UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

 

OR

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 001-41751

 

MDB CAPITAL HOLDINGS, LLC

(Exact name of registrant as specified in its charter)

 

Delaware		87-4366624
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

14135 Midway Road, Suite G-150 Addison, TX 75001		75001
(Address of principal executive offices)		(Zip code)

 

(945) 262-9010

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

None

 

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

 

Securities registered pursuant to Section 12(g) of the Act:

 

None

 

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. YES☒ NO ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

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

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

 

As of May 14, 2026, the number of outstanding shares of Class A Common Shares, representing limited liability interests, of the registrant was 5,438,632.

 

 

 

TABLE OF CONTENTS

 

		Page Number
PART I	FINANCIAL INFORMATION	2
Item 1	Unaudited Condensed Consolidated Financial Statements	2
Condensed Consolidated Balance Sheets –March 31, 2026 (unaudited) and December 31, 2025		2
Unaudited Condensed Consolidated Statements of Operations – Three Months Ended March 31, 2026 and 2025		3
Unaudited Condensed Consolidated Statements of Changes in Equity – Three Months Ended March 31, 2026 and 2025		4
Unaudited Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2026 and 2025		5
Notes to Unaudited Condensed Consolidated Financial Statements		6
Item 2	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	26
Item 3	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4	Controls and Procedures	34
PART II	OTHER INFORMATION	35
Item 1	Legal Proceedings	35
Item 1A	Risk Factors	35
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3	Defaults upon Senior Securities	36
Item 4	Mine Safety Disclosures	36
Item 5	Other Information	36
Item 6	Exhibits	36

 

 

PART I – FINANCIAL INFORMATION

 

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

MDB CAPITAL HOLDINGS, LLC AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share count):

 

		March 31, 2026 (Unaudited)				December 31, 2025
Cash and cash equivalents		$	12,194			$	13,217
Cash segregated in compliance with regulations			340				2,331
Accounts receivable			185				124
Related party receivables			27				13
Clearing deposits			2,000				2,000
Prepaid expenses and other current assets			396				433
Investment securities, at fair value, held by the licensed broker dealer (Notes 1 and 2)			5,141				7,166
Investment securities, at fair value, held by the non-licensed broker dealer (Notes 1 and 2)			119				235
Equity method investment			36,339				37,543
Deferred costs related to deferred revenue			19				14
Property and equipment, net			181				117
Operating lease right-of-use assets, net			522				547
Total assets		$	57,463			$	63,740
LIABILITIES AND EQUITY
Accounts payable		$	348			$	267
Accrued expenses			58				95
Related party payables			-				1
Payables to customers			252				2,189
Operating lease liabilities			581				609
Total liabilities			1,239				3,161
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; 5,300,132 and 5,138,632 shares issued and outstanding, respectively			-				-
Class B Common Shares, 5,000,000 authorized shares at no par value; 5,000,000 shares issued and outstanding			-				-
Common Stock, value			-				-
Paid-in-capital			82,874				80,493
Accumulated deficit			(26,538	)			(19,803	)
Total MDB Capital Holdings, LLC Members’ equity			56,336				60,690
Non-controlling interest			(112	)			(111	)
Total equity			56,224				60,579
Total liabilities and equity		$	57,463			$	63,740

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

MDB CAPITAL HOLDINGS, LLC AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share data and share count)

 

		2026				2025
		Three Months Ended March 31,
		2026				2025
Operating income (loss):
Unrealized (loss) on investment securities, net from the licensed broker dealer (Notes 1 and 2)		$	(3,047	)		$	(1,463	)
Fee income (from our licensed broker dealer)			2,862				2,140
Other operating income			229				151
Total operating income, net			44				828
Operating costs:
General and administrative costs:
Compensation			3,333				4,336
Operating expense, related party			447				455
Professional fees			684				789
Information technology			282				250
Clearing and other charges			428				289
General and administrative-other			351				619
Total general and administrative costs			5,525				6,738
Research and development costs			-				-
Total operating costs			5,525				6,738
Net operating loss			(5,481	)			(5,910	)
Other income:
Interest income			65				181
Loss related to dilution events			(96	)			-
Unrealized (loss) on investment securities, net from non-licensed broker dealer (Notes 1 and 2)			(116	)			-
Net loss before income taxes			(5,628	)			(5,729	)
Income taxes			-				-
Net loss before equity method investee			(5,628	)			(5,729	)
Equity in loss of equity method investee			(1,108	)			(873	)
Net loss			(6,736	)			(6,602	)
Net loss attributable to non-controlling interests			(1	)			(15	)
Net loss attributable to MDB Capital Holdings, LLC		$	(6,735	)		$	(6,587	)
Loss per share attributable to MDB Capital Holdings, LLC:
Loss per Class A common share – basic and diluted		$	(0.66	)		$	(0.66	)
Weighted average of Class A common shares outstanding – basic and diluted			5,241				4,951
Loss per Class B common share – basic and diluted		$	(0.65	)		$	(0.66	)
Weighted average of Class B common shares outstanding – basic and diluted			5,000				5,000

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

MDB CAPITAL HOLDINGS, LLC AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

 

Three Months Ended March 31, 2026 and 2025

 

		Shares				Amount				Shares				Amount				Capital				Deficit				Interest				Equity
		Class A Common Shares								Class B Common Shares								Paid-In				Accumulated				Noncontrolling				Total
		Shares				Amount				Shares				Amount				Capital				Deficit				Interest				Equity
Balance, December 31, 2025			5,139			$	-				5,000			$	-			$	80,493			$	(19,803	)		$	(111	)		$	60,579
Issuance of Class A Common Shares			161				-				-				-				-				-				-				-
Stock-based compensation			-				-				-				-				2,381				-				-				2,381
Net loss			-				-				-				-				-				(6,735	)			(1	)			(6,736	)
Balance, March 31, 2026			5,300			$	-				5,000			$	-			$	82,874				(26,538	)			(112	)			56,224

 

		Class A Common Shares								Class B Common Shares								Paid-In				Accumulated Income				Noncontrolling				Total
		Shares				Amount				Shares				Amount				Capital				(Deficit)				Interest				Equity
Balance, December 31, 2024			4,951			$	-				5,000			$	-			$	68,721			$	1,442			$	(90	)		$	70,073
Stock-based compensation			-				-				-				-				3,515				-				-				3,515
Net loss			-				-				-				-				-				(6,587	)			(15	)			(6,602	)
Balance, March 31, 2025			4,951			$	-				5,000			$	-			$	72,236			$	(5,145	)		$	(105	)		$	66,986

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

MDB CAPITAL HOLDINGS, LLC AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

 

		2026				2025
		Three Months Ended March 31,
		2026				2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(6,736	)		$	(6,602	)
Adjustments to reconcile net loss to net cash used in operating activities:
Unrealized loss on investment securities, held by the licensed broker dealer			3,044				1,463
Unrealized loss on investment securities, not held by the licensed broker dealer			116				-
Stock-based compensation			2,381				3,515
Depreciation of property and equipment			5				6
Deferred costs related to revenue			(5	)			(21	)
Warrants received as part of investment banking deal			(1,020	)			(990	)
Portion of loss from equity investment			1,108				873
Loss related to dilution events			96				-
Change in ROU Asset			25				23
Change in lease liability			(28	)			(25	)
Changes in operating assets and liabilities:
(Increase) decrease in -
Related party receivables			(14	)			(23	)
Accounts receivable			(61	)			-
Prepaid expenses and other current assets			37				40
Clearing deposits			-				723
Increase (decrease) in -
Accounts payable			81				51
Payables to customers			(1,937	)			(400	)
Related party payables			(1	)			11
Accrued expenses			(36	)			98
Net cash used in operating activities			(2,945	)			(1,258	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(69	)			-
Net cash used in investing activities			(69	)			-
CASH FLOWS FROM FINANCING ACTIVITIES:			-				-
Net cash used in financing activities			-				-
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH			(3,014	)			(1,258	)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - BEGINNING OF PERIOD			15,548				21,281
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH - END OF PERIOD		$	12,534			$	20,023
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		$	1,020			$	990

 

The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the unaudited condensed consolidated balance sheets to the total of the same such amounts shown in the unaudited condensed consolidated statements of cash flows (in thousands):

 

		March 31, 2026				December 31, 2025
Cash and cash equivalents		$	12,194			$	13,217
Cash segregated in compliance with regulations			340				2,331
Total cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows		$	12,534			$	15,548

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 

MDB CAPITAL HOLDINGS, LLC AND SUBSIDIARIES

 

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Three Months Ended March 31, 2026 and 2025

 

1. Organization and Description of Business

 

MDB Capital Holdings, LLC (“the Company” or “MDB”), a Delaware limited liability company, is a holding company that has three wholly-owned subsidiaries: MDB CG Management Company (“MDB Management”); Public Ventures, LLC, d/b/a MDB Capital (“Public Ventures”); and PatentVest, Inc. (“PatentVest”), one majority owned subsidiary, MDB Minnesota One (“M1”), and one minority owned company eXoZymes Inc., formerly known as Invizyne Technologies, Inc., (“eXoZymes”), that was majority owned and was consolidated until November 14, 2024, when eXoZymes issued securities in its IPO and no longer was majority owned by MDB.

 

MDB Management is principally an “administrative” entity whose purpose is to conduct, and wherever possible, to consolidate shared services/resources, for our US-based operations.

 

Public Ventures is a U.S. registered broker-dealer under the Securities Exchange Act of 1934 (“Exchange Act”), and is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Texas State Securities Board. Public Ventures operates on a fully disclosed basis with a nonrelated FINRA member firm, Interactive Brokers, LLC (“Interactive Brokers”), and is not required to maintain a clearing deposit. Interactive Brokers is the clearing firm and custodian of investments maintained by Public Ventures.

 

Public Ventures also operates as a self-clearing broker dealer. The Company began carrying accounts for customers in January 2024. The Company does not carry proprietary accounts of broker dealers (“PAB accounts”) (as defined in Rule 15c3-3) for the period ended December 31, 2025.

 

PatentVest is a wholly-owned subsidiary that performs intellectual property validation services for Public Ventures’, due diligence functions on the intellectual property of partner and prospective partner companies, and creates an intellectual property roadmap for such partner companies. PatentVest also provides intellectual property validation services for other clients.

 

M1 is a majority owned subsidiary and was formed with the purpose of developing pharmaceuticals based on patents and licensed technology from an affiliate of the Mayo Clinic organization, the Mayo Foundation for Medical Education and Research.

 

On September 20, 2023, MDB completed an initial public offering “IPO”, consisting of the sale of 1,666,666 shares of Class A Common Shares at $12.00 per share, for gross proceeds of $19,999,992. In conjunction with the IPO, the Company issued warrants to the placement agent to purchase 16,667 shares of Class A Common Shares, exercisable upon issuance for a period of 5 years at $15.00 per share, for a cash consideration of $0.001/share. The placement agent’s warrants had a fair value of $65,411.

