DeFi Development Corp.

Janover Inc. (“Janover” or the “Company”) was originally formed as Janover Ventures, LLC on November 28, 2018, in the State of Florida as a limited liability company and converted to a corporation, incorporated in the State of Delaware on March 9, 2021. The Company provides a AI-powered online platform that connects the commercial real estate industry by providing data and software subscriptions and other value-added services to multifamily and commercial property professionals and connect them with commercial property lenders and brokers. These property lenders include traditional banks, credit unions, real estate investment trusts (“REITs”), debt funds, and other financial institutions looking to deploy capital into commercial mortgages. The Company is headquartered in Boca Raton, Florida.

Reverse Stock Split

On December 30, 2024, the Company effected a 1-for-8 reverse stock split of its outstanding common stock. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split. There was no effect on the number of shares of common stock or preferred stock authorized for issuance under the Company’s certificate of incorporation or the par value of such securities.

Initial Public Offering

On July 24, 2023, the Company’s registration statement on Form S-1 relating to its initial public offering of its common stock (“the IPO”) was declared effective by the Securities and Exchange Commission (“SEC”). The IPO closed on July 27, 2023, which resulted in the sale of 176,563 shares of common stock at a public offering price of $4.00 per share. The aggregate net proceeds to the Company at the closing of the IPO were approximately $5.0 million after deducting underwriting discounts and commissions of approximately $0.4 million and offering expenses (excluding other offering costs incurred in connection with the IPO) of approximately $0.3 million.

Acquisition of Groundbreaker

On November 17, 2023, the Company, and Groundbreaker Tech Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Buyer”), simultaneously (i) entered into an Asset Purchase Agreement with Groundbreaker Technologies Inc., a Delaware corporation (“Seller”), and its principal stockholder, pursuant to which the Buyer agreed to acquire substantially all of the assets of the Seller and certain liabilities related to Seller’s business activities (the “Seller’s Business”) and (ii) closed the Seller acquisition. Following the closing of the Seller acquisition, the Purchased Assets are now being held by the Buyer, and the Seller’s Business is being operated by and through the Company. See Note 4 for further detail.

Janover Insurance

On November 27, 2023, the Company formed a wholly-owned subsidiary, Janover Insurance, a Delaware corporation. With the new subsidiary, the Company aims to transform the landscape of commercial property insurance through the application of generative AI and its unique access to data on the commercial property market. The Company has received licensing in certain states and is pursuing licensure in various additional states.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company sustained net losses of approximately $2.7 million and $3.4 million during the years ended December 31, 2024 and 2023, respectively, and had cash used in operations of approximately $2.4 million during the year ended December 31, 2024.

Management’s Plans

As of the issuance date of these consolidated financial statements, the Company expects that its cash and cash equivalents of approximately $2.5 million as of December 31, 2024, will be sufficient to fund its operating expenses and capital expenditure requirements for at least one year from the date these financial statements are issued.

Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”). Certain prior period amounts have been reclassified to conform to current year presentation.

Principles of Consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All inter-company transactions and balances have been eliminated upon consolidation.

Use of Estimates

The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the valuation of assets acquired, and liabilities assumed pursuant to business combinations, contingent consideration, and stock-based compensation. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company generally maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that may exceed federally insured limits. The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. At December 31, 2024 and 2023, the Company’s cash and cash equivalents were held at accredited financial institutions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

Fair Value Measurements

Certain assets and liabilities of the Company are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

The carrying values of the Company’s accounts receivable, prepaid expenses and accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

At December 31, 2024 and 2023, the Company had approximately $2.5 million and $5.1 million in cash and cash equivalents, of which approximately $1.4 million and $3.8 million were invested in money market funds which are classified within Level 1, all respectively. Also, as of December 31, 2024 and 2023, the Company had approximately $340,000 and $0 in marketable securities, respectively, which were valued with a quoted price in an active market. The securities were classified as a Level 1 financial asset.

The Company’s contingent consideration recorded in connection with the Groundbreaker acquisition (see Note 5) is a Level 3 liability. The liability is valued using a probability weighted analysis of the respective earn out provisions.

See Note 5 and 7 for fair value disclosures of future equity obligations.

