{"url_path":"/sec/jfb/10-k/2026/item-7a","section_key":"item-7a","section_title":"Item 7A Quantitative and Qualitative Disclosures About Market Risk.**","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":13434,"has_tables":true,"body_markdown":"**Item\n7A. Quantitative and Qualitative Disclosures About Market Risk.**\n\n** **\n\n**Risks\nAssociated with Our Business**\n\n** **\n\nOur\nbusiness is subject to a number of risk and uncertainties. We believe these factors include, but are not limited to, those more fully\ndescribed in “*Risk Factors*”, elsewhere in this annual report. We urge you to read “Risk Factors” beginning\non page 9 and this annual report in full. Or summary of significant risks includes, but is not limited, to the following:\n\n \n\n●Our\nmanagement team has no experience operating a company with publicly traded shares.\n\n   \n\n●We\nlack formalized policies and procedures to ensure adequate board and management oversight\nof financial reporting, risk management, and regulatory compliance.\n\n   \n\n●Economic\nconditions that impact consumer spending may have a material adverse effect on our business,\nand our partners’ business.\n\n   \n\n●We\ncurrently maintain all our cash and cash equivalents with one financial institution. As of\nJune 16, 2026, our cash balance in excess of FDIC limit at Seacoast National Bank was $10,818,120.\n\n   \n\n●We\nface intense competition in our industry, including from some competitors that have greater\nfinancial and marketing resources.\n\n   \n\n●We\nwill experience significant risks while attempting to enter the real estate development market.\n\n   \n\n●Our\nfuture expansion plans are subject to uncertainties and risks.\n\n   \n\n●Supply\nproblems, termination or interruption of supply arrangements or increases in the cost of\nproducts could have a material adverse effect on our business.\n\n \n\n36\n\n \n\n \n\n●We\nmay require additional capital which may not be available.\n\n   \n\n●Our\nbusiness depends on the continued contributions made by Mr. Basile, our founder, Chairman\nand Chief Executive Officer.\n\n   \n\n●Our\nbusiness depends on the efforts of our management, and our business may be severely disrupted\nif we lose their services.\n\n   \n\n●We\nare subject to laws, rules and regulations regarding product safety, health, environmental\nand noise pollution, and other issues.\n\n   \n\n●If\nlawsuits are brought against us, we may incur substantial liabilities.\n\n   \n\n●Our\ninsurance may not be sufficient.\n\n   \n\n●We\nhave not made use of confidentiality agreements in the past and, although we intend to rely\non such agreements in future dealings with employees, consultants, and other parties, the\nprior lack or the breach of such agreements could adversely affect our business and results\nof operations.\n\n   \n\n●Natural\ndisasters, unusually adverse weather, pandemic outbreaks, boycotts, and geo-political events\ncould materially and adversely affect our business.\n\n   \n\n●Our\nability, or lack thereof, to establish strategic partnerships and expand our operations may\nadversely affect our business and our plans.\n\n   \n\n●There\nis no existing market for our securities, and we do not know if one will develop.\n\n   \n\n●The\nmarket price of our common stock is likely to be highly volatile, and you could lose all\nor part of your investment.\n\n   \n\n●We\nhave no current plans to pay cash dividends on our common stock for the foreseeable future.\n\n   \n\n●You\nmay experience substantial dilution in the future.\n\n   \n\n●We\nwill incur significantly increased costs as a result of operating as a public company and\nwill be required to devote substantial time to compliance initiatives.\n\n   \n\n●As\nan “emerging growth company” under applicable law, we will be subject to lessened\ndisclosure requirements, which could leave our stockholders with less information or fewer\nrights available to stockholders of more mature companies.\n\n   \n\n●If\nsecurities or industry analysts do not publish or cease publishing research or reports about\nus, our business, or our market, or if they change their recommendations regarding our common\nstock adversely, the price of our common stock and trading volume could decline.\n\n   \n\n●Anti-takeover\nprovisions in our Articles of Incorporation and Bylaws and Nevada law could discourage, delay,\nor prevent a change in control of our company and may affect the trading price of our common\nstock.\n\n   \n\n●Failure\nto establish and maintain effective internal controls in accordance with Section 404 of the\nSarbanes-Oxley Act could have a material adverse effect on our business and stock price.\n\n   \n\n●Our\nsubcontractors may fail to satisfy their obligations to us or other parties, or we may be\nunable to maintain these relationships, either of which may have a material adverse effect\non our business, financial condition, results of operations, profitability, cash flows and\ngrowth prospects.\n\n   \n\n●An\ninability to obtain bonding could limit the aggregate dollar amount of contracts that we\nare able to pursue.\n\n   \n\n●Our\nfailure to comply with the regulations of Occupational Safety and Health Administration (“OSHA”)\nand state and local agencies that oversee transportation and safety compliance could adversely\naffect our business, financial condition, results of operations, profitability, cash flows\nand growth prospects.\n\n   \n\n●A\nchange in tax laws or regulations of any federal or state jurisdiction in which we operate\ncould increase our tax burden and otherwise adversely affect our business, financial condition,\nresults of operations, and cash flows.\n\n   \n\n●Tariffs\nby the U.S. government on imports from Canada, Mexico, and China could materially and adversely\naffect our business operations and financial performance.\n\n   \n\n●We\nhave broad discretion as to the use of the net proceeds from recent offerings and may not\nuse them effectively.\n\n   \n\n●The\nnature of our contracts, particularly those that are fixed-price, subjects us to risks associated\nwith cost overruns, operating cost inflation and potential claims for liquidated damages.\n\n \n\n37\n\n \n\n \n\n**INDEX\nTO CONSOLIDATED FINANCIAL STATEMENTS**\n\n \n\n[Report of Independent Registered Public Accounting Firm](#DB_001) PCAOB ID 2738\nF-2\n\n[Consolidated Balance Sheets as of December 31, 2025and 2024](#DB_004)\nF-4\n\n[Consolidated Statements of Income for the Years ended December 31, 2025 and 2024](#DB_005)\nF-5\n\n[Consolidated Statements of Changes in Shareholders’ Equity for the Years ended December 31, 2025and 2024](#DB_002)\nF-6\n\n[Consolidated Statements of Cash Flows for the Years ended December 31, 2025and 2024](#DB_006)\nF-7\n\n[Notes to Consolidated Financial Statements](#DB_003)\nF-8\n\n \n\nF-1\n\n \n\n \n\nREPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM\n\n \n\nTo\nthe Board of Directors and\n\nStockholders\nof JFB Construction Holdings\n\n \n\n**Opinion\non the Financial Statements**\n\n** **\n\nWe\nhave audited the accompanying consolidated balance sheets of JFB Construction Holdings (the Company) as of December 31, 2025 and 2024,\nand the related consolidated statements of income, changes in shareholders’ equity, and cash flows for the years ended December\n31, 2025 and 2024, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated\nfinancial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024,\nand the results of its operations and its cash flows for the years ended December 31, 2025 and 2024, in conformity with accounting principles\ngenerally accepted in the United States of America.\n\n \n\n**Basis\nfor Opinion**\n\n \n\nThese\nfinancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s\nfinancial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board\n(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities\nlaws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe\nconducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain\nreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company\nis not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit,\nwe are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion\non the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.\n\n \n\nOur\naudit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or\nfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding\nthe amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant\nestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides\na reasonable basis for our opinion.\n\n \n\n**Critical\nAudit Matters**\n\n \n\nThe\ncritical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that\nwas communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material\nto the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication\nof critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are\nnot, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or\ndisclosures to which it relates.\n\n \n\n*Revenue\nRecognition*\n\n \n\nAs\ndiscussed in the footnotes to the consolidated financial statements, the Company recognizes revenue on construction projects in which\nthe performance obligation is satisfied over time.\n\n \n\nAuditing\nmanagement’s evaluation of cost to complete v/s cost incurred on long term contracts involves significant judgment.\n\n \n\nTo\nevaluate the appropriateness and accuracy of the assessment by management, we evaluated management’s past history with cost estimation,\ncompleted job profitability, observation and or conformation of the progress related to certain jobs and testing of the underling inputs\nand data.\n\n \n\n/s/\nM&K CPAS, PLLC\n \n\n \n \n\nWe\nhave served as the Company’s auditor since 2023.