MDB Capital Holdings, LLC
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
MDBH$1.55+3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-29.
0001493152-24-012008
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001641172-25-001819
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 91 current paragraphs.
45 unchanged; 23 reworded; 21 added; 23 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Minnesota One is a majority owned subsidiary and was formed with the purpose of developing pharmaceuticals, based on patents and licensed technology from Mayo.
Current report
On November 14, 2024, eXoZymes completed its initial public offering (IPO), in which it sold common stock, reducing MDB Capital Holdings’ 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. As noted below, we recognized a gain of $39,307,217 on the date of deconsolidation.
Current report
The increase in research and development costs for the period was partially offset by increased grant funding. For the year ended December 31, 2024, there was an increase in research and development costs due to a decrease of grant funding. It is important to note that the upswing in grant funding was not linked to any specific event and is expected to fluctuate throughout the year.
Current report
*Other Income.*For the year ended December 31, 2024, the increase is primarily from the unrealized gain on deconsolidation ofa subsidiary, eXoZymes, completed in the fourth quarter of 2024.
Current report
*Income Taxes.*For the year ended December 31, 2024, the decrease in income taxes was a direct result of the reduction in fee income as compared to the year ended, December 31, 2023.
Current report
Operating Income. For the year ended December 31, 2024, operating income was generated from the Company’s fee income and unrealized gains related to operating income that was generated from fees earned from the broker-dealer’s investment banking activities and patent related intellectual property services. The decrease compared to the prior year is attributable to reduced investment banking activity, as the Company executed significantly larger transactions in the previous year. For the year ended December 31, 2023, operating income was generated from the Company’s fee income and unrealized gains related to warrants received as fees for investment banking activity in the second quarter of 2023 in the broker-dealer, and fees earned at the intellectual property service segment.
Current report
*Other Income.*For the year ended December 31, 2024, the increase in interest expense compared to the prior year is primarily due to inter-company subordinated loans for the broker-dealer, which are eliminated for consolidation purposes. Additionally, interest income increased as a result of the broker-dealer maintaining higher balances in high-yield money market accounts.
Current report
*Income Taxes.*For the year ended December 31, 2024, the decrease in income taxes was a direct result of the reduction in taxable grant income as compared to the year ended, December 31, 2023.
Current report
Technology Segment (MDB Minnesota One and eXoZymes, formerly known as Invizyne) Results of Operations for the Years Ended December 31, 2024 and 2023. The results for eXoZymes are presented through November 14, 2024, which represents the date of deconsolidation from our financial statements.
Current report
Research and Development Costs. The increase in research and development costs for the current period was partially offset by increased grant funding. For the year ended December 31, 2024, there was an increase in research and development costs due to a decrease of grant funding. It is important to note that the upswing in grant funding was not linked to any specific event and is expected to fluctuate throughout the year.
Current report
Financial Condition: Overall, the majority of each of the decreases in assets are all directly tied to the deconsolidation of eXoZymes, formerly known as Invizyne, on November 14, 2024, when eXoZymes completed its IPO of common stock diluting the MDB ownership to approximately 47%. The increase in cash and cash equivalents was due to the transfer of U.S Treasury bills to cash and was offset by cash utilization for operational activities during the period. The rise in cash segregated in compliance with regulations stemmed from customer deposits. The decline in investment securities at amortized cost occurred because U.S. Treasury bills were sold and moved to high-yield money-market accounts, with the underlining investment in U.S Treasury bills, which allows the Company to provide liquidity for operating expenses. The decrease in investment securities at fair value was due to a decrease in the value of common stock and warrants over the period, held by the broker dealer. Clearing deposits increased due to the launch of the self-clearing operations. Prepaid expenses remained stable compared to the previous period. The decrease in grants receivable, property plant and equipment, and operating lease of right to use asset are all directly tied to the deconsolidation of eXoZymes. Finally, the deferred offering costs were associated with expenses related to eXoZymes IPO that was completed on November 14, 2024.
Current report
The decrease in accounts payable, accrued expenses, and operating lease liabilities are all directly tied to the deconsolidation of eXoZymes, formerly known as Invizyne, on November 14, 2024. Additionally, the rise in payables to customers stemmed from increased activity in the self-clearing operations of the broker-dealer. Furthermore, the payables non-customers is movement by those non-customers from cash to securities as part of self-clearing operations.
