PART I - FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the period ended March 31, 2025 Item 1. Unaudited Condensed Consolidated Financial Statements This section presents MDB Capital Holdings, LLC's unaudited interim financial statements, including balance sheets, statements of operations, equity changes, cash flows, and explanatory notes for Q1 2025 and 2024 Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $68.6 million, a decrease from $72.0 million at December 31, 2024, primarily due to a reduction in cash and cash equivalents and the fair value of investment securities Condensed Consolidated Balance Sheet Summary (Unaudited) | Account | March 31, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | Total Assets | $68,626,418 | $71,976,399 | | Cash and cash equivalents | $19,551,997 | $20,437,492 | | Investment securities, at fair value | $5,385,918 | $5,858,336 | | Equity method investment | $40,891,050 | $41,763,568 | | Total Liabilities | $1,640,020 | $1,903,065 | | Total Equity | $66,986,398 | $70,073,334 | Unaudited Condensed Consolidated Statements of Operations For the three months ended March 31, 2025, the company reported a net loss of $6.6 million, an improvement from a net loss of $7.6 million in the same period of 2024, driven by new fee income of $2.1 million and lower operating costs Consolidated Statements of Operations Summary (Unaudited) | Metric | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | | :--- | :--- | :--- | | Total operating income (loss), net | $828,098 | $(660,389) | | Fee income | $2,140,238 | $0 | | Total operating costs | $6,738,002 | $7,286,791 | | Net operating loss | $(5,909,904) | $(7,947,180) | | Net loss | $(6,601,793) | $(7,609,328) | | Net loss attributable to MDB | $(6,587,362) | $(7,215,425) | | Loss per Class A share – basic and diluted | $(0.66) | $(0.78) | Unaudited Condensed Consolidated Statements of Changes in Equity Total equity decreased from $70.1 million at the end of 2024 to $67.0 million as of March 31, 2025, primarily due to a net loss of $6.6 million, partially offset by $3.5 million in stock-based compensation Changes in Equity for Three Months Ended March 31, 2025 (Unaudited) | Description | Amount (USD) | | :--- | :--- | | Balance, December 31, 2024 | $70,073,334 | | Stock-based compensation | $3,514,857 | | Net loss | $(6,601,793) | | Balance, March 31, 2025 | $66,986,398 | Unaudited Condensed Consolidated Statements of Cash Flows For the three months ended March 31, 2025, net cash used in operating activities was $1.3 million, compared to $2.3 million in the prior-year period, resulting in a net decrease in cash of $1.3 million with the period-end balance at $20.0 million Consolidated Statements of Cash Flows Summary (Unaudited) | Cash Flow Category | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,257,855) | $(2,259,097) | | Net cash provided by investing activities | $0 | $3,445,523 | | Net cash used in financing activities | $0 | $(91,507) | | Net (decrease) increase in cash | $(1,257,855) | $1,094,919 | | Cash at end of period | $20,023,378 | $8,452,606 | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail MDB's corporate structure, significant accounting policies, and financial activities, including subsidiary operations, the deconsolidation of eXoZymes, segment performance, equity structure, and subsequent events - MDB operates as a holding company with subsidiaries including Public Ventures (broker-dealer), PatentVest (IP services), and M1 (pharmaceutical development), with eXoZymes deconsolidated in November 2024 to an equity method investment2125102 - The company operates in two segments: Broker Dealer & Intellectual Property Service, and Technology Development, with the Broker Dealer segment generating $0.83 million in net operating income and the Technology Development segment incurring a $44.8 thousand net operating loss in Q1 2025848588 - As of March 31, 2025, 4,950,632 Class A shares and 5,000,000 Class B shares were outstanding, with Class B shares carrying five votes per share and being convertible to Class A shares on a one-to-one basis9697 - Public Ventures, the company's broker-dealer subsidiary, maintained $10.2 million in net capital at March 31, 2025, exceeding the minimum requirement by $9.9 million117 - Subsequent to quarter-end, on April 28, 2025, key executives voluntarily exchanged outstanding RSUs for stock options equivalent to Class A shares135 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the Q1 2025 financial results, noting a reduced net loss driven by new fee income and lower operating costs, improved segment performance, and strong liquidity despite a decrease in working capital Consolidated Results of Operations Comparison (Unaudited) | Metric | Three Months Ended March 31, 2025 (USD) | Three Months Ended March 31, 2024 (USD) | | :--- | :--- | :--- | | Total operating income (loss), net | $828,098 | $(660,389) | | Total operating costs | $6,738,002 | $7,286,791 | | Net loss | $(6,601,793) | $(7,609,328) | | Net loss attributable to MDB | $(6,587,362) | $(7,215,425) | - The Broker Dealer & IP Service segment's net loss decreased to $1.44 million in Q1 2025 from $2.19 million in Q1 2024, primarily due to $2.14 million in new investment banking fee income148150 - The Technology Development segment's net loss attributable to controlling interests decreased to $30.4 thousand in Q1 2025 from $614.6 thousand in Q1 2024, mainly due to the deconsolidation of eXoZymes152 - Working capital decreased to $20.2 million at March 31, 2025, from $27.3 million a year prior, primarily due to cash used in operations162 - Critical accounting estimates include revenue recognition for investment banking, potentially involving warrants valued with the Black-Scholes model, and fair value measurement of financial instruments across Level 1, 2, and 3 hierarchies169170171 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is a smaller reporting company and is therefore not required to provide the information requested under this item - As a smaller reporting company, MDB is not required to provide quantitative and qualitative disclosures regarding market risk187 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, due to a material weakness in internal control over financial reporting, though financial statements are fairly presented and remediation efforts are underway - The CEO and CFO concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to a material weakness in internal control over financial reporting188 - Despite the material weakness, management performed additional analyses and concluded that the financial statements in the 10-Q are fairly stated in all material respects188 - The company is implementing measures to remediate the material weakness, including redesigning the financial reporting process, with remediation confirmed only after new controls operate effectively for a sufficient period189190 PART II - OTHER INFORMATION This section covers other information including legal proceedings, risk factors, unregistered sales of equity, defaults, mine safety disclosures, and exhibits Item 1. Legal Proceedings As of the filing date, the company is not a party to any material legal proceedings and is not aware of any pending or threatened litigation that would have a material adverse effect on its business or financial condition - The company is not currently a party to any material legal proceedings194 Item 1A. Risk Factors This section highlights key risks, including the potential adverse effects of changes in U.S. tariff, import/export regulations, and trade policies on the global economy and the company's financial services business - Changes to U.S. tariff and trade policies could materially adversely affect global economic conditions and the company's business, financial condition, and results of operations196 - Government actions, including changes in tariffs and reductions in research funding, may impede the company's ability to conduct research and raise capital for its partner companies and clients197 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - No unregistered sales of equity securities occurred during the period198 Item 3. Defaults upon Senior Securities The company reported no defaults upon senior securities - No defaults upon senior securities were reported199 Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable to the company200 Item 5. Other Information This item is not applicable to the company - This item is not applicable to the company201 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications from the CEO and CFO, and Inline XBRL data files - This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL files202207
MDB Capital (MDBH) - 2025 Q1 - Quarterly Report