 

On July 1, 2024, the founding ownership of M1 had MDB owning 67% and Mayo Foundation for Medical Education and Research (“Mayo”) owning 33% of the issued and outstanding common stock. M1 was formed with the purpose of developing pharmaceuticals, based on patents and licensed technology from Mayo. After the initial formation of M1 and finalization and entry into a license agreement between Mayo and M1, MDB entered into a Term Equity Purchase Agreement (“Purchase Agreement”) to provide capital for operations of M1 in exchange for the issuance of shares of common stock of M1 to MDB (see note 11 for the description of the license agreement).

 

 

2. Summary of Significant Accounting Policies

 

Basis of Presentation and Principles of Consolidation

 

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the financial statements of wholly-owned and majority owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. Non-controlling interests at March 31, 2026 and 2025 relate to the interests of third parties in the partially owned subsidiaries.

 

The managing members of the Company have a controlling interest in PatentVest, S.A., a company organized and based in Nicaragua (which was renamed MDB Capital, S.A in 2022). As the Company itself does not have a controlling financial interest in this entity, management has determined PatentVest, S.A. is not a variable interest entity and should not be consolidated as it has no ownership interests, so has excluded this entity from the Company’s consolidated financial statements. It is the Company’s policy to reevaluate this conclusion on an annual basis or if there are significant changes in ownership.

 

Equity method investment

 

The Company applies the equity method to account for investments in entities where it has the ability to exercise significant influence over the operating and financial policies of the investee. Under the equity method, the investment in eXoZymes Inc, (“eXoZymes “), formerly Invizyne Technologies Inc. (“Invizyne”)”, is initially recorded at cost and subsequently adjusted to reflect the Company’s proportional share of the investee’s results of operations in its consolidated financial statements. Equity method investments are periodically reviewed for any other-than-temporary declines in value. The Company’s investment in eXoZymes is presented as “Equity method investment” on the consolidated balance sheet.

 

Any excess of the acquisition cost over the Company’s share of the net fair value of eXoZymes’ identifiable assets and liabilities at the acquisition date is recognized as goodwill, which is included in the carrying amount of the investment.

 

When the Company increases its interest in an affiliate accounted for under the equity method while retaining significant influence, it applies the acquisition method only to the additional interest acquired, leaving the previous interest unchanged. Conversely, when there is a decrease in the interest in an affiliate accounted for under the equity method while retaining significant influence, the Company derecognizes a proportionate part of its investment and recognizes any resulting gain or loss in profit or loss.

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method, under which it recognizes the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in the financial statements or tax returns. The Company measures current and deferred tax assets and liabilities based on provisions of enacted tax law. It evaluates the realization of our deferred tax assets based on all available evidence and establish a valuation allowance to reduce deferred tax assets when it is more likely than not that they will not be realized.

 

 

Use of Estimates

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the disclosure of contingent assets and liabilities. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include those related to assumptions used in the valuation of investment securities, accruals for potential liabilities, valuing equity instruments issued for services, assumptions used in the valuation of the equity method investment and gains on the deconsolidation of the subsidiary, the estimate of the fair value of the lease liability and related right of use assets, net realizable value of receivables, useful life of property and equipment, determining impairment of long-lived assets, and the realization of any deferred tax assets.

 

Emerging Growth Company

 

The Company is an “emerging growth company,” or “EGC” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies.

 

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected to opt out of the extended transition periods.

 

Cash and Cash Equivalents

 

The Company considers highly liquid investments with original maturities or remaining maturities upon purchase of three months or less to be cash equivalents.

 

The Company’s policy is to maintain its cash balances with financial institutions with high credit ratings and in accounts insured by the Federal Deposit Insurance Corporation (the “FDIC”) and/or by the Securities Investor Protection Corporation (the “SIPC”). The Company may periodically have cash balances in financial institutions in excess of the FDIC and SIPC insurance limits of $250 thousand and $500 thousand, respectively.

 

The Company periodically reviews the financial condition of the financial institutions and assesses the credit risk of such investments. The Company did not experience any credit risk losses during the three months ended March 31, 2026 and 2025.

 

Segregated Cash and Deposits

 

The Company provides deposits or enters into agreements that would require funds to be held in a segregated cash account. At March 31, 2026, the Company had $0.3 million of segregated cash consisting of funds held in reserve for customers. At December 31, 2025, the Company had $2.3 million of segregated cash consisting of funds held in reserve for customers and non-customers.

 

Clearing Deposits

 

The Company is obligated to maintain security deposits with the DTC and NSCC. At March 31, 2026 and December 31, 2025, these deposits totaled $2.0 million and $2.0 million.

 

 

Prepaid Expenses and Other Current Assets

 

The Company has prepaid and other current assets totaling $396 thousand at March 31, 2026, consisting of acquired intangible assets totaling $44 thousand, prepaid professional fees totaling $50 thousand, security deposits totaling $19 thousand, prepaid insurance of $139 thousand, various prepaid expenses of $124 thousand, and other assets of $20 thousand. Prepaid and other assets totaling $433 thousand at December 31, 2025, consisting of acquired intangible assets totaling $44 thousand, prepaid professional fees totaling $50 thousand, security deposits totaling $19 thousand, prepaid insurance of $169 thousand, various prepaid expenses of $130 thousand, and other assets of $21 thousand.

 

Leases

 

Leases of the Company consist primarily of contracts for the right to use and direct use of an individual property. Leases were analyzed for evidence of significant additional components and to determine if these components were separately identifiable within the context of the contract. As an accounting policy, to account for these components, the Company has elected the practical expedient for property leases that have both lease and non-lease components for them to be combined into a single component and account for as a lease. This policy is effective for all current and future property operating leases and applied uniformly and will be disclosed as such within the financial statements. Operating lease assets are included within right-of-use assets and the corresponding operating lease liabilities are included within liabilities on the Company’s consolidated balance sheet as of March 31, 2026 and December 31, 2025.

 

The Company has elected not to present short-term leases on the consolidated balance sheet as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise. All other right-of-use assets and lease liabilities are recognized based on the present value of lease payments over the lease term at the lease commencement date. Because the Company’s leases do not provide an implicit rate of return, the Company used the Company’s incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments.

 

Stock Based Compensation

 

Stock-based compensation primarily consists of restricted stock units with service or market/performance conditions. Equity awards are measured at the fair market value of the underlying stock at the grant date. The Company recognized stock based compensation expense using the straight-line attribution method over the requisite service period. The Company’s subsidiary issued stock-options and the fair value is determined utilizing Black-Scholes options-pricing model. The Company accounts for forfeitures as they occur, rather than applying an estimated forfeiture rate. For performance-based restricted stock units, the compensation cost is recognized based on the number of units expected to vest upon the achievement of the performance conditions. Shares are issued on the vesting dates net of the applicable statutory tax withholding to be paid by us on behalf of our employees. As a result, fewer shares are issued to the employee than the number of awards outstanding. The Company records a liability for the tax withholding to be paid by it as a reduction to Additional paid-in capital.

 

Investment Securities

 

The Company strategically invests funds in U.S. Treasury Bills, early-stage technology companies, and equity securities and options of publicly traded and privately held companies. The Company classifies investment securities as investment securities, at amortized cost, investment securities, at fair value, or investment securities, at cost less impairment.

 

Investment securities, at amortized cost – From time to time the Company will hold funds in investment securities, at amortized cost. This is comprised of debt securities held by MDB and are classified as investment securities held-to-maturity and carried at amortized cost if management has the positive intent and ability to hold the securities to maturity. Initially, the cost of these securities was recorded, and later on, they were assessed at amortized cost, which was modified for unamortized purchase premiums and discounts, and also for credit losses provision. Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the other operating income in the statements of operations. Interest income is recognized when earned. The Company recognizes estimated expected credit losses over the life of the investment security through the allowance for credit losses account. The allowance for credit losses is a valuation account that is deducted from, or added to, the amortized cost basis of the investment security to present the net amount expected to be collected. In determining expected credit losses, the Company considers relevant qualitative factors including, but not limited to, term and structure of the instrument, credit rating by rating agencies and historic credit losses adjusted for current conditions and reasonable and supportable forecasts. The Company holds investments in U.S. Treasury Bills or money market funds backed by U.S. Treasury Bills, so there are no expected credit losses. Declines in fair value of these securities is due to changes in market interest rates, and because it expects to hold these securities until maturity, it does not expect to realize any losses. There were no investment securities, at amortized cost as of March 31, 2026 and December 31, 2025.

 

Investment securities, at fair value - This is comprised of equity investments held by the broker dealer subsidiary and are reported at fair value with changes in fair value recognized in the statement of operations. Purchases and sales of equity securities, consisting of common stock and warrants to purchase common stock, are recorded based on the respective market price quotations on the trade date. Realized gains and losses on investments represent the net gains and losses on investments sold during the period based on the average cost method. Differences between the fair value of investments at the beginning of the year and the end of the year are recorded on the income statement as unrealized gains and losses.

 

Investment securities, at cost less impairment - This is comprised of equity securities without a readily determinable fair value held by the broker dealer subsidiary, the Company has elected to apply the measurement alternative of cost minus impairment, if any, plus or minus changes resulting from observable price changes. The Company will reassess whether such an investment qualifies for the measurement alternative at each reporting period. In evaluating an investment for impairment or observable price changes, we will use inputs including recent financing events, as well as other available information regarding the investee’s historical and forecasted performance. The Company has assessed this investment and determined that the current impairment of such securities held at March 31, 2026 is accurate.

 

 

There were no securities at amortized cost on March 31, 2026 and December 31, 2025.

 

Investment securities are as follows (in thousands):

 

Broker/Dealer Securities

Schedule of Investment Securities Broker Dealer 

		March 31, 2026				December 31, 2025
Investment securities, at fair value:
Common stock of publicly traded companies		$	1,315			$	2,571
Warrants of publicly traded companies			3,163				3,937
Warrants of non-publicly traded companies			663				658
Investment securities, at fair value		$	5,141			$	7,166

 

Non-Broker/Dealer Securities

Schedule of Investment Securities Non-Broker Dealer 

		March 31, 2026				December 31, 2025
Investment securities, at fair value:
Common stock of publicly traded companies		$	119			$	235
Investment securities, at fair value		$	119			$	235

 

For investment securities at fair value, net unrealized loss of $3.0 and $1.46 million, were recognized in the statements of operations for three-months ended March 31, 2026 and 2025, respectively.

 

Fair Value of Financial Instruments

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. There is no significant concentration of credit risk, due to the majority of assets being invested in U.S. Treasury Bills.

 

The Company determines the fair value of its financial instruments based on a fair value hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three levels:

 

Level 1–- Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date.

 

Level 2–- Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

 

Level 3–- Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions.

 

The Company’s financial instruments primarily consist of cash and investment securities. As of the balance sheet dates, certain investment securities are required to be recorded at fair value with the change in fair value during the period being recorded as an unrealized gain or loss. As of March 31, 2026 and December 31, 2025, the estimated fair values of investment securities, at amortized cost were not materially different from their carrying values as presented as of the balance sheet date. This is primarily attributed to the short-term maturities of these instruments.

 

 

Investment securities, at amortized cost: The fair value of U.S. Treasury Bills classified as held-to-maturity investment securities is based on the market price and is classified as Level 1 of the fair value hierarchy.