Current report
Operating Activities*.*For the year ended December 31, 2024, operating activities used cash of $9,037,746. The main driver for the increase in net income compared to the prior year was primarily driven by the gain of the deconsolidation of eXoZymes (formerly Invizyne), which was offset by stock-based compensation expense. Additional cash outflows resulted from the accretion of U.S. Treasury Bills held at amortized cost and the acquisition of investment securities. The deconsolidation also led to a decrease in accounts payable and grants receivable related to eXoZymes. These impacts were offset by increases in clearing deposits and customer payables, attributable to the launch of self-clearing operations. There was also a decrease in accrued expenses due to bonus payments made in Q1 2024, along with a reduction in payables to non-customers
Current report
Investing Activities*.* For the year ended December 31, 2024, the increase in cash flows from investing activities was primarily attributable to the proceeds from the sale and maturity of U.S. Treasury Bills and purchases of investment securities. These inflows were partially offset by the reinvestment of proceeds into new U.S. Treasury Bills, transfers of cash to support operating activities, and investments in money market funds.
Current report
On November 14, 2024, eXoZymes, formerly known as Invizyne, previously a corporate subsidiary of the Company, completed its initial public offering (“IPO”), reducing MDB’s ownership interest to 47%. As a result, the Company no longer consolidates eXoZymes Inc for financial reporting purposes and now accounts for its investment using the equity method under ASC 323. For federal income tax purposes, MDB is treated as a partnership and is not subject to entity-level taxation. As a result, no deferred tax assets (“DTAs”) or deferred tax liabilities (“DTLs”) are recognized at the partnership level for differences between the book and tax basis of the equity method investment. Any tax consequences related to book-tax basis differences will be recognized at the partner level upon disposition of the investment or other taxable events.
Current report
During the year ended December 31, 2024, the Company entered into a subordinated loan agreement with its Parent company for $7,300,000. This amount, together with existing subordinated loans totaling $5,900,000 and $775,757 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.
Current report
To comply with to DTC membership requirements, the Company has committed to maintain at least $5,000,000 of net capital in excess of the $250,000 minimum.
Current report
MDB Minnesota One
Current report
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 non-exclusive license for the associated technology to make, have made, use, offer for sale, sell, and import licensed products and derivatives.
Current report
As part of initial consideration for the License Agreement, M1 issued 1,980,000 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 $150,000 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 December 31, 2024 there were no accrued royalties recorded.
Current report
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:
Removed paragraphs (23)
Previous report
Prior to January 14, 2022, Public Ventures owned majority interests in PatentVest and Invizyne. On January 14, 2022, Public Ventures distributed 100% of its equity interests in PatentVest and Invizyne to its members in proportion to their respective interests. On January 15, 2022, Public Ventures filed with the Internal Revenue Service to be treated as a corporation for federal income tax purposes. On January 16, 2022, the members of Public Ventures contributed their entire interests in the equity of Public Ventures, Invizyne and PatentVest to MDB, as result of which MDB became the new parent holding company. There was no effective change in the beneficial ownership of Public Ventures as a result of this transaction. On the same day as part of the reorganization, MDB established a management company subsidiary, MDB Management. These reorganization steps are collectively referred to as the “reorganization. In connection with the reorganization, 5,000,000 Class B Common Shares were issued in exchange for the members’ equity.
Previous report
The reorganization was completed between entities that were under common control, and the assets contributed and liabilities assumed are recorded based on their historical carrying values. These financial statements retroactively reflect the financial statements of the Company and Public Ventures on a consolidated basis for the periods presented.
Previous report
On June 8, 2022, MDB completed the first closing of a private placement, consisting of the sale of 2,517,966 shares of Class A Common Shares at $10.00 per share, for gross proceeds of $25,179,660. On June 15, 2022, the Company completed the second closing of the private placement, consisting of the sale of an additional 11,000 shares of Class A Common Shares, for gross proceeds of $110,000. Accordingly, the Company received total gross proceeds of $25,289,660 from the sale of 2,528,966 shares of Class A Common Shares, or $24,746,142 net of $343,518 of offering expenses, which will be used for development of the current partner companies, identifying and developing new partner companies, and general corporate and working capital requirements. In conjunction with the private placement, the Company issued warrants to the placement agent to purchase 18,477 shares of Class A Common Shares, exercisable upon issuance for a period of 10 years at $13.00 per share, for a cash consideration of $0.001/share. The placement agent’s warrants had a fair value of $106,940, as calculated pursuant to the Black-Scholes option-pricing model and were accounted for as issuance costs that were recorded against paid in capital and paid in capital for the warrants issued.
