DeFi Development Corp.
For the period ended Mar 31, 2025. Filed May 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 14, 2025
DFDV$3.35+5.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001575872-24-001133
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001213900-25-042977
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 104 current paragraphs.
27 unchanged; 27 reworded; 48 added; 46 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 22 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (48)
Current report
Subsequent to March 31, 2025, the Company adopted a new treasury policy and strategy under which the principal holding in its treasury reserve on the balance sheet will be allocated to digital assets, starting with Solana (“SOL”) by applying a proven public-market treasury model to an asset that’s earlier in its lifecycle, structurally reflexive, and underexposed as compared to Bitcoin. The Board of Directors approved the Company’s treasury policy on April 4, 2025, authorizing the long-term accumulation of SOL. The Company also aims to operate one or more SOL validators, enabling it to stake its treasury assets, participate in securing the network, and earn rewards that can be reinvested. This treasury strategy reflects a belief that SOL represents a high-conviction, long-term cryptoasset with superior technical performance, robust developer traction, and growing institutional adoption. The Company’s approach involves acquiring SOL directly—both through market purchases and strategic partnerships—and staking its holdings via Company-operated validators to generate native staking yield. This treasury initiative enhances the Company’s capital allocation strategy and does not affect its core commercial real estate platform, which remains fully operational. The AI-powered marketplace, software offerings, and subscription services supporting the multifamily and commercial property ecosystem continue to be a central part of the Company’s business.
Current report
We currently serve hundreds of thousands of web users annually, including multifamily and commercial property owners and developers applying for billions of dollars of debt financing per year, professional service providers, and thousands of multifamily and commercial property lenders including more than 10% of the banks in America, credit unions, REITs, debt funds, Fannie Mae® and Freddie Mac® multifamily lenders, FHA multifamily lenders, commercial mortgage-backed securities (“CMBS”) lenders, Small Business Administration (“SBA”) lenders, and more.
Current report
Subsequent to March 31, 2025, the Company will generate incremental revenue through two primary channels tied to its treasury strategy: (1) staking SOL rewards and (2) validator-based monetization. The Company stakes SOL through its validator infrastructure, earning native yield.
Current report
Our data and software offerings are generally offered on a subscription basis as software as a service (“SaaS”). DeFi Development corp. (formerly Janover Inc.) provides data, transparency, and tools, generally as annual software subscriptions, to help stakeholders navigate the most complex components of the multifamily and commercial property lifecycles – debt (Janover Pro, Janover Capital Markets), insurance (Janover Insurance), equity (Janover Connect, Janover Engage), and technology (Janover AI).
Current report
In fiscal 2025, we will continue to focus on transitioning from transactional platform fee debt revenue to the more predictable and profitable recurring SaaS subscription revenue. As of March 31, 2025, our annual recurring revenue (“ARR”) reached approximately $1.4 million, compared to approximately $287,000 as of March 31, 2024, an increase of 379%. ARR increased sequentially by approximately 69%, which was approximately $812,000 for the year ended December 31, 2024. ARR represents an annualization of our recurring revenue, which assumes a full year of revenue. As of March 31, 2025 and 2024, there was approximately $966,000 and $341,000 in deferred revenue, respectively, the majority of which is pertaining to SaaS subscription fees received in advance. The revenue will be recognized over the remaining term of the SaaS agreements over the next three years.
Current report
In 2025, we will continue to better connect the commercial real estate industry by building tools that reduce frictions in transactions and that provide broader access to better data than entrenched incumbents. We will also further our treasury strategy focused on the accumulation of SOL and generating additional incremental revenue through staking SOL rewards and validator-based monetization. Our priorities are as follows:
Current report
As part of our capital allocation strategy for assets that are not required to provide immediate working capital for our ongoing operations, we have invested and will continue to accumulate SOL. As of the date of this filing, we had purchased approximately $103 million SOL, including staking rewards. The price of SOL has historically been subject to dramatic price fluctuations and is highly volatile. Moreover, digital assets, such as SOL, are relatively novel and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the liquidity or value of SOL.
Current report
Any decrease in the fair value of SOL could require us to incur an unrealized loss on the SOL investment, and such charge could be material to our financial results for the applicable reporting period, which may create significant volatility in our reported earnings. Any decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on the market price of our common stock. In addition, if investors view the value of our common stock as dependent upon or linked to the value or change in the value of our SOL holdings, the price of SOL may significantly influence the market price of our common stock.
Current report
Historically, crypto markets have been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currency markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our SOL at favorable prices or at all. Further, SOL we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered SOL or otherwise generate funds using our SOL holdings, including in particular during times of market instability or when the price of SOL has declined significantly. If we are unable to sell our SOL, enter into additional capital raising transactions using SOL as collateral, or otherwise generate funds using our SOL holdings, or if we are forced to sell our SOL at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.
Current report
Nasdaq Compliance Notice
Current report
On January 15, 2025, the Company received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) that the Company has regained compliance with the minimum closing bid price requirement under Nasdaq Listing Rule 5550(a)(2). As previously disclosed, on July 16, 2024, the Company was notified by Nasdaq that it was not in compliance with Nasdaq Listing Rule 5550(a)(2) because its common stock failed to maintain a minimum closing bid price of $1.00 per share for 30 consecutive business days. To regain compliance, the Company was required to maintain a minimum closing bid price of $1.00 per share for at least 10 consecutive trading days. This requirement was met on January 13, 2025.
Current report
Change of Control
Current report
On April 4, 2025, Blake Janover, then Chief Executive Officer and Chairman of DeFi Development Corp (formerly Janover Inc.), entered into a Stock Purchase Agreement (“Purchase Agreement”) with DeFi Dev LLC, a Delaware limited liability company (“DeFi Dev LLC”), and 3277447 Nova Scotia Ltd, a corporation formed under the laws of Nova Scotia, Canada (“NS Corp”) to sell (i) 728,632 shares of Common Stock, with each share of common stock entitled to one vote per share and representing approximately 51.0% of the Company’s 1,579,946 issued and outstanding shares of common stock and (ii) 10,000 shares of Series A Preferred Stock of the Company, with each share of Series A Preferred Stock entitled to 10,000 votes per share on all matters entitled to be voted upon by the common stock unless otherwise prohibited by law. DeFi Dev LLC and NS Corp were previously unaffiliated parties to the Company. DeFi Dev LLC purchased 412,041 shares of common stock and 5,500 shares of Series A Preferred Stock for $2,253,235 utilizing funds contributed by its managing member and other members. A portion of the funds for the purchase of shares by DeFi Dev LLC came from a loan from Joseph Onorati. NS Corp purchased 316,591 shares of common stock and 4,500 shares of Series A Preferred Stock for $1,746,765 utilizing funds contributed by its controlling stockholder. The aggregate purchase price was $4,000,000. The transactions under the Purchase Agreement constituted a change in control of the Company.
