Janover Inc

Previous 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.

Current 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.

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. While 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. With the recent acquisition of Groundbreaker, an increasing portion of our total revenue is recurring software subscription revenue.

Current 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. While 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. With the acquisition of Groundbreaker and the recent launch of our Insurtech subsidiary, an increasing portion of our total revenue is recurring software subscription revenue.

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 we expect the first half of fiscal 2024 to continue with this trend.

Current 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.

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 sec

Previous wording

Revenue for the three months ended March 31, 2024 was approximately $411,000 as compared to approximately $467,000 for the three months ended March 31, 2023, a decrease of 12%. This decrease was primarily due to a reduction in closed loans compared to the same period in 2023. During the three months ended March 31, 2024 there were 33 transactions that closed on our marketplace, compared to 49 during the three months ended March 31, 2023. The average revenue per transaction was $10,208 in the three months ended March 31, 2024, compared to $9,250 for the three months ended March 31, 2023. This 10% increase in average revenue per transaction was the result of a change in the average loan size during the three months ended March 31, 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 target increasing both our number of transactions closed and our revenue per transaction closed. During fiscal 2024, we will be focusing on larger loan opportunities, which should increase our average loan size. With the recent acquisition of Groundbreaker in November 2023, an increasing portion of our total revenue will be recurring revenue, where we receive annual, quarterly, and monthly software subscriptions. For the quarter ended March 31, 2024 approximately 18% of our total revenue was recurring revenue.

Current wording

Revenue for the three months ended June 30, 2024 was approximately $441,000 as compared to approximately $602,000 for the three months ended June 30, 2023, a decrease of approximately $161,000, or 27%. Revenue for the three months ended June 30, 2024 increased sequentially by approximately 7% compared to the three months ended March 31, 2024. During the three months ended June 30, 2024 there were 23 transactions that closed on our marketplace, compared to 45 during the three months ended June 30, 2023. The average revenue per transaction was approximately $12,000 in the three months ended June 30, 2024, compared to $13,000 for the three months ended June 30, 2023. This 6% decrease in average revenue per transaction was the result of a change in the average loan size during the three months ended June 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 will be focusing 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 be recurring revenue, where we receive annual, quarterly, and monthly subscriptions, and annual insurance premium commissions. For the quarter ended June 30, 2024 approximately 20% of our total revenue was recurring revenue compared to 18% for the quarter ended March 31, 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.

Previous wording

Cost of revenue for the three months ended March 31, 2024 was approximately $9,000 as compared to $0 for the three months ended March 31, 2023. The entire cost of revenue balance consists of software and hosting costs related Groundbreaker. Cost of revenue represents approximately 2% of total revenue for the three months ended March 31, 2024.

Current wording

Cost of revenue for the three months ended June 30, 2024 was approximately $8,000 as compared to $0 for the three months ended June 30, 2023. The entire cost of revenue balance consists of software and hosting costs related Groundbreaker. Cost of revenue represents approximately 2% of total revenue for the three months ended June 30, 2024.

Previous wording

Our operating expenses by category for the three months ended March 31, 2024, and 2023 are as follows:

Current wording

Our operating expenses by category for the three months ended June 30, 2024 and 2023 is as follows:

Previous wording

Our sales and marketing expenses are primarily comprised of personnel and advertising costs. Sales and marketing expenses for the three months ended March 31, 2024 were approximately $416,000, compared to approximately $294,000 for the three months ended March 31, 2023, an increase of $122,000, or 41%. The majority of the increase can be attributed to an increase in compensation and benefits expense during the three months ended March 31, 2024, due to an increase in employees, compared to the same period in 2023. Offsetting this increase in sales and marketing expenses for the three months ended March 31, 2024, was a $28,000 reduction in stock-based compensation. Advertising and marketing expenses increased 91%, from approximately $32,000 for the three months ended March 31, 2024, compared to approximately $17,000 for the same period in the prior year, which was primarily due to an increase in online advertising and 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 June 30, 2024 were approximately $414,000, compared to approximately $315,000 for the three months ended June 30, 2023, an increase of $98,000, or 31%. The majority of the increase can be attributed to an increase in compensation and benefits expense during the three months ended June 30, 2024, due to an increase in employees, compared to the same period in 2023. Offsetting this increase in sales and marketing expenses for the three months ended June 30, 2024, was a $34,000 reduction in stock-based compensation. Advertising and marketing expenses increased 61%, to approximately $25,000 for the three months ended June 30, 2024, compared to approximately $16,000 for the same period in the prior year, which was primarily due to an increase in online advertising and 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.