Previous report
General and Administrative Costs.
Previous report
The increase in research and development costs for the current period was partially offset by increased grant funding. For the year ended December 31, 2023, total research and development costs were $3,482,386, with $2,954,208 reimbursed by grants, resulting in net research and development costs of $528,178. For the year ended December 31, 2022, total research and development costs were $2,312,857, with $1,964,772 reimbursed by grants, resulting in net research and development costs of $348,085. The increase in research and development costs was driven primarily by an increase in compensation due to the hiring of additional research and development staff, an increase in lab supplies expense, and an increase in grant sub-award expenses issued to a third-party research partner.
Previous report
*Other Income.*The increase in other income was interest from U.S. Treasury Bills due to moving all excess funds from cash into U.S. Treasury Bills.
Previous report
*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. In addition, certain of the Company’s subsidiaries are Subchapter C-corporations subject to federal and state income taxes. The Company’s subsidiaries recognized an income tax expense of approximately $105,827 and Texas margin tax of approximately $22,091 for the year ended December 31, 2023. The Company’s subsidiaries recognized an income tax expense of approximately $0 and Texas margin tax of approximately $0 for the year ended December 31, 2022.
Previous report
Operating Income. For the year ended December 31, 2023, operating income was generated from the Company’s fee income and unrealized gains related to warrants received in an investment banking deal closed in the second quarter of 2023. Other income was generated from fees related to legal and strategy services offered by PatentVest, as well as clearing fees.
Previous report
*Other Income.*The increase in other income was interest from U.S. Treasury Bills due to moving all excess funds from cash into U.S. Treasury Bills.
Previous report
*Income Taxes.*The investment banking segment is a limited liability company. Limited liability companies are subject to Texas margin tax. The Company’s investment banking segment recognized an income tax expense of approximately $0 and recognized Texas margin tax of approximately $22,091 for the year ended December 31, 2023. The investment banking segment recognized an income tax expense of approximately $0 and Texas margin tax of approximately $0 for the year ended December 31, 2022.
Previous report
Technology Segment (Invizyne) Results of Operations for the Years Ended December 31, 2023 and 2022
Previous report
Research and Development Costs. The increase in research and development costs for the current period was partially offset by increased grant funding. For the year ended December 31, 2023, total research and development costs were $3,482,386, with $2,954,208 reimbursed by grants, resulting in net research and development costs of $474,234. For the year ended December 31, 2022, total research and development costs were $2,312,857, with $1,964,772 reimbursed by grants, resulting in net research and development costs of $348,085. The increase in research and development costs was driven primarily by an increase in compensation due to the hiring of additional research and development staff, an increase in lab supplies expense, and an increase in grant sub-award expenses issued to a third-party research partner.
Previous report
Financial Condition: Overall, the increase in cash & cash equivalents and investments at amortized cost primarily stemmed from the successful completion of the Initial Public Offering (IPO) on September 20, 2023. This event significantly boosted the company’s cash reserves and investments, notably through the acquisition of U.S. Treasury Bills. Additionally, there was an uptick in cash allocated in adherence to regulatory mandates earmarked for the initiation of self-clearing processes. The increase in prepaid expenses was due to deposits made for the self-clearing operation. The increase in grants receivable was driven by the timing of collection of grant funds from the prior period. The increase in investment securities at fair value was the result of common stock and warrants being received as part of the investment banking fee completed in the second quarter of 2023. The increase in investment securities, at cost less impairment was the result of PatentVest’s receipt of a new SAFE (Simply Agreement for Future Equity) on account of future work to be performed by Patentvest. The decrease in deferred offering costs was due to costs being allocated to the IPO as part of the closing of the MDB Capital Holdings IPO. Lastly, the increase in right of use asset was a result of leasing of new space by the technology sector next to their current space.