Marketable Securities

In August 2024, the Company entered into a contract with a customer whereby the Company received common shares of the customer in exchange for the Company’s services. The equity securities have a readily determinable fair value as sales prices and bid-and-asked quotations are available in the over-the-counter market and publicly reported. The fair value of the marketable securities received was approximately $226,000. The securities are recognized as a Level 1 instrument.

Under Accounting Standards Codification (“ASC”) 321,Investments – Equity Securities, equity securities are measured at fair value and any changes in fair value are recorded to earnings. During the year ended December 31, 2024, the Company recorded a gain on the change in fair value of marketable securities of approximately $114,000, which was included in other income (expense) in the consolidated statement of operations. As of December 31, 2024, the fair value of the marketable securities was approximately $340,000.

Accounts Receivable

Accounts receivable are derived from services delivered to customers and are stated at their net realizable value. A portion of the accounts receivable balance was classified as non-current due to the long-term nature of certain software subscription agreements. The Company reviews its receivables on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or perceived collection issues. Any balances that are eventually deemed uncollectible are written off after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2024 and 2023, the Company determined there wasno allowance for doubtful accounts necessary.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation expense is recognized using the straight-line method over the estimated useful life of the asset, which is three (3) to five (5) years for computer and hardware and five (5) to seven (7) years for the Company’s furniture and fixtures. Estimated useful lives are periodically assessed to determine if changes are appropriate. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation or amortization are eliminated from the balance sheets and any resulting gains or losses are included in the statement of operations in the period of disposal.

Intangible Assets

Intangible assets represent various domain names the Company purchased. The Company owns the domain names indefinitely. Costs to renew domains are expensed as incurred. In connection with the Groundbreaker acquisition, the Company identified developed technology and the brand name (see Note 4). During the fourth quarter of fiscal 2024, the company recognized an impairment in the amount of $83,000, which was Groundbreaker’s brand name intangible asset. In the fourth quarter of 2024 the Groundbreaker brand name and related services were changed to Janover Connect. As there are no future cash flows expected from the brand name, it was considered impaired.

The Company amortizes the developed technology intangibles on a straight-line basis over a useful life of three (3) years.

Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. During the year ended December 31, 2024, the Company recorded impairment expense of approximately $83,000 (see Note 5).

Acquisitions, Goodwill and Other Intangible Assets

The Company allocates the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess value of the cost of an acquired business over the estimated fair value of the assets acquired and liabilities assumed is recognized as goodwill. The Company uses a variety of information sources to determine the value of acquired assets and liabilities, including identifiable intangibles.

Goodwill and indefinite-lived intangibles are not amortized but are instead evaluated annually for impairment as part of the Company’s annual financial review, or when indicators of a potential impairment are present. The annual test for impairment performed for goodwill can be qualitative or quantitative, taking into consideration certain factors surrounding the fair value of the goodwill including, level by which fair value exceeded carrying value in the prior valuation, as well as macroeconomic factors, industry conditions and actual results at the test date.

On November 17, 2023, the Company acquired intangible assets of approximately $660,000 and recognized goodwill of approximately $607,000 pursuant to the Groundbreaker acquisition. The acquired goodwill represents the value in excess of the net assets and liabilities acquired at the acquisition date.

As of December 31, 2024 and 2023, the Company determined that no impairment was necessary on the goodwill.

Contingent Consideration

The Company records a contingent consideration liability relating to potential earnout payments based on revenue targets pursuant to the Groundbreaker acquisition. The estimated fair value of the contingent consideration is recorded using significant unobservable measures and other fair value inputs and is therefore classified as a Level 3 financial instrument.

The Company estimates and records the acquisition date fair value of contingent consideration as part of purchase price consideration for acquisitions. Additionally, each reporting period, the Company estimates changes in the fair value of contingent consideration and recognizes any change in fair in the consolidated statement of operations. The estimate of the fair value of contingent consideration requires very subjective assumptions to be made of future operating results, discount rates and probabilities assigned to various potential operating result scenarios. Future revisions to these assumptions could materially change the estimate of the fair value of contingent consideration and, therefore, materially affect the Company’s future financial results. The contingent consideration liability is to be settled with the issuance of shares of common stock once contingent provisions set forth in respective acquisition agreements have been achieved. Upon achievement of contingent provisions, respective liabilities are relieved and offset by increases to common stock and additional paid-in capital in the stockholders’ equity section of the Company’s consolidated balance sheets.