Current report
Change in Management
Current report
Effective as of April 4, 2025, Samuel Haskell, Marcelo Lemos and Ned Siegel resigned from the Board of Directors of the Company (“the Board”) and, to the extent applicable, all committees thereof. The Directors’ resignations were not related to any disagreement with the Company. On April 4, 2025, the Board elected Joseph Onorati, Marco Santori and Zachary Tai as Directors of the Company, to fill the vacancies on the Board. Mr. Santori was appointed to serve on the Audit Committee and Nominating and Corporate Governance Committee of the Board and Mr. Tai was appointed to serve on the Audit Committee and Compensation Committee and Nominating and Corporate Governance Committee of the Board.
Current report
After such replacements, the new Board is composed of Mr. Janover, Mr. Caragol (independent), Mr. Onorati (chairman), Mr. Santori (independent) and Mr. Tai (independent). The Audit Committee is composed of Mr. Santori, Mr. Caragol and Mr. Tai. The Compensation Committee is composed of Mr. Caragol and Mr. Tai. The Nominating and Corporate Governance Committee is composed of Mr. Santori and Mr. Tai and Mr. Caragol.
Current report
On April 4, 2025, the Board made the following officer appointments:
Current report
On April 17, 2025, the Board appointed Fei “John” Han as Chief Financial Officer of the Company. Mr. Han brings over 15 years of experience across traditional finance and crypto, with a track record of leadership at some of the crypto industry’s most recognized institutions. Most recently, he served as CFO at blockchain-company Provable, and prior to that, held multiple senior roles at Binance including Vice President of Finance and Head of Finance for Europe, the Middle East, Africa, LATAM, and Canada. Earlier in his career, he led Strategic Finance at Kraken, where he worked closely with Parker White and Joseph Onorati and played a key role in scaling the business during a period of rapid growth. Han began his career in equity research at Goldman Sachs and later served as an investor at Nezu Asia Capital and Driehaus Capital.
Current report
Adoption of New Treasury Policy
Current report
The Company has adopted a treasury policy under which the principal holding in its treasury reserve on the balance sheet will be allocated to digital assets, starting with SOL by applying a proven public-market treasury model to an asset that’s earlier in its lifecycle, structurally reflexive, and underexposed as compared to Bitcoin. The Board approved the Company’s new treasury policy on April 4, 2025, authorizing long-term accumulation of SOL. The Company also aims to operate one or more SOL validators, enabling it to stake its treasury assets, participate in securing the network, and earn rewards that can be reinvested.* *
Current report
On April 4, 2025, the Company entered into securities purchase agreements (“Securities Purchase Agreements”) with the investors identified on the signature pages thereto (“Investors”), pursuant to which the Company issued to the Investors approximately $42.0 million in aggregate principal amount of convertible notes (“Notes”), which are convertible into the Company’s common stock, par value $0.00001 per share (“Common Stock”), together with warrants issued for each $1,000 in principal amount of convertible notes purchased to purchase (1) approximately 8.333 shares of Common Stock at an exercise price of $120 per share (“Warrant 1”) and (2) approximately 6.666 shares of Common Stock at an exercise price of $150 per share (“Warrant 2” and, together with Warrant 1, the “Warrants”).
Current report
The Notes accrue interest at a rate of 2.5% per year, paid in cash quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, and mature on April 6, 2030. The Notes are convertible at any time prior to the Maturity Date, conditioned on the requirement that the Company’s market capitalization equaled or exceeded $100 million on the day prior to the conversion date (“Market Capitalization Condition”). The conversion price has been set at $68.19, the last reported sale price of the Common Stock on The Nasdaq Stock Market on the date that the Company’s market capitalization first exceeded $100 million. The conversion price will not be adjusted, except for customary anti-dilution and dividend protection. Conversion of the Notes, together with any accrued and unpaid interest, if any, at the time of conversion will be settled in shares of Common Stock.
Current report
The holders of the Notes have the right to require the Company to repurchase the Notes at a price equal to 100% of par plus accrued and unpaid interest, if any, on April 6, 2028. In addition, the Company may redeem the notes on or after April 6, 2028, if the last reported sale price of the common stock has been at least 130% of the conversion price for at least 20 trading days during a period of 30 consecutive trading days at a price equal to 100% of par plus accrued and unpaid interest, if any.
Current report
The Notes provide that the holder may not convert any portion of such holder’s Notes to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding shares of Common Stock immediately after conversion, except that upon at least 61 days’ prior notice from the holder to the Company, the holder may increase the beneficial ownership limitation to up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the conversion. The Notes contain certain other customary covenants and customary events of default provisions.
Current report
The Warrants are exercisable immediately upon issuance and have a term of exercise equal to five years from the date of issuance. The Exercise Prices are subject to adjustments upon the issuance of stock dividends, and subdivision or combinations of shares of Common Stock by the Company.
Current report
Warrants for certain investors provide that the holder may not exercise any portion of such holder’s Warrants to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the Company’s outstanding shares of Common Stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to the Company, the holder may increase the beneficial ownership limitation to up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise.
Current report
Change of Independent Auditor
Current report
dbbmckennon, an independent registered public accounting firm, resigned as our independent registered public accounting firm on April 21, 2025, and we appointed Wolf & Company, P.C., as our independent registered public accounting firm, effective as of April 21, 2025, to audit and report on our consolidated financial statements for the year ended December 31, 2025. The change of auditors was due to the specific subject matter expertise required to audit the Company’s new business strategy and crypto treasury related assets. The audit reports on the Company’s consolidated financial statements for the fiscal years ended December 31, 2024 and 2023, did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. During the fiscal years ended December 31, 2024 and 2023, (i) there were no disagreements, as defined in Item 304(a)(1)(iv) of Regulation S-K, between the Company and its auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the Auditor, would have caused the Auditor to make reference to the subject matter of such disagreements in connection with its reports on the Company’s financial statements for such years and interim period, and (ii) there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.
