{"url_path":"/sec/jfb/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 Certain Relationships and Related Transactions, and Director Independence.**","topic":"sec","document":{"doc_type":"10-K/A","doc_date":"2026-06-17","source_url":"https://www.sec.gov/Archives/edgar/data/2024306/0001493152-26-028959-index.html","accession_number":"0001493152-26-028959","cik":"0002024306","ticker":"JFB","issuer_name":"JFB Construction Holdings","edgar_url":"https://www.sec.gov/Archives/edgar/data/2024306/0001493152-26-028959-index.html","primary_entity_key":"0002024306","primary_entity_name":"JFB Construction Holdings"},"word_count":2384,"has_tables":true,"body_markdown":"**Item\n13. Certain Relationships and Related Transactions, and Director Independence.**\n\n** **\n\nThe\nCompany has established policies and other procedures regarding approval of transactions between the Company and any employee, officer,\ndirector, and certain of their family members and other related persons. These policies and procedures are generally not in writing but\nare evidenced by long standing principles adhered to by our Board. The disinterested members of the Board review, approve and ratify\ntransactions that involve “related persons” and potential conflicts of interest. Related persons must disclose to the disinterested\nmembers of the Board any potential related person transactions and must disclose all material facts with respect to such transaction.\nAll such transactions will be reviewed by the disinterested members of the Board and, in their discretion, approved or ratified. In determining\nwhether to approve or ratify a related person transaction the disinterested members of the Board will consider the relevant facts and\ncircumstances of the transaction, which may include factors such as the relationship of the related person with the Company, the materiality\nor significance of the transaction to the Company and the related person, the business purpose and reasonableness of the transaction,\nwhether the transaction is comparable to a transaction that could be available to the Company on an arms-length basis, and the impact\nof the transaction on the Company’s business and operations.\n\n \n\n**CERTAIN\nRELATIONSHIPS AND RELATED PARTY TRANSACTIONS**\n\n** **\n\nThe\nfollowing includes a summary of transactions from December 31, 2021 through the date of this 10K, in which the amount involved in the\ntransaction exceeds the lesser or $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years,\nbetween us and enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under\ncommon control with: (a) us, (b) our directors; (c) individuals owning, directly or indirectly, an interest in the voting power of the\nCompany that gives them significant influence over the Company, and close members of any such individual’s family; (d) key management\npersonnel, that is, those persons having authority and responsibility for planning, directing and controlling the activities of the Company,\nincluding senior management of companies and close members of such individuals’ families; and (e) enterprises in which a substantial\ninterest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able\nto exercise significant influence. Except as disclosed herein, we are not otherwise a party to a current related party transaction, and\nno transaction is currently proposed, in which the amount of the transaction exceeds the lesser of $120,000 or 1% of the average of our\ntotal assets at year-end for the last two completed fiscal years and in which a related person had or will have a direct or indirect\nmaterial interest.\n\n \n\nOn\nAugust 4, 2021 we entered into an agreement to build a 2-story commercial building for Aura Commercial LLC, which is now the Company’s\nheadquarters. Joseph F. Basile III, our Chief Executive Officer, is the president of Aura Commercial LLC and owns 100% of the entity.\nThe contract was a cost plus 5% model. We incurred $912,331 . in billable expenses as of December 31,2024. We received $904,014 as of\nDecember 31,2024 in construction income from Aura Commercial LLC.\n\n \n\nOn\nJanuary 1, 2022, we entered into a two-year lease with Loose Cannon, LLC pursuant to which we leased our previous corporate headquarters,\nwith an option for an additional two-year renewal. Joseph F. Basile III, our Chief Executive, is an officer and member of Loose Cannon,\nLLC. The lease provided for a base monthly rent of $3,210 at the beginning of the term of the lease which increased by 2.5%. We occupied\napproximately 3,521 square feet of the building’s approximately 7,042 square feet. This lease was terminated December 1, 2024.\nTotal rent expense under this related party agreement was $35,310 for the year ended December 31, 2024.