MDB Capital Holdings, LLC 10-Q for FY2024 Q2

MDB Capital Holdings, LLC (MDBH)

10-Q 2024-08-13 For: 2024-06-30

Added on April 10, 2026

About this 10-Q

MDB Capital Holdings, LLC filed this 10-Q on August 13, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $4.27M; compared with net income of $3.46M a year earlier

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Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Shares, representing Limited Liability Interests		MDBH		Nasdaq Capital Markets

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☒
		Emerging Growth Company	☒

		Page Number
PART I	FINANCIAL INFORMATION	3

Item 1	Unaudited Condensed Consolidated Financial Statements	3

Condensed Consolidated Balance Sheets –June 30, 2024 and December 31, 2023		3

Unaudited Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2024 and 2023		4

Unaudited Condensed Consolidated Statements of Changes in Equity – Three and Six Months Ended June 30, 2024 and 2023		5

Unaudited Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2024 and 2023		6

Notes to Unaudited Condensed Consolidated Financial Statements		7

Item 2	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	32

Item 3	Quantitative and Qualitative Disclosures About Market Risk	45

Item 4	Controls and Procedures	45

PART II	OTHER IFNORMATION	46

Item 1	Legal Proceedings	46

Item 1A	Risk Factors	46

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	46

Item 3	Defaults upon Senior Securities	46

Item 4	Mine Safety Disclosures	46

Item 5	Other Information	46

Item 6	Exhibits	46

	June 30, 2024			December 31, 2023
	(Unaudited)
Cash and cash equivalents	$	17,523,769		$	6,109,806
Cash segregated in compliance with regulations		2,977,914			1,247,881
Grants receivable		1,147,171			882,319
Clearing deposits		515,222			260,000
Prepaid expenses and other current assets		488,914			523,788
Investment securities, at amortized cost (U.S. Treasury Bills)		5,041,692			24,658,611
Investment securities, at fair value (held by our licensed broker dealer) (Note 2)		6,285,443			5,771,634
Investment securities, at cost less impairment		200,000			200,000
Deferred offering cost		351,478			69,303
Deferred costs related to deferred revenue		114,109			75,328
Property and equipment, net		910,287			866,490
Operating lease right-of-use assets, net		2,149,538			2,320,119
Total assets	$	37,705,537		$	42,985,279

LIABILITIES AND EQUITY
Accounts payable	$	655,619		$	578,214
Accrued expenses		147,434			1,105,078
Payables to non-customers		986,412			1,405,293
Payables to customers		977,020			-
Deferred grant reimbursement		120,631			140,703
Deferred revenue		-			20,000
Operating lease liabilities		2,262,560			2,415,889
Total liabilities		5,149,676			5,665,177
Commitments and Contingencies (Note 9)		-
Equity:					-
Preferred shares, 10,000,000 authorized shares at no par value; 0 issued and outstanding		-			-
Class A common shares, 95,000,000 authorized shares at no par value; 4,295,632 and 4,295,632 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		-			-
Class B common shares, 5,000,000 authorized shares at no par value; 5,000,000 shares issued and outstanding		-			-

Paid-in-capital		56,565,645			49,405,779
Accumulated deficit		(23,582,793	)		(12,092,927	)
Total MDB Capital Holdings, LLC Members’ equity		32,982,852			37,312,852
Non-controlling interest		(426,991	)		7,250
Total equity		32,555,861			37,320,102
Total liabilities and equity	$	37,705,537		$	42,985,279

	2024			2023			2024			2023
	Three Months Ended June 30,						Six Months Ended June 30,
	2024			2023			2024			2023
Operating income:
Unrealized gain on investment securities, net (from our licensed broker dealer) (Notes 1 and 2)	$	899,544		$	1,429,092		$	152,276		$	1,483,871
Realized loss on investment securities, net (from our licensed broker dealer)		-			-			-			-
Fee income		1,303,398			4,233,120			1,303,398			4,233,120
Other operating income		85,508			67,159			172,387			129,371
Total operating income, net		2,288,450			5,729,371			1,628,061			5,846,362

