20
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this Quarterly Report and the audited financial statements and notes thereto as of and for the year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K filed with the SEC on June 30, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve substantial risks and uncertainties. As a result of many factors, including those factors set forth in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as the same may be updated from time to time, including in Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For further information regarding our forward-looking statements, see “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report.
Overview
JFB is a commercial and residential construction company specializing in retail buildouts, multifamily developments, luxury homes and general commercial construction. We have strong relationships with franchisees and franchisors, which has been the foundation of driving steady growth, especially in the Southern Atlantic region. Our expansion plans include vertically integrated real estate development projects and securing larger, more complex construction projects that require higher bond capacity.
Revenue Sources
Our primary markets vary across our business segments.
Commercial Contracting Segments
Our commercial contracting segment has completed projects in 36 states, delivering over 2 million square feet of commercial retail and shopping center space construction and improvements. This segment’s market is driven primarily by our ability to provide services to franchisees and franchisors nationwide, regardless of project location because of our operational flexibility and established relationships with franchisees and franchisors alike. While we have historically focused on the Southern Atlantic region, including Florida, Georgia, South Carolina, and North Carolina, where we have established a strong reputation and network, our growth is increasingly tied to the strength of our relationships with franchisees and the trust of franchisors who rely on us as preferred builders for multiple projects.
Real Estate Development Segment
Our real estate development segment is currently concentrated in South Florida, with plans to leverage our regional success to expand into other southern and U.S. markets by identifying market opportunities and joint venture partners that align with our objectives. Our residential construction segment is also focused on South Florida, with no current plans for expansion beyond this market.
Rental Income Segment
Our rental income segment consists primarily of revenue generated from the lease and sublease of office space within our corporate headquarters in South Florida. As part of our broader real estate strategy, we actively manage excess capacity within our facilities to optimize utilization and generate recurring, non‑construction revenue streams. This includes subleasing portions of our office space to third‑party tenants whose operational needs align with our building configuration and occupancy standards.
Rental income is recognized in accordance with the underlying lease and sublease agreements, which generally provide for fixed monthly payments and, in certain cases, reimbursement of shared operating costs. Subleasing activity allows us to offset a portion of our occupancy expenses while maintaining flexibility to scale our internal footprint as our operating segments grow. We continue to evaluate opportunities to enhance this segment by identifying additional space within our facilities that may be suitable for sublease arrangements, provided such activity remains consistent with our long‑term operational requirements.
Corporate Growth and Expansion
21
Management believes we will leverage our established industry relationships, experience operating in various jurisdictions and navigating complex construction regulations to meet our growth objectives of continuing to expand our market throughout more of the United States and successfully winning bids for larger construction projects. The Company intends to focus its business in states with increased population and GDP growth, such as Florida, Texas and South Carolina. However, as we expand into new territories, our reputation for excellence will be less known by new clients and we will need to compete with other construction companies that may have been operating in a given region for years and already have built up reliable networks of clients, vendors, contractors, and other market participants. We believe our ability to rely on our relationships within the franchise industry and more generally the real estate development industry, should offset some of this potential risk, however, by continuing to build on our experience and proven track record.
Our expansion and growth goals, some of which will come with more capital intensive projects, may expose the Company to greater risks related to lack of performance, faltering relationships, improper investment of resources or otherwise. The Company also recognizes operations are likely to fluctuate significantly and historical results should not be considered indicative of results for any future periods. While taking into account the inherent risks, it is our intent to capitalize on our increased access to capital and credibility to fund new projects and increase our bond-ability fueling our intended growth. Our ability to obtain surety bonds is important for expanding our operations, as bonding is often required for bidding on public and large private projects. Increased bonding capacity allows us to pursue more high-value contracts, particularly in government and infrastructure sectors, enhancing revenue opportunities and market diversification. It also strengthens our credibility with clients and lenders, reflecting our financial stability. This credibility can lead to improved financial terms and mitigate risks associated with contract defaults, enabling the company to confidently take on larger projects and drive long-term growth.
We have extensive experience building and remodeling hundreds of franchise locations for corporate franchisors and franchisees for national, fast expanding brands, including Orange Theory Fitness, European Wax Center, Massage Envy, Planet Fitness, V/O Medspa, Arby’s, Tropical Smoothie Cafe, Amazing Lash Studio, Starbucks and Save-A-Lot. For our franchise clients, we offer interior remodeling, space optimization, and the integration of advanced design to create functional and attractive retail environments. The Company expects consistent and reliable revenue for this division based on established relationships and clients affiliated with reputable name brands. Should such relationships be compromised or key individuals leave their positions with franchisors, our consistent revenue sources could be adversely impacted. However, the departure of key individuals may create new opportunities with the franchisors these individuals transition to. We intend to continue to utilize our commitment to quality craftsmanship, attention to detail, and customer satisfaction to set us apart in this market. Should the quality of our workmanship suffer through poor project management or quality control, our reputation may be impacted, reducing our ability to attract new clients or retain past clients. Each project with our significant franchise client, Planet Fitness, is under a separate agreement, but our standard business arrangement involves a fixed-price commercial construction contract valued between $1.5-2 million, with an anticipated completion timeline of 12-14 weeks. Payments are due within 30 days of invoice, aligning with project milestones to ensure cash flow and maintain project pace. Management believes JFB Construction’s unique selling proposition lies in our ability to tailor solutions to meet the specific needs of each client, familiarity of the needs of our clients within the franchise construction niche, and delivering projects on time and within budget. Further, we attempt to offer efficient and economical solutions for our client’s expanding franchisee and franchisor businesses by allowing them to utilize the same contractor for many of their franchise locations.
