JFB Construction Holdings Announces Approximately $44 Million Private Placement Priced At The Market Under Nasdaq Rules

Rhea-AI Summary

JFB Construction Holdings (NASDAQ:JFB) has secured a significant private placement agreement with American Ventures LLC, expected to generate approximately $44 million in gross proceeds. The PIPE financing includes the sale of 4,389,500 shares of Series C Convertible Preferred Stock at $10 per share, convertible into 8,068,933 common shares at $5.44 per share.

The deal also includes two sets of warrants: Common Warrants A exercisable at $5.75 and Common Warrants B at $6.25, both expiring in three years. Of the proceeds, $12 million will be used to retire CEO Joseph F. Basile III's Class B Common Stock, with the remainder allocated for general corporate expenses. Dominari Securities LLC served as the exclusive placement agent.

Positive

• Secured significant funding of $44 million through PIPE financing
• Strategic retirement of CEO's Class B Common Stock improves capital structure
• Warrants provide potential for additional future capital at premium prices ($5.75 and $6.25)

Negative

• Significant dilution potential with conversion of preferred stock and warrants into 24.2M common shares
• Offering priced at market without premium, indicating limited negotiating leverage
• Large portion ($12M) of proceeds not used for growth but for insider stock redemption

Insights

Financial Analyst

JFB secured $44M in PIPE financing to retire CEO shares and fund operations, significantly diluting existing shareholders through convertible preferred stock and warrants.

JFB Construction Holdings has announced a $44 million private placement transaction that carries significant implications for the company's capital structure and existing shareholders. The deal, structured as a PIPE (Private Investment in Public Equity) with American Ventures LLC as the sole investor, involves issuing Series C Convertible Preferred Stock and two types of warrants.

Looking at the transaction mechanics, JFB is selling 4.39 million shares of convertible preferred stock (convertible into 8.07 million common shares) plus two separate warrant tranches exercisable for an additional 16.14 million shares total. This structure creates substantial potential dilution for existing shareholders, as the fully-exercised transaction would introduce approximately 24.2 million new shares into the market.

The most notable aspect of this financing is its intended use - $12 million (27% of proceeds) will be used to retire CEO Joseph F. Basile III's Class B Common Stock. This redemption of insider shares represents a significant transfer of ownership influence and raises questions about management's strategic direction.

The pricing structure suggests investors demanded significant sweeteners to participate. The base conversion price of $5.44 per share is supplemented with warrants exercisable at $5.75 and $6.25, providing significant upside potential to the investor while diluting existing shareholders. The use of convertible preferred stock rather than common equity typically indicates investors sought downside protection and preferential treatment in the capital structure.

The remainder of proceeds for "general corporate operating expenses" lacks specificity, which is concerning in a transaction of this magnitude. Investors should note that this financing was completed through Dominari Securities as placement agent, likely with substantial fees that will reduce the net proceeds available to JFB.

Lantana, Fla., Sept. 26, 2025 (GLOBE NEWSWIRE) -- JFB Construction Holdings (Nasdaq: JFB) (the “Company”), a real estate development and construction company focused on hospitality, commercial, industrial, and residential property development, today announced that it has entered into a securities purchase agreement with American Ventures LLC, Series XIV JFB as the sole investor for a private investment in public equity (“PIPE”) financing that is expected to result in gross proceeds to the Company of approximately $ 43,895,000 , before deducting placement agent fees and offering expenses.

The Company intends to use $12 million of the net proceeds from the offering to retire the Company’s Class B Common Stock, par value $0.0001, owned by Joseph F. Basile III, the Company’s Chief Executive Officer, pursuant to a Share Redemption Agreement, and the remainder of the proceeds shall be used for general corporate operating expenses.

Pursuant to the terms of the securities purchase agreement, the Company is selling an aggregate of 4,389,500 shares of its Series C Convertible Preferred Stock, par value $0.0001 per share, stated value $10 per share (the “Series C Convertible Preferred Stock”), convertible into 8,068,933 shares of common stock par value $0.0001 (the “Common Stock”), at a conversion price $5.44 per share of Series C Convertible Preferred Stock, (collectively for all purchasers, the “Shares”), (ii) 8,068,933 warrants (the “Common Warrants A”) exercisable for 8,068,933 shares of the Company’s Common Stock, and (iii) 8,068,933 warrants (the “Common Warrants B” and, together with the Common Warrants A, the “Warrants”) exercisable for 8,068,933 shares of Common Stock. The purchase price for one unit consisting of the Series C Convertible Preferred Stock, Common Warrants A and Common Warrants B is $5.44 per share.

The Common Warrants A issued in the offering are exercisable immediately at an exercise price of $5.75 per share and will expire three years from the date of issuance. The Common Warrants B issued in the offering are exercisable immediately at an exercise price of $6.25 per share and will expire three years from the date of issuance.

Dominari Securities LLC acted as the exclusive placement agent for the PIPE financing.

The securities being offered and sold by the Company in the private placement have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the "SEC") or an applicable exemption from such registration requirements. The securities were offered only to accredited investors. The Company has agreed to file one or more registration statements with the SEC covering the resale of the unregistered shares issuable upon the conversion of the Series C Convertible Preferred Stock and the shares issuable upon exercise of the unregistered warrants.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About JFB Construction Holdings

JFB Construction Holdings (“JFB”) offers generations of combined experience in residential and commercial construction and development. Having the experience of building Multifamily communities, Shopping Centers, National Franchises, exclusive estate & equestrian homes, and over 2 million square feet of commercial and retail. JFB provides hands-on, professional expertise, which has led to the quality and production we are known for.

JFB’s reputation has been built on its clients' trust and the value it brings to each project.

JFB is proud that most of its projects are obtained through 100% referrals and repeat customers, and that to-date it has provided general contracting and construction management services in 36 U.S. states.

Caution Regarding Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. These statements are subject to uncertainties and risks including, but not limited to, the risk factors discussed in the Risk Factors and in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections of our Forms 10-K, 10-Q and other reports filed with the SEC and available at www.sec.gov. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations that arise after the date hereof, except as may be required by law.

JFB Construction Holdings Contact:
Joseph F. Basile, III
561-582-9840.
joe@jfbconstruction.net 

Investor Relations Contact:
CORE IR
Mike Mason
516 222 2560
investors@jfbconstruction.net 

FAQ

What is the size and structure of JFB Construction Holdings' private placement?

JFB secured a $44 million private placement, consisting of Series C Convertible Preferred Stock at $10 per share, plus two sets of warrants exercisable at $5.75 and $6.25.

How will JFB Construction Holdings use the proceeds from the private placement?

JFB will use $12 million to retire CEO Joseph F. Basile III's Class B Common Stock, with the remaining $32 million allocated for general corporate operating expenses.

What is the conversion price for JFB's Series C Convertible Preferred Stock?

The Series C Convertible Preferred Stock is convertible into common stock at $5.44 per share, with each preferred share having a stated value of $10.

Who is the investor in JFB Construction Holdings' PIPE financing?

American Ventures LLC, Series XIV JFB is the sole investor in the PIPE financing, with Dominari Securities LLC acting as the exclusive placement agent.

What are the terms of JFB's warrants issued in the private placement?

JFB issued two types of warrants: Common Warrants A exercisable at $5.75 and Common Warrants B at $6.25, both exercisable immediately and expiring in three years.