Revenue Recognition

The Company accounts for revenue under ASC 606*, Revenue from Contracts with Customers*. The Company determines revenue recognition through the following steps:

Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. As a practical expedient, the Company does not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less.

The Company derives its revenue primarily from platform fees and subscription revenue. Platform fees include referral and advisory fees generated from multifamily and commercial real estate and small business debt transactions. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and the promised services have been transferred to the customer. The Company’s platform services are generally transferred to the customer at a point in time, which is when the underlying lending transaction has closed and successfully funded. The Company may act as an agent for both lenders and borrowers.

A trade receivable is recorded when an unconditional right to invoice and receive payment exists, such that only the passage of time is required before payment of consideration is due. Timing of revenue recognition may differ from the timing of invoicing to customers. Certain performance obligations may require payment before delivery of the service to the customer.

Subscription revenue is derived from the following:

As of December 31, 2024 and 2023, there was approximately $341,000 and $83,000 in deferred revenue, respectively, the majority of which is pertaining to these SaaS fees received in advance. However, due to the long-term nature of certain SaaS agreements a portion of the deferred revenue balance was classified as non-current. The revenue will be recognized over the remaining term of the SaaS agreements in fiscal 2025 and beyond.

The disaggregation of revenue is as follows:

Subscription revenue includes SaaS fees from our Janover Pro, Janover Connect, Janover Engage, and Janover AI software, and annual insurance premium commissions from our Insurtech subsidiary. All SaaS arrangements are not subject to cancellation or refund.

Cost of Revenues

The majority of our cost of revenues consist of direct software and hosting fees associated with Janover Connect SaaS activities.

Advertising and Promotion

Advertising and promotional costs are expensed as incurred. Advertising expenses were approximately $125,000 and $124,000 for the years ended December 31, 2024 and 2023, respectively.

Research and Development Costs

Research and development costs include costs to develop and refine technological processes used to carry out business operations, including personnel costs for website and non-capitalizable software design and development functions and related software and hosting costs. Research and development costs charged to expense were approximately $655,000 and $792,000 for the years ended December 31, 2024 and 2023, respectively.

Concentrations

During the year ended December 31, 2024, three lenders accounted for 36% of the Company’s revenues. During the year ended December 31, 2023, two lenders accounted for 39% of the Company’s revenues. The Company may be negatively affected by the loss of one of these lenders.

Future Equity Obligations

The Company has issued Simple Agreements for Future Equity (“SAFEs”) in exchange for cash financing. These funds were classified as long-term liabilities prior to their conversion into shares of common stock upon the Company’s IPO (see Note 5).

The Company has accounted for its SAFE investments as liability derivatives under the FASB’s ASC section 815-40 and ASC section 815-10. If any changes in the fair value of the SAFEs occur, the Company will record such changes through earnings, under the guidance prescribed by ASC 825-10. As of December 31, 2024 and 2023, the Company had no future equity obligations.

Offering Costs

The Company complies with the requirements of ASC 340,Other Assets and Deferred Costs, with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. The deferred offering costs are charged to stockholders’ equity upon the completion of an offering or to expense if the offering is not completed. As of December 31, 2024, the Company had capitalized approximately $114,000 in deferred offering costs.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718,*Compensation – Stock Compensation.*The Company measures all stock-based awards granted to employees, directors and non-employee consultants based on the fair value on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. For awards with service-based vesting conditions, the Company records the expense for using the straight-line method. For awards with performance-based vesting conditions, the Company records the expense if and when the Company concludes that it is probable that the performance condition will be achieved. The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient’s costs are classified.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company was a private company and lacks company-specific historical and implied volatility information for its stock. Therefore, it estimates its expected stock price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future. Forfeitures are recognized as they occur. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions.

The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

Net Loss per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2024, diluted net loss per share is the same as basic net loss per share. As of December 31, 2024, there were an indeterminable number of shares that were potentially dilutive based on the Company’s outstanding future equity obligations (see Note 7). Other potentially dilutive items outstanding as of December 31, 2024 and 2023 are as follows:

Recently Adopted Accounting Pronouncements

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

Groundbreaker Acquisition

The Company evaluated the Asset Purchase Agreement pursuant toASC 805and*ASU 2017-01, Topic 805, Business Combinations.*The Company first determined that the Seller met the definition of a business as it includes inputs and a substantive process that together significantly contribute to the ability to create outputs. The Seller’s results of operations are included in the Company’s consolidated financial statements from the date of acquisition. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition. The purchase price allocation is preliminary and could be significantly revised as a result of additional information obtained regarding assets acquired and liabilities assumed and revisions of estimates of fair values of tangible assets and related deferred tax assets and liabilities. The Company will finalize its valuation and the allocation of the purchase price, along with required retrospective adjustments, if any, within a year following the acquisition date.