Presently, the Company has begun to expand its real estate development segment by being the general contractor on low rise apartment and townhome developments projects. In the future, the Company also intends to invest directly or through joint ventures in real estate development projects. While these investments present a pathway to generate additional revenues by selling completed projects at a premium, generating rental income and/or to vertically integrate by securing valuable construction contracts associated with the projects, they also involve considerable capital commitments and exposure to market volatility, project delays, and other risks associated with real estate development. The illiquid nature of these investments further amplifies the challenges, as capital is often tied up for extended periods, limiting the company’s flexibility to redeploy resources. We believe the Company’s integrated approach, combining investment with the potential to secure construction contracts, will offset such risks by securing additional large-scale construction projects and potential revenue generated from the investments. Presently, our focus is on apartment complexes and townhouses, with a potential shift to mixed-use buildings, hotels and commercial properties in the future as our business expands and new opportunities are presented.
Residential Construction Segment
Our residential construction segment focuses on custom home builds, in addition to certain remodeling projects primarily in the South Florida region with a focus on superior craftsmanship and attention to detail. Some of our luxury residential projects also include state of the art equestrian facilities. We have focused more on growth of this segment to continue to diversify our service offerings. Our relationships with architects, engineers and designers create opportunities for these projects and we will continue to foster these relationships to continue growth in this division.
Strategic Goals
22
In addition to our expansion into key states such as Florida, Texas, and South Carolina, we have set forward-looking strategic milestones—including targeted market penetration rates, phased rollouts, and revenue growth objectives over the next 12 to 24 months—to overcome regional brand recognition challenges and establish a robust presence in these markets.
Recent Developments
On May 28, 2014, Mr. Joseph F. Basile, III formed JFB Construction & Development, a Florida corporation (the “JFB Subsidiary”). At the time of the formation, Mr. Basile held one hundred percent (100%) of the issued and outstanding shares of the JFB Subsidiary. Our headquarters is located in Lantana, Florida.
On April 9, 2024, Mr. Basile formed JFB Construction Holdings, a Nevada corporation, to create a parent holding company of the JFB Subsidiary, which currently serves as the Company’s operational entity. On July 18, 2024, all shareholders of the JFB Subsidiary entered into a Contribution and Exchange Agreement (the “Contribution and Agreement”) with JFB Construction Holdings to exchange their shares in the JFB Subsidiary for shares of JFB Construction Holdings. 100 shares of the JFB Subsidiary’s common stock were exchanged for 3,639,999 shares of our Class A Common Stock and 4,000,000 shares of our Class B Common Stock to JFB Subsidiary’s three shareholders. As a result, JFB Subsidiary became a wholly owned subsidiary of JFB Construction Holdings (the foregoing transactions are collectively referred to herein as the “Reorganization”).
On March 5,2025, the Company completed its initial public offering ("IPO"), issuing 2,500,000 units of Class A common stock. The IPO generated net proceeds of $4,667,636 after deducting underwriter discounts, commissions, and offering expenses.
On April 24, 2025, JFB Construction Holdings invested $1,000,000 in CM OB Hotel Owner, LLC, a Delaware limited liability company formed to acquire, develop, and operate a 117-room Courtyard by Marriott hotel in Olive Branch, Mississippi. The investment was made through a private placement offering of up to $5,000,000 in Class A Membership Interests at $1,000 per unit, pursuant to Regulation D, Rule 506(c). The minimum investment was $100,000, with proceeds designated for the acquisition, development, and operation of the hotel.
JFB holds a 19.5% ownership interest in the Class A Membership Interests of CM OB Hotel Owner, LLC. This ownership percentage is below the 20% threshold required for equity method accounting under U.S. GAAP; therefore, the investment is currently being carried at cost basis, as the entity is private.
Class A Members are entitled to an 8% cumulative, non-compounding preferred return (beginning upon hotel operations), a return of capital, and a share of distributable cash as outlined in the offering subscription agreement. Pursuant to a side agreement dated April 24, 2025, JFB Construction Holdings is exempt from the standard promote structure. The Company does not possess ownership or majority voting rights due to minimal investment in CM OB Hotel Owner, LLC. Furthermore, the Company does not exercise control over the activities that significantly influence the economic performance of CM OB Hotel Owner, LLC
On February 17, 2026 the Company entered into a definitive Merger Agreement with XTEND pursuant to which XTEND will acquire all of the outstanding equity interests of the Company, subject to the terms and conditions set forth in the agreement. The transaction is structured as a business combination and is expected to close following the satisfaction of customary closing conditions, including regulatory approvals and the effectiveness of XTEND’s registration statement. Under the terms of the Merger Agreement, the Company and XTEND will coordinate on all material corporate actions prior to closing, including equity issuances, compensation‑related grants, and other matters requiring XTEND’s consent. The Company continues to operate independently until the closing of the transaction.