 

A description of the valuation techniques applied to the Company’s major categories of assets and liabilities measured at fair value on a recurring basis is as follows:

 

Investment securities: Public equity securities are assessed for valuation at the close of each period. Warrants are valued using the Black-Scholes model, which considers the stock price at the date of the valuation, the warrants strike price, the term to expiry, the risk-free rate of return, and the expected volatility of the underlying stock.

 

Investment securities, at cost less impairment: Non-public equity securities and simple agreements for future equity are valued based on the initial investment, less impairment. The Company determined that no impairment was warranted. Since these securities are not actively traded, we will apply valuation adjustments when they become available, and they are categorized in Level 3 of the fair value hierarchy.

 

The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026, except for the Level 3 investment that is recorded at cost (in thousands):

Schedule of Fair Value of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis 

Assets		Classification		Level 1				Level 2				Level 3				Total
Investment Securities, at fair value, held by the licensed broker dealer		Equity securities–- common stock		$	1,315			$	-			$	-			$	1,315
Investment Securities, at fair value, held by the non-licensed broker dealer		Equity securities–- common stock			119				-				-				119
Investment Securities (held by our licensed broker dealer)		Warrants			-				1,653				2,173				3,826
Total assets measured at fair value (held by our licensed broker dealer)				$	1,434			$	1,653			$	2,173			$	5,260

 

During the three months ended March 31, 2026, the Company had transfers between Level 3 to Level 2 of the fair value hierarchy of a fair value of $3.8 million.

 

Reconciliation of fair value measurements categorized within Level 3 of the fair value hierarchy (in thousands):

Schedule of Reconciliation of Fair Value Measurements Within Level 3 of Fair Value Hierarchy 

December 31, 2025		$	4,463
Beginning Balance		$	4,463
Receipt from investment banking fees			1,020
Transfer of securities from Level 3 to Level 2			(3,805	)
Unrealized gains			495
Sales or distribution			-
Purchases			-
March 31, 2026		$	2,173
Ending Balance		$	2,173

 

The following table presents information about significant unobservable inputs related to material components of Level 3 warrants as of March 31, 2026 (in thousands):

Schedule of Significant Unobservable Inputs Related to Material Components of Level 3 Warrants 

Assets		Fair Value				Valuation Techniques		Significant Unobservable Inputs		Range of Inputs				Weighted- Average
Warrants		$	2,173			Black Scholes		Volatility			78.44-110.25	%			88.37	%

 

 

The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025, except for the Level 3 investment that is recorded at cost (in thousands):

 

 

During the three months ended December 31, 2025, the Company did not have any transfers between Level 1, Level 2, or Level 3 of the fair value hierarchy.

 

Reconciliation of fair value measurements categorized within Level 3 of the fair value hierarchy (in thousands):

 

 

The following table presents information about significant unobservable inputs related to material components of Level 3 warrants as of December 31, 2025 (in thousands):

 

 

Secured Debt–- Revolving Credit Facility

 

The Company entered into a revolving credit facility with a bank, (the “Lender”) on July 26, 2025, for a commitment of up to $2.0 million and which matures on July 26, 2026. The loan has a variable interest rate equal to a defined index, currently the Lender’s rate on the sale of Federal Funds, plus 2.25%. The loan commenced with a calculated interest rate of 7.75%. If the Lender determines, in its sole discretion, that the index becomes unavailable or unreliable, either temporary, indefinitely, or permanently, during the term of this loan, the Lender may amend this loan by designating a substantially similar substitute index. The agreement provides for a quarterly payment of the greater of accrued interest or a non-usage fee of $5 thousand. The Company has not made any draw downs on the credit facility.

 

The Company granted the Lender a security interest in a cash checking account held at the bank as collateral. The Lender has a right of setoff available from this cash account when the line of credit is accessed. As of March 31, 2026 and 2025, there was $2.2 million and $2.1 million deposited in this account.

 

The Company is responsible for the payment of all of the Lender’s legal and other fees incurred in connection with administering the loan. The Company has incurred no such costs or debt issue costs.

 

As of March 31, 2026 and December 31, 2025, there are no outstanding indebtedness under the credit facility and interest expense totaled $0. The Company is in compliance with all material covenants under the agreement.

 

 

Property and Equipment

 

Property and equipment are recorded at cost. Major improvements are capitalized, while maintenance and repairs are charged to expense as incurred. Gains and losses from disposition of property and equipment are included in the statements of operations when realized. Depreciation is provided using the straight-line method over the following estimated useful lives:

Schedule of Estimated Useful Lives of Property and Equipment 

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

 

Property and equipment consist of the following as of March 31, 2026 and December 31, 2025, respectively (in thousands):

Schedule of Property And Equipment 

		March 31, 2026				December 31, 2025
Laboratory equipment		$	-			$	-
Furniture and fixtures			-				-
Developed software			186				139
Leasehold improvements			-				-
Total property and equipment			186				139
Less: Accumulated depreciation			(5	)			(22	)
Property and equipment, net		$	181			$	117

 

Revenue

 

The Company generates revenue primarily from providing brokerage services and underwriting through Public Ventures. PatentVest and eXoZymes, have had limited activity during during the three months ended March 31, 2026 and 2025.

 

Brokerage revenues consist of (i) trade-based commission income from executed trade orders, (ii) net realized gains and losses from proprietary trades, and (iii) other income consisting primarily of stock loan income earned on customer accounts. Public Ventures recognizes revenue from trade-based commissions and other income when performance obligations are satisfied through the transfer of control, as specified in the contract, of promised services to the customers of Public Ventures. Commissions are recognized on a trade date basis. Public Ventures believes that each executed trade order represents a single performance obligation that is fulfilled on the trade date because that is when the underlying financial instrument is identified, the pricing is agreed upon, and the risks and rewards of ownership have been transferred to/from the customer. When another party is involved in transferring a good or service to a customer, Public Ventures assesses whether revenue is presented based on the gross consideration received from customers (principal) or net of amounts paid to a third party (agent). Public Ventures has determined that it is acting as the principal as the provider of the brokerage services and therefore records this revenue on a gross basis. Clearing, custody and trade administration fees incurred from Interactive Brokers, the Company’s clearing firm, are recorded effective as of the trade date. The costs are treated as fulfillment costs and are recorded in operating expenses in the consolidated statements of operations.

 

Brokerage revenue is measured by the transaction price, which is defined as the amount of consideration that Public Ventures expects to receive in exchange for services to customers. The transaction price is adjusted for estimates of known or expected variable consideration based upon the individual contract terms. Variable consideration is recorded as a reduction to revenue based on amounts that Public Ventures expects to refund back to the customer. There were no variable considerations for the three months ended March 31, 2026 and 2025, respectively.

 

 

Investment banking revenues consist of private placement and underwriting fees. The Company generally does not incur costs to obtain contracts with customers that are eligible for deferral or receive fees prior to recognizing revenue related to investment banking transactions, and therefore, as of March 31, 2026 and 2025, the Company did not have any contract assets or liabilities related to these revenues on its consolidated balance sheets.

 

The Company enters into underwriting agreements, to act as an underwriter for security offerings, which are for the purpose of the distribution and sale of securities to investors. These agreements allow non-defaulting underwriters and the issuer to seek substitute purchasers within 36 hours if an underwriter defaults on its commitment. If replacements are not found and the default exceeds 10% of the offering, the agreement may be terminated without liability. Under ASC 606, revenue is recognized only upon transfer of cash from the investors to the issuer, which is the final receipt of payment in exchange for the securities being purchased on the date of closing, with no recognition for defaulted or terminated portions until resolution.

 

Private placement fees are related to non-underwritten transactions such as private placements of equity securities, private investments in public equity, and Rule 144A private offerings and are recorded on the closing date of the transaction. Client reimbursements for costs associated with private placement fees are recorded gross within investment banking and various expense captions, excluding compensation. The Company typically receives payments on private placements transactions at the completion of the contract. The Company views the majority of placement fees as a single performance obligation that is satisfied when the transaction is complete, and the revenue is recognized at that point in time.

 

Taxes and regulatory fees assessed by a government authority or agency that are both imposed on and concurrent with a specified revenue-producing transaction, which are collected by Public Ventures from a customer, are excluded from revenue and recorded against general and administrative expenses.

 

Public Ventures does not incur any costs to obtain contracts with customers for revenues that are eligible for deferral or receive fees prior to recognizing revenue, and therefore, as of March 31, 2026 and 2025, Public Ventures did not have any contract assets or liabilities related to these revenues in its consolidated balance sheet.

 

During the three months ended March 31, 2026 and 2025, the Company’s technology development segment revenue had no revenue.

 

PatentVest recognizes revenue when performance obligations are satisfied by transferring promised goods and services to customers in an amount the Company expects to receive in exchange for those goods or services. PatentVest enters into contracts that can include various combinations of its offerings which are generally capable of being distinct and accounted for as a separate performance obligation for the entire contract or a portion of the contract. When performance obligations are combined into a single contract, PatentVest utilizes stand-alone selling price to allocate the transaction price among the performance obligations.

 

Certain contracts or portions of contracts are duration-based, which in the event of customer cancellation, provide PatentVest with an enforceable right to a proportional payment for the portion of the services provided. Accordingly, revenue from duration-based contracts is recognized using a time-based measure of progress, which PatentVest believes best depicts how it satisfies its performance obligations in these arrangements as control is continuously transferred throughout the contract period. Revenue from certain contracts is recognized over the expected period of performance using a single measure of progress, typically based on hours incurred. Payments received in advance of services being rendered are recorded as a component of contract liabilities.

 

 

Research and Development Costs

 

Research and development costs are expensed as incurred. Research and development costs consist primarily of compensation costs, fees paid to consultants, and other expenses relating to the development of new technology. For the three months ended March 31, 2026 and 2025, research and development costs prior to offset of the grants amounted to $0 and $0, respectively, which includes grant costs expensed, grants fees, and research and development costs, net of the grant received.

 

Patent and Licensing Legal and Filing Fees and Costs

 

Due to the significant uncertainty associated with the successful development of one or more commercially viable products based on the research efforts and related patent applications, all patent and licensing legal and filing fees and costs related to the development and protection of its intellectual property are charged to operations as incurred.

 

Patent and licensing legal and filing fees and costs were $16 thousand and $16 thousand for the three-months ended March 31, 2026 and 2025, respectively. Patent and licensing legal and filing fees and costs are included in general and administrative costs.

 

3. Segment Reporting

 

In its operation of the business, management, including the Company’s chief operating decision maker, who is also the Company’s Chief Executive Officer, reviews certain financial information, including segmented profit and loss and balance sheet statements.

 

The Company currently operates in two reportable segments: a broker dealer & intellectual property service and technology development.

 

The broker dealer & intellectual property service segment currently has two subsidiaries, Public Ventures and PatentVest. Public Ventures is a full-service broker dealer firm focusing on conducting private and public securities offerings. PatentVest offers in-depth patent research used for investment banking due diligence.

 

For the three months ended March 31, 2026 and 2025, the Company’s technology development segment consisted of a single subsidiary, M1, a research and development stage company focused on developing a small molecule senescence platform started in July 2024.