\n\n \n\nOn\nMarch 14, 2024 we were awarded a $21million project with Rare Capital Partners LLC to build a 79-unit-townhome rental community with\nan additional community clubhouse in Port Salerno FL. Our Chief Executive Officer Joseph F. Basile III owns 42.25% of Rare Capital Partners\nand co-manages Rare Capital Partners through Basile Family Investments LLC. Jamie Zambrana on the board of directors owns 8.54% of Rare\nCapital Partners and co-manages Rare Capital Partners through Sebastian Pail Investments, Inc. Nelson Garcia, a board of directors owns\n8.54% through NBG Investments, Inc. Nelson Garcia does not, individually or through an entity, control the day-to-day operations of Rare\nCapital Partners LLC and is solely a minority owner. This project is under permitting and has not begun construction. However, on or\nabout September 1, 2021, in accordance with an oral agreement, JFB paid for engineering fees related to this project, in association\nwith its general contracting services being rendered, in the amount of $120,696. Rare Capital Partners paid the $120,696 balance on September\n30,2024. Construction on the project commence on June 1, 2025, with sire preparation underway. The project is currently under vertical\nconstruction. As of December 31, 2025 the Company has recorded $4,468,064 in related party sales associated with this project, along\nwith $4,245,041 in related party cost of goods sold.\n\n \n\n49\n\n \n\n \n\nWe\nlease our current corporate headquarters under a 7-year lease with Aura Commercial, LLC. Joseph F. Basile III, our Chief Executive Officer,\nis President of Aura Commercial, LLC and owns 100% of the entity. The lease was effective on March 29, 2024, with rent commencing on\nJune 1, 2024, and provides for a base monthly rent of $11,928 with 2.5% adjustment increases per year. We presently occupy approximately\n4,473 square feet of the building’s approximately 8,991 square feet. We have an option to purchase the entire property for $4,250,000\nuntil December 1, 2024. The building was never acquired. Total rent expense under this related party agreement was $167,950 and $47,912\nfor the years ended December 31,2025 and December 31, 2024, respectively.\n\n \n\nOn\nApril 30, 2024, Joseph F. Basile III gifted 81.25 shares of common stock in the JFB Subsidiary to The Basile Family Irrevocable Trust\nand 0.625 shares of common stock in the JFB Subsidiary to another individual. Lisa Ann Basile, Joseph F. Basile III’s mother, is\nthe trustee with control over The Basile Family Irrevocable Trust.\n\n \n\nOn\nJuly 18, 2024, all shareholders of the JFB Subsidiary entered into the Contribution and Exchange Agreement with JFB Construction Holdings\nto exchange their shares in the JFB Subsidiary for shares of JFB Construction Holdings. 200 shares of the JFB Subsidiary’s common\nstock were exchanged for 7,280,000 shares of our Class A Common Stock and 8,000,000 shares of our Class B Common Stock to JFB Subsidiary’s\nthree shareholders. After the Reorganization, JFB Construction and Development Inc., a Florida corporation, is now a 100% owned subsidiary\nof JFB Construction Holdings, a Nevada corporation, and Mr. Joseph F. Basile III and the Basile Family Irrevocable Trust owned 57% (8,730,000\nshares) and 43% (6,500,000 shares) of equity interest in JFB Construction Holdings, respectively.\n\n \n\nOn\nMay 1, 2025, the Company entered into a Construction agreement as general contractor and co-developer for a new Courtyard by Marriott\nhotel in Olive Branch, Mississippi. The project includes the development of a 117- room hotel. As of December 31, 2025, the Company recognized\nrevenue of $1,433,888 and associated cost of goods sold of $1,412,942 related to this project.\n\n \n\nThe\nCEO of the Company, Joseph Basile, has at times taken distributions from the JFB Subsidiary. For the year ended December 31, 2025 and\nDecember 31, 2024, the distributions were $0 and $872,007, respectively. At times, the CEO of the Company makes contributions to the\ncompany. For the year ended December 31,2025 the contributions were $1,000. There were $0 Contributions for the year ended December 31,2024.\n\n \n\nOn\nSeptember 5, 2025, the Company deposited $25,000 into an escrow account to facilitate a 45-day review period for a potential construction\nproject involving a related party. The funds were intended to allow the Company sufficient time to evaluate the scope of work and obtain\napproval from the Audit Committee. On October 9, 2026, the Company deposited $25,000 into the same escrow account for an additional 45\nday review extension. The deposit is fully refundable should the project not proceed. This transaction is considered a related party\narrangement as one of the Company’s directors owns the land on which the proposed project would be developed.\n\n \n\nOn\nJune 30, 2025, the Company issued 120,000 shares of its Class A Common Stock to Joseph Basile III pursuant to the Company’s 2024\nEquity Incentive (ESOP) Plan. The issuance was made in recognition of Mr. Basile’s continued service and performance contributions\nand was granted in accordance with the terms and conditions of the ESOP. The shares were issued as fully paid, and are reflected in the\naccompanying financial statements for the period ended December 31, 2025.