Operating costs:
General and administrative costs:
Compensation		5,124,758			973,717			10,017,433			1,845,744
Operating expense, related party		304,954			253,951			625,246			555,653
Professional fees		640,620			176,842			1,559,709			781,504
Information technology		209,396			168,142			415,387			315,549
Clearing and other charges		226,426			368,924			228,462			379,678
General and administrative-other		669,631			251,258			1,338,757			555,337
Total general and administrative costs		7,175,785			2,192,834			14,184,994			4,433,465
Research and development costs, net of grants amounting to $609,208 and $767,707, for the three months ended June 30 and $1,317,878 and $1,522,087, for the six months ended June 30		237,394			7,567			514,976			39,159
Total operating costs		7,413,179			2,200,401			14,699,970			4,472,624
Net operating income (loss)		(5,124,729)			3,528,970			(13,071,909	)		1,373,738
Other income:											-
Interest income		321,008			184,888			658,860			372,179
Net income (loss) before income taxes		(4,803,721	)		3,713,858			(12,413,049	)		1,745,917
Income taxes		2,143			320,584			2,143			320,584
Net income (loss)		(4,805,864	)		3,393,274			(12,415,192	)		1,425,333
Less: Net loss attributable to non-controlling interests		(531,423	)		(69,585	)		(925,326	)		(163,778	)
Net income (loss) attributable to MDB Capital Holdings, LLC	$	(4,274,441	)	$	3,462,859		$	(11,489,866	)	$	1,589,111
Net income (loss) per share attributable to MDB Capital Holdings, LLC:
Net income (loss) per Class A common share – basic and diluted	$	(0.46	)	$	0.45		$	(1.24	)	$	0.21	)
Weighted average of Class A common shares outstanding – basic and diluted		4,295,632			2,628,966			4,295,632			2,628,966
Net income (loss) per Class B common share – basic and diluted	$	(0.46	)	$	0.45		$	(1.24	)	$	0.21	)
Weighted average of Class B common shares outstanding – basic and diluted		5,000,000			5,000,000			5,000,000			5,000,000

	Shares		Amount		Shares		Amount		Capital		Deficit				Interest			Equity
	Class A Common Shares				Class B Common Shares				Paid-In		Accumulated				Non-controlling			Total
	Shares		Amount		Shares		Amount		Capital		Deficit				Interest			Equity

Balance, December 31, 2023		4,295,632	$	-		5,000,000	$	-	$	49,405,779	$	(12,092,927	)	-	$	7,250		$	37,320,102
Stock-based compensation		-		-		-		-		3,669,998		-		-		142,810			3,812,808
Net loss		-		-		-		-		-		(7,215,425	)	-		(393,903	)		(7,609,328	)
Balance, March 31, 2024		4,295,632	$	-		5,000,000	$	-	$	53,075,777	$	(19,308,352	)	-	$	(243,843	)	$	33,523,582
Stock-based compensation		-		-		-		-		3,489,868		-		-		348,275			3,838,143
Net loss		-		-		-		-		-		(4,274,441	)	-		(531,423	)		(4,805,864	)
Balance, June 30, 2024		4,295,632	$	-		5,000,000	$	-	$	56,565,645	$	(23,582,793	)	-	$	(426,991	)	$	32,555,861

	2024			2023
	Six Months Ended June 30,
	2024			2023

CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(12,415,192	)	$	1,425,333
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Unrealized (gain) loss on investment securities, net		(152,276	)		(1,483,871	)
Stock-based compensation		7,650,951			113,077
Accretion of investments at amortized cost (U.S Treasury Bills)		(446,701	)		(322,341	)
Purchases from sale of investment securities, at fair value (made by our licensed broker dealer)		-			(1,587,500	)
Proceeds from sale of investment securities, at fair value (made by our licensed broker dealer)		-			632,851
Deferred income tax		-			225,874
Warrants issued as part of an investment banking deal		-			165,087
Income recognized from warrants received		(359,605	)		(2,645,620	)
Depreciation of property and equipment		130,937			88,249
Deferred costs related to revenue		(38,781	)		-
Accretion of deferred grant reimbursement		(26,252	)		25,920
Deferred revenue		(20,000	)		-
Change in ROU Asset		170,581			166,957
Change in lease liability		(153,329	)		(97,334	)
Changes in operating assets and liabilities:
(Increase) decrease in -
Grants receivable		(264,852	)		(264,492	)
Prepaid expenses and other current assets		34,874			79,418
Clearing deposits		(255,222	)		-
Increase (decrease) in -
Accounts payable		75,477			(19,966	)
Payables to non-customers		(418,881	)		-
Payables to customers		977,020			-
Accrued expenses		(957,644	)		(148,664	)
Net cash used in operating activities		(6,468,895	)		(3,647,022	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds of investments securities, at amortized cost (U.S Treasury Bills)		35,825,998			5,107,908
Purchases of investments securities, at amortized cost (U.S Treasury Bills)		(15,762,378	)		(3,499,352	)
Deferred grant reimbursement		6,180			(74,295	)
Purchases of property and equipment		(174,734	)		(43,691	)
Net cash provided by investing activities		19,895,066			1,490,570

CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred costs of initial public offering		(282,175	)		(405,029	)
Net cash used in financing activities		(282,175	)		(405,029	)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		13,143,996			(2,561,481	)

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - BEGINNING OF PERIOD		7,357,687			4,952,624

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - END OF PERIOD	$	20,501,683		$	2,391,143

Supplemental disclosures of cash flow information:
Cash paid for -
Interest	$	-		$	-
Income taxes	$	-		$	-

Non-cash investing and financing activities:

Warrants received as part of an investment banking deal	$	359,605		$	2,480,533
Modification of lease - right-of-use asset and lease liability	$	-		$	198,544
Deferred costs of initial public offering	$	152,065		$	-

	June 30, 2024		December 31, 2023
Cash and cash equivalents	$	17,523,769	$	6,109,806
Cash segregated in compliance with regulations		2,977,914		1,247,881
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows	$	20,501,683	$	7,357,687

	June 30, 2024		December 31, 2023
Investment securities, at fair value:
Common stock of publicly traded companies	$	2,799,577	$	2,603,579
Warrants of publicly traded companies		3,485,866		3,168,055
Investment securities, at fair value	$	6,285,443	$	5,771,634

	June 30, 2024		December 31, 2023
Investment securities, at cost less impairment
Simple agreement on future equities (not market listed)	$	200,000	$	200,000
Investment securities, at cost less impairment	$	200,000	$	200,000

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Amortized Cost as of June 30, 2024		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value (Level 1) as of June 30, 2024
U.S Treasury Bills maturing 10/11/24	$	5,041,692	$	-	$	24,689	$	5,017,003
Total assets	$	5,041,692	$	-	$	24,689	$	5,017,003

Assets	Classification	Level 1		Level 2		Level 3		Total

Investment Securities (held by our licensed broker dealer)	Equity securities–- common stock	$	2,799,577	$	-	$	-	$	2,799,577

Investment Securities (held by our licensed broker dealer)	Warrants		-		308,214		3,177,652		3,485,866

Total assets measured at fair value (held by our licensed broker dealer)		$	2,799,577	$	308,214	$	3,177,652	$	6,285,443


December 31, 2023	$	3,133,458
Beginning Balance	$	3,133,458

Receipt from investment banking fees		315,885
Realized gains		-
Unrealized losses		(271,691	)
Sales or distribution
Purchases		-
June 30, 2024	$	3,177,652
Ending Balance	$	3,177,652

Assets	Fair Value		Valuation Techniques	Significant Unobservable Inputs	Range of Inputs			Weighted-Average

Warrants	$	3,485,886	Black Scholes	Volatility		83.02 -112.83	%		110.58	%

Assets	Classification	Level 1		Level 2		Level 3		Total

Investment Securities (held by our licensed broker dealer)	Equity securities - common stock	$	2,603,579	$	-	$	-	$	2,603,579

Investment Securities (held by our licensed broker dealer)	Warrants		-		34,597		3,133,458		3,168,055

Total assets measured at fair value (held by our licensed broker dealer)		$	2,603,579	$	34,597	$	3,133,458	$	5,771,634

Laboratory equipment		5 years
Furniture and fixtures		7 years
Leasehold improvements		Lesser of the lease duration or the life of the improvements

	June 30, 2024			December 31, 2023

Laboratory equipment	$	1,067,241		$	885,696
Furniture and fixtures		54,338			49,838
Developed software		101,803			113,114
Leasehold improvements		279,161			279,161
Total property and equipment		1,502,543			1,327,809
Less: Accumulated depreciation		(592,256	)		(461,319	)
Property and equipment, net	$	910,287		$	866,490