Current report
Stock Options & RSUs Awards
Current report
In April 2025, the Company granted approximately 157,000 stock options and approximately 32,000 RSUs under the Company’s 2023 Equity Incentive Plan to the Directors, Executive Officers and certain key employees of the Company as a retention and incentive mechanism to attract and retain top talent in a competitive market. On April 9, 2025, the Board approved to increase to the Company’s 2023 Plan from the initial number of shares of common stock that may be subject to awards (as defined in the 2023 Plan) and granted under the 2023 Plan to be equal to 500,000 Shares (on a post-reverse split basis), subject to stockholder’s approval.
Current report
Corporate Name Change
Current report
Effective April 17, 2025, the Company changed its name from “Janover Inc.” to “DeFi Development Corp.” (“Name Change”). In connection with the Name Change, we have applied to change the ticker symbol for the Company’s common stock to “DFDV” on the Nasdaq Capital Market, which was changed on May 5, 2025.
Current report
SOL Capital Allocation
Current report
As part of our capital allocation strategy for assets that are not required to provide working capital for our ongoing operations, we have invested and will continue to invest in SOL. As of the date of this filing, we had purchased approximately $103 million SOL, including staking rewards. The price of SOL has historically been subject to dramatic price fluctuations and is highly volatile. Moreover, digital assets, such as SOL, are relatively novel and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the liquidity or value of SOL.
Current report
On May 1, 2025, the Company entered into a securities purchase agreement (“Securities Purchase Agreement”) with the investors identified on the signature pages thereto (“Investors”) and a related registration rights agreement in connection with the issuance and sale in a private placement of the following securities to the Investors for gross proceeds of approximately $24.0 million: (i) 315,838 shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share (“Common Stock”) and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 207,679 shares of Common Stock upon the exercise of the Pre-Funded Warrants at an exercise price of $0.01 per share. The purchase price for one share of Common Stock was $46.00 and the purchase price for one Pre-Funded Warrant was $45.99 per share.
Current report
Validator Business Acquisition
Current report
On May 1, 2025, the Company has entered into a definitive agreement to acquire Solsync Solutions Partnership, a SOL validator business owned by Parker White, our Chief Investment and Operating Officer, with an average delegated stake of approximately 500,000 SOL (valued at approximately $75.5 million). The purchase price of $3.5 million will be paid through a combination of $3.0 million in restricted JNVR stock (86,412 common shares) and $500,000 in cash. Upon completion, the validator operation will be rebranded as DeFi Development Corp., its staking rewards will be integrated into the Company’s revenue streams, and all SOL owned by DeFi Development Corp. will be self-staked through the newly acquired validator business.** **This transaction with Mr. White was an approved related party transaction by our Board of Directors.
Current report
Seven-For-One Forward Stock Split
Current report
On May 6, 2025, the Company Board of Directors have approved a seven-for-one forward stock split of the Company’s issued and outstanding common shares. The stock split will result in each shareholder of record as of the close of business on May 19, 2025, receiving six additional shares for every one share held, for a total of seven shares of common stock. The implementation of the stock split is subject to the filing of an amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, which the Company expects to file on or about May 19, 2025. Subject to final approval by the Nasdaq Capital Market, trading is expected to begin on a post-stock split adjusted basis at the market open on or about May 20, 2025. As a result of the stock split, proportionate adjustments will be made to the number of shares of common stock issuable under the Company’s equity incentive plans and the number of shares underlying outstanding equity awards, as well as to the exercise price of outstanding stock options.
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Removed paragraphs (46)
Previous report
TEM
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MANAGEMENT’S
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(equity marketplace)
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, and Janover Pro
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(lender marketplace),
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an increasing portion of our total revenue is now recurring software subscription revenue.
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In fiscal 2024, we plan to focus on our growth opportunities which are also the foundations of our competitive advantage. We are focused on executing in the following ways:
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Public Offering of Common Stock and/or Pre-Funded Warrants – Regulation A
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On July 2, 2024, the Company filed an offering statement on Form 1-A with the Securities and Exchange Commission under the Securities Act of 1933, as amended. The Company’s Form 1-A is yet to be qualified.
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Nasdaq Deficiency Notice Dated July 16, 2024 Notice
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On July 16, 2024, the Company received a letter from The Nasdaq Stock Market advising that the Company did not meet the minimum $1.00 per share bid price requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Marketplace Listing Rule 5550(a)(2) because the closing bid price per share for the Company’s common stock had closed below $1.00 for the previous 30 consecutive business days (the “Bid Price Rule”). The Company was given until January 13, 2025, to regain compliance with the Bid Price Rule.
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ATM Offerings
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Revenue
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Revenue for the three months ended September 30, 2024 was approximately $619,000 as compared to approximately $584,000 for the three months ended September 30, 2023, an increase of approximately $35,000, or 6%. Revenue for the three months ended September 30, 2024 increased sequentially by approximately 40% compared to the three months ended June 30, 2024. During the three months ended September 30, 2024 there were 36 transactions that closed on our marketplace, compared to 60 during the three months ended September 30, 2023. The average revenue per transaction was approximately $12,000 in the three months ended September 30, 2024, compared to approximately $10,000 for the three months ended September 30, 2023. This 26% increase in average revenue per transaction was the result of a change in the average loan size during the three months ended September 30, 2024 compared to the similar period in the prior year. Our average revenue per transaction closed will vary from period to period, depending on the size of the underlying loan transactions in any given period. We will focus our efforts on revenue growth, with an emphasis on our most profitable cohorts of customers. We will target increasing both our number of transactions closed and our revenue per transaction closed. During fiscal 2024, we focused on larger loan opportunities, which should increase our average loan size. With the acquisition of Groundbreaker and the recent launch of our Insurtech, an increasing portion of our total revenue will transition to recurring revenue, where we receive annual, quarterly, and monthly subscriptions, and annual insurance premium commissions. For the quarter ended September 30, 2024 approximately 22% of our total revenue was recurring revenue compared to 20% for the quarter ended June 30, 2024. There was no recurring revenue for the comparable periods in fiscal 2023. The Company will continue to migrate our revenue to recurring and subscription revenue for the remainder of fiscal 2024 and beyond.