Previous report
The decrease in accounts payable was due to audit and legal bills paid in the fourth quarter. The increase in accrued expenses was due to increased liabilities due to the self clearing operations and bonus payment to employees paid in the first quarter of 2024. The decrease in deferred grant reimbursement was driven by the accretion of deferred grant reimbursement and reduction in lab equipment purchase. The increase in deferred revenue was due to contracts for which PatentVest has entered into and received pre-payment on. The increase in lease liabilities was a result of the leasing of new space by the technology sector next to their current space.
Previous report
For the year ended December 31, 2022, operating activities use of cash represented a combination of increased activity in Invizyne, increased professional and consulting fees related to the business reorganization of the Company and payout of pervious equity of the members as part of the reorganization.
Previous report
For the year ended December 31, 2022, investing activities consisted of the purchase of laboratory equipment, and leasehold improvements to expand Invizyne’s lab facility, as well as the purchase of U.S. Treasury Bills.
Previous report
For the year ended December 31, 2022 financing activities consisting of the receipt of net proceeds of $21,681,158 from a private placement by the Company.
Previous report
On May 1, 2023, stock options to purchase 103,880 shares of Common Stock were granted at an exercise price of $1.66 per share, which was equal to the fair value of the Common Stock on the date of grant and are exercisable for a period of 7 years. The stock options vest ratably over a period of 5 years. The inputs used to determine the fair value was Common Stock price of $1.66, option exercise price of $1.66, expected life in years of 5 years, with a contract life of 7 years, risk-free rate of 3.64%, expected annual volatility of 121.70%, and annual rate of dividends of $0. On November 1, 2023, stock options to purchase 914,130 shares of Common Stock were granted at an exercise price of $1.66 per share, which was equal to the fair value of the Common Stock on the date of grant and are exercisable for a period of 7 years. The stock options vest ratably over a period of 5 years. The inputs used to determine the fair value was Common Stock price of $1.66, option exercise price of $1.66, expected life in years of 5 years, with a contract life of 7 years, risk-free rate of 4.67%, expected annual volatility of 144.94%, and annual rate of dividends of $0. As of December 31, 2023, stock options to purchase 636,478 shares of Common Stock were vested, the weighted average exercise price is $1.43, the aggregate intrinsic value is $0.00, and the weighted average remaining contractual term is 5.77 years. Invizyne stock-based compensation were $281,538 and $216,503 for the years ended December 31, 2023 and 2022. As of December 31, 2023, the unrecognized stock-based compensation is $1,879,969.
Previous report
On February 1, 2024 the board of directors for Invizyne approved a stock dividend at the rate of 1.0775673 share for every one (1) share of our issued and outstanding Common Stock. No fractional shares were issued as a result of the stock dividend; any fractional share resulting from the stock dividend was rounded up to the next whole share. As a result of the stock dividend, proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all stock options, restricted stock units and warrants issued by us and outstanding immediately prior to the effective time of the stock dividend, which resulted in a proportionate increase in the number of shares of our Common Stock reserved for issuance upon exercise or vesting of such stock options, restricted stock units and warrants and a proportionate decrease in the exercise price of all such stock options, restricted stock units and warrants. In addition, the number of shares reserved for issuance under our equity compensation plans increased proportionately. All share and per share amounts of Common Stock have been retroactively adjusted to reflect the Common Stock dividend. Consequently, this dividend distribution adjusted the stock/exercise price from $2.53 per share to $1.22 per share.
Previous report
On June 15, 2022, the Company completed the first 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 have been and will continue to be used for the development of Invizyne, identifying and developing new partner companies, and general corporate and working capital requirements.
Previous report
Invizyne Funding Requirements
Previous report
The Company has entered into a funding agreement (the “Funding Agreement”) to purchase shares in Invizyne up to a maximum of $5,000,000 at a pre-determined purchase price, subject to continuing financial covenants being met. As of December 31, 2023 and December 31, 2022, the maximum amount of $5,000,000, has been funded, bringing the ownership interest of the Company in Invizyne to 60.94% at December 31, 2023 and 2022. The Company waived its 10% cash fee relative to the Funding Agreement in exchange for increased ownership. As a condition of the Funding Agreement, warrants to purchase 410,586 shares of Invizyne common stock were issuable (the “Funding Warrants”), which vest as amounts are funded. As of December 31, 2023 and 2022, 197,628 Funding Warrants have vested. These warrants are eliminated in consolidation. As part the Funding Agreement, the Company entered into an Investor Rights Agreement and a Registration Rights Agreement with Invizyne.