\n \n\n \n \n\nThe\nWoodlands, TX\n \n\n \n \n\nMarch\n31, 2026\n \n\n \n\nF-2\n\n \n\n \n\n**JFB\nCONSTRUCTION HOLDINGS AND SUBSIDIARIES**\n\n**CONSOLIDATED\nBALANCE SHEETS**\n\n** **\n\n  \nDecember 31, 2025  \nDecember 31, 2024 \n\n  \nYear Ended \n\n  \nDecember 31, 2025  \nDecember 31, 2024 \n\nASSETS \n    \n   \n\nCash \n$22,208,384  \n$2,696,183 \n\nRestricted Cash \n 3,000,000  \n   \n\nContract Receivables \n 9,243,354  \n 3,047,255 \n\nContract Assets \n 2,630,561  \n 1,213,614 \n\nPrepaid Expenses \n 218,579  \n 166,527 \n\nContract Assets- Related Party \n -  \n — \n\nContract Assets \n -  \n — \n\nTOTAL CURRENT ASSETS \n 37,300,878  \n 7,123,579 \n\n  \n    \n   \n\nNET PROPERTY AND EQUIPMENT \n 996,771  \n 1,021,930 \n\n  \n    \n   \n\nOther Assets- Related Party \n 50,000  \n - \n\nRIGHT-OF-USE ASSETS-RELATED PARTY \n 686,053  \n 819,529 \n\n  \n    \n   \n\nInvestment in Class A Common Stock \n 1,000,000  \n - \n\n  \n    \n   \n\nTOTAL ASSETS \n**$****40,033,702**  \n**$****8,965,038** \n\n  \n    \n   \n\nLIABILITIES \n    \n   \n\nAccounts payable and other payables \n$978,103  \n$1,102,686 \n\nAccrued expenses \n 136,731  \n 79,270 \n\nContract liabilities \n 383,869  \n 633,794 \n\nRelated Party Payables \n -  \n — \n\nLease liability-related party \n 700,161  \n 819,529 \n\nTOTAL CURRENT LIABILITIES \n 2,198,864  \n 2,635,279 \n\n  \n    \n   \n\nSHAREHOLDER’S EQUITY \n    \n   \n\nPreferred stock, $0.0001 par value, 20,000,000 shares authorized; 4,389,500 shares issued and outstanding. \n 439  \n — \n\nClass A Common stock, $0.0001 par value, 372,000,000 shares authorized; 12,603,900 and 8,000,000 issued and outstanding as of December 31,2025 and December 31,2024 \n 1,260  \n 800 \n\nClass B Common stock, $0.0001 par value, 8,000,000 shares authorized; 0\nshares issued and outstanding as of December 31, 2025 and 8,000,000 as of December 31,2024 \n -  \n 800 \n\nCommon stock, value \n -  \n 800 \n\nAdditional paid in Capital \n 37,200,867  \n 424,336 \n\nAccumulated deficit \n 632,272  \n 5,903,823 \n\nTotal SHAREHOLDER’S EQUITY \n 37,834,838  \n 6,329,759 \n\n  \n    \n   \n\nTOTAL LIABILITIES AND SHAREHOLDER EQUITY \n$40,033,702  \n**$****8,965,038** \n\n** **\n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-3\n\n \n\n \n\n**JFB\nCONSTRUCTION HOLDINGS AND SUBSIDIARIES**\n\n**CONSOLIDATED\nSTATEMENTS OF INCOME**\n\n** **\n\n  \nDecember 31, 2025  \nDecember 31, 2024 \n\n  \nYear Ended \n\n  \nDecember 31, 2025  \nDecember 31, 2024 \n\nSales \n$24,639,491  \n$22,183,871 \n\nSales – Related Parties \n 5,901,952  \n 904,014 \n\nSales \n 5,901,952  \n 904,014 \n\nCost of Goods Sold \n 21,733,180  \n 17,140,993 \n\nCost of Goods Sold – Related Parties \n 5,657,983  \n 912,331 \n\nCost of Goods Sold \n 5,657,983  \n 912,331 \n\nGross Profit \n 3,150,280  \n 5,034,561 \n\n  \n    \n   \n\nOperating Expenses \n    \n   \n\nSelling and marketing expenses \n 1,011,092  \n 51,635 \n\nGeneral and administrative expense \n 7,373,892  \n 4,836,781 \n\nRent Expense-related party \n 167,950  \n   \n\nDepreciation and amortization expense \n 251,913  \n 179,649 \n\nTotal Operating Expense \n 8,804,847  \n 5,068,065 \n\n  \n    \n   \n\nIncome(Loss) from Operations \n (5,654,567) \n (33,504)\n\n  \n    \n   \n\nOTHER INCOME (EXPENSE) \n    \n   \n\nOther Income (Expenses) \n (124,053) \n (8,142)\n\nInterest expense \n (489) \n (32,649)\n\nInterest Income \n 506,558  \n 193,300 \n\n  \n    \n   \n\nTOTAL OTHER INCOME \n 382,016  \n 152,509 \n\n  \n    \n   \n\nNET INCOME (LOSS) \n$(5,272,551) \n$119,005 \n\n  \n    \n   \n\nEarnings Per Share \n    \n   \n\nBasic and Diluted Common Share \n$(0.31) \n$0.01 \n\n  \n    \n   \n\nWeighted- Average Common Shares Outstanding, Basic and Diluted \n 16,968,640  \n 15,608,524 \n\n** **\n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-4\n\n \n\n** **\n\n**JFB\nCONSTRUCTION HOLDINGS AND SUBSIDIARIES**\n\n**CONSOLIDATED\nSTATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY**\n\n**For\nthe Years Ended December 31, 2025 and 2024**\n\n \n\n- \nShares  \nPar Value  \nShares  \nPar Value  \nShares  \nPar Value  \nCapital  \nRetained Earnings  \nTotal \n\n \nClass A Common Stock  \nClass B Common Stock  \nClass C Preferred Stock  \nAdditional\nPaid-In \n  \n \n\n \nShares  \nPar Value  \nShares  \nPar Value  \nShares  \nPar Value  \nCapital  \nRetained Earnings  \nTotal \n\nBalance, December 31, 2023 \n 7,280,000  \n$728  \n 8,000,000  \n$800  \n -  \n -  \n$31,759  \n$6,656,825  \n$6,690,112 \n\nDistributions 2024 \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n (872,007) \n (872,007)\n\nIssuance of Common stock for services \n 720,000  \n 72  \n -  \n -  \n -  \n -  \n 359,928  \n -  \n 360,000 \n\nImputed Interest \n -  \n -  \n -  \n -  \n -  \n -  \n 32,649  \n -  \n 32,649 \n\nNet income 2024 \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 119,005  \n 119,005 \n\n  \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\nBalance, December 31, 2024 \n 8,000,000  \n$800  \n 8,000,000  \n$800  \n -  \n -  \n$424,336  \n$5,903,823  \n$6,329,759 \n\nBalance \n 8,000,000  \n$800  \n 8,000,000  \n$800  \n -  \n -  \n$424,336  \n$5,903,823  \n$6,329,759 \n\n  \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\nContributions 2025 \n -  \n -  \n -  \n -  \n -  \n -  \n -  \n 1,000  \n 1,000 \n\nProceeds from Issuance of Common stock, net \n 2,500,000  \n 250  \n -  \n -  \n -  \n -  \n 4,667,386  \n -  \n 4,667,636 \n\nProceeds from Exercise of Warrants \n 1,223,094  \n 122  \n -  \n -  \n -  \n -  \n 3,363,386  \n -  \n 3,363,508 \n\nShares issued for Service \n 511,094  \n 52  \n -  \n -  \n -  \n -  \n 1,208,734  \n -  \n 1,208,786 \n\nProceeds from Issuance of Preferred Stock C series,net \n -  \n -  \n -  \n -  \n 4,389,500  \n 439  \n 39,536,261  \n -  \n 39,536,700 \n\nRepurchase & Retirement of Class B Common Stock \n -  \n -  \n (8,000,000) \n (800) \n -  \n -  \n (11,999,200) \n -  \n (12,000,000)\n\nCashless exercise of warrants \n 369,712  \n 36  \n -  \n -  \n -  \n -  \n (36) \n -  \n - \n\nNet Loss 2025 \n -  \n -  \n -  \n -  \n -  \n -  \n   \n (5,272,551) \n (5,272,551)\n\nNet Income (loss) \n -  \n -  \n -  \n -  \n -  \n -  \n   \n (5,272,551) \n (5,272,551)\n\n  \n    \n    \n    \n    \n    \n    \n    \n    \n   \n\nBalance, December 31, 2025 \n 12,603,900  \n$1,260  \n **-**  \n$**-**  \n4,389,500  \n$439  \n$37,200,867  \n$632,272  \n$37,834,838 \n\nBalance \n 12,603,900  \n$1,260  \n **-**  \n$**-**  \n4,389,500  \n$439  \n$37,200,867  \n$632,272  \n$37,834,838 \n\n \n\nThe\naccompanying notes are an integral part of these consolidated financial statements.\n\n \n\nF-5\n\n \n\n \n\n**JFB\nCONSTRUCTION HOLDINGS AND SUBSIDIARIES**\n\n**CONSOLIDATED\nSTATEMENTS OF CASH FLOWS**\n\n** **\n\n  \nDecember 31, 2025  \nDecember 31, 2024 \n\n  \nYear Ended \n\n  \nDecember 31, 2025  \nDecember 31, 2024 \n\nOPERATING ACTIVITIES \n    \n   \n\nNet Income \n (5,272,551) \n 119,005 \n\nAdjustments to reconcile Net Income (Loss) to Net Cash provided by operations: \n    \n   \n\nDepreciation Expense \n 251,913  \n 179,649 \n\n(Gain) loss on sale of fixed asset \n (10,000) \n   \n\nShares issued for Services \n 1,208,786  \n 360,000 \n\nImputed Interest \n —  \n 32,649 \n\nChanges in assets and Liabilities (increase) decrease in : \n    \n   \n\nContracts Receivable \n (6,196,099) \n 4,087,836 \n\nContract Assets \n (1,416,946) \n (851,975)\n\nPrepaid Expenses \n (52,052) \n (40,767)\n\nLease Liabilities, net \n 14,108  \n — \n\nAccounts Payable \n (124,582) \n 382,382 \n\nAccrued Expenses \n 57,461  \n (665,854)\n\nContract Liabilities \n (249,925) \n 121,075 \n\nCASH PROVIDED BY ( used in) OPERATING ACTIVITIES \n (11,789,888) \n 3,481,850 \n\nCASH FLOWS FROM INVESTING ACTIVITIES \n    \n   \n\nCash Paid for Deposit on Investment \n (50,000) \n — \n\nCash Received from sale of Fixed Asset \n 10,000  \n — \n\nCash Paid for Class A Common Stock \n (1,000,000) \n — \n\nCash Paid for purchased of Fixed Assets \n (226,755) \n (817,534)\n\nNet cash used in investing activities \n (1,266,755) \n (817,534)\n\nCASH FLOWS FROM FINANCING ACTIVITIES \n    \n   \n\nRepayment on loan payable \n —  \n (332,870)\n\nProceeds from Issuance of Common Stock A, net \n 4,667,636  \n — \n\nProceeds from Issuance of Common Stock C, net \n 39,536,700  \n — \n\nProceeds from Issuance of Common Stock, net \n 39,536,700  \n — \n\nProceeds from Exercise of Warrants \n 3,363,508  \n — \n\nRedemption Of Class B Common Stock \n (12,000,000) \n — \n\nShareholder (Distributions) Contributions \n 1,000  \n (872,007)\n\nCASH USED FOR FINANCING ACTIVITIES \n 35,568,844  \n (1,204,877)\n\nNET INCREASE (DECREASE) IN CASH \n 22,512,201  \n 1,459,439 \n\nCASH AND RESTRICTED CASH AT BEGINNING OF YEAR \n 2,696,183  \n 1,236,744 \n\nCash and restricted cash at end of period \n$25,208,384  \n$2,696,183 \n\n  \n    \n   \n\nSupplemental Disclosures of Cash Flow Information: \n    \n   \n\nInterest Paid \n$—  \n$— \n\nTaxes Paid \n$—  \n$— \n\nNon-Cash Financing \n    \n   \n\nAddition of lease during this period \n$—  \n$908,705 \n\nCashless exercise of warrants \n$18  \n$— \n\n** **\n\nF-6\n\n \n\n** **\n\n**JFB\nConstruction Holding**\n\n**Notes\nto the Audited Financial Statements**\n\n**Note\n1 – Nature of the Business**\n\n** **\n\nJFB\nConstruction & Development, Inc. (“JFB” or the “Company”) was incorporated in the State of Florida on May\n28, 2014, and is based in Lantana, Florida. The Company offers more than 100 years of combined generational experience in residential\nand commercial construction and development. JFB builds multifamily communities, exclusive estate & equestrian homes, and over 2\nmillion square feet of commercial retail and shopping centers. The Company meets its customers’ needs through advanced scheduling,\ndeep construction expertise, innovative problem solving and continuous communication during construction.\n\n \n\nOn\nApril 09, 2024, JFB Construction Holdings was formed out of the state of Nevada to serve as the parent company of JFB Construction &\nDevelopment, Inc. The consolidated financial statements of JFB Construction Holdings reflect the financial position, results of operations\nand cash flows of both JFB Construction Holdings and its subsidiaries from the date of consolidation.\n\n \n\n**Basis\nof Presentation**\n\n** **\n\nThe\naccompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the\nUnited States of America (“GAAP”). The consolidated financial statements include the accounts of JFB Construction Holdings\nand its wholly owned subsidiaries, including JFB Construction & Development, Inc. All intercompany balances and transactions have\nbeen eliminated in consolidation.\n\n \n\nThe\nconsolidated financial statements have been prepared on the accrual basis of accounting and in accordance with the historical most convention,\nexcept for certain financial instruments that may be recorded at the fair value as required by GAAP. Management has evaluated events\nand transactions occurring subsequent to the balance sheet date for potential recognition or disclosure in the consolidated financial\nstatements.\n\n \n\n**Note\n2 – Summary of Significant Accounting Policies**\n\n** **\n\nThis\nsummary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements.\nThe financial statements and notes are representations of the Company’s management, which is responsible for their integrity and\nobjectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been\nconsistently applied in the preparation of the financial statements.\n\n \n\n**Principles\nof Consolidation**\n\n** **\n\nJFB\nConstruction & Development, Inc. accounts are included on its Parent Company’s consolidated financial statements for the years\nended December 31, 2025 and 2024.\n\n \n\n**Cash\nand Restricted Cash**\n\n** **\n\nThe\nCompany’s cash is comprised of highly liquid investments with an original maturity of three (3) months or less, together with restricted\ncash totaling $3,000,000, consisting of $3,000,000 pledge as collateral for the Desoto School Project performance bond.\n\n \n\n**Concentration\nRisk**\n\n** **\n\nCash\nincludes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Company (FDIC) limits. At times\nthroughout the year, the Company may maintain cash balances in certain bank accounts in excess of FDIC limits. As of December 31, 2025\nand 2024, the cash balance in excess of the FDIC limits was $21,862,085 and $2,196,183, respectively. The Company has not experienced\nany losses in such accounts and believes it is not exposed to any significant credit risk in these accounts.