Officer and Director Changes
On February 13, 2026, Bjarne Borg resigned from his position as a member of the Board of Directors of JFB Construction Holdings and from all committees of the Board, effective immediately. Mr. Borg’s resignation was not the result of any disagreement with management or the Board on any matter relating to the Company’s operations, policies, or practices.
On February 13, 2026, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, appointed Stefan Passantino to serve as a member of the Board, effective immediately. The Board also appointed Mr. Passantino to the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee.The Board affirmatively determined that Mr. Passantino is an independent director under applicable Nasdaq listing standards.The Board believes that Mr. Passantino’s
23
scholarship and experience make him well‑qualified to help lead the Company toward continued growth and success. Mr. Passantino does not have any family relationship with any current officer or director of the Company.There are no related party transactions with respect to Mr. Passantino that are reportable under Item 404(a) of Regulation S‑K. As compensation for his service as a member of the Board, Audit Committee, and Nominating and Corporate Governance Committee, Mr. Passantino will receive equity‑based compensation on the same terms as other independent members of the Board.
Our Financial Position
For the three Months Ended June 30, 2026 Compared to three Months Ended June 30, 2025
24
The following table summarizes the results of consolidated statements of operations and comprehensive income (loss) for the three months ended June 30, 2026 and 2025 in U.S. dollars, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
|
|
For the three Months Ended June 30 |
|
|
Change |
|
||||||
|
|
2026 |
|
|
2025 |
|
|
$ Amount |
|
|||
Revenues |
|
$ |
9,071,726 |
|
|
$ |
3,684,938 |
|
|
$ |
5,386,788 |
|
Cost of revenues |
|
|
7,738,127 |
|
|
|
3,427,403 |
|
|
|
4,310,724 |
|
Gross profit |
|
|
1,333,599 |
|
|
|
257,535 |
|
|
|
1,076,064 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Selling and marketing expense |
|
|
2,030,309 |
|
|
|
457,702 |
|
|
|
1,572,607 |
|
General and administrative |
|
|
3,261,027 |
|
|
|
2,157,263 |
|
|
|
1,103,764 |
|
Rent expense-related party |
|
|
86,580 |
|
|
|
54,406 |
|
|
|
32,174 |
|
Depreciation and amortization expense |
|
|
38,238 |
|
|
|
62,978 |
|
|
|
(24,740 |
) |
Total operating expenses |
|
|
5,416,154 |
|
|
|
2,732,349 |
|
|
|
2,683,805 |
|
Income(loss) from operations |
|
|
(4,082,555 |
) |
|
|
(2,474,814 |
) |
|
|
(1,607,741 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|||
Other income, (Expenses) |
|
|
(390 |
) |
|
|
39,138 |
|
|
|
(39,528 |
) |
Interest income |
|
|
76,492 |
|
|
|
66,422 |
|
|
|
10,070 |
|
Total other income (expense), net |
|
|
76,102 |
|
|
|
105,560 |
|
|
|
(29,458 |
) |
Net income (Loss) |
|
$ |
(4,006,453 |
) |
|
$ |
(2,369,254 |
) |
|
$ |
(1,637,199 |
) |
Revenues.
Revenues increased by $5,386,788, or 146%, to approximately $9,071,726 in the three months ended June 30, 2026 from approximately $3,684,938 for the three months ended June 30, 2025. The increase in revenue was principally driven by the Company's execution of larger real estate development projects, which contributed significantly higher contract values and construction activity during the period.
Cost of revenues
Cost of revenues increased $4,310,724, or 126%, to approximately $7,738,127 in the three months ended June 30, 2026 from approximately $3,427,403 for the three months ended June 30, 2025. The increase was primarily due to the higher level of construction activity associated with larger real estate development projects, and reflects a rise in direct project cost in parallel with the increase in revenue during the period.
Gross profit
Our gross profit increased by $1,076,064 or 418%, to $1,333,599 in the three months ended June 30, 2026 from $257,535 in the three months ended June 30, 2025. The increase in the gross profit was primarily attributable to the shift in project mix during the period, as the Company executed larger real estate development projects and had a significant increase in revenue during the period.
Selling and marketing expenses
Our selling and marketing expenses increased by $1,572,607, or 344%, to $2,030,309 in the three months ended June 30, 2026 from $457,702 in the three months ended June 30, 2025, primarily due to higher cost associated with increased advertising campaigns, expanded sales initiatives, and the launch of new marketing strategies aimed at enhancing brand visibility and customer acquisitions. In addition, expenses increased as the Company invested in awareness initiatives designed to strengthen recognition of the Company's trading symbol within the capital markets and broader investor community.