Previous wording

Our research and development expenses 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 March 31, 2024 were approximately $173,000 compared to approximately $105,000 for the three months ended March 31, 2023, an increase of $68,000, or 65%. The majority of the increase can be attributed to an increase in compensation and benefits expense during the three months ended March 31, 2024, due to an increase in employees, compared to

Current 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 June 30, 2024 were approximately $154,000, compared to approximately $90,000 for the three months ended June 30, 2023, an increase of approximately $64,000, or 70%. The majority of the increase can be attributed to an increase in compensation and benefits expense during the three months ended June 30, 2024, due to an increase in employees, compared to

Previous wording

Our general and administrative expenses include personnel costs, accounting, legal, rent, and other overhead expenses. General and administrative expenses for the three months ended March 31, 2024 were approximately $759,000 compared to approximately $342,000 for the three months ended March 31, 2023, an increase of $417,000, or 122%. Most of the increase can be attributed to an increase in professional fees, compensation and benefits, and stock-based compensation expense during the three months ended March 31, 2024, primarily due to an increase in employees and increased costs associated with being a public company, compared to the same period in 2023.

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 June 30, 2024 were approximately $667,000 compared to approximately $442,000 for the three months ended June 30, 2023, an increase of approximately $225,000, or 51%. Most of the increase can be attributed to an increase in professional fees and insurance, compensation and benefits, and stock-based compensation expense during the three months ended June 30, 2024, primarily due to an increase in employees and increased costs associated with being a public company, compared to the same period in 2023.

Previous wording

Depreciation and amortization expenses were $73,000 for the three months ended March 31, 2024, compared to $0 for the three months ended March 31, 2023. Amortization expense relates to Groundbreaker’s developed technology, which will be amortized over a 3-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 June 30, 2024, compared to $0 for the three months ended June 30, 2023. Amortization expense relates to Groundbreaker’s developed technology, which will be amortized over a 3-year period. Depreciation expense relates to the company’s fixed assets which comprises of computer equipment and furniture.

Previous wording

Other income for the three months ended March 31, 2024 and 2023 were approximately $54,000. The majority of the other income balance for the three months ended March 31, 2024, represented interest income earned during the period. Most of the other income balance for the three months ended March 31, 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.

Current wording

Other income for the three months ended June 30, 2024 was approximately $46,000 compared to other expense of approximately $151,000 for the three months ended June 30, 2023. The majority of the other income balance for the three months ended June 30, 2024, represented interest income earned during the period. The majority of the other expense balance for the three months ended June 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.

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 March 31, 2024 and December 31, 2023, we had approximately $3.9 million and $5.1 million of cash and cash equivalents, respectively. As of March 31, 2024, we had an accumulated deficit of approximately $7.6 million and incurred net losses of approximately $964,000 and $220,000 during the three months ended March 31, 2024 and 2023, respectively, had cash used in operations of approximately $1.1 million during the three months ended March 31, 2024. 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 June 30, 2024 and December 31, 2023, we had approximately $3.2 million and $5.1 million of cash and cash equivalents, respectively. As of June 30, 2024, we had an accumulated deficit of approximately $8.4 million and incurred net losses of approximately $1.8 million and $618,000 during the six months ended June 30, 2024 and 2023, respectively, had cash used in operations of approximately $1.8 million during the six months ended June 30, 2024. 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.

Previous wording

Our business plan is focused on rapid growth to achieve significant market penetration over the shortest possible time horizon. As such, we intend to invest in research and development and sales and marketing to drive that rapid growth.

Current 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.

Previous wording

For the three months ended March 31, 2024, cash used in operating activities was approximately $1.1 million compared to approximately $214,000 for the three months ended March 31, 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, and accounts payable accounts.

Current wording

For the six months ended June 30, 2024, cash used in operating activities was approximately $1.8 million compared to approximately $322,000 for the six months ended June 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.

Previous wording

For the three months ended March 31, 2024 cash used in investing activities was approximately $6,000 compared to $0 for the three months ended March 31, 2023. The increase in cash used in investing activities was related to the purchase of property and equipment.

Current wording

For the six months ended June 30, 2024 cash used in investing activities was approximately $13,000 compared to $0 for the six months ended June 30, 2023. The increase in cash used in investing activities was related to the purchase of property and equipment.

Previous wording

For the three months ended March 31, 2024, cash provided by financing activities was approximately $1,000 compared to $0 for the three months ended March 31, 2023. The increase was the result of the issuance of 17,595 common shares from the exercise of stock options.

Current wording

For the six months ended June 30, 2024, cash provided by financing activities was approximately $1,000 which was related to the issuance of 17,595 common shares from the exercise of stock options within the period.

Previous wording

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 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.

Current wording

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.