\n\n \n\n**Use\nof Estimates**\n\n** **\n\nThe\npreparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates\nand assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the\ndate of the financial statements and the reported amounts of revenues and expenses during the reporting period. Certain accounting estimates\nof the Company require a higher degree of judgment than others in their application. These include the recognition of revenue and earnings\nfrom construction contracts over time, and the valuation of long-lived assets. Management evaluates all of its estimates and judgements\nbased on available information and experience; however, actual results could differ from those estimates.\n\n \n\nF-7\n\n \n\n \n\n**Revenue\nRecognition**\n\n** **\n\nWe\nrecognize revenue when services are performed, provided that evidence of an arrangement exists, title and risk of loss have passed to\nthe customer, fees are fixed or determinable, and collection of the related receivable is reasonably assured.\n\n \n\nRevenues\nand related costs on construction contracts are recognized as the performance obligations for work are satisfied over time in accordance\nwith Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue, and associated\nprofit, will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations).\nAll un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the\nevent a loss on a contract is foreseen, the Company will recognize the loss as it is determined.\n\n \n\nRevisions\nin cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions\nbecome known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes\nin job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final\ncontract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined.\n\n \n\nContract\nreceivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible\nupon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based\nupon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General\nand administrative expenses are charged to operations as incurred and are not allocated to contract costs.\n\n \n\nRevisions\nin cost and profit estimates during the course of the contract are reflected in the accounting period in which the facts for the revisions\nbecome known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes\nin job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final\ncontract settlements, may result in revisions to costs and income, which are recognized in the period the revisions are determined.\n\n \n\nContract\nreceivables are recorded on contracts for amounts currently due based upon progress billings, as well as retention, which are collectible\nupon completion of the contracts. Accounts payable to material suppliers and subcontractors are recorded for amounts currently due based\nupon work completed or materials received, as are retention due subcontractors, which are payable upon completion of the contract. General\nand administrative expenses are charged to operations as incurred and are not allocated to contract costs.\n\n \n\nTo\ndetermine proper revenue recognition for contracts, we evaluate whether two or more contracts should be combined and accounted for as\none single performance obligation or whether a single contract should be accounted for as more than one performance obligation. This\nevaluation requires significant judgment and the decision to combine a group of contracts or separate a single contract into multiple\nperformance obligations could change the amount of revenue and profit recorded in a given period. For all of our contracts, we provide\na significant service of integrating a complex set of tasks and components into a single project. Hence, the entire contract is accounted\nfor as one performance obligation. Due to the nature of the work required to be performed on many of our performance obligations, the\nestimation of total revenue and cost at completion is complex, subject to variables and requires significant judgment. We estimate variable\nconsideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the\nextent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with\nthe variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts\nin the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and\nforecasted) that is reasonably available to us.\n\n \n\nIn\naccordance with ASC 606-10-50-12, our revenue recognition policy reflects the nature of the goods and services promised to customers\nacross our three business segments: Commercial Construction, Residential Construction, and Real Estate Development. Commercial Construction\nsegment we provide construction services for commercial properties, including office buildings and retail spaces. Our performance obligation\ntypically consists of delivering a completed construction project within a contract term of approximately 8 to 13 weeks. Residential\nConstruction segment focuses on the construction of residential properties, including ground up development of single-family and multi-family\nresidential homes, and the remodeling of single-family and multi-family homes. Our residential contracts generally have a duration of\n8-12 months. In our Real Estate Development segment, we would undertake the acquisition and development of land for development, or value\nadd opportunities in real estate. This segment of the business would take approximately 6-24 months.\n\n \n\nF-8\n\n \n\n \n\nIn\naccordance with ASC 606-10-50-13 we disclose information regarding our remaining performance obligations for contracts with customers\nin our business segments. The total remaining performance obligations under the Commercial Construction segment are expected to be satisfied\nwithin the next 8-13 week reflecting the typical duration of these projects. Under the Residential Construction segment are expected\nto be satisfied over the next 8-12 months as projects progress towards completion.\n\n \n\n**Contract\nAssets and Contract Liabilities**\n\n** **\n\nAccounts\nreceivable is recognized in the period when the Company’s right to consideration is unconditional. Accounts receivable is recognized\nnet of an allowance for credit losses. A considerable amount of judgement is required in assessing the likelihood of realization of receivables.\n\n \n\nThe\ntiming of revenue may differ from timing of invoicing customers.\n\n \n\nContract\nassets include unbilled amounts from long-term construction services when revenue recognized under the cost-to-cost measure of progress\nexceeds the amounts invoiced to customers, as the amounts cannot be billed under the terms of the contracts. Such amounts are recoverable\nfrom customers based upon various measures of performance, including achievement of certain milestones, completion of specified units\nor completion of contract. Contracts assets are generally classified as current within the consolidated balance sheet.\n\n \n\nContract\nliabilities from construction contracts occur when amounts invoiced to customers exceed revenues recognized under the cost-to-cost measures\nof progress. Contract liabilities additionally include advance payments from customers on certain contracts. Contract liabilities decrease\nas the Company recognizes revenue from the satisfaction of the related performance obligation. Contract liabilities are generally classified\nas current within the consolidated balance sheet.\n\n \n\nAlthough\nthe Company believes it has established adequate procedures for estimating costs to complete on open contracts, it is at least reasonably\npossible that additional significant costs could occur on contracts prior to completion. The Company periodically evaluates and revises\nits estimates and makes adjustments when they are considered necessary.\n\n \n\nThe\nCompany recognizes revenue by applying the following 5 step model:\n\n \n\n1.\nIdentifying the Contract(s) with a Customer. The Company enters into written contract with customers that create enforceable rights and\nobligations. Contracts are assessed to ensure they meet criteria for being considered legally binding and capable of being accounted\nfor.\n\n \n\n2.\nIdentify the Performance Obligations in the Contract. Performance obligations are identified as distinct promises to transfer goods or\nservices to a customer. The Company identifies their scope of work and creates a schedule of values (SOV) outlining each individual scope\nof the project.\n\n \n\n3.\nDetermine the Transaction Price. The transaction price is the amount of considerations the Company expects to be entitled to in exchange\nfor transferring promised services. The transaction price may include fixed amounts or cost-plus percentage method.\n\n \n\n4.\nAllocate the Transaction Priced to Performance Obligations. The transaction price is allocated to each performance obligation (SOV) based\non its stand-alone selling price. The stand-alone selling price is the price which the Company would sell its service separately to a\ncustomer.\n\n \n\n5.\nRecognize Revenue when (or as) the Company Satisfies a Performance Obligation. The Company recognizes revenue over time based on the\nprogress towards completion of performance obligation. Revenue recognized during this reporting period is derived from the total contract\nvalue as allocated to performance obligations satisfied during that period.\n\n \n\nIn\naccordance with ASC 280-10-50, our operations are organized into three primary business segments: Commercial Construction, Residential\nConstruction, and Real Estate Development. These segments are defined based on the nature of our services and the markets we serve.\n\n \n\nCommercial\nConstruction: This segment includes all activities related to the construction of commercial properties such as office buildings, retail\nspaces, and industrial facilities. Revenue is recognized using the cost-to cost method, reflecting the extent of work performed on contracts.\nThe Commercial segment of JFB Construction represents 78% and 89% of revenue for the years ended December 31, 2025 and December 31, 2024,\nrespectively.\n\n \n\nF-9\n\n \n\n \n\nResidential\nConstruction: This segment focuses on the construction of residential properties, including single-family homes and multi-family units.\nRevenue recognition is similarly based on the cost-to cost method. The Residential segment of JFB Construction represents 22% and 11%\nof revenue for the years ended December 31, 2025 and December 31, 2024, respectively.\n\n \n\nReal\nEstate Development: This segment encompasses the acquisition, development, and sale of real estate properties. Revenue is recognized\nupon the sale of developed properties and is influenced by market conditions and demand for residential and commercial properties. There\nis no revenue recognized for this segment for the years ended December 31, 2025 and December 31, 2024.