General and administrative expenses
25
Our general and administrative expenses primarily include salaries and benefits, professional fees, office expenses, travel expenses, and insurance expenses. General and administrative expenses increased by approximately $1,103,764 or 51%, to approximately $3,261,027 in the three months ended June 30, 2026 from approximately $2,157,263 in the three months ended June 30, 2025. The increase was mainly due to the enhancement of talent acquisition and retention. To support our growing operations and maintain high standards of service, we have invested in recruiting and training top talent. We have also increased our administrative infrastructure which includes our IT systems, increasing office staff and investing in new software and tools to enhance efficiency and support our operations. In addition, the increase in general and administrative expenses reflects board of directors compensation, increased legal expenses and higher rent expense. Our general and administrative expenses represented 36% and 59% of our total revenue for the three months ended June 30, 2026 and 2025, respectively.
Depreciation and amortization expenses
Depreciation and amortization expenses decreased by $24,740, or 39%, to $38,238 in the three months ended June 30, 2026 from $62,978 in the three months ended June 30, 2025, primarily due to the completion of depreciation on certain fully depreciated fixed assets and lower additions to depreciable assets during the period, resulting in a reduced depreciation base compared to the prior year.
Interest expenses
Our other income decreased by $39,528, or 100%, to $(390) in the three months ended June 30, 2026 from $39,138 in the three months ended June 30, 2025. The decrease is primarily attributable to a reduction in bank and credit-card fees and related miscellaneous income recognized during the current period.
Interest income
Our interest income increased by $10,070, or 15%, to $76,492 in the three months ended June 30, 2026 from $66,422 in the three months ended June 30, 2025. The increase in our interest income was the result of higher interest paid on bank balances. The improvement in these rates has led to higher earnings on interest-bearing deposits and cash balances held at Sea Coast Bank. The increase in interest income reflects the Company’s successful efforts to capitalize on improved banking terms and optimize its cash management practices. We continue to monitor interest rate trends and banking relationships to ensure sustained benefits from these favorable conditions.
Net loss
Our net loss increased by $1,637,199, or 69%, to $(4,006,453) in the three months ended June 30, 2026 from $(2,369,254) in the three months ended June 30, 2025, primarily due to an increase in our general and administrative expenses, including professional fees, insurance costs, marketing efforts and overhead associated with operational growth. The decline in net income also reflects the Company's continued investment in building the infrastructure required to support larger construction projects and public- company operations. These investments included expanded administrative staffing, enhancements to IT systems, increased board of directors' compensation, higher legal expenses and an increased rent expense associated with the expansion of our corporate headquarters. Additionally, selling and marketing expenses rose substantially due to advertising initiatives and public-company symbol awareness campaigns.
26
For the six Months Ended June 30, 2026 Compared to six Months Ended June 30, 2025
The following table summarizes the results of consolidated statements of operations and comprehensive income (loss) for the six months ended June 30, 2026 and 2025 in U.S. dollars, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
|
|
For the six months ended June 30 |
|
|
Change |
|
||||||
|
|
2026 |
|
|
2025 |
|
|
$ Amount |
|
|||
Revenues |
|
$ |
21,755,315 |
|
|
$ |
9,598,801 |
|
|
$ |
12,156,514 |
|
Cost of revenues |
|
|
19,127,184 |
|
|
|
7,871,900 |
|
|
|
11,255,284 |
|
Gross profit |
|
|
2,628,131 |
|
|
|
1,726,901 |
|
|
|
901,230 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Selling and marketing expense |
|
|
3,222,719 |
|
|
|
569,786 |
|
|
|
2,652,933 |
|
General and administrative |
|
|
6,629,071 |
|
|
|
3,442,970 |
|
|
|
3,186,101 |
|
Rent expense-related party |
|
|
167,819 |
|
|
|
90,190 |
|
|
|
77,629 |
|
Depreciation and amortization expense |
|
|
120,289 |
|
|
|
125,956 |
|
|
|
(5,667 |
) |
Total operating expenses |
|
|
10,139,898 |
|
|
|
4,228,902 |
|
|
|
5,910,996 |
|
Income(loss) from operations |
|
|
(7,511,767 |
) |
|
|
(2,502,001 |
) |
|
|
(5,009,766 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|||
Other income, (Expenses) |
|
|
(1,014 |
) |
|
49,138 |
|
|
|
50,152 |
|
|
Interest income |
|
|
248,712 |
|
|
|
113,916 |
|
|
|
134,796 |
|
Total other income (expense), net |
|
|
247,698 |
|
|
|
163,054 |
|
|
|
84,644 |
|
Net income (Loss) |
|
$ |
(7,264,069 |
) |
|
$ |
(2,338,947 |
) |
|
$ |
(4,925,122 |
) |
Revenues.
Revenues increased by $12,156,514, or 127%, to approximately $21,755,315 in the six months ended June 30, 2026 from approximately $9,598,801 for the six months ended June 30, 2025. The increase in revenue was principally driven by the Company's execution of larger real estate development projects, which contributed significantly higher contract values and construction activity during the period.