December 31, 2022	$	-
Beginning Balance	$	-
Receipt from investment banking fees		2,645,620
Realized gains		-
Unrealized gains		652,925
Sales or distribution		(165,087	)
Purchases		-
December 31, 2023	$	3,133,458
Ending Balance	$	3,133,458

Balance as of December 31, 2022	$	-
Amounts billed but not recognized		-
Revenue recognized		-
Balance as of March 31, 2023		-
Amounts billed but not recognized		-
Revenue recognized		-
Balance as of June 30, 2023		-
Amounts billed but not recognized		100,000
Revenue recognized		80,000
Balance as of December 31, 2023		20,000
Amounts billed but not recognized		-
Revenue recognized		-
Balance as of March 31, 2024		20,000
Amounts billed but not recognized		-
Revenue recognized		20,000
Balance as of June 30, 2024	$	-

	2024			2023

Balance at beginning of period	$	882,319		$	809,532
Grant costs expensed		1,272,127			1,467,202
Grants for equipment purchased		6,379			-
Grant fees		39,372			54,886
Grant funds received		(1,053,026	)		(1,257,596	)
Balance at end of period	$	1,147,171		$	1,074,024

ASSETS	Broker Dealer & Intellectual Property Service		Technology Development		Other		Eliminations		Consolidated
Long-lived assets	$	101,803	$	2,272,147	$	685,875	$	-	$	3,059,825
Total assets	$	16,608,793	$	3,988,839	$	17,107,905	$	-	$	37,705,537

	Broker Dealer & Intellectual Property Service		Technology Development			Other			Eliminations			Consolidated
Operating income:
Unrealized gain on investment securities, net (from our licensed broker dealer)	$	899,544	$	-		$	-		$	-		$	899,544
Fee income		1,303,398											1,303,398
Other operating income		85,508		-			-			-			85,508
Total operating income, net		2,288,450		-			-			-			2,288,450

Operating costs:
General and administrative costs:
Compensation		820,017		731,608			3,573,133			-			5,124,758
Operating expense, related party		273,645		-			31,309			-			304,954
Professional fees		153,726		289,903			196,991			-			640,620
Information technology		185,202		9,715			14,479			-			209,396
Clearing and other charges		226,426		-			-			-			226,426
General and administrative-other		206,383		59,985			403,263			-			669,631
General and administrative costs		1,865,399		1,091,211			4,219,175			-			7,175,785
Research and development costs		-		237,394			-			-			237,394
Total operating costs		1,865,399		1,328,605			4,219,175			-			7,413,179
Net operating income (loss)		423,051		(1,328,605	)		(4,219,175	)		-			(5,124,729	)
Other income and expense:
Less: interest expense		165,625		31,498						(197,123	)		-
Interest income		144,775		1,716			371,640			(197,123	)		321,008
Income (loss) before income taxes		402,201		(1,358,387	)		(3,847,535	)		-			(4,803,721	)
Income tax expense		-		2,143			-			-			2,143
Net income (loss)		402,201		(1,360,530	)		(3,847,535	)		-			(4,805,864	)
Less net loss attributable to non-controlling interests		-		(531,423	)		-			-			(531,423	)
Net loss attributable to MDB Capital Holdings, LLC	$	402,201	$	(829,107	)	$	(3,847,535	)	$	-		$	(4,274,441	)

	Broker Dealer & Intellectual Property Service			Technology Development			Other			Eliminations			Consolidated
Operating income:
Unrealized gain on investment securities, net (from our licensed broker dealer)	$	152,276		$	-		$	-		$	-		$	152,276
Fee income		1,303,398												1,303,398
Other operating income		172,387			-			-			-			172,387
Total operating income, net		1,628,061			-			-			-			1,628,061