\n\n \n\nOn\nJune 30, 2025, the Company issued 50,000 shares of its Class A Common Stock to Ruben Calderon pursuant to the Company’s 2024 Equity\nIncentive (ESOP) Plan. The issuance was made in recognition of Mr. Calderon’s continued service and performance contributions and\nwas granted in accordance with the terms and conditions of the ESOP. The shares were issued as fully paid, and are reflected in the accompanying\nfinancials statements for the period ended December 31, 2025. In addition, during the year ended December 31, 2025, the Company issued\nan aggregate of 3,334 shares of Common Stock to Mr. Calderon as part of his bonus compensation under his 2025 Executive Employment Agreement.\nThese shares were issued in two tranches: 1,694 shares on October 14, 2025, and 1,6400 shares on December 15, 2025. The issuances were\napproved by the Board of Directors and represent non-cash compensation earned upon achievement of the performance milestones specified\nin his agreement.\n\n \n\nTo\nthe best of our knowledge, during the past two fiscal years, other than as set forth above, there were no material transactions, or series\nof similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are to be a party,\nin which the amount involved exceeds $120,000, and in which any director or executive officer, or any security holder who is known by\nus to own of record or beneficially more than 5% of any class of our common stock, or any member of the immediate family of any of the\nforegoing persons, has an interest (other than compensation to our officers and directors in the ordinary course of business).\n\n \n\n50\n\n \n\n \n\n**Indemnification\nAgreements**\n\n** **\n\nWe\nhave entered or intend into indemnification agreements with each of our directors and executive officers. These indemnification agreements\nprovide the directors and executive officers with contractual rights to indemnification and expense advancement that are, in some cases,\nbroader than the specific indemnification provisions contained under Nevada law or under relevant employment agreements.\n\n \n\n**Related\nPersons Transaction Policy**\n\n** **\n\nPrior\nto December 2, 2024, we did not have a formal policy regarding approval of transactions with related parties. We adopted a related person\ntransaction policy on December 2, 2024 that sets forth our procedures for the identification, review, consideration and approval or ratification\nof related person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship,\nor any series of similar transactions, arrangements, or relationships, in which we and any related person are, were or will be participants\nin which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end. Transactions involving\ncompensation for services provided to us as an employee or director are not covered by this policy. A related person is any executive\nofficer, director, or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family\nmembers and any entity owned or controlled by such persons.\n\n \n\nUnder\nthe policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person\ntransaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to\nconsummation, our management must present information regarding the related person transaction to our audit committee, or, if audit committee\napproval would be inappropriate, to another independent body of our board of directors, for review, consideration and approval or ratification.\nThe presentation must include a description of, among other things, the material facts, the interests, direct and indirect, of the related\npersons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to\nor from, as the case may be, an unrelated third party or to or from employees generally. Under the policy, we will collect information\nthat we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable\nus to identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under the\nCode of Business Conduct , our employees and directors will have an affirmative responsibility to disclose any transaction or relationship\nthat reasonably could be expected to give rise to a conflict of interest. In considering related person transactions, our audit committee,\nor other independent body of our board of directors, will take into account the relevant available facts and circumstances including,\nbut not limited to:\n\n \n\n●\nthe risks, costs and benefits to us;\n\n \n\n●\nthe impact on a director’s independence in the event that the related person is a director, immediate family member of a director\nor an entity with which a director is affiliated;\n\n \n\n●\nthe availability of other sources for comparable services or products; and\n\n \n\n●\nthe terms available to or from, as the case may be, unrelated third parties or to or from employees generally.\n\n \n\nThe\npolicy requires that, in determining whether to approve, ratify or reject a related person transaction, our audit committee, or other\nindependent body of our board of directors, must consider, in light of known circumstances, whether the transaction is in, or is not\ninconsistent with, our best interests and those of our stockholders, as our audit committee, or other independent body of our board of\ndirectors, determines in the good faith exercise of its discretion."}