On November 17, 2023, the Company issued 131,489 shares of common stock pursuant to the Asset Purchase Agreement for a fair value of approximately $946,000, or $7.20 per share. Additionally, the Company paid the Seller $60,000 in cash consideration. Additionally, the Company issued the right to three earnout payments totaling up to $4,000,000 in value combined (the “Earnout Payments”) which may be paid to Seller, subject to and payable in accordance with earnout thresholds specified in the Purchase Agreement. Each of these Earnout Payments may be comprised of cash and/or shares of common stock (the “Earnout Shares”), and will have to be earned during the period between closing and December 31, 2026. The Seller has the option to receive either cash or shares of common stock. The Earnout Shares will be valued at the greater of the closing price at the time of the closing, or the market price at the time of issuance based on the thirty-day volume weighted average price of the Common Stock prior to the date of the issuance in the applicable measurement year. In accordance with the earn out provisions per the Asset Purchase Agreement, the Company determined an initial fair value of approximately $179,000 based on the fair value of the shares at the acquisition date and probabilities of the respective earnout terms (see Note 5).

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents the Company’s financial results as if the Groundbreaker acquisition had occurred as of January 1, 2023. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of, nor does it purport to project, the Company’s future financial results. The following unaudited pro forma financial information includes incremental intangible asset amortization as a result of the acquisition. The pro forma information does not give effect to any estimated and potential cost savings or other operating efficiencies that could result from the acquisition:

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows:

Marketable Securities

In August 2024, the Company entered into a contract with a customer whereby the Company received common shares of the customer in exchange for the Company’s services. The equity securities have a readily determinable fair value as sales prices and bid-and-asked quotations are available in the over-the-counter market and publicly reported. The fair value of the marketable securities received was approximately $226,000. The securities are recognized as a Level 1 investment.

Under ASC 321, equity securities are measured at fair value and any changes in fair value are recorded to earnings. During the year ended December 31, 2024, the Company recorded a gain on the change in fair value of marketable securities of approximately $114,000, which was included in other income (expense) in the consolidated statements of operations. As of December 31, 2024, the fair value of the marketable securities was approximately $340,000.

Future Equity Obligations

The Company measured the future equity obligations at fair value based on significant inputs not observable in the market, which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the future equity obligations uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. Changes in the fair value of the future equity obligations related to updated assumptions and estimates are recognized within the statements of operations.

The Company utilized a probability-weighted average approach based on the estimated market value of the underlying securities and the potential settlement outcomes of the future equity obligations, including a liquidity event or future equity financing as well as other settlement alternatives. Both the market value of the underlying securities and the probability of the settlement outcomes include unobservable Level 3 inputs.

As of December 31, 2022, the Company estimated a 95% probability of a liquidity event pursuant to the Company’s intent of an initial public offering and estimated the potential price per share of the offering. Immediately prior to the IPO, the Company revalued the remaining outstanding SAFEs using a 100% probability of an equity financing and $32.00 as the fair value of the underlying common stock.

The following table presents changes in future equity obligations measured at fair value for the years ended December 31, 2024 and 2023:

Contingent Consideration

The Company measured the contingent consideration liability at fair value based on significant inputs not observable in the market, which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the contingent consideration liability uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assesses these assumptions and estimates on an on-going basis as additional data impacting the assumptions and estimates are obtained. Changes in the fair value of the contingent consideration liability related to updated assumptions and estimates are recognized within the statements of operations.

The fair value of the contingent consideration liability related to the Company’s business combination is valued using the potential earnout payment schedule per the Groundbreaker Agreement, the underlying revenue projections of the Seller and revenue growth and volatility assumptions. In connection with the business combination, the Company utilized the following inputs for the fair value of the contingent consideration: industry revenue growth of (1.0%), revenue volatility of 148%, a discount rate of 13.9% and a term of 3 years. The Company determined there was no change in fair value as of December 31, 2024 as management does not believe the inputs to the original estimate have materially changed. The Company has also considered the reduction in time along with the increased revenue generated by the Groundbreaker entity.