\n\n \n\nThe\nfinancial performance of each segment is regularly reviewed with operational leaders in charge of these segments, the Chief Executive\nOfficer (CEO), the Chief Financial Officer (CFO) and others.\n\n \n\n**Contract\nReceivable**\n\n** **\n\nAccounts\nreceivables are generally based on amounts billed to the customer in accordance with contractual provisions. They are uncollateralized\ncustomer obligations due under normal trade terms, only recorded for those amounts deemed collectible, based upon experience with its\ncustomers. No finance or interest charges are charged to accounts receivable. The Company uses the allowance method to account for uncollectible\naccounts receivable. The Company records an allowance against uncollectible items for each customer after all reasonable means of collection\nhave been exhausted, and the potential for recovery is considered remote. The allowance for doubtful accounts was $135,236 and $0 as\nof December 31, 2025 and 2024. The net contract receivable balance was $9,243,354 on December 31, 2025, and $3,047,255 on December 31,\n2024.\n\n \n\n**Advertising\nCosts**\n\n** **\n\nThe\nCompany expenses the cost of advertising and promotional materials when incurred. The advertising costs were $1,011,092 for the year\nended December 31, 2025 and $51,635 and for the year ended December 31, 2024.\n\n \n\n**Property\nand Equipment**\n\n** **\n\nProperty\nand equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, including vehicles, computers\nand office equipment and field equipment. Gain or loss is recognized upon disposal of property and equipment, and the asset and related\naccumulated depreciation are removed from the accounts. Expenditures for maintenance and repairs are charged to expense as incurred,\nwhile expenditures for addition and betterment are capitalized. Property and Equipment include the following categories:\n\n Schedule of Property and Equipment\n\n**Estimated\nLife**\n \n\n**Office,\nField, and Computer Equipment**\n**5\nyears**\n\n**Vehicles**\n**5\nyears**\n\n**Leasehold\nImprovements**\n**7\nyears**\n\n** **\n\n  \n2025  \n2024 \n\n  \n31-Dec \n\n  \n2025  \n2024 \n\nField Equipment \n$114,206  \n$114,206 \n\nComputer Equipment \n 6,911  \n 6,911 \n\nVehicles \n 837,230  \n 819,599 \n\nLeasehold Improvements \n 771,841  \n 589,525 \n\nOffice Equipment \n 2,076  \n 2,076 \n\nGross Property and Equipment \n 1,732,264  \n 1,532,317 \n\nLess accumulated depreciation \n (735,493) \n (510,387)\n\nNet Property and Equipment \n$996,771  \n$1,021,930 \n\n** **\n\nLong-lived\nassets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying\namount of an asset may not be recoverable. In the event that the facts and circumstances indicate that the cost of any long-lived assets\nmay be impaired, an evaluation of recoverability would be performed following generally accepted accounting principles.\n\n \n\nDepreciation\nexpense during the year ended December 31, 2025 and 2024, was $251,913 and $179,649, respectively.\n\n \n\nF-10\n\n \n\n \n\n**Fair\nValue of Financial Instruments**\n\n** **\n\nFair\nValue of Financial Instruments requires disclosure of the fair value information, whether or not to recognized in the balance sheet,\nwhere it is practicable to estimate that value. As of December 31, 2025, the balances reported for cash, contract receivables, cost in\nexcess of billing, prepaid expenses, accounts payable, billing in excess of cost, and accrued expenses approximate the fair value because\nof their short maturities.\n\n \n\nWe\nadopted ASC Topic 820 for financial instruments measured as fair value on a recurring basis. ASC Topic 820 defines fair value, established\na framework for measuring fair value in accordance with accounting principles generally accepted in the United States and expands disclosures\nabout fair value measurements.\n\n \n\nFair\nvalue is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between\nmarket participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs\nused in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets\nor liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:\n\n \n\n●\nLevel 1, defined as observable inputs such as quoted prices for identical instruments in active markets.\n\n \n\n●\nLevel 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted\nprices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;\nand\n\n \n\n●\nLevel 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,\nsuch as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.\n\n \n\n**Work-in-Process**\n\n** **\n\nThe\nCompany recognizes as an asset the accumulated costs for work-in-process on projects expected to be delivered to customers. Work in Process\nincludes the cost price of materials and labor related to the construction of equipment to be sold to customers.\n\n \n\n**Recently\nIssued Accounting Pronouncements**\n\n** **\n\nManagement\nreviewed currently issued pronouncements and does not believe that any other recently issued, but not yet effective, accounting standards,\nif currently adopted, would have a material effect on the accompanying condensed financial statements.\n\n \n\n**Note\n3 – Revenue from Contracts with Customers**\n\n** **\n\nRevenues\nand related costs on equipment contracts are recognized as the performance obligations for work are satisfied over time in accordance\nwith Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Under ASC 606, revenue and associated\nprofit will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations).\nAll un-allocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the\nevent a loss on a contract is foreseen, the Company will recognize the loss as it is determined.\n\n \n\nIn\naccordance with ASC 606-10-50-5, the Company identifies Revenue from Contracts with Customers using this 5- step model.\n\n \n\n1.\nIdentifying the Contract(s) with a Customer. The Company enters into written contract with customers that create enforceable rights and\nobligations. Contracts are assessed to ensure they meet criteria for being considered legally binding and capable of being accounted\nfor.\n\n \n\n2.\nIdentify the Performance Obligations in the Contract. Performance obligations are identified as distinct promises to transfer goods or\nservices to a customer. The Company identifies their scope of work and creates a schedule of values (SOV) outlining each individual scope\nof the project. Commercial construction performance obligations typically include delivering construction services for commercial construction\nand recognized the entire contract as a single performance obligation, Residential Construction is typically delivering the new construction\nof a residential construction or a remodel of an existing residential property, and we recognize the contract as a single performance\nobligation.\n\n \n\n3.\nDetermine the Transaction Price. The transaction price is the amount of considerations the Company expects to be entitled to in exchange\nfor transferring promised services. The transaction price may include fixed amounts or cost-plus percentage method.\n\n \n\nF-11\n\n \n\n \n\n4.\nAllocate the Transaction Priced to Performance Obligations. The transaction price is allocated to each performance obligation (SOV) based\non its stand-alone selling price. The stand-alone selling price is the price which the Company would sell its service separately to a\ncustomer.\n\n \n\n5.\nRecognize Revenue when (or as) the Company Satisfies a Performance Obligation. The Company recognizes revenue over time based on the\nprogress towards completion of performance obligation. Revenue recognized during this reporting period is derived from the total contract\nvalue as allocated to performance obligations satisfied during that period. Commercial construction revenue is recognized over time,\nusing the cost-to cost method as we perform work on projects. Residential construction is similarly recognized over time for custom builds\nand remodel using the cost-to cost method.\n\n \n\nBy\ntreating our contracts as a single performance obligation, we ensure that our revenue recognition process accurately reflects the economic\nrealities of our business operations across all segments. This approach provides clarity to stakeholders regarding our revenue-generating\nactivities, aligning with the guidance provided in ASC 606-10-55-89 through 55-91.\n\n \n\nIn\naccordance with ASC 606-10-50-8, the Company has disclosed significant judgements and changes in judgements related to the recognition\nof revenue from construction contracts. The application of ASC 606 requires the use of judgment in various aspects of revenue recognition,\nparticularly in the use of the cost-to-cost method. The Company applies the cost-to-cost method to measure progress toward completion.\nThis involves estimating the total contract cost and recognizing revenue based on the ration of cost incurred to the estimated total\ncost. The Company makes judgements regarding the recognition of revenue related to change orders and claims. Revenue from change orders\nis included in the transaction price when it is probable the customer will approve the change and the amount can be reliably estimated.\n\n \n\nIn\naccordance with ASC 606-10-50-8, the Company recognizes contract assets and liabilities that reflect timing of revenue relative to the\namounts billed or paid. Contract balances are reported in the balance sheet as follows:\n\n \n\n1.\nContract Assets. Contract Assets represent the Company’s right to consideration for work completed to date but not yet billed to\nthe customer. These amounts typically arise when revenue is recognized before an invoice is issued.\n\n \n\n2.\nContract Liabilities. Contract Liabilities represent the Company’s obligation to transfer goods or service to a customer for which\nit has received consideration or has the right to receive consideration before performing under the contract. Contract liabilities include\nadvance payments or progress billing received from customers before the Company has satisfied its performance obligations.\n\n \n\nContract\nassets represent revenues recognized in excess of amounts billed on contracts in progress. Contract liabilities represent billings in\nexcess of revenues recognized on contracts in progress. Assets and liabilities related to long-term contracts are included in current\nassets and current liabilities in the accompanying balance sheets, as they will be liquidated in the normal course of the contract completion.\nThe contract assets for the years ending December 31, 2025, and 2024, was $2,630,561 and $1,213,614, respectively. The contract liability\nfor the years ended December 31, 2025, and 2024, was $383,869 and $633,794 respectively. We recognized $1,143,269 and $2,561,828 as revenue\nfrom our contract liability balance at the beginning of the year at year end December 31, 2025 and 2024, respectively. The allowance\nfor doubtful accounts was $135,236 as of December 31, 2025 and December 31, 2024. The contract receivable balance was $9,243,354\nas of December 31, 2025 and $3,047,255 as of December 31, 2024.