Operating costs:
General and administrative costs:
Compensation		1,499,924			1,121,651			7,395,858			-			10,017,433
Operating expense, related party		517,521			-			107,725			-			625,246
Professional fees		299,633			546,466			713,610			-			1,559,709
Information technology		366,116			13,606			35,665			-			415,387
Clearing and other charges		228,462			-			-			-			228,462
General and administrative-other		425,319			140,363			773,075			-			1,338,757
General and administrative costs		3,336,975			1,822,086			9,025,933			-			14,184,994
Research and development costs		-			514,976			-			-			514,976
Total operating costs		3,336,975			2,337,062			9,025,933			-			14,699,970
Net operating income (loss)		(1,708,914	)		(2,337,062	)		(9,025,933	)		-			(13,071,909	)
Other income and expense:
Less: interest expense		276,250			31,498			-			(307,748	)		-
Interest income		197,234			1,716			767,658			(307,748	)		658,860
Income (loss) before income taxes		(1,787,930	)		(2,366,844	)		(8,258,275	)		-			(12,413,049	)
Income tax expense		-			2,143			-			-			2,143
Net income (loss)		(1,787,930	)		(2,368,987	)		(8,258,275	)		-			(12,415,192	)
Less net loss attributable to non-controlling interests		-			(925,326	)		-			-			(925,326	)
Net loss attributable to MDB Capital Holdings, LLC	$	(1,787,930	)	$	(1,443,661	)	$	(8,258,275	)	$	-		$	(11,489,866	)

	For the Six Months Ended June 30,
	2024			2023

Invizyne net loss	$	(2,368,987	)	$	(419,229	)
Weighted average non-controlling percentage		39.06	%		39.06	%
Net loss non-controlling interest	$	(925,326	)	$	(163,778	)
Prior period balance		7,250			468,665
Stock-based compensation		491,085			113,077
Ending period balance	$	(426,991	)	$	417,964

	Time-Based					Performance-Based
	Number of Restricted Stock Units			Weighted Average Grant Date Fair Value		Number of Restricted Stock Units		Weighted Average Grant Date Fair Value
Restricted stock units outstanding at June 30, 2023		3,675,000		$	10.00		2,000,000	$	7.91
Granted		-			-		-		-
Exercised		-			-		-		-
Expired		-			-		-		-
Restricted stock units outstanding at December 31, 2023		3,675,000		$	10.00		2,000,000	$	7.91
Granted		295,000			8.71		-		-
Exercised		-			-		-		-
Expired		-			-		-		-
Forfeited		(100,000	)		10.00		-		-
Restricted stock units outstanding at June 30, 2024		3,870,000		$	9.90		2,000,000	$	7.91

Restricted stock units at June 30, 2023		-		$	-		-	$	-
Restricted stock units at June 30, 2024		-		$	-		-	$	-

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)
Stock options outstanding at January 1, 2023		1,067,356		$	1.22		4.83
Granted		-			-		-
Exercised		-			-		-
Expired		-			-		-
Stock options outstanding at June 30, 2023		1,067,356		$	1.22		4.83
Granted		1,018,012			1.66		7.00
Exercised		-			-		-
Expired		-			-		-
Stock options outstanding at December 31, 2023		2,085,368		$	1.43		5.47
Granted		1,451,737			3.50		7.00
Exercised		(6,752	)		-		-
Expired		(3,636	)		-		-
Stock options outstanding at June 30, 2024		3,526,717			2.28		5.92

Stock options exercisable at June 30, 2023		519,350		$	1.26		4.79
Stock options exercisable at June 30, 2024		756,886		$	2.28		5.92


	For the Three Months Ended
	June 30, 2024						June 30, 2023
	Class A common shares			Class B common shares			Class A common shares		Class B common shares
Net income (loss) attributable to MDB Capital Holdings, LLC	$	(1,975,275	)	$	(2,299,166	)	$	1,193,312	$	2,269,547

Weighted average shares outstanding – basic and diluted		4,295,632			5,000,000			2,628,966		5,000,000

Net income (loss) per share – basic and diluted	$	(0.46	)	$	(0.46	)	$	0.45	$	0.45

	●	A payment of $250,000 when a licensed product reaches $1,000,000 in cumulative net sales.
	●	A payment of $350,000 when a second licensed product reaches $ 2,000,000 in cumulative net sales.