 

Non-income generating subsidiaries for management of the business, including MDB CG Management Company, Inc. are reported in the Other column in the table below

 

The following sets forth the long-lived assets and total assets by segment at March 31, 2026:

Schedule of Long-lived Assets and Total Assets by Segment 

ASSETS		Broker Dealer & Intellectual Property Service				Technology Development				Other				Eliminations				Consolidated
Long-lived assets		$	181			$	-			$	522			$	-			$	703
Total assets		$	20,033			$	-			$	37,430			$	-			$	57,463

 

 

The following sets forth statements of operations by segment for the three months ended March 31, 2026:

 

Schedule of Statement of Operation by Segment

		Broker Dealer & Intellectual Property Service				Technology Development				Other				Eliminations				Consolidated
Operating income:
Unrealized (loss) on investment securities, net from the licensed broker dealer (1)		$	(3,047	)		$	-			$	-			$	-			$	(3,047	)
Fee income (from our licensed broker dealer) (2)			2,862				-				-				-				2,862
Other operating income (3)			229				-				-				-				229
Total operating income, net			44				-				-				-				44
Operating costs:
General and administrative costs:
Compensation			639				-				2,694				-				3,333
Operating expense, related party			354				-				93				-				447
Professional fees			278				3				403				-				684
Information technology			249				-				33				-				282
Clearing and other charges			428				-				-				-				428
General and administrative-other			191				-				160				-				351
General and administrative costs			2,139				3				3,383				-				5,525
Research and development costs			-				-				-				-				-
Total operating costs			2,139				3				3,383				-				5,525
Net loss			(2,095	)			(3	)			(3,383	)			-				(5,481	)
Other income and expense:
Miscellaneous income															-
Interest expense			(247	)			-				-				247				-
Interest income			64				-				248				(247	)			65
Loss related to dilution events			-				-				(96	)			-				(96	)
Unrealized loss on investment securities, at fair value, held by the non-licensed broker dealer (1)			(116	)			-				-				-				(116	)
Loss before income taxes			(2,394	)			(3	)			(3,231	)			-				(5,628	)
Income tax expense			-				-				-				-				-
Loss before equity method investee			(2,394	)			(3	)			(3,231	)			-				(5,628	)
Equity in loss of equity method investee			-				-				(1,108	)			-				(1,108	)
Net loss			(2,394	)			(3	)			(4,339	)			-				(6,736	)
Net loss attributable to non-controlling interests			-				(1	)			-				-				(1	)
Net loss attributable to MDB Capital Holdings, LLC		$	(2,394	)		$	(2	)		$	(4,339	)		$	-			$	(6,735	)

 

(1)	Includes unrealized gains and losses on securities held by the broker-dealer.
(2)	Includes fee income generated for the broker-dealer from investment banking activities, including advisory services, capital raising, and other related financial transactions.
(3)	Includes fees earned from self-clearing activities by the broker-dealer and professional fees generated by PatentVest services.

 

The following sets forth the long-lived assets and total assets by segment at December 31, 2025:

 

 

 

The following sets forth statements of operations by segment for the three-months March 31, 2025:

 

 

4. Equity and Non-Controlling Interests

 

Equity

 

Preferred shares – 10 million shares authorized, no shares issued and outstanding. The board of directors may designate preferred shares to be issued, and may rank preferred shares as junior to, on parity with or senior to other preferred shares (in each case, with respect to distributions or other payments in respect of shares). Since the board of directors may set all the terms of any class of preferred shares, these are considered “blank check” preferred shares. Currently the board has not defined dividend and liquidation preference, participation rights, call prices and dates, sinking-fund requirements, or terms that may change the conversation or exercise price.

 

Class A Common Shares – 95 million shares authorized, 5.3 million shares issued and outstanding as of March 31, 2026 and 5.1 million shares issued and outstanding as of December 31, 2025. These shares are common shares and have one vote per share. Currently there is not a defined dividend or liquidation preference.

 

Class B Common Shares – 5 million shares authorized, 5 million issued and outstanding as of March 31, 2026 and December 31, 2025. These shares are common shares and have five votes per share. Currently there is not a defined dividend or liquidation preference. These shares may be converted one to one for Class A Common Shares.

 

Placement Agent and Selling Agent Warrants – 43 thousand warrants of Class A common shares were issued as part of the private placement and the initial public offering. The Placement Agent and Selling Agent Warrants are subject to standard anti-dilution provisions and may include cashless exercise provisions under certain circumstances. The issuance of the Placement and Selling Agent Warrants is a customary part of compensation for the placement or selling agent’s services in connection with prior offerings.

 

 

Non-Controlling Interests (NCI)

 

For the three months ended March 31, 2026, the Company held a weighted average of 67.87% ownership interest in M1, with the remaining 32.13% representing NCI. For the three months ended March 31, 2025, the Company held a weighted average of 67.78% ownership interest in M1, with the remaining 32.22% representing NCI.

 

During each period, controlling and NCI changes as a result of capital infusions from the Company. For the three months ended March 31, 2026, there were $9 thousand of capital infusions. For the three months ended March 31, 2025, there were $56 thousand of capital infusions. The NCI ownership will be equal to the NCI percentage as of the reporting period.

Schedule of Equity and Non-Controlling Interests 

		For the Three Months Ended March 31,
		2026				2025
Non-controlling companies net loss		$	(3	)		$	(45	)
Weighted average non-controlling percentage			32.13	%			32.22	%
Net loss non-controlling interest		$	(1	)		$	(15	)
Prior period balance			(111	)			(90	)
Stock-based compensation			-				-
Ending period balance		$	(112	)		$	(105	)

 

If there is a change in the parent ownership in a subsidiary from an additional investment or from the issuance of stock based compensation, a change of the non-controlling ownership is recognized based on the amount invested as required, and per ASC 810-45-21A, the carrying amount of the non-controlling interest is adjusted to reflect the change in the non-controlling ownership in the subsidiary’s net assets. Since there was a change in the equity, a reclassification of the non-controlling interest in the subsidiary’s net assets is required and demonstrated in the ending period balance above.

 

5. Equity Method Investment

 

On November 14, 2024, eXoZymes underwent an initial public offering in which MDB’s ownership interest in eXoZymes decreased from 60% to 47%. MDB and eXoZymes deconsolidated the financial statements when the investment in eXoZymes fell below 50% majority ownership.

 

The fair value of the equity method investment was determined based on the number of eXoZymes shares held by MDB and the market price of eXoZymes stock on the deconsolidation date. This valuation also included the estimated fair value of warrants held in eXoZymes, along with an assessment of the investment for any potential impairment.

 

The Company’s portion of the net loss for the three-months ended March 31, 2026 was $1.1 million. As of March 31, 2026, MDB owned 3,931,133 of eXoZymes shares, representing a 46.36% ownership of eXoZymes.

 

The following summarizes the Company’ consolidated balance sheet equity method investment as follows (in thousands):

Schedule of Equity Method Investment

 

		Carrying Amount
December 31, 2025, beginning balance		$	37,543
Portion of loss from eXoZymes			(1,108	)
Loss related to dilution events			(96	)
March 31, 2026, carrying amount		$	36,339

 

 

6. Stock-Based Compensation

 

On April 28, 2025, Mo Hayat, Chris Marlett, George Brandon, and Anthony DiGiandomenico voluntarily relinquished their outstanding restricted stock units (RSUs) in exchange for stock options for an equivalent number of Class A shares and similar vesting schedules. This exchange was executed as part of a broader equity compensation strategy aimed at aligning long-term incentives with shareholder value creation. The terms of the stock options, including exercise price and vesting schedules, were approved by the Company’s Board of Directors in accordance with the existing equity incentive plan and Section 16 of the Exchange Act.

 

Between April 19, 2022 and September 21, 2022, the Company granted 3.7 million restricted stock units (“RSUs”). These units vested 20% of one-half of the total number of RSUs, by each individual person, on the thirteenth (13) month anniversary, October 20, 2024, of the listing of the Class A Shares on a United States national exchange, then vesting would be at a rate of 10% of one-half the number of RSUs each six months after the date of the initial vesting, until the last vesting on the fifth year anniversary of the date of grant, at which any previously unvested would fully vest. These RSUs were granted to officers, directors, employees, and contractors. These RSU began to vest upon the completion of the initial public offering by the Company on September 20, 2023, compensation expense related to these RSUs has been recorded. The Company expensed the RSUs based on the average expense over the vesting period. For the year ended December 31, 2025, 128 thousand RSUs were canceled, with five thousand being canceled prior to March 31, 2025, due to holder leaving the Company and 1.6 million RSUs were exchanged and converted to stock options. As a result of the modification, the fair value of the awards immediately after the modification was determined to be $6.0 million compared to the fair value of the original restricted stock unit awards of $6.8 million immediately prior to the modification. The modification resulted to a decrease in the aggregate fair value of the awards and in accordance with ASC 718-Compensation—Stock Compensation, no incremental compensation costs need to be recognized over the remaining requisite service period. The total unrecognized compensation expense time vesting RSUs as of March 31, 2026, was $4.5 million. The weighted average of the remaining restricted stock units at March 31, 2026, was 1.4 years and at March 31, 2025, was 2.2 years. During the three months ended March 31, 2026, 68 thousand RSUs were canceled due to the two holders leaving the Company.

 

On April 19, 2022, the Company granted 2 million restricted stock units (“RSUs”). These units will vest 20% of one-half of the total number of RSUs, by each individual person, starting on the thirteenth (13) month anniversary of the listing of the Class A Shares on a United States national exchange, October 20, 2024, when a Class A Share has traded in the market on which the Class A Shares are listed for any 90 consecutive calendar days at an average price of $20.00 or more during the period commencing the date of grant and prior to the five year anniversary of the date of grant, with an average monthly trading volume of 2 million Class A Shares or more during the 90 consecutive calendar day period, or a Class A Shares has traded in the market on which the Class A Shares are listed for any 90 consecutive calendar days at an average price of $25.00 or more during the period commencing the date of grant and prior to the five year anniversary of the date of grant; provided further, that if there is a distribution of cash, stock or other property by the Company on the Class A Shares, then the foregoing average amounts of $20.00 or $25.00 will be reduced, from time to time, by the value of any one or more per share distributions after the date of grant until vested. As these RSUs did not begin to vest until the completion of an initial public offering, which was completed on September 20, 2023, by the Company, which was outside of the control of the Company, compensation expense related to these RSUs has been recorded. On April 28, 2025, all of the market based RSUs were modified and exchanged for stock options in their place. The unvested portion of the market based RSUs was $8.7 million and the incremental value of $5.5 million in the exchange for a total amortized amount of $14.2 million that will be amortized over the 10ten-year life of the award. There is not an estimated unrecognized compensation expense, as all the RSUs were modified and exchanged for stock options.