\n\n \n\n**Note\n4 – Business Segment Information**\n\n** **\n\n**Commercial\nConstruction Segment**\n\n** **\n\nFrom\nground-up developments to renovations and tenant improvements, we specialize in delivering high-quality commercial construction projects\nacross various commercial sectors. This segment encompasses a wide range of projects, including office buildings, retail centers, hospitality\nestablishments, and industrial facilities. The commercial segment, which includes two divisions, a franchise construction division and\na general commercial construction division, represents a significant portion of JFB Construction’s revenue including approximately\n50% for year ending December 31,2025 and 78% for year ending December 31,2024. .\n\n \n\nFranchise\nindustry construction build-outs were a key component of the past growth of JFB and will continue to be instrumental in our commercial\nconstruction business. These projects range in size from approximately 1,500 square foot projects to over 30,000 and are generally completed\nin less than four months. Leveraging years of experience, our team of professionals is adept at understanding the unique requirements\nof numerous franchise systems and national brands for our clients. Our collaborative approach and dedication to client satisfaction have\npositioned us as preferred builders within the franchise industry for highly valuable and recognizable corporate brands, allowing us\nto build lasting partnerships with franchisees and national brands alike. We are, however, tied to the continued growth and success of\nthe national brands, and their respective franchisees, for continued projects of this nature. By prioritizing the unique needs and objectives\nof each client, we attempt to deliver tailored solutions to meet the need of our franchise clients.\n\n \n\nF-12\n\n \n\n \n\nWe\nalso build ground-up commercial buildings. This includes site evaluation, aiding in architectural design and engineering, and construction\nof the building itself. Our approach ensures that the final product meets the functional and aesthetic requirements of modern businesses,\nwhile also adhering to budget and timeline constraints. We began building for Sweathouz Corporation and successfully completed three\nprojects for them in 2025.\n\n \n\nThe\ncommercial construction industry, specifically focusing on franchise business buildouts, is highly competitive and influenced by various\nmarket dynamics. Franchise business buildouts, such as restaurants, retail stores, fitness centers, and service-oriented businesses,\nrequire specialized construction services that cater to brand standards, tight timelines, and cost efficiency. Many franchise brands\nare expanding rapidly due to strong consumer demand, creating a substantial market for commercial construction services. Franchise buildouts\noften have aggressive schedules to meet the franchisor’s timelines, requiring contractors, including JFB, to work efficiently and\nminimize downtime. This fast-paced nature of the work means that contractors with streamlined processes, experienced project managers,\nand strong subcontractor networks have a competitive edge. Our management believes we possess such attributes and, as a result, are well\npositioned to continue being awarded contracts in this sector in the future.\n\n \n\nOverall,\naccording to Construct Connect news, their experts predict that the Commercial Construction industry will have modest growth in 2026\nand beyond Further, nonresidential construction spending is projected to increase by over 4% in 2026 according to the American Institute\nof Architects. However, there is less encouraging information related to traditional office and retail sectors which are declining based\non consumer trends and work from home initiatives. JFB will continue to monitor these trends as they occur and will consider shifting\nresources to adapt by focusing markets and regions where continued growth is projected.\n\n \n\nManagement\nexpects the continued expansion of our franchise construction division across numerous states throughout the U.S. where our current and\nfuture clients require our services, with an emphasis on the Southeast. The Southeast, according to International Franchise Association,\nis the largest franchise market in the country and is expected to grow by 3.5%, whereas the total national franchise market is only expected\nto grow 1.9%. Our general commercial construction division will continue to focus on the Southern Atlantic region of the United States\nin the short to mid-term, focusing on regions where we forecast continued state-to-state migration and expanding population growth. We\nanticipate our franchise division growth to remain strong so long as we are able to continue to retain our current client base and continue\nto receive referrals within the industry.\n\n \n\n**Residential\nConstruction Segment**\n\n** **\n\nWith\na focus on quality craftsmanship, we undertake residential construction and development projects that prioritize modern living spaces\nand contribute to vibrant communities. With the increasing demand for housing driven by population growth and urbanization, the residential\ndevelopment segment presents business opportunities for JFB Construction. According to the U.S. Census Bureau, Florida was one of the\nfastest-growing economies in the country. Florida has also been one of the fastest growing states in terms of population and migration,\nwith 22,517 added in 2025, according to a report issued by the Florida Times. JFB aims to capitalize on the increased GDP and population\nmigration in Florida, which is drawing new residents because of its warmer climate, robust labor market and lack of state income tax,\ndue to increased need for housing. In 2025, residential construction opportunities represent 22% of our revenues. Our expertise in residential\nconstruction includes home remodels, luxury single-family homes and equestrian facilities. We are committed to meeting the evolving needs\nof homeowners and developers by delivering innovative and sustainable housing solutions.\n\n \n\nWe\ncater to affluent clients seeking bespoke residences and state of the art equestrian amenities in South Florida. Within this segment,\nwe excel at creating custom-designed homes and remodels that embody elegance, functionality, and the latest in luxury living standards.\nIn parallel, we create equestrian facilities that combine superior architectural design with practical considerations for horse stabling\nand training. As we move forward, management believes the demand for contractors who specialize in this niche of luxury construction\nwill continue to grow in association with the population growth in this region. Six\nof our 24twenty-four\ncurrent projects are residential construction projects.\n\n \n\nThe\ncompetitive state of the residential construction market in the Florida and the surrounding regions has been shaped in recent years due\nto a number of factors. Florida’s population growth is forecasted to remain above the national average in the coming years as well,\naccording to the Demographic Estimating Conference. In turn, the demand for new or remodeled homes has been beneficial to JFB and the\nresidential construction industry in the region. However, JFB’s ability to successfully capitalize on such demand has been balanced\nby the need to identify a cost effective workforce, including its use of subcontractors, properly preparing for and mitigating the potential\nharm of increased material costs and supply chain disruptions, and navigating strict building codes which may lead to permitting delays.\n\n \n\nF-13\n\n \n\n \n\n**Real\nEstate Development Segment**\n\n** **\n\nManagement\nbelieves that an increased focus on larger multi-family residential developments, such as condominiums and townhouses, will help JFB\nto continue to grow and increase its revenue. Projects, such as our completed 44-unit\nmulti-story residential apartment complex and our recent agreement as the general contractor for a 79-unit\ntownhome development with an additional community clubhouse, and our work to expand the Desoto County High School and the Construction\nof the Courtyard Olive Branch hotel will be key to our future success because such projects offer the opportunity to participate in larger\nconstruction projects that have an opportunity to yield greater revenues. As discussed below, we believe being a public company, with\nincreased access to capital and potentially debt financing, will help enable our company to invest in real estate development projects\nthat are more capital intensive. Further, with the potential to act as the developer and general contractor for development projects,\nwe believe there are opportunities to maximize profits for the Company though efficient control of all aspects of construction projects\nthrough our in-house development team. Four\nof our 24twenty-four\ncurrent projects is a real estate development project.\n\n \n\nWhile\nstill aspirational in nature, the Company’s strategic plan includes investing in real estate development projects directly as the\ndeveloper or through joint ventures, which offer both attractive opportunities and notable challenges. Such investment has the potential\nto secure substantial returns on investment, as well as potentially being awarded the valuable construction contracts tied to these ventures.\nReal estate development provides revenue opportunities for the Company through various channels, including the sale of developed properties,\nleasing income, and property management fees. Upon the completion of a development project, the Company may generate revenue through\nthe sale of residential, commercial, or mixed-use properties to third-party buyers. In addition, leasing developed properties to tenants\nprovides a recurring revenue stream, contributing to long-term financial stability. The Company may also derive income from property\nmanagement services, ensuring efficient operation and maintenance of developed assets, but this service would likely be outsourced to\na third-party, at least in the early stages of this growth objective. Furthermore, real estate development projects may appreciate in\nvalue over time, potentially generating additional revenue upon sale or refinancing.\n\n \n\nIn\naddition to the revenue generated from property sales, leasing, and management, real estate development projects create opportunities\nfor the Company to provide construction services, further diversifying its income streams. As a vertically integrated company, the Company\nis likely to be able to serve as both the developer and the general contractor on its projects, enabling it to capture additional revenue\nfrom construction activities. By providing construction services for its own developments, the Company benefits from greater control\nover project timelines, quality, and costs, improving overall project efficiency. Moreover, the Company may also offer construction services\nto third-party developers, as it is presently leveraging its expertise and resources to expand its client base. This dual role as developer\nand contractor may enhance the Company’s ability to generate consistent revenues across multiple phases of a project, from initial\nconstruction through long-term asset management.