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For the quarter ended September 30, 2024 subscription revenue was approximately $134,000 compared to $0 for the quarter ended September 30, 2023. For the quarter ended September 30, 2024 our annual recurring revenue (“ARR”) run-rate reached approximately $480,000, compared to no annual recurring revenue in the prior year. ARR increased sequentially by approximately 58%, which was approximately $303,000 for the three months ended June 30, 2024. ARR represents an annualization of our recurring revenue, which assumes a full year of revenue.
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Cost of Revenue
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Other Income (Expense)
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Nine Months Ended September 30, 2024, Compared to the Nine Months Ended September 30, 2023
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Revenue
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Revenue for the nine months ended September 30, 2024 was approximately $1.5 million as compared to approximately $1.7 million for the nine months ended September 30, 2023, a decrease of approximately $182,000, or 11%. During the nine months ended September 30, 2024 there were 92 transactions that closed on our marketplace, compared to 154 during the nine months ended September 30, 2023. The average revenue per transaction was approximately $12,000 in the nine months ended September 30, 2024, compared to approximately $11,000 for the nine months ended September 30, 2023. This 9% increase in average revenue per transaction was the result of a change in the average loan size during the nine months ended September 30, 2024 compared to the similar period in the prior year. Our average revenue per transaction closed will vary from period to period, depending on the size of the underlying loan transactions in any given period. We will focus our efforts on revenue growth, with an emphasis on our most profitable cohorts of customers. We will target increasing both our number of transactions closed and our revenue per transaction closed. During fiscal 2024, we focused on larger loan opportunities, which should increase our average loan size. With the acquisition of Groundbreaker and the recent launch of our Insurtech, an increasing portion of our total revenue will transition to recurring revenue, where we receive annual, quarterly, and monthly subscriptions, and annual insurance premium commissions. For the nine months ended September 30, 2024 approximately 20% of our total revenue was recurring revenue. There was no recurring revenue for the comparable periods in fiscal 2023. The Company will continue to migrate our revenue to recurring and subscription revenue for the remainder of fiscal 2024 and beyond.
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For the nine months ended September 30, 2024 subscription revenue was approximately $295,000 compared to $0 for the nine months September 30, 2023. At September 30, 2024 our annual recurring revenue (“ARR”) run-rate reached approximately $480,000, compared to no annual recurring revenue in the prior year. ARR increased sequentially by approximately 58%, which was approximately $303,000 for the six months ended June 30, 2024. ARR represents an annualization of our recurring revenue, which assumes a full year of revenue.
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Cost of Revenue
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Operating Expenses
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Sales and marketing expenses
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Our sales and marketing costs are primarily comprised of personnel and advertising costs. Sales and marketing expenses for the nine months ended September 30, 2024 were approximately $1.1 million, compared to approximately $1.4 million for the nine months ended September 30, 2023, a decrease of approximately $245,000, or 18%. The majority of the decrease can be attributed to a decrease in stock-based compensation during the nine months ended September 30, 2024. Stock-based compensation for the nine months ended September 30, 2024 was approximately $9,000 compared to approximately $513,000 for the nine months ended September 30, 2023, a decrease of approximately $504,000 which was primarily related to the issuance of common stock upon our IPO for services, cancellation of employee stock options and issuance of common stock in connection with the IPO in the prior year. Offsetting this decrease was an increase in compensation and benefits expense of approximately $228,000 during the nine months ended September 30, 2024, due to an increase in employees, compared to the same period in 2023.
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Research and development expenses
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Our research and development costs are primarily comprised of personnel costs and software license fees to support the development of our marketplace. Research and development expenses for the nine months ended September 30, 2024 were approximately $479,000, compared to approximately $443,000 for the nine months ended September 30, 2023, an increase of approximately $36,000, or 8%. The majority of the increase can be attributed to an increase in compensation and benefits expense during the nine months ended September 30, 2024, due to an increase in employees, compared to the same period in 2023. Offsetting this increase in research and development expenses for the nine months ended September 30, 2024, was approximately $200,000 reduction in stock-based compensation expense, which was primarily related to the issuance of common stock upon our IPO for services, cancellation of employee stock options and issuance of common stock in connection with the IPO in the prior year. We will continue to focus on developing our digital marketplace and our AI for the benefit of driving customer value on both sides of our marketplace which we believe will drive long term value to customers and our shareholders.
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General and administrative expenses
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Our general and administrative costs include personnel costs, accounting, legal, rent, and other overhead expenses. General and administrative expenses for the nine months ended September 30, 2024 were approximately $2.0 million for both the nine months ended September 30, 2024 and 2023. During the nine months ended September 30, 2024 there was a large decrease in stock-based compensation expense which was primarily related to the issuance of common stock upon our IPO for services, cancellation of employee stock options and issuance of common stock in connection with the IPO in the prior year. Offsetting this decrease were increased costs associated with being a public company, which included professional fees and insurance, compared to the same period in 2023.
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Depreciation and amortization expenses
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Other Income (Expense)
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Other income for the nine months ended September 30, 2024 was approximately $83,000 compared to other expense of approximately $37,000 for the nine months ended September 30, 2023. The majority of the other income balance for the nine months ended September 30, 2024, represented interest income earned during the period. Offsetting other income during the nine months ended September 30, 2024 was an expense of approximately $52,000 which represented a change in the fair value of marketable securities. The majority of the other expense balance for the nine months ended September 30, 2023, represented a change in the fair value of future equity obligations. The change in fair value was primarily related to changes in the underlying assumptions for the valuation of future equity obligations, which were capitalized on our balance sheet in connection with our IPO, which took place in July 2023.
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Cash used in operating activities
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Cash used in investing activities
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For the nine months ended September 30, 2024, cash used in financing activities was approximately $53,000 which the majority of the decrease was related to the accumulation of deferred offering costs in conjunction with future capital raises. During the quarter the company repurchased 10,322 shares of common stock for approximately $5,000, these shares were all cancelled by the end of the quarter. As of September 30, 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. Offsetting the decrease was the issuance of 17,595 common shares from the exercise of stock options within the period. For the nine months ended September 30, 2023, cash provided by financing activities was approximately $5.8 million for the nine months ended September 30, 2023 which was the result of receiving $1.0 million of gross proceeds from the sale of Series B preferred stock in April, 2023 and the initial public offering in July 2023 for approximately $4.8 million in net proceeds.