 

A summary of restricted stock unit activity during the three-months ended March 31, 2026 and 2025 is presented below (in thousands, except for share price and contractual life):

Schedule of Restricted Stock Unit Activity 

		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 March 31, 2025			2,990			$	9.90				2,000			$	7.91
Granted			-				-				-				-
Vested			(188	)			9.69				-				-
Exchanged/Modified			(1,600	)			10.00				(2,000	)			7.91
Expired/Cancelled			(123	)		$	9.97				-				-
Restricted stock units outstanding at December 31, 2025			1,079			$	9.76				-			$	-
Granted			(161	)			9.82				-				-
Vested			-				-				-				-
Expired/Cancelled			(68	)			10.00				-				-
Restricted stock units outstanding at March 31, 2026			850			$	9.76				-			$	-
Restricted stock units at March 31, 2025			655			$	10.00				-			$	-
Restricted stock units at March 31, 2026			1,004			$	9.92				-			$	-

 

 

On April 28, 2025, in exchange for 1.6 million unvested time-based RSUs, stock options to purchase 1.6 million shares of Common Shares were granted at an exercise price of $4.25 per share, which was equal to the closing price of the Common Shares immediately prior to the date of grant, and are exercisable for a period of 10 years. One-half of the stock options vested immediately on grant, with the remaining stock options vesting ratably over a period of 2 years, subject to continued service. The inputs used to determine the fair value of this stock option grant were as follows: (1) Common Stock price of $4.25 per share; (2) exercise price of $4.25 per share; (3) expected life of 10 years; (4) risk-free interest rate of 4.23%; (5) expected annual volatility of 85.65%; and (6) an annual dividend rate of 0%.

 

On February 1, 2026, stock options to purchase 0.1 million shares of Common Shares were granted at an exercise price of $3.19 per share, which was equal to the closing price of the Common Shares immediately prior to the date of grant, and are exercisable for a period of 10 years. After one year, 20% stock options vest, with 5 thousand stock options vesting ratably each quarter over a period of 4 years, subject to continued service. The inputs used to determine the fair value of this stock option grant were as follows: (1) Common Stock price of $3.19 per share; (2) exercise price of $3.19 per share; (3) expected life of 10 years; (4) risk-free interest rate of 3.79%; (5) expected annual volatility of 74.24%; and (6) an annual dividend rate of 0%.

 

The total unrecognized compensation expense for the time vesting stock options as of March 31, 2026, was $5.8 million.

 

A summary of time-based stock option activity during the year ended March 31, 2026, and the year ended March 31, 2025, is presented below (in thousands, except for share price and contractual life):

Schedule of Time-Based Stock Option Activity 

		Number of Options				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (in Years)
Time-based stock options outstanding at March 31, 2025			-			$	-				-
Exchanged/Modified			1,600				3.75				10.00
Exercised			-				-				-
Expired/Cancelled			-				-				-
Time-based stock options outstanding at December 31, 2025			1,600			$	3.75				9.32
Granted			100				2.56				10.00
Exercised			-				-				-
Expired/Cancelled			-				-				-
Time-based stock options outstanding at March 31, 2026			1,700			$	3.68				9.12
Stock options exercisable at March 31, 2025			-			$	-				-
Stock options exercisable at March 31, 2026			1,167			$	3.75				9.08

 

In addition, on April 28, 2025, in exchange for 2 million unvested market-based RSUs, stock options to purchase 2 million shares of Common Shares were granted at an exercise price of $4.25 per share, which was equal to the closing price of the Common Shares immediately prior to the date of grant, and are exercisable for a period of 10 years. The stock options vest if either (a) the Common Shares has traded in the market on which the shares are listed for at least 30 trading days at an average price per share of $20.00 or more, whether consecutive or non-consecutive, or (b) there are distributions of cash, stock or other property by the Company to the holders of the Common Shares, at a value per share of $20.00 or more in the aggregate, subject to continued service. Once vested, the stock options will be exercisable for the remainder of the 10-year grant date period. The total unrecognized compensation expense based on the market-based stock options as of March 31, 2026, was $12.9 million.

 

 

A summary of market-based stock option activity during the three-months ended March 31, 2026 and 2025, is presented below (in thousands, except for share price and contractual life):

Schedule of Market-Based Stock Option Activity 

		Number of Options				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (in Years)
Market-based stock options outstanding at March 31, 2025			-			$	-				-
Exchanged/Modified			2,000				3.02				10.00
Exercised			-				-				-
Expired/Cancelled			-				-				-
Market-based stock options outstanding at December 31, 2025			2,000			$	3.02				9.32
Exchanged/Modified			-				-				-
Exercised			-				-				-
Expired/Cancelled			-				-				-
Market-based stock options outstanding at March 31, 2026			2,000			$	3.02				9.08
Stock options exercisable at March 31, 2025			-			$	-				-
Stock options exercisable at March 31, 2026			-			$	-				-

 

7. Earnings Per Share

 

The Company’s computation of earnings (loss) per share (“EPS”) includes basic and diluted EPS. Basic EPS is measured as the income (loss) attributable to common stockholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., preferred shares, warrants and stock options) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS

 

Loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the respective periods.

 

Basic and fully diluted earnings per share is calculated at follows for the three months ended March 31, 2026 and 2025 (in thousands, except for share price):

Schedule of Basic and Fully Diluted

 

		For the Three Months Ended
Basic		March 31, 2026								March 31, 2025
		Class A Common Shares				Class B Common Shares				Class A Common Shares				Class B Common Shares
Net loss attributable to MDB Capital Holdings, LLC		$	(3,466	)		$	(3,269	)		$	(3,277	)		$	(3,310	)
Weighted average shares outstanding – basic			5,241				5,000				4,951				5,000
Net loss per share – basic		$	(0.66	)		$	(0.65	)		$	(0.66	)		$	(0.66	)

 

Class A Common Shares and Class B common stock are equal for ownership purposes, but Class B shares have five times the voting rights of Class A shares and Class B shares can be exchanged on a one-to-one basis for purposes of sale.

 

 

8. Related Party Transactions

 

The principal members of the Company have a controlling interest in Point 1286, a company organized and based in the United States and is the sole owner of MDB Capital, S.A., a company organized and based in Nicaragua , that provides outsourced services to the Company and other non-related entities. During the three months ended March 31, 2026 and 2025, the Company paid $447 thousand and $455 thousand, respectively, which is inclusive of expenses and fees, for contracted labor, recorded against general and administrative expenses.

 

During the three months ended March 31, 2026 and 2025, PatentVest, a 100% entity owned the Company, engaged in transactions with ENDRA Life Sciences Inc – NDRA on Nasdaq, a company for which one of our executive officers, Anthony DiGiandomenico, our Head of New Venture Discovery, serves as a board member. For the three months ended March 31, 2026 and 2025, there were no financial transactions recognized between the MDB Capital entities and ENDRA.

 

During the three months ended March 31, 2026 and 2025, PatentVest, a 100% entity owned by the Company, engaged in transactions with eXoZymes and recognized revenues of $21 thousand and $45 thousand, respectively.

 

During the three months ended March 31, 2026, the Company recorded related party receivables totaling $27 thousand, for services performed by PatentVest on behalf of eXoZymes and other expenses owed to CG Management that was paid on behalf of eXoZymes. Additionally, the Company recorded accrued expenses of $0 thousand payable to officers and directors, representing reimbursable expenses incurred in the ordinary course of business. During the three months ended March 31, 2025, the Company recorded related party receivables totaling $87 thousand, this amount is for services performed by PatentVest on behalf of eXoZymes. Additionally, the Company recorded accrued expenses of $22 thousand payable to officers and directors, representing reimbursable expenses incurred in the ordinary course of business. All transactions were conducted on an arm’s-length basis and are expected to be settled in the normal course of operations.

 

9. Commitments and Contingencies

 

Legal Claims

 

The Company may be subject to legal claims and actions from time to time as part of its business activities. As of March 31, 2026 and 2025, the Company was not subject to any pending or threatened legal claims or actions.

 

External Risks Associated with the Company’s Business Activities

 

Net Capital Requirement (Public Ventures)

 

Public Ventures, LLC, d/b/a MDB Capital, is subject to the uniform net capital rule (SEC Rule 15c3-1) of the Securities and Exchange Commission (the “SEC”), which requires both the maintenance of minimum net capital and the maintenance of maximum ratio of aggregate indebtedness to net capital. At March 31, 2026 and 2025, Public Ventures had net capital of $10.01 million and $10.18 million, respectively, which was $9.76 million and $9.93 million in excess of the minimum $0.25 million, as required by the SEC Rule 15c3-1.

 

In 2024 the Company entered into a subordinated loan agreement with its broker-dealer subsidiary for $7.3 million. This amount, together with existing subordinated loans totaling $5.9 million and $2.0 million of accrued interest payable, is subordinated to other liabilities of the Company, and is considered members’ equity for calculating net capital, and is not included in aggregate indebtedness

 

At March 31, 2026, the broker-dealer subsidiary’s ratio of aggregate indebtedness of $5.2 million to net capital was 0.52 to 1, as compared to the maximum of a 15 to 1 allowable ratio of a broker dealer. Minimum net capital is based upon the greater of the statutory minimum net capital of $250,000 or 2% of customer debts, which was calculated as $0 at March 31, 2026

 

To comply with DTC membership requirements, the broker-dealer subsidiary has committed to maintain at least $5 million of net capital in excess of the $0.25 million minimum.

 

The requirement to comply with the Uniform Net Capital Rule 15c3-1 may limit Public Ventures’ ability to issue dividends to its parent company.

 

 

Indemnification Provisions

 

Public Ventures has agreed to indemnify its clearing broker for losses that the clearing broker may sustain from the accounts of customers. Should a customer not fulfill its obligation on a transaction, Public Ventures may be required to buy or sell securities at prevailing market prices in the future on behalf of its customer. The indemnification obligations of Public Ventures to its clearing broker have no maximum amount. All unsettled trades at March 31, 2026 and 2025 have subsequently settled with no resulting material liability to Public Ventures, LLC. For the three-months ended March 31, 2026 and 2025, Public Ventures had no material loss due to counterparty failure and had no obligations outstanding under the indemnification arrangement as of March 31, 2026 and 2025.

 

10. Employee Benefit Plans

 

MDB Management sponsored individual 401(k) defined contribution plans for the benefit of each company’s eligible employees. The plan allow eligible employees to contribute a portion of their annual compensation, not to exceed annual limits established by the Department of Treasury. MDB Management makes matching contributions for participating employees up to a certain percentage of the employee contributions; matching contributions were funded for the three months ended March 31, 2026 and 2025. Benefits under the MDB Management plan were available to all employees, and employees become fully vested in the employer contribution upon receipt. For the three months ended March 31, 2026 and 2025, a total of $103 thousand and $131 thousand, respectively, was contributed to the plan.

 

MDB Management also provides health and related benefit plans for eligible employees.

 

11. Exclusive License Agreement (MDB Minnesota One)

 

On July 1, 2024, M1 entered into a Patent and Know-How License Agreement (the “License Agreement”) with the Mayo for certain patent rights and associated technology pursuant to which M1 intends to develop a small molecule senescence platform. The License Agreement grants M1 rights to develop and commercialize Mayo’s patented technology and know-how for all fields of use on a worldwide basis. Under the terms of the License Agreement, M1 holds an exclusive license of patent rights and a non-exclusive license for the associated technology to make, have made, use, offer for sale, sell, and import licensed products and derivatives.

 

As part of the initial consideration for the License Agreement, M1 issued 1.98 million shares of common stock equity to Mayo; which at that time represented thirty-three percent of its shares. M1 also paid an initial license fee of $150 thousand as part of the initial consideration. M1 will pay earned royalties on future net sales (including modest minimum annual royalties, which commence in the second year of the term of the License Agreement and gradually increase and plateau over time, and will be credited against earned royalties due on net sales), and a percentage of any sublicensing income. The earned royalty commences after the first commercial sale of a licensed product. At December 31, 2025, there were no accrued royalties recorded.