\n\n \n\nValue-add\nreal estate development for shopping centers and similar commercial projects is another area of real estate development the Company intends\nto invest into. By acquiring underperforming or outdated retail properties, the Company can implement strategic renovations, tenant repositioning,\nand operational improvements to enhance the property’s value and attract higher-quality tenants. These enhancements can increase\nrental income and occupancy rates, creating a more attractive asset for future sale or refinancing. Additionally, value-add projects\nallow the Company to capitalize on trends in consumer behavior, such as incorporating mixed-use elements or adapting spaces for e-commerce\nand experiential retail. This approach not only increases the asset’s long-term revenue potential but also strengthens the Company’s\nmarket position in the competitive commercial real estate sector, if the Company is able to properly assess risk and identify well positioned\nproperties.\n\n \n\nThe\nCompany recognizes real estate development projects require substantial capital investment and come with inherent risks, such as market\nfluctuations, potential delays, and the complexities of managing real estate assets. The illiquidity of these investments further complicates\nmatters, as funds may be locked in for extended durations, restricting the company’s ability to reallocate resources quickly. Nonetheless,\nby integrating its investment strategy with its construction capabilities, the Company aims to mitigate these risks and enhance project\noutcomes. While these endeavors require careful management and thoughtful allocation of resources, the Company is optimistic that its\nintegrated approach will yield positive outcomes.\n\n \n\nThe\nCompany’s segment profit or loss is measured using gross profit, which is the primary performance metric utilized by management\nto evaluate the financial results of each reportable segment. For segment reporting purposes, gross profit is calculated as the difference\nbetween segment revenue and the direct costs associated with specific projects or contracts. These direct costs include materials, labor,\nsubcontractors, and other project-specific expenses directly attributable to the construction activities of each segment.\n\n \n\nThe\nfinancial performance of each segment is regularly reviewed with operational leaders in charge of these segments, the Chief Executive\nOfficer (CEO), the Chief Financial Officer (CFO) and others. The CODM of the Company is Joseph Basile CEO. The Company’s segment\ndisclosures are presented in accordance with the guidance set forth in ASC 280, *Segment reporting*. Specifically, the disclosures\ncomply with the requirements outlined in ASC 280-10-50-22 through 50-26, which mandate that an entity disclose certain information about\nits operating segments to enable users of the financial statements to understand the financial performance of different parts of the\nbusiness.\n\n \n\nF-14\n\n \n\n \n\nIn\naccordance with ASC 280-10-50-22, the Company discloses financial information for each reportable segment, including revenue, operating\nprofit or loss, and other significant items that are used by the chief operating decision maker (CODM) in assessing the performance and\nmaking decisions about the allocation of resources. The Company identifies its reportable segments based on the internal management structure,\nand all relevant information is disclosed in the segment footnote as required.\n\n \n\nIn\naccordance with ASC 280-10-50-29, the disclosures also adhere to the requirements of which mandate that the financial information provided\nfor each segment should include items such as capital expenditures, depreciation, and amortization, when appropriate. The disclosures\nreflect the performance and financial position of each segment, and a reconciliation of segment totals to the overall consolidated financial\nresults, including total segment profit or loss and other significant disclosures.\n\n \n\nThe\nCompany’s segment disclosures are presented in accordance with the requirements set forth in ASC 280-10-50-30(b) and (c), which\nspecify the need to disclose the total of reportable segments’ profit or loss, as well as the basis of measurement used to determine\nthe segment results.\n\n \n\nIn\naccordance with ASC 280-10-50-30(b), the Company provides the total of profit or loss for all reportable segments, which reflects the\ncombined operating results for each reportable segment included in the financial statements. The total segment profit or loss represents\nthe aggregation of segment results before the allocation of corporate expenses and certain other items not attributable to specific segments.\n\n \n\nAs\nrequired by ASC 280-10-50-30(c), the Company has also disclosed the basis of measurement for segment profit or loss. The measure used\nto assess segment performance and allocate resources is operating income (or loss), which includes revenues, cost of sales, and directly\nattributable operating expenses for each segment. The operating income (or loss) for each reportable segment is reviewed by the Company’s\nchief operating decision maker (CODM) and serves as the primary performance metric used in resource allocation and operational decision-making.\n\n \n\n**Segment\ninformation is as follows:**\n\n ** Schedule\nof Segment Information**\n\nFor the year ended December 31, 2025 \nCommercial  \nResidential  \nReal Estate Development  \nConsolidated \n\nSales \n$15,149,930  \n$10,226,983  \n$5,164,530  \n$30,541,443 \n\nCost of Goods Sold \n 15,621,923  \n 7,273,349  \n 4,495,891  \n 27,391,163 \n\nGross Profit (Loss) \n (471,993) \n 2,953,634  \n 668,639  \n 3,150,280 \n\n  \n    \n    \n    \n   \n\nOperating Expenses \n    \n    \n    \n   \n\nSelling & Marketing Expenses \n 505,546  \n 303,328  \n 202,218  \n 1,011,092 \n\nGeneral & Administrative Expenses \n 3,686,946  \n 2,212,168  \n 1,474,778  \n 7,373,892 \n\nRent expense-related party \n 83,975  \n 50,385  \n 33,590  \n 167,950 \n\nDepreciation and amortization expense \n 125,957  \n 75,574  \n 50,383  \n 251,913 \n\nTotal Operating Expense \n 4,402,424  \n 2,641,454  \n 1,760,969  \n 8,804,847 \n\n  \n    \n    \n    \n   \n\nIncome (Loss) From Operations \n (4,874,417) \n 312,180  \n (1,092,330) \n (5,654,567)\n\nOTHER INCOME (EXPENSE) \n    \n    \n    \n   \n\nIncome (expense) \n (62,027) \n (37,216) \n (24,811) \n (124,053)\n\nInterest expense \n (245) \n (147) \n (98) \n (489)\n\nInterest Income \n 253,279  \n 151,967  \n 101,312  \n 506,558 \n\nTOTAL OTHER INCOME \n 191,008  \n 114,605  \n 76,403  \n 382,016 \n\nNET INCOME (LOSS) \n$(4,683,409) \n$426,785  \n$(1,015,927) \n$(5,272,551)\n\n \n\nF-15\n\n \n\n \n\nFor the year ended December 31, 2024 \nCommercial  \nResidential  \nReal Estate Development  \nConsolidated \n\nSales \n$18,008,550  \n$5,079,335  \n$-  \n$23,087,885 \n\nCost of Goods Sold \n 14,081,593  \n 3,971,731  \n —  \n 18,053,324 \n\nGross Profit (Loss) \n 3,926,958  \n 1,107,603  \n —  \n 5,034,561 \n\nOperating Expenses \n    \n    \n —  \n   \n\nSelling & Marketing Expenses \n 39,615  \n 12,020  \n —  \n 51,635 \n\nGeneral & Administrative Expenses \n 3,772,869  \n 1,063,912  \n —  \n 4,836,781 \n\nDepreciation and amortization expense \n 140,126  \n 39,523  \n —  \n 179,649 \n\nTotal Operating Expense \n 3,952,610  \n 1,115,455  \n —  \n 5,068,065 \n\nIncome From Operations \n (25,652) \n (7,852) \n —  \n (33,504)\n\nOTHER INCOME (EXPENSE) \n    \n    \n —  \n   \n\nIncome (expense) \n (6,351) \n (1,791) \n —  \n (8,142)\n\nInterest expense \n (25,466) \n (7,183) \n —  \n (32,649)\n\nInterest Income \n 150,774  \n 42,526  \n —  \n 193,300 \n\nTOTAL OTHER INCOME \n 118,957  \n 33,552  \n —  \n 152,509 \n\nNET INCOME (LOSS) \n$92,824  \n$26,181  \n$-  \n$119,005 \n\n  \n\nThe\ntotal assets for each segments are presented in accordance with segment reporting requirements of ASC 280-10, which requires the disclosure\nof total assets for each reportable segment.\n\n Schedule\nof Reconciliation of Assets from Segment to Consolidated\n\nAs of December 31, 2025 \nCommercial  \nResidential  \nReal Estate Development  \nConsolidated \n\nASSETS \n   \n   \n   \n  \n\nCash \n$11,104,192  \n$7,328,767  \n$3,775,425  \n$22,208,384 \n\nRestricted Cash \n -  \n -  \n 3,000,000  \n 3,000,000 \n\nContract Receivables \n 4,621,677  \n$3,050,307  \n 1,571,370  \n 9,243,354 \n\nContract Assets \n 1,315,281  \n 868,085  \n 447,195  \n 2,630,561 \n\nPrepaid Expenses \n 109,290  \n 72,131  \n 37,158  \n 218,579 \n\nContract Assets-Related Party \n  \n   \n   \n  \n\nTOTAL CURRENT ASSETS \n 17,150,439  \n 11,319,290  \n 8,831,149  \n 37,300,878 \n\nNET PROPERTY AND ROU ASSET \n 1,366,412  \n 901,832  \n 464,580  \n 2,732,824 \n\nTOTAL ASSETS \n$18,516,851  \n$12,221,122  \n 9,295,729  \n$40,033,702 \n\n \n\nAs of December 31, 2024 \nCommercial  \nResidential  \nReal Estate Development  \nConsolidated \n\nASSETS \n    \n    \n    \n   \n\nCash \n$2,103,023  \n$593,160  \n —  \n$2,696,183 \n\nContract Receivables \n 2,392,459  \n 654,796  \n —  \n 3,047,255 \n\nContract Assets \n 946,619  \n 266,995  \n —  \n 1,213,614 \n\nPrepaid Expenses \n 129,891  \n 36,636  \n —  \n 166,527 \n\nContract Assets-Related Party \n —  \n —  \n —  \n — \n\nTOTAL CURRENT ASSETS \n 5,572,132  \n 1,551,447  \n —  \n 7,123,579 \n\nNET PROPERTY AND ROU ASSET \n 1,616,634  \n 224,825  \n —  \n 1,841,459 \n\nTOTAL ASSETS \n$7,009,110  \n$1,955,928  \n —  \n$8,965,038 \n\n** **\n\n**Note\n5 – Lease Arrangements**\n\n** **\n\nIn\nthe ordinary course of business, the Company enters into lease arrangements, including operating and finance leases.\n\n \n\nThe\nCompany determines if an arrangement is a lease at inception. The operating lease right-of-use (“ROU”) assets are included\nwithin the Company’s non-current assets and lease liabilities are included in current or non-current liabilities on the Company’s\nConsolidated Balance Sheets. Finance leases are included in “Property and equipment,” “Current maturities of long-term\ndebt,” and “Long-term debt” on the Company’s Consolidated Balance Sheets. ROU assets represent the Company’s\nright to use, or control the use of, a specified asset for the lease term. Lease liabilities are the Company’s obligation to make\nlease payments arising from a lease and are measured on a discounted basis. Operating lease ROU assets and operating lease liabilities\nare recognized based on the present value of the future minimum lease payments over the lease term on the commencement date. The operating\nlease ROU asset includes any lease payments made and initial direct costs incurred and excludes lease incentives. The lease terms may\ninclude options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense\nfor minimum lease payments continues to be recognized on a straight-line basis over the lease term.