	June 30, 2024			December 31, 2023

Operating leases:
Right-of-use assets	$	2,149,538		$	2,320,119
Operating lease liabilities	$	2,262,560		$	2,415,889

Weighted average remaining lease term in years		5.10			5.33
Weighted average discount rate		7.66	%		7.40	%

Cash paid for amounts included in the measurement of lease liabilities	$	243,375		$	206,837
Right-of-use assets obtained in exchange for lease liabilities	$	-		$	1,018,002

Operating lease cost	$	90,047		$	146,836
Short-term lease costs		170,582			275,589
Total operating lease costs	$	260,629		$	422,425

Year	Amount
Remainder of 2024	$	248,249
2025		503,684
2026		516,001
2027		528,586
2028		541,674
Thereafter		451,600
Total	$	2,789,794
Less effects of discounting		(527,234	)
Total operating lease liabilities	$	2,262,560

	2024			2023			$ Change			% Change
Operating income:
Unrealized gain on investment securities, net (from our licensed broker dealer)	$	899,544		$	1,429,092		$	(529,548	)		(37.1	)%
Fee income		1,303,398			4,233,120			(2,929,722	)		(69.2	)%
Other operating income		85,508			67,159			18,349			27.3	%
Total operating income, net		2,288,450			5,729,371			(3,440,921	)		(60.1	)%

Operating costs:
General and administrative costs:
Compensation		5,124,758			973,717			4,151,041			426.3	%
Operating expense, related party		304,954			253,951			51,003			20.1	%
Professional fees		640,620			176,842			463,778			262.3	%
Information technology		209,396			168,142			41,254			24.5	%
Clearing and other charges		226,426			368,924			(142,498	)		(38.6	)%
General and administrative-other		669,631			251,258			418,373			166.5	%
Total general and administrative costs		7,175,785			2,192,834			4,982,951			227.2	%
Research and development costs, net of grants amounting to $609,208 and $767,707		237,394			7,567			229,827			3,037.2	%
Total operating costs		7,413,179			2,200,401			5,212,778			236.9	%
Net operating income (loss)		(5,124,729	)		3,528,970			(8,653,699	)		(245.2	)%
Other income:
Less: interest expense		-
Interest income		321,008			184,888			136,120			73.6	%
Loss before income taxes		(4,803,721	)		3,713,858	)		(8,517,579	)		(229.3	)%
Income taxes		2,143			320,584			(318,441	)		(99.3	)%
Net loss		(4,805,864	)		3,393,274	)		(8,199,138	)		(241.6	)%
Less net (loss) attributable to non-controlling interests		(531,423	)		(69,585	)		(461,838	)		(663.7	)%
Net income (loss) attributable to MDB Capital Holdings, LLC	$	(4,274,441	)	$	3,462,859	)	$	(7,737,300	)		(223.4	)%

	●	Compensation Expense: The majority of the increase in compensation expense was due to the recognition of restricted stock units, as well as the ongoing recruitment of additional employees in the latter half of 2023, specifically within the technology segment, to support expected operational growth.
	●	Related Party Operating Expenses: There rise in related party operating expenses due to outsourcing support services in anticipation of upcoming self-clearing operations within the broker-dealer and intellectual property service segments for 2024.
	●	Professional Fees: Professional fees saw an increase from previous periods, driven by higher costs in legal, tax, audit, and consulting services. This rise in expenses was primarily linked to the audit fees, tax return preparations, and K-1s associated with fiscal year 2023 reporting, along with initiation of the self-clearing operations.
	●	Information Technology Costs: Information technology costs saw an increase from previous periods, driven by higher costs in with initiation of the self-clearing operations, as well as increased cloud computing costs.
	●	Clearing and Other Charges: In the second quarter of 2023 there was a large investment banking deal that increased these charges, which were less in second quarter in 2024.
	●	Other General and Administrative Costs: The primary driver of the increase in other general and administrative costs were the issuance of restricted stock options to the board of directors, as well as higher rent expenses in the technology segment compared to the previous period.

	●	Compensation Expense: The increase in compensation expense was driven by an increase in salaries in the in the in early 2024.
	●	Related Party Operating Expenses: There was an increase in related party operating expenses as outsourcing support was increased within the broker-dealer and intellectual property service segment.
	●	Professional Fees: There was a increase in professional fees compared to the previous periods, primarily due to increased consulting, legal, and tax. Furthermore, there was an increase in consulting fees associated with the implementation of self-clearing operations.
	●	Information Technology Costs: Information technology costs saw an increase from previous periods, driven by higher costs with the initiation of the self-clearing operations and increased cloud computing costs.
	●	Clearing and Other Charges: In the second quarter of 2023 there was a large investment banking deal that increased these charges, which were less in second quarter in 2024.
	●	Other General and Administrative Costs: The rise in other general and administrative costs was due to higher expenses in advertising and promotions, along with increased spending on travel and conferences, as well as rent being allocated to the broker-Dealer.

