MDB Capital Holdings LLC

Evaluation of Disclosure Controls and Procedures

The Company, with the participation of the Chief Executive Officer and Chief Accounting Officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K, 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, and as a result of the material weaknesses in internal control over financial reporting described below, the Chief Executive Officer and Chief Accounting Officer concluded that, as of December 31, 2023, the disclosure controls and procedures were not effective at the reasonable assurance level. In light of this fact, the Company has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in the internal control over financial reporting, the consolidated financial statements for the periods covered by and included in this Annual Report on Form 10-K fairly state, in all material respects, the financial position, results of operations and cash flows for the periods presented in conformity with GAAP.

Management’s Annual Report on Internal Control over Financial Reporting

Management holds the responsibility for preparing accurate financial statements and ensuring they faithfully represent our financial status and operations in line with generally accepted accounting principles (GAAP).

We are also tasked with establishing and upholding sufficient internal controls over financial reporting, as stipulated in the Exchange Act. These controls aim to offer reasonable assurance about the fairness of our financial reporting and the accuracy of financial information. Despite the robust nature of our internal control systems, they are subject to inherent limitations, including human error and the potential bypassing of controls, thus providing only reasonable—not absolute—assurance.

Our internal controls over financial reporting encompass procedures for maintaining detailed records that reflect our transactions accurately, ensuring transactions are recorded as needed for financial statement preparation in compliance with GAAP, and safeguarding company assets through authorized management and director actions.

After a thorough evaluation led by our Chief Accounting Officer, based on the COSO 2013 framework, we identified material weaknesses in our internal controls in our prior year, as of December 31, 2022. These included insufficient accounting personnel and supervisory structures, inadequate segregation of duties, and insufficient verification processes for spreadsheets used in financial reporting.

To address these issues, we enhanced our financial organization by assessing our accounting staff, including hiring multiple personnel, and bolstering our systems and controls. However, our capacity for immediate remediation is constrained by our size and financial resources.

As of December 31, 2023, the previously identified material weaknesses have been addressed from the previous fiscal year, and management believes that these weaknesses have been resolved from our prior year and did not impact our annual financial reporting except for a deficiency due to corrected misstatements by the auditors in our financial statements.

We are committed to continuously improving our internal control over financial reporting and will implement further enhancements as necessary and financially viable.

This Annual Report on Form 10-K does not include an attestation from our public accounting firm regarding internal control over financial reporting, following SEC rules that allow us to present only management’s report

Changes in Internal Control over Financial Reporting

The material weaknesses in our internal control framework, identified during the fiscal year ended December 31, 2022 have been fully addressed and corrected, except for a deficiency due to corrected misstatements by the auditors in our financial statements. These weaknesses spanned across various aspects of our internal controls, including entity-level controls as outlined by the Committee of Sponsoring Organizations (COSO) 2013 Framework, general information technology controls, and the design and implementation of formal accounting policies, procedures, and controls.

During the fiscal year ended December 31, 2023 we enhanced our internal control environment, we have successfully implemented comprehensive measures to address the root causes of these weaknesses. These measures included hiring additional personnel to ensure proper segregation of duties, enhancing risk identification and control implementation, redesigning control activities for effectiveness, improving our information and communication mechanisms, and conducting thorough evaluations of our internal control components.

Additionally, we have made significant improvements to our general information technology controls, focusing on logical access and program change management, to resolve conflicts in segregation of duties across our business processes. Our accounting policies, procedures, and controls have also been thoroughly revised and implemented to ensure the timeliness, completeness, and accuracy of our financial accounting, reporting, and disclosures.

The Company remains steadfast in our commitment to maintaining robust internal controls and financial reporting processes. We believe that these corrective actions not only address the previously identified issues but also strengthen our overall financial governance, positioning us for sustainable growth and success.

Inherent Limitations on Effectiveness of Controls and Procedures

The Company’s management, including the Chief Executive Officer and Chief Accounting 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.