\n\n \n\nF-16\n\n \n\n \n\nOn January\n1, 2022, we entered into a 2 two-year\nlease with Loose Cannon, LLC pursuant to which we leased our previous corporate headquarters, with an option\nfor an additional two-year renewal 2 . 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\nat the beginning of the term of the lease which increased by 2.5%.\nWe occupied approximately 3,521\nsquare feet of the building’s approximately 7,042\nsquare feet. This lease was terminated December\n1, 2024. Total rent expense under this related\nparty agreement was $35,310\nfor the year ended December 31, 2024.\n\n \n\nIn\naccordance with the accounting standards under ASC 842, the Company has entered into a lease agreement with Aura Commercial LLC, a related\nparty, for office space. The total rental obligation under the lease amounts to $11,928 per month.\n\n \n\n**Lease\nTerms**: 7 years\n\n \n\n**Monthly\nRent**: $11,928 and a 2.5 % adjustment increase per year.\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. The lease grants an option to\nrenew this lease agreement for two terms of five years following the expiration of the initial term and first option term, as the case\nmay be. Total rent expense under this related party agreement was $167,950 for the year ended December 31, 2025.\n\n \n\nThe\nCompany accounts for its lease liabilities in accordance with ASC 842, recognizing the present value of future lease payments as a liability\non the balance sheet. The interest expense associated with the lease liability is recognized over the lease term. The company has a lease\nliability of $700,161 at period ended December 31, 2025.\n\n \n\n**Note\n6 – Income Taxes**\n\n** **\n\nEffective\nJanuary 1, 2025 the Company revoked its election to be taxed as an “S” Corporation and elected to be taxed as a C Corporation\nunder the provision of the Internal Revenue Code. As a result of this change in tax status, the Company is now subsequent to federal\ncorporate income taxes on its taxable income.\n\n \n\nPrior\nto the revocation of its S-Corporation election, the Company was not subject to federal corporate income taxes, and its taxable income\nfor the year ended December 31, 2024 was reportable by its shareholder.\n\n \n\nThe\nCompany is subject to taxation in the United States.\n\n \n\nThe\nCompany recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025, the Company\nhas not accrued any penalties or interest related to uncertain tax positions.\n\n \n\nSince\nconverting to a C corporation, the Company has incurred losses and consequently recorded no provision for federal income tax for the\nyear ended December 31,2025. As of December 31, 2025 the Company had net operating loss (“NOL”) carryforwards for federal\nincome tax purposes. Federal NOL’s generated may be carried forward indefinitely, subject to an annual limitation equal to 80%\nof taxable income in any future year under the Tax Cuts and Jobs Act.\n\n \n\nPursuant\nto the provisions of the Accounting Standards Codification (“ASC”) 740-10, the Company records a liability for uncertain\ntax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. As of the years ended December\n31, 2025, and 2024, the Company had no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of\nlimitations, audits, proposed settlements, changes in tax law and new authoritative rulings.\n\n \n\nYEAR\nENDED DECEMBER 31, 2025\n\n Schedule of Income Tax Reconciliation\n\n  \n   \n\nFederal statutory tax rate \n (21.0)%\n\nImpact of 70,000 NQSO Issuances (ASC 718 expense) \n (21.1)%\n\nChange in Valuation Allowance \n 21.0%\n\nEffective Tax Rate \n (21.1)%\n\n \n\nF-17\n\n \n\n \n\nYEAR\nENDED DECEMBER 31, 2025\n\n Schedule of Deferred Tax Assets and Liabilities\n\n  \n    \n   \n\nNet Operating Loss \n 21% \n 1,107,236 \n\nStock-based compensation \n 21% \n 253,845 \n\nDepreciation \n 21% \n 52,902 \n\nTotal Deferred Tax Assets \n    \n 1,413,983 \n\nDeferred Tax Liabilities \n -  \n - \n\nNet Deferred Tax Asset \n -  \n 1,361,081 \n\nLess: Valuation Allowance \n -  \n (1,361,081)\n\nDeferred Tax Asset (Liability), Net \n -  \n - \n\n \n\nThe\nCompany’s federal income tax returns for 2025 and 2024 are subject to examination by the IRS, generally for three years after they\nwere filed. There are no ongoing examinations by taxing authority at this time.\n\n \n\n**Note\n7 – Concentrations**\n\n** **\n\nThe\nCompany’s financial instruments that are exposed to concentrations of credit risk consist primarily of its cash and accounts receivable.\nThe Company maintains its cash balances in bank deposit and money market accounts which, at times, may exceed federally insured limits.\n\n \n\n**Cash\nand Cash Equivalents**\n\n** **\n\nThe\nCompany maintains its cash in accounts at financial institutions, which may, at times, exceed federally insured limits. The Company has\nnot experienced any losses on such accounts and does not feel it is exposed to any significant risk with respect to cash. There were\namounts exceeding federally insured limits at December 31, 2025, and 2024 of $21,862,085 and $2,196183, respectively.\n\n \n\nIn\naddition, the Company held $3,050,000 in restricted cash at December 31, 2025, which is included from federally insured limit calculations\nand represent amounts held in escrow with construction project review and other contractual obligations.\n\n \n\n**Sales\nand Accounts Receivable**\n\n** **\n\nDuring\nthe year ended December 31, 2025 one(1) franchise totaled 26% of sales, and two (2) customers totaled 18 % and 47% accounts receivable.\n\n \n\nDuring\nthe years ended December 31, 2024 one (1) franchise totaled 41% of sales, and one (1) customer totaled 63% accounts receivable.\n\n \n\nThe\nCompany performs ongoing credit valuations of its customers and management believes that the financial viability of these customers is\nsound.\n\n \n\n**Purchases\nand Payables**\n\n** **\n\nThere\nwas no concentration of purchases or payables for the Company for the years ended December 31, 2025, and 2024.\n\n** **\n\n**Note\n8 – Related Party Transactions**\n\n** **\n\nOn\nDecember 17, 2019, JFB received a loan from Capo 7, LLC. The balance is due on demand and does not contain an interest rate. The current\nbalance on the loan is $0. Joseph F. Basile III, our Chief Financial Officer, owns Capo 7, LLC. This balance was due on demand and does\nnot contain an interest rate. The loan balance was repaid on December 23, 2024.\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\nF-18\n\n \n\n \n\nOn January\n1, 2022, we entered into a 2 two-year\nlease with Loose Cannon, LLC pursuant to which we leased our previous corporate headquarters, with an option\nfor an additional two-year renewal 2 .\nJoseph F. Basile III, our Chief Executive, is an officer and member of Loose Cannon, LLC. The lease provided for a base monthly rent\nof $3,210 at\nthe beginning of the term of the lease which increased by 2.5%.\nWe occupied approximately 3,521 square\nfeet of the building’s approximately 7,042 square\nfeet. This lease was terminated December\n1, 2024.\nTotal rent expense under this related party agreement was $35,310 for\nthe year ended December 31, 2024.\n\n \n\nOn\nMarch 14, 2024 we were awarded a $21mm project with Rare Capital Partners LLC to build a 79-unit-townhome rental community with an additional\ncommunity clubhouse in Port Salerno FL. Our Chief Executive Officer Joseph F. Basile III owns 42.25% of Rare Capital Partners and co-manages\nRare Capital Partners through Basile Family Investments LLC. Jamie Zambrana on the board of directors owns 8.54% of Rare Capital Partners\nand co-manages Rare Capital Partners through Sebastian Pail Investments, Inc. Nelson Garcia, a board of directors owns 8.54% through\nNBG Investments, Inc. Nelson Garcia does not, individually or through an entity, control the day-to-day operations of Rare Capital Partners\nLLC and is solely a minority owner. This project is under permitting and has not begun construction. However, on or about September 1,\n2021, in accordance with an oral agreement, JFB paid for engineering fees related to this project, in association with its general contracting\nservices being rendered, in the amount of $120,696. Rare Capital Partners paid the $120,696 balance on September 30,2024. Construction\non the project commence on June 1, 2025, with sire preparation underway. The project is currently under vertical construction. As of\nDecember 31, 2025 the Company has recorded $4,468,064 in related party sales associated with this project, along with $4,245,041 in related\nparty cost of goods sold.\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\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 company.\nFor 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 9,2025 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\nfinancial 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 1,640 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\nF-19\n\n \n\n \n\n**Note\n9 – Commitments and Contingencies**\n\n** **\n\n**Litigation**\n\n** **\n\nFrom\ntime to time, the Company is party to various claims or actions arising out of the ordinary course of business. While any proceeding\nor litigation contains an element of uncertainty, management believes no matter exists that would have a material impact on the Company’s\nfinancial position, liquidity, or results of operations.\n\n \n\nAs\nof December 31, 2024, there was on-going litigation relating to a residential remodel whereby the customer has not paid their final\ninvoice and the Company has filed a lien on the property and is awaiting a court date to proceed with foreclosure on the property. However,\nthe case was settled on March 19, 2025, and the company has received a settlement amount of $39,138.\n\n \n\nAs\nof December 31, 2025, the Company had no pending litigation matters.\n\n \n\n**Note\n10 – Equity**\n\n** **\n\nThe\nCompany is authorized to issue up to 400,000,000 shares of all classes of stock. 20,000,000 shares shall be Preferred Stock with\na par value of $0.0001 and 380,000,000 shares as Common Stock with a par value of $0.0001. Further, we are authorized to issue two (2)\nclasses of common stock, with 372,000,000 shares of the common stock designated as “Class A Common Stock” and 8,000,000 shares\nof the common stock designated as “Class B Common Stock”. After giving effect for the Reorganization (as defined below),\nin accordance with ASC 505-10-S99-4 (SAB Topic 4:C) and ASC 260- 10-55-12, as of December 31, 2025 and 2024 respectively, 12,603,900\nand 8,000,000 shares of Class A Common Stock was issued, and 8,000,000 shares of Class B Common Stock was issued and subsequently repurchased\nand fully redeemed pursuant to a redemption agreement executed on October 3, 2025. Following the redemption agreement 0 Class B Common\nStock remain outstanding.