 

Under the License Agreement, M1 is required to achieve certain development milestones within designated time periods. For select development milestones, as listed below, M1 will be required to make a payment to Mayo, also as noted below:

 

	●	A payment of $250 thousand for Phase II clinical trial initiation, for the first instance of a licensed product.
	●	A payment of $1.5 million for Phase III clinical trial initiation, for the first instance of a licensed product.
	●	A payment of $2 million for FDA New Drug Application (NDA) acceptance, for the first instance of a licensed product.
	●	A payment of $5 million for NDA approval, for each instance of a licensed product.

 

As of March 31, 2026, the development milestones noted above are not required to have been met and have not been met. There are other developmental milestones in the License Agreement relating to funding of the business and to initiating various clinical trial phases over time.

 

 

12. Leases

 

For operating leases, the Company records right-of-use assets and corresponding lease liabilities in the balance sheets for all leases with terms longer than twelve months. The Company has one operating lease, with no variable lease costs, and no finance leases as of March 31, 2026 and December 31, 2025.

 

On July 1, 2022, the Company executed a lease for new office space in the Dallas, Texas metropolitan area. The space was occupied on December 20, 2022. The lease has a term of 91 months and began when we took control of the space on December 20, 2022 and ends on July 20, 2030, without an option to extend. The initial base rent was $12.6 thousand per month, after 7 months of free rent. The lease provides for annual increases. The base rent for the lease in the final year is $13.9 thousand per month.

 

ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company’s uses the implicit rate in its lease calculations when it is readily determinable. Since the Company’s leases do not provide implicit rates, to determine the present value of lease payments, management uses the Company’s estimated incremental borrowing rate for a fully collateralized loan with a similar term of the lease that is based on the information available at the inception of the lease.

Schedule of Operating Lease Cost 

		March 31, 2026 (in thousands)				December 31, 2025 (in thousands)
Operating leases:
Right-of-use assets		$	522			$	547
Operating lease liabilities		$	581			$	609
Weighted average remaining lease term in years			4.25				4.50
Weighted average discount rate			7.80	%			7.80	%
Cash paid for amounts included in the measurement of lease liabilities		$	39			$	155
Right-of-use assets obtained in exchange for lease liabilities		$	-			$	-
Operating lease cost		$	12			$	52
Short-term lease costs			25				95
Total operating lease costs		$	37			$	147

 

Future payments due under operating leases as of March 31, 2026, are as follows (in thousands):

Schedule of Future payments Due Under Operating Lease 

Year		Amount
Remainder of 2026		$	119
2027			160
2028			163
2029			166
2030			93
Total		$	701
Less effects of discounting			(120	)
Total operating lease liabilities		$	581

 

 

13. Income Taxes

 

The Company is a limited liability company treated as a partnership for federal and state income tax purposes, with the exception of the state of Texas, in which income tax liabilities and/or benefits of the Company are passed through to its unitholders. Limited liability companies are subject to Texas margin tax. Additionally, the Company’s subsidiaries Public Ventures, MDB Management, PatentVest, and M1 are Subchapter C-corporations subject to federal and state income taxes.

 

Amounts recognized as income taxes are included in “income tax expense” on the statements of operations. The Company recognized no income tax expense for the three months ended March 31, 2026, and March 31, 2025, because of a full valuation allowance recorded against the Company’s net deferred tax assets.

 

The Company’s federal and state statutory tax rate net of the federal tax benefit was approximately 27% for the three months ended March 31, 2026, and March 31 2025.

 

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. At the end of 2025, the Company’s corporate earnings were in a cumulative loss position. Based on the cumulative losses and projections of future taxable income for the periods in which the deferred tax assets are deductible, the Company recorded a valuation allowance against all its net deferred tax assets as of March 31, 2026, and March 31, 2025. The Company intends to maintain a full valuation allowance on its net deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. The amount of deferred tax assets considered realizable could materially increase in the future, and the amount of valuation allowance recorded could materially decrease if estimates of future taxable income are increased.

 

14. Subsequent Events

 

On April 20, 2026, the Company granted 138 thousand restricted stock units (RSUs) to employees pursuant to its equity incentive plan.

 

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Overview

 

MDB Capital Holdings, LLC (the “Company” or “MDB”), a Delaware limited liability company, is a holding company that has three wholly-owned subsidiaries: MDB CG Management Company (“MDB Management”); Public Ventures, LLC, d/b/a MDB Capital (“Public Ventures”); and PatentVest, Inc. (“PatentVest”), has one majority-owned partner company MDB Minnesota One, Inc. (“MDB Minnesota One”), and one minority owned company eXoZymes Inc., formerly known as Invizyne Technologies, Inc., (“eXoZymes”), that was majority owned and is consolidated up to until November 14, 2025, when eXoZymes issued securities in its IPO and no longer majority owned by MDB.

 

MDB Management is principally an “administrative” entity whose purpose is to conduct, and wherever possible, to consolidate shared services/resources, for our US-based operations.

 

Public Ventures is a U.S. registered broker-dealer under the Exchange Act and is a member of FINRA and the Texas State Securities Board. Public Ventures is managed by Christopher A. Marlett, who is also a founder of MDB. Public Ventures operates on a fully disclosed basis with a nonrelated FINRA member firm, Interactive Brokers, LLC (“Interactive Brokers”), and is not required to maintain a clearing deposit. Interactive Brokers is the clearing firm and custodian of investments maintained by Public Ventures. Public Ventures also operates as a self-clearing broker dealer, and began carrying accounts for customers in January 2024.

 

PatentVest is a wholly-owned subsidiary that performs intellectual property validation services for Public Ventures’ due diligence functions on the intellectual property of partner and prospective partner companies and creates an intellectual property roadmap for such partner companies. PatentVest also provides intellectual property validation services for other clients.

 

M1 is a majority owned subsidiary and was formed with the purpose of developing pharmaceuticals, based on patents and licensed technology from the Mayo Foundation for Medical Education and Research (“Mayo”).

 

On November 14, 2024, eXoZymes completed its initial public offering (IPO), in which it sold common stock, reducing the Company’s ownership interest from approximately 60% to 47%. As a result, effective November 14, 2024, eXoZymes became a minority owned company and is now accounted for under the equity method of accounting.

 

Results of Operations

 

The Company has determined its reporting units in accordance with ASC (Accounting Standards Codification) 280, Segment Reporting. The Company currently operates in two reportable segments: (i) the broker dealer and intellectual property service segment and (ii) the technology development segment.

 

The Company’s unaudited condensed consolidated statements of operations as discussed herein are presented below.

 

Unaudited Condensed Consolidated Results of Operations for the Three Months Ended March 31, 2026 and 2025 (in thousands):

 

		2026				2025				$ Change
Operating income (loss):
Unrealized loss on investment securities, net (from our licensed broker dealer)		$	(3,047	)		$	(1,463	)		$	(1,584	)
Fee income (from our licensed broker dealer)			2,862				2,140				722
Other operating income			229				151				78
Total operating income (loss), net			44				828				(784	)
Operating costs:
General and administrative costs:
Compensation			3,333				4,336				(1,003	)
Operating expense, related party			447				455				(8	)
Professional fees			684				789				(105	)
Information technology			282				250				32
Clearing and other charges			428				289				139
General and administrative-other			351				619				(268	)
Total general and administrative costs			5,525				6,738				(1,213	)
Research and development costs, net of grants amounting to $0 and $708,700			-				-				-
Total operating costs			5,525				6,738				(1,213	)
Net operating loss			(5,481	)			(5,910	)			429
Other income:
Interest expense			-				-				-
Interest income			65				181				(116	)
Loss related to dilution events			(96	)			-				(96	)
Unrealized loss on investment securities, at fair value, held by the non-licensed broker dealer (1)			(116	)			-				(116	)
Loss before income taxes			(5,628	)			(5,729	)			101
Income taxes			-				-				-
Net loss before equity method investee			(5,628	)			(5,729	)			101
Equity in loss of equity method investee			(1,108	)			(873	)			(235	)
Net loss			(6,736	)			(6,602	)			(134	)
Net loss attributable to non-controlling interests			(1	)			(15	)			14
Net loss attributable to MDB Capital Holdings, LLC		$	(6,735	)		$	(6,587	)		$	(148	)

 

 

Operating Income. For the three months ended March 31, 2026, operating income was generated from the Company’s fees from investment banking transactions in the broker-dealer and patent related intellectual property services. The increase compared to the three months ended March 31, 2025, is attributable to investment banking activity, as the Company executed a larger transaction in the three months ended March 31, 2026. For the three months ended March 31, 2025, operating income was generated from the Company’s fees from investment banking transactions in the broker-dealer and patent related intellectual property services. The decrease in unrealized loss on investment securities, net (from our licensed broker dealer) was due to a decrease in the market value and fair value of securities held for investment.

 

General and Administrative Costs. During the three months ended March 31, 2026, and 2025, respectively, several factors contributed to changes in various expense categories:

 

	●	Compensation Expense: The decrease in compensation expense was the result of personnel departures during 2025, including the related stock compensation expense.
	●	Related Party Operating Expenses: This expense remained constant for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
	●	Professional Fees: There was a decrease in professional fees compared to the previous periods, primarily due to less consulting, legal, and taxes due in the overall management companies.
	●	Information Technology Costs: Information technology costs for the three months ended March 31, 2026, saw an increase from the three months ended March 31, 2025, driven by higher costs with the initiation of self-clearing operations and increased cloud computing costs.
	●	Clearing and Other Charges: The increase is in line with investment banking activity, as these costs generally correlate with investment banking transactions, which compared to the three months ended March 31, 2025, had smaller fee generating transactions.
	●	Other General and Administrative Costs: The decrease was primarily due to lower stock-based compensation expense. Two directors’ RSU grants that were being expensed in the first quarter of 2025 were forfeited during the second quarter of 2025 and the first quarter of 2026. In addition, the new director appointed in the current period received stock options with a significantly lower grant-date fair value than the prior RSU awards.

 

Other Income. For the three months ended March 31, 2026, the decrease in other income compared to the three months ended March 31, 2025, was primarily due to mark-to-market losses on securities held outside of the broker-dealer and losses related to dilution from additional equity issuances by eXoZymes. The subordinated loans for the broker-dealer are eliminated for consolidation purposes.

 

Income Taxes. For the three months ended March 31, 2026 and 2025, there was no income tax expense.

 

Equity Method Investment. For the three months ended March 31, 2026, compared to the three months ended March 31, 2025, the decrease in other income was due to the Company’s recognition of its proportionate share of eXoZymes’ net loss under the equity method of accounting.