Cost of revenues
Cost of revenues increased $11,255,284, or 143%, to approximately $19,127,184 in the six months ended June 30, 2026 from approximately $7,871,900 for the six months ended June 30, 2025. The increase was primarily due to the higher level of construction activity associated with larger real estate development projects, and reflects a rise in direct project cost in parallel with the increase in revenue during the period.
Gross profit
Our gross profit increased by $901,230 or 52%, to $2,628,131 in the six months ended June 30, 2026 from $1,726,901 in the six months ended June 30, 2025. The increase in the gross profit was primarily attributable to the shift in project mix during the period, as the Company executed larger real estate development projects and had a significant increase in revenue during the period.
Selling and marketing expenses
Our selling and marketing expenses increased by $2,652,933, or 466%, to $3,222,719 in the six months ended June 30, 2026 from $569,786 in the six months ended June 30, 2025, primarily due to higher cost associated with increased advertising campaigns, expanded sales initiatives, and the launch of new marketing strategies aimed at enhancing brand visibility and customer acquisitions. In addition, expenses increased as the Company invested in awareness initiatives designed to strengthen recognition of the Company's trading symbol within the capital markets and broader investor community.
General and administrative expenses
27
Our general and administrative expenses primarily include salaries and benefits, professional fees, office expenses, travel expenses, and insurance expenses. General and administrative expenses increased by approximately $3,186,101 or 92%, to approximately $6,629,071 in the six months ended June 30, 2026 from approximately $3,442,970 in the six months ended June 30, 2025. The increase was mainly due to the enhancement of talent acquisition and retention. To support our growing operations and maintain high standards of service, we have invested in recruiting and training top talent. We have also increased our administrative infrastructure which includes our IT systems, increasing office staff and investing in new software and tools to enhance efficiency and support our operations. In addition, the increase in general and administrative expenses reflects board of directors compensation, increased legal expenses and higher rent expense. Our general and administrative expenses represented 30% and 36% of our total revenue for the six months ended June 30, 2026 and 2025, respectively.
Depreciation and amortization expenses
Depreciation and amortization expenses decreased by $5,667, or 4.5%, to $120,289 in the six months ended June 30, 2026 from $125,956 in the six months ended June 30, 2025, primarily due to the completion of depreciation on certain fully depreciated fixed assets and lower additions to depreciable assets during the period, resulting in a reduced depreciation base compared to the prior year.
Interest expenses
Our other income decreased by $50,152, or 102%, to $(1,014) in the six months ended June 30, 2026 from $49,138 in the six months ended June 30, 2025. The decrease is primarily attributable to a reduction in bank and credit-card fees and related miscellaneous income recognized during the current period.
Interest income
Our interest income increased by $134,796, or 118%, to $248,712 in the six months ended June 30, 2026 from $113,916 in the six months ended June 30, 2025. The increase in our interest income was the result of higher interest paid on bank balances. The improvement in these rates has led to higher earnings on interest-bearing deposits and cash balances held at Sea Coast Bank. The increase in interest income reflects the Company’s successful efforts to capitalize on improved banking terms and optimize its cash management practices. We continue to monitor interest rate trends and banking relationships to ensure sustained benefits from these favorable conditions.
Net loss
Our net loss increased by $4,925,122, or 211%, to $(7,264,069) in the six months ended June 30, 2026 from $(2,338,947) in the six months ended June 30, 2025, primarily due to an increase in our general and administrative expenses, including professional fees, insurance costs, marketing efforts and overhead associated with operational growth. The decline in net income also reflects the Company's continued investment in building the infrastructure required to support larger construction projects and public- company operations. These investments included expanded administrative staffing, enhancements to IT systems, increased board of directors' compensation, higher legal expenses and an increased rent expense associated with the expansion of our corporate headquarters. Additionally, selling and marketing expenses rose substantially due to advertising initiatives and public-company symbol awareness campaigns.
Cash Flows
The following table sets forth summary of our cash flows for the periods indicated:
|
|
Six Months Ended June 30 |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net cash provided by operating activities |
|
$ |
(1,231,194 |
) |
|
$ |
(2,113,291 |
) |
Net cash used in investing activities |
|
|
(30,475,743 |
) |
|
|
(1,034,438 |
) |
Net cash provided by (used in) financing activities |
|
|
14,469,858 |
|
|
|
5,221,386 |
|
Net (decrease) increase in cash |
|
|
(17,237,079 |
) |
|
|
2,073,657 |
|
Cash, beginning of the period |
|
|
25,208,384 |
|
|
|
2,696,183 |
|
Cash, end of the period |
|
$ |
7,971,305 |
|
|
$ |
4,769,840 |
|
Operating Activities
Net cash provided by operating activities was $(1,231,194) in the six months ended June 30, 2026, compared to cash provided in operating activities of approximately $(2,113,291) in the six months ended June 30, 2025. This is a 30% decrease primarily driven by higher accounts payable and contract liabilities.
28
Investing Activities
Net cash used in investing activities was $(30,475,743) in the six months ended June 30, 2026, compared to net cash used in investing activities of $(1,034,438) in the six months ended June 30, 2025. The significant increase in cash used during the period was primarily attributable to the $30,223,000 advance payment remitted to XTEND in connection with the merger agreement.