\n\n \n\nOn\nJuly 19, 2024, the Company issued 720,000 shares of the Company’s Class A common stock for a total fair value of $360,000 to Chartered\nServices for assisting the company with various consulting services. These services included the Company’s nomination system for\nall directors and aid in identifying qualified candidates, Review and advise the Company on all documents and accounting systems with\nGAAP compliance, provide support as a liaison for the Company’s third party services providers, and provide business development\nservices. In accordance with ASC 718 The Company prepared a DCF (Discounted Cash Flow model) to determine the fair value of the shares\ngranted and using the DCF module determined the shares had an approximate fair value of $360,000. The Company used a discount rate of\n14.5% and period of five years including a terminal year. Under this agreement the shares have already been granted and cannot be reclaimed\neven if the agreement is cancelled with or without cause. There are no required measurable deliverables or milestones as part of this\nagreement from Chartered Services and as a result the full value of the shares have been expensed in the current period.\n\n \n\nThe\nCEO of the Company, Joseph Basile, has at times taken distributions from the JFB Subsidiary. For the period 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\n31 ,2024.\n\n \n\nOn\nMarch 7,2025, the Company consummated its initial public offering of 2,500,000 units of the Company’s Class A common stock at a\npublic offering price of $2.07 per unit, generating gross proceeds of $5,156,250. In connection with the offering, the company also sold\n277,200 option warrants at a price of $0.01 per warrant, generating additional gross proceeds of $1,386 for total gross proceeds\nof $5,157,636. Pursuant to the underwriting agreement with Kingswood Capital Partners, LLC, the Company incurred $490,000 in expenses,\nresulting in net proceeds of $4,667,636.\n\n \n\nOn\nJune 25, 2025, the Company’s Board of Directors approved the adoption of an Equity Incentive Plan designed to attract, retain,\nand motivate qualified directors, officers, and employees by aligning their interest with those of the Company. Pursuant to the plan,\nthe Board authorized the issuance of an aggregate of 292,800 shares of Class A common stock to eligible participants, including board\nmembers and employees, for a total fair value of $910,608. The issuance of these equity awards was accounted for in accordance with ASC\n718.\n\n \n\nOn\nOctober 2,2025, the Company closed on a securities purchase agreement with American Ventures LLC, Series XIV as the sole investor for\na private investment in public equity (PIPE) financing that has resulted in gross proceeds to the Company of approximately $43,895,000,\nbefore deducting placement agent fees and offering expenses. The Company has used $12,000,000 of the net proceeds from the offering to\nretire the Company’s Class B Common Stock, par value $0.0001, owned by Joseph F. Basile III, the Company’s Chief Executive\nOfficer, pursuant to a Share Redemption Agreement. Pursuant to the terms of the securities purchase agreement, the Company has sold an\naggregate of 4,389,500 shares of its Series C Convertible Preferred Stock, par value $0.0001 per share, stated value $5 per share,\nconvertible into 24,206,799 shares of common stock par value$0.0001, at a conversion price $2.72 per share of Series C Convertible\nPreferred Stock, 24,206,799 Common Warrant A exercisable price of $2.88, 16,137,866 Common Warrant B exercisable price of $3.125.\nThe Company received gross proceeds of $27.5 million from the PIPE transaction after deducting placement agent fees and offering expenses.\n\n \n\nF-20\n\n \n\n \n\nAs\nof December 31, 2025, the Company had 4,389,500 shares of Series C Convertible Preferred Stock (“Series C Preferred Stock”)\nissued and outstanding. Each share of Series C Preferred Stock was issued as part of a unit consisting of one share of Series C Preferred\nStock and accompanying Common Stock purchase warrants. The Series C Preferred Stock carries a stated value of $10.00 per share and is\nconvertible at the option of the holder into shares of the Company’s Common Stock at a conversion price of $2.72 per share, subject\nto customary anti-dilution adjustments for stock splits, stock dividends, recapitalizations, and certain dilutive issuances. Based on\nthe conversion price, the outstanding Series C Preferred Stock is convertible into 16,137,866 shares of Common Stock.\n\n \n\nHolders\nof Series C Preferred Stock are entitled to receive dividends on an as-converted basis if and when dividends are declared on the Company’s\nCommon Stock. Dividends are non-cumulative. The Series C Preferred Stock votes together with the Common Stock on an as-converted basis,\nexcept for matters requiring a separate class vote under applicable law or the Certificate of Designation. The Series C Preferred Stock\nincludes customary protective provisions, including approval rights over amendments to the Certificate of Incorporation that adversely\naffect the Series C, the creation of senior or pari pass preferred stock, and certain corporate actions.\n\n \n\nUpon\nany liquidation, dissolution, or winding up of the Company, holders of Series C Preferred Stock are entitled to receive, prior to any\ndistribution to holders of Common Stock, an amount equal to the stated value per share plus any declared but unpaid dividends. After\npayment of the liquidation preference, Series C holders may participate on an as-converted basis to the extent provided in the Certificate\nof Designation. The Series C Preferred Stock is not mandatorily redeemable, and any optional redemption by the Company is subject to\nthe terms and limitations set forth in the Certificate of Designation. Conversion and exercise rights associated with the Series C units\nmay be subject to beneficial ownership limitations (e.g., 4.99% or 9.99%) unless waived by the holder.\n\n \n\nOn\nOctober 14, 2025, the Company issued 1,694 shares of its Common Stock to Ruben Calderon as compensation pursuant to his 2025 Employment\nAgreement. On December 15, 2025, the Company issued an additional 1,640 shares of Common Stock under the same agreement. In total, 3,334\nshares were issued to Mr. Calderon during the year ended December 31, 2025. All shares were issued as fully paid, and represent a portion\nof Mr. Calderon’s annual compensation package approved by the Board of Directors.\n\n \n\nOn\nDecember 2, 2025, the Company issued an aggregate 214,960 shares of its Common Stock as non-cash consideration for consulting services.\nOF this total, 171,968 shares were issued to Brian Herman and 42,992 shares were issued to Kingswood Capital Partners LLC. The shares\nwere issued in book-entry form with transfer restrictions and were valued based on the fair market value of the Company’s Common\nStock on the respective issuance dates. The related expense is recorded in General & Administrative expense in the accompanying statements\nof operations.\n\n \n\nDuring\nthe year ended December 31, 2025, the Company issued a total of 36,343,962 warrants, each entitling the holder to purchase one share\nof the Company’s Common Stock. Of these warrants, 1,592,806 were exercised during the year, resulting in 34,751,156 warrants outstanding\nas of December 31, 2025. The exercise generated $3,363,508 in cash proceeds to the Company.\n\n \n\nThe\nCompany estimated the fair value of the warrants issued during the year using the Black-Scholes option pricing model. The 1,388,600 warrants\nissued in connection with earlier financing activities had an aggregate estimated fair value of $440,304 at the time of issuance. The\n16,783,381 warrants issued in connection with the October 2, 2025 PIPE transaction had an aggregate Black-Sholes estimated fair value\nof $47,993,543 at the time of issuance.\n\n Summary\nof Warrants\n\nTotal Warrants outstanding as of December 31, 2024 \n - \n\nTotal Warrants issued \n 36,343,962 \n\nTotal warrants Exercised \n (1,592,806)\n\nTotal Warrants Outstanding as of December 31, 2025 \n 34,751,156 \n\n \n\nPursuant\nto a forward stock split (the “Forward Split”) announced on March 10, 2026, the total number of shares of Common Stock held\nby each stockholder were converted automatically into the number of shares of Common Stock equal to the number of issued and outstanding\nshares of Common Stock held by each such stockholder immediately prior to the Forward Split multiplied by two, with distribution occurring\non March 25, 2026.\n\n \n\nF-21\n\n \n\n \n\n**Note\n11 – Private Placement**\n\n** **\n\nOn\nApril 24, 2025, JFB Construction Holdings invested $1,000,000 in CM OB Hotel Owner, LLC, a Delaware limited liability company formed\nto acquire, develop, and operate a 117-room Courtyard by Marriott hotel in Olive Branch, Mississippi. The investment was made through\na private placement offering of up to $5,000,000 in Class A Membership Interests at $1,000 per unit, pursuant to Regulation D, Rule\n506(c). The minimum investment was $100,000, with proceeds designated for the acquisition, development, and operation of the hotel.\n\n \n\nJFB\nholds a 19.5% ownership interest in the Class A Membership Interests of CM OB Hotel Owner, LLC. This ownership percentage is below\nthe 20% threshold required for equity method accounting under U.S. GAAP; therefore, the investment is currently being carried at cost\nbasis, as the entity is private.\n\n \n\nClass\nA Members are entitled to an 8% cumulative, non-compounding preferred return (beginning upon hotel operations), a return of capital,\nand a share of distributable cash as outlined in the offering subscription agreement. Pursuant to a side agreement dated April 24, 2025,\nJFB Construction Holdings is exempt from the standard promote structure. The Company does not possess ownership or majority voting rights\ndue to minimal investment in CM OB Hotel Owner, LLC. Furthermore, the Company does not exercise control over the activities that significantly\ninfluence the economic performance of CM OB Hotel Owner, LLC\n\n \n\n**Note\n12 – Subsequent Event**\n\n** **\n\nOn\nFebruary 17, 2026, the Company announced that it has entered into a definitive agreement to combine with XTEND, a software-first defense\ntechnology company anchored by its AI XTEND Operating System (XOS) in an all-stock transaction.\n\n \n\nOn\nFebruary 18, 2026, the Company closed on a PIPE financing agreement with American Ventures, LLC, Series XIV JFB totaling $10,025,000.\nAmerican Ventures, LLC Series XIV JFB, following negotiations with Dominari Securities and the Company, received 1,604,000 shares of\nJFB Class A Common Stock at a price of $6.25 per share.\n\n \n\nDate\nof Management Review\n\n \n\nThe\nCompany evaluates events and transactions occurring subsequent to the date of the financial statements for matters requiring recognition\nor disclosure in the financial statements. The accompanying financial statements consider events through March 31, 2026, the date that\nthe financial statements were available to be issued.\n\n \n\nF-22"}