 

Broker Dealer and Intellectual Property Service Segment (Public Ventures and PatentVest) Results of Operations for the Three Months Ended March 31, 2026 and 2025 (in thousands):

 

		2026				2025				$ Change
Operating income (loss):
Unrealized loss on investment securities, net (from our licensed broker dealer)		$	(3,047	)		$	(1,463	)		$	(1,584	)
Fee income (from our licensed broker dealer) (2)			2,862				2,140				722
Other operating income			229				151				78
Total operating income (loss), net			44				828				(784	)
Operating costs:
General and administrative costs:
Compensation			639				778				(139	)
Operating expense, related party			354				360				(6	)
Professional fees			278				272				6
Information technology			249				230				19
Clearing and other charges			428				289				139
General and administrative-other			191				206				(15	)
Total General and administrative costs			2,139				2,135				4
Research and development costs			-				-				-
Total operating costs			2,139				2,135				4
Net operating loss			(2,095	)			(1,307	)			(788	)
Other income:
Interest expense			(247	)			(247	)			-
Interest income			64				115				(51	)
Unrealized loss on investment securities, at fair value, held by the non-licensed broker dealer (1)			-				-				-
Loss before income taxes			(2,278	)			(1,439	)			(839	)
Income taxes			-				-				-
Net loss		$	(2,278	)		$	(1,439	)		$	(839	)

 

 

Operating Income. For the three months ended March 31, 2026, operating income was generated from the Company’s fees from investment banking transactions in the broker-dealer and patent related intellectual property services. The increase compared to the three months ended March 31, 2025, is attributable to investment banking activity, as the Company executed a larger transaction in the three months ended March 31, 2026. For the three months ended March 31, 2025, operating income was generated from the Company’s fees from investment banking transactions in the broker-dealer and patent related intellectual property services. The decrease in unrealized loss on investment securities, net (from our licensed broker dealer) was due to mark to market activity in the held securities.

 

General and Administrative Costs. During the three months ended March 31, 2026, and 2025, respectively, several factors contributed to changes in various expense categories:

 

	●	Compensation Expense: The decrease in compensation expense was the result of personnel departures during first three-months ended March 31, 2026.
	●	Related Party Operating Expenses: This expense remained constant for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
	●	Professional Fees: This expense remained constant for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
	●	Information Technology Costs: This expense remained constant for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
	●	Clearing and Other Charges: The increase is in line with investment banking activity, as these costs generally correlate with investment banking transactions, which compared to the three months ended March 31, 2025, had smaller fee generating transactions.
	●	Other General and Administrative Costs: This expense remained constant for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

 

Other Income. The decrease in other income for the three-month period ending March 31, 2026, can be attributed to interest income, stemming from a decrease in the cash balance from the three-month period ending March 31, 2025.

 

Technology Segment (MDB Minnesota One). Results of Operations for the Three Months Ended March 31, 2026 and 2025 (in thousands):

 

		2026				2025				$ Change
Total operating income		$	-			$	-			$	-
Operating costs:
General and administrative costs:
Compensation			-				-				-
Professional fees			3				45				(42	)
Information technology			-				-				-
General and administrative-other			-				-				-
Total general and administrative costs			3				45				(42	)
Research and development costs, net of grants amounting to $708,700 and $793,540			-				-				-
Total operating costs			3				45				(42	)
Net operating loss			(3	)			(45	)			42
Other income:
Interest income			-				-				-
Loss before income taxes			(3	)			(45	)			42
Income taxes			-				-				-
Net loss			(3	)			(45	)			42
Net loss attributable to non-controlling interests			(1	)			(15	)			14
Net loss attributable to controlling interests		$	(2	)		$	(30	)		$	28

 

 

Operating Income. There was no activity during the three months ended March 31, 2026 and 2025.

 

General and Administrative Costs. During the three months ended March 31, 2026 and 2025, there was little activity in this segment and the decrease in professional fees was attributable to less activity and legal fees with M1.

 

Condensed Consolidated Balance Sheets March 31, 2026 and December 31, 2025 (in thousands):

 

		March 31, 2026 (unaudited)				December 31, 2025				$ Change
ASSETS
Cash and cash equivalents		$	12,194			$	13,217			$	(1,023	)
Cash segregated in compliance with regulations			340				2,331				(1,991	)
Accounts receivables			185				124				61
Receivables to related party			27				13				14
Clearing deposits			2,000				2,000				-
Prepaid expenses and other current assets			396				433				(37	)
Investment securities, at fair value, held by the licensed broker dealer			5,141				7,166				(2,025	)
Investment securities, at fair value, held by the non-licensed broker dealer			119				235				(116	)
Equity method investment			36,339				37,543				(1,204	)
Deferred costs related to deferred revenue			19				14				5
Property and equipment, net			181				117				64
Operating lease right-of-use assets, net			522				547				(25	)
Total assets		$	57,463			$	63,740			$	(6,277	)
LIABILITIES AND EQUITY
Accounts payable		$	348			$	267			$	81
Accrued expenses			58				95				(37	)
Payables to related party			-				1				(1	)
Payables to customers			252				2,189				(1,937	)
Operating lease liabilities			581				609				(28	)
Total liabilities			1,239				3,161				(1,922	)
Equity:
Paid-in-capital			82,874				80,493				2,381
Accumulated deficit			(26,538	)			(19,803	)			(6,735	)
Total MDB Capital Holdings, LLC Members’ equity			56,336				60,690				(4,354	)
Non-controlling interest			(112	)			(111	)			(1	)
Total equity			56,224				60,579				(4,355	)
Total liabilities and equity		$	57,463			$	63,740			$	(6,277	)

 

 

Financial Condition: Overall, the reduction in assets was primarily attributed to their utilization for operational activities during the period. The decrease in cash segregated in compliance with regulations stemmed from customer deposits held at December 31, 2025, for an investment banking deal that was closing in early January. The decrease in investment securities at fair value was due to a decrease in the value of common stock and warrants over the period offset by the receipt of warrants for investment banking activities. The decrease in prepaid expenses stemmed from the amortization of prepaid insurance over the period. The increase in accounts receivable is due to an increase in activity from legal and strategy fees earned. The increase in related party receivable is due to increased activity by PatentVest for eXoZymes. The decrease in equity method investment is directly tied to the Company’s portion of the net loss. Finally, the reduction in property and equipment and right-of-use assets was due to its regular utilization.

 

The increase in accounts payable and accrued expenses stemmed from normal course of business activity. The decrease in payables to customers stemmed from customer deposits. Finally, the reduction in lease liability was due to its routine utilization.

 

Stockholders’ equity decreased from December 31, 2025, to March 31, 2026, primarily due to the net loss for the three months ended March 31, 2026, partially offset by the recognition of stock-based compensation expense during the period.

 

The increase in non-controlling interest resulted from the net loss experienced by M1.

 

Liquidity and Capital Resources – March 31, 2026 and 2025

 

The Company’s unaudited condensed consolidated statements of cash flows as discussed herein are presented below (in thousands):

 

		Three Months Ended March 31,
		2026				2025
Net cash used in operating activities		$	(2,945	)		$	(1,258	)
Net cash used in investing activities			(69	)			-
Net cash used in financing activities			-				-
Net increase (decrease) in cash and cash equivalents		$	(3,014	)		$	(1,258	)

 

At March 31, 2026, the Company had $14.2 million of working capital. This is a decrease of $5.9 million, from the working capital of $20.1 that the Company had at March 31, 2025. The decrease in working capital is primarily attributed to the use of cash to fund operations.

 

Operating Activities. For the three months ended March 31, 2026, in addition to cash used in normal operating activities, there was an approximately $2.0 million decrease in cash resulting from the release of customer deposits that had been held in segregated accounts in compliance with regulatory requirements at December 31, 2025. These deposits related to an investment banking transaction that closed in early January 2026.

 

For the three months ending on March 31, 2025, operating activities use of cash represented a combination of increased activity in the broker dealer, increased professional and consulting fees related to year end audits and issuance of the tax preparation fees related to the publicly traded partnership.

 

Investing Activities. There was an investment into the deferred IT costs for development of the self-clearing system, for the three months ended March, 31, 2026. There was no activity for the three months ended March, 31, 2025.

 

Financing Activities. There was no activity for the three months ended March, 31, 2026 and 2025.

 

 

Recently Issued Accounting Pronouncements

 

See Note 2 in the unaudited condensed consolidated financial statements for the discussion on recently accounting pronouncements.

 

Critical Accounting Estimates

 

The preparation of financial statements in conformity with accounting principles general accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We have identified certain accounting policies as being critical because they require us to make difficult, subjective, or complex judgments about matters that are uncertain. We believe that the judgment, estimates, and assumptions used in the preparation of our audited consolidated financial statements are appropriate given the factual circumstances at the time. However, actual results could differ, and the use of other assumptions or estimates could result in material differences in our results of operations or financial condition. Our critical accounting estimates are:

 

Revenue recognition – Investment Banking and Warrants Valuation

 

The Company receives income from underwriting fees. As an underwriter, the Company assists clients to raise capital via the placement of various types of investment securities of private and publicly traded company issuers. Underwriting fees are primarily based on the issuance price and quantity of the underlying instruments and are recognized as revenue typically upon execution of the client’s transaction. The Company generally does not incur costs to obtain contracts with customers that are eligible for deferral or receive fees prior to recognizing revenue related to investment banking transactions. If the Company did have any contract assets or liabilities related to these revenues it would be recorded on the consolidated balance sheets.

 

Revenue recognition may involve the bundling of investment banking services with other financial instruments. In such cases, we estimate the fair value of the services provided and allocate the revenue accordingly. This estimation process involves significant judgment and sensitivity to market conditions. Additionally, our investment banking activities may include the compensation for our services in warrants granted to us. The valuation of these warrants requires significant estimates, including the use of option pricing models like the Black-Scholes model. The key assumptions in this valuation process include the stock price on the date of valuation, the exercise price of the warrant, the term to expiry, risk-free interest rate, and the expected volatility of the underlying stock.

 

Fair Value of Financial Instruments

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

 

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

 

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

 

Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 

 

The fair value of U.S. Treasury Bills and public equity securities are based on quoted market prices and are classified as level 1 of the fair value hierarchy. The fair value of public equity securities that are not actively traded is based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data and are classified as level 2 of the fair value hierarchy. The fair value of warrants is based on a Black-Scholes model, which considers the stock price at the date of the valuation, the warrant strike price, the term to expiry, the risk-free rate of return, and the expected volatility of the underlying stock. The level in the fair value hierarchy for warrants depends primarily on whether the stock price is determinable from active trades, and whether the expected volatility of the underlying stock is observable and are either classified as level 2 or level 3. The fair value of non-public equity securities and simple agreements for future equity is based on the initial investment, less impairment, and they are classified as level 3 in the fair value hierarchy. For the significant unobservable inputs and assumptions used in level 3 fair value measurements, see Fair Value of Financial Instruments section of Note 2: Summary of Significant Accounting Policies.

 

Stock Based Compensation

 

The Company and its subsidiaries may periodically issue common shares, stock options and restricted stock units to officers, directors, employees, and consultants for services rendered. Options vest and expire according to terms established at the issuance date of each grant. Stock grants, which are generally time vested, are measured at the grant date fair value and charged to operations ratably over the vesting period.

 

The Company accounts for stock-based payments to officers, directors, employees, and consultants by measuring the cost of services received in exchange for equity awards utilizing the grant date fair value of the awards, with the cost recognized as compensation expense on the straight-line basis in the Company’s financial statements over the vesting period of the awards.