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Non-GAAP Financial Measures
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Adjusted EBITDA and Adjusted EBITDA per share
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To provide investors and the market with additional information regarding our financial results, we disclose (see below) adjusted EBITDA and adjusted EBITDA per share, non-GAAP financial measures that we calculate as net loss excluding; stock-based compensation expense; depreciation and amortization; and other income (expense). We have provided reconciliations below of adjusted EBITDA to net loss and adjusted EBITDA per share to earnings per share, the most directly comparable GAAP financial measures.
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We have included adjusted EBITDA and adjusted EBITDA per share, herein, because they are key measures used by our management and Board of Directors to evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of capital. In particular, the exclusion of certain expenses in calculating adjusted EBITDA facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses. Accordingly, we believe that adjusted EBITDA and adjusted EBITDA per share provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.
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We believe it is useful to exclude non-cash charges, such as, stock-based compensation expense and depreciation and amortization expense from our adjusted EBITDA and adjusted EBITDA per share, because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. In addition, we believe it is useful to exclude in our adjusted EBITDA and adjusted EBITDA per share other income (expense), as neither are components of our core business operations. Adjusted EBITDA and adjusted EBITDA per share have limitations as financial measures, these non-GAAP measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
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DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous wording
The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and the other information set forth in our Annual Report on Form 10-K. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.
Current wording
The following discussion and analysis is intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.
Previous wording
We provide a technology platform that connects commercial mortgage borrowers looking for debt to refinance, build, or buy commercial property including apartment buildings to commercial property lenders. 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.
Current wording
DeFi Development Corp. (formerly Janover Inc.) is an AI-powered online platform that connects the commercial real estate industry by providing data and software subscriptions as well as value-add services to multifamily and commercial property professionals as we connect the increasingly complex ecosystem that stakeholders have to manage. We provide a technology platform that connects commercial mortgage and small business borrowers looking for debt to refinance, build, or buy commercial property including apartment buildings to commercial property lenders. 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.
Previous wording
We have developed an AI-enabled, B2B fintech marketplace platform that connects commercial borrowers and lenders, with a human touch. Commercial property owners, operators, and developers can quickly create an account on our platform, chat with our AI, set up their own profile and submit and manage loan requests on their dashboard in a digital experience. Our algorithms automatically match borrowers to their best loan option(s) or to our internal capital markets advisors (inbound sales team) that guide the borrower through the process and connect them with the right loan product and lender. Originators that work at commercial real estate mortgage lenders can log in and use their lender portal to view, sort, and engage with their new matches in real-time and communicate with the borrowers, tracking their loans right through our portal; they can setup the types of deals they are looking for as well. Our capital markets advisors have their own interface that gives them access to targeted loan opportunities, market intelligence, and data empowering them to better assist borrowers in managing their choices, leading to the best possible outcomes for both lenders and borrowers while building trust, all of which enhances our brand.
Current wording
We have developed an AI-enabled, B2B fintech platform that connects commercial borrowers and lenders, with a human touch. Commercial property owners, operators, and developers can quickly create an account on our platform, chat with our AI, set up their own profile and submit and manage loan requests on their dashboard in a digital experience. Our algorithms automatically match borrowers to their best loan option(s) or to our internal capital markets advisors (inbound sales team) that guide the borrower through the process and connect them with the right loan product and lender. Originators that work at commercial real estate mortgage lenders can log in and use their lender portal to view, sort, and engage with their new matches in real-time and communicate with the borrowers, tracking their loans right through our portal; they can setup the types of deals they are looking for as well. Our capital markets advisors have their own interface that gives them access to targeted loan opportunities, market intelligence, and data empowering them to better assist borrowers in managing their choices, leading to the best possible outcomes for both lenders and borrowers while building trust, all of which enhances our brand.
Previous wording
We currently have two different customer segments: lenders and borrowers. Borrowers include (but are not limited to) owners, operators, and developers of commercial real estate including multifamily properties and most recently, a growing segment of small business owners (which we believe represents a significant growth opportunity). Lenders include banks, credit unions, REITs, Fannie Mae® and Freddie Mac® multifamily lenders, FHA® multifamily lenders, debt funds, commercial mortgage-backed securities (“CMBS”) lenders and Small Business Administration (“SBA”) lenders, and more.
Current wording
We currently have two different customer segments: lenders and borrowers. Borrowers include (but are not limited to) owners, operators, and developers of commercial real estate including multifamily properties and most recently, a growing segment of small business owners (which we believe represents a significant growth opportunity). Lenders include banks, credit unions, REITs, Fannie Mae® and Freddie Mac® multifamily lenders, FHA® multifamily lenders, debt funds, CMBS lenders and SBA lenders.
Previous wording
Our business model includes earning a transaction fee each time a loan closes with a lender through our platform. We are either paid a share of the revenue from the transaction by the lender and/or receive some fixed sum in an amount we negotiate from the borrower. We receive compensation from both the lender and/or the borrower. Our average fee earned per transaction is approximately 1% of the loan amount generally earned at the time of closing. We do not make loans or share risk with the lenders, with whom we conduct business with. With the acquisition of Groundbreaker, our real estate syndication software and investor portal, and the recent launches of our Insurtech subsidiary, Janover Insurance Group, Janover AI (AI Software), Janover Engage
Current wording
Our business model includes earning a transaction fee, or platform fee, each time a loan closes with a lender through our platform. We are either paid a share of the revenue from the transaction by the lender and/or receive some fixed sum in an amount we negotiate from the borrower. We are generally paid by the lender or the borrower and are paid by both sometimes. Our average fee earned per transaction is approximately 1% of the loan amount generally earned at the time of closing. We do not make loans or share risk with the lenders, with whom we conduct business with.
Previous wording
The Company derives its revenue primarily from platform fees, which also includes referral and advisory fees. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and the promised services have transferred to the customer. The Company's 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.
Current wording
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 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.