Previous report
MDB Capital Holdings, LLC waived its 10% cash fee relative to the Funding Agreement in exchange for other modifications to the terms of the agreement.
Reworded paragraphs (23)
Previous wording
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 (“Public Ventures”); and PatentVest, Inc. (“PatentVest”), and has a majority-owned partner company, Invizyne Technologies, Inc. (“Invizyne”).
Current wording
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”), and has one majority-owned partner company MDB Minnesota One, Inc. (“MDB Minnesota One”) and one minority owned company eXoZymes Technologies, Inc., formerly known as Invizyne Technologies, Inc., (“eXoZymes”), that was majority owned and is consolidated up to until November 14, 2024, when eXoZymes issued securities in its IPO and no longer majority owned by MDB. eXoZymes is no longer consolidated into the financial statements of MDB.
Previous wording
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, whom 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.
Current wording
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
Previous wording
Invizyne was formed with the objective of taking nature’s building blocks to make molecules of interest, effectively simplifying nature. Invizyne is a biology technology development company that is a majority-owned subsidiary. Invizyne’s technology is a differentiated and unique synthetic biology platform which is designed to enable the scalable exploration of a large number of molecules and properties found in nature.
Current wording
eXoZymes, formerly known as Invizyne, was formed with the objective of taking nature’s building blocks to make molecules of interest, effectively simplifying nature. eXoZymes is a biology technology development company that is a minority-owned subsidiary as of the date of the financial statements included in this annual report. Invizyne’s technology is a differentiated and unique synthetic biology platform which is designed to enable the scalable exploration of a large number of molecules and properties found in nature. eXoZymes was majority owned by MDB Capital Holdings, up until November 14, 2024.
Previous wording
For the year ended December 31, 2023, the majority of operating income was generated from the Company’s fee income and unrealized gains related to warrants received in an investment banking deal closed in the second quarter of 2023 in the broker-dealer and intellectual property service segment. Other income was generated from a feasibility study conducted in the technology segment and fees related to legal and strategy services offered by PatentVest, as well as clearing fees in the investment banking services segment.
Current wording
For the year ended December 31, 2024, operating income was generated from the Company’s fee from two investment banking transactions in the broker-dealer and patent related intellectual property services. The decrease compared to the prior year is attributable to reduced investment banking activity, as the Company executed significantly larger transactions in the previous year. For the year ended December 31, 2023, operating income was generated from the Company’s fee income and unrealized gains related to warrants received as compensation for investment banking services in the second quarter of 2023 in the broker-dealer and intellectual property service segment.
Previous wording
Research and Development Costs. For the years ended December 31, 2023 and 2022, respectively, the research and development costs were derived from the Company’s technology segment.
Current wording
Research and Development Costs. For the years ended December 31, 2024 and 2023, respectively, the research and development costs derived from the Company’s technology segment.
Previous wording
Change in fair value of the SAFE. The technology division received a SAFE (Simple Agreement for Future Equity) from the parent company as operating capital prior to the initial public offering. Because the SAFE originates from the parent company, it is removed during the consolidation process.
Current wording
Change in fair value of the SAFE. The technology division received a SAFE (Simple Agreement for Future Equity) from the parent company as operating capital prior to the initial public offering. Because the SAFE originates from the parent company, it is removed during the consolidation process. The SAFE was converted on November 14, 2024, into shares of common stock of eXoZymes.
Previous wording
*Income Taxes.*The technology segment is a corporation for federal and state income tax purposes, The technology segment recognized an income tax expense of approximately $105,827 for the year ended December 31, 2023. The technology segment recognized an income tax expense of approximately $0 for the year ended December 31, 2022.
Current wording
*Income Taxes.*The technology segment is a corporation for federal and state income tax purposes, The technology segment recognized an income tax expense related to taxable grant income of approximately $105,827 for the year ended December 31, 2023.
Previous wording
The equity increase was primarily driven by the Company’s IPO that closed on September 20, 2023.
Current wording
The equity increase was primarily driven by the deconsolidation in the equity investment of eXoZymes.