Financing Activities
Net cash provided by financing activities was $14,469,858 in the six months ended June 30, 2026, compared to net cash provided by financing activities of $5,221,386 in the six months ended June 30, 2025. The increase in net cash used in financing activities in the six months ended June 30, 2026 was primarily attributable to the net proceeds of $9,015,354 from its completed Private Investment in Public Equity(PIPE) and $4,954,424 in net proceeds from exercised warrants.
Liquidity and Capital Resources
Overview
The general objectives of our capital management strategy reside in the preservation of our capacity to continue operating, in providing benefits to our stakeholders and in providing an adequate return on investment to our shareholders by selling our products at a price commensurate with the level of operating risk assumed by us.
We thus determine the total amount of capital required consistent with risk levels. This capital structure is adjusted on a timely basis depending on changes in the economic environment and risks of the underlying assets. We are not subject to any externally imposed capital requirements.
Working Capital
As of June 30, 2026, we had cash of approximately $7,971,305. Our current assets were approximately $20,095,661 including approximately $7,356,418 in accounts receivable, approximately $4,394,807 in contract assets, $193,131 in prepaid expenses, and our current liabilities were approximately $6,545,089 including $2,745,566 in accounts payable, $1,590,251 contract liabilities, $312,233 in accrued expenses, $1,897,039 in lease liabilities which resulted in a positive working capital of $13,550,572.
Our primary source of cash is currently generated from our business. In the coming years, we will be looking to other sources, such as raising additional capital by issuing shares of stock, to meet our cash needs. While facing uncertainties regarding the size and timing of future capital raises, we are reasonably confident that we can continue to meet operational needs solely by utilizing cash flows generated from our operating activities.
Off-balance Sheet Commitments and Arrangements
There were no off-balance sheet arrangements for the six months ended June 30, 2026, that have, or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.
Critical Accounting Policies and Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which were prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, and expenses. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and those differences may be material.
While our significant accounting policies are more fully described in Note 2—Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements included in this annual report, we believe the following discussion addresses our most critical accounting policies, which are those that are most important to our financial condition and results of operations and which require our most difficult, subjective and complex judgments.
Principles of Consolidation
The consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of the Company and its wholly owned subsidiaries. The Company consolidates entities where it has a controlling financial interest, as defined by ASC 810, “Consolidation”.
29
In accordance with ASC 810-10, consolidation applies to:
All intercompany transactions and balances are eliminated in consolidation per ASC 810-10-45. The Company continuously evaluates its investments and relationships to assess consolidation requirements.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the recognition of revenues and expenses during the reporting period. Actual results may differ from these estimates, and such differences could be material.
In accordance with ASC 250-10-50-4, changes in estimates are recorded in the period in which they become known and are accounted for prospectively. The Company bases its estimates on historical experience, industry trends, and other relevant factors, incorporating both quantitative and qualitative assessments that it believes are reasonable under the circumstances.
Significant estimates for the six months ended June 30, 2026, and 2025, respectively, include:
Risks and Uncertainties
The Company operates in a highly competitive industry that is subject to intense market dynamics, shifting consumer demand, and economic fluctuations. The Company’s operations are exposed to significant financial, operational, and strategic risks, including potential business disruptions, supply chain constraints, and liquidity challenges.
In accordance with ASC 275, “Risks and Uncertainties,” the Company evaluates and discloses risks that could materially affect its financial condition, results of operations, and business outlook. Key factors contributing to variability in sales and earnings include:
Given these uncertainties, the Company faces challenges in accurately forecasting financial performance and may experience material risks affecting liquidity, business continuity, and long-term strategic growth. The Company continuously assesses these risks and implements measures to mitigate their potential impact.
Revenue from Contracts with Customers
30
Revenues and related costs on equipment contracts are recognized as the performance obligations for work are satisfied over time in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated profit will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). All un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss as it is determined.
In accordance with ASC 606-10-50-5, the Company identifies Revenue from Contracts with Customers using this 5- step model.
By treating our contracts as a single performance obligation, we ensure that our revenue recognition process accurately reflects the economic realities of our business operations across all segments. This approach provides clarity to stakeholders regarding our revenue-generating activities, aligning with the guidance provided in ASC 606-10-55-89 through 55-91.
In accordance with ASC 606-10-50-8, the Company has disclosed significant judgements and changes in judgements related to the recognition of revenue from construction contracts. The application of ASC 606 requires the use of judgment in various aspects of revenue recognition, particularly in the use of the cost-to-cost method. The Company applies the cost-to-cost method to measure progress toward completion. This involves estimating the total contract cost and recognizing revenue based on the ration of cost incurred to the estimated total cost. The Company makes judgements regarding the recognition of revenue related to change orders and claims. Revenue from change orders is included in the transaction price when it is probable the customer will approve the change and the amount can be reliably estimated.
In accordance with ASC 606-10-50-8, the Company recognizes contract assets and liabilities that reflect timing of revenue relative to the amounts billed or paid. Contract balances are reported in the balance sheet as follows:
Contract assets represent revenues recognized in excess of amounts billed on contracts in progress. Contract liabilities represent billings in excess of revenues recognized on contracts in progress. Assets and liabilities related to long-term contracts are included in current assets and current liabilities in the accompanying balance sheets, as they will be liquidated in the normal course of the contract completion.