Previous wording
All of this will be done by continuing to:
Current wording
All of this will be accomplished by continuing to:
Previous wording
These and other types of events could lead to a decline in transaction activity as well as a decrease in property values which, in turn, would likely lead to a reduction in financing fees relating to such transactions. These effects would likely cause us to realize lower revenues. Such declines in transaction activity and value would likely also significantly reduce our financing activities and revenues. Fiscal uncertainty, significant changes and volatility in the financial markets and business environment, and similar significant changes in the global, political, security and competitive landscape, make it increasingly difficult for us to predict our revenue and earnings into the future. As a result, any revenue or earnings projections or economic outlook which we may give may be materially affected by such events. Fiscal 2023 was one of the most challenging years for the commercial real estate industry and the first half of fiscal 2024 has continued with this trend. However, we expect the overall outlook to improve in the second half of fiscal 2024.
Current wording
Fiscal uncertainty, significant changes and volatility in the financial markets and business environment, and similar significant changes in the global, political, security and competitive landscape, make it increasingly difficult for us to predict our revenue and earnings into the future. As a result, any revenue or earnings projections or economic outlook which we may give may be materially affected by such events. Fiscal 2024 was one of the most challenging years for the commercial real estate industry.*** ***
Previous wording
Traditionally, the commercial real estate market is seasonal in nature, with the first and fourth fiscal quarters being more active than the second and third fiscal quarters. However, during fiscal 2023 the commercial real estate market was less seasonal due to the significant macroeconomic pressures in the commercial real estate market.
Current wording
Traditionally, the commercial real estate market is seasonal in nature, with the first and fourth fiscal quarters being more active than the second and third fiscal quarters. However, during fiscal 2024 and during the first quarter of fiscal 2025 the commercial real estate market was less seasonal due to the significant macroeconomic pressures in the commercial real estate market.
Previous wording
On August 1, 2024, the Company entered into an At-the-Market Offering Agreement (the “ATM Sales Agreement”) with R.F. Lafferty & Co., Inc., as sales agent, to sell, from time to time, shares of its common stock having an aggregate offering price of up to $0.99, through an “at the market” offering pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-281185), as supplemented by a prospectus supplement. At September 30, 2024, there has been no activity to report with the Form S-3 Registration Statement and ATM Sales Agreement. We expect overall conditions to improve for the raising of capital for the remainder of fiscal 2024 and into fiscal 2025.
Current wording
On August 1, 2024, the Company entered into an At-the-Market Offering Agreement (the “ATM Sales Agreement”) with R.F. Lafferty & Co., Inc., as sales agent, to sell, from time to time, shares of its common stock having an aggregate offering price of up to $0.99, through an “at the market” offering pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-281185), as supplemented by a prospectus supplement. As of December 31, 2024, there has been no activity to report with the Form S-3 Registration Statement and ATM Sales Agreement. As of the March 31, 2025, the Company issued approximately 13,000 shares of its common stock, raising approximately $70,000, in conjunction with its Form S-3 Registration Statement and ATM Sales Agreement. On April 15, 2025, we filed a prospectus supplement to increase our current ATM Sales Agreement from $1.5 million to $14.9 million. On May 5, 2025, we filed another prospectus supplement to increase our current ATM Sales Agreement from $14.9 million to $41.3 million, as we were no longer subject to the baby shelf S-3 limitation. Subsequent to March 31, 2025, the Company issued approximately 185,000 shares of its common stock, raising approximately $12.4 million, in conjunction with its Form S-3 Registration Statement and ATM Sales Agreement. We intend to continue to utilize the Form S-3 Registration Statement and ATM Sales Agreement for the raising of future capital in fiscal 2025.
Previous wording
In 2024, the Company started to market its artificial intelligence software technology (“AI Software”), its lender marketplace (“Janover Pro”), and its equity marketplace (“Janover Engage”) as a software as a service. The revenue derived from these SaaS subscriptions will be recognized over the term of the SaaS agreement. As of September 30, 3024, there was approximately $201,000 in deferred revenue, the majority of which is pertaining to these SaaS fees received in advance. The revenue will be recognized in 2024 and 2025.
Current wording
Revenue for the three months ended March 31, 2025, was approximately $287,000, as compared to approximately $411,000 for the three months ended March 31, 2024, a decrease of approximately $124,000, or 30%. The decrease in revenue for the period was due primarily to a decrease in platform revenue, related to our legacy debt business. Offsetting this decrease was an increase in subscription revenue, related to our SaaS software business. In 2024, the Company started to market, its lender marketplace (“Janover Pro”), its equity marketplace (“Janover Engage”), and its artificial intelligence technology (“Janover AI”) as a software as a service. Subscription Revenue also includes revenue from Janover Connect, formerly known as Groundbreaker, our real estate syndication software and investor portal and from our Insurtech subsidiary. The revenue derived from these SaaS subscriptions will be recognized over the term of the SaaS agreement. Subscription revenue was approximately $191,000 for the three months ended March 31, 2025, compared to approximately $73,000 for the same period in the prior year. For the three months ended March 31, 2025, approximately 67% of our total revenue was recurring revenue, compared to 18% for the same period in the prior year. In fiscal 2025, we will continue to focus on transitioning from transactional platform fee debt revenue to the more predictable and profitable recurring SaaS subscription revenue. As of March 31, 2025, our ARR reached approximately $1.4 million, compared to approximately $287,000 as of March 31, 2024, an increase of 379%. ARR increased sequentially by approximately 69%, which was approximately $812,000 for the year ended December 31, 2024. ARR represents an annualization of our recurring revenue, which assumes a full year of revenue.
Previous wording
Cost of revenue for the three months ended September 30, 2024 was approximately $8,000 as compared to $0 for the three months ended September 30, 2023. The entire cost of revenue balance consists of software and hosting costs related to Groundbreaker. Cost of revenue represents approximately 1% of total revenue for the three months ended September 30, 2024.
Current wording
Cost of revenue for the three months ended March 31, 2025, was approximately $7,000, as compared to $8,600 for the three months ended March 31, 2024. The entire cost of revenue balance consists of software and hosting costs related to our subscription revenue. Cost of revenue represents approximately 2% of total revenue for the three months ended March 31, 2025 and 2024.
