Financial Performance - For the three months ended September 30, 2024, the net operating loss was $8,719,615, compared to a loss of $3,299,055 for the same period in 2023, indicating a significant increase in losses[8]. - The total operating income for the nine months ended September 30, 2024, was $1,013,816, a decrease of approximately 80% from $5,070,958 in the same period of 2023[8]. - The net loss attributable to MDB Capital Holdings, LLC for the nine months ended September 30, 2024, was $19,225,299, compared to $1,419,350 for the same period in 2023, showing a significant increase in net losses[8]. - For the nine months ended September 30, 2024, the net loss was $20,855,682, compared to a net loss of $1,760,981 for the same period in 2023, indicating a significant increase in losses[11]. - The company reported a net loss per Class A common share of $(2.07) for the nine months ended September 30, 2024, compared to $(0.24) for the same period in 2023, reflecting a worsening loss per share[8]. - The net operating loss for Q3 2024 was $(8,719,615), compared to a net operating loss of $(7,735,433) in Q3 2023, reflecting a deterioration in performance[88]. - The company reported a net loss of $8,440,490 for the three months ended September 30, 2024, compared to a net loss of $3,186,314 in the same period of 2023, reflecting a 164.9% increase in losses[157]. Operating Costs - Total operating costs for the nine months ended September 30, 2024, were $22,805,340, compared to $6,996,275 for the same period in 2023, indicating a significant increase in operating expenses[8]. - Total operating costs for Q3 2024 were $8,105,370, with general and administrative costs accounting for $5,170,772, which is a significant portion of total expenses[88]. - Compensation costs for the nine months ended September 30, 2024, reached $15,188,205, highlighting the significant expense in this area[89]. - Total general and administrative costs increased by 43.5% to $1,813,972 for the three-month period ended September 30, 2024, compared to $1,263,844 in the same period of 2023[164]. - Professional fees increased by 74.6% to $190,277 for the three-month period ended September 30, 2024, compared to $108,959 in the same period of 2023[164]. - Related party operating expenses rose by 81.8% to $405,771 for the three-month period ended September 30, 2024, up from $223,254 in the same period of 2023[164]. Research and Development - Research and development costs for the three months ended September 30, 2024, were $723,487, compared to $27,936 for the same period in 2023, reflecting a substantial increase in R&D investment[8]. - Research and development costs for the nine months ended September 30, 2024, amounted to $1,238,463, a substantial increase of 1,745.8% from $67,095 in the prior year[158]. - Grants received for research and development costs amounted to $1,756,852 for the nine months ended September 30, 2024, compared to $2,180,581 for the same period in 2023[78]. Equity and Liabilities - As of September 30, 2024, total liabilities amounted to $6,028,830, an increase from $5,665,177 as of December 31, 2023, representing an increase of approximately 6.4%[5]. - The total equity as of September 30, 2024, was $28,182,007, a decrease from $37,320,102 as of December 31, 2023, representing a decline of approximately 24.4%[6]. - The accumulated deficit rose significantly to $(31,318,226) in 2024, a 159.0% increase from $(12,092,927) in December 2023[177]. Cash Flow and Investments - Cash flows from operating activities resulted in a net cash used of $8,620,720 for the nine months ended September 30, 2024, compared to $5,086,987 for the same period in 2023[11]. - The company reported cash, cash equivalents, and restricted cash of $18,264,162 at the end of the period, down from $26,445,550 a year earlier[11]. - The company reported a net cash provided by investing activities of $20,045,260 for the nine months ended September 30, 2024, compared to $8,746,619 in 2023[182]. - The company had $16,679,428 in cash and $5,084,197 in short-term U.S. Treasury bills available for operations as of September 30, 2024[182]. Initial Public Offering (IPO) - The company completed an initial public offering (IPO) on September 20, 2023, raising gross proceeds of $19,999,992 from the sale of 1,666,666 Class A common shares at $12.00 per share[23]. - The increase in equity was primarily due to the IPO, partially offset by net losses from previous periods[180]. - The company issued 100,000 shares of Class A common shares in exchange for all non-controlling interests in PatentVest, making it a wholly owned subsidiary[152]. Segment Information - The company operates in two reportable segments: broker dealer and intellectual property service, and technology development, with distinct financial reporting for each[83]. - The Technology Development Segment reported a significant increase in revenue, with a total of $1,064,231 for 2024, up 192.4% from $363,907 in 2023[171]. Miscellaneous - The company has established a management subsidiary, MDB Management, to consolidate shared services for its U.S.-based operations[15]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from various reporting requirements[29]. - The company recognized no income tax expense for the nine months ended September 30, 2024, due to a full valuation allowance against net deferred tax assets[142].
MDB Capital (MDBH) - 2024 Q3 - Quarterly Report