31
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share.” The calculation of basic EPS follows the two-class method and is determined by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding, including certain other shares committed to be issued.
Basic Earnings Per Share (EPS)
Basic EPS is calculated using the two-class method, as prescribed by ASC 260-10-45-60, and is computed as follows:
The denominator includes common shares outstanding and certain other shares committed to be issued, such as restricted stock and restricted stock units (“RSUs”), for which no future service is required.
Diluted Earnings Per Share (EPS)
Diluted EPS is calculated under both the two-class method and the treasury stock method, and the more dilutive result is reported, as required by ASC 260-10-45-45.
Diluted EPS is computed by taking the sum of:
Net Loss Per Share Considerations
In computing net loss per share, unvested shares of common stock are excluded from the denominator, as required by ASC 260-10-45-48.
Participating Securities & Share-Based Compensation
Restricted stock and RSUs granted as part of share-based compensation contain nonforfeitable rights to dividends and dividend equivalents, respectively. Therefore:
Related Parties
32
The Company defines related parties in accordance with ASC 850, “Related Party Disclosures,” and SEC Regulation S-X, Rule 4-08(k). Related parties include entities and individuals that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company.
Related parties include, but are not limited to:
Entities with which the Company has significant transactions, where one party has the ability to exercise control or significant influence over the management or operating policies of the other.
A party is considered related if it has the ability to control or significantly influence the management or operating policies of the Company in a manner that could prevent either party from fully pursuing its own separate economic interests.
The Company discloses all material related party transactions, including:
Disclosures are made in accordance with ASC 850-10-50-1 through 50-6 and SEC Regulation S-X, Rule 4-08(k), which requires registrants to disclose material related party transactions and their effects on the financial position and results of operations.
Recent Accounting Standards
The Company adopted ASU 2023-07 on January 1, 2024. The adoption did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Standards Not Yet Adopted
ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, which enhances income tax disclosure requirements by:
This ASU is effective for annual periods beginning after December 15, 2024, and may be applied on a prospective or retrospective basis. Early adoption is permitted.
The Company is currently assessing the impact of ASU 2023-09 on its income tax disclosures and reporting requirements.
Other Accounting Standards Updates
The FASB has issued various technical corrections and industry-specific updates that are not expected to have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.
33
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of June 30, 2026, there were no material changes to the information provided under Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Form 10-K for the year ended December 31, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is accumulated and communicated to management including our principal executive officer/principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
Management has carried out an evaluation of the effectiveness of the design and operation of our company’s disclosure controls and procedures. Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective at a reasonable assurance level as of June 30, 2026.
The matters involving internal controls over financial reporting that may be considered material weaknesses included the small size of the Company and the resulting lack of segregation of duties. Specifically, the Company's system of internal controls failed to identify multiple journal entries that were subsequently identified by the Company's external auditor. Additionally, multiple errors within the Company's draft Form 10-Q were noted by the external auditor, further highlighting weakness in the control environment.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that occurred during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
34
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are involved in various claims and legal actions arising in the ordinary course of business. As of June 30, 2026, the Company is engaged in ongoing litigation with one customer related to an unpaid final contract balance of $110,444.. The customer has not remitted the outstanding amount. To secure the Company's interest, a claim of lien has been recorded on the project property, and the Company has initiated legal action against the customer personally to recover the full balance due.
ITEM 1A. RISK FACTORS
As a smaller reporting company, the Company is not required to disclose material changes to the risk factors that were contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as updated from time to time .
The recent imposition of tariffs by the U.S. government present several risk that could materially and adversely affect our business operations and financial performance.
Tariffs and changes in trade policy could increase our costs and negatively impact our margins and project performance. We continue to face risks from evolving U.S. trade policy, including existing and potential tariffs on key construction materials such as steel, aluminum, and other imported components. Increases in material costs due to tariffs or retaliatory trade measures may adversely affect our gross margins, particularly on fixed-price or lump-sum contracts where we may be unable to pass on such cost increases to our customers.
To the extent such cost increases are not recoverable or estimable in advance, we may be required to revise our cost forecasts under the percentage-of-completion method in accordance with ASC 606 (Revenue from Contracts with Customers), which could materially affect our operating results in the period of revision. In addition, supply chain disruptions from trade restrictions or extended lead times may delay project schedules and expose us to penalties or loss of revenue.
We are continuing to monitor developments in U.S. trade policy and their impact on material availability and pricing, and we may update our project pricing, sourcing strategies, or disclosure as necessary in future periods.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) Item 5.02 Departure of Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 13, 2026, Bjarne Borg resigned from his position as a member of the Board of Directors of JFB Construction Holdings and from all committees of the Board, effective immediately. Mr. Borg’s resignation was not the result of any disagreement with management or the Board on any matter relating to the Company’s operations, policies, or practices.