 

The fair value of share options granted as stock-based compensation is determined utilizing the Black-Scholes option-pricing model, and is affected by several variables, the most significant of which are the expected life of the stock option, the exercise price of the share option as compared to the fair market value of the common shares on the grant date, and the estimated volatility of the common shares. Unless sufficient historical exercise data is available, the expected life of the stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”). The estimated volatility is based on the implied volatility by using comparable companies of the Company’s common shares, calculated utilizing a lookback period approximately equal to the contractual life of the stock option being granted. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair market value of the common shares is determined by reference to the quoted market price of the Company’s common shares on the grant date. The expected dividend yield is based on the Company’s expectation of dividend payouts and is assumed to be zero. The fair value of performance based restricted stock units was determined by using an independent valuation expert.

 

Summary of Business Activities and Plans

 

On September 20, 2023, the Company completed an initial public offering (IPO), which consisted of the sale of 1,666,666 shares of Class A common shares at $12.00 per share, for gross proceeds of $19,999,992 that were used for the development of eXoZymes, identifying and developing new partner companies, and general corporate and working capital requirements.

 

On June 15, 2022, the Company completed the closing of a private placement, consisting of total gross proceeds of $25,289,660 from the sale of 2,528,966 shares of Class A common shares, which was used for the development of eXoZymes, identifying and developing new partner companies, and general corporate and working capital requirements.

 

External Risks Associated with the Company’s Business Activities

 

Inflation Risk. The Company does not believe that inflation has had a material effect on its operations to date, other than its impact on the general economy.

 

 

Supply Chain Issues. The Company does not currently expect that supply chain issues will have a significant impact on its business activities.

 

Potential Recession. There are various indications that the United States economy may be entering a recessionary period. The effect of the conflict in the Persian Gulf and world shortages in oil and fertilizer, tariffs imposed by United States and other countries and changing global trade policies should not have a direct effect on the Company but are likely to influence the overall economy. Although it is unclear at this time that an economic recession would likely impact the general business environment and the capital markets, if there is a general global recession that includes the economy of the United States, such an event could affect the Company.

 

The Company is continuing to monitor these matters and will adjust its current business and financing plans as more information and guidance become available.

 

Principal Commitments

 

Net Capital Requirement (Public Ventures)

 

Public Ventures, LLC, d/b/a MDB Capital, is subject to the uniform net capital rule (SEC Rule 15c3-1) of the Securities and Exchange Commission (the “SEC”), which requires both the maintenance of minimum net capital and the maintenance of maximum ratio of aggregate indebtedness to net capital. At March 31, 2026 and 2025, Public Ventures had net capital of $10.01 million and $10.18 million, respectively, which was $9.76 and $9.93 million in excess of the minimum $0.25 million, as required by the Securities and Exchange Commission Rule 15c3-1.

 

The Company has subordinated loans with its Parent company totaling $13.2 million and $2.0 million of accrued interest payable, which is subordinated to other liabilities of the Company, and is considered members’ equity for calculating net capital, and is not included in aggregate indebtedness.

 

Minimum net capital is based upon the greater of the statutory minimum net capital of $0.25 million or 2% of aggregate customer debits, which was $0 at March 31, 2026.

 

To comply with to DTCC membership requirements, the Company has committed to maintain at least $5.0 million of net capital in excess of the $0.25 million minimum.

 

Indemnification Provisions

 

Public Ventures has agreed to indemnify its clearing broker for losses that the clearing broker may sustain from the accounts of customers. Should a customer not fulfill its obligation on a transaction, Public Ventures may be required to buy or sell securities at prevailing market prices in the future on behalf of its customer. The indemnification obligations of Public Ventures to its clearing brokers have no maximum amount. All unsettled trades at March 31, 2026 and 2025, have subsequently settled with no resulting material liability to Public Ventures. For the years ended March 31, 2026 and 2025, Public Ventures had no material loss due to counterparty failure and had no obligations outstanding under the indemnification arrangement as of March 31, 2026 and 2025.

 

MDB Minnesota One

 

On July 1, 2024, MDB Minnesota One (“M1”) entered into a Patent and Know-How License Agreement (the “License Agreement”) with the Mayo Foundation for Medical Education and Research (“Mayo”) for certain patent rights and associated technology pursuant to which M1 intends to develop a small molecule senescence platform. The License Agreement grants M1 rights to develop and commercialize Mayo’s patented technology and know-how for all fields of use on a worldwide basis. Under the terms of the License Agreement, M1 holds an exclusive license of patent rights and a nonexclusive license for the associated technology to make, have made, use, offer for sale, sell, and import licensed products and derivatives.

 

As part of initial consideration for the License Agreement, M1 issued 1.98 million shares of common stock equity to Mayo; which at that time represented thirty-three percent of its shares. M1 also paid an initial license fee of $0.15 million as part of the initial consideration. M1 will pay earned royalties on future net sales (including modest minimum annual royalties, which commence in the second year of the term of the License Agreement and gradually increase and plateau over time, and which will be credited against earned royalties due on net sales), and a percentage of any sublicensing income. The earned royalty commences after the first commercial sale of a licensed product. At March 31, 2026, there were no accrued royalties recorded.

 

 

Under the License Agreement, M1 is required to achieve certain development milestones within designated time periods. For select development milestones, as listed below, M1 will be required to make a payment to Mayo, also as noted below:

● A payment of $0.25 million for Phase II clinical trial initiation, for the first instance of a licensed product.

● A payment of $1.5 million for Phase III clinical trial initiation, for the first instance of a licensed product.

● A payment of $2 million for FDA New Drug Application (NDA) acceptance, for the first instance of a licensed product.

● A payment of $5 million for NDA approval, for each instance of a licensed product.

 

As of December 31, 2025, the development milestones noted above are not required to have been met and have not been met. There are other developmental milestones in the License Agreement relating to funding the business and to initiating various clinical trial phases over time.

 

M1 is currently in the pre-clinical development stage of the M1 Platform and is undertaking important feasibility studies, iterative testing, and collection of drug safety and toxicity data.

 

Trends, Events and Uncertainties

 

Other than as discussed above, we are not currently aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition in the near term, although it is possible that new trends or events may develop in the future that could have a material effect on our financial condition.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a smaller reporting company, we are not required to provide this information.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

The Company, with the participation of the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based on that evaluation, as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15I and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in the internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.

 

Inherent Limitations on Effectiveness of Controls and Procedures

 

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, believes that disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, management does not expect that the disclosure controls and procedures or the internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened litigation that would have a material adverse effect on our business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably. We believe that from time to time we will have commercial disputes arising in the ordinary course of our business.

 

Item 1A. Risk Factors

 

In addition to the information set forth in this Form 10-Q, you should also carefully review and consider the risk factors contained in our other registration statements, reports and periodic filings with the SEC that could materially and adversely affect our business, financial condition, and results of operations. The risk factors we have identified and discussed, however, do not identify all risks that we face because our business operations could also be affected by additional factors that are not known to us or that we currently consider to be immaterial to our operations.

 

Changes to United States tariff and import/export regulations and the conflict in the Persian Gulf may have an adverse effect on our business, financial condition and results of operations.

 

The United States has enacted and continues to enact significant new tariffs, and President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy. There has been and are ongoing discussions and commentaries regarding potential significant changes to U.S. trade policies, treaties and tariffs. There exists significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. The U.S. and Israel have undertaken military action in the Persian Gulf, a result of which has been a reduction in oil, fertilizer and other resources exports from the region. These actions may have a material adverse effect on global and domestic economic conditions, whether or not there will be a recession, and the stability of global and domestic financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. As a primary part of our business is focused on financial services, that segment of our business and the value of our financial assets may be adversely impacted. These actions and policies may also adversely affect the ability of our subsidiaries to carry on their respective businesses. Although it is not yet possible to assess their impact, any of these factors could depress economic activity and restrict access to suppliers or customers and have a material adverse effect on our overall business, financial condition and results of operations.

 

Government Action on tariffs and research grants and other funding may impede our ability to conduct our research and to raise capital by and for our partner companies and other clients.

 

Federal government actions to impose tariffs, to change trade policies, to change immigration policies, to reduce the size of the Federal government, and to limit research grants and other forms of federal government funding, including direct government grants and the funding of universities and research enterprises, are causing disruption in the economy and to some extent may adversely impact our consolidated business activities based on their direct and indirect effect on our partner companies and our other clients. Many of these government actions have been only recently implemented, others are being threatened and many will be ongoing. Therefore the full impact has yet to be realized by the Company and its partner companies and clients. Nonetheless, (i) tariffs are likely to increase the cost of doing business in the general economy and to make it more difficult to obtain items where imported equipment is required by our own activities and the activities of our partner companies and clients, (ii) ending or reducing research funding is likely to make it more difficult to find collaborative research partners to work with us and our partner companies as government funding is an indirect support for research and product development activities, and (iii) the curtailment of direct funding will have an immediate adverse impact on our partner companies and clients and their ability to continue their development work. We also believe that as these policies are implemented, it will make raising capital from private investors far more difficult, as they will want to know if the Company will be able to use the proceeds effectively and will be of sufficient amount.

 

 

Impact of Ukrainian, Israeli, and Iran Conflicts

 

Currently, we believe that the ongoing conflicts involving Ukraine, Israel, and Iran do not have any direct impact on our operations, financial condition, or financial reporting. We believe these conflicts will have only a general impact on our operations in the same manner as they are having on all businesses with operations in North America. This general impact may result from international sanctions and embargo regulations, possible shortages of goods and components that may be supplied from Ukraine, Russia, the Persian Gulf countries or Israel, disruptions to global energy supplies and oil prices due to tensions in the Strait of Hormuz and the broader Middle East region, supply chain challenges, and the international and U.S. domestic inflationary effects of the conflicts and related government spending. We do not believe we will be specifically targeted for cyberattacks in connection with these conflicts. However, as a financial institution, we are aware that we may be a general target for cyber-attacks, including potentially from state-sponsored actors. We have no operations in the countries directly involved in these conflicts and are not specifically impacted by any of the related sanctions or embargoes, as we principally operate in the United States. Other than general securities market trends, we do not have reason to believe that investors will evaluate the company as having special risks or exposures related to these conflicts.

 

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

 

None.

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

Not applicable.

 

Item 6. Exhibits

 

The documents listed in the Exhibit Index of this Form 10-Q are incorporated by reference or are filed with this Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	MDB CAPITAL HOLDINGS, LLC
	(the “Registrant”)
Dated: May 14, 2026	By:	/s/ Christopher A. Marlett
		Christopher A. Marlett
		Chief Executive Officer
		(Principal Executive Officer)
Dated: May 14, 2026	By:	/s/ Jeremy W. James
		Jeremy W. James
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

 

 

EXHIBIT INDEX

 

Exhibit
Number		Description of Exhibit
31.1 *		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 *		Certification of Principal Financial and Accounting Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial and Accounting, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Schema
101.CAL*		Inline XBRL Taxonomy Calculation Linkbase
101.DEF*		Inline XBRL Taxonomy Definition Linkbase
101.LAB*		Inline XBRL Taxonomy Label Linkbase
101.PRE*		Inline XBRL Taxonomy Presentation Linkbase
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

*	Filed herewith.
**	Furnished herewith.