Financial Performance - The net operating loss for the three months ended March 31, 2024, was $7,947,180, compared to a loss of $2,155,232 for the same period in 2023, indicating an increase in losses of approximately 269%[9] - For the three months ended March 31, 2024, the net loss was $7,609,328, compared to a net loss of $1,967,941 for the same period in 2023, representing a significant increase in losses[13] - The loss per Class A common share for the first quarter of 2024 was $(0.78), compared to $(0.25) for the same period in 2023, representing a deterioration of 212%[9] - Total operating income for the three months ended March 31, 2024, was a net loss of $660,389, compared to a total operating income of $116,991 for the same period in 2023[83][84] - The net loss attributable to MDB Capital Holdings, LLC for the three months ended March 31, 2024, was $7,215,425, compared to a net loss of $1,873,748 for the same period in 2023[83][84] Assets and Liabilities - Total assets decreased to $40,939,876 as of March 31, 2024, down from $42,985,279 on December 31, 2023, representing a decline of approximately 4.8%[8] - Total liabilities increased to $7,416,294 as of March 31, 2024, compared to $5,665,177 on December 31, 2023, reflecting an increase of approximately 31%[8] - The total equity decreased to $33,523,582 as of March 31, 2024, from $37,320,102 as of December 31, 2023, a decline of approximately 10.1%[8] - Cash and cash equivalents decreased to $5,492,612 as of March 31, 2024, from $6,109,806 as of December 31, 2023, a reduction of about 10.1%[8] - The accumulated deficit grew to $(19,308,352) as of March 31, 2024, compared to $(12,092,927) at the end of 2023, indicating an increase of approximately 60%[11] Cash Flow - Cash used in operating activities was $2,259,097 for Q1 2024, compared to $1,154,192 in Q1 2023, indicating a worsening cash flow situation[13] - The company reported net cash provided by investing activities of $3,445,523 in Q1 2024, a notable improvement from a net cash used of $55,317 in Q1 2023[13] - The total cash, cash equivalents, and restricted cash at the end of Q1 2024 was $8,452,606, up from $7,357,687 at the end of Q4 2023[14] - The company reported a cash inflow of $12,066,207 from investments in U.S. Treasury Bills during the first quarter of 2024[13] Research and Development - Research and development costs for the first quarter of 2024 were $277,582, significantly higher than $31,592 in the same quarter of 2023, marking an increase of approximately 779%[9] - Research and development costs for the three months ended March 31, 2024, totaled $986,282, compared to $825,132 for the same period in 2023[76] - Compensation expenses in the technology development segment rose to $390,043, a dramatic increase of 1,136.8% from $31,536 in the previous year[150] Stock-Based Compensation - Stock-based compensation for Q1 2024 was $3,812,809, a significant increase from $54,126 in Q1 2023[13] - Stock-based compensation expense related to restricted stock units recorded for the three months ended March 31, 2024, was $1,107,521[90] - The total unrecognized compensation expense based on the shares price sold in the private placement is $34,302,984[90] Investment and Securities - The unrealized gain on investment securities for Q1 2024 was $747,268, compared to an unrealized loss of $54,779 in Q1 2023[13] - The company recognized a net unrealized loss of $747,268 for the three months ended March 31, 2024, compared to a net unrealized gain of $54,779 for the same period in 2023[46] - Investment securities at amortized cost decreased from $24,658,611 on December 31, 2023, to $21,381,362 on March 31, 2024[44] 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 shares at $12.00 per share[24] - The increase in equity was primarily due to the Company's IPO, which closed on September 20, 2023[155] Regulatory Compliance and Risk - The company is monitoring potential recession risks that could impact its business and capital markets[179] - MDB Capital Holdings is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions[29] - The Company is treated as a partnership for federal and state income tax purposes, except in Texas where it is subject to margin tax[27] Operational Structure - The company has three wholly-owned subsidiaries and one majority-owned partner company, indicating a diversified operational structure[16] - The Company operates in two reportable segments: broker dealer and intellectual property service, and technology development[79]
MDB Capital (MDBH) - 2024 Q1 - Quarterly Report