Previous wording
The decrease in non-controlling interest was a result of the net loss in Invizyne.
Current wording
The decrease in non-controlling interest was a result of the deconsolidation of eXoZymes, formerly known as Invizyne.
Previous wording
At December 31, 2023, the Company had working capital of $30,593,820, as compared to working capital of $21,307,367 at December 31, 2022, reflecting an increase in working capital of $9,286,453 for the year ended December 31, 2023. The increase in working capital during the year ended December 31, 2023 was primarily the result of proceeds from the initial public offering placement and fee income, offset by the expenditures to fund the Company’s operating expenses. At December 31, 2023, the Company had cash of $7,357,687, of which $1,247,881 cash segregated in compliance with regulations, and short-term U.S. Treasury bills of $24,658,611 available to fund its operation.
Current wording
At December 31, 2024, the Company had working capital of $19,822,938, as compared to working capital of $28,925,236 at December 31, 2023, reflecting a decrease in working capital of $9,102,398 for the year ended December 31, 2023. The decrease in working capital during the year ended December 31, 2024 was primarily the result of the expenditures to fund the Company’s operating expenses. At December 31, 2024, the Company had cash of $21,281,233, of which $843,741 was cash segregated in compliance with regulations that are not to fund its operations.
Previous wording
Operating Activities*.*For the year ended December 31, 2023, operating activities utilized cash of $7,161,037, the overall decline in cash remained consistent across the period. Despite a reduction in net loss compared to the previous period, there was a rise in fee income received in the form of warrants instead of cash. Additionally, there was accretion of investments at amortized costs (U.S. Treasury Bills) and the acquisition of investment securities, funded by cash received as part of an investment banking deal. This purchase had been agreed upon as part of the aforementioned deal.
Current wording
For the year ended December 31, 2023, operating activities utilized cash of $7,125,622, the overall decline in cash remained consistent across the period. Despite a reduction in net loss compared to the previous period, there was a rise in fee income received in the form of warrants instead of cash. Additionally, there was accretion of investments at amortized costs (U.S. Treasury Bills) and the acquisition of investment securities, funded by cash received as part of an investment banking deal.
Previous wording
Investing Activities*.* For the year ended December 31, 2023, investing activities consisted of the proceeds from the sale and the maturing of U.S. Treasury Bills and purchases of investment securities, which was offset by the reinvestment of the proceeds into new U.S. Treasury Bills and the transfer of cash for operating activities.
Current wording
For the year ended December 31, 2023, the decrease in investing activities consisted of the proceeds from the sale and the maturing of U.S. Treasury Bills and purchases of investment securities, which was offset by the reinvestment of the proceeds into new U.S. Treasury Bills and the transfer of cash for operating activities.
Previous wording
Financing Activities*.* For the year ended December 31, 2023, financing activities consisted of the receipt of net proceeds of $17,763,991 from the initial public offering.
Current wording
For the year ended December 31, 2023 financing activities consisted of the receipt of net proceeds of $17,763,991 from MDB’s initial public offering.
Previous wording
The Company receives income from equity underwriting fees. As an underwriter, the Company helps clients raise capital via the private placement of various types of equity instruments. 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.
Current wording
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.
Previous wording
A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. At December 31, 2023 and 2022, Invizyne, Public Ventures, PatentVest, and MDB CG Management has established a full valuation allowance against all net deferred tax assets.
Current wording
A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. At December 31, 2024 and 2023, eXoZymes, formerly known as Invizyne, Public Ventures, PatentVest, MDB Minnesota One, and MDB CG Management have established a full valuation allowance against all net deferred tax assets.
Previous wording
Invizyne receives grant reimbursements, which are netted against research and development expenses in the consolidated statement of operations. Grant reimbursements for capitalized assets are recognized over the useful life of the assets, with the unrecognized portion considered a deferred liability and are included in accounts payable and accrued expenses in the consolidated balance sheet.
Current wording
The Company have and will develop partner companies that receives grant reimbursements, which are netted against research and development expenses in the consolidated statement of operations. Grant reimbursements for capitalized assets are recognized over the useful life of the assets, with the unrecognized portion considered a deferred liability and are included in accounts payable and accrued expenses in the consolidated balance sheet.