Previous wording
Our sales and marketing costs are primarily comprised of personnel and advertising costs. Sales and marketing expenses for the three months ended September 30, 2024 were approximately $299,000, compared to approximately $764,000 for the three months ended September 30, 2023, an decrease of $465,000, or 61%. The majority of the decrease can be attributed to a decrease in stock-based compensation expense during the three months ended September 30, 2024, due to a decrease in employees and a reduction in stock issuances, compared to the same period in 2023. Advertising and marketing expenses decreased 49%, to approximately $15,000 for the three months ended September 30, 2024, compared to approximately $30,000 for the same period in the prior year, which was primarily due to a decrease in online advertising and other business development expenses. As we continue to improve the efficiency of our sales and marketing efforts, leveraging our search engine optimization and our artificial intelligence engine, we expect to continue to optimize our advertising and marketing expenses while lowering our customer acquisition costs to drive a more productive sales and marketing spend.
Current wording
Our sales and marketing costs are primarily comprised of personnel and advertising costs. Sales and marketing expenses for the three months ended March 31, 2025 was approximately $465,000, compared to approximately $416,000 for the three months ended March 31, 2024, an increase of approximately $49,000, or 12%. The majority of the increase for the quarter can be attributed to increased online advertising costs to promote of SaaS subscription software products. As we continue to improve the efficiency of our sales and marketing efforts, leveraging our search engine optimization and our artificial intelligence engine, we expect to continue to optimize and increase our advertising and marketing expenses to help drive subscription revenue, while lowering our customer acquisition costs, to drive a more productive sales and marketing spend.
Previous wording
Our research and development costs are primarily comprised of personnel costs and software license fees to support the development of our marketplace. Research and development expenses for the three months ended September 30, 2024 were approximately $151,000, compared to approximately $247,000 for the three months ended September 30, 2023, an decrease of approximately $96,000, or 39%. The majority of the decrease can be attributed to a decrease in stock-based compensation expense during the three months ended September 30, 2024, due to a reduction in stock issuances, compared to the same period in 2023. Offsetting this decrease in research and development expenses for the three months ended September 30, 2024, was a $64,000 increase to compensation and benefits due to an increase research and development related employees and consultants. We will continue to focus on developing our digital marketplace and our AI for the benefit of driving customer value on both sides of our marketplace which we believe will drive long term value to customers and our shareholders.
Current wording
Our research and development costs are primarily comprised of personnel costs with a minimal amount of software license fees to support the development of our platform. Research and development expenses for the three months ended March 31, 2025, was approximately $169,000, compared to approximately $173,000 for the three months ended March 31, 2024, a decrease of approximately $4,000, or 3%. The decrease for the period can be attributed to a decrease in compensation and benefits related to a reduction in personnel. We will continue to focus on developing our platform and our AI for the benefit of driving customer value on our marketplace, which we believe will drive long term value to customers and our shareholders.
Previous wording
Our general and administrative costs include personnel costs, accounting, legal, rent, and other overhead expenses. General and administrative expenses for the three months ended September 30, 2024 were approximately $564,000 compared to approximately $1.2 million, for the three months ended September 30, 2023, a decrease of approximately $647,000, or 53%. The majority of the decrease can be attributed to a decrease in stock-based compensation expense and a reduction in compensation and benefits during the three months ended September 30, 2024, primarily due to a reduction in stock-based issuances and a decrease in employees, compared to the same period in 2023. During the quarter ended September 30, 2024 there was a large decrease in stock-based compensation expense which was primarily related to the issuance of common stock upon our IPO for services, cancellation of employee stock options and issuance of common stock in connection with the IPO in the prior year.
Current wording
Our general and administrative costs include personnel costs, accounting, legal, rent, and other overhead expenses. General and administrative expenses for the three months ended March 31, 2025, was approximately $544,000, compared to approximately $759,000 for the three months ended March 31, 2024, a decrease of approximately $215,000, or 28%. During the three months ended March 31, 2025, there was a $77,000 decrease in compensation and benefits due to a reduction in personnel and a $62,000 decrease in stock-based compensation expense, which was primarily related to the issuance of common stock for IPO services, the cancellation of employee stock options and the issuance of common stock in connection with the IPO in fiscal 2023. There was also an $46,000 decrease in professional fees and insurance during the three months ended March 31, 2025, related to a reduction in investor relations fee and insurance premium during the period.
Previous wording
Depreciation and amortization expenses were approximately $51,000 for the three months ended September 30, 2024, compared to $107 for the three months ended September 30, 2023. Amortization expense, which makes up the majority of the balance, relates to Groundbreaker’s developed technology, which will be amortized over a three-year period. Depreciation expense relates to the company’s fixed assets which comprises of computer equipment and furniture.
Current wording
Depreciation and amortization expenses were approximately $50,000 for the three months ended March 31, 2025, compared to approximately $73,000 for the three months ended March 31, 2024. Amortization expense, which makes up the majority of the balance, relates to Groundbreaker’s developed technology, which is being amortized over a three-year period. Depreciation expense relates to the company’s fixed assets, which comprises of computer equipment and furniture. The $23,000 reduction to depreciation and amortization was attributed a greater amortization expense in the prior year which included an additional month of amortization related to the Groundbreaker, rebranded as Janover Connect, acquisition in November 2023.
Previous wording
Other expense for the three months ended September 30, 2024 was approximately $17,000 compared to other income of approximately $60,000 for the three months ended September 30, 2023, a reduction of approximately $77,000, or 129%. The reduction in other income was primarily related to the change in fair value of marketable securities of approximately $52,000 at September 30, 2024. The reduction in other income was also related to a reduction in interest income of approximately $25,000 due to a reduced cash balance and interest rates, compared to the prior period.
Current wording
Change in fair value of contingent consideration
Previous wording
Our principal liquidity requirements are for working capital to fund our sales, marketing, research and development and administrative expenditures. To date, we have funded our liquidity requirements primarily through cash on hand, cash flows from operations, as well as equity and equity-related financing. As of September 30, 2024 and December 31, 2023, we had approximately $2.8 million and $5.1 million of cash and cash equivalents, respectively. As of September 30, 2024, we had an accumulated deficit of approximately $8.9 million and incurred net losses of approximately $2.2 million during both the nine months ended September 30, 2024 and 2023. Management believes capital is sufficient to sustain the Company’s operating expenses for at least one year. We may continue to generate operating losses for the foreseeable future as we focus on revenue growth.