	●	Compensation Expense: The increase in compensation expense stemmed from the recruitment of additional administrative staff, who are not research and development related and therefore, not covered by grants, in the latter half of 2023.
	●	Professional Fees: The increase in professional fees compared to previous periods was due to higher legal, tax, audit, and consulting costs associated with completing year-end financial audits and preparing for the initial public offering.
	●	Information Technology Costs: The increase in information technology costs are due to the increase of personnel and hardware and software needs to support new personnel.
	●	Other General and Administrative Costs: The increase in other general and administrative costs was due to the acquisition of new leased laboratory space in the third quarter of 2023.

	June 30, 2024 (unaudited)			December 31, 2023			$ Change			% Change
ASSETS
Cash and cash equivalents	$	17,523,769		$	6,109,806		$	11,413,963			186.8	%
Cash segregated in compliance with regulations		2,977,914			1,247,881			1,730,003			138.6	%
Grants receivable		1,147,171			882,319			264,852			30.0	%
Clearing deposits		515,222			260,000			255,222			98.2	%
Prepaid expenses and other current assets		488,914			523,788			(34,874	)		(6.7	)%
Investment securities, at amortized cost (U.S. Treasury Bills)		5,041,692			24,658,611			(19,616,919	)		(79.6	)%
Investment securities, at fair value (held by our licensed broker dealer)		6,285,443			5,771,634			513,809			8.9	%
Investment securities, at cost less impairment		200,000			200,000			-			0.0	%
Deferred offering cost		351,478			69,303			282,175			407.2	%
Deferred costs related to deferred revenue		114,109			75,328			38,781			51.5	%
Property and equipment, net		910,287			866,490			43,797			5.1	%
Operating lease right-of-use assets, net		2,149,538			2,320,119			(170,581	)		(7.4	)%
Total assets	$	37,705,537		$	42,985,279		$	(5,279,742	)		(12.3	)%

LIABILITIES AND EQUITY
Accounts payable	$	655,619		$	578,214		$	77,405			13.4	%
Accrued expenses		147,434			1,105,078			(957,644	)		(86.7	)%
Payables to non-customers		986,412			1,405,293			(418,881	)		(29.8	)%
Payables to customers		977,020			-			977,020			100.0	%
Deferred grant reimbursement		120,631			140,703			(20,072	)		(14.3	)%
Deferred revenue		-			20,000			(20,000	)		(100.0	)%
Operating lease liabilities		2,262,560			2,415,889			(153,329	)		(6.3	)%
Total liabilities		5,149,676			5,665,177			(515,501	)		(9.1	)%
Equity:
Paid-in-capital		56,565,645			49,405,779			7,159,866			14.5	%
Accumulated deficit		(23,582,793	)		(12,092,927	)		(11,489,866	)		95.0	%
Total MDB Capital Holdings, LLC Members’ equity		32,982,582			37,312,852			(4,330,000	)		(11.6	)%
Non-controlling interest		(426,991	)		7,250			(434,241	)		(5,989.5	)%
Total equity		32,555,861			37,320,102			(4,764,241	)		(12.8	)%
Total liabilities and equity	$	37,705,537		$	42,985,279		$	(5,279,742	)		(12.3	)%

	Six-Months Ended June 30,
	2024			2023

Net cash used in operating activities	$	(6,468,895	)	$	(3,647,022	)
Net cash provided by (used in) investing activities		19,895,066			1,490,570	)
Net cash provided by financing activities		(282,175	)		(405,029	)
Net increase in cash and cash equivalents	$	13,143,996		$	(2,561,481	)

	MDB CAPITAL HOLDINGS, LLC
	(the “Registrant”)

Dated: August 13, 2024	By:	/s/ Christopher A. Marlett
		Christopher A. Marlett
		Chief Executive Officer
		(Principal Executive Officer)

Dated: August 13, 2024	By:	/s/ Jeremy W. James
		Jeremy W. James
		Chief Accounting Officer
		(Principal Financial and Accounting Officer)