Previous wording
Grants that operate on a reimbursement basis are recognized on the accrual basis are revenues to extent of disbursements and commitments that are allowable for reimbursement of allowable expenses incurred as of December 31, 2023 and 2022, and expected to be received from funding sources in the subsequent year. Management considers such receivables at December 31, 2023 and 2022, respectively, to be fully collectable, due to the historical experience with the Federal Government of the United States of America. Accordingly, no allowance for grants receivable was recorded in the accompanying consolidated financial statements.
Current wording
Grants that operate on a reimbursement basis are recognized on the accrual basis are revenues to extent of disbursements and commitments that are allowable for reimbursement of allowable expenses incurred as of December 31, 2024 and 2023 and expected to be received from funding sources in the subsequent year. Management considers such receivables at December 31, 2024 and 2023, to be fully collectable, due to the historical experience with the Federal Government of the United States of America. Accordingly, no allowance for grants receivable was recorded in the accompanying consolidated financial statements.
Previous wording
Research grants received from organizations are subject to the contract agreement as to how Invizyne conducts its research activities, and Invizyne is required to comply with the agreement terms relating to those grants. Amounts received under research grants are nonrefundable, regardless of the success of the underlying research project, to the extent that such amounts are expended in accordance with the approved grant project. Invizyne is permitted to draw down (a process of submitting expenses for reimbursement) the research grants after incurring the related expenses. Amounts received under research grants are offset against the related research and development costs in the Company’s consolidated statement of operations.
Current wording
Research grants received from organizations are subject to the contract agreement as to how our partner companies, conducts its research activities, and our partner companies is required to comply with the agreement terms relating to those grants. Amounts received under research grants are nonrefundable, regardless of the success of the underlying research project, to the extent that such amounts are expended in accordance with the approved grant project. Our partner companies is permitted to draw down (a process of submitting expenses for reimbursement) the research grants after incurring the related expenses. Amounts received under research grants are offset against the related research and development costs in the Company’s consolidated statement of operations.
Previous wording
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 historical volatility of the Company’s common shares, calculated utilizing a look-back 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.
Current wording
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 look-back 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.
Previous wording
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 will be used for the development of Invizyne, identifying and developing new partner companies, and general corporate and working capital requirements.
Current wording
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 have been used for operations and funding its partner companies, as well as identifying and developing new partner companies.
Previous wording
Public Ventures 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 December 31, 2023 and 2022, Public Ventures had net capital of $7,331,449 and $3,086,889, respectively, which was $7,081,449 and $2,836,889 in excess of the minimum $250,000, as required by the Securities and Exchange Commission Rule 15c3-1.
Current wording
Public Ventures 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 December 31, 2024 and 2023, Public Ventures had net capital of $10,736,754 and $7,331,449, respectively, which was $10,486,754 and $7,081,449 in excess of the minimum $250,000, as required by the Securities and Exchange Commission Rule 15c3-1.
Previous wording
At December 31, 2023, the Company’s ratio of aggregate indebtedness of $3,372,465 to net capital was 0.46 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 6 2/3% of aggregate indebtedness, which was calculated as $224,831 at December 31, 2023.
Current wording
The Company’s ratio of aggregate indebtedness of $6,535,922 to net capital was 0.61 to 1 compared to the maximum 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 aggregate customer debits, which was $0 at December 31, 2024.
Previous wording
Public Ventures has agreed to indemnify its clearing brokers for losses that the clearing brokers 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 December 31, 2023 and 2022, have subsequently settled with no resulting material liability to Public Ventures. For the years ended December 31, 2023 and 2022, Public Ventures, had no material loss due to counterparty failure and had no obligations outstanding under the indemnification arrangement as of December 31, 2023 and 2022.
Current wording
Public Ventures has agreed to indemnify its clearing broker for losses that the clearing brokers 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 December 31, 2024 and 2023, have subsequently settled with no resulting material liability to Public Ventures. For the years ended December 31, 2024 and 2023, Public Ventures, had no material loss due to counterparty failure and had no obligations outstanding under the indemnification arrangement as of December 31, 2024 and 2023.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
General and Administrative Costs. During the years ended December 31, 2024, and 2023, respectively, several factors contributed to changes in various expense categories:
Current report — wording carried from elsewhere
Financing Activities*.* For the year ended December 31, 2024, financing activities consisted of deferred IPO costs being recognized.