Current wording
Our principal liquidity requirements are for working capital to fund our sales, marketing, research and development and administrative expenditures. To date, we have funded our liquidity requirements primarily through cash on hand, cash flows from operations, as well as equity and equity-related financing. As of March 31, 2025 and December 31, 2024, we had approximately $1.8 million and approximately $2.5 million of cash and cash equivalents, respectively. As of March 31, 2025, we had an accumulated deficit of approximately $10.1 million which included incurred net losses of approximately $778,000 and $964,000 during the three months ended March 31, 2025 and 2024, respectively. We had cash used in operations of approximately $786,000 for the three months ended March 31, 2025, compared to cash used in operations of approximately $1.1 million for the same period for the prior year.
Previous wording
Our business plan is focused on rapid growth to achieve significant market penetration over the shortest possible time horizon. We may raise additional capital in 2024 utilizing the recently filed registration statements to invest in research and development and sales and marketing to drive future growth.
Current wording
Our business plan is focused on growth, as we transition away from transactional platform fee revenue and move more toward the more predictable subscription recurring revenue, to achieve significant market penetration over the shortest possible time horizon. As such, we intend to continue to invest in research and development, sales and marketing, and general and administrative expenses to drive that growth.
Previous wording
For the nine months ended September 30, 2024, cash used in operating activities was approximately $2.2 million compared to approximately $908,000 for the nine months ended September 30, 2023. The increase in cash used in operating activities was the result our increased net loss which is a result of investing our IPO proceeds in people and process to set up the company for future growth. This increase was also related to funding changes in our working capital balances, primarily accounts receivable, other assets, and accounts payable accounts.
Current wording
For the three months ended March 31, 2025, cash used in operating activities was approximately $786,000 compared to approximately $1.1 million for the three months ended March 31, 2024. The decrease in cash used in operating activities was the result of funding changes in our working capital balances, primarily accounts receivable, accounts payable and accrued expenses, deferred revenue, as well as our increased loss from operations in fiscal 2024.
Previous wording
For the nine months ended September 30, 2024 cash used in investing activities was approximately $16,000 compared to approximately $9,000 for the nine months ended September 30, 2023. The increase in cash used in investing activities was related to the purchase of property and equipment and the purchase of an intangible asset during the period.
Current wording
For the three months ended March 31, 2025, cash from investing activities were $0 compared to approximately $6,000 for the three months ended March 31, 2024. The decrease in cash used in investing activities was related to a reduction in the purchase of property and equipment in the three months ended March 31, 2025.
Previous wording
Cash (used in) provided by financing activities
Current wording
For the three months ended March 31, 2025, cash provided by financing activities was approximately $70,000 compared to approximately $1,000 for the three months ended March 31, 2024. During the three months ended March 31, 2025, the Company issued approximately 13,000 shares of its common stock, raising approximately $70,000, in conjunction with its Form S-3 Registration Statement and ATM Sales Agreement. On April 15, 2025, we filed a prospectus supplement to increase our current ATM Sales Agreement from $1.5 million to $14.9 million. On May 5, 2025, we filed another prospectus supplement to increase our current ATM Sales Agreement from $14.9 million to $41.3 million, as we were no longer subject to the baby shelf S-3 limitation. Subsequent to March 31, 2025, the Company issued approximately 185,000 shares of its common stock, raising approximately $12.4 million, in conjunction with its Form S-3 Registration Statement and ATM Sales Agreement. We intend to continue to utilize the Form S-3 Registration Statement and ATM Sales Agreement for the raising of future capital in fiscal 2025. There is no guarantee that we will be successful raising the maximum proceeds from this capital raise. We expect to continue to generate operating losses for the foreseeable future as we focus on revenue growth, however we expect these operating losses to decline as we continue to grow our subscription software revenue.
Previous wording
This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting standards in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Current wording
This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting standards in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. 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, including contingent consideration, and stock-based compensation. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following accounting policies are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
Previous wording
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.
Current wording
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 the customer payment and the transfer of goods or services is expected to be one year or less.
Previous wording
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. As of September 30, 2024 and December 31, 2023, the Company determined that no impairment was necessary.
Current wording
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. As of December 31, 2024 the Company determined that there was an impairment to the indefinite-lived Groundbreaker brand of approximately $83,000 during the fourth quarter of fiscal 2024. It was determined by the Company that the Groundbreaker brand name was less valuable and was deemed impaired. Due to this impairment the Company changed the Groundbreaker brand name to Janover Connect and is no longer marketing the Groundbreaker brand name. There was no impairment determined necessary as of March 31, 2025.
Previous wording
. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employee’s required service period, which is generally the vesting period.
Current wording
We record stock-based compensation in accordance with ASC 718,Compensation-Stock Compensation. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued and are recognized over the employee’s required service period, which is generally the vesting period.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
These and other types of events could lead to a decline in transaction activity as well as a decrease in property values which, in turn, would likely lead to a reduction in financing fees relating to such transactions. These effects would likely cause us to realize lower revenues. Such declines in transaction activity and value would likely also significantly reduce our financing activities and revenues.
Current report — wording carried from elsewhere
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 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.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The following table provides certain selected financial information for the periods presented:
Previous report — wording carried elsewhere
Cost of revenue for the nine months ended September 30, 2024 was approximately $24,000 as compared to $0 for the nine months ended September 30, 2023. The entire cost of revenue balance consists of software and hosting costs related to Groundbreaker. Cost of revenue represents approximately 2% of total revenue for the nine months ended September 30, 2024.
Previous report — wording carried elsewhere
Our operating expenses by category for the nine months ended September 30, 2024 and 2023 is as follows:
Previous report — wording carried elsewhere
Depreciation and amortization expenses were approximately $173,000 for the nine months ended September 30, 2024, compared to $107 for the nine months ended September 30, 2023. Amortization expense, which makes up the majority of the balance, relates to Groundbreaker’s developed technology, which will be amortized over a three-year period. Depreciation expense relates to the company’s fixed assets which comprises of computer equipment and furniture.
Previous report — wording carried elsewhere
We record stock-based compensation in accordance with ASC 718,