On February 13, 2026, the Board, upon the recommendation of the Nominating and Corporate Governance Committee, appointed Stefan Passantino to serve as a member of the Board, effective immediately. The Board also appointed Mr. Passantino to the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee.The Board affirmatively determined that Mr. Passantino is an independent director under applicable Nasdaq listing standards.The Board believes that Mr. Passantino’s scholarship and experience make him well‑qualified to help lead the Company toward continued growth and success. Mr. Passantino does not have any family relationship with any current officer or director of the Company.There are no related party transactions with respect to Mr. Passantino that are reportable under Item 404(a) of Regulation S‑K. As compensation for his service as a member of the Board, Audit Committee, and Nominating and Corporate Governance Committee, Mr. Passantino will receive equity‑based
35
compensation on the same terms as other independent members of the Board.
Item 8.01. Other Events.
On January 16, 2026, pursuant to the approval of the Board, upon the recommendation of the Compensation Committee of the Board, the Company issued, under the 2024 Equity Incentive Plan, shares of the Company’s common stock registered under the Company’s Registration Statement on Form S-8, filed with the SEC on June 17, 2025, as follows: (i) 20,000 shares to Jamie Zambrana, Director; (ii) 20,000 shares to Nelson Garcia, Director; (iii) 20,000 shares to Miklos Gulyas, Director; (iv) 20,000 shares to Bjarne Borg, Director; (v) 20,000 shares to Christopher Melton Director; and (vi) 20,000 shares to David Clukey, Director.
(b) There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the Company last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K .
(c) During the registrant’s last fiscal quarter,
36
ITEM 6. EXHIBITS
Exhibit Number |
|
Description of Document |
1.1** |
|
Form of Underwriting Agreement |
3.1** |
|
Amended and Restated Articles of Incorporation of the Company dated September 30, 2024 |
3.2** |
|
Bylaws of the Company dated September 26, 2024 |
4.1** |
|
Specimen Stock Certificate evidencing the shares of Class A Common Stock |
4.3** |
|
Form of Representative's Warrants |
4.4** |
|
Form of Representative's Warrants |
4.5** |
|
Form of Offering Warrants |
10.1** |
|
Contributions and Shares Exchange Agreement dated July 18,2024, by and among JFB Construction Holdings and the shareholders of JFB Construction & Development, Inc |
10.2** |
|
Employment Agreement dated July 18, 2024 between the Company and Joseph F. Basile III |
10.3** |
|
Employment Agreement dated July 18, 2024 between the Company and Ruben Calderon |
10.4** |
|
2024 Equity Incentive Plan |
10.5** |
|
Loose Cannon Lease Agreement dated March 29, 2024 by and between the Company and Aura Commercial, LLC |
10.6** |
|
Construction Agreement dated July 18, 2024 by and between the Company and Chartered Services, LLC |
10.7** |
|
Aura Commercial Lease Agreement dated March 29, 2024 by and between the Company and Aura Commercial, LLC |
10.8** |
|
Construction Agreement dated July 18, 2024 and between the Company and Rare Capital Partners, LLC |
10.9** |
|
Consulting Agreement with Chartered Services, LLC dated July 17, 2024 by and between the Company and Chartered Services, LLC |
10.10** |
|
Form Construction Contract |
10.11** |
|
Form Officer and Director Indemnification Agreement |
10.12** |
|
Amendment to Lease Agreement by and between the Company and Aura Commercial, LLC |
10.13** |
|
Amendment to Consulting Agreement with Chartered Services, LLC |
10.14** |
|
Amended and Restated Employment Agreement dated February 1, 2025 between the Company and Joseph F. Basile III |
10.15** |
|
Amended and Restated Employment Agreement dated February1, 2025 between the Company and Ruben Calderon |
14.1** |
|
Code of Conduct |
21.1** |
|
List of Subsidiaries |
31.1* |
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
** Previously Filed
37
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
|
JFB CONSTRUCTION HOLDINGS |
|
|
|
|
Dated: August 13, 2026
|
By: |
//s/ Joseph F. Basile III |
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Joseph F. Basile III |
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Chief Executive Officer (Principal Executive Officer) |
Name |
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Title |
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Date |
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/s/ Joseph F. Basile III |
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Chief Executive Officer and Director |
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Joseph F. Basile III |
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Principal Executive Officer |
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August 13, 2026 |
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/s/ Ruben Calderon |
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Chief Financial Officer |
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Ruben Calderon |
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Principal Financial Officer and Principal Accounting Officer |
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August 13, 2026 |
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/s/ Nelson Garcia |
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Nelson Garcia |
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Director |
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August 13, 2026 |
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/s/ Stefan Passantino |
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Stefan Passantino |
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Director |
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August 13, 2026 |
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/s/ Christopher Melton |
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Christopher Melton |
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Director |
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August 13, 2026 |
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/s/ Jamie Zambrana
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Jamie Zambrana
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Director
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August 13, 2026
|
/s/ David Clukey |
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David Clukey |
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Director |
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August 13, 2026 |
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/s/ Miklos Gulyas |
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Director |
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August 13, 2026 |
Miklos "John" Gulyas |
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