The following table presents changes in future equity obligations measured at fair value for the years ended December 31, 2024 and 2023:

Property and Equipment

The following is a summary of property and equipment, net:

Depreciation expense was approximately $7,000 and $900 for the years ended December 31, 2024 and 2023, respectively.

Intangible Assets

The following is a summary of intangible assets:

The Company began amortizing the developed technology and customer base acquired in the Groundbreaker acquisition starting in 2024. During the fourth quarter of 2024, the Company recognized an impairment expense of approximately $83,000 pertaining to Groundbreaker’s brand name intangible asset. Groundbreaker’s brand was changed to Janover Connect, and therefore management determined to fully impair the brand name.

In 2020, the Company initiated a Regulation Crowdfunding (“Regulation CF”) offering of Crowdfunding Simple Agreement for Future Equity (“Crowd SAFE”) securities. Each Crowd SAFE agreement, which provided the right of the investors to future equity in the Company, are subject to a valuation cap of $20,000,000.

If there was an equity financing of at least $2,000,000 in gross proceeds before the instrument expired or is terminated, the Company may either continue the term of the Crowd SAFE without conversion, or issue to the investor a number of units of the CF Shadow Series, as applicable, sold in the equity financing. The CF Shadow Series represent the same type of equity interests sold (preferred or common securities) in the equity financing, however members in the Shadow Series shall have no voting rights. The number of units of the CF Shadow Series equal the purchase amount divided by the Conversion Price. The Conversion Price is equivalent to a) the Safe Price, defined as the valuation cap divided by the number of dilutive units outstanding, or b) the Discount Price, which is the price per unit of the equity interests sold multiplied by the discount rate of 90%; whichever calculation results in a greater number of equity interests. If the Company continues the term of the Crowd SAFE after the initial equity financing, and another equity financing occurs before the termination of the instrument, the Company may further continue the term of the Crowd SAFE or may issue the investor a number of units of the CF Shadow Series equal to the purchase amount by the first equity financing price.

Upon the Company’s IPO in July 2023, all remaining outstanding SAFEs were converted into 20,733 shares of common stock. As of December 31, 2024, and 2023, the fair value of SAFEs was $0 for both periods. See Note 5 for fair value disclosures.

Recapitalization and Amended and Restated Certificate of Incorporation

In April 2023, the Company filed with the Secretary of State of Delaware Series B Certificate of Designation, the Company is authorized to issue up to 1,000 shares of Series B Preferred Stock with a stated value of $1,000 per share.

The Company is authorized to issue 110,000,000 shares, consisting of 10,000,000 shares of preferred stock and 100,000,000 shares of common stock, both with a par value of $0.00001 per share.

As of December 31, 2024, there were 100,000 shares designated as Series A preferred stock.

The Company effected a 1-for-8 reverse stock split of its outstanding common stock on December 30, 2024. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split. There was no effect on the number of shares of common stock or preferred stock authorized for issuance under the Company’s certificate of incorporation or the par value of such securities.

Series A Preferred Stock

Each share of Series A Preferred Stock is entitled to 10,000 votes. The holders of shares of Preferred Stock are entitled to vote on all matters on which the common stock shall be entitled to vote.

The holders of the Series A Preferred Stock are not entitled to dividends. Upon the event of liquidation, dissolution or winding up of the Company, voluntary or involuntary, the holders of our Series A Preferred Stock would be entitled to receive the initial stated value of the Company’s preferred stock.

Series B Preferred Stock

All of the outstanding shares of Series B Preferred Stock shall automatically convert along with the aggregate accrued or accumulated and unpaid dividends thereon into an aggregate number of shares of common stock as is determined by dividing the stated value per share along with the aggregate accrued or accumulated and unpaid dividends on the outstanding shares of Series B Preferred Stock by the Conversion Price, which means 50% of the purchase price per share in a Qualified Public Offering.

Upon the Company’s IPO in July 2023, all shares of Series B Preferred Stock were converted into 62,500 shares of common stock.

Stock Transactions

2023 Transactions

On April 11, 2023, the Company sold 1,000 shares of Series B Preferred Stock to one accredited investor for an aggregate purchase price of $1,000,000, or value of $1,000 per share.

In the IPO, which closed on July 27, 2023, the Company issued and sold 176,563 shares of common stock at a public offering price of $32.00 per share. The aggregate gross proceeds to the Company from the IPO were approximately $5.6 million. The aggregate net proceeds to the Company from the IPO were approximately $5.0 million after deducting underwriting discounts and commissions of approximately $0.4 million and offering expenses of approximately $0.3 million.

Upon the Company’s IPO in July 2023, all shares of Series B Preferred Stock were converted into 62,500 shares of common stock. Upon the IPO, all outstanding SAFEs were converted into 20,733 shares of common stock. Upon the IPO, an aggregate of 16,908 shares of common stock were issued for services at a fair value of $32 per share. The Company recognized stock-based compensation expense of approximately $541,000 during the year ended December 31, 2023. Upon the IPO, an aggregate of 13,258 shares of common stock were issued pursuant to exercise of stock options for no proceeds.

Upon the IPO, an aggregate of 29,547 shares of common stock to employees and consultants were issued pursuant to the cancellation of stock options issued to such holders. The Company revaluated the cancelled options using the Black-Scholes options model immediately prior to modification and compared to the fair value of the shares issued at $32.00 per share and the remaining expense to be recognized under the original option grant. Accordingly, the incremental difference of approximately $571,000 was recognized as stock-based compensation expense in accordance with ASC 718-20-35 during the year ended December 31, 2023.

On November 17, 2023, the Company issued 131,489 shares of common stock pursuant to the Groundbreaker Acquisition for a fair value of approximately $946,000, or $7.20 per share.

2024 Transactions

In January 2024, a director exercised 2,199 options for shares of common stock for proceeds of approximately $1,000. In July 2024, the Company issued 14,706 shares of common stock in exchange for prepaid marketing services at a value of approximately $90,000. The marketing services contract is over a six-month period ending January 8, 2025. In September 2024, the Company issued 8,930 shares of common stock pursuant to accrued professional fees at a value of approximately $31,000. In September 2024, the Company repurchased 1,290 shares of common stock for $5,243. As of December 31, 2024, the Company had approximately $995,000 remaining in its share repurchase plan authorization, which was authorized by the Company’s Board on November 15, 2023.

Janover Inc. 2021 Equity Incentive Plan

In November 2021, the Board of Directors adopted the Company’s 2021 Equity Incentive Plan (the “2021 Plan”), effective as of November 1, 2021. The 2021 Plan provides for the grant of the following types of stock awards: (i) incentive stock options, (ii) non statutory stock options, (iii) stock appreciation rights, (iv) restricted stock awards, (v) restricted stock unit awards and (vi) other stock awards. The 2021 Plan is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any affiliate and provide a means by which the eligible recipients may benefit from increases in value of the common stock. The Board reserved 82,478 shares of common stock issuable upon the grant of awards.

Janover Inc. 2023 Equity Incentive Plan

In September 2023, the Board of Directors adopted the Company’s 2023 Equity Incentive Plan (the “2023 Plan”), effective as of September 29, 2023. The 2023 Plan provides for the grant of the following types of stock awards: (i) incentive stock options, (ii) stock appreciation rights, (iii) restricted stock awards, (iv) restricted stock unit awards and (v) performance awards. The 2023 Plan is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any affiliate and provide a means by which the eligible recipients may benefit from increases in value of the common stock. The Board reserved 187,500 shares of common stock issuable upon the grant of awards, which includes the 82,478 shares reserved per the 2021 Plan noted above. Stock options and restricted stock units comprise all of the awards granted since the 2023 Plan’s inception. The Company has historically granted stock options that vest between one and four years, with a contractual period of ten years. As of December 31, 2024, there were 71,169 shares available for grant under both the 2021 and 2023 Plans.

A summary of information related to stock options for the years ended December 31, 2024 and 2023 is as follows:

The weighted average duration to expiration for outstanding options at December 31, 2024 was 8.84 years.

The following table presents the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted:

The weighted average grant date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $2.56 and $7.36, respectively. Stock-based compensation expense related to stock options was approximately $214,000 and $343,000 for the years ended December 31, 2024 and 2023, respectively. Total unrecognized compensation cost related to non-vested stock option awards amounted to approximately $78,000 as of December 31, 2024, which will be recognized over a weighted average period of 2.16 years.

Warrants

In connection with the Company’s IPO, the Company granted an aggregate of 8,828 warrants to purchase common stock to the underwriters at an exercise price of $35.20, which is equal to 110% of the offering price. The warrants may be exercised beginning on January 25, 2024 until July 24, 2028.

Restricted Stock Units

In September 2023, the Company granted 28,125 restricted stock units (“RSUs”) under the 2021 Plan to the Chief Financial Officer (see Note 9). In July 2024 the Company granted 8,750 RSUs to the independent Board of directors in accordance with their Board of Director agreements. The RSUs vest over a period betweentwo andfour years. The Company recorded stock-based compensation expense of approximately $82,000 in the statements of operations for the year ended December 31, 2024. Total unrecognized compensation cost related to non-vested restricted common stock amounted to approximately $230,000 as of December 31, 2024, which is expected to be recognized over 2.47 years. As of December 31, 2024,28,086 RSUs remained unvested.

The following is a summary of RSU activity for the years ended December 31, 2024 and 2023:

Classifications

The following is a summary of stock-based compensation by type for the years ended December 31, 2024 and 2023:

Total stock-based compensation, including the cancellation of options, common shares issued for services and RSUs by type is as follows:

During the years ended December 31, 2024 and 2023, the Company incurred $0 and $128,267, respectively, to an entity owned by the Chief Executive Officer for compensation. During the years ended December 31, 2024 and 2023, the Company paid Innovar Consulting Corporation, a consulting firm, wholly owned by Mr. Marcelo Lemos, a director, $0 and $11,500, respectively, in consideration for consulting services rendered. The amounts are included in general and administrative expenses in the statements of operations.

Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate primarily to capitalization of research and development costs for tax purposes, stock compensation and net operating loss carryforwards. As of December 31, 2024 and 2023, the Company had net deferred tax assets before valuation allowance of approximately $1.7 million and $625,000, respectively.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The Company assessed the need for a valuation allowance against its net deferred tax assets and determined a full valuation allowance is required due to cumulative losses through December 31, 2024. Therefore, a valuation allowance of approximately $1.7 million and $625,000 was recorded as of December 31, 2024 and 2023, respectively. Valuation allowance increased by approximately $1,046,000 and $552,000 during 2024 and 2023, respectively. Deferred tax assets were calculated using the Company’s combined effective tax rate, which it estimated to be approximately 25.35%. The effective rate is reduced to 0% due to the full valuation allowance on its net deferred tax assets.

The Company’s ability to utilize net operating loss carryforwards will depend on its ability to generate adequate future taxable income. At December 31, 2024, the Company had net operating loss carryforwards available to offset future taxable income in the amounts of approximately $5.0 million, which can be carried forward indefinitely. Certain changes in ownership can result in a limitation on the amount of net operating loss and tax credit carryovers that can be utilized each year. As of December 31, 2024, management has not determined the extent of any such limitations, if any.

The Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and penalties related to any uncertain tax positions through its income tax expense.

The Company is subject to taxation in the U.S. and various state jurisdictions. The Company is not presently subject to any income tax audit in any taxing jurisdiction, though all tax years from 2021 on remain open to examination.

Lease Commitments

In February 2022, the Company entered into a lease agreement for office space in Boca Raton, Florida. The lease commenced on April 1, 2022, and expires on March 1, 2025 with monthly base rent ranging from approximately $4,400 to $4,700. The lease required a deposit of approximately $7,000, which is included in other assets in the balance sheet. Upon lease commencement, the Company recognized a right of use asset and liability of approximately $143,000 using a discount rate of 6.0%.

The following is a summary of future annual minimum lease payments as of December 31, 2024:

Lease expense was approximately $95,000 and 89,000 for the years ended December 31, 2024 and 2023, respectively.

Contingencies

The Company may be subject to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material adverse effect on its business, financial condition or results of operations.

Through the issuance date, the Company has issued 12,825 shares of common stock pursuant to a Form S-3 registration statement for net proceeds of approximately $70,000.

In February 2025, the Company granted an aggregate of 26,450 stock options to purchase common stock to board members. The options have an exercise price of $5.35 per share and vest over athree-year period.

In February 2025, the Company extended its lease agreement, which originally terminated on March 31, 2025, to March 31, 2026.

Management has evaluated subsequent events through March 27, 2025, the date the condensed financial statements were available to be issued. Based on this evaluation, no additional material events were identified which require